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2023 ReportANNUAL REPORT (888) 522-2265 LAKECITYBANK.COM LAKELAND FINANCIAL CORPORATION The value proposition of the Lake City Bank community banking model has never been more relevant. Lake City Bank Shareholders, Clients and Community Partners: Lake City Bank team working everywhere from their kitchen tables to our disaster recovery sites, we came together quickly and cohesively to do what we always do, and that is to take care of our clients. The volume of interest and applications was extraordinary and we were very pleased that we were able to take care of 100% of our clients who completed the application process before the Small Business Administration closed the application portal. These loans were critical lifelines to our clients during an unprecedented period of uncertainty and challenge. The value proposition of the Lake City Bank community banking model has never been more relevant. Speaking of kitchen tables, we saw plenty of those in virtual meetings as the majority of our team transitioned to a remote workplace structure for most of the year, as did many of you. We’ve tested our business continuity plans frequently over the years, but never on the scale that we experienced in real time last year. It worked pretty seamlessly and was proof that our substantial investment in When should an annual report to shareholders technology and innovation over the last decade focus on more than just the financial performance was money well spent. Critically, our digital banking of an organization? That’s an easy one for all of us. solutions provided uninterrupted access for our In 2020. As it did for most organizations, the year commercial and retail clients, despite our limited challenged the Lake City Bank team in ways that we lobby access and remote workforce arrangements. couldn’t have imagined. And there wasn’t much fun involved either. But we are a stronger organization as a result. As we entered 2021, it seemed like all anyone wanted to talk about was the fact that 2020 was over. And while the Lake City Bank team is glad to have the year in our rearview mirror, we are enormously proud of what the bank achieved. While we are talking about a remote workforce, I’d like to address the predictions that a permanent remote workforce is here to stay and is even a good idea. There is no way that an organization that truly cares about developing and maintaining a strong culture can argue that never being together, or being together infrequently, will strengthen Community banking shined in 2020. It became its culture or create a good one. The banking increasingly clear throughout the year that business is really about the culture of the team and community banks like Lake City Bank are critical to how we approach client relationships. We don’t the delivery of financial services in our communities manufacture a product that defines our ultimate and to our clients. This was particularly evident client satisfaction; we are the product. At every level with the Paycheck Protection Program (PPP). We of the bank, and in every way we provide services originated $571 million of PPP loans for 2,409 to clients, the teamwork and partnership that is clients during the first round of the program. In derived from face-to-face personal interaction is a few short weeks, our balance sheet ballooned critical. It defines our culture and our product. We by more than 10% due to the program! With the like each other, and we miss being together. And we 2 know we are better when we are together. We are Lake City Bank Digital, our next generation digital eager to get everyone back to work in a Lake City banking platform, late in the first quarter. Bank facility when we can do so safely. Lake City Bank Digital is a truly transformational Financial performance does matter, so let’s change to our mobile and internet banking services. address that as well. Lakeland Financial For our clients, it’s a completely new way to connect Corporation’s stock price ended the year up 10% with us, and with their money, from a single solution at $53.58 per share. Importantly, we fared well that works the same way regardless of device or relative to key banking indexes. The Nasdaq Bank account type. From your phone, your laptop, your Index and the KBW Bank Index fell (11)% and tablet, or your desktop, it will be a seamless and (14)%, respectively. Like all financial stocks, the consistent way to access your Lake City Bank uncertainty of our economic future in the early relationships. With Lake City Bank Digital, we have days of the pandemic severely impacted our stock. reinvented our digital platform with a focus on On March 23, 2020, our stock price hit a pandemic innovative solutions that are built to serve our low of $30.49 per share. Our 76% improvement clients’ needs. in 2020 relative to this low point reflects our execution-driven reputation with investors. We are an inherently optimistic organization and remain so today, despite the twists and turns of 2020. As detailed in this annual report, our net income Our long term mission – “Lake City Bank will be the and diluted earnings per share were down (3)% acknowledged and recognized leader in Indiana and (2)%, respectively. We concluded 2020 with community banking,” is as relevant and achievable as great momentum as we reported record quarterly it has ever been. We are grateful for the partnerships net income in both the third and fourth quarters we have with our clients, employees, communities and are cautiously optimistic as we enter 2021. and shareholders. Thank you. The Federal Reserve’s target Federal Funds Rate of 0% to 0.25% will continue to present challenges to the management of our balance sheet, but we’ve successfully maneuvered through similar cycles in the past and will do so again. While much uncertainty remains, the Lake City Bank team is focused on the future and our continued growth. 2020 tested every aspect of our business plan and proved that the delivery of competitive banking services will continue to rely upon both the personal relationships we build with our clients and the leveraging of technology in ways that we never imagined. Our branch network and all of the client contact people throughout the bank who connect with our customers every day continue to be the backbone of our community banking success. Yet, our experience in 2020 demonstrated the importance of offering a digital banking solution that matches our large bank competition and outperforms our community bank competition. As a result, 2021 will be a critical year as we roll out David M. Findlay President and Chief Executive Officer 3 Management Committee Lake City Bank has a strong history of commitment to diversity and inclusion and we are proud of our day-to-day actions supporting this commitment. Community banking is about the connections we have with our communities. Our communities were challenged on many levels in 2020, including the upheaval and angst prompted by continuing racial injustice. At Lake City Bank, our culture is built upon a foundation of equitable treatment of everyone we interact with and serve – our employees, our clients, our communities, our business partners and our shareholders. As a society, we must insist on empathy and respect for human dignity for all. This is not debatable. Lake City Bank has a strong history of commitment to diversity and inclusion and we are proud of our day-to-day actions supporting this commitment. In order to affirm and expand our commitment, we formed the Diversity and Inclusion Task Force in 2020. Additionally, we added the word Inclusivity to our Core Values. Inclusivity is an intentionally broad term and the task force will have authority to develop a plan to review where we are today and where we want to be in the future. We must not only aspire to be an organization of Inclusivity, we must actually be one, and it is important that we become a leader in our communities on this front. As a community bank, we are dedicated to working to serve our underserved and underbanked communities and we support this movement for fairness as racism and discrimination of any form are simply wrong. We are dedicated to serving everyone equally in our great Indiana communities. 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 Eric H. Ottinger Executive Vice President Chief Commercial Banking Officer Kristin L. Pruitt Executive Vice President Chief Administrative Officer Kyra E. Clark Senior Vice President Chief Human Resources Officer J. Rickard Donovan Senior Vice President General Counsel Stephanie R. Leniski Senior Vice President Chief Retail Banking Officer Jonathan P. Steiner Senior Vice President Chief Wealth Advisory Officer 4 Board of Directors The strength of the board and its imprint on our performance was evident as we moved through 2020 and into 2021. Our board of directors last met in person in January 2020. More than a year has passed since our directors were together. Yet, the strength of the board and its imprint on our performance was evident as we moved through 2020 and into 2021. Good corporate governance cannot take a break during a pandemic and the collective and individual efforts of the board were critical to our success as we traversed a uniquely challenging, yet rewarding, year for the company. The Lake City Bank board was fully aligned and supportive of the company’s efforts on diversity and inclusion, and also provided a leading voice on Environmental, Social and Corporate Governance (ESG). The board’s focus and efforts on the diversity and ESG fronts will ensure that we effectively measure and report on the central factors in assessing the sustainability and societal impact we have on all of our constituents. Michael L. Kubacki Chairman Lakeland Financial Corporation and Lake City Bank Blake W. Augsburger Founder and Chief Executive Officer LEA Professional Robert E. Bartels, Jr. Partner Incedo LLC Darrianne P. Christian Civic Leader Emily E. Pichon Chairman ExTech Plastics, Inc. Officer and Director Olive B Cole Foundation and M E Raker Foundation, Inc. Bradley J. Toothaker President and Chief Executive Officer Bradley Company Daniel F. Evans, Jr. President Emeritus Indiana University Health Steven D. Ross Owner Ross and Associates Ronald D. Truex Chairman of the Board Creighton Brothers, LLC David M. Findlay President and Chief Executive Officer Lakeland Financial Corporation and Lake City Bank Brian J. Smith Co-Chief Executive Officer Heritage Group, Inc. M. Scott Welch Chief Executive Officer Welch Packaging Group At our 2021 annual meeting of shareholders, we will recognize Tom Hiatt upon his retirement from our board. For 14 years, Tom has been a quietly influential and valuable partner to the board of directors and the leadership team. His measured and thoughtful partnership will be missed. Thank you, Tom. Thomas A. Hiatt Former Founding Partner Centerfield Capital Partners, LP 5 ChromaSource Inc. Columbia City Client since 1996 We wouldn’t be where we are today without that relationship. - Jason Brooks 6 Left to right: Doug Spare, Vice President of Product Development; Cammy Treadway, Senior Vice President, Commercial East Regional Manager; Shannon Getty, Vice President of Sales; and Jason Brooks, Chief Executive Officer. No matter where you find yourself, undoubtedly you’ll be surrounded by color. Simple, right? Perhaps not so much. It’s very likely that the person who selected the colors in your environment used samples from ChromaSource to do so. Located in Columbia City, ChromaSource produces and delivers color sampling resources for retail and commercial paint manufacturers around the country and around the world. For example, the paint color samples you choose from and take home from your local home-improvement or paint retailer are produced by applying actual paint to the sample card. The process of matching color on paint samples to exact color formulas is painstaking and rigorous, and something that ChromaSource has perfected. Founded in 1996, ChromaSource has grown with the paint industry over the years, adding color systems production and management in 1998, followed by fulfillment solutions in 2006. Constant throughout the company’s history have been its commitments to innovation and to superior service. Lake City Bank has been another familiar feature of the growth at ChromaSource. “The bank, and Cammy Treadway, have gone above and beyond for us since the beginning,” said Jason Brooks, Chief Executive Officer. “We wouldn’t be where we are today without that relationship.” ChromaSource has commercial loans and deposits, and technology-driven treasury management products with Lake City Bank. In addition, the senior management team uses the bank for its personal banking needs. Quality, innovation and attention to detail have served ChromaSource well. In the midst of the COVID-19 pandemic, ChromaSource developed a fulfillment system for one of its customers that enables do-it-yourself homeowners to order paint color samples online from ChromaSource, choose their color and type of paint, and pick up their order curbside at their local retailer. This combination of technology and hands-on fulfillment enabled ChromaSource to help its customer respond to new demands from consumers wanting to do improvement projects while staying at home during the pandemic. Please note: We created the photography in this report following guidelines for social distancing and safety outlined by the Centers for Disease Control and the Indiana State Department of Health. 7 Birge & Held Indianapolis Client since 2016 The bank really understands our business. - J. Taggart Birge 8 Left to right: Andrew Held, President and Chief Operating Officer; J. Taggart Birge, President and Chief Executive Officer; and Tim Schlichte, Vice President, Commercial Banking Officer. Birge & Held, a real estate investment, property great prospects, and we understand that we serve the management and construction firm, focuses on tenants and communities where our properties are multifamily commercial real estate across the located, in addition to our investors.” Birge & Held’s Midwest, Southeast and Western markets. Using dedication to analysis, agility and innovation match experience, innovation and agility honed over nearly up well with Lake City Bank, its partner for banking three decades, the firm manages more than $1 billion services since 2016. The company has commercial in assets for clients including institutional investors, loans, a line of credit and deposits with the bank, private equity funds, banks, private wealth offices along with private banking services for the principals. and individual and large-scale real estate investors. “Lake City Bank has proven to be just the partner we The company has built a reputation for improving the need,” Birge said. “The bank really understands our properties it acquires and manages. “We focus on the business, and that has supported our growth.” whole picture,” said Tag Birge, President and Chief Executive Officer. “We look for quality properties with 9 South Bend Clinic South Bend Client since 2020 Everyone on the team has been willing to go the extra mile for us. - Kelly Macken-Marble 10 Left to right: Lisa Wine, Chief Financial Officer; Patti McNarney, Vice President, Commercial Banking Officer; and Kelly Macken-Marble, Chief Executive Officer. Back in 1916, a group of doctors, inspired by the Mayo collaboration and teamwork to bear in its relationship Clinic in Rochester, Minnesota, founded what would with the South Bend Clinic. When this 105-year-old become the South Bend Clinic. Today, the South Bend practice selected a new financial partner in 2020, they Clinic encompasses 10 campuses, and nearly 150 chose Lake City Bank. The bank provides commercial providers holding 30 different board certifications. loans to the clinic, as well as treasury management Even in light of such growth, the South Bend solutions that are technology driven and structured Clinic remains true to its roots—providing patient- around the health care provider’s needs. In addition, centered, physician-led health care. “We believe Lake City Bank participated with two other Indiana in collaboration—that access to colleagues and banks in another commercial loan. “We’ve been really specialties under one roof, sharing expertise, improves pleased with Lake City Bank’s ability to respond to our treatment and outcomes for all of our patients,” needs,” Macken-Marble said. “Everyone on the team said Kelly Macken-Marble, Chief Executive Officer. has been willing to go the extra mile for us.” The Lake City Bank team brought similar skills in 11 Boys & Girls Club Goshen Client since 2006 We know we’re working with trusted advisors who respect the work we do, and we rely on them to do their job as well. - Kevin Deary 12 Left to right: Kevin Deary, Chief Executive Officer; and Amber Wolfer, Vice President, Commercial Banking Officer. The Boys & Girls Club of Elkhart County (BGCEC), founded in 1956, inspires and empowers young people to reach their full potential through a variety of programs and experiences, of course, but also through building powerful relationships that help guide young people as they grow. Every day, the organization welcomes more than 1,500 youth ages six through 18 to its clubhouses in Elkhart, Goshen, Middlebury and Nappanee, serving more than 5,000 young people each year. Clubs are located where families need them most, and they are open when youth need them most as well—after school, during school breaks and in the summer. Kids can also visit Camp Koda in Goshen for summer day camp. The BGCEC team practices what it preaches, relying on partners for advice, support and services. Lake City Bank has partnered with BGCEC since 2006. The bank provides commercial loans, technology-driven treasury management products and credit card processing. On closer examination, though, the relationship goes much deeper—BGCEC relies on the Lake City Bank team for advice, knowledge and help with planning. “Lake City Bank is part of our community. They live and work here,” said Kevin Deary, Chief Executive Officer. “We know we’re working with trusted advisors who respect the work we do, and we rely on them to do their job as well.” Through the years, as BGCEC has grown from one club in Goshen to four full-service clubs throughout Elkhart County, the organization has changed and grown with the needs of the community. Its ability to pivot, adapt and change has served BGCEC well during the COVID-19 crisis, when it had to shift services to support families faced with changing work, school and child care situations, all the while maintaining a safe environment for young people and staff. “It makes a huge difference when you have a true relationship with your bank,” Deary said. “We wouldn’t have all of this, without the bank as our partner.” 13 G&G Hauling & Excavating, Inc. Warsaw Client since 1966 Both of our organizations are very community focused and dedicated to great service. We rely on them. - Cary Groninger 14 Left to right: Richard Groninger, Vice President; Everett Nifong, Vice President, Commercial Banking Officer; Cary Groninger, President; and Krista Campbell, Controller. Lake City Bank and G&G Hauling & Excavating have commercial and industrial snow removal. Community been partners right from the company’s founding means a lot to G&G—not only has the family-led in 1966. G&G started small—doing excavation and company grown up here, G&G has built strong site preparation. Very soon the company began to relationships with local organizations that improve grow, adding mining its own gravel and, soon after, the service they can offer to customers. Lake City concrete and asphalt recycling. G&G has continued Bank’s relationship with G&G has grown over the to grow over the years, adding capabilities and years as well. The company has commercial loans and building a reputation for quality workmanship, satisfied deposits, technology-driven treasury management customers and a strong connection to the community. services, credit cards and personal services with Lake The company’s extensive list of capabilities also City Bank. “We work well with Lake City Bank,” said includes commercial site preparation and site utilities; Cary Groninger, President. “Both of our organizations demolition, clearing and trucking; production and are very community focused and dedicated to great sales; design build services and development; and service. We rely on them.” 15 Long-term client pleased with service From my perspective as a client, the feeling was that everything was done to get this loan processed and funded with the highest sense of urgency and as efficiently as if I were the only client being helped. And I cannot emphasize how crucial this funding was and is to our practice, our patients, and our employees, during these most difficult and challenging times. Time was of the essence Got the wonderful word late today that the Paycheck Protection Program loan application for our company has been not only approved but funded. Kudos and thanks—I know this ‘easy’ funding has been anything but to get, and I am equally certain that, but for the focused efforts of Lake City, this good news would likely never have happened for us. Small business client values team When I deal with Lake City Bank, I always feel like I am the office’s most important customer, no matter what I need. We were able to get a PPP loan from Lake City Bank to help keep our business going, and the service and attention we received was exactly the same—we were treated like VIPs. The Community Bank Model at its Best As a public company, we are often asked by the investment community how we compete with significantly larger and more resourced competitors and how we differentiate Lake City Bank from our competitors of all sizes. 2020 provided a resounding real-time answer to these frequently asked questions on many levels. When the COVID-19 crisis arrived, we moved quickly to ensure uninterrupted access for our clients to their bank and their bankers while at the same time adapting our offices and practices to protect our employees and our customers. We are proud that from the start of the pandemic we were able to continue to support our team members, clients, and communities safely. Our response to the Paycheck Protection Program illustrated Lake City Bank’s management of the crisis. In a few short weeks, we provided critical funding to 2,409 clients totaling $571 million in the first round of PPP activity. As we entered 2021, we began working with our clients to ensure that their PPP loans qualified for forgiveness as rapidly as possible and initiated another round of PPP lending with our clients. The efficiency and speed of our PPP process was exceptional. We’re proud of our PPP numbers, but they only tell part of the story. Every one of our customers who needed, qualified and applied for a PPP loan was served, regardless of whether they were a commercial client, a private banking sole practitioner, or a business served by branch bankers throughout our footprint. Every single client. Here is what they told us. 16 Communication and timeliness matter Feedback from a happy client Our banker reached out to us in advance of the PPP rollout and did a tremendous job—we can’t thank him enough for his attention to our small business and he has been a pleasure to work with. The Lake City team was obviously prepared and committed to helping its customers. Big-bank client appreciates service What has blown us away is your manager treated us the entire time as though we were a beloved friend and gave us professional help as though we were a multi-million dollar account. 24/7 effort recognized I want to express my sincere appreciation to you and your team at Lake City Bank for the extraordinary effort made to work with our CFO to secure SBA approval of our PPP loan that was funded last week. It did not escape my attention that many of your email communications with us were sent late evenings and over weekends. So thanks again for everything you did, and for going the extra mile to get us approved under this program during the brief window of opportunity that was available. I wanted to reach out to you and say thank you for how LCB and its people handled the SBA loan for my company. You folks were on it! I have several friends and business associates throughout the tri-state area who were applying for the same loan and didn’t have near the success that I had in getting their loans processed. I received my funds 12 days after I dropped off my application. My banker did a great job keeping me informed on the changes that were happening as everyone was trying to figure out how it was going to be handled. Reflections from a client with multiple banks I applied for the PPP SBA program with my banker last week...her knowledge of what was needed to get it done and keeping abreast of the SBA’s changing documents was simply outstanding. She also contacted me well before the other banks I have relationships with did, which was really appreciated in this time of uncertainty. 17 Five Year Summary of Financial Highlights (in thousands, except share and per 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 2020 $5,830,435 5,036,805 4,649,156 61,408 657,184 $5,424,796 5,184,836 633,957 4,424,472 $4,650,597 3,340,696 3,437,338 624,174 $163,008 165,454 14,770 46,843 91,205 84,337 $3.31 3.30 1.20 36.36% $25.85 2019 $4,946,745 4,133,819 4,065,828 50,652 598,100 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 $4,941,904 4,656,707 603,580 3,974,532 $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 $4,242,524 3,298,406 3,390,512 562,601 $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 $155,047 157,176 3,235 44,997 89,424 87,047 $3.40 3.38 1.16 34.32% $23.34 $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 25,469,242 25,573,941 25,588,404 25,288,533 25,181,208 25,056,095 25,758,893 25,727,831 25,663,381 25,460,727 1.55% 13.51% 11.51% 3.19% 43.46% 0.09% 1.32% 507.42% 0.26% 1.76% 15.47% 11.38% 3.38% 44.70% 0.03% 1.25% 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% 270.58% 667.40% 500.91% 653.31% 0.47% 0.19% 0.25% 0.20% 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 2020 for a complete set of consolidated financials. 18 Condensed Consolidated Balance Sheets (Years ended December 31) (in thousands, except share data) 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 Noninterest bearing deposits Interest bearing deposits Total deposits Accrued interest payable and other liabilities FHLB advances and other borrowings 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 2020 $74,457 175,470 249,927 734,845 11,218 4,649,156 61,408 4,587,748 59,298 95,227 13,772 18,761 4,970 54,669 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 $5,830,435 $4,946,745 $1,538,331 3,498,474 5,036,805 50,946 85,500 5,173,251 114,927 529,005 27,744 (14,581) 657,095 89 657,184 $5,830,435 25,713,408 25,239,748 $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 89 598,100 $4,946,745 25,623,016 25,444,275 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, 2020 and 2019, 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, 2020 (not presented herein); and in our report dated February 23, 2021, 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, 2020 consolidated financial statements from which it has been derived. Crowe LLP, South Bend, Indiana, February 23, 2021 19 Condensed Consolidated Statements of Income (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 Interest rate swap fee 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 20 2020 $177,185 2019 $197,684 2018 $182,265 6,973 8,577 368 8,909 7,127 1,490 9,717 6,079 909 193,103 215,210 198,970 29,342 753 30,095 163,008 14,770 148,238 9,138 10,110 10,085 2,408 2,105 5,089 3,911 433 3,564 46,843 49,413 11,617 11,864 18,311 91,205 103,876 19,539 $84,337 25,469,242 $3.31 25,573,941 $3.30 57,148 3,015 60,163 155,047 3,235 151,812 8,522 15,717 9,911 2,641 1,890 1,691 1,626 142 2,857 44,997 48,742 10,816 10,407 19,459 89,424 44,913 2,786 47,699 151,271 6,400 144,871 7,802 15,831 9,291 2,461 1,244 475 1,150 (50) 2,098 40,302 47,645 10,392 9,685 18,507 86,229 107,385 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 See Annual Report on Form 10-K Corporate Information Nature of Business Lakeland Financial Corporation is a $5.8 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 Virtual Annual Meeting Tuesday, April 13, 2021 4:30 pm eastern 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. Cannacord 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 LCC 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@amstock.com amstock.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 Barack Ferrazzano Kirschbaum & Nagelberg LLP 200 W Madison Street Suite 3900 Chicago, IL 60606 21 Lake City Bank Officers 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 Chief Commercial Banking Officer Assistant Vice President Holly A. Davis Corbin J. Holtsberry Kelsey M. Jenkins Cari J. Juillerat Kris J. Kerlin Sara B. Millspaugh Kevin R. Poe Nathan R. Poe Stacy M. Richardson Robin R. Ritchie Officer Luke C. Mungovan Elizabeth A. Schmidlin Virginia E. Wirt Kristin L. Pruitt Executive Vice President Chief Administrative Officer Consumer & Home Loans Senior Vice President Kirtus D. Murray Kyra E. Clark Senior Vice President Chief Human Resources Officer J. Rickard Donovan Senior Vice President General Counsel Stephanie R. Leniski Senior Vice President Chief Retail Banking Officer Jonathan P. Steiner Senior Vice President Chief Wealth Advisory Officer Brokerage Vice President Scott M. Hartman Adam C. Johnston Officer Greg L. Emmack 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 Brian D. Burrell 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 22 Vice President Denise M. Brennan Sabrina N. Brown Scott B. Bucher Holly N. Clevenger Glenn A. Goudey Jodi L. Hammond Jeffery W. Krusenklaus W. John Pritz Mark R. Rensner Sue L. Sands Assistant Vice President Chad J. Clinton John J. (J.J.) Foster Anna A. Jimenez Sarah J. Miller-Bontrager Todd E. Pequignot Amanda M. Tom Officer Ashley R. Hite Susan R. McClanahan 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 Donald J. Robinson-Gay Vice President Ronald E. Cotton Amanda R. Ellsworth Cynthia J. Gianneschi Bradford S. Grabow Judd P. McNally Benjamin A. Rice Assistant Vice President David J. Curry Justin T. Hayes Megan E. Ottinger Daniel M. Sloan Matthew R. Smith Aaron T. Wood Jeffrey L. Wyckoff Officer Joseph D. Burtnette Bridget M. Camden Seth M. Greiner Executive Administration Officer Tina A. Rensberger Officer Megan L. Sutter Justin Taylor Risk Management Senior Vice President Matthew D. VanDeWielle Vice President Teresa A. Bartman Gloria J. Crawford Jeannine P. Draper Cooley Dianne C. Harris Candy A. Little Amanda M. Longmire Kyle G. Schmidt Assistant Vice President Kristin D. Brown Aaron T. Connell Eric D. Neuenschwander Victoria L. Starr Officer Austin L. Bair 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 Kimberly K. Mattke Sean P. Raver Melissa S. Rupe Diane M. Wirth Officer Jordan M. Bell 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 Lisa A. Mansberger Peggy L. Michel Benjamin D. Shively Reneta U. Thurairatnam Assistant Vice President Steven B. Burnside Leslie E. Rohrer Officer Deborah R. Cataldo 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 Susan K. Hayes Christine M. Himes Brittney C. Hollopeter Jennifer R. Kooistra Katrina L. Mills 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 Rhonda K. Frank Mary A. Lepird Officer Alma R. Jimenez Brianna D. Kreczmer Property Management Vice President Rick Hatcher Officer Richard A. Hoover Retail Banking Senior Vice President—Retail Banking Regional Manager Bruce A. Wright Vice President—Retail Banking Regional Manager Melissa J. Blosser Karen A. Francis Sara B. Hill Pamela F. Messmore Margaret A. Waddell Lake City Bank Offices 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 Clayton J. Bright Emily E. Wold Dana L. Hess Kristi L. Manwaring 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 Ashley A. Gott Alexandra L. Mitchell 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 Brandon Prince 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 Assistant Vice President, 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 Assistant Retail Banking Officer 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 Assistant 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. 23 ANNUAL REPORT (888) 522-2265 LAKECITYBANK.COM LAKELAND FINANCIAL CORPORATION
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