OAK RIDGE, N.J., July 12 /PRNewswire-FirstCall/ -- Lakeland Bancorp, Inc. (Nasdaq: LBAI) reported second quarter Net Income of $5.5 million , an increase of $469,000 , or 9%, compared to the same period last year. Diluted Earnings Per Share was $0.25 , compared to the $0.23 reported in the second quarter of 2006. (All per share information have been adjusted for a 5% stock dividend paid on August 16 , 2006.) Annualized Return on Average Assets was 0.97% and Annualized Return on Average Equity was 10.90% for the second quarter of 2007.
Net Income for the first six months of 2007 was $9.9 million , an increase of $147,000 from the $9.7 million reported for the same period last year. Diluted Earnings Per Share was $0.45 as compared to a $0.44 diluted EPS for the first six months of 2006. Return on Average Assets was 0.87% and Return on Average Equity was 9.92% for the first half of 2007.
Lakeland Bancorp also announced that it has declared a quarterly cash dividend of $0.10 per common share. The cash dividend will be paid on August 15, 2007 to holders of record as of the close of business on July 31, 2007 .
Earnings
Net Interest Income
Net interest income for the second quarter of 2007 was $17.5 million compared to the $16.7 million earned in the second quarter of 2006. Net interest margin for the second quarter of 2007 was 3.45% as compared to 3.48% in the second quarter of 2006, and 3.46% in the first quarter of 2007. Average earning assets rose 5%. The yield on interest-earning assets increased by 46 basis points to 6.40% in the second quarter of 2007 from 5.94% for the same period last year. The cost of interest bearing liabilities increased 58 basis points from 2.89% in the second quarter of 2006 to 3.47% in the second quarter of 2007. The yield for interest-earning assets reflects improved asset mix with average securities representing only 18% of average total assets down from 28% in the second quarter of 2006. The increased liability cost was due to changes in liability mix and the impact of the Trust Preferred issuance.
Year-to-date, net interest income was $34.6 million , or 4% higher than the $33.3 million reported for the first six months of 2006. Net interest margin for the first half of 2007 at 3.45% compared to 3.47% for the same period last year, while average earning assets rose 4%. The Company's yield on earning assets increased from 5.85% for the first six months of 2006, to 6.41% for the first six months of 2007. The Company's cost of interest bearing liabilities increased from 2.78% for the first six months of 2006, to 3.45% for the first six months of 2007.
Noninterest Income
Noninterest income including gains on investment securities totaled $5.9 million , compared to the $4.3 million reported in the second quarter of 2006. Included in noninterest income for the second quarter 2007 was a $1.8 million gain on investment securities in the Company's portfolio. In the second quarter of 2006, there were no gains on sales of investment securities. Exclusive of the gains on investment securities, noninterest income for the second quarter of 2007 totaled $4.1 million , as compared to $4.3 million for the same period last year. Service charges on deposit accounts totaling $2.6 million decreased by $88,000 in the second quarter of 2007, as compared to the same period last year primarily due to lower overdraft fees. Commissions and fees at $785,000 decreased by $135,000 primarily due to lower loan fees and investment commission income, while leasing income decreased by $125,000 to $157,000 as the Company has been retaining leasing assets in the bank's loan portfolio.
Noninterest income, including gains on investment securities, totaled $10.1 million for the first six months of 2007, as compared to $8.8 million for the same period last year. Gains on investment securities were $1.8 million for the first six months of 2007, as compared to $78,000 for the first six months of 2006. Exclusive of the gains on investment securities, noninterest income for the first half of 2007 totaled $8.3 million , as compared to $8.7 million for the same period last year. Service charges on deposit accounts decreased $114,000 to $5.2 million ; commissions and fees decreased by $250,000 to $1.6 million , primarily due to reduced loan fees; leasing income decreased $165,000 to $298,000 ; while other income increased $84,000 to $659,000 .
Noninterest Expense
Noninterest expense for the second quarter of 2007 was $14.4 million , as compared to $13.4 million in the second quarter of 2006. Salary and benefit expense at $8.1 million increased by $426,000 , or 6%, primarily due to an increase in employee commission expense reflecting increased leasing business, as well as normal salary and benefit increases. Occupancy, furniture and equipment expenses at $2.5 million increased 5%, as the Company opened two new branch locations in the second quarter of 2007. The remaining noninterest expense categories increased by $468,000 to $3.8 million in the second quarter of 2007. This increase was primarily due to higher legal fees and marketing expenses as compared to the same period last year.
For the first six months of 2007, noninterest expense was $28.8 million , compared to $27.2 million in 2006. Salary and benefit costs increased by $950,000 or 6%, to $16.3 million . Occupancy, furniture and equipment expenses increased by $225,000 to $5.2 million . The remaining expense categories increased by $377,000 , or 5%, primarily due to increased legal fees and marketing expenses.
Financial Condition
At June 30, 2007 , total assets were $2.34 billion . Total loans were $1.71 billion , up $123.4 million or 8% from $1.59 billion at year-end 2006. Included in this increase were leasing assets, commercial loans and residential mortgage loans, which increased by $66.5 million , $45.9 million , and $12.5 million , respectively. Total deposits were $1.88 billion , an increase of $16.9 million from December 31, 2006 . The loan-to-deposit ratio on June 30, 2007 was 91.0%, as compared to 85.2% on December 31, 2006 . Core deposits, which are defined as noninterest bearing deposits and savings and interest bearing transaction accounts, amounted to $1.36 billion and represented 73% of total deposits at June 30, 2007 .
Asset Quality
At June 30, 2007 , non-performing assets totaled $8.0 million (0.34% of total assets). The Allowance for Loan and Lease Losses totaled $14.0 million at June 30, 2007 and represented 0.82% of total loans. During the first half of 2007, the Company had net charge-offs of $757,000 (0.09% of total loans) as compared to $758,000 (0.11% of total loans) during the first half of 2006. The Allowance for Loan and Lease Losses at June 30, 2007 was 174% of non- performing loans.
Capital
Stockholders' equity was $204.1 million and book value per common share was $9.23 . As of June 30, 2007 , the Company's leverage ratio was 8.48%. Tier I and total risk based capital ratios were 10.69% and 11.79%, respectively. These regulatory capital ratios exceed those necessary to be considered a well-capitalized institution under Federal guidelines. In the second quarter of 2007, the Company completed the issuance of $20.6 million in Trust Preferred subordinated debentures.
Forward-Looking Statements
The information disclosed in this document includes various forward- looking statements (with respect to corporate objectives, 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: operational factors relating to the performance of Lakeland Bank, market conditions, competitive conditions and general economic conditions. 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
Non-GAAP Financial Measures
The attached table refers to a performance measure, return on tangible equity, which has been determined by methods other than in accordance with GAAP. 'Return on tangible equity' is defined as net income as a percentage of average total equity reduced by recorded intangible assets. This measure may be important to investors that are interested in analyzing our return on equity exclusive of the effect of changes in intangible assets on equity. The disclosure of return on tangible equity should not be viewed as a substitute for results determined in accordance with GAAP, and is not necessarily comparable to non-GAAP performance measures which may be presented by other companies. The following reconciliation table provides a more detailed analysis of this non-GAAP performance measure.
For the three months For the six months
ended June 30, ended June 30,
2007 2006 2007 2006
Annualized Return
on average equity 10.90% 10.74% 9.92% 10.37%
Annualized Effect
of intangible equity 8.93% 10.38% 8.31% 9.99%
Annualized Return
on tangible equity 19.83% 21.12% 18.23% 20.36%
Lakeland Bancorp, the holding company for Lakeland Bank, has a current asset base of $2.3 billion and fifty (50) offices spanning six northwestern New Jersey counties: Bergen , Essex, Morris, Passaic, Sussex and Warren. Lakeland Bank, headquartered at 250 Oak Ridge Road, Oak Ridge, offers an extensive array of consumer and commercial products and services, including online banking, localized commercial lending teams, equipment leasing, 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 www.lakelandbank.com.
Lakeland Bancorp, Inc.
Financial Highlights
(unaudited)
Three months ended Six months ended
June 30, June 30,
2007 2006 2007 2006
(Dollars in thousands except per
share amounts)
INCOME STATEMENT
Net Interest Income $17,545 $16,721 $34,634 $33,269
Provision for Loan and Lease Losses (671) (319) (1,273) (651)
Noninterest Income (excluding
investment securities gains) 4,092 4,324 8,313 8,723
Gain on investment securities 1,769 - 1,769 78
Noninterest Expense (14,435) (13,417) (28,762) (27,210)
Pretax Income 8,300 7,309 14,681 14,209
Tax Expense (2,776) (2,254) (4,787) (4,462)
Net Income $5,524 $5,055 $9,894 $9,747
Basic Earnings Per Share * $0.25 $0.23 $0.45 $0.44
Diluted Earnings Per Share * $0.25 $0.23 $0.45 $0.44
Dividends per share * $0.10 $0.095 $0.20 $0.19
Weighted Average Shares - Basic * 22,111 22,018 22,093 22,062
Weighted Average Shares - Diluted * 22,186 22,155 22,172 22,212
SELECTED OPERATING RATIOS
Annualized Return on Average Assets 0.97% 0.93% 0.87% 0.89%
Annualized Return on Average Equity 10.90% 10.74% 9.92% 10.37%
Annualized Return on Tangible Equity** 19.83% 21.12% 18.23% 20.36%
Annualized Return on Interest Earning
Assets 6.40% 5.94% 6.41% 5.85%
Annualized Cost of funds 3.47% 2.89% 3.45% 2.78%
Annualized Net interest spread 2.93% 3.05% 2.96% 3.07%
Annualized Net interest margin 3.45% 3.48% 3.45% 3.47%
Efficiency ratio*** 64.33% 60.79% 64.44% 61.78%
Stockholders' equity to total assets 8.73% 8.45%
Book value per share * $9.23 $8.61
ASSET QUALITY RATIOS
Ratio of net charge-offs to average
loans 0.09% 0.11%
Ratio of allowance to total loans 0.82% 0.92%
Non-performing loans to total loans 0.47% 0.28%
Non-performing assets to total assets 0.34% 0.18%
Allowance to non-performing loans 174% 326%
SELECTED BALANCE SHEET DATA AT PERIOD-END
06/30/2007 12/31/2006
Loans and Leases $1,709,092 $1,585,716
Allowance for Loan and Lease Losses (13,969) (13,454)
Investment Securities 407,583 423,347
Total Assets 2,339,256 2,263,573
Total Deposits 1,877,489 1,860,627
Short-Term Borrowings 65,304 41,061
Long-Term Debt 178,177 148,413
Stockholders' Equity 204,105 199,500
SELECTED AVERAGE BALANCE SHEET DATA
For the three months For the six months
ended ended
06/30/2007 06/30/2006 06/30/2007 06/30/2006
Loans and Leases, net $1,665,478 $1,375,278 $1,634,257 $1,346,613
Investment Securities 402,662 604,928 410,451 638,800
Interest-Earning Assets 2,088,783 1,989,469 2,071,104 1,995,342
Total Assets 2,295,937 2,191,416 2,281,310 2,199,513
Core Deposits 1,360,340 1,334,869 1,354,451 1,331,962
Time Deposits 511,440 449,246 512,406 451,661
Total Deposits 1,871,780 1,784,115 1,866,857 1,783,623
Short-Term Borrowings 58,451 87,605 53,769 104,917
Long-Term Debt 79,805 62,003 82,352 52,720
Subordinated Debentures 67,126 56,703 61,943 56,703
Total Interest-Bearing
Liabilities 1,776,751 1,692,680 1,770,171 1,703,886
Stockholders' Equity 203,360 188,815 201,221 189,566
* Retroactively Adjusted for 5% stock dividend payable on August 16,
2006 to shareholders of record July 29, 2006.
** This ratio is a Non-GAAP Financial Measure: an explanation and
reconciliation are presented elsewhere in this press release.
*** Represents non-interest expense, excluding other real estate expense
and core deposit amortization , as a percentage of total revenue
(calculated on a tax equivalent basis), excluding gains (losses) on
sales of securities. Total revenue represents net interest income
(calculated on a tax equivalent basis) plus non-interest income.
Lakeland Bancorp, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
ASSETS 2007 2006
(dollars in thousands) (unaudited)
Cash and due from banks $44,968 $47,888
Federal funds sold and interest-
bearing deposits due from banks 3,706 32,076
Total cash and cash equivalents 48,674 79,964
Investment securities available for sale 274,390 280,509
Investment securities held to maturity;
fair value of $129,801 in 2007 and
$140,564 in 2006 133,193 142,838
Loans:
Commercial 832,071 786,152
Leases 263,041 196,518
Residential mortgages 300,470 288,008
Consumer and home equity 313,510 315,038
Total loans 1,709,092 1,585,716
Deferred fees 5,944 5,928
Allowance for loan and lease losses (13,969) (13,454)
Net loans 1,701,067 1,578,190
Premises and equipment - net 31,441 32,072
Accrued interest receivable 8,164 8,509
Goodwill 87,111 87,111
Other identifiable intangible assets 4,348 4,942
Bank owned life insurance 37,423 36,774
Other assets 13,445 12,664
TOTAL ASSETS $2,339,256 $2,263,573
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits:
Noninterest bearing $309,105 $303,558
Savings and interest-bearing
transaction accounts 1,053,958 1,054,190
Time deposits under $100,000 312,079 293,308
Time deposits $100,000 and over 202,347 209,571
Total deposits 1,877,489 1,860,627
Federal funds purchased and
securities sold under agreements
to repurchase 65,304 41,061
Long-term debt 100,855 91,710
Subordinated debentures 77,322 56,703
Other liabilities 14,181 13,972
TOTAL LIABILITIES 2,135,151 2,064,073
STOCKHOLDERS' EQUITY
Common stock, no par value;
authorized shares, 40,000,000;
issued shares, 23,563,463 at June 30,
2007 and December 31, 2006 241,768 242,661
Accumulated Deficit (11,540) (17,526)
Treasury stock, at cost, 1,449,999
shares at June 30, 2007 and
1,506,141 at December 31, 2006 (20,962) (22,565)
Accumulated other comprehensive loss (5,161) (3,070)
TOTAL STOCKHOLDERS' EQUITY 204,105 199,500
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $2,339,256 $2,263,573
Lakeland Bancorp, Inc. and Subsidiaries
CONSOLIDATED INCOME STATEMENTS
(Unaudited)
Three months Ended Six Months Ended
June 30, June 30,
2007 2006 2007 2006
(In thousands, except per share data)
INTEREST INCOME
Loans and fees $28,401 $22,750 $55,677 $43,848
Federal funds sold and interest
bearing deposits with banks 272 133 680 234
Taxable investment securities 3,531 5,053 7,168 10,795
Tax exempt investment securities 756 996 1,542 2,008
TOTAL INTEREST INCOME 32,960 28,932 65,067 56,885
INTEREST EXPENSE
Deposits 12,596 9,491 25,060 18,130
Federal funds purchased and
securities sold under agreements
to repurchase 645 1,023 1,169 2,284
Long-term debt 2,174 1,697 4,204 3,202
TOTAL INTEREST EXPENSE 15,415 12,211 30,433 23,616
NET INTEREST INCOME 17,545 16,721 34,634 33,269
Provision for loan and lease losses 671 319 1,273 651
NET INTEREST INCOME AFTER
PROVISION FOR LOAN AND
LEASE LOSSES 16,874 16,402 33,361 32,618
NONINTEREST INCOME
Service charges on deposit accounts 2,633 2,721 5,150 5,264
Commissions and fees 785 920 1,564 1,814
Gain on investment securities 1,769 0 1,769 78
Income on bank owned life
insurance 325 308 642 607
Lease income 157 282 298 463
Other income 192 93 659 575
TOTAL NONINTEREST INCOME 5,861 4,324 10,082 8,801
NONINTEREST EXPENSE
Salaries and employee benefits 8,098 7,672 16,255 15,305
Net occupancy expense 1,355 1,291 2,876 2,724
Furniture and equipment 1,193 1,133 2,358 2,285
Stationery, supplies and postage 449 403 849 815
Marketing expense 564 423 955 834
Amortization of core deposit
intangibles 297 298 595 601
Other expenses 2,479 2,197 4,874 4,646
TOTAL NONINTEREST EXPENSE 14,435 13,417 28,762 27,210
INCOME BEFORE PROVISION FOR INCOME
TAXES 8,300 7,309 14,681 14,209
Provision for income taxes 2,776 2,254 4,787 4,462
NET INCOME $5,524 $5,055 $9,894 $9,747
EARNINGS PER COMMON SHARE
Basic $0.25 $0.23 $0.45 $0.44
Diluted $0.25 $0.23 $0.45 $0.44
DIVIDENDS PER SHARE $0.10 $0.095 $0.20 $0.19
SOURCE Lakeland Bancorp, Inc.
