Lakeland Financial Corporation (Nasdaq Global Select/LKFN), parent
company of Lake City Bank, today reported net income of $93.8
million for the twelve months ended December 31, 2023, versus
$103.8 million for the prior year, a decrease of 10%, or $10.1
million. Diluted earnings per share also decreased 10% to $3.65 for
the twelve months ended December 31, 2023, versus $4.04 for
the comparable period of 2022.
Core operational profitability, a non-GAAP financial measure,
for the twelve months ended December 31, 2023 was $101.6 million, a
decrease of $2.2 million, or 2%, from the prior year. Core
operational diluted earnings per common share for the twelve months
ended December 31, 2023 was $3.95, also a decrease of 2%, from the
prior year. Core operational profitability excludes $7.8 million,
or $0.30 per share, of the overall net impact of the wire fraud
loss that occurred during the second quarter of 2023.
Net income was $29.6 million for the three months ended
December 31, 2023, an increase of $3.6 million, or 14%,
compared with net income of $26.0 million for the three months
ended December 31, 2022. Diluted earnings per share of $1.16
for the fourth quarter of 2023 were also a record and increased
$0.15 per share or 15% compared to $1.01 for the fourth quarter of
2022. On a linked quarter basis, net income increased 17%, or $4.4
million, from third quarter 2023 net income of $25.3 million.
Linked quarter earnings per share improved by 18% or $0.18 per
share to $0.98 diluted earnings per share.
Net income for the fourth quarter of 2023 benefited from the
recognition of $6.3 million, or $0.18 per share, in insurance
recoveries and loss recoveries associated with the wire fraud loss
that occurred during the second quarter of 2023. Insurance
recoveries of $5.0 million and $1.3 million in loss recoveries from
a Hong Kong bank were recognized during the fourth quarter of 2023.
These recoveries exceeded what was estimated at the end of the
second quarter. Adjusting for these recoveries, the company's core
operational profitability, a non-GAAP financial measure that
excludes the impact of the wire fraud loss and other related
effects, was $25.2 million for the fourth quarter of 2023,
representing a $758,000, or 3%, decrease compared to the fourth
quarter of 2022, and a $33,000 decrease compared to the linked
third quarter of 2023. Core operational diluted earnings per common
share, a non-GAAP financial measure, were $0.98 for the fourth
quarter of 2023, a decrease of 3% compared to the fourth quarter of
2022 and equal to the linked third quarter of 2023.
“The Lake City Bank team delivered excellent balance sheet
growth in 2023 with strong loan growth accompanied by solid deposit
growth. Our expanding relationships with new and existing clients
in our growing footprint are very encouraging as we enter 2024. As
we have throughout our 152-year history, we continued to deliver on
the organic growth strategy that has been at the core of our
long-term growth and success,” stated David M. Findlay, Chairman
and Chief Executive Officer. “We are looking forward to further
growth and expansion as we continue to invest in our people, our
Fintech-driven technology platform and our growing branch network,
particularly in the Indianapolis market.”
Quarterly Financial
Performance
Fourth Quarter 2023 versus Fourth Quarter 2022 highlights:
- Return on average equity of 20.52%, compared to 19.16%
- Return on average assets of 1.80%, compared to 1.63%
- Average loans grew by $316.4 million, or 7%
- Average investments declined by $204.2 million, or 16%
- Unrealized losses from available-for-sale investment securities
decreased by $40.7 million, or 19%
- Deposit growth of $259.9 million, or 5%
- Provision expense of $300,000, compared to provision expense of
$9.0 million
- Net charge off decline of $3.2 million or 88%
- Nonperforming loan decline by $1.4 million or 8% from $17.1
million to $15.7 million
- Noninterest income increased $6.7 million, or 64%
- Equity increased by $80.9 million, or 14%
- Total risk-based capital ratio of 15.46% compared to
15.07%
- Tangible capital ratio of 9.91%, compared to 8.79%
- Tangible common equity growth of $80.9 million, or 14%
Fourth Quarter 2023 versus Third Quarter 2023 highlights:
- Return on average equity of 20.52%, compared to 16.91%
- Return on average assets of 1.80%, compared to 1.54%
- Average loans grew by $29.9 million, or 1%
- Core deposit growth of $105.5 million, or 2%
- Unrealized losses from available-for-sale investment securities
decreased by $91.8 million, or 35%
- Net interest margin expansion of 2 basis points from 3.21% to
3.23%
- Revenue growth of $6.6 million, or 11%
- Nonperforming loans declined by $595,000 from $16.3 million to
$15.7 million
- Watch list loans as a percentage of total loans declined to
3.72%, from 3.83%
- Noninterest income increased $6.4 million, or 59%
- Noninterest expense increased $348,000, or 1%
- Equity growth of $92.6 million, or 17%
- Total risk-based capital ratio of 15.46%, compared to
15.13%
- Tangible capital ratio of 9.91%, compared to 8.62%
- Tangible common equity growth of $92.6 million, or 17%
Capital Strength
The company’s total capital as a percentage of risk-weighted
assets was 15.46% at December 31, 2023, compared to 15.07% at
December 31, 2022 and 15.13% at September 30, 2023. These
capital levels are well in excess of the 10.00% regulatory
threshold required to be characterized as “well capitalized” and
reflect the company's exceptionally strong capital base.
The company’s tangible common equity to tangible assets ratio,
which is a non-GAAP financial measure, was 9.91% at
December 31, 2023, compared to 8.79% at December 31, 2022
and 8.62% at September 30, 2023. Unrealized losses from
available-for-sale investment securities were $174.6 million at
December 31, 2023, compared to $215.3 million at
December 31, 2022 and $266.4 million at September 30,
2023. When excluding the impact of accumulated other comprehensive
income (loss) on tangible common equity and tangible assets, the
company’s ratio of adjusted tangible common equity to adjusted
tangible assets, a non-GAAP financial measure, was 11.99% at
December 31, 2023, compared to 11.38% at December 31,
2022 and 11.74% at September 30, 2023.
Findlay added, “2023 highlighted the importance of capital
strength and liquidity access and we are pleased to report
continued growth in all capital ratios and available liquidity. The
strength of our balance sheet is outstanding, and we continue to
focus on maintaining our fortress balance sheet.”
As announced on January 9, 2024, the board of directors
approved a cash dividend for the fourth quarter of $0.48 per share,
payable on February 5, 2024, to shareholders of record as of
January 25, 2024. The fourth quarter dividend per share
represents a 4% increase from the $0.46 dividend per share paid for
the third quarter of 2023.
"Our dividend increase reflects our confidence in our future
growth and the bank’s overall balance sheet strength. We have a
solid foundation to continue our history of a healthy dividend for
our shareholders,” commented Kristin L. Pruitt, President.
Loan Portfolio
Average total loans for the twelve months ended
December 31, 2023 were $4.81 billion, an increase of $386.5
million, or 9%, from $4.43 billion for the twelve months ended
December 31, 2022. Average total loans were $4.88 billion in
the fourth quarter of 2023, an increase of $316.4 million, or 7%,
from $4.56 billion for the fourth quarter of 2022, and an increase
of $29.9 million, or 1%, from $4.85 billion for the third quarter
of 2023.
Total loans outstanding increased by $206.1 million, or 4%, from
$4.71 billion as of December 31, 2022, to $4.92 billion as of
December 31, 2023. On a linked quarter basis, total
outstanding loans increased by $45.6 million, or 1%, from $4.87
billion as of September 30, 2023, and were positively impacted
by growth in both the commercial and consumer segments of the loan
portfolio.
“Our strong loan growth for 2023 demonstrated continued demand
from both commercial and consumer borrowers in our Indiana
footprint. We experienced robust growth in the Indianapolis market
with an emphasis on the commercial real estate sector, primarily in
the multifamily and logistics and distribution segments,” noted
Findlay. “Our commercial and industrial borrowers continue the
conservative approach we have experienced since the pandemic with
commercial line usage holding steady at 39% versus 42% a year ago.
With average commercial demand deposit levels remaining high, we
expect line usage to remain near these low levels. Historically, we
regularly saw line usage of 50% or greater.”
Commercial loan originations for the fourth quarter included
approximately $434.0 million in loan originations, offset by
approximately $397.0 million in commercial loan pay downs. Line of
credit usage decreased to 39% at December 31, 2023, compared
to 42% at December 31, 2022, and remained unchanged from 39%
at September 30, 2023. Total available lines of credit
expanded by $222.0 million, or 8%, as compared to a year ago, and
line usage decreased by $98.0 million, or 5%, for the same period.
The company has limited exposure to commercial office space
borrowers, all of which are located in the bank's Indiana markets.
Loans totaling $71.2 million for this sector represented 1.5% of
total loans at December 31, 2023.
Diversified Deposit Base
The bank's diversified deposit base has remained stable on a
year over year basis and on a linked quarter basis.
DEPOSIT DETAIL |
(unaudited, in thousands) |
|
|
December 31,2023 |
|
September 30,2023 |
|
December 31,2022 |
Retail |
$ |
1,794,958 |
|
31.4 |
% |
|
$ |
1,761,235 |
|
31.1 |
% |
|
$ |
1,934,787 |
|
35.4 |
% |
Commercial |
|
2,227,147 |
|
38.9 |
|
|
|
2,154,853 |
|
38.1 |
|
|
|
2,085,934 |
|
38.2 |
|
Public fund |
|
1,563,015 |
|
27.3 |
|
|
|
1,563,557 |
|
27.7 |
|
|
|
1,429,872 |
|
26.1 |
|
Core deposits |
|
5,585,120 |
|
97.6 |
|
|
|
5,479,645 |
|
96.9 |
|
|
|
5,450,593 |
|
99.7 |
|
Brokered
deposits |
|
135,405 |
|
2.4 |
|
|
|
177,430 |
|
3.1 |
|
|
|
10,027 |
|
0.3 |
|
Total |
$ |
5,720,525 |
|
100.0 |
% |
|
$ |
5,657,075 |
|
100.0 |
% |
|
$ |
5,460,620 |
|
100.0 |
% |
|
Total deposits increased $259.9 million, or 5%, from $5.46
billion as of December 31, 2022 to $5.72 billion as of
December 31, 2023. The increase in total deposits was driven
by an increase in core deposits (which excludes brokered deposits)
of $134.5 million, or 2%. Total core deposits were $5.59 billion
and represent 98% of total deposits as compared to $5.45 billion
and 100%, respectively, at December 31, 2023 and 2022. Brokered
deposits were $135.4 million, or 2%, of total deposits at December
31, 2023, compared to $10.0 million, or less than 1%, of total
deposits at December 31, 2022. Brokered deposits were $177.4
million, or 3%, of total deposits at September 30, 2023.
The composition of core deposits reflects continued growth in
commercial deposits to $2.23 billion, or 39% of total deposits and
stability in public fund deposits at $1.56 billion or 27% of total
deposits. Retail deposits have contracted by $139.8 million since
December 31, 2022 and currently represent 31% of total
deposits at $1.79 billion. Net retail outflows since
December 31, 2022 reflect the continued utilization of
deposits from peak savings levels during 2021.
On a linked quarter basis, total deposits increased $63.5
million, or 1%, from $5.66 billion at September 30, 2023 to
$5.72 billion at December 31, 2023. Core deposits increased by
$105.5 million, or 2%, while brokered deposits decreased by $42.0
million, or 24%. Linked quarter expansion in core deposits resulted
from expansion in commercial deposits of $72.3 million, or 3%,
expansion in retail deposits of $33.7 million, or 2%, and were
offset by a contraction in public fund deposits, of $542,000, or
less than 1%. Demand deposits as a percent of total deposits
declined to 24% as compared to 32% at December 31, 2022 and
unchanged from 24% at September 30, 2023.
“We are pleased to report continued growth in core deposits
during 2023 and in particular during the fourth quarter with $106
million of core deposit growth with an emphasis on commercial
deposit growth. Our strong core deposit growth during the quarter
resulted in lower wholesale funding needs as compared to the third
quarter,” commented Findlay. “Both our commercial and retail
banking clients continue to retain liquidity above pre-pandemic
levels.”
Average total deposits were $5.80 billion for the fourth quarter
of 2023, an increase of $169.6 million, or 3.0%, from $5.63 billion
for the fourth quarter of 2022. On a linked quarter basis, average
total deposits increased by $230.1 million, or 4.1%, from $5.57
billion for the third quarter of 2023 to $5.80 billion for the
fourth quarter of 2023. Total average interest-bearing deposit
accounts drove the increase in linked quarter average deposit
growth, increasing $199.8 million, or 7%. Average time deposits
increased $96.2 million, or 10%. These increases were offset by
decreases in average balances for noninterest bearing checking and
savings accounts between the two quarters.
Checking accounts by deposit sector, which include demand
deposits and interest-bearing checking accounts, continue to
maintain average balances that are higher than pre-pandemic levels.
Since December 31, 2019, commercial checking account balances have
grown by $1.00 billion, or 90%, retail checking account balances
have grown by $279.0 million, or 42%, and public fund checking
account balances have grown by $475.0 million, or 57%. Importantly,
the number of checking accounts has grown since December 31, 2019
by 19% for commercial checking accounts, by 10% for retail checking
accounts and by 19% for public fund checking accounts. Overall, all
three sectors have grown in total average balance and in number of
accounts since December 31, 2019.
Checking account trends compared to December 31, 2022
demonstrate average checking account balance growth of $151.4
million, or 8%, for commercial checking account balances, offset by
a contraction of $135.9 million, or 13%, for retail checking
account balances and a contraction of $72.6 million, or 5%, for
public fund checking account balances. The number of accounts also
has grown for all three segments, with growth of 4% for commercial
accounts, 2% for retail accounts and 17% for public fund
accounts.
Uninsured deposits not covered by FDIC deposit insurance were
57% as of December 31, 2023, compared to 54% at
September 30, 2023, and 56% at December 31, 2022.
Uninsured deposits not covered by FDIC deposit insurance or the
Indiana Public Deposit Insurance Fund (which insures public fund
deposits in Indiana), were 31% of total deposits as of
December 31, 2023, compared to 28% at September 30, 2023,
and 30% as of December 31, 2022. As of December 31, 2023,
98% of deposit accounts had deposit balances less than
$250,000.
Liquidity Overview
The bank has robust liquidity resources. These resources include
secured borrowings available from the Federal Home Loan Bank, the
Federal Reserve Bank Discount Window and the Federal Reserve Bank
Term Funding Program. In addition, the bank has unsecured borrowing
capacity through long established relationships within the brokered
deposits markets, Federal Funds lines from correspondent bank
partners, and Insured Cash Sweep (ICS) one-way buy funds available
from the Intrafi network. As of December 31, 2023, the company
had access to an aggregate of $3.4 billion in liquidity
available from these sources, compared to $3.0 billion at
December 31, 2022 and $3.3 billion at September 30, 2023.
Utilization from these sources totaled $185.4 million at
December 31, 2023, compared to $307.0 million at
December 31, 2022, and $267.4 million at September 30,
2023. Core deposits have historically represented, and currently
represent, the primary funding resource of the bank.
Investment Portfolio Overview
Total investment securities were $1.18 billion at
December 31, 2023, reflecting a decrease of $132.1 million, or
10%, as compared to $1.31 billion at December 31, 2022. On a
linked quarter basis, investment securities increased $76.6
million, or 7%, due primarily to improvement in the fair value of
available-for-sale securities of $91.8 million. Investment
securities represented 18% of total assets on December 31,
2023, compared to 20% on December 31, 2022 and 17% on
September 30, 2023. Effective duration for the investment
portfolio was 6.5 years at December 31, 2023, compared to 4.0
years at December 31, 2019 and 6.5 years at December 31, 2022.
Duration of the portfolio expanded following the deployment of
excess liquidity to the investment portfolio and the dramatic rise
in interest rates from the recent tightening cycle by the Federal
Reserve. The ratio of investment securities as a percentage of
total assets remains elevated over historical levels of
approximately 12% to 14% during the period from 2014 through 2020.
The company expects the investment securities portfolio as a
percentage of assets to continue to decrease over time as the
proceeds from pay downs, sales and maturities of these investment
securities are used to fund loan portfolio growth and for other
general liquidity purposes. Investment portfolio sales of $105.2
million for net losses of $25,000 and investment portfolio cash
flows of $71.8 million provided liquidity of $177.0 million during
the twelve months ended December 31, 2023. Furthermore, the
company anticipates receiving principal and interest cash flows of
approximately $103.9 million during 2024.
Net Interest Margin
Net interest margin was 3.23% for the fourth quarter of 2023,
representing a 66 basis point contraction from 3.89% for the fourth
quarter of 2022. Earning assets yields increased by 84 basis points
to 5.96% for the fourth quarter of 2023, up from 5.12% for the
fourth quarter of 2022. The increase in earning asset yields was
offset by an increase in the company's funding costs as interest
expense as a percentage of average earning assets increased to
2.73% for the fourth quarter of 2023 from 1.23% for the fourth
quarter of 2022, or an increase of 150 basis points. While earning
asset yields have benefited from the 100 basis point rise in the
target Federal Funds rate during 2023, the company has experienced
an offsetting increase to funding costs, as competition for
deposits has increased throughout the industry. Notably, a deposit
mix shift from noninterest bearing deposits to interest bearing
deposits has further eroded net interest margin, although this
trend stabilized during the second half of 2023 with noninterest
bearing deposits as a percentage of total deposits holding steady
at 24% at the end of the fourth quarter of 2023. Linked quarter net
interest margin expanded by 2 basis points to 3.23% for the fourth
quarter of 2023, compared to 3.21% for the third quarter of 2023.
Average earning asset yields increased by 15 basis points from
5.81% during the third quarter of 2023 to 5.96% during the fourth
quarter of 2023 and were offset by a 13 basis point increase in
interest expense as a percentage of average earning assets. This
increase in interest expense was driven by continued upward
pressure in deposit costs resulting from market competition but was
offset by reduced borrowing expense during the quarter. Total
noninterest bearing deposits to total deposits were 24% at
December 31, 2023, compared to 24% at September 30, 2023
and 32% at December 31, 2022. The cumulative loan beta, which
measures the sensitivity of a bank's average loan yield to changes
in short-term interest rates, is 54% for the current
rate-tightening cycle, compared to 61% during the prior tightening
cycle from 2015 through 2019. The cumulative deposit beta, which
measures the sensitivity of a bank's deposit cost to changes in
short-term interest rates, is 50% for the current rate-tightening
cycle, compared to 45% during the prior tightening cycle.
Findlay added, “We are pleased to report increased net interest
margin on a linked quarter basis to 3.23%. The rapid rise in
deposit costs during this tightening cycle has outpaced past
cycles. However, during the fourth quarter we were pleased to
report increases in loan yields outpaced rising cost of funds.
Importantly, the deposit mix shift has stabilized during the second
half of 2023.”
Net interest income decreased by $5.9 million, or 3%, for the
twelve months ended December 31, 2023, as compared to the
twelve months ended December 31, 2022, due primarily to an
increase in loan interest income of $104.3 million, offset by a
decrease to securities interest income of $4.1 million, an increase
in deposit interest expense of $101.5 million, and an increase in
borrowing expense of $8.0 million. On a year-to-date basis, revenue
increased by $2.1 million, or 1%, to $246.9 million as compared to
$244.7 million for 2022. Net interest income was $48.6 million for
the fourth quarter of 2023, representing a decrease of $8.2
million, or 14%, as compared to the fourth quarter of 2022. On a
linked quarter basis, net interest income increased $206,000, or
less than 1%, from $48.4 million for the third quarter of 2023.
Asset Quality
Provision expense was $5.9 million for the year ended December
31, 2023, down by $3.5 million or 38% as compared to $9.4 million
during 2022. The company recorded a provision expense of $300,000
in the fourth quarter of 2023, compared to provision expense of
$9.0 million in the fourth quarter of 2022. On a linked quarter
basis, provision expense decreased by $100,000 from $400,000 for
the third quarter of 2023, or 25%.
The allowance for credit loss reserve to total loans was 1.46%
at December 31, 2023, down from 1.54% at December 31,
2022, and 1.48% at September 30, 2023. Net charge offs were
$6.5 million for the full year 2023 compared to $4.5 million for
2022. Net charge offs to total loans were 0.13% for 2023 compared
to 0.10% for 2022. Net charge offs in the fourth quarter of 2023
were $433,000 compared to $3.6 million in the fourth quarter of
2022 and $353,000 during the linked third quarter of 2023.
Annualized net charge offs to average loans were 0.04% for the
fourth quarter of 2023, compared to 0.31% for the fourth quarter of
2022, and 0.03% for the linked third quarter of 2023.
Nonperforming assets decreased $1.1 million, or 6%, to $16.1
million as of December 31, 2023, versus $17.2 million as of
December 31, 2022. On a linked quarter basis, nonperforming
assets decreased $632,000, or 4%, compared to $16.7 million as of
September 30, 2023 due primarily to loan paydowns. The ratio
of nonperforming assets to total assets at December 31, 2023
decreased to 0.25% from 0.27% at December 31, 2022 and
decreased from 0.26% at September 30, 2023.
Total individually analyzed and watch list loans increased by
$22.1 million, or 14%, to $183.1 million as of December 31,
2023, versus $161.0 million as of December 31, 2022. On a
linked quarter basis, total individually analyzed and watch list
loans decreased by $3.3 million, or 2%, from $186.4 million at
September 30, 2023. Watch list loans as a percentage of total
loans increased by 30 basis points to 3.72% at December 31,
2023, compared to 3.42% at December 31, 2022, and decreased by
11 basis points from 3.83% at September 30, 2023.
“While there continue to be concerns related to an economic
slowdown in our Indiana communities, we have not seen these
concerns translate to broader loan quality issues in our portfolio.
Our watch list loans as a percentage of total loans remains near
historic lows and we saw a reduction in nonperforming loans during
the fourth quarter. These stable asset quality trends are
encouraging, yet we continue to closely monitor the loan portfolio.
Our semi-annual Loan Portfolio Review in December did not identify
any significant concerns as we entered 2024,” added Findlay.
Noninterest Income
Noninterest income increased by $8.0 million, or 19%, to $49.9
million for the twelve months ended December 31, 2023,
compared to $41.9 million for the prior year twelve-month period.
Adjusted core noninterest income was $43.6 million for the twelve
months ended December 31, 2023, an increase of $1.7 million, or 4%,
compared to the comparable period of 2022. Wealth advisory fees
increased by 5% or $444,000 during 2023, from $8.6 million to $9.1
million, reflecting continued growth in the business and improving
equity market valuations. Service charges on deposit accounts
decreased by 7% or $822,000 during 2023 from $11.6 million to $10.8
million due primarily to reduced overdraft and other deposit fees.
Loan and service fees declined by 4%, or $464,000, during 2023
primarily due to a decline in per transaction revenue as well as
declining spend per debit card swipe. Merchant fee income improved
by 3%, or $91,000, during 2023.
Other income increased $7.3 million, or 388%, due primarily to
insurance recoveries and restitution of $6.3 million that was
recognized during the fourth quarter of 2023. Bank owned life
insurance income increased $2.7 million, or 625%, due to improved
performance for the company’s variable life insurance policies,
which track with the performance of the equity markets. The
purchase of traditional bank owned life insurance policies in
December 2022 contributed further to the increase in bank owned
life insurance income. These increases were offset by decreases to
mortgage banking income of $887,000, or 140%, service charges on
deposit accounts of $822,000, or 7%, investment brokerage fees of
$503,000, or 22%, and loan service fees of $464,000, or 4%.
The company’s noninterest income increased $6.7 million, or 64%,
to $17.2 million for the fourth quarter of 2023, compared to $10.5
million for the fourth quarter of 2022. The increase in noninterest
income was driven primarily by an increase in other income of $6.9
million, or 2197%, due to the recognition of insurance recoveries
and restitution of $6.3 million during the fourth quarter of 2023.
Contributing further to the increase in other income was increased
FHLB dividends and limited partnership income. Adjusted core
noninterest income, a non-GAAP financial measure that excludes the
impact of wire fraud loss-related recoveries recorded during the
fourth quarter of 2023, was $10.9 million, an increase of $389,000,
or 4%, compared to the fourth quarter of 2022.
Noninterest income for the fourth quarter of 2023 increased by
$6.4 million, or 59%, on a linked quarter basis from $10.8 million
during the third quarter of 2023. The linked quarter increase was
driven largely by an increase in other income of $6.6 million, or
1110%, due primarily to the aforementioned insurance recoveries and
restitution of $6.3 million. Offsetting this increase was a
decrease in bank owned life insurance of $269,000, or 27%, due to
equity market performance related to the company's variable bank
owned life insurance policies. Adjusted core noninterest income for
the fourth quarter of 2023 increased $73,000, or 1%, from the
linked third quarter of 2023.
Noninterest Expense
Noninterest expense increased by $20.5 million, or 19%, for the
twelve months ended December 31, 2023 from $110.2 million to
$130.7 million. The increase to noninterest expense during the year
was driven by an $18.1 million wire fraud loss that occurred during
the second quarter of 2023. Contributing to the increase in
noninterest expense during the twelve months ended December 31,
2023 was an increase to professional fees expense of $2.1 million,
32%, an increase to FDIC insurance and other regulatory fees of
$1.4 million, or 68%, and an increase in data processing fees and
supplies expense of $1.2 million, or 9%. Offsetting these increases
was a decrease in other expense of $2.4 million, or 18.0%, driven
by reduced accruals related to ongoing litigation matters. Adjusted
core noninterest expense, a non-GAAP financial measure that
excludes the impact of the wire fraud loss and corresponding
reduction to salaries and employee benefits, was $114.0 million for
the twelve months ended December 31, 2023, an increase of $3.8
million, or 3%, compared to the twelve months ended December 31,
2022.
Noninterest expense increased $2.0 million, or 7%, to $29.4
million for the fourth quarter of 2023, compared to $27.4 million
during the fourth quarter of 2022. The increase in noninterest
expense during the quarter was driven by an increase in salaries
and employee benefits of $1.0 million, or 7%. FDIC insurance and
other regulatory fees of $411,000, or 85%, from increased FDIC
insurance assessments due to a blanket increase to the assessment
rate used by the FDIC to calculate premiums. Data processing fees
and supplies expense increased $382,000, or 12%, from continued
investment in technology-driven products and services. Professional
fees increased $343,000, or 18%, from increased fees associated
with the bank's cash swap collateral position. On a linked quarter
basis, noninterest expense increased by $348,000, or 1%, from $29.1
million during the third quarter of 2023.
The company's efficiency ratio for the twelve months ended
December 31, 2023 was 52.9% compared to 45.0% for the twelve
months ended December 31, 2022. The company's adjusted core
efficiency ratio, which excludes the impact of the wire fraud loss
and other related effects, was 47.4% for the twelve months ended
December 31, 2023.
The company’s efficiency ratio was 44.7% for the fourth quarter
of 2023, compared to 40.7% for the fourth quarter of 2022 and 49.1%
for the linked third quarter of 2023.
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, adjusted
tangible common equity, adjusted tangible assets, adjusted tangible
common equity to adjusted tangible assets ratio, pretax
pre-provision earnings, adjusted core noninterest income, adjusted
core noninterest expense, adjusted earnings before income taxes,
core operational profitability, core operational diluted earnings
per common share and adjusted core efficiency ratio. 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 global
conflicts, 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 |
FOURTH QUARTER
2023 FINANCIAL HIGHLIGHTS |
|
|
Three Months Ended |
|
Twelve Months Ended |
(Unaudited – Dollars in
thousands, except per share data) |
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
END OF PERIOD BALANCES |
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Assets |
$ |
6,524,029 |
|
|
$ |
6,426,844 |
|
|
$ |
6,432,371 |
|
|
$ |
6,524,029 |
|
|
$ |
6,432,371 |
|
Investments |
|
1,181,646 |
|
|
|
1,105,026 |
|
|
|
1,313,770 |
|
|
|
1,181,646 |
|
|
|
1,313,770 |
|
Loans |
|
4,916,534 |
|
|
|
4,870,965 |
|
|
|
4,710,396 |
|
|
|
4,916,534 |
|
|
|
4,710,396 |
|
Allowance for Credit Losses |
|
71,972 |
|
|
|
72,105 |
|
|
|
72,606 |
|
|
|
71,972 |
|
|
|
72,606 |
|
Deposits |
|
5,720,525 |
|
|
|
5,657,075 |
|
|
|
5,460,620 |
|
|
|
5,720,525 |
|
|
|
5,460,620 |
|
Brokered Deposits |
|
135,405 |
|
|
|
177,430 |
|
|
|
10,027 |
|
|
|
135,405 |
|
|
|
10,027 |
|
Core Deposits (1) |
|
5,585,120 |
|
|
|
5,479,645 |
|
|
|
5,450,593 |
|
|
|
5,585,120 |
|
|
|
5,450,593 |
|
Total Equity |
|
649,793 |
|
|
|
557,184 |
|
|
|
568,887 |
|
|
|
649,793 |
|
|
|
568,887 |
|
Goodwill Net of Deferred Tax Assets |
|
3,803 |
|
|
|
3,803 |
|
|
|
3,803 |
|
|
|
3,803 |
|
|
|
3,803 |
|
Tangible Common Equity (2) |
|
645,990 |
|
|
|
553,381 |
|
|
|
565,084 |
|
|
|
645,990 |
|
|
|
565,084 |
|
Adjusted Tangible Common Equity (2) |
|
800,450 |
|
|
|
780,756 |
|
|
|
753,238 |
|
|
|
800,450 |
|
|
|
753,238 |
|
AVERAGE
BALANCES |
|
|
|
|
|
|
|
|
|
Total Assets |
$ |
6,514,430 |
|
|
$ |
6,498,984 |
|
|
$ |
6,304,366 |
|
|
$ |
6,464,980 |
|
|
$ |
6,427,579 |
|
Earning Assets |
|
6,145,937 |
|
|
|
6,145,894 |
|
|
|
5,958,113 |
|
|
|
6,114,225 |
|
|
|
6,123,163 |
|
Investments |
|
1,107,862 |
|
|
|
1,171,426 |
|
|
|
1,312,050 |
|
|
|
1,184,659 |
|
|
|
1,432,287 |
|
Loans |
|
4,879,695 |
|
|
|
4,849,758 |
|
|
|
4,563,321 |
|
|
|
4,813,678 |
|
|
|
4,427,166 |
|
Total Deposits |
|
5,802,592 |
|
|
|
5,572,466 |
|
|
|
5,633,040 |
|
|
|
5,604,228 |
|
|
|
5,717,358 |
|
Interest Bearing Deposits |
|
4,428,140 |
|
|
|
4,154,825 |
|
|
|
3,867,655 |
|
|
|
4,128,922 |
|
|
|
3,874,581 |
|
Interest Bearing Liabilities |
|
4,441,425 |
|
|
|
4,382,380 |
|
|
|
3,893,652 |
|
|
|
4,295,743 |
|
|
|
3,913,195 |
|
Total Equity |
|
572,653 |
|
|
|
592,510 |
|
|
|
537,985 |
|
|
|
588,667 |
|
|
|
596,487 |
|
INCOME STATEMENT
DATA |
|
|
|
|
|
|
|
|
|
Net Interest Income |
$ |
48,599 |
|
|
$ |
48,393 |
|
|
$ |
56,837 |
|
|
$ |
197,035 |
|
|
$ |
202,887 |
|
Net Interest Income-Fully Tax Equivalent |
|
49,914 |
|
|
|
49,712 |
|
|
|
58,346 |
|
|
|
202,347 |
|
|
|
208,514 |
|
Provision for Credit Losses |
|
300 |
|
|
|
400 |
|
|
|
8,958 |
|
|
|
5,850 |
|
|
|
9,375 |
|
Noninterest Income |
|
17,208 |
|
|
|
10,835 |
|
|
|
10,519 |
|
|
|
49,858 |
|
|
|
41,862 |
|
Noninterest Expense |
|
29,445 |
|
|
|
29,097 |
|
|
|
27,434 |
|
|
|
130,710 |
|
|
|
110,210 |
|
Net Income |
|
29,626 |
|
|
|
25,252 |
|
|
|
25,977 |
|
|
|
93,767 |
|
|
|
103,817 |
|
Pretax Pre-Provision Earnings (2) |
|
36,362 |
|
|
|
30,131 |
|
|
|
39,922 |
|
|
|
116,183 |
|
|
|
134,539 |
|
PER SHARE
DATA |
|
|
|
|
|
|
|
|
|
Basic Net Income Per Common Share |
$ |
1.16 |
|
|
$ |
0.99 |
|
|
$ |
1.02 |
|
|
$ |
3.67 |
|
|
$ |
4.07 |
|
Diluted Net Income Per Common Share |
|
1.16 |
|
|
|
0.98 |
|
|
|
1.01 |
|
|
|
3.65 |
|
|
|
4.04 |
|
Cash Dividends Declared Per Common Share |
|
0.46 |
|
|
|
0.46 |
|
|
|
0.40 |
|
|
|
1.84 |
|
|
|
1.60 |
|
Dividend Payout |
|
39.66 |
% |
|
|
46.94 |
% |
|
|
39.60 |
% |
|
|
50.41 |
% |
|
|
39.60 |
% |
Book Value Per Common Share (equity per share issued) |
$ |
25.37 |
|
|
$ |
21.75 |
|
|
$ |
22.28 |
|
|
$ |
25.37 |
|
|
$ |
22.28 |
|
Tangible Book Value Per Common Share (2) |
|
25.22 |
|
|
|
21.60 |
|
|
|
22.13 |
|
|
|
25.22 |
|
|
|
22.13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
(Unaudited – Dollars in
thousands, except per share data) |
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
PER SHARE DATA
(continued) |
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Market Value – High |
$ |
67.88 |
|
|
$ |
57.00 |
|
|
$ |
83.57 |
|
|
$ |
77.07 |
|
|
$ |
85.71 |
|
Market Value – Low |
|
45.59 |
|
|
|
44.46 |
|
|
|
71.37 |
|
|
|
43.05 |
|
|
|
64.05 |
|
Basic Weighted Average Common Shares Outstanding |
|
25,614,420 |
|
|
|
25,613,456 |
|
|
|
25,536,026 |
|
|
|
25,604,751 |
|
|
|
25,528,328 |
|
Diluted Weighted Average Common Shares Outstanding |
|
25,732,870 |
|
|
|
25,693,535 |
|
|
|
25,754,274 |
|
|
|
25,723,165 |
|
|
|
25,712,538 |
|
KEY
RATIOS |
|
|
|
|
|
|
|
|
|
Return on Average Assets |
|
1.80 |
% |
|
|
1.54 |
% |
|
|
1.63 |
% |
|
|
1.45 |
% |
|
|
1.62 |
% |
Return on Average Total Equity |
|
20.52 |
|
|
|
16.91 |
|
|
|
19.16 |
|
|
|
15.93 |
|
|
|
17.40 |
|
Average Equity to Average Assets |
|
8.79 |
|
|
|
9.12 |
|
|
|
8.53 |
|
|
|
9.11 |
|
|
|
9.28 |
|
Net Interest Margin |
|
3.23 |
|
|
|
3.21 |
|
|
|
3.89 |
|
|
|
3.31 |
|
|
|
3.40 |
|
Efficiency (Noninterest Expense/Net Interest Income plus
Noninterest Income) |
|
44.74 |
|
|
|
49.13 |
|
|
|
40.73 |
|
|
|
52.94 |
|
|
|
45.03 |
|
Loans to Deposits |
|
85.95 |
|
|
|
86.10 |
|
|
|
86.26 |
|
|
|
85.95 |
|
|
|
86.26 |
|
Investment Securities to Total Assets |
|
18.11 |
|
|
|
17.19 |
|
|
|
20.42 |
|
|
|
18.11 |
|
|
|
20.42 |
|
Tier 1 Leverage (3) |
|
11.82 |
|
|
|
11.64 |
|
|
|
11.50 |
|
|
|
11.82 |
|
|
|
11.50 |
|
Tier 1 Risk-Based Capital (3) |
|
14.21 |
|
|
|
13.88 |
|
|
|
13.82 |
|
|
|
14.21 |
|
|
|
13.82 |
|
Common Equity Tier 1 (CET1) (3) |
|
14.21 |
|
|
|
13.88 |
|
|
|
13.82 |
|
|
|
14.21 |
|
|
|
13.82 |
|
Total Capital (3) |
|
15.46 |
|
|
|
15.13 |
|
|
|
15.07 |
|
|
|
15.46 |
|
|
|
15.07 |
|
Tangible Capital (2) |
|
9.91 |
|
|
|
8.62 |
|
|
|
8.79 |
|
|
|
9.91 |
|
|
|
8.79 |
|
Adjusted Tangible Capital (2) |
|
11.99 |
|
|
|
11.74 |
|
|
|
11.38 |
|
|
|
11.99 |
|
|
|
11.38 |
|
ASSET
QUALITY |
|
|
|
|
|
|
|
|
|
Loans Past Due 30 - 89 Days |
$ |
3,360 |
|
|
$ |
1,782 |
|
|
$ |
1,169 |
|
|
$ |
3,360 |
|
|
$ |
1,169 |
|
Loans Past Due 90 Days or More |
|
27 |
|
|
|
19 |
|
|
|
123 |
|
|
|
27 |
|
|
|
123 |
|
Nonaccrual Loans |
|
15,687 |
|
|
|
16,290 |
|
|
|
16,964 |
|
|
|
15,687 |
|
|
|
16,964 |
|
Nonperforming Loans |
|
15,714 |
|
|
|
16,309 |
|
|
|
17,087 |
|
|
|
15,714 |
|
|
|
17,087 |
|
Other Real Estate Owned |
|
384 |
|
|
|
384 |
|
|
|
100 |
|
|
|
384 |
|
|
|
100 |
|
Other Nonperforming Assets |
|
8 |
|
|
|
45 |
|
|
|
37 |
|
|
|
8 |
|
|
|
37 |
|
Total Nonperforming Assets |
|
16,106 |
|
|
|
16,738 |
|
|
|
17,224 |
|
|
|
16,106 |
|
|
|
17,224 |
|
Individually Analyzed Loans |
|
16,124 |
|
|
|
16,739 |
|
|
|
31,327 |
|
|
|
16,124 |
|
|
|
31,327 |
|
Non-Individually Analyzed Watch List Loans |
|
166,961 |
|
|
|
169,621 |
|
|
|
129,671 |
|
|
|
166,961 |
|
|
|
129,671 |
|
Total Individually Analyzed and Watch List Loans |
|
183,085 |
|
|
|
186,360 |
|
|
|
160,998 |
|
|
|
183,085 |
|
|
|
160,998 |
|
Gross Charge Offs |
|
566 |
|
|
|
480 |
|
|
|
3,923 |
|
|
|
7,332 |
|
|
|
5,134 |
|
Recoveries |
|
133 |
|
|
|
127 |
|
|
|
332 |
|
|
|
848 |
|
|
|
592 |
|
Net Charge Offs/(Recoveries) |
|
433 |
|
|
|
353 |
|
|
|
3,591 |
|
|
|
6,484 |
|
|
|
4,542 |
|
Net Charge Offs/(Recoveries) to Average Loans |
|
0.04 |
% |
|
|
0.03 |
% |
|
|
0.31 |
% |
|
|
0.13 |
% |
|
|
0.10 |
% |
Credit Loss Reserve to Loans |
|
1.46 |
|
|
|
1.48 |
|
|
|
1.54 |
|
|
|
1.46 |
|
|
|
1.54 |
|
Credit Loss Reserve to Nonperforming Loans |
|
458.01 |
|
|
|
442.11 |
|
|
|
424.91 |
|
|
|
458.01 |
|
|
|
424.91 |
|
Nonperforming Loans to Loans |
|
0.32 |
|
|
|
0.33 |
|
|
|
0.36 |
|
|
|
0.32 |
|
|
|
0.36 |
|
Nonperforming Assets to Assets |
|
0.25 |
|
|
|
0.26 |
|
|
|
0.27 |
|
|
|
0.25 |
|
|
|
0.27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
(Unaudited – Dollars in
thousands, except per share data) |
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
ASSET QUALITY
(continued) |
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Total Individually Analyzed and Watch List Loans to Total
Loans |
|
3.72 |
% |
|
|
3.83 |
% |
|
|
3.42 |
% |
|
|
3.72 |
% |
|
|
3.42 |
% |
OTHER
DATA |
|
|
|
|
|
|
|
|
|
Full Time Equivalent Employees |
|
619 |
|
|
|
614 |
|
|
|
609 |
|
|
|
619 |
|
|
|
609 |
|
Offices |
|
53 |
|
|
|
53 |
|
|
|
52 |
|
|
|
53 |
|
|
|
52 |
|
(1) Core deposits equals deposits less brokered
deposits.(2) Non-GAAP financial measure - see
“Reconciliation of Non-GAAP Financial
Measures”.(3) Capital ratios for December 31, 2023
are preliminary until the Call Report is filed.
CONSOLIDATED BALANCE
SHEETS (in thousands, except share data) |
|
|
|
|
December 31,2023 |
|
December 31,2022 |
|
(Unaudited) |
|
|
ASSETS |
|
|
|
Cash and due from banks |
$ |
70,451 |
|
|
$ |
80,992 |
|
Short-term investments |
|
81,373 |
|
|
|
49,290 |
|
Total cash and cash equivalents |
|
151,824 |
|
|
|
130,282 |
|
|
|
|
|
Securities available-for-sale,
at fair value |
|
1,051,728 |
|
|
|
1,185,528 |
|
Securities held-to-maturity,
at amortized cost (fair value of $119,215 and $111,029,
respectively) |
|
129,918 |
|
|
|
128,242 |
|
Real estate mortgage loans
held-for-sale |
|
1,158 |
|
|
|
357 |
|
|
|
|
|
Loans, net of allowance for
credit losses of $71,972 and $72,606 |
|
4,844,562 |
|
|
|
4,637,790 |
|
|
|
|
|
Land, premises and equipment,
net |
|
57,899 |
|
|
|
58,097 |
|
Bank owned life insurance |
|
109,114 |
|
|
|
108,407 |
|
Federal Reserve and Federal
Home Loan Bank stock |
|
21,420 |
|
|
|
15,795 |
|
Accrued interest
receivable |
|
30,011 |
|
|
|
27,994 |
|
Goodwill |
|
4,970 |
|
|
|
4,970 |
|
Other assets |
|
121,425 |
|
|
|
134,909 |
|
Total assets |
$ |
6,524,029 |
|
|
$ |
6,432,371 |
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
Noninterest bearing
deposits |
$ |
1,353,477 |
|
|
$ |
1,736,761 |
|
Interest bearing deposits |
|
4,367,048 |
|
|
|
3,723,859 |
|
Total deposits |
|
5,720,525 |
|
|
|
5,460,620 |
|
|
|
|
|
Federal Funds purchased |
|
0 |
|
|
|
22,000 |
|
Federal Home Loan Bank
advances |
|
50,000 |
|
|
|
275,000 |
|
Total borrowings |
|
50,000 |
|
|
|
297,000 |
|
|
|
|
|
Accrued interest payable |
|
20,893 |
|
|
|
3,186 |
|
Other liabilities |
|
82,818 |
|
|
|
102,678 |
|
Total liabilities |
|
5,874,236 |
|
|
|
5,863,484 |
|
|
|
|
|
STOCKHOLDERS’
EQUITY |
|
|
|
Common stock: 90,000,000
shares authorized, no par value |
|
|
|
25,903,686 shares issued and 25,430,566 outstanding as of
December 31, 2023 |
|
|
|
25,825,127 shares issued and 25,349,225 outstanding as of
December 31, 2022 |
|
127,692 |
|
|
|
127,004 |
|
Retained earnings |
|
692,760 |
|
|
|
646,100 |
|
Accumulated other
comprehensive income (loss) |
|
(155,195 |
) |
|
|
(188,923 |
) |
Treasury stock, at cost
(473,120 shares and 475,902 shares as of
December 31, 2023 and December 31, 2022,
respectively) |
|
(15,553 |
) |
|
|
(15,383 |
) |
Total stockholders’ equity |
|
649,704 |
|
|
|
568,798 |
|
Noncontrolling interest |
|
89 |
|
|
|
89 |
|
Total equity |
|
649,793 |
|
|
|
568,887 |
|
Total liabilities and equity |
$ |
6,524,029 |
|
|
$ |
6,432,371 |
|
|
CONSOLIDATED STATEMENTS OF INCOME (unaudited - in
thousands, except share and per share data) |
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
NET INTEREST
INCOME |
|
|
|
|
|
|
|
Interest and fees on
loans |
|
|
|
|
|
|
|
Taxable |
$ |
80,631 |
|
|
$ |
65,424 |
|
|
$ |
304,130 |
|
|
$ |
202,004 |
|
Tax exempt |
|
1,016 |
|
|
|
753 |
|
|
|
3,885 |
|
|
|
1,664 |
|
Interest and dividends on
securities |
|
|
|
|
|
|
|
Taxable |
|
3,187 |
|
|
|
3,519 |
|
|
|
13,153 |
|
|
|
14,132 |
|
Tax exempt |
|
4,009 |
|
|
|
4,944 |
|
|
|
16,396 |
|
|
|
19,553 |
|
Other interest income |
|
2,099 |
|
|
|
713 |
|
|
|
5,703 |
|
|
|
2,214 |
|
Total interest income |
|
90,942 |
|
|
|
75,353 |
|
|
|
343,267 |
|
|
|
239,567 |
|
|
|
|
|
|
|
|
|
Interest on deposits |
|
42,154 |
|
|
|
18,244 |
|
|
|
137,791 |
|
|
|
36,281 |
|
Interest on borrowings |
|
|
|
|
|
|
|
Short-term |
|
189 |
|
|
|
272 |
|
|
|
8,441 |
|
|
|
272 |
|
Long-term |
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
127 |
|
Total interest expense |
|
42,343 |
|
|
|
18,516 |
|
|
|
146,232 |
|
|
|
36,680 |
|
|
|
|
|
|
|
|
|
NET INTEREST
INCOME |
|
48,599 |
|
|
|
56,837 |
|
|
|
197,035 |
|
|
|
202,887 |
|
|
|
|
|
|
|
|
|
Provision for credit
losses |
|
300 |
|
|
|
8,958 |
|
|
|
5,850 |
|
|
|
9,375 |
|
|
|
|
|
|
|
|
|
NET INTEREST INCOME
AFTER PROVISION FOR CREDIT LOSSES |
|
48,299 |
|
|
|
47,879 |
|
|
|
191,185 |
|
|
|
193,512 |
|
|
|
|
|
|
|
|
|
NONINTEREST
INCOME |
|
|
|
|
|
|
|
Wealth advisory fees |
|
2,311 |
|
|
|
2,086 |
|
|
|
9,080 |
|
|
|
8,636 |
|
Investment brokerage fees |
|
445 |
|
|
|
607 |
|
|
|
1,815 |
|
|
|
2,318 |
|
Service charges on deposit
accounts |
|
2,682 |
|
|
|
2,914 |
|
|
|
10,773 |
|
|
|
11,595 |
|
Loan and service fees |
|
2,968 |
|
|
|
3,083 |
|
|
|
11,750 |
|
|
|
12,214 |
|
Merchant and interchange fee
income |
|
907 |
|
|
|
900 |
|
|
|
3,651 |
|
|
|
3,560 |
|
Bank owned life insurance
income |
|
740 |
|
|
|
644 |
|
|
|
3,133 |
|
|
|
432 |
|
Interest rate swap fee
income |
|
0 |
|
|
|
87 |
|
|
|
794 |
|
|
|
579 |
|
Mortgage banking income
(loss) |
|
(70 |
) |
|
|
(138 |
) |
|
|
(254 |
) |
|
|
633 |
|
Net securities gains
(losses) |
|
(9 |
) |
|
|
21 |
|
|
|
(25 |
) |
|
|
21 |
|
Other income |
|
7,234 |
|
|
|
315 |
|
|
|
9,141 |
|
|
|
1,874 |
|
Total noninterest income |
|
17,208 |
|
|
|
10,519 |
|
|
|
49,858 |
|
|
|
41,862 |
|
|
|
|
|
|
|
|
|
NONINTEREST
EXPENSE |
|
|
|
|
|
|
|
Salaries and employee
benefits |
|
15,733 |
|
|
|
14,690 |
|
|
|
59,147 |
|
|
|
58,530 |
|
Net occupancy expense |
|
1,486 |
|
|
|
1,494 |
|
|
|
6,360 |
|
|
|
6,287 |
|
Equipment costs |
|
1,443 |
|
|
|
1,513 |
|
|
|
5,632 |
|
|
|
5,763 |
|
Data processing fees and
supplies |
|
3,698 |
|
|
|
3,316 |
|
|
|
14,003 |
|
|
|
12,826 |
|
Corporate and business
development |
|
877 |
|
|
|
1,120 |
|
|
|
4,807 |
|
|
|
5,198 |
|
FDIC insurance and other
regulatory fees |
|
894 |
|
|
|
483 |
|
|
|
3,363 |
|
|
|
1,999 |
|
Professional fees |
|
2,299 |
|
|
|
1,956 |
|
|
|
8,583 |
|
|
|
6,483 |
|
Wire fraud loss |
|
0 |
|
|
|
0 |
|
|
|
18,058 |
|
|
|
0 |
|
Other expense |
|
3,015 |
|
|
|
2,862 |
|
|
|
10,757 |
|
|
|
13,124 |
|
Total noninterest expense |
|
29,445 |
|
|
|
27,434 |
|
|
|
130,710 |
|
|
|
110,210 |
|
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME
TAX EXPENSE |
|
36,062 |
|
|
|
30,964 |
|
|
|
110,333 |
|
|
|
125,164 |
|
Income tax expense |
|
6,436 |
|
|
|
4,987 |
|
|
|
16,566 |
|
|
|
21,347 |
|
NET
INCOME |
$ |
29,626 |
|
|
$ |
25,977 |
|
|
$ |
93,767 |
|
|
$ |
103,817 |
|
|
|
|
|
|
|
|
|
BASIC WEIGHTED AVERAGE
COMMON SHARES |
|
25,614,420 |
|
|
|
25,536,026 |
|
|
|
25,604,751 |
|
|
|
25,528,328 |
|
|
|
|
|
|
|
|
|
BASIC EARNINGS PER
COMMON SHARE |
$ |
1.16 |
|
|
$ |
1.02 |
|
|
$ |
3.67 |
|
|
$ |
4.07 |
|
|
|
|
|
|
|
|
|
DILUTED WEIGHTED
AVERAGE COMMON SHARES |
|
25,732,870 |
|
|
|
25,754,274 |
|
|
|
25,723,165 |
|
|
|
25,712,538 |
|
|
|
|
|
|
|
|
|
DILUTED EARNINGS PER
COMMON SHARE |
$ |
1.16 |
|
|
$ |
1.01 |
|
|
$ |
3.65 |
|
|
$ |
4.04 |
|
|
LAKELAND FINANCIAL CORPORATION |
LOAN DETAIL |
(unaudited, in thousands) |
|
|
December 31,2023 |
|
September 30,2023 |
|
December 31,2022 |
Commercial and industrial
loans: |
|
|
|
|
|
|
|
|
|
|
|
Working capital lines of credit loans |
$ |
604,893 |
|
|
12.3 |
% |
|
$ |
589,345 |
|
|
12.1 |
% |
|
$ |
650,948 |
|
|
13.8 |
% |
Non-working capital loans |
|
815,871 |
|
|
16.6 |
|
|
|
812,875 |
|
|
16.7 |
|
|
|
842,101 |
|
|
17.9 |
|
Total commercial and industrial loans |
|
1,420,764 |
|
|
28.9 |
|
|
|
1,402,220 |
|
|
28.8 |
|
|
|
1,493,049 |
|
|
31.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate and
multi-family residential loans: |
|
|
|
|
|
|
|
|
|
|
|
Construction and land development loans |
|
634,435 |
|
|
12.9 |
|
|
|
633,920 |
|
|
13.0 |
|
|
|
517,664 |
|
|
11.0 |
|
Owner occupied loans |
|
825,464 |
|
|
16.8 |
|
|
|
811,175 |
|
|
16.6 |
|
|
|
758,091 |
|
|
16.0 |
|
Nonowner occupied loans |
|
724,101 |
|
|
14.7 |
|
|
|
740,783 |
|
|
15.2 |
|
|
|
706,107 |
|
|
15.0 |
|
Multifamily loans |
|
253,534 |
|
|
5.1 |
|
|
|
236,581 |
|
|
4.8 |
|
|
|
197,232 |
|
|
4.2 |
|
Total commercial real estate and multi-family residential
loans |
|
2,437,534 |
|
|
49.5 |
|
|
|
2,422,459 |
|
|
49.6 |
|
|
|
2,179,094 |
|
|
46.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Agri-business and agricultural
loans: |
|
|
|
|
|
|
|
|
|
|
|
Loans secured by farmland |
|
162,890 |
|
|
3.3 |
|
|
|
183,241 |
|
|
3.8 |
|
|
|
201,200 |
|
|
4.3 |
|
Loans for agricultural production |
|
225,874 |
|
|
4.6 |
|
|
|
197,287 |
|
|
4.0 |
|
|
|
230,888 |
|
|
4.9 |
|
Total agri-business and agricultural loans |
|
388,764 |
|
|
7.9 |
|
|
|
380,528 |
|
|
7.8 |
|
|
|
432,088 |
|
|
9.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other commercial loans |
|
120,726 |
|
|
2.5 |
|
|
|
125,939 |
|
|
2.6 |
|
|
|
113,593 |
|
|
2.4 |
|
Total commercial loans |
|
4,367,788 |
|
|
88.8 |
|
|
|
4,331,146 |
|
|
88.8 |
|
|
|
4,217,824 |
|
|
89.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer 1-4 family mortgage
loans: |
|
|
|
|
|
|
|
|
|
|
|
Closed end first mortgage loans |
|
258,103 |
|
|
5.2 |
|
|
|
247,114 |
|
|
5.1 |
|
|
|
212,742 |
|
|
4.5 |
|
Open end and junior lien loans |
|
189,663 |
|
|
3.9 |
|
|
|
189,611 |
|
|
3.9 |
|
|
|
175,575 |
|
|
3.7 |
|
Residential construction and land development loans |
|
8,421 |
|
|
0.2 |
|
|
|
12,888 |
|
|
0.3 |
|
|
|
19,249 |
|
|
0.4 |
|
Total consumer 1-4 family mortgage loans |
|
456,187 |
|
|
9.3 |
|
|
|
449,613 |
|
|
9.3 |
|
|
|
407,566 |
|
|
8.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other consumer loans |
|
96,022 |
|
|
1.9 |
|
|
|
93,737 |
|
|
1.9 |
|
|
|
88,075 |
|
|
1.9 |
|
Total consumer loans |
|
552,209 |
|
|
11.2 |
|
|
|
543,350 |
|
|
11.2 |
|
|
|
495,641 |
|
|
10.5 |
|
Subtotal |
|
4,919,997 |
|
|
100.0 |
% |
|
|
4,874,496 |
|
|
100.0 |
% |
|
|
4,713,465 |
|
|
100.0 |
% |
Less: Allowance for
credit losses |
|
(71,972 |
) |
|
|
|
|
(72,105 |
) |
|
|
|
|
(72,606 |
) |
|
|
Net deferred loan fees |
|
(3,463 |
) |
|
|
|
|
(3,531 |
) |
|
|
|
|
(3,069 |
) |
|
|
Loans, net |
$ |
4,844,562 |
|
|
|
|
$ |
4,798,860 |
|
|
|
|
$ |
4,637,790 |
|
|
|
|
LAKELAND FINANCIAL CORPORATION |
DEPOSITS AND BORROWINGS |
(unaudited, in thousands) |
|
|
December 31,2023 |
|
September 30,2023 |
|
December 31,2022 |
Noninterest bearing demand deposits |
$ |
1,353,477 |
|
$ |
1,377,650 |
|
$ |
1,736,761 |
|
Savings and transaction
accounts: |
|
|
|
|
|
Savings deposits |
|
301,168 |
|
|
315,651 |
|
|
403,773 |
|
Interest bearing demand deposits |
|
3,049,059 |
|
|
2,891,683 |
|
|
2,693,900 |
|
Time deposits: |
|
|
|
|
|
Deposits of $100,000 or more |
|
792,738 |
|
|
756,107 |
|
|
455,427 |
|
Other time deposits |
|
224,083 |
|
|
315,984 |
|
|
170,759 |
|
Total deposits |
$ |
5,720,525 |
|
$ |
5,657,075 |
|
$ |
5,460,620 |
|
FHLB advances and other
borrowings |
|
50,000 |
|
|
90,000 |
|
|
297,000 |
|
Total funding sources |
$ |
5,770,525 |
|
$ |
5,747,075 |
|
$ |
5,757,620 |
|
|
LAKELAND FINANCIAL CORPORATION |
AVERAGE BALANCE SHEET AND NET INTEREST
ANALYSIS |
(UNAUDITED) |
|
|
|
Three Months Ended December 31,2023 |
|
Three Months Ended September 30,2023 |
|
Three Months Ended December 31,2022 |
(fully
tax equivalent basis, dollars in thousands) |
|
AverageBalance |
|
InterestIncome |
|
Yield (1)/Rate |
|
AverageBalance |
|
InterestIncome |
|
Yield (1)/Rate |
|
AverageBalance |
|
InterestIncome |
|
Yield (1)/Rate |
Earning Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable (2)(3) |
|
$ |
4,820,389 |
|
|
$ |
80,631 |
|
6.64 |
% |
|
$ |
4,791,156 |
|
|
$ |
78,910 |
|
6.53 |
% |
|
$ |
4,512,012 |
|
|
$ |
65,424 |
|
5.75 |
% |
Tax exempt (1) |
|
|
59,306 |
|
|
|
1,265 |
|
8.46 |
|
|
|
58,602 |
|
|
|
1,258 |
|
8.52 |
|
|
|
51,309 |
|
|
|
948 |
|
7.33 |
|
Investments: (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities |
|
|
1,107,862 |
|
|
|
8,262 |
|
2.96 |
|
|
|
1,171,426 |
|
|
|
8,169 |
|
2.77 |
|
|
|
1,312,050 |
|
|
|
9,777 |
|
2.96 |
|
Short-term investments |
|
|
2,610 |
|
|
|
32 |
|
4.86 |
|
|
|
2,533 |
|
|
|
29 |
|
4.54 |
|
|
|
2,312 |
|
|
|
18 |
|
3.09 |
|
Interest bearing deposits |
|
|
155,770 |
|
|
|
2,067 |
|
5.26 |
|
|
|
122,177 |
|
|
|
1,576 |
|
5.12 |
|
|
|
80,430 |
|
|
|
695 |
|
3.43 |
|
Total earning assets |
|
$ |
6,145,937 |
|
|
$ |
92,257 |
|
5.96 |
% |
|
$ |
6,145,894 |
|
|
$ |
89,942 |
|
5.81 |
% |
|
$ |
5,958,113 |
|
|
$ |
76,862 |
|
5.12 |
% |
Less: Allowance for
credit losses |
|
|
(72,165 |
) |
|
|
|
|
|
|
(71,997 |
) |
|
|
|
|
|
|
(67,815 |
) |
|
|
|
|
Nonearning Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
|
69,563 |
|
|
|
|
|
|
|
68,669 |
|
|
|
|
|
|
|
72,487 |
|
|
|
|
|
Premises and equipment |
|
|
58,436 |
|
|
|
|
|
|
|
58,782 |
|
|
|
|
|
|
|
58,501 |
|
|
|
|
|
Other nonearning assets |
|
|
312,659 |
|
|
|
|
|
|
|
297,636 |
|
|
|
|
|
|
|
283,080 |
|
|
|
|
|
Total assets |
|
$ |
6,514,430 |
|
|
|
|
|
|
$ |
6,498,984 |
|
|
|
|
|
|
$ |
6,304,366 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Bearing
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings deposits |
|
$ |
306,875 |
|
|
$ |
52 |
|
0.07 |
% |
|
$ |
329,557 |
|
|
$ |
57 |
|
0.07 |
% |
|
$ |
415,942 |
|
|
$ |
86 |
|
0.08 |
% |
Interest bearing checking accounts |
|
|
3,073,570 |
|
|
|
30,953 |
|
4.00 |
|
|
|
2,873,795 |
|
|
|
27,891 |
|
3.85 |
|
|
|
2,781,061 |
|
|
|
16,727 |
|
2.39 |
|
Time deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In denominations under $100,000 |
|
|
220,678 |
|
|
|
1,810 |
|
3.25 |
|
|
|
211,039 |
|
|
|
1,507 |
|
2.83 |
|
|
|
172,622 |
|
|
|
337 |
|
0.77 |
|
In denominations over $100,000 |
|
|
827,017 |
|
|
|
9,339 |
|
4.48 |
|
|
|
740,434 |
|
|
|
7,654 |
|
4.10 |
|
|
|
498,030 |
|
|
|
1,094 |
|
0.87 |
|
Miscellaneous short-term borrowings |
|
|
13,285 |
|
|
|
189 |
|
5.64 |
|
|
|
227,555 |
|
|
|
3,121 |
|
5.44 |
|
|
|
25,997 |
|
|
|
272 |
|
4.15 |
|
Long-term borrowings |
|
|
0 |
|
|
|
0 |
|
0.00 |
|
|
|
0 |
|
|
|
0 |
|
0.00 |
|
|
|
0 |
|
|
|
0 |
|
0.00 |
|
Total interest bearing
liabilities |
|
$ |
4,441,425 |
|
|
$ |
42,343 |
|
3.78 |
% |
|
$ |
4,382,380 |
|
|
$ |
40,230 |
|
3.64 |
% |
|
$ |
3,893,652 |
|
|
$ |
18,516 |
|
1.89 |
% |
Noninterest Bearing
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
|
1,374,452 |
|
|
|
|
|
|
|
1,417,641 |
|
|
|
|
|
|
|
1,765,385 |
|
|
|
|
|
Other liabilities |
|
|
125,900 |
|
|
|
|
|
|
|
106,453 |
|
|
|
|
|
|
|
107,344 |
|
|
|
|
|
Stockholders' Equity |
|
|
572,653 |
|
|
|
|
|
|
|
592,510 |
|
|
|
|
|
|
|
537,985 |
|
|
|
|
|
Total liabilities and
stockholders' equity |
|
$ |
6,514,430 |
|
|
|
|
|
|
$ |
6,498,984 |
|
|
|
|
|
|
$ |
6,304,366 |
|
|
|
|
|
Interest Margin Recap |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income/average
earning assets |
|
|
|
|
92,257 |
|
5.96 |
% |
|
|
|
|
89,942 |
|
5.81 |
% |
|
|
|
|
76,862 |
|
5.12 |
% |
Interest expense/average
earning assets |
|
|
|
|
42,343 |
|
2.73 |
|
|
|
|
|
40,230 |
|
2.60 |
|
|
|
|
|
18,516 |
|
1.23 |
|
Net interest income and
margin |
|
|
|
$ |
49,914 |
|
3.23 |
% |
|
|
|
$ |
49,712 |
|
3.21 |
% |
|
|
|
$ |
58,346 |
|
3.89 |
% |
|
(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 $1.32 million, $1.32 million and $1.51 million in
the three-month periods ended December 31, 2023,
September 30, 2023 and December 31, 2022,
respectively.(2) Loan fees, which are immaterial in
relation to total taxable loan interest income for the three months
ended December 31, 2023, September 30, 2023 and
December 31, 2022, are included as taxable loan interest
income.(3) Nonaccrual loans are included in the average
balance of taxable loans.Reconciliation of Non-GAAP
Financial Measures
Tangible common equity, adjusted tangible common equity,
tangible assets, adjusted tangible assets, tangible book value per
common share, tangible common equity to tangible assets, adjusted
tangible common equity to adjusted tangible assets, 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 in accumulated
other comprehensive income (loss). Tangible book value per common
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
meaningful to understanding of the company’s financial information
and performance.
A reconciliation of these non-GAAP financial measures is
provided below (dollars in thousands, except per share data).
|
Three Months Ended |
|
Twelve Months Ended |
|
Dec. 31, 2023 |
|
Sep. 30, 2023 |
|
Dec. 31, 2022 |
|
Dec. 31, 2023 |
|
Dec. 31, 2022 |
Total Equity |
$ |
649,793 |
|
|
$ |
557,184 |
|
|
$ |
568,887 |
|
|
$ |
649,793 |
|
|
$ |
568,887 |
|
Less: Goodwill |
|
(4,970 |
) |
|
|
(4,970 |
) |
|
|
(4,970 |
) |
|
|
(4,970 |
) |
|
|
(4,970 |
) |
Plus: DTA Related to
Goodwill |
|
1,167 |
|
|
|
1,167 |
|
|
|
1,167 |
|
|
|
1,167 |
|
|
|
1,167 |
|
Tangible Common Equity |
|
645,990 |
|
|
|
553,381 |
|
|
|
565,084 |
|
|
|
645,990 |
|
|
|
565,084 |
|
Market Value Adjustment in
AOCI |
|
154,460 |
|
|
|
227,375 |
|
|
|
188,154 |
|
|
|
154,460 |
|
|
|
188,154 |
|
Adjusted Tangible Common
Equity |
|
800,450 |
|
|
|
780,756 |
|
|
|
753,238 |
|
|
|
800,450 |
|
|
|
753,238 |
|
|
|
|
|
|
|
|
|
|
|
Assets |
$ |
6,524,029 |
|
|
$ |
6,426,844 |
|
|
$ |
6,432,371 |
|
|
$ |
6,524,029 |
|
|
$ |
6,432,371 |
|
Less: Goodwill |
|
(4,970 |
) |
|
|
(4,970 |
) |
|
|
(4,970 |
) |
|
|
(4,970 |
) |
|
|
(4,970 |
) |
Plus: DTA Related to
Goodwill |
|
1,167 |
|
|
|
1,167 |
|
|
|
1,167 |
|
|
|
1,167 |
|
|
|
1,167 |
|
Tangible Assets |
|
6,520,226 |
|
|
|
6,423,041 |
|
|
|
6,428,568 |
|
|
|
6,520,226 |
|
|
|
6,428,568 |
|
Market Value Adjustment in
AOCI |
|
154,460 |
|
|
|
227,375 |
|
|
|
188,154 |
|
|
|
154,460 |
|
|
|
188,154 |
|
Adjusted Tangible Assets |
|
6,674,686 |
|
|
|
6,650,416 |
|
|
|
6,616,722 |
|
|
|
6,674,686 |
|
|
|
6,616,722 |
|
|
|
|
|
|
|
|
|
|
|
Ending Common Shares
Issued |
|
25,614,585 |
|
|
|
25,614,163 |
|
|
|
25,536,026 |
|
|
|
25,614,585 |
|
|
|
25,536,026 |
|
|
|
|
|
|
|
|
|
|
|
Tangible Book Value Per Common
Share |
$ |
25.22 |
|
|
$ |
21.60 |
|
|
$ |
22.13 |
|
|
$ |
25.22 |
|
|
$ |
22.13 |
|
|
|
|
|
|
|
|
|
|
|
Tangible Common
Equity/Tangible Assets |
|
9.91 |
% |
|
|
8.62 |
% |
|
|
8.79 |
% |
|
|
9.91 |
% |
|
|
8.79 |
% |
Adjusted Tangible Common
Equity/Adjusted Tangible Assets |
|
11.99 |
% |
|
|
11.74 |
% |
|
|
11.38 |
% |
|
|
11.99 |
% |
|
|
11.38 |
% |
|
|
|
|
|
|
|
|
|
|
Net Interest Income |
$ |
48,599 |
|
|
$ |
48,393 |
|
|
$ |
56,837 |
|
|
$ |
197,035 |
|
|
$ |
202,887 |
|
Plus: Noninterest
Income |
|
17,208 |
|
|
|
10,835 |
|
|
|
10,519 |
|
|
|
49,858 |
|
|
|
41,862 |
|
Minus: Noninterest
Expense |
|
(29,445 |
) |
|
|
(29,097 |
) |
|
|
(27,434 |
) |
|
|
(130,710 |
) |
|
|
(110,210 |
) |
|
|
|
|
|
|
|
|
|
|
Pretax Pre-Provision
Earnings |
$ |
36,362 |
|
|
$ |
30,131 |
|
|
$ |
39,922 |
|
|
$ |
116,183 |
|
|
$ |
134,539 |
|
|
Adjusted core noninterest income, adjusted core noninterest
expense, adjusted earnings before income taxes, core operational
profitability, core operational diluted earnings per common share
and adjusted core efficiency ratio are non-GAAP financial measures
calculated using GAAP amounts. These adjusted amounts are
calculated by excluding the impact of the wire fraud loss,
corresponding reduction to salaries and employee benefits and
subsequent insurance recoveries for the periods presented below.
Management considers these measures of financial performance to be
meaningful to understanding the company’s core business performance
for these periods.
A reconciliation of these non-GAAP financial measures is
provided below (dollars in thousands, except per share data).
|
Three Months Ended |
|
Twelve Months Ended |
|
Dec. 31, 2023 |
|
Sep. 30, 2023 |
|
Dec. 31, 2022 |
|
Dec. 31, 2023 |
|
Dec. 31, 2022 |
Noninterest Income |
$ |
17,208 |
|
|
$ |
10,835 |
|
|
$ |
10,519 |
|
|
$ |
49,858 |
|
|
$ |
41,862 |
|
Less: Recoveries |
|
(6,300 |
) |
|
|
0 |
|
|
|
0 |
|
|
|
(6,300 |
) |
|
|
0 |
|
Adjusted Core Noninterest
Income |
$ |
10,908 |
|
|
$ |
10,835 |
|
|
$ |
10,519 |
|
|
$ |
43,558 |
|
|
$ |
41,862 |
|
|
|
|
|
|
|
|
|
|
|
Noninterest Expense |
$ |
29,445 |
|
|
$ |
29,097 |
|
|
$ |
27,434 |
|
|
$ |
130,710 |
|
|
$ |
110,210 |
|
Less: Wire Fraud Loss |
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
(18,058 |
) |
|
|
0 |
|
Plus: Salaries and Employee
Benefits (1) |
|
(453 |
) |
|
|
0 |
|
|
|
0 |
|
|
|
1,397 |
|
|
|
0 |
|
Adjusted Core Noninterest
Expense |
$ |
28,992 |
|
|
$ |
29,097 |
|
|
$ |
27,434 |
|
|
$ |
114,049 |
|
|
$ |
110,210 |
|
|
|
|
|
|
|
|
|
|
|
Earnings Before Income
Taxes |
$ |
36,062 |
|
|
$ |
29,731 |
|
|
$ |
30,964 |
|
|
$ |
110,333 |
|
|
$ |
125,164 |
|
Adjusted Core Impact: |
|
|
|
|
|
|
|
|
|
Noninterest Income |
|
(6,300 |
) |
|
|
0 |
|
|
|
0 |
|
|
|
(6,300 |
) |
|
|
0 |
|
Noninterest Expense |
|
453 |
|
|
|
0 |
|
|
|
0 |
|
|
|
16,661 |
|
|
|
0 |
|
Total Adjusted Core
Impact |
|
(5,847 |
) |
|
|
0 |
|
|
|
0 |
|
|
|
10,361 |
|
|
|
0 |
|
Adjusted Earnings Before
Income Taxes |
|
30,215 |
|
|
|
29,731 |
|
|
|
30,964 |
|
|
|
120,694 |
|
|
|
125,164 |
|
Tax Effect |
|
(4,996 |
) |
|
|
(4,479 |
) |
|
|
(4,987 |
) |
|
|
(19,119 |
) |
|
|
(21,347 |
) |
Core Operational Profitability
(2) |
$ |
25,219 |
|
|
$ |
25,252 |
|
|
$ |
25,977 |
|
|
$ |
101,575 |
|
|
$ |
103,817 |
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per
Share |
$ |
1.16 |
|
|
$ |
0.98 |
|
|
$ |
1.01 |
|
|
$ |
3.65 |
|
|
$ |
4.04 |
|
Impact of Wire Fraud Loss, Net
of Recoveries |
|
(0.18 |
) |
|
|
0.00 |
|
|
|
0.00 |
|
|
|
0.30 |
|
|
|
0.00 |
|
Core Operational Diluted
Earnings Per Common Share |
$ |
0.98 |
|
|
$ |
0.98 |
|
|
$ |
1.01 |
|
|
$ |
3.95 |
|
|
$ |
4.04 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted Core Efficiency
Ratio |
|
48.72 |
% |
|
|
49.13 |
% |
|
|
40.73 |
% |
|
|
47.40 |
% |
|
|
45.03 |
% |
(1) Long-term,
incentive-based compensation accruals were reduced as a result of
the wire fraud loss.(2) Core operational
profitability was $4.4 million lower and $7.8 million higher than
reported net income for the three months and twelve months ended
December 31, 2023, respectively.
ContactLisa M. O’NeillExecutive
Vice President and Chief Financial Officer (574)
267-9125lisa.oneill@lakecitybank.com
Lakeland Financial (NASDAQ:LKFN)
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