Lakeland Financial Corporation (NASDAQ:LKFN) reported second-quarter results that exceeded earnings expectations but delivered revenue below Wall Street forecasts, as the regional bank continued to benefit from loan growth and a stronger net interest margin.
The company posted adjusted earnings per share of $1.13, topping analysts’ consensus estimate of $1.08. Revenue totaled $70.9 million, missing the expected $72.25 million.
Shares were little changed in after-hours trading following the earnings announcement.
Loan growth and higher margins support quarterly profit
Net income increased 5% year over year to $28.4 million, while total revenue rose 7% from $66.4 million in the second quarter of 2025.
Average loans climbed 6% to $5.53 billion, driven by a 10% increase in commercial and industrial lending and 16% growth in consumer loans compared with the same period last year.
“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.”
Net interest margin improved to 3.49%, up from 3.42% a year earlier, as a 25-basis-point decline in funding costs more than offset an 18-basis-point reduction in earning asset yields.
Net interest income rose $3.4 million, or 6%, to $58.3 million.
Credit quality remains strong
Lakeland Financial reported total deposits of $6.33 billion, an increase of 2% from the prior year. Core deposits accounted for 95% of the deposit base.
Public funds deposits grew 7% to $2.15 billion, while commercial deposits declined 6% to $2.11 billion.
The provision for credit losses fell to $1.7 million from $3.0 million in the prior-year quarter.
Net charge-offs remained minimal at just $24,000, while nonperforming assets declined 36% year over year to $20.0 million, highlighting continued strength in asset quality.
Fee income rises as dividend increases
Noninterest income advanced 9% to $12.6 million, supported by a 13% increase in wealth advisory fees and a 55% jump in income from bank-owned life insurance.
Noninterest expenses increased 13% to $34.5 million, primarily reflecting higher salary and employee benefit costs.
The company’s efficiency ratio rose to 48.6% from 45.9% in the same quarter last year.
During the quarter, Lakeland Financial repurchased 70,873 shares at a weighted average price of $58.20 and raised its quarterly dividend by 4% to $0.52 per share, up from $0.50 a year earlier.
Lakeland Financial Corporation stock price
