LBAI Lakeland Bancorp Inc

Lakeland Bancorp, Inc. (NASDAQ:LBAI) (the “Company”), the parent company of Lakeland Bank (“Lakeland”), reported net income of $13.7 million for the three months ended September 30, 2017 compared to $11.3 million for the same period in 2016.  For the three months ended September 30, 2017, diluted earnings per share (“EPS”) of $0.29 increased 16% from $0.25 for the same period in 2016.  For the third quarter of 2017, return on average assets was 1.03%, return on average common equity was 9.48%, and return on average tangible common equity was 12.51%. 

For the nine months ended September 30, 2017, the Company reported net income of $39.4 million, compared to $29.6 million for the same period in 2016.  Over the same period, the Company reported diluted EPS of $0.82 in 2017 compared to $0.69 in 2016.  Year-to-date 2017, return on average assets was 1.01%, return on average common equity was 9.33%, and return on average tangible common equity was 12.38%. 

Thomas Shara, Lakeland Bancorp’s President and CEO, commented on the Company’s quarterly results, “We are pleased with our continued strong quarterly financial metrics as demonstrated by our enhancements in net income, earnings per share, return on assets, return on equity, efficiency ratio and asset quality.  We continue to grow our Bank by generating new customers with our relationship banking philosophy and providing best in class customer service.”  

The following represents performance highlights and significant events as of or for the third quarter of 2017:

• Net income of $13.7 million increased from $13.4 million in the second quarter of 2017 and $11.3 million in the third quarter of 2016.

• Return on average assets of 1.03% grew from 1.02% in the second quarter of 2017 and 0.94% in the third quarter of 2016.

• The efficiency ratio of 51.72% improved from 52.64% in the second quarter of 2017 and 53.35% in the third quarter of 2016.

• Tangible book value per share rose to $9.25 at September 30, 2017, a 14.6% increase from $8.07 at September 30, 2016.

• Net interest margin of 3.39% fell slightly from 3.41% in the second quarter of 2017 and 3.45% in the third quarter of 2016.

• Total deposits grew $129.8 million, or 3.1%, during the third quarter of 2017 and $415.3 million, or 10.5%, since September 30, 2016. 

• Total loans and leases grew $38.6 million, or 1.0%, during the third quarter of 2017 and $298.4 million, or 7.9%, since September 30, 2016.

• On October 24, 2017, the Company declared a cash dividend of $0.10 per share to be paid on November 15, 2017 to stockholders of record as of November 6, 2017.

EarningsNet income for the third quarter of 2017 was $13.7 million, a 21% increase compared to $11.3 million for the same period in 2016.  Excluding merger related expenses incurred in the third quarter of 2016, this increase was 11%.

Year-to-date net income for 2017 was $39.4 million, a 33% increase compared to $29.6 million for the same period in 2016.  After excluding merger related expenses incurred in 2016, this increase was 22%.

Net Interest Income Net interest income for the third quarter of 2017 was $42.1 million, compared to $38.5 million for the same period in 2016 due to the organic growth of earning assets.  Year-to-date net interest income for 2017 was $122.9 million, as compared to $107.5 million for the same period in 2016.  For 2017, year-to-date total interest income increased due to higher interest earning assets from organic growth and the merger with Harmony Bank in July 2016 (the “merger”).  For 2017, year-to-date total interest expense increased primarily due to increased deposits related to the merger, continued organic deposit growth coupled with higher CD rates in the third quarter of 2017 due to market competition and the impact of the additional interest expense from the subordinated debt offering in September 2016.

Noninterest Income Noninterest income totaled $5.5 million for the third quarter of 2017 compared to $6.4 million for the same period in 2016.  This decrease was primarily due to $0.9 million in death benefits received on bank owned life insurance in 2016.

Year-to-date 2017 noninterest income totaled $19.7 million compared to $16.2 million for the same period in 2016.  This increase was primarily due to $2.2 million in gains on sales of investment securities in the first quarter of 2017, $0.9 million in gains on sales of three former branches during 2017, $0.3 million gain on the payoff of an acquired loan in 2017 and a $0.2 million increase on the sales of other real estate owned in 2017, partially offset by $0.9 million in death benefits received on bank owned life insurance in 2016 and a $0.3 million decline in gains on sales of loans during 2017.

Noninterest Expense Noninterest expense totaled $24.8 million for the third quarter of 2017 compared to $26.0 million for the same period in 2016.  Excluding $1.7 million in merger related expenses incurred in 2016, noninterest expense would have increased $0.5 million due to additional salary and employee benefit expense, partially offset by a $0.3 million reduction in the cost of FDIC insurance.

Year-to-date 2017 noninterest expense totaled $78.7 million compared to $75.1 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 $4.1 million in merger related expenses.  Excluding these one-time items, the resulting $4.8 million net increase in noninterest expense was primarily due to $3.8 million in increased salary and employee benefit expense related to additional headcount from the merger as well as supplementing the operating infrastructure of the Company.  In addition, other expenses increased by $0.7 million primarily due to higher legal, correspondent, audit and consulting fees.

Financial ConditionFor the nine months ended September 30, 2017, total assets increased $306.4 million, or 6%, to $5.40 billion as total loans and leases grew $219.0 million, or 6%, to $4.09 billion, investment in bank owned life insurance grew $34.4 million, or 48%, to $106.8 million and investment securities increased $25.7 million, or 3%, to $795.1 million.  On the funding side, total deposits grew $264.2 million, or 6%, to $4.36 billion while borrowings increased $13.4 million, or 3%, to $435.4 million.  As of September 30, 2017, total loans and leases to total deposits was 93.9%. 

Asset QualityAt September 30, 2017, non-performing assets totaled $14.7 million (0.27% of total assets) compared to $21.5 million (0.42% of total assets) at December 31, 2016.  Non-accrual loans and leases as a percent of total loans and leases decreased to 0.33% at September 30, 2017 from 0.53% at December 31, 2016.  The allowance for loan and lease losses increased to $33.9 million at September 30, 2017, and represented 0.83% of total loans and leases.  For the nine months ended September 30, 2017, the Company had net charge-offs of $2.2 million (annualized 0.07% of average loans and leases) compared to $3.4 million (annualized 0.13% of average loans and leases) for the same period in 2016.  The year-to-date provision for loan and lease losses was $4.9 million compared to $3.8 million for the same period in 2016.

CapitalAt September 30, 2017, stockholders' equity was $577.1 million compared to $550.0 million at December 31, 2016.   At September 30, 2017, the book value per common share and tangible book value per common share were $12.19 and $9.25 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, 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.  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 relevant measure to compare the operating performance period to period.

These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies.  See accompanying non-GAAP tables. 

About Lakeland 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.

Thomas J. SharaPresident & CEO

Thomas F. SplaineEVP & CFO973-697-2000

Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
				Three Months Ended September 30,								Nine Months Ended September 30,
(Dollars in thousands, except per share amounts)					2017				2016				2017				2016
INCOME STATEMENT
Net interest income				$	42,115			$	38,518			$	122,859			$	107,470
Provision for loan and lease losses					(1,827	)			(1,763	)			(4,872	)			(3,848	)
Other noninterest income					4,976				5,664				15,788				14,201
Gains (losses) on sales of investment securities					-				-				2,524				370
Gains on sales of loans					478				753				1,347				1,598
Long-term debt prepayment fee					-				-				(2,828	)			-
Merger related expenses					-				(1,697	)			-				(4,103	)
Other noninterest expense					(24,849	)			(24,309	)			(75,857	)			(71,042	)
Pretax income					20,893				17,166				58,961				44,646
Provision for income taxes					(7,170	)			(5,839	)			(19,556	)			(15,081	)
Net income				$	13,723			$	11,327			$	39,405			$	29,565
Basic earnings per common share				$	0.29			$	0.25			$	0.82			$	0.69
Diluted earnings per common share				$	0.29			$	0.25			$	0.82			$	0.69
Dividends per common share				$	0.10			$	0.095			$	0.295			$	0.275
Weighted average shares - basic					47,466				44,439				47,429				42,211
Weighted average shares - diluted					47,692				44,659				47,660				42,390
SELECTED OPERATING RATIOS
Annualized return on average assets					1.03	%			0.94	%			1.01	%			0.88	%
Annualized return on average common equity					9.48	%			9.10	%			9.33	%			8.54	%
Annualized return on average tangible common equity (1)					12.51	%			12.68	%			12.38	%			11.95	%
Annualized return on interest-earning assets					3.93	%			3.85	%			3.86	%			3.86	%
Annualized cost of interest-bearing liabilities					0.71	%			0.53	%			0.65	%			0.51	%
Annualized net interest spread					3.22	%			3.32	%			3.22	%			3.35	%
Annualized net interest margin					3.39	%			3.45	%			3.38	%			3.47	%
Efficiency ratio (1)					51.72	%			53.35	%			53.52	%			56.52	%
Stockholders' equity to total assets													10.69	%			10.17	%
Book value per common share												$	12.19			$	11.22
Tangible book value per common share (1)												$	9.25			$	8.07
Tangible common equity to tangible assets (1)													8.33	%			7.53	%
ASSET QUALITY RATIOS												9/30/2017				9/30/2016
Ratio of allowance for loan and lease losses to total loans and leases													0.83	%			0.83	%
Non-performing loans and leases to total loans and leases													0.33	%			0.60	%
Non-performing assets to total assets													0.27	%			0.50	%
Annualized net charge-offs to average loans and leases													0.07	%			0.13	%
SELECTED BALANCE SHEET DATA AT PERIOD-END												9/30/2017				9/30/2016
Loans and leases												$	4,092,893			$	3,794,519
Allowance for loan and lease losses													(33,925	)			(31,369	)
Investment securities													795,096				638,091
Total assets													5,399,481				4,904,291
Total deposits													4,356,996				3,941,742
Short-term borrowings													133,960				29,699
Other borrowings													301,411				398,671
Stockholders' equity													577,081				498,722
SELECTED AVERAGE BALANCE SHEET DATA				For the Three Months Ended								For the Nine Months Ended
				9/30/2017				9/30/2016				9/30/2017				9/30/2016
Loans and leases				$	4,060,838			$	3,743,434			$	3,993,030			$	3,481,053
Investment securities					815,773				606,779				814,392				584,271
Interest-earning assets					4,957,856				4,467,524				4,897,550				4,166,190
Total assets					5,300,191				4,805,381				5,232,283				4,486,979
Noninterest-bearing demand deposits					971,143				895,851				949,474				819,459
Savings deposits					484,982				487,918				489,562				483,140
Interest-bearing transaction accounts					2,206,206				1,988,405				2,247,674				1,816,003
Time deposits					645,333				533,224				587,086				495,278
Total deposits					4,307,664				3,905,398				4,273,796				3,613,880
Short-term borrowings					42,172				35,608				41,211				39,165
Other borrowings					344,775				339,204				323,180				344,859
Total interest-bearing liabilities					3,723,468				3,384,359				3,688,713				3,178,445
Stockholders' equity					574,113				495,343				564,443				462,445
(1) See Supplemental Information - Non-GAAP Financial Measures

 

Lakeland Bancorp, Inc.
Consolidated Statements of Operations
(Unaudited)
				Three Months Ended September 30,						Nine Months Ended September 30,
(Dollars in thousands, except per share amounts)					2017		2016				2017		2016
INTEREST INCOME
Loans, leases and fees				$	44,302	$	39,766			$	127,453	$	109,687
Federal funds sold and interest-bearing deposits with banks					210		142				618		341
Taxable investment securities and other					3,720		2,627				11,137		8,285
Tax exempt investment securities					503		470				1,535		1,300
	TOTAL INTEREST INCOME				48,735		43,005				140,743		119,613
INTEREST EXPENSE
Deposits					4,443		2,886				11,561		7,495
Federal funds purchased and securities sold under agreements to repurchase					52		19				160		66
Other borrowings					2,125		1,582				6,163		4,582
	TOTAL INTEREST EXPENSE				6,620		4,487				17,884		12,143
NET INTEREST INCOME					42,115		38,518				122,859		107,470
Provision for loan and lease losses					1,827		1,763				4,872		3,848
	NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES				40,288		36,755				117,987		103,622
NONINTEREST INCOME
Service charges on deposit accounts					2,797		2,615				7,926		7,580
Commissions and fees					1,258		1,182				3,549		3,260
Gains on sales of investment securities					-		-				2,524		370
Gains on sales of loans					478		753				1,347		1,598
Income on bank owned life insurance					624		1,303				1,550		2,125
Other income					297		564				2,763		1,236
	TOTAL NONINTEREST INCOME				5,454		6,417				19,659		16,169
NONINTEREST EXPENSE
Salaries and employee benefit expense					15,100		14,626				45,613		41,802
Net occupancy expense					2,327		2,372				7,670		7,401
Furniture and equipment expense					2,073		1,876				6,166		5,904
Stationary, supplies and postage expense					404		412				1,419		1,271
Marketing expense					442		429				1,351		1,123
FDIC insurance expense					430		715				1,173		1,986
ATM and debit card expense					546		420				1,504		1,149
Telecommunications expense					380		479				1,156		1,289
Data processing expense					441		518				1,496		1,497
Other real estate owned and other repossessed assets expense					67		(32	)			108		33
Long-term debt prepayment fee					-		-				2,828		-
Merger related expenses					-		1,697				-		4,103
Core deposit intangible amortization					104		201				489		532
Other expenses					2,535		2,293				7,712		7,055
	TOTAL NONINTEREST EXPENSE				24,849		26,006				78,685		75,145
INCOME BEFORE PROVISION FOR INCOME TAXES					20,893		17,166				58,961		44,646
Provision for income taxes					7,170		5,839				19,556		15,081
NET INCOME				$	13,723	$	11,327			$	39,405	$	29,565
EARNINGS PER COMMON SHARE
Basic				$	0.29	$	0.25			$	0.82	$	0.69
Diluted				$	0.29	$	0.25			$	0.82	$	0.69
DIVIDENDS PER COMMON SHARE				$	0.100	$	0.095			$	0.295	$	0.275

 

Lakeland Bancorp, Inc.
Consolidated Balance Sheets
					September 30,				December 31,
(Dollars in thousands)						2017				2016
					(Unaudited)
ASSETS
Cash					$	178,905			$	169,149
Interest-bearing deposits due from banks						24,012				6,652
Total cash and cash equivalents						202,917				175,801
Investment securities available for sale, at fair value						647,292				606,704
Investment securities held to maturity; fair value of $135,085 at September 30, 2017
and $146,990 at December 31, 2016						135,021				147,614
Federal Home Loan Bank and other membership stocks, at cost						12,783				15,099
Loans held for sale						2,221				1,742
Loans and leases:
Commercial, real estate						3,018,106				2,767,710
Commercial, industrial and other						342,775				350,228
Leases						71,698				67,016
Residential mortgages						329,625				349,581
Consumer and home equity						330,689				339,360
Total loans and leases						4,092,893				3,873,895
Net deferred costs (fees)						(3,720	)			(3,297	)
Allowance for loan and lease losses						(33,925	)			(31,245	)
Net loans and leases						4,055,248				3,839,353
Premises and equipment, net						49,699				52,236
Accrued interest receivable						13,592				12,557
Goodwill						136,433				135,747
Other identifiable intangible assets						2,526				3,344
Bank owned life insurance						106,831				72,384
Other assets						34,918				30,550
TOTAL ASSETS					$	5,399,481			$	5,093,131
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest-bearing					$	955,444			$	927,270
Savings and interest-bearing transaction accounts						2,681,512				2,620,657
Time deposits $250 thousand and under						549,893				404,680
Time deposits over $250 thousand						170,147				140,228
Total deposits						4,356,996				4,092,835
Federal funds purchased and securities sold under agreements to repurchase						133,960				56,354
Other borrowings						196,539				260,866
Subordinated debentures						104,872				104,784
Other liabilities						30,033				28,248
TOTAL LIABILITIES						4,822,400				4,543,087
STOCKHOLDERS' EQUITY
Common stock, no par value; authorized 70,000,000 shares;
issued 47,352,714 shares at September 30, 2017
and 47,222,914 shares at December 31, 2016						512,383				510,861
Retained earnings						63,917				38,590
Accumulated other comprehensive gain						781				593
TOTAL STOCKHOLDERS' EQUITY						577,081				550,044
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY					$	5,399,481			$	5,093,131

 

Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
			For the Quarter Ended
			Sept 30,			June 30,			Mar 31,			Dec 31,			Sept 30,
(Dollars in thousands, except per share data)				2017			2017			2017			2016			2016
INCOME STATEMENT
Net interest income			$	42,115		$	41,421		$	39,323		$	38,179		$	38,518
Provision for loan and lease losses				(1,827	)		(1,827	)		(1,218	)		(375	)		(1,763	)
Other noninterest income				4,976			5,655			5,157			4,636			5,664
Gains (losses) on sales of investment securities				-			(15	)		2,539			-			-
Gains on sales of loans				478			471			398			525			753
Long-term debt prepayment fee				-			-			(2,828	)		-			-
Merger related expenses				-			-			-			-			(1,697	)
Other noninterest expense				(24,849	)		(25,366	)		(25,642	)		(24,772	)		(24,309	)
Pretax income				20,893			20,339			17,729			18,193			17,166
Provision for income taxes				(7,170	)		(6,969	)		(5,417	)		(6,240	)		(5,839	)
Net income			$	13,723		$	13,370		$	12,312		$	11,953		$	11,327
Basic earnings per common share			$	0.29		$	0.28		$	0.26		$	0.26		$	0.25
Diluted earnings per common share			$	0.29		$	0.28		$	0.26		$	0.26		$	0.25
Dividends per common share			$	0.10		$	0.100		$	0.095		$	0.095		$	0.095
Dividends paid			$	4,775		$	4,775		$	4,527		$	4,265		$	4,261
Weighted average shares - basic				47,466			47,465			47,354			45,002			44,439
Weighted average shares - diluted				47,692			47,674			47,623			45,257			44,659
SELECTED OPERATING RATIOS
Annualized return on average assets				1.03	%		1.02	%		0.97	%		0.95	%		0.94	%
Annualized return on average common equity				9.48	%		9.49	%		9.02	%		9.31	%		9.10	%
Annualized return on average tangible common equity (1)				12.51	%		12.58	%		12.04	%		12.83	%		12.68	%
Annualized net interest margin				3.39	%		3.41	%		3.33	%		3.27	%		3.45	%
Efficiency ratio (1)				51.72	%		52.64	%		56.36	%		56.35	%		53.35	%
Common stockholders' equity to total assets				10.69	%		10.58	%		10.63	%		10.80	%		10.17	%
Tangible common equity to tangible assets (1)				8.33	%		8.20	%		8.20	%		8.30	%		7.53	%
Tier 1 risk-based ratio				10.82	%		10.77	%		10.73	%		10.85	%		9.70	%
Total risk-based ratio				13.37	%		13.32	%		13.29	%		13.48	%		12.40	%
Tier 1 leverage ratio				9.07	%		8.99	%		8.97	%		9.07	%		8.26	%
Common equity tier 1 capital ratio				10.13	%		10.06	%		10.01	%		10.11	%		8.94	%
Book value per common share			$	12.19		$	11.99		$	11.78		$	11.65		$	11.22
Tangible book value per common share (1)			$	9.25		$	9.05		$	8.84		$	8.70		$	8.07
(1) See Supplemental Information - Non-GAAP Financial Measures

 

Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
				For the Quarter Ended
				Sept 30,			June 30,			Mar 31,			Dec 31,			Sept 30,
(Dollars in thousands)					2017			2017			2017			2016			2016
SELECTED BALANCE SHEET DATA AT PERIOD-END
Loans and leases				$	4,092,893		$	4,054,276		$	3,974,718		$	3,873,895		$	3,794,519
Allowance for loan and lease losses					(33,925	)		(32,823	)		(31,590	)		(31,245	)		(31,369	)
Investment securities					795,096			830,531			847,833			769,417			638,091
Total assets					5,399,481			5,362,187			5,247,815			5,093,131			4,904,291
Total deposits					4,356,996			4,227,204			4,293,393			4,092,835			3,941,742
Short-term borrowings					133,960			118,487			84,850			56,354			29,699
Other borrowings					301,411			417,093			278,238			365,650			398,671
Stockholders' equity					577,081			567,545			557,642			550,044			498,722
LOANS AND LEASES
Commercial, real estate				$	3,018,106		$	2,955,596		$	2,881,972		$	2,767,710		$	2,675,154
Commercial, industrial and other					342,775			352,977			342,264			350,228			339,291
Leases					71,698			70,295			67,488			67,016			65,659
Residential mortgages					329,625			337,765			344,890			349,581			370,766
Consumer and home equity					330,689			337,643			338,104			339,360			343,649
Total loans and leases				$	4,092,893		$	4,054,276		$	3,974,718		$	3,873,895		$	3,794,519
DEPOSITS
Noninterest-bearing				$	955,444		$	978,668		$	924,581		$	927,270		$	931,385
Savings and interest-bearing transaction accounts					2,681,512			2,682,291			2,809,705			2,620,657			2,471,097
Time deposits					720,040			566,245			559,107			544,908			539,260
Total deposits				$	4,356,996		$	4,227,204		$	4,293,393		$	4,092,835		$	3,941,742
Total loans and leases to total deposits					93.9	%		95.9	%		92.6	%		94.7	%		96.3	%
SELECTED AVERAGE BALANCE SHEET DATA
Loans and leases				$	4,060,838		$	4,011,325		$	3,905,216		$	3,806,588		$	3,743,434
Investment securities					815,773			837,075			790,046			683,986			606,779
Interest-earning assets					4,957,856			4,907,488			4,825,855			4,680,156			4,467,524
Total assets					5,300,191			5,241,155			5,153,893			5,015,439			4,805,381
Noninterest-bearing demand deposits					971,143			954,966			921,770			951,418			895,851
Savings deposits					484,982			492,991			490,777			490,556			487,918
Interest-bearing transaction accounts					2,206,206			2,295,256			2,241,954			2,072,154			1,988,405
Time deposits					645,333			559,665			555,270			539,870			533,224
Total deposits					4,307,664			4,302,878			4,209,771			4,053,998			3,905,398
Short-term borrowings					42,172			52,951			28,358			27,538			35,608
Other borrowings					344,775			291,882			332,750			392,789			339,204
Total interest-bearing liabilities					3,723,468			3,692,745			3,649,109			3,522,907			3,384,359
Stockholders' equity					574,113			565,211			553,782			510,562			495,343

 

Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
				For the Quarter Ended
				Sept 30,			June 30,			Mar 31,			Dec 31,			Sept 30,
(Dollars in thousands)					2017			2017			2017			2016			2016
AVERAGE ANNUALIZED YIELDS (TAXABLE EQUIVALENT BASIS)
ASSETS
Loans and leases					4.33	%		4.27	%		4.20	%		4.19	%		4.23	%
Taxable investment securities and other					2.09	%		2.11	%		2.13	%		2.00	%		2.06	%
Tax-exempt securities					2.98	%		2.86	%		2.78	%		2.75	%		3.01	%
Federal funds sold and interest-bearing cash accounts					1.03	%		0.89	%		0.85	%		0.48	%		0.48	%
Total interest-earning assets					3.93	%		3.88	%		3.78	%		3.74	%		3.85	%
LIABILITIES
Savings accounts					0.06	%		0.06	%		0.06	%		0.06	%		0.06	%
Interest-bearing transaction accounts					0.49	%		0.44	%		0.38	%		0.35	%		0.34	%
Time deposits					1.03	%		0.86	%		0.83	%		0.84	%		0.81	%
Borrowings					2.20	%		2.30	%		2.37	%		2.37	%		1.71	%
Total interest-bearing liabilities					0.71	%		0.63	%		0.60	%		0.62	%		0.53	%
Net interest spread (taxable equivalent basis)					3.22	%		3.25	%		3.18	%		3.12	%		3.32	%
Annualized net interest margin (taxable equivalent basis)					3.39	%		3.41	%		3.33	%		3.27	%		3.45	%
Annualized cost of deposits					0.41	%		0.35	%		0.32	%		0.30	%		0.29	%
ASSET QUALITY DATA
ALLOWANCE FOR LOAN AND LEASE LOSSES
Balance at beginning of period				$	32,823		$	31,590		$	31,245		$	31,369		$	30,667
Provision for loan and lease losses					1,827			1,827			1,218			375			1,763
Charge-offs					(869	)		(870	)		(1,360	)		(795	)		(1,273	)
Recoveries					144			276			487			296			212
Balance at end of period				$	33,925		$	32,823		$	31,590		$	31,245		$	31,369
NET LOAN AND LEASE CHARGE-OFFS (RECOVERIES)
Commercial, real estate				$	285		$	(67	)	$	595		$	(87	)	$	(11	)
Commercial, industrial and other					168			44			68			(96	)		(30	)
Leases					80			92			39			42			40
Residential mortgages					95			169			141			231			385
Consumer and home equity					97			356			30			409			677
Net charge-offs (recoveries)				$	725		$	594		$	873		$	499		$	1,061
NON-PERFORMING ASSETS
Commercial, real estate				$	6,820		$	10,240		$	10,443		$	11,885		$	13,068
Commercial, industrial and other					172			378			136			167			39
Leases					110			81			179			153			78
Residential mortgages					4,410			3,857			4,715			6,048			7,264
Consumer and home equity					2,033			1,689			2,270			2,151			2,210
Total non-accrual loans and leases					13,545			16,245			17,743			20,404			22,659
Property acquired through foreclosure or repossession					1,168			1,415			710			1,072			1,918
Total non-performing assets				$	14,713		$	17,660		$	18,453		$	21,476		$	24,577
Loans past due 90 days or more and still accruing				$	9		$	20		$	-		$	10		$	10
Loans restructured and still accruing				$	11,279		$	11,697		$	11,553		$	8,802		$	9,251
Ratio of allowance for loan and lease losses to total loans and leases					0.83	%		0.81	%		0.79	%		0.81	%		0.83	%
Total non-accrual loans and leases to total loans and leases					0.33	%		0.40	%		0.45	%		0.53	%		0.60	%
Total non-performing assets to total assets					0.27	%		0.33	%		0.35	%		0.42	%		0.50	%
Annualized net charge-offs (recoveries) to average loans and leases					0.07	%		0.06	%		0.09	%		0.05	%		0.11	%

 

Lakeland Bancorp, Inc.
Supplemental Information - Non-GAAP Financial Measures
(Unaudited)
				At or for the Quarter Ended
				Sept 30,			June 30,			Mar 31,			Dec 31,			Sept 30,
(Dollars in thousands, except per share amounts)					2017			2017			2017			2016			2016
CALCULATION OF TANGIBLE BOOK VALUE PER COMMON SHARE
Total common stockholders' equity at end of period - GAAP				$	577,081		$	567,545		$	557,642		$	550,044		$	498,722
Less:  Goodwill					136,433			136,433			135,747			135,747			136,392
Less:  Other identifiable intangible assets					2,526			2,631			3,149			3,344			3,545
Total tangible common stockholders' equity at end of period - Non-GAAP				$	438,122		$	428,481		$	418,746		$	410,953		$	358,785
Shares outstanding at end of period					47,353			47,353			47,350			47,223			44,443
Book value per share - GAAP				$	12.19		$	11.99		$	11.78		$	11.65		$	11.22
Tangible book value per share - Non-GAAP				$	9.25		$	9.05		$	8.84		$	8.70		$	8.07
CALCULATION OF TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS
Total tangible common stockholders' equity at end of period - Non-GAAP				$	438,122		$	428,481		$	418,746		$	410,953		$	358,785
Total assets at end of period - GAAP				$	5,399,481		$	5,362,187		$	5,247,815		$	5,093,131		$	4,904,291
Less:  Goodwill					136,433			136,433			135,747			135,747			136,392
Less:  Other identifiable intangible assets					2,526			2,631			3,149			3,344			3,545
Total tangible assets at end of period - Non-GAAP				$	5,260,522		$	5,223,123		$	5,108,919		$	4,954,040		$	4,764,354
Common equity to assets - GAAP					10.69	%		10.58	%		10.63	%		10.80	%		10.17	%
Tangible common equity to tangible assets - Non-GAAP					8.33	%		8.20	%		8.20	%		8.30	%		7.53	%
CALCULATION OF RETURN ON AVERAGE TANGIBLE COMMON EQUITY
Net income - GAAP				$	13,723		$	13,370		$	12,312		$	11,953		$	11,327
Total average common stockholders' equity - GAAP				$	574,113		$	565,211		$	553,782		$	510,562		$	495,343
Less:  Average goodwill					136,433			135,755			135,747			136,385			136,392
Less:  Average other identifiable intangible assets					2,606			3,069			3,276			3,459			3,685
Total average tangible common stockholders' equity - Non-GAAP				$	435,074		$	426,387		$	414,759		$	370,718		$	355,266
Return on average common stockholders' equity - GAAP					9.48	%		9.49	%		9.02	%		9.31	%		9.10	%
Return on average tangible common stockholders' equity - Non-GAAP					12.51	%		12.58	%		12.04	%		12.83	%		12.68	%
CALCULATION OF EFFICIENCY RATIO
Total noninterest expense				$	24,849		$	25,366		$	28,470		$	24,772		$	26,006
Amortization of core deposit intangibles					(104	)		(190	)		(195	)		(202	)		(201	)
Long-term debt prepayment fee					-			-			(2,828	)		-			-
Merger related expenses					-			-			-			-			(1,697	)
Noninterest expense, as adjusted				$	24,745		$	25,176		$	25,447		$	24,570		$	24,108
Net interest income				$	42,115		$	41,421		$	39,323		$	38,179		$	38,518
Total noninterest income					5,454			6,111			8,094			5,161			6,417
Total revenue					47,569			47,532			47,417			43,340			44,935
Tax-equivalent adjustment on municipal securities					271			281			275			262			253
(Gains) losses on sales of investment securities					-			15			(2,539	)		-			-
Total revenue, as adjusted				$	47,840		$	47,828		$	45,153		$	43,602		$	45,188
Efficiency ratio - Non-GAAP					51.72	%		52.64	%		56.36	%		56.35	%		53.35	%
				For the Quarter Ended						For the Nine Months Ended
				Sept 30,			Sept 30,			Sept 30,			Sept 30,
(Dollars in thousands, except per share amounts)					2017			2016			2017			2016
RECONCILIATION OF EARNINGS PER SHARE
Net income - GAAP				$	13,723		$	11,327		$	39,405		$	29,565
NON-ROUTINE TRANSACTIONS, NET OF TAX
Tax deductible merger related expenses					-			893			-			1,915
Non-tax deductible merger related expenses					-			187			-			866
Net effect of non-routine transactions					-			1,080			-			2,781
Net income available to common shareholders excluding non-routine transactions					13,723			12,407			39,405			32,346
Less:  Earnings allocated to participating securities					(122	)		(114	)		(362	)		(275	)
				$	13,601		$	12,293		$	39,043		$	32,071
Weighted average shares - Basic					47,466			44,439			47,429			42,211
Weighted average shares - Diluted					47,692			44,659			47,660			42,390
Basic earnings per share - GAAP				$	0.29		$	0.25		$	0.82		$	0.69
Diluted earnings per share - GAAP				$	0.29		$	0.25		$	0.82		$	0.69
Basic earnings per share, adjusted for non-routine transactions				$	0.29		$	0.28		$	0.82		$	0.76
Diluted earnings per share, adjusted for non-routine transactions (Core EPS)				$	0.29		$	0.28		$	0.82		$	0.76

 

Lakeland Bancorp, Inc.
Supplemental Information - Non-GAAP Financial Measures
(Unaudited)
				For the Nine Months Ended,
				Sept 30,			Sept 30,
(Dollars in thousands)					2017			2016
CALCULATION OF RETURN ON AVERAGE TANGIBLE COMMON EQUITY
Net income - GAAP				$	39,405		$	29,565
Total average common stockholders' equity - GAAP				$	564,443		$	462,445
Less:  Average goodwill					135,981			128,774
Less:  Average other identifiable intangible assets					2,981			3,146
Total average tangible common stockholders' equity - Non-GAAP				$	425,481		$	330,525
Return on average common stockholders' equity - GAAP					9.33	%		8.54	%
Return on average tangible common stockholders' equity - Non-GAAP					12.38	%		11.95	%
CALCULATION OF EFFICIENCY RATIO
Total noninterest expense				$	78,685		$	75,145
Amortization of core deposit intangibles					(489	)		(532	)
Long-term debt prepayment fee					(2,828	)		-
Merger related expenses					-			(4,103	)
Provision for unfunded lending commitments					-			(438	)
Noninterest expense, as adjusted				$	75,368		$	70,072
Net interest income				$	122,859		$	107,470
Noninterest income					19,659			16,169
Total revenue					142,518			123,639
Tax-equivalent adjustment on municipal securities					827			700
Gains on sales of investment securities					(2,524	)		(370	)
Total revenue, as adjusted				$	140,821		$	123,969
Efficiency ratio - Non-GAAP					53.52	%		56.52	%