LBAI Lakeland Bancorp Inc

Lakeland Bancorp, Inc. (NASDAQ:LBAI) (the “Company”), the parent company of Lakeland Bank (“Lakeland”), reported net income of $13.4 million for the three months ended June 30, 2017 compared to $10.1 million for the same period in 2016.  For the three months ended June 30, 2017, diluted earnings per share (“EPS”) of $0.28 increased 17% from $0.24 for the same period in 2016.  For the second quarter of 2017, return on average assets was 1.02%, return on average common equity was 9.49%, and return on average tangible common equity was 12.58%.

For the six months ended June 30, 2017, the Company reported net income of $25.7 million, a 41% increase over $18.2 million for the same period in 2016.  Over the same period, the Company reported EPS of $0.53 in 2017, an increase of 20% over $0.44 in 2016.  Year-to-date 2017, return on average assets was 1.00%, return on average common equity was 9.26%, and return on average tangible common equity was 12.31%.

Thomas Shara, Lakeland Bancorp’s President and CEO, commented on the quarterly results, “Our strong financial results were driven by the expansion of our net interest margin by 8 basis points for the quarter and 14 basis points year-to-date.  We continue to improve our financial performance with a return on assets over 1%, return on equity of 9.5%, return on tangible common equity of 12.6%, a reduction in our efficiency ratio below 53% and our non-performing assets to total assets ratio dropping to 33 basis points – the lowest in ten years.”

The following represents performance highlights and significant events for the second quarter of 2017:

• Net interest margin (“NIM”) was 3.41% compared to 3.33% in the prior quarter and 3.27% in the quarter ended December 31, 2016.  The NIM increase from the linked quarter was primarily due to loan yields increasing seven basis points partially offset by rising deposit costs.

• Total loans grew $79.6 million, or 2.0%, during the quarter to $4.05 billion.

• Noninterest bearing deposits increased $54.1 million during the quarter, or 5.8%, to $978.7 million.                                             

• The efficiency ratio of 52.6% decreased from 56.4% in the prior quarter and 56.3% for the same period in 2016.

• Tangible book value per share increased to $9.05 at June 30, 2017, an annualized increase of 9.5% for the quarter.

• On July 19, 2017, the Company declared a cash dividend of $0.10 per share to be paid on August 15, 2017 to stockholders of record as of July 31, 2017.

EarningsNet income for the second quarter of 2017 was $13.4 million, a 32% increase compared to $10.1 million for the same period in 2016.  After excluding merger related expenses incurred in the second quarter of 2016, this increase was 25%.

Year-to-date net income for 2017 was $25.7 million, a 41% increase compared to $18.2 million for the same period in 2016.  After excluding merger related expenses incurred in 2016, this increase was 29%.

Net Interest IncomeNet interest income for the second quarter of 2017 was $41.4 million, compared to $35.1 million for the same period in 2016.  Year-to-date net interest income for 2017 was $80.7 million, as compared to $69.0 million for the same period in 2016.  Total interest income increased due to the organic growth of earning assets as well as the merger with Harmony Bank in July 2016 (the “merger”).  Total interest expense increased primarily due to additional deposits from the merger, organic deposit growth and the impact of the subordinated debt offering in September 2016.

Noninterest IncomeNoninterest income totaled $6.1 million for the second quarter of 2017 compared to $4.9 million for the same period in 2016.  This increase was primarily due a $0.3 million gain on the sale of a former branch, a $0.3 million gain on the payoff of an acquired loan as well as higher fee income.

Year-to-date 2017 noninterest income totaled $14.2 million compared to $9.8 million for the same period in 2016.  This increase was primarily due to $2.2 million in additional gains on the sales of investment securities, $0.7 million from the sales of two former branches in 2017, $0.4 million increase on the sales of other real estate, $0.3 million gain on the payoff of an acquired loan and $0.3 million increase in swap income.

Noninterest ExpenseNoninterest expense totaled $25.4 million for the second quarter of 2017 compared to $23.7 million for the same period in 2016, which included $0.7 million in merger related expenses.  This increase was primarily due to $2.0 million in additional salary and employee benefit expenses associated with the merger and increases in employee salary and benefit costs.  These increases were partially offset by a $0.3 million reduction in the cost of FDIC insurance.

Year-to-date 2017 noninterest expense totaled $53.8 million compared to $49.1 million for the same period in 2016.  During 2017, the Company incurred long-term debt prepayment penalties of $2.8 million, and during 2016, the Company incurred $2.4 million in merger related expenses.  The resulting $4.3 million net increase was primarily due to $3.3 million in additional salary and employee benefit expenses associated with the merger and increases in employee salary and benefit costs.  In addition, other expenses increased by $0.4 million, primarily due to higher legal, correspondent and audit fees.

Financial ConditionIn 2017, total assets increased $269.1 million, or 5.3%, to $5.36 billion as total loans and leases grew $180.4 million, or 4.7%, to $4.05 billion and investment securities increased $61.1 million, or 7.9%, to $830.5 million.  On the funding side, total deposits grew $134.4 million, or 3.3%, to $4.23 billion while borrowings increased $113.6 million, or 26.9%, to $535.6 million.

Asset QualityAt June 30, 2017, non-performing assets totaled $17.7 million (0.33% of total assets) compared to $21.5 million (0.42% of total assets) at December 31, 2016.  Non-performing loans and leases as a percent of total loans and leases decreased to 0.40% at June 30, 2017 from 0.53% at December 31, 2016.  The allowance for loan and lease losses increased to $32.8 million at June 30, 2017, and represented 0.81% of total loans and leases.  For the six months ended June 30, 2017, the Company had net charge-offs of $1.5 million (annualized 0.07% of average loans and leases) compared to $2.3 million (annualized 0.14% of average loans and leases) for the same period in 2016.  The year-to-date provision for loan and lease losses was $3.0 million compared to $2.1 million for the same period in 2016.

CapitalAt June 30, 2017, stockholders' equity was $567.5 million compared to $550.0 million at December 31, 2016.   At June 30, 2017, the book value per common share and tangible book value per common share were $11.99 and $9.05 compared to $11.65 and $8.70, respectively, at December 31, 2016.

Forward-Looking StatementsThe 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.  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 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, and competition.  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 MeasuresReported 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 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.  See accompanying non-GAAP tables.

About Lakeland BankLakeland Bank is the wholly-owned subsidiary of Lakeland Bancorp, Inc. (NASDAQ:LBAI), which has $5.4 billion in total assets. The Bank operates 53 branch offices throughout Bergen, Essex, Morris, Ocean, Passaic, Somerset, Sussex, and Union counties in New Jersey including one branch in Highland Mills, New York; six New Jersey regional commercial lending centers in Bernardsville, Jackson, Montville, Newton, Teaneck and Waldwick; and one in New York to serve the Hudson Valley region. Lakeland also has a commercial loan production office serving Middlesex and Monmouth counties in New Jersey.  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 June 30,								Six Months Ended June 30,
(Dollars in thousands, except per share amounts)					2017				2016				2017				2016
INCOME STATEMENT
Net interest income				$	41,421			$	35,102			$	80,744			$	68,952
Provision for loan and lease losses					(1,827	)			(1,010	)			(3,045	)			(2,085	)
Other noninterest income					5,655				4,460				10,812				8,537
Gains (losses) on sales of investment securities					(15	)			-				2,524				370
Gains on sales of loans					471				425				869				845
Long-term debt prepayment fee					-				-				(2,828	)			-
Merger related expenses					-				(685	)			-				(2,406	)
Other noninterest expense					(25,366	)			(23,030	)			(51,008	)			(46,733	)
Pretax income					20,339				15,262				38,068				27,480
Provision for income taxes					(6,969	)			(5,132	)			(12,386	)			(9,242	)
Net income				$	13,370			$	10,130			$	25,682			$	18,238
Basic earnings per common share				$	0.28			$	0.24			$	0.54			$	0.44
Diluted earnings per common share				$	0.28			$	0.24			$	0.53			$	0.44
Dividends per common share				$	0.10			$	0.095			$	0.195			$	0.180
Weighted average shares - basic					47,465				41,238				47,410				41,084
Weighted average shares - diluted					47,674				41,406				47,646				41,245
SELECTED OPERATING RATIOS
Annualized return on average assets					1.02	%			0.93	%			1.00	%			0.85	%
Annualized return on average common equity					9.49	%			9.04	%			9.26	%			8.23	%
Annualized return on average tangible common equity (1)					12.58	%			12.63	%			12.31	%			11.53	%
Annualized return on interest-earning assets					3.88	%			3.85	%			3.83	%			3.86	%
Annualized cost of interest-bearing liabilities					0.63	%			0.50	%			0.62	%			0.50	%
Annualized net interest spread					3.25	%			3.35	%			3.22	%			3.36	%
Annualized net interest margin					3.41	%			3.47	%			3.37	%			3.48	%
Efficiency ratio (1)					52.64	%			56.29	%			54.44	%			58.34	%
Stockholders' equity to total assets													10.58	%			10.18	%
Book value per common share												$	11.99			$	11.03
Tangible book value per common share (1)												$	9.05			$	7.93
Tangible common equity to tangible assets (1)													8.20	%			7.53	%
ASSET QUALITY RATIOS												6/30/2017				6/30/2016
Ratio of allowance for loan and lease losses to total loans and leases													0.81	%			0.89	%
Non-performing loans and leases to total loans and leases													0.40	%			0.72	%
Non-performing assets to total assets													0.33	%			0.59	%
Annualized net charge-offs to average loans and leases													0.07	%			0.14	%
SELECTED BALANCE SHEET DATA AT PERIOD-END												6/30/2017				6/30/2016
Loans and leases												$	4,054,276			$	3,454,304
Allowance for loan and lease losses													(32,823	)			(30,667	)
Investment securities													830,531				602,408
Total assets													5,362,187				4,467,860
Total deposits													4,227,204				3,537,331
Short-term borrowings													118,487				123,662
Other borrowings													417,093				326,009
Stockholders' equity													567,545				454,934
SELECTED AVERAGE BALANCE SHEET DATA				For the Three Months Ended								For the Six Months Ended
				6/30/2017				6/30/2016				6/30/2017				6/30/2016
Loans and leases				$	4,011,325			$	3,412,503			$	3,958,564			$	3,348,421
Investment securities					837,075				575,206				813,690				572,894
Interest-earning assets					4,907,488				4,094,575				4,866,897				4,013,868
Total assets					5,241,155				4,403,589				5,197,765				4,326,030
Noninterest-bearing demand deposits					954,966				801,488				938,460				780,843
Savings deposits					492,991				485,580				491,890				480,725
Interest-bearing transaction accounts					2,295,256				1,775,129				2,268,752				1,728,855
Time deposits					559,665				487,169				557,479				476,097
Total deposits					4,302,878				3,549,366				4,256,581				3,466,520
Short-term borrowings					52,951				31,591				40,722				40,963
Other borrowings					291,882				346,347				312,203				347,718
Total interest-bearing liabilities					3,692,745				3,125,815				3,671,047				3,074,357
Stockholders' equity					565,211				450,806				559,528				445,815
(1) See Supplemental Information - Non-GAAP Financial Measures

 

Lakeland Bancorp, Inc.
Consolidated Statements of Operations
(Unaudited)
						Three Months Ended June 30,						Six Months Ended June 30,
(Dollars in thousands, except per share amounts)							2017			2016			2017		2016
INTEREST INCOME
Loans, leases and fees						$	42,740		$	35,800		$	83,151	$	69,921
Federal funds sold and interest-bearing deposits with banks							132			124			408		199
Taxable investment securities and other							3,818			2,696			7,417		5,658
Tax exempt investment securities							522			417			1,032		830
	TOTAL INTEREST INCOME						47,212			39,037			92,008		76,608
INTEREST EXPENSE
Deposits							3,784			2,404			7,118		4,609
Federal funds purchased and securities sold under agreements to repurchase							98			9			108		47
Other borrowings							1,909			1,522			4,038		3,000
	TOTAL INTEREST EXPENSE						5,791			3,935			11,264		7,656
NET INTEREST INCOME							41,421			35,102			80,744		68,952
Provision for loan and lease losses							1,827			1,010			3,045		2,085
	NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES						39,594			34,092			77,699		66,867
NONINTEREST INCOME
Service charges on deposit accounts							2,674			2,523			5,129		4,965
Commissions and fees							1,135			1,099			2,291		2,078
Gains (losses) on sales of investment securities							(15	)		-			2,524		370
Gains on sales of loans							471			425			869		845
Income on bank owned life insurance							500			414			926		822
Other income							1,346			424			2,466		672
	TOTAL NONINTEREST INCOME						6,111			4,885			14,205		9,752
NONINTEREST EXPENSE
Salaries and employee benefit expense							15,096			13,091			30,513		27,176
Net occupancy expense							2,507			2,341			5,343		5,029
Furniture and equipment expense							1,996			2,082			4,093		4,028
Stationary, supplies and postage expense							572			416			1,015		859
Marketing expense							508			385			909		694
FDIC insurance expense							425			681			743		1,271
ATM and debit card expense							517			383			958		729
Telecommunications expense							372			386			776		810
Data processing expense							502			459			1,055		979
Other real estate owned and other repossessed assets expense							4			26			41		65
Long-term debt prepayment fee							-			-			2,828		-
Merger related expenses							-			685			-		2,406
Core deposit intangible amortization							190			164			385		331
Other expenses							2,677			2,616			5,177		4,762
	TOTAL NONINTEREST EXPENSE						25,366			23,715			53,836		49,139
INCOME BEFORE PROVISION FOR INCOME TAXES							20,339			15,262			38,068		27,480
Provision for income taxes							6,969			5,132			12,386		9,242
NET INCOME						$	13,370		$	10,130		$	25,682	$	18,238
EARNINGS PER COMMON SHARE
Basic						$	0.28		$	0.24		$	0.54	$	0.44
Diluted						$	0.28		$	0.24		$	0.53	$	0.44
DIVIDENDS PER COMMON SHARE						$	0.100		$	0.095		$	0.195	$	0.180

 

Lakeland Bancorp, Inc.
Consolidated Balance Sheets
					June 30,				December 31,
(Dollars in thousands)						2017				2016
					(Unaudited)
ASSETS
Cash					$	169,109			$	169,149
Interest-bearing deposits due from banks						16,573				6,652
Total cash and cash equivalents						185,682				175,801
Investment securities available for sale, at fair value						673,164				606,704
Investment securities held to maturity; fair value of $138,619 at June 30, 2017
and $146,990 at December 31, 2016						138,468				147,614
Federal Home Loan Bank and other membership stocks, at cost						18,899				15,099
Loans held for sale						877				1,742
Loans and leases:
Commercial, real estate						2,955,596				2,767,710
Commercial, industrial and other						352,977				350,228
Leases						70,295				67,016
Residential mortgages						337,765				349,581
Consumer and home equity						337,643				339,360
Total loans and leases						4,054,276				3,873,895
Net deferred costs (fees)						(3,545	)			(3,297	)
Allowance for loan and lease losses						(32,823	)			(31,245	)
Net loans and leases						4,017,908				3,839,353
Premises and equipment, net						50,411				52,236
Accrued interest receivable						13,192				12,557
Goodwill						136,433				135,747
Other identifiable intangible assets						2,631				3,344
Bank owned life insurance						89,339				72,384
Other assets						35,183				30,550
TOTAL ASSETS					$	5,362,187			$	5,093,131
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest-bearing					$	978,668			$	927,270
Savings and interest-bearing transaction accounts						2,682,291				2,620,657
Time deposits $250 thousand and under						408,228				404,680
Time deposits over $250 thousand						158,017				140,228
Total deposits						4,227,204				4,092,835
Federal funds purchased and securities sold under agreements to repurchase						118,487				56,354
Other borrowings						312,251				260,866
Subordinated debentures						104,842				104,784
Other liabilities						31,858				28,248
TOTAL LIABILITIES						4,794,642				4,543,087
STOCKHOLDERS' EQUITY
Common stock, no par value; authorized 70,000,000 shares;
issued 47,352,725 shares at June 30, 2017
and 47,222,914 shares at December 31, 2016						511,967				510,861
Retained earnings						54,969				38,590
Accumulated other comprehensive gain						609				593
TOTAL STOCKHOLDERS' EQUITY						567,545				550,044
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY					$	5,362,187			$	5,093,131

 

Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
			For the Quarter Ended
			June 30,			Mar 31,			Dec 31,			Sept 30,			June 30,
(Dollars in thousands, except per share data)				2017			2017			2016			2016			2016
INCOME STATEMENT
Net interest income			$	41,421		$	39,323		$	38,179		$	38,518		$	35,102
Provision for loan and lease losses				(1,827	)		(1,218	)		(375	)		(1,763	)		(1,010	)
Other noninterest income				5,655			5,157			4,636			5,664			4,460
Gains (losses) on sales of investment securities				(15	)		2,539			-			-			-
Gains on sales of loans				471			398			525			753			425
Long-term debt prepayment fee				-			(2,828	)		-			-			-
Merger related expenses				-			-			-			(1,697	)		(685	)
Other noninterest expense				(25,366	)		(25,642	)		(24,772	)		(24,309	)		(23,030	)
Pretax income				20,339			17,729			18,193			17,166			15,262
Provision for income taxes				(6,969	)		(5,417	)		(6,240	)		(5,839	)		(5,132	)
Net income			$	13,370		$	12,312		$	11,953		$	11,327		$	10,130
Basic earnings per common share			$	0.28		$	0.26		$	0.26		$	0.25		$	0.24
Diluted earnings per common share			$	0.28		$	0.26		$	0.26		$	0.25		$	0.24
Dividends per common share			$	0.10		$	0.095		$	0.095		$	0.095		$	0.095
Dividends paid			$	4,775		$	4,527		$	4,265		$	4,261		$	3,955
Weighted average shares - basic				47,465			47,354			45,002			44,439			41,238
Weighted average shares - diluted				47,674			47,623			45,257			44,659			41,406
SELECTED OPERATING RATIOS
Annualized return on average assets				1.02	%		0.97	%		0.95	%		0.94	%		0.93	%
Annualized return on average common equity				9.49	%		9.02	%		9.31	%		9.10	%		9.04	%
Annualized return on average tangible common equity (1)				12.58	%		12.04	%		12.83	%		12.68	%		12.63	%
Annualized net interest margin				3.41	%		3.33	%		3.27	%		3.45	%		3.47	%
Efficiency ratio (1)				52.64	%		56.36	%		56.35	%		53.35	%		56.29	%
Common stockholders' equity to total assets				10.58	%		10.63	%		10.80	%		10.17	%		10.18	%
Tangible common equity to tangible assets (1)				8.20	%		8.20	%		8.30	%		7.53	%		7.53	%
Tier 1 risk-based ratio				10.77	%		10.73	%		10.85	%		9.70	%		9.73	%
Total risk-based ratio				13.32	%		13.29	%		13.48	%		12.40	%		10.65	%
Tier 1 leverage ratio				8.99	%		8.97	%		9.07	%		8.26	%		8.24	%
Common equity tier 1 capital ratio				10.06	%		10.01	%		10.11	%		8.94	%		8.90	%
Book value per common share			$	11.99		$	11.78		$	11.65		$	11.22		$	11.03
Tangible book value per common share (1)			$	9.05		$	8.84		$	8.70		$	8.07		$	7.93
(1) See Supplemental Information - Non-GAAP Financial Measures

 

Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
				For the Quarter Ended
				June 30,			Mar 31,			Dec 31,			Sept 30,			June 30,
(Dollars in thousands)					2017			2017			2016			2016			2016
SELECTED BALANCE SHEET DATA AT PERIOD-END
Loans and leases				$	4,054,276		$	3,974,718		$	3,873,895		$	3,794,519		$	3,454,304
Allowance for loan and lease losses					(32,823	)		(31,590	)		(31,245	)		(31,369	)		(30,667	)
Investment securities					830,531			847,833			769,417			638,091			602,408
Total assets					5,362,187			5,247,815			5,093,131			4,904,291			4,467,860
Total deposits					4,227,204			4,293,393			4,092,835			3,941,742			3,537,331
Short-term borrowings					118,487			84,850			56,354			29,699			123,662
Other borrowings					417,093			278,238			365,650			398,671			326,009
Stockholders' equity					567,545			557,642			550,044			498,722			454,934
LOANS AND LEASES
Commercial, real estate				$	2,955,596		$	2,881,972		$	2,767,710		$	2,675,154		$	2,353,125
Commercial, industrial and other					352,977			342,264			350,228			339,291			313,062
Leases					70,295			67,488			67,016			65,659			63,338
Residential mortgages					337,765			344,890			349,581			370,766			383,823
Consumer and home equity					337,643			338,104			339,360			343,649			340,956
Total loans and leases				$	4,054,276		$	3,974,718		$	3,873,895		$	3,794,519		$	3,454,304
DEPOSITS
Noninterest-bearing				$	978,668		$	924,581		$	927,270		$	931,385		$	824,077
Savings and interest-bearing transaction accounts					2,682,291			2,809,705			2,620,657			2,471,097			2,235,918
Time deposits					566,245			559,107			544,908			539,260			477,336
Total deposits				$	4,227,204		$	4,293,393		$	4,092,835		$	3,941,742		$	3,537,331
SELECTED AVERAGE BALANCE SHEET DATA
Loans and leases				$	4,011,325		$	3,905,216		$	3,806,588		$	3,743,434		$	3,412,503
Investment securities					837,075			790,046			683,986			606,779			575,206
Interest-earning assets					4,907,488			4,825,855			4,680,156			4,467,524			4,094,575
Total assets					5,241,155			5,153,893			5,015,439			4,805,381			4,403,588
Noninterest-bearing demand deposits					954,966			921,770			951,418			895,851			801,488
Savings deposits					492,991			490,777			490,556			487,918			485,580
Interest-bearing transaction accounts					2,295,256			2,241,954			2,072,154			1,988,405			1,775,129
Time deposits					559,665			555,270			539,870			533,224			487,169
Total deposits					4,302,878			4,209,771			4,053,998			3,905,398			3,549,366
Short-term borrowings					52,951			28,358			27,538			35,608			31,591
Other borrowings					291,882			332,750			392,789			339,204			346,347
Total interest-bearing liabilities					3,692,745			3,649,109			3,522,907			3,384,359			3,125,815
Stockholders' equity					565,211			553,782			510,562			495,343			450,806

 

Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
				For the Quarter Ended
				June 30,			Mar 31,			Dec 31,			Sept 30,			June 30,
(Dollars in thousands)					2017			2017			2016			2016			2016
AVERAGE ANNUALIZED YIELDS (TAXABLE EQUIVALENT BASIS)
ASSETS
Loans and leases					4.27	%		4.20	%		4.19	%		4.23	%		4.22	%
Taxable investment securities and other					2.11	%		2.13	%		2.00	%		2.06	%		2.18	%
Tax-exempt securities					2.86	%		2.78	%		2.75	%		3.01	%		3.15	%
Federal funds sold and interest-bearing cash accounts					0.89	%		0.85	%		0.48	%		0.48	%		0.46	%
Total interest-earning assets					3.88	%		3.78	%		3.74	%		3.85	%		3.85	%
LIABILITIES
Savings accounts					0.06	%		0.06	%		0.06	%		0.06	%		0.05	%
Interest-bearing transaction accounts					0.44	%		0.38	%		0.35	%		0.34	%		0.31	%
Time deposits					0.86	%		0.83	%		0.84	%		0.81	%		0.79	%
Borrowings					2.30	%		2.37	%		2.37	%		1.71	%		1.62	%
Total interest-bearing liabilities					0.63	%		0.60	%		0.62	%		0.53	%		0.50	%
Net interest spread (taxable equivalent basis)					3.25	%		3.18	%		3.12	%		3.32	%		3.35	%
Annualized net interest margin (taxable equivalent basis)					3.41	%		3.33	%		3.27	%		3.45	%		3.47	%
Annualized cost of deposits					0.35	%		0.32	%		0.30	%		0.29	%		0.27	%
ASSET QUALITY DATA
ALLOWANCE FOR LOAN AND LEASE LOSSES
Balance at beginning of period				$	31,590		$	31,245		$	31,369		$	30,667		$	30,553
Provision for loan and lease losses					1,827			1,218			375			1,763			1,010
Charge-offs					(870	)		(1,360	)		(795	)		(1,273	)		(1,045	)
Recoveries					276			487			296			212			149
Balance at end of period				$	32,823		$	31,590		$	31,245		$	31,369		$	30,667
NET LOAN AND LEASE CHARGE-OFFS (RECOVERIES)
Commercial, real estate				$	(67	)	$	595		$	(87	)	$	(11	)	$	113
Commercial, industrial and other					44			68			(96	)		(30	)		137
Leases					92			39			42			40			183
Residential mortgages					169			141			231			385			213
Consumer and home equity					356			30			409			677			250
Net charge-offs (recoveries)				$	594		$	873		$	499		$	1,061		$	896
NON-PERFORMING ASSETS
Commercial, real estate				$	10,240		$	10,443		$	11,885		$	13,068		$	12,554
Commercial, industrial and other					378			136			167			39			41
Leases					81			179			153			78			159
Residential mortgages					3,857			4,715			6,048			7,264			8,865
Consumer and home equity			1,689			2,270			2,151			2,210			3,325
Total non-accrual loans and leases					16,245			17,743			20,404			22,659			24,944
Property acquired through foreclosure or repossession					1,415			710			1,072			1,918			1,594
Total non-performing assets				$	17,660		$	18,453		$	21,476		$	24,577		$	26,538
Loans past due 90 days or more and still accruing				$	20		$	-		$	10		$	10		$	42
Loans restructured and still accruing				$	11,697		$	11,553		$	8,802		$	9,251		$	9,509
Ratio of allowance for loan and lease losses to total loans and leases					0.81	%		0.79	%		0.81	%		0.83	%		0.89	%
Total non-accrual loans and leases to total loans and leases					0.40	%		0.45	%		0.53	%		0.60	%		0.72	%
Total non-performing assets to total assets					0.33	%		0.35	%		0.42	%		0.50	%		0.59	%
Annualized net charge-offs (recoveries) to average loans and leases					0.06	%		0.09	%		0.05	%		0.11	%		0.11	%

 

Lakeland Bancorp, Inc.
Supplemental Information - Non-GAAP Financial Measures
(Unaudited)
				At or for the Quarter Ended
				June 30,			Mar 31,			Dec 31,			Sept 30,			June 30,
(Dollars in thousands, except per share amounts)					2017			2017			2016			2016			2016
CALCULATION OF TANGIBLE BOOK VALUE PER COMMON SHARE
Total common stockholders' equity at end of period - GAAP				$	567,545		$	557,642		$	550,044		$	498,722		$	454,934
Less:  Goodwill					136,433			135,747			135,747			136,392			125,285
Less:  Other identifiable intangible assets					2,631			3,149			3,344			3,545			2,728
Total tangible common stockholders' equity at end of period - Non-GAAP				$	428,481		$	418,746		$	410,953		$	358,785		$	326,921
Shares outstanding at end of period					47,353			47,350			47,223			44,443			41,241
Book value per share - GAAP				$	11.99		$	11.78		$	11.65		$	11.22		$	11.03
Tangible book value per share - Non-GAAP				$	9.05		$	8.84		$	8.70		$	8.07		$	7.93
CALCULATION OF TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS
Total tangible common stockholders' equity at end of period - Non-GAAP				$	428,481		$	418,746		$	410,953		$	358,785		$	326,921
Total assets at end of period - GAAP				$	5,362,187		$	5,247,815		$	5,093,131		$	4,904,291		$	4,467,860
Less:  Goodwill					136,433			135,747			135,747			136,392			125,285
Less:  Other identifiable intangible assets					2,631			3,149			3,344			3,545			2,728
Total tangible assets at end of period - Non-GAAP				$	5,223,123		$	5,108,919		$	4,954,040		$	4,764,354		$	4,339,847
Common equity to assets - GAAP					10.58	%		10.63	%		10.80	%		10.17	%		10.18	%
Tangible common equity to tangible assets - Non-GAAP					8.20	%		8.20	%		8.30	%		7.53	%		7.53	%
CALCULATION OF RETURN ON AVERAGE TANGIBLE COMMON EQUITY
Net income - GAAP				$	13,370		$	12,312		$	11,953		$	11,327		$	10,130
Total average common stockholders' equity - GAAP				$	565,211		$	553,782		$	510,562		$	495,343		$	450,806
Less:  Average goodwill					135,755			135,747			136,385			136,392			125,424
Less:  Average other identifiable intangible assets					3,069			3,276			3,459			3,685			2,828
Total average tangible common stockholders' equity - Non-GAAP				$	426,387		$	414,759		$	370,718		$	355,266		$	322,554
Return on average common stockholders' equity - GAAP					9.49	%		9.02	%		9.31	%		9.10	%		9.04	%
Return on average tangible common stockholders' equity - Non-GAAP					12.58	%		12.04	%		12.83	%		12.68	%		12.63	%
CALCULATION OF EFFICIENCY RATIO
Total noninterest expense				$	25,366		$	28,470		$	24,772		$	26,006		$	23,715
Amortization of core deposit intangibles					(190	)		(195	)		(202	)		(201	)		(164	)
Long-term debt prepayment fee					-			(2,828	)		-			-			-
Merger related expenses					-			-			-			(1,697	)		(685	)
Provision for unfunded lending commitments					-			-			-			-			(230	)
Noninterest expense, as adjusted				$	25,176		$	25,447		$	24,570		$	24,108		$	22,636
Net interest income				$	41,421		$	39,323		$	38,179		$	38,518		$	35,102
Total noninterest income					6,111			8,094			5,161			6,417			4,885
Total revenue					47,532			47,417			43,340			44,935			39,987
Tax-equivalent adjustment on municipal securities					281			275			262			253			225
(Gains) losses on sales of investment securities					15			(2,539	)		-			-			-
Total revenue, as adjusted				$	47,828		$	45,153		$	43,602		$	45,188		$	40,212
Efficiency ratio - Non-GAAP					52.64	%		56.36	%		56.35	%		53.35	%		56.29	%
				For the Quarter Ended						For the Six Months Ended
				June 30,			June 30,			June 30,			June 30,
(Dollars in thousands, except per share amounts)					2017			2016			2017			2016
RECONCILIATION OF EARNINGS PER SHARE
Net income - GAAP				$	13,370		$	10,130		$	25,682		$	18,238
NON-ROUTINE TRANSACTIONS, NET OF TAX
Tax deductible merger related expenses					-			175			-			986
Non-tax deductible merger related expenses					-			389			-			739
Net effect of non-routine transactions					-			564			-			1,725
Net income available to common shareholders excluding non-routine transactions					13,370			10,694			25,682			19,963
Less:  Earnings allocated to participating securities					(120	)		(106	)		(241	)		(161	)
				$	13,250		$	10,588		$	25,441		$	19,802
Weighted average shares - Basic					47,465			41,238			47,410			41,084
Weighted average shares - Diluted					47,674			41,406			47,646			41,245
Basic earnings per share - GAAP				$	0.28		$	0.24		$	0.54		$	0.44
Diluted earnings per share - GAAP				$	0.28		$	0.24		$	0.53		$	0.44
Basic earnings per share, adjusted for non-routine transactions				$	0.28		$	0.26		$	0.54		$	0.48
Diluted earnings per share, adjusted for non-routine transactions (Core EPS)				$	0.28		$	0.26		$	0.53		$	0.48

 

Lakeland Bancorp, Inc.
Supplemental Information - Non-GAAP Financial Measures
(Unaudited)
				For the Six Months Ended,
				June 30,			June 30,
(Dollars in thousands)					2017			2016
CALCULATION OF RETURN ON AVERAGE TANGIBLE COMMON EQUITY
Net income - GAAP				$	25,682		$	18,238
Total average common stockholders' equity - GAAP				$	559,528		$	445,815
Less:  Average goodwill					135,751			124,923
Less:  Average other identifiable intangible assets					3,172			2,874
Total average tangible common stockholders' equity - Non-GAAP				$	420,605		$	318,018
Return on average common stockholders' equity - GAAP					9.26	%		8.23	%
Return on average tangible common stockholders' equity - Non-GAAP					12.31	%		11.53	%
CALCULATION OF EFFICIENCY RATIO
Total noninterest expense				$	53,836		$	49,139
Amortization of core deposit intangibles					(385	)		(331	)
Long-term debt prepayment fee					(2,828	)		-
Merger related expenses					-			(2,406	)
Provision for unfunded lending commitments					-			(438	)
Noninterest expense, as adjusted				$	50,623		$	45,964
Net interest income				$	80,744		$	68,952
Noninterest income					14,205			9,752
Total revenue					94,949			78,704
Tax-equivalent adjustment on municipal securities					556			447
Gains on sales of investment securities					(2,524	)		(370	)
Total revenue, as adjusted				$	92,981		$	78,781
Efficiency ratio - Non-GAAP					54.44	%		58.34	%

 

 

Thomas J. Shara
President & CEO

Thomas F. Splaine
EVP & CFO
973-697-2000