Lakeland Bancorp Second Quarter Results Driven by Strong Loan Growth

OAK RIDGE, N.J., July 22, 2015 (GLOBE NEWSWIRE) -- Lakeland Bancorp, Inc. (NASDAQ:LBAI) (the "Company") reported the following results for the second quarter of 2015:

  • Net Income in the second quarter of 2015 was $7.9 million, or $0.21 per diluted share, compared to $7.8 million, or $0.20 per diluted share, for the same period in 2014. For the second quarter of 2015, Annualized Return on Average Assets was 0.88%, Annualized Return on Average Common Equity was 8.08%, and Annualized Return on Average Tangible Common Equity was 11.33%.
  • Net Income for the first six months of 2015 was $16.2 million, or $0.42 per diluted share, compared to $14.9 million, or $0.39 per diluted share, for the same period in 2014. The Annualized Return on Average Assets for the six months ended June 30, 2015 was 0.92%, the Annualized Return on Average Common Equity was 8.44%, and the Annualized Return on Average Tangible Common Equity was 11.87%.
  • The Company reported strong loan growth in the second quarter of 2015. Total loans increased by $65.0 million, or 2.4%, to $2.76 billion during the quarter. This overall increase was primarily in commercial loans, which increased by $77.6 million, or 4.1%. For the first six months of 2015, total loans increased by $101.1 million, or 3.8%, with a $125.9 million, or 6.9%, increase in commercial loans.
  • During the second quarter, the Company opened its second new Loan Production Office ("LPO") in as many quarters. This LPO serves the greater Hudson Valley, NY area and represents a new market for the Company. As previously announced, the Company also consolidated three branch locations in the quarter.
  • Net Interest Margin ("NIM") was 3.46% for the second quarter of 2015, compared to 3.56% for the first quarter of 2015 and 3.69% for the second quarter of 2014.
  • Total deposits have increased $52.1 million to $2.84 billion since December 31, 2014. Most notably, noninterest bearing deposits increased $68.2 million, or 10.6%, in 2015.
  • On July 21, 2015, the Company declared a quarterly cash dividend of $0.085 per common share, payable on August 14, 2015 to holders of record as of the close of business on August 4, 2015.

Thomas J. Shara, Lakeland Bancorp's President and CEO said, "The second quarter was highlighted by the opening of our Loan Production Office in the Hudson Valley region of New York, continued strong growth of commercial loans as a result of our highly focused lending strategy and sustained growth in noninterest bearing deposits."

Earnings

Net Interest Income

Net interest income for the second quarter of 2015 was $28.7 million, as compared to $28.4 million for the same period in 2014. The ten basis point decline in NIM from first quarter 2015 to second quarter 2015 was primarily due to the growth in new commercial loans originated and the refinancing of existing loans, both at lower rates, as well as a decline in yields from lower net interest recoveries. The annualized yield on interest earning assets for the second quarter of 2015 was 3.78%, as compared to 3.86% reported in the first quarter of 2015. The annualized cost of interest bearing liabilities for the second quarter of 2015 was 0.42%, as compared to 0.40% in the first quarter of 2015.

Net interest income for the first six months of 2015 was $57.2 million, as compared to $56.3 million reported for the first six months of 2014. Annualized NIM for the first six months of 2015 was 3.51%, compared to 3.71% for the same period in 2014. The Company's annualized yield on earning assets decreased from 3.98% for the first six months of 2014 to 3.82% for the same period in 2015. The Company's cost of interest bearing liabilities increased from 0.36% for the first six months of 2014 to 0.41% for the first six months of 2015.

Noninterest Income

Noninterest income totaled $5.0 million for the second quarter of 2015, as compared to $4.4 million for the same period last year. This $0.6 million, or 13.4%, increase is primarily due to the $0.3 million increase in gain on sale of loans and $0.3 million in swap income.

Noninterest income totaled $9.7 million for the first six months of 2015, which was $1.3 million, or 14.8%, higher than the same period in 2014. Included in noninterest income was a $0.5 million increase in gain on sale of loans, $0.3 million in swap income, and $0.3 million in death benefits received on a Bank Owned Life Insurance Policy.

Noninterest Expense

Noninterest expense for the second quarter of 2015 was $21.2 million, as compared to $19.5 million for the same period in 2014. Salary and benefit expense at $12.1 million increased by $0.9 million, primarily due to $0.3 million in costs associated with the addition of the new LPOs, $0.2 million in increased medical benefit costs, and year-over-year incremental salary and benefit increases. Net occupancy expense at $2.3 million increased $0.2 million and included a $0.2 million write down to fair market value for one of the closed branches. Other expenses at $3.4 million increased $0.5 million, primarily due to $0.3 million in additional loan related expenses.

For the first six months of 2015, noninterest expenses were $41.2 million, as compared to $39.3 million for the same period in 2014. Salary and benefit expense at $23.9 million increased by $1.9 million, primarily due to $0.4 million in new costs associated with the addition of the new LPOs in 2015, $0.3 million due to the timing of the issuance of restricted stock compensation, $0.3 million in increased medical benefit costs, and year-over-year incremental salary and benefit increases. The $0.2 million increase in net occupancy expense was due to a $0.2 million write down to the fair market value for one of the closed branches.

Financial Condition

At June 30, 2015, total assets were $3.70 billion, an increase of $160.8 million, or 4.5%, from December 31, 2014. Total loans were $2.76 billion, an increase of $101.1 million, or 3.8%, from December 31, 2014. Total deposits were $2.84 billion, an increase of $52.1 million from December 31, 2014. Noninterest bearing deposits at $714.2 million have increased by $68.2 million, or 10.6%, in 2015. Interest bearing deposits at $2.13 billion have decreased this year by $16.0 million, primarily due to a $68.0 million decrease in interest bearing public funds. This decrease was partially offset by a $34.4 million increase in money market demand accounts and a $26.5 million increase in CDs issued.

Asset Quality

At June 30, 2015, non-performing assets totaled $20.1 million (0.54% of total assets), a decrease of $1.6 million, or 7.5%, when compared to $21.7 million (0.61% of total assets) at December 31, 2014. Non-performing loans to total loans at 0.69% decreased nine basis points from December 31, 2014. The Allowance for Loan and Lease Losses totaled $30.2 million at June 30, 2015 and represented 1.09% of total loans, compared to $30.7 million at December 31, 2014, which represented 1.16% of total loans. For the first six months of 2015, the Company had net charge-offs of $2.1 million (0.16% of average loans), as compared to $3.0 million (0.24% of average loans) for the same period in 2014. The provision for loan and lease losses for the first six months of 2015 was $1.6 million, compared to $3.1 million for the same period in 2014.

Capital

At June 30, 2015, stockholders' equity was $390.9 million, while book value per common share was $10.31. Tangible book value per common share was $7.36, an increase of 4.2% from December 31, 2014. As of June 30, 2015, the Company's leverage ratio was 9.12%. Tier I and total risk based capital ratios were 11.05% and 12.15%, respectively. The common equity tier 1 capital ratio was 9.66%. The tangible common equity ratio was 7.78%. The 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 $3.7 billion in total assets with 48 New Jersey branch offices in Bergen, Essex, Morris, Passaic, Somerset, Sussex, Union and Warren counties, five New Jersey regional commercial lending centers in Bernardsville, Montville, Newton, Teaneck and Wyckoff and two commercial loan production offices serving Middlesex and Monmouth counties in New Jersey and the Hudson Valley region of New York. Lakeland Bank offers an extensive array of consumer and commercial products and services, including online and mobile banking, localized commercial lending teams, and 24-hour or less turnaround time on consumer loan applications. For more information about the full line of products and services, visit LakelandBank.com.

Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
(Dollars in thousands, except per share amounts) 2015 2014 2015 2014
INCOME STATEMENT
Net Interest Income $ 28,669 $ 28,419 $ 57,187 $ 56,264
Provision for Loan and Lease Losses (740) (1,593) (1,610) (3,082)
Other Noninterest Income 4,494 4,219 8,967 8,209
Gain on Sale of Loans 464 152 729 235
Noninterest Expense (21,195) (19,530) (41,237) (39,272)
Pretax Income 11,692 11,667 24,036 22,354
Tax Expense (3,830) (3,886) (7,844) (7,410)
Net Income $ 7,862 $ 7,781 $ 16,192 $ 14,944
Basic Earnings per Common Share $ 0.21 $ 0.20 $ 0.42 $ 0.39
Diluted Earnings per Common Share $ 0.21 $ 0.20 $ 0.42 $ 0.39
Dividends per Common Share $ 0.085 $ 0.071 $ 0.160 $ 0.142
Weighted Average Shares - Basic 37,854 37,740 37,827 37,711
Weighted Average Shares - Diluted 37,988 37,850 37,961 37,828
SELECTED OPERATING RATIOS
Annualized Return on Average Assets 0.88% 0.93% 0.92% 0.90%
Annualized Return on Average Common Equity 8.08% 8.58% 8.44% 8.36%
Annualized Return on Average Tangible Common Equity (1) 11.33% 12.41% 11.87% 12.15%
Annualized Return on Interest Earning Assets 3.78% 3.97% 3.82% 3.98%
Annualized Cost of Interest Bearing Liabilities 0.42% 0.36% 0.41% 0.36%
Annualized Net Interest Spread 3.36% 3.60% 3.41% 3.62%
Annualized Net Interest Margin 3.46% 3.69% 3.51% 3.71%
Efficiency Ratio (1) 62.09% 58.73% 60.64% 59.80%
Stockholders' Equity to Total Assets 10.57% 10.57%
Book Value per Common Share $ 10.31 $ 9.70
Tangible Book Value per Common Share (1) $ 7.36 $ 6.74
Tangible Common Equity to Tangible Assets (1) 7.78% 7.59%
ASSET QUALITY RATIOS 6/30/2015 6/30/2014
Ratio of Allowance for Loan and Lease Losses to Total Loans 1.09% 1.14%
Non-accruing Loans to Total Loans 0.69% 0.74%
Non-performing Assets to Total Assets 0.54% 0.58%
Annualized Net Charge-Offs to Average Loans 0.16% 0.24%
SELECTED BALANCE SHEET DATA AT PERIOD-END 6/30/2015 6/30/2014
Loans and Leases $ 2,756,694 $ 2,610,198
Allowance for Loan and Lease Losses (30,174) (29,866)
Investment Securities 597,598 530,934
Total Assets 3,699,127 3,479,548
Total Deposits 2,842,953 2,726,850
Short-Term Borrowings 146,249 156,511
Other Borrowings 303,966 215,238
Stockholders' Equity 390,860 367,833
SELECTED AVERAGE BALANCE SHEET DATA For the Three Months Ended For the Six Months Ended
6/30/2015 6/30/2014 6/30/2015 6/30/2014
Loans and Leases, net $ 2,720,801 $ 2,552,010 $ 2,690,823 $ 2,519,679
Investment Securities 600,547 537,974 591,778 539,837
Interest Earning Assets 3,345,380 3,114,539 3,308,450 3,088,193
Total Assets 3,600,416 3,360,289 3,563,860 3,336,630
Noninterest Bearing Demand Deposits 688,854 640,080 674,780 629,570
Savings Deposits 402,142 387,179 398,667 386,099
Interest Bearing Transaction Accounts 1,480,866 1,433,382 1,488,028 1,437,055
Time Deposits 295,996 284,475 288,459 288,826
Total Deposits 2,867,858 2,745,116 2,849,934 2,741,550
Short-Term Borrowings 59,249 78,475 53,570 67,599
Other Borrowings 267,610 158,432 257,519 152,042
Total Interest Bearing Liabilities 2,505,863 2,341,944 2,486,243 2,331,621
Stockholders' Equity 390,151 363,802 386,887 360,395
(1) See supplemental information - Non-GAAP financial measures
Lakeland Bancorp, Inc.
Consolidated Statements of Operations
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
(Dollars in thousands, except per share amounts) 2015 2014 2015 2014
INTEREST INCOME
Loans and fees $28,211 $27,558 $56,107 $54,456
Federal funds sold and interest bearing deposits with banks 11 9 23 22
Taxable investment securities and other 2,688 2,515 5,362 5,061
Tax exempt investment securities 398 467 808 940
TOTAL INTEREST INCOME 31,308 30,549 62,300 60,479
INTEREST EXPENSE
Deposits 1,346 1,243 2,629 2,506
Federal funds purchased and securities sold under agreements to repurchase 37 35 59 50
Other borrowings 1,256 852 2,425 1,659
TOTAL INTEREST EXPENSE 2,639 2,130 5,113 4,215
NET INTEREST INCOME 28,669 28,419 57,187 56,264
Provision for loan and lease losses 740 1,593 1,610 3,082
NET INTEREST INCOME AFTER PROVISION FOR
LOAN AND LEASE LOSSES 27,929 26,826 55,577 53,182
NONINTEREST INCOME
Service charges on deposit accounts 2,450 2,663 4,790 5,222
Commissions and fees 1,196 1,082 2,503 2,095
Gain on investment securities 17 -- 17 2
Gain on sale of loans 464 152 729 235
Income on bank owned life insurance 388 365 1,087 725
Other income 443 109 570 165
TOTAL NONINTEREST INCOME 4,958 4,371 9,696 8,444
NONINTEREST EXPENSE
Salaries and employee benefits 12,144 11,200 23,894 22,013
Net occupancy expense 2,273 2,041 4,821 4,658
Furniture and equipment 1,629 1,660 3,285 3,353
Stationery, supplies and postage 377 334 742 688
Marketing expense 416 476 656 862
FDIC insurance expense 531 511 1,049 1,012
Legal expense 325 219 441 492
Other real estate owned and other repossessed assets expense 27 100 19 115
Core deposit intangible amortization 107 119 218 242
Other expenses 3,366 2,870 6,112 5,837
TOTAL NONINTEREST EXPENSE 21,195 19,530 41,237 39,272
INCOME BEFORE PROVISION FOR INCOME TAXES 11,692 11,667 24,036 22,354
Provision for income taxes 3,830 3,886 7,844 7,410
NET INCOME $7,862 $7,781 $16,192 $14,944
EARNINGS PER COMMON SHARE
Basic $0.21 $0.20 $0.42 $0.39
Diluted $0.21 $0.20 $0.42 $0.39
DIVIDENDS PER COMMON SHARE $0.085 $0.071 $0.160 $0.142
Lakeland Bancorp, Inc.
Consolidated Balance Sheets
June 30, December 31,
(Dollars in thousands) 2015 2014
(Unaudited)
ASSETS
Cash and due from banks $118,207 $102,549
Federal funds sold and interest bearing deposits due from banks 19,359 6,767
Total cash and cash equivalents 137,566 109,316
Investment securities available for sale, at fair value 461,686 457,449
Investment securities held to maturity; fair value of $123,585 in 2015 and $109,030 in 2014 123,133 107,976
Federal Home Loan Bank and other membership stocks, at cost 12,779 9,846
Loans held for sale 3,348 592
Loans:
Commercial, secured by real estate 1,695,276 1,593,781
Commercial, industrial and other 262,617 238,252
Leases 53,798 54,749
Residential mortgages 414,339 431,190
Consumer and home equity 330,664 337,642
Total loans 2,756,694 2,655,614
Net deferred costs (2,177) (1,788)
Allowance for loan and lease losses (30,174) (30,684)
Net loans 2,724,343 2,623,142
Premises and equipment, net 35,524 35,675
Accrued interest receivable 8,911 8,896
Goodwill 109,974 109,974
Other identifiable intangible assets 1,742 1,960
Bank owned life insurance 61,869 57,476
Other assets 18,252 16,023
TOTAL ASSETS $3,699,127 $3,538,325
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits:
Noninterest bearing $714,227 $646,052
Savings and interest bearing transaction accounts 1,822,295 1,864,805
Time deposits under $100,000 165,105 165,625
Time deposits $100,000 and over 141,326 114,337
Total deposits 2,842,953 2,790,819
Federal funds purchased and securities sold under agreements to repurchase 146,249 108,935
Other borrowings 262,728 202,498
Subordinated debentures 41,238 41,238
Other liabilities 15,099 15,397
TOTAL LIABILITIES 3,308,267 3,158,887
STOCKHOLDERS' EQUITY:
Common stock, no par value; authorized 70,000,000 shares; issued 37,903,282 shares at June 30, 2015 and 37,910,840 shares at December 31, 2014 385,565 384,731
Retained Earnings (Accumulated Deficit) 3,281 (6,816)
Accumulated other comprehensive gain 2,014 1,523
TOTAL STOCKHOLDERS' EQUITY 390,860 379,438
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $3,699,127 $3,538,325
Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
For the Quarter Ended
Jun 30, Mar 31, Dec 31, Sept 30, Jun 30,
(Dollars in thousands, except per share data) 2015 2015 2014 2014 2014
INCOME STATEMENT
Net Interest Income $ 28,669 $ 28,518 $ 28,850 $ 28,452 $ 28,419
Provision for Loan and Lease Losses (740) (870) (1,589) (1,194) (1,593)
Other Noninterest Income 4,494 4,473 4,274 4,666 4,219
Gain on Sale of Loans 464 265 195 143 152
Other Noninterest Expense (21,195) (20,042) (20,178) (19,685) (19,530)
Pretax Income 11,692 12,344 11,552 12,382 11,667
Tax Expense (3,830) (4,014) (3,613) (4,136) (3,886)
Net Income $ 7,862 $ 8,330 $ 7,939 $ 8,246 $ 7,781
Basic Earnings Per Common Share $ 0.21 $ 0.22 $ 0.21 $ 0.22 $ 0.20
Diluted Earnings Per Common Share $ 0.21 $ 0.22 $ 0.21 $ 0.22 $ 0.20
Dividends Per Common Share $ 0.085 $ 0.075 $ 0.075 $ 0.075 $ 0.071
Dividends Paid $ 3,243 $ 2,852 $ 2,853 $ 2,853 $ 2,717
Weighted Average Shares - Basic 37,854 37,800 37,765 37,738 37,740
Weighted Average Shares - Diluted 37,988 37,937 37,920 37,862 37,850
SELECTED OPERATING RATIOS
Annualized Return on Average Assets 0.88% 0.96% 0.90% 0.95% 0.93%
Annualized Return on Average Common Equity 8.08% 8.81% 8.35% 8.83% 8.58%
Annualized Return on Tangible Common Equity (1) 11.33% 12.43% 11.87% 12.66% 12.41%
Annualized Net Interest Margin 3.46% 3.56% 3.58% 3.58% 3.69%
Efficiency Ratio (1) 62.09% 59.17% 59.87% 57.97% 58.73%
Common Stockholders' Equity to Total Assets 10.57% 10.70% 10.72% 10.65% 10.57%
Tangible Common Equity to Tangible Assets (1) 7.78% 7.86% 7.81% 7.69% 7.59%
Tier 1 Risk-Based Ratio (2) 11.05% 11.12% 11.76% 11.75% 11.54%
Total Risk-Based Ratio (2) 12.15% 12.25% 12.98% 12.97% 12.75%
Tier 1 Leverage Ratio (2) 9.12% 9.17% 9.08% 9.02% 9.06%
Common Equity Tier 1 Capital Ratio (2) 9.66% 9.70% N/A N/A N/A
Book Value per Common Share $ 10.31 $ 10.24 $ 10.01 $ 9.83 $ 9.70
Tangible Book Value per Common Share (1) $ 7.36 $ 7.29 $ 7.06 $ 6.87 $ 6.74
(1) See Supplemental Information - Non-GAAP financial measures
(2) Beginning March 31, 2015, these ratios were calculated according to the Basel III capital rules that took effect on January 1, 2015.
Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
For the Quarter Ended
Jun 30, Mar 31, Dec 31, Sept 30, Jun 30,
(Dollars in thousands) 2015 2015 2014 2014 2014
SELECTED BALANCE SHEET DATA AT PERIOD-END
Loans and Leases $ 2,756,694 $ 2,691,705 $ 2,655,614 $ 2,613,404 $ 2,610,198
Allowance for Loan and Lease Losses (30,174) (30,505) (30,684) (30,047) (29,866)
Investment Securities 597,598 599,986 575,271 558,032 530,934
Total Assets 3,699,127 3,627,764 3,538,325 3,498,905 3,479,548
Total Deposits 2,842,953 2,842,565 2,790,819 2,776,931 2,726,850
Short-Term Borrowings 146,249 117,351 108,935 112,796 156,511
Other Borrowings 303,966 263,966 243,736 220,938 215,238
Stockholders' Equity 390,860 388,084 379,438 372,539 367,833
Loans and Leases
Commercial Real Estate $ 1,695,276 $ 1,636,128 $ 1,593,781 $ 1,557,168 $ 1,551,071
Commercial, Industrial and Other 262,617 244,162 238,252 231,961 237,071
Leases 53,798 54,271 54,749 52,285 50,191
Residential Mortgages 414,339 426,339 431,190 431,477 433,634
Consumer and Home Equity 330,664 330,805 337,642 340,513 338,231
Total Loans $ 2,756,694 $ 2,691,705 $ 2,655,614 $ 2,613,404 $ 2,610,198
Deposits
Noninterest Bearing $ 714,227 $ 672,264 $ 646,052 $ 674,933 $ 649,186
Savings and Interest Bearing Transaction Accounts 1,822,295 1,878,598 1,864,805 1,820,657 1,797,358
Time Deposits Under $100,000 165,105 164,946 165,625 168,391 169,655
Time Deposits $100,000 and Over 141,326 126,757 114,337 112,950 110,651
Total Deposits $ 2,842,953 $ 2,842,565 $ 2,790,819 $ 2,776,931 $ 2,726,850
SELECTED AVERAGE BALANCE SHEET DATA
Loans and Leases, net $ 2,720,801 $ 2,660,512 $ 2,622,602 $ 2,608,687 $ 2,552,010
Investment Securities 600,547 582,912 566,039 529,379 537,974
Interest Earning Assets 3,345,380 3,271,110 3,227,390 3,183,361 3,114,539
Total Assets 3,600,416 3,526,898 3,483,162 3,443,946 3,360,289
Noninterest Bearing Demand Deposits 688,854 660,548 679,796 671,049 640,080
Savings Deposits 402,142 395,153 384,064 382,642 387,179
Interest Bearing Transaction Accounts 1,480,866 1,495,270 1,487,492 1,457,680 1,433,382
Time Deposits 295,996 280,837 277,930 280,200 284,475
Total Deposits 2,867,858 2,831,808 2,829,282 2,791,571 2,745,116
Short-Term Borrowings 59,249 47,827 38,653 49,725 78,475
Other Borrowings 267,610 247,316 221,848 217,049 158,432
Total Interest Bearing Liabilities 2,505,863 2,466,403 2,409,988 2,387,295 2,341,944
Stockholders' Equity 390,151 383,587 377,379 370,448 363,802
Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
For the Quarter Ended
Jun 30, Mar 31, Dec 31, Sept 30, Jun 30,
(Dollars in thousands) 2015 2015 2014 2014 2014
AVERAGE ANNUALIZED YIELDS (Taxable Equivalent Basis)
Assets:
Loans and leases 4.16% 4.25% 4.26% 4.25% 4.33%
Taxable investment securities and other 2.02% 2.08% 2.09% 2.08% 2.18%
Tax-exempt securities 3.58% 3.67% 3.75% 3.79% 3.74%
Federal funds sold and interest bearing cash accounts 0.18% 0.17% 0.26% 0.21% 0.15%
Total interest earning assets 3.78% 3.86% 3.87% 3.87% 3.97%
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 0.59% 0.56% 0.54% 0.49% 0.51%
Borrowings 1.58% 1.61% 1.65% 1.63% 1.50%
Total interest bearing liabilities 0.42% 0.40% 0.39% 0.39% 0.36%
Net interest spread (taxable equivalent basis) 3.36% 3.46% 3.48% 3.48% 3.60%
Annualized net interest margin (taxable equivalent basis) 3.46% 3.56% 3.58% 3.58% 3.69%
Annualized cost of deposits 0.19% 0.18% 0.18% 0.18% 0.18%
ASSET QUALITY DATA
Allowance for Loan and Lease Losses
Balance at beginning of period $ 30,505 $ 30,684 $ 30,047 $ 29,866 $ 29,520
Provision for loan losses 740 870 1,589 1,194 1,593
Net charge-offs (1,071) (1,049) (952) (1,013) (1,247)
Balance at end of period $ 30,174 $ 30,505 $ 30,684 $ 30,047 $ 29,866
Net Loan Charge-offs (Recoveries)
Commercial real estate $ 476 $ 426 $ (287) $ 28 $ (152)
Commercial, industrial and other 21 (31) 99 (71) 511
Leases 102 407 185 229 126
Home equity and consumer 386 231 860 638 411
Real estate - mortgage 86 16 95 189 351
Net charge-offs $ 1,071 $ 1,049 $ 952 $ 1,013 $ 1,247
Non-performing Assets
Commercial real estate $ 5,307 $ 6,994 $ 7,612 $ 8,549 $ 9,647
Commercial, industrial and other 1,354 285 308 599 700
Leases 79 111 88 141 61
Home equity and consumer 3,143 3,472 3,415 2,114 2,251
Real estate - mortgage 9,098 9,552 9,246 7,221 6,730
Total non-accruing loans 18,981 20,414 20,669 18,624 19,389
Property acquired through foreclosure or repossession 1,078 826 1,026 982 850
Total non-performing assets $ 20,059 $ 21,240 $ 21,695 $ 19,606 $ 20,239
Loans past due 90 days or more and still accruing $ 102 $ 134 $ 66 $ 429 $ 286
Loans restructured and still accruing $ 12,419 $ 11,538 $ 10,579 $ 7,957 $ 6,818
Ratio of allowance for loan and lease losses to total loans 1.09% 1.13% 1.16% 1.15% 1.14%
Non-performing loans to total loans 0.69% 0.76% 0.78% 0.71% 0.74%
Non-performing assets to total assets 0.54% 0.59% 0.61% 0.56% 0.58%
Annualized net charge-offs to average loans 0.16% 0.16% 0.15% 0.16% 0.20%
Lakeland Bancorp, Inc.
Supplemental Information - Non-GAAP Financial Measures
(Unaudited)
At or for the Quarter Ended
Jun 30, Mar 31, Dec 31, Sept 30, Jun 30,
(Dollars in thousands, except per share amounts) 2015 2015 2014 2014 2014
Calculation of tangible book value per common share
Total common stockholders' equity at end of period - GAAP $ 390,860 $ 388,084 $ 379,438 $ 372,539 $ 367,833
Less:
Goodwill 109,974 109,974 109,974 109,974 109,974
Other identifiable intangible assets, net 1,742 1,849 1,960 2,071 2,182
Total tangible common stockholders' equity at end of period - Non-GAAP $ 279,144 $ 276,261 $ 267,504 $ 260,494 $ 255,677
Shares outstanding at end of period 37,903 37,900 37,911 37,910 37,914
Book value per share - GAAP $ 10.31 $ 10.24 $ 10.01 $ 9.83 $ 9.70
Tangible book value per share - Non-GAAP $ 7.36 $ 7.29 $ 7.06 $ 6.87 $ 6.74
Calculation of tangible common equity to tangible assets
Total tangible common stockholders' equity at end of period - Non-GAAP $ 279,144 $ 276,261 $ 267,504 $ 260,494 $ 255,677
Total assets at end of period $ 3,699,127 $ 3,627,764 $ 3,538,325 $ 3,498,905 $ 3,479,548
Less:
Goodwill 109,974 109,974 109,974 109,974 109,974
Other identifiable intangible assets, net 1,742 1,849 1,960 2,071 2,182
Total tangible assets at end of period - Non-GAAP $ 3,587,411 $ 3,515,941 $ 3,426,391 $ 3,386,860 $ 3,367,392
Common equity to assets - GAAP 10.57% 10.70% 10.72% 10.65% 10.57%
Tangible common equity to tangible assets - Non-GAAP 7.78% 7.86% 7.81% 7.69% 7.59%
Calculation of return on average tangible common equity
Net income - GAAP $ 7,862 $ 8,330 $ 7,939 $ 8,246 $ 7,781
Total average common stockholders' equity $ 390,151 $ 383,587 $ 377,379 $ 370,448 $ 363,802
Less:
Average goodwill 109,974 109,974 109,974 109,974 109,974
Average other identifiable intangible assets, net 1,807 1,919 2,028 2,141 2,256
Total average tangible common stockholders' equity - Non-GAAP $ 278,370 $ 271,694 $ 265,377 $ 258,333 $ 251,572
Return on average common stockholders' equity - GAAP 8.08% 8.81% 8.35% 8.83% 8.58%
Return on average tangible common stockholders' equity - Non-GAAP 11.33% 12.43% 11.87% 12.66% 12.41%
Calculation of efficiency ratio
Total noninterest expense $ 21,195 $ 20,042 $ 20,178 $ 19,685 $ 19,530
Amortization of core deposit intangibles (107) (111) (111) (111) (119)
Other real estate owned and other repossessed asset (expense) income (27) 8 (69) (50) (100)
Provision for unfunded lending commitments, net (60) (130) 89 (106) 93
Noninterest expense, as adjusted $ 21,001 $ 19,809 $ 20,087 $ 19,418 $ 19,404
Net interest income $ 28,669 $ 28,518 $ 28,850 $ 28,452 $ 28,419
Total noninterest income 4,958 4,738 4,469 4,809 4,371
Total revenue 33,627 33,256 33,319 33,261 32,790
Tax-equivalent adjustment on municipal securities 214 221 231 235 251
Gains on sales investment securities (17) -- -- -- --
Total revenue, as adjusted $ 33,824 $ 33,477 $ 33,550 $ 33,496 $ 33,041
Efficiency ratio - Non-GAAP 62.09% 59.17% 59.87% 57.97% 58.73%
Lakeland Bancorp, Inc.
Supplemental Information - Non-GAAP Financial Measures
(Unaudited)
For the Six Months Ended,
June 30, June 30,
(Dollars in thousands, except per share amounts) 2015 2014
Calculation of return on average tangible common equity
Net income - GAAP $ 16,192 $ 14,944
Total average common stockholders' equity $ 386,887 $ 360,395
Less:
Average goodwill 109,974 109,974
Average other identifiable intangible assets, net 1,863 2,317
Total average tangible common stockholders' equity - Non-GAAP $ 275,050 $ 248,104
Return on average common stockholders' equity - GAAP 8.44% 8.36%
Return on average tangible common stockholders' equity - Non-GAAP 11.87% 12.15%
Calculation of efficiency ratio
Total noninterest expense $ 41,237 $ 39,272
Amortization of core deposit intangibles (218) (242)
Other real estate owned and other repossessed asset expense (19) (115)
Provision for unfunded lending commitments (190) 82
Noninterest expense, as adjusted $ 40,810 $ 38,997
Net interest income $ 57,187 $ 56,264
Noninterest income 9,696 8,444
Total revenue 66,883 64,708
Tax-equivalent adjustment on municipal securities 435 506
Gains on investment securities (17) (2)
Total revenue, as adjusted $ 67,301 $ 65,212
Efficiency ratio - Non-GAAP 60.64% 59.80%

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