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Lakeland Bancorp Announces Record Quarterly Results
Source: Nasdaq GlobeNewswire / 28 Jul 2022 08:00:08 America/New_York
OAK RIDGE, N.J., July 28, 2022 (GLOBE NEWSWIRE) -- Lakeland Bancorp, Inc. (NASDAQ: LBAI) (the “Company”), the parent company of Lakeland Bank (“Lakeland”), reported net income of $29.1 million and earnings per diluted share ("EPS") of $0.44 for the three months ended June 30, 2022 compared to net income of $27.4 million and diluted EPS of $0.53 for the three months ended June 30, 2021. For the second quarter of 2022, annualized return on average assets was 1.15%, annualized return on average common equity was 10.71% and annualized return on average tangible common equity was 14.45%.
For the six months ended June 30, 2022, the Company reported net income of $45.0 million and diluted EPS of $0.69 compared to net income of $50.6 million and diluted EPS of $0.98 for the first six months of 2021. Annualized return on average assets was 0.89%, annualized return on average common equity was 8.31% and annualized return on average tangible common equity was 11.16% for the first six months of 2021.
Thomas Shara, Lakeland Bancorp’s President and CEO commented, “We are delighted with the Company’s results for the quarter which include record net income of $29.1 million, record net interest income of $80.3 million, expansion in net interest margin and loan growth of 4%. Lakeland continues to effectively navigate the current challenging economic conditions with prudent loan underwriting standards as evidenced in our continued stellar asset quality. We are very proud to be awarded the 2022 Best-In-State Banks in New Jersey by Forbes, representing the fourth consecutive year of outstanding achievement.”
Second Quarter 2022 Highlights
- Loan growth for the second quarter of $270.7 million or 3.8% compared to the prior quarter was attributed to both commercial and consumer portfolio expansion.
- Net interest margin increased to 3.38% for the second quarter compared to 3.02% in the first quarter of 2022 and 3.27% in the second quarter of 2021.
- Nonperforming assets to total assets decreased eight basis points to 0.21% at June 30, 2022 compared to 0.29% at June 30, 2021.
- Efficiency ratio of 50.7% in the second quarter of 2022 compared to 57.8% in the first quarter of 2022.
Net Interest Margin and Net Interest Income
Net interest margin for the second quarter of 2022 of 3.38% increased 11 basis points compared to the second quarter of 2021 and increased 36 basis points compared to the first quarter of 2022. The increase in net interest margin compared to the second quarter 2021 and first quarter 2022 was due primarily to an increase in yields on loans, increased loan prepayment fees, higher securities balances and non-accrual interest recoveries in the second quarter of 2022. Net interest margin for the first six months of 2022 was 3.20% compared to 3.23% for the same period of 2021. The variance in net interest margin compared to the first six months of 2021 is due primarily to a decrease in the yield on investment securities.
The yield on interest-earning assets for the second quarter of 2022 was 3.61% as compared to 3.57% for the second quarter of 2021 and 3.25% for the first quarter of 2022. The increase in the yield on interest-earning assets compared to the second quarter of 2021 and the linked quarter was due primarily to an increase in the yield on loans driven primarily by increases in market interest rates, increased loan prepayment fees and non-accrual interest recoveries. Also increasing the yield on interest-earning assets during the second quarter of 2022 was a reduction in the average balance of lower-yielding federal funds sold. The yield on interest-earning assets for the first six months of 2022 was 3.42% as compared to 3.57% during the same period in 2021. The decrease in yield on interest-earning assets for the first six months of 2022 compared to the same period in 2021 was due primarily to a decrease in the yield on securities as well as an increase in lower-yielding federal funds sold, partially offset by higher average balances of securities and loans.
The cost of interest-bearing liabilities for the second quarter of 2022 was 0.40% compared to 0.42% for the second quarter of 2021 and 0.34% for the first quarter of 2022. The cost of interest-bearing liabilities for the first six months of 2022 was 0.37% compared to 0.47% for the same period in 2021. The reduction in the cost of interest-bearing liabilities compared to the second quarter of 2021 and the first six months of 2021 was largely driven by reductions in the cost of time deposits and long-term borrowings. The increase in the cost of interest-bearing liabilities compared to the linked quarter was due primarily to an increase in the cost of interest-bearing deposits and borrowings driven primarily by increases in market interest rates.
Net interest income for the second quarter of 2022 of $80.3 million increased $20.6 million compared to the second quarter of 2021. Net interest income for the first six months of 2022 was $150.7 million as compared to $116.5 million for the first six months of 2021. The increase in net interest income compared to prior periods was due primarily to growth of loans and investment securities. Also contributing to the increase were higher loan prepayment fees and non-accrual interest recoveries during the second quarter of 2022.
Noninterest Income
For the second quarter of 2022, noninterest income increased $1.8 million to $7.1 million compared to the second quarter of 2021. Commissions and fees increased $800,000 driven primarily by an increase in wire transfer charges and financial services income. Other income increased $500,000 due primarily to reductions in write-downs on premises and equipment as well as recoveries on loans charged off from prior acquisitions. Service charges on deposit accounts increased $266,000 compared to the second quarter of 2021 due predominately to increases in debit card income. Swap income for the second quarter of 2022 was $399,000 compared to $72,000 during the same period of 2021 due primarily to changes in the yield curve which increased demand for swap transactions. Losses on equity securities totaled $364,000 in the second quarter of 2022 compared to gains of $11,000 in the second quarter of 2021.
For the first six months of 2022, noninterest income increased $2.8 million to $13.8 million compared to the first six months of 2021. Commissions and fees increased $1.3 million due primarily to higher loan fees and increases in financial services income. Other income increased $672,000 and service charges on deposits increased $596,000 compared to the first half of 2021 due primarily to the same reasons mentioned in the quarterly analysis. Losses on equity securities totaled $849,000 in the first six months of 2022 compared to losses of $133,000 in the first six months of 2021.
Noninterest Expense
Noninterest expense for the second quarter of 2022 of $45.1 million increased $11.0 million compared to the second quarter of 2021. The increase in noninterest expense was primarily due to compensation and employee benefits which increased $6.5 million resulting primarily from additions to our staff from the 1st Constitution acquisition and normal merit increases. Premises and equipment expense and data processing expense increased $1.6 million and $592,000, respectively, compared to the second quarter of 2021 due primarily to increases related to expansion of the franchise as a result of the 1st Constitution acquisition. Other operating expenses in the second quarter of 2022 increased $2.2 million compared to the same period in 2021 due primarily to increased core deposit intangible amortization, marketing expense, appraisal fees, consulting fees and insurance expense.
Noninterest expense for the first half of 2022 of $95.0 million increased $27.0 million compared to the first half of 2021. Compensation and employee benefit expense and premises and equipment expense increased $13.7 million and $3.3 million, respectively, compared to the first half of 2021 due to the same reasons discussed in the quarterly comparison. Merger related expenses were $4.6 million due to the acquisition of 1st Constitution Bancorp. Data processing expense increased $1.0 million due to the same reasons mentioned in the quarterly analysis. Other operating expenses increased $4.5 million in the first half of 2022 compared to the same period in 2021 due primarily to an increase in consulting and marketing fees.
Income Tax Expense
The effective tax rate for the second quarter of 2022 was 24.7% compared to 25.7% for the second quarter of 2021. The decreased effective tax rate for the second quarter of 2022 was primarily a result of tax advantaged items increasing as a percentage of pretax income.
Financial Condition
At June 30, 2022, total assets were $10.37 billion, an increase of $2.18 billion, compared to December 31, 2021. As of June 30, 2022, total loans grew $1.43 billion, including $1.10 billion from 1st Constitution, to $7.41 billion while investment securities increased $502.9 million, including $342.3 million from 1st Constitution, to $2.12 billion. On the funding side, total deposits increased $1.54 billion, including $1.65 billion from 1st Constitution, to $8.50 billion. At June 30, 2022, total loans as a percent of total deposits was 87.1%.
Asset Quality
At June 30, 2022, non-performing assets totaled $22.2 million or 0.21% of total assets compared to $22.6 million or 0.29% of total assets at June 30, 2021. Non-accrual loans as a percent of total loans was 0.30% at June 30, 2022, compared to 0.38% at June 30, 2021. The allowance for credit losses on loans totaled $68.8 million, 0.93% of total loans, at June 30, 2022, compared to $60.4 million, 1.01% of total loans, at June 30, 2021. At June 30, 2022, the allowance for credit losses included a day one purchase accounting adjustment of $12.1 million for purchased credit impaired loans. In the second quarter of 2022, the Company had net recoveries of $141,000 or (0.01)% of average loans on an annualized basis, compared to net charge-offs of $1.5 million or 0.10% for the same period in 2021.
The provision for credit losses for the second quarter of 2022 was $3.6 million compared to a benefit of $6.0 million in the second quarter of 2021. The provision in the 2022 period is comprised of a provision for credit losses on loans of $1.6 million, a provision for credit losses on securities of $1.5 million and a provision for off-balance-sheet exposures of $535,000. For the six months ended June 30, 2022, the provision for credit losses was $9.9 million, while the Company recorded a benefit of $8.6 million for the same period in 2021. As of June 30, 2022, the provision was comprised of a provision for credit losses on loans of $6.2 million, a provision for credit losses on securities of $2.7 million and a provision for off-balance-sheet exposures of $975,000.
Capital
At June 30, 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 9.05% at June 30, 2022. The book value per common share increased 7% to $16.82 at June 30, 2022 compared to $15.74 at June 30, 2021. Tangible book value per common share was $12.47 and $12.60 at June 30, 2022 and 2021, respectively (see "Supplemental Information - Non-GAAP Financial Measures" for a reconciliation of non-GAAP financial measures, including tangible book value). At June 30, 2022, the Company’s common equity to assets ratio and tangible common equity to tangible assets ratio were 10.51% and 8.01%, respectively, compared to 10.14% and 8.29% at June 30, 2021. On July 26, 2022, the Company declared a quarterly cash dividend of $0.145 per share to be paid on August 17, 2022, to shareholders of record as of August 8, 2022.
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, as updated by our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, 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. 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 $10.37 billion in total assets at June 30, 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 New Jersey's Best-In State-Bank by Forbes and Statista for the fourth consecutive year, Best Banks to Work For by American Banker, 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 973-697-6140 for more information.
Thomas J. Shara Thomas F. Splaine President & CEO EVP & CFO Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)Three Months Ended
June 30,Six Months Ended
June 30,(dollars in thousands, except per share amounts) 2022 2021 2022 2021 Income Statement Net interest income $ 80,302 $ 59,740 $ 150,690 $ 116,468 (Provision) benefit for credit losses (3,644 ) 5,959 (9,916 ) 8,601 Gains on sales of investment securities — 9 — 9 Gains on sales of loans 715 607 2,141 1,315 (Loss) gain on equity securities (364 ) 11 (849 ) (133 ) Other noninterest income 6,712 4,642 12,551 9,837 Merger-related expenses — — (4,585 ) — Other noninterest expense (45,068 ) (34,097 ) (90,442 ) (68,000 ) Pretax income 38,653 36,871 59,590 68,097 Provision for income taxes (9,536 ) (9,464 ) (14,544 ) (17,515 ) Net income $ 29,117 $ 27,407 $ 45,046 $ 50,582 Basic earnings per common share $ 0.44 $ 0.53 $ 0.69 $ 0.99 Diluted earnings per common share $ 0.44 $ 0.53 $ 0.69 $ 0.98 Dividends paid per common share $ 0.145 $ 0.135 $ 0.280 $ 0.260 Weighted average shares - basic 64,828 50,636 64,397 50,606 Weighted average shares - diluted 64,989 50,858 64,615 50,821 Selected Operating Ratios Annualized return on average assets 1.15 % 1.41 % 0.89 % 1.32 % Annualized return on average common equity 10.71 % 14.07 % 8.31 % 13.15 % Annualized return on average tangible common equity (1) 14.45 % 17.67 % 11.16 % 16.55 % Annualized yield on interest-earning assets 3.61 % 3.57 % 3.42 % 3.57 % Annualized cost of interest-bearing liabilities 0.40 % 0.42 % 0.37 % 0.47 % Annualized net interest spread 3.22 % 3.15 % 3.05 % 3.10 % Annualized net interest margin 3.38 % 3.27 % 3.20 % 3.23 % Efficiency ratio (1) 50.69 % 51.98 % 54.01 % 52.85 % Stockholders' equity to total assets 10.51 % 10.14 % Book value per common share $ 16.82 $ 15.74 Tangible book value per common share (1) $ 12.47 $ 12.60 Tangible common equity to tangible assets (1) 8.01 % 8.29 % Asset Quality Ratios June 30, 2022 June 30, 2021 Ratio of allowance for credit losses to total loans 0.93 % 1.01 % Non-performing loans to total loans 0.30 % 0.38 % Non-performing assets to total assets 0.21 % 0.29 % Annualized net charge-offs to average loans 0.21 % 0.09 % (1) See Supplemental Information - Non-GAAP Financial Measures Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)(dollars in thousands) June 30, 2022 June 30, 2021 Selected Balance Sheet Data at Period End Loans $ 7,408,540 $ 5,988,832 Allowance for credit losses 68,836 60,389 Investment securities 2,124,213 1,107,601 Total assets 10,374,178 7,854,238 Total deposits 8,501,804 6,715,035 Short-term borrowings 432,206 100,190 Other borrowings 219,027 138,045 Stockholders' equity 1,090,145 796,676 Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Selected Average Balance Sheet Data Loans $ 7,229,175 $ 6,080,408 $ 7,125,893 $ 6,085,057 Investment securities 2,188,199 1,066,086 2,104,355 1,034,956 Interest-earning assets 9,588,396 7,342,952 9,546,575 7,286,856 Total assets 10,192,140 7,784,385 10,165,437 7,744,714 Noninterest-bearing demand deposits 2,310,702 1,660,825 2,252,693 1,603,714 Savings deposits 1,153,591 639,540 1,142,536 622,331 Interest-bearing transaction accounts 4,369,067 3,495,610 4,384,215 3,442,116 Time deposits 803,421 880,079 841,214 962,042 Total deposits 8,636.781 6,676,054 8,620,658 6,630,203 Short-term borrowings 130.242 85,325 117,508 79,441 Other borrowings 218,958 140,162 218,474 141,703 Total interest-bearing liabilities 6,675,279 5,240,716 6,703,947 5,247,633 Stockholders' equity 1,090,613 781,299 1,093,248 775,808 Lakeland Bancorp, Inc. and Subsidiaries
Consolidated Statements of Income (Unaudited)For the Three Months Ended June 30, For the Six Months Ended June 30, (in thousands, except per share data) 2022 2021 2022 2021 Interest Income Loans and fees $ 76,973 $ 60,529 $ 144,782 $ 119,307 Federal funds sold and interest-bearing deposits with banks 235 52 417 89 Taxable investment securities and other 8,285 4,029 14,994 8,010 Tax-exempt investment securities 1,442 631 2,744 1,243 Total Interest Income 86,935 65,241 162,937 128,649 Interest Expense Deposits 4,829 4,238 8,868 9,362 Federal funds purchased and securities sold under agreements to repurchase 150 16 170 39 Other borrowings 1,654 1,247 3,209 2,780 Total Interest Expense 6,633 5,501 12,247 12,181 Net Interest Income 80,302 59,740 150,690 116,468 Provision (benefit) for credit losses 3,644 (5,959 ) 9,916 (8,601 ) Net Interest Income after Provision for Credit Losses 76,658 65,699 140,774 125,069 Noninterest Income Service charges on deposit accounts 2,711 2,445 5,337 4,741 Commissions and fees 2,555 1,755 4,661 3,353 Income on bank owned life insurance 820 643 1,650 1,277 (Loss) gain on equity securities (364 ) 11 (849 ) (133 ) Gains on sales of loans 715 607 2,141 1,315 Gains on sales of investment securities, net — 9 — 9 Swap income 399 72 399 634 Other income 227 (273 ) 504 (168 ) Total Noninterest Income 7,063 5,269 13,843 11,028 Noninterest Expense Compensation and employee benefits 26,938 20,407 54,617 40,925 Premises and equipment 7,679 6,078 15,651 12,396 FDIC insurance 672 621 1,344 1,332 Data processing 1,891 1,299 3,561 2,554 Merger related expenses — — 4,585 — Other operating expenses 7,888 5,692 15,269 10,793 Total Noninterest Expense 45,068 34,097 95,027 68,000 Income before provision for income taxes 38,653 36,871 59,590 68,097 Provision for income taxes 9,536 9,464 14,544 17,515 Net Income $ 29,117 $ 27,407 $ 45,046 $ 50,582 Per Share of Common Stock Basic earnings $ 0.44 $ 0.53 $ 0.69 $ 0.99 Diluted earnings $ 0.44 $ 0.53 $ 0.69 $ 0.98 Dividends $ 0.145 $ 0.135 $ 0.280 $ 0.260 Lakeland Bancorp, Inc. Consolidated Balance Sheets (dollars in thousands) June 30, 2022 December 31, 2021 (Unaudited) Assets Cash $ 195,701 $ 199,158 Interest-bearing deposits due from banks 49,765 29,372 Total cash and cash equivalents 245,466 228,530 Investment securities available for sale, at estimated fair value (allowance for credit losses of $2,802 at June 30, 2022 and $83 at December 31, 2021) 1,139,414 769,956 Investment securities held to maturity (estimated fair value of $808,663 at June 30, 2022 and $815,211 at December 31, 2021, allowance for credit losses of $190 at June 30, 2022 and $181 at December 31, 2021) 941,558 824,956 Equity securities, at fair value 17,594 17,368 Federal Home Loan Bank and other membership stocks, at cost 25,647 9,049 Loans held for sale 1,168 1,943 Loans, net of deferred fees 7,408,540 5,976,148 Less: Allowance for credit losses 68,836 58,047 Net loans 7,339,704 5,918,101 Premises and equipment, net 55,456 45,916 Operating lease right-of-use assets 26,244 15,222 Accrued interest receivable 26,339 19,209 Goodwill 271,829 156,277 Other identifiable intangible assets 10,250 2,420 Bank owned life insurance 156,496 117,356 Other assets 117,013 71,753 Total Assets $ 10,374,178 $ 8,198,056 Liabilities and Stockholders' Equity Liabilities Deposits: Noninterest-bearing $ 2,330,550 $ 1,732,452 Savings and interest-bearing transaction accounts 5,407,212 4,474,144 Time deposits $250 thousand and under 620,720 623,393 Time deposits over $250 thousand 143,322 135,834 Total deposits 8,501,804 6,965,823 Federal funds purchased and securities sold under agreements to repurchase 432,206 106,453 Other borrowings 25,000 25,000 Subordinated debentures 194,027 179,043 Operating lease liabilities 27,639 16,523 Other liabilities 103,357 78,200 Total Liabilities 9,284,033 7,371,042 Stockholders' Equity Common stock, no par value; authorized 100,000,000 shares; issued 64,924,576 shares and outstanding 64,793,541 shares at June 30, 2022 and issued 50,737,400 shares and outstanding 50,606,365 shares at December 31, 2021 853,206 565,862 Retained earnings 286,063 259,340 Treasury shares, at cost, 131,035 shares at June 30, 2022 and December 31, 2021 (1,452 ) (1,452 ) Accumulated other comprehensive (loss) income (47,672 ) 3,264 Total Stockholders' Equity 1,090,145 827,014 Total Liabilities and Stockholders' Equity $ 10,374,178 $ 8,198,056 Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)For the Quarter Ended (dollars in thousands, except per share data) June 30,
2022March 31,
2022December 31,
2021September 30,
2021June 30,
2021Income Statement Net interest income $ 80,302 $ 70,388 $ 59,029 $ 59,338 $ 59,740 (Provision) benefit for credit losses (3,644 ) (6,272 ) (408 ) 2,703 5,959 Gains on sales of investment securities — — — — 9 Gains on sales of loans 715 1,426 399 550 607 (Loss) gain on equity securities (364 ) (485 ) (94 ) (58 ) 11 Other noninterest income 6,712 5,839 5,559 4,977 4,642 Long-term debt prepayment fees — — — (831 ) — Merger-related expenses — (4,585 ) (710 ) (1,072 ) — Other noninterest expense (45,068 ) (45,374 ) (34,840 ) (35,304 ) (34,097 ) Pretax income 38,653 20,937 28,935 30,303 36,871 Provision for income taxes (9,536 ) (5,008 ) (6,765 ) (8,014 ) (9,464 ) Net income $ 29,117 $ 15,929 $ 22,170 $ 22,289 $ 27,407 Basic earnings per common share $ 0.44 $ 0.25 $ 0.43 $ 0.43 $ 0.53 Diluted earnings per common share $ 0.44 $ 0.25 $ 0.43 $ 0.43 $ 0.53 Dividends paid per common share $ 0.145 $ 0.135 $ 0.135 $ 0.135 $ 0.135 Dividends paid $ 9,507 $ 8,809 $ 6,921 $ 7,001 $ 6,828 Weighted average shares - basic 64,828 63,961 50,647 50,637 50,636 Weighted average shares - diluted 64,989 64,238 50,959 50,875 50,858 Selected Operating Ratios Annualized return on average assets 1.15 % 0.64 % 1.06 % 1.10 % 1.41 % Annualized return on average common equity 10.71 % 5.89 % 10.70 % 10.94 % 14.07 % Annualized return on average tangible common equity (1) 14.45 % 7.88 % 13.26 % 13.63 % 17.67 % Annualized net interest margin 3.38 % 3.02 % 2.98 % 3.10 % 3.27 % Efficiency ratio (1) 50.69 % 57.77 % 53.19 % 54.02 % 51.98 % Common stockholders' equity to total assets 10.51 % 10.60 % 10.09 % 9.96 % 10.14 % Tangible common equity to tangible assets (1) 8.01 % 8.07 % 8.31 % 8.18 % 8.29 % Tier 1 risk-based ratio 11.12 % 11.34 % 11.15 % 11.19 % 10.78 % Total risk-based ratio 13.74 % 14.03 % 14.48 % 14.73 % 13.11 % Tier 1 leverage ratio 9.05 % 8.97 % 8.51 % 8.60 % 8.70 % Common equity tier 1 capital ratio 10.57 % 10.72 % 10.67 % 10.70 % 10.29 % Book value per common share $ 16.82 $ 16.82 $ 16.34 $ 16.09 $ 15.74 Tangible book value per common share (1) $ 12.47 $ 12.45 $ 13.21 $ 12.95 $ 12.60 (1) See Supplemental Information - Non-GAAP Financial Measures
Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)For the Quarter Ended (dollars in thousands) June 30,
2022March 31,
2022December 31,
2021September 30,
2021June 30,
2021Selected Balance Sheet Data at Period End Loans $ 7,408,540 $ 7,137,793 $ 5,976,148 $ 5,880,802 $ 5,988,832 Allowance for credit losses on loans 68,836 67,112 58,047 57,953 60,389 Investment securities 2,124,213 2,139,054 1,621,329 1,248,705 1,107,601 Total assets 10,374,178 10,275,233 8,198,056 8,172,479 7,854,238 Total deposits 8,501,804 8,748,909 6,965,823 6,930,912 6,715,035 Short-term borrowings 432,206 102,911 106,453 111,907 100,190 Other borrowings 219,027 218,904 204,043 212,107 138,045 Stockholders' equity 1,090,145 1,089,282 827,014 814,128 796,676 Loans Non-owner occupied commercial $ 2,777,003 $ 2,639,784 $ 2,316,284 $ 2,300,637 $ 2,330,376 Owner occupied commercial 1,179,527 1,122,754 908,449 884,144 870,535 Multifamily 1,134,938 1,104,206 972,233 907,903 902,394 Non-owner occupied residential 221,339 225,795 177,097 177,592 189,765 Commercial, industrial and other 647,531 620,611 405,832 363,976 358,659 Paycheck Protection Program 10,404 36,785 56,574 109,348 207,045 Construction 370,777 404,186 302,228 332,868 335,167 Equipment financing 134,136 123,943 123,212 119,709 121,096 Residential mortgages 622,417 564,042 438,710 407,021 391,589 Consumer and home equity 310,468 295,687 275,529 277,604 282,206 Total loans $ 7,408,540 $ 7,137,793 $ 5,976,148 $ 5,880,802 $ 5,988,832 Deposits Noninterest-bearing $ 2,330,550 $ 2,300,030 $ 1,732,452 $ 1,724,646 $ 1,683,887 Savings and interest-bearing transaction accounts 5,407,212 5,602,674 4,474,144 4,401,367 4,198,709 Time deposits 764,042 846,205 759,227 804,899 832,439 Total deposits $ 8,501,804 $ 8,748,909 $ 6,965,823 $ 6,930,912 $ 6,715,035 Total loans to total deposits ratio 87.1 % 81.6 % 85.8 % 84.8 % 89.2 % Selected Average Balance Sheet Data Loans $ 7,229,175 $ 7,021,462 $ 5,902,152 $ 5,943,698 $ 6,080,408 Investment securities 2,188,199 2,019,578 1,423,650 1,144,356 1,066,086 Interest-earning assets 9,588,396 9,504,287 7,874,181 7,611,259 7,342,952 Total assets 10,192,140 10,138,437 8,332,637 8,070,050 7,784,385 Noninterest-bearing demand deposits 2,310,702 2,194,038 1,775,119 1,702,788 1,660,825 Savings deposits 1,153,591 1,131,359 670,039 653,840 639,540 Interest-bearing transaction accounts 4,369,067 4,399,531 3,862,443 3,701,676 3,495,610 Time deposits 803,421 879,427 781,199 826,831 880,079 Total deposits 8,636,781 8,604,355 7,088,800 6,885,135 6,676,054 Short-term borrowings 130,242 104,633 112,533 108,519 85,325 Other borrowings 218,958 217,983 204,266 162,216 140,162 Total interest-bearing liabilities 6,675,279 6,732,934 5,630,479 5,453,082 5,240,716 Stockholders' equity 1,090,613 1,095,913 822,001 807,956 781,299 Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)For the Quarter Ended (dollars in thousands) June 30,
2022March 31,
2022December 31,
2021September 30,
2021June 30,
2021Average Annualized Yields (Taxable Equivalent Basis) and Costs Assets Loans 4.22 % 3.92 % 3.88 % 4.00 % 3.99 % Taxable investment securities and other 1.81 % 1.60 % 1.60 % 1.68 % 1.72 % Tax-exempt securities 2.02 % 1.91 % 2.20 % 2.15 % 2.50 % Federal funds sold and interest-bearing cash accounts 0.55 % 0.16 % 0.14 % 0.12 % 0.11 % Total interest-earning assets 3.61 % 3.25 % 3.22 % 3.40 % 3.57 % Liabilities Savings accounts 0.18 % 0.17 % 0.05 % 0.05 % 0.05 % Interest-bearing transaction accounts 0.33 % 0.25 % 0.24 % 0.30 % 0.32 % Time deposits 0.39 % 0.40 % 0.51 % 0.55 % 0.61 % Borrowings 2.04 % 1.95 % 1.55 % 2.33 % 2.22 % Total interest-bearing liabilities 0.40 % 0.34 % 0.33 % 0.41 % 0.42 % Net interest spread (taxable equivalent basis) 3.22 % 2.92 % 2.89 % 2.99 % 3.15 % Annualized net interest margin (taxable equivalent basis) 3.38 % 3.02 % 2.98 % 3.10 % 3.27 % Annualized cost of deposits 0.22 % 0.19 % 0.19 % 0.23 % 0.25 % Loan Quality Data Allowance for Credit Losses on Loans Balance at beginning of period $ 67,112 $ 58,047 $ 57,953 $ 60,389 $ 67,252 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 1,583 4,630 (87 ) (2,705 ) (5,314 ) Charge-offs (365 ) (170 ) (461 ) (969 ) (1,862 ) Recoveries 506 162 642 1,238 313 Balance at end of period $ 68,836 $ 67,112 $ 58,047 $ 57,953 $ 60,389 Net Loan Charge-Offs (Recoveries) Non owner occupied commercial $ (4 ) $ 4 $ — $ 6 $ 1,649 Owner occupied commercial (337 ) 24 (1 ) (80 ) (9 ) Multifamily — — — 28 — Non owner occupied residential — (14 ) (136 ) (5 ) (8 ) Commercial, industrial and other 272 778 (449 ) (265 ) 5 Construction — 6,804 (4 ) 50 (42 ) Equipment finance (40 ) 82 60 139 4 Residential mortgages — (48 ) 49 27 (82 ) Consumer and home equity (32 ) 12 300 (169 ) 32 Net (recoveries) charge-offs $ (141 ) $ 7,642 $ (181 ) $ (269 ) $ 1,549 Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)For the Quarter Ended (dollars in thousands) June 30,
2022March 31,
2022December 31,
2021September 30,
2021June 30,
2021Non-Performing Assets (1) Non owner occupied commercial $ 324 $ 5,482 $ 3,009 $ 4,748 $ 11,427 Owner occupied commercial 12,587 2,626 2,810 4,656 7,152 Multifamily — — — — 195 Non owner occupied residential 839 2,430 2,852 922 1,305 Commercial, industrial and other 4,882 6,098 6,763 1,108 1,449 Construction — 220 — — 515 Equipment finance 112 51 43 238 264 Residential mortgages 2,249 1,935 817 123 — Consumer and home equity 1,168 898 687 453 308 Total non-performing assets $ 22,161 $ 19,740 $ 16,981 $ 12,248 $ 22,615 Loans past due 90 days or more and still accruing $ — $ — $ 1 $ — $ — Loans restructured and still accruing $ 3,189 $ 3,290 $ 3,342 $ 3,414 $ 3,295 Ratio of allowance for loan losses to total loans 0.93 % 0.94 % 0.97 % 0.99 % 1.01 % Total non-accrual loans to total loans 0.30 % 0.28 % 0.28 % 0.21 % 0.38 % Total non-performing assets to total assets 0.21 % 0.19 % 0.21 % 0.15 % 0.29 % Annualized net (recoveries) charge-offs to average loans (0.01 )% 0.44 % (0.01 )% (0.02 )% 0.10 % (1) Includes non-accrual purchased credit deteriorated loans.
Lakeland Bancorp, Inc.
Supplemental Information - Non-GAAP Financial Measures
(Unaudited)At or for the Quarter Ended (dollars in thousands, except per share amounts) June 30,
2022March 31,
2022December 31,
2021September 30,
2021June 30,
2021Calculation of Tangible Book Value Per Common Share Total common stockholders' equity at end of period - GAAP $ 1,090,145 $ 1,089,282 $ 827,014 $ 814,128 $ 796,676 Less: Goodwill 271,829 271,829 156,277 156,277 156,277 Less: Other identifiable intangible assets 10,250 10,842 2,420 2,631 2,841 Total tangible common stockholders' equity at end of period - Non-GAAP $ 808,066 $ 806,611 $ 668,317 $ 655,220 $ 637,558 Shares outstanding at end of period 64,794 64,780 50,606 50,602 50,601 Book value per share - GAAP $ 16.82 $ 16.82 $ 16.34 $ 16.09 $ 15.74 Tangible book value per share - Non-GAAP $ 12.47 $ 12.45 $ 13.21 $ 12.95 $ 12.60 Calculation of Tangible Common Equity to Tangible Assets Total tangible common stockholders' equity at end of period - Non-GAAP $ 808,066 $ 806,611 $ 668,317 $ 655,220 $ 637,558 Total assets at end of period - GAAP $ 10,374,178 $ 10,275,233 $ 8,198,056 $ 8,172,479 $ 7,854,238 Less: Goodwill 271,829 271,829 156,277 156,277 156,277 Less: Other identifiable intangible assets 10,250 10,842 2,420 2,631 2,841 Total tangible assets at end of period - Non-GAAP $ 10,092,099 $ 9,992,562 $ 8,039,359 $ 8,013,571 $ 7,695,120 Common equity to assets - GAAP 10.51 % 10.60 % 10.09 % 9.96 % 10.14 % Tangible common equity to tangible assets - Non-GAAP 8.01 % 8.07 % 8.31 % 8.18 % 8.29 % Calculation of Return on Average Tangible Common Equity Net income - GAAP $ 29,117 $ 15,929 $ 22,170 $ 22,289 $ 27,407 Total average common stockholders' equity - GAAP $ 1,090,613 $ 1,095,913 $ 822,001 $ 807,956 $ 781,299 Less: Average goodwill 271,829 265,409 156,277 156,277 156,277 Less: Average other identifiable intangible assets 10,569 10,851 2,544 2,758 2,979 Total average tangible common stockholders' equity - Non-GAAP $ 808,215 $ 819,653 $ 663,180 $ 648,921 $ 622,043 Return on average common stockholders' equity - GAAP 10.71 % 5.89 % 10.70 % 10.94 % 14.07 % Return on average tangible common stockholders' equity - Non-GAAP 14.45 % 7.88 % 13.26 % 13.63 % 17.67 % Calculation of Efficiency Ratio Total noninterest expense $ 45,068 $ 49,959 $ 35,550 $ 37,207 $ 34,097 Less: Amortization of core deposit intangibles 593 596 210 211 221 Merger-related expenses — 4,585 710 1,072 — Long term debt extinguishment costs — — — 831 — Noninterest expense, as adjusted $ 44,475 $ 44,778 $ 34,630 $ 35,093 $ 33,876 Net interest income $ 80,302 $ 70,388 $ 59,029 $ 59,338 $ 59,740 Total noninterest income 7,063 6,780 5,864 5,469 5,269 Total revenue 87,365 77,168 64,893 64,807 65,009 Tax-equivalent adjustment on municipal securities 382 346 213 157 167 Gains on sales of investment securities — — — — 9 Total revenue, as adjusted $ 87,747 $ 77,514 $ 65,106 $ 64,964 $ 65,167 Efficiency ratio - Non-GAAP 50.69 % 57.77 % 53.19 % 54.02 % 51.98 % Lakeland Bancorp, Inc.
Supplemental Information - Non-GAAP Financial Measures
(Unaudited)For the Six Months Ended June 30, (dollars in thousands) 2022 2021 Calculation of Return on Average Tangible Common Equity Net income - GAAP $ 45,046 $ 50,582 Total average common stockholders' equity - GAAP $ 1,093,249 $ 775,808 Less: Average goodwill 268,637 156,277 Less: Average other identifiable intangible assets 10,709 3,085 Total average tangible common stockholders' equity - Non-GAAP $ 813,903 $ 616,446 Return on average common stockholders' equity - GAAP 8.31 % 13.15 % Return on average tangible common stockholders' equity - Non-GAAP 11.16 % 16.55 % Calculation of Efficiency Ratio Total noninterest expense $ 95,027 $ 68,000 Less: Amortization of core deposit intangibles 1,189 447 Merger-related expenses 4,585 — Noninterest expense, as adjusted $ 89,253 $ 67,553 Net interest income $ 150,690 $ 116,468 Noninterest income 13,843 11,028 Total revenue $ 164,533 $ 127,496 Tax-equivalent adjustment on municipal securities 729 330 Less: Gains on sales of investment securities — 9 Total revenue, as adjusted $ 165,262 $ 127,817 Efficiency ratio - Non-GAAP 54.01 % 52.85 %