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) April 27, 2009

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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 April 27, 2009, Lakeland Financial Corporation issued a press release announcing its earnings for the three-months ended March 31, 2009. The news release is attached as Exhibit 99.1.

Item 9.01. Financial Statements and Exhibits

99.1 Press Release dated April 27, 2009

 

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 1^ST QUARTER RESULTS

Quarterly Dividend Maintained

Warsaw, Indiana (April 27, 2009) – Lakeland Financial Corporation (Nasdaq Global Select/LKFN), parent company of Lake City Bank, today reported net income of $3.9 million for the first quarter of 2009. During the comparable period of 2008, net income was $5.2 million. Diluted net income per share for the quarter was $0.29 versus $0.42 for the comparable period of 2008. On a linked quarter basis, these results compared to net income of $4.4 million, or $0.35 per diluted share, for the fourth quarter of 2008.

 

The Company also announced that the Board of Directors approved a cash dividend for the first quarter of $0.155 per share, payable on May 5, 2009 to shareholders of record as of April 25, 2009. The quarterly dividend is unchanged from the dividends paid in 2008.

 

Average total loans for the first quarter of 2009 were $1.84 billion versus $1.56 billion for the first quarter of 2008 and $1.77 billion for the linked fourth quarter of 2008. The year-over-year increase for the first quarter represented an increase of 18%, or $280 million. On a linked quarter basis, average loans increased by $77 million versus the fourth quarter of 2008. Total gross loans as of March 31, 2009 were $1.86 billion compared to $1.60 billion as of March 31, 2008 and $1.83 billion as of December 31, 2008.

 

Michael L. Kubacki, Chairman, President and Chief Executive Officer, commented, “While our net income performance for the quarter was impacted by the difficult economic conditions, we are pleased with the continued expansion of our lending activities this year. With average loan growth of $77 million in the quarter, we once again have lived up to our reputation as a leading lender in the market. Our commitment to the Indiana communities we serve is a testament to our disciplined and focused strategy. At a time when many of our larger regional and national competitors appear to have moved their focus away from Indiana, we are proud of the fact that our growth continues to fuel business activity here.”

 

The Company’s net interest margin was 3.12% in both the first quarters of 2009 and 2008. On a linked quarter basis the margin improved from 2.98% in the fourth quarter of 2008. The previously noted loan growth led to an increase in average earning assets, which contributed to an increase in net interest income of 17% year-over-year. Net interest income grew to $17.0 million in the first quarter of 2009 versus $14.5 million in the first quarter of 2008. The Company’s provision for loan losses increased to $4.5 million for the first quarter of 2009 versus $1.2 million in the same period of 2008. In the fourth quarter of 2008, the provision was $2.3 million. The provision increase in 2009 was primarily

 

 

driven by a higher level of charge offs, continued loan growth and the difficult economic conditions in the Company’s markets.

 

The Company's non-interest income was $5.6 million for the first quarter of 2009, versus $5.8 million for the comparable period of 2008. The 2008 results were favorably impacted by a $642,000 gain from the initial public offering of Visa, Inc. and the 2009 results were negatively impacted by non-cash mortgage servicing rights impairment of $316,000, which resulted from lower mortgage interest rates. Total revenue for the first quarter of 2009 was $22.6 million versus $20.3 million for the comparable period of 2008, an increase of 11%.

 

Kubacki continued, “Our strong revenue growth demonstrates the success we’ve had in a very challenging market to grow our business and expand our client base. We’ve done this by continuing to lend money and expand fee-based services. We believe that our community-based business model has never been more relevant than it is today and clients are responding favorably to this consistent strategy.”

 

The Company's non-interest expense was $12.7 million for the first quarter of 2009 compared to $11.4 million for the same period in 2008, an increase of 11%. Driving the increase was a $613,000 increase in regulatory expense, which resulted from higher FDIC insurance premiums that have been levied on all financial institutions, as well as a $133,000 increase in legal expense, primarily related to loan administration. The Company's efficiency ratio for the first quarter of 2009 was 56%, consistent with the same period in 2008, and improved from the 59% reported for the fourth quarter of 2008.

 

Net charge-offs totaled $2.0 million in the first quarter of 2009, versus $196,000 during the first quarter of 2008 and $1.6 million during the fourth quarter of 2008. Lakeland Financial’s allowance for loan losses as of March 31, 2009 was $21.4 million, compared to $16.8 million as of March 31, 2008 and $18.9 million as of December 31, 2008. The allowance for loan losses represented 1.15% of total loans as of March 31, 2009 versus 1.05% for the comparable period in 2008 and 1.03% as of December 31, 2008.

 

Nonperforming assets totaled $21.5 million as of March 31, 2009 compared to $22.4 million as of December 31, 2008 and $9.6 million on March 31, 2008. The ratio of nonperforming assets to total assets was 0.88% on March 31, 2009 compared to 0.94% on December 31, 2008 and 0.43% at March 31, 2008. The allowance for loan losses represented 104% of nonperforming loans as of March 31, 2009 versus 89% at December 31, 2008 and 228% at March 31, 2008.

 

“We have grown our allowance for loan losses by 14%, or $2.6 million, since year end 2008. This prudent increase is a reflection of the ongoing economic weakness in our markets and the extended impact it has on our client base. While we are cautiously pleased that our total nonperforming assets decreased slightly during the quarter, we do not believe that the region is near any meaningful recovery today,” Kubacki added.

 

For the three months ended March 31, 2009, Lakeland Financial’s average equity to average assets ratio was 7.27% compared to 6.56% for the fourth quarter of 2008 and 7.38% for the first quarter of 2008. Average total equity for the quarter ended March 31, 2009 was $173.4 million versus $151.3 million for the fourth quarter of 2008 and $149.5 million for the first quarter of 2008. Average total deposits for the quarter ended March 31, 2009 were $1.91 billion versus $1.84 billion for the fourth quarter of 2008 and $1.51 billion for the first quarter of 2008.

 

Lakeland Financial Corporation is a $2.4 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. The Company also has a Loan Production Office in Indianapolis, Indiana.

 

 

 

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 Equity Capital Markets Corp., Goldman Sachs & Company, Howe Barnes Hoefer & Arnett, Inc., Keefe, Bruyette & Woods, Inc., Knight Equity Markets, L.P., Morgan Stanley & Co., Inc., Stifel Nicolaus & Company, Inc., Susquehanna Capital Group and UBS Securities LLC.

 

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-GAAP measures to the most comparable GAAP equivalent is included in the attached financial tables where the non-GAAP measure is presented.

 

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.

 

 

 

 

 

 

 

 

 

 

 

 

LAKELAND FINANCIAL CORPORATION

FIRST QUARTER 2009 FINANCIAL HIGHLIGHTS

(Unaudited – Dollars in thousands except share and per share data)

 

 

 

 

LAKELAND FINANCIAL CORPORATION

CONSOLIDATED BALANCE SHEETS

As of March 31, 2009 and December 31, 2008

(in thousands, except share data)

 

 

 

 

 

 

LAKELAND FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

For the Three Months Ended March 31, 2009 and 2008

(in thousands except for share and per share data)

(unaudited)