Lakeland Financial Reports Third Quarter Performance; Net Income Grows by 13% to $26.4 Million, as Net Interest Income Expands by 14%
- Lakeland Financial Corporation reported net income of $26.4 million for the third quarter of 2025, a 13% increase from $23.3 million in the same period in 2024.
- Diluted earnings per share for the third quarter of 2025 were $1.03, up 13% from $0.91 in the prior year quarter.
- For the nine months ended September 30, 2025, net income totaled $73.5 million, representing a 6% increase compared to $69.3 million in the prior year period.
- Diluted earnings per share for the first nine months of 2025 were $2.85, an increase of 6% from $2.69 in the comparable 2024 period.
- Net interest margin improved to 3.50% in the third quarter of 2025 from 3.16% in the third quarter of 2024, driven by a reduction in funding costs.
- Net interest income increased by 14% to $56.1 million in the third quarter of 2025 compared to $49.3 million in the prior year quarter.
- Noninterest income rose by 9% to $13.0 million in the third quarter, with growth in loan fees, wealth advisory fees, investment brokerage fees, 47% growth in bank-owned life insurance income, 27% growth in investment brokerage fees, 5% growth in wealth advisory fees, 16% growth in loan fees, 13% growth in noninterest income on a linked quarter basis.
- Noninterest expense increased by 15% to $35.0 million in the third quarter of 2025, primarily due to a 24% increase in salaries 4 benefits driven by performance-based incentive compensation.
- The company's efficiency ratio was 50.7% for the third quarter of 2025 compared to 49.7% in the same period in 2024.
- Average loans grew by 3% to $5.21 billion in the third quarter of 2025 from $5.06 billion in the third quarter of 2024.
- Loan portfolio growth was driven by increases in commercial real estate, multi-family residential, 1-4 family mortgage, commercial 4 industrial, 4 other consumer loans, offset by a contraction in agri-business 4 agricultural loans.
- Total deposits increased by 3% to $6.02 billion as of September 30, 2025, from $5.84 billion in the prior year.
- Core deposits, which exclude brokered deposits, represented 97% of total deposits at September 30, 2025.
- Public funds deposits grew by 6% to $1.83 billion, while commercial deposits contracted by 1% to $2.29 billion.
- Nonaccrual loans declined 68% to $18.7 million in the third quarter of 2025 from $57.6 million in the prior year quarter.
- Watch list loans as a percentage of total loans improved to 3.00% at September 30, 2025, down from 5.27% a year ago.
- Common equity tier 1 capital ratio improved to 15.06% at September 30, 2025, from 14.49% in the prior year quarter.
- Tangible common equity grew by 7% to $743.7 million as of September 30, 2025.
- The board approved a third-quarter cash dividend of $0.50 per share, payable on November 5, 2025, representing a 4% increase from the prior year's dividend.
- The company opened its 55th overall office 4 its 9th office in the Indianapolis market during the third quarter of 2025.
- Provision for credit losses was $2.0 million in the third quarter of 2025, down from $3.1 million in the same period in 2024.
- Pretax pre-provision earnings for the nine months ended September 30, 2025, were $101.0 million, a 6% increase from $95.5 million in the prior year period.
- Core operational profitability for the nine months ended September 30, 2025, improved by 13% to $73.5 million from $65.2 million in the prior year period.
- Total investment securities increased by 1% to $1.16 billion at September 30, 2025.
- The company recorded net charge-offs of $384,000 in the third quarter of 2025, compared to $143,000 in the prior year quarter.
- Return on average equity improved to 14.60% in the third quarter of 2025 from 13.85% in the third quarter of 2024.
- Return on average assets improved to 1.53% in the third quarter of 2025 from 1.39% in the third quarter of 2024.
- Loan origination activity exceeded $400 million during the third quarter of 2025.
- Line of credit usage increased to 43% as of September 30, 2025, from 41% in the prior year quarter.
- Deposits not covered by FDIC insurance were 57% of total deposits as of September 30, 2025, down from 59% in the prior quarter.
- 98% of deposit accounts had balances less than $250,000 as of September 30, 2025.