Lakeland Financial Posts Record Third-Quarter Net Income, Up 9%

Lakeland Financial Corporation, parent of Lake City Bank, posted record third-quarter net income of $28.857 million, up 9% year over year, as loans expanded and its net interest margin widened.

The Warsaw, Indiana-based company’s quarter ended Sept. 30, 2026, and it released the results Oct. 26. Diluted earnings per share reached $1.14, up 11% from $1.03 and a third-quarter record.

Revenue increased 6% to $73.0 million from $69.0 million a year earlier. Net interest income rose to $60.721 million from $56.073 million, while noninterest income fell 5% to $12.274 million from $12.954 million.

Net interest margin was 3.58%, compared with 3.50% a year earlier and 3.49% in the second quarter. Funding costs declined 24 basis points year over year to 2.13%, while yields on earning assets fell 16 basis points to 5.71%. Net income was also up $417,000 from the second quarter’s $28.440 million.

Loans totaled $5.680 billion at Sept. 30, an 8% increase from a year earlier. Core deposits rose 3% to $6.053 billion and represented 96% of total deposits, which were $6.295 billion. Commercial loan originations of about $525 million exceeded paydowns of about $443 million.

“Strong loan growth and healthy net interest margin expansion were reflected in the quality of our earnings performance in the quarter,” Chairman and CEO David M. Findlay said.

Credit measures were mixed. Nonperforming loans declined to 0.32% of total loans from 0.36%, while individually analyzed and watch-list loans increased 28% to $202 million from $157.2 million a year earlier. Of the quarter’s $3 million in net charge-offs, $2.8 million came from a partial charge-off on a commercial credit with insufficient collateral. Lakeland said that credit had been fully reserved in prior quarters.

Executive Vice President and Chief Financial Officer Lisa M. O’Neill said, “We’re particularly proud of the net interest margin expansion on a year-over-year basis as well as on a quarter-linked basis.”

Unrealized losses on available-for-sale securities were $213.9 million at quarter-end, up from $159.9 million a year earlier. The tangible common equity-to-tangible assets ratio fell to 10.11% from 10.79%. Lakeland attributed the decline primarily to an 85-basis-point rise in the 10-year Treasury yield during the quarter.