SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report April 15, 2003
(Date of earliest event reported)
Lakeland Financial Corporation
(Exact name of Registrant as specified in its charter)
Indiana
(State or other jurisdiction of incorporation)
0-11487 35-1559596
(Commission File Number) (I.R.S. Employer Identification Number)
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)
Item 5. Other Information
On April 15, 2003, the Registrant issued a press release regarding
its earnings for the first quarter ended March 31, 2003. The press release is
attached hereto as Exhibit 99.1.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Business Acquired.
None.
(b) Pro Forma Financial Information.
None.
(c) Exhibits.
99.1 Press Release dated April 15, 2003
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
Dated: April 15, 2003 By: /s/ David M. Findlay
David M. Findlay
Chief Financial Officer
Exhibit 99.1
LAKELAND FINANCIAL CORPORATION
FOR IMMEDIATE RELEASE Contact: David M. Findlay
Executive Vice President
and Chief Financial Officer
(574) 267-9197
RECORD RESULTS REPORTED
FOR LAKELAND FINANCIAL
Quarterly Dividend of $0.19 Per Share Announced
Warsaw, Indiana (April 15, 2003) - Lakeland Financial Corporation
(Nasdaq/LKFN), parent company of Lake City Bank, today reported record
quarterly net income of $3.5 million for the first quarter of 2003, an
increase of 19% versus $3.0 million for the comparable period in 2002. Diluted
net income per common share for the quarter was $0.59 versus $0.50 for the
comparable period in 2002.
The Company also announced that the Board of Directors approved a cash
dividend for the first quarter of $0.19 per share, payable on April 25, 2003
to shareholders of record on April 10, 2003. The quarterly dividend represents
a 12% increase over the quarterly dividend of $0.17 paid in 2002.
Michael L. Kubacki, President and Chief Executive Officer, commented,
"The Lake City Bank team delivered another strong performance in the quarter.
We are proud to report stable growth throughout the income statement, led by a
31% increase in total noninterest income."
Kubacki continued, "Noninterest income increased to $4.4 million versus
$3.3 million in the comparable period in 2002, driven by mortgage sales gains
of $1.1 million, an increase of $718,000 versus the comparable period in 2002.
The unprecedented volume of mortgage originations continued during the first
quarter. While mortgage rates remain near historically low levels, we do not
anticipate that this level of mortgage sales gains will continue throughout
the year. Also adding to the strong increase in noninterest income was a 19%
increase in service charges on deposit accounts which grew from $1.4 million
to $1.7 million as a result of increases in both business and retail
accounts."
"Net interest income after the provision for loan losses increased by 2%
from $9.7 million in the first quarter of 2002 to $9.9 million for the first
quarter of 2003. Net interest income performance was negatively impacted by a
decline in the net interest margin from 4.12% in the first quarter of 2002 to
3.93% in the first quarter of 2003. We are pleased that the net interest
margin improved from 3.77% in the fourth quarter of 2002, but expect margin
pressures to continue due to overall lower asset yields and the generally
lower interest rate environment," added Kubacki.
Average loans for the quarter ended March 31, 2003 were $830 million
versus $746 million during the first quarter of 2002 and $801 million for
fourth quarter of 2002. Total loans as of March 31, 2003 were $827 million
versus $745 million as of March 31, 2002 and $823 million as of December 31,
2002. Lakeland Financial's allowance for loan losses as of March 31, 2003 was
$9.7 million, or 1.18% of gross loans, compared to $8.3 million, or 1.12% of
gross loans, as of March 31, 2002 and $9.5 million, or 1.16% of gross loans as
of December 31, 2002. Non-performing assets totaled $8.8 million as of March
31, 2003 versus $3.4 million on March 31, 2002 and $7.7 million as of December
31, 2002. The increase resulted primarily from the addition of a single
commercial loan. The ratio of non-performing assets to loans was 1.06% on
March 31, 2003 compared to 0.46% on March 31, 2002 and 0.94% at December 31,
2002.
Kubacki commented, "Commercial loan demand slowed in the first quarter as
our region continued to experience economic uncertainty. This reduction in
demand, in conjunction with our adherence to diligent underwriting standards,
led to relatively modest net loan growth in the quarter. Furthermore, we
retained a conservative approach to our loan loss reserve by increasing the
reserve during the quarter from $9.5 million to $9.7 million. Net charge offs
totaled $458,000 in the quarter versus $139,000 in the first quarter of 2002
and $315,000 during the fourth quarter of 2002. We remain concerned with the
overall weak economic conditions that have contributed to an increase in
non-performing assets and believe we are taking appropriate actions to monitor
and manage asset quality."
For the quarter ended March 31, 2003, Lakeland Financial's average equity
to average assets ratio was 7.07% compared to 6.80% for the first quarter of
2002 and 6.88% for the fourth quarter of 2002. Average stockholders' equity in
the quarter was $85.6 million versus $75.2 million for the comparable period
in 2002 and $82.6 million for the fourth quarter of 2002. Average total
deposits for the quarter ended March 31, 2003 were $934 million versus $817
million for the comparable period in 2002 and $916 million for the fourth
quarter of 2002.
Lakeland Financial Corporation is a $1.2 billion bank holding company
headquartered in Warsaw, Indiana. Lake City Bank serves Northern Indiana with
41 branches located in the following Indiana counties: Kosciusko, Elkhart,
Allen, St. Joseph, DeKalb, Fulton, Huntington, LaGrange, Marshall, Noble,
Pulaski and Whitley. A 42nd office is currently under construction in Warsaw
and is expected to open in late 2003.
Lakeland Financial Corporation may be accessed on its home page at
www.lakecitybank.com. The Company's common stock is traded on the Nasdaq Stock
Market under "LKFN". Marketmakers in Lakeland Financial Corporation common
shares include Stifel Nicolaus & Company, Howe Barnes Investments, Inc.,
Raymond James & Associates, Inc., McDonald Investments, Inc., First Tennessee
Capital Markets and Trident Securities.
The Company's fixed rate cumulative trust preferred securities are traded
on the Nasdaq Stock Market under the symbols "LKFNP". The annual rate on the
fixed rate securities is 9.0%.
This document (including information incorporated by reference) 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.
A number of factors, many of which are beyond the ability of the Company
to control or predict, could cause actual results to differ materially from
those in its forward-looking statements. These factors include, among others,
the following: (i) the strength of the local and national economy; (ii) the
economic impact of September 11th; (iii) changes in state and federal laws,
regulations and governmental policies concerning the Company's general
business; (iv) changes in interest rates and prepayment rates of the Company's
assets; (v) increased competition in the financial services sector and the
inability to attract new customers; (vi) changes in technology and the ability
to develop and maintain secure and reliable electronic systems; (vii) the loss
of key executives or employees; (viii) changes in consumer spending; (ix)
unexpected results of acquisitions; (x) unexpected outcomes of existing or new
litigation involving the Company; and (xi) changes in accounting policies and
practices. These risks and uncertainties should be considered in evaluating
forward-looking statements and undue reliance should not be placed on such
statements. Additional information concerning the Company and its business,
including additional factors that could materially affect the Company's
financial results, is included in the Company's filings with the Securities
and Exchange Commission.
LAKELAND FINANCIAL CORPORATION
FIRST QUARTER 2003 FINANCIAL HIGHLIGHTS
(Unaudited - Dollars in thousands except Share and Per Share Data)
3 Months Ended
March 31
2003 2002
------------- -------------
END OF PERIOD BALANCES
Assets $ 1,221,616 $ 1,108,187
Deposits 961,494 844,751
Loans 826,865 744,940
Allowance for Loan Losses 9,742 8,309
Common Stockholders' Equity 86,067 75,683
AVERAGE BALANCES
Assets
Total Assets $ 1,210,872 $ 1,106,112
Earning Assets 1,113,508 1,025,975
Investments 275,204 273,724
Loans 829,647 745,597
Liabilities and Stockholders' Equity
Total Deposits 934,078 817,353
Interest Bearing Deposits 776,931 678,262
Interest Bearing Liabilities 954,894 882,439
Common Stockholders' Equity 85,590 75,193
INCOME STATEMENT DATA
Net Interest Income $ 10,558 $ 10,221
Net Interest Income-Fully Tax Equivalent 10,792 10,431
Provision for Loan Loss 667 502
Noninterest Income 4,372 3,345
Noninterest Expense 8,964 8,569
Net Income 3,515 2,954
PER SHARE DATA
Basic Net Income Per Common Share $ 0.60 $ 0.51
Diluted Net Income Per Common Share 0.59 0.50
Cash Dividends Per Common Share 0.19 0.17
Book Value Per Common Share 14.80 13.02
Market Value - High 25.75 20.45
Market Value - Low 23.21 17.45
Basic Weighted Average Common Shares Outstanding 5,813,984 5,813,984
Diluted Weighted Average Common Shares Outstanding 5,957,134 5,901,581
KEY RATIOS
Return on Average Assets 1.18% 1.08%
Return on Average Common Stockholders' Equity 16.65 15.91
Efficiency (Noninterest Expense / Gross Interest Income
plus Noninterest Income) 60.04 63.17
Average Equity to Average Assets 7.07 6.80
Net Interest Margin 3.93 4.12
Net Charge Offs to Average Loans 0.23 0.08
Loan Loss Reserve to Loans 1.18 1.12
Nonperforming Assets to Loans 1.06 0.46
Tier 1 Leverage 8.12 7.92
Tier 1 Risk-Based Capital 10.54 10.43
Total Capital 11.59 11.42
ASSET QUALITY
Loans Past Due 90 Days or More $ 3,386 $ 213
Non-accrual Loans 5,208 1,703
Net Charge Offs 458 139
Other Real Estate Owned 109 1,435
Other Nonperforming Assets 62 51
Total Nonperforming Assets 8,765 3,402
LAKELAND FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
As of March 31, 2003 and December 31, 2002
(in thousands)
March 31, December 31,
2003 2002
------------ ------------
(Unaudited)
ASSETS
Cash and cash equivalents:
Cash and due from banks $ 52,344 $ 74,149
Short-term investments 8,190 13,000
------------ ------------
Total cash and cash equivalents 60,534 87,149
Securities available-for-sale:
U. S. Treasury and government agency securities 14,171 17,284
Mortgage-backed securities 221,498 222,036
State and municipal securities 40,527 34,785
------------ -----------
Total securities available-for-sale 276,196 274,105
Real estate mortgages held-for-sale 7,001 10,395
Loans:
Total loans 826,865 822,676
Less: Allowance for loan losses 9,742 9,533
------------ ------------
Net loans 817,123 813,143
Land, premises and equipment, net 24,612 24,768
Accrued income receivable 5,124 4,999
Goodwill 4,970 4,970
Other intangible assets 1,005 1,042
Other assets 25,051 27,215
------------ ------------
Total assets $ 1,221,616 $ 1,247,786
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest bearing deposits $ 167,558 $ 192,787
Interest bearing deposits 793,936 720,538
------------ ------------
Total deposits 961,494 913,325
Short-term borrowings:
Federal funds purchased 9,300 30,000
Securities sold under agreements
to repurchase 91,457 124,968
U.S. Treasury demand notes 581 4,000
Other borrowings 10,000 26,000
------------ ------------
Total short-term borrowings 111,338 184,968
Accrued expenses payable 10,773 12,503
Other liabilities 1,246 2,417
Long-term borrowings 31,347 31,348
Guaranteed preferred beneficial interests in
Company's subordinated debentures 19,351 19,345
------------ ------------
Total liabilities 1,135,549 1,163,906
STOCKHOLDERS' EQUITY
Common stock: No par value, 90,000,000 shares authorized,
5,813,984 shares issued and 5,770,565 outstanding as of
March 31, 2003, and 5,813,984 shares issued and 5,767,010
outstanding at December 31, 2002 1,453 1,453
Additional paid-in capital 9,591 8,537
Retained earnings 73,230 70,819
Accumulated other comprehensive income 2,612 3,937
Treasury stock, at cost (819) (866)
------------ ------------
Total stockholders' equity 86,067 83,880
------------ ------------
Total liabilities and stockholders' equity $ 1,221,616 $ 1,247,786
============ ============
LAKELAND FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
For the Three Month Ended March 31, 2003 and 2002
(in thousands except for share data)
(Unaudited)
Three Months Ended
March 31,
---------------------------
2003 2002
------------ ------------
INTEREST AND DIVIDEND INCOME
- ----------------------------
Interest and fees on loans: Taxable $ 11,833 $ 12,336
Tax exempt 63 33
------------ ------------
Total loan income 11,896 12,369
Short-term investments 27 28
Securities:
U.S. Treasury and government agency securities 170 395
Mortgage-backed securities 2,932 2,758
State and municipal securities 428 400
Other debt securities 0 115
------------ ------------
Total interest and dividend income 15,453 16,065
INTEREST EXPENSE
- ----------------
Interest on deposits 3,786 4,352
Interest on short-term borrowings 340 920
Interest on long-term borrowings 769 572
------------ ------------
Total interest expense 4,895 5,844
------------ ------------
NET INTEREST INCOME 10,558 10,221
- -------------------
Provision for loan losses 667 502
------------ ------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 9,891 9,719
- ------------------------- ------------ ------------
NONINTEREST INCOME
- ------------------
Trust and brokerage fees 610 658
Service charges on deposit accounts 1,664 1,398
Other income (net) 1,019 928
Net gains on the sale of real estate mortgages
held-for-sale 1,079 361
------------ ------------
Total noninterest income 4,372 3,345
NONINTEREST EXPENSE
- -------------------
Salaries and employee benefits 4,705 4,598
Occupancy and equipment expense 1,362 1,099
Other expense 2,897 2,872
------------ ------------
Total noninterest expense 8,964 8,569
INCOME BEFORE INCOME TAX EXPENSE 5,299 4,495
- --------------------------------
Income tax expense 1,784 1,541
------------ ------------
NET INCOME $ 3,515 $ 2,954
- ---------- ============ ============
BASIC WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 5,813,984 5,813,984
BASIC EARNINGS PER COMMON SHARE $ 0.60 $ 0.51
- ------------------------------- ============ ============
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 5,957,134 5,901,581
DILUTED EARNINGS PER COMMON SHARE $ 0.59 $ 0.50
- --------------------------------- ============ ============