Lakeland Bancorp Announces Quarterly and Year-End 2021 Earnings

OAK RIDGE, N.J., Jan. 26, 2022 (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 $0.43 for the three months ended December 31, 2021, compared to net income of $18.8 million and diluted EPS of $0.37 for the fourth quarter of 2020. For the fourth quarter of 2021, annualized return on average assets was 1.06%, annualized return on average common equity was 10.70% and annualized return on average tangible common equity was 13.26%.

For the year ended December 31, 2021, the Company reported net income of $95.0 million, a 65% increase compared to $57.5 million for the same period in 2020, resulting in return on average assets of 1.19%, return on average common equity of 11.95%, and return on average tangible common equity of 14.93%. For 2021, the Company reported diluted EPS of $1.85, compared to diluted EPS of $1.13 for 2020.

The current year results were favorably impacted by negative provisions for credit losses of $10.9 million compared to provisions of $27.2 million for 2020 as forecasted macroeconomic conditions have improved and Lakeland's asset quality continues to be strong. Fourth quarter 2021 results were favorably impacted by a $3.9 million increase in net interest income and a $1.4 million reduction in non-interest expenses compared to the fourth quarter of 2020.

Thomas Shara, Lakeland Bancorp's President and CEO commented, "We ended 2021 with strong quarterly and annual earnings. We experienced total asset growth of 7%, deposit growth of 8% and non-performing assets declined by 60% during 2021. With the acquisition of 1st Constitution Bancorp on January 6, 2022, we expanded Lakeland's presence into central New Jersey and look forward to bringing our banking model into the desirable markets of Mercer, Middlesex and Monmouth counties. Full systems integration is progressing well and is expected to be completed in February 2021."

Full Year 2021 Highlights

  • Total asset growth of 7% to $8.20 billion at December 31, 2021.
  • Deposit generation of 8% or $510.0 million, including 15% growth in noninterest-bearing deposits.
  • In September 2021, the Company issued $150.0 million Fixed-to-Floating Rate Subordinated Notes at a fixed rate of 2.875% per annum until September 2026 when the interest rate will reset to the three-month Secured Overnight Financing Rate plus a spread of 220 basis points, and redeemed $75.0 million of its outstanding 5.125% Fixed-to-Floating Rate Subordinated Notes.
  • Net interest margin for 2021 increased four basis points to 3.13% compared to 2020 due primarily to a reduction in the cost of interest-bearing liabilities.
  • Non-performing assets declined to $17.0 million at December 31, 2021 compared to $42.8 million at December 31, 2020.
  • Paycheck Protection Program ("PPP") loans outstanding totaled $56.6 million at December 31, 2021 compared to $284.6 million at December 31, 2020. Unamortized net deferred fees on PPP loans totaled $1.6 million at December 31, 2021 compared to $5.8 million at December 31, 2020.
  • Net loan charge-offs for the year totaled $2.2 million, or 0.04% of average loans.

Net Interest Margin and Net Interest Income

Net interest margin for the fourth quarter of 2021 of 2.98% decreased 10 basis points compared to the fourth quarter of 2020 and decreased 12 basis points compared to the third quarter of 2021. The decrease compared to the fourth quarter of 2020 was primarily a result of a decrease in the yield on loans and securities as well as an increase in lower yielding federal funds sold. The decrease in net interest margin compared to the third quarter of 2021 was due primarily to a decrease in the yield on loans and an increase in lower yielding average securities balances. Net interest margin for 2021 of 3.13% increased four basis points compared to 3.09% for 2020 due primarily to a reduction in the cost of interest-bearing liabilities.

The yield on interest-earning assets for the fourth quarter of 2021 was 3.22% compared to 3.51% for the fourth quarter of 2020 and 3.40% for the third quarter of 2021. The decrease in yield on interest-earning assets when compared to the fourth quarter 2020 was due primarily to a reduction in the yield on loans and securities as well as increased balances in lower yielding average federal funds sold. The decrease in yield on interest-earning assets when compared to the third quarter of 2021 was due primarily to a reduction in the yield on loans and increased balances in lower yielding average securities. The yield on interest-earning assets for 2021 was 3.43% compared to 3.70% for 2020 resulting primarily from a reduction in the yield on interest earning assets and increased balances in lower yielding average federal funds sold as a result of maintaining excess liquidity during the pandemic.

The cost of interest-bearing liabilities decreased in the fourth quarter of 2021 to 0.33% compared to 0.59% for the fourth quarter of 2020 and 0.41% for the third quarter of 2021. The cost of interest-bearing liabilities for 2021 was 0.42% compared to 0.83% during the same period in 2020. The reduction in the cost of interest-bearing liabilities compared to prior periods was largely driven by reductions in market interest rates as well as a change in the mix of interest-bearing liabilities as balances of higher cost time deposits decreased while lower cost interest-bearing transaction account balances increased. Additionally, replacing the Company's existing subordinated debt with a new issuance at a lower interest rate during 2021 decreased the cost of borrowings.

Net interest income increased to $59.0 million for the fourth quarter of 2021 compared to $55.1 million for the fourth quarter of 2020, due primarily to lower interest rates on interest-bearing liabilities as well as the growth of interest-earning assets partially offset by lower yields on interest-earning assets. Net interest income for 2021 was $234.8 million, as compared to $207.7 million for 2020 due to the same reasons discussed in the quarterly comparison.

Noninterest Income

Noninterest income decreased $981,000 to $5.9 million for the fourth quarter of 2021 from $6.8 million for the fourth quarter of 2020. Commissions and fees in the fourth quarter of 2021 increased $612,000 compared to the same period in 2020 due primarily to increases in investment commission income and commercial loan fees. Gain on sales of loans in the fourth quarter of 2021 decreased $361,000 due primarily to the Company retaining more originated residential mortgage loans in the loan portfolio. Fourth quarter 2020 results included an $871,000 gain on sales of securities compared to no gain on sales of securities during the same period in 2021. There was no swap income recorded in the fourth quarter of 2021 compared to $485,000 during the same period in 2020 due primarily to changes in the yield curve which decreases the demand for swap transactions.

For 2021, noninterest income decreased $4.7 million to $22.4 million compared to 2020 due primarily to a reduction in swap income. Service charges on deposit accounts increased $708,000 compared to 2020 due primarily to increases in debit card income. Commissions and fees in 2021 increased $1.1 million compared to 2020 due to the same reasons discussed in the quarterly comparison. Gains on sales of loans and swap income decreased $1.1 million and $4.1 million, respectively, compared to 2020, both due primarily to the same reasons discussed in the quarterly comparison. Gain on sales and calls of investment securities totaled $9,000 in 2021 compared to $1.2 million in 2020.

Noninterest Expense

Noninterest expense totaled $35.6 million for the fourth quarter of 2021, a decrease of $1.4 million compared to the fourth quarter of 2020 due primarily to long-term debt prepayment fees of $3.8 million recorded in the fourth quarter of 2020 to deploy excess liquidity. Compensation and employee benefit expense in the fourth quarter of 2021 increased $1.0 million, or 5%, compared to the fourth quarter of 2020 due primarily to staff additions and normal merit increases. In the fourth quarter of 2021, premises and equipment expense increased $549,000 due primarily to an increase in IT service agreement expense, and data processing expense increased $341,000 due primarily to increased fees from service providers compared to the fourth quarter of 2020. The fourth quarter of 2021 included $710,000 in merger-related costs for the acquisition of 1st Constitution Bancorp.

For 2021, noninterest expense increased $8.0 million to $140.8 million compared to $132.8 million for 2020 due primarily to compensation and employee benefit expense which increased $6.1 million, or 8%. The increase in compensation and employee benefits expense was due primarily to the same reasons discussed in the quarterly comparison. Premises and equipment expense in 2021 increased $2.9 million due to the same reason discussed in the quarterly comparison. Noninterest expense in 2021 included merger-related expenses of $1.8 million for the acquisition of 1st Constitution Bancorp. Additionally, noninterest expense in 2020 included $4.1 million in long-term debt prepayment fees compared to none in 2021.

Income Tax Expense

The effective tax rate for the fourth quarter of 2021 was 23.4% compared to 22.3% for the fourth quarter of 2020. The effective tax rate for 2021 was 25.4% compared to 23.1% for 2020. The increased effective tax rate for 2021 periods was primarily a result of tax advantaged items declining as a percentage of pretax income due to the increase in pretax income.

Financial Condition

At December 31, 2021, total assets were $8.20 billion, an increase of $533.8 million or 7% compared to December 31, 2020. For the year ended December 31, 2021, total loans declined $45.1 million to $5.98 billion due to a decline in PPP loans of $228.1 million, partially offset by an increase in other loan categories of $183.0 million, primarily in the multifamily and residential mortgage loan segments. Investment securities increased $648.1 million or 67% to $1.62 billion during 2021 as the Company deployed liquidity into the investment portfolio. On the funding side, total deposits increased $510.0 million or 8% to $6.97 billion primarily in the saving and interest bearing transaction accounts category, while borrowings decreased $2.3 million or 1% to $310.5 million for the year ended December 31, 2021. At December 31, 2021, total loans as a percent of total deposits was 85.8%.

Asset Quality

At December 31, 2021, non-performing assets decreased 60% to $17.0 million, 0.21% of total assets, compared to $42.8 million, 0.56% of total assets, at December 31, 2020. Non-accrual loans as a percent of total loans decreased to 0.28% at December 31, 2021 compared to 0.71% at December 31, 2020. At December 31, 2021, the allowance for credit losses decreased to $58.0 million, 0.97% of total loans compared to $71.1 million, 1.18% of total loans, at December 31, 2020. In the fourth quarter of 2021, the Company had net recoveries of $181,000, or 0.01% of average loans, annualized, compared to net charge-offs of $528,000, or 0.04% of average loans, annualized, for the same period in 2020. Provision for credit losses on loans for the fourth quarter of 2021 was a benefit of $87,000 compared to a benefit of $246,000 in the fourth quarter of 2020.

Capital

At December 31, 2021, stockholders' equity increased 8% to $827.0 million as compared to $763.8 million at December 31, 2020. Lakeland Bancorp remains above FDIC "well capitalized" standards, with a Tier 1 leverage ratio of 8.51% at December 31, 2021. The book value per common share and tangible book value per common share increased 8.0% and 10.4% to $16.34 and $13.21, respectively, compared to $15.13 and $11.97 at December 31, 2020 (see "Supplemental Information - Non-GAAP Financial Measures" for a reconciliation of non-GAAP financial measures, including tangible book value). On January 24, 2022, the Company declared a quarterly cash dividend of $0.135 per share to be paid on February 17, 2022, to shareholders of record as of February 7, 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, 2020, 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. 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 $8.20 billion in total assets at December 31, 2021. On January 6, 2022, the Company completed its acquisition of 1st Constitution Bancorp, which represents a significant addition to the Company's New Jersey franchise. With an extensive branch network and commercial lending centers throughout New Jersey and Highland Mills, N.Y., 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
President & CEO
 Thomas F. Splaine
EVP & CFO
Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
Three Months Ended
December 31,		 Year Ended
December 31,
(dollars in thousands, except per share amounts) 2021 2020 2021 2020
Income Statement
Net interest income $ 59,029 $ 55,135 $ 234,835 $ 207,687
(Provision) benefit for credit losses (408 ) (789 ) 10,896 (27,222 )
Gain on investment securities transactions, net - 871 9 1,213
Gain on sales of loans 399 760 2,264 3,322
(Loss) gain on equity securities (94 ) 73 (285 ) (552 )
Other noninterest income 5,559 5,141 20,373 23,127
Long-term debt prepayment fees - (3,777 ) - (4,133 )
Long-term debt extinguishment costs - - (831 ) -
Merger-related expenses (710 ) - (1,782 ) -
Other noninterest expense (34,840 ) (33,168 ) (138,144 ) (128,665 )
Pretax income 28,935 24,246 127,335 74,777
Provision for income taxes (6,765 ) (5,398 ) (32,294 ) (17,259 )
Net income $ 22,170 $ 18,848 $ 95,041 $ 57,518
Basic earnings per common share $ 0.43 $ 0.37 $ 1.85 $ 1.13
Diluted earnings per common share $ 0.43 $ 0.37 $ 1.85 $ 1.13
Dividends paid per common share $ 0.135 $ 0.125 $ 0.530 $ 0.500
Weighted average shares - basic 50,647 50,527 50,624 50,540
Weighted average shares - diluted 50,959 50,672 50,870 50,650
Selected Operating Ratios
Annualized return on average assets 1.06 % 0.98 % 1.19 % 0.80 %
Annualized return on average common equity 10.70 % 9.96 % 11.95 % 7.74 %
Annualized return on average tangible common equity (1) 13.26 % 12.64 % 14.93 % 9.86 %
Annualized yield on interest-earning assets 3.22 % 3.51 % 3.43 % 3.70 %
Annualized cost of interest-bearing liabilities 0.33 % 0.59 % 0.42 % 0.83 %
Annualized net interest spread 2.89 % 2.92 % 3.02 % 2.87 %
Annualized net interest margin 2.98 % 3.08 % 3.13 % 3.09 %
Efficiency ratio (1) 53.19 % 53.74 % 53.23 % 54.54 %
Stockholders' equity to total assets 10.09 % 9.97 %
Book value per common share $ 16.34 $ 15.13
Tangible book value per common share (1) $ 13.21 $ 11.97
Tangible common equity to tangible assets (1) 8.31 % 8.05 %
Asset Quality Ratios December 31, 2021 December 31, 2020
Ratio of allowance for credit losses on loans to total loans 0.97 % 1.18 %
Non-performing loans to total loans 0.28 % 0.71 %
Non-performing assets to total assets 0.21 % 0.47 %
Net charge-offs to average loans 0.04 % 0.03 %
(1) See Supplemental Information - Non-GAAP Financial Measures
Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
(dollars in thousands) December 31, December 31,
Selected Balance Sheet Data at Period End 2021 2020
Loans $ 5,976,148 $ 6,021,232
Allowance for credit losses on loans 58,047 71,124
Investment securities 1,621,329 973,185
Total assets 8,198,056 7,664,297
Total deposits 6,965,823 6,455,783
Short-term borrowings 106,453 169,560
Other borrowings 204,043 143,257
Stockholders' equity 827,014 763,784
Three Months Ended
December 31,		 Year Ended
December 31,
2021 2020 2021 2020
Selected Average Balance Sheet Data
Loans $ 5,902,152 $ 5,939,904 $ 6,003,325 $ 5,626,273
Investment securities 1,423,650 912,723 1,160,503 889,223
Interest-earning assets 7,874,181 7,137,884 7,516,662 6,735,825
Total assets 8,332,637 7,625,458 7,974,905 7,208,366
Noninterest-bearing demand deposits 1,775,119 1,499,093 1,671,889 1,362,918
Savings deposits 670,039 571,794 642,298 535,754
Interest-bearing transaction accounts 3,862,443 3,313,556 3,613,484 3,035,626
Time deposits 781,199 1,112,053 882,379 1,064,187
Total deposits 7,088,800 6,496,496 6,810,050 5,998,485
Short-term borrowings 112,533 68,962 95,111 92,425
Other borrowings 204,266 155,943 162,643 244,000
Total interest-bearing liabilities 5,630,479 5,222,308 5,395,915 4,971,992
Stockholders' equity 822,001 753,059 795,554 743,225
Lakeland Bancorp, Inc.
Consolidated Statements of Income
(Unaudited)
Three Months Ended
December 31,		 Year Ended
December 31,
(in thousands, except per share amounts) 2021 2020 2021 2020
Interest Income
Loans and fees $ 57,773 $ 58,553 $ 237,037 $ 229,036
Federal funds sold and interest-bearing deposits with banks 190 61 440 348
Taxable investment securities and other 4,966 3,680 17,208 17,811
Tax exempt investment securities 802 565 2,633 1,647
Total Interest Income 63,731 62,859 257,318 248,842
Interest Expense
Deposits 3,444 6,090 16,793 32,059
Federal funds purchased and securities sold under agreements to repurchase 20 25 78 556
Other borrowings 1,238 1,609 5,612 8,540
Total Interest Expense 4,702 7,724 22,483 41,155
Net Interest Income 59,029 55,135 234,835 207,687
Provision (benefit) for credit losses 408 789 (10,896 ) 27,222
Net Interest Income after Provision for Credit Losses 58,621 54,346 245,731 180,465
Noninterest Income
Service charges on deposit accounts 2,579 2,485 9,856 9,148
Commissions and fees 1,977 1,365 6,939 5,868
Income on bank owned life insurance 754 657 2,676 2,657
(Loss) gain on equity securities (94 ) 73 (285 ) (552 )
Gain on sales of loans 399 760 2,264 3,322
Gain on investment securities transactions, net - 871 9 1,213
Swap income - 485 634 4,719
Other income 249 149 268 735
Total Noninterest Income 5,864 6,845 22,361 27,110
Noninterest Expense
Compensation and employee benefits 20,186 19,188 82,589 76,470
Premises and equipment 6,171 5,622 24,773 21,871
FDIC insurance 548 750 2,341 2,123
Data processing 1,405 1,064 5,454 4,964
Merger-related expenses 710 - 1,782 -
Long-term debt prepayment fees - 3,777 - 4,133
Other operating expenses 6,530 6,544 23,818 23,237
Total Noninterest Expense 35,550 36,945 140,757 132,798
Income before provision for income taxes 28,935 24,246 127,335 74,777
Provision for income taxes 6,765 5,398 32,294 17,259
Net Income $ 22,170 $ 18,848 $ 95,041 $ 57,518
Per Share of Common Stock
Basic earnings $ 0.43 $ 0.37 $ 1.85 $ 1.13
Basic earnings $ 0.43 $ 0.37 $ 1.85 $ 1.13
Dividends $ 0.135 $ 0.125 $ 0.530 $ 0.500
Lakeland Bancorp, Inc.
Consolidated Balance Sheets
(dollars in thousands) December 31, 2021 December 31, 2020
(Unaudited)
Assets
Cash $ 199,158 $ 262,327
Interest-bearing deposits due from banks 29,372 7,763
Total cash and cash equivalents 228,530 270,090
Investment securities available for sale, at estimated fair value (allowance for credit losses of $83 at December 31, 2021 and $2 at December 31, 2020 ) 769,956 855,746
Investment securities held to maturity (estimated fair value of $815,211 at December 31, 2021 and $93,868 at December 31, 2020, allowance for credit losses of $181 at December 31, 2021 and none at December 31, 2020) 824,956 90,766
Equity securities, at fair value 17,368 14,694
Federal Home Loan Bank and other membership stocks, at cost 9,049 11,979
Loans held for sale 1,943 1,335
Loans, net of deferred fees 5,976,148 6,021,232
Less: Allowance for credit losses 58,047 71,124
Net loans 5,918,101 5,950,108
Premises and equipment, net 45,916 48,495
Operating lease right-of-use assets 15,222 16,772
Accrued interest receivable 19,209 19,339
Goodwill 156,277 156,277
Other identifiable intangible assets 2,420 3,288
Bank owned life insurance 117,356 115,115
Other assets 71,753 110,293
Total Assets $ 8,198,056 $ 7,664,297
Liabilities and Stockholders' Equity
Liabilities
Deposits:
Noninterest-bearing $ 1,732,452 $ 1,510,224
Savings and interest-bearing transaction accounts 4,474,144 3,867,303
Time deposits $250 thousand and under 623,393 895,056
Time deposits over $250 thousand 135,834 183,200
Total deposits 6,965,823 6,455,783
Federal funds purchased and securities sold under agreements to repurchase 106,453 169,560
Other borrowings 25,000 25,000
Subordinated debentures 179,043 118,257
Operating lease liabilities 16,523 18,183
Other liabilities 78,200 113,730
Total Liabilities 7,371,042 6,900,513
Stockholders' Equity
Common stock, no par value; authorized 100,000,000 shares; issued 50,737,400 shares and outstanding 50,606,365 shares at December 31, 2021 and issued 50,610,681 shares and outstanding 50,479,646 shares at December 31, 2020 565,862 562,421
Retained earnings 259,340 191,418
Treasury shares, at cost, 131,035 shares at December 31, 2021 and December 31, 2020 (1,452 ) (1,452 )
Accumulated other comprehensive income 3,264 11,397
Total Stockholders' Equity 827,014 763,784
Total Liabilities and Stockholders' Equity $ 8,198,056 $ 7,664,297
Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
For the Quarter Ended
December 31, September 30, June 30, March 31, December 31,
(dollars in thousands, except per share data) 2021 2021 2021 2021 2020
Income Statement
Net interest income $ 59,029 $ 59,338 $ 59,740 $ 56,728 $ 55,135
(Provision) benefit for credit losses (1) (408 ) 2,703 5,959 2,642 (789 )
Gain on investment securities transactions, net - - 9 - 871
Gain on sales of loans 399 550 607 708 760
(Loss) gain on equity securities (94 ) (58 ) 11 (144 ) 73
Other noninterest income 5,559 4,977 4,642 5,195 5,141
Long-term debt extinguishment costs - (831 ) - - -
Long-term debt prepayment fees - - - - (3,777 )
Merger-related expenses (710 ) (1,072 ) - - -
Other noninterest expense (34,840 ) (35,304 ) (34,097 ) (33,903 ) (33,168 )
Pretax income 28,935 30,303 36,871 31,226 24,246
Provision for income taxes (6,765 ) (8,014 ) (9,464 ) (8,051 ) (5,398 )
Net income $ 22,170 $ 22,289 $ 27,407 $ 23,175 $ 18,848
Basic earnings per common share $ 0.43 $ 0.43 $ 0.53 $ 0.45 $ 0.37
Diluted earnings per common share $ 0.43 $ 0.43 $ 0.53 $ 0.45 $ 0.37
Dividends paid per common share $ 0.135 $ 0.135 $ 0.135 $ 0.125 $ 0.125
Dividends paid $ 6,921 $ 7,001 $ 6,828 $ 6,369 $ 6,364
Weighted average shares - basic 50,647 50,637 50,636 50,576 50,527
Weighted average shares - diluted 50,959 50,875 50,858 50,780 50,672
Selected Operating Ratios
Annualized return on average assets 1.06 % 1.10 % 1.41 % 1.22 % 0.98 %
Annualized return on average common equity 10.70 % 10.94 % 14.07 % 12.20 % 9.96 %
Annualized return on average tangible common equity (2) 13.26 % 13.63 % 17.67 % 15.39 % 12.64 %
Annualized net interest margin 2.98 % 3.10 % 3.27 % 3.19 % 3.08 %
Efficiency ratio (2) 53.19 % 54.02 % 51.98 % 53.75 % 53.74 %
Common stockholders' equity to total assets 10.09 % 9.96 % 10.14 % 9.88 % 9.97 %
Tangible common equity to tangible assets (2) 8.31 % 8.18 % 8.29 % 8.00 % 8.05 %
Tier 1 risk-based ratio 11.15 % 11.19 % 10.78 % 10.47 % 10.22 %
Total risk-based ratio 14.48 % 14.73 % 13.11 % 13.02 % 12.85 %
Tier 1 leverage ratio 8.51 % 8.60 % 8.70 % 8.51 % 8.37 %
Common equity tier 1 capital ratio 10.67 % 10.70 % 10.29 % 9.98 % 9.73 %
Book value per common share $ 16.34 $ 16.09 $ 15.74 $ 15.18 $ 15.13
Tangible book value per common share (2) $ 13.21 $ 12.95 $ 12.60 $ 12.03 $ 11.97

(1) The Company adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("CECL") on December 31, 2020, with a transition adjustment retroactive to January 1, 2020.

(2) See Supplemental Information - Non-GAAP Financial Measures

Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
For the Quarter Ended
December 31, September 30, June 30, March 31, December 31,
(dollars in thousands) 2021 2021 2021 2021 2020
Selected Balance Sheet Data at Period End
Loans $ 5,976,148 $ 5,880,802 $ 5,988,832 $ 6,108,946 $ 6,021,232
Allowance for credit losses on loans (3) 58,047 57,953 60,389 67,252 71,124
Investment securities 1,621,329 1,248,705 1,107,601 1,078,750 973,185
Total assets 8,198,056 8,172,479 7,854,238 7,771,761 7,664,297
Total deposits 6,965,823 6,930,912 6,715,035 6,635,226 6,455,783
Short-term borrowings 106,453 111,907 100,190 111,999 169,560
Other borrowings 204,043 212,107 138,045 143,267 143,257
Stockholders' equity 827,014 814,128 796,676 768,065 763,784
Loans
Non owner occupied commercial $ 2,316,284 $ 2,300,637 $ 2,330,376 $ 2,375,024 $ 2,398,946
Owner occupied commercial 908,449 884,144 870,535 857,506 827,092
Multifamily 972,233 907,903 902,394 858,168 813,225
Non owner occupied residential 177,097 177,592 189,765 195,534 200,229
Commercial, industrial and other 405,832 363,976 358,659 394,416 433,553
Construction 302,228 332,868 335,167 291,252 266,883
Paycheck Protection Program 56,574 109,348 207,045 346,150 284,636
Equipment financing 123,212 119,709 121,096 119,428 116,690
Residential mortgages 438,710 407,021 391,589 385,778 377,380
Consumer and home equity 275,529 277,604 282,206 285,690 302,598
Total loans $ 5,976,148 $ 5,880,802 $ 5,988,832 $ 6,108,946 $ 6,021,232
Deposits
Noninterest-bearing $ 1,732,452 $ 1,724,646 $ 1,683,887 $ 1,631,942 $ 1,510,224
Savings and interest-bearing transaction accounts 4,474,144 4,401,367 4,198,709 4,049,914 3,867,303
Time deposits 759,227 804,899 832,439 953,370 1,078,256
Total deposits $ 6,965,823 $ 6,930,912 $ 6,715,035 $ 6,635,226 $ 6,455,783
Total loans to total deposits ratio 85.8 % 84.8 % 89.2 % 92.1 % 93.3 %
Selected Average Balance Sheet Data
Loans $ 5,902,152 $ 5,943,698 $ 6,080,408 $ 6,089,757 $ 5,939,904
Investment securities 1,423,650 1,144,356 1,066,086 1,003,479 912,723
Interest-earning assets 7,874,181 7,611,259 7,342,952 7,230,136 7,137,884
Total assets 8,332,637 8,070,050 7,784,385 7,704,603 7,625,458
Noninterest-bearing demand deposits 1,775,119 1,702,788 1,660,825 1,545,968 1,499,093
Savings deposits 670,039 653,840 639,540 604,931 571,794
Interest-bearing transaction accounts 3,862,443 3,701,676 3,495,610 3,388,027 3,313,556
Time deposits 781,199 826,831 880,079 1,044,915 1,112,053
Total deposits 7,088,800 6,885,135 6,676,054 6,583,841 6,496,496
Short-term borrowings 112,533 108,519 85,325 73,492 68,962
Other borrowings 204,266 162,216 140,162 143,261 155,943
Total interest-bearing liabilities 5,630,479 5,453,082 5,240,716 5,254,626 5,222,308
Stockholders' equity 822,001 807,956 781,299 770,255 753,059

(3) The Company adopted CECL on December 31, 2020, with a transition adjustment retroactive to January 1, 2020.

Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
For the Quarter Ended
December 31, September 30, June 30, March 31, December 31,
(dollars in thousands) 2021 2021 2021 2021 2020
Average Annualized Yields (Taxable Equivalent Basis) and Costs
Assets
Loans 3.88 % 4.00 % 3.99 % 3.91 % 3.92 %
Taxable investment securities and other 1.60 % 1.68 % 1.72 % 1.81 % 1.84 %
Tax-exempt securities 2.20 % 2.15 % 2.50 % 2.54 % 2.51 %
Federal funds sold and interest-bearing cash accounts 0.14 % 0.12 % 0.11 % 0.11 % 0.09 %
Total interest-earning assets 3.22 % 3.40 % 3.57 % 3.56 % 3.51 %
Liabilities
Savings accounts 0.05 % 0.05 % 0.05 % 0.05 % 0.05 %
Interest-bearing transaction accounts 0.24 % 0.30 % 0.32 % 0.34 % 0.38 %
Time deposits 0.51 % 0.55 % 0.61 % 0.83 % 1.01 %
Borrowings 1.55 % 2.33 % 2.22 % 2.87 % 2.84 %
Total interest-bearing liabilities 0.33 % 0.41 % 0.42 % 0.51 % 0.59 %
Net interest spread (taxable equivalent basis) 2.89 % 2.99 % 3.15 % 3.05 % 2.92 %
Annualized net interest margin (taxable equivalent basis) 2.98 % 3.10 % 3.27 % 3.19 % 3.08 %
Annualized cost of deposits 0.19 % 0.23 % 0.25 % 0.32 % 0.37 %
Asset Quality Data
Allowance for Credit Losses on Loans
Balance at beginning of period $ 57,953 $ 60,389 $ 67,252 $ 71,124 $ 65,242
Impact of adopting ASU 2016-13 (4) - - - - 6,656
Benefit for credit losses on loans (87 ) (2,705 ) (5,314 ) (2,808 ) (246 )
Charge-offs (461 ) (969 ) (1,862 ) (1,270 ) (746 )
Recoveries 642 1,238 313 206 218
Balance at end of period $ 58,047 $ 57,953 $ 60,389 $ 67,252 $ 71,124
Net Loan Charge-Offs (Recoveries)
Non owner occupied commercial $ - $ 6 $ 1,649 $ 592
Owner occupied commercial (1 ) (80 ) (9 ) 70
Multifamily - 28 - -
Non owner occupied residential (136 ) (5 ) (8 ) 206
Total commercial, secured by real estate (4) $ (137 ) $ (51 ) $ 1,632 $ 868 $ (45 )
Commercial, industrial and other (449 ) (265 ) 5 221 477
Construction (4 ) 50 (42 ) (25 )
Equipment financing 60 139 4 83 64
Residential mortgages 49 27 (82 ) (58 ) -
Consumer and home equity 300 (169 ) 32 (25 ) 32
Net (recoveries) charge-offs $ (181 ) $ (269 ) $ 1,549 $ 1,064 $ 528
(4) Periods prior to December 31, 2020 do not reflect the adoption of ASU 2016-13
Non-Performing Assets
Non owner occupied commercial $ 3,009 $ 4,748 $ 11,427 $ 12,835 $ 16,537
Owner occupied commercial 2,810 4,656 7,152 8,797 14,271
Multifamily - - 195 201 626
Non owner occupied residential 2,852 922 1,305 1,417 2,217
Construction - - 515 718 1,440
Commercial, industrial and other 6,763 1,108 1,449 2,252 2,633
Equipment financing 43 238 264 300 327
Residential mortgages 817 123 - 2,328 2,469
Consumer and home equity 687 453 308 2,277 2,243
Total non-accrual loans 16,981 12,248 22,615 31,125 42,763
Property acquired through foreclosure or repossession - - - - -
Total non-performing assets $ 16,981 $ 12,248 $ 22,615 $ 31,125 $ 42,763
Loans past due 90 days or more and still accruing $ 1 $ - $ - $ - $ 1
Loans restructured and still accruing $ 3,342 $ 3,414 $ 3,595 $ 3,799 $ 3,856
Ratio of allowance for credit losses to total loans 0.97 % 0.99 % 1.01 % 1.10 % 1.18 %
Total non-accrual loans to total loans 0.28 % 0.21 % 0.38 % 0.51 % 0.71 %
Total non-performing assets to total assets 0.21 % 0.15 % 0.29 % 0.40 % 0.56 %
Annualized net (recoveries) charge-offs to average loans (0.01 )% (0.02 )% 0.10 % 0.07 % 0.04 %
Lakeland Bancorp, Inc.
Supplemental Information - Non-GAAP Financial Measures
(Unaudited)
At or for the Quarter Ended
December 31, September 30, June 30, March 31, December 31,
(dollars in thousands, except per share amounts) 2021 2021 2021 2021 2020
Calculation of Tangible Book Value Per Common Share
Total common stockholders' equity at end of period - GAAP $ 827,014 $ 814,128 $ 796,676 $ 768,065 $ 763,784
Less: Goodwill 156,277 156,277 156,277 156,277 156,277
Less: Other identifiable intangible assets 2,420 2,631 2,841 3,063 3,288
Total tangible common stockholders' equity at end of period - Non-GAAP $ 668,317 $ 655,220 $ 637,558 $ 608,725 $ 604,219
Shares outstanding at end of period 50,606 50,602 50,601 50,598 50,480
Book value per share - GAAP $ 16.34 $ 16.09 $ 15.74 $ 15.18 $ 15.13
Tangible book value per share - Non-GAAP $ 13.21 $ 12.95 $ 12.60 $ 12.03 $ 11.97
Calculation of Tangible Common Equity to Tangible Assets
Total tangible common stockholders' equity at end of period - Non-GAAP $ 668,317 $ 655,220 $ 637,558 $ 608,725 $ 604,219
Total assets at end of period - GAAP $ 8,198,056 $ 8,172,479 $ 7,854,238 $ 7,771,761 $ 7,664,297
Less: Goodwill 156,277 156,277 156,277 156,277 156,277
Less: Other identifiable intangible assets 2,420 2,631 2,841 3,063 3,288
Total tangible assets at end of period - Non-GAAP $ 8,039,359 $ 8,013,571 $ 7,695,120 $ 7,612,421 $ 7,504,732
Common equity to assets - GAAP 10.09 % 9.96 % 10.14 % 9.88 % 9.97 %
Tangible common equity to tangible assets - Non-GAAP 8.31 % 8.18 % 8.29 % 8.00 % 8.05 %
Calculation of Return on Average Tangible Common Equity
Net income - GAAP $ 22,170 $ 22,289 $ 27,407 $ 23,175 $ 18,848
Total average common stockholders' equity - GAAP $ 822,001 $ 807,956 $ 781,299 $ 770,255 $ 753,059
Less: Average goodwill 156,277 156,277 156,277 156,277 156,277
Less: Average other identifiable intangible assets 2,544 2,758 2,979 3,192 3,433
Total average tangible common stockholders' equity - Non-GAAP $ 663,180 $ 648,921 $ 622,043 $ 610,786 $ 593,349
Return on average common stockholders' equity - GAAP 10.70 % 10.94 % 14.07 % 12.20 % 9.96 %
Return on average tangible common stockholders' equity - Non-GAAP 13.26 % 13.63 % 17.67 % 15.39 % 12.64 %
Calculation of Efficiency Ratio
Total noninterest expense $ 35,550 $ 37,207 $ 34,097 $ 33,903 $ 36,945
Amortization of core deposit intangibles (210 ) (211 ) (221 ) (226 ) (249 )
Merger-related expenses (710 ) (1,072 ) - - -
Long-term debt extinguishment costs - (831 ) - - -
Long-term debt prepayment fee - - - - (3,777 )
Noninterest expense, as adjusted $ 34,630 $ 35,093 $ 33,876 $ 33,677 $ 32,919
Net interest income $ 59,029 $ 59,338 $ 59,740 $ 56,728 $ 55,135
Total noninterest income 5,864 5,469 5,269 5,759 6,845
Total revenue $ 64,893 $ 64,807 $ 65,009 $ 62,487 $ 61,980
Tax-equivalent adjustment on municipal securities 213 157 167 163 149
Gain on sales of investment securities - - (9 ) - (871 )
Total revenue, as adjusted $ 65,106 $ 64,964 $ 65,167 $ 62,650 $ 61,258
Efficiency ratio - Non-GAAP 53.19 % 54.02 % 51.98 % 53.75 % 53.74 %
Lakeland Bancorp, Inc.
Supplemental Information - Non-GAAP Financial Measures
(Unaudited)
For the Twelve Months Ended December 31,
(dollars in thousands) 2021 2020
Calculation of Return on Average Tangible Common Equity
Net income - GAAP $ 95,040 $ 57,518
Total average common stockholders' equity - GAAP $ 795,554 $ 743,225
Less: Average goodwill 156,277 156,277
Less: Average other identifiable intangible assets 2,866 3,816
Total average tangible common stockholders' equity - Non-GAAP $ 636,411 $ 583,132
Return on average common stockholders' equity - GAAP 11.95 % 7.74 %
Return on average tangible common stockholders' equity - Non-GAAP 14.93 % 9.86 %
Calculation of Efficiency Ratio
Total noninterest expense $ 140,756 $ 132,798
Amortization of core deposit intangibles (868 ) (1,025 )
Long-term debt prepayment fees - (4,133 )
Long-term debt extinguishment costs (831 ) -
Merger-related expenses (1,782 ) -
Noninterest expense, as adjusted $ 137,275 $ 127,640
Net interest income $ 234,834 $ 207,687
Noninterest income 22,361 27,110
Total revenue $ 257,195 $ 234,797
Tax-equivalent adjustment on municipal securities 700 438
Gain on sales and calls of investment securities (9 ) (1,213 )
Total revenue, as adjusted $ 257,886 $ 234,022
Efficiency ratio - Non-GAAP 53.23 % 54.54 %


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Lakeland Bancorp Inc. published this content on 26 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 January 2022 17:16:09 UTC.