Lakeland Bancorp Announces Record Quarterly Results

Rhea-AI Summary

Lakeland Bancorp reported net income of $29.1 million for Q2 2022, with earnings per diluted share of $0.44, a slight increase from $27.4 million in Q2 2021. The annualized return on average assets was 1.15%, while return on equity and tangible equity were 10.71% and 14.45%, respectively. Notable highlights include a 4% loan growth, record net interest income of $80.3 million, and an improved net interest margin of 3.38%. The effective tax rate decreased to 24.7% from 25.7% year-over-year.

Positive

• Net income increased to $29.1 million in Q2 2022, up from $27.4 million in Q2 2021.
• Record net interest income of $80.3 million for Q2 2022, a $20.6 million rise compared to Q2 2021.
• Loan growth of $270.7 million or 3.8% from the previous quarter.
• Improved net interest margin of 3.38% in Q2 2022 from 3.02% in Q1 2022.
• Non-performing assets decreased to 0.21% of total assets, down from 0.29% year-over-year.

Negative

• Diluted EPS decreased to $0.44 in Q2 2022 from $0.53 in Q2 2021.
• Net income for the first half of 2022 decreased to $45.0 million from $50.6 million in 2021.
• Noninterest expense increased by $11.0 million in Q2 2022 compared to Q2 2021, predominantly due to higher compensation costs.

OAK RIDGE, N.J., July 28, 2022 (GLOBE NEWSWIRE) -- Lakeland Bancorp, Inc. (NASDAQ: LBAI) (the “Company”), the parent company of Lakeland Bank (“Lakeland”), reported net income of $29.1 million and earnings per diluted share ("EPS") of $0.44 for the three months ended June 30, 2022 compared to net income of $27.4 million and diluted EPS of $0.53 for the three months ended June 30, 2021. For the second quarter of 2022, annualized return on average assets was 1.15%, annualized return on average common equity was 10.71% and annualized return on average tangible common equity was 14.45%.

For the six months ended June 30, 2022, the Company reported net income of $45.0 million and diluted EPS of $0.69 compared to net income of $50.6 million and diluted EPS of $0.98 for the first six months of 2021. Annualized return on average assets was 0.89%, annualized return on average common equity was 8.31% and annualized return on average tangible common equity was 11.16% for the first six months of 2021.

Thomas Shara, Lakeland Bancorp’s President and CEO commented, “We are delighted with the Company’s results for the quarter which include record net income of $29.1 million, record net interest income of $80.3 million, expansion in net interest margin and loan growth of 4%. Lakeland continues to effectively navigate the current challenging economic conditions with prudent loan underwriting standards as evidenced in our continued stellar asset quality. We are very proud to be awarded the 2022 Best-In-State Banks in New Jersey by Forbes, representing the fourth consecutive year of outstanding achievement.”

Second Quarter 2022 Highlights

• Loan growth for the second quarter of $270.7 million or 3.8% compared to the prior quarter was attributed to both commercial and consumer portfolio expansion.
• Net interest margin increased to 3.38% for the second quarter compared to 3.02% in the first quarter of 2022 and 3.27% in the second quarter of 2021.
• Nonperforming assets to total assets decreased eight basis points to 0.21% at June 30, 2022 compared to 0.29% at June 30, 2021.
• Efficiency ratio of 50.7% in the second quarter of 2022 compared to 57.8% in the first quarter of 2022.

Net Interest Margin and Net Interest Income

Net interest margin for the second quarter of 2022 of 3.38% increased 11 basis points compared to the second quarter of 2021 and increased 36 basis points compared to the first quarter of 2022. The increase in net interest margin compared to the second quarter 2021 and first quarter 2022 was due primarily to an increase in yields on loans, increased loan prepayment fees, higher securities balances and non-accrual interest recoveries in the second quarter of 2022. Net interest margin for the first six months of 2022 was 3.20% compared to 3.23% for the same period of 2021. The variance in net interest margin compared to the first six months of 2021 is due primarily to a decrease in the yield on investment securities.

The yield on interest-earning assets for the second quarter of 2022 was 3.61% as compared to 3.57% for the second quarter of 2021 and 3.25% for the first quarter of 2022. The increase in the yield on interest-earning assets compared to the second quarter of 2021 and the linked quarter was due primarily to an increase in the yield on loans driven primarily by increases in market interest rates, increased loan prepayment fees and non-accrual interest recoveries. Also increasing the yield on interest-earning assets during the second quarter of 2022 was a reduction in the average balance of lower-yielding federal funds sold. The yield on interest-earning assets for the first six months of 2022 was 3.42% as compared to 3.57% during the same period in 2021. The decrease in yield on interest-earning assets for the first six months of 2022 compared to the same period in 2021 was due primarily to a decrease in the yield on securities as well as an increase in lower-yielding federal funds sold, partially offset by higher average balances of securities and loans.

The cost of interest-bearing liabilities for the second quarter of 2022 was 0.40% compared to 0.42% for the second quarter of 2021 and 0.34% for the first quarter of 2022. The cost of interest-bearing liabilities for the first six months of 2022 was 0.37% compared to 0.47% for the same period in 2021. The reduction in the cost of interest-bearing liabilities compared to the second quarter of 2021 and the first six months of 2021 was largely driven by reductions in the cost of time deposits and long-term borrowings. The increase in the cost of interest-bearing liabilities compared to the linked quarter was due primarily to an increase in the cost of interest-bearing deposits and borrowings driven primarily by increases in market interest rates.

Net interest income for the second quarter of 2022 of $80.3 million increased $20.6 million compared to the second quarter of 2021. Net interest income for the first six months of 2022 was $150.7 million as compared to $116.5 million for the first six months of 2021. The increase in net interest income compared to prior periods was due primarily to growth of loans and investment securities. Also contributing to the increase were higher loan prepayment fees and non-accrual interest recoveries during the second quarter of 2022.

Noninterest Income

For the second quarter of 2022, noninterest income increased $1.8 million to $7.1 million compared to the second quarter of 2021. Commissions and fees increased $800,000 driven primarily by an increase in wire transfer charges and financial services income. Other income increased $500,000 due primarily to reductions in write-downs on premises and equipment as well as recoveries on loans charged off from prior acquisitions. Service charges on deposit accounts increased $266,000 compared to the second quarter of 2021 due predominately to increases in debit card income. Swap income for the second quarter of 2022 was $399,000 compared to $72,000 during the same period of 2021 due primarily to changes in the yield curve which increased demand for swap transactions. Losses on equity securities totaled $364,000 in the second quarter of 2022 compared to gains of $11,000 in the second quarter of 2021.

For the first six months of 2022, noninterest income increased $2.8 million to $13.8 million compared to the first six months of 2021. Commissions and fees increased $1.3 million due primarily to higher loan fees and increases in financial services income. Other income increased $672,000 and service charges on deposits increased $596,000 compared to the first half of 2021 due primarily to the same reasons mentioned in the quarterly analysis. Losses on equity securities totaled $849,000 in the first six months of 2022 compared to losses of $133,000 in the first six months of 2021.

Noninterest Expense

Noninterest expense for the second quarter of 2022 of $45.1 million increased $11.0 million compared to the second quarter of 2021. The increase in noninterest expense was primarily due to compensation and employee benefits which increased $6.5 million resulting primarily from additions to our staff from the 1st Constitution acquisition and normal merit increases. Premises and equipment expense and data processing expense increased $1.6 million and $592,000, respectively, compared to the second quarter of 2021 due primarily to increases related to expansion of the franchise as a result of the 1st Constitution acquisition. Other operating expenses in the second quarter of 2022 increased $2.2 million compared to the same period in 2021 due primarily to increased core deposit intangible amortization, marketing expense, appraisal fees, consulting fees and insurance expense.

Noninterest expense for the first half of 2022 of $95.0 million increased $27.0 million compared to the first half of 2021. Compensation and employee benefit expense and premises and equipment expense increased $13.7 million and $3.3 million, respectively, compared to the first half of 2021 due to the same reasons discussed in the quarterly comparison. Merger related expenses were $4.6 million due to the acquisition of 1st Constitution Bancorp. Data processing expense increased $1.0 million due to the same reasons mentioned in the quarterly analysis. Other operating expenses increased $4.5 million in the first half of 2022 compared to the same period in 2021 due primarily to an increase in consulting and marketing fees.

Income Tax Expense

The effective tax rate for the second quarter of 2022 was 24.7% compared to 25.7% for the second quarter of 2021. The decreased effective tax rate for the second quarter of 2022 was primarily a result of tax advantaged items increasing as a percentage of pretax income.

Financial Condition

At June 30, 2022, total assets were $10.37 billion, an increase of $2.18 billion, compared to December 31, 2021. As of June 30, 2022, total loans grew $1.43 billion, including $1.10 billion from 1st Constitution, to $7.41 billion while investment securities increased $502.9 million, including $342.3 million from 1st Constitution, to $2.12 billion. On the funding side, total deposits increased $1.54 billion, including $1.65 billion from 1st Constitution, to $8.50 billion. At June 30, 2022, total loans as a percent of total deposits was 87.1%.

Asset Quality

At June 30, 2022, non-performing assets totaled $22.2 million or 0.21% of total assets compared to $22.6 million or 0.29% of total assets at June 30, 2021. Non-accrual loans as a percent of total loans was 0.30% at June 30, 2022, compared to 0.38% at June 30, 2021. The allowance for credit losses on loans totaled $68.8 million, 0.93% of total loans, at June 30, 2022, compared to $60.4 million, 1.01% of total loans, at June 30, 2021. At June 30, 2022, the allowance for credit losses included a day one purchase accounting adjustment of $12.1 million for purchased credit impaired loans. In the second quarter of 2022, the Company had net recoveries of $141,000 or (0.01)% of average loans on an annualized basis, compared to net charge-offs of $1.5 million or 0.10% for the same period in 2021.

The provision for credit losses for the second quarter of 2022 was $3.6 million compared to a benefit of $6.0 million in the second quarter of 2021. The provision in the 2022 period is comprised of a provision for credit losses on loans of $1.6 million, a provision for credit losses on securities of $1.5 million and a provision for off-balance-sheet exposures of $535,000. For the six months ended June 30, 2022, the provision for credit losses was $9.9 million, while the Company recorded a benefit of $8.6 million for the same period in 2021. As of June 30, 2022, the provision was comprised of a provision for credit losses on loans of $6.2 million, a provision for credit losses on securities of $2.7 million and a provision for off-balance-sheet exposures of $975,000.

Capital

At June 30, 2022, stockholders' equity was $1.09 billion compared to $827.0 million at December 31, 2021, a 32% increase, resulting primarily from the issuance of stock in connection with the 1st Constitution acquisition. Lakeland Bank remains above FDIC “well capitalized” standards, with a Tier 1 leverage ratio of 9.05% at June 30, 2022. The book value per common share increased 7% to $16.82 at June 30, 2022 compared to $15.74 at June 30, 2021. Tangible book value per common share was $12.47 and $12.60 at June 30, 2022 and 2021, respectively (see "Supplemental Information - Non-GAAP Financial Measures" for a reconciliation of non-GAAP financial measures, including tangible book value). At June 30, 2022, the Company’s common equity to assets ratio and tangible common equity to tangible assets ratio were 10.51% and 8.01%, respectively, compared to 10.14% and 8.29% at June 30, 2021. On July 26, 2022, the Company declared a quarterly cash dividend of $0.145 per share to be paid on August 17, 2022, to shareholders of record as of August 8, 2022.

Forward-Looking Statements

The information disclosed in this document includes various forward-looking statements that are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words “anticipates,” “projects,” “intends,” “estimates,” “expects,” “believes,” “plans,” “may,” “will,” “should,” “could,” and other similar expressions are intended to identify such forward-looking statements. The Company cautions that these forward-looking statements are necessarily speculative and speak only as of the date made, and are subject to numerous assumptions, risks and uncertainties, all of which may change over time. Actual results could differ materially from such forward-looking statements. Accordingly, you should not place undue reliance on forward-looking statements. In addition to the specific risk factors disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2021, as updated by our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, the following factors, among others, could cause actual results to differ materially and adversely from such forward-looking statements: changes in the financial services industry and the U.S. and global capital markets, changes in economic conditions nationally, regionally and in the Company’s markets, the nature and timing of actions of the Federal Reserve Board and other regulators, the nature and timing of legislation and regulation affecting the financial services industry, government intervention in the U.S. financial system, changes in federal and state tax laws, changes in levels of market interest rates, pricing pressures on loan and deposit products, credit risks of the Company’s lending and leasing activities, successful implementation, deployment and upgrades of new and existing technology, systems, services and products, customers’ acceptance of the Company’s products and services, competition, and failure to realize anticipated efficiencies and synergies from the merger of 1st Constitution Bancorp into Lakeland Bancorp and the merger of 1st Constitution Bank into Lakeland Bank. Further, given its ongoing and dynamic nature, it is difficult to predict the continuing effects that the COVID-19 pandemic will have on our business and results of operations. Any statements made by the Company that are not historical facts should be considered to be forward-looking statements. The Company is not obligated to update and does not undertake to update any of its forward-looking statements made herein.

Explanation of Non-GAAP Financial Measures

Reported amounts are presented in accordance with U.S. generally accepted accounting principles ("GAAP"). This press release also contains certain supplemental non-GAAP information that the Company’s management uses in its analysis of the Company’s financial results.

The Company also provides measurements and ratios based on tangible equity and tangible assets. These measures are utilized by regulators and market analysts to evaluate a company’s financial condition and, therefore, the Company’s management believes that such information is useful to investors.

Specifically, the Company also uses an efficiency ratio that is a non-GAAP financial measure. The ratio that the Company uses excludes amortization of core deposit intangibles, and, where applicable, long-term debt prepayment fees and merger-related expenses. Income for the non-GAAP ratio is increased by the favorable effect of tax-exempt income and excludes gains and losses from the sale of investment securities, which can vary from period to period. The Company uses this ratio because it believes the ratio provides a relevant measure to compare the operating performance period to period.

These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. See accompanying "Supplemental Information - Non-GAAP Financial Measures" for a reconciliation of non-GAAP financial measures.

About Lakeland

Lakeland Bank is the wholly-owned subsidiary of Lakeland Bancorp, Inc. (NASDAQ:LBAI), which had $10.37 billion in total assets at June 30, 2022. With an extensive branch network and commercial lending centers throughout New Jersey and Highland Mills, New York, the Bank offers business and retail banking products and services. Business services include commercial loans and lines of credit, commercial real estate loans, loans for healthcare services, asset-based lending, equipment financing, small business loans and lines and cash management services. Consumer services include online and mobile banking, home equity loans and lines, mortgage options and wealth management solutions. Lakeland is proud to be recognized as New Jersey's Best-In State-Bank by Forbes and Statista for the fourth consecutive year, Best Banks to Work For by American Banker, rated a 5-Star Bank by Bauer Financial and named one of New Jersey's 50 Fastest Growing Companies by NJBIZ. Visit LakelandBank.com or 973-697-6140 for more information.

Thomas J. Shara		Thomas F. Splaine
President & CEO		EVP & CFO

Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)

		Three Months Ended June 30,								Six Months Ended June 30,
(dollars in thousands, except per share amounts)			2022				2021				2022				2021
Income Statement
Net interest income		$	80,302			$	59,740			$	150,690			$	116,468
(Provision) benefit for credit losses			(3,644	)			5,959				(9,916	)			8,601
Gains on sales of investment securities			—				9				—				9
Gains on sales of loans			715				607				2,141				1,315
(Loss) gain on equity securities			(364	)			11				(849	)			(133	)
Other noninterest income			6,712				4,642				12,551				9,837
Merger-related expenses			—				—				(4,585	)			—
Other noninterest expense			(45,068	)			(34,097	)			(90,442	)			(68,000	)
Pretax income			38,653				36,871				59,590				68,097
Provision for income taxes			(9,536	)			(9,464	)			(14,544	)			(17,515	)
Net income		$	29,117			$	27,407			$	45,046			$	50,582
Basic earnings per common share		$	0.44			$	0.53			$	0.69			$	0.99
Diluted earnings per common share		$	0.44			$	0.53			$	0.69			$	0.98
Dividends paid per common share		$	0.145			$	0.135			$	0.280			$	0.260
Weighted average shares - basic			64,828				50,636				64,397				50,606
Weighted average shares - diluted			64,989				50,858				64,615				50,821
Selected Operating Ratios
Annualized return on average assets			1.15	%			1.41	%			0.89	%			1.32	%
Annualized return on average common equity			10.71	%			14.07	%			8.31	%			13.15	%
Annualized return on average tangible common equity (1)			14.45	%			17.67	%			11.16	%			16.55	%
Annualized yield on interest-earning assets			3.61	%			3.57	%			3.42	%			3.57	%
Annualized cost of interest-bearing liabilities			0.40	%			0.42	%			0.37	%			0.47	%
Annualized net interest spread			3.22	%			3.15	%			3.05	%			3.10	%
Annualized net interest margin			3.38	%			3.27	%			3.20	%			3.23	%
Efficiency ratio (1)			50.69	%			51.98	%			54.01	%			52.85	%
Stockholders' equity to total assets											10.51	%			10.14	%
Book value per common share										$	16.82			$	15.74
Tangible book value per common share (1)										$	12.47			$	12.60
Tangible common equity to tangible assets (1)											8.01	%			8.29	%
Asset Quality Ratios										June 30, 2022				June 30, 2021
Ratio of allowance for credit losses to total loans											0.93	%			1.01	%
Non-performing loans to total loans											0.30	%			0.38	%
Non-performing assets to total assets											0.21	%			0.29	%
Annualized net charge-offs to average loans											0.21	%			0.09	%
(1) See Supplemental Information - Non-GAAP Financial Measures

Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)

(dollars in thousands)								June 30, 2022			June 30, 2021
Selected Balance Sheet Data at Period End
Loans								$	7,408,540		$	5,988,832
Allowance for credit losses									68,836			60,389
Investment securities									2,124,213			1,107,601
Total assets									10,374,178			7,854,238
Total deposits									8,501,804			6,715,035
Short-term borrowings									432,206			100,190
Other borrowings									219,027			138,045
Stockholders' equity									1,090,145			796,676
		Three Months Ended June 30,						Six Months Ended June 30,
			2022			2021			2022			2021
Selected Average Balance Sheet Data
Loans		$	7,229,175		$	6,080,408		$	7,125,893		$	6,085,057
Investment securities			2,188,199			1,066,086			2,104,355			1,034,956
Interest-earning assets			9,588,396			7,342,952			9,546,575			7,286,856
Total assets			10,192,140			7,784,385			10,165,437			7,744,714
Noninterest-bearing demand deposits			2,310,702			1,660,825			2,252,693			1,603,714
Savings deposits			1,153,591			639,540			1,142,536			622,331
Interest-bearing transaction accounts			4,369,067			3,495,610			4,384,215			3,442,116
Time deposits			803,421			880,079			841,214			962,042
Total deposits			8,636.781			6,676,054			8,620,658			6,630,203
Short-term borrowings			130.242			85,325			117,508			79,441
Other borrowings			218,958			140,162			218,474			141,703
Total interest-bearing liabilities			6,675,279			5,240,716			6,703,947			5,247,633
Stockholders' equity			1,090,613			781,299			1,093,248			775,808

Lakeland Bancorp, Inc. and Subsidiaries
Consolidated Statements of Income (Unaudited)

		For the Three Months Ended June 30,								For the Six Months Ended June 30,
(in thousands, except per share data)			2022				2021				2022				2021
Interest Income
Loans and fees		$	76,973			$	60,529			$	144,782			$	119,307
Federal funds sold and interest-bearing deposits with banks			235				52				417				89
Taxable investment securities and other			8,285				4,029				14,994				8,010
Tax-exempt investment securities			1,442				631				2,744				1,243
Total Interest Income			86,935				65,241				162,937				128,649
Interest Expense
Deposits			4,829				4,238				8,868				9,362
Federal funds purchased and securities sold under agreements to repurchase			150				16				170				39
Other borrowings			1,654				1,247				3,209				2,780
Total Interest Expense			6,633				5,501				12,247				12,181
Net Interest Income			80,302				59,740				150,690				116,468
Provision (benefit) for credit losses			3,644				(5,959	)			9,916				(8,601	)
Net Interest Income after Provision for Credit Losses			76,658				65,699				140,774				125,069
Noninterest Income
Service charges on deposit accounts			2,711				2,445				5,337				4,741
Commissions and fees			2,555				1,755				4,661				3,353
Income on bank owned life insurance			820				643				1,650				1,277
(Loss) gain on equity securities			(364	)			11				(849	)			(133	)
Gains on sales of loans			715				607				2,141				1,315
Gains on sales of investment securities, net			—				9				—				9
Swap income			399				72				399				634
Other income			227				(273	)			504				(168	)
Total Noninterest Income			7,063				5,269				13,843				11,028
Noninterest Expense
Compensation and employee benefits			26,938				20,407				54,617				40,925
Premises and equipment			7,679				6,078				15,651				12,396
FDIC insurance			672				621				1,344				1,332
Data processing			1,891				1,299				3,561				2,554
Merger related expenses			—				—				4,585				—
Other operating expenses			7,888				5,692				15,269				10,793
Total Noninterest Expense			45,068				34,097				95,027				68,000
Income before provision for income taxes			38,653				36,871				59,590				68,097
Provision for income taxes			9,536				9,464				14,544				17,515
Net Income		$	29,117			$	27,407			$	45,046			$	50,582
Per Share of Common Stock
Basic earnings		$	0.44			$	0.53			$	0.69			$	0.99
Diluted earnings		$	0.44			$	0.53			$	0.69			$	0.98
Dividends		$	0.145			$	0.135			$	0.280			$	0.260

Lakeland Bancorp, Inc.
Consolidated Balance Sheets
(dollars in thousands)		June 30, 2022				December 31, 2021
		(Unaudited)
Assets
Cash		$	195,701			$	199,158
Interest-bearing deposits due from banks			49,765				29,372
Total cash and cash equivalents			245,466				228,530
Investment securities available for sale, at estimated fair value (allowance for credit losses of $2,802 at June 30, 2022 and $83 at December 31, 2021)			1,139,414				769,956
Investment securities held to maturity (estimated fair value of $808,663 at June 30, 2022 and $815,211 at December 31, 2021, allowance for credit losses of $190 at June 30, 2022 and $181 at December 31, 2021)			941,558				824,956
Equity securities, at fair value			17,594				17,368
Federal Home Loan Bank and other membership stocks, at cost			25,647				9,049
Loans held for sale			1,168				1,943
Loans, net of deferred fees			7,408,540				5,976,148
Less: Allowance for credit losses			68,836				58,047
Net loans			7,339,704				5,918,101
Premises and equipment, net			55,456				45,916
Operating lease right-of-use assets			26,244				15,222
Accrued interest receivable			26,339				19,209
Goodwill			271,829				156,277
Other identifiable intangible assets			10,250				2,420
Bank owned life insurance			156,496				117,356
Other assets			117,013				71,753
Total Assets		$	10,374,178			$	8,198,056
Liabilities and Stockholders' Equity
Liabilities
Deposits:
Noninterest-bearing		$	2,330,550			$	1,732,452
Savings and interest-bearing transaction accounts			5,407,212				4,474,144
Time deposits $250 thousand and under			620,720				623,393
Time deposits over $250 thousand			143,322				135,834
Total deposits			8,501,804				6,965,823
Federal funds purchased and securities sold under agreements to repurchase			432,206				106,453
Other borrowings			25,000				25,000
Subordinated debentures			194,027				179,043
Operating lease liabilities			27,639				16,523
Other liabilities			103,357				78,200
Total Liabilities			9,284,033				7,371,042
Stockholders' Equity
Common stock, no par value; authorized 100,000,000 shares; issued 64,924,576 shares and outstanding 64,793,541 shares at June 30, 2022 and issued 50,737,400 shares and outstanding 50,606,365 shares at December 31, 2021			853,206				565,862
Retained earnings			286,063				259,340
Treasury shares, at cost, 131,035 shares at June 30, 2022 and December 31, 2021			(1,452	)			(1,452	)
Accumulated other comprehensive (loss) income			(47,672	)			3,264
Total Stockholders' Equity			1,090,145				827,014
Total Liabilities and Stockholders' Equity		$	10,374,178			$	8,198,056

Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)

		For the Quarter Ended
(dollars in thousands, except per share data)		June 30, 2022				March 31, 2022				December 31, 2021				September 30, 2021				June 30, 2021
Income Statement
Net interest income		$	80,302			$	70,388			$	59,029			$	59,338			$	59,740
(Provision) benefit for credit losses			(3,644	)			(6,272	)			(408	)			2,703				5,959
Gains on sales of investment securities			—				—				—				—				9
Gains on sales of loans			715				1,426				399				550				607
(Loss) gain on equity securities			(364	)			(485	)			(94	)			(58	)			11
Other noninterest income			6,712				5,839				5,559				4,977				4,642
Long-term debt prepayment fees			—				—				—				(831	)			—
Merger-related expenses			—				(4,585	)			(710	)			(1,072	)			—
Other noninterest expense			(45,068	)			(45,374	)			(34,840	)			(35,304	)			(34,097	)
Pretax income			38,653				20,937				28,935				30,303				36,871
Provision for income taxes			(9,536	)			(5,008	)			(6,765	)			(8,014	)			(9,464	)
Net income		$	29,117			$	15,929			$	22,170			$	22,289			$	27,407
Basic earnings per common share		$	0.44			$	0.25			$	0.43			$	0.43			$	0.53
Diluted earnings per common share		$	0.44			$	0.25			$	0.43			$	0.43			$	0.53
Dividends paid per common share		$	0.145			$	0.135			$	0.135			$	0.135			$	0.135
Dividends paid		$	9,507			$	8,809			$	6,921			$	7,001			$	6,828
Weighted average shares - basic			64,828				63,961				50,647				50,637				50,636
Weighted average shares - diluted			64,989				64,238				50,959				50,875				50,858
Selected Operating Ratios
Annualized return on average assets			1.15	%			0.64	%			1.06	%			1.10	%			1.41	%
Annualized return on average common equity			10.71	%			5.89	%			10.70	%			10.94	%			14.07	%
Annualized return on average tangible common equity (1)			14.45	%			7.88	%			13.26	%			13.63	%			17.67	%
Annualized net interest margin			3.38	%			3.02	%			2.98	%			3.10	%			3.27	%
Efficiency ratio (1)			50.69	%			57.77	%			53.19	%			54.02	%			51.98	%
Common stockholders' equity to total assets			10.51	%			10.60	%			10.09	%			9.96	%			10.14	%
Tangible common equity to tangible assets (1)			8.01	%			8.07	%			8.31	%			8.18	%			8.29	%
Tier 1 risk-based ratio			11.12	%			11.34	%			11.15	%			11.19	%			10.78	%
Total risk-based ratio			13.74	%			14.03	%			14.48	%			14.73	%			13.11	%
Tier 1 leverage ratio			9.05	%			8.97	%			8.51	%			8.60	%			8.70	%
Common equity tier 1 capital ratio			10.57	%			10.72	%			10.67	%			10.70	%			10.29	%
Book value per common share		$	16.82			$	16.82			$	16.34			$	16.09			$	15.74
Tangible book value per common share (1)		$	12.47			$	12.45			$	13.21			$	12.95			$	12.60

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

Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)

		For the Quarter Ended
(dollars in thousands)		June 30, 2022				March 31, 2022				December 31, 2021				September 30, 2021				June 30, 2021
Selected Balance Sheet Data at Period End
Loans		$	7,408,540			$	7,137,793			$	5,976,148			$	5,880,802			$	5,988,832
Allowance for credit losses on loans			68,836				67,112				58,047				57,953				60,389
Investment securities			2,124,213				2,139,054				1,621,329				1,248,705				1,107,601
Total assets			10,374,178				10,275,233				8,198,056				8,172,479				7,854,238
Total deposits			8,501,804				8,748,909				6,965,823				6,930,912				6,715,035
Short-term borrowings			432,206				102,911				106,453				111,907				100,190
Other borrowings			219,027				218,904				204,043				212,107				138,045
Stockholders' equity			1,090,145				1,089,282				827,014				814,128				796,676
Loans
Non-owner occupied commercial		$	2,777,003			$	2,639,784			$	2,316,284			$	2,300,637			$	2,330,376
Owner occupied commercial			1,179,527				1,122,754				908,449				884,144				870,535
Multifamily			1,134,938				1,104,206				972,233				907,903				902,394
Non-owner occupied residential			221,339				225,795				177,097				177,592				189,765
Commercial, industrial and other			647,531				620,611				405,832				363,976				358,659
Paycheck Protection Program			10,404				36,785				56,574				109,348				207,045
Construction			370,777				404,186				302,228				332,868				335,167
Equipment financing			134,136				123,943				123,212				119,709				121,096
Residential mortgages			622,417				564,042				438,710				407,021				391,589
Consumer and home equity			310,468				295,687				275,529				277,604				282,206
Total loans		$	7,408,540			$	7,137,793			$	5,976,148			$	5,880,802			$	5,988,832
Deposits
Noninterest-bearing		$	2,330,550			$	2,300,030			$	1,732,452			$	1,724,646			$	1,683,887
Savings and interest-bearing transaction accounts			5,407,212				5,602,674				4,474,144				4,401,367				4,198,709
Time deposits			764,042				846,205				759,227				804,899				832,439
Total deposits		$	8,501,804			$	8,748,909			$	6,965,823			$	6,930,912			$	6,715,035
Total loans to total deposits ratio			87.1	%			81.6	%			85.8	%			84.8	%			89.2	%
Selected Average Balance Sheet Data
Loans		$	7,229,175			$	7,021,462			$	5,902,152			$	5,943,698			$	6,080,408
Investment securities			2,188,199				2,019,578				1,423,650				1,144,356				1,066,086
Interest-earning assets			9,588,396				9,504,287				7,874,181				7,611,259				7,342,952
Total assets			10,192,140				10,138,437				8,332,637				8,070,050				7,784,385
Noninterest-bearing demand deposits			2,310,702				2,194,038				1,775,119				1,702,788				1,660,825
Savings deposits			1,153,591				1,131,359				670,039				653,840				639,540
Interest-bearing transaction accounts			4,369,067				4,399,531				3,862,443				3,701,676				3,495,610
Time deposits			803,421				879,427				781,199				826,831				880,079
Total deposits			8,636,781				8,604,355				7,088,800				6,885,135				6,676,054
Short-term borrowings			130,242				104,633				112,533				108,519				85,325
Other borrowings			218,958				217,983				204,266				162,216				140,162
Total interest-bearing liabilities			6,675,279				6,732,934				5,630,479				5,453,082				5,240,716
Stockholders' equity			1,090,613				1,095,913				822,001				807,956				781,299

Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)

		For the Quarter Ended
(dollars in thousands)		June 30, 2022				March 31, 2022				December 31, 2021				September 30, 2021				June 30, 2021
Average Annualized Yields (Taxable Equivalent Basis) and Costs
Assets
Loans			4.22	%			3.92	%			3.88	%			4.00	%			3.99	%
Taxable investment securities and other			1.81	%			1.60	%			1.60	%			1.68	%			1.72	%
Tax-exempt securities			2.02	%			1.91	%			2.20	%			2.15	%			2.50	%
Federal funds sold and interest-bearing cash accounts			0.55	%			0.16	%			0.14	%			0.12	%			0.11	%
Total interest-earning assets			3.61	%			3.25	%			3.22	%			3.40	%			3.57	%
Liabilities
Savings accounts			0.18	%			0.17	%			0.05	%			0.05	%			0.05	%
Interest-bearing transaction accounts			0.33	%			0.25	%			0.24	%			0.30	%			0.32	%
Time deposits			0.39	%			0.40	%			0.51	%			0.55	%			0.61	%
Borrowings			2.04	%			1.95	%			1.55	%			2.33	%			2.22	%
Total interest-bearing liabilities			0.40	%			0.34	%			0.33	%			0.41	%			0.42	%
Net interest spread (taxable equivalent basis)			3.22	%			2.92	%			2.89	%			2.99	%			3.15	%
Annualized net interest margin (taxable equivalent basis)			3.38	%			3.02	%			2.98	%			3.10	%			3.27	%
Annualized cost of deposits			0.22	%			0.19	%			0.19	%			0.23	%			0.25	%
Loan Quality Data
Allowance for Credit Losses on Loans
Balance at beginning of period		$	67,112			$	58,047			$	57,953			$	60,389			$	67,252
Initial allowance for credit losses on purchased credit deteriorated loans			—				12,077				—				—				—
Charge-offs on purchased credit deteriorated loans			—				(7,634	)			—				—				—
Provision (benefit) for credit losses on loans			1,583				4,630				(87	)			(2,705	)			(5,314	)
Charge-offs			(365	)			(170	)			(461	)			(969	)			(1,862	)
Recoveries			506				162				642				1,238				313
Balance at end of period		$	68,836			$	67,112			$	58,047			$	57,953			$	60,389
Net Loan Charge-Offs (Recoveries)
Non owner occupied commercial		$	(4	)		$	4			$	—			$	6			$	1,649
Owner occupied commercial			(337	)			24				(1	)			(80	)			(9	)
Multifamily			—				—				—				28				—
Non owner occupied residential			—				(14	)			(136	)			(5	)			(8	)
Commercial, industrial and other			272				778				(449	)			(265	)			5
Construction			—				6,804				(4	)			50				(42	)
Equipment finance			(40	)			82				60				139				4
Residential mortgages			—				(48	)			49				27				(82	)
Consumer and home equity			(32	)			12				300				(169	)			32
Net (recoveries) charge-offs		$	(141	)		$	7,642			$	(181	)		$	(269	)		$	1,549

Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)

		For the Quarter Ended
(dollars in thousands)		June 30, 2022				March 31, 2022				December 31, 2021				September 30, 2021				June 30, 2021
Non-Performing Assets (1)
Non owner occupied commercial		$	324			$	5,482			$	3,009			$	4,748			$	11,427
Owner occupied commercial			12,587				2,626				2,810				4,656				7,152
Multifamily			—				—				—				—				195
Non owner occupied residential			839				2,430				2,852				922				1,305
Commercial, industrial and other			4,882				6,098				6,763				1,108				1,449
Construction			—				220				—				—				515
Equipment finance			112				51				43				238				264
Residential mortgages			2,249				1,935				817				123				—
Consumer and home equity			1,168				898				687				453				308
Total non-performing assets		$	22,161			$	19,740			$	16,981			$	12,248			$	22,615
Loans past due 90 days or more and still accruing		$	—			$	—			$	1			$	—			$	—
Loans restructured and still accruing		$	3,189			$	3,290			$	3,342			$	3,414			$	3,295
Ratio of allowance for loan losses to total loans			0.93	%			0.94	%			0.97	%			0.99	%			1.01	%
Total non-accrual loans to total loans			0.30	%			0.28	%			0.28	%			0.21	%			0.38	%
Total non-performing assets to total assets			0.21	%			0.19	%			0.21	%			0.15	%			0.29	%
Annualized net (recoveries) charge-offs to average loans			(0.01	)%			0.44	%			(0.01	)%			(0.02	)%			0.10	%

(1) Includes non-accrual purchased credit deteriorated loans.

Lakeland Bancorp, Inc.
Supplemental Information - Non-GAAP Financial Measures
(Unaudited)

		At or for the Quarter Ended
(dollars in thousands, except per share amounts)		June 30, 2022				March 31, 2022				December 31, 2021				September 30, 2021				June 30, 2021
Calculation of Tangible Book Value Per Common Share
Total common stockholders' equity at end of period - GAAP		$	1,090,145			$	1,089,282			$	827,014			$	814,128			$	796,676
Less: Goodwill			271,829				271,829				156,277				156,277				156,277
Less: Other identifiable intangible assets			10,250				10,842				2,420				2,631				2,841
Total tangible common stockholders' equity at end of period - Non-GAAP		$	808,066			$	806,611			$	668,317			$	655,220			$	637,558
Shares outstanding at end of period			64,794				64,780				50,606				50,602				50,601
Book value per share - GAAP		$	16.82			$	16.82			$	16.34			$	16.09			$	15.74
Tangible book value per share - Non-GAAP		$	12.47			$	12.45			$	13.21			$	12.95			$	12.60
Calculation of Tangible Common Equity to Tangible Assets
Total tangible common stockholders' equity at end of period - Non-GAAP		$	808,066			$	806,611			$	668,317			$	655,220			$	637,558
Total assets at end of period - GAAP		$	10,374,178			$	10,275,233			$	8,198,056			$	8,172,479			$	7,854,238
Less: Goodwill			271,829				271,829				156,277				156,277				156,277
Less: Other identifiable intangible assets			10,250				10,842				2,420				2,631				2,841
Total tangible assets at end of period - Non-GAAP		$	10,092,099			$	9,992,562			$	8,039,359			$	8,013,571			$	7,695,120
Common equity to assets - GAAP			10.51	%			10.60	%			10.09	%			9.96	%			10.14	%
Tangible common equity to tangible assets - Non-GAAP			8.01	%			8.07	%			8.31	%			8.18	%			8.29	%
Calculation of Return on Average Tangible Common Equity
Net income - GAAP		$	29,117			$	15,929			$	22,170			$	22,289			$	27,407
Total average common stockholders' equity - GAAP		$	1,090,613			$	1,095,913			$	822,001			$	807,956			$	781,299
Less: Average goodwill			271,829				265,409				156,277				156,277				156,277
Less: Average other identifiable intangible assets			10,569				10,851				2,544				2,758				2,979
Total average tangible common stockholders' equity - Non-GAAP		$	808,215			$	819,653			$	663,180			$	648,921			$	622,043
Return on average common stockholders' equity - GAAP			10.71	%			5.89	%			10.70	%			10.94	%			14.07	%
Return on average tangible common stockholders' equity - Non-GAAP			14.45	%			7.88	%			13.26	%			13.63	%			17.67	%
Calculation of Efficiency Ratio
Total noninterest expense		$	45,068			$	49,959			$	35,550			$	37,207			$	34,097
Less:
Amortization of core deposit intangibles			593				596				210				211				221
Merger-related expenses			—				4,585				710				1,072				—
Long term debt extinguishment costs			—				—				—				831				—
Noninterest expense, as adjusted		$	44,475			$	44,778			$	34,630			$	35,093			$	33,876
Net interest income		$	80,302			$	70,388			$	59,029			$	59,338			$	59,740
Total noninterest income			7,063				6,780				5,864				5,469				5,269
Total revenue			87,365				77,168				64,893				64,807				65,009
Tax-equivalent adjustment on municipal securities			382				346				213				157				167
Gains on sales of investment securities			—				—				—				—				9
Total revenue, as adjusted		$	87,747			$	77,514			$	65,106			$	64,964			$	65,167
Efficiency ratio - Non-GAAP			50.69	%			57.77	%			53.19	%			54.02	%			51.98	%

Lakeland Bancorp, Inc.
Supplemental Information - Non-GAAP Financial Measures
(Unaudited)

		For the Six Months Ended June 30,
(dollars in thousands)			2022				2021
Calculation of Return on Average Tangible Common Equity
Net income - GAAP		$	45,046			$	50,582
Total average common stockholders' equity - GAAP		$	1,093,249			$	775,808
Less: Average goodwill			268,637				156,277
Less: Average other identifiable intangible assets			10,709				3,085
Total average tangible common stockholders' equity - Non-GAAP		$	813,903			$	616,446
Return on average common stockholders' equity - GAAP			8.31	%			13.15	%
Return on average tangible common stockholders' equity - Non-GAAP			11.16	%			16.55	%
Calculation of Efficiency Ratio
Total noninterest expense		$	95,027			$	68,000
Less:
Amortization of core deposit intangibles			1,189				447
Merger-related expenses			4,585				—
Noninterest expense, as adjusted		$	89,253			$	67,553
Net interest income		$	150,690			$	116,468
Noninterest income			13,843				11,028
Total revenue		$	164,533			$	127,496
Tax-equivalent adjustment on municipal securities			729				330
Less: Gains on sales of investment securities			—				9
Total revenue, as adjusted		$	165,262			$	127,817
Efficiency ratio - Non-GAAP			54.01	%			52.85	%

 

FAQ

What were Lakeland Bancorp's net income and EPS for Q2 2022?

Lakeland Bancorp reported net income of $29.1 million and earnings per diluted share of $0.44 for Q2 2022.

How did Lakeland Bancorp's annualized return on average assets change in Q2 2022?

The annualized return on average assets for Q2 2022 was 1.15%.

What contributed to the loan growth reported by LBAI in Q2 2022?

Loan growth of $270.7 million in Q2 2022 was attributed to both commercial and consumer portfolio expansion.

What is the net interest margin for Lakeland Bancorp for Q2 2022?

The net interest margin for Q2 2022 increased to 3.38%.

How much did Lakeland Bancorp increase its noninterest expense in Q2 2022?

Noninterest expense increased by $11.0 million in Q2 2022 compared to Q2 2021.