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Lakeland Bancorp Reports Record Full Year Results

OAK RIDGE, N.J., Jan. 30, 2015 (GLOBE NEWSWIRE) -- Lakeland Bancorp, Inc. (Nasdaq:LBAI) (the "Company") reported the following results for the fourth quarter of 2014 and for the year ended December 31, 2014:

  • Net Income for the fourth quarter of 2014 was $7.9 million, an 8% increase compared to $7.3 million for the fourth quarter of 2013. Earnings per diluted share in the fourth quarter of 2014 were $0.21, compared to $0.19 in the fourth quarter of 2013. Annualized Return on Average Assets was 0.90%, Annualized Return on Average Common Equity was 8.35%, and Annualized Return on Average Tangible Common Equity was 11.87%. Tangible book value per common share at December 31, 2014 was $7.06, an increase of 12% compared to year-end 2013.
  • Net Income for the year ended December 31, 2014 was $31.1 million, or $0.82 per diluted share, compared to $25.0 million, or $0.71 per diluted share, for 2013. Excluding pre-tax merger related expenses of $2.8 million in 2013, Net Income was $27.1 million or $0.77 per diluted share. For 2014, Return on Average Assets was 0.92%, the Return on Average Common Equity was 8.48%, and the Return on Average Tangible Common Equity was 12.21%.
  • Fourth quarter 2014 results included approximately $0.5 million in pretax, one-time expenses relating to the decision to close three (3) branch offices in early 2015 and the termination of a pension plan.
  • At December 31, 2014, loans totaled $2.66 billion, an increase of $42.2 million, or 2%, from September 30, 2014, and $185.3 million, or 8%, compared to December 31, 2013. The overall increase was primarily in total commercial loans, which increased by $175.2 million, or 11%, in 2014.
  • Total deposits were $2.79 billion at December 31, 2014, an increase of $81.6 million, or 3%, from 2013. Non-interest-bearing demand deposits, which totaled $646.1 million at year-end 2014, increased by $45.4 million, or 8%, from December 31, 2013. Non-interest-bearing demand deposits represented 23% of total deposits at year-end 2014.
  • Net Interest Margin ("NIM") in the fourth quarter of 2014 was 3.58%, which equaled NIM for the third quarter of 2014. For the full year 2014, NIM was 3.64%, a five basis point decrease from 2013.
  • The Provision for Loan and Lease Losses in the fourth quarter of 2014 was $1.6 million compared to $1.7 million for the same period in 2013. For the full year 2014, the provision totaled $5.9 million, which was 37% lower than the $9.3 million reported for 2013. Net charge-offs at $5.0 million (0.19% of average loans) for the full year 2014 were 41% lower than the $8.5 million (0.36% of average loans) for 2013.
  • On January 27, 2015, the Company declared a quarterly cash dividend of $0.075 per common share, payable on February 17, 2015 to holders of record as of the close of business on February 10, 2015.

Thomas J. Shara, Lakeland Bancorp's President and CEO said, "We are very pleased to report strong fourth quarter earnings, as well as record Net Income for the full year 2014, which increased by 15% compared to 2013 results, excluding merger related expenses. This improvement resulted from strong commercial loan growth, a stable Net Interest Margin as compared to the third quarter of 2014, and controlled noninterest expenses."

Earnings

As previously noted, the Company acquired Somerset Hills Bancorp ("Somerset Hills"), which had total assets of $355.9 million at the time of acquisition, on May 31, 2013. The Company's financial statements reflect the impact of the merger from the date of acquisition, which should be considered when comparing the full year results of 2014 and 2013.

Net Interest Income

Net interest income for the fourth quarter of 2014 was $28.9 million, as compared to $28.0 million for the same period in 2013, an increase of 3%. In the fourth quarter of 2014, Net Interest Margin ("NIM") was 3.58%, which equaled the NIM of the third quarter of 2014, and compared to 3.70% in the fourth quarter of 2013. The decrease in NIM in the fourth quarter of 2014 as compared to the similar period in 2013 was primarily due to a decrease in the yield on interest-earning assets. The annualized yield on interest-earning assets declined 12 basis points from 3.99% in the fourth quarter of 2013 to 3.87% for the fourth quarter of 2014. This decrease was primarily due to a 19 basis point decrease in the yield on average loans, as loans originated and refinanced in 2014 were made at lower rates in the current interest rate environment. The annualized cost of interest-bearing liabilities increased one basis point from 0.38% in the fourth quarter of 2013 to 0.39% in the fourth quarter of 2014, as liability costs have remained fairly stable.

For the year ended December 31, 2014, net interest income at $113.6 million compared to $104.5 million reported for 2013, an increase of $9.0 million, or 9%. NIM was 3.64% for 2014 compared to 3.69% for 2013. The Company's yield on interest-earning assets decreased 11 basis points from 4.03% for the year-ended December 31, 2013 to 3.92% for 2014. The Company's cost of interest-bearing liabilities decreased six basis points from 0.44% for 2013 to 0.38% for 2014.

Noninterest Income

Noninterest income totaled $4.5 million for the fourth quarter of 2014, as compared to $5.5 million for the same period in 2013. Included in noninterest income in the fourth quarter of 2013 were $0.3 million in gains on sales of investment securities and a $0.6 million gain on the sale of an OREO property. Excluding these items, noninterest income in the fourth quarter of 2014 at $4.5 million was equivalent to the total for the same period in 2013. Service charges on deposit accounts totaling $2.6 million decreased 6% from the fourth quarter of 2013, primarily due to a decline in overdraft fees, while commissions and fees totaling $1.2 million increased by 7% primarily due to increased investment commission income. Other income at $0.3 million was $0.6 million lower than the total for the fourth quarter of 2013, reflecting the aforementioned gain on sale of OREO.

Noninterest income totaled $17.7 million for the year-ended December 31, 2014 compared to $21.0 million for 2013. Included in noninterest income in 2013 were $0.8 million in gains on sales of investment securities, a $1.2 million gain on debt extinguishment, and the gain on sale of OREO. Excluding these items, noninterest income for 2014 at $17.7 million compared to $18.3 million in 2013. Service charges on deposit accounts at $10.5 million decreased by 3%, while commissions and fees at $4.6 million was equivalent to the total in 2013. Other income at $1.1 million decreased by $1.0 million primarily due to the OREO gain in 2013, as well as reductions in both gains on sales of mortgage loans and loan swap income in 2014.

Noninterest Expense

Noninterest expense for the fourth quarter of 2014 was $20.2 million compared to $20.7 million for the same period in 2013. Included in the fourth quarter 2014 totals were $0.3 million in costs associated with the termination of a pension plan and $0.2 million in expenses relating to anticipated branch closures in 2015, while fourth quarter 2013 totals included $0.7 million in long-term debt prepayment fees and $0.6 million in additional audit fees. Excluding these items, noninterest expense in the fourth quarter of 2014 at $19.7 million compared to $19.4 for the same period in 2013. Salary and benefit expense at $11.8 million, which included the $0.3 million benefit plan termination cost, increased by $1.1 million from the same period last year. Net occupancy, furniture and equipment expenses at $3.8 million were equivalent to last year's fourth quarter total. Other expenses at $2.6 million were $1.0 million lower than last year's fourth quarter total, primarily due to increased audit fees. The efficiency ratio for the fourth quarter of 2014 was 59.9%.

Noninterest expense for the full year 2014 at $79.1 million compared to $78.7 million for 2013. Included in the total for 2014 was $0.5 million in non-recurring items described in the fourth quarter noninterest expense analysis. Included in the 2013 total were $2.8 million in merger related costs, $1.2 million in long-term debt prepayment fees, and $0.6 million in audit fees. Excluding these items, noninterest expense for 2014 totaled $78.6 million compared to $74.1 million in 2013, an increase of 6%. Noninterest expense in 2013 only included Somerset Hills' expenses from the May 31, 2013 merger date. Salary and benefit expense at $45.2 million increased by 8%, partially due to increased staffing due to the Somerset Hills merger. Net occupancy, furniture and equipment expenses at $15.5 million were $1.2 million higher than 2013 primarily due to expenses relating to the six new branches acquired in the Somerset Hills merger, as well as a $0.4 million increase in snow removal costs in the first quarter of 2014. Other expenses totaling $11.4 million were $0.2 million lower than the total for 2013.

Financial Condition

At December 31, 2014, total assets were $3.54 billion, an increase of $220.5 million, or 7%, from December 31, 2013. As previously mentioned, total loans were $2.66 billion, an increase of $185.3 million, or 8%, in 2014. Total deposits were $2.79 billion as of December 31, 2014, an increase of $81.6 million from December 31, 2013. Noninterest demand deposits at $646.1 million increased by $45.4 million, or 8%, in 2014, while interest-bearing deposits at $2.1 billion increased by 2%.

Asset Quality

At December 31, 2014, non-performing assets totaled $21.7 million (0.61% of total assets) compared to $17.5 million (0.53% of total assets) at December 31, 2013. The Allowance for Loan and Lease Losses totaled $30.7 million at December 31, 2014 and represented 1.16% of total loans. In the fourth quarter of 2014, the Company had net charge offs totaling $1.0 million compared to $1.6 million in the fourth quarter of 2013. For the year ended December 31, 2014, the Company had net charge-offs of $5.0 million (0.19% of average loans), as compared to $8.5 million (0.36% of average loans) for 2013. The provision for loan and lease losses in the fourth quarter of 2014 was $1.6 million, compared to $1.7 million for the same period of 2013, and was $5.9 million for 2014, compared to $9.3 million for 2013.

Capital

At December 31, 2014, stockholders' equity was $379.4 million. Book value per common share was $10.01 and tangible book value was $7.06, an increase of 12% from December 31, 2013. As of December 31, 2014, the Company's leverage ratio was 9.08%. Tier I and total risk based capital ratios were 11.76% and 12.98%, respectively. The Tangible Common Equity ratio was 7.81%, an increase from 7.46% reported at December 31, 2013. These regulatory capital ratios exceed those necessary to be considered a well-capitalized institution under Federal guidelines.

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, and competition. 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 $3.5 billion in total assets with 51 offices spanning eight northern New Jersey counties: Bergen, Essex, Morris, Passaic, Somerset, Sussex, Union and Warren. Lakeland Bank is the second largest commercial bank headquartered in the state and 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 December 31, Year Ended December 31,
2014 2013 2014 2013
(Dollars in thousands except per share amounts)
INCOME STATEMENT
Net Interest Income $ 28,850 $ 27,973 $ 113,566 $ 104,542
Provision for Loan and Lease Losses (1,589) (1,687) (5,865) (9,343)
Noninterest Income:
Other Noninterest Income 4,469 5,139 17,720 18,925
Gains on investment securities -- 333 2 839
Gain on debt extinguishment -- -- -- 1,197
Long-term debt prepayment fee -- (683) -- (1,209)
Merger related expenses -- (7) -- (2,834)
Noninterest Expense (20,178) (20,024) (79,135) (74,698)
Pretax Income 11,552 11,044 46,288 37,419
Tax Expense (3,613) (3,703) (15,159) (12,450)
Net Income $ 7,939 $ 7,341 $ 31,129 $ 24,969
Basic Earnings Per Common Share (1) $ 0.21 $ 0.19 $ 0.82 $ 0.71
Diluted Earnings Per Common Share (1) $ 0.21 $ 0.19 $ 0.82 $ 0.71
Dividends per Common Share (1) $ 0.075 $ 0.071 $ 0.293 $ 0.271
Weighted Average Shares - Basic (1) 37,765 37,436 37,749 34,742
Weighted Average Shares - Diluted (1) 37,920 37,649 37,869 34,902
SELECTED OPERATING RATIOS
Annualized Return on Average Assets 0.90% 0.88% 0.92% 0.80%
Annualized Return on Average Common Equity 8.35% 8.30% 8.48% 7.78%
Annualized Return on Average Tangible Common Equity (2) 11.87% 12.23% 12.21% 11.42%
Annualized Return on Interest Earning Assets 3.87% 3.99% 3.92% 4.03%
Annualized Cost of Interest Bearing Liabilities 0.39% 0.38% 0.38% 0.44%
Annualized Net Interest Spread 3.48% 3.61% 3.54% 3.59%
Annualized Net Interest Margin 3.58% 3.70% 3.64% 3.69%
Efficiency ratio (2) 59.87% 59.44% 59.35% 59.74%
Stockholders' equity to total assets 10.72% 10.59%
Book value per common share (1) $ 10.01 $ 9.28
Tangible book value per common share (1) (2) $ 7.06 $ 6.31
Tangible common equity to tangible assets (1) (2) 7.81% 7.46%
ASSET QUALITY RATIOS 12/31/2014 12/31/2013
Ratio of allowance for loan and lease losses to total loans 1.16% 1.21%
Non-accruing loans to total loans 0.78% 0.69%
Non-performing assets to total assets 0.61% 0.53%
Annualized net charge-offs to average loans 0.19% 0.36%
SELECTED BALANCE SHEET DATA AT PERIOD-END 12/31/2014 12/31/2013
Loans and Leases $ 2,655,614 $ 2,470,289
Allowance for Loan and Lease Losses (30,684) (29,821)
Investment Securities 575,271 540,788
Total Assets 3,538,325 3,317,791
Total Deposits 2,790,819 2,709,205
Short-Term Borrowings 108,935 81,991
Other Borrowings 243,736 160,238
Stockholders' Equity 379,438 351,424
SELECTED AVERAGE BALANCE SHEET DATA For the Three Months Ended For the Year Ended
12/31/2014 12/31/2013 12/31/2014 12/31/2013
Loans and Leases, net $ 2,622,602 $ 2,427,505 $ 2,568,056 $ 2,317,158
Investment Securities 566,039 535,210 543,806 497,017
Interest-Earning Assets 3,227,390 3,023,256 3,147,266 2,856,045
Total Assets 3,483,162 3,291,865 3,400,461 3,102,860
Non Interest-Bearing Demand Deposits 679,796 638,016 652,685 576,421
Savings Deposits 384,064 382,062 384,715 370,980
Interest-Bearing Transaction Accounts 1,487,492 1,450,055 1,454,967 1,341,691
Time Deposits 277,930 301,640 283,905 309,384
Total Deposits 2,829,282 2,771,773 2,776,272 2,598,476
Short-Term Borrowings 38,653 36,928 55,798 45,701
Other Borrowings 221,848 117,353 186,022 123,347
Total Interest-Bearing Liabilities 2,409,988 2,288,039 2,365,407 2,191,103
Stockholders' Equity 377,379 351,067 367,210 320,823
(1) Adjusted for 5% stock dividend paid on June 17, 2014 to shareholders of record June 3, 2014
(2) See supplemental information - non-GAAP financial measures
Lakeland Bancorp, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended December 31, Year Ended December 31,
2014 2013 2014 2013
(dollars in thousands, except per share amounts)
INTEREST INCOME
Loans and fees $ 28,182 $ 27,207 $ 110,587 $ 104,329
Federal funds sold and interest bearing deposits with banks 25 36 71 93
Taxable investment securities and other 2,592 2,441 10,040 7,985
Tax exempt investment securities 429 461 1,805 1,792
TOTAL INTEREST INCOME 31,228 30,145 122,503 114,199
INTEREST EXPENSE
Deposits 1,302 1,349 5,064 6,089
Federal funds purchased and securities sold under agreements to repurchase 9 3 78 39
Other borrowings 1,067 820 3,795 3,529
TOTAL INTEREST EXPENSE 2,378 2,172 8,937 9,657
NET INTEREST INCOME 28,850 27,973 113,566 104,542
Provision for loan and lease losses 1,589 1,687 5,865 9,343
NET INTEREST INCOME AFTER PROVISION FOR
LOAN AND LEASE LOSSES 27,261 26,286 107,701 95,199
NONINTEREST INCOME
Service charges on deposit accounts 2,612 2,785 10,523 10,837
Commissions and fees 1,168 1,090 4,634 4,585
Gains on sales and calls of investment securities -- 333 2 839
Gain on debt extinguishment -- -- -- 1,197
Income on bank owned life insurance 363 374 1,453 1,410
Other income 326 890 1,110 2,093
TOTAL NONINTEREST INCOME 4,469 5,472 17,722 20,961
NONINTEREST EXPENSE
Salaries and employee benefits 11,827 10,766 45,167 41,871
Net occupancy expense 2,190 2,153 8,865 8,074
Furniture and equipment 1,647 1,689 6,605 6,181
Stationery, supplies and postage 347 396 1,403 1,482
Marketing expense 534 650 2,025 2,088
FDIC insurance expense 518 509 2,019 2,014
Legal expense 309 98 945 1,032
Other real estate owned and other repossessed assets expense 69 9 234 24
Long-term debt prepayment fee -- 683 -- 1,209
Merger related expenses -- 7 -- 2,834
Core deposit intangible amortization 111 124 464 288
Other expenses 2,626 3,630 11,408 11,644
TOTAL NONINTEREST EXPENSE 20,178 20,714 79,135 78,741
INCOME BEFORE PROVISION FOR INCOME TAXES 11,552 11,044 46,288 37,419
Provision for income taxes 3,613 3,703 15,159 12,450
NET INCOME $ 7,939 $ 7,341 $ 31,129 $ 24,969
EARNINGS PER COMMON SHARE (1)
Basic $ 0.21 $ 0.19 $ 0.82 $ 0.71
Diluted $ 0.21 $ 0.19 $ 0.82 $ 0.71
DIVIDENDS PER COMMON SHARE (1) $ 0.075 $ 0.071 $ 0.293 $ 0.271
(1) Adjusted for 5% stock dividend paid on June 17, 2014 to shareholders of record June 3, 2014
Lakeland Bancorp, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
ASSETS 2014 2013
(dollars in thousands) (Unaudited)
Cash and due from banks $ 102,549 $ 94,205
Federal funds sold and interest-bearing deposits due from banks 6,767 8,516
Total cash and cash equivalents 109,316 102,721
Investment securities available for sale, at fair value 457,449 431,106
Investment securities held to maturity; fair value of $109,030 in 2014 and $100,394 in 2013 107,976 101,744
Federal Home Loan Bank and other membership stocks, at cost 9,846 7,938
Loans held for sale 592 1,206
Loans:
Commercial, secured by real estate 1,593,781 1,442,980
Commercial, industrial and other 238,252 213,808
Leases 54,749 41,332
Residential mortgages 431,190 432,831
Consumer and home equity 337,642 339,338
Total loans 2,655,614 2,470,289
Net deferred costs (1,788) (1,273)
Allowance for loan and lease losses (30,684) (29,821)
Net loans 2,623,142 2,439,195
Premises and equipment, net 35,675 37,148
Accrued interest receivable 8,896 8,603
Goodwill 109,974 109,974
Other identifiable intangible assets 1,960 2,424
Bank owned life insurance 57,476 55,968
Other assets 16,023 19,764
TOTAL ASSETS $ 3,538,325 $ 3,317,791
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits:
Noninterest bearing $ 646,052 $ 600,652
Savings and interest-bearing transaction accounts 1,864,805 1,812,467
Time deposits under $100,000 165,625 180,859
Time deposits $100,000 and over 114,337 115,227
Total deposits 2,790,819 2,709,205
Federal funds purchased and securities sold under agreements to repurchase 108,935 81,991
Other borrowings 202,498 119,000
Subordinated debentures 41,238 41,238
Other liabilities 15,397 14,933
TOTAL LIABILITIES 3,158,887 2,966,367
STOCKHOLDERS' EQUITY:
Common stock, no par value; authorized 70,000,000 shares; issued 37,910,840 shares at December 31, 2014 and 37,873,800 shares at December 31, 2013 384,095 364,637
Accumulated Deficit (6,180) (8,538)
Treasury shares, at cost, no shares at December 31, 2014 and December 31, 2013 -- --
Accumulated other comprehensive gain (loss) 1,523 (4,675)
TOTAL STOCKHOLDERS' EQUITY 379,438 351,424
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,538,325 $ 3,317,791
Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
For the Quarter Ended
Dec 31, Sept 30, Jun 30, Mar 31, Dec 31,
(dollars in thousands, except per share data) 2014 2014 2014 2014 2013
INCOME STATEMENT
Net Interest Income $ 28,850 $ 28,452 $ 28,419 $ 27,845 $ 27,973
Provision for Loan and Lease Losses (1,589) (1,194) (1,593) (1,489) (1,687)
Noninterest Income:
Other Noninterest Income 4,469 4,809 4,371 4,071 5,139
Gains on Investment Securities -- -- -- 2 333
Long-term Debt Prepayment Fee -- -- -- -- (683)
Other Noninterest Expense (20,178) (19,685) (19,530) (19,742) (20,031)
Pretax Income 11,552 12,382 11,667 10,687 11,044
Tax Expense (3,613) (4,136) (3,886) (3,524) (3,703)
Net Income $ 7,939 $ 8,246 $ 7,781 $ 7,163 $ 7,341
Basic Earnings Per Common Share (1) $ 0.21 $ 0.22 $ 0.20 $ 0.19 $ 0.19
Diluted Earnings Per Common Share (1) $ 0.21 $ 0.22 $ 0.20 $ 0.19 $ 0.19
Dividends Per Common Share (1) $ 0.075 $ 0.075 $ 0.071 $ 0.071 $ 0.071
Dividends Paid $ 2,853 $ 2,853 $ 2,717 $ 2,705 $ 2,688
Weighted Average Shares - Basic (1) 37,765 37,738 37,740 37,683 37,436
Weighted Average Shares - Diluted (1) 37,920 37,862 37,850 37,806 37,649
SELECTED OPERATING RATIOS
Annualized Return on Average Assets 0.90% 0.95% 0.93% 0.88% 0.88%
Annualized Return on Average Common Equity 8.35% 8.83% 8.58% 8.14% 8.30%
Annualized Return on Tangible Common Equity (2) 11.87% 12.66% 12.41% 11.88% 12.23%
Annualized Net Interest Margin 3.58% 3.58% 3.69% 3.72% 3.70%
Efficiency ratio (2) 59.87% 57.97% 58.73% 60.90% 59.44%
Common stockholders' equity to total assets 10.72% 10.65% 10.57% 10.62% 10.59%
Tangible common equity to tangible assets (2) 7.81% 7.69% 7.59% 7.55% 7.46%
Tier 1 risk-based ratio 11.76% 11.75% 11.54% 11.76% 11.73%
Total risk-based ratio 12.98% 12.97% 12.75% 13.01% 12.98%
Tier 1 leverage ratio 9.08% 9.02% 9.06% 9.01% 8.90%
Book value per common share (1) $ 10.01 $ 9.83 $ 9.70 $ 9.48 $ 9.28
Tangible book value per common share (1) (2) $ 7.06 $ 6.87 $ 6.74 $ 6.52 $ 6.31
(1) Adjusted for 5% stock dividend paid on June 17, 2014 to shareholders of record June 3, 2014
(2) See Supplemental Information - Non - GAAP financial measures
Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
For the Quarter Ended
Dec 31, Sept 30, Jun 30, Mar 31, Dec 31,
(dollars in thousands) 2014 2014 2014 2014 2013
SELECTED BALANCE SHEET DATA AT PERIOD-END
Loans and Leases $ 2,655,614 $ 2,613,404 $ 2,610,198 $ 2,504,626 $ 2,470,289
Allowance for Loan and Lease Losses (30,684) (30,047) (29,866) (29,520) (29,821)
Investment Securities 575,271 558,032 530,934 533,165 540,788
Total Assets 3,538,325 3,498,905 3,479,548 3,386,720 3,317,791
Total Deposits 2,790,819 2,776,931 2,726,850 2,736,733 2,709,205
Short-Term Borrowings 108,935 112,796 156,511 115,952 81,991
Other Borrowings 243,736 220,938 215,238 160,238 160,238
Stockholders' Equity 379,438 372,539 367,833 359,539 351,424
Loans and Leases
Commercial real estate $ 1,593,781 $ 1,557,168 $ 1,551,071 $ 1,486,274 $ 1,442,980
Commercial, industrial and other 238,252 231,961 237,071 208,056 213,808
Leases 54,749 52,285 50,191 43,720 41,332
Residential mortgages 431,190 431,477 433,634 430,559 432,831
Consumer and Home Equity 337,642 340,513 338,231 336,017 339,338
Total loans $ 2,655,614 $ 2,613,404 $ 2,610,198 $ 2,504,626 $ 2,470,289
Deposits
Noninterest bearing $ 646,052 $ 674,933 $ 649,186 $ 630,499 $ 600,652
Savings and interest-bearing transaction accounts 1,864,805 1,820,657 1,797,358 1,816,084 1,812,467
Time deposits under $100,000 165,625 168,391 169,655 177,284 180,859
Time deposits $100,000 and over 114,337 112,950 110,651 112,866 115,227
Total deposits $ 2,790,819 $ 2,776,931 $ 2,726,850 $ 2,736,733 $ 2,709,205
SELECTED AVERAGE BALANCE SHEET DATA
Loans and Leases, net $ 2,622,602 $ 2,608,687 $ 2,552,010 $ 2,486,990 $ 2,427,505
Investment Securities 566,039 529,379 537,974 541,721 535,210
Interest-Earning Assets 3,227,390 3,183,361 3,114,539 3,061,555 3,023,256
Total Assets 3,483,162 3,443,946 3,360,289 3,312,709 3,291,865
Non Interest-Bearing Demand Deposits 679,796 671,049 640,080 618,944 638,016
Savings Deposits 384,064 382,642 387,179 385,007 382,062
Interest-Bearing Transaction Accounts 1,487,492 1,457,680 1,433,382 1,440,770 1,450,055
Time Deposits 277,930 280,200 284,475 293,225 301,640
Total Deposits 2,829,282 2,791,571 2,745,116 2,737,946 2,771,773
Short-Term Borrowings 38,653 49,725 78,475 56,602 36,928
Other Borrowings 221,848 217,049 158,432 145,580 117,353
Total Interest-Bearing Liabilities 2,409,988 2,387,295 2,341,944 2,321,184 2,288,039
Stockholders' Equity 377,379 370,448 363,802 356,951 351,067
Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
For the Quarter Ended
Dec 31, Sept 30, Jun 30, Mar 31, Dec 31,
(dollars in thousands) 2014 2014 2014 2014 2013
AVERAGE ANNUALIZED YIELDS (taxable equivalent basis)
Assets:
Loans and leases 4.26% 4.25% 4.33% 4.39% 4.45%
Taxable investment securities and other 2.09% 2.08% 2.18% 2.19% 2.12%
Tax-exempt securities 3.75% 3.79% 3.74% 3.80% 3.83%
Federal funds sold and interest-bearing cash accounts 0.26% 0.21% 0.15% 0.16% 0.24%
Total interest-earning assets 3.87% 3.87% 3.97% 3.99% 3.99%
Liabilities:
Savings accounts 0.05% 0.05% 0.05% 0.05% 0.05%
Interest-bearing transaction accounts 0.23% 0.23% 0.23% 0.23% 0.23%
Time deposits 0.54% 0.49% 0.51% 0.56% 0.60%
Borrowings 1.65% 1.63% 1.50% 1.63% 2.13%
Total interest-bearing liabilities 0.39% 0.39% 0.36% 0.36% 0.38%
Net interest spread (taxable equivalent basis) 3.48% 3.48% 3.60% 3.63% 3.61%
Annualized Net Interest Margin (taxable equivalent basis) 3.58% 3.58% 3.69% 3.72% 3.70%
Annualized Cost of Deposits 0.18% 0.18% 0.18% 0.19% 0.19%
ASSET QUALITY DATA
Allowance for Loan and Lease Losses
Balance at beginning of period $ 30,047 $ 29,866 $ 29,520 $ 29,821 $ 29,757
Provision for loan losses 1,589 1,194 1,593 1,489 1,687
Net Charge-offs (952) (1,013) (1,247) (1,790) (1,623)
Balance at end of period $ 30,684 $ 30,047 $ 29,866 $ 29,520 $ 29,821
Net Loan Charge-offs (Recoveries)
Commercial real estate $ (287) $ 28 $ (152) $ 1,613 $ 928
Commercial, industrial and other 99 (71) 511 (578) 100
Leases 185 229 126 39 (2)
Home equity and consumer 860 638 411 567 244
Real estate - mortgage 95 189 351 149 353
Net charge-offs $ 952 $ 1,013 $ 1,247 $ 1,790 $ 1,623
Nonperforming Assets
Commercial real estate $ 7,612 $ 8,549 $ 9,647 $ 12,279 $ 8,528
Commercial, industrial and other 308 599 700 246 88
Leases 88 141 61 143 --
Home equity and consumer 3,415 2,114 2,251 2,431 2,175
Real estate - mortgage 9,246 7,221 6,730 6,875 6,141
Total non-accruing loans 20,669 18,624 19,389 21,974 16,932
Property acquired through foreclosure or repossession 1,026 982 850 698 520
Total non-performing assets $ 21,695 $ 19,606 $ 20,239 $ 22,672 $ 17,452
Loans past due 90 days or more and still accruing $ 66 $ 429 $ 286 $ 451 $ 1,997
Loans restructured and still accruing $ 10,579 $ 7,957 $ 6,818 $ 6,086 $ 10,289
Ratio of allowance for loan and lease losses to total loans 1.16% 1.15% 1.14% 1.18% 1.21%
Non-performing loans to total loans 0.78% 0.71% 0.74% 0.88% 0.69%
Non-performing assets to total assets 0.61% 0.56% 0.58% 0.67% 0.53%
Annualized net charge-offs to average loans 0.15% 0.16% 0.20% 0.29% 0.27%
Lakeland Bancorp, Inc.
Supplemental Information - Non-GAAP Financial Measures
(unaudited)
At or for the Quarter Ended,
Dec 31, Sept 30, Jun 30, Mar 31, Dec 31,
(dollars in thousands, except per share amounts) 2014 2014 2014 2014 2013
Calculation of tangible book value per common share
Total common stockholders' equity at end of period - GAAP $ 379,438 $ 372,539 $ 367,833 $ 359,539 $ 351,424
Less:
Goodwill 109,974 109,974 109,974 109,974 109,974
Other identifiable intangible assets, net 1,960 2,071 2,182 2,301 2,424
Total tangible common stockholders' equity at end of period - Non- GAAP $ 267,504 $ 260,494 $ 255,677 $ 247,264 $ 239,026
Shares outstanding at end of period (1) 37,911 37,910 37,914 37,912 37,874
Book value per share - GAAP (1) $ 10.01 $ 9.83 $ 9.70 $ 9.48 $ 9.28
Tangible book value per share - Non-GAAP (1) $ 7.06 $ 6.87 $ 6.74 $ 6.52 $ 6.31
Calculation of tangible common equity to tangible assets
Total tangible common stockholders' equity at end of period - Non- GAAP $ 267,504 $ 260,494 $ 255,677 $ 247,264 $ 239,026
Total assets at end of period $ 3,538,325 $ 3,498,905 $ 3,479,548 $ 3,386,720 $ 3,317,791
Less:
Goodwill 109,974 109,974 109,974 109,974 109,974
Other identifiable intangible assets, net 1,960 2,071 2,182 2,301 2,424
Total tangible assets at end of period - Non-GAAP $ 3,426,391 $ 3,386,860 $ 3,367,392 $ 3,274,445 $ 3,205,393
Common equity to assets - GAAP 10.72% 10.65% 10.57% 10.62% 10.59%
Tangible common equity to tangible assets - Non-GAAP 7.81% 7.69% 7.59% 7.55% 7.46%
Calculation of return on average tangible common equity
Net income - GAAP $ 7,939 $ 8,246 $ 7,781 $ 7,163 $ 7,341
Total average common stockholders' equity 377,379 370,448 363,802 356,951 351,067
Less:
Average goodwill 109,974 109,974 109,974 109,974 110,376
Average other identifiable intangible assets, net 2,028 2,141 2,256 2,379 2,496
Total average tangible common stockholders' equity - Non - GAAP $ 265,377 $ 258,333 $ 251,572 $ 244,598 $ 238,195
Return on average common stockholders' equity - GAAP 8.35% 8.83% 8.58% 8.14% 8.30%
Return on average tangible common stockholders' equity - Non-GAAP 11.87% 12.66% 12.41% 11.88% 12.23%
Calculation of efficiency ratio
Total non-interest expense $ 20,178 $ 19,685 $ 19,530 $ 19,742 $ 20,714
Less:
Amortization of core deposit intangibles (111) (111) (119) (123) (124)
Other real estate owned and other repossessed asset (expense) income (69) (50) (100) (15) (9)
Long-term debt prepayment fee -- -- -- -- (683)
Merger related expenses -- -- -- -- (7)
Provision for unfunded lending commitments, net 89 (106) 93 (11) (63)
Non-interest expense, as adjusted $ 20,087 $ 19,418 $ 19,404 $ 19,593 $ 19,828
Net interest income $ 28,850 $ 28,452 $ 28,419 $ 27,845 $ 27,973
Total noninterest income 4,469 4,809 4,371 4,073 5,472
Total revenue 33,319 33,261 32,790 31,918 33,445
Plus: Tax-equivalent adjustment on municipal securities 231 235 251 255 248
Less:
Gains on debt extinguishment -- -- -- -- --
Gains on sales investment securities -- -- -- (2) (333)
Total revenue, as adjusted $ 33,550 $ 33,496 $ 33,041 $ 32,171 $ 33,360
Efficiency ratio - Non-GAAP 59.87% 57.97% 58.73% 60.90% 59.44%
(1) Adjusted for 5% stock dividend paid on June 17, 2014 to shareholders of record June 3, 2014
Lakeland Bancorp, Inc.
Supplemental Information - Non-GAAP Financial Measures
(Unaudited)
For the Year Ended,
December 31, December 31,
(dollars in thousands, except per share amounts) 2014 2013
Calculation of return on average tangible common equity
Net income - GAAP $ 31,129 $ 24,969
Total average common stockholders' equity $ 367,210 $ 320,823
Less:
Average goodwill 109,974 100,753
Average other identifiable intangible assets, net 2,200 1,513
Total average tangible common stockholders' equity - Non GAAP $ 255,036 $ 218,557
Return on average common stockholders' equity - GAAP 8.48% 7.78%
Return on average tangible common stockholders' equity - Non-GAAP 12.21% 11.42%
Calculation of efficiency ratio
Total non-interest expense $ 79,135 $ 78,741
Less:
Amortization of core deposit intangibles (464) (288)
Other real estate owned and other repossessed asset expense (234) (24)
Long-term debt prepayment fee -- (1,209)
Merger related expenses -- (2,834)
Provision for unfunded lending commitments 65 (55)
Non-interest expense, as adjusted $ 78,502 $ 74,331
Net interest income $ 113,566 $ 104,542
Noninterest income 17,722 20,961
Total revenue 131,288 125,503
Plus: Tax-equivalent adjustment on municipal securities 972 965
Less:
Gains on investment securities (2) (839)
Gains on extinguishment of debt -- (1,197)
Total revenue, as adjusted $ 132,258 $ 124,432
Efficiency ratio - Non - GAAP 59.35% 59.74%

CONTACT: Thomas J. Shara President & CEO Joseph F. Hurley EVP & CFO 973-697-2000Source:Lakeland Bancorp, Inc.