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Lakeland Bancorp Announces First Quarter Results and Increases Dividend
Source: Nasdaq GlobeNewswire / 28 Apr 2022 07:00:43 America/Chicago
OAK RIDGE, N.J., April 28, 2022 (GLOBE NEWSWIRE) -- Lakeland Bancorp, Inc. (NASDAQ: LBAI) (the “Company”), the parent company of Lakeland Bank (“Lakeland”), reported net income of $15.9 million and earnings per diluted share ("EPS") of $0.25 for the three months ended March 31, 2022 compared to net income of $23.2 million and EPS of $0.45 for the three months ended March 31, 2021.
For the first quarter of 2022, annualized return on average assets was 0.64%, annualized return on average common equity was 5.89% and annualized return on average tangible common equity was 7.88%.
First quarter 2022 results were impacted by provision for credit losses of $6.3 million, of which $4.6 million is related to the 1st Constitution non purchased credit deteriorated loans and $1.2 million related to investment securities, compared to a negative provision of $2.6 million in the first quarter of 2021.
The acquisition of 1st Constitution, which was completed on January 6, 2022, added $1.97 billion in total assets, $1.10 billion in total loans and $1.65 billion in total deposits. Goodwill totaled $115.6 million and core deposit intangibles were $9.0 million. The Company’s financial statements reflect the impact of the merger from the date of acquisition, which should be considered when comparing periods.
Thomas Shara, Lakeland Bancorp’s President and CEO commented, “We’re excited to have completed the 1st Constitution Bancorp acquisition which greatly expands our franchise into very attractive markets in New Jersey and welcome the 1st Constitution associates, customers and shareholders to the Lakeland family. During the quarter, we also successfully completed the conversion and integration of 1st Constitution accounts to our operating systems and are excited to provide additional banking services that their customers will benefit from as part of a larger institution.”
Regarding the Company’s financial results, Mr. Shara continued, “Aside from the 1st Constitution merger related items, our quarterly results were solid as our asset quality remained stellar, net interest margin expanded, organic loan growth continued, and pre-provision net revenue increased. Considering our financial strength, the Board authorized an annualized 7% increase in our quarterly cash dividend per share.”
Net Interest Margin and Net Interest Income
Net interest margin for the first quarter of 2022 of 3.02% decreased 17 basis points compared to the first quarter of 2021 and increased four basis points compared to the fourth quarter of 2021. The decrease in net interest margin compared to the first quarter 2021 was due primarily to an increase in lower yielding average federal funds sold and a reduction in yield on investment securities partially offset by a reduction in the cost of interest-bearing liabilities. The increase in net interest margin compared to the linked quarter was due primarily to an increase in the yield on interest-earning assets.
The yield on interest-earning assets for the first quarter of 2022 was 3.25% as compared to 3.56% for the first quarter of 2021 and 3.22% for the fourth quarter of 2021. The current quarter decrease in yield on interest-earning assets, when compared to the first quarter of 2021, was due primarily to a reduction in the yield on securities as well as an increase in average securities and federal funds sold balances. The increase in the yield on interest-earning assets compared to the linked quarter was due primarily to an increase in the yield on loans, increased loan prepayment fees and a reduction in the balance of lower yielding average federal funds sold.
The cost of interest-bearing liabilities for the first quarter of 2022 was 0.34% compared to 0.51% for the first quarter of 2021 and 0.33% for the fourth quarter of 2021. The reduction in the cost of interest-bearing liabilities compared to the first quarter of 2021 was largely driven by reductions in market interest rates as well as a change in the mix of interest-bearing liabilities. Higher cost time deposit balances have decreased while lower cost interest-bearing transaction account balances have increased.
Net interest income for the first quarter of 2022 of $70.4 million increased $13.7 million compared to the first quarter of 2021. The increase in net interest income compared to prior periods was due primarily to growth in the volume of interest-earning assets as well as a reduction in the cost of interest-bearing deposits.
Noninterest Income
For the first quarter of 2022, noninterest income increased $1.0 million to $6.8 million compared to the first quarter of 2021 primarily due to a $718,000 increase in gains on sales of loans driven by an increase in gains on sales of SBA loans. Commissions and fees increased $508,000 due primarily to an increase in commercial and mortgage loan fees. Service charges on deposit accounts increased $330,000 compared to the first three months of 2021 due primarily to increases in debit card interchange income and overdraft charges. Losses on equity securities totaled $485,000 in the first three months of 2022 compared to losses of $144,000 in the first three months of 2021. There was no swap income recorded in the first quarter of 2022 compared to $562,000 during the same period of 2021 due primarily to changes in the yield curve which decreased the demand for swap transactions.
Noninterest Expense
Noninterest expense for the first quarter of 2022 of $50.0 million increased $16.1 million compared to the first quarter of 2021. Excluding $4.6 million in pre-tax merger related expenses, noninterest expense increased $11.5 million primarily due to compensation and employee benefits which increased $7.2 million. The increase in compensation and employee benefits resulted primarily from additions to our staff from the 1st Constitution merger and normal merit increases. Premises and equipment expense increased $1.7 million compared to the first three months of 2021 due primarily to increases in occupancy expense related to the 1st Constitution branches. Data processing expense increased $415,000 due primarily to 1st Constitution data processing costs prior to core system conversion. Other operating expenses in the first quarter of 2022 increased $2.3 million compared to the same period in 2021 due primarily to increased consulting fees, appraisal fees, core deposit intangible amortization and insurance expense.
Income Tax Expense
The effective tax rate for the first quarter of 2022 was 23.9% compared to 25.8% for the first quarter of 2021. The decreased effective tax rate for the first quarter of 2022 was primarily a result of tax advantaged items increasing as a percentage of pretax income due to the decrease in pretax income.
Financial Condition
At March 31, 2022, total assets were $10.28 billion, an increase of $2.08 billion, compared to December 31, 2021, including $1.97 billion acquired from the 1st Constitution acquisition. At March 31, 2022, total loans grew $1.16 billion, including $1.10 billion from 1st Constitution, to $7.14 billion and investment securities increased $517.7 million, including $342.3 million from 1st Constitution, to $2.14 billion. On the funding side, total deposits increased $1.78 billion, including $1.65 billion from 1st Constitution, to $8.75 billion. At March 31, 2022, total loans as a percent of total deposits was 81.6%.
Asset Quality
At March 31, 2022, non-performing assets totaled $19.7 million or 0.19% of total assets compared to $17.0 million or 0.21% of total assets at December 31, 2021. Non-accrual loans as a percent of total loans was 0.28% at March 31, 2022, consistent with December 31, 2021. The allowance for credit losses totaled $67.1 million, 0.94% of total loans, at March 31, 2022, compared to $58.0 million, 0.97% of total loans, at December 31, 2021. The allowance for credit losses included a day one purchase accounting adjustment of $12.1 million for purchased credit impaired loans. In the first quarter of 2022, the Company had net charge-offs of $7.6 million or 0.44% of average loans on an annualized basis, wholly related to 1st Constitution purchased credit deteriorated loans compared to net charge-offs of $1.1 million or 0.07% for the same period in 2021. The provision for credit losses for the first quarter of 2022 was $6.3 million, of which $4.6 million is related to the 1st Constitution non purchased credit deteriorated loans and $1.2 million related to investment securities, compared to a benefit of $2.6 million in the first quarter of 2021.
Capital
At March 31, 2022, stockholders' equity was $1.09 billion compared to $827.0 million at December 31, 2021, a 32% increase, resulting primarily from the issuance of stock in connection with the 1st Constitution acquisition. Lakeland Bank remains above FDIC “well capitalized” standards, with a Tier 1 leverage ratio of 8.97% at March 31, 2022. The book value per common share and tangible book value per common share increased 11% and 3% to $16.82 and $12.45, respectively, compared to $15.18 and $12.03 at March 31, 2021 (see "Supplemental Information - Non-GAAP Financial Measures" for a reconciliation of non-GAAP financial measures, including tangible book value). At March 31, 2022, the Company’s common equity to assets ratio and tangible common equity to tangible assets ratio were 10.60% and 8.07%, respectively, compared to 10.09% and 8.31% at December 31, 2021. On April 26, 2022, the Company declared a quarterly cash dividend of $0.145 per share to be paid on May 18, 2022, to shareholders of record as of May 9, 2022. This represents an annualized 7% increase in the Company's dividend.
Forward-Looking Statements
The information disclosed in this document includes various forward-looking statements that are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words “anticipates,” “projects,” “intends,” “estimates,” “expects,” “believes,” “plans,” “may,” “will,” “should,” “could,” and other similar expressions are intended to identify such forward-looking statements. The Company cautions that these forward-looking statements are necessarily speculative and speak only as of the date made, and are subject to numerous assumptions, risks and uncertainties, all of which may change over time. Actual results could differ materially from such forward-looking statements. Accordingly, you should not place undue reliance on forward-looking statements. In addition to the specific risk factors disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2021, the following factors, among others, could cause actual results to differ materially and adversely from such forward-looking statements: changes in the financial services industry and the U.S. and global capital markets, changes in economic conditions nationally, regionally and in the Company’s markets, the nature and timing of actions of the Federal Reserve Board and other regulators, the nature and timing of legislation and regulation affecting the financial services industry, government intervention in the U.S. financial system, changes in federal and state tax laws, changes in levels of market interest rates, pricing pressures on loan and deposit products, credit risks of the Company’s lending and leasing activities, successful implementation, deployment and upgrades of new and existing technology, systems, services and products, customers’ acceptance of the Company’s products and services, competition, and failure to realize anticipated efficiencies and synergies from the merger of 1st Constitution Bancorp into Lakeland Bancorp and the merger of 1st Constitution Bank into Lakeland Bank. Further, given its ongoing and dynamic nature, it is difficult to predict the continuing effects that the COVID-19 pandemic will have on our business and results of operations. The pandemic and related local and national economic disruption may, among other effects, result in a material adverse change for the demand for our products and services; increased levels of loan delinquencies, problem assets and foreclosures; branch disruptions, unavailability of personnel and increased cybersecurity risks as employees work remotely. Any statements made by the Company that are not historical facts should be considered to be forward-looking statements. The Company is not obligated to update and does not undertake to update any of its forward-looking statements made herein.
Explanation of Non-GAAP Financial Measures
Reported amounts are presented in accordance with U.S. generally accepted accounting principles ("GAAP"). This press release also contains certain supplemental non-GAAP information that the Company’s management uses in its analysis of the Company’s financial results.
The Company also provides measurements and ratios based on tangible equity and tangible assets. These measures are utilized by regulators and market analysts to evaluate a company’s financial condition and, therefore, the Company’s management believes that such information is useful to investors.
Specifically, the Company also uses an efficiency ratio that is a non-GAAP financial measure. The ratio that the Company uses excludes amortization of core deposit intangibles, and, where applicable, long-term debt prepayment fees and merger-related expenses. Income for the non-GAAP ratio is increased by the favorable effect of tax-exempt income and excludes gains and losses from the sale of investment securities, which can vary from period to period. The Company uses this ratio because it believes the ratio provides a relevant measure to compare the operating performance period to period.
These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. See accompanying "Supplemental Information - Non-GAAP Financial Measures" for a reconciliation of non-GAAP financial measures.
About Lakeland
Lakeland Bank is the wholly-owned subsidiary of Lakeland Bancorp, Inc. (NASDAQ:LBAI), which had $10.28 billion in total assets at March 31, 2022. With an extensive branch network and commercial lending centers throughout New Jersey and Highland Mills, New York, the Bank offers business and retail banking products and services. Business services include commercial loans and lines of credit, commercial real estate loans, loans for healthcare services, asset-based lending, equipment financing, small business loans and lines and cash management services. Consumer services include online and mobile banking, home equity loans and lines, mortgage options and wealth management solutions. Lakeland is proud to be recognized as one of New Jersey's Best-In State Banks by Forbes and Statista, rated a 5-Star Bank by Bauer Financial and named one of New Jersey's 50 Fastest Growing Companies by NJBIZ. Visit LakelandBank.com or 973-697-2000 for more information.
Thomas J. Shara Thomas F. Splaine President & CEO EVP & CFO Lakeland Bancorp, Inc. and Subsidiaries
Consolidated Statements of Income (Unaudited)For the Three Months Ended March 31, (in thousands, except per share data) 2022 2021 Interest Income Loans and fees $ 67,809 $ 58,778 Federal funds sold and interest-bearing deposits with banks 182 37 Taxable investment securities and other 6,709 3,981 Tax-exempt investment securities 1,302 612 Total Interest Income 76,002 63,408 Interest Expense Deposits 4,039 5,124 Federal funds purchased and securities sold under agreements to repurchase 20 23 Other borrowings 1,555 1,533 Total Interest Expense 5,614 6,680 Net Interest Income 70,388 56,728 Provision (benefit) for credit losses 6,272 (2,642 ) Net Interest Income after Provision for Credit Losses 64,116 59,370 Noninterest Income Service charges on deposit accounts 2,626 2,296 Commissions and fees 2,106 1,598 Income on bank owned life insurance 830 634 Loss on equity securities (485 ) (144 ) Gains on sales of loans 1,426 708 Swap income — 562 Other income 277 105 Total Noninterest Income 6,780 5,759 Noninterest Expense Compensation and employee benefits 27,679 20,518 Premises and equipment 7,972 6,318 FDIC insurance 672 711 Data processing 1,670 1,255 Merger related expenses 4,585 — Other operating expenses 7,381 5,101 Total Noninterest Expense 49,959 33,903 Income before provision for income taxes 20,937 31,226 Provision for income taxes 5,008 8,051 Net Income $ 15,929 $ 23,175 Per Share of Common Stock Basic earnings $ 0.25 $ 0.45 Diluted earnings $ 0.25 $ 0.45 Dividends $ 0.135 $ 0.125 Lakeland Bancorp, Inc. Consolidated Balance Sheets (dollars in thousands) March 31, 2022 December 31, 2021 (Unaudited) Assets Cash $ 384,490 $ 199,158 Interest-bearing deposits due from banks 37,179 29,372 Total cash and cash equivalents 421,669 228,530 Investment securities available for sale, at estimated fair value (allowance for credit losses of $1,267 at March 31, 2022 and $83 at December 31, 2021) 1,170,938 769,956 Investment securities held to maturity (estimated fair value of $859,928 at March 31, 2022 and $815,211 at December 31, 2021, allowance for credit losses of $199 at March 31, 2022 and $181 at December 31, 2021) 940,786 824,956 Equity securities, at fair value 16,915 17,368 Federal Home Loan Bank and other membership stocks, at cost 10,415 9,049 Loans held for sale 1,906 1,943 Loans, net of deferred fees 7,137,793 5,976,148 Less: Allowance for credit losses 67,112 58,047 Net loans 7,070,681 5,918,101 Premises and equipment, net 58,591 45,916 Operating lease right-of-use assets 27,281 15,222 Accrued interest receivable 24,999 19,209 Goodwill 271,829 156,277 Other identifiable intangible assets 10,842 2,420 Bank owned life insurance 155,700 117,356 Other assets 92,681 71,753 Total Assets $ 10,275,233 $ 8,198,056 Liabilities and Stockholders' Equity Liabilities Deposits: Noninterest-bearing $ 2,300,030 $ 1,732,452 Savings and interest-bearing transaction accounts 5,602,674 4,474,144 Time deposits $250 thousand and under 696,518 623,393 Time deposits over $250 thousand 149,687 135,834 Total deposits 8,748,909 6,965,823 Federal funds purchased and securities sold under agreements to repurchase 102,911 106,453 Other borrowings 25,000 25,000 Subordinated debentures 193,904 179,043 Operating lease liabilities 28,694 16,523 Other liabilities 86,533 78,200 Total Liabilities 9,185,951 7,371,042 Stockholders' Equity Common stock, no par value; authorized 100,000,000 shares; issued 64,910,643 shares and outstanding 64,779,608 shares at March 31, 2022 and issued 50,737,400 shares and outstanding 50,606,365 shares at December 31, 2021 852,110 565,862 Retained earnings 266,460 259,340 Treasury shares, at cost, 131,035 shares at March 31, 2022 and December 31, 2021 (1,452 ) (1,452 ) Accumulated other comprehensive (loss) income (27,836 ) 3,264 Total Stockholders' Equity 1,089,282 827,014 Total Liabilities and Stockholders' Equity $ 10,275,233 $ 8,198,056 Lakeland Bancorp, Inc. Financial Highlights (Unaudited) For the Quarter Ended March 31, December 31, September 30, June 30, March 31, (dollars in thousands, except per share data) 2022 2021 2021 2021 2021 Income Statement Net interest income $ 70,388 $ 59,029 $ 59,338 $ 59,740 $ 56,728 (Provision) benefit for credit losses (6,272 ) (408 ) 2,703 5,959 2,642 Gains on sales of investment securities — — — 9 — Gains on sales of loans 1,426 399 550 607 708 (Loss) gain on equity securities (485 ) (94 ) (58 ) 11 (144 ) Other noninterest income 5,839 5,559 4,977 4,642 5,195 Long term debt extinguishment costs — — (831 ) — — Merger-related expenses (4,585 ) (710 ) (1,072 ) — — Other noninterest expense (45,374 ) (34,840 ) (35,304 ) (34,097 ) (33,903 ) Pretax income 20,937 28,935 30,303 36,871 31,226 Provision for income taxes (5,008 ) (6,765 ) (8,014 ) (9,464 ) (8,051 ) Net income $ 15,929 $ 22,170 $ 22,289 $ 27,407 $ 23,175 Basic earnings per common share $ 0.25 $ 0.43 $ 0.43 $ 0.53 $ 0.45 Diluted earnings per common share $ 0.25 $ 0.43 $ 0.43 $ 0.53 $ 0.45 Dividends paid per common share $ 0.135 $ 0.135 $ 0.135 $ 0.135 $ 0.125 Dividends paid $ 8,809 $ 6,921 $ 7,001 $ 6,828 $ 6,369 Weighted average shares - basic 63,961 50,647 50,637 50,636 50,576 Weighted average shares - diluted 64,238 50,959 50,875 50,858 50,780 Selected Operating Ratios Annualized return on average assets 0.64 % 1.06 % 1.10 % 1.41 % 1.22 % Annualized return on average common equity 5.89 % 10.70 % 10.94 % 14.07 % 12.20 % Annualized return on average tangible common equity (1) 7.88 % 13.26 % 13.63 % 17.67 % 15.39 % Annualized net interest margin 3.02 % 2.98 % 3.10 % 3.27 % 3.19 % Efficiency ratio (1) 57.77 % 53.19 % 54.02 % 51.98 % 53.75 % Common stockholders' equity to total assets 10.60 % 10.09 % 9.96 % 10.14 % 9.88 % Tangible common equity to tangible assets (1) 8.07 % 8.31 % 8.18 % 8.29 % 8.00 % Tier 1 risk-based ratio 11.34 % 11.15 % 11.19 % 10.78 % 10.47 % Total risk-based ratio 14.03 % 14.48 % 14.73 % 13.11 % 13.02 % Tier 1 leverage ratio 8.97 % 8.51 % 8.60 % 8.70 % 8.51 % Common equity tier 1 capital ratio 10.72 % 10.67 % 10.70 % 10.29 % 9.98 % Book value per common share $ 16.82 $ 16.34 $ 16.09 $ 15.74 $ 15.18 Tangible book value per common share (1) $ 12.45 $ 13.21 $ 12.95 $ 12.60 $ 12.03 (1) See Supplemental Information - Non-GAAP Financial Measures
Lakeland Bancorp, Inc. Financial Highlights (Unaudited) For the Quarter Ended March 31, December 31, September 30, June 30, March 31, (dollars in thousands) 2022 2021 2021 2021 2021 Selected Balance Sheet Data at Period End Loans $ 7,137,793 $ 5,976,148 $ 5,880,802 $ 5,988,832 $ 6,108,946 Allowance for credit losses on loans 67,112 58,047 57,953 60,389 67,252 Investment securities 2,139,054 1,621,329 1,248,705 1,107,601 1,078,750 Total assets 10,275,233 8,198,056 8,172,479 7,854,238 7,771,761 Total deposits 8,748,909 6,965,823 6,930,912 6,715,035 6,635,226 Short-term borrowings 102,911 106,453 111,907 100,190 111,999 Other borrowings 218,904 204,043 212,107 138,045 143,267 Stockholders' equity 1,089,282 827,014 814,128 796,676 768,065 Loans Non-owner occupied commercial $ 2,639,784 $ 2,316,284 $ 2,300,637 $ 2,330,376 $ 2,375,024 Owner occupied commercial 1,122,754 908,449 884,144 870,535 857,506 Multifamily 1,104,206 972,233 907,903 902,394 858,168 Non-owner occupied residential 225,795 177,097 177,592 189,765 195,534 Commercial, industrial and other 620,611 405,832 363,976 358,659 394,416 Construction 404,186 302,228 332,868 335,167 291,252 Paycheck Protection Program 36,785 56,574 109,348 207,045 346,150 Equipment financing 123,943 123,212 119,709 121,096 119,428 Residential mortgages 564,042 438,710 407,021 391,589 385,778 Consumer and home equity 295,687 275,529 277,604 282,206 285,690 Total loans $ 7,137,793 $ 5,976,148 $ 5,880,802 $ 5,988,832 $ 6,108,946 Deposits Noninterest-bearing $ 2,300,030 $ 1,732,452 $ 1,724,646 $ 1,683,887 $ 1,631,942 Savings and interest-bearing transaction accounts 5,602,674 4,474,144 4,401,367 4,198,709 4,049,914 Time deposits 846,205 759,227 804,899 832,439 953,370 Total deposits $ 8,748,909 $ 6,965,823 $ 6,930,912 $ 6,715,035 $ 6,635,226 Total loans to total deposits ratio 81.6 % 85.8 % 84.8 % 89.2 % 92.1 % Selected Average Balance Sheet Data Loans $ 7,021,462 $ 5,902,152 $ 5,943,698 $ 6,080,408 $ 6,089,757 Investment securities 2,019,578 1,423,650 1,144,356 1,066,086 1,003,479 Interest-earning assets 9,504,287 7,874,181 7,611,259 7,342,952 7,230,136 Total assets 10,138,437 8,332,637 8,070,050 7,784,385 7,704,603 Noninterest-bearing demand deposits 2,194,038 1,775,119 1,702,788 1,660,825 1,545,968 Savings deposits 1,131,359 670,039 653,840 639,540 604,931 Interest-bearing transaction accounts 4,399,531 3,862,443 3,701,676 3,495,610 3,388,027 Time deposits 879,427 781,199 826,831 880,079 1,044,915 Total deposits 8,604,355 7,088,800 6,885,135 6,676,054 6,583,841 Short-term borrowings 104,633 112,533 108,519 85,325 73,492 Other borrowings 217,983 204,266 162,216 140,162 143,261 Total interest-bearing liabilities 6,732,934 5,630,479 5,453,082 5,240,716 5,254,626 Stockholders' equity 1,095,913 822,001 807,956 781,299 770,255 Lakeland Bancorp, Inc. Financial Highlights (Unaudited) For the Quarter Ended March 31, December 31, September 30, June 30, March 31, (dollars in thousands) 2022 2021 2021 2021 2021 Average Annualized Yields (Taxable Equivalent Basis) and Costs Assets Loans 3.92 % 3.88 % 4.00 % 3.99 % 3.91 % Taxable investment securities and other 1.60 % 1.60 % 1.68 % 1.72 % 1.81 % Tax-exempt securities 1.91 % 2.20 % 2.15 % 2.50 % 2.54 % Federal funds sold and interest-bearing cash accounts 0.16 % 0.14 % 0.12 % 0.11 % 0.11 % Total interest-earning assets 3.25 % 3.22 % 3.40 % 3.57 % 3.56 % Liabilities Savings accounts 0.17 % 0.05 % 0.05 % 0.05 % 0.05 % Interest-bearing transaction accounts 0.25 % 0.24 % 0.30 % 0.32 % 0.34 % Time deposits 0.40 % 0.51 % 0.55 % 0.61 % 0.83 % Borrowings 1.95 % 1.55 % 2.33 % 2.22 % 2.87 % Total interest-bearing liabilities 0.34 % 0.33 % 0.41 % 0.42 % 0.51 % Net interest spread (taxable equivalent basis) 2.92 % 2.89 % 2.99 % 3.15 % 3.05 % Annualized net interest margin (taxable equivalent basis) 3.02 % 2.98 % 3.10 % 3.27 % 3.19 % Annualized cost of deposits 0.19 % 0.19 % 0.23 % 0.25 % 0.32 % Loan Quality Data Allowance for Credit Losses on Loans Balance at beginning of period $ 58,047 $ 57,953 $ 60,389 $ 67,252 $ 71,124 Initial allowance for credit losses on purchased credit deteriorated loans 12,077 — — — — Charge-offs on purchased credit deteriorated loans (7,634 ) — — — — Provision (benefit) for credit losses on loans 4,630 (87 ) (2,705 ) (5,314 ) (2,808 ) Charge-offs (170 ) (461 ) (969 ) (1,862 ) (1,270 ) Recoveries 162 642 1,238 313 206 Balance at end of period $ 67,112 $ 58,047 $ 57,953 $ 60,389 $ 67,252 Net Loan Charge-Offs (Recoveries) Non owner occupied commercial $ 4 $ — $ 6 $ 1,649 $ 592 Owner occupied commercial 24 (1 ) (80 ) (9 ) 70 Multifamily — — 28 — — Non owner occupied residential (14 ) (136 ) (5 ) (8 ) 206 Construction 6,804 (4 ) 50 (42 ) (25 ) Commercial, industrial and other 778 (449 ) (265 ) 5 221 Equipment finance 82 60 139 4 83 Residential mortgages (48 ) 49 27 (82 ) (58 ) Consumer and home equity 12 300 (169 ) 32 (25 ) Net charge-offs (recoveries) $ 7,642 $ (181 ) $ (269 ) $ 1,549 $ 1,064 For the Quarter Ended March 31, December 31, September 30, June 30, March 31, (dollars in thousands) 2022 2021 2021 2021 2021 Non-Performing Assets (1) Non owner occupied commercial $ 5,482 $ 3,009 $ 4,748 $ 11,427 $ 12,835 Owner occupied commercial 2,626 2,810 4,656 7,152 8,797 Multifamily — — — 195 201 Non owner occupied residential 2,430 2,852 922 1,305 1,417 Construction 220 — — 515 718 Commercial, industrial and other 6,098 6,763 1,108 1,449 2,252 Equipment finance 51 43 238 264 300 Residential mortgages 1,935 817 123 — 2,328 Consumer and home equity 898 687 453 308 2,277 Total non-accrual loans 19,740 16,981 12,248 22,615 31,125 Property acquired through foreclosure or repossession — — — — — Total non-performing assets $ 19,740 $ 16,981 $ 12,248 $ 22,615 $ 31,125 Loans past due 90 days or more and still accruing $ — $ 1 $ — $ — $ — Loans restructured and still accruing $ 3,290 $ 3,342 $ 3,414 $ 3,595 $ 3,799 Ratio of allowance for loan losses to total loans 0.94 % 0.97 % 0.99 % 1.01 % 1.10 % Total non-accrual loans to total loans 0.28 % 0.28 % 0.21 % 0.38 % 0.51 % Total non-performing assets to total assets 0.19 % 0.21 % 0.15 % 0.29 % 0.40 % Annualized net charge-offs (recoveries) to average loans 0.44 % (0.01) % (0.02) % 0.10 % 0.07 % (1) Includes non-accrual purchased credit deteriorated loans.
Lakeland Bancorp, Inc. Supplemental Information - Non-GAAP Financial Measures (Unaudited) At or for the Quarter Ended March 31, December 31, September 30, June 30, March 31, (dollars in thousands, except per share amounts) 2022 2021 2021 2021 2021 Calculation of Tangible Book Value Per Common Share Total common stockholders' equity at end of period - GAAP $ 1,089,282 $ 827,014 $ 814,128 $ 796,676 $ 768,065 Less: Goodwill 271,829 156,277 156,277 156,277 156,277 Less: Other identifiable intangible assets 10,842 2,420 2,631 2,841 3,063 Total tangible common stockholders' equity at end of period - Non-GAAP $ 806,611 $ 668,317 $ 655,220 $ 637,558 $ 608,725 Shares outstanding at end of period 64,780 50,606 50,602 50,601 50,598 Book value per share - GAAP $ 16.82 $ 16.34 $ 16.09 $ 15.74 $ 15.18 Tangible book value per share - Non-GAAP $ 12.45 $ 13.21 $ 12.95 $ 12.60 $ 12.03 Calculation of Tangible Common Equity to Tangible Assets Total tangible common stockholders' equity at end of period - Non-GAAP $ 806,611 $ 668,317 $ 655,220 $ 637,558 $ 608,725 Total assets at end of period - GAAP $ 10,275,233 $ 8,198,056 $ 8,172,479 $ 7,854,238 $ 7,771,761 Less: Goodwill 271,829 156,277 156,277 156,277 156,277 Less: Other identifiable intangible assets 10,842 2,420 2,631 2,841 3,063 Total tangible assets at end of period - Non-GAAP $ 9,992,562 $ 8,039,359 $ 8,013,571 $ 7,695,120 $ 7,612,421 Common equity to assets - GAAP 10.60 % 10.09 % 9.96 % 10.14 % 9.88 % Tangible common equity to tangible assets - Non-GAAP 8.07 % 8.31 % 8.18 % 8.29 % 8.00 % Calculation of Return on Average Tangible Common Equity Net income - GAAP $ 15,929 $ 22,170 $ 22,289 $ 27,407 $ 23,175 Total average common stockholders' equity - GAAP $ 1,095,913 $ 822,001 $ 807,956 $ 781,299 $ 770,255 Less: Average goodwill 265,409 156,277 156,277 156,277 156,277 Less: Average other identifiable intangible assets 10,851 2,544 2,758 2,979 3,192 Total average tangible common stockholders' equity - Non-GAAP $ 819,653 $ 663,180 $ 648,921 $ 622,043 $ 610,786 Return on average common stockholders' equity - GAAP 5.89 % 10.70 % 10.94 % 14.07 % 12.20 % Return on average tangible common stockholders' equity - Non-GAAP 7.88 % 13.26 % 13.63 % 17.67 % 15.39 % Calculation of Efficiency Ratio Total noninterest expense $ 49,959 $ 35,550 $ 37,207 $ 34,097 $ 33,903 Amortization of core deposit intangibles (596 ) (210 ) (211 ) (221 ) (226 ) Merger-related expenses (4,585 ) (710 ) (1,072 ) — — Long term debt extinguishment costs — — (831 ) — — Noninterest expense, as adjusted $ 44,778 $ 34,630 $ 35,093 $ 33,876 $ 33,677 Net interest income $ 70,388 $ 59,029 $ 59,338 $ 59,740 $ 56,728 Total noninterest income 6,780 5,864 5,469 5,269 5,759 Total revenue 77,168 64,893 64,807 65,009 62,487 Tax-equivalent adjustment on municipal securities 346 213 157 167 163 Gains on sales of investment securities — — — (9 ) — Total revenue, as adjusted $ 77,514 $ 65,106 $ 64,964 $ 65,167 $ 62,650 Efficiency ratio - Non-GAAP 57.77 % 53.19 % 54.02 % 51.98 % 53.75 % Lakeland Bancorp, Inc. Supplemental Information - Reconciliation of Net Income (Unaudited) For the Three Months Ended March 31, (Dollars in thousands, except per share amounts) 2022 2021 Net income - GAAP $ 15,929 $ 23,175 Non-Routine Transactions Tax deductible merger-related expenses 3,436 — Tax effect on tax deductible merger-related expenses (1,034 ) — Non-tax deductible merger-related expenses 1,149 — Effect of non-routine transactions, net of tax $ 3,551 $ — Net income available to common shareholders excluding non-routine transactions $ 19,480 $ 23,175 Less: Earnings allocated to participating securities 164 216 Net Income, excluding non-routine transactions $ 19,316 $ 22,959 Weighted average shares - Basic 63,961 50,576 Weighted average shares - Diluted 64,238 50,780 Basic earnings per share - GAAP $ 0.25 $ 0.45 Diluted earnings per share - GAAP $ 0.25 $ 0.45 Basic earnings per share, adjusted for non-routine transactions $ 0.30 $ 0.45 Diluted earnings per share, adjusted for non-routine transactions $ 0.30 $ 0.45 Return on average assets - GAAP 0.64 % 1.22 % Return on average assets, adjusted for non-routine transactions 0.78 % 1.22 % Return on average common stockholders' equity - GAAP 5.89 % 12.20 % Return on average common stockholders' equity, adjusted for non-routine transactions 7.21 % 12.20 % Return on average tangible common stockholders' equity - Non-GAAP 7.88 % 15.39 % Return on average tangible common stockholders' equity - Non-GAAP, adjusted for non-routine transactions 9.64 % 15.39 % 
