Lakeland Financial Corporation · NASDAQ:LKFN
Lakeland Financial — Q4 2024 Earnings Presentation
62 slides from Lakeland Financial's earnings presentation, 2025
Slide 1: A Proven History of Shareholder Value Creation
Lakeland Financial Corporation A Proven History of Shareholder Value Creation And Commitment to Our Communities 4th Quarter 2024 LKFN LISTED
Slide 2: Executive Contacts
David M. Findlay Chairman & Chief Executive Officer david.findlay@lakecitybank.com (574) 267-9197 Kristin L. Pruitt President kristin.pruitt@lakecitybank.com (574) 371-9220 Lisa M. O’Neill Executive Vice President & Chief Financial Officer lisa.oneill@lakecitybank.com (574) 267-9125 2
Slide 3: Forward-Looking Information
Forward-Looking Information This presentation 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. Forward-looking statements are not historical facts and
Slide 4: Bank Director Magazine – Top U.S. Banks
Bank Director Magazine – Top U.S. Banks 4
Slide 5: Long Term Success for Shareholders
Long Term Success for Shareholders 5 Institutions (including LKFN) LTM ROE >13% LTM ROE >13% 20-Year TBVPS 13 Institutions CAGR >8%(3) 154 Institutions Profitable for the Last 10 Years(2) 188 Institutions Exchange Traded Depositories with Assets Between $1B and $10B(1) Source: S&P Capital IQ Pro. Fi
Slide 6: Strong Capital Structure
Strong Capital Structure Tangible Book Value(1) Per Share $32.93* Allowance for Credit Losses $35.00 7.9% $26.47 $30.00 Tangible Common Equity $25.00 92.1% $20.00 Key Ratios and Per Share Data as of $15.00 December 31, 2024 TCE/Tangible Assets 10.19% $10.00 Adj. TCE/Adj. Tangible Assets 12.37% Total
Slide 7: Lake City Bank Today
Lake City Bank Today • A long-term and consistent organic growth story • Headquartered in Warsaw, Indiana • 54 branch offices - $6.7 billion banking assets - $3.4 billion trust, retirement and investment brokerage assets • Focused on execution – “blocking and tackling” • Continued growth potential 7
Slide 8: 34 Years of Organic Growth
34 Years of Organic Growth Record Net Income for 30 of 34 Years (000’s) $120,000 $93,478 $100,000 Compound Annual Growth 1991 – 2024 • Loans = 10% • Deposits = 10% $80,000 • Net Income = 11% • Earnings Per Share = 11% $60,000 $40,000 $2,707 $20,000 $0 2000 2004 2019 1991 1992 1993 1994 1995 1996 199
Slide 9: Established Market Presence
Established Market Presence Organic Growth Potential in Mature and Expanding Markets 9
Slide 10: A Continued Path to Economic Growth
A Continued Path to Economic Growth • 67% of Lake City Bank counties are growth and high growth counties • 40% of Lake City Bank counties are high growth counties • Indiana is poised to experience continued economic strength and vitality 10
Slide 11: Strong Regional and Statewide Economy
Strong Regional and Statewide Economy Unemployment Rate In The Lake City Bank Footprint Is Consistent With The National Average 14.0% 13.0% 12.0% 10.0% Unemployment 8.0% 7.4% 11.9% 6.0% 6.6% 6.4% 5.5% 8.0% 4.8% 4.0% 6.6% 4.4% 5.7% 4.0% 3.9% 3.9% 3.7% 4.8% 3.5% 4.5% 3.4% 3.3% 4.2% 3.8% 3.7% 3.2% 3.2%
Slide 12: Lake City Bank Balance Sheet Dynamics
Lake City Bank Balance Sheet Dynamics 1. Capital Strength 2. Diversified Deposit Composition 3. Liquidity Availability 4. Investment Securities Portfolio 5. Asset Liability Management 12
Slide 13: Fortress Balance Sheet And Capital In Excess of Requirements
Fortress Balance Sheet And Capital In Excess of Requirements LKFN Above Peer Long-Term Profitability has Contributed to a Strong Capital Foundation Proxy Peer Average RBC Q3’24 15.0% 15.9% 16.0% 15.0% 14.0% 13.3% 13.0% 12.0% 11.0% Well Capitalized Threshold 10.0% for Consolidated Risk-Based Capital
Slide 14: Deposit Composition Provides Diversification
Deposit Composition Provides Diversification Strong Commercial Deposit Growth Brokered Brokered Deposits Deposits $41,560 $113,528 1% 3% Total Total Commercial Commercial Total Retail $1,276,047 $2,269,049 $1,780,726 31% Total Retail 38% 30% $1,617,133 39% Total Public Total Public Fund Fund $1,127,
Slide 15: Diversified Deposit Base
Diversified Deposit Base Deposit Franchise Consists of Broad-based and Deep Relationships • Deposit composition has remained stable with commercial deposits increasing as a percent of total deposits • Lake City Bank had 119,934 deposit accounts at December 31, 2024. 117,490, or 98%, of those account
Slide 16: Public Fund Deposit Trends
$400,000 $600,000 $800,000 $200,000 $0 $1,000,000 $1,200,000 $1,400,000 $1,800,000 $1,600,000 $1,215,533 $1,211,148 $1,253,704 $1,281,451 $1,127,111 Checking and MMA $1,132,438 $1,103,014 $1,212,131 $1,162,457 $1,204,153 CDs $1,275,388 $1,289,603 $1,284,641 $1,340,566 $1,458,179 $1,481,100 $1,429,87
Slide 17: Checking Account Trends by Deposit Sector
Checking Accounting Trends by Deposit Sector Commercial Accounts Grow by 21% since December 2019 (000) Checking Account Average Balances $2,500,000 by Deposit Type (000) Public Commercial Retail Funds $2,129,952 $2,000,000 $2,105,411 12/31/24 $136 $16 $6,209 $2,079,407 $1,953,969 12/31/23 $137 $15 $
Slide 18: Robust Liquidity Sources
Robust Liquidity Sources • Available liquidity is stable at $3.7 billion, up from $3.4 billion at December 31, 2023 • Sources of liquidity are varied and represent wholesale funding and brokered deposits • Brokered deposits represent 1% of total deposits • Noncore funding represented 1% of total dep
Slide 19: Projected Impact of Rising/Falling Rates
Projected Impact of Rising/Falling Rates Asset Sensitive Balance Sheet Maintains Neutral Shift 4.00% 2.00% 0.07% 0.11% 0.18% 0.24% 0.04% 0.00% -0.22% -0.08% -0.54% -2.00% -1.48% -3.21% -4.00% Dn 300 Dn 200 Dn 100 Dn 50 Dn 25 Up 25 Up 50 Up 100 Up 200 Up 300 Graph presents 12 month projected net inte
Slide 20: Net Interest Margin
Net Interest Margin Deposit Costs Coming Down Rapidly • Noninterest bearing deposits to total deposits was 22% unchanged from the third quarter 2024 • Linked quarter net interest margin expanded by 9 basis points in 4Q24 compared to 3Q24 • Cumulative Loan Beta 25% for recent easing cycle • Cumulativ
Slide 21: Interest Rate Sensitivity
Interest Rate Sensitivity Deposits Have Repriced Quicker than Loans During Current Easing Cycle • 88% of loan portfolio consists of FHLB/Other commercial loans and 66% of $575,097 13% commercial loans are tied to variable interest rates SOFR Fixed Rate $1,332,548 $1,552,359 • Approximately $718.5 mi
Slide 22: Shareholder Value Strategy
Shareholder Value Strategy 1. Commercial Banking Focus 2. High Quality Team Members 3. Proven Organic Growth Experience 4. Focus on Core Deposit Funding 5. Commitment to Technology 22
Slide 23: Commercial Banking Focus
Commercial Banking Focus Experienced Relationship Driven Team • 42 credit “smart” commercial bankers • Average 25 years in banking & 14 years at Lake City Bank • We live where we lend • Face to face calling matters and is a team effort • We understand our clients’ needs • Deep organizational structu
Slide 24: Credit Process
Credit Process Commercial Banking Focus • Our credit discipline has never changed • We have a centralized committee structure • We are in-market lender to in-market clients • Character matters – we lend to people first • We focus on management/cash flow • Structure is important and is disciplined •
Slide 25: Corporate Social Responsibility
Corporate Social Responsibility Over 150 Years of Focusing on Our Customers, Employees and Our Communities • Supporting our communities since 1872 • Caring for and building a diverse and inclusive team • Delivering customer-focused loan and deposit products to our communities • Developing strong cyb
Slide 26: Lake City Bank Culture
Lake City Bank Culture High Quality Team Members • Our culture is our greatest asset and we will preserve it • Lake City University drives our culture • Diversity, Equity and Inclusion are ongoing initiatives that create a culture of belonging • Our community involvement is real and critical to our
Slide 27: Mature Market Deposit Performance
Mature1 Market Deposit Performance Organic Growth 2014 – 2024 $3,000 $2,688 $2,495 $2,500 Lake City Bank has grown $2,000 deposits by 93% over the $1,763 last ten-year period. $1,500 $1,000 $521 $447 $500 $373 $332 $257 $0 -$219 -$500 -$1,000 -$1,500 -$1,210 1st Source Lake City Bank JPM Chase Star
Slide 28: Expansion and Innovation Occurring Throughout Indiana
Expansion and Innovation Occurring Throughout Indiana • Indiana #1 manufacturing state in the country(1) • Indiana received tech hub designations from the federal government in microelectronics, hydrogen energy and biotechnology.(2) • Indiana to host semiconductor event in 2025. The state has attrac
Slide 29: Commitment to Technology
Commitment to Technology Innovation and Competitive Technology is a Focus • Fintech partnerships play a significant role in our technology stack and enable delivery of innovative solutions to our customers • Investments in Lake City Bank Digital, a Q2 product implemented in 2021 with ongoing functio
Slide 30: Channel Utilization Today versus Pre-Pandemic
Channel Utilization Today versus Pre-Pandemic Mobile Adoption Outpacing All Other Delivery Channels Total Total Channel Transactions % of Transactions % of Period Type 2019(1) Total 2024(1) Total Change Branch Transactions 2,279,975 18% 2,054,332 14% (10)% ATM/ITM 944,785 7% 763,128 5% (19)% Online
Slide 31: Customer Composition and Digital Adoption
Customer Composition and Digital Adoption Digital Platform Upgrade with Fintech Partner in 2021 Positively Impacting Digital Adoption Across All Generations Customer Composition and Digital Adoption Over Three Years Customer Generation(1) Breakdown 12/31/24 12/31/23 12/31/22 Gen Alpha (2010 - Curren
Slide 32: Financial Performance
Qoake City Bank Financial Performance
Slide 33: Income Performance Metrics
Income Performance Metrics LKFN Performance Exceeds National Peers and Contributes to Strong Capital Levels ROAE and ROATE LTM Peer Average Data1 22.00% National Indiana ROAE 8.7% 9.5% 2.70% ROATE 11.0% 10.7% 20.00% 17.52% 18.00% 16.03% 15.57% 2.20% 17.40% 14.20% 16.00% 14.27% ROAE and ROATE 13.59%
Slide 34: Net Income and EPS
Net Income and EPS Loan Growth and FOMC Easing Cycle Benefit Net Income in 2024 $103,817 $4.50 $100,000 $95,733 $93,767 $93,478 $4.00 $87,047 $84,337 $4.04 $3.74 $3.50 $80,000 $3.65 $3.63 $3.38 Net Income $3.30 $3.00 $60,000 EPS $2.50 $40,000 $2.00 $1.50 $20,000 $1.00 $0 $0.50 2019 2020 2021 2022 20
Slide 35: Pretax Pre-Provision Earnings
Pretax Pre-Provision Earnings Pretax Pre-Provision Earnings Improves by 11% in 2024 $160,000 6.00% $140,000 $134,539 $128,439 Pretax Pre-Provision Earnings/Average Assets 5.00% $118,646 $118,521 $116,183 $120,000 $110,620 Pretax Pre-Provision Earnings 4.00% $100,000 $80,000 3.00% $60,000 2.00% 2.24%
Slide 36: Average Loans
Average Loans Average YTD Loan Growth of $226 million or 5% Compared to Prior Year $6,000,000 120% $5,039,406 $5,000,000 $4,813,678 110% $4,424,472 $4,421,094 $4,427,166 $3,974,532 $4,000,000 100% Loans to Deposit Ratio 94% 95% 90% $3,000,000 Loans 86% 86% 80% 83% $2,000,000 77% 70% $1,000,000 60% $
Slide 37: Line of Credit Utilization
25% 35% 45% 55% 65% 75% 85% 95% $1,593 $1,835 3,429 46% PPP Round 1 $1,637 $1,785 3,423 48% $1,473 $2,066 3,539 $1,446 $2,109 3,554 PPP Round 2 $1,499 $2,044 3,544 42% 41% 42% $1,410 $2,190 3,600 $1,494 $2,206 3,700 39% 40% $1,553 $2,243 3,795 $1,690 $2,321 4,011 41% 42% $1,746 $2,353 4,098 $1,805 $
Slide 38: Commercial DDA
Line of Credit Utilization 35% 40% 45% 50% 55% 60% 30% Dec-13 $389,051 50% Dec-14 $467,458 51% Dec-15 $572,966 50% Dec-16 $660,360 52% Dec-17 $740,576 54% Dec-18 $775,947 Dec-19 $814,430 49% Commercial DDA 46% Mar-20 $883,956 48% PPP Jun-20 $1,216,414 42% Round 1 Sep-20 $1,218,943 Dec-20 $1,273,886
Slide 39: Loan Portfolio Breakdown
Loan Portfolio Breakdown C&I Drives Lending Business Agri-business - Other Residential Commercial RE - Agriculture Commercial Mortgage Construction $387,396 $95,584 $259,286 $567,781 8% 2% 5% 11% Home Equity $214,125 4% Commercial RE - Multifamily Installment - Other $344,978 Consumer 7% $120,859 2%
Slide 40: Top Industry Concentrations
Top 10 Industry Concentrations Loan Portfolio is Diversified Restaurants Nonbank Lenders Automobile Dealers $111,226 $103,216 $119,816 Hotels 2% 2% 2% $113,252 Senior Living 2% $125,720 3% Misc. Durable Goods RV Industry Merchant Wholesalers $217,082 $101,955 4% 2% Industrial CRE $252,713 5% Multifa
Slide 41: Average Deposits
Average Deposits Average YTD Deposit Growth of $232 million or 4% Compared to Prior Year (000’s) 150% $6,000,000 $5,717,358 $5,836,025 $5,604,228 140% $5,357,284 130% $5,000,000 $4,650,597 Deposits as a Percent of Total Funding $4,242,524 120% $4,000,000 110% Deposits 100% $3,000,000 98% 98% 99% 100
Slide 42: Deposit Breakdown
Deposit Breakdown Deposit Costs Are Repricing Downward with Federal Funds Rate Cuts Brokered Deposits Annual Cost of Deposits $41,560 3.00% 1% 2.00% 1.00% 0.00% Total 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Total Retail Commercial $1,780,726 $2,269,049 30% 38% Deposit C
Slide 43: Net Interest Income
Net Interest Income Net Interest Margin Compression Offset by Organic Loan and Deposit Growth (000’s) $250,000 4.50% $202,887 Net Interest Margin, fully tax equivalent $197,035 $196,679 $200,000 $178,088 Net Interest Income $163,008 $155,047 4.00% $150,000 3.38% 3.40% 3.50% 3.31% $100,000 3.19% 3.07
Slide 44: Asset Quality: Nonperforming Assets
Asset Quality Nonperforming Loans Rise Due Primarily to a Single Commercial Credit 6.00% 14.00% 5.00% Watch List Loans to Total Loans excluding PPP 12.00% Nonperforming Assets to Total Assets 4.00% 10.00% 8.86% 8.17% 8.06% 3.00% 7.46% 8.00% 6.64% 6.75% 2.00% 5.75% 5.50% 6.00% 4.64% 4.77% 4.28% 4.50%
Slide 45: Asset Quality: Allowance for Credit Losses
Asset Quality Allowance for Credit Losses Represents Strong Coverage 0.60% 2.70% 2.39% 2.28% 2.40% 0.50% ACL to Total Loans, excluding PPP 2.15% 2.10% Net Chargeoffs to Average Loans 1.92% 0.40% 1.67% 1.68% 1.80% 1.59% 1.59% 1.54% 1.42% 1.45% 1.46% 0.30% 1.50% 1.26% 1.23% 1.24% 1.25% 0.20% 1.20% 0.9
Slide 46: Noninterest Income
Noninterest Income Core Fee-Based Revenue Growth Continues (000’s) $60,000 $56,844 60% Non-Interest Income as % of Total Revenue $49,858 $50,000 $46,843 50% $44,997 $44,720 $41,862 Non-Interest Income $40,000 40% $30,000 30% $20,000 20% 22% 22% 22% 20% 20% 17% $10,000 10% $0 0% 2019 2020 2021 2022 2
Slide 47: Total Revenue
Total Revenue Revenue Growth Benefits from Growth in Noninterest Income (000’s) $300,000 $246,893 $253,523 $244,749 $250,000 $222,808 $209,851 $200,044 $200,000 $150,000 $100,000 $50,000 $0 2019 2020 2021 2022 2023 2024 Compound annual growth rate “CAGR” is based on the most recent 5-year calculatio
Slide 48: Noninterest Expense
Noninterest Expense Disciplined Investment in People and Technology Continues (000’s) $140,000 $130,710 $125,084 $120,000 $110,210 $104,287 $100,000 $89,424 $91,205 $80,000 $60,000 $40,000 $20,000 $0 2019 2020 2021 2022 2023 2024 (1) (1) Noninterest Expense includes $4.5 million of non-core expense
Slide 49: Efficiency Ratio
Efficiency Ratio Efficiency Ratio Normalizes in 2024 70% Constant investment in technology and facilities 60% 52% 53% 51% 50% 50% 48% 49% 50% 46% 47% 45% 45% 45% 43% 47% 40% 30% 20% 10% 0% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 12023 Year-to-date adjusted core efficiency ra
Slide 50: Stable Healthy Dividend
Stable Healthy Dividend Growth in Dividend Reflects Strength of Capital $1.92 6.00% $1.90 $1.84 $1.70 $1.60 5.00% $1.50 $1.36 4.00% Dividend per Share $1.30 $1.20 Dividend Yield $1.16 $1.10 2.82% 2.79% 3.00% 2.40% $0.90 2.24% 2.19% 1.70% 2.00% $0.70 $0.50 1.00% $0.30 $0.10 0.00% 2019 2020 2021 2022
Slide 51: LKFN Shareholder Value
LKFN Shareholder Value Total Return Performance from 12/31/00 to 12/31/24 3,500.00 3,000.00 2,974.35% 2,500.00 2,000.00 1,500.00 1,000.00 602.74% 500.00 237.57% 237.51% 0.00 (500.00) 2005 2016 2000 2001 2002 2003 2004 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2017 2018 2019 2020 2021 2022 20
Slide 52: Investment Highlights
Investment Highlights • Proven History of Organic Growth • Disciplined and Focused Strategy • Strong Internal Culture • Consistent Execution • Service Excellence Drives Shareholder Value 52
Slide 53: Supplemental Information
Supplemental Information Qoake City Bank
Slide 54: Lake City Bank Capital Adequacy
Lake City Bank Capital Adequacy Capital Strength Continues in December 2024 Non-GAAP Non-GAAP Non-GAAP Adjusted December Well- Capital AOCI and Excess Capital Regulatory Ratio 31, 2024 Capitalized Cushion HTM Capital Ratios with Description * Actual Threshold (in 000’s) Losses- after AOCI AOCI and a
Slide 55: Liquidity Preparedness
Liquidity Preparedness December 31, 2024 Additional Loan Collateral Liquidity Available for (000) Availability Used Unused/ Available Pledge Secured/Committed Borrowings: Federal Home Loan Bank-Indianapolis(1) $ 555,910 $ 0 $ 555,910 $ -- Federal Reserve Bank Discount Window 1,364,475 -- 1,364,475 7
Slide 56: Investment Portfolio
Investment Portfolio Recurring Cash Flows Used to Fund Organic Loan Growth 25% 20% 21% 20% US Govt MV Investments as a % of Assets 18% Remics 15% 17% 8% US Govt Pools US Govt 30% 10% 13% 12% 12% 12% 12% 14% Agencies 10% 5% HTM Municipals 10% 0% AFS Municipals 2015 2016 2017 2018 2019 2020 2021 2022
Slide 57: Investment Security Portfolio Cashflows
Investment Security Portfolio Cashflows Cash Flows of $394 million Expected Through December 2028 (000,000) Investment Portfolio has generated 35,000 $268 million in cash flow and proceeds from sales January 2023 30,000 through December 2024 6,590 25,000 8,299 8,701 8,055 8,479 7,606 7,408 6,241 7,2
Slide 58: Investment Portfolio Analysis
Investment Portfolio Analysis Investment Portfolio as a Percentage of Total Assets Continues to Decline 12/31/2024 12/31/2023 Weighted Market % of Weighted Market % of Maturity Value Total Maturity Value Total US Govt REMICS 6.05 85,794 8% 6.28 98,265 8% US Govt Pools 6.83 336,615 30% 7.44 349,577 3
Slide 59: Commercial Loans by County
Commercial Loans by County Commercial Customers in 49 Indiana Counties and 21 Other States Other IN Marshall Counties (1) 3% 17% Outside IN Marion 6% 15% Allen 18% Hamilton 10% Commercial Loans Kosciusko Outstanding as of Elkhart 10% 12/31/2024 St. Joseph 13% $4.5 billion 8% December 31, 2024 (000’s
Slide 60: Larger Market Organic Expansion
Larger Market Organic Expansion Organic Growth State LCB LCB Deposit Rank County Primary City Population* Entry Market Share** # of Branches 22. Kosciusko Warsaw 80,364 1872 67% 12 6. Elkhart Elkhart 206,409 1990 22% 11 5. St. Joseph South Bend 272,848 1997 8% 4 3. Allen Fort Wayne 394,545 1999 14%
Slide 61: Mature Market Strength and Growth
Mature Market Strength and Growth Organic Growth (millions)1 2024 2014 2024 # of Deposits Share Deposits Share Increase Offices 1. 1st Source $5,389 19.43% $2,701 15.68% 99.52% 52 2. Lake City Bank $5,182 18.68% $2,687 15.60% 92.85% 54 3. JPM Chase $3,483 12.56% $1,720 9.99% 102.50% 20 4. PNC $1,589
Slide 62: Lake City Bank
Qiake City Bank LAKECITYBANK.COM