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%

WARSAW, Ind., Jan. 26, 2026 (GLOBE NEWSWIRE) -- Lakeland Financial Corporation (Nasdaq Global Select/LKFN), parent company of Lake City Bank, today reported record quarterly net income of $29.9 million for the three months ended December 31, 2025, which represents an increase of $5.7 million, or 24%, compared to net income of $24.2 million for the three months ended December 31, 2024. Diluted earnings per share were $1.16 for the fourth quarter of 2025 and increased $0.22, or 23%, compared to $0.94 for the fourth quarter of 2024. On a linked quarter basis, net income increased $3.5 million, or 13%, from $26.4 million. Diluted earnings per share increased $0.13, or 13%, from $1.03 on a linked quarter basis. The company further reported net income of $103.4 million for the year ended December 31, 2025, versus $93.5 million for 2024, an increase of $9.9 million, or 11%. Diluted earnings per share increased $0.38, or 10%, to $4.01 for the year ended December 31, 2025, versus $3.63 for 2024. Pretax pre-provision earnings, a non-GAAP measure, were $137.4 million for the year ended December 31, 2025, an increase of $8.9 million, or 7%, compared to $128.4 million for the year ended December 31, 2024. Core operational profitability, a non-GAAP measure that excludes the impact of certain non-routine operating events that occurred during 2024, improved by $14.0 million, or 16%, from $89.4 million to $103.4 million for the years ended December 31, 2024 and 2025, respectively. Pretax pre-provision earnings were $36.4 million for the three months ended December 31, 2025, an increase of $3.4 million, or 10%, compared to $32.9 million for the three months ended December 31, 2024. Pretax pre-provision earnings increased by $2.3 million, or 7%, compared to $34.1 million on a linked quarter basis. Total revenue was $69.8 million for the fourth quarter of 2025 representing an increase of $6.2 million, or 10%, as compared to the fourth quarter of 2024. On a linked quarter basis, revenue increased by $769,000, or 1%, from $69.0 million in the third quarter of 2025. Total revenue increased by $15.5 million, or 6%, to $269.0 million for the year ended December 31, 2025, as compared to $253.5 million for 2024. “The Lake City Bank team produced a very strong fourth quarter with exceptional performance metrics that has created good momentum as we move into 2026. We are pleased with double-digit growth of net income compared to the prior year, which was driven by healthy net interest margin expansion and broad-based core revenue growth,” commented David M. Findlay, Chairman and CEO. “In 1990, we expanded outside of our home county for the first time. In the 34 years since, our organic growth model has produced compounded annual growth rates of 10% for loans and deposits, 11% for net income and diluted earnings per share and 10% for tangible book value per share. It’s a track record of balance sheet growth and strong income metrics that has delivered healthy shareholder performance over a long period of time and we are laser focused on returning balance sheet growth to our historical levels.” Quarterly Financial Performance Fourth Quarter 2025 versus Fourth Quarter 2024 highlights: Return on average equity improved to 15.59%, compared to 13.87%Return on average assets improved to 1.70%, compared to 1.42%Tangible book value per share grew by $3.40, or 13%, to $29.87Average loans grew by $185.1 million, or 4%, to $5.27 billionNet interest margin improved 23 basis points to 3.48% versus 3.25%Net interest income increased by $5.5 million, or 11%Noninterest income increased by $727,000, or 6%Revenue improved by 10% from $63.6 million to $69.8 millionWatch list loans as a percentage of total loans improved to 3.42% from 4.13%Nonaccrual loans declined 63% to $20.9 million, compared to $56.4 millionCommon equity tier 1 capital ratio improved to 14.77%, compared to 14.64%Total risk-based capital ratio improved to 15.92%, compared to 15.90%Tangible capital ratio improved to 10.86%, compared to 10.19%Tangible common equity improved by $78.6 million, or 12% Fourth Quarter 2025 versus Third Quarter 2025 highlights: Return on average equity of 15.59%, compared to 14.60%Return on average assets of 1.70%, compared to 1.53%Tangible book value per share grew by $0.94, or 3%, to $29.87Average loans improved by $65.9 million, or 1%, to $5.27 billionCore deposits expansion of $74.1 million, or 1%, to $5.92 billionNet interest margin of 3.48% versus 3.50%Net interest income increased by $1.1 million, or 2%Noninterest expense decreased $1.5 million, or 4%Tangible common equity improved by $15.0 million, or 2% Capital Strength The company’s total capital as a percentage of risk-weighted assets was 15.92% at December 31, 2025, compared to 15.90% at December 31, 2024 and 16.21% at September 30, 2025. These capital levels significantly exceeded the 10.00% regulatory threshold required to be characterized as "well capitalized" and reflect the company's robust capital base. The company’s tangible common equity to tangible assets ratio, which is a non-GAAP financial measure, improved to 10.86% at December 31, 2025, compared to 10.19% at December 31, 2024 and 10.79% at September 30, 2025. Unrealized losses from available-for-sale investment securities were $143.3 million at December 31, 2025, compared to $191.1 million at December 31, 2024 and $159.9 million at September 30, 2025. Excluding the impact of accumulated other comprehensive income (loss) on tangible common equity and tangible assets, the company’s ratio of adjusted tangible common equity to adjusted tangible assets, a non-GAAP financial measure, was 12.45% at December 31, 2025, compared to 12.37% at December 31, 2024, and 12.57% at September 30, 2025. As announced on January 13, 2026, the board of directors approved a cash dividend for the fourth quarter of $0.52 per share, payable on February 5, 2026, to shareholders of record as of January 25, 2026. The fourth quarter dividend per share represents a 4% increase from the $0.50 dividend per share paid for the fourth quarter of 2024. Additionally, the company utilized its share repurchase program during the fourth quarter of 2025 and repurchased 307,590 shares of its common stock for $17.9 million at a weighted average price per share of $58.23. For the year ended December 31, 2025, the company repurchased 337,890 shares of its common stock for $19.6 million at a weighted average price per share of $58.03. “We are pleased to report high quality income metrics with return on average equity of 15.6% and return on assets of 1.7% for the fourth quarter, while also continuing to grow capital,” stated Kristin L. Pruitt, President. “Our fortress balance sheet and strong capital position supports our strategy of continued loan growth and the continued growth of our dividend. With the aggressive activation of our share repurchase program during 2025, particularly during the fourth quarter, we further increased the total return of capital to our shareholders.” Net Interest Margin Net interest margin was 3.48% for the fourth quarter of 2025, representing a 23 basis point increase from 3.25% for the fourth quarter of 2024. This improvement was driven by a reduction in the company's funding costs, with interest expense as a percentage of average earning assets falling by 36 basis points from 2.56% for the fourth quarter of 2024 to 2.20% for the fourth quarter of 2025. Offsetting the decrease in funding costs was a decrease to earning asset yields of 13 basis points from 5.81% for the fourth quarter of 2024 to 5.68% for the fourth quarter of 2025. The easing of monetary policy by the Federal Reserve Bank, which continued through the duration of 2025, favorably impacted the net interest margin as deposits repriced more quickly than loans during the fourth quarter. The cumulative loan beta for the current rate-easing cycle that began in September 2024 is 24% compared to the deposit beta of 40% during this period and has resulted in net interest margin expansion that has benefited net interest income. Net interest margin contracted by 2 basis points to 3.48% for the fourth quarter of 2025, compared to 3.50% for the linked third quarter of 2025. Average earning asset yields decreased by 19 basis points from 5.87% to 5.68% on a linked quarter basis and interest expense as a percentage of average earning assets decreased 17 basis points from 2.37% to 2.20%. Fourth quarter cost of funds was impacted by seasonal public funds deposits in higher priced deposit products. Net interest income increased by $24.3 million, or 12%, for the year ended December 31, 2025, as compared to the year ended December 31, 2024. Net interest income was $57.2 million for the fourth quarter of 2025, representing an increase of $5.5 million, or 11%, as compared to the fourth quarter of 2024. On a linked quarter basis, net interest income increased $1.1 million, or 2%, from $56.1 million for the third quarter of 2025. “Net interest margin improved by 23 basis points during the fourth quarter of 2025 as compared to the fourth quarter of 2024 while the Federal Reserve Bank easing monetary cycle continued. Our disciplined deposit cost repricing strategy offset the decline in loan yields. In addition, new loan origination yields improved compared to yields of fixed rate loan runoff,” stated Lisa M. O’Neill, Executive Vice President and Chief Financial Officer. “We experienced the seasonal influx of municipal deposits during the fourth quarter, which offset some of the net interest margin expansion we experienced in the third quarter of 2025. Our neutral interest rate position is expected to provide stability for net interest margin in a higher-for-longer interest rate environment or continued easing by the Federal Reserve Bank in 2026.” Loan Portfolio Average total loans of $5.27 billion in the fourth quarter of 2025 increased $185.1 million, or 4%, from $5.09 billion for the fourth quarter of 2024 and increased $65.9 million, or 1%, from $5.21 billion for the third quarter of 2025. Average total loans for the year ended December 31, 2025 were $5.22 billion, an increase of $184.1 million, or 4%, from $5.04 billion for the year ended December 31, 2024. Total loans, excluding deferred fees and costs, increased by $257.2 million, or 5%, from $5.12 billion as of December 31, 2024, to $5.38 billion as of December 31, 2025. The growth in loans occurred across all primary segments within the portfolio, with increases to commercial and industrial loan portfolio of $102.8 million, or 7%, commercial real estate and multi-family residential loans of $74.0 million, or 3%, consumer 1-4 family mortgage loans of $47.0 million, or 10%, agri-business and agricultural loans of $19.5 million, or 5%, other consumer loans of $12.2 million, or 12%, and other commercial loans of $1.8 million, or 2%. On a linked quarter basis, total loans, excluding deferred fees and costs, increased by $126.8 million, or 2%, from $5.25 billion at September 30, 2025. The linked quarter increase occurred across all primary segments within the portfolio, with growth in agri-business and agricultural loans of $66.9 million, or 20%, total commercial and industrial loans of $35.7 million, or 2%, commercial real estate and multi-family residential loans of $11.3 million, or less than 1%, other commercial loans of $5.5 million, or 6%, other consumer loans of $3.8 million, or 3%, and consumer 1-4 family mortgage loans of $3.7 million, or 1%. “We continued to generate a high volume of gross commercial loan originations during the fourth quarter of $567 million. For the full year of 2025, our team produced gross originations of $1.7 billion,” noted Findlay. “Loan growth during 2025 was positively impacted by commercial and industrial loan growth of 7%, or $103 million, which contributed to our organic loan growth increase. Importantly, we experienced healthy commercial and industrial growth from our more mature markets and commercial loans overall grew by 10% on a linked quarter, annualized basis. We’re also encouraged that commercial line utilization increased to 44% at December 31, 2025. As we enter 2026, we continue to be focused on increased market share take strategies with our expanding universe of prospects in the commercial banking business.” As noted earlier, total outstanding commercial loans for the fourth quarter included approximately $567.0 million in loan originations, offset by approximately $447.0 million in loan pay downs. Line of credit usage increased to 44% as of December 31, 2025, from 41% at December 31, 2024, and increased from 43% at September 30, 2025. Total available lines of credit expanded by $241.0 million, or 5%, as compared to a year ago, and line usage increased by $257.0 million, or 14%, over that period. Diversified Deposit Base The bank's diversified deposit base has grown on a year-over-year basis and core deposits, which exclude brokered deposits, represented 99% of total deposits. (in thousands)December 31, 2025 September 30, 2025 December 31, 2024Retail$1,763,452 29.5% $1,724,983 28.6% $1,780,726 30.2%Commercial 2,179,999 36.5 2,288,701 38.0 2,269,049 38.4 Public funds 1,979,327 33.2 1,834,987 30.5 1,809,631 30.7 Core deposits 5,922,778 99.2 5,848,671 97.1 5,859,406 99.3 Brokered deposits 50,572 0.8 175,647 2.9 41,560 0.7 Total$5,973,350 100.0% $6,024,318 100.0% $5,900,966 100.0%  Total deposits increased $72.4 million, or 1%, from $5.90 billion as of December 31, 2024, to $5.97 billion as of December 31, 2025. The increase in total deposits was primarily driven by an increase in core deposits of $63.4 million, or 1%. Public funds deposits grew annually by $169.7 million, or 9%, to $1.98 billion. Public funds deposits as a percentage of total deposits were 33%, up from 31% a year ago. Growth in public funds was positively impacted by the addition of new public funds customers in the Lake City Bank footprint, including their operating accounts. Commercial deposits contracted annually by $89.1 million, or 4%, to $2.18 billion. Retail deposits contracted by $17.3 million, or 1%, to $1.76 billion. On a linked quarter basis, total deposits decreased $51.0 million, or 1%, from $6.02 billion at September 30, 2025, to $5.97 billion at December 31, 2025. Core deposits increased by $74.1 million, or 1%, while brokered deposits decreased by $125.1 million, or 71%. The linked quarter growth in core deposits was driven primarily by a seasonal growth in public funds of $144.3 million, or 8%. Additionally, retail deposits increased by $38.5 million, or 2%. Average total deposits were $6.16 billion for the fourth quarter of 2025, an increase of $144.4 million, or 2%, from $6.01 billion for the fourth quarter of 2024. Average interest-bearing deposits drove the increase in average total deposits and increased by $154.3 million, or 3%. Contributing to the overall growth of interest-bearing deposits was an increase to average interest-bearing checking accounts of $344.7 million, or 10%. Offsetting this increase was a reduction in average time deposits of $196.1 million, or 21%. Average noninterest-bearing demand deposits decreased by $9.9 million, or 1%, to $1.27 billion. On a linked quarter basis, average total deposits increased by $126.0 million, or 2%, from $6.03 billion for the third quarter of 2025 to $6.16 billion for the fourth quarter of 2025. Average interest-bearing deposits drove the increase to total average deposits, which improved by $98.3 million, or 2%. An increase to interest-bearing checking accounts drove the increase to interest bearing deposits, increasing by $118.5 million, or 3%. Offsetting this increase was a decrease in total average time deposits of $16.2 million, or 2%. Average noninterest bearing demand deposits increased by $27.6 million, or 2%. Checking account growth as of December 31, 2025, compared to December 31, 2024, includes growth of $256.6 million, or 16%, in aggregate public fund checking account balances and growth of $3.3 million, or less than 1%, in aggregate retail checking account balances. Aggregate commercial checking account balances declined by $102.8 million, or 5%. The number of accounts has also grown for all three segments, with growth of 3% for public funds accounts, 2% for commercial accounts and 1% for retail accounts during 2025. “Deposit growth, together with other sources of on balance sheet liquidity, funded our loan growth during the year. Public fund deposits increased by 9% during 2025 due to continued growth of public fund core operating accounts. In addition, the number of commercial checking accounts increased during 2025,” commented O’Neill. “We continue to add functionality to the Lake City Bank digital app to increase usability by our customers. We are encouraged by the continued growth in digital adoption which improved to 53% in 2025 compared to 51% a year ago.” Asset Quality Provision expense was $11.8 million for the year ended December 31, 2025, a decrease of $5.0 million, or 30%, as compared to $16.8 million during 2024. Provision expense in 2025 was partially driven by the recognition of additional specific allocations related to the downgrade of a previously disclosed commercial relationship. A partial charge off of $28.6 million was recognized during the second quarter of 2025 in conjunction with the disposition of the credit together with a recovery of $800,000 during the fourth quarter of 2025 for the aforementioned credit. The remainder of provision expense was attributable to growth of the loan portfolio and a net increase in specific allocations to other watch list credits. The company recorded no provision expense in the fourth quarter of 2025, compared to provision expense of $3.7 million in the fourth quarter of 2024 and $2.0 million for the linked third quarter of 2025. The allowance for credit loss reserve to total loans was 1.28% at December 31, 2025, down from 1.68% at December 31, 2024 and 1.30% at September 30, 2025. The decrease in allowance coverage compared to the prior year was primarily driven by the previously disclosed partial charge off that was primarily reserved for in 2024. The company recorded net recoveries of $827,000 in the fourth quarter of 2025, compared to net charge offs of $1.4 million in the fourth quarter of 2024 and $384,000 during the linked third quarter of 2025. Annualized net recoveries to average loans were 0.06% for the fourth quarter of 2025, compared to annualized net charge offs to average loans of 0.11% for the fourth quarter of 2024 and 0.03% for the linked third quarter of 2025. Nonperforming assets decreased by $36.0 million, or 63%, to $20.9 million as of December 31, 2025, versus $56.9 million as of December 31, 2024. On a linked quarter basis, nonperforming assets increased $1.9 million, or 10%, compared to $19.1 million as of September 30, 2025. The ratio of nonperforming assets to total assets at December 31, 2025 decreased to 0.30% from 0.85% at December 31, 2024, and was up from 0.28% at September 30, 2025. Total individually analyzed and watch list loans decreased by $27.1 million, or 13%, to $184.0 million as of December 31, 2025, versus $211.1 million as of December 31, 2024. On a linked quarter basis, total individually analyzed and watch list loans increased by $26.8 million, or 17%, from $157.2 million at September 30, 2025. The linked quarter increase in total individually analyzed and watch list loans was driven by net downgrades to the watch list that were primarily concentrated with two unrelated commercial borrowers. Watch list loans as a percentage of total loans were 3.42% at December 31, 2025, a 71 basis point decrease compared to 4.13% at December 31, 2024, and a 42 basis point increase compared to 3.00% at September 30, 2025. “Asset quality is stable and we are pleased to have ended 2025 with improved asset quality metrics as compared to 2024,” commented Findlay. “Our overall asset quality metrics are near historical lows, which is excellent, and we are encouraged by the results of our year-end loan portfolio reviews during which we met with every commercial banker and reviewed their respective portfolios. Our borrowers continue to effectively manage through this period of heightened uncertainty impacted by the evolving state of tariffs and the challenges that accompanies them.” Investment Portfolio Overview Total investment securities were $1.19 billion at December 31, 2025, reflecting an increase of $62.3 million, or 6%, as compared to $1.12 billion at December 31, 2024. Investment securities represented 17% of total assets on December 31, 2025, unchanged from 17% at December 31, 2024 and September 30, 2025. The company anticipates receiving principal and interest cash flows of approximately $134.5 million during 2026 from the investment securities portfolio and plans to use that liquidity to fund loan growth as well as reinvestments to the investment securities portfolio. Tax equivalent adjusted effective duration for the investment portfolio was 5.9 years at December 31, 2025, compared to 6.0 years at December 31, 2024 and 5.8 years at September 30, 2025. Noninterest Income Noninterest income decreased by $8.9 million, or 16%, to $48.0 million for the year ended December 31, 2025, compared to $56.8 million for the prior year. Noninterest income was elevated during the prior year primarily due to the net gain of $9.0 million on the sale of Visa shares and a $1.0 million insurance recovery. Adjusted core noninterest income, a non-GAAP financial measure that excludes the impact of these events, increased by $1.1 million, or 2%, from $46.8 million for the year ended December 31, 2024. Noninterest income for the year ended December 31, 2025, benefited from fee-based service increases to wealth advisory fees of $896,000, or 9%, loan and service fees of $462,000, or 4%, service charges on deposit accounts of $317,000, or 3%, and investment brokerage fees of $304,000, or 16%, as compared to the prior year. Wealth advisory fees growth was driven by continued client relationship expansion and increased assets under management. Commercial service fee growth was the primary contributor for the increase in loan and service fees. The expansion of investment brokerage fees was driven by increased volume and commissions on product mix. Offsetting these increases was a decrease in other income of $1.9 million, or 41%. The decline in other income was primarily attributable to reduced limited partnership income and the insurance recovery of $1.0 million in 2024. Findlay noted, “Fee-based revenue was strong during 2025, in particular, wealth advisory fees and investment brokerage fees improved by double digit growth. The combined impact of growth in net interest income and core noninterest income during 2025 generated 6% revenue growth year-over-year.” The company’s noninterest income increased $727,000, or 6%, to $12.6 million for the fourth quarter of 2025, compared to $11.9 million for the fourth quarter of 2024. Wealth advisory fees increased $277,000, or 10%, and investment brokerage fees increased $183,000, or 40%. Service fees on deposit accounts expanded $127,000, 4%. Bank owned life insurance increased $111,000, or 9%. On a linked quarter basis, noninterest income for the fourth quarter of 2025 decreased by $351,000, or 3%, from $13.0 million during the third quarter of 2025. The linked quarter decrease was driven by a decrease to loan and service fees of $434,000, or 13%, and bank owned life insurance income of $240,000, or 15%. Loan and service fee income was elevated in the linked third quarter of 2025 due to the recognition of a loan syndication fee. Bank owned life insurance income decreased primarily from reduced performance for the company's variable bank owned life insurance policies, which trend directionally with the performance of the broader equity markets. Offsetting these declines were increases to wealth advisory fees of $121,000, or 4%, mortgage banking income of $73,000, and interest rate swap fee income of $63,000. Noninterest Expense Noninterest expense increased by $6.5 million, or 5%, from $125.1 million to $131.6 million for the year ended December 31, 2024 and 2025, respectively. Salaries and benefits expense increased $8.6 million, or 13%. The primary drivers for the increase to salaries and benefits expense were increased performance-based incentive compensation accruals of $5.3 million and salaries and wages of $3.3 million. Data processing fees and supplies expense increased $1.4 million, or 9%, from continued investment in customer-facing and operational technology solutions, including artificial intelligence. Net occupancy expense increased $659,000, or 10%, from the continued expansion of the bank's branch and operational networks, with the 55th branch location opening in Westfield, Indiana during 2025. Offsetting these increases was a decrease in professional fees of $1.3 million, or 14%, and other expense of $3.1 million, or 24%. Legal accruals of $4.5 million were incurred in 2024 that were related to a one-time matter, previously disclosed. Adjusted core noninterest expense, a non-GAAP financial measure, increased $11.1 million, or 9%, to $131.6 million from $120.5 million for the year ended December 31, 2025 and 2024, respectively. Noninterest expense increased $2.8 million, or 9%, to $33.4 million for the fourth quarter of 2025, compared to $30.7 million during the fourth quarter of 2024. Salaries and benefits expense increased by $2.6 million, or 15%, primarily the result of increased accruals related to performance-based incentive compensation plans as strong year-to-date performance impacting these accruals. Data processing fees and supplies expense increased $259,000, or 7%. Net occupancy expense increased $214,000, or 13%. Corporate and business development expense increased $198,000, or 21%. Offsetting these increases was a decrease to professional fees of $389,000, or 17%. On a linked quarter basis, noninterest expense decreased by $1.5 million, or 4%, from $35.0 million during the third quarter of 2025. The primary driver behind the linked quarter decrease to noninterest expense was a decrease to other expense of $573,000, or 20%. This decrease was due to the timing of semi-annual stock-based compensation awards to directors, that were paid in July. Salaries and employee benefits expense decreased $533,000, or 3%. Corporate and business development expenses decreased $415,000, or 27%. The company's efficiency ratio for the year ended December 31, 2025, was 48.9%, compared to 49.3% for the year ended December 31, 2024. The company's adjusted core efficiency ratio, a non-GAAP financial measure, was 48.9% for the year ended December 31, 2025, as compared to 49.5% for the year ended December 31, 2024. The company’s efficiency ratio was 47.9% for the fourth quarter of 2025, compared to 48.2% for the fourth quarter of 2024 and 50.7% for the linked third quarter of 2025. “The growth in noninterest expense during 2025 reflects the addition of revenue producing team members in commercial banking, wealth advisory and private banking teams that support our organic loan and deposit growth strategies. We also continued to invest in our branch footprint with a focus on adding branches in the Indianapolis market,” stated Findlay. “Our low efficiency ratio highlights our disciplined growth strategy and the impact of revenue outpacing expense growth. We have plans for accelerated branch development in Indianapolis as well as South Bend, Fort Wayne and Elkhart over the next several years as we continue to grow market share in our Indiana footprint.” Information regarding Lakeland Financial Corporation may be accessed on the home page of its subsidiary, Lake City Bank, at lakecitybank.com. The company’s common stock is traded on the Nasdaq Global Select Market under "LKFN." Lake City Bank, a $7.0 billion bank headquartered in Warsaw, Indiana, was founded in 1872 and serves Central and Northern Indiana communities with 55 branch offices and a robust digital banking platform. Lake City Bank's community banking model prioritizes building in-market long-term customer relationships while delivering technology-forward solutions for retail and commercial clients. This document 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 with respect to the financial condition, results of operations, plans, objectives, performance and business of the company. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of the company’s management and on information currently available to management, are generally identifiable by the use of words such as "believe," "expect," "anticipate," "continue," "plan," "intend," "estimate," "may," "will," "would," "could," "should" or other similar expressions. The company’s ability to predict results or the actual effect of the company’s operating environment or its plans or strategies is inherently uncertain and, accordingly, the reader is cautioned not to place undue reliance on any forward-looking statements made by the company. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and the company undertakes no obligation to update any statement in light of new information or future events. Numerous factors could cause the company’s actual results to differ from those reflected in forward-looking statements, including the effects of economic, business and market conditions and changes, particularly in our Indiana market area, including prevailing interest rates and the rate of inflation; governmental trade, monetary and fiscal policies; including any effects resulting from international government conflicts; the risks of changes in interest rates on the levels, composition and costs of deposits, loan demand and the values and liquidity of loan collateral, securities and other interest sensitive assets and liabilities; and changes in borrowers’ credit risks and payment behaviors, as well as those identified in the company’s filings with the Securities and Exchange Commission, including the company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. LAKELAND FINANCIAL CORPORATION FOURTH QUARTER 2025 FINANCIAL HIGHLIGHTS Three Months Ended Twelve Months Ended(Unaudited – Dollars in thousands, except per share data)December 31, September 30, December 31, December 31, December 31,END OF PERIOD BALANCES 2025 2025 2024 2025 2024 Assets$6,990,022 $6,895,028 $6,678,374 $6,990,022 $6,678,374 Investments 1,185,270 1,164,737 1,122,994 1,185,270 1,122,994 Loans 5,375,349 5,248,619 5,117,948 5,375,349 5,117,948 Allowance for Credit Losses 68,995 68,168 85,960 68,995 85,960 Deposits 5,973,350 6,024,318 5,900,966 5,973,350 5,900,966 Brokered Deposits 50,572 175,647 41,560 50,572 41,560 Core Deposits (1) 5,922,778 5,848,671 5,859,406 5,922,778 5,859,406 Total Equity 762,492 747,503 683,911 762,492 683,911 Goodwill Net of Deferred Tax Assets 3,803 3,803 3,803 3,803 3,803 Tangible Common Equity (2) 758,689 743,700 680,108 758,689 680,108 Adjusted Tangible Common Equity (2) 885,298 883,865 846,040 885,298 846,040 AVERAGE BALANCES Total Assets$6,993,954 $6,850,671 $6,795,596 $6,878,627 $6,662,718 Earning Assets 6,641,584 6,492,640 6,470,920 6,534,373 6,328,498 Investments 1,175,389 1,127,094 1,134,011 1,141,189 1,134,979 Loans 5,271,687 5,205,833 5,086,614 5,223,458 5,039,406 Total Deposits 6,155,526 6,029,557 6,011,122 6,039,821 5,836,025 Interest Bearing Deposits 4,883,496 4,785,176 4,729,201 4,785,109 4,578,219 Interest Bearing Liabilities 4,893,050 4,818,115 4,729,206 4,829,098 4,644,553 Total Equity 760,954 717,428 693,744 718,029 662,087 INCOME STATEMENT DATA Net Interest Income$57,193 $56,073 $51,694 $221,017 $196,679 Net Interest Income-Fully Tax Equivalent 58,307 57,180 52,804 225,458 201,363 Provision for Credit Losses 0 2,000 3,691 11,800 16,750 Noninterest Income 12,603 12,954 11,876 47,971 56,844 Noninterest Expense 33,445 34,965 30,653 131,605 125,084 Net Income 29,906 26,404 24,190 103,361 93,478 Pretax Pre-Provision Earnings (2) 36,351 34,062 32,917 137,383 128,439 PER SHARE DATA Basic Net Income Per Common Share$1.16 $1.03 $0.94 $4.02 $3.64 Diluted Net Income Per Common Share 1.16 1.03 0.94 4.01 3.63 Cash Dividends Declared Per Common Share 0.50 0.50 0.48 2.00 1.92 Dividend Payout 43.10% 48.54% 51.06% 49.88% 52.89%Book Value Per Common Share (equity per share issued)$30.02 $29.08 $26.62 $30.02 $26.62 Three Months Ended Twelve Months Ended(Unaudited – Dollars in thousands, except per share data)December 31, September 30, December 31, December 31, December 31,PER SHARE DATA (continued) 2025 2025 2024 2025 2024 Tangible Book Value Per Common Share (2) 29.87 28.93 26.47 29.87 26.47 Market Value – High$65.43 $69.40 $78.61 $71.77 $78.61 Market Value – Low 56.04 59.08 61.10 50.00 57.45 Basic Weighted Average Common Shares Outstanding 25,623,703 25,703,699 25,686,276 25,687,159 25,676,543 Diluted Weighted Average Common Shares Outstanding 25,770,280 25,821,360 25,792,460 25,799,047 25,769,018 KEY RATIOS Return on Average Assets 1.70% 1.53% 1.42% 1.50% 1.40%Return on Average Total Equity 15.59 14.60 13.87 14.40 14.12 Average Equity to Average Assets 10.88 10.47 10.21 10.44 9.94 Net Interest Margin 3.48 3.50 3.25 3.45 3.18 Efficiency (Noninterest Expense/Net Interest Income plus Noninterest Income) 47.92 50.65 48.22 48.93 49.34 Loans to Deposits 89.99 87.12 86.73 89.99 86.73 Investment Securities to Total Assets 16.96 16.89 16.82 16.96 16.82 Tier 1 Leverage (3) 12.39 12.56 12.15 12.39 12.15 Tier 1 Risk-Based Capital (3) 14.77 15.05 14.64 14.77 14.64 Common Equity Tier 1 (CET1) (3) 14.77 15.05 14.64 14.77 14.64 Total Capital (3) 15.92 16.21 15.90 15.92 15.90 Tangible Capital (2) 10.86 10.79 10.19 10.86 10.19 Adjusted Tangible Capital (2) 12.45 12.57 12.37 12.45 12.37 ASSET QUALITY Loans Past Due 30 - 89 Days$2,320 $984 $4,273 $2,320 $4,273 Loans Past Due 90 Days or More 7 7 28 7 28 Nonaccrual Loans 20,872 18,701 56,431 20,872 56,431 Nonperforming Loans 20,879 18,708 56,459 20,879 56,459 Other Real Estate Owned 0 284 284 0 284 Other Nonperforming Assets 47 82 143 47 143 Total Nonperforming Assets 20,926 19,074 56,886 20,926 56,886 Individually Analyzed Loans 43,024 39,497 78,647 43,024 78,647 Non-Individually Analyzed Watch List Loans 140,997 117,746 132,499 140,997 132,499 Total Individually Analyzed and Watch List Loans 184,021 157,243 211,146 184,021 211,146 Gross Charge Offs 221 573 1,657 30,414 3,468 Recoveries 1,048 189 299 1,649 706 Net Charge Offs/(Recoveries) (827) 384 1,358 28,765 2,762 Three Months Ended Twelve Months Ended(Unaudited – Dollars in thousands, except per share data)December 31, September 30, December 31, December 31, December 31,OTHER DATA 2025 2025 2024 2025 2024 Net Charge Offs/(Recoveries) to Average Loans(0.06)% 0.03% 0.11% 0.55% 0.05%Credit Loss Reserve to Loans 1.28 1.30 1.68 1.28 1.68 Credit Loss Reserve to Nonperforming Loans 330.45 364.38 152.25 330.45 152.25 Nonperforming Loans to Loans 0.39 0.36 1.10 0.39 1.10 Nonperforming Assets to Assets 0.30 0.28 0.85 0.30 0.85 Total Individually Analyzed and Watch List Loans to Total Loans 3.42 3.00 4.13 3.42 4.13 Full Time Equivalent Employees 669 666 643 669 643 Offices 55 55 54 55 54 ______________________________ (1) Core deposits equals deposits less brokered deposits. (2) Non-GAAP financial measure - see "Reconciliation of Non-GAAP Financial Measures". (3) Capital ratios for December 31, 2025 are preliminary until the Call Report is filed. CONSOLIDATED BALANCE SHEETS (dollars in thousands, except share data) ​December 31, 2025 December 31, 2024​(Unaudited) ​ASSETS Cash and due from banks$57,139 $71,733 Short-term investments 84,179 96,472 Total cash and cash equivalents 141,318 168,205 ​ Securities available-for-sale, at fair value 1,052,062 991,426 Securities held-to-maturity, at amortized cost (fair value of $117,510 and $113,107, respectively) 133,208 131,568 Real estate mortgage loans held-for-sale 2,707 1,700 Loans, net of allowance for credit losses of $68,995 and $85,960 5,306,354 5,031,988 Land, premises and equipment, net 65,542 60,489 Bank owned life insurance 129,978 113,320 Federal Reserve and Federal Home Loan Bank stock 21,420 21,420 Accrued interest receivable 28,997 28,446 Goodwill 4,970 4,970 Other assets 103,466 124,842 Total assets$6,990,022 $6,678,374 ​ ​ LIABILITIES Noninterest bearing deposits$1,221,327 $1,297,456 Interest bearing deposits 4,752,023 4,603,510 Total deposits 5,973,350 5,900,966 ​ Borrowings - Federal Home Loan Bank advances: Short-term advance 170,000 0 Long-term advance 1,200 0 Other borrowings 13,000 0 Total borrowings 184,200 0 ​ Accrued interest payable 8,868 15,117 Other liabilities 61,112 78,380 Total liabilities 6,227,530 5,994,463 ​ STOCKHOLDERS’ EQUITY Common stock: 90,000,000 shares authorized, no par value 26,023,644 shares issued and 25,219,634 outstanding as of December 31, 2025 25,978,831 shares issued and 25,509,592 outstanding as of December 31, 2024 136,965 129,664 Retained earnings 788,345 736,412 Accumulated other comprehensive income (loss) (127,137) (166,500)Treasury stock at cost (804,010 shares as of December 31, 2025, 469,239 shares as of December 31, 2024) (35,770) (15,754)Total stockholders’ equity 762,403 683,822 Noncontrolling interest 89 89 Total equity 762,492 683,911 Total liabilities and equity$6,990,022 $6,678,374 CONSOLIDATED STATEMENTS OF INCOME (unaudited - in thousands, except share and per share data) ​Three Months Ended December 31, Twelve Months Ended December 31,​ 2025 2024 2025 2024 NET INTEREST INCOME Interest and fees on loans Taxable$84,208 $83,253 $335,856 $335,639 Tax exempt 316 296 1,186 2,126 Interest and dividends on securities Taxable 3,720 2,997 14,055 12,048 Tax exempt 3,908 3,914 15,650 15,714 Other interest income 1,856 2,910 6,988 7,631 Total interest income 94,008 93,370 373,735 373,158 ​​ ​ ​ ​Interest on deposits 36,717 41,676 150,732 172,759 Interest on short-term borrowings 98 0 1,986 3,720 Total interest expense 36,815 41,676 152,718 176,479 ​​ ​ ​ ​NET INTEREST INCOME 57,193 51,694 221,017 196,679 ​​ ​ ​ ​Provision for credit losses 0 3,691 11,800 16,750 ​​ ​ ​ ​NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 57,193 48,003 209,217 179,929 ​​ ​ ​ ​NONINTEREST INCOME Wealth advisory fees 2,976 2,699 11,365 10,469 Investment brokerage fees 639 456 2,198 1,894 Service charges on deposit accounts 2,952 2,825 11,474 11,157 Loan and service fees 2,985 2,977 12,294 11,832 Merchant and interchange fee income 848 889 3,416 3,542 Bank owned life insurance income 1,327 1,216 4,256 4,210 Interest rate swap fee income 63 0 83 0 Mortgage banking income 67 48 134 116 Net securities gains (losses) 0 0 0 (46)Net gain on Visa shares 0 0 0 8,996 Other income 746 766 2,751 4,674 Total noninterest income 12,603 11,876 47,971 56,844 ​​ ​ ​ ​NONINTEREST EXPENSE Salaries and employee benefits 19,881 17,261 75,293 66,728 Net occupancy expense 1,920 1,706 7,524 6,865 Equipment costs 1,422 1,405 5,716 5,612 Data processing fees and supplies 4,001 3,742 16,534 15,161 Corporate and business development 1,148 950 5,277 4,965 FDIC insurance and other regulatory fees 844 894 3,361 3,465 Professional fees 1,886 2,275 7,698 8,950 Other expense 2,343 2,420 10,202 13,338 Total noninterest expense 33,445 30,653 131,605 125,084 ​​ ​ ​ ​INCOME BEFORE INCOME TAX EXPENSE 36,351 29,226 125,583 111,689 Income tax expense 6,445 5,036 22,222 18,211 NET INCOME$29,906 $24,190 $103,361 $93,478 ​​ ​ ​ ​BASIC WEIGHTED AVERAGE COMMON SHARES 25,623,703 25,686,276 25,687,159 25,676,543 ​​ ​ ​ ​BASIC EARNINGS PER COMMON SHARE$1.16 $0.94 $4.02 $3.64 ​ DILUTED WEIGHTED AVERAGE COMMON SHARES 25,770,280 25,792,460 25,799,047 25,769,018 ​ DILUTED EARNINGS PER COMMON SHARE$1.16 $0.94 $4.01 $3.63 LAKELAND FINANCIAL CORPORATION LOAN DETAIL (unaudited, in thousands) December 31, 2025 September 30, 2025 December 31, 2024Commercial and industrial loans: ​ ​ ​ ​Working capital lines of credit loans $711,742 13.2% $709,645 13.5% $649,609 12.7%Non-working capital loans 841,947 15.7 808,371 15.4 801,256 15.6 Total commercial and industrial loans 1,553,689 28.9 1,518,016 28.9 1,450,865 28.3 ​ ​ ​ ​ Commercial real estate and multi-family residential loans: Construction and land development loans 497,239 9.2 574,896 10.9 567,781 11.1 Owner occupied loans 807,335 15.0 804,253 15.3 807,090 15.8 Nonowner occupied loans 923,708 17.2 863,085 16.5 872,671 17.0 Multifamily loans 438,233 8.1 413,016 7.9 344,978 6.7 Total commercial real estate and multi-family residential loans 2,666,515 49.5 2,655,250 50.6 2,592,520 50.6 ​ ​ ​ ​ Agri-business and agricultural loans: Loans secured by farmland 155,073 2.9 153,904 2.9 156,609 3.1 Loans for agricultural production 251,783 4.7 186,068 3.6 230,787 4.5 Total agri-business and agricultural loans 406,856 7.6 339,972 6.5 387,396 7.6 ​ ​ ​ ​ Other commercial loans 97,381 1.8 91,833 1.7 95,584 1.9 Total commercial loans 4,724,441 87.8 4,605,071 87.7 4,526,365 88.4 ​ ​ ​ ​ Consumer 1-4 family mortgage loans: Closed end first mortgage loans 267,134 5.0 273,580 5.2 259,286 5.1 Open end and junior lien loans 251,185 4.7 241,256 4.6 214,125 4.2 Residential construction and land development loans 18,873 0.3 18,706 0.4 16,818 0.3 Total consumer 1-4 family mortgage loans 537,192 10.0 533,542 10.2 490,229 9.6 ​ ​ ​ ​ Other consumer loans 116,224 2.2 112,430 2.1 104,041 2.0 Total consumer loans 653,416 12.2 645,972 12.3 594,270 11.6 Subtotal 5,377,857 100.0% 5,251,043 100.0% 5,120,635 100.0%Less: Allowance for credit losses (68,995) ​ (68,168) ​ (85,960) ​Net deferred loan fees (2,508) ​ (2,424) ​ (2,687) ​Loans, net $5,306,354 $5,180,451 ​ $5,031,988 ​ LAKELAND FINANCIAL CORPORATION DEPOSITS AND BORROWINGS (unaudited, in thousands) December 31, 2025 September 30, 2025 December 31, 2024Noninterest bearing demand deposits$1,221,327 $1,268,241 $1,297,456Savings and transaction accounts: Savings deposits 285,834 281,291 276,179Interest bearing demand deposits 3,715,463 3,689,037 3,471,455Time deposits: Deposits of $100,000 or more 549,381 580,499 642,777Other time deposits 201,345 205,250 213,099Total deposits$5,973,350 $6,024,318 $5,900,966FHLB advances and other borrowings 184,200 56,200 0Total funding sources$6,157,550 $6,080,518 $5,900,966 LAKELAND FINANCIAL CORPORATION AVERAGE BALANCE SHEET AND NET INTEREST ANALYSIS (UNAUDITED) Three Months Ended December 31, 2025 Three Months Ended September 30, 2025 Three Months Ended December 31, 2024(fully tax equivalent basis, dollars in thousands) Average Balance Interest Income Yield (1)/ Rate Average Balance Interest Income Yield (1)/ Rate Average Balance Interest Income Yield (1)/ RateEarning Assets Loans: Taxable (2)(3) $5,245,483 $84,208 6.37% $5,180,847 $85,490 6.55% $5,060,397 $83,253 6.54%Tax exempt (1) 26,204 392 5.93 24,986 354 5.62 26,217 364 5.52 Investments: (1) Securities 1,175,389 8,666 2.93 1,127,094 8,444 2.97 1,134,011 7,953 2.79 Short-term investments 2,752 24 3.46 2,795 27 3.83 2,765 29 4.17 Interest bearing deposits 191,756 1,832 3.79 156,918 1,679 4.25 247,530 2,881 4.63 Total earning assets $6,641,584 $95,122 5.68% $6,492,640 $95,994 5.87% $6,470,920 $94,480 5.81%Less: Allowance for credit losses (68,391) (67,115) (84,687) Nonearning Assets Cash and due from banks 68,620 62,671 67,994 Premises and equipment 64,928 64,391 60,325 Other nonearning assets 287,213 298,084 281,044 Total assets $6,993,954 $6,850,671 $6,795,596 Interest Bearing Liabilities Savings deposits $280,620 $40 0.06% $284,553 $41 0.06% $274,960 $43 0.06%Interest bearing checking accounts 3,850,205 29,906 3.08 3,731,706 31,382 3.34 3,505,470 31,562 3.58 Time deposits: In denominations under $100,000 203,083 1,635 3.19 204,997 1,678 3.25 214,429 1,921 3.56 In denominations over $100,000 549,588 5,136 3.71 563,920 5,345 3.76 734,342 8,150 4.42 Short-term borrowings 8,354 98 4.65 31,739 368 4.60 5 0 5.30 Long-term borrowings 1,200 0 0.00 1,200 0 0.00 0 0 0.00 Total interest bearing liabilities $4,893,050 $36,815 2.99% $4,818,115 $38,814 3.20% $4,729,206 $41,676 3.51%Noninterest Bearing Liabilities Demand deposits 1,272,030 1,244,381 1,281,921 Other liabilities 67,920 70,747 90,725 Stockholders' Equity 760,954 717,428 693,744 Total liabilities and stockholders' equity $6,993,954 $6,850,671 $6,795,596 Interest Margin Recap Interest income/average earning assets 95,122 5.68% 95,994 5.87% 94,480 5.81%Interest expense/average earning assets 36,815 2.20 38,814 2.37 41,676 2.56 Net interest income and margin $58,307 3.48% $57,180 3.50% $52,804 3.25%  (1) Tax exempt income was converted to a fully taxable equivalent basis at a 21 percent tax rate. The tax equivalent rate for tax exempt loans and tax-exempt securities acquired after January 1, 1983, included the Tax Equity and Fiscal Responsibility Act of 1982 ("TEFRA") adjustment applicable to nondeductible interest expenses. Taxable equivalent basis adjustments were $1.11 million, in the three-month periods ended December 31, 2025, September 30, 2025, and December 31, 2024. (2) Loan fees, which are immaterial in relation to total taxable loan interest income for the three-month periods ended December 31, 2025, September 30, 2025, and December 31, 2024, are included as taxable loan interest income. (3) Nonaccrual loans are included in the average balance of taxable loans. Reconciliation of Non-GAAP Financial Measures Tangible common equity, adjusted tangible common equity, tangible assets, adjusted tangible assets, tangible book value per common share, tangible common equity to tangible assets, adjusted tangible common equity to adjusted tangible assets, and pretax pre-provision earnings are non-GAAP financial measures calculated based on GAAP amounts. Tangible common equity is calculated by excluding the balance of goodwill and other intangible assets from the calculation of equity, net of deferred tax. Tangible assets are calculated by excluding the balance of goodwill and other intangible assets from the calculation of total assets, net of deferred tax. Adjusted tangible assets and adjusted tangible common equity remove the fair market value adjustment impact of the available-for-sale investment securities portfolio in accumulated other comprehensive income (loss) ("AOCI"). Tangible book value per common share is calculated by dividing tangible common equity by the number of shares outstanding less true treasury stock. Pretax pre-provision earnings is calculated by adding net interest income to noninterest income and subtracting noninterest expense. Because not all companies use the same calculation of tangible common equity and tangible assets, this presentation may not be comparable to other similarly titled measures calculated by other companies. However, management considers these measures of the company’s value meaningful to understanding of the company’s financial information and performance. A reconciliation of these non-GAAP financial measures is provided below (dollars in thousands, except per share data). Three Months Ended Twelve Months Ended December 31, 2025 September 30, 2025 December 31, 2024 December 31, 2025 December 31, 2024Total Equity$762,492 $747,503 $683,911 $762,492 $683,911 Less: Goodwill (4,970) (4,970) (4,970) (4,970) (4,970)Plus: DTA Related to Goodwill 1,167 1,167 1,167 1,167 1,167 Tangible Common Equity 758,689 743,700 680,108 758,689 680,108 Market Value Adjustment in AOCI 126,609 140,165 165,932 126,609 165,932 Adjusted Tangible Common Equity 885,298 883,865 846,040 885,298 846,040 Assets$6,990,022 $6,895,028 $6,678,374 $6,990,022 $6,678,374 Less: Goodwill (4,970) (4,970) (4,970) (4,970) (4,970)Plus: DTA Related to Goodwill 1,167 1,167 1,167 1,167 1,167 Tangible Assets 6,986,219 6,891,225 6,674,571 6,986,219 6,674,571 Market Value Adjustment in AOCI 126,609 140,165 165,932 126,609 165,932 Adjusted Tangible Assets 7,112,828 7,031,390 6,840,503 7,112,828 6,840,503 Ending Common Shares Issued 25,396,653 25,704,243 25,689,730 25,396,653 25,689,730 Tangible Book Value Per Common Share$29.87 $28.93 $26.47 $29.87 $26.47 Tangible Common Equity/Tangible Assets 10.86% 10.79% 10.19% 10.86% 10.19%Adjusted Tangible Common Equity/Adjusted Tangible Assets 12.45% 12.57% 12.37% 12.45% 12.37% Net Interest Income$57,193 $56,073 $51,694 $221,017 $196,679 Plus: Noninterest Income 12,603 12,954 11,876 47,971 56,844 Minus: Noninterest Expense (33,445) (34,965) (30,653) (131,605) (125,084)Pretax Pre-Provision Earnings$36,351 $34,062 $32,917 $137,383 $128,439  Adjusted core noninterest income, adjusted core noninterest expense, adjusted earnings before income taxes, core operational profitability, core operational diluted earnings per common share and adjusted core efficiency ratio are non-GAAP financial measures calculated based on GAAP amounts. These adjusted amounts are calculated by excluding the impact of the net gain on Visa shares, legal accrual and wire fraud loss insurance recoveries for the periods presented below. Management considers these measures of financial performance to be meaningful to understanding the company’s core business performance for the periods presented below. A reconciliation of these non-GAAP financial measures is provided below (dollars in thousands, except per share data). Twelve Months Ended December 31, 2025 December 31, 2024Noninterest Income$47,971 $56,844 Less: Net Gain on Visa Shares 0 (8,996)Less: Insurance Recovery 0 (1,000)Adjusted Core Noninterest Income$47,971 $46,848 Noninterest Expense$131,605 $125,084 Less: Legal Accrual 0 (4,537)Adjusted Core Noninterest Expense$131,605 $120,547 Earnings Before Income Taxes$125,583 $111,689 Adjusted Core Impact: Noninterest Income 0 (9,996)Noninterest Expense 0 4,537 Total Adjusted Core Impact 0 (5,459)Adjusted Earnings Before Income Taxes 125,583 106,230 Tax Effect (22,222) (16,853)Core Operational Profitability (1)$103,361 $89,377 Diluted Earnings Per Common Share$4.01 $3.63 Impact of Adjusted Core Items 0.00 (0.16)Core Operational Diluted Earnings Per Common Share$4.01 $3.47 Adjusted Core Efficiency Ratio 48.93% 49.49%  (1) Core operational profitability was $4.1 million lower than the reported net income for the twelve months ended December 31, 2024. Contact Lisa M. O’Neill Executive Vice President and Chief Financial Officer (574) 267-9125 [email protected]