Lakeland Financial vs. First Busey: Which Bank Offers Better Long-Term Dividend Income?
Two Midwest banks share the same ex-dividend date, but one cut its payout to the bone during the financial crisis while the other never touched it. That difference in character shapes which bank retirement income investors can actually trust.
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%.
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.
Contact [email protected] for any questions or corrections.
Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
