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Lakeland Bancorp Announces First Quarter Results

OAK RIDGE, N.J., April 30, 2020 (GLOBE NEWSWIRE) -- Lakeland Bancorp, Inc. (NASDAQ: LBAI) (the “Company”), the parent company of Lakeland Bank (“Lakeland”), reported net income of $12.4 million and earnings per diluted share ("EPS") of $0.24 for the three months ended March 31, 2020 compared to net income of $15.6 million and diluted EPS of $0.31 for the first quarter of 2019. Excluding merger-related expenses pertaining to the Company’s January 2019 acquisition of Highlands Bancorp, Inc. ("Highlands") of $2.1 million, tax-effected, net income for the first quarter of 2019 was $17.8 million, or $0.35 per diluted share. For the first quarter of 2020, annualized return on average assets was 0.76%, annualized return on average common equity was 6.77% and annualized return on average tangible common equity was 8.65%.

The first quarter results were adversely impacted by a $9.2 million provision for loan losses compared to a $508,000 provision for the same period last year. The increased provision was primarily due to an increase in certain qualitative factors to account for the impact of COVID-19 on the local economy, resulting in approximately $8.0 million of the provision. The remaining $1.2 million of the provision is attributable to loan growth, a change in the loan portfolio composition and a change in loss rates. As of March 31, 2020, the ratio of the allowance for loan loss to total loans was 0.92% compared to 0.78% as of December 31, 2019.

Thomas Shara, Lakeland Bancorp’s President and CEO commented, “Although Lakeland began 2020 from a position of strength, the economic impact of COVID-19 is expected to have a meaningful effect on financial institutions’ results, including Lakeland’s, for the balance of the year. Lakeland’s fundamental strength, solid capital foundation and prudent operating strategies should position the Company well to navigate the challenges that may arise in the months ahead. As the pandemic has advanced, Lakeland has made it a priority to safeguard the health of our associates and customers while assisting customers impacted by the economic burdens of COVID-19 and providing support to our communities."

Mr. Shara continued, “We particularly want to thank our associates for their tireless professionalism, compassion and dedication to serving our customers under unprecedented conditions. These qualities, along with Lakeland’s solid capital position and deep engagement with our customers and communities, will allow all of us to move forward and emerge - strong and united - from this challenging period.”

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 are offering temporary payment deferrals on commercial, mortgage and consumer loans. As of April 16, 2020, we have applications for payment deferrals on approximately $745 million of commercial loans and $54 million of mortgage and consumer loans. We also are participating in the Small Business Administration Paycheck Protection Program ("PPP") and have loan applications and approvals of approximately $350 million, to help strengthen local businesses and preserve jobs in our communities.

Net Interest Margin and Net Interest Income

Net interest margin for the first quarter of 2020 of 3.28% decreased fourteen basis points from the first quarter of 2019 and increased one basis point from the fourth quarter of 2019. The decrease in net interest margin compared to the first quarter of 2019 was due primarily to a 27 basis point decrease in the yield on interest-earning assets partially offset by a 16 basis point decrease in the cost of interest bearing liabilities.

The yield on interest-earning assets for the first quarter of 2020 was 4.17% compared to 4.44% for the first quarter of 2019 and 4.21% for the fourth quarter of 2019. The current quarter decrease in yield on interest-earning assets, when compared to the prior year periods, was due primarily to a reduction in the yield on loans due to decreases in the prime rate during 2019 and 2020.

The cost of interest-bearing liabilities for the first quarter of 2020 was 1.18% compared to 1.34% for the first quarter of 2019 and 1.26% for the fourth quarter of 2019. The cost of interest-bearing transaction accounts, time deposits and borrowings have decreased since 2019 largely driven by reductions in the federal funds rate.

Net interest income increased $1.3 million to $49.9 million for the first quarter of 2020 compared to $48.6 million for the first quarter of 2019, due primarily to the growth in the volume of interest-earning assets and a decrease in interest rates on interest-bearing liabilities partially offset by a decrease in the yield on interest-earning assets.

Noninterest Income

Noninterest income increased $2.3 million to $8.0 million for the first quarter of 2020 from $5.7 million for the first quarter of 2019 due primarily to an increase in swap income of $2.6 million. The first quarter of 2020 also included $342,000 in gains on sales of investment securities compared to none in the first quarter of 2019. Partially offsetting these favorable variances was losses on equity securities of $653,000 compared to gains of $353,000 recorded during the first quarter of 2019.

Noninterest Expense

Noninterest expense totaled $32.5 million for the first quarter of 2020 and decreased $1.5 million compared to the first quarter of 2019. Excluding merger-related expenses recorded in the first quarter of 2019, noninterest expense increased $1.4 million from the first quarter of 2019 to the first quarter of 2020. Salary and employee benefit expense increased $1.0 million as a result of staff additions, normal merit increases and higher benefit costs. Furniture and equipment expense increased $444,000 compared to the first quarter of 2019 due primarily to an increase in costs associated with the Company's digital strategy initiative, while marketing expense decreased $242,000 due to the timing of marketing campaigns. First quarter 2020 results also included 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 first quarter of 2020 was 23.4% compared to 21.2% for the first quarter of 2019, as a result of a technical bulletin issued by the New Jersey Division of Taxation during the second quarter 2019, which resulted in increasing our estimated effective tax rate.

Financial Condition

At March 31, 2020, total assets were $7.01 billion, an increase of $302.7 million compared to December 31, 2019. For the three months ended March 31, 2020, total loans grew $190.8 million to $5.33 billion and investment securities increased $55.5 million to $974.3 million. On the funding side, total deposits increased $161.4 million to $5.46 billion, while borrowings increased $65.3 million to $678.0 million. At March 31, 2020, total loans as a percent of total deposits was 97.7%.

Asset Quality

At March 31, 2020, non-performing assets increased to $32.8 million, 0.47% 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 0.61% at March 31, 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 $48.9 million, 0.92% of total loans, at March 31, 2020, compared to $40.0 million, 0.78% of total loans, at December 31, 2019. In the first quarter of 2020, the Company had net charge-offs of $342,000, or 0.03% of average loans, annualized, compared to $217,000, or 0.02%, for the same period in 2019. The provision for loan losses for the first quarter of 2020 was $9.2 million compared to the provision for loan losses of $508,000 in the first quarter of 2019.

Capital

At March 31, 2020, stockholders' equity was $736.9 million compared to $725.3 million at December 31, 2019, a 2% increase. Lakeland Bank remains above FDIC “well capitalized” standards, with a Tier 1 leverage ratio of 9.38% at March 31, 2020. The book value per common share and tangible book value per common share increased 8% and 10% to $14.60 and $11.43, respectively, compared to $13.51 and $10.35 at March 31, 2019. On April 28, 2020, the Company declared a quarterly cash dividend of $0.125 per share to be paid on May 20, 2020, to shareholders of record as of May 11, 2020.

Forward-Looking Statements

The information disclosed in this document includes various forward-looking statements - including the statements regarding the prospective impact of COVID-19 - 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. (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 New Jersey’s #1 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.

Consolidated Statements of Income

(Unaudited)

Three Months Ended
March 31,

(Dollars in thousands, except per share amounts)

2020

2019

INTEREST INCOME

Loans and net deferred fees and costs

$

57,857

$

57,642

Federal funds sold and interest-bearing deposits with banks

159

254

Taxable investment securities and other

5,229

4,873

Tax exempt investment securities

332

408

TOTAL INTEREST INCOME

63,577

63,177

INTEREST EXPENSE

Deposits

10,863

11,497

Federal funds purchased and securities sold under agreements to repurchase

429

608

Other borrowings

2,386

2,466

TOTAL INTEREST EXPENSE

13,678

14,571

NET INTEREST INCOME

49,899

48,606

Provision for loan losses

9,223

508

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

40,676

48,098

NONINTEREST INCOME

Service charges on deposit accounts

2,500

2,573

Commissions and fees

1,640

1,412

Income on bank owned life insurance

665

683

Gain (loss) on equity securities

(653

)

353

Gains on sales of loans

415

371

Gains on sales of investment securities

342

Swap income

2,843

199

Other income

259

132

TOTAL NONINTEREST INCOME

8,011

5,723

NONINTEREST EXPENSE

Salaries and employee benefit expense

20,235

19,231

Net occupancy expense

2,836

2,954

Furniture and equipment expense

2,560

2,116

FDIC insurance expense

298

450

Stationary, supplies and postage expense

399

447

Marketing expense

227

469

Data processing expense

1,253

1,327

Telecommunications expense

444

493

ATM and debit card expense

587

602

Core deposit intangible amortization

265

304

Other real estate owned and other repossessed assets expense

12

86

Long-term debt prepayment fee

356

Merger-related expenses

2,860

Other expenses

3,032

2,645

TOTAL NONINTEREST EXPENSE

32,504

33,984

INCOME BEFORE PROVISION FOR INCOME TAXES

16,183

19,837

Provision for income taxes

3,791

4,211

NET INCOME

$

12,392

$

15,626

EARNINGS PER COMMON SHARE:

Basic

$

0.24

$

0.31

Diluted

$

0.24

$

0.31

DIVIDENDS PAID PER COMMON SHARE

$

0.125

$

0.115


Lakeland Bancorp, Inc.

Consolidated Balance Sheets

(Dollars in thousands)

March 31, 2020

December 31, 2019

(Unaudited)

ASSETS

Cash

$

272,560

$

275,794

Interest-bearing deposits due from banks

13,076

6,577

Total cash and cash equivalents

285,636

282,371

Investment securities available for sale, at fair value

813,090

755,900

Equity securities, at fair value

16,902

16,473

Investment securities held to maturity; fair value of $119,023 at March 31, 2020 and $124,904 at December 31, 2019

115,752

123,975

Federal Home Loan Bank and other membership stocks, at cost

28,575

22,505

Loans held for sale

3,098

1,743

Loans, net of deferred fees

5,328,623

5,137,823

Less: Allowance for loan losses

48,884

40,003

Net loans and leases

5,279,739

5,097,820

Premises and equipment, net

47,618

47,608

Operating lease right-of-use assets

17,621

18,282

Accrued interest receivable

16,775

16,832

Goodwill

156,277

156,277

Other identifiable intangible assets

4,049

4,314

Bank owned life insurance

113,082

112,392

Other assets

115,694

54,744

TOTAL ASSETS

$

7,013,908

$

6,711,236

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES

Deposits:

Noninterest-bearing

$

1,129,695

$

1,124,121

Savings and interest-bearing transaction accounts

3,241,397

3,298,854

Time deposits $250 thousand and under

845,554

652,144

Time deposits over $250 thousand

238,492

218,660

Total deposits

5,455,138

5,293,779

Federal funds purchased and securities sold under agreements to repurchase

419,085

328,658

Other borrowings

140,715

165,816

Subordinated debentures

118,229

118,220

Operating lease liabilities

19,126

19,814

Other liabilities

124,693

59,686

TOTAL LIABILITIES

6,276,986

5,985,973

STOCKHOLDERS' EQUITY

Common stock, no par value; authorized shares, 100,000,000; issued shares 50,592,673 and outstanding shares 50,461,638 at March 31, 2020 and issued and outstanding shares 50,498,410 at December 31, 2019

560,653

560,263

Retained earnings

168,780

162,752

Treasury shares, at cost, 131,035 shares at March 31, 2020 and no shares at December 31, 2019

(1,452

)

Accumulated other comprehensive income

8,941

2,248

TOTAL STOCKHOLDERS' EQUITY

736,922

725,263

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

7,013,908

$

6,711,236


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)

2020

2019

2019

2019

2019

INCOME STATEMENT

Net interest income

$

49,899

$

49,548

$

48,682

$

49,198

$

48,606

Provision for loan losses

(9,223

)

(1,086

)

(536

)

(508

)

Gains on sales of investment securities

342

Gains on sales of loans

415

375

486

428

371

(Loss) gain on equity securities

(653

)

(29

)

72

100

353

Other noninterest income

7,907

7,638

6,142

5,861

4,999

Long-term debt prepayment fee

(356

)

Merger-related expenses

(318

)

(2,860

)

Other noninterest expense

(32,148

)

(31,523

)

(29,563

)

(31,368

)

(31,124

)

Pretax income

16,183

24,923

25,283

23,901

19,837

Provision for income taxes

(3,791

)

(6,208

)

(6,409

)

(6,444

)

(4,211

)

Net income

$

12,392

$

18,715

$

18,874

$

17,457

$

15,626

Basic earnings per common share

$

0.24

$

0.37

$

0.37

$

0.34

$

0.31

Diluted earnings per common share

$

0.24

$

0.37

$

0.37

$

0.34

$

0.31

Dividends paid per common share

$

0.125

$

0.125

$

0.125

$

0.125

$

0.115

Dividends paid

$

6,364

$

6,363

$

6,362

$

6,357

$

5,838

Weighted average shares - basic

50,586

50,566

50,553

50,509

50,275

Weighted average shares - diluted

50,728

50,748

50,694

50,649

50,442

SELECTED OPERATING RATIOS

Annualized return on average assets

0.76

%

1.15

%

1.17

%

1.12

%

1.02

%

Annualized return on average common equity

6.77

%

10.32

%

10.61

%

10.16

%

9.41

%

Annualized return on average tangible common equity (1)

8.65

%

13.29

%

13.74

%

13.21

%

12.32

%

Annualized net interest margin

3.28

%

3.27

%

3.25

%

3.39

%

3.42

%

Efficiency ratio (1)

55.30

%

54.20

%

52.77

%

55.78

%

56.62

%

Common stockholders' equity to total assets

10.51

%

10.81

%

10.99

%

10.90

%

10.70

%

Tangible common equity to tangible assets (1)

8.41

%

8.62

%

8.72

%

8.61

%

8.41

%

Tier 1 risk-based ratio

10.61

%

11.02

%

11.24

%

11.11

%

10.98

%

Total risk-based ratio

13.04

%

13.40

%

13.70

%

13.60

%

13.48

%

Tier 1 leverage ratio

9.38

%

9.41

%

9.34

%

9.30

%

9.23

%

Common equity tier 1 capital ratio

10.08

%

10.46

%

10.66

%

10.52

%

10.38

%

Book value per common share

$

14.60

$

14.36

$

14.13

$

13.85

$

13.51

Tangible book value per common share (1)

$

11.43

$

11.18

$

10.94

$

10.66

$

10.35

(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)

2020

2019

2019

2019

2019

SELECTED BALANCE SHEET DATA AT PERIOD-END

Loans

$

5,331,863

$

5,140,940

$

4,925,998

$

4,925,300

$

4,924,671

Allowance for loan losses

48,884

40,003

38,655

38,662

37,979

Investment securities

974,319

918,853

905,078

863,474

850,729

Total assets

7,013,908

6,711,236

6,492,474

6,407,195

6,365,063

Total deposits

5,455,138

5,293,779

5,210,619

5,082,598

5,064,584

Short-term borrowings

419,085

328,658

199,326

258,703

261,266

Other borrowings

258,944

284,036

284,029

294,022

293,976

Stockholders' equity

736,922

725,263

713,204

698,463

681,343

LOANS

Commercial, real estate

$

4,073,911

$

3,924,762

$

3,749,413

$

3,737,447

$

3,769,545

Commercial, industrial and other

467,346

431,934

391,486

407,776

389,230

Equipment financing

116,421

111,076

104,689

99,351

90,791

Residential mortgages

334,114

335,191

337,482

336,810

335,290

Consumer and home equity

340,071

337,977

342,928

343,916

339,815

Total loans

$

5,331,863

$

5,140,940

$

4,925,998

$

4,925,300

$

4,924,671

DEPOSITS

Noninterest-bearing

$

1,129,695

$

1,124,121

$

1,101,083

$

1,089,474

$

1,071,890

Savings and interest-bearing transaction accounts

3,241,397

3,298,854

3,196,323

3,007,784

3,046,322

Time deposits

1,084,046

870,804

913,213

985,340

946,372

Total deposits

$

5,455,138

$

5,293,779

$

5,210,619

$

5,082,598

$

5,064,584

Total loans to total deposits ratio

97.7

%

97.1

%

94.5

%

96.9

%

97.2

%

SELECTED AVERAGE BALANCE SHEET DATA

Loans

$

5,208,097

$

5,025,377

$

4,937,488

$

4,917,109

$

4,871,534

Investment securities

879,987

894,698

869,734

854,608

858,046

Interest-earning assets

6,133,003

6,022,525

5,947,645

5,836,333

5,772,853

Total assets

6,565,302

6,470,082

6,379,675

6,256,523

6,183,224

Noninterest-bearing demand deposits

1,109,638

1,130,192

1,100,413

1,083,745

1,056,060

Savings deposits

496,798

492,903

494,377

502,340

513,270

Interest-bearing transaction accounts

2,830,778

2,814,831

2,678,424

2,562,365

2,554,865

Time deposits

872,998

873,924

964,159

961,212

890,070

Total deposits

5,310,212

5,311,850

5,237,373

5,109,662

5,014,265

Short-term borrowings

159,825

67,097

74,042

110,941

128,972

Other borrowings

277,753

284,049

287,839

283,177

306,529

Total interest-bearing liabilities

4,638,152

4,532,804

4,498,841

4,420,035

4,393,706

Stockholders' equity

736,719

719,292

705,726

689,324

673,205


Lakeland Bancorp, Inc.

Financial Highlights

(Unaudited)

For the Quarter Ended

March 31,

December 31,

September 30,

June 30,

March 31,

(Dollars in thousands)

2020

2019

2019

2019

2019

AVERAGE ANNUALIZED YIELDS (TAXABLE EQUIVALENT BASIS) AND COSTS

ASSETS

Loans

4.47

%

4.60

%

4.71

%

4.82

%

4.80

%

Taxable investment securities and other

2.56

%

2.34

%

2.50

%

2.55

%

2.49

%

Tax-exempt securities

2.67

%

2.69

%

2.70

%

2.74

%

2.74

%

Federal funds sold and interest-bearing cash accounts

1.42

%

1.65

%

1.98

%

2.15

%

2.35

%

Total interest-earning assets

4.17

%

4.21

%

4.32

%

4.46

%

4.44

%

LIABILITIES

Savings accounts

0.07

%

0.07

%

0.06

%

0.06

%

0.07

%

Interest-bearing transaction accounts

0.97

%

1.05

%

1.24

%

1.25

%

1.18

%

Time deposits

1.81

%

1.93

%

2.00

%

1.96

%

1.79

%

Borrowings

2.54

%

2.86

%

2.89

%

2.90

%

2.82

%

Total interest-bearing liabilities

1.18

%

1.26

%

1.41

%

1.42

%

1.34

%

Net interest spread (taxable equivalent basis)

2.99

%

2.96

%

2.91

%

3.04

%

3.10

%

Annualized net interest margin (taxable equivalent basis)

3.28

%

3.27

%

3.25

%

3.39

%

3.42

%

Annualized cost of deposits

0.82

%

0.88

%

1.00

%

1.00

%

0.93

%

ASSET QUALITY DATA

ALLOWANCE FOR LOAN LOSSES

Balance at beginning of period

$

40,003

$

38,655

$

38,662

$

37,979

$

37,688

Provision for loan losses

9,223

1,086

536

508

Charge-offs

(483

)

(198

)

(809

)

(413

)

(516

)

Recoveries

141

460

266

1,096

299

Balance at end of period

$

48,884

$

40,003

$

38,655

$

38,662

$

37,979

NET LOAN CHARGE-OFFS (RECOVERIES)

Commercial, real estate

$

111

$

(18

)

$

203

$

(85

)

$

67

Commercial, industrial and other

(31

)

13

393

(909

)

50

Equipment financing

71

(297

)

293

85

Residential mortgages

96

(55

)

(2

)

41

Consumer and home equity

95

40

2

20

(26

)

Net charge-offs (recoveries)

$

342

$

(262

)

$

543

$

(683

)

$

217

NON-PERFORMING ASSETS

Commercial, real estate

$

24,770

$

13,281

$

9,164

$

10,205

$

9,817

Commercial, industrial and other

1,909

1,539

795

662

2,202

Equipment financing

199

284

271

136

383

Residential mortgages

2,837

3,428

3,250

1,548

1,740

Consumer and home equity

2,689

2,606

2,437

1,873

1,581

Total non-accrual loans

32,404

21,138

15,917

14,424

15,723

Property acquired through foreclosure or repossession

393

563

944

532

715

Total non-performing assets

$

32,797

$

21,701

$

16,861

$

14,956

$

16,438

Loans past due 90 days or more and still accruing

$

99

$

$

$

$

78

Loans restructured and still accruing

$

4,719

$

5,650

$

5,029

$

5,139

$

6,352

Ratio of allowance for loan losses to total loans

0.92

%

0.78

%

0.78

%

0.78

%

0.77

%

Total non-accrual loans to total loans

0.61

%

0.41

%

0.32

%

0.29

%

0.32

%

Total non-performing assets to total assets

0.47

%

0.32

%

0.26

%

0.23

%

0.26

%

Annualized net charge-offs (recoveries) to average loans

0.03

%

(0.02

)%

0.04

%

(0.06

)%

0.02

%


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)

2020

2019

2019

2019

2019

CALCULATION OF TANGIBLE BOOK VALUE PER COMMON SHARE

Total common stockholders' equity at end of period - GAAP

$

736,922

$

725,263

$

713,204

$

698,463

$

681,343

Less: Goodwill

156,277

156,277

156,277

155,830

154,153

Less: Other identifiable intangible assets

4,049

4,314

4,602

4,891

5,192

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

$

576,596

$

564,672

$

552,325

$

537,742

$

521,998

Shares outstanding at end of period

50,462

50,498

50,489

50,441

50,436

Book value per share - GAAP

$

14.60

$

14.36

$

14.13

$

13.85

$

13.51

Tangible book value per share - Non-GAAP

$

11.43

$

11.18

$

10.94

$

10.66

$

10.35

CALCULATION OF TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS

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

$

576,596

$

564,672

$

552,325

$

537,742

$

521,998

Total assets at end of period - GAAP

$

7,013,908

$

6,711,236

$

6,492,474

$

6,407,195

$

6,365,063

Less: Goodwill

156,277

156,277

156,277

155,830

154,153

Less: Other identifiable intangible assets

4,049

4,314

4,602

4,891

5,192

Total tangible assets at end of period - Non-GAAP

$

6,853,582

$

6,550,645

$

6,331,595

$

6,246,474

$

6,205,718

Common equity to assets - GAAP

10.51

%

10.81

%

10.99

%

10.90

%

10.70

%

Tangible common equity to tangible assets - Non-GAAP

8.41

%

8.62

%

8.72

%

8.61

%

8.41

%

CALCULATION OF RETURN ON AVERAGE TANGIBLE COMMON EQUITY

Net income - GAAP

$

12,392

$

18,715

$

18,874

$

17,457

$

15,626

Total average common stockholders' equity - GAAP

$

736,719

$

719,292

$

705,726

$

689,324

$

673,205

Less: Average goodwill

156,277

156,277

155,835

154,171

153,562

Less: Average other identifiable intangible assets

4,205

4,468

4,761

5,058

5,254

Total average tangible common stockholders' equity - Non-GAAP

$

576,237

$

558,547

$

545,130

$

530,095

$

514,389

Return on average common stockholders' equity - GAAP

6.77

%

10.32

%

10.61

%

10.16

%

9.41

%

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

8.65

%

13.29

%

13.74

%

13.21

%

12.32

%

CALCULATION OF EFFICIENCY RATIO

Total noninterest expense

$

32,504

$

31,523

$

29,563

$

31,686

$

33,984

Amortization of core deposit intangibles

(265

)

(289

)

(288

)

(301

)

(304

)

Merger-related expenses

(318

)

(2,860

)

Long term debt prepayment fees

$

(356

)

$

$

$

$

Noninterest expense, as adjusted

$

31,883

$

31,234

$

29,275

$

31,067

$

30,820

Net interest income

$

49,899

$

49,548

$

48,682

$

49,198

$

48,606

Total noninterest income

8,011

7,984

6,700

6,389

5,723

Total revenue

57,910

57,532

55,382

55,587

54,329

Tax-equivalent adjustment on municipal securities

88

91

97

105

108

(Gains) on sales of investment securities

(342

)

Total revenue, as adjusted

$

57,656

$

57,623

$

55,479

$

55,692

$

54,437

Efficiency ratio - Non-GAAP

55.30

%

54.20

%

52.77

%

55.78

%

56.62

%


Lakeland Bancorp, Inc.

Supplemental Information - Reconciliation of Net Income

(Unaudited)

For the Three Months
Ended March 31,

(Dollars in thousands, except per share amounts)

2020

2019

Net income - GAAP

$

12,392

$

15,626

NON-ROUTINE TRANSACTIONS, NET OF TAX

Tax deductible merger-related expenses

1,656

Non-tax deductible merger-related expenses

491

Net effect of non-routine transactions

2,147

Net income available to common shareholders excluding non-routine transactions

$

12,392

$

17,773

Less: Earnings allocated to participating securities

102

141

Net Income, excluding non-routine transactions

$

12,290

$

17,632

Weighted average shares - Basic

50,586

$

50,275

Weighted average shares - Diluted

50,728

$

50,442

Basic earnings per share - GAAP

$

0.24

$

0.31

Diluted earnings per share - GAAP

$

0.24

$

0.31

Basic earnings per share, adjusted for non-routine transactions

$

0.24

$

0.35

Diluted earnings per share, adjusted for non-routine transactions (Core EPS)

$

0.24

$

0.35

Return on average assets - GAAP

0.76

%

1.02

%

Return on average assets, adjusted for non-routine transactions

0.76

%

1.17

%

Return on average common stockholders' equity - GAAP

6.77

%

9.41

%

Return on average common stockholders' equity, adjusted for non-routine transactions

6.77

%

10.71

%

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

8.65

%

12.32

%

Return on average tangible common stockholders' equity - Non-GAAP, adjusted for non-routine transactions

8.65

%

14.01

%