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Lakeland Bancorp, Inc. (LBAI)

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Previous Close18.08
Open17.76
Bid17.16 x 800
Ask18.11 x 1100
Day's Range17.11 - 17.92
52 Week Range9.49 - 19.35
Volume422,400
Avg. Volume151,258
Market Cap866.8M
Beta (5Y Monthly)1.01
PE Ratio (TTM)12.79
EPS (TTM)1.34
Earnings DateJul 21, 2021 - Jul 26, 2021
Forward Dividend & Yield0.54 (2.88%)
Ex-Dividend DateMay 06, 2021
1y Target Est21.21
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  • GlobeNewswire

    Lakeland Bancorp Announces First Quarter Results and Increases Dividend

    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. SharaThomas F. SplainePresident & CEOEVP & CFO Lakeland Bancorp, Inc. Consolidated Statements of Income(Unaudited) Three Months EndedMarch 31,(Dollars in thousands, except per share amounts)2021 2020Interest Income Loans and fees$58,778 $57,857 Federal funds sold and interest-bearing deposits with banks37 159 Taxable investment securities and other3,981 5,229 Tax exempt investment securities612 332 Total Interest Income63,408 63,577 Interest Expense Deposits5,124 10,863 Federal funds purchased and securities sold under agreements to repurchase23 429 Other borrowings1,533 2,386 Total Interest Expense6,680 13,678 Net Interest Income56,728 49,899 Provision for credit losses(2,642) 9,223 Net Interest Income after Provision for Credit Losses59,370 40,676 Noninterest Income Service charges on deposit accounts2,296 2,500 Commissions and fees1,598 1,640 Income on bank owned life insurance634 665 Loss on equity securities(144) (653)Gains on sales of loans708 415 Gains on sales and calls of investment securities,net— 342 Swap income562 2,843 Other income105 259 Total Noninterest Income5,759 8,011 Noninterest Expense Salaries and employee benefit expense20,518 19,727 Net occupancy expense3,019 2,836 Furniture and equipment expense3,299 2,560 FDIC insurance expense711 298 Stationary, supplies and postage expense378 399 Marketing expense318 227 Data processing expense1,255 1,253 Telecommunications expense522 444 ATM and debit card expense604 587 Core deposit intangible amortization226 265 Other real estate owned and other repossessed assets expense— 12 Long-term debt prepayment fee— 356 Other expenses3,053 3,540 Total Noninterest Expense33,903 32,504 Income before Provision for Income Taxes31,226 16,183 Provision for income taxes8,051 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 banks12,612 7,763 Total cash and cash equivalents202,118 270,090 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 value14,590 14,694 Federal Home Loan Bank and other membership stocks, at cost10,772 11,979 Loans held for sale1,230 1,335 Loans, net of deferred fees6,108,946 6,021,232 Less: Allowance for credit losses67,252 71,124 Net loans6,041,694 5,950,108 Premises and equipment, net48,539 48,495 Operating lease right-of-use assets16,199 16,772 Accrued interest receivable19,840 19,339 Goodwill156,277 156,277 Other identifiable intangible assets3,063 3,288 Bank owned life insurance115,756 115,115 Other assets88,295 110,293 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 accounts4,049,914 3,867,303 Time deposits $250 thousand and under794,283 895,056 Time deposits over $250 thousand159,087 183,200 Total deposits6,635,226 6,455,783 Federal funds purchased and securities sold under agreements to repurchase111,999 169,560 Other borrowings25,000 25,000 Subordinated debentures118,267 118,257 Operating lease liabilities17,574 18,183 Other liabilities95,630 113,730 Total Liabilities7,003,696 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, 2020562,984 562,421 Retained earnings208,224 191,418 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' Equity768,065 763,784 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)20212020202020202020Income 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 loans708 760 1,437 710 415 (Loss) gain on equity securities(144) 73 (170) 198 (653) Other noninterest income5,195 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 income31,226 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 - basic50,576 50,527 50,526 50,522 50,586 Weighted average shares - diluted50,780 50,672 50,620 50,593 50,728 Selected Operating Ratios Annualized return on average assets1.22% 0.98% 0.76% 0.67% 0.76%Annualized return on average common equity12.20% 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 margin3.19% 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 assets9.88% 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 ratio10.47% 10.22% 10.34% 10.45% 10.61%Total risk-based ratio13.02% 12.85% 12.93% 12.98% 13.04%Tier 1 leverage ratio8.51% 8.37% 8.36% 8.69% 9.38%Common equity tier 1 capital ratio9.98% 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)20212020202020202020Selected 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 securities1,078,750 973,185 909,535 957,985 974,319 Total assets7,771,761 7,664,297 7,522,184 7,488,516 7,013,908 Total deposits6,635,226 6,455,783 6,266,516 6,125,502 5,455,138 Short-term borrowings111,999 169,560 97,874 183,116 419,085 Other borrowings143,267 143,257 253,359 273,954 258,944 Stockholders' equity768,065 763,784 753,572 745,489 736,922 Loans Non-owner occupied commercial$2,375,024 $2,398,946 Owner occupied commercial857,506 827,092 Multifamily858,168 813,225 Non-owner occupied residential195,534 200,229 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 other394,416 433,553 418,813 393,017 467,286 Construction291,252 266,883 275,716 298,180 332,228 Paycheck Protection Program346,150 284,636 325,115 325,999 — Equipment financing119,428 116,690 118,320 117,569 118,396 Residential mortgages385,778 377,380 343,317 335,135 334,786 Consumer and home equity285,690 302,598 319,364 331,210 341,362 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 accounts4,049,914 3,867,303 3,647,328 3,510,723 3,241,397 Time deposits953,370 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 ratio92.1%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 securities1,003,479 912,723 873,066 891,037 879,987 Interest-earning assets7,230,136 7,137,884 7,009,939 6,650,993 6,133,003 Total assets7,704,603 7,625,458 7,516,069 7,137,529 6,565,302 Noninterest-bearing demand deposits1,545,968 1,499,093 1,475,422 1,364,785 1,109,638 Savings deposits604,931 571,794 548,662 525,224 496,798 Interest-bearing transaction accounts3,388,027 3,313,556 3,086,260 2,908,299 2,830,778 Time deposits1,044,915 1,112,053 1,176,181 1,093,760 872,998 Total deposits6,583,841 6,496,496 6,286,525 5,892,068 5,310,212 Short-term borrowings73,492 68,962 58,845 82,694 159,825 Other borrowings143,261 155,943 269,093 273,904 277,753 Total interest-bearing liabilities5,254,626 5,222,308 5,139,042 4,883,881 4,638,152 Stockholders' equity770,255 753,059 751,099 742,050 736,719 (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)20212020202020202020Average Annualized Yields (Taxable Equivalent Basis) and Costs Assets Loans3.91% 3.92% 3.91% 4.03% 4.47%Taxable investment securities and other1.81% 1.84% 2.09% 2.31% 2.56%Tax-exempt securities2.54% 2.51% 2.55% 2.70% 2.67%Federal funds sold and interest-bearing cash accounts0.11% 0.09% 0.10% 0.08% 1.42%Total interest-earning assets3.56% 3.51% 3.49% 3.69% 4.17%Liabilities Savings accounts0.05% 0.05% 0.06% 0.07% 0.07%Interest-bearing transaction accounts0.34% 0.38% 0.44% 0.55% 0.97%Time deposits0.83% 1.01% 1.19% 1.48% 1.81%Borrowings2.87% 2.84% 2.73% 2.62% 2.54%Total interest-bearing liabilities0.51% 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 deposits0.32% 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) Recoveries206 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 other221 478 173 (13) (31) Equipment financing83 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 other2,252 2,633 1,484 1,546 1,909 Equipment financing293 327 444 400 199 Residential mortgages2,323 2,469 2,695 2,860 2,837 Consumer and home equity2,274 2,243 2,322 2,432 2,689 Total non-accrual loans31,126 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 loans1.10% 1.18% 1.11% 1.00% 0.92%Total non-accrual loans to total loans0.51% 0.71% 0.57% 0.57% 0.61%Total non-performing assets to total assets0.40% 0.56% 0.44% 0.44% 0.47%Annualized net charge-offs to average loans0.07% 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)20212020202020202020Calculation 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: Goodwill156,277 156,277 156,277 156,277 156,277 Less: Other identifiable intangible assets3,063 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 period50,598 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: Goodwill156,277 156,277 156,277 156,277 156,277 Less: Other identifiable intangible assets3,063 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 - GAAP9.88% 9.97% 10.02% 9.96% 10.51%Common equity to assets excluding PPP - Non-GAAP10.34% 10.35% 10.47% 10.41% 10.51% Tangible common equity to tangible assets - Non-GAAP8.00% 8.05% 8.06% 7.99% 8.41%Tangible common equity to tangible assets excluding PPP - Non-GAAP8.38% 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 goodwill156,277 156,277 156,277 156,277 156,277 Less: Average other identifiable intangible assets3,192 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 - GAAP12.20% 9.96% 7.64% 6.42% 6.77% Return on average tangible common stockholders' equity - Non-GAAP15.39% 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 income5,759 6,845 6,773 5,481 8,011 Total revenue62,487 61,980 58,907 56,000 57,910 Tax-equivalent adjustment on municipal securities163 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-GAAP53.75% 53.74% 53.96% 55.62% 55.30%