Saturday, March 6th, 2021

Lake City Bank reports strong performance

Posted: Friday, May 9, 2014

Lakeland Financial Corporation (Nasdaq Global Select/LKFN), parent company of Lake City Bank, this week reported net income of $9.9 million for the first quarter of 2014, an increase of 7% versus $9.2 million for the first quarter of 2013.  Diluted net income per common share increased 5% to $0.59 versus $0.56 for the comparable period of 2013.

David M. Findlay, president and chief executive officer, commented, “Led by another quarter of strong loan growth, we are pleased with our operating performance. We’re particularly encouraged by the strengthening economic indicators in our Indiana markets as our core lending business in the commercial and industrial sector grew by $43 million in the quarter.”

Earnings for the first quarter of 2014 were negatively impacted by a non-cash provision for state income tax expense of $431,000, which resulted from a revaluation of the company’s state deferred tax items.  During the first quarter of 2014, the Indiana legislature approved new tax rates for financial institutions. The tax rate, currently 8.0%, is scheduled to drop to 6.5% for 2017. The new legislation further reduces the rate to 4.9%, phased-in beginning in 2019. This lower state tax rate going forward will reduce the benefit provided by the company’s existing deferred tax items.

Excluding the effect of the non-cash adjustment, net income for the three months ended March 31, 2014 was $10.3 million, representing an increase of 12% over the comparable period of 2013.  Diluted net income per share would have been $0.62 for the three month period ended March 31, 2014, representing an increase of 11% over the comparable period in 2013.

As previously announced, the board of directors approved a cash dividend for the first quarter of $0.21 per share, payable on May 5, 2014, to shareholders of record as of April 25, 2014.  The quarterly dividend represents an 11% increase over the quarterly dividends paid for each quarter of 2013.

“This double digit increase in our dividend reflects our confidence in the strength and quality of our earnings and the extremely strong capital structure we have built through long-term and consistent performance,” observed Findlay.

The company’s net interest margin was 3.38% in the first quarter of 2014, up from 3.17% for the first quarter of 2013. Further, the net interest margin improved from 3.33% in the fourth quarter of 2013.  Despite downward pressure on loan yields and the prolonged low interest rate environment, the company improved its net interest margin in each of the past five quarters as a result of declines in deposit rates and overall funding costs and improvement in the investment portfolio yields.

Findlay added, “As a result of our strong capital structure, we are in a great position to continue our Indiana growth strategy.  During the quarter, we experienced loan growth across all of our Indiana markets and believe that our reputation and positioning as a smartly aggressive commercial lender has further strengthened as we start the year.”