Lakeland Bancorp Announces First Quarter Results

BY GlobeNewswire | MUNICIPAL | 04/19/24 08:00 AM EDT

OAK RIDGE, N.J., April 19, 2024 (GLOBE NEWSWIRE) -- Lakeland Bancorp, Inc. (LBAI) (the ?Company?), the parent company of Lakeland Bank (?Lakeland?), reported net income of $19.8 million and earnings per diluted share ("EPS") of $0.30 for the three months ended March 31, 2024 compared to net income of $19.8 million and diluted EPS of $0.30 for the three months ended March 31, 2023. For the first quarter of 2024, annualized return on average assets was 0.73%, annualized return on average common equity was 6.79% and annualized return on average tangible common equity (non-GAAP) was 8.91%.

Thomas Shara, Lakeland Bancorp?s President and CEO commented on the quarterly financial results, "Despite the uncertain economic environment, we are pleased with our results and our continued outstanding asset quality. I want to thank all of the Lakeland associates for their continued incredible contributions and unwavering customer support."

Regarding the announced merger with Provident Financial Services, Inc. ("Provident"), Mr. Shara continued, "We are delighted that all regulatory approvals required for the merger have been obtained and Provident is diligently moving forward with its subordinated debt offering which is a required closing condition of the merger. Both companies are excited to complete the merger quickly and create New Jersey?s super community bank that focuses on serving our customers.?

First Quarter 2024 Highlights

  • In the first quarter of 2024 a benefit for credit losses of $2.7 million was recorded resulting primarily from a $2.9 million recovery on Signature Bank subordinated debt previously charged off partially offset by a $239,000 provision for credit losses on loans.
  • First quarter 2024 results continue to be impacted by the increased market rate environment. Net interest margin for the first quarter of 2024 decreased six basis points to 2.46% from 2.52% in the prior quarter and decreased 61 basis points from 3.07% in the first quarter of 2023. For more information, please see "Net Interest Margin and Net Interest Income" below.
  • Nonperforming assets decreased 12% to $14.9 million, or 0.14% of total assets, for the first quarter of 2024 compared to $16.9?million, or 0.16% of total assets, in the first quarter of 2023 and decreased 43% compared to $26.0 million, or 0.23% of total assets in the linked fourth quarter.

Net Interest Margin and Net Interest Income

Net interest margin for the three months ended March 31, 2024 declined from previous periods as a result of an increase in the cost of interest-bearing liabilities partially offset by an increase in the yields on interest-earning assets driven by the increase in market interest rates. The increased rate environment also has resulted in a change in customers' banking behaviors causing them to move funds from noninterest-bearing and lower yielding interest-bearing transaction and savings accounts to higher yielding time deposits.

Net interest income for the first quarter of 2024 of $62.6 million decreased $13.4 million compared to the first quarter of 2023.

Net interest margin for the first quarter of 2024 of 2.46% decreased 61 basis points compared to the first quarter of 2023 and decreased 6 basis points compared to the fourth quarter of 2023.

The yield on interest-earning assets for the first quarter of 2024 increased 42 basis points to 4.98% as compared to 4.56% for the first quarter of 2023 and increased 5 basis points as compared to 4.93% for the fourth quarter of 2023.

The cost of interest-bearing liabilities for the first quarter of 2024 was 3.39% compared to 2.11% for the first quarter of 2023 and 3.25% for the fourth quarter of 2023.

Noninterest Income

For the first quarter of 2024, noninterest income totaled $5.1?million, a decrease of $1.2?million as compared to the first quarter of 2023. Service charges on deposit accounts declined $830,000 from the first quarter of 2023 to the same period in 2024 resulting from a decline in interchange income due to the impact of the Durbin Amendment which became effective for Lakeland in the third quarter of 2023. One of the provisions of the Durbin Amendment is reduced interchange income for banks over $10 billion in assets. Commissions and fees decreased $235,000 driven primarily by decreases in loan fee income and investment services income. Losses on equity securities totaled $129,000 in the first quarter of 2024 compared to gains of $148,000 in the first quarter of 2023. Gains on sales of loans decreased $125,000 compared to the first quarter of 2023, while swap income increased $233,000. Additionally, income on bank owned life insurance increased $101,000 from the first quarter of 2023 to the same period in 2024 due primarily to a claim received in the first quarter of 2024.

Noninterest Expense

Noninterest expense for the first quarter of 2024 of $44.6?million decreased $4.0?million compared to the first quarter of 2023 due primarily to compensation and employee benefits which decreased $3.1?million primarily as a result of a decline in headcount related to the anticipated merger with Provident Financial Services, Inc. Merger-related expenses declined from $295,000 in the first quarter of 2023 to $68,000 for the first quarter of 2024 due to the timing of expenses incurred. Other operating expenses in the first quarter of 2024 decreased $865,000 compared to the same period in 2023 due primarily to decreased consulting fees, telecommunications expense, appraisal fees and other expenses. FDIC insurance expense increased $430,000 due to an increase in the assessment rate starting in second quarter of 2023 related to Lakeland's asset size exceeding $10 billion.

Income Tax Expense

The effective tax rate for the first quarter of 2024 was 23.0% compared to 22.9% for the first quarter of 2023.

Financial Condition

At March?31, 2024, total assets were $10.96 billion, a decrease of $173.7?million, compared to December?31, 2023. As of March?31, 2024, total loans decreased $23.4?million to $8.32 billion and investment securities decreased $41.9 million to $1.81 billion from December?31, 2023. On the funding side, total deposits decreased $80.8 million from December?31, 2023, to $8.50 billion at March?31, 2024. During the first three months of 2024, noninterest-bearing accounts and transaction and savings accounts decreased $102.6 million and $41.5 million, respectively, while time deposits increased $63.3 million. Borrowings decreased $111.1 million from December 31, 2023 to March?31, 2024. At March?31, 2024, total loans as a percent of total deposits was 97.9%.

Asset Quality

At March?31, 2024, non-performing assets totaled $14.9?million or 0.14% of total assets compared to $16.9?million, or 0.16% of total assets at March?31, 2023 and $26.0 million, or 0.23% of total assets at December?31, 2023. Non-performing assets decreased $11.1 million compared to the fourth quarter of 2023 primarily as a result of the full payoff of one construction loan totaling $12.7 million that was in non-accrual status. Non-accrual loans as a percent of total loans was 0.18% at March?31, 2024, compared to 0.21% at March?31, 2023 and 0.31% at December 31, 2023. The allowance for credit losses on loans totaled $76.8 million, 0.92% of total loans, at March?31, 2024, compared to $71.4?million, 0.90% of total loans, at March?31, 2023. In the first quarter of 2024, the Company had net charge-offs of $579,000 or 0.03% of average loans compared to $74,000 or 0.00% of average loans on an annualized basis for the same period in 2023.

In the first quarter of 2024 a $2.7 million benefit for credit losses was recorded compared to a provision of $7.9 million in the first quarter of 2023. The benefit for credit losses for the first quarter of 2024 is comprised of a benefit for credit losses on investment securities of $2.9 million, a provision for credit losses on loans of $239,000 and a benefit for off-balance-sheet exposures of $72,000.


At March?31, 2024, stockholders' equity was $1.18 billion compared to $1.17 billion at December?31, 2023, a 1% increase, resulting primarily from net income, partially offset by the payment of dividends. Lakeland Bank remains above FDIC ?well capitalized? standards, with a Tier 1 leverage ratio of 9.46% at March?31, 2024. The book value per common share increased 4% to $18.10 at March?31, 2024 compared to $17.33 at March?31, 2023. Tangible book value per common share was $13.83 and $13.01 at March?31, 2024 and 2023, respectively (see "Supplemental Information - Non-GAAP Financial Measures" for a reconciliation of non-GAAP financial measures, including tangible book value). At March?31, 2024, the Company?s common equity to assets ratio and tangible common equity to tangible assets ratio (non-GAAP) were 10.76% and 8.43%, respectively, compared to 10.40% and 8.02% at March?31, 2023. On April?17, 2024, the Company declared a quarterly cash dividend of $0.145 per share to be paid on May?8, 2024, to shareholders of record as of April?29, 2024.

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, 2023, as updated by our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, 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; inflation and other 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, which may affect demand for our products and the value of our financial instruments; 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 expenses related to our announced merger with Provident Financial, unexpected delays related to the merger, inability to satisfy other closing conditions required to complete the merger, and failure to realize anticipated efficiencies and synergies from the merger. 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" and "Supplemental Information ? Reconciliation of Net Income" for a reconciliation of non-GAAP financial measures.

About Lakeland

Lakeland Bank is the wholly-owned subsidiary of Lakeland Bancorp, Inc. (LBAI) , which had $10.96 billion in total assets at March?31, 2024. With an extensive branch network and commercial lending centers throughout New Jersey and Highland Mills, N.Y., 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 or 973-697-6140 for more information.? ?
? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?

Thomas J. Shara?Thomas F. Splaine
President & CEOEVP & CFO

Lakeland Bancorp, Inc. (LBAI) and Subsidiaries
Consolidated Statements of Income (Unaudited)

??For the Three Months Ended
March 31,
(in thousands, except per share data)??2024???2023
Interest Income????
Loans and fees?$114,680??$100,481
Federal funds sold and interest-bearing deposits with banks??1,102???728
Taxable investment securities and other??11,631???11,554
Tax-exempt investment securities??1,448???1,642
Total Interest Income??128,861???114,405
Interest Expense????
Federal funds purchased and securities sold under agreements to repurchase??5,560???7,222
Other borrowings??5,980???2,100
Total Interest Expense??66,303???38,480
Net Interest Income??62,558???75,925
(Benefit) provision for credit losses??(2,692)??7,893
Net Interest Income after Provision for Credit Losses??65,250???68,032
Noninterest Income????
Service charges on deposit accounts??1,959???2,789
Commissions and fees??1,690???1,925
Income on bank owned life insurance??877???776
(Loss) gain on equity securities??(129)??148
Gains on sales of loans??305???430
Swap income??289???56
Other income??103???141
Total Noninterest Income??5,094???6,265
Noninterest Expense????
Compensation and employee benefits??26,874???29,996
Premises and equipment??7,886???7,977
FDIC insurance??1,393???963
Data processing??1,781???1,862
Merger-related expenses??68???295
Other operating expenses??6,647???7,512
Total Noninterest Expense??44,649???48,605
Income before provision for income taxes??25,695???25,692
Provision for income taxes??5,900???5,887
Net Income?$19,795??$19,805
Per Share of Common Stock???
Basic earnings?$0.30??$0.30
Diluted earnings?$0.30??$0.30

Lakeland Bancorp, Inc. (LBAI) and Subsidiaries
Consolidated Balance Sheets

(dollars in thousands)March 31, 2024?December 31, 2023
Interest-bearing deposits due from banks?4,433???27,289?
Total cash and cash equivalents?207,619???320,655?
Investment securities available for sale, at estimated fair value (allowance for credit losses of $0 at March?31, 2024 and December 31, 2023)?914,029???946,282?
Investment securities held to maturity (estimated fair value of $681,857 at March?31, 2024 and $702,563 at December 31, 2023, allowance for credit losses of $146 at March?31, 2024 and December 31, 2023)?827,107???836,377?
Equity securities, at fair value?17,646???17,697?
Federal Home Loan Bank and other membership stocks, at cost?52,205???52,517?
Loans held for sale?564???664?
Loans, net of deferred fees?8,320,424???8,343,861?
Less: Allowance for credit losses?76,823???77,163?
Net loans?8,243,601???8,266,698?
Premises and equipment, net?51,783???52,846?
Operating lease right-of-use assets?15,009???16,008?
Accrued interest receivable?37,968???37,508?
Other identifiable intangible assets?6,623???7,058?
Bank owned life insurance?160,587???159,862?
Other assets?158,314???152,566?
Total Assets$10,964,884??$11,138,567?
Liabilities and Stockholders' Equity???
Savings and interest-bearing transaction accounts?4,790,634???4,832,171?
Time deposits $250 thousand and under?1,518,991???1,458,640?
Time deposits over $250 thousand?511,780???508,808?
Total deposits?8,500,438???8,581,238?
Federal funds purchased and securities sold under agreements to repurchase?602,956???714,152?
Other borrowings?325,000???325,000?
Subordinated debentures?194,814???194,705?
Operating lease liabilities?15,820???16,891?
Other liabilities?146,426???137,212?
Total Liabilities?9,785,454???9,969,198?
Stockholders' Equity???
Common stock, no par value; authorized 100,000,000 shares; issued 65,285,261 shares and outstanding 65,154,226 shares at?March?31, 2024 and issued 65,161,310 shares and outstanding 65,030,275 shares at December?31, 2023?859,712???858,857?
Retained earnings?386,319???376,044?
Treasury shares, at cost, 131,035 shares at March?31, 2024 and December 31, 2023?(1,452)??(1,452)
Accumulated other comprehensive loss?(65,149)??(64,080)
Total Stockholders' Equity?1,179,430???1,169,369?
Total Liabilities and Stockholders' Equity$10,964,884??$11,138,567?

Lakeland Bancorp, Inc. (LBAI)
Financial Highlights

??For the Quarter Ended
(dollars in thousands, except per share data)?March 31,
?December 31,
?September 30,
?June 30,
?March 31,
Income Statement??????????
Net interest income?$62,558??$65,308??$68,906??$71,542??$75,925?
Benefit (provision) for credit losses??2,692???(1,950)??(1,262)??(1,947)??(7,893)
Gains on sales of loans??305???505???349???229???430?
(Loss) gain on equity securities??(129)??391???(294)??(135)??148?
Other noninterest income??4,918???5,890???5,363???6,575???5,687?
Merger-related expenses??(68)??(129)??(198)??(242)??(295)
Other noninterest expense??(44,581)??(42,864)??(44,170)??(46,766)??(48,310)
Pretax income??25,695???27,151???28,694???29,256???25,692?
Provision for income taxes??(5,900)??(7,083)??(6,455)??(6,628)??(5,887)
Net income?$19,795??$20,068??$22,239??$22,628??$19,805?
Basic earnings per common share?$0.30??$0.31??$0.34??$0.34??$0.30?
Diluted earnings per common share?$0.30??$0.30??$0.34??$0.34??$0.30?
Dividends paid per common share?$0.145??$0.145??$0.145??$0.145??$0.145?
Dividends paid?$9,520??$9,521??$9,521??$9,529??$9,500?
Weighted average shares - basic??65,135???65,064???65,064???65,059???64,966?
Weighted average shares - diluted??65,324???65,258???65,222???65,173???65,228?
Selected Operating Ratios??????????
Annualized return on average assets??0.73%??0.73%??0.81%??0.84%??0.75%
Annualized return on average common equity??6.79%??6.97%??7.76%??8.03%??7.17%
Annualized return on average tangible common equity (1)??8.91%??9.23%??10.29%??10.67%??9.57%
Annualized net interest margin??2.46%??2.52%??2.68%??2.83%??3.07%
Efficiency ratio (1)??64.88%??58.45%??58.43%??58.82%??57.84%
Common stockholders' equity to total assets??10.76%??10.50%??10.16%??10.38%??10.40%
Tangible common equity to tangible assets (1)??8.43%??8.20%??7.86%??8.02%??8.02%
Tier 1 risk-based ratio??11.72%??11.51%??11.31%??11.43%??11.33%
Total risk-based ratio??14.33%??14.11%??13.87%??14.03%??13.93%
Tier 1 leverage ratio??9.46%??9.27%??9.24%??9.17%??9.13%
Common equity tier 1 capital ratio??11.20%??11.00%??10.80%??10.90%??10.81%
Book value per common share?$18.10??$17.98??$17.46??$17.40??$17.33?
Tangible book value per common share (1)?$13.83??$13.69??$13.17??$13.10??$13.01?

(1) See Supplemental Information - Non-GAAP Financial Measures

Lakeland Bancorp, Inc. (LBAI)
Financial Highlights

??For the Quarter Ended
(dollars in thousands)?March 31,
?December 31,
?September 30,
?June 30,
?March 31,
Selected Balance Sheet Data at Period End????????
Allowance for credit losses on loans??76,823???77,163???75,159???73,965???71,403?
Investment securities??1,810,987???1,852,873???1,860,996???1,938,611???1,994,927?
Total assets??10,964,884???11,138,567???11,176,809???10,897,966???10,837,241?
Total deposits??8,500,438???8,581,238???8,602,503???8,444,681???8,536,943?
Short-term borrowings??602,956???714,152???728,769???938,718???813,328?
Other borrowings??519,814???519,705???519,596???219,486???219,376?
Stockholders' equity??1,179,430???1,169,369???1,135,627???1,131,702???1,126,580?
Non-owner occupied commercial?$2,973,652??$2,987,959??$2,980,811??$2,991,124??$2,943,897?
Owner occupied commercial??1,264,061???1,283,221???1,299,977???1,201,049???1,205,635?
Non-owner occupied residential??202,014???213,986???208,560???205,818???210,203?
Commercial, industrial and other??642,151???638,894???632,919???594,790???562,677?
Equipment financing??178,157???179,171???174,946???173,469???161,889?
Residential mortgages??997,569???985,768???956,535???922,109???857,427?
Consumer and home equity??340,168???343,212???344,683???343,755???330,060?
Total loans?$8,320,424??$8,343,861??$8,294,057??$8,101,287??$7,952,553?
Savings and interest-bearing transaction accounts??4,790,634???4,832,171???4,862,246???4,775,184???4,918,041?
Time deposits??2,030,771???1,967,448???1,882,933???1,803,245???1,620,312?
Total deposits?$8,500,438??$8,581,238??$8,602,503??$8,444,681??$8,536,943?
Total loans to total deposits ratio??97.9%??97.2%??96.4%??95.9%??93.2%
Selected Average Balance Sheet Data??????????
Investment securities??1,916,350???1,955,407???2,013,153???2,068,073???2,117,076?
Interest-earning assets??10,298,889???10,354,079???10,276,375???10,214,142???10,091,341?
Total assets??10,888,436???10,963,641???10,875,553???10,808,261???10,698,807?
Noninterest-bearing demand deposits??1,710,604???1,829,996???1,871,516???1,935,776???2,040,070?
Savings deposits??669,336???699,199???759,232???830,836???928,796?
Interest-bearing transaction accounts??4,210,331???4,229,019???4,103,217???4,007,867???4,224,024?
Time deposits??2,029,735???1,926,436???1,856,266???1,722,935???1,385,661?
Total deposits??8,620,006???8,684,650???8,590,231???8,497,414???8,578,551?
Short-term borrowings??415,547???423,629???744,582???813,471???617,611?
Other borrowings??519,748???519,635???232,573???219,425???219,308?
Total interest-bearing liabilities??7,844,697???7,797,918???7,695,870???7,594,534???7,375,400?
Stockholders' equity??1,172,324???1,142,031???1,137,387???1,130,563???1,120,356?

Lakeland Bancorp, Inc. (LBAI)
Financial Highlights

??For the Quarter Ended
(dollars in thousands)?March 31,
?December 31,
?September 30,
?June 30,
?March 31,
Average Annualized Yields (Taxable Equivalent Basis) and Costs??????
Taxable investment securities and other??2.87%??2.87%??2.84%??2.74%??2.61%
Tax-exempt securities??2.50%??2.49%??2.49%??2.45%??2.41%
Federal funds sold and interest-bearing cash accounts??5.66%??5.46%??5.41%??5.41%??4.00%
Total interest-earning assets??4.98%??4.93%??4.86%??4.71%??4.56%
Savings accounts??0.19%??0.20%??0.24%??0.26%??0.28%
Interest-bearing transaction accounts??3.00%??2.89%??2.60%??2.16%??1.85%
Time deposits??4.57%??4.34%??3.78%??3.39%??2.71%
Total interest-bearing liabilities??3.39%??3.25%??2.96%??2.59%??2.11%
Net interest spread (taxable equivalent basis)??1.60%??1.68%??1.90%??2.12%??2.45%
Annualized net interest margin (taxable equivalent basis)??2.46%??2.52%??2.68%??2.83%??3.07%
Annualized cost of deposits??2.56%??2.38%??2.08%??1.73%??1.38%
Loan Quality Data??????????
Allowance for Credit Losses on Loans??????????
Balance at beginning of period?$77,163??$75,159??$73,965??$71,403??$70,264?
Provision for credit losses on loans??239???2,246???1,327???2,422???1,213?
Balance at end of period?$76,823??$77,163??$75,159??$73,965??$71,403?
Net Loan Charge-Offs (Recoveries)??????????
Non owner occupied commercial?$???$???$???$???$??
Owner occupied commercial??????????????(6)????
Non owner occupied residential????????????????????
Commercial, industrial and other??(21)??(7)??????(163)??(35)
Equipment finance??????83???136???12???46?
Residential mortgages??????128?????????????
Consumer and home equity??36???38???(3)??4???63?
Net charge-offs (recoveries)?$579??$242??$133??$(140)?$74?

Lakeland Bancorp, Inc. (LBAI)
Financial Highlights

??For the Quarter Ended
(dollars in thousands)?March 31,
?December 31,
?September 30,
?June 30,
?March 31,
Non-Performing Assets (1)??????????
Non owner occupied commercial?$745??$769??$798??$864??$908?
Owner occupied commercial??7,018???6,849???7,026???8,076???8,757?
Non owner occupied residential??517???????????41?????
Commercial, industrial and other??323???401???217???1,737???2,221?
Equipment finance??1,147???518???626???644???379?
Residential mortgages??2,732???2,400???2,319???1,954???1,918?
Consumer and home equity??1,204???1,232???1,331???2,486???1,131?
Total non-accrual loans??14,853???25,963???13,423???16,068???16,878?
Total non-performing assets?$14,853??$25,963??$13,423??$16,068??$16,878?
Loans past due 90 days or more and still accruing?$???$???$???$???$??
Loans restructured and still accruing?$???$???$???$???$??
Ratio of allowance for loan losses to total loans??0.92%??0.92%??0.91%??0.91%??0.90%
Total non-accrual loans to total loans??0.18%??0.31%??0.16%??0.20%??0.21%
Total non-performing assets to total assets??0.14%??0.23%??0.12%??0.15%??0.16%
Annualized net charge-offs (recoveries) to average loans??0.03%??0.01%??0.01%?(0.01)%???%

(1) Includes non-accrual purchased credit deteriorated loans.

Lakeland Bancorp, Inc. (LBAI)
Supplemental Information - Non-GAAP Financial Measures

??At or for the Quarter Ended
(dollars in thousands, except per share amounts)?March 31,
?December 31,
?September 30,
?June 30,
?March 31,
Calculation of Tangible Book Value Per Common Share????????
Total common stockholders' equity at end of period - GAAP?$1,179,430??$1,169,369??$1,135,627??$1,131,702??$1,126,580?
Less: Goodwill??271,829???271,829???271,829???271,829???271,829?
Less: Other identifiable intangible assets??6,623???7,058???7,559???8,060???8,572?
Total tangible common stockholders' equity at end of period - Non-GAAP?$900,978??$890,482??$856,239??$851,813??$846,179?
Shares outstanding at end of period??65,154???65,030???65,030???65,028???65,017?
Book value per share - GAAP?$18.10??$17.98??$17.46??$17.40??$17.33?
Tangible book value per share - Non-GAAP?$13.83??$13.69??$13.17??$13.10??$13.01?
Calculation of Tangible Common Equity to Tangible Assets??????
Total tangible common stockholders' equity at end of period - Non-GAAP?$900,978??$890,482??$856,239??$851,813??$846,179?
Total assets at end of period - GAAP?$10,964,884??$11,138,567??$11,176,809??$10,897,966??$10,837,241?
Less: Goodwill??271,829???271,829???271,829???271,829???271,829?
Less: Other identifiable intangible assets??6,623???7,058???7,559???8,060???8,572?
Total tangible assets at end of period - Non-GAAP?$10,686,432??$10,859,680??$10,897,421??$10,618,077??$10,556,840?
Common equity to assets - GAAP??10.76%??10.50%??10.16%??10.38%??10.40%
Tangible common equity to tangible assets - Non-GAAP??8.43%??8.20%??7.86%??8.02%??8.02%
Calculation of Return on Average Tangible Common Equity??????
Net income - GAAP?$19,795??$20,068??$22,239??$22,628??$19,805?
Total average common stockholders' equity - GAAP?$1,172,324??$1,142,031??$1,137,387??$1,130,563??$1,120,356?
Less: Average goodwill??271,829???271,829???271,829???271,829???271,829?
Less: Average other identifiable intangible assets??6,905???7,383???7,887???8,353???8,904?
Total average tangible common stockholders' equity - Non-GAAP?$893,590??$862,819??$857,671??$850,381??$839,623?
Return on average common stockholders' equity - GAAP??6.79%??6.97%??7.76%??8.03%??7.17%
Return on average tangible common stockholders' equity - Non-GAAP??8.91%??9.23%??10.29%??10.67%??9.57%
Calculation of Efficiency Ratio??????????
Total noninterest expense?$44,649??$42,993??$44,368??$47,008??$48,605?
Amortization of core deposit intangibles??436???500???501???512???516?
Merger-related expenses??68???129???198???242???295?
Noninterest expense, as adjusted?$44,145??$42,364??$43,669??$46,254??$47,794?
Net interest income?$62,558??$65,308??$68,906??$71,542??$75,925?
Total noninterest income??5,094???6,786???5,418???6,669???6,265?
Total revenue??67,652???72,094???74,324???78,211???82,190?
Tax-equivalent adjustment on municipal securities??385???385???408???422???436?
Total revenue, as adjusted?$68,037??$72,479??$74,732??$78,633??$82,626?
Efficiency ratio - Non-GAAP??64.88%??58.45%??58.43%??58.82%??57.84%



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Source: Lakeland Bancorp, Inc. (LBAI)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.