Lakeland Bancorp Completes Sixth Consecutive Year of Record Earnings


OAK RIDGE, N.J., Jan. 26, 2018 (GLOBE NEWSWIRE) -- Lakeland Bancorp, Inc. (NASDAQ:LBAI) (the “Company”), the parent company of Lakeland Bank (“Lakeland”), reported net income and diluted earnings per share (“EPS”) of $13.2 million and $0.27 for the three months ended December 31, 2017, compared to $12.0 million and $0.26 for the three months ended December 31, 2016.  For the fourth quarter of 2017, return on average assets was 0.97%, return on average common equity was 8.99%, and return on average tangible common equity was 11.82%.  Excluding the impact of the $0.6 million one-time charge taken in the fourth quarter of 2017 for the implementation of the Tax Cuts and Jobs Act of 2017, net income would have been $13.8 million and EPS would have been $0.29. 

In 2017, the Company reported net income of $52.6 million, compared to $41.5 million in 2016.  The Company reported EPS of $1.09 in 2017 compared to $0.95 in 2016.  In 2017, return on average assets was 1.00%, return on average common equity was 9.25%, and return on average tangible common equity was 12.24%.  Excluding the impact of the $0.6 million one-time charge taken in 2017 for the implementation of the Tax Cuts and Jobs Act of 2017, net income would have been $53.2 million and EPS would have been $1.11 in 2017.  Excluding the impact of merger costs in 2016, net income would have been $44.3 million and EPS would have been $1.02 in 2016. 

Thomas Shara, Lakeland Bancorp’s President and CEO, commented on the Company’s results, “We are pleased to announce 2017’s financial results as another year of record earnings. We have continued to focus on growing shareholder value with net income growth of 20%, earnings per share growth of 9% and a return on average assets of 1% in 2017.  Our results are highlighted by our continued improvement in asset quality, reduction in our efficiency ratio to 53% and a consistent loan-to-deposit ratio of 95%.”

Regarding the recently passed changes to the tax laws, Mr. Shara continued, “The decrease in the corporate tax rate allows Lakeland to further invest in our future.  We intend to utilize approximately 20% of the tax savings by accelerating and expanding our investments in personnel and technology that will continue to enhance the delivery of banking services and products to our customers.  In addition, we plan to further increase our financial support of non-profits in the communities we serve.”

The following represents performance highlights and significant events related to the fourth quarter of 2017:

  • Return on average assets of 0.97% grew from 0.95% in the fourth quarter of 2016.
  • The efficiency ratio of 53.06% improved from 56.35% in the fourth quarter of 2016.
  • Net interest margin of 3.37% decreased 2 basis points from the prior quarter and increased 10 basis points from the fourth quarter of 2016.
  • Tangible book value per share increased 8% to $9.38 at December 31, 2017 from $8.70 at December 31, 2016.
  • Total non-performing assets decreased to 0.27% of total assets at December 31, 2017 from 0.42% of total assets at December 31, 2016.
  • On January 23, 2018, the Company declared a cash dividend of $0.10 per share to be paid on February 15, 2018 to stockholders of record as of February 5, 2018.

Earnings
Net income for the fourth quarter of 2017 was $13.2 million, a 10% increase compared to $12.0 million in 2016.  EPS for the fourth quarter of 2017 was $0.27, a 4% increase compared to $0.26 in 2016.  Excluding the $0.6 million one-time tax charge during the quarter, quarterly net income increased 15% and EPS increased 12%. 

Net income for 2017 was $52.6 million, a 27% increase compared to $41.5 million in 2016.  EPS for 2017 was $1.09, a 15% increase compared to $0.95 in 2016.  Excluding merger related expenses incurred in 2016 and the $0.6 million one-time tax charge in 2017, net income increased 20% and EPS increased 9%.

Net Interest Income
Net interest income increased to $42.4 million for the fourth quarter of 2017, compared to $38.2 million for the fourth quarter of 2016 due primarily to the organic growth of earning assets.

Net interest income for 2017 was $165.2 million, as compared to $145.6 million in 2016.  Total interest income increased $26.9 million primarily due to higher interest earning assets from organic growth and the merger with Harmony Bank in July 2016 (the “merger”).  Total interest expense increased $7.3 million primarily due to the deposits acquired in the merger, continued organic deposit growth coupled with higher CD rates and the impact of the additional interest expense from the subordinated debt offering in September 2016.

Noninterest Income
Noninterest income totaled $5.8 million for the fourth quarter of 2017 compared to $5.2 million for the fourth quarter of 2016.  This change was primarily due to increases in service charges on deposit accounts and income on additional bank owned life insurance policies.

In 2017, noninterest income totaled $25.4 million compared to $21.3 million in 2016.  This increase was primarily due to $2.5 million in gains on sales of investment securities in the first quarter of 2017, $0.9 million in gains on sales of three former branches during 2017, a $0.4 million increase on the sales of other real estate owned in 2017 and a $0.3 million gain on the payoff of an acquired loan in 2017, partially offset by a $0.3 million decline in gains on sales of loans during 2017.

Noninterest Expense 
Noninterest expense totaled $25.8 million for the fourth quarter of 2017 compared to $24.8 million for the fourth quarter of 2016.  The increase in noninterest expense was primarily due to additional salary and employee benefit expense from additional personnel and bonus accruals, partially offset by a decrease in other expenses. 

In 2017, noninterest expense totaled $104.5 million, compared to $99.9 million in 2016.  During 2017, the Company incurred long-term debt prepayment penalties of $2.8 million, and during 2016, the Company incurred $4.1 million in merger related expenses.  Excluding these items, the resulting $5.9 million net increase in noninterest expense was primarily due to $5.1 million in increased salary and employee benefit expense related to additional headcount from the merger and new hiring as well as year-over-year salary increases and additional bonus accruals.  This increase in salary and employee benefit expense was partially offset by a decrease in FDIC expense of $0.7 million.

Financial Condition
In 2017, total assets increased $312.5 million, or 6%, to $5.41 billion as total loans and leases grew $282.8 million, or 7%, to $4.16 billion, investment in bank owned life insurance grew $35.1 million, or 48%, to $107.5 million and investment securities increased $29.0 million, or 4%, to $798.4 million.  On the funding side, total deposits grew $275.9 million, or 7%, to $4.37 billion.  As of December 31, 2017, total loans and leases to total deposits was 95%. 

Asset Quality
At December 31, 2017, non-performing assets totaled $14.5 million (0.27% of total assets) compared to $21.5 million (0.42% of total assets) at December 31, 2016.  Non-accrual loans and leases as a percent of total loans and leases decreased to 0.33% at December 31, 2017 from 0.53% at December 31, 2016.  The allowance for loan and lease losses increased to $35.5 million at December 31, 2017 (0.85% of total loans and leases) compared to $31.2 million at December 31, 2016 (0.81% of total loans and leases).  In 2017, the Company had net charge-offs of $1.9 million (0.05% of average loans and leases) compared to $3.9 million (0.11% of average loans and leases) in 2016.  The 2017 provision for loan and lease losses was $6.1 million compared to $4.2 million in 2016.

Capital
At December 31, 2017, stockholders' equity was $583.1 million compared to $550.0 million at December 31, 2016, a 6% increase.   At December 31, 2017, the book value per common share and tangible book value per common share were $12.31 and $9.38 compared to $11.65 and $8.70 at December 31, 2016.

Forward-Looking Statements
The information disclosed in this document includes various forward-looking statements (with respect to corporate objectives, trends, the expected impact from the Tax Cuts and Jobs Act of 2017, 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.  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 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, successful implementation, deployment and upgrades of new and existing technology, systems, services and products, customers’ acceptance of the Company’s products and services, and competition.  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 $5.4 billion in total assets. The Bank operates 53 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 in New York 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 December 31, Twelve Months Ended December 31, 
(Dollars in thousands, except per share amounts) 2017   2016   2017   2016  
            
INCOME STATEMENT         
Net interest income  $  42,379  $  38,179  $  165,238  $  145,649  
Provision for loan and lease losses    (1,218)    (375)    (6,090)    (4,223) 
Gains (losses) on sales of investment securities -   -     2,524     370  
Gains on sales of loans     489     525     1,836     2,123  
Other noninterest income     5,287     4,636     21,075     18,837  
Long-term debt prepayment fee  -   -     (2,828)  -  
Merger related expenses   -   -   -     (4,103) 
Other noninterest expense    (25,849)    (24,772)    (101,706)    (95,814) 
  Pretax income     21,088     18,193     80,049     62,839  
Provision for income taxes    (7,913)    (6,240)    (27,469)    (21,321) 
  Net income   $  13,175  $  11,953  $  52,580  $  41,518  
            
Basic earnings per common share $  0.28  $  0.26  $  1.10  $  0.96  
Diluted earnings per common share $  0.27  $  0.26  $  1.09  $  0.95  
Dividends per common share $  0.10  $  0.095  $  0.395  $  0.37  
Weighted average shares - basic    47,466     45,002     47,438     42,912  
Weighted average shares - diluted    47,719     45,257     47,674     43,114  
            
SELECTED OPERATING RATIOS         
Annualized return on average assets  0.97%  0.95%  1.00%  0.90% 
Annualized return on average common equity 8.99%  9.31%  9.25%  8.75% 
Annualized return on average tangible common equity (1) 11.82%  12.83%  12.24%  12.19% 
Annualized return on interest-earning assets 3.95%  3.74%  3.88%  3.82% 
Annualized cost of interest-bearing liabilities 0.75%  0.62%  0.67%  0.54% 
Annualized net interest spread  3.20%  3.12%  3.21%  3.28% 
Annualized net interest margin  3.37%  3.27%  3.38%  3.41% 
Efficiency ratio (1)   53.06%  56.35%  53.40%  56.48% 
Stockholders' equity to total assets      10.79%  10.80% 
Book value per common share     $  12.31  $  11.65  
Tangible book value per common share (1)    $  9.38  $  8.70  
Tangible common equity to tangible assets (1)     8.44%  8.30% 
            
ASSET QUALITY RATIOS     12/31/2017 12/31/2016 
Ratio of allowance for loan and lease losses to total loans and leases    0.85%  0.81% 
Non-performing loans and leases to total loans and leases     0.33%  0.53% 
Non-performing assets to total assets       0.27%  0.42% 
Annualized net charge-offs to average loans and leases     0.05%  0.11% 
            
SELECTED BALANCE SHEET DATA AT PERIOD-END   12/31/2017 12/31/2016 
Loans and leases      $  4,156,680  $  3,873,895  
Allowance for loan and lease losses        35,455     31,245  
Investment securities         798,396     769,417  
Total assets          5,405,639     5,093,131  
Total deposits         4,368,748     4,092,835  
Short-term borrowings         124,936     56,354  
Other borrowings         296,913     365,650  
Stockholders' equity         583,122     550,044  
            
SELECTED AVERAGE BALANCE SHEET DATAFor the Three Months Ended For the Twelve Months Ended 
    12/31/2017 12/31/2016 12/31/2017 12/31/2016 
Loans and leases  $  4,116,920  $  3,806,588  $  4,024,257  $  3,562,882  
Investment securities     798,687     683,986     810,434     609,336  
Interest-earning assets     5,014,333     4,680,156     4,926,986     4,295,384  
Total assets     5,372,248     5,015,439     5,267,561     4,619,816  
Noninterest-bearing demand deposits    988,451     951,418     959,298     852,629  
Savings deposits     478,685     490,556     486,821     485,004  
Interest-bearing transaction accounts    2,222,221     2,072,154     2,241,259     1,880,391  
Time deposits     730,590     539,870     623,257     506,487  
Total deposits     4,419,947     4,053,998     4,310,635     3,724,511  
Short-term borrowings     43,130     27,538     41,695     36,242  
Other borrowings     295,818     392,789     316,283     356,907  
Total interest-bearing liabilities    3,770,444     3,522,907     3,709,315     3,265,031  
Stockholders' equity     581,254     510,562     568,680     474,540  
            
(1) See Supplemental Information - Non-GAAP Financial Measures       

 

            
Lakeland Bancorp, Inc.  
Consolidated Statements of Operations 
(Unaudited) 
            
      Three Months Ended December 31, Twelve Months Ended December 31, 
(Dollars in thousands, except per share amounts)     2017 2016  2017 2016 
            
INTEREST INCOME          
Loans, leases and fees    $  44,889$  40,090 $  172,342$  149,777 
Federal funds sold and interest-bearing deposits with banks   262  228   880  569 
Taxable investment securities and other    3,850  2,878   14,987  11,163 
Tax exempt investment securities     460  487   1,995  1,787 
 TOTAL INTEREST INCOME     49,461  43,683   190,204  163,296 
INTEREST EXPENSE          
Deposits       5,039  3,017   16,600  10,512 
Federal funds purchased and securities sold under agreements to repurchase   38  3   198  69 
Other borrowings      2,005  2,484   8,168  7,066 
 TOTAL INTEREST EXPENSE    7,082  5,504   24,966  17,647 
NET INTEREST INCOME     42,379  38,179   165,238  145,649 
Provision for loan and lease losses       1,218   375    6,090   4,223 
 NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES  41,161  37,804   159,148  141,426 
NONINTEREST INCOME         
Service charges on deposit accounts     2,814  2,577   10,740  10,157 
Commissions and fees      1,309  1,089   4,858  4,349 
Income on bank owned life insurance     804  437   2,354  2,562 
Gains on sales of loans      489  525   1,836  2,123 
Gains on sales of investment securities      -    -    2,524  370 
Other income       360  533   3,123  1,769 
 TOTAL NONINTEREST INCOME      5,776  5,161   25,435  21,330 
NONINTEREST EXPENSE         
Salaries and employee benefit expense     15,553  14,305   61,166  56,107 
Net occupancy expense      2,573  2,534   10,243  9,935 
Furniture and equipment expense     2,103  2,113   8,269  8,017 
FDIC insurance expense      404  262   1,577  2,248 
Stationary, supplies and postage expense    378  456   1,797  1,727 
Marketing expense      324  549   1,675  1,672 
Data processing expense      497  394   1,993  1,891 
Telecommunications expense     451  342   1,607  1,631 
ATM and debit card expense     547  433   2,051  1,582 
Core deposit intangible amortization      165   202    654   734 
Other real estate owned and other repossessed assets expense   73  83   181  116 
Long-term debt prepayment fee    - -    2,828 - 
Merger related expenses     - -  -   4,103 
Other expenses       2,781  3,099   10,493  10,154 
 TOTAL NONINTEREST EXPENSE   25,849  24,772   104,534  99,917 
INCOME BEFORE PROVISION FOR INCOME TAXES       21,088  18,193   80,049  62,839 
Provision for income taxes       7,913  6,240   27,469  21,321 
NET INCOME     $  13,175$  11,953 $  52,580$  41,518 
EARNINGS PER COMMON SHARE        
Basic     $  0.28$  0.26 $  1.10$  0.96 
Diluted     $  0.27$  0.26 $  1.09$  0.95 
DIVIDENDS PER COMMON SHARE     $  0.10$  0.095 $  0.395$  0.37 
            
            

 

Lakeland Bancorp, Inc. 
Consolidated Balance Sheets 
         
     December 31, December 31, 
(Dollars in thousands)    2017   2016  
     (Unaudited)   
ASSETS        
Cash    $  114,138  $  169,149  
Interest-bearing deposits due from banks     28,795   6,652  
     Total cash and cash equivalents      142,933    175,801  
         
Investment securities available for sale, at fair value   646,135    606,704  
Investment securities held to maturity; fair value of $138,688 at December 31, 2017    
  and $146,990 at December 31, 2016    139,685    147,614  
Federal Home Loan Bank and other membership stocks, at cost  12,576    15,099  
Loans held for sale      456     1,742  
Loans and leases:       
  Commercial, real estate     3,096,092    2,767,710  
  Commercial, industrial and other    340,400    350,228  
  Leases      75,039    67,016  
  Residential mortgages     322,880    349,581  
  Consumer and home equity    322,269    339,360  
        Total loans and leases    4,156,680    3,873,895  
  Net deferred costs (fees)    (3,960)    (3,297) 
  Allowance for loan and lease losses   (35,455)  (31,245) 
        Net loans and leases      4,117,265    3,839,353  
Premises and equipment, net     50,313    52,236  
Accrued interest receivable    14,416    12,557  
Goodwill       136,433    135,747  
Other identifiable intangible assets    2,362     3,344  
Bank owned life insurance     107,489    72,384  
Other assets       35,576    30,550  
     TOTAL ASSETS    $  5,405,639  $  5,093,131  
         
LIABILITIES AND STOCKHOLDERS' EQUITY     
LIABILITIES       
Deposits:        
  Noninterest-bearing   $  967,335  $  927,270  
  Savings and interest-bearing transaction accounts   2,663,985    2,620,657  
  Time deposits $250 thousand and under      556,863    404,680  
  Time deposits over $250 thousand      180,565    140,228  
     Total deposits      4,368,748    4,092,835  
Federal funds purchased and securities sold under agreements to repurchase  124,936    56,354  
Other borrowings     192,011    260,866  
Subordinated debentures     104,902     104,784  
Other liabilities        31,920    28,248  
     TOTAL LIABILITIES     4,822,517    4,543,087  
         
STOCKHOLDERS' EQUITY      
Common stock, no par value; authorized 70,000,000 shares;     
  issued 47,353,864 shares at December 31, 2017        
  and 47,222,914 shares at December 31, 2016      512,734    510,861  
Retained earnings     72,737    38,590  
Accumulated other comprehensive gain (loss)    (2,349)   593  
     TOTAL STOCKHOLDERS' EQUITY      583,122    550,044  
     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY    $  5,405,639  $  5,093,131  
         

 

Lakeland Bancorp, Inc. 
Financial Highlights 
(Unaudited) 
         
   For the Quarter Ended 
   Dec 31,Sept 30,June 30,Mar 31,Dec 31, 
(Dollars in thousands, except per share data)  2017  2017  2017  2017  2016  
         
INCOME STATEMENT       
Net interest income $  42,379 $  42,115 $  41,421 $  39,323 $  38,179  
Provision for loan and lease losses    (1,218)   (1,827)   (1,827)   (1,218)   (375) 
Gains (losses) on sales of investment securities  -  -    (15)   2,539  -  
Gains on sales of loans    489    478    471    398    525  
Other noninterest income    5,287    4,976    5,655    5,157    4,636  
Long-term debt prepayment fee  -  -  -    (2,828) -  
Other noninterest expense    (25,849)   (24,849)   (25,366)   (25,642)   (24,772) 
  Pretax income    21,088    20,893    20,339    17,729    18,193  
Provision for income taxes    (7,913)   (7,170)   (6,969)   (5,417)   (6,240) 
  Net income $  13,175 $  13,723 $  13,370 $  12,312 $  11,953  
         
Basic earnings per common share $  0.28 $  0.29 $  0.28 $  0.26 $  0.26  
Diluted earnings per common share $  0.27 $  0.29 $  0.28 $  0.26 $  0.26  
Dividends per common share $  0.10 $  0.10 $  0.10 $  0.095 $  0.095  
Dividends paid $  4,776 $  4,775 $  4,775 $  4,527 $  4,265  
Weighted average shares - basic    47,466    47,466    47,465    47,354    45,002  
Weighted average shares - diluted    47,719    47,692    47,674    47,623    45,257  
         
SELECTED OPERATING RATIOS       
Annualized return on average assets   0.97% 1.03% 1.02% 0.97% 0.95% 
Annualized return on average common equity   8.99% 9.48% 9.49% 9.02% 9.31% 
Annualized return on average tangible common equity (1) 11.82% 12.51% 12.58% 12.04% 12.83% 
Annualized net interest margin  3.37% 3.39% 3.41% 3.33% 3.27% 
Efficiency ratio (1)  53.06% 51.72% 52.64% 56.36% 56.35% 
Common stockholders' equity to total assets  10.79% 10.69% 10.58% 10.63% 10.80% 
Tangible common equity to tangible assets (1)  8.44% 8.33% 8.20% 8.20% 8.30% 
Tier 1 risk-based ratio  10.87% 10.82% 10.77% 10.73% 10.85% 
Total risk-based ratio  13.40% 13.37% 13.32% 13.29% 13.48% 
Tier 1 leverage ratio  9.12% 9.07% 8.99% 8.97% 9.07% 
Common equity tier 1 capital ratio  10.18% 10.13% 10.06% 10.01% 10.11% 
Book value per common share $  12.31 $  12.19 $  11.99 $  11.78 $  11.65  
Tangible book value per common share (1) $  9.38 $  9.25 $  9.05 $  8.84 $  8.70  
         
(1) See Supplemental Information - Non-GAAP Financial Measures     
         
       

 

          
Lakeland Bancorp, Inc. 
Financial Highlights 
(Unaudited) 
          
    For the Quarter Ended 
    Dec 31,Sept 30,June 30,Mar 31,Dec 31, 
(Dollars in thousands)   2017  2017  2017  2017  2016  
        
SELECTED BALANCE SHEET DATA AT PERIOD-END     
Loans and leases  $  4,156,680 $  4,092,893 $  4,054,276 $  3,974,718 $  3,873,895  
Allowance for loan and lease losses    35,455    33,925    32,823    31,590    31,245  
Investment securities     798,396    795,096    830,531    847,833    769,417  
Total assets      5,405,639    5,399,481    5,362,187    5,247,815    5,093,131  
Total deposits     4,368,748    4,356,996    4,227,204    4,293,393    4,092,835  
Short-term borrowings     124,936    133,960    118,487    84,850    56,354  
Other borrowings     296,913    301,411    417,093    278,238    365,650  
Stockholders' equity     583,122    577,081    567,545    557,642    550,044  
          
LOANS AND LEASES        
Commercial, real estate  $  3,096,092 $  3,018,106 $  2,955,596 $  2,881,972 $  2,767,710  
Commercial, industrial and other    340,400    342,775    352,977    342,264    350,228  
Leases      75,039    71,698    70,295    67,488    67,016  
Residential mortgages     322,880    329,625    337,765    344,890    349,581  
Consumer and home equity     322,269    330,689    337,643    338,104    339,360  
  Total loans and leases  $  4,156,680 $  4,092,893 $  4,054,276 $  3,974,718 $  3,873,895  
          
DEPOSITS         
Noninterest-bearing  $  967,335 $  955,444 $  978,668 $  924,581 $  927,270  
Savings and interest-bearing transaction accounts   2,663,985    2,681,512    2,682,291    2,809,705    2,620,657  
Time deposits     737,428    720,040    566,245    559,107    544,908  
  Total deposits  $  4,368,748 $  4,356,996 $  4,227,204 $  4,293,393 $  4,092,835  
          
Total loans and leases to total deposits ratio 95.1% 93.9% 95.9% 92.6% 94.7% 
          
SELECTED AVERAGE BALANCE SHEET DATA      
Loans and leases  $  4,116,920 $  4,060,838 $  4,011,325 $  3,905,216 $  3,806,588  
Investment securities     798,687    815,773    837,075    790,046    683,986  
Interest-earning assets     5,014,333    4,957,856    4,907,488    4,825,855    4,680,156  
Total assets      5,372,248    5,300,191    5,241,155    5,153,893    5,015,439  
Noninterest-bearing demand deposits    988,451    971,143    954,966    921,770    951,418  
Savings deposits     478,685    484,982    492,991    490,777    490,556  
Interest-bearing transaction accounts    2,222,221    2,206,206    2,295,256    2,241,954    2,072,154  
Time deposits     730,590    645,333    559,665    555,270    539,870  
Total deposits     4,419,947    4,307,664    4,302,878    4,209,771    4,053,998  
Short-term borrowings     43,130    42,172    52,951    28,358    27,538  
Other borrowings     295,818    344,775    291,882    332,750    392,789  
Total interest-bearing liabilities    3,770,444    3,723,468    3,692,745    3,649,109    3,522,907  
Stockholders' equity     581,254    574,113    565,211    553,782    510,562  
       

 

          
Lakeland Bancorp, Inc. 
Financial Highlights 
(Unaudited) 
          
    For the Quarter Ended 
    Dec 31,Sept 30,June 30,Mar 31,Dec 31, 
(Dollars in thousands)   2017  2017  2017  2017  2016  
       
AVERAGE ANNUALIZED YIELDS (TAXABLE EQUIVALENT BASIS)     
ASSETS         
Loans and leases   4.33% 4.33% 4.27% 4.20% 4.19% 
Taxable investment securities and other  2.17% 2.09% 2.11% 2.13% 2.00% 
Tax-exempt securities   3.21% 2.98% 2.86% 2.78% 2.75% 
Federal funds sold and interest-bearing cash accounts 1.06% 1.03% 0.89% 0.85% 0.48% 
  Total interest-earning assets  3.95% 3.93% 3.88% 3.78% 3.74% 
          
LIABILITIES        
Savings accounts   0.06% 0.06% 0.06% 0.06% 0.06% 
Interest-bearing transaction accounts  0.51% 0.49% 0.44% 0.38% 0.35% 
Time deposits   1.17% 1.03% 0.86% 0.83% 0.84% 
Borrowings    2.36% 2.20% 2.30% 2.37% 2.37% 
  Total interest-bearing liabilities  0.75% 0.71% 0.63% 0.60% 0.62% 
Net interest spread (taxable equivalent basis) 3.20% 3.22% 3.25% 3.18% 3.12% 
          
Annualized net interest margin (taxable equivalent basis) 3.37% 3.39% 3.41% 3.33% 3.27% 
Annualized cost of deposits  0.45% 0.41% 0.35% 0.32% 0.30% 
          
ASSET QUALITY DATA       
ALLOWANCE FOR LOAN AND LEASE LOSSES      
Balance at beginning of period $  33,925 $  32,823 $  31,590 $  31,245 $  31,369  
Provision for loan and lease losses    1,218    1,827    1,827    1,218    375  
Charge-offs      (347)   (869)   (870)   (1,360)   (795) 
Recoveries      659    144    276    487    296  
  Balance at end of period  $  35,455 $  33,925 $  32,823 $  31,590 $  31,245  
          
NET LOAN AND LEASE CHARGE-OFFS (RECOVERIES)      
Commercial, real estate  $  132 $  285 $  (67)$  595 $  (87) 
Commercial, industrial and other    25    168    44    68    (96) 
Leases      34    80    92    39    42  
Residential mortgages     31    95    169    141    231  
Consumer and home equity    (534)   97    356    30    409  
  Net charge-offs (recoveries) $  (312)$  725 $  594 $  873 $  499  
          
NON-PERFORMING ASSETS       
Commercial, real estate  $  7,362 $  6,820 $  10,240 $  10,443 $  11,885  
Commercial, industrial and other    184    172    378    136    167  
Leases      144    110    81    179    153  
Residential mortgages     3,860    4,410    3,857    4,715    6,048  
Consumer and home equity    2,105    2,033    1,689    2,270    2,151  
  Total non-accrual loans and leases    13,655    13,545    16,245    17,743    20,404  
Property acquired through foreclosure or repossession   843    1,168    1,415    710    1,072  
  Total non-performing assets $  14,498 $  14,713 $  17,660 $  18,453 $  21,476  
          
Loans past due 90 days or more and still accruing$  200 $  9 $  20 $- $  10  
Loans restructured and still accruing $  11,462 $  11,279 $  11,697 $  11,553 $  8,802  
          
Ratio of allowance for loan and lease losses to total loans and leases    0.85% 0.83% 0.81% 0.79% 0.81% 
Total non-accrual loans and leases to total loans and leases    0.33% 0.33% 0.40% 0.45% 0.53% 
Total non-performing assets to total assets     0.27% 0.27% 0.33% 0.35% 0.42% 
Annualized net charge-offs (recoveries) to average loans and leases    -0.03% 0.07% 0.06% 0.09% 0.05% 
          

 

Lakeland Bancorp, Inc. 
Supplemental Information - Non-GAAP Financial Measures 
(Unaudited) 
          
    At or for the Quarter Ended 
    Dec 31,Sept 30,June 30,Mar 31,Dec 31, 
(Dollars in thousands, except per share amounts) 2017  2017  2017  2017  2016  
          
CALCULATION OF TANGIBLE BOOK VALUE PER COMMON SHARE      
Total common stockholders' equity at end of period - GAAP$  583,122 $  577,081 $  567,545 $  557,642 $  550,044  
Less:  Goodwill      136,433    136,433    136,433    135,747    135,747  
Less:  Other identifiable intangible assets    2,362    2,526    2,631    3,149    3,344  
  Total tangible common stockholders' equity at end of period - Non-GAAP$  444,327 $  438,122 $  428,481 $  418,746 $  410,953  
          
Shares outstanding at end of period    47,354    47,353    47,353    47,350    47,223  
          
Book value per share - GAAP  $  12.31 $  12.19 $  11.99 $  11.78 $  11.65  
          
Tangible book value per share - Non-GAAP $  9.38 $  9.25 $  9.05 $  8.84 $  8.70  
          
CALCULATION OF TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS      
Total tangible common stockholders' equity at end of period - Non-GAAP$  444,327 $  438,122 $  428,481 $  418,746 $  410,953  
          
Total assets at end of period - GAAP $  5,405,639 $  5,399,481 $  5,362,187 $  5,247,815 $  5,093,131  
Less:  Goodwill      136,433    136,433    136,433    135,747    135,747  
Less:  Other identifiable intangible assets    2,362    2,526    2,631    3,149    3,344  
  Total tangible assets at end of period - Non-GAAP$  5,266,844 $  5,260,522 $  5,223,123 $  5,108,919 $  4,954,040  
          
Common equity to assets - GAAP   10.79% 10.69% 10.58% 10.63% 10.80% 
          
Tangible common equity to tangible assets - Non-GAAP 8.44% 8.33% 8.20% 8.20% 8.30% 
          
CALCULATION OF RETURN ON AVERAGE TANGIBLE COMMON EQUITY      
Net income - GAAP   $  13,175 $  13,723 $  13,370 $  12,312 $  11,953  
          
Total average common stockholders' equity - GAAP$  581,254 $  574,113 $  565,211 $  553,782 $  510,562  
Less:  Average goodwill     136,433    136,433    135,755    135,747    136,385  
Less:  Average other identifiable intangible assets   2,450    2,606    3,069    3,276    3,459  
  Total average tangible common stockholders' equity - Non-GAAP$  442,371 $  435,074 $  426,387 $  414,759 $  370,718  
          
Return on average common stockholders' equity - GAAP 8.99% 9.48% 9.49% 9.02% 9.31% 
          
Return on average tangible common stockholders' equity - Non-GAAP 11.82% 12.51% 12.58% 12.04% 12.83% 
          
CALCULATION OF EFFICIENCY RATIO       
Total noninterest expense  $  25,849 $  24,849 $  25,366 $  28,470 $  24,772  
Amortization of core deposit intangibles    (165)   (104)   (190)   (195)   (202) 
Long-term debt prepayment fee   -  -  -    (2,828) -  
Merger related expenses   -  -  -  -  -  
  Noninterest expense, as adjusted  $  25,684 $  24,745 $  25,176 $  25,447 $  24,570  
          
Net interest income   $  42,379 $  42,115 $  41,421 $  39,323 $  38,179  
Total noninterest income     5,776    5,454    6,111    8,094    5,161  
  Total revenue      48,155    47,569    47,532    47,417    43,340  
Tax-equivalent adjustment on municipal securities   247    271    281    275    262  
(Gains) losses on sales of investment securities -  -    15    (2,539) -  
  Total revenue, as adjusted  $  48,402 $  47,840 $  47,828 $  45,153 $  43,602  
          
Efficiency ratio - Non-GAAP   53.06% 51.72% 52.64% 56.36% 56.35% 
          
    For the Quarter EndedFor the Twelve Months Ended  
    Dec 31,Dec 31,Dec 31,Dec 31,  
(Dollars in thousands, except per share amounts) 2017  2016  2017  2016   
          
RECONCILIATION OF EARNINGS PER SHARE      
Net income - GAAP   $  13,175 $  11,953 $  52,580 $  41,518   
          
NON-ROUTINE TRANSACTIONS, NET OF TAX      
One-time impact of Tax Cuts and Jobs Act of 2017   602  -    602  -   
Tax deductible merger related expenses  -  -  -    1,915   
Non-tax deductible merger related expenses  -  -  -    866   
  Net effect of non-routine transactions    602  -    602    2,781   
          
Net income available to common shareholders excluding non-routine transactions   13,777    11,953    53,182    44,299   
Less:  Earnings allocated to participating securities   (118)   (122)   (480)   (396)  
    $  13,659 $  11,831 $  52,702 $  43,903   
          
Weighted average shares - Basic     47,466    45,002    47,438    42,912   
Weighted average shares - Diluted    47,719    45,257    47,674    43,114   
          
Basic earnings per share - GAAP  $  0.28 $  0.26 $  1.10 $  0.96   
Diluted earnings per share - GAAP $  0.27 $  0.26 $  1.09 $  0.95   
          
Basic earnings per share, adjusted for non-routine transactions$  0.29 $  0.26 $  1.11 $  1.02   
Diluted earnings per share, adjusted for non-routine transactions (Core EPS)
$  0.29 $  0.26 $  1.11 $  1.02   
          

 

Lakeland Bancorp, Inc. 
Supplemental Information - Non-GAAP Financial Measures 
(Unaudited) 
    For the Twelve Months Ended, 
    Dec 31,Dec 31, 
(Dollars in thousands)    2017  2016  
       
CALCULATION OF RETURN ON AVERAGE TANGIBLE COMMON EQUITY    
Net income - GAAP   $  52,580 $  41,518  
       
Total average common stockholders' equity - GAAP  $  568,680 $  474,540  
Less:  Average goodwill      136,095    130,689  
Less:  Average other identifiable intangible assets     2,847    3,225  
  Total average tangible common stockholders' equity - Non-GAAP $  429,738 $  340,626  
       
Return on average common stockholders' equity - GAAP   9.25% 8.75% 
       
Return on average tangible common stockholders' equity - Non-GAAP  12.24% 12.19% 
       
CALCULATION OF EFFICIENCY RATIO      
Total noninterest expense   $  104,534 $  99,917  
       
Amortization of core deposit intangibles      (654)   (734) 
Long-term debt prepayment fee      (2,828) -  
Merger related expenses    -    (4,103) 
Provision for unfunded lending commitments    -    (438) 
  Noninterest expense, as adjusted   $  101,052 $  94,642  
       
Net interest income   $  165,238 $  145,649  
Noninterest income      25,435    21,330  
  Total revenue      190,673    166,979  
Tax-equivalent adjustment on municipal securities     1,074    962  
Gains on sales of investment securities      (2,524)   (370) 
  Total revenue, as adjusted   $  189,223 $  167,571  
       
Efficiency ratio - Non-GAAP    53.40% 56.48%