Lakeland Financial Corporation Annual Report 2019

FY2019 Annual Report · Lakeland Financial Corporation

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lakecitybank.com

LAKELAND FINANCIAL CORPORATION | 2019 ANNUAL REPORT

It is the commonality
and connectivity
with our clients that
contributes to our
ability to be more
than just a bank to
them.

Lake City Bank Shareholders, Clients
and Community Partners:

2019 represented our tenth consecutive year

of record net income and earnings per share.

The Lake City Bank team is understandably

proud of this financial performance as it

reflects a decade of dedication and hard work.

Additionally, we have reported record net

income in 30 of the last 31 years. That said,

we’d rather talk about the broader impact that

we have had in the communities we serve.

During our 147-year history, we’ve been

properly focused on building sustainable and

meaningful relationships with our clients and

communities. We have never wavered from

the understanding that our shareholders will

benefit only if we focus first on our employees,

communities and clients. That’s why we love

this annual report. Every year we get another

opportunity to talk about the relationships

that we have built with our clients and our

communities, because that’s what matters.

Throughout this annual report, you will see

a recurring theme in our client features that

focuses on our consultative way of doing

business. We try to be more than a financial

services provider to our clients and are pleased

that several of them featured in this report

reflect on our role as value-added advisor and

consultant. In a very crowded and competitive

environment, our partnership approach to

working with clients is a true differentiator and

will remain at the forefront of our relationship

building strategy.

When we think about our core values of

Honesty, Community Service, Customer

Service, Professional Development,

Stewardship, Profitability and Independence, it

is refreshing to recognize that our clients share
many of the same values. It is the commonality

and connectivity with our clients that

contributes to our ability to be more than just

a bank to them. This year, stewardship stood

out as a value both in our client stories and in

our activities over the course of 2019. While

stewardship might be a bit old-fashioned and

hard to define, our clients helped us illustrate

the concept. Several of our featured clients

observed that we are good stewards of their

resources. We’re proud of that characterization

of our relationship but it reminds us that we

share a lot in common with our clients as well.

Speaking of stewardship and community

service, we recently initiated the final phase

of a $16 million capital investment in our

Downtown Warsaw campus. Today, nearly 350

Lake City Bank team members work in the

seven buildings that represent our headquarters

presence in Warsaw. Further, over the past

decade, we have remodeled every out-of-date

office in the Lake City Bank system to bring all

of them up to current branding and operational

standards. This substantial capital commitment

is a statement of our plans for the future and

a reflection of our success in the past. We are

proud of our Hoosier roots.

Make no mistake, we understand that our role

as a community bank has evolved dramatically

over the past decade. We realized long ago

we have a singular focus on them. We are proud

that both our retail office delivery channel and

of that, just as we are proud of our 147-year

our growing digital delivery channel would

history of independence.

determine our reputation as a community bank

in the future. As a result, we’ve undertaken this

update and modernization of our offices, while

at the same time committing significant capital

and resources to our expanding technology

platforms. The speed of evolution on the

technology front is a tremendous challenge

to the community banking model. We can’t

afford to be “good enough” in delivering digital
solutions to our retail and commercial clients.

Our shareholders saw a 22% increase in our

stock price in 2019. While this is certainly

rewarding, we remain focused on our

performance over the long term. A dollar

invested in Lakeland Financial on December 31,

2000, was worth $10.74 on December 31, 2019.

Including the impact of our consistent dividend

payments, our total return was 1,819% over

that same 19-year period.

Even more challenging, today’s market is

We are well positioned for the future. We have

filled with both traditional commercial bank

invested in the technology to remain relevant

competition and rapidly emerging Fintech and

to our clients. We have built a cohesive team

non-bank competitors. In 2020, we will continue

focused on the right things. We have a strategic

to focus on our competitive positioning and

plan built around the challenges in front of us.

will make a commitment to our next generation

Finally, we have a proven history of shareholder

of digital services for both our retail and

value creation and a commitment to our

commercial clients. We will remain competitive

communities. We are grateful for the support of

on the technology front, regardless of the size

our clients, communities, employees

of our competitor’s balance sheet.

and shareholders.

Speaking of competition, according to the

FDIC, we entered the 21st century with more

than 8,500 commercial banks in the United

States. Today, there are less than 4,600 banks

in the country. Over the last two decades, we

have witnessed a significant consolidation in

our industry with nearly 50% fewer banks today

than in 1999. During the same period, Lake City

Bank has grown from $1.0 billion in total assets

to $4.9 billion today, an increase of 376%. All

of this growth has come from organic balance

sheet expansion without a single acquisition.

Why does that matter? It matters because we

have grown our balance sheet one loan and

one deposit at a time. It is not the easiest or the

fastest way to grow, but it has proven to be a

very healthy way to grow. As a result, we know

our clients and we know our communities, and

David M. Findlay
President and Chief Executive Officer

Management Committee

Board of Directors

David M. Findlay
President and Chief
Executive Officer

Michael E. Gavin
Executive Vice President
Chief Credit Officer

Lisa M. O’Neill
Executive Vice President
Chief Financial Officer

The continuity of leadership represented by our Management Committee is

critical to our success. It’s a powerful reflection of the consistency and strength

of our historical performance and of our confidence in the future. We recognize

the dynamic challenges ahead of the bank as technology continues to change

our industry and are laser-focused on the key role that technological innovation

will play in our future. While we are competitive today, we must look forward

to ensure that we remain at the forefront of our technology-based solutions.

We also recognize that our relationship-driven growth strategy is as relevant

today as it was when the bank was founded in 1872. Technology is critical,

but connectivity with our clients is just as important. In coordination with our

Senior Leadership Council, and all of our Lake City Bank team, we will make

sure to stay focused on the execution driven principles that have driven our

performance over the last 147 years.

Eric H. Ottinger
Executive Vice President
Commercial Banking

Kristin L. Pruitt
Executive Vice President
Chief Administrative
Officer

Jill A. DeBatty
Senior Vice President
People Development

J. Rickard Donovan
Senior Vice President
General Counsel

Stephanie R. Leniski
Senior Vice President
Retail Banking

Jonathan P. Steiner
Senior Vice President
Wealth Advisory Group
and Brokerage

Annually, our Board of Directors spends

an offsite day focused on the strategic

direction of the bank. In 2019, our

regional leadership teams from our five

markets spent the day with the board

reviewing their respective strategies

and plans. Our board has geographical

representation from every market, so it

was a great opportunity to ensure that

our plans for each market were aligned

and consistent with the tremendous

market knowledge that our board brings

to the table. Our Board of Directors

is much more than a governance

organization. It is an extension of our

business development teams and a true

partner in our growth and success.

Front (left to right)
Emily E. Pichon
Chairman
ExTech Plastics, Inc.
Officer and Director
Olive B Cole Foundation and
M E Raker Foundation, Inc.

Darrianne P. Christian
Civic Leader

Center (left to right)
Ronald D. Truex
Chairman
Creighton Brothers

Robert E. Bartels, Jr.
Former President and
Chief Executive Officer
Martin’s Super Markets

David M. Findlay
President and
Chief Executive Officer
Lakeland Financial Corporation
and Lake City Bank

Back (Left to Right)
M. Scott Welch
Chief Executive Officer
Welch Packaging Group

Thomas A. Hiatt
Former Founding Partner
Centerfield Capital
Partners, LP

Michael L. Kubacki
Chairman
Lakeland Financial Corporation
and Lake City Bank

Steven D. Ross
Former President
Heartland Coffee Company

Brian J. Smith
Co-Chief Executive Officer
Heritage Group, Inc.

Blake W. Augsburger
Founder and Chief
Executive Officer
LEA Professional

Bradley J. Toothaker
President and
Chief Executive Officer
Bradley Company

Daniel F. Evans, Jr.
President Emeritus
Indiana University Health

Hochstetler Grain Equipment Inc.
NAPPANEE | CLIENT SINCE 1991

Questa Education Foundation
FORT WAYNE | CLIENT SINCE 2009

Above, left to right: Rod Hooley, Vice President, Commercial Banking Officer; Jeremy
Yoder, Director, M-Line Electric; Larry Slabaugh, Chief Executive Officer; Dave Slabaugh,
President; Kevin Herschberger, Vice President; and Chad Stoltzfus, Senior Vice President,
Commercial Central Regional Manager.

At left: Dave Slabaugh, President; Larry Slabaugh, Chief Executive Officer; Jeremy Yoder,
Director, M-Line Electric; and Kevin Herschberger, Vice President.

Above, left to right: Denise Ramsey, Retail Banking Officer; Emily Pichon, Cole Foundation,
Questa Board Vice Chair; Gary Adkins, President, Parkview Noble Hospital, Questa Board
Chair; Jenny King, Vice President, Personal Trust Officer; Andy Haddock, Senior Vice
President, Chief Investment Officer; and Marc Levy, Executive Director.

At left: Marc Levy, Executive Director; Emily Pichon, Cole Foundation, Questa Board Vice
Chair; and Gary Adkins, President, Parkview Noble Hospital, Questa Board Chair.

Travel through farm country in Indiana and you’ll undoubtedly
notice grain storage and handling systems dotting the countryside.
At first glance, they seem quite similar, but a visit to Hochstetler
Grain Equipment, Inc. will show you that they are anything but. At
Hochstetler, which has been designing, installing and providing
service for grain handling systems for more than 50 years, creating
the system that is just right for each customer takes careful planning
and design, followed by a quality build. But that isn’t the end of the
process. Hochstetler’s customer relationships continue for decades
with long-term service, upgrades and expansion. Hochstetler prides
itself on taking care of each client individually over the long term.

“We’re very service oriented,” said Dave Slabaugh, President.
“Everything we build is carefully designed based on our
customers’ needs.” Hochstetler’s long-term relationships extend
to Lake City Bank, where it has been a customer since 1991. The
company has a commercial line of credit, commercial deposits
and uses a variety of technology-driven treasury management
solutions and merchant services. “We like Lake City Bank,” said
Larry Slabaugh, Chief Executive Officer. “Other banks have tried
to come in here and get our business, and they’ll keep trying,
but we’re not interested. The bank has done a good job and we
appreciate it.”

Since 1973, the Questa Education Foundation has grown from

increase access to post-secondary education, help students

funding post-secondary education to a foundation creatively

complete their programs with less debt, and to retain talent in

addressing the larger issue of economic success in the 11

Northeast Indiana,” said Marc Levy, Executive Director. Lake

counties of Northeast Indiana. Over the years, Questa has

City Bank provides investment management and banking

evolved by working with businesses to design programs

services to Questa. “It’s been a good fit,” Levy said. “We’re

that fund education and training for employees, often in the

both local organizations that care about improving the business

form of forgivable loans, which significantly reduce student

environment in Northeast Indiana.” The formula seems to be

debt. Northeast Indiana benefits from a more highly trained

working. Questa has helped more than 1,000 scholars since

workforce, and talent that stays in the area. “Our goals are to

2007, with graduation rates nearly double the national average.

Stauffer Dental Associates
ELKHART | CLIENT SINCE 2015

Patriot Products, LLC
FRANKLIN | CLIENT SINCE 2017

Above, left to right: Ron BonDurant, Vice President, Commercial Banking Officer; Randy Stauffer, DDS; Melissa
Blosser, Vice President, Retail Banking Regional Manager; Richard Delks, Vice President, Wealth Advisor; and
Randy Crouch, Vice President, Trust Officer and Retirement Services Manager.

At left: Randy Stauffer, DDS.

Above, left to right, back row: Bill Redman, Senior Vice President, Commercial Indianapolis
Regional Manager; Amy Counts, Vice President, Commercial Banking Officer; Jerry
Johnson, President; Mike Saunders, Vice President; and Jill Jackson, Chief Financial
Officer. Front row, left to right: Daniel Johnson, Vice President, Marketing; Myrta McQueen,
Business Operations Manager; and Joe Waltermann, Vice President, Retail Banking Officer.

At left: Mike Saunders, Vice President; Jerry Johnson, President; and Daniel Johnson, Vice
President, Marketing.

Randy Stauffer, DDS, started his dental practice in Elkhart in
1996, just after graduating from dental school. While his business
has grown in size, serving individuals and families in Elkhart
and surrounding areas, Stauffer and his staff have worked hard
to expand the services they offer as well. The latest advances
in dental care and cosmetic dentistry are available at Stauffer
Dental Associates, but its goal has remained traditional—
providing the best care and comfort to patients. “I really enjoy
being a dentist,” Stauffer said. “It’s a privilege for me to have
anyone place their dental health care needs in my hands, and

it’s a responsibility I take very seriously.” Stauffer has worked with
Lake City Bank since 2015. The bank provides commercial loans
and deposits, and a 401(k) plan for employees to the business.
On the personal side, Lake City Bank provides personal accounts,
including services from Lake City Bank’s Wealth Advisory Group.
“Working with Lake City Bank has been a good fit for me and for
my practice,” Stauffer said. “I’ve found that the people I work with
at Lake City give the same care and attention to my business as I
hope my patients experience from me and my team.”

Patriot Products may have started small—creating a single product
in a barn in Franklin, Indiana—but the company has grown in more
ways than one since its entrepreneurial start in 2008. Patriot Products
specializes in the design and build of custom military applications and
products. Its products range from both ground and full-scale aerial
targets for shooting ranges, to robotics, to site-built, realistic villages
designed for urban combat training. Patriot Products is a trusted
partner to the U.S. Military, United States Special Operations Command
(SOCOM), the Department of Defense, state and local governments
and U.S. allies around the world based on their quality products,

design and commitment to client satisfaction. “We build relationships
with our clients that last for years because they’re not based on price,
but rather on service after the sale,” said Jerry Johnson, President.
Patriot Products chose Lake City Bank for much the same reason. The
company has loan products, technology-driven treasury management
products, and credit cards with Lake City Bank. “The bank offered more
than we expected right from the start,” said Johnson. “Others didn’t
understand the business we were building, but Lake City Bank listened
and understood. As soon as we met Amy, we felt comfortable.”

Minnick Services Corporation
FORT WAYNE | CLIENT SINCE 2009

Pike Lumber Company, Inc.
AKRON | CLIENT SINCE 1994

Above, left to right: Grant Daily, Vice President, Commercial Banking Officer; Jani
MacDowell, Chief Financial Officer; Grace Minnick; Mark Minnick, Chief Executive Officer;
Cammy Treadway, Senior Vice President, Commercial East Regional Manager; Alice
Minnick, President; and Matt Minnick, Production Manager.

At left: Alice Minnick, President; and Mark Minnick, Chief Executive Officer.

Above, left to right: Rich Solano, Corporate Treasurer; Craig Brouyette, Executive Vice
President; Jane Murphy, Vice President, Retail Banking Officer; Samantha Howard, Vice
President of Administration; Jim Steen, President; and Nate Conley, Vice President,
Commercial Banking Officer.

At left: Rich Solano, Corporate Treasurer; Samantha Howard, Vice President of
Administration; Jim Steen, President; and Craig Brouyette, Executive Vice President.

Minnick Services has grown quite a bit since 1978. The Fort Wayne-
based company serves 36 counties in Northeast and Central Indiana,
as well as Northeast Illinois. Minnick manufactures precast concrete
products including burial vaults, concrete manhole structures,
retaining walls, and a precast custom utility system for installing light
poles. Minnick prides itself on supplying the highest quality products
that are manufactured using specialized concrete formulations that
provide the strength and durability required for each application.
Minnick’s employees are a big part of its success—its team includes
many family connections and second-generation workers proud to

join the company. Minnick has worked with Lake City Bank since
2009, using commercial loans, deposits and a variety of treasury
management solutions in addition to personal accounts. Perhaps
most important, the company relies on Lake City Bank for more
than financial solutions. “We use the bank like it’s supposed to be
used,” said Mark Minnick, Chief Executive Officer. “We use Lake
City Bank, and Grant Daily in particular, as a sounding board and
advisor to help us make wise decisions. We have a responsibility
to be good stewards of our resources and Lake City Bank is a big
part of that.”

Pike Lumber provides fine, kiln-dried North American hardwood
lumber for clients across the country and across the world. Its
technology-driven production facilities enable the company to produce
high quality lumber based on exacting customer specifications. Pike
Lumber owns and manages forestland in Indiana, Ohio and Michigan,
using university-trained foresters to improve and harvest timber
according to sustainable forestry management methods. While Pike
Lumber, in business since 1904, is Indiana’s largest manufacturer
and distributer of kiln-dried hardwood lumber, the company’s growth
has revolved around quality lumber and forest stewardship. “We

manage forestland—our own and our customers’—based first
and foremost on good stewardship,” said Jim Steen, President.
“While we want to meet goals, including income, from the land
we manage, we also look to sustain and improve forestland
over time.” Pike Lumber has worked with Lake City Bank since
1994. In addition to a line of credit, the bank also provides credit
cards, Health Savings Accounts for employees, and a suite
of technology-driven treasury management solutions. “We’re
pleased with our relationship with Lake City Bank,” Steen said.
“They understand our business and our needs very well.”

Northern Indiana Axle and
Financial Wellness Partner Program
ACTIVE SINCE 2019

Iotron Industries USA
COLUMBIA CITY | CLIENT SINCE 2010

Above, left to right: Ken Mullet, Owner; Kylee Coughenour, Financial Wellness Officer;
Katina Stephenson, Assistant Vice President, Retail Banking Officer; Meg Waddell, Vice
President, Retail Banking Regional Manager; Steven Mullet, Senior Production Manager; and
Marcus Mullet, Purchasing Manager.

At left: Kylee Coughenour, Financial Wellness Officer; and Meg Waddell, Vice President,
Retail Banking Regional Manager.

Above, left to right: Cameron Plew, Vice President, Commercial Banking Officer; Aaron
Starkey, Vice President of U.S. Operations; Jeff Blakely, General Manager; Joe Kessie,
Senior Vice President, Commercial South Regional Manager; and Tino Pereira, President
and Chief Executive Officer.

At left: Aaron Starkey, Vice President of U.S. Operations; Jeff Blakely, General Manager; and
Tino Pereira, President and Chief Executive Officer.

Northern Indiana Axle in Nappanee has been a Lake City Bank client
since 1989. The company has been growing since Ken Mullet, Owner,
purchased it in 1989, when the shop made axles for horse-drawn
buggies in an all-manual process. Fast forward to today, and Northern
Indiana Axle has expanded to a larger shop, more employees and nearly
two dozen high-tech machining tools for producing a variety of parts.
“We decided that we needed to get on with it or get out of it,” Mullet
said. “We needed to expand our shop and our capabilities to compete.”
Lake City Bank helped, providing business accounts, commercial
loans, and personal accounts. More recently, the bank was able to
provide something extra for Northern Indiana Axle’s employees—its new
Financial Wellness Partner Program. “We developed this financial literacy

program because we knew our customers wanted to help employees
succeed financially in addition to succeeding at work,” said Meg
Waddell, Vice President, Retail Banking Regional Manager, who led the
team that developed the program. “We’ve trained team members in
every branch to deliver workshops related to financial wellness.” The
program, offered at no cost, includes 14 different topics. Employers
can choose to offer any number of workshops and Lake City Bank
will lead the class and provide all the materials. “We’ve had a great
response to the program,” Waddell said. “It’s a benefit that employers
can offer at no cost to them, and it can really make a difference for
employees. We’re very happy with that.”

Iotron Industries USA partnered with Lake City Bank right from
the start when it decided to locate in Indiana in 2010. Iotron uses
electron beam technology, including its patented IMPELA® service,
to sterilize materials using a process that produces no waste since
it is powered by electricity (unlike methods that use radioactive
or other hazardous materials). Northern Indiana has proven to be
a good location for the company, as its technology is particularly
well suited to sterilization of medical equipment and agricultural
products, both important industries in the area. Iotron was looking
for the right financial partner when it moved to the area, and Lake

City Bank had the collaborative, family environment they were
looking for. “We see Lake City Bank as a trusted partner and
like how the bank focused on developing a sustainable long-
term relationship with us,” said Tino Pereira, President and Chief
Executive Officer. “Cameron and Joe provide great support and
connection with an intent to help us grow our business. They’re
responsive and receptive to the goals we want to accomplish.”
Iotron looks to Lake City Bank to provide commercial loans and
deposits and technology-driven treasury management solutions, in
addition to personal accounts.

Five Year Summary of Financial Highlights

(in thousands, except share and per share data)

Condensed Consolidated Balance Sheets

(Years ended December 31)
(in thousands, except share data)

End of Period Balances

Assets
Deposits
Loans, net of Deferred Fees
Allowance for Loan Losses
Total Equity

Average Balances

Assets

Total Assets
Earning Assets
Investments - Available-for-Sale
Loans, net of Deferred Fees

Liabilities and Equity
Total Deposits
Interest Bearing Deposits
Interest Bearing Liabilities
Total Equity

Income Statement Data

Net Interest Income
Net Interest Income - Fully Tax Equivalent
Provision for Loan Loss
Non Interest Income
Non Interest Expense
Net Income

Per Share Data

Basic Net Income Per Common Share
Diluted Net Income Per Common Share
Cash Dividends Per Common Share
Dividend Payout
Book Value Per Common Share
Basic Weighted Average Common Shares Outstanding
Diluted Weighted Average Common Shares Outstanding

Key Ratios

Return on Average Assets
Return on Average Total Equity
Average Equity to Average Assets
Net Interest Margin
Efficiency
Net Charge Offs to Average Loans
Loan Loss Reserve to Total Loans
Loan Loss Reserve to Nonperforming Loans
Nonperforming Assets to Total Loans

2019
$4,946,745
4,133,819
4,065,828
50,652
598,100

$4,941,904
4,656,707
603,580
3,974,532

$4,242,524
3,298,406
3,390,512
562,601

$155,047
157,176
3,235
44,997
89,424
87,047

$3.40

3.38

1.16

34.32%

$23.34

2018
$4,875,254
4,044,065
3,914,745
48,453
521,704

2017
$4,682,976
4,008,655
3,818,459
47,121
468,667

2016
$4,290,025
3,577,912
3,470,927
43,718
427,067

2015
$3,766,286
3,183,421
3,080,929
43,610
392,901

$4,758,392
4,461,366
562,385
3,843,912

$4,443,106
4,183,112
530,275
3,610,908

$4,039,719
3,799,963
493,656
3,225,635

$4,093,894
3,235,867
3,382,507
487,062

$3,757,209
2,967,902
3,178,439
450,796

$3,477,816
2,753,466
2,872,691
416,034

$151,271
153,088
6,400
40,302
86,229
80,441

$3.18

3.13

1.00

31.95%

$20.62

$135,892
139,015
3,000
36,040
79,298
57,330

$2.28

2.23

0.85

38.12%

$18.60

$118,481
120,719
1,150
32,864
72,978
52,084

$2.08

2.05

0.73

35.61%

$17.01

$3,597,190
3,384,178
476,153
2,885,568

$3,088,598
2,478,674
2,589,915
378,106

$105,927
107,902
0
31,479
68,206
46,367

$1.86

1.84

0.63

34.36%

$15.74

25,588,404

25,758,893

25,288,533

25,181,208

25,056,095

24,926,354

25,727,831

25,663,381

25,460,727

25,245,569

1.76%

15.47%

11.38%

3.38%

44.70%

0.03%
1.25%

270.58%

0.47%

1.69%

16.51%

10.24%

3.43%

45.01%

0.13%
1.24%

1.29%

12.72%

10.15%

3.33%

46.11%

-0.01%
1.23%

1.29%

12.52%

10.30%

3.18%

48.22%

0.03%
1.26%

1.29%

12.26%

10.51%

3.19%

49.64%

0.09%
1.42%

667.40%

500.91%

653.31%

334.04%

0.19%

0.25%

0.20%

0.43%

The following selected data has been taken from the Company’s consolidated financial statements. Refer to Lakeland Financial Corporation’s
Annual Report on Form 10-K for the year 2019 for a complete set of consolidated financials.

Assets

Cash and due from banks

Short-term investments

Total cash and cash equivalents

Securities available-for-sale (carried at fair value)

Real estate mortgage loans held-for-sale

Total loans

Less: Allowance for loan losses

Net Loans

Land, premises and equipment, net

Bank owned life insurance

Federal Reserve and Federal Home Loan Bank stock

Accrued interest receivable

Goodwill

Other assets

Total Assets

Liabilities

Non Interest bearing deposits

Interest bearing deposits

Total deposits

Accrued interest payable and other liabilities

FHLB advances and other borrowings

Subordinated debentures

Total Liabilities

Stockholders’ Equity

Common stock: 90,000,000 shares authorized, no par value

Retained earnings

Accumulated other comprehensive income (loss)

Treasury stock

Total Stockholders’ Equity

Total Noncontrolling Interest

Total Equity

Total Liabilities and Stockholders’ Equity

End of period shares issued

End of period shares outstanding

2019
$68,605

30,776

99,381

608,233

4,527

4,065,828

50,652

4,015,176

60,154

83,848

13,772

15,391

4,970

41,293

2018
$192,290

24,632

216,922

585,549

2,293

3,914,745

48,453

3,866,292

58,097

77,106

13,772

15,518

4,970

34,735

$4,946,745

$4,875,254

$983,307

3,150,512

4,133,819

44,826

170,000

4,348,645

114,858

475,247

12,059

(4,153)

598,011

598,100

$4,946,745

25,623,016

25,444,275

$946,838

3,097,227

4,044,065

33,002

245,555

30,928

4,353,550

112,383

419,179

(6,191)

(3,756)

521,615

521,704

$4,875,254

25,301,732

25,128,773

Report of Independent Registered Public Accounting Firm

Stockholders and the Board of Directors of Lakeland Financial Corporation, Warsaw, Indiana

See Annual Report on Form 10-K

We have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets
of Lakeland Financial Corporation as of December 31, 2019 and 2018, and the related consolidated statements of income, comprehensive income, changes in
stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2019 (not presented herein); and in our report dated February
24, 2020, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed
consolidated financial statements is fairly stated, in all material respects, in relation to the December 31, 2019 consolidated financial statements from which it has
been derived.

Crowe LLP, South Bend, Indiana, February 24, 2020

Condensed Consolidated Statements of Income

Corporate Information

(Years ended December 31)
(in thousands, except for share and per share data)

Interest Income

Interest and fees on loans
Interest and dividends on securities

Taxable
Tax exempt

Interest on short-term investments
Total Interest Income

Interest Expense
Interest on deposits
Interest on FHLB advances and other borrowings

Total Interest Expense

Net Interest Income
Provision for loan losses

Net Interest Income After Provision for
Loan Losses
Non-interest Income

Wealth advisory and investment brokerage income
Service charges on deposit accounts
Loan and service fees
Merchant card fee income
Bank owned life insurance income
Mortgage banking income
Net securities gains (losses)
Other income

Total Non Interest Income

Non-interest Expense

Salaries and employee benefits
Occupancy and equipment expense
Data processing fees and supplies
Other expense

Total Non Interest Expense

Income Before Income Tax Expense

Income tax expense

Net Income

BASIC WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
BASIC EARNINGS PER COMMON SHARE
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
DILUTED EARNINGS PER COMMON SHARE

2019
$197,684

2018
$182,265

2017
$151,024

8,909

7,127

1,490

9,717

6,079

909

9,218

5,102

354

215,210

198,970

165,698

57,148
3,015
60,163

155,047
3,235
151,812

8,522
15,717
9,911
2,641
1,890
1,626
142
4,548
44,997

49,434
10,816
10,407
18,767

89,424

44,913
2,786
47,699

151,271
6,400
144,871

7,802
15,831
9,291
2,461
1,244
1,150
(50)
2,573
40,302

48,353
10,392
9,685
17,799

86,229

27,026
2,780
29,806

135,892
3,000
132,892

6,754
13,696
7,900
2,279
1,768
982
32
2,629
36,040

45,306
9,224
8,233
16,535

79,298

107,385
20,338
$87,047

25,588,404
$3.40
25,758,893
$3.38

98,944
18,533
$80,411

25,288,533
$3.18
25,727,831
$3.13

89,634
32,304
$57,330

25,181,208
$2.28
25,663,381
$2.23

See Annual Report on Form 10-K

Nature of Business
Lakeland Financial Corporation is a $4.9 billion bank
holding company located in Warsaw, Indiana. Lake City
Bank, its single bank subsidiary, is the sixth largest bank
headquartered in the state and the largest bank 100%
invested in Indiana. Lake City Bank operates 50 offices in
Northern and Central Indiana, delivering technology-driven
and client-centric financial services solutions to individuals
and businesses.
Headquarters
Lakeland Financial Corporation
202 E Center Street
Warsaw, IN 46580
(574) 267-6144
(800) 827-4522
lakecitybank.com
Annual Meeting
Tuesday, April 14, 2020
4:30 p.m. – Annual meeting followed by a reception
Embassy Theatre
125 W Jefferson Boulevard, Fort Wayne, IN 46802
Common Stock Listing
Lakeland Financial Corporation common stock is traded on
the Nasdaq Global Select Market under the symbol “LKFN.”
Market Makers
Robert W. Baird & Co. Incorporated
Bofa Securities, Inc.
Cantor Fitzgerald & Co.
Citadel Securities LLC
Cowen and Company, LLC
Canaccord Genuity Inc.
Canaccord Genuity LLC.
Citadel Derivatives Group LLC
D.A. Davidson & Co.
G1 Execution Services, LLC
Goldman, Sachs & Co. LLC
GTS Securities LLC
Janney Montgomery Scott Inc.
IMC Financial Markets
Jefferies LLC
Keefe, Bruyette & Woods, Inc.
Keybanc Capital Markets Inc.
Maxim Group LLC
Morgan Stanley & Co. LLC
OTA LLC
VIRTU Americas LLC
Piper Sandler & Co.
Puma Capital, LLC
Raymond James & Associates, Inc.
RBC Capital Markets, LLC
SG Americas Securities, LLC
Two Sigma Securities, LLC
Stephens, Inc.
Susquehanna Securities
Stifel, Nicolaus & Company, Incorporated
Susquehanna Financial Group, LLP
UBS Securities LLC
Wall Street Access
Wells Fargo Securities, LLC
Wolverine Securities, LLC
Latour Trading LLC

Stock Transfer Agent and Registrar
American Stock Transfer and Trust Company
6201 15th Avenue
Brooklyn, NY 11219
(800) 937-5449
(718) 236-4588 fax
info@astfinancial.com
astfinancial.com
Dividend Reinvestment and Stock
Purchase Plan
Lakeland Financial Corporation offers stockholders a
convenient way to increase their investment through the
Lakeland Financial Dividend Reinvestment and Stock Purchase
Plan. Under the plan, investors can elect to acquire Lakeland
Financial shares in the open market by reinvesting dividends
and through optional cash payments. Lakeland Financial
absorbs the fees and brokerage commissions on shares
acquired through the plan. To obtain a plan prospectus and
authorization form, call Tina Rensberger at (800) 827-4522. The
plan prospectus is also available on the company’s website at
lakecitybank.com.
Direct Deposit of Dividends
The direct deposit program, which is offered at no charge,
provides for automatic deposit of quarterly dividends directly to
a checking or savings account. For information regarding this
program, call Tina Rensberger at (800) 827-4522.
Form 10-K and Other Financial Reports
The company maintains a website at lakecitybank.com. The
company makes available free of charge on this site its annual
report on Form 10-K, quarterly reports on Form 10-Q, current
reports on Form 8-K and other reports filed or furnished
pursuant to Section 13(a) or 15(d) of the Exchange Act as
soon as reasonably practicable after it electronically files such
material with, or furnishes it to, the Securities and Exchange
Commission. The company will also provide copies of its filings
free of charge upon written request to:
Lakeland Financial Corporation
Attn: Investor Relations
PO Box 1387
Warsaw, IN 46581-1387
Corporate Governance
Lakeland Financial Corporation corporate governance
documents are available on the company’s website at
lakecitybank.com or may be obtained in print form by
contacting Tina Rensberger at (800) 827-4522.
Independent Registered Public
Accounting Firm
Crowe LLP
330 E Jefferson Boulevard
PO Box 7
South Bend, IN 46624-0007
Corporate Counsel
John Freechack
Barack Ferrazzano Kirschbaum & Nagelberg LLP
200 W Madison Street
Suite 3900
Chicago, IL 60606

Lake City Bank Officers

Lake City Bank Offices

Management Committee
David M. Findlay
President &

Chief Executive Officer

Michael E. Gavin
Executive Vice President

Chief Credit Officer

Lisa M. O’Neill
Executive Vice President
Chief Financial Officer

Eric H. Ottinger
Executive Vice President
Commercial Banking

Kristin L. Pruitt
Executive Vice President

Chief Administrative Officer

Jill A. DeBatty
Senior Vice President
People Development

J. Rickard Donovan
Senior Vice President
General Counsel

Stephanie R. Leniski
Senior Vice President

Retail Banking

Jonathan P. Steiner
Senior Vice President

Wealth Advisory Group & Brokerage

Brokerage
Vice President
Scott M. Hartman
Adam C. Johnston

Officer
Zachary A. Fiandt
Lori A. Richcreek

Commercial Banking
Senior Vice President—Regional
Manager
Todd A. Bruce
Joseph F. Kessie
William R. Redman
J. Chad Stoltzfus
Camalyn M. Treadway

Vice President
Ronald L. BonDurant
Gregory C. Brown
Nathan R. Conley
Amy M. Counts
Grant N. Daily
David E. Davis
John F. Dietzen
David S. Frey
Chad A. Glassburn
Keith B. Goodman
Ryan L. Hart
Matthew J. Highbarger
Ryan J. Hoffman
Rodney B. Hooley
Karese E. Kitch
Gregory W. Lentz
Cory E. McClarnon
Patricia T. McNarney
Gavin S. Miller
Everett L. Nifong
Cameron V. Plew
Michael J. Ryan
Timothy M. Schlichte
D. Andrew Skaggs
Eric J. Steenman
Nicholas A. Toney
Steven J. Troike
Marshall C. Weadick
Christopher W. Wiggins
Amber M. Wolfer

Assistant Vice President
Holly A. Davis
Cari J. Juillerat
Kris J. Kerlin
Sara B. Millspaugh
Kevin R. Poe
Nathan R. Poe
Stacy M. Richardson
Robin R. Ritchie

Officer
Corbin J. Holtsberry
Kelsey M. Jenkins
Luke C. Mungovan
Elizabeth A. Schmidlin

Consumer & Home Loans
Senior Vice President
Kirtus D. Murray

Vice President
Craig R. Atz
Denise M. Brennan
Sabrina N. Brown
Scott B. Bucher
Glenn A. Goudey
Jodi L. Hammond
Jeffery W. Krusenklaus
W. John Pritz
Mark R. Rensner
Sue L. Sands

Assistant Vice President
Holly N. Clevenger
Chad J. Clinton
Anna A. Jimenez
Kristi L. Manwaring
Sarah J. Miller-Bontrager
Todd E. Pequignot
Amanda M. Tom
J. Mark Ulrich

Officer
Heidi B. Bruner

Corporate & Institutional Services
Senior Vice President
Douglas R. Samuels

Vice President
Anna N. Corkill
Melanie A. McIntyre
Sheena L. White
Tabitha A. Williamson

Assistant Vice President
Michelle L. Harris

Officer
Tiffany R. Peterson
Grant R. Toney

Credit Administration
Senior Vice President
Kimberly A. Hooley
H.A. “Rocky” Meyer

Vice President
Ronald E. Cotton
Bradford S. Grabow
Benjamin A. Rice
Donald J. Robinson-Gay

Assistant Vice President
David J. Curry
Amanda R. Ellsworth
Justin T. Hayes
Megan E. Ottinger
Matthew R. Smith

Officer
Joseph D. Burtnette
Jeffrey L. Wyckoff

Executive Administration
Officer
Tina A. Rensberger

Finance & Treasury
Senior Vice President
Jennifer M. Hurford—Treasurer
Brok A. Lahrman—Chief Accounting
Officer

Vice President
Melissa D. Davison
Brian M. Lamb
Ryan D. Neese

Assistant Vice President
Stacy L. Price
Becka J. Turnbow
Beth A. Weber

Officer
Samantha D. Ducey

Marketing
Vice President—Manager
Mary S. Horan

Vice President
Cindy A. Bateman

Assistant Vice President
Caitlin E. Steiner

Operations
Senior Vice President
Lisa A. Fulton

Vice President
Lili A. Dailey
Shannan L. Hepler
Jan R. Martin
Eric D. Wagoner

Assistant Vice President
Leslie R. Baker
Sherri L. DiRico
Tana J. Johnson
Miranda R. Jordon
Karla J. Kroll
Natalie M. Ousley

Officer
Christine M. Himes
Ashley R. Hite
Jennifer R. Hochstetler
Cynthia L. Montel
Jennifer L. Mosier

People Development
Vice President
Alice G. Hitchcock
Kathleen M. Keirn
Tori L. Platt

Assistant Vice President
Ana Karina Cervantes
Vicki J. Jones
Mary A. Lepird

Officer
Rhonda K. Frank
Brianna D. Kreczmer

Property Management
Vice President
Rick Hatcher

Officer
Richard A. Hoover

Retail Banking
Retail Banking Advisor
Kevin L. Deardorff

Senior Vice President—Regional
Manager
Bruce A. Wright

Vice President—Regional Manager
Melissa J. Blosser
Karen A. Francis
Sara B. Hill

Pamela F. Messmore
Margaret A. Waddell

Officer
Kylee M. Coughenour
Megan L. Sutter

Risk Management
Senior Vice President
Matthew D. VanDeWielle

Vice President
Teresa A. Bartman
Gloria J. Crawford
Jeannine P. Draper Cooley
Candy A. Little
Amanda M. Longmire
Kyle G. Schmidt

Assistant Vice President
Kristin D. Brown
Aaron T. Connell
Eric D. Neuenschwander
Victoria L. Starr
Rafael M. Villalon

Officer
Wendy N. Brown
Hilda E. Cantu
Kristina R. Kiracofe
Kimberly A. Knoerzer
Dakotah B. Lantz
Ashley L. Pluta

Technology Services
Senior Vice President
Angela K. Ritchey

Vice President
Joanie L. Foreman
George H. Goodlink
Jolene D. Howard
Christopher D. Merrill
Donna J. Wolfe

Assistant Vice President
Lisa M. Bicknese
Jean A. Ciriello
Lisa S. Fitzgerald
Michele R. Ganser
Jill E. Garber
R. David Hume
Scot A. Karbach
Evan R. Kehr
Sean P. Raver
Melissa S. Rupe
Diane M. Wirth

Officer
Jordan M. Bell
Kimberly K. Mattke

Wealth Advisory Group
Senior Vice President
Andrew R. Haddock
James D. Westerfield

Vice President
Randall J. Crouch
Richard A. Delks
Michelle L. Kindler
Jennifer I. King
Peggy L. Michel
Benjamin D. Shively
Reneta U. Thurairatnam

Assistant Vice President
Lisa A. Mansberger
Leslie E. Rohrer

Officer
Steven B. Burnside
Deborah R. Cataldo
Calisa M. Doll

Akron
Argos
Auburn
Bremen
Columbia City
Concord
Elkhart Beardsley
Elkhart East

Elkhart Northwest
Fishers
Fort Wayne Downtown

Fort Wayne Jefferson
Fort Wayne North
Fort Wayne Northeast
Fort Wayne Southwest
Goshen Downtown
Goshen South

Granger
Greenwood
Huntington
Indianapolis Clearwater
Indianapolis Downtown
Indianapolis Michigan Road
Indianapolis North
Jimtown
Kendallville
LaGrange
Ligonier Downtown
Ligonier South
Medaryville
Mentone

Middlebury
Milford
Mishawaka
Nappanee
North Webster
Pierceton
Plymouth
Rochester
Shipshewana
Silver Lake
South Bend Downtown

South Bend Northwest
Syracuse
Warsaw Downtown
Warsaw East
Warsaw North
Warsaw West
Winona Lake

L. Jane Murphy
Kimberly K. Vermillion
Rebekah K. Hefty
Sonia R. Teske
Carolyn M. Ross
Andrea R. Bowers
Rebecca L. Miller
Phillip G. Ensley
Alexandra L. Mitchell
Emily E. Wold
Dana L. Hess
Denise M. Ramsey
Bruce A. Wright
Robert J. Savage
Steve D. Schumacher
Philip W. Dwire, Jr.
Amy M. Weisman
Angela M. Daly
Rosa M. Alba
Margaret A. Waddell
Kathryn A. Smith
Joseph P. Waltermann
Paula J. Whiting
Dereck L. Stinson
Jody M. Meyer
Terry L. Bradley
Sara B. Hill
Steven Colagrossi
Barbara E. Keene
Mareen L. Barton
Lori I. Cunningham
Jana L. Miller
Karen S. Scott
Karen A. Francis
Kimberly S. Orr
Lindsay N. Stanifer
Cheryl L. Luke
Fidencio Bueno
Katina A. Stephenson
Brenda S. Peterson
Kelli-Anna Cook
Carol D. Brown
Penny S. Ramsey
Jennifer M. Wilson
Sandra A. Nelson-Rowland
Melissa J. Blosser
Christina J. Myer
Mark A. Berta
Kimberly K. Strawbridge
Shelly R. Kammerer
Jennifer M. Orr
Pamela F. Messmore
Kathleen Madden
Sheryl L. Harlan

Vice President, Retail Banking Officer
Assistant Vice President, Retail Banking Officer
Vice President, Retail Banking Officer
Assistant Vice President, Retail Banking Officer
Retail Banking Officer
Retail Banking Officer
Vice President, Retail Banking Officer
Vice President, Retail Banking Officer
Assistant Retail Banking Officer
Retail Banking Officer
Vice President, Retail Banking Officer
Retail Banking Officer
Senior Vice President, Regional Manager
Vice President, Retail Banking Officer
Vice President, Retail Banking Officer
Vice President, Retail Banking Officer
Vice President, Retail Banking Officer
Assistant Vice President, Retail Banking Officer
Assistant Vice President, Retail Banking Officer
Vice President, Regional Manager
Vice President, Retail Banking Officer
Vice President, Retail Banking Officer
Vice President, Retail Banking Officer
Vice President, Retail Banking Officer
Vice President, Retail Banking Officer
Assistant Vice President, Retail Banking Officer
Vice President, Regional Manager
Vice President, Retail Banking Officer
Vice President, Retail Banking Officer
Retail Banking Officer
Assistant Vice President, Retail Banking Officer
Assistant Vice President, Retail Banking Officer
Assistant Vice President, Retail Banking Officer
Vice President, Regional Manager
Assistant Retail Banking Officer
Assistant Vice President, Retail Banking Officer
Assistant Vice President, Retail Banking Officer
Vice President, Retail Banking Officer
Assistant Vice President, Retail Banking Officer
Vice President, Retail Banking Officer
Retail Banking Officer
Vice President, Retail Banking Officer
Assistant Vice President, Retail Banking Officer
Retail Banking Officer
Assistant Vice President, Retail Banking Officer
Vice President, Regional Manager
Assistant Retail Banking Officer
Vice President, Retail Banking Officer
Vice President, Retail Banking Officer
Vice President, Retail Banking Officer
Vice President, Retail Banking Officer
Vice President, Regional Manager
Retail Banking Officer
Assistant Vice President, Retail Banking Officer

Forward Looking Statement
This document (including information incorporated by reference) 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,”
“plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should” or other similar expressions. 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.
A number of factors, many of which are beyond the ability of the Company to control or predict, could cause actual results to differ materially from those in its forward-
looking statements. These factors include, among others, the following: (i) the strength of the local and national economy; (ii) the economic impact of future terrorist attacks
and threats or acts of war and the response of the United States to any such attacks or threats; (iii) changes in state and federal laws, regulations and governmental policies
concerning the Company’s general business; (iv) changes in interest rates and prepayment rates of the Company’s assets; (v) increased competition in the financial services
sector and the inability to attract new customers; (vi) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (vii) the loss of
key executives or employees; (viii) changes in consumer spending; (ix) unexpected results of acquisitions; (x) unexpected outcomes of existing or new litigation involving the
Company; and (xi) changes in accounting standards and practices. These risks and uncertainties should be considered in evaluating forward-looking statements and undue
reliance should not be placed on such statements. Additional information concerning the Company and its business, including additional factors that could materially affect
the Company’s financial results, is included in the Company’s filings with the Securities and Exchange Commission.

(888) 522-2265
lakecitybank.com

LAKELAND FINANCIAL CORPORATION | 2019 ANNUAL REPORT