Lakeland Financial Reports Record Quarterly Performance with a 24% Increase in Net Income; Annual Net Income Grows by 11% to $103.4 Million, as Net Interest Income Expands by 12%

Core Insights - Lakeland Financial Corporation reported record quarterly net income of $29.9 million for Q4 2025, a 24% increase from $24.2 million in Q4 2024 [1] - For the year ended December 31, 2025, net income was $103.4 million, an 11% increase from $93.5 million in 2024 [2] - Diluted earnings per share for Q4 2025 were $1.16, up 23% from $0.94 in Q4 2024 [1] Quarterly Financial Performance - Total revenue for Q4 2025 was $69.8 million, a 10% increase from $63.6 million in Q4 2024 [4] - Return on average equity improved to 15.59% from 13.87% year-over-year [6] - Average loans grew by $185.1 million, or 4%, to $5.27 billion compared to Q4 2024 [6] Capital Strength - The total capital ratio was 15.92% at December 31, 2025, exceeding the 10% regulatory threshold [7] - Tangible common equity to tangible assets ratio improved to 10.86% from 10.19% year-over-year [8] Dividend and Share Repurchase - The board approved a cash dividend of $0.52 per share for Q4 2025, a 4% increase from $0.50 in Q4 2024 [9] - The company repurchased 307,590 shares for $17.9 million in Q4 2025 [10] Net Interest Margin - Net interest margin for Q4 2025 was 3.48%, a 23 basis point increase from 3.25% in Q4 2024 [12] - The improvement was driven by a reduction in funding costs, with interest expense as a percentage of average earning assets falling by 36 basis points [12] Loan Portfolio - Total loans increased by $257.2 million, or 5%, from $5.12 billion at December 31, 2024, to $5.38 billion at December 31, 2025 [18] - Gross commercial loan originations for Q4 2025 were $567 million, contributing to a total of $1.7 billion for the year [19] Asset Quality - Nonperforming assets decreased by 63% to $20.9 million as of December 31, 2025, compared to $56.9 million a year earlier [31] - The allowance for credit loss reserve to total loans was 1.28%, down from 1.68% at December 31, 2024 [29] Investment Portfolio Overview - Total investment securities were $1.19 billion at December 31, 2025, a 6% increase from $1.12 billion a year earlier [34] Noninterest Income - Noninterest income decreased by 16% to $48.0 million for the year ended December 31, 2025, compared to $56.8 million in 2024 [35] - Adjusted core noninterest income increased by 2% from $46.8 million for the year ended December 31, 2024 [35] Noninterest Expense - Noninterest expense increased by 5% to $131.6 million for the year ended December 31, 2025, primarily due to increased salaries and benefits [39] - The company's efficiency ratio improved to 48.9% for the year ended December 31, 2025, compared to 49.3% in 2024 [42]