WARSAW, Ind., July 27, 2026 (GLOBE NEWSWIRE) -- Lakeland Financial Corporation (Nasdaq Global Select/LKFN), parent company of Lake City Bank, today reported record second quarter net income of $28.4 million for the three months ended June 30, 2026, which represents an increase of $1.5 million, or 5%, compared to net income of $27.0 million for the three months ended June 30, 2025. Diluted earnings per share of $1.13 for the second quarter of 2026 also represents a record second quarter performance and increased $0.09, or 9%, compared to $1.04 for the second quarter of 2025. On a linked quarter basis, net income increased $2.0 million, or 7%, from $26.5 million. Diluted earnings per share increased $0.09, or 9%, from $1.04 on a linked quarter basis.

The company further reported record performance for the first half of the year with net income of $54.9 million for the six months ended June 30, 2026 versus $47.1 million for 2025, an increase of $7.9 million, or 17%. Diluted earnings per share increased $0.35, or 19%, to $2.17 for the six months ended June 30, 2026, versus $1.82 for 2025.

Total revenue was $70.9 million for the second quarter of 2026 representing an increase of $4.5 million, or 7%, as compared to $66.4 million for the second quarter of 2025. On a linked quarter basis, revenue increased by $1.2 million, or 2%, from $69.7 million in the first quarter of 2026. Total revenue increased by $10.4 million, or 8%, to $140.6 million for six months ended June 30, 2026, as compared to $130.2 million for 2025.

"During the first half of 2026, the Lake City Bank team delivered strong operating results led by healthy loan and revenue growth," stated David M. Findlay, Chairman and CEO. "Our record second quarter net income reflects the continued execution of our proven organic growth strategy. It’s been a rewarding six months of 2026."

Quarterly Financial Performance

Second Quarter 2026 versus Second Quarter 2025 highlights:

Loans grew by $352.8 million, or 7%, to $5.58 billion
Total revenue improved by 7% from $66.4 million to $70.9 million
Net interest margin improved 7 basis points to 3.49% versus 3.42%
Net interest income increased by $3.4 million, or 6%
Noninterest income increased by $1.1 million, or 9%
Return on average equity of 15.00%, compared to 15.52%
Return on average assets improved to 1.59%, compared to 1.57%
Tangible book value per share grew by $3.27, or 12%, to $30.75
Watch list loans as a percentage of total loans improved to 3.55% from 3.67%
Nonaccrual loans declined to $19.9 million, compared to $30.6 million
Common dividend per share increased to $0.52, or 4%, compared to $0.50
Tangible capital ratio improved to 10.63%, compared to 10.15%
Tangible common equity improved by $63.4 million, or 9%
Common equity tier 1 capital ratio of 14.47%, compared to 14.73%
Total risk-based capital ratio of 15.61%, compared to 15.86%
Repurchased 70,873 shares at a weighted average per share price of $58.20

Second Quarter 2026 versus First Quarter 2026 highlights:

Total loans increased by $106.3 million, or 2%, to $5.58 billion
Core deposits expansion of $215.7 million, or 4%, to $6.03 billion
Total revenue grew by 2% from $69.7 million to $70.9 million
Return on average equity improved to 15.00%, compared to 13.89%
Return on average assets improved to 1.59%, compared to 1.52%
Tangible book value per share grew by $1.06, or 4%, to $30.75
Net interest margin remained stable at 3.49%
Net interest income increased by $1.5 million, or 3%
Noninterest expense declined by 2% to $34.5 million from $35.2 million
Common equity tier 1 capital ratio improved to 14.47%, compared to 14.45%
Total risk-based capital ratio improved to 15.61%, compared to 15.58%
Tangible capital ratio improved to 10.63%, compared to 10.53%
Tangible common equity improved by $24.4 million, or 3%

Net Interest Margin

Net interest margin was 3.49% for the second quarter of 2026, representing a 7 basis point increase from 3.42% for the second quarter of 2025. 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 25 basis points from 2.41% for the second quarter of 2025 to 2.16% for the second quarter of 2026. Offsetting the decrease in funding costs was a decrease to earning asset yields of 18 basis points from 5.83% for the second quarter of 2025 to 5.65% for the second quarter of 2026. Net interest margin was favorably impacted by a reduction in deposit pricing that outpaced the decline in earning asset yields. The cumulative loan beta for the rate-easing cycle that began in September 2024 is 30% compared to the deposit beta of 43% during this period and has resulted in net interest margin expansion that has benefited net interest income.

Net interest margin remained at 3.49% for the second quarter of 2026 as compared to the linked first quarter of 2026. Average earning asset yields increased by 4 basis points from 5.61% to 5.65% on a linked quarter basis and were offset by increased interest expense as a percentage of average earning assets by 4 basis points from 2.12% to 2.16%. The second quarter cost of funds was impacted by seasonal public funds deposits in higher priced deposit products.

Net interest income was $58.3 million for the second quarter of 2026, representing an increase of $3.4 million, or 6%, as compared to $54.9 million for the second quarter of 2025. On a linked quarter basis, net interest income increased $1.5 million, or 3%, from $56.8 million. Net interest income increased by $7.3 million, or 7%, from $107.8 million for the six months ended June 30, 2025, to $115.1 million for the six months ended June 30, 2026.

"During the second quarter of 2026, our net interest margin remained unchanged at 3.49% as loan yield increases offset increased cost of funds," noted Lisa M. O’Neill, Executive Vice President and Chief Financial Officer. "We remain close to our recent peak net interest margin of 3.50% in the third quarter of 2025. We believe the steepening yield curve benefits our net interest margin outlook and as the outlook for interest rate policy shifts, we believe our neutral interest rate posture positions us well."

Capital Strength

The company’s total capital as a percentage of risk-weighted assets was 15.61% at June 30, 2026, compared to 15.86% at June 30, 2025, and 15.58% at March 31, 2026. 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, was 10.63% at June 30, 2026, an improvement from 10.15% at June 30, 2025, and 10.53% at March 31, 2026. Unrealized losses from available-for-sale investment securities were $140.9 million at June 30, 2026, compared to $185.3 million at June 30, 2025 and $154.5 million at March 31, 2026. 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 12.14% at June 30, 2026, compared to 12.17% at June 30, 2025, and 12.20% at March 31, 2026.

The company utilized its share repurchase program to repurchase 70,873 shares of its common stock at a weighted average price per share of $58.20 during the second quarter of 2026. The aggregate purchase price of these repurchases was $4.1 million. The current program authorizes the company to repurchase up to $60.0 million in aggregate purchase price of the company's common stock through April 30, 2027. The company has repurchased a total of 745,616 shares at an aggregate purchase price of $42.9 million and weighted average purchase price per share of $57.58 under the current program with $17.1 million in remaining repurchase authority as of June 30, 2026.

As announced on July 14, 2026, the board of directors approved a cash dividend for the second quarter of $0.52 per share, payable on August 5, 2026, to shareholders of record as of July 25, 2026. The second quarter dividend per share represents a 4% increase from the $0.50 dividend per share paid for the second quarter of 2025.

"Strength of capital continues to support our growing balance sheet," stated Kristin L. Pruitt, President. "Tangible common equity improved by 9% at June 30, 2026 compared to June 30, 2025. We strategically continued our share repurchase program during the first half of 2026. Our healthy capital levels provide ample capacity for continued balance sheet growth as we experience strong loan growth in the Lake City Bank footprint."

Loan Portfolio

Average total loans of $5.53 billion in the second quarter of 2026 increased $301.7 million, or 6%, from $5.23 billion for the second quarter of 2025, and increased $90.5 million, or 2%, from $5.44 billion for the first quarter of 2026.

Total loans, net of deferred loan fees, increased by $352.8 million, or 7%, from $5.23 billion as of June 30, 2025, to $5.58 billion as of June 30, 2026. The growth in loans was driven by increases in both the commercial and consumer segments of the portfolio, with increases to the commercial and industrial loans of $150.6 million, or 10%, consumer 1-4 family mortgage loans of $82.7 million, or 16%, commercial real estate and multi-family residential loans of $80.2 million, or 3%, other commercial loans of $25.6 million, or 27%, and other consumer loans of $14.1 million, or 14%. On a linked quarter basis, total loans increased by $106.3 million, or 2%, from $5.48 billion at March 31, 2026. The linked quarter increase was driven by growth in both the commercial and consumer segments of the portfolio, with increases to the commercial and industrial loan portfolio of $65.6 million, or 4%, consumer 1-4 family mortgage loans of $28.0 million, or 5%, other commercial loans of $25.3 million, or 26.4%, and commercial real estate and multi-family residential loans of $20.3 million, or 1%. Offsetting these increases, agri-business and agricultural loans declined by $34.7 million, or 9%.

Commercial loan originations for the second quarter were approximately $504.0 million and were offset by approximately $427.0 million in loan pay downs. Commercial and industrial line of credit usage increased to 43% as of June 30, 2026, from 40% at June 30, 2025, and 41% at March 31, 2026. Total commercial and industrial lines of credit expanded by $155.0 million, or 7%, as compared to a year ago, and line usage increased by $120.0 million, or 14%, over that period.

Findlay added, "Our year-over-year organic loan growth of 7% reflects outstanding work by our commercial and retail lending teams. Our prospect and client business development program is yielding tangible results, and we remain well positioned for continued growth. We are very pleased with 10% growth in commercial and industrial loans, which represent the foundation of our commercial banking business. In addition, commercial and industrial line of credit utilization of 43% at June 30, 2026, represents increased usage compared to 39% at December 31, 2025. We are particularly pleased to report that our total consumer loans have grown by 16% on a year-over-year basis."

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 95% of total deposits.

(in thousands)	June 30, 2026				March 31, 2026				June 30, 2025
Retail	$	1,769,029	28.0	%	$	1,800,420	29.1	%	$	1,755,750	28.4	%
Commercial		2,113,784	33.4			2,136,404	34.5			2,256,620	36.6
Public funds		2,147,600	33.9			1,877,855	30.3			2,014,047	32.6
Core deposits		6,030,413	95.3			5,814,679	93.9			6,026,417	97.6
Brokered deposits		299,155	4.7			375,581	6.1			150,416	2.4
Total	$	6,329,568	100.0	%	$	6,190,260	100.0	%	$	6,176,833	100.0	%

Total deposits increased $152.7 million, or 2%, from $6.18 billion as of June 30, 2025, to $6.33 billion as of June 30, 2026. The increase in total deposits was driven by an increase in brokered deposits of $148.7 million, or 99%. Core deposits increased by $4.0 million, or less than 1%. Public funds deposits grew annually by $133.6 million, or 7%, to $2.15 billion. Retail deposits expanded by $13.3 million, or 1%, to $1.77 billion. Commercial deposits contracted by $142.8 million, or 6%, to $2.11 billion.

On a linked quarter basis, total deposits increased $139.3 million, or 2%, from $6.19 billion at March 31, 2026, to $6.33 billion at June 30, 2026. Core deposits increased by $215.7 million, or 4%, while brokered deposits decreased by $76.4 million, or 20%. The linked quarter growth in core deposits was driven primarily by a seasonal growth in public funds of $269.7 million, or 14%. Commercial deposits decreased by $22.6 million, or 1%, and retail deposits decreased by $31.4 million, or 2%.

Average total deposits were $6.31 billion for the second quarter of 2026, an increase of $216.2 million, or 4%, from $6.10 billion for the second quarter of 2025. Average interest-bearing deposits drove the increase in average total deposits and increased by $232.5 million, or 5%. Contributing to the overall growth of interest-bearing deposits was an increase in total average time deposits of $131.4 million, or 16%. Average interest-bearing checking accounts increased $99.5 million, or 3%. Average noninterest-bearing demand deposits decreased by $16.3 million, or 1%, to $1.23 billion.

On a linked quarter basis, average total deposits increased by $257.1 million, or 4%, from $6.06 billion for the first quarter of 2026 to $6.31 billion for the second quarter of 2026. Average interest-bearing deposits drove the increase in total average deposits, which increased by $264.0 million, or 5%. Interest bearing checking accounts grew by $180.7 million, or 5%. Average time deposits expanded by $83.4 million, or 10%. Offsetting these increases was a decrease in average noninterest bearing demand deposits of $6.8 million, or 1%.

Checking account growth as of June 30, 2026, compared to June 30, 2025, includes growth of $249.2 million, or 13%, in aggregate public fund checking account balances. Offsetting this increase was a reduction of $10.4 million, or 1%, in aggregate retail checking account balances and a decline of $173.5 million, or 8%, in aggregate commercial checking account balances. The number of accounts expanded for all three segments, with growth of 3% for public funds accounts, 2% for commercial accounts and 1% for retail accounts.

"Core deposits represented 95% of total deposits at June 30, 2026," commented O’Neill. "On a linked-quarter basis core deposits improved by $215.7 million or 3.7% with double-digit growth in the public funds sector. Public fund account checking balances grew by $249 million or 13% due to new municipal depositors who represent relationship-driven clients. We continue to experience an increase in the number of checking accounts year-over-year, and average checking account balances remain higher than pre-pandemic levels."

Asset Quality

The company recorded a provision for credit losses of $1.7 million in the second quarter of 2026, compared to $3.0 million in the second quarter of 2025 and $2.0 million for the linked first quarter of 2026.

The allowance for credit loss reserve to total loans was 1.27% at June 30, 2026, unchanged from 1.27% at June 30, 2025 and increased from 1.26% at March 31, 2026. The company recorded net charge offs of $24,000 in the second quarter of 2026, compared to net charge offs of $28.9 million in the second quarter of 2025 and $2.1 million during the linked first quarter of 2026. Net charge offs during the second quarter of 2025 were driven by the partial charge off of a previously disclosed nonperforming credit. Annualized net charge offs to average loans were 0.00% for the second quarter of 2026, compared to 2.22% for the second quarter of 2025 and 0.16% for the linked first quarter of 2026.

Nonperforming assets decreased by $11.1 million, or 36%, to $20.0 million as of June 30, 2026, versus $31.1 million as of June 30, 2025. The decrease to nonperforming assets was primarily driven by the resolution of the previously disclosed nonperforming credit during the third quarter of 2025. On a linked quarter basis, nonperforming assets decreased by $938,000, or 4%. The ratio of nonperforming assets to total assets at June 30, 2026, decreased to 0.28% from 0.45% at June 30, 2025, and 0.30% when compared to March 31, 2026.

Total individually analyzed and watch list loans increased by $6.4 million, or 3%, to $198.0 million as of June 30, 2026, versus $191.6 million as of June 30, 2025. On a linked quarter basis, total individually analyzed and watch list loans increased by $15.7 million, or 9%, from $182.3 million at March 31, 2026. The increase in individually analyzed and watch list loans during the linked quarter was driven primarily by credit downgrades to the watch list of approximately $13.2 million. Migration within the watch list was driven by three unrelated relationships, with an aggregate balance of approximately $24.7 million, that were moved from the pooled watch list to individually analyzed status during the second quarter of 2026. Watch list loans as a percentage of total loans were 3.55% at June 30, 2026, a 12 basis point decrease compared to 3.67% at June 30, 2025, and a 22 basis point increase from 3.33% at March 31, 2026.

"Our loan portfolio is well-diversified, and our loan portfolio continues to demonstrate stable performance trends," commented Findlay. "Our borrowers continue to navigate the changing economic landscape well and our mid-year loan portfolio reviews did not identify significant credit concerns."

Investment Portfolio Overview

Total investment securities were $1.17 billion at June 30, 2026, reflecting an increase of $39.8 million, or 4%, as compared to $1.13 billion at June 30, 2025. Investment securities represented 16% of total assets as of June 30, 2026. The company anticipates receiving principal and interest cash flows of approximately $51.9 million during the remainder of 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 contracted to 5.8 years at June 30, 2026, compared to 5.9 years at June 30, 2025, and 6.0 years at March 31, 2026.

Noninterest Income

The company’s noninterest income increased $1.1 million, or 9%, to $12.6 million for the second quarter of 2026, compared to $11.5 million for the second quarter of 2025. Wealth advisory fees increased $350,000, or 13%, driven by continued growth in customers and assets under management. Bank owned life insurance income increased $577,000, or 55%, from improved market performance of the bank's variable owned life insurance policies which reflect returns in the equity markets. Other income increased by $127,000, or 32%, primarily from increased limited partnership investment income.

Noninterest income for the second quarter of 2026 decreased by $361,000, or 3%, on a linked quarter basis from $12.9 million during the first quarter of 2026. Bank owned life insurance increased $641,000, or 66%, from improved variable owned life insurance policy market performance and increased general account income, which is impacted during the first quarter from annual insurance costs that are charged against certain policies. Conversely, interest rate swap fee income decreased $701,000. Other income decreased by $205,000, or 28%, which was impacted during the first quarter of 2026 from the recognition of death benefit income from bank owned life insurance policies. Loan and service fee income decreased $147,000, or 5%, from reduced commercial loan fees.

Findlay noted, "We are pleased to report nearly double-digit growth in quarterly noninterest income on a year-over-year basis and 14% growth in noninterest income for the six months ended June 30, 2026 as compared to the same period in 2025. Our fee-based business is growing with 10% growth in the Wealth Advisory Group and 6% improvement in loan and service fees. Interest rate swap fees have also contributed nicely to noninterest revenue growth for the first six months of 2026 together with an increase in mortgage banking income."

Noninterest income increased by $3.1 million, or 14%, to $25.5 million for the six months ended June 30, 2026, compared to $22.4 million for the prior year period. Increases in fee-based revenue streams contributed to the increase to noninterest income, with wealth advisory fees improving by $546,000, or 10%, loan and service fees improving by $377,000, or 6%, service charges on deposit accounts improving by $151,000, or 3%, and investment brokerage fees improving by $33,000, or 3%. Additionally, bank owned life insurance increased $1.2 million, or 90.4%, from improved market performance from variable bank owned life insurance policies and incremental income from general account policies purchased in 2025. Increased transaction volume drove increases to interest rate swap fee income of $681,000 and mortgage banking income of $136,000.

Noninterest Expense

Noninterest expense increased $4.0 million, or 13%, to $34.5 million for the second quarter of 2026, compared to $30.4 million during the second quarter of 2025. Salaries and employee benefits expense increased by $3.4 million, or 20%, primarily the result of increased salaries and wages, performance-based incentive compensation accruals, and benefits expenses. Deferred variable compensation expense, which is offset by noninterest income recorded from the performance of the company's variable bank owned life insurance policies, contributed further to the increase. Net occupancy expense increased $220,000, or 13%, from the company's continued expansion and reinvestment into its physical branch and operational infrastructure. Data processing fees and supplies increased $222,000, or 5%, from continued investment in customer-facing and operational technology solutions, including artificial intelligence capabilities. Additionally, corporate and business development expense increased $82,000, or 7%, professional fees increased $79,000, or 5%, and FDIC insurance and other regulatory fees increased $42,000, or 5%.

On a linked quarter basis, noninterest expense decreased by $694,000, or 2%, from $35.2 million during the first quarter of 2026. Other expense decreased $421,000, or 15%, primarily from semi-annual board of directors share grants that occurred in the linked first quarter. Corporate and business development expense decreased by $251,000, or 17%, from a reduction in seasonal advertising expense. Net occupancy expense decreased by $137,000, or 7%, driven by reduced seasonal occupancy expenses, and professional fees decreased $152,000, or 8%, from reduced accruals for legal and accounting fees. Offsetting these decreases was an increase to salaries and employee benefits expense of $199,000, or 1%, and data processing fees and supplies expense of $115,000, or 3%.

Noninterest expense increased by $6.4 million, or 10%, for the six months ended June 30, 2026, to $69.6 million compared to $63.2 million for the six months ended June 30, 2025. Salaries and employee benefits expense increased $5.8 million, or 17%, primarily due to increased salaries and wages of $2.0 million, performance-based incentive compensation accruals of $2.3 million, variable deferred compensation expense of $799,000, and health insurance expense of $677,000. Net occupancy expense increased $344,000, or 9%. Data processing fees and supplies expense increased $216,000, or 3%, from continued investment in customer-facing and operational technology solutions. Corporate and business development expense increased $169,000, or 7%, from increased advertising and corporate development expenses. FDIC insurance and other regulatory fees increased $115,000, or 7%, from increased FDIC insurance premium accruals. Offsetting these increases was a decrease in professional fees of $364,000, or 9%, primarily driven by reduced technology implementation fees.

The company’s efficiency ratio was 48.6% for the second quarter of 2026, compared to 45.9% for the second quarter of 2025 and 50.4% for the linked first quarter of 2026. The company's efficiency ratio was 49.5% for the six months ended June 30, 2026, compared to 48.6% for the comparable period in 2025.

"We are pleased to report that strong revenue growth during the second quarter of 2026 improved our efficiency ratio on a linked quarter basis. Our largest investments in the business continue to be focused on revenue generating human capital, strategic branch development in our Lake City Bank footprint and investments in technology solutions," noted Findlay. "In addition to two new branch locations under development in Indianapolis currently, we have future plans for increased presence in our South Bend and Fort Wayne markets."

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 $7.2 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, which are incorporated herein by reference.


LAKELAND FINANCIAL CORPORATION SECOND QUARTER 2026 FINANCIAL HIGHLIGHTS

	Three Months Ended									Six Months Ended
(unaudited – dollars in thousands, except per share data)	June 30,			March 31,			June 30,			June 30,			June 30,
END OF PERIOD BALANCES	2026			2026			2025			2026			2025
Assets	$	7,242,959		$	7,083,680		$	6,964,301		$	7,242,959		$	6,964,301
Investments		1,169,188			1,160,608			1,129,346			1,169,188			1,129,346
Loans		5,579,625			5,473,358			5,226,827			5,579,625			5,226,827
Allowance for Credit Losses		70,598			68,914			66,552			70,598			66,552
Deposits		6,329,568			6,190,260			6,176,833			6,329,568			6,176,833
Brokered Deposits		299,155			375,581			150,416			299,155			150,416
Core Deposits (1)		6,030,413			5,814,679			6,026,417			6,030,413			6,026,417
Total Equity		773,374			748,993			709,987			773,374			709,987
Goodwill Net of Deferred Tax Assets		3,803			3,803			3,803			3,803			3,803
Tangible Common Equity (2)		769,571			745,190			706,184			769,571			706,184
Adjusted Tangible Common Equity (2)		893,530			880,296			866,758			893,530			866,758
AVERAGE BALANCES
Total Assets	$	7,190,663		$	7,082,213		$	6,904,681		$	7,136,737		$	6,834,217
Earning Assets		6,832,702			6,729,394			6,570,607			6,781,334			6,501,092
Investments		1,161,807			1,190,278			1,125,597			1,175,964			1,130,970
Loans		5,531,344			5,440,876			5,229,646			5,486,359			5,207,903
Total Deposits		6,312,674			6,055,539			6,096,504			6,184,817			5,986,227
Interest Bearing Deposits		5,084,953			4,821,000			4,852,446			4,953,706			4,735,066
Interest Bearing Liabilities		5,133,439			5,004,623			4,886,943			5,069,387			4,802,175
Total Equity		760,533			772,946			696,976			766,706			696,517
INCOME STATEMENT DATA
Net Interest Income	$	58,301		$	56,773		$	54,876		$	115,074		$	107,751
Net Interest Income-Fully Tax Equivalent		59,404			57,878			55,986			117,282			109,970
Provision for Credit Losses		1,708			2,000			3,000			3,708			9,800
Noninterest Income		12,572			12,933			11,486			25,505			22,414
Noninterest Expense		34,457			35,151			30,432			69,608			63,195
Net Income		28,440			26,478			26,966			54,918			47,051
Pretax Pre-Provision Earnings (2)		36,416			34,555			35,930			70,971			66,970
PER SHARE DATA
Basic Net Income Per Common Share	$	1.14		$	1.04		$	1.05		$	2.18		$	1.83
Diluted Net Income Per Common Share		1.13			1.04			1.04			2.17			1.82
Cash Dividends Declared Per Common Share		0.52			0.52			0.50			1.04			1.00
Dividend Payout		46.02	%		50.00	%		48.08	%		47.93	%		54.95	%
Book Value Per Common Share (equity per share issued)	$	30.90		$	29.84		$	27.63		$	30.90		$	27.63
Tangible Book Value Per Common Share (2)		30.75			29.69			27.48			30.75			27.48
Market Value – High	$	63.03		$	63.80		$	62.39		$	63.80		$	71.77
Market Value – Low		56.56			54.36			50.00			54.36			50.00
Basic Weighted Average Common Shares Outstanding		25,058,539			25,344,757			25,707,233			25,201,252			25,711,004


	Three Months Ended									Six Months Ended
(unaudited – dollars in thousands, except per share data)	June 30,			March 31,			June 30,			June 30,			June 30,
PER SHARE DATA (continued)	2026			2026			2025			2026			2025
Diluted Weighted Average Common Shares Outstanding		25,231,590			25,493,920			25,776,205			25,361,745			25,782,817
KEY RATIOS
Return on Average Assets		1.59	%		1.52	%		1.57	%		1.55	%		1.39	%
Return on Average Total Equity		15.00			13.89			15.52			14.44			13.62
Average Equity to Average Assets		10.58			10.91			10.09			10.74			10.19
Net Interest Margin		3.49			3.49			3.42			3.49			3.41
Efficiency (Noninterest Expense/Net Interest Income plus Noninterest Income)		48.62			50.43			45.86			49.51			48.55
Loans to Deposits		88.15			88.42			84.62			88.15			84.62
Investment Securities to Total Assets		16.14			16.38			16.22			16.14			16.22
Tier 1 Leverage (3)		12.17			12.20			12.21			12.17			12.21
Tier 1 Risk-Based Capital (3)		14.47			14.45			14.73			14.47			14.73
Common Equity Tier 1 (CET1) (3)		14.47			14.45			14.73			14.47			14.73
Total Capital (3)		15.61			15.58			15.86			15.61			15.86
Tangible Capital (2)		10.63			10.53			10.15			10.63			10.15
Adjusted Tangible Capital (2)		12.14			12.20			12.17			12.14			12.17
ASSET QUALITY
Loans Past Due 30 - 89 Days	$	3,026		$	7,416		$	1,648		$	3,026		$	1,648
Loans Past Due 90 Days or More		6			7			7			6			7
Nonaccrual Loans		19,946			20,909			30,627			19,946			30,627
Nonperforming Loans		19,952			20,916			30,634			19,952			30,634
Other Real Estate Owned		0			0			284			0			284
Other Nonperforming Assets		48			22			183			48			183
Total Nonperforming Assets		20,000			20,938			31,101			20,000			31,101
Individually Analyzed Loans		66,945			43,160			52,069			66,945			52,069
Non-Individually Analyzed Watch List Loans		131,070			139,117			139,548			131,070			139,548
Total Individually Analyzed and Watch List Loans		198,015			182,277			191,617			198,015			191,617
Gross Charge Offs		431			2,196			29,111			2,627			29,619
Recoveries		407			115			230			522			411
Net Charge Offs/(Recoveries)		24			2,081			28,881			2,105			29,208
Net Charge Offs/(Recoveries) to Average Loans		0.00	%		0.16	%		2.22	%		0.08	%		1.13	%
Credit Loss Reserve to Loans		1.27			1.26			1.27			1.27			1.27
Credit Loss Reserve to Nonperforming Loans		353.84			329.48			217.25			353.84			217.25
Nonperforming Loans to Loans		0.36			0.38			0.59			0.36			0.59
Nonperforming Assets to Assets		0.28			0.30			0.45			0.28			0.45
Total Individually Analyzed and Watch List Loans to Total Loans		3.55			3.33			3.67			3.55			3.67
OTHER DATA
Full Time Equivalent Employees		695			674			675			695			675
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 June 30, 2026 are preliminary until the FR Y-9C is filed.


CONSOLIDATED BALANCE SHEETS (dollars in thousands, except share data)

	June 30, 2026			December 31, 2025
	(unaudited)
ASSETS
Cash and due from banks	$	69,864		$	57,139
Short-term investments		124,262			84,179
Total cash and cash equivalents		194,126			141,318

Securities available-for-sale, at fair value		1,035,163			1,052,062
Securities held-to-maturity, at amortized cost (fair value of $119,433 and $117,510, respectively)		134,025			133,208
Real estate mortgage loans held-for-sale		3,630			2,707
Loans, net of allowance for credit losses of $70,598 and $68,995		5,509,027			5,306,354
Land, premises and equipment, net		72,504			65,542
Bank owned life insurance		132,366			129,978
Federal Reserve and Federal Home Loan Bank stock		21,420			21,420
Accrued interest receivable		29,514			28,997
Goodwill		4,970			4,970
Other assets		106,214			103,466
Total assets	$	7,242,959		$	6,990,022


LIABILITIES
Noninterest bearing deposits	$	1,292,033		$	1,221,327
Interest bearing deposits		5,037,535			4,752,023
Total deposits		6,329,568			5,973,350

Borrowings - Federal Home Loan Bank advances:
Short-term advance		70,000			170,000
Long-term advance		1,200			1,200
Other borrowings		0			13,000
Total borrowings		71,200			184,200

Accrued interest payable		8,961			8,868
Other liabilities		59,856			61,112
Total liabilities		6,469,585			6,227,530

STOCKHOLDERS’ EQUITY
Common stock: 90,000,000 shares authorized, no par value
26,063,576 shares issued and 24,858,875 outstanding as of June 30, 2026
26,023,644 shares issued and 25,219,634 outstanding as of December 31, 2025		140,020			136,965
Retained earnings		817,002			788,345
Accumulated other comprehensive income (loss)		(124,463	)		(127,137	)
Treasury stock at cost (1,204,701 shares as of June 30, 2026, 804,010 shares as of December 31, 2025)		(59,274	)		(35,770	)
Total stockholders’ equity		773,285			762,403
Noncontrolling interest		89			89
Total equity		773,374			762,492
Total liabilities and equity	$	7,242,959		$	6,990,022


CONSOLIDATED STATEMENTS OF INCOME (unaudited - in thousands, except share and per share data)

	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
NET INTEREST INCOME
Interest and fees on loans
Taxable	$	85,994	$	84,418	$	169,105	$	166,158
Tax exempt		293		291		572		583
Interest and dividends on securities
Taxable		3,764		3,457		7,605		6,846
Tax exempt		3,883		3,917		7,790		7,827
Other interest income		1,214		2,302		2,063		3,426
Total interest income		95,148		94,385		187,135		184,840

Interest on deposits		36,379		39,111		69,810		75,569
Interest on short-term borrowings		468		398		2,251		1,520
Total interest expense		36,847		39,509		72,061		77,089

NET INTEREST INCOME		58,301		54,876		115,074		107,751

Provision for credit losses		1,708		3,000		3,708		9,800

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		56,593		51,876		111,366		97,951

NONINTEREST INCOME
Wealth advisory fees		3,017		2,667		6,080		5,534
Investment brokerage fees		511		550		1,035		1,002
Service charges on deposit accounts		2,878		2,827		5,752		5,601
Loan and service fees		3,060		3,006		6,267		5,890
Merchant and interchange fee income		836		854		1,613		1,676
Bank owned life insurance income		1,617		1,040		2,593		1,362
Interest rate swap fee income		0		20		701		20
Mortgage banking income		128		124		209		73
Other income		525		398		1,255		1,256
Total noninterest income		12,572		11,486		25,505		22,414

NONINTEREST EXPENSE
Salaries and employee benefits		20,494		17,096		40,789		34,998
Net occupancy expense		1,967		1,747		4,071		3,727
Equipment costs		1,409		1,437		2,873		2,819
Data processing fees and supplies		4,374		4,152		8,633		8,417
Corporate and business development		1,242		1,160		2,735		2,566
FDIC insurance and other regulatory fees		881		839		1,754		1,639
Professional fees		1,785		1,706		3,722		4,086
Other expense		2,305		2,295		5,031		4,943
Total noninterest expense		34,457		30,432		69,608		63,195

INCOME BEFORE INCOME TAX EXPENSE		34,708		32,930		67,263		57,170
Income tax expense		6,268		5,964		12,345		10,119
NET INCOME	$	28,440	$	26,966	$	54,918	$	47,051

BASIC WEIGHTED AVERAGE COMMON SHARES		25,058,539		25,707,233		25,201,252		25,711,004

BASIC EARNINGS PER COMMON SHARE	$	1.14	$	1.05	$	2.18	$	1.83

DILUTED WEIGHTED AVERAGE COMMON SHARES		25,231,590		25,776,205		25,361,745		25,782,817

DILUTED EARNINGS PER COMMON SHARE	$	1.13	$	1.04	$	2.17	$	1.82


LAKELAND FINANCIAL CORPORATION LOAN DETAIL (unaudited, in thousands)

	June 30, 2026					March 31, 2026					June 30, 2025
Commercial and industrial loans:
Working capital lines of credit loans	$	815,493		14.6	%	$	742,655		13.6	%	$	717,484		13.7	%
Non-working capital loans		828,878		14.9			836,121		15.3			776,278		14.9
Total commercial and industrial loans		1,644,371		29.5			1,578,776		28.9			1,493,762		28.6

Commercial real estate and multi-family residential loans:
Construction and land development loans		439,987		7.9			509,143		9.3			552,998		10.6
Owner occupied loans		804,995		14.4			807,813		14.8			780,285		14.9
Nonowner occupied loans		937,493		16.8			960,395		17.5			869,196		16.6
Multifamily loans		578,151		10.4			462,984		8.5			477,910		9.1
Total commercial real estate and multi-family residential loans		2,760,626		49.5			2,740,335		50.1			2,680,389		51.2

Agri-business and agricultural loans:
Loans secured by farmland		180,871		3.2			177,823		3.2			150,934		2.9
Loans for agricultural production		158,522		2.8			196,258		3.6			188,501		3.6
Total agri-business and agricultural loans		339,393		6.0			374,081		6.8			339,435		6.5

Other commercial loans		121,060		2.2			95,764		1.7			95,442		1.8
Total commercial loans		4,865,450		87.2			4,788,956		87.5			4,609,028		88.1

Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		302,799		5.4			292,724		5.3			273,287		5.2
Open end and junior lien loans		283,099		5.1			263,600		4.8			226,114		4.4
Residential construction and land development loans		12,904		0.2			14,429		0.3			16,667		0.3
Total consumer 1-4 family mortgage loans		598,802		10.7			570,753		10.4			516,068		9.9

Other consumer loans		117,953		2.1			116,158		2.1			103,880		2.0
Total consumer loans		716,755		12.8			686,911		12.5			619,948		11.9
Subtotal		5,582,205		100.0	%		5,475,867		100.0	%		5,228,976		100.0	%
Less: Allowance for credit losses		(70,598	)				(68,914	)				(66,552	)
Net deferred loan fees		(2,580	)				(2,509	)				(2,149	)
Loans, net	$	5,509,027				$	5,404,444				$	5,160,275


LAKELAND FINANCIAL CORPORATION DEPOSITS AND BORROWINGS (unaudited, in thousands)

	June 30, 2026		March 31, 2026		June 30, 2025
Noninterest bearing demand deposits	$	1,292,033	$	1,301,547	$	1,261,740
Savings and transaction accounts:
Savings deposits		281,901		291,355		283,976
Interest bearing demand deposits		3,828,259		3,649,409		3,841,703
Time deposits:
Deposits of $100,000 or more		727,412		746,168		584,165
Other time deposits		199,963		201,781		205,249
Total deposits	$	6,329,568	$	6,190,260	$	6,176,833
FHLB advances and other borrowings		71,200		68,200		6,200
Total funding sources	$	6,400,768	$	6,258,460	$	6,183,033


LAKELAND FINANCIAL CORPORATION AVERAGE BALANCE SHEET AND NET INTEREST ANALYSIS (UNAUDITED)

	Three Months Ended June 30, 2026							Three Months Ended March 31, 2026							Three Months Ended June 30, 2025
(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)/ Rate
Earning Assets
Loans:
Taxable (2)(3)	$	5,507,100		$	85,994	6.26	%	$	5,417,380		$	83,111	6.22	%	$	5,204,006		$	84,418	6.51	%
Tax exempt (1)		24,244			363	6.01			23,496			346	5.98			25,640			359	5.62
Investments: (1)
Securities		1,161,807			8,680	3.00			1,190,278			8,786	2.99			1,125,597			8,416	3.00
Short-term investments		3,567			28	3.15			2,701			21	3.15			2,832			28	3.97
Interest bearing deposits		135,984			1,186	3.50			95,539			828	3.51			212,532			2,274	4.29
Total earning assets	$	6,832,702		$	96,251	5.65	%	$	6,729,394		$	93,092	5.61	%	$	6,570,607		$	95,495	5.83	%
Less: Allowance for credit losses		(69,959	)						(68,944	)						(93,644	)
Nonearning Assets
Cash and due from banks		64,197							67,282							66,713
Premises and equipment		69,499							65,997							61,280
Other nonearning assets		294,224							288,484							299,725
Total assets	$	7,190,663						$	7,082,213						$	6,904,681

Interest Bearing Liabilities
Savings deposits	$	287,520		$	41	0.06	%	$	287,643		$	41	0.06	%	$	285,944		$	43	0.06	%
Interest bearing checking accounts		3,867,392			28,184	2.92			3,686,666			26,110	2.87			3,767,903			31,499	3.35
Time deposits:
In denominations under $100,000		201,696			1,576	3.13			201,974			1,548	3.11			208,770			1,745	3.35
In denominations over $100,000		728,345			6,578	3.62			644,717			5,732	3.61			589,829			5,824	3.96
Short-term borrowings		47,286			468	3.97			182,423			1,783	3.96			33,297			398	4.79
Long-term borrowings		1,200			0	0.00			1,200			0	0.00			1,200			0	0.00
Total interest bearing liabilities	$	5,133,439		$	36,847	2.88	%	$	5,004,623		$	35,214	2.85	%	$	4,886,943		$	39,509	3.24	%
Noninterest Bearing Liabilities
Demand deposits		1,227,721							1,234,539							1,244,058
Other liabilities		68,970							70,105							76,704
Stockholders' Equity		760,533							772,946							696,976
Total liabilities and stockholders' equity	$	7,190,663						$	7,082,213						$	6,904,681
Interest Margin Recap
Interest income/average earning assets					96,251	5.65	%					93,092	5.61	%					95,495	5.83	%
Interest expense/average earning assets					36,847	2.16						35,214	2.12						39,509	2.41
Net interest income and margin				$	59,404	3.49	%				$	57,878	3.49	%				$	55,986	3.42	%

(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 $1.10 million in the three-month periods ended June 30, 2026, and $1.11 million in the three-month periods ended March 31, 2026, and June 30, 2025.
(2)		Loan fees, which are immaterial in relation to total taxable loan interest income for the three-month periods ended June 30, 2026, March 31, 2026, and June 30, 2025, 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									Six Months Ended
	June 30, 2026			March 31, 2026			June 30, 2025			June 30, 2026			June 30, 2025
Total Equity	$	773,374		$	748,993		$	709,987		$	773,374		$	709,987
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		769,571			745,190			706,184			769,571			706,184
Market Value Adjustment in AOCI		123,959			135,106			160,574			123,959			160,574
Adjusted Tangible Common Equity		893,530			880,296			866,758			893,530			866,758

Assets	$	7,242,959		$	7,083,680		$	6,964,301		$	7,242,959		$	6,964,301
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		7,239,156			7,079,877			6,960,498			7,239,156			6,960,498
Market Value Adjustment in AOCI		123,959			135,106			160,574			123,959			160,574
Adjusted Tangible Assets		7,363,115			7,214,983			7,121,072			7,363,115			7,121,072

Ending Common Shares Issued		25,028,859			25,098,219			25,697,093			25,028,859			25,697,093

Tangible Book Value Per Common Share	$	30.75		$	29.69		$	27.48		$	30.75		$	27.48

Tangible Common Equity/Tangible Assets		10.63	%		10.53	%		10.15	%		10.63	%		10.15	%
Adjusted Tangible Common Equity/Adjusted Tangible Assets		12.14	%		12.20	%		12.17	%		12.14	%		12.17	%

Net Interest Income	$	58,301		$	56,773		$	54,876		$	115,074		$	107,751
Plus: Noninterest Income		12,572			12,933			11,486			25,505			22,414
Minus: Noninterest Expense		(34,457	)		(35,151	)		(30,432	)		(69,608	)		(63,195	)
Pretax Pre-Provision Earnings	$	36,416		$	34,555		$	35,930		$	70,971		$	66,970

Contact

Lisa M. O’Neill

Executive Vice President and Chief Financial Officer

(574) 267-9125

lisa.oneill@lakecitybank.com