EX-99.1 2 lkfn-20250425exhibit991.htm EX-99.1 Document
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Exhibit 99.1

NEWS FROM LAKELAND FINANCIAL CORPORATION
FOR IMMEDIATE RELEASE
 
Contact
Lisa M. O’Neill
Executive Vice President and Chief Financial Officer
(574) 267-9125
lisa.oneill@lakecitybank.com
 
Lakeland Financial Reports a 12% Increase in Net Interest Income and Organic Loan Growth of 4%

Warsaw, Indiana (April 25, 2025) – Lakeland Financial Corporation (Nasdaq Global Select/LKFN), parent company of Lake City Bank, today reported net income of $20.1 million for the three months ended March 31, 2025, which represents a decrease of $3.3 million, or 14%, compared with net income of $23.4 million for the three months ended March 31, 2024. Diluted earnings per share were $0.78 for the first quarter of 2025 and decreased $0.13, or 14%, compared to $0.91 for the first quarter of 2024. On a linked quarter basis, net income decreased $4.1 million, or 17%, to $24.2 million. Diluted earnings per share decreased $0.16, or 17%, from $0.94 on a linked quarter basis.

Pretax pre-provision earnings, which is a non-GAAP measure, were $31.0 million for the three months ended March 31, 2025, an increase of $1.7 million, or 6%, compared to $29.3 million for the three months ended March 31, 2024.

"Our first quarter results are highlighted by double digit growth in net interest income and strong net interest margin expansion," stated David M. Findlay, Chairman and CEO. "Further, we continued to experience healthy loan growth that was funded with equally positive deposit growth. The Lake City Bank team delivered encouraging operating results in the quarter."

Quarterly Financial Performance
 
First Quarter 2025 versus First Quarter 2024 highlights:
•Tangible book value per share grew by $1.80, or 7%, to $26.85
•Average loans grew by $214.9 million, or 4%, to $5.19 billion
•Core deposits grew by $402.5 million, or 7%, to $5.83 billion
•Net interest margin improved 25 basis points to 3.40% versus 3.15%
•Net interest income increased by $5.5 million, or 12%
•Revenue grew by 6% from $60.0 million to $63.8 million
•Provision expense of $6.8 million, compared to $1.5 million
•Watch list loans as a percentage of total loans increased to 4.13% from 3.67%
•Pretax, pre-provision earnings increased by $1.7 million, or 6%
•Common equity tier 1 capital improved to 14.51%, compared to 14.21%
•Tangible capital ratio improved to 10.09%, compared to 9.80%
•Average equity increased by $51.0 million, or 8%

First Quarter 2025 versus Fourth Quarter 2024 highlights:
•Tangible book value per share grew by $0.38, or 1%, to $26.85
•Average loans grew by $99.3 million, or 2%, to $5.19 billion
•Net interest margin improved 15 basis points to 3.40% versus 3.25%
•Net interest income increased by $1.2 million, or 2%
•Provision expense of $6.8 million, compared to $3.7 million
•Watch list loans as a percentage of total loans remained at 4.13%
•Pretax, pre-provision earnings decreased $1.9 million, or 6%
•Common equity tier 1 capital of 14.51%, compared to 14.64%
•Tangible capital ratio of 10.09%, compared to 10.19%

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Capital Strength

The company’s total capital as a percentage of risk-weighted assets improved to 15.77% at March 31, 2025, compared to 15.46% at March 31, 2024, and down from 15.90% at December 31, 2024. These capital levels significantly exceeded the 10.00% regulatory threshold required to be characterized as "well capitalized" and reflect the company's robust capital base.

The company’s tangible common equity to tangible assets ratio, which is a non-GAAP financial measure, improved to 10.09% at March 31, 2025, compared to 9.80% at March 31, 2024, and down from 10.19% at December 31, 2024. Unrealized losses from available-for-sale investment securities were $188.3 million at March 31, 2025, compared to $189.9 million at March 31, 2024 and $191.1 million at December 31, 2024. 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, improved to 12.19% at March 31, 2025, compared to 12.03% at March 31, 2024, and down from 12.37% at December 31, 2024.

As announced on April 8, 2025, the board of directors approved a cash dividend for the first quarter of $0.50 per share, payable on May 5, 2025, to shareholders of record as of April 25, 2025. The first quarter dividend per share represents a 4% increase from the $0.48 dividend per share paid for the first quarter of 2024. The board of directors also reauthorized and extended the company's share repurchase program through April 30, 2027 with remaining aggregate purchase price authority of $30.0 million. The company anticipates activating the share repurchase program during the second quarter of 2025.

Kristin L. Pruitt, President, commented "We believe that the recent stock price performance, driven by the impact of tariff activity, provides us with an opportunity to return capital to shareholders at attractive prices through our repurchase plan. Further, our strong capital levels continue to provide capacity for organic loan growth in our Indiana markets. Our capital position also supports our continued growth in the dividend paid to shareholders."

Loan Portfolio

Average total loans of $5.19 billion in the first quarter of 2025 increased $214.9 million, or 4%, from $4.97 billion for the first quarter of 2024, and increased $99.3 million, or 2%, from $5.09 billion for the fourth quarter of 2024. Total loans, net of deferred loan fees, increased by $224.8 million, or 4%, from $5.00 billion as of March 31, 2024, to $5.23 billion as of March 31, 2025. The increase in loans occurred across much of the portfolio with our commercial real estate and multi-family residential loan portfolio growing by $143.4 million, or 6%, our commercial and industrial loan portfolio growing by $46.3 million, or 3%, our consumer 1-4 family mortgage loans portfolio growing by $39.7 million, or 9%, and our agri-business and agricultural loan portfolio growing by $15.9 million, or 4%. These increases were offset by a decrease to other commercial loans of $25.4 million, or 21%. On a linked quarter basis, total loans, net of deferred loan fees, increased by $104.9 million, or 2%, from $5.12 billion at December 31, 2024. The linked quarter increase was primarily a result of growth in total commercial and industrial loans of $72.7 million, or 5%, growth in total commercial real estate and multi-family residential loans of $28.3 million, or 1%, and growth in our consumer 1-4 family mortgage loans portfolio of $10.0 million, or 2%.

Commercial loan originations for the first quarter included approximately $365.0 million in loan originations, offset by approximately $268.0 million in commercial loan pay downs. Line of credit usage increased to 43% as of March 31, 2025, compared to 39% at March 31, 2024 and 41% as of December 31, 2024. Total available lines of credit contracted by $153.0 million, or 3%, as compared to a year ago, and line usage increased by $122.0 million, or 7%, over that period. The company has limited exposure to commercial office space borrowers, all of which are in the bank’s Indiana markets. Loans totaling $100.6 million for this sector represented 2% of total loans at March 31, 2025, a decrease of $1.1 million, or 1%, from December 31, 2024. Commercial real estate loans secured by multi-family residential properties and secured by non-farm non-residential properties were approximately 214% of total risk-based capital at March 31, 2025.

"We are encouraged by the continued organic loan growth during the quarter. In particular, we are pleased to see the upward trend in commercial line utilization, which reached 43% in the first quarter compared to 39% a year ago. Commercial and Industrial loan growth was a highlight this quarter and positively impacted our commercial line utilization," added Findlay. "Linked quarter loan growth was largely driven by expansion in working capital lines of credit loans and construction and land development loans."

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Diversified Deposit Base

The bank's diversified deposit base has grown on a year over year basis and on a linked quarter basis.

DEPOSIT DETAIL
(unaudited, in thousands)
March 31, 2025December 31, 2024March 31, 2024
Retail$1,787,992 30.0 %$1,780,726 30.2 %$1,770,007 31.5 %
Commercial2,336,910 39.2 2,269,049 38.4 2,117,536 37.7 
Public funds1,709,883 28.7 1,809,631 30.7 1,544,775 27.5 
Core deposits5,834,785 97.9 5,859,406 99.3 5,432,318 96.7 
Brokered deposits125,409 2.1 41,560 0.7 185,767 3.3 
Total$5,960,194 100.0 %$5,900,966 100.0 %$5,618,085 100.0 %

Total deposits increased $342.1 million, or 6%, from $5.62 billion as of March 31, 2024, to $5.96 billion as of March 31, 2025. The increase in total deposits was driven by an increase in core deposits (which excludes brokered deposits) of $402.5 million, or 7%. Total core deposits at March 31, 2025 were $5.83 billion and represented 98% of total deposits, as compared to $5.43 billion and 97% of total deposits at March 31, 2024. Brokered deposits were $125.4 million, or 2% of total deposits, at March 31, 2025, compared to $185.8 million, or 3% of total deposits, at March 31, 2024.

The increase in core deposits since March 31, 2024, reflects growth in all three core deposit components. Commercial deposits grew annually by $219.4 million, or 10%, to $2.34 billion. Commercial deposits as a percentage of total deposits expanded to 39%, up from 38%. Public funds deposits grew annually by $165.1 million, or 11%, to $1.71 billion. Public funds deposits as a percentage of total deposits was 29%, up from 28%. Growth in public funds was positively impacted by the addition of new public funds customers in the Lake City Bank footprint, including their operating accounts. Retail deposits expanded by $18.0 million, or 1%, to $1.79 billion. Retail deposits as a percentage of total deposits was 30% of total deposits, down from 32%.

On a linked quarter basis, total deposits increased $59.2 million, or 1%, from $5.90 billion at December 31, 2024, to $5.96 billion at March 31, 2025. Core deposits decreased by $24.6 million, or less than 1%, while brokered deposits increased by $83.8 million, or 202%. The linked quarter reduction in core deposits resulted primarily from a seasonal decrease in public funds deposits of $99.7 million, or 6%. Offsetting this increase was an increase in commercial deposits of $67.9 million, or 3%, and an increase in retail deposits of $7.3 million, or less than 1%.

"Annual core deposit growth of 7% continues to provide liquidity to fund loan growth. We continue to see opportunities to gain market share in our Indiana footprint," noted Lisa M. O'Neill, Executive Vice President and Chief Financial Officer. "Our diversified funding base is stable, and average checking account balances continue to maintain liquidity in excess of pre-pandemic levels."

Average total deposits were $5.87 billion for the first quarter of 2025, an increase of $244.3 million, or 4%, from $5.63 billion for the first quarter of 2024. Average interest-bearing deposits drove the increase in average total deposits and increased by $260.1 million, or 6%. Contributing to the overall growth of interest-bearing deposits was an increase to average interest-bearing checking accounts of $439.5 million, or 14%. Offsetting this increase was a reduction in average time deposits of $167.7 million, or 17%, and a decrease to average savings deposits of $11.8 million, or 4%. Average noninterest-bearing demand deposits decreased by $15.8 million, or 1%.

On a linked quarter basis, average total deposits decreased by $136.4 million, or 2%, from $6.01 billion for the fourth quarter of 2024 to $5.87 billion for the first quarter of 2025. Average interest bearing deposits drove the decrease to total average deposits, which decreased by $112.8 million, or 2%. Driving the decrease to average interest bearing deposits were decreases to total average time deposits of $102.7 million, or 11%, and interest bearing checking accounts of $19.0 million, or 1%. Average noninterest bearing demand deposits decreased by $23.6 million, or 2%.

Checking account trends as of March 31, 2025 compared to March 31, 2024, include growth of $222.5 million, or 17%, in aggregate public fund checking account balances, growth of $212.3 million, or 11%, in aggregate commercial checking account balances, and growth of $35.5 million, or 4%, in aggregate retail checking account balances. The number of accounts has also
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grown for all three segments, with growth of 7% for public funds accounts, 2% for commercial accounts and 1% for retail accounts during the prior twelve months.

Deposits not covered by FDIC deposit insurance as a percentage of total deposits were 57% as of March 31, 2025, compared to 62% at December 31, 2024, and 54% at March 31, 2024, reflecting changes in core deposits and growth in public fund deposits over those periods. Deposits not covered by FDIC deposit insurance or the Indiana Public Deposit Insurance Fund (which insures public funds deposits in Indiana), were 29% of total deposits at March 31, 2025, compared to 32% at December 31, 2024, and 27% at March 31, 2024. At March 31, 2025, 98% of deposit accounts had deposit balances less than $250,000.

Net Interest Margin

Net interest margin was 3.40% for the first quarter of 2025, representing a 25 basis point increase from 3.15% for the first quarter of 2024. This improvement was driven by a reduction in the company's funding costs, with interest expense as a percentage of average earning assets falling by 45 basis points from 2.82% for the first quarter of 2024 to 2.37% for the first quarter of 2025. Offsetting the decrease in funding costs was a decrease to earning asset yields of 20 basis points from 5.97% for the first quarter of 2024 to 5.77% for the first quarter of 2025.

Linked quarter net interest margin expanded by 15 basis points to 3.40% for the first quarter of 2025, compared to 3.25% for the fourth quarter of 2024. Interest expense as a percentage of average earning assets decreased 19 basis points from 2.56% to 2.37% on a linked quarter basis. Average earning asset yields decreased by 4 basis points from 5.81% to 5.77% on a linked quarter basis. The easing of monetary policy by the Federal Reserve Bank, which began in September of 2024, drove the reduction in funding costs that provided for the net interest margin expansion through deposit repricing. Notably, the deposit mix shift from noninterest bearing deposits to interest bearing deposits experienced by the company during the previous monetary tightening cycle has stabilized with noninterest bearing deposits representing 22% of total deposits at March 31, 2025, March 31, 2024 and December 31, 2024.

"We continue to see improvements in net interest margin due to the Federal Reserve Bank's rate easing cycle. Our deposit costs have declined more than loan yields resulting in year over year improvements in net interest margin of 25 basis points and linked quarter improvements of 15 basis points," stated O'Neill. "Net interest margin expansion combined with healthy loan growth has contributed to double digit growth in net interest income."

The loan beta for the current rate-easing cycle is 37% compared to the deposit beta of 55%. The cumulative loan beta, which measures the sensitivity of a bank's average loan yield to changes in short-term interest rates, was 56% for the recent rate-tightening cycle. The cumulative deposit beta, which measures the sensitivity of a bank's deposit cost to changes in short-term interest rates, was 54% for the recent rate-tightening cycle.

Net interest income was $52.9 million for the first quarter of 2025, representing an increase of $5.5 million, or 12%, as compared to the first quarter of 2024. Net interest income for the first quarter of 2025 benefited from a decrease in deposit interest expense of $4.7 million and a decrease in borrowings interest expense of $1.3 million. Offsetting these effects on net interest income was a decrease in loan interest of $910,000. On a linked quarter basis, net interest income increased $1.2 million, or 2%, from $51.7 million for the fourth quarter of 2024. On a linked quarter basis, the increase to net interest income was driven by a reduction in interest expense of $4.1 million and offset by a reduction in interest income of $2.9 million.
Asset Quality

The company recorded a provision for credit losses of $6.8 million in the first quarter of 2025, an increase of $5.3 million, as compared to $1.5 million in the first quarter of 2024. On a linked quarter basis, the provision expense increased by $3.1 million, from $3.7 million for the fourth quarter of 2024. Provision expense during the first quarter of 2025 was primarily attributable to an increase in the specific allocation for the previously disclosed $43.3 million nonperforming credit to an industrial company in Northern Indiana.

The allowance for credit loss reserve to total loans was 1.77% at March 31, 2025, up from 1.46% at March 31, 2024, and 1.68% at December 31, 2024. Net charge offs in the first quarter of 2025 were $327,000 compared to $312,000 in the first quarter of 2024 and $1.4 million during the linked fourth quarter of 2024. Annualized net charge offs to average loans were 0.03% for the first quarter of 2025, compared to 0.03% for the first quarter of 2024, and 0.11% for the linked fourth quarter of 2024.
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Nonperforming assets increased $42.6 million, or 280%, to $57.9 million as of March 31, 2025, versus $15.2 million as of March 31, 2024. On a linked quarter basis, nonperforming assets increased $1.0 million, or 2%, compared to $56.9 million as of December 31, 2024. The ratio of nonperforming assets to total assets at March 31, 2025 increased to 0.84% from 0.23% at March 31, 2024, and decreased from 0.85% at December 31, 2024. The increase in nonperforming assets was primarily driven by the aforementioned credit.

Total individually analyzed and watch list loans increased by $32.3 million, or 18%, to $215.6 million as of March 31, 2025, versus $183.3 million as of March 31, 2024. On a linked quarter basis, total individually analyzed and watch list loans increased by $4.4 million, or 2%, from $211.1 million at December 31, 2024. The linked quarter increase in total individually analyzed and watch list loans was primarily driven by the addition of five commercial relationships to the watch list with aggregate balances of $11.5 million and offset by watch list removals of two relationships with aggregate balances of $8.0 million. Watch list loans as a percentage of total loans were 4.13% at March 31, 2025, an increase of 46 basis points compared to 3.67% at March 31, 2024, and unchanged from December 31, 2024.

"Asset quality remains stable with watch list loans as a percentage of total loans at 4.13%," commented Findlay. "It is premature to comment on the impact of the tariff activity on our borrowers' businesses and we are actively talking with our clients to understand the impact of this trade policy activity. As part of our internal credit administration and loan review process, we initiated a detailed plan to identify and analyze specific industries and clients that may be more sensitive to the effects of tariffs. As part of this process, our credit team is aggregating and segmenting direct and indirect exposure that our commercial and industrial borrowers have with international trading partners."

Investment Portfolio Overview

Total investment securities were $1.13 billion at March 31, 2025, reflecting a decrease of $12.0 million, or 1%, as compared to $1.14 billion at March 31, 2024. On a linked quarter basis, investment securities increased $9.9 million, or 1%, due primarily to security purchases of $22.2 million, offset by improvement in the fair market value of available-for-sale securities of $2.8 million, and cash flows from calls, paydowns and maturities of $14.7 million. Investment securities represented 17% of total assets on March 31, 2025, March 31, 2024 and December 31, 2024. The company anticipates receiving principal and interest cash flows of approximately $82.3 million during the remainder of 2025 from the investment securities portfolio and plans to use that liquidity to fund loan growth and reinvestment of investment securities cash flows. Tax equivalent adjusted effective duration for the investment portfolio was 5.9 years at March 31, 2025, compared to 6.6 years at March 31, 2024 and 6.0 years at December 31, 2024.

Noninterest Income

The company’s noninterest income decreased $1.7 million, or 13%, to $10.9 million for the first quarter of 2025, compared to $12.6 million for the first quarter of 2024. Adjusted core noninterest income, a non-GAAP financial measure that excludes the effect of the insurance recovery recorded during the first quarter of 2024, was $11.6 million for the first quarter of 2024, a decrease of $684,000, or 6%, compared to $10.9 million for the first quarter of 2025. Wealth advisory fees increased $412,000, or 17%, driven by growth in customers and assets under management. Deposit fees increased $83,000, or 3%, driven primarily by growth in our treasury management services. Other income decreased $1.3 million, or 61%. Other income during the first quarter of 2024 benefited from a $1.0 million insurance recovery related to the wire fraud loss from 2023 and death benefits received from the company's bank owned life insurance program. Bank owned life insurance income decreased $714,000, or 69%, primarily due to a reduction in the market performance of the company's variable bank owned life insurance policies, which are tied to the equity markets.

Noninterest income for the first quarter of 2025 decreased by $948,000, or 8%, on a linked quarter basis from $11.9 million during the fourth quarter of 2024. Wealth advisory fees increased by $168,000, or 6%. The linked quarter decrease in noninterest income was impacted by a decrease in bank owned life insurance income, which decreased $894,000, or 74%, due to market performance of the company's variable bank owned life insurance policies.

"The growth of our wealth advisory business continues to positively impact revenue growth with 17% improvement in fees on a year over year basis," added Findlay. "We continue to focus on our fee-based businesses that contribute to noninterest income and revenue growth."

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Noninterest Expense

Noninterest expense increased $2.1 million, or 7%, to $32.8 million for the first quarter of 2025, compared to $30.7 million during the first quarter of 2024. Salaries and benefits expense increased by $1.1 million, or 6%, driven by performance-based incentive compensation expense of $1.3 million and salary expense of $524,000. These increases were offset by reduced deferred compensation expense of $687,000, which moves in tandem with the market performance of the company's variable bank owned life insurance. Other expense increased by $400,000, or 18%, from increased customer reimbursements for counterfeit checks and account takeover wire fraud losses. Data processing fees and supplies expense increased $426,000, or 11%, from continued investment in customer-facing and operational technology solutions.

On a linked quarter basis, noninterest expense increased by $2.1 million, or 7%, from $30.7 million during the fourth quarter of 2024. Salaries and employee benefits increased by $641,000, or 4%, due to merit-based increases for salaries, incentive pay, and annual health insurance benefits that are funded at the beginning of each year. Data processing fees and supplies expense increased $523,000, or 14%. Corporate and business development expense increased by $456,000, or 48%, which was primarily driven by an increase in advertising expense of $462,000 during the quarter from the company's seasonal promotional campaigns. Other expense increased $228,000, or 9%.

The company’s efficiency ratio was 51.4% for the first quarter of 2025, compared to 51.2% for the first quarter of 2024 and 48.2% for the linked fourth quarter of 2024.

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." Lake City Bank, a $6.9 billion bank headquartered in Warsaw, Indiana, was founded in 1872 and serves Central and Northern Indiana communities with 54 branch offices and a robust digital banking platform. Lake City Bank's community banking model prioritizes building in-market long-term customer relationships while delivering technology-forward solutions for retail and commercial clients.
 
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 economic, business and market conditions and changes, particularly in our Indiana market area, including prevailing interest rates and the rate of inflation; governmental trade, monetary and fiscal policies; the risks of changes in interest rates on the levels, composition and costs of deposits, loan demand and the values and liquidity of loan collateral, securities and other interest sensitive assets and liabilities; and changes in borrowers’ credit risks and payment behaviors, 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.
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LAKELAND FINANCIAL CORPORATION
FIRST QUARTER 2025 FINANCIAL HIGHLIGHTS
 Three Months Ended
(Unaudited – Dollars in thousands, except per share data)March 31,December 31,March 31,
END OF PERIOD BALANCES202520242024
Assets$6,851,178 $6,678,374 $6,566,861 
Investments1,132,854 1,122,994 1,144,816 
Loans5,223,221 5,117,948 4,997,559 
Allowance for Credit Losses92,433 85,960 73,180 
Deposits5,960,194 5,900,966 5,618,085 
Brokered Deposits125,409 41,560 185,767 
Core Deposits (1)5,834,785 5,859,406 5,432,318 
Total Equity694,509 683,911 647,009 
Goodwill Net of Deferred Tax Assets3,803 3,803 3,803 
Tangible Common Equity (2)690,706 680,108 643,206 
Adjusted Tangible Common
Equity (2)		854,585 846,040 809,395 
AVERAGE BALANCES
Total Assets$6,762,970 $6,795,596 $6,554,468 
Earning Assets6,430,804 6,470,920 6,216,929 
Investments1,136,404 1,134,011 1,158,503 
Loans5,185,918 5,086,614 4,971,020 
Total Deposits5,874,725 6,011,122 5,630,431 
Interest Bearing Deposits4,616,381 4,729,201 4,356,328 
Interest Bearing Liabilities4,716,465 4,729,206 4,532,137 
Total Equity696,053 693,744 645,007 
INCOME STATEMENT DATA
Net Interest Income$52,875 $51,694 $47,416 
Net Interest Income-Fully Tax Equivalent53,983 52,804 48,683 
Provision for Credit Losses6,800 3,691 1,520 
Noninterest Income10,928 11,876 12,612 
Noninterest Expense32,763 30,653 30,705 
Net Income20,085 24,190 23,401 
Pretax Pre-Provision Earnings (2)31,040 32,917 29,323 
PER SHARE DATA
Basic Net Income Per Common Share$0.78 $0.94 $0.91 
Diluted Net Income Per
Common Share		0.78 0.94 0.91 
Cash Dividends Declared Per Common Share0.50 0.48 0.48 
Dividend Payout64.10 %51.06 %52.75 %
Book Value Per Common Share (equity per share issued)$26.99 $26.62 $25.20 
Tangible Book Value Per Common Share (2)26.85 26.47 25.05 
Market Value – High$71.77 $78.61 $73.22 
Market Value – Low58.24 61.10 60.56 
Basic Weighted Average Common Shares Outstanding25,714,818 25,686,276 25,657,063 
Diluted Weighted Average Common Shares Outstanding25,802,865 25,792,460 25,747,643 
Three Months Ended
(Unaudited – Dollars in thousands, except per share data)March 31,December 31,March 31,
KEY RATIOS202520242024
Return on Average Assets1.20 %1.42 %1.44 %
Return on Average Total Equity11.70 13.87 14.59 
Average Equity to Average Assets10.29 10.21 9.84 
Net Interest Margin3.40 3.25 3.15 
Efficiency (Noninterest Expense/Net Interest Income
plus Noninterest Income)
51.35 48.22 51.15 
Loans to Deposits87.64 86.73 88.95 
Investment Securities to Total Assets16.54 16.82 17.43 
Tier 1 Leverage (3)12.30 12.15 12.01 
Tier 1 Risk-Based Capital (3)14.51 14.64 14.21 
Common Equity Tier 1 (CET1) (3)14.51 14.64 14.21 
Total Capital (3)15.77 15.90 15.46 
Tangible Capital (2)10.09 10.19 9.80 
Adjusted Tangible Capital (2)12.19 12.37 12.03 
ASSET QUALITY
Loans Past Due 30 - 89 Days$4,288 $4,273 $3,177 
Loans Past Due 90 Days or More7 28 7 
Nonaccrual Loans57,392 56,431 14,762 
Nonperforming Loans57,399 56,459 14,769 
Other Real Estate Owned284 284 384 
Other Nonperforming Assets193 143 78 
Total Nonperforming Assets57,876 56,886 15,231 
Individually Analyzed Loans81,346 78,647 15,181 
Non-Individually Analyzed Watch List Loans134,218 132,499 168,133 
Total Individually Analyzed and Watch List Loans215,564 211,146 183,314 
Gross Charge Offs508 1,657 504 
Recoveries181 299 192 
Net Charge Offs/(Recoveries)327 1,358 312 
Net Charge Offs/(Recoveries) to Average Loans0.03 %0.11 %0.03 %
Credit Loss Reserve to Loans1.77 1.68 1.46 
Credit Loss Reserve to Nonperforming Loans161.04 152.25 495.51 
Nonperforming Loans to Loans1.10 1.10 0.30 
Nonperforming Assets to Assets0.84 0.85 0.23 
Total Individually Analyzed and Watch List Loans to Total Loans4.13 %4.13 %3.67 %
OTHER DATA
Full Time Equivalent Employees647 643 628 
Offices54 54 53 
(1)Core deposits equals deposits less brokered deposits.
(2)Non-GAAP financial measure - see "Reconciliation of Non-GAAP Financial Measures".
(3)Capital ratios for March 31, 2025 are preliminary until the Call Report is filed.

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CONSOLIDATED BALANCE SHEETS (in thousands, except share data)
March 31,
2025		December 31,
2024
(Unaudited)
ASSETS
Cash and due from banks$89,325 $71,733 
Short-term investments145,899 96,472 
Total cash and cash equivalents235,224 168,205 
Securities available-for-sale, at fair value1,000,875 991,426 
Securities held-to-maturity, at amortized cost (fair value of $109,481 and $113,107, respectively)
131,979 131,568 
Real estate mortgage loans held-for-sale1,295 1,700 
Loans, net of allowance for credit losses of $92,433 and $85,960
5,130,788 5,031,988 
Land, premises and equipment, net60,797 60,489 
Bank owned life insurance113,826 113,320 
Federal Reserve and Federal Home Loan Bank stock21,420 21,420 
Accrued interest receivable28,818 28,446 
Goodwill4,970 4,970 
Other assets121,186 124,842 
Total assets$6,851,178 $6,678,374 
LIABILITIES
Noninterest bearing deposits$1,296,907 $1,297,456 
Interest bearing deposits4,663,287 4,603,510 
Total deposits5,960,194 5,900,966 
Borrowings - Federal Home Loan Bank advances108,200 0 
Accrued interest payable14,699 15,117 
Other liabilities73,576 78,380 
Total liabilities6,156,669 5,994,463 
STOCKHOLDERS’ EQUITY
Common stock: 90,000,000 shares authorized, no par value
26,016,494 shares issued and 25,556,904 outstanding as of March 31, 2025
25,978,831 shares issued and 25,509,592 outstanding as of December 31, 2024
130,243 129,664 
Retained earnings743,650 736,412 
Accumulated other comprehensive income (loss)(163,879)(166,500)
Treasury stock, at cost (459,590 shares and 469,239 shares as of March 31, 2025 and December 31, 2024, respectively)
(15,594)(15,754)
Total stockholders’ equity694,420 683,822 
Noncontrolling interest89 89 
Total equity694,509 683,911 
Total liabilities and equity$6,851,178 $6,678,374 
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CONSOLIDATED STATEMENTS OF INCOME (unaudited - in thousands, except share and per share data)
Three Months Ended March 31,
20252024
NET INTEREST INCOME
Interest and fees on loans
Taxable$81,740 $82,042 
Tax exempt292 900 
Interest and dividends on securities
Taxable3,389 3,039 
Tax exempt3,910 3,947 
Other interest income1,124 1,106 
Total interest income90,455 91,034 
Interest on deposits36,458 41,164 
Interest on short-term borrowings1,122 2,454 
Total interest expense37,580 43,618 
NET INTEREST INCOME52,875 47,416 
Provision for credit losses6,800 1,520 
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES46,075 45,896 
NONINTEREST INCOME
Wealth advisory fees2,867 2,455 
Investment brokerage fees452 522 
Service charges on deposit accounts2,774 2,691 
Loan and service fees2,884 2,852 
Merchant and interchange fee income822 863 
Bank owned life insurance income322 1,036 
Mortgage banking income (loss)(51)52 
Net securities gains (losses)0 (46)
Other income858 2,187 
Total noninterest income10,928 12,612 
NONINTEREST EXPENSE
Salaries and employee benefits17,902 16,833 
Net occupancy expense1,980 1,740 
Equipment costs1,382 1,412 
Data processing fees and supplies4,265 3,839 
Corporate and business development1,406 1,381 
FDIC insurance and other regulatory fees800 789 
Professional fees2,380 2,463 
Other expense2,648 2,248 
Total noninterest expense32,763 30,705 
INCOME BEFORE INCOME TAX EXPENSE24,240 27,803 
Income tax expense4,155 4,402 
NET INCOME$20,085 $23,401 
BASIC WEIGHTED AVERAGE COMMON SHARES25,714,818 25,657,063 
BASIC EARNINGS PER COMMON SHARE$0.78 $0.91 
DILUTED WEIGHTED AVERAGE COMMON SHARES25,802,865 25,747,643 
DILUTED EARNINGS PER COMMON SHARE$0.78 $0.91 

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LAKELAND FINANCIAL CORPORATION
LOAN DETAIL
(unaudited, in thousands)
March 31,
2025		December 31,
2024		March 31,
2024
Commercial and industrial loans:      
Working capital lines of credit loans$716,522 13.7 %$649,609 12.7 %$646,459 12.9 %
Non-working capital loans807,048 15.5 801,256 15.6 830,817 16.6 
Total commercial and industrial loans1,523,570 29.2 1,450,865 28.3 1,477,276 29.5 
Commercial real estate and multi-family residential loans: 
Construction and land development loans623,905 12.0 567,781 11.1 659,712 13.2 
Owner occupied loans804,933 15.4 807,090 15.8 833,410 16.7 
Nonowner occupied loans852,033 16.3 872,671 17.0 744,346 14.9 
Multifamily loans339,946 6.5 344,978 6.7 239,974 4.8 
Total commercial real estate and multi-family residential loans2,620,817 50.2 2,592,520 50.6 2,477,442 49.6 
Agri-business and agricultural loans: 
Loans secured by farmland156,112 3.0 156,609 3.1 167,271 3.3 
Loans for agricultural production227,659 4.3 230,787 4.5 200,581 4.0 
Total agri-business and agricultural loans383,771 7.3 387,396 7.6 367,852 7.3 
Other commercial loans94,927 1.8 95,584 1.9 120,302 2.4 
Total commercial loans4,623,085 88.5 4,526,365 88.4 4,442,872 88.8 
Consumer 1-4 family mortgage loans: 
Closed end first mortgage loans265,855 5.1 259,286 5.1 260,633 5.2 
Open end and junior lien loans217,981 4.2 214,125 4.2 188,927 3.8 
Residential construction and land development loans16,359 0.3 16,818 0.3 10,956 0.2 
Total consumer 1-4 family mortgage loans500,195 9.6 490,229 9.6 460,516 9.2 
Other consumer loans102,254 1.9 104,041 2.0 97,369 2.0 
Total consumer loans602,449 11.5 594,270 11.6 557,885 11.2 
Subtotal5,225,534 100.0 %5,120,635 100.0 %5,000,757 100.0 %
Less:  Allowance for credit losses(92,433) (85,960)(73,180)
Net deferred loan fees(2,313) (2,687)(3,198)
Loans, net$5,130,788  $5,031,988 $4,924,379 
 

LAKELAND FINANCIAL CORPORATION
DEPOSITS AND BORROWINGS
(unaudited, in thousands)
 
March 31,
2025		December 31,
2024		March 31,
2024
Noninterest bearing demand deposits$1,296,907 $1,297,456 $1,254,200 
Savings and transaction accounts:  
Savings deposits293,768 276,179 296,671 
Interest bearing demand deposits3,554,310 3,471,455 3,041,025 
Time deposits:  
Deposits of $100,000 or more602,577 642,776 805,832 
Other time deposits212,632 213,100 220,357 
Total deposits$5,960,194 $5,900,966 $5,618,085 
FHLB advances and other borrowings108,200 0 200,000 
Total funding sources$6,068,394 $5,900,966 $5,818,085 
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LAKELAND FINANCIAL CORPORATION
AVERAGE BALANCE SHEET AND NET INTEREST ANALYSIS
(UNAUDITED) 
Three Months Ended March 31, 2025Three Months Ended December 31, 2024Three Months Ended March 31, 2024
(fully tax equivalent basis, dollars in thousands)Average BalanceInterest IncomeYield (1)/
Rate		Average BalanceInterest IncomeYield (1)/
Rate		Average BalanceInterest IncomeYield (1)/
Rate
Earning Assets         
Loans:         
Taxable (2)(3)$5,160,031 $81,740 6.42 %$5,060,397 $83,253 6.54 %$4,916,943 $82,042 6.71 %
Tax exempt (1)25,887 361 5.66 26,217 364 5.52 54,077 1,118 8.31 
Investments: (1)
Securities1,136,404 8,338 2.98 1,134,011 7,953 2.79 1,158,503 8,035 2.79 
Short-term investments2,964 28 3.83 2,765 29 4.17 2,710 33 4.90 
Interest bearing deposits105,518 1,096 4.21 247,530 2,881 4.63 84,696 1,073 5.10 
Total earning assets$6,430,804 $91,563 5.77 %$6,470,920 $94,480 5.81 %$6,216,929 $92,301 5.97 %
Less:  Allowance for credit losses(87,477)  (84,687)(72,433)  
Nonearning Assets      
Cash and due from banks71,004   67,994 68,584   
Premises and equipment60,523   60,325 57,883   
Other nonearning assets288,116   281,044 283,505   
Total assets$6,762,970   $6,795,596 $6,554,468   
Interest Bearing Liabilities      
Savings deposits$283,888 $42 0.06 %$274,960 $43 0.06 %$295,650 $49 0.07 %
Interest bearing checking accounts3,486,447 28,075 3.27 3,505,470 31,562 3.58 3,046,958 30,365 4.01 
Time deposits:
In denominations under $100,000212,934 1,832 3.49 214,429 1,921 3.56 224,139 1,918 3.44 
In denominations over $100,000633,112 6,509 4.17 734,342 8,150 4.42 789,581 8,832 4.50 
Miscellaneous short-term borrowings99,830 1,122 4.56 5 0 5.30 175,809 2,454 5.61 
  Long-term borrowings254 0 0.00 0 0 0.00 0 0 0.00 
Total interest bearing liabilities$4,716,465 $37,580 3.23 %$4,729,206 $41,676 3.51 %$4,532,137 $43,618 3.87 %
Noninterest Bearing Liabilities      
Demand deposits1,258,344   1,281,921 1,274,103   
Other liabilities92,108   90,725 103,221   
Stockholders' Equity696,053   693,744 645,007   
Total liabilities and stockholders' equity$6,762,970   $6,795,596 $6,554,468   
Interest Margin Recap      
Interest income/average earning assets 91,563 5.77 %94,480 5.81 % 92,301 5.97 %
Interest expense/average earning assets 37,580 2.37 41,676 2.56  43,618 2.82 
Net interest income and margin $53,983 3.40 %$52,804 3.25 % $48,683 3.15 %
 
(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 $1.11 million, $1.11 million and $1.27 million in the three-month periods ended March 31, 2025, December 31, 2024, and March 31, 2024, respectively.
(2)Loan fees, which are immaterial in relation to total taxable loan interest income for the three-month periods ended March 31, 2025, December 31, 2024, and March 31, 2024, are included as taxable loan interest income.
(3)Nonaccrual loans are included in the average balance of taxable loans.
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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 based on 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) ("AOCI"). 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
Mar. 31, 2025Dec. 31, 2024Mar. 31, 2024
Total Equity$694,509 $683,911 $647,009 
Less: Goodwill(4,970)(4,970)(4,970)
Plus: DTA Related to Goodwill1,167 1,167 1,167 
Tangible Common Equity690,706 680,108 643,206 
Market Value Adjustment in AOCI163,879 165,932 166,189 
Adjusted Tangible Common Equity854,585 846,040 809,395 
Assets$6,851,178 $6,678,374 $6,566,861 
Less: Goodwill(4,970)(4,970)(4,970)
Plus: DTA Related to Goodwill1,167 1,167 1,167 
Tangible Assets6,847,375 6,674,571 6,563,058 
Market Value Adjustment in AOCI163,879 165,932 166,189 
Adjusted Tangible Assets7,011,254 6,840,503 6,729,247 
Ending Common Shares Issued25,727,393 25,689,730 25,677,399 
Tangible Book Value Per Common Share$26.85 $26.47 $25.05 
Tangible Common Equity/Tangible Assets10.09 %10.19 %9.80 %
Adjusted Tangible Common Equity/Adjusted Tangible Assets12.19 %12.37 %12.03 %
Net Interest Income$52,875 $51,694 $47,416 
Plus:  Noninterest Income10,928 11,876 12,612 
Minus:  Noninterest Expense(32,763)(30,653)(30,705)
Pretax Pre-Provision Earnings$31,040 $32,917 $29,323 
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Adjusted core noninterest income, 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 based on GAAP amounts. These adjusted amounts are calculated by excluding the impact of insurance recoveries related to the 2023 wire fraud loss 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
Mar. 31, 2025Dec. 31, 2024Mar. 31, 2024
Noninterest Income$10,928 $11,876 $12,612 
Less: Insurance Recovery0 0 (1,000)
Adjusted Core Noninterest Income$10,928 $11,876 $11,612 
Earnings Before Income Taxes$24,240 $29,226 $27,803 
Adjusted Core Impact:
Noninterest Income0 0 (1,000)
Total Adjusted Core Impact0 0 (1,000)
Adjusted Earnings Before Income Taxes24,240 29,226 26,803 
Tax Effect(4,155)(5,036)(4,153)
Core Operational Profitability (1)$20,085 $24,190 $22,650 
Diluted Earnings Per Common Share$0.78 $0.94 $0.91 
Impact of Adjusted Core Items0.00 0.00 (0.03)
Core Operational Diluted Earnings Per Common Share$0.78 $0.94 $0.88 
Adjusted Core Efficiency Ratio51.35 %48.22 %52.02 %

(1)Core operational profitability was $751,000 lower than reported net income for the three months ended March 31, 2024.

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