Lakeland Bancorp Inc (LBAI) SEC Filing 8-K Material Event for the period ending Thursday, October 25, 2018

EXHIBIT 99.1

Lakeland Bancorp Announces Third Quarter Results

OAK RIDGE, N.J., Oct. 25, 2018 (GLOBE NEWSWIRE) -- Lakeland Bancorp, Inc. (NASDAQ: LBAI) (the “Company”), the parent company of Lakeland Bank (“Lakeland”), reported net income of $16.8 million for the three months ended September 30, 2018, a 22% increase compared to $13.7 million for the three months ended September 30, 2017. For the three months ended September 30, 2018, the Company reported diluted EPS of $0.35, an increase of 21% compared to $0.29 for the same period in 2017. For the third quarter of 2018, return on average assets was 1.19%, return on average common equity was 11.02% and return on average tangible common equity was 14.31%.

Reflected in September 30, 2018 results is the impact of the State of New Jersey tax law effective in July and retroactive to the beginning of 2018. The tax changes include a 2.5% tax surcharge which increased tax expense by approximately $0.5 million and a resulting increase in the Company’s deferred tax assets of $1.3 million, reducing tax expense.

For the nine months ended September 30, 2018, the Company reported net income of $47.9 million, a 21% increase compared to $39.4 million for the same period in 2017. For the nine months ended September 30, 2018, the Company reported diluted EPS of $0.99, an increase of 21% compared to $0.82 for the first nine months of 2017. For the first nine months of 2018, return on average assets was 1.17%, return on average common equity was 10.78%, and return on average tangible common equity was 14.06%. 

Thomas Shara, Lakeland Bancorp’s President and CEO commented, “We are pleased to report record quarterly income for the third quarter. Our results were driven by continued steady loan growth and robust deposit growth of over 5% this quarter. We are particularly pleased with our 1.19% return on assets, coupled with a 14.31% return on tangible common equity for the quarter. On the merger front, we were excited to announce the acquisition of Highlands Bancorp during the quarter and look forward to welcoming their customers, shareholders and staff to the Lakeland team.  We anticipate the transaction will be completed in early 2019.”

Net Interest Margin and Income

Net interest margin for the third quarter of 2018 of 3.32% decreased seven basis points from the third quarter of 2017. The decrease in net interest margin was due primarily to an increase in the cost of interest-bearing liabilities, partially offset by an increase in the yield on interest-earning assets. Net interest margin for the first nine months of 2018 of 3.38% equaled net interest margin for the first nine months of 2017. 

The yield on interest-earning assets for the third quarter of 2018 was 4.14% compared to 3.93% for the third quarter of 2017. The increase in yield was due primarily to a 21 basis point increase in the yield on loans and leases as rates continue to rise. The yield on interest-earning assets for the first nine months of 2018 was 4.09% compared to 3.86% during the same period in 2017.

The cost of interest-bearing liabilities for the third quarter of 2018 was 1.08% compared to 0.71% for the third quarter of 2017. The cost of interest-bearing transaction accounts, time deposits and borrowings have increased 40, 58, and 46 basis points, respectively, since the third quarter of 2017 largely driven by higher market interest rates. The Company has run deposit promotions during 2018 to support loan growth and in response to increased market competition. The cost of interest-bearing liabilities for the first nine months of 2018 was 0.94% compared to 0.65% during the same period in 2017.

Net interest income increased to $43.6 million for the third quarter of 2018 compared to $42.1 million for the third quarter of 2017, due primarily to the growth of interest-earning assets and increases in loan and lease yields offset by an increase in the cost of interest-bearing liabilities. Net interest income for the first nine months of 2018 was $129.4 million, as compared to $122.9 million for the same period in 2017. 

Noninterest Income

Noninterest income increased $0.2 million to $5.6 million for the third quarter of 2018 from $5.5 million for the third quarter of 2017 primarily due to death benefit income of $0.4 million in the third quarter of 2018. Commissions and fees increased $0.2 million compared to the third quarter of 2017 due primarily to an increase in investment services income. Partially offsetting these positive variances was a $0.4 million loss on equity securities during the quarter.

For the first nine months of 2018, noninterest income totaled $16.7 million compared to $19.7 million for the same period in 2017. The first nine months of 2017 included $2.5 million in gains on sales of investment securities, $0.9 million gain on the sales of three former branches, $0.4 million in gains on sales of other real estate owned and a $0.3 million gain on the payoff of an acquired loan. Noninterest income for first nine months of 2018 had increases in commissions and fees of $0.5 million, an increase in income on bank owned life insurance of $1.0 million, including the death benefit income discussed above, partially offset by a $0.4 million loss on equity securities.

Noninterest Expense

Noninterest expense totaled $27.8 million for the third quarter of 2018 compared to $24.8 million for the third quarter of 2017, primarily due to salary and employee benefit expense increasing $2.3 million as a result of additions to our staff to support continued growth, normal merit increases, higher benefit costs and a life insurance payout of $0.6 million related to the BOLI death benefit mentioned above. In the third quarter of 2018, data processing expense increased $0.6 million compared to the third quarter of 2017 due primarily to the Company’s expansion and improvement of its digital infrastructure.  

For the first nine months of 2018, noninterest expense totaled $82.5 million compared to $78.7 million for the same period in 2017. Included within 2017 was $2.8 million in long-term debt prepayment fees. Excluding the 2017 long-term debt prepayment fees, the resulting $6.6 million net increase was primarily due to a $5.3 million increase in salary and employee benefit costs resulting from additions to our staff to support continued growth, as well as normal merit increases and higher benefit costs and the life insurance payout related to the BOLI death benefit previously mentioned. Data processing also increased $1.0 million compared to the first nine months of 2017 due primarily to the Company’s expansion and improvement of its digital infrastructure.

Financial Condition

In 2018, total assets increased $221.4 million to $5.63 billion as total loans and leases grew $175.6 million to $4.33 billion, while investment securities increased $4.1 million to $771.8 million. On the funding side, total deposits increased $273.7 million to $4.64 billion, while borrowings decreased $84.8 million to $337.0 million. As of September 30, 2018, total loans and leases as a percent of total deposits was 93%. 

Asset Quality

At September 30, 2018, non-performing assets totaled $13.9 million (0.25% of total assets) compared to $14.5 million (0.27% of total assets) at December 31, 2017. Non-accrual loans and leases as a percent of total loans and leases equaled 0.26% at September 30, 2018 compared to 0.33% at December 31, 2017. The allowance for loan and lease losses increased to $37.3 million at September 30, 2018 (0.86% of total loans and leases) compared to $35.5 million at December 31, 2017 (0.85% of total loans and leases). In the third quarter of 2018, the Company had net charge-offs of $0.4 million (0.03% of average loans and leases, annualized) compared to $0.7 million (0.07% of average loans and leases, annualized) for the same period in 2017. The third quarter of 2018 provision for loan and lease losses was $1.0 million compared to $1.8 million in the third quarter of 2017.

Capital

At September 30, 2018, stockholders' equity was $607.6 million compared to $583.1 million at December 31, 2017, a 4% increase. Lakeland Bank remains above FDIC “well capitalized” standards, with a Tier 1 Leverage Ratio of 9.42% at September 30, 2018. At September 30, 2018, the book value per common share and tangible book value per common share were $12.79 and $9.88 compared to $12.19 and $9.25 at September 30, 2017. On October 23, 2018, the Company declared a quarterly cash dividend of $0.115 per share to be paid on November 15, 2018 to stockholders of record as of November 5, 2018.

Forward-Looking Statements

The information disclosed in this document includes various forward-looking statements that are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  The words “anticipates”, “projects”, “intends”, “estimates”, “expects”, “believes”, “plans”, “may”, “will”, “should”, “could”, and other similar expressions are intended to identify such forward-looking statements. The Company cautions that these forward-looking statements are necessarily speculative and speak only as of the date made, and are subject to numerous assumptions, risks and uncertainties, all of which may change over time. Actual results could differ materially from such forward-looking statements. The following factors, among others, could cause actual results to differ materially and adversely from such forward-looking statements: changes in the financial services industry and the U.S. and global capital markets, changes in economic conditions nationally, regionally and in the Company’s markets, the nature and timing of actions of the Federal Reserve Board and other regulators, the nature and timing of legislation and regulation affecting the financial services industry, government intervention in the U.S. financial system, changes in federal and state tax laws, changes in levels of market interest rates, pricing pressures on loan and deposit products, credit risks of the Company’s lending and leasing activities, successful implementation, deployment and upgrades of new and existing technology, systems, services and products, customers’ acceptance of the Company’s products and services, competition, failure to obtain the required approval from Highlands Bancorp, Inc. shareholders for the merger of Highlands Bancorp, Inc. into Lakeland Bancorp, Inc. and failure to realize anticipated efficiencies and synergies if the holding company merger and the merger of Highlands State Bank into Lakeland Bank are consummated.  Any statements made by the Company that are not historical facts should be considered to be forward-looking statements. The Company is not obligated to update and does not undertake to update any of its forward-looking statements made herein.

Explanation of Non-GAAP Financial Measures

Reported amounts are presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). This press release also contains certain supplemental non-GAAP information that the Company’s management uses in its analysis of the Company’s financial results.  Specifically, the Company provides measures based on what it believes are its operating earnings on a consistent basis, and excludes material non-routine operating items which affect the GAAP reporting of results of operations. The Company’s management believes that providing this information to analysts and investors allows them to better understand and evaluate the Company’s core financial results for the periods in question.

The Company also provides measurements and ratios based on tangible equity and tangible assets. These measures are utilized by regulators and market analysts to evaluate a company’s financial condition and, therefore, the Company’s management believes that such information is useful to investors.

The Company also uses an efficiency ratio that is a non-GAAP financial measure. The ratio that the Company uses excludes amortization of core deposit intangibles, provision for unfunded lending commitments and, where applicable, long-term debt prepayment fees and merger related expenses. Income for the non-GAAP ratio is increased by the favorable effect of tax-exempt income and excludes gains and losses from the sale of investment securities and gain on debt extinguishment, which can vary from period to period. The Company uses this ratio because it believes the ratio provides a relevant measure to compare the operating performance period to period.

These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. See accompanying non-GAAP tables. 

About Lakeland Bank

Lakeland Bank is the wholly-owned subsidiary of Lakeland Bancorp, Inc. (NASDAQ:LBAI), which has $5.6 billion in total assets. The Bank operates 50 branch offices throughout Bergen, Essex, Morris, Ocean, Passaic, Somerset, Sussex, and Union counties in New Jersey including one branch in Highland Mills, New York; six New Jersey regional commercial lending centers in Bernardsville, Jackson, Montville, Newton, Teaneck and Waldwick; and one New York commercial lending center to serve the Hudson Valley region. Lakeland also has a commercial loan production office serving Middlesex and Monmouth counties in New Jersey.  Lakeland Bank offers an extensive suite of financial products and services for businesses and consumers. Visit LakelandBank.com for more information.

Thomas J. Shara
President & CEO

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

Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
				Three Months Ended September 30,								Nine Months Ended September 30,
(Dollars in thousands, except per share amounts)					2018				2017				2018				2017
INCOME STATEMENT
Net interest income				$	43,624			$	42,115			$	129,353			$	122,859
Provision for loan and lease losses					(1,046	)			(1,827	)			(3,822	)			(4,872	)
Gains (losses) on sales of investment securities					-				-				-				2,524
Gains on sales of loans					484				478				1,030				1,347
Gain (loss) on equity securities					(439	)			-				(384	)			-
Other noninterest income					5,594				4,976				16,036				15,788
Long-term debt prepayment fee					-				-				-				(2,828	)
Other noninterest expense					(27,793	)			(24,849	)			(82,504	)			(75,857	)
Pretax income					20,424				20,893				59,709				58,961
Provision for income taxes					(3,666	)			(7,170	)			(11,858	)			(19,556	)
Net income				$	16,758			$	13,723			$	47,851			$	39,405
Basic earnings per common share				$	0.35			$	0.29			$	1.00			$	0.82
Diluted earnings per common share				$	0.35			$	0.29			$	0.99			$	0.82
Dividends paid per common share				$	0.115			$	0.100			$	0.330			$	0.295
Weighted average shares - basic					47,605				47,466				47,570				47,429
Weighted average shares - diluted					47,788				47,692				47,764				47,660
SELECTED OPERATING RATIOS
Annualized return on average assets					1.19	%			1.03	%			1.17	%			1.01	%
Annualized return on average common equity					11.02	%			9.48	%			10.78	%			9.33	%
Annualized return on average tangible common equity (1)					14.31	%			12.51	%			14.06	%			12.38	%
Annualized return on interest-earning assets					4.14	%			3.93	%			4.09	%			3.86	%
Annualized cost of interest-bearing liabilities					1.08	%			0.71	%			0.94	%			0.65	%
Annualized net interest spread					3.06	%			3.22	%			3.15	%			3.22	%
Annualized net interest margin					3.32	%			3.39	%			3.38	%			3.38	%
Efficiency ratio (1)					56.00	%			51.72	%			56.05	%			53.52	%
Stockholders' equity to total assets													10.80	%			10.69	%
Book value per common share												$	12.79			$	12.19
Tangible book value per common share (1)												$	9.88			$	9.25
Tangible common equity to tangible assets (1)													8.55	%			8.33	%
ASSET QUALITY RATIOS												9/30/2018				9/30/2017
Ratio of allowance for loan and lease losses to total loans and leases													0.86	%			0.83	%
Non-performing loans and leases to total loans and leases													0.26	%			0.33	%
Non-performing assets to total assets													0.25	%			0.27	%
Annualized net charge-offs to average loans and leases													0.06	%			0.07	%
SELECTED BALANCE SHEET DATA AT PERIOD-END												9/30/2018				9/30/2017
Loans and leases												$	4,332,238			$	4,092,893
Allowance for loan and lease losses													37,293				33,925
Investment securities													801,315				795,096
Total assets													5,627,057				5,399,481
Total deposits													4,642,443				4,356,996
Short-term borrowings													47,398				133,960
Other borrowings													289,635				301,411
Stockholders' equity													607,555				577,081
SELECTED AVERAGE BALANCE SHEET DATA				For the Three Months Ended								For the Nine Months Ended
				9/30/2018				9/30/2017				9/30/2018				9/30/2017
Loans and leases				$	4,296,244			$	4,060,838			$	4,246,338			$	3,993,030
Investment securities					811,217				815,773				814,508				814,392
Interest-earning assets					5,221,612				4,957,856				5,126,677				4,897,550
Total assets					5,570,286				5,300,191				5,473,001				5,232,283
Noninterest-bearing demand deposits					999,217				971,143				978,020				949,474
Savings deposits					491,095				484,982				491,810				489,562
Interest-bearing transaction accounts					2,319,863				2,206,206				2,252,112				2,247,674
Time deposits					789,691				645,333				781,230				587,086
Total deposits					4,599,866				4,307,664				4,503,172				4,273,796
Short-term borrowings					36,702				42,172				54,981				41,211
Other borrowings					291,477				344,775				286,138				323,180
Total interest-bearing liabilities					3,928,828				3,723,468				3,866,271				3,688,713
Stockholders' equity					603,059				574,113				593,453				564,443
(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)							2018			2017			2018			2017
INTEREST INCOME
Loans, leases and fees						$	49,181		$	44,302		$	142,384		$	127,453
Federal funds sold and interest-bearing deposits with banks							533			210			844			618
Taxable investment securities and other							4,141			3,720			12,160			11,137
Tax exempt investment securities							427			503			1,299			1,535
	TOTAL INTEREST INCOME						54,282			48,735			156,687			140,743
INTEREST EXPENSE
Deposits							8,429			4,443			20,685			11,561
Federal funds purchased and securities sold under agreements to repurchase							42			52			409			160
Other borrowings							2,187			2,125			6,240			6,163
	TOTAL INTEREST EXPENSE						10,658			6,620			27,334			17,884
NET INTEREST INCOME							43,624			42,115			129,353			122,859
Provision for loan and lease losses							1,046			1,827			3,822			4,872
	NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES						42,578			40,288			125,531			117,987
NONINTEREST INCOME
Service charges on deposit accounts							2,614			2,797			7,770			7,926
Commissions and fees							1,414			1,258			4,096			3,549
Income on bank owned life insurance							1,127			624			2,557			1,550
Gain (loss) on equity securities							(439	)		-			(384	)		-
Gains on sales of loans							484			478			1,030			1,347
Gains on sales of investment securities							-			-			-			2,524
Other income							439			297			1,613			2,763
	TOTAL NONINTEREST INCOME						5,639			5,454			16,682			19,659
NONINTEREST EXPENSE
Salaries and employee benefit expense							17,352			15,100			50,921			45,613
Net occupancy expense							2,316			2,327			7,657			7,670
Furniture and equipment expense							2,070			2,073			6,287			6,166
FDIC insurance expense							400			430			1,225			1,173
Stationary, supplies and postage expense							371			404			1,230			1,419
Marketing expense							343			442			1,160			1,351
Data processing expense							1,083			441			2,525			1,496
Telecommunications expense							438			380			1,321			1,156
ATM and debit card expense							556			546			1,624			1,504
Core deposit intangible amortization							142			104			452			489
Other real estate owned and other repossessed assets expense							45			67			112			108
Long-term debt prepayment fee							-			-			-			2,828
Other expenses							2,677			2,535			7,990			7,712
	TOTAL NONINTEREST EXPENSE						27,793			24,849			82,504			78,685
INCOME BEFORE PROVISION FOR INCOME TAXES							20,424			20,893			59,709			58,961
Provision for income taxes							3,666			7,170			11,858			19,556
NET INCOME						$	16,758		$	13,723		$	47,851		$	39,405
Basic						$	0.35		$	0.29		$	1.00		$	0.82
Diluted						$	0.35		$	0.29		$	0.99		$	0.82
DIVIDENDS PAID PER COMMON SHARE						$	0.115		$	0.100		$	0.330		$	0.295

 

Lakeland Bancorp, Inc.
Consolidated Balance Sheets
					September 30				December 31,
(Dollars in thousands)						2018				2017
					(Unaudited)
ASSETS
Cash					$	170,099			$	114,138
Interest-bearing deposits due from banks						10,137				28,795
Total cash and cash equivalents						180,236				142,933
Investment securities available for sale, at fair value						613,243				628,046
Equity securities, at fair value						16,038				18,089
Investment securities held to maturity; fair value of $153,975 at September 30, 2018
and $138,688 at December 31, 2017						158,576				139,685
Federal Home Loan Bank and other membership stocks, at cost						13,458				12,576
Loans held for sale						1,340				456
Loans and leases:
Commercial, real estate						3,281,946				3,096,092
Commercial, industrial and other						334,241				340,400
Leases						82,881				75,039
Residential mortgages						315,135				322,880
Consumer and home equity						318,035				322,269
Total loans and leases						4,332,238				4,156,680
Net deferred costs (fees)						(4,120	)			(3,960	)
Allowance for loan and lease losses						(37,293	)			(35,455	)
Net loans and leases						4,290,825				4,117,265
Premises and equipment, net						50,127				50,313
Accrued interest receivable						15,435				14,416
Goodwill						136,433				136,433
Other identifiable intangible assets						1,910				2,362
Bank owned life insurance						109,338				107,489
Other assets						40,098				35,576
TOTAL ASSETS					$	5,627,057			$	5,405,639
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest-bearing					$	996,296			$	967,335
Savings and interest-bearing transaction accounts						2,855,318				2,663,985
Time deposits $250 thousand and under						607,448				556,863
Time deposits over $250 thousand						183,381				180,565
Total deposits						4,642,443				4,368,748
Federal funds purchased and securities sold under agreements to repurchase						47,398				124,936
Other borrowings						184,640				192,011
Subordinated debentures						104,995				104,902
Other liabilities						40,026				31,920
TOTAL LIABILITIES						5,019,502				4,822,517
STOCKHOLDERS' EQUITY
Common stock, no par value; authorized 100,000,000 shares at September 30, 2018
and 70,000,000 shares at December 31, 2017;  issued 47,485,283 shares at
September 30, 2018 and 47,353,864 shares at December 31, 2017						514,212				512,734
Retained earnings						106,834				72,737
Accumulated other comprehensive gain (loss)						(13,491	)			(2,349	)
TOTAL STOCKHOLDERS' EQUITY						607,555				583,122
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY					$	5,627,057			$	5,405,639

 

Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
			For the Quarter Ended
			Sept 30,			June 30,			Mar 31,			Dec 31,			Sept 30,
(Dollars in thousands, except per share data)				2018			2018			2018			2017			2017
INCOME STATEMENT
Net interest income			$	43,624		$	43,493		$	42,236		$	42,379		$	42,115
Provision for loan and lease losses				(1,046	)		(1,492	)		(1,284	)		(1,218	)		(1,827	)
Gains on sales of loans				484			300			246			489			478
Gain (loss) on equity securities				(439	)		73			(18	)		-			-
Other noninterest income				5,594			5,336			5,106			5,287			4,976
Other noninterest expense				(27,793	)		(27,574	)		(27,137	)		(25,849	)		(24,849	)
Pretax income				20,424			20,136			19,149			21,088			20,893
Provision for income taxes				(3,666	)		(4,298	)		(3,894	)		(7,913	)		(7,170	)
Net income			$	16,758		$	15,838		$	15,255		$	13,175		$	13,723
Basic earnings per common share			$	0.35		$	0.33		$	0.32		$	0.28		$	0.29
Diluted earnings per common share			$	0.35		$	0.33		$	0.32		$	0.27		$	0.29
Dividends paid per common share			$	0.115		$	0.115		$	0.100		$	0.100		$	0.100
Dividends paid			$	5,510		$	5,509		$	4,778		$	4,776		$	4,775
Weighted average shares - basic				47,605			47,600			47,503			47,466			47,466
Weighted average shares - diluted				47,788			47,770			47,736			47,719			47,692
SELECTED OPERATING RATIOS
Annualized return on average assets				1.19	%		1.17	%		1.14	%		0.97	%		1.03	%
Annualized return on average common equity				11.02	%		10.71	%		10.60	%		8.99	%		9.48	%
Annualized return on average tangible common equity (1)				14.31	%		13.97	%		13.90	%		11.82	%		12.51	%
Annualized net interest margin				3.32	%		3.43	%		3.39	%		3.37	%		3.39	%
Efficiency ratio (1)				56.00	%		55.60	%		56.58	%		53.06	%		51.72	%
Common stockholders' equity to total assets				10.80	%		10.80	%		10.75	%		10.79	%		10.69	%
Tangible common equity to tangible assets (1)				8.55	%		8.51	%		8.43	%		8.44	%		8.33	%
Tier 1 risk-based ratio				11.21	%		11.16	%		11.08	%		10.87	%		10.82	%
Total risk-based ratio				13.69	%		13.67	%		13.61	%		13.40	%		13.37	%
Tier 1 leverage ratio				9.42	%		9.43	%		9.28	%		9.12	%		9.07	%
Common equity tier 1 capital ratio				10.56	%		10.49	%		10.40	%		10.18	%		10.13	%
Book value per common share			$	12.79		$	12.59		$	12.40		$	12.31		$	12.19
Tangible book value per common share (1)			$	9.88		$	9.67		$	9.48		$	9.38		$	9.25
(1) See Supplemental Information - Non-GAAP Financial Measures

 

Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
				For the Quarter Ended
				Sept 30,			June 30,			Mar 31,			Dec 31,			Sept 30,
(Dollars in thousands)					2018			2018			2018			2017			2017
SELECTED BALANCE SHEET DATA AT PERIOD-END
Loans and leases				$	4,332,238		$	4,281,302		$	4,228,052		$	4,156,680		$	4,092,893
Allowance for loan and lease losses					37,293			36,604			35,644			35,455			33,925
Investment securities					801,315			798,096			805,654			798,396			795,096
Total assets					5,627,057			5,534,488			5,477,829			5,405,639			5,399,481
Total deposits					4,642,443			4,400,019			4,447,965			4,368,748			4,356,996
Short-term borrowings					47,398			197,870			126,485			124,936			133,960
Other borrowings					289,635			301,339			281,906			296,913			301,411
Stockholders' equity					607,555			597,864			588,648			583,122			577,081
LOANS AND LEASES
Commercial, real estate				$	3,281,946		$	3,222,461		$	3,169,375		$	3,096,092		$	3,018,106
Commercial, industrial and other					334,241			339,974			339,665			340,400			342,775
Leases					82,881			82,006			78,238			75,039			71,698
Residential mortgages					315,135			321,717			323,054			322,880			329,625
Consumer and home equity					318,035			315,144			317,720			322,269			330,689
Total loans and leases				$	4,332,238		$	4,281,302		$	4,228,052		$	4,156,680		$	4,092,893
DEPOSITS
Noninterest-bearing				$	996,296		$	967,911		$	974,641		$	967,335		$	955,444
Savings and interest-bearing transaction accounts					2,855,318			2,625,325			2,682,726			2,663,985			2,681,512
Time deposits					790,829			806,783			790,598			737,428			720,040
Total deposits				$	4,642,443		$	4,400,019		$	4,447,965		$	4,368,748		$	4,356,996
Total loans and leases to total deposits ratio					93.3	%		97.3	%		95.1	%		95.1	%		93.9	%
SELECTED AVERAGE BALANCE SHEET DATA
Loans and leases				$	4,296,244		$	4,247,443		$	4,194,207		$	4,116,920		$	4,060,838
Investment securities					811,217			811,361			821,055			798,687			815,773
Interest-earning assets					5,221,612			5,094,048			5,062,628			5,014,333			4,957,856
Total assets					5,570,286			5,437,540			5,409,409			5,372,248			5,300,191
Noninterest-bearing demand deposits					999,217			969,965			964,498			988,451			971,143
Savings deposits					491,095			496,630			487,666			478,685			484,982
Interest-bearing transaction accounts					2,319,863			2,195,553			2,240,044			2,222,221			2,206,206
Time deposits					789,691			792,270			761,418			730,590			645,333
Total deposits					4,599,866			4,454,418			4,453,626			4,419,947			4,307,664
Short-term borrowings					36,702			73,305			55,137			43,130			42,172
Other borrowings					291,477			283,206			283,645			295,818			344,775
Total interest-bearing liabilities					3,928,828			3,840,964			3,827,910			3,770,444			3,723,468
Stockholders' equity					603,059			593,388			583,700			581,254			574,113

 

Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
				For the Quarter Ended
				Sept 30,			June 30,			Mar 31,			Dec 31,			Sept 30,
(Dollars in thousands)					2018			2018			2018			2017			2017
AVERAGE ANNUALIZED YIELDS (TAXABLE EQUIVALENT BASIS)
ASSETS
Loans and leases					4.54	%		4.50	%		4.40	%		4.33	%		4.33	%
Taxable investment securities and other					2.26	%		2.21	%		2.17	%		2.17	%		2.09	%
Tax-exempt securities					2.71	%		2.66	%		2.65	%		3.21	%		2.98	%
Federal funds sold and interest-bearing cash accounts					1.87	%		1.65	%		1.40	%		1.06	%		1.03	%
Total interest-earning assets					4.14	%		4.12	%		4.02	%		3.95	%		3.93	%
LIABILITIES
Savings accounts					0.06	%		0.06	%		0.06	%		0.06	%		0.06	%
Interest-bearing transaction accounts					0.89	%		0.69	%		0.61	%		0.51	%		0.49	%
Time deposits					1.61	%		1.34	%		1.23	%		1.17	%		1.03	%
Borrowings					2.66	%		2.51	%		2.54	%		2.36	%		2.20	%
Total interest-bearing liabilities					1.08	%		0.91	%		0.83	%		0.75	%		0.71	%
Net interest spread (taxable equivalent basis)					3.06	%		3.21	%		3.19	%		3.20	%		3.22	%
Annualized net interest margin (taxable equivalent basis)					3.32	%		3.43	%		3.39	%		3.37	%		3.39	%
Annualized cost of deposits					0.73	%		0.59	%		0.52	%		0.45	%		0.41	%
ASSET QUALITY DATA
ALLOWANCE FOR LOAN AND LEASE LOSSES
Balance at beginning of period				$	36,604		$	35,644		$	35,455		$	33,925		$	32,823
Provision for loan and lease losses					1,046			1,492			1,284			1,218			1,827
Charge-offs					(753	)		(963	)		(1,250	)		(347	)		(869	)
Recoveries					396			431			155			659			144
Balance at end of period				$	37,293		$	36,604		$	35,644		$	35,455		$	33,925
NET LOAN AND LEASE CHARGE-OFFS (RECOVERIES)
Commercial, real estate				$	(115	)	$	181		$	(13	)	$	132		$	285
Commercial, industrial and other					(26	)		213			992			25			168
Leases					366			69			21			34			80
Residential mortgages					36			(3	)		79			31			95
Consumer and home equity					96			72			16			(534	)		97
Net charge-offs (recoveries)				$	357		$	532		$	1,095		$	(312	)	$	725
NON-PERFORMING ASSETS
Commercial, real estate				$	5,737		$	7,353		$	6,204		$	7,362		$	6,820
Commercial, industrial and other					1,189			1,171			1,505			184			172
Leases					441			834			250			144			110
Residential mortgages					2,347			2,992			3,045			3,860			4,410
Consumer and home equity					1,410			1,917			2,341			2,105			2,033
Total non-accrual loans and leases					11,124			14,267			13,345			13,655			13,545
Property acquired through foreclosure or repossession					2,754			2,184			1,392			843			1,168
Total non-performing assets				$	13,878		$	16,451		$	14,737		$	14,498		$	14,713
Loans past due 90 days or more and still accruing				$	16		$	-		$	1		$	200		$	9
Loans restructured and still accruing				$	9,030		$	7,926		$	9,526		$	11,462		$	11,279
Ratio of allowance for loan and lease losses to total loans and leases					0.86	%		0.85	%		0.84	%		0.85	%		0.83	%
Total non-accrual loans and leases to total loans and leases					0.26	%		0.33	%		0.32	%		0.33	%		0.33	%
Total non-performing assets to total assets					0.25	%		0.30	%		0.27	%		0.27	%		0.27	%
Annualized net charge-offs (recoveries) to average loans and leases					0.03	%		0.05	%		0.10	%		-0.03	%		0.07	%

 

Lakeland Bancorp, Inc.
Supplemental Information - Non-GAAP Financial Measures
(Unaudited)
				At or for the Quarter Ended
				Sept 30,			June 30,			Mar 31,			Dec 31,			Sept 30,
(Dollars in thousands, except per share amounts)					2018			2018			2018			2017			2017
CALCULATION OF TANGIBLE BOOK VALUE PER COMMON SHARE
Total common stockholders' equity at end of period - GAAP				$	607,555		$	597,864		$	588,648		$	583,122		$	577,081
Less:  Goodwill					136,433			136,433			136,433			136,433			136,433
Less:  Other identifiable intangible assets					1,910			2,052			2,205			2,362			2,526
Total tangible common stockholders' equity at end of period - Non-GAAP				$	469,212		$	459,379		$	450,010		$	444,327		$	438,122
Shares outstanding at end of period					47,485			47,484			47,476			47,354			47,353
Book value per share - GAAP					12.79		$	12.59		$	12.40		$	12.31		$	12.19
Tangible book value per share - Non-GAAP					9.88		$	9.67		$	9.48		$	9.38		$	9.25
CALCULATION OF TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS
Total tangible common stockholders' equity at end of period - Non-GAAP				$	469,212		$	459,379		$	450,010		$	444,327		$	438,122
Total assets at end of period - GAAP				$	5,627,057		$	5,534,488		$	5,477,829		$	5,405,639		$	5,399,481
Less:  Goodwill					136,433			136,433			136,433			136,433			136,433
Less:  Other identifiable intangible assets					1,910			2,052			2,205			2,362			2,526
Total tangible assets at end of period - Non-GAAP				$	5,488,714		$	5,396,003		$	5,339,191		$	5,266,844		$	5,260,522
Common equity to assets - GAAP					10.80	%		10.80	%		10.75	%		10.79	%		10.69	%
Tangible common equity to tangible assets - Non-GAAP					8.55	%		8.51	%		8.43	%		8.44	%		8.33	%
CALCULATION OF RETURN ON AVERAGE TANGIBLE COMMON EQUITY
Net income - GAAP				$	16,758		$	15,838		$	15,255		$	13,175		$	13,723
Total average common stockholders' equity - GAAP				$	603,059		$	593,388		$	583,700		$	581,254		$	574,113
Less:  Average goodwill					136,433			136,433			136,433			136,433			136,433
Less:  Average other identifiable intangible assets					1,982			2,134			2,300			2,450			2,606
Total average tangible common stockholders' equity - Non-GAAP				$	464,644		$	454,821		$	444,967		$	442,371		$	435,074
Return on average common stockholders' equity - GAAP					11.02	%		10.71	%		10.60	%		8.99	%		9.48	%
Return on average tangible common stockholders' equity - Non-GAAP					14.31	%		13.97	%		13.90	%		11.82	%		12.51	%
CALCULATION OF EFFICIENCY RATIO
Total noninterest expense				$	27,793		$	27,574		$	27,137		$	25,849		$	24,849
Amortization of core deposit intangibles					(142	)		(153	)		(157	)		(165	)		(104	)
Noninterest expense, as adjusted				$	27,651		$	27,421		$	26,980		$	25,684		$	24,745
Net interest income				$	43,624		$	43,493		$	42,236		$	42,379		$	42,115
Total noninterest income					5,639			5,709			5,334			5,776			5,454
Total revenue					49,263			49,202			47,570			48,155			47,569
Tax-equivalent adjustment on municipal securities					113			114			118			247			271
Total revenue, as adjusted				$	49,376		$	49,316		$	47,688		$	48,402		$	47,840
Efficiency ratio - Non-GAAP					56.00	%		55.60	%		56.58	%		53.06	%		51.72	%

 

Lakeland Bancorp, Inc.
Supplemental Information - Non-GAAP Financial Measures
(Unaudited)
				For the Nine Months Ended,
				Sept 30			Sept 30
(Dollars in thousands)					2018			2017
CALCULATION OF RETURN ON AVERAGE TANGIBLE COMMON EQUITY
Net income - GAAP				$	47,851		$	39,405
Total average common stockholders' equity - GAAP				$	593,453		$	564,443
Less:  Average goodwill					136,433			135,981
Less:  Average other identifiable intangible assets					2,138			2,981
Total average tangible common stockholders' equity - Non-GAAP				$	454,882		$	425,481
Return on average common stockholders' equity - GAAP					10.78	%		9.33	%
Return on average tangible common stockholders' equity - Non-GAAP					14.06	%		12.38	%
CALCULATION OF EFFICIENCY RATIO
Total noninterest expense				$	82,504		$	78,685
Amortization of core deposit intangibles					(452	)		(489	)
Long-term debt prepayment fee					-			(2,828	)
Noninterest expense, as adjusted				$	82,052		$	75,368
Net interest income				$	129,353		$	122,859
Noninterest income					16,682			19,659
Total revenue					146,035			142,518
Tax-equivalent adjustment on municipal securities					345			827
Gains on sales of investment securities					-			(2,524	)
Total revenue, as adjusted				$	146,380		$	140,821
Efficiency ratio - Non-GAAP					56.05	%		53.52	%