Exhibit 99.1
FOR IMMEDIATE RELEASE Contact: David M. Findlay
Executive Vice President-
Administration and
Chief Financial Officer
(574) 267-9197
18th CONSECUTIVE YEAR OF RECORD
EARNINGS REPORTED FOR LAKE CITY BANK
Warsaw, Indiana (January 17, 2006) - Lakeland Financial Corporation
(Nasdaq/LKFN), parent company of Lake City Bank, today reported record net
income of $18.0 million for the year ended December 31, 2005, an increase of
23% versus $14.5 million for 2004. Diluted net income per share for the year
ended December 31, 2005 was $2.92 versus $2.40 for 2004, an increase of 22%.
The Company also announced that the Board of Directors approved a cash
dividend for the fourth quarter of $0.23 per share, payable on January 25,
2006 to shareholders of record on January 10, 2006. The quarterly dividend
represents a 10% increase over the quarterly dividend of $0.21 paid in 2004.
Michael L. Kubacki, Chairman, President and Chief Executive Officer,
commented, "For 18 consecutive years, Lake City Bank has posted record net
income. This accomplishment is a result of the great efforts by the entire
Lake City Bank team. When our record earnings streak began in 1988, we were a
$207 million bank with 11 branches located primarily in the Warsaw market.
Today, we have 43 offices located in 12 Northern Indiana Counties with total
assets of $1.6 billion. While we've grown significantly, we remain committed
to developing meaningful, long term relationships in every Lake City Bank
community. Our business and retail clients recognize our role as partners in
building their financial success."
Net income for the fourth quarter of 2005 was $5.0 million versus $3.7
million for the comparable period of 2004, an increase of 33%. Diluted net
income per share was $0.81 for the fourth quarter of 2005, an increase of 31%
versus $0.62 in the comparable period of 2004. During the fourth quarter of
2005, the Company completed the sale of its retail credit card portfolio,
which contributed to the increase in net income for the quarter and the year.
The sale of the portfolio resulted in a pre-tax gain of $863,000, or $513,000
on an after-tax basis. Excluding the impact of the gain on sale, net income
for the fourth quarter would have been $4.5 million, or diluted net income per
share of $0.72 per share. For the twelve months ended December 31, 2005, net
income excluding the impact of the gain on sale would have been $17.4 million,
or diluted net income per share of $2.84, a 20% increase versus $14.5 million
in 2004.
Kubacki commented on the retail card portfolio sale, "In order to provide
our retail and business clients with a fully featured credit card, we
implemented a new card program during the quarter and sold the existing
portfolio. Our new card initiative will give our clients a wide array of
options when selecting a Lake City Bank Visa (R) card that will meet their
specific interests, such as points and mileage programs. It's an exciting
addition to our menu of retail and commercial services geared to ensuring that
our customers have access to leading banking services focused on their
financial needs."
Driven by the highest volume of loan growth in the Bank's history, net
interest income increased to $50.1 million in 2005 versus $43.2 million in
2004. The net interest margin of 3.70% for the year was an improvement over a
margin of 3.60% in 2004. "We generated $196 million of loan growth in 2005,
resulting in total loans of $1.2 billion at year end. The growth was
distributed throughout the Bank's Northern Indiana footprint and represented a
20% increase in total loans during the year. This level of loan growth is a
reflection of our successful penetration throughout all of our markets,
including South Bend, Warsaw, Elkhart and Fort Wayne," added Kubacki.
Average total loans for the fourth quarter of 2005 were $1.166 billion
versus $1.116 billion during the third quarter of 2005, a linked-quarter
increase of 5%. Total loans as of December 31, 2005 were $1.199 billion, an
increase of $53.4 million, versus $1.145 billion as of September 30, 2005.
Total loans as of December 31, 2004 were $1.003 billion.
He continued, "The Bank's efficiency ratio, which demonstrates our
ability to produce revenue in a cost effective manner, improved to 56% in
2005, an all-time low and a gratifying reduction from 61% for 2004."
Noninterest expense increased only 4% during 2005 versus 2004, while total
revenues increased 14% year-over-year.
Lakeland Financial's allowance for loan losses as of December 31, 2005
was $12.8 million, compared to $12.2 million as of September 30, 2005 and
$10.8 million as of December 31, 2004. Non-performing assets totaled $7.5
million as of December 31, 2005 versus $7.8 million as of September 30, 2005
and $10.3 million on December 31, 2004. The ratio of non-performing assets to
loans was 0.63% on December 31, 2005 compared to 0.68% at September 30, 2005
and 1.02% at December 31, 2004. Net charge offs totaled $160,000 in the fourth
quarter of 2005 versus $159,000 during the third quarter of 2005 and $562,000
in the fourth quarter of 2004.
For the three months ended December 31, 2005, Lakeland Financial's
average equity to average assets ratio was 7.09% compared to 7.21% for the
third quarter of 2005 and 7.24% for the fourth quarter of 2004. Average
stockholders' equity for the quarter ended December 31, 2005 was $112.5
million versus $110.1 million for the third quarter of 2005 and $100.8 million
for the fourth quarter of 2004. Average total deposits were $1.304 billion for
the fourth quarter of 2005 versus $1.193 billion for the third quarter of 2005
and $1.126 billion for the fourth quarter of 2004.
Kubacki concluded, "We're excited by our plans for 2006 as we intend to
expand our presence in every Lake City Bank market. We anticipate that we will
begin development during 2006 of two additional offices in the Fort Wayne
market and we've significantly expanded our trust and investment capabilities
in that market. Furthermore, we're confident that the reputation we've
established as the bank for business in Northern Indiana will continue as we
grow."
Lakeland Financial Corporation is a $1.6 billion bank holding company
headquartered in Warsaw, Indiana. Lake City Bank serves Northern Indiana with
43 branches located in the following Indiana counties: Kosciusko, Elkhart,
Allen, St. Joseph, DeKalb, Fulton, Huntington, LaGrange, Marshall, Noble,
Pulaski and Whitley.
Lakeland Financial Corporation may be accessed on its home page at
www.lakecitybank.com. The Company's common stock is traded on the Nasdaq Stock
Market under "LKFN". Market makers in Lakeland Financial Corporation common
shares include Citadel Derivatives Group, LLC, Citigroup Global Market
Holdings, Inc., E*Trade Capital Markets LLC, FTN Midwest Securities Corp.,
Goldman Sachs & Company, Hill, Thompson, Magid & Co., Howe Barnes Investments,
Inc., Keefe, Bruyette & Woods, Inc., Knight Equity Markets, L.P., Lehman
Brothers Inc., Morgan Stanley & Co., Inc., Stifel Nicolaus & Company, Inc.,
Susquehanna Capital Group, UBS Capital Markets L.P., and UBS Securities LLC.
This document contains, and future oral and written statements of the
Company and its management may contain, forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 with respect
to the financial condition, results of operations, plans, objectives, future
performance and business of the Company. Forward-looking statements, which may
be based upon beliefs, expectations and assumptions of the Company's
management and on information currently available to management, are generally
identifiable by the use of words such as "believe," "expect," "anticipate,"
"plan," "intend," "estimate," "may," "will," "would," "could," "should" or
other similar expressions. Additionally, all statements in this document,
including forward-looking statements, speak only as of the date they are made,
and the Company undertakes no obligation to update any statement in light of
new information or future events.
A number of factors, many of which are beyond the ability of the Company
to control or predict, could cause actual results to differ materially from
those in its forward-looking statements. These factors include, among others,
the following: (i) the strength of the local and national economy; (ii) the
economic impact of past and any future terrorist attacks, acts of war or
threats thereof and the response of the United States to any such attacks and
threats; (iii) changes in state and federal laws, regulations and governmental
policies concerning the Company's general business; (iv) changes in interest
rates and prepayment rates of the Company's assets; (v) increased competition
in the financial services sector and the inability to attract new customers;
(vi) changes in technology and the ability to develop and maintain secure and
reliable electronic systems; (vii) the loss of key executives or employees;
(viii) changes in consumer spending; (ix) unexpected results of acquisitions;
(x) unexpected outcomes of existing or new litigation involving the Company;
and (xi) changes in accounting policies and practices. These risks and
uncertainties should be considered in evaluating forward-looking statements
and undue reliance should not be placed on such statements. Additional
information concerning the Company and its business, including additional
factors that could materially affect the Company's financial results, is
included in the Company's filings with the Securities and Exchange Commission.
LAKELAND FINANCIAL CORPORATION
FOURTH QUARTER 2005 FINANCIAL HIGHLIGHTS
(Unaudited - Dollars in thousands except Share and Per Share Data)
Three Months Ended Twelve Months Ended
---------------------------------------- --------------------------
Dec. 31, Sep. 30, Dec. 31, Dec. 31, Dec. 31,
2005 2005 2004 2005 2004
----------- ---------- ------------ ----------- ------------
END OF PERIOD BALANCES
Assets $ 1,634,613 $ 1,557,713 $ 1,453,122 $ 1,634,613 $ 1,453,122
Deposits 1,266,245 1,250,970 1,115,399 1,266,245 1,115,399
Loans 1,198,730 1,145,366 1,003,219 1,198,730 1,003,219
Allowance for Loan Losses 12,774 12,233 10,754 12,774 10,754
Common Stockholders' Equity 113,334 110,471 101,765 113,334 101,765
AVERAGE BALANCES
Assets
Total Assets $ 1,585,317 $ 1,525,945 $ 1,391,171 $ 1,499,155 $ 1,332,713
Earning Assets 1,468,493 1,413,814 1,281,124 1,385,931 1,225,253
Investments 286,856 287,968 285,344 286,863 281,870
Loans 1,166,371 1,115,866 974,732 1,088,788 930,934
Liabilities and Stockholders' Equity
Total Deposits 1,304,469 1,192,656 1,126,411 1,184,670 1,033,798
Interest Bearing Deposits 1,069,491 975,661 903,633 961,699 826,206
Interest Bearing Liabilities 1,225,277 1,188,964 1,057,924 1,157,539 1,021,152
Common Stockholders' Equity 112,468 110,060 100,779 108,218 95,436
INCOME STATEMENT DATA
Net Interest Income $ 13,187 $ 12,534 $ 11,549 $ 50,076 $ 43,172
Net Interest Income-Fully Tax Equivalent 13,481 12,832 11,869 51,251 44,461
Provision for Loan Losses 701 659 575 2,480 1,223
Noninterest Income 5,181 4,380 4,044 17,898 16,558
Noninterest Expense 10,041 9,355 9,356 38,057 36,660
Net Income 4,977 4,522 3,748 17,958 14,545
PER SHARE DATA
Basic Net Income Per Common Share $ 0.83 $ 0.76 $ 0.64 $ 3.01 $ 2.48
Diluted Net Income Per Common Share 0.81 0.73 0.62 2.92 2.40
Cash Dividends Per Common Share 0.23 0.23 0.21 0.92 0.84
Book Value Per Common Share (equity per share issued) 18.93 18.46 17.20 18.93 17.20
Market Value - High 45.19 43.88 40.90 45.19 40.90
Market Value - Low 38.01 38.60 33.80 35.00 28.31
Basic Weighted Average Common Shares Outstanding 5,985,751 5,978,865 5,893,060 5,963,878 5,867,705
Diluted Weighted Average Common Shares Outstanding 6,158,813 6,154,777 6,098,920 6,144,733 6,064,077
KEY RATIOS
Return on Average Assets 1.25 % 1.18 % 1.07 % 1.20 % 1.09 %
Return on Average Common Stockholders' Equity 17.56 16.30 14.80 16.59 15.30
Efficiency (Noninterest Expense / Net Interest Income
plus Noninterest Income) 54.67 55.31 60.00 55.99 61.38
Average Equity to Average Assets 7.09 7.21 7.24 7.22 7.13
Net Interest Margin 3.63 3.59 3.66 3.70 3.60
Net Charge Offs to Average Loans 0.05 0.05 0.23 0.04 0.08
Loan Loss Reserve to Loans 1.07 1.07 1.07 1.07 1.07
Nonperforming Assets to Loans 0.63 0.68 1.02 0.63 1.02
Tier 1 Leverage 9.21 8.96 9.15 9.21 9.15
Tier 1 Risk-Based Capital 10.81 10.93 11.41 10.81 11.41
Total Capital 11.80 11.91 12.38 11.80 12.38
ASSET QUALITY
Loans Past Due 90 Days or More $ 174 $ 218 $ 2,778 $ 174 $ 2,778
Non-accrual Loans 7,321 7,600 7,213 7,321 7,213
Net Charge Offs 160 159 562 460 703
Other Real Estate Owned 0 0 261 0 261
Other Nonperforming Assets 25 12 13 25 13
Total Nonperforming Assets 7,520 7,830 10,265 7,520 10,265
LAKELAND FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
As of December 31, 2005 and 2004
(in thousands)
December 31, December 31,
2005 2004
------------ ------------
(Unaudited)
ASSETS
Cash and due from banks $ 77,387 $ 81,144
Short-term investments 5,292 22,714
------------ ------------
Total cash and cash equivalents 82,679 103,858
Securities available-for-sale (carried at fair value) 290,935 286,582
Real estate mortgages held-for-sale 960 2,991
Loans:
Total loans 1,198,730 1,003,219
Less: Allowance for loan losses 12,774 10,754
------------ ------------
Net loans 1,185,956 992,465
Land, premises and equipment, net 24,563 25,057
Bank owned life insurance 19,654 16,896
Accrued income receivable 7,416 5,765
Goodwill 4,970 4,970
Other intangible assets 1,034 1,245
Other assets 16,446 13,293
------------ ------------
Total assets $ 1,634,613 $ 1,453,122
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Noninterest bearing deposits $ 247,605 $ 237,261
Interest bearing deposits 1,018,640 878,138
------------ ------------
Total deposits 1,266,245 1,115,399
Short-term borrowings:
Federal funds purchased 43,000 20,000
Securities sold under agreements
to repurchase 91,071 88,057
U.S. Treasury demand notes 2,471 2,593
Other borrowings 75,000 75,000
------------ ------------
Total short-term borrowings 211,542 185,650
Accrued expenses payable 10,423 7,445
Other liabilities 2,095 1,889
Long-term borrowings 46 10,046
Subordinated debentures 30,928 30,928
------------ ------------
Total liabilities 1,521,279 1,351,357
STOCKHOLDERS' EQUITY
Common stock: No par value, 90,000,000 shares authorized,
5,986,054 shares issued and 5,947,342 outstanding as of
December 31 2005, and 5,915,854 shares issued and 5,881,283
outstanding at December 31, 2004 1,453 1,453
Additional paid-in capital 14,287 12,463
Retained earnings 102,327 89,864
Accumulated other comprehensive income/(loss) (3,814) (1,267)
Treasury stock, at cost (919) (748)
------------ ------------
Total stockholders' equity 113,334 101,765
------------ ------------
Total liabilities and stockholders' equity $ 1,634,613 $ 1,453,122
============ ============
LAKELAND FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
For the Three Months and Twelve Months Ended December 31, 2005 and 2004
(in thousands except for share data)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
--------------------------- ---------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
NET INTEREST INCOME
- ----------------------------
Interest and fees on loans:
Taxable $ 19,669 $ 13,509 $ 68,230 $ 49,087
Tax exempt 50 81 182 287
Interest and dividends on securities:
Taxable 2,394 2,085 9,343 8,103
Tax exempt 582 587 2,341 2,344
Short-term investments 149 102 333 184
------------ ------------ ------------ ------------
Total interest and dividend income 22,844 16,364 80,429 60,005
Interest on deposits 8,192 4,016 24,331 13,397
Interest on short-term borrowings 841 341 3,790 1,556
Interest on long-term borrowings 624 458 2,232 1,880
------------ ------------ ------------ ------------
Total interest expense 9,657 4,815 30,353 16,833
------------ ------------ ------------ ------------
NET INTEREST INCOME 13,187 14,549 50,076 43,172
- -------------------
Provision for loan losses 701 575 2,480 1,223
------------ ------------ ------------ ------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 12,486 10,974 47,596 41,949
- ------------------------- ------------ ------------ ------------ ------------
NONINTEREST INCOME
- ------------------
Trust and brokerage fees 852 696 3,113 3,015
Service charges on deposit accounts 1,817 1,723 6,929 6,917
Loan, insurance and service fees 542 562 1,984 1,945
Merchant card fee income 578 562 2,435 2,219
Other income 390 238 1,709 1,475
Net gain on sale of credit card portfolio 863 0 863 0
Net gains on sale of real
estate mortgages held for sale 208 263 934 987
Net securities losses (69) 0 (69) 0
------------ ------------ ------------ ------------
Total noninterest income 5,181 4,044 17,898 16,558
NONINTEREST EXPENSE
- -------------------
Salaries and employee benefits 5,319 4,968 20,543 19,673
Net occupancy expense 715 694 2,774 2,496
Equipment costs 466 574 1,942 2,106
Data processing fees and supplies 681 645 2,396 2,546
Credit card interchange 369 360 1,527 1,397
Other expense 2,491 2,115 8,875 8,442
----------- ------------ ------------ ------------
Total noninterest expense 10,041 9,356 38,057 36,660
INCOME BEFORE INCOME TAX EXPENSE 7,626 5,662 27,437 21,847
- --------------------------------
Income tax expense 2,649 1,914 9,479 7,302
------------ ------------ ------------ ------------
NET INCOME $ 4,977 $ 3,748 $ 17,958 $ 14,545
- ---------- ============ ============ ============ ============
BASIC WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 5,985,751 5,893,060 5,963,878 5,867,705
BASIC EARNINGS PER COMMON SHARE $ 0.83 $ 0.64 $ 3.01 $ 2.48
- ------------------------------- ============ ============ ============ ============
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 6,158,813 6,098,920 6,144,733 6,064,077
DILUTED EARNINGS PER COMMON SHARE $ 0.81 $ 0.62 $ 2.92 $ 2.40
- --------------------------------- ============ ============ ============ ============