OAK RIDGE, N.J., April 28, 2022 (GLOBE NEWSWIRE) -- Lakeland Bancorp, Inc. (NASDAQ: LBAI) (the “Company”), the parent company of Lakeland Bank (“Lakeland”), reported net income of $15.9 million and earnings per diluted share ("EPS") of $0.25 for the three months ended March 31, 2022 compared to net income of $23.2 million and EPS of $0.45 for the three months ended March 31, 2021.
For the first quarter of 2022, annualized return on average assets was 0.64%, annualized return on average common equity was 5.89% and annualized return on average tangible common equity was 7.88%.
First quarter 2022 results were impacted by provision for credit losses of $6.3 million, of which $4.6 million is related to the 1st Constitution non purchased credit deteriorated loans and $1.2 million related to investment securities, compared to a negative provision of $2.6 million in the first quarter of 2021.
The acquisition of 1st Constitution, which was completed on January 6, 2022, added $1.97 billion in total assets, $1.10 billion in total loans and $1.65 billion in total deposits. Goodwill totaled $115.6 million and core deposit intangibles were $9.0 million. The Company’s financial statements reflect the impact of the merger from the date of acquisition, which should be considered when comparing periods.
Thomas Shara, Lakeland Bancorp’s President and CEO commented, “We’re excited to have completed the 1st Constitution Bancorp acquisition which greatly expands our franchise into very attractive markets in New Jersey and welcome the 1st Constitution associates, customers and shareholders to the Lakeland family. During the quarter, we also successfully completed the conversion and integration of 1st Constitution accounts to our operating systems and are excited to provide additional banking services that their customers will benefit from as part of a larger institution.”
Regarding the Company’s financial results, Mr. Shara continued, “Aside from the 1st Constitution merger related items, our quarterly results were solid as our asset quality remained stellar, net interest margin expanded, organic loan growth continued, and pre-provision net revenue increased. Considering our financial strength, the Board authorized an annualized 7% increase in our quarterly cash dividend per share.”
Net Interest Margin and Net Interest Income
Net interest margin for the first quarter of 2022 of 3.02% decreased 17 basis points compared to the first quarter of 2021 and increased four basis points compared to the fourth quarter of 2021. The decrease in net interest margin compared to the first quarter 2021 was due primarily to an increase in lower yielding average federal funds sold and a reduction in yield on investment securities partially offset by a reduction in the cost of interest-bearing liabilities. The increase in net interest margin compared to the linked quarter was due primarily to an increase in the yield on interest-earning assets.
The yield on interest-earning assets for the first quarter of 2022 was 3.25% as compared to 3.56% for the first quarter of 2021 and 3.22% for the fourth quarter of 2021. The current quarter decrease in yield on interest-earning assets, when compared to the first quarter of 2021, was due primarily to a reduction in the yield on securities as well as an increase in average securities and federal funds sold balances. The increase in the yield on interest-earning assets compared to the linked quarter was due primarily to an increase in the yield on loans, increased loan prepayment fees and a reduction in the balance of lower yielding average federal funds sold.
The cost of interest-bearing liabilities for the first quarter of 2022 was 0.34% compared to 0.51% for the first quarter of 2021 and 0.33% for the fourth quarter of 2021. The reduction in the cost of interest-bearing liabilities compared to the first quarter of 2021 was largely driven by reductions in market interest rates as well as a change in the mix of interest-bearing liabilities. Higher cost time deposit balances have decreased while lower cost interest-bearing transaction account balances have increased.
Net interest income for the first quarter of 2022 of $70.4 million increased $13.7 million compared to the first quarter of 2021. The increase in net interest income compared to prior periods was due primarily to growth in the volume of interest-earning assets as well as a reduction in the cost of interest-bearing deposits.
Noninterest Income
For the first quarter of 2022, noninterest income increased $1.0 million to $6.8 million compared to the first quarter of 2021 primarily due to a $718,000 increase in gains on sales of loans driven by an increase in gains on sales of SBA loans. Commissions and fees increased $508,000 due primarily to an increase in commercial and mortgage loan fees. Service charges on deposit accounts increased $330,000 compared to the first three months of 2021 due primarily to increases in debit card interchange income and overdraft charges. Losses on equity securities totaled $485,000 in the first three months of 2022 compared to losses of $144,000 in the first three months of 2021. There was no swap income recorded in the first quarter of 2022 compared to $562,000 during the same period of 2021 due primarily to changes in the yield curve which decreased the demand for swap transactions.
Noninterest Expense
Noninterest expense for the first quarter of 2022 of $50.0 million increased $16.1 million compared to the first quarter of 2021. Excluding $4.6 million in pre-tax merger related expenses, noninterest expense increased $11.5 million primarily due to compensation and employee benefits which increased $7.2 million. The increase in compensation and employee benefits resulted primarily from additions to our staff from the 1st Constitution merger and normal merit increases. Premises and equipment expense increased $1.7 million compared to the first three months of 2021 due primarily to increases in occupancy expense related to the 1st Constitution branches. Data processing expense increased $415,000 due primarily to 1st Constitution data processing costs prior to core system conversion. Other operating expenses in the first quarter of 2022 increased $2.3 million compared to the same period in 2021 due primarily to increased consulting fees, appraisal fees, core deposit intangible amortization and insurance expense.
Income Tax Expense
The effective tax rate for the first quarter of 2022 was 23.9% compared to 25.8% for the first quarter of 2021. The decreased effective tax rate for the first quarter of 2022 was primarily a result of tax advantaged items increasing as a percentage of pretax income due to the decrease in pretax income.
Financial Condition
At March 31, 2022, total assets were $10.28 billion, an increase of $2.08 billion, compared to December 31, 2021, including $1.97 billion acquired from the 1st Constitution acquisition. At March 31, 2022, total loans grew $1.16 billion, including $1.10 billion from 1st Constitution, to $7.14 billion and investment securities increased $517.7 million, including $342.3 million from 1st Constitution, to $2.14 billion. On the funding side, total deposits increased $1.78 billion, including $1.65 billion from 1st Constitution, to $8.75 billion. At March 31, 2022, total loans as a percent of total deposits was 81.6%.
Asset Quality
At March 31, 2022, non-performing assets totaled $19.7 million or 0.19% of total assets compared to $17.0 million or 0.21% of total assets at December 31, 2021. Non-accrual loans as a percent of total loans was 0.28% at March 31, 2022, consistent with December 31, 2021. The allowance for credit losses totaled $67.1 million, 0.94% of total loans, at March 31, 2022, compared to $58.0 million, 0.97% of total loans, at December 31, 2021. The allowance for credit losses included a day one purchase accounting adjustment of $12.1 million for purchased credit impaired loans. In the first quarter of 2022, the Company had net charge-offs of $7.6 million or 0.44% of average loans on an annualized basis, wholly related to 1st Constitution purchased credit deteriorated loans compared to net charge-offs of $1.1 million or 0.07% for the same period in 2021. The provision for credit losses for the first quarter of 2022 was $6.3 million, of which $4.6 million is related to the 1st Constitution non purchased credit deteriorated loans and $1.2 million related to investment securities, compared to a benefit of $2.6 million in the first quarter of 2021.
Capital
At March 31, 2022, stockholders' equity was $1.09 billion compared to $827.0 million at December 31, 2021, a 32% increase, resulting primarily from the issuance of stock in connection with the 1st Constitution acquisition. Lakeland Bank remains above FDIC “well capitalized” standards, with a Tier 1 leverage ratio of 8.97% at March 31, 2022. The book value per common share and tangible book value per common share increased 11% and 3% to $16.82 and $12.45, respectively, compared to $15.18 and $12.03 at March 31, 2021 (see "Supplemental Information - Non-GAAP Financial Measures" for a reconciliation of non-GAAP financial measures, including tangible book value). At March 31, 2022, the Company’s common equity to assets ratio and tangible common equity to tangible assets ratio were 10.60% and 8.07%, respectively, compared to 10.09% and 8.31% at December 31, 2021. On April 26, 2022, the Company declared a quarterly cash dividend of $0.145 per share to be paid on May 18, 2022, to shareholders of record as of May 9, 2022. This represents an annualized 7% increase in the Company's dividend.
Forward-Looking Statements
The information disclosed in this document includes various forward-looking statements 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. Accordingly, you should not place undue reliance on forward-looking statements. In addition to the specific risk factors disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2021, 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 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 the Company’s lending and leasing activities, successful implementation, deployment and upgrades of new and existing technology, systems, services and products, customers’ acceptance of the Company’s products and services, competition, and failure to realize anticipated efficiencies and synergies from the merger of 1st Constitution Bancorp into Lakeland Bancorp and the merger of 1st Constitution Bank into Lakeland Bank. Further, given its ongoing and dynamic nature, it is difficult to predict the continuing effects that the COVID-19 pandemic will have on our business and results of operations. The pandemic and related local and national economic disruption may, among other effects, result in a material adverse change for the demand for our products and services; increased levels of loan delinquencies, problem assets and foreclosures; branch disruptions, unavailability of personnel and increased cybersecurity risks as employees work remotely. 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 U.S. generally accepted accounting principles ("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.
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.
Specifically, 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, 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, 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 "Supplemental Information - Non-GAAP Financial Measures" for a reconciliation of non-GAAP financial measures.
About Lakeland
Lakeland Bank is the wholly-owned subsidiary of Lakeland Bancorp, Inc. (NASDAQ:LBAI), which had $10.28 billion in total assets at March 31, 2022. With an extensive branch network and commercial lending centers throughout New Jersey and Highland Mills, New York, 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 or 973-697-2000 for more information.
| Thomas J. Shara | Thomas F. Splaine | |
| President & CEO | EVP & CFO | |
Lakeland Bancorp, Inc. and Subsidiaries
Consolidated Statements of Income (Unaudited)
| For the Three Months Ended March 31, | |||||||||
| (in thousands, except per share data) | 2022 | 2021 | |||||||
| Interest Income | |||||||||
| Loans and fees | $ | 67,809 | $ | 58,778 | |||||
| Federal funds sold and interest-bearing deposits with banks | 182 | 37 | |||||||
| Taxable investment securities and other | 6,709 | 3,981 | |||||||
| Tax-exempt investment securities | 1,302 | 612 | |||||||
| Total Interest Income | 76,002 | 63,408 | |||||||
| Interest Expense | |||||||||
| Deposits | 4,039 | 5,124 | |||||||
| Federal funds purchased and securities sold under agreements to repurchase | 20 | 23 | |||||||
| Other borrowings | 1,555 | 1,533 | |||||||
| Total Interest Expense | 5,614 | 6,680 | |||||||
| Net Interest Income | 70,388 | 56,728 | |||||||
| Provision (benefit) for credit losses | 6,272 | (2,642 | ) | ||||||
| Net Interest Income after Provision for Credit Losses | 64,116 | 59,370 | |||||||
| Noninterest Income | |||||||||
| Service charges on deposit accounts | 2,626 | 2,296 | |||||||
| Commissions and fees | 2,106 | 1,598 | |||||||
| Income on bank owned life insurance | 830 | 634 | |||||||
| Loss on equity securities | (485 | ) | (144 | ) | |||||
| Gains on sales of loans | 1,426 | 708 | |||||||
| Swap income | — | 562 | |||||||
| Other income | 277 | 105 | |||||||
| Total Noninterest Income | 6,780 | 5,759 | |||||||
| Noninterest Expense | |||||||||
| Compensation and employee benefits | 27,679 | 20,518 | |||||||
| Premises and equipment | 7,972 | 6,318 | |||||||
| FDIC insurance | 672 | 711 | |||||||
| Data processing | 1,670 | 1,255 | |||||||
| Merger related expenses | 4,585 | — | |||||||
| Other operating expenses | 7,381 | 5,101 | |||||||
| Total Noninterest Expense | 49,959 | 33,903 | |||||||
| Income before provision for income taxes | 20,937 | 31,226 | |||||||
| Provision for income taxes | 5,008 | 8,051 | |||||||
| Net Income | $ | 15,929 | $ | 23,175 | |||||
| Per Share of Common Stock | |||||||||
| Basic earnings | $ | 0.25 | $ | 0.45 | |||||
| Diluted earnings | $ | 0.25 | $ | 0.45 | |||||
| Dividends | $ | 0.135 | $ | 0.125 | |||||
| Lakeland Bancorp, Inc. | |||||||
| Consolidated Balance Sheets | |||||||
| (dollars in thousands) | March 31, 2022 | December 31, 2021 | |||||
| (Unaudited) | |||||||
| Assets | |||||||
| Cash | $ | 384,490 | $ | 199,158 | |||
| Interest-bearing deposits due from banks | 37,179 | 29,372 | |||||
| Total cash and cash equivalents | 421,669 | 228,530 | |||||
| Investment securities available for sale, at estimated fair value (allowance for credit losses of $1,267 at March 31, 2022 and $83 at December 31, 2021) | 1,170,938 | 769,956 | |||||
| Investment securities held to maturity (estimated fair value of $859,928 at March 31, 2022 and $815,211 at December 31, 2021, allowance for credit losses of $199 at March 31, 2022 and $181 at December 31, 2021) | 940,786 | 824,956 | |||||
| Equity securities, at fair value | 16,915 | 17,368 | |||||
| Federal Home Loan Bank and other membership stocks, at cost | 10,415 | 9,049 | |||||
| Loans held for sale | 1,906 | 1,943 | |||||
| Loans, net of deferred fees | 7,137,793 | 5,976,148 | |||||
| Less: Allowance for credit losses | 67,112 | 58,047 | |||||
| Net loans | 7,070,681 | 5,918,101 | |||||
| Premises and equipment, net | 58,591 | 45,916 | |||||
| Operating lease right-of-use assets | 27,281 | 15,222 | |||||
| Accrued interest receivable | 24,999 | 19,209 | |||||
| Goodwill | 271,829 | 156,277 | |||||
| Other identifiable intangible assets | 10,842 | 2,420 | |||||
| Bank owned life insurance | 155,700 | 117,356 | |||||
| Other assets | 92,681 | 71,753 | |||||
| Total Assets | $ | 10,275,233 | $ | 8,198,056 | |||
| Liabilities and Stockholders' Equity | |||||||
| Liabilities | |||||||
| Deposits: | |||||||
| Noninterest-bearing | $ | 2,300,030 | $ | 1,732,452 | |||
| Savings and interest-bearing transaction accounts | 5,602,674 | 4,474,144 | |||||
| Time deposits $250 thousand and under | 696,518 | 623,393 | |||||
| Time deposits over $250 thousand | 149,687 | 135,834 | |||||
| Total deposits | 8,748,909 | 6,965,823 | |||||
| Federal funds purchased and securities sold under agreements to repurchase | 102,911 | 106,453 | |||||
| Other borrowings | 25,000 | 25,000 | |||||
| Subordinated debentures | 193,904 | 179,043 | |||||
| Operating lease liabilities | 28,694 | 16,523 | |||||
| Other liabilities | 86,533 | 78,200 | |||||
| Total Liabilities | 9,185,951 | 7,371,042 | |||||
| Stockholders' Equity | |||||||
| Common stock, no par value; authorized 100,000,000 shares; issued 64,910,643 shares and outstanding 64,779,608 shares at March 31, 2022 and issued 50,737,400 shares and outstanding 50,606,365 shares at December 31, 2021 | 852,110 | 565,862 | |||||
| Retained earnings | 266,460 | 259,340 | |||||
| Treasury shares, at cost, 131,035 shares at March 31, 2022 and December 31, 2021 | (1,452 | ) | (1,452 | ) | |||
| Accumulated other comprehensive (loss) income | (27,836 | ) | 3,264 | ||||
| Total Stockholders' Equity | 1,089,282 | 827,014 | |||||
| Total Liabilities and Stockholders' Equity | $ | 10,275,233 | $ | 8,198,056 | |||
| Lakeland Bancorp, Inc. | |||||||||||||||
| Financial Highlights | |||||||||||||||
| (Unaudited) | |||||||||||||||
| For the Quarter Ended | |||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||
| (dollars in thousands, except per share data) | 2022 | 2021 | 2021 | 2021 | 2021 | ||||||||||
| Income Statement | |||||||||||||||
| Net interest income | $ | 70,388 | $ | 59,029 | $ | 59,338 | $ | 59,740 | $ | 56,728 | |||||
| (Provision) benefit for credit losses | (6,272 | ) | (408 | ) | 2,703 | 5,959 | 2,642 | ||||||||
| Gains on sales of investment securities | — | — | — | 9 | — | ||||||||||
| Gains on sales of loans | 1,426 | 399 | 550 | 607 | 708 | ||||||||||
| (Loss) gain on equity securities | (485 | ) | (94 | ) | (58 | ) | 11 | (144 | ) | ||||||
| Other noninterest income | 5,839 | 5,559 | 4,977 | 4,642 | 5,195 | ||||||||||
| Long term debt extinguishment costs | — | — | (831 | ) | — | — | |||||||||
| Merger-related expenses | (4,585 | ) | (710 | ) | (1,072 | ) | — | — | |||||||
| Other noninterest expense | (45,374 | ) | (34,840 | ) | (35,304 | ) | (34,097 | ) | (33,903 | ) | |||||
| Pretax income | 20,937 | 28,935 | 30,303 | 36,871 | 31,226 | ||||||||||
| Provision for income taxes | (5,008 | ) | (6,765 | ) | (8,014 | ) | (9,464 | ) | (8,051 | ) | |||||
| Net income | $ | 15,929 | $ | 22,170 | $ | 22,289 | $ | 27,407 | $ | 23,175 | |||||
| Basic earnings per common share | $ | 0.25 | $ | 0.43 | $ | 0.43 | $ | 0.53 | $ | 0.45 | |||||
| Diluted earnings per common share | $ | 0.25 | $ | 0.43 | $ | 0.43 | $ | 0.53 | $ | 0.45 | |||||
| Dividends paid per common share | $ | 0.135 | $ | 0.135 | $ | 0.135 | $ | 0.135 | $ | 0.125 | |||||
| Dividends paid | $ | 8,809 | $ | 6,921 | $ | 7,001 | $ | 6,828 | $ | 6,369 | |||||
| Weighted average shares - basic | 63,961 | 50,647 | 50,637 | 50,636 | 50,576 | ||||||||||
| Weighted average shares - diluted | 64,238 | 50,959 | 50,875 | 50,858 | 50,780 | ||||||||||
| Selected Operating Ratios | |||||||||||||||
| Annualized return on average assets | 0.64 | % | 1.06 | % | 1.10 | % | 1.41 | % | 1.22 | % | |||||
| Annualized return on average common equity | 5.89 | % | 10.70 | % | 10.94 | % | 14.07 | % | 12.20 | % | |||||
| Annualized return on average tangible common equity (1) | 7.88 | % | 13.26 | % | 13.63 | % | 17.67 | % | 15.39 | % | |||||
| Annualized net interest margin | 3.02 | % | 2.98 | % | 3.10 | % | 3.27 | % | 3.19 | % | |||||
| Efficiency ratio (1) | 57.77 | % | 53.19 | % | 54.02 | % | 51.98 | % | 53.75 | % | |||||
| Common stockholders' equity to total assets | 10.60 | % | 10.09 | % | 9.96 | % | 10.14 | % | 9.88 | % | |||||
| Tangible common equity to tangible assets (1) | 8.07 | % | 8.31 | % | 8.18 | % | 8.29 | % | 8.00 | % | |||||
| Tier 1 risk-based ratio | 11.34 | % | 11.15 | % | 11.19 | % | 10.78 | % | 10.47 | % | |||||
| Total risk-based ratio | 14.03 | % | 14.48 | % | 14.73 | % | 13.11 | % | 13.02 | % | |||||
| Tier 1 leverage ratio | 8.97 | % | 8.51 | % | 8.60 | % | 8.70 | % | 8.51 | % | |||||
| Common equity tier 1 capital ratio | 10.72 | % | 10.67 | % | 10.70 | % | 10.29 | % | 9.98 | % | |||||
| Book value per common share | $ | 16.82 | $ | 16.34 | $ | 16.09 | $ | 15.74 | $ | 15.18 | |||||
| Tangible book value per common share (1) | $ | 12.45 | $ | 13.21 | $ | 12.95 | $ | 12.60 | $ | 12.03 | |||||
(1) See Supplemental Information - Non-GAAP Financial Measures
| Lakeland Bancorp, Inc. | |||||||||||||||
| Financial Highlights | |||||||||||||||
| (Unaudited) | |||||||||||||||
| For the Quarter Ended | |||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||
| (dollars in thousands) | 2022 | 2021 | 2021 | 2021 | 2021 | ||||||||||
| Selected Balance Sheet Data at Period End | |||||||||||||||
| Loans | $ | 7,137,793 | $ | 5,976,148 | $ | 5,880,802 | $ | 5,988,832 | $ | 6,108,946 | |||||
| Allowance for credit losses on loans | 67,112 | 58,047 | 57,953 | 60,389 | 67,252 | ||||||||||
| Investment securities | 2,139,054 | 1,621,329 | 1,248,705 | 1,107,601 | 1,078,750 | ||||||||||
| Total assets | 10,275,233 | 8,198,056 | 8,172,479 | 7,854,238 | 7,771,761 | ||||||||||
| Total deposits | 8,748,909 | 6,965,823 | 6,930,912 | 6,715,035 | 6,635,226 | ||||||||||
| Short-term borrowings | 102,911 | 106,453 | 111,907 | 100,190 | 111,999 | ||||||||||
| Other borrowings | 218,904 | 204,043 | 212,107 | 138,045 | 143,267 | ||||||||||
| Stockholders' equity | 1,089,282 | 827,014 | 814,128 | 796,676 | 768,065 | ||||||||||
| Loans | |||||||||||||||
| Non-owner occupied commercial | $ | 2,639,784 | $ | 2,316,284 | $ | 2,300,637 | $ | 2,330,376 | $ | 2,375,024 | |||||
| Owner occupied commercial | 1,122,754 | 908,449 | 884,144 | 870,535 | 857,506 | ||||||||||
| Multifamily | 1,104,206 | 972,233 | 907,903 | 902,394 | 858,168 | ||||||||||
| Non-owner occupied residential | 225,795 | 177,097 | 177,592 | 189,765 | 195,534 | ||||||||||
| Commercial, industrial and other | 620,611 | 405,832 | 363,976 | 358,659 | 394,416 | ||||||||||
| Construction | 404,186 | 302,228 | 332,868 | 335,167 | 291,252 | ||||||||||
| Paycheck Protection Program | 36,785 | 56,574 | 109,348 | 207,045 | 346,150 | ||||||||||
| Equipment financing | 123,943 | 123,212 | 119,709 | 121,096 | 119,428 | ||||||||||
| Residential mortgages | 564,042 | 438,710 | 407,021 | 391,589 | 385,778 | ||||||||||
| Consumer and home equity | 295,687 | 275,529 | 277,604 | 282,206 | 285,690 | ||||||||||
| Total loans | $ | 7,137,793 | $ | 5,976,148 | $ | 5,880,802 | $ | 5,988,832 | $ | 6,108,946 | |||||
| Deposits | |||||||||||||||
| Noninterest-bearing | $ | 2,300,030 | $ | 1,732,452 | $ | 1,724,646 | $ | 1,683,887 | $ | 1,631,942 | |||||
| Savings and interest-bearing transaction accounts | 5,602,674 | 4,474,144 | 4,401,367 | 4,198,709 | 4,049,914 | ||||||||||
| Time deposits | 846,205 | 759,227 | 804,899 | 832,439 | 953,370 | ||||||||||
| Total deposits | $ | 8,748,909 | $ | 6,965,823 | $ | 6,930,912 | $ | 6,715,035 | $ | 6,635,226 | |||||
| Total loans to total deposits ratio | 81.6 | % | 85.8 | % | 84.8 | % | 89.2 | % | 92.1 | % | |||||
| Selected Average Balance Sheet Data | |||||||||||||||
| Loans | $ | 7,021,462 | $ | 5,902,152 | $ | 5,943,698 | $ | 6,080,408 | $ | 6,089,757 | |||||
| Investment securities | 2,019,578 | 1,423,650 | 1,144,356 | 1,066,086 | 1,003,479 | ||||||||||
| Interest-earning assets | 9,504,287 | 7,874,181 | 7,611,259 | 7,342,952 | 7,230,136 | ||||||||||
| Total assets | 10,138,437 | 8,332,637 | 8,070,050 | 7,784,385 | 7,704,603 | ||||||||||
| Noninterest-bearing demand deposits | 2,194,038 | 1,775,119 | 1,702,788 | 1,660,825 | 1,545,968 | ||||||||||
| Savings deposits | 1,131,359 | 670,039 | 653,840 | 639,540 | 604,931 | ||||||||||
| Interest-bearing transaction accounts | 4,399,531 | 3,862,443 | 3,701,676 | 3,495,610 | 3,388,027 | ||||||||||
| Time deposits | 879,427 | 781,199 | 826,831 | 880,079 | 1,044,915 | ||||||||||
| Total deposits | 8,604,355 | 7,088,800 | 6,885,135 | 6,676,054 | 6,583,841 | ||||||||||
| Short-term borrowings | 104,633 | 112,533 | 108,519 | 85,325 | 73,492 | ||||||||||
| Other borrowings | 217,983 | 204,266 | 162,216 | 140,162 | 143,261 | ||||||||||
| Total interest-bearing liabilities | 6,732,934 | 5,630,479 | 5,453,082 | 5,240,716 | 5,254,626 | ||||||||||
| Stockholders' equity | 1,095,913 | 822,001 | 807,956 | 781,299 | 770,255 | ||||||||||
| Lakeland Bancorp, Inc. | |||||||||||||||
| Financial Highlights | |||||||||||||||
| (Unaudited) | |||||||||||||||
| For the Quarter Ended | |||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||
| (dollars in thousands) | 2022 | 2021 | 2021 | 2021 | 2021 | ||||||||||
| Average Annualized Yields (Taxable Equivalent Basis) and Costs | |||||||||||||||
| Assets | |||||||||||||||
| Loans | 3.92 | % | 3.88 | % | 4.00 | % | 3.99 | % | 3.91 | % | |||||
| Taxable investment securities and other | 1.60 | % | 1.60 | % | 1.68 | % | 1.72 | % | 1.81 | % | |||||
| Tax-exempt securities | 1.91 | % | 2.20 | % | 2.15 | % | 2.50 | % | 2.54 | % | |||||
| Federal funds sold and interest-bearing cash accounts | 0.16 | % | 0.14 | % | 0.12 | % | 0.11 | % | 0.11 | % | |||||
| Total interest-earning assets | 3.25 | % | 3.22 | % | 3.40 | % | 3.57 | % | 3.56 | % | |||||
| Liabilities | |||||||||||||||
| Savings accounts | 0.17 | % | 0.05 | % | 0.05 | % | 0.05 | % | 0.05 | % | |||||
| Interest-bearing transaction accounts | 0.25 | % | 0.24 | % | 0.30 | % | 0.32 | % | 0.34 | % | |||||
| Time deposits | 0.40 | % | 0.51 | % | 0.55 | % | 0.61 | % | 0.83 | % | |||||
| Borrowings | 1.95 | % | 1.55 | % | 2.33 | % | 2.22 | % | 2.87 | % | |||||
| Total interest-bearing liabilities | 0.34 | % | 0.33 | % | 0.41 | % | 0.42 | % | 0.51 | % | |||||
| Net interest spread (taxable equivalent basis) | 2.92 | % | 2.89 | % | 2.99 | % | 3.15 | % | 3.05 | % | |||||
| Annualized net interest margin (taxable equivalent basis) | 3.02 | % | 2.98 | % | 3.10 | % | 3.27 | % | 3.19 | % | |||||
| Annualized cost of deposits | 0.19 | % | 0.19 | % | 0.23 | % | 0.25 | % | 0.32 | % | |||||
| Loan Quality Data | |||||||||||||||
| Allowance for Credit Losses on Loans | |||||||||||||||
| Balance at beginning of period | $ | 58,047 | $ | 57,953 | $ | 60,389 | $ | 67,252 | $ | 71,124 | |||||
| Initial allowance for credit losses on purchased credit deteriorated loans | 12,077 | — | — | — | — | ||||||||||
| Charge-offs on purchased credit deteriorated loans | (7,634 | ) | — | — | — | — | |||||||||
| Provision (benefit) for credit losses on loans | 4,630 | (87 | ) | (2,705 | ) | (5,314 | ) | (2,808 | ) | ||||||
| Charge-offs | (170 | ) | (461 | ) | (969 | ) | (1,862 | ) | (1,270 | ) | |||||
| Recoveries | 162 | 642 | 1,238 | 313 | 206 | ||||||||||
| Balance at end of period | $ | 67,112 | $ | 58,047 | $ | 57,953 | $ | 60,389 | $ | 67,252 | |||||
| Net Loan Charge-Offs (Recoveries) | |||||||||||||||
| Non owner occupied commercial | $ | 4 | $ | — | $ | 6 | $ | 1,649 | $ | 592 | |||||
| Owner occupied commercial | 24 | (1 | ) | (80 | ) | (9 | ) | 70 | |||||||
| Multifamily | — | — | 28 | — | — | ||||||||||
| Non owner occupied residential | (14 | ) | (136 | ) | (5 | ) | (8 | ) | 206 | ||||||
| Construction | 6,804 | (4 | ) | 50 | (42 | ) | (25 | ) | |||||||
| Commercial, industrial and other | 778 | (449 | ) | (265 | ) | 5 | 221 | ||||||||
| Equipment finance | 82 | 60 | 139 | 4 | 83 | ||||||||||
| Residential mortgages | (48 | ) | 49 | 27 | (82 | ) | (58 | ) | |||||||
| Consumer and home equity | 12 | 300 | (169 | ) | 32 | (25 | ) | ||||||||
| Net charge-offs (recoveries) | $ | 7,642 | $ | (181 | ) | $ | (269 | ) | $ | 1,549 | $ | 1,064 | |||
| For the Quarter Ended | |||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||
| (dollars in thousands) | 2022 | 2021 | 2021 | 2021 | 2021 | ||||||||||
| Non-Performing Assets (1) | |||||||||||||||
| Non owner occupied commercial | $ | 5,482 | $ | 3,009 | $ | 4,748 | $ | 11,427 | $ | 12,835 | |||||
| Owner occupied commercial | 2,626 | 2,810 | 4,656 | 7,152 | 8,797 | ||||||||||
| Multifamily | — | — | — | 195 | 201 | ||||||||||
| Non owner occupied residential | 2,430 | 2,852 | 922 | 1,305 | 1,417 | ||||||||||
| Construction | 220 | — | — | 515 | 718 | ||||||||||
| Commercial, industrial and other | 6,098 | 6,763 | 1,108 | 1,449 | 2,252 | ||||||||||
| Equipment finance | 51 | 43 | 238 | 264 | 300 | ||||||||||
| Residential mortgages | 1,935 | 817 | 123 | — | 2,328 | ||||||||||
| Consumer and home equity | 898 | 687 | 453 | 308 | 2,277 | ||||||||||
| Total non-accrual loans | 19,740 | 16,981 | 12,248 | 22,615 | 31,125 | ||||||||||
| Property acquired through foreclosure or repossession | — | — | — | — | — | ||||||||||
| Total non-performing assets | $ | 19,740 | $ | 16,981 | $ | 12,248 | $ | 22,615 | $ | 31,125 | |||||
| Loans past due 90 days or more and still accruing | $ | — | $ | 1 | $ | — | $ | — | $ | — | |||||
| Loans restructured and still accruing | $ | 3,290 | $ | 3,342 | $ | 3,414 | $ | 3,595 | $ | 3,799 | |||||
| Ratio of allowance for loan losses to total loans | 0.94 | % | 0.97 | % | 0.99 | % | 1.01 | % | 1.10 | % | |||||
| Total non-accrual loans to total loans | 0.28 | % | 0.28 | % | 0.21 | % | 0.38 | % | 0.51 | % | |||||
| Total non-performing assets to total assets | 0.19 | % | 0.21 | % | 0.15 | % | 0.29 | % | 0.40 | % | |||||
| Annualized net charge-offs (recoveries) to average loans | 0.44 | % | (0.01) | % | (0.02) | % | 0.10 | % | 0.07 | % | |||||
(1) Includes non-accrual purchased credit deteriorated loans.
| Lakeland Bancorp, Inc. | |||||||||||||||
| Supplemental Information - Non-GAAP Financial Measures | |||||||||||||||
| (Unaudited) | |||||||||||||||
| At or for the Quarter Ended | |||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||
| (dollars in thousands, except per share amounts) | 2022 | 2021 | 2021 | 2021 | 2021 | ||||||||||
| Calculation of Tangible Book Value Per Common Share | |||||||||||||||
| Total common stockholders' equity at end of period - GAAP | $ | 1,089,282 | $ | 827,014 | $ | 814,128 | $ | 796,676 | $ | 768,065 | |||||
| Less: Goodwill | 271,829 | 156,277 | 156,277 | 156,277 | 156,277 | ||||||||||
| Less: Other identifiable intangible assets | 10,842 | 2,420 | 2,631 | 2,841 | 3,063 | ||||||||||
| Total tangible common stockholders' equity at end of period - Non-GAAP | $ | 806,611 | $ | 668,317 | $ | 655,220 | $ | 637,558 | $ | 608,725 | |||||
| Shares outstanding at end of period | 64,780 | 50,606 | 50,602 | 50,601 | 50,598 | ||||||||||
| Book value per share - GAAP | $ | 16.82 | $ | 16.34 | $ | 16.09 | $ | 15.74 | $ | 15.18 | |||||
| Tangible book value per share - Non-GAAP | $ | 12.45 | $ | 13.21 | $ | 12.95 | $ | 12.60 | $ | 12.03 | |||||
| Calculation of Tangible Common Equity to Tangible Assets | |||||||||||||||
| Total tangible common stockholders' equity at end of period - Non-GAAP | $ | 806,611 | $ | 668,317 | $ | 655,220 | $ | 637,558 | $ | 608,725 | |||||
| Total assets at end of period - GAAP | $ | 10,275,233 | $ | 8,198,056 | $ | 8,172,479 | $ | 7,854,238 | $ | 7,771,761 | |||||
| Less: Goodwill | 271,829 | 156,277 | 156,277 | 156,277 | 156,277 | ||||||||||
| Less: Other identifiable intangible assets | 10,842 | 2,420 | 2,631 | 2,841 | 3,063 | ||||||||||
| Total tangible assets at end of period - Non-GAAP | $ | 9,992,562 | $ | 8,039,359 | $ | 8,013,571 | $ | 7,695,120 | $ | 7,612,421 | |||||
| Common equity to assets - GAAP | 10.60 | % | 10.09 | % | 9.96 | % | 10.14 | % | 9.88 | % | |||||
| Tangible common equity to tangible assets - Non-GAAP | 8.07 | % | 8.31 | % | 8.18 | % | 8.29 | % | 8.00 | % | |||||
| Calculation of Return on Average Tangible Common Equity | |||||||||||||||
| Net income - GAAP | $ | 15,929 | $ | 22,170 | $ | 22,289 | $ | 27,407 | $ | 23,175 | |||||
| Total average common stockholders' equity - GAAP | $ | 1,095,913 | $ | 822,001 | $ | 807,956 | $ | 781,299 | $ | 770,255 | |||||
| Less: Average goodwill | 265,409 | 156,277 | 156,277 | 156,277 | 156,277 | ||||||||||
| Less: Average other identifiable intangible assets | 10,851 | 2,544 | 2,758 | 2,979 | 3,192 | ||||||||||
| Total average tangible common stockholders' equity - Non-GAAP | $ | 819,653 | $ | 663,180 | $ | 648,921 | $ | 622,043 | $ | 610,786 | |||||
| Return on average common stockholders' equity - GAAP | 5.89 | % | 10.70 | % | 10.94 | % | 14.07 | % | 12.20 | % | |||||
| Return on average tangible common stockholders' equity - Non-GAAP | 7.88 | % | 13.26 | % | 13.63 | % | 17.67 | % | 15.39 | % | |||||
| Calculation of Efficiency Ratio | |||||||||||||||
| Total noninterest expense | $ | 49,959 | $ | 35,550 | $ | 37,207 | $ | 34,097 | $ | 33,903 | |||||
| Amortization of core deposit intangibles | (596 | ) | (210 | ) | (211 | ) | (221 | ) | (226 | ) | |||||
| Merger-related expenses | (4,585 | ) | (710 | ) | (1,072 | ) | — | — | |||||||
| Long term debt extinguishment costs | — | — | (831 | ) | — | — | |||||||||
| Noninterest expense, as adjusted | $ | 44,778 | $ | 34,630 | $ | 35,093 | $ | 33,876 | $ | 33,677 | |||||
| Net interest income | $ | 70,388 | $ | 59,029 | $ | 59,338 | $ | 59,740 | $ | 56,728 | |||||
| Total noninterest income | 6,780 | 5,864 | 5,469 | 5,269 | 5,759 | ||||||||||
| Total revenue | 77,168 | 64,893 | 64,807 | 65,009 | 62,487 | ||||||||||
| Tax-equivalent adjustment on municipal securities | 346 | 213 | 157 | 167 | 163 | ||||||||||
| Gains on sales of investment securities | — | — | — | (9 | ) | — | |||||||||
| Total revenue, as adjusted | $ | 77,514 | $ | 65,106 | $ | 64,964 | $ | 65,167 | $ | 62,650 | |||||
| Efficiency ratio - Non-GAAP | 57.77 | % | 53.19 | % | 54.02 | % | 51.98 | % | 53.75 | % | |||||
| Lakeland Bancorp, Inc. | ||||||
| Supplemental Information - Reconciliation of Net Income | ||||||
| (Unaudited) | ||||||
| For the Three Months Ended March 31, | ||||||
| (Dollars in thousands, except per share amounts) | 2022 | 2021 | ||||
| Net income - GAAP | $ | 15,929 | $ | 23,175 | ||
| Non-Routine Transactions | ||||||
| Tax deductible merger-related expenses | 3,436 | — | ||||
| Tax effect on tax deductible merger-related expenses | (1,034 | ) | — | |||
| Non-tax deductible merger-related expenses | 1,149 | — | ||||
| Effect of non-routine transactions, net of tax | $ | 3,551 | $ | — | ||
| Net income available to common shareholders excluding non-routine transactions | $ | 19,480 | $ | 23,175 | ||
| Less: Earnings allocated to participating securities | 164 | 216 | ||||
| Net Income, excluding non-routine transactions | $ | 19,316 | $ | 22,959 | ||
| Weighted average shares - Basic | 63,961 | 50,576 | ||||
| Weighted average shares - Diluted | 64,238 | 50,780 | ||||
| Basic earnings per share - GAAP | $ | 0.25 | $ | 0.45 | ||
| Diluted earnings per share - GAAP | $ | 0.25 | $ | 0.45 | ||
| Basic earnings per share, adjusted for non-routine transactions | $ | 0.30 | $ | 0.45 | ||
| Diluted earnings per share, adjusted for non-routine transactions | $ | 0.30 | $ | 0.45 | ||
| Return on average assets - GAAP | 0.64 | % | 1.22 | % | ||
| Return on average assets, adjusted for non-routine transactions | 0.78 | % | 1.22 | % | ||
| Return on average common stockholders' equity - GAAP | 5.89 | % | 12.20 | % | ||
| Return on average common stockholders' equity, adjusted for non-routine transactions | 7.21 | % | 12.20 | % | ||
| Return on average tangible common stockholders' equity - Non-GAAP | 7.88 | % | 15.39 | % | ||
| Return on average tangible common stockholders' equity - Non-GAAP, adjusted for non-routine transactions | 9.64 | % | 15.39 | % | ||
