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We are pleased to report the following positive developments in
the first quarter of 2013:
■ This January, we announced that we had entered into an
agreement to acquire Somerset Hills Bancorp. The merger will
expand our footprint in Morris County, and provide access into
the contiguous counties of Somerset and Union. Somerset Hills is
a quality institution whose culture, product offerings and strong
community ties are similar to Lakeland Bank’s core values.
■ Upon the completion of the merger, we will welcome Stewart McClure, Jr. currently
the President, Chief Executive Officer and Chief Operating Officer of Somerset Hills Bancorp
and Somerset Hills Bank, who will serve along with Robert Vandenbergh as Regional President
of Lakeland Bank. Additionally, Messrs. Edward B. Deutsch and Thomas J. Marino,
currently the Chairman of the Board and a director of Somerset Hills Bancorp, respectively,
will be appointed to the Boards of Directors of Lakeland Bancorp and Lakeland Bank.
We also would like to share the following positive financial results for the first quarter of 2013:
■ Net Income Available to Common Shareholders was $5.1 million, or $0.17 per diluted share,
as compared to the $4.4 million, or $0.16 per diluted share, reported for the same period
last year. First quarter earnings included $631,000 in expenses related to the proposed
merger with Somerset Hills Bancorp. Exclusive of these expenses, EPS was $0.19 per
common share, a 19% increase over the EPS for the same period last year.
■ We reported strong growth in both loans and non-interest bearing demand deposits.
Loans totaling $2.17 billion at March 31, 2013, increased by $24.2 million, including a 4%
increase in commercial loans secured by real estate. Noninterest bearing demand deposits
at $521.0 million increased by $23.0 million, or 5%, from year-end 2012, and represented 22%
of total deposits at March 31, 2013.
■ Non-performing assets at March 31, 2013, totaling $25.8 million were 10% lower than
year-end 2012 and 40% below the total for the first quarter of 2012.
■ Net Interest Margin was 3.71%, a four-basis-point improvement from the fourth quarter of 2012.
The yield on interest-earning assets decreased by three basis points from the fourth quarter
of 2012, while the yield on average interest-bearing liabilities decreased by eight basis points, as
we repaid $10.0 million in long-term debt at a rate of 2.90%.
■ The Board of Directors declared a quarterly cash dividend of $0.07 per common share, payable
on May 15, 2013, to holders of record as of the close of business on April 30, 2013.
Thanks, as always, to our team of employees, directors, shareholders and customers
for their continued support.
Very truly yours,
Thomas J. Shara
President and Chief Executive Officer |