SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 15, 2004
Lakeland Financial Corporation
(Exact name of Registrant as specified in its charter)
Indiana 0-11487 35-1559596
(State or other jurisdiction (Commission file (I.R.S. Employer
of incorporation) Number) Identification Number)
202 East Center Street, P.O. Box 1387, Warsaw, Indiana 46581-1387
(Address of principal executive offices) (Zip Code)
(574) 267-6144
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Solicitation material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b)
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c)
Item 2.02. Results of Operations and Financial Condition
On October 15, 2004, Lakeland Financial Corporation issued a press
release announcing its earnings for the nine-months and three-months ended
September 30, 2004. The news release is attached as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits
(c) Exhibits
99.1 Press Release dated October 15, 2004
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LAKELAND FINANCIAL CORPORATION
Dated: October 15, 2004 By: /s/David M. Findlay
David M. Findlay
Chief Financial Officer
Exhibit 99.1
FOR IMMEDIATE RELEASE Contact: David M. Findlay
Executive Vice President
and Chief Financial Officer
(574) 267-9197
RECORD INCOME FOR LAKELAND FINANCIAL
Third Quarter Performance and Cash Dividend Announced
Warsaw, Indiana (October 15, 2004) - Lakeland Financial Corporation
(Nasdaq/LKFN), parent company of Lake City Bank, today reported record
quarterly net income of $4.0 million for the third quarter of 2004. This
record income performance represents an increase of 10% over the $3.6 million
reported for the third quarter of 2003 and an increase of 18% versus $3.3
million in the second quarter of 2004. Diluted net income per share for the
quarter was $0.65 versus $0.60 for the third quarter of 2003 and $0.55 for the
second quarter of 2004. Net income for the nine months ended September 30,
2004 was $10.8 million, and diluted net income per share was $1.78 versus
$10.9 million, or $1.81 per diluted share, for the first nine months of 2003.
Michael L. Kubacki, Chairman, President and Chief Executive Officer,
commented, "Our penetration has continued in 2004 in every market we serve as
we have experienced loan growth of nearly 10% versus our year-end 2003 total
loans. This loan growth of over $80 million in 2004 has contributed to a
positive growth trend in net interest income during the third quarter versus
the first two quarters of 2004."
"In addition, as a result of recent interest rate increases, we
experienced an improved net interest margin during the quarter that should
positively impact our performance for the balance of 2004. An improving net
interest margin, in conjunction with healthy loan growth, should result in a
continued improvement in net interest income performance," added Kubacki.
The Company also announced that the Board of Directors approved a cash
dividend for the third quarter of $0.21 per share, payable on October 25, 2004
to shareholders of record on October 10, 2004. The quarterly dividend
represents an 11% increase over the quarterly dividend of $0.19 paid in 2003.
Noninterest income excluding mortgage sales gains increased by 9% for the
first nine months of 2004 versus the comparable period in 2003. Leading the
improvement were a $517,000 increase in trust and brokerage fees, which
increased 29%, and a $344,000 increase in credit card fees, which increased
26%. Net gains on the sale of mortgages held for sale were $724,000 in the
first nine months versus $2.7 million during the comparable period in 2003.
Kubacki observed, "Our ongoing focus on increasing fee based services has
continued to positively leverage infrastructure and create incremental income
impact. As revenue from the mortgage business has declined due to higher
mortgage rates and a general slowdown in the mortgage business, our
noninterest income generation has improved in all other categories."
"We are particularly proud of the fact that noninterest expense was
unchanged at $27.3 million year-to-date versus 2003, reflective of our focus
on managing costs in a tight interest rate environment," continued Kubacki.
Total loans as of September 30, 2004 were $952.7 million versus $929.6
million as of June 30, 2004, and $870.9 million as of December 31, 2003.
Average loans during the third quarter of 2004 were $939.9 million compared to
$924.8 million in the second quarter of 2004 and $847.6 million for all of
2003.
Lakeland Financial's allowance for loan losses as of September 30, 2004
was $10.7 million compared to $10.6 million as of June 30, 2004 and $10.1
million as of September 30, 2003. Total non-performing assets were $10.9
million as of September 30, 2004 versus $4.7 million as of June 30, 2004 and
$6.2 million as of September 30, 2003. The ratio of non-performing assets to
loans was 1.14% on September 30, 2004 compared to 0.51% at June 30, 2004 and
0.73% as of September 30, 2003. Net charge offs totaled $141,000 for the first
nine months of 2004 versus $1.2 million in the comparable period of 2003. For
the nine months ended September 30, 2004, net charge offs were 0.02% of
average loans compared to 0.20% in the same period in 2003.
Kubacki commented, "As a result of the addition of a single commercial
credit of $6.1 million, we experienced an increase in total nonperforming
assets. The borrower filed for chapter 11 bankruptcy late in the third quarter
and is in the process of determining its future business strategy. Borrower
collateral and the personal guarantees of its principals support the credit.
While we are disappointed with this event, we believe that the borrower and
guarantors are committed to working with us to resolve this situation."
For the nine months ended September 30, 2004, Lakeland Financial's
average equity to average assets ratio was 7.23% versus 7.05% for the
comparable period in 2003. Average stockholders' equity for the first nine
months of 2004 was $95.1 million versus $87.4 million for the comparable
period in 2003. Average total deposits for the nine months ended September 30,
2004 were $1.003 billion versus $961.8 million for the comparable period in
2003.
Lakeland Financial Corporation is a $1.3 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". Marketmakers in Lakeland Financial Corporation common
shares include FTN Financial Securities Corp., Goldman, Sachs & Co., Hill,
Thompson, Magid & Co., Howe Barnes Investments, Inc., Keefe, Bruyette & Woods,
Inc., Knight Equity Securities, L.P., Merrill Lynch & Co., Morgan Stanley &
Co., Inc., Sandler O'Neill & Partners, Schwab Capital Markets, Stifel Nicolaus
& Company, Inc., Susquehanna Capital Group and Trident Securities.
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
THIRD QUARTER 2004 FINANCIAL HIGHLIGHTS
(Unaudited - Dollars in thousands except Share and Per Share Data)
Three Months Ended Nine Months Ended
------------------------------------------ -------------------------
Sep. 30, Jun. 30, Sep. 30, Sep. 30, Sep. 30,
2004 2004 2003 2004 2003
----------- ---------- ------------ ----------- ------------
END OF PERIOD BALANCES
Assets $ 1,349,534 $ 1,338,100 $ 1,249,417 $ 1,349,534 $ 1,249,417
Deposits 1,043,513 1,022,335 1,002,037 1,043,513 1,002,037
Loans 952,671 929,565 847,714 952,671 847,714
Allowance for Loan Losses 10,741 10,643 10,064 10,741 10,064
Common Stockholders' Equity 98,737 92,930 88,799 98,737 88,799
AVERAGE BALANCES
Assets
Total Assets $ 1,338,968 $ 1,323,015 $ 1,245,753 $ 1,314,524 $ 1,232,252
Earning Assets 1,229,356 1,212,945 1,141,973 1,206,493 1,130,915
Investments 279,907 280,159 267,756 280,704 270,941
Loans 939,914 924,817 853,425 916,228 843,271
Liabilities and Stockholders' Equity
Total Deposits 1,022,216 1,016,951 982,617 1,002,702 961,770
Interest Bearing Deposits 809,971 808,726 804,096 800,209 792,761
Interest Bearing Liabilities 1,020,926 1,013,015 971,005 1,008,805 965,374
Common Stockholders' Equity 97,490 93,808 87,899 95,081 87,395
INCOME STATEMENT DATA
Net Interest Income $ 10,814 $ 10,278 $ 10,405 $ 31,300 $ 31,699
Net Interest Income-Fully Tax Equivalent 11,130 10,609 10,682 32,273 31,927
Provision for Loan Losses 150 246 380 648 1,764
Noninterest Income 4,531 4,146 4,481 12,837 13,806
Noninterest Expense 9,201 9,195 9,096 27,304 27,334
Net Income 3,951 3,344 3,591 10,797 10,855
PER SHARE DATA
Basic Net Income Per Common Share $ 0.67 $ 0.57 $ 0.62 $ 1.84 $ 1.87
Diluted Net Income Per Common Share 0.65 0.55 0.60 1.78 1.81
Cash Dividends Per Common Share 0.21 0.21 0.19 0.63 0.57
Book Value Per Common Share (equity per share issued) 16.80 15.82 15.25 16.80 15.25
Market Value - High 34.46 34.49 34.40 38.05 34.40
Market Value - Low 30.74 28.31 29.51 28.31 23.00
Basic Weighted Average Common Shares Outstanding 5,874,981 5,859,474 5,819,671 5,859,191 5,816,830
Diluted Weighted Average Common Shares Outstanding 6,058,608 6,048,256 6,017,241 6,053,125 5,982,283
KEY RATIOS
Return on Average Assets 1.17 % 1.02 % 1.15 % 1.10 % 1.18 %
Return on Average Common Stockholders' Equity 16.12 14.34 16.33 15.17 16.73
Efficiency (Noninterest Expense / Net Interest Income
plus Noninterest Income) 59.96 65.19 61.08 61.86 60.05
Average Equity to Average Assets 7.28 7.10 7.01 7.23 7.05
Net Interest Margin 3.60 3.52 3.71 3.57 3.84
Net Charge Offs to Average Loans 0.02 0.04 0.05 0.02 0.20
Loan Loss Reserve to Loans 1.13 1.14 1.19 1.13 1.19
Nonperforming Assets to Loans 1.14 0.51 0.73 1.14 0.73
Tier 1 Leverage 9.24 9.14 8.31 9.24 8.31
Tier 1 Risk-Based Capital 11.72 11.60 10.77 11.72 10.77
Total Capital 12.74 12.63 11.82 12.74 11.82
ASSET QUALITY
Loans Past Due 90 Days or More $ 2,821 $ 2,855 $ 3,226 $ 2,821 $ 3,226
Non-accrual Loans 7,779 1,575 1,291 7,779 1,291
Net Charge Offs 52 80 102 141 1,232
Other Real Estate Owned 277 277 1,530 277 1,530
Other Nonperforming Assets 28 30 120 28 120
Total Nonperforming Assets 10,905 4,737 6,167 10,905 6,167
LAKELAND FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
As of September 30, 2004 and December 31, 2003
(in thousands)
September 30, December 31,
2004 2003
------------ ------------
(Unaudited)
ASSETS
Cash and cash equivalents:
Cash and due from banks $ 47,134 $ 52,297
Short-term investments 6,696 5,144
------------ ------------
Total cash and cash equivalents 53,830 57,441
Securities available-for-sale:
U. S. Treasury and government agency securities 21,950 17,280
Mortgage-backed securities 208,902 211,142
State and municipal securities 54,131 52,945
------------ -----------
Total securities available-for-sale 284,983 281,367
Real estate mortgages held-for-sale 2,298 3,431
Loans:
Total loans 952,671 870,882
Less: Allowance for loan losses 10,741 10,234
------------ ------------
Net loans 941,930 860,648
Land, premises and equipment, net 25,372 26,157
Accrued income receivable 5,254 5,010
Goodwill 4,970 4,970
Other intangible assets 1,299 1,460
Other assets 29,598 30,930
------------ ------------
Total assets $ 1,349,534 $ 1,271,414
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest bearing deposits $ 211,262 $ 185,734
Interest bearing deposits 832,251 740,657
------------ ------------
Total deposits 1,043,513 926,391
Short-term borrowings:
Federal funds purchased 22,500 24,000
Securities sold under agreements
to repurchase 71,794 102,601
U.S. Treasury demand notes 2,792 3,160
Other borrowings 60,000 55,000
------------ ------------
Total short-term borrowings 157,086 184,761
Accrued expenses payable 7,548 7,804
Other liabilities 1,676 1,461
Long-term borrowings 10,046 30,047
Subordinated debentures 30,928 30,928
------------ ------------
Total liabilities 1,250,797 1,181,392
STOCKHOLDERS' EQUITY
Common stock: No par value, 90,000,000 shares authorized,
5,876,744 shares issued and 5,842,377 outstanding as of
September 30, 2004, and 5,834,744 shares issued and 5,788,263
outstanding at December 31, 2003 1,453 1,453
Additional paid-in capital 11,461 10,509
Retained earnings 87,359 80,260
Accumulated other comprehensive income/(loss) (796) (1,282)
Treasury stock, at cost (740) (918)
------------ ------------
Total stockholders' equity 98,737 90,022
------------ ------------
Total liabilities and stockholders' equity $ 1,349,534 $ 1,271,414
============ ============
LAKELAND FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
For the Three Months and Nine Months Ended September 30, 2004 and 2003
(in thousands except for share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------- ---------------------------
2004 2003 2004 2003
------------ ------------ ------------ ------------
INTEREST AND DIVIDEND INCOME
- ----------------------------
Interest and fees on loans: Taxable $ 12,352 $ 11,543 $ 35,255 $ 35,453
Tax exempt 67 74 206 203
------------ ------------ ------------ ------------
Total loan income 12,419 11,617 35,461 35,656
Short-term investments 33 48 82 133
Securities:
U.S. Treasury and government agency securities 191 145 534 460
Mortgage-backed securities 1,780 2,473 5,484 8,099
State and municipal securities 585 550 1,757 1,475
------------ ------------ ------------ ------------
Total interest and dividend income 15,008 14,833 43,318 45,823
INTEREST EXPENSE
- ----------------
Interest on deposits 3,249 3,421 9,381 10,909
Interest on short-term borrowings 517 244 1,215 897
Interest on long-term debt 428 763 1,422 2,318
------------ ------------ ------------ ------------
Total interest expense 4,194 4,428 12,018 14,124
------------ ------------ ------------ ------------
NET INTEREST INCOME 10,814 10,405 31,300 31,699
- -------------------
Provision for loan losses 150 380 648 1,764
------------ ------------ ------------ ------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 10,664 10,025 30,652 29,935
- ------------------------- ------------ ------------ ------------ ------------
NONINTEREST INCOME
- ------------------
Trust and brokerage fees 800 627 2,319 1,802
Service charges on deposit accounts 1,840 1,736 5,194 5,136
Credit card fee income 576 487 1,657 1,313
Other income (net) 884 1,256 2,943 2,908
Net gains on sale of real
estate mortgages held for sale 431 383 724 2,655
Net securities losses 0 (8) 0 (8)
------------ ------------ ------------ ------------
Total noninterest income 4,531 4,481 12,837 13,806
NONINTEREST EXPENSE
- -------------------
Salaries and employee benefits 4,921 5,076 14,705 14,789
Occupancy and equipment expense 1,203 1,192 3,334 3,772
Data processing expense 656 562 1,901 1,835
Credit card interchange 404 285 1,037 728
Other expense 2,017 1,981 6,327 6,210
------------ ------------ ------------ ------------
Total noninterest expense 9,201 9,096 27,304 27,334
INCOME BEFORE INCOME TAX EXPENSE 5,994 5,410 16,185 16,407
- --------------------------------
Income tax expense 2,043 1,819 5,388 5,552
------------ ------------ ------------ ------------
NET INCOME $ 3,951 $ 3,591 $ 10,797 $ 10,855
- ---------- ============ ============ ============ ============
BASIC WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 5,874,981 5,819,671 5,859,191 5,816,830
BASIC EARNINGS PER COMMON SHARE $ 0.67 $ 0.62 $ 1.84 $ 1.87
- ------------------------------- ============ ============ ============ ============
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 6,058,608 6,017,241 6,053,125 5,982,283
DILUTED EARNINGS PER COMMON SHARE $ 0.65 $ 0.60 $ 1.78 $ 1.81
- --------------------------------- ============ ============ ============ ============