FORM 10-K |
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
LAKELAND BANCORP, INC. (Exact name of registrant as specified in its charter) |
New Jersey (State or other jurisdiction of incorporation or organization) | 22-2953275 (I.R.S. Employer Identification No.) | ||||||
250 Oak Ridge Road, Oak Ridge, New Jersey 07438 (Address of principal executive offices) (Zip code) Registrant’s telephone number, including area code: (973) 697-2000 Securities registered pursuant to Section 12(b) of the Act: | |||||||
Title of each class | Name of each exchange on which registered | ||||||
Common Stock, no par value | NASDAQ | ||||||
Securities registered pursuant to Section 12(g) of the Act: None |
Large accelerated filer | ☒ | Accelerated filer | o | ||
Non-accelerated filer | o | Smaller Reporting Company | o | ||
Emerging growth company | o |
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• | allows bank holding companies meeting management, capital, and Community Reinvestment Act standards to engage in a substantially broader range of non-banking activities than previously was permissible, including insurance underwriting and making merchant banking investments in commercial and financial companies; if a bank holding company elects to become a financial holding company, it files a certification, effective in 30 days, and thereafter may engage in certain financial activities without further approvals (Lakeland Bancorp is such a financial holding company); |
• | allows insurers and other financial services companies to acquire banks; |
• | removes various restrictions that previously applied to bank holding company ownership of securities firms and mutual fund advisory companies; and |
• | establishes the overall regulatory structure applicable to bank holding companies that also engage in insurance and securities operations. |
• | All financial institutions must establish anti-money laundering programs that include, at a minimum: (i) internal policies, procedures, and controls; (ii) specific designation of an anti-money laundering compliance officer; (iii) ongoing employee training programs; and (iv) an independent audit function to test the anti-money laundering program. |
• | The Secretary of the Department of the Treasury, in conjunction with other bank regulators, was authorized to issue regulations that provide for minimum standards with respect to customer identification at the time new accounts are opened. |
• | Financial institutions that establish, maintain, administer, or manage private banking accounts or correspondent accounts in the United States for non-United States persons or their representatives (including foreign individuals visiting the United States) are required to establish appropriate, specific and, where necessary, enhanced due diligence policies, procedures, and controls designed to detect and report money laundering. |
• | Financial institutions are prohibited from establishing, maintaining, administering or managing correspondent accounts for foreign shell banks (foreign banks that do not have a physical presence in any country), and will be subject to certain record keeping obligations with respect to correspondent accounts of foreign banks. |
• | Bank regulators are directed to consider a holding company’s effectiveness in combating money laundering when ruling on Federal Reserve Act and Bank Merger Act applications. |
• | audit committees for all reporting companies; |
• | certification of financial statements by the chief executive officer and the chief financial officer; |
• | the forfeiture of bonuses or other incentive-based compensation and profits from the sale of an issuer’s securities by directors and senior officers in the twelve month period following initial publication of any financial statements that later require restatement; |
• | a prohibition on insider trading during pension plan black out periods; |
• | disclosure of off-balance sheet transactions; |
• | a prohibition on personal loans to directors and officers (other than loans made by an insured depository institution (as defined in the Federal Deposit Insurance Act), if the loan is subject to the insider lending restrictions of Section 22(h) of the Federal Reserve Act); |
• | expedited filing requirements for Form 4’s; |
• | disclosure of a code of ethics and filing a Form 8-K for a change or waiver of such code; |
• | “real time” filing of periodic reports; |
• | the formation of a public accounting oversight board; |
• | auditor independence; and |
• | various increased criminal penalties for violations of the securities laws. |
• | to an amount equal to 10% of the bank’s capital and surplus, in the case of covered transactions with any one affiliate; and |
• | to an amount equal to 20% of the bank’s capital and surplus, in the case of covered transactions with all affiliates. |
• | a loan or extension of credit to an affiliate; |
• | a purchase of, or an investment in, securities issued by an affiliate; |
• | a purchase of assets from an affiliate, with some exceptions; |
• | the acceptance of securities issued by an affiliate as collateral for a loan or extension of credit to any party; and |
• | the issuance of a guarantee, acceptance or letter of credit on behalf of an affiliate. |
• | a bank and its subsidiaries may not purchase a low-quality asset from an affiliate; |
• | covered transactions and other specified transactions between a bank or its subsidiaries and an affiliate must be on terms and conditions that are consistent with safe and sound banking practices; and |
• | with some exceptions, each loan or extension of credit by a bank to an affiliate must be secured by certain types of collateral with a market value ranging from 100% to 130%, depending on the type of collateral, of the amount of the loan or extension of credit. |
• | Common Equity Tier 1 Capital Ratio of 4.5% (this is referred to as the “CET1”); |
• | Tier 1 Capital Ratio (CET1 capital plus “Additional Tier 1 capital”) of 6.0%; and |
• | Total Capital Ratio (Tier 1 capital plus Tier 2 capital) of 8.0%. |
• | CET1 of 7.0%; |
• | Tier 1 Capital Ratio of 8.5%; and |
• | Total Capital Ratio of 10.5%. |
• | Minimum Capital Requirements. The Dodd-Frank Act requires new capital rules and the application of the same leverage and risk-based capital requirements that apply to insured depository institutions to most bank holding companies. In addition to making bank holding companies subject to the same capital requirements as their bank subsidiaries, these provisions (often referred to as the Collins Amendment to the Dodd-Frank Act) were also intended to eliminate or significantly reduce the use of hybrid capital instruments, especially trust preferred securities, as regulatory capital. See “Capital Requirements.” |
• | Deposit Insurance. The Dodd-Frank Act makes permanent the $250,000 deposit insurance limit for insured deposits. Amendments to the Federal Deposit Insurance Act also revised the assessment base against which an insured depository institution’s deposit insurance premiums paid to the Deposit Insurance Fund (“DIF”) are calculated. See “Federal Deposit Insurance and Premiums.” |
• | Shareholder Votes. The Dodd-Frank Act requires publicly traded companies like Lakeland Bancorp to give shareholders a non-binding vote on executive compensation and so-called “golden parachute” payments in certain circumstances. |
• | Transactions with Affiliates. The Dodd-Frank Act enhances the requirements for certain transactions with affiliates under Section 23A and 23B of the Federal Reserve Act, including an expansion of the definition of “covered transactions” and increasing the amount of time for which collateral requirements regarding covered transactions must be maintained. |
• | Transactions with Insiders. Insider transaction limitations are expanded through the strengthening of loan restrictions to insiders and the expansion of the types of transactions subject to the various limits, including derivative transactions, repurchase agreements, reverse repurchase agreements and securities lending or borrowing transactions. Restrictions are also placed on certain asset sales to and from an insider to an institution, including requirements that such sales be on market terms and, in certain circumstances, approved by the institution’s board of directors. |
• | Enhanced Lending Limits. The Dodd-Frank Act strengthened the previous limits on a depository institution’s credit exposure to one borrower which limited a depository institution’s ability to extend credit to one person (or group of related persons) in an amount exceeding certain thresholds. The Dodd-Frank Act expanded the scope of these restrictions to include credit exposure arising from derivative transactions, repurchase agreements, and securities lending and borrowing transactions. |
• | Compensation Practices. The Dodd-Frank Act provides that the appropriate federal regulators must establish standards prohibiting as an unsafe and unsound practice any compensation plan of a bank holding company or other “covered financial institution” that provides an insider or other employee with “excessive compensation” or compensation that gives rise to excessive risk or could lead to a material financial loss to such firm. In June 2010, prior to the Dodd-Frank Act, the bank regulatory agencies promulgated the Interagency Guidance on Sound Incentive Compensation Policies, which sets forth three key principles concerning incentive compensation arrangements: |
▪ | such arrangements should provide employees incentives that balance risk and financial results in a manner that does not encourage employees to expose the financial institution to imprudent risks; |
▪ | such arrangements should be compatible with effective controls and risk management; and |
▪ | such arrangements should be supported by strong corporate governance with effective and active oversight by the financial institution’s board of directors. |
• | The Consumer Financial Protection Bureau (“Bureau”). The Dodd-Frank Act created the Bureau within the Federal Reserve. The Bureau is tasked with establishing and implementing rules and regulations under certain federal consumer protection laws with respect to the conduct of providers of certain consumer financial products and services. The Bureau has rulemaking authority over many of the statutes governing products and services offered to bank consumers. In addition, the Dodd-Frank Act permits states to adopt consumer protection laws and regulations that are more stringent than those regulations promulgated by the Bureau and state attorneys general are permitted to enforce consumer protection rules adopted by the Bureau against state-chartered institutions. The Bureau has examination and enforcement authority over all banks and savings institutions with more than $10 billion in assets. Institutions with $10 billion or less in assets, such as the Bank, will continue to be examined for compliance with the consumer laws by their primary bank regulators. |
• | De Novo Banking. The Dodd-Frank Act allows de novo interstate branching by banks. |
• | loan and lease delinquencies may increase; |
• | problem assets and foreclosures may increase; |
• | demand for our products and services may decrease; and |
• | collateral for loans made by us may decline in value, in turn reducing the borrowing ability of our customers. |
• | inflation or deflation |
• | excess growth or recession; |
• | a rise or fall in unemployment; |
• | tightening or expansion of the money supply; |
• | domestic and international disorder; |
• | instability in domestic and foreign financial markets; and |
• | actions taken or statements made by the Federal Reserve Board. |
Name and Age | Officer of the Company Since | Position with the Company, its Subsidiary Banks, and Business Experience | ||
Thomas J. Shara Age 61 | 2008 | President and CEO of the Company and the Bank (April 2008 - Present); President and Chief Credit Officer (May 2007 - April 2008) and Executive Vice President and Senior Commercial Banking Officer (February 2006 - May 2007), TD Banknorth, N.A.’s Mid-Atlantic Division. | ||
Thomas F. Splaine, Jr. Age 53 | 2016 | Executive Vice President and Chief Financial Officer of the Company and the Bank (March 2017 - Present); First Senior Vice President and Chief Accounting Officer of the Company and the Bank (May 2016 - March 2017); Senior Vice President, Financial Planning and Analysis and Investor Relations of Investors Bancorp, Inc. (January 2015 - December 2015); Senior Vice President and Chief Financial Officer of Investors Bancorp, Inc. (2008 - 2015). | ||
Ronald E. Schwarz Age 64 | 2009 | Senior Executive Vice President and Chief Operating Officer of the Company and the Bank (January 2017 - Present); Senior Executive Vice President and Chief Revenue Officer of the Company and the Bank (January 2016 - January 2017); Executive Vice President and Chief Retail Officer of the Company and the Bank (June 2009 - December 2015); Executive Vice President and Market Executive of Sovereign Bank (June 2006 - June 2009). | ||
Ellen Lalwani Age 55 | 2018 | Executive Vice President and Chief Retail Officer of the Company and the Bank (January 2018 - Present); Senior Vice President and Director of Retail Sales of the Bank (August 2008 - January 2018). | ||
Timothy J. Matteson, Esq. Age 49 | 2008 | Executive Vice President, Chief Administrative Officer, General Counsel and Corporate Secretary of the Company (January 2017 - Present); Executive Vice President, General Counsel and Corporate Secretary of the Company (March 2012 - January 2017); Senior Vice President and General Counsel of the Company (September 2008 - March 2012); Assistant General Counsel, Israel Discount Bank (November 2007 - September 2008); Senior Attorney and Senior Vice President, TD Banknorth, N.A. (February 2006 - May 2007); General Counsel and Senior Vice President, Hudson United Bancorp and Hudson United Bank (January 2005 - February 2006). | ||
James M. Nigro Age 51 | 2016 | Executive Vice President, Chief Risk Officer of the Company (March 2016 - Present); Senior Vice President, Credit Risk Manager of The Provident Bank (December 2013 - March 2016); Senior Vice-President, Commercial Lending of Lakeland Bank (May 2013 - December 2013); Executive Vice President, Chief Lending Officer of Somerset Hills Bank (July 2001 - May 2013). | ||
John F. Rath, III Age 60 | 2018 | Executive Vice President and Chief Lending Officer of the Company and the Bank (January 2018 - Present); First Senior Vice-President, Lending Group Manager of the Company (January 2016 - January 2018); Senior Vice-President, Commercial Lending of the Company (March 2015- January 2016); Senior Vice-President, Lending Group Manager of TD Bank (August 1998 - March 2015). |
High | Low | Dividends Declared | ||||||||||
Year Ended December 31, 2018 | ||||||||||||
First Quarter | $ | 21.05 | $ | 19.10 | $ | 0.100 | ||||||
Second Quarter | 20.95 | 19.30 | 0.115 | |||||||||
Third Quarter | 20.70 | 18.05 | 0.115 | |||||||||
Fourth Quarter | 18.08 | 13.88 | 0.115 |
High | Low | Dividends Declared | ||||||||||
Year Ended December 31, 2017 | ||||||||||||
First Quarter | $ | 20.75 | $ | 18.00 | $ | 0.095 | ||||||
Second Quarter | 20.35 | 18.40 | 0.100 | |||||||||
Third Quarter | 20.40 | 17.65 | 0.100 | |||||||||
Fourth Quarter | 21.65 | 19.05 | 0.100 |
Company/Market/Peer Group | 12/31/2013 | 12/31/2014 | 12/31/2015 | 12/31/2016 | 12/31/2017 | 12/31/2018 | ||||||||||||
Lakeland Bancorp, Inc. | 100.00 | 102.30 | 106.28 | 181.74 | 183.10 | 144.25 | ||||||||||||
NASDAQ Market Index | 100.00 | 114.75 | 122.74 | 133.62 | 173.22 | 168.30 | ||||||||||||
Regional Northeast Banks | 100.00 | 108.04 | 113.01 | 157.09 | 164.47 | 143.56 |
At or for the Years Ended December 31, | ||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||
Income Statement | ||||||||||||||||||||
Interest income | $ | 213,121 | $ | 190,204 | $ | 163,296 | $ | 127,514 | $ | 122,503 | ||||||||||
Interest expense | 39,562 | 24,966 | 17,647 | 10,874 | 8,937 | |||||||||||||||
Net interest income | 173,559 | 165,238 | 145,649 | 116,640 | 113,566 | |||||||||||||||
Provision for loan and lease losses | 4,413 | 6,090 | 4,223 | 1,942 | 5,865 | |||||||||||||||
Noninterest income excluding gains on investment securities and gain on debt extinguishment | 22,893 | 22,911 | 20,960 | 19,090 | 17,720 | |||||||||||||||
Gains on sales of investment securities | — | 2,524 | 370 | 241 | 2 | |||||||||||||||
Loss on equity securities | (583 | ) | — | — | — | — | ||||||||||||||
Gain on early debt extinguishment | — | — | — | 1,830 | — | |||||||||||||||
Merger related expenses | 464 | — | 4,103 | 1,152 | — | |||||||||||||||
Long-term debt prepayment fee | — | 2,828 | — | 2,407 | — | |||||||||||||||
Noninterest expenses | 110,703 | 101,706 | 95,814 | 83,652 | 79,135 | |||||||||||||||
Income before income taxes | 80,289 | 80,049 | 62,839 | 48,648 | 46,288 | |||||||||||||||
Income tax provision | 16,888 | 27,469 | 21,321 | 16,167 | 15,159 | |||||||||||||||
Net income | $ | 63,401 | $ | 52,580 | $ | 41,518 | $ | 32,481 | $ | 31,129 | ||||||||||
Per-Share Data (1) | ||||||||||||||||||||
Weighted average shares outstanding: | ||||||||||||||||||||
Basic | 47,578 | 47,438 | 42,912 | 37,844 | 37,749 | |||||||||||||||
Diluted | 47,766 | 47,674 | 43,114 | 37,993 | 37,869 | |||||||||||||||
Earnings per share: | ||||||||||||||||||||
Basic | $ | 1.32 | $ | 1.10 | $ | 0.96 | $ | 0.85 | $ | 0.82 | ||||||||||
Diluted | $ | 1.32 | $ | 1.09 | $ | 0.95 | $ | 0.85 | $ | 0.82 | ||||||||||
Cash dividend per common share | $ | 0.45 | $ | 0.40 | $ | 0.37 | $ | 0.33 | $ | 0.29 | ||||||||||
Book value per common share | $ | 13.14 | $ | 12.31 | $ | 11.65 | $ | 10.57 | $ | 10.01 | ||||||||||
Tangible book value per common share (2) | $ | 10.22 | $ | 9.38 | $ | 8.70 | $ | 7.62 | $ | 7.06 | ||||||||||
Balance Sheet | ||||||||||||||||||||
Investment securities available for sale and other (5) | $ | 667,840 | $ | 658,711 | $ | 621,803 | $ | 456,436 | $ | 467,295 | ||||||||||
Investment securities held to maturity | 153,646 | 139,685 | 147,614 | 116,740 | 107,976 | |||||||||||||||
Loans and leases, net of deferred fees | 4,456,733 | 4,152,720 | 3,870,598 | 2,965,200 | 2,653,826 | |||||||||||||||
Goodwill and other identifiable intangible assets | 138,201 | 138,795 | 139,091 | 111,519 | 111,934 | |||||||||||||||
Total assets | 5,806,093 | 5,405,639 | 5,093,131 | 3,869,550 | 3,538,325 | |||||||||||||||
Total deposits | 4,620,670 | 4,368,748 | 4,092,835 | 2,995,572 | 2,790,819 | |||||||||||||||
Total core deposits (3) | 3,863,632 | 3,631,320 | 3,547,927 | 2,652,251 | 2,510,857 | |||||||||||||||
Term borrowings | 286,145 | 296,913 | 365,650 | 303,143 | 243,736 | |||||||||||||||
Total stockholders’ equity | 623,739 | 583,122 | 550,044 | 400,516 | 379,438 | |||||||||||||||
Performance Ratios | ||||||||||||||||||||
Return on average assets | 1.15 | % | 1.00 | % | 0.90 | % | 0.89 | % | 0.92 | % | ||||||||||
Return on average tangible common equity (2) | 13.78 | % | 12.24 | % | 12.19 | % | 11.58 | % | 12.21 | % | ||||||||||
Return on average equity | 10.59 | % | 9.25 | % | 8.75 | % | 8.28 | % | 8.48 | % | ||||||||||
Efficiency ratio (2)(4) | 56.09 | % | 53.40 | % | 56.74 | % | 60.94 | % | 59.48 | % | ||||||||||
Net interest margin (tax equivalent basis) | 3.36 | % | 3.38 | % | 3.41 | % | 3.47 | % | 3.64 | % | ||||||||||
Loans to deposits | 96.45 | % | 95.06 | % | 94.57 | % | 98.99 | % | 95.09 | % | ||||||||||
Capital Ratios | ||||||||||||||||||||
Common equity to asset ratio | 10.74 | % | 10.79 | % | 10.80 | % | 10.35 | % | 10.72 | % | ||||||||||
Tangible common equity to tangible assets (2) | 8.57 | % | 8.44 | % | 8.30 | % | 7.69 | % | 7.81 | % | ||||||||||
Tier 1 leverage ratio (6) | 9.39 | % | 9.12 | % | 9.07 | % | 8.70 | % | 9.08 | % | ||||||||||
Tier 1 risk-based capital ratio (6) | 11.27 | % | 10.87 | % | 10.85 | % | 10.53 | % | 11.76 | % | ||||||||||
Total risk-based capital ratio (6) | 13.71 | % | 13.40 | % | 13.48 | % | 11.61 | % | 12.98 | % | ||||||||||
CET1 ratio (6) | 10.62 | % | 10.18 | % | 10.11 | % | 9.54% | NA |
(1) | Restated for 5% stock dividend in 2014. |
(2) | A non-GAAP financial measure. See “Non-GAAP Financial Measures” for a reconciliation of such measures to data calculated in accordance with generally accepted accounting principles. |
(3) | Core deposits represent all deposits with the exception of time deposits. |
(4) | Ratio represents noninterest expense, excluding long-term debt prepayment fee, merger related expenses and core deposit amortization, as a percentage of total revenue (calculated on a tax equivalent basis), excluding gains (losses) on securities and gain on debt extinguishment. Total revenue represents net interest income (calculated on a tax equivalent basis) plus noninterest income. |
(5) | Includes investment in equity securities, Federal Home Loan Bank and other membership stock, at cost. |
(6) | Beginning March 31, 2015, these ratios were calculated according to the Basel III capital rules that took effect on January 1, 2015. |
• | The establishment of specific reserve amounts for impaired loans and leases, including purchase-credit impaired loans. |
• | The establishment of reserves for pools of homogeneous loans and leases not subject to specific review, including impaired loans under $500,000, leases, 1 - 4 family residential mortgages, and consumer loans. |
• | Net income was $63.4 million, or $1.32 per diluted share, for the year ended December 31, 2018 compared to net income of $52.6 million, or $1.09 per diluted share, for 2017. |
• | In 2018, return on average assets was 1.15%, return on average common equity was 10.59% and return on average tangible common equity was 13.78%. This compared to 2017 ratios of return on average assets of 1.00%, return on average common equity of 9.25% and return on average tangible common equity of 12.24%. |
• | Total loans and leases increased by $304.0 million, or 7%, in 2018 when compared to 2017, with the majority of the increase in the commercial loans secured by real estate category. |
• | Total deposits increased $251.9 million, or 6%, in 2018 compared to 2017. |
• | The Company’s net interest margin was 3.36% for 2018 compared to 3.38% for 2017. |
• | Asset quality remains strong with total non-performing assets decreasing to 0.22% of total assets at December 31, 2018 from 0.27% of total assets at December 31, 2017. |
2018 vs. 2017 | 2017 vs. 2016 | |||||||||||||||||||||||
Increase (Decrease) Due to Change in: | Total Change | Increase (Decrease) Due to Change in: | Total Change | |||||||||||||||||||||
Volume | Rate | Volume | Rate | |||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
INTEREST INCOME | ||||||||||||||||||||||||
Loans and leases | $ | 11,420 | $ | 9,381 | $ | 20,801 | $ | 19,713 | $ | 2,852 | $ | 22,565 | ||||||||||||
Taxable investment securities and other | 655 | 1,068 | 1,723 | 3,972 | (148 | ) | 3,824 | |||||||||||||||||
Tax-exempt investment securities | (657 | ) | (249 | ) | (906 | ) | 404 | (84 | ) | 320 | ||||||||||||||
Federal funds sold | (85 | ) | 764 | 679 | (96 | ) | 407 | 311 | ||||||||||||||||
Total interest income | 11,333 | 10,964 | 22,297 | 23,993 | 3,027 | 27,020 | ||||||||||||||||||
INTEREST EXPENSE | ||||||||||||||||||||||||
Savings deposits | 2 | 15 | 17 | 1 | (38 | ) | (37 | ) | ||||||||||||||||
Interest-bearing transaction accounts | 279 | 8,246 | 8,525 | 1,334 | 2,694 | 4,028 | ||||||||||||||||||
Time deposits | 1,782 | 3,696 | 5,478 | 1,040 | 1,057 | 2,097 | ||||||||||||||||||
Borrowings | (377 | ) | 953 | 576 | (555 | ) | 1,786 | 1,231 | ||||||||||||||||
Total interest expense | 1,686 | 12,910 | 14,596 | 1,820 | 5,499 | 7,319 | ||||||||||||||||||
NET INTEREST INCOME | $ | 9,647 | $ | (1,946 | ) | $ | 7,701 | $ | 22,173 | $ | (2,472 | ) | $ | 19,701 |
2018 | 2017 | 2016 | |||||||||||||||||||||||||||||||
Average Balance | Interest Income/ Expense | Average Rates Earned/ Paid | Average Balance | Interest Income/ Expense | Average Rates Earned/ Paid | Average Balance | Interest Income/ Expense | Average Rates Earned/ Paid | |||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||
ASSETS | |||||||||||||||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||||||||||||||
Loans and leases (1) | $ | 4,283,401 | $ | 193,143 | 4.51 | % | $ | 4,024,257 | $ | 172,342 | 4.28 | % | $ | 3,562,882 | $ | 149,777 | 4.20 | % | |||||||||||||||
Taxable investment securities and other | 736,241 | 16,710 | 2.27 | % | 706,167 | 14,987 | 2.12 | % | 518,905 | 11,163 | 2.15 | % | |||||||||||||||||||||
Tax-exempt securities | 80,456 | 2,163 | 2.69 | % | 104,267 | 3,069 | 2.94 | % | 90,431 | 2,749 | 3.04 | % | |||||||||||||||||||||
Federal funds sold (2) | 82,096 | 1,559 | 1.90 | % | 92,295 | 880 | 0.95 | % | 123,166 | 569 | 0.46 | % | |||||||||||||||||||||
Total interest-earning assets | 5,182,194 | 213,575 | 4.12 | % | 4,926,986 | 191,278 | 3.88 | % | 4,295,384 | 164,258 | 3.82 | % | |||||||||||||||||||||
Noninterest-earning assets: | |||||||||||||||||||||||||||||||||
Allowance for loan and lease losses | (36,804 | ) | (33,148 | ) | (31,190 | ) | |||||||||||||||||||||||||||
Other assets | 383,524 | 373,723 | 355,622 | ||||||||||||||||||||||||||||||
TOTAL ASSETS | $ | 5,528,914 | $ | 5,267,561 | $ | 4,619,816 | |||||||||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS EQUITY | |||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||
Savings accounts | $ | 489,742 | $ | 293 | 0.06 | % | $ | 486,821 | $ | 276 | 0.06 | % | $ | 485,004 | $ | 313 | 0.06 | % | |||||||||||||||
Interest-bearing transaction accounts | 2,301,065 | 18,711 | 0.81 | % | 2,241,259 | 10,186 | 0.45 | % | 1,880,391 | 6,158 | 0.33 | % | |||||||||||||||||||||
Time deposits | 778,180 | 11,616 | 1.49 | % | 623,257 | 6,138 | 0.98 | % | 506,487 | 4,041 | 0.80 | % | |||||||||||||||||||||
Borrowings | 340,414 | 8,942 | 2.63 | % | 357,978 | 8,366 | 2.34 | % | 393,149 | 7,135 | 1.81 | % | |||||||||||||||||||||
Total interest-bearing liabilities | 3,909,401 | 39,562 | 1.01 | % | 3,709,315 | 24,966 | 0.67 | % | 3,265,031 | 17,647 | 0.54 | % | |||||||||||||||||||||
Noninterest-bearing liabilities: | |||||||||||||||||||||||||||||||||
Demand deposits | 984,445 | 959,298 | 852,629 | ||||||||||||||||||||||||||||||
Other liabilities | 36,541 | 30,268 | 27,616 | ||||||||||||||||||||||||||||||
Stockholders’ equity | 598,527 | 568,680 | 474,540 | ||||||||||||||||||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 5,528,914 | $ | 5,267,561 | $ | 4,619,816 | |||||||||||||||||||||||||||
Net interest income/spread | 174,013 | 3.11 | % | 166,312 | 3.21 | % | 146,611 | 3.28 | % | ||||||||||||||||||||||||
Tax equivalent basis adjustment | 454 | 1,074 | 962 | ||||||||||||||||||||||||||||||
NET INTEREST INCOME | $ | 173,559 | $ | 165,238 | $ | 145,649 | |||||||||||||||||||||||||||
Net interest margin (3) | 3.36 | % | 3.38 | % | 3.41 | % |
(1) | Includes non-accrual loans, the effect of which is to reduce the yield earned on loans, loans held for sale, and deferred loan fees. |
(2) | Includes interest-bearing cash accounts. |
(3) | Net interest income on a tax equivalent basis divided by interest-earning assets. |
For the Year Ended December 31, | ||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Calculation of Efficiency Ratio (a Non-GAAP Measure) | ||||||||||||||||||||
Total noninterest expense | $ | 111,167 | $ | 104,534 | $ | 99,917 | $ | 87,211 | $ | 79,135 | ||||||||||
Less: | ||||||||||||||||||||
Amortization of core deposit intangibles | (594 | ) | (654 | ) | (734 | ) | (415 | ) | (464 | ) | ||||||||||
Merger related expenses | (464 | ) | — | (4,103 | ) | (1,152 | ) | — | ||||||||||||
Long-term debt prepayment fee | — | (2,828 | ) | — | (2,407 | ) | — | |||||||||||||
Noninterest expense, as adjusted | $ | 110,109 | $ | 101,052 | $ | 95,080 | $ | 83,237 | $ | 78,671 | ||||||||||
Net interest income | $ | 173,559 | $ | 165,238 | $ | 145,649 | $ | 116,640 | $ | 113,566 | ||||||||||
Noninterest income | 22,310 | 25,435 | 21,330 | 21,161 | 17,722 | |||||||||||||||
Total revenue | 195,869 | 190,673 | 166,979 | 137,801 | 131,288 | |||||||||||||||
Plus: Tax-equivalent adjustment on municipal securities | 454 | 1,074 | 962 | 857 | 972 | |||||||||||||||
Less: Gains on sales of investment securities and debt extinguishment | — | (2,524 | ) | (370 | ) | (2,071 | ) | (2 | ) | |||||||||||
Total revenue, as adjusted | $ | 196,323 | $ | 189,223 | $ | 167,571 | $ | 136,587 | $ | 132,258 | ||||||||||
Efficiency ratio (Non-GAAP) | 56.09 | % | 53.40 | % | 56.74 | % | 60.94 | % | 59.48 | % |
December 31, | ||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Commercial, secured by real estate | $ | 3,057,779 | $ | 2,831,184 | $ | 2,556,601 | $ | 1,761,589 | $ | 1,529,761 | ||||||||||
Commercial, industrial and other | 336,735 | 340,400 | 350,228 | 307,044 | 238,252 | |||||||||||||||
Leases | 87,925 | 75,039 | 67,016 | 56,660 | 54,749 | |||||||||||||||
Real estate - residential mortgage | 329,854 | 322,880 | 349,581 | 389,692 | 431,190 | |||||||||||||||
Real estate - construction | 319,545 | 264,908 | 211,109 | 118,070 | 64,020 | |||||||||||||||
Home equity and consumer | 328,609 | 322,269 | 339,360 | 334,891 | 337,642 | |||||||||||||||
Total loans and leases | 4,460,447 | 4,156,680 | 3,873,895 | 2,967,946 | 2,655,614 | |||||||||||||||
Deferred fees | (3,714 | ) | (3,960 | ) | (3,297 | ) | (2,746 | ) | (1,788 | ) | ||||||||||
Loans and leases, net | $ | 4,456,733 | $ | 4,152,720 | $ | 3,870,598 | $ | 2,965,200 | $ | 2,653,826 |
Within One Year | After One but Within Five Years | After Five Years | Total | |||||||||||||
(in thousands) | ||||||||||||||||
Commercial, secured by real estate | $ | 217,243 | $ | 590,110 | $ | 2,250,426 | $ | 3,057,779 | ||||||||
Commercial, industrial and other | 170,774 | 87,101 | 78,860 | 336,735 | ||||||||||||
Real estate - construction | 117,996 | 86,573 | 114,976 | 319,545 | ||||||||||||
Total | $ | 506,013 | $ | 763,784 | $ | 2,444,262 | $ | 3,714,059 | ||||||||
Predetermined rates | $ | 91,403 | $ | 572,698 | $ | 284,681 | $ | 948,782 | ||||||||
Floating or adjustable rates | 414,610 | 191,086 | 2,159,581 | 2,765,277 | ||||||||||||
Total | $ | 506,013 | $ | 763,784 | $ | 2,444,262 | $ | 3,714,059 |
December 31, | ||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Commercial, secured by real estate | $ | 7,192 | $ | 5,890 | $ | 10,413 | $ | 10,446 | $ | 7,424 | ||||||||||
Commercial, industrial and other | 1,019 | 184 | 167 | 103 | 308 | |||||||||||||||
Leases | 501 | 144 | 153 | 316 | 88 | |||||||||||||||
Real estate - residential mortgage | 1,986 | 3,860 | 6,048 | 8,664 | 9,246 | |||||||||||||||
Real estate - construction | — | 1,472 | 1,472 | — | 188 | |||||||||||||||
Home equity and consumer | 1,432 | 2,105 | 2,151 | 3,167 | 3,415 | |||||||||||||||
Total non-accrual loans and leases | 12,130 | 13,655 | 20,404 | 22,696 | 20,669 | |||||||||||||||
Other real estate and other repossessed assets | 830 | 843 | 1,072 | 983 | 1,026 | |||||||||||||||
Total non-performing assets | $ | 12,960 | $ | 14,498 | $ | 21,476 | $ | 23,679 | $ | 21,695 | ||||||||||
Non-performing assets as a percentage of total assets | 0.22 | % | 0.27 | % | 0.42 | % | 0.61 | % | 0.61 | % | ||||||||||
Loans and leases past due 90 days or more and still accruing | $ | — | $ | 200 | $ | 10 | $ | 331 | $ | 66 | ||||||||||
Troubled debt restructurings, still accruing | $ | 9,293 | $ | 11,462 | $ | 8,802 | $ | 10,108 | $ | 10,579 |
Years Ended December 31, | ||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Allowance balance, beginning of the year | $ | 35,455 | $ | 31,245 | $ | 30,874 | $ | 30,684 | $ | 29,821 | ||||||||||
Loans and leases charged off: | ||||||||||||||||||||
Commercial, secured by real estate | (421 | ) | (762 | ) | (410 | ) | (1,821 | ) | (2,282 | ) | ||||||||||
Commercial, industrial and other | (1,452 | ) | (477 | ) | (796 | ) | (205 | ) | (999 | ) | ||||||||||
Leases | (507 | ) | (305 | ) | (366 | ) | (548 | ) | (597 | ) | ||||||||||
Real estate - residential mortgage | (131 | ) | (441 | ) | (1,103 | ) | (375 | ) | (827 | ) | ||||||||||
Real estate - construction | (248 | ) | (609 | ) | — | (20 | ) | (25 | ) | |||||||||||
Home equity and consumer | (588 | ) | (852 | ) | (1,980 | ) | (1,511 | ) | (2,697 | ) | ||||||||||
Total loans and leases charged off | (3,347 | ) | (3,446 | ) | (4,655 | ) | (4,480 | ) | (7,427 | ) | ||||||||||
Recoveries: | ||||||||||||||||||||
Commercial, secured by real estate | 468 | 396 | 297 | 2,221 | 999 | |||||||||||||||
Commercial, industrial and other | 317 | 172 | 202 | 183 | 1,039 | |||||||||||||||
Leases | 23 | 59 | 31 | 26 | 19 | |||||||||||||||
Real estate - residential mortgage | 10 | 5 | 8 | 63 | 42 | |||||||||||||||
Real estate - construction | 17 | 31 | 18 | 106 | 106 | |||||||||||||||
Home equity and consumer | 332 | 903 | 247 | 129 | 220 | |||||||||||||||
Total recoveries | 1,167 | 1,566 | 803 | 2,728 | 2,425 | |||||||||||||||
Net charge-offs | (2,180 | ) | (1,880 | ) | (3,852 | ) | (1,752 | ) | (5,002 | ) | ||||||||||
Provision for loan and lease losses | 4,413 | 6,090 | 4,223 | 1,942 | 5,865 | |||||||||||||||
Allowance balance, end of year | $ | 37,688 | $ | 35,455 | $ | 31,245 | $ | 30,874 | $ | 30,684 | ||||||||||
Net charge-offs as a percentage of average loans and leases outstanding | 0.05 | % | 0.05 | % | 0.11 | % | 0.06 | % | 0.19 | % | ||||||||||
Allowance as a percentage of year-end total loans and leases outstanding | 0.84 | % | 0.85 | % | 0.81 | % | 1.04 | % | 1.16 | % | ||||||||||
Allowance as a percent of non-accrual loans and leases | 310.70 | % | 259.65 | % | 153.13 | % | 136.03 | % | 148.45 | % |
December 31, | |||||||||||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||||||||||||||
Allowance | % of Loans in Each Category | Allowance | % of Loans in Each Category | Allowance | % of Loans in Each Category | Allowance | % of Loans in Each Category | Allowance | % of Loans in Each Category | ||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||||
Commercial, secured by real estate | $ | 27,881 | 68.5 | % | $ | 25,704 | 68.0 | % | $ | 21,223 | 66.1 | % | $ | 20,223 | 59.4 | % | $ | 13,577 | 57.6 | % | |||||||||||||||
Commercial, industrial and other | 1,742 | 7.5 | % | 2,313 | 8.2 | % | 1,723 | 9.0 | % | 2,637 | 10.3 | % | 3,196 | 9.0 | % | ||||||||||||||||||||
Leases | 987 | 2.0 | % | 630 | 1.8 | % | 548 | 1.7 | % | 460 | 1.9 | % | 582 | 2.1 | % | ||||||||||||||||||||
Real estate - residential mortgage | 1,566 | 7.4 | % | 1,557 | 7.8 | % | 1,964 | 9.0 | % | 2,588 | 13.1 | % | 4,020 | 16.2 | % | ||||||||||||||||||||
Real estate - construction | 3,015 | 7.2 | % | 2,731 | 6.4 | % | 2,352 | 5.4 | % | 1,591 | 4.0 | % | 553 | 2.4 | % | ||||||||||||||||||||
Home equity and consumer | 2,497 | 7.4 | % | 2,520 | 7.8 | % | 3,435 | 8.8 | % | 3,375 | 11.3 | % | 6,333 | 12.7 | % | ||||||||||||||||||||
Unallocated | — | — | — | — | 2,423 | ||||||||||||||||||||||||||||||
$ | 37,688 | 100.0 | % | $ | 35,455 | 100.0 | % | $ | 31,245 | 100.0 | % | $ | 30,874 | 100.0 | % | $ | 30,684 | 100.0 | % |
December 31, | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
(in thousands) | ||||||||||||
U.S. Treasury and U.S. government agencies | $ | 173,952 | $ | 180,670 | $ | 150,912 | ||||||
Mortgage-backed securities, residential | 502,003 | 469,245 | 442,244 | |||||||||
Mortgage-backed securities, multifamily | 22,803 | 12,034 | 12,246 | |||||||||
Obligations of states and political subdivisions | 83,414 | 94,638 | 119,610 | |||||||||
Equity securities | 15,921 | 18,089 | 21,882 | |||||||||
Debt securities | 10,092 | 11,144 | 7,424 | |||||||||
$ | 808,185 | $ | 785,820 | $ | 754,318 |
Available for Sale | Within One Year | Over One but Within Five Years | Over Five but Within Ten Years | After Ten Years | Total | |||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
U.S. Treasury and U.S. government agencies | ||||||||||||||||||||
Amount | $ | 27,823 | $ | 79,876 | $ | 15,613 | $ | 17,615 | $ | 140,927 | ||||||||||
Yield | 1.37 | % | 1.83 | % | 2.41 | % | 2.68 | % | 1.91 | % | ||||||||||
Mortgage-backed securities, residential | ||||||||||||||||||||
Amount | — | 7,293 | 68,910 | 349,941 | 426,144 | |||||||||||||||
Yield | — | % | 2.16 | % | 2.19 | % | 2.57 | % | 2.50 | % | ||||||||||
Mortgage-backed securities, multifamily | ||||||||||||||||||||
Amount | 4,964 | 4,927 | 9,081 | 1,978 | 20,950 | |||||||||||||||
Yield | 1.73 | % | 2.43 | % | 3.10 | % | 3.46 | % | 2.64 | % | ||||||||||
Obligations of states and political subdivisions | ||||||||||||||||||||
Amount | 2,791 | 22,878 | 19,403 | 433 | 45,505 | |||||||||||||||
Yield | 3.33 | % | 2.53 | % | 2.46 | % | 2.93 | % | 2.55 | % | ||||||||||
Debt securities | ||||||||||||||||||||
Amount | — | — | 5,092 | — | 5,092 | |||||||||||||||
Yield | — | % | — | % | 5.82 | % | — | % | 5.82 | % | ||||||||||
Total securities | ||||||||||||||||||||
Amount | $ | 35,578 | $ | 114,974 | $ | 118,099 | $ | 369,967 | $ | 638,618 | ||||||||||
Yield | 1.72 | % | 2.01 | % | 2.49 | % | 2.58 | % | 2.40 | % |
Held to Maturity | Within One Year | Over One but Within Five Years | Over Five but Within Ten Years | After Ten Years | Total | |||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
U.S. Treasury and U.S. government agencies | ||||||||||||||||||||
Amount | $ | — | $ | 21,252 | $ | 11,773 | $ | — | $ | 33,025 | ||||||||||
Yield | — | % | 2.03 | % | 2.28 | % | — | % | 2.12 | % | ||||||||||
Mortgage-backed securities, residential | ||||||||||||||||||||
Amount | — | 1 | 2,345 | 73,513 | 75,859 | |||||||||||||||
Yield | — | % | 5.83 | % | 2.37 | % | 2.87 | % | 2.85 | % | ||||||||||
Mortgage-backed securities, multifamily | ||||||||||||||||||||
Amount | — | 1,058 | 795 | — | 1,853 | |||||||||||||||
Yield | — | % | 0.20 | % | 2.37 | % | — | % | 1.13 | % | ||||||||||
Obligations of states and political subdivisions | ||||||||||||||||||||
Amount | 7,061 | 20,851 | 6,979 | 3,018 | 37,909 | |||||||||||||||
Yield | 2.92 | % | 2.55 | % | 2.87 | % | 2.78 | % | 2.69 | % | ||||||||||
Debt securities | ||||||||||||||||||||
Amount | — | — | 5,000 | — | 5,000 | |||||||||||||||
Yield | — | % | — | % | 5.05 | % | — | % | 5.05 | % | ||||||||||
Total securities | ||||||||||||||||||||
Amount | $ | 7,061 | $ | 43,162 | $ | 26,892 | $ | 76,531 | $ | 153,646 | ||||||||||
Yield | 2.92 | % | 2.23 | % | 2.96 | % | 2.87 | % | 2.71 | % |
Year Ended December 31, | |||||||||||||||||||||
2018 | 2017 | 2016 | |||||||||||||||||||
Average Balance | Average Rate | Average Balance | Average Rate | Average Balance | Average Rate | ||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||
Noninterest-bearing demand deposits | $ | 984,445 | — | % | $ | 959,298 | — | % | $ | 852,629 | — | % | |||||||||
Interest-bearing transaction accounts | 2,301,065 | 0.81 | % | 2,241,259 | 0.45 | % | 1,880,391 | 0.33 | % | ||||||||||||
Savings | 489,742 | 0.06 | % | 486,821 | 0.06 | % | 485,004 | 0.06 | % | ||||||||||||
Time deposits | 778,180 | 1.49 | % | 623,257 | 0.98 | % | 506,487 | 0.80 | % | ||||||||||||
Total | $ | 4,553,432 | 0.67 | % | $ | 4,310,635 | 0.38 | % | $ | 3,724,511 | 0.28 | % |
Maturity | |||
Within 3 months | $ | 45,961 | |
Over 3 through 6 months | 45,557 | ||
Over 6 through 12 months | 60,574 | ||
Over 12 months | 15,209 | ||
Total | $ | 167,301 | |
• | Net income. Cash provided by operating activities was $79.4 million in 2018 compared to $67.5 million and $50.1 million in 2017 and 2016, respectively. |
• | Deposits. Lakeland can offer new products or change its rate structure in order to increase deposits. In 2018, Lakeland generated $251.9 million in deposit growth, compared to $275.9 million in 2017. |
• | Sales of securities and overnight funds. At year-end 2018, the Company had $638.6 million in securities designated “available for sale.” Of these securities, $421.2 million was pledged to secure public deposits and for other purposes required by applicable laws and regulations. |
• | Repayments on loans and leases can also be a source of liquidity to fund further loan growth. |
• | Overnight credit lines. As a member of the Federal Home Loan Bank of New York (“FHLB”), Lakeland has the ability to borrow overnight based on the market value of collateral pledged. Lakeland had no overnight borrowings from the FHLB on December 31, 2018. Lakeland also has overnight federal funds lines available for it to borrow up to $210.0 million. Lakeland had borrowings against these lines of $192.1 million at December 31, 2018. Lakeland also has the ability to utilize a line of credit from the FHLB to secure a portion of its public deposits. Lakeland may also borrow from the discount window of the Federal Reserve Bank of New York based on the market value of collateral pledged. Lakeland had no borrowings with the Federal Reserve Bank of New York as of December 31, 2018. |
• | Other borrowings. Lakeland can also generate funds by utilizing long-term debt or securities sold under agreements to repurchase that would be collateralized by security or mortgage collateral. At times the market values of securities collateralizing our securities sold under agreements to repurchase may decline due to changes in interest rates and may necessitate our lenders to issue a “margin call” which requires the Company to pledge additional collateral to meet that margin call. For more information regarding the Company’s borrowings, see Note 8 to the Consolidated Financial Statements. |
Payment Due Period | ||||||||||||||||||||
Total | Within One Year | After One but Within Three Years | After Three but Within Five Years | After Five Years | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Minimum annual rentals or noncancellable operating leases | $ | 28,559 | $ | 3,191 | $ | 5,921 | $ | 4,805 | $ | 14,642 | ||||||||||
Benefit plan commitments | 5,658 | 307 | 793 | 818 | 3,740 | |||||||||||||||
Remaining contractual maturities of time deposits | 757,038 | 568,350 | 144,579 | 44,109 | — | |||||||||||||||
Subordinated debentures | 105,027 | — | — | — | 105,027 | |||||||||||||||
Loan commitments and lines of credit | 973,709 | 667,925 | 135,444 | 19,118 | 151,222 | |||||||||||||||
Other borrowings | 181,118 | 40,264 | 100,851 | 40,003 | — | |||||||||||||||
Interest on other borrowings (1) | 65,110 | 8,996 | 15,722 | 12,334 | 28,058 | |||||||||||||||
Standby letters of credit | 21,585 | 21,061 | 444 | — | 80 | |||||||||||||||
Total | $ | 2,137,804 | $ | 1,310,094 | $ | 403,754 | $ | 121,187 | $ | 302,769 |
(1) | Includes interest on other borrowings and subordinated debentures at a weighted rate of 3.26%. |
Changes in Interest Rates | ||||||
Rate Ramp | +200 bp | -200 bp | ||||
Asset/Liability Policy limit | (5.0 | )% | (5.0 | )% | ||
December 31, 2018 | (1.5 | )% | (0.7 | )% | ||
December 31, 2017 | (1.1 | )% | (3.6 | )% |
Changes in Interest Rates | |||||||||||||||
Rate Shock | +300 bp | +200 bp | +100 bp | -100 bp | -200 bp | ||||||||||
Asset/Liability Policy limit | (15.0 | )% | (10.0 | )% | (5.0 | )% | (5.0 | )% | (10.0 | )% | |||||
December 31, 2018 | 0.6 | % | 0.4 | % | 0.3 | % | (2.5 | )% | (8.0 | )% | |||||
December 31, 2017 | 0.3 | % | 0.3 | % | 0.3 | % | (5.9 | )% | (10.3 | )% |
Changes in Interest Rates | |||||||||||||||
Rate Shock | +300 bp | +200 bp | +100 bp | -100 bp | -200 bp | ||||||||||
Asset/Liability Policy limit | (25.0 | )% | (20.0 | )% | (10.0 | )% | (10.0 | )% | (20.0 | )% | |||||
December 31, 2018 | (5.2 | )% | (3.3 | )% | (1.4 | )% | (0.2 | )% | (1.5 | )% | |||||
December 31, 2017 | (5.0 | )% | (3.3 | )% | (1.4 | )% | (0.4 | )% | (2.6 | )% |
Tier 1 Capital to Total Average Assets Ratio December 31, | Common Equity Tier 1 to Risk-Weighted Assets Ratio December 31, | Tier 1 Capital to Risk-Weighted Assets Ratio December 31, | Total Capital to Risk-Weighted Assets Ratio December 31, | |||||||||||||||||||||
Capital Ratios | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||
Company | 9.39 | % | 9.12 | % | 10.62 | % | 10.18 | % | 11.27 | % | 10.87 | % | 13.71 | % | 13.40 | % | ||||||||
Lakeland | 10.17 | % | 10.06 | % | 12.20 | % | 12.00 | % | 12.20 | % | 12.00 | % | 13.06 | % | 12.86 | % | ||||||||
Required capital ratios including conservation buffer | 4.00 | % | 4.00 | % | 6.375 | % | 5.75 | % | 7.875 | % | 7.25 | % | 9.875 | % | 9.25 | % | ||||||||
“Well capitalized” institution under FDIC regulations | 5.00 | % | 5.00 | % | 6.50 | % | 6.50 | % | 8.00 | % | 8.00 | % | 10.00 | % | 10.00 | % |
Calculation of Tangible Book Value Per Common Share | December 31, | |||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Total common stockholders’ equity at end of period - GAAP | $ | 623,739 | $ | 583,122 | $ | 550,044 | $ | 400,516 | $ | 379,438 | ||||||||||
Less: | ||||||||||||||||||||
Goodwill | 136,433 | 136,433 | 135,747 | 109,974 | 109,974 | |||||||||||||||
Other identifiable intangible assets, net | 1,768 | 2,362 | 3,344 | 1,545 | 1,960 | |||||||||||||||
Total tangible common stockholders’ equity at end of period - Non-GAAP | $ | 485,538 | $ | 444,327 | $ | 410,953 | $ | 288,997 | $ | 267,504 | ||||||||||
Shares outstanding at end of period (1) | 47,486 | 47,354 | 47,223 | 37,906 | 37,911 | |||||||||||||||
Book value per share - GAAP (1) | $ | 13.14 | $ | 12.31 | $ | 11.65 | $ | 10.57 | $ | 10.01 | ||||||||||
Tangible book value per share - Non-GAAP (1) | $ | 10.22 | $ | 9.38 | $ | 8.70 | $ | 7.62 | $ | 7.06 |
(1) | Adjusted for 5% stock dividends in 2014. |
Calculation of Tangible Common Equity to Tangible Assets | December 31, | |||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Total tangible common stockholders’ equity at end of period - Non-GAAP | $ | 485,538 | $ | 444,327 | $ | 410,953 | $ | 288,997 | $ | 267,504 | ||||||||||
Total assets at end of period - GAAP | $ | 5,806,093 | $ | 5,405,639 | $ | 5,093,131 | $ | 3,869,550 | $ | 3,538,325 | ||||||||||
Less: | ||||||||||||||||||||
Goodwill | 136,433 | 136,433 | 135,747 | 109,974 | 109,974 | |||||||||||||||
Other identifiable intangible assets, net | 1,768 | 2,362 | 3,344 | 1,545 | 1,960 | |||||||||||||||
Total tangible assets at end of period - Non-GAAP | $ | 5,667,892 | $ | 5,266,844 | $ | 4,954,040 | $ | 3,758,031 | $ | 3,426,391 | ||||||||||
Common equity to assets - GAAP | 10.74 | % | 10.79 | % | 10.80 | % | 10.35 | % | 10.72 | % | ||||||||||
Tangible common equity to tangible assets - Non-GAAP | 8.57 | % | 8.44 | % | 8.30 | % | 7.69 | % | 7.81 | % | ||||||||||
Calculation of Return on Average Tangible Common Equity | For the Years Ended December 31, | |||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Net income - GAAP | $ | 63,401 | $ | 52,580 | $ | 41,518 | $ | 32,481 | $ | 31,129 | ||||||||||
Total average common stockholders’ equity - GAAP | $ | 598,527 | $ | 568,680 | $ | 474,540 | $ | 392,221 | $ | 367,210 | ||||||||||
Less: | ||||||||||||||||||||
Average goodwill | 136,433 | 136,095 | 130,689 | 109,974 | 109,974 | |||||||||||||||
Average other identifiable intangible assets, net | 2,064 | 2,847 | 3,225 | 1,759 | 2,200 | |||||||||||||||
Total average tangible common stockholders’ equity - Non-GAAP | $ | 460,030 | $ | 429,738 | $ | 340,626 | $ | 280,488 | $ | 255,036 | ||||||||||
Return on average common stockholders’ equity - GAAP | 10.59 | % | 9.25 | % | 8.75 | % | 8.28 | % | 8.48 | % | ||||||||||
Return on average tangible common stockholders’ equity - Non-GAAP | 13.78 | % | 12.24 | % | 12.19 | % | 11.58 | % | 12.21 | % |
Quarter Ended | ||||||||||||||||
March 31, 2018 | June 30, 2018 | September 30, 2018 | December 31, 2018 | |||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||
Total interest income | $ | 50,145 | $ | 52,260 | $ | 54,282 | $ | 56,434 | ||||||||
Total interest expense | 7,909 | 8,767 | 10,658 | 12,228 | ||||||||||||
Net interest income | 42,236 | 43,493 | 43,624 | 44,206 | ||||||||||||
Provision for loan and lease losses | 1,284 | 1,492 | 1,046 | 591 | ||||||||||||
Noninterest income (excluding investment securities gains) | 5,334 | 5,709 | 5,639 | 5,628 | ||||||||||||
Merger related expenses | — | — | — | 464 | ||||||||||||
Core deposit intangible amortization | 157 | 153 | 142 | 142 | ||||||||||||
Noninterest expense | 26,980 | 27,421 | 27,651 | 28,057 | ||||||||||||
Income before taxes | 19,149 | 20,136 | 20,424 | 20,580 | ||||||||||||
Income taxes | 3,894 | 4,298 | 3,666 | 5,030 | ||||||||||||
Net income | $ | 15,255 | $ | 15,838 | $ | 16,758 | $ | 15,550 | ||||||||
Earnings per share of common stock | ||||||||||||||||
Basic | $ | 0.32 | $ | 0.33 | $ | 0.35 | $ | 0.32 | ||||||||
Diluted | $ | 0.32 | $ | 0.33 | $ | 0.35 | $ | 0.32 |
Quarter Ended | ||||||||||||||||
March 31, 2017 | June 30, 2017 | September 30, 2017 | December 31, 2017 | |||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||
Total interest income | $ | 44,796 | $ | 47,212 | $ | 48,735 | $ | 49,461 | ||||||||
Total interest expense | 5,473 | 5,791 | 6,620 | 7,082 | ||||||||||||
Net interest income | 39,323 | 41,421 | 42,115 | 42,379 | ||||||||||||
Provision for loan and lease losses | 1,218 | 1,827 | 1,827 | 1,218 | ||||||||||||
Noninterest income (excluding investment securities gains) | 5,555 | 6,126 | 5,454 | 5,776 | ||||||||||||
Gains on investment securities, net | 2,539 | (15 | ) | — | — | |||||||||||
Long-term debt prepayment fee | 2,828 | — | — | — | ||||||||||||
Core deposit intangible amortization | 195 | 190 | 104 | 165 | ||||||||||||
Noninterest expense | 25,447 | 25,176 | 24,745 | 25,684 | ||||||||||||
Income before taxes | 17,729 | 20,339 | 20,893 | 21,088 | ||||||||||||
Income taxes | 5,417 | 6,969 | 7,170 | 7,913 | ||||||||||||
Net income | $ | 12,312 | $ | 13,370 | $ | 13,723 | $ | 13,175 | ||||||||
Earnings per share of common stock | ||||||||||||||||
Basic | $ | 0.26 | $ | 0.28 | $ | 0.29 | $ | 0.28 | ||||||||
Diluted | $ | 0.26 | $ | 0.28 | $ | 0.29 | $ | 0.27 |
December 31, | ||||||||
2018 | 2017 | |||||||
(dollars in thousands) | ||||||||
ASSETS | ||||||||
Cash | $ | 205,199 | $ | 114,138 | ||||
Interest-bearing deposits due from banks | 3,400 | 28,795 | ||||||
Total cash and cash equivalents | 208,599 | 142,933 | ||||||
Investment securities, available for sale, at fair value | 638,618 | 628,046 | ||||||
Equity securities, at fair value | 15,921 | 18,089 | ||||||
Investment securities, held to maturity, at amortized cost with fair value of $150,932 at December 31, 2018 and $138,688 at December 31, 2017 | 153,646 | 139,685 | ||||||
Federal Home Loan Bank and other membership stock, at cost | 13,301 | 12,576 | ||||||
Loans and leases, net of deferred fees | 4,456,733 | 4,152,720 | ||||||
Less: allowance for loan and lease losses | 37,688 | 35,455 | ||||||
Net loans | 4,419,045 | 4,117,265 | ||||||
Loans held for sale | 1,113 | 456 | ||||||
Premises and equipment, net | 49,175 | 50,313 | ||||||
Accrued interest receivable | 16,114 | 14,416 | ||||||
Goodwill | 136,433 | 136,433 | ||||||
Other identifiable intangible assets | 1,768 | 2,362 | ||||||
Bank owned life insurance | 110,052 | 107,489 | ||||||
Other assets | 42,308 | 35,576 | ||||||
TOTAL ASSETS | $ | 5,806,093 | $ | 5,405,639 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
LIABILITIES: | ||||||||
Deposits: | ||||||||
Noninterest-bearing | $ | 950,218 | $ | 967,335 | ||||
Savings and interest-bearing transaction accounts | 2,913,414 | 2,663,985 | ||||||
Time deposits $250 thousand and under | 589,737 | 556,863 | ||||||
Time deposits over $250 thousand | 167,301 | 180,565 | ||||||
Total deposits | 4,620,670 | 4,368,748 | ||||||
Federal funds purchased and securities sold under agreements to repurchase | 233,905 | 124,936 | ||||||
Other borrowings | 181,118 | 192,011 | ||||||
Subordinated debentures | 105,027 | 104,902 | ||||||
Other liabilities | 41,634 | 31,920 | ||||||
TOTAL LIABILITIES | 5,182,354 | 4,822,517 | ||||||
STOCKHOLDERS’ EQUITY: | ||||||||
Common stock, no par value; authorized 100,000,000 shares; issued shares, 47,486,250 at December 31, 2018 and authorized 70,000,000 shares; issued shares 47,353,864 at December 31, 2017 | 514,703 | 512,734 | ||||||
Retained earnings | 116,874 | 72,737 | ||||||
Accumulated other comprehensive loss | (7,838 | ) | (2,349 | ) | ||||
TOTAL STOCKHOLDERS’ EQUITY | 623,739 | 583,122 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 5,806,093 | $ | 5,405,639 |
Years Ended December 31, | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
(in thousands, except per share data) | ||||||||||||
INTEREST INCOME | ||||||||||||
Loans, leases and fees | $ | 193,143 | $ | 172,342 | $ | 149,777 | ||||||
Federal funds sold and interest-bearing deposits with banks | 1,559 | 880 | 569 | |||||||||
Taxable investment securities and other | 16,710 | 14,987 | 11,163 | |||||||||
Tax-exempt investment securities | 1,709 | 1,995 | 1,787 | |||||||||
TOTAL INTEREST INCOME | 213,121 | 190,204 | 163,296 | |||||||||
INTEREST EXPENSE | ||||||||||||
Deposits | 30,620 | 16,600 | 10,512 | |||||||||
Federal funds purchased and securities sold under agreements to repurchase | 471 | 198 | 69 | |||||||||
Other borrowings | 8,471 | 8,168 | 7,066 | |||||||||
TOTAL INTEREST EXPENSE | 39,562 | 24,966 | 17,647 | |||||||||
NET INTEREST INCOME | 173,559 | 165,238 | 145,649 | |||||||||
Provision for loan and lease losses | 4,413 | 6,090 | 4,223 | |||||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES | 169,146 | 159,148 | 141,426 | |||||||||
NONINTEREST INCOME | ||||||||||||
Service charges on deposit accounts | 10,584 | 10,740 | 10,157 | |||||||||
Commissions and fees | 5,542 | 4,858 | 4,349 | |||||||||
Income on bank owned life insurance | 3,256 | 2,354 | 2,562 | |||||||||
Loss on equity securities | (583 | ) | — | — | ||||||||
Gains on sales of loans | 1,329 | 1,836 | 2,123 | |||||||||
Gain on sales and calls of investment securities, net | — | 2,524 | 370 | |||||||||
Other income | 2,182 | 3,123 | 1,769 | |||||||||
TOTAL NONINTEREST INCOME | 22,310 | 25,435 | 21,330 | |||||||||
NONINTEREST EXPENSE | ||||||||||||
Salaries and employee benefits | 68,595 | 61,166 | 56,107 | |||||||||
Net occupancy expense | 10,155 | 10,243 | 9,935 | |||||||||
Furniture and equipment | 8,297 | 8,269 | 8,017 | |||||||||
FDIC insurance expense | 1,608 | 1,577 | 2,248 | |||||||||
Stationery, supplies and postage | 1,625 | 1,797 | 1,727 | |||||||||
Marketing expense | 1,437 | 1,675 | 1,672 | |||||||||
Data processing expense | 3,609 | 1,993 | 1,891 | |||||||||
Telecommunications expense | 1,769 | 1,607 | 1,631 | |||||||||
ATM and debit card expense | 2,195 | 2,051 | 1,582 | |||||||||
Core deposit intangible amortization | 594 | 654 | 734 | |||||||||
Other real estate and repossessed asset expense | 158 | 181 | 116 | |||||||||
Long-term debt prepayment fee | — | 2,828 | — | |||||||||
Merger related expenses | 464 | — | 4,103 | |||||||||
Other expenses | 10,661 | 10,493 | 10,154 | |||||||||
TOTAL NONINTEREST EXPENSE | 111,167 | 104,534 | 99,917 | |||||||||
Income before provision for income taxes | 80,289 | 80,049 | 62,839 | |||||||||
Provision for income taxes | 16,888 | 27,469 | 21,321 | |||||||||
NET INCOME | $ | 63,401 | $ | 52,580 | $ | 41,518 | ||||||
PER SHARE OF COMMON STOCK: | ||||||||||||
Basic earnings | $ | 1.32 | $ | 1.10 | $ | 0.96 | ||||||
Diluted earnings | $ | 1.32 | $ | 1.09 | $ | 0.95 | ||||||
Cash dividends | $ | 0.45 | $ | 0.40 | $ | 0.37 |
For the Years Ended December 31, | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
(in thousands) | ||||||||||||
NET INCOME | $ | 63,401 | $ | 52,580 | $ | 41,518 | ||||||
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX: | ||||||||||||
Unrealized losses on securities available for sale | (3,507 | ) | (903 | ) | (1,038 | ) | ||||||
Reclassification for securities gains included in net income | — | (1,640 | ) | (233 | ) | |||||||
Unrealized gains on derivatives | 41 | 37 | 672 | |||||||||
Change in pension liability, net | 20 | (16 | ) | 42 | ||||||||
Other comprehensive loss | (3,446 | ) | (2,522 | ) | (557 | ) | ||||||
TOTAL COMPREHENSIVE INCOME | $ | 59,955 | $ | 50,058 | $ | 40,961 |
Common Stock | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income (Loss) | Total | |||||||||||||
(in thousands) | ||||||||||||||||
At January 1, 2016 | $ | 386,287 | $ | 13,079 | $ | 1,150 | $ | 400,516 | ||||||||
Net income | — | 41,518 | — | 41,518 | ||||||||||||
Other comprehensive loss, net of tax | — | — | (557 | ) | (557 | ) | ||||||||||
Stock based compensation | 1,899 | — | — | 1,899 | ||||||||||||
Issuance of stock for Pascack acquisition | 37,221 | — | — | 37,221 | ||||||||||||
Issuance of stock for Harmony acquisition | 36,654 | — | — | 36,654 | ||||||||||||
Issuance of stock | 48,678 | — | — | 48,678 | ||||||||||||
Retirement of restricted stock | (206 | ) | — | — | (206 | ) | ||||||||||
Exercise of stock options, net of excess tax benefits | 328 | — | — | 328 | ||||||||||||
Cash dividends, common stock | — | (16,007 | ) | — | (16,007 | ) | ||||||||||
At December 31, 2016 | $ | 510,861 | $ | 38,590 | $ | 593 | $ | 550,044 | ||||||||
Net income | — | 52,580 | — | 52,580 | ||||||||||||
Other comprehensive loss, net of tax | — | — | (2,522 | ) | (2,522 | ) | ||||||||||
Adjustment related to implementation of ASU 2018-02 | — | 420 | (420 | ) | — | |||||||||||
Stock based compensation | 2,325 | — | — | 2,325 | ||||||||||||
Retirement of restricted stock | (773 | ) | — | — | (773 | ) | ||||||||||
Exercise of stock options | 321 | — | — | 321 | ||||||||||||
Cash dividends, common stock | — | (18,853 | ) | — | (18,853 | ) | ||||||||||
At December 31, 2017 | $ | 512,734 | $ | 72,737 | $ | (2,349 | ) | $ | 583,122 | |||||||
Cumulative adjustment for adoption of ASU 2016-01 | — | 2,043 | (2,043 | ) | — | |||||||||||
January 1, 2018, as adjusted | 512,734 | 74,780 | (4,392 | ) | 583,122 | |||||||||||
Net income | — | 63,401 | — | 63,401 | ||||||||||||
Other comprehensive loss, net of tax | — | — | (3,446 | ) | (3,446 | ) | ||||||||||
Stock based compensation | 2,425 | — | — | 2,425 | ||||||||||||
Retirement of restricted stock | (763 | ) | — | — | (763 | ) | ||||||||||
Exercise of stock options | 307 | — | — | 307 | ||||||||||||
Cash dividends, common stock | — | (21,307 | ) | — | (21,307 | ) | ||||||||||
At December 31, 2018 | $ | 514,703 | $ | 116,874 | $ | (7,838 | ) | $ | 623,739 |
Years Ended December 31, | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
(in thousands) | ||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
Net income | $ | 63,401 | $ | 52,580 | $ | 41,518 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Net amortization of premiums, discounts and deferred loan fees and costs | 4,153 | 5,153 | 4,581 | |||||||||
Depreciation and amortization | 5,555 | 4,536 | 3,961 | |||||||||
Amortization of intangible assets | 594 | 654 | 734 | |||||||||
Provision for loan and lease losses | 4,413 | 6,090 | 4,223 | |||||||||
Stock based compensation | 2,425 | 2,325 | 1,899 | |||||||||
Loans originated for sale | (49,748 | ) | (60,783 | ) | (85,365 | ) | ||||||
Proceeds from sales of loans held for sale | 50,420 | 63,905 | 86,859 | |||||||||
Gains on sales of securities | — | (2,524 | ) | (370 | ) | |||||||
Gains on sales of loans held for sale | (1,329 | ) | (1,836 | ) | (2,003 | ) | ||||||
Gains on proceeds from bank owned life insurance policies | (421 | ) | (109 | ) | (864 | ) | ||||||
Change in market value of equity securities | 583 | — | — | |||||||||
Gains on other real estate and other repossessed assets | (338 | ) | (646 | ) | (248 | ) | ||||||
Loss (gain) on sale of premises and equipment | 561 | (838 | ) | 117 | ||||||||
Long-term debt prepayment penalty | — | 2,828 | — | |||||||||
Deferred tax (benefit) expense | (13,571 | ) | 16,904 | (987 | ) | |||||||
Excess tax benefits | 318 | 587 | — | |||||||||
Decrease (increase) in other assets | 2,679 | (25,065 | ) | (5,600 | ) | |||||||
Increase in other liabilities | 9,743 | 3,705 | 1,618 | |||||||||
NET CASH PROVIDED BY OPERATING ACTIVITIES | 79,438 | 67,466 | 50,073 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||
Net cash acquired in acquisitions | — | — | 68,751 | |||||||||
Proceeds from repayments and maturities of available for sale securities | 91,833 | 91,314 | 79,425 | |||||||||
Proceeds from repayments and maturities of held to maturity securities | 26,083 | 43,218 | 28,421 | |||||||||
Proceeds from sales of equity securities | 2,155 | — | — | |||||||||
Proceeds from sales of available for sale securities | — | 4,500 | 15,654 | |||||||||
Purchase of available for sale securities | (110,370 | ) | (140,258 | ) | (244,861 | ) | ||||||
Purchase of held to maturity securities | (40,753 | ) | (35,841 | ) | (59,715 | ) | ||||||
Purchase of equity securities | (570 | ) | (307 | ) | (838 | ) | ||||||
Proceeds from redemptions of Federal Home Loan Bank stock | 6,799 | 13,497 | 3,054 | |||||||||
Purchases of Federal Home Loan Bank stock | (7,524 | ) | (10,974 | ) | (323 | ) | ||||||
Purchase of bank owned life insurance | — | (33,000 | ) | — | ||||||||
Death benefit proceeds from bank owned life insurance policy | 755 | 312 | 2,129 | |||||||||
Net increase in loans and leases | (310,256 | ) | (289,914 | ) | (334,040 | ) | ||||||
Proceeds from dispositions and sales of bank premises and equipment | 697 | 1,638 | 21 | |||||||||
Purchases of premises and equipment | (5,523 | ) | (3,972 | ) | (3,977 | ) | ||||||
Proceeds from sales of other real estate and other repossessed assets | 4,116 | 4,638 | 3,545 | |||||||||
NET CASH USED IN INVESTING ACTIVITIES | (342,558 | ) | (355,149 | ) | (442,754 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
Net increase in deposits | 252,329 | 276,537 | 515,437 | |||||||||
Increase (decrease) in federal funds purchased and securities sold under agreements to repurchase | 108,969 | 68,582 | (94,880 | ) | ||||||||
Proceeds from other borrowings | 60,003 | 306,184 | 14,921 | |||||||||
Repayments of other borrowings | (70,752 | ) | (377,183 | ) | (91,798 | ) | ||||||
Net proceeds from issuance of subordinated debt | — | — | 73,516 | |||||||||
Exercise of stock options | 307 | 321 | 285 | |||||||||
Net proceeds from issuance of common stock | — | — | 48,678 | |||||||||
Retirement of restricted stock | (763 | ) | (773 | ) | (206 | ) | ||||||
Excess tax benefits | — | — | 43 | |||||||||
Dividends paid | (21,307 | ) | (18,853 | ) | (16,007 | ) | ||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES | 328,786 | 254,815 | 449,989 | |||||||||
Net increase (decrease) in cash and cash equivalents | 65,666 | (32,868 | ) | 57,308 | ||||||||
Cash and cash equivalents, beginning of year | 142,933 | 175,801 | 118,493 | |||||||||
CASH AND CASH EQUIVALENTS, END OF YEAR | $ | 208,599 | $ | 142,933 | $ | 175,801 |
Years Ended December 31, | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
(in thousands) | ||||||||||||
Supplemental schedule of non-cash investing and financing activities: | ||||||||||||
Cash paid during the period for income taxes | $ | 18,614 | $ | 27,423 | $ | 21,744 | ||||||
Cash paid during the period for interest | 38,679 | 24,571 | 16,435 | |||||||||
Transfer of loans and leases into other repossessed assets and other real estate owned | 3,765 | 3,763 | 3,386 | |||||||||
Acquisitions of Pascack and Harmony: | ||||||||||||
Non-cash assets acquired: | ||||||||||||
Federal Home Loan Bank stock | — | — | 3,742 | |||||||||
Investment securities held for maturity | — | — | 10,810 | |||||||||
Investment securities available for sale | — | — | 7,474 | |||||||||
Loans, including loans held for sale | — | — | 579,560 | |||||||||
Goodwill and other intangible assets, net | — | — | 29,060 | |||||||||
Other assets | — | — | 32,381 | |||||||||
Total non-cash assets acquired | — | — | 663,027 | |||||||||
Liabilities assumed: | ||||||||||||
Deposits | — | — | (582,526 | ) | ||||||||
Other borrowings | — | — | (66,622 | ) | ||||||||
Other liabilities | — | — | (8,755 | ) | ||||||||
Total liabilities assumed | — | — | (657,903 | ) | ||||||||
Common stock issued for acquisitions | — | — | 73,875 |
• | The establishment of specific reserve amounts for impaired loans and leases, including PCI loans. |
• | The establishment of reserves for pools of homogeneous loans and leases not subject to specific review, including impaired loans under $500,000, leases, 1 - 4 family residential mortgages, and consumer loans. |
Year Ended December 31, 2018 | Income (Numerator) | Shares (Denominator) | Per Share Amount | ||||||||
(in thousands, except per share amounts) | |||||||||||
Basic earnings per share | |||||||||||
Net income available to common shareholders | $ | 63,401 | 47,578 | $ | 1.33 | ||||||
Less: earnings allocated to participating securities | (582 | ) | — | (0.01 | ) | ||||||
Net income available to common shareholders | $ | 62,819 | 47,578 | $ | 1.32 | ||||||
Effect of dilutive securities | |||||||||||
Stock options and restricted stock | — | 188 | — | ||||||||
Diluted earnings per share | |||||||||||
Net income available to common shareholders plus assumed conversions | $ | 62,819 | 47,766 | $ | 1.32 |
Year Ended December 31, 2017 | Income (Numerator) | Shares (Denominator) | Per Share Amount | ||||||||
(in thousands, except per share amounts) | |||||||||||
Basic earnings per share | |||||||||||
Net income available to common shareholders | $ | 52,580 | 47,438 | $ | 1.11 | ||||||
Less: earnings allocated to participating securities | (480 | ) | — | (0.01 | ) | ||||||
Net income available to common shareholders | $ | 52,100 | 47,438 | $ | 1.10 | ||||||
Effect of dilutive securities | |||||||||||
Stock options and restricted stock | — | 236 | (0.01 | ) | |||||||
Diluted earnings per share | |||||||||||
Net income available to common shareholders plus assumed conversions | $ | 52,100 | 47,674 | $ | 1.09 |
Year Ended December 31, 2016 | Income (Numerator) | Shares (Denominator) | Per Share Amount | |||||||||
(in thousands, except per share amounts) | ||||||||||||
Basic earnings per share | ||||||||||||
Net income available to common shareholders | $ | 41,518 | 42,912 | $ | 0.97 | |||||||
Less: earnings allocated to participating securities | (396 | ) | — | (0.01 | ) | |||||||
Net income available to common shareholders | $ | 41,122 | 42,912 | $ | 0.96 | |||||||
Effect of dilutive securities | ||||||||||||
Stock options and restricted stock | — | 202 | (0.01 | ) | ||||||||
Diluted earnings per share | ||||||||||||
Net income available to common shareholders plus assumed conversions | $ | 41,122 | $ | 43,114 | $ | 0.95 |
December 31, 2018 | December 31, 2017 | |||||||||||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||
AVAILABLE FOR SALE | ||||||||||||||||||||||||||||||||
U.S. Treasury and U.S. government agencies | $ | 143,495 | $ | — | $ | (2,568 | ) | $ | 140,927 | $ | 148,968 | $ | 78 | $ | (1,791 | ) | $ | 147,255 | ||||||||||||||
Mortgage-backed securities, residential | 434,208 | 779 | (8,843 | ) | 426,144 | 419,538 | 479 | (5,763 | ) | 414,254 | ||||||||||||||||||||||
Mortgage-backed securities, multifamily | 21,087 | 67 | (204 | ) | 20,950 | 10,133 | 7 | (63 | ) | 10,077 | ||||||||||||||||||||||
Obligations of states and political subdivisions | 45,951 | 140 | (586 | ) | 45,505 | 51,289 | 448 | (417 | ) | 51,320 | ||||||||||||||||||||||
Debt securities | 5,000 | 92 | — | 5,092 | 5,000 | 140 | — | 5,140 | ||||||||||||||||||||||||
$ | 649,741 | $ | 1,078 | $ | (12,201 | ) | $ | 638,618 | $ | 634,928 | $ | 1,152 | $ | (8,034 | ) | $ | 628,046 |
December 31, 2018 | December 31, 2017 | |||||||||||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||
HELD TO MATURITY | ||||||||||||||||||||||||||||||||
U.S. government agencies | $ | 33,025 | $ | — | $ | (677 | ) | $ | 32,348 | $ | 33,415 | $ | 24 | $ | (402 | ) | $ | 33,037 | ||||||||||||||
Mortgage-backed securities, residential | 75,859 | 169 | (1,838 | ) | 74,190 | 54,991 | 249 | (978 | ) | 54,262 | ||||||||||||||||||||||
Mortgage-backed securities, multifamily | 1,853 | — | (35 | ) | 1,818 | 1,957 | — | (22 | ) | 1,935 | ||||||||||||||||||||||
Obligations of states and political subdivisions | 37,909 | 113 | (328 | ) | 37,694 | 43,318 | 306 | (188 | ) | 43,436 | ||||||||||||||||||||||
Debt securities | 5,000 | — | (118 | ) | 4,882 | 6,004 | 14 | — | 6,018 | |||||||||||||||||||||||
$ | 153,646 | $ | 282 | $ | (2,996 | ) | $ | 150,932 | $ | 139,685 | $ | 593 | $ | (1,590 | ) | $ | 138,688 |
Available for Sale | Held to Maturity | |||||||||||||||
Amortized | Fair | Amortized | Fair | |||||||||||||
Cost | Value | Cost | Value | |||||||||||||
(in thousands) | ||||||||||||||||
Due in one year or less | $ | 30,766 | $ | 30,614 | $ | 7,061 | $ | 7,066 | ||||||||
Due after one year through five years | 104,519 | 102,754 | 42,103 | 41,720 | ||||||||||||
Due after five years through ten years | 40,768 | 40,108 | 23,752 | 23,185 | ||||||||||||
Due after ten years | 18,393 | 18,048 | 3,018 | 2,953 | ||||||||||||
194,446 | 191,524 | 75,934 | 74,924 | |||||||||||||
Mortgage-backed securities | 455,295 | 447,094 | 77,712 | 76,008 | ||||||||||||
Total securities | $ | 649,741 | $ | 638,618 | $ | 153,646 | $ | 150,932 |
Years Ended December 31, | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
(in thousands) | ||||||||||||
Sale proceeds | $ | — | $ | 4,500 | $ | 15,654 | ||||||
Gross gains | — | 2,539 | 370 | |||||||||
Gross losses | — | (15 | ) | — |
December 31, 2018 | Less than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Number of Securities | Fair Value | Unrealized Losses | |||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||
AVAILABLE FOR SALE | |||||||||||||||||||||||||||
U.S. Treasury and U.S. government agencies | $ | 20,588 | $ | 216 | $ | 120,338 | $ | 2,352 | 27 | $ | 140,926 | $ | 2,568 | ||||||||||||||
Mortgage-backed securities, residential | 10,119 | 58 | 316,851 | 8,785 | 139 | 326,970 | 8,843 | ||||||||||||||||||||
Mortgage-backed securities, multifamily | 1,977 | 2 | 12,911 | 202 | 4 | 14,888 | 204 | ||||||||||||||||||||
Obligations of states and political subdivisions | 1,289 | 2 | 26,522 | 584 | 50 | 27,811 | 586 | ||||||||||||||||||||
$ | 33,973 | $ | 278 | $ | 476,622 | $ | 11,923 | 220 | $ | 510,595 | $ | 12,201 | |||||||||||||||
HELD TO MATURITY | |||||||||||||||||||||||||||
U.S. government agencies | $ | — | $ | — | $ | 32,348 | $ | 677 | 6 | $ | 32,348 | $ | 677 | ||||||||||||||
Mortgage-backed securities, residential | 8,325 | 59 | 53,761 | 1,779 | 36 | 62,086 | 1,838 | ||||||||||||||||||||
Mortgage-backed securities, multifamily | — | — | 1,818 | 35 | 2 | 1,818 | 35 | ||||||||||||||||||||
Obligations of states and political subdivisions | 1,764 | 8 | 15,580 | 320 | 27 | 17,344 | 328 | ||||||||||||||||||||
Debt securities | 3,882 | 118 | — | — | 1 | 3,882 | 118 | ||||||||||||||||||||
$ | 13,971 | $ | 185 | $ | 103,507 | $ | 2,811 | 72 | $ | 117,478 | $ | 2,996 |
December 31, 2017 | Less than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Number of securities | Fair Value | Unrealized Losses | |||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||
AVAILABLE FOR SALE | |||||||||||||||||||||||||||
U.S. Treasury and U.S. government agencies | $ | 80,391 | $ | 646 | $ | 54,769 | $ | 1,145 | 27 | $ | 135,160 | $ | 1,791 | ||||||||||||||
Mortgage-backed securities, residential | 199,387 | 1,723 | 157,739 | 4,040 | 118 | 357,126 | 5,763 | ||||||||||||||||||||
Mortgage-backed securities, multifamily | — | — | 5,088 | 63 | 1 | 5,088 | 63 | ||||||||||||||||||||
Obligations of states and political subdivisions | 9,612 | 77 | 12,970 | 340 | 39 | 22,582 | 417 | ||||||||||||||||||||
$ | 289,390 | $ | 2,446 | $ | 230,566 | $ | 5,588 | 185 | $ | 519,956 | $ | 8,034 | |||||||||||||||
HELD TO MATURITY | |||||||||||||||||||||||||||
U.S. government agencies | $ | 15,371 | $ | 95 | $ | 6,720 | $ | 307 | 4 | $ | 22,091 | $ | 402 | ||||||||||||||
Mortgage-backed securities, residential | 26,090 | 426 | 19,203 | 552 | 25 | 45,293 | 978 | ||||||||||||||||||||
Mortgage-backed securities, multifamily | 1,935 | 22 | — | — | 2 | 1,935 | 22 | ||||||||||||||||||||
Obligations of states and political subdivisions | 15,353 | 56 | 6,028 | 132 | 23 | 21,381 | 188 | ||||||||||||||||||||
$ | 58,749 | $ | 599 | $ | 31,951 | $ | 991 | 54 | $ | 90,700 | $ | 1,590 |
• | The Company’s ability and intent to hold the securities, including an evaluation of the need to sell the security to meet certain liquidity measures, or whether the Company has sufficient levels of cash to hold the identified security in order to recover the entire amortized cost of the security; |
• | The financial condition of the underlying issuer; |
• | The credit ratings of the underlying issuer and if any changes in the credit rating have occurred; |
• | The length of time the security’s fair value has been less than amortized cost; and |
• | Adverse conditions related to the security or its issuer if the issuer has failed to make scheduled payments or other factors. |
December 31, | ||||||||
2018 | 2017 | |||||||
(in thousands) | ||||||||
Commercial, secured by real estate | $ | 3,057,779 | $ | 2,831,184 | ||||
Commercial, industrial and other | 336,735 | 340,400 | ||||||
Leases | 87,925 | 75,039 | ||||||
Real estate - residential mortgage | 329,854 | 322,880 | ||||||
Real estate - construction | 319,545 | 264,908 | ||||||
Home equity and consumer | 328,609 | 322,269 | ||||||
Total loans and leases | 4,460,447 | 4,156,680 | ||||||
Less deferred fees | (3,714 | ) | (3,960 | ) | ||||
Loans and leases, net of deferred fees | $ | 4,456,733 | $ | 4,152,720 |
Years Ended December 31, | ||||||||
2018 | 2017 | |||||||
Balance, beginning of period | $ | 129 | $ | 145 | ||||
Accretion | (182 | ) | (202 | ) | ||||
Net reclassification non-accretable difference | 134 | 186 | ||||||
Balance, end of period | $ | 81 | $ | 129 |
• | Commercial, secured by real estate - consists of commercial mortgage loans secured by owner occupied properties and non-owner occupied properties. The loans secured by owner occupied properties involve a variety of property types to conduct the borrower’s operations. The primary source of repayment for this type of loan is the cash flow from the business and is based upon the borrower’s financial health and the ability of the borrower and the business to repay. The loans secured by non-owner occupied properties involve investment properties for warehouse, retail, office space, etc., with a history of occupancy and cash flow. This commercial real estate category contains mortgage loans to the developers and owners of commercial real estate where the borrower intends to operate or sell the property at a profit and use the income stream or proceeds from the sale to repay the loan. |
• | Commercial, industrial and other - are loans made to provide funds for equipment and general corporate needs. Repayment of a loan primarily uses the funds obtained from the operation of the borrower’s business. Commercial loans also include lines of credit that are utilized to finance a borrower’s short-term credit needs and/or to finance a percentage of eligible receivables and inventory. |
• | Leases - includes a small portfolio of equipment leases, which consists of leases primarily for essential equipment used by small to medium sized businesses. |
• | Real estate - residential mortgage - contains permanent mortgage loans principally to consumers secured by residential real estate. Residential real estate loans are evaluated for the adequacy of repayment sources at the time of approval, based upon measures including credit scores, debt-to-income ratios, and collateral values. Loans may be either conforming or non-conforming. |
• | Real estate - construction - construction loans, as defined, are intended to finance the construction of commercial properties and include loans for the acquisition and development of land. Construction loans represent a higher degree of risk than permanent real estate loans and may be affected by a variety of factors such as the borrower’s ability to control costs and adhere to time schedules and the risk that constructed units may not be absorbed by the market within the anticipated time frame or at the anticipated price. The loan commitment on these loans often includes an interest reserve to pay interest charges on the outstanding balance of the loan. |
• | Home equity and consumer - includes primarily home equity loans and lines, installment loans, personal lines of credit and automobile loans. The home equity category consists mainly of loans and revolving lines of credit to consumers which are secured by residential real estate. These loans are typically secured with second mortgages on the homes, although many are secured with first mortgages. Other consumer loans include installment loans used by customers to purchase automobiles, boats and recreational vehicles. |
At December 31, | ||||||||
2018 | 2017 | |||||||
Commercial, secured by real estate | $ | 7,192 | $ | 5,890 | ||||
Commercial, industrial and other | 1,019 | 184 | ||||||
Leases | 501 | 144 | ||||||
Real estate - residential mortgage | 1,986 | 3,860 | ||||||
Real estate - construction | — | 1,472 | ||||||
Home equity and consumer | 1,432 | 2,105 | ||||||
Total non-accrual loans and leases | 12,130 | 13,655 | ||||||
Other real estate and other repossessed assets | 830 | 843 | ||||||
Total non-performing assets | $ | 12,960 | $ | 14,498 | ||||
Troubled debt restructurings, still accruing | $ | 9,293 | $ | 11,462 |
December 31, 2018 | 30-59 Days Past Due | 60-89 Days Past Due | Greater Than 89 Days | Total Past Due | Current | Total Loans and Leases | Recorded Investment Greater than 89 Days and Still Accruing | |||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||
Commercial, secured by real estate | $ | 1,477 | $ | 639 | $ | 2,237 | $ | 4,353 | $ | 3,053,426 | $ | 3,057,779 | $ | — | ||||||||||||||
Commercial, industrial and other | 173 | 243 | 750 | 1,166 | 335,569 | 336,735 | — | |||||||||||||||||||||
Leases | 533 | 13 | 501 | 1,047 | 86,878 | 87,925 | — | |||||||||||||||||||||
Real estate - residential mortgage | 743 | 111 | 1,776 | 2,630 | 327,224 | 329,854 | — | |||||||||||||||||||||
Real estate - construction | — | — | — | — | 319,545 | 319,545 | — | |||||||||||||||||||||
Home equity and consumer | 1,917 | 216 | 850 | 2,983 | 325,626 | 328,609 | — | |||||||||||||||||||||
$ | 4,843 | $ | 1,222 | $ | 6,114 | $ | 12,179 | $ | 4,448,268 | $ | 4,460,447 | $ | — |
December 31, 2017 | 30-59 Days Past Due | 60-89 Days Past Due | Greater Than 89 Days | Total Past Due | Current | Total Loans and Leases | Recorded Investment Greater than 89 Days and Still Accruing | |||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||
Commercial, secured by real estate | $ | 3,663 | $ | 1,082 | $ | 3,817 | $ | 8,562 | $ | 2,822,622 | $ | 2,831,184 | $ | — | ||||||||||||||
Commercial, industrial and other | 80 | 121 | 56 | 257 | 340,143 | 340,400 | — | |||||||||||||||||||||
Leases | 496 | 139 | 144 | 779 | 74,260 | 75,039 | — | |||||||||||||||||||||
Real estate - residential mortgage | 939 | 908 | 3,137 | 4,984 | 317,896 | 322,880 | — | |||||||||||||||||||||
Real estate - construction | — | — | 1,472 | 1,472 | 263,436 | 264,908 | — | |||||||||||||||||||||
Home equity and consumer | 1,258 | 310 | 1,386 | 2,954 | 319,315 | 322,269 | 200 | |||||||||||||||||||||
$ | 6,436 | $ | 2,560 | $ | 10,012 | $ | 19,008 | $ | 4,137,672 | $ | 4,156,680 | $ | 200 |
December 31, 2018 | Recorded Investment in Impaired Loans | Contractual Unpaid Principal Balance | Related Allowance | Interest Income Recognized | Average Investment in Impaired Loans | |||||||||||||||
(in thousands) | ||||||||||||||||||||
Loans without related allowance: | ||||||||||||||||||||
Commercial, secured by real estate | $ | 9,284 | $ | 9,829 | $ | — | $ | 188 | $ | 7,369 | ||||||||||
Commercial, industrial and other | 1,151 | 1,449 | — | 19 | 1,834 | |||||||||||||||
Leases | 301 | 597 | — | — | 376 | |||||||||||||||
Real estate - residential mortgage | — | — | — | 4 | 242 | |||||||||||||||
Real estate - construction | — | — | — | — | 726 | |||||||||||||||
Home equity and consumer | — | — | — | — | — | |||||||||||||||
Loans with related allowance: | ||||||||||||||||||||
Commercial, secured by real estate | 7,270 | 7,597 | 307 | 317 | 7,594 | |||||||||||||||
Commercial, industrial and other | 209 | 209 | 7 | 12 | 209 | |||||||||||||||
Leases | 30 | 30 | 14 | — | 19 | |||||||||||||||
Real estate - residential mortgage | 730 | 884 | 4 | 20 | 745 | |||||||||||||||
Real estate - construction | — | — | — | — | — | |||||||||||||||
Home equity and consumer | 727 | 765 | 6 | 32 | 898 | |||||||||||||||
Total: | ||||||||||||||||||||
Commercial, secured by real estate | $ | 16,554 | $ | 17,426 | $ | 307 | $ | 505 | $ | 14,963 | ||||||||||
Commercial, industrial and other | 1,360 | 1,658 | 7 | 31 | 2,043 | |||||||||||||||
Leases | 331 | 627 | 14 | — | 395 | |||||||||||||||
Real estate - residential mortgage | 730 | 884 | 4 | 24 | 987 | |||||||||||||||
Real estate - construction | — | — | — | — | 726 | |||||||||||||||
Home equity and consumer | 727 | 765 | 6 | 32 | 898 | |||||||||||||||
$ | 19,702 | $ | 21,360 | $ | 338 | $ | 592 | $ | 20,012 |
December 31, 2017 | Recorded Investment in Impaired Loans | Contractual Unpaid Principal Balance | Related Allowance | Interest Income Recognized | Average Investment in Impaired Loans | |||||||||||||||
(in thousands) | ||||||||||||||||||||
Loans without related allowance: | ||||||||||||||||||||
Commercial, secured by real estate | $ | 12,155 | $ | 12,497 | $ | — | $ | 366 | $ | 12,774 | ||||||||||
Commercial, industrial and other | 618 | 618 | — | 25 | 618 | |||||||||||||||
Leases | — | — | — | — | — | |||||||||||||||
Real estate - residential mortgage | 963 | 980 | — | 15 | 996 | |||||||||||||||
Real estate - construction | 1,471 | 1,471 | — | — | 1,471 | |||||||||||||||
Home equity and consumer | — | — | — | — | 6 | |||||||||||||||
Loans with related allowance: | ||||||||||||||||||||
Commercial, secured by real estate | 5,381 | 5,721 | 454 | 206 | 5,029 | |||||||||||||||
Commercial, industrial and other | 164 | 164 | 9 | 14 | 283 | |||||||||||||||
Leases | 65 | 65 | 30 | — | 29 | |||||||||||||||
Real estate - residential mortgage | 781 | 919 | 4 | 27 | 940 | |||||||||||||||
Real estate - construction | — | — | — | — | — | |||||||||||||||
Home equity and consumer | 993 | 1,026 | 8 | 52 | 1,090 | |||||||||||||||
Total: | ||||||||||||||||||||
Commercial, secured by real estate | $ | 17,536 | $ | 18,218 | $ | 454 | $ | 572 | $ | 17,803 | ||||||||||
Commercial, industrial and other | 782 | 782 | 9 | 39 | 901 | |||||||||||||||
Leases | 65 | 65 | 30 | — | 29 | |||||||||||||||
Real estate - residential mortgage | 1,744 | 1,899 | 4 | 42 | 1,936 | |||||||||||||||
Real estate - construction | 1,471 | 1,471 | — | — | 1,471 | |||||||||||||||
Home equity and consumer | 993 | 1,026 | 8 | 52 | 1,096 | |||||||||||||||
$ | 22,591 | $ | 23,461 | $ | 505 | $ | 705 | $ | 23,236 |
December 31, 2016 | Recorded Investment in Impaired Loans | Contractual Unpaid Principal Balance | Related Allowance | Interest Income Recognized | Average Investment in Impaired Loans | |||||||||||||||
(in thousands) | ||||||||||||||||||||
Loans without related allowance: | ||||||||||||||||||||
Commercial, secured by real estate | $ | 12,764 | $ | 13,195 | $ | — | $ | 229 | $ | 13,631 | ||||||||||
Commercial, industrial and other | 603 | 603 | — | 24 | 1,109 | |||||||||||||||
Leases | — | — | — | — | — | |||||||||||||||
Real estate - residential mortgage | 1,880 | 3,146 | — | 16 | 2,430 | |||||||||||||||
Real estate - construction | 1,471 | 1,471 | — | — | 12 | |||||||||||||||
Home equity and consumer | 139 | 139 | — | — | 388 | |||||||||||||||
Loans with related allowance: | ||||||||||||||||||||
Commercial, secured by real estate | 5,860 | 6,142 | 392 | 273 | 6,549 | |||||||||||||||
Commercial, industrial and other | 349 | 349 | 12 | 17 | 360 | |||||||||||||||
Leases | — | — | — | — | 1 | |||||||||||||||
Real estate - residential mortgage | 1,031 | 1,100 | 31 | 30 | 1,011 | |||||||||||||||
Real estate - construction | — | — | — | — | — | |||||||||||||||
Home equity and consumer | 1,188 | 1,211 | 94 | 59 | 1,184 | |||||||||||||||
Total: | ||||||||||||||||||||
Commercial, secured by real estate | $ | 18,624 | $ | 19,337 | $ | 392 | $ | 502 | $ | 20,180 | ||||||||||
Commercial, industrial and other | 952 | 952 | 12 | 41 | 1,469 | |||||||||||||||
Leases | — | — | — | — | 1 | |||||||||||||||
Real estate - residential mortgage | 2,911 | 4,246 | 31 | 46 | 3,441 | |||||||||||||||
Real estate - construction | 1,471 | 1,471 | — | — | 12 | |||||||||||||||
Home equity and consumer | 1,327 | 1,350 | 94 | 59 | 1,572 | |||||||||||||||
$ | 25,285 | $ | 27,356 | $ | 529 | $ | 648 | $ | 26,675 |
December 31, 2018 | Commercial, Secured by Real Estate | Commercial, Industrial and Other | ||||||||||
RISK RATING | Real Estate - Construction | |||||||||||
1 | $ | — | $ | 1,119 | $ | — | ||||||
2 | — | 18,462 | — | |||||||||
3 | 69,995 | 36,367 | — | |||||||||
4 | 933,577 | 91,145 | 17,375 | |||||||||
5 | 1,910,423 | 168,474 | 297,625 | |||||||||
5W - Watch | 61,626 | 7,798 | 3,493 | |||||||||
6 - Other assets especially mentioned | 38,844 | 2,033 | — | |||||||||
7 - Substandard | 43,314 | 11,337 | 1,052 | |||||||||
8 - Doubtful | — | — | — | |||||||||
9 - Loss | — | — | — | |||||||||
Total | $ | 3,057,779 | $ | 336,735 | $ | 319,545 |
December 31, 2017 | Commercial, Secured by Real Estate | Commercial, Industrial and Other | ||||||||||
RISK RATING | Real Estate - Construction | |||||||||||
1 | $ | — | $ | 392 | $ | — | ||||||
2 | — | 26,968 | — | |||||||||
3 | 76,824 | 35,950 | — | |||||||||
4 | 862,537 | 96,426 | 15,502 | |||||||||
5 | 1,779,908 | 150,928 | 246,806 | |||||||||
5W - Watch | 47,178 | 8,779 | — | |||||||||
6 - Other assets especially mentioned | 40,245 | 8,670 | — | |||||||||
7 - Substandard | 24,492 | 12,287 | 2,600 | |||||||||
8 - Doubtful | — | — | — | |||||||||
9 - Loss | — | — | — | |||||||||
Total | $ | 2,831,184 | $ | 340,400 | $ | 264,908 |
December 31, 2018 | Commercial, Secured by Real Estate | Commercial, Industrial and Other | Leases | Real Estate - Residential Mortgage | Real Estate - Construction | Home Equity and Consumer | Total | |||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||
Beginning balance | $ | 25,704 | $ | 2,313 | $ | 630 | $ | 1,557 | $ | 2,731 | $ | 2,520 | $ | 35,455 | ||||||||||||||
Charge-offs | (421 | ) | (1,452 | ) | (507 | ) | (131 | ) | (248 | ) | (588 | ) | (3,347 | ) | ||||||||||||||
Recoveries | 468 | 317 | 23 | 10 | 17 | 332 | 1,167 | |||||||||||||||||||||
Provision | 2,130 | 564 | 841 | 130 | 515 | 233 | 4,413 | |||||||||||||||||||||
Ending balance | $ | 27,881 | $ | 1,742 | $ | 987 | $ | 1,566 | $ | 3,015 | $ | 2,497 | $ | 37,688 | ||||||||||||||
Allowance for Loan and Leases Losses | ||||||||||||||||||||||||||||
Ending balance: Individually evaluated for impairment | $ | 307 | $ | 7 | $ | 14 | $ | 4 | $ | — | $ | 6 | $ | 338 | ||||||||||||||
Ending balance: Collectively evaluated for impairment | 27,574 | 1,735 | 973 | 1,562 | 3,015 | 2,491 | 37,350 | |||||||||||||||||||||
Ending balance | $ | 27,881 | $ | 1,742 | $ | 987 | $ | 1,566 | $ | 3,015 | $ | 2,497 | $ | 37,688 | ||||||||||||||
Loans and Leases | ||||||||||||||||||||||||||||
Ending balance: Individually evaluated for impairment | $ | 16,554 | $ | 1,360 | $ | 331 | $ | 730 | $ | — | $ | 727 | $ | 19,702 | ||||||||||||||
Ending balance: Collectively evaluated for impairment | 3,040,573 | 335,375 | 87,594 | 329,124 | 319,545 | 327,882 | 4,440,093 | |||||||||||||||||||||
Ending balance: Loans acquired with deteriorated credit quality | 652 | — | — | — | — | — | 652 | |||||||||||||||||||||
Ending balance (1) | $ | 3,057,779 | $ | 336,735 | $ | 87,925 | $ | 329,854 | $ | 319,545 | $ | 328,609 | $ | 4,460,447 |
(1) | Excludes deferred fees |
December 31, 2017 | Commercial, Secured by Real Estate | Commercial, Industrial and Other | Leases | Real Estate - Residential Mortgage | Real Estate - Construction | Home Equity and Consumer | Total | |||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||
Beginning balance | $ | 21,223 | $ | 1,723 | $ | 548 | $ | 1,964 | $ | 2,352 | $ | 3,435 | $ | 31,245 | ||||||||||||||
Charge-offs | (762 | ) | (477 | ) | (305 | ) | (441 | ) | (609 | ) | (852 | ) | (3,446 | ) | ||||||||||||||
Recoveries | 396 | 172 | 59 | 5 | 31 | 903 | 1,566 | |||||||||||||||||||||
Provision | 4,847 | 895 | 328 | 29 | 957 | (966 | ) | 6,090 | ||||||||||||||||||||
Ending balance | $ | 25,704 | $ | 2,313 | $ | 630 | $ | 1,557 | $ | 2,731 | $ | 2,520 | $ | 35,455 | ||||||||||||||
Allowance for Loan and Leases Losses | ||||||||||||||||||||||||||||
Ending balance: Individually evaluated for impairment | $ | 454 | $ | 9 | $ | 30 | $ | 4 | $ | — | $ | 8 | $ | 505 | ||||||||||||||
Ending balance: Collectively evaluated for impairment | 25,250 | 2,304 | 600 | 1,553 | 2,731 | 2,512 | 34,950 | |||||||||||||||||||||
Ending balance | $ | 25,704 | $ | 2,313 | $ | 630 | $ | 1,557 | $ | 2,731 | $ | 2,520 | $ | 35,455 | ||||||||||||||
Loans and Leases | ||||||||||||||||||||||||||||
Ending balance: Individually evaluated for impairment | $ | 17,536 | $ | 782 | $ | 65 | $ | 1,744 | $ | 1,471 | $ | 993 | $ | 22,591 | ||||||||||||||
Ending balance: Collectively evaluated for impairment | 2,812,941 | 339,618 | 74,974 | 321,136 | 263,437 | 321,273 | 4,133,379 | |||||||||||||||||||||
Ending balance: Loans acquired with deteriorated credit quality | 707 | — | — | — | — | 3 | 710 | |||||||||||||||||||||
Ending balance (1) | $ | 2,831,184 | $ | 340,400 | $ | 75,039 | $ | 322,880 | $ | 264,908 | $ | 322,269 | $ | 4,156,680 |
(1) | Excludes deferred fees |
For the Year Ended December 31, 2018 | For the Year Ended December 31, 2017 | |||||||||||||||||||||
Number of Contracts | Pre- Modification Outstanding Recorded Investment | Post- Modification Outstanding Recorded Investment | Number of Contracts | Pre- Modification Outstanding Recorded Investment | Post- Modification Outstanding Recorded Investment | |||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||
Commercial, secured by real estate | 5 | $ | 3,348 | $ | 3,348 | 8 | $ | 4,618 | $ | 4,618 | ||||||||||||
Commercial, industrial and other | 1 | 950 | 950 | 2 | 124 | 124 | ||||||||||||||||
Leases | 1 | 15 | 15 | 6 | 65 | 65 | ||||||||||||||||
7 | $ | 4,313 | $ | 4,313 | 16 | $ | 4,807 | $ | 4,807 |
For the Year Ended December 31, 2018 | For the Year Ended December 31, 2017 | |||||||||||||
Number of Contracts | Recorded Investment | Number of Contracts | Recorded Investment | |||||||||||
(dollars in thousands) | ||||||||||||||
Commercial, secured by real estate | 1 | $ | 171 | — | $ | — | ||||||||
Leases | — | $ | — | 2 | $ | 35 | ||||||||
1 | $ | 171 | 2 | $ | 35 |
2019 | $ | 30,384 | |
2020 | 24,297 | ||
2021 | 18,089 | ||
2022 | 10,814 | ||
2023 | 3,969 | ||
Thereafter | 372 | ||
$ | 87,925 |
Estimated | December 31, | |||||||||
Useful Lives | 2018 | 2017 | ||||||||
(in thousands) | ||||||||||
Land | Indefinite | $ | 10,471 | $ | 10,626 | |||||
Buildings and building improvements | 10 to 50 years | 47,006 | 46,985 | |||||||
Leasehold improvements | 10 to 25 years | 12,880 | 12,953 | |||||||
Furniture, fixtures and equipment | 2 to 30 years | 27,858 | 26,923 | |||||||
98,215 | 97,487 | |||||||||
Less accumulated depreciation and amortization | 49,040 | 47,174 | ||||||||
$ | 49,175 | $ | 50,313 |
Year | |||
2019 | $ | 568,350 | |
2020 | 108,881 | ||
2021 | 35,698 | ||
2022 | 41,235 | ||
2023 | 2,874 | ||
$ | 757,038 |
Federal Funds Purchased | 2018 | 2017 | 2016 | |||||||||
(dollars in thousands) | ||||||||||||
Balance at December 31, | $ | 192,064 | $ | 80,000 | $ | 32,000 | ||||||
Interest rate at December 31, | 2.88 | % | 1.71 | % | 0.85 | % | ||||||
Maximum amount outstanding at any month-end during the year | $ | 214,165 | $ | 168,784 | $ | 133,434 | ||||||
Average amount outstanding during the year | $ | 21,338 | $ | 13,264 | $ | 8,708 | ||||||
Weighted average interest rate during the year | 2.03 | % | 1.42 | % | 0.71 | % |
Securities Sold Under Agreements to Repurchase | 2018 | 2017 | 2016 | |||||||||
(dollars in thousands) | ||||||||||||
Balance at December 31, | $ | 41,841 | $ | 44,936 | $ | 24,354 | ||||||
Interest rate at December 31, | 0.26 | % | 0.02 | % | 0.02 | % | ||||||
Maximum amount outstanding at any month-end during the year | $ | 50,526 | $ | 44,936 | $ | 32,872 | ||||||
Average amount outstanding during the year | $ | 32,435 | $ | 28,480 | $ | 27,535 | ||||||
Weighted average interest rate during the year | 0.12 | % | 0.03 | % | 0.03 | % |
2019 | $ | 40,264 | |
2020 | 55,880 | ||
2021 | 44,971 | ||
2022 | 15,566 | ||
2023 | 24,437 | ||
$ | 181,118 |
Years Ended December 31, | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
(in thousands) | ||||||||||||
Current tax provision | $ | 30,459 | $ | 10,565 | $ | 22,308 | ||||||
Deferred tax expense (benefit) | (13,571 | ) | 16,904 | (987 | ) | |||||||
Total provision for income taxes | $ | 16,888 | $ | 27,469 | $ | 21,321 |
Years Ended December 31, | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
(in thousands) | ||||||||||||
Federal income tax, at statutory rates | $ | 16,861 | $ | 28,017 | $ | 21,994 | ||||||
Increase (deduction) in taxes resulting from: | ||||||||||||
Tax-exempt income | (1,096 | ) | (1,652 | ) | (1,671 | ) | ||||||
Excise tax on real estate investment trust ("REIT") dividend | — | 1,945 | — | |||||||||
Adjustment to net deferred tax asset for Tax Cuts and Jobs Act | — | (1,343 | ) | — | ||||||||
State income tax, net of federal income tax effect | 1,880 | 931 | 552 | |||||||||
Adjustment to net deferred tax asset for change in NJ tax law | (943 | ) | — | — | ||||||||
Excess tax benefits from employee share-based payments | (318 | ) | (587 | ) | — | |||||||
Other, net | 504 | 158 | 446 | |||||||||
Provision for income taxes | $ | 16,888 | $ | 27,469 | $ | 21,321 |
December 31, | ||||||||
2018 | 2017 | |||||||
Deferred tax assets: | (in thousands) | |||||||
Allowance for loan and lease losses | $ | 11,651 | $ | 10,662 | ||||
Stock based compensation plans | 865 | 769 | ||||||
Purchase accounting fair market value adjustments | 1,192 | 1,441 | ||||||
Non-accrued interest | 256 | 394 | ||||||
Deferred compensation | 2,142 | 2,007 | ||||||
Depreciation and amortization | 630 | 805 | ||||||
Other-than-temporary impairment loss on investment securities | 59 | 77 | ||||||
Unrealized losses on securities available for sale | 3,162 | 1,108 | ||||||
Other, net | 585 | 675 | ||||||
Gross deferred tax assets | 20,542 | 17,938 | ||||||
Deferred tax liabilities: | ||||||||
Core deposit intangible from acquired companies | 516 | 664 | ||||||
Undistributed income from subsidiary not consolidated for tax return purposes (REIT) | 149 | 12,015 | ||||||
Deferred loan costs | 1,418 | 1,169 | ||||||
Prepaid expenses | 459 | 524 | ||||||
Deferred gain on securities | 166 | 116 | ||||||
Unfunded pension benefits | 17 | 7 | ||||||
Loss on equity securities | 36 | — | ||||||
Unrealized gains on hedging derivative | 322 | 229 | ||||||
Other | 270 | 357 | ||||||
Gross deferred tax liabilities | 3,353 | 15,081 | ||||||
Net deferred tax assets | $ | 17,189 | $ | 2,857 |
December 31, | ||||||||
2018 | 2017 | |||||||
(in thousands) | ||||||||
Accrued plan cost included in other liabilities | $ | 604 | $ | 673 | ||||
Amount not recognized as component of net postretirement benefit cost | ||||||||
Recognized in accumulated other comprehensive income | ||||||||
Net actuarial gain | $ | (29 | ) | $ | 28 | |||
Unrecognized prior service cost | — | — | ||||||
Amounts not recognized as a component of net postretirement benefit (benefit) | $ | (29 | ) | $ | 28 |
Years Ended December 31, | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
(in thousands) | ||||||||||||
Net periodic plan cost included the following components: | ||||||||||||
Service cost | $ | 15 | $ | 21 | $ | 19 | ||||||
Interest cost | 20 | 23 | 26 | |||||||||
Amortization of prior service cost | — | 3 | 12 | |||||||||
$ | 35 | $ | 47 | $ | 57 |
2019 | $ | 57 | |
2020 | 63 | ||
2021 | 37 | ||
2022 | 38 | ||
2023 | 38 | ||
2024-2028 | 235 |
Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in Years) | Aggregate Intrinsic Value | ||||||||||
Outstanding, beginning of year | 102,216 | $ | 8.49 | 4.27 | $ | 1,101,806 | |||||||
Granted | — | — | |||||||||||
Exercised | (34,728 | ) | 8.84 | ||||||||||
Expired | — | — | |||||||||||
Forfeited | — | — | |||||||||||
Outstanding, end of year | 67,488 | $ | 8.28 | 2.86 | $ | 440,483 | |||||||
Options exercisable at year-end | 67,488 | $ | 8.28 | 2.86 | $ | 440,483 |
Number of Shares | Weighted Average Price | ||||||
Outstanding, Balance at of January 1, 2018 | 22,982 | $ | 14.44 | ||||
Granted | 11,575 | 20.30 | |||||
Vested | (22,856 | ) | 14.46 | ||||
Outstanding, December 31, 2018 | 11,701 | $ | 20.18 |
Number of RSUs | Weighted Average Price | ||||||
Outstanding, Balance at of January 1, 2018 | 267,732 | $ | 13.93 | ||||
Granted | 159,233 | 19.09 | |||||
Vested | (119,421 | ) | 13.76 | ||||
Forfeited | (8,197 | ) | 18.99 | ||||
Outstanding, December 31, 2018 | 299,347 | $ | 16.60 |
2018 | 2017 | 2016 | |||||||||
(in thousands) | |||||||||||
Deposit Related Fees and Charges | |||||||||||
Debit card interchange income | $ | 5,150 | $ | 4,474 | $ | 4,086 | |||||
Overdraft charges | 3,938 | 4,656 | 4,763 | ||||||||
ATM service charges | 830 | 808 | 705 | ||||||||
Demand deposit fees and charges | 540 | 679 | 546 | ||||||||
Savings service charges | 126 | 123 | 57 | ||||||||
Total | 10,584 | 10,740 | 10,157 | ||||||||
Commissions and Fees | |||||||||||
Loan and lease fees | 1,264 | 1,136 | 1,198 | ||||||||
Wire transfer charges | 1,093 | 1,005 | 914 | ||||||||
Investment services income | 1,314 | 1,045 | 973 | ||||||||
Merchant fees | 784 | 718 | 444 | ||||||||
Commissions from sales of checks | 434 | 457 | 448 | ||||||||
Safe deposit income | 371 | 269 | 247 | ||||||||
Other income | 264 | 202 | 96 | ||||||||
Total | 5,524 | 4,832 | 4,320 | ||||||||
Gains on Sale of Loans | 1,329 | 1,836 | 2,123 | ||||||||
Other Income | |||||||||||
Gains on customer swap transactions | 1,992 | 982 | 1,056 | ||||||||
Title insurance income | 195 | 200 | 142 | ||||||||
Other income | 295 | 518 | 431 | ||||||||
Total | 2,482 | 1,700 | 1,629 | ||||||||
Revenue not from contracts with customers | 2,391 | 6,327 | 3,101 | ||||||||
Total Noninterest Income | $ | 22,310 | $ | 25,435 | $ | 21,330 | |||||
Timing of Revenue Recognition | |||||||||||
Products and services transferred at a point in time | $ | 19,844 | $ | 19,040 | $ | 18,192 | |||||
Products and services transferred over time | 75 | 68 | 37 | ||||||||
Revenue not from contracts with customers | 2,391 | 6,327 | 3,101 | ||||||||
Total Noninterest Income | $ | 22,310 | $ | 25,435 | $ | 21,330 |
Year | |||
2019 | $ | 3,191 | |
2020 | 3,055 | ||
2021 | 2,866 | ||
2022 | 2,572 | ||
2023 | 2,233 | ||
Thereafter | 14,642 | ||
$ | 28,559 |
December 31, | ||||||||
2018 | 2017 | |||||||
(in thousands) | ||||||||
Financial instruments whose contract amounts represent credit risk | ||||||||
Commitments to extend credit | $ | 973,709 | $ | 966,441 | ||||
Standby letters of credit and financial guarantees written | 21,585 | 14,832 |
Year Ended December 31, 2018 | ||||||||||||
Before Tax Amount | Tax Benefit (Expense) | Net of Tax Amount | ||||||||||
(in thousands) | ||||||||||||
Unrealized losses on securities available for sale | ||||||||||||
Unrealized holding losses arising during period | $ | (4,241 | ) | $ | 734 | $ | (3,507 | ) | ||||
Reclassification adjustment for securities gains included in net income | — | — | — | |||||||||
Net unrealized losses on securities available for sale | (4,241 | ) | 734 | (3,507 | ) | |||||||
Unrealized gains on derivatives | 9 | 32 | 41 | |||||||||
Change in pension liability, net | 29 | (9 | ) | 20 | ||||||||
Other comprehensive loss | $ | (4,203 | ) | $ | 757 | $ | (3,446 | ) |
Year Ended December 31, 2017 | ||||||||||||
Before Tax Amount | Tax Benefit (Expense) | Net of Tax Amount | ||||||||||
(in thousands) | ||||||||||||
Unrealized losses on securities available for sale | ||||||||||||
Unrealized holding losses arising during period | $ | (1,406 | ) | $ | 503 | $ | (903 | ) | ||||
Reclassification adjustment for securities gains included in net income | (2,524 | ) | 884 | (1,640 | ) | |||||||
Net unrealized losses on securities available for sale | (3,930 | ) | 1,387 | (2,543 | ) | |||||||
Unrealized gains on derivatives | 57 | (20 | ) | 37 | ||||||||
Change in pension liability, net | (27 | ) | 11 | (16 | ) | |||||||
Other comprehensive loss | $ | (3,900 | ) | $ | 1,378 | $ | (2,522 | ) |
Year Ended December 31, 2016 | ||||||||||||
Before Tax Amount | Tax Benefit (Expense) | Net of Tax Amount | ||||||||||
(in thousands) | ||||||||||||
Unrealized losses on securities available for sale | ||||||||||||
Unrealized holding losses arising during period | $ | (1,816 | ) | $ | 778 | $ | (1,038 | ) | ||||
Reclassification adjustment for securities gains included in net income | (370 | ) | 137 | (233 | ) | |||||||
Net unrealized losses on available for sale securities | (2,186 | ) | 915 | (1,271 | ) | |||||||
Unrealized gains on derivatives | 1,033 | (361 | ) | 672 | ||||||||
Change in pension liability, net | 70 | (28 | ) | 42 | ||||||||
Other comprehensive loss | $ | (1,083 | ) | $ | 526 | $ | (557 | ) |
Unrealized Gains (Losses) on Available- for-Sale Securities | Unrealized Gains (Losses) on Derivatives | Pension Items | Total | |||||||||||||
(in thousands, net of tax) | ||||||||||||||||
Balance at of January 1, 2016 | $ | 1,154 | $ | — | $ | (4 | ) | $ | 1,150 | |||||||
Other comprehensive income (loss) before classifications | (1,038 | ) | 672 | 42 | (324 | ) | ||||||||||
Amounts reclassified from accumulated other comprehensive income | (233 | ) | $ | — | — | (233 | ) | |||||||||
Net current period other comprehensive income (loss) | (1,271 | ) | 672 | 42 | $ | (557 | ) | |||||||||
Balance at December 31, 2016 | $ | (117 | ) | $ | 672 | $ | 38 | $ | 593 | |||||||
Other comprehensive income (loss) before classifications | (903 | ) | 37 | (16 | ) | (882 | ) | |||||||||
Amounts reclassified from accumulated other comprehensive income | (1,640 | ) | — | — | (1,640 | ) | ||||||||||
Net current period other comprehensive income (loss) | (2,543 | ) | 37 | (16 | ) | (2,522 | ) | |||||||||
Adjustment for implementation of ASU 2018-02 | (572 | ) | 153 | (1 | ) | (420 | ) | |||||||||
Balance at December 31, 2017 | $ | (3,232 | ) | $ | 862 | $ | 21 | $ | (2,349 | ) | ||||||
Adjustment for implementation of ASU 2016-01 | (2,043 | ) | — | — | (2,043 | ) | ||||||||||
Adjusted balance as of January 1, 2018 | (5,275 | ) | 862 | 21 | (4,392 | ) | ||||||||||
Other comprehensive income (loss) before classifications | (3,507 | ) | 41 | 20 | (3,446 | ) | ||||||||||
Amounts reclassified from accumulated other comprehensive income | — | — | — | — | ||||||||||||
Net current period other comprehensive income (loss) | (3,507 | ) | 41 | 20 | (3,446 | ) | ||||||||||
Balance at December 31, 2018 | $ | (8,782 | ) | $ | 903 | $ | 41 | $ | (7,838 | ) |
December 31, 2018 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Fair Value | ||||||||||||
(in thousands) | ||||||||||||||||
Assets: | ||||||||||||||||
Investment securities, available for sale | ||||||||||||||||
U.S. Treasury and government agencies | $ | 4,920 | $ | 136,007 | $ | — | $ | 140,927 | ||||||||
Mortgage-backed securities | — | 447,094 | — | 447,094 | ||||||||||||
Obligations of states and political subdivisions | — | 45,505 | — | 45,505 | ||||||||||||
Corporate debt securities | — | 5,092 | — | 5,092 | ||||||||||||
Total securities available for sale | 4,920 | 633,698 | — | 638,618 | ||||||||||||
Equity securities, at fair value | 2,731 | 13,190 | — | 15,921 | ||||||||||||
Derivative assets | — | 12,135 | — | 12,135 | ||||||||||||
Total Assets | $ | 7,651 | $ | 659,023 | $ | — | $ | 666,674 | ||||||||
Liabilities: | ||||||||||||||||
Derivative liabilities | $ | — | $ | 11,036 | $ | — | $ | 11,036 | ||||||||
Total Liabilities | $ | — | $ | 11,036 | $ | — | $ | 11,036 |
December 31, 2017 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Fair Value | ||||||||||||
(in thousands) | ||||||||||||||||
Assets: | ||||||||||||||||
Investment securities, available for sale | ||||||||||||||||
U.S. Treasury and government agencies | $ | 5,415 | $ | 141,840 | $ | — | $ | 147,255 | ||||||||
Mortgage-backed securities | — | 424,331 | — | 424,331 | ||||||||||||
Obligations of states and political subdivisions | — | 51,320 | — | 51,320 | ||||||||||||
Corporate debt securities | — | 5,140 | — | 5,140 | ||||||||||||
Total securities available for sale | 5,415 | 622,631 | — | 628,046 | ||||||||||||
Equity securities, at fair value | 5,147 | 12,942 | — | 18,089 | ||||||||||||
Derivative assets | — | 6,555 | — | 6,555 | ||||||||||||
Total Assets | $ | 10,562 | $ | 642,128 | $ | — | $ | 652,690 | ||||||||
Liabilities: | ||||||||||||||||
Derivative liabilities | $ | — | $ | 5,465 | $ | — | $ | 5,465 | ||||||||
Total Liabilities | $ | — | $ | 5,465 | $ | — | $ | 5,465 |
December 31, 2018 | (Level 1) | (Level 2) | (Level 3) | Total Fair Value | ||||||||||||
(in thousands) | ||||||||||||||||
Assets: | ||||||||||||||||
Impaired loans and leases | $ | — | $ | — | $ | 19,702 | $ | 19,702 | ||||||||
Loans held for sale | — | 1,113 | — | 1,113 | ||||||||||||
Other real estate owned and other repossessed assets | — | — | 830 | 830 |
December 31, 2017 | (Level 1) | (Level 2) | (Level 3) | Total Fair Value | ||||||||||||
(in thousands) | ||||||||||||||||
Assets: | ||||||||||||||||
Impaired loans and leases | $ | — | $ | — | $ | 22,591 | $ | 22,591 | ||||||||
Loans held for sale | — | 456 | — | 456 | ||||||||||||
Other real estate owned and other repossessed assets | — | — | 843 | 843 |
December 31, 2018 | Carrying Value | Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||
(in thousands) | ||||||||||||||||||||
Financial Assets: | ||||||||||||||||||||
Investment securities held to maturity | $ | 153,646 | $ | 150,932 | $ | — | $ | 143,913 | $ | 7,019 | ||||||||||
Federal Home Loan and other membership bank stock | 13,301 | 13,301 | — | 13,301 | — | |||||||||||||||
Loans and leases, net | 4,419,045 | 4,341,477 | — | — | 4,341,477 | |||||||||||||||
Financial Liabilities: | ||||||||||||||||||||
Certificates of deposit | 757,038 | 750,801 | — | 750,801 | — | |||||||||||||||
Other borrowings | 181,118 | 176,921 | — | 176,921 | — | |||||||||||||||
Subordinated debentures | 105,027 | 102,497 | — | — | 102,497 |
December 31, 2017 | Carrying Value | Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||
(in thousands) | ||||||||||||||||||||
Financial Assets: | ||||||||||||||||||||
Investment securities held to maturity | $ | 139,685 | $ | 138,688 | $ | — | $ | 127,901 | $ | 10,787 | ||||||||||
Federal Home Loan and other membership bank stock | 12,576 | 12,576 | — | 12,576 | — | |||||||||||||||
Loans and leases, net | 4,117,265 | 4,114,516 | — | — | 4,114,516 | |||||||||||||||
Financial Liabilities: | ||||||||||||||||||||
Certificates of deposit | 737,428 | 732,417 | — | 732,417 | — | |||||||||||||||
Other borrowings | 192,011 | 189,080 | — | 189,080 | — | |||||||||||||||
Subordinated debentures | 104,902 | 97,244 | — | — | 97,244 |
December 31, 2018 | Notional Amount | Average Maturity (Years) | Weighted Average Rate Fixed | Weighted Average Variable Rate | Fair Value | ||||||||||
Classified in Other Assets: | |||||||||||||||
3rd Party interest rate swaps | $ | 153,909 | 8.3 | 4.10 | % | 1 Mo. LIBOR + 2.13% | $ | 5,329 | |||||||
Customer interest rate swaps | 164,427 | 12.0 | 5.04 | % | 1 Mo. LIBOR + 2.05% | 5,707 | |||||||||
Interest rate swap (cash flow hedge) | 30,000 | 2.5 | 1.10 | % | 3 Mo. LIBOR | 1,099 | |||||||||
Classified in Other Liabilities: | |||||||||||||||
Customer interest rate swaps | $ | 153,909 | 8.3 | 4.10 | % | 1 Mo. LIBOR + 2.13% | $ | (5,329 | ) | ||||||
3rd party interest rate swaps | 164,427 | 12.0 | 5.04 | % | 1 Mo. LIBOR + 2.05% | (5,707 | ) |
December 31, 2017 | Notional Amount | Average Maturity (Years) | Weighted Average Rate Fixed | Weighted Average Variable Rate | Fair Value | ||||||||||
Classified in Other Assets: | |||||||||||||||
3rd Party interest rate swaps | $ | 110,076 | 8.8 | 3.87 | % | 1 Mo. LIBOR + 2.11% | $ | 3,634 | |||||||
Customer interest rate swaps | 82,760 | 11.5 | 4.74 | % | 1 Mo. LIBOR + 2.21% | 1,831 | |||||||||
Interest rate swap (cash flow hedge) | 30,000 | 3.5 | 1.10 | % | 3 Mo. LIBOR | 1,090 | |||||||||
Classified in Other Liabilities: | |||||||||||||||
Customer interest rate swaps | $ | 110,076 | 8.8 | 3.87 | % | 1 Mo. LIBOR + 2.11% | $ | (3,634 | ) | ||||||
3rd party interest rate swaps | 82,760 | 11.5 | 4.74 | % | 1 Mo. LIBOR + 2.21% | (1,831 | ) |
Actual | For Capital Adequacy Purposes with Capital Conservation Buffer | To Be Well Capitalized Under Prompt Corrective Action Provisions | ||||||||||||||||||||||
December 31, 2018 | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
Total capital (to risk-weighted assets) | ||||||||||||||||||||||||
Company | $ | 637,377 | 13.71 | % | > | $ | 458,952 | > 9.875% | N/A | N/A | ||||||||||||||
Lakeland | 605,560 | 13.06 | % | $ | 457,912 | 9.875 | % | > | $ | 463,708 | > 10.00% | |||||||||||||
Tier 1 capital (to risk-weighted assets) | ||||||||||||||||||||||||
Company | $ | 523,577 | 11.27 | % | > | $ | 366,000 | > 7.875% | N/A | N/A | ||||||||||||||
Lakeland | 565,549 | 12.20 | % | $ | 365,170 | 7.875 | % | > | $ | 370,967 | > 8.00% | |||||||||||||
Common equity Tier 1 capital (to risk-weighted assets) | ||||||||||||||||||||||||
Company | $ | 493,577 | 10.62 | % | > | $ | 296,285 | > 6.375% | N/A | N/A | ||||||||||||||
Lakeland | 565,549 | 12.20 | % | $ | 295,614 | 6.375 | % | > | $ | 301,410 | > 6.50% | |||||||||||||
Tier 1 capital (to average assets) | ||||||||||||||||||||||||
Company | $ | 523,577 | 9.39 | % | > | $ | 222,982 | > 4.00% | N/A | N/A | ||||||||||||||
Lakeland | 565,549 | 10.17 | % | $ | 222,539 | 4.00 | % | > | $ | 278,173 | > 5.00% |
Actual | For Capital Adequacy Purposes with Capital Conservation Buffer | To Be Well Capitalized Under Prompt Corrective Action Provisions | ||||||||||||||||||||||
December 31, 2017 | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
Total capital (to risk-weighted assets) | ||||||||||||||||||||||||
Company | $ | 589,047 | 13.40 | % | > | $ | 406,477 | > 9.25% | N/A | N/A | ||||||||||||||
Lakeland | 563,910 | 12.86 | % | $ | 405,552 | 9.25 | % | > | $ | 438,435 | > 10.00% | |||||||||||||
Tier 1 capital (to risk-weighted assets) | ||||||||||||||||||||||||
Company | $ | 477,453 | 10.87 | % | > | $ | 318,590 | > 7.25% | N/A | N/A | ||||||||||||||
Lakeland | 525,979 | 12.00 | % | $ | 317,865 | 7.25 | % | > | $ | 350,748 | > 8.00% | |||||||||||||
Common equity Tier 1 capital (to risk-weighted assets) | ||||||||||||||||||||||||
Company | $ | 447,453 | 10.18 | % | > | $ | 252,675 | > 5.75% | N/A | N/A | ||||||||||||||
Lakeland | 525,979 | 12.00 | % | $ | 252,100 | 5.75 | % | > | $ | 284,983 | > 6.50% | |||||||||||||
Tier 1 capital (to average assets) | ||||||||||||||||||||||||
Company | $ | 477,453 | 9.12 | % | > | $ | 209,431 | > 4.00% | N/A | N/A | ||||||||||||||
Lakeland | 525,979 | 10.06 | % | $ | 209,239 | 4.00 | % | > | $ | 261,548 | > 5.00% |
For the Year Ended | ||||
2019 | $ | 505 | ||
2020 | 415 | |||
2021 | 326 | |||
2022 | 236 | |||
2023 | 147 |
December 31, | ||||||||
2018 | 2017 | |||||||
(in thousands) | ||||||||
ASSETS | ||||||||
Cash and due from banks | $ | 23,285 | $ | 17,695 | ||||
Equity securities | 2,743 | 5,158 | ||||||
Investment securities, held to maturity | 1,000 | 1,000 | ||||||
Investment in subsidiaries | 695,571 | 659,180 | ||||||
Other assets | 7,182 | 6,013 | ||||||
TOTAL ASSETS | $ | 729,781 | $ | 689,046 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Other liabilities | $ | 1,015 | $ | 1,022 | ||||
Subordinated debentures | 105,027 | 104,902 | ||||||
Total stockholders’ equity | 623,739 | 583,122 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 729,781 | $ | 689,046 |
Years Ended December 31, | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
(in thousands) | ||||||||||||
INCOME | ||||||||||||
Dividends from subsidiaries | $ | 30,589 | $ | 26,665 | $ | 20,687 | ||||||
Other income | (125 | ) | 2,750 | 199 | ||||||||
TOTAL INCOME | 30,464 | 29,415 | 20,886 | |||||||||
EXPENSE | ||||||||||||
Interest on subordinated debentures | 5,141 | 5,091 | 2,171 | |||||||||
Noninterest expenses | 506 | 377 | 442 | |||||||||
TOTAL EXPENSE | 5,647 | 5,468 | 2,613 | |||||||||
Income before (benefit) provision for income taxes | 24,817 | 23,947 | 18,273 | |||||||||
Income taxes (benefit) provision | (1,130 | ) | (2,018 | ) | (845 | ) | ||||||
Income before equity in undistributed income of subsidiaries | 25,947 | 25,965 | 19,118 | |||||||||
Equity in undistributed income of subsidiaries | 37,454 | 26,615 | 22,400 | |||||||||
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS | $ | 63,401 | $ | 52,580 | $ | 41,518 |
Years Ended December 31, | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
(in thousands) | ||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||
Net income | $ | 63,401 | $ | 52,580 | $ | 41,518 | ||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||||||
Gain on securities | — | (2,539 | ) | — | ||||||||
Amortization of subordinated debt costs | 125 | 118 | 30 | |||||||||
Change in market value of equity securities | 338 | — | — | |||||||||
Excess tax benefits | 318 | 587 | — | |||||||||
Increase in other assets | (1,446 | ) | (1,927 | ) | (922 | ) | ||||||
(Decrease) increase in other liabilities | (6 | ) | (17 | ) | 1,010 | |||||||
Equity in undistributed income of subsidiaries | (37,454 | ) | (26,615 | ) | (22,400 | ) | ||||||
NET CASH PROVIDED BY OPERATING ACTIVITIES | 25,276 | 22,187 | 19,236 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||
Net cash used in acquisition | — | — | (5,356 | ) | ||||||||
Purchases of available for sale securities | — | (79 | ) | (62 | ) | |||||||
Purchases of equity securities | (78 | ) | — | — | ||||||||
Proceeds from sale of available for sale securities | — | 3,217 | — | |||||||||
Proceeds from sale of equity securities | 2,155 | — | — | |||||||||
Contribution to subsidiary | — | — | (124,373 | ) | ||||||||
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | 2,077 | 3,138 | (129,791 | ) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
Cash dividends paid on common stock | (21,307 | ) | (18,853 | ) | (16,007 | ) | ||||||
Proceeds from issuance of common stock, net | — | — | 48,678 | |||||||||
Proceeds from issuance of subordinated debt, net | — | — | 73,516 | |||||||||
Retirement of restricted stock | (763 | ) | (773 | ) | (206 | ) | ||||||
Excess tax benefits | — | — | 43 | |||||||||
Exercise of stock options | 307 | 321 | 285 | |||||||||
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | (21,763 | ) | (19,305 | ) | 106,309 | |||||||
Net increase (decrease) in cash and cash equivalents | 5,590 | 6,020 | (4,246 | ) | ||||||||
Cash and cash equivalents, beginning of year | 17,695 | 11,675 | 15,921 | |||||||||
CASH AND CASH EQUIVALENTS, END OF YEAR | $ | 23,285 | $ | 17,695 | $ | 11,675 |
• | Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; |
• | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and the board of directors of the Company; and |
• | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. |
Plan Category | (a) Number Of Securities To Be Issued Upon Exercise Of Outstanding Options, Warrants and Rights | (b) Weighted-Average Exercise Price Of Outstanding Options, Warrants and Rights | (c) Number Of Securities Remaining Available For Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected In Column (a)) | |||||||
Equity Compensation Plans Approved by Shareholders | 366,240 | $ | 8.59 | 1,991,870 | ||||||
Equity Compensation Plans Not Approved by Shareholders | — | — | — | |||||||
TOTAL | 366,240 | $ | 8.59 | 1,991,870 |
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101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema Document |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
LAKELAND BANCORP, INC. | |||||||
Dated: | March 1, 2019 | By: | /s/ Thomas J. Shara | ||||
Thomas J. Shara | |||||||
President and Chief Executive Officer |
Signature | Capacity | Date | ||
/s/ Bruce D. Bohuny* | Director | March 1, 2019 | ||
Bruce D. Bohuny | ||||
/s/ Mary Ann Deacon* | Chairman | March 1, 2019 | ||
Mary Ann Deacon | ||||
/s/ Brian M. Flynn* | Director | March 1, 2019 | ||
Brian M. Flynn | ||||
/s/ Mark J. Fredericks* | Director | March 1, 2019 | ||
Mark J. Fredericks | ||||
/s/ James E. Hanson II * | Director | March 1, 2019 | ||
James E. Hanson II | ||||
/s/ Janeth C. Hendershot* | Director | March 1, 2019 | ||
Janeth C. Hendershot | ||||
/s/ Lawrence R. Inserra, Jr.* | Director | March 1, 2019 | ||
Lawrence R. Inserra, Jr. | ||||
/s/ Thomas J. Marino* | Director | March 1, 2019 | ||
Thomas J. Marino | ||||
/s/ Robert E. McCracken* | Director | March 1, 2019 | ||
Robert E. McCracken | ||||
/s/ Robert B. Nicholson, III* | Director | March 1, 2019 | ||
Robert B. Nicholson, III |
Signature | Capacity | Date | ||
/s/ Thomas J. Shara | Director, President and Chief Executive Officer (Principal Executive Officer) | March 1, 2019 | ||
Thomas J. Shara | ||||
/s/ Thomas Splaine | Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | March 1, 2019 | ||
Thomas Splaine |
*By: | /s/ Thomas J. Shara | March 1, 2019 | ||||
Thomas J. Shara Attorney-in-Fact |
Year ended December 31, | ||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Earnings: | ||||||||||||||||||||
Income from continuing operations before taxes | 80,289 | $ | 80,049 | $ | 62,839 | $ | 48,648 | $ | 46,288 | |||||||||||
Fixed charges excluding deposits and preferred stock dividends: | 9,927 | 9,403 | 8,206 | 6,015 | 4,764 | |||||||||||||||
Subtotal | 90,216 | 89,452 | 71,045 | 54,663 | 51,052 | |||||||||||||||
Interest on deposits | 30,620 | 16,600 | 10,512 | 5,755 | 5,064 | |||||||||||||||
Total | $ | 120,836 | $ | 106,052 | $ | 81,557 | $ | 60,418 | $ | 56,116 | ||||||||||
Fixed charges: | ||||||||||||||||||||
Interest excluding deposits | $ | 8,942 | $ | 8,366 | $ | 7,135 | $ | 5,118 | $ | 3,873 | ||||||||||
Interest component on rentals* | 985 | 1,037 | 1,071 | 897 | 891 | |||||||||||||||
Subtotal | 9,927 | 9,403 | 8,206 | 6,015 | 4,764 | |||||||||||||||
Interest on deposits | 30,620 | 16,600 | 10,512 | 5,755 | 5,064 | |||||||||||||||
Total | $ | 40,547 | $ | 26,003 | $ | 18,718 | $ | 11,770 | $ | 9,828 | ||||||||||
Ratio of earnings to fixed charges: | ||||||||||||||||||||
Excluding interest on deposits | 9.09 | 9.51 | 8.66 | 9.09 | 10.72 | |||||||||||||||
Including interest on deposits | 2.98 | 4.08 | 4.36 | 5.13 | 5.71 |
* | Interest component on rentals estimated to be one-third of rentals. |
Name | Jurisdiction of Incorporation | |
Lakeland Bank | New Jersey chartered bank | |
Lakeland NJ Investment Corporation | New Jersey | |
(wholly owned subsidiary of Lakeland Bank) | ||
Lakeland Investment Corporation | Delaware | |
(wholly owned subsidiary of Lakeland NJ Investment Corporation) | ||
Lakeland Equity, Inc. | Delaware | |
(wholly owned subsidiary of Lakeland Investment Corporation) | ||
Lakeland Preferred Equity, Inc. | New Jersey | |
(wholly owned subsidiary of Lakeland Equity, Inc.) | ||
NBSC Holdings, Inc. | New Jersey | |
(wholly owned subsidiary of Lakeland Bank) | ||
NBSC Properties, Inc. | New Jersey | |
(wholly owned subsidiary of Lakeland Bank) | ||
Lakeland Bancorp Capital Trust II | Delaware | |
Lakeland Bancorp Capital Trust IV | Delaware | |
Lakeland Title Group LLC | New Jersey | |
(50% owned by Lakeland Bank) | ||
Sullivan Financial Services Inc. | New Jersey | |
(wholly owned subsidiary of Lakeland Bank) | ||
Lakeland Financial Services Agency, Inc. | New Jersey | |
(wholly owned subsidiary of Lakeland Bank) |
Signatures | Title | |
/s/ Bruce D. Bohuny | Director | |
Bruce D. Bohuny | ||
/s/ Mary Ann Deacon | Director | |
Mary Ann Deacon | ||
/s/ Brian M. Flynn | Director | |
Brian M. Flynn | ||
/s/ Mark J. Fredericks | Director | |
Mark J. Fredericks | ||
/s/ James E. Hanson II * | Director | |
James E. Hanson | ||
/s/ Janeth C. Hendershot | Director | |
Janeth C. Hendershot | ||
/s/ Lawrence R. Inserra, Jr. | Director | |
Lawrence R. Inserra, Jr. | ||
/s/ Thomas J. Marino | Director | |
Thomas J. Marino | ||
/s/ Robert E. McCracken | Director | |
Robert E. McCracken | ||
/s/ Robert B. Nicholson, III | Director | |
Robert B. Nicholson, III | ||
/s/ Thomas J. Shara | Director, President and Chief Executive Officer (Principal Executive Officer) | |
Thomas J. Shara | ||
/s/ Thomas F. Splaine, Jr. | Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | |
Thomas F. Splaine, Jr. |
1. | I have reviewed this annual report on Form 10-K of Lakeland Bancorp, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Thomas J. Shara | |
Thomas J. Shara | |
President and Chief Executive Officer | |
(Principal Executive Officer) |
1. | I have reviewed this annual report on Form 10-K of Lakeland Bancorp, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Thomas F. Splaine, Jr. | |
Thomas F. Splaine, Jr. | |
Executive Vice President and Chief Financial Officer | |
(Principal Financial Officer) |
(1) | The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the consolidated financial condition of the Company as of the dates presented and consolidated results of operations of the Company for the periods presented. |
By: | /s/ Thomas J. Shara | |
Thomas J. Shara | ||
President and Chief Executive Officer | ||
(Principal Executive Officer) | ||
By: | /s/ Thomas F. Splaine, Jr. | |
Thomas F. Splaine, Jr. | ||
Executive Vice President and Chief Financial Officer | ||
(Principal Financial Officer) |
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Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Feb. 22, 2019 |
Jun. 30, 2018 |
|
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | LBAI | ||
Entity Registrant Name | LAKELAND BANCORP INC | ||
Entity Central Index Key | 0000846901 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 50,336,797 | ||
Entity Public Float | $ 901,226,000 |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Investment securities held to maturity; fair value | $ 150,932 | $ 138,688 |
Common stock, par value | ||
Common stock, shares authorized | 100,000,000 | 70,000,000 |
Common stock, shares issued | 47,486,250 | 47,353,864 |
Consolidated Statements of Income - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
INTEREST INCOME | |||
Loans, leases and fees | $ 193,143,000 | $ 172,342,000 | $ 149,777,000 |
Federal funds sold and interest-bearing deposits with banks | 1,559,000 | 880,000 | 569,000 |
Taxable investment securities and other | 16,710,000 | 14,987,000 | 11,163,000 |
Tax-exempt investment securities | 1,709,000 | 1,995,000 | 1,787,000 |
TOTAL INTEREST INCOME | 213,121,000 | 190,204,000 | 163,296,000 |
INTEREST EXPENSE | |||
Deposits | 30,620,000 | 16,600,000 | 10,512,000 |
Federal funds purchased and securities sold under agreements to repurchase | 471,000 | 198,000 | 69,000 |
Other borrowings | 8,471,000 | 8,168,000 | 7,066,000 |
TOTAL INTEREST EXPENSE | 39,562,000 | 24,966,000 | 17,647,000 |
NET INTEREST INCOME | 173,559,000 | 165,238,000 | 145,649,000 |
Provision for loan and lease losses | 4,413,000 | 6,090,000 | 4,223,000 |
NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES | 169,146,000 | 159,148,000 | 141,426,000 |
NONINTEREST INCOME | |||
Service charges on deposit accounts | 10,584,000 | 10,740,000 | 10,157,000 |
Commissions and fees | 5,542,000 | 4,858,000 | 4,349,000 |
Income on bank owned life insurance | 3,256,000 | 2,354,000 | 2,562,000 |
Loss on equity securities | (583,000) | 0 | 0 |
Gains on sales of loans | 1,329,000 | 1,836,000 | 2,123,000 |
Gain on sales and calls of investment securities, net | 0 | 2,524,000 | 370,000 |
Other income | 2,182,000 | 3,123,000 | 1,769,000 |
TOTAL NONINTEREST INCOME | 22,310,000 | 25,435,000 | 21,330,000 |
NONINTEREST EXPENSE | |||
Salaries and employee benefits | 68,595,000 | 61,166,000 | 56,107,000 |
Net occupancy expense | 10,155,000 | 10,243,000 | 9,935,000 |
Furniture and equipment | 8,297,000 | 8,269,000 | 8,017,000 |
FDIC insurance expense | 1,608,000 | 1,577,000 | 2,248,000 |
Stationery, supplies and postage | 1,625,000 | 1,797,000 | 1,727,000 |
Marketing expense | 1,437,000 | 1,675,000 | 1,672,000 |
Data processing expense | 3,609,000 | 1,993,000 | 1,891,000 |
Telecommunications expense | 1,769,000 | 1,607,000 | 1,631,000 |
ATM and debit card expense | 2,195,000 | 2,051,000 | 1,582,000 |
Core deposit intangible amortization | 594,000 | 654,000 | 734,000 |
Other real estate and repossessed asset expense | 158,000 | 181,000 | 116,000 |
Long-term debt prepayment fee | 0 | 2,828,000 | 0 |
Merger related expenses | 464,000 | 0 | 4,103,000 |
Other expenses | 10,661,000 | 10,493,000 | 10,154,000 |
TOTAL NONINTEREST EXPENSE | 111,167,000 | 104,534,000 | 99,917,000 |
Income before provision for income taxes | 80,289,000 | 80,049,000 | 62,839,000 |
Provision for income taxes | 16,888,000 | 27,469,000 | 21,321,000 |
NET INCOME | $ 63,401,000 | $ 52,580,000 | $ 41,518,000 |
PER SHARE OF COMMON STOCK: | |||
Basic earnings (usd per share) | $ 1.32 | $ 1.10 | $ 0.96 |
Diluted earnings (usd per share) | 1.32 | 1.09 | 0.95 |
Cash dividends (usd per share) | $ 0.45 | $ 0.4 | $ 0.37 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Statement of Comprehensive Income [Abstract] | |||
NET INCOME | $ 63,401 | $ 52,580 | $ 41,518 |
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX: | |||
Unrealized losses on securities available for sale | (3,507) | (903) | (1,038) |
Reclassification for securities gains included in net income | 0 | (1,640) | (233) |
Unrealized gains on derivatives | 41 | 37 | 672 |
Change in pension liability, net | 20 | (16) | 42 |
Other comprehensive loss | (3,446) | (2,522) | (557) |
TOTAL COMPREHENSIVE INCOME | $ 59,955 | $ 50,058 | $ 40,961 |
Summary of Accounting Policies |
12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||
Accounting Policies [Abstract] | |||||||||
Summary of Accounting Policies | SUMMARY OF ACCOUNTING POLICIES Lakeland Bancorp, Inc. (the “Company”) is a bank holding company whose principal activity is the ownership and management of its wholly owned subsidiary, Lakeland Bank (“Lakeland”). Lakeland operates under a state bank charter and provides full banking services and, as a state bank, is subject to regulation by the New Jersey Department of Banking and Insurance. Lakeland generates commercial, mortgage and consumer loans and receives deposits from customers located primarily in Northern and Central New Jersey. Through a third party, Lakeland also provides non-deposit products, such as securities brokerage services including mutual funds and variable annuities. Lakeland operates as a commercial bank offering a wide variety of commercial loans and leases and, to a lesser degree, consumer credits. Its primary strategic aim is to establish a reputation and market presence as the “small and middle market business bank” in its principal markets. Lakeland funds its loans primarily by offering demand deposit, savings and money market, and time deposit accounts to both commercial enterprises and individuals. Additionally, it originates residential mortgage loans, and services such loans which are owned by other investors. Lakeland also has an equipment finance division which provides loans to finance equipment primarily to small and medium sized business clients (referred to as "Leases") and an asset based lending department which specializes in utilizing particular assets to fund the working capital needs of borrowers. The Company and Lakeland are subject to regulations of certain state and federal agencies and, accordingly, are periodically examined by those regulatory authorities. As a consequence of the extensive regulation of commercial banking activities, Lakeland’s business is particularly susceptible to being affected by state and federal legislation and regulations. Basis of Financial Statement Presentation The accounting and reporting policies of the Company and its subsidiaries conform with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and predominant practices within the banking industry. The consolidated financial statements include the accounts of the Company, Lakeland, Lakeland NJ Investment Corp., Lakeland Investment Corp., Lakeland Equity, Inc. and Lakeland Preferred Equity, Inc. All significant intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications have been made in the consolidated financial statements to conform with current year classifications. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. These estimates and assumptions also affect reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. The principal estimates that are particularly susceptible to significant change in the near term relate to the allowance for loan and lease losses and the valuation of the Company’s investment securities portfolio. The policies regarding these estimates are discussed below. The Company’s operating segments are components of its enterprise for which separate financial information is available and is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assess performance. The Company’s chief operating decision maker is its Chief Executive Officer. All of the Company’s financial services activities are interrelated, and each activity is dependent and assessed based on how each of the activities of the Company supports the others. For example, commercial lending is dependent upon the ability of Lakeland to fund itself with retail deposits and other borrowings and to manage interest rate and credit risk. The situation is also similar for consumer and residential mortgage lending. Moreover, the Company primarily operates in one market area, Northern and Central New Jersey and contiguous areas. Therefore, all significant operating decisions are based upon analysis of the Company as one operating segment or unit. Accordingly, the Company has determined that it has one operating segment and thus one reporting segment. Cash and Cash Equivalents Cash and cash equivalents are defined as cash on hand, cash items in the process of collection, amounts due from banks and federal funds sold with an original maturity of three months or less. A portion of Lakeland’s cash on hand and on deposit with the Federal Reserve Bank was required to meet regulatory reserve and clearing requirements. Investment Securities Investment securities are classified as held to maturity or available for sale. Management determines the appropriate classification of investment securities at the time of purchase. Investments in securities, for which management has both the ability and intent to hold to maturity, are classified as held to maturity and carried at cost, adjusted for the amortization of premiums and accretion of discounts computed by the effective interest method. Investments in debt securities, which management believes may be sold prior to maturity due to changes in interest rates, prepayment risk, liquidity requirements, or other factors, are classified as available for sale. Net unrealized gains and losses for such securities, net of tax effect, are reported as other comprehensive income (loss) and excluded from the determination of net income. Gains or losses on disposition of investment securities are based on the net proceeds and the adjusted carrying amount of the securities sold using the specific identification method. Losses are recorded through the statement of income when the impairment is considered other-than-temporary, even if a decision to sell has not been made. The Company evaluates its investment securities portfolio for impairment each quarter. In estimating other-than-temporary losses, the Company considers the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, and whether the Company is more likely than not to sell the security before recovery of its cost basis. If a security has been impaired for more than twelve months, and the impairment is deemed other-than-temporary, a write down will occur in that quarter. If a loss is deemed to be other-than-temporary, it is recognized as a realized loss in the income statement with the security assigned a new cost basis. If the Company intends to sell an impaired security, the Company records an other-than-temporary loss in an amount equal to the entire difference between the fair value and amortized cost. If a security is determined to be other-than-temporarily impaired, but the Company does not intend to sell the security, only the credit portion of the estimated loss is recognized in earnings in gain (loss) on securities, with the other portion of the loss recognized in other comprehensive income. If a determination is made that an equity security is other-than-temporarily impaired, the unrealized loss will be recognized as an other-than-temporary impairment charge in noninterest income as a component of gain (loss) on investment securities. The Company has an equity securities portfolio, which consists of investments in other financial institutions for market appreciation purposes, and recognizes net unrealized gains and losses through net income. Loans and Leases and Allowance for Loan and Lease Losses Loans and leases that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at the amount of unpaid principal and are net of unearned discount, unearned loan fees and an allowance for loan and lease losses. Interest income is accrued as earned on a simple interest basis, adjusted for prepayments. All unamortized fees and costs related to the loan are amortized over the life of the loan using the interest method. Accrual of interest is discontinued on a loan or lease when management believes, after considering economic and business conditions and collection efforts, that the borrower’s financial condition is such that full collection of interest and principal is doubtful. When a loan or lease is placed on such non-accrual status, all accumulated accrued interest receivable is reversed out of current period income. Commercial loans and leases are placed on a non-accrual status with all accrued interest and unpaid interest reversed if (a) because of the deterioration in the financial position of the borrowers they are maintained on a cash basis (which means payments are applied when and as received rather than on a regularly scheduled basis), (b) payment in full of interest or principal is not expected, or (c) principal and interest have been in default for a period of 90 days or more unless the obligation is both well-secured and in process of collection. Residential mortgage loans and closed-end consumer loans are placed on non-accrual status at the time principal and interest have been in default for a period of 90 days or more, except where there exists sufficient collateral to cover the defaulted principal and interest payments, and the loans are well-secured and in the process of collection. Open-end consumer loans secured by real estate are generally placed on non-accrual and reviewed for charge-off when principal and interest payments are four months in arrears unless the obligations are well-secured and in the process of collection. Interest thereafter on such charged-off loans is taken into income when received only after full recovery of principal. As a general rule, a non-accrual asset may be restored to accrual status when none of its principal or interest is due and unpaid, satisfactory payments have been received for a sustained period (usually six months), or when it otherwise becomes well-secured and in the process of collection. The Company defines impaired loans as all non-accrual loans with recorded investments of $500,000 or greater. Impaired loans also include all loans modified as troubled debt restructurings. Loans and leases are considered impaired when, based on current information and events, it is probable that Lakeland will be unable to collect all amounts due in accordance with the original contractual terms of the loan agreement, including scheduled principal and interest payments. Impairment is measured based on the present value of expected cash flows discounted at the loan’s effective interest rate, or as a practical expedient, Lakeland may measure impairment based on a loan’s observable market price, or the fair value of the collateral, less estimated costs to sell, if the loan is collateral-dependent. Regardless of the measurement method, Lakeland measures impairment based on the fair value of the collateral when it is determined that foreclosure is probable. Most of Lakeland’s impaired loans are collateral-dependent. Shortfalls in collateral or cash flows are charged-off or specifically reserved for in the period the short-fall is identified. Charge-offs are recommended by the Chief Credit Officer and approved by the Board. Lakeland groups impaired commercial loans under $500,000 into homogeneous pools and collectively evaluates them. Interest received on impaired loans and leases may be recorded as interest income. However, if management is not reasonably certain that an impaired loan and lease will be repaid in full, or if a specific time frame to resolve full collection cannot yet be reasonably determined, all payments received are recorded as reductions of principal. Purchased Credit-Impaired (“PCI”) loans are loans acquired through acquisition or purchased at a discount that is due, in part, to credit quality. PCI loans are accounted for in accordance with ASC Subtopic 310-30 and are initially recorded at fair value (as determined by the present value of expected future cash flows) with no valuation allowance (i.e., the allowance for loan losses). The difference between the undiscounted cash flows expected at acquisition and the initial carrying amount (fair value) of the covered loans, or the “accretable yield,” is recognized as interest income utilizing the level-yield method over the life of the loans. Contractually required payments for interest and principal that exceed the undiscounted cash flows expected at acquisition, or the “non-accretable difference,” are not recognized as a yield adjustment, as a loss accrual or a valuation allowance. Reclassifications of the non-accretable difference to the accretable yield may occur subsequent to the loan acquisition dates due to increases in expected cash flows of the loans and results in an increase in yield on a prospective basis. Subsequent to acquisition date, further credit deterioration of a PCI loan will result in a valuation allowance recognized in the allowance for loan and lease losses. Loans are classified as troubled debt restructured loans ("TDRs") in cases where borrowers experience financial difficulties and Lakeland makes certain concessionary modifications to contractual terms. Restructured loans typically involve a modification of terms such as a reduction of the stated interest rate, an extended moratorium of principal payments and/or an extension of the maturity date at a stated interest rate lower than the current market rate for a new loan with similar risk. Nonetheless, restructured loans are classified as impaired loans. If a loan has been restructured, it will continue to be classified as a TDR until it is fully repaid or until it meets all of the following criteria: 1) the borrower is no longer experiencing financial difficulties, 2) the rate is not less than the rate provided for similar credit risk, 3) other terms are no less favorable than similar new debt and 4) no concessions were granted. The allowance for loan and lease losses is the estimated amount considered necessary to cover probable and reasonably estimable incurred losses inherent in the loan portfolio at the balance sheet date. In determining the allowance, we make significant estimates and judgments, and, therefore, have identified the allowance as a critical accounting policy. The allowance is established through a provision for loan and lease losses charged against income. Loan principal considered to be uncollectible by management is charged against the allowance. The allowance for loan and lease losses has been determined in accordance with U.S. GAAP. We are responsible for the timely and periodic determination of the amount of the allowance required. We believe that our allowance is adequate to cover identifiable losses, as well as estimated losses inherent in our portfolio for which certain losses are probable but not specifically identifiable. The determination of the adequacy of the allowance for loan and lease losses and the periodic provisioning for estimated losses included in the consolidated financial statements is the responsibility of management and the Board of Directors. Management performs a formal quarterly evaluation of the allowance for loan and lease losses. This quarterly process is performed by the credit administration department and approved by the Chief Credit Officer. All supporting documentation with regard to the evaluation process is maintained by the credit administration department. Each quarter, the evaluation along with the supporting documentation is reviewed by the finance department before approval by the Chief Credit Officer. The allowance evaluation is then presented to an Allowance for Loan and Lease Losses committee, which gives final approval to the allowance evaluation before being presented to the Board of Directors for their approval. Additionally, the Company continually evaluates, through its governance process, the development of the allowance for loan and lease losses methodology. During the third quarter of 2017, the Company refined and enhanced its quantitative framework by implementing loss migration periods to determine historical loss rates. It also enhanced its qualitative framework to complement the loss migration historical loss rates. These enhancements were implemented to increase the level of precision in the allowance for loan and lease losses and did not result in a material change in the required allowance for loan and lease losses. The methodology employed for assessing the adequacy of the allowance consists of the following criteria:
The establishment of reserve amounts for pools of homogeneous loans and leases are based upon the determination of historical loss rates, which are adjusted to reflect current conditions through the use of qualitative factors. The qualitative factors considered by the Company includes an evaluation of the results of the Company’s independent loan review function, the Company's reporting capabilities, the adequacy and expertise of Lakeland’s lending staff, underwriting policies, loss histories, trends in the portfolio, delinquency trends, economic and business conditions and capitalization rates. Since many of Lakeland’s loans depend on the sufficiency of collateral as a secondary source of repayment, any adverse trends in the real estate market could affect the underlying values available to protect Lakeland from losses. Additionally, management determines the loss emergence periods for each loan segment, which are used to define loss migration periods and establish appropriate ranges for qualitative adjustments for each loan segment. The loss emergence period is the estimated time from the date of a loss event (such as a personal bankruptcy) to the actual recognition of the loss (typically via the first partial or full loan charge-off), and is determined based upon a study of our past loss experience by loan segment. All of the factors considered in the analysis of the adequacy of the allowance for loan and lease losses may be subject to change. To the extent actual outcomes differ from management estimates, additional provisions for loan and lease losses may be required that would adversely impact earnings in future periods. A loan that management designates as impaired is reviewed for charge-off when it is placed on non-accrual status with a resulting charge-off if the loan is not secured by collateral having sufficient liquidation value to repay the loan if the loan is collateral dependent or charged off if deemed uncollectible. For a loan that is not collateral dependent, a reserve may be established for any shortfall in expected cash flows. Charge-offs are recommended by the Chief Credit Officer and approved by the Board. Loans Held for Sale Mortgage loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or estimated fair value. Gains and losses on sales of loans are specifically identified and accounted for in accordance with U.S. GAAP which requires that an entity engaged in mortgage banking activities classify the retained mortgage-backed security or other interest, which resulted from the securitization of a mortgage loan held for sale, based upon its ability and intent to sell or hold these investments. Premises and Equipment, Net Premises and equipment, including leasehold improvements, are stated at cost less accumulated depreciation. Depreciation expense is computed on the straight-line method over the estimated useful lives of the assets. Leasehold improvements are depreciated over the shorter of the estimated useful lives of the improvements or the terms of the related leases. Other Real Estate Owned and Other Repossessed Assets Other real estate owned (OREO) and other repossessed assets, representing property acquired through foreclosure (or deed-in-lieu-of-foreclosure), are carried at fair value less estimated disposal costs of the acquired property. Costs relating to holding the assets are charged to expense. An allowance for OREO or other repossessed assets is established, through charges to expense, to maintain properties at fair value less estimated costs to sell. Operating results of OREO and other repossessed assets, including rental income and operating expenses, are included in other expenses. Mortgage Servicing Lakeland performs various servicing functions on loans owned by others. A fee, usually based on a percentage of the outstanding principal balance of the loan, is received for these services. At December 31, 2018 and 2017, Lakeland was servicing approximately $19.9 million and $23.0 million, respectively, of loans for others. Lakeland originates certain mortgages under a definitive plan to sell or securitize those loans and service the loans owned by the investor. Upon the transfer of the mortgage loans in a sale or a securitization, Lakeland records the servicing assets retained. Lakeland records mortgage servicing rights and the loans based on relative fair values at the date of origination and evaluates the mortgage servicing rights for impairment at each reporting period. Lakeland also originates loans that it sells to other banks and investors and does not retain the servicing rights. Mortgage Servicing Rights When mortgage loans are sold with servicing retained, servicing rights are initially recorded at fair value with the income statement effect recorded in gains on sales of loans. Fair value is based on market prices for comparable mortgage servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income. All classes of servicing assets are subsequently measured using the amortization method which requires servicing rights to be amortized into noninterest income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans. As of December 31, 2018 and 2017, Lakeland had originated mortgage servicing rights of $68,000 and $88,000, respectively. Under the amortization measurement method, Lakeland subsequently measures servicing rights at fair value at each reporting date and records any impairment in value of servicing assets in earnings in the period in which the impairment occurs. The fair values of servicing rights are subject to fluctuations as a result of changes in estimated and actual prepayment speeds and default rates and losses. Servicing fee income, which is reported on the income statement as commissions and fees, is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of the outstanding principal or a fixed amount per loan, and are recorded as income when earned. Transfers of Financial Assets Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, put presumptively beyond the reach of the transferor and its creditors even in bankruptcy or other receivership, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity or the ability to unilaterally cause the holder to return specific assets. Derivatives Lakeland enters into interest rate swaps (“swaps”) with loan customers to provide a facility to mitigate the fluctuations in the variable rate on the respective loans. These swaps are matched in offsetting terms to swaps that Lakeland enters into with an outside third party. The swaps are reported at fair value in other assets or other liabilities. Lakeland’s swaps qualify as derivatives, but are not designated as hedging instruments, thus any net gain or loss resulting from changes in the fair value is recognized in other noninterest income. The credit risk associated with derivatives executed with customers is similar as that involved in extending loans and is subject to normal credit policies. Collateral is obtained based on management’s assessment of the customer. The positions of customer derivatives are recorded at fair value and changes in value are included in noninterest income on the consolidated statement of income. Cash flow hedges are used primarily to minimize the variability in cash flows of assets or liabilities, or forecasted transactions caused by interest rate fluctuations. Changes in the fair value of derivatives designated as cash flow hedges are recorded in accumulated other comprehensive income and are reclassified into the line item in the income statement in which the hedged item is recorded in the same period the hedged item affects earnings. Hedge ineffectiveness and gains and losses on the component of a derivative excluded in assessing hedge effectiveness are recorded in the same income statement line item. Further discussion of Lakeland’s financial derivatives is set forth in Note 19 to the Consolidated Financial Statements. Earnings Per Share Earnings per share is calculated on the basis of the weighted average number of common shares outstanding during the year. Basic earnings per share excludes dilution and is computed by dividing income available to common shareholders by the weighted average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock. Employee Benefit Plans The Company has certain employee benefit plans covering substantially all employees. The Company accrues such costs as incurred. We recognize the overfunded or underfunded status of pension and postretirement benefit plans in accordance with U.S. GAAP. Actuarial gains and losses, prior service costs or credits, and any remaining transition assets or obligations are recognized as a component of Accumulated Other Comprehensive Income, net of tax effects, until they are amortized as a component of net periodic benefit cost. Comprehensive Income (Loss) The Company reports comprehensive income (loss) in addition to net income from operations. Other comprehensive income (loss) includes items recorded directly in equity such as unrealized gains or losses on securities available for sale as well as unrealized gains (losses) recorded on derivatives and benefit plans. Goodwill and Other Identifiable Intangible Assets Goodwill is presumed to have an indefinite useful life and is tested, at least annually, for impairment at the reporting unit level. Impairment exists when the carrying amount of goodwill exceeds its implied fair value. For purposes of our goodwill impairment testing, we have identified a single reporting unit, community banking. U.S. GAAP permits an entity to make a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the two-step goodwill impairment test. The Company completed its annual qualitative assessment as of November 30, 2018 and concluded that there was less than a 50% probability that the fair value of the reporting unit is less than its carrying amount and, therefore, the two-step goodwill impairment test was not required. Bank Owned Life Insurance Lakeland invests in bank owned life insurance (“BOLI”). BOLI involves the purchasing of life insurance by Lakeland on a chosen group of employees. Lakeland is the owner and beneficiary of the policies. At December 31, 2018 and 2017, Lakeland had $110.1 million and $107.5 million, respectively, in BOLI. Income earned on BOLI was $3.3 million, $2.4 million and $2.6 million for the years ended December 31, 2018, 2017 and 2016, respectively. BOLI is accounted for using the cash surrender value method and is recorded at its net realizable value. Income Taxes The Company accounts for income taxes under the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities as measured by the enacted tax rates that will be in effect when these differences reverse. Deferred tax expense is the result of changes in deferred tax assets and liabilities. The principal types of differences between assets and liabilities for financial statement and tax return purposes are allowance for loan and lease losses, core deposit intangibles, deferred loan fees and deferred compensation. Variable Interest Entities Management has determined that Lakeland Bancorp Capital Trust II and Lakeland Bancorp Capital Trust IV (collectively, “the Trusts”) qualify as variable interest entities. The Trusts issued mandatorily redeemable preferred stock to investors and loaned the proceeds to the Company. The Trusts hold, as their sole asset, subordinated debentures issued by the Company. The Company is not considered the primary beneficiary of the Trusts, therefore the Trusts are not consolidated in the Company’s financial statements. The Company’s maximum exposure to the Trusts is $30.0 million at December 31, 2018 which is the Company’s liability to the Trusts and includes the Company’s investment in the Trusts. The Federal Reserve has issued guidance on the regulatory capital treatment for the trust preferred securities issued by the Trusts. The rule retains the current maximum percentage of total capital permitted for trust preferred securities at 25%, but enacts other changes to the rules governing trust preferred securities that affect their use as part of the collection of entities known as “restricted core capital elements.” The rule allows bank holding companies to continue to count trust preferred securities as Tier 1 Capital. The Company’s capital ratios continue to be categorized as “well-capitalized” under the regulatory framework for prompt corrective action. Under the Collins Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act, any new issuance of trust preferred securities by the Company would not be eligible as regulatory capital. New Accounting Pronouncements In August 2018, the Financial Accounting Standards Board ("FASB") issued an update to improve the effectiveness of fair value measurement disclosures. Among other provisions, the update removes requirements to disclose amounts and reasons of transfers between Level 1 and Level 2 in the fair value hierarchy, and it modifies the disclosures regarding transfers in and out of Level 3 of the fair value hierarchy. The update requires a discussion regarding the change in unrealized gains and losses included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period, and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2019. Because the Company does not typically have Level 3 fair value measurements, the update is expected to have an insignificant impact on the Company's financial statements. In August 2018, the FASB issued an update which aligns the requirements for capitalizing implementation costs in a cloud-computing arrangement service contract with the requirements for capitalizing implementation costs incurred for an internal-use software license. Implementation costs incurred by customers in a cloud computing arrangement are to be deferred and recognized over the term of the arrangement, if those costs would be capitalized by the customer in a software licensing arrangement under the internal-use software guidance. This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2019. The Company is currently assessing the impact that the guidance will have on its financial statements. In August 2018, the FASB issued an update which changes the disclosure of accounting and reporting requirements related to single-employer defined benefit pension or other postretirement benefit plans. The amendments in the update remove disclosures that are no longer considered cost-beneficial, clarify the specific requirements of disclosures and add disclosure requirements identified as relevant. For calendar-year public companies, the changes will be effective for annual periods, including interim periods within those annual periods, in 2020. Because the Company has minimal pension plan provisions that require calculation of projected benefit obligations or accumulated benefit obligations, the update is expected to have an insignificant impact on the Company's financial statements. In June 2018, the FASB issued an update expanding earlier guidance on stock compensation to include share-based payments issued to nonemployees for goods and services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially the same. This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2018. Earlier adoption is permitted. The adoption of this update had an insignificant impact on the Company's financial statements. In March 2018, the FASB issued an update regarding the accounting implications of the Tax Cuts and Jobs Act (the "Tax Act"). The update clarifies that in a company's financial statements that include the reporting period in which the Tax Act was enacted, a company must first reflect the income tax effects of the Tax Act in which the accounting under U.S. GAAP is complete. Those amounts would not be provisional amounts. The company would also report provisional amounts for those specific income tax effects for which the accounting under U.S. GAAP will be incomplete but for which a reasonable estimate can be determined. If there are income tax effects for the Tax Act for which a reasonable estimate cannot be determined, the company would not report provisional amounts and would continue to apply U.S. GAAP based on the tax laws that were in effect immediately prior to the Tax Act being enacted. This accounting update is effective immediately. The Company believes its accounting for the income tax effects of the Tax Act is complete. Technical corrections or other forthcoming guidance could change how we interpret provisions of the Tax Act, which may impact our effective tax rate and could affect our deferred tax assets, tax positions and/or our tax liabilities. In February 2018, the FASB issued an update regarding the reclassification of certain tax effects from accumulated other comprehensive income. This update requires a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the newly enacted federal corporate tax rate. The amount of the reclassification would be the difference between the historical 35% corporate income tax rate and the newly enacted 21% corporate tax rate. This update eliminates the stranded tax effects associated with the change in the federal corporate income tax rate in the Tax Act and improves the usefulness of information reported to financial statement users. The amendments are effective for all entities for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption of the amendments is permitted including adoption in any interim period, for public business entities for reporting periods for which financial statements have not yet been issued and all other entities for reporting periods for which financial statements have not yet been made available for issuance. An entity may apply the amendments in the update retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Act is recognized. The Company elected to adopt this update in December 2017 and recorded a $420,000 increase to retained earnings and reduction to accumulated other comprehensive income. In August 2017, the FASB issued an update intended to improve and simplify accounting rules around hedge accounting. Amendments expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. The amendments in this update also make certain targeted improvements to simplify the application of hedge accounting guidance and ease the administrative burden of hedge documentation requirements and assessing hedge effectiveness. In October 2018, the FASB issued an update to permit the use of the Overnight Index Swap ("OIS") rate based on the Secured Overnight Financing Rate ("SOFR") as a benchmark interest rate for hedge accounting purposes. These updates will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2018. The adoption of this update had an insignificant impact on the Company's financial statements. In July 2017, the FASB issued guidance which simplifies the accounting for certain financial instruments with down round features, a provision in an equity-linked financial instrument (or embedded feature) that provides a downward adjustment of the current exercise price based on the price of future equity offerings. The provisions of the new guidance related to down rounds are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company has no equity-linked financial instruments that have such down round features, therefore the adoption of this update had an insignificant impact on the Company's financial statements. In May 2017, the FASB issued an update which provides clarity and reduces diversity in practice when accounting for the modification of terms and conditions for share-based payment awards. Previous accounting guidance did not distinguish between modifications which were substantive from modifications that were merely administrative. The accounting standards update requires entities to account for the effects of a modification unless the following three conditions are met: the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified; the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. This update is effective for annual and interim periods beginning after December 15, 2017. The adoption of this update had an insignificant impact on the Company’s financial statements. In March 2017, the FASB issued an update which shortens the amortization period for certain callable debt securities held at a premium to the earliest call date. Under current GAAP, entities amortize the premium as an adjustment of yield over the contractual life of the instrument even if the holder is certain that the call will be exercised. As a result, upon the exercise of a call on a callable debt security held at a premium, the unamortized premium is recorded as a loss in earnings. The update shortens the amortization period for certain callable debt securities held at a premium and requires the premium be amortized to the earliest call date. This update will be effective for annual and interim periods beginning after December 15, 2018. Entities are required to apply the amendments on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The adoption of this update had an insignificant impact on the Company’s financial statements. In March 2017, the FASB issued an update which changes the presentation of net periodic pension cost and net periodic postretirement benefit cost in a company’s income statement. The amendment requires that an employer report the service cost component in the same line item as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. The amendment is effective for annual and interim periods beginning after December 15, 2017. Because the Company has minimal benefit plan provisions that require the measurement of net periodic pension cost and net periodic postretirement benefit cost, the adoption of this update had an insignificant impact on the Company’s financial statements. In January 2017, the FASB issued an update to simplify the test for goodwill impairment. This amendment eliminates Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. This update will be effective for the Company’s financial statements for annual years beginning after December 15, 2019. The adoption of this update is expected to have an insignificant impact on the Company’s financial statements. In January 2017, the FASB issued an update that clarifies the definition of a business as it pertains to business combinations. This amendment affects all companies and other reporting organizations that must determine whether they have sold or acquired a business. This update is effective for the Company’s financial statements for fiscal years beginning after December 15, 2017. The adoption of this update had an insignificant impact on the Company’s financial statements. In September 2016, the FASB issued an accounting standards update to address diversity in presentation in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This update is effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2017. The adoption of this update had an insignificant impact on the Company’s consolidated balance sheet or statement of income. In June 2016, the FASB issued an accounting standards update pertaining to the measurement of credit losses on financial instruments. This update requires the measurement of all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. This update is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2019. The Company is currently evaluating its existing systems and data to support the new standard as well as assessing the impact that the guidance will have on the Company's consolidated financial statements. The Company has formed a working group under the direction of the Chief Risk Officer that is comprised of individuals from the credit, risk management, finance and project management areas for implementation of this update. In early 2018, the Company contracted with a software and advisory service provider to aid in implementation. The Company continues to work with this service provider in assessing its data and preparing for implementation. In November 2018, the FASB issued additional codification improvements which clarified that operating leases are not part of the credit losses standard, but rather, should be accounted for in accordance with the leases standard. In February 2016, FASB issued accounting guidance that requires all lessees to recognize a lease liability and a right-of-use asset, measured at the present value of the future minimum lease payments, at the lease commencement date. Lessor accounting remains largely unchanged under the new guidance. The guidance is effective for fiscal years beginning after December 15, 2018, including interim reporting periods within that reporting period, with early adoption permitted. A modified retrospective approach must be applied for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. In the third quarter of 2018, the FASB issued updates which included targeted improvements to the leasing guidance that is intended to reduce costs and ease implementation of the leases standard. The improvements include an optional transition method to adopt the new leases standard where the entity could initially apply the new leases standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. Consequently, an entity's reporting for comparative periods presented in the financial statements in which it adopts the new leases standard, will continue to be in accordance with current GAAP in topic 840, Leases. An entity that adopts this additional transition method, must provide the required disclosures for all periods that continue to be in accordance with the current GAAP in Topic 840. The lease update also includes a practical expedient, by class of underlying asset, to not separate nonlease components from the associated lease component and, instead, to account for these components as a single component if the nonlease components otherwise would be accounted for under the new revenue guidance and both of the following conditions are met: 1) the timing and pattern of transfer of the nonlease component(s) and associated lease component are the same, and 2) the lease component, if accounted for separately, would be classified as an operating lease. The Company is adopting the ASUs related to Leases as of January 1, 2019. The Company reviewed its existing lease contracts and service contracts that may include embedded leases. The Company retained the services of a software provider to aid in implementation with the oversight of management. Management identified the complete population of contracts that would be required to be assessed under this standard. Management has elected the transition practical expedient option, which allowed us not to reassess 1) whether any contracts are or contain embedded leases; 2) the lease classification for any leases; and 3) whether initial direct costs meet the new definition, as of the initial adoption date. From the lessee perspective, no embedded leases were identified and we will recognize upon adoption, a Right of Use ("ROU") asset and a lease liability primarily related to real estate leases existing on January 1, 2019. Management is in process of completing its assessment which includes assessment of the leases from the Highlands Bancorp. Inc. acquisition which occurred early in first quarter 2019. In January 2016, the FASB issued an accounting standards update intended to improve the recognition and measurement of financial instruments. Specifically, the accounting standards update requires all equity instruments, with the exception of those that are accounted for under the equity method of accounting, to be measured at fair value with changes in the fair value recognized through net income. Additionally, public business entities are required to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. The amendments in this update also require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In February 2018, the FASB issued further guidance that provided technical corrections to this update. Those technical corrections included clarification on accounting for equity securities without a readily determinable fair value, remeasurement requirements on forward contracts and purchased options, and presentation requirements for certain fair value option liabilities. This amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The adoption of this update required an adjustment on January 1, 2018 from other comprehensive income to retained earnings for the amount of the unrealized gain on equity securities as of December 31, 2017. Thereafter, any increases or decreases to the market value on these equity securities will be recorded through the consolidated statements of income. Please see the Consolidated Statement of Changes in Stockholders' Equity, Note 4 - Investment Securities and Note 17 - Comprehensive Income (Loss) for more information. In May 2014, the FASB issued an accounting standards update that clarifies the principles for recognizing revenue. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to a customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for these goods or services. To achieve that core principle, an entity should apply the following steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. In 2016, the FASB issued further implementation guidance regarding revenue recognition. This additional guidance included clarification on certain principal versus agent considerations within the implementation of the guidance as well as clarification related to identifying performance obligations and licensing. The guidance also requires new qualitative and quantitative disclosures, including disaggregation of revenues and descriptions of performance obligations. The guidance along with its updates is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. In evaluating this standard, management has determined that the majority of revenue earned by the Company is from revenue streams not included in the scope of this standard. The Company has assessed its revenue streams and reviewed contracts potentially affected by the guidance including deposit related fees, interchange fees, investment commissions, merchant fee income and other noninterest income sources to determine the potential impact the new guidance is expected to have on the Company’s consolidated financial statements. The Company adopted the guidance on January 1, 2018 using the modified retrospective method. The Company did not have a cumulative-effect adjustment to opening retained earnings as a result of adopting this standard. Please see Note 14 - Revenue Recognition for more information. |
Acquisitions |
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Business Combinations [Abstract] | |
Acquisitions | ACQUISITIONS Highlands Bank On January 4, 2019, the Company completed its acquisition of Highlands Bancorp, Inc. ("Highlands"), a bank holding company headquartered in Vernon, New Jersey. Highlands was the parent of Highlands State Bank, which operated four branches in Sussex, Passaic and Morris Counties in New Jersey. This acquisition enabled the Company to broaden its presence in those counties. Effective as of the close of business on January 4, 2019, Highlands merged into the Company and Highlands State Bank merged into Lakeland. Pursuant to the merger agreement, the shareholders of Highlands received for each outstanding share of Highlands common stock that they owned at the effective time of the merger, 1.015 shares of Lakeland Bancorp, Inc. common stock. The Company issued 2,837,524 shares of its common stock in the merger. Outstanding Highlands options were paid out in cash at the difference between $14.71 and an average strike price of $8.09 for a total cash payment of $797,000. As of January 4, 2019, Highlands had total assets, total loans, total deposits and total capital of $480.8 million, $438.3 million, $408.8 million and $31.2 million, respectively. The acquisition was accounted for under the acquisition method of accounting and accordingly, the assets acquired and liabilities assumed in the acquisition were recorded at their estimated fair values as of the acquisition date. Highlands' assets were recorded at their preliminary estimated fair values as of January 4, 2019 and Highlands' results of operations will be included in the Company's Consolidated Statements of Income from that date forward. Harmony Bank On July 1, 2016, the Company completed its acquisition of Harmony Bank (“Harmony”), a bank located in Ocean County, New Jersey. This merger allowed the Company to expand its presence to Ocean County. The acquisition was accounted for under the acquisition method of accounting and accordingly, the assets acquired and liabilities assumed in the acquisition were recorded at their estimated fair values based on management’s best estimates using information available at the date of the acquisition, including the use of a third party valuation specialist. Harmony's results of operations have been included in the Company's Consolidated Statements of Income since July 1, 2016. Pascack Bancorp On January 7, 2016, the Company completed its acquisition of Pascack Bancorp, Inc. (“Pascack”), a bank holding company headquartered in Waldwick, New Jersey. Pascack was the parent of Pascack Community Bank, which operated 8 branches in Bergen and Essex Counties in New Jersey. This acquisition enabled the Company to broaden its presence in Bergen and Essex counties. The acquisition was accounted for under the acquisition method of accounting. Accordingly, the assets acquired and liabilities assumed in the acquisition were recorded at their estimated fair values based on management’s best estimates using information available at the date of the acquisition, including the use of a third party valuation specialist. Pascack's results of operations have been included in the Company's Consolidated Statements of Income since January 7, 2016. Direct costs related to the Highlands, Pascack and Harmony acquisitions were expensed as incurred. During the years ended December 31, 2018 and 2016, the Company incurred $464,000 and $4.1 million, respectively, of merger and acquisition integration-related expenses, which have been separately stated in the Company’s Consolidated Statements of Income. There were no merger or acquisition integration-related expenses in 2017. |
Earnings Per Share |
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Earnings Per Share | EARNINGS PER SHARE The Company uses the two class method to compute earnings per common share. Participating securities include non-vested restricted stock and non-vested restricted stock units. The following tables present the computation of basic and diluted earnings per share for the periods presented.
There were no antidilutive options to purchase common stock to be excluded from the above computations. |
Investment Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Securities | INVESTMENT SECURITIES The amortized cost, gross unrealized gains and losses and the fair value of the Company’s available for sale and held to maturity investment securities are as follows:
The following table lists contractual maturities of investment securities classified as available for sale and held to maturity at December 31, 2018. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
The following table shows proceeds from sales of securities, gross gains and gross losses on sales and calls of securities for the periods indicated:
Gains or losses on sales of securities are based on the net proceeds and the adjusted carrying amount of the securities sold using the specific identification method. Securities with a carrying value of approximately $476.3 million and $400.4 million at December 31, 2018 and 2017, respectively, were pledged to secure public deposits and for other purposes required by applicable laws and regulations. The following tables indicates the length of time individual securities have been in a continuous unrealized loss position at December 31, 2018 and 2017:
Management has evaluated the securities in the above table and has concluded that none of the securities with unrealized losses has impairments that are other-than-temporary. Fair value below cost is solely due to interest rate movements and is deemed temporary. Investment securities, including the mortgage-backed securities and corporate securities, are evaluated on a periodic basis to determine if factors are identified that would require further analysis. In evaluating the Company’s securities, management considers the following items:
If the above factors indicate an additional analysis is required, management will perform a discounted cash flow analysis evaluating the security. Equity securities at fair value The Company has an equity securities portfolio, which consists of investments in other financial institutions for market appreciation purposes and investments in Community Reinvestment funds. The market value of these investments was $15.9 million and $18.1 million as of December 31, 2018 and 2017, respectively. Upon implementation of Accounting Standards Update 2016-01 - Financial Instruments ("ASU 2016-01"), the Company made a cumulative adjustment of $2.0 million from other comprehensive income to retained earnings as of January 1, 2018. In the twelve months ended December 31, 2018, the Company recorded $583,000 in market value loss on equity securities in noninterest income. As of December 31, 2018, the equity investments in other financial institutions and Community Reinvestment funds had a market value of $2.7 million and $13.2 million, respectively. The Community Reinvestment funds include $3.5 million that are primarily invested in community development loans that are guaranteed by the Small Business Administration ("SBA"). Because the funds are primarily guaranteed by the federal government there are minimal changes in market value between accounting periods. These funds can be redeemed within 60 days' notice at the net asset value less unpaid management fees with the approval of the fund manager. As of December 31, 2018, the net amortized cost equaled the market value of the investment. There are no unfunded commitments related to these investments. The Community Reinvestment funds also include funds that are invested in government guaranteed loans, mortgage-backed securities, small business loans and other instruments supporting affordable housing and economic development. The Company may redeem these funds at the net asset value calculated at the end of the current business day less any unpaid management fees. As of December 31, 2018, the amortized cost of these securities was $10.4 million and the fair value was $9.7 million. There are no restrictions on redemptions for the holdings in these investments other than the notice required by the fund manager. There are no unfunded commitments related to this investment. |
Loans and Leases and Other Real Estate |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans and Leases and Other Real Estate | LOANS AND LEASES AND OTHER REAL ESTATE The following sets forth the composition of Lakeland’s loan and lease portfolio:
At December 31, 2018 and December 31, 2017, Lakeland had $1.2 billion and $1.1 billion in loans pledged for potential borrowings at the Federal Home Loan Bank of New York (“FHLB”). As of December 31, 2018 and 2017, home equity and consumer loans included overdraft deposit balances of $452,000 and $966,000, respectively. Purchased Credit Impaired Loans The carrying value of loans acquired in the Pascack acquisition and accounted for in accordance with ASC Subtopic 310-30, “Loans and Debt Securities Acquired with Deteriorated Credit Quality,” was $157,000 at December 31, 2018, which was $661,000 less than the balance at the time of acquisition on January 7, 2016. In the first quarter of 2017, one of the Pascack purchased credit impaired ("PCI") loans totaling $127,000 experienced further credit deterioration and was fully charged off. Also in the second quarter of 2017, one of the Pascack PCI loans totaling $218,000 was fully paid off. The carrying value of loans acquired in the Harmony acquisition was $495,000 at December 31, 2018 which was $274,000 less than the balance at the acquisition date on July 1, 2016. In the second quarter of 2017, a Harmony PCI loan with a net value of $247,000 was fully paid off. Under ASC Subtopic 310-30, PCI loans may be aggregated and accounted for as pools of loans if the loans being aggregated have common risk characteristics. The Company elected to account for the loans with evidence of credit deterioration individually rather than aggregate them into pools. The following table presents changes in the accretable yield for PCI loans (in thousands):
Portfolio Segments Lakeland currently manages its credit products and the respective exposure to credit losses (credit risk) by the following specific portfolio segments which are levels at which Lakeland develops and documents its systematic methodology to determine the allowance for loan and lease losses attributable to each respective portfolio segment. These segments are:
Non-accrual and Past Due Loans The following schedule sets forth certain information regarding Lakeland’s non-accrual loans and leases, its other real estate owned and other repossessed assets, and accruing troubled debt restructurings (“TDRs”) (in thousands):
Non-accrual loans included $3.6 million and $2.7 million of TDRs for the years ended December 31, 2018 and 2017, respectively. As of December 31, 2018, the Company had $1.5 million in residential mortgages and consumer home equity loans included in the table above that were in the process of foreclosure. An age analysis of past due loans, segregated by class of loans as of December 31, 2018 and 2017, is as follows:
Impaired Loans Lakeland’s policy regarding impaired loans is discussed in Note 1 – Summary of Accounting Policies – Loans and Leases and Allowance for Loan and Lease Losses. The Company defines impaired loans as all non-accrual loans with recorded investments of $500,000 or greater. Impaired loans also includes all loans modified in troubled debt restructurings. The following tables represent the Company's impaired loans at December 31, 2018, 2017 and 2016.
Interest which would have been accrued on impaired loans and leases during 2018, 2017 and 2016 was $1.1 million, $1.5 million and $1.7 million, respectively. Credit Quality Indicators The class of loans are determined by internal risk rating. Management closely and continually monitors the quality of its loans and leases and assesses the quantitative and qualitative risks arising from the credit quality of its loans and leases. It is the policy of Lakeland to require that a Credit Risk Rating be assigned to all commercial loans and loan commitments. The Credit Risk Rating System has been developed by management to provide a methodology to be used by Loan Officers, Department Heads and Senior Management in identifying various levels of credit risk that exist within Lakeland’s loan portfolios. The risk rating system assists Senior Management in evaluating Lakeland’s loan portfolio, analyzing trends and determining the proper level of required reserves to be recommended to the Board. In assigning risk ratings, management considers, among other things, a borrower’s debt service coverage, earnings strength, loan to value ratios, industry conditions and economic conditions. Management categorizes loans and commitments into a one (1) to nine (9) numerical structure with rating 1 being the strongest rating and rating 9 being the weakest. Ratings 1 through 5W are considered “Pass” ratings. “Pass” ratings on loans are given to loans that management considers to be of acceptable or better quality. A rating of 5W, or “Watch” is a loan that requires more than the usual amount of monitoring due to declining earnings, strained cash flow, increasing leverage and/or weakening market. These borrowers generally have limited additional debt capacity and modest coverage and average or below average asset quality, margins and market share. Rating 6, “Other Assets Especially Mentioned” is used for loans exhibiting identifiable credit weakness which if not checked or corrected could weaken the loan quality or inadequately protect the bank’s credit position at some future date. Rating 7, “Substandard,” is used on loans that are inadequately protected by the current sound worth and paying capacity of the obligors or of the collateral pledged, if any. A substandard loan has a well-defined weakness or weaknesses that may jeopardize the liquidation of the debt. Rating 8, “Doubtful,” are loans that exhibit all of the weaknesses inherent in substandard loans, but have the added characteristics that the weaknesses make collection or liquidation in full improbable on the basis of existing facts. Rating 9, “Loss,” is a rating for loans or portions of loans that are considered uncollectible and of such little value that their continuance as bankable loans is not warranted. The following table shows Lakeland’s commercial loan portfolio as of December 31, 2018 and 2017, by the risk ratings discussed above (in thousands):
This table does not include residential mortgage loans, consumer loans, or leases because they are evaluated on their payment status as pass or substandard, which is defined as non-accrual or past due 90 days or more. Allowance for Loan and Lease Losses The following table details activity in the allowance for loan and lease losses by portfolio segment and the related recorded investment in loans and leases for the years ended December 31, 2018 and 2017:
Lakeland also maintains a reserve for unfunded lending commitments which are included in other liabilities. This reserve was $2.3 million and $2.5 million as of December 31, 2018 and December 31, 2017, respectively. Lakeland analyzes the adequacy of the reserve for unfunded lending commitments in conjunction with its analysis of the adequacy of the allowance for loan and lease losses. For more information on this analysis, see “Risk Elements” in Management’s Discussion and Analysis. Troubled Debt Restructurings Troubled Debt Restructurings ("TDRs") are those loans where significant concessions have been made to borrowers experiencing financial difficulties. Restructured loans typically involve a modification of terms such as a reduction of the stated interest rate lower than the current market rate of a new loan with similar risk, an extended moratorium of principal payments and/or an extension of the maturity date. Lakeland considers the potential losses on these loans as well as the remainder of its impaired loans when considering the adequacy of the allowance for loan losses. The following table summarizes loans and leases that have been restructured during the periods presented:
The following table presents loans and leases modified as TDRs within the previous 12 months from December 31, 2018 and 2017 that have defaulted during the subsequent twelve months:
Related Party Loans Lakeland has entered into lending transactions in the ordinary course of business with directors, executive officers, principal stockholders and affiliates of such persons on similar terms, including interest rates and collateral, as those prevailing for comparable transactions with other borrowers not related to Lakeland. At December 31, 2018 and 2017, loans to these related parties amounted to $53.1 million and $27.5 million, respectively. There were new loans of $18.7 million to related parties and repayments of $10.8 million from related parties in 2018. There was also a net addition of $17.7 million in existing loans for related party relationships that either commenced or ceased during 2018. Mortgages Held for Sale Residential mortgages originated by the bank and held for sale in the secondary market are carried at the lower of cost or fair market value. Fair value is generally determined by the value of purchase commitments on individual loans. Losses are recorded as a valuation allowance and charged to earnings. As of December 31, 2018, Lakeland had $1.1 million in mortgages held for sale compared to $456,000 as of December 31, 2017. Lease Receivables Future minimum lease payments of lease receivables are expected as follows (in thousands):
Other Real Estate and Other Repossessed Assets At December 31, 2018, Lakeland had other real estate and other repossessed assets of $830,000 and $0, respectively. The other real estate that the Company held at December 31, 2018 consisted of $702,000 in residential property acquired as a result of foreclosure proceedings or through a deed in lieu of foreclosure. At December 31, 2017, Lakeland had other real estate and other repossessed assets of $843,000 and $0, respectively. The other real estate that the Company held at December 31, 2017 consisted of $843,000 in residential property acquired as a result of foreclosure proceedings or through a deed in lieu of foreclosure. For the years ended December 31, 2018, 2017 and 2016, Lakeland had writedowns of $70,000, $98,000 and $0, respectively, on other real estate and other repossessed assets which are included in other real estate and repossessed asset expense in the Consolidated Statement of Income. |
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Premises and Equipment | PREMISES AND EQUIPMENT
Depreciation expense was $5.3 million, $5.0 million and $5.0 million for the years ended December 31, 2018, 2017 and 2016, respectively. |
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Time Deposits | TIME DEPOSITS At December 31, 2018, the schedule of maturities of certificates of deposit is as follows (in thousands):
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | DEBT Lines of Credit As a member of the Federal Home Loan Bank of New York ("FHLB"), Lakeland has the ability to borrow overnight based on the market value of collateral pledged. At both December 31, 2018 and 2017, there were no overnight borrowings from the FHLB. As of December 31, 2018, Lakeland also had overnight federal funds lines available for it to borrow up to $210.0 million. Lakeland borrowed $192.1 million and $80.0 million against these lines as of December 31, 2018 and 2017, respectively. Lakeland may also borrow from the discount window of the Federal Reserve Bank of New York based on the market value of collateral pledged. Lakeland had no borrowings with the Federal Reserve Bank of New York as of December 31, 2018 or 2017. Federal Funds Purchased and Securities Sold Under Agreements to Repurchase Short-term borrowings at December 31, 2018 and 2017 consisted of short-term securities sold under agreements to repurchase and federal funds purchased. Securities underlying the agreements were under Lakeland’s control. The following tables summarize information relating to securities sold under agreements to repurchase and federal funds purchased for the years presented. For purposes of the tables, the average amount outstanding was calculated based on a daily average.
Other Borrowings FHLB Debt At December 31, 2018, advances from the FHLB totaling $181.1 million, with a weighted average interest rate of 2.10%, will mature within 5 years. These advances are collateralized by certain securities and first mortgage loans. At December 31, 2017, advances from the FHLB totaling $172.0 million, with a weighted average interest rate of 1.69%, will mature within 4 years. These advances are collateralized by certain securities and first mortgage loans. FHLB debt matures as follows (in thousands):
In the first quarter of 2017, the Company repaid an aggregate of $34.0 million in advances from the FHLB and recorded $638,000 in long-term debt prepayment fees. Long-term Securities Sold Under Agreements to Repurchase At December 31, 2018, Lakeland had no long-term securities sold under agreements to repurchase compared to $20.0 million at December 31, 2017. In the second quarter of 2018, the Company repaid all of its $20.0 million in matured long-term securities sold under agreements to repurchase. These borrowings were collateralized by certain securities. The borrowings had a weighted average interest rate of 2.25% on December 31, 2017. In the first quarter of 2017, the Company repaid an aggregate of $20.0 million in long-term securities sold under agreements to repurchase and recorded $2.2 million in long-term debt prepayment fees. The above FHLB debt and long-term securities sold under agreements to repurchase are collateralized by certain securities. At times the market value of securities collateralizing our borrowings may decline due to changes in interest rates and may necessitate our lenders to issue a “margin call” which requires Lakeland to pledge additional securities to meet that margin call. As of December 31, 2018, the Company had $57.7 million in mortgage-backed securities pledged for its short-term securities sold under agreements to repurchase. Subordinated Debentures On September 30, 2016, the Company completed an offering of $75.0 million of fixed to floating rate subordinated notes due September 30, 2026. The notes will bear interest at a rate of 5.125% per annum until September 30, 2021 and will then reset quarterly to the then current three-month LIBOR plus 397 basis points until maturity in September 30, 2026, or their earlier redemption. The debt is included in Tier 2 capital for the Company. Debt issuance costs totaled $1.5 million and are being amortized to maturity. Subordinated debt is presented net of issuance costs on the consolidated balance sheet. In May 2007, the Company issued $20.6 million of junior subordinated debentures due August 31, 2037 to Lakeland Bancorp Capital Trust IV, a Delaware business trust. The distribution rate on these securities was 6.61% for 5 years and floats at LIBOR plus 152 basis points thereafter. The debentures are the sole asset of the Trust. The Trust issued 20,000 shares of trust preferred securities, $1,000 face value, for total proceeds of $20.0 million. The Company’s obligations under the debentures and related documents, taken together, constitute a full, irrevocable and unconditional guarantee on a subordinated basis by the Company of the Trust’s obligations under the preferred securities. The preferred securities are callable by the Company on or after August 1, 2012, or earlier if the deduction of related interest for federal income taxes is prohibited, treatment as Tier I capital is no longer permitted, or certain other contingencies arise. The preferred securities must be redeemed upon maturity of the debentures in 2037. On August 3, 2015, the Company acquired and extinguished $10.0 million of Lakeland Bancorp Capital Trust IV debentures and recorded a $1.8 million gain on the extinguishment of debt. In June 2003, the Company issued $20.6 million of junior subordinated debentures due June 30, 2033 to Lakeland Bancorp Capital Trust II, a Delaware business trust. The distribution rate on these securities was 5.71% for 5 years and floats at LIBOR plus 310 basis points thereafter. The debentures are the sole asset of the Trust. The Trust issued 20,000 shares of trust preferred securities, $1,000 face value, for total proceeds of $20.0 million. The Company’s obligations under the debentures and related documents, taken together, constitute a full, irrevocable and unconditional guarantee on a subordinated basis by the Company of the Trust’s obligations under the preferred securities. The preferred securities are callable by the Company on or after June 30, 2008, or earlier if the deduction of related interest for federal income taxes is prohibited, treatment as Tier I capital is no longer permitted, or certain other contingencies arise. The preferred securities must be redeemed upon maturity of the debentures in 2033. In June 2016, the Company entered into two cash flow swaps totaling $30.0 million in order to hedge the variable cash outflows associated with the junior subordinated debentures issued to Lakeland Capital Trust II and Lakeland Capital Trust IV. For more information please see Note 19 – Derivatives. |
Stockholders' Equity |
12 Months Ended |
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Dec. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | STOCKHOLDERS’ EQUITY On December 14, 2016, the Company successfully completed an at-the-market common stock issuance. A total of 2,739,650 shares of the Company’s common stock were sold at a weighted average price of $18.25, representing gross proceeds to the Company of approximately $50.0 million. Net proceeds from the transaction, after the sales commission and other expenses, were approximately $48.7 million. On July 1, 2016, the Company completed its acquisition of Harmony Bank, a bank located in Ocean County, New Jersey. Lakeland Bancorp issued an aggregate of 3,201,109 shares of its common stock in the merger. Outstanding Harmony stock options were paid out in cash at the difference between $14.31 (Lakeland’s closing stock price on July 1, 2016 of $11.45 multiplied by 1.25) and the average strike price of $9.07 for a total cash payment of $869,000. On January 7, 2016, the Company completed its acquisition of Pascack Bancorp, Inc. (“Pascack”), a bank holding company headquartered in Waldwick, New Jersey. Lakeland Bancorp issued 3,314,284 shares of its common stock in the merger and paid approximately $4.5 million in cash, including the cash paid in connection with the cancellation of Pascack stock options. Outstanding Pascack stock options were paid out in cash at the difference between $11.35 and an average strike price of $7.37 for a total cash payment of $122,000. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | INCOME TAXES The components of income taxes are as follows:
In July 2018, the State of New Jersey enacted changes to the tax law that were retroactive to the beginning of 2018. Included in these changes was a surcharge in addition to the corporate tax. The surcharge will be 2.5% for 2018 and 2019, 1.5% for 2020 and 2021, and will revert to no surcharge in 2022. In addition to the surcharge, New Jersey adopted the concept of combined (consolidated) tax filings under a unitary concept for corporations that are part of an affiliated group beginning in 2019. As of July 1, 2018, the Company revalued its deferred tax assets based on the additional surcharge and the combined tax filings. Based on this revaluation, the Company recorded an increase in its net deferred tax asset of $943,000 to reflect the change in the state tax rates among its subsidiaries. The Tax Cuts and Jobs Act was enacted on December 22, 2017, resulting in changes in the U.S. corporate tax rates, business-related exclusions, deductions and credits. Enactment of the Tax Cuts and Jobs Act requires the Company to reflect the changes associated with the law's provisions in its consolidated financial statements as of and for the year ended December 31, 2017. The Company recorded an increase in its net deferred tax asset of $1.3 million to reflect the reduction in the federal corporate income tax rate from 35% to 21%. During 2017, the Company implemented a tax planning strategy which resulted in an increase in deferred tax liabilities, a higher deferred tax provision and a $1.9 million excise tax recorded through current tax expense. Consequently, as a result of the Tax Cuts and Jobs Act being passed and the effect of the tax planning strategy, the net impact on the financial statements was $602,000 in additional tax expense. The income tax provision reconciled to the income taxes that would have been computed at the statutory federal rate of 21% for 2018 and 35% for both 2017 and 2016 is as follows:
The net deferred tax asset consisted of the following:
The Company evaluates the realizability of its deferred tax assets by examining its earnings history and projected future earnings and by assessing whether it is more likely than not that carryforwards would not be realized. Based upon the majority of the Company’s deferred tax assets having no expiration date, the Company’s earnings history, and the projections of future earnings, the Company’s management believes that it is more likely than not that all of the Company’s deferred tax assets as of December 31, 2018 will be realized. The Company evaluates tax positions that may be uncertain using a recognition threshold of more likely than not, and a measurement attribute for all tax positions taken or expected to be taken on a tax return, in order for those tax positions to be recognized in the financial statements. The Company had no unrecognized tax benefits or related interest or penalties at December 31, 2018 or 2017. The Company is subject to U.S. federal income tax law as well as income tax of various state jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. With few significant exceptions, the Company is no longer subject to U.S. federal examinations by tax authorities for the years before 2016 or to state and local examinations by tax authorities for the years before 2015. |
Employee Benefit Plans |
12 Months Ended |
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Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | EMPLOYEE BENEFIT PLANS Profit Sharing Plan The Company has a profit sharing plan for all its eligible employees. The Company’s discretionary annual contribution to the plan is determined by its Board of Directors. Annual contributions are allocated to participants on a point basis with accumulated benefits payable at retirement, or, at the discretion of the plan committee, upon termination of employment. There were no contributions made by the Company in 2018 or 2017, while contributions made by the Company totaled $600,000 for the year ended 2016. Benefit Obligations from Somerset Hills Acquisition Somerset Hills, acquired by the Company in 2013, entered into a non-qualified Supplemental Executive Retirement Plan (“SERP”) with its former Chief Executive Officer and its Chief Financial Officer which entitles them to a benefit of $48,000 and $24,000, respectively, per year for 15 years after the earlier of retirement or death. The former Chief Executive Officer and the beneficiary of the Chief Financial Officer are currently being paid out under the plan. As of December 31, 2018 and 2017, the Company had a liability of $629,000 and $702,000, respectively, for these SERPs and recognized an expense of $(1,000), $33,000 and $0 in 2018, 2017 and 2016, respectively. 401(k) plan The Company has a 401(k) plan covering substantially all employees providing they meet eligibility requirements. The Company matches 50% of the first 6% contributed by the participants to the 401(k) plan. The Company’s contributions in 2018, 2017 and 2016 totaled $1.1 million, $1.0 million and $911,000, respectively. Supplemental Executive Retirement Plans In December 2003, the Company entered into a SERP agreement with its former CEO that provides annual retirement benefits of $150,000 a year for a 15 year period when the former CEO reached the age of 65. Our former CEO retired and is receiving annual retirement benefits pursuant to the plan. In 2008, the Company entered into a SERP agreement with its current CEO that provides annual retirement benefits of $150,000 for a 15 year period when the CEO reaches the age of 65. In November 2008, the Company entered into a SERP with a Regional President that provides annual retirement benefits of $90,000 a year for a 10 year period upon his reaching the age of 65. In December 2016, the Company entered into a SERP with a former Regional President that provides $84,500 a year for a 15 year period upon his reaching the age of 66. The Company intends to fund its obligations under the deferred compensation arrangements with the increase in cash surrender value of bank owned life insurance policies. In 2018, 2017 and 2016, the Company recorded compensation expense of $83,000, $261,000 and $746,000, respectively, for these plans. The accrued liability for these plans was $3.3 million and $3.5 million for the years ended December 31, 2018 and 2017, respectively. Deferred Compensation Agreement In February 2015, the Company entered into a Deferred Compensation Agreement with its CEO where it would contribute $16,500 monthly into a deferral account which would earn interest at an annual rate of the Company’s prior year return on equity, provided that the Company’s return on equity remained in a range of 0% to 15%. The Company has agreed to make such contributions each month that the CEO is actively employed from February 2015 through December 31, 2022. The expense incurred in 2018, 2017 and 2016 was $269,000, $244,000 and $222,000, respectively, and the accrued liability at December 31, 2018 and 2017 was $923,000 and $654,000, respectively. Following the CEO’s normal retirement date, he shall be paid out in 180 consecutive monthly installments. Elective Deferral Plan In March 2015, the Company established an Elective Deferral Plan for eligible executives in which the executive may elect to contribute a portion of his base salary and bonus to a deferral account which will earn an interest rate of 75% of the Company’s prior year return on equity provided that the return on equity remains in the range of 0% to 15%. The Company recorded an expense of $73,000, $55,000 and $22,000 in 2018, 2017 and 2016, respectively, and had a liability recorded of $1.4 million and $916,000 at December 31, 2018 and 2017, respectively. |
Directors Retirement Plan |
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Retirement Benefits, Description [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Directors Retirement Plan | DIRECTORS RETIREMENT PLAN The Company provides a retirement plan that directors appointed to the board prior to 2009 who completed five years of service may retire and receive benefit payments ranging from $5,000 through $17,500 per annum, depending upon years of credited service, for a period of ten years. This plan is unfunded. The following tables present the status of the plan and the components of net periodic plan cost for the years then ended. The measurement date for the accumulated benefit obligation is December 31 of the years presented.
A discount rate of 3.97%, 3.30% and 3.68% was assumed in the plan valuation for 2018, 2017 and 2016, respectively. As the benefit amount is not dependent upon compensation levels, a rate of increase in compensation assumption was not utilized in the plan valuation. The directors' retirement plan holds no plan assets. The benefits expected to be paid in each of the next five years and in aggregate for the five years thereafter are as follows (in thousands):
The Company expects its contribution to the directors' retirement plan to be $57,000 in 2019. There is no expected amount to be recognized in accumulated other comprehensive income as a component of net periodic benefit cost in 2019. |
Stock-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | STOCK-BASED COMPENSATION Employee Stock Option Plans The Company's shareholders approved the 2018 Omnibus Equity Incentive Plan (the "Plan"), which authorizes the granting of incentive stock options, supplemental stock options, stock appreciation rights, restricted shares, restricted stock units, other stock-based awards and cash-based awards to officers, employees and non-employee directors of, and consultants and advisors to, the Company and its subsidiaries. The Plan authorizes the issuance of up to 2.0 million shares of Company common stock and includes approximately 1.1 million shares of common stock theretofore available under the Company's 2009 Equity Compensation Program but not used. The maximum term of the Company’s stock option grants under the Plan is ten years from the date of grant. Under the 2009 Equity Compensation Program, 2.3 million shares of common stock of the Company were authorized. The maximum term of the Company’s stock option grants under this plan was ten years from the date of grant. In 2014, the Company began issuing restricted stock units ("RSUs"), some of which have performance conditions attached to them. No further awards may be granted from the 2009 program. The Company has outstanding stock options issued to its directors as well as options assumed under the Somerset Hills’ stock option plans at the time of the Company's acquisition of Somerset Hills. As of December 31, 2018 and 2017, respectively, 55,192 and 81,442 options granted to directors were outstanding. As of December 31, 2018 and 2017, there were 12,296 and 20,774 options outstanding, respectively, under the Somerset Hills’ stock option plans. Excess tax benefits of stock based compensation were $318,000, $587,000 and $43,000 for the years 2018, 2017 and 2016, respectively. A summary of the status of the Company’s option plans as of December 31, 2018 and the changes during the year ending on that date is represented below.
There were no non-vested options under the Company’s option plans as of December 31, 2018 and no changes to the non-vested options for the year then ended. As of December 31, 2018, there was no unrecognized compensation expense related to unvested stock options under the 2018 Omnibus Equity Incentive Plan or the 2009 Equity Compensation Program. Compensation expense recognized for stock options was $0, $14,000 and $35,000 for 2018, 2017 and 2016, respectively. The aggregate intrinsic values of options exercised in 2018 and 2017 were $406,000 and $337,000, respectively. Exercise of stock options during 2018 and 2017 resulted in cash receipts of $307,000 and $321,000, respectively. The total fair value of options that vested in 2018 and 2017 were $0 and $35,000, respectively. Information regarding the Company’s restricted stock for the year ended December 31, 2018 is as follows:
In 2018, the Company granted 11,575 shares of restricted stock to non-employee directors at a grant date fair value of $20.30 per share under the Company’s 2018 Omnibus Equity Incentive Plan and 2009 Equity Compensation Program. These shares will vest over a one year period, totaling $235,000 in compensation expense. In 2017, the Company granted 13,176 shares of restricted stock to non-employee directors at a grant date fair value of $18.20 per share under the Company’s 2009 Equity Compensation Program. These shares vested over a one year period, totaling $240,000 in compensation expense. In 2016, the Company granted 23,952 shares of restricted stock to non-employee directors at a grant date fair value of $10.02 per share under the Company’s 2009 Equity Compensation Program. These shares vested over a one year period, totaling $240,000 in compensation expense. The total fair value of the restricted stock vested during the year ended December 31, 2018 was approximately $331,000. Compensation expense recognized for restricted stock was $237,000, $287,000 and $353,000 in 2018, 2017 and 2016, respectively. There was approximately $3,000 in unrecognized compensation expense related to restricted stock grants as of December 31, 2018, which is expected to be recognized over a period of 0.05 years. In 2018, the Company granted 159,233 RSUs at a weighted average grant date fair value of $19.09 per share under the Company’s 2018 Omnibus Equity Incentive Plan and 2009 Equity Compensation Program. These units vest within a range of two to three years. A portion of these RSUs will vest subject to certain performance conditions in the restricted stock unit agreements. There are also certain provisions in the compensation program which state that if a holder of the RSUs reaches a certain age and years of service, the person has effectively earned a portion of the RSUs at that time. Compensation expense on the RSUs granted in 2018 is expected to average approximately $1.0 million per year over a three year period. In 2017, the Company granted 132,523 RSUs at a weighted average grant date fair value of $19.92 per share under the Company’s 2009 Equity Compensation Program. These units vest within a range of two to three years. Compensation expense on these restricted stock units is expected to average approximately $880,000 per year over a three year period. In 2016, the Company granted 180,926 RSUs at a weighted average grant date fair value of $10.45 per share under the Company’s 2009 Equity Compensation Program. Compensation expense on these restricted stock units is expected to average $630,000 per year over a three year period. Compensation expense for restricted stock units totaled $2.2 million, $2.0 million and $1.5 million in 2018, 2017 and 2016, respectively. There was approximately $2.5 million in unrecognized compensation expense related to restricted stock units as of December 31, 2018, which is expected to be recognized over a period of 1.20 years. Information regarding the Company’s RSUs and changes during the year ended December 31, 2018 is as follows:
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Revenue Recognition (Notes) |
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Revenue Recognition | REVENUE RECOGNITION The Company’s primary source of revenue is interest income generated from loans, leases and investment securities. Interest income is recognized according to the terms of the financial instrument agreement over the life of the loan, lease or investment security unless it is determined that the counterparty is unable to continue making interest payments. Interest income also includes prepaid interest fees from commercial customers, which approximates the interest foregone on the balance of the loan prepaid. The Company’s additional source of income, also referred to as noninterest income, is generated from deposit related fees, interchange fees, loan and lease fees, merchant fees, loan sales and other miscellaneous income and is largely based on contracts with customers. In these cases, the Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. The Company considers a customer to be any party to which the Company will provide goods or services that are an output of the Company’s ordinary activities in exchange for consideration. There is little seasonality with regards to revenue from contracts with customers and all inter-company revenue is eliminated when the Company’s financial statements are consolidated. Generally, the Company enters into contracts with customers that are short-term in nature where the performance obligations are fulfilled and payment is processed at the same time. Such examples include revenue related to merchant fees, interchange fees and investment services income. In addition, revenue generated from existing customer relationships such as deposit accounts are also considered short-term in nature, because the relationship may be terminated at any time and payment is processed at the time performance obligations are fulfilled. As a result, the Company does not have contract assets, contract liabilities or related receivable accounts for contracts with customers. In cases where collectability is a concern, the Company does not record revenue. Generally, the pricing of transactions between the Company and each customer is either (i) established within a legally enforceable contract between the two parties, as is the case with the loan sales, or (ii) disclosed to the customer at a specific point in time, as is the case when a deposit account is opened or before a new loan is underwritten. Fees are usually fixed at a specific amount or as a percentage of a transaction amount. No judgment or estimates by management are required to record revenue related to these transactions and pricing is clearly identified within these contracts. The Company primarily operates in one geographic region, Northern and Central New Jersey and contiguous areas. Therefore, all significant operating decisions are based upon analysis of the Company as one operating segment or unit. We disaggregate our revenue from contracts with customers by contract-type and timing of revenue recognition, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Noninterest income not generated from customers during the Company’s ordinary activities primarily relates to mortgage servicing rights, gains/losses on the sale of investment securities, gains/losses on the sale of other real estate owned, gains/losses on the sale of property, plant and equipment, and income from bank owned life insurance. The following table sets forth the components of noninterest income for the years ended December 31, 2018, 2017 and 2016:
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Commitments and Contingencies |
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Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Lease Obligations Lakeland is obligated under various non-cancelable operating leases on building and land used for office space and banking purposes. These leases contain renewal options and escalation clauses. Rent expense under long-term operating leases amounted to approximately $3.0 million, $3.1 million and $3.2 million for the years ended December 31, 2018, 2017 and 2016, respectively, including rent expense to related parties of $144,000 in 2018, $144,000 in 2017, and $141,000 in 2016. At December 31, 2018, the minimum commitments under all noncancellable leases with remaining terms of more than one year and expiring through 2033 are as follows (in thousands):
Litigation There are no pending legal proceedings involving the Company or Lakeland other than those arising in the normal course of business. Management does not anticipate that the potential liability, if any, arising out of such legal proceedings will have a material effect on the financial condition or results of operations of the Company and Lakeland on a consolidated basis. |
Financial Instruments with Off-Balance-Sheet Risk and Concentrations of Credit Risk |
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Financial Instruments with Off-Balance-Sheet Risk and Concentrations of Credit Risk | FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK AND CONCENTRATIONS OF CREDIT RISK Lakeland is party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. Such financial instruments are recorded in the consolidated financial statements when they become payable. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets. The contract or notional amounts of those instruments reflect the extent of involvement Lakeland has in particular classes of financial instruments. Lakeland’s exposure to credit loss in the event of non-performance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual or notional amount of those instruments. Lakeland uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. Lakeland generally requires collateral or other security to support financial instruments with credit risk. The approximate contract amounts are as follows:
At December 31, 2018 and 2017 there were $808,000 and $20,000, respectively, in commitments to lend additional funds to borrowers whose terms have been modified in troubled debt restructurings. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Lakeland evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by Lakeland upon extension of credit, is based on management’s credit evaluation. Standby letters of credit are conditional commitments issued by Lakeland to guarantee the payment by or performance of a customer to a third party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. Lakeland holds deposit accounts, residential or commercial real estate, accounts receivable, inventory and equipment as collateral to support those commitments for which collateral is deemed necessary. The extent of collateral held for those commitments at December 31, 2018 and 2017 varies based on management’s credit evaluation. Lakeland issues financial and performance letters of credit. Financial letters of credit require Lakeland to make payment if the customer fails to make payment, as defined in the agreements. Performance letters of credit require Lakeland to make payments if the customer fails to perform certain non-financial contractual obligations. Lakeland defines the initial fair value of these letters of credit as the fees received from the customer. Lakeland records these fees as a liability when issuing the letters of credit and amortizes the fee over the life of the letter of credit. The maximum potential undiscounted amount of future payments of these letters of credit as of December 31, 2018 was $21.6 million and they expire through 2024. Lakeland’s exposure under these letters of credit would be reduced by actual performance, subsequent termination by the beneficiaries and by any proceeds that Lakeland obtained in liquidating the collateral for the loans, which varies depending on the customer. As of December 31, 2018, Lakeland had $973.7 million in loan and lease commitments, with $667.9 million maturing within one year, $135.5 million maturing after one year but within three years, $19.1 million maturing after three years but within five years, and $151.2 million maturing after five years. As of December 31, 2018, Lakeland had $21.6 million in standby letters of credit, with $21.1 million maturing within one year, $444,000 maturing after one year but within three years, $0 maturing after three years but within five years and $80,000 maturing after five years. Lakeland grants loans primarily to customers in New Jersey, the Hudson Valley Region in New York State, and surrounding areas. Certain of Lakeland’s consumer loans and lease customers are more diversified nationally. Although Lakeland has a diversified loan portfolio, a large portion of its loans are secured by commercial or residential real property. Although Lakeland has a diversified loan portfolio, a substantial portion of its debtors’ ability to honor their contracts is dependent upon the economy. Commercial and standby letters of credit were granted primarily to commercial borrowers. |
Comprehensive Income (Loss) |
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Comprehensive Income (Loss) | COMPREHENSIVE INCOME (LOSS) The Company reports comprehensive income (loss) in addition to net income (loss) from operations. Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of certain financial information that historically has not been recognized in the calculation of net income. The following table shows the changes in the balances of each of the components of other comprehensive income for the periods presented.
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Fair Value Measurement and Fair Value of Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurement and Fair Value of Financial Instruments | FAIR VALUE MEASUREMENT AND FAIR VALUE OF FINANCIAL INSTRUMENTS Fair Value Measurement Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for an asset or liability in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels giving the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest level priority to unobservable inputs (level 3 measurements). The following describes the three levels of fair value hierarchy: Level 1 - unadjusted quoted prices in active markets for identical assets or liabilities; includes U.S. Treasury Notes, and other U.S. Government Agency securities that actively trade in over-the-counter markets; equity securities and mutual funds that actively trade in over-the-counter markets. Level 2 - quoted prices for similar assets or liabilities in active markets; or quoted prices for identical or similar assets or liabilities in markets that are not active; or inputs other than quoted prices that are observable for the asset or liability including yield curves, volatilities, and prepayment speeds. Level 3 - unobservable inputs for the asset or liability that reflect the Company’s own assumptions about assumptions that market participants would use in the pricing of the asset or liability and that are consequently not based on market activity but on particular valuation techniques. The Company’s assets that are measured at fair value on a recurring basis are its available for sale investment securities and its interest rate swaps. The Company obtains fair values on its securities using information from a third party servicer. If quoted prices for securities are available in an active market, those securities are classified as Level 1 securities. The Company has U.S. Treasury Notes and certain equity securities that are classified as Level 1 securities. Level 2 securities were primarily comprised of U.S. Agency bonds, residential mortgage-backed securities, obligations of state and political subdivisions and corporate securities. Fair values were estimated primarily by obtaining quoted prices for similar assets in active markets or through the use of pricing models supported with market data information. Standard inputs include benchmark yields, reported trades, broker-dealer quotes, issuer spreads, bids and offers. On a quarterly basis, the Company reviews the pricing information received from the Company’s third party pricing service. This review includes a comparison to non-binding third-party quotes. The fair values of derivatives are based on valuation models using current market terms (including interest rates and fees), the remaining terms of the agreements and the credit worthiness of the counter-party as of the measurement date (Level 2). The following table sets forth the Company’s financial assets that were accounted for at fair value on a recurring basis as of the periods presented by level within the fair value hierarchy. During the years ended December 31, 2018 and 2017, the Company did not make any transfers between recurring Level 1 fair value measurements and recurring Level 2 fair value measurements. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:
The following table sets forth the Company’s financial assets subject to fair value adjustments (impairment) on a non-recurring basis. Assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:
Impaired loans and leases are evaluated and valued at the time the loan is identified as impaired at the lower of cost or market value. Because most of Lakeland’s impaired loans are collateral dependent, fair value is generally measured based on the value of the collateral, less estimated costs to sell, securing these loans and leases and is classified at a level 3 in the fair value hierarchy. Collateral may be real estate, accounts receivable, inventory, equipment and/or other business assets. The value of the real estate is assessed based on appraisals by qualified third party licensed appraisers. The appraisers may use the income approach to value the collateral using discount rates (with ranges of 5-11%) or capitalization rates (with ranges of 4-9%) to evaluate the property. The value of the equipment may be determined by an appraiser, if significant, inquiry through a recognized valuation resource, or by the value on the borrower’s financial statements. Field examiner reviews on business assets may be conducted based on the loan exposure and reliance on this type of collateral. Appraised and reported values may be discounted based on management’s historical knowledge, changes in market conditions from the time of valuation, and/or management’s expertise and knowledge of the client and client’s business. Impaired loans and leases are reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly, based on the same factors identified above. The Company has a held for sale loan portfolio that consists of residential mortgages that are being sold in the secondary market. The Company records these mortgages at the lower of cost or fair market value. Fair value is generally determined by the value of purchase commitments. Other real estate owned (OREO) and other repossessed assets, representing property acquired through foreclosure or deed in lieu of foreclosure, are carried at fair value less estimated disposal costs of the acquired property. Fair value on other real estate owned is based on the appraised value of the collateral using discount rates or capitalization rates similar to those used in impaired loan valuation. The fair value of other repossessed assets is estimated by inquiry through a recognized valuation resource. Changes in the assumptions or methodologies used to estimate fair values may materially affect the estimated amounts. Changes in economic conditions, locally or nationally, could impact the value of the estimated amounts of impaired loans, OREO and other repossessed assets. Fair Value of Certain Financial Instruments Estimated fair values have been determined by the Company using the best available data and an estimation methodology suitable for each category of financial instruments. Management is concerned that there may not be reasonable comparability between institutions due to the wide range of permitted assumptions and methodologies in the absence of active markets. This lack of uniformity gives rise to a high degree of subjectivity in estimating financial instrument fair values. The estimation methodologies used, the estimated fair values, and recorded book balances at December 31, 2018 and December 31, 2017 are outlined below. This summary, as well as the table below, excludes financial assets and liabilities for which carrying value approximates fair value. For financial assets, these include cash and cash equivalents. For financial liabilities, these include noninterest-bearing demand deposits, savings and interest-bearing transaction accounts and federal funds sold and securities sold under agreements to repurchase. The estimated fair value of demand, savings and interest-bearing transaction accounts is the amount payable on demand at the reporting date. Carrying value is used because there is no stated maturity on these accounts, and the customer has the ability to withdraw the funds immediately. Also excluded from this summary and the following table are those financial instruments recorded at fair value on a recurring basis, as previously described. The fair value of investment securities held to maturity was measured using information from the same third-party servicer used for investment securities available for sale using the same methodologies discussed above. Investment securities held to maturity includes $6.0 million in short-term municipal bond anticipation notes and $1.0 million in subordinated debt that are non-rated and do not have an active secondary market or information readily available on standard financial systems. As a result, the securities are classified as Level 3 securities. Management performs a credit analysis before investing in these securities. FHLB stock is an equity interest that can be sold to the issuing FHLB, to other FHLBs, or to other member banks at its par value. Because ownership of these securities is restricted, they do not have a readily determinable fair value. As such, the Company’s FHLB stock is recorded at cost or par value and is evaluated for impairment each reporting period by considering the ultimate recoverability of the investment rather than temporary declines in value. The Company’s evaluation primarily includes an evaluation of liquidity, capitalization, operating performance, commitments, and regulatory or legislative events. The net loan portfolio at December 31, 2018 has been valued using an exit price approach, which incorporates a build-up discount rate calculation that uses a swap rate adjusted for credit risk, servicing costs, a liquidity premium and a prepayment premium. This is not comparable with the fair values used for December 31, 2017, which are based on entrance prices. For December 31, 2017, the loan portfolio was valued using a present value discounted cash flow where market prices are not available. The discount rate used in these calculations is the estimated current market rate adjusted for credit risk. For fixed maturity certificates of deposit, fair value was estimated based on the present value of discounted cash flows using the rates currently offered for deposits of similar remaining maturities. The carrying amount of accrued interest payable approximates its fair value. The fair value of long-term debt is based upon the discounted value of contractual cash flows. The Company estimates the discount rate using the rates currently offered for similar borrowing arrangements. The fair value of subordinated debentures is based on bid/ask prices from brokers for similar types of instruments. The fair values of commitments to extend credit and standby letters of credit are estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair value of guarantees and letters of credit is based on fees currently charged for similar agreements or on the estimated cost to terminate them or otherwise settle the obligations with the counterparties at the reporting date. The fair values of commitments to extend credit and standby letters of credit are deemed immaterial. The following table presents the carrying values, fair values and placement in the fair value hierarchy of the Company’s financial instruments as of December 31, 2018 and December 31, 2017:
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Derivatives |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives | DERIVATIVES Lakeland is a party to interest rate derivatives that are not designated as hedging instruments. Under a program, Lakeland executes interest rate swaps with commercial lending customers to facilitate their respective risk management strategies. These interest rate swaps with customers are simultaneously offset by interest rate swaps that Lakeland executes with a third party, such that Lakeland minimizes its net risk exposure resulting from such transactions. Because the interest rate swaps associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings. The changes in the fair value of the swaps offset each other, except for the credit risk of the counterparties, which is determined by taking into consideration the risk rating, probability of default and loss given default for all counterparties. As of December 31, 2018 and 2017, Lakeland had $498,000 and $500,000, respectively, in securities pledged for collateral on its interest rate swaps. In June 2016, the Company entered into two cash flow hedges in order to hedge the variable cash outflows associated with its floating rate subordinated debentures (See Note 8). The notional value of these hedges was $30.0 million. The Company’s objective in using the cash flow hedge is to add stability to interest expense and to manage its exposure to interest rate movements. The Company used interest rate swaps designated as cash flow hedges which involved the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. In these particular hedges the Company is paying a third party an average of 1.10% in exchange for a payment at 3 month LIBOR. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive income and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the year ended December 31, 2018, the Company did not record any hedge ineffectiveness. The Company recognized $329,000 of accumulated other comprehensive income that was reclassified into interest expense during 2018. The Company did not enter into any hedges in 2018. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s debt. During the next twelve months, the Company estimates that $509,000 will be reclassified as a decrease to interest expense should the rate environment remain the same. The following table presents summary information regarding these derivatives for the periods presented (dollars in thousands):
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Regulatory Matters |
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Banking and Thrift [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Matters | REGULATORY MATTERS The Bank Holding Company Act of 1956 restricts the amount of dividends the Company can pay. Accordingly, dividends should generally only be paid out of current earnings, as defined. The New Jersey Banking Act of 1948 restricts the amount of dividends paid on the capital stock of New Jersey chartered banks. Accordingly, no dividends shall be paid by such banks on their capital stock unless, following the payment of such dividends, the capital stock of Lakeland will be unimpaired, and: (1) Lakeland will have a surplus, as defined, of not less than 50% of its capital stock, or, if not, (2) the payment of such dividend will not reduce the surplus, as defined, of Lakeland. Under these limitations, approximately $544.1 million was available for payment of dividends from Lakeland to the Company as of December 31, 2018. The Company and Lakeland are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory – and possible additional discretionary – actions by regulators that, if undertaken, could have a direct material effect on the Company’s and Lakeland’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of the Company’s and Lakeland’s assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Company’s and Lakeland’s capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Quantitative measures established by regulations to ensure capital adequacy require the Company and Lakeland to maintain minimum amounts and ratios (set forth in the table below) of total and Tier 1 capital (as defined in the regulations) to risk-weighted assets, and of Tier 1 capital to average assets. Management believes, as of December 31, 2018, that the Company and Lakeland met all capital adequacy requirements to which they are subject. As of December 31, 2018, the most recent notification from the FDIC categorized Lakeland as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, Lakeland must maintain minimum total risk-based, Tier 1 risk-based, common equity Tier 1 capital and Tier 1 leverage ratios as set forth in the table below. There are no conditions or events since that notification that management believes have changed the institution’s category. As of December 31, 2018 and 2017, the Company and Lakeland have the following capital ratios based on the then current regulations:
The final rules implementing the Basel Committee on Banking Supervisions capital guidelines for U.S. Banks became effective for the Company on January 1, 2015, with full compliance with all the final rule’s requirements phased in over a multi-year schedule, to be fully phased in by January 1, 2019. The Basel Rules require a “capital conservation buffer.” The implementation of the capital conservation buffer began on January 1, 2016 at the 0.625% level and increases by 0.625% every January 1 until it reached 2.5% on January 1, 2019. |
Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | GOODWILL AND OTHER INTANGIBLE ASSETS The Company reported goodwill of $136.4 million at both December 31, 2018 and December 31, 2017. Core deposit intangible was $1.8 million on December 31, 2018 compared to $2.4 million on December 31, 2017. The Company recorded $691,000, $1.5 million and $2.7 million in core deposit intangible for the Harmony, Pascack and Somerset Hills acquisitions, respectively. In 2018, it has amortized $594,000 in core deposit intangible. The estimated future amortization expense for each of the succeeding five years ended December 31 is as follows (in thousands):
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Condensed Financial Information - Parent Company Only |
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Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Financial Information - Parent Company Only | CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY CONDENSED BALANCE SHEETS
CONDENSED STATEMENTS OF INCOME
CONDENSED STATEMENTS OF CASH FLOWS
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Summary of Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||
Basis of Financial Statement Presentation | Basis of Financial Statement Presentation The accounting and reporting policies of the Company and its subsidiaries conform with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and predominant practices within the banking industry. The consolidated financial statements include the accounts of the Company, Lakeland, Lakeland NJ Investment Corp., Lakeland Investment Corp., Lakeland Equity, Inc. and Lakeland Preferred Equity, Inc. All significant intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications have been made in the consolidated financial statements to conform with current year classifications. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. These estimates and assumptions also affect reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. The principal estimates that are particularly susceptible to significant change in the near term relate to the allowance for loan and lease losses and the valuation of the Company’s investment securities portfolio. The policies regarding these estimates are discussed below. The Company’s operating segments are components of its enterprise for which separate financial information is available and is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assess performance. The Company’s chief operating decision maker is its Chief Executive Officer. All of the Company’s financial services activities are interrelated, and each activity is dependent and assessed based on how each of the activities of the Company supports the others. For example, commercial lending is dependent upon the ability of Lakeland to fund itself with retail deposits and other borrowings and to manage interest rate and credit risk. The situation is also similar for consumer and residential mortgage lending. Moreover, the Company primarily operates in one market area, Northern and Central New Jersey and contiguous areas. Therefore, all significant operating decisions are based upon analysis of the Company as one operating segment or unit. Accordingly, the Company has determined that it has one operating segment and thus one reporting segment. |
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Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents are defined as cash on hand, cash items in the process of collection, amounts due from banks and federal funds sold with an original maturity of three months or less. A portion of Lakeland’s cash on hand and on deposit with the Federal Reserve Bank was required to meet regulatory reserve and clearing requirements. |
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Investment Securities | Investment Securities Investment securities are classified as held to maturity or available for sale. Management determines the appropriate classification of investment securities at the time of purchase. Investments in securities, for which management has both the ability and intent to hold to maturity, are classified as held to maturity and carried at cost, adjusted for the amortization of premiums and accretion of discounts computed by the effective interest method. Investments in debt securities, which management believes may be sold prior to maturity due to changes in interest rates, prepayment risk, liquidity requirements, or other factors, are classified as available for sale. Net unrealized gains and losses for such securities, net of tax effect, are reported as other comprehensive income (loss) and excluded from the determination of net income. Gains or losses on disposition of investment securities are based on the net proceeds and the adjusted carrying amount of the securities sold using the specific identification method. Losses are recorded through the statement of income when the impairment is considered other-than-temporary, even if a decision to sell has not been made. The Company evaluates its investment securities portfolio for impairment each quarter. In estimating other-than-temporary losses, the Company considers the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, and whether the Company is more likely than not to sell the security before recovery of its cost basis. If a security has been impaired for more than twelve months, and the impairment is deemed other-than-temporary, a write down will occur in that quarter. If a loss is deemed to be other-than-temporary, it is recognized as a realized loss in the income statement with the security assigned a new cost basis. If the Company intends to sell an impaired security, the Company records an other-than-temporary loss in an amount equal to the entire difference between the fair value and amortized cost. If a security is determined to be other-than-temporarily impaired, but the Company does not intend to sell the security, only the credit portion of the estimated loss is recognized in earnings in gain (loss) on securities, with the other portion of the loss recognized in other comprehensive income. If a determination is made that an equity security is other-than-temporarily impaired, the unrealized loss will be recognized as an other-than-temporary impairment charge in noninterest income as a component of gain (loss) on investment securities. |
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Loans and Leases and Allowance for Loan and Lease Losses | Loans and Leases and Allowance for Loan and Lease Losses Loans and leases that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at the amount of unpaid principal and are net of unearned discount, unearned loan fees and an allowance for loan and lease losses. Interest income is accrued as earned on a simple interest basis, adjusted for prepayments. All unamortized fees and costs related to the loan are amortized over the life of the loan using the interest method. Accrual of interest is discontinued on a loan or lease when management believes, after considering economic and business conditions and collection efforts, that the borrower’s financial condition is such that full collection of interest and principal is doubtful. When a loan or lease is placed on such non-accrual status, all accumulated accrued interest receivable is reversed out of current period income. Commercial loans and leases are placed on a non-accrual status with all accrued interest and unpaid interest reversed if (a) because of the deterioration in the financial position of the borrowers they are maintained on a cash basis (which means payments are applied when and as received rather than on a regularly scheduled basis), (b) payment in full of interest or principal is not expected, or (c) principal and interest have been in default for a period of 90 days or more unless the obligation is both well-secured and in process of collection. Residential mortgage loans and closed-end consumer loans are placed on non-accrual status at the time principal and interest have been in default for a period of 90 days or more, except where there exists sufficient collateral to cover the defaulted principal and interest payments, and the loans are well-secured and in the process of collection. Open-end consumer loans secured by real estate are generally placed on non-accrual and reviewed for charge-off when principal and interest payments are four months in arrears unless the obligations are well-secured and in the process of collection. Interest thereafter on such charged-off loans is taken into income when received only after full recovery of principal. As a general rule, a non-accrual asset may be restored to accrual status when none of its principal or interest is due and unpaid, satisfactory payments have been received for a sustained period (usually six months), or when it otherwise becomes well-secured and in the process of collection. The Company defines impaired loans as all non-accrual loans with recorded investments of $500,000 or greater. Impaired loans also include all loans modified as troubled debt restructurings. Loans and leases are considered impaired when, based on current information and events, it is probable that Lakeland will be unable to collect all amounts due in accordance with the original contractual terms of the loan agreement, including scheduled principal and interest payments. Impairment is measured based on the present value of expected cash flows discounted at the loan’s effective interest rate, or as a practical expedient, Lakeland may measure impairment based on a loan’s observable market price, or the fair value of the collateral, less estimated costs to sell, if the loan is collateral-dependent. Regardless of the measurement method, Lakeland measures impairment based on the fair value of the collateral when it is determined that foreclosure is probable. Most of Lakeland’s impaired loans are collateral-dependent. Shortfalls in collateral or cash flows are charged-off or specifically reserved for in the period the short-fall is identified. Charge-offs are recommended by the Chief Credit Officer and approved by the Board. Lakeland groups impaired commercial loans under $500,000 into homogeneous pools and collectively evaluates them. Interest received on impaired loans and leases may be recorded as interest income. However, if management is not reasonably certain that an impaired loan and lease will be repaid in full, or if a specific time frame to resolve full collection cannot yet be reasonably determined, all payments received are recorded as reductions of principal. Purchased Credit-Impaired (“PCI”) loans are loans acquired through acquisition or purchased at a discount that is due, in part, to credit quality. PCI loans are accounted for in accordance with ASC Subtopic 310-30 and are initially recorded at fair value (as determined by the present value of expected future cash flows) with no valuation allowance (i.e., the allowance for loan losses). The difference between the undiscounted cash flows expected at acquisition and the initial carrying amount (fair value) of the covered loans, or the “accretable yield,” is recognized as interest income utilizing the level-yield method over the life of the loans. Contractually required payments for interest and principal that exceed the undiscounted cash flows expected at acquisition, or the “non-accretable difference,” are not recognized as a yield adjustment, as a loss accrual or a valuation allowance. Reclassifications of the non-accretable difference to the accretable yield may occur subsequent to the loan acquisition dates due to increases in expected cash flows of the loans and results in an increase in yield on a prospective basis. Subsequent to acquisition date, further credit deterioration of a PCI loan will result in a valuation allowance recognized in the allowance for loan and lease losses. Loans are classified as troubled debt restructured loans ("TDRs") in cases where borrowers experience financial difficulties and Lakeland makes certain concessionary modifications to contractual terms. Restructured loans typically involve a modification of terms such as a reduction of the stated interest rate, an extended moratorium of principal payments and/or an extension of the maturity date at a stated interest rate lower than the current market rate for a new loan with similar risk. Nonetheless, restructured loans are classified as impaired loans. If a loan has been restructured, it will continue to be classified as a TDR until it is fully repaid or until it meets all of the following criteria: 1) the borrower is no longer experiencing financial difficulties, 2) the rate is not less than the rate provided for similar credit risk, 3) other terms are no less favorable than similar new debt and 4) no concessions were granted. The allowance for loan and lease losses is the estimated amount considered necessary to cover probable and reasonably estimable incurred losses inherent in the loan portfolio at the balance sheet date. In determining the allowance, we make significant estimates and judgments, and, therefore, have identified the allowance as a critical accounting policy. The allowance is established through a provision for loan and lease losses charged against income. Loan principal considered to be uncollectible by management is charged against the allowance. The allowance for loan and lease losses has been determined in accordance with U.S. GAAP. We are responsible for the timely and periodic determination of the amount of the allowance required. We believe that our allowance is adequate to cover identifiable losses, as well as estimated losses inherent in our portfolio for which certain losses are probable but not specifically identifiable. The determination of the adequacy of the allowance for loan and lease losses and the periodic provisioning for estimated losses included in the consolidated financial statements is the responsibility of management and the Board of Directors. Management performs a formal quarterly evaluation of the allowance for loan and lease losses. This quarterly process is performed by the credit administration department and approved by the Chief Credit Officer. All supporting documentation with regard to the evaluation process is maintained by the credit administration department. Each quarter, the evaluation along with the supporting documentation is reviewed by the finance department before approval by the Chief Credit Officer. The allowance evaluation is then presented to an Allowance for Loan and Lease Losses committee, which gives final approval to the allowance evaluation before being presented to the Board of Directors for their approval. Additionally, the Company continually evaluates, through its governance process, the development of the allowance for loan and lease losses methodology. During the third quarter of 2017, the Company refined and enhanced its quantitative framework by implementing loss migration periods to determine historical loss rates. It also enhanced its qualitative framework to complement the loss migration historical loss rates. These enhancements were implemented to increase the level of precision in the allowance for loan and lease losses and did not result in a material change in the required allowance for loan and lease losses. The methodology employed for assessing the adequacy of the allowance consists of the following criteria:
The establishment of reserve amounts for pools of homogeneous loans and leases are based upon the determination of historical loss rates, which are adjusted to reflect current conditions through the use of qualitative factors. The qualitative factors considered by the Company includes an evaluation of the results of the Company’s independent loan review function, the Company's reporting capabilities, the adequacy and expertise of Lakeland’s lending staff, underwriting policies, loss histories, trends in the portfolio, delinquency trends, economic and business conditions and capitalization rates. Since many of Lakeland’s loans depend on the sufficiency of collateral as a secondary source of repayment, any adverse trends in the real estate market could affect the underlying values available to protect Lakeland from losses. Additionally, management determines the loss emergence periods for each loan segment, which are used to define loss migration periods and establish appropriate ranges for qualitative adjustments for each loan segment. The loss emergence period is the estimated time from the date of a loss event (such as a personal bankruptcy) to the actual recognition of the loss (typically via the first partial or full loan charge-off), and is determined based upon a study of our past loss experience by loan segment. All of the factors considered in the analysis of the adequacy of the allowance for loan and lease losses may be subject to change. To the extent actual outcomes differ from management estimates, additional provisions for loan and lease losses may be required that would adversely impact earnings in future periods. A loan that management designates as impaired is reviewed for charge-off when it is placed on non-accrual status with a resulting charge-off if the loan is not secured by collateral having sufficient liquidation value to repay the loan if the loan is collateral dependent or charged off if deemed uncollectible. For a loan that is not collateral dependent, a reserve may be established for any shortfall in expected cash flows. Charge-offs are recommended by the Chief Credit Officer and approved by the Board. Loans Held for Sale Mortgage loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or estimated fair value. Gains and losses on sales of loans are specifically identified and accounted for in accordance with U.S. GAAP which requires that an entity engaged in mortgage banking activities classify the retained mortgage-backed security or other interest, which resulted from the securitization of a mortgage loan held for sale, based upon its ability and intent to sell or hold these investments. |
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Bank Premises and Equipment | Premises and Equipment, Net Premises and equipment, including leasehold improvements, are stated at cost less accumulated depreciation. Depreciation expense is computed on the straight-line method over the estimated useful lives of the assets. Leasehold improvements are depreciated over the shorter of the estimated useful lives of the improvements or the terms of the related leases. |
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Other Real Estate Owned and Other Repossessed Assets | Other Real Estate Owned and Other Repossessed Assets Other real estate owned (OREO) and other repossessed assets, representing property acquired through foreclosure (or deed-in-lieu-of-foreclosure), are carried at fair value less estimated disposal costs of the acquired property. Costs relating to holding the assets are charged to expense. An allowance for OREO or other repossessed assets is established, through charges to expense, to maintain properties at fair value less estimated costs to sell. Operating results of OREO and other repossessed assets, including rental income and operating expenses, are included in other expenses. |
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Mortgage Servicing | Mortgage Servicing Lakeland performs various servicing functions on loans owned by others. A fee, usually based on a percentage of the outstanding principal balance of the loan, is received for these services. At December 31, 2018 and 2017, Lakeland was servicing approximately $19.9 million and $23.0 million, respectively, of loans for others. Lakeland originates certain mortgages under a definitive plan to sell or securitize those loans and service the loans owned by the investor. Upon the transfer of the mortgage loans in a sale or a securitization, Lakeland records the servicing assets retained. Lakeland records mortgage servicing rights and the loans based on relative fair values at the date of origination and evaluates the mortgage servicing rights for impairment at each reporting period. Lakeland also originates loans that it sells to other banks and investors and does not retain the servicing rights. |
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Mortgage Servicing Rights | Mortgage Servicing Rights When mortgage loans are sold with servicing retained, servicing rights are initially recorded at fair value with the income statement effect recorded in gains on sales of loans. Fair value is based on market prices for comparable mortgage servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income. All classes of servicing assets are subsequently measured using the amortization method which requires servicing rights to be amortized into noninterest income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans. As of December 31, 2018 and 2017, Lakeland had originated mortgage servicing rights of $68,000 and $88,000, respectively. Under the amortization measurement method, Lakeland subsequently measures servicing rights at fair value at each reporting date and records any impairment in value of servicing assets in earnings in the period in which the impairment occurs. The fair values of servicing rights are subject to fluctuations as a result of changes in estimated and actual prepayment speeds and default rates and losses. Servicing fee income, which is reported on the income statement as commissions and fees, is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of the outstanding principal or a fixed amount per loan, and are recorded as income when earned. |
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Transfers of Financial Assets | Transfers of Financial Assets Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, put presumptively beyond the reach of the transferor and its creditors even in bankruptcy or other receivership, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity or the ability to unilaterally cause the holder to return specific assets. |
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Derivatives | Derivatives Lakeland enters into interest rate swaps (“swaps”) with loan customers to provide a facility to mitigate the fluctuations in the variable rate on the respective loans. These swaps are matched in offsetting terms to swaps that Lakeland enters into with an outside third party. The swaps are reported at fair value in other assets or other liabilities. Lakeland’s swaps qualify as derivatives, but are not designated as hedging instruments, thus any net gain or loss resulting from changes in the fair value is recognized in other noninterest income. The credit risk associated with derivatives executed with customers is similar as that involved in extending loans and is subject to normal credit policies. Collateral is obtained based on management’s assessment of the customer. The positions of customer derivatives are recorded at fair value and changes in value are included in noninterest income on the consolidated statement of income. Cash flow hedges are used primarily to minimize the variability in cash flows of assets or liabilities, or forecasted transactions caused by interest rate fluctuations. Changes in the fair value of derivatives designated as cash flow hedges are recorded in accumulated other comprehensive income and are reclassified into the line item in the income statement in which the hedged item is recorded in the same period the hedged item affects earnings. Hedge ineffectiveness and gains and losses on the component of a derivative excluded in assessing hedge effectiveness are recorded in the same income statement line item. Further discussion of Lakeland’s financial derivatives is set forth in Note 19 to the Consolidated Financial Statements. |
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Earnings Per Share | Earnings Per Share Earnings per share is calculated on the basis of the weighted average number of common shares outstanding during the year. Basic earnings per share excludes dilution and is computed by dividing income available to common shareholders by the weighted average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock. |
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Employee Benefit Plans | Employee Benefit Plans The Company has certain employee benefit plans covering substantially all employees. The Company accrues such costs as incurred. We recognize the overfunded or underfunded status of pension and postretirement benefit plans in accordance with U.S. GAAP. Actuarial gains and losses, prior service costs or credits, and any remaining transition assets or obligations are recognized as a component of Accumulated Other Comprehensive Income, net of tax effects, until they are amortized as a component of net periodic benefit cost. |
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Comprehensive Income (Loss) | Comprehensive Income (Loss) The Company reports comprehensive income (loss) in addition to net income from operations. Other comprehensive income (loss) includes items recorded directly in equity such as unrealized gains or losses on securities available for sale as well as unrealized gains (losses) recorded on derivatives and benefit plans. |
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Goodwill and Other Identifiable Intangible Assets | Goodwill and Other Identifiable Intangible Assets Goodwill is presumed to have an indefinite useful life and is tested, at least annually, for impairment at the reporting unit level. Impairment exists when the carrying amount of goodwill exceeds its implied fair value. For purposes of our goodwill impairment testing, we have identified a single reporting unit, community banking. U.S. GAAP permits an entity to make a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the two-step goodwill impairment test. The Company completed its annual qualitative assessment as of November 30, 2018 and concluded that there was less than a 50% probability that the fair value of the reporting unit is less than its carrying amount and, therefore, the two-step goodwill impairment test was not required. |
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Bank Owned Life Insurance | Bank Owned Life Insurance Lakeland invests in bank owned life insurance (“BOLI”). BOLI involves the purchasing of life insurance by Lakeland on a chosen group of employees. Lakeland is the owner and beneficiary of the policies. At December 31, 2018 and 2017, Lakeland had $110.1 million and $107.5 million, respectively, in BOLI. Income earned on BOLI was $3.3 million, $2.4 million and $2.6 million for the years ended December 31, 2018, 2017 and 2016, respectively. BOLI is accounted for using the cash surrender value method and is recorded at its net realizable value. |
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Deferred Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities as measured by the enacted tax rates that will be in effect when these differences reverse. Deferred tax expense is the result of changes in deferred tax assets and liabilities. The principal types of differences between assets and liabilities for financial statement and tax return purposes are allowance for loan and lease losses, core deposit intangibles, deferred loan fees and deferred compensation. |
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Variable Interest Entities | Variable Interest Entities Management has determined that Lakeland Bancorp Capital Trust II and Lakeland Bancorp Capital Trust IV (collectively, “the Trusts”) qualify as variable interest entities. The Trusts issued mandatorily redeemable preferred stock to investors and loaned the proceeds to the Company. The Trusts hold, as their sole asset, subordinated debentures issued by the Company. The Company is not considered the primary beneficiary of the Trusts, therefore the Trusts are not consolidated in the Company’s financial statements. The Company’s maximum exposure to the Trusts is $30.0 million at December 31, 2018 which is the Company’s liability to the Trusts and includes the Company’s investment in the Trusts. The Federal Reserve has issued guidance on the regulatory capital treatment for the trust preferred securities issued by the Trusts. The rule retains the current maximum percentage of total capital permitted for trust preferred securities at 25%, but enacts other changes to the rules governing trust preferred securities that affect their use as part of the collection of entities known as “restricted core capital elements.” The rule allows bank holding companies to continue to count trust preferred securities as Tier 1 Capital. The Company’s capital ratios continue to be categorized as “well-capitalized” under the regulatory framework for prompt corrective action. Under the Collins Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act, any new issuance of trust preferred securities by the Company would not be eligible as regulatory capital. |
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New Accounting Pronouncements | New Accounting Pronouncements In August 2018, the Financial Accounting Standards Board ("FASB") issued an update to improve the effectiveness of fair value measurement disclosures. Among other provisions, the update removes requirements to disclose amounts and reasons of transfers between Level 1 and Level 2 in the fair value hierarchy, and it modifies the disclosures regarding transfers in and out of Level 3 of the fair value hierarchy. The update requires a discussion regarding the change in unrealized gains and losses included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period, and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2019. Because the Company does not typically have Level 3 fair value measurements, the update is expected to have an insignificant impact on the Company's financial statements. In August 2018, the FASB issued an update which aligns the requirements for capitalizing implementation costs in a cloud-computing arrangement service contract with the requirements for capitalizing implementation costs incurred for an internal-use software license. Implementation costs incurred by customers in a cloud computing arrangement are to be deferred and recognized over the term of the arrangement, if those costs would be capitalized by the customer in a software licensing arrangement under the internal-use software guidance. This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2019. The Company is currently assessing the impact that the guidance will have on its financial statements. In August 2018, the FASB issued an update which changes the disclosure of accounting and reporting requirements related to single-employer defined benefit pension or other postretirement benefit plans. The amendments in the update remove disclosures that are no longer considered cost-beneficial, clarify the specific requirements of disclosures and add disclosure requirements identified as relevant. For calendar-year public companies, the changes will be effective for annual periods, including interim periods within those annual periods, in 2020. Because the Company has minimal pension plan provisions that require calculation of projected benefit obligations or accumulated benefit obligations, the update is expected to have an insignificant impact on the Company's financial statements. In June 2018, the FASB issued an update expanding earlier guidance on stock compensation to include share-based payments issued to nonemployees for goods and services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially the same. This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2018. Earlier adoption is permitted. The adoption of this update had an insignificant impact on the Company's financial statements. In March 2018, the FASB issued an update regarding the accounting implications of the Tax Cuts and Jobs Act (the "Tax Act"). The update clarifies that in a company's financial statements that include the reporting period in which the Tax Act was enacted, a company must first reflect the income tax effects of the Tax Act in which the accounting under U.S. GAAP is complete. Those amounts would not be provisional amounts. The company would also report provisional amounts for those specific income tax effects for which the accounting under U.S. GAAP will be incomplete but for which a reasonable estimate can be determined. If there are income tax effects for the Tax Act for which a reasonable estimate cannot be determined, the company would not report provisional amounts and would continue to apply U.S. GAAP based on the tax laws that were in effect immediately prior to the Tax Act being enacted. This accounting update is effective immediately. The Company believes its accounting for the income tax effects of the Tax Act is complete. Technical corrections or other forthcoming guidance could change how we interpret provisions of the Tax Act, which may impact our effective tax rate and could affect our deferred tax assets, tax positions and/or our tax liabilities. In February 2018, the FASB issued an update regarding the reclassification of certain tax effects from accumulated other comprehensive income. This update requires a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the newly enacted federal corporate tax rate. The amount of the reclassification would be the difference between the historical 35% corporate income tax rate and the newly enacted 21% corporate tax rate. This update eliminates the stranded tax effects associated with the change in the federal corporate income tax rate in the Tax Act and improves the usefulness of information reported to financial statement users. The amendments are effective for all entities for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption of the amendments is permitted including adoption in any interim period, for public business entities for reporting periods for which financial statements have not yet been issued and all other entities for reporting periods for which financial statements have not yet been made available for issuance. An entity may apply the amendments in the update retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Act is recognized. The Company elected to adopt this update in December 2017 and recorded a $420,000 increase to retained earnings and reduction to accumulated other comprehensive income. In August 2017, the FASB issued an update intended to improve and simplify accounting rules around hedge accounting. Amendments expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. The amendments in this update also make certain targeted improvements to simplify the application of hedge accounting guidance and ease the administrative burden of hedge documentation requirements and assessing hedge effectiveness. In October 2018, the FASB issued an update to permit the use of the Overnight Index Swap ("OIS") rate based on the Secured Overnight Financing Rate ("SOFR") as a benchmark interest rate for hedge accounting purposes. These updates will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2018. The adoption of this update had an insignificant impact on the Company's financial statements. In July 2017, the FASB issued guidance which simplifies the accounting for certain financial instruments with down round features, a provision in an equity-linked financial instrument (or embedded feature) that provides a downward adjustment of the current exercise price based on the price of future equity offerings. The provisions of the new guidance related to down rounds are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company has no equity-linked financial instruments that have such down round features, therefore the adoption of this update had an insignificant impact on the Company's financial statements. In May 2017, the FASB issued an update which provides clarity and reduces diversity in practice when accounting for the modification of terms and conditions for share-based payment awards. Previous accounting guidance did not distinguish between modifications which were substantive from modifications that were merely administrative. The accounting standards update requires entities to account for the effects of a modification unless the following three conditions are met: the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified; the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. This update is effective for annual and interim periods beginning after December 15, 2017. The adoption of this update had an insignificant impact on the Company’s financial statements. In March 2017, the FASB issued an update which shortens the amortization period for certain callable debt securities held at a premium to the earliest call date. Under current GAAP, entities amortize the premium as an adjustment of yield over the contractual life of the instrument even if the holder is certain that the call will be exercised. As a result, upon the exercise of a call on a callable debt security held at a premium, the unamortized premium is recorded as a loss in earnings. The update shortens the amortization period for certain callable debt securities held at a premium and requires the premium be amortized to the earliest call date. This update will be effective for annual and interim periods beginning after December 15, 2018. Entities are required to apply the amendments on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The adoption of this update had an insignificant impact on the Company’s financial statements. In March 2017, the FASB issued an update which changes the presentation of net periodic pension cost and net periodic postretirement benefit cost in a company’s income statement. The amendment requires that an employer report the service cost component in the same line item as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. The amendment is effective for annual and interim periods beginning after December 15, 2017. Because the Company has minimal benefit plan provisions that require the measurement of net periodic pension cost and net periodic postretirement benefit cost, the adoption of this update had an insignificant impact on the Company’s financial statements. In January 2017, the FASB issued an update to simplify the test for goodwill impairment. This amendment eliminates Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. This update will be effective for the Company’s financial statements for annual years beginning after December 15, 2019. The adoption of this update is expected to have an insignificant impact on the Company’s financial statements. In January 2017, the FASB issued an update that clarifies the definition of a business as it pertains to business combinations. This amendment affects all companies and other reporting organizations that must determine whether they have sold or acquired a business. This update is effective for the Company’s financial statements for fiscal years beginning after December 15, 2017. The adoption of this update had an insignificant impact on the Company’s financial statements. In September 2016, the FASB issued an accounting standards update to address diversity in presentation in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This update is effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2017. The adoption of this update had an insignificant impact on the Company’s consolidated balance sheet or statement of income. In June 2016, the FASB issued an accounting standards update pertaining to the measurement of credit losses on financial instruments. This update requires the measurement of all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. This update is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2019. The Company is currently evaluating its existing systems and data to support the new standard as well as assessing the impact that the guidance will have on the Company's consolidated financial statements. The Company has formed a working group under the direction of the Chief Risk Officer that is comprised of individuals from the credit, risk management, finance and project management areas for implementation of this update. In early 2018, the Company contracted with a software and advisory service provider to aid in implementation. The Company continues to work with this service provider in assessing its data and preparing for implementation. In November 2018, the FASB issued additional codification improvements which clarified that operating leases are not part of the credit losses standard, but rather, should be accounted for in accordance with the leases standard. In February 2016, FASB issued accounting guidance that requires all lessees to recognize a lease liability and a right-of-use asset, measured at the present value of the future minimum lease payments, at the lease commencement date. Lessor accounting remains largely unchanged under the new guidance. The guidance is effective for fiscal years beginning after December 15, 2018, including interim reporting periods within that reporting period, with early adoption permitted. A modified retrospective approach must be applied for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. In the third quarter of 2018, the FASB issued updates which included targeted improvements to the leasing guidance that is intended to reduce costs and ease implementation of the leases standard. The improvements include an optional transition method to adopt the new leases standard where the entity could initially apply the new leases standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. Consequently, an entity's reporting for comparative periods presented in the financial statements in which it adopts the new leases standard, will continue to be in accordance with current GAAP in topic 840, Leases. An entity that adopts this additional transition method, must provide the required disclosures for all periods that continue to be in accordance with the current GAAP in Topic 840. The lease update also includes a practical expedient, by class of underlying asset, to not separate nonlease components from the associated lease component and, instead, to account for these components as a single component if the nonlease components otherwise would be accounted for under the new revenue guidance and both of the following conditions are met: 1) the timing and pattern of transfer of the nonlease component(s) and associated lease component are the same, and 2) the lease component, if accounted for separately, would be classified as an operating lease. The Company is adopting the ASUs related to Leases as of January 1, 2019. The Company reviewed its existing lease contracts and service contracts that may include embedded leases. The Company retained the services of a software provider to aid in implementation with the oversight of management. Management identified the complete population of contracts that would be required to be assessed under this standard. Management has elected the transition practical expedient option, which allowed us not to reassess 1) whether any contracts are or contain embedded leases; 2) the lease classification for any leases; and 3) whether initial direct costs meet the new definition, as of the initial adoption date. From the lessee perspective, no embedded leases were identified and we will recognize upon adoption, a Right of Use ("ROU") asset and a lease liability primarily related to real estate leases existing on January 1, 2019. Management is in process of completing its assessment which includes assessment of the leases from the Highlands Bancorp. Inc. acquisition which occurred early in first quarter 2019. In January 2016, the FASB issued an accounting standards update intended to improve the recognition and measurement of financial instruments. Specifically, the accounting standards update requires all equity instruments, with the exception of those that are accounted for under the equity method of accounting, to be measured at fair value with changes in the fair value recognized through net income. Additionally, public business entities are required to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. The amendments in this update also require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In February 2018, the FASB issued further guidance that provided technical corrections to this update. Those technical corrections included clarification on accounting for equity securities without a readily determinable fair value, remeasurement requirements on forward contracts and purchased options, and presentation requirements for certain fair value option liabilities. This amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The adoption of this update required an adjustment on January 1, 2018 from other comprehensive income to retained earnings for the amount of the unrealized gain on equity securities as of December 31, 2017. Thereafter, any increases or decreases to the market value on these equity securities will be recorded through the consolidated statements of income. Please see the Consolidated Statement of Changes in Stockholders' Equity, Note 4 - Investment Securities and Note 17 - Comprehensive Income (Loss) for more information. In May 2014, the FASB issued an accounting standards update that clarifies the principles for recognizing revenue. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to a customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for these goods or services. To achieve that core principle, an entity should apply the following steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. In 2016, the FASB issued further implementation guidance regarding revenue recognition. This additional guidance included clarification on certain principal versus agent considerations within the implementation of the guidance as well as clarification related to identifying performance obligations and licensing. The guidance also requires new qualitative and quantitative disclosures, including disaggregation of revenues and descriptions of performance obligations. The guidance along with its updates is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. In evaluating this standard, management has determined that the majority of revenue earned by the Company is from revenue streams not included in the scope of this standard. The Company has assessed its revenue streams and reviewed contracts potentially affected by the guidance including deposit related fees, interchange fees, investment commissions, merchant fee income and other noninterest income sources to determine the potential impact the new guidance is expected to have on the Company’s consolidated financial statements. The Company adopted the guidance on January 1, 2018 using the modified retrospective method. The Company did not have a cumulative-effect adjustment to opening retained earnings as a result of adopting this standard. Please see Note 14 - Revenue Recognition for more information. |
Earnings Per Share (Tables) |
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Computation of Basic and Diluted Earnings Per Share | The following tables present the computation of basic and diluted earnings per share for the periods presented.
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Investment Securities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Available-for-Sale Securities | The amortized cost, gross unrealized gains and losses and the fair value of the Company’s available for sale and held to maturity investment securities are as follows:
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Reconciliation of Held-to-Maturity Securities |
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Summary of Contractual Maturities of Investment Securities Classified as Available for Sale and Held to Maturity | The following table lists contractual maturities of investment securities classified as available for sale and held to maturity at December 31, 2018. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
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Sales of Securities, Gross Gains and Gross Losses on Sales of Securities | The following table shows proceeds from sales of securities, gross gains and gross losses on sales and calls of securities for the periods indicated:
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Reconciliation of Available-for-Sale and Held-to-Maturity Securities in Continuous Unrealized Loss Position | The following tables indicates the length of time individual securities have been in a continuous unrealized loss position at December 31, 2018 and 2017:
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Loans and Leases and Other Real Estate (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Composition of Lakeland`s Loan and Lease Portfolio | The following sets forth the composition of Lakeland’s loan and lease portfolio:
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Schedule of Changes in Accretable Yield | The following table presents changes in the accretable yield for PCI loans (in thousands):
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Lakeland's Non-Accrual Loans and Leases and Its Accruing Troubled Debt Restructurings (TDRs) | The following schedule sets forth certain information regarding Lakeland’s non-accrual loans and leases, its other real estate owned and other repossessed assets, and accruing troubled debt restructurings (“TDRs”) (in thousands):
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Age Analysis of Past Due Loans, Segregated by Class of Loans | An age analysis of past due loans, segregated by class of loans as of December 31, 2018 and 2017, is as follows:
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Impaired Loans with and without Specific Allowances | The following tables represent the Company's impaired loans at December 31, 2018, 2017 and 2016.
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Lakeland's Commercial Loan Portfolio | The following table shows Lakeland’s commercial loan portfolio as of December 31, 2018 and 2017, by the risk ratings discussed above (in thousands):
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Allowance for Loan and Lease Losses by Portfolio Segment and Related Recorded Investment in Loans and Leases | The following table details activity in the allowance for loan and lease losses by portfolio segment and the related recorded investment in loans and leases for the years ended December 31, 2018 and 2017:
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Summary of Restructured Loans | The following table summarizes loans and leases that have been restructured during the periods presented:
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Summary of Restructured Loans within Previous 12 Months that have Subsequently Defaulted | The following table presents loans and leases modified as TDRs within the previous 12 months from December 31, 2018 and 2017 that have defaulted during the subsequent twelve months:
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Summary of Future Minimum Lease Payments of Lease Receivables | Future minimum lease payments of lease receivables are expected as follows (in thousands):
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Premises and Equipment (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Premises and Equipment |
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Time Deposits (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||
Banking and Thrift [Abstract] | |||||||||||||||||||||||||||||||||||||
Schedule of Maturities of Certificates of Deposit | At December 31, 2018, the schedule of maturities of certificates of deposit is as follows (in thousands):
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Debt (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Information Relating to Securities Sold Under Agreements to Repurchase and Federal Funds Purchased | The following tables summarize information relating to securities sold under agreements to repurchase and federal funds purchased for the years presented. For purposes of the tables, the average amount outstanding was calculated based on a daily average.
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Summary of FHLB Debt Matures | FHLB debt matures as follows (in thousands):
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Income Taxes (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Income Taxes | The components of income taxes are as follows:
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Summary of Income Tax Provision Reconciled to Income Taxes that Computed at Statutory Federal Rate | The income tax provision reconciled to the income taxes that would have been computed at the statutory federal rate of 21% for 2018 and 35% for both 2017 and 2016 is as follows:
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Summary of Net Deferred Tax Asset | The net deferred tax asset consisted of the following:
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Directors Retirement Plan (Tables) - Director |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Status of Directors Retirement Plan | The measurement date for the accumulated benefit obligation is December 31 of the years presented.
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Components of Net Periodic Pension Cost |
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Benefits Expected to be Paid | The directors' retirement plan holds no plan assets. The benefits expected to be paid in each of the next five years and in aggregate for the five years thereafter are as follows (in thousands):
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Stock-Based Compensation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Option Activity under the Company's Stock Option Plans | A summary of the status of the Company’s option plans as of December 31, 2018 and the changes during the year ending on that date is represented below.
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Summary of Company's Restricted Stock | Information regarding the Company’s RSUs and changes during the year ended December 31, 2018 is as follows:
Information regarding the Company’s restricted stock for the year ended December 31, 2018 is as follows:
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Revenue Recognition (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following table sets forth the components of noninterest income for the years ended December 31, 2018, 2017 and 2016:
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Commitments and Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Aggregate Future Minimum Commitments of Lease Payments | At December 31, 2018, the minimum commitments under all noncancellable leases with remaining terms of more than one year and expiring through 2033 are as follows (in thousands):
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Financial Instruments with Off-Balance-Sheet Risk and Concentrations of Credit Risk (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Approximate Contract Amounts of Collateral or Other Security to Support Financial Instruments with Credit Risk | Lakeland generally requires collateral or other security to support financial instruments with credit risk. The approximate contract amounts are as follows:
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Comprehensive Income (Loss) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Other Comprehensive Income | The following table shows the changes in the balances of each of the components of other comprehensive income for the periods presented.
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Summary of Changes in Accumulated Other Comprehensive Income |
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Fair Value Measurement and Fair Value of Financial Instruments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Assets and Liabilities Measured on Recurring Basis | Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:
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Fair Value of Financial Assets Measured on Non-recurring Basis | The following table sets forth the Company’s financial assets subject to fair value adjustments (impairment) on a non-recurring basis. Assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:
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Carrying Values and Fair Values of Company's Financial Instruments | The following table presents the carrying values, fair values and placement in the fair value hierarchy of the Company’s financial instruments as of December 31, 2018 and December 31, 2017:
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Derivatives (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Information Regarding Derivatives | The following table presents summary information regarding these derivatives for the periods presented (dollars in thousands):
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Regulatory Matters (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Banking and Thrift [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Capital Ratios | As of December 31, 2018 and 2017, the Company and Lakeland have the following capital ratios based on the then current regulations:
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Goodwill and Other Intangible Assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Schedule of Estimated Future Amortization Expense | The estimated future amortization expense for each of the succeeding five years ended December 31 is as follows (in thousands):
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Condensed Financial Information - Parent Company Only (Tables) |
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Condensed Financial Information of Parent Company Only Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Balance Sheets | CONDENSED BALANCE SHEETS
|
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Condensed Statements of Operations | CONDENSED STATEMENTS OF INCOME
|
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Condensed Statements of Cash Flows |
CONDENSED STATEMENTS OF CASH FLOWS
|
Earnings Per Share - Additional Information (Detail) - shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options to purchase | 0 | 0 | 0 |
Investment Securities - Sales of Securities, Gross Gains and Gross Losses on Sales of Securities (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Investments, Debt and Equity Securities [Abstract] | |||
Sale proceeds | $ 0 | $ 4,500 | $ 15,654 |
Gross gains | 0 | 2,539 | 370 |
Gross losses | $ 0 | $ (15) | $ 0 |
Investment Securities - Additional Information (Detail) - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Jan. 01, 2018 |
|
Investment [Line Items] | ||||
Cumulative adjustment for adoption | $ 0 | |||
Equity securities, at fair value | $ 15,921,000 | $ 18,089,000 | ||
Loss on equity securities | (583,000) | 0 | $ 0 | |
Securities, carrying value | 476,300,000 | 400,400,000 | ||
Market value of equities | 2,700,000 | |||
Equity securities included in investment funds | 13,200,000 | |||
Investment in community development loans | $ 3,500,000 | |||
Redemption of funds | 60 days | |||
Unfunded commitments | $ 0 | |||
Amortized cost of securities | 10,400,000 | |||
Fair value of securities | $ 9,700,000 | |||
Retained Earnings | ||||
Investment [Line Items] | ||||
Cumulative adjustment for adoption | $ 2,000,000 | $ 2,043,000 |
Loans and Leases and Other Real Estate - Schedule of Changes in Accretable Yield (Detail) - Loans Acquired with Deteriorated Credit Quality - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward] | ||
Balance, beginning of period | $ 129 | $ 145 |
Accretion | (182) | (202) |
Net reclassification non-accretable difference | 134 | 186 |
Balance, end of period | $ 81 | $ 129 |
Loans and Leases and Other Real Estate - Summary of Restructured Loans within Previous 12 Months that have Subsequently Defaulted (Detail) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2018
USD ($)
Contract
|
Dec. 31, 2017
USD ($)
Contract
|
|
Financing Receivable, Modifications [Line Items] | ||
Number of Contracts | Contract | 1 | 2 |
Recorded Investment | $ | $ 171 | $ 35 |
Commercial, secured by real estate | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Contracts | Contract | 1 | 0 |
Recorded Investment | $ | $ 171 | $ 0 |
Leases | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Contracts | Contract | 0 | 2 |
Recorded Investment | $ | $ 0 | $ 35 |
Loans and Leases and Other Real Estate - Summary of Future Minimum Lease Payments of Lease Receivables (Detail) $ in Thousands |
Dec. 31, 2018
USD ($)
|
---|---|
Receivables [Abstract] | |
2018 | $ 30,384 |
2019 | 24,297 |
2020 | 18,089 |
2021 | 10,814 |
2022 | 3,969 |
Thereafter | 372 |
Total | $ 87,925 |
Premises and Equipment - Additional Information (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 5.3 | $ 5.0 | $ 5.0 |
Time Deposits - Schedule of Maturities of Certificates of Deposit (Detail) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Banking and Thrift [Abstract] | ||
2019 | $ 568,350 | |
2020 | 108,881 | |
2021 | 35,698 | |
2022 | 41,235 | |
2023 | 2,874 | |
Total | $ 757,038 | $ 737,428 |
Debt - Additional Information (Short Term Debt) (Detail) - Line of Credit - USD ($) |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Short-term Debt [Line Items] | ||
Overnight federal funds borrowed | $ 192,100,000 | $ 80,000,000 |
Overnight federal funds lines available for borrow | 210,000,000 | |
Federal Home Loan Bank of New York | ||
Short-term Debt [Line Items] | ||
Overnight borrowings | 0 | 0 |
Borrowings with the Federal Reserve Bank of New York | $ 0 | |
Federal Reserve Bank of New York | ||
Short-term Debt [Line Items] | ||
Borrowings with the Federal Reserve Bank | $ 0 |
Debt - Summary of Information Relating to Securities Sold Under Agreements to Repurchase and Federal Funds Purchased (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Federal Funds Purchased | |||
Short-term Debt [Line Items] | |||
Balance at December 31, | $ 192,064 | $ 80,000 | $ 32,000 |
Interest rate at December 31, | 2.88% | 1.71% | 0.85% |
Maximum amount outstanding at any month-end during the year | $ 214,165 | $ 168,784 | $ 133,434 |
Average amount outstanding during the year | $ 21,338 | $ 13,264 | $ 8,708 |
Weighted average interest rate during the year | 2.03% | 1.42% | 0.71% |
Securities Sold Under Agreements to Repurchase | |||
Short-term Debt [Line Items] | |||
Balance at December 31, | $ 41,841 | $ 44,936 | $ 24,354 |
Interest rate at December 31, | 0.26% | 0.02% | 0.02% |
Maximum amount outstanding at any month-end during the year | $ 50,526 | $ 44,936 | $ 32,872 |
Average amount outstanding during the year | $ 32,435 | $ 28,480 | $ 27,535 |
Weighted average interest rate during the year | 0.12% | 0.03% | 0.03% |
Debt - Summary of FHLB Debt Matures (Detail) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Debt Disclosure [Abstract] | ||
2019 | $ 40,264 | |
2020 | 55,880 | |
2021 | 44,971 | |
2022 | 15,566 | |
2023 | 24,437 | |
Total | $ 181,118 | $ 172,000 |
Income Taxes - Components of Income Taxes (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Income Tax Disclosure [Abstract] | |||
Current tax provision | $ 30,459 | $ 10,565 | $ 22,308 |
Deferred tax (benefit) expense | (13,571) | 16,904 | (987) |
Total provision for income taxes | $ 16,888 | $ 27,469 | $ 21,321 |
Income Taxes - Additional Information (Detail) - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Jul. 01, 2018 |
|
Income Tax Disclosure [Line Items] | ||||
Unrealized losses on securities available for sale | $ 17,189,000 | $ 2,857,000 | ||
Tax Cuts and Jobs Act of 2017, change in tax rate, deferred tax asset, income tax expense (benefit) | 1,300,000 | |||
Excise tax on real estate investment trust (REIT) dividend | $ 0 | 1,945,000 | $ 0 | |
Effective income tax rate reconciliation, change in enacted tax rate and excise tax on real estate investment trust dividend, amount | $ 602,000 | |||
Statutory federal rate | 21.00% | 35.00% | 35.00% | |
Unrecognized tax benefits | $ 0 | $ 0 | ||
Income tax penalties and interest expense | $ 0 | $ 0 | ||
New Jersey Division of Taxation [Member] | State and Local Jurisdiction [Member] | ||||
Income Tax Disclosure [Line Items] | ||||
Unrealized losses on securities available for sale | $ 943,000 |
Income Taxes - Summary of Income Tax Provision Reconciled to Income Taxes that Computed at Statutory Federal Rate (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Income Tax Disclosure [Abstract] | |||
Federal income tax, at statutory rates | $ 16,861 | $ 28,017 | $ 21,994 |
Increase (deduction) in taxes resulting from: | |||
Tax-exempt income | (1,096) | (1,652) | (1,671) |
Excise tax on real estate investment trust (REIT) dividend | 0 | 1,945 | 0 |
Adjustment to net deferred tax asset for Tax Cuts and Jobs Act | 0 | (1,343) | 0 |
State income tax, net of federal income tax effect | 1,880 | 931 | 552 |
Adjustment to net deferred tax asset for change in NJ tax law | (943) | 0 | 0 |
Excess tax benefits from employee share-based payments | (318) | (587) | 0 |
Other, net | 504 | 158 | 446 |
Total provision for income taxes | $ 16,888 | $ 27,469 | $ 21,321 |
Directors Retirement Plan - Additional Information (Detail) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Minimum period of service for retirement | 5 years | ||
Maximum payment period for benefits | 10 years | ||
Director's Retirement Plan | |||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Discount rate of directors retirement plan | 3.97% | 3.30% | 3.68% |
Plan assets of director's retirement plan | $ 0 | ||
Contribution to the director's retirement plan | 57,000 | ||
Minimum | |||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Remuneration rate for board of directors | 5,000 | ||
Maximum | |||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Remuneration rate for board of directors | $ 17,500 |
Directors Retirement Plan - Status of Directors Retirement Plan (Detail) - Director - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Defined Benefit Plan Disclosure [Line Items] | ||
Accrued plan cost included in other liabilities | $ 604 | $ 673 |
Recognized in accumulated other comprehensive income | ||
Net actuarial gain | (29) | 28 |
Unrecognized prior service cost | 0 | 0 |
Amounts not recognized as a component of net postretirement benefit (benefit) | $ (29) | $ 28 |
Directors Retirement Plan - Components of Net Periodic Plan Cost for Retirement Plan (Detail) - Director's Retirement Plan - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Net periodic plan cost included the following components: | |||
Service cost | $ 15 | $ 21 | $ 19 |
Interest cost | 20 | 23 | 26 |
Amortization of prior service cost | 0 | 3 | 12 |
Net periodic postretirement cost | $ 35 | $ 47 | $ 57 |
Directors Retirement Plan - Benefits Expected to be Paid (Detail) - Director $ in Thousands |
Dec. 31, 2018
USD ($)
|
---|---|
Defined Benefit Plan Disclosure [Line Items] | |
2019 | $ 57 |
2020 | 63 |
2021 | 37 |
2022 | 38 |
2023 | 38 |
2024 - 2028 | $ 235 |
Stock-Based Compensation - Option Activity under the Company's Stock Option Plans (Detail) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Number of Shares | ||
Balance at beginning of period | 102,216 | |
Granted | 0 | |
Exercised | (34,728) | |
Expired | 0 | |
Forfeited | 0 | |
Balance at end of period | 67,488 | 102,216 |
Options exercisable at year-end | 67,488 | |
Weighted Average Exercise Price | ||
Balance beginning of period | $ 8.49 | |
Granted | 0.00 | |
Exercised | 8.84 | |
Expired | 0.00 | |
Forfeited | 0.00 | |
Balance end of period | 8.28 | $ 8.49 |
Options exercisable at year-end | $ 8.28 | |
Outstanding, Weighted average remaining contractual term (in years), Ending balance | 2 years 10 months 10 days | 4 years 3 months 7 days |
Options exercisable, Weighted average remaining contractual term (in years), Ending balance | 2 years 10 months 10 days | |
Outstanding, Aggregate intrinsic value | $ 440,483 | $ 1,101,806 |
Options exercisable at year end, Aggregate intrinsic value | $ 440,483 |
Revenue Recognition (Details) |
12 Months Ended |
---|---|
Dec. 31, 2018
Segment
Region
| |
Revenue from Contract with Customer [Abstract] | |
Number of Geographic Regions | Region | 1 |
Number of operating segments | Segment | 1 |
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Commitments and Contingencies Disclosure [Abstract] | |||
Rent expense under long-term operating leases | $ 3,000 | $ 3,100 | $ 3,200 |
Rent expense to related parties | $ 144 | $ 144 | $ 141 |
Commitments and Contingencies - Aggregate Future Minimum Commitments of Lease Payments (Detail) $ in Thousands |
Dec. 31, 2018
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
2019 | $ 3,191 |
2020 | 3,055 |
2021 | 2,866 |
2022 | 2,572 |
2023 | 2,233 |
Thereafter | 14,642 |
Total | $ 28,559 |
Financial Instruments with Off-Balance-Sheet Risk and Concentrations of Credit Risk - Summary of Approximate Contract Amounts of Collateral or Other Security to Support Financial Instruments with Credit Risk (Detail) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Standby letters of credit and financial guarantees written | ||
Schedule Of Financial Instruments With Off Balance Sheet Credit Risk [Line Items] | ||
Financial instruments with off-balance sheet risks, contract amount | $ 21,585 | $ 14,832 |
Commitments to extend credit | ||
Schedule Of Financial Instruments With Off Balance Sheet Credit Risk [Line Items] | ||
Financial instruments with off-balance sheet risks, contract amount | $ 973,709 | $ 966,441 |
Fair Value Measurement and Fair Value of Financial Instruments - Fair Value of Financial Assets Measured on Non-recurring Basis (Detail) - Fair Value, Measurements, Non-recurring - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans and leases | $ 19,702 | $ 22,591 |
Loans held for sale | 1,113 | 456 |
Other real estate owned and other repossessed assets | 830 | 843 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for sale | 1,113 | 456 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans and leases | 19,702 | 22,591 |
Other real estate owned and other repossessed assets | $ 830 | $ 843 |
Fair Value Measurement and Fair Value of Financial Instruments - Additional Information (Detail) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term municipal bond | $ 6,000 | |
Subordinate debt | 105,027 | $ 104,902 |
Non-rated | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Subordinate debt | $ 1,000 | |
Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Discount rates | 5.00% | |
Capitalization rates | 4.00% | |
Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Discount rates | 11.00% | |
Capitalization rates | 9.00% |
Derivatives - Additional Information (Detail) |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
Jun. 30, 2016
USD ($)
Derivative
|
|
Derivative [Line Items] | ||||
Available for sale securities pledged for collateral | $ 498,000 | $ 500,000,000 | ||
Interest expense | 39,562,000 | $ 24,966,000 | $ 17,647,000 | |
Reclassification Out of Accumulated Other Comprehensive Income | ||||
Derivative [Line Items] | ||||
Interest expense | $ 509,000 | |||
Cash Flow Hedging | Interest Rate Swaps | ||||
Derivative [Line Items] | ||||
Number of derivatives | Derivative | 2 | |||
Notional amount | $ 30,000,000 | |||
Average interest rate | 1.10% | |||
Variable rate basis | 3 month LIBOR | |||
Amount of ineffective hedges | $ 0 | |||
Interest expense | $ 329,000 |
Regulatory Matters - Additional Information (Detail) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2018
USD ($)
| |
Banking and Thrift [Abstract] | |
Percentage of surplus | Not less than 50% |
Amount of capital available for payment of dividends | $ 544.1 |
Tier 1 capital conservation buffer of risk-weighted assets | 2.50% |
Capital conservation buffer of risk-weighted assets, 2016 | 0.625% |
Tier 1 capital conservation buffer of risk-weighted assets, 2017 | 0.625% |
Tier 1 capital conservation buffer of risk-weighted assets, 2018 | 0.625% |
Tier 1 capital conservation buffer of risk-weighted assets, 2019 | 0.625% |
Goodwill and Other Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands |
12 Months Ended | |||||
---|---|---|---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Jul. 01, 2016 |
Jan. 07, 2016 |
May 31, 2013 |
|
Goodwill And Intangible Assets [Line Items] | ||||||
Goodwill | $ 136,433 | $ 136,433 | ||||
Core deposit intangible | 1,800 | 2,400 | ||||
Amortization of core deposit intangible | $ 594 | $ 654 | $ 734 | |||
Harmony Bank | ||||||
Goodwill And Intangible Assets [Line Items] | ||||||
Core deposit intangible | $ 691 | |||||
Pascack Bancorp, Inc. | ||||||
Goodwill And Intangible Assets [Line Items] | ||||||
Core deposit intangible | $ 1,500 | |||||
Somerset Hills Acquisition | ||||||
Goodwill And Intangible Assets [Line Items] | ||||||
Core deposit intangible | $ 2,700 |
Goodwill and Other Intangible Assets - Schedule of Estimated Future Amortization Expense (Detail) $ in Thousands |
Dec. 31, 2018
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
2019 | $ 505 |
2020 | 415 |
2021 | 326 |
2022 | 236 |
2023 | $ 147 |
Condensed Financial Information - Parent Company Only - Condensed Balance Sheets (Detail) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|---|---|
ASSETS | ||||
Cash and due from banks | $ 208,599 | $ 142,933 | $ 175,801 | $ 118,493 |
Equity securities | 638,618 | 628,046 | ||
Investment securities, held to maturity | 153,646 | 139,685 | ||
Other assets | 42,308 | 35,576 | ||
TOTAL ASSETS | 5,806,093 | 5,405,639 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||
Other liabilities | 41,634 | 31,920 | ||
Subordinated debentures | 105,027 | 104,902 | ||
Total stockholders’ equity | 623,739 | 583,122 | 550,044 | 400,516 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 5,806,093 | 5,405,639 | ||
Parent Company | ||||
ASSETS | ||||
Cash and due from banks | 23,285 | 17,695 | $ 11,675 | $ 15,921 |
Equity securities | 2,743 | 5,158 | ||
Investment securities, held to maturity | 1,000 | 1,000 | ||
Investment in subsidiaries | 695,571 | 659,180 | ||
Other assets | 7,182 | 6,013 | ||
TOTAL ASSETS | 729,781 | 689,046 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||
Other liabilities | 1,015 | 1,022 | ||
Subordinated debentures | 105,027 | 104,902 | ||
Total stockholders’ equity | 623,739 | 583,122 | ||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 729,781 | $ 689,046 |
Condensed Financial Information - Parent Company Only - Condensed Statements of Operations (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
INCOME | |||
Other income | $ 2,182 | $ 3,123 | $ 1,769 |
EXPENSE | |||
Noninterest expenses | 111,167 | 104,534 | 99,917 |
Income taxes (benefit) provision | 16,888 | 27,469 | 21,321 |
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS | 63,401 | 52,580 | 41,518 |
Parent Company | |||
INCOME | |||
Dividends from subsidiaries | 30,589 | 26,665 | 20,687 |
Other income | (125) | 2,750 | 199 |
TOTAL INCOME | 30,464 | 29,415 | 20,886 |
EXPENSE | |||
Interest on subordinated debentures | 5,141 | 5,091 | 2,171 |
Noninterest expenses | 506 | 377 | 442 |
TOTAL EXPENSE | 5,647 | 5,468 | 2,613 |
Income before (benefit) provision for income taxes | 24,817 | 23,947 | 18,273 |
Income taxes (benefit) provision | (1,130) | (2,018) | (845) |
Income before equity in undistributed income of subsidiaries | 25,947 | 25,965 | 19,118 |
Equity in undistributed income of subsidiaries | 37,454 | 26,615 | 22,400 |
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS | $ 63,401 | $ 52,580 | $ 41,518 |
Label | Element | Value |
---|---|---|
Common Stock [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | $ 512,734,000 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 0 |
Retained Earnings [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | $ 74,780,000 |
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