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, 2001
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, 2001 and 2000,
and the related statements of changes in net assets available for benefits for
the year ended December 31, 2001 are provided as Exhibit 99.1 to this Form
11-K.
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, 2002 By: Lakeland Financial Corporation, as Trustee
to the Plan
By: /s/Jill A. DeBatty
LAKELAND FINANCIAL CORPORATION 401(k) PLAN
EXHIBIT INDEX
TO
ANNUAL REPORT ON FORM 11-K
Exhibit No. Description Sequential
Page No.
- ----------------- -------------------------------- ---------------------------
23.1 Consent of Crowe, Chizek and 5
Company LLP
99.1 Financial Statements 6
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
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 May 8, 2002, 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, 2001.
Crowe, Chizek and Company LLP
South Bend, Indiana
June 26, 2002
LAKELAND FINANCIAL CORPORATION
401(k) PLAN
FINANCIAL STATEMENTS
December 31, 2001 and 2000
LAKELAND FINANCIAL CORPORATION 401(k) PLAN
Warsaw, Indiana
FINANCIAL STATEMENTS
December 31, 2001 and 2000
CONTENTS
REPORT OF INDEPENDENT AUDITORS .......................................... 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 REPORTED
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)...... 9
REPORT OF INDEPENDENT AUDITORS
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, 2001 and 2000, and the related statement of changes in net assets
available for benefits for the year ended December 31, 2001. 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 auditing standards generally
accepted in the United States of America. 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, 2001 and 2000, and the changes in net assets available for
benefits for the year ended December 31, 2001, in conformity with accounting
principles generally accepted in the United States of America.
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 2001 basic 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 has been subjected to the
auditing procedures applied in the audit of the 2001 basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the 2001 basic financial statements taken as a whole.
Crowe, Chizek and Company LLP
South Bend, Indiana
May 8, 2002
1
LAKELAND FINANCIAL CORPORATION 401(k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2001 and 2000
- ------------------------------------------------------------------------------
2001 2000
---- ----
ASSETS
Investments, at fair value (Note 4) $ 14,248,174 $ 10,399,437
Receivables
Employer contribution 311,288 506,662
Accrued income 100,089 84,098
--------------- ----------------
411,377 590,760
--------------- ----------------
NET ASSETS AVAILABLE FOR BENEFITS $ 14,659,551 $ 10,990,197
=============== ================
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, 2001
- ------------------------------------------------------------------------------
Additions to net assets attributed to:
Investment income
Net appreciation in fair value of investments
(Note 4) $ 3,008,779
Interest 7,466
Dividends 510,837
----------------
3,527,082
Contributions
Employer 612,110
Participants 791,606
Rollovers 8,448
----------------
1,412,164
Total additions 4,939,246
Deductions from net assets attributed to:
Benefits paid directly to participants or their
beneficiaries 1,265,467
Administrative expenses 4,425
----------------
Total deductions 1,269,892
Net increase 3,669,354
Net assets available for benefits
Beginning of year 10,990,197
----------------
End of year $ 14,659,551
================
See accompanying notes to financial statements.
3
LAKELAND FINANCIAL CORPORATION 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2001 and 2000
- ------------------------------------------------------------------------------
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. An employee becomes eligible to enter the
Plan on January 1, April 1, July 1 and October 1 following attainment of age
21 and completion of one thousand hours of service in a continuous
twelve-month period.
The Plan was 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. 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 eight funds, or investment options, one
of which is invested primarily in employer stock. The "Large-Cap Blend",
"Large-Cap Growth" and "Mid-Cap Growth" funds are invested primarily in common
and preferred stock. The "Government Bond Fund" is invested primarily in fixed
income obligations of United States Government agencies. The "Money Market
Fund" is invested primarily in short-term fixed income investments having
maturities of one year or less. The "Balanced Fund" is invested primarily in a
balanced portfolio, and the "International Fund" is invested primarily in
foreign common stocks.
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.
(Continued)
4
LAKELAND FINANCIAL CORPORATION 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2001 and 2000
- ------------------------------------------------------------------------------
NOTE 1 - DESCRIPTION OF PLAN (Continued)
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. Participants may defer from 1% to 12% of their pay. Each year
the employer may set a matching percentage, up to 6% of qualifying employee
contributions, as well as any discretionary contributions. For 2001, the
matching percentage was set at 100% and 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
LAKELAND FINANCIAL CORPORATION 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2001 and 2000
- ------------------------------------------------------------------------------
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 accounting
principles generally accepted in the United States of America.
Investments Valuation and Income Recognition: Investments are stated at fair
value as determined by quoted market prices, if available. 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.
Estimates: The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires the plan administrator to make estimates and assumptions that affect
certain reported amounts and disclosures, and actual results may differ from
these estimates. It is at least reasonably possible that a significant change
may occur in the near term for the estimates of investment valuation.
Concentration of Credit Risk: At December 31, 2001 and 2000, the majority of
the Plan's assets were invested in LFC common stock.
(Continued)
6
LAKELAND FINANCIAL CORPORATION 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2001 and 2000
- ------------------------------------------------------------------------------
NOTE 3 - PLAN TERMINATION
Although it has not expressed any intent to do so, the Corporation 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,
2001 2000
---- ----
LFC common stock, 667,261 and
646,911 shares, respectively $ 11,757,139 $ 8,086,388
Enterprise growth fund, 32,415 and
27,497 units, respectively 576,332 564,237
The following table presents the net appreciation (depreciation) (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, 2001.
Mutual funds $ (346,024)
LFC common stock 3,354,803
---------------
$ 3,008,779
All of the Plan's investments are uninsured.
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.
(Continued)
7
LAKELAND FINANCIAL CORPORATION 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2001 and 2000
- ------------------------------------------------------------------------------
NOTE 5 - PARTY-IN-INTEREST TRANSACTIONS (Continued)
During 2001, the Plan purchased 96,280 shares of Lakeland Financial
Corporation common stock at a cost ranging from $12.75 to $17.50 per share. In
2001, the Plan sold 31,832 shares of Lakeland Financial Corporation common
stock (at a sales price ranging from $11.82 to $17.00 per share) and
distributed 44,098 shares of common stock to employees due to termination or
retirement.
At December 31, 2001 and 2000, the Plan held the following party-in-interest
investments (at estimated fair value):
2001:
Lakeland Financial Corporation common stock -
667,261 shares $ 11,757,139
===============
2000:
Lakeland Financial Corporation common stock -
646,911 shares $ 8,086,388
===============
NOTE 6 - TAX STATUS
The Plan is maintained using a prototype plan document sponsored by AMI
Benefit Plan Administrators, Inc. The Internal Revenue Service has ruled in a
letter dated September 18, 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.
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
$593,080 and $3,840 at December 31, 2001 and 2000.
8
SUPPLEMENTAL INFORMATION
LAKELAND FINANCIAL CORPORATION 401(k) PLAN
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2001
- ------------------------------------------------------------------------------
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 account 177,367 units $ 177,367
Mutual funds
Franklin U.S. government 16,937 units 159,378
Federated international equity 14,760 units 222,290
AIM constellation fund 17,201 units 380,132
Enterprise growth fund 32,415 units 576,332
American AMCAP fund 35,068 units 565,293
Lake City balanced fund 68,741 units 405,808
---------------
2,309,233
* Lakeland Financial Corporation
common stock 667,261 shares 11,757,139
Loans to participants Interest rate 9.5% 4,435
---------------
$ 14,248,174
* Denotes party-in-interest
(1) Cost is not presented as all investments are participant directed investments.