Lakeland Bancorp, Inc. (NASDAQ:LBAI) (the “Company”) reported the following results for the quarter ended March 31, 2016:
  • Net income for the first quarter of 2016 was $8.1 million and earnings per diluted share was $0.20.  Excluding the pre-tax impact of $1.7 million in merger related expenses pertaining to the Company’s acquisition of Pascack Bancorp, Inc. (“Pascack”), which closed on January 7, 2016, net income for the first quarter of 2016 was $9.3 million, or $0.22 per diluted share.  The Company reported net income of $8.3 million, or $0.22 per diluted share, in the first quarter of 2015.
  • For the first quarter of 2016, annualized return on average assets was 0.77%, annualized return on average common equity was 7.40%, and annualized return on average tangible common equity was 10.40%.  Excluding merger related expenses, these ratios were 0.88%, 8.45% and 11.88%, respectively.
  • On April 20, 2016, the Company declared a quarterly cash dividend of $0.095 per common share, payable on May 16, 2016 to holders of record as of the close of business on May 6, 2016.  This dividend represents a 12% increase over the first quarter 2016 dividend of $0.085 per common share.
  • The Company reported strong growth in commercial loans and total deposits during the first quarter of 2016.  Excluding loans obtained through the acquisition of Pascack, commercial loans increased by $92.7 million, or 4%.  Excluding Pascack, deposits increased $162.6 million, or 5%, since December 31, 2015.
  • Net interest margin (“NIM”) in the first quarter of 2016 was 3.48% as compared to 3.43% for the fourth quarter of 2015.

Thomas J. Shara, Lakeland Bancorp’s President and CEO, said, “Following a successful acquisition, we are extremely pleased to welcome the former Pascack shareholders and employees to Lakeland Bank.  We are equally pleased to report that work has commenced on the upcoming merger with Harmony Bank and, given our performance during the first quarter, we were able to raise our second quarter 2016 cash dividend by 12% to $0.095 per share.”

Pascack Acquisition

On January 7, 2016, the Company completed its acquisition of Pascack.  This acquisition added $410.0 million in total assets, $319.6 million in total loans and $304.5 million in total deposits.  Anticipated synergies and overlapping markets allowed the Company to close three branches during the quarter.  Goodwill amounted to $15.5 million and core deposit intangibles were $1.5 million.  The Company’s financial statements reflect the impact of the merger from the date of acquisition, which should be considered when comparing periods.     

Earnings

Net income for the first quarter of 2016 was $8.1 million, as compared to $8.3 million for the first quarter of 2015.  Excluding the pre-tax impact of $1.7 million in merger related expenses, net income for the first quarter of 2016 was $9.3 million. 

Net Interest Income

Net interest income for the first quarter of 2016 was $33.9 million, as compared to $28.5 million for the same period in 2015, an increase of 19%.  In the first quarter of 2016, NIM was 3.48%, as compared to 3.56% in the first quarter of 2015.  This decrease primarily occurred because savings and interest bearing deposits acquired from Pascack generally carried higher interest rates.  In addition, since the first quarter of 2015, the Company has seen an increasingly competitive market for deposits.  The annualized yield on interest-earning assets remained constant at 3.86% from the first quarter of 2015 to the first quarter of 2016.  The annualized cost of interest-bearing liabilities increased from 0.40% in the first quarter of 2015 to 0.49% in the first quarter of 2016, reflecting the higher cost of deposit accounts.  

Noninterest Income

Noninterest income totaled $4.9 million for the first quarter of 2016, as compared to $4.7 million for the same period in 2015.  In 2016, gains on the sale of loans exceeded the same period in 2015 by $155 thousand.  The Company earned $370 thousand from the sale of investment securities in the first quarter of 2016, compared to no gains in the first quarter of 2015.  Income from bank owned life insurance declined $291 thousand because of beneficiary payments received in 2015 that did not recur in 2016.  Commissions and fees declined $328 thousand from 2015 to 2016, due primarily to a decrease in financial services fees.  

Noninterest Expense  

Noninterest expense for the first quarter of 2016 was $25.4 million, compared to $20.0 million for the same period in 2015.  Excluding $1.7 million in merger related expenses, noninterest expense increased by $3.7 million.  Salary and benefit expense increased by $2.3 million, due primarily to a full quarter of expenses associated with the loan production offices that opened in 2015, the addition of Pascack employees during the quarter and an increase in employee benefit costs.  Data processing increased $185 thousand, primarily due to increases in the cost of mobile banking and the addition of the Pascack branches.  The efficiency ratio for the first quarter of 2016 was 60.38%.

Financial Condition

At March 31, 2016, total assets were $4.40 billion, an increase of $534.7 million, or 14%, from December 31, 2015, including $410.0 million from Pascack.  Total loans were $3.37 billion, an increase of $401.0 million, or 14%, in 2016, including $319.6 million from Pascack.  Total deposits were $3.46 billion as of March 31, 2016, an increase of $467.1 million, or 16%, from December 31, 2015, including $304.5 million from Pascack.  Noninterest bearing demand deposits at $774.5 million increased by $80.7 million, or 12%, in 2016, $64.4 million of which was from the Pascack acquisition.

Asset Quality

At March 31, 2016, non-performing assets totaled $25.8 million (0.58% of total assets) compared to $23.7 million (0.61% of total assets) at December 31, 2015.  The Allowance for Loan and Lease Losses totaled $30.6 million at March 31, 2016 and represented 0.91% of total loans, and 122% of non-accruing loans.  In the first quarter of 2016, the Company had net charge-offs totaling $1.4 million, compared to $1.0 million in the first quarter of 2015.  The provision for loan and lease losses in the first quarter of 2016 was $1.1 million, compared to $0.9 million for the same period in 2015.

Capital

At March 31, 2016, stockholders' equity was $446.9 million and book value per common share was $10.84.  Tangible book value per common share was $7.72 at March 31, 2016.  As of March 31, 2016, the Company’s leverage ratio was 8.33%.  Tier 1 and total risk based capital ratios were 9.99% and 10.94%, respectively.  The common equity tier 1 capital ratio was 9.12% and the tangible common equity ratio was 7.45%.  The regulatory capital ratios exceed those necessary to be considered a well-capitalized institution under Federal guidelines.

Regulatory and Shareholder Approvals

Regulatory applications have been filed with the Federal Deposit Insurance Corporation (the “FDIC”) and the New Jersey Department of Banking and Insurance (the “NJ Department”) for the merger of Harmony Bank with and into Lakeland Bank.  The NJ Department approved the merger on April 21, 2016, and FDIC approval is pending.  The merger is also subject to the approval of Harmony Bank’s shareholders and other customary closing conditions.

Additional Information and Where to Find It

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval.  No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.  In connection with the proposed merger, Lakeland Bancorp has filed with the Securities and Exchange Commission a registration statement on Form S-4 that includes a preliminary proxy statement of Harmony Bank and a preliminary prospectus of Lakeland Bancorp.  The registration statement has not yet become effective.  This material is not a substitute for the final proxy statement and prospectus or any other document Lakeland Bancorp may file with the SEC.  After the registration statement has been declared effective by the SEC, the definitive proxy statement and prospectus will be delivered to the shareholders of Harmony Bank.  INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THE DEFINITIVE PROXY STATEMENT AND PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) AND OTHER DOCUMENTS RELATING TO THE TRANSACTIONS THAT HAVE BEEN OR WILL BE FILED BY LAKELAND BANCORP CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE, BECAUSE THEY CONTAIN AND WILL CONTAIN IMPORTANT INFORMATION.  Investors and security holders may obtain a free copy of the registration statement and the definitive proxy statement and prospectus (when available) and other documents filed by Lakeland Bancorp with the SEC at the SEC’s website at www.sec.gov.  These documents may be accessed and downloaded for free at Lakeland Bancorp’s website at www.lakelandbank.com or by directing a request to Investor Relations, Lakeland Bancorp, Inc., 250 Oak Ridge Road, Oak Ridge, NJ 07438 (973-697-2000).  Requests for the definitive proxy statement and prospectus (when available) may also be made to Investor Relations, Harmony Bank, 732-719-3710.

Participants in the Solicitation

This communication is not a solicitation of a proxy from any security holder of Lakeland Bancorp or Harmony Bank.  However, Lakeland Bancorp, Harmony Bank and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from Harmony Bank’s shareholders in respect of the proposed merger of Harmony Bank into Lakeland Bank.  Information regarding the directors and executive officers of Lakeland Bancorp may be found in its definitive proxy statement relating to its 2016 Annual Meeting of Shareholders, which was filed with the SEC on April 12, 2016, and can be obtained free of charge from Lakeland Bancorp’s website.  Information regarding the directors and executive officers of Harmony Bank may be found in its definitive proxy statement relating to its 2015 Annual Meeting of Shareholders, and can be obtained free of charge from Harmony Bank by calling 732-719-3710.  Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interest, by security holdings or otherwise, will be contained in the definitive proxy statement and prospectus and other relevant materials to be filed with the SEC when they become available. 

Forward-Looking Statements

The information disclosed in this document includes various forward-looking statements (with respect to corporate objectives, trends, and other financial and business matters) that are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  The words “anticipates”, “projects”, “intends”, “estimates”, “expects”, “believes”, “plans”, “may”, “will”, “should”, “could”, and other similar expressions are intended to identify such forward-looking statements.  Lakeland cautions that these forward-looking statements are necessarily speculative and speak only as of the date made, and are subject to numerous assumptions, risks and uncertainties, all of which may change over time.  Actual results could differ materially from such forward-looking statements.  The following factors, among others, could cause actual results to differ materially and adversely from such forward-looking statements: changes in the financial services industry and the U.S. and global capital markets, changes in economic conditions nationally, regionally and in the Company’s markets, the nature and timing of actions of the Federal Reserve Board and other regulators, the nature and timing of legislation affecting the financial services industry, government intervention in the U.S. financial system, changes in levels of market interest rates, pricing pressures on loan and deposit products, credit risks of the Company’s lending and leasing activities, customers’ acceptance of the Company’s products and services, competition, failure to successfully integrate Pascack Community Bank into Lakeland Bank, failure to obtain Harmony Bank shareholder or regulatory approval for the merger of Harmony Bank into Lakeland Bank, and failure to realize anticipated efficiencies and synergies if the Harmony Bank merger is consummated.  Any statements made by Lakeland that are not historical facts should be considered to be forward-looking statements.  Lakeland is not obligated to update and does not undertake to update any of its forward-looking statements made herein.

Explanation of Non-GAAP Financial Measures

Reported amounts are presented in accordance with accounting principles generally accepted in the United States of America ("GAAP").  The Company’s management believes that the supplemental non-GAAP information, which consists of measurements and ratios based on tangible equity and tangible assets, is utilized by regulators and market analysts to evaluate a company’s financial condition and therefore, such information is useful to investors.  These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies.

The Company also uses an efficiency ratio that is a non-GAAP financial measure.  The ratio that the Company uses excludes amortization of core deposit intangibles, expenses on other real estate owned and other repossessed assets, provision for unfunded lending commitments and, where applicable, long-term debt prepayment fees and merger related expenses.  Income for the non-GAAP ratio is increased by the favorable effect of tax-exempt income and excludes securities gains and losses and gain on debt extinguishment, which can vary from period to period.  The Company uses this ratio because it believes the ratio provides a better comparison of period to period operating performance.

About Lakeland BankLakeland Bank is the wholly-owned subsidiary of Lakeland Bancorp, Inc. (NASDAQ:LBAI), which has $4.4 billion in total assets.  The Bank operates 53 New Jersey branch offices in Bergen, Essex, Morris, Passaic, Somerset, Sussex, Union and Warren counties; five New Jersey regional commercial lending centers in Bernardsville, Montville, Newton, Teaneck and Wyckoff/Waldwick; and, two commercial loan production offices serving Middlesex and Monmouth counties in New Jersey and the Hudson Valley region of New York.  Lakeland Bank offers an extensive suite of financial products and services for businesses and consumers.  Visit LakelandBank.com for more information.

                 
Lakeland Bancorp, Inc.   
Consolidated Statements of Operations  
(Unaudited)  
                 
            Three Months Ended March 31,  
(Dollars in thousands, except per share amounts)           2016     2015    
                 
INTEREST INCOME              
  Loans and fees         $   34,121   $   27,896    
  Federal funds sold and interest bearing deposits with banks      75      12    
  Taxable investment securities and other        2,962      2,674    
  Tax exempt investment securities          413      410    
  TOTAL INTEREST INCOME          37,571      30,992    
INTEREST EXPENSE              
  Deposits              2,205      1,283    
  Federal funds purchased and securities sold under agreements to repurchase      38      22    
  Other borrowings            1,478      1,169    
  TOTAL INTEREST EXPENSE        3,721      2,474    
NET INTEREST INCOME          33,850      28,518    
Provision for loan and lease losses            1,075      870    
  NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES    32,775      27,648    
NONINTEREST INCOME            
  Service charges on deposit accounts          2,442      2,340    
  Commissions and fees            979      1,307    
  Gain on investment securities          370       -     
  Gain on sale of loans            420      265    
  Income on bank owned life insurance          408      699    
  Other income              248      127    
  TOTAL NONINTEREST INCOME            4,867      4,738    
NONINTEREST EXPENSE            
  Salaries and employee benefits          14,085      11,750    
  Net occupancy expense            2,688      2,548    
  Furniture and equipment           1,946      1,656    
  Stationary, supplies and postage          443      365    
  Marketing expense            309      240    
  FDIC insurance expense            590      518    
  ATM and debit card expense          346      342    
  Telecommunications expense          424      345    
  Data processing expense          520      335    
  Other real estate owned and other repossessed assets expense (income)      39     (8 )  
  Merger related expenses             1,721       -     
  Core deposit intangible amortization           167       111    
  Provision for unfunded lending commitments         208       130    
  Other expenses              1,938      1,710    
  TOTAL NONINTEREST EXPENSE      25,424      20,042    
INCOME BEFORE PROVISION FOR INCOME TAXES              12,218      12,344    
Provision for income taxes              4,110      4,014    
NET INCOME           $   8,108   $   8,330    
EARNINGS PER COMMON SHARE          
  Basic           $   0.20   $   0.22    
  Diluted           $   0.20   $   0.22    
DIVIDENDS PER COMMON SHARE           $   0.085   $   0.075    
                 

 

Lakeland Bancorp, Inc.
Consolidated Balance Sheets
               
          March 31,   December 31,
(Dollars in thousands)         2016       2015  
          (Unaudited)    
ASSETS              
Cash and due from banks       $   188,414     $   113,894  
Federal funds sold and interest bearing deposits due from banks           25,205       4,599  
  Total cash and cash equivalents            213,619        118,493  
               
Investment securities available for sale, at fair value      441,147        442,349  
Investment securities held to maturity; fair value of $118,357 in 2016      
  and $117,594 in 2015          115,796        116,740  
Federal Home Loan Bank and other membership stocks, at cost    16,193        14,087  
Loans held for sale           1,150         1,233  
Loans:              
  Commercial, secured by real estate        2,243,335        1,879,659  
  Commercial, industrial and other        332,097        307,044  
  Leases            60,925        56,660  
  Residential mortgages          392,387        389,692  
  Consumer and home equity        340,217        334,891  
  Total loans          3,368,961        2,967,946  
  Net deferred costs         (2,589 )       (2,746 )
  Allowance for loan and lease losses       (30,553 )     (30,874 )
  Net loans             3,335,819        2,934,326  
Premises and equipment, net         49,929        35,881  
Accrued interest receivable        10,658        9,208  
Goodwill             125,443        109,974  
Other identifiable intangible assets        2,891         1,545  
Bank owned life insurance          65,769        65,361  
Other assets             25,819        20,353  
  TOTAL ASSETS         $   4,404,233     $   3,869,550  
               
LIABILITIES AND STOCKHOLDERS' EQUITY        
LIABILITIES:            
Deposits:              
  Noninterest bearing       $   774,487     $   693,741  
  Savings and interest bearing transaction accounts      2,204,356        1,958,510  
  Time deposits through $250,000            348,825        270,624  
  Time deposits over $250,000            134,968        72,697  
  Total deposits            3,462,636        2,995,572  
Federal funds purchased and securities sold under agreements to repurchase    128,841        151,234  
Other borrowings          310,031        271,905  
Subordinated debentures          31,238         31,238  
Other liabilities              24,612        19,085  
  TOTAL LIABILITIES          3,957,358        3,469,034  
               
STOCKHOLDERS' EQUITY:          
  Common stock, no par value; authorized 70,000,000 shares;       
    issued 41,240,824 shares at March 31, 2016              
    and 37,906,481 shares at December 31, 2015            424,101        386,287  
  Retained earnings          17,662        13,079  
  Accumulated other comprehensive gain          5,112        1,150  
  TOTAL STOCKHOLDERS' EQUITY            446,875        400,516  
  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY         $   4,404,233     $   3,869,550  
               

 

Lakeland Bancorp, Inc.  
Financial Highlights  
(Unaudited)  
                 
      For the Quarter Ended  
      Mar 31, Dec 31, Sept 30, Jun 30, Mar 31,  
(Dollars in thousands, except per share data)     2016     2015     2015     2015     2015    
                 
INCOME STATEMENT              
Net Interest Income   $   33,850   $   30,119   $   29,334   $   28,669   $   28,518    
Provision for Loan and Lease Losses       (1,075 )     -        (332 )     (740 )     (870 )  
Other Noninterest Income       4,077       4,290       4,169       4,477       4,473    
Gain on Investment Securities       370       51       173       17       -     
Gain on Sale of Loans       420       437       515       464       265    
Gain on Debt Extinguishment       -        -        1,830       -        -     
Long-Term Debt Prepayment Fee       -        -        (2,407 )     -        -     
Merger Related Expenses       (1,721 )     (822 )     (330 )     -        -     
Provision for Unfunded Lending Commitments     (208 )     (506 )     (168 )     (60 )     (130 )  
Other Noninterest Expense       (23,495 )     (20,814 )     (20,927 )     (21,135 )     (19,912 )  
Pretax Income       12,218       12,755       11,857       11,692       12,344    
Tax Expense       (4,110 )     (4,291 )     (4,032 )     (3,830 )     (4,014 )  
Net Income     $   8,108   $   8,464   $   7,825   $   7,862   $   8,330    
                 
                 
Basic Earnings Per Common Share   $   0.20   $   0.22   $   0.20   $   0.21   $   0.22    
Diluted Earnings Per Common Share   $   0.20   $   0.22   $   0.20   $   0.21   $   0.22    
Dividends Per Common Share   $   0.085   $   0.085   $   0.085   $   0.085   $   0.075    
Dividends Paid   $   3,525   $   3,246   $   3,244   $   3,243   $   2,852    
Weighted Average Shares - Basic       40,931       37,865       37,856       37,854       37,800    
Weighted Average Shares - Diluted       41,091       38,048       38,016       37,988       37,937    
                 
SELECTED OPERATING RATIOS              
Annualized Return on Average Assets      0.77 %   0.89 %   0.84 %   0.88 %   0.96 %  
Annualized Return on Average Common Equity    7.40 %   8.40 %   7.86 %   8.08 %   8.81 %  
Annualized Return on Average Tangible Common Equity (1)   10.40 %   11.64 %   10.96 %   11.33 %   12.43 %  
Annualized Net Interest Margin     3.48 %   3.43 %   3.42 %   3.46 %   3.56 %  
Efficiency Ratio (1)     60.38 %   58.70 %   60.77 %   62.09 %   59.17 %  
Common Stockholders' Equity to Total Assets     10.15 %   10.35 %   10.62 %   10.57 %   10.70 %  
Tangible Common Equity to Tangible Assets (1)   7.45 %   7.69 %   7.88 %   7.78 %   7.86 %  
Tier 1 Risk-Based Ratio     9.99 %   10.53 %   10.81 %   11.05 %   11.23 %  
Total Risk-Based Ratio     10.94 %   11.61 %   11.93 %   12.15 %   12.37 %  
Tier 1 Leverage Ratio     8.33 %   8.70 %   8.77 %   9.12 %   9.17 %  
Common Equity Tier 1 Capital Ratio     9.12 %   9.54 %   9.78 %   9.66 %   9.79 %  
Book Value per Common Share   $   10.84   $   10.57   $   10.49   $   10.31   $   10.24    
Tangible Book Value per Common Share (1)   $   7.72   $   7.62   $   7.55   $   7.36   $   7.29    
                 
(1) See Supplemental Information - Non-GAAP Financial Measures          
 

 

                 
Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
                 
        For the Quarter Ended
        Mar 31, Dec 31, Sept 30, Jun 30, Mar 31,
(Dollars in thousands)       2016     2015     2015     2015     2015  
             
SELECTED BALANCE SHEET DATA AT PERIOD-END        
Loans and Leases     $   3,368,961   $   2,967,946   $   2,853,764   $   2,756,694   $   2,691,705  
Allowance for Loan and Lease Losses      (30,553 )     (30,874 )     (30,994 )     (30,174 )     (30,505 )
Investment Securities         573,136       573,176       559,295       597,598       599,986  
Total Assets           4,404,233       3,869,550       3,743,100       3,699,127       3,627,764  
Total Deposits        3,462,636       2,995,571       2,919,673       2,842,953       2,842,565  
Short-Term Borrowings         128,841       151,234       131,356       146,249       117,351  
Other Borrowings         341,269       303,143       275,666       303,966       263,966  
Stockholders' Equity        446,875       400,516       397,687       390,860       388,084  
                 
Loans and Leases              
Commercial Real Estate     $   2,243,335   $   1,879,659   $   1,776,911   $   1,695,276   $   1,636,128  
Commercial, Industrial and Other       332,097       307,044       290,961       262,617       244,162  
Leases           60,925       56,660       55,057       53,798       54,271  
Residential Mortgages         392,387       389,692       400,247       414,339       426,339  
Consumer and Home Equity       340,217       334,891       330,588       330,664       330,805  
  Total Loans     $   3,368,961   $   2,967,946   $   2,853,764   $   2,756,694   $   2,691,705  
                 
Deposits                
Noninterest Bearing     $   774,487   $   693,741   $   694,267   $   714,227   $   672,264  
Savings and Interest Bearing Transaction Accounts      2,204,356       1,958,509       1,907,858       1,822,295       1,878,598  
Time Deposits         483,793       343,321       317,548       306,431       291,703  
  Total Deposits     $   3,462,636   $   2,995,571   $   2,919,673   $   2,842,953   $   2,842,565  
                 
SELECTED AVERAGE BALANCE SHEET DATA        
Loans and Leases, net     $   3,284,339   $   2,898,477   $   2,811,581   $   2,720,801   $   2,660,512  
Investment Securities         570,581       561,024       581,565       600,547       582,912  
Interest Earning Assets         3,933,160       3,509,867       3,431,018       3,345,380       3,271,110  
Total Assets        4,248,468       3,779,819       3,685,573       3,600,416       3,526,898  
Noninterest Bearing Demand Deposits       760,198       722,270       710,011       688,854       660,548  
Savings Deposits         475,870       402,217       398,147       402,142       395,153  
Interest Bearing Transaction Accounts       1,682,580       1,573,638       1,497,340       1,480,866       1,495,270  
Time Deposits         465,024       328,080       309,235       295,996       280,837  
Total Deposits        3,383,672       3,026,205       2,914,733       2,867,858       2,831,808  
Short-Term Borrowings         50,335       47,276       61,679       59,249       47,827  
Other Borrowings         349,088       286,887       297,140       267,610       247,316  
Total Interest Bearing Liabilities       3,022,897       2,638,098       2,563,542       2,505,863       2,466,403  
Stockholders' Equity         440,823       399,987       394,948       390,151       383,587  
           

 

                   
Lakeland Bancorp, Inc.  
Financial Highlights  
(Unaudited)  
                   
        For the Quarter Ended  
        Mar 31, Dec 31, Sept 30, Jun 30, Mar 31,  
(Dollars in thousands)       2016     2015     2015     2015     2015    
             
AVERAGE ANNUALIZED YIELDS (Taxable Equivalent Basis)          
Assets:                  
Loans and leases       4.18 %   4.12 %   4.11 %   4.16 %   4.25 %  
Taxable investment securities and other     2.39 %   2.09 %   2.06 %   2.02 %   2.08 %  
Tax-exempt securities       3.40 %   3.49 %   3.41 %   3.58 %   3.67 %  
Federal funds sold and interest bearing cash accounts   0.38 %   0.25 %   0.07 %   0.18 %   0.17 %  
  Total interest earning assets     3.86 %   3.76 %   3.75 %   3.78 %   3.86 %  
                   
Liabilities:                  
Savings accounts       0.08 %   0.05 %   0.05 %   0.05 %   0.05 %  
Interest bearing transaction accounts     0.30 %   0.26 %   0.25 %   0.23 %   0.23 %  
Time deposits       0.74 %   0.70 %   0.63 %   0.59 %   0.56 %  
Borrowings         1.52 %   1.53 %   1.52 %   1.58 %   1.61 %  
Total interest bearing liabilities     0.49 %   0.44 %   0.44 %   0.42 %   0.40 %  
Net interest spread (taxable equivalent basis)   3.37 %   3.32 %   3.31 %   3.36 %   3.46 %  
                   
Annualized net interest margin (taxable equivalent basis)   3.48 %   3.43 %   3.42 %   3.46 %   3.56 %  
Annualized cost of deposits     0.26 %   0.22 %   0.20 %   0.19 %   0.18 %  
                   
ASSET QUALITY DATA              
Allowance for Loan and Lease Losses            
Balance at beginning of period   $   30,874   $   30,994   $   30,174   $   30,505   $   30,684    
Provision for loan losses         1,075       -        332       740       870    
Charge-offs           (1,543 )     (1,140 )     (584 )     (1,475 )     (1,281 )  
Recoveries           147       1,020       1,072       404       232    
 Balance at end of period     $   30,553   $   30,874   $   30,994   $   30,174   $   30,505    
                   
Net Loan Charge-Offs (Recoveries)              
Commercial real estate     $   81   $   (450 ) $   (936 ) $   476   $   426    
Commercial, industrial and other       583       (56 )     88       21       (31 )  
Leases           69       (1 )     13       102       407    
Home equity and consumer       574       561       204       386       231    
Real estate - mortgage         89       66       143       86       16    
 Net charge-offs (recoveries)   $   1,396   $   120   $   (488 ) $   1,071   $   1,049    
                   
Non-Performing Assets                
Commercial real estate     $   11,943   $   10,446   $   8,176   $   5,307   $   6,994    
Commercial, industrial and other       1,163       103       832       1,354       285    
Leases           282       316       154       79       111    
Home equity and consumer       3,249       3,167       3,530       3,143       3,472    
Real estate - mortgage         8,330       8,664       8,805       9,098       9,552    
  Total non-accruing loans         24,967       22,696       21,497       18,981       20,414    
Property acquired through foreclosure or repossession     792       983       819       1,078       826    
  Total non-performing assets   $   25,759   $   23,679   $   22,316   $   20,059   $   21,240    
                   
Loans past due 90 days or more and still accruing $   101   $   331   $   123   $   102   $   134    
Loans restructured and still accruing   $   10,545   $   10,108   $   11,927   $   12,419   $   11,538    
                   
Ratio of allowance for loan and lease losses to total loans          0.91 %   1.04 %   1.09 %   1.09 %   1.13 %  
Non-performing loans to total loans          0.74 %   0.76 %   0.75 %   0.69 %   0.76 %  
Non-performing assets to total assets          0.58 %   0.61 %   0.60 %   0.54 %   0.59 %  
Annualized net charge-offs (recoveries) to average loans          0.17 %   0.02 %   -0.07 %   0.16 %   0.16 %  
                   

 

Lakeland Bancorp, Inc.  
Supplemental Information - Non-GAAP Financial Measures  
(Unaudited)  
                   
        At or for the Quarter Ended  
        Mar 31, Dec 31, Sept 30, Jun 30, Mar 31,  
(Dollars in thousands, except per share amounts)   2016     2015     2015     2015     2015    
                   
Calculation of tangible book value per common share            
Total common stockholders' equity at end of period - GAAP $   446,875   $   400,516   $   397,687   $   390,860   $   388,084    
Less:                  
  Goodwill           125,443       109,974       109,974       109,974       109,974    
  Other identifiable intangible assets, net       2,891       1,545       1,644       1,742       1,849    
Total tangible common stockholders' equity at end of period - Non-GAAP $   318,541   $   288,997   $   286,069   $   279,144   $   276,261    
                   
Shares outstanding at end of period       41,241       37,906       37,906       37,903       37,900    
                   
Book value per share - GAAP     $   10.84   $   10.57   $   10.49   $   10.31   $   10.24    
                   
Tangible book value per share - Non-GAAP   $   7.72   $   7.62   $   7.55   $   7.36   $   7.29    
                   
Calculation of tangible common equity to tangible assets            
Total tangible common stockholders' equity at end of period - Non-GAAP $   318,541   $   288,997   $   286,069   $   279,144   $   276,261    
                   
Total assets at end of period     $   4,404,233   $   3,869,550   $   3,743,100   $   3,699,127   $   3,627,764    
Less:                  
  Goodwill           125,443       109,974       109,974       109,974       109,974    
  Other identifiable intangible assets, net       2,891       1,545       1,644       1,742       1,849    
Total tangible assets at end of period - Non-GAAP $   4,275,899   $   3,758,031   $   3,631,482   $   3,587,411   $   3,515,941    
                   
Common equity to assets - GAAP       10.15 %   10.35 %   10.62 %   10.57 %   10.70 %  
                   
Tangible common equity to tangible assets - Non-GAAP   7.45 %   7.69 %   7.88 %   7.78 %   7.86 %  
                   
Calculation of return on average tangible common equity            
Net income - GAAP       $   8,108   $   8,464   $   7,825   $   7,862   $   8,330    
                   
Total average common stockholders' equity   $   440,823   $   399,987   $   394,948   $   390,151   $   383,587    
Less:                  
  Average goodwill           124,423       109,974       109,974       109,974       109,974    
  Average other identifiable intangible assets, net     2,920       1,606       1,706       1,807       1,919    
Total average tangible common stockholders' equity - Non-GAAP $   313,480   $   288,407   $   283,268   $   278,370   $   271,694    
                   
Return on average common stockholders' equity - GAAP   7.40 %   8.40 %   7.86 %   8.08 %   8.81 %  
                   
Return on average tangible common stockholders' equity - Non-GAAP   10.40 %   11.64 %   10.96 %   11.33 %   12.43 %  
                   
Calculation of efficiency ratio                
Total noninterest expense     $   25,424   $   22,142   $   23,832   $   21,195   $   20,042    
  Amortization of core deposit intangibles       (167 )     (99 )     (98 )     (107 )     (111 )  
  Other real estate owned and other repossessed asset (expense) income     (39 )     (135 )     (27 )     (27 )     8    
  Long-term debt prepayment fee         -        -        (2,407 )     -        -     
  Merger related expenses         (1,721 )     (822 )     (330 )     -        -     
  Provision for unfunded lending commitments, net     (208 )     (506 )     (168 )     (60 )     (130 )  
Noninterest expense, as adjusted     $   23,289   $   20,580   $   20,802   $   21,001   $   19,809    
                   
Net interest income       $   33,850   $   30,119   $   29,334   $   28,669   $   28,518    
Total noninterest income         4,867       4,778       6,687       4,958       4,738    
Total revenue           38,717       34,897       36,021       33,627       33,256    
  Tax-equivalent adjustment on municipal securities     222       212       210       214       221    
  Gains on debt extinguishment         -        -        (1,830 )     -        -     
  Gains on sales investment securities       (370 )     (51 )     (173 )     (17 )     -     
Total revenue, as adjusted     $   38,569   $   35,058   $   34,228   $   33,824   $   33,477    
                   
Efficiency ratio - Non-GAAP       60.38 %   58.70 %   60.77 %   62.09 %   59.17 %  
                   
Thomas J. Shara
President & CEO

Joseph F. Hurley
EVP & CFO
973-697-2000
Lakeland Bancorp (NASDAQ:LBAI)
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