Forward-Looking Information

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Rafe Miles Daniels
5 years ago
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1 2017 Year in Review

2 Forward-Looking Information This presentation 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, future performance and business of the Company. Forward-looking statements are generally identifiable by the use of words such as believe, expect, anticipate, estimate, could, and other similar expressions. All statements in this presentation, including forward-looking statements, speak only as of today s date, and the Company undertakes no obligation to update any statement in light of new information or future events. A number of factors, many of which are beyond the ability of the Company to control or predict, could cause actual results to differ materially from those in its forward-looking statements. Additional information is included in the Company s filings with the Securities and Exchange Commission. Factors that could have a material adverse effect on the Company s financial condition, results of operations and future prospects can be found in the Risk Factors section of the prospectus included in the Registration Statement on Form S-1 filed on October 26, 2009, as amended under Item 1A Risk Factors in the Company s Annual Report on Form 10-K for the year ended December 31, 2008 and elsewhere in the Company s periodic and current reports filed with the Securities and Exchange Commission. These factors include, but are not limited to, the effects of future economic, business and market conditions and changes, domestic and foreign, including competition, governmental policies and seasonality; legislative and regulatory changes, including changes in banking, securities and tax laws and regulations and their application by Company regulators, and changes in the scope and cost of FDIC insurance and other coverages; the risks of changes in interest rates on the levels, composition and costs of deposits, loan demand and other interest sensitive assets and liabilities; the failure of assumptions and estimates underlying the establishment of reserves for possible loan losses, analysis of capital needs and other estimates; changes in borrowers credit risks and payment behaviors; and changes in the availability and cost of credit and capital in the financial markets.

3 Long Term Success for Shareholders LTM ROE >12% (4) 4 Institutions (including LKFN) Consecutive Increases in Net Income Since 2009 (3) 12 Institutions Profitable for the Last 10 Years (2) 77 Institutions Exchange Traded Depositories with Assets Between $1B and $5B (1) 166 Institutions Source: S&P Global Market Intelligence. Financial data is as of December 31, (1) Includes banks and thrifts traded on the NYSE, NYSEAM or NASDAQ as of 3/13/18; excludes merger targets. (2) Defined as having positive net income before extraordinary items and preferred dividends for each of the last 10 years (calen dar years ended December 31, 2008 through December 31, 2017). Net income before extraordinary items is defined by S&P Global Market Intelligence as GAAP net income, after taxes, minority interest, and other after tax items, but before any extraordinary items. (3) Defined as consecutive increases in net income before extraordinary items for each of the years ending December 31, 2010, 2011, 2012, 2013, 2014, 2015, 2016 and (4) 2017Q4 net income excludes any extraordinary items, including any revaluation of net deferred tax assets due to tax reform.

4 $2,707 Net Income $61,467 (1) A Quarter Century of Organic Growth (000 s) $70,000 Record Net Income for 28 of 29 Years $60,000 $50,000 $40,000 Compound Annual Growth Loans = 12% Deposits = 11% Net Income = 13% (1) Earnings Per Share = 13% (1) $30,000 $20,000 $10,000 $0 Net Income (1) Excludes the income tax provision of $4.1 million related to the 2017 revaluation of deferred tax assets

Positioned for Growth Organic Growth Potential in Mature and New Markets Market Data Warsaw 1872 22

5 Positioned for Growth Organic Growth Potential in Mature and New Markets Market Data Warsaw offices Elkhart offices South Bend offices Fort Wayne offices Indianapolis offices

6 Indianapolis Market Average Loan Growth (000 s) $500,000 $492,418 $450,000 $400,000 $350,000 $340,242 $300,000 $250,000 $200,000 $223,732 $244,059 $150,000 $100,000 $115,198 $98,426 $143,256 $50,000 $ YTD Average Loans

7 Indianapolis Market Average Deposit Growth (000 s) $600,000 $500,000 $537,263 $562,529 $400,000 $300,000 $285,729 $200,000 $169,619 $100,000 $78,699 $0 $755 $1, YTD Average Deposits

8 Long-Term Mission Lake City Bank Will be the Acknowledged and Recognized Leader in Indiana Community Banking Management Committee Board of Directors

9 2018 Strategic Plan A Continued Commitment to Execution, Culture and Performance

10 Lake City Bank Culture Our Core Values start with honesty Lake City University drives our culture Our community involvement is real and critical to our strategy Our culture has not been diluted by acquisition High Quality Team Members

11 Organizational Vision We re driven by the growth of shareholder value and the delivery of competitive banking services through a progressive business model that preserves the principles and ideals of a community bank.

12 Shareholder Value Creation of shareholder value will result from the successful long-term execution of our Mission. Long-Term Mission Execution Key: While important, we will not allow short term financial results to impact our commitment to the Long Term Mission.

13 Financial Performance

14 ROA ROE and ROTE Income Performance Metrics LKFN Performance Exceeds National and Indiana Peers 14.00% 1.90% 12.55% 12.76% 12.98% 12.45% 12.61% 12.82% 13.00% 1.70% 12.30% 12.50% 12.77% 12.26% 12.52% 12.72% 12.00% 1.50% ROE and ROTE LTM Peer Data 1 National Indiana ROE 8.39% 9.55% ROTE 9.30% 10.57% 11.00% 10.00% 1.30% 1.29% 1.32% 1.29% 1.29% 1.29% 9.00% 8.00% 1.10% 1.19% 7.00% 0.90% ROA LTM Peer Data 1 National Indiana ROA 0.88% 1.04% 6.00% 5.00% 0.70% % Return on Average Assets Return on Average Equity Return on Average Tangible Common Equity 1 Source KBW Price Performance Review September 2017

15 Net Income EPS (000 s) Net Income and EPS Record Net Income and EPS $70,000 $2.80 $61,467 $60,000 $50,000 $40,000 $35,394 $38,839 $43,805 $1.74 $46,367 $1.84 $52,084 $2.05 $57,330 $2.23 $2.40 $2.30 $1.80 $30,000 $1.43 $1.55 $1.30 $20,000 $0.80 $10,000 $ (pre-tax reform) Net Income Diluted EPS (1) The compound annual growth rate for 2012 to 2017 utilizes net income for 2017, adjusted to exclude the income tax provision of $4.1 million related to the 2017 revaluation of deferred tax assets Net Income Growth pre-tax reform 18% 2017 Net Income Growth 10% 2017 Diluted EPS Growth 9% $0.30

16 Loans Loans to Deposit Ratio (000 s) $4,000,000 Average Loans Commercial Emphasis Drives Growth 150% $3,500,000 $3,000,000 $2,500,000 $2,216,131 $2,343,422 $2,650,678 $2,885,568 $3,225,635 $3,610, % 130% 120% 110% $2,000, % $1,500,000 $1,000,000 87% 93% 95% 93% 93% 96% 90% 80% 70% $500,000 60% $ % Retail Commercial Loans to Deposits 2017 YOY Growth 12%

17 Loan Breakdown C&I Drives Lending Business Commercial RE - Multifamily $173,715 5% Commercial RE - Construction $224,474 6% Agri-business - Agriculture $382,841 10% Other Commercial $124,076 3% Residential Mortgage $179,302 5% Home Equity $181,865 5% Installment - Other Consumer $87,847 2% Commercial RE - Nonowner Occupied $508,121 13% Commercial RE - Owner Occupied $538,603 14% Commercial & Industrial $1,418,681 37% $3.8 billion as of December 31, 2017 (000 s) Commercial 88% Consumer 12%

18 Deposits Deposits as a Percent of Total Funding (000 s) Average Deposits Core Deposits* Fund Organic Loan Growth $4,000,000 $3,757, % $3,500,000 $3,477, % $3,000,000 $2,500,000 $2,505,195 $2,505,340 $2,797,929 $3,088, % 120% 110% $2,000,000 94% 93% 95% 97% 97% 95% 100% $1,500,000 90% $1,000,000 80% 70% $500,000 60% $ % Average Deposits % of Funding 2017 YOY Growth 8% *Core Deposits are defined as total deposits less brokered deposits

19 60% Efficiency Ratio Revenue Growth is Primary Driver of Low Efficiency Ratio Constant investment in technology and facilities 55% Indianapolis North and South Bend Downtown Expansion Indianapolis Fishers and Clearwater Expansion Indianapolis Michigan Road and Fort Wayne Downtown Expansion Indianapolis Greenwood Expansion 50% 52% 51% 52% 50% 50% 45% 47% 48% 48% 46% Indianapolis Data Center 40%

20 Dividend per Share Dividend Yield Stable Healthy Dividend Significant Increase in Dividend Reflects Strength of Balance Sheet $1.00 Dividend Payout Ratio of 38% 4.00% $0.90 $0.80 $0.73 $ % $0.70 $0.60 $0.50 $0.49 $0.55 $ % 2.50% $0.40 $0.30 $0.20 $ % 2.28% 1.99% 2.10% 1.95% 1.77% 2.00% 1.50% $0.10 (1) (1) Dividend Per Share - split adjusted Dividend Yield - using average stock price 1.00% (1) The special fourth quarter dividend paid in 2012 is included in Growth 16%

21 Total Return (%) LKFN Shareholder Value Total Return Performance from 12/31/00 to 1/18/18 2, ,796.49% 1, , % % % (500.00) LKFN SNL U.S. Bank S&P 500 S&P 500 Bank Source: SNL database

Lakeland Financial Corporation. 4 th Quarter 2017 LKFN. A Proven History of Shareholder Value Creation And Commitment to Our Communities L I S T E D

Lakeland Financial Corporation A Proven History of Shareholder Value Creation And Commitment to Our Communities 4 th Quarter 2017 LKFN L I S T E D David M. Findlay President & Chief Executive Officer david.findlay@lakecitybank.com