Market Overview

Lakeland Bancorp Third Quarter Results Driven by Strong Loan Growth; Receives Regulatory Approvals for Merger with Pascack Bancorp

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OAK RIDGE, N.J., Oct. 27, 2015 (GLOBE NEWSWIRE) -- Lakeland Bancorp, Inc. (NASDAQ: LBAI) (the "Company") reported the following results in the third quarter of 2015:

  • Net Income in the third quarter of 2015 was $7.8 million, or $0.20 per diluted share, compared to $8.2 million, or $0.22 per diluted share, for the same period in 2014. Excluding the impact of $734 thousand in non-routine transactions, net income for the third quarter of 2015 would have been $8.3 million, or $0.22 per diluted share.
  • For the third quarter of 2015, Annualized Return on Average Assets was 0.84%, Annualized Return on Average Common Equity was 7.86%, and Annualized Return on Average Tangible Common Equity was 10.96%. As of September 30, 2015, tangible book value per common share was $7.55, an increase of 6.9% compared to December 31, 2014.
  • Net Income for the first nine months of 2015 was $24.0 million, or $0.63 per diluted share, which was $0.8 million, or $0.02 per diluted share, higher than the same period in 2014. Excluding the impact of $734 thousand in non-routine transactions, net income for the first nine months of 2015 would have been $24.5 million, or $0.64 per diluted share. Annualized Return on Average Assets was 0.89%, the Annualized Return on Average Common Equity was 8.24%, and the Annualized Return on Average Tangible Common Equity was 11.56%.
  • The $734 thousand in non-routine transactions included $330 thousand of expenses related to the proposed merger with Pascack Bancorp, Inc., $1.8 million of realized gain when the Company redeemed and extinguished Lakeland Bancorp Capital Trust IV trust preferred securities having a notional value of $10.0 million, $2.4 million of prepayment fees from the repayment of $20.0 million in 4.44% long-term debt, and $173 thousand in net realized gains on the sale of securities relating to the two aforementioned transactions.
  • At September 30, 2015, loans totaled $2.85 billion, an increase of $198.2 million, or 7.5%, compared to December 31, 2014. The overall year-to-date increase was primarily in total commercial loans, which increased by $235.8 million, or 12.9%, aided in part by the new Hudson Valley, N.Y. and Middlesex/Monmouth County, N.J. Loan Production Offices ("LPOs").
  • Noninterest bearing demand deposits totaled $694.3 million at September 30, 2015, an increase of $48.2 million, or 7.5%, since December 31, 2014. As of September 30, 2015, noninterest bearing demand deposits represent 23.8% of total deposits, up from 23.1% at December 31, 2014.
  • On October 23, 2015, the Company declared a quarterly cash dividend of $0.085 per common share, payable on November 16, 2015 to holders of record as of the close of business on November 6, 2015.

Thomas J. Shara, Lakeland Bancorp's President and CEO said, "Total loans and total assets at $2.9 billion and $3.7 billion, respectively, are now at record levels. Our loan growth continues to be driven by our commercial lending teams, which now include meaningful contributions from our recently formed LPOs. For the third quarter, our growth in commercial real estate was 4.8%, and for the last twelve months totaled 14.1%. Our commercial, industrial and other growth for the third quarter was 10.8% and for the last twelve months totaled 25.4%. Our organic loan growth, along with the fully operational LPOs, recent debt prepayments and the anticipated merger with Pascack, have us well positioned for the future."

Earnings

Net Interest Income

Net interest income for the third quarter of 2015 was $29.3 million, an increase of 3.1% as compared to $28.5 million for the same period in 2014. Annualized Net Interest Margin ("NIM") was 3.42%, as compared to 3.46% for the second quarter of 2015 and 3.58% reported in the third quarter of 2014. The 16 basis point decrease in NIM from the third quarter of 2014 to the third quarter of 2015 was primarily driven by a 14 basis point decline in the yield on loans and leases as new and repriced loans were added at lower rates. Average loan and lease balances increased by $202.9 million over this time period. The annualized cost of interest bearing liabilities also increased during this period by five basis points.

Year-to-date 2015 net interest income of $86.5 million increased 2.1% as compared to the $84.7 million reported for the same period in 2014. Annualized NIM for the first nine months of 2015 was 3.48%, as compared to 3.66% for the same period in 2014. The Company's annualized yield on interest earning assets decreased from 3.94% for the first nine months of 2014 to 3.79% for the same period in 2015. The Company's cost of interest bearing liabilities increased from 0.37% for the first nine months of 2014 to 0.42% for the same period in 2015.

Noninterest Income

Noninterest income totaled $6.7 million for the third quarter of 2015, as compared to $4.8 million for the same period in 2014. Excluding the $1.8 million gain on debt extinguishment and $173 thousand net gain on sale of securities related to debt prepayments, total noninterest income totaling $4.7 million was $0.1 million less than the same period in 2014. The gain on sale of mortgage loans at $0.5 million rose by $0.4 million due to an increase in the number of mortgages sold, partially offset by a $0.2 million decline in investment services fee income and a $0.1 million decline in the gain on sale of other real estate property.

For the first nine months of 2015, noninterest income totaled $16.4 million, as compared to $13.3 million for the same period in 2014. Excluding the $1.8 million gain on debt extinguishment and $173 thousand net gain on sale of securities related to debt prepayments, total noninterest income totaling $14.4 million was $1.1 million greater than the same period in 2014. Service charges on deposits totaled $7.4 million and decreased $0.5 million as compared to the same period in 2014, due to reduced demand deposit account fees and overdraft charges. Swap fees yielded $0.4 million during the first nine months of 2015, but none in 2014. Finally, gains on the sale of mortgage loans at $1.2 million exceeded the $0.4 million earned in the same period in 2014 due to an increase in the number of mortgages sold. 

Noninterest Expense

Noninterest expense for the third quarter of 2015 was $23.8 million, as compared to $19.7 million for the same period in 2014.  Excluding the $330 thousand in merger related expenses and $2.4 million of debt prepayment fees, noninterest expense totaling $21.1 million was $1.4 million greater than the same period in 2014. Salary and benefit expense at $12.4 million comprised most of this increase as $0.4 million in salary and benefit expenses were incurred related to the two new LPOs, coupled with year-over-year incremental salary and benefit increases.

For the first nine months of 2015, noninterest expense totaled $65.1 million, as compared to $59.0 million for the same period in 2014. Excluding the $330 thousand in merger related expenses and $2.4 million of debt prepayment fees, noninterest expense totaling $62.3 million was $3.4 million greater than the same period in 2014. Salary and benefit expense at $36.3 million increased by $2.9 million and was the primary driver of the year-over-year increase in noninterest expense. This increase was primarily due to $0.7 million in salary and benefits expenses related to the two new LPOs, coupled with year-over-year incremental salary and benefit increases.

Financial Condition

At September 30, 2015, total assets were $3.74 billion, an increase of $204.8 million, or 5.8%, from December 31, 2014.  As previously mentioned, at September 30, 2015, loans totaled $2.85 billion, an increase of $198.2 million, or 7.5%, compared to December 31, 2014. Total deposits were $2.92 billion, an increase of $128.9 million, or 4.6%, from December 31, 2014.  Noninterest bearing demand deposits at $694.3 million have increased by $48.2 million, or 7.5%, in 2015, while interest bearing deposits at $2.2 billion have increased $80.6 million, or 3.8%, in 2015.

Asset Quality

At September 30, 2015, non-performing assets totaled $22.3 million (0.60% of total assets). The Allowance for Loan and Lease Losses totaled $31.0 million at September 30, 2015 and represented 1.09% of total loans.  In the third quarter of 2015, the Company had net recoveries of $0.5 million, as compared to net charge offs totaling $1.0 million in the third quarter of 2014.  For the first nine months of 2015, the Company had net charge-offs of $1.6 million (0.08% of average loans), as compared to $4.1 million (0.21% of average loans) for the same period in 2014.  The provision for loan and lease losses in the third quarter of 2015 was $0.3 million, compared to $1.2 million in the same quarter of 2014. The provision for loan and lease losses for the first nine months of 2015 was $1.9 million, as compared to $4.3 million for the same period in 2014.

Capital

At September 30, 2015, stockholders' equity was $397.7 million, while book value per common share was $10.49. Tangible book value per common share was $7.55 at September 30, 2015, an increase of 6.9% since December 31, 2014.  As of September 30, 2015, the Company's leverage ratio was 8.77%. Tier I and total risk based capital ratios were 10.81% and 11.93%, respectively. The common equity tier 1 capital ratio was 9.78%. The tangible common equity ratio was 7.88%.  The regulatory capital ratios exceed those necessary to be considered a well-capitalized institution under Federal guidelines.

Regulatory Approvals

The Company and Pascack Bancorp have received approvals from the Federal Deposit Insurance Corporation and the New Jersey Department of Banking and Insurance to complete the merger of the bank subsidiaries, Pascack Community Bank with and into Lakeland Bank. The Federal Reserve Board has advised that the merger of the bank holding companies, Pascack Bancorp with and into the Company, does not require its approval. The merger remains subject to the approval of Pascack Bancorp's shareholders and other customary closing conditions.

Additional Information and Where to Find It

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended. In connection with the proposed mergers, Lakeland Bancorp has filed with the Securities and Exchange Commission a registration statement on Form S-4 that includes a preliminary proxy statement of Pascack Bancorp and a preliminary prospectus of Lakeland Bancorp. The registration statement has not yet become effective. This material is not a substitute for the final proxy statement and prospectus or any other document Lakeland Bancorp may file with the SEC. After the registration statement has been declared effective by the SEC, the definitive proxy statement and prospectus will be delivered to the shareholders of Pascack Bancorp. INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THE DEFINITIVE PROXY STATEMENT AND PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) AND OTHER DOCUMENTS RELATING TO THE TRANSACTIONS THAT HAVE BEEN OR WILL BE FILED BY LAKELAND CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE, BECAUSE THEY CONTAIN AND WILL CONTAIN IMPORTANT INFORMATION. Investors and security holders may obtain a free copy of the registration statement and the definitive proxy statement and prospectus (when available) and other documents filed by Lakeland Bancorp with the SEC at the SEC's web site at www.sec.gov. These documents may be accessed and downloaded for free at Lakeland Bancorp's website at www.lakelandbank.com or by directing a request to Investor Relations, Lakeland Bancorp, Inc., 250 Oak Ridge Road, Oak Ridge, NJ 07438 (973-697-2000). Requests for the definitive proxy statement and prospectus (when available) may also be made to Investor Relations, Pascack Bancorp, Inc., 64 Crescent Avenue, Waldwick, New Jersey 07463 (201-345-9348).

Participants in the Solicitation

This communication is not a solicitation of a proxy from any security holder of Lakeland Bancorp or Pascack Bancorp. However, Lakeland Bancorp, Pascack Bancorp and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from Pascack Bancorp's shareholders in respect of the proposed transaction. Information regarding the directors and executive officers of Lakeland Bancorp may be found in its definitive proxy statement relating to its 2015 Annual Meeting of Shareholders, which was filed with the Commission on April 10, 2015, and can be obtained free of charge from Lakeland Bancorp's website. Information regarding the directors and executive officers of Pascack Bancorp may be found in its definitive proxy statement relating to its 2015 Annual Meeting of Shareholders, and can be obtained free of charge from Pascack Bancorp's website. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interest, by security holdings or otherwise, will be contained in the definitive proxy statement and prospectus and other relevant materials to be filed with the Commission when they become available.

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, failure to obtain the required approval from Pascack Bancorp, Inc. shareholders for the merger of Pascack Bancorp, Inc. into Lakeland Bancorp, Inc. and failure to realize anticipated efficiencies and synergies if the holding company merger and the merger of Pascack Community Bank into Lakeland Bank are consummated. 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 $3.7 billion in total assets with 48 New Jersey branch offices in Bergen, Essex, Morris, Passaic, Somerset, Sussex, Union and Warren counties, five New Jersey regional commercial lending centers in Bernardsville, Montville, Newton, Teaneck and Wyckoff and two commercial loan production offices serving Middlesex and Monmouth counties in New Jersey and the Hudson Valley region of New York. Lakeland Bank 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,
(Dollars in thousands, except per share amounts) 2015 2014 2015 2014
               
INCOME STATEMENT            
Net Interest Income      $ 29,334  $ 28,452  $ 86,521  $ 84,716
Provision for Loan and Lease Losses    (332)  (1,194)  (1,942)  (4,276)
Other Noninterest Income      4,169  4,666  13,119  12,873
Gain on Investment Securities    173  --   190  2
Gain on Sale of Loans      515  143  1,244  378
Gain on Debt Extinguishment    1,830  --   1,830  -- 
Long-Term Debt Prepayment Fee    (2,407)  --   (2,407)  -- 
Merger Related Expenses      (330)  --   (330)  -- 
Other Noninterest Expense    (21,095)  (19,685)  (62,332)  (58,957)
Pretax Income      11,857  12,382  35,893  34,736
Tax Expense      (4,032)  (4,136)  (11,876)  (11,546)
Net Income         $ 7,825  $ 8,246  $ 24,017  $ 23,190
               
Basic Earnings per Common Share    $ 0.20  $ 0.22  $ 0.63  $ 0.61
Diluted Earnings per Common Share    $ 0.20  $ 0.22  $ 0.63  $ 0.61
Dividends per Common Share    $ 0.085  $ 0.075  $ 0.245  $ 0.218
Weighted Average Shares - Basic    37,856  37,738  37,837  37,720
Weighted Average Shares - Diluted    38,016  37,862  37,976  37,838
               
SELECTED OPERATING RATIOS          
Annualized Return on Average Assets   0.84% 0.95% 0.89% 0.92%
Annualized Return on Average Common Equity 7.86% 8.83% 8.24% 8.52%
Annualized Return on Average Tangible Common Equity (1) 10.96% 12.66% 11.56% 12.33%
Annualized Return on Interest Earning Assets 3.75% 3.87% 3.79% 3.94%
Annualized Cost of Interest Bearing Liabilities 0.44% 0.39% 0.42% 0.37%
Annualized Net Interest Spread   3.31% 3.48% 3.37% 3.57%
Annualized Net Interest Margin   3.42% 3.58% 3.48% 3.66%
Efficiency Ratio (1)     60.77% 57.97% 60.68% 59.18%
Stockholders' Equity to Total Assets       10.62% 10.65%
Book Value per Common Share        $ 10.49  $ 9.83
Tangible Book Value per Common Share (1)      $ 7.55  $ 6.87
Tangible Common Equity to Tangible Assets (1)     7.88% 7.69%
               
ASSET QUALITY RATIOS       9/30/2015 9/30/2014
Ratio of Allowance for Loan and Lease Losses to Total Loans    1.09% 1.15%
Non-accruing Loans to Total Loans        0.75% 0.71%
Non-performing Assets to Total Assets        0.60% 0.56%
Annualized Net Charge-Offs to Average Loans      0.08% 0.21%
               
SELECTED BALANCE SHEET DATA AT PERIOD-END     9/30/2015 9/30/2014
Loans and Leases          $ 2,853,764  $ 2,613,404
Allowance for Loan and Lease Losses       (30,994)  (30,047)
Investment Securities          559,295  558,032
Total Assets            3,743,100  3,498,905
Total Deposits         2,919,673  2,776,931
Short-Term Borrowings          131,356  112,796
Other Borrowings          275,666  220,938
Stockholders' Equity         397,687  372,539
               
SELECTED AVERAGE BALANCE SHEET DATA For the Three Months Ended For the Nine Months Ended
        9/30/2015 9/30/2014 9/30/2015 9/30/2014
Loans and Leases, net      $ 2,811,581  $ 2,608,687  $ 2,731,518  $ 2,549,675
Investment Securities      581,565  529,379  588,337  536,313
Interest Earning Assets     3,431,018  3,183,361  3,349,755  3,120,265
Total Assets     3,685,573  3,443,946  3,604,713  3,372,591
Noninterest Bearing Demand Deposits    710,011  671,049  686,652  643,548
Savings Deposits      398,147  382,642  398,491  384,934
Interest Bearing Transaction Accounts    1,497,340  1,457,680  1,491,166  1,444,006
Time Deposits      309,235  280,200  295,460  285,919
Total Deposits     2,914,733  2,791,571  2,871,769  2,758,407
Short-Term Borrowings      61,679  49,725  56,303  61,575
Other Borrowings      297,140  217,049  270,871  173,949
Total Interest Bearing Liabilities    2,563,542  2,387,295  2,512,291  2,350,383
Stockholders' Equity      394,948  370,448  389,604  363,783
               
(1) See supplemental information - Non-GAAP financial measures
 
 
Lakeland Bancorp, Inc.
Consolidated Statements of Operations
(Unaudited)
         
  Three Months Ended September 30, Nine Months Ended September 30,
(Dollars in thousands, except per share amounts) 2015 2014 2015 2014
         
INTEREST INCOME        
Loans and fees $29,123 $27,949 $85,230 $82,405
Federal funds sold and interest bearing deposits with banks  7  24 30 46
Taxable investment securities and other  2,639  2,387 8,001 7,448
Tax exempt investment securities  390  436 1,198 1,376
TOTAL INTEREST INCOME  32,159  30,796 94,459 91,275
INTEREST EXPENSE        
Deposits  1,464  1,256 4,093 3,762
Federal funds purchased and securities sold under agreements to repurchase  33  19 92 69
Other borrowings  1,328  1,069 3,753 2,728
TOTAL INTEREST EXPENSE  2,825  2,344 7,938 6,559
NET INTEREST INCOME  29,334  28,452 86,521 84,716
Provision for loan and lease losses  332  1,194 1,942 4,276
NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES  29,002  27,258 84,579 80,440
NONINTEREST INCOME        
Service charges on deposit accounts  2,614  2,689 7,404 7,911
Commissions and fees  984  1,371 3,487 3,466
Gain on investment securities  173  --  190 2
Gain on sale of loans  515  143 1,244 378
Gain on debt extinguishment  1,830  --  1,830  -- 
Income on bank owned life insurance  455  365 1,542 1,090
Other income  116  241 686 406
TOTAL NONINTEREST INCOME  6,687  4,809 16,383 13,253
NONINTEREST EXPENSE        
Salaries and employee benefits  12,376  11,327 36,270 33,340
Net occupancy expense  2,067  2,017 6,888 6,675
Furniture and equipment  1,881  1,605 5,166 4,958
Stationery, supplies and postage  395  368 1,137 1,056
Marketing expense  396  629 1,052 1,491
FDIC insurance expense  474  489 1,523 1,501
Legal expense  301  144 742 636
Other real estate owned and other repossessed assets expense  27  50 46 165
Long-term debt prepayment fee  2,407  --  2,407  -- 
Merger related expenses  330  --  330  -- 
Core deposit intangible amortization  98  111 316 353
Other expenses  3,080  2,945 9,192 8,782
TOTAL NONINTEREST EXPENSE  23,832  19,685 65,069 58,957
INCOME BEFORE PROVISION FOR INCOME TAXES  11,857  12,382 35,893 34,736
Provision for income taxes  4,032  4,136 11,876 11,546
NET INCOME $7,825 $8,246 $24,017 $23,190
EARNINGS PER COMMON SHARE        
Basic $0.20 $0.22 $0.63 $0.61
Diluted $0.20 $0.22 $0.63 $0.61
DIVIDENDS PER COMMON SHARE $0.085 $0.075 $0.245 $0.218
 
 
Lakeland Bancorp, Inc.
Consolidated Balance Sheets
     
  September 30, December 31,
(Dollars in thousands) 2015 2014
  (Unaudited)  
ASSETS    
Cash and due from banks $117,743 $102,549
Federal funds sold and interest bearing deposits due from banks 5,396 6,767
Total cash and cash equivalents  123,139  109,316
     
Investment securities available for sale, at fair value  424,893  457,449
Investment securities held to maturity; fair value of $123,154 in 2015 and $109,030 in 2014  121,550  107,976
Federal Home Loan Bank and other membership stocks, at cost  12,852  9,846
Loans held for sale  1,920  592
Loans:    
Commercial, secured by real estate  1,776,911  1,593,781
Commercial, industrial and other  290,961  238,252
Leases  55,057  54,749
Residential mortgages  400,247  431,190
Consumer and home equity  330,588  337,642
Total loans  2,853,764  2,655,614
Net deferred costs (2,417)  (1,788)
Allowance for loan and lease losses (30,994) (30,684)
Net loans  2,820,353  2,623,142
Premises and equipment, net  35,439  35,675
Accrued interest receivable  8,827  8,896
Goodwill  109,974  109,974
Other identifiable intangible assets  1,644  1,960
Bank owned life insurance  65,014  57,476
Other assets  17,495  16,023
TOTAL ASSETS $3,743,100 $3,538,325
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
LIABILITIES:    
Deposits:    
Noninterest bearing $694,267 $646,052
Savings and interest bearing transaction accounts  1,907,858  1,864,805
Time deposits under $100,000  164,291  165,625
Time deposits $100,000 and over  153,257  114,337
Total deposits  2,919,673  2,790,819
Federal funds purchased and securities sold under agreements to repurchase  131,356  108,935
Other borrowings  244,428  202,498
Subordinated debentures  31,238  41,238
Other liabilities  18,718  15,397
TOTAL LIABILITIES  3,345,413  3,158,887
     
STOCKHOLDERS' EQUITY:    
Common stock, no par value; authorized 70,000,000 shares; issued 37,906,481 shares at September 30, 2015 and 37,910,840 shares at December 31, 2014  385,941  384,731
Retained Earnings (Accumulated Deficit)  7,861 (6,816)
Accumulated other comprehensive gain  3,885  1,523
TOTAL STOCKHOLDERS' EQUITY  397,687  379,438
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $3,743,100 $3,538,325
 
 
Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
           
  For the Quarter Ended
  Sept 30, Jun 30, Mar 31, Dec 31, Sept 30,
(Dollars in thousands, except per share data) 2015 2015 2015 2014 2014
           
INCOME STATEMENT          
Net Interest Income  $ 29,334  $ 28,669  $ 28,518  $ 28,850  $ 28,452
Provision for Loan and Lease Losses  (332)  (740)  (870)  (1,589)  (1,194)
Other Noninterest Income  4,169  4,477  4,473  4,274  4,666
Gain on Investment Securities  173  17  --   --   -- 
Gain on Sale of Loans  515  464  265  195  143
Gain on Debt Extinguishment  1,830  --   --   --   -- 
Long-Term Debt Prepayment Fee  (2,407)  --   --   --   -- 
Merger Related Expenses  (330)  --   --   --   -- 
Other Noninterest Expense  (21,095)  (21,195)  (20,042)  (20,178)  (19,685)
Pretax Income  11,857  11,692  12,344  11,552  12,382
Tax Expense  (4,032)  (3,830)  (4,014)  (3,613)  (4,136)
Net Income  $ 7,825  $ 7,862  $ 8,330  $ 7,939  $ 8,246
           
           
Basic Earnings Per Common Share  $ 0.20  $ 0.21  $ 0.22  $ 0.21  $ 0.22
Diluted Earnings Per Common Share  $ 0.20  $ 0.21  $ 0.22  $ 0.21  $ 0.22
Dividends Per Common Share  $ 0.085  $ 0.085  $ 0.075  $ 0.075  $ 0.075
Dividends Paid  $ 3,244  $ 3,243  $ 2,852  $ 2,853  $ 2,853
Weighted Average Shares - Basic  37,856  37,854  37,800  37,765  37,738
Weighted Average Shares - Diluted  38,016  37,988  37,937  37,920  37,862
           
SELECTED OPERATING RATIOS          
Annualized Return on Average Assets  0.84% 0.88% 0.96% 0.90% 0.95%
Annualized Return on Average Common Equity  7.86% 8.08% 8.81% 8.35% 8.83%
Annualized Return on Tangible Common Equity (1) 10.96% 11.33% 12.43% 11.87% 12.66%
Annualized Net Interest Margin 3.42% 3.46% 3.56% 3.58% 3.58%
Efficiency Ratio (1) 60.77% 62.09% 59.17% 59.87% 57.97%
Common Stockholders' Equity to Total Assets 10.62% 10.57% 10.70% 10.72% 10.65%
Tangible Common Equity to Tangible Assets (1) 7.88% 7.78% 7.86% 7.81% 7.69%
Tier 1 Risk-Based Ratio (2) 10.81% 11.05% 11.23% 11.76% 11.75%
Total Risk-Based Ratio (2) 11.93% 12.15% 12.37% 12.98% 12.97%
Tier 1 Leverage Ratio (2) 8.77% 9.12% 9.17% 9.08% 9.02%
Common Equity Tier 1 Capital Ratio (2) 9.78% 9.66% 9.79% N/A N/A
Book Value per Common Share  $ 10.49  $ 10.31  $ 10.24  $ 10.01  $ 9.83
Tangible Book Value per Common Share (1)  $ 7.55  $ 7.36  $ 7.29  $ 7.06  $ 6.87
           
(1) See Supplemental Information - Non-GAAP financial measures
(2) Beginning March 31, 2015, these ratios were calculated according to the Basel III capital rules that took effect on January 1, 2015.
 
 
Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
           
  For the Quarter Ended
  Sept 30, Jun 30, Mar 31, Dec 31, Sept 30,
(Dollars in thousands) 2015 2015 2015 2014 2014
           
SELECTED BALANCE SHEET DATA AT PERIOD-END          
Loans and Leases  $ 2,853,764  $ 2,756,694  $ 2,691,705  $ 2,655,614  $ 2,613,404
Allowance for Loan and Lease Losses  (30,994)  (30,174)  (30,505)  (30,684)  (30,047)
Investment Securities  559,295  597,598  599,986  575,271  558,032
Total Assets  3,743,100  3,699,127  3,627,764  3,538,325  3,498,905
Total Deposits  2,919,673  2,842,953  2,842,565  2,790,819  2,776,931
Short-Term Borrowings  131,356  146,249  117,351  108,935  112,796
Other Borrowings  275,666  303,966  263,966  243,736  220,938
Stockholders' Equity  397,687  390,860  388,084  379,438  372,539
           
Loans and Leases          
Commercial Real Estate  $ 1,776,911  $ 1,695,276  $ 1,636,128  $ 1,593,781  $ 1,557,168
Commercial, Industrial and Other  290,961  262,617  244,162  238,252  231,961
Leases  55,057  53,798  54,271  54,749  52,285
Residential Mortgages  400,247  414,339  426,339  431,190  431,477
Consumer and Home Equity  330,588  330,664  330,805  337,642  340,513
Total Loans  $ 2,853,764  $ 2,756,694  $ 2,691,705  $ 2,655,614  $ 2,613,404
           
Deposits          
Noninterest Bearing  $ 694,267  $ 714,227  $ 672,264  $ 646,052  $ 674,933
Savings and Interest Bearing Transaction Accounts  1,907,858  1,822,295  1,878,598  1,864,805  1,820,657
Time Deposits Under $100,000  164,291  165,105  164,946  165,625  168,391
Time Deposits $100,000 and Over  153,257  141,326  126,757  114,337  112,950
Total Deposits  $ 2,919,673  $ 2,842,953  $ 2,842,565  $ 2,790,819  $ 2,776,931
           
SELECTED AVERAGE BALANCE SHEET DATA          
Loans and Leases, net  $ 2,811,581  $ 2,720,801  $ 2,660,512  $ 2,622,602  $ 2,608,687
Investment Securities  581,565  600,547  582,912  566,039  529,379
Interest Earning Assets  3,431,018  3,345,380  3,271,110  3,227,390  3,183,361
Total Assets  3,685,573  3,600,416  3,526,898  3,483,162  3,443,946
Noninterest Bearing Demand Deposits  710,011  688,854  660,548  679,796  671,049
Savings Deposits  398,147  402,142  395,153  384,064  382,642
Interest Bearing Transaction Accounts  1,497,340  1,480,866  1,495,270  1,487,492  1,457,680
Time Deposits  309,235  295,996  280,837  277,930  280,200
Total Deposits  2,914,733  2,867,858  2,831,808  2,829,282  2,791,571
Short-Term Borrowings  61,679  59,249  47,827  38,653  49,725
Other Borrowings  297,140  267,610  247,316  221,848  217,049
Total Interest Bearing Liabilities  2,563,542  2,505,863  2,466,403  2,409,988  2,387,295
Stockholders' Equity  394,948  390,151  383,587  377,379  370,448
 
 
Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
           
  For the Quarter Ended
  Sept 30, Jun 30, Mar 31, Dec 31, Sept 30,
(Dollars in thousands) 2015 2015 2015 2014 2014
           
AVERAGE ANNUALIZED YIELDS (Taxable Equivalent Basis)          
Assets:          
Loans and leases 4.11% 4.16% 4.25% 4.26% 4.25%
Taxable investment securities and other 2.06% 2.02% 2.08% 2.09% 2.08%
Tax-exempt securities 3.41% 3.58% 3.67% 3.75% 3.79%
Federal funds sold and interest bearing cash accounts 0.07% 0.18% 0.17% 0.26% 0.21%
Total interest earning assets 3.75% 3.78% 3.86% 3.87% 3.87%
           
Liabilities:          
Savings accounts 0.05% 0.05% 0.05% 0.05% 0.05%
Interest bearing transaction accounts 0.25% 0.23% 0.23% 0.23% 0.23%
Time deposits 0.63% 0.59% 0.56% 0.54% 0.49%
Borrowings 1.52% 1.58% 1.61% 1.65% 1.63%
Total interest bearing liabilities 0.44% 0.42% 0.40% 0.39% 0.39%
Net interest spread (taxable equivalent basis) 3.31% 3.36% 3.46% 3.48% 3.48%
           
Annualized net interest margin (taxable equivalent basis) 3.42% 3.46% 3.56% 3.58% 3.58%
Annualized cost of deposits 0.20% 0.19% 0.18% 0.18% 0.18%
           
ASSET QUALITY DATA          
Allowance for Loan and Lease Losses          
Balance at beginning of period  $ 30,174  $ 30,505  $ 30,684  $ 30,047  $ 29,866
Provision for loan losses  332  740  870  1,589  1,194
Net recoveries (charge-offs)  488  (1,071)  (1,049)  (952)  (1,013)
Balance at end of period  $ 30,994  $ 30,174  $ 30,505  $ 30,684  $ 30,047
           
Net Loan Charge-offs (Recoveries)          
Commercial real estate  $ (936)  $ 476  $ 426  $ (287)  $ 28
Commercial, industrial and other  88  21  (31)  99  (71)
Leases  13  102  407  185  229
Home equity and consumer  204  386  231  860  638
Real estate - mortgage  143  86  16  95  189
Net charge-offs (recoveries)  $ (488)  $ 1,071  $ 1,049  $ 952  $ 1,013
           
Non-performing Assets          
Commercial real estate  $ 8,176  $ 5,307  $ 6,994  $ 7,612  $ 8,549
Commercial, industrial and other  832  1,354  285  308  599
Leases  154  79  111  88  141
Home equity and consumer  3,530  3,143  3,472  3,415  2,114
Real estate - mortgage  8,805  9,098  9,552  9,246  7,221
Total non-accruing loans  21,497  18,981  20,414  20,669  18,624
Property acquired through foreclosure or repossession  819  1,078  826  1,026  982
Total non-performing assets  $ 22,316  $ 20,059  $ 21,240  $ 21,695  $ 19,606
           
Loans past due 90 days or more and still accruing  $ 123  $ 102  $ 134  $ 66  $ 429
Loans restructured and still accruing  $ 11,927  $ 12,419  $ 11,538  $ 10,579  $ 7,957
           
Ratio of allowance for loan and lease losses to total loans 1.09% 1.09% 1.13% 1.16% 1.15%
Non-performing loans to total loans 0.75% 0.69% 0.76% 0.78% 0.71%
Non-performing assets to total assets 0.60% 0.54% 0.59% 0.61% 0.56%
Annualized net charge-offs (recoveries) to average loans -0.07% 0.16% 0.16% 0.15% 0.16%
 
 
Lakeland Bancorp, Inc.
Supplemental Information - Non-GAAP Financial Measures
(Unaudited)
           
  At or for the Quarter Ended
  Sept 30, Jun 30, Mar 31, Dec 31, Sept 30,
(Dollars in thousands, except per share amounts) 2015 2015 2015 2014 2014
           
Calculation of tangible book value per common share          
Total common stockholders' equity at end of period - GAAP  $ 397,687  $ 390,860  $ 388,084  $ 379,438  $ 372,539
Less:          
Goodwill  109,974  109,974  109,974  109,974  109,974
Other identifiable intangible assets, net  1,644  1,742  1,849  1,960  2,071
Total tangible common stockholders' equity at end of period - Non-GAAP  $ 286,069  $ 279,144  $ 276,261  $ 267,504  $ 260,494
           
Shares outstanding at end of period  37,906  37,903  37,900  37,911  37,910
           
Book value per share - GAAP  $ 10.49  $ 10.31  $ 10.24  $ 10.01  $ 9.83
           
Tangible book value per share - Non-GAAP  $ 7.55  $ 7.36  $ 7.29  $ 7.06  $ 6.87
           
Calculation of tangible common equity to tangible assets          
Total tangible common stockholders' equity at end of period - Non-GAAP  $ 286,069  $ 279,144  $ 276,261  $ 267,504  $ 260,494
           
Total assets at end of period  $ 3,743,100  $ 3,699,127  $ 3,627,764  $ 3,538,325  $ 3,498,905
Less:          
Goodwill  109,974  109,974  109,974  109,974  109,974
Other identifiable intangible assets, net  1,644  1,742  1,849  1,960  2,071
Total tangible assets at end of period - Non-GAAP  $ 3,631,482  $ 3,587,411  $ 3,515,941  $ 3,426,391  $ 3,386,860
           
Common equity to assets - GAAP 10.62% 10.57% 10.70% 10.72% 10.65%
           
Tangible common equity to tangible assets - Non-GAAP 7.88% 7.78% 7.86% 7.81% 7.69%
           
Calculation of return on average tangible common equity          
Net income - GAAP  $ 7,825  $ 7,862  $ 8,330  $ 7,939  $ 8,246
           
Total average common stockholders' equity  $ 394,948  $ 390,151  $ 383,587  $ 377,379  $ 370,448
Less:          
Average goodwill  109,974  109,974  109,974  109,974  109,974
Average other identifiable intangible assets, net  1,706  1,807  1,919  2,028  2,141
Total average tangible common stockholders' equity - Non-GAAP  $ 283,268  $ 278,370  $ 271,694  $ 265,377  $ 258,333
           
Return on average common stockholders' equity - GAAP 7.86% 8.08% 8.81% 8.35% 8.83%
           
Return on average tangible common stockholders' equity - Non-GAAP 10.96% 11.33% 12.43% 11.87% 12.66%
           
Calculation of efficiency ratio          
Total noninterest expense  $ 23,832  $ 21,195  $ 20,042  $ 20,178  $ 19,685
Amortization of core deposit intangibles  (98)  (107)  (111)  (111)  (111)
Other real estate owned and other repossessed asset (expense) income  (27)  (27)  8  (69)  (50)
Long-term debt prepayment fee  (2,407)  --   --   --   -- 
Merger related expenses  (330)  --   --   --   -- 
Provision for unfunded lending commitments, net  (168)  (60)  (130)  89  (106)
Noninterest expense, as adjusted  $ 20,802  $ 21,001  $ 19,809  $ 20,087  $ 19,418
           
Net interest income  $ 29,334  $ 28,669  $ 28,518  $ 28,850  $ 28,452
Total noninterest income  6,687  4,958  4,738  4,469  4,809
Total revenue  36,021  33,627  33,256  33,319  33,261
Tax-equivalent adjustment on municipal securities  210  214  221  231  235
Gains on debt extinguishment  (1,830)  --   --   --   -- 
Gains on sales investment securities  (173)  (17)  --   --   -- 
Total revenue, as adjusted  $ 34,228  $ 33,824  $ 33,477  $ 33,550  $ 33,496
           
Efficiency ratio - Non-GAAP 60.77% 62.09% 59.17% 59.87% 57.97%
 
 
Lakeland Bancorp, Inc.
Supplemental Information - Non-GAAP Financial Measures
(Unaudited)
 
  For the Nine Months Ended,
  Sept 30, Sept 30,
(Dollars in thousands, except per share amounts) 2015 2014
     
Calculation of return on average tangible common equity    
Net income - GAAP  $ 24,017  $ 23,190
     
Total average common stockholders' equity  $ 389,604  $ 363,783
Less:    
Average goodwill  109,974  109,974
Average other identifiable intangible assets, net  1,810  2,257
Total average tangible common stockholders' equity - Non-GAAP  $ 277,820  $ 251,552
     
Return on average common stockholders' equity - GAAP 8.24% 8.52%
     
Return on average tangible common stockholders' equity - Non-GAAP 11.56% 12.33%
     
Calculation of efficiency ratio    
Total noninterest expense  $ 65,069  $ 58,957
Amortization of core deposit intangibles  (316)  (353)
Other real estate owned and other repossessed asset expense  (46)  (165)
Long-term debt prepayment fee  (2,407)  -- 
Merger related expenses  (330)  -- 
Provision for unfunded lending commitments  (358)  (24)
Noninterest expense, as adjusted  $ 61,612  $ 58,415
     
Net interest income  $ 86,521  $ 84,716
Noninterest income  16,383  13,253
Total revenue  102,904  97,969
Tax-equivalent adjustment on municipal securities  645  741
Gains on investment securities  (190)  (2)
Gains on extinguishment of debt  (1,830)  -- 
Total revenue, as adjusted  $ 101,529  $ 98,708
     
Efficiency ratio - Non-GAAP 60.68% 59.18%
CONTACT: Thomas J. Shara President & CEO Joseph F. Hurley EVP & CFO 973-697-2000
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