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Lakeland Bancorp Announces Record 2019 Earnings

/EIN News/ -- OAK RIDGE, N.J., Jan. 24, 2020 (GLOBE NEWSWIRE) -- Lakeland Bancorp, Inc. (NASDAQ: LBAI) (the “Company”), the parent company of Lakeland Bank (“Lakeland”), reported net income of $18.7 million and earnings per diluted share ("EPS") of $0.37 for the three months ended December 31, 2019 compared to net income of $15.6 million and diluted EPS of $0.32 for the fourth quarter of 2018. For the fourth quarter of 2019, annualized return on average assets was 1.15%, annualized return on average common equity was 10.32% and annualized return on average tangible common equity was 13.29%.

For the year ended December 31, 2019, the Company reported net income of $70.7 million, an 11% increase compared to $63.4 million for the same period in 2018 resulting in annualized return on average assets of 1.12%, annualized return on average common equity of 10.14%, and annualized return on average tangible common equity of 13.16%. For 2019, the Company reported diluted EPS of $1.38, compared to diluted EPS of $1.32 for 2018. Excluding merger-related expenses pertaining to the Company’s January 2019 acquisition of Highlands Bancorp, Inc. ("Highlands") of $2.4 million, tax-effected, net income for the year ended December 31, 2019 was $73.0 million, or $1.43 per diluted share. Excluding merger-related expenses, annualized return on average assets was 1.16%, annualized return on average common equity was 10.48% and annualized return on average tangible common equity was 13.60%.

Thomas Shara, Lakeland Bancorp’s President and CEO commented, "2019 was another fantastic year for our Company, marking our 8th consecutive year of record earnings. Our strong loan and deposit growth enabled us to conclude 2019 on an extremely positive note. This success is the result of our associates’ hard work, commitment and passion for excellence.

Some of the 2019 highlights are

  • Total asset growth of 16% to $6.7 billion
     
  • Solid organic loan growth of 6%, including 4% in the 4th quarter
     
  • Consistent deposit generation of 6%, including 10% growth in non-interest bearing deposits
     
  • Seamless integration of Highlands State Bank acquisition
     
  • Forbes recognition as the Best-In-State Bank in New Jersey

To sustain our high performance and increase shareholder value, we have embarked on a digital strategy initiative, impacting all operational areas of the Bank.  Enhancing our digital capabilities will allow Lakeland to expand our market presence as a community bank, as well as compete long-term in a fast-paced digital marketplace.”

Net Interest Margin and Net Interest Income

Net interest margin for the fourth quarter of 2019 of 3.27% increased two basis points from the linked quarter and decreased two basis points compared to the fourth quarter of 2018, which was due primarily to an increase in the cost of interest bearing liabilities. Net interest margin for 2019 was 3.33% compared to 3.36% for the same period in 2018.

The yield on interest-earning assets for the fourth quarter of 2019 was 4.21% compared to 4.20% for the fourth quarter of 2018. The yield on interest-earning assets for 2019 was 4.36% compared to 4.12% for 2018. The year-to-date increase in yield on interest-earning assets, when compared to the prior year period, was a result of originating higher yielding loans, increased prepayment fees, additional accretion income on loans resulting from the Highlands acquisition and higher investment securities yields.

The cost of interest-bearing liabilities for the fourth quarter of 2019 was 1.26% compared to 1.41% for the linked quarter and 1.21% for the fourth quarter of 2018. The cost of interest-bearing liabilities for 2019 was 1.35% compared to 1.01% during the same period in 2018. The cost of interest-bearing transaction accounts, time deposits and borrowings have increased since 2018 largely driven by competitive pressures and higher market interest rates.

Net interest income increased to $49.5 million for the fourth quarter of 2019 compared to $44.2 million for the fourth quarter of 2018, due primarily to the growth of interest-earning assets and increases in loan yields, partially offset by an increase in average interest-bearing liabilities and higher interest rates on interest-bearing liabilities. Net interest income for 2019 was $196.0 million, as compared to $173.6 million for the same period in 2018 due to the same reasons as the quarterly comparison.

Noninterest Income

Noninterest income increased $2.4 million to $8.0 million for the fourth quarter of 2019 from $5.6 million for the fourth quarter of 2018. Other income increased $1.8 million compared to the fourth quarter of 2018 due primarily to an increase in swap income and gains resulting from payoffs of purchased credit impaired loans during the fourth quarter of 2019.

For 2019, noninterest income totaled $26.8 million compared to $22.3 million for the same period in 2018 as the Company recorded a $496,000 gain on equity securities in 2019 compared to losses of $583,000 during the same period in 2018. In addition, commissions and fees increased $688,000 compared to 2018 due primarily to an increase in investment services income and commercial loan fees, while service charges on deposit accounts increased $621,000 due primarily to deposit growth.  Income on bank owned life insurance decreased $516,000 compared to 2018 due primarily to the receipt of insurance proceeds of $421,000 in 2018.  Other income increased $2.3 million compared to 2018 due primarily to the same reasons discussed above in the quarterly comparison.

Noninterest Expense

Noninterest expense totaled $31.5 million for the fourth quarter of 2019 and increased $2.9 million compared to the fourth quarter of 2018 due primarily to salary and employee benefit expense which increased $1.9 million as a result of staff additions from the Highlands merger, normal merit increases and higher benefit costs.  Furniture and equipment increased $306,000 due primarily to an increase in service agreement expense compared to the fourth quarter of 2018, while marketing expense increased $238,000 due primarily to  the timing of marketing campaigns.  In the fourth quarter of 2019, no FDIC expense was recorded compared to $383,000 in the fourth quarter of 2018 due to assessment credits from the FDIC, resulting from the insurance fund reserve ratio exceeding the required level. Additionally, there were no merger-related expenses booked in the fourth quarter of 2019 compared to  $464,000 during the same period in 2018. Other expenses in 2019 were $811,000 greater than 2018 due primarily to increased donations, audit expense and loan-related expenses.

For 2019, noninterest expense totaled $126.8 million compared to $111.2 million for the same period in 2018. Excluding merger-related expenses of $3.2 million in 2019 and $464,000 in 2018, noninterest expense increased $12.9 million compared to 2018 primarily as a result of additional salary and benefit expenses, as well as Highlands expenses from the merger date in January 2019 through the system conversion date in April and increased data processing expenses. Net occupancy increased $874,000 during 2019 compared to 2018 due primarily to the addition of Highlands branches as well as the acceleration of rental expense on a leased branch slated to close. FDIC insurance expense decreased $1.2 million compared to 2018 due to the credits mentioned above. Other expenses increased $1.3 million compared to 2018 due primarily to increased consulting expense and donations.

Income Tax Expense

The effective tax rate for the fourth quarter of 2019 was 24.9% compared to 24.4% for the fourth quarter of 2018. The effective tax rate for 2019 was 24.8% compared to 21.0% for 2018.

Financial Condition

At December 31, 2019, total assets were $6.71 billion, an increase of $905.1 million, including $496.5 million from the Highlands acquisition compared to December 31, 2018. For the twelve months ended December 31, 2019, total loans grew $681.1 million, including $425.0 million from Highlands, to $5.14 billion and investment securities increased $97.4 million, including $24.5 million from Highlands, to $918.9 million. On the funding side, total deposits increased $673.1 million, including $409.6 million from Highlands, to $5.29 billion, while borrowings increased $92.6 million to $612.7 million. At December 31, 2019, total loans as a percent of total deposits was 97.1%.

Asset Quality

At December 31, 2019, non-performing assets increased to $21.7 million, 0.32% of total assets, compared to $13.0 million, 0.22% of total assets, at December 31, 2018. Non-accrual loans as a percent of total loans increased to 0.41% at December 31, 2019 compared to 0.27% at December 31, 2018. The allowance for loan losses increased to $40.0 million, 0.78% of total loans, at December 31, 2019, compared to $37.7 million, 0.84% of total loans, at December 31, 2018. The Company's allowance for loan losses excluding acquired loans would be 0.88%. In the fourth quarter of 2019, the Company had net recoveries of $262,000, or 0.02% of average loans, annualized, compared to net charge-offs of $196,000, or 0.02% of average loans, annualized, for the same period in 2018. Provision for loan losses for the fourth quarter of 2019 was $1.1 million compared to provision for loan losses of $591,000 in the fourth quarter of 2018.

Capital

At December 31, 2019, stockholders' equity was $725.3 million compared to $623.7 million at December 31, 2018, a 16% increase. Lakeland Bancorp remains above FDIC “well capitalized” standards, with a Tier 1 leverage ratio of 9.41% at December 31, 2019. The book value per common share and tangible book value per common share both increased 9% to $14.36 and $11.18, respectively, compared to $13.14 and $10.22 at December 31, 2018. On January 22, 2020, the Company declared a quarterly cash dividend of $0.125 per share to be paid on February 14, 2020, to shareholders of record as of February 4, 2020.

Forward-Looking Statements

The information disclosed in this document includes various forward-looking statements 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 and regulation affecting the financial services industry, government intervention in the U.S. financial system, changes in federal and state tax laws, 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, competition and failure to realize anticipated efficiencies and synergies from the merger of Highlands Bancorp, Inc. into Lakeland Bancorp and the merger of Highlands State Bank into Lakeland Bank. 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 Measures

Reported 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

Lakeland Bancorp, Inc. (NASDAQ:LBAI) has approximately $6.71 billion in total assets. Lakeland Bank, a wholly-owned subsidiary of Lakeland Bancorp, Inc., operates 52 branch offices throughout Bergen, Essex, Morris, Ocean, Passaic, Somerset, Sussex, and Union counties in New Jersey including one branch in Highland Mills, New York; five New Jersey regional commercial lending centers in Bernardsville, Jackson, Montville, Teaneck and Waldwick; and one New York commercial lending center 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. Shara
President & CEO

Thomas F. Splaine
EVP & CFO
973-697-2000


Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
               
  Three Months Ended
December 31,
  Twelve Months Ended
December 31,
(Dollars in thousands, except per share amounts) 2019   2018   2019   2018
INCOME STATEMENT              
Net interest income $ 49,548     $ 44,206     $ 196,034     $ 173,559  
Provision for loan losses (1,086 )   (591 )   (2,130 )   (4,413 )
Gains on sales of loans 375     299     1,660     1,329  
Gain (loss) on equity securities (29 )   (199 )   496     (583 )
Other noninterest income 7,638     5,528     24,640     21,564  
Merger-related expenses     (464 )   (3,178 )   (464 )
Other noninterest expense (31,523 )   (28,199 )   (123,578 )   (110,703 )
  Pretax income 24,923     20,580     93,944     80,289  
Provision for income taxes (6,208 )   (5,030 )   (23,272 )   (16,888 )
  Net income $ 18,715     $ 15,550     $ 70,672     $ 63,401  
               
Basic earnings per common share $ 0.37     $ 0.32     $ 1.39     $ 1.32  
Diluted earnings per common share $ 0.37     $ 0.32     $ 1.38     $ 1.32  
Dividends paid per common share $ 0.125     $ 0.115     $ 0.490     $ 0.445  
Weighted average shares - basic 50,566     47,605     50,477     47,578  
Weighted average shares - diluted 50,748     47,780     50,642     47,766  
               
SELECTED OPERATING RATIOS              
Annualized return on average assets 1.15 %   1.08 %   1.12 %   1.15 %
Annualized return on average common equity 10.32 %   10.05 %   10.14 %   10.59 %
Annualized return on average tangible common equity (1) 13.29 %   12.98 %   13.16 %   13.78 %
Annualized yield on interest-earning assets 4.21 %   4.20 %   4.36 %   4.12 %
Annualized cost of interest-bearing liabilities 1.26 %   1.21 %   1.35 %   1.01 %
Annualized net interest spread 2.96 %   2.99 %   3.00 %   3.11 %
Annualized net interest margin 3.27 %   3.29 %   3.33 %   3.36 %
Efficiency ratio (1) 54.20 %   56.18 %   54.83 %   56.09 %
Stockholders' equity to total assets         10.81 %   10.74 %
Book value per common share         $ 14.36     $ 13.14  
Tangible book value per common share (1)         $ 11.18     $ 10.22  
Tangible common equity to tangible assets (1)         8.62 %   8.57 %
               
ASSET QUALITY RATIOS         December 31,
2019
  December 31,
2018
Ratio of allowance for loan losses to total loans         0.78 %   0.84 %
Non-performing loans to total loans         0.41 %   0.27 %
Non-performing assets to total assets         0.32 %   0.22 %
Annualized net charge-offs (recoveries) to average loans         %   0.05 %
               
(1) See Supplemental Information - Non-GAAP Financial Measures            
               
               
               
Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
               
(Dollars in thousands)         December 31,
2019
  December 31,
2018
SELECTED BALANCE SHEET DATA AT PERIOD-END              
Loans         $ 5,137,823     $ 4,460,447  
Allowance for loan losses         40,003     37,688  
Investment securities         918,853     821,486  
Total assets         6,711,236     5,806,093  
Total deposits         5,293,779     4,620,670  
Short-term borrowings         328,658     233,905  
Other borrowings         284,036     286,145  
Stockholders' equity         725,263     623,739  
               
  Three Months Ended
December 31,
  Twelve Months Ended
December 31,
  2019   2018   2019   2018
SELECTED AVERAGE BALANCE SHEET DATA              
Loans $ 5,025,377     $ 4,393,382     $ 4,938,298     $ 4,283,401  
Investment securities 894,698     823,193     869,374     816,697  
Interest-earning assets 6,022,525     5,346,934     5,895,669     5,182,194  
Total assets 6,470,082     5,694,827     6,322,654     5,528,914  
Noninterest-bearing demand deposits 1,130,192     1,003,508     1,092,827     984,445  
Savings deposits 492,903     483,606     500,650     489,742  
Interest-bearing transaction accounts 2,814,831     2,446,325     2,653,404     2,301,065  
Time deposits 873,924     769,129     922,412     778,180  
Total deposits 5,311,850     4,702,568     5,169,293     4,553,432  
Short-term borrowings 67,097     50,196     95,035     53,775  
Other borrowings 284,049     288,126     290,330     286,639  
Total interest-bearing liabilities 4,532,804     4,037,382     4,461,831     3,909,401  
Stockholders' equity 719,292     613,583     697,037     598,527  
               


Lakeland Bancorp, Inc.
Consolidated Statements of Income
(Unaudited)
           
  Three Months Ended
December 31,
  Twelve Months Ended
December 31,
(Dollars in thousands, except per share amounts) 2019 2018   2019 2018
           
INTEREST INCOME          
Loans and net deferred fees and costs $ 58,211   $ 50,759     $ 233,535   $ 193,143  
Federal funds sold and interest-bearing deposits with banks 423   715     1,720   1,559  
Taxable investment securities and other 4,857   4,550     19,722   16,710  
Tax exempt investment securities 345   410     1,510   1,709  
TOTAL INTEREST INCOME 63,836   56,434     256,487   213,121  
INTEREST EXPENSE          
Deposits 11,722   9,935     49,248   30,620  
Federal funds purchased and securities sold under agreements to repurchase 138   62     1,471   471  
Other borrowings 2,428   2,231     9,734   8,471  
TOTAL INTEREST EXPENSE 14,288   12,228     60,453   39,562  
NET INTEREST INCOME 49,548   44,206     196,034   173,559  
Provision for loan losses 1,086   591     2,130   4,413  
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 48,462   43,615     193,904   169,146  
NONINTEREST INCOME          
Service charges on deposit accounts 3,026   2,814     11,205   10,584  
Commissions and fees 1,548   1,446     6,230   5,542  
Income on bank owned life insurance 676   699     2,740   3,256  
Gain on equity securities (29 ) (199 )   496   (583 )
Gains on sales of loans 375   299     1,660   1,329  
Other income 2,388   569     4,465   2,182  
TOTAL NONINTEREST INCOME 7,984   5,628     26,796   22,310  
NONINTEREST EXPENSE          
Salaries and employee benefit expense 19,615   17,674     77,287   68,595  
Net occupancy expense 2,679   2,498     11,029   10,155  
Furniture and equipment expense 2,316   2,010     8,681   8,297  
FDIC insurance expense   383     431   1,608  
Stationary, supplies and postage expense 385   395     1,599   1,625  
Marketing expense 515   277     1,945   1,437  
Data processing expense 1,113   1,084     4,913   3,609  
Telecommunications expense 492   448     1,943   1,769  
ATM and debit card expense 604   571     2,377   2,195  
Core deposit intangible amortization 289   142     1,182   594  
Other real estate owned and other repossessed assets expense 33   46     256   158  
Merger-related expenses   464     3,178   464  
Other expenses 3,482   2,671     11,935   10,661  
TOTAL NONINTEREST EXPENSE 31,523   28,663     126,756   111,167  
INCOME BEFORE PROVISION FOR INCOME TAXES 24,923   20,580     93,944   80,289  
Provision for income taxes 6,208   5,030     23,272   16,888  
NET INCOME $ 18,715   $ 15,550     $ 70,672   $ 63,401  
EARNINGS PER COMMON SHARE:          
Basic $ 0.37   $ 0.32     $ 1.39   $ 1.32  
Diluted $ 0.37   $ 0.32     $ 1.38   $ 1.32  
DIVIDENDS PAID PER COMMON SHARE $ 0.125   $ 0.115     $ 0.490   $ 0.445  


Lakeland Bancorp, Inc.
Consolidated Balance Sheets
       
(Dollars in thousands) December 31, 2019   December 31, 2018
  (Unaudited)    
       
ASSETS      
Cash $ 275,794     $ 205,199  
Interest-bearing deposits due from banks 6,577     3,400  
  Total cash and cash equivalents 282,371     208,599  
Investment securities available for sale, at fair value 755,900     638,618  
Equity securities, at fair value 16,473     15,921  
Investment securities held to maturity; fair value of $124,904 at December 31, 2019 and $150,932 at December 31, 2018 123,975     153,646  
Federal Home Loan Bank and other membership stocks, at cost 22,505     13,301  
Loans held for sale 1,743     1,113  
Loans, net of deferred fees 5,137,823     4,456,733  
Allowance for loan losses (40,003 )   (37,688 )
Net loans 5,097,820     4,419,045  
Premises and equipment, net 47,608     49,175  
Operating lease right-of-use assets 18,282      
Accrued interest receivable 16,832     16,114  
Goodwill 156,277     136,433  
Other identifiable intangible assets 4,314     1,768  
Bank owned life insurance 112,392     110,052  
Other assets 54,744     42,308  
  TOTAL ASSETS $ 6,711,236     $ 5,806,093  
       
LIABILITIES AND STOCKHOLDERS' EQUITY      
LIABILITIES      
Deposits:      
Noninterest-bearing $ 1,124,121     $ 950,218  
Savings and interest-bearing transaction accounts 3,298,854     2,913,414  
Time deposits $250 thousand and under 652,144     589,737  
Time deposits over $250 thousand 218,660     167,301  
  Total deposits 5,293,779     4,620,670  
Federal funds purchased and securities sold under agreements to repurchase 328,658     233,905  
Other borrowings 165,816     181,118  
Subordinated debentures 118,220     105,027  
Operating lease liabilities 19,814      
Other liabilities 59,686     41,634  
  TOTAL LIABILITIES 5,985,973     5,182,354  
       
STOCKHOLDERS' EQUITY      
Common stock, no par value; authorized 100,000,000 shares at December 31, 2019 and at December 31, 2018; issued shares 50,498,410 at December 31, 2019 and 47,486,250 shares at December 31, 2018 560,263     514,703  
Retained earnings 162,752     116,874  
Accumulated other comprehensive income (loss) 2,248     (7,838 )
  TOTAL STOCKHOLDERS' EQUITY 725,263     623,739  
  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,711,236     $ 5,806,093  


Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
           
  For the Quarter Ended
  December 30, September 30, June 30, March 31, December 31,
(Dollars in thousands, except per share data) 2019 2019 2019 2019 2018
           
INCOME STATEMENT          
Net interest income $ 49,548   $ 48,682   $ 49,198   $ 48,606   $ 44,206  
Provision for loan losses (1,086 ) (536 )   (508 ) (591 )
Gains on sales of loans 375   486   428   371   299  
Gain (loss) on equity securities (29 ) 72   100   353   (199 )
Other noninterest income 7,638   6,142   5,861   4,999   5,528  
Merger-related expenses     (318 ) (2,860 ) (464 )
Other noninterest expense (31,523 ) (29,563 ) (31,368 ) (31,124 ) (28,199 )
  Pretax income 24,923   25,283   23,901   19,837   20,580  
Provision for income taxes (6,208 ) (6,409 ) (6,444 ) (4,211 ) (5,030 )
  Net income $ 18,715   $ 18,874   $ 17,457   $ 15,626   $ 15,550  
           
Basic earnings per common share $ 0.37   $ 0.37   $ 0.34   $ 0.31   $ 0.32  
Diluted earnings per common share $ 0.37   $ 0.37   $ 0.34   $ 0.31   $ 0.32  
Dividends paid per common share $ 0.125   $ 0.125   $ 0.125   $ 0.115   $ 0.115  
Dividends paid $ 6,363   $ 6,362   $ 6,357   $ 5,838   $ 5,510  
Weighted average shares - basic 50,566   50,553   50,509   50,275   47,605  
Weighted average shares - diluted 50,748   50,694   50,649   50,442   47,780  
           
SELECTED OPERATING RATIOS          
Annualized return on average assets 1.15 % 1.17 % 1.12 % 1.02 % 1.08 %
Annualized return on average common equity 10.32 % 10.61 % 10.16 % 9.41 % 10.05 %
Annualized return on average tangible common equity (1) 13.29 % 13.74 % 13.21 % 12.32 % 12.98 %
Annualized net interest margin 3.27 % 3.25 % 3.39 % 3.42 % 3.29 %
Efficiency ratio (1) 54.20 % 52.77 % 55.78 % 56.62 % 56.18 %
Common stockholders' equity to total assets 10.81 % 10.99 % 10.90 % 10.70 % 10.74 %
Tangible common equity to tangible assets (1) 8.62 % 8.72 % 8.61 % 8.41 % 8.57 %
Tier 1 risk-based ratio 11.02 % 11.24 % 11.11 % 10.98 % 11.27 %
Total risk-based ratio 13.40 % 13.70 % 13.60 % 13.48 % 13.71 %
Tier 1 leverage ratio 9.41 % 9.34 % 9.30 % 9.23 % 9.39 %
Common equity tier 1 capital ratio 10.46 % 10.66 % 10.52 % 10.38 % 10.62 %
Book value per common share $ 14.36   $ 14.13   $ 13.85   $ 13.51   $ 13.14  
Tangible book value per common share (1) $ 11.18   $ 10.94   $ 10.66   $ 10.35   $ 10.22  
           
(1) See Supplemental Information - Non-GAAP Financial Measures        


Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
   
  For the Quarter Ended
  December 31,
  September 30,   June 30,   March 31,   December 31,   
(Dollars in thousands) 2019
  2019   2019   2019   2018  
                               
SELECTED BALANCE SHEET DATA AT PERIOD-END                              
Loans $ 5,140,940   $ 4,925,998   $ 4,925,300   $ 4,924,671   $ 4,460,447  
Allowance for loan losses 40,003   38,655   38,662   37,979   37,688  
Investment securities 918,853   905,078   863,474   850,729   821,486  
Total assets 6,711,236   6,492,474   6,407,195   6,365,063   5,806,093  
Total deposits 5,293,779   5,210,619   5,082,598   5,064,584   4,620,670  
Short-term borrowings 328,658   199,326   258,703   261,266   233,905  
Other borrowings 284,036   284,029   294,022   293,976   286,145  
Stockholders' equity 725,263   713,204   698,463   681,343   623,739  
           
LOANS          
Commercial, real estate $ 3,924,762   $ 3,749,413   $ 3,737,447   $ 3,769,545   $ 3,377,324  
Commercial, industrial and other 431,934   391,486   407,776   389,230   336,735  
Equipment financing 111,076   104,689   99,351   90,791   87,925  
Residential mortgages 335,191   337,482   336,810   335,290   329,854  
Consumer and home equity 337,977   342,928   343,916   339,815   328,609  
  Total loans $ 5,140,940   $ 4,925,998   $ 4,925,300   $ 4,924,671   $ 4,460,447  
           
DEPOSITS          
Noninterest-bearing $ 1,124,121   $ 1,101,083   $ 1,089,474   $ 1,071,890   $ 950,218  
Savings and interest-bearing transaction accounts 3,298,854   3,196,323   3,007,784   3,046,322   2,913,414  
Time deposits 870,804   913,213   985,340   946,372   757,038  
  Total deposits $ 5,293,779   $ 5,210,619   $ 5,082,598   $ 5,064,584   $ 4,620,670  
           
Total loans to total deposits ratio 97.1 % 94.5 % 96.9 % 97.2 % 96.5 %
           
SELECTED AVERAGE BALANCE SHEET DATA          
Loans $ 5,025,377   $ 4,937,488   $ 4,917,109   $ 4,871,534   $ 4,393,382  
Investment securities 894,698   869,734   854,608   858,046   823,193  
Interest-earning assets 6,022,525   5,947,645   5,836,333   5,772,853   5,346,934  
Total assets 6,470,082   6,379,675   6,256,523   6,183,224   5,694,827  
Noninterest-bearing demand deposits 1,130,192   1,100,413   1,083,745   1,056,060   1,003,508  
Savings deposits 492,903   494,377   502,340   513,270   483,606  
Interest-bearing transaction accounts 2,814,831   2,678,424   2,562,365   2,554,865   2,446,325  
Time deposits 873,924   964,159   961,212   890,070   769,129  
Total deposits 5,311,850   5,237,373   5,109,662   5,014,265   4,702,568  
Short-term borrowings 67,097   74,042   110,941   128,972   50,196  
Other borrowings 284,049   287,839   283,177   306,529   288,126  
Total interest-bearing liabilities 4,532,804   4,498,841   4,420,035   4,393,706   4,037,382  
Stockholders' equity 719,292   705,726   689,324   673,205   613,583  


Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
           
  For the Quarter Ended
  December 31, September 30, June 30, March 31, December 31,
(Dollars in thousands) 2019 2019 2019 2019 2018
AVERAGE ANNUALIZED YIELDS (TAXABLE EQUIVALENT BASIS)          
ASSETS          
Loans 4.60 % 4.71 % 4.82 % 4.80 % 4.58 %
Taxable investment securities and other 2.34 % 2.50 % 2.55 % 2.49 % 2.44 %
Tax-exempt securities 2.69 % 2.70 % 2.74 % 2.74 % 2.74 %
Federal funds sold and interest-bearing cash accounts 1.65 % 1.98 % 2.15 % 2.35 % 2.19 %
  Total interest-earning assets 4.21 % 4.32 % 4.46 % 4.44 % 4.20 %
           
LIABILITIES          
Savings accounts 0.07 % 0.06 % 0.06 % 0.07 % 0.06 %
Interest-bearing transaction accounts 1.05 % 1.24 % 1.25 % 1.18 % 1.04 %
Time deposits 1.93 % 2.00 % 1.96 % 1.79 % 1.79 %
Borrowings 2.86 % 2.89 % 2.90 % 2.82 % 2.65 %
  Total interest-bearing liabilities 1.26 % 1.41 % 1.42 % 1.34 % 1.21 %
Net interest spread (taxable equivalent basis) 2.96 % 2.91 % 3.04 % 3.10 % 2.99 %
           
Annualized net interest margin (taxable equivalent basis) 3.27 % 3.25 % 3.39 % 3.42 % 3.29 %
Annualized cost of deposits 0.88 % 1.00 % 1.00 % 0.93 % 0.84 %
           
ASSET QUALITY DATA          
ALLOWANCE FOR LOAN LOSSES          
Balance at beginning of period $ 38,655   $ 38,662   $ 37,979   $ 37,688   $ 37,293  
Provision for loan losses 1,086   536     508   591  
Charge-offs (198 ) (809 ) (413 ) (516 ) (381 )
Recoveries 460   266   1,096   299   185  
  Balance at end of period $ 40,003   $ 38,655   $ 38,662   $ 37,979   $ 37,688  
           
NET LOAN CHARGE-OFFS (RECOVERIES)          
Commercial, real estate $ (18 ) $ 203   $ (85 ) $ 67   $ 132  
Commercial, industrial and other 13   393   (909 ) 50   (44 )
Equipment financing (297 )   293   85   28  
Residential mortgages   (55 ) (2 ) 41   (2 )
Consumer and home equity 40   2   20   (26 ) 82  
  Net charge-offs (recoveries) $ (262 ) $ 543   $ (683 ) $ 217   $ 196  
           
NON-PERFORMING ASSETS          
Commercial, real estate $ 13,281   $ 9,164   $ 10,205   $ 9,817   $ 7,192  
Commercial, industrial and other 1,539   795   662   2,202   1,019  
Equipment financing 284   271   136   383   501  
Residential mortgages 3,428   3,250   1,548   1,740   1,986  
Consumer and home equity 2,606   2,437   1,873   1,581   1,432  
  Total non-accrual loans 21,138   15,917   14,424   15,723   12,130  
Property acquired through foreclosure or repossession 563   944   532   715   830  
  Total non-performing assets $ 21,701   $ 16,861   $ 14,956   $ 16,438   $ 12,960  
           
Loans past due 90 days or more and still accruing $   $   $   $ 78   $  
Loans restructured and still accruing $ 5,650   $ 5,029   $ 5,139   $ 6,352   $ 9,293  
           
Ratio of allowance for loan losses to total loans 0.78 % 0.78 % 0.78 % 0.77 % 0.84 %
Total non-accrual loans to total loans 0.41 % 0.32 % 0.29 % 0.32 % 0.27 %
Total non-performing assets to total assets 0.32 % 0.26 % 0.23 % 0.26 % 0.22 %
Annualized net charge-offs (recoveries) to average loans (0.02 )% 0.04 % (0.06 )% 0.02 % 0.02 %


Lakeland Bancorp, Inc.
Supplemental Information - Non-GAAP Financial Measures
(Unaudited)
           
  At or for the Quarter Ended
  December 31,
September 30,
June 30,
March 31,
December 31,
(Dollars in thousands, except ratios and per share amounts) 2019
2019
2019
2019
2018
CALCULATION OF TANGIBLE BOOK VALUE PER COMMON SHARE                              
Total common stockholders' equity at end of period - GAAP $ 725,263   $ 713,204   $ 698,463   $ 681,343   $ 623,739  
Less:  Goodwill 156,277   156,277   155,830   154,153   136,433  
Less:  Other identifiable intangible assets 4,314   4,602   4,891   5,192   1,768  
  Total tangible common stockholders' equity at end of period - Non-GAAP $ 564,672   $ 552,325   $ 537,742   $ 521,998   $ 485,538  
           
Shares outstanding at end of period 50,498   50,489   50,441   50,436   47,486  
           
Book value per share - GAAP $ 14.36   $ 14.13   $ 13.85   $ 13.51   $ 13.14  
           
Tangible book value per share - Non-GAAP $ 11.18   $ 10.94   $ 10.66   $ 10.35   $ 10.22  
           
CALCULATION OF TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS        
Total tangible common stockholders' equity at end of period - Non-GAAP $ 564,672   $ 552,325   $ 537,742   $ 521,998   $ 485,538  
           
Total assets at end of period - GAAP $ 6,711,236   $ 6,492,474   $ 6,407,195   $ 6,365,063   $ 5,806,093  
Less:  Goodwill 156,277   156,277   155,830   154,153   136,433  
Less:  Other identifiable intangible assets 4,314   4,602   4,891   5,192   1,768  
  Total tangible assets at end of period - Non-GAAP $ 6,550,645   $ 6,331,595   $ 6,246,474   $ 6,205,718   $ 5,667,892  
           
Common equity to assets - GAAP 10.81 % 10.99 % 10.90 % 10.70 % 10.74 %
           
Tangible common equity to tangible assets - Non-GAAP 8.62 % 8.72 % 8.61 % 8.41 % 8.57 %
           
CALCULATION OF RETURN ON AVERAGE TANGIBLE COMMON EQUITY        
Net income - GAAP $ 18,715   $ 18,874   $ 17,457   $ 15,626   $ 15,550  
           
Total average common stockholders' equity - GAAP $ 719,292   $ 705,726   $ 689,324   $ 673,205   $ 613,583  
Less:  Average goodwill 156,277   155,835   154,171   153,562   136,433  
Less:  Average other identifiable intangible assets 4,468   4,761   5,058   5,254   1,844  
Total average tangible common stockholders' equity - Non-GAAP $ 558,547   $ 545,130   $ 530,095   $ 514,389   $ 475,306  
           
Return on average common stockholders' equity - GAAP 10.32 % 10.61 % 10.16 % 9.41 % 10.05 %
           
Return on average tangible common stockholders' equity - Non-GAAP 13.29 % 13.74 % 13.21 % 12.32 % 12.98 %
           
CALCULATION OF EFFICIENCY RATIO          
Total noninterest expense $ 31,523   $ 29,563   $ 31,686   $ 33,984   $ 28,663  
Amortization of core deposit intangibles (289 ) (288 ) (301 ) (304 ) (142 )
Merger-related expenses     (318 ) (2,860 ) (464 )
Noninterest expense, as adjusted $ 31,234   $ 29,275   $ 31,067   $ 30,820   $ 28,057  
           
Net interest income $ 49,548   $ 48,682   $ 49,198   $ 48,606   $ 44,206  
Total noninterest income 7,984   6,700   6,389   5,723   5,628  
Total revenue 57,532   55,382   55,587   54,329   49,834  
Tax-equivalent adjustment on municipal securities 91   97   105   108   109  
Total revenue, as adjusted $ 57,623   $ 55,479   $ 55,692   $ 54,437   $ 49,943  
Efficiency ratio - Non-GAAP 54.20 % 52.77 % 55.78 % 56.62 % 56.18 %


Lakeland Bancorp, Inc.
Supplemental Information - Non-GAAP Financial Measures
(Unaudited)
  For the Twelve Months Ended December 31,
(Dollars in thousands) 2019 2018
     
CALCULATION OF RETURN ON AVERAGE TANGIBLE COMMON EQUITY    
Net income - GAAP $ 70,672   $ 63,401  
     
Total average common stockholders' equity - GAAP $ 697,037   $ 598,527  
Less:  Average goodwill $ 154,971   $ 136,433  
Less:  Average other identifiable intangible assets $ 4,883   $ 2,064  
Total average tangible common stockholders' equity - Non-GAAP $ 537,183   $ 460,030  
     
Return on average common stockholders' equity - GAAP 10.14 % 10.59 %
     
Return on average tangible common stockholders' equity - Non-GAAP 13.16 % 13.78 %
     
CALCULATION OF EFFICIENCY RATIO    
Total noninterest expense $ 126,756   $ 111,167  
Amortization of core deposit intangibles $ (1,182 ) $ (594 )
Merger-related expenses $ (3,178 ) $ (464 )
Noninterest expense, as adjusted $ 122,396   $ 110,109  
     
Net interest income $ 196,034   $ 173,559  
Noninterest income $ 26,796   $ 22,310  
Total revenue $ 222,830   $ 195,869  
Tax-equivalent adjustment on municipal securities $ 401   $ 454  
Total revenue, as adjusted $ 223,231   $ 196,323  
Efficiency ratio - Non-GAAP 54.83 % 56.09 %


Lakeland Bancorp, Inc.
Supplemental Information - Reconciliation of Net Income
(Unaudited)
     
    For the Year Ended
December 31,
(Dollars in thousands, except per share amounts)   2019
2018
               
Net income - GAAP   $ 70,672   $ 63,401  
       
NON-ROUTINE TRANSACTIONS, NET OF TAX      
Tax deductible merger-related expenses   1,878   84  
Non-tax deductible merger-related expenses   491   345  
  Net effect of non-routine transactions   2,369   429  
       
Net income available to common shareholders excluding non-routine transactions   $ 73,041   $ 63,830  
Less:  Earnings allocated to participating securities   (596 ) (582 )
Net Income,  excluding non-routine transactions   $ 72,445   $ 63,248  
       
Weighted average shares - Basic   50,477   $ 47,578  
Weighted average shares - Diluted   50,642   $ 47,766  
       
Basic earnings per share - GAAP   $ 1.39   $ 1.32  
Diluted earnings per share - GAAP   $ 1.38   $ 1.32  
       
Basic earnings per share, adjusted for non-routine transactions   $ 1.44   $ 1.33  
Diluted earnings per share, adjusted for non-routine transactions (Core EPS)   $ 1.43   $ 1.32  
       
Return on average assets - GAAP   1.12 % 1.15 %
Return on average assets, adjusted for non-routine transactions   1.16 % 1.15 %
       
Return on average common stockholders' equity - GAAP   10.14 % 10.59 %
Return on average common stockholders' equity, adjusted for non-routine transactions   10.48 % 10.66 %
       
Return on average tangible common stockholders' equity - Non-GAAP   13.16 % 13.78 %
Return on average tangible common stockholders' equity - Non-GAAP, adjusted for non-routine transactions   13.60 % 13.88 %
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