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) October 16, 2006

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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 October 16, 2006, Lakeland Financial Corporation issued a press release announcing its earnings for the nine-months and three-months ended September 30, 2006. The news release is attached as Exhibit 99.1.

Item 9.01. Financial Statements and Exhibits

99.1 Press Release dated October 16, 2006

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 PERFORMANCE

Loan Growth Continues at Record Pace

Warsaw, Indiana (October 16, 2006) – Lakeland Financial Corporation (Nasdaq Global Select/LKFN), parent company of Lake City Bank, today reported quarterly net income of $4.7 million for the third quarter of 2006. Net income increased 5% over the $4.5 million reported for the third quarter of 2005. Diluted net income per share for the quarter was $0.38 versus $0.37 for the comparable period of 2005. Net income for the nine months ended September 30, 2006 was a record $14.2 million, an increase of 9%, versus $13.0 million for the nine months ended September 30, 2005. Diluted net income per common share was $1.15 for the nine months ended September 30, 2006, versus $1.06 for the nine months ended September 30, 2005.

 

The Company also announced that the Board of Directors approved a cash dividend for the third quarter of $0.125 per share, payable on November 6, 2006 to shareholders of record as of October 25, 2006. The quarterly dividend represents a 9% increase over the quarterly dividends paid in 2005.

 

Michael L. Kubacki, Chairman, President and Chief Executive Officer, commented, “As our financial results demonstrate, we have continued to experience further franchise penetration throughout Northern Indiana. Lake City Bank’s income performance has been a result of this ongoing market-share expansion, which has contributed to outstanding loan and fee income growth. It is also a result of diligent expense control in a challenging interest rate environment for the industry.”

 

Average total loans for the third quarter of 2006 were $1.289 billion versus $1.116 billion during the third quarter of 2005, an increase of 16%. Total loans as of September 30, 2006 were $1.331 billion, an increase of $54.9 million, versus $1.276 billion as of June 30, 2006. Total loans as of September 30, 2005 were $1.145 billion.

 

Kubacki observed, “With $55 million of loan growth during the third quarter and $132 million for the first nine months of the year, it is clear that our style of community-driven banking is creating mutual opportunities for both our clients and the Bank. This 11% increase in our loan portfolio in 2006 is reflective of our commitment to the northern Indiana marketplace and our success in winning new banking relationships.”

 

Kubacki observed, “We have continued to benefit from healthy fee growth during the year, with noninterest income up 10% this year versus the same period in 2005. For the quarter, we experienced an 8% increase versus the third quarter of 2005. Our strategy, which emphasizes aggressive and effective cross selling of fee-based services, is clearly producing results. Increases in the Wealth Advisory and Investment divisions continue to pace this great revenue expansion.”

 

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Kubacki further commented, “The challenging interest rate environment has impacted our net interest margin. We’ve worked hard to maintain our margin while at the same time providing competitive loan and deposit pricing to our clients. While the margin environment has impacted earnings power, our ability to maintain fee growth while at the same time tightly managing our expense structure has been critical to our record income performance thus far in 2006.”

 

Lakeland Financial’s allowance for loan losses as of September 30, 2006 was $14.3 million, compared to $13.8 million as of June 30, 2006 and $12.2 million as of September 30, 2005. Non-performing assets totaled $15.5 million as of September 30, 2006 versus $6.7 million as of June 30, 2006 and $7.8 million on September 30, 2005. The ratio of non-performing assets to loans was 1.17% on September 30, 2006 compared to 0.52% at June 30, 2006 and 0.68% at September 30, 2005. The increase in non-performing assets resulted from the addition of a single borrowing relationship with aggregate loans totaling $9.0 million. The borrower is engaged in real estate development in Northern Indiana. Borrower collateral, including real estate, and personal guarantees of its principals support this credit, although there can be no assurances that full repayment of the loans will result. Net charge offs totaled $14,000 in the third quarter of 2006, versus $81,000 during the second quarter of 2006, and $159,000 in the third quarter of 2005.

 

For the three months ended September 30, 2006, Lakeland Financial’s average equity to average assets ratio was 7.18% compared to 7.07% for the second quarter of 2006 and 7.21% for the third quarter of 2005. Average stockholders' equity for the quarter ended September 30, 2006 was $123.4 million versus $119.4 million for the second quarter of 2006 and $110.1 million for the third quarter of 2005. Average total deposits were $1.426 billion for the third quarter of 2006, versus $1.382 billion for the second quarter of 2006 and $1.193 billion for the third quarter of 2005.

 

Lakeland Financial Corporation is a $1.8 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.

 

In addition to results presented in accordance with generally accepted accounting principles in the United States of America (GAAP), this press release contains certain non-GAAP financial measures. Lakeland Financial believes that providing non-GAAP financial measures provides investors with information useful in 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” with intangible assets excluded.

 

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.

 

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, Citadel Derivatives Group, LLC, Citigroup Global Market Holdings, Inc., E*Trade Capital Markets LLC, FTN Midwest Securities Corp., Goldman Sachs & Company, Howe Barnes Hoefer & Arnett, Inc., Keefe, Bruyette & Woods, Inc., Knight Equity Markets, L.P., Lehman Brothers Inc., Morgan Stanley & Co., Inc., Stifel Nicolaus & Company, Inc., Susquehanna Capital Group and UBS Securities LLC.

 

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

 

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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..

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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LAKELAND FINANCIAL CORPORATION

THIRD QUARTER 2006 FINANCIAL HIGHLIGHTS

(Unaudited – Dollars in thousands except share and Per Share Data)

 

 

(1) Cash dividend of $0.125 declared on April 11, 2006, July 11, 2006 and October 10, 2006

 

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LAKELAND FINANCIAL CORPORATION

CONSOLIDATED BALANCE SHEETS

As of September 30, 2006 and December 31, 2005

(in thousands)

 

 

 

 

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LAKELAND FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

For the Three Months and Nine Months Ended September 30, 2006 and 2005

(in thousands except for share data)

(unaudited)

 

 

 

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