SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 For the fiscal year ended December 31, 2004
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from _______ to _______
Commission File Number 333-48402
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
Lakeland Financial Corporation 401(k) Plan
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Lakeland Financial Corporation
202 East Center Street, P.O. Box 1387
Warsaw, Indiana 46581-1387
REQUIRED INFORMATION
Audited statements of net assets available for benefits of the
Lakeland Financial Corporation 401(k) Plan as of December 31, 2004 and 2003,
and the related statements of changes in net assets available for benefits for
the year ended December 31, 2004 are provided as Exhibit 99.1 to this Form
11-K.
2
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
LAKELAND FINANCIAL CORPORATION 401(k) PLAN
Date: June 28, 2005 By: Lakeland Financial Corporation, as Trustee
to the Plan
By:_/s/ Jill A. DeBatty
Jill A. DeBatty
3
LAKELAND FINANCIAL CORPORATION 401(k) PLAN
EXHIBIT INDEX
TO
ANNUAL REPORT ON FORM 11-K
Sequential
Exhibit No. Description Page No.
- ----------------- -------------------------------- ---------------------------
23.1 Consent of Crowe Chizek and 5
Company LLC
99.1 Financial Statements 6
4
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Lakeland Financial
Corporation's Registration Statement on Form S-8 (Registration # 333-48402) of
our report, dated June 23, 2005, on the financial statements of the Lakeland
Financial Corporation 401(k) Plan which is included in this Annual Report on
Form 11-K for the year ended December 31, 2004.
/s/Crowe Chizek and Company LLC
Crowe Chizek and Company LLC
South Bend, Indiana
June 23, 2005
LAKELAND FINANCIAL CORPORATION
401(k) PLAN
FINANCIAL STATEMENTS
December 31, 2004 and 2003
LAKELAND FINANCIAL CORPORATION 401(k) PLAN
Warsaw, Indiana
FINANCIAL STATEMENTS
December 31, 2004 and 2003
CONTENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM .................. 1
FINANCIAL STATEMENTS
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS ..................... 2
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS............ 3
NOTES TO FINANCIAL STATEMENTS ....................................... 4
SUPPLEMENTAL SCHEDULE
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)....... 10
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Audit Committee and Plan Administrators
Lakeland Financial Corporation
401(k) Plan
Warsaw, Indiana
We have audited the accompanying statements of net assets available for
benefits of the Lakeland Financial Corporation 401(k) Plan ("Plan") as of
December 31, 2004 and 2003, and the related statement of changes in net assets
available for benefits for the year ended December 31, 2004. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 2004 and 2003, and the changes in net assets available for
benefits for the year ended December 31, 2004, in conformity with United
States generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets
(held at end of year) is presented for the purpose of additional analysis and
is not a required part of the basic 2004 financial statements but is
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the
auditing procedures applied in the audit of the basic 2004 financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic 2004 financial statements taken as a whole.
Crowe Chizek and Company LLC
South Bend, Indiana
June 23, 2005
1
LAKELAND FINANCIAL CORPORATION 401(k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2004 and 2003
2004 2003
---- ----
ASSETS
Investments, at fair value (Note 4) $ 27,388,773 $ 25,763,158
Receivables
Employer contribution 0 379,303
Accrued income 107,218 112,168
------------ ------------
107,218 491,471
------------ ------------
Total assets 27,495,991 26,254,629
------------ ------------
LIABILITIES
Payable for unsettled trades 137,146 0
------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS $ 27,358,845 $ 26,254,629
============ ============
See accompanying notes to financial statements.
2
LAKELAND FINANCIAL CORPORATION 401(k) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year ended December 31, 2004
Additions to net assets attributed to:
Investment income
Net appreciation in fair value of investments (Note 4) $ 2,470,854
Interest 16,993
Dividends 432,257
------------
2,920,104
Contributions
Employer 763,527
Participants 1,107,917
Rollovers 17,293
------------
1,888,737
Total additions 4,808,841
Deductions from net assets attributed to:
Benefits paid directly to participants or their
beneficiaries 3,700,347
Administrative expenses 4,278
------------
Total deductions 3,704,625
Net increase 1,104,216
Net assets available for benefits
Beginning of year 26,254,629
------------
End of year $ 27,358,845
============
See accompanying notes to financial statements.
3
LAKELAND FINANCIAL CORPORATION 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2004 and 2003
NOTE 1 - DESCRIPTION OF PLAN
The following description of the Lakeland Financial Corporation 401(k) Plan
(the "Plan") is provided for general information purposes only. Participants
should refer to the Plan agreement for a more complete description of the
Plan's provisions.
General: The Plan is a defined contribution 401(k) profit sharing plan
covering substantially all employees of Lakeland Financial Corporation ("LFC")
and its subsidiary, Lake City Bank (collectively, "employer"). An employee
becomes eligible to enter the Plan on January 1, April 1, July 1 and October 1
following attainment of age 18 and completion of one month of service.
The Plan was originally adopted December 13, 1983 and has been amended.
Effective October 10, 2000, the Plan was amended and restated. The provisions
of the amended and restated Plan state that the employer each year may set the
matching percentage as well as any discretionary contributions. The amended
and restated Plan also does not permit loans to plan participants. Effective
January 1, 2001, the Plan was further amended. The provisions of the amended
Plan state the matching contributions shall be allocated to participants who
have completed at least one hour of service during the Plan year. The amended
Plan also provides for a six-year graded vesting schedule and that employees
working at any branch that is sold shall become 100% vested as of the date of
the branch sale. Effective January 1, 2003, the Plan was further amended. The
January 1, 2003 amendment states that employees become eligible to participate
in the Plan following attainment of age 18 and completion of one month of
service. Information regarding the changes to the Plan is provided for general
information purposes only. Participants should refer to the amended and
restated Plan agreement for a more complete description of the Plan's
provisions. The Plan provides for retirement, death, disability and
termination benefits, and it is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA).
Investment Funds: The Plan consists of 23 funds, or investment options, one of
which is invested primarily in LFC common stock. Ten of the funds are
"Fidelity Freedom" funds that are targeted retirement funds consisting of
blends of equities and fixed income securities. The "Artisan Mid Cap Fund",
"Royce Low Priced Stock Fund", "American Century Large Company Value Fund",
"Fidelity Contrafund", "Fidelity Value Fund", "Fidelity Capital Appreciation
Fund", "Fidelity Small Cap Stock Fund" and "Fidelity Spartan US Equity Index
Fund" are invested primarily in common and preferred stock. The "Fidelity US
Bond Index Fund" is invested primarily in fixed income securities. The
"Fidelity Retirement Money Market Fund" is invested primarily in short-term
fixed income investments having maturities of one year or less, and the
"Fidelity Diversified International Fund" is invested primarily in foreign
common stocks.
Continued
4
NOTE 1 - DESCRIPTION OF PLAN (Continued)
A participant's salary redirection is invested in any of the funds offered at
the participant's discretion. Employer matching contributions are initially
invested in employer stock. Participants may redirect the matching
contributions at their discretion.
Participant Accounts: Each participant's account is credited with the
participant's contribution and an allocation of (a) the Corporation's
contributions, (b) Plan earnings and (c) forfeitures of non-vested balances of
accounts of participants who have left the plan. Allocations are based on
participant earnings or account balances, as defined. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's account.
Contributions: The Plan provides that participants may make voluntary pre-tax
contributions to the Plan in amounts equal to the maximum amount allowable
under the Internal Revenue Code ($13,000 in 2004). Each year the employer may
set a matching percentage of up to 6% of a participant's compensation, as well
as make discretionary contributions. For 2004, the matching percentage was set
at 90% of the first 6% of compensation an employee contributes to the Plan as
a voluntary pre-tax contribution. In addition, no discretionary contributions
were made.
Retirement, Death and Disability: A participant is entitled to 100% of his or
her account balance upon retirement, death or disability.
Vesting: Participants are 100% vested in salary deferral contributions.
Effective January 1, 2001, employer contributions vest according to a six-year
graded schedule. Prior to January 1, 2001, employer contributions vested
according to a seven-year graded schedule.
Payment of Benefits: On termination of service, a participant may elect to
receive either a lump sum or a direct rollover equal to the value of his or
her vested interest in the account. For distributions of LFC common stock,
distributions are made in stock or cash at the participant's option, with the
exception of fractional shares which are paid out in cash. Distributions out
of the other funds are made in cash.
Loan Provisions: Prior to the restatement of the Plan effective October 10,
2000, participants were able to borrow from their fund accounts a minimum of
$1,000 up to a maximum of $50,000 or 50 percent of their account balance,
whichever is less. The loans are secured by the balance in the participant's
account and bear interest at rates equal to the prime interest rate stated in
the Wall Street Journal plus 1% at the date the participant applied for the
loan.
Continued
5
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The policies and principles which significantly affect the determination of
net assets and results of operations are summarized below.
Accounting Method: The accounting practices and principles followed by the
Plan and the methods of applying those principles conform to U.S. generally
accepted accounting principles under the accrual basis.
Investments Valuation and Income Recognition: Investments are stated at fair
value. The fair values of mutual fund investments and LFC common stock are
based upon quoted market prices. Money market fund investments and participant
loans are reported at cost, which approximates fair value. Purchases and sales
of securities are recorded on a trade-date basis. Interest income is recorded
on the accrual basis. Dividends are recorded on the ex-dividend date.
Net Appreciation (Depreciation) in Fair Value of Investments: In accordance
with the policy of stating investments at fair value, net unrealized
appreciation (depreciation) for the year along with gains and losses on sales
of investments are reflected in the statement of changes in net assets
available for benefits as net appreciation (depreciation) in fair value of
investments. Unrealized appreciation (depreciation) for investments held as of
the end of the current fiscal year is the difference between the current value
of those investments and the value of those investments as of the end of the
prior fiscal year or the purchase date for investments purchased during the
year.
Administrative Expenses: Trustee expenses have been waived by Lake City Bank,
the Plan Trustee.
Estimates: The preparation of financial statements in conformity with United
States generally accepted accounting principles requires the plan
administrator to make estimates and assumptions that affect certain reported
amounts and disclosures, and actual results may differ from these estimates.
Concentration of Credit Risk: At December 31, 2004 and 2003, the majority of
the Plan's assets were invested in LFC common stock.
6
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Risk and Uncertainties: The Plan provides for various investment options
including any combination of certain mutual funds, stocks, and money market
funds. The underlying investment securities are exposed to various risks, such
as interest rate, market and credit risks. Due to the level of risk associated
with certain investment securities and the level of uncertainty related to
changes in the value of investment securities, it is at least reasonably
possible that changes in the values of investment securities will occur in the
near term and that such changes could materially affect the amounts reported
in the statement of net assets available for benefits and participant's
individual account balances.
NOTE 3 - PLAN TERMINATION
Although it has not expressed any intent to do so, LFC has the right under the
Plan to discontinue its contributions at any time and to terminate the Plan
subject to the provisions of ERISA and its related regulations. In the event
of termination, participants will become 100% vested in their accounts.
NOTE 4 - INVESTMENTS
The following presents investments that represent 5 percent or more of the
Plan's net assets.
December 31,
2004 2003
---- ----
LFC common stock, 508,952 and
590,356 shares, respectively $ 20,205,394 $ 20,851,367
Fidelity Retirement Money Market Fund,
1,532,502 and 0 shares respectively 1,532,502 -
The following table presents the net appreciation (including investments
bought, sold and held during the year) in fair value for each of the Plan's
investment categories for the year ended December 31, 2004.
Mutual funds $ 350,819
LFC common stock 2,120,035
------------
$ 2,470,854
All of the Plan's investments are uninsured.
7
NOTE 5 - PARTY-IN-INTEREST TRANSACTIONS
Parties-in-interest are defined under Department of Labor Regulations as any
fiduciary of the Plan, any party rendering service to the Plan, the employer,
and certain others. Fees paid by the Plan to AMI Benefit Plan Administrators,
Inc. and Fidelity Management Trust Company for accounting services amounted to
$4,278 for the year ended December 31, 2004.
During 2004, the Plan purchased 46,237 shares of Lakeland Financial
Corporation common stock at a cost ranging from $30.73 to $40.66 per share. In
2004, the Plan sold 33,863 shares of Lakeland Financial Corporation common
stock at a sales price ranging from $28.28 to $39.62 per share and distributed
93,778 shares of common stock to employees due to termination or retirement.
At December 31, 2004 and 2003, the Plan held the following party-in-interest
investments (at estimated fair value):
2004:
Lakeland Financial Corporation common stock - 508,952 shares $ 20,205,394
Loans to participants 2,675
2003:
Lakeland Financial Corporation common stock - 590,356 shares $ 20,851,367
Loans to participants 3,440
NOTE 6 - TAX STATUS
The Plan is maintained using a prototype plan document sponsored by Fidelity
Management & Research Company. The Internal Revenue Service has ruled in a
letter dated December 5, 2001, that the prototype plan qualifies under Section
401 of the Internal Revenue Code (IRC) and is, therefore, not subject to tax
under present income tax law. The plan administrator believes that the Plan is
being operated in compliance with applicable requirements of the IRC.
8
NOTE 7 - TERMINATED PARTICIPANTS
Included in net assets available for benefits are amounts allocated to
individuals who have withdrawn from the Plan and requested a distribution
prior to year-end. Amounts allocated to these participants were approximately
$253,954 and $3,185,218 at December 31, 2004 and 2003.
9
SUPPLEMENTAL INFORMATION
LAKELAND FINANCIAL CORPORATION 401(k) PLAN
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2004
Name of Plan Sponsor: Lakeland Financial Corporation
------------------------------------------
Employer Identification Number: 35-1559596
------------------------------------------
Three-digit Plan Number: 004
------------------------------------------
(c)
Description of Investment
(b) Including Maturity Date, (e)
Identity of Issue, Borrower, Rate of Interest, Collateral, (d) (1) Current
(a) Lessor, or Similar Party Par or Maturity Value Cost Value
--- ------------------------ --------------------- ---- -----
Money market accounts
Fidelity Institutional Cash 536,945 units $ 536,945
Fidelity Retirement
Money Market 1,532,502 units 1,532,502
---------------
2,069,447
Mutual funds
Artisan Mid Cap Fund 6,236 units 184,325
Royce Low Price Stock Fund 15,780 units 241,909
American Century Large
Company Value Fund 30,956 units 200,903
Fidelity Contrafund 4,094 units 232,277
Fidelity Value Fund 2,781 units 198,273
Fidelity Capital
Appreciation Fund 14,506 units 377,581
Fidelity Diversified
International Fund 11,932 units 341,737
Fidelity Small Cap Stock Fund 11,921 units 216,481
Fidelity Freedom Income 2,110 units 23,779
Fidelity Freedom 2000 300 units 3,621
Fidelity Freedom 2010 76,645 units 1,043,898
Fidelity Freedom 2020 16,860 units 235,370
Fidelity Freedom 2030 12,426 units 174,958
Fidelity Spartan US Equity Index 4,654 units 199,452
Fidelity US Bond Index 30,097 units 335,275
Fidelity Freedom 2040 17,756 units 146,843
Fidelity Freedom 2005 12,322 units 133,082
Fidelity Freedom 2015 54,221 units 599,145
Fidelity Freedom 2025 13,795 units 155,611
Fidelity Freedom 2035 5,834 units 66,737
---------------
5,111,257
* Lakeland Financial Corporation
common stock 508,952 shares 20,205,394
* Loans to participants Interest rate 9.5% 2,675
---------------
$ 27,388,773
===============
* Denotes party-in-interest
(1) Cost is not presented as all investments are participant directed investments.
10