Lakeland Financial Boosts Dividend, Signaling Strength in Indiana

WARSAW, IN – January 13, 2026 – Lakeland Financial Corporation (Nasdaq Global Select/LKFN), the parent company of Lake City Bank, today announced a 4% increase in its quarterly cash dividend, signaling confidence in its financial stability and a continued commitment to shareholder returns. The Board of Directors approved a first-quarter dividend of $0.52 per share, up from the $0.50 per share paid throughout 2025.

The dividend is payable on February 5, 2026, to shareholders of record as of January 25, 2026. This marks the twelfth consecutive year the company has increased its dividend, a testament to its long-term performance.

“Our ability to deliver another healthy increase in the common stock dividend reflects the strength of our capital foundation and our disciplined balance sheet management strategy over a very long period of time,” said David M. Findlay, Chairman and Chief Executive Officer, in the company's official announcement.

A Pattern of Prudent Growth and Shareholder Returns

The dividend hike is not an isolated event but rather the continuation of a long-standing corporate strategy. For over a decade, Lakeland Financial has consistently increased its payout, reflecting a deliberate approach to enhancing shareholder value. The company’s dividend payout ratio hovers around 52.7%, indicating that it distributes just over half its earnings to shareholders. This figure is widely considered sustainable, leaving substantial capital for reinvestment into the business, funding growth, and weathering potential economic shifts.

With a current dividend yield of approximately 3.5%, Lakeland Financial offers a return that is notably more attractive than the bottom quartile of dividend-paying stocks in the U.S. market. While not at the highest end of the financial services sector, the yield represents a solid, reliable income stream, backed by a history of consistent growth. This track record is a key reason the company maintains significant institutional ownership, with large investors holding over 83% of its stock.

Thriving in a Resilient Indiana Economy

Lakeland Financial's success is deeply intertwined with the economic health of its home state. The Indiana economy has demonstrated notable resilience. While its growth is projected to be more moderate than the national average in 2026, the state has consistently maintained an unemployment rate lower than the rest of the country, standing at 3.7% in late 2025 compared to a national rate of 4.4%. A higher-than-average labor force participation rate further points to a stable and active workforce.

This healthy employment landscape provides a solid foundation for regional banks like Lake City Bank, fostering a reliable deposit base and a steady demand for loans. Economic development initiatives across the state have also been robust. The Indiana Economic Development Corporation (IEDC) reported record-breaking investment and job creation leading into this period, with job growth increasingly shifting toward the services sector. This diversification, coupled with continued strength in construction, creates a favorable operating environment for financial institutions supporting local businesses and development projects.

Strong Roots Fueling Local Communities

As a community-focused institution founded in 1872, Lake City Bank's financial strength directly translates into support for the Central and Northern Indiana communities it serves. With $6.9 billion in assets and a network of 55 branches, the bank's 'community banking model' emphasizes building long-term relationships with retail and commercial clients.

The positive economic conditions in its primary markets are a boon for the bank's core operations. The Indianapolis metropolitan area, a key region for Lake City Bank, has shown impressive economic momentum, with real GDP and total wage growth outpacing national figures. Major development projects, including expansions of convention facilities and new university campuses, are expected to further boost the regional economy into 2026.

Furthermore, Indiana's real estate market remains dynamic. Rising home prices and a surge in multi-family construction across metropolitan areas create significant opportunities for mortgage and commercial lending. By maintaining a strong capital position, Lake City Bank is well-equipped to fund this growth, providing the necessary financing for new homes, businesses, and infrastructure that benefit the local populace.

A Disciplined Strategy Earns Analyst Confidence

The company’s mantra of “disciplined balance sheet management” is more than just a talking point; it is a core operational principle validated by its financial structure and recognized by market analysts. A key indicator of this conservative approach is the company's remarkably low debt-to-equity ratio of 0.08, signifying minimal reliance on debt and a lower overall financial risk profile.

This prudence has earned the confidence of the financial community. Following the announcement, analyst sentiment remains generally positive, with several firms maintaining “Outperform” or “Buy” ratings and price targets in the $64 to $66 range. Analysts highlight the company's strong net margin and robust financial position as key strengths. From a valuation perspective, key metrics like the price-to-earnings and price-to-book ratios are near historical lows, suggesting to some that the stock may be attractively priced for its performance.

Even with a minor earnings-per-share miss in the previous quarter, attributed to higher-than-expected expenses, the bank’s solid fee income and strong underlying fundamentals have kept analyst outlooks largely stable. The consistent dividend growth, backed by a conservative and profitable strategy, reinforces the view that Lakeland Financial is effectively navigating the economic landscape to deliver sustainable, long-term value to both its shareholders and the communities it serves.