• Net interest margin in the first quarter of 2010 increased to 3.99%, which compares to 3.90% for the fourth quarter of 2009 and 3.80% for the first quarter of 2009.
   
• Non-interest bearing demand deposits increased from year-end 2009 by $23.5 million, or 7%, to $346.7 million. Core deposits were 78% of total deposits at March 31, 2010, as compared to 69% at the end of the first quarter of 2009.
   
• The efficiency ratio at the end of the first quarter of 2010 was 56.9%, compared to 60.0% for the same period last year.

The Board of Directors declared a quarterly cash dividend of $0.05 per common share. The cash dividend will be paid on May 17, 2010, to holders of record as of the close of business on April 30, 2010.

In the first quarter of 2010, we continue to emphasize our community banking model which provides individualized service to both retail and commercial customers alike. This attention to personal service is reflected in the continued deposit and core loan growth. While providing the best in customer service, we are still mindful of the managing of the net interest margin as well as operating expenses. It’s all of these factors that make Lakeland Bank the predominant community bank in northern New Jersey.

As always, we thank our team of employees, officers, directors, shareholders and customers for all their continued support.

Sincerely,

Thomas J. Shara
President and Chief Executive Officer