OAK RIDGE, N.J., Oct. 14, 2010 (GLOBE NEWSWIRE) -- Lakeland Bancorp, Inc. (Nasdaq:LBAI) reported the following developments in the third quarter of 2010:
- Net Income in the third quarter of 2010 totaled $4.9 million, which compared to $2.0 million for the same period last year. Net Income Available to Common Shareholders was $3.3 million or $0.14 per diluted share for the third quarter of 2010, as compared to $1.1 million, or $0.05 per diluted share reported in the third quarter of 2009.
- As previously reported, the Company repaid $20.0 million of the previously outstanding $59.0 million in preferred stock to the U.S. Department of the Treasury under the Capital Purchase Program in the third quarter of 2010. This repayment will result in annualized savings of $1.2 million due to the elimination of the associated preferred dividends and related discount accretion. A non-cash charge of $898,000 was recorded in the third quarter of 2010, reflecting the acceleration of the preferred stock discount accretion related to the preferred stock repaid. This charge had an impact of ($0.04) per diluted share in the third quarter 2010 results.
- The Company declared a quarterly cash dividend of $0.06 per common share, an increase of $0.01 per common share from the previous quarter. The cash dividend will be paid on November 15, 2010 to holders of record as of the close of business on October 29, 2010. The Company also declared a dividend of 5% for the quarterly dividend payment due November 15, 2010 for the remaining preferred stock issued to the U.S. Department of the Treasury under the Capital Purchase Program.
- In the third quarter of 2010, net interest margin at 3.93% was 31 basis points higher than 3.62% reported in the same period last year. This improvement in net interest margin from the same period last year was a result of a 9% increase in net interest income, which resulted primarily from a 37% decrease in interest expense.
- Noninterest bearing demand deposits at $379.6 million increased by $21.6 million or 6% from June 30, 2010 and by $56.5 million, or 17%, from year-end 2009. Core deposits represented 80% of total deposits at September 30, 2010 as compared to 78% at year-end 2009.
- The efficiency ratio, a non-GAAP measure, was 56.4% in the third quarter of 2010 as compared to 62.1% for the same period last year.
Net Income for the first nine months of 2010 was $14.2 million, compared to a Net Loss of ($7.5) million for the same period last year. Net Income Available to Common Shareholders for the first nine months of 2010 was $10.8 million or $0.45 per diluted share, as compared to a loss of ($9.8) million or ($0.42) per diluted share for the first nine months of 2009.
Thomas J. Shara, Lakeland Bancorp's President and CEO said, "We are pleased to report a significant increase in Net Income this quarter as compared to the third quarter last year, which was driven by an improved net interest margin and controlled management of expenses. In recognition of the strong results this year, we are pleased to reward our loyal shareholders with an increase in the quarterly cash dividend. Additionally, we are very excited to introduce a new brand identity for Lakeland Bank. This new "look", which will appear in all of our marketing communications, enhances our community banking model, which offers individualized service to both retail and commercial customers alike."
Earnings
Net Interest Income
Net interest income for the third quarter of 2010 was $25.0 million, or 9% greater than the $23.0 million earned in the third quarter of 2009. Net interest margin increased by 31 basis points to 3.93% from 3.62% reported in the third quarter of 2009. The increase in net interest margin was primarily driven by the continued decrease in the cost of funds. The Company's yield on interest-earning assets in the third quarter of 2010 was 4.93%, a decrease of 25 basis points from the same period last year and eight basis points lower than the second quarter of 2010. The cost of interest-bearing liabilities was 1.18%, a decrease of 66 basis points from the third quarter of 2009 and seven basis points from the second quarter of 2010.
Year-to-date, net interest income was $74.5 million, or 9% higher than the $68.4 million reported for the first nine months of 2009. Net interest margin for the first nine months of 2010 at 3.96% compared to 3.68% for the same period last year. The Company's yield on earning assets decreased 36 basis points from 5.38% for the first nine months of 2009, to 5.02% for the same period this year. The Company's cost of interest bearing liabilities decreased 74 basis points from 2.00% for the first nine months of 2009 to 1.26% for the first nine months of 2010.
Noninterest income
Noninterest income, excluding net gains on investment securities, totaled $4.4 million for the third quarter of 2010, as compared to $3.6 million for the same period last year. In the third quarter of 2010, there were $1.7 million in net gain on sales of investment securities as compared to no gains or losses in the third quarter of 2009. Service charges on deposits at $2.7 million decreased by $90,000, while commissions and fees at $965,000 decreased by 8% primarily due to reduced loan fees. Gains on leasing related assets were $312,000 in the third quarter of 2010 as compared to losses of $709,000 in the third quarter of 2009.
Noninterest income for the first nine months of 2010, excluding gains on the sale of investment securities, totaled $13.1 million, as compared to $11.6 million for the same period last year. Net gains on investment securities for the first nine months of 2010 were $1.7 million as compared to gains of $353,000 for the same period last year. Service charges on deposit accounts at $7.6 million were $508,000 or 6% lower than the first nine months of 2009, primarily due to lower overdraft fees collected. Gains on leasing related assets were $1.2 million in the first nine months of 2010 as compared to losses of $1.1 million in the first nine months of 2009. Income on bank owned life insurance at $1.1 million decreased by $326,000 as compared to the first nine months of 2009 as the Company received an insurance benefit on a bank owned life insurance policy in 2009.
Noninterest expense
Noninterest expense for the third quarter of 2010 was $19.0 million compared to $17.1 million for the same period last year. Included in noninterest expense in the third quarter of 2010 was a $1.8 million fee on the prepayment of $30.0 million in long-term debt, at an average rate of 5.02%. Excluding this item, noninterest expenses at $17.1 million were equivalent to the total reported for the same period last year. Salary and benefit expense at $9.1 million was $528,000, or 6% higher than the same period last year. Collection expenses for the third quarter of 2010 at $188,000 and marketing expenses at $511,000, decreased by $217,000 and $156,000, respectively, as compared to the same period last year.
For the first nine months of 2010, noninterest expense at $52.8 million compared to $53.5 million for the first nine months of 2009. Included in the total for 2010 is the $1.8 million prepayment fee previously mentioned, while in 2009 noninterest expense included a $1.2 million industry-wide special FDIC assessment and a $704,000 expense incurred relating to the pretax payout on a life insurance benefit. Excluding these items, non-interest expenses in 2010 at $51.0 million were $539,000 lower than $51.5 million reported last year. Collection expenses at $495,000 and expenses on other real estate owned and other repossessed assets at $354,000, decreased by $792,000 and $563,000, respectively, while legal expenses at $1.2 million increased by $521,000 as compared to the same period last year.
Financial Condition
At September 30, 2010, total assets were $2.8 billion, a $45.5 million increase from year-end 2009. Total loans at $2.0 billion decreased by $30.0 million from December 31, 2009. This decrease was primarily due to a $41.0 million, or 34%, decrease in leasing loans, which totaled $79.5 million at September 30, 2010. Residential mortgage loans at $403.0 million and commercial and industrial loans at $173.2 million, increased in the first nine months of 2010 by $20.2 million and $4.7 million, respectively. Total deposits at $2.2 billion increased by $77.6 million, or 4% from year-end 2009. Noninterest bearing demand deposits at $379.6 million and savings and interest-bearing transaction accounts at $1.41 billion have increased by $56.5 million and $44.8 million, respectively. This increase was partially offset by a decrease in time deposits of $23.7 million. The loan-to-deposit ratio on September 30, 2010 was 89%, which compared to 93% on September 30, 2009.
Asset Quality
At September 30, 2010, non-performing assets totaled $45.2 million (1.63% of total assets). The Allowance for Loan and Lease Losses totaled $27.2 million at September 30, 2010, and represented 1.37% of total loans. During the third quarter of 2010, the Company had net charge-offs of $5.4 million (annualized 1.09% of total loans).
Capital
Stockholders' equity was $260.7 million and book value per common share was $9.28 as of September 30, 2010. As of September 30, 2010, the Company's leverage ratio was 9.14%. Tier I and total risk based capital ratios were 12.44% and 13.69%, respectively. These regulatory capital ratios exceed those necessary to be considered a well-capitalized institution under Federal guidelines.
Forward-Looking Statements
The information disclosed in this document includes various forward-looking statements (with respect to corporate objectives, trends, and other financial and business matters) 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. Lakeland 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. 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 affecting the financial services industry, government intervention in the U.S. financial system, passage by the U.S. Congress of legislation which unilaterally amends the terms of the U.S. Department of the Treasury's preferred stock investment in the Company, changes in levels of market interest rates, pricing pressures on loan and deposit products, credit risks of the Company's lending and leasing activities, customers' acceptance of the Company's products and services and competition. Any statements made by Lakeland that are not historical facts should be considered to be forward-looking statements. Lakeland 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 accounting principles generally accepted in the United States of America ("GAAP"). The Company's management believes that the supplemental non-GAAP information, which consists of measurements and ratios based on tangible equity and tangible assets, is utilized by regulators and market analysts to evaluate a company's financial condition and therefore, such information is useful to investors. 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.
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, expenses on other real estate owned and other repossessed assets and, where applicable, long-term debt prepayment fees. Income for the non-GAAP ratio is increased by the favorable effect of tax-exempt income and excludes securities gains and losses, which can vary from period to period. The Company uses this ratio because it believes the ratio provides a better comparison of period to period operating performance.
Lakeland Bancorp, the holding company for Lakeland Bank, has a current asset base of $2.8 billion and forty-eight (48) offices spanning six northwestern New Jersey counties: Bergen, Essex, Morris, Passaic, Sussex and Warren. Lakeland Bank, headquartered at 250 Oak Ridge Road, Oak Ridge, New Jersey offers an extensive array of consumer and commercial products and services, including online banking, localized commercial lending teams, and 24-hour or less turnaround time on consumer loan applications. For more information about their full line of products and services, visit their website at .
CONTACT: Lakeland Bancorp, Inc. Thomas J. Shara, President & CEO Joseph F. Hurley, EVP & CFO 973-697-2000