More annual reports from Lake City Bank:
2023 ReportAnnual Report (888) 522-2265 LAKECI TYBANK. CO M LAKELAND FINANCIAL CORPORATION Letter to Shareholders The exceptional strength of our capital structure and our extensive liquidity access provided a stable foundation to navigate the pressures of 2023. We view our fortress balance sheet as critical to our ability to fuel the economic growth and expansion of our Indiana communities. Across the board, our capital ratios significantly exceed the regulatory thresholds that define a well-capitalized financial institution and we will continue to focus on creating quality growth to further build capital. Over the past 32 years, our successful organic growth strategy has increased tangible book value per share by an unparalleled compounded annual growth rate of 10%. This track record reflects our consistent operating performance and strong financial results over a very long period of time. The greatest driver of our ability to continue our organic growth strategy is the meaningful relationships we develop with our clients, prospects, centers of influence and community leaders. In 2023, we recommitted to an active and engaged business development program and are happy to report that total business development calling increased by 30% in 2023 versus 2022. Importantly, prospect calling was up 51% for the year. Prospect calling is the most important building block for future market share growth. Client calling was up 18% and represented critical face-to-face relationship building. It’s the life blood of our balance sheet growth and we are very good at it. Joint calling, which brings together our client contact teams from different business lines, was up a whopping 302% in 2023. This joint calling results in a more focused and targeted business development effort. With these great calling efforts, we are well positioned to continue our organic growth well into the future. These efforts led to dynamic balance sheet growth again in 2023. Average loans increased by a strong 9% in 2023. Of note, this average loan growth of $387 million occurred throughout our Indiana markets. While line of credit usage remained historically low in 2023 ending the year at 39%, we increased our overall lines of credit available by $124 million. Just as importantly, our deposit retention efforts were successful, despite the challenges the banking industry experienced in 2023. Our core deposit retention, accompanied by robust liquidity availability, provided a Lake City Bank Shareholders, Clients and Community Partners: 2023 created many dynamic and unexpected challenges for the Lake City Bank team, and once again, they answered the call. After raising the target Fed Funds rate by 525 basis points in 11 rate actions in 2022 and 2023, the banking industry faced an unprecedented interest rate environment that created net interest margin challenges for the entire sector. In addition, the high-profile bank failures of 2023 had a significant impact on the industry. The combination of the interest rate environment and the bank failures created a dramatic and unprecedented increase in the banking industry’s cost of deposits. Proudly, we moved through these events with our solid balance sheet only getting stronger and with an encouraging outlook for our future. 2 2 0 2 3 A N N U A L R E P O R T stable funding position as we worked through 2023 and prepared for continued growth in 2024. While broad-based concerns of economic challenges and a widely predicted recession have not occurred, we remain diligently focused on preserving the historic quality of our loan portfolio. We are pleased that we ended 2023 with key loan quality metrics near historic lows. While this is encouraging, we continue to approach our credit underwriting process with the consistent standards we have applied for decades. We view our fortress balance sheet as critical to our ability to fuel the economic growth and expansion of our Indiana communities. Innovation through technology-driven solutions continued to be a critical focus. Lake City Bank Mobile Digital represented 55% of our transactional activity with clients in 2023, an increase of 53% versus only three years ago. For both Commercial and Retail Banking clients, our digital solutions provide the features and functionality that allow us to compete with our bigger bank peers. While technology is critical, our clients still leverage our branch network. More than 2 million transactions were completed in our offices in 2023, representing 15% of total transactions, the same percentage it was three years ago. This is evidence of the continued importance of a strategic branch footprint to serve our clients. We like seeing them and they like visiting us! As a result, we will continue to build new branches and we have exciting news on the branch development front. Our next three offices are planned for the Indianapolis market. In mid-2024, we’ll open a new office in the heart of Carmel, Indiana. This eighth branch in the Indianapolis market represents our continued growth and success in this important market. Our planned 55th office 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. We are also enthusiastic about our planned 56th office that will represent an extension of our terrific relationship with the Flanner House, a not-for-profit organization that serves the Black community on the near Northwest side of Indianapolis. The Flanner House’s mission is to support, advocate for and empower individuals, children and families by applying educational, social and economic resources that move members of the community toward stabilization, and self-sufficiency. We will build a full service office as part of the Flanner House’s development of a grocery store to serve the community. In partnership with the Flanner House, we are excited to fill a long-needed void in the banking desert of the near Northwest side of Indianapolis. We are, at our core, a community bank focused on taking care of clients, team members, communities, and shareholders. We love doing it. David M. Findlay Chairman and Chief Executive Officer Kristin L. Pruitt President 3 Management Committee Board of Directors Left to right: Eric H. Ottinger Executive Vice President Chief Commercial Banking Officer Stephanie R. Leniski Senior Vice President Chief Retail Banking Officer Donald J. Robinson Gay Senior Vice President Chief Credit Officer Kristin L. Pruitt President J. Rickard Donovan Senior Vice President General Counsel David M. Findlay Chairman and Chief Executive Officer Kyra E. Clark Senior Vice President Chief Human Resources Officer Lisa M. O’Neill Executive Vice President Chief Financial Officer Jonathan P. Steiner Senior Vice President Chief Wealth Advisory Officer Our leadership team is grateful that we get to lead an organization with nearly 700 team members all rowing in the same direction every day. While strategic plans and strategic initiatives drive our business execution, our success is only made possible by the team members who do the heavy lifting and manage our business day to day. We 4 2 0 2 3 A N N U A L R E P O R T are grateful for their dedication and commitment. For more than 150 years, the Lake City Bank team has developed a culture built upon a foundation of disciplined execution. It matters and it will be preserved and nurtured. Left to right: Kristin L. Pruitt President Lakeland Financial Corporation and Lake City Bank A. Faraz Abassi Managing Partner Centerfield Capital Michael L. Kubacki Former Chairman Lakeland Financial Corporation and Lake City Bank David M. Findlay Chairman and Chief Executive Officer Lakeland Financial Corporation and Lake City Bank Bradley J. Toothaker Executive Chairman Bradley Company Managing Partner 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, M E Raker Foundation, Inc. and Howard P. Arnold Foundation, Inc. Darrianne P. Christian Civic Leader Robert E. Bartels, Jr. Partner, Incedo LLC Steven D. Ross Former Owner Ross and Associates Brian J. Smith Co-Chief Executive Officer Heritage Group, Inc. After 26 years of leadership with the bank, Mike Kubacki will retire from our board of directors in April 2024. Mike joined Lake City Bank in 1998 as President and Chief Executive Officer and has been managing, guiding, mentoring and challenging the Lake City Bank team to achieve unrivaled success for our team members, our clients, our communities and our shareholders ever since. While Mike would never admit to having a legacy, his fingerprints are all over this organization and our success over the past quarter century. He leaves a legacy of thoughtful and impactful leadership. Our board of directors continues to serve a critical dual role of engagement in our Indiana communities and strong corporate governance and oversight. In addition, they are invaluable partners to the bank’s leadership team both strategically and operationally. 5 Wilson Fertilizer and Grain ROCHESTE R | CL IE NT SI NCE 2 0 1 3 We feel like Lake City Bank understands the farm side of business so much better than our previous bank. From left to right: Left to right: Ren Zent, Operations Manager; Ashley Young; Jeff Zent, President; Wendy Zent, Vice President; Whitley Moser, Office Manager From left to right: Karen Francis, Vice President, Retail Banking Regional Manager; Corbin Holtsberry, Vice President, Agribusiness Banking Officer; Ashley Young; Jeff Zent, President; Wendy Zent, Vice President; Whitley Moser, Office Manager; Ren Zent, Operations Manager; Penny Ramsey, Assistant Vice President, Retail Banking Officer; Rod Hooley, First Vice President, Agribusiness Manager Wilson Fertilizer and Grain and Lake City Bank have been running and growing the business ever since. been partners for a long time—since 2013, in fact. Expansion included new storage and dryer, and a The family-owned business, founded in 1933, started new shop. Today, Wilson’s capacity is just over 2.6 out offering coal and grain in Lakeville and Rochester. million bushels. Lake City Bank has been right there The business grew, multiplying storage capacity and with the Zents, providing commercial loans, business adding Anchor Mills to grind wheat (and later, corn), and personal deposit accounts, credit cards and purchasing additional elevators and adding acreage. treasury management solutions. “We feel like Lake As the time passed, the two locations became City Bank understands the farm side of business so separate businesses, with the Rochester location much better than our previous bank,” Wendy Zent, offering fertilizer and grain. In 2013, Jeff and Wendy Vice President, said. “I can call with any question and Zent purchased Wilson Fertilizer and Grain and have they are right there to help.” 6 2 0 2 3 A N N U A L R E P O R T 7 Goshen College GOSHEN | CLIENT SI NCE 201 8 We’ve found it’s really beneficial to work with a local bank that understands the community and can understand how an academic institution works, and how a college can be an anchor in the community. From left to right: Alma Jimenez, Assistant Vice President, Retail Banking Officer; Gabe Martinez, Student Senate President; Ben Bontrager, Vice President for Finance and Operations; Rebecca Stoltzfus, Ph.D., President; Gilberto Perez, Jr., Ed.D., Vice President for Student Life and Hispanic Serving Initiatives, Dean of Students; Amber Wolfer, Vice President, Commercial Banking Officer; Richard Delks, First Vice President, Senior Wealth Advisor; Michelle Harris, Assistant Vice President, Corporate and Institutional Services Sales Officer Spend a bit of time at Goshen College, and you’ll likely be surprised at what you find on the 135-acre tree-filled campus on the south side of Goshen. The beautiful setting is home to about 800 students pursuing degrees—both undergraduate and graduate, on campus and online—grounded in hands- on, real-world experiences. But there’s more. A Goshen College undergrad degree includes at least a semester’s worth of global education, often while living abroad. The school’s motto is “Culture for Service” and its mission is to graduate courageous, creative and compassionate leaders who transform local and global communities. A faith-based institution since its founding in 1894, Goshen College is a nationally ranked Hispanic-Serving Institution and Elkhart County’s only four-year liberal arts college. The college is made up of 64% of students from Indiana and 20,000+ alumni who are thriving in life, leadership and service around the community, country and the world. A multi-faceted organization like Goshen College needs support from financial partners with a deep understanding of the complexities of running an academic institution. Since 2018 Lake City Bank has helped Goshen College grow and thrive. The bank provides commercial loans, deposit products, technology-driven treasury management solutions, merchant card processing and services from the Wealth Advisory Group. “We’ve found it’s really beneficial to work with a local bank that understands the community and can understand how an academic institution works, and how a college can be an anchor in the community,” said Rebecca Stoltzfus, Ph.D., President. “Our team from Lake City Bank has been a real benefit to Goshen College.” Rebecca Stoltzfus, Ph.D., President 8 2 0 2 3 A N N U A L R E P O R T 9 Benchmark Human Services FORT WAYNE | CL I E NT SI NCE 2 0 1 8 The bank consistently brings us well thought out, creative solutions. From left to right: Front, David Curry, Vice President, Commercial Banking Officer; Shari Bail, Controller; Middle, Mark Flegge, Chief Financial Officer; Doug Beebe, Chief Executive Officer; Andy Haddock, Senior Vice President, Chief Investment Officer; Kelly Stahl, Assistant Controller; Back, Cammy Treadway, Senior Vice President, Commercial East Regional Manager; Dan Beechy, Assistant Vice President, Corporate and Institutional Services Sales Officer; Jim Westerfield, Senior Vice President, Chief Fiduciary Officer; Carrie Gutman, Senior Vice President, Chief Fiduciary Officer Benchmark Human Services is an organization that is, paradoxically, very complex and very simple at the same time. Simply put, Benchmark helps support people throughout life, from infancy to elder years. That means that Benchmark staff members meet people where they are—at home, at work or in the community. Since their founding in 1960, Benchmark has grown to be one of the most respected organizations in the country, serving people with intellectual and developmental disabilities and behavioral health needs. Benchmark’s complex side emerges when considering the size and scope of how it delivers high-quality, hands-on support to clients. Benchmark’s team of 3,100 serves more than 23,000 children and adults across the U.S. through residential, employment and day services, mobile crisis response and behavioral health support, and children and family services. Benchmark also works with state governments and private organizations, focusing on systems design and development, best practices, provider capacity building, facility evaluation and staff training. Benchmark has partnered with Lake City Bank since 2018, using lines and letters of credit, deposit products, technology-driven treasury management products, merchant services and services from the bank’s Wealth Advisory Group. “We’ve found that Lake City Bank is a strong partner for us,” said Doug Beebe, Chief Executive Officer. “The bank consistently brings us well thought out, creative solutions.” From left to right: Kelly Stahl, Assistant Controller; Mark Flegge, Chief Financial Officer; Shari Bail, Controller; Doug Beebe, Chief Executive Officer 10 2 0 2 3 A N N U A L R E P O R T 11 weIMPACT Group ELKHART | CL I ENT SI N CE 201 9 weIMPACT’s involvement in public and private partnerships makes a difference across Elkhart. From left to right: Todd Bruce, Senior Vice President, Commercial North Regional Manager; Dave Weaver, Founder; Brian Oakes, Fa- cilities Manager; JJ Osterloo-Bond, Design Partner; Steve Brown, Vice President, Commercial Banking Officer; Meggan Fink, Marketing & Community Partner; Emily Wold, Assistant Vice President, Retail Banking Manager; Brett Brumbaugh, Accountant; Brittany Croyle, Partner; Susan Diehl, Assistant to Dave Weaver weIMPACT Group focuses on what is possible at the intersection of entrepreneurship and philanthropy, using entrepreneurship to tackle solvable yet persistent opportunities in Elkhart. More specifically, weIMPACT’s initiatives are intentionally designed to be transformational—focusing traditional investment on local social priority projects to create sustainable local impact. weIMPACT Group primarily targets social priorities in arts and culture, education and community development. A lofty mission, certainly, but evidence of the company’s success is growing in the Elkhart area. Founded by Elkhart native Dave Weaver, weIMPACT’s involvement in public and private partnerships makes a difference across Elkhart. When the Community Foundation of Elkhart County led the development of the Elkhart Health and Aquatics Center through a progressive public-private sector partnership, it represented the beginning of a transformational change to Downtown Elkhart. It resulted from a collaboration that included Elkhart Community Schools, the City of Elkhart, Beacon Health System, the community foundation, and numerous community leaders and organizations. That’s when weIMPACT began a further transformation in Downtown Elkhart. Since 2019, weIMPACT Group has been quietly but thoughtfully making an impact in the community with intentional energy and time invested in the redevelopment of the Elkhart River District. The multi- phase River District combines public and private resources to reimagine a 105-acre multi-use campus that continues to grow. The Riverbend Building at 240 E. Jackson Blvd., where Lake City Bank is located in the River District, embodies the spirit of the projects weIMPACT Group champions. The building grew up during the COVID-19 pandemic as a mixed-use space for the intersection of people, businesses, recreation and local resources. With several developments in the River District on the horizon led by weIMPACT, the group is committed to doubling down on the work they’ve set out to do in making noticeable and intentional change in our community. Since 2019, weIMPACT and Lake City Bank have partnered, with the bank providing financing for development, technology- driven treasury management solutions and deposit products. “Lake City Bank has been a great partner, taking an active interest in the River District projects. They have roots in Elkhart and that has only enhanced their commitment,” said Dave Weaver, Founder. 13 Dave Weaver, Founder 12 2 0 2 3 A N N U A L R E P O R T Wedgewood Building Company CARMEL | CLIENT SI NCE 2018 Working with an Indiana bank works well for us. Lake City Bank knows the community and the market. From left to right: Erin Martz, Assistant Vice President, Senior Loan Administration Officer; Brad Love, Partner; Randy Henry, Director of Finance; Gary McNutt, Partner; Greg Lentz, Vice President, Commercial Banking Officer; Ashley Bridges, Assistant Vice President, Retail Banking Officer Wedgewood Building Company has put down roots in Carmel, in a lovingly restored and adapted former preschool in the heart of downtown. Partners Brad Love and Gary McNutt chose the spot as downtown Carmel was evolving into the charming city it is today—think brick walkways, bike and pedestrian paths and unique retail and restaurant options. It’s the perfect location for the company that creates high quality custom homes in Hamilton County, Zionsville and northern Marion County. Wedgewood prides itself on listening carefully. They believe that understanding a customer’s lifestyle is the only way they can create the best possible home for them. Careful listening has proven the right approach for Wedgewood and Lake City Bank as well. “Working with an Indiana bank works well for us,” McNutt said. “Lake City Bank knows the community and the market. They understand our business and our customers.” Wedgewood has multiple commercial loan products with Lake City Bank, technology- driven treasury management solutions, deposits and merchant services. The flexibility and local decision making that are central to Lake City Bank’s culture help lay the foundation for a thriving partnership. From left to right: Gary McNutt, Partner; Brad Love, Partner; Randy Henry, Director of Finance 14 2 0 2 3 A N N U A L R E P O R T 15 Seymour Midwest WARSAW | CLIENT SI NCE 199 1 Lake City Bank shares our commitment to customer service and quality. From left to right: Bill Henthorn, Chief Executive Officer and Owner; Bobbi Henthorn, Assistant Vice President and Owner Not pictured: Chuck & Judy Yeager and Randy Swanson, Owners From left to right: Jason Henthorn, Vice President, Logistics and Information Systems; Shelly Kammerer, Vice President, Retail Banking Officer and Private Banker; Chris Wiggins, Senior Vice President, Commercial South Regional Manager; Bill Henthorn, Chief Executive Officer and Owner; Bobbi Henthorn, Assistant Vice President and Owner; Randy Huss, Chief Financial Officer; Tiffany Mudd, Assistant Vice President, Corporate and Institutional Services Sales Officer; Matt Teevan, President and Chief Operating Officer Seymour Midwest is a family owned, global supplier to the hand tools market, with a product offering that includes 3,500+ unique tools and more than 8,000 different replacement handles. The origins of the company date back to 1872 when it began producing snath handles and wagon wheel spokes. Over the decades, the company has grown through acquisitions, product line expansions and a focus on organic growth. The range of products Seymour Midwest offers is vast and renowned in the marketplace for both its specialization and quality. Seymour Midwest operates two manufacturing facilities in Indiana as well as a sawmill and hickory handle finishing location in Tennessee. Vertically integrated, the company also has a sawmill at its Seymour, Indiana facility that processes a variety of American hardwoods for use in the company’s long handled tools and replacement handles. Additionally, the company’s manufacturing operations include presses that create the steel heads for many of its products, a furnace for heat treating them and both wet paint and powder coating operations. Customer orders are shipped from three warehouses with the majority being fulfilled from the Warsaw, Indiana headquarters. The company is equally diversified through the numerous channels and markets that count on Seymour Midwest’s tools and handles including retail, industrial, ag, irrigation and municipalities, fencing, sports field and turf, lake maintenance, resinous flooring, asphalt and seal coating, as well as seasonal products such as an industrial snow tool line. Seymour Midwest products are marketed under the Structron®, Seymour®, Kenyon®, Toolite®, Link Handles® and Midwest Rake® brands that are known in the marketplace for their superior quality. In its more than 150-year history, Seymour Midwest remains a company of toolmakers committed to quality and customer service. That commitment resonates with Lake City Bank. Seymour Midwest has commercial loans and lines of credit, technology-driven treasury management solutions, business credit cards and personal accounts with Lake City Bank. “Lake City Bank shares our commitment to customer service and quality,” said Bill Henthorn, Chief Executive Officer. “As our business grows and becomes more complex, the bank is ready with solutions that work for us.” 16 2 0 2 3 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) Condensed Consolidated Balance Sheets (Years ended December 31) (in thousands, except share data) End of Period Balances Assets Deposits Loans, net of Deferred Fees Allowance for 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 2023 $6,524,029 5,720,525 4,916,534 71,972 649,793 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 $6,464,980 6,114,225 1,184,659 4,813,678 $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 $5,604,228 4,128,922 4,295,743 588,667 $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 $197,035 202,347 5,850 49,858 130,710 93,767 $3.67 3.65 1.84 50.41% $25.37 $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 25,604,751 25,528,328 25,475,994 25,469,242 25,588,404 25,723,165 25,712,538 25,620,105 25,573,941 25,758,893 1.45% 15.93% 9.11% 3.31% 1.62% 17.40% 9.28% 3.40% 52.94% 45.03% 0.13% 1.46% 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% 458.01% 424.91% 449.13% 507.42% 270.58% 0.33% 0.37% 0.36% 0.26% 0.47% 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 (loss) Treasury stock Total Stockholders’ Equity Total Noncontrolling Interest Total Equity Total Liabilities and Stockholders’ Equity End of period shares issued End of period shares outstanding See Annual Report on Form 10-K. Report of Independent Registered Public Accounting Firm Stockholders and the Board of Directors of Lakeland Financial Corporation Warsaw, Indiana 2023 $70,451 81,373 151,824 1,051,728 129,918 1,158 4,916,534 71,972 4,844,562 57,899 109,114 21,420 30,011 4,970 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 4,970 121,425 $6,524,029 134,909 $6,432,371 $1,353,477 4,367,048 5,720,525 103,711 50,000 5,874,236 127,692 692,760 (155,195) (15,553) 649,704 89 649,793 $6,524,029 25,903,686 25,430,566 $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 *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 2023 for a complete set of consolidated financials. 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, 2023 and 2022, 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, 2023 (not presented herein); and in our report dated February 21, 2024, 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 21, 2024 18 2 0 2 3 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 (loss) 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 2023 $308,015 2022 $203,668 2021 $170,551 13,153 16,396 5,703 343,267 137,791 8,441 146,232 197,035 5,850 191,185 10,895 10,773 11,750 3,651 3,133 794 (254) (25) 9,141 49,858 59,147 11,992 14,003 45,568 130,710 110,333 16,566 $93,767 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 BASIC WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 25,604,751 25,528,328 25,475,994 BASIC EARNINGS PER COMMON SHARE $3.67 $4.07 $3.76 DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 25,723,165 25,712,538 25,620,105 DILUTED EARNINGS PER COMMON SHARE $3.65 $4.04 $3.74 See Annual Report on Form 10-K. 20 2 0 2 3 A N N U A L R E P O R T Corporate Information Nature of Business Lakeland Financial Corporation is a $6.5 billion bank holding company located in Warsaw, Indiana. Lake City Bank, its single bank subsidiary, is the seventh largest bank headquartered in the state and is 100% invested in Indiana. Lake City Bank operates 53 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 9, 2024 3:30 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. D.A. Davidson & Co. G1 Execution Services, LLC Goldman, Sachs & Co. LLC GTS Securities LLC IMC Financial Markets StoneX Financial Inc. Janney Montgomery Scott Inc. Keefe, Bruyette & Woods, Inc. Keybanc Capital Markets Inc. Leerink Partners, 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 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 Equinity Trust Company, LLC (“EQ”) PO Box 500 Newark, NJ 07101 (800) 937-5449 (718) 236-2641 fax helpAST@equiniti.com equinity.com/us/ 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 on its investor relations site, free of charge, 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 investor relations 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 21 Lake City Bank Officers Management Committee David M. Findlay Chairman & Chief Executive Officer Kristin L. Pruitt President Lisa M. O’Neill Executive Vice President Chief Financial Officer Eric H. Ottinger Executive Vice President Chief Commercial Banking 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 Donald J. Robinson-Gay Senior Vice President Chief Credit Officer Jonathan P. Steiner Senior Vice President Chief Wealth Advisory Officer Brokerage Vice President Eric J. Frappier Michael O. Jenkins Assistant Vice President Greg L. Emmack Officer Ashley N. Brewer Commercial Banking Senior Vice President—Regional Manager Todd A. Bruce William R. Redman J. Chad Stoltzfus Camalyn M. Treadway Christopher W. Wiggins First Vice President Chad A. Glassburn Rodney B. Hooley Timothy M. Schlichte Vice President Ronald L. BonDurant Steven L. Brown Nathan R. Burnell Brian D. Burrell Nathan R. Conley David E. Davis John F. Dietzen Chad P. Douglass Keith B. Goodman Ryan L. Hart Justin T. Hayes Corbin J. Holtsberry Cari J. Juillerat Jeffery W. Krusenklaus Gregory W. Lentz Meghan C. Marrello 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 Kris J. Kerlin Erin R. Martz Sara B. Millspaugh Luke C. Mungovan Kevin R. Poe Stacy M. Richardson Robin R. Ritchie Elizabeth A. Schmidlin Jordan D. Smith Virginia E. Wirt Officer Quinten J. Bender Trenton H. Cooper Brandon J. Krutsch 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 Vice President Amanda R. Ellsworth Cynthia J. Gianneschi Christopher D. Hanson Kerry M. Jones Judd P. McNally Matthew R. Smith Marshall C. Weadick Assistant Vice President Joseph D. Burtnette Bridget M. Camden Seth M. Greiner Kyle A. Grimm Megan E. Ottinger Christoffer C. Penny Aaron T. Wood Jeffrey L. Wyckoff Officer Victoria A. Larrew Maxxwell P. Sell Troy D. Tom Branden P. Wildey Executive Administration Officer Tina A. Rensberger 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 Luke A. Weick Operations Senior Vice President Lisa A. Fulton First Vice President Eric D. Wagoner Vice President Michele R. Ganser Shannan L. Hepler Michelle L. Jacobsen Miranda R. Jordan Scot A. Karbach Jan R. Martin Leslie R. Rutherford Timothy C. Vosberg Diane M. Wirth Donna J. Wolfe Assistant Vice President Katrina L. Beverly Lisa M. Bicknese Jennifer A. Bradley Sherri L. DiRico Jill E. Garber Brittney C. Hollopeter Lindsay A. Ignasiak Jennifer R. Kooistra Karla J. Kroll Jennifer L. Mosier Michele I. Myers Natalie M. Ousley Ashaunte M. Wallen Thomas B. Weimer Officer Micaela M. Alvarez Ashley D. Boyer Denise M. Eldridge Lisa M. Goon Kelli L. Hatfield Susan K. Hayes Jillian M. Howell Candince M. Leedy Maritza Patino Carla A. Snyder Brandice M. Wampler People Development Vice President Ana Karina Cervantes Alice G. Hitchcock Mary A. Lepird Tori L. Platt Assistant Vice President Rhonda K. Frank Kristen J. Heiman Brianna D. Kreczmer Justin Taylor Officer Marissa Rico Property Management Vice President Richard A. Hoover Sara B. Hill Alexandra L. Rhodes Steve D. Schumacher Kimberly K. Strawbridge Vice President Lisa S. Fitzgerald Melissa S. Rupe Assistant Vice President Jean A. Ciriello Officer Amanda C. Benzing 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 Becka J. Turnbow Assistant Vice President Austin L. Bair Wendy N. Brown Aaron T. Connell Kristin D. Hohman Kristina R. Kiracofe Kimberly A. Knoerzer Dakotah B. Lantz Eric D. Neuenschwander Ashley L. Pluta Brandon Prince Victoria L. Starr Officer Hilda E. Cantu 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 Noah S. Blakesley David J. Miller Jackie L. Stout Wealth Advisory Group Senior Vice President Carrie A. H. Gutman Andrew R. Haddock First Vice President Richard A. Delks Reneta U. Thurairatnam Vice President Steven B. Burnside Robert M. Congdon Lili A. Dailey Michelle L. Kindler Jennifer I. King Lisa A. Mansberger Scott R. Tapley Assistant Vice President Adam L. Esterline Leslie E. Rohrer Retail Banking First Vice President—Retail Banking Regional Manager Melissa J. Blosser Officer Janel A. Burnworth Deborah R. Cataldo Phillip Nguyen Assistant Vice President Christy E. Adams Holly A. Davis Kelsey M. Jenkins Finance & Treasury Senior Vice President Jennifer M. Hurford—Treasurer Brok A. Lahrman—Chief Accounting Officer Vice President—Retail Banking Regional Manager Karen A. Francis 22 2 0 2 3 A N N U A L R E P O R T 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 16 Tech 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 Alexandra L. Rhodes Sonia R. Teske Carolyn M. Ross Carrie L. Heavner Rebecca L. Miller Katelynn E. Rowe Melissa J. Blosser Marissa K. Sparks Melissa J. Blosser Emily E. Wold Dana L. Hess Steve D. Schumacher Nichole L. Mendez Kristi L. Manwaring Andrew P. Dance Breanne Kohli Ameenah K. Outlaw Imelda Herrera Alma R. Jimenez Sheryl L. Harlan Kathryn A. Smith Joseph P. Waltermann Paula J. Whiting Kyle R. Means 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 Nema R. Wireman Karen A. Francis Kimberly S. Orr Stephanie M. Butler Brooke C. Williams Andrea R. Bowers Katina A. Stephenson Brenda S. Peterson Kelli-Anna Cook Carol D. Brown Penny S. Ramsey Kourtney M. Jackson Sandra A. Nelson-Rowland Christina J. Myer Mark A. Berta Brittni A. Kuhn Kimberly K. Strawbridge Shelly R. Kammerer Jennifer M. Flinn Kathleen Madden Jessica L. Slone Sheryl L. Harlan Vice President, Retail Banking Officer Assistant Vice President, Retail Banking Officer Vice President, Retail Banking Officer Vice President, Retail Banking Regional Manager Vice President, Retail Banking Officer Vice President, Retail Banking Officer Retail Banking Officer Vice President, Retail Banking Officer Retail Banking Officer First Vice President, Retail Banking Regional Manager Retail Banking Officer First Vice President, Retail Banking Regional Manager Assistant Vice President, Retail Banking Officer Vice President, Retail Banking Officer Vice President, Retail Banking Regional Manager Assistant Vice President, Retail Banking Officer Vice President, Retail Banking Officer Vice President, Retail Banking Officer Retail Banking Officer 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 Vice President, Retail Banking Officer Retail Banking Officer Vice President, Retail Banking Officer Vice President, Retail Banking Officer Vice President, Retail Banking Officer Vice President, Retail Banking Regional Manager Assistant Vice President, Retail Banking Officer Assistant Vice President, Retail Banking Officer Vice President, Retail Banking Officer Assistant Vice President, Retail Banking Officer Vice President, Retail Banking Officer Vice President, Retail Banking Officer Retail Banking Officer Vice President, Retail Banking 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 Assistant Vice President, Retail Banking Officer Assistant Vice President, Retail Banking Officer Assistant Vice President, Retail Banking Officer Vice President, Retail Banking Officer Assistant Vice President, Retail Banking Officer Vice President, Retail Banking Regional Manager 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 Forward Looking Statement This document (including information incorporated by reference) contains, and future oral and written statements of the Company and its management may contain, forward- looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of the Company. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of the Company’s management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should” or other similar expressions. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events. A number of factors, many of which are beyond the ability of the Company to control or predict, could cause actual results to differ materially from those in its forward-looking statements. These factors include, among others, the following: (i) the strength of the local and national economy; (ii) the economic impact of future terrorist attacks and threats or acts of war and the response of the United States to any such attacks or threats; (iii) changes in state and federal laws, regulations and governmental policies concerning the Company’s general business; (iv) changes in interest rates and prepayment rates of the Company’s assets; (v) increased competition in the financial services sector and the inability to attract new customers; (vi) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (vii) the loss of key executives or employees; (viii) changes in consumer spending; (ix) unexpected results of acquisitions; (x) unexpected outcomes of existing or new litigation involving the Company; and (xi) changes in accounting standards and practices. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning the Company and its business, including additional factors that could materially affect the Company’s financial results, is included in the Company’s filings with the Securities and Exchange Commission. 23 Annual Report (888) 522-2265 LAKECI TYBANK. CO M LAKELAND FINANCIAL CORPORATION
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