U.S. markets closed
  • S&P Futures

    4,376.75
    -35.00 (-0.79%)
     
  • Dow Futures

    34,847.00
    -127.00 (-0.36%)
     
  • Nasdaq Futures

    14,843.25
    -194.50 (-1.29%)
     
  • Russell 2000 Futures

    2,220.70
    -16.80 (-0.75%)
     
  • Crude Oil

    73.21
    -0.41 (-0.56%)
     
  • Gold

    1,833.20
    -2.60 (-0.14%)
     
  • Silver

    25.62
    -0.16 (-0.63%)
     
  • EUR/USD

    1.1884
    -0.0013 (-0.11%)
     
  • 10-Yr Bond

    1.2690
    +0.0080 (+0.63%)
     
  • Vix

    17.70
    -0.61 (-3.33%)
     
  • GBP/USD

    1.3951
    -0.0007 (-0.05%)
     
  • USD/JPY

    109.4740
    +0.0130 (+0.01%)
     
  • BTC-USD

    40,190.16
    +413.91 (+1.04%)
     
  • CMC Crypto 200

    957.20
    +26.84 (+2.89%)
     
  • FTSE 100

    7,078.42
    +61.79 (+0.88%)
     
  • Nikkei 225

    27,358.74
    -423.68 (-1.52%)
     

Lakeland Bancorp Announces First Quarter Results and Increases Dividend

·28 min read

OAK RIDGE, N.J., April 27, 2021 (GLOBE NEWSWIRE) -- Lakeland Bancorp, Inc. (NASDAQ: LBAI) (the “Company”), the parent company of Lakeland Bank (“Lakeland”), reported net income of $23.2 million and earnings per diluted share ("EPS") of $0.45 for the three months ended March 31, 2021 compared to net income of $12.4 million and diluted EPS of $0.24 for the three months ended March 31, 2020. For the first quarter of 2021, annualized return on average assets was 1.22%, annualized return on average common equity was 12.20% and annualized return on average tangible common equity was 15.39%.

First quarter 2021 results were favorably impacted by a negative provision for credit losses of $2.6 million compared to a provision of $9.2 million for the same period last year. The negative provision for credit losses was due primarily to an improvement in forecasted macroeconomic conditions and continued strength in asset quality.

Thomas Shara, Lakeland Bancorp’s President and CEO commented, “I want to thank all of our Lakeland associates who unselfishly continue to deliver banking services to our customers and businesses while ensuring the safety and well-being of their fellow associates and our customers. Their commitment has been outstanding. Despite the ongoing pandemic, we are encouraged that our customers and local economy are faring well as evidenced by the continued improvements in asset quality with non-accrual loans and non-performing asset levels dropping below pre-COVID levels. As a result, we released a small portion of our loan reserves and will continue to monitor economic conditions closely as we progress into 2021.”

Regarding the Company’s financial results, Mr. Shara continued, “The quarterly results were record earnings for Lakeland which were bolstered by an 11 basis point increase in our net interest margin and an increase in pre-tax income. Considering our continued success, the Board authorized an annualized 8% increase in our cash dividend.”

First Quarter 2021 Highlights

  • Net interest margin increased to 3.19% compared to 3.08% in the fourth quarter of 2020.

  • Deposit growth was strong increasing $179.4 million or 3%, including $121.7 million in noninterest-bearing deposits.

  • Due to an improvement in forecasted macroeconomic conditions and continued strength in asset quality, a $2.6 million negative provision for credit losses was recorded in the first quarter of 2021.

  • At March 31, 2021, there were no loans on payment deferral compared to $9.7 million, or 0.2% of total loans at December 31, 2020.

  • Paycheck Protection Program ("PPP") loans totaled $346.2 million at March 31, 2021, with $133.2 million in new PPP loans booked during the first quarter of 2021. Unamortized net deferred fees on PPP loans totaled $8.1 million at March 31, 2021.

Net Interest Margin and Net Interest Income

Net interest margin for the first quarter of 2021 of 3.19% decreased 9 basis points compared to the first quarter of 2020 and increased 11 basis points compared to the fourth quarter of 2020. The decrease in net interest margin compared to the first quarter of 2020 was due primarily to a decrease in the yield on interest-earning assets partially offset by a significant decrease in the cost of interest-bearing liabilities, while the increase in net interest margin compared to the fourth quarter of 2020 was due primarily to a decrease in the cost of interest-bearing deposits.

The yield on interest-earning assets for the first quarter of 2021 was 3.56% compared to 4.17% for the first quarter of 2020 and 3.51% for the fourth quarter of 2020. The current quarter decrease in yield on interest-earning assets, when compared to the first quarter of 2020, was due primarily to a reduction in the yield on loans due to decreases in the prime rate and LIBOR during 2020, an increase in lower yielding federal funds sold, as well as the origination of PPP loans during 2020, which earn an effective yield of 2.50% including amortization of fees and costs. The increase in yield on interest-earning assets, when compared to the fourth quarter of 2020 was due primarily to an increase in higher yielding average loans and securities as well as a reduction in lower yielding average federal funds sold.

The cost of interest-bearing liabilities for the first quarter of 2021 was 0.51% compared to 1.18% for the first quarter of 2020 and 0.59% for the fourth quarter of 2020. The cost of interest-bearing transaction accounts and time deposits has decreased since 2020 largely driven by reductions in market interest rates.

Net interest income for the first quarter of 2021 of $56.7 million increased $6.8 million and $1.6 million, respectively, compared to the first quarter of 2020 and the fourth quarter of 2020. The increase in net interest income compared to prior periods was due primarily to a reduction in the cost of interest-bearing deposits as well as growth in the volume of interest-earning assets.

Noninterest Income

Noninterest income decreased $2.3 million to $5.8 million for the first quarter of 2021 from $8.0 million for the first quarter of 2020 due primarily to a $2.3 million decrease in swap income. Service charges on deposit accounts for the first quarter of 2021 decreased $204,000 compared to the first quarter of 2020 due primarily to changes in customer behavior resulting from the pandemic. Losses on equity securities of $144,000 in the first quarter of 2021 compared to losses of $653,000 during the same period in 2020. Gains on sales of loans for the first quarter of 2021 increased $293,000 compared to the first quarter of 2020 due primarily to increased loan sale volume driven by lower interest rates. Additionally, first quarter 2020 results included $342,000 in gains on sales of investment securities compared to none in the first quarter of 2021.

Noninterest Expense

Noninterest expense totaled $33.9 million for the first quarter of 2021 and increased $1.4 million compared to the first quarter of 2020. Salary and employee benefit expense for the first quarter of 2021 increased $791,000, or 4%, when compared to the same quarter of 2020 as a result of staff additions and normal merit increases. Net occupancy expense increased $183,000 compared to the first quarter of 2020 primarily resulting from an increase in cleaning and snow removal expenses. Furniture and equipment expense increased $739,000 compared to the first quarter of 2020 predominately driven by an increase in costs associated with the Company's digital strategy initiative. FDIC insurance expense totaled $711,000 for the first quarter of 2021 and increased $413,000 compared to the same period in 2020 due primarily to deposit growth and assessment credits recorded in the first quarter of 2020. Other expenses in the first quarter of 2021 were $487,000 less than the first quarter of 2020 primarily resulting from a decrease in appraisal fees, consulting, travel and entertainment expenses. Additionally, first quarter 2020 results included $356,000 in long-term debt prepayment fees compared to none in the first quarter of 2021.

Income Tax Expense

The effective tax rate for the first quarter of 2021 was 25.8% compared to 23.4% for the first quarter of 2020. The increased effective tax rate for the first quarter of 2021 was primarily a result of tax advantaged items declining as a percentage of pretax income.

Financial Condition

At March 31, 2021, total assets were $7.77 billion, an increase of $107.5 million compared to December 31, 2020. For the three months ended March 31, 2021, total loans grew $87.7 million to $6.11 billion and investment securities increased $105.6 million to $1.08 billion. On the funding side, total deposits increased $179.4 million to $6.64 billion, while borrowings decreased $57.6 million to $255.3 million. At March 31, 2021, total loans as a percent of total deposits was 92.1%.

Asset Quality

At March 31, 2021, non-performing assets decreased to $31.1 million, 0.40% of total assets, compared to $42.8 million, 0.56% of total assets, at December 31, 2020. Non-accrual loans as a percent of total loans decreased 28% to 0.51% at March 31, 2021 compared to 0.71% at December 31, 2020. The allowance for credit losses decreased to $67.3 million, 1.10% of total loans, at March 31, 2021, compared to $71.1 million, 1.18% of total loans, at December 31, 2020. As of March 31, 2021, the allowance for credit losses to total loans less PPP loans of $346.2 million, was 1.17%. In the first quarter of 2021, the Company had net charge-offs of $1.1 million, or 0.07% of average loans, annualized, compared to $342,000, or 0.03%, for the same period in 2020. The provision for credit losses for the first quarter of 2021 was a benefit of $2.6 million compared to provision of $9.2 million in the first quarter of 2020. At March 31, 2021 Cares Act modifications totaled $43.2 million compared to $40.0 million at December 31, 2020.

Capital

At March 31, 2021, stockholders' equity was $768.1 million compared to $763.8 million at December 31, 2020, a 1% increase. Lakeland Bank remains above FDIC “well capitalized” standards, with a Tier 1 leverage ratio of 8.51% at March 31, 2021. The book value per common share and tangible book value per common share increased 4% and 5% to $15.18 and $12.03, respectively, compared to $14.60 and $11.43 at March 31, 2020 (see "Supplemental Information - Non-GAAP Financial Measures" for a reconciliation of non-GAAP financial measures, including tangible book value). At March 31, 2021, the Company’s common equity to assets ratio and tangible common equity to tangible assets ratio was 9.88% and 8.00%, respectively, compared to 9.97% and 8.05% at December 31, 2020. Excluding the impact of the PPP loans of $346.2 million, the Company’s common equity to assets ratio and tangible common equity to tangible assets ratio was 10.34% and 8.38%, respectively, at March 31, 2021. On April 23, 2021, the Company declared a quarterly cash dividend of $0.135 per share to be paid on May 18, 2021, to shareholders of record as of May 7, 2021.

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, 2020, 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, and competition. 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 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.

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 $7.77 billion in total assets at March 31, 2021. 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 or 973-697-2000 for more information.

Thomas J. Shara

Thomas F. Splaine

President & CEO

EVP & CFO


Lakeland Bancorp, Inc.

Consolidated Statements of Income

(Unaudited)

Three Months Ended
March 31,

(Dollars in thousands, except per share amounts)

2021

2020

Interest Income

Loans and fees

$

58,778

$

57,857

Federal funds sold and interest-bearing deposits with banks

37

159

Taxable investment securities and other

3,981

5,229

Tax exempt investment securities

612

332

Total Interest Income

63,408

63,577

Interest Expense

Deposits

5,124

10,863

Federal funds purchased and securities sold under agreements to repurchase

23

429

Other borrowings

1,533

2,386

Total Interest Expense

6,680

13,678

Net Interest Income

56,728

49,899

Provision for credit losses

(2,642

)

9,223

Net Interest Income after Provision for Credit Losses

59,370

40,676

Noninterest Income

Service charges on deposit accounts

2,296

2,500

Commissions and fees

1,598

1,640

Income on bank owned life insurance

634

665

Loss on equity securities

(144

)

(653

)

Gains on sales of loans

708

415

Gains on sales and calls of investment securities,net

342

Swap income

562

2,843

Other income

105

259

Total Noninterest Income

5,759

8,011

Noninterest Expense

Salaries and employee benefit expense

20,518

19,727

Net occupancy expense

3,019

2,836

Furniture and equipment expense

3,299

2,560

FDIC insurance expense

711

298

Stationary, supplies and postage expense

378

399

Marketing expense

318

227

Data processing expense

1,255

1,253

Telecommunications expense

522

444

ATM and debit card expense

604

587

Core deposit intangible amortization

226

265

Other real estate owned and other repossessed assets expense

12

Long-term debt prepayment fee

356

Other expenses

3,053

3,540

Total Noninterest Expense

33,903

32,504

Income before Provision for Income Taxes

31,226

16,183

Provision for income taxes

8,051

3,791

Net Income

$

23,175

$

12,392

Earnings Per Common Share

Basic

$

0.45

$

0.24

Diluted

$

0.45

$

0.24

Dividends Per Common Share

$

0.125

$

0.125



Lakeland Bancorp, Inc.

Consolidated Balance Sheets

(Dollars in thousands)

March 31, 2021

December 31, 2020

(Unaudited)

Assets

Cash

$

189,506

$

262,327

Interest-bearing deposits due from banks

12,612

7,763

Total cash and cash equivalents

202,118

270,090

Investment securities available for sale, at estimated fair value (allowance for credit losses of $144 at March 31, 2021 and $2 at December 31, 2020 )

968,394

855,746

Investment securities held to maturity (estimated fair value of $87,215 at March 31, 2021 and $93,868 at December 31, 2020, no allowance for credit losses at March 31, 2021 and December 31, 2020 )

84,994

90,766

Equity securities, at fair value

14,590

14,694

Federal Home Loan Bank and other membership stocks, at cost

10,772

11,979

Loans held for sale

1,230

1,335

Loans, net of deferred fees

6,108,946

6,021,232

Less: Allowance for credit losses

67,252

71,124

Net loans

6,041,694

5,950,108

Premises and equipment, net

48,539

48,495

Operating lease right-of-use assets

16,199

16,772

Accrued interest receivable

19,840

19,339

Goodwill

156,277

156,277

Other identifiable intangible assets

3,063

3,288

Bank owned life insurance

115,756

115,115

Other assets

88,295

110,293

Total Assets

$

7,771,761

$

7,664,297

Liabilities and Stockholders' Equity

Liabilities

Deposits:

Noninterest-bearing

$

1,631,942

$

1,510,224

Savings and interest-bearing transaction accounts

4,049,914

3,867,303

Time deposits $250 thousand and under

794,283

895,056

Time deposits over $250 thousand

159,087

183,200

Total deposits

6,635,226

6,455,783

Federal funds purchased and securities sold under agreements to repurchase

111,999

169,560

Other borrowings

25,000

25,000

Subordinated debentures

118,267

118,257

Operating lease liabilities

17,574

18,183

Other liabilities

95,630

113,730

Total Liabilities

7,003,696

6,900,513

Stockholders' Equity

Common stock, no par value; authorized 100,000,000 shares; issued 50,729,527 shares and outstanding 50,598,492 shares at March 31, 2021 and issued 50,610,681 shares and outstanding 50,479,646 shares at December 31, 2020

562,984

562,421

Retained earnings

208,224

191,418

Treasury shares, at cost, 131,035 shares at March 31, 2021 and December 31, 2020

(1,452

)

(1,452

)

Accumulated other comprehensive (loss) income

(1,691

)

11,397

Total Stockholders' Equity

768,065

763,784

Total Liabilities and Stockholders' Equity

$

7,771,761

$

7,664,297



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)

2021

2020

2020

2020

2020

Income Statement

Net interest income

$

56,728

$

55,135

$

52,134

$

50,519

$

49,899

Provision for credit losses (1)

2,642

(789)

(8,000)

(9,000)

(9,223)

Gains on sales of investment securities

871

342

Gains on sales of loans

708

760

1,437

710

415

(Loss) gain on equity securities

(144)

73

(170)

198

(653)

Other noninterest income

5,195

5,141

5,506

4,573

7,907

Long-term debt prepayment fee

(3,777)

(356)

Other noninterest expense

(33,903)

(33,168)

(32,097)

(31,462)

(32,148)

Pretax income

31,226

24,246

18,810

15,538

16,183

Provision for income taxes

(8,051)

(5,398)

(4,383)

(3,687)

(3,791)

Net income

$

23,175

$

18,848

$

14,427

$

11,851

$

12,392

Basic earnings per common share

$

0.45

$

0.37

$

0.28

$

0.23

$

0.24

Diluted earnings per common share

$

0.45

$

0.37

$

0.28

$

0.23

$

0.24

Dividends paid per common share

$

0.125

$

0.125

$

0.125

$

0.125

$

0.125

Dividends paid

$

6,369

$

6,364

$

6,365

$

6,365

$

6,364

Weighted average shares - basic

50,576

50,527

50,526

50,522

50,586

Weighted average shares - diluted

50,780

50,672

50,620

50,593

50,728

Selected Operating Ratios

Annualized return on average assets

1.22

%

0.98

%

0.76

%

0.67

%

0.76

%

Annualized return on average common equity

12.20

%

9.96

%

7.64

%

6.42

%

6.77

%

Annualized return on average tangible common equity (2)

15.39

%

12.64

%

9.71

%

8.19

%

8.65

%

Annualized net interest margin

3.19

%

3.08

%

2.96

%

3.06

%

3.28

%

Efficiency ratio (2)

53.75

%

53.74

%

53.96

%

55.62

%

55.30

%

Common stockholders' equity to total assets

9.88

%

9.97

%

10.02

%

9.96

%

10.51

%

Tangible common equity to tangible assets (2)

8.00

%

8.05

%

8.06

%

7.99

%

8.41

%

Tier 1 risk-based ratio

10.47

%

10.22

%

10.34

%

10.45

%

10.61

%

Total risk-based ratio

13.02

%

12.85

%

12.93

%

12.98

%

13.04

%

Tier 1 leverage ratio

8.51

%

8.37

%

8.36

%

8.69

%

9.38

%

Common equity tier 1 capital ratio

9.98

%

9.73

%

9.83

%

9.93

%

10.08

%

Book value per common share

$

15.18

$

15.13

$

14.93

$

14.77

$

14.60

Tangible book value per common share (2)

$

12.03

$

11.97

$

11.77

$

11.60

$

11.43

(1) The Company adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("CECL") on December 31, 2020, with a transition adjustment retroactive to January 1, 2020. Quarterly amounts for the first, second and third quarters of 2020 do not reflect the adoption of CECL.

(2) 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)

2021

2020

2020

2020

2020

Selected Balance Sheet Data at Period End

Loans

$

6,108,946

$

6,021,232

$

5,843,591

$

5,756,155

$

5,328,623

Allowance for credit losses on loans (3)

67,252

71,124

65,242

57,839

48,884

Investment securities

1,078,750

973,185

909,535

957,985

974,319

Total assets

7,771,761

7,664,297

7,522,184

7,488,516

7,013,908

Total deposits

6,635,226

6,455,783

6,266,516

6,125,502

5,455,138

Short-term borrowings

111,999

169,560

97,874

183,116

419,085

Other borrowings

143,267

143,257

253,359

273,954

258,944

Stockholders' equity

768,065

763,784

753,572

745,489

736,922

Loans

Non-owner occupied commercial

$

2,375,024

$

2,398,946

Owner occupied commercial

857,506

827,092

Multifamily

858,168

813,225

Non-owner occupied residential

195,534

200,229

Total commercial, secured by real estate (3)

$

4,286,232

$

4,239,492

$

4,042,946

$

3,955,045

$

3,734,565

Commercial, industrial and other

394,416

433,553

418,813

393,017

467,286

Construction

291,252

266,883

275,716

298,180

332,228

Paycheck Protection Program

346,150

284,636

325,115

325,999

Equipment financing

119,428

116,690

118,320

117,569

118,396

Residential mortgages

385,778

377,380

343,317

335,135

334,786

Consumer and home equity

285,690

302,598

319,364

331,210

341,362

Total loans

$

6,108,946

$

6,021,232

$

5,843,591

$

5,756,155

$

5,328,623

Deposits

Noninterest-bearing

$

1,631,942

$

1,510,224

$

1,474,847

$

1,486,273

$

1,129,695

Savings and interest-bearing transaction accounts

4,049,914

3,867,303

3,647,328

3,510,723

3,241,397

Time deposits

953,370

1,078,256

1,144,341

1,128,506

1,084,046

Total deposits

$

6,635,226

$

6,455,783

$

6,266,516

$

6,125,502

$

5,455,138

Total loans to total deposits ratio

92.1

%

93.3

%

93.3

%

94.0

%

97.7

%

Selected Average Balance Sheet Data

Loans

$

6,089,757

$

5,939,904

$

5,775,093

$

5,572,865

$

5,208,097

Investment securities

1,003,479

912,723

873,066

891,037

879,987

Interest-earning assets

7,230,136

7,137,884

7,009,939

6,650,993

6,133,003

Total assets

7,704,603

7,625,458

7,516,069

7,137,529

6,565,302

Noninterest-bearing demand deposits

1,545,968

1,499,093

1,475,422

1,364,785

1,109,638

Savings deposits

604,931

571,794

548,662

525,224

496,798

Interest-bearing transaction accounts

3,388,027

3,313,556

3,086,260

2,908,299

2,830,778

Time deposits

1,044,915

1,112,053

1,176,181

1,093,760

872,998

Total deposits

6,583,841

6,496,496

6,286,525

5,892,068

5,310,212

Short-term borrowings

73,492

68,962

58,845

82,694

159,825

Other borrowings

143,261

155,943

269,093

273,904

277,753

Total interest-bearing liabilities

5,254,626

5,222,308

5,139,042

4,883,881

4,638,152

Stockholders' equity

770,255

753,059

751,099

742,050

736,719

(3) The Company adopted ASU 2016-13 on December 31, 2020, with a transition adjustment retroactive to January 1, 2020. Quarterly amounts for the first, second and third quarters of 2020 do not reflect the adoption of ASU 2016-13.


Lakeland Bancorp, Inc.

Financial Highlights

(Unaudited)

For the Quarter Ended

March 31,

December 31,

September 30,

June 30,

March 31,

(Dollars in thousands)

2021

2020

2020

2020

2020

Average Annualized Yields (Taxable Equivalent Basis) and Costs

Assets

Loans

3.91

%

3.92

%

3.91

%

4.03

%

4.47

%

Taxable investment securities and other

1.81

%

1.84

%

2.09

%

2.31

%

2.56

%

Tax-exempt securities

2.54

%

2.51

%

2.55

%

2.70

%

2.67

%

Federal funds sold and interest-bearing cash accounts

0.11

%

0.09

%

0.10

%

0.08

%

1.42

%

Total interest-earning assets

3.56

%

3.51

%

3.49

%

3.69

%

4.17

%

Liabilities

Savings accounts

0.05

%

0.05

%

0.06

%

0.07

%

0.07

%

Interest-bearing transaction accounts

0.34

%

0.38

%

0.44

%

0.55

%

0.97

%

Time deposits

0.83

%

1.01

%

1.19

%

1.48

%

1.81

%

Borrowings

2.87

%

2.84

%

2.73

%

2.62

%

2.54

%

Total interest-bearing liabilities

0.51

%

0.59

%

0.72

%

0.86

%

1.18

%

Net interest spread (taxable equivalent basis)

3.05

%

2.92

%

2.77

%

2.83

%

2.99

%

Annualized net interest margin (taxable equivalent basis)

3.19

%

3.08

%

2.96

%

3.06

%

3.28

%

Annualized cost of deposits

0.32

%

0.37

%

0.44

%

0.55

%

0.82

%

Asset Quality Data

Allowance for Credit Losses on Loans

Balance at beginning of period

$

71,124

$

65,242

$

57,839

$

48,884

$

40,003

Impact of adopting ASU 2016-13 (4)

6,656

Provision for credit losses on loans

(2,808)

(246)

8,000

9,000

9,223

Charge-offs

(1,270)

(746)

(682)

(142)

(483)

Recoveries

206

218

85

97

141

Balance at end of period

$

67,252

$

71,124

$

65,242

$

57,839

$

48,884

Net Loan Charge-Offs (Recoveries)

Commercial, real estate

$

843

$

(47)

$

298

$

(36)

$

111

Commercial, industrial and other

221

478

173

(13)

(31)

Equipment financing

83

64

95

(11)

71

Residential mortgages

(58)

(1)

96

Consumer and home equity

(25)

33

32

105

95

Net charge-offs (recoveries)

$

1,064

$

528

$

597

$

45

$

342

Non-Performing Assets (5)

Commercial, real estate

$

23,984

$

35,091

$

26,145

$

25,615

$

24,770

Commercial, industrial and other

2,252

2,633

1,484

1,546

1,909

Equipment financing

293

327

444

400

199

Residential mortgages

2,323

2,469

2,695

2,860

2,837

Consumer and home equity

2,274

2,243

2,322

2,432

2,689

Total non-accrual loans

31,126

42,763

33,090

32,853

32,404

Property acquired through foreclosure or repossession

354

393

Total non-performing assets

$

31,126

$

42,763

$

33,090

$

33,207

$

32,797

Loans past due 90 days or more and still accruing

$

$

1

$

165

$

58

$

99

Loans restructured and still accruing

$

3,799

$

3,856

$

4,299

$

4,667

$

4,719

Ratio of allowance for loan losses to total loans

1.10

%

1.18

%

1.11

%

1.00

%

0.92

%

Total non-accrual loans to total loans

0.51

%

0.71

%

0.57

%

0.57

%

0.61

%

Total non-performing assets to total assets

0.40

%

0.56

%

0.44

%

0.44

%

0.47

%

Annualized net charge-offs to average loans

0.07

%

0.04

%

0.04

%

%

0.03

%

(4) The Company adopted CECL on December 31, 2020 with a $6.7 million transition adjustment retroactive to January 1, 2020. Quarterly amounts for the first, second and third quarters of 2020 do not reflect the adoption of CECL

(5) Includes non-accrual purchased credit deteriorated loans from December 31, 2020 forward


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 ratios and per share amounts)

2021

2020

2020

2020

2020

Calculation of Tangible Book Value Per Common Share

Total common stockholders' equity at end of period - GAAP

$

768,065

$

763,784

$

753,572

$

745,489

$

736,922

Less: Goodwill

156,277

156,277

156,277

156,277

156,277

Less: Other identifiable intangible assets

3,063

3,288

3,538

3,788

4,049

Total tangible common stockholders' equity at end of period - Non-GAAP

$

608,725

$

604,219

$

593,757

$

585,424

$

576,596

Shares outstanding at end of period

50,598

50,480

50,468

50,463

50,462

Book value per share - GAAP

$

15.18

$

15.13

$

14.93

$

14.77

$

14.60

Tangible book value per share - Non-GAAP

$

12.03

$

11.97

$

11.77

$

11.60

$

11.43

Calculation of Tangible Common Equity to Tangible Assets

Total tangible common stockholders' equity at end of period - Non-GAAP

$

608,725

$

604,219

$

593,757

$

585,424

$

576,596

Total assets at end of period - GAAP

$

7,771,761

$

7,664,297

$

7,522,184

$

7,488,516

$

7,013,908

Less: Goodwill

156,277

156,277

156,277

156,277

156,277

Less: Other identifiable intangible assets

3,063

3,288

3,538

3,788

4,049

Total tangible assets at end of period - Non-GAAP

$

7,612,421

$

7,504,732

$

7,362,369

$

7,328,451

$

6,853,582

Paycheck Protection Program loans ("PPP")

346,150

284,636

325,115

325,999

Total assets at end of period excluding PPP- Non-GAAP

$

7,425,611

$

7,379,661

$

7,197,069

$

7,162,517

$

7,013,908

Total tangible assets at end of period excluding PPP - Non-GAAP

$

7,266,271

$

7,220,096

$

7,037,254

$

7,002,452

$

6,853,582

Common equity to assets - GAAP

9.88

%

9.97

%

10.02

%

9.96

%

10.51

%

Common equity to assets excluding PPP - Non-GAAP

10.34

%

10.35

%

10.47

%

10.41

%

10.51

%

Tangible common equity to tangible assets - Non-GAAP

8.00

%

8.05

%

8.06

%

7.99

%

8.41

%

Tangible common equity to tangible assets excluding PPP - Non-GAAP

8.38

%

8.37

%

8.44

%

8.36

%

8.41

%

Calculation of Return on Average Tangible Common Equity

Net income - GAAP

$

23,175

$

18,848

$

14,427

$

11,851

$

12,392

Total average common stockholders' equity - GAAP

$

770,255

$

753,059

$

751,099

$

742,050

$

736,719

Less: Average goodwill

156,277

156,277

156,277

156,277

156,277

Less: Average other identifiable intangible assets

3,192

3,433

3,689

3,942

4,205

Total average tangible common stockholders' equity - Non-GAAP

$

610,786

$

593,349

$

591,133

$

581,831

$

576,237

Return on average common stockholders' equity - GAAP

12.20

%

9.96

%

7.64

%

6.42

%

6.77

%

Return on average tangible common stockholders' equity - Non-GAAP

15.39

%

12.64

%

9.71

%

8.19

%

8.65

%

Calculation of Efficiency Ratio

Total noninterest expense

$

33,903

$

36,945

$

32,097

$

31,462

$

32,504

Amortization of core deposit intangibles

(226)

(249)

(250)

(261)

(265)

Long term debt prepayment fees

(3,777)

(356)

Noninterest expense, as adjusted

$

33,677

$

32,919

$

31,847

$

31,201

$

31,883

Net interest income

$

56,728

$

55,135

$

52,134

$

50,519

$

49,899

Total noninterest income

5,759

6,845

6,773

5,481

8,011

Total revenue

62,487

61,980

58,907

56,000

57,910

Tax-equivalent adjustment on municipal securities

163

149

108

93

88

Gains on sales of investment securities

(871)

(342)

Total revenue, as adjusted

$

62,650

$

61,258

$

59,015

$

56,093

$

57,656

Efficiency ratio - Non-GAAP

53.75

%

53.74

%

53.96

%

55.62

%

55.30

%