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2023 Report(888) 522-2265 LAKECITYBANK.COM 2021 ANNUAL REPORT LAKELAND FINANCIAL CORPORATION We are an organization driven by execution and results strong performance for our shareholders. Speaking of shareholders, our performance over the last 20 years has produced a total return of 3,198%. In addition, our stock price increased 50% during 2021 in a very challenging market. We once again outperformed two key banking indexes as the Nasdaq Bank Index and the KBW Bank Index were up 40% and 35%, respectively. These results are a testament to the disciplined focus of the entire Lake City Bank team. We are an organization driven by execution and results. Once again, we’ve proven that our simple business model works well for our employees, our clients, our communities, and our shareholders. We enter 2022 with great optimism and confidence in the core relationship businesses within Lake City Bank. During the last two years, we have experienced unprecedented growth that has challenged our management of the balance sheet and necessitated a level of flexibility and adaptability by the entire Lake City Bank team. There was nothing easy about it as we continued to manage through the COVID pandemic while at the same time maintaining our disciplined focus on the future. Community banking once again shined in 2021 and our business model continues to be highly relevant and competitive, yet we are under constant pressure from both bank and non-bank competitors. This requires an intense curiosity about the rapidly evolving role of technology in our industry. Being good enough simply isn’t acceptable. We’ve got to ensure that we continue to innovate and evolve our products and services to provide our clients with technology-driven solutions to their financial needs. We took a significant step forward in 2021 with Lake City Bank Digital, a truly transformational change in our mobile and internet banking services. With Lake City Bank Digital, we have reinvented our digital platform with a focus on innovative solutions that are built around our clients’ needs. Lake City Bank Shareholders, Clients and Community Partners: The Lake City Bank team is exceptionally proud of our performance in 2021. For starters, we reported record net income of $95.7 million, an increase of 14% versus 2020. We’ve reported record net income in 31 of the last 33 years, with the Great Recession in 2009 and the COVID pandemic in 2020 representing the only years in which we did not have record net income performance. It’s a three-decade track record of financial success that We proved to be a resilient organization again in 2021. reflects our consistent and stable ability to generate We were happy to fully transition back to our workplaces 2 2021 ANNUAL RE POR T in April and spent the balance of 2021 focused on to be together, but challenges remain as our world completing our Strategic Initiatives, which are a continues to test our culture. We’re doing everything we critical part of our annual planning process. Their can to protect and evolve the culture of the organization completion is at the core of our ability to move the because culture has been and is central to our success, business forward on everything from technology to and we still believe that being together is the best path branch facilities. to long term success. On the branch front, we were delighted to open One thing that won’t be boring in 2022 is Lake City our 51st office in Elkhart High School as part of our Bank’s 150th Anniversary. In May of 1872, a group of partnership with Elkhart Community Schools. The community leaders came together and decided that office is led by a Lake City Bank retail banker and Warsaw, Indiana, a town of less than 2,000 residents, staffed by high school students who are enrolled in needed a fourth bank. As a result, Lake City Bank was the school’s Business and International Relations founded. That’s right, the same name has been on our School of Study. Having students as part of our doors for 150 years. Throughout 2022, we’ll proudly branch team, and as our customers, will provide celebrate our sesquicentennial and the wonderful us with a unique and inventive way to gain real-life impact that this community bank has had on the Indiana intelligence about what the next generation is looking communities we are lucky to serve. for in financial services. It’s a fully digital office that will serve as an innovative place to test our future technology and ensure that we are prepared to serve the next generation of bank clients. We were excited that our clients returned to our branch offices in 2021. While technology is playing an increasing role in our relationships with clients, it’s clear that face-to-face banking is still important. Yet we know that the branch of the future must be a different place to interact with our clients and communities. As detailed on page 16, we’re partnering with our client 16 Tech in Indianapolis to bring a branch to the AMP, which is in HqO, the innovation hub at the heart of the 16 Tech Innovation District. By fostering collaboration and community, the AMP serves as a springboard for Indy’s next generation of culinary talent and entrepreneurship. As with the Elkhart High School branch, we’ll bring an entirely new branch concept to the AMP—one that is designed to appeal to the emerging generation of clients. We look forward to exploring the future while remaining connected to our past in our offices throughout Central and Northern Indiana. We’re hopeful that there’s some boredom in 2022. That may sound uninspiring, but the last two years have tested Lake City Bank, its clients, and its communities in ways we could never imagine, as it did nearly every business in our communities. We entered 2022 committed to continuing our historical success and are off to a great start. Our workforce is happy Community banking was once again at its best in 2021. We have proven that our model of community banking works. We have proven that respecting and caring for each other matters. We have proven that our clients can rely upon us in trying times. We have proven that our culture can survive the most severe challenges. We’ve demonstrated an incredible level of adaptability and action. Lake City Bank has always been an execution- oriented place, and that has been affirmed over and over throughout this pandemic. We have become a better organization through our response to this crisis and we are excited for the future. We are grateful for the partnerships we have with our clients, employees, communities, and shareholders. Thank you. David M. Findlay President and Chief Executive Officer 2021 ANNUAL REPOR T 3 MANAGEMENT COMMITTEE Left to right: Jonathan P. Steiner Senior Vice President Chief Wealth Advisory Officer Stephanie R. Leniski Senior Vice President Chief Retail Banking Officer Kristin L. Pruitt Executive Vice President Chief Administrative Officer J. Rickard Donovan Senior Vice President General Counsel David M. Findlay President and Chief Executive Officer Kyra E. Clark Senior Vice President Chief Human Resources 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 In last year’s annual report, we shared with you that we had formed the Diversity and Inclusion Task Force to affirm and expand our commitment to this important initiative. 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. The task force is hard at work developing and implementing actions that are designed to ensure that we are dedicated to this movement for fairness as racism and discrimination of any form are simply wrong. As we write this report, the task force is finalizing an in-person Lake City University course that every employee of the bank will attend. Actions, not words will be the evidence of our success on this front. This leadership team averages 14 years of experience at Lake City Bank and 28 years of total experience. Together, we bring a passionate and enthusiastic leadership style to our jobs. Simply put, we love what we do and are driven by the mission statement of the bank, “Lake City Bank will be the acknowledged and recognized leader in Indiana Community Banking.” Every contact within our communities is a building block to achieve this goal and we will relentlessly pursue it. 4 2021 ANNUAL RE POR T BOARD OF DIRECTORS Left to right: Ronald D. Truex Chairman Creighton Brothers, LLC Steven D. Ross Owner Ross and Associates M. Scott Welch Chief Executive Officer Welch Packaging Group Darrianne P. Christian Civic Leader Blake W. Augsburger Founder and Chief Executive Officer LEA Professional Emily E. Pichon Chairman, ETP Asset Holdings, Inc. Officer and Director, Olive B Cole Foundation and M E Raker Foundation, Inc. Brian J. Smith Co-Chief Executive Officer Heritage Financial Group, Inc. Daniel F. Evans, Jr. President Emeritus Indiana University Health Robert E. Bartels, Jr. Partner at Incedo LLC Bradley J. Toothaker President and CEO Bradley Company Managing Partner of Great Lakes Capital Development David M. Findlay President and Chief Executive Officer Lakeland Financial Corporation and Lake City Bank Michael L. Kubacki Chairman Lakeland Financial Corporation and Lake City Bank The Lake City Bank board plays an important role on multiple fronts. Strong corporate governance is at the core of the board’s role. The board continues to actively engage and contribute to our efforts on Environmental, Social, and Corporate Governance (ESG) and diversity and inclusivity. They ensure that management maintains its focus and efforts on these fronts and effectively measures and reports on the central factors in assessing the sustainability and societal impact we have on all of our constituents. It’s important work. At our 2022 annual meeting of shareholders, we will recognize Dan Evans and Ron Truex upon their retirement from our board. For 12 years, both Dan and Ron have brought informed, experienced, and helpful voices into our boardroom. Dan’s encyclopedic knowledge of our industry has been valued by the board and management and Ron’s lifelong agribusiness experience has proven to be incredibly valuable as we continued to grow the sector. They have both delivered steady and balanced perspectives. Thank you, Dan and Ron, for your support and partnership inside and outside the boardroom. 2021 ANNUAL REPOR T 5 S I L O P A N A I D N I Conquest Racing E C N I S T N E I L C 20 14 6 2021 ANNUAL RE POR T Eric Bachelart, President 20 14 Left to right: Sara Hill, Vice President, Retail Regional Manager; Eric Bachelart, President; Melanie McIntyre, Vice President, Treasury Management Sales Officer; Ryan Hart, Vice President, Commercial Banking Officer Think Indianapolis, and racing springs to mind. But there’s more to racing in Indy than that event each year at the end of May. 1991 Indy Lights champion and Indianapolis 500 veteran Eric Bachelart founded Conquest Racing in 1997 to compete in North American open-wheel racing. Today, Conquest Racing operates cars in the Ferrari Challenge Series and the International Motor Sports Association (IMSA) Prototype Challenge. The Ferrari Challenge brings together Ferrari owners who want to compete in top-level sprint races on storied tracks around the world. Conquest Racing prepares Ferraris to customer specifications for racing, and provides the team support for competing in the Challenge Series. “It’s so exciting to give our Ferrari owners a genuine race experience in such an iconic car,” said Bachelart, President. Conquest Racing began working with Lake City Bank and Sara Hill, Vice President, Retail Regional Manager, in 2014. Fast forward to 2020, and Lake City Bank stepped in to provide Conquest Racing with a Paycheck Protection Program (PPP) loan quickly and efficiently, when the company’s primary bank did not. “Working with Sara and the Lake City Bank team has made a definite difference for our company,” Bachelart said. “We’ve been more than satisfied, especially in terms of responsiveness.” In fact, Lake City Bank is now Conquest Racing’s primary bank, with commercial and real estate loans, deposits and a range of technology focused treasury management products. We call that a win-win. 2021 ANNUAL REPOR T 7 D R O F L I M Williamsburg Marine & Williamsburg Furniture E C N I S T N E I L C 20 09 8 2021 ANNUAL RE POR T Left to right: Gus Feiler, Chief Executive Officer; Lance Feiler, President, Williamsburg Furniture; and Karen Weaver, General Manager, Williamsburg Marine 20 09 Left to right: Richard Delks, Vice President, Senior Wealth Advisor; Karen Weaver, General Manager, Williamsburg Marine; Gus Feiler, Chief Executive Officer; Lance Feiler, President, Williamsburg Furniture; Gavin Miller, Vice President, Commercial Banking Officer Williamsburg Marine is a wonderful COVID-19 success story. Founded in 2019 as a sister company to Williamsburg Furniture, the company took off when consumer needs changed in the pandemic. Sheltering in place and working from home translated to an increased market for at-home recreation, including an uptick in the pontoon boat market. Williamsburg Furniture, which manufactures furniture and bedding for the RV industry, pivoted to start Williamsburg Marine, which manufactures seating for the boat industry, with an emphasis on pontoon boats. Starting with two employees in 2019, Williamsburg Marine has grown to such a degree that it’s building a new facility to expand operations, and Lake City Bank has been a partner along the way. “We wouldn’t be here without the bank,” said Gus Feiler, Chief Executive Officer of Williamsburg Marine and Williamsburg Furniture. “We started working with Lake City Bank back in 2009, when other banks were not willing to work with RV companies. Our relationship works because the bank takes time to understand all aspects of our business.” Both companies and their principals use Lake City Bank for lines of credit, commercial loans and deposits, and technology-forward treasury management products. They also rely on the bank for personal banking and wealth management services. “Our business has been getting bigger, not smaller,” Feiler said. “Lake City Bank has proven to be the best partner for our success.” 2021 ANNUAL REPOR T 9 N O S D U H Pranger Enterprises LLC & Hydronov LLC E C N I S T N E I L C 20 10 10 2021 ANNUAL RE POR T Left to right: Gabe Pranger, Owner and Chief Operating Officer; Nick Pranger, Owner and Chief Executive Officer 20 10 Left to right: Joe Kessie, Senior Vice President, Commercial South Regional Manager; Tabitha Williamson, Vice President, Treasury Management Sales Officer and Operations Manager; Gabe Pranger, Owner and Chief Operating Officer; Nick Pranger, Owner and Chief Executive Officer; Sheena White, Vice President, Merchant and Cardholder Services Manager When you see those beautifully packaged fresh herbs and lettuce in the produce section at your supermarket, you might not think “Aha! Commercial mechanical systems,” but chances are those systems are what brought the product to your store. Pranger Enterprises, founded in 1964, installs mechanical systems like process plumbing, fire protection and HVAC systems for commercial enterprises, and has grown in expertise and technology to meet customer needs across a variety of industries. Pranger’s background in plumbing and piping led them to hydroponic production and purchasing Hydronov, a company that offers leading edge automation, design, equipment and installation for hydroponic growing. Hydroponics, or growing plants without soil, has been around for decades. Hydronov has developed a commercial system for greenhouses that uses Floating Raft Technology to automatically move plants from seed to harvest in a matter of weeks. At maturity, herbs and produce are transferred to another automated line for harvest, cleaning, packaging and shipping. This process allows for clean, climate controlled growing and up to 18 harvests each year. Without weather as a factor, production can take place much closer to markets, saving on transportation and energy costs, and allowing products to get to market much fresher than by conventional means. Pranger Enterprises has worked with Lake City Bank since 2010, using commercial lines of credit and term loans, technology-forward treasury management products, commercial deposits and merchant and credit card services. “Lake City Bank has been our partner for more than a decade now,” said Nick Pranger, Owner and Chief Executive Officer. “We couldn’t have grown in size and in new technologies without the bank behind us.” In addition to its position as an expert provider—from design to completion—of complex commercial plumbing, piping, HVAC and fire protection systems, Pranger, through Hydronov, is designing and building hydroponic growing systems all over the world. The Pranger Enterprises and Lake City Bank teams are pictured at Eden Valley Farms in Francesville, Indiana, which grows herbs and lettuces for local outlets using a system designed and built by Hydronov. 2021 ANNUAL REPOR T 11 N E H S O G Genesis Products, LLC. E C N I S T N E I L C 20 16 12 2021 ANNUAL RE POR T Left to right: Jon Wenger, President, Chief Executive Officer; Chris Westerbeek, Chief Financial Officer 20 16 Left to right: Anna Corkill, Vice President, Treasury Management Sales Officer; Jon Wenger, President, Chief Executive Officer; Chris Westerbeek, Chief Financial Officer; Steve Brown, Vice President, Commercial Banking Officer with our culture. But we have seen no lack in the level of sophistication in the solutions it provides.” Genesis has a commercial credit facility with Lake City Bank, structured along with partners the bank identified. In addition, Genesis uses the bank’s technology-forward treasury management products. “We’ve grown our company based on our culture and an appetite for innovation,” said Wenger. “Lake City Bank has proven itself a great match to both.” While Genesis Products, founded in 2002, serves Fortune 200 companies across the country and across a variety of industries, its story begins in Northern Indiana creating better solutions for the RV market. Expertise in high-volume commercial lamination products led to growth in just-in-time manufacturing, custom product development, domestic outsourcing and supply chain management. Genesis works with manufacturers of all sizes across the RV, manufactured housing, building materials, health care, office and education, furniture, heavy truck industries, and more. Genesis found a partner in Lake City Bank in 2016. “We’ve been more than pleased with Lake City Bank,” said Jon Wenger, President, Chief Executive Officer. “The bank is a community bank first and foremost, which meshes perfectly 2021 ANNUAL REPOR T 13 E N Y A W T R O F Humane Fort Wayne E C N I S T N E I L C 20 20 14 2021 AN N U AL R EPO RT Left to right: Tanya Gallo, Director of Operations with Luna; Jessica Henry, Executive Director with Nancy Grace 20 20 Left to right, front: Reneta Thurairatnam, Vice President, Senior Wealth Advisor and Humane Fort Wayne treasurer and board member with Wicket; Nichole Mendez, Assistant Retail Banking Officer; Doug Samuels, Vice President, Treasury Management Sales Officer; Beth Squires, Development Manager with Nancy Grace Back row: Melissa Osborn, Pet Promises and Community Outreach Coordinator with Thelma Lou; Marshall Weadick, Vice President, Commercial Banking Officer; Jessica Henry, Executive Director with Keokuk; Tanya Gallo, Director of Operations with Luna; Jenny King, Vice President, Personal Trust Officer Humane Fort Wayne has helped pets and people find each other since 1956. The organization is deeply rooted in the concept that pets thrive when they’re in a safe and loving home, and, likewise, people thrive along with animal companions. Humane Fort Wayne connects pets with humans, but more importantly the organization provides resources that support pets and their owners in a variety of ways, including spay/neuter and wellness services, along with community outreach programs across Northeast Indiana. The shelter takes in dogs and cats from around the region, evaluates and treats any health issues, and prepares them for adoption, including spaying/ neutering and vaccinations. Animals stay at the shelter or are placed in the Foster Program until they find a home. In addition, Humane Fort Wayne’s low-cost walk-in clinic offers non-emergency wellness care, vaccinations, and heartworm and flea care for both cats and dogs. Outreach programs include a weekly pet food pantry, and in-home services for pet owners, as well as compassion fostering for the pets of people in personal crisis. Lake City Bank started working with Humane Fort Wayne in 2020, when the bank stepped in to provide a Paycheck Protection Program (PPP) loan during the coronavirus pandemic. Since then, the relationship has grown to include a line of credit, technology-forward treasury management products including Lake City Bank Digital, and services from the bank’s Wealth Advisory Group. “Even in this relatively short span of time, Lake City Bank has proven to be the right partner for us,” said Jessica Henry, Executive Director. “The bank stepped in when we needed a PPP loan, and our relationship has grown from there. They really understand our mission and want to help us achieve our goals.” The furry friends in our pictures have been adopted by their forever (dare we say fur-ever?) families. 2021 ANNUAL REPOR T 15 S I L O P A N A I D N I 16 Tech Community Corporation E C N I S T N E I L C 20 19 The 16 Tech Innovation District in Indianapolis, established in 2015, is a catalyst for growth in the region, and Lake City Bank has been a partner in the initiative just about since its inception. The 50-acre community in the Riverside District of downtown Indianapolis is strategically located at the intersection of Central Indiana’s top health care, academic and 13 corporate institutions. 16 Tech leverages its location to foster collaboration that translates into innovation, job creation and economic growth for the region and beyond. The nonprofit 16 Tech Community Corporation oversees the development district and helps extend benefits like job creation and economic growth beyond the district. “16 Tech is committed to serving, supporting, and working alongside our neighbors in the Near West, Near Northwest and other nearby communities, including the Riverside neighborhood,” said Bob Coy, President and Chief Executive Officer. 16 Tech’s first building opened in 2020, home to the Indiana Biosciences Research Institute, the Central Indiana Corporate Partnership (CICP) and the Indiana University School of Medicine. Expansion has continued, even with slowdowns brought on by the Bob Coy, President and Chief Executive Officer 16 2021 ANNUAL RE POR T 20 19 Left to right: Bill Redman, Senior Vice President, Commercial Indianapolis Regional Manager; Bob Coy, President and Chief Executive Officer; John Dietzen, Vice President, Commercial Banking Officer COVID-19 pandemic, to include more than $130 of Indianapolis. As part of the 16 Tech community, million invested in buildings and infrastructure. we think this connection is critical to both of these Also open is HqO, the district’s innovation hub, community partners.” Lake City Bank’s partnership began with a multi-year pledge of support. The bank was instrumental in structuring initial financing, followed by collaboration with 16 Tech and other investors to identify additional funding and tax credit opportunities. Lake City Bank also plans to build a branch office in the AMP. which is home to the AMP (a food hall and artisan marketplace), Machyne Makerspace, and flexible office space. In 2021, the district welcomed more than 50 companies, including biotech and tech startups, venture studios, and three institutes focused on the life sciences, data analytics and advanced manufacturing sectors, six universities and 21 restaurants and retail establishments. Together these organizations employ more than 500 people in the district. “Joining efforts to develop 16 Tech was a natural fit for Lake City Bank,” said David M. Findlay, President and Chief Executive Officer. “We view our partnership with 16 Tech, and our presence on their expanding campus, as a natural link between our efforts with the Flanner House to improve the quality of life for residents on the Northwest side 2021 ANNUAL REPOR T 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 Credit 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 Credit Losses* Noninterest Income Noninterest 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 Credit Loss Reserve to Total Loans Credit Loss Reserve to Nonperforming Loans Nonperforming Assets to Total Loans 2021 $6,557,323 5,735,407 4,287,841 67,773 704,906 2020 $5,830,435 5,036,805 4,649,156 61,408 657,184 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 $6,153,780 5,906,640 1,068,325 4,421,094 $5,424,796 5,184,836 633,957 4,424,472 $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 $5,357,284 3,686,112 3,761,520 674,637 $4,650,597 3,340,696 3,437,338 624,174 $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 $178,088 181,675 1,077 44,720 104,287 95,733 $3.76 3.74 1.36 36.36% $27.65 $163,008 165,454 14,770 46,843 91,205 84,337 $3.31 3.30 1.20 36.36% $25.85 $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 25,475,994 25,469,242 25,588,404 25,288,533 25,181,208 25,620,105 25,573,941 25,758,893 25,727,831 25,663,381 1.56% 14.19% 10.96% 3.07% 46.81% 0.09% 1.58% 1.55% 13.51% 11.51% 3.19% 43.46% 0.09% 1.32% 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% 449.13% 507.42% 270.58% 667.40% 500.91% 0.36% 0.26% 0.47% 0.19% 0.25% 18 2021 AN N U AL R EPO RT *Beginning January 1, 2021 calculation is based on the current expected credit loss methodology. Prior to January 1, 2021 calculation was based on the incurred loss methodology. 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 2021 for a complete set of consolidated financials. 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 credit 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 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 2021 $51,830 631,410 683,240 1,398,558 7,470 4,287,841 67,773 4,220,068 59,309 97,652 13,772 17,674 4,970 54,610 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 $6,557,323 $5,830,435 $1,895,481 3,839,926 5,735,407 42,010 75,000 5,852,417 120,615 583,134 16,093 (15,025) 704,817 89 704,906 $6,557,323 25,777,609 25,300,793 $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 See Annual Report on Form 10-K. *Beginning January 1, 2021 calculation is based on the current expected credit loss methodology. Prior to January 1, 2021 calculation was based on the incurred loss methodology. Report of Independent Registered Public Accounting Firm Stockholders and the Board of Directors of Lakeland Financial Corporation, Warsaw, Indiana 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, 2021 and 2020, 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, 2021 (not presented herein); and in our report dated February 23, 2022, 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, 2021 consolidated financial statements from which it has been derived. Crowe LLP, South Bend, Indiana, February 23, 2022 2021 ANNUAL REPOR T 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 credit losses* Net Interest Income After Provision for Credit Losses Noninterest 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 Noninterest Income Noninterest Expense Salaries and employee benefits Occupancy and equipment expense Data processing fees and supplies Other expense Total Noninterest Expense Income Before Income Tax Expense Income tax expense Net Income 2021 $170,551 2020 $177,185 2019 $197,684 9,086 13,033 549 193,219 14,827 304 15,131 178,088 1,077 177,011 10,725 10,608 11,922 3,023 2,467 1,035 1,418 797 2,725 44,720 57,882 11,258 12,674 22,473 104,287 117,444 21,711 $95,733 6,973 8,577 368 8,909 7,127 1,490 193,103 215,210 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 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 89,424 107,385 20,338 $87,047 BASIC WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 25,475,994 25,469,242 25,588,404 BASIC EARNINGS PER COMMON SHARE $3.76 $3.31 $3.40 DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 25,620,105 25,573,941 25,758,893 DILUTED EARNINGS PER COMMON SHARE $3.74 $3.30 $3.38 See Annual Report on Form 10-K. *Beginning January 1, 2021 calculation is based on the current expected credit loss methodology. Prior to January 1, 2021 calculation was based on the incurred loss methodology. 20 2021 AN N U AL R EPO RT Condensed Consolidated Statements of Income Corporate Information Nature of Business Lakeland Financial Corporation is a $6.6 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 52 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 Live Webcast Tuesday, April 12, 2022 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 Canaccord Genuity Inc. Robert W. Baird & Co. Incorporated Boenning & Scattergood, Inc. Cantor Fitzgerald & Co. Citadel Securities LLC Cowen and Company, LLC Canaccord Genuity LLC. Citadel Derivatives Group Llc D.A. Davidson & Co. G1 Execution Services, LLC Goldman, Sachs & Co. LLC GTS Securities LLC HRT Financial LLC IMC Financial Markets StoneX Financial Inc. Janney Montgomery Scott Inc. Jefferies LLC Keefe, Bruyette & Woods, Inc. Keybanc Capital Markets Inc. SVB Leerink LLC Maxim Group LLC Bofa Securities, Inc. Morgan Stanley & Co. LLC VIRTU Americas LLC Two Sigma Securities, LLC RBC Capital Markets, LLC SG Americas Securities, LLC Two Sigma Securities, LLC Stephens, Inc. Susquehanna Securities Stifel, Nicolaus & Company, Incorporated Susquehanna Financial Group, LLP Two Sigma Securities, LLC UBS Securities LLC Virtu Americas LLC Wall Street Access William Blair Wells Fargo 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@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 2021 ANNUAL REPOR T 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 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 Brokerage Vice President Scott M. Hartman Adam C. Johnston Officer Greg L. Emmack Eric Frappier 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 Steven L. Brown Brian D. Burrell Nathan R. Conley David E. Davis John F. Dietzen David S. Frey Chad A. Glassburn Keith B. Goodman Ryan L. Hart Matthew J. Highbarger 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 David J. Curry Holly A. Davis Corbin J. Holtsberry Kelsey M. Jenkins Cari J. Juillerat Kris J. Kerlin Sara B. Millspaugh Luke C. Mungovan Kevin R. Poe Stacy M. Richardson Robin R. Ritchie Elizabeth A. Schmidlin Officer Virginia E. Wirt Consumer & Home Loans Senior Vice President Kirtus D. Murray 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 Assistant Vice President Chad J. Clinton John J. (J.J.) Foster Anna A. Jimenez Susan R. McClanahan Sarah J. Miller-Bontrager Todd E. Pequignot Amanda M. Tom Officer Sandra F. Medina Corporate & Institutional Services Vice President Anna N. Corkill Melanie A. McIntyre Douglas R. Samuels Sheena L. White Tabitha A. Williamson Assistant Vice President Michelle L. Harris Tiffany R. Mudd Officer Grant R. Toney Credit Administration Senior Vice President Kimberly A. Hooley Donald J. Robinson-Gay Vice President Amanda R. Ellsworth Cynthia J. Gianneschi Bradford S. Grabow Justin T. Hayes Judd P. McNally Benjamin A. Rice Matthew R. Smith Assistant Vice President Bridget M. Camden Megan E. Ottinger Christoffer C. Penny Daniel M. Sloan Aaron T. Wood Jeffrey L. Wyckoff Officer Joseph D. Burtnette Victoria A. Fulton Seth M. Greiner Kyle A. Grimm Trent W. Koble Troy D. Tom Thomas B. Weimer 22 2021 AN N U AL R EPO RT 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 David J. Hughes Ryan D. Neese Stacy L. Price Assistant Vice President Samantha D. Ducey Crystal A. Vander Bie Beth A. Weber Marketing Vice President Mary S. Horan Assistant Vice President Caitlin E. Steiner Luke A. Weick Operations Senior Vice President Lisa A. Fulton Vice President Michele R. Ganser Shannan L. Hepler Scot A. Karbach Michelle L. Jacobsen Jan R. Martin Eric D. Wagoner Donna J. Wolfe Assistant Vice President Lisa M. Bicknese Sherri L. DiRico Jill E. Garber Miranda R. Jordon Karla J. Kroll Katrina L. Mills Natalie M. Ousley Melissa S. Rupe Leslie R. Rutherford Diane M. Wirth Officer Jennifer A. Bradley Kelly S. Gochenour Susan K. Hayes Christine M. Himes Brittney C. Hollopeter Jennifer R. Kooistra Cynthia L. Montel Jennifer L. Mosier Michele I. Myers Maritza Patino Carla A. Snyder People Development Vice President Alice G. Hitchcock Mary A. Lepird Tori L. Platt Assistant Vice President Ana Karina Cervantes Rhonda K. Frank Brianna D. Kreczmer Officer Kristen J. Heiman Marissa Rico 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 Kimberly K. Strawbridge Retail Administration Vice President Lisa S. Fitzgerald Assistant Vice President Jean A. Ciriello Officer Megan L. Sutter Justin Taylor Risk Management Senior Vice President Matthew D. VanDeWielle Vice President 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 Becka J. Turnbow 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 Darrin M. McLaughlin Vice President Joanie L. Foreman Christopher D. Merrill Assistant Vice President Kimberly K. Mattke Officer Jordan M. Bell Matti E. Gray Andrew D. Lockridge Wealth Advisory Group Senior Vice President Andrew R. Haddock James D. Westerfield Vice President Robert M. Congdon Lili A. Dailey Richard A. Delks Kevin D. Hampton Michelle L. Kindler Jennifer I. King Lisa A. Mansberger Scott R. Tapley Reneta U. Thurairatnam Assistant Vice President Steven B. Burnside Leslie E. Rohrer Officer Deborah R. Cataldo Adam L. Esterline Lake City Bank Officers Lake City Bank Offices Akron Argos Auburn Bremen Columbia City Concord Elkhart Beardsley Elkhart Downtown Elkhart East Elkhart High School Elkhart Northwest Fishers Fort Wayne Downtown Fort Wayne Jefferson Fort Wayne North Fort Wayne Northeast Fort Wayne Southwest Goshen Downtown Goshen South Grace Village 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 Melissa J. Blosser Christina J. Myer Phillip G. Ensley Clayton J. Bright Emily E. Wold Emily E. Wold Dana L. Hess Bruce A. Wright Nichole L. Mendez Kristi L. Manwaring Steve D. Schumacher Andrew P. Dance Amy M. Weisman Angela M. Daly Kimberly K. Strawbridge Alma R. Jimenez Sheryl L. Harlan Kathryn A. Smith Joseph P. Waltermann Paula J. Whiting Dereck L. Stinson Jody M. Meyer Terry L. Bradley Sara B. Hill Ashley A. Gott Codie N. Gluchowski Brooke E. Bentley Mareen L. Barton Lori I. Cunningham Jana L. Miller Karen S. Scott Karen A. Francis Kimberly S. Orr Lindsay N. Stanifer Brooke C. Williams Brandon Prince Katina A. Stephenson Brenda S. Peterson Kelli-Anna Cook Carol D. Brown Penny S. Ramsey Kourtney M. Gray Sandra A. Nelson-Rowland Alexandra L. Mitchell Mark A. Berta Brittni A. Kuhn Shelly R. Kammerer Jennifer M. Flinn 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 Assistant Vice President, Retail Banking Officer Assistant Vice President, Retail Banking Officer Vice President, Retail Banking Officer Vice President, Regional Manager Assistant Retail Banking Officer Vice President, Retail Banking Officer Assistant Retail Banking Officer Assistant Vice President, Retail Banking Officer Assistant Vice President, Retail Banking Officer Vice President, Retail Banking Officer Senior Vice President, Regional Manager Assistant 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 Vice President, Retail Banking Officer Vice President, Regional Manager Assistant Retail Banking Officer Assistant 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 Vice President, Retail Banking Officer Vice President, Retail Banking Officer Vice President, Regional Manager Assistant Retail Banking Officer Retail Banking Officer 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 Retail Banking Officer Assistant Vice President, Retail Banking Officer Vice President, Retail Banking Officer 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 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 Vice President, Retail Banking Officer Vice President, Regional Manager Assistant Vice President, 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. 2021 ANNUAL REPOR T 23 (888) 522-2265 LAKECITYBANK.COM 2021 ANNUAL REPORT LAKELAND FINANCIAL CORPORATION
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