Lakeland Bancorp Reports First Quarter 2011 Results

/ Source: GlobeNewswire

OAK RIDGE, N.J., April 14, 2011 (GLOBE NEWSWIRE) -- Lakeland Bancorp, Inc. (Nasdaq:LBAI) reported the following results for the first quarter of 2011:

  • Net Income in the first quarter of 2011 was $4.8 million, a 4% increase as compared to the $4.6 million reported for the same period last year. Net Income Available to Common Shareholders was $3.5 million or $0.14 per diluted share for the first quarter of 2011, as compared to $3.7 million or $0.15 per diluted share for the same period last year. However, in March 2011, the Company repaid $20.0 million to the U.S. Department of the Treasury to repurchase Preferred Stock under the Capital Purchase Program ("CPP"). In doing so, a non-cash charge of $745,000 was incurred due to the acceleration of the Preferred Stock discount accretion. The effect of this one-time charge was ($0.03) per diluted share.
  • In the first quarter of 2011, net interest margin ("NIM") remained strong at 3.91%. This compared to the NIM of 3.93% reported in the fourth quarter of 2010.
  • Noninterest bearing demand deposits of $407.1 million at March 31, 2011 increased by $23.2 million, or 6%, from year-end 2010, and now represents 18% of total deposits.
  • The efficiency ratio, a non-GAAP measure, for the first quarter of 2011 was 56.7%, which approximated the efficiency ratio for the same period in 2010, reflecting continued management of expenses in 2011.
  • The provision for loan and lease losses in the first quarter of 2011 was $4.9 million. Net charge-offs in the first quarter of 2011 were $4.1 million, while the loan loss reserve as a percentage of total loans increased to 1.43% at March 31, 2011, as compared to 1.36% at year-end 2010.
  • The Company declared a quarterly cash dividend of $0.06 per common share. The cash dividend will be paid on May 16, 2011 to holders of record as of the close of business on April 29, 2011. The Company also declared a dividend of 5% for the quarterly dividend payment due May 16, 2011 for the preferred stock issued to the U.S. Department of the Treasury under the CPP.

Thomas J. Shara, Lakeland Bancorp's President and CEO said, "In the first quarter of 2011, we continued the positive trend of favorable financial results, maintaining a net interest margin in excess of 3.90%, while continuing to bolster the loan loss coverage ratio. As a result of repaying the second $20 million under the CPP this quarter, our earnings will be further enhanced by an annualized $1.2 million due to the elimination of the associated preferred dividends and related discount accretion."

Earnings

Net Interest Income

Net interest income for the first quarter of 2011 was $24.6 million, which was equivalent to the net interest income for the same period last year. Net interest margin at 3.91% was comparable to the 3.93% reported in the fourth quarter of 2010 and eight basis points lower than 3.99% reported in the first quarter of 2010.  This strong net interest margin continues to be driven by the low cost of funds. The Company's yield on interest-earning assets in the first quarter of 2011 was 4.74%, a decrease of 40 basis points from the same period in 2010 and seven basis points lower than the fourth quarter of 2010. The cost of interest-bearing liabilities was 1.00%, a decrease of 36 basis points from the first quarter of 2010 and seven basis points from the fourth quarter of 2010. 

Noninterest income

Noninterest income totaled $4.2 million for the first quarter of 2011, an increase of $121,000, or 3%, as compared to the same period in 2010. Service charges on deposits at $2.5 million were equivalent to the total for the first quarter of 2010, while commissions and fees at $832,000 decreased by $53,000. Gains on leasing related assets were $463,000 in the first quarter of 2011 as compared to gains of $304,000 in the first quarter of 2010.

Noninterest expense

Noninterest expense for the first quarter of 2011 was $17.0 million, compared to $16.8 million for the same period in 2010. Salary and benefit expense at $9.0 million was equivalent to the total for the first three months of 2010. Net occupancy, furniture and equipment expenses at $3.1 million were $110,000 higher than last year primarily due to increased costs for snow removal in 2011. Collection and legal expenses decreased by $83,000 and $46,000, respectively, while expenses on other real estate owned and other repossessed assets at $272,000, increased by $235,000.

Financial Condition

At March 31, 2011, total assets were $2.8 billion, a $41.1 million decrease from year-end 2010. Total loans at $2.0 billion were $36.8 million lower than at December 31, 2010. Of the overall decrease, leasing loans decreased by $21.1 million in the first quarter of 2011, primarily due to a $16.3 million sale of leasing loans. Total deposits at $2.2 billion increased by $42.6 million, or 2%, from year-end 2010. Noninterest bearing demand deposits at $407.1 million and savings and interest-bearing transaction accounts at $1.4 billion increased by $23.2 million and $15.4 million, respectively, from year-end 2010.  

Asset Quality

At March 31, 2011, non-performing assets totaled $50.4 million (1.83% of total assets), as compared to $44.6 million (1.60% of total assets) as of December 31, 2010. The Allowance for Loan and Lease Losses totaled $28.2 million at March 31, 2011, and represented 1.43% of total loans, compared to 1.36% at year-end 2010. During the first quarter of 2011, the Company had net charge-offs of $4.1 million (annualized 0.81% of total loans).    

Capital

Stockholders' equity was $245.1 million and book value per common share was $8.90 as of March 31, 2011. As of March 31, 2011, the Company's leverage ratio was 7.79%. Tier I and total risk based capital ratios were  10.72% and 13.10%, 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-seven (47) 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: Thomas J. Shara President & CEO Joseph F. Hurley EVP & CFO 973-697-2000