OAK RIDGE, N.J., Jan. 20, 2011 (GLOBE NEWSWIRE) -- Lakeland Bancorp, Inc. (Nasdaq:LBAI) reported the following developments for the fourth quarter and full year 2010:
- Net Income Available to Common Shareholders was $4.4 million or $0.17 per diluted share for the fourth quarter of 2010, as compared to $1.3 million, or $0.05 per diluted share reported in the same period last year. For the year ended 2010, Net Income Available to Common Shareholders was $15.2 million or $0.60 per diluted share, as compared to a net loss of ($8.6) million or ($0.35) per share in 2009.
- The Company declared a quarterly cash dividend of $0.06 per common share. The cash dividend will be paid on February 15, 2011 to holders of record as of the close of business on January 31, 2011. In addition, the Company has authorized a 5% stock dividend, which will be paid on February 16, 2011 to holders of record as of the close of business January 31, 2011. The Company also declared a dividend of 5% for the quarterly dividend payment due February 15, 2011 for the preferred stock issued to the U.S. Department of the Treasury under the Capital Purchase Program.
- In the fourth quarter of 2010, net interest margin ("NIM") at 3.93% was three basis points higher than the NIM reported for the same period last year, and equaled the third quarter of 2010. The NIM for 2010 was 3.95%, a 21 basis point improvement from 3.74% reported in 2009.
- Noninterest bearing demand deposits of $383.9 million at December 31, 2010 increased by $4.3 million from September 30, 2010 and by $60.7 million, or 19%, from year-end 2009.
- The efficiency ratio for the fourth quarter of 2010 was 57.0%, which equaled the efficiency ratio for the same period in 2009, reflecting the continued management of expenses. For the year ended 2010, the efficiency ratio was 56.6%, as compared to 62.1% in 2009.
- The provision for loan and lease losses in the fourth quarter of 2010 was $4.5 million, as compared to $6.4 million for the same period in 2009. For 2010, the provision for loan and lease losses was $19.3 million, which compared to $51.6 million in 2009. Included in the 2009 total was $35.2 million allocated to leasing loans. The loan loss reserve as a percentage of total loans was 1.36% at December 31, 2010, as compared to 1.27% at year-end 2009.
Thomas J. Shara, Lakeland Bancorp's President and CEO said, "We are pleased to report fourth quarter and full-year 2010 earnings which showed substantial improvement from the same respective periods last year. These results were driven by a continued strong net interest margin, controlled expenses, and a reduced provision for loan and lease losses. In 2010, we have continued to emphasize building long-term relationships with consumers and small businesses in the communities we serve. This effort is reflected in a 19% increase in non-interest bearing demand deposits, as well as increases in commercial and industrial loans and residential mortgage loans of 12% and 5%, respectively, in 2010. In the fourth quarter of 2010, loans increased overall by $28.2 million, including $15.2 million in commercial and industrial loans and $25.5 million in commercial real estate loans."
Earnings
Net Interest Income
Net interest income for the fourth quarter of 2010 was $25.3 million, which was equivalent to the net interest income for the same period last year. Net interest margin increased by three basis points to 3.93% from 3.90% reported in the fourth quarter of 2009. The increase in net interest margin was primarily driven by the continued decrease in the cost of funds. The Company's yield on interest-earning assets in the fourth quarter of 2010 was 4.81%, a decrease of 41 basis points from the same period in 2009 and twelve basis points lower than the third quarter of 2010. The cost of interest-bearing liabilities was 1.07%, a decrease of 50 basis points from the fourth quarter of 2009 and eleven basis points from the third quarter of 2010.
For 2010, net interest income was $99.8 million, or 7% higher than the $93.4 million reported in 2009. Net interest margin for 2010 at 3.95% compared to 3.74% for 2009. The Company's yield on interest-earning assets decreased 37 basis points from 5.34% in 2009, to 4.97% in 2010. The Company's cost of interest bearing liabilities decreased 68 basis points from 1.89% for 2009 to 1.21% in 2010.
Noninterest income
Noninterest income, excluding net gains (losses) on investment securities, totaled $4.6 million for the fourth quarter of 2010, an increase of $217,000, or 5%, as compared to the same period in 2009. Service charges on deposits at $2.7 million decreased by $132,000, while commissions and fees at $850,000 decreased by 12%, primarily due to reduced loan fees and investment commission income. Gains on leasing related assets were $409,000 in the fourth quarter of 2010 as compared to losses of $87,000 in the fourth quarter of 2009.
Noninterest income for 2010, excluding gains on the sale of investment securities, totaled $17.7 million, as compared to $16.0 million for 2009. Service charges on deposit accounts at $10.3 million were $640,000, or 6%, lower than 2009, primarily due to lower overdraft fees collected. Gains on leasing related assets were $1.6 million in 2010 as compared to losses of $1.1 million in 2009. Income on bank owned life insurance at $1.5 million decreased by $414,000 as compared to 2009 as the Company received an insurance benefit on a bank owned life insurance policy in 2009.
Noninterest expense
Noninterest expense for the fourth quarter of 2010 was $17.6 million, compared to $20.3 million for the same period in 2009. Included in noninterest expense in the fourth quarter of 2009 was a $3.1 million fee on the prepayment of long-term debt. Excluding this item, noninterest expenses at $17.6 million in the fourth quarter of 2010 were $329,000 higher than the total reported for the same period in 2009. Salary and benefit expense at $9.1 million was $476,000, or 6%, higher than the same period in 2009. Net occupancy, furniture and equipment expenses at $2.9 million remained unchanged. Marketing expense at $987,000 and stationery and supplies expense at $464,000 increased by $362,000 and $74,000, respectively, as compared to the same period in 2009 last year as certain expenses incurred for the Company's new brand identity project were expensed in the fourth quarter of 2010.
For 2010, noninterest expense at $70.4 million compared to $73.8 million for 2009. Included in the total for 2010 is a $1.8 million prepayment fee on long-term debt expensed in the third quarter of 2010, while in 2009 noninterest expense included the $3.1 prepayment fee previously mentioned, a $1.2 million industry-wide special FDIC assessment and a $704,000 expense incurred relating to the pretax payout on a life insurance benefit. Excluding all of these items, non-interest expenses in 2010 at $68.5 million were $245,000 lower than the $68.8 million reported for 2009. Collection expenses at $592,000 and expenses on other real estate owned and other repossessed assets at $483,000, decreased by $960,000 and $519,000, respectively, while legal expenses at $1.7 million increased by $694,000 as compared to the same period last year.
Financial Condition
At December 31, 2010, total assets were $2.8 billion, a $68.7 million, or 3%, increase from year-end 2009. Total loans at $2.0 billion were equivalent to total loans at December 31, 2009. Residential mortgage loans at $403.6 million and commercial and industrial loans at $188.4 million, increased in 2010 by $20.8 million and $19.9 million, respectively, while leasing loans at $67.2 million decreased by $53.3 million. Total deposits at $2.2 billion increased by $38.7 million, or 2% from year-end 2009. Noninterest bearing demand deposits at $383.9 million and savings and interest-bearing transaction accounts at $1.4 billion have increased by $60.7 million and $30.9 million, respectively. This increase was partially offset by a decrease in time deposits of $52.9 million. The loan-to-deposit ratio on December 31, 2010 was 92%, which compared to 94% on December 31, 2009.
Asset Quality
At December 31, 2010, non-performing assets totaled $44.6 million (1.60% of total assets), as compared to $45.2 million (1.63% of total assets) at September 30, 2010. The Allowance for Loan and Lease Losses totaled $27.3 million at December 31, 2010, and represented 1.36% of total loans. During the fourth quarter of 2010, the Company had net charge-offs of $4.4 million (annualized 0.89% of total loans). For 2010, the net charge-offs totaled $17.5 million.
Capital
Stockholders' equity was $260.7 million and book value per common share was $8.82 as of December 31, 2010. As of December 31, 2010, the Company's leverage ratio was 9.21%. Tier I and total risk based capital ratios were 12.43% and 13.68%, respectively. These regulatory capital ratios exceed those necessary to be considered a well-capitalized institution under Federal guidelines.
Forward-Looking Statements
The information disclosed in this document includes various forward-looking statements (with respect to corporate objectives, trends, and other financial and business matters) that are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words "anticipates", "projects", "intends", "estimates", "expects", "believes", "plans", "may", "will", "should", "could", and other similar expressions are intended to identify such forward-looking statements. Lakeland cautions that these forward-looking statements are necessarily speculative and speak only as of the date made, and are subject to numerous assumptions, risks and uncertainties, all of which may change over time. Actual results could differ materially from such forward-looking statements. The following factors, among others, could cause actual results to differ materially and adversely from such forward-looking statements: changes in the financial services industry and the U.S. and global capital markets, changes in economic conditions nationally, regionally and in the Company's markets, the nature and timing of actions of the Federal Reserve Board and other regulators, the nature and timing of legislation affecting the financial services industry, government intervention in the U.S. financial system, passage by the U.S. Congress of legislation which unilaterally amends the terms of the U.S. Department of the Treasury's preferred stock investment in the Company, changes in levels of market interest rates, pricing pressures on loan and deposit products, credit risks of the Company's lending and leasing activities, customers' acceptance of the Company's products and services and competition. Any statements made by Lakeland that are not historical facts should be considered to be forward-looking statements. Lakeland is not obligated to update and does not undertake to update any of its forward-looking statements made herein.
EXPLANATION OF NON-GAAP FINANCIAL MEASURES
Reported amounts are presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The Company's management believes that the supplemental non-GAAP information, which consists of measurements and ratios based on tangible equity and tangible assets, is utilized by regulators and market analysts to evaluate a company's financial condition and therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies.
The Company also uses an efficiency ratio that is a non-GAAP financial measure. The ratio that the Company uses excludes amortization of core deposit intangibles, expenses on other real estate owned and other repossessed assets and, where applicable, long-term debt prepayment fees. Income for the non-GAAP ratio is increased by the favorable effect of tax-exempt income and excludes securities gains and losses, which can vary from period to period. The Company uses this ratio because it believes the ratio provides a better comparison of period to period operating performance.
Lakeland Bancorp, the holding company for Lakeland Bank, has a current asset base of $2.8 billion and forty-seven (47) offices spanning six northwestern New Jersey counties: Bergen, Essex, Morris, Passaic, Sussex and Warren. Lakeland Bank, headquartered at 250 Oak Ridge Road, Oak Ridge, New Jersey offers an extensive array of consumer and commercial products and services, including online banking, localized commercial lending teams, and 24-hour or less turnaround time on consumer loan applications. For more information about their full line of products and services, visit their website at .
CONTACT: Thomas J. Shara President & CEO Joseph F. Hurley EVP & CFO 973-697-2000
