OAK RIDGE, N.J., Oct. 22, 2020 (GLOBE NEWSWIRE) -- Lakeland Bancorp, Inc. (NASDAQ: LBAI) (the “Company”), the parent company of Lakeland Bank (“Lakeland”), reported net income of $14.4 million and earnings per diluted share ("EPS") of $0.28 for the three months ended September 30, 2020 compared to net income of $18.9 million and diluted EPS of $0.37 for the third quarter of 2019. For the third quarter of 2020, annualized return on average assets was 0.76%, annualized return on average common equity was 7.64% and annualized return on average tangible common equity was 9.71%.

For the nine months ended September 30, 2020, the Company reported net income of $38.7 million and earnings per diluted share ("EPS") of $0.76 compared to net income of $52.0 million and diluted EPS of $1.02 for the first nine months of 2019. For the first nine months of 2020, annualized return on average assets was 0.73%, annualized return on average common equity was 6.95% and annualized return on average tangible common equity was 8.86%.

The third quarter and year-to-date results were adversely impacted by provisions for loan losses of $8.0 million and $26.2 million, respectively, compared to $536,000 and $1.0 million for the same periods last year. The increased provision for the first nine months of 2020 was primarily due to the impact of COVID-19 on certain qualitative factors and loans on payment deferment resulting in approximately 75% of the provision. The remainder of the provision is attributable to loan growth, a change in the loan portfolio composition and a change in loss rates. As of September 30, 2020, the ratio of the allowance for loan loss to total loans was 1.11% compared to 0.78% as of December 31, 2019. The allowance for loan losses to total loans less Paycheck Protection Program ("PPP") loans of $325.1 million, was 1.18% as of September 30, 2020.

Thomas Shara, Lakeland Bancorp’s President and CEO commented, "We continue to be a trusted partner for our customers during these uncertain times with our loans growing this quarter by $86 million or 1.5% and year-to-date growth of 7.4% excluding Payment Protection Plan loans, while deposits grew this quarter by $141 million or 2.3% and year-to-date growth of 18%. In addition, we recorded a lower provision for loan loss this quarter as our asset quality remains strong. Loans on deferred payment status decreased to 2.7% of total loans at September 30, 2020 from 19% at June 30, 2020 and loan charge-offs remain negligible. In light of the customer preference to utilize digital banking channels along with a decrease in branch transactions, we will be closing three branches representing 6% of our branch network."

COVID-19
As part of Lakeland’s response to COVID-19, we initiated remote working plans and encouraged the use of our mobile and online banking alternatives. To assist COVID-19 impacted borrowers, we offered temporary payment deferrals on commercial, mortgage and consumer loans. At September 30, 2020, we have on deferral, approximately $149 million in commercial loans (includes commercial loans secured by real estate, commercial and industrial and other loans), $3 million in equipment finance loans and $3 million in residential mortgage and consumer loans, compared to $927 million, $40 million and $53 million, respectively, at June 30, 2020. The reduction in deferrals from June 30, 2020 to September 30, 2020 was due primarily to borrowers resuming their regular payment schedule. We also participated in the Small Business Administration Paycheck Protection Program ("PPP") to help strengthen local businesses and preserve jobs in our communities and have funded 2,066 loans totaling $326.6 million with $11.1 million in related fees, as well as $1.1 million in deferred costs.

Net Interest Margin and Net Interest Income

Net interest margin for the third quarter of 2020 of 2.96% decreased 29 and 10 basis points, respectively, compared to the third quarter of 2019 and the second quarter of 2020. Net interest margin for the first nine months of 2020 of 3.09% compared to 3.35% for the same period in 2019. The decrease in net interest margin was due primarily to a decrease in the yield on interest-earning assets partially offset by a decrease in the cost of interest-bearing liabilities.

The yield on interest-earning assets for the third quarter of 2020 was 3.49% compared to 4.32% for the third quarter of 2019 and 3.69% for the second quarter of 2020. The yield on interest-earning assets for the first nine months of 2020 was 3.77% compared to 4.41% during the same period in 2019. The current quarter and year-to-date decrease in yield on interest-earning assets, when compared to the prior periods, was due primarily to a reduction in the yield on loans due to decreases in the prime rate and LIBOR during 2019 and 2020, an increase in lower yielding federal funds sold, as well as the origination of PPP loans during the second quarter of 2020, which earn an effective yield of 2.50% including amortization of fees and costs.

The cost of interest-bearing liabilities for the third quarter of 2020 was 0.72% compared to 1.41% for the third quarter of 2019 and 0.86% for the second quarter of 2020. The cost of interest-bearing liabilities for the first nine months of 2020 was 0.91% compared to 1.39% during the same period in 2019. The cost of interest-bearing transaction accounts, time deposits and borrowings has decreased since 2019 largely driven by reductions in market interest rates.

Net interest income for the third quarter of 2020 of $52.1 million increased $3.5 million and $1.6 million, respectively, compared to the third quarter of 2019 and the second quarter of 2020. Net interest income for the first nine months of 2020 of $152.6 million compared to $146.5 million for the first nine months of 2019. The increase in net interest income compared to prior periods was due primarily to the growth in the volume of interest-earning assets which was somewhat offset by a decrease in yield on interest-earning assets.

Noninterest Income

Noninterest income increased $73,000 to $6.8 million for the third quarter of 2020 from $6.7 million for the third quarter of 2019. Gains on sales of loans for the third quarter of 2020 increased $951,000 compared to the third quarter of 2019 due primarily to increased volume driven by lower interest rates, while commissions and fees for the third quarter of 2020 increased $122,000 due primarily to increases in mortgage application fees and commercial loan fees. Service charges on deposit accounts for the third quarter of 2020 decreased $563,000 compared to the third quarter of 2019 due primarily to changes in customer behavior resulting from the pandemic. Third quarter 2020 results also included losses on equity securities of $170,000 compared to a gain of $72,000 during the same period in 2019.

For the first nine months of 2020, noninterest income increased $1.5 million to $20.3 million compared to the first nine months of 2019 primarily due to increases in swap income and gains on sales of loans which increased $2.6 million and $1.3 million, respectively, resulting from increased volume driven by lower interest rates. The first nine months of 2020 included gains on sales of investment securities of $342,000 compared to none for the same period last year. Partially offsetting these favorable variances was service charges on deposits which decreased $1.5 million compared to the first nine months of 2019 due to the same reason mentioned in the quarterly comparison. The first nine months of 2020 also included a $625,000 loss on equity securities compared to a gain of $525,000 for the first nine months of 2019.

Noninterest Expense

Noninterest expense totaled $32.1 million for the third quarter of 2020 and increased $2.5 million compared to the third quarter of 2019. Salary and employee benefit expense for the third quarter of 2020 increased $632,000, or 3%, when compared to the same quarter of 2019 as a result of staff additions and normal merit increases. Furniture and equipment expense increased $806,000 compared to the third quarter of 2019 due primarily to an increase in costs associated with the Company's digital strategy initiative. FDIC insurance expense totaled $625,000 for the third quarter of 2020 and increased $1.0 million compared to the same period in 2019. In the third quarter of 2019, $420,000 in previously recorded FDIC expense was reversed due to FDIC assessment credits and no third quarter 2019 accrual was made, resulting from the insurance fund reserve ratio exceeding the required level.

Noninterest expense for the first nine months of 2020 of $96.1 million increased $830,000 compared to the first nine months of 2019. Salary and employee benefit expense increased $2.5 million compared to the first nine months of 2019 due to the same reasons discussed in the quarterly comparison. Furniture and equipment expense and FDIC insurance expense increased $1.9 million and $942,000, respectively, due to the same reasons mentioned in the quarterly comparison. Marketing expenses for the first nine months of 2020 decreased $590,000 due partially to the delay of marketing campaigns resulting from the pandemic. Year-to-date 2019 results included merger related expenses of $3.2 million due to the acquisition of Highlands Bank, while year-to-date 2020 results include a long-term debt prepayment fee of $356,000 resulting from the payoff of $10.0 million in Federal Home Loan Bank debt yielding 2.89%.

Income Tax Expense

The effective tax rate for the third quarter of 2020 was 23.3% compared to 25.3% for the third quarter of 2019. The decreased effective tax rate for the third quarter of 2020 was primarily a result of an increase in tax advantaged items as a percent of pretax income.

Financial Condition

At September 30, 2020, total assets were $7.52 billion, an increase of $810.9 million compared to December 31, 2019. For the nine months ended September 30, 2020, total loans grew $705.8 million, including $325.1 million attributed to PPP loans, to $5.84 billion and investment securities decreased $9.3 million to $909.5 million. On the funding side, total deposits increased $972.7 million to $6.27 billion, while borrowings decreased $261.5 million to $351.2 million. At September 30, 2020, total loans as a percent of total deposits was 93.4%.

Asset Quality

At September 30, 2020, non-performing assets increased to $33.1 million, 0.44% of total assets, compared to $21.7 million, 0.32% of total assets, at December 31, 2019. Non-accrual loans as a percent of total loans increased to 0.57% at September 30, 2020 compared to 0.41% at December 31, 2019. The increase in non-accrual loans from December 31, 2019, related primarily to one loan relationship totaling $9.5 million that was not COVID-19 related. The allowance for loan losses increased to $65.2 million, 1.11% of total loans, at September 30, 2020, compared to $40.0 million, 0.78% of total loans, at December 31, 2019. In the third quarter of 2020, the Company had net charge-offs of $597,000, or 0.04% of average loans, annualized, compared to $543,000, or 0.04%, for the same period in 2019. The provision for loan losses for the third quarter of 2020 was $8.0 million compared to a $536,000 provision for loan losses in the third quarter of 2019.

Capital

At September 30, 2020, stockholders' equity was $753.6 million compared to $725.3 million at December 31, 2019, a 4% increase. Lakeland Bank remains above FDIC “well capitalized” standards, with a Tier 1 leverage ratio of 8.36% at September 30, 2020. The book value per common share and tangible book value per common share increased 6% and 8% to $14.93 and $11.77, respectively, compared to $14.13 and $10.94 at September 30, 2019. At September 30, 2020, the Company’s common equity to assets ratio and tangible common equity to tangible assets ratio was 10.02% and 8.06%, respectively, compared to 10.81% and 8.62% at December 31, 2019. Excluding the impact of the PPP loans of $325.1 million, the Company’s common equity to assets ratio and tangible common equity to tangible assets ratio was 10.47% and 8.44%, respectively, at September 30, 2020. On October 21, 2020, the Company declared a quarterly cash dividend of $0.125 per share to be paid on November 13, 2020, to shareholders of record as of November 3, 2020.

Forward-Looking Statements

The information disclosed in this document includes various forward-looking statements – including the statement regarding the prospective impact of COVID-19 and our plans to close three branches – 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 the Company’s 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; public health crises (such as the governmental, social and economic effects of the novel coronavirus); the nature and timing of actions of the Federal Reserve Board and other regulators; the nature and timing of legislation and regulation affecting the financial services industry; government intervention in the U.S. financial system; changes in federal and state tax laws; changes in levels of market interest rates; pricing pressures on loan and deposit products; credit risks of Lakeland’s lending and equipment financing activities; successful implementation, deployment and upgrades of new and existing technology, systems, services and products; and customers’ acceptance of Lakeland’s products and services.

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 relevant measure to compare the operating performance period to period.

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

Lakeland Bank is the wholly-owned subsidiary of Lakeland Bancorp, Inc. (NASDAQ:LBAI), which has over $7 billion in total assets. With an extensive branch network and commercial lending centers throughout New Jersey and Highland Mills, N.Y., the Bank offers business and retail banking products and services. Business services include commercial loans and lines of credit, commercial real estate loans, loans for healthcare services, asset based lending, equipment financing, small business loans and lines, and cash management services. Consumer services include online and mobile banking, home equity loans and lines, mortgage options and wealth management solutions. Lakeland is proud to be recognized as one of New Jersey’s Best-In-State Banks by Forbes and Statista, rated a 5-Star Bank by Bauer Financial and named one of New Jersey’s 50 Fastest Growing Companies by NJBIZ. Visit LakelandBank.com for more information.

Thomas J. Shara
President & CEO

Thomas F. Splaine
EVP & CFO
973-697-2000


Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
        
 Three Months Ended
September 30,
 Nine Months Ended
September 30,
(Dollars in thousands, except per share amounts)2020 2019 2020 2019
INCOME STATEMENT       
Net interest income$52,134   $48,682   $152,552   $146,486  
Provision for loan losses(8,000)  (536)  (26,223)  (1,044) 
Gains on sales of investment securities      342     
Gains on sales of loans1,437   486   2,562   1,285  
Gain (loss) on equity securities(170)  72   (625)  525  
Other noninterest income5,506   6,142   17,986   17,002  
Long-term debt prepayment fee      (356)    
Merger-related expenses         (3,178) 
Other noninterest expense(32,097)  (29,563)  (95,707)  (92,055) 
Pretax income18,810   25,283   50,531   69,021  
Provision for income taxes(4,383)  (6,409)  (11,861)  (17,064) 
Net income$14,427   $18,874   $38,670   $51,957  
        
Basic earnings per common share$0.28   $0.37   $0.76   $1.02  
Diluted earnings per common share$0.28   $0.37   $0.76   $1.02  
Dividends paid per common share$0.125   $0.125   $0.375   $0.365  
Weighted average shares - basic50,526   50,553   50,544   50,447  
Weighted average shares - diluted50,620   50,694   50,645   50,595  
        
SELECTED OPERATING RATIOS       
Annualized return on average assets0.76 % 1.17 % 0.73 % 1.11 %
Annualized return on average common equity7.64 % 10.61 % 6.95 % 10.07 %
Annualized return on average tangible common equity (1)9.71 % 13.74 % 8.86 % 13.11 %
Annualized yield on interest-earning assets3.49 % 4.32 % 3.77 % 4.41 %
Annualized cost of interest-bearing liabilities0.72 % 1.41 % 0.91 % 1.39 %
Annualized net interest spread2.77 % 2.91 % 2.86 % 3.02 %
Annualized net interest margin2.96 % 3.25 % 3.09 % 3.35 %
Efficiency ratio (1)53.96 % 52.77 % 54.95 % 55.05 %
Stockholders' equity to total assets    10.02 % 10.99 %
Book value per common share    $14.93   $14.13  
Tangible book value per common share (1)    $11.77   $10.94  
Tangible common equity to tangible assets (1)    8.06 % 8.72 %
        
ASSET QUALITY RATIOS    September 30, 2020 September 30, 2019
Ratio of allowance for loan losses to total loans    1.11 % 0.78 %
Non-performing loans to total loans    0.57 % 0.32 %
Non-performing assets to total assets    0.44 % 0.26 %
Annualized net charge-offs to average loans    0.02 %  %
        
(1) See Supplemental Information - Non-GAAP Financial Measures      
        
        
        
        
        
        
        
        
Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
        
(Dollars in thousands)    September 30, 2020 September 30, 2019
SELECTED BALANCE SHEET DATA AT PERIOD-END      
Loans    $5,843,591   $4,923,414  
Allowance for loan losses    65,242   38,655  
Investment securities    909,535   905,078  
Total assets    7,522,184   6,492,474  
Total deposits    6,266,516   5,210,619  
Short-term borrowings    97,874   199,326  
Other borrowings    253,359   284,029  
Stockholders' equity    753,572   713,204  
        
 Three Months Ended
September 30,
 Nine Months Ended
September 30,
 2020 2019 2020 2019
SELECTED AVERAGE BALANCE SHEET DATA       
Loans$5,775,093   $4,937,488   $5,519,621   $4,908,952  
Investment securities873,066   869,734   881,332   860,840  
Interest-earning assets7,009,939   5,947,645   6,599,481   5,852,919  
Total assets7,516,069   6,379,675   7,073,438   6,273,860  
Noninterest-bearing demand deposits1,475,422   1,100,413   1,317,195   1,080,235  
Savings deposits548,662   494,377   523,653   503,260  
Interest-bearing transaction accounts3,086,260   2,678,424   2,942,307   2,599,004  
Time deposits1,176,181   964,159   1,048,115   938,751  
Total deposits6,286,525   5,237,373   5,831,270   5,121,250  
Short-term borrowings58,845   74,042   100,303   104,450  
Other borrowings269,093   287,839   273,567   292,447  
Total interest-bearing liabilities5,139,042   4,498,841   4,887,945   4,437,912  
Stockholders' equity751,099   705,726   743,318   689,538  
        



Lakeland Bancorp, Inc.
Consolidated Statements of Income
(Unaudited)
         
  Three Months Ended
September 30,
 Nine Months Ended
September 30,
(Dollars in thousands, except per share amounts)2020 2019 2020 2019
INTEREST INCOME       
Loans and net deferred fees and costs$56,801   $58,563   $170,483   $175,324 
Federal funds sold and interest-bearing deposits with banks92   695   287   1,297 
Taxable investment securities and other4,139   5,007   14,131   14,865 
Tax exempt investment securities401   361   1,082   1,165 
 TOTAL INTEREST INCOME61,433   64,626   185,983   192,651 
INTEREST EXPENSE       
Deposits7,012   13,267   25,969   37,526 
Federal funds purchased and securities sold under agreements to repurchase27   231   531   1,333 
Other borrowings2,260   2,446   6,931   7,306 
 TOTAL INTEREST EXPENSE9,299   15,944   33,431   46,165 
NET INTEREST INCOME52,134   48,682   152,552   146,486 
Provision for loan losses8,000   536   26,223   1,044 
 NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES44,134   48,146   126,329   145,442 
NONINTEREST INCOME       
Service charges on deposit accounts2,288   2,851   6,663   8,179 
Commissions and fees1,667   1,545   4,503   4,682 
Income on bank owned life insurance670   691   2,000   2,064 
(Loss) gain on equity securities(170)  72   (625)  525 
Gains on sales of loans1,437   486   2,562   1,285 
Gains on sales of investment securities      342    
Swap income624   730   4,234   1,585 
Other income257   325   586   492 
 TOTAL NONINTEREST INCOME6,773   6,700   20,265   18,812 
NONINTEREST EXPENSE       
Salaries and employee benefit expense19,694   19,062   60,198   57,672 
Net occupancy expense2,692   2,767   8,016   8,350 
Furniture and equipment expense2,890   2,084   8,233   6,365 
FDIC insurance expense625   (420)  1,373   431 
Stationary, supplies and postage expense488   366   1,268   1,214 
Marketing expense381   423   840   1,430 
Data processing expense1,211   1,248   3,900   3,800 
Telecommunications expense501   480   1,399   1,451 
ATM and debit card expense615   588   1,738   1,773 
Core deposit intangible amortization250   288   776   893 
Other real estate owned and other repossessed assets expense (income)(2)  29   53   223 
Long-term debt prepayment fee      356    
Merger-related expenses         3,178 
Other expenses2,752   2,648   7,913   8,453 
 TOTAL NONINTEREST EXPENSE32,097   29,563   96,063   95,233 
INCOME BEFORE PROVISION FOR INCOME TAXES18,810   25,283   50,531   69,021 
Provision for income taxes4,383   6,409   11,861   17,064 
NET INCOME$14,427   $18,874   $38,670   $51,957 
EARNINGS PER COMMON SHARE:       
 Basic$0.28   $0.37   $0.76   $1.02 
 Diluted$0.28   $0.37   $0.76   $1.02 
DIVIDENDS PAID PER COMMON SHARE$0.125   $0.125   $0.375   $0.365 



Lakeland Bancorp, Inc.
Consolidated Balance Sheets
    
(Dollars in thousands)September 30, 2020 December 31, 2019
 (Unaudited)  
ASSETS   
Cash$314,591   $275,794 
Interest-bearing deposits due from banks31,337   6,577 
Total cash and cash equivalents345,928   282,371 
Investment securities available for sale, at fair value783,331   755,900 
Equity securities, at fair value14,076   16,473 
Investment securities held to maturity; fair value of $101,205 at September 30, 2020 and $124,904 at December 31, 201997,893   123,975 
Federal Home Loan Bank and other membership stocks, at cost14,235   22,505 
Loans held for sale4,197   1,743 
Loans, net of deferred fees5,843,591   5,137,823 
Less: Allowance for loan losses65,242   40,003 
Net loans and leases5,778,349   5,097,820 
Premises and equipment, net47,810   47,608 
Operating lease right-of-use assets17,028   18,282 
Accrued interest receivable21,480   16,832 
Goodwill156,277   156,277 
Other identifiable intangible assets3,538   4,314 
Bank owned life insurance114,418   112,392 
Other assets123,624   54,744 
TOTAL ASSETS$7,522,184   $6,711,236 
LIABILITIES AND STOCKHOLDERS' EQUITY   
LIABILITIES   
Deposits:   
Noninterest-bearing$1,474,847   $1,124,121 
Savings and interest-bearing transaction accounts3,647,328   3,298,854 
Time deposits $250 thousand and under961,402   652,144 
Time deposits over $250 thousand182,939   218,660 
Total deposits6,266,516   5,293,779 
Federal funds purchased and securities sold under agreements to repurchase97,874   328,658 
Other borrowings135,111   165,816 
Subordinated debentures118,248   118,220 
Operating lease liabilities18,471   19,814 
Other liabilities132,392   59,686 
TOTAL LIABILITIES6,768,612   5,985,973 
STOCKHOLDERS' EQUITY   
Common stock, no par value; authorized shares, 100,000,000; issued shares
  50,598,670 and outstanding shares 50,467,635 at September 30, 2020
  and issued and outstanding shares 50,498,410 at December 31, 2019
561,817   560,263 
Retained earnings182,329   162,752 
Treasury shares, at cost, 131,035 shares at September 30, 2020 and no shares at December 31, 2019(1,452)   
Accumulated other comprehensive income10,878   2,248 
TOTAL STOCKHOLDERS' EQUITY753,572   725,263 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$7,522,184   $6,711,236 



Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
      
 For the Quarter Ended
 September 30,June 30,March 31,December 31,September 30,
(Dollars in thousands, except per share data)20202020202020192019
INCOME STATEMENT     
Net interest income$52,134  $50,519  $49,899  $49,548  $48,682  
Provision for loan losses(8,000) (9,000) (9,223) (1,086) (536) 
Gains on sales of investment securities    342      
Gains on sales of loans1,437  710  415  375  486  
(Loss) gain on equity securities(170) 198  (653) (29) 72  
Other noninterest income5,506  4,573  7,907  7,638  6,142  
Long-term debt prepayment fee    (356)     
Merger-related expenses          
Other noninterest expense(32,097) (31,462) (32,148) (31,523) (29,563) 
Pretax income18,810  15,538  16,183  24,923  25,283  
Provision for income taxes(4,383) (3,687) (3,791) (6,208) (6,409) 
Net income$14,427  $11,851  $12,392  $18,715  $18,874  
      
Basic earnings per common share$0.28  $0.23  $0.24  $0.37  $0.37  
Diluted earnings per common share$0.28  $0.23  $0.24  $0.37  $0.37  
Dividends paid per common share$0.125  $0.125  $0.125  $0.125  $0.125  
Dividends paid$6,365  $6,365  $6,364  $6,363  $6,362  
Weighted average shares - basic50,526  50,522  50,586  50,566  50,553  
Weighted average shares - diluted50,620  50,593  50,728  50,748  50,694  
      
SELECTED OPERATING RATIOS     
Annualized return on average assets0.76 %0.67 %0.76 %1.15 %1.17 %
Annualized return on average common equity7.64 %6.42 %6.77 %10.32 %10.61 %
Annualized return on average tangible common equity (1)9.71 %8.19 %8.65 %13.29 %13.74 %
Annualized net interest margin2.96 %3.06 %3.28 %3.27 %3.25 %
Efficiency ratio (1)53.96 %55.62 %55.30 %54.20 %52.77 %
Common stockholders' equity to total assets10.02 %9.96 %10.51 %10.81 %10.99 %
Tangible common equity to tangible assets (1)8.06 %7.99 %8.41 %8.62 %8.72 %
Tier 1 risk-based ratio10.34 %10.45 %10.61 %11.02 %11.24 %
Total risk-based ratio12.93 %12.98 %13.04 %13.40 %13.70 %
Tier 1 leverage ratio8.36 %8.69 %9.38 %9.41 %9.34 %
Common equity tier 1 capital ratio9.83 %9.93 %10.08 %10.46 %10.66 %
Book value per common share$14.93  $14.77  $14.60  $14.36  $14.13  
Tangible book value per common share (1)$11.77  $11.60  $11.43  $11.18  $10.94  
      
(1) See Supplemental Information - Non-GAAP Financial Measures    



Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
      
 For the Quarter Ended
 September 30,June 30,March 31,December 31,September 30,
(Dollars in thousands)20202020202020192019
SELECTED BALANCE SHEET DATA AT PERIOD-END    
Loans$5,855,024 $5,769,127 $5,331,863 $5,140,940 $4,925,998 
Allowance for loan losses65,242 57,839 48,884 40,003 38,655 
Investment securities909,535 957,985 974,319 918,853 905,078 
Total assets7,522,184 7,488,516 7,013,908 6,711,236 6,492,474 
Total deposits6,266,516 6,125,502 5,455,138 5,293,779 5,210,619 
Short-term borrowings97,874 183,116 419,085 328,658 199,326 
Other borrowings253,359 273,954 258,944 284,036 284,029 
Stockholders' equity753,572 745,489 736,922 725,263 713,204 
      
LOANS     
Commercial, real estate$4,326,074 $4,260,917 $4,073,911 $3,924,762 $3,749,413 
Commercial, industrial and other426,821 402,239 467,346 431,934 391,486 
Paycheck Protection Program325,115 325,999    
Equipment financing116,410 115,651 116,421 111,076 104,689 
Residential mortgages342,583 334,455 334,114 335,191 337,482 
Consumer and home equity318,021 329,866 340,071 337,977 342,928 
Total loans$5,855,024 $5,769,127 $5,331,863 $5,140,940 $4,925,998 
      
DEPOSITS     
Noninterest-bearing$1,474,847 $1,486,273 $1,129,695 $1,124,121 $1,101,083 
Savings and interest-bearing transaction accounts3,647,328 3,510,723 3,241,397 3,298,854 3,196,323 
Time deposits1,144,341 1,128,506 1,084,046 870,804 913,213 
Total deposits$6,266,516 $6,125,502 $5,455,138 $5,293,779 $5,210,619 
      
Total loans to total deposits ratio93.4%94.2%97.7%97.1%94.5%
      
SELECTED AVERAGE BALANCE SHEET DATA     
Loans$5,775,093 $5,572,865 $5,208,097 $5,025,377 $4,937,488 
Investment securities873,066 891,037 879,987 894,698 869,734 
Interest-earning assets7,009,939 6,650,993 6,133,003 6,022,525 5,947,645 
Total assets7,516,069 7,137,529 6,565,302 6,470,082 6,379,675 
Noninterest-bearing demand deposits1,475,422 1,364,785 1,109,638 1,130,192 1,100,413 
Savings deposits548,662 525,224 496,798 492,903 494,377 
Interest-bearing transaction accounts3,086,260 2,908,299 2,830,778 2,814,831 2,678,424 
Time deposits1,176,181 1,093,760 872,998 873,924 964,159 
Total deposits6,286,525 5,892,068 5,310,212 5,311,850 5,237,373 
Short-term borrowings58,845 82,694 159,825 67,097 74,042 
Other borrowings269,093 273,904 277,753 284,049 287,839 
Total interest-bearing liabilities5,139,042 4,883,881 4,638,152 4,532,804 4,498,841 
Stockholders' equity751,099 742,050 736,719 719,292 705,726 



Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
      
 For the Quarter Ended
 September 30,June 30,March 31,December 31,September 30,
(Dollars in thousands)20202020202020192019
AVERAGE ANNUALIZED YIELDS (TAXABLE EQUIVALENT BASIS) AND COSTS   
ASSETS     
Loans3.91 %4.03 %4.47 %4.60 %4.71 %
Taxable investment securities and other2.09 %2.31 %2.56 %2.34 %2.50 %
Tax-exempt securities2.55 %2.70 %2.67 %2.69 %2.70 %
Federal funds sold and interest-bearing cash accounts0.10 %0.08 %1.42 %1.65 %1.98 %
Total interest-earning assets3.49 %3.69 %4.17 %4.21 %4.32 %
LIABILITIES     
Savings accounts0.06 %0.07 %0.07 %0.07 %0.06 %
Interest-bearing transaction accounts0.44 %0.55 %0.97 %1.05 %1.24 %
Time deposits1.19 %1.48 %1.81 %1.93 %2.00 %
Borrowings2.73 %2.62 %2.54 %2.86 %2.89 %
Total interest-bearing liabilities0.72 %0.86 %1.18 %1.26 %1.41 %
Net interest spread (taxable equivalent basis)2.77 %2.83 %2.99 %2.96 %2.91 %
Annualized net interest margin (taxable equivalent basis)2.96 %3.06 %3.28 %3.27 %3.25 %
Annualized cost of deposits0.44 %0.55 %0.82 %0.88 %1.00 %
ASSET QUALITY DATA     
ALLOWANCE FOR LOAN LOSSES     
Balance at beginning of period$57,839  $48,884  $40,003  $38,655  $38,662  
Provision for loan losses8,000  9,000  9,223  1,086  536  
Charge-offs(682) (142) (483) (198) (809) 
Recoveries85  97  141  460  266  
Balance at end of period$65,242  $57,839  $48,884  $40,003  $38,655  
      
NET LOAN CHARGE-OFFS (RECOVERIES)     
Commercial, real estate$298  $(36) $111  $(18) $203  
Commercial, industrial and other173  (13) (31) 13  393  
Equipment financing95  (11) 71  (297)   
Residential mortgages(1)   96    (55) 
Consumer and home equity32  105  95  40  2  
Net charge-offs (recoveries)$597  $45  $342  $(262) $543  
      
NON-PERFORMING ASSETS     
Commercial, real estate$26,145  $25,615  $24,770  $13,281  $9,164  
Commercial, industrial and other1,484  1,546  1,909  1,539  795  
Equipment financing444  400  199  284  271  
Residential mortgages2,695  2,860  2,837  3,428  3,250  
Consumer and home equity2,322  2,432  2,689  2,606  2,437  
Total non-accrual loans33,090  32,853  32,404  21,138  15,917  
Property acquired through foreclosure or repossession  354  393  563  944  
Total non-performing assets$33,090  $33,207  $32,797  $21,701  $16,861  
      
Loans past due 90 days or more and still accruing$165  $58  $99  $  $  
Loans restructured and still accruing$4,299  $4,667  $4,719  $5,650  $5,029  
      
Ratio of allowance for loan losses to total loans1.11 %1.00 %0.92 %0.78 %0.78 %
Total non-accrual loans to total loans0.57 %0.57 %0.61 %0.41 %0.32 %
Total non-performing assets to total assets0.44 %0.44 %0.47 %0.32 %0.26 %
Annualized net charge-offs (recoveries) to average loans0.04 % %0.03 %(0.02)%0.04 %



Lakeland Bancorp, Inc.
Supplemental Information - Non-GAAP Financial Measures
(Unaudited)
 At or for the Quarter Ended
 September 30,June 30,March 31,December 31,September 30,
(Dollars in thousands, except ratios and per share amounts)20202020202020192019
CALCULATION OF TANGIBLE BOOK VALUE PER COMMON SHARE    
Total common stockholders' equity at end of period - GAAP$753,572  $745,489  $736,922  $725,263  $713,204  
Less: Goodwill156,277  156,277  156,277  156,277  156,277  
Less: Other identifiable intangible assets3,538  3,788  4,049  4,314  4,602  
Total tangible common stockholders' equity at end of period - Non-GAAP$593,757  $585,424  $576,596  $564,672  $552,325  
      
Shares outstanding at end of period50,468  50,463  50,462  50,498  50,489  
      
Book value per share - GAAP$14.93  $14.77  $14.60  $14.36  $14.13  
      
Tangible book value per share - Non-GAAP$11.77  $11.60  $11.43  $11.18  $10.94  
      
CALCULATION OF TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS   
Total tangible common stockholders' equity at end of period - Non-GAAP$593,757  $585,424  $576,596  $564,672  $552,325  
      
Total assets at end of period - GAAP$7,522,184  $7,488,516  $7,013,908  $6,711,236  $6,492,474  
Less: Goodwill156,277  156,277  156,277  156,277  156,277  
Less: Other identifiable intangible assets3,538  3,788  4,049  4,314  4,602  
Total tangible assets at end of period - Non-GAAP$7,362,369  $7,328,451  $6,853,582  $6,550,645  $6,331,595  
      
Common equity to assets - GAAP10.02 %9.96 %10.51 %10.81 %10.99 %
      
Tangible common equity to tangible assets - Non-GAAP8.06 %7.99 %8.41 %8.62 %8.72 %
      
CALCULATION OF RETURN ON AVERAGE TANGIBLE COMMON EQUITY   
Net income - GAAP$14,427  $11,851  $12,392  $18,715  $18,874  
      
Total average common stockholders' equity - GAAP$751,099  $742,050  $736,719  $719,292  $705,726  
Less: Average goodwill156,277  156,277  156,277  156,277  155,835  
Less: Average other identifiable intangible assets3,689  3,942  4,205  4,468  4,761  
Total average tangible common stockholders' equity - Non-GAAP$591,133  $581,831  $576,237  $558,547  $545,130  
      
Return on average common stockholders' equity - GAAP7.64 %6.42 %6.77 %10.32 %10.61 %
      
Return on average tangible common stockholders' equity - Non-GAAP9.71 %8.19 %8.65 %13.29 %13.74 %
      
CALCULATION OF EFFICIENCY RATIO     
Total noninterest expense$32,097  $31,462  $32,504  $31,523  $29,563  
Amortization of core deposit intangibles(250) (261) (265) (289) (288) 
Long term debt prepayment fees$  $  $(356)   
Noninterest expense, as adjusted$31,847  $31,201  $31,883  $31,234  $29,275  
      
Net interest income$52,134  $50,519  $49,899  $49,548  $48,682  
Total noninterest income6,773  5,481  8,011  7,984  6,700  
Total revenue58,907  56,000  57,910  57,532  55,382  
Tax-equivalent adjustment on municipal securities108  93  88  91  97  
(Gains) on sales of investment securities    (342)     
Total revenue, as adjusted$59,015  $56,093  $57,656  $57,623  $55,479  
Efficiency ratio - Non-GAAP53.96 %55.62 %55.30 %54.20 %52.77 %



Lakeland Bancorp, Inc.
Supplemental Information - Non-GAAP Financial Measures
(Unaudited)
 For the Nine Months Ended September 30,
(Dollars in thousands)2020 2019
    
CALCULATION OF RETURN ON AVERAGE TANGIBLE COMMON EQUITY   
Net income - GAAP$38,670    $51,957   
    
Total average common stockholders' equity - GAAP$743,318    $689,538   
Less: Average goodwill$156,277    $154,531   
Less: Average other identifiable intangible assets$3,944    $5,022   
Total average tangible common stockholders' equity - Non-GAAP$583,097    $529,985   
    
Return on average common stockholders' equity - GAAP6.95  % 10.07  %
    
Return on average tangible common stockholders' equity - Non-GAAP8.86  % 13.11  %
    
CALCULATION OF EFFICIENCY RATIO   
Total noninterest expense$96,063    $95,233   
Amortization of core deposit intangibles$(776)  $(893) 
Long-term debt prepayment fee$(356)  $—   
Merger-related expenses$—    $(3,178) 
Noninterest expense, as adjusted$94,931    $91,162   
    
Net interest income$152,552    $146,486   
Noninterest income$20,265    $18,812   
Total revenue$172,817    $165,298   
Tax-equivalent adjustment on municipal securities$289    $310   
Gains on sales of investment securities$(342)  $—   
Total revenue, as adjusted$172,764    $165,608   
Efficiency ratio - Non-GAAP54.95  % 55.05  %