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Lakeland Bancorp Reports Third Quarter Results and Increases Cash Dividend by 7%

Company Release - 10/24/2013 08:19

OAK RIDGE, N.J., Oct. 24, 2013 (GLOBE NEWSWIRE) -- Lakeland Bancorp, Inc. (Nasdaq:LBAI) reported Net Income Available to Common Shareholders in the third quarter of 2013 of $6.6 million or $0.18 per diluted share compared to $5.5 million, or $0.20 per diluted share for the same period last year. Third quarter results included $744,000, or $0.02 per diluted share, in merger expenses relating to the acquisition of Somerset Hills Bancorp, which took place in the second quarter of 2013. Net Income Available to Common Shareholders for the first nine months of 2013 was $17.6 million or $0.54 per diluted share compared to $15.3 million, or $0.56 per diluted share for the same period last year. Excluding merger costs, Net Income Available to Common Shareholders was $19.8 million or $0.61 per diluted share for the first nine months of 2013.The Return on Average Assets for the nine months ended September 30, 2013 was 0.78%, the Return on Average Common Equity was 7.59% and the Return on Tangible Common Equity was 11.12%.

The Company declared a quarterly cash dividend of $0.075 per common share, an increase of 7% from the prior quarter, payable on November 15, 2013 to holders of record as of the close of business on November 5, 2013.

Thomas J. Shara, Lakeland Bancorp's President and CEO said, "Our solid third quarter results reflect the successful completion of the Somerset Hills merger, the continued stability in our net interest margin, and further improvement in asset quality. We are very pleased to be able to reward our shareholders with a 7% increase in the cash dividend. This is the fourth consecutive year of higher cash dividends and/or stock dividends."

Somerset Hills Bancorp Acquisition

As previously noted in the second quarter earnings release, the Company acquired Somerset Hills Bancorp ("Somerset Hills") on May 31, 2013. At the time of acquisition, Somerset Hills had $355.9 million in total assets, $10.4 million in investment securities, $246.4 million in loans (including $2.5 million in mortgages held for sale), and $311.8 million in deposits ($80.8 million in non-interest bearing demand deposits and $231.0 million in interest-bearing deposits) at fair value. Goodwill amounted to $23.3 million and Core Deposit Intangibles were $2.7 million. Accordingly, the Company's financial statements reflect the impact of the merger from the date of acquisition, which should be considered when comparing comparable periods for net income in the third quarter of 2013 and nine months ended September 30, 2013. Merger related costs totaled $744,000 and $2.8 million, respectively, for the third quarter of 2013 and first nine months of 2013.

Earnings

Net Interest Income

Net interest income for the third quarter of 2013 was $27.5 million, as compared to $23.7 million for the same period in 2012. Annualized Net Interest Margin ("NIM") continues to be stable. In the third quarter of 2013, NIM was 3.68%, which equaled the NIM for the second quarter of 2013, and was two basis points higher than 3.66% in the third quarter of 2012. The annualized yield on interest-earning assets declined 25 basis points to 4.00% in the third quarter of 2013 compared to 4.25% for the same period last year. The annualized cost of interest-bearing liabilities decreased 32 basis points from 0.74% in the third quarter of 2012 to 0.42% in the third quarter of 2013, reflecting the management of deposit and borrowing rates.

Year-to-date, net interest income at $76.6 million compared to the $71.3 million reported for the first nine months of 2012. Annualized Net Interest Margin at 3.69% compared to 3.70% for the same period last year. The Company's annualized yield on earning assets decreased from 4.34% for the first nine months of 2012, to 4.05% for the same period this year, while the cost of interest bearing liabilities decreased from 0.79% to 0.46%.

Noninterest Income

Noninterest income totaled $4.6 million for the third quarter of 2013, which equaled the total reported for the same period last year. Service charges on deposit accounts totaling $2.8 million were 3% higher than the total reported for the same period last year, while commissions and fees at $1.1 million were equivalent to last year's third quarter total.

Noninterest income, exclusive of gains on sales of investment securities, totaled $15.0 million for the first nine months of 2013, as compared to $13.2 million for the comparable period last year. Gains on investment securities totaled $506,000 for the first nine months of 2013 as compared to $273,000 for the first nine months of 2012. As previously reported in the second quarter of 2013, the Company acquired and extinguished Lakeland Bancorp Capital Trust I trust preferred securities having a notional value of $9.0 million, recording a $1.2 million gain on this transaction. Exclusive of this transaction and the gains on investment securities mentioned above, noninterest income for the first nine months of 2013 at $13.8 million was $591,000, or 4%, higher than the same period last year. Service charges on deposit accounts at $8.1 million and commission and fees at $3.5 million were 2% and 3% higher, respectively, than last year's total. Other income at $1.2 million increased by $358,000 primarily due to an increase in gains on sales of mortgage loans.

Noninterest Expense

Noninterest expense for the third quarter of 2013 was $20.4 million, as compared to $17.0 million for the same period last year. Included in non-interest expenses in the third quarter of 2013 were $744,000 in merger related expenses. Salary and benefit expense at $11.0 million increased by $1.4 million in the third quarter this year as compared to the same period last year. This increase was primarily due to increased salaries and benefit costs as a result of increased staffing levels from the six new Somerset Hills' branches, as well as the retention of some administrative personnel from the Somerset Hills acquisition. Occupancy, furniture and equipment expense at $3.6 million increased by $630,000, or 21%, primarily due increased costs at the six new branch locations acquired in the Somerset Hills acquisition, a new branch opening in the fourth quarter of 2012, as well as increases in service agreement and depreciation costs resulting from the updating of Lakeland Bank's computer systems. Legal expenses at $406,000 increased by $271,000 compared to the same period last year. In the third quarter of 2012, the Company recovered $150,000 of previously expensed legal fees. Other expenses at $3.0 million increased by 14% from the total reported in the same period last year. The efficiency ratio for the third quarter of 2013 was 60.0%.

For the first nine months of 2013, non-interest expenses, exclusive of $2.8 million in merger related expenses and $526,000 in prepayment fees on long-term debt, totaled $54.7 million, compared to $49.7 million in 2012. Salary and benefit costs at $31.1 million increased 9%, reflecting the increased staffing levels due to the Somerset Hills acquisition, while occupancy, furniture and equipment expenses at $10.4 million increased by $1.9 million, primarily for the same reasons outlined in the three month analysis, as well as expenses incurred in 2013 resulting from the opening of a new Training and Operations Center in mid-2012. Marketing expense at $1.4 million decreased by 13%, while other expenses at $8.0 million increased by 10%.   

Financial Condition

At September 30, 2013, total assets were $3.30 billion, an increase of $380.6 million from December 31, 2012, or 13%. This includes Somerset Hills' assets of $355.9 million at the time of acquisition. Total loans were $2.43 billion, an increase of $281.5 million from $2.15 billion at year-end 2012. Somerset Hills' loans, including mortgages held for sale, totaled $246.4 million at the time of acquisition. In the third quarter of 2013, total loans decreased by $18.9 million, primarily in the commercial and industrial loan category. Total deposits were $2.71 billion, an increase of $337.5 million from December 31, 2012. Somerset Hills' deposits totaled $311.8 million at the time of acquisition. In the third quarter of 2013, total deposits increased by $35.6 million. Noninterest bearing demand deposits at $623.6 million increased by $22.7 million, or 4%, from June 30, 2013.

Asset Quality

In the third quarter of 2013, the Company continued to improve its asset quality metrics. Non-performing assets totaled $18.7 million (0.57% of total assets) at September 30, 2013 compared to $20.1 million (0.62% of total assets) at June 30, 2013, and $28.5 million (0.98% of total assets) at December 31, 2012. In the third quarter of 2013, the provision for loan and lease losses totaled $1.9 million, a decrease of $1.5 million, or 44%, from $3.4 million reported in the third quarter of 2012. On a year-to-date basis, the provision for loan and lease losses at $7.7 million was $4.1 million, or 35%, lower than last year's total. The Allowance for Loan and Lease Losses totaled $29.8 million at September 30, 2013 and represented 1.23% of total loans.  In the third quarter of 2013, the Company had net charge offs totaling $1.7 million. For the first nine months of 2013, the Company had net charge-offs of $6.8 million, or 0.40% of average loans, as compared to $11.5 million for the same period last year.

Capital

At September 30, 2013, stockholders' equity was $347.5 million and book value per common share was $9.70. As of September 30, 2013, the Company's leverage ratio was 8.84%. Tier I and total risk based capital ratios were 11.64% and 13.27%, respectively. The Tangible Common Equity ratio was 7.36%, an increase from 6.84% reported at December 31, 2012. 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, competition and the failure to realize anticipated efficiencies and synergies of the merger between Lakeland Bancorp, Inc. and Somerset Hills Bancorp. 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 $3.3 billion in total assets with 52 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 September 30, Nine months Ended September 30,
         
  2013 2012 2013 2012
  (Dollars in thousands except per share amounts)
INCOME STATEMENT        
Net Interest Income  $ 27,487  $ 23,655  $ 76,569  $ 71,349
Provision for Loan and Lease Losses  (1,879)  (3,350)  (7,656)  (11,783)
Noninterest Income (excluding investment securities gains/losses)  4,645  4,640  13,786  13,195
Gains on investment securities  --   --   506  273
Gain on debt extinguishment  --   --   1,197  -- 
Long-term debt prepayment fee  --   --  (526)  -- 
Merger related expenses  (744)  --   (2,827)  -- 
Noninterest Expense  (19,663)  (16,968)  (54,674)  (49,713)
Pretax Income  9,846  7,977  26,375  23,321
Tax Expense  (3,229)  (2,488)  (8,747)  (7,408)
Net Income   $ 6,617  $ 5,489  $ 17,628  $ 15,913
Dividends on Preferred Stock and Discount Accretion  --   --   --   (620)
Net Income Available to Common Stockholders  $ 6,617  $ 5,489  $ 17,628  $ 15,293
         
         
Basic Earnings Per Common Share   $ 0.18  $ 0.20  $ 0.54  $ 0.56
Diluted Earnings Per Common Share   $ 0.18  $ 0.20  $ 0.54  $ 0.56
Dividends per Common Share   $ 0.07  $ 0.06  $ 0.21  $ 0.18
Weighted Average Shares - Basic   35,512  27,550  32,223  26,998
Weighted Average Shares - Diluted   35,736  27,642  32,354  27,065
         
SELECTED OPERATING RATIOS        
Annualized Return on Average Assets 0.81% 0.77% 0.78% 0.75%
Annualized Return on Average Common Equity 7.64% 8.48% 7.59% 8.55%
Annualized Return on Average Tangible Common Equity (2) 11.39% 12.81% 11.12% 13.16%
Annualized Return on Interest Earning Assets 4.00% 4.25% 4.05% 4.34%
Annualized Cost of Interest Bearing Liabilities 0.42% 0.74% 0.46% 0.79%
Annualized Net Interest Spread 3.58% 3.51% 3.58% 3.55%
Annualized Net Interest Margin 3.68% 3.66% 3.69% 3.70%
Efficiency ratio (2) 59.98% 58.91% 59.85% 57.93%
Stockholders' equity to total assets     10.53% 9.71%
Book value per common share (1)      $ 9.70  $ 9.35
Tangible book value per common share (1) (2)      $ 6.55  $ 6.41
Tangible common equity to tangible assets (1) (2)     7.36% 6.87%
         
ASSET QUALITY RATIOS     9/30/2013 12/31/2012
Ratio of allowance for loan and lease losses to total loans      1.23% 1.35%
Non-performing loans to total loans      0.68% 1.30%
Non-performing assets to total assets      0.57% 0.98%
Annualized net charge-offs to average loans      0.40% 0.54%
         
SELECTED BALANCE SHEET DATA AT PERIOD-END     9/30/2013 12/31/2012
Loans and Leases      $ 2,428,750  $ 2,147,207
Allowance for Loan and Lease Losses       (29,757)  (28,931)
Investment Securities      521,229  496,017
Total Assets      3,299,300  2,918,703
Total Deposits       2,708,454  2,370,997
Short-Term Borrowings      110,525  117,289
Other Borrowings      117,548  136,548
Stockholders' Equity       347,525  280,867
         
SELECTED AVERAGE BALANCE SHEET DATA  For the Three Months Ended  For the Nine Months Ended
  9/30/2013 9/30/2012 9/30/2013 9/30/2012
Loans and Leases, net  $ 2,435,658  $ 2,062,928  $ 2,279,972  $ 2,063,609
Investment Securities  506,263  501,862  484,146  508,254
Interest-Earning Assets   2,987,408  2,598,061  2,799,696  2,599,163
Total Assets   3,243,997  2,827,885  3,039,166  2,818,326
Non Interest-Bearing Demand Deposits  620,499  477,311  555,663  466,747
Savings Deposits  374,141  350,135  367,245  346,829
Interest-Bearing Transaction Accounts  1,403,227  1,169,953  1,305,173  1,149,501
Time Deposits  322,371  324,355  311,994  335,947
Total Deposits   2,720,238  2,321,754  2,540,075  2,299,024
Short-Term Borrowings  47,702  50,180  48,658  63,402
Other Borrowings  117,559  184,023  125,367  190,992
Total Interest-Bearing Liabilities  2,265,000  2,078,647  2,158,437  2,086,671
Stockholders' Equity  343,482  257,557  310,632  251,185
Common Stockholders' Equity  343,482  257,557  310,632  248,622
         
(1) Excludes preferred stock        
(2) See supplemental information - non-GAAP financial measures        
 
Lakeland Bancorp, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
         
  Three Months Ended September 30,  Nine Months Ended September 30,  
  2013 2012 2013 2012
(dollars in thousands, except per share amounts)        
INTEREST INCOME        
Loans and fees $27,350 $24,929 $77,122 $75,659
Federal funds sold and interest bearing deposits with banks  27  17 57 29
Taxable investment securities and other  2,017  2,121 5,544 6,668
Tax exempt investment securities  461  428 1,331 1,371
TOTAL INTEREST INCOME  29,855  27,495 84,054 83,727
INTEREST EXPENSE        
Deposits  1,518  2,026 4,740 6,421
Federal funds purchased and securities sold under agreements to repurchase  14  12 36 68
Other borrowings  836  1,802 2,709 5,889
TOTAL INTEREST EXPENSE  2,368  3,840 7,485 12,378
NET INTEREST INCOME  27,487  23,655 76,569 71,349
Provision for loan and lease losses   1,879  3,350 7,656 11,783
NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES  25,608  20,305 68,913 59,566
NONINTEREST INCOME        
Service charges on deposit accounts  2,838  2,757 8,052 7,914
Commissions and fees  1,139  1,162 3,495 3,401
Gains on sales of investment securities  --   --  506 273
Gain on debt extinguishment  --   --  1,197  --
Income on bank owned life insurance  383  357 1,036 1,035
Other income  285  364 1,203 845
TOTAL NONINTEREST INCOME  4,645  4,640 15,489 13,468
NONINTEREST EXPENSE        
Salaries and employee benefits  11,019  9,578 31,105 28,578
Net occupancy expense  2,060  1,807 5,921 5,131
Furniture and equipment   1,582  1,205 4,492 3,427
Stationery, supplies and postage  348  388 1,086 1,079
Marketing expense  715  718 1,438 1,646
FDIC insurance expense  436  519 1,505 1,620
Legal expense  406  135 934 880
Other real estate owned and other repossessed asset expense (2)  13 15 89
Long-term debt prepayment fee  --   --  526  -- 
Merger related expenses  744  --  2,827  -- 
Core deposit intangible amortization  123  --  164  -- 
Other expenses  2,976  2,605 8,014 7,263
TOTAL NONINTEREST EXPENSE  20,407  16,968 58,027 49,713
INCOME BEFORE PROVISION FOR INCOME TAXES  9,846  7,977 26,375 23,321
Provision for income taxes  3,229  2,488 8,747 7,408
NET INCOME $6,617 $5,489 $17,628 $15,913
Dividends on Preferred Stock and Discount Accretion  --   --   --   620
Net Income Available to Common Stockholders $6,617 $5,489 $17,628 $15,293
EARNINGS PER COMMON SHARE        
Basic $0.18 $0.20 $0.54 $0.56
Diluted $0.18 $0.20 $0.54 $0.56
DIVIDENDS PER COMMON SHARE $0.07 $0.06 $0.21 $0.18
 
Lakeland Bancorp, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
     
ASSETS September 30,
2013
December 31,
2012
(dollars in thousands) (unaudited)  
Cash and due from banks $130,035 $100,926
Federal funds sold and interest-bearing deposits due from banks 15,219 6,619
Total cash and cash equivalents  145,254  107,545
     
Investment securities available for sale, at fair value  418,562  393,710
Investment securities held to maturity; fair value of $96,196 in 2013 and $99,784 in 2012  96,702  96,925
Federal Home Loan Bank Stock, at cost  5,965  5,382
Loans held for sale  901  -- 
Loans:    
Commercial, secured by real estate  1,398,435  1,171,409
Commercial, industrial and other  214,877  216,129
Leases  37,845  26,781
Residential mortgages  437,788  423,262
Consumer and home equity  339,805  309,626
Total loans  2,428,750  2,147,207
Net deferred costs (1,066)  (364)
Allowance for loan and lease losses (29,757) (28,931)
Net loans   2,397,927  2,117,912
Premises and equipment, net   37,351  33,280
Accrued interest receivable  8,173  7,643
Goodwill   110,381  87,111
Other identifiable intangible assets  2,548  -- 
Bank owned life insurance  55,534  46,143
Other assets   20,002  23,052
TOTAL ASSETS $3,299,300 $2,918,703
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
LIABILITIES:    
Deposits:    
Noninterest bearing $623,562 $498,066
Savings and interest-bearing transaction accounts  1,770,299  1,569,139
Time deposits under $100,000  190,996  188,278
Time deposits $100,000 and over  123,597  115,514
Total deposits  2,708,454  2,370,997
Federal funds purchased and securities sold under agreements to repurchase  110,525  117,289
Other borrowings  75,000  85,000
Subordinated debentures  42,548  51,548
Other liabilities   15,248  13,002
TOTAL LIABILITIES  2,951,775  2,637,836
     
STOCKHOLDERS' EQUITY    
Common stock, no par value; authorized 70,000,000 shares; issued 35,823,147 shares at September 30, 2013 and 29,941,967 shares at December 31, 2012  362,549  303,794
Accumulated Deficit (13,192) (24,145)
Treasury shares, at cost, 0 shares at September 30, 2013 and 216,077 shares at December 31, 2012  --  (2,718)
Accumulated other comprehensive (loss) gain (1,832)  3,936
TOTAL STOCKHOLDERS' EQUITY  347,525  280,867
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $3,299,300 $2,918,703
 
Lakeland Bancorp, Inc.
Financial Highlights
(unaudited)
           
  For the Quarter Ended
(dollars in thousands, except per share data) Sept 30,
2013
Jun 30,
2013
Mar 31, 
2013
Dec 31,
2012
Sept 30,
2012
INCOME STATEMENT (unaudited)
Net Interest Income  $ 27,487  $ 25,146  $ 23,936  $ 24,164  $ 23,655
Provision for Loan and Lease Losses  (1,879)  (2,594)  (3,183)  (3,124)  (3,350)
Noninterest Income (excluding investment securities gains)  4,645  4,595  4,546  4,661  4,640
Gains on investment securities  --   1  505  776  -- 
Gain on debt extinguishment  --   1,197  --   --   -- 
Long-term debt prepayment fee  --   --   (526)  (782)  -- 
Merger related expenses  (744)  (1,452)  (631)  --   -- 
Core deposit intangible amortization  (123)  (41)  --   --   -- 
Noninterest Expense, excluding long-term debt prepayment fee  (19,540)  (17,900)  (17,070)  (17,178)  (16,968)
Pretax Income  9,846  8,952  7,577  8,517  7,977
Tax Expense  (3,229)  (3,049)  (2,469)  (2,688)  (2,488)
Net Income Available to Common Stockholders  $ 6,617  $ 5,903  $ 5,108  $ 5,829  $ 5,489
           
           
Basic Earnings Per Common Share   $ 0.18  $ 0.19  $ 0.17  $ 0.20  $ 0.20
Diluted Earnings Per Common Share   $ 0.18  $ 0.19  $ 0.17  $ 0.20  $ 0.20
Dividends Per Common Share   $ 0.07  $ 0.07  $ 0.07  $ 0.07  $ 0.06
Weighted Average Shares - Basic   35,512  31,527  29,563  29,467  27,550
Weighted Average Shares - Diluted   35,736  31,618  29,625  29,566  27,642
           
SELECTED OPERATING RATIOS          
Annualized Return on Average Assets  0.81% 0.79% 0.72% 0.81% 0.77%
Annualized Return on Average Common Equity  7.64% 7.76% 7.33% 8.30% 8.48%
Annualized Return on Tangible Common Equity (1) 11.39% 11.31% 10.59% 12.06% 12.81%
Annualized Net Interest Margin 3.68% 3.68% 3.71% 3.67% 3.66%
Efficiency ratio (1) 59.98% 59.70% 59.85% 59.49% 58.91%
Common stockholders' equity to total assets 10.53% 10.46% 9.76% 9.62% 9.71%
Tangible common equity to tangible assets (1) 7.36% 7.24% 6.98% 6.84% 6.87%
Tier 1 risk-based ratio 11.64% 11.53% 11.60% 11.52% 12.24%
Total risk-based ratio 13.27% 12.78% 12.85% 12.77% 14.14%
Tier 1 leverage ratio 8.84% 9.43% 8.77% 8.62% 9.05%
Book value per common share   $ 9.70  $ 9.55  $ 9.51  $ 9.45  $ 9.35
Tangible book value per common share (1)   $ 6.55  $ 6.39  $ 6.59  $ 6.52  $ 6.41
           
(1) See Supplemental Information - Non GAAP financial measures          
 
Lakeland Bancorp, Inc.
Financial Highlights
(unaudited)
           
  For the Quarter Ended
(dollars in thousands) Sept 30,
2013
Jun 30,
2013
Mar 31,
2013
Dec 31,
2012
Sept 30,
2012
  (unaudited)
SELECTED BALANCE SHEET DATA AT PERIOD-END          
Loans and Leases  $ 2,428,750  $ 2,447,644  $ 2,171,456  $ 2,147,207  $ 2,064,913
Allowance for Loan and Lease Losses   (29,757)  (29,626)  (29,623)  (28,931)  (28,669)
Investment Securities  521,229  500,204  472,479  496,017  521,294
Total Assets  3,299,300  3,262,411  2,907,969  2,918,703  2,859,647
Total Deposits   2,708,454  2,672,859  2,388,675  2,370,997  2,341,108
Short-Term Borrowings  110,525  116,627  94,315  117,289  54,581
Other Borrowings  117,548  117,548  126,548  136,548  172,322
Stockholders' Equity   347,525  341,109  283,877  280,867  277,544
           
Loans and Leases          
Commercial real estate  $ 1,398,435  $ 1,394,698  $ 1,214,467  $ 1,171,409  $ 1,107,907
Commercial, industrial and other  214,877  234,022  211,078  216,129  201,308
Leases  37,845  33,330  28,190  26,781  26,548
Residential mortgages  437,788  445,584  412,006  423,262  419,685
Consumer and Home Equity  339,805  340,010  305,715  309,626  309,465
Total loans  $ 2,428,750  $ 2,447,644  $ 2,171,456  $ 2,147,207  $ 2,064,913
           
Deposits          
Noninterest bearing  $ 623,562  $ 600,868  $ 521,045  $ 498,066  $ 485,256
Savings and interest-bearing transaction accounts  1,770,299  1,739,943  1,566,421  1,569,139  1,535,422
Time deposits under $100,000  190,996  194,666  184,356  188,278  196,939
Time deposits $100,000 and over  123,597  137,382  116,853  115,514  123,491
Total deposits  $ 2,708,454  $ 2,672,859  $ 2,388,675  $ 2,370,997  $ 2,341,108
           
SELECTED AVERAGE BALANCE SHEET DATA          
Loans and Leases, net  $ 2,435,658  $ 2,264,713  $ 2,136,254  $ 2,103,204  $ 2,062,928
Investment Securities  506,263  470,018  475,823  499,455  501,862
Interest-Earning Assets   2,987,408  2,765,229  2,642,662  2,642,185  2,598,061
Total Assets   3,243,997  3,001,360  2,868,011  2,876,470  2,827,885
Non Interest-Bearing Demand Deposits  620,499  542,976  502,214  497,906  477,311
Savings Deposits  374,141  369,703  357,709  350,557  350,135
Interest-Bearing Transaction Accounts  1,403,227  1,284,233  1,226,112  1,236,294  1,169,953
Time Deposits  322,371  311,230  302,159  309,724  324,355
Total Deposits   2,720,238  2,508,142  2,388,194  2,394,481  2,321,754
Short-Term Borrowings  47,702  48,652  49,641  48,441  50,180
Other Borrowings  117,559  125,268  133,449  139,996  184,023
Total Interest-Bearing Liabilities  2,265,000  2,139,086  2,069,069  2,085,011  2,078,647
Stockholders' Equity  343,482  304,950  282,796  279,422  257,557
Common Stockholders' Equity  343,482  304,950  282,796  279,422  257,557
 
Lakeland Bancorp, Inc.
Financial Highlights
(unaudited)
           
  For the Quarter Ended
(dollars in thousands) Sept 30,
2013
Jun 30,
2013
Mar 31,
2013
Dec 31,
2012
Sept 30,
2012
  (unaudited)
AVERAGE ANNUALIZED YIELDS (taxable equivalent basis)          
Assets:          
Loans and leases 4.45% 4.49% 4.63% 4.70% 4.81%
Taxable investment securities and other 1.87% 1.82% 1.70% 1.78% 1.96%
Tax-exempt securities 3.74% 3.67% 3.71% 3.86% 3.84%
Federal funds sold and interest-bearing cash accounts 0.24% 0.22% 0.17% 0.22% 0.20%
Total interest-earning assets 4.00% 4.04% 4.11% 4.14% 4.25%
Liabilities:          
Savings accounts 0.05% 0.06% 0.07% 0.10% 0.10%
Interest-bearing transaction accounts 0.27% 0.30% 0.32% 0.36% 0.40%
Time deposits 0.64% 0.70% 0.81% 0.91% 0.94%
Borrowings 2.06% 2.13% 2.12% 2.43% 3.10%
Total interest-bearing liabilities 0.42% 0.47% 0.51% 0.59% 0.74%
Net interest spread (taxable equivalent basis) 3.58% 3.58% 3.60% 3.55% 3.51%
Annualized Net Interest Margin (taxable equivalent basis) 3.68% 3.68% 3.71% 3.67% 3.66%
Annualized Cost of Deposits 0.22% 0.25% 0.28% 0.32% 0.35%
           
ASSET QUALITY DATA          
Allowance for Loan and Lease Losses          
Balance at beginning of period  $ 29,626  $ 29,623  $ 28,931  $ 28,669  $ 28,543
Provision for loan losses  1,879  2,594  3,183  3,124  3,350
Net Charge-offs  (1,748)  (2,591)  (2,491)  (2,862)  (3,224)
Balance at end of period  $ 29,757  $ 29,626  $ 29,623  $ 28,931  $ 28,669
           
Net Loan Charge-offs (Recoveries)          
Commercial real estate  $ 749  $ 1,778  $ 1,350  $ 1,945  $ 1,420
Commercial, industrial and other  367  450  147  35  258
Leases  21  42  24  264  291
Home equity and consumer  494  196  406  289  334
Real estate - mortgage  117  125  564  329  921
Net charge-offs  $ 1,748  $ 2,591  $ 2,491  $ 2,862  $ 3,224
           
Nonperforming Assets          
Commercial real estate  $ 7,506  $ 9,209  $ 12,522  $ 14,542  $ 14,211
Commercial, industrial and other  184  797  1,203  1,476  1,533
Leases  --   --   --   32  294
Home equity and consumer  2,819  2,921  2,838  3,197  3,104
Real estate - mortgage  5,996  6,840  8,481  8,733  9,235
Total non-accruing loans  16,505  19,767  25,044  27,980  28,377
Property acquired through foreclosure or repossession  2,154  337  715  529  775
Total non-performing assets  $ 18,659  $ 20,104  $ 25,759  $ 28,509  $ 29,152
           
Loans past due 90 days or more  $ 2,484  $ 1,620  $ 1,752  $ 1,437  $ 1,828
Loans restructured and still accruing  $ 13,241  $ 12,538  $ 9,012  $ 7,336  $ 10,937
           
Ratio of allowance for loan and lease losses to total loans  1.23% 1.21% 1.36% 1.35% 1.39%
Non-performing loans to total loans  0.68% 0.81% 1.15% 1.30% 1.37%
Non-performing assets to total assets  0.57% 0.62% 0.89% 0.98% 1.02%
Annualized net charge-offs to average loans  0.29% 0.46% 0.47% 0.54% 0.63%
 
Lakeland Bancorp, Inc.
Supplemental Information - Non-GAAP Financial Measures
(unaudited)
           
  At or for the Quarter Ended,
(dollars in thousands, except per share amounts) Sept 30,
2013
Jun 30,
2013
Mar 31,
2013
Dec 31,
2012
Sept 30,
2012
Calculation of tangible book value per common share          
Total common stockholders' equity at end of period - GAAP  $ 347,525  $ 341,109  $ 283,877  $ 280,867  $ 277,544
Less:          
Goodwill  110,381  110,381  87,111  87,111  87,111
Other identifiable intangible assets, net  2,548  2,671  --   --   -- 
Total tangible common stockholders' equity at end of period - Non- GAAP  $ 234,596  $ 228,057  $ 196,766  $ 193,756  $ 190,433
           
Shares outstanding at end of period   35,823  35,701  29,859  29,726  29,691
           
Book value per share - GAAP   $ 9.70  $ 9.55  $ 9.51  $ 9.45  $ 9.35
           
Tangible book value per share - Non-GAAP  $ 6.55  $ 6.39  $ 6.59  $ 6.52  $ 6.41
           
           
Calculation of tangible common equity to tangible assets          
Total tangible common stockholders' equity at end of period - Non- GAAP  $ 234,596  $ 228,057  $ 196,766  $ 193,756  $ 190,433
           
Total assets at end of period  $ 3,299,300  $ 3,262,411  $ 2,907,969  $ 2,918,703  $ 2,859,647
Less:          
Goodwill  110,381  110,381  87,111  87,111  87,111
Other identifiable intangible assets, net  2,548  2,671  --   --   -- 
Total tangible assets at end of period - Non-GAAP  $ 3,186,371  $ 3,149,359  $ 2,820,858  $ 2,831,592  $ 2,772,536
           
Common equity to assets - GAAP 10.53% 10.46% 9.76% 9.62% 9.71%
           
Tangible common equity to tangible assets - Non-GAAP 7.36% 7.24% 6.98% 6.84% 6.87%
           
Calculation of return on average tangible common equity          
Net income - GAAP  $ 6,617  $ 5,903  $ 5,108  $ 5,829  $ 5,489
           
Total average common stockholders' equity  343,482  304,950  282,796  279,422  257,557
Less:          
Average goodwill  110,381  94,783  87,111  87,111  87,111
Average other identifiable intangible assets, net  2,624  894  --   --   -- 
Total average tangible common stockholders' equity - Non - GAAP  $ 230,477  $ 209,273  $ 195,685  $ 192,311  $ 170,446
           
Return on average common stockholders' equity - GAAP 7.64% 7.76% 7.33% 8.30% 8.48%
           
Return on average tangible common stockholders' equity - Non-GAAP 11.39% 11.31% 10.59% 12.06% 12.81%
           
Calculation of efficiency ratio          
Total non-interest expense  $ 20,407  $ 19,393  $ 18,227  $ 17,960  $ 16,968
Less:          
Amortization of core deposit intangibles  (123)  (41)  --   --   -- 
Other real estate owned and other repossessed asset (expense) income  2  2  (19)  (10)  (13)
Long-term debt prepayment fee  --   --   (526)  (782)  -- 
Merger related expenses  (744)  (1,452)  (631)  --  --
Provision for unfunded lending commitments, net  (121)  (6)  135  124  (150)
Non-interest expense, as adjusted  $ 19,421  $ 17,896  $ 17,186  $ 17,292  $ 16,805
           
Net interest income  $ 27,487  $ 25,146  $ 23,936  $ 24,164  $ 23,655
Total noninterest income  4,645  5,793  5,051  5,437  4,640
Total revenue  32,132  30,939  28,987  29,601  28,295
Plus: Tax-equivalent adjustment on municipal securities  248  237  232  242  230
Less:          
Gains on debt extinguishment  --   (1,197)  --   --   -- 
Gains on sales investment securities  --   (1)  (505)  (776)  -- 
Total revenue, as adjusted  $ 32,380  $ 29,978  $ 28,714  $ 29,067  $ 28,525
           
Efficiency ratio - Non-GAAP 59.98% 59.70% 59.85% 59.49% 58.91%
 
Lakeland Bancorp, Inc.
Supplemental Information - Non-GAAP Financial Measures
(unaudited)
     
  For the Nine Months Ended,
(dollars in thousands, except per share amounts) September 30
2013
September 30
2012
Calculation of return on average tangible common equity    
Net income - GAAP  $ 17,628  $ 15,913
     
Total average common stockholders' equity  $ 310,632  $ 248,622
Less:    
Average goodwill  97,510  87,111
Average other identifiable intangible assets, net  1,182  -- 
Total average tangible common stockholders' equity - Non GAAP  $ 211,940  $ 161,511
     
Return on average common stockholders' equity - GAAP 7.59% 8.55%
     
Return on average tangible common stockholders' equity - Non-GAAP 11.12% 13.16%
     
Calculation of efficiency ratio    
Total non-interest expense  $ 58,027  $ 49,713
Less:    
Amortization of core deposit intangibles  (164)  -- 
Other real estate owned and other repossessed asset expense  (15)  (89)
Long-term debt prepayment fee  (526)  -- 
Merger related expenses  (2,827)  -- 
Provision for unfunded lending commitments  8  (217)
Non-interest expense, as adjusted  $ 54,503  $ 49,407
     
Net interest income  $ 76,569  $ 71,349
Noninterest income  15,489  13,468
Total revenue  92,058  84,817
Plus: Tax-equivalent adjustment on municipal securities  717  738
Less:    
Gains on investment securities  (506)  (273)
Gains on extinguishment of debt  (1,197)  -- 
Total revenue, as adjusted  $ 91,072  $ 85,282
     
Efficiency ratio - Non - GAAP 59.85% 57.93%
CONTACT: Thomas J. Shara
President & CEO
Joseph F. Hurley
EVP & CFO
973-697-2000
Source: Lakeland Bancorp, Inc.