Lakeland Financial Reports Record Quarterly Performance; Year-to-Date Record Net Income Improves by 9% to $77.8 million
Lakeland Financial Corporation (LKFN) reported a record third-quarter net income of $28.5 million, up 18% from $24.1 million a year earlier. Diluted earnings per share rose 18% to $1.11, marking the best quarterly performance in the company's history. Year-to-date, net income reached $77.8 million, a 9% increase compared to $71.5 million in 2021. Key highlights include a 15% rise in net interest income and 8% core loan growth. Watch list loans fell to a historic low of 3.64% of total loans. A dividend increase of 18% to $0.40 per share was also announced.
- Record Q3 net income of $28.5 million, 18% increase YoY.
- Diluted EPS increased 18% to $1.11, highest in company history.
- Net interest income up 15% to $51.7 million.
- Core loan growth of $340.7 million, or 8% compared to last year.
- Watch list loans decreased to 3.64%, a historical low.
- Dividend increased by 18% to $0.40 per share.
- Noninterest income decreased by $950,000, or 9%, year-over-year.
- Net charge-offs of $284,000 reported, compared to recoveries of $35,000 last year.
WARSAW, Ind., Oct. 25, 2022 (GLOBE NEWSWIRE) -- Lakeland Financial Corporation (Nasdaq Global Select/LKFN), parent company of Lake City Bank, today reported record third quarter net income of
The company further reported record net income of
David M. Findlay, President and Chief Executive Officer stated, “As we continue to celebrate our 150th anniversary, the Lake City Bank team has delivered exceptional financial performance. Throughout the year, we have taken the time to reflect upon our success over the last 150 years and strengthen our commitment to the future. We are an organization that is focused on the culture and operating discipline that got us this far, while at the same time ensuring that it evolves for the future.”
Findlay added, “As we move through 2022, we are very proud of our performance through the last nine months. We are a community bank committed to the economic growth and vitality of our Indiana markets, and we are pleased that we are experiencing strong organic loan growth. That is the best indicator of our support of our commercial and retail clients, and our teams are doing a great job delivering on that commitment.”
Financial Performance – Third Quarter 2022
Third Quarter 2022 versus Third Quarter 2021 highlights:
- Diluted earnings per share increase of
$0.17 per share, or18% , from$0.94 t o$1.11 - Return on average equity of
19.39% , compared to13.90% - Return on average assets of
1.80% , compared to1.56% - Core loan growth, which excludes PPP loans, of
$340.7 million , or8% - Core deposit growth of
$250.5 million , or5% - Net interest income increase of
$6.8 million , or15% - Net interest margin excluding PPP loans expanded by 62 basis points to
3.57% , compared to2.95% - Revenue growth of
$5.8 million , or10% - Provision expense of
$0 compared to$1.3 million - Noninterest expense increase of
$1.9 million , or7% - Dividend per share increase of
18% , or$0.06 per share, to$0.40 from$0.34 - Watch list loans as a percentage of total loans excluding PPP loans decreased to a historical low of
3.64% from6.23% - Total risk-based capital ratio of
15.29% , compared to15.44% - Tangible capital ratio of
8.20% compared to10.92% - Tangible capital ratio excluding AOCI of
11.22% compared to10.75%
Third Quarter 2022 versus Second Quarter 2022 highlights:
- Diluted earnings per share increase of
$0.11 per share, or11% , from$1.00 t o$1.11 - Return on average equity of
19.39% , compared to17.65% - Return on average assets of
1.80% , compared to1.59% - Core loan growth, which excludes PPP loans, of
$68.8 million , or2% - Core deposit growth of
$42.5 million , or1% - Net interest income increase of
$3.8 million , or8% - Net interest margin excluding PPP loans expanded by 31 basis points to
3.57% , compared to3.26% - Revenue growth of
$3.5 million , or6% - Provision expense of
$0 for both periods - Noninterest expense was unchanged at
$27.9 million for both periods - Watch list loans as a percentage of total loans excluding PPP loans decrease to a historical low of
3.64% from4.35% - Total risk-based capital of
15.29% , compared to15.15% - Tangible capital ratio of
8.20% compared to8.92% - Tangible capital ratio excluding AOCI of
11.22% compared to11.08%
Return on average total equity for the third quarter of 2022 was
The company’s tangible common equity to tangible assets ratio, which is a non-GAAP financial measure, was
As announced on October 11, 2022, the board of directors approved a cash dividend for the third quarter of
“Our record profitability has contributed to healthy increases in regulatory capital and provides support for the growth in our dividend to shareholders. Our fortress balance sheet and strong capital foundation provide capacity for continued organic loan growth and balance sheet expansion over the long term,” Findlay added.
Average total loans, excluding PPP loans, were
Average total loans were
Total loans, excluding PPP loans, increased by
Commercial loan originations for the quarter included
Findlay commented, “Both our commercial and consumer loan portfolios experienced good growth in the quarter. While commercial line usage decreased slightly, we have experienced a healthy expansion in overall line availability, driven by traditional working capital demand in our commercial and industrial client base and continued development activity in the commercial real estate markets.”
Average total deposits were
Core deposits, which exclude brokered deposits, increased by
Findlay stated, “Excess liquidity inflows stabilized during the quarter, and we have started to see slowing of deposit growth during 2022. Importantly, demand deposits continue to represent
Total investment securities were
The company’s net interest margin increased 44 basis points to
Total PPP loan income recognized for the third quarter of 2022 was
Linked quarter net interest margin was 31 basis points higher at
“Our asset sensitive balance sheet has contributed to the net interest margin expansion during 2022. Variable rate loans represent
Net interest income increased by
The company recorded no provision for credit losses in the third quarter of 2022, compared to provision expense of
Net charge offs in the third quarter of 2022 were
Nonperforming assets decreased
Findlay commented, “Every asset quality metric continued to improve during the third quarter. Watch list and nonperforming loans are at historic lows that we believe are reflective of the general strength of our borrowers’ balance sheets and operating performance. While we have seen signs of economic slowdown in some sectors, they are not apparent in these asset quality metrics. We will continue to monitor economic conditions in our markets and approach the future with the same conservative discipline that we have always shown. Our borrowers have demonstrated resilience in weathering the continued challenges of labor availability, persistent inflation, and supply chain constraints.”
The company’s noninterest income decreased
Other income for the third quarter of 2022 declined by
Noninterest income for the third quarter of 2022 decreased by
Noninterest income decreased by
Market value declines impacted the overall decrease in noninterest income. Bank owned life insurance income for the nine months ended September 30, 2022, decreased by
The company’s noninterest expense increased by
On a linked quarter basis, noninterest expense decreased by
Noninterest expense increased by
The company’s efficiency ratio was
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, adjusted tangible common equity, adjusted tangible assets, tangible book value per share, tangible common equity to tangible assets ratio, adjusted tangible common equity to adjusted tangible assets, and pretax pre-provision earnings and credit loss reserve to total loans excluding PPP loans. 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
THIRD QUARTER 2022 FINANCIAL HIGHLIGHTS
Three Months Ended | Nine Months Ended | ||||||||||||||||||
(Unaudited – Dollars in thousands, except per share data) | September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||||
END OF PERIOD BALANCES | 2022 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||
Assets | $ | 6,288,406 | $ | 6,265,087 | $ | 6,222,916 | $ | 6,288,406 | $ | 6,222,916 | |||||||||
Deposits | 5,664,133 | 5,621,584 | 5,414,638 | 5,664,133 | 5,414,638 | ||||||||||||||
Brokered Deposits | 10,017 | 10,008 | 11,012 | 10,017 | 11,012 | ||||||||||||||
Core Deposits (1) | 5,654,116 | 5,611,576 | 5,403,626 | 5,654,116 | 5,403,626 | ||||||||||||||
Loans | 4,489,835 | 4,424,699 | 4,239,453 | 4,489,835 | 4,239,453 | ||||||||||||||
PPP Loans | 1,603 | 5,219 | 91,897 | 1,603 | 91,897 | ||||||||||||||
Allowance for Credit Losses | 67,239 | 67,523 | 73,048 | 67,239 | 73,048 | ||||||||||||||
Total Equity | 519,220 | 562,063 | 683,202 | 519,220 | 683,202 | ||||||||||||||
Goodwill net of deferred tax assets | 3,803 | 3,803 | 3,794 | 3,803 | 3,794 | ||||||||||||||
Tangible Common Equity (2) | 515,417 | 558,260 | 679,408 | 515,417 | 679,408 | ||||||||||||||
AVERAGE BALANCES | |||||||||||||||||||
Total Assets | $ | 6,298,358 | $ | 6,460,888 | $ | 6,153,334 | $ | 6,469,102 | $ | 6,071,682 | |||||||||
Earning Assets | 5,991,630 | 6,157,051 | 5,909,834 | 6,178,787 | 5,825,275 | ||||||||||||||
Investments | 1,429,186 | 1,476,144 | 1,201,657 | 1,472,807 | 977,955 | ||||||||||||||
Loans | 4,415,944 | 4,425,713 | 4,354,104 | 4,381,284 | 4,468,891 | ||||||||||||||
PPP Loans | 3,232 | 9,665 | 142,917 | 10,098 | 296,938 | ||||||||||||||
Total Deposits | 5,638,469 | 5,752,519 | 5,344,272 | 5,745,771 | 5,280,361 | ||||||||||||||
Interest Bearing Deposits | 3,821,699 | 3,927,191 | 3,662,707 | 3,876,913 | 3,652,839 | ||||||||||||||
Interest Bearing Liabilities | 3,821,699 | 3,981,587 | 3,737,707 | 3,919,779 | 3,728,339 | ||||||||||||||
Total Equity | 583,679 | 583,324 | 688,252 | 616,202 | 668,652 | ||||||||||||||
INCOME STATEMENT DATA | |||||||||||||||||||
Net Interest Income | $ | 52,492 | $ | 48,678 | $ | 45,741 | $ | 146,050 | $ | 133,081 | |||||||||
Net Interest Income-Fully Tax Equivalent | 53,945 | 50,079 | 46,717 | 150,171 | 135,535 | ||||||||||||||
Provision for Credit Losses | 0 | 0 | 1,300 | 417 | 1,077 | ||||||||||||||
Noninterest Income | 10,164 | 10,492 | 11,114 | 31,343 | 35,011 | ||||||||||||||
Noninterest Expense | 27,894 | 27,913 | 25,967 | 82,776 | 79,361 | ||||||||||||||
Net Income | 28,525 | 25,673 | 24,119 | 77,840 | 71,450 | ||||||||||||||
Pretax Pre-Provision Earnings (2) | 34,762 | 31,257 | 30,888 | 94,617 | 88,731 | ||||||||||||||
PER SHARE DATA | |||||||||||||||||||
Basic Net Income Per Common Share | $ | 1.12 | $ | 1.00 | $ | 0.95 | $ | 3.05 | $ | 2.81 | |||||||||
Diluted Net Income Per Common Share | 1.11 | 1.00 | 0.94 | 3.03 | 2.79 | ||||||||||||||
Cash Dividends Declared Per Common Share | 0.40 | 0.40 | 0.34 | 1.20 | 1.02 | ||||||||||||||
Dividend Payout | 36.04 | % | 40.00 | % | 36.17 | % | 39.60 | % | 36.56 | % | |||||||||
Book Value Per Common Share (equity per share issued) | 20.33 | 22.01 | 26.80 | 20.33 | 26.80 | ||||||||||||||
Tangible Book Value Per Common Share (2) | 20.18 | 21.87 | 26.66 | 20.18 | 26.66 | ||||||||||||||
Market Value – High | 81.27 | 79.14 | 73.04 | 85.71 | 77.05 | ||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||
September 30, 2022 | June 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | |||||||||||||||
Market Value – Low | 64.05 | 64.84 | 56.06 | 64.05 | 53.03 | ||||||||||||||
Basic Weighted Average Common Shares Outstanding | 25,533,832 | 25,527,896 | 25,479,654 | 25,525,734 | 25,472,185 | ||||||||||||||
Diluted Weighted Average Common Shares Outstanding | 25,734,613 | 25,697,577 | 25,635,288 | 25,710,088 | 25,608,655 | ||||||||||||||
KEY RATIOS | |||||||||||||||||||
Return on Average Assets | 1.80 | % | 1.59 | % | 1.56 | % | 1.61 | % | 1.57 | % | |||||||||
Return on Average Total Equity | 19.39 | 17.65 | 13.90 | 16.89 | 14.29 | ||||||||||||||
Average Equity to Average Assets | 9.27 | 9.03 | 11.19 | 9.53 | 11.01 | ||||||||||||||
Net Interest Margin | 3.57 | 3.26 | 3.13 | 3.25 | 3.11 | ||||||||||||||
Net Interest Margin, Excluding PPP Loans (2) | 3.57 | 3.26 | 2.95 | 3.24 | 2.98 | ||||||||||||||
Efficiency (Noninterest Expense / Net Interest Income plus Noninterest Income) | 44.52 | 47.17 | 45.67 | 46.66 | 47.21 | ||||||||||||||
Tier 1 Leverage (3) | 11.40 | 10.83 | 10.91 | 11.40 | 10.91 | ||||||||||||||
Tier 1 Risk-Based Capital (3) | 14.04 | 13.90 | 14.18 | 14.04 | 14.18 | ||||||||||||||
Common Equity Tier 1 (CET1) (3) | 14.04 | 13.90 | 14.18 | 14.04 | 14.18 | ||||||||||||||
Total Capital (3) | 15.29 | 15.15 | 15.44 | 15.29 | 15.44 | ||||||||||||||
Tangible Capital (2) | 8.20 | 8.92 | 10.92 | 8.20 | 10.92 | ||||||||||||||
Adjusted Tangible Capital (2) | 11.22 | 11.08 | 10.75 | 11.22 | 10.75 | ||||||||||||||
ASSET QUALITY | |||||||||||||||||||
Loans Past Due 30 - 89 Days | $ | 921 | $ | 784 | $ | 1,245 | $ | 921 | $ | 1,245 | |||||||||
Loans Past Due 90 Days or More | 25 | 105 | 18 | 25 | 18 | ||||||||||||||
Non-accrual Loans | 9,892 | 12,494 | 30,978 | 9,892 | 30,978 | ||||||||||||||
Nonperforming Loans (includes nonperforming TDRs) (4) | 9,917 | 12,599 | 30,996 | 9,917 | 30,996 | ||||||||||||||
Other Real Estate Owned | 196 | 196 | 316 | 196 | 316 | ||||||||||||||
Other Nonperforming Assets | 0 | 0 | 20 | 0 | 20 | ||||||||||||||
Total Nonperforming Assets | 10,113 | 12,795 | 31,332 | 10,113 | 31,332 | ||||||||||||||
Performing Troubled Debt Restructurings (4) | 0 | 0 | 4,973 | 0 | 4,973 | ||||||||||||||
Nonperforming Troubled Debt Restructurings (included in nonperforming loans) (4) | 0 | 0 | 6,093 | 0 | 6,093 | ||||||||||||||
Total Troubled Debt Restructurings (4) | 0 | 0 | 11,066 | 0 | 11,066 | ||||||||||||||
Individually Analyzed Loans | 17,313 | 19,986 | 41,148 | 17,313 | 41,148 | ||||||||||||||
Non-Individually Analyzed Watch List Loans | 145,839 | 172,084 | 217,386 | 145,839 | 217,386 | ||||||||||||||
Total Individually Analyzed and Watch List Loans | 163,152 | 192,070 | 258,534 | 163,152 | 258,534 | ||||||||||||||
Gross Charge Offs | 373 | 98 | 90 | 1,211 | 593 | ||||||||||||||
Recoveries | 89 | 95 | 125 | 260 | 2,106 | ||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||
September 30, 2022 | June 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | |||||||||||||||
Net Charge Offs/(Recoveries) | 284 | 3 | (35 | ) | 951 | (1,513 | ) | ||||||||||||
Net Charge Offs/(Recoveries) to Average Loans | 0.03 | % | 0.00 | % | 0.00 | % | 0.03 | % | (0.05 | %) | |||||||||
Credit Loss Reserve to Loans | 1.50 | % | 1.53 | % | 1.72 | % | 1.50 | % | 1.72 | % | |||||||||
Credit Loss Reserve to Loans, Excluding PPP Loans (2) | 1.50 | % | 1.53 | % | 1.76 | % | 1.50 | % | 1.76 | % | |||||||||
Credit Loss Reserve to Nonperforming Loans | 678.01 | % | 535.97 | % | 235.67 | % | 678.01 | % | 235.67 | % | |||||||||
Credit Loss Reserve to Nonperforming Loans and Performing TDRs (4) | 678.01 | % | 535.97 | % | 203.08 | % | 678.01 | % | 203.08 | % | |||||||||
Nonperforming Loans to Loans | 0.22 | % | 0.28 | % | 0.73 | % | 0.22 | % | 0.73 | % | |||||||||
Nonperforming Assets to Assets | 0.16 | % | 0.20 | % | 0.50 | % | 0.16 | % | 0.50 | % | |||||||||
Total Individually Analyzed and Watch List Loans to Total Loans | 3.63 | % | 4.34 | % | 6.10 | % | 3.63 | % | 6.10 | % | |||||||||
Total Individually Analyzed and Watch List Loans to Total Loans, Excluding PPP Loans (2) | 3.64 | % | 4.35 | % | 6.23 | % | 3.64 | % | 6.23 | % | |||||||||
OTHER DATA | |||||||||||||||||||
Full Time Equivalent Employees | 600 | 606 | 592 | 600 | 592 | ||||||||||||||
Offices | 52 | 52 | 51 | 52 | 51 |
__________________________________________________ | |
(1) | Core deposits equals deposits less brokered deposits. |
(2) | Non-GAAP financial measure - see "Reconciliation of Non-GAAP Financial Measures". |
(3) | Capital ratios for September 30, 2022 are preliminary until the Call Report is filed. |
(4) | On April 1, 2022, the company adopted certain aspects of ASU 2022-02, whereby the company no longer recognizes or accounts for TDRs. Adoption of this standard was retrospective to January 1, 2022. |
CONSOLIDATED BALANCE SHEETS (in thousands, except share data) | |||||||
| September 30, 2022 | December 31, 2021 | |||||
| (Unaudited) | | |||||
ASSETS | |||||||
Cash and due from banks | $ | 76,498 | $ | 51,830 | |||
Short-term investments | 128,304 | 631,410 | |||||
Total cash and cash equivalents | 204,802 | 683,240 | |||||
| |||||||
Securities available-for-sale, at fair value | 1,192,186 | 1,398,558 | |||||
Securities held-to-maturity, at amortized cost (fair value of | 127,820 | 0 | |||||
Real estate mortgage loans held-for-sale | 1,097 | 7,470 | |||||
Loans, net of allowance for credit losses of | 4,422,596 | 4,220,068 | |||||
Land, premises and equipment, net | 58,486 | 59,309 | |||||
Bank owned life insurance | 97,702 | 97,652 | |||||
Federal Reserve and Federal Home Loan Bank stock | 12,840 | 13,772 | |||||
Accrued interest receivable | 22,822 | 17,674 | |||||
Goodwill | 4,970 | 4,970 | |||||
Other assets | 143,085 | 54,610 | |||||
Total assets | $ | 6,288,406 | $ | 6,557,323 | |||
| |||||||
| |||||||
LIABILITIES | |||||||
Noninterest bearing deposits | $ | 1,832,328 | $ | 1,895,481 | |||
Interest bearing deposits | 3,831,805 | 3,839,926 | |||||
Total deposits | 5,664,133 | 5,735,407 | |||||
| |||||||
Borrowings - Federal Home Loan Bank advances | 0 | 75,000 | |||||
Accrued interest payable | 2,200 | 2,619 | |||||
Other liabilities | 102,853 | 39,391 | |||||
Total liabilities | 5,769,186 | 5,852,417 | |||||
| |||||||
STOCKHOLDERS’ EQUITY | |||||||
Common stock: 90,000,000 shares authorized, no par value | |||||||
25,825,127 shares issued and 25,350,134 outstanding as of September 30, 2022 | |||||||
25,777,609 shares issued and 25,300,793 outstanding as of December 31, 2021 | 125,832 | 120,615 | |||||
Retained earnings | 630,337 | 583,134 | |||||
Accumulated other comprehensive income (loss) | (221,729 | ) | 16,093 | ||||
Treasury stock at cost (474,993 shares as of September 30, 2022, 476,816 shares as of December 31, 2021) | (15,309 | ) | (15,025 | ) | |||
Total stockholders’ equity | 519,131 | 704,817 | |||||
Noncontrolling interest | 89 | 89 | |||||
Total equity | 519,220 | 704,906 | |||||
Total liabilities and equity | $ | 6,288,406 | $ | 6,557,323 |
CONSOLIDATED STATEMENTS OF INCOME (unaudited - in thousands, except share and per share data) | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||
NET INTEREST INCOME | |||||||||||||||
Interest and fees on loans | |||||||||||||||
Taxable | $ | 52,707 | $ | 43,025 | $ | 136,580 | $ | 128,828 | |||||||
Tax exempt | 462 | 119 | 911 | 324 | |||||||||||
Interest and dividends on securities | | | |||||||||||||
Taxable | 3,608 | 2,470 | 10,613 | 6,482 | |||||||||||
Tax exempt | 5,009 | 3,556 | 14,609 | 8,915 | |||||||||||
Other interest income | 772 | 125 | 1,501 | 348 | |||||||||||
Total interest income | 62,558 | 49,295 | 164,214 | 144,897 | |||||||||||
| | | | | |||||||||||
Interest on deposits | 10,066 | 3,479 | 18,037 | 11,587 | |||||||||||
Interest on borrowings | | | |||||||||||||
Short-term | 0 | 0 | 0 | 7 | |||||||||||
Long-term | 0 | 75 | 127 | 222 | |||||||||||
Total interest expense | 10,066 | 3,554 | 18,164 | 11,816 | |||||||||||
| | | | | |||||||||||
NET INTEREST INCOME | 52,492 | 45,741 | 146,050 | 133,081 | |||||||||||
| | | | | |||||||||||
Provision for credit losses | 0 | 1,300 | 417 | 1,077 | |||||||||||
| | | | | |||||||||||
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | 52,492 | 44,441 | 145,633 | 132,004 | |||||||||||
| | | | | |||||||||||
NONINTEREST INCOME | |||||||||||||||
Wealth advisory fees | 2,059 | 2,177 | 6,550 | 6,433 | |||||||||||
Investment brokerage fees | 651 | 521 | 1,711 | 1,560 | |||||||||||
Service charges on deposit accounts | 2,990 | 2,756 | 8,681 | 7,768 | |||||||||||
Loan and service fees | 3,047 | 3,005 | 9,131 | 8,823 | |||||||||||
Merchant card fee income | 941 | 838 | 2,660 | 2,226 | |||||||||||
Bank owned life insurance income (loss) | 54 | 640 | (212 | ) | 2,101 | ||||||||||
Interest rate swap fee income | 88 | 180 | 492 | 934 | |||||||||||
Mortgage banking income (loss) | (89 | ) | (32 | ) | 771 | 1,756 | |||||||||
Net securities gains | 0 | 0 | 0 | 797 | |||||||||||
Other income | 423 | 1,029 | 1,559 | 2,613 | |||||||||||
Total noninterest income | 10,164 | 11,114 | 31,343 | 35,011 | |||||||||||
| | | | | |||||||||||
NONINTEREST EXPENSE | |||||||||||||||
Salaries and employee benefits | 14,650 | 14,230 | 43,840 | 44,377 | |||||||||||
Net occupancy expense | 1,476 | 1,413 | 4,793 | 4,343 | |||||||||||
Equipment costs | 1,380 | 1,371 | 4,250 | 4,134 | |||||||||||
Data processing fees and supplies | 3,226 | 3,169 | 9,510 | 9,692 | |||||||||||
Corporate and business development | 1,426 | 1,000 | 4,078 | 3,208 | |||||||||||
FDIC insurance and other regulatory fees | 458 | 748 | 1,516 | 1,707 | |||||||||||
Professional fees | 1,554 | 1,342 | 4,527 | 5,058 | |||||||||||
Other expense | 3,724 | 2,694 | 10,262 | 6,842 | |||||||||||
Total noninterest expense | 27,894 | 25,967 | 82,776 | 79,361 | |||||||||||
| | | | | |||||||||||
INCOME BEFORE INCOME TAX EXPENSE | 34,762 | 29,588 | 94,200 | 87,654 | |||||||||||
Income tax expense | 6,237 | 5,469 | 16,360 | 16,204 | |||||||||||
NET INCOME | $ | 28,525 | $ | 24,119 | $ | 77,840 | $ | 71,450 | |||||||
| | | | | |||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||
BASIC WEIGHTED AVERAGE COMMON SHARES | 25,533,832 | 25,479,654 | 25,525,734 | 25,472,185 | |||||||||||
| | | |||||||||||||
BASIC EARNINGS PER COMMON SHARE | $ | 1.12 | $ | 0.95 | $ | 3.05 | $ | 2.81 | |||||||
| | | |||||||||||||
DILUTED WEIGHTED AVERAGE COMMON SHARES | 25,734,613 | 25,635,288 | 25,710,088 | 25,608,655 | |||||||||||
| |||||||||||||||
DILUTED EARNINGS PER COMMON SHARE | $ | 1.11 | $ | 0.94 | $ | 3.03 | $ | 2.79 | |||||||
LAKELAND FINANCIAL CORPORATION
LOAN DETAIL
(unaudited, in thousands)
September 30, 2022 | June 30, 2022 | September 30, 2021 | ||||||||||||||||||
Commercial and industrial loans: | ||||||||||||||||||||
Working capital lines of credit loans | $ | 684,281 | 15.2 | % | $ | 726,798 | 16.4 | % | $ | 659,166 | 15.5 | % | ||||||||
Non-working capital loans | 827,014 | 18.4 | 802,994 | 18.2 | 782,618 | 18.5 | ||||||||||||||
Total commercial and industrial loans | 1,511,295 | 33.6 | 1,529,792 | 34.6 | 1,441,784 | 34.0 | ||||||||||||||
Commercial real estate and multi-family residential loans: | ||||||||||||||||||||
Construction and land development loans | 468,288 | 10.4 | 418,284 | 9.4 | 378,716 | 8.9 | ||||||||||||||
Owner occupied loans | 741,293 | 16.5 | 726,531 | 16.4 | 740,836 | 17.4 | ||||||||||||||
Nonowner occupied loans | 655,975 | 14.6 | 635,477 | 14.4 | 582,019 | 13.7 | ||||||||||||||
Multifamily loans | 191,212 | 4.3 | 173,875 | 3.9 | 252,983 | 6.0 | ||||||||||||||
Total commercial real estate and multi-family residential loans | 2,056,768 | 45.8 | 1,954,167 | 44.1 | 1,954,554 | 46.0 | ||||||||||||||
Agri-business and agricultural loans: | ||||||||||||||||||||
Loans secured by farmland | 165,328 | 3.7 | 194,248 | 4.4 | 152,099 | 3.5 | ||||||||||||||
Loans for agricultural production | 176,738 | 3.9 | 193,654 | 4.4 | 171,981 | 4.1 | ||||||||||||||
Total agri-business and agricultural loans | 342,066 | 7.6 | 387,902 | 8.8 | 324,080 | 7.6 | ||||||||||||||
Other commercial loans | 100,831 | 2.2 | 93,157 | 2.1 | 83,595 | 2.0 | ||||||||||||||
Total commercial loans | 4,010,960 | 89.2 | 3,965,018 | 89.6 | 3,804,013 | 89.6 | ||||||||||||||
Consumer 1-4 family mortgage loans: | ||||||||||||||||||||
Closed end first mortgage loans | 196,077 | 4.4 | 190,988 | 4.3 | 173,689 | 4.1 | ||||||||||||||
Open end and junior lien loans | 173,419 | 3.9 | 172,449 | 3.9 | 161,941 | 3.8 | ||||||||||||||
Residential construction and land development loans | 18,775 | 0.4 | 10,075 | 0.2 | 12,542 | 0.3 | ||||||||||||||
Total consumer 1-4 family mortgage loans | 388,271 | 8.7 | 373,512 | 8.4 | 348,172 | 8.2 | ||||||||||||||
Other consumer loans | 93,026 | 2.1 | 88,683 | 2.0 | 92,169 | 2.2 | ||||||||||||||
Total consumer loans | 481,297 | 10.8 | 462,195 | 10.4 | 440,341 | 10.4 | ||||||||||||||
Subtotal | 4,492,257 | 100.0 | % | 4,427,213 | 100.0 | % | 4,244,354 | 100.0 | % | |||||||||||
Less: Allowance for credit losses | (67,239 | ) | (67,523 | ) | (73,048 | ) | | |||||||||||||
Net deferred loan fees | (2,422 | ) | (2,514 | ) | (4,901 | ) | | |||||||||||||
Loans, net | $ | 4,422,596 | $ | 4,357,176 | $ | 4,166,405 | |
LAKELAND FINANCIAL CORPORATION
DEPOSITS AND BORROWINGS
(unaudited, in thousands)
September 30, 2022 | June 30, 2022 | September 30, 2021 | ||||||
Noninterest bearing demand deposits | $ | 1,832,328 | $ | 1,797,614 | $ | 1,762,021 | ||
Savings and transaction accounts: | ||||||||
Savings deposits | 428,718 | 430,752 | 375,993 | |||||
Interest bearing demand deposits | 2,652,783 | 2,631,304 | 2,411,722 | |||||
Time deposits: | ||||||||
Deposits of | 573,923 | 577,571 | 658,050 | |||||
Other time deposits | 176,381 | 184,343 | 206,852 | |||||
Total deposits | $ | 5,664,133 | $ | 5,621,584 | $ | 5,414,638 | ||
FHLB advances | 0 | 0 | 75,000 | |||||
Total funding sources | $ | 5,664,133 | $ | 5,621,584 | $ | 5,489,638 |
LAKELAND FINANCIAL CORPORATION
AVERAGE BALANCE SHEET AND NET INTEREST ANALYSIS
(UNAUDITED)
Three Months Ended September 30, 2022 | Three Months Ended June 30, 2022 | Three Months Ended September 30, 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) | $ | 4,376,724 | $ | 52,707 | 4.78 | % | $ | 4,396,333 | $ | 44,138 | 4.03 | % | $ | 4,339,792 | $ | 43,025 | 3.93 | % | ||||||||||||
Tax exempt (1) | 39,220 | 583 | 5.90 | 29,380 | 353 | 4.82 | 14,312 | 150 | 4.16 | |||||||||||||||||||||
Investments: (1) | ||||||||||||||||||||||||||||||
Securities | 1,429,186 | 9,949 | 2.76 | 1,476,144 | 10,049 | 2.73 | 1,201,657 | 6,971 | 2.30 | |||||||||||||||||||||
Short-term investments | 2,307 | 9 | 1.55 | 2,301 | 2 | 0.35 | 2,304 | 0 | 0.00 | |||||||||||||||||||||
Interest bearing deposits | 144,193 | 763 | 2.10 | 252,893 | 481 | 0.76 | 351,769 | 125 | 0.14 | |||||||||||||||||||||
Total earning assets | $ | 5,991,630 | $ | 64,011 | 4.24 | % | $ | 6,157,051 | $ | 55,023 | 3.58 | % | $ | 5,909,834 | $ | 50,271 | 3.37 | % | ||||||||||||
Less: Allowance for credit losses | (67,481 | ) | (67,527 | ) | (72,157 | ) | ||||||||||||||||||||||||
Nonearning Assets | ||||||||||||||||||||||||||||||
Cash and due from banks | 70,672 | 74,158 | 67,715 | |||||||||||||||||||||||||||
Premises and equipment | 58,796 | 58,978 | 59,824 | |||||||||||||||||||||||||||
Other nonearning assets | 244,741 | 238,228 | 188,118 | |||||||||||||||||||||||||||
Total assets | $ | 6,298,358 | $ | 6,460,888 | $ | 6,153,334 | ||||||||||||||||||||||||
Interest Bearing Liabilities | ||||||||||||||||||||||||||||||
Savings deposits | $ | 430,428 | $ | 85 | 0.08 | % | $ | 425,102 | $ | 81 | 0.08 | % | $ | 369,191 | $ | 71 | 0.08 | % | ||||||||||||
Interest bearing checking accounts | 2,623,747 | 8,809 | 1.33 | 2,710,674 | 3,784 | 0.56 | 2,390,462 | 1,712 | 0.28 | |||||||||||||||||||||
Time deposits: | ||||||||||||||||||||||||||||||
In denominations under | 180,774 | 298 | 0.65 | 189,538 | 307 | 0.65 | 211,911 | 457 | 0.86 | |||||||||||||||||||||
In denominations over | 586,750 | 874 | 0.59 | 601,877 | 718 | 0.48 | 691,143 | 1,239 | 0.71 | |||||||||||||||||||||
Miscellaneous short-term borrowings | 0 | 0 | 0.00 | 0 | 0 | 0.00 | 0 | 0 | 0.00 | |||||||||||||||||||||
Long-term borrowings | 0 | 0 | 0.00 | 54,396 | 54 | 0.40 | 75,000 | 75 | 0.40 | |||||||||||||||||||||
Total interest bearing liabilities | $ | 3,821,699 | $ | 10,066 | 1.04 | % | $ | 3,981,587 | $ | 4,944 | 0.50 | % | $ | 3,737,707 | $ | 3,554 | 0.38 | % | ||||||||||||
Noninterest Bearing Liabilities | ||||||||||||||||||||||||||||||
Demand deposits | 1,816,770 | 1,825,327 | 1,681,565 | |||||||||||||||||||||||||||
Other liabilities | 76,210 | 70,650 | 45,810 | |||||||||||||||||||||||||||
Stockholders' Equity | 583,679 | 583,324 | 688,252 | |||||||||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 6,298,358 | $ | 6,460,888 | $ | 6,153,334 | ||||||||||||||||||||||||
Interest Margin Recap | ||||||||||||||||||||||||||||||
Interest income/average earning assets | 64,011 | 4.24 | % | 55,023 | 3.58 | % | 50,271 | 3.37 | % | |||||||||||||||||||||
Interest expense/average earning assets | 10,066 | 0.67 | 4,944 | 0.32 | 3,554 | 0.24 | ||||||||||||||||||||||||
Net interest income and margin | $ | 53,945 | 3.57 | % | $ | 50,079 | 3.26 | % | $ | 46,717 | 3.13 | % |
(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).
September 30, 2022 | June 30, 2022 | September 30, 2021 | |||||||||
Total Loans | $ | 4,489,835 | $ | 4,424,699 | $ | 4,239,453 | |||||
Less: PPP Loans | 1,603 | 5,219 | 91,897 | ||||||||
Total Loans, Excluding PPP Loans | 4,488,232 | 4,419,480 | 4,147,556 | ||||||||
Allowance for Credit Losses | $ | 67,239 | $ | 67,523 | $ | 73,048 | |||||
Credit Loss Reserve to Total Loans | 1.50 | % | 1.53 | % | 1.72 | % | |||||
Credit Loss Reserve to Total Loans, Excluding PPP Loans | 1.50 | % | 1.53 | % | 1.76 | % | |||||
Total Individually Analyzed and Watch List Loans | $ | 163,152 | $ | 192,070 | $ | 258,534 | |||||
Total Individually Analyzed and Watch List Loans to Total Loans | 3.63 | % | 4.34 | % | 6.10 | % | |||||
Total Individually Analyzed and Watch List Loans to Total Loans, Excluding PPP Loans | 3.64 | % | 4.35 | % | 6.23 | % |
Tangible common equity, tangible assets, tangible book value per share, tangible common equity to tangible assets ratio, adjusted tangible common equity to adjusted 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. Adjusted tangible assets and adjusted tangible common equity remove the fair market value adjustment impact of the available-for-sale investment securities portfolio. 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 | Nine Months Ended | ||||||||||||||||||
September 30, 2022 | June 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | |||||||||||||||
Total Equity | 519,220 | $ | 562,063 | $ | 683,202 | $ | 519,220 | $ | 683,202 | ||||||||||
Less: Goodwill | (4,970 | ) | (4,970 | ) | (4,970 | ) | (4,970 | ) | (4,970 | ) | |||||||||
Plus: DTA related to goodwill | 1,167 | 1,167 | 1,176 | 1,167 | 1,176 | ||||||||||||||
Tangible Common Equity | 515,417 | 558,260 | 679,408 | 515,417 | 679,408 | ||||||||||||||
AOCI Market Value Adjustment | 220,847 | 157,625 | (12,234 | ) | 220,847 | (12,234 | ) | ||||||||||||
Adjusted Tangible Common Equity | 736,264 | 715,885 | 667,174 | 736,264 | 667,174 | ||||||||||||||
Assets | $ | 6,288,406 | $ | 6,265,087 | $ | 6,222,916 | $ | 6,288,406 | $ | 6,222,916 | |||||||||
Less: Goodwill | (4,970 | ) | (4,970 | ) | (4,970 | ) | (4,970 | ) | (4,970 | ) | |||||||||
Plus: DTA related to goodwill | 1,167 | 1,167 | 1,176 | 1,167 | 1,176 | ||||||||||||||
Tangible Assets | 6,284,603 | 6,261,284 | 6,219,122 | 6,284,603 | 6,219,122 | ||||||||||||||
Market Value Adjustment | 279,553 | 199,525 | (15,486 | ) | 279,553 | (15,486 | ) | ||||||||||||
Adjusted Tangible Assets | 6,564,156 | 6,460,809 | 6,203,636 | 6,564,156 | 6,203,636 | ||||||||||||||
Ending Common Shares Issued | 25,536,026 | 25,527,896 | 25,486,032 | 25,536,026 | 25,486,032 | ||||||||||||||
Tangible Book Value Per Common Share | $ | 20.18 | $ | 21.87 | $ | 26.66 | $ | 20.18 | $ | 26.66 | |||||||||
Tangible Common Equity/Tangible Assets | 8.20 | % | 8.92 | % | 10.92 | % | 8.20 | % | 10.92 | % | |||||||||
Adjusted Tangible Common Equity/Adjusted Tangible Assets | 11.22 | % | 11.08 | % | 10.75 | % | 11.22 | % | 10.75 | % | |||||||||
Net Interest Income | $ | 52,492 | $ | 48,678 | $ | 45,741 | $ | 146,050 | $ | 133,081 | |||||||||
Plus: Noninterest income | 10,164 | 10,492 | 11,114 | 31,343 | 35,011 | ||||||||||||||
Minus: Noninterest expense | (27,894 | ) | (27,913 | ) | (25,967 | ) | (82,776 | ) | (79,361 | ) | |||||||||
Pretax Pre-Provision Earnings | $ | 34,762 | $ | 31,257 | $ | 30,888 | $ | 94,617 | $ | 88,731 |
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 | Nine Months Ended | ||||||||||||||||||
September 30, 2022 | June 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | |||||||||||||||
Total Average Earnings Assets | $ | 5,991,630 | $ | 6,157,051 | $ | 5,909,834 | $ | 6,178,787 | $ | 5,825,275 | |||||||||
Less: Average Balance of PPP Loans | (3,232 | ) | (9,665 | ) | (142,917 | ) | (10,098 | ) | (296,938 | ) | |||||||||
Total Adjusted Earning Assets | 5,988,398 | 6,147,386 | 5,766,917 | 6,168,689 | 5,528,337 | ||||||||||||||
Total Interest Income FTE | $ | 64,011 | $ | 55,023 | $ | 50,271 | $ | 168,335 | $ | 147,351 | |||||||||
Less: PPP Loan Income | (58 | ) | (204 | ) | (3,946 | ) | (767 | ) | (12,764 | ) | |||||||||
Total Adjusted Interest Income FTE | 63,953 | 54,819 | 46,325 | 167,568 | 134,587 | ||||||||||||||
Adjusted Earning Asset Yield, net of PPP Impact | 4.24 | % | 3.58 | % | 3.19 | % | 3.63 | % | 3.25 | % | |||||||||
Total Average Interest Bearing Liabilities | $ | 3,821,699 | $ | 3,981,587 | $ | 3,737,707 | $ | 3,919,779 | $ | 3,728,339 | |||||||||
Less: Average Balance of PPP Loans | (3,232 | ) | (9,665 | ) | (142,917 | ) | (10,098 | ) | (296,938 | ) | |||||||||
Total Adjusted Interest Bearing Liabilities | 3,818,467 | 3,971,922 | 3,594,790 | 3,909,681 | 3,431,401 | ||||||||||||||
Total Interest Expense FTE | $ | 10,066 | $ | 4,944 | $ | 3,554 | $ | 18,164 | $ | 11,816 | |||||||||
Less: PPP Cost of Funds | (2 | ) | (6 | ) | (90 | ) | (19 | ) | (555 | ) | |||||||||
Total Adjusted Interest Expense FTE | 10,064 | 4,938 | 3,464 | 18,145 | 11,261 | ||||||||||||||
Adjusted Cost of Funds, net of PPP Impact | 0.67 | % | 0.32 | % | 0.24 | % | 0.39 | % | 0.27 | % | |||||||||
Net Interest Margin FTE, net of PPP Impact | 3.57 | % | 3.26 | % | 2.95 | % | 3.24 | % | 2.98 | % |
Contact
Lisa M. O’Neill
Executive Vice President and Chief Financial Officer
(574) 267-9125
lisa.oneill@lakecitybank.com
FAQ
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