Lakeland Financial Reports Third Quarter Performance; Net Income Grows by 13% to $26.4 Million, as Net Interest Income Expands by 14%

Core Insights - Lakeland Financial Corporation reported a net income of $26.4 million for Q3 2025, a 13% increase from $23.3 million in Q3 2024, with diluted earnings per share rising to $1.03 from $0.91 [1] - For the nine months ended September 30, 2025, net income was $73.5 million, up 6% from $69.3 million in the same period of 2024, with diluted earnings per share increasing to $2.85 from $2.69 [2] Quarterly Financial Performance - Net interest margin improved by 34 basis points to 3.50% in Q3 2025 compared to 3.16% in Q3 2024, driven by reduced funding costs [19] - Average loans grew by $141.5 million, or 3%, to $5.21 billion year-over-year, while core deposits increased by $107.9 million, or 2%, to $5.85 billion [5][9] - Noninterest income rose by $1.0 million, or 9%, to $13.0 million in Q3 2025 compared to Q3 2024, with significant contributions from loan and service fees [28] Capital Strength - Return on average equity improved to 14.60% from 13.85% year-over-year, and return on average assets increased to 1.53% from 1.39% [5] - Common equity tier 1 capital ratio improved to 15.06% from 14.49% year-over-year, indicating a strong capital position [6] Loan Portfolio - Total loans increased by $166.1 million, or 3%, from $5.08 billion as of September 30, 2024, to $5.25 billion as of September 30, 2025, with notable growth in commercial real estate and multi-family residential loans [10] - Loan origination activity exceeded $400 million during the quarter, reflecting strong demand in the market [10] Asset Quality - Nonaccrual loans decreased by 68% to $18.7 million from $57.6 million year-over-year, indicating improved asset quality [23] - The ratio of allowance for credit losses to total loans was 1.30% at September 30, 2025, down from 1.65% a year earlier [23] Investment Portfolio Overview - Total investment securities increased by $16.9 million, or 1%, to $1.16 billion as of September 30, 2025, representing 17% of total assets [27] Noninterest Expense - Noninterest expense rose by $4.6 million, or 15%, to $35.0 million in Q3 2025 compared to Q3 2024, primarily due to increased salaries and benefits [32] - The company's efficiency ratio was 50.7% for Q3 2025, compared to 49.7% for Q3 2024 [35]