Executive Vice President and

                                                                   Chief Financial Officer

                                                                   (574) 267-9125

                                                                    lisa.oneill@lakecitybank.com

Lakeland Financial Reports

Record Performance

Second Quarter Net Income Increases 13 Percent

Warsaw, Indiana (July 25, 2016) – Lakeland Financial Corporation (Nasdaq Global Select/LKFN), parent company of Lake City Bank, today reported record quarterly net income of $12.8 million for the second quarter of 2016, an increase of 13%, versus $11.4 million for the second quarter of 2015. Diluted net income per common share of $0.76 for the second quarter of 2016 also represents a quarterly record and an increase of 12%, versus $0.68 for the comparable period of 2015. On a linked-quarter basis net income increased by 4% or $524,000 from $12.3 million for the first quarter ended March 31, 2016.

The company further reported record net income of $25.1 million for the six months ended June 30, 2016 versus $22.5 million for the comparable period of 2015, an increase of 11%. Diluted net income per common share was also a record for the period and increased 10% to $1.48 for the six months ended June 30, 2016 versus $1.34 for the comparable period of 2015.

David M. Findlay, President and CEO, commented, "The Lake City Bank team is very proud of this record quarterly and year-to-date performance. We continue to be focused on the healthy growth of our balance sheet and taking care of clients in our communities each and every day. It's a combination that has produced disciplined and strategic growth in our Indiana markets over a long period of time."

Highlights for the quarter are noted below:

2^nd Quarter 2016 versus 2^nd Quarter 2015 Highlights:

·	Organic average loan growth of $340 million or 12%

·	Average deposit growth of $371 million or 12%

·	Net interest income increase of $3.2 million or 12%

·	Continued strong asset quality with nonperforming assets to total assets at 0.24%

·	Tangible common equity increase of 12%

2^nd Quarter 2016 versus 1^st Quarter 2016 Highlights:

·	Organic average loan growth of $103 million or 3%

·	Core deposit growth of $160 million or 5%

·	Net interest income increase of $691,000 or 2%

·	Noninterest income increase of $1.0 million or 15%

·	Continued strong asset quality with loan loss reserve to nonperforming loans at 464%

Findlay noted, "We are particularly pleased with the continued loan and deposit growth that our retail and commercial banking teams are producing. At our core, we understand that an important part of our mission is to provide our clients with competitively priced and structured products and this overall growth is reflective of our success in delivering on this front."

As previously announced, the board of directors approved a cash dividend for the second quarter of $0.28 per share, payable on August 5, 2016, to shareholders of record as of July 25, 2016. The quarterly dividend represents a 14% increase over the $0.245 quarterly dividends paid in the last three quarters of 2015 and in the first quarter of 2016.

On July 13, 2016, the company further announced that the board of directors approved a three-for-two common stock split that will be paid on August 5, 2016 in the form of a stock dividend to shareholders of record as of July 25, 2016. All per share data presented in this press release is prepared on a pre-split basis.

Findlay observed, "We've built a strong balance sheet with a conservative capital position that also has allowed us to pay a consistently healthy dividend. We further believe that the stock split is a reflection of our long-term value creation for shareholders. Over the past 10 years, our total return for shareholders, which reflects stock price performance and dividends, has increased by approximately 175%."

Return on average total equity for the first six months of 2016 was 12.43% compared to 12.25% in the prior year period. Return on average assets for the first six months of 2016 was 1.29% compared to 1.30% in the same period of 2015. Total capital as a percent of assets was 13.65% at June 30, 2016, compared to 13.83% at June 30, 2015 and 13.72% at March 31, 2016. The company's tangible common equity to tangible assets ratio was 10.57% at June 30, 2016, compared to 10.44% at June 30, 2015 and 10.61% at March 31, 2016.

Average total loans for the second quarter of 2016 were $3.19 billion, an increase of $340.2 million, or 12%, versus $2.85 billion for the comparable period of 2015. Total loans outstanding grew $304.5 million, or 11%, from $2.89 billion as of June 30, 2015 to $3.20 billion as of June 30, 2016. On a linked quarter basis, average total loans increased by $103.2 million, or 3%, from $3.09 billion for the first quarter of 2016 to $3.19 billion for the second quarter of 2016.

Average total deposits for the second quarter of 2016 were $3.44 billion, an increase of $371.0 million, or 12%, versus $3.07 billion for the corresponding period of 2015. Total deposits grew $383.3 million, or 13%, from $3.02 billion as of June 30, 2015 to $3.40 billion as of June 30, 2016. In addition, total core deposits, which exclude brokered deposits, increased $391.3 million, or 13%, from $2.90 billion at June 30, 2015 to $3.29 billion at June 30, 2016.

The company's net interest margin was 3.24% in the second quarter of 2016, compared to 3.18% for the second quarter of 2015. The higher margin in the second quarter of 2016 was due to higher yields on both loans and securities, partially offset by a higher cost of funds. The net interest margin was 3.26% in the linked first quarter of 2016. On a quarter-linked basis, cost of funds increased by 3 basis points but was offset by improved earning asset yields of 1 basis point. The company's net interest margin for the six months ended June 30, 2016 was 3.24% compared to 3.23% in the prior year six month period.

Findlay further commented, "The absence of any action by the Federal Reserve Bank will continue to create challenges for the industry, and for Lake City Bank. While we are pleased with our net interest margin performance in 2016, we believe, pressure will continue until we see some relief in the form of rate action by the Federal Reserve Bank."

Net interest income increased $3.2 million, or 12%, to $29.3 million for the second quarter of 2016, versus $26.1 million in the second quarter of 2015. Net interest income for the six months ended June 30, 2016 increased $6.1 million, or 12%, to $57.9 million, versus $51.8 million for the six months ended June 30, 2015.

For the fourteenth consecutive quarter, the company did not record a provision for loan losses. The absence of a provision for loan losses was generally driven by continued stability in key loan quality metrics, including appropriate reserve coverage of nonperforming loans, a decrease in historical loss percentages, stable economic conditions in the company's markets and sustained signs of improvement in its borrowers' performance and future prospects. The company's allowance for loan losses as of June 30, 2016 was $43.2 million compared to $44.8 million as of June 30, 2015 and $43.3 million as of March 31, 2016. The allowance for loan losses represented 1.35% of total loans as of June 30, 2016 versus 1.55% at June 30, 2015 and 1.39% as of March 31, 2016. The allowance for loan losses as a percentage of nonperforming loans was 464% as of June 30, 2016, versus 312% as of June 30, 2015, and 571% as of March 31, 2016.

Nonperforming assets decreased $5.0 million, or 35%, to $9.6 million as of June 30, 2016 versus $14.6 million as of June 30, 2015. On a linked quarter basis, nonperforming assets were $1.7 million higher than the $7.8 million reported as of March 31, 2016. The increase in nonperforming assets from the linked quarter was primarily due to placing a single $2.0 million commercial credit in nonaccrual status. The ratio of nonperforming assets to total assets at June 30, 2016 declined to 0.24% from 0.41% at June 30, 2015 and was 0.21% at March 31, 2016. Net charge-offs totaled $36,000 in the second quarter of 2016 versus net charge-offs of $861,000 during the second quarter of 2015 and net charge-offs of $326,000 during the linked first quarter of 2016.

The company's noninterest income increased 5% to $8.1 million for the second quarter of 2016 versus $7.7 million for the second quarter of 2015. Noninterest income was positively impacted by increases in recurring fee income for service charges on deposit accounts, merchant card fee income and mortgage banking income. The company's noninterest income decreased 3% to $15.1 million for the six months ended June 30, 2016 compared to $15.5 million in the prior year period. Noninterest income was negatively impacted by decreases in other income due primarily to credit valuation adjustment losses related to the company's swap arrangements of $605,000, as well as a $226,000 write down to a property formerly used as a Lake City Bank branch that is held for sale.

The company's noninterest expense increased by 10% to $18.4 million in the second quarter of 2016 compared to $16.7 million in the second quarter of 2015. Salaries and employee benefits increased by $1.1 million in the three month period ended June 30, 2016 versus the same period of 2015. These increases in salary and employee benefits were driven by higher performance incentive-based compensation costs, staff additions and normal merit increases. Data processing fees increased primarily due to increased technology and software related expenditures with the company's core processor, which are volume and product driven and represent digital solutions and forward technology for clients. The company's efficiency ratio was 49% for the second quarter of 2016, compared to 50% for the second quarter of 2015 and 49% for the linked first quarter of 2016. The company's noninterest expense increased by 7% to $35.8 million for the six months ended June 30, 2016 compared to $33.6 million in the prior year period primarily due to increases in salaries and employee benefits, data processing fees and professional fees.

Lakeland Financial Corporation is a $3.9 billion bank holding company headquartered in Warsaw, Indiana. Lake City Bank, its single bank subsidiary, is the fourth largest bank headquartered in the state, and the largest bank 100% invested in Indiana. Lake City Bank operates 48 offices in Northern and Central Indiana, delivering technology driven and client-centric financial services solutions to individuals and businesses.

Information regarding Lakeland Financial Corporation may be accessed on the home page of its subsidiary, Lake City Bank, at www.lakecitybank.com. The company's common stock is traded on the Nasdaq Global Select Market under "LKFN." In addition to the results presented in accordance with generally accepted accounting principles in the United States of America, this earnings release contains certain non-GAAP financial measures. Lakeland Financial believes that providing non-GAAP financial measures provides investors with information useful to understanding the company's financial performance. Additionally, these non-GAAP measures are used by management for planning and forecasting purposes, including measures based on "tangible common equity" which is "common stockholders' equity" excluding intangible assets, net of deferred tax and "tangible assets" which is "assets" excluding intangible assets, net of deferred tax. A reconciliation of these non-GAAP measures to the most comparable GAAP equivalent is included in the attached financial tables where the non-GAAP measure is presented.

This document contains, and future oral and written statements of the company and its management may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of the company. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of the company's management and on information currently available to management, are generally identifiable by the use of words such as "believe," "expect," "anticipate," "continue," "plan," "intend," "estimate," "may," "will," "would," "could," "should" or other similar expressions. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and the company undertakes no obligation to update any statement in light of new information or future events. Additional information concerning the company and its business, including factors that could materially affect the company's financial results, is included in the company's filings with the Securities and Exchange Commission, including the company's Annual Report on Form 10-K.

LAKELAND FINANCIAL CORPORATION

CONSOLIDATED BALANCE SHEETS

June 30, 2016 and December 31, 2015

(in thousands, except share data)

LAKELAND FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

For the Three Months and Six Months Ended June 30, 2016 and 2015

(unaudited in thousands except for share and per share data)

LAKELAND FINANCIAL CORPORATION

AVERAGE BALANCE SHEET AND NET INTEREST ANALYSIS

(UNAUDITED)