LKFN: A Great Bank at the Wrong Price

A $182 million securities albatross hangs over one of Indiana's most efficient franchises — and the market isn't pricing it in.

 

The Setup

Lake City Bank is one of the most efficiently run community banks in America. Its efficiency ratio of 49.58% sits far below a peer range of 58–64%. Its return on assets of 1.55% is well above the peer range of 0.95–1.18%. The loan portfolio is squeaky clean — nonaccruals at 0.32%, past dues at 0.35%, both well below peers. Capital is strong. The balance sheet is asset-sensitive, positioned to benefit from rising rates.

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On the fundamentals alone, this looks like a great bank to buy. It isn’t — or at least not at this price.

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​The Problem Nobody Is Pricing

The remainder of this analysis is available to paid subscribers. See the rest of the analysis here: LKFN: Lakeland Financial Corporation: Full Analysis