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2023 ReportANNUAL REPORT (888) 522-2265 LAKECI TYBANK. CO M LAKELAND FINANCIAL CORPORATION C E L E B R A T I N G 1 5 0 Y E A R S O F C O M M U N I T Y We are immensely proud of our 150 year history of community banking. Lake City Bank is still on our door is a testament to the team members who preceded us at the bank and those who work here today. We are immensely proud of our 150 year history of community banking and look forward to writing the next chapter as we move into 2023. In 2022, we reached another milestone with net income exceeding $100 million for the first time in our history. As we have in 32 of the last 34 years, the Lake City Bank team produced record net income and earnings per share for shareholders. We are very proud of our consistent track record of high quality financial performance driven by our long term organic growth strategy. It’s a three-plus decade track record of financial success that reflects our consistent and stable ability to generate strong performance for our shareholders. Once again, balance sheet growth was 100% driven by our long-standing strategy of organic growth. Loan growth returned to double digits in 2022 with an increase in loans of $423 million, or 10%. Importantly, we experienced solid loan growth in every one of our markets. While line of credit usage remained historically low in 2022, we significantly increased our overall lines of credit available by 16%, or $651 million. We are well positioned with our clients to support their continued growth and expansion. As we entered 2023, the banking industry and our clients continued to absorb the impact of the Federal Reserve Bank’s interest rate tightening actions. The unprecedented rapid increase in short term rates, while positively impacting our net interest margin, has affected both our borrowers and depositors. Accompanying these rate actions have been concerns over economic conditions that could negatively affect our clients. We ended 2022 with historically strong loan quality metrics, yet we’ll remain vigilant in our oversight of the loan portfolio and continue to approach it with our historically conservative balance sheet management strategies. We’ve got a pretty good track record on this front. Lake City Bank Shareholders, Clients and Community Partners: On May 14, 2022, the Lake City Bank team kicked off the celebration surrounding the bank’s 150th anniversary with donations totaling $150,000 to the community foundations in each of our 15 Indiana counties. After 150 years, we continue to recognize that the communities where we live and work define our culture which is at the core of our long term success. On a spring day in 1872, a group of community leaders came together and decided that Warsaw, Indiana, a town of less than 2,000 residents, needed a fourth bank. They raised capital from the community to start Lake City Bank and we’ve been serving our Indiana communities ever since. The fact that the name 2 2 0 2 2 A N N U A L R E P O R T | C E L E B R A T I N G 1 5 0 Y E A R S O F C O M M U N I T Y As we do every year in our annual report, we’re pleased to feature client relationships, because they are the foundation of our success. We are particularly proud of our relationship with Bernadette Pohlman, featured on page 16. Her interaction with our Client Protection Services and Retail Banking teams is a story of true community banking. When a client refers to our team members as friends, we know that we are delivering on our community banking mission. As this story tells, we have teams of technology, operations and risk management staff throughout the bank who truly care about our clients and come to work every day ready to protect their financial wellbeing. It’s a terrific story of community banking and we are glad to call Bernadette a friend. We continue to experience constant pressure from both bank and non-bank competitors and are diligently focused on the rapidly evolving role of technology in the financial services sector. We’ll continue to thoughtfully expand our extensive relationships with Fintech partners that assist us in remaining competitive and providing leading edge services and products. We must ensure that we continue to innovate and evolve our products and services to provide our clients with technology-driven solutions for their financial services while retaining the We were happy to open our 52nd office in Downtown look and feel of a community bank. Elkhart in 2022. Elkhart’s downtown is undergoing a renaissance, and we’re excited that we’re playing an important role. We’ve been closely involved with the development and financing of The Elkhart River District, where the office is located, and this level of engagement reflects our role as the leading commercial bank in the market. It’s also a progressive office environment that reflects the evolution of our branch design and functionality. Our next two branches are planned for the Indianapolis market, where we reached a milestone in 2022 with more than $1 billion in loans outstanding during our 10th full year in the market. In early 2023, we’ll open an office at 16 Tech in the HqO, the innovation hub at the heart of the 16 Tech Innovation District. Our planned 54th office, our eighth in the market, will be in Westfield, in the Northern portion of our Indianapolis market. Westfield has also undergone a renaissance, highlighted by significant partnership between the public and private sectors. Both of these offices will be another evolution of our branch template as we continue to see our clients engage with us through a combination of face-to-face banking and digital technologies. We remain committed to a brick and mortar strategy of community banking as we believe these offices represent a commitment to our communities. At the same time, we recognize that the role of an office must continue to evolve. Our sesquicentennial celebration has been a wonderful reminder that the success of our business starts with the nearly 650 people that come to work every day at Lake City Bank. We are thankful for the dedication, commitment and passion of the entire team. The celebration has also reminded us of the impact that we have on the Indiana communities we are lucky to serve. It’s been a great first 150 years! 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 2 0 2 2 A N N U A L R E P O R T 3 Management Committee Left to right: David M. Findlay President and Chief Executive Officer Stephanie R. Leniski Senior Vice President Chief Retail Banking Officer J. Rickard Donovan Senior Vice President General Counsel 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 Jonathan P. Steiner Senior Vice President Chief Wealth Advisory Officer Michael E. Gavin Executive Vice President Chief Credit Officer Lisa M. O’Neill Executive Vice President Chief Financial Officer 2022 represented a transitional year for the bank. After more than two years of challenges presented by the pandemic, the Lake City Bank team found some clean air and our business returned to a more traditional cadence. In 2022, we recommitted to our business development program and intensely focused on moving the business forward. We strengthened existing relationships and developed new ones as we focused our collective energy on a return to a more normal energy level. Through the channel of our 150th anniversary celebration, we hosted events in every market to commemorate the sesquicentennial mark. The celebrations were a wonderful way to reinforce our mission to be the acknowledged and recognized leader in Indiana community banking. While we remain an execution and results driven organization, we were happy to pause and take time to celebrate an important milestone in our history. The Lake City Bank team remains committed to the simple strategy of taking care of clients one at a time each, and every day. It’s a strategy that has worked pretty well for the first 150 years! 4 2 0 2 2 A N N U A L R E P O R T | C E L E B R A T I N G 1 5 0 Y E A R S O F C O M M U N I T Y Board of Directors Left to right: A. Faraz Abassi Managing Partner Centerfield Capital David M. Findlay President and Chief Executive Officer Lakeland Financial Corporation and Lake City Bank Bradley J. Toothaker CEO Bradley Company Managing Partner of Great Lakes Capital Development M. Scott Welch Chief Executive Officer Welch Packaging Group 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. Michael L. Kubacki Chairman Lakeland Financial Corporation and Lake City Bank Darrianne P. Christian Civic Leader Robert E. Bartels, Jr. Partner at Incedo LLC Steven D. Ross Owner Ross and Associates Brian J. Smith Co-Chief Executive Officer Heritage Group, Inc. As a community bank, our board of directors serves both Governance (ESG) issues. With the support of the a corporate governance oversight and reputational role board, the Lake City Bank team continues to take in our Indiana communities. We’ve always viewed our a balanced and thoughtful approach to ESG as we board as an extension of the bank in our communities, recognize that we need to understand not only our and our board members play a real role in our growth financial impact on shareholders, but also our broader and success. Strong corporate governance is at the impact on our communities and team members. core of the board’s role and the board continues to actively engage and contribute to our efforts on the important focus on Environmental, Social and Corporate 2 0 2 2 A N N U A L R E P O R T 5 Senior Leadership Council For the last decade, the Senior Leadership Council has been at the core of our success in executing our Strategic Initiatives. The council includes leaders from every functional and operational area of the bank and represents the foundation of our successful growth and performance since its formation in 2011. As the bank has grown, the Senior Leadership Council has ensured that we remain diligent in our day-to-day execution, while always respecting our culture. It’s a culture that matters and we will preserve and protect it. 6 2 0 2 2 A N N U A L R E P O R T | C E L E B R A T I N G 1 5 0 Y E A R S O F C O M M U N I T Y 2 4 1 3 7 8 10 9 5 13 15 17 11 14 16 18 20 21 22 26 23 24 25 6 12 19 1. Kimberly A. Hooley, Senior Vice President, Credit Administration Manager 2. Matthew D. VanDeWielle, Senior Vice President, Senior Risk Manager 3. Lisa A. Fulton, Senior Vice President, Chief Operations Officer 4. James D. Westerfield, Senior Vice President, Chief Fiduciary Officer 5. Kristin L. Pruitt, Executive Vice President, Chief Administrative Officer 6. Brok A. Lahrman, Senior Vice President, Finance & Chief Accounting Officer 7. William R. Redman, Senior Vice President, Commercial Indianapolis Regional Manager 8. Darrin M. McLaughlin, Senior Vice President, Chief Technology Officer 9. Joseph F. Kessie, Senior Vice President, Commercial South Regional Manager 10. Kirtus D. Murray, Senior Vice President, Retail Lending Manager 11. Stephanie R. Leniski, Senior Vice President, Chief Retail Banking Officer 12. Kyra E. Clark, Senior Vice President, Chief Human Resources Officer 13. Michael E. Gavin, Executive Vice President, Chief Credit Officer 14. Jennifer M. Hurford, Senior Vice President, Treasurer 15. J. Rickard Donovan, Senior Vice President, General Counsel 16. David M. Findlay, President & Chief Executive Officer 17. J. Chad Stoltzfus, Senior Vice President, Commercial Central Regional Manager 18. Camalyn M. Treadway, Senior Vice President, Commercial East Regional Manager 19. Donald J. Robinson-Gay, Senior Vice President, Regional Credit Officer 20. Eric H. Ottinger, Executive Vice President, Chief Commercial Banking Officer 21. Brad S. Grabow, Senior Vice President, Regional Credit Officer 22. Todd A. Bruce, Senior Vice President, Commercial North Regional Manager 23. Lisa M. O’Neill, Executive Vice President, Chief Financial Officer 24. Jonathan P. Steiner, Senior Vice President, Chief Wealth Advisory Officer 25. Andrew R. Haddock, Senior Vice President, Chief Investment Officer 26. Bruce A. Wright, Senior Vice President, Retail Banking Regional Manager 2 0 2 2 A N N U A L R E P O R T 7 Wellfield Botanic Gardens ELKHART | CLI E NT SI NCE 20 1 1 We feel very connected to Lake City Bank for many reasons. From left to right: Jodie Papandrea, Guest Services and Volunteer Manager; Eric Garton, Robert and Peggy Weed Executive Director; Amy Myers, Horticulture and Facilities Manager; Nina Cunningham, Visitors Cottage Manager 8 2 0 2 2 A N N U A L R E P O R T | C E L E B R A T I N G 1 5 0 Y E A R S O F C O M M U N I T Y From left to right: Anna Corkill, Vice President, Treasury Management Sales Officer; Becky Miller, Vice President, Retail Banking Officer; Nina Cunningham, Visitors Cottage Manager; Amy Myers, Horticulture and Facilities Manager; Robert Congdon, Vice President, Trust Officer and Retirement Services Manager; Eric Garton, Robert and Peggy Weed Executive Director; Melissa Blosser, First Vice President, Retail Banking Regional Manager; Jodie Papandrea, Guest Services and Volunteer Manager “Museum” isn’t what springs to mind when considering Wellfield Botanic Gardens, but that’s exactly what it is—a living museum. Its mission, in fact, emphasizes education and fostering appreciation for the relationship between animals, plants and water. Initially conceived as a community service project by the Elkhart Rotary Club and founded in 2005, work began in 2007 on the 36- acre site, half of which is water. Aptly named, Wellfield Botanic Gardens originally was the North Main Street Well Field, a source of hydraulic energy and drinking water since the mid-1800s. In fact, the city of Elkhart owns and operates 13 active wells on the property that still provide about 70 percent of Elkhart’s water. “Wellfield Botanic Gardens is a perfect public-private partnership,” said Eric Garton, Robert and Peggy Weed Executive Director. “We’re careful to maintain the land sustainably, and the city continues to benefit from safe, clean water.” That deliberate focus on community makes Wellfield and Lake City Bank an excellent partnership as well. Wellfield uses the bank for deposit products, technology- forward treasury management solutions, retirement plan services and company credit cards. Bank employees have been part of Wellfield since its inception. “We feel very connected to Lake City Bank for many reasons, not the least of which is that we share a strong commitment to Elkhart and Elkhart County,” Garton said. Today, Wellfield Botanic Gardens is poised to complete about 95 percent of its original master plan. Next in development includes a new Visitors Center and Open Air Pavilion. As a botanic garden, Wellfield is a showplace, laboratory and gathering place for propagating and enjoying local plants. Other local elements form unique features across the gardens as well. Fallen trees are salvaged, preserved and converted for use in structures by local woodworkers. A local foundry, local metal fabricating companies, and local businesses have collaborated to grow Wellfield to where it is today. “We take our role in the community very seriously. In fact, we like to say that we’re world class and home grown,” Garton said. 2 0 2 2 A N N U A L R E P O R T 9 DC Construction Services PENDLETON | CL I ENT SI NCE 2 0 2 0 Lake City Bank knows our business, making them a perfect partner. From left to right: Dustin Calhoun, President, and Brooke Calhoun 10 2 0 2 2 A N N U A L R E P O R T | C E L E B R A T I N G 1 5 0 Y E A R S O F C O M M U N I T Y From left to right: Dana Hess, Vice President, Retail Banking Officer and Private Banker; Brian Burrell, Vice President, Commercial Banking Officer; Dustin Calhoun, President; Brooke Calhoun; Chris Knox, Chief Financial Officer; Bill Redman, Senior Vice President, Commercial Indianapolis Regional Manager; Melanie McIntyre, Vice President, Corporate and Institutional Services Sales Officer them a perfect partner.” DC Construction Services uses the bank for commercial loans and lines of credit, deposits and technology-forward treasury management products including Lake City Bank Digital, Credit Sweep and Positive Pay. “The other banks we considered didn’t compare with Lake City Bank Digital and the other treasury management products we use,” said Chris Knox, Chief Financial Officer. “With Positive Pay, for example, we don’t worry about check fraud, because we authorize each check as it’s presented.” In addition to services for the business, Dustin and Brooke Calhoun also use Lake City Bank for personal banking services as well. DC Construction Services is a picture-perfect example of a great idea plus hard work growing into a full-fledged business. Sixteen-year-old Dustin Calhoun started doing driveway sealcoating in 1995 as a summer job that funded his college degree. Fast forward to today, and DC Construction Services is a regional asphalt and concrete contractor providing everything from new asphalt and concrete surfaces to services to maintain those surfaces, including striping, sealcoating, crack filling and related services. The company prides itself on doing quality work that provides the best solutions for its customers, along with exceptional communication and attention to detail. DC Construction Services chose Lake City Bank for financial services over other regional and local providers based on the bank’s ability to provide specialized credit solutions. “We work with many different types of organizations, so we need a bank that understands our cash flow,” said Dustin Calhoun, President. “Lake City Bank knows our business, making 2 0 2 2 A N N U A L R E P O R T 11 Entech MIDDLEB URY | CL I E NT SI NCE 20 1 8 With Lake City Bank, local is just the beginning. 12 2 0 2 2 A N N U A L R E P O R T | C E L E B R A T I N G 1 5 0 Y E A R S O F C O M M U N I T Y Lavon Detweiler, Chief Executive Officer From left to right: Chad Stoltzfus, Senior Vice President, Commercial Central Regional Manager; Lavon Detweiler, Chief Executive Officer; Anna Corkill, Vice President, Treasury Management Sales Officer; Keith Goodman, Vice President, Commercial Banking Officer In northern Indiana, not far from the Michigan border, you’ll find a company that’s at the forefront of recycling, in terms of both product and technology. Entech and its sister company JOMAR have led the way in tire recycling, reuse and related equipment development and manufacture for decades. Entech takes discarded tires, separates the steel banding from the rubber components, and creates useful materials from both. Although the process sounds simple, the science and technology behind the work are as complex and evolving as the products that result from them. After environmentally friendly processing, rubber from tires can be used to produce dozens of products like edging for gardens, infill for synthetic sports fields, all kinds of durable molded products, running tracks, new tires and asphalt for road paving, to name a few. Entech produces some products, and supplies custom materials to other manufacturers. Steel harvested from tires is processed into ingots for reuse. JOMAR creates turnkey tire recycling equipment for other recyclers. With Entech as a lab for testing new designs, JOMAR is able to market reliable systems to companies around the world. When Chief Executive Officer Lavon Detweiler and his team looked for a financial services partner, local was at the top of their list. The best partner would have a deep understanding of the region, its economy and its businesses. Lake City Bank fit the bill perfectly because of its unique combination of local knowledge paired with technology-forward solutions. Entech, its trucking subsidiary Paxco and JOMAR use Lake City Bank for credit, including commercial loans and lines of credit, deposit accounts, Lake City Bank Digital and a variety of treasury management products. “The bank understands all aspects of our business and our marketplace,” said Detweiler. “With Lake City Bank, local is just the beginning. Their commitment to the area and to our growth is second to none.” 2 0 2 2 A N N U A L R E P O R T 13 Biggs Group FORT WAYNE | CL I E NT SI NCE 2 0 1 6 The bank is just as committed to the Fort Wayne market as we are, and that creates synergy as we grow the business. 14 2 0 2 2 A N N U A L R E P O R T | C E L E B R A T I N G 1 5 0 Y E A R S O F C O M M U N I T Y Kevan Biggs, Owner and President From left to right: Dan Beechy, Assistant Vice President, Treasury Management Sales Officer; Kevan Biggs, Owner and Presi- dent; Cammy Treadway, Senior Vice President, Commercial East Regional Manager; Chad Glassburn, Vice President, Commer- cial Banking Officer; Dave Frey, Vice President, Commercial Banking Officer For Kevan Biggs, Owner and President of Biggs Group, building—both literally and figuratively—animates everything he and his companies take on. Ideal Homes, for example, is a 60-plus year old company that builds quality homes across northeastern Indiana and was started by Biggs’s grandfather, Clark Smith. Biggs is a developer and investor in residential subdivisions and apartment complexes throughout Indiana, providing expertise in finance, accounting, marketing and all facets of real estate management. Biggs and his companies work with Lake City Bank, which provides commercial loans, deposit accounts and multiple technology-forward treasury management solutions that help manage and maximize cash flow, process payments efficiently and protect against fraud. “Lake City Bank has been an excellent partner for us,” said Biggs. “The bank is just as committed to the Fort Wayne market as we are, and that creates synergy as we grow the business.” Kevan Biggs is well known in the area for his involvement in projects that benefit Fort Wayne in a number of ways. Most noticeably, Biggs has been a visionary and leader in helping bring Fort Wayne’s Electric Works project to life. Phase I of the project, launched in 2022, includes six meticulously restored, renovated and leased buildings on the 100-year- old, 1.2 million square foot General Electric campus in downtown Fort Wayne. Dozens of local, regional and national organizations made the complex project a reality from the initial concept conceived by Biggs, Josh Parker, Jeff Kingsbury, Tim Ash and Larry Weigand, all partners of RTM Ventures. Lake City Bank played a pivotal role as well. President and Chief Executive Officer David Findlay stepped in and rallied four other local lenders to join in financing the project along with a lead out of town bank. “David was the catalyst that made financing happen locally,” Biggs said. “He and Lake City Bank represent what this community can do when we recognize something that will benefit all of us.” 2 0 2 2 A N N U A L R E P O R T 15 Bernadette Pohlman PLYMOUTH | CL I EN T SINCE 2 0 1 0 Kim and Chelsea went through the process with me step by step, and their advice was spot on. Bernadette Pohlman From left to right: Chelsea Stanifer, Senior Retail Banker, Plymouth; Bernadette Pohlman; Kim Knoerzer, Client Protection Services Assistant Manager and Officer 16 2 0 2 2 A N N U A L R E P O R T | C E L E B R A T I N G 1 5 0 Y E A R S O F C O M M U N I T Y Client Protection Services Team From left to right: Kathryn Kent, Client Protection Services (CPS) Specialist; Kim Knoerzer, CPS Assistant Manager and Officer; Jamie McTaggart, CPS Specialist; Sheila Smith, CPS Specialist; Amanda Longmire, Vice President, BSA Officer and CPS Manager Middle, left to right: Misty Snyder, CPS Specialist; Kelsey Stewart, CPS Expert; Mackenzie Riley, CPS Specialist; Teresa Medina, CPS Specialist Back, left to right: Angie Rucker, CPS Specialist; Amy Staton, CPS Specialist; Lilliana Fisher, CPS Specialist Not pictured: Wendy Brown, CPS Assistant Manager and Officer It’s not often that fraud in a bank account leads to finding new best friends, but that is exactly what Lake City Bank Customer Bernadette Pohlman experienced when her account was compromised last summer. Fortunately, Lake City Bank’s monitoring systems identified the out- of-the-norm transactions right away. Kimberly Knoerzer, Client Protection Services (CPS) Assistant Manager and Officer, quickly reviewed the suspect transactions and blocked Pohlman’s digital access and account to prevent losses. Just as quickly, she called Bernadette to verify that the transactions were indeed fraud. Understandably, Pohlman was upset, but Knoerzer explained exactly what happened and how the bank would rectify the situation. “I asked Kim what to do, and she recommended that I go to my local branch right away,” Pohlman said. “Kim and Chelsea went through the process with me step by step, and their advice was spot on.” Chelsea Stanifer, Senior Retail Banker, Plymouth, helped Pohlman close her existing account, open a new one, and change her digital access information. “I was absolutely overwhelmed when everything taken from my account was back within a week,” Pohlman said. “Everyone at the branch made me so comfortable, and I have a new best friend in Chelsea.” Lake City Bank devotes time and resources to detect, prevent and, when it happens, help our customers recover from fraud. Our Information Security and Assurance team manages security and access to bank systems, and makes sure monitoring and protection solutions keep data that’s entrusted to us safe. Our Client Protection Services team monitors account activity and steps in to help customers when they experience fraud. “When situations like this one happen, we work closely with branch team members so that our clients receive assistance from familiar faces backed up by an expert in recognizing and correcting fraud from our team,” said Amanda Longmire, Vice President, BSA Officer and Client Protection Services manager. The CPS team also works across the bank on other fraud related activities and to ensure that the bank is adhering to Bank Secrecy Act (BSA) and other regulations that protect against fraud. “It’s unfortunate when fraud occurs, but the CPS team works to help our customers,” Longmire said. “It’s music to our ears when customers like Bernadette tell us ‘Friends of mine had something similar happen. I told them they needed to bank at Lake City Bank.’” 2 0 2 2 A N N U A L R E P O R 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 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 2022 $6,432,371 5,460,620 4,710,396 72,606 568,887 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 $6,427,579 6,123,163 1,432,287 4,427,166 $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 $5,717,358 3,874,581 3,913,195 596,487 $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 $202,887 208,514 9,375 41,862 110,210 103,817 $4.07 4.04 1.60 39.60% $22.28 $178,088 181,675 1,077 44,720 104,287 95,733 $163,008 165,454 14,770 46,843 91,205 84,337 $3.76 3.74 1.36 36.36% $27.65 $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 25,528,328 25,475,994 25,469,242 25,588,404 25,288,533 25,712,538 25,620,105 25,573,941 25,758,893 25,727,831 1.62% 17.40% 9.28% 3.40% 45.03% 0.10% 1.54% 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% 424.91% 449.13% 507.42% 270.58% 667.40% 0.37% 0.36% 0.26% 0.47% 0.19% *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 2022 for a complete set of consolidated financials. 18 2 0 2 2 A N N U A L R E P O R T | C E L E B R A T I N G 1 5 0 Y E A R S O F C O M M U N I T Y 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) Securities held-to-maturity (carried at amortized cost) 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 2022 $80,992 49,290 130,282 1,185,528 128,242 357 4,710,396 72,606 4,637,790 58,097 108,407 15,795 27,994 4,970 134,909 $6,432,371 $1,736,761 3,723,859 5,460,620 105,864 297,000 5,863,484 127,004 646,100 (188,923) (15,383) 568,798 89 568,887 $6,432,371 25,825,127 25,349,225 2021 $51,830 631,410 683,240 1,398,558 0 7,470 4,287,841 67,773 4,220,068 59,309 97,652 13,772 17,674 4,970 54,610 $6,557,323 $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 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, 2022 and 2021, and the related consolidated statements of income, comprehensive income (loss), changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2022 (not presented herein); and in our report dated February 22, 2023, 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 consolidated financial statements from which it has been derived. Crowe LLP, South Bend, Indiana, February 22, 2023 2 0 2 2 A N N U A L R E P O R 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 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 2022 $203,668 2021 $170,551 2020 $177,185 14,132 19,553 2,214 239,567 36,281 399 36,680 202,887 9,375 193,512 10,954 11,595 12,214 3,560 432 579 633 21 1,874 41,862 58,530 12,050 12,826 26,804 110,210 125,164 21,347 $103,817 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 8,577 368 193,103 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 BASIC WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 25,528,328 25,475,994 25,469,242 BASIC EARNINGS PER COMMON SHARE $4.07 $3.76 $3.31 DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 25,712,538 25,620,105 25,573,941 DILUTED EARNINGS PER COMMON SHARE $4.04 $3.74 $3.30 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 2 0 2 2 A N N U A L R E P O R T | C E L E B R A T I N G 1 5 0 Y E A R S O F C O M M U N I T Y ◊ Condensed Consolidated Statements of Income Corporate Information Nature of Business Lakeland Financial Corporation is a $6.4 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 Tuesday, April 11, 2023 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 Cantor Fitzgerald & Co. Citadel Securities LLC Cowen and Company, LLC Cannacord Genuity LLC. Citadel Derivatives Group Llc D.A. Davidson & Co. G1 Execution Services, LLC Goldman, Sachs & Co. LLC GTS Securities LLC HRT Financial LC 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 Piper Sandler & Co. 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 Two Sigma Securities, LLC UBS Securities LLC Virtu Americas LLC Wall Street Access William Blair Summit Securities Group, LLC 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 investors.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 the investor relations section of 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 investors.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 2 0 2 2 A N N U A L R E P O R 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 Commercial Banking Senior Vice President—Regional Manager Todd A. Bruce Joseph F. Kessie William R. Redman J. Chad Stoltzfus Camalyn M. Treadway Christopher W. Wiggins First Vice President Timothy M. Schlichte Vice President Ronald L. BonDurant Steven L. Brown Brian D. Burrell Nathan R. Conley David J. Curry David E. Davis John F. Dietzen David S. Frey Chad A. Glassburn Keith B. Goodman Ryan L. Hart Rodney B. Hooley Cari J. Juillerat Jeffery W. Krusenklaus Gregory W. Lentz Cory E. McClarnon Patricia T. McNarney Shelly A. Meyer Gavin S. Miller Cameron V. Plew Benjamin A. Rice Michael J. Ryan D. Andrew Skaggs Eric J. Steenman Nicholas A. Toney Steven J. Troike Amber M. Wolfer Assistant Vice President Holly A. Davis Corbin J. Holtsberry Kelsey M. Jenkins Kris J. Kerlin Sara B. Millspaugh Luke C. Mungovan Kevin R. Poe Stacy M. Richardson Robin R. Ritchie Elizabeth A. Schmidlin Virginia E. Wirt Officer Quinten J. Bender Erin R. Martz Marlee J. Richter Consumer & Home Loans Senior Vice President Kirtus D. Murray Vice President Denise M. Brennan Sabrina N. Brown Scott B. Bucher Holly N. Clevenger Phillip G. Ensley Glenn A. Goudey Jodi L. Hammond Cheryl L. Luke Sarah J. Miller-Bontrager W. John Pritz Mark R. Rensner Assistant Vice President Chad J. Clinton John J. (J.J.) Foster Anna A. Jimenez Susan R. McClanahan Todd E. Pequignot Amanda M. Tom Officer Sandra F. Medina Corporate & Institutional Services Vice President Anna N. Corkill Melanie A. McIntyre Sheena L. White Tabitha A. Williamson Assistant Vice President Dan L. Beechy Michelle L. Harris Tiffany R. Mudd Credit Administration Senior Vice President Bradford S. Grabow Kimberly A. Hooley Donald J. Robinson-Gay Vice President Amanda R. Ellsworth Cynthia J. Gianneschi Christopher D. Hanson Justin T. Hayes Judd P. McNally Matthew R. Smith Marshall C. Weadick Assistant Vice President Joseph D. Burtnette Bridget M. Camden Seth M. Greiner Megan E. Ottinger Christoffer C. Penny Aaron T. Wood Jeffrey L. Wyckoff Officer Kyle A. Grimm Trent W. Koble Victoria A. Larrew Jordan Smith Troy D. Tom Thomas B. Weimer 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 Rae S. Kaleohano Luke A. Weick Operations Senior Vice President Lisa A. Fulton Vice President Michele R. Ganser Shannan L. Hepler Michelle L. Jacobsen Miranda R. Jordan Scot A. Karbach Jan R. Martin Timothy C. Vosberg Eric D. Wagoner Diane M. Wirth Donna J. Wolfe Assistant Vice President Lisa M. Bicknese Sherri L. DiRico Jill E. Garber Christine M. Himes Jennifer R. Kooistra Karla J. Kroll Katrina L. Mills Michele I. Myers Natalie M. Ousley Melissa S. Rupe Leslie R. Rutherford Officer Jennifer A. Bradley Denise M. Eldridge Lisa M. Goon Susan K. Hayes Brittney C. Hollopeter Jillian M. Howell Lindsay A. Justice Candince M. Leedy Cynthia L. Montel Jennifer L. Mosier Maritza Patino Carla A. Snyder People Development Vice President Ana Karina Cervantes Alice G. Hitchcock Mary A. Lepird Tori L. Platt Assistant Vice President Rhonda K. Frank Brianna D. Kreczmer Justin Taylor Officer Kristen J. Heiman Marissa Rico Property Management Vice President Rick Hatcher Richard A. Hoover Retail Banking First Vice President—Retail Banking Regional Manager Melissa J. Blosser Vice President—Retail Banking Regional Manager Karen A. Francis Sara B. Hill Pamela F. Messmore Steve D. Schumacher Kimberly K. Strawbridge Vice President Lisa S. Fitzgerald Assistant Vice President Jean A. Ciriello Officer Megan L. Sutter Risk Management Senior Vice President Matthew D. VanDeWielle First Vice President Jeannine P. Draper Cooley Vice President Gloria J. Crawford Dianne C. Harris Candy A. Little Amanda M. Longmire Kyle G. Schmidt Assistant Vice President Kristin D. Brown Aaron T. Connell Kristina R. Kiracofe Eric D. Neuenschwander Ashley L. Pluta Victoria L. Starr Becka J. Turnbow Officer Austin L. Bair Wendy N. Brown Hilda E. Cantu Kimberly A. Knoerzer Dakotah B. Lantz Technology Services Senior Vice President Darrin M. McLaughlin Vice President Paul D. Dausman Joanie L. Foreman Kimberly K. Mattke Christopher D. Merrill Assistant Vice President Jordan M. Bell Officer Andrew D. Lockridge David J. Miller Thomas R. Stephenson Jackie L. Stout Wealth Advisory Group Senior Vice President Andrew R. Haddock James D. Westerfield First Vice President Reneta U. Thurairatnam 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 Assistant Vice President Steven B. Burnside Leslie E. Rohrer Officer Janel A. Burnworth Deborah R. Cataldo Adam L. Esterline Phillip Nguyen 22 2 0 2 2 A N N U A L R E P O R T | C E L E B R A T I N G 1 5 0 Y E A R S O F C O M M U N I T Y Lake City Bank Offices Akron Argos Auburn Bremen Columbia City Concord Elkhart Beardsley Elkhart East Elkhart High School Elkhart Northwest Elkhart River District 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 Katelynn E. Rowe Emily E. Wold Emily E. Wold Melissa J. Blosser Christina J. Myer Dana L. Hess Steve D. Schumacher Nichole L. Mendez Kristi L. Manwaring Jennifer H. Leon Andrew P. Dance Ameenah K. Outlaw 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 G. Bridges Codie N. Gluchowski Brooke E. Bentley Mareen L. Barton Lori I. Cunningham Jana L. Miller Karen S. Scott Karen A. Francis Kimberly S. Orr Stephanie M. Butler Brooke C. Williams Brandon Prince Katina A. Stephenson Brenda S. Peterson Kelli-Anna Cook Carol D. Brown Penny S. Ramsey Kourtney M. Jackson Sandra A. Nelson-Rowland Alexandra L. Rhoades 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 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 Assistant Vice President, Retail Banking Officer Assistant Vice President, Retail Banking Officer First Vice President, Regional Manager Retail Banking Officer Vice President, Retail Banking Officer Vice President, Regional Manager Retail Banking Officer Assistant Vice President, Retail Banking Officer Retail Banking Officer Assistant Vice President, Retail Banking Officer Retail Banking Officer Vice President, Retail Banking Officer Vice President, Regional Manager 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 Retail Banking Officer Retail Banking Officer Assistant Vice President, 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, Regional Manager Retail Banking Officer 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. 2 0 2 2 A N N U A L R E P O R T 23 ANNUAL REPORT (888) 522-2265 LAKECI TYBANK. CO M LAKELAND FINANCIAL CORPORATION C E L E B R A T I N G 1 5 0 Y E A R S O F C O M M U N I T Y
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