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) January 18, 2005
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 January 18, 2005, Lakeland Financial Corporation issued a press
release announcing its earnings for the year ended December 31, 2004. The news
release is attached as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits
(c) Exhibits
99.1 Press Release dated January 18, 2005
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: January 18, 2005 By: /s/David M. Findlay
David M. Findlay
Chief Financial Officer
Exhibit 99.1
FOR IMMEDIATE RELEASE Contact: David M. Findlay
Executive Vice President -
Administration and
Chief Financial Officer
(574) 267-9197
17th CONSECUTIVE YEAR OF RECORD EARNINGS REPORTED
FOR LAKELAND FINANCIAL CORPORATION
Warsaw, Indiana (January 18, 2005) - Lakeland Financial Corporation
(Nasdaq/LKFN), parent company of Lake City Bank, today reported record net
income of $14.5 million for the year ended December 31, 2004, an increase of
5% versus $13.9 million for 2003. Diluted net income per share for the year
ended December 31, 2004 was $2.40 versus $2.31 for 2003, an increase of 4%.
Net income for the fourth quarter of 2004 was $3.7 million versus $3.0 million
for the comparable period of 2003, an increase of 25%. Diluted net income per
share was $0.62 for the fourth quarter of 2004, an increase of 24% versus
$0.50 in the comparable period of 2003.
Michael L. Kubacki, Chairman, President and Chief Executive Officer,
commented, "The Lake City Bank team has delivered record income performance
for the 17th consecutive year. We are very pleased with the momentum our
business built during the second half of 2004 and are excited by our prospects
for 2005. Total loans exceeded $1 billion with new loan activity of $132
million during the year, an increase of 15% versus 2003."
Kubacki continued, "We experienced strong loan growth in every region
this year, reflecting the great job that our retail and commercial lending
teams are doing in expanding our market penetration in both mature and
emerging markets. Our performance in the Fort Wayne area, where total
commercial loans grew by more than 30% in 2004, is reflective of our success.
In every region we've worked hard to build on our reputation as a thoughtful,
relationship oriented lender. We are proud that our clients view us as
long-term partners in building their businesses, not just a source of
capital."
Driven by loan growth, net interest income increased to $42.8 million in
2004 versus $42.2 million in 2003. The net interest margin of 3.60% for the
year was down from 3.82% in 2003. "Recent interest rate increases have
resulted in an improved net interest margin during the second half of 2004. If
this improving net interest margin continues and we maintain our healthy loan
growth, we expect continued improvement in net interest income performance in
2005," added Kubacki.
The Company also announced that the Board of Directors approved a cash
dividend for the fourth quarter of $0.21 per share, payable on January 25,
2005 to shareholders of record on January 10, 2005. 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 4% during
2004 versus 2003. Leading the improvement were a $645,000 increase in trust
and brokerage fees, which increased 27%, and a $472,000 increase in credit
card fees, which increased 27%. Net gains on the sale of mortgages held for
sale were $987,000 during 2004 versus $3.0 million 2003.
Kubacki observed, "By building upon our reputation as a leading
commercial and retail bank, we have successfully grown fee-based services.
Lake City Bank has the technology platform to compete with regional and
national competitors and we continue to leverage this infrastructure to grow
our fee-based services. While revenue from our mortgage operations declined in
2004 due to a general slowdown in the mortgage business, our noninterest
income generation improved in all other categories."
"We were also proud of our ability to lower overhead expenses in 2004
while at the same time expanding our relationship management staff and
continuing to reinvest in technology," added Kubacki. Noninterest expense
decreased by 3%, or $1.0 million, in 2004 to $36.7 million. Excluding a
one-time loss on extinguishment of debt of $804,000 incurred during 2003,
noninterest expense declined by $215,000 during 2004 versus 2003.
Total loans as of December 31, 2004 were $1.0 billion versus $952.7
million as of September 30, 2004, and $870.9 million as of December 31, 2003.
Average loans for 2004 were $930.9 million versus $847.6 million in 2003, an
increase of 10%. Average loans during the fourth quarter of 2004 were $974.7
million compared to $939.9 million in the third quarter of 2004, a
linked-quarter increase of 4%.
Lakeland Financial's allowance for loan losses as of December 31, 2004
was $10.8 million compared to $10.7 million as of September 30, 2004 and $10.2
million as of December 31, 2003. Total non-performing assets were $10.3
million as of December 31, 2004 versus $10.9 million as of September 30, 2004
and $4.3 million as of December 31, 2003. The ratio of non-performing assets
to loans was 1.02% on December 31, 2004 compared to 1.14% at September 30,
2004 and 0.50% as of December 31, 2003.
Net charge offs totaled $703,000 for the year ended December 31, 2004
versus $1.6 million in the comparable period of 2003. In 2004, net charge offs
were 0.08% of average loans compared to 0.18% in 2003. Net charge offs totaled
$562,000 in the fourth quarter versus $320,000 in the fourth quarter of 2003
and $52,000 during the third quarter of 2004.
Kubacki commented, "Charge offs, when measured as a percentage of average
loans, were at five-year lows in 2004. The year over year increase in
non-performing assets was attributable to the addition of a single commercial
credit of $6.1 million during the third quarter. We continue to work with the
borrower and guarantors, who have made a commitment to working with us to
resolve this situation. The borrower filed for chapter 11 bankruptcy and
continues the process of determining its future business strategy. Borrower
collateral and the personal guarantees of its principals support the credit."
For the year ended December 31, 2004, Lakeland Financial's average equity
to average assets ratio was 7.13% versus 7.05% in 2003. Average stockholders'
equity for 2004 was $95.1 million versus $86.6 million in 2003. Average total
deposits for the year ended December 31, 2004 were $1.0 billion versus $969.7
million for the comparable period in 2003.
Lakeland Financial Corporation is a $1.4 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.
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 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
FOURTH QUARTER 2004 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,
2004 2004 2003 2004 2003
----------- ---------- ------------ ----------- ------------
END OF PERIOD BALANCES
Assets $ 1,453,122 $ 1,349,534 $ 1,271,414 $ 1,453,122 $ 1,271,414
Deposits 1,115,399 1,043,513 926,391 1,115,399 926,391
Loans 1,003,219 952,671 870,882 1,003,219 870,882
Allowance for Loan Losses 10,754 10,741 10,234 10,754 10,234
Common Stockholders' Equity 101,765 98,737 90,022 101,765 90,022
AVERAGE BALANCES
Assets
Total Assets $ 1,391,171 $ 1,338,968 $ 1,261,157 $ 1,332,713 $ 1,239,546
Earning Assets 1,281,124 1,229,356 1,153,994 1,225,253 1,136,732
Investments 285,344 279,907 271,815 281,870 271,161
Loans 974,732 939,914 860,265 930,934 847,554
Liabilities and Stockholders' Equity
Total Deposits 1,126,411 1,022,216 993,267 1,033,798 969,709
Interest Bearing Deposits 903,633 809,971 805,586 826,206 795,993
Interest Bearing Liabilities 1,057,924 1,020,926 977,189 1,021,152 969,306
Common Stockholders' Equity 100,779 97,490 88,045 95,086 86,613
INCOME STATEMENT DATA
Net Interest Income $ 11,465 $ 10,814 $ 10,500 $ 42,765 $ 42,199
Net Interest Income-Fully Tax Equivalent 11,784 11,130 10,836 44,054 43,373
Provision for Loan Losses 575 150 490 1,223 2,254
Noninterest Income 4,128 4,531 4,621 16,965 18,427
Noninterest Expense 9,356 9,201 10,345 36,660 37,679
Net Income 3,748 3,951 3,010 14,545 13,865
PER SHARE DATA
Basic Net Income Per Common Share $ 0.64 $ 0.67 $ 0.52 $ 2.48 $ 2.38
Diluted Net Income Per Common Share 0.62 0.65 0.50 2.40 2.31
Cash Dividends Per Common Share 0.21 0.21 0.19 0.84 0.76
Book Value Per Common Share (equity per share issued) 17.20 16.80 15.43 17.20 15.43
Market Value - High 40.90 34.46 37.47 40.90 37.47
Market Value - Low 33.80 30.74 33.51 28.31 23.00
Basic Weighted Average Common Shares Outstanding 5,893,060 5,874,981 5,829,072 5,867,705 5,819,916
Diluted Weighted Average Common Shares Outstanding 6,098,920 6,058,608 6,046,778 6,064,077 6,001,449
KEY RATIOS
Return on Average Assets 1.07 % 1.17 % 0.95 % 1.09 % 1.12 %
Return on Average Common Stockholders' Equity 14.80 16.12 13.42 15.30 15.88
Efficiency (Noninterest Expense / Net Interest Income
plus Noninterest Income) 60.00 59.96 68.41 61.38 62.10
Average Equity to Average Assets 7.24 7.28 7.06 7.13 7.05
Net Interest Margin 3.66 3.60 3.73 3.60 3.82
Net Charge Offs to Average Loans 0.23 0.02 0.15 0.08 0.18
Loan Loss Reserve to Loans 1.07 1.13 1.18 1.07 1.18
Nonperforming Assets to Loans 1.02 1.14 0.50 1.02 0.50
Tier 1 Leverage 9.15 9.24 9.15 9.15 9.15
Tier 1 Risk-Based Capital 11.41 11.72 11.78 11.41 11.78
Total Capital 12.38 12.74 12.83 12.38 11.92
ASSET QUALITY
Loans Past Due 90 Days or More $ 2,778 $ 2,821 $ 3,191 $ 2,778 $ 3,191
Non-accrual Loans 7,213 7,779 553 7,213 553
Net Charge Offs 562 52 320 703 1,553
Other Real Estate Owned 261 277 557 261 557
Other Nonperforming Assets 13 28 27 13 27
Total Nonperforming Assets 10,265 10,905 4,328 10,265 4,328
LAKELAND FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
As of December 31, 2004 and 2003
(in thousands)
December 31, December 31,
2004 2003
------------ ------------
(Unaudited)
ASSETS
Cash and cash equivalents:
Cash and due from banks $ 81,144 $ 52,297
Short-term investments 22,714 5,144
------------ ------------
Total cash and cash equivalents 103,858 57,441
Securities available-for-sale:
U. S. Treasury and government agency securities 23,874 17,280
Mortgage-backed securities 208,961 211,142
State and municipal securities 53,747 52,945
------------ -----------
Total securities available-for-sale 286,582 281,367
Real estate mortgages held-for-sale 2,991 3,431
Loans:
Total loans 1,003,219 870,882
Less: Allowance for loan losses 10,754 10,234
------------ ------------
Net loans 992,465 860,648
Land, premises and equipment, net 25,057 26,157
Accrued income receivable 5,765 5,010
Goodwill 4,970 4,970
Other intangible assets 1,245 1,460
Other assets 30,189 30,930
------------ ------------
Total assets $ 1,453,122 $ 1,271,414
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest bearing deposits $ 237,261 $ 185,734
Interest bearing deposits 878,138 740,657
------------ ------------
Total deposits 1,115,399 926,391
Short-term borrowings:
Federal funds purchased 20,000 24,000
Securities sold under agreements
to repurchase 88,057 102,601
U.S. Treasury demand notes 2,593 3,160
Other borrowings 75,000 55,000
------------ ------------
Total short-term borrowings 185,650 184,761
Accrued expenses payable 7,445 7,804
Other liabilities 1,889 1,461
Long-term borrowings 10,046 30,047
Subordinated debentures 30,928 30,928
------------ ------------
Total liabilities 1,351,357 1,181,392
STOCKHOLDERS' EQUITY
Common stock: No par value, 90,000,000 shares authorized,
5,915,854 shares issued and 5,881,283 outstanding as of
December 31, 2004, and 5,834,744 shares issued and 5,788,263
outstanding at December 31, 2003 1,453 1,453
Additional paid-in capital 12,463 10,509
Retained earnings 89,864 80,260
Accumulated other comprehensive income/(loss) (1,267) (1,282)
Treasury stock, at cost (748) (918)
------------ ------------
Total stockholders' equity 101,765 90,022
------------ ------------
Total liabilities and stockholders' equity $ 1,453,122 $ 1,271,414
============ ============
LAKELAND FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
For the Three Months and Twelve Months Ended December 31, 2004 and 2003
(in thousands except for share data)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
--------------------------- ---------------------------
2004 2003 2004 2003
------------ ------------ ------------ ------------
INTEREST AND DIVIDEND INCOME
- ----------------------------
Interest and fees on loans: Taxable $ 13,425 $ 11,408 $ 48,680 $ 46,861
Tax exempt 81 77 287 280
------------ ------------ ------------ ------------
Total loan income 13,506 11,485 48,967 47,141
Short-term investments 102 55 184 188
Securities:
U.S. Treasury and government agency securities 206 133 740 593
Mortgage-backed securities 1,879 2,254 7,363 10,353
State and municipal securities 587 586 2,344 2,061
------------ ------------ ------------ ------------
Total interest and dividend income 16,280 14,513 59,598 60,336
INTEREST EXPENSE
- ----------------
Interest on deposits 4,016 3,170 13,397 14,079
Interest on short-term borrowings 341 213 1,556 1,110
Interest on long-term debt 458 630 1,880 2,948
------------ ------------ ------------ ------------
Total interest expense 4,815 4,013 16,833 18,137
------------ ------------ ------------ ------------
NET INTEREST INCOME 11,465 10,500 42,765 42,199
- -------------------
Provision for loan losses 575 490 1,223 2,254
------------ ------------ ------------ ------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 10,890 10,010 41,542 39,945
- ------------------------- ------------ ------------ ------------ ------------
NONINTEREST INCOME
- ------------------
Trust and brokerage fees 696 568 3,015 2,370
Service charges on deposit accounts 1,723 1,724 6,917 6,860
Loan, insurance and service fees 562 535 2,352 2,296
Merchant card fee income 562 435 2,219 1,747
Other income (net) 322 488 1,475 1,636
Net gains on sale of real
estate mortgages held for sale 263 363 987 3,018
Net securities gains 0 508 0 500
------------ ------------ ------------ ------------
Total noninterest income 4,128 4,621 16,965 18,427
NONINTEREST EXPENSE
- -------------------
Salaries and employee benefits 4,968 5,040 19,673 19,829
Net occupancy expense 694 634 2,496 2,444
Equipment Costs 574 569 2,106 2,538
Data processing fees and supplies 645 598 2,546 2,433
Credit card interchange 360 227 1,397 954
Loss on extinguishment of debt 0 804 0 804
Other expense 2,115 2,466 8,442 8,677
------------ ------------ ------------ ------------
Total noninterest expense 9,356 10,345 36,660 37,679
INCOME BEFORE INCOME TAX EXPENSE 5,662 4,286 21,847 20,693
- --------------------------------
Income tax expense 1,914 1,276 7,302 6,828
------------ ------------ ------------ ------------
NET INCOME $ 3,748 $ 3,010 $ 14,545 $ 13,865
- ---------- ============ ============ ============ ============
BASIC WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 5,893,060 5,829,072 5,867,705 5,819,916
BASIC EARNINGS PER COMMON SHARE $ 0.64 $ 0.52 $ 2.48 $ 2.38
- ------------------------------- ============ ============ ============ ============
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 6,098,920 6,046,778 6,064,077 6,001,449
DILUTED EARNINGS PER COMMON SHARE $ 0.62 $ 0.50 $ 2.40 $ 2.31
- --------------------------------- ============ ============ ============ ============