 WARSAW, Ind., July 27, 2020 GLOBE NEWSWIRE -- Lakeland Financial Corporation Nasdaq Global SelectLKFN, parent company of Lake City Bank, today reported quarterly net income of 19.7 million for the three months ended June 30, 2020, a decrease of 9 versus 21.7 million for the second quarter of 2019. Diluted earnings per share decreased 9 to 0.77 for the second quarter of 2020, versus 0.85 for the second quarter of 2019. On a linked quarter basis, net income increased 2.4 million, or 14, from the first quarter of 2020, in which the company had net income of 17.3 million, or 0.67, diluted earnings per share. Pretax pre-provision earnings1 were 29.6 million for the second quarter of 2020, an increase of 6, or 1.7 million, as compared to the second quarter of 2019. On a linked quarter basis, pretax pre-provision earnings increased 8, or 2.1 million, from 27.5 million for the first quarter of 2020. The company further reported net income of 37.0 million for the six months ended June 30, 2020 versus 43.4 million for the comparable period of 2019, a decrease of 15. Diluted earnings per share also decreased 15 to 1.44 for the six months ended June 30, 2020 versus 1.69 for the comparable period of 2019. Pretax pre-provision earnings1 were 57.2 million for the six months ended June 30 2020, versus 55.2 million for the comparable period of 2019, an increase of 4, or 2.0 million.David M. Findlay, President and Chief Executive Officer commented, The Lake City Bank team has done a tremendous job in managing through this unprecedented period. The strength of our financial performance is evident in our operating performance as demonstrated by the healthy growth of pretax pre-provision earnings. Yet the real strength of our performance is the most intangible one, our teams positive attitude and get it done mindset that has defined our COVID-19 pandemic response. At every step during this crisis, the culture of efficient execution that we have developed over the past two decades has driven our teams actions.Financial Performance Second Quarter 2020Second Quarter 2020 versus Second Quarter 2019 highlights: Return on average equity of 12.92, compared to 15.76 Return on average assets of 1.45, compared to 1.76 Loan growth of 492 million, or 12 Paycheck Protection Program PPP loans of 555 million funded Core deposit growth of 612 million, or 15 Noninterest bearing DDA growth of 479 million, or 51 Net interest income increase of 1.1 million, or 3 Revenue growth of 698,000, or 1 Provision for loan losses of 5.5 million compared to 785,000, an increase of 4.7 million, or 601 Noninterest expense decrease of 1.0 million, or 5 Pretax pre-provision earnings increase of 1.7 million, or 6 Average total equity increase of 60 million, or 11Second Quarter 2020 versus First Quarter 2020 highlights: Return on average equity of 12.92, compared to 11.51 Return on average assets of 1.45, compared to 1.40 Average loan growth of 401 million, or 10 Average PPP loans outstanding increased by 458 million Core deposit growth of 443 million, or 11 Noninterest bearing DDA growth of 368 million, or 35 Net interest income increase of 674,000, or 2 Noninterest income increase of 392,000, or 4 Revenue growth of 1.1 million, or 2 Provision expense decline of 1.1 million to 5.5 million Noninterest expense decrease of 1.0 million, or 5 Pretax pre-provision earnings increase of 2.1 million, or 8 Average total equity increase of 8.0 million, or 1Return on average total equity for the second quarter of 2020 was 12.92, compared to 15.76 in the second quarter of 2019 and 11.51 in the linked first quarter of 2020. Return on average total equity for the first six months of 2020 was 12.22, compared to 16.17 in the same period of 2019. Return on average assets for the second quarter of 2020 was 1.45, compared to 1.76 in the second quarter of 2019 and 1.40 in the linked first quarter of 2020. Return on average assets for the first six months of 2020 was 1.43 compared to 1.78 in the same period of 2019. The companys total capital as a percent of risk-weighted assets was 14.93 at June 30, 2020, compared to 14.49 at June 30, 2019 and 14.23 at March 31, 2020. The companys tangible common equity to tangible assets ratio1 was 11.35 at June 30, 2020, compared to 11.30 at June 30, 2019 and 11.99 at March 31, 2020.As announced on July 14, 2020, the board of directors approved a cash dividend for the second quarter of 0.30 per share, payable on August 5, 2020, to shareholders of record as of July 25, 2020. The second quarter dividend per share of 0.30 is unchanged from the dividend per share paid in the first quarter of 2020.Findlay continued, Our fortress balance sheet continued to strengthen in the first half of 2020 as both our capital and loan loss reserve levels grew. Our dividend reflects both the historical strength of our balance sheet and our confidence in the future.During the first quarter of 2020, the company repurchased 289,101 shares of its common stock for 10 million at a weighted average price per share of 34.63. Share repurchases under the repurchase plan were suspended in March with 20 million of authorization remaining available under the plan. No shares were repurchased under the plan during the second quarter of 2020. Average total loans for the second quarter of 2020 were 4.46 billion, an increase of 499.1 million, or 13, versus 3.96 billion for the second quarter 2019. Average PPP loans for the second quarter of 2020 were 458 million. Excluding PPP loans, average loans were 4.00 billion compared to 3.96 billion for the second quarter of 2019, an increase of 41.3 million, or 1. On a linked quarter basis, average total loans grew 401.2 million, or 10, from 4.06 billion for the first quarter of 2020. Average loans excluding PPP loans decreased by 56.5 million, or 1, on a linked quarter basis. Total loans outstanding grew 491.9 million, or 12, from 4.00 billion as of June 30, 2019 to 4.49 billion as of June 30, 2020. Total loans excluding PPP loans decreased by 62.7 million, or 2, as of June 30, 2020 as compared to June 30, 2019. On a linked quarter basis, total loans excluding PPP loans decreased by 149.8 million, or 4, as of June 30, 2020 as compared to the first quarter of 2020. The company believes that some borrowers initially reduced outstanding loans utilizing PPP proceeds and expects these loan outstandings will return as PPP proceeds are utilized.The Small Business Administration SBA and the United States Treasury Department formally announced the PPP on March 31, 2020 as part of the Coronavirus Aid, Relief, and Economic Security Act the CARES Act. At June 30, 2020, the company had 554.6 million of PPP loans outstanding. The yield on PPP loans was 2.66 for the second quarter of 2020, which reflects the combined impact of the 1.00 interest rate on PPP loans and net PPP loan fee accretion.Findlay added, Our efforts to support our customers with the PPP loan program continue. We believe that liquidity from PPP loans has provided our borrowers with critical support for their businesses and employees during this trying time and we are pleased to be able to provide it.Average total deposits were 4.70 billion for the second quarter of 2020, an increase of 396.1 million, or 9, versus 4.30 billion for the second quarter of 2019. On a linked quarter basis, average total deposits increased by 492.7 million, or 12. Total deposits grew 422.1 million, or 10, from 4.22 billion as of June 30, 2019 to 4.64 billion as of June 30, 2020. On a linked quarter basis, total deposits increased by 361.7 million, or 8 as of June 30, 2020 as compared to the first quarter 2020. In addition, total core deposits, which exclude brokered deposits, increased 612.1 million, or 15, from 4.00 billion at June 30, 2019 to 4.62 billion at June 30, 2020 due to growth in commercial deposits of 595.9 million, or 50 and growth in retail deposits of 166.9 million or 11 offset by decreases in public fund deposits of 150.7 million, or 12. On a linked quarter basis core deposits increased by 443.2 million, or 11 at June 30, 2020 as compared to the first quarter 2020 due to growth in commercial deposits of 401.1 million, or 29 and growth in retail deposits of 71.6 million, or 4 offset by a decrease in public funds of 29.4 million or 3. PPP loan proceeds to borrowers impacted the increase in deposits during the quarter as loan proceeds were deposited into borrower checking accounts at the bank. Management expects demand deposit balances to decrease over time as PPP loan proceeds are deployed by borrowers for payroll and other business operating needs.The companys net interest margin decreased 27 basis points to 3.10 for the second quarter of 2020 compared to 3.37 for the second quarter of 2019. The companys net interest margin excluding PPP loans was 3.171, or 7 basis points higher, and reflects a 20 basis point decline from 3.37 the second quarter of 2019. Linked quarter net interest margin excluding PPP loans decreased by 18 basis points to 3.17 from 3.35 for the first quarter 2020. The lower margin in the second quarter of 2020 was due to lower yields on loans and securities, partially offset by a lower cost of funds, driven by the Federal Reserve Bank decreasing the target Federal Funds Rate by 225 basis points since the second half of 2019, inclusive of two Federal Reserve Bank emergency cuts to the Federal Funds Rate during March 2020. The two emergency cuts reduced the Federal Funds Rate by 150 basis points and brought the Federal Funds Rate back to the zero bound range of 0.00 to 0.25. 