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 15, 2007

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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 15, 2007, Lakeland Financial Corporation issued a press release announcing its earnings for the nine-months and three-months ended September 30, 2007. The news release is attached as Exhibit 99.1.

Item 9.01. Financial Statements and Exhibits

99.1 Press Release dated October 15, 2007

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

New Fort Wayne Office Reaffirms Commitment to Market

Warsaw, Indiana (October 15, 2007) – Lakeland Financial Corporation (Nasdaq Global Select/LKFN), parent company of Lake City Bank, today reported quarterly net income of $4.4 million for the third quarter of 2007 versus $4.7 million for the third quarter of 2006. Diluted net income per share for the quarter was $0.35 versus $0.38 for the comparable period of 2006. The Company further reported record net income of $14.4 million for the nine months ended September 30, 2007, an increase of 2% over the $14.2 million reported for the nine months ended September 30, 2006. Diluted net income per common share was $1.16 for the nine months ended September 30, 2007, versus $1.15 for the nine months ended September 30, 2006.

 

The Company also announced that the Board of Directors approved a cash dividend for the third quarter of $0.14 per share, payable on November 5, 2007 to shareholders of record as of October 25, 2007. The quarterly dividend represents a 12% increase over the quarterly dividends paid in 2006.

 

Michael L. Kubacki, Chairman, President and Chief Executive Officer, commented, “Net income on a year-to-date basis continues to be ahead of last year, with every business unit contributing solidly to this performance. Further, we experienced good loan growth during the quarter with total loans increasing by $48 million, representing one of our strongest quarters ever for growth.”

 

Kubacki continued, “We were pleased to celebrate the opening of our newest office in southwest Fort Wayne. This 12,000 square foot facility represents the largest facility that Lake City Bank has ever constructed and reinforces our commitment to the Fort Wayne market.”

 

The office is home to the senior management of the Bank’s Wealth Advisory Group and the Fort Wayne Commercial Banking Department. The market’s Honors Private Banking and Lake City Bank Investment and Brokerage teams are also located in the office. In addition, experienced commercial banking staff in the office will provide direct access for clients to specialists in commercial cash management services, health savings accounts, corporate bond administration, retirement services and merchant credit card services.

 

“Our grand opening celebration was a joint effort of the Bank and the Board of Directors of Aboite New Trails and resulted in a $15,000 contribution from the Bank for the continued development of a multi-use trail system in Southwest Allen County and surrounding communities. This new office and our partnership with Aboite New Trails symbolize our success in Northern Indiana and our optimism for the business going forward,” continued Kubacki.

 

The Company’s net interest margin decreased to 3.18% in the third quarter versus 3.30% in the second quarter of 2007 as a result of a shift in funding mix and the Federal Reserve Bank’s recent interest rate cut.

 

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Nonetheless, as a result of the loan growth during the quarter, the Company’s net interest income increased to $13.7 million in the third quarter of 2007.

 

Kubacki further commented, “Despite market anticipation of the Federal Reserve Bank’s rate cut late in the quarter, general deposit pricing was very competitive during the quarter and continues to provide a very challenging environment for reasonably priced core deposit growth.”

 

Average total loans for the third quarter of 2007 were $1.41 billion versus $1.29 billion during the third quarter of 2006, an increase of 10%. Total gross loans as of September 30, 2007 were $1.45 billion, an increase of $94.5 million, or 7%, versus $1.35 billion as of December 31, 2006. Total loans as of September 30, 2006 were $1.33 billion.

 

Lakeland Financial’s allowance for loan losses as of September 30, 2007 was $15.1 million, compared to $15.4 million as of June 30, 2007 and $14.3 million as of September 30, 2006. Nonperforming assets totaled $14.1 million as of September 30, 2007 versus $15.3 million as of June 30, 2007 and $15.5 million on September 30, 2006. The ratio of nonperforming assets to loans was 0.98% on September 30, 2007 compared to 1.09% at June 30, 2007 and 1.17% at September 30, 2006. The decrease in nonperforming assets for the third quarter of 2007 resulted primarily from loans charged off during the quarter. Net charge offs totaled $2.0 million in the third quarter of 2007, versus $313,000 during the second quarter of 2007, and $14,000 during the third quarter of 2006. $1.5 million of the charge offs in the quarter were related to a single commercial borrower, a residential and commercial real estate developer. As of September 30, 2007, total exposure to this borrower had been reduced to $5.3 million from $7.3 million at the end of the second quarter. Of that total, $4.7 million is held in other real estate owned and approximately $630,000 represented remaining loans. It is anticipated that the remaining loans will be transferred to other real estate owned during the fourth quarter. The Company is managing the other real estate owned to resolve the situation and believes that the carrying value is representative of true market value, although there can be no assurance that the ultimate sale of the assets will result in proceeds equal to or greater than the carrying value. Two residential home equity lines of credit totaling approximately $470,000 represent the majority of the remaining charge offs during the quarter. One of these charge offs, for approximately $190,000, was to a principal of the residential and commercial real estate developer discussed above.

 

Kubacki commented, “We continue to manage our commercial loan business thoughtfully, and believe that our exposure to the soft residential real estate development sector is manageable and relatively limited. In addition, we believe that the Northern Indiana economy is holding up reasonably well and view our current exposure to the traditional commercial and industrial market and commercial real estate markets as reasonable. We have moved aggressively to get control of the assets related to our troubled real estate borrower and will move as quickly as possible to reach resolution.”

 

For the three months ended September 30, 2007, Lakeland Financial’s average equity to average assets ratio was 7.49% compared to 7.56% for the third quarter of 2007 and 7.18% for the third quarter of 2006. Average stockholders' equity for the quarter ended September 30, 2007 was $138.8 million versus $136.3 million for the second quarter of 2007 and $123.4 million for the third quarter of 2006. Average total deposits for the quarter ended September 30, 2007 were $1.48 billion versus $1.45 billion for the second quarter of 2007 and $1.43 billion for the third quarter of 2006.

 

Lakeland Financial Corporation is a $1.9 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.

 

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-

 

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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, 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 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 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 2007 FINANCIAL HIGHLIGHTS

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

 

 

 

 

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

 

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LAKELAND FINANCIAL CORPORATION

CONSOLIDATED BALANCE SHEETS

As of September 30, 2007 and December 31, 2006

(in thousands)

 

 

 

 

 

 

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LAKELAND FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

For the Three Months and Nine Months Ended September 30, 2007 and 2006

(in thousands except for share data)

(unaudited)

 

 

 

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