LBAI Lakeland Bancorp Inc

Lakeland Bancorp, Inc. (NASDAQ:LBAI) (the “Company”) reported the following results for the fourth quarter of 2016 and for the year ended  December 31, 2016:

• Net income for the fourth quarter of 2016 was $12.0 million, or $0.26 per diluted share, compared to net income of $8.5 million, or $0.22 per diluted share, for the same period in 2015.  No merger related expenses were incurred during the fourth quarter of 2016.  Excluding merger related expenses, fourth quarter 2015 net income was $9.2 million, or $0.24 per diluted share.

• For the fourth quarter of 2016, annualized return on average assets was 0.95%, annualized return on average common equity was 9.31%, and annualized return on average tangible common equity was 12.83%. 

• For 2016, net income was $41.5 million, or $0.95 per diluted share, compared to net income of $32.5 million, or $0.85 per diluted share, for 2015, a 28% and 12% increase, respectively.  Excluding merger related expenses and other items, net income for 2016 was $44.3 million, or $1.02 per diluted share, compared to $33.8 million, or $0.88 per diluted share, for 2015, a 31% and 16% increase, respectively.

• The return on average assets for the year ended December 31, 2016 was 0.90%, the return on average common equity was 8.75% and the return on average tangible common equity was 12.19%.  Excluding merger related expenses and other items, these ratios were 0.96%, 9.34% and 13.01%, respectively.    

• Total assets exceeded $5.0 billion for the first time in the Company’s history, finishing the year at $5.09 billion.  During 2016, total assets grew $1.22 billion, comprised of organic growth of $491.8 million, or 12.7%, and growth through acquisitions of $731.8 million.

• The Company bolstered its capital levels with a $50 million common stock issuance of 2.7 million shares in December 2016 and the issuance of $75 million in subordinated debt in September 2016 bearing an annual interest rate of 5.125%.

• For the fourth quarter of 2016, the Company reported loan growth of $78.3 million, or 2%, to $3.87 billion, comprised primarily of $91.5 million in commercial real estate loans, which increased 3%.  For the year, total loans and leases increased by $904.9 million, or 30%, with organic growth of $325.6 million, or 11%.

• For the fourth quarter of 2016, the Company reported deposit growth of $151.1 million, or 4%, to $4.09 billion.  This overall increase was primarily due to additional growth in government deposits.  For the year, total deposits increased $1.10 billion, or 37%, with organic growth of $514.7 million, or 17%, which included $125.4 million in non-interest bearing deposits. 

• Net interest margin (“NIM”) was 3.27% for the fourth quarter of 2016, compared to 3.45% for the prior quarter and 3.43% for the fourth quarter of 2015.  The decrease this quarter was primarily attributed to $1.0 million in interest expense from the recent, aforementioned subordinated debt issuance.  In addition, relatively lower yielding cash balances increased as a result of the $75 million subordinated debt and $50 million common stock issuances as well as strong deposit growth.

• The efficiency ratio was 56.16% for the fourth quarter of 2016, as compared to 58.70% for the same period in 2015.  The decrease in this ratio, in part, reflects the realization of cost savings from our acquisitions and the closure of seven branches in 2016. 

• For the fourth quarter of 2016, the Company recorded a provision for loan and lease losses of $0.4 million and had net charge-offs of $0.5 million.  The quarterly provision for loan and lease losses declined $1.4 million from the third quarter, primarily due to a significant payoff in classified loans.  At December 31, 2016, the ratio of non-performing assets to total assets was 0.42%, down from 0.61% at December 31, 2015. 

• On January 24, 2017, the Company declared a quarterly cash dividend of $0.095 per common share, payable February 17, 2017 to holders of record as of the close of business on February 7, 2017.

Thomas J. Shara, Lakeland Bancorp’s President and CEO, commented, “We are very proud of the Company’s many achievements in 2016 including our continued organic growth in both loans and deposits; the successful integration of two acquisitions in strategic market areas; and building our franchise to $5 billion in total assets.  In addition to these successes, we took advantage of the opportunity to bolster our capital levels through an equity offering in December and the subordinated debt issuance in September.  These moves position us favorably for future growth.”

Earnings

Net income for the fourth quarter of 2016 was $12.0 million, as compared to $8.5 million for the fourth quarter of 2015.  Net income for the fourth quarter of 2015 excluding merger related expenses was $9.2 million.

Net income for 2016 was $41.5 million compared to $32.5 million for the same period in 2015.  Excluding merger related expenses and other items, net income for 2016 was $44.3 million compared to $33.8 million in 2015.

Net Interest Income

Net interest income for the fourth quarter of 2016 was $38.2 million, as compared to $30.1 million for the same period in 2015.  This increase was primarily due to higher levels of interest earnings assets as a result of our acquisitions as well as organic growth.  NIM was 3.27% for the fourth quarter of 2016 compared to 3.43% for the fourth quarter of 2015.  This decrease was primarily attributed to two factors.  First, the $75 million subordinated debt offering in September 2016 added $1.0 million of interest expense for the quarter.  Second, the Company temporarily maintained an elevated level of interest earning cash balances as a result of the proceeds from the subordinated debt and stock issuance offerings as well as an influx of deposits prior to the deployment of these funds into higher interest earning assets. 

The yield on interest earning assets for the fourth quarter of 2016 was 3.74%, as compared to 3.76% reported in the fourth quarter of 2015.  The cost of interest bearing liabilities for the fourth quarter of 2016 was 0.62%, as compared to 0.44% in the fourth quarter of 2015, reflecting the new subordinated debt and moderately higher cost of deposits.

Net interest income for 2016 was $145.6 million, as compared to $116.6 million reported for 2015.  NIM for 2016 was 3.41%, compared to 3.47% in 2015.  The yield on earning assets was 3.82% for 2016 and 3.79% for 2015.  The cost of interest bearing liabilities for 2016 was 0.54%, as compared to 0.43% for 2015, reflecting the new subordinated debt and moderately higher cost of deposits.

Non-interest Income

Non-interest income totaled $5.2 million for the fourth quarter of 2016 compared to $4.8 million for the same period in 2015.  This increase was primarily due to higher swap fee income during the quarter. 

For the year, non-interest income totaled $21.3 million in 2016, as compared to $21.2 million in 2015, which included a $1.8 million gain on debt extinguishment.  The most significant increases in 2016 included $0.7 million in swap fee income, $0.5 million in BOLI death benefits and $0.4 million in gain on sale of loans. 

Non-interest Expense  

Non-interest expense for the fourth quarter of 2016 was $24.8 million, an increase of $2.6 million compared to $22.1 million for the same period in 2015.  Excluding the impact of merger related expenses, non-interest expense increased by $3.5 million.  Salary and employee benefit expense increased $1.9 million due primarily to the additional staff from the acquisitions and year-over-year increases in employee salary and benefit costs.  Net occupancy expense increased $0.5 million and furniture and equipment expense increased $0.3 million, due primarily to the additional locations.  Other expenses increased $0.8 million, primarily due to higher legal, collection, insurance and personnel expenses. 

For 2016, non-interest expense was $99.9 million, an increase of $12.7 million compared to 2015.  Excluding the impact of merger related expenses and the 2015 long-term debt prepayment fee of $2.4 million, non-interest expense increased by $12.2 million.  Salary and employee benefit expense increased by $7.5 million, due primarily to the additional staff from the acquisitions and year-over-year increases in employee salary and benefit costs.  Furniture and equipment expense increased $1.1 million and net occupancy expense increased $1.0 million due primarily to the additional locations.  Other expenses increased $1.2 million, due primarily to higher consulting, courier, director, insurance and investor relations expenses.

Financial Condition

In 2016, total assets increased $1.22 billion to $5.09 billion.  Total loans and leases increased by $904.9 million to $3.87 billion.  Total deposits increased $1.10 billion to $4.09 billion.  In January 2016, the Company acquired Pascack Bancorp, Inc., which had total assets, total loans and total deposits of $405.3 million, $319.6 million and $304.5 million, respectively.  In July 2016, the Company acquired Harmony Bank, which had total assets, total loans and total deposits of $326.4 million, $259.7 million and $278.1 million, respectively.

Asset Quality

At December 31, 2016, non-performing assets totaled $21.5 million (0.42% of total assets), compared to $23.7 million (0.61% of total assets) at December 31, 2015.  Non-performing loans and leases as a percent of total loans and leases decreased to 0.53% at December 31, 2016 from 0.76% at December 31, 2015.  The allowance for loan and lease losses totaled $31.2 million at December 31, 2016, and represented 0.81% of total loans and leases, compared to $30.9 million at December 31, 2015, which represented 1.04% of total loans and leases.  The decline in the allowance coverage is primarily attributed to improvement in asset quality and to the addition of acquired loans with no allowance for loan losses.  The Company had net charge-offs of $3.9 million (0.11% of average loans) in 2016 and $0.5 million (0.05% of average loans) for the fourth quarter of 2016.  The provision for loan and lease losses for 2016 was $4.2 million, versus $1.9 million in 2015.

Capital

At December 31, 2016, stockholders' equity was $550.0 million, while book value per common share was $11.65, an increase of 10% from December 31, 2015.  Tangible book value per common share was $8.69, an increase of 14% from December 31, 2015.  As of December 31, 2016, the Company’s leverage ratio was 9.06%.  Tier I and total risk based capital ratios were 10.84% and 13.47%, respectively, reflecting the issuance of the subordinated notes and additional shares of common stock.  The common equity tier 1 capital ratio was 10.10%.  At December 31, 2016, the tangible common equity ratio was 8.28%, compared to 7.69% as of December 31, 2015.  The regulatory capital ratios exceed those necessary to be considered a well-capitalized institution under Federal regulatory guidelines.

Forward-Looking Statements

The information disclosed in this document includes various forward-looking statements (with respect to corporate objectives, trends, and other financial and business matters) 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.  Lakeland 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 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 affecting the financial services industry, government intervention in the U.S. financial system, changes in levels of market interest rates, pricing pressures on loan and deposit products, credit risks of the Company’s lending and leasing activities, customers’ acceptance of the Company’s products and services, competition, and failure to successfully integrate and realize anticipated efficiencies and synergies after the Pascack Community Bank and Harmony Bank mergers.  Any statements made by Lakeland that are not historical facts should be considered to be forward-looking statements.  Lakeland 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.  Specifically, the Company 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 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 uses an efficiency ratio that is a non-GAAP financial measure.  The ratio that the Company uses excludes amortization of core deposit intangibles, expenses on other real estate owned and other repossessed assets, 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 securities gains and losses and gain on debt extinguishment, which can vary from period to period.  The Company uses this ratio because it believes the ratio provides a better comparison of period to period operating performance.

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.

About Lakeland BankLakeland Bancorp, the holding company for Lakeland Bank, has $5.1 billion in total assets with 52 New Jersey branch offices in Bergen, Essex, Morris, Ocean, Passaic, Somerset, Sussex, and Union counties; six New Jersey regional commercial lending centers in Bernardsville, Jackson, Montville, Newton, Teaneck and Waldwick; and two commercial loan production offices serving Middlesex and Monmouth counties in New Jersey and the Hudson Valley region of New York.  Lakeland Bank offers an extensive suite of financial products and services for businesses and consumers. Visit LakelandBank.com for more information.

Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
				Three Months Ended December 31,								Twelve Months Ended December 31,
(Dollars in thousands, except per share amounts)					2016				2015				2016				2015
INCOME STATEMENT
Net interest income				$	38,179			$	30,119			$	145,649			$	116,640
Provision for loan and lease losses					(375	)			-				(4,223	)			(1,942	)
Other non-interest income					4,636				4,290				18,837				17,409
Gain on sale of investment securities					-				51				370				241
Gain on sale of loans					525				437				2,123				1,681
Gain on debt extinguishment					-				-				-				1,830
Long-term debt prepayment fee					-				-				-				(2,407	)
Merger related expenses					-				(822	)			(4,103	)			(1,152	)
Other non-interest expense					(24,772	)			(21,320	)			(95,814	)			(83,652	)
Pretax income					18,193				12,755				62,839				48,648
Provision for income taxes					(6,240	)			(4,291	)			(21,321	)			(16,167	)
Net income				$	11,953			$	8,464			$	41,518			$	32,481
Basic earnings per common share				$	0.26			$	0.22			$	0.96			$	0.85
Diluted earnings per common share				$	0.26			$	0.22			$	0.95			$	0.85
Dividends per common share				$	0.095			$	0.085			$	0.370			$	0.330
Weighted average shares - basic					45,002				37,865				42,912				37,843
Weighted average shares - diluted					45,257				38,048				43,114				37,993
SELECTED OPERATING RATIOS
Annualized return on average assets					0.95	%			0.89	%			0.90	%			0.89	%
Annualized return on average common equity					9.31	%			8.40	%			8.75	%			8.28	%
Annualized return on average tangible common equity (1)					12.83	%			11.64	%			12.19	%			11.58	%
Annualized return on interest earning assets					3.74	%			3.76	%			3.82	%			3.79	%
Annualized cost of interest bearing liabilities					0.62	%			0.44	%			0.54	%			0.43	%
Annualized net interest spread					3.12	%			3.32	%			3.28	%			3.36	%
Annualized net interest margin					3.27	%			3.43	%			3.41	%			3.47	%
Efficiency ratio (1)					56.16	%			58.70	%			56.41	%			60.18	%
Stockholders' equity to total assets													10.80	%			10.35	%
Book value per common share												$	11.65			$	10.57
Tangible book value per common share (1)												$	8.69			$	7.62
Tangible common equity to tangible assets (1)													8.28	%			7.69	%
ASSET QUALITY RATIOS												12/31/2016				12/31/2015
Ratio of allowance for loan and lease losses to total loans and leases													0.81	%			1.04	%
Non-performing loans and leases to total loans and leases													0.53	%			0.76	%
Non-performing assets to total assets													0.42	%			0.61	%
Annualized net charge-offs to average loans and leases													0.11	%			0.06	%
SELECTED BALANCE SHEET DATA AT PERIOD-END												12/31/2016				12/31/2015
Loans and leases												$	3,872,805			$	2,967,946
Allowance for loan and lease losses													(31,245	)			(30,874	)
Investment securities													769,417				573,176
Total assets													5,093,131				3,869,550
Total deposits													4,092,835				2,995,571
Short-term borrowings													56,354				151,234
Other borrowings													365,650				303,143
Stockholders' equity													550,044				400,516
SELECTED AVERAGE BALANCE SHEET DATA				For the Three Months Ended								For the Twelve Months Ended
				12/31/2016				12/31/2015				12/31/2016				12/31/2015
Loans and leases				$	3,806,576			$	2,898,477			$	3,562,879			$	2,773,601
Investment securities					683,986				561,024				609,336				581,452
Interest earning assets					4,680,144				3,509,867				4,295,381				3,390,112
Total assets					5,015,439				3,779,819				4,619,816				3,648,836
Non-interest bearing demand deposits					951,418				722,270				852,629				695,630
Savings deposits					490,556				402,217				485,004				399,431
Interest bearing transaction accounts					2,072,154				1,573,638				1,880,391				1,511,954
Time deposits					539,870				328,080				506,487				303,682
Total deposits					4,053,998				3,026,205				3,724,511				2,910,697
Short-term borrowings					27,538				47,276				36,242				54,027
Other borrowings					392,789				286,887				356,907				274,908
Total interest bearing liabilities					3,522,907				2,638,098				3,265,031				2,544,003
Stockholders' equity					510,562				399,987				474,540				392,221
(1) See Supplemental Information - Non-GAAP Financial Measures

 

Lakeland Bancorp, Inc.
Consolidated Statements of Operations
(Unaudited)
						Three Months Ended December 31,					Twelve Months Ended December 31,
(Dollars in thousands, except per share amounts)							2016		2015			2016		2015
INTEREST INCOME
Loans and fees						$	40,090	$	30,065		$	149,777	$	115,295
Federal funds sold and interest bearing deposits with banks							228		32			569		62
Taxable investment securities and other							2,878		2,562			11,163		10,563
Tax exempt investment securities							487		396			1,787		1,594
TOTAL INTEREST INCOME							43,683		33,055			163,296		127,514
INTEREST EXPENSE
Deposits							3,017		1,662			10,512		5,755
Federal funds purchased and securities sold under agreements to repurchase							3		18			69		110
Other borrowings							2,484		1,256			7,066		5,009
TOTAL INTEREST EXPENSE							5,504		2,936			17,647		10,874
NET INTEREST INCOME							38,179		30,119			145,649		116,640
Provision for loan and lease losses							375		-			4,223		1,942
NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES							37,804		30,119			141,426		114,698
NON-INTEREST INCOME
Service charges on deposit accounts							2,577		2,620			10,157		10,024
Commissions and fees							1,089		1,081			4,349		4,568
Gain on sale of investment securities							-		51			370		241
Gain on sale of loans							525		437			2,123		1,681
Gain on debt extinguishment							-		-			-		1,830
Income on bank owned life insurance							437		475			2,562		2,017
Other income							533		114			1,769		800
TOTAL NON-INTEREST INCOME							5,161		4,778			21,330		21,161
NON-INTEREST EXPENSE
Salaries and employee benefit expense							14,305		12,370			56,107		48,640
Net occupancy expense							2,534		2,068			9,935		8,956
Furniture and equipment expense							2,113		1,764			8,017		6,930
Stationary, supplies and postage expense							456		392			1,727		1,529
Marketing expense							549		534			1,672		1,586
FDIC insurance expense							262		563			2,248		2,086
ATM and debit card expense							433		317			1,582		1,398
Telecommunications expense							342		374			1,631		1,448
Data processing expense							394		392			1,891		1,524
Other real estate owned and other repossessed assets expense							83		135			116		181
Long-term debt prepayment fee							-		-			-		2,407
Merger related expenses							-		822			4,103		1,152
Core deposit intangible amortization							202		99			734		415
Other expenses							3,099		2,312			10,154		8,959
TOTAL NON-INTEREST EXPENSE							24,772		22,142			99,917		87,211
INCOME BEFORE PROVISION FOR INCOME TAXES							18,193		12,755			62,839		48,648
Provision for income taxes							6,240		4,291			21,321		16,167
NET INCOME						$	11,953	$	8,464		$	41,518	$	32,481
EARNINGS PER COMMON SHARE
Basic						$	0.26	$	0.22		$	0.96	$	0.85
Diluted						$	0.26	$	0.22		$	0.95	$	0.85
DIVIDENDS PER COMMON SHARE						$	0.095	$	0.085		$	0.370	$	0.330

 

Lakeland Bancorp, Inc.
Consolidated Balance Sheets
					December 31,				December 31,
(Dollars in thousands)						2016				2015
					(Unaudited)
ASSETS
Cash and due from banks					$	169,149			$	113,894
Federal funds sold and interest bearing deposits due from banks						6,652				4,599
Total cash and cash equivalents						175,801				118,493
Investment securities available for sale, at fair value						606,704				442,349
Investment securities held to maturity; fair value of $146,990 in 2016
and $117,594 in 2015						147,614				116,740
Federal Home Loan Bank and other membership stocks, at cost						15,099				14,087
Loans held for sale						1,742				1,233
Loans and leases:
Commercial, real estate						2,766,620				1,879,659
Commercial, industrial and other						350,228				307,044
Leases						67,016				56,660
Residential mortgages						349,581				389,692
Consumer and home equity						339,360				334,891
Total loans and leases						3,872,805				2,967,946
Net deferred costs (fees)						(3,297	)			(2,746	)
Allowance for loan and lease losses						(31,245	)			(30,874	)
Net loans and leases						3,838,263				2,934,326
Premises and equipment, net						52,236				35,881
Accrued interest receivable						12,557				9,208
Goodwill						136,392				109,974
Other identifiable intangible assets						3,344				1,545
Bank owned life insurance						72,384				65,361
Other assets						30,995				20,353
TOTAL ASSETS					$	5,093,131			$	3,869,550
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Non-interest bearing					$	927,270			$	693,741
Savings and interest bearing transaction accounts						2,620,657				1,958,510
Time deposits through $250,000						404,680				270,623
Time deposits over $250,000						140,228				72,698
Total deposits						4,092,835				2,995,572
Federal funds purchased and securities sold under agreements to repurchase						56,354				151,234
Other borrowings						260,866				271,905
Subordinated debentures						104,784				31,238
Other liabilities						28,248				19,085
TOTAL LIABILITIES						4,543,087				3,469,034
STOCKHOLDERS' EQUITY
Common stock, no par value; authorized 70,000,000 shares;
issued 47,222,914 shares at December 31, 2016
and 37,906,481 shares at December 31, 2015						510,861				386,287
Retained earnings						38,590				13,079
Accumulated other comprehensive gain						593				1,150
TOTAL STOCKHOLDERS' EQUITY						550,044				400,516
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY					$	5,093,131			$	3,869,550

 

Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
			For the Quarter Ended
			Dec 31,			Sept 30,			June 30,			Mar 31,			Dec 31,
(Dollars in thousands, except per share data)				2016			2016			2016			2016			2015
INCOME STATEMENT
Net interest income			$	38,179		$	38,518		$	35,102		$	33,850		$	30,119
Provision for loan and lease losses				(375	)		(1,763	)		(1,010	)		(1,075	)		-
Other non-interest income				4,636			5,664			4,460			4,077			4,290
Gain on investment securities				-			-			-			370			51
Gain on sale of loans				525			753			425			420			437
Merger related expenses				-			(1,697	)		(685	)		(1,721	)		(822	)
Other non-interest expense				(24,772	)		(24,309	)		(23,030	)		(23,703	)		(21,320	)
Pretax income				18,193			17,166			15,262			12,218			12,755
Provision for income taxes				(6,240	)		(5,839	)		(5,132	)		(4,110	)		(4,291	)
Net income			$	11,953		$	11,327		$	10,130		$	8,108		$	8,464
Basic earnings per common share			$	0.26		$	0.25		$	0.24		$	0.20		$	0.22
Diluted earnings per common share			$	0.26		$	0.25		$	0.24		$	0.20		$	0.22
Dividends per common share			$	0.095		$	0.095		$	0.095		$	0.085		$	0.085
Dividends paid			$	4,265		$	4,261		$	3,955		$	3,525		$	3,246
Weighted average shares - basic				45,002			44,439			41,238			40,931			37,865
Weighted average shares - diluted				45,257			44,659			41,406			41,091			38,048
SELECTED OPERATING RATIOS
Annualized return on average assets				0.95	%		0.94	%		0.93	%		0.77	%		0.89	%
Annualized return on average common equity				9.31	%		9.10	%		9.04	%		7.40	%		8.40	%
Annualized return on average tangible common equity (1)				12.83	%		12.68	%		12.63	%		10.40	%		11.64	%
Annualized net interest margin				3.27	%		3.45	%		3.47	%		3.48	%		3.43	%
Efficiency ratio (1)				56.16	%		53.42	%		56.23	%		60.38	%		58.70	%
Common stockholders' equity to total assets				10.80	%		10.17	%		10.18	%		10.15	%		10.35	%
Tangible common equity to tangible assets (1)				8.28	%		7.53	%		7.53	%		7.45	%		7.69	%
Tier 1 risk-based ratio				10.84	%		9.70	%		9.73	%		9.93	%		10.53	%
Total risk-based ratio				13.47	%		12.40	%		10.65	%		10.87	%		11.61	%
Tier 1 leverage ratio				9.06	%		8.26	%		8.24	%		8.33	%		8.70	%
Common equity tier 1 capital ratio				10.10	%		8.94	%		8.90	%		9.06	%		9.54	%
Book value per common share			$	11.65		$	11.22		$	11.03		$	10.84		$	10.57
Tangible book value per common share (1)			$	8.69		$	8.07		$	7.93		$	7.72		$	7.62
(1) See Supplemental Information - Non-GAAP Financial Measures

 

Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
				For the Quarter Ended
				Dec 31,			Sept 30,			June 30,			Mar 31,			Dec 31,
(Dollars in thousands)					2016			2016			2016			2016			2015
SELECTED BALANCE SHEET DATA AT PERIOD-END
Loans and leases				$	3,872,805		$	3,794,519		$	3,454,304		$	3,368,961		$	2,967,946
Allowance for loan and lease losses					(31,245	)		(31,369	)		(30,667	)		(30,553	)		(30,874	)
Investment securities					769,417			638,091			602,408			573,136			573,176
Total assets					5,093,131			4,904,291			4,467,860			4,404,233			3,869,550
Total deposits					4,092,835			3,941,742			3,537,331			3,462,636			2,995,571
Short-term borrowings					56,354			29,699			123,662			128,841			151,234
Other borrowings					365,650			398,671			326,009			341,269			303,143
Stockholders' equity					550,044			498,722			454,934			446,875			400,516
LOANS AND LEASES
Commercial, real estate				$	2,766,620		$	2,675,154		$	2,353,125		$	2,243,335		$	1,879,659
Commercial, industrial and other					350,228			339,291			313,062			332,097			307,044
Leases					67,016			65,659			63,338			60,925			56,660
Residential mortgages					349,581			370,766			383,823			392,387			389,692
Consumer and home equity					339,360			343,649			340,956			340,217			334,891
Total loans and leases				$	3,872,805		$	3,794,519		$	3,454,304		$	3,368,961		$	2,967,946
DEPOSITS
Non-interest bearing				$	927,270		$	931,385		$	824,077		$	774,487		$	693,741
Savings and interest bearing transaction accounts					2,620,657			2,471,097			2,235,918			2,204,356			1,958,510
Time deposits					544,908			539,260			477,336			483,793			343,321
Total deposits				$	4,092,835		$	3,941,742		$	3,537,331		$	3,462,636		$	2,995,572
SELECTED AVERAGE BALANCE SHEET DATA
Loans and leases				$	3,806,576		$	3,743,434		$	3,412,503		$	3,284,339		$	2,898,477
Investment securities					683,986			606,779			575,206			570,581			561,024
Interest earning assets					4,680,144			4,467,524			4,094,575			3,933,160			3,509,867
Total assets					5,015,439			4,805,381			4,403,588			4,248,468			3,779,819
Non-interest bearing demand deposits					951,418			895,851			801,488			760,198			722,270
Savings deposits					490,556			487,918			485,580			475,870			402,217
Interest bearing transaction accounts					2,072,154			1,988,405			1,775,129			1,682,580			1,573,638
Time deposits					539,870			533,224			487,169			465,024			328,080
Total deposits					4,053,998			3,905,398			3,549,366			3,383,672			3,026,205
Short-term borrowings					27,538			35,608			31,591			50,335			47,276
Other borrowings					392,789			339,204			346,347			349,088			286,887
Total interest bearing liabilities					3,522,907			3,384,359			3,125,815			3,022,897			2,638,098
Stockholders' equity					510,562			495,343			450,806			440,823			399,987

 

Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
				For the Quarter Ended
				Dec 31,			Sept 30,			June 30,			Mar 31,			Dec 31,
(Dollars in thousands)					2016			2016			2016			2016			2015
AVERAGE ANNUALIZED YIELDS (TAXABLE EQUIVALENT BASIS)
ASSETS
Loans and leases					4.19	%		4.23	%		4.22	%		4.18	%		4.12	%
Taxable investment securities and other					2.00	%		2.06	%		2.18	%		2.39	%		2.09	%
Tax-exempt securities					2.75	%		3.01	%		3.15	%		3.40	%		3.49	%
Federal funds sold and interest bearing cash accounts					0.48	%		0.48	%		0.46	%		0.38	%		0.25	%
Total interest earning assets					3.74	%		3.85	%		3.85	%		3.86	%		3.76	%
LIABILITIES
Savings accounts					0.06	%		0.06	%		0.05	%		0.08	%		0.05	%
Interest bearing transaction accounts					0.35	%		0.34	%		0.31	%		0.30	%		0.26	%
Time deposits					0.84	%		0.81	%		0.79	%		0.74	%		0.70	%
Borrowings					2.37	%		1.71	%		1.62	%		1.52	%		1.53	%
Total interest bearing liabilities					0.62	%		0.53	%		0.50	%		0.49	%		0.44	%
Net interest spread (taxable equivalent basis)					3.12	%		3.32	%		3.35	%		3.37	%		3.32	%
Annualized net interest margin (taxable equivalent basis)					3.27	%		3.45	%		3.47	%		3.48	%		3.43	%
Annualized cost of deposits					0.30	%		0.29	%		0.27	%		0.26	%		0.22	%
ASSET QUALITY DATA
ALLOWANCE FOR LOAN AND LEASE LOSSES
Balance at beginning of period				$	31,369		$	30,667		$	30,553		$	30,874		$	30,994
Provision for loan and lease losses					375			1,763			1,010			1,075			-
Charge-offs					(795	)		(1,273	)		(1,045	)		(1,543	)		(1,140	)
Recoveries					296			212			149			147			1,020
Balance at end of period				$	31,245		$	31,369		$	30,667		$	30,553		$	30,874
NET LOAN AND LEASE CHARGE-OFFS (RECOVERIES)
Commercial, real estate				$	(87	)	$	(11	)	$	113		$	81		$	(450	)
Commercial, industrial and other					(96	)		(30	)		137			583			(56	)
Leases					42			40			183			69			(1	)
Residential mortgages					231			385			213			89			66
Consumer and home equity					409			677			250			574			561
Net charge-offs (recoveries)				$	499		$	1,061		$	896		$	1,396		$	120
NON-PERFORMING ASSETS
Commercial, real estate				$	11,885		$	13,068		$	12,554		$	11,943		$	10,446
Commercial, industrial and other					167			39			41			1,163			103
Leases					153			78			159			282			316
Residential mortgages					6,048			7,264			8,865			8,330			8,664
Consumer and home equity					2,151			2,210			3,325			3,249			3,167
Total non-accruing loans and leases					20,404			22,659			24,944			24,967			22,696
Property acquired through foreclosure or repossession					1,072			1,918			1,594			792			983
Total non-performing assets				$	21,476		$	24,577		$	26,538		$	25,759		$	23,679
Loans past due 90 days or more and still accruing				$	10		$	10		$	42		$	101		$	331
Loans restructured and still accruing				$	8,802		$	9,251		$	9,509		$	10,545		$	10,108
Ratio of allowance for loan and lease losses to total loans and leases					0.81	%		0.83	%		0.89	%		0.91	%		1.04	%
Non-performing loans and leases to total loans and leases					0.53	%		0.60	%		0.72	%		0.74	%		0.76	%
Non-performing assets to total assets					0.42	%		0.50	%		0.59	%		0.58	%		0.61	%
Annualized net charge-offs (recoveries) to average loans					0.05	%		0.11	%		0.11	%		0.17	%		0.02	%

 

Lakeland Bancorp, Inc.
Supplemental Information - Non-GAAP Financial Measures
(Unaudited)
				At or for the Quarter Ended
				Dec 31,			Sept 30,			June 30,			Mar 31,			Dec 31,
(Dollars in thousands, except per share amounts)					2016			2016			2016			2016			2015
CALCULATION OF TANGIBLE BOOK VALUE PER COMMON SHARE
Total common stockholders' equity at end of period - GAAP				$	550,044		$	498,722		$	454,934		$	446,875		$	400,516
Less:  Goodwill					136,392			136,392			125,285			125,443			109,974
Less:  Other identifiable intangible assets					3,344			3,545			2,728			2,891			1,545
Total tangible common stockholders' equity at end of period - Non-GAAP				$	410,308		$	358,785		$	326,921		$	318,541		$	288,997
Shares outstanding at end of period					47,223			44,443			41,241			41,241			37,906
Book value per share - GAAP				$	11.65		$	11.22		$	11.03		$	10.84		$	10.57
Tangible book value per share - Non-GAAP				$	8.69		$	8.07		$	7.93		$	7.72		$	7.62
CALCULATION OF TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS
Total tangible common stockholders' equity at end of period - Non-GAAP				$	410,308		$	358,785		$	326,921		$	318,541		$	288,997
Total assets at end of period - GAAP				$	5,093,131		$	4,904,291		$	4,467,860		$	4,404,233		$	3,869,550
Less:  Goodwill					136,392			136,392			125,285			125,443			109,974
Less:  Other identifiable intangible assets					3,344			3,545			2,728			2,891			1,545
Total tangible assets at end of period - Non-GAAP				$	4,953,395		$	4,764,354		$	4,339,847		$	4,275,899		$	3,758,031
Common equity to assets - GAAP					10.80	%		10.17	%		10.18	%		10.15	%		10.35	%
Tangible common equity to tangible assets - Non-GAAP					8.28	%		7.53	%		7.53	%		7.45	%		7.69	%
CALCULATION OF RETURN ON AVERAGE TANGIBLE COMMON EQUITY
Net income - GAAP				$	11,953		$	11,327		$	10,130		$	8,108		$	8,464
Total average common stockholders' equity - GAAP				$	510,562		$	495,343		$	450,806		$	440,823		$	399,987
Less:  Average goodwill					136,392			136,392			125,424			124,423			109,974
Less:  Average other identifiable intangible assets					3,459			3,685			2,828			2,920			1,606
Total average tangible common stockholders' equity - Non-GAAP				$	370,711		$	355,266		$	322,554		$	313,480		$	288,407
Return on average common stockholders' equity - GAAP					9.31	%		9.10	%		9.04	%		7.40	%		8.40	%
Return on average tangible common stockholders' equity - Non-GAAP					12.83	%		12.68	%		12.63	%		10.40	%		11.64	%
CALCULATION OF EFFICIENCY RATIO
Total non-interest expense				$	24,772		$	26,006		$	23,715		$	25,424		$	22,142
Amortization of core deposit intangibles					(202	)		(201	)		(164	)		(167	)		(99	)
Other real estate owned and other repossessed asset expense					(83	)		32			(26	)		(39	)		(135	)
Merger related expenses					-			(1,697	)		(685	)		(1,721	)		(822	)
Provision for unfunded lending commitments					-			-			(230	)		(208	)		(506	)
Non-interest expense, as adjusted				$	24,487		$	24,140		$	22,610		$	23,289		$	20,580
Net interest income				$	38,179		$	38,518		$	35,102		$	33,850		$	30,119
Total non-interest income					5,161			6,417			4,885			4,867			4,778
Total revenue					43,340			44,935			39,987			38,717			34,897
Tax-equivalent adjustment on municipal securities					262			253			225			222			212
Gains on sale of investment securities					-			-			-			(370	)		(51	)
Total revenue, as adjusted				$	43,602		$	45,188		$	40,212		$	38,569		$	35,058
Efficiency ratio - Non-GAAP					56.16	%		53.42	%		56.23	%		60.38	%		58.70	%
				For the Quarter Ended						For the Twelve Months Ended
				Dec 31,			Dec 31,			Dec 31,			Dec 31,
(Dollars in thousands, except per share amounts)					2016			2015			2016			2015
RECONCILIATION OF EARNINGS PER SHARE
Net income - GAAP				$	11,953		$	8,464		$	41,518		$	32,481
NON-ROUTINE TRANSACTIONS
Debt prepayment charges ($2,407 before tax)					-			-			-			1,424
Gain on debt extinguishment ($1,830 before tax)					-			-			-			(1,082	)
Associated gain on sale of investment securities ($173 before tax)					-			-			-			(102	)
Tax deductible merger related expenses					-			60			1,915			150
Non-tax deductible merger related expenses					-			716			866			889
Net effect of non-routine transactions					-			776			2,781			1,279
Adjusted net income					11,953			9,240			44,299			33,760
Less:  Earnings allocated to participating securities					(122	)		(74	)		(396	)		(263	)
Total adjusted net income - Non-GAAP				$	11,831		$	9,166		$	43,903		$	33,497
Weighted average shares - Basic					45,002			37,865			42,912			37,843
Weighted average shares - Diluted					45,257			38,048			43,114			37,993
Basic earnings per share - Non-GAAP				$	0.26		$	0.24		$	1.02		$	0.89
Diluted earnings per share - Non-GAAP				$	0.26		$	0.24		$	1.02		$	0.88

 

Lakeland Bancorp, Inc.
Supplemental Information - Non-GAAP Financial Measures
(Unaudited)
				For the Twelve Months Ended,
				Dec 31,			Dec 31,
(Dollars in thousands)					2016			2015
CALCULATION OF RETURN ON AVERAGE TANGIBLE COMMON EQUITY
Net income - GAAP				$	41,518		$	32,481
Total average common stockholders' equity - GAAP				$	474,540		$	392,221
Less:  Average goodwill					130,689			109,974
Less:  Average other identifiable intangible assets					3,225			1,759
Total average tangible common stockholders' equity - Non-GAAP				$	340,626		$	280,488
Return on average common stockholders' equity - GAAP					8.75	%		8.28	%
Return on average tangible common stockholders' equity - Non-GAAP					12.19	%		11.58	%
CALCULATION OF EFFICIENCY RATIO
Total non-interest expense				$	99,917		$	87,211
Amortization of core deposit intangibles					(734	)		(415	)
Other real estate owned and other repossessed asset expense					(116	)		(181	)
Long-term debt prepayment fee					-			(2,407	)
Merger related expenses					(4,103	)		(1,152	)
Provision for unfunded lending commitments					(438	)		(864	)
Non-interest expense, as adjusted				$	94,526		$	82,192
Net interest income				$	145,649		$	116,640
Non-interest income					21,330			21,161
Total revenue					166,979			137,801
Tax-equivalent adjustment on municipal securities					962			857
Gain on debt extinguishment					-			(1,830	)
Gain on sale of investment securities					(370	)		(241	)
Total revenue, as adjusted				$	167,571		$	136,587
Efficiency ratio - Non-GAAP					56.41	%		60.18	%

Thomas J. Shara
President & CEO
Joseph F. Hurley
EVP & CFO
973-697-2000