News Column

Lakeland Bancorp Second Quarter Results Driven by Strong Loan Growth

July 22, 2014

OAK RIDGE, N.J., July 22, 2014 (GLOBE NEWSWIRE) -- Lakeland Bancorp, Inc. (Nasdaq:LBAI) reported the following positive results in the second quarter of 2014:

• Net Income Available to Common Shareholders in the second quarter of 2014 was $7.8 million or $0.20 per diluted share compared to $5.9 million or $0.18 per diluted share for the same period last year. Second quarter 2013 results included $1.5 million in merger expenses relating to the acquisition of Somerset Hills Bancorp and a $1.2 million gain on debt extinguishment. Excluding these items, Net Income Available to Common Shareholders in the second quarter of 2013 was $6.2 million, or $0.19 per diluted share. In the second quarter of 2014, Annualized Return on Average Assets was 0.93%, Annualized Return on Average Common Equity was 8.58%, and Annualized Return on Average Tangible Common Equity was 12.41%.

 • Net Income Available to Common Shareholders for the first six months of 2014 was $14.9 million or $0.39 per diluted share compared to $11.0 million, or $0.34 per diluted share for the same period last year. Excluding merger costs and the gain on debt extinguishment, Net Income Available to Common Shareholders was $11.9 million or $0.37 per diluted share for the first six months of 2013. The Annualized Return on Average Assets for the six months ended June 30, 2014 was 0.90%, the Annualized Return on Average Common Equity was 8.36%, and the Annualized Return on Average Tangible Common Equity was 12.15%.

 • The Company reported strong loan growth as loans totaling $2.61 billion at June 30, 2014 increased by $105.6 million, or 4% as compared to March 31, 2014. The overall increase was primarily in total commercial loans, which increased by $93.8 million, or 6% this quarter.

 • In the second quarter of 2014, Net Interest Margin ("NIM") was 3.69%, compared to 3.72% in the first quarter of 2014 and 3.68% for the same period last year. For the first six months of 2014, NIM was 3.71% compared to 3.69% for the first six months of 2013.

 • Non-performing assets at $20.2 million decreased 11% from the previous quarter, while net charge-offs at $1.2 million (0.20% of average loans) were at the lowest level in the past five quarters. The Allowance for Loan and Lease Losses totaled $29.9 million and was 154% of non-accruing loans at June 30, 2014.   

 • In the second quarter of 2014, the Company paid a 5% stock dividend on June 17, 2014 to holders of record on June 3, 2014. (Please note that all per share data has been adjusted to reflect this stock dividend). On July 16, 2014, the Company declared a quarterly cash dividend of $0.075 per common share, payable on August 15, 2014 to holders of record as of the close of business on August 4, 2014. Since the cash dividend remained unchanged from the previous quarter, this effectively increases the cash dividend by 5%.  

Thomas J. Shara, Lakeland Bancorp's President and CEO said, "Total loans and total assets at $2.6 billion and $3.5 billion, respectively, are now at record levels, reflecting loan growth of 4% in the second quarter of 2014 and 6% overall this year. Net Income increased by 9% from the first quarter of 2014 driven by strong loan growth, improved asset quality, stable margins, and reduced operating expenses."

Earnings

As previously noted, the Company acquired Somerset Hills Bancorp ("Somerset Hills"), which had total assets of $355.9 million at the time of acquisition, on May 31, 2013. The Company's financial statements reflect the impact of the merger from the date of acquisition, which should be considered when comparing the results for the second quarters of 2014 and 2013, respectively.

Net Interest Income

Net interest income for the second quarter of 2014 was $28.4 million, as compared to $25.1 million for the same period in 2013, an increase of 13%. Annualized Net Interest Margin ("NIM") has remained stable for the last five quarters. In the second quarter of 2014, NIM was 3.69%, which compared to 3.72% reported in the first quarter of 2014, and 3.68% in the second quarter of 2013. The annualized yield on interest-earning assets declined seven basis points from 4.04% in the second quarter of 2013 to 3.97% for the same period this year. The annualized cost of interest-bearing liabilities has decreased eleven basis points from 0.47% in the second quarter of 2013 to 0.36% in the second quarter of 2014. This decrease was driven by reduced deposit costs combined with a 63 basis point decrease in the cost of borrowings.

Year-to-date, net interest income at $56.3 million compared to the $49.1 million reported for the first six months of 2013, an increase of 15%. Annualized Net Interest Margin for the first six months of 2014 at 3.71% compared to 3.69% for the same period last year. The Company's annualized yield on earning assets decreased from 4.07% for the first six months of 2013 to 3.98% for the same period this year. The Company's cost of interest bearing liabilities decreased from 0.49% for the first six months of 2013 to 0.36% for the first six months of this year.

Noninterest Income

Noninterest income totaled $4.4 million for the second quarter of 2014, as compared to $5.8 million for the same period last year. In the second quarter of 2013, the Company acquired and extinguished Lakeland Bancorp Capital Trust I trust preferred securities recording a $1.2 million gain on this transaction. Exclusive of this transaction, non-interest income in the second quarter of 2014 was $0.2 million lower than the total reported in the same period last year. Service charges on deposit accounts totaling $2.7 million and commissions and fees at $1.1 million were equivalent to the totals for the same period last year. Other income at $0.3 million was $0.2 million lower than last year's second quarter total primarily due to a reduction in the gain on sale of mortgage loans.  

Noninterest income, exclusive of gains on sales of investment securities and the aforementioned gain on debt extinguishment, totaled $8.4 million for the first six months of 2014, which was $0.7 million lower than last year's six month total. Gains on investment securities totaled $2 thousand in 2014 as compared to $0.5 million in 2013. Service charges on deposit accounts at $5.2 million were equivalent to last year's total, while commissions and fees at $2.1 million decreased by $0.3 million, primarily due a decrease in investment commission income. Other income at $0.4 million decreased by $0.5 million primarily due to reductions in both gains on sales of mortgage loans and loan swap income.

Noninterest Expense

Noninterest expense for the second quarter of 2014 was $19.5 million, as compared to $19.4 million for the same period last year. Included in non-interest expenses in the second quarter of 2013 were $1.5 million in merger related expenses and one month's expenses post Somerset Hills' acquisition. Exclusive of the merger related costs in 2013, non-interest expenses increased by $1.6 million, or 9% in the second quarter of 2014 from the same period in 2013. Salary and benefit expense at $11.2 million increased by 11%, partially due to increased staffing due to the Somerset Hills merger. Net occupancy, furniture and equipment expenses at $3.7 million increased by 9% primarily due to expenses relating to the six new branches acquired in the Somerset Hills merger. The efficiency ratio for the second quarter of 2014 was 58.7% as compared to 59.7% for the same period last year.

For the first six months of 2014, non-interest expenses were $39.3 million compared to $37.6 million for the same period last year. In the first half of 2013 the Company recorded $2.1 million in merger related expenses and $0.5 million in prepayment fees on long-term debt. Exclusive of these items in 2013, non-interest expenses for the first six months of 2014 were $4.3 million higher than the same period in 2013. Salary and benefit expense at $22.0 million increased by 10%, partially due to increased staffing due to the Somerset Hills merger. Net occupancy, furniture and equipment expenses at $8.0 million were $1.2 million higher than last year primarily due to expenses relating to the six new branches acquired in the Somerset Hills merger, as well as a $0.4 million increase in snow removal costs in the first quarter of 2014. Other expenses at $5.8 million increased by $0.8 million partially due to an increase of $0.5 million in audit fees.  

Financial Condition

At June 30, 2014, total assets were $3.48 billion, an increase of $161.8 million, or 5%, from December 31, 2013. As previously mentioned, total loans were $2.61 billion, an increase of $139.9 million, or 6%, from December 31, 2013.  Total deposits were $2.73 billion, an increase of $17.6 million from December 31, 2013. Non-interest demand deposits at $649.2 million have increased by $48.5 million, or 8%, in 2014. Interest-bearing deposits at $2.08 billion have decreased this year by $30.9 million, primarily due to a $42.7 million decrease in interest-bearing public funds.

Asset Quality

At June 30, 2014, non-performing assets totaled $20.2 million (0.58% of total assets) compared to $22.7 million (0.67% of total assets) at March 31, 2014. The Allowance for Loan and Lease Losses totaled $29.9 million at June 30, 2014 and represented 1.14% of total loans.  In the second quarter of 2014, the Company had net charge offs totaling $1.2 million compared to $2.6 million in the second quarter of 2013. For the first six months of 2014, the Company had net charge-offs of $3.0 million (0.24% of average loans), as compared to $5.1 million (0.46% of average loans) for the same period last year. The provision for loan and lease losses in the second quarter of 2014 was $1.6 million, compared to $2.6 million in the same period last year.

Capital

At June 30, 2014, stockholders' equity was $367.8 million, while book value per common share was $9.70. Tangible book value per common share was $6.74, an increase of 7% from year-end 2013. As of June 30, 2014, the Company's leverage ratio was 9.06%. Tier I and total risk based capital ratios were 11.54% and 12.75%, respectively. The Tangible Common Equity ratio was 7.59%, an increase from 7.46% reported at December 31, 2013. These regulatory capital ratios exceed those necessary to be considered a well-capitalized institution under Federal 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, and competition. 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").  The Company's management believes that the supplemental non-GAAP information, which consists of measurements and ratios based on tangible equity and tangible assets, is utilized by regulators and market analysts to evaluate a company's financial condition and therefore, such information is useful to investors. 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.

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.

About Lakeland Bank

Lakeland Bancorp, the holding company for Lakeland Bank, has $3.5 billion in total assets with 51 offices spanning eight northern New Jersey counties: Bergen, Essex, Morris, Passaic, Somerset, Sussex, Union and Warren. Lakeland Bank is the second largest commercial bank headquartered in the state and offers an extensive array of consumer and commercial products and services, including online and mobile banking, localized commercial lending teams, and 24-hour or less turnaround time on consumer loan applications. For more information about the full line of products and services, visit LakelandBank.com.

Lakeland Bancorp, Inc.
Financial Highlights
(unaudited)
         
 Three Months Ended June 30,Six months Ended June 30,
         
 2014 2013 2014 2013
  (Dollars in thousands except per share amounts)
INCOME STATEMENT        
Net Interest Income  $ 28,419  $ 25,146  $ 56,264  $ 49,082
Provision for Loan and Lease Losses  (1,593)  (2,594)  (3,082)  (5,777)
Other Noninterest Income  4,371  4,595  8,442  9,141
Gains on investment securities  --   1  2  506
Gain on debt extinguishment  --   1,197  --   1,197
Long-term debt prepayment fee  --   --   --   (526)
Merger related expenses  --   (1,452)  --   (2,083)
Noninterest Expense  (19,530)  (17,941)  (39,272)  (35,011)
Pretax Income  11,667  8,952  22,354  16,529
Tax Expense  (3,886)  (3,049)  (7,410)  (5,518)
Net Income  $ 7,781  $ 5,903  $ 14,944  $ 11,011
         
         
Basic Earnings Per Common Share (1)  $ 0.20  $ 0.18  $ 0.39  $ 0.34
Diluted Earnings Per Common Share (1)  $ 0.20  $ 0.18  $ 0.39  $ 0.34
Dividends per Common Share (1)  $ 0.07  $ 0.07  $ 0.14  $ 0.13
Weighted Average Shares - Basic (1)  37,740  33,103  37,711  32,078
Weighted Average Shares - Diluted (1)  37,850  33,199  37,828  32,158
         
SELECTED OPERATING RATIOS        
Annualized Return on Average Assets 0.93% 0.79% 0.90% 0.76%
Annualized Return on Average Common Equity 8.58% 7.76% 8.36% 7.55%
Annualized Return on Average Tangible Common Equity (2) 12.41% 11.31% 12.15% 10.96%
Annualized Return on Interest Earning Assets 3.97% 4.04% 3.98% 4.07%
Annualized Cost of Interest Bearing Liabilities 0.36% 0.47% 0.36% 0.49%
Annualized Net Interest Spread 3.60% 3.58% 3.62% 3.59%
Annualized Net Interest Margin 3.69% 3.68% 3.71% 3.69%
Efficiency ratio (2) 58.73% 59.70% 59.80% 59.77%
Stockholders' equity to total assets     10.57% 10.46%
Book value per common share (1)      $ 9.70  $ 9.10
Tangible book value per common share (1) (2)      $ 6.74  $ 6.08
Tangible common equity to tangible assets (1) (2)     7.59% 7.24%
         
ASSET QUALITY RATIOS    6/30/201412/31/2013
Ratio of allowance for loan and lease losses to total loans     1.14% 1.21%
Non-accruing loans to total loans     0.74% 0.69%
Non-performing assets to total assets     0.58% 0.53%
Annualized net charge-offs to average loans     0.24% 0.36%
         
SELECTED BALANCE SHEET DATA AT PERIOD-END    6/30/201412/31/2013
Loans and Leases      $ 2,610,198  $ 2,470,289
Allowance for Loan and Lease Losses      (29,866)  (29,821)
Investment Securities      530,934  540,788
Total Assets      3,479,548  3,317,791
Total Deposits      2,726,850  2,709,205
Short-Term Borrowings      156,511  81,991
Other Borrowings      215,238  160,238
Stockholders' Equity      367,833  351,424
         
SELECTED AVERAGE BALANCE SHEET DATAFor the Three Months EndedFor the Six Months Ended
 6/30/20146/30/20136/30/20146/30/2013
Loans and Leases, net  $ 2,552,010  $ 2,264,713  $ 2,519,679  $ 2,201,347
Investment Securities  537,974  470,018  539,837  472,904
Interest-Earning Assets  3,114,539  2,765,229  3,088,193  2,704,793
Total Assets  3,360,289  3,001,361  3,336,630  2,935,053
Non Interest-Bearing Demand Deposits  640,080  542,976  629,570  522,708
Savings Deposits  387,179  369,703  386,099  363,739
Interest-Bearing Transaction Accounts  1,433,382  1,284,233  1,437,055  1,255,333
Time Deposits  284,475  311,230  288,826  306,719
Total Deposits  2,745,116  2,508,142  2,741,550  2,448,499
Short-Term Borrowings  78,475  48,652  67,599  49,143
Other Borrowings  158,432  125,268  152,042  129,336
Total Interest-Bearing Liabilities  2,341,944  2,139,086  2,331,621  2,104,270
Stockholders' Equity  363,802  304,950  360,395  293,934
         
(1) Adjusted for 5% stock dividend paid on June 17, 2014 to shareholders of record June 3, 2014
(2) See supplemental information - non-GAAP financial measures
         
Lakeland Bancorp, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
         
  Three Months Ended June 30, Six Months Ended June 30,
  2014 2013 2014 2013
(dollars in thousands, except per share amounts)        
INTEREST INCOME        
Loans and fees$27,558$25,365$54,456$49,772
Federal funds sold and interest bearing deposits with banks  9  17 22 30
Taxable investment securities and other  2,515  1,808 5,061 3,527
Tax exempt investment securities  467  440 940 870
TOTAL INTEREST INCOME  30,549  27,630 60,479 54,199
INTEREST EXPENSE        
Deposits  1,243  1,560 2,506 3,222
Federal funds purchased and securities sold under agreements to repurchase  35  13 50 22
Other borrowings  852  911 1,659 1,873
TOTAL INTEREST EXPENSE  2,130  2,484 4,215 5,117
NET INTEREST INCOME  28,419  25,146 56,264 49,082
Provision for loan and lease losses  1,593  2,594 3,082 5,777
NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES  26,826  22,552 53,182 43,305
NONINTEREST INCOME        
Service charges on deposit accounts  2,663  2,692 5,222 5,214
Commissions and fees  1,082  1,143 2,095 2,356
Gains on sales and calls of investment securities  --   1 2 506
Gain on debt extinguishment  --   1,197 0  1,197
Income on bank owned life insurance  365  340 725 653
Other income  261  420 400 918
TOTAL NONINTEREST INCOME  4,371  5,793 8,444 10,844
NONINTEREST EXPENSE        
Salaries and employee benefits  11,200  10,133 22,013 20,086
Net occupancy expense  2,041  1,887 4,658 3,861
Furniture and equipment  1,660  1,505 3,353 2,910
Stationery, supplies and postage  334  368 688 738
Marketing expense  476  435 862 723
FDIC insurance expense  511  556 1,012 1,069
Legal expense  219  286 492 528
Other real estate owned and other repossessed asset expense  100 (2) 115 17
Long-term debt prepayment fee  --   --   --   526
Merger related expenses  --   1,452  --   2,083
Core deposit intangible amortization  119  41 242 41
Other expenses  2,870  2,732 5,837 5,038
TOTAL NONINTEREST EXPENSE  19,530  19,393 39,272 37,620
INCOME BEFORE PROVISION FOR INCOME TAXES  11,667  8,952 22,354 16,529
Provision for income taxes  3,886  3,049 7,410 5,518
NET INCOME$7,781$5,903$14,944$11,011
EARNINGS PER COMMON SHARE (1)        
Basic$0.20$0.18$0.39$0.34
Diluted$0.20$0.18$0.39$0.34
DIVIDENDS PER COMMON SHARE (1)$0.07$0.07$0.14$0.13
         
(1) Adjusted for 5% stock dividend paid on June 17, 2014 to shareholders of record June 3, 2014
         
Lakeland Bancorp, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
     
 June 30,  December 31,
ASSETS 2014 2013
(dollars in thousands) (unaudited)  
Cash and due from banks$125,991$94,205
Federal funds sold and interest-bearing deposits due from banks 12,974 8,516
Total cash and cash equivalents  138,965  102,721
     
Investment securities available for sale, at fair value  415,643  431,106
Investment securities held to maturity; fair value of $105,720 in 2014 and $100,394 in 2013  105,480  101,744
Federal Home Loan Bank and other membership stocks, at cost  9,811  7,938
Loans held for sale  399  1,206
Loans:    
Commercial, secured by real estate  1,551,071  1,442,980
Commercial, industrial and other  237,071  213,808
Leases  50,191  41,332
Residential mortgages  433,634  432,831
Consumer and home equity  338,231  339,338
Total loans  2,610,198  2,470,289
Net deferred costs (1,661)  (1,273)
Allowance for loan and lease losses (29,866) (29,821)
Net loans  2,578,671  2,439,195
Premises and equipment, net  36,202  37,148
Accrued interest receivable  8,353  8,603
Goodwill  109,974  109,974
Other identifiable intangible assets  2,182  2,424
Bank owned life insurance  56,693  55,968
Other assets  17,175  19,764
TOTAL ASSETS$3,479,548$3,317,791
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
LIABILITIES:    
Deposits:    
Noninterest bearing$649,186$600,652
Savings and interest-bearing transaction accounts  1,797,358  1,812,467
Time deposits under $100,000  169,655  180,859
Time deposits $100,000 and over  110,651  115,227
Total deposits  2,726,850  2,709,205
Federal funds purchased and securities sold under agreements to repurchase  156,511  81,991
Other borrowings  174,000  119,000
Subordinated debentures  41,238  41,238
Other liabilities  13,116  14,933
TOTAL LIABILITIES  3,111,715  2,966,367
     
STOCKHOLDERS' EQUITY    
Common stock, no par value; authorized 70,000,000 shares; issued 37,914,094 shares at June 30, 2014 and 37,873,800 shares at December 31, 2013  383,362  364,637
Accumulated Deficit (16,647) (8,538)
Accumulated other comprehensive income (loss)  1,118 (4,675)
TOTAL STOCKHOLDERS' EQUITY  367,833  351,424
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$3,479,548$3,317,791
     
Lakeland Bancorp, Inc.
Financial Highlights
(unaudited)
           
 For the Quarter Ended
 Jun 30,Mar 31,Dec 31,Sept 30,Jun 30,
(dollars in thousands, except per share data)20142014201320132013
INCOME STATEMENT (unaudited)
Net Interest Income  $ 28,419  $ 27,845  $ 27,973  $ 27,487  $ 25,146
Provision for Loan and Lease Losses  (1,593)  (1,489)  (1,687)  (1,879)  (2,594)
Other Noninterest Income  4,371  4,071  5,139  4,645  4,595
Gains on investment securities  --   2  333  --   1
Gain on debt extinguishment  --   --   --   --   1,197
Long-term debt prepayment fee  --   --   (683)  --   -- 
Merger related expenses  --   --   (7)  (744)  (1,452)
Core deposit intangible amortization  (119)  (123)  (124)  (123)  (41)
Other Noninterest Expense  (19,411)  (19,619)  (19,900)  (19,540)  (17,900)
Pretax Income  11,667  10,687  11,044  9,846  8,952
Tax Expense  (3,886)  (3,524)  (3,703)  (3,229)  (3,049)
Net Income Available to Common Stockholders  $ 7,781  $ 7,163  $ 7,341  $ 6,617  $ 5,903
           
           
Basic Earnings Per Common Share (1)  $ 0.20  $ 0.19  $ 0.19  $ 0.18  $ 0.18
Diluted Earnings Per Common Share (1)  $ 0.20  $ 0.19  $ 0.19  $ 0.18  $ 0.18
Dividends Per Common Share (1)  $ 0.07  $ 0.07  $ 0.07  $ 0.07  $ 0.07
Dividends Paid  $ 2,717  $ 2,705  $ 2,688  $ 2,504  $ 2,091
Weighted Average Shares - Basic (1)  37,740  37,683  37,436  37,288  33,103
Weighted Average Shares - Diluted (1)  37,850  37,806  37,649  37,522  33,199
           
SELECTED OPERATING RATIOS          
Annualized Return on Average Assets 0.93% 0.88% 0.88% 0.81% 0.79%
Annualized Return on Average Common Equity 8.58% 8.14% 8.30% 7.64% 7.76%
Annualized Return on Tangible Common Equity (2) 12.41% 11.88% 12.23% 11.39% 11.31%
Annualized Net Interest Margin 3.69% 3.72% 3.70% 3.68% 3.68%
Efficiency ratio (2) 58.73% 60.90% 59.44% 59.98% 59.70%
Common stockholders' equity to total assets 10.57% 10.62% 10.59% 10.53% 10.46%
Tangible common equity to tangible assets (2) 7.59% 7.55% 7.46% 7.36% 7.24%
Tier 1 risk-based ratio 11.54% 11.76% 11.73% 11.64% 11.53%
Total risk-based ratio 12.75% 13.01% 12.98% 12.89% 12.78%
Tier 1 leverage ratio 9.06% 9.01% 8.90% 8.84% 9.43%
Book value per common share (1)  $ 9.70  $ 9.48  $ 9.28  $ 9.24  $ 9.10
Tangible book value per common share (1) (2)  $ 6.74  $ 6.52  $ 6.31  $ 6.24  $ 6.08
           
(1) Adjusted for 5% stock dividend paid on June 17, 2014 to shareholders of record June 3, 2014
(2) See Supplemental Information - Non GAAP financial measures
           
           
Lakeland Bancorp, Inc.
Financial Highlights
(unaudited)
           
 For the Quarter Ended
 Jun 30,Mar 31,Dec 31,Sept 30,Jun 30,
(dollars in thousands)20142014201320132013
  (unaudited)
SELECTED BALANCE SHEET DATA AT PERIOD-END          
Loans and Leases  $ 2,610,198  $ 2,504,626  $ 2,470,289  $ 2,428,750  $ 2,447,644
Allowance for Loan and Lease Losses  (29,866)  (29,520)  (29,821)  (29,757)  (29,626)
Investment Securities  530,934  533,165  540,788  521,229  500,204
Total Assets  3,479,548  3,386,720  3,317,791  3,299,300  3,262,411
Total Deposits  2,726,850  2,736,733  2,709,205  2,708,454  2,672,859
Short-Term Borrowings  156,511  115,952  81,991  110,525  116,627
Other Borrowings  215,238  160,238  160,238  117,548  117,548
Stockholders' Equity  367,833  359,539  351,424  347,525  341,109
           
Loans and Leases          
Commercial real estate  $ 1,551,071  $ 1,486,274  $ 1,442,980  $ 1,398,435  $ 1,394,698
Commercial, industrial and other  237,071  208,056  213,808  214,877  234,022
Leases  50,191  43,720  41,332  37,845  33,330
Residential mortgages  433,634  430,559  432,831  437,788  445,584
Consumer and Home Equity  338,231  336,017  339,338  339,805  340,010
Total loans  $ 2,610,198  $ 2,504,626  $ 2,470,289  $ 2,428,750  $ 2,447,644
           
Deposits          
Noninterest bearing  $ 649,186  $ 630,499  $ 600,652  $ 623,562  $ 600,868
Savings and interest-bearing transaction accounts  1,797,358  1,816,084  1,812,467  1,770,299  1,739,943
Time deposits under $100,000  169,655  177,284  180,859  190,996  194,666
Time deposits $100,000 and over  110,651  112,866  115,227  123,597  137,382
Total deposits  $ 2,726,850  $ 2,736,733  $ 2,709,205  $ 2,708,454  $ 2,672,859
           
           
SELECTED AVERAGE BALANCE SHEET DATA          
Loans and Leases, net  $ 2,552,010  $ 2,486,990  $ 2,427,505  $ 2,435,658  $ 2,264,713
Investment Securities  537,974  541,721  535,210  506,263  470,018
Interest-Earning Assets  3,114,539  3,061,555  3,023,256  2,987,408  2,765,229
Total Assets  3,360,289  3,312,709  3,291,865  3,243,997  3,001,360
Non Interest-Bearing Demand Deposits  640,080  618,944  638,016  620,499  542,976
Savings Deposits  387,179  385,007  382,062  374,141  369,703
Interest-Bearing Transaction Accounts  1,433,382  1,440,770  1,450,055  1,403,227  1,284,233
Time Deposits  284,475  293,225  301,640  322,371  311,230
Total Deposits  2,745,116  2,737,946  2,771,773  2,720,238  2,508,142
Short-Term Borrowings  78,475  56,602  36,928  47,702  48,652
Other Borrowings  158,432  145,580  117,353  117,559  125,268
Total Interest-Bearing Liabilities  2,341,944  2,321,184  2,288,039  2,265,000  2,139,086
Stockholders' Equity  363,802  356,951  351,067  343,482  304,950
           
Lakeland Bancorp, Inc.
Financial Highlights
(unaudited)
           
 For the Quarter Ended
 Jun 31,Mar 31,Dec 31,Sept 30,Jun 30,
(dollars in thousands)20142014201320132013
  (unaudited)
AVERAGE ANNUALIZED YIELDS (taxable equivalent basis)          
Assets:          
Loans and leases 4.33% 4.39% 4.45% 4.45% 4.49%
Taxable investment securities and other 2.18% 2.19% 2.12% 1.87% 1.82%
Tax-exempt securities 3.74% 3.80% 3.83% 3.74% 3.67%
Federal funds sold and interest-bearing cash accounts 0.15% 0.16% 0.24% 0.24% 0.22%
Total interest-earning assets 3.97% 3.99% 3.99% 4.00% 4.04%
Liabilities:          
Savings accounts 0.05% 0.05% 0.05% 0.05% 0.06%
Interest-bearing transaction accounts 0.23% 0.23% 0.23% 0.27% 0.30%
Time deposits 0.51% 0.56% 0.60% 0.64% 0.70%
Borrowings 1.50% 1.63% 2.13% 2.06% 2.13%
Total interest-bearing liabilities 0.36% 0.36% 0.38% 0.42% 0.47%
Net interest spread (taxable equivalent basis) 3.60% 3.63% 3.61% 3.58% 3.58%
Annualized Net Interest Margin (taxable equivalent basis) 3.69% 3.72% 3.70% 3.68% 3.68%
Annualized Cost of Deposits 0.18% 0.19% 0.19% 0.22% 0.25%
           
ASSET QUALITY DATA          
Allowance for Loan and Lease Losses          
Balance at beginning of period  $ 29,520  $ 29,821  $ 29,757  $ 29,626  $ 29,623
Provision for loan losses  1,593  1,489  1,687  1,879  2,594
Net Charge-offs  (1,247)  (1,790)  (1,623)  (1,748)  (2,591)
Balance at end of period  $ 29,866  $ 29,520  $ 29,821  $ 29,757  $ 29,626
           
Net Loan Charge-offs (Recoveries)          
Commercial real estate  $ (152)  $ 1,613  $ 928  $ 749  $ 1,778
Commercial, industrial and other  511  (578)  100  367  450
Leases  126  39  (2)  21  42
Home equity and consumer  411  567  244  494  196
Real estate - mortgage  351  149  353  117  125
Net charge-offs  $ 1,247  $ 1,790  $ 1,623  $ 1,748  $ 2,591
           
Nonperforming Assets          
Commercial real estate  $ 9,647  $ 12,279  $ 8,528  $ 7,506  $ 9,209
Commercial, industrial and other  700  246  88  184  797
Leases  61  143  --   --   -- 
Home equity and consumer  2,251  2,431  2,175  2,819  2,921
Real estate - mortgage  6,730  6,875  6,141  5,996  6,840
Total non-accruing loans  19,389  21,974  16,932  16,505  19,767
Property acquired through foreclosure or repossession  850  698  520  2,154  337
Total non-performing assets  $ 20,239  $ 22,672  $ 17,452  $ 18,659  $ 20,104
           
Loans past due 90 days or more  $ 286  $ 451  $ 1,997  $ 2,484  $ 1,620
Loans restructured and still accruing  $ 6,818  $ 6,086  $ 10,289  $ 13,241  $ 12,538
           
Ratio of allowance for loan and lease losses to total loans 1.14% 1.18% 1.21% 1.23% 1.21%
Non-performing loans to total loans 0.74% 0.88% 0.69% 0.68% 0.81%
Non-performing assets to total assets 0.58% 0.67% 0.53% 0.57% 0.62%
Annualized net charge-offs to average loans 0.20% 0.29% 0.27% 0.29% 0.46%
           
           
Lakeland Bancorp, Inc.
Supplemental Information - Non-GAAP Financial Measures
(unaudited)
           
           
 At or for the Quarter Ended,
 Jun 30,Mar 31,Dec 31,Sept 30,Jun 30,
(dollars in thousands, except per share amounts)20142014201320132013
Calculation of tangible book value per common share          
Total common stockholders' equity at end of period - GAAP  $ 367,833  $ 359,539  $ 351,424  $ 347,525  $ 341,109
Less:          
Goodwill  109,974  109,974  109,974  110,381  110,381
Other identifiable intangible assets, net  2,182  2,301  2,424  2,548  2,671
Total tangible common stockholders' equity at end of period - Non- GAAP  $ 255,677  $ 247,264  $ 239,026  $ 234,596  $ 228,057
           
Shares outstanding at end of period (1)  37,914  37,912  37,874  37,614  37,487
           
Book value per share - GAAP (1)  $ 9.70  $ 9.48  $ 9.28  $ 9.24  $ 9.10
           
Tangible book value per share - Non-GAAP (1)  $ 6.74  $ 6.52  $ 6.31  $ 6.24  $ 6.08
           
           
Calculation of tangible common equity to tangible assets          
Total tangible common stockholders' equity at end of period - Non- GAAP  $ 255,677  $ 247,264  $ 239,026  $ 234,596  $ 228,057
           
Total assets at end of period  $ 3,479,548  $ 3,386,720  $ 3,317,791  $ 3,299,300  $ 3,262,411
Less:          
Goodwill  109,974  109,974  109,974  110,381  110,381
Other identifiable intangible assets, net  2,182  2,301  2,424  2,548  2,671
Total tangible assets at end of period - Non-GAAP  $ 3,367,392  $ 3,274,445  $ 3,205,393  $ 3,186,371  $ 3,149,359
           
Common equity to assets - GAAP 10.57% 10.62% 10.59% 10.53% 10.46%
           
Tangible common equity to tangible assets - Non-GAAP 7.59% 7.55% 7.46% 7.36% 7.24%
           
Calculation of return on average tangible common equity          
Net income - GAAP  $ 7,781  $ 7,163  $ 7,341  $ 6,617  $ 5,903
           
Total average common stockholders' equity  363,802  356,951  351,067  343,482  304,950
Less:          
Average goodwill  109,974  109,974  110,376  110,381  94,783
Average other identifiable intangible assets, net  2,256  2,379  2,496  2,624  894
Total average tangible common stockholders' equity - Non - GAAP  $ 251,572  $ 244,598  $ 238,195  $ 230,477  $ 209,273
           
Return on average common stockholders' equity - GAAP 8.58% 8.14% 8.30% 7.64% 7.76%
           
Return on average tangible common stockholders' equity - Non-GAAP 12.41% 11.88% 12.23% 11.39% 11.31%
           
Calculation of efficiency ratio          
Total non-interest expense  $ 19,530  $ 19,742  $ 20,714  $ 20,407  $ 19,393
Less:          
Amortization of core deposit intangibles  (119)  (123)  (124)  (123)  (41)
Other real estate owned and other repossessed asset (expense) income  (100)  (15)  (9)  2  2
Long-term debt prepayment fee  --   --   (683)  --   -- 
Merger related expenses  --   --   (7)  (744)  (1,452)
Provision for unfunded lending commitments, net  93  (11)  (63)  (121)  (6)
Non-interest expense, as adjusted  $ 19,404  $ 19,593  $ 19,828  $ 19,421  $ 17,896
           
Net interest income  $ 28,419  $ 27,845  $ 27,973  $ 27,487  $ 25,146
Total noninterest income  4,371  4,073  5,472  4,645  5,793
Total revenue  32,790  31,918  33,445  32,132  30,939
Plus: Tax-equivalent adjustment on municipal securities  251  255  248  248  237
Less:          
Gains on debt extinguishment  --   --   --   --   (1,197)
Gains on sales investment securities  --   (2)  (333)  --   (1)
Total revenue, as adjusted  $ 33,041  $ 32,171  $ 33,360  $ 32,380  $ 29,978
           
Efficiency ratio - Non-GAAP 58.73% 60.90% 59.44% 59.98% 59.70%
           
(1) Adjusted for 5% stock dividend paid on June 17, 2014 to shareholders of record June 3, 2014
           
     
Lakeland Bancorp, Inc.
Supplemental Information - Non-GAAP Financial Measures
(unaudited)
     
 For the Six Months Ended,
 June 30,June 30,
(dollars in thousands, except per share amounts)20142013
Calculation of return on average tangible common equity    
Net income - GAAP  $ 14,944  $ 11,011
     
Total average common stockholders' equity  $ 360,395  $ 293,934
Less:    
Average goodwill  109,974  90,968
Average other identifiable intangible assets, net  2,317  449
Total average tangible common stockholders' equity - Non GAAP  $ 248,104  $ 202,517
     
Return on average common stockholders' equity - GAAP 8.36% 7.55%
     
Return on average tangible common stockholders' equity - Non-GAAP 12.15% 10.96%
     
Calculation of efficiency ratio    
Total non-interest expense  $ 39,272  $ 37,620
Less:    
Amortization of core deposit intangibles  (242)  (41)
Other real estate owned and other repossessed asset expense  (115)  (17)
Long-term debt prepayment fee  --   (526)
Merger related expenses  --   (2,083)
Provision for unfunded lending commitments  82  129
Non-interest expense, as adjusted  $ 38,997  $ 35,082
     
Net interest income  $ 56,264  $ 49,082
Noninterest income  8,444  10,844
Total revenue  64,708  59,926
Plus: Tax-equivalent adjustment on municipal securities  506  468
Less:    
Gains on investment securities  (2)  (506)
Gains on extinguishment of debt  --   (1,197)
Total revenue, as adjusted  $ 65,212  $ 58,691
     
Efficiency ratio - Non - GAAP 59.80% 59.77%
     

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

Source: Lakeland Bancorp, Inc.


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