Lakeland Financial Reports Record First Quarter 2022 Performance
Lakeland Financial Corporation (LKFN) reported a record net income of $23.6 million for Q1 2022, reflecting a 3% increase year-over-year. Diluted earnings per share rose to $0.92, up 2%. However, net income decreased by 3% compared to the previous quarter. Core loan growth, excluding PPP loans, was $263.3 million, or 6%, with total deposits rising 11% year-over-year to $5.82 billion. The net interest margin decreased to 2.93%, down 26 basis points from the previous year due to lower PPP fee income.
- Record net income of $23.6 million for Q1 2022, a 3% increase from Q1 2021.
- Diluted EPS increased to $0.92, up 2% year-over-year.
- Core loan growth of $263.3 million, or 6%, excluding PPP loans.
- Total deposits grew by 11% year-over-year to $5.82 billion.
- Noninterest income increased by $978,000, or 10%, quarter-over-quarter.
- Dividend increased by 18% to $0.40 per share.
- Net income decreased by 3% compared to the fourth quarter of 2021.
- Net interest margin decreased to 2.93%, down 26 basis points from the prior year.
- Total loans decreased by 3% year-over-year to $4.35 billion, primarily due to PPP loan forgiveness.
WARSAW, Ind., April 25, 2022 (GLOBE NEWSWIRE) -- Lakeland Financial Corporation (Nasdaq Global Select/LKFN), parent company of Lake City Bank, today reported record first quarter net income of
David M. Findlay, President and Chief Executive Officer commented, “Our record results for the first quarter are gratifying, and we are particularly pleased with the growth of our loan portfolio and the anticipated positive directional shift in our net interest margin going forward. The Lake City Bank team has demonstrated terrific resiliency over the last two years, and we’re excited to see strong organic growth returning to the balance sheet.”
Financial Performance – First Quarter 2022
First Quarter 2022 versus First Quarter 2021 highlights:
- Return on average equity of
14.04% , compared to14.27% - Return on average assets of
1.44% , compared to1.58% - Core loan growth, excluding PPP loans, of
$263.3 million , or6% - Core deposit growth of
$590.4 million , or11% - Noninterest bearing demand deposit account growth of
$276.4 million , or17% - Net interest income increase of
$1.2 million , or3% - Net interest margin of
2.93% compared to3.19% - Provision expense of
$417,000 compared to$1.5 million , a decrease of$1.1 million , or72% - Noninterest expense growth of
$223,000 , or1% - Dividend per share increase of
18% to$0.40 from$0.34 - Individually analyzed and watch list loans decrease of
$52.6 million , or19% - Total risk-based capital ratio of
15.15% compared to15.20% - Tangible capital ratio of
9.22% compared to10.77%
First Quarter 2022 versus Fourth Quarter 2021 highlights:
- Return on average equity of
14.04% , compared to13.91% - Return on average assets of
1.44% compared to1.51% - Core loan growth, excluding PPP loans, of
$79.5 million , or2% - Core deposit growth of
$85.0 million , or1% - Noninterest bearing demand deposit account contraction of
$15.1 million , or1% - Net interest income decrease of
$127,000 , or nominal percentage change - Net interest margin, net of PPP impact, expansion of 3 basis points to
2.90% compared to2.87% - Provision expense of
$417,000 compared to no provision expense - Noninterest income growth of
$978,000 , or10% - Individually analyzed and watch list loans decrease of
$15.7 million , or7% - Total risk-based capital of
15.15% compared to15.34% - Tangible capital ratio was
9.22% compared to10.70%
Return on average total equity for the first quarter of 2022 was
Average loans, excluding PPP loans, were
Total loans, excluding PPP loans, increased by
Findlay added, “For the second consecutive quarter, organic loan growth has been strong as loan originations have outpaced commercial loan paydowns. We’re also encouraged by the continued trend of commercial line utilization, which has increased in each of the last four quarters and now sits at
Average total deposits were
Core deposits, which exclude brokered deposits, increased by
Investment securities were
Findlay added, “Healthy growth and retention of deposits continue to contribute to significant levels of liquidity on our balance sheet. Average balances in commercial and retail demand deposit accounts are more than double the levels experienced in March of 2020. As a result, we continued to deploy excess liquidity to the investment portfolio during the first quarter. Our balance sheet remains highly asset sensitive as we smartly manage the investment portfolio, and we look forward to our earning asset growth being driven by growth in loans.”
The company’s net interest margin decreased 26 basis points to
Linked quarter net interest margin excluding PPP, which is a non-GAAP financial measure, was 3 basis points higher at
Net interest income increased by
“Our asset-sensitive balance sheet will benefit from the anticipated Federal Reserve Bank rate actions, which were initiated in the first quarter of 2022. Given that
The company recorded a provision for credit losses of
The company’s credit loss reserve to total loans was
Net charge offs in the first quarter of 2022 were
Nonperforming assets increased
Findlay stated, “Reflective of improving asset quality trends, watch list loans have decreased for five consecutive quarters as we have cautiously moved through the challenges presented by the economic impact of the pandemic. Our borrowers continue to manage through the impact of labor availability and cost, inflation on input costs and the overall impact of this environment.”
The company’s noninterest income decreased
Noninterest income increased by
The company’s noninterest expense increased by
On a linked quarter basis, noninterest expense increased by
The company’s efficiency ratio was
“We opened our 52nd office during the quarter in Elkhart, Indiana and continue to evolve the branch footprint to ensure that it reflects the changing role of a retail office in a digital environment. The relationship-driven culture of Lake City Bank is still an effective platform, and we are pleased with the design and functionality of our future offices,” added Findlay.
Paycheck Protection Program
During the three months ended March 31, 2022, the bank has continued processing forgiveness applications for PPP loans made during the first and second rounds of the PPP program. As of March 31, 2022, Lake City Bank had
Information regarding Lakeland Financial Corporation may be accessed on the home page of its subsidiary, Lake City Bank, at lakecitybank.com. The company’s common stock is traded on the Nasdaq Global Select Market under “LKFN.” In addition to the results presented in accordance with generally accepted accounting principles in the United States, this earnings release contains certain non-GAAP financial measures. The company believes that providing non-GAAP financial measures provides investors with information useful to understanding the company’s financial performance. Additionally, these non-GAAP measures are used by management for planning and forecasting purposes, including tangible common equity, tangible assets, tangible book value per share, tangible common equity to tangible assets ratio and pretax pre-provision earnings. A reconciliation of these and other non-GAAP measures to the most comparable GAAP equivalents is included in the attached financial tables where the non-GAAP measures are 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,” “continue,” “plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should” or other similar expressions. The company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain and, accordingly, the reader is cautioned not to place undue reliance on any forward-looking statements made by the company. 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. Numerous factors could cause the company’s actual results to differ from those reflected in forward-looking statements, including the effects of governmental monetary and fiscal policies and the impact on the current economic environment, including its effects on our customers, local economic conditions, our operations and vendors, and the responses of federal, state and local governmental authorities, as well as those identified in the company’s filings with the Securities and Exchange Commission, including the company’s Annual Report on Form 10-K and quarterly reports on Form 10-Q.
LAKELAND FINANCIAL CORPORATION
FIRST QUARTER 2022 FINANCIAL HIGHLIGHTS
Three Months Ended | ||||||||||||||
(Unaudited – Dollars in thousands, except per share data) | March 31, | December 31, | March 31, | |||||||||||
END OF PERIOD BALANCES | 2022 | 2021 | 2021 | |||||||||||
Assets | $ | 6,572,259 | $ | 6,557,323 | $ | 6,016,642 | ||||||||
Deposits | 5,820,623 | 5,735,407 | 5,229,970 | |||||||||||
Brokered Deposits | 10,244 | 10,003 | 10,003 | |||||||||||
Core Deposits (1) | 5,810,379 | 5,725,404 | 5,219,967 | |||||||||||
Loans | 4,353,714 | 4,287,841 | 4,474,631 | |||||||||||
Paycheck Protection Program (PPP) Loans | 12,506 | 26,151 | 396,723 | |||||||||||
Allowance for Credit Losses | 67,526 | 67,773 | 71,844 | |||||||||||
Total Equity | 609,102 | 704,906 | 651,668 | |||||||||||
Goodwill net of deferred tax assets | 3,803 | 3,794 | 3,794 | |||||||||||
Tangible Common Equity (2) | 605,299 | 701,112 | 647,874 | |||||||||||
AVERAGE BALANCES | ||||||||||||||
Total Assets | $ | 6,651,943 | $ | 6,397,397 | $ | 5,887,361 | ||||||||
Earning Assets | 6,392,075 | 6,148,085 | 5,638,202 | |||||||||||
Investments - available-for-sale | 1,514,024 | 1,336,492 | 772,247 | |||||||||||
Loans | 4,300,926 | 4,279,262 | 4,567,226 | |||||||||||
Paycheck Protection Program (PPP) Loans | 17,555 | 62,910 | 402,730 | |||||||||||
Total Deposits | 5,848,638 | 5,585,537 | 5,107,019 | |||||||||||
Interest Bearing Deposits | 3,882,521 | 3,784,837 | 3,540,974 | |||||||||||
Interest Bearing Liabilities | 3,957,547 | 3,859,971 | 3,617,491 | |||||||||||
Total Equity | 682,692 | 692,396 | 653,329 | |||||||||||
INCOME STATEMENT DATA | ||||||||||||||
Net Interest Income | $ | 44,880 | $ | 45,007 | $ | 43,679 | ||||||||
Net Interest Income-Fully Tax Equivalent | 46,148 | 46,140 | 44,366 | |||||||||||
Provision for Credit Losses | 417 | 0 | 1,477 | |||||||||||
Noninterest Income | 10,687 | 9,709 | 12,557 | |||||||||||
Noninterest Expense | 26,969 | 24,926 | 26,746 | |||||||||||
Net Income | 23,642 | 24,283 | 22,983 | |||||||||||
Pretax Pre-Provision Earnings (2) | 28,598 | 29,790 | 29,490 | |||||||||||
PER SHARE DATA | ||||||||||||||
Basic Net Income Per Common Share | $ | 0.93 | $ | 0.95 | $ | 0.90 | ||||||||
Diluted Net Income Per Common Share | 0.92 | 0.95 | 0.90 | |||||||||||
Cash Dividends Declared Per Common Share | 0.40 | 0.34 | 0.34 | |||||||||||
Dividend Payout | 43.48 | % | 35.79 | % | 37.78 | % | ||||||||
Book Value Per Common Share (equity per share issued) | 23.86 | 27.65 | 25.58 | |||||||||||
Tangible Book Value Per Common Share (2) | 23.71 | 27.50 | 25.43 | |||||||||||
Market Value – High | 85.71 | 80.77 | 77.05 | |||||||||||
Market Value – Low | 72.78 | 71.19 | 53.03 | |||||||||||
Basic Weighted Average Common Shares Outstanding | 25,515,271 | 25,486,484 | 25,457,659 | |||||||||||
Diluted Weighted Average Common Shares Outstanding | 25,690,372 | 25,669,042 | 25,550,111 | |||||||||||
KEY RATIOS | ||||||||||||||
Return on Average Assets | 1.44 | % | 1.51 | % | 1.58 | % | ||||||||
Three Months Ended | ||||||||||||||
March 31, | December 31, | March 31, | ||||||||||||
2022 | 2021 | 2021 | ||||||||||||
Return on Average Total Equity | 14.04 | 13.91 | 14.27 | |||||||||||
Average Equity to Average Assets | 10.26 | 10.82 | 11.10 | |||||||||||
Net Interest Margin | 2.93 | 2.98 | 3.19 | |||||||||||
Net Interest Margin, Excluding PPP Loans (2) | 2.90 | 2.87 | 3.06 | |||||||||||
Efficiency (Noninterest Expense / Net Interest Income plus Noninterest Income) | 48.53 | 45.56 | 47.56 | |||||||||||
Tier 1 Leverage (3) | 10.47 | 10.72 | 10.79 | |||||||||||
Tier 1 Risk-Based Capital (3) | 13.90 | 14.09 | 13.95 | |||||||||||
Common Equity Tier 1 (CET1) (3) | 13.90 | 14.09 | 13.95 | |||||||||||
Total Capital (3) | 15.15 | 15.34 | 15.20 | |||||||||||
Tangible Capital (2) (3) | 9.22 | 10.70 | 10.77 | |||||||||||
ASSET QUALITY | ||||||||||||||
Loans Past Due 30 - 89 Days | $ | 3,671 | $ | 729 | $ | 739 | ||||||||
Loans Past Due 90 Days or More | 18 | 117 | 18 | |||||||||||
Non-accrual Loans | 13,900 | 14,973 | 11,707 | |||||||||||
Nonperforming Loans (includes nonperforming TDRs) | 13,918 | 15,090 | 11,725 | |||||||||||
Other Real Estate Owned | 196 | 196 | 447 | |||||||||||
Other Nonperforming Assets | 17 | 0 | 17 | |||||||||||
Total Nonperforming Assets | 14,131 | 15,286 | 12,189 | |||||||||||
Performing Troubled Debt Restructurings | 4,976 | 5,121 | 5,111 | |||||||||||
Nonperforming Troubled Debt Restructurings (included in nonperforming loans) | 6,443 | 6,218 | 6,508 | |||||||||||
Total Troubled Debt Restructurings | 11,419 | 11,339 | 11,619 | |||||||||||
Individually Analyzed Loans | 24,554 | 25,581 | 20,149 | |||||||||||
Non-Individually Analyzed Watch List Loans | 194,222 | 208,881 | 251,183 | |||||||||||
Total Individually Analyzed and Watch List Loans | 218,776 | 234,462 | 271,332 | |||||||||||
Gross Charge Offs | 740 | 5,390 | 236 | |||||||||||
Recoveries | 76 | 115 | 145 | |||||||||||
Net Charge Offs/(Recoveries) | 664 | 5,275 | 91 | |||||||||||
Net Charge Offs/(Recoveries) to Average Loans | 0.06 | % | 0.49 | % | 0.01 | % | ||||||||
Credit Loss Reserve to Loans | 1.55 | % | 1.58 | % | 1.61 | % | ||||||||
Credit Loss Reserve to Loans, Excluding PPP Loans (2) | 1.56 | % | 1.59 | % | 1.76 | % | ||||||||
Credit Loss Reserve to Nonperforming Loans | 485.18 | % | 449.13 | % | 612.70 | % | ||||||||
Credit Loss Reserve to Nonperforming Loans and Performing TDRs | 357.39 | % | 335.33 | % | 426.70 | % | ||||||||
Nonperforming Loans to Loans | 0.32 | % | 0.35 | % | 0.26 | % | ||||||||
Nonperforming Assets to Assets | 0.22 | % | 0.23 | % | 0.20 | % | ||||||||
Total Individually Analyzed and Watch List Loans to Total Loans | 5.03 | % | 5.47 | % | 6.06 | % | ||||||||
Total Individually Analyzed and Watch List Loans to Total Loans, Excluding PPP Loans (2) | 5.04 | % | 5.50 | % | 6.65 | % | ||||||||
OTHER DATA | ||||||||||||||
Full Time Equivalent Employees | 585 | 582 | 587 | |||||||||||
Offices | 52 | 51 | 50 | |||||||||||
(1) Core deposits equals deposits less brokered deposits
(2) Non-GAAP financial measure - see "Reconciliation of Non-GAAP Financial Measures"
(3) Capital ratios for March 31, 2022 are preliminary until the Call Report is filed.
CONSOLIDATED BALANCE SHEETS (in thousands, except share data) | |||||||
| March 31, 2022 | December 31, 2021 | |||||
| (Unaudited) | | |||||
ASSETS | |||||||
Cash and due from banks | $ | 71,669 | $ | 51,830 | |||
Short-term investments | 403,355 | 631,410 | |||||
Total cash and cash equivalents | 475,024 | 683,240 | |||||
| |||||||
Securities available-for-sale (carried at fair value) | 1,522,535 | 1,398,558 | |||||
Real estate mortgage loans held-for-sale | 2,234 | 7,470 | |||||
| |||||||
Loans, net of allowance for credit losses of | 4,286,188 | 4,220,068 | |||||
| |||||||
Land, premises and equipment, net | 58,883 | 59,309 | |||||
Bank owned life insurance | 97,722 | 97,652 | |||||
Federal Reserve and Federal Home Loan Bank stock | 12,840 | 13,772 | |||||
Accrued interest receivable | 19,448 | 17,674 | |||||
Goodwill | 4,970 | 4,970 | |||||
Other assets | 92,415 | 54,610 | |||||
Total assets | $ | 6,572,259 | $ | 6,557,323 | |||
| |||||||
| |||||||
LIABILITIES | |||||||
Noninterest bearing deposits | $ | 1,880,418 | $ | 1,895,481 | |||
Interest bearing deposits | 3,940,205 | 3,839,926 | |||||
Total deposits | 5,820,623 | 5,735,407 | |||||
| |||||||
Borrowings - Federal Home Loan Bank advances | 75,000 | 75,000 | |||||
| |||||||
Accrued interest payable | 2,303 | 2,619 | |||||
Other liabilities | 65,231 | 39,391 | |||||
Total liabilities | 5,963,157 | 5,852,417 | |||||
| |||||||
STOCKHOLDERS’ EQUITY | |||||||
Common stock: 90,000,000 shares authorized, no par value | |||||||
25,816,997 shares issued and 25,346,149 outstanding as of March 31, 2022 | |||||||
25,777,609 shares issued and 25,300,793 outstanding as of December 31, 2021 | 121,138 | 120,615 | |||||
Retained earnings | 596,578 | 583,134 | |||||
Accumulated other comprehensive income (loss) | (93,687 | ) | 16,093 | ||||
Treasury stock at cost (470,848 shares as of March 31, 2022, 476,816 shares as of December 31, 2021) | (15,016 | ) | (15,025 | ) | |||
Total stockholders’ equity | 609,013 | 704,817 | |||||
Noncontrolling interest | 89 | 89 | |||||
Total equity | 609,102 | 704,906 | |||||
Total liabilities and equity | $ | 6,572,259 | $ | 6,557,323 |
CONSOLIDATED STATEMENTS OF INCOME (unaudited - in thousands, except share and per share data) | |||||||
| Three Months Ended March 31, | ||||||
| 2022 | 2021 | |||||
NET INTEREST INCOME | |||||||
Interest and fees on loans | |||||||
Taxable | $ | 39,735 | $ | 43,461 | |||
Tax exempt | 169 | 104 | |||||
Interest and dividends on securities | | | |||||
Taxable | 3,278 | 1,835 | |||||
Tax exempt | 4,606 | 2,489 | |||||
Other interest income | 246 | 88 | |||||
Total interest income | 48,034 | 47,977 | |||||
| | | |||||
Interest on deposits | 3,081 | 4,218 | |||||
Interest on borrowings | | | |||||
Short-term | 0 | 7 | |||||
Long-term | 73 | 73 | |||||
Total interest expense | 3,154 | 4,298 | |||||
| | | |||||
NET INTEREST INCOME | 44,880 | 43,679 | |||||
| | | |||||
Provision for credit losses | 417 | 1,477 | |||||
| | | |||||
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | 44,463 | 42,202 | |||||
| | | |||||
NONINTEREST INCOME | |||||||
Wealth advisory fees | 2,287 | 2,178 | |||||
Investment brokerage fees | 519 | 464 | |||||
Service charges on deposit accounts | 2,809 | 2,491 | |||||
Loan and service fees | 2,889 | 2,776 | |||||
Merchant card fee income | 815 | 622 | |||||
Bank owned life insurance income (loss) | (83 | ) | 756 | ||||
Interest rate swap fee income | 50 | 249 | |||||
Mortgage banking income | 509 | 1,373 | |||||
Net securities gains | 0 | 753 | |||||
Other income | 892 | 895 | |||||
Total noninterest income | 10,687 | 12,557 | |||||
| | | |||||
NONINTEREST EXPENSE | |||||||
Salaries and employee benefits | 14,392 | 14,385 | |||||
Net occupancy expense | 1,629 | 1,503 | |||||
Equipment costs | 1,411 | 1,445 | |||||
Data processing fees and supplies | 3,081 | 3,319 | |||||
Corporate and business development | 1,219 | 1,509 | |||||
FDIC insurance and other regulatory fees | 439 | 464 | |||||
Professional fees | 1,559 | 1,877 | |||||
Other expense | 3,239 | 2,244 | |||||
Total noninterest expense | 26,969 | 26,746 | |||||
| | | |||||
INCOME BEFORE INCOME TAX EXPENSE | 28,181 | 28,013 | |||||
Income tax expense | 4,539 | 5,030 | |||||
NET INCOME | $ | 23,642 | $ | 22,983 | |||
| | | |||||
Three Months Ended March 31, | |||||||
BASIC WEIGHTED AVERAGE COMMON SHARES | 25,515,271 | 25,457,659 | |||||
| | | |||||
BASIC EARNINGS PER COMMON SHARE | $ | 0.93 | $ | 0.90 | |||
| | | |||||
DILUTED WEIGHTED AVERAGE COMMON SHARES | 25,690,372 | 25,550,111 | |||||
| |||||||
DILUTED EARNINGS PER COMMON SHARE | $ | 0.92 | $ | 0.90 |
LAKELAND FINANCIAL CORPORATION
LOAN DETAIL
(unaudited, in thousands)
March 31, 2022 | December 31, 2021 | March 31, 2021 | ||||||||||||||||||
Commercial and industrial loans: | ||||||||||||||||||||
Working capital lines of credit loans | $ | 678,567 | 15.6 | % | $ | 652,861 | 15.2 | % | $ | 574,659 | 12.8 | % | ||||||||
Non-working capital loans | 784,890 | 18.0 | 736,608 | 17.2 | 1,101,805 | 24.6 | ||||||||||||||
Total commercial and industrial loans | 1,463,457 | 33.6 | 1,389,469 | 32.4 | 1,676,464 | 37.4 | ||||||||||||||
Commercial real estate and multi-family residential loans: | ||||||||||||||||||||
Construction and land development loans | 399,618 | 9.2 | 379,813 | 8.9 | 370,906 | 8.3 | ||||||||||||||
Owner occupied loans | 724,588 | 16.6 | 739,371 | 17.2 | 669,390 | 14.9 | ||||||||||||||
Nonowner occupied loans | 619,163 | 14.2 | 588,458 | 13.7 | 605,640 | 13.5 | ||||||||||||||
Multifamily loans | 214,003 | 4.9 | 247,204 | 5.8 | 301,385 | 6.7 | ||||||||||||||
Total commercial real estate and multi-family residential loans | 1,957,372 | 44.9 | 1,954,846 | 45.6 | 1,947,321 | 43.4 | ||||||||||||||
Agri-business and agricultural loans: | ||||||||||||||||||||
Loans secured by farmland | 164,252 | 3.8 | 206,331 | 4.8 | 154,826 | 3.5 | ||||||||||||||
Loans for agricultural production | 259,417 | 6.0 | 239,494 | 5.6 | 192,341 | 4.3 | ||||||||||||||
Total agri-business and agricultural loans | 423,669 | 9.8 | 445,825 | 10.4 | 347,167 | 7.8 | ||||||||||||||
Other commercial loans | 78,412 | 1.8 | 73,490 | 1.7 | 86,477 | 1.9 | ||||||||||||||
Total commercial loans | 3,922,910 | 90.1 | 3,863,630 | 90.1 | 4,057,429 | 90.5 | ||||||||||||||
Consumer 1-4 family mortgage loans: | ||||||||||||||||||||
Closed end first mortgage loans | 180,448 | 4.1 | 176,561 | 4.1 | 161,573 | 3.6 | ||||||||||||||
Open end and junior lien loans | 158,583 | 3.6 | 156,238 | 3.6 | 157,492 | 3.5 | ||||||||||||||
Residential construction and land development loans | 11,135 | 0.3 | 11,921 | 0.3 | 9,221 | 0.2 | ||||||||||||||
Total consumer 1-4 family mortgage loans | 350,166 | 8.0 | 344,720 | 8.0 | 328,286 | 7.3 | ||||||||||||||
Other consumer loans | 83,395 | 1.9 | 82,755 | 1.9 | 99,052 | 2.2 | ||||||||||||||
Total consumer loans | 433,561 | 9.9 | 427,475 | 9.9 | 427,338 | 9.5 | ||||||||||||||
Subtotal | 4,356,471 | 100.0 | % | 4,291,105 | 100.0 | % | 4,484,767 | 100.0 | % | |||||||||||
Less: Allowance for credit losses | (67,526 | ) | (67,773 | ) | (71,844 | ) | | |||||||||||||
Net deferred loan fees | (2,757 | ) | (3,264 | ) | (10,136 | ) | | |||||||||||||
Loans, net | $ | 4,286,188 | $ | 4,220,068 | $ | 4,402,787 | |
LAKELAND FINANCIAL CORPORATION
DEPOSITS AND BORROWINGS
(unaudited, in thousands)
March 31, 2022 | December 31, 2021 | March 31, 2021 | ||||||
Noninterest bearing demand deposits | $ | 1,880,418 | $ | 1,895,481 | $ | 1,604,068 | ||
Savings and transaction accounts: | ||||||||
Savings deposits | 423,030 | 409,343 | 357,791 | |||||
Interest bearing demand deposits | 2,702,912 | 2,601,065 | 2,261,232 | |||||
Time deposits: | ||||||||
Deposits of | 620,737 | 627,123 | 777,460 | |||||
Other time deposits | 193,526 | 202,395 | 229,419 | |||||
Total deposits | $ | 5,820,623 | $ | 5,735,407 | $ | 5,229,970 | ||
FHLB advances | 75,000 | 75,000 | 75,000 | |||||
Total funding sources | $ | 5,895,623 | $ | 5,810,407 | $ | 5,304,970 |
LAKELAND FINANCIAL CORPORATION
AVERAGE BALANCE SHEET AND NET INTEREST ANALYSIS
(UNAUDITED)
Three Months Ended March 31, 2022 | Three Months Ended December 31, 2021 | Three Months Ended March 31, 2021 | ||||||||||||||||||||||||||||
(fully tax equivalent basis, dollars in thousands) | Average Balance | Interest Income | Yield (1)/ Rate | Average Balance | Interest Income | Yield (1)/ Rate | Average Balance | Interest Income | Yield (1)/ Rate | |||||||||||||||||||||
Earning Assets | ||||||||||||||||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||
Taxable (2)(3) | $ | 4,278,894 | $ | 39,735 | 3.77 | % | $ | 4,260,960 | $ | 41,253 | 3.84 | % | $ | 4,554,183 | $ | 43,461 | 3.87 | % | ||||||||||||
Tax exempt (1) | 22,032 | 213 | 3.92 | 18,302 | 184 | 3.99 | 13,043 | 131 | 4.07 | |||||||||||||||||||||
Investments: (1) | ||||||||||||||||||||||||||||||
Available-for-sale | 1,514,024 | 9,108 | 2.44 | 1,336,492 | 7,817 | 2.32 | 772,247 | 4,984 | 2.62 | |||||||||||||||||||||
Short-term investments | 2,143 | 1 | 0.11 | 2,201 | 1 | 0.11 | 2,206 | 1 | 0.18 | |||||||||||||||||||||
Interest bearing deposits | 574,982 | 245 | 0.17 | 530,130 | 200 | 0.15 | 296,523 | 87 | 0.12 | |||||||||||||||||||||
Total earning assets | $ | 6,392,075 | $ | 49,302 | 3.13 | % | $ | 6,148,085 | $ | 49,455 | 3.19 | % | $ | 5,638,202 | $ | 48,664 | 3.50 | % | ||||||||||||
Less: Allowance for credit losses | (68,051 | ) | (72,972 | ) | (70,956 | ) | ||||||||||||||||||||||||
Nonearning Assets | ||||||||||||||||||||||||||||||
Cash and due from banks | 71,905 | 72,908 | 70,720 | |||||||||||||||||||||||||||
Premises and equipment | 59,309 | 59,712 | 59,278 | |||||||||||||||||||||||||||
Other nonearning assets | 196,705 | 189,664 | 190,117 | |||||||||||||||||||||||||||
Total assets | $ | 6,651,943 | $ | 6,397,397 | $ | 5,887,361 | ||||||||||||||||||||||||
Interest Bearing Liabilities | ||||||||||||||||||||||||||||||
Savings deposits | $ | 408,314 | $ | 75 | 0.07 | % | $ | 384,229 | $ | 74 | 0.08 | % | $ | 330,069 | $ | 61 | 0.07 | % | ||||||||||||
Interest bearing checking accounts | 2,642,003 | 1,862 | 0.29 | 2,563,557 | 1,854 | 0.29 | 2,182,164 | 1,495 | 0.28 | |||||||||||||||||||||
Time deposits: | ||||||||||||||||||||||||||||||
In denominations under | 198,257 | 346 | 0.71 | 203,706 | 388 | 0.76 | 235,271 | 648 | 1.12 | |||||||||||||||||||||
In denominations over | 633,947 | 798 | 0.51 | 633,345 | 924 | 0.58 | 793,470 | 2,014 | 1.03 | |||||||||||||||||||||
Miscellaneous short-term borrowings | 26 | 0 | 0.00 | 134 | 0 | 0.00 | 1,517 | 7 | 1.87 | |||||||||||||||||||||
Long-term borrowings | 75,000 | 73 | 0.40 | 75,000 | 75 | 0.40 | 75,000 | 73 | 0.39 | |||||||||||||||||||||
Total interest bearing liabilities | $ | 3,957,547 | $ | 3,154 | 0.32 | % | $ | 3,859,971 | $ | 3,315 | 0.34 | % | $ | 3,617,491 | $ | 4,298 | 0.48 | % | ||||||||||||
Noninterest Bearing Liabilities | ||||||||||||||||||||||||||||||
Demand deposits | 1,966,117 | 1,800,700 | 1,566,045 | |||||||||||||||||||||||||||
Other liabilities | 45,587 | 44,330 | 50,496 | |||||||||||||||||||||||||||
Stockholders' Equity | 682,692 | 692,396 | 653,329 | |||||||||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 6,651,943 | $ | 6,397,397 | $ | 5,887,361 | ||||||||||||||||||||||||
Interest Margin Recap | ||||||||||||||||||||||||||||||
Interest income/average earning assets | 49,302 | 3.13 | 49,455 | 3.19 | 48,664 | 3.50 | ||||||||||||||||||||||||
Interest expense/average earning assets | 3,154 | 0.20 | 3,315 | 0.21 | 4,298 | 0.31 | ||||||||||||||||||||||||
Net interest income and margin | $ | 46,148 | 2.93 | % | $ | 46,140 | 2.98 | % | $ | 44,366 | 3.19 | % |
(1) | Tax exempt income was converted to a fully taxable equivalent basis at a 21 percent tax rate. The tax equivalent rate for tax exempt loans and tax exempt securities acquired after January 1, 1983 included the Tax Equity and Fiscal Responsibility Act of 1982 (“TEFRA”) adjustment applicable to nondeductible interest expenses. Taxable equivalent basis adjustments were | |
(2) | Loan fees are included as taxable loan interest income. Net loan fees attributable to PPP loans were | |
(3) | Nonaccrual loans are included in the average balance of taxable loans. |
Reconciliation of Non-GAAP Financial Measures
The allowance for credit losses to loans, excluding PPP loans, and total individually analyzed and watch list loans to total loans, excluding PPP loans, are non-GAAP ratios that management believes are important because they provide better comparability to prior periods. PPP loans are fully guaranteed by the SBA and have not been allocated for within the allowance for credit losses.
A reconciliation of these non-GAAP measures is provided below (dollars in thousands).
March 31, 2022 | December 31, 2021 | March 31, 2021 | |||||||||
Total Loans | $ | 4,353,714 | $ | 4,287,841 | $ | 4,474,631 | |||||
Less: PPP Loans | 12,506 | 26,151 | 396,723 | ||||||||
Total Loans, Excluding PPP Loans | 4,341,208 | 4,261,690 | 4,077,908 | ||||||||
Allowance for Credit Losses | $ | 67,526 | $ | 67,773 | $ | 71,844 | |||||
Credit Loss Reserve to Total Loans | 1.55 | % | 1.58 | % | 1.61 | % | |||||
Credit Loss Reserve to Total Loans, Excluding PPP Loans | 1.56 | % | 1.59 | % | 1.76 | % | |||||
Total Individually Analyzed and Watch List Loans | $ | 218,776 | $ | 234,462 | $ | 271,332 | |||||
Total Individually Analyzed and Watch List Loans to Total Loans | 5.03 | % | 5.47 | % | 6.06 | % | |||||
Total Individually Analyzed and Watch List Loans to Total Loans, Excluding PPP Loans | 5.04 | % | 5.50 | % | 6.65 | % |
Tangible common equity, tangible assets, tangible book value per share, tangible common equity to tangible assets ratio and pretax pre-provision earnings are non-GAAP financial measures calculated using GAAP amounts. Tangible common equity is calculated by excluding the balance of goodwill and other intangible assets from the calculation of equity, net of deferred tax. Tangible assets are calculated by excluding the balance of goodwill and other intangible assets from the calculation of total assets, net of deferred tax. Tangible book value per share is calculated by dividing tangible common equity by the number of shares outstanding less true treasury stock. Pretax pre-provision earnings is calculated by adding net interest income to noninterest income and subtracting noninterest expense. Because not all companies use the same calculation of tangible common equity and tangible assets, this presentation may not be comparable to other similarly titled measures calculated by other companies. However, management considers these measures of the company’s value including only earning assets as meaningful to an understanding of the company’s financial information.
A reconciliation of these non-GAAP financial measures is provided below (dollars in thousands, except per share data).
Three Months Ended | |||||||||||
March 31, 2022 | December 31, 2021 | March 31, 2021 | |||||||||
Total Equity | 609,102 | 704,906 | 651,668 | ||||||||
Less: Goodwill | (4,970 | ) | (4,970 | ) | (4,970 | ) | |||||
Plus: Deferred tax assets related to goodwill | 1,167 | 1,176 | 1,176 | ||||||||
Tangible Common Equity | 605,299 | 701,112 | 647,874 | ||||||||
Assets | $ | 6,572,259 | $ | 6,557,323 | $ | 6,016,642 | |||||
Less: Goodwill | (4,970 | ) | (4,970 | ) | (4,970 | ) | |||||
Plus: Deferred tax assets related to goodwill | 1,167 | 1,176 | 1,176 | ||||||||
Tangible Assets | 6,568,456 | 6,553,529 | 6,012,848 | ||||||||
Ending common shares issued | 25,527,896 | 25,488,508 | 25,473,437 | ||||||||
Tangible Book Value Per Common Share | $ | 23.71 | $ | 27.50 | $ | 25.43 | |||||
Tangible Common Equity/Tangible Assets | 9.22 | % | 10.70 | % | 10.77 | % | |||||
Net Interest Income | $ | 44,880 | $ | 45,007 | $ | 43,679 | |||||
Plus: Noninterest income | 10,687 | 9,709 | 12,557 | ||||||||
Minus: Noninterest expense | (26,969 | ) | (24,926 | ) | (26,746 | ) | |||||
Pretax Pre-Provision Earnings | $ | 28,598 | $ | 29,790 | $ | 29,490 |
Net interest margin on a fully-tax equivalent basis, net of PPP loan impact, is a non-GAAP measure that management believes is important because it provides for better comparability to prior periods. Because PPP loans have a low fixed interest rate of
A reconciliation of this non-GAAP financial measure is provided below (dollars in thousands).
Impact of Paycheck Protection Program on Net Interest Margin FTE
Three Months Ended | |||||||||||
March 31, 2022 | December 31, 2021 | March 31, 2021 | |||||||||
Total Average Earnings Assets | 6,392,075 | $ | 6,148,085 | $ | 5,638,202 | ||||||
Less: Average Balance of PPP Loans | (17,555 | ) | (62,910 | ) | (402,730 | ) | |||||
Total Adjusted Earning Assets | 6,374,520 | 6,085,175 | 5,235,472 | ||||||||
Total Interest Income FTE | $ | 49,302 | $ | 49,455 | $ | 48,664 | |||||
Less: PPP Loan Income | (505 | ) | (2,182 | ) | (5,166 | ) | |||||
Total Adjusted Interest Income FTE | 48,797 | 47,273 | 43,498 | ||||||||
Adjusted Earning Asset Yield, net of PPP Impact | 3.10 | % | 3.08 | % | 3.37 | % | |||||
Total Average Interest Bearing Liabilities | $ | 3,957,547 | $ | 3,859,971 | $ | 3,617,491 | |||||
Less: Average Balance of PPP Loans | (17,555 | ) | (62,910 | ) | (402,730 | ) | |||||
Total Adjusted Interest Bearing Liabilities | 3,939,992 | 3,797,061 | 3,214,761 | ||||||||
Total Interest Expense FTE | $ | 3,154 | $ | 3,315 | $ | 4,298 | |||||
Less: PPP Cost of Funds | (11 | ) | (40 | ) | (248 | ) | |||||
Total Adjusted Interest Expense FTE | 3,143 | 3,275 | 4,050 | ||||||||
Adjusted Cost of Funds, net of PPP Impact | 0.20 | % | 0.21 | % | 0.31 | % | |||||
Net Interest Margin FTE, net of PPP Impact | 2.90 | % | 2.87 | % | 3.06 | % |
Contact
Lisa M. O’Neill
Executive Vice President and Chief Financial Officer
(574) 267-9125
lisa.oneill@lakecitybank.com
FAQ
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