Lakeland Bancorp Announces First Quarter Results and Increases Dividend
OAK RIDGE, N.J., April 27, 2021 (GLOBE NEWSWIRE) — Lakeland Bancorp, Inc. (NASDAQ: LBAI) (the “Company”), the parent company of Lakeland Bank (“Lakeland”), reported net income of $23.2 million and earnings per diluted share (“EPS”) of $0.45 for the three months ended March 31, 2021 compared to net income of $12.4 million and diluted EPS of $0.24 for the three months ended March 31, 2020. For the first quarter of 2021, annualized return on average assets was 1.22%, annualized return on average common equity was 12.20% and annualized return on average tangible common equity was 15.39%.
First quarter 2021 results were favorably impacted by a negative provision for credit losses of $2.6 million compared to a provision of $9.2 million for the same period last year. The negative provision for credit losses was due primarily to an improvement in forecasted macroeconomic conditions and continued strength in asset quality.
Thomas Shara, Lakeland Bancorp’s President and CEO commented, “I want to thank all of our Lakeland associates who unselfishly continue to deliver banking services to our customers and businesses while ensuring the safety and well-being of their fellow associates and our customers. Their commitment has been outstanding. Despite the ongoing pandemic, we are encouraged that our customers and local economy are faring well as evidenced by the continued improvements in asset quality with non-accrual loans and non-performing asset levels dropping below pre-COVID levels. As a result, we released a small portion of our loan reserves and will continue to monitor economic conditions closely as we progress into 2021.”
Regarding the Company’s financial results, Mr. Shara continued, “The quarterly results were record earnings for Lakeland which were bolstered by an 11 basis point increase in our net interest margin and an increase in pre-tax income. Considering our continued success, the Board authorized an annualized 8% increase in our cash dividend.”
First Quarter 2021 Highlights
- Net interest margin increased to 3.19% compared to 3.08% in the fourth quarter of 2020.
- Deposit growth was strong increasing $179.4 million or 3%, including $121.7 million in noninterest-bearing deposits.
- Due to an improvement in forecasted macroeconomic conditions and continued strength in asset quality, a $2.6 million negative provision for credit losses was recorded in the first quarter of 2021.
- At March 31, 2021, there were no loans on payment deferral compared to $9.7 million, or 0.2% of total loans at December 31, 2020.
- Paycheck Protection Program (“PPP”) loans totaled $346.2 million at March 31, 2021, with $133.2 million in new PPP loans booked during the first quarter of 2021. Unamortized net deferred fees on PPP loans totaled $8.1 million at March 31, 2021.
Net Interest Margin and Net Interest Income
Net interest margin for the first quarter of 2021 of 3.19% decreased 9 basis points compared to the first quarter of 2020 and increased 11 basis points compared to the fourth quarter of 2020. The decrease in net interest margin compared to the first quarter of 2020 was due primarily to a decrease in the yield on interest-earning assets partially offset by a significant decrease in the cost of interest-bearing liabilities, while the increase in net interest margin compared to the fourth quarter of 2020 was due primarily to a decrease in the cost of interest-bearing deposits.
The yield on interest-earning assets for the first quarter of 2021 was 3.56% compared to 4.17% for the first quarter of 2020 and 3.51% for the fourth quarter of 2020. The current quarter decrease in yield on interest-earning assets, when compared to the first quarter of 2020, was due primarily to a reduction in the yield on loans due to decreases in the prime rate and LIBOR during 2020, an increase in lower yielding federal funds sold, as well as the origination of PPP loans during 2020, which earn an effective yield of 2.50% including amortization of fees and costs. The increase in yield on interest-earning assets, when compared to the fourth quarter of 2020 was due primarily to an increase in higher yielding average loans and securities as well as a reduction in lower yielding average federal funds sold.
The cost of interest-bearing liabilities for the first quarter of 2021 was 0.51% compared to 1.18% for the first quarter of 2020 and 0.59% for the fourth quarter of 2020. The cost of interest-bearing transaction accounts and time deposits has decreased since 2020 largely driven by reductions in market interest rates.
Net interest income for the first quarter of 2021 of $56.7 million increased $6.8 million and $1.6 million, respectively, compared to the first quarter of 2020 and the fourth quarter of 2020. The increase in net interest income compared to prior periods was due primarily to a reduction in the cost of interest-bearing deposits as well as growth in the volume of interest-earning assets.
Noninterest Income
Noninterest income decreased $2.3 million to $5.8 million for the first quarter of 2021 from $8.0 million for the first quarter of 2020 due primarily to a $2.3 million decrease in swap income. Service charges on deposit accounts for the first quarter of 2021 decreased $204,000 compared to the first quarter of 2020 due primarily to changes in customer behavior resulting from the pandemic. Losses on equity securities of $144,000 in the first quarter of 2021 compared to losses of $653,000 during the same period in 2020. Gains on sales of loans for the first quarter of 2021 increased $293,000 compared to the first quarter of 2020 due primarily to increased loan sale volume driven by lower interest rates. Additionally, first quarter 2020 results included $342,000 in gains on sales of investment securities compared to none in the first quarter of 2021.
Noninterest Expense
Noninterest expense totaled $33.9 million for the first quarter of 2021 and increased $1.4 million compared to the first quarter of 2020. Salary and employee benefit expense for the first quarter of 2021 increased $791,000, or 4%, when compared to the same quarter of 2020 as a result of staff additions and normal merit increases. Net occupancy expense increased $183,000 compared to the first quarter of 2020 primarily resulting from an increase in cleaning and snow removal expenses. Furniture and equipment expense increased $739,000 compared to the first quarter of 2020 predominately driven by an increase in costs associated with the Company’s digital strategy initiative. FDIC insurance expense totaled $711,000 for the first quarter of 2021 and increased $413,000 compared to the same period in 2020 due primarily to deposit growth and assessment credits recorded in the first quarter of 2020. Other expenses in the first quarter of 2021 were $487,000 less than the first quarter of 2020 primarily resulting from a decrease in appraisal fees, consulting, travel and entertainment expenses. Additionally, first quarter 2020 results included $356,000 in long-term debt prepayment fees compared to none in the first quarter of 2021.
Income Tax Expense
The effective tax rate for the first quarter of 2021 was 25.8% compared to 23.4% for the first quarter of 2020. The increased effective tax rate for the first quarter of 2021 was primarily a result of tax advantaged items declining as a percentage of pretax income.
Financial Condition
At March 31, 2021, total assets were $7.77 billion, an increase of $107.5 million compared to December 31, 2020. For the three months ended March 31, 2021, total loans grew $87.7 million to $6.11 billion and investment securities increased $105.6 million to $1.08 billion. On the funding side, total deposits increased $179.4 million to $6.64 billion, while borrowings decreased $57.6 million to $255.3 million. At March 31, 2021, total loans as a percent of total deposits was 92.1%.
Asset Quality
At March 31, 2021, non-performing assets decreased to $31.1 million, 0.40% of total assets, compared to $42.8 million, 0.56% of total assets, at December 31, 2020. Non-accrual loans as a percent of total loans decreased 28% to 0.51% at March 31, 2021 compared to 0.71% at December 31, 2020. The allowance for credit losses decreased to $67.3 million, 1.10% of total loans, at March 31, 2021, compared to $71.1 million, 1.18% of total loans, at December 31, 2020. As of March 31, 2021, the allowance for credit losses to total loans less PPP loans of $346.2 million, was 1.17%. In the first quarter of 2021, the Company had net charge-offs of $1.1 million, or 0.07% of average loans, annualized, compared to $342,000, or 0.03%, for the same period in 2020. The provision for credit losses for the first quarter of 2021 was a benefit of $2.6 million compared to provision of $9.2 million in the first quarter of 2020. At March 31, 2021 Cares Act modifications totaled $43.2 million compared to $40.0 million at December 31, 2020.
Capital
At March 31, 2021, stockholders’ equity was $768.1 million compared to $763.8 million at December 31, 2020, a 1% increase. Lakeland Bank remains above FDIC “well capitalized” standards, with a Tier 1 leverage ratio of 8.51% at March 31, 2021. The book value per common share and tangible book value per common share increased 4% and 5% to $15.18 and $12.03, respectively, compared to $14.60 and $11.43 at March 31, 2020 (see “Supplemental Information – Non-GAAP Financial Measures” for a reconciliation of non-GAAP financial measures, including tangible book value). At March 31, 2021, the Company’s common equity to assets ratio and tangible common equity to tangible assets ratio was 9.88% and 8.00%, respectively, compared to 9.97% and 8.05% at December 31, 2020. Excluding the impact of the PPP loans of $346.2 million, the Company’s common equity to assets ratio and tangible common equity to tangible assets ratio was 10.34% and 8.38%, respectively, at March 31, 2021. On April 23, 2021, the Company declared a quarterly cash dividend of $0.135 per share to be paid on May 18, 2021, to shareholders of record as of May 7, 2021.
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. Accordingly, you should not place undue reliance on forward-looking statements. In addition to the specific risk factors disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, 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, and competition. Further, given its ongoing and dynamic nature, it is difficult to predict the continuing effects that the COVID-19 pandemic will have on our business and results of operations. The pandemic and related local and national economic disruption may, among other effects, result in a material adverse change for the demand for our products and services; increased levels of loan delinquencies, problem assets and foreclosures; branch disruptions, unavailability of personnel and increased cybersecurity risks as employees work remotely. 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.
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.
Specifically, 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, 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, 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 “Supplemental Information – Non-GAAP Financial Measures” for a reconciliation of non-GAAP financial measures.
About Lakeland
Lakeland Bank is the wholly-owned subsidiary of Lakeland Bancorp, Inc. (NASDAQ:LBAI), which had $7.77 billion in total assets at March 31, 2021. 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 one of New Jersey’s 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 or 973-697-2000 for more information.
| Thomas J. Shara | Thomas F. Splaine |
| President & CEO | EVP & CFO |
| Lakeland Bancorp, Inc. | ||||||||
| Consolidated Statements of Income | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended March 31, | ||||||||
| (Dollars in thousands, except per share amounts) | 2021 | 2020 | ||||||
| Interest Income | ||||||||
| Loans and fees | $ | 58,778 | $ | 57,857 | ||||
| Federal funds sold and interest-bearing deposits with banks | 37 | 159 | ||||||
| Taxable investment securities and other | 3,981 | 5,229 | ||||||
| Tax exempt investment securities | 612 | 332 | ||||||
| Total Interest Income | 63,408 | 63,577 | ||||||
| Interest Expense | ||||||||
| Deposits | 5,124 | 10,863 | ||||||
| Federal funds purchased and securities sold under agreements to repurchase | 23 | 429 | ||||||
| Other borrowings | 1,533 | 2,386 | ||||||
| Total Interest Expense | 6,680 | 13,678 | ||||||
| Net Interest Income | 56,728 | 49,899 | ||||||
| Provision for credit losses | (2,642 | ) | 9,223 | |||||
| Net Interest Income after Provision for Credit Losses | 59,370 | 40,676 | ||||||
| Noninterest Income | ||||||||
| Service charges on deposit accounts | 2,296 | 2,500 | ||||||
| Commissions and fees | 1,598 | 1,640 | ||||||
| Income on bank owned life insurance | 634 | 665 | ||||||
| Loss on equity securities | (144 | ) | (653 | ) | ||||
| Gains on sales of loans | 708 | 415 | ||||||
| Gains on sales and calls of investment securities,net | — | 342 | ||||||
| Swap income | 562 | 2,843 | ||||||
| Other income | 105 | 259 | ||||||
| Total Noninterest Income | 5,759 | 8,011 | ||||||
| Noninterest Expense | ||||||||
| Salaries and employee benefit expense | 20,518 | 19,727 | ||||||
| Net occupancy expense | 3,019 | 2,836 | ||||||
| Furniture and equipment expense | 3,299 | 2,560 | ||||||
| FDIC insurance expense | 711 | 298 | ||||||
| Stationary, supplies and postage expense | 378 | 399 | ||||||
| Marketing expense | 318 | 227 | ||||||
| Data processing expense | 1,255 | 1,253 | ||||||
| Telecommunications expense | 522 | 444 | ||||||
| ATM and debit card expense | 604 | 587 | ||||||
| Core deposit intangible amortization | 226 | 265 | ||||||
| Other real estate owned and other repossessed assets expense | — | 12 | ||||||
| Long-term debt prepayment fee | — | 356 | ||||||
| Other expenses | 3,053 | 3,540 | ||||||
| Total Noninterest Expense | 33,903 | 32,504 | ||||||
| Income before Provision for Income Taxes | 31,226 | 16,183 | ||||||
| Provision for income taxes | 8,051 | 3,791 | ||||||
| Net Income | $ | 23,175 | $ | 12,392 | ||||
| Earnings Per Common Share | ||||||||
| Basic | $ | 0.45 | $ | 0.24 | ||||
| Diluted | $ | 0.45 | $ | 0.24 | ||||
| Dividends Per Common Share | $ | 0.125 | $ | 0.125 | ||||
| Lakeland Bancorp, Inc. | |||||||
| Consolidated Balance Sheets | |||||||
| (Dollars in thousands) | March 31, 2021 | December 31, 2020 | |||||
| (Unaudited) | |||||||
| Assets | |||||||
| Cash | $ | 189,506 | $ | 262,327 | |||
| Interest-bearing deposits due from banks | 12,612 | 7,763 | |||||
| Total cash and cash equivalents | 202,118 | 270,090 | |||||
| Investment securities available for sale, at estimated fair value (allowance for credit losses of $144 at March 31, 2021 and $2 at December 31, 2020 ) | 968,394 | 855,746 | |||||
| Investment securities held to maturity (estimated fair value of $87,215 at March 31, 2021 and $93,868 at December 31, 2020, no allowance for credit losses at March 31, 2021 and December 31, 2020 ) | 84,994 | 90,766 | |||||
| Equity securities, at fair value | 14,590 | 14,694 | |||||
| Federal Home Loan Bank and other membership stocks, at cost | 10,772 | 11,979 | |||||
| Loans held for sale | 1,230 | 1,335 | |||||
| Loans, net of deferred fees | 6,108,946 | 6,021,232 | |||||
| Less: Allowance for credit losses | 67,252 | 71,124 | |||||
| Net loans | 6,041,694 | 5,950,108 | |||||
| Premises and equipment, net | 48,539 | 48,495 | |||||
| Operating lease right-of-use assets | 16,199 | 16,772 | |||||
| Accrued interest receivable | 19,840 | 19,339 | |||||
| Goodwill | 156,277 | 156,277 | |||||
| Other identifiable intangible assets | 3,063 | 3,288 | |||||
| Bank owned life insurance | 115,756 | 115,115 | |||||
| Other assets | 88,295 | 110,293 | |||||
| Total Assets | $ | 7,771,761 | $ | 7,664,297 | |||
| Liabilities and Stockholders’ Equity | |||||||
| Liabilities | |||||||
| Deposits: | |||||||
| Noninterest-bearing | $ | 1,631,942 | $ | 1,510,224 | |||
| Savings and interest-bearing transaction accounts | 4,049,914 | 3,867,303 | |||||
| Time deposits $250 thousand and under | 794,283 | 895,056 | |||||
| Time deposits over $250 thousand | 159,087 | 183,200 | |||||
| Total deposits | 6,635,226 | 6,455,783 | |||||
| Federal funds purchased and securities sold under agreements to repurchase | 111,999 | 169,560 | |||||
| Other borrowings | 25,000 | 25,000 | |||||
| Subordinated debentures | 118,267 | 118,257 | |||||
| Operating lease liabilities | 17,574 | 18,183 | |||||
| Other liabilities | 95,630 | 113,730 | |||||
| Total Liabilities | 7,003,696 | 6,900,513 | |||||
| Stockholders’ Equity | |||||||
| Common stock, no par value; authorized 100,000,000 shares; issued 50,729,527 shares and outstanding 50,598,492 shares at March 31, 2021 and issued 50,610,681 shares and outstanding 50,479,646 shares at December 31, 2020 | 562,984 | 562,421 | |||||
| Retained earnings | 208,224 | 191,418 | |||||
| Treasury shares, at cost, 131,035 shares at March 31, 2021 and December 31, 2020 | (1,452 | ) | (1,452 | ) | |||
| Accumulated other comprehensive (loss) income | (1,691 | ) | 11,397 | ||||
| Total Stockholders’ Equity | 768,065 | 763,784 | |||||
| Total Liabilities and Stockholders’ Equity | $ | 7,771,761 | $ | 7,664,297 | |||
| Lakeland Bancorp, Inc. | |||||||||||||||||||
| Financial Highlights | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| For the Quarter Ended | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| (Dollars in thousands, except per share data) | 2021 | 2020 | 2020 | 2020 | 2020 | ||||||||||||||
| Income Statement | |||||||||||||||||||
| Net interest income | $ | 56,728 | $ | 55,135 | $ | 52,134 | $ | 50,519 | $ | 49,899 | |||||||||
| Provision for credit losses (1) | 2,642 | (789) | (8,000) | (9,000) | (9,223) | ||||||||||||||
| Gains on sales of investment securities | — | 871 | — | — | 342 | ||||||||||||||
| Gains on sales of loans | 708 | 760 | 1,437 | 710 | 415 | ||||||||||||||
| (Loss) gain on equity securities | (144) | 73 | (170) | 198 | (653) | ||||||||||||||
| Other noninterest income | 5,195 | 5,141 | 5,506 | 4,573 | 7,907 | ||||||||||||||
| Long-term debt prepayment fee | — | (3,777) | — | — | (356) | ||||||||||||||
| Other noninterest expense | (33,903) | (33,168) | (32,097) | (31,462) | (32,148) | ||||||||||||||
| Pretax income | 31,226 | 24,246 | 18,810 | 15,538 | 16,183 | ||||||||||||||
| Provision for income taxes | (8,051) | (5,398) | (4,383) | (3,687) | (3,791) | ||||||||||||||
| Net income | $ | 23,175 | $ | 18,848 | $ | 14,427 | $ | 11,851 | $ | 12,392 | |||||||||
| Basic earnings per common share | $ | 0.45 | $ | 0.37 | $ | 0.28 | $ | 0.23 | $ | 0.24 | |||||||||
| Diluted earnings per common share | $ | 0.45 | $ | 0.37 | $ | 0.28 | $ | 0.23 | $ | 0.24 | |||||||||
| Dividends paid per common share | $ | 0.125 | $ | 0.125 | $ | 0.125 | $ | 0.125 | $ | 0.125 | |||||||||
| Dividends paid | $ | 6,369 | $ | 6,364 | $ | 6,365 | $ | 6,365 | $ | 6,364 | |||||||||
| Weighted average shares – basic | 50,576 | 50,527 | 50,526 | 50,522 | 50,586 | ||||||||||||||
| Weighted average shares – diluted | 50,780 | 50,672 | 50,620 | 50,593 | 50,728 | ||||||||||||||
| Selected Operating Ratios | |||||||||||||||||||
| Annualized return on average assets | 1.22 | % | 0.98 | % | 0.76 | % | 0.67 | % | 0.76 | % | |||||||||
| Annualized return on average common equity | 12.20 | % | 9.96 | % | 7.64 | % | 6.42 | % | 6.77 | % | |||||||||
| Annualized return on average tangible common equity (2) | 15.39 | % | 12.64 | % | 9.71 | % | 8.19 | % | 8.65 | % | |||||||||
| Annualized net interest margin | 3.19 | % | 3.08 | % | 2.96 | % | 3.06 | % | 3.28 | % | |||||||||
| Efficiency ratio (2) | 53.75 | % | 53.74 | % | 53.96 | % | 55.62 | % | 55.30 | % | |||||||||
| Common stockholders’ equity to total assets | 9.88 | % | 9.97 | % | 10.02 | % | 9.96 | % | 10.51 | % | |||||||||
| Tangible common equity to tangible assets (2) | 8.00 | % | 8.05 | % | 8.06 | % | 7.99 | % | 8.41 | % | |||||||||
| Tier 1 risk-based ratio | 10.47 | % | 10.22 | % | 10.34 | % | 10.45 | % | 10.61 | % | |||||||||
| Total risk-based ratio | 13.02 | % | 12.85 | % | 12.93 | % | 12.98 | % | 13.04 | % | |||||||||
| Tier 1 leverage ratio | 8.51 | % | 8.37 | % | 8.36 | % | 8.69 | % | 9.38 | % | |||||||||
| Common equity tier 1 capital ratio | 9.98 | % | 9.73 | % | 9.83 | % | 9.93 | % | 10.08 | % | |||||||||
| Book value per common share | $ | 15.18 | $ | 15.13 | $ | 14.93 | $ | 14.77 | $ | 14.60 | |||||||||
| Tangible book value per common share (2) | $ | 12.03 | $ | 11.97 | $ | 11.77 | $ | 11.60 | $ | 11.43 | |||||||||
(1) The Company adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“CECL”) on December 31, 2020, with a transition adjustment retroactive to January 1, 2020. Quarterly amounts for the first, second and third quarters of 2020 do not reflect the adoption of CECL.
(2) See Supplemental Information – Non-GAAP Financial Measures
| Lakeland Bancorp, Inc. | |||||||||||||||
| Financial Highlights | |||||||||||||||
| (Unaudited) | |||||||||||||||
| For the Quarter Ended | |||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||
| (Dollars in thousands) | 2021 | 2020 | 2020 | 2020 | 2020 | ||||||||||
| Selected Balance Sheet Data at Period End | |||||||||||||||
| Loans | $ | 6,108,946 | $ | 6,021,232 | $ | 5,843,591 | $ | 5,756,155 | $ | 5,328,623 | |||||
| Allowance for credit losses on loans (3) | 67,252 | 71,124 | 65,242 | 57,839 | 48,884 | ||||||||||
| Investment securities | 1,078,750 | 973,185 | 909,535 | 957,985 | 974,319 | ||||||||||
| Total assets | 7,771,761 | 7,664,297 | 7,522,184 | 7,488,516 | 7,013,908 | ||||||||||
| Total deposits | 6,635,226 | 6,455,783 | 6,266,516 | 6,125,502 | 5,455,138 | ||||||||||
| Short-term borrowings | 111,999 | 169,560 | 97,874 | 183,116 | 419,085 | ||||||||||
| Other borrowings | 143,267 | 143,257 | 253,359 | 273,954 | 258,944 | ||||||||||
| Stockholders’ equity | 768,065 | 763,784 | 753,572 | 745,489 | 736,922 | ||||||||||
| Loans | |||||||||||||||
| Non-owner occupied commercial | $ | 2,375,024 | $ | 2,398,946 | |||||||||||
| Owner occupied commercial | 857,506 | 827,092 | |||||||||||||
| Multifamily | 858,168 | 813,225 | |||||||||||||
| Non-owner occupied residential | 195,534 | 200,229 | |||||||||||||
| Total commercial, secured by real estate (3) | $ | 4,286,232 | $ | 4,239,492 | $ | 4,042,946 | $ | 3,955,045 | $ | 3,734,565 | |||||
| Commercial, industrial and other | 394,416 | 433,553 | 418,813 | 393,017 | 467,286 | ||||||||||
| Construction | 291,252 | 266,883 | 275,716 | 298,180 | 332,228 | ||||||||||
| Paycheck Protection Program | 346,150 | 284,636 | 325,115 | 325,999 | — | ||||||||||
| Equipment financing | 119,428 | 116,690 | 118,320 | 117,569 | 118,396 | ||||||||||
| Residential mortgages | 385,778 | 377,380 | 343,317 | 335,135 | 334,786 | ||||||||||
| Consumer and home equity | 285,690 | 302,598 | 319,364 | 331,210 | 341,362 | ||||||||||
| Total loans | $ | 6,108,946 | $ | 6,021,232 | $ | 5,843,591 | $ | 5,756,155 | $ | 5,328,623 | |||||
| Deposits | |||||||||||||||
| Noninterest-bearing | $ | 1,631,942 | $ | 1,510,224 | $ | 1,474,847 | $ | 1,486,273 | $ | 1,129,695 | |||||
| Savings and interest-bearing transaction accounts | 4,049,914 | 3,867,303 | 3,647,328 | 3,510,723 | 3,241,397 | ||||||||||
| Time deposits | 953,370 | 1,078,256 | 1,144,341 | 1,128,506 | 1,084,046 | ||||||||||
| Total deposits | $ | 6,635,226 | $ | 6,455,783 | $ | 6,266,516 | $ | 6,125,502 | $ | 5,455,138 | |||||
| Total loans to total deposits ratio | 92.1 | % | 93.3 | % | 93.3 | % | 94.0 | % | 97.7 | % | |||||
| Selected Average Balance Sheet Data | |||||||||||||||
| Loans | $ | 6,089,757 | $ | 5,939,904 | $ | 5,775,093 | $ | 5,572,865 | $ | 5,208,097 | |||||
| Investment securities | 1,003,479 | 912,723 | 873,066 | 891,037 | 879,987 | ||||||||||
| Interest-earning assets | 7,230,136 | 7,137,884 | 7,009,939 | 6,650,993 | 6,133,003 | ||||||||||
| Total assets | 7,704,603 | 7,625,458 | 7,516,069 | 7,137,529 | 6,565,302 | ||||||||||
| Noninterest-bearing demand deposits | 1,545,968 | 1,499,093 | 1,475,422 | 1,364,785 | 1,109,638 | ||||||||||
| Savings deposits | 604,931 | 571,794 | 548,662 | 525,224 | 496,798 | ||||||||||
| Interest-bearing transaction accounts | 3,388,027 | 3,313,556 | 3,086,260 | 2,908,299 | 2,830,778 | ||||||||||
| Time deposits | 1,044,915 | 1,112,053 | 1,176,181 | 1,093,760 | 872,998 | ||||||||||
| Total deposits | 6,583,841 | 6,496,496 | 6,286,525 | 5,892,068 | 5,310,212 | ||||||||||
| Short-term borrowings | 73,492 | 68,962 | 58,845 | 82,694 | 159,825 | ||||||||||
| Other borrowings | 143,261 | 155,943 | 269,093 | 273,904 | 277,753 | ||||||||||
| Total interest-bearing liabilities | 5,254,626 | 5,222,308 | 5,139,042 | 4,883,881 | 4,638,152 | ||||||||||
| Stockholders’ equity | 770,255 | 753,059 | 751,099 | 742,050 | 736,719 | ||||||||||
(3) The Company adopted ASU 2016-13 on December 31, 2020, with a transition adjustment retroactive to January 1, 2020. Quarterly amounts for the first, second and third quarters of 2020 do not reflect the adoption of ASU 2016-13.
| Lakeland Bancorp, Inc. | |||||||||||||||||||
| Financial Highlights | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| For the Quarter Ended | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| (Dollars in thousands) | 2021 | 2020 | 2020 | 2020 | 2020 | ||||||||||||||
| Average Annualized Yields (Taxable Equivalent Basis) and Costs | |||||||||||||||||||
| Assets | |||||||||||||||||||
| Loans | 3.91 | % | 3.92 | % | 3.91 | % | 4.03 | % | 4.47 | % | |||||||||
| Taxable investment securities and other | 1.81 | % | 1.84 | % | 2.09 | % | 2.31 | % | 2.56 | % | |||||||||
| Tax-exempt securities | 2.54 | % | 2.51 | % | 2.55 | % | 2.70 | % | 2.67 | % | |||||||||
| Federal funds sold and interest-bearing cash accounts | 0.11 | % | 0.09 | % | 0.10 | % | 0.08 | % | 1.42 | % | |||||||||
| Total interest-earning assets | 3.56 | % | 3.51 | % | 3.49 | % | 3.69 | % | 4.17 | % | |||||||||
| Liabilities | |||||||||||||||||||
| Savings accounts | 0.05 | % | 0.05 | % | 0.06 | % | 0.07 | % | 0.07 | % | |||||||||
| Interest-bearing transaction accounts | 0.34 | % | 0.38 | % | 0.44 | % | 0.55 | % | 0.97 | % | |||||||||
| Time deposits | 0.83 | % | 1.01 | % | 1.19 | % | 1.48 | % | 1.81 | % | |||||||||
| Borrowings | 2.87 | % | 2.84 | % | 2.73 | % | 2.62 | % | 2.54 | % | |||||||||
| Total interest-bearing liabilities | 0.51 | % | 0.59 | % | 0.72 | % | 0.86 | % | 1.18 | % | |||||||||
| Net interest spread (taxable equivalent basis) | 3.05 | % | 2.92 | % | 2.77 | % | 2.83 | % | 2.99 | % | |||||||||
| Annualized net interest margin (taxable equivalent basis) | 3.19 | % | 3.08 | % | 2.96 | % | 3.06 | % | 3.28 | % | |||||||||
| Annualized cost of deposits | 0.32 | % | 0.37 | % | 0.44 | % | 0.55 | % | 0.82 | % | |||||||||
| Asset Quality Data | |||||||||||||||||||
| Allowance for Credit Losses on Loans | |||||||||||||||||||
| Balance at beginning of period | $ | 71,124 | $ | 65,242 | $ | 57,839 | $ | 48,884 | $ | 40,003 | |||||||||
| Impact of adopting ASU 2016-13 (4) | — | 6,656 | — | — | — | ||||||||||||||
| Provision for credit losses on loans | (2,808) | (246) | 8,000 | 9,000 | 9,223 | ||||||||||||||
| Charge-offs | (1,270) | (746) | (682) | (142) | (483) | ||||||||||||||
| Recoveries | 206 | 218 | 85 | 97 | 141 | ||||||||||||||
| Balance at end of period | $ | 67,252 | $ | 71,124 | $ | 65,242 | $ | 57,839 | $ | 48,884 | |||||||||
| Net Loan Charge-Offs (Recoveries) | |||||||||||||||||||
| Commercial, real estate | $ | 843 | $ | (47) | $ | 298 | $ | (36) | $ | 111 | |||||||||
| Commercial, industrial and other | 221 | 478 | 173 | (13) | (31) | ||||||||||||||
| Equipment financing | 83 | 64 | 95 | (11) | 71 | ||||||||||||||
| Residential mortgages | (58) | — | (1) | — | 96 | ||||||||||||||
| Consumer and home equity | (25) | 33 | 32 | 105 | 95 | ||||||||||||||
| Net charge-offs (recoveries) | $ | 1,064 | $ | 528 | $ | 597 | $ | 45 | $ | 342 | |||||||||
| Non-Performing Assets (5) | |||||||||||||||||||
| Commercial, real estate | $ | 23,984 | $ | 35,091 | $ | 26,145 | $ | 25,615 | $ | 24,770 | |||||||||
| Commercial, industrial and other | 2,252 | 2,633 | 1,484 | 1,546 | 1,909 | ||||||||||||||
| Equipment financing | 293 | 327 | 444 | 400 | 199 | ||||||||||||||
| Residential mortgages | 2,323 | 2,469 | 2,695 | 2,860 | 2,837 | ||||||||||||||
| Consumer and home equity | 2,274 | 2,243 | 2,322 | 2,432 | 2,689 | ||||||||||||||
| Total non-accrual loans | 31,126 | 42,763 | 33,090 | 32,853 | 32,404 | ||||||||||||||
| Property acquired through foreclosure or repossession | — | — | — | 354 | 393 | ||||||||||||||
| Total non-performing assets | $ | 31,126 | $ | 42,763 | $ | 33,090 | $ | 33,207 | $ | 32,797 | |||||||||
| Loans past due 90 days or more and still accruing | $ | — | $ | 1 | $ | 165 | $ | 58 | $ | 99 | |||||||||
| Loans restructured and still accruing | $ | 3,799 | $ | 3,856 | $ | 4,299 | $ | 4,667 | $ | 4,719 | |||||||||
| Ratio of allowance for loan losses to total loans | 1.10 | % | 1.18 | % | 1.11 | % | 1.00 | % | 0.92 | % | |||||||||
| Total non-accrual loans to total loans | 0.51 | % | 0.71 | % | 0.57 | % | 0.57 | % | 0.61 | % | |||||||||
| Total non-performing assets to total assets | 0.40 | % | 0.56 | % | 0.44 | % | 0.44 | % | 0.47 | % | |||||||||
| Annualized net charge-offs to average loans | 0.07 | % | 0.04 | % | 0.04 | % | — | % | 0.03 | % | |||||||||
(4) The Company adopted CECL on December 31, 2020 with a $6.7 million transition adjustment retroactive to January 1, 2020. Quarterly amounts for the first, second and third quarters of 2020 do not reflect the adoption of CECL
(5) Includes non-accrual purchased credit deteriorated loans from December 31, 2020 forward
| Lakeland Bancorp, Inc. | |||||||||||||||||||
| Supplemental Information – Non-GAAP Financial Measures | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| At or for the Quarter Ended | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| (Dollars in thousands, except ratios and per share amounts) | 2021 | 2020 | 2020 | 2020 | 2020 | ||||||||||||||
| Calculation of Tangible Book Value Per Common Share | |||||||||||||||||||
| Total common stockholders’ equity at end of period – GAAP | $ | 768,065 | $ | 763,784 | $ | 753,572 | $ | 745,489 | $ | 736,922 | |||||||||
| Less: Goodwill | 156,277 | 156,277 | 156,277 | 156,277 | 156,277 | ||||||||||||||
| Less: Other identifiable intangible assets | 3,063 | 3,288 | 3,538 | 3,788 | 4,049 | ||||||||||||||
| Total tangible common stockholders’ equity at end of period – Non-GAAP | $ | 608,725 | $ | 604,219 | $ | 593,757 | $ | 585,424 | $ | 576,596 | |||||||||
| Shares outstanding at end of period | 50,598 | 50,480 | 50,468 | 50,463 | 50,462 | ||||||||||||||
| Book value per share – GAAP | $ | 15.18 | $ | 15.13 | $ | 14.93 | $ | 14.77 | $ | 14.60 | |||||||||
| Tangible book value per share – Non-GAAP | $ | 12.03 | $ | 11.97 | $ | 11.77 | $ | 11.60 | $ | 11.43 | |||||||||
| Calculation of Tangible Common Equity to Tangible Assets | |||||||||||||||||||
| Total tangible common stockholders’ equity at end of period – Non-GAAP | $ | 608,725 | $ | 604,219 | $ | 593,757 | $ | 585,424 | $ | 576,596 | |||||||||
| Total assets at end of period – GAAP | $ | 7,771,761 | $ | 7,664,297 | $ | 7,522,184 | $ | 7,488,516 | $ | 7,013,908 | |||||||||
| Less: Goodwill | 156,277 | 156,277 | 156,277 | 156,277 | 156,277 | ||||||||||||||
| Less: Other identifiable intangible assets | 3,063 | 3,288 | 3,538 | 3,788 | 4,049 | ||||||||||||||
| Total tangible assets at end of period – Non-GAAP | $ | 7,612,421 | $ | 7,504,732 | $ | 7,362,369 | $ | 7,328,451 | $ | 6,853,582 | |||||||||
| Paycheck Protection Program loans (“PPP”) | 346,150 | 284,636 | 325,115 | 325,999 | — | ||||||||||||||
| Total assets at end of period excluding PPP- Non-GAAP | $ | 7,425,611 | $ | 7,379,661 | $ | 7,197,069 | $ | 7,162,517 | $ | 7,013,908 | |||||||||
| Total tangible assets at end of period excluding PPP – Non-GAAP | $ | 7,266,271 | $ | 7,220,096 | $ | 7,037,254 | $ | 7,002,452 | $ | 6,853,582 | |||||||||
| Common equity to assets – GAAP | 9.88 | % | 9.97 | % | 10.02 | % | 9.96 | % | 10.51 | % | |||||||||
| Common equity to assets excluding PPP – Non-GAAP | 10.34 | % | 10.35 | % | 10.47 | % | 10.41 | % | 10.51 | % | |||||||||
| Tangible common equity to tangible assets – Non-GAAP | 8.00 | % | 8.05 | % | 8.06 | % | 7.99 | % | 8.41 | % | |||||||||
| Tangible common equity to tangible assets excluding PPP – Non-GAAP | 8.38 | % | 8.37 | % | 8.44 | % | 8.36 | % | 8.41 | % | |||||||||
| Calculation of Return on Average Tangible Common Equity | |||||||||||||||||||
| Net income – GAAP | $ | 23,175 | $ | 18,848 | $ | 14,427 | $ | 11,851 | $ | 12,392 | |||||||||
| Total average common stockholders’ equity – GAAP | $ | 770,255 | $ | 753,059 | $ | 751,099 | $ | 742,050 | $ | 736,719 | |||||||||
| Less: Average goodwill | 156,277 | 156,277 | 156,277 | 156,277 | 156,277 | ||||||||||||||
| Less: Average other identifiable intangible assets | 3,192 | 3,433 | 3,689 | 3,942 | 4,205 | ||||||||||||||
| Total average tangible common stockholders’ equity – Non-GAAP | $ | 610,786 | $ | 593,349 | $ | 591,133 | $ | 581,831 | $ | 576,237 | |||||||||
| Return on average common stockholders’ equity – GAAP | 12.20 | % | 9.96 | % | 7.64 | % | 6.42 | % | 6.77 | % | |||||||||
| Return on average tangible common stockholders’ equity – Non-GAAP | 15.39 | % | 12.64 | % | 9.71 | % | 8.19 | % | 8.65 | % | |||||||||
| Calculation of Efficiency Ratio | |||||||||||||||||||
| Total noninterest expense | $ | 33,903 | $ | 36,945 | $ | 32,097 | $ | 31,462 | $ | 32,504 | |||||||||
| Amortization of core deposit intangibles | (226) | (249) | (250) | (261) | (265) | ||||||||||||||
| Long term debt prepayment fees | — | (3,777) | — | — | (356) | ||||||||||||||
| Noninterest expense, as adjusted | $ | 33,677 | $ | 32,919 | $ | 31,847 | $ | 31,201 | $ | 31,883 | |||||||||
| Net interest income | $ | 56,728 | $ | 55,135 | $ | 52,134 | $ | 50,519 | $ | 49,899 | |||||||||
| Total noninterest income | 5,759 | 6,845 | 6,773 | 5,481 | 8,011 | ||||||||||||||
| Total revenue | 62,487 | 61,980 | 58,907 | 56,000 | 57,910 | ||||||||||||||
| Tax-equivalent adjustment on municipal securities | 163 | 149 | 108 | 93 | 88 | ||||||||||||||
| Gains on sales of investment securities | — | (871) | — | — | (342) | ||||||||||||||
| Total revenue, as adjusted | $ | 62,650 | $ | 61,258 | $ | 59,015 | $ | 56,093 | $ | 57,656 | |||||||||
| Efficiency ratio – Non-GAAP | 53.75 | % | 53.74 | % | 53.96 | % | 55.62 | % | 55.30 | % | |||||||||
