Net income rose 9% and diluted EPS 11% to a record $1.14 while funding costs fell faster than asset yields 8-K. A larger charge-off and a growing watch list temper the result.
Lakeland Financial Corporation · Q3 2026 · Reported 26 Oct 2026 · US
Key figures
Million USD | Q3 2026 | Q3 2025 | Change |
|---|---|---|---|
Net revenues | 73.00 | 69.03 | +5.7 % |
Net income | 28.86 | 26.40 | +9.3 % |
Diluted EPS | 1.14 USD/share | 1.03 USD/share | +10.7 % |
Net interest income | 60.70 | 56.10 | +8.2 % |
Net interest margin | 3.58 % | 3.50 % | +0.08 pp |
Provision for credit losses | 1.20 | 2.00 | -40.0 % |
Loans | 5,680.00 | 5,250.00 | +8.2 % |
Efficiency ratio | 49.5 % | 50.7 % | -1.2 pp |
Net margin | 39.5 % | 38.3 % | +1.3 pp |
Figures in USD, as reported. Margins are computed from the reported lines. Changes in ratios are in percentage points.
Funding costs falling faster than asset yields lifted the margin in a record quarter
Net income was $28.9 million, up 9.3% from a year earlier, and diluted EPS rose 10.7% to $1.14 8-K. Diluted shares fell by 583,478, or 2%, on repurchases, so buybacks added to the EPS gain 8-K. Net interest income rose 8.2% to $60.7 million, and net interest margin was 3.58%, against 3.50% a year earlier and 3.49% in the prior quarter 8-K.
Management attributes the margin gain to deposit pricing that outpaced the decline in earning asset yields. Funding costs fell 24 basis points to 2.13%, while asset yields fell 16 basis points to 5.71% 8-K. Loans grew 8% to $5.68 billion, led by commercial and industrial loans, up 12% 8-K.
A larger charge-off and a growing watch list qualify the lower provision
The provision fell to $1.2 million from $2.0 million a year earlier 8-K. Net charge-offs rose to $3.0 million from $384,000, including a $2.8 million partial charge-off on a nonperforming commercial credit that was fully reserved in prior quarters 8-K. Annualized net charge-offs were 0.21% of average loans, against 0.03% a year earlier and 0.00% in the prior quarter 8-K.
The allowance to loans ratio fell to 1.21% from 1.30% a year earlier 8-K. Watch list loans reached 3.56% of total loans, up 56 basis points from 3.00% a year earlier and 1 basis point from the prior quarter 8-K. Management calls asset quality trends stable with historically low troubled loan totals 8-K.
Expense growth and unrealized securities losses leave less cushion
The efficiency ratio improved to 49.5% from 50.7% a year earlier but worsened from 48.6% in the prior quarter 8-K. Noninterest expense grew 3% year on year to $36.1 million, and noninterest income fell 5% to $12.3 million 8-K. Management cites investment in staff, branches and technology 8-K.
The tangible common equity to tangible assets ratio, a non-GAAP measure, fell to 10.11% from 10.79% a year earlier 8-K. The release attributes this mainly to unrealized losses on available-for-sale securities, which reached $213.9 million after an 85 basis point rise in the 10-year Treasury yield 8-K. Excluding accumulated other comprehensive income, the adjusted ratio was 12.32% (non-GAAP), against 12.57% a year earlier 8-K.
What to watch next
Whether watch list loans, at $202.0 million and 28% above a year earlier, convert into further charge-offs beyond the $2.8 million partial write-down 8-K.
Whether commercial and industrial loan growth continues and commercial deposits recover. They were down 3% from a year earlier, and management says commercial originations have outpaced paydowns for four quarters 8-K.
Sources
Produced by Clarifo Research with the Clarifo financial research engine from the company's public filings. AI was used in parts of the analysis and drafting. Figures are checked automatically against the filings they come from. This is not investment advice.