SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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FORM 8-K

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CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) July 27, 2009

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Lakeland Financial Corporation

(Exact name of Registrant as specified in its charter)

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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:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Solicitation material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)

o 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 July 27, 2009, Lakeland Financial Corporation issued a press release announcing its earnings for the three-months and six-months ended June 30, 2009. The news release is attached as Exhibit 99.1.

Item 9.01. Financial Statements and Exhibits

99.1 Press Release dated July 27, 2009

 

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

 

David M. Findlay

Chief Financial Officer

 

 

Exhibit 99.1

 

LAKE CITY BANK REPORTS 2nd QUARTER RESULTS

Quarterly Dividend Maintained

Warsaw, Indiana (July 27, 2009) – Lakeland Financial Corporation (Nasdaq Global Select/LKFN), parent company of Lake City Bank, today reported net income of $4.5 million for the second quarter of 2009 versus $4.8 million for the second quarter of 2008. Diluted net income per share for the quarter was $0.29 versus $0.39 for the comparable period of 2008. On a linked quarter basis, these results compared to net income of $3.9 million, or $0.29 per diluted share, for the first quarter of 2009.

 

The Company further reported net income of $8.3 million for the six months ended June 30, 2009 versus $10.0 million for the comparable period of 2008. Diluted net income per common share was $0.58 for the six months ended June 30, 2009 versus $0.81 for the comparable period of 2008. The Company also announced that the Board of Directors approved a cash dividend for the second quarter of $0.155 per share, payable on August 5, 2009 to shareholders of record as of July 25, 2009. The quarterly dividend is unchanged from the dividends paid in 2008 and in the first quarter of 2009.

 

Average total loans for the second quarter of 2009 were $1.89 billion versus $1.64 billion for the second quarter of 2008 and $1.84 billion for the linked first quarter of 2009. The year-over-year increase for the second quarter represented an increase of 15%, or $251 million. On a linked quarter basis, average loans increased by $47 million versus the first quarter of 2009. Total gross loans as of June 30, 2009 were $1.88 billion compared to $1.67 billion as of June 30, 2008 and $1.86 billion as of March 31, 2009.

 

Michael L. Kubacki, Chairman, President and Chief Executive Officer, commented, “Given the challenges in our regional and national economy, and the impact they have had on our client base, we are proud of our performance for the first six months of the year. At a time when many of our larger regional and national competitors appear to be refocusing away from our region and retrenching, we are moving forward and expanding our banking activities, particularly through increased lending in Indiana. We continue to focus our efforts on ensuring that Lake City Bank is positioned to serve our region as the leading bank for business. While we are certainly affected by the challenges our region faces today, we continue to build our business plan around future opportunities rather than dwelling only on today’s issues.”

 

The Company’s net interest margin was 3.45% in the second quarter versus 3.12% in the first quarter and 3.15% for the second quarter of 2008. This margin improvement, in conjunction with strong growth in loans, contributed to an increase of 26% in the Company’s net interest income to $19.5 million in the second quarter of 2009 versus $15.5 million in the second quarter of 2008. On a linked quarter basis, net interest income increased by 15% versus the first quarter of 2009.

 

The Company’s provision for loan losses increased by $1.9 million, or 63%, to $4.9 million for the second quarter of 2009 versus $3.0 million in the same period of 2008. In the first quarter of 2009, the provision was $4.5 million. The provision increases in 2009 were primarily driven by continued loan growth, the difficult economic conditions in the Company’s markets and an overall concern about borrowers’ performance and prospects.

 

The Company's non-interest income was $6.0 million in both the second quarters of 2009 and 2008. Total revenue for the second quarter of 2009 was $25.6 million versus $21.5 million for the comparable period of 2008, an increase of 19%. On a linked quarter basis, total revenue increased by 13% versus the first quarter of 2009.

 

The Company's non-interest expense was $14.2 million for the second quarter of 2009 compared to $11.6 million for the same period in 2008, an increase of 22%. Driving the increase was a $1.5 million increase in regulatory expense, which resulted from higher FDIC insurance premiums that have been levied on all financial institutions. In addition, salaries and employee benefits increased by $640,000, or 10%, versus the second quarter of 2008, primarily as a result of staff additions in lending positions in the Indianapolis loan production office, normal merit increases system-wide and increased health insurance costs. The Company's efficiency ratio for the second quarter of 2009 was 55%, compared to 54% for the same period in 2008, and improved from the 56% reported for the first quarter of 2009.

 

Net charge-offs totaled $1.3 million in the second quarter of 2009, versus $1.8 million during the second quarter of 2008 and $2.0 million during the first quarter of 2009. Lakeland Financial’s allowance for loan losses as of June 30, 2009 was $25.1 million, compared to $18.0 million as of June 30, 2008 and $21.4 million as of March 31, 2009. The allowance for loan losses increased to 1.33% of total loans as of June 30, 2009 versus 1.08% for the comparable period in 2008 and 1.15% as of March 31, 2009.

 

Nonperforming assets declined to $20.5 million as of June 30, 2009 compared to $21.5 million as of March 31, 2009 and $26.4 million on June 30, 2008. The ratio of nonperforming assets to total assets declined to 0.85% on June 30, 2009 compared to 0.88% on March 31, 2009 and 1.17% at June 30, 2008. The allowance for loan losses represented 127% of nonperforming loans as of June 30, 2009 versus 104% at March 31, 2009 and 72% at June 30, 2008.

 

Kubacki continued, “Clearly, the economy of Northern Indiana continues to face significant stress, which has had a negative impact on our client base, particularly the commercial clients that represent our core borrowers. Yet, our clients have continued to demonstrate a resiliency reflective of the entrepreneurial spirit of the region. We’re hopeful that an economic recovery is on the horizon as a prolonged recession could further weaken their businesses.”

 

“Like many banks throughout the country, we have grown our allowance for loan losses in response to these difficult times. Our allowance for loan losses has grown by more than a third in 2009 as we have actively monitored our asset quality situation. This prudent increase is a reflection of the negative factors impacting our clients and their businesses and the clear risk of potential loan losses. While we are cautiously pleased that our total nonperforming assets decreased slightly during the quarter, we do not believe that it is an indication of any consequential economic rebound. Rather, it’s more likely a sign of the ability of our clients to manage through a difficult period,” Kubacki added.

 

For the three months ended June 30, 2009, Lakeland Financial’s tangible capital to average assets ratio was 6.42% compared to 6.18% for the first quarter of 2009 and 6.53% for the second quarter of 2008. Average total capital to average assets for the quarter ended June 30, 2009 was 13.10% versus 12.86% for the first quarter of 2009 and 10.83% for the second quarter of 2008. Average total deposits for the quarter ended June 30, 2009 were $1.85 billion versus $1.91 billion for the first quarter of 2009 and $1.55 billion for the second quarter of 2008.

 

Lakeland Financial Corporation is a $2.4 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. The Company also has a Loan Production Office in Indianapolis, Indiana.

 

Lakeland Financial Corporation may be accessed on its home page at www.lakecitybank.com. The Company’s common stock is traded on the Nasdaq Global Select Market under “LKFN”. Market makers in Lakeland Financial Corporation common shares include Automated Trading Desk Financial Services, LLC, B-Trade Services, LLC, Citadel Derivatives Group, LLC, Citigroup Global Markets Holdings, Inc., Domestic Securities, Inc., E*TRADE Capital Markets LLC, FTN Financial Securities Corp., FTN Equity Capital Markets Corp., Goldman Sachs & Company, Howe Barnes Hoefer & Arnett, Inc., Keefe, Bruyette & Woods, Inc., Knight Equity Markets, L.P., Morgan Stanley & Co., Inc., Stifel Nicolaus & Company, Inc., Susquehanna Capital Group and UBS Securities LLC.

 

In addition to the results presented in accordance with generally accepted accounting principles in the United States of America, this press release contains certain non-GAAP financial measures. Lakeland Financial believes that providing non-GAAP financial measures provides investors with information useful to understanding Lakeland Financial’s financial performance. Additionally, these non-GAAP measures are used by management for planning and forecasting purposes, including measures based on “tangible equity” which is “common stockholders’ equity” excluding intangible assets, net of deferred tax. A reconciliation of these non-GAAP measures to the most comparable GAAP equivalent is included in the attached financial tables where the non-GAAP measure is presented.

 

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. Additional information concerning the Company and its business, including factors that could materially affect the Company’s financial results, is included in the Company’s filings with the Securities and Exchange Commission, including the Company’s Annual Report on form 10-K.

 

 

 

 

 

 

LAKELAND FINANCIAL CORPORATION

SECOND QUARTER 2009 FINANCIAL HIGHLIGHTS

(Unaudited – Dollars in thousands except share and per share data)

 

 

 

LAKELAND FINANCIAL CORPORATION

CONSOLIDATED BALANCE SHEETS

As of June 30, 2009 and December 31, 2008

(in thousands, except share data)

 

 

 

 

LAKELAND FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

For the Three Months and Six Months Ended June 30, 2009 and 2008

(in thousands except for share and per share data)

(unaudited)