Lakeland Financial (US:LKFN)2025-04-30 10:06Financial Performance - Net income for the first three months of 2025 was $20.1 million, a decrease of $3.3 million, or 14.2%, from $23.4 million in the same period of 2024[132] - Diluted income per common share was $0.78, down 14.3% from $0.91 in the comparable period of 2024[132] - Provision for credit losses increased by $5.3 million, or 347.4%, contributing to the decline in net income[132] - Noninterest income decreased by $1.7 million, or 13.4%, to $10.9 million for Q1 2025, down from $12.6 million in Q1 2024[140] - Noninterest expense increased by $2.1 million, or 6.7%, to $32.8 million for Q1 2025 compared to $30.7 million in Q1 2024[141] Asset and Equity Growth - Total assets increased to $6.851 billion as of March 31, 2025, up $172.8 million, or 2.6%, from $6.678 billion at December 31, 2024[118] - Total equity increased by $10.6 million, or 1.5%, from $683.9 million at December 31, 2024, to $694.5 million at March 31, 2025[118] - Retained earnings increased by $7.2 million, or 1.0%, primarily due to net income of $20.1 million[118] - Total cash and cash equivalents increased by $67.0 million, or 39.8%, to $235.2 million at March 31, 2025, from $168.2 million at December 31, 2024[144] - Total loans increased by $98.8 million, or 2.0%, to $5.131 billion at March 31, 2025, driven by growth in commercial and industrial loans and consumer mortgage loans[151] Income and Interest Metrics - Net interest income rose by $5.5 million, or 11.5%, offsetting some negative impacts on net income[132] - Net interest income increased by $5.3 million, or 10.9%, to $54.0 million for Q1 2025 compared to $48.7 million in Q1 2024[135] - The tax equivalent net interest margin expanded by 25 basis points to 3.40% for Q1 2025, up from 3.15% in Q1 2024[137] - The average rate for interest bearing deposits decreased by 60 basis points, from 3.80% to 3.20%[137] - The average borrowing costs decreased by 107 basis points from 5.61% for the three months ended March 31, 2024 to 4.54% for the same period in 2025[162] Credit and Risk Management - Provision for credit losses increased by $5.3 million, or 347.4%, to $6.8 million for Q1 2025 compared to $1.5 million in Q1 2024[138] - As of March 31, 2025, the allowance for credit losses was 1.77% of total loans, an increase of 9 basis points from 1.68% at December 31, 2024[155] - The allowance for credit losses increased by $6.5 million, or 7.5%, from $86.0 million at December 31, 2024 to $92.4 million at March 31, 2025[160] - Nonperforming assets increased by $1.0 million, or 1.7%, to $57.9 million during Q1 2025, with the ratio of nonperforming assets to total assets decreasing to 0.84%[152] - The Company had 82 credit relationships with principal balances totaling $215.6 million on the classified loan list as of March 31, 2025[158] Capital Ratios - The consolidated total capital to risk-weighted assets ratio is 15.77%, exceeding the minimum required ratio of 8.00%[169] - The consolidated Tier I capital to risk-weighted assets ratio stands at 14.51%, above the minimum requirement of 6.00%[169] - The consolidated Common Equity Tier 1 (CET1) ratio is 14.51%, significantly higher than the minimum requirement of 4.50%[169] - The bank's total capital to risk-weighted assets ratio as of December 31, 2024, was 15.76%, also above the required 8.00%[169] - The bank's Tier I capital to average assets ratio is 12.21%, exceeding the minimum requirement of 4.00%[169] Market and Economic Conditions - The Company anticipates receiving approximately $82.3 million in principal and interest cash flows from the investment securities portfolio during the remainder of 2025[146] - The company has a primary market risk exposure to interest rate risk, with no material exposure to foreign currency exchange risk[173] - The Corporate Risk Committee reviews and approves the interest rate risk management policy annually, with the last review in July 2024[173] - The company is subject to various risks including changes in economic conditions, interest rates, and competition from other financial service providers[171] - The company emphasizes the importance of not placing undue reliance on forward-looking statements due to inherent uncertainties[171]