LBAI
$9.67
Lakeland Bancorp
($.05)
(.51%)
Earnings Details
2nd Quarter June 2020
Thursday, July 23, 2020 8:00:00 AM
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Summary

Lakeland Bancorp (LBAI) Recent Earnings

Lakeland Bancorp (LBAI) reported 2nd Quarter June 2020 earnings of $0.23 per share on revenue of $66.5 million. The consensus earnings estimate was $0.26 per share on revenue of $56.8 million. Revenue fell 6.7% compared to the same quarter a year ago.

Lakeland Bancorp Inc, through its subsidiary offers lending, depository, and related financial services to individuals and small to medium sized businesses. It also offers a range of consumer banking services.

Results
Reported Earnings
$0.23
Earnings Whisper
-
Consensus Estimate
$0.26
Reported Revenue
$66.5 Mil
Revenue Estimate
$56.8 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Lakeland Bancorp Announces Second Quarter Results

OAK RIDGE, N.J., July 23, 2020 (GLOBE NEWSWIRE) -- Lakeland Bancorp, Inc. (NASDAQ: LBAI) (the “Company”), the parent company of Lakeland Bank (“Lakeland”), reported net income of $11.9 million and earnings per diluted share (“EPS”) of $0.23 for the three months ended June 30, 2020 compared to net income of $17.5 million and diluted EPS of $0.34 for the second quarter of 2019. For the second quarter of 2020, annualized return on average assets was 0.67%, annualized return on average common equity was 6.42% and annualized return on average tangible common equity was 8.19%. 

For the six months ended June 30, 2020, the Company reported net income of $24.2 million and earnings per diluted share (“EPS”) of $0.47 compared to net income of $33.1 million and diluted EPS of $0.65 for the first six months of 2019. For the first six months of 2020, annualized return on average assets was 0.71%, annualized return on average common equity was 6.59% and annualized return on average tangible common equity was 8.42%.

The second quarter and year-to-date results were adversely impacted by a $9.0 million and $18.2 million provision for loan losses, respectively, compared to no provision and a $508,000 provision for the same periods last year. The increased provision for the first half of 2020 was primarily due to the impact of COVID-19 on certain qualitative factors and loans on payment deferment resulting in approximately $15.0 million of the provision. The remaining $3.2 million of the provision is attributable to loan growth, a change in the loan portfolio composition and a change in loss rates. As of June 30, 2020, the ratio of the allowance for loan loss to total loans was 1.00% compared to 0.78% as of December 31, 2019. The allowance for loan losses to total loans less Paycheck Protection Program (“PPP”) loans of $326.0 million, was 1.06% as of June 30, 2020.

Thomas Shara, Lakeland Bancorp’s President and CEO commented, “While the pandemic has continued to impact our markets, Lakeland remains focused on expanding our customer relationships and carefully growing our franchise. Lakeland’s commitment to our communities is evident in our active participation in the PPP loan program, the recently launched Main Street Lending Program and numerous other charitable initiatives during this crisis. As conditions improved, the number of loan deferral requests has decreased dramatically and we are encouraged by the large volume of loans on payment deferment indicating a return to full or partial paying status. Although the pandemic has lessened in our markets and loan charge-offs continue to be negligible, we remain prudent with our elevated loan loss provision of $9.0 million which is consistent with last quarter.”

Mr. Shara continued, “Despite these conditions, Lakeland’s Q2 balance sheet growth has been robust as loans increased $111 million or 8% annualized, excluding originating $326.0 million in PPP loans, while deposits surged by $670 million. The additional liquidity combined with lower market interest rates and the impact of low yielding PPP loans reduced the net interest margin to 3.06% for the quarter. We will look to leverage this liquidity during the second half of the year as the economic forecast becomes clearer.”

COVID-19

As part of Lakeland’s response to COVID-19, we initiated remote working plans and encouraged the use of our mobile and online banking alternatives. To assist COVID-19 impacted borrowers, we are offering temporary payment deferrals on commercial, mortgage and consumer loans. As of June 30, 2020, we have deferred approximately $927.0 million of commercial loans, $40.0 million of equipment finance and $53.0 million of residential mortgage and consumer loans. We are also participating in the Small Business Administration Paycheck Protection Program (“PPP”) to help strengthen local businesses and preserve jobs in our communities and as of June 30, 2020 have funded 2,066 loans totaling $326.0 million with $11.1 million in related fees, as well as $1.1 million in deferred costs. Additionally, to further support our customers, the Company is participating in the Main Street Lending Program established by the Federal Reserve to support lending to small and medium-sized businesses that were in sound financial condition before the onset of the COVID-19 pandemic.

Net Interest Margin and Net Interest Income

Net interest margin for the second quarter of 2020 of 3.06% decreased 33 and 22 basis points, respectively, from the second quarter of 2019 and the first quarter of 2020. Net interest margin for the first six months of 2020 of 3.16% compared to 3.41% for the same period in 2019. The decrease in net interest margin was due primarily to a decrease in the yield on interest-earning assets partially offset by a decrease in the cost of interest bearing liabilities.

The yield on interest-earning assets for the second quarter of 2020 was 3.69% compared to 4.46% for the second quarter of 2019 and 4.17% for the first quarter of 2020. The yield on interest-earning assets for the first six months of 2020 was 3.92% compared to 4.45% during the same period in 2019. The current quarter and year-to-date decrease in yield on interest-earning assets, when compared to the prior periods, was due primarily to a reduction in the yield on loans due to decreases in the prime rate and LIBOR during 2019 and 2020, an increase in lower yielding federal funds sold, as well as the origination of PPP loans during the second quarter of 2020, which earn an effective yield of 2.50% including amortization of fees and costs.

The cost of interest-bearing liabilities for the second quarter of 2020 was 0.86% compared to 1.42% for the second quarter of 2019 and 1.18% for the first quarter of 2020. The cost of interest-bearing liabilities for the first six months of 2020 was 1.02% compared to 1.38% during the same period in 2019. The cost of interest-bearing transaction accounts, time deposits and borrowings have decreased since 2019 largely driven by reductions in the federal funds rate.

Net interest income for the second quarter of 2020 of $50.5 million increased $1.3 million and $620,000, respectively, compared to the second quarter of 2019 and the first quarter of 2020.  Net interest income for the first six months of 2020 of $100.4 million compared to $97.8 million for the first six months of 2019.  The increase in net interest income compared to prior periods was due primarily to the growth in the volume of interest-earning assets and a decrease in interest rates on interest-bearing liabilities partially offset by a decrease in the yield on interest-earning assets.

Noninterest Income

Noninterest income decreased $908,000 to $5.5 million for the second quarter of 2020 from $6.4 million for the second quarter of 2019. Service charges on deposit accounts for the second quarter of 2020 decreased $880,000 compared to the second quarter of 2019 due primarily to changes in customer behavior resulting from the pandemic and New Jersey’s Stay in Place Order. Commissions and fees for the second quarter of 2020 decreased $529,000 compared to the second quarter of 2019 due primarily to decreases in commercial loan fees and investment commission income. Partially offsetting these unfavorable variances was gains on sales of loans and swap income which increased $282,000 and $111,000, respectively, due primarily to increased volume driven by lower interest rates.

For the first six months of 2020, noninterest income increased $1.4 million to $13.5 million compared to the first six months of 2019 primarily due to a $2.8 million increase in swap income. The first half of 2020 included gains on sales of investment securities of $342,000 compared to none for the same period last year. Gains on sales of loans for the first six months of 2020 totaling $1.1 million increased $326,000 compared to the first six months of 2019 due to the same reason discussed above. Service charges on deposit accounts and commissions and fees decreased $953,000 and $301,000, respectively, compared to the same period in 2019 due to the same reasons discussed in the quarterly comparison. The first half of 2020 also included a $455,000 loss on equity securities compared to a gain of $453,000 for the first half of 2019.

Noninterest Expense

Noninterest expense totaled $31.5 million for the second quarter of 2020 and decreased $224,000 compared to the second quarter of 2019. Salary and employee benefit expense for the second quarter of 2020 increased $890,000, or 5%, when compared to the same quarter of 2019 as a result of staff additions and normal merit increases. Furniture and equipment expense increased $618,000 compared to the second quarter of 2019 due primarily to an increase in costs associated with the Company’s digital strategy initiative, while marketing expense decreased $306,000 due partially to the delay of marketing campaigns resulting from the pandemic. The second quarter of 2019 also included $318,000 in merger related expenses from the Highlands Bancorp acquisition.

Noninterest expense for the first half of 2020 of $64.0 million decreased $1.7 million due primarily to merger related expenses in the first half of 2019 of $3.2 million. Salary and employee benefit expense and furniture and equipment expense increased $1.9 million and $1.1 million, respectively, compared to the first half of 2019 due to the same reasons discussed in the quarterly comparison. Marketing expenses for the first half of 2020 decreased $548,000 due to the same reason discussed in the quarterly comparison. First half of 2020 results included a long-term debt prepayment fee of $356,000 resulting from the payoff of $10.0 million in Federal Home Loan Bank debt yielding 2.89%. 

Income Tax Expense

The effective tax rate for the second quarter of 2020 was 23.7% compared to 27.0% for the second quarter of 2019.  The increased effective tax rate for the second quarter of 2019 was primarily a result of a technical bulletin issued by the New Jersey Division of Taxation during the second quarter of 2019, which resulted in increasing our 2019 year-to-date effective tax rate to 24.5%.

Financial Condition

At June 30, 2020, total assets were $7.49 billion, an increase of $777.3 million compared to December 31, 2019. For the six months ended June 30, 2020, total loans grew $618.3 million, including $326.0 million attributed to PPP loans, to $5.76 billion and investment securities increased $39.1 million to $958.0 million. On the funding side, total deposits increased $831.7 million to $6.13 billion, while borrowings decreased $155.6 million to $457.1 million. At June 30, 2020, total loans as a percent of total deposits was 94.2%.

Asset Quality

At June 30, 2020, non-performing assets increased to $33.2 million, 0.44% of total assets, compared to $21.7 million, 0.32% of total assets, at December 31, 2019. Non-accrual loans as a percent of total loans increased to 0.57% at June 30, 2020 compared to 0.41% at December 31, 2019. The increase in non-accrual loans from December 31, 2019, related primarily to one loan relationship totaling $9.5 million that was not COVID-19 related. The allowance for loan losses increased to $57.8 million, 1.00% of total loans, at June 30, 2020, compared to $40.0 million, 0.78% of total loans, at December 31, 2019. In the second quarter of 2020, the Company had net charge-offs of $45,000, or 0.00% of average loans, annualized, compared to net recoveries of $683,000, or 0.06%, for the same period in 2019. The provision for loan losses for the second quarter of 2020 was $9.0 million compared to no provision for loan losses in the second quarter of 2019.

Capital

At June 30, 2020, stockholders’ equity was $745.5 million compared to $725.3 million at December 31, 2019, a 3% increase. Lakeland Bank remains above FDIC “well capitalized” standards, with a Tier 1 leverage ratio of 8.69% at June 30, 2020. The book value per common share and tangible book value per common share increased 7% and 9% to $14.77 and $11.60, respectively, compared to $13.85 and $10.66 at June 30, 2019. On July 21, 2020, the Company declared a quarterly cash dividend of $0.125 per share to be paid on August 17, 2020, to shareholders of record as of August 3, 2020.

Forward-Looking Statements

The information disclosed in this document includes various forward-looking statements - including the statements regarding the prospective impact of COVID-19 and Lakeland’s ability to leverage its increased liquidity - 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 the Company’s 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; public health crises (such as the governmental, social and economic effects of the novel coronavirus); 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 Lakeland’s lending and equipment financing activities; successful implementation, deployment and upgrades of new and existing technology, systems, services and products; and customers’ acceptance of Lakeland’s products and services.

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 Bank is the wholly-owned subsidiary of Lakeland Bancorp, Inc. (NASDAQ:LBAI), which has over $7 billion in total assets. With an extensive branch network and commercial lending centers throughout New Jersey and Highland Mills, N.Y., the Bank offers business and retail banking products and services. Business services include commercial loans and lines of credit, commercial real estate loans, loans for healthcare services, asset based lending, equipment financing, small business loans and lines, and cash management services. Consumer services include online and mobile banking, home equity loans and lines, mortgage options and wealth management solutions. Lakeland is proud to be recognized as New Jersey’s #1 Best-In-State Banks by Forbes and Statista, rated a 5-Star Bank by Bauer Financial and named one of New Jersey’s 50 Fastest Growing Companies by NJBIZ. 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
June 30,
 Six Months Ended
June 30,
(Dollars in thousands, except per share amounts)2020 2019 2020 2019
INCOME STATEMENT       
Net interest income$50,519  $49,198  $100,418  $97,804 
Provision for loan losses(9,000)   (18,223) (508)
Gains on sales of investment securities    342   
Gains on sales of loans710  428  1,125  799 
Gain on equity securities198  100  (455) 453 
Other noninterest income4,573  5,861  12,480  10,860 
Long-term debt prepayment fee    (356)  
Merger-related expenses  (318)   (3,178)
Other noninterest expense(31,462) (31,368) (63,610) (62,492)
Pretax income15,538  23,901  31,721  43,738 
Provision for income taxes(3,687) (6,444) (7,478) (10,655)
Net income$11,851  $17,457  $24,243  $33,083 
        
Basic earnings per common share$0.23  $0.34  $0.48  $0.65 
Diluted earnings per common share$0.23  $0.34  $0.47  $0.65 
Dividends paid per common share$0.125  $0.125  $0.250  $0.240 
Weighted average shares - basic50,522  50,509  50,554  50,393 
Weighted average shares - diluted50,593  50,649  50,660  50,544 
        
SELECTED OPERATING RATIOS       
Annualized return on average assets0.67% 1.12% 0.71% 1.07
Annualized return on average common equity6.42 10.16 6.59 9.79%
Annualized return on average tangible common equity (1)8.19 13.21 8.42 12.77
Annualized yield on interest-earning assets3.69 4.46 3.92 4.45
Annualized cost of interest-bearing liabilities0.86 1.42% 1.02 1.38
Annualized net interest spread2.83 3.04 2.91 3.07
Annualized net interest margin3.06 3.39 3.16 3.41
Efficiency ratio (1)55.62 55.78 55.46 56.20%
Stockholders' equity to total assets    9.96 10.90
Book value per common share    $14.77  $13.85 
Tangible book value per common share (1)    $11.60  $10.66 
Tangible common equity to tangible assets (1)    7.99% 8.61%
        
ASSET QUALITY RATIOS    June 30, 2020 June 30, 2019
Ratio of allowance for loan losses to total loans    1.00 0.78
Non-performing loans to total loans    0.57 0.29
Non-performing assets to total assets    0.44 0.23
Annualized net charge-offs (recoveries) to average loans    0.01 (0.02)%
        
(1) See Supplemental Information - Non-GAAP Financial Measures      
        
        
        
        
        
        
        
        
Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
        
(Dollars in thousands)    June 30, 2020 June 30, 2019
SELECTED BALANCE SHEET DATA AT PERIOD-END      
Loans    $5,756,155  $4,922,373 
Allowance for loan losses    57,839  38,662 
Investment securities    957,985  863,474 
Total assets    7,488,516  6,407,195 
Total deposits    6,125,502  5,082,598 
Short-term borrowings    183,116  258,703 
Other borrowings    273,954  294,022 
Stockholders' equity    745,489  698,463 
        
 Three Months Ended
June 30,
 Six Months Ended
June 30,
 2020 2019 2020 2019
SELECTED AVERAGE BALANCE SHEET DATA       
Loans$5,572,865  $4,917,109  $5,390,481  $4,894,447 
Investment securities891,037  854,608  885,512  856,318 
Interest-earning assets6,650,993  5,836,333  6,391,998  5,804,769 
Total assets7,137,529  6,256,523  6,851,415  6,220,076 
Noninterest-bearing demand deposits1,364,785  1,083,745  1,237,212  1,069,979 
Savings deposits525,224  502,340  511,011  507,775 
Interest-bearing transaction accounts2,908,299  2,562,365  2,869,539  2,558,636 
Time deposits1,093,760  961,212  983,379  925,837 
Total deposits5,892,068  5,109,662  5,601,141  5,062,227 
Short-term borrowings82,694  110,941  121,260  119,907 
Other borrowings273,904  283,177  275,828  294,788 
Total interest-bearing liabilities4,883,881  4,420,035  4,761,017  4,406,943 
Stockholders' equity742,050  689,324  739,385  681,309 
        


Lakeland Bancorp, Inc.
Consolidated Statements of Income
(Unaudited)
  Three Months Ended
June 30,
 Six Months Ended
June 30,
(Dollars in thousands, except per share amounts)2020 2019 2020 2019
INTEREST INCOME       
Loans and net deferred fees and costs$55,825  $59,119  $113,682  $116,761 
Federal funds sold and interest-bearing deposits with banks36  348  195  602 
Taxable investment securities and other4,763  4,985  9,992  9,858 
Tax exempt investment securities349  396  681  804 
 TOTAL INTEREST INCOME60,973  64,848  124,550  128,025 
INTEREST EXPENSE       
Deposits8,094  12,762  18,957  24,259 
Federal funds purchased and securities sold under agreements to repurchase75  494  504  1,102 
Other borrowings2,285  2,394  4,671  4,860 
 TOTAL INTEREST EXPENSE10,454  15,650  24,132  30,221 
NET INTEREST INCOME50,519  49,198  100,418  97,804 
Provision for loan losses9,000    18,223  508 
 NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES41,519  49,198  82,195  97,296 
NONINTEREST INCOME       
Service charges on deposit accounts1,875  2,755  4,375  5,328 
Commissions and fees1,196  1,725  2,836  3,137 
Income on bank owned life insurance665  690  1,330  1,373 
Gain (loss) on equity securities198  100  (455) 453 
Gains on sales of loans710  428  1,125  799 
Gains on sales of investment securities    342   
Swap income767  656  3,610  855 
Other income70  35  329  167 
 TOTAL NONINTEREST INCOME5,481  6,389  13,492  12,112 
NONINTEREST EXPENSE       
Salaries and employee benefit expense20,269  19,379  40,504  38,610 
Net occupancy expense2,488  2,629  5,324  5,583 
Furniture and equipment expense2,783  2,165  5,343  4,281 
FDIC insurance expense450  401  748  851 
Stationary, supplies and postage expense381  401  780  848 
Marketing expense232  538  459  1,007 
Data processing expense1,436  1,225  2,689  2,552 
Telecommunications expense454  478  898  971 
ATM and debit card expense536  583  1,123  1,185 
Core deposit intangible amortization261  301  526  605 
Other real estate owned and other repossessed assets expense43  108  55  194 
Long-term debt prepayment fee    356   
Merger-related expenses  318    3,178 
Other expenses2,129  3,160  5,161  5,805 
 TOTAL NONINTEREST EXPENSE31,462  31,686  63,966  65,670 
INCOME BEFORE PROVISION FOR INCOME TAXES15,538  23,901  31,721  43,738 
Provision for income taxes3,687  6,444  7,478  10,655 
NET INCOME$11,851  $17,457  $24,243  $33,083 
EARNINGS PER COMMON SHARE:       
 Basic$0.23  $0.34  $0.48  $0.65 
 Diluted$0.23  $0.34  $0.47  $0.65 
DIVIDENDS PAID PER COMMON SHARE$0.125  $0.125  $0.250  $0.240 


Lakeland Bancorp, Inc.
Consolidated Balance Sheets
    
(Dollars in thousands)June 30, 2020 December 31, 2019
 (Unaudited)  
ASSETS   
Cash$319,834  $275,794 
Interest-bearing deposits due from banks22,773  6,577 
Total cash and cash equivalents342,607  282,371 
Investment securities available for sale, at fair value811,981  755,900 
Equity securities, at fair value17,182  16,473 
Investment securities held to maturity; fair value of $113,241 at June 30, 2020 and $124,904 at December 31, 2019109,834  123,975 
Federal Home Loan Bank and other membership stocks, at cost18,988  22,505 
Loans held for sale2,793  1,743 
Loans, net of deferred fees5,756,155  5,137,823 
Less: Allowance for loan losses57,839  40,003 
Net loans and leases5,698,316  5,097,820 
Premises and equipment, net47,894  47,608 
Operating lease right-of-use assets17,502  18,282 
Accrued interest receivable23,344  16,832 
Goodwill156,277  156,277 
Other identifiable intangible assets3,788  4,314 
Bank owned life insurance113,748  112,392 
Other assets124,262  54,744 
  TOTAL ASSETS$7,488,516  $6,711,236 
LIABILITIES AND STOCKHOLDERS' EQUITY   
LIABILITIES   
Deposits:   
Noninterest-bearing$1,486,273  $1,124,121 
Savings and interest-bearing transaction accounts3,510,723  3,298,854 
Time deposits $250 thousand and under910,351  652,144 
Time deposits over $250 thousand218,155  218,660 
Total deposits6,125,502  5,293,779 
Federal funds purchased and securities sold under agreements to repurchase183,116  328,658 
Other borrowings155,715  165,816 
Subordinated debentures118,239  118,220 
Operating lease liabilities18,976  19,814 
Other liabilities141,479  59,686 
TOTAL LIABILITIES6,743,027  5,985,973 
STOCKHOLDERS' EQUITY   
Common stock, no par value; authorized shares, 100,000,000; issued shares 50,594,196 and outstanding shares 50,463,161 at June 30, 2020 and issued and outstanding shares 50,498,410 at December 31, 2019561,257  560,263 
Retained earnings174,267  162,752 
Treasury shares, at cost, 131,035 shares at June 30, 2020 and no shares at December 31, 2019(1,452)  
Accumulated other comprehensive income11,417  2,248 
TOTAL STOCKHOLDERS' EQUITY745,489  725,263 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$7,488,516  $6,711,236 


Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
      
 For the Quarter Ended
 June 30,March 31,December 31,September 30,June 30,
(Dollars in thousands, except per share data)20202020201920192019
INCOME STATEMENT     
Net interest income$50,519 $49,899 $49,548 $48,682 $49,198 
Provision for loan losses(9,000 (9,223 (1,086 (536  
Gains on sales of investment securities 342    
Gains on sales of loans710 415 375 486 428 
(Loss) gain on equity securities198 (653 (29 72 100 
Other noninterest income4,573 7,907 7,638 6,142 5,861 
Long-term debt prepayment fee (356    
Merger-related expenses    (318 
Other noninterest expense(31,462 (32,148 (31,523 (29,563 (31,368 
Pretax income15,538 16,183 24,923 25,283 23,901 
Provision for income taxes(3,687 (3,791 (6,208 (6,409 (6,444 
Net income$11,851 $12,392 $18,715 $18,874 $17,457 
      
Basic earnings per common share$0.23 $0.24 $0.37 $0.37 $0.34 
Diluted earnings per common share$0.23 $0.24 $0.37 $0.37 $0.34 
Dividends paid per common share$0.125 $0.125 $0.125 $0.125 $0.125 
Dividends paid$6,365 $6,364 $6,363 $6,362 $6,357 
Weighted average shares - basic50,522 50,586 50,566 50,553 50,509 
Weighted average shares - diluted50,593 50,728 50,748 50,694 50,649 
      
SELECTED OPERATING RATIOS     
Annualized return on average assets0.67%0.76%1.15%1.17%1.12%
Annualized return on average common equity6.42%6.77%10.32%10.61%10.16%
Annualized return on average tangible common equity (1)8.19%8.65%13.29%13.74%13.21%
Annualized net interest margin3.06%3.28%3.27%3.25%3.39%
Efficiency ratio (1)55.62%55.30%54.20%52.77%55.78%
Common stockholders' equity to total assets9.96%10.51%10.81%10.99%10.90%
Tangible common equity to tangible assets (1)7.99%8.41%8.62%8.72%8.61%
Tier 1 risk-based ratio10.45%10.61%11.02%11.24%11.11%
Total risk-based ratio12.98%13.04%13.40%13.70%13.60%
Tier 1 leverage ratio8.69%9.38%9.41%9.34%9.30%
Common equity tier 1 capital ratio9.93%10.08%10.46%10.66%10.52%
Book value per common share$14.77 $14.60 $14.36 $14.13 $13.85 
Tangible book value per common share (1)$11.60 $11.43 $11.18 $10.94 $10.66 
      
(1) See Supplemental Information - Non-GAAP Financial Measures    


Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
      
 For the Quarter Ended
 June 30,March 31,December 31,September 30,June 30,
(Dollars in thousands)20202020201920192019
SELECTED BALANCE SHEET DATA AT PERIOD-END    
Loans$5,769,127 $5,331,863 $5,140,940 $4,925,998 $4,925,300 
Allowance for loan losses57,839 48,884 40,003 38,655 38,662 
Investment securities957,985 974,319 918,853 905,078 863,474 
Total assets7,488,516 7,013,908 6,711,236 6,492,474 6,407,195 
Total deposits6,125,502 5,455,138 5,293,779 5,210,619 5,082,598 
Short-term borrowings183,116 419,085 328,658 199,326 258,703 
Other borrowings273,954 258,944 284,036 284,029 294,022 
Stockholders' equity745,489 736,922 725,263 713,204 698,463 
      
LOANS     
Commercial, real estate$4,260,917 $4,073,911 $3,924,762 $3,749,413 $3,737,447 
Commercial, industrial and other402,239 467,346 431,934 391,486 407,776 
Paycheck Protection Program325,999     
Equipment financing115,651 116,421 111,076 104,689 99,351 
Residential mortgages334,455 334,114 335,191 337,482 336,810 
Consumer and home equity329,866 340,071 337,977 342,928 343,916 
Total loans$5,769,127 $5,331,863 $5,140,940 $4,925,998 $4,925,300 
      
DEPOSITS     
Noninterest-bearing$1,486,273 $1,129,695 $1,124,121 $1,101,083 $1,089,474 
Savings and interest-bearing transaction accounts3,510,723 3,241,397 3,298,854 3,196,323 3,007,784 
Time deposits1,128,506 1,084,046 870,804 913,213 985,340 
Total deposits$6,125,502 $5,455,138 $5,293,779 $5,210,619 $5,082,598 
      
Total loans to total deposits ratio94.2%97.7%97.1%94.5%96.9%
      
SELECTED AVERAGE BALANCE SHEET DATA     
Loans$5,572,865 $5,208,097 $5,025,377 $4,937,488 $4,917,109 
Investment securities891,037 879,987 894,698 869,734 854,608 
Interest-earning assets6,650,993 6,133,003 6,022,525 5,947,645 5,836,333 
Total assets7,137,529 6,565,302 6,470,082 6,379,675 6,256,523 
Noninterest-bearing demand deposits1,364,785 1,109,638 1,130,192 1,100,413 1,083,745 
Savings deposits525,224 496,798 492,903 494,377 502,340 
Interest-bearing transaction accounts2,908,299 2,830,778 2,814,831 2,678,424 2,562,365 
Time deposits1,093,760 872,998 873,924 964,159 961,212 
Total deposits5,892,068 5,310,212 5,311,850 5,237,373 5,109,662 
Short-term borrowings82,694 159,825 67,097 74,042 110,941 
Other borrowings273,904 277,753 284,049 287,839 283,177 
Total interest-bearing liabilities4,883,881 4,638,152 4,532,804 4,498,841 4,420,035 
Stockholders' equity742,050 736,719 719,292 705,726 689,324 


Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
      
 For the Quarter Ended
 June 30,March 31,December 31,September 30,June 30,
(Dollars in thousands)20202020201920192019
AVERAGE ANNUALIZED YIELDS (TAXABLE EQUIVALENT BASIS) AND COSTS   
ASSETS     
Loans4.03%4.47%4.60%4.71%4.82%
Taxable investment securities and other2.31%2.56%2.34%2.50%2.55%
Tax-exempt securities2.70%2.67%2.69%2.70%2.74%
Federal funds sold and interest-bearing cash accounts0.08%1.42%1.65%1.98%2.15%
Total interest-earning assets3.69%4.17%4.21%4.32%4.46%
LIABILITIES     
Savings accounts0.07%0.07%0.07%0.06%0.06%
Interest-bearing transaction accounts0.55%0.97%1.05%1.24%1.25%
Time deposits1.48%1.81%1.93%2.00%1.96%
Borrowings2.62%2.54%2.86%2.89%2.90%
Total interest-bearing liabilities0.86%1.18%1.26%1.41%1.42%
Net interest spread (taxable equivalent basis)2.83%2.99%2.96%2.91%3.04%
Annualized net interest margin (taxable equivalent basis)3.06%3.28%3.27%3.25%3.39%
Annualized cost of deposits0.55%0.82%0.88%1.00%1.00%
ASSET QUALITY DATA     
ALLOWANCE FOR LOAN LOSSES     
Balance at beginning of period$48,884 $40,003 $38,655 $38,662 $37,979 
Provision for loan losses9,000 9,223 1,086 536  
Charge-offs(142)(483)(198)(809)(413)
Recoveries97 141 460 266 1,096 
Balance at end of period$57,839 $48,884 $40,003 $38,655 $38,662 
      
NET LOAN CHARGE-OFFS (RECOVERIES)     
Commercial, real estate$(36)$111 $(18)$203 $(85)
Commercial, industrial and other(13)(31)13 393 (909)
Equipment financing(11)71 (297) 293 
Residential mortgages 96  (55)(2)
Consumer and home equity105 95 40 2 20 
Net charge-offs (recoveries)$45 $342 $(262)$543 $(683)
      
NON-PERFORMING ASSETS     
Commercial, real estate$25,615 $24,770 $13,281 $9,164 $10,205 
Commercial, industrial and other1,546 1,909 1,539 795 662 
Equipment financing400 199 284 271 136 
Residential mortgages2,860 2,837 3,428 3,250 1,548 
Consumer and home equity2,432 2,689 2,606 2,437 1,873 
Total non-accrual loans32,853 32,404 21,138 15,917 14,424 
Property acquired through foreclosure or repossession354 393 563 944 532 
Total non-performing assets$33,207 $32,797 $21,701 $16,861 $14,956 
      
Loans past due 90 days or more and still accruing$58 $99 $ $ $ 
Loans restructured and still accruing$4,667 $4,719 $5,650 $5,029 $5,139 
      
Ratio of allowance for loan losses to total loans1.00%0.92%0.78%0.78%0.78%
Total non-accrual loans to total loans0.57%0.61%0.41%0.32%0.29%
Total non-performing assets to total assets0.44%0.47%0.32%0.26%0.23%
Annualized net charge-offs (recoveries) to average loans%0.03%(0.02)%0.04%
(0.06)%


Lakeland Bancorp, Inc.
Supplemental Information - Non-GAAP Financial Measures
(Unaudited)
 At or for the Quarter Ended
 June 30,March 31,December 31,September 30,June 30,
(Dollars in thousands, except ratios and per share amounts)20202020201920192019
CALCULATION OF TANGIBLE BOOK VALUE PER COMMON SHARE    
Total common stockholders' equity at end of period - GAAP$745,489 $736,922 $725,263 $713,204 $698,463 
Less:  Goodwill156,277 156,277 156,277 156,277 155,830 
Less:  Other identifiable intangible assets3,788 4,049 4,314 4,602 4,891 
Total tangible common stockholders' equity at end of period - Non-GAAP$585,424 $576,596 $564,672 $552,325 $537,742 
      
Shares outstanding at end of period50,463 50,462 50,498 50,489 50,441 
      
Book value per share - GAAP$14.77 $14.60 $14.36 $14.13 $13.85 
      
Tangible book value per share - Non-GAAP$11.60 $11.43 $11.18 $10.94 $10.66 
      
CALCULATION OF TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS   
Total tangible common stockholders' equity at end of period - Non-GAAP$585,424 $576,596 $564,672 $552,325 $537,742 
      
Total assets at end of period - GAAP$7,488,516 $7,013,908 $6,711,236 $6,492,474 $6,407,195 
Less:  Goodwill156,277 156,277 156,277 156,277 155,830 
Less:  Other identifiable intangible assets3,788 4,049 4,314 4,602 4,891 
Total tangible assets at end of period - Non-GAAP$7,328,451 $6,853,582 $6,550,645 $6,331,595 $6,246,474 
      
Common equity to assets - GAAP9.96%10.51%10.81%10.99%10.90%
      
Tangible common equity to tangible assets - Non-GAAP7.99%8.41%8.62%8.72%8.61%
      
CALCULATION OF RETURN ON AVERAGE TANGIBLE COMMON EQUITY   
Net income - GAAP$11,851 $12,392 $18,715 $18,874 $17,457 
      
Total average common stockholders' equity - GAAP$742,050 $736,719 $719,292 $705,726 $689,324 
Less:  Average goodwill156,277 156,277 156,277 155,835 154,171 
Less:  Average other identifiable intangible assets3,942 4,205 4,468 4,761 5,058 
Total average tangible common stockholders' equity - Non-GAAP$581,831 $576,237 $558,547 $545,130 $530,095 
      
Return on average common stockholders' equity - GAAP6.42%6.77%10.32%10.61%10.16%
      
Return on average tangible common stockholders' equity - Non-GAAP8.19%8.65%13.29%13.74%13.21%
      
CALCULATION OF EFFICIENCY RATIO     
Total noninterest expense$31,462 $32,504 $31,523 $29,563 $31,686 
Amortization of core deposit intangibles(261)(265)(289)(288)(301)
Merger-related expenses    (318)
Long term debt prepayment fees$ $(356)   
Noninterest expense, as adjusted$31,201 $31,883 $31,234 $29,275 $31,067 
      
Net interest income$50,519 $49,899 $49,548 $48,682 $49,198 
Total noninterest income5,481 8,011 7,984 6,700 6,389 
Total revenue56,000 57,910 57,532 55,382 55,587 
Tax-equivalent adjustment on municipal securities93 88 91 97 105 
(Gains) on sales of investment securities (342)   
Total revenue, as adjusted$56,093 $57,656 $57,623 $55,479 $55,692 
Efficiency ratio - Non-GAAP55.62%55.30%54.20%52.77%55.78%


Lakeland Bancorp, Inc.
Supplemental Information - Non-GAAP Financial Measures
(Unaudited)
 For the Six Months Ended June 30,
(Dollars in thousands)2020 2019
    
CALCULATION OF RETURN ON AVERAGE TANGIBLE COMMON EQUITY   
Net income - GAAP$24,243  $33,083 
    
Total average common stockholders' equity - GAAP$739,385  $681,309 
Less:  Average goodwill$156,277  $153,868 
Less:  Average other identifiable intangible assets$4,073  $5,155 
Total average tangible common stockholders' equity - Non-GAAP$579,035  $522,286 
    
Return on average common stockholders' equity - GAAP6.59% 9.79%
    
Return on average tangible common stockholders' equity - Non-GAAP8.42% 12.77%
    
CALCULATION OF EFFICIENCY RATIO   
Total noninterest expense$63,966  $65,670 
Amortization of core deposit intangibles$(526) $(605)
Long-term debt prepayment fee$(356) $ 
Merger-related expenses$  $(3,178)
Noninterest expense, as adjusted$63,084  $61,887 
    
Net interest income$100,418  $97,804 
Noninterest income$13,492  $12,112 
Total revenue$113,910  $109,916 
Tax-equivalent adjustment on municipal securities$181  $213 
Gains on sales of investment securities$(342) $ 
Total revenue, as adjusted$113,749  $110,129 
Efficiency ratio - Non-GAAP55.46% 56.20%

 


Source: Lakeland Bancorp, Inc.