Executive Summary

Q3 2025 delivered solid core performance: net income $26.4M and diluted EPS $1.03, up 13% y/y; revenue (NII+noninterest income) rose 13% y/y to ~$69.0M and 4% q/q, driven by an 8 bp linked-quarter NIM expansion to 3.50% and fee growth .
Asset quality strengthened materially: nonaccrual loans fell 68% y/y to $18.7M and NPAs/Assets improved to 0.28%; watch list loans dropped to 3.00% of total loans—lowest in 23 years; provision reduced to $2.0M .
Capital remained robust: CET1 15.06% and Total RBC 16.22%; tangible book value per share increased to $28.93; dividend was raised 4% to $0.50/share in Q3 .
Versus S&P Global consensus, Q3 EPS of $1.03 was slightly below the $1.042 consensus* and “Revenue” missed $69.2M* consensus (SPGI definition) with $67.0M* actual; company-reported revenue (NII+noninterest income) was ~$69.0M (definition differences) .
Catalysts: continued NIM expansion from deposit repricing outpacing loan yield resets, ongoing Indianapolis footprint growth (55th branch opened), and sustained improvement in criticized assets .

What Went Well and What Went Wrong

What Went Well
- Net interest margin expanded meaningfully: +34 bps y/y to 3.50% (+8 bps q/q), as deposit costs fell faster than earning asset yields; deposit beta 43% vs loan beta 20% in the easing cycle .
- Fee income momentum: noninterest income +9% y/y and +13% q/q; strength in loan/service fees, wealth advisory, brokerage, and BOLI income .
- Credit cleanup: nonaccrual loans down 68% y/y to $18.7M; watch list loans to total loans at 3.00%, lowest in 23 years; NPAs/Assets improved to 0.28% .
- Quote: “Healthy expansion in our net interest margin accompanied by great noninterest income growth and consistent loan growth delivered a strong quarter…” — CEO David M. Findlay .
What Went Wrong
- Operating expense pressure: noninterest expense +15% y/y and +15% q/q, largely from higher performance-based incentive accruals and investments in people/technology; efficiency ratio rose to 50.7% from 45.9% in Q2 .
- Seasonal deposit dynamics: total deposits declined 2% q/q on seasonal public funds outflows, partially offset by higher brokered deposits .
- Estimates optics: Using S&P Global’s “Revenue” basis, revenue was below consensus* and EPS was modestly below consensus* despite company-defined revenue growth (definition differences) .

Financial Results

Metric	Q3 2024	Q2 2025	Q3 2025
Net Interest Income ($M)	$49.27	$54.88	$56.07
Noninterest Income ($M)	$11.92	$11.49	$12.95
Total Revenue (NII + Noninterest) ($M)	$61.19	$66.36	$69.03
Provision for Credit Losses ($M)	$3.06	$3.00	$2.00
Net Income ($M)	$23.34	$26.97	$26.40
Diluted EPS ($)	$0.91	$1.04	$1.03
Net Interest Margin (%)	3.16%	3.42%	3.50%
Efficiency Ratio (%)	49.67%	45.86%	50.65%
ROA (%)	1.39%	1.57%	1.53%
ROE (%)	13.85%	15.52%	14.60%
Loans, End of Period ($B)	$5.08	$5.23	$5.25
Deposits, End of Period ($B)	$5.84	$6.18	$6.02

Notes: Company “Revenue” = Net Interest Income + Noninterest Income; yoy growth references: revenue +13% y/y and +4% q/q per company .

KPIs and Credit Quality

KPI	Q3 2024	Q2 2025	Q3 2025
Nonaccrual Loans ($M)	$57.55	$30.63	$18.70
NPAs / Assets (%)	0.87%	0.45%	0.28%
Net Charge-offs ($M)	$0.14	$28.88	$0.38
NCOs / Avg Loans (%)	0.01%	2.22%	0.03%
ACL / Loans (%)	1.65%	1.27%	1.30%
Watch List Loans / Total Loans (%)	5.27%	3.67%	3.00%
CET1 (%)	14.49%	14.73%	15.06%
Total Capital (%)	15.74%	15.86%	16.22%
Tangible BVPS ($)	$27.07	$27.48	$28.93

Loan and Deposit Mix (Q3 2025 snapshot)

Loans: Commercial (incl. CRE/MF) 87.7%; Consumer 12.3%. Notable categories: CRE & multi-family $2.66B (50.6%); C&I $1.52B (28.9%); Consumer 1-4 family $0.53B (10.2%) .
Deposits: Core deposits 97%; Public funds 30.5%; Commercial 38.0%; Retail 28.6%; Brokered 2.9% .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Formal Financial Guidance	2025	None disclosed	None disclosed	Maintained (no formal guidance)
Dividend per Share	Q3 2025	$0.48 (Q3’24 actual paid)	$0.50 (announced Oct 14, 2025; payable Nov 5)	Raised 4%

No explicit quantitative guidance was provided on revenue, margins, OpEx, OI&E, or tax rate in the Q3 materials .

Earnings Call Themes & Trends

Topic	Q1 2025 (Prior-2)	Q2 2025 (Prior-1)	Q3 2025 (Current)	Trend
Net Interest Margin & Rate Cycle	NIM 3.40%; deposit costs down; mix stabilization; Fed easing aided NIM	NIM 3.42%; prepayment fee +3 bps; deposit costs down 49 bps y/y	NIM 3.50%; deposit beta 43% vs loan beta 20% in easing; +8 bps q/q	Improving
Asset Quality	NPA spike from a single $43.3M credit; higher provision	Resolution progressed; $28.6M charge-off; NPAs fell to 0.45%	Further improvement; NPAs 0.28%; watch list loans 3.00% (23-yr low)	Improving
Deposits/Public Funds	Core deposits +7% y/y; uninsured deposit metrics improved	Deposits +7% y/y; public funds drove growth; core 98%	Seasonal public funds outflow; core still 97%	Stable with seasonality
Expenses & Efficiency	Elevated OpEx from incentives/tech; ER 51.4%	ER improved to 45.9%; OpEx down q/q	Incentive accruals/tech spend drove OpEx +15% q/q; ER 50.7%	Mixed
Expansion/Market Development	Buyback reauthorized; loan growth; Indy focus	Repurchased 30.3K shares; capital to support growth	Opened 55th branch (Westfield); Indy footprint build-out	Expanding
Technology / AI	—	—	“AI and data gathering and analysis is playing an increasingly important role” (slides)	Increasing focus
Macro/Tariffs	Monitoring tariff impacts; analysis underway	Still monitoring; “less concern” than earlier	“Continues to be concern” around tariff uncertainty	Watching

Note: Transcript not available in repository; themes compiled from press releases and Q3 slide deck -.

Management Commentary

Strategy and performance: “Healthy expansion in our net interest margin accompanied by great noninterest income growth and consistent loan growth delivered a strong quarter…” — David M. Findlay, Chairman & CEO .
Deposits and market share: “Core deposit growth during 2025 continues to fund loan growth… our deposit market share percentage increased in Indiana… expansion plans in Indianapolis present an opportunity to continue to gain deposit market share…” — Lisa M. O’Neill, EVP & CFO .
Capital and growth: “Our capital position continues to strengthen… provide a solid foundation for future balance sheet growth… support our common dividend… and organic growth strategy.” — Kristin L. Pruitt, President .
Fee income: “We continue to focus on overall revenue growth driven by a complementary mix of net interest income and noninterest income… We continue to add revenue production positions…” — Findlay .

Q&A Highlights

The Q3 2025 earnings call transcript was not available in the document repository. We reviewed the company’s Q3 slide deck and press release; no direct Q&A excerpts could be sourced. We will update this section upon transcript availability .

Estimates Context

Metric	S&P Global Consensus*	Actual*	Surprise*
EPS (Primary)	$1.042	$1.03	-$0.012
Revenue ($M)	$69.20	$67.03	-$2.17

Values retrieved from S&P Global.*
Notes: S&P Global’s “Revenue” definition for banks may differ from company-reported “revenue” (NII + noninterest income). Company-reported Q3 revenue approximated $69.0M (NII $56.07M + noninterest income $12.95M) .

Key Takeaways for Investors

NIM expansion remains the primary earnings driver; deposit repricing continues to outpace loan yield resets in the current easing cycle, supporting revenue growth and offsetting modest earning asset yield pressure .
Asset quality normalization is a clear positive: after the Q2 charge-off, nonaccruals and NPAs stepped down again in Q3; criticized balances at multi-decade lows imply lower forward credit costs absent new shocks .
Operating leverage is a near-term focus: higher incentive accruals and tech/customer investments lifted expenses in Q3, pushing the efficiency ratio to ~51%; watch for moderation in Q4 as seasonality and accruals normalize .
Funding is resilient despite seasonal public funds outflows: core deposits remain 97% of total; deposit betas appear to be easing and uninsured deposit metrics improved y/y .
Capital provides flexibility: CET1 at 15.06% and dividend growth (+4%) support continued organic growth and shareholder returns; management has used the buyback selectively .
Near-term stock drivers: continued NIM expansion and further credit improvement are likely positives; expense trajectory and seasonality in public funds are key watch items; headline “miss” vs S&P consensus reflects revenue-definition differences that investors should contextualize .
Medium-term thesis: Indianapolis market expansion, technology/AI-enabled execution, and a fortress balance sheet position LKFN for steady spread and fee growth as rates stabilize and Indiana macro tailwinds persist -.

Citations:
- Q3 2025 press release, financials, and highlights: **[721994_0d71467ddd3b4ec0b5b3cbfb616ec516_0]** **[721994_0d71467ddd3b4ec0b5b3cbfb616ec516_1]** **[721994_0d71467ddd3b4ec0b5b3cbfb616ec516_2]** **[721994_0d71467ddd3b4ec0b5b3cbfb616ec516_3]** **[721994_0d71467ddd3b4ec0b5b3cbfb616ec516_5]** **[721994_0d71467ddd3b4ec0b5b3cbfb616ec516_6]** **[721994_0d71467ddd3b4ec0b5b3cbfb616ec516_7]** **[721994_0d71467ddd3b4ec0b5b3cbfb616ec516_9]** **[721994_0d71467ddd3b4ec0b5b3cbfb616ec516_10]** **[721994_0d71467ddd3b4ec0b5b3cbfb616ec516_11]** **[721994_0d71467ddd3b4ec0b5b3cbfb616ec516_14]** **[721994_0d71467ddd3b4ec0b5b3cbfb616ec516_15]** **[721994_0d71467ddd3b4ec0b5b3cbfb616ec516_18]** **[721994_0d71467ddd3b4ec0b5b3cbfb616ec516_19]** **[721994_0d71467ddd3b4ec0b5b3cbfb616ec516_20]** **[721994_0d71467ddd3b4ec0b5b3cbfb616ec516_21]**
- Form 8-K (Item 2.02) and attached exhibits/tables: **[721994_0000721994-25-000224_lkfn-20251027.htm:1]** **[721994_0000721994-25-000224_lkfn-20251027exhibit991.htm:12]** **[721994_0000721994-25-000224_lkfn-20251027exhibit991.htm:13]** **[721994_0000721994-25-000224_lkfn-20251027exhibit991.htm:15]** **[721994_0000721994-25-000224_lkfn-20251027exhibit991.htm:16]** **[721994_0000721994-25-000224_lkfn-20251027exhibit991.htm:17]** **[721994_0000721994-25-000224_lkfn-20251027exhibit991.htm:18]** **[721994_0000721994-25-000224_lkfn-20251027exhibit991.htm:19]** **[721994_0000721994-25-000224_lkfn-20251027exhibit991.htm:20]**
- Q2 2025 press release for prior-quarter context: **[721994_954434355c9442048e393d869ed8533a_0]** **[721994_954434355c9442048e393d869ed8533a_1]** **[721994_954434355c9442048e393d869ed8533a_2]** **[721994_954434355c9442048e393d869ed8533a_3]** **[721994_954434355c9442048e393d869ed8533a_5]** **[721994_954434355c9442048e393d869ed8533a_6]** **[721994_954434355c9442048e393d869ed8533a_7]** **[721994_954434355c9442048e393d869ed8533a_8]** **[721994_954434355c9442048e393d869ed8533a_9]** **[721994_954434355c9442048e393d869ed8533a_16]**-**[721994_954434355c9442048e393d869ed8533a_23]**
- Q1 2025 press release for prior-2-quarter context: **[721994_0557bc4d5fd04c06b3500ffa1de80808_0]** **[721994_0557bc4d5fd04c06b3500ffa1de80808_1]** **[721994_0557bc4d5fd04c06b3500ffa1de80808_2]** **[721994_0557bc4d5fd04c06b3500ffa1de80808_3]** **[721994_0557bc4d5fd04c06b3500ffa1de80808_4]** **[721994_0557bc4d5fd04c06b3500ffa1de80808_5]** **[721994_0557bc4d5fd04c06b3500ffa1de80808_6]** **[721994_0557bc4d5fd04c06b3500ffa1de80808_7]** **[721994_0557bc4d5fd04c06b3500ffa1de80808_11]**-**[721994_0557bc4d5fd04c06b3500ffa1de80808_20]**
- Q3 2025 slide deck for themes and technology commentary: **[0000721994_2204861:6]** **[0000721994_2204861:7]** **[0000721994_2204861:8]** **[0000721994_2204861:11]** **[0000721994_2204861:12]** **[0000721994_2204861:15]**
- Branch/technology center press releases (Q3 2025): **[721994_d020643828914a378f7cf0109cb9198a_0]** **[721994_d09f456e73a144aeb7968e76efdd6054_0]**

LAKELAND FINANCIAL CORP (LKFN)·Q3 2025 Earnings Summary