• Lakeland Bancorp Announces Third Quarter Results

    Source: Nasdaq GlobeNewswire / 26 Oct 2023 07:00:11   America/Chicago

    OAK RIDGE, N.J., Oct. 26, 2023 (GLOBE NEWSWIRE) -- Lakeland Bancorp, Inc. (NASDAQ: LBAI) (the “Company”), the parent company of Lakeland Bank (“Lakeland”), reported net income of $22.2 million and earnings per diluted share ("EPS") of $0.34 for the three months ended September 30, 2023 compared to net income of $28.7 million and diluted EPS of $0.44 for the three months ended September 30, 2022. For the third quarter of 2023, annualized return on average assets was 0.81%, annualized return on average common equity was 7.76% and annualized return on average tangible common equity was 10.29%.

    Thomas Shara, Lakeland Bancorp’s President and CEO, commented on the quarterly financial results, “We are pleased with our continued steady growth during the quarter as we surpassed $11 billion in assets. Loan growth continued to be solid with 2% growth for the quarter and 5% growth year-to-date. The loan growth is diverse across virtually all loan categories for both periods. Deposits grew 2% as well during the quarter and the shift from lower yielding transaction accounts to higher yielding deposit products appears to have slowed. Our asset quality remains pristine with nonperforming loans to total loans dropping to 16 basis points.”

    Regarding the Company’s pending merger with Provident Financial Services, Inc., Mr. Shara added, “We continue to engage in productive discussions with our regulators and look forward to closing our transaction as soon as we receive the required regulatory approvals.”

    Third Quarter 2023 Highlights

    • Loan growth for the third quarter of $192.8 million, or 2.4%, compared to the linked second quarter of 2023, was attributable to expansion across all loan portfolios excluding construction loans.
    • Third quarter 2023 results continue to be impacted by the increasing market rate environment. Net interest margin for the third quarter of 2023 decreased 15 basis points to 2.68% from 2.83% in the prior quarter and decreased 60 basis points from 3.28% in the third quarter of 2022. For more information, please see "Net Interest Margin and Net Interest Income" below.
    • Nonperforming assets decreased 27% to $13.4 million, or 0.12% of total assets, for the third quarter of 2023 compared to $18.4 million in the third quarter of 2022 and $16.1 million in the linked quarter.

    Net Interest Margin and Net Interest Income

    Net interest margin for the three and nine months ended September 30, 2023 declined from previous periods as a result of an increase in the cost of interest-bearing liabilities partially offset by an increase in the yields on interest-earning assets driven by the increase in market interest rates. The increasing rate environment also has resulted in a change in customers' banking behaviors causing them to move funds from lower yielding interest-bearing transaction and savings accounts to higher yielding time deposits.

    Net interest income for the third quarter of 2023 of $68.9 million decreased $11.4 million compared to the third quarter of 2022. Net interest income for the nine months ended September 30, 2023 of $216.4 million decreased $14.6 million from the nine months ended September 30, 2022.

    Net interest margin for the third quarter of 2023 of 2.68% decreased 60 basis points compared to the third quarter of 2022 and decreased 15 basis points compared to the second quarter of 2023. Net interest margin for the nine months ended September 30, 2023 decreased 38 basis points to 2.85% from the same period last year.

    The yield on interest-earning assets for the third quarter of 2023 increased 96 basis points to 4.86% as compared to 3.90% for the third quarter of 2022 and increased 15 basis points as compared to 4.71% for the second quarter of 2023. For the nine months ended September 30, 2023, the yield on average assets was 4.71% compared to 3.58% for the same period last year.

    The cost of interest-bearing liabilities for the third quarter of 2023 was 2.96% compared to 0.94% for the third quarter of 2022 and 2.59% for the second quarter of 2023. For the nine months ended September 30, 2023, the cost of interest-bearing liabilities was 2.56% compared to 0.56% for the same period last year.

    Noninterest Income

    For the third quarter of 2023, noninterest income totaled $5.4 million, a decrease of $1.8 million as compared to the third quarter of 2022. Service charges on deposit accounts declined $812,000 from the third quarter of 2022 to the same period in 2023 resulting from a decline in interchange income due to the impact of the Durbin Amendment which became effective for Lakeland in the third quarter of 2023. One of the provisions of the Durbin Amendment is reduced interchange income for banks over $10 billion in assets. Commissions and fees decreased $481,000 driven primarily by decreases in loan fee income and investment services income. Partially offsetting these unfavorable variances was a decline in losses on equity securities which totaled $294,000 in the third quarter of 2023 compared to losses of $464,000 in the third quarter of 2022.

    For the nine months ended September 30, 2023, noninterest income totaled $18.4 million, a decrease of $2.7 million as compared to the nine months ended September 30, 2022. Gains on sales of loans decreased $1.5 million compared to the nine months ended September 30, 2022 due primarily to lower sale volume. Commissions and fees decreased $1.4 million driven primarily by a decrease in loan fees and investment services income. Partially offsetting these unfavorable variances were losses on equity securities of $281,000 in the nine months ended September 30, 2023 compared to losses of $1.3 million in the nine months ended September 30, 2022. Service charges on deposit accounts decreased $516,000 from the nine months ended September 30, 2022 for the same reason discussed in the quarterly comparison.

    Noninterest Expense

    Noninterest expense for the third quarter of 2023 of $44.4 million decreased $3.4 million compared to the third quarter of 2022. Merger-related expenses declined from $3.5 million from the third quarter of 2022 to $198,000 for the third quarter of 2023 due to the timing of expenses incurred. Other operating expenses in the third quarter of 2023 decreased $1.2 million compared to the same period in 2022 due primarily to decreased marketing expense, consulting fees, appraisal expenses and other expenses. Compensation and employee benefits decreased $480,000 from the third quarter of 2022 to the third quarter of 2023 as a result of a decline in headcount related to the anticipated merger with Provident Financial Services, Inc. FDIC insurance expense increased $664,000 due to an increase in the 2023 assessment rate related to Lakeland's asset size exceeding $10 billion.

    Noninterest expense for the nine months ended September 30, 2023 of $140.0 million decreased $2.9 million compared to the nine months ended September 30, 2022. The decrease in noninterest expense was primarily due to decreases in merger-related expenses which totaled $735,000 in the nine months ended September 30, 2023 compared to $8.1 million during the nine months ended September 30, 2022. Merger-related expenses during the current year are as a result of the anticipated merger with Provident Financial, while expenses in the nine months ended September 30, 2022 related both to the anticipated merger with Provident Financial, as well as the acquisition of 1st Constitution Bancorp. Other operating expenses decreased from $23.3 million for the nine months ended September 30, 2022 to $21.9 million for nine months ended September 30, 2023 for the same reasons discussed in the quarterly comparison. Offsetting these decreases in expense were increases in compensation and employee benefits which increased $2.5 million resulting primarily from increased commissions, bonus expense and normal merit increases. FDIC expense increased for nine months ended September 30, 2023 compared to the same period in the prior year for the same reason referred to above in the quarterly comparison.

    Income Tax Expense

    The effective tax rate for the third quarter of 2023 was 22.5% compared to 25.0% for the third quarter of 2022. The decreased effective tax rate for the third quarter of 2023 was primarily a result of tax advantaged items increasing as a percentage of pretax income. The effective tax rate for the nine months ended September 30, 2023 was 22.7% compared to 24.7% for the nine months ended September 30, 2022. The decreased effective tax rate for the first nine months of 2023 was primarily for the same reason discussed in the quarterly comparison.

    Financial Condition

    At September 30, 2023, total assets were $11.18 billion, an increase of $393.0 million, compared to December 31, 2022. As of September 30, 2023, total loans increased $428.0 million to $8.29 billion while investment securities decreased $176.4 million to $1.86 billion from December 31, 2022. On the funding side, total deposits increased $35.0 million from December 31, 2022, to $8.60 billion at September 30, 2023. During the first nine months of 2023, transaction and savings accounts decreased $639.7 million while time deposits increased $674.8 million. At September 30, 2023, total loans as a percent of total deposits was 96.4%. As of September 30, 2023, the Bank had on-balance sheet liquidity and funding capacity that represented 112% of uninsured and uncollateralized deposits. Borrowings increased $300.3 million from December 31, 2022 to September 30, 2023, to fund loan growth.

    Asset Quality

    At September 30, 2023, non-performing assets totaled $13.4 million or 0.12% of total assets compared to $18.4 million, or 0.17% of total assets at September 30, 2022. Non-accrual loans as a percent of total loans was 0.16% at September 30, 2023, compared to 0.24% at September 30, 2022. The decrease in non-accrual loans resulted primarily from payoffs of non-accrual loans and an improvement in asset quality. The allowance for credit losses on loans totaled $75.2 million, 0.91% of total loans, at September 30, 2023, compared to $68.9 million, 0.91% of total loans, at September 30, 2022. In the third quarter of 2023, the Company had net charge-offs of $133,000 or 0.01% of average loans compared to net recoveries of $32,000 or 0.00% of average loans on an annualized basis for the same period in 2022.

    The provision for credit losses for the third quarter of 2023 was $1.3 million compared to $1.4 million in the third quarter of 2022. The provision for the third quarter of 2023 is comprised of a provision for credit losses on loans of $1.3 million and a benefit for off-balance-sheet exposures of $65,000.

    Capital

    At September 30, 2023, stockholders' equity was $1.14 billion compared to $1.11 billion at December 31, 2022, a 2% increase, resulting primarily from net income, partially offset by the payment of dividends. Lakeland Bank remains above FDIC “well capitalized” standards, with a Tier 1 leverage ratio of 9.24% at September 30, 2023. The book value per common share increased 5% to $17.46 at September 30, 2023 compared to $16.70 at September 30, 2022. Tangible book value per common share was $13.17 and $12.36 at September 30, 2023 and 2022, respectively (see "Supplemental Information - Non-GAAP Financial Measures" for a reconciliation of non-GAAP financial measures, including tangible book value). At September 30, 2023, the Company’s common equity to assets ratio and tangible common equity to tangible assets ratio were 10.16% and 7.86%, respectively, compared to 10.29% and 7.83% at September 30, 2022. On October 24, 2023, the Company declared a quarterly cash dividend of $0.145 per share to be paid on November 16, 2023, to shareholders of record as of November 6, 2023.

    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, 2022, 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 levels of market interest rates, which may affect demand for our products and the value of our financial instruments; pricing pressures on loan and deposit products; changes in the financial services industry and the U.S. and global capital markets; inflation and other 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; credit risks of the Company’s lending and leasing activities; the effects of the recent turmoil in the banking industry (including the failures of three financial institutions); successful implementation, deployment and upgrades of new and existing technology, systems, services and products; customers’ acceptance of the Company’s products and services; competition; 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; and expenses related to our proposed merger with Provident Financial, unexpected delays related to the merger, inability to obtain regulatory approvals or satisfy other closing conditions required to complete the merger, and failure to realize anticipated efficiencies and synergies from the merger. 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" and "Supplemental Information – Reconciliation of Net Income" 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 $11.18 billion in total assets at September 30, 2023. 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 fifth 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 call 973-697-6140 for more information.

    Thomas J. SharaThomas F. Splaine
    President & CEOEVP & CFO


    Lakeland Bancorp, Inc.
    Financial Highlights
    (Unaudited)
     
     Three Months Ended
    September 30,    		 Nine Months Ended
    September 30,
    (dollars in thousands, except per share amounts)2023 2022 2023 2022
    Income Statement       
    Net interest income$68,906  $80,285  $216,373  $230,975 
    Provision for credit losses (1,262)  (1,358)  (11,102)  (11,274)
    Gains on sales of loans 349   355   1,008   2,496 
    (Loss) gain on equity securities (294)  (464)  (281)  (1,313)
    Other noninterest income 5,363   7,342   17,625   19,893 
    Merger-related expenses (198)  (3,488)  (735)  (8,073)
    Other noninterest expense (44,170)  (44,323)  (139,246)  (134,765)
    Pretax income 28,694   38,349   83,642   97,939 
    Provision for income taxes (6,455)  (9,603)  (18,970)  (24,147)
    Net income$22,239  $28,746  $64,672  $73,792 
            
    Basic earnings per common share$0.34  $0.44  $0.98  $1.13 
    Diluted earnings per common share$0.34  $0.44  $0.98  $1.13 
    Dividends paid per common share$0.145  $0.145  $0.435  $0.425 
    Weighted average shares - basic 65,064   64,842   65,030   64,547 
    Weighted average shares - diluted 65,222   65,061   65,210   64,755 
            
    Selected Operating Ratios       
    Annualized return on average assets 0.81%  1.10%  0.80%  0.96%
    Annualized return on average common equity 7.76%  10.33%  7.66%  8.99%
    Annualized return on average tangible common equity (1) 10.29%  13.87%  10.18%  12.08%
    Annualized yield on interest-earning assets 4.86%  3.90%  4.71%  3.58%
    Annualized cost of interest-bearing liabilities 2.96%  0.94%  2.56%  0.56%
    Annualized net interest spread 1.90%  2.96%  2.15%  3.02%
    Annualized net interest margin 2.68%  3.28%  2.85%  3.23%
    Efficiency ratio (1) 58.43%  49.76%  58.36%  52.53%
    Stockholders' equity to total assets     10.16%  10.29%
    Book value per common share    $17.46  $16.70 
    Tangible book value per common share (1)    $13.17  $12.36 
    Tangible common equity to tangible assets (1)     7.86%  7.83%
            
    Asset Quality Ratios    September 30,
    2023    		 September 30,
    2022
    Ratio of allowance for credit losses to total loans     0.91%  0.91%
    Non-performing loans to total loans     0.16%  0.24%
    Non-performing assets to total assets     0.12%  0.17%
    Annualized net charge-offs to average loans     0.00%  0.14%
            
    (1) See Supplemental Information - Non-GAAP Financial Measures      


     
    Lakeland Bancorp, Inc.
    Financial Highlights
    (Unaudited)
     
    (dollars in thousands)    September 30,
    2023    		 September 30,
    2022
    Selected Balance Sheet Data at Period End      
    Loans    $8,294,057  $7,568,826 
    Allowance for credit losses     75,159   68,879 
    Investment securities     1,860,996   2,047,186 
    Total assets     11,176,809   10,515,599 
    Total deposits     8,602,503   8,677,799 
    Short-term borrowings     728,769   357,787 
    Other borrowings     519,596   219,148 
    Stockholders' equity     1,135,627   1,082,406 
            
     Three Months Ended September 30, Nine Months Ended September 30,
     2023 2022 2023 2022
    Selected Average Balance Sheet Data       
    Loans$8,167,362  $7,517,878  $8,023,336  $7,257,990 
    Investment securities 2,013,153   2,160,719   2,065,720   2,123,350 
    Interest-earning assets 10,276,375   9,755,797   10,194,631   9,617,082 
    Total assets 10,875,553   10,358,600   10,794,854   10,230,532 
    Noninterest-bearing demand deposits 1,871,516   2,325,391   1,948,503   2,277,192 
    Savings deposits 759,232   1,092,222   839,000   1,125,580 
    Interest-bearing transaction accounts 4,103,217   4,337,559   4,111,262   4,368,492 
    Time deposits 1,856,266   905,735   1,656,678   862,958 
    Total deposits 8,590,231   8,660,907   8,555,443   8,634,222 
    Short-term borrowings 744,582   240,728   725,686   159,033 
    Other borrowings 232,573   219,082   223,818   218,679 
    Total interest-bearing liabilities 7,695,870   6,795,326   7,556,444   6,734,742 
    Stockholders' equity 1,137,387   1,104,145   1,129,498   1,096,921 


     
     Lakeland Bancorp, Inc. and Subsidiaries
    Consolidated Statements of Income (Unaudited)
     
      For the Three Months Ended
    September 30,    		 For the Nine Months Ended
    September 30,
    (in thousands, except per share data) 2023 2022 2023 2022
    Interest Income        
    Loans and fees $111,618  $84,924  $317,360  $229,706 
    Federal funds sold and interest-bearing deposits with banks  1,307   429   4,016   846 
    Taxable investment securities and other  12,078   9,589   35,571   24,583 
    Tax-exempt investment securities  1,536   1,485   4,765   4,229 
    Total Interest Income  126,539   96,427   361,712   259,364 
    Interest Expense        
    Deposits  45,058   13,618   110,920   22,486 
    Federal funds purchased and securities sold under agreements to repurchase  10,186   717   27,773   887 
    Other borrowings  2,389   1,807   6,646   5,016 
    Total Interest Expense  57,633   16,142   145,339   28,389 
    Net Interest Income  68,906   80,285   216,373   230,975 
    Provision for credit losses  1,262   1,358   11,102   11,274 
    Net Interest Income after Provision for Credit Losses  67,644   78,927   205,271   219,701 
    Noninterest Income        
    Service charges on deposit accounts  1,996   2,808   7,629   8,145 
    Commissions and fees  1,731   2,212   5,519   6,873 
    Income on bank owned life insurance  816   1,468   2,613   3,118 
    Loss on equity securities  (294)  (464)  (281)  (1,313)
    Gains on sales of loans  349   355   1,008   2,496 
    Swap income  697   711   1,114   1,110 
    Other income  123   143   750   647 
    Total Noninterest Income  5,418   7,233   18,352   21,076 
    Noninterest Expense        
    Compensation and employee benefits  26,156   26,636   83,737   81,253 
    Premises and equipment  7,888   7,574   23,857   23,225 
    FDIC insurance  1,354   690   3,944   2,034 
    Data processing  1,932   1,419   5,819   4,980 
    Merger-related expenses  198   3,488   735   8,073 
    Other operating expenses  6,840   8,004   21,889   23,273 
    Total Noninterest Expense  44,368   47,811   139,981   142,838 
    Income before provision for income taxes  28,694   38,349   83,642   97,939 
    Provision for income taxes  6,455   9,603   18,970   24,147 
    Net Income $22,239  $28,746  $64,672  $73,792 
    Per Share of Common Stock      
    Basic earnings $0.34  $0.44  $0.98  $1.13 
    Diluted earnings $0.34  $0.44  $0.98  $1.13 
    Dividends $0.145  $0.145  $0.435  $0.425 


     
    Lakeland Bancorp, Inc. and Subsidiaries
    Consolidated Balance Sheets
     
    (dollars in thousands)September 30, 2023 December 31, 2022
     (Unaudited)  
    Assets   
    Cash$327,616  $223,299 
    Interest-bearing deposits due from banks 26,209   12,651 
    Total cash and cash equivalents 353,825   235,950 
    Investment securities available for sale, at estimated fair value (allowance for credit losses of $0 at September 30, 2023 and $310 at December 31, 2022) 942,510   1,054,312 
    Investment securities held to maturity (estimated fair value of $656,725 at September 30, 2023 and $760,455 at December 31, 2022, allowance for credit losses of $146 at September 30, 2023 and $107 at December 31, 2022) 847,699   923,308 
    Equity securities, at fair value 17,207   17,283 
    Federal Home Loan Bank and other membership stocks, at cost 53,580   42,483 
    Loans held for sale 1,251   536 
    Loans, net of deferred fees 8,294,057   7,866,050 
    Less: Allowance for credit losses 75,159   70,264 
    Net loans 8,218,898   7,795,786 
    Premises and equipment, net 53,993   55,429 
    Operating lease right-of-use assets 17,475   20,052 
    Accrued interest receivable 36,612   33,374 
    Goodwill 271,829   271,829 
    Other identifiable intangible assets 7,559   9,088 
    Bank owned life insurance 159,009   156,985 
    Other assets 195,362   167,425 
    Total Assets$11,176,809  $10,783,840 
    Liabilities and Stockholders' Equity   
    Liabilities   
    Deposits:   
    Noninterest-bearing$1,857,324  $2,113,289 
    Savings and interest-bearing transaction accounts 4,862,246   5,246,005 
    Time deposits $250 thousand and under 1,401,588   901,505 
    Time deposits over $250 thousand 481,345   306,672 
    Total deposits 8,602,503   8,567,471 
    Federal funds purchased and securities sold under agreements to repurchase 728,769   728,797 
    Other borrowings 325,000   25,000 
    Subordinated debentures 194,596   194,264 
    Operating lease liabilities 18,618   21,449 
    Other liabilities 171,696   138,272 
    Total Liabilities 10,041,182   9,675,253 
    Stockholders' Equity   
    Common stock, no par value; authorized 100,000,000 shares; issued 65,161,310 shares and outstanding 65,030,275 shares at September 30, 2023 and issued 65,002,738 shares and outstanding 64,871,703 shares at December 31, 2022 857,707   855,425 
    Retained earnings 365,498   329,375 
    Treasury shares, at cost, 131,035 shares at September 30, 2023 and December 31, 2022 (1,452)  (1,452)
    Accumulated other comprehensive loss (86,126)  (74,761)
    Total Stockholders' Equity 1,135,627   1,108,587 
    Total Liabilities and Stockholders' Equity$11,176,809  $10,783,840 


     
    Lakeland Bancorp, Inc.
    Financial Highlights
    (Unaudited)
     
      For the Quarter Ended
    (dollars in thousands, except per share data) September 30,
    2023    		 June 30,
    2023    		 March 31,
    2023    		 December 31,
    2022    		 September 30,
    2022
    Income Statement          
    Net interest income $68,906  $71,542  $75,925  $81,640  $80,285 
    (Provision) benefit for credit losses  (1,262)  (1,947)  (7,893)  2,760   (1,358)
    Gains on sales of loans  349   229   430   269   355 
    Gains (loss) on equity securities  (294)  (135)  148   11   (464)
    Other noninterest income  5,363   6,575   5,687   6,743   7,342 
    Merger-related expenses  (198)  (242)  (295)  (533)  (3,488)
    Other noninterest expense  (44,170)  (46,766)  (48,310)  (44,837)  (44,323)
    Pretax income  28,694   29,256   25,692   46,053   38,349 
    Provision for income taxes  (6,455)  (6,628)  (5,887)  (12,476)  (9,603)
    Net income $22,239  $22,628  $19,805  $33,577  $28,746 
               
    Basic earnings per common share $0.34  $0.34  $0.30  $0.51  $0.44 
    Diluted earnings per common share $0.34  $0.34  $0.30  $0.51  $0.44 
    Dividends paid per common share $0.145  $0.145  $0.145  $0.145  $0.145 
    Dividends paid $9,521  $9,529  $9,500  $9,505  $9,506 
    Weighted average shares - basic  65,064   65,059   64,966   64,854   64,842 
    Weighted average shares - diluted  65,222   65,173   65,228   65,222   65,061 
               
    Selected Operating Ratios          
    Annualized return on average assets  0.81%  0.84%  0.75%  1.26%  1.10%
    Annualized return on average common equity  7.76%  8.03%  7.17%  12.19%  10.33%
    Annualized return on average tangible common equity (1)  10.29%  10.67%  9.57%  16.42%  13.87%
    Annualized net interest margin  2.68%  2.83%  3.07%  3.28%  3.28%
    Efficiency ratio (1)  58.43%  58.82%  57.84%  49.67%  49.76%
    Common stockholders' equity to total assets  10.16%  10.38%  10.40%  10.28%  10.29%
    Tangible common equity to tangible assets (1)  7.86%  8.02%  8.02%  7.88%  7.83%
    Tier 1 risk-based ratio  11.31%  11.43%  11.33%  11.24%  11.16%
    Total risk-based ratio  13.87%  14.03%  13.93%  13.83%  13.78%
    Tier 1 leverage ratio  9.24%  9.17%  9.13%  9.16%  9.10%
    Common equity tier 1 capital ratio  10.80%  10.90%  10.81%  10.71%  10.62%
    Book value per common share $17.46  $17.40  $17.33  $17.09  $16.70 
    Tangible book value per common share (1) $13.17  $13.10  $13.01  $12.76  $12.36 
     
    (1) See Supplemental Information - Non-GAAP Financial Measures


     
    Lakeland Bancorp, Inc.
    Financial Highlights
    (Unaudited)
     
      For the Quarter Ended
    (dollars in thousands) September 30,
    2023    		 June 30,
    2023    		 March 31,
    2023    		 December 31,
    2022    		 September 30,
    2022
    Selected Balance Sheet Data at Period End        
    Loans $8,294,057  $8,101,287  $7,952,553  $7,866,050  $7,568,826 
    Allowance for credit losses on loans  75,159   73,965   71,403   70,264   68,879 
    Investment securities  1,860,996   1,938,611   1,994,927   2,037,386   2,047,186 
    Total assets  11,176,809   10,897,966   10,837,241   10,783,840   10,515,599 
    Total deposits  8,602,503   8,444,681   8,536,943   8,567,471   8,677,799 
    Short-term borrowings  728,769   938,718   813,328   728,797   357,787 
    Other borrowings  519,596   219,486   219,376   219,264   219,148 
    Stockholders' equity  1,135,627   1,131,702   1,126,580   1,108,587   1,082,406 
               
    Loans          
    Non-owner occupied commercial $2,980,811  $2,991,124  $2,943,897  $2,906,014  $2,873,824 
    Owner occupied commercial  1,299,977   1,201,049   1,205,635   1,246,189   1,141,290 
    Multifamily  1,361,628   1,314,255   1,275,771   1,260,814   1,186,036 
    Non-owner occupied residential  208,560   205,818   210,203   218,026   222,597 
    Commercial, industrial and other  632,531   594,401   562,287   606,276   612,494 
    Paycheck Protection Program  388   389   390   435   734 
    Construction  333,998   354,918   404,994   380,100   381,109 
    Equipment financing  174,946   173,469   161,889   151,575   137,999 
    Residential mortgages  956,535   922,109   857,427   765,552   690,453 
    Consumer and home equity  344,683   343,755   330,060   331,069   322,290 
    Total loans $8,294,057  $8,101,287  $7,952,553  $7,866,050  $7,568,826 
               
    Deposits          
    Noninterest-bearing $1,857,324  $1,866,252  $1,998,590  $2,113,289  $2,288,902 
    Savings and interest-bearing transaction accounts  4,862,246   4,775,184   4,918,041   5,246,005   5,354,716 
    Time deposits  1,882,933   1,803,245   1,620,312   1,208,177   1,034,181 
    Total deposits $8,602,503  $8,444,681  $8,536,943  $8,567,471  $8,677,799 
               
    Total loans to total deposits ratio  96.4%  95.9%  93.2%  91.8%  87.2%
               
    Selected Average Balance Sheet Data          
    Loans $8,167,362  $7,999.285  $7,900.426  $7,729,510  $7,517,878 
    Investment securities  2,013,153   2,068.073   2,117.076   2,145,252   2,160,719 
    Interest-earning assets  10,276,375   10,214.142   10,091.341   9,923,173   9,755,797 
    Total assets  10,875,553   10,808.261   10,698.807   10,534,884   10,358,600 
    Noninterest-bearing demand deposits  1,871,516   1,935,778   2,040,070   2,240,197   2,325,391 
    Savings deposits  759,232   830.836   928.796   1,001,870   1,092,222 
    Interest-bearing transaction accounts  4,103,217   4,007.867   4,224.024   4,389,672   4,337,559 
    Time deposits  1,856,266   1,722.935   1,385.661   1,100,911   905,735 
    Total deposits  8,590,231   8,497.414   8,578.551   8,732,650   8,660,907 
    Short-term borrowings  744,582   813.471   617.611   311,875   240,728 
    Other borrowings  232,573   219.425   219.308   219,202   219,082 
    Total interest-bearing liabilities  7,695,870   7,594,534   7,375,400   7,023,530   6,795,326 
    Stockholders' equity  1,137,387   1,130.563   1,120.356   1,092,720   1,104,145 


     
    Lakeland Bancorp, Inc.
    Financial Highlights
    (Unaudited)
     
      For the Quarter Ended
    (dollars in thousands) September 30,
    2023    		 June 30,
    2023    		 March 31,
    2023    		 December 31,
    2022    		 September 30,
    2022
    Average Annualized Yields (Taxable Equivalent Basis) and Costs      
    Assets          
    Loans  5.42%  5.22%  5.10%  4.84%  4.43%
    Taxable investment securities and other  2.84%  2.74%  2.61%  2.41%  2.12%
    Tax-exempt securities  2.49%  2.45%  2.41%  2.36%  2.12%
    Federal funds sold and interest-bearing cash accounts  5.41%  5.41%  4.00%  3.68%  2.21%
    Total interest-earning assets  4.86%  4.71%  4.56%  4.31%  3.90%
    Liabilities          
    Savings accounts  0.24%  0.26%  0.28%  0.29%  0.25%
    Interest-bearing transaction accounts  2.60%  2.16%  1.85%  1.46%  0.97%
    Time deposits  3.78%  3.39%  2.71%  1.77%  1.00%
    Borrowings  5.04%  4.80%  4.46%  3.52%  2.15%
    Total interest-bearing liabilities  2.96%  2.59%  2.11%  1.50%  0.94%
    Net interest spread (taxable equivalent basis)  1.90%  2.12%  2.45%  2.81%  2.96%
    Annualized net interest margin (taxable equivalent basis)  2.68%  2.83%  3.07%  3.28%  3.28%
    Annualized cost of deposits  2.08%  1.73%  1.38%  0.99%  0.62%
    Loan Quality Data          
    Allowance for Credit Losses on Loans          
    Balance at beginning of period $73,965  $71,403  $70,264  $68,879  $68,836 
    Provision for credit losses on loans  1,327   2,422   1,213   1,464   11 
    Charge-offs  (217)  (148)  (139)  (138)  (56)
    Recoveries  84   288   65   59   88 
    Balance at end of period $75,159  $73,965  $71,403  $70,264  $68,879 
               
    Net Loan Charge-Offs (Recoveries)          
    Non owner occupied commercial $—  $—  $—  $—  $— 
    Owner occupied commercial  —   (6)  —   —   — 
    Non owner occupied residential  —   —   —   —   — 
    Commercial, industrial and other  —   (163)  (35)  (24)  (49)
    Construction  —   13   —   —   — 
    Equipment finance  136   12   46   51   (23)
    Residential mortgages  —   —   —   —   — 
    Consumer and home equity  (3)  4   63   52   40 
    Net charge-offs (recoveries) $133  $(140) $74  $79  $(32)


     
    Lakeland Bancorp, Inc.
    Financial Highlights
    (Unaudited)
     
      For the Quarter Ended
    (dollars in thousands) September 30,
    2023    		 June 30,
    2023    		 March 31,
    2023    		 December 31,
    2022    		 September 30,
    2022
    Non-Performing Assets (1)          
    Non owner occupied commercial $798  $864  $908  $618  $307 
    Owner occupied commercial  7,026   8,076   8,757   9,439   10,322 
    Multifamily  1,106   266   584   —   — 
    Non owner occupied residential  —   41   —   441   868 
    Commercial, industrial and other  217   1,737   2,221   2,978   3,623 
    Construction  —   —   980   980   — 
    Equipment finance  626   644   379   114   226 
    Residential mortgages  2,319   1,954   1,918   2,011   2,226 
    Consumer and home equity  1,331   2,486   1,131   781   798 
    Total non-accrual loans  13,423   16,068   16,878   17,362   18,370 
    Total non-performing assets $13,423  $16,068  $16,878  $17,362  $18,370 
               
    Loans past due 90 days or more and still accruing $—  $—  $—  $—  $31 
    Loans restructured and still accruing $—  $—  $—  $2,640  $3,113 
    Ratio of allowance for loan losses to total loans  0.91%  0.91%  0.90%  0.89%  0.91%
    Total non-accrual loans to total loans  0.16%  0.20%  0.21%  0.22%  0.24%
    Total non-performing assets to total assets  0.12%  0.15%  0.16%  0.16%  0.17%
    Annualized net (recoveries) charge-offs to average loans  0.01% (0.01)%  —%  —%  —%
                       
    (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) September 30,
    2023    		 June 30,
    2023    		 March 31,
    2023    		 December 31,
    2022    		 September 30,
    2022
    Calculation of Tangible Book Value Per Common Share        
    Total common stockholders' equity at end of period - GAAP $1,135,627  $1,131,702  $1,126,580  $1,108,587  $1,082,406 
    Less: Goodwill  271,829   271,829   271,829   271,829   271,829 
    Less: Other identifiable intangible assets  7,559   8,060   8,572   9,088   9,669 
    Total tangible common stockholders' equity at end of period - Non-GAAP $856,239  $851,813  $846,179  $827,670  $800,908 
    Shares outstanding at end of period  65,030   65,028   65,017   64,872   64,804 
    Book value per share - GAAP $17.46  $17.40  $17.33  $17.09  $16.70 
    Tangible book value per share - Non-GAAP $13.17  $13.10  $13.01  $12.76  $12.36 
    Calculation of Tangible Common Equity to Tangible Assets      
    Total tangible common stockholders' equity at end of period - Non-GAAP $856,239  $851,813  $846,179  $827,670  $800,908 
    Total assets at end of period - GAAP $11,176,809  $10,897,966  $10,837,241  $10,783,840  $10,515,599 
    Less: Goodwill  271,829   271,829   271,829   271,829   271,829 
    Less: Other identifiable intangible assets  7,559   8,060   8,572   9,088   9,669 
    Total tangible assets at end of period - Non-GAAP $10,897,421  $10,618,077  $10,556,840  $10,502,923  $10,234,101 
    Common equity to assets - GAAP  10.16%  10.38%  10.40%  10.28%  10.29%
    Tangible common equity to tangible assets - Non-GAAP  7.86%  8.02%  8.02%  7.88%  7.83%
    Calculation of Return on Average Tangible Common Equity      
    Net income - GAAP $22,239  $22,628  $19,805  $33,577  $28,746 
    Total average common stockholders' equity - GAAP $1,137,387  $1,130,563  $1,120,356  $1,092,720  $1,104,145 
    Less: Average goodwill  271,829   271,829   271,829   271,829   271,829 
    Less: Average other identifiable intangible assets  7,887   8,353   8,904   9,386   9,982 
    Total average tangible common stockholders' equity - Non-GAAP $857,671  $850,381  $839,623  $811,505  $822,334 
    Return on average common stockholders' equity - GAAP  7.76%  8.03%  7.17%  12.19%  10.33%
    Return on average tangible common stockholders' equity - Non-GAAP  10.29%  10.67%  9.57%  16.42%  13.87%
    Calculation of Efficiency Ratio          
    Total noninterest expense $44,368  $47,008  $48,605  $45,370  $47,811 
    Less:          
    Amortization of core deposit intangibles  501   512   516   581   581 
    Merger-related expenses  198   242   295   533   3,488 
    Noninterest expense, as adjusted $43,669  $46,254  $47,794  $44,256  $43,742 
    Net interest income $68,906  $71,542  $75,925  $81,640  $80,285 
    Total noninterest income  5,418   6,669   6,265   7,023   7,233 
    Total revenue  74,324   78,211   82,190   88,663   87,518 
    Tax-equivalent adjustment on municipal securities  408   422   436   443   395 
    Total revenue, as adjusted $74,732  $78,633  $82,626  $89,106  $87,913 
    Efficiency ratio - Non-GAAP  58.43%  58.82%  57.84%  49.67%  49.76%


     
    Lakeland Bancorp, Inc.
    Supplemental Information - Non-GAAP Financial Measures
    (Unaudited)
     
     For the Nine Months Ended September 30,
    (dollars in thousands)2023 2022
    Calculation of Return on Average Tangible Common Equity   
    Net income - GAAP$64,672  $73,792 
        
    Total average common stockholders' equity - GAAP$1,129,498  $1,096,936 
    Less: Average goodwill 271,829   269,713 
    Less: Average other identifiable intangible assets 8,378   10,464 
    Total average tangible common stockholders' equity - Non-GAAP$849,291  $816,759 
    Return on average common stockholders' equity - GAAP 7.66%  8.99%
    Return on average tangible common stockholders' equity - Non-GAAP 10.18%  12.08%
        
    Calculation of Efficiency Ratio   
    Total noninterest expense$139,981  $142,838 
    Less:   
    Amortization of core deposit intangibles 1,529   1,770 
    Merger-related expenses 735   8,073 
    Long term debt extinguishment costs —   — 
    Noninterest expense, as adjusted$137,717  $132,995 
    Net interest income$216,373  $230,975 
    Noninterest income 18,352   21,076 
    Total revenue$234,725  $252,051 
    Tax-equivalent adjustment on municipal securities 1,267   1,124 
    Less: Gains on sales of investment securities —   — 
    Total revenue, as adjusted$235,992  $253,175 
    Efficiency ratio - Non-GAAP 58.36%  52.53%

     


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