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Lakeland Bancorp Announces Third Quarter Results
ソース: Nasdaq GlobeNewswire / 26 10 2021 08:00:05 America/New_York
OAK RIDGE, N.J., Oct. 26, 2021 (GLOBE NEWSWIRE) -- Lakeland Bancorp, Inc. (NASDAQ: LBAI) (the “Company”), the parent company of Lakeland Bank (“Lakeland”), reported net income of $22.3 million and earnings per diluted share ("EPS") of $0.43 for the three months ended September 30, 2021 compared to net income of $14.4 million and EPS of $0.28 for the three months ended September 30, 2020. For the third quarter of 2021, annualized return on average assets was 1.10%, annualized return on average common equity was 10.94% and annualized return on average tangible common equity was 13.63%.
For the nine months ended September 30, 2021, the Company reported net income of $72.9 million and EPS of $1.42 compared to net income of $38.7 million and EPS of $0.76 for the same period of 2020. Annualized return on average assets was 1.24%, annualized return on average common equity was 12.39% and annualized return on average tangible common equity was 15.53% for the first nine months of 2021 (see "Supplemental Information - Non-GAAP Financial Measures" for a reconciliation of non-GAAP financial measures, including tangible book value).
The third quarter and year-to-date 2021 results were favorably impacted by negative provisions for credit losses of $2.7 million and $11.3 million, respectively, compared to provisions of $8.0 million and $26.2 million for the same periods last year as forecasted macroeconomic conditions have improved and Lakeland's asset quality continues to be strong.
Thomas Shara, Lakeland Bancorp’s President and CEO commented on the financial results, “We are pleased with our results for the quarter marked by strong core earnings and continued improvement in asset quality. Our subordinated debt offering during the quarter was very successful, affording us the opportunity to increase the offering size to $150 million with an interest rate of 2.875% fixed for 5 years. We believe the overwhelming success of the offering further illustrates the strength of the Lakeland brand in the market.”
Regarding Lakeland Bancorp's recently announced acquisition of 1st Constitution Bancorp, Mr. Shara continued, “We remain very excited regarding our opportunity to partner with 1st Constitution and expanding our product offerings and services to the customers of the combined company. The merger integration meetings are progressing very well and we anticipate closing the merger in January 2022.”
Third Quarter 2021 Highlights
- Non-performing assets decreased $10.3 million or 46% to $12.3 million at September 30, 2021 compared to $22.6 million at June 30, 2021.
- During the third quarter, the Company sold $6.2 million in non-performing loans primarily in the commercial secured by real estate loan category. The sale resulted in net recoveries to the allowance for credit losses of $502,000 as well as recovered interest on non-accrual loans of $755,000, which favorably impacted third quarter 2021 net interest margin by four basis points.
- On September 15, 2021, the Company closed the offering of $150 million of its Fixed-to-Floating Rate Subordinated Notes (the “Notes”) due 2031. The Notes bear interest at a rate of 2.875% per annum until September 2026 and the interest rate will then reset quarterly to the three-month Secured Overnight Financing Rate ("SOFR") plus a spread of 220 basis points.
- During the third quarter, the Company redeemed $75 million of its 5.125% Fixed-to-Floating Rate Subordinated Notes due September 30, 2026, which were scheduled to reset quarterly to the current three-month LIBOR rate plus 397 basis points in September 2021. The Company expensed $831,000 in unamortized debt issuance costs on the $75 million redemption.
- Deposit growth continues to be strong as saving and interest-bearing transaction accounts increased $202.7 million during the third quarter, while higher priced time deposits were allowed to run off. Noninterest-bearing deposits increased $40.8 million to $1.72 billion at September 30, 2021.
- Paycheck Protection Program ("PPP") loans totaled $109.3 million at September 30, 2021 compared to $207.0 million at June 30, 2021. Unamortized net deferred fees on PPP loans totaled $3.4 million at September 30, 2021 compared to $6.1 million at June 30, 2021. PPP loans contributed approximately $3.1 million to interest income during the third quarter of 2021.
Net Interest Margin and Net Interest Income
Net interest margin for the third quarter of 2021 of 3.10% increased 14 basis points compared to the third quarter of 2020 and decreased 17 basis points compared to the second quarter of 2021. Net interest margin for the first nine months of 2021 was 3.19% as compared to 3.09% for the same period in 2020. The increase in net interest margin compared to the third quarter 2020 and year-to-date 2020 was due primarily to a decrease in the cost of interest-bearing liabilities, while the decrease in net interest margin compared to the linked quarter was due primarily to a $326.7 million increase in lower yielding average federal funds sold.
The yield on interest-earning assets for the third quarter of 2021 was 3.40% as compared to 3.49% for the third quarter of 2020 and 3.57% for the second quarter of 2021. The yield on interest-earning assets for the first nine months of 2021 was 3.51% as compared to 3.77% during the same period in 2020. The current quarter decrease in yield on interest-earning assets, when compared to the third quarter of 2020 and the second quarter of 2021, was due primarily to a reduction in the yield on securities as well as an increase in lower yielding average securities and federal funds sold balances. The 26 basis point reduction in yield on interest-earning assets for the first nine months of 2021 compared to the same period in 2020 was due primarily to a reduction in the yield on loans and securities resulting from decreases in market interest rates during 2020.
The cost of interest-bearing liabilities for the third quarter of 2021 was 0.41% compared to 0.72% for the third quarter of 2020 and 0.42% for the second quarter of 2021. The cost of interest-bearing liabilities for the first nine months of 2021 was 0.45% compared to 0.91% during the same period in 2020. The reduction in the cost of interest-bearing liabilities compared to prior periods was largely driven by reductions in market interest rates as well as a change in the mix of interest-bearing liabilities. Higher cost time deposits and borrowings balances have decreased while lower cost interest-bearing transaction account balances have increased.
Net interest income for the third quarter of 2021 of $59.3 million increased $7.2 million compared to the third quarter of 2020. Net interest income for the first nine months of 2021 was $175.8 million as compared to $152.6 million for the first nine months of 2020. The increase in net interest income compared to prior periods was due primarily to a reduction in the cost of interest-bearing deposits as well as growth in the volume of interest-earning assets.
Noninterest Income
Noninterest income decreased $1.3 million to $5.5 million for the third quarter of 2021 from $6.8 million for the third quarter of 2020. Service charges on deposit accounts for the third quarter of 2021 increased $248,000 compared to the third quarter of 2020 due primarily to changes in customer behavior relating to the pandemic. Gains on sales of loans decreased $887,000 due primarily to retaining a greater percentage of originated residential mortgages. Swap income decreased $624,000 compared to the third quarter of 2020 due primarily to the steepness of the yield curve which makes new swap agreements less attractive.
For the first nine months of 2021, noninterest income decreased $3.8 million to $16.5 million compared to the first nine months of 2020 primarily due to a $3.6 million decrease in swap income resulting from the changes to the yield curve discussed above. Service charges on deposit accounts increased $614,000 compared to the first nine months of 2020 due to the same reasons discussed in the quarterly comparison, while commissions and fees increased $459,000 due primarily to an increase in commercial loan fees. Losses on equity securities totaled $191,000 in the first nine months of 2021 compared to losses of $625,000 in the first nine months of 2020. Gains on sales of loans decreased $697,000 due to the same reason discussed above. Other income decreased $567,000 due primarily to a $400,000 write-down on a branch location held for sale. Additionally, the first nine months of 2020 included gains on sales of investment securities of $342,000 compared to $9,000 for the same period in 2021.
Noninterest Expense
Noninterest expense totaled $37.2 million for the third quarter of 2021 and increased $5.1 million compared to the third quarter of 2020. Compensation and employee benefit expense for the third quarter of 2021 increased $2.4 million or 13% compared to the same quarter of 2020 as a result of staff additions and normal merit increases. Premises and equipment increased $624,000 compared to the third quarter of 2020 predominately driven by an increase in costs associated with the Company's digital strategy initiative. The third quarter of 2021 included $1.1 million in merger related costs for the upcoming merger with 1st Constitution Bancorp. Other operating expenses in the third quarter of 2021 were $881,000 greater than the third quarter of 2020 due primarily to $831,000 in long-term debt extinguishment costs resulting from the redemption of the $75 million in subordinated notes mentioned in the quarterly highlights.
Noninterest expense for the first nine months of 2021 of $105.2 million increased $9.1 million compared to the first nine months of 2020. Compensation and employee benefit expense and premises and equipment expense increased $5.1 million and $2.4 million, respectively, compared to the first nine months of 2020 due to the same reasons discussed in the quarterly comparison. FDIC insurance expense in the first nine months of 2021 increased $420,000 due primarily to deposit growth and assessment credits recorded in the first nine months of 2020. The first nine months of 2021 included $1.1 million in merger related costs for the upcoming merger with 1st Constitution Bancorp.
Income Tax Expense
The effective tax rate for the third quarter of 2021 was 26.4% compared to 23.3% for the third quarter of 2020. The increased effective tax rate for the third quarter of 2021 was primarily a result of tax advantaged items declining as a percentage of pretax income due to the increase in pretax income.
Financial Condition
At September 30, 2021, total assets were $8.17 billion, an increase of $508.2 million compared to December 31, 2020. For the nine months ended September 30, 2021, total loans decreased $140.4 million to $5.88 billion and investment securities increased $275.5 million to $1.25 billion. On the funding side, total deposits increased $475.1 million to $6.93 billion, while borrowings increased $11.2 million to $324.0 million. At September 30, 2021, total loans as a percent of total deposits was 84.8%.
Asset Quality
At September 30, 2021, non-performing assets decreased 71% to $12.3 million or 0.15% of total assets compared to $42.8 million or 0.56% of total assets at December 31, 2020. Non-accrual loans as a percent of total loans decreased to 0.21% at September 30, 2021 compared to 0.71% at December 31, 2020. The allowance for credit losses decreased to $58.0 million, 0.99% of total loans, at September 30, 2021, compared to $71.1 million, 1.18% of total loans, at December 31, 2020. In the third quarter of 2021, the Company had net recoveries of $269,000 or 0.02% of average loans, on an annualized basis, compared to net charge-offs of $597,000 or 0.04% for the same period in 2020. The provision for credit losses for the third quarter of 2021 was a benefit of $2.7 million compared to a provision of $8.0 million in the third quarter of 2020. In addition, the third quarter of 2021 included a sale of non-performing loans totaling $6.2 million and resulted in an improvement of asset quality ratios.
Capital
At September 30, 2021, stockholders' equity was $814.1 million compared to $763.8 million at December 31, 2020, a 7% increase. Lakeland Bank remains above FDIC “well capitalized” standards, with a Tier 1 leverage ratio of 8.60% at September 30, 2021. The book value per common share and tangible book value per common share increased 8% and 10% to $16.09 and $12.95, respectively, compared to $14.93 and $11.77 at September 30, 2020 (see "Supplemental Information - Non-GAAP Financial Measures" for a reconciliation of non-GAAP financial measures, including tangible book value). At September 30, 2021, the Company’s common equity to assets ratio and tangible common equity to tangible assets ratio were 9.96% and 8.18%, respectively, compared to 9.97% and 8.05% at December 31, 2020. On October 22, 2021, the Company declared a quarterly cash dividend of $0.135 per share to be paid on November 15, 2021, to shareholders of record as of November 5, 2021.
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, 2020, 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. The pandemic and related local and national economic disruption may, among other effects, result in a material adverse change for the demand for our products and services; increased levels of loan delinquencies, problem assets and foreclosures; branch disruptions, unavailability of personnel and increased cybersecurity risks as employees work remotely. 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 $8.17 billion in total assets at September 30, 2021. 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 one of New Jersey's Best-In State Banks by Forbes and Statista, 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 973-697-2000 for more information.
Thomas J. Shara
President & CEOThomas F. Splaine
EVP & CFOLakeland Bancorp, Inc. Financial Highlights (Unaudited) Three Months Ended
September 30,Nine Months Ended
September 30,(dollars in thousands, except per share amounts) 2021 2020 2021 2020 Income Statement Net interest income $ 59,338 $ 52,134 $ 175,806 $ 152,552 Benefit (provision) for credit losses (2) 2,703 (8,000 ) 11,304 (26,223 ) Gains on sales of investment securities — — 9 342 Gains on sales of loans 550 1,437 1,865 2,562 Loss on equity securities (58 ) (170 ) (191 ) (625 ) Other noninterest income 4,977 5,506 14,814 17,986 Long-term debt extinguishment costs (831 ) — (831 ) (356 ) Merger-related expenses (1,072 ) — (1,072 ) — Other noninterest expense (35,304 ) (32,097 ) (103,304 ) (95,707 ) Pretax income 30,303 18,810 98,400 50,531 Provision for income taxes (8,014 ) (4,383 ) (25,529 ) (11,861 ) Net income $ 22,289 $ 14,427 $ 72,871 $ 38,670 Basic earnings per common share $ 0.43 $ 0.28 $ 1.42 $ 0.76 Diluted earnings per common share $ 0.43 $ 0.28 $ 1.42 $ 0.76 Dividends paid per common share $ 0.135 $ 0.125 $ 0.395 $ 0.375 Weighted average shares - basic 50,637 50,526 50,616 50,544 Weighted average shares - diluted 50,875 50,620 50,837 50,645 Selected Operating Ratios Annualized return on average assets 1.10 % 0.76 % 1.24 % 0.73 % Annualized return on average common equity 10.94 % 7.64 % 12.39 % 6.95 % Annualized return on average tangible common equity (1) 13.63 % 9.71 % 15.53 % 8.86 % Annualized yield on interest-earning assets 3.40 % 3.49 % 3.51 % 3.77 % Annualized cost of interest-bearing liabilities 0.41 % 0.72 % 0.45 % 0.91 % Annualized net interest spread 2.99 % 2.77 % 3.06 % 2.86 % Annualized net interest margin 3.10 % 2.96 % 3.19 % 3.09 % Efficiency ratio (1) 54.02 % 53.96 % 53.24 % 54.95 % Stockholders' equity to total assets 9.96 % 10.02 % Book value per common share $ 16.09 $ 14.93 Tangible book value per common share (1) $ 12.95 $ 11.77 Tangible common equity to tangible assets (1) 8.18 % 8.06 % Asset Quality Ratios September 30, 2021 September 30, 2020 Ratio of allowance for credit losses to total loans (2) 0.99 % 1.11 % Non-performing loans to total loans 0.21 % 0.57 % Non-performing assets to total assets 0.15 % 0.44 % Annualized net charge-offs to average loans 0.05 % 0.02 % (1) See Supplemental Information - Non-GAAP Financial Measures (2) The Company adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13") on December 31, 2020, with a $6.7 million transition adjustment retroactive to January 1, 2020. Periods prior to December 31, 2020 do not reflect the adoption of ASU 2016-13. Lakeland Bancorp, Inc. Financial Highlights (Unaudited) (dollars in thousands) September 30, 2021 September 30, 2020 Selected Balance Sheet Data at Period End Loans $ 5,880,802 $ 5,843,591 Allowance for credit losses (1) 57,953 65,242 Investment securities 1,248,705 909,535 Total assets 8,172,479 7,522,184 Total deposits 6,930,912 6,266,516 Short-term borrowings 111,907 97,874 Other borrowings 212,107 253,359 Stockholders' equity 814,128 753,572 Three Months Ended
September 30,Nine Months Ended
September 30,2021 2020 2021 2020 Selected Average Balance Sheet Data Loans $ 5,943,698 $ 5,775,093 $ 6,037,419 $ 5,519,621 Investment securities 1,144,356 873,066 1,071,823 881,332 Interest-earning assets 7,611,259 7,009,939 7,396,178 6,599,481 Total assets 8,070,050 7,516,069 7,854,351 7,073,438 Noninterest-bearing demand deposits 1,702,788 1,475,422 1,637,101 1,317,195 Savings deposits 653,840 548,662 632,950 523,653 Interest-bearing transaction accounts 3,701,676 3,086,260 3,529,586 2,942,307 Time deposits 826,831 1,176,181 916,476 1,048,115 Total deposits 6,885,135 6,286,525 6,716,113 5,831,270 Short-term borrowings 108,519 58,845 89,240 100,303 Other borrowings 162,216 269,093 148,616 273,567 Total interest-bearing liabilities 5,453,082 5,139,042 5,316,868 4,887,945 Stockholders' equity 807,956 751,099 786,642 743,318 (1) Periods prior to December 31, 2020 do not reflect the adoption of ASU 2016-13.
Lakeland Bancorp, Inc. and Subsidiaries
Consolidated Statements of Income (Unaudited)For the Three Months Ended September 30, For the Nine Months Ended September 30, (in thousands, except per share data) 2021 2020 2021 2020 Interest Income Loans and fees $ 59,957 $ 56,801 $ 179,264 $ 170,483 Federal funds sold and interest-bearing deposits with banks 161 92 250 287 Taxable investment securities and other 4,232 4,139 12,242 14,131 Tax-exempt investment securities 588 401 1,831 1,082 Total Interest Income 64,938 61,433 193,587 185,983 Interest Expense Deposits 3,987 7,012 13,349 25,969 Federal funds purchased and securities sold under agreements to repurchase 19 27 58 531 Other borrowings 1,594 2,260 4,374 6,931 Total Interest Expense 5,600 9,299 17,781 33,431 Net Interest Income 59,338 52,134 175,806 152,552 (Benefit) provision for credit losses (1) (2,703 ) 8,000 (11,304 ) 26,223 Net Interest Income after Provision for Credit Losses 62,041 44,134 187,110 126,329 Noninterest Income Service charges on deposit accounts 2,536 2,288 7,277 6,663 Commissions and fees 1,609 1,667 4,962 4,503 Income on bank owned life insurance 645 670 1,922 2,000 Loss on equity securities (58 ) (170 ) (191 ) (625 ) Gains on sales of loans 550 1,437 1,865 2,562 Gains on sales of investment securities, net — — 9 342 Swap income — 624 634 4,234 Other income 187 257 19 586 Total Noninterest Income 5,469 6,773 16,497 20,265 Noninterest Expense Compensation and employee benefits 21,478 19,065 62,403 57,282 Premises and equipment 6,206 5,582 18,602 16,249 FDIC insurance 461 625 1,793 1,373 Data processing 1,495 1,211 4,049 3,900 Merger related expenses 1,072 — 1,072 — Other operating expenses 6,495 5,614 17,288 17,259 Total Noninterest Expense 37,207 32,097 105,207 96,063 Income before provision for income taxes 30,303 18,810 98,400 50,531 Provision for income taxes 8,014 4,383 25,529 11,861 Net Income $ 22,289 $ 14,427 $ 72,871 $ 38,670 Per Share of Common Stock Basic earnings $ 0.43 $ 0.28 $ 1.42 $ 0.76 Diluted earnings $ 0.43 $ 0.28 $ 1.42 $ 0.76 Dividends $ 0.135 $ 0.125 $ 0.395 $ 0.375 (1) Periods prior to December 31, 2020 do not reflect the adoption of ASU 2016-13.
Lakeland Bancorp, Inc. Consolidated Balance Sheets (dollars in thousands) September 30, 2021 December 31, 2020 (Unaudited) Assets Cash $ 641,861 $ 262,327 Interest-bearing deposits due from banks 20,774 7,763 Total cash and cash equivalents 662,635 270,090 Investment securities available for sale, at estimated fair value (allowance for credit losses of $50 at September 30, 2021 and $2 at December 31, 2020 ) 529,381 855,746 Investment securities held to maturity (estimated fair value of $686,728 at September 30, 2021 and $93,868 at December 31, 2020, allowance for credit losses of $183 at September 30, 2021 and none at December 31, 2020) 693,562 90,766 Equity securities, at fair value 16,422 14,694 Federal Home Loan Bank and other membership stocks, at cost 9,340 11,979 Loans held for sale 851 1,335 Loans, net of deferred fees 5,880,802 6,021,232 Less: Allowance for credit losses 57,953 71,124 Net loans 5,822,849 5,950,108 Premises and equipment, net 46,163 48,495 Operating lease right-of-use assets 14,809 16,772 Accrued interest receivable 18,182 19,339 Goodwill 156,277 156,277 Other identifiable intangible assets 2,631 3,288 Bank owned life insurance 117,073 115,115 Other assets 82,304 110,293 Total Assets $ 8,172,479 $ 7,664,297 Liabilities and Stockholders' Equity Liabilities Deposits: Noninterest-bearing $ 1,724,646 $ 1,510,224 Savings and interest-bearing transaction accounts 4,401,367 3,867,303 Time deposits $250 thousand and under 667,297 895,056 Time deposits over $250 thousand 137,602 183,200 Total deposits 6,930,912 6,455,783 Federal funds purchased and securities sold under agreements to repurchase 111,907 169,560 Other borrowings 25,000 25,000 Subordinated debentures 187,107 118,257 Operating lease liabilities 16,105 18,183 Other liabilities 87,320 113,730 Total Liabilities 7,358,351 6,900,513 Stockholders' Equity Common stock, no par value; authorized 100,000,000 shares; issued 50,733,113 shares and outstanding 50,602,078 shares at September 30, 2021 and issued 50,610,681 shares and outstanding 50,479,646 shares at December 31, 2020 564,974 562,421 Retained earnings 244,092 191,418 Treasury shares, at cost, 131,035 shares at September 30, 2021 and December 31, 2020 (1,452 ) (1,452 ) Accumulated other comprehensive income 6,514 11,397 Total Stockholders' Equity 814,128 763,784 Total Liabilities and Stockholders' Equity $ 8,172,479 $ 7,664,297 Lakeland Bancorp, Inc. Financial Highlights (Unaudited) For the Quarter Ended September 30, June 30, March 31, December 31, September 30, (dollars in thousands, except per share data) 2021 2021 2021 2020 2020 Income Statement Net interest income $ 59,338 $ 59,740 $ 56,728 $ 55,135 $ 52,134 Benefit (provision) for credit losses (1) 2,703 5,959 2,642 (789 ) (8,000 ) Gains on sales of investment securities — 9 — 871 — Gains on sales of loans 550 607 708 760 1,437 (Loss) gain on equity securities (58 ) 11 (144 ) 73 (170 ) Other noninterest income 4,977 4,642 5,195 5,141 5,506 Long-term debt extinguishment costs (831 ) — — (3,777 ) — Merger-related expenses (1,072 ) — — — — Other noninterest expense (35,304 ) (34,097 ) (33,903 ) (33,168 ) (32,097 ) Pretax income 30,303 36,871 31,226 24,246 18,810 Provision for income taxes (8,014 ) (9,464 ) (8,051 ) (5,398 ) (4,383 ) Net income $ 22,289 $ 27,407 $ 23,175 $ 18,848 $ 14,427 Basic earnings per common share $ 0.43 $ 0.53 $ 0.45 $ 0.37 $ 0.28 Diluted earnings per common share $ 0.43 $ 0.53 $ 0.45 $ 0.37 $ 0.28 Dividends paid per common share $ 0.135 $ 0.135 $ 0.125 $ 0.125 $ 0.125 Dividends paid $ 7,001 $ 6,828 $ 6,369 $ 6,364 $ 6,365 Weighted average shares - basic 50,637 50,636 50,576 50,527 50,526 Weighted average shares - diluted 50,875 50,858 50,780 50,672 50,620 Selected Operating Ratios Annualized return on average assets 1.10 % 1.41 % 1.22 % 0.98 % 0.76 % Annualized return on average common equity 10.94 % 14.07 % 12.20 % 9.96 % 7.64 % Annualized return on average tangible common equity (2) 13.63 % 17.67 % 15.39 % 12.64 % 9.71 % Annualized net interest margin 3.10 % 3.27 % 3.19 % 3.08 % 2.96 % Efficiency ratio (2) 54.02 % 51.98 % 53.75 % 53.74 % 53.96 % Common stockholders' equity to total assets 9.96 % 10.14 % 9.88 % 9.97 % 10.02 % Tangible common equity to tangible assets (2) 8.18 % 8.29 % 8.00 % 8.05 % 8.06 % Tier 1 risk-based ratio 11.19 % 10.78 % 10.47 % 10.22 % 10.34 % Total risk-based ratio 14.73 % 13.11 % 13.02 % 12.85 % 12.93 % Tier 1 leverage ratio 8.60 % 8.70 % 8.51 % 8.37 % 8.36 % Common equity tier 1 capital ratio 10.70 % 10.29 % 9.98 % 9.73 % 9.83 % Book value per common share $ 16.09 $ 15.74 $ 15.18 $ 15.13 $ 14.93 Tangible book value per common share (2) $ 12.95 $ 12.60 $ 12.03 $ 11.97 $ 11.77 (1) Periods prior to December 31, 2020 do not reflect the adoption of ASU 2016-13.
(2) See Supplemental Information - Non-GAAP Financial MeasuresLakeland Bancorp, Inc. Financial Highlights (Unaudited) For the Quarter Ended September 30, June 30, March 31, December 31, September 30, (dollars in thousands) 2021 2021 2021 2020 2020 Selected Balance Sheet Data at Period End Loans $ 5,880,802 $ 5,988,832 $ 6,108,946 $ 6,021,232 $ 5,843,591 Allowance for credit losses on loans (1) 57,953 60,389 67,252 71,124 65,242 Investment securities 1,248,705 1,107,601 1,078,750 973,185 909,535 Total assets 8,172,479 7,854,238 7,771,761 7,664,297 7,522,184 Total deposits 6,930,912 6,715,035 6,635,226 6,455,783 6,266,516 Short-term borrowings 111,907 100,190 111,999 169,560 97,874 Other borrowings 212,107 138,045 143,267 143,257 253,359 Stockholders' equity 814,128 796,676 768,065 763,784 753,572 Loans Non-owner occupied commercial $ 2,300,637 $ 2,330,376 $ 2,375,024 $ 2,398,946 Owner occupied commercial 884,144 870,535 857,506 827,092 Multifamily 907,903 902,394 858,168 813,225 Non-owner occupied residential 177,592 189,765 195,534 200,229 Total commercial, secured by real estate (1) $ 4,270,276 $ 4,293,070 $ 4,286,232 $ 4,239,492 $ 4,042,946 Commercial, industrial and other 363,976 358,659 394,416 433,553 418,813 Construction 332,868 335,167 291,252 266,883 275,716 Paycheck Protection Program 109,348 207,045 346,150 284,636 325,115 Equipment financing 119,709 121,096 119,428 116,690 118,320 Residential mortgages 407,021 391,589 385,778 377,380 343,317 Consumer and home equity 277,604 282,206 285,690 302,598 319,364 Total loans $ 5,880,802 $ 5,988,832 $ 6,108,946 $ 6,021,232 $ 5,843,591 Deposits Noninterest-bearing $ 1,724,646 $ 1,683,887 $ 1,631,942 $ 1,510,224 $ 1,474,847 Savings and interest-bearing transaction accounts 4,401,367 4,198,709 4,049,914 3,867,303 3,647,328 Time deposits 804,899 832,439 953,370 1,078,256 1,144,341 Total deposits $ 6,930,912 $ 6,715,035 $ 6,635,226 $ 6,455,783 $ 6,266,516 Total loans to total deposits ratio 84.8 % 89.2 % 92.1 % 93.3 % 93.3 % Selected Average Balance Sheet Data Loans $ 5,943,698 $ 6,080,408 $ 6,089,757 $ 5,939,904 $ 5,775,093 Investment securities 1,144,356 1,066,086 1,003,479 912,723 873,066 Interest-earning assets 7,611,259 7,342,952 7,230,136 7,137,884 7,009,939 Total assets 8,070,050 7,784,385 7,704,603 7,625,458 7,516,069 Noninterest-bearing demand deposits 1,702,788 1,660,825 1,545,968 1,499,093 1,475,422 Savings deposits 653,840 639,540 604,931 571,794 548,662 Interest-bearing transaction accounts 3,701,676 3,495,610 3,388,027 3,313,556 3,086,260 Time deposits 826,831 880,079 1,044,915 1,112,053 1,176,181 Total deposits 6,885,135 6,676,054 6,583,841 6,496,496 6,286,525 Short-term borrowings 108,519 85,325 73,492 68,962 58,845 Other borrowings 162,216 140,162 143,261 155,943 269,093 Total interest-bearing liabilities 5,453,082 5,240,716 5,254,626 5,222,308 5,139,042 Stockholders' equity 807,956 781,299 770,255 753,059 751,099 (1) Periods prior to December 31, 2020 do not reflect the adoption of ASU 2016-13.
Lakeland Bancorp, Inc. Financial Highlights (Unaudited) For the Quarter Ended September 30, June 30, March 31, December 31, September 30, (dollars in thousands) 2021 2021 2021 2020 2020 Average Annualized Yields (Taxable Equivalent Basis) and Costs Assets Loans 4.00 % 3.99 % 3.91 % 3.92 % 3.91 % Taxable investment securities and other 1.68 % 1.72 % 1.81 % 1.84 % 2.09 % Tax-exempt securities 2.15 % 2.50 % 2.54 % 2.51 % 2.55 % Federal funds sold and interest-bearing cash accounts 0.12 % 0.11 % 0.11 % 0.09 % 0.10 % Total interest-earning assets 3.40 % 3.57 % 3.56 % 3.51 % 3.49 % Liabilities Savings accounts 0.05 % 0.05 % 0.05 % 0.05 % 0.06 % Interest-bearing transaction accounts 0.30 % 0.32 % 0.34 % 0.38 % 0.44 % Time deposits 0.55 % 0.61 % 0.83 % 1.01 % 1.19 % Borrowings 2.33 % 2.22 % 2.87 % 2.84 % 2.73 % Total interest-bearing liabilities 0.41 % 0.42 % 0.51 % 0.59 % 0.72 % Net interest spread (taxable equivalent basis) 2.99 % 3.15 % 3.05 % 2.92 % 2.77 % Annualized net interest margin (taxable equivalent basis) 3.10 % 3.27 % 3.19 % 3.08 % 2.96 % Annualized cost of deposits 0.23 % 0.25 % 0.32 % 0.37 % 0.44 % Asset Quality Data Allowance for Credit Losses on Loans Balance at beginning of period $ 60,389 $ 67,252 $ 71,124 $ 65,242 $ 57,839 Impact of adopting ASU 2016-13 (1) — — 6,656 — (Benefit) provision for credit losses on loans (2,705 ) (5,314 ) (2,808 ) (246 ) 8,000 Charge-offs (969 ) (1,862 ) (1,270 ) (746 ) (682 ) Recoveries 1,238 313 206 218 85 Balance at end of period $ 57,953 $ 60,389 $ 67,252 $ 71,124 $ 65,242 Net Loan Charge-Offs (Recoveries) Commercial, real estate $ (1 ) $ 1,590 $ 843 $ (47 ) $ 298 Commercial, industrial and other (265 ) 5 221 478 173 Equipment financing 139 4 83 64 95 Residential mortgages 27 (82 ) (58 ) — (1 ) Consumer and home equity (169 ) 32 (25 ) 33 32 Net (recoveries) charge-offs $ (269 ) $ 1,549 $ 1,064 $ 528 $ 597 Non-Performing Assets (2) Commercial, real estate $ 10,343 $ 20,594 $ 23,984 $ 35,091 $ 26,145 Commercial, industrial and other 1,108 1,449 2,252 2,633 1,484 Equipment financing 224 264 293 327 444 Residential mortgages 123 — 2,323 2,469 2,695 Consumer and home equity 452 308 2,274 2,243 2,322 Total non-accrual loans 12,250 22,615 31,126 42,763 33,090 Property acquired through foreclosure or repossession — — — — — Total non-performing assets $ 12,250 $ 22,615 $ 31,126 $ 42,763 $ 33,090 Loans past due 90 days or more and still accruing $ — $ — $ — $ 1 $ 165 Loans restructured and still accruing $ 3,414 $ 3,595 $ 3,799 $ 3,856 $ 4,299 Ratio of allowance for loan losses to total loans 0.99 % 1.01 % 1.10 % 1.18 % 1.11 % Total non-accrual loans to total loans 0.21 % 0.38 % 0.51 % 0.71 % 0.57 % Total non-performing assets to total assets 0.15 % 0.29 % 0.40 % 0.56 % 0.44 % Annualized net (recoveries) charge-offs to average loans (0.02 )% 0.10 % 0.07 % 0.04 % 0.04 % (1) Periods prior to December 31, 2020 do not reflect the adoption of ASU 2016-13
(2) Includes non-accrual purchased credit deteriorated loans from December 31, 2020 forwardLakeland Bancorp, Inc. Supplemental Information - Non-GAAP Financial Measures (Unaudited) At or for the Quarter Ended September 30, June 30, March 31, December 31, September 30, (dollars in thousands, except per share amounts) 2021 2021 2021 2020 2020 Calculation of Tangible Book Value Per Common Share Total common stockholders' equity at end of period - GAAP $ 814,128 $ 796,676 $ 768,065 $ 763,784 $ 753,572 Less: Goodwill 156,277 156,277 156,277 156,277 156,277 Less: Other identifiable intangible assets 2,631 2,841 3,063 3,288 3,538 Total tangible common stockholders' equity at end of period - Non-GAAP $ 655,220 $ 637,558 $ 608,725 $ 604,219 $ 593,757 Shares outstanding at end of period 50,602 50,601 50,598 50,480 50,468 Book value per share - GAAP $ 16.09 $ 15.74 $ 15.18 $ 15.13 $ 14.93 Tangible book value per share - Non-GAAP $ 12.95 $ 12.60 $ 12.03 $ 11.97 $ 11.77 Calculation of Tangible Common Equity to Tangible Assets Total tangible common stockholders' equity at end of period - Non-GAAP $ 655,220 $ 637,558 $ 608,725 $ 604,219 $ 593,757 Total assets at end of period - GAAP $ 8,172,479 $ 7,854,238 $ 7,771,761 $ 7,664,297 $ 7,522,184 Less: Goodwill 156,277 156,277 156,277 156,277 156,277 Less: Other identifiable intangible assets 2,631 2,841 3,063 3,288 3,538 Total tangible assets at end of period - Non-GAAP $ 8,013,571 $ 7,695,120 $ 7,612,421 $ 7,504,732 $ 7,362,369 Common equity to assets - GAAP 9.96 % 10.14 % 9.88 % 9.97 % 10.02 % Tangible common equity to tangible assets - Non-GAAP 8.18 % 8.29 % 8.00 % 8.05 % 8.06 % Calculation of Return on Average Tangible Common Equity Net income - GAAP $ 22,289 $ 27,407 $ 23,175 $ 18,848 $ 14,427 Total average common stockholders' equity - GAAP $ 807,956 $ 781,299 $ 770,255 $ 753,059 $ 751,099 Less: Average goodwill 156,277 156,277 156,277 156,277 156,277 Less: Average other identifiable intangible assets 2,758 2,979 3,192 3,433 3,689 Total average tangible common stockholders' equity - Non-GAAP $ 648,921 $ 622,043 $ 610,786 $ 593,349 $ 591,133 Return on average common stockholders' equity - GAAP 10.94 % 14.07 % 12.20 % 9.96 % 7.64 % Return on average tangible common stockholders' equity - Non-GAAP 13.63 % 17.67 % 15.39 % 12.64 % 9.71 % Calculation of Efficiency Ratio Total noninterest expense $ 37,207 $ 34,097 $ 33,903 $ 36,945 $ 32,097 Amortization of core deposit intangibles (211 ) (221 ) (226 ) (249 ) (250 ) Merger-related expenses (1,072 ) — — — — Long term debt extinguishment costs (831 ) — — (3,777 ) — Noninterest expense, as adjusted $ 35,093 $ 33,876 $ 33,677 $ 32,919 $ 31,847 Net interest income $ 59,338 $ 59,740 $ 56,728 $ 55,135 $ 52,134 Total noninterest income 5,469 5,269 5,759 6,845 6,773 Total revenue 64,807 65,009 62,487 61,980 58,907 Tax-equivalent adjustment on municipal securities 157 167 163 149 108 Gains on sales of investment securities — (9 ) — (871 ) — Total revenue, as adjusted $ 64,964 $ 65,167 $ 62,650 $ 61,258 $ 59,015 Efficiency ratio - Non-GAAP 54.02 % 51.98 % 53.75 % 53.74 % 53.96 % Lakeland Bancorp, Inc. Supplemental Information - Non-GAAP Financial Measures (Unaudited) For the Nine Months Ended September 30, (dollars in thousands) 2021 2020 Calculation of Return on Average Tangible Common Equity Net income - GAAP $ 72,871 $ 38,670 Total average common stockholders' equity - GAAP $ 786,642 $ 743,318 Less: Average goodwill 156,277 156,277 Less: Average other identifiable intangible assets 2,975 3,944 Total average tangible common stockholders' equity - Non-GAAP $ 627,390 $ 583,097 Return on average common stockholders' equity - GAAP 12.39 % 6.95 % Return on average tangible common stockholders' equity - Non-GAAP 15.53 % 8.86 % Calculation of Efficiency Ratio Total noninterest expense $ 105,207 $ 96,063 Amortization of core deposit intangibles (658 ) (776 ) Long-term debt extinguishment costs (831 ) (356 ) Merger-related expenses (1,072 ) — Noninterest expense, as adjusted $ 102,646 $ 94,931 Net interest income $ 175,806 $ 152,552 Noninterest income 16,497 20,265 Total revenue $ 192,303 $ 172,817 Tax-equivalent adjustment on municipal securities 487 289 Gains on sales of investment securities (9 ) (342 ) Total revenue, as adjusted $ 192,781 $ 172,764 Efficiency ratio - Non-GAAP 53.24 % 54.95 %