Lakeland Financial Corp. reported 84 percent fourth-quarter earnings growth, mostly on a 12 percent increase in its net interest come.
The Warsaw-based parent company of Lake City Bank reported fourth quarter net income of $21.4 million, or 83 cents per share, up from $11.6 million, or 45 cents per share, for the same period the prior year. Its loan loss provision fell to $300,000 from $1.9 million.
Effects of the Tax Cuts and Jobs Act enacted on Dec. 22, 2017 increased the size of the fourth- quarter earnings jump by requiring Lakeland that December to revalue its net deferred tax asset position to reflect the reduction in its federal corporate income tax rate to 21 percent from 35 percent.
The revaluation resulted in a non-cash, non-operating and non-recurring income tax provision of $4.1 million, or $0.16 per diluted share. Excluding that tax provision, the company’s 2018 fourth-quarter earnings would have been up 36 percent from the prior-year quarter.
Lakeland’s fourth-quarter net interest income grew to $39.6 million from $35.4 million a year earlier as its noninterest income rose 7 percent to $10.1 million from $9.5 million.
“Revenue growth was once again a critical driver of our ability to generate strong earnings growth,” David Findlay, president and CEO, said in a statement.
“We experienced healthy double-digit increases in fee-based services in all three of our core business units, commercial, retail, and wealth advisory. In addition, our asset sensitive balance sheet contributed to an expansion of our net interest margin.”
The company’s 2018 net income of $80.4 million, or $3.13 per share, was up 40 percent from $57.3 million, or $2.23 per share, for 2017.
“We continue to invest in our growing branch presence in our Indiana footprint with the opening of our 50th office in downtown Indianapolis,” Findlay said in the statement.
“Importantly, we will stay focused on providing innovative and technology-based solutions for our customers. It is critical that we maintain and increase our investment in our technology platform as we continue to work with key technology and Fintech partners in this long-term strategy.”
Lakeland’s board approved a fourth-quarter dividend of 26 cents per share payable Feb. 5 to shareholders of record as of Jan. 25.
It also authorized the purchase of up to $30 million in Lakeland’s stock, which would have amounted to 3 percent of its shares outstanding at the close of 2018’s last trading day.
The stock repurchase program designed to improve long-term shareholder value will be in effect this year, the company said.
Adjusted Old National earnings double
Old National Bancorp reported fourth-quarter earnings of $47.5 million, or 28 cents per share, on 23 percent for net interest income growth and a 30 percent increase in noninterest income.
The earnings included pre-tax charges of $7.5 million for ONB Foundation funding and $14.8 million for merger and integration costs. They also included a $14 million net gain from the sale of 10 Wisconsin branches.
Excluding these items and netting out securities gains, the Evansville-based parent company of Old National Bank would have reported earnings of $54.1 million, or 32 cents per share.
The company’s fourth-quarter earnings compared with a loss of $18.5 million for the same period last year, when it had recorded $39.3 million of additional tax expense to estimate the impact of a reduction to its deferred tax asset.
Also included in the 2017 fourth-quarter were pre-tax charges of $11.9 million for merger and integration, $3 million for branch consolidations, $1.6 million in severance, $1.3 million for foundation funding and $700,000 for a client experience improvement initiative.
Excluding these items from the 2017 quarter and netting out securities gains, the company would have reported net income of $32.7 million, or 22 cents per share.
Excluding the adjustments, Old National’s 2018 fourth-quarter earnings would have been up 65 percent from the prior-year period. Its loan loss provision increased to $3.4 million from $1 million.
“The fourth-quarter also saw us continue to execute our growth strategy by closing on our KleinBank partnership, which effectively doubles our presence in the state of Minnesota,” said Bob Jones, chairman and CEO.
“Old National’s strong fourth-quarter — punctuated by the second highest commercial loan production in our history — capped a year of outstanding performance that included $283.2 million in organic commercial loan growth, positive operating leverage and strong credit and capital ratios.”
Jones plans to step down as CEO May 2, and Old National has appointed Jim Ryan, its chief financial officer, to succeed him in that position. It also has appointed its treasurer, Brendon Falconer, to succeed Ryan that day as CFO.
The company’s fourth-quarter net interest income increased to $146.2 million from $118.6 million as its noninterest income rose to $58.2 million from $44.8 million.
Old National’s 2018 earnings of $190.8 million, or $1.22 per share, was up 99 percent from $95.7 million, or 69 cents per share for 2017.
The company’s board approved a quarterly dividend of 13 cents per share payable March 15 to shareholders of record on March 1.
1st Source earnings up 19 percent
A 14 percent increase in net interest income contributed to 19 percent fourth-quarter earnings growth for 1st Source Corp.
The South Bend-based parent company for 1st Source Bank reported fourth-quarter earnings of $21.5 million, or 82 cents per share, up from $18 million, or 69 cents per share, for the same period the prior year.
It fourth-quarter net interest income grew to $55.8 million from $48.8 a year earlier as its noninterest income fell to $24.2 million from $25.7 million.
“Reflecting the strong economy on both a national and local level, average loans and leases were up a solid 8.75 percent for the quarter compared to the same period a year ago,” Christopher Murphy III, 1st Source chairman, said in a statement.
“Average deposits had strong growth of 8.57 percent from this time last year. The net interest margin continued to improve with the rising interest rate environment,” he said.
“In the final quarter of 2018, 1st Source’s commitment to helping our clients achieve security, build wealth, and realize their dreams using straight talk and sound advice, along with our acclaimed personal service, convenient branches and highly rated on-line and mobile services, attracted many new clients who were frustrated by the disruption and lack of transparency in their previous banking situation.”
The company’s board approved a dividend of 27 cents per share payable Feb. 14 to shareholders of record on Feb. 4.
NIDB shareholders meeting scheduled
Northeast Indiana Bancorp, the Huntington-based parent company of First Federal Savings Bank, has scheduled its annual shareholders meeting for April.
The meeting will take place at 1 p.m. April 23 in the boardroom of the First Federal location at 100 Frontage Road in Huntington.
In addition to scheduling the annual meeting, the company’s board approved a quarter dividend of 25 cents per share payable Feb. 19 to shareholders of record on Feb. 5.