Lakeland Bancorp Announces First Quarter Results and
Lakeland Bancorp Announces First Quarter Results and

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 %

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