Lakeland Financial Reports a 12% Increase in Net Interest Income and Organic Loan Growth of 4%

WARSAW, Ind., April 25, 2025 (GLOBE NEWSWIRE) -- 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 $26.85Average loans grew by $214.9 million, or 4%, to $5.19 billionCore deposits grew by $402.5 million, or 7%, to $5.83 billionNet 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 millionProvision expense of $6.8 million, compared to $1.5 millionWatch 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 $26.85Average loans grew by $99.3 million, or 2%, to $5.19 billionNet 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 millionWatch 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% 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.” 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, 2025 December 31, 2024 March 31, 2024Retail$1,787,992 30.0% $1,780,726 30.2% $1,770,007 31.5%Commercial 2,336,910 39.2 2,269,049 38.4 2,117,536 37.7 Public funds 1,709,883 28.7 1,809,631 30.7 1,544,775 27.5 Core deposits 5,834,785 97.9 5,859,406 99.3 5,432,318 96.7 Brokered deposits 125,409 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 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. 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 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.” 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. LAKELAND FINANCIAL CORPORATIONFIRSTQUARTER2025FINANCIAL HIGHLIGHTS Three Months Ended(Unaudited – Dollars in thousands, except per share data)March 31, December 31, March 31,END OF PERIOD BALANCES 2025 2024 2024 Assets$6,851,178 $6,678,374 $6,566,861 Investments 1,132,854 1,122,994 1,144,816 Loans 5,223,221 5,117,948 4,997,559 Allowance for Credit Losses 92,433 85,960 73,180 Deposits 5,960,194 5,900,966 5,618,085 Brokered Deposits 125,409 41,560 185,767 Core Deposits (1) 5,834,785 5,859,406 5,432,318 Total Equity 694,509 683,911 647,009 Goodwill Net of Deferred Tax Assets 3,803 3,803 3,803 Tangible Common Equity (2) 690,706 680,108 643,206 Adjusted Tangible CommonEquity (2) 854,585 846,040 809,395 AVERAGE BALANCES Total Assets$6,762,970 $6,795,596 $6,554,468 Earning Assets 6,430,804 6,470,920 6,216,929 Investments 1,136,404 1,134,011 1,158,503 Loans 5,185,918 5,086,614 4,971,020 Total Deposits 5,874,725 6,011,122 5,630,431 Interest Bearing Deposits 4,616,381 4,729,201 4,356,328 Interest Bearing Liabilities 4,716,465 4,729,206 4,532,137 Total Equity 696,053 693,744 645,007 INCOME STATEMENT DATA Net Interest Income$52,875 $51,694 $47,416 Net Interest Income-Fully Tax Equivalent 53,983 52,804 48,683 Provision for Credit Losses 6,800 3,691 1,520 Noninterest Income 10,928 11,876 12,612 Noninterest Expense 32,763 30,653 30,705 Net Income 20,085 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 Share 0.50 0.48 0.48 Dividend Payout 64.10% 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 – Low 58.24 61.10 60.56 Basic Weighted Average Common Shares Outstanding 25,714,818 25,686,276 25,657,063 Diluted Weighted Average Common Shares Outstanding 25,802,865 25,792,460 25,747,643 Three Months Ended(Unaudited – Dollars in thousands, except per share data)March 31, December 31, March 31,KEY RATIOS 2025 2024 2024 Return on Average Assets 1.20% 1.42% 1.44%Return on Average Total Equity 11.70 13.87 14.59 Average Equity to Average Assets 10.29 10.21 9.84 Net Interest Margin 3.40 3.25 3.15 Efficiency (Noninterest Expense/Net Interest Incomeplus Noninterest Income) 51.35 48.22 51.15 Loans to Deposits 87.64 86.73 88.95 Investment Securities to Total Assets 16.54 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 More 7 28 7 Nonaccrual Loans 57,392 56,431 14,762 Nonperforming Loans 57,399 56,459 14,769 Other Real Estate Owned 284 284 384 Other Nonperforming Assets 193 143 78 Total Nonperforming Assets 57,876 56,886 15,231 Individually Analyzed Loans 81,346 78,647 15,181 Non-Individually Analyzed Watch List Loans 134,218 132,499 168,133 Total Individually Analyzed and Watch List Loans 215,564 211,146 183,314 Gross Charge Offs 508 1,657 504 Recoveries 181 299 192 Net Charge Offs/(Recoveries) 327 1,358 312 Net Charge Offs/(Recoveries) to Average Loans 0.03% 0.11% 0.03%Credit Loss Reserve to Loans 1.77 1.68 1.46 Credit Loss Reserve to Nonperforming Loans 161.04 152.25 495.51 Nonperforming Loans to Loans 1.10 1.10 0.30 Nonperforming Assets to Assets 0.84 0.85 0.23 Total Individually Analyzed and Watch List Loans to Total Loans 4.13% 4.13% 3.67%OTHER DATA Full Time Equivalent Employees 647 643 628 Offices 54 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. 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 investments 145,899 96,472 Total cash and cash equivalents 235,224 168,205 Securities available-for-sale, at fair value 1,000,875 991,426 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-sale 1,295 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, net 60,797 60,489 Bank owned life insurance 113,826 113,320 Federal Reserve and Federal Home Loan Bank stock 21,420 21,420 Accrued interest receivable 28,818 28,446 Goodwill 4,970 4,970 Other assets 121,186 124,842 Total assets$6,851,178 $6,678,374 LIABILITIES Noninterest bearing deposits$1,296,907 $1,297,456 Interest bearing deposits 4,663,287 4,603,510 Total deposits 5,960,194 5,900,966 Borrowings - Federal Home Loan Bank advances 108,200 0 Accrued interest payable 14,699 15,117 Other liabilities 73,576 78,380 Total liabilities 6,156,669 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 earnings 743,650 736,412 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’ equity 694,420 683,822 Noncontrolling interest 89 89 Total equity 694,509 683,911 Total liabilities and equity$6,851,178 $6,678,374 CONSOLIDATED STATEMENTS OF INCOME (unaudited - in thousands, except share and per share data)Three Months Ended March 31, 2025 2024 NET INTEREST INCOME Interest and fees on loans Taxable$81,740 $82,042 Tax exempt 292 900 Interest and dividends on securities Taxable 3,389 3,039 Tax exempt 3,910 3,947 Other interest income 1,124 1,106 Total interest income 90,455 91,034 Interest on deposits 36,458 41,164 Interest on short-term borrowings 1,122 2,454 Total interest expense 37,580 43,618 NET INTEREST INCOME 52,875 47,416 Provision for credit losses 6,800 1,520 NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 46,075 45,896 NONINTEREST INCOME Wealth advisory fees 2,867 2,455 Investment brokerage fees 452 522 Service charges on deposit accounts 2,774 2,691 Loan and service fees 2,884 2,852 Merchant and interchange fee income 822 863 Bank owned life insurance income 322 1,036 Mortgage banking income (loss) (51) 52 Net securities gains (losses) 0 (46)Other income 858 2,187 Total noninterest income 10,928 12,612 NONINTEREST EXPENSE Salaries and employee benefits 17,902 16,833 Net occupancy expense 1,980 1,740 Equipment costs 1,382 1,412 Data processing fees and supplies 4,265 3,839 Corporate and business development 1,406 1,381 FDIC insurance and other regulatory fees 800 789 Professional fees 2,380 2,463 Other expense 2,648 2,248 Total noninterest expense 32,763 30,705 INCOME BEFORE INCOME TAX EXPENSE 24,240 27,803 Income tax expense 4,155 4,402 NET INCOME$20,085 $23,401 BASIC WEIGHTED AVERAGE COMMON SHARES 25,714,818 25,657,063 BASIC EARNINGS PER COMMON SHARE$0.78 $0.91 DILUTED WEIGHTED AVERAGE COMMON SHARES 25,802,865 25,747,643 DILUTED EARNINGS PER COMMON SHARE$0.78 $0.91 LAKELAND FINANCIAL CORPORATIONLOAN DETAIL(unaudited, in thousands) March 31,2025 December 31,2024 March 31,2024Commercial and industrial loans: Working capital lines of credit loans$716,522 13.7% $649,609 12.7% $646,459 12.9%Non-working capital loans 807,048 15.5 801,256 15.6 830,817 16.6 Total commercial and industrial loans 1,523,570 29.2 1,450,865 28.3 1,477,276 29.5 Commercial real estate and multi-family residential loans: Construction and land development loans 623,905 12.0 567,781 11.1 659,712 13.2 Owner occupied loans 804,933 15.4 807,090 15.8 833,410 16.7 Nonowner occupied loans 852,033 16.3 872,671 17.0 744,346 14.9 Multifamily loans 339,946 6.5 344,978 6.7 239,974 4.8 Total commercial real estate and multi-family residential loans 2,620,817 50.2 2,592,520 50.6 2,477,442 49.6 Agri-business and agricultural loans: Loans secured by farmland 156,112 3.0 156,609 3.1 167,271 3.3 Loans for agricultural production 227,659 4.3 230,787 4.5 200,581 4.0 Total agri-business and agricultural loans 383,771 7.3 387,396 7.6 367,852 7.3 Other commercial loans 94,927 1.8 95,584 1.9 120,302 2.4 Total commercial loans 4,623,085 88.5 4,526,365 88.4 4,442,872 88.8 Consumer 1-4 family mortgage loans: Closed end first mortgage loans 265,855 5.1 259,286 5.1 260,633 5.2 Open end and junior lien loans 217,981 4.2 214,125 4.2 188,927 3.8 Residential construction and land development loans 16,359 0.3 16,818 0.3 10,956 0.2 Total consumer 1-4 family mortgage loans 500,195 9.6 490,229 9.6 460,516 9.2 Other consumer loans 102,254 1.9 104,041 2.0 97,369 2.0 Total consumer loans 602,449 11.5 594,270 11.6 557,885 11.2 Subtotal 5,225,534 100.0% 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 CORPORATIONDEPOSITS AND BORROWINGS(unaudited, in thousands) March 31,2025 December 31,2024 March 31,2024Noninterest bearing demand deposits$1,296,907 $1,297,456 $1,254,200Savings and transaction accounts: Savings deposits 293,768 276,179 296,671Interest bearing demand deposits 3,554,310 3,471,455 3,041,025Time deposits: Deposits of $100,000 or more 602,577 642,776 805,832Other time deposits 212,632 213,100 220,357Total deposits$5,960,194 $5,900,966 $5,618,085FHLB advances and other borrowings 108,200 0 200,000Total funding sources$6,068,394 $5,900,966 $5,818,085 LAKELAND FINANCIAL CORPORATIONAVERAGE BALANCE SHEET AND NET INTEREST ANALYSIS(UNAUDITED) Three Months Ended March 31, 2025 Three Months Ended December 31, 2024 Three Months Ended March 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)/RateEarning 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) Securities 1,136,404 8,338 2.98 1,134,011 7,953 2.79 1,158,503 8,035 2.79 Short-term investments 2,964 28 3.83 2,765 29 4.17 2,710 33 4.90 Interest bearing deposits 105,518 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 banks 71,004 67,994 68,584 Premises and equipment 60,523 60,325 57,883 Other nonearning assets 288,116 281,044 283,505 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 accounts 3,486,447 28,075 3.27 3,505,470 31,562 3.58 3,046,958 30,365 4.01 Time deposits: In denominations under $100,000 212,934 1,832 3.49 214,429 1,921 3.56 224,139 1,918 3.44 In denominations over $100,000 633,112 6,509 4.17 734,342 8,150 4.42 789,581 8,832 4.50 Miscellaneous short-term borrowings 99,830 1,122 4.56 5 0 5.30 175,809 2,454 5.61 Long-term borrowings 254 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 deposits 1,258,344 1,281,921 1,274,103 Other liabilities 92,108 90,725 103,221 Stockholders' Equity 696,053 693,744 645,007 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. 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, 2025 Dec. 31, 2024 Mar. 31, 2024Total Equity$694,509 $683,911 $647,009 Less: Goodwill (4,970) (4,970) (4,970)Plus: DTA Related to Goodwill 1,167 1,167 1,167 Tangible Common Equity 690,706 680,108 643,206 Market Value Adjustment in AOCI 163,879 165,932 166,189 Adjusted Tangible Common Equity 854,585 846,040 809,395 Assets$6,851,178 $6,678,374 $6,566,861 Less: Goodwill (4,970) (4,970) (4,970)Plus: DTA Related to Goodwill 1,167 1,167 1,167 Tangible Assets 6,847,375 6,674,571 6,563,058 Market Value Adjustment in AOCI 163,879 165,932 166,189 Adjusted Tangible Assets 7,011,254 6,840,503 6,729,247 Ending Common Shares Issued 25,727,393 25,689,730 25,677,399 Tangible Book Value Per Common Share$26.85 $26.47 $25.05 Tangible Common Equity/Tangible Assets 10.09% 10.19% 9.80%Adjusted Tangible Common Equity/Adjusted Tangible Assets 12.19% 12.37% 12.03% Net Interest Income$52,875 $51,694 $47,416 Plus: Noninterest Income 10,928 11,876 12,612 Minus: Noninterest Expense (32,763) (30,653) (30,705) Pretax Pre-Provision Earnings$31,040 $32,917 $29,323 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, 2025 Dec. 31, 2024 Mar. 31, 2024Noninterest Income$10,928 $11,876 $12,612 Less: Insurance Recovery 0 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 Income 0 0 (1,000)Total Adjusted Core Impact 0 0 (1,000)Adjusted Earnings Before Income Taxes 24,240 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 Items 0.00 0.00 (0.03)Core Operational Diluted Earnings Per Common Share$0.78 $0.94 $0.88 Adjusted Core Efficiency Ratio 51.35% 48.22% 52.02% (1) Core operational profitability was $751,000 lower than reported net income for the three months ended March 31, 2024. ContactLisa M. O’NeillExecutive Vice President and Chief Financial Officer (574) 267-9125lisa.oneill@lakecitybank.com

Lakeland Financial Reports a 12% Increase in Net Interest Income and Organic Loan Growth of 4%

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