OAK RIDGE, N.J., Oct. 17 /PRNewswire-FirstCall/ -- Lakeland Bancorp, Inc. (Nasdaq: LBAI) reported third quarter Net Income of $4.8 million , as compared to $5.1 million reported for the same period last year. Diluted earnings per share was $0.21 , as compared to the $0.22 reported in the third quarter of 2006. (All share and per share information have been adjusted for a 5% stock dividend declared on October 16, 2007 , unless otherwise noted.) Annualized Return on Average Assets was 0.79% and Annualized Return on Average Equity was 9.30% for the third quarter of 2007.
Net Income for the first nine months of 2007 was $14.7 million , as compared to $14.9 million reported for the same period last year. Diluted earnings per share was $0.63 , as compared to the $0.64 reported in the first nine months of 2006. Annualized Return on Average Assets was 0.85% and Annualized Return on Average Equity was 9.71%.
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 November 15, 2007 to holders of record as of the close of business on October 31, 2007 . In addition, the Company has authorized a 5% stock dividend, which will be paid on November 16, 2007 to holders of record as of the close of business October 31, 2007 .
Net Interest Income
Net interest income for the third quarter of 2007 was $18.2 million , a 9% increase compared to $16.6 million in the third quarter of 2006. Annualized net interest margin at 3.36% increased from 3.32% in the third quarter of 2006, while average earning assets increased 7%. Within interest-earning assets, we continued to see strong loan demand this quarter. Average loans increased by $295.7 million , or 20%, to $1.74 billion in the third quarter of 2007, from the same period in 2006. The Company's annualized yield on interest-earning assets increased by 38 basis points to 6.46% in the third quarter of 2007, from 6.08% for the same period last year, reflecting an improved asset mix. The annualized cost of interest bearing liabilities increased 41 basis points from 3.22% in the third quarter of 2006 to 3.63% in the third quarter of 2007. This increase in interest expense reflects an increase in higher yielding average time deposits.
For the first nine months of 2007, net interest income was $52.8 million , or 6% higher than the $49.9 million reported for the first nine months of 2006. Annualized net interest margin remained unchanged at 3.42% for the first nine months of 2007 compared to the same period last year, while average earning assets rose 5%. The Company's annualized yield on earning assets increased from 5.93% in the first nine months of 2006 to 6.43% for the first nine months of 2007. The Company's annualized cost of interest bearing liabilities increased from 2.94% in the first nine months of 2006 to 3.51% for the first nine months of 2007.
Noninterest Income
Noninterest income, excluding the gains on investment securities, totaled $4.0 million for the third quarter of 2007 and was $255,000 lower than the third quarter of 2006. There were no gains on sales of investment securities in the third quarter of 2007 compared to gains of $271,000 for the same period last year. Noninterest income, including gains on investment securities sold, totaled $4.0 million for the third quarter of 2007, as compared to $4.6 million for the third quarter of 2006. Service charges on deposits remained unchanged at $2.7 million . Commissions and fees decreased by $277,000 to $771,000 . Within this category, loan fees and charges and investment commission income decreased by $156,000 and $96,000 respectively, from the same period last year.
Noninterest income, excluding the gains on sales of securities, totaled $12.4 million for the first nine months of 2007 and was $665,000 lower than the first nine months of 2006. Gains on sales of investment securities were $1.8 million for the first nine months of 2007, as compared to $349,000 for the same period last year. Noninterest income, including gains on investment securities sold, totaled $14.1 million for the first nine months of 2007, or 6% higher than the same period last year. Service charges on deposit accounts decreased $150,000 to $7.8 million ; commissions and fees decreased $527,000 to $2.3 million , primarily due to decreased loan fees and charges of $325,000 and decreased investment commission income of $112,000 .
Noninterest Expense
Noninterest expense for the third quarter of 2007 was $14.3 million , an increase of $953,000 , or 7% as compared to the total for the same period last year. Salary and benefit expense at $8.1 million increased by $506,000 , or 7%, primarily due to an increase in employee commission expense reflecting increased leasing business, the opening of two new branches, as well as normal salary and benefit increases. Occupancy, furniture and equipment expense at $2.7 million increased by 6%, resulting from the two branch openings this year. Other noninterest expenses increased by $287,000 , or 9%, in the third quarter of 2007. This increase was partially due to higher marketing expenses and legal fees. The efficiency ratio was 62.0% in the third quarter of 2007, as compared to 61.0% last year.
For the first nine months of 2007, noninterest expense was $43.1 million compared to $40.6 million for the same period last year. Salary and benefit costs increased by $1.5 million , or 6%, due to increased commission costs, as well as normal salary and benefit increases. Occupancy, furniture and equipment expenses increased by $385,000 , or 5%. Other noninterest expenses increased by $664,000 or 7%. This increase was due to increased marketing costs partially due to the two branch openings, and increased legal fees.
Financial Condition
At September 30, 2007 , total assets were $2.45 billion , an increase of $182.1 million or 8% as compared to year-end 2006. Total loans and leases were $1.78 billion , up $195.5 million or 12% from $1.59 billion at year-end 2006. Although all loan categories have increased this year, the largest increases were in leasing and commercial loans, which have increased by $112.6 million , or 57%, and $61.4 million , or 8%, respectively. Total deposits were $1.97 billion at September 30, 2007 , an increase of $110.7 million or 6% from December 31, 2006 . Core deposits, which are defined as interest bearing deposits and savings and interest bearing transaction accounts, amounted to $1.39 billion and represented 71% of total deposits at September 30, 2007 .
Asset Quality
At September 30, 2007 , non-performing assets totaled $8.8 million (0.36% of total assets).The Allowance for Loan and Lease Losses totaled $14.7 million at September 30, 2007 and represented 167% of non-performing loans. During the third quarter of 2007, the Company had net charge-offs of $63,000 , as compared to net charge-offs of $337,000 for the same period last year. The provision for loan losses for the third quarter of 2007 was $789,000 , as compared to $337,000 during the third quarter of 2006 and $2.06 million for the nine months of 2007 vs. $1.0 million for the similar period in 2006.
Capital
Stockholders' equity was $208.4 million and book value per common share was $8.97 as of September 30, 2007 . The Company's leverage ratio was 8.25%. Tier I and total risk based capital ratios were 10.49% and 11.53%, 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, 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.
Three months ended Nine months ended
September 30, September 30,
2007 2006 2007 2006
Return on average equity 9.30% 10.60% 9.71% 10.45%
Effect of intangible equity 7.49% 9.93% 8.02% 9.97%
Return on tangible equity 16.79% 20.53% 17.73% 20.42%
Average shareholders' equity $204,735 $191,210 $202,405 $190,120
Average goodwill and
intangibles 91,318 92,509 91,618 92,851
Average tangible equity $113,417 $98,701 $110,787 $97,269
Lakeland Bancorp, Inc.
Financial Highlights
(unaudited)
Three months ended Nine months ended
Sept 30, Sept 30,
2007 2006 2007 2006
(Dollars in thousands except per share amounts)
INCOME STATEMENT
Net Interest Income $18,193 $16,630 $52,827 $49,899
Provision for Loan and Lease
Losses (789) (337) (2,062) (988)
Noninterest Income (excluding
investment securities gains) 4,046 4,301 12,359 13,024
Gain on investment securities - 271 1,769 349
Noninterest Expense (14,332) (13,379) (43,094) (40,589)
Pretax Income 7,118 7,486 21,799 21,695
Tax Expense (2,319) (2,379) (7,106) (6,841)
Net Income $4,799 $5,107 $14,693 $14,854
Basic Earnings Per Share* $0.21 $0.22 $0.63 $0.64
Diluted Earnings Per Share* $0.21 $0.22 $0.63 $0.64
Dividends per share* $0.10 $0.09 $0.29 $0.27
Weighted Average Shares -
Basic* 23,205 23,113 23,177 23,148
Weighted Average Shares -
Diluted* 23,295 23,268 23,275 23,302
SELECTED OPERATING RATIOS
Annualized Return on Average
Assets 0.79% 0.90% 0.85% 0.90%
Annualized Return on Average
Equity 9.30% 10.60% 9.71% 10.45%
Annualized Return on Tangible
Equity** 16.79% 20.53% 17.73% 20.42%
Annualized Return on Interest
Earning Assets 6.46% 6.08% 6.43% 5.93%
Annualized Cost of funds 3.63% 3.22% 3.51% 2.94%
Annualized Net interest spread 2.83% 2.86% 2.92% 2.99%
Annualized Net interest margin 3.36% 3.32% 3.42% 3.42%
Efficiency ratio*** 61.98% 61.04% 63.53% 61.53%
Stockholders' equity to total
assets 8.52% 8.71%
Book value per share* $8.97 $8.51
ASSET QUALITY RATIOS
Ratio of net charge-offs to
average loans 0.07% 0.11%
Ratio of allowance to total
loans 0.83% 0.87%
Non-performing loans to total
loans 0.49% 0.25%
Non-performing assets to total
assets 0.36% 0.17%
Allowance to non-performing
loans 167% 346%
SELECTED BALANCE SHEET DATA AT PERIOD-END 9/30/2007 12/31/2006
Loans and Leases $1,781,194 $1,585,716
Allowance for Loan and Lease
Losses (14,696) (13,454)
Investment Securities 394,700 423,347
Total Assets 2,445,716 2,263,573
Total Deposits 1,971,311 1,860,627
Short-Term Borrowings 54,151 41,061
Long-Term Debt 198,177 148,413
Stockholders' Equity 208,446 199,500
SELECTED AVERAGE BALANCE SHEET DATA
For the For the
three months ended nine months ended
9/30/2007 9/30/2006 9/30/2007 9/30/2006
Loans and Leases, net 1,741,187 1,445,461 1,670,292 1,379,925
Investment Securities 407,702 576,451 409,524 617,788
Interest-Earning Assets 2,193,509 2,045,526 2,112,353 2,012,266
Total Assets 2,404,215 2,250,029 2,322,728 2,216,537
Core Deposits 1,385,659 1,335,603 1,364,968 1,333,189
Time Deposits 544,471 470,299 523,212 457,942
Total Deposits 1,930,130 1,805,902 1,888,180 1,791,131
Short-Term Borrowings 60,593 109,625 56,069 106,503
Long-Term Debt 115,649 74,141 93,573 59,939
Subordinated Debentures 77,322 56,703 67,126 56,703
Total Interest-Bearing
Liabilities 1,875,444 1,745,455 1,805,648 1,717,894
Stockholders' Equity 204,735 191,210 202,405 190,120
* Adjusted for a 5% stock dividend payable on November 16, 2007 to
shareholders of record October 31, 2007.
** 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
September 30, December 31,
ASSETS 2007 2006
(dollars in thousands) (unaudited)
Cash and due from banks $40,313 $47,888
Federal funds sold and interest-
bearing deposits due from banks 56,654 32,076
Total cash and cash equivalents 96,967 79,964
Investment securities available for sale 265,050 280,509
Investment securities held to
maturity; fair value of $128,212
in 2007 and $140,564 in 2006 129,650 142,838
Loans:
Commercial 847,569 786,152
Leases 309,160 196,518
Residential mortgages 308,649 288,008
Consumer and home equity 315,816 315,038
Total loans 1,781,194 1,585,716
Deferred fees 6,050 5,928
Allowance for loan and lease losses (14,696) (13,454)
Net loans 1,772,548 1,578,190
Premises and equipment - net 30,803 32,072
Accrued interest receivable 8,532 8,509
Goodwill 87,111 87,111
Other identifiable intangible assets 4,050 4,942
Bank owned life insurance 37,763 36,774
Other assets 13,242 12,664
TOTAL ASSETS $2,445,716 $2,263,573
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits:
Noninterest bearing $306,671 $303,558
Savings and interest-bearing
transaction accounts 1,084,398 1,054,190
Time deposits under $100,000 358,086 293,308
Time deposits $100,000 and over 222,156 209,571
Total deposits 1,971,311 1,860,627
Federal funds purchased and
securities sold under agreements to
repurchase 54,151 41,061
Long-term debt 120,855 91,710
Subordinated debentures 77,322 56,703
Other liabilities 13,631 13,972
TOTAL LIABILITIES 2,237,270 2,064,073
STOCKHOLDERS' EQUITY
Common stock, no par value;
authorized shares, 40,000,000;
issued shares, 24,741,636 at June 30,
2007 and December 31, 2006 258,260 242,661
Accumulated Deficit (25,532) (17,526)
Treasury stock, at cost, 1,490,583
shares at June 30, 2007 and
1,581,448 at December 31, 2006 (20,546) (22,565)
Accumulated other comprehensive loss (3,736) (3,070)
TOTAL STOCKHOLDERS' EQUITY 208,446 199,500
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $2,445,716 $2,263,573
Lakeland Bancorp, Inc. and Subsidiaries
CONSOLIDATED INCOME STATEMENTS
(Unaudited)
Three months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
(In thousands, except per share data)
INTEREST INCOME
Loans and fees $30,219 $24,629 $85,896 $68,477
Federal funds sold and interest
bearing deposits with banks 571 304 1,251 538
Taxable investment securities 3,756 4,928 10,924 15,723
Tax exempt investment securities 742 928 2,284 2,936
TOTAL INTEREST INCOME 35,288 30,789 100,355 87,674
INTEREST EXPENSE
Deposits 13,589 10,837 38,649 28,967
Federal funds purchased and
securities sold under agreements
to repurchase 665 1,407 1,834 3,691
Long-term debt 2,841 1,915 7,045 5,117
TOTAL INTEREST EXPENSE 17,095 14,159 47,528 37,775
NET INTEREST INCOME 18,193 16,630 52,827 49,899
Provision for loan and lease losses 789 337 2,062 988
NET INTEREST INCOME AFTER
PROVISION FOR LOAN AND LEASE
LOSSES 17,404 16,293 50,765 48,911
NONINTEREST INCOME
Service charges on deposit accounts 2,696 2,732 7,846 7,996
Commissions and fees 771 1,048 2,335 2,862
Gain on investment securities 0 271 1,769 349
Income on bank owned life insurance 331 311 973 918
Other income 248 210 1,205 1,248
TOTAL NONINTEREST INCOME 4,046 4,572 14,128 13,373
NONINTEREST EXPENSE
Salaries and employee benefits 8,123 7,617 24,378 22,922
Net occupancy expense 1,493 1,323 4,369 4,047
Furniture and equipment 1,222 1,232 3,580 3,517
Stationery, supplies and postage 383 416 1,232 1,231
Marketing expense 456 363 1,411 1,197
Amortization of core deposit
intangibles 298 297 893 898
Other expenses 2,357 2,131 7,231 6,777
TOTAL NONINTEREST EXPENSE 14,332 13,379 43,094 40,589
INCOME BEFORE PROVISION FOR INCOME
TAXES 7,118 7,486 21,799 21,695
Provision for income taxes 2,319 2,379 7,106 6,841
NET INCOME $4,799 $5,107 $14,693 $14,854
EARNINGS PER COMMON SHARE
Basic $0.21 $0.22 $0.63 $0.64
Diluted $0.21 $0.22 $0.63 $0.64
DIVIDENDS PER SHARE $0.10 $0.09 $0.29 $0.27
SOURCE Lakeland Bancorp, Inc.
