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 April 15, 2004
(Date of earliest event reported)
Lakeland Financial Corporation
(Exact name of Registrant as specified in its charter)
Indiana
(State or other jurisdiction of incorporation)
0-11487 35-1559596
(Commission File Number) (I.R.S. Employer 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)
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Business Acquired.
None.
(b) Pro Forma Financial Information.
None.
(c) Exhibits.
99.1 Press Release dated April 15, 2004
Item 12. Results of Operations and Financial Condition
On April 15, 2004, Lakeland Financial Corporation issued a press release
announcing its earnings for the quarter ended March 31, 2004. The news release
is attached as Exhibit 99.1.
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: April 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
LAKELAND FINANCIAL REPORTS FIRST QUARTER
PERFORMANCE AND CASH DIVIDEND
Warsaw, Indiana (April 15, 2004) - Lakeland Financial Corporation
(Nasdaq/LKFN), parent company of Lake City Bank, today reported net income of
$3.5 million for the first quarter of 2004, which is unchanged versus the
comparable period of 2003 and represents a 16% increase versus net income of
$3.0 million in the fourth quarter of 2003. Diluted net income per common
share for the quarter was $0.58 versus $0.59 for the comparable period of 2003
and $0.50 for the fourth quarter of 2003.
The Company also announced that the Board of Directors approved a cash
dividend for the first quarter of $0.21 per share, payable on April 26, 2004
to shareholders of record on April 10, 2004. The quarterly dividend represents
an 11% increase over the quarterly dividend of $0.19 paid in 2003.
Michael L. Kubacki, Chairman, President and Chief Executive Officer,
commented, "We are proud of our performance in the first quarter of 2004. As a
result of the challenging interest rate environment that we have been
operating in for the past twelve months, our focus has been on growth in key
noninterest income categories and prudent expense management. The combination
of our balance sheet structure and historically low interest rates has
significantly affected our net interest income through a decline in our net
interest margin, which was 3.60% versus 3.93% in the first quarter of 2003. As
a result, our net interest income after provision for loan losses has
increased by only 1% when compared to the same period in 2003 despite good
earning asset growth."
Kubacki continued, "We continued to experience good revenue growth in key
noninterest income areas during the quarter. Excluding mortgage sales gains,
noninterest income grew by 16% versus the comparable period in 2003."
Comparing the first quarter of 2004 to the comparable period in 2003, other
income increased by 40%, or $271,000, credit card fees increased 39%, or
$140,000, and trust and brokerage fees increased 21%, or $129,000. Overall,
total noninterest income decreased by $226,000, driven by a $759,000 reduction
in mortgage sales gains versus the comparable period in 2003.
Kubacki added, "The mortgage environment during the first quarter had a
negative impact on earnings as we experienced a dramatic reduction in mortgage
sales gains and incurred an impairment of mortgage servicing rights of
$159,000 for the quarter versus $141,000 in the first quarter of 2003. In the
fourth quarter of 2003, we had a benefit of $117,000 compared to the loss in
the first quarter. While we have recently seen some rebound in mortgage
origination activity, we do not anticipate that it will have a significant
impact in future quarters."
"Recognizing the impact that the low interest rate environment has on our
earnings power, we have maintained a tight focus on managing noninterest
expenses. As a result, noninterest expense actually decreased by 1% for the
quarter versus the comparable period in 2003. Through ongoing leveraging of
technology and prudent capital investment, we have been able to achieve this
reduction without impacting staffing levels or customer service."
Total loans as of March 31, 2004 were $884.5 million versus $870.9
million as of December 31, 2003 and $826.9 million as of March 31, 2003.
Average loans during the first quarter of 2004 were $883.7 million compared to
$860.3 million in the fourth quarter of 2003, an increase of 3%.
Lakeland Financial's allowance for loan losses as of March 31, 2004 was
$10.5 million, compared to $10.2 million as of December 31, 2003 and $9.7
million as of March 31, 2003. Non-performing assets totaled $4.5 million as of
March 31, 2004 versus $4.3 million as of December 31, 2003 and $8.8 million on
March 31, 2003. The ratio of non-performing assets to loans was 0.51% on March
31, 2004 compared to 0.50% at December 31, 2003 and 1.06% at March 31, 2003.
Net charge offs totaled $9,000 in the first quarter versus $320,000 during the
fourth quarter of 2003 and $458,000 in the first quarter of 2003. For the
quarter ended March 31, 2004, net charge offs were less than 0.01% of average
loans compared to 0.23% in the same period in 2003.
Kubacki commented, "We are extremely pleased with the overall quality of
our loan portfolio and the resulting low level of charge offs during the
quarter. Clearly, there is a direct relationship between our earnings power in
this low margin environment and our asset quality. As a result of our moderate
level of charge offs and overall asset quality, we have not been required to
increase the loan loss allocations significantly, thus reducing our loan loss
provision."
For the three months ended March 31, 2004, Lakeland Financial's average
equity to average assets ratio was 7.21% compared to 7.06% for the fourth
quarter of 2003 and 7.07% for the first quarter of 2003. Average stockholders'
equity for the quarter ended March 31, 2004 was $92.4 million versus $89.0
million for the fourth quarter of 2003 and $85.6 million for the comparable
period in 2003. Average total deposits for the quarter ended March 31, 2004
were $968.7 million compared to $993.3 million for the fourth quarter of 2003
and $934.1 million for the same 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
FIRST QUARTER 2004 FINANCIAL HIGHLIGHTS
(Unaudited - Dollars in thousands except Share and Per Share Data)
Three Months Ended
--------------------------------------------------------
Mar. 31, Dec. 31, Mar. 31,
2004 2003 2003
-------------- ------------- ---------------
END OF PERIOD BALANCES
Assets $ 1,285,929 $ 1,271,414 $ 1,222,883
Deposits 1,006,811 926,391 961,494
Loans 884,499 870,882 826,865
Allowance for Loan Losses 10,477 10,234 9,742
Common Stockholders' Equity 94,191 90,022 86,067
AVERAGE BALANCES
Assets
Total Assets $ 1,281,413 $ 1,260,792 $ 1,212,142
Earning Assets 1,176,928 1,153,994 1,113,508
Investments 282,053 271,815 275,204
Loans 883,692 860,265 829,647
Liabilities and Stockholders' Equity
Total Deposits 968,724 993,267 934,078
Interest Bearing Deposits 781,823 805,586 776,931
Interest Bearing Liabilities 993,786 975,773 956,165
Common Stockholders' Equity 92,444 88,973 85,590
INCOME STATEMENT DATA
Net Interest Income $ 10,208 $ 10,500 $ 10,551
Net Interest Income-Fully Tax Equivalent 10,534 10,836 10,787
Provision for Loan Losses 252 490 667
Noninterest Income 4,160 4,621 4,386
Noninterest Expense 8,908 10,345 8,971
Net Income 3,502 3,010 3,515
PER SHARE DATA
Basic Net Income Per Common Share $ 0.60 $ 0.52 $ 0.60
Diluted Net Income Per Common Share 0.58 0.50 0.59
Cash Dividends Per Common Share 0.21 0.19 0.19
Book Value Per Common Share (equity per share issued) 16.10 15.43 14.80
Market Value - High 38.05 37.47 25.75
Market Value - Low 31.41 33.51 23.21
Basic Weighted Average Common Shares Outstanding 5,842,946 5,829,072 5,813,984
Diluted Weighted Average Common Shares Outstanding 6,052,537 6,046,778 5,957,134
KEY RATIOS
Return on Average Assets 1.10 % 0.95 % 1.18 %
Return on Average Common Stockholders' Equity 15.24 13.42 16.65
Efficiency (Noninterest Expense / Net Interest Income
plus Noninterest Income) 61.98 68.41 60.04
Average Equity to Average Assets 7.21 7.06 7.07
Net Interest Margin 3.60 3.73 3.93
Net Charge Offs to Average Loans 0.00 0.15 0.23
Loan Loss Reserve to Loans 1.18 1.18 1.18
Nonperforming Assets to Loans 0.51 0.50 1.06
Tier 1 Leverage 9.23 9.15 8.12
Tier 1 Risk-Based Capital 11.95 11.78 10.54
Total Capital 13.02 12.83 11.59
ASSET QUALITY
Loans Past Due 90 Days or More $ 3,211 $ 3,191 $ 3,386
Non-accrual Loans 997 553 5,208
Net Charge Offs 9 320 458
Other Real Estate Owned 277 557 109
Other Nonperforming Assets 39 27 62
Total Nonperforming Assets 4,524 4,328 8,765
LAKELAND FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
As of March 31, 2004 and December 31, 2003
(in thousands)
March 31, December 31,
2004 2003
------------ ------------
(Unaudited)
ASSETS
Cash and cash equivalents:
Cash and due from banks $ 50,651 $ 52,297
Short-term investments 6,823 5,144
------------ ------------
Total cash and cash equivalents 57,474 57,441
Securities available-for-sale:
U. S. Treasury and government agency securities 19,641 17,280
Mortgage-backed securities 211,988 211,142
State and municipal securities 53,322 52,945
------------ -----------
Total securities available-for-sale 284,951 281,367
Real estate mortgages held-for-sale 3,513 3,431
Loans:
Total loans 884,499 870,882
Less: Allowance for loan losses 10,477 10,234
------------ ------------
Net loans 874,022 860,648
Land, premises and equipment, net 25,976 26,157
Accrued income receivable 5,173 5,010
Goodwill 4,970 4,970
Other intangible assets 1,406 1,460
Other assets 28,444 30,930
------------ ------------
Total assets $ 1,285,929 $ 1,271,414
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest bearing deposits $ 197,977 $ 185,734
Interest bearing deposits 808,834 740,657
------------ ------------
Total deposits 1,006,811 926,391
Short-term borrowings:
Federal funds purchased 16,000 24,000
Securities sold under agreements
to repurchase 86,511 102,601
U.S. Treasury demand notes 2,303 3,160
Other borrowings 10,000 55,000
------------ ------------
Total short-term borrowings 114,814 184,761
Accrued expenses payable 7,626 7,804
Other liabilities 1,513 1,461
Long-term borrowings 30,046 30,047
Subordinated debentures 30,928 30,928
------------ ------------
Total liabilities 1,191,738 1,181,392
STOCKHOLDERS' EQUITY
Common stock: No par value, 90,000,000 shares authorized,
5,849,494 shares issued and 5,817,474 outstanding as of
March 31 2004, and 5,834,744 shares issued and 5,787,463
outstanding at December 31, 2003 1,453 1,453
Additional paid-in capital 10,700 10,509
Retained earnings 82,534 80,260
Accumulated other comprehensive income/(loss) 169 (1,282)
Treasury stock, at cost (665) (918)
------------ ------------
Total stockholders' equity 94,191 90,022
------------ ------------
Total liabilities and stockholders' equity $ 1,285,929 $ 1,271,414
============ ============
LAKELAND FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
For the Three Months Ended March 31, 2004 and 2003
(in thousands except for share data)
(Unaudited)
Three Months Ended
March 31,
---------------------------
2004 2003
------------ ------------
INTEREST AND DIVIDEND INCOME
- ----------------------------
Interest and fees on loans: Taxable $ 11,316 $ 11,833
Tax exempt 68 63
------------ ------------
Total loan income 11,384 11,896
Short-term investments 28 27
Securities:
U.S. Treasury and government agency securities 157 170
Mortgage-backed securities 2,022 2,932
State and municipal securities 584 428
------------ ------------
Total interest and dividend income 14,175 15,453
INTEREST EXPENSE
- ----------------
Interest on deposits 3,031 3,786
Interest on short-term borrowings 346 340
Interest on long-term borrowings 590 776
------------ ------------
Total interest expense 3,967 4,902
------------ ------------
NET INTEREST INCOME 10,208 10,551
- -------------------
Provision for loan losses 252 667
------------ ------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 9,956 9,884
- ------------------------- ------------ ------------
NONINTEREST INCOME
- ------------------
Trust and brokerage fees 739 610
Service charges on deposit accounts 1,657 1,664
Credit card fee income 500 360
Other income (net) 944 673
Net gains on sale of real estate mortgages held for sale 320 1,079
------------ ------------
Total noninterest income 4,160 4,386
NONINTEREST EXPENSE
- -------------------
Salaries and employee benefits 4,925 4,705
Occupancy and equipment expense 1,017 1,362
Data processing expense 595 583
Credit card interchange 290 196
Other expense 2,081 2,125
------------ ------------
Total noninterest expense 8,908 8,971
INCOME BEFORE INCOME TAX EXPENSE 5,208 5,299
- --------------------------------
Income tax expense 1,706 1,784
------------ ------------
NET INCOME $ 3,502 $ 3,515
- ---------- ============ ============
BASIC WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 5,842,946 5,813,984
BASIC EARNINGS PER COMMON SHARE $ 0.60 $ 0.60
- ------------------------------- ============ ============
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 6,052,537 5,957,134
DILUTED EARNINGS PER COMMON SHARE $ 0.58 $ 0.59
- --------------------------------- ============ ============