Lakeland Financial vs. First Busey: Which Bank Offers Better Long-Term Dividend Income?

Quick Read

• Lakeland Financial (LKFN) never cut its dividend through the 2008 crisis and has grown payouts 73% since 2020, topping First Busey (BUSE) for retirement income.

• First Busey’s shares surged 37% over the past year, compressing its yield to 3.53% versus Lakeland’s 3.61% on a flat stock.

• First Busey bought back 9% of its shares for $199 million and trades at just 10 times forward earnings, making it the stronger total-return pick.

• Read More: Learn 7 ways to generate income with a $1,000,000+ portfolio (sponsor)

Retirement-focused investors may be deciding whether to own Lakeland Financial (NASDAQ:LKFN) or First Busey (NASDAQ:BUSE). Both Midwest lenders go ex-dividend on October 23, 2026. Lakeland pays $0.52 per share, and First Busey pays $0.26. The better pick is the bank that has done more to earn income investors’ trust.

Lakeland is a $7.2 billion Indiana community bank with 55 branch offices. First Busey is an $18.2 billion holding company that bought CrossFirst Bankshares in March 2025. They compare on the three measures that matter most for retirement income.

Current Yield: Lakeland Pays More per Dollar Today

Lakeland’s forward annual dividend of $2.08 on a $57.56 share price works out to a 3.61% yield. First Busey’s $1.04 on a $29.50 share price yields 3.53%. Busey’s rally has pressured its yield: its shares rose 36.57% over the past year, while Lakeland slid 0.37%. The gap is small, but it favors Lakeland. Winner: Lakeland.

Dividend Track Record: Lakeland’s Long Record Pulls Ahead

Lakeland’s quarterly dividend rose from $0.30 in 2020 to $0.52 in 2026, a 73% increase. Management reports more than a decade of back-to-back annual raises. During the financial crisis, Lakeland held its quarterly payout at $0.155 from 2008 through 2011 and never cut it.

First, Busey took a different path. It paid $0.20 in early 2009, then cut it to $0.08 and later $0.04, and it stayed there until 2014. Since 2020, its quarterly dividend has grown from $0.22 to $0.26, an increase of only 18%.

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Busey does have more room under its payout. Its forward dividend uses about 43% of trailing EPS of $2.42, compared with roughly 48% of Lakeland’s $4.36. Credit quality tips the balance back to Lakeland, though. Its Q2 2026 net charge-offs were just $24,000, and nonperforming assets fell 36% to $20.0M. At Busey, nonperforming assets rose $20.4M from the prior quarter, and classified assets rose $50.3M from a year earlier. Winner: Lakeland.

Growth and Valuation: First Busey’s Momentum Is Real

Busey’s Q2 adjusted EPS rose 9.5% to $0.69 and beat the $0.6443 estimate. Its adjusted net interest margin reached 3.62%, up 29 bps. Lakeland’s margin was 3.49%, up 7 bps. Busey’s efficiency ratio improved to 54.0%. Lakeland’s declined to 48.6% from 45.9% as noninterest expense rose 13%.

Since March 2025, Busey has bought back about 9% of its shares for roughly $198.6M. It also trades at 1.045 times book value and about 10 times forward earnings. Lakeland trades at 1.876 times book and about 20 times forward earnings. On top of that, Busey has $1.73B in CDs maturing in the second half of 2026 at a 3.5% weighted-average rate, giving it a chance to cut funding costs. Winner: First Busey.

Verdict: Lakeland Is the Retirement Income Pick

Lakeland wins for retirement-income investors. It pays a higher yield, has raised its dividend faster, and kept paying through 2008 to 2011 without a cut. That last point counts most for anyone who relies on dividend checks to pay bills (the whole case for building a dividend ladder you never have to sell out of is covered in a free guide we put together). Its credit book is also cleaner today.

First Busey is the better fit for total-return investors with longer time horizons. Those investors want a cheaper valuation, heavy buybacks, and a wider margin, and they can live with integration risk and commercial real estate making up 41.3% of loans.

What to watch next: whether Lakeland can bring expense growth under control, since watch list loans rose 9% last quarter. For Busey, watch how much loan payoff management expects to continue into Q3, as it weighs on loan balances.

Learn 7 Ways To Generate Income With A $1,000,000+ Portfolio

If you’ve saved over $1,000,000, this guide is for you. The last thing you want in retirement is to run out of money, you want your money to generate lasting income while you enjoy your life.

Now you can learn the strategies wealthy retirees use to fund their retirement with The Definitive Guide to Retirement Income from Fisher Investments. Download the guide today! (sponsor)

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