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Margin Expansion Lifts Q3 at Lakeland and Southern Michigan as Credit Trends Diverge

Margin gains drove profits across both lenders, with Southern Michigan showing rising nonperforming loans alongside a higher reserve.

Overview

  • Lakeland Financial reported Q3 net income of $26.4 million, up 13% year over year, as net interest income rose 14% and net interest margin improved to 3.50% from 3.16%.
  • Lakeland cited reduced funding costs, over $400 million in loan originations, and higher commercial and wealth advisory fees as key drivers, and it offered no forward guidance.
  • Southern Michigan Bancorp posted Q3 net income of $3.019 million, a 16.7% increase, with tax‑equivalent net interest margin of 3.21% for the first nine months versus 2.94% a year earlier.
  • Southern Michigan’s CEO highlighted record levels of loans, deposits, and total assets at quarter end tied to market expansion and investment in staff.
  • Asset quality at Southern Michigan weakened, with nonperforming loans at 1.03% of total loans and an allowance of $14.41 million equal to 1.17% of loans, while year‑to‑date net charge‑offs totaled $29,000.