Lakeland Financial Reports Record Second Quarter Performance; Net Income Grows by 20% to $27.0 Million, as Net Interest Income Expands by 14%

WARSAW, Ind., July 25, 2025 (GLOBE NEWSWIRE) -- Lakeland Financial Corporation (Nasdaq Global Select/LKFN), parent company of Lake City Bank, today reported record second quarter net income of $27.0 million for the three months ended June 30, 2025, which represents an increase of $4.4 million, or 20%, compared with net income of $22.5 million for the three months ended June 30, 2024. Diluted earnings per share were $1.04 for the second quarter of 2025 and increased $0.17, or 20%, compared to $0.87 for the second quarter of 2024. On a linked quarter basis, net income increased $6.9 million, or 34%, from $20.1 million. Diluted earnings per share increased $0.26, or 33%, from $0.78 on a linked quarter basis. Pretax pre-provision earnings, which is a non-GAAP measure, were $35.9 million for the three months ended June 30, 2025, an increase of $528,000, or 1%, compared to $35.4 million for the three months ended June 30, 2024. Adjusted core operational profitability, a non-GAAP measure that excludes the impact of certain non-routine operating events that occurred during 2024, improved by $7.8 million, or 41%, from $19.2 million to $27.0 million for the three months ended June 30, 2024 and 2025, respectively. The company further reported net income of $47.1 million for the six months ended June 30, 2025, versus $46.0 million for the comparable period of 2024, an increase of $1.1 million, or 2%. Diluted earnings per share also increased 2% to $1.82 for the six months ended June 30, 2025, versus $1.78 for the comparable period of 2024. Pretax pre-provision earnings were $67.0 million for the six months ended June 30, 2025, an increase of $2.2 million, or 3%, compared to $64.7 million for the six months ended June 30, 2024. Adjusted core operational profitability improved by $5.2 million, or 12%, from $41.8 million to $47.1 million for the six months ended June 30, 2024 and 2025, respectively. “We are pleased to report strong earnings momentum for the second quarter of 2025, which has benefited from double digit growth of net interest income and contributed to good overall performance in the first half of 2025,” observed David M. Findlay, Chairman and CEO. “Importantly, our Lake City Bank Team continues to generate healthy loan and deposit growth. It’s been a rewarding first six months of 2025 with this strong financial performance, healthy balance sheet growth and continued success on the business development front for all of our revenue producing teams.” Quarterly Financial Performance Second Quarter 2025 versus Second Quarter 2024 highlights: Return on average equity of 15.52%, compared to 14.19%Return on average assets of 1.57%, compared to 1.37%Tangible book value per share grew by $2.14, or 8%, to $27.48Average loans grew by $194.8 million, or 4%, to $5.23 billionCore deposits grew by $423.9 million, or 8%, to $6.03 billionNet interest margin improved 25 basis points to 3.42% versus 3.17%Net interest income increased by $6.6 million, or 14%Provision expense of $3.0 million, compared to $8.5 millionWatch list loans as a percentage of total loans improved to 3.67% from 5.31%Nonaccrual loans declined 46% to $30.6 million compared to $57.1 millionCommon equity tier 1 capital ratio improved to 14.73%, compared to 14.28%Total risk-based capital ratio improved to 15.86%, compared to 15.53%Tangible capital ratio improved to 10.15%, compared to 9.91%Average equity increased by $58.0 million, or 9% Second Quarter 2025 versus First Quarter 2025 highlights: Return on average equity of 15.52%, compared to 11.70%Return on average assets of 1.57%, compared to 1.20%Average loans grew by $43.7 million, or 1%, to $5.23 billionCore deposits grew by $191.6 million, or 3%, to $6.03 billionNet interest margin improved 2 basis points to 3.42% versus 3.40%Net interest income increased by $2.0 million, or 4%Pretax, pre-provision earnings increased $4.9 million, or 16%Provision expense of $3.0 million, compared to $6.8 millionNonaccrual loans declined 47% to $30.6 million compared to $57.4 millionWatch list loans as a percentage of total loans improved to 3.67% from 4.13%Common equity tier 1 capital ratio of 14.73%, compared to 14.51%Total risk-based capital ratio of 15.86%, compared to 15.77%Tangible capital ratio of 10.15%, compared to 10.09% Capital Strength The company’s total capital as a percentage of risk-weighted assets improved to 15.86% at June 30, 2025, compared to 15.53% at June 30, 2024 and 15.77% at March 31, 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 10.15% at June 30, 2025, compared to 9.91% at June 30, 2024 and 10.09% at March 31, 2025. Unrealized losses from available-for-sale investment securities were $185.3 million at June 30, 2025, compared to $194.9 million at June 30, 2024 and $188.3 million at March 31, 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 12.17% at June 30, 2025, compared to 12.18% at June 30, 2024, and 12.19% at March 31, 2025. As announced on July 8, 2025, the board of directors approved a cash dividend for the second quarter of $0.50 per share, payable on August 5, 2025, to shareholders of record as of July 25, 2025. The second quarter dividend per share represents a 4% increase from the $0.48 dividend per share paid for the second quarter of 2024. The company utilized its share repurchase program during the second quarter of 2025 and repurchased 30,300 shares of its common stock for $1.7 million at a weighted average price per share of $55.94. The company has $28.3 million of remaining availability under the board-approved share repurchase program. “Our capital position is strong and provides capacity for continued organic growth of our balance sheet as well as continued growth of our common stock dividend to shareholders,” stated Kristin L. Pruitt, President. “While we did utilize our share repurchase program during the second quarter, our priority for capital is to continue capital retention to support loan growth in our Indiana markets and provide for continued balance sheet growth opportunities.” Loan Portfolio Average total loans of $5.23 billion in the second quarter of 2025 increased $194.8 million, or 4%, from $5.03 billion for the second quarter of 2024 and increased $43.7 million, or 1%, from $5.19 billion for the first quarter of 2025. Average total loans for the six months ended June 30, 2025 were $5.21 billion, an increase of $205.0 million, or 4%, from $5.00 billion for the six months ended June 30, 2024. Total loans, excluding deferred fees and costs, increased by $173.8 million, or 3%, from $5.06 billion as of June 30, 2024, to $5.23 billion as of June 30, 2025. The increase in loans occurred across much of the portfolio, with our commercial real estate and multi-family residential loan portfolio growing by $177.0 million, or 7%, our consumer 1-4 family mortgage loan portfolio growing by $46.2 million, or 10%, and our other consumer loan portfolio growing by $6.0 million, or 6%. These increases were offset by contractions to our commercial and industrial loan portfolio of $32.5 million, or 2%, and our agri-business and agricultural loan portfolio of $21.6 million, or 6%. On a linked quarter basis, total loans, excluding deferred fees and costs, increased by $3.4 million, or less than 1%, from $5.23 billion at March 31, 2025. The linked quarter increase was primarily a result of growth in total commercial real estate and multi-family residential loans of $59.6 million, or 2%, and growth in total consumer loans of $17.5 million, or 3%. This growth was offset by contractions in total agri-business and agricultural loans of $44.3 million, or 12%, and total commercial and industrial loans of $29.8 million, or 2%. Commercial loan originations for the second quarter included approximately $390.0 million in loan originations, offset by approximately $404.0 million in commercial loan pay downs. Line of credit usage increased to 44% as of June 30, 2025, compared to 41% at June 30, 2024 and 43% as of March 31, 2025. Total available lines of credit contracted by $48.0 million, or 1%, as compared to a year ago, and line usage increased by $100.0 million, or 5%, 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 $106.9 million for this sector represented 2% of total loans at June 30, 2025, an increase of $6.4 million, or 6%, from March 31, 2025. Commercial real estate loans secured by multi-family residential properties and secured by non-farm non-residential properties were approximately 221% of total risk-based capital at June 30, 2025. “We are pleased that commercial line utilization continues to improve with a utilization rate of 44% at the end of the second quarter 2025,” added Findlay. “This marks the highest line utilization rate since 2020, and we are encouraged that borrower demand for working lines of capital has increased. During the second quarter, construction loans migrated as planned to the CRE multi-family segment. In addition, loan payoffs received during the second quarter impacted the owner occupied CRE and Agriculture segments.” Diversified Deposit Base The bank's diversified deposit base has grown on a year-over-year basis and on a linked quarter basis. (in thousands)June 30, 2025 March 31, 2025 June 30, 2024Retail$1,755,750 28.4% $1,787,992 30.0% $1,724,777 29.9%Commercial 2,256,620 36.6 2,336,910 39.2 2,150,127 37.3 Public funds 2,014,047 32.6 1,709,883 28.7 1,727,593 30.0 Core deposits 6,026,417 97.6 5,834,785 97.9 5,602,497 97.2 Brokered deposits 150,416 2.4 125,409 2.1 161,040 2.8 Total$6,176,833 100.0% $5,960,194 100.0% $5,763,537 100.0% Total deposits increased $413.3 million, or 7%, from $5.76 billion as of June 30, 2024, to $6.18 billion as of June 30, 2025. The increase in total deposits was driven by an increase in core deposits (which excludes brokered deposits) of $423.9 million, or 8%. Total core deposits at June 30, 2025 were $6.03 billion and represented 98% of total deposits, as compared to $5.60 billion and 97% of total deposits at June 30, 2024. The increase in core deposits since June 30, 2024, reflects growth in all three core deposit segments. Public funds deposits grew annually by $286.5 million, or 17%, to $2.01 billion. Public funds deposits as a percentage of total deposits were 33%, up from 30% 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 grew annually by $106.5 million, or 5%, to $2.26 billion and remained at 37% as a percentage of total deposits. Retail deposits grew by $31.0 million, or 2%, to $1.76 billion. Retail deposits as a percentage of total deposits was 28% of total deposits, down from 30% a year ago. On a linked quarter basis, total deposits increased $216.6 million, or 4%, from $5.96 billion at March 31, 2025, to $6.18 billion at June 30, 2025. Core deposits increased by $191.6 million, or 3%, while brokered deposits increased by $25.0 million, or 20%. The linked quarter growth in core deposits, was positively impacted by the addition of new public funds customers. Offsetting this increase was a decrease in commercial deposits of $80.3 million, or 3%, and a decrease in retail deposits of $32.2 million, or 2%. Average total deposits were $6.10 billion for the second quarter of 2025, an increase of $276.5 million, or 5%, from $5.82 billion for the second quarter of 2024. Average interest-bearing deposits drove the increase in average total deposits and increased by $263.4 million, or 6%. Contributing to the overall growth of interest-bearing deposits was an increase to average interest-bearing checking accounts of $492.4 million, or 15%. Offsetting this increase was a reduction in average time deposits of $225.9 million, or 22%, and a decrease to average savings deposits of $3.2 million, or 1%. Average noninterest-bearing demand deposits increased by $13.2 million, or 1% to $1.2 billion. On a linked quarter basis, average total deposits increased by $221.8 million, or 4%, from $5.87 billion for the first quarter of 2025 to $6.10 billion for the second quarter of 2025. Average interest bearing deposits drove the increase to total average deposits, which increased by $236.1 million, or 5%. Average interest bearing checking accounts were responsible for the increase, growing by $281.5 million, or 8%. Offsetting this increase were decreases to total average time deposits of $47.4 million, or 6%, and average noninterest bearing demand deposits decreased by $14.3 million, or 1%. Checking account trends as of June 30, 2025 compared to June 30, 2024 include growth of $352.1 million, or 23%, in aggregate public fund checking account balances, growth of $93.4 million, or 5%, in aggregate commercial checking account balances, and growth of $52.2 million, or 6%, in aggregate retail checking account balances. The number of accounts has also grown for all three segments, with growth of 9% for public funds accounts, 2% for commercial accounts and 1% for retail accounts during the prior twelve months. “Deposit growth is strong in many measurable ways. All deposit segments have grown on a year over year basis, and the bank continues to add new public fund customers and their operating accounts,” commented Lisa M. O’Neill, Executive Vice-President and Chief Financial Officer. Deposits not covered by FDIC deposit insurance as a percentage of total deposits were 59% as of June 30, 2025, compared to 57% at March 31, 2025, and 58% at June 30, 2024, reflecting 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 27% of total deposits at June 30, 2025, compared to 29% at March 31, 2025, and 29% at June 30, 2024. At June 30, 2025, 98% of deposit accounts had deposit balances less than $250,000. Net Interest Margin Net interest margin was 3.42% for the second quarter of 2025, representing a 25 basis point increase from 3.17% for the second 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 49 basis points from 2.90% for the second quarter of 2024 to 2.41% for the second quarter of 2025. Offsetting the decrease in funding costs was a decrease to earning asset yields of 24 basis points from 6.07% for the second quarter of 2024 to 5.83% for the second quarter of 2025. During the second quarter of 2025, the company recorded a prepayment fee of $541,000 from the early payment of a fixed rate commercial loan, which was recorded as part of interest income. The prepayment fee benefited net interest margin by 3 basis points for the second quarter. Excluding the impact of the prepayment penalty, net interest margin improved by 22 basis points. 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 as compared to the prior year quarter. Net interest margin expanded by 2 basis points to 3.42% for the second quarter of 2025, compared to 3.40% for the linked first quarter of 2025. Average earning asset yields increased by 6 basis points from 5.77% to 5.83% on a linked quarter basis and interest expense as a percentage of average earning assets increased 4 basis points from 2.37% to 2.41%. Excluding the impact of the prepayment penalty, net interest margin contracted by 1 basis point compared to the linked first quarter. The cumulative loan beta for the current rate-easing cycle that began in September 2024 is 29% compared to the deposit beta of 50% and has resulted in net interest margin expansion which has benefited net interest income. Net interest income was $54.9 million for the second quarter of 2025, representing an increase of $6.6 million, or 14%, as compared to $48.3 million for the second quarter of 2024. On a linked quarter basis, net interest income increased $2.0 million, or 4%, from $52.9 million for the first quarter of 2025. Net interest income increased by $12.0 million, or 13%, from $95.7 million for the six months ended June 30, 2024, to $107.8 million for the six months ended June 30, 2025. O’Neill noted, “We are pleased to report healthy net interest margin expansion of 25 basis points as compared to a year ago. In this higher-for-longer interest rate environment, we continue to benefit from fixed rate loan repricing and new loan origination activity. In addition, we are pleased that our core deposits represent 98% of our total funding needs compared to 97% a year ago. Core deposit growth has outpaced our loan growth in 2025, which has strengthened our liquidity position. We have begun to reinvest some maturing investment securities into higher yielding investment securities with short duration, which is also benefiting net interest margin.” Asset Quality The company recorded a provision for credit losses of $3.0 million in the second quarter of 2025, a decrease of $5.5 million as compared to $8.5 million in the second quarter of 2024. On a linked quarter basis, the provision expense decreased by $3.8 million, from $6.8 million for the first quarter of 2025. Provision expense for the second quarter and for the six months ended June 30, 2025, was primarily driven by an increase in the specific allocation for a previously disclosed $43.3 million nonperforming credit for an industrial company in Northern Indiana as well as loan growth. During the second quarter of 2025, the non-performing borrower reached an agreement to sell and liquidate the business to two unrelated entities. The transactions are expected to close in the third quarter of 2025. As a result of the pending sale and liquidation, the company recognized a charge off of $28.6 million during the second quarter, which was fully allocated at the time of the charge off. The company expects to collect the remainder of the outstanding principal balance from sale and liquidation proceeds and proceeds from the personal guarantee from the borrower. The ratio of allowance for credit losses to total loans was 1.27% at June 30, 2025, down from 1.60% at June 30, 2024, and 1.77% at March 31, 2025. The decrease in the allowance coverage was due to a significant reduction of 46%, or $26.5 million, in nonaccrual loans, which were $30.6 million at June 30, 2025 versus $57.1 million at June 30, 2024. Net charge offs in the second quarter of 2025 were $28.9 million, compared to $949,000 in the second quarter of 2024 and $327,000 during the linked first quarter of 2025. Annualized net charge offs to average loans were 2.22% for the second quarter of 2025, compared to 0.08% for the second quarter of 2024 and 0.03% for the linked first quarter of 2025. Annualized net charge offs to average loans were 1.13% for the six months ended June 30, 2025 compared to 0.05% for the six months ended June 30, 2024. Nonperforming assets decreased $26.5 million, or 46%, to $31.1 million as of June 30, 2025, versus $57.6 million as of June 30, 2024. On a linked quarter basis, nonperforming assets decreased $26.8 million, or 46%, compared to $57.9 million as of March 31, 2025. The ratio of nonperforming assets to total assets at June 30, 2025 decreased to 0.45% from 0.88% at June 30, 2024, and decreased from 0.84% at March 31, 2025. Total individually analyzed and watch list loans decreased by $76.6 million, or 29%, to $191.6 million as of June 30, 2025, versus $268.3 million as of June 30, 2024. On a linked quarter basis, total individually analyzed and watch list loans decreased by $23.9 million, or 11%, from $215.6 million at March 31, 2025. Watch list loans as a percentage of total loans were 3.67% at June 30, 2025, a decrease of 164 basis points compared to 5.31% at June 30, 2024, and 46 basis points from 4.13% at March 31, 2025. “We are pleased to have reached a resolution on the nonperforming loan that we have been working through for the past several quarters,” stated Findlay. “Importantly, our semi-annual loan portfolio reviews with all loan officers of the bank affirmed that asset quality is stable and that economic conditions in our footprint are contributing to new business development opportunities. We continue to monitor the impact of tariffs on our borrowers. It is too early to quantify the impact of U.S. trade policy on our borrowers’ businesses, although there appears to be less concern on the impact of tariffs that we heard from borrowing clients previously.” Investment Portfolio Overview Total investment securities were $1.13 billion at June 30, 2025, reflecting an increase of $5.5 million, or less than 1%, as compared to $1.12 billion at June 30, 2024. Investment securities represented 16% of total assets on June 30, 2025, as compared to 17% and June 30, 2024 and March 31, 2025. The company anticipates receiving principal and interest cash flows of approximately $54.5 million during the remainder of 2025 from the investment securities portfolio and plans to use that liquidity to fund loan growth as well as to fund reinvestments to the investment securities portfolio. Tax equivalent adjusted effective duration for the investment portfolio was 5.9 years at June 30, 2025, compared to 6.5 years at June 30, 2024 and unchanged from 5.9 years at March 31, 2025. Noninterest Income The company’s noninterest income decreased $9.0 million, or 44%, to $11.5 million for the second quarter of 2025, compared to $20.4 million for the second quarter of 2024. Noninterest income was elevated during the second quarter of 2024 as compared to the second quarter of 2025 as a result of the net gain on Visa shares of $9.0 million that was recorded in the second quarter of 2024. Adjusted core noninterest income, a non-GAAP financial measure that excludes the effect of the net gain on Visa shares and an insurance recovery, increased $58,000, or less than 1%, from $11.4 million during the second quarter of 2024. Bank owned life insurance income increased $150,000, or 17%, primarily as a result of increased general account bank owned life insurance income from the purchase of insurance policies during the second quarter of 2025. Mortgage banking income increased $101,000 due to growth in the company's mortgage pipeline, which favorably impacted secondary market loan sale gains and mortgage rate lock income. Wealth advisory fees increased $70,000, or 3%, driven by continued growth in customers and assets under management. Investment brokerage fees increased $72,000, or 15%, due to increased volume and product mix. Offsetting these increases was a decrease to other income of $296,000, or 43%, primarily driven by reduced limited partnership investment income. Noninterest income for the second quarter of 2025 increased by $558,000, or 5%, on a linked quarter basis from $10.9 million during the first quarter of 2025. Bank owned life insurance income increased $718,000, or 223%, primarily as a result of improved market performance of the bank's variable owned life insurance policies and increased general account bank owned life insurance income from the purchase of insurance policies during the second quarter of 2025. Loan and service fee income increased $122,000, or 4%, from increased interchange fee income. Mortgage banking income increased $175,000, as a result of income derived from secondary mortgage sales and pipeline growth. Investment brokerage fees income increased $98,000, or 22%. Offsetting these increases was a decrease to other income of $460,000, or 54%, primarily a result of reduced limited partnership investment income. Wealth advisory fees, which benefited in the linked first quarter of 2025 from significant estate settlement fee income decreased $200,000, or 7%. “The linked quarter improvement of noninterest income of 5% is encouraging as we continue to focus on growing our fee-based businesses,” noted Findlay. “We are particularly pleased with the continued growth of our Wealth Advisory Management area, which has recently added revenue generating employees in our footprint with a focus in Indianapolis. Assets under management in this area have reached nearly $3.0 billion at quarter end.” Noninterest income decreased by $10.6 million, or 32%, to $22.4 million for the six months ended June 30, 2025, compared to $33.1 million for the prior year six-month period. Noninterest income was elevated during the first six months of 2024 as compared to the comparable period of 2025 primarily because of the net gain on Visa shares of $9.0 million and a $1.0 million insurance recovery. Adjusted core noninterest income, a non-GAAP financial measure that excludes the impact of these non-routine events, declined $626,000, or 3%, from $23.0 million for the six months ended June 30, 2024. Other income decreased $1.6 million, or 56%, as other income during the first six months of 2024 benefited from the $1.0 million insurance recovery. Reduced limited partnership investment income further contributed to the decline between the periods. Bank owned life insurance income decreased $564,000, or 29%, primarily as a result of reduced market performance from the bank's variable bank owned life insurance policies, which correlate to returns in the equities markets. Offsetting these decreases were increases to wealth advisory fees of $482,000, or 10%, and service charges on deposit accounts of $104,000, or 2%. The increase in wealth advisory fees was primarily driven by continued growth in customers and assets under management. Noninterest Expense Noninterest expense decreased $2.9 million, or 9%, to $30.4 million for the second quarter of 2025, compared to $33.3 million during the second quarter of 2024. Noninterest expense was elevated during the second quarter of 2024 as compared to 2025 due to a $4.5 million accrual that was recorded from the resolution of a legal matter. Adjusted core noninterest expense, which excludes the impact of the legal accrual, increased $1.6 million, or 6%, from $28.8 million for the second quarter of 2024. Salaries and benefits expense increased by $938,000, or 6%. The primary drivers for the increase to salaries and benefits expense were increased salaries expense of $756,000 and increased health insurance expense of $127,000. Additionally, data processing fees and supplies expense increased $340,000, or 9%, from continued investment in customer-facing and operational technology solutions. Offsetting these increases were decreases to other expense of $3.8 million, or 62%, professional fees of $417,000, or 20%, and corporate and business development expense of $105,000, or 8%. The decrease to other expense was driven by the legal accrual recorded during the second quarter of 2024. The decrease to professional fees was primarily driven by reduced technology implementation consulting fees and swap collateral fees. Corporate and business development expense decreased primarily as a result of lower advertising expense. On a linked quarter basis, noninterest expense decreased by $2.3 million, or 7%, from $32.8 million during the first quarter of 2025. The primary drivers for the decrease to noninterest expense was a decrease to salaries and employee benefits of $806,000, or 5%, due to a reduction in HSA contributions expense of $441,000, resulting from the timing of the annual employer contribution to employee accounts, and a reduction in performance-based compensation accruals. Professional fees decreased $674,000, or 28%, and were primarily driven by reduced technology implementation consulting fees and swap collateral interest expense. Other expense decreased $353,000, or 13%, as other expense was elevated in the linked first quarter of 2025 from the timing of semiannual director share awards. Corporate and business development expense decreased by $246,000, or 18%, due to reduced advertising expense, primarily driven by the timing of when advertisement television spots were purchased and utilized. Net occupancy expense decreased $233,000, or 12%, due to reductions in seasonal expenses. Data processing fees and supplies expense decreased $113,000, or 3%. Noninterest expense decreased by $843,000, or 1%, for the six months ended June 30, 2025 to $63.2 million compared to $64.0 million for the six months ended June 30, 2024. Adjusted core noninterest expense, which excludes the impact of the $4.5 million legal accrual, increased $3.7 million, or 6%, from $59.5 million for the six months ended June 30, 2024. Salaries and benefits expense increased by $2.0 million, or 6%. Data processing fees and supplies and expense increased $766,000, or 10%. Net occupancy expense increased $289,000, or 8%, as a result of increased occupancy expense from the continued expansion of the company's branch network and improvements to existing facilities. Offsetting these increases were decreases to other expense of $3.4 million, or 41%, and professional fees of $500,000, or 11%. The company’s efficiency ratio was 45.9% for the second quarter of 2025, compared to 48.5% for the second quarter of 2024 and 51.4% for the linked first quarter of 2025. The company's adjusted core efficiency ratio, a non-GAAP financial measure, was 48.2% for the second quarter of 2024. The company's efficiency ratio was 48.6% for the six months ended June 30, 2025, compared to 49.7% for the comparable period in 2024. The company's adjusted core efficiency ratio was 50.1% for the six months ended June 30, 2024. Findlay added, “We are pleased with the improvement in our efficiency ratio, which has benefited from strong core revenue growth of 10% on a year-over-year basis. Our growth in noninterest expense is focused on continued investments in human capital, technology solutions and organic expansion of our banking footprint, particularly in Indianapolis.” 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 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 CORPORATIONSECOND QUARTER 2025 FINANCIAL HIGHLIGHTS Three Months Ended Six Months Ended(Unaudited – Dollars in thousands, except per share data)June 30, March 31, June 30, June 30, June 30,END OF PERIOD BALANCES 2025 2025 2024 2025 2024 Assets$6,964,301 $6,851,178 $6,568,807 $6,964,301 $6,568,807 Investments 1,129,346 1,132,854 1,123,803 1,129,346 1,123,803 Loans 5,226,827 5,223,221 5,052,341 5,226,827 5,052,341 Allowance for Credit Losses 66,552 92,433 80,711 66,552 80,711 Deposits 6,176,833 5,960,194 5,763,537 6,176,833 5,763,537 Brokered Deposits 150,416 125,409 161,040 150,416 161,040 Core Deposits (1) 6,026,417 5,834,785 5,602,497 6,026,417 5,602,497 Total Equity 709,987 694,509 654,590 709,987 654,590 Goodwill Net of Deferred Tax Assets 3,803 3,803 3,803 3,803 3,803 Tangible Common Equity (2) 706,184 690,706 650,787 706,184 650,787 Adjusted Tangible CommonEquity (2) 866,758 854,585 820,534 866,758 820,534 AVERAGE BALANCES Total Assets$6,904,681 $6,762,970 $6,642,954 $6,834,217 $6,598,711 Earning Assets 6,570,607 6,430,804 6,295,281 6,501,092 6,256,105 Investments 1,125,597 1,136,404 1,118,776 1,130,970 1,138,639 Loans 5,229,646 5,185,918 5,034,851 5,207,903 5,002,935 Total Deposits 6,096,504 5,874,725 5,819,962 5,986,227 5,725,196 Interest Bearing Deposits 4,852,446 4,616,381 4,589,059 4,735,066 4,472,693 Interest Bearing Liabilities 4,886,943 4,716,465 4,666,136 4,802,175 4,599,136 Total Equity 696,976 696,053 638,999 696,517 642,003 INCOME STATEMENT DATA Net Interest Income$54,876 $52,875 $48,296 $107,751 $95,712 Net Interest Income-Fully Tax Equivalent 55,986 53,983 49,493 109,970 98,176 Provision for Credit Losses 3,000 6,800 8,480 9,800 10,000 Noninterest Income 11,486 10,928 20,439 22,414 33,051 Noninterest Expense 30,432 32,763 33,333 63,195 64,038 Net Income 26,966 20,085 22,549 47,051 45,950 Pretax Pre-Provision Earnings (2) 35,930 31,040 35,402 66,970 64,725 PER SHARE DATA Basic Net Income Per Common Share$1.05 $0.78 $0.88 $1.83 $1.79 Diluted Net Income PerCommon Share 1.04 0.78 0.87 1.82 1.78 Cash Dividends Declared Per Common Share 0.50 0.50 0.48 1.00 0.96 Dividend Payout 48.08% 64.10% 55.17% 54.95% 53.93%Book Value Per Common Share (equity per share issued)$27.63 $26.99 $25.49 $27.63 $25.49 Tangible Book Value Per Common Share (2) 27.48 26.85 25.34 27.48 25.34 Market Value – High$62.39 $71.77 $66.62 $71.77 $73.22 Market Value – Low 50.00 58.24 57.59 50.00 57.59 Three Months Ended Six Months Ended(Unaudited – Dollars in thousands, except per share data)June 30, March 31, June 30, June 30, June 30,KEY RATIOS 2025 2025 2024 2025 2024 Basic Weighted Average Common Shares Outstanding 25,707,233 25,714,818 25,678,231 25,711,004 25,667,647 Diluted Weighted Average Common Shares Outstanding 25,776,205 25,802,865 25,742,871 25,782,817 25,746,773 Return on Average Assets 1.57% 1.20% 1.37% 1.39% 1.40%Return on Average Total Equity 15.52 11.70 14.19 13.62 14.39 Average Equity to Average Assets 10.09 10.29 9.62 10.19 9.73 Net Interest Margin 3.42 3.40 3.17 3.41 3.16 Efficiency (Noninterest Expense/Net Interest Incomeplus Noninterest Income) 45.86 51.35 48.49 48.55 49.73 Loans to Deposits 84.62 87.64 87.66 84.62 87.66 Investment Securities to Total Assets 16.22 16.54 17.11 16.22 17.11 Tier 1 Leverage (3) 12.21 12.30 11.98 12.21 11.98 Tier 1 Risk-Based Capital (3) 14.73 14.51 14.28 14.73 14.28 Common Equity Tier 1 (CET1) (3) 14.73 14.51 14.28 14.73 14.28 Total Capital (3) 15.86 15.77 15.53 15.86 15.53 Tangible Capital (2) 10.15 10.09 9.91 10.15 9.91 Adjusted Tangible Capital (2) 12.17 12.19 12.18 12.17 12.18 ASSET QUALITY Loans Past Due 30 - 89 Days$1,648 $4,288 $1,615 $1,648 $1,615 Loans Past Due 90 Days or More 7 7 26 7 26 Nonaccrual Loans 30,627 57,392 57,124 30,627 57,124 Nonperforming Loans 30,634 57,399 57,150 30,634 57,150 Other Real Estate Owned 284 284 384 284 384 Other Nonperforming Assets 183 193 90 183 90 Total Nonperforming Assets 31,101 57,876 57,624 31,101 57,624 Individually Analyzed Loans 52,069 81,346 78,533 52,069 78,533 Non-Individually Analyzed Watch List Loans 139,548 134,218 189,726 139,548 189,726 Total Individually Analyzed and Watch List Loans 191,617 215,564 268,259 191,617 268,259 Gross Charge Offs 29,111 508 1,076 29,619 1,580 Recoveries 230 181 127 411 319 Net Charge Offs/(Recoveries) 28,881 327 949 29,208 1,261 Net Charge Offs/(Recoveries) to Average Loans 2.22% 0.03% 0.08% 1.13% 0.05%Credit Loss Reserve to Loans 1.27 1.77 1.60 1.27 1.60 Credit Loss Reserve to Nonperforming Loans 217.25 161.04 141.23 217.25 141.23 Nonperforming Loans to Loans 0.59 1.10 1.13 0.59 1.13 Nonperforming Assets to Assets 0.45 0.84 0.88 0.45 0.88 Total Individually Analyzed and Watch List Loans to Total Loans 3.67% 4.13% 5.31% 3.67% 5.31% Three Months Ended Six Months Ended(Unaudited – Dollars in thousands, except per share data)June 30, March 31, June 30, June 30, June 30KEY RATIOS 2025 2025 2024 2025 2024, OTHER DATA Full Time Equivalent Employees 675 647 653 675 653 Offices 54 54 53 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 June 30, 2025 are preliminary until the Call Report is filed. CONSOLIDATED BALANCE SHEETS (in thousands, except share data) June 30,2025 December 31,2024(Unaudited) ASSETS Cash and due from banks$97,413 $71,733 Short-term investments 212,767 96,472 Total cash and cash equivalents 310,180 168,205 Securities available-for-sale, at fair value 996,957 991,426 Securities held-to-maturity, at amortized cost (fair value of $107,979 and $113,107, respectively) 132,389 131,568 Real estate mortgage loans held-for-sale 1,637 1,700 Loans, net of allowance for credit losses of $66,552 and $85,960 5,160,275 5,031,988 Land, premises and equipment, net 61,449 60,489 Bank owned life insurance 127,399 113,320 Federal Reserve and Federal Home Loan Bank stock 21,420 21,420 Accrued interest receivable 29,109 28,446 Goodwill 4,970 4,970 Other assets 118,516 124,842 Total assets$6,964,301 $6,678,374 LIABILITIES Noninterest bearing deposits$1,261,740 $1,297,456 Interest bearing deposits 4,915,093 4,603,510 Total deposits 6,176,833 5,900,966 Borrowings Federal Home Loan Bank advance 1,200 0 Other borrowings 5,000 0 Total borrowings 6,200 0 Accrued interest payable 9,996 15,117 Other liabilities 61,285 78,380 Total liabilities 6,254,314 5,994,463 STOCKHOLDERS’ EQUITY Common stock: 90,000,000 shares authorized, no par value 26,016,494 shares issued and 25,525,105 outstanding as of June 30, 2025 25,978,831 shares issued and 25,509,592 outstanding as of December 31, 2024 130,664 129,664 Retained earnings 757,739 736,412 Accumulated other comprehensive income (loss) (161,121) (166,500)Treasury stock, at cost (491,389 shares and 469,239 shares as of June 30, 2025 and December 31, 2024, respectively) (17,384) (15,754)Total stockholders’ equity 709,898 683,822 Noncontrolling interest 89 89 Total equity 709,987 683,911 Total liabilities and equity$6,964,301 $6,678,374 CONSOLIDATED STATEMENTS OF INCOME (unaudited - in thousands, except share and per share data)Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 NET INTEREST INCOME Interest and fees on loans Taxable$84,418 $84,226 $166,158 $166,268 Tax exempt 291 632 583 1,532 Interest and dividends on securities Taxable 3,457 3,104 6,846 6,143 Tax exempt 3,917 3,932 7,827 7,879 Other interest income 2,302 1,842 3,426 2,948 Total interest income 94,385 93,736 184,840 184,770 Interest on deposits 39,111 44,363 75,569 85,527 Interest on short-term borrowings 398 1,077 1,520 3,531 Total interest expense 39,509 45,440 77,089 89,058 NET INTEREST INCOME 54,876 48,296 107,751 95,712 Provision for credit losses 3,000 8,480 9,800 10,000 NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 51,876 39,816 97,951 85,712 NONINTEREST INCOME Wealth advisory fees 2,667 2,597 5,534 5,052 Investment brokerage fees 550 478 1,002 1,000 Service charges on deposit accounts 2,827 2,806 5,601 5,497 Loan and service fees 3,006 3,048 5,890 5,900 Merchant and interchange fee income 854 892 1,676 1,755 Bank owned life insurance income 1,040 890 1,362 1,926 Interest rate swap fee income 20 0 20 0 Mortgage banking income (loss) 124 23 73 75 Net securities gains (losses) 0 0 0 (46) Net gain on Visa shares 0 9,011 0 9,011 Other income 398 694 1,256 2,881 Total noninterest income 11,486 20,439 22,414 33,051 NONINTEREST EXPENSE Salaries and employee benefits 17,096 16,158 34,998 32,991 Net occupancy expense 1,747 1,698 3,727 3,438 Equipment costs 1,437 1,343 2,819 2,755 Data processing fees and supplies 4,152 3,812 8,417 7,651 Corporate and business development 1,160 1,265 2,566 2,646 FDIC insurance and other regulatory fees 839 816 1,639 1,605 Professional fees 1,706 2,123 4,086 4,586 Other expense 2,295 6,118 4,943 8,366 Total noninterest expense 30,432 33,333 63,195 64,038 INCOME BEFORE INCOME TAX EXPENSE 32,930 26,922 57,170 54,725 Income tax expense 5,964 4,373 10,119 8,775 NET INCOME$26,966 $22,549 $47,051 $45,950 BASIC WEIGHTED AVERAGE COMMON SHARES 25,707,233 25,678,231 25,711,004 25,667,647 BASIC EARNINGS PER COMMON SHARE$1.05 $0.88 $1.83 $1.79 DILUTED WEIGHTED AVERAGE COMMON SHARES 25,776,205 25,742,871 25,782,817 25,746,773 DILUTED EARNINGS PER COMMON SHARE$1.04 $0.87 $1.82 $1.78 LAKELAND FINANCIAL CORPORATIONLOAN DETAIL(unaudited, in thousands) June 30,2025 March 31,2025 June 30,2024Commercial and industrial loans: Working capital lines of credit loans$717,484 13.7% $716,522 13.7% $697,754 13.8%Non-working capital loans 776,278 14.9 807,048 15.5 828,523 16.4 Total commercial and industrial loans 1,493,762 28.6 1,523,570 29.2 1,526,277 30.2 Commercial real estate and multi-family residential loans: Construction and land development loans 552,998 10.6 623,905 12.0 658,345 13.0 Owner occupied loans 780,285 14.9 804,933 15.4 830,018 16.4 Nonowner occupied loans 869,196 16.6 852,033 16.3 762,365 15.1 Multifamily loans 477,910 9.1 339,946 6.5 252,652 5.0 Total commercial real estate and multi-family residential loans 2,680,389 51.2 2,620,817 50.2 2,503,380 49.5 Agri-business and agricultural loans: Loans secured by farmland 150,934 2.9 156,112 3.0 161,410 3.2 Loans for agricultural production 188,501 3.6 227,659 4.3 199,654 4.0 Total agri-business and agricultural loans 339,435 6.5 383,771 7.3 361,064 7.2 Other commercial loans 95,442 1.8 94,927 1.8 96,703 1.9 Total commercial loans 4,609,028 88.1 4,623,085 88.5 4,487,424 88.8 Consumer 1-4 family mortgage loans: Closed end first mortgage loans 273,287 5.2 265,855 5.1 259,094 5.1 Open end and junior lien loans 226,114 4.4 217,981 4.2 197,861 3.9 Residential construction and land development loans 16,667 0.3 16,359 0.3 12,952 0.3 Total consumer 1-4 family mortgage loans 516,068 9.9 500,195 9.6 469,907 9.3 Other consumer loans 103,880 2.0 102,254 1.9 97,895 1.9 Total consumer loans 619,948 11.9 602,449 11.5 567,802 11.2 Subtotal 5,228,976 100.0% 5,225,534 100.0% 5,055,226 100.0%Less: Allowance for credit losses (66,552) (92,433) (80,711) Net deferred loan fees (2,149) (2,313) (2,885) Loans, net$5,160,275 $5,130,788 $4,971,630 LAKELAND FINANCIAL CORPORATIONDEPOSITS AND BORROWINGS(unaudited, in thousands) June 30,2025 March 31,2025 June 30,2024Noninterest bearing demand deposits$1,261,740 $1,296,907 $1,212,989Savings and transaction accounts: Savings deposits 283,976 293,768 283,809Interest bearing demand deposits 3,841,703 3,554,310 3,274,179Time deposits: Deposits of $100,000 or more 584,165 602,577 776,314Other time deposits 205,249 212,632 216,246Total deposits$6,176,833 $5,960,194 $5,763,537FHLB advances and other borrowings 6,200 108,200 55,000Total funding sources$6,183,033 $6,068,394 $5,818,537 LAKELAND FINANCIAL CORPORATIONAVERAGE BALANCE SHEET AND NET INTEREST ANALYSIS(UNAUDITED) Three Months Ended June 30, 2025 Three Months Ended March 31, 2025 Three Months Ended June 30, 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) $5,204,006 $84,418 6.51% $5,160,031 $81,740 6.42% $4,993,270 $84,226 6.78%Tax exempt (1) 25,640 359 5.62 25,887 361 5.66 41,581 783 7.57 Investments: (1) Securities 1,125,597 8,416 3.00 1,136,404 8,338 2.98 1,118,776 8,082 2.91 Short-term investments 2,832 28 3.97 2,964 28 3.83 2,836 35 4.96 Interest bearing deposits 212,532 2,274 4.29 105,518 1,096 4.21 138,818 1,807 5.24 Total earning assets $6,570,607 $95,495 5.83% $6,430,804 $91,563 5.77% $6,295,281 $94,933 6.07%Less: Allowance for credit losses (93,644) (87,477) (74,166) Nonearning Assets Cash and due from banks 66,713 71,004 64,518 Premises and equipment 61,280 60,523 58,702 Other nonearning assets 299,725 288,116 298,619 Total assets $6,904,681 $6,762,970 $6,642,954 Interest Bearing Liabilities Savings deposits $285,944 $43 0.06% $283,888 $42 0.06% $289,107 $48 0.07%Interest bearing checking accounts 3,767,903 31,499 3.35 3,486,447 28,075 3.27 3,275,502 33,323 4.09 Time deposits: In denominations under $100,000 208,770 1,745 3.35 212,934 1,832 3.49 217,146 1,871 3.47 In denominations over $100,000 589,829 5,824 3.96 633,112 6,509 4.17 807,304 9,121 4.54 Other short-term borrowings 33,297 398 4.79 99,830 1,122 4.56 77,077 1,077 5.62 Long-term borrowings 1,200 0 0.00 254 0 0.00 0 0 0.00 Total interest bearing liabilities $4,886,943 $39,509 3.24% $4,716,465 $37,580 3.23% $4,666,136 $45,440 3.92%Noninterest Bearing Liabilities Demand deposits 1,244,058 1,258,344 1,230,903 Other liabilities 76,704 92,108 106,916 Stockholders' Equity 696,976 696,053 638,999 Total liabilities and stockholders' equity $6,904,681 $6,762,970 $6,642,954 Interest Margin Recap Interest income/average earning assets 95,495 5.83% 91,563 5.77% 94,933 6.07%Interest expense/average earning assets 39,509 2.41 37,580 2.37 45,440 2.90 Net interest income and margin $55,986 3.42% $53,983 3.40% $49,493 3.17% (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 $1.20 million in the three-month periods ended June 30, 2025, March 31, 2025, and June 30, 2024, respectively.(2)Loan fees, which are immaterial in relation to total taxable loan interest income for the three-month periods ended June 30, 2025, March 31, 2025, and June 30, 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 Six Months Ended Jun. 30, 2025 Mar. 31, 2025 Jun. 30, 2024 Jun. 30, 2025 Jun. 30, 2024Total Equity$709,987 $694,509 $654,590 $709,987 $654,590 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 706,184 690,706 650,787 706,184 650,787 Market Value Adjustment in AOCI 160,574 163,879 169,747 160,574 169,747 Adjusted Tangible Common Equity 866,758 854,585 820,534 866,758 820,534 Assets$6,964,301 $6,851,178 $6,568,807 $6,964,301 $6,568,807 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 6,960,498 6,847,375 6,565,004 6,960,498 6,565,004 Market Value Adjustment in AOCI 160,574 163,879 169,747 160,574 169,747 Adjusted Tangible Assets 7,121,072 7,011,254 6,734,751 7,121,072 6,734,751 Ending Common Shares Issued 25,697,093 25,727,393 25,679,066 25,697,093 25,679,066 Tangible Book Value Per Common Share$27.48 $26.85 $25.34 $27.48 $25.34 Tangible Common Equity/Tangible Assets 10.15% 10.09% 9.91% 10.15% 9.91%Adjusted Tangible Common Equity/Adjusted Tangible Assets 12.17% 12.19% 12.18% 12.17% 12.18% Net Interest Income$54,876 $52,875 $48,296 $107,751 $95,712 Plus: Noninterest Income 11,486 10,928 20,439 22,414 33,051 Minus: Noninterest Expense (30,432) (32,763) (33,333) (63,195) (64,038)Pretax Pre-Provision Earnings$35,930 $31,040 $35,402 $66,970 $64,725 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 2023 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 these periods. A reconciliation of these non-GAAP financial measures is provided below (dollars in thousands, except per share data). Three Months Ended Six Months Ended Jun. 30, 2025 Mar. 31, 2025 Jun. 30, 2024 Jun. 30, 2025 Jun. 30, 2024Noninterest Income$11,486 $10,928 $20,439 $22,414 $33,051 Less: Net Gain on Visa Shares 0 0 (9,011) 0 (9,011)Less: Insurance Recovery 0 0 0 0 (1,000)Adjusted Core Noninterest Income$11,486 $10,928 $11,428 $22,414 $23,040 Noninterest Expense$30,432 $32,763 $33,333 $63,195 $64,038 Less: Legal Accrual 0 0 (4,537) 0 (4,537)Adjusted Core Noninterest Expense$30,432 $32,763 $28,796 $63,195 $59,501 Earnings Before Income Taxes$32,930 $24,240 $26,922 $57,170 $54,725 Adjusted Core Impact: Noninterest Income 0 0 (9,011) 0 (10,011)Noninterest Expense 0 0 4,537 0 4,537 Total Adjusted Core Impact 0 0 (4,474) 0 (5,474)Adjusted Earnings Before Income Taxes 32,930 24,240 22,448 57,170 49,251 Tax Effect (5,964) (4,155) (3,261) (10,119) (7,414)Core Operational Profitability (1)$26,966 $20,085 $19,187 $47,051 $41,837 Diluted Earnings Per Common Share$1.04 $0.78 $0.87 $1.82 $1.78 Impact of Adjusted Core Items 0.00 0.00 (0.13) 0.00 (0.16)Core Operational Diluted Earnings Per Common Share$1.04 $0.78 $0.74 $1.82 $1.62 Adjusted Core Efficiency Ratio 45.86% 51.35% 48.22% 48.55% 50.11% (1)Core operational profitability was $3.4 million lower than reported net income for the three months ended June 30, 2024 and $4.1 million lower for the six months ended June 30, 2024. Contact Lisa M. O’NeillExecutive Vice President and Chief Financial Officer (574) 267-9125lisa.oneill@lakecitybank.com

Lakeland Financial Reports Record Second Quarter Performance; Net Income Grows by 20% to $27.0 Million, as Net Interest Income Expands by 14%

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