Lakeland Bancorp Increases Earnings by 17%


OAK RIDGE, N.J., July 20, 2017 (GLOBE NEWSWIRE) -- Lakeland Bancorp, Inc. (NASDAQ:LBAI) (the “Company”), the parent company of Lakeland Bank (“Lakeland”), reported net income of $13.4 million for the three months ended June 30, 2017 compared to $10.1 million for the same period in 2016.  For the three months ended June 30, 2017, diluted earnings per share (“EPS”) of $0.28 increased 17% from $0.24 for the same period in 2016.  For the second quarter of 2017, return on average assets was 1.02%, return on average common equity was 9.49%, and return on average tangible common equity was 12.58%.

For the six months ended June 30, 2017, the Company reported net income of $25.7 million, a 41% increase over $18.2 million for the same period in 2016.  Over the same period, the Company reported EPS of $0.53 in 2017, an increase of 20% over $0.44 in 2016.  Year-to-date 2017, return on average assets was 1.00%, return on average common equity was 9.26%, and return on average tangible common equity was 12.31%.

Thomas Shara, Lakeland Bancorp’s President and CEO, commented on the quarterly results, “Our strong financial results were driven by the expansion of our net interest margin by 8 basis points for the quarter and 14 basis points year-to-date.  We continue to improve our financial performance with a return on assets over 1%, return on equity of 9.5%, return on tangible common equity of 12.6%, a reduction in our efficiency ratio below 53% and our non-performing assets to total assets ratio dropping to 33 basis points – the lowest in ten years.”

The following represents performance highlights and significant events for the second quarter of 2017:

  • Net interest margin (“NIM”) was 3.41% compared to 3.33% in the prior quarter and 3.27% in the quarter ended December 31, 2016.  The NIM increase from the linked quarter was primarily due to loan yields increasing seven basis points partially offset by rising deposit costs.
  • Total loans grew $79.6 million, or 2.0%, during the quarter to $4.05 billion.
  • Noninterest bearing deposits increased $54.1 million during the quarter, or 5.8%, to $978.7 million.                                             
  • The efficiency ratio of 52.6% decreased from 56.4% in the prior quarter and 56.3% for the same period in 2016.
  • Tangible book value per share increased to $9.05 at June 30, 2017, an annualized increase of 9.5% for the quarter.
  • On July 19, 2017, the Company declared a cash dividend of $0.10 per share to be paid on August 15, 2017 to stockholders of record as of July 31, 2017.

Earnings
Net income for the second quarter of 2017 was $13.4 million, a 32% increase compared to $10.1 million for the same period in 2016.  After excluding merger related expenses incurred in the second quarter of 2016, this increase was 25%.

Year-to-date net income for 2017 was $25.7 million, a 41% increase compared to $18.2 million for the same period in 2016.  After excluding merger related expenses incurred in 2016, this increase was 29%.

Net Interest Income
Net interest income for the second quarter of 2017 was $41.4 million, compared to $35.1 million for the same period in 2016.  Year-to-date net interest income for 2017 was $80.7 million, as compared to $69.0 million for the same period in 2016.  Total interest income increased due to the organic growth of earning assets as well as the merger with Harmony Bank in July 2016 (the “merger”).  Total interest expense increased primarily due to additional deposits from the merger, organic deposit growth and the impact of the subordinated debt offering in September 2016.

Noninterest Income
Noninterest income totaled $6.1 million for the second quarter of 2017 compared to $4.9 million for the same period in 2016.  This increase was primarily due a $0.3 million gain on the sale of a former branch, a $0.3 million gain on the payoff of an acquired loan as well as higher fee income.

Year-to-date 2017 noninterest income totaled $14.2 million compared to $9.8 million for the same period in 2016.  This increase was primarily due to $2.2 million in additional gains on the sales of investment securities, $0.7 million from the sales of two former branches in 2017, $0.4 million increase on the sales of other real estate, $0.3 million gain on the payoff of an acquired loan and $0.3 million increase in swap income.

Noninterest Expense
Noninterest expense totaled $25.4 million for the second quarter of 2017 compared to $23.7 million for the same period in 2016, which included $0.7 million in merger related expenses.  This increase was primarily due to $2.0 million in additional salary and employee benefit expenses associated with the merger and increases in employee salary and benefit costs.  These increases were partially offset by a $0.3 million reduction in the cost of FDIC insurance.

Year-to-date 2017 noninterest expense totaled $53.8 million compared to $49.1 million for the same period in 2016.  During 2017, the Company incurred long-term debt prepayment penalties of $2.8 million, and during 2016, the Company incurred $2.4 million in merger related expenses.  The resulting $4.3 million net increase was primarily due to $3.3 million in additional salary and employee benefit expenses associated with the merger and increases in employee salary and benefit costs.  In addition, other expenses increased by $0.4 million, primarily due to higher legal, correspondent and audit fees.

Financial Condition
In 2017, total assets increased $269.1 million, or 5.3%, to $5.36 billion as total loans and leases grew $180.4 million, or 4.7%, to $4.05 billion and investment securities increased $61.1 million, or 7.9%, to $830.5 million.  On the funding side, total deposits grew $134.4 million, or 3.3%, to $4.23 billion while borrowings increased $113.6 million, or 26.9%, to $535.6 million.

Asset Quality
At June 30, 2017, non-performing assets totaled $17.7 million (0.33% of total assets) compared to $21.5 million (0.42% of total assets) at December 31, 2016.  Non-performing loans and leases as a percent of total loans and leases decreased to 0.40% at June 30, 2017 from 0.53% at December 31, 2016.  The allowance for loan and lease losses increased to $32.8 million at June 30, 2017, and represented 0.81% of total loans and leases.  For the six months ended June 30, 2017, the Company had net charge-offs of $1.5 million (annualized 0.07% of average loans and leases) compared to $2.3 million (annualized 0.14% of average loans and leases) for the same period in 2016.  The year-to-date provision for loan and lease losses was $3.0 million compared to $2.1 million for the same period in 2016.

Capital
At June 30, 2017, stockholders' equity was $567.5 million compared to $550.0 million at December 31, 2016.   At June 30, 2017, the book value per common share and tangible book value per common share were $11.99 and $9.05 compared to $11.65 and $8.70, respectively, at December 31, 2016.

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.  The Company 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, and competition.  Any statements made by the Company that are not historical facts should be considered to be forward-looking statements.  The Company 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").  This press release also contains certain supplemental non-GAAP information that the Company’s management uses in its analysis of the Company’s financial results.  Specifically, the Company provides measures based on what it believes are its operating earnings on a consistent basis, and excludes material non-routine operating items which affect the GAAP reporting of results of operations.  The Company’s management believes that providing this information to analysts and investors allows them to better understand and evaluate the Company’s core financial results for the periods in question.

The Company also provides measurements and ratios based on tangible equity and tangible assets.  These measures are utilized by regulators and market analysts to evaluate a company’s financial condition and, therefore, the Company’s management believes that such information is useful to investors.

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, 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 gains and losses from the sale of investment securities 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.

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.  See accompanying non-GAAP tables.

About Lakeland Bank
Lakeland Bank is the wholly-owned subsidiary of Lakeland Bancorp, Inc. (NASDAQ:LBAI), which has $5.4 billion in total assets. The Bank operates 53 branch offices throughout Bergen, Essex, Morris, Ocean, Passaic, Somerset, Sussex, and Union counties in New Jersey including one branch in Highland Mills, New York; six New Jersey regional commercial lending centers in Bernardsville, Jackson, Montville, Newton, Teaneck and Waldwick; and one in New York to serve the Hudson Valley region. Lakeland also has a commercial loan production office serving Middlesex and Monmouth counties in New Jersey.  Lakeland Bank offers an extensive suite of financial products and services for businesses and consumers. Visit LakelandBank.com for more information.

Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
           
    Three Months Ended June 30, Six Months Ended June 30,
(Dollars in thousands, except per share amounts) 2017   2016   2017   2016 
           
INCOME STATEMENT        
Net interest income  $  41,421  $  35,102  $  80,744  $  68,952 
Provision for loan and lease losses    (1,827)    (1,010)    (3,045)    (2,085)
Other noninterest income     5,655     4,460     10,812     8,537 
Gains (losses) on sales of investment securities   (15)  -     2,524     370 
Gains on sales of loans     471     425     869     845 
Long-term debt prepayment fee  -   -     (2,828)  - 
Merger related expenses   -     (685)  -     (2,406)
Other noninterest expense    (25,366)    (23,030)    (51,008)    (46,733)
  Pretax income     20,339     15,262     38,068     27,480 
Provision for income taxes    (6,969)    (5,132)    (12,386)    (9,242)
  Net income   $  13,370  $  10,130  $  25,682  $  18,238 
           
Basic earnings per common share $  0.28  $  0.24  $  0.54  $  0.44 
Diluted earnings per common share $  0.28  $  0.24  $  0.53  $  0.44 
Dividends per common share $  0.10  $  0.095  $  0.195  $  0.180 
Weighted average shares - basic    47,465     41,238     47,410     41,084 
Weighted average shares - diluted    47,674     41,406     47,646     41,245 
           
SELECTED OPERATING RATIOS        
Annualized return on average assets  1.02%  0.93%  1.00%  0.85%
Annualized return on average common equity 9.49%  9.04%  9.26%  8.23%
Annualized return on average tangible common equity (1) 12.58%  12.63%  12.31%  11.53%
Annualized return on interest-earning assets 3.88%  3.85%  3.83%  3.86%
Annualized cost of interest-bearing liabilities 0.63%  0.50%  0.62%  0.50%
Annualized net interest spread  3.25%  3.35%  3.22%  3.36%
Annualized net interest margin  3.41%  3.47%  3.37%  3.48%
Efficiency ratio (1)   52.64%  56.29%  54.44%  58.34%
Stockholders' equity to total assets      10.58%  10.18%
Book value per common share     $  11.99  $  11.03 
Tangible book value per common share (1)    $  9.05  $  7.93 
Tangible common equity to tangible assets (1)     8.20%  7.53%
           
ASSET QUALITY RATIOS     6/30/2017 6/30/2016
Ratio of allowance for loan and lease losses to total loans and leases    0.81%  0.89%
Non-performing loans and leases to total loans and leases     0.40%  0.72%
Non-performing assets to total assets       0.33%  0.59%
Annualized net charge-offs to average loans and leases     0.07%  0.14%
           
SELECTED BALANCE SHEET DATA AT PERIOD-END   6/30/2017 6/30/2016
Loans and leases      $  4,054,276  $  3,454,304 
Allowance for loan and lease losses        (32,823)    (30,667)
Investment securities         830,531     602,408 
Total assets          5,362,187     4,467,860 
Total deposits         4,227,204     3,537,331 
Short-term borrowings         118,487     123,662 
Other borrowings         417,093     326,009 
Stockholders' equity         567,545     454,934 
           
SELECTED AVERAGE BALANCE SHEET DATAFor the Three Months Ended For the Six Months Ended
    6/30/2017 6/30/2016 6/30/2017 6/30/2016
Loans and leases  $  4,011,325  $  3,412,503  $  3,958,564  $  3,348,421 
Investment securities     837,075     575,206     813,690     572,894 
Interest-earning assets     4,907,488     4,094,575     4,866,897     4,013,868 
Total assets     5,241,155     4,403,589     5,197,765     4,326,030 
Noninterest-bearing demand deposits    954,966     801,488     938,460     780,843 
Savings deposits     492,991     485,580     491,890     480,725 
Interest-bearing transaction accounts    2,295,256     1,775,129     2,268,752     1,728,855 
Time deposits     559,665     487,169     557,479     476,097 
Total deposits     4,302,878     3,549,366     4,256,581     3,466,520 
Short-term borrowings     52,951     31,591     40,722     40,963 
Other borrowings     291,882     346,347     312,203     347,718 
Total interest-bearing liabilities    3,692,745     3,125,815     3,671,047     3,074,357 
Stockholders' equity     565,211     450,806     559,528     445,815 
           
(1) See Supplemental Information - Non-GAAP Financial Measures      

 

            
Lakeland Bancorp, Inc.  
Consolidated Statements of Operations 
(Unaudited) 
            
      Three Months Ended June 30, Six Months Ended June 30, 
(Dollars in thousands, except per share amounts)     2017  2016  2017 2016 
            
INTEREST INCOME          
Loans, leases and fees    $  42,740 $  35,800 $  83,151$  69,921 
Federal funds sold and interest-bearing deposits with banks   132   124   408  199 
Taxable investment securities and other    3,818   2,696   7,417  5,658 
Tax exempt investment securities     522   417   1,032  830 
 TOTAL INTEREST INCOME     47,212   39,037   92,008  76,608 
INTEREST EXPENSE          
Deposits       3,784   2,404   7,118  4,609 
Federal funds purchased and securities sold under agreements to repurchase   98   9   108  47 
Other borrowings      1,909   1,522   4,038  3,000 
 TOTAL INTEREST EXPENSE    5,791   3,935   11,264  7,656 
NET INTEREST INCOME     41,421   35,102   80,744  68,952 
Provision for loan and lease losses       1,827    1,010    3,045   2,085 
 NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES  39,594   34,092   77,699  66,867 
NONINTEREST INCOME         
Service charges on deposit accounts     2,674   2,523   5,129  4,965 
Commissions and fees      1,135   1,099   2,291  2,078 
Gains (losses) on sales of investment securities     (15)   -    2,524  370 
Gains on sales of loans      471   425   869  845 
Income on bank owned life insurance     500   414   926  822 
Other income       1,346   424   2,466  672 
 TOTAL NONINTEREST INCOME      6,111   4,885   14,205  9,752 
NONINTEREST EXPENSE         
Salaries and employee benefit expense     15,096   13,091   30,513  27,176 
Net occupancy expense      2,507   2,341   5,343  5,029 
Furniture and equipment expense     1,996   2,082   4,093  4,028 
Stationary, supplies and postage expense    572   416   1,015  859 
Marketing expense      508   385   909  694 
FDIC insurance expense      425   681   743  1,271 
ATM and debit card expense     517   383   958  729 
Telecommunications expense     372   386   776  810 
Data processing expense      502   459   1,055  979 
Other real estate owned and other repossessed assets expense   4   26   41  65 
Long-term debt prepayment fee    -  -    2,828 - 
Merger related expenses     -    685  -   2,406 
Core deposit intangible amortization      190    164    385   331 
Other expenses       2,677   2,616   5,177  4,762 
 TOTAL NONINTEREST EXPENSE   25,366   23,715   53,836  49,139 
INCOME BEFORE PROVISION FOR INCOME TAXES       20,339   15,262   38,068  27,480 
Provision for income taxes       6,969   5,132   12,386  9,242 
NET INCOME     $  13,370 $  10,130 $  25,682$  18,238 
EARNINGS PER COMMON SHARE        
Basic     $  0.28 $  0.24 $  0.54$  0.44 
Diluted     $  0.28 $  0.24 $  0.53$  0.44 
DIVIDENDS PER COMMON SHARE     $  0.100 $  0.095 $  0.195$  0.180 
            

 

Lakeland Bancorp, Inc.
Consolidated Balance Sheets
        
     June 30, December 31,
(Dollars in thousands)    2017   2016 
     (Unaudited)  
ASSETS       
Cash    $  169,109  $  169,149 
Interest-bearing deposits due from banks     16,573   6,652 
  Total cash and cash equivalents      185,682    175,801 
        
Investment securities available for sale, at fair value   673,164    606,704 
Investment securities held to maturity; fair value of $138,619 at June 30, 2017   
  and $146,990 at December 31, 2016    138,468    147,614 
Federal Home Loan Bank and other membership stocks, at cost  18,899    15,099 
Loans held for sale      877     1,742 
Loans and leases:      
  Commercial, real estate     2,955,596    2,767,710 
  Commercial, industrial and other    352,977    350,228 
  Leases      70,295    67,016 
  Residential mortgages     337,765    349,581 
  Consumer and home equity    337,643    339,360 
  Total loans and leases    4,054,276    3,873,895 
  Net deferred costs (fees)    (3,545)    (3,297)
  Allowance for loan and lease losses   (32,823)  (31,245)
  Net loans and leases      4,017,908    3,839,353 
Premises and equipment, net     50,411    52,236 
Accrued interest receivable    13,192    12,557 
Goodwill       136,433    135,747 
Other identifiable intangible assets    2,631     3,344 
Bank owned life insurance     89,339    72,384 
Other assets       35,183    30,550 
  TOTAL ASSETS    $  5,362,187  $  5,093,131 
        
LIABILITIES AND STOCKHOLDERS' EQUITY    
LIABILITIES      
Deposits:       
  Noninterest-bearing   $  978,668  $  927,270 
  Savings and interest-bearing transaction accounts   2,682,291    2,620,657 
  Time deposits $250 thousand and under      408,228    404,680 
  Time deposits over $250 thousand      158,017    140,228 
       Total deposits      4,227,204    4,092,835 
Federal funds purchased and securities sold under agreements to repurchase  118,487    56,354 
Other borrowings     312,251    260,866 
Subordinated debentures     104,842     104,784 
Other liabilities        31,858    28,248 
  TOTAL LIABILITIES     4,794,642    4,543,087 
        
STOCKHOLDERS' EQUITY     
Common stock, no par value; authorized 70,000,000 shares;    
  issued 47,352,725 shares at June 30, 2017       
  and 47,222,914 shares at December 31, 2016      511,967    510,861 
Retained earnings     54,969    38,590 
Accumulated other comprehensive gain     609    593 
  TOTAL STOCKHOLDERS' EQUITY      567,545    550,044 
  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY    $  5,362,187  $  5,093,131 
        

 

Lakeland Bancorp, Inc. 
Financial Highlights 
(Unaudited) 
         
   For the Quarter Ended 
   June 30,Mar 31,Dec 31,Sept 30,June 30, 
(Dollars in thousands, except per share data)  2017  2017  2016  2016  2016  
         
INCOME STATEMENT       
Net interest income $  41,421 $  39,323 $  38,179 $  38,518 $  35,102  
Provision for loan and lease losses    (1,827)   (1,218)   (375)   (1,763)   (1,010) 
Other noninterest income    5,655    5,157    4,636    5,664    4,460  
Gains (losses) on sales of investment securities    (15)   2,539  -  -  -  
Gains on sales of loans    471    398    525    753    425  
Long-term debt prepayment fee  -    (2,828) -  -  -  
Merger related expenses  -  -  -    (1,697)   (685) 
Other noninterest expense    (25,366)   (25,642)   (24,772)   (24,309)   (23,030) 
  Pretax income    20,339    17,729    18,193    17,166    15,262  
Provision for income taxes    (6,969)   (5,417)   (6,240)   (5,839)   (5,132) 
  Net income $  13,370 $  12,312 $  11,953 $  11,327 $  10,130  
         
Basic earnings per common share $  0.28 $  0.26 $  0.26 $  0.25 $  0.24  
Diluted earnings per common share $  0.28 $  0.26 $  0.26 $  0.25 $  0.24  
Dividends per common share $  0.10 $  0.095 $  0.095 $  0.095 $  0.095  
Dividends paid $  4,775 $  4,527 $  4,265 $  4,261 $  3,955  
Weighted average shares - basic    47,465    47,354    45,002    44,439    41,238  
Weighted average shares - diluted    47,674    47,623    45,257    44,659    41,406  
         
SELECTED OPERATING RATIOS       
Annualized return on average assets   1.02% 0.97% 0.95% 0.94% 0.93% 
Annualized return on average common equity   9.49% 9.02% 9.31% 9.10% 9.04% 
Annualized return on average tangible common equity (1) 12.58% 12.04% 12.83% 12.68% 12.63% 
Annualized net interest margin  3.41% 3.33% 3.27% 3.45% 3.47% 
Efficiency ratio (1)  52.64% 56.36% 56.35% 53.35% 56.29% 
Common stockholders' equity to total assets  10.58% 10.63% 10.80% 10.17% 10.18% 
Tangible common equity to tangible assets (1)  8.20% 8.20% 8.30% 7.53% 7.53% 
Tier 1 risk-based ratio  10.77% 10.73% 10.85% 9.70% 9.73% 
Total risk-based ratio  13.32% 13.29% 13.48% 12.40% 10.65% 
Tier 1 leverage ratio  8.99% 8.97% 9.07% 8.26% 8.24% 
Common equity tier 1 capital ratio  10.06% 10.01% 10.11% 8.94% 8.90% 
Book value per common share $  11.99 $  11.78 $  11.65 $  11.22 $  11.03  
Tangible book value per common share (1) $  9.05 $  8.84 $  8.70 $  8.07 $  7.93  
         
(1) See Supplemental Information - Non-GAAP Financial Measures     
         

 

         
Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
         
    For the Quarter Ended
    June 30,Mar 31,Dec 31,Sept 30,June 30,
(Dollars in thousands)   2017  2017  2016  2016  2016 
       
SELECTED BALANCE SHEET DATA AT PERIOD-END    
Loans and leases  $  4,054,276 $  3,974,718 $  3,873,895 $  3,794,519 $  3,454,304 
Allowance for loan and lease losses    (32,823)   (31,590)   (31,245)   (31,369)   (30,667)
Investment securities     830,531    847,833    769,417    638,091    602,408 
Total assets      5,362,187    5,247,815    5,093,131    4,904,291    4,467,860 
Total deposits     4,227,204    4,293,393    4,092,835    3,941,742    3,537,331 
Short-term borrowings     118,487    84,850    56,354    29,699    123,662 
Other borrowings     417,093    278,238    365,650    398,671    326,009 
Stockholders' equity     567,545    557,642    550,044    498,722    454,934 
         
LOANS AND LEASES       
Commercial, real estate  $  2,955,596 $  2,881,972 $  2,767,710 $  2,675,154 $  2,353,125 
Commercial, industrial and other    352,977    342,264    350,228    339,291    313,062 
Leases      70,295    67,488    67,016    65,659    63,338 
Residential mortgages     337,765    344,890    349,581    370,766    383,823 
Consumer and home equity    337,643    338,104    339,360    343,649    340,956 
  Total loans and leases  $  4,054,276 $  3,974,718 $  3,873,895 $  3,794,519 $  3,454,304 
         
DEPOSITS        
Noninterest-bearing  $  978,668 $  924,581 $  927,270 $  931,385 $  824,077 
Savings and interest-bearing transaction accounts   2,682,291    2,809,705    2,620,657    2,471,097    2,235,918 
Time deposits     566,245    559,107    544,908    539,260    477,336 
  Total deposits  $  4,227,204 $  4,293,393 $  4,092,835 $  3,941,742 $  3,537,331 
         
SELECTED AVERAGE BALANCE SHEET DATA    
Loans and leases  $  4,011,325 $  3,905,216 $  3,806,588 $  3,743,434 $  3,412,503 
Investment securities     837,075    790,046    683,986    606,779    575,206 
Interest-earning assets     4,907,488    4,825,855    4,680,156    4,467,524    4,094,575 
Total assets     5,241,155    5,153,893    5,015,439    4,805,381    4,403,588 
Noninterest-bearing demand deposits    954,966    921,770    951,418    895,851    801,488 
Savings deposits     492,991    490,777    490,556    487,918    485,580 
Interest-bearing transaction accounts    2,295,256    2,241,954    2,072,154    1,988,405    1,775,129 
Time deposits     559,665    555,270    539,870    533,224    487,169 
Total deposits     4,302,878    4,209,771    4,053,998    3,905,398    3,549,366 
Short-term borrowings     52,951    28,358    27,538    35,608    31,591 
Other borrowings     291,882    332,750    392,789    339,204    346,347 
Total interest-bearing liabilities    3,692,745    3,649,109    3,522,907    3,384,359    3,125,815 
Stockholders' equity     565,211    553,782    510,562    495,343    450,806 
      

 

          
Lakeland Bancorp, Inc. 
Financial Highlights 
(Unaudited) 
          
    For the Quarter Ended 
    June 30,Mar 31,Dec 31,Sept 30,June 30, 
(Dollars in thousands)   2017  2017  2016  2016  2016  
       
AVERAGE ANNUALIZED YIELDS (TAXABLE EQUIVALENT BASIS)     
ASSETS         
Loans and leases   4.27% 4.20% 4.19% 4.23% 4.22% 
Taxable investment securities and other  2.11% 2.13% 2.00% 2.06% 2.18% 
Tax-exempt securities   2.86% 2.78% 2.75% 3.01% 3.15% 
Federal funds sold and interest-bearing cash accounts 0.89% 0.85% 0.48% 0.48% 0.46% 
  Total interest-earning assets  3.88% 3.78% 3.74% 3.85% 3.85% 
          
LIABILITIES        
Savings accounts   0.06% 0.06% 0.06% 0.06% 0.05% 
Interest-bearing transaction accounts  0.44% 0.38% 0.35% 0.34% 0.31% 
Time deposits   0.86% 0.83% 0.84% 0.81% 0.79% 
Borrowings    2.30% 2.37% 2.37% 1.71% 1.62% 
  Total interest-bearing liabilities  0.63% 0.60% 0.62% 0.53% 0.50% 
Net interest spread (taxable equivalent basis) 3.25% 3.18% 3.12% 3.32% 3.35% 
          
Annualized net interest margin (taxable equivalent basis) 3.41% 3.33% 3.27% 3.45% 3.47% 
Annualized cost of deposits  0.35% 0.32% 0.30% 0.29% 0.27% 
          
ASSET QUALITY DATA       
ALLOWANCE FOR LOAN AND LEASE LOSSES      
Balance at beginning of period $  31,590 $  31,245 $  31,369 $  30,667 $  30,553  
Provision for loan and lease losses    1,827    1,218    375    1,763    1,010  
Charge-offs      (870)   (1,360)   (795)   (1,273)   (1,045) 
Recoveries      276    487    296    212    149  
  Balance at end of period  $  32,823 $  31,590 $  31,245 $  31,369 $  30,667  
          
NET LOAN AND LEASE CHARGE-OFFS (RECOVERIES)      
Commercial, real estate  $  (67)$  595 $  (87)$  (11)$  113  
Commercial, industrial and other    44    68    (96)   (30)   137  
Leases      92    39    42    40    183  
Residential mortgages     169    141    231    385    213  
Consumer and home equity    356    30    409    677    250  
  Net charge-offs (recoveries) $  594 $  873 $  499 $  1,061 $  896  
          
NON-PERFORMING ASSETS       
Commercial, real estate  $  10,240 $  10,443 $  11,885 $  13,068 $  12,554  
Commercial, industrial and other    378    136    167    39    41  
Leases      81    179    153    78    159  
Residential mortgages     3,857    4,715    6,048    7,264    8,865  
Consumer and home equity    1,689    2,270    2,151    2,210    3,325  
  Total non-accrual loans and leases    16,245    17,743    20,404    22,659    24,944  
Property acquired through foreclosure or repossession   1,415    710    1,072    1,918    1,594  
  Total non-performing assets $  17,660 $  18,453 $  21,476 $  24,577 $  26,538  
          
Loans past due 90 days or more and still accruing$  20 $- $  10 $  10 $  42  
Loans restructured and still accruing $  11,697 $  11,553 $  8,802 $  9,251 $  9,509  
          
Ratio of allowance for loan and lease losses to total loans and leases    0.81% 0.79% 0.81% 0.83% 0.89% 
Total non-accrual loans and leases to total loans and leases    0.40% 0.45% 0.53% 0.60% 0.72% 
Total non-performing assets to total assets     0.33% 0.35% 0.42% 0.50% 0.59% 
Annualized net charge-offs (recoveries) to average loans and leases    0.06% 0.09% 0.05% 0.11% 0.11% 
          

 

Lakeland Bancorp, Inc.
Supplemental Information - Non-GAAP Financial Measures
(Unaudited)
         
    At or for the Quarter Ended
    June 30,Mar 31,Dec 31,Sept 30,June 30,
(Dollars in thousands, except per share amounts) 2017  2017  2016  2016  2016 
         
CALCULATION OF TANGIBLE BOOK VALUE PER COMMON SHARE     
Total common stockholders' equity at end of period - GAAP$  567,545 $  557,642 $  550,044 $  498,722 $  454,934 
Less:  Goodwill      136,433    135,747    135,747    136,392    125,285 
Less:  Other identifiable intangible assets    2,631    3,149    3,344    3,545    2,728 
  Total tangible common stockholders' equity at end of period - Non-GAAP$  428,481 $  418,746 $  410,953 $  358,785 $  326,921 
         
Shares outstanding at end of period    47,353    47,350    47,223    44,443    41,241 
         
Book value per share - GAAP  $  11.99 $  11.78 $  11.65 $  11.22 $  11.03 
         
Tangible book value per share - Non-GAAP $  9.05 $  8.84 $  8.70 $  8.07 $  7.93 
         
CALCULATION OF TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS     
Total tangible common stockholders' equity at end of period - Non-GAAP$  428,481 $  418,746 $  410,953 $  358,785 $  326,921 
         
Total assets at end of period - GAAP $  5,362,187 $  5,247,815 $  5,093,131 $  4,904,291 $  4,467,860 
Less:  Goodwill      136,433    135,747    135,747    136,392    125,285 
Less:  Other identifiable intangible assets    2,631    3,149    3,344    3,545    2,728 
  Total tangible assets at end of period - Non-GAAP$  5,223,123 $  5,108,919 $  4,954,040 $  4,764,354 $  4,339,847 
         
Common equity to assets - GAAP   10.58% 10.63% 10.80% 10.17% 10.18%
         
Tangible common equity to tangible assets - Non-GAAP 8.20% 8.20% 8.30% 7.53% 7.53%
         
CALCULATION OF RETURN ON AVERAGE TANGIBLE COMMON EQUITY     
Net income - GAAP   $  13,370 $  12,312 $  11,953 $  11,327 $  10,130 
         
Total average common stockholders' equity - GAAP$  565,211 $  553,782 $  510,562 $  495,343 $  450,806 
Less:  Average goodwill     135,755    135,747    136,385    136,392    125,424 
Less:  Average other identifiable intangible assets   3,069    3,276    3,459    3,685    2,828 
  Total average tangible common stockholders' equity - Non-GAAP$  426,387 $  414,759 $  370,718 $  355,266 $  322,554 
         
Return on average common stockholders' equity - GAAP 9.49% 9.02% 9.31% 9.10% 9.04%
         
Return on average tangible common stockholders' equity - Non-GAAP 12.58% 12.04% 12.83% 12.68% 12.63%
         
CALCULATION OF EFFICIENCY RATIO      
Total noninterest expense  $  25,366 $  28,470 $  24,772 $  26,006 $  23,715 
Amortization of core deposit intangibles    (190)   (195)   (202)   (201)   (164)
Long-term debt prepayment fee   -    (2,828) -  -  - 
Merger related expenses   -  -  -    (1,697)   (685)
Provision for unfunded lending commitments  -  -  -  -    (230)
  Noninterest expense, as adjusted  $  25,176 $  25,447 $  24,570 $  24,108 $  22,636 
         
Net interest income   $  41,421 $  39,323 $  38,179 $  38,518 $  35,102 
Total noninterest income     6,111    8,094    5,161    6,417    4,885 
  Total revenue      47,532    47,417    43,340    44,935    39,987 
Tax-equivalent adjustment on municipal securities   281    275    262    253    225 
(Gains) losses on sales of investment securities   15    (2,539)   -     -     -  
  Total revenue, as adjusted  $  47,828 $  45,153 $  43,602 $  45,188 $  40,212 
         
Efficiency ratio - Non-GAAP   52.64% 56.36% 56.35% 53.35% 56.29%
         
    For the Quarter EndedFor the Six Months Ended 
    June 30,June 30,June 30,June 30, 
(Dollars in thousands, except per share amounts) 2017  2016  2017  2016  
         
RECONCILIATION OF EARNINGS PER SHARE     
Net income - GAAP   $  13,370 $  10,130 $  25,682 $  18,238  
         
NON-ROUTINE TRANSACTIONS, NET OF TAX     
Tax deductible merger related expenses  -    175  -    986  
Non-tax deductible merger related expenses  -    389  -    739  
  Net effect of non-routine transactions  -    564  -    1,725  
         
Net income available to common shareholders excluding non-routine transactions   13,370    10,694    25,682    19,963  
Less:  Earnings allocated to participating securities   (120)   (106)   (241)   (161) 
    $  13,250 $  10,588 $  25,441 $  19,802  
         
Weighted average shares - Basic     47,465    41,238    47,410    41,084  
Weighted average shares - Diluted    47,674    41,406    47,646    41,245  
         
Basic earnings per share - GAAP  $  0.28 $  0.24 $  0.54 $  0.44  
Diluted earnings per share - GAAP $  0.28 $  0.24 $  0.53 $  0.44  
         
Basic earnings per share, adjusted for non-routine transactions$  0.28 $  0.26 $  0.54 $  0.48  
Diluted earnings per share, adjusted for non-routine transactions (Core EPS)
$  0.28 $  0.26 $  0.53 $  0.48  
         

 

Lakeland Bancorp, Inc.
Supplemental Information - Non-GAAP Financial Measures
(Unaudited)
    For the Six Months Ended,
    June 30,June 30,
(Dollars in thousands)    2017  2016 
      
CALCULATION OF RETURN ON AVERAGE TANGIBLE COMMON EQUITY   
Net income - GAAP   $  25,682 $  18,238 
      
Total average common stockholders' equity - GAAP  $  559,528 $  445,815 
Less:  Average goodwill      135,751    124,923 
Less:  Average other identifiable intangible assets     3,172    2,874 
  Total average tangible common stockholders' equity - Non-GAAP $  420,605 $  318,018 
      
Return on average common stockholders' equity - GAAP   9.26% 8.23%
      
Return on average tangible common stockholders' equity - Non-GAAP  12.31% 11.53%
      
CALCULATION OF EFFICIENCY RATIO     
Total noninterest expense   $  53,836 $  49,139 
      
Amortization of core deposit intangibles      (385)   (331)
Long-term debt prepayment fee      (2,828) - 
Merger related expenses    -    (2,406)
Provision for unfunded lending commitments    -    (438)
  Noninterest expense, as adjusted   $  50,623 $  45,964 
      
Net interest income   $  80,744 $  68,952 
Noninterest income      14,205    9,752 
  Total revenue      94,949    78,704 
Tax-equivalent adjustment on municipal securities     556    447 
Gains on sales of investment securities      (2,524)   (370)
  Total revenue, as adjusted   $  92,981 $  78,781 
      
Efficiency ratio - Non-GAAP    54.44% 58.34%
      

 

 


            

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