Lakeland Financial (US:LKFN)2025-02-19 13:15Financial Performance - Net income for 2024 was $93.5 million, a decrease of 0.3% from $93.8 million in 2023, and 9.7% lower than $103.8 million in 2022[192]. - Diluted net income per share was $3.63 in 2024, down from $3.65 in 2023 and $4.04 in 2022, with a return on average total assets of 1.40% in 2024 compared to 1.45% in 2023[193]. - Core operational profitability for 2024 was $89.4 million, a decrease of 12.0%, or $12.2 million, compared to $101.6 million in 2023[226]. - Net income for 2024 was $93.5 million, a decrease of $289,000 compared to $93.8 million in 2023, driven by a 186.3% increase in provision expense and a 9.9% increase in income tax expense[223]. - The effective tax rate increased to 16.3% in 2024 from 15.0% in 2023, influenced by changes in accounting for low-income housing tax credit structures[247]. - Comprehensive income for 2024 is $82,173,000, a decrease of 35.51% from $127,495,000 in 2023[348]. Asset and Liability Management - Total assets increased to $6.678 billion as of December 31, 2024, a rise of $154.3 million or 2.4% from $6.524 billion in 2023, driven by loan growth of $201.4 million or 4.1%[196]. - Total equity increased to $683.9 million in 2024 from $649.8 million in 2023, representing a growth of 5.2%[217]. - Total deposits increased by $180.4 million, or 3.2%, to $5.901 billion at December 31, 2024, driven by increased public funds deposits[253]. - Total loans outstanding rose by $201.4 million, or 4.1%, to $5.118 billion at December 31, 2024, from $4.917 billion at December 31, 2023[253]. - Total risk-based capital ratio stood at 15.90% as of December 31, 2024, exceeding the Federal Reserve's minimum requirement of 10.0%[278]. Income and Expense Analysis - Noninterest income rose by $7.0 million, while noninterest expense decreased by $5.6 million, contributing positively to net income despite a $10.9 million increase in the provision for credit losses[194]. - Total noninterest expense decreased to $125.1 million in 2024, down 4.3% from $130.7 million in 2023, largely due to the absence of a wire fraud loss that impacted 2023 expenses[244]. - Total interest income increased to $373,158,000 in 2024, up 8.73% from $343,267,000 in 2023[347]. - Total interest expense increased by $30.2 million, or 20.7%, with deposit interest expense rising by $35.0 million, or 25.4%[232]. Credit Quality and Provisioning - Provision expense increased by $10.9 million or 186.3% in 2024, primarily due to the downgrade of one commercial borrower to nonperforming status[210]. - The allowance for credit losses was comprised of 32% specific reserves and 68% general reserves at December 31, 2024, compared to 11% specific reserves and 89% general reserves at December 31, 2023[201]. - Provision for credit losses rose to $16.8 million in 2024 from $5.9 million in 2023, with the allowance for credit losses representing 1.68% of total loans as of December 31, 2024[238]. - Nonperforming loans rose to $56,446 thousand, or 1.1% of total loans, at December 31, 2024, compared to $15,712 thousand, or 0.3% of total loans, at December 31, 2023[288]. - The ratio of allowance for credit losses to nonperforming loans was 152.25% at December 31, 2024, down from 458.01% at December 31, 2023[295]. Investment and Securities - The investment securities portfolio represented 16.8% of total assets on December 31, 2024, down from 18.1% on December 31, 2023[257]. - The investment in U.S. government-sponsored mortgage-backed securities represented approximately 38% of total investment securities fair value as of December 31, 2024[282]. - Purchases of securities available-for-sale totaled $27.5 million in 2024, compared to $7.2 million in 2023 and $315.3 million in 2022[257]. - The carrying value of mortgage servicing rights was $1.9 million as of December 31, 2024, down from $2.2 million in 2023[389]. Operational Efficiency - The efficiency ratio improved to 49.34% in 2024 from 52.94% in 2023, indicating better cost management[214]. - The adjusted core efficiency ratio for 2024 was 49.49%, compared to 47.40% in 2023, indicating a decline in operational efficiency[220]. - The Company aims to achieve optimum and stable net interest income through asset/liability management tools[328]. Future Outlook - The outlook for 2025 includes continued organic balance sheet growth and significant investment in the downtown Warsaw campus headquarters[211]. - The Company expects approximately $104.2 million of potential contingent funding from the securities portfolio in 2025[307].