Open the filing on EDGARNEWS FROM LAKELAND FINANCIAL CORPORATION
Lisa M. O’Neill
Executive Vice President and Chief Financial Officer
Lakeland Financial Reports Record Quarterly Performance with a 24% Increase in Net Income; Annual Net Income Grows by 11% to $103.4 Million, as Net Interest Income Expands by 12%
Warsaw, Indiana (January 26, 2026) - Lakeland Financial Corporation (Nasdaq Global Select/LKFN), parent company of Lake City Bank, today reported record quarterly net income of $29.9 million for the three months ended December 31, 2025, which represents an increase of $5.7 million, or 24%, compared to net income of $24.2 million for the three months ended December 31, 2024. Diluted earnings per share were $1.16 for the fourth quarter of 2025 and increased $0.22, or 23%, compared to $0.94 for the fourth quarter of 2024. On a linked quarter basis, net income increased $3.5 million, or 13%, from $26.4 million. Diluted earnings per share increased $0.13, or 13%, from $1.03 on a linked quarter basis.
The company further reported net income of $103.4 million for the year ended December 31, 2025, versus $93.5 million for 2024, an increase of $9.9 million, or 11%. Diluted earnings per share increased $0.38, or 10%, to $4.01 for the year ended December 31, 2025, versus $3.63 for 2024. Pretax pre-provision earnings, a non-GAAP measure, were $137.4 million for the year ended December 31, 2025, an increase of $8.9 million, or 7%, compared to $128.4 million for the year ended December 31, 2024. Core operational profitability, a non-GAAP measure that excludes the impact of certain non-routine operating events that occurred during 2024, improved by $14.0 million, or 16%, from $89.4 million to $103.4 million for the years ended December 31, 2024 and 2025, respectively.
Pretax pre-provision earnings were $36.4 million for the three months ended December 31, 2025, an increase of $3.4 million, or 10%, compared to $32.9 million for the three months ended December 31, 2024. Pretax pre-provision earnings increased by $2.3 million, or 7%, compared to $34.1 million on a linked quarter basis.
Total revenue was $69.8 million for the fourth quarter of 2025 representing an increase of $6.2 million, or 10%, as compared to the fourth quarter of 2024. On a linked quarter basis, revenue increased by $769,000, or 1%, from $69.0 million in the third quarter of 2025. Total revenue increased by $15.5 million, or 6%, to $269.0 million for the year ended December 31, 2025, as compared to $253.5 million for 2024.
"The Lake City Bank team produced a very strong fourth quarter with exceptional performance metrics that has created good momentum as we move into 2026. We are pleased with double-digit growth of net income compared to the prior year, which was driven by healthy net interest margin expansion and broad-based core revenue growth," commented David M. Findlay, Chairman and CEO. "In 1990, we expanded outside of our home county for the first time. In the 34 years since, our organic growth model has produced compounded annual growth rates of 10% for loans and deposits, 11% for net income and diluted earnings per share and 10% for tangible book value per share. It's a track record of balance sheet growth and strong income metrics that has delivered healthy shareholder performance over a long period of time and we are laser focused on returning balance sheet growth to our historical levels."
Quarterly Financial Performance
Fourth Quarter 2025 versus Fourth Quarter 2024 highlights:
- Return on average equity improved to 15.59%, compared to 13.87%
- Return on average assets improved to 1.70%, compared to 1.42%
- Tangible book value per share grew by $3.40, or 13%, to $29.87
- Average loans grew by $185.1 million, or 4%, to $5.27 billion
- Net interest margin improved 23 basis points to 3.48% versus 3.25%
- Net interest income increased by $5.5 million, or 11%
- Noninterest income increased by $727,000, or 6%
- Revenue improved by 10% from $63.6 million to $69.8 million
- Watch list loans as a percentage of total loans improved to 3.42% from 4.13%
- Nonaccrual loans declined 63% to $20.9 million, compared to $56.4 million
- Common equity tier 1 capital ratio improved to 14.77%, compared to 14.64%
- Total risk-based capital ratio improved to 15.92%, compared to 15.90%
- Tangible capital ratio improved to 10.86%, compared to 10.19%
- Tangible common equity improved by $78.6 million, or 12%
Fourth Quarter 2025 versus Third Quarter 2025 highlights:
- Return on average equity of 15.59%, compared to 14.60%
- Return on average assets of 1.70%, compared to 1.53%
- Tangible book value per share grew by $0.94, or 3%, to $29.87
- Average loans improved by $65.9 million, or 1%, to $5.27 billion
- Core deposits expansion of $74.1 million, or 1%, to $5.92 billion
- Net interest margin of 3.48% versus 3.50%
- Net interest income increased by $1.1 million, or 2%
- Noninterest expense decreased $1.5 million, or 4%
- Tangible common equity improved by $15.0 million, or 2%
Capital Strength
The company’s total capital as a percentage of risk-weighted assets was 15.92% at December 31, 2025, compared to 15.90% at December 31, 2024 and 16.21% at September 30, 2025. 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 10.86% at December 31, 2025, compared to 10.19% at December 31, 2024 and 10.79% at September 30, 2025. Unrealized losses from available-for-sale investment securities were $143.3 million at December 31, 2025, compared to $191.1 million at December 31, 2024 and $159.9 million at September 30, 2025. 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 12.45% at December 31, 2025, compared to 12.37% at December 31, 2024, and 12.57% at September 30, 2025.
As announced on January 13, 2026, the board of directors approved a cash dividend for the fourth quarter of $0.52 per share, payable on February 5, 2026, to shareholders of record as of January 25, 2026. The fourth quarter dividend per share represents a 4% increase from the $0.50 dividend per share paid for the fourth quarter of 2024.
Additionally, the company utilized its share repurchase program during the fourth quarter of 2025 and repurchased 307,590 shares of its common stock for $17.9 million at a weighted average price per share of $58.23. For the year ended December 31, 2025, the company repurchased 337,890 shares of its common stock for $19.6 million at a weighted average price per share of $58.03.
"We are pleased to report high quality income metrics with return on average equity of 15.6% and return on assets of 1.7% for the fourth quarter, while also continuing to grow capital," stated Kristin L. Pruitt, President. "Our fortress balance sheet and strong capital position supports our strategy of continued loan growth and the continued growth of our dividend. With the aggressive activation of our share repurchase program during 2025, particularly during the fourth quarter, we further increased the total return of capital to our shareholders."
Net Interest Margin
Net interest margin was 3.48% for the fourth quarter of 2025, representing a 23 basis point increase from 3.25% for the fourth 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 36 basis points from 2.56% for the fourth quarter of 2024 to 2.20% for the fourth quarter of 2025. Offsetting the decrease in funding costs was a decrease to earning asset yields of 13 basis points from 5.81% for the fourth quarter of 2024 to 5.68% for the fourth quarter of 2025. The easing of monetary policy by the Federal Reserve Bank, which continued through the duration of 2025, favorably impacted the net interest margin as deposits repriced more quickly than loans during the fourth quarter. The cumulative loan beta for the current rate-easing cycle that began in September 2024 is 24% compared to the deposit beta of 40% during this period and has resulted in net interest margin expansion that has benefited net interest income.
Net interest margin contracted by 2 basis points to 3.48% for the fourth quarter of 2025, compared to 3.50% for the linked third quarter of 2025. Average earning asset yields decreased by 19 basis points from 5.87% to 5.68% on a linked quarter basis and interest expense as a percentage of average earning assets decreased 17 basis points from 2.37% to 2.20%. Fourth quarter cost of funds was impacted by seasonal public funds deposits in higher priced deposit products.
Net interest income increased by $24.3 million, or 12%, for the year ended December 31, 2025, as compared to the year ended December 31, 2024. Net interest income was $57.2 million for the fourth quarter of 2025, representing an increase of $5.5 million, or 11%, as compared to the fourth quarter of 2024. On a linked quarter basis, net interest income increased $1.1 million, or 2%, from $56.1 million for the third quarter of 2025.
"Net interest margin improved by 23 basis points during the fourth quarter of 2025 as compared to the fourth quarter of 2024 while the Federal Reserve Bank easing monetary cycle continued. Our disciplined deposit cost repricing strategy offset the decline in loan yields. In addition, new loan origination yields improved compared to yields of fixed rate loan runoff," stated Lisa M. O'Neill, Executive Vice President and Chief Financial Officer. "We experienced the seasonal influx of municipal deposits during the fourth quarter, which offset some of the net interest margin expansion we experienced in the third quarter of 2025. Our neutral interest rate position is expected to provide stability for net interest margin in a higher-for-longer interest rate environment or continued easing by the Federal Reserve Bank in 2026."
Loan Portfolio
Average total loans of $5.27 billion in the fourth quarter of 2025 increased $185.1 million, or 4%, from $5.09 billion for the fourth quarter of 2024 and increased $65.9 million, or 1%, from $5.21 billion for the third quarter of 2025. Average total loans for the year ended December 31, 2025 were $5.22 billion, an increase of $184.1 million, or 4%, from $5.04 billion for the year ended December 31, 2024.
Total loans, excluding deferred fees and costs, increased by $257.2 million, or 5%, from $5.12 billion as of December 31, 2024, to $5.38 billion as of December 31, 2025. The growth in loans occurred across all primary segments within the portfolio, with increases to commercial and industrial loan portfolio of $102.8 million, or 7%, commercial real estate and multi-family residential loans of $74.0 million, or 3%, consumer 1-4 family mortgage loans of $47.0 million, or 10%, agri-business and agricultural loans of $19.5 million, or 5%, other consumer loans of $12.2 million, or 12%, and other commercial loans of $1.8 million, or 2%. On a linked quarter basis, total loans, excluding deferred fees and costs, increased by $126.8 million, or 2%, from $5.25 billion at September 30, 2025. The linked quarter increase occurred across all primary segments within the portfolio, with growth in agri-business and agricultural loans of $66.9 million, or 20%, total commercial and industrial loans of $35.7 million, or 2%, commercial real estate and multi-family residential loans of $11.3 million, or less than 1%, other commercial loans of $5.5 million, or 6%, other consumer loans of $3.8 million, or 3%, and consumer 1-4 family mortgage loans of $3.7 million, or 1%.
"We continued to generate a high volume of gross commercial loan originations during the fourth quarter of $567 million. For the full year of 2025, our team produced gross originations of $1.7 billion," noted Findlay. "Loan growth during 2025 was positively impacted by commercial and industrial loan growth of 7%, or $103 million, which contributed to our organic loan growth increase. Importantly, we experienced healthy commercial and industrial growth from our more mature markets and commercial loans overall grew by 10% on a linked quarter, annualized basis. We're also encouraged that commercial line utilization increased to 44% at December 31, 2025. As we enter 2026, we continue to be focused on increased market share take strategies with our expanding universe of prospects in the commercial banking business."
As noted earlier, total outstanding commercial loans for the fourth quarter included approximately $567.0 million in loan originations, offset by approximately $447.0 million in loan pay downs. Line of credit usage increased to 44% as of December 31, 2025, from 41% at December 31, 2024, and increased from 43% at September 30, 2025. Total available lines of credit expanded by $241.0 million, or 5%, as compared to a year ago, and line usage increased by $257.0 million, or 14%, over that period.
Diversified Deposit Base
The bank's diversified deposit base has grown on a year-over-year basis and core deposits, which exclude brokered deposits, represented 99% of total deposits.
| (in thousands) | December 31, 2025 | September 30, 2025 | December 31, 2024 |
| Retail | $1,763,452 | 29.5% | $1,724,983 | 28.6% | $1,780,726 | 30.2% |
| Commercial | 2,179,999 | 36.5 | 2,288,701 | 38.0 | 2,269,049 | 38.4 |
| Public funds | 1,979,327 | 33.2 | 1,834,987 | 30.5 | 1,809,631 | 30.7 |
| Core deposits | 5,922,778 | 99.2 | 5,848,671 | 97.1 | 5,859,406 | 99.3 |
| Brokered deposits | 50,572 | 0.8 | 175,647 | 2.9 | 41,560 | 0.7 |
| Total | $5,973,350 | 100.0% | $6,024,318 | 100.0% | $5,900,966 | 100.0% |
Total deposits increased $72.4 million, or 1%, from $5.90 billion as of December 31, 2024, to $5.97 billion as of December 31, 2025. The increase in total deposits was primarily driven by an increase in core deposits of $63.4 million, or 1%. Public funds deposits grew annually by $169.7 million, or 9%, to $1.98 billion. Public funds deposits as a percentage of total deposits were 33%, up from 31% a year ago. 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. Commercial deposits contracted annually by $89.1 million, or 4%, to $2.18 billion. Retail deposits contracted by $17.3 million, or 1%, to $1.76 billion.
On a linked quarter basis, total deposits decreased $51.0 million, or 1%, from $6.02 billion at September 30, 2025, to $5.97 billion at December 31, 2025. Core deposits increased by $74.1 million, or 1%, while brokered deposits decreased by $125.1 million, or 71%. The linked quarter growth in core deposits was driven primarily by a seasonal growth in public funds of $144.3 million, or 8%. Additionally, retail deposits increased by $38.5 million, or 2%.
Average total deposits were $6.16 billion for the fourth quarter of 2025, an increase of $144.4 million, or 2%, from $6.01 billion for the fourth quarter of 2024. Average interest bearing deposits drove the increase in average total deposits and increased by $154.3 million, or 3%. Contributing to the overall growth of interest bearing deposits was an increase to average interest-bearing checking accounts of $344.7 million, or 10%. Offsetting this increase was a reduction in average time deposits of $196.1 million, or 21%. Average noninterest-bearing demand deposits decreased by $9.9 million, or 1%, to $1.27 billion.
On a linked quarter basis, average total deposits increased by $126.0 million, or 2%, from $6.03 billion for the third quarter of 2025 to $6.16 billion for the fourth quarter of 2025. Average interest bearing deposits drove the increase to total average deposits, which improved by $98.3 million, or 2%. An increase to interest bearing checking accounts drove the increase to interest bearing deposits, increasing by $118.5 million, or 3%. Offsetting this increase was a decrease in total average time deposits of $16.2 million, or 2%. Average noninterest bearing demand deposits increased by $27.6 million, or 2%.
Checking account growth as of December 31, 2025, compared to December 31, 2024, includes growth of $256.6 million, or 16%, in aggregate public fund checking account balances and growth of $3.3 million, or less than 1%, in aggregate retail checking account balances. Aggregate commercial checking account balances declined by $102.8 million, or 5%. The number of accounts has also grown for all three segments, with growth of 3% for public funds accounts, 2% for commercial accounts and 1% for retail accounts during 2025.
"Deposit growth, together with other sources of on balance sheet liquidity, funded our loan growth during the year. Public fund deposits increased by 9% during 2025 due to continued growth of public fund core operating accounts. In addition, the number of commercial checking accounts increased during 2025," commented O'Neill. "We continue to add functionality to the Lake City Bank digital app to increase usability by our customers. We are encouraged by the continued growth in digital adoption which improved to 53% in 2025 compared to 51% a year ago."
Asset Quality
Provision expense was $11.8 million for the year ended December 31, 2025, a decrease of $5.0 million, or 30%, as compared to $16.8 million during 2024. Provision expense in 2025 was partially driven by the recognition of additional specific allocations related to the downgrade of a previously disclosed commercial relationship. A partial charge off of $28.6 million was recognized during the second quarter of 2025 in conjunction with the disposition of the credit together with a recovery of $800,000 during the fourth quarter of 2025 for the aforementioned credit. The remainder of provision expense was attributable to growth of the loan portfolio and a net increase in specific allocations to other watch list credits. The company recorded no provision expense in the fourth quarter of 2025, compared to provision expense of $3.7 million in the fourth quarter of 2024 and $2.0 million for the linked third quarter of 2025.
The allowance for credit loss reserve to total loans was 1.28% at December 31, 2025, down from 1.68% at December 31, 2024 and 1.30% at September 30, 2025. The decrease in allowance coverage compared to the prior year was primarily driven by the previously disclosed partial charge off that was primarily reserved for in 2024. The company recorded net recoveries of $827,000 in the fourth quarter of 2025, compared to net charge offs of $1.4 million in the fourth quarter of 2024 and $384,000 during the linked third quarter of 2025. Annualized net recoveries to average loans were 0.06% for the fourth quarter of 2025, compared to annualized net charge offs to average loans of 0.11% for the fourth quarter of 2024 and 0.03% for the linked third quarter of 2025.
Nonperforming assets decreased by $36.0 million, or 63%, to $20.9 million as of December 31, 2025, versus $56.9 million as of December 31, 2024. On a linked quarter basis, nonperforming assets increased $1.9 million, or 10%, compared to $19.1 million as of September 30, 2025. The ratio of nonperforming assets to total assets at December 31, 2025 decreased to 0.30% from 0.85% at December 31, 2024, and was up from 0.28% at September 30, 2025.
Total individually analyzed and watch list loans decreased by $27.1 million, or 13%, to $184.0 million as of December 31, 2025, versus $211.1 million as of December 31, 2024. On a linked quarter basis, total individually analyzed and watch list loans increased by $26.8 million, or 17%, from $157.2 million at September 30, 2025. The linked quarter increase in total individually analyzed and watch list loans was driven by net downgrades to the watch list that were primarily concentrated with two unrelated commercial borrowers. Watch list loans as a percentage of total loans were 3.42% at December 31, 2025, a 71 basis point decrease compared to 4.13% at December 31, 2024, and a 42 basis point increase compared to 3.00% at September 30, 2025.
"Asset quality is stable and we are pleased to have ended 2025 with improved asset quality metrics as compared to 2024," commented Findlay. "Our overall asset quality metrics are near historical lows, which is excellent, and we are encouraged by the results of our year-end loan portfolio reviews during which we met with every commercial banker and reviewed their respective portfolios. Our borrowers continue to effectively manage through this period of heightened uncertainty impacted by the evolving state of tariffs and the challenges that accompanies them."
Investment Portfolio Overview
Total investment securities were $1.19 billion at December 31, 2025, reflecting an increase of $62.3 million, or 6%, as compared to $1.12 billion at December 31, 2024. Investment securities represented 17% of total assets on December 31, 2025, unchanged from 17% at December 31, 2024 and September 30, 2025. The company anticipates receiving principal and interest cash flows of approximately $134.5 million during 2026 from the investment securities portfolio and plans to use that liquidity to fund loan growth as well as reinvestments to the investment securities portfolio. Tax equivalent adjusted effective duration for the investment portfolio was 5.9 years at December 31, 2025, compared to 6.0 years at December 31, 2024 and 5.8 years at September 30, 2025.
Noninterest Income
Noninterest income decreased by $8.9 million, or 16%, to $48.0 million for the year ended December 31, 2025, compared to $56.8 million for the prior year. Noninterest income was elevated during the prior year primarily due to the net gain of $9.0 million on the sale of Visa shares and a $1.0 million insurance recovery. Adjusted core noninterest income, a non-GAAP financial measure that excludes the impact of these events, increased by $1.1 million, or 2%, from $46.8 million for the year ended December 31, 2024. Noninterest income for the year ended December 31, 2025, benefited from fee-based service increases to wealth advisory fees of $896,000, or 9%, loan and service fees of $462,000, or 4%, service charges on deposit accounts of $317,000, or 3%, and investment brokerage fees of $304,000, or 16%, as compared to the prior year. Wealth advisory fees growth was driven by continued client relationship expansion and increased assets under management. Commercial service fee growth was the primary contributor for the increase in loan and service fees. The expansion of investment brokerage fees was driven by increased volume and commissions on product mix. Offsetting these increases was a decrease in other income of $1.9 million, or 41%. The decline in other income was primarily attributable to reduced limited partnership income and the insurance recovery of $1.0 million in 2024.
Findlay noted, "Fee-based revenue was strong during 2025, in particular, wealth advisory fees and investment brokerage fees improved by double digit growth. The combined impact of growth in net interest income and core noninterest income during 2025 generated 6% revenue growth year-over-year."
The company’s noninterest income increased $727,000, or 6%, to $12.6 million for the fourth quarter of 2025, compared to $11.9 million for the fourth quarter of 2024. Wealth advisory fees increased $277,000, or 10%, and investment brokerage fees increased $183,000, or 40%. Service fees on deposit accounts expanded $127,000, 4%. Bank owned life insurance increased $111,000, or 9%.
On a linked quarter basis, noninterest income for the fourth quarter of 2025 decreased by $351,000, or 3%, from $13.0 million during the third quarter of 2025. The linked quarter decrease was driven by a decrease to loan and service fees of $434,000, or 13%, and bank owned life insurance income of $240,000, or 15%. Loan and service fee income was elevated in the linked third quarter of 2025 due to the recognition of a loan syndication fee. Bank owned life insurance income decreased primarily from reduced performance for the company's variable bank owned life insurance policies, which trend directionally with the performance of the broader equity markets. Offsetting these declines were increases to wealth advisory fees of $121,000, or 4%, mortgage banking income of $73,000, and interest rate swap fee income of $63,000.
Noninterest Expense
Noninterest expense increased by $6.5 million, or 5%, from $125.1 million to $131.6 million for the year ended December 31, 2024 and 2025, respectively. Salaries and benefits expense increased $8.6 million, or 13%. The primary drivers for the increase to salaries and benefits expense were increased performance-based incentive compensation accruals of $5.3 million and salaries and wages of $3.3 million. Data processing fees and supplies expense increased $1.4 million, or 9%, from continued investment in customer-facing and operational technology solutions, including artificial intelligence. Net occupancy expense increased $659,000, or 10%, from the continued expansion of the bank's branch and operational networks, with the 55th branch location opening in Westfield, Indiana during 2025. Offsetting these increases was a decrease in professional fees of $1.3 million, or 14%, and other expense of $3.1 million, or 24%. Legal accruals of $4.5 million were incurred in 2024 that were related to a one-time matter, previously disclosed. Adjusted core noninterest expense, a non-GAAP financial measure, increased $11.1 million, or 9%, to $131.6 million from $120.5 million for the year ended December 31, 2025 and 2024, respectively.
Noninterest expense increased $2.8 million, or 9%, to $33.4 million for the fourth quarter of 2025, compared to $30.7 million during the fourth quarter of 2024. Salaries and benefits expense increased by $2.6 million, or 15%, primarily the result of increased accruals related to performance-based incentive compensation plans as strong year-to-date performance impacting these accruals. Data processing fees and supplies expense increased $259,000, or 7%. Net occupancy expense increased $214,000, or 13%. Corporate and business development expense increased $198,000, or 21%. Offsetting these increases was a decrease to professional fees of $389,000, or 17%.
On a linked quarter basis, noninterest expense decreased by $1.5 million, or 4%, from $35.0 million during the third quarter of 2025. The primary driver behind the linked quarter decrease to noninterest expense was a decrease to other expense of $573,000, or 20%. This decrease was due to the timing of semi-annual stock-based compensation awards to directors, that were paid in July. Salaries and employee benefits expense decreased $533,000, or 3%. Corporate and business development expenses decreased $415,000, or 27%.
The company's efficiency ratio for the year ended December 31, 2025, was 48.9%, compared to 49.3% for the year ended December 31, 2024. The company's adjusted core efficiency ratio, a non-GAAP financial measure, was 48.9% for the year ended December 31, 2025, as compared to 49.5% for the year ended December 31, 2024.
The company’s efficiency ratio was 47.9% for the fourth quarter of 2025, compared to 48.2% for the fourth quarter of 2024 and 50.7% for the linked third quarter of 2025.
"The growth in noninterest expense during 2025 reflects the addition of revenue producing team members in commercial banking, wealth advisory and private banking teams that support our organic loan and deposit growth strategies. We also continued to invest in our branch footprint with a focus on adding branches in the Indianapolis market," stated Findlay. "Our low efficiency ratio highlights our disciplined growth strategy and the impact of revenue outpacing expense growth. We have plans for accelerated branch development in Indianapolis as well as South Bend, Fort Wayne and Elkhart over the next several years as we continue to grow market share in our Indiana footprint."
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 $7.0 billion bank headquartered in Warsaw, Indiana, was founded in 1872 and serves Central and Northern Indiana communities with 55 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.
Forward-looking statements notice
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, 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 the company's operating environment or its 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; including any effects resulting from international government conflicts; 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.
LAKELAND FINANCIAL CORPORATION
FOURTH QUARTER 2025 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 | | 2025 | | 2025 | | 2024 | | 2025 | | 2024 |
| Assets | $6,990,022 | | $6,895,028 | | $6,678,374 | | $6,990,022 | | $6,678,374 | |
| Investments | 1,185,270 | | 1,164,737 | | 1,122,994 | | 1,185,270 | | 1,122,994 | |
| Loans | 5,375,349 | | 5,248,619 | | 5,117,948 | | 5,375,349 | | 5,117,948 | |
| Allowance for Credit Losses | 68,995 | | 68,168 | | 85,960 | | 68,995 | | 85,960 | |
| Deposits | 5,973,350 | | 6,024,318 | | 5,900,966 | | 5,973,350 | | 5,900,966 | |
| Brokered Deposits | 50,572 | | 175,647 | | 41,560 | | 50,572 | | 41,560 | |
| Core Deposits (1) | 5,922,778 | | 5,848,671 | | 5,859,406 | | 5,922,778 | | 5,859,406 | |
| Total Equity | 762,492 | | 747,503 | | 683,911 | | 762,492 | | 683,911 | |
| Goodwill Net of Deferred Tax Assets | 3,803 | | 3,803 | | 3,803 | | 3,803 | | 3,803 | |
| Tangible Common Equity (2) | 758,689 | | 743,700 | | 680,108 | | 758,689 | | 680,108 | |
| Adjusted Tangible Common Equity (2) | 885,298 | | 883,865 | | 846,040 | | 885,298 | | 846,040 | |
| AVERAGE BALANCES | | | | | |
| Total Assets | $6,993,954 | | $6,850,671 | | $6,795,596 | | $6,878,627 | | $6,662,718 | |
| Earning Assets | 6,641,584 | | 6,492,640 | | 6,470,920 | | 6,534,373 | | 6,328,498 | |
| Investments | 1,175,389 | | 1,127,094 | | 1,134,011 | | 1,141,189 | | 1,134,979 | |
| Loans | 5,271,687 | | 5,205,833 | | 5,086,614 | | 5,223,458 | | 5,039,406 | |
| Total Deposits | 6,155,526 | | 6,029,557 | | 6,011,122 | | 6,039,821 | | 5,836,025 | |
| Interest Bearing Deposits | 4,883,496 | | 4,785,176 | | 4,729,201 | | 4,785,109 | | 4,578,219 | |
| Interest Bearing Liabilities | 4,893,050 | | 4,818,115 | | 4,729,206 | | 4,829,098 | | 4,644,553 | |
| Total Equity | 760,954 | | 717,428 | | 693,744 | | 718,029 | | 662,087 | |
| INCOME STATEMENT DATA | | | | | |
| Net Interest Income | $57,193 | | $56,073 | | $51,694 | | $221,017 | | $196,679 | |
| Net Interest Income-Fully Tax Equivalent | 58,307 | | 57,180 | | 52,804 | | 225,458 | | 201,363 | |
| Provision for Credit Losses | 0 | | 2,000 | | 3,691 | | 11,800 | | 16,750 | |
| Noninterest Income | 12,603 | | 12,954 | | 11,876 | | 47,971 | | 56,844 | |
| Noninterest Expense | 33,445 | | 34,965 | | 30,653 | | 131,605 | | 125,084 | |
| Net Income | 29,906 | | 26,404 | | 24,190 | | 103,361 | | 93,478 | |
| Pretax Pre-Provision Earnings (2) | 36,351 | | 34,062 | | 32,917 | | 137,383 | | 128,439 | |
| PER SHARE DATA | | | | | |
| Basic Net Income Per Common Share | $1.16 | | $1.03 | | $0.94 | | $4.02 | | $3.64 | |
| Diluted Net Income Per Common Share | 1.16 | | 1.03 | | 0.94 | | 4.01 | | 3.63 | |
| Cash Dividends Declared Per Common Share | 0.50 | | 0.50 | | 0.48 | | 2.00 | | 1.92 | |
| Dividend Payout | 43.10% | | 48.54% | | 51.06% | | 49.88% | | 52.89% | |
| Book Value Per Common Share (equity per share issued) | $30.02 | | $29.08 | | $26.62 | | $30.02 | | $26.62 | |
| Tangible Book Value Per Common Share (2) | 29.87 | | 28.93 | | 26.47 | | 29.87 | | 26.47 | |
| Market Value - High | $65.43 | | $69.40 | | $78.61 | | $71.77 | | $78.61 | |
| Market Value - Low | 56.04 | | 59.08 | | 61.10 | | 50.00 | | 57.45 | |
| 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) | | 2025 | | 2025 | | 2024 | | 2025 | | 2024 |
| Basic Weighted Average Common Shares Outstanding | 25,623,703 | | 25,703,699 | | 25,686,276 | | 25,687,159 | | 25,676,543 | |
| Diluted Weighted Average Common Shares Outstanding | 25,770,280 | | 25,821,360 | | 25,792,460 | | 25,799,047 | | 25,769,018 | |
| KEY RATIOS | | | | | |
| Return on Average Assets | 1.70% | | 1.53% | | 1.42% | | 1.50% | | 1.40% | |
| Return on Average Total Equity | 15.59 | | 14.60 | | 13.87 | | 14.40 | | 14.12 | |
| Average Equity to Average Assets | 10.88 | | 10.47 | | 10.21 | | 10.44 | | 9.94 | |
| Net Interest Margin | 3.48 | | 3.50 | | 3.25 | | 3.45 | | 3.18 | |
| Efficiency (Noninterest Expense/Net Interest Income plus Noninterest Income) | 47.92 | | 50.65 | | 48.22 | | 48.93 | | 49.34 | |
| Loans to Deposits | 89.99 | | 87.12 | | 86.73 | | 89.99 | | 86.73 | |
| Investment Securities to Total Assets | 16.96 | | 16.89 | | 16.82 | | 16.96 | | 16.82 | |
| Tier 1 Leverage (3) | 12.39 | | 12.56 | | 12.15 | | 12.39 | | 12.15 | |
| Tier 1 Risk-Based Capital (3) | 14.77 | | 15.05 | | 14.64 | | 14.77 | | 14.64 | |
| Common Equity Tier 1 (CET1) (3) | 14.77 | | 15.05 | | 14.64 | | 14.77 | | 14.64 | |
| Total Capital (3) | 15.92 | | 16.21 | | 15.90 | | 15.92 | | 15.90 | |
| Tangible Capital (2) | 10.86 | | 10.79 | | 10.19 | | 10.86 | | 10.19 | |
| Adjusted Tangible Capital (2) | 12.45 | | 12.57 | | 12.37 | | 12.45 | | 12.37 | |
| ASSET QUALITY | | | | | |
| Loans Past Due 30 - 89 Days | $2,320 | | $984 | | $4,273 | | $2,320 | | $4,273 | |
| Loans Past Due 90 Days or More | 7 | | 7 | | 28 | | 7 | | 28 | |
| Nonaccrual Loans | 20,872 | | 18,701 | | 56,431 | | 20,872 | | 56,431 | |
| Nonperforming Loans | 20,879 | | 18,708 | | 56,459 | | 20,879 | | 56,459 | |
| Other Real Estate Owned | 0 | | 284 | | 284 | | 0 | | 284 | |
| Other Nonperforming Assets | 47 | | 82 | | 143 | | 47 | | 143 | |
| Total Nonperforming Assets | 20,926 | | 19,074 | | 56,886 | | 20,926 | | 56,886 | |
| Individually Analyzed Loans | 43,024 | | 39,497 | | 78,647 | | 43,024 | | 78,647 | |
| Non-Individually Analyzed Watch List Loans | 140,997 | | 117,746 | | 132,499 | | 140,997 | | 132,499 | |
| Total Individually Analyzed and Watch List Loans | 184,021 | | 157,243 | | 211,146 | | 184,021 | | 211,146 | |
| Gross Charge Offs | 221 | | 573 | | 1,657 | | 30,414 | | 3,468 | |
| Recoveries | 1,048 | | 189 | | 299 | | 1,649 | | 706 | |
| Net Charge Offs/(Recoveries) | (827) | | 384 | | 1,358 | | 28,765 | | 2,762 | |
| Net Charge Offs/(Recoveries) to Average Loans | (0.06)% | | 0.03% | | 0.11% | | 0.55% | | 0.05% | |
| Credit Loss Reserve to Loans | 1.28 | | 1.30 | | 1.68 | | 1.28 | | 1.68 | |
| Credit Loss Reserve to Nonperforming Loans | 330.45 | | 364.38 | | 152.25 | | 330.45 | | 152.25 | |
| Nonperforming Loans to Loans | 0.39 | | 0.36 | | 1.10 | | 0.39 | | 1.10 | |
| Nonperforming Assets to Assets | 0.30 | | 0.28 | | 0.85 | | 0.30 | | 0.85 | |
| Total Individually Analyzed and Watch List Loans to Total Loans | 3.42 | | 3.00 | | 4.13 | | 3.42 | | 4.13 | |
| Three Months Ended | Twelve Months Ended |
| (Unaudited - Dollars in thousands, except per share data) | December 31, | September 30, | December 31, | December 31, | December 31, |
| OTHER DATA | | 2025 | | 2025 | | 2024 | | 2025 | | 2024 |
| Full Time Equivalent Employees | 669 | | 666 | | 643 | | 669 | | 643 | |
| Offices | 55 | | 55 | | 54 | | 55 | | 54 | |
(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, 2025 are preliminary until the Call Report is filed.
CONSOLIDATED BALANCE SHEETS (dollars in thousands, except share data)
| December 31, 2025 | December 31, 2024 |
|---|
| (Unaudited) | |
|---|
| ASSETS | | |
| Cash and due from banks | $57,139 | $71,733 |
| Short-term investments | 84,179 | 96,472 |
| Total cash and cash equivalents | 141,318 | 168,205 |
| Securities available-for-sale, at fair value | 1,052,062 | 991,426 |
| Securities held-to-maturity, at amortized cost (fair value of $117,510 and $113,107, respectively) | 133,208 | 131,568 |
| Real estate mortgage loans held-for-sale | 2,707 | 1,700 |
| Loans, net of allowance for credit losses of $68,995 and $85,960 | 5,306,354 | 5,031,988 |
| Land, premises and equipment, net | 65,542 | 60,489 |
| Bank owned life insurance | 129,978 | 113,320 |
| Federal Reserve and Federal Home Loan Bank stock | 21,420 | 21,420 |
| Accrued interest receivable | 28,997 | 28,446 |
| Goodwill | 4,970 | 4,970 |
| Other assets | 103,466 | 124,842 |
| Total assets | $6,990,022 | $6,678,374 |
| LIABILITIES | | |
| Noninterest bearing deposits | $1,221,327 | $1,297,456 |
| Interest bearing deposits | 4,752,023 | 4,603,510 |
| Total deposits | 5,973,350 | 5,900,966 |
| Borrowings - Federal Home Loan Bank advances: | | |
| Short-term advance | 170,000 | 0 |
| Long-term advance | 1,200 | 0 |
| Other borrowings | 13,000 | 0 |
| Total borrowings | 184,200 | 0 |
| Accrued interest payable | 8,868 | 15,117 |
| Other liabilities | 61,112 | 78,380 |
| Total liabilities | 6,227,530 | 5,994,463 |
| STOCKHOLDERS’ EQUITY | | |
| Common stock: 90,000,000 shares authorized, no par value | | |
| 26,023,644 shares issued and 25,219,634 outstanding as of December 31, 2025 | | |
| 25,978,831 shares issued and 25,509,592 outstanding as of December 31, 2024 | 136,965 | 129,664 |
| Retained earnings | 788,345 | 736,412 |
| Accumulated other comprehensive income (loss) | (127,137) | (166,500) |
| Treasury stock at cost (804,010 shares as of December 31, 2025, 469,239 shares as of December 31, 2024) | (35,770) | (15,754) |
| Total stockholders’ equity | 762,403 | 683,822 |
| Noncontrolling interest | 89 | 89 |
| Total equity | 762,492 | 683,911 |
| Total liabilities and equity | $6,990,022 | $6,678,374 |
CONSOLIDATED STATEMENTS OF INCOME (unaudited - in thousands, except share and per share data)
| Three Months Ended December 31, | Twelve Months Ended December 31, |
|---|
| 2025 | 2024 | 2025 | 2024 |
|---|
| NET INTEREST INCOME | | | | |
| Interest and fees on loans | | | | |
| Taxable | $84,208 | | $83,253 | | $335,856 | | $335,639 | |
| Tax exempt | 316 | | 296 | | 1,186 | | 2,126 | |
| Interest and dividends on securities | | | | |
| Taxable | 3,720 | | 2,997 | | 14,055 | | 12,048 | |
| Tax exempt | 3,908 | | 3,914 | | 15,650 | | 15,714 | |
| Other interest income | 1,856 | | 2,910 | | 6,988 | | 7,631 | |
| Total interest income | 94,008 | | 93,370 | | 373,735 | | 373,158 | |
| Interest on deposits | 36,717 | | 41,676 | | 150,732 | | 172,759 | |
| Interest on short-term borrowings | 98 | | 0 | | 1,986 | | 3,720 | |
| Total interest expense | 36,815 | | 41,676 | | 152,718 | | 176,479 | |
| NET INTEREST INCOME | 57,193 | | 51,694 | | 221,017 | | 196,679 | |
| Provision for credit losses | 0 | | 3,691 | | 11,800 | | 16,750 | |
| NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | 57,193 | | 48,003 | | 209,217 | | 179,929 | |
| NONINTEREST INCOME | | | | |
| Wealth advisory fees | 2,976 | | 2,699 | | 11,365 | | 10,469 | |
| Investment brokerage fees | 639 | | 456 | | 2,198 | | 1,894 | |
| Service charges on deposit accounts | 2,952 | | 2,825 | | 11,474 | | 11,157 | |
| Loan and service fees | 2,985 | | 2,977 | | 12,294 | | 11,832 | |
| Merchant and interchange fee income | 848 | | 889 | | 3,416 | | 3,542 | |
| Bank owned life insurance income | 1,327 | | 1,216 | | 4,256 | | 4,210 | |
| Interest rate swap fee income | 63 | | 0 | | 83 | | 0 | |
| Mortgage banking income | 67 | | 48 | | 134 | | 116 | |
| Net securities gains (losses) | 0 | | 0 | | 0 | | (46) | |
| Net gain on Visa shares | 0 | | 0 | | 0 | | 8,996 | |
| Other income | 746 | | 766 | | 2,751 | | 4,674 | |
| Total noninterest income | 12,603 | | 11,876 | | 47,971 | | 56,844 | |
| NONINTEREST EXPENSE | | | | |
| Salaries and employee benefits | 19,881 | | 17,261 | | 75,293 | | 66,728 | |
| Net occupancy expense | 1,920 | | 1,706 | | 7,524 | | 6,865 | |
| Equipment costs | 1,422 | | 1,405 | | 5,716 | | 5,612 | |
| Data processing fees and supplies | 4,001 | | 3,742 | | 16,534 | | 15,161 | |
| Corporate and business development | 1,148 | | 950 | | 5,277 | | 4,965 | |
| FDIC insurance and other regulatory fees | 844 | | 894 | | 3,361 | | 3,465 | |
| Professional fees | 1,886 | | 2,275 | | 7,698 | | 8,950 | |
| Other expense | 2,343 | | 2,420 | | 10,202 | | 13,338 | |
| Total noninterest expense | 33,445 | | 30,653 | | 131,605 | | 125,084 | |
| INCOME BEFORE INCOME TAX EXPENSE | 36,351 | | 29,226 | | 125,583 | | 111,689 | |
| Income tax expense | 6,445 | | 5,036 | | 22,222 | | 18,211 | |
| NET INCOME | $29,906 | | $24,190 | | $103,361 | | $93,478 | |
| BASIC WEIGHTED AVERAGE COMMON SHARES | 25,623,703 | | 25,686,276 | | 25,687,159 | | 25,676,543 | |
| BASIC EARNINGS PER COMMON SHARE | $1.16 | | $0.94 | | $4.02 | | $3.64 | |
| DILUTED WEIGHTED AVERAGE COMMON SHARES | 25,770,280 | | 25,792,460 | | 25,799,047 | | 25,769,018 | |
| DILUTED EARNINGS PER COMMON SHARE | $1.16 | | $0.94 | | $4.01 | | $3.63 | |
LAKELAND FINANCIAL CORPORATION
LOAN DETAIL
(unaudited, in thousands)
| December 31, 2025 | September 30, 2025 | December 31, 2024 | |
|---|
| Commercial and industrial loans: | | | | | | |
| Working capital lines of credit loans | $711,742 | 13.2% | $709,645 | 13.5% | $649,609 | 12.7% |
| Non-working capital loans | 841,947 | 15.7 | 808,371 | 15.4 | 801,256 | 15.6 |
| Total commercial and industrial loans | 1,553,689 | 28.9 | 1,518,016 | 28.9 | 1,450,865 | 28.3 |
| Commercial real estate and multi-family residential loans: | | | | | | |
| Construction and land development loans | 497,239 | 9.2 | 574,896 | 10.9 | 567,781 | 11.1 |
| Owner occupied loans | 807,335 | 15.0 | 804,253 | 15.3 | 807,090 | 15.8 |
| Nonowner occupied loans | 923,708 | 17.2 | 863,085 | 16.5 | 872,671 | 17.0 |
| Multifamily loans | 438,233 | 8.1 | 413,016 | 7.9 | 344,978 | 6.7 |
| Total commercial real estate and multi-family residential loans | 2,666,515 | 49.5 | 2,655,250 | 50.6 | 2,592,520 | 50.6 |
| Agri-business and agricultural loans: | | | | | | |
| Loans secured by farmland | 155,073 | 2.9 | 153,904 | 2.9 | 156,609 | 3.1 |
| Loans for agricultural production | 251,783 | 4.7 | 186,068 | 3.6 | 230,787 | 4.5 |
| Total agri-business and agricultural loans | 406,856 | 7.6 | 339,972 | 6.5 | 387,396 | 7.6 |
| Other commercial loans | 97,381 | 1.8 | 91,833 | 1.7 | 95,584 | 1.9 |
| Total commercial loans | 4,724,441 | 87.8 | 4,605,071 | 87.7 | 4,526,365 | 88.4 |
| Consumer 1-4 family mortgage loans: | | | | | | |
| Closed end first mortgage loans | 267,134 | 5.0 | 273,580 | 5.2 | 259,286 | 5.1 |
| Open end and junior lien loans | 251,185 | 4.7 | 241,256 | 4.6 | 214,125 | 4.2 |
| Residential construction and land development loans | 18,873 | 0.3 | 18,706 | 0.4 | 16,818 | 0.3 |
| Total consumer 1-4 family mortgage loans | 537,192 | 10.0 | 533,542 | 10.2 | 490,229 | 9.6 |
| Other consumer loans | 116,224 | 2.2 | 112,430 | 2.1 | 104,041 | 2.0 |
| Total consumer loans | 653,416 | 12.2 | 645,972 | 12.3 | 594,270 | 11.6 |
| Subtotal | 5,377,857 | 100.0% | 5,251,043 | 100.0% | 5,120,635 | 100.0% |
| Less: Allowance for credit losses | (68,995) | | (68,168) | | (85,960) | |
| Net deferred loan fees | (2,508) | | (2,424) | | (2,687) | |
| Loans, net | $5,306,354 | | $5,180,451 | | $5,031,988 | |
LAKELAND FINANCIAL CORPORATION
DEPOSITS AND BORROWINGS
(unaudited, in thousands)
| December 31, 2025 | September 30, 2025 | December 31, 2024 |
|---|
| Noninterest bearing demand deposits | $1,221,327 | $1,268,241 | $1,297,456 |
| Savings and transaction accounts: | | | |
| Savings deposits | 285,834 | 281,291 | 276,179 |
| Interest bearing demand deposits | 3,715,463 | 3,689,037 | 3,471,455 |
| Time deposits: | | | |
| Deposits of $100,000 or more | 549,381 | 580,499 | 642,777 |
| Other time deposits | 201,345 | 205,250 | 213,099 |
| Total deposits | $5,973,350 | $6,024,318 | $5,900,966 |
| FHLB advances and other borrowings | 184,200 | 56,200 | 0 |
| Total funding sources | $6,157,550 | $6,080,518 | $5,900,966 |
AVERAGE BALANCE SHEET AND NET INTEREST ANALYSIS
(UNAUDITED)
| Three Months Ended December 31, 2025 | Three Months Ended September 30, 2025 | Three Months Ended December 31, 2024 |
|---|
| (fully tax equivalent basis, dollars in thousands) | Average Balance | Interest Income | Yield (1)/ Rate | Average Balance | Interest Income | Yield (1)/ Rate | Average Balance | Interest Income | Yield (1)/ Rate |
| Earning Assets | | | | | | | | | |
| Loans: | | | | | | | | | |
| Taxable (2)(3) | $5,245,483 | $84,208 | 6.37% | $5,180,847 | $85,490 | 6.55% | $5,060,397 | $83,253 | 6.54% |
| Tax exempt (1) | 26,204 | 392 | 5.93 | 24,986 | 354 | 5.62 | 26,217 | 364 | 5.52 |
| Investments: (1) | | | | | | | | | |
| Securities | 1,175,389 | 8,666 | 2.93 | 1,127,094 | 8,444 | 2.97 | 1,134,011 | 7,953 | 2.79 |
| Short-term investments | 2,752 | 24 | 3.46 | 2,795 | 27 | 3.83 | 2,765 | 29 | 4.17 |
| Interest bearing deposits | 191,756 | 1,832 | 3.79 | 156,918 | 1,679 | 4.25 | 247,530 | 2,881 | 4.63 |
| Total earning assets | $6,641,584 | $95,122 | 5.68% | $6,492,640 | $95,994 | 5.87% | $6,470,920 | $94,480 | 5.81% |
| Less: Allowance for credit losses | (68,391) | | | (67,115) | | | (84,687) | | |
| Nonearning Assets | | | | | | | | | |
| Cash and due from banks | 68,620 | | | 62,671 | | | 67,994 | | |
| Premises and equipment | 64,928 | | | 64,391 | | | 60,325 | | |
| Other nonearning assets | 287,213 | | | 298,084 | | | 281,044 | | |
| Total assets | $6,993,954 | | | $6,850,671 | | | $6,795,596 | | |
| Interest Bearing Liabilities | | | | | | | | | |
| Savings deposits | $280,620 | $40 | 0.06% | $284,553 | $41 | 0.06% | $274,960 | $43 | 0.06% |
| Interest bearing checking accounts | 3,850,205 | 29,906 | 3.08 | 3,731,706 | 31,382 | 3.34 | 3,505,470 | 31,562 | 3.58 |
| Time deposits: | | | | | | | | | |
| In denominations under $100,000 | 203,083 | 1,635 | 3.19 | 204,997 | 1,678 | 3.25 | 214,429 | 1,921 | 3.56 |
| In denominations over $100,000 | 549,588 | 5,136 | 3.71 | 563,920 | 5,345 | 3.76 | 734,342 | 8,150 | 4.42 |
| Short-term borrowings | 8,354 | 98 | 4.65 | 31,739 | 368 | 4.60 | 5 | 0 | 5.30 |
| Long-term borrowings | 1,200 | 0 | 0.00 | 1,200 | 0 | 0.00 | 0 | 0 | 0.00 |
| Total interest bearing liabilities | $4,893,050 | $36,815 | 2.99% | $4,818,115 | $38,814 | 3.20% | $4,729,206 | $41,676 | 3.51% |
| Noninterest Bearing Liabilities | | | | | | | | | |
| Demand deposits | 1,272,030 | | | 1,244,381 | | | 1,281,921 | | |
| Other liabilities | 67,920 | | | 70,747 | | | 90,725 | | |
| Stockholders' Equity | 760,954 | | | 717,428 | | | 693,744 | | |
| Total liabilities and stockholders' equity | $6,993,954 | | | $6,850,671 | | | $6,795,596 | | |
| Interest Margin Recap | | | | | | | | | |
| Interest income/average earning assets | | 95,122 | 5.68% | | 95,994 | 5.87% | | 94,480 | 5.81% |
| Interest expense/average earning assets | | 36,815 | 2.20 | | 38,814 | 2.37 | | 41,676 | 2.56 |
| Net interest income and margin | | $58,307 | 3.48% | | $57,180 | 3.50% | | $52,804 | 3.25% |
(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, in the three-month periods ended December 31, 2025, September 30, 2025, and December 31, 2024.
(2)Loan fees, which are immaterial in relation to total taxable loan interest income for the three-month periods ended December 31, 2025, September 30, 2025, and December 31, 2024, 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 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 | Twelve Months Ended |
|---|
| December 31, 2025 | September 30, 2025 | December 31, 2024 | December 31, 2025 | December 31, 2024 |
|---|
| Total Equity | $762,492 | $747,503 | $683,911 | $762,492 | $683,911 |
| 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 | 758,689 | 743,700 | 680,108 | 758,689 | 680,108 |
| Market Value Adjustment in AOCI | 126,609 | 140,165 | 165,932 | 126,609 | 165,932 |
| Adjusted Tangible Common Equity | 885,298 | 883,865 | 846,040 | 885,298 | 846,040 |
| Assets | $6,990,022 | $6,895,028 | $6,678,374 | $6,990,022 | $6,678,374 |
| 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 | 6,986,219 | 6,891,225 | 6,674,571 | 6,986,219 | 6,674,571 |
| Market Value Adjustment in AOCI | 126,609 | 140,165 | 165,932 | 126,609 | 165,932 |
| Adjusted Tangible Assets | 7,112,828 | 7,031,390 | 6,840,503 | 7,112,828 | 6,840,503 |
| Ending Common Shares Issued | 25,396,653 | 25,704,243 | 25,689,730 | 25,396,653 | 25,689,730 |
| Tangible Book Value Per Common Share | $29.87 | $28.93 | $26.47 | $29.87 | $26.47 |
| Tangible Common Equity/Tangible Assets | 10.86% | 10.79% | 10.19% | 10.86% | 10.19% |
| Adjusted Tangible Common Equity/Adjusted Tangible Assets | 12.45% | 12.57% | 12.37% | 12.45% | 12.37% |
| Net Interest Income | $57,193 | $56,073 | $51,694 | $221,017 | $196,679 |
| Plus: Noninterest Income | 12,603 | 12,954 | 11,876 | 47,971 | 56,844 |
| Minus: Noninterest Expense | (33,445) | (34,965) | (30,653) | (131,605) | (125,084) |
| Pretax Pre-Provision Earnings | $36,351 | $34,062 | $32,917 | $137,383 | $128,439 |
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 based on GAAP amounts. These adjusted amounts are calculated by excluding the impact of the net gain on Visa shares, legal accrual and wire fraud loss 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 the periods presented below.
A reconciliation of these non-GAAP financial measures is provided below (dollars in thousands, except per share data).
| Twelve Months Ended | |
|---|
| | December 31, 2025 | December 31, 2024 |
|---|
| Noninterest Income | | $47,971 | $56,844 |
| Less: Net Gain on Visa Shares | | 0 | (8,996) |
| Less: Insurance Recovery | | 0 | (1,000) |
| Adjusted Core Noninterest Income | | $47,971 | $46,848 |
| Noninterest Expense | | $131,605 | $125,084 |
| Less: Legal Accrual | | 0 | (4,537) |
| Adjusted Core Noninterest Expense | | $131,605 | $120,547 |
| Earnings Before Income Taxes | | $125,583 | $111,689 |
| Adjusted Core Impact: | | | |
| Noninterest Income | | 0 | (9,996) |
| Noninterest Expense | | 0 | 4,537 |
| Total Adjusted Core Impact | | 0 | (5,459) |
| Adjusted Earnings Before Income Taxes | | 125,583 | 106,230 |
| Tax Effect | | (22,222) | (16,853) |
| Core Operational Profitability (1) | | $103,361 | $89,377 |
| Diluted Earnings Per Common Share | | $4.01 | $3.63 |
| Impact of Adjusted Core Items | | 0.00 | (0.16) |
| Core Operational Diluted Earnings Per Common Share | | $4.01 | $3.47 |
| Adjusted Core Efficiency Ratio | | 48.93% | 49.49% |
(1)Core operational profitability was $4.1 million lower than the reported net income for the twelve months ended December 31, 2024.
Contacts
(574) 267-9125 lisa.oneill@lakecitybank.com