10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark one)

☒    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended		September 30, 2019
	OR

☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 000-17820

LAKELAND BANCORP, INC.

(Exact name of registrant as specified in its charter)

New Jersey	22-2953275
(State or other jurisdiction of  incorporation  or organization)	(I.R.S. Employer Identification No.)

250 Oak Ridge Road, Oak Ridge, New Jersey 07438

 (Address of principal executive offices and zip code)

(973) 697-2000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of exchange on which registered
Common Stock, no par value	LBAI	The NASDAQ Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit such files).  Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer ☒    Accelerated filer ☐    Non-accelerated filer ☐  Smaller reporting company ☐  Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): Yes  ☐    No  ☒

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of November 1, 2019, there were 50,498,410 outstanding shares of Common Stock, no par value.

1

LAKELAND BANCORP, INC.

Form 10-Q Index

		PAGE
	Part I.     Financial Information
Item 1.	Financial Statements:
	Consolidated Balance Sheets as of September 30, 2019 (unaudited) and December 31, 2018	3
	Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2019 and 2018 (unaudited)	4
	Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2019 and 2018 (unaudited)	5
	Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2019 and 2018 (unaudited)	6
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2019 and 2018 (unaudited)	8
	Notes to Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	38
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	51
Item 4.	Controls and Procedures	52
	Part II.     Other Information
Item 1.	Legal Proceedings	53
Item 1A.	Risk Factors	53
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	53
Item 3.	Defaults Upon Senior Securities	53
Item 4.	Mine Safety Disclosures	53
Item 5.	Other Information	53
Item 6.	Exhibits	53
Signatures		54

2

PART I. FINANCIAL INFORMATION

Item 1.        Financial Statements

Lakeland Bancorp, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS

	September 30, 2019			December 31, 2018
(dollars in thousands)	(unaudited)
ASSETS
Cash	$	249,553		$	205,199
Interest-bearing deposits due from banks	32,405			3,400
Total cash and cash equivalents	281,958			208,599
Investment securities available for sale, at fair value	720,405			638,618
Equity securities, at fair value	15,552			15,921
Investment securities held to maturity; fair value of $152,495 at September 30, 2019 and $150,932 at December 31, 2018	151,115			153,646
Federal Home Loan Bank and other membership bank stock, at cost	18,006			13,301
Loans held for sale	3,077			1,113
Loans, net of deferred fees	4,923,414			4,456,733
Allowance for loan losses	(38,655		)	(37,688		)
Net loans	4,884,759			4,419,045
Premises and equipment, net	47,372			49,175
Operating lease right-of-use assets	17,953			—
Accrued interest receivable	16,573			16,114
Goodwill	156,277			136,433
Other identifiable intangible assets	4,602			1,768
Bank owned life insurance	111,717			110,052
Other assets	63,108			42,308
TOTAL ASSETS	$	6,492,474		$	5,806,093
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest-bearing	$	1,101,083		$	950,218
Savings and interest-bearing transaction accounts	3,196,323			2,913,414
Time deposits $250 thousand and under	682,677			589,737
Time deposits over $250 thousand	230,536			167,301
Total deposits	5,210,619			4,620,670
Federal funds purchased and securities sold under agreements to repurchase	199,326			233,905
Other borrowings	165,818			181,118
Subordinated debentures	118,211			105,027
Operating lease liabilities	19,509			—
Other liabilities	65,787			41,634
TOTAL LIABILITIES	5,779,270			5,182,354
STOCKHOLDERS’ EQUITY
Common stock, no par value; authorized shares, 100,000,000; issued shares, 50,489,161 at September 30, 2019 and 47,486,250 at December 31, 2018	559,595			514,703
Retained earnings	150,399			116,874
Accumulated other comprehensive income (loss)	3,210			(7,838		)
TOTAL STOCKHOLDERS’ EQUITY	713,204			623,739
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	6,492,474		$	5,806,093

The accompanying notes are an integral part of these consolidated financial statements.

3

Lakeland Bancorp, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
(in thousands, except per share data)	2019			2018			2019		2018
INTEREST INCOME
Loans and fees	$	58,563		$	49,181		$	175,324	$	142,384
Federal funds sold and interest-bearing deposits with banks	695			533			1,297		844
Taxable investment securities and other	5,007			4,141			14,865		12,160
Tax-exempt investment securities	361			427			1,165		1,299
TOTAL INTEREST INCOME	64,626			54,282			192,651		156,687
INTEREST EXPENSE
Deposits	13,267			8,429			37,526		20,685
Federal funds purchased and securities sold under agreements to repurchase	231			42			1,333		409
Other borrowings	2,446			2,187			7,306		6,240
TOTAL INTEREST EXPENSE	15,944			10,658			46,165		27,334
NET INTEREST INCOME	48,682			43,624			146,486		129,353
Provision for loan losses	536			1,046			1,044		3,822
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	48,146			42,578			145,442		125,531
NONINTEREST INCOME
Service charges on deposit accounts	2,851			2,614			8,179		7,770
Commissions and fees	1,545			1,414			4,682		4,096
Income on bank owned life insurance	691			1,127			2,064		2,557
Gain on equity securities	72			(439		)	525		(384		)
Gains on sales of loans	486			484			1,285		1,030
Other income	1,055			439			2,077		1,613
TOTAL NONINTEREST INCOME	6,700			5,639			18,812		16,682
NONINTEREST EXPENSE
Salaries and employee benefits	19,062			17,352			57,672		50,921
Net occupancy expense	2,767			2,316			8,350		7,657
Furniture and equipment	2,084			2,070			6,365		6,287
FDIC insurance expense	(420		)	400			431		1,225
Stationery, supplies and postage	366			371			1,214		1,230
Marketing expense	423			343			1,430		1,160
Data processing expense	1,248			1,083			3,800		2,525
Telecommunications expense	480			438			1,451		1,321
ATM and debit card expense	588			556			1,773		1,624
Core deposit intangible amortization	288			142			893		452
Other real estate and repossessed asset expense	29			45			223		112
Merger related expenses	—			—			3,178		—
Other expenses	2,648			2,677			8,453		7,990
TOTAL NONINTEREST EXPENSE	29,563			27,793			95,233		82,504
Income before provision for income taxes	25,283			20,424			69,021		59,709
Provision for income taxes	6,409			3,666			17,064		11,858
NET INCOME	$	18,874		$	16,758		$	51,957	$	47,851
PER SHARE OF COMMON STOCK
Basic earnings	$	0.37		$	0.35		$	1.02	$	1.00
Diluted earnings	$	0.37		$	0.35		$	1.02	$	0.99
Dividends	$	0.125		$	0.115		$	0.365	$	0.330

The accompanying notes are an integral part of these consolidated financial statements.

4

Lakeland Bancorp, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
(in thousands)	2019			2018			2019			2018
NET INCOME	$	18,874		$	16,758		$	51,957		$	47,851
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Unrealized gains (losses) on securities available for sale	1,480			(2,019		)	11,619			(9,441		)
Unrealized (losses) gains on derivatives	(78		)	6			(571		)	342
Other comprehensive income (loss)	1,402			(2,013		)	11,048			(9,099		)
TOTAL COMPREHENSIVE INCOME	$	20,276		$	14,745		$	63,005		$	38,752

The accompanying notes are an integral part of these consolidated financial statements.

5

Lakeland Bancorp, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

For the Three Months Ended September 30, 2019 and 2018

(in thousands, except per share data)	Common Stock			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
At July 1, 2018	$	513,756		$	95,586		$	(11,478	)	$	597,864
Net income	—			16,758			—			16,758
Other comprehensive loss, net of tax	—			—			(2,013		)	(2,013		)
Stock based compensation	471			—			—			471
Retirement of restricted stock	(15		)	—			—			(15		)
Cash dividends on common stock of $0.115 per share	—			(5,510		)	—			(5,510		)
At September 30, 2018	$	514,212		$	106,834		$	(13,491	)	$	607,555
At July 1, 2019	$	558,768		$	137,887		$	1,808		$	698,463
Net income	—			18,874			—			18,874
Other comprehensive income, net of tax	—			—			1,402			1,402
Stock based compensation	558			—			—			558
Exercise of stock options	307			—			—			307
Retirement of restricted stock	(38		)	—			—			(38		)
Cash dividends on common stock of $0.125 per share	—			(6,362		)	—			(6,362		)
At September 30, 2019	$	559,595		$	150,399		$	3,210		$	713,204

The accompanying notes are an integral part of these consolidated financial statements.

6

Lakeland Bancorp, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

For the Nine Months Ended September 30, 2019 and 2018

(in thousands, except per share data)	Common Stock			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
At January 1, 2018	$	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	—			47,851			—			47,851
Other comprehensive loss, net of tax	—			—			(9,099		)	(9,099		)
Stock based compensation	1,930			—			—			1,930
Exercise of stock options	307			—			—			307
Retirement of restricted stock	(759		)	—			—			(759		)
Cash dividends on common stock of $0.33 per share	—			(15,797		)	—			(15,797		)
At September 30, 2018	$	514,212		$	106,834		$	(13,491	)	$	607,555
At January 1, 2019	$	514,703		$	116,874		$	(7,838	)	$	623,739
Cumulative adjustment for adoption of ASU 2016-02	—			125			—			125
January 1, 2019, as adjusted	514,703			116,999			(7,838		)	623,864
Net income	—			51,957			—			51,957
Other comprehensive income, net of tax	—			—			11,048			11,048
Stock based compensation	1,822			—			—			1,822
Exercise of stock options	307			—			—			307
Issuance of stock for Highlands acquisition	43,417			—			—			43,417
Retirement of restricted stock	(654		)	—			—			(654		)
Cash dividends on common stock of $0.365 per share	—			(18,557		)	—			(18,557		)
At September 30, 2019	$	559,595		$	150,399		$	3,210		$	713,204

The accompanying notes are an integral part of these consolidated financial statements.

7

Lakeland Bancorp, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	For the Nine Months Ended September 30,
(in thousands)	2019			2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	51,957		$	47,851
Adjustments to reconcile net income to net cash provided by operating activities:
Net amortization of premiums, discounts and deferred loan fees and costs	1,838			3,548
Depreciation and amortization	1,162			4,114
Amortization of intangible assets	893			452
Amortization of operating lease right-of-use assets	1,938			—
Provision for loan losses	1,044			3,822
Loans originated for sale	(40,074		)	(35,270		)
Proceeds from sales of loans held for sale	40,508			34,932
Change in market value of equity securities	(525		)	366
Gains on proceeds from bank owned life insurance policies	—			(421		)
Gains on sales of loans held for sale	(1,285		)	(546		)
Losses (gains) on other real estate and other repossessed assets	87			(98		)
Losses on sales of premises and equipment	486			3
Stock-based compensation	1,822			1,930
Deferred tax benefit	—			(1,263		)
Excess tax benefits	183			313
Increase in other assets	(20,386		)	(1,438		)
Increase in other liabilities	21,935			8,105
NET CASH PROVIDED BY OPERATING ACTIVITIES	61,583			66,400
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash acquired in acquisitions	13,454			—
Proceeds from repayments and maturities of available for sale securities	102,133			68,240
Proceeds from repayments and maturities of held to maturity securities	22,330			18,229
Proceeds from sales of equity securities	1,153			2,155
Purchase of available for sale securities	(149,182		)	(68,845		)
Purchase of held to maturity securities	(18,897		)	(37,655		)
Purchase of equity securities	(259		)	(469		)
Death benefit proceeds from bank owned life insurance policy	121			755
Proceeds from redemptions of Federal Home Loan Bank stock	79,217			5,716
Purchases of Federal Home Loan Bank stock	(82,155		)	(6,598		)
Net increase in loans	(38,613		)	(181,561		)
Proceeds from sales of other real estate and repossessed assets	399			1,795
Proceeds from dispositions and sales of premises and equipment	1,827			61
Purchases of premises and equipment	(4,166		)	(3,899		)
NET CASH USED IN INVESTING ACTIVITIES	(72,638		)	(202,076		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits	180,990			274,029
Decrease in federal funds purchased and securities sold under agreements to repurchase	(34,579		)	(77,538		)
Proceeds from other borrowings	46,260			39,437
Repayments of other borrowings	(89,353		)	(46,700		)
Exercise of stock options	307			307
Retirement of restricted stock	(654		)	(759		)
Dividends paid	(18,557		)	(15,797		)
NET CASH PROVIDED BY FINANCING ACTIVITIES	84,414			172,979
Net increase in cash and cash equivalents	73,359			37,303
Cash and cash equivalents, beginning of period	208,599			142,933
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	281,958		$	180,236

8

	For the Nine Months Ended September 30,
(in thousands)	2019		2018
Supplemental schedule of non-cash investing and financing activities:
Cash paid during the period for income taxes	$	10,847	$	4,614
Cash paid during the period for interest	46,532		25,748
Transfer of loans into other repossessed assets and other real estate owned	599		3,608
Initial recognition of operating lease right-of-use assets	18,651		—
Initial recognition of operating lease liabilities	20,203		—
Acquisitions:
Non-cash assets acquired:
Federal Home Loan Bank stock	1,767		—
Investment securities available for sale	22,734		—
Loans, including loans held for sale	426,118		—
Goodwill and other intangible assets, net	23,125		—
Other assets	9,304		—
Total non-cash assets acquired	483,048		—
Liabilities assumed:
Deposits	409,638		—
Other borrowings	40,957		—
Other liabilities	2,490		—
Total liabilities assumed	453,085		—
Common stock issued	$	43,417	$	—

The accompanying notes are an integral part of these consolidated financial statements.

9

Lakeland Bancorp, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

This quarterly report presents the consolidated financial statements of Lakeland Bancorp, Inc. and its subsidiaries, including Lakeland Bank (“Lakeland”) and Lakeland’s wholly owned subsidiaries (collectively, the “Company”). The accounting and reporting policies of the Company conform with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and predominant practices within the banking industry. The Company’s unaudited interim financial statements reflect all adjustments, such as normal recurring accruals that are, in the opinion of management, necessary for the fair presentation of the results of the interim periods. The results of operations for the nine months ended September 30, 2019 do not necessarily indicate the results that the Company will achieve for all of 2019.

Certain information and footnote disclosures required under U.S. GAAP have been condensed or omitted, as permitted by rules and regulations of the Securities and Exchange Commission. These unaudited interim financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes that are presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. Certain reclassifications have been made in the consolidated financial statements to conform with current year classifications.

NOTE 2 – ACQUISITIONS

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 stock 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.

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.

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. The fair values are preliminary estimates and subject to adjustment for up to one year after the closing date of the acquisition.

As a result of new information obtained during the quarter ended September 30, 2019, about facts and circumstances that existed as of the acquisition date, the Company revised the estimated fair value on two Highlands branches acquired. The adjustment resulted in an increase in goodwill of $447,000.

10

The following table summarizes the estimated fair value of the acquired assets and liabilities assumed at the date of acquisition for Highlands.

(in thousands)
Cash and cash equivalents	$	13,454
Securities, available for sale	22,734
Federal Home Loan Bank stock	1,767
Loans held for sale	1,113
Loans	425,005
Premises and equipment	2,613
Goodwill	19,844
Identifiable intangible assets	3,728
Accrued interest receivable and other assets	6,244
Total assets acquired	496,502
Deposits	(409,638		)
Other borrowings	(27,800		)
Subordinated debt	(13,157		)
Other liabilities	(2,490		)
Total liabilities assumed	(453,085		)
Net assets acquired	$	43,417

Loans acquired in the Highlands acquisition were recorded at fair value and subsequently accounted for in accordance with ASC Topic 310. There was no carryover related allowance for loan losses. The fair values of loans acquired from Highlands were estimated using cash flow projections based on the remaining maturity and repricing terms. Cash flows were adjusted for estimated future credit losses and the rate of prepayments. Projected cash flows were then discounted to present value using a risk-adjusted market rate for similar loans.

The following is a summary of the credit impaired loans acquired in the Highlands acquisition as of the closing date.

(in thousands)
Contractually required principal and interest at acquisition	$	22,363
Contractual cash flows not expected to be collected (non-accretable difference)	7,129
Expected cash flows at acquisition	$	15,234
Interest component of expected cash flows (accretable difference)	1,431
Fair value of acquired loans	$	13,803

The core deposit intangible totaled $3.7 million and is being amortized over its estimated useful life of approximately ten years using an accelerated method. The goodwill will be evaluated annually for impairment. The goodwill is not deductible for tax purposes.

The fair values of deposit liabilities with no stated maturities such as checking, money market and savings accounts, were assumed to equal the carrying amounts since these deposits are payable on demand. The fair values of certificates of deposits and IRAs represent the present value of contractual cash flows discounted at market rates for similar certificates of deposit.

Direct costs related to the acquisition were expensed as incurred. During the three and nine months ended September 30, 2019, the Company incurred $0 and $3.2 million of merger and acquisition integration-related expenses, respectively, which have been separately stated in the Company's Consolidated Statements of Income.

11

Supplemental Pro Forma Financial Information

The following table provides unaudited condensed pro forma financial information assuming that the Highlands acquisition had been completed as of January 1, 2019, for the nine months ended September 30, 2019 and as of January 1, 2018 for the nine months ended September 30, 2018. The table below has been prepared for comparative purposes only and is not necessarily indicative of the actual results that would have been attained had the acquisitions occurred as of the beginning of the periods presented, nor is it indicative of future results. Furthermore, the unaudited pro forma information does not reflect management’s estimate of any revenue-enhancing opportunities nor anticipated cost savings or the impact of conforming certain accounting policies of the acquired companies to the Company’s policies that may have occurred as a result of the integration and consolidation of Highlands' operations. The pro forma information shown reflects adjustments related to certain purchase accounting fair value adjustments; amortization of core deposit and other intangibles; and related income tax effects. The Company has not provided separate information regarding revenue and earnings of Highlands since the acquisition because of the manner in which Highlands' branches and lending team were immediately merged into Lakeland’s branches and lending team making such information impracticable to provide.

	Pro Forma Nine Months Ended
(in thousands)	September 30, 2019		September 30, 2018
Net interest income	$	146,633	$	143,250
Provision for loan losses	1,044		4,219
Noninterest income	18,783		19,029
Noninterest expense	92,136		92,344
Net income	54,373		52,244
Earnings per share:
Fully diluted	$	1.07	$	1.03

NOTE 3 – REVENUE RECOGNITION

The Company’s primary source of revenue is interest income generated from loans and investment securities. Interest income is recognized according to the terms of the financial instrument agreement over the life of the loan 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 fees, merchant fees, loan sales, investment services 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.

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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 three and nine months ended September 30, 2019 and 2018:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(in thousands)	2019		2018		2019		2018
Deposit Related Fees and Charges:
Debit card interchange income	$	1,429	$	1,280	$	4,059	$	3,675
Overdraft charges	1,047		966		3,024		2,975
ATM service charges	226		220		626		627
Demand deposit fees and charges	124		119		389		398
Savings service charges	25		29		81		95
Total	2,851		2,614		8,179		7,770
Commissions and Fees:
Loan fees	303		267		1,182		952
Wire transfer charges	316		291		888		813
Investment services income	474		378		1,253		917
Merchant fees	202		199		586		589
Commissions from sales of checks	85		106		299		326
Safe deposit income	94		92		275		280
Other income	66		77		187		205
Total	1,540		1,410		4,670		4,082
Gains on Sales of Loans	486		484		1,285		1,030
Other Income:
Gains on customer swap transactions	730		319		1,585		1,178
Title insurance income	9		27		128		149
Other income	627		48		755		203
Total	1,366		394		2,468		1,530
Revenue not from contracts with customers	457		737		2,210		2,270
Total Noninterest Income	$	6,700	$	5,639	$	18,812	$	16,682
Timing of Revenue Recognition:
Products and services transferred at a point in time	6,224		4,883		16,546		14,356
Products and services transferred over time	19		19		56		56
Revenue not from contracts with customers	457		737		2,210		2,270
Total Noninterest Income	$	6,700	$	5,639	$	18,812	$	16,682

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NOTE 4 – EARNINGS PER SHARE

The following schedule shows the Company’s earnings per share calculations for the periods presented:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(in thousands, except per share data)	2019		2018		2019		2018
Net income available to common shareholders	$	18,874	$	16,758	$	51,957	$	47,851
Less: earnings allocated to participating securities	156		153		443		440
Net income allocated to common shareholders	$	18,718	$	16,605	$	51,514	$	47,411
Weighted average number of common shares outstanding - basic	50,553		47,605		50,447		47,570
Share-based plans	141		183		148		194
Weighted average number of common shares outstanding - diluted	50,694		47,788		50,595		47,764
Basic earnings per share	$	0.37	$	0.35	$	1.02	$	1.00
Diluted earnings per share	$	0.37	$	0.35	$	1.02	$	0.99

There were no antidilutive options to purchase common stock excluded from the computation for the three and nine months ended September 30, 2019 and 2018.

NOTE 5 – 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:

	September 30, 2019									December 31, 2018
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
AVAILABLE FOR SALE
U.S. Treasury and U.S. government agencies	$	145,976	$	846	$	(492	)	$	146,330	$	143,495	$	—	$	(2,568	)	$	140,927
Mortgage-backed securities, residential	471,178		4,171		(1,341		)	474,008		434,208		779		(8,843		)	426,144
Mortgage-backed securities, multifamily	50,164		818		(92		)	50,890		21,087		67		(204		)	20,950
Obligations of states and political subdivisions	43,338		726		(20		)	44,044		45,951		140		(586		)	45,505
Debt securities	5,000		133		—			5,133		5,000		92		—			5,092
	$	715,656	$	6,694	$	(1,945	)	$	720,405	$	649,741	$	1,078	$	(12,201	)	$	638,618

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	September 30, 2019									December 31, 2018
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
HELD TO MATURITY
U.S. government agencies	$	31,974	$	234	$	(18	)	$	32,190	$	33,025	$	—	$	(677	)	$	32,348
Mortgage-backed securities, residential	81,503		823		(148		)	82,178		75,859		169		(1,838		)	74,190
Mortgage-backed securities, multifamily	1,775		15		(5		)	1,785		1,853		—		(35		)	1,818
Obligations of states and political subdivisions	29,363		468		(30		)	29,801		37,909		113		(328		)	37,694
Debt securities	6,500		41		—			6,541		5,000		—		(118		)	4,882
	$	151,115	$	1,581	$	(201	)	$	152,495	$	153,646	$	282	$	(2,996	)	$	150,932

The following table lists contractual maturities of investment securities classified as available for sale and held to maturity as of September 30, 2019. 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.

	Available for Sale				Held to Maturity
(in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	29,607	$	29,610	$	7,751	$	7,751
Due after one year through five years	103,697		104,533		34,577		34,959
Due after five years through ten years	43,357		44,014		24,746		25,057
Due after ten years	17,653		17,350		763		765
	194,314		195,507		67,837		68,532
Mortgage-backed securities	521,342		524,898		83,278		83,963
Total securities	$	715,656	$	720,405	$	151,115	$	152,495

There were no sales of available for sale or held to maturity securities during the nine months ended September 30, 2019 and 2018.

Securities with a carrying value of approximately $576.2 million and $476.3 million at September 30, 2019 and December 31, 2018, respectively, were pledged to secure public deposits and for other purposes required by applicable laws and regulations.

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The following tables indicates the length of time individual securities have been in a continuous unrealized loss position for the periods presented:

	Less Than 12 Months				12 Months or Longer				Total
(dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses
September 30, 2019
AVAILABLE FOR SALE
U.S. Treasury and U.S. government agencies	$	5,180	$	31	$	56,134	$	461	12	$	61,314	$	492
Mortgage-backed securities, residential	84,842		284		106,968		1,057		73	191,810		1,341
Mortgage-backed securities, multifamily	8,236		80		4,916		12		3	13,152		92
Obligations of states and political subdivisions	2,850		3		3,172		17		11	6,022		20
	$	101,108	$	398	$	171,190	$	1,547	99	$	272,298	$	1,945
HELD TO MATURITY
U.S. government agencies	$	3,799	$	6	$	5,129	$	12	2	$	8,928	$	18
Mortgage-backed securities, residential	3,984		6		13,516		142		14	17,500		148
Mortgage-backed securities, multifamily	—		—		1,007		5		1	1,007		5
Obligations of states and political subdivisions	—		—		5,170		30		1	5,170		30
	$	7,783	$	12	$	24,822	$	189	18	$	32,605	$	201

	Less Than 12 Months				12 Months or Longer				Total
(dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses
December 31, 2018
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

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:

• 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

16

• Adverse conditions related to the security or its issuer if the issuer has failed to make scheduled payments or other factors.

If the above factors indicate that 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 $15.6 million and $15.9 million at September 30, 2019 and December 31, 2018, 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. For the nine months ended September 30, 2019, the Company recorded proceeds from sales of equity securities of $1.2 million and recorded proceeds from sales of equity securities of $2.2 million for the nine months ended September 30, 2018. The Company recorded $525,000 in market value gains on equity securities in noninterest income for the nine months ended September 30, 2019, and $384,000 in market value losses on equity securities for the nine months ended September 30, 2018.

As of September 30, 2019, the market value of equity investments in other financial institutions was $1.8 million. The market value of the Community Reinvestment funds at September 30, 2019 was $13.7 million and includes $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 with 60 days notice at the net asset value less unpaid management fees with the approval of the fund manager. As of September 30, 2019, the net amortized cost equaled the market value of the investment. There are no unfunded commitments related to these investments.

The Community Reinvestment funds include $10.2 million that are primarily 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. 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 these investments.

NOTE 6 – LOANS AND OTHER REAL ESTATE

The following sets forth the composition of the Company’s loan portfolio:

(in thousands)	September 30, 2019			December 31, 2018
Commercial, secured by real estate	$	3,442,973		$	3,057,779
Commercial, industrial and other	391,486			336,735
Equipment finance	104,689			87,925
Real estate - residential mortgage	337,482			329,854
Real estate - construction	306,440			319,545
Home equity and consumer	342,928			328,609
Total loans	4,925,998			4,460,447
Less: deferred fees	(2,584		)	(3,714		)
Loans, net of deferred fees	$	4,923,414		$	4,456,733

At September 30, 2019 and December 31, 2018, home equity and consumer loans included overdraft deposit balances of $391,000 and $452,000, respectively. At September 30, 2019 and December 31, 2018, the Company had $1.35 billion and $1.16 billion, respectively, in loans pledged for actual and potential borrowings at the Federal Home Loan Bank of New York (“FHLB”).

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Purchased Credit Impaired Loans

The following sets forth the carrying value of the purchased credit impaired ("PCI") loans acquired in mergers:

(in thousands)	September 30, 2019		December 31, 2018
Acquisition
Highlands	$	11,627	$	—
Pascack Community Bank ("Pascack")	122		157
Harmony Bank ("Harmony")	456		495
Total	$	12,205	$	652

The carrying value of loans acquired in the Highlands merger and accounted for in accordance with ASC Subtopic 310-30, “Loans and Debt Securities Acquired with Deteriorated Credit Quality,” was $13.8 million at acquisition on January 4, 2019.

The following table presents changes in the accretable yield for PCI loans:

	For the Three Months Ended						For the Nine Months Ended
(in thousands)	September 30, 2019			September 30, 2018			September 30, 2019			September 30, 2018
Balance, beginning of period	$	1,191		$	100		$	81		$	129
Acquisitions	—			—			1,431			—
Accretion	(306		)	(58		)	(687		)	(145		)
Net reclassification non-accretable difference	16			41			76			99
Balance, end of period	$	901		$	83		$	901		$	83

Non-Performing Assets and Past Due Loans

The following schedule sets forth certain information regarding the Company’s non-performing assets and its accruing troubled debt restructurings, excluding PCI loans:

(in thousands)	September 30, 2019		December 31, 2018
Commercial, secured by real estate	$	9,164	$	7,192
Commercial, industrial and other	795		1,019
Equipment finance	271		501
Real estate - residential mortgage	3,250		1,986
Home equity and consumer	2,437		1,432
Total non-accrual loans	$	15,917	$	12,130
Other real estate and other repossessed assets	944		830
TOTAL NON-PERFORMING ASSETS	$	16,861	$	12,960
Troubled debt restructurings, still accruing	$	5,029	$	9,293

Non-accrual loans included $1.6 million and $3.6 million of troubled debt restructurings at September 30, 2019 and December 31, 2018, respectively. At September 30, 2019 and December 31, 2018, the Company had $1.0 million and $1.5 million, respectively, in residential mortgages and consumer home equity loans that were in the process of foreclosure which are included in non-accrual loans in the above table.

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An age analysis of past due loans, excluding PCI loans which are accounted for on a pool basis, segregated by class of loans as of September 30, 2019 and December 31, 2018, is as follows:

(in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater Than 89 Days Past Due		Total Past Due		Current		Total Loans		Recorded Investment  Greater than 89 Days and Still Accruing
September 30, 2019
Commercial, secured by real estate	$	4,800	$	1,898	$	7,124	$	13,822	$	3,422,449	$	3,436,271	$	—
Commercial, industrial and other	29		197		409		635		389,690		390,325		—
Equipment finance	41		93		271		405		104,284		104,689		—
Real estate - residential mortgage	1,217		166		2,904		4,287		332,798		337,085		—
Real estate - construction	694		—		—		694		302,322		303,016		—
Home equity and consumer	1,682		76		1,771		3,529		338,878		342,407		—
	$	8,463	$	2,430	$	12,479	$	23,372	$	4,890,421	$	4,913,793	$	—
December 31, 2018
Commercial, secured by real estate	$	1,477	$	639	$	2,080	$	4,196	$	3,052,931	$	3,057,127	$	—
Commercial, industrial and other	173		243		750		1,166		335,569		336,735		—
Equipment finance	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	$	5,957	$	12,022	$	4,447,773	$	4,459,795	$	—

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Impaired Loans

The Company defines impaired loans as all non-accrual loans with recorded investments of $500,000 or greater. Impaired loans also include all loans that have been modified in troubled debt restructurings, but excludes PCI loans. Impaired loans as of September 30, 2019 and December 31, 2018 are as follows:

(in thousands)	Recorded Investment in Impaired  Loans		Contractual Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired  Loans		Interest Income Recognized
September 30, 2019
Loans without specific allowance:
Commercial, secured by real estate	$	10,886	$	11,457	$	—	$	10,399	$	157
Commercial, industrial and other	628		617		—		1,341		13
Equipment finance	—		—		—		—		—
Real estate - residential mortgage	1,678		1,672		—		75		—
Real estate - construction	—		—		—		—		—
Home equity and consumer	—		—		—		—		—
Loans with specific allowance:
Commercial, secured by real estate	2,934		3,162		201		4,088		128
Commercial, industrial and other	121		121		6		121		5
Equipment finance	25		25		11		25		2
Real estate - residential mortgage	686		855		3		698		15
Real estate - construction	—		—		—		—		—
Home equity and consumer	695		788		5		713		22
Total:
Commercial, secured by real estate	$	13,820	$	14,619	$	201	$	14,487	$	285
Commercial, industrial and other	749		738		6		1,462		18
Equipment finance	25		25		11		25		2
Real estate - residential mortgage	2,364		2,527		3		773		15
Real estate - construction	—		—		—		—		—
Home equity and consumer	695		788		5		713		22
	$	17,653	$	18,697	$	226	$	17,460	$	342

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(in thousands)	Recorded Investment in Impaired  Loans		Contractual Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired  Loans		Interest Income Recognized
December 31, 2018
Loans without specific allowance:
Commercial, secured by real estate	$	9,284	$	9,829	$	—	$	7,369	$	188
Commercial, industrial and other	1,151		1,449		—		1,834		19
Equipment finance	301		597		—		376		—
Real estate - residential mortgage	—		—		—		242		4
Real estate - construction	—		—		—		726		—
Home equity and consumer	—		—		—		—		—
Loans with specific allowance:
Commercial, secured by real estate	7,270		7,597		307		7,594		317
Commercial, industrial and other	209		209		7		209		12
Equipment finance	30		30		14		19		—
Real estate - residential mortgage	730		884		4		745		20
Real estate - construction	—		—		—		—		—
Home equity and consumer	727		765		6		898		32
Total:
Commercial, secured by real estate	$	16,554	$	17,426	$	307	$	14,963	$	505
Commercial, industrial and other	1,360		1,658		7		2,043		31
Equipment finance	331		627		14		395		—
Real estate - residential mortgage	730		884		4		987		24
Real estate - construction	—		—		—		726		—
Home equity and consumer	727		765		6		898		32
	$	19,702	$	21,360	$	338	$	20,012	$	592

Interest income recognized on impaired loans was $342,000 and $450,000 for the nine months ended September 30, 2019 and 2018, respectively. Interest that would have been accrued on impaired loans during the first nine months of 2019 and 2018 had the loans been performing under original terms would have been $703,000 and $842,000, respectively.

Credit Quality Indicators

The class of loans is determined by internal risk rating. Management closely and continually monitors the quality of its loans and assesses the quantitative and qualitative risks arising from the credit quality of its loans. Lakeland assigns a credit risk rating 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 commercial loan portfolios. The risk rating system assists senior management in evaluating Lakeland’s commercial 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, guarantor support, industry conditions and economic conditions. Management categorizes commercial 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.

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The following table shows the Company’s commercial loan portfolio as of September 30, 2019 and December 31, 2018, by the risk ratings discussed above (in thousands):

September 30, 2019	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Real Estate - Construction
RISK RATING
1	$	—	$	2,655	$	—
2	—		17,865		—
3	71,581		34,392		—
4	910,695		91,329		18,871
5	2,245,570		208,024		273,997
5W - Watch	103,619		24,302		8,487
6 - Other assets especially mentioned	50,155		3,805		967
7 - Substandard	61,353		9,114		4,118
8 - Doubtful	—		—		—
9 - Loss	—		—		—
Total	$	3,442,973	$	391,486	$	306,440

December 31, 2018	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Real Estate - Construction
RISK RATING
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

The risk rating tables above do not include residential mortgage loans, consumer loans, or equipment finance loans because they are evaluated on their payment status.

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Allowance for Loan Losses

The following table details activity in the allowance for loan losses by portfolio segment for the three and nine months ended September 30, 2019 and 2018:

(in thousands)	Commercial, Secured by Real Estate			Commercial, Industrial and Other			Equipment Finance		Real Estate- Residential Mortgage			Real Estate- Construction			Home Equity and Consumer			Total
Three Months Ended September 30, 2019
Beginning Balance	$	28,095		$	2,633		$	1,055	$	1,606		$	2,708		$	2,565		$	38,662
Charge-offs	(314		)	(425		)	—		—			—			(70		)	(809		)
Recoveries	72			32			—		55			39			68			266
Provision	672			218			55		(57		)	(186		)	(166		)	536
Ending Balance	$	28,525		$	2,458		$	1,110	$	1,604		$	2,561		$	2,397		$	38,655

(in thousands)	Commercial, Secured by Real Estate			Commercial, Industrial and Other			Equipment Finance			Real Estate- Residential Mortgage			Real Estate- Construction			Home Equity and Consumer			Total
Three Months Ended September 30, 2018
Beginning Balance	$	26,174		$	2,012		$	1,264		$	1,585		$	3,063		$	2,506		$	36,604
Charge-offs	(24		)	(151		)	(368		)	(38		)	—			(172		)	(753		)
Recoveries	135			177			2			2			4			76			396
Provision	1,361			(70		)	(12		)	(62		)	(166		)	(5		)	1,046
Ending Balance	$	27,646		$	1,968		$	886		$	1,487		$	2,901		$	2,405		$	37,293

(in thousands)	Commercial, Secured by Real Estate			Commercial, Industrial and Other			Equipment Finance			Real Estate- Residential Mortgage			Real Estate- Construction			Home Equity and Consumer			Total
Nine Months Ended September 30, 2019
Beginning Balance	$	27,881		$	1,742		$	987		$	1,566		$	3,015		$	2,497		$	37,688
Charge-offs	(501		)	(610		)	(380		)	(50		)	—			(197		)	(1,738		)
Recoveries	212			1,076			2			66			104			201			1,661
Provision	933			250			501			22			(558		)	(104		)	1,044
Ending Balance	$	28,525		$	2,458		$	1,110		$	1,604		$	2,561		$	2,397		$	38,655

(in thousands)	Commercial, Secured by Real Estate			Commercial, Industrial and Other			Equipment Finance			Real Estate- Residential Mortgage			Real Estate- Construction			Home Equity and Consumer			Total
Nine Months Ended September 30, 2018
Beginning Balance	$	25,704		$	2,313		$	630		$	1,557		$	2,731		$	2,520		$	35,455
Charge-offs	(256		)	(1,452		)	(463		)	(131		)	(248		)	(416		)	(2,966		)
Recoveries	440			273			7			7			12			243			982
Provision	1,758			834			712			54			406			58			3,822
Ending Balance	$	27,646		$	1,968		$	886		$	1,487		$	2,901		$	2,405		$	37,293

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Loans receivable summarized by portfolio segment and impairment method are as follows:

(in thousands)	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Equipment Finance		Real Estate- Residential Mortgage		Real Estate- Construction		Home Equity and Consumer		Total
September 30, 2019
Ending Balance: Individually evaluated for impairment	$	13,820	$	749	$	25	$	2,364	$	—	$	695	$	17,653
Ending Balance: Collectively evaluated for impairment	3,422,451		389,576		104,664		334,721		303,016		341,712		4,896,140
Ending Balance: Loans acquired with deteriorated credit quality	6,702		1,161		—		397		3,424		521		12,205
Ending Balance (1)	$	3,442,973	$	391,486	$	104,689	$	337,482	$	306,440	$	342,928	$	4,925,998

(in thousands)	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Equipment Finance		Real Estate- Residential Mortgage		Real Estate- Construction		Home Equity and Consumer		Total
December 31, 2018
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

The allowance for loan losses is summarized by portfolio segment and impairment classification as follows:

(in thousands)	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Equipment Finance		Real Estate- Residential Mortgage		Real Estate- Construction		Home Equity and Consumer		Total
September 30, 2019
Ending Balance: Individually evaluated for impairment	$	201	$	6	$	11	$	3	$	—	$	5	$	226
Ending Balance: Collectively evaluated for impairment	28,324		2,452		1,099		1,601		2,561		2,392		38,429
Ending Balance	$	28,525	$	2,458	$	1,110	$	1,604	$	2,561	$	2,397	$	38,655

(in thousands)	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Equipment Finance		Real Estate- Residential Mortgage		Real Estate- Construction		Home Equity and Consumer		Total
December 31, 2018
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

Lakeland also maintains a reserve for unfunded lending commitments which is included in other liabilities. This reserve was $1.8 million and $2.3 million as of September 30, 2019 and December 31, 2018, respectively. The Company analyzes the adequacy of the reserve for unfunded lending commitments quarterly.

Troubled Debt Restructurings

Loans are classified as troubled debt restructured loans 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, a moratorium of principal payments and/or an extension of the maturity date at a stated interest rate lower than the current market rate of a new loan with similar risk. The Company considers the potential losses on these loans as well as the remainder of its impaired loans while considering the adequacy of the allowance for loan losses.

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The following table summarizes loans that have been restructured during the three and nine months ended September 30, 2019 and 2018:

	For the Three Months Ended September 30, 2019					For the Three Months Ended September 30, 2018
(dollars in thousands)	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
Commercial, secured by real estate	—	$	—	$	—	1	$	1,175	$	1,175
Home equity and consumer	2	83		83		—	—		—
	2	83		83		1	1,175		1,175

	For the Nine Months Ended September 30, 2019					For the Nine Months Ended September 30, 2018
(dollars in thousands)	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
Commercial, secured by real estate	—	$	—	$	—	4	$	3,002	$	3,002
Commercial, industrial and other	—	—		—		1	950		950
Home equity and consumer	2	$	83	$	83	—	—		—
	2	$	83	$	83	5	$	3,952	$	3,952

The following table summarizes as of September 30, 2019 and 2018, loans that were restructured within the previous twelve months that have subsequently defaulted:

	September 30, 2019			September 30, 2018
(dollars in thousands)	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
Commercial, secured by real estate	—	$	—	1	$	171
Home equity and consumer	2	$	83	—	$	—
	2	$	83	1	$	171

Other Real Estate and Other Repossessed Assets

At September 30, 2019 and December 31, 2018, the Company had other real estate owned of $944,000 and $830,000, respectively. Included in other real estate owned was residential property acquired as a result of foreclosure proceedings totaling $879,000 and $702,000 at September 30, 2019 and December 31, 2018, respectively. There were no balances of other repossessed assets at both September 30, 2019 and December 31, 2018.

NOTE 7 – LEASES

The Company leases certain premises and equipment under operating leases. Portions of certain properties are subleased for terms extending through 2024. At September 30, 2019, the Company had lease liabilities totaling $19.5 million and right-of-use assets totaling $18.0 million related to these leases. The calculated amount of the right-of-use asset and lease liabilities are impacted by the length of the lease term and the discount rate used to calculate the present value of the minimum lease payments. The Company's lease agreements often include one or more options to renew at the Company's discretion. If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the right-of-use asset and lease liability. The Company uses its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term. For leases existing prior to January 1, 2019, the rate for the remaining lease term as of January 1, 2019 was used.

For the nine months ended September 30, 2019, the weighted average remaining lease term for operating leases was 10.69 years and the weighted average discount rate used in the measurement of operating lease liabilities was 3.51%.

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As the Company elected not to separate lease and non-lease components and instead to account for them as a single lease component, the variable lease cost primarily represents variable payments such as common area maintenance and utilities. Lease costs were as follows:

(in thousands)	Three Months Ended September 30, 2019			Nine Months Ended September 30, 2019
Operating lease cost	$	819		$	2,465
Short-term lease cost	—			—
Variable lease cost	32			100
Sublease income	(31		)	(92		)
Net lease cost	$	820		$	2,473

Rent expense for the three and nine months ended September 30, 2018, prior to the adoption of ASU 2016-02, was $731,000 and $2.2 million, respectively.

The table below presents other information on the Company's operating leases for the nine months ended September 30, 2019:

(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,977
Right-of-use asset obtained in exchange for new operating lease liabilities	$	765

There were no sale and leaseback transactions, leveraged leases or lease transactions with related parties during the three and nine months ended September 30, 2019. At September 30, 2019, the Company had no leases that had not yet commenced.

A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total operating lease liability at September 30, 2019 is as follows:

(in thousands)
Within one year	$	3,186
After one year but within two years	2,923
After two year but within three years	2,533
After three year but within four years	2,124
After four year but within five years	2,066
After 5 years	11,028
Total undiscounted cash flows	23,860
Discount on cash flows	(4,351		)
Total lease liability	$	19,509

NOTE 8 – 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. Lakeland had $45.5 million and $498,000, respectively, in available for sale securities pledged for collateral on its interest rate swaps with the financial institution for September 30, 2019 and December 31, 2018.

In June 2016, the Company entered into two cash flow hedges in order to hedge the variable cash outflows associated with its subordinated debentures. The notional value of these hedges was $30.0 million. The Company’s objectives in using cash flow hedges are to add stability to interest expense and to manage its exposure to interest rate movements. The Company used

26

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 nine months ended September 30, 2019, the Company did not record any hedge ineffectiveness. The Company recognized $334,000 and $227,000 of accumulated other comprehensive income that was reclassified into interest expense for the first nine months of 2019 and 2018, respectively.

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 $287,000 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):

September 30, 2019	Notional Amount		Average Maturity (Years)	Weighted Average Fixed Rate		Weighted Average Variable Rate	Fair  Value
Classified in Other Assets:
3rd Party interest rate swaps	$	6,468	4.0	3.78	%	1 Mo. LIBOR + 2.50%	$	26
Customer interest rate swaps	424,321		9.8	4.36	%	1 Mo. LIBOR + 1.96%	34,404
Interest rate swap (cash flow hedge)	30,000		1.8	1.10	%	3 Mo. LIBOR	292
Classified in Other Liabilities:
Customer interest rate swaps	$	6,468	4.0	3.78	%	1 Mo. LIBOR + 2.50%	$	(26	)
3rd Party interest rate swaps	424,321		9.8	4.36	%	1 Mo. LIBOR + 1.96%	(34,404		)

December 31, 2018	Notional  Amount		Average Maturity (Years)	Weighted  Average Fixed Rate		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		)

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NOTE 9 – GOODWILL AND INTANGIBLE ASSETS

The Company had goodwill of $156.3 million and $136.4 million at September 30, 2019 and December 31, 2018, respectively. The Company recorded $19.8 million in goodwill from the Highlands merger in January 2019. The Company reviews its goodwill and intangible assets annually, on November 30, or more frequently if conditions warrant, for impairment. In testing goodwill for impairment, the Company compares the estimated fair value of its reporting unit to its carrying amount, including goodwill. The Company has determined that it has one reporting unit, Community Banking.

The Company had core deposit intangibles of $4.6 million and $1.8 million at September 30, 2019 and December 31, 2018, respectively. The Company recorded core deposit intangible of $3.7 million for the Highlands acquisition. The estimated future amortization expense for the remainder of 2019 and for each of the succeeding five years ended December 31 is as follows (in thousands):

For the Year Ended
2019	$	289
2020	1,025
2021	868
2022	711
2023	554
2024	425

NOTE 10 – BORROWINGS

At September 30, 2019, the Company had federal funds purchased and securities sold under agreements to repurchase of $155.0 million and $44.3 million, respectively, compared to $192.1 million and $41.8 million, respectively, at December 31, 2018. The securities sold under agreements to repurchase are overnight sweep arrangement accounts with our customers. As of September 30, 2019, the Company had $49.2 million in mortgage backed securities pledged for its securities sold under agreements to repurchase.

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 Lakeland to pledge additional collateral to meet that margin call.

NOTE 11 – SHARE-BASED COMPENSATION

The Company grants restricted stock, restricted stock units (“RSUs”) and stock options under the 2018 Omnibus Equity Incentive Plan and previously granted such awards under the 2009 Equity Compensation Program. The Company recognized share-based compensation expense on its restricted stock of $160,000 and $174,000 for the nine months ended September 30, 2019 and 2018, respectively. As of September 30, 2019, there was unrecognized compensation cost of $52,000 related to unvested restricted stock that is expected to be recognized over a weighted average period of approximately 0.30 years. The Company recognized share based compensation expense of $1.7 million and $1.8 million on RSUs for the nine months ended September 30, 2019 and 2018, respectively. Unrecognized compensation expense related to RSUs was approximately $3.0 million as of September 30, 2019, and that cost is expected to be recognized over a period of 1.47 years. There was no unrecognized compensation expense related to unvested stock options as of September 30, 2019.

In the first nine months of 2019, the Company granted 13,052 shares of restricted stock to non-employee directors at a grant date fair value of $15.96 per share under the 2018 Omnibus Equity Incentive Program. The restricted stock vests one year from the date it was granted. Compensation expense on this restricted stock is expected to be $208,000 over a one year period. In the first nine months of 2018, the Company granted 10,945 shares of restricted stock to non-employee directors at a grant date fair value of $20.55 per share under the 2009 Equity Compensation Program. The restricted stock vested one year from the date it was granted with a compensation expense of $225,000 over such period.

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The following is a summary of the Company’s restricted stock activity during the nine months ended September 30, 2019:

	Number of Shares		Weighted Average Price
Outstanding, January 1, 2019	11,701		$	20.18
Granted	13,052		15.96
Vested	(11,643	)	20.24
Forfeited	—		—
Outstanding, September 30, 2019	13,110		$	15.93

In the first nine months of 2019, the Company granted 141,059 RSUs under the 2018 Omnibus Equity Incentive Plan at a weighted average grant date fair value of $16.62 per share. 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 agreement. There are also certain provisions in the compensation program which state that if a recipient 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 restricted stock units issued in the first nine months of 2019 is expected to average approximately $781,000 per year over a three year period. In the first nine months of 2018, the Company granted 151,733 RSUs under the Company’s 2009 Equity Compensation Program and 1,500 RSUs under the 2018 Omnibus Equity Incentive Plan at a weighted average grant date fair value of $19.14 per share. Compensation expense on these RSUs is expected to average approximately $978,000 per year over a three year period.

The following is a summary of the Company’s RSU activity during the nine months ended September 30, 2019:

	Number of Shares		Weighted Average Price
Outstanding, January 1, 2019	299,347		$	16.60
Granted	141,059		16.62
Vested	(107,396	)	12.20
Forfeited	(7,565	)	17.86
Outstanding, September 30, 2019	325,445		$	18.03

There were no grants of stock options in the first nine months of 2019 or 2018. Option activity under the Company’s stock option plans is as follows:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding, January 1, 2019	67,488		$	8.28	2.86	$	440,483
Granted	—		—
Exercised	(34,727	)	8.84
Forfeited	—		—
Expired	—		—
Outstanding, September 30, 2019	32,761		$	7.70	0.81	$	253,314
Options exercisable at September 30, 2019	32,761		$	7.70	0.81	$	253,314

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, multiplied by the number of in-the-money options).

There were 34,727 stock options exercised during the first nine months of 2019 and 34,728 stock options were exercised during the first nine months of 2018. The aggregate intrinsic value of stock options exercised during the first nine months of 2019 was $255,000 and resulted in $307,000 in cash receipts. For the nine months ended September 30, 2018, the intrinsic value of stock options exercised was $406,000 and the exercises resulted in cash receipts of $307,000.

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NOTE 12 – COMPREHENSIVE INCOME

The components of other comprehensive income (loss) are as follows:

	For the Three Months Ended
	September 30, 2019									September 30, 2018
(in thousands)	Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount			Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount
Net unrealized gains (losses) on available for sale securities:
Net unrealized holding gains (losses) arising during period	$	1,911		$	(431	)	$	1,480		$	(2,816	)	$	797		$	(2,019	)
Reclassification adjustment for net gains arising during the period	—			—			—			—			—			—
Net unrealized gains (losses)	1,911			(431		)	1,480			(2,816		)	797			(2,019		)
Unrealized (losses) gains on derivatives	(111		)	33			(78		)	9			(3		)	6
Other comprehensive income (loss), net	$	1,800		$	(398	)	$	1,402		$	(2,807	)	$	794		$	(2,013	)

	For the Nine Months Ended
	September 30, 2019									September 30, 2018
(in thousands)	Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount			Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount
Net unrealized gains (losses) on available for sale securities:
Net unrealized holding gains (losses) arising during period	$	15,872		$	(4,253	)	$	11,619		$	(12,521	)	$	3,080		$	(9,441	)
Reclassification adjustment for net gains arising during the period	—			—			—			—			—			—
Net unrealized gains (losses)	15,872			(4,253		)	11,619			(12,521		)	3,080			(9,441		)
Unrealized (losses) gains on derivatives	(807		)	236			(571		)	434			(92		)	342
Other comprehensive income (loss), net	$	15,065		$	(4,017	)	$	11,048		$	(12,087	)	$	2,988		$	(9,099	)

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The following tables show the changes in the balances of each of the components of other comprehensive income for the periods presented, net of tax:

	For the Three Months Ended September 30, 2019									For the Three Months Ended September 30, 2018
(in thousands)	Unrealized Gains (Losses) on Available for  Sale Securities		Unrealized Gains on Derivatives			Pension Items		Total		Unrealized Losses on Available for Sale Securities			Unrealized Gains  on Derivatives		Pension Items		Total
Beginning balance	$	1,357	$	410		$	41	$	1,808	$	(12,697	)	$	1,198	$	21	$	(11,478	)
Other comprehensive income (loss) before classifications	1,480		(78		)	—		1,402		(2,019		)	6		—		(2,013		)
Amounts reclassified from accumulated other comprehensive income	—		—			—		—		—			—		—		—
Net current period other comprehensive income (loss)	1,480		(78		)	—		1,402		(2,019		)	6		—		(2,013		)
Ending balance	$	2,837	$	332		$	41	$	3,210	$	(14,716	)	$	1,204	$	21	$	(13,491	)

	For the Nine Months Ended September 30, 2019											For the Nine Months Ended September 30, 2018
(in thousands)	Unrealized Gains (Losses) on Available for  Sale Securities			Unrealized Gains on Derivatives			Pension Items		Total			Unrealized Losses on Available for  Sale Securities			Unrealized Gains  on Derivatives		Pension Items		Total
Beginning balance	$	(8,782	)	$	903		$	41	$	(7,838	)	$	(3,232	)	$	862	$	21	$	(2,349	)
Adjustment for implementation of ASU 2016-01	—			—			—		—			(2,043		)	—		—		(2,043		)
Adjusted beginning balance	(8,782		)	903			41		(7,838		)	(5,275		)	862		21		(4,392		)
Other comprehensive income (loss) before classifications	11,619			(571		)	—		11,048			(9,441		)	342		—		(9,099		)
Amounts reclassified from accumulated other comprehensive income	—			—			—		—			—			—		—		—
Net current period other comprehensive income (loss)	11,619			(571		)	—		11,048			(9,441		)	342		—		(9,099		)
Ending balance	$	2,837		$	332		$	41	$	3,210		$	(14,716	)	$	1,204	$	21	$	(13,491	)

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NOTE 13 – ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENT

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 upon 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 from a third party 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).

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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 nine months ended September 30, 2019, the Company did not make any transfers between any levels within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:

(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
September 30, 2019
Assets:
Investment securities, available for sale
U.S. Treasury and government agencies	$	12,618	$	133,712	$	—	$	146,330
Mortgage-backed securities	—		524,898		—		524,898
Obligations of states and political subdivisions	—		44,044		—		44,044
Debt securities	—		5,133		—		5,133
Total securities available for sale	12,618		707,787		—		720,405
Equity securities, at fair value	1,843		13,709		—		15,552
Derivative assets	—		34,722		—		34,722
Total Assets	$	14,461	$	756,218	$	—	$	770,679
Liabilities:
Derivative liabilities	$	—	$	34,430	$	—	$	34,430
Total Liabilities	$	—	$	34,430	$	—	$	34,430
December 31, 2018
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
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

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The following table sets forth the Company’s 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:

(in thousands)	(Level 1)		(Level 2)		(Level 3)		Total Fair Value
September 30, 2019
Assets:
Impaired loans	$	—	$	—	$	17,653	$	17,653
Loans held for sale	—		3,077		—		3,077
Properties held for sale	$	—	$	—	$	1,836	$	1,836
Other real estate owned and other repossessed assets	—		—		944		944
December 31, 2018
Assets:
Impaired loans	$	—	$	—	$	19,702	$	19,702
Loans held for sale	—		1,113		—		1,113
Other real estate owned and other repossessed assets	—		—		830		830

Impaired loans 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 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 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 adjusted 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 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 market value. Fair value is generally determined by the value of purchase commitments.

Properties held for sale contain two properties from the Highlands acquisition that the Company plans to sell. These properties are carried at fair value less estimated disposal costs of the acquired property. Fair value is based on current listing prices for these properties.

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 recognized valuation resources.

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 September 30, 2019, and December 31, 2018, 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

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demand deposits, savings and interest-bearing transaction accounts and federal funds purchased 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 is 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 $902,000 in short-term municipal bond anticipation notes and $2.5 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 Federal Home Loan Banks, 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 has been valued using an exit price approach, which incorporates a buildup discount rate calculation that uses a swap rate adjusted for credit risk, servicing costs, a liquidity premium and a prepayment premium.

For fixed maturity certificates of deposit, fair value is 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 value of commitments to extend credit and standby letters of credit are deemed immaterial.

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The following table presents the carrying values, fair values and placement in the fair value hierarchy of the Company’s financial instruments as of September 30, 2019 and December 31, 2018:

(in thousands)	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)
September 30, 2019
Financial Assets:
Investment securities held to maturity	$	151,115	$	152,495	$	—	$	149,093	$	3,402
Federal Home Loan Bank and other membership bank stocks	18,006		18,006		—		18,006		—
Loans, net	4,884,759		4,964,970		—		—		4,964,970
Financial Liabilities:
Certificates of deposit	913,213		913,550		—		913,550		—
Other borrowings	165,818		166,581		—		166,581		—
Subordinated debentures	118,211		116,160		—		—		116,160
December 31, 2018
Financial Assets:
Investment securities held to maturity	$	153,646	$	150,932	$	—	$	143,913	$	7,019
Federal Home Loan Bank and other membership bank stocks	13,301		13,301		—		13,301		—
Loans, 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

NOTE 14 – RECENT ACCOUNTING PRONOUNCEMENTS

In August 2018, the Financial Accounting Standards Board ("FASB") issued Update 2018-13, an update to Topic 820, Fair Value Measurement, to improve the effectiveness of fair value measurement disclosures. Among other provisions, the update removes requirements to disclose amounts of and reasons for 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 not expected to have a material impact on the Company's financial statements.

In August 2018, the FASB issued Update 2018-15, an update to Subtopic 350-40, Intangibles - Goodwill and Other - Internal-Use Software, 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 Update 2018-14, an update to Subtopic 715-20, Compensation - Retirement Benefits - Defined Benefit Plans - General, 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 plans that require calculation of projected benefit obligations or accumulated benefit obligations, the update will not have a material impact on the Company's financial statements.

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In June 2018, the FASB issued Update 2018-07, an update to Topic 718, Compensation - Stock Compensation, 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 was permitted. The adoption of this update did not have a significant impact on the Company's financial statements.

In August 2017, the FASB issued Update 2017-05, an update to Subtopic 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets, 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. This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2019. The Company is still evaluating the impact that this guidance will have on its financial statements.

In July 2017, the FASB issued Update 2017-11, 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 adoption of this update did not have a material impact on the Company’s financial statements because the Company does not have any equity-linked financial instruments that have such down round features.

In March 2017, the FASB issued Update 2017-08, an update to Subtopic 310-20, Receivables - Nonrefundable Fees and Other Costs, 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 did not have a material impact on the Company’s financial statements.

In January 2017, the FASB issued Update 2017-04, an update to Topic 350, Intangibles - Goodwill and Other, 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 not expected to have a material impact on the Company’s financial statements.

In June 2016, the FASB issued Update 2016-13, Topic 326, Financial Instruments - Credit Losses, 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. In order to prepare for implementation of Update 2016-13, the Company formed a cross-functional 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. Our implementation process included choosing a software and advisory service provider to aid in implementation. Part of the implementation process included making specific Topic 326 policy elections.

Our planned approach for estimated expected lifetime credit losses include the following key components for all loan portfolio segments: a) the calculation of a baseline lifetime loss by applying a segment-specific historical average annual loss rate, calculated using an open pool method, applied over the remaining life of each instrument; b) a single set of economic forecast inputs for the reasonable and supportable period; c) an initial reasonable and supportable forecast period, which reflects management's expectations of losses based on forward-looking economic scenarios over that time; d) baseline lifetime loss rates adjusted for changes in macroeconomic conditions over the reasonable and supportable forecast period via a series of adjustment factors developed using a third-party developed and supported top-down statistical model suite that uses a set of relevant economic forecast inputs sourced from a leading global forecasting firm; e) a reversion period (after the reasonable and supportable forecast period) using a straight-line approach; f) a historical loss period which represents a full economic credit cycle (with the exception of equipment finance loans which will use a shorter time period due to circumstances unique to that segment); and g) expected

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prepayment rates estimated on more recent historical experience adjusted for refinance incentive, seasoning and burnout, as applicable.

Based on the above parameters, the software provider has completed configuration of the software platform, user access testing has been completed and the system has been moved to a production environment. The Company has completed preparation and validation of historical data for the software, consistent with the Company's selected methodology. Third-party macroeconomic models have been updated and integrated with the software platform. Metrics are being developed for the determination of reasonable and supportable forecast and reversion periods and prepayment speed estimates. The Company and software provider are beginning scenario analysis and sensitivity testing and expect to continue reviewing and fine tuning assumptions in the model based on results. The Company is still developing qualitative adjustments. The Company has engaged a third-party firm to conduct a review and validation of its methodology and models, which is in process. The Company is also developing its future process and governance structure to ensure Lakeland is prepared for adoption of the standard as of January 1, 2020. The adoption of this standard could have a material impact on the Company’s financial statements depending on the characteristics of the loan portfolio, as well as the current and forecasted economic conditions as of the date of adoption. The Company is currently in the process of evaluating the effects of the standard on its estimated credit losses. Adoption of the standard may materially increase volatility of the allowance for credit loss estimates and provisions in the future based on changes in economic conditions.

In February 2016, FASB issued Update 2016-02, Topic 842, Leases, 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. The Company retained the services of a software provider to aid in its implementation. 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 Accounting Standards Codification ("ASC") 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 ASC 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. Management used the optional transition method discussed above and also used the practical expedient to account for non-lease components with the associated lease component as a single component assuming the appropriate conditions are met. The FASB issued further clarification of the standard and addressed implementation and disclosure requirements. With the adoption of this update, the Company recorded an operating lease right-of-use asset of $18.7 million, a corresponding liability of $20.2 million and a cumulative adjustment to retained earnings of $125,000.

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

This section should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Statements Regarding Forward Looking Information

The information disclosed in this document includes various forward-looking statements that are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 with respect to credit quality (including delinquency trends and the allowance for loan losses), the Company's future tax expense, corporate objectives, and other financial and business matters. The words “anticipates,” “projects,” “intends,” “estimates,” “expects,” “believes,” “plans,” “may,” “will,” “should,” “could,” and other similar expressions are intended to identify such forward-looking statements. The Company cautions that these forward-looking statements are necessarily speculative and speak only as of the date made, and are subject to numerous assumptions, risks and uncertainties, all of which may change over time. Actual results could differ materially from such forward-looking statements.

In addition to the risk factors disclosed elsewhere in this document, the following factors, among others, could cause the Company’s actual results to differ materially and adversely from such forward-looking statements: changes in the financial services industry and the U.S. and global capital markets, changes in economic conditions nationally, regionally and in the Company’s markets, the nature and timing of actions of the Federal Reserve Board and other regulators, the nature and timing of legislation and regulation affecting the financial services industry, government intervention in the U.S. financial system, changes in federal

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and state tax laws, changes in levels of market interest rates, pricing pressures on loan and deposit products, credit risks of Lakeland’s lending and leasing activities, successful implementation, deployment and upgrades of new and existing technology, systems, services and products, customers’ acceptance of Lakeland’s products and services, competition and failure to realize anticipated efficiencies and synergies from the merger of Highlands Bancorp, Inc. into the Company and Highlands State Bank into Lakeland.

The above-listed risk factors are not necessarily exhaustive, particularly as to possible future events, and new risk factors may emerge from time to time. Certain events may occur that could cause the Company’s actual results to be materially different than those described in the Company’s periodic filings with the Securities and Exchange Commission. Any statements made by the Company that are not historical facts should be considered to be forward-looking statements. The Company is not obligated to update and does not undertake to update any of its forward-looking statements made herein.

Critical Accounting Policies, Judgments and Estimates

The accounting and reporting policies of the Company and its subsidiaries conform to accounting principles generally accepted in the United States of America and predominant practices within the banking industry. The consolidated financial statements include the accounts of the Company, Lakeland and their subsidiaries, including Lakeland NJ Investment Corp., Lakeland Investment Corp., Lakeland Equity, Inc. and Lakeland Preferred Equity, Inc. All intercompany balances and transactions have been eliminated.

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. There have been no material changes in the Company’s critical accounting policies, judgments and estimates, including assumptions or estimation techniques utilized, as compared to those disclosed in the Company’s most recent Annual Report on Form 10-K.

Financial Overview

During the first quarter of 2019 the Company completed the merger of Highlands Bancorp Inc. ("Highlands"), adding $496.5 million in total assets, including $426.1 million in total loans, including loans held for sale, and $409.6 million in total deposits. The Company's financial statements reflect the impact of the merger from the date of acquisition, which should be considered when comparing periods.

For the third quarter of 2019, the Company reported net income of $18.9 million and earnings per diluted share of $0.37 compared to net income of $16.8 million and earnings per diluted share of $0.35 for the third quarter of 2018. For the third quarter of 2019, annualized return on average assets was 1.17%, annualized return on average common equity was 10.61% and annualized return on average tangible common equity was 13.74% compared to 1.19%, 11.02%, and 14.31%, respectively, for the third quarter of 2018.

For the nine months ended September 30, 2019 the Company reported net income of $52.0 million, a 9% increase compared to $47.9 million for the same period in 2018. For the nine months ended September 30, 2019, the Company reported earnings per diluted share of $1.02, compared to $0.99 earnings per diluted share reported for the first nine months of 2018. Excluding merger-related expenses pertaining to the Company’s January 2019 acquisition of Highlands of $2.4 million, tax-effected, net income for the nine months ended September 30, 2019 was $54.3 million, or $1.06 per diluted share. For the first nine months of 2019, annualized return on average assets was 1.11%, annualized return on average common equity was 10.07%, and annualized return on average tangible common equity was 13.11%. Excluding merger-related expenses these ratios were 1.16%, 10.53% and 13.70%, respectively.

Annualized net interest margin was 3.25% in the third quarter of 2019 compared to 3.32% in the third quarter of 2018.

Total loans, net of deferred fees, grew $466.7 million or 10%, to $4.92 billion during the first nine months of 2019 and included $425.0 million of Highlands loan balances.

Total deposits increased $589.9 million, or 13%, from December 31, 2018 to September 30, 2019, to $5.21 billion and included $409.6 million of Highlands deposit balances.

Comparison of Operating Results for the Three Months Ended September 30, 2019 and 2018

Net Income

Net income was $18.9 million, or $0.37 per diluted share, for the third quarter of 2019 compared to net income of $16.8 million, or $0.35 per diluted share, for the third quarter of 2018. Net interest income of $48.7 million for the third quarter of 2019 increased $5.1 million from the third quarter of 2018 as a result of the merger, organic growth and an increase in market interest rates.

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Net Interest Income

Net interest income is the difference between interest income on earning assets and the cost of funds supporting those assets. The Company’s net interest income is determined by: (i) the volume of interest-earning assets that it holds and the yields that it earns on those assets, and (ii) the volume of interest-bearing liabilities that it has assumed and the rates that it pays on those liabilities.

Net interest income on a tax equivalent basis for the third quarter of 2019 was $48.8 million, compared to $43.7 million for the third quarter of 2018. The net interest margin decreased to 3.25% in the third quarter of 2019 from 3.32% in the third quarter of 2018 primarily as a result of an increase in the cost of interest-bearing liabilities, partially offset by an increase in the yield on interest-earning assets. The components of net interest income will be discussed in greater detail below.

The following table reflects the components of the Company’s net interest income, setting forth for the periods presented, (1) average assets, liabilities and stockholders’ equity, (2) interest income earned on interest-earning assets and interest expense paid on interest-bearing liabilities, (3) average yields earned on interest-earning assets and average rates paid on interest-bearing liabilities, (4) the Company’s net interest spread (i.e., the average yield on interest-earning assets less the average cost of interest-bearing liabilities) and (5) the Company’s net interest margin. Rates for the three months ended September 30, 2019 and September 30, 2018 are computed on a tax equivalent basis using a tax rate of 21%.

	For the Three Months Ended September 30, 2019							For the Three Months Ended September 30, 2018
(dollars in thousands)	Average Balance			Interest Income/ Expense		Average Rates Earned/ Paid		Average Balance			Interest Income/ Expense		Average Rates Earned/ Paid
ASSETS
Interest-earning assets:
Loans (1)	$	4,937,488		$	58,563	4.71	%	$	4,296,244		$	49,181	4.54	%
Taxable investment securities and other	801,828			5,007		2.50	%	731,510			4,141		2.26	%
Tax-exempt securities	67,906			458		2.70	%	79,707			540		2.71	%
Federal funds sold (2)	140,423			695		1.98	%	114,151			533		1.87	%
Total interest-earning assets	5,947,645			64,723		4.32	%	5,221,612			54,395		4.14	%
Noninterest-earning assets:
Allowance for loan losses	(39,254		)					(37,060		)
Other assets	471,284							385,734
TOTAL ASSETS	$	6,379,675						$	5,570,286
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-bearing liabilities:
Savings accounts	$	494,377		$	80	0.06	%	$	491,095		$	74	0.06	%
Interest-bearing transaction accounts	2,678,424			8,363		1.24	%	2,319,863			5,178		0.89	%
Time deposits	964,159			4,824		2.00	%	789,691			3,177		1.61	%
Borrowings	361,881			2,677		2.89	%	328,179			2,229		2.66	%
Total interest-bearing liabilities	4,498,841			15,944		1.41	%	3,928,828			10,658		1.08	%
Noninterest-bearing liabilities:
Demand deposits	1,100,413							999,217
Other liabilities	74,695							39,182
Stockholders' equity	705,726							603,059
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	6,379,675						$	5,570,286
Net interest income/spread				48,779		2.91	%				43,737		3.06	%
Tax equivalent basis adjustment				97							113
NET INTEREST INCOME				$	48,682						$	43,624
Net interest margin (3)						3.25	%						3.32	%

(1)    Includes non-accrual loans, the effect of which is to reduce the yield earned on loans, and deferred loan fees.

(2)    Includes interest-bearing cash accounts.

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(3)    Net interest income divided by interest-earning assets.

Interest income on a tax equivalent basis increased $10.3 million, or 19% from $54.4 million in the third quarter of 2018 to $64.7 million in the third quarter of 2019, as a result of higher volumes of interest earning assets primarily due to the Highlands acquisition. Also impacting the increase in interest income was an increase in the loan portfolio yield primarily resulting from the higher interest rate environment and higher accretion income on loans resulting from the Highlands acquisition. Average loans increased $641.2 million compared to the third quarter of 2018 while the yield on average loans increased 17 basis points to 4.71% in the third quarter of 2019 from the third quarter of 2018. Total average taxable investment securities increased $70.3 million to $801.8 million for the third quarter of 2019 from the third quarter of 2018, while average tax-exempt securities decreased $11.8 million to $67.9 million for the same periods. The yield on average taxable investment securities increased 24 basis points from the third quarter of 2018 to 2.50% for the third quarter of 2019, while the yield on average tax-exempt investment securities decreased one basis point to 2.70%.

Total interest expense of $15.9 million in the third quarter of 2019 was $5.3 million greater than the $10.7 million reported for the same period in 2018. Total average interest-bearing liabilities increased $570.0 million as a result of organic growth and the Highlands acquisition. The cost of average interest-bearing liabilities increased from 1.08% in the third quarter of 2018 to 1.41% in the third quarter of 2019. The increase in the cost of interest-bearing liabilities was due primarily to an increasingly competitive market for deposits resulting from a higher interest rate environment as well as an increase in the cost of borrowings. For the third quarter of 2019, the cost of interest-bearing transaction accounts and time deposits increased by 35 basis points and 39 basis points, respectively, when compared to the same period in 2018, due to a higher rate environment as well as the impact of money market deposit account promotions and higher rates offered on certificates of deposit.

Provision for Loan Losses

In determining the provision for loan losses, management considers national and local economic conditions; trends in the portfolio including orientation to specific loan types or industries; experience, ability and depth of lending management in relation to the complexity of the portfolio; adequacy and adherence to policies, procedures and practices; levels and trends in delinquencies, impaired loans and charge-offs and the results of independent third-party loan reviews.

In the third quarter of 2019, a $536,000 provision for loan loss was recorded, compared to $1.0 million for the same period last year. The Company charged off $809,000 and recovered $266,000 in the third quarter of 2019 compared to $753,000 and $396,000, respectively, in the third quarter of 2018. For more information regarding the determination of the provision, see “Risk Elements” below.

Noninterest Income

The Company recorded noninterest income of $6.7 million and $5.6 million in the third quarter of 2019 and 2018, respectively, an increase of $1.1 million, or 19%, from the prior year. Service charges on deposits increased $237,000 compared to the third quarter of 2018 due primarily to an increase in deposit accounts. Commissions and fees increased $131,000 compared to the third quarter of 2018 due primarily to increased investment services income, while income on bank owned life insurance decreased $436,000 due primarily to a death benefit received during the third quarter of 2018. Gains on equity securities was $72,000 in the third quarter of 2019 compared to losses of $439,000 during the same period in 2018. Other income increased $616,000 compared to the third quarter of 2018 due primarily to gains resulting from payoffs of purchased credit impaired loans and an increase in swap income during the third quarter of 2019.

Noninterest Expense

Noninterest expense in the third quarter of 2019 totaled $29.6 million compared to $27.8 million reported for the same quarter of 2018, an increase of $1.8 million or 6%. Salaries and employee benefits expense was $19.1 million for the third quarter of 2019, increasing $1.7 million, or 10%, from the same period last year, as a result of additions to staff from the merger, additions to support continued growth, normal merit increases and increases in benefits costs. Net occupancy expense increased $451,000 due primarily to a branch write-down and the addition of the Highlands branches. For the third quarters of 2019 and 2018, data processing expense was $1.2 million and $1.1 million, respectively, an increase of $165,000 compared to the prior year period due primarily to the continued expansion and improvement of the Company's digital infrastructure as well as increases related to the Highlands merger. In the third quarter of 2019, $420,000 in previously recorded FDIC expense was reversed due to assessment credits from the FDIC, resulting from the insurance fund reserve ratio exceeding the required level. The FDIC expense reversal resulted in a favorable variance of $820,000 compared to the same period in 2018.

The Company’s efficiency ratio, a non-GAAP financial measure, was 52.8% in the third quarter of 2019, compared to 56.0% for the same period last year. The Company uses this ratio because it believes that the ratio provides a good comparison of period-to-period performance and because the ratio is widely accepted in the banking industry. The following table shows the calculation of the efficiency ratio for the periods presented:

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	For the Three Months Ended September 30,
(dollars in thousands)	2019			2018
Total noninterest expense	$	29,563		$	27,793
Amortization of core deposit intangibles	(288		)	(142		)
Noninterest expense, as adjusted	$	29,275		$	27,651
Net interest income	$	48,682		$	43,624
Noninterest income	6,700			5,639
Total revenue	55,382			49,263
Tax-equivalent adjustment on municipal securities	97			113
Total revenue, as adjusted	$	55,479		$	49,376
Efficiency ratio	52.8		%	56.0		%

Income Tax Expense

The effective tax rate in the third quarter of 2019 was 25.3% compared to 17.9% during the same period in 2018 as a result of a technical bulletin issued by the New Jersey Division of Taxation during the second quarter of 2019, which resulted in increasing our annualized effective tax rate in 2019 to 24.7%.

Comparison of Operating Results for the Nine Months Ended September 30, 2019 and 2018

Net Income

Net income was $52.0 million, or $1.02 per diluted share, for the first nine months of 2019 compared to net income of $47.9 million, or $0.99 per diluted share, for the first nine months of 2018. Net income increased primarily as a result of an increase in net interest income, which increased $17.1 million compared to the first nine months of 2018 resulting from growth in interest-earning assets and increases in loan yields, partially offset by an increase in interest-bearing liabilities and higher interest rates on deposits and borrowings.

Net Interest Income

Net interest income on a tax equivalent basis for the first nine months of 2019 was $146.8 million, compared to $129.7 million for the first nine months of 2018. The net interest margin of 3.35% in the first nine months of 2019 compared to 3.38% for the same period in 2018. The decrease in net interest margin resulted primarily from a 45 basis point increase in the cost of interest-bearing liabilities, partially offset by a 32 basis point increase in the yield on interest-earning assets. The components of net interest income will be discussed in greater detail below.

The following table reflects the components of the Company’s net interest income, setting forth for the periods presented, (1) average assets, liabilities and stockholders’ equity, (2) interest income earned on interest-earning assets and interest expense paid on interest-bearing liabilities, (3) average yields earned on interest-earning assets and average rates paid on interest-bearing liabilities, (4) the Company’s net interest spread (i.e., the average yield on interest-earning assets less the average cost of interest-bearing liabilities) and (5) the Company’s net interest margin. Rates for the nine months ended September 30, 2019 and September 30, 2018 are computed on a tax equivalent basis using a tax rate of 21%.

.

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	For the Nine Months Ended September 30, 2019							For the Nine Months Ended September 30, 2018
(dollars in thousands)	Average Balance			Interest Income/ Expense		Average Rates Earned/ Paid		Average Balance			Interest Income/ Expense		Average Rates Earned/ Paid
ASSETS
Interest-earning assets:
Loans (1)	$	4,908,952		$	175,324	4.78	%	$	4,246,338		$	142,384	4.48	%
Taxable investment securities and other	788,736			14,865		2.51	%	732,494			12,160		2.21	%
Tax-exempt securities	72,104			1,475		2.73	%	82,014			1,644		2.67	%
Federal funds sold (2)	83,127			1,297		2.08	%	65,831			844		1.71	%
Total interest-earning assets	5,852,919			192,961		4.41	%	5,126,677			157,032		4.09	%
Noninterest-earning assets:
Allowance for loan losses	(39,985		)					(36,458		)
Other assets	460,926							382,782
TOTAL ASSETS	$	6,273,860						$	5,473,001
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-bearing liabilities:
Savings accounts	$	503,260		$	253	0.07	%	$	491,810		$	217	0.06	%
Interest-bearing transaction accounts	2,599,004			23,742		1.22	%	2,252,112			12,293		0.73	%
Time deposits	938,751			13,531		1.92	%	781,230			8,175		1.40	%
Borrowings	396,897			8,639		2.87	%	341,119			6,649		2.57	%
Total interest-bearing liabilities	4,437,912			46,165		1.39	%	3,866,271			27,334		0.94	%
Noninterest-bearing liabilities:
Demand deposits	1,080,235							978,020
Other liabilities	66,175							35,257
Stockholders' equity	689,538							593,453
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	6,273,860						$	5,473,001
Net interest income/spread				146,796		3.02	%				129,698		3.15	%
Tax equivalent basis adjustment				310							345
NET INTEREST INCOME				$	146,486						$	129,353
Net interest margin (3)						3.35	%						3.38	%

(1) Includes non-accrual loans, the effect of which is to reduce the yield earned on loans, and deferred loan fees.

(2) Includes interest-bearing cash accounts.

(3) Net interest income divided by interest-earning assets.

Interest income on a tax equivalent basis increased from $157.0 million in the first nine months of 2018 to $193.0 million in the first nine months of 2019, an increase of $35.9 million, or 23%. The increase in interest income was primarily due to the same reasons discussed in the quarterly analysis. Average loans increased $662.6 million compared to the first nine months of 2018, while the yield on average loans at 4.78% in the first nine months of 2019 was 30 basis points higher than the same period in 2018. The yield on average taxable and tax-exempt investment securities increased 30 basis points and six basis points, respectively.

Total interest expense of $46.2 million in the first nine months of 2019 was $18.8 million greater than the $27.3 million reported for the same period in 2018. Total average interest-bearing liabilities increased $571.6 million, while the cost of average interest-bearing liabilities increased from 0.94% in the first nine months of 2018 to 1.39% in the first nine months of 2019. The increase in the balance and cost of interest-bearing liabilities was due primarily to the same reasons discussed in the quarterly analysis. The cost of interest-bearing transaction accounts and time deposits increased by 49 basis points and 52 basis points, respectively, while the cost of borrowings increased 30 basis points compared to the first nine months of 2018. Average time deposits increased from $781.2 million in the first nine months of 2018 to $938.8 million in the first nine months of 2019 primarily as a result of the Highlands acquisition and the Company's certificate of deposit promotion beginning in the last half of 2018.

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Provision for Loan Losses

In the first nine months of 2019, a $1.0 million provision for loan losses was recorded, compared to $3.8 million for the same period last year. The Company charged off $1.7 million and recovered $1.7 million in the first nine months of 2019 compared to $3.0 million and $982,000, respectively, in the first nine months of 2018. For more information regarding the determination of the provision, see “Risk Elements” below.

Noninterest Income

Noninterest income of $18.8 million in the first nine months of 2019 increased by $2.1 million from $16.7 million in the first nine months of 2018. Noninterest income for the first nine months of 2019 included $525,000 in gains on equity securities compared to losses of $384,000 during the same period in 2018. Service charges on deposits increased $409,000 compared to the first nine months of 2018 due primarily to an increase in debit card income. Commissions and fees increased $586,000 compared to the first nine months of 2018, while income on bank owned life insurance decreased $493,000, both due to the same reasons discussed in the quarterly comparison. Gains on sales of loans increased $255,000 due to an increase in sales of mortgages. Other income increased $464,000 compared to the same period in 2018 due primarily to an increase in swap income in the first nine months of 2019.

Noninterest Expense

Noninterest expense in the first nine months of 2019 totaled $95.2 million, which was $12.7 million more than the $82.5 million reported for the first nine months of 2018 and includes $3.2 million in expenses related to the acquisition of Highlands. Salaries and employee benefits and net occupancy expense increased $6.8 million and $693,000, respectively, from the same period last year, due primarily to the same reasons discussed in the quarterly comparison. FDIC expense decreased $794,000 in the first nine months of 2019, while data processing expense increased $1.3 million, compared to the same period in 2018, both due to the same reasons mentioned in the quarterly analysis. Marketing expense increased $270,000 primarily due to advertising related to the merger with Highlands. The Company’s efficiency ratio, a non-GAAP financial measure, was 55.0% in the first nine months of 2019, compared to 56.1% for the same period last year. The Company uses this ratio because it believes that the ratio provides a good comparison of period-to-period performance and because the ratio is widely accepted in the banking industry. The following table shows the calculation of the efficiency ratio for the periods presented:

	Nine Months Ended September 30,
(dollars in thousands)	2019			2018
Total noninterest expense	$	95,233		$	82,504
Amortization of core deposit intangibles	(893		)	(452		)
Long Term Debt prepayment fee	(3,178		)	—
Noninterest expense, as adjusted	$	91,162		$	82,052
Net interest income	$	146,486		$	129,353
Noninterest income	18,812			16,682
Total revenue	165,298			146,035
Tax-equivalent adjustment on municipal securities	310			345
Total revenue, as adjusted	$	165,608		$	146,380
Efficiency ratio	55.0		%	56.1		%

Income Tax Expense

The effective tax rate in the first nine months of 2019 was 24.7% compared to 19.9% during the same period last year as a result of a technical bulletin issued by the New Jersey Division of Taxation during the second quarter of 2019 that provided guidance on which entities are to be included in the combined return.

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Financial Condition

The Company’s total assets increased $686.4 million from December 31, 2018, to $6.49 billion at September 30, 2019. Total loans, net of deferred fees, were $4.92 billion, an increase of $466.7 million, or 10%, from $4.46 billion at December 31, 2018. Total deposits were $5.21 billion, an increase of $589.9 million, or 13%, from December 31, 2018.

With the completion of the Highlands merger in January 2019, the Company recorded the assets acquired and the liabilities assumed in the acquisition at their estimated fair values as of the acquisition date. Total assets acquired were $496.5 million, total loans and total deposits acquired were $426.1 million and $409.6 million, respectively.

Loans

Gross loans of $4.93 billion at September 30, 2019 increased $465.6 million from December 31, 2018, primarily in the commercial loans secured by real estate category which increased $385.2 million, or 13%, $332.8 million of which was from the Highlands acquisition. Commercial, industrial and other loans increased $54.8 million, or 16%, $44.7 million of which was from the Highlands acquisition. For more information on the loan portfolio, see Note 6 in Notes to the Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Risk Elements

Non-performing assets, excluding PCI loans, increased from $13.0 million at December 31, 2018 to $16.9 million at September 30, 2019. Non-accrual loans in the commercial loans secured by real estate, residential mortgages and home equity and consumer categories increased $2.0 million, $1.3 million and $1.0 million, respectively. The percentage of non-performing assets to total assets was 0.26% at September 30, 2019 compared to 0.22% at December 31, 2018. Non-accrual loans at September 30, 2019 included 2 loan relationships with a balance of $1 million or greater, totaling $5.8 million, and 4 loan relationships between $500,000 and $1.0 million, totaling $3.3 million. There were no loans past due ninety days or more and still accruing at September 30, 2019 and December 31, 2018.

Troubled debt restructurings are those loans where the Company has granted concessions to the borrower in payment terms, either in rate or in term, as a result of the financial condition of the borrower. On September 30, 2019, the Company had $5.0 million in loans that were troubled debt restructurings and accruing interest income compared to $9.3 million at December 31, 2018. These loans are expected to be able to perform under the modified terms of the loan. On September 30, 2019, the Company had $1.6 million in troubled debt restructurings that were included in non-accrual loans compared to $3.6 million at December 31, 2018.

On September 30, 2019, the Company had $17.7 million in impaired loans (consisting primarily of non-accrual and restructured loans) compared to $19.7 million at year-end 2018. The Company also had purchased credit impaired loans from the Highlands, Pascack and Harmony acquisitions with carrying values of $11.6 million, $122,000 and $456,000, respectively, at September 30, 2019. For more information on impaired loans see Note 6 in Notes to the Consolidated Financial Statements of this Quarterly Report on Form 10-Q. The valuation allowance for impaired loans is based primarily on the fair value of the underlying collateral. Based on such evaluation, $226,000 of the allowance for loan losses has been allocated for impairment at September 30, 2019 compared to $338,000 at December 31, 2018. At September 30, 2019 and December 31, 2018, the Company had $52.1 million and $41.8 million, respectively, in loans that were rated substandard that were not classified as non-performing or impaired.

There were no loans at September 30, 2019, other than those designated non-performing, impaired or substandard, where the Company was aware of any credit conditions of any borrowers or obligors that would indicate a strong possibility of the borrowers not complying with present terms and conditions of repayment and which may result in such loans being included as non-accrual, past due or renegotiated at a future date.

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The following table sets forth for the periods presented, the historical relationships among the allowance for loan losses, the provision for loan losses, the amount of loans charged-off and the amount of loan recoveries:

(dollars in thousands)	For the Nine Months Ended September 30, 2019			For the Nine Months Ended September 30, 2018			For the Year Ended December 31, 2018
Balance at the beginning of the year	$	37,688		$	35,455		$	35,455
Loans charged off:
Commercial, secured by real estate	(501		)	(256		)	(421		)
Commercial, industrial and other	(610		)	(1,452		)	(1,452		)
Equipment finance	(380		)	(463		)	(507		)
Real estate - mortgage	(50		)	(131		)	(131		)
Real estate - construction	—			(248		)	(248		)
Home equity and consumer	(197		)	(416		)	(588		)
Total loans charged off	(1,738		)	(2,966		)	(3,347		)
Recoveries:
Commercial, secured by real estate	212			440			468
Commercial, industrial and other	1,076			273			317
Equipment finance	2			7			23
Real estate - mortgage	66			7			10
Real estate - construction	104			12			17
Home equity and consumer	201			243			332
Total recoveries	1,661			982			1,167
Net recoveries (charge-offs)	(77		)	(1,984		)	(2,180		)
Provision for loan losses	1,044			3,822			4,413
Ending balance	$	38,655		$	37,293		$	37,688
Net charge-offs as a percentage of average loans outstanding	—		%	0.06		%	0.05		%
Allowance as a percentage of total loans outstanding	0.78		%	0.86		%	0.84		%
Allowance as a percentage of non-accrual loans	242.85		%	335.25		%	310.70		%

The determination of the adequacy of the allowance for loan 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 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 Losses Committee, which gives final approval to the allowance evaluation before being presented to the Board of Directors for their approval.

The methodology employed for assessing the adequacy of the allowance consists of the following criteria:

• The establishment of specific reserve amounts for impaired loans, including PCI loans.

• The establishment of reserves for pools of homogeneous loans not subject to specific review, including impaired loans under $500,000, equipment finance, 1 - 4 family residential mortgages, and consumer loans.

The establishment of reserve amounts for pools of homogeneous loans 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 include 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.

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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 losses may be subject to change. To the extent actual outcomes differ from management estimates, additional provisions for loan losses may be required that would adversely impact earnings in future periods.

The overall balance of the allowance for loan losses of $38.7 million at September 30, 2019 increased $967,000 from December 31, 2018, an increase of 3%. The change in the allowance within loan segments during the two comparable periods captures changes in the non-performing loan and charge-off statistics and the level of loan growth.

Non-performing loans of $15.9 million at September 30, 2019 increased $3.8 million from December 31, 2018. The allowance for loan losses as a percent of total loans was 0.78% at September 30, 2019 compared to 0.84% at December 31, 2018. The reduction in the percentage of the allowance for loan losses as a percent of total loans was primarily due to the loans resulting from the Highlands acquisition which are accounted for under acquisition accounting and have no allowance for loan loss. Excluding the loans from prior acquisitions, the allowance as a percent of total loans would be 0.91% as of September 30, 2019. Management believes, based on appraisals and estimated selling costs that the majority of the Company's non-performing loans are adequately secured and reserves on its non-performing loans are adequate. Based upon the process employed and giving recognition to all accompanying factors related to the loan portfolio, management considers the allowance for loan losses to be adequate at September 30, 2019.

Investment Securities

For detailed information on the composition and maturity distribution of the Company’s investment securities portfolio, see Note 5 in Notes to Consolidated Financial Statements contained in this Quarterly Report on Form 10-Q. Investment securities totaled $871.5 million at September 30, 2019 and $792.3 million at December 31, 2018, increasing $79.3 million from year-end and includes $22.7 million acquired in the Highlands merger.

Deposits

Total deposits increased from $4.62 billion at December 31, 2018 to $5.21 billion at September 30, 2019, an increase of $589.9 million, or 13%, including $409.6 million acquired in the Highlands merger. Savings and interest-bearing transaction accounts and time deposits increased $282.9 million and $156.2 million, respectively. Noninterest-bearing deposits increased $150.9 million during the first nine months of 2019. The Highlands acquisition included $81.1 million, $196.2 million and $132.3 million in noninterest-bearing transaction accounts, savings and interest-bearing transaction accounts and time deposits, respectively.

Liquidity

“Liquidity” measures whether an entity has sufficient cash flow to meet its financial obligations and commitments on a timely basis. The Company is liquid when its subsidiary bank has the cash available to meet the borrowing and cash withdrawal requirements of customers and the Company can pay for current and planned expenditures and satisfy its debt obligations.

Lakeland funds loan demand and operation expenses from several sources:

• Net income. Cash provided by operating activities was $61.6 million for the first nine months of 2019 compared to $66.4 million for the same period in 2018.

• Deposits. Lakeland can offer new products or change its rate structure in order to increase deposits. In the first nine months of 2019, Lakeland’s deposits increased $180.3 million excluding the impact of the Highlands acquisition.

• Sales of securities. At September 30, 2019 the Company had $720.4 million in securities designated “available for sale.” Of these securities, $497.0 million were pledged to secure public deposits and for other purposes required by applicable laws and regulations.

• Repayments on loans can also be a source of liquidity.

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• Credit lines. As a member of the FHLB, Lakeland has the ability to borrow overnight based on the market value of collateral pledged. Lakeland had $100.0 million in overnight borrowings from the FHLB on September 30, 2019. Lakeland also has overnight federal funds lines available for it to borrow up to $230.0 million, of which $55.0 million was outstanding at September 30, 2019. 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 September 30, 2019.

• 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 Lakeland to pledge additional collateral to meet that margin call.

Management and the Board monitor the Company’s liquidity through the Asset/Liability Committee, which monitors the Company’s compliance with certain regulatory ratios and other various liquidity guidelines.

The cash flow statements for the periods presented provide an indication of the Company’s sources and uses of cash, as well as an indication of the ability of the Company to maintain an adequate level of liquidity. A discussion of the cash flow statement for the nine months ended September 30, 2019 follows.

Cash and cash equivalents totaling $282.0 million on September 30, 2019 increased $73.4 million from December 31, 2018. Operating activities provided $61.6 million in net cash. Investing activities used $72.6 million in net cash, primarily reflecting an increase in loans and the purchase of securities. Financing activities provided $84.4 million in net cash primarily reflecting the net increase in deposits of $181.0 million partially offset by net repayments of other borrowings. The Company anticipates that it will have sufficient funds available to meet its current loan commitments and deposit maturities. This constitutes a forward-looking statement under the Private Securities Litigation Reform Act of 1995.

The following table sets forth contractual obligations and other commitments representing required and potential cash outflows as of September 30, 2019. Interest on subordinated debentures and long-term borrowed funds is calculated based on current contractual interest rates.

(in thousands)	Total		Within One Year		After One But Within Three Years		After Three But Within Five Years		After Five Years
Minimum annual rentals on noncancellable operating leases	$	23,860	$	3,186	$	5,456	$	4,190	$	11,028
Benefit plan commitments	5,413		396		793		804		3,420
Remaining contractual maturities of time deposits	913,213		740,850		157,133		15,230		—
Subordinated debentures	118,211		—		—		5,351		112,860
Loan commitments	1,092,208		799,743		148,322		26,480		117,663
Other borrowings	165,818		45,707		90,108		30,003		—
Interest on other borrowings*	47,619		9,777		1,546		12,974		23,322
Standby letters of credit	18,631		18,310		241		—		80
Total	$	2,384,973	$	1,617,969	$	403,599	$	95,032	$	268,373

*Includes interest on other borrowings and subordinated debentures at a weighted rate of 3.54%.    

Capital Resources

Total stockholders’ equity increased to $713.2 million on September 30, 2019 from $623.7 million on December 31, 2018, an increase of $89.5 million. Book value per common share increased to $14.13 on September 30, 2019 from $13.14 on December 31, 2018. Tangible book value per share increased from $10.22 per share on December 31, 2018 to $10.94 per share on September 30, 2019, an increase of 7%. Please see “Non-GAAP Financial Measures” below. In addition to the equity acquired in the Highlands merger of $43.4 million, the increase in stockholders’ equity from December 31, 2018 to September 30, 2019 was primarily due to $52.0 million of net income and other comprehensive income of $11.0 million, which was partially offset by the payment of cash dividends on common stock of $18.6 million.

48

The Company and Lakeland are subject to various regulatory capital requirements that are monitored by federal banking agencies. Failure to meet minimum capital requirements can lead to certain supervisory actions by regulators; any supervisory action could have a direct material adverse effect on the Company or Lakeland or their financial statements. As of September 30, 2019, the Company and Lakeland met all capital adequacy requirements to which they are subject.     

The final rules implementing the Basel Committee on Banking Supervision’s (“BCBS”) capital guidelines for U.S. banks became effective for the Company on January 1, 2015, with full compliance with all of the final rule’s requirements phased in over a multi-year schedule, occurring January 1, 2019. As of September 30, 2019, the Company’s capital levels remained characterized as “well-capitalized” under the new rules.

The capital ratios for the Company and Lakeland for the periods presented are as follows: 

	Tier 1 Capital to Total Average Assets Ratio				Common Equity Tier 1 to Risk-Weighted Assets Ratio				Tier 1 Capital to Risk- Weighted Assets Ratio				Total Capital to Risk- Weighted Assets Ratio
	September 30, 2019		December 31, 2018		September 30, 2019		December 31, 2018		September 30, 2019		December 31, 2018		September 30, 2019		December 31, 2018
The Company	9.34	%	9.39	%	10.66	%	10.62	%	11.24	%	11.27	%	13.70	%	13.71	%
Lakeland Bank	10.12	%	10.17	%	12.19	%	12.20	%	12.19	%	12.20	%	12.97	%	13.06	%
Required capital ratios including conservation buffer	4.00	%	4.00	%	7.00	%	6.375	%	8.50	%	7.875	%	10.50	%	9.875	%
“Well capitalized” institution under FDIC Regulations	5.00	%	5.00	%	6.50	%	6.50	%	8.00	%	8.00	%	10.00	%	10.00	%

The Economic Growth, Regulatory Relief, and Consumer Protection Act (the “Act”) was signed into law during the second quarter of 2018. The Act, among other matters, amends the Federal Deposit Insurance Act to require federal banking agencies to develop a specified Community Bank Leverage Ratio (the ratio of a bank's equity capital to its consolidated assets) for banks with assets of less than $10 billion. Banks that exceed this ratio shall be deemed to comply with all other capital and leverage requirements. In September 2019, the FDIC approved a final rule allowing community banks with a leverage capital ratio of at least 9% to be considered in compliance with Basel III capital requirements and exempt from the Basel Calculation. Under the final rule, banks with less than $10 billion in assets may elect the community bank leverage ratio framework if they meet the 9 percent ratio and if they hold 25 or less percent of assets in off-balance sheet exposures, and 5 percent or less of assets in trading assets and liabilities. For institutions that fall below the 9% capital requirement but remain above 8%, the final rule establishes a 2 quarter grace period to either meet the qualifying criteria again or comply with the generally applicable capital rule.

49

Non-GAAP Financial Measures

Reported amounts are presented in accordance with U.S. GAAP. The Company’s management uses certain supplemental non-GAAP information in its analysis of the Company’s financial results. Specifically, the Company provides measurements and ratios based on tangible equity and tangible assets. These measures are utilized by regulators and market analysts to evaluate a company’s financial condition and therefore, such information is useful to investors.

The Company also provides measures based on what it believes are its operating earnings on a consistent basis, and excludes material non-routine operating items which affect the GAAP reporting of results of operations. The Company’s management believes that providing this information to analysts and investors allows them to better understand and evaluate the Company’s core financial results for the periods in question.

These disclosures should not be viewed as a substitute for financial results determined in accordance with U.S. GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies.

(dollars in thousands, except per share amounts)	September 30, 2019			December 31, 2018
Calculation of Tangible Book Value per Common Share
Total common stockholders’ equity at end of period - GAAP	$	713,204		$	623,739
Less:
Goodwill	156,277			136,433
Other identifiable intangible assets, net	4,602			1,768
Total tangible common stockholders’ equity at end of period - Non-GAAP	$	552,325		$	485,538
Shares outstanding at end of period	50,489			47,486
Book value per share - GAAP	$	14.13		$	13.14
Tangible book value per share - Non-GAAP	$	10.94		$	10.22
Calculation of Tangible Common Equity to Tangible Assets
Total tangible common stockholders’ equity at end of period - Non-GAAP	$	552,325		$	485,538
Total assets at end of period	$	6,492,474		$	5,806,093
Less:
Goodwill	156,277			136,433
Other identifiable intangible assets, net	4,602			1,768
Total tangible assets at end of period - Non-GAAP	$	6,331,595		$	5,667,892
Common equity to assets - GAAP	10.99		%	10.74		%
Tangible common equity to tangible assets - Non-GAAP	8.72		%	8.57		%

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
(dollars in thousands)	2019			2018			2019			2018
Calculation of Return on Average Tangible Common Equity
Net income - GAAP	$	18,874		$	16,758		$	51,957		$	47,851
Total average common stockholders’ equity	$	705,726		$	603,059		$	689,538		$	593,453
Less:
Average goodwill	155,835			136,433			154,531			136,433
Average other identifiable intangible assets, net	4,761			1,982			5,022			2,138
Total average tangible common stockholders’ equity - Non-GAAP	$	545,130		$	464,644		$	529,985		$	454,882
Return on average common stockholders’ equity - GAAP	10.61		%	11.02		%	10.07		%	10.78		%
Return on average tangible common stockholders’ equity - Non-GAAP	13.74		%	14.31		%	13.11		%	14.06		%

50

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(dollars in thousands, except per share amounts)	2019		2018		2019		2018
Net income - GAAP	$	18,874	$	16,758	$	51,957	$	47,851
Non-routine transactions, net of tax
Tax deductible merger related expenses	—		—		1,878		—
Non-tax deductible merger related expenses	—		—		491		—
Net effect of non-routine transactions	—		—		2,369		—
Net income available to common shareholders excluding non-routine transactions	$	18,874	$	16,758	$	54,326	$	47,851
Less: Earnings allocated to participating securities	156		153		443		440
Net Income, excluding non-routine transactions	$	18,718	$	16,605	$	53,883	$	47,411
Weighted average shares - Basic	50,553		47,605		50,447		47,570
Weighted average shares - Diluted	50,694		47,788		50,595		47,764
Basic earnings per share - GAAP	$	0.37	$	0.35	$	1.02	$	1.00
Diluted earnings per share - GAAP	$	0.37	$	0.35	$	1.02	$	0.99
Basic earnings per share, adjusted for non-routine transactions	$	0.37	$	0.35	$	1.07	$	1.00
Diluted earnings per share, adjusted for non-routine transactions (Core EPS)	$	0.37	$	0.35	$	1.06	$	0.99

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company manages interest rate risk and market risk by identifying and quantifying interest rate risk exposures using simulation analysis and economic value at risk models. Net interest income simulation considers the relative sensitivities of the balance sheet including the effects of interest rate caps on adjustable rate mortgages and the relatively stable aspects of core deposits. As such, net interest income simulation is designed to address the probability of interest rate changes and the behavioral response of the balance sheet to those changes. Market Value of Portfolio Equity represents the fair value of the net present value of assets, liabilities and off-balance-sheet items. Changes in estimates and assumptions made for interest rate sensitivity modeling could have a significant impact on projected results and conclusions. These assumptions could include prepayment rates, sensitivity of non-maturity deposits and other similar assumptions. Therefore, if our assumptions should change, this technique may not accurately reflect the impact of general interest rate movements on the Company’s net interest income or net portfolio value.

The starting point (or “base case”) for the following table is an estimate of the following year’s net interest income assuming that both interest rates and the Company’s interest-sensitive assets and liabilities remain at period-end levels. The net interest income estimated for the next twelve months (the base case) is $195.8 million. The information provided for net interest income assumes that changes in interest rates of plus 200 basis points and minus 200 basis points change gradually in equal increments (“rate ramp”) over the twelve month period.

	Changes in Interest Rates
Rate Ramp	+200 bp		-200 bp
Asset/Liability policy limit	(5.0	)%	(5.0	)%
September 30, 2019	(0.6	)%	(0.7	)%
December 31, 2018	(1.5	)%	(0.7	)%

51

The Company’s review of interest rate risk also includes policy limits for net interest income changes in various “rate shock” scenarios. Rate shocks assume that current interest rates change immediately. The information provided for net interest income assumes fluctuations or “rate shocks” for changes in interest rates as shown in the table below.

	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	)%
September 30, 2019	2.0	%	1.5	%	1.0	%	(3.0	)%	(3.5	)%
December 31, 2018	0.6	%	0.4	%	0.3	%	(2.5	)%	(8.0	)%

The base case for the following table is an estimate of the Company’s net portfolio value for the periods presented using current discount rates, and assuming the Company’s interest-sensitive assets and liabilities remain at period-end levels. The net portfolio value at September 30, 2019 (the base case) was $850.3 million. The information provided for the net portfolio value assumes fluctuations or “rate shocks” for changes in interest rates as shown in the table below. Rate shocks assume that current interest rates change immediately.

	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	)%
September 30, 2019	(4.5	)%	(2.4	)%	(0.6	)%	(1.4	)%	(5.8	)%
December 31, 2018	(5.2	)%	(3.3	)%	(1.4	)%	(0.2	)%	(1.5	)%

The information set forth in the above tables is based on significant estimates and assumptions, and constitutes a forward-looking statement under the Private Securities Litigation Reform Act of 1995. For more information regarding the Company’s market risk and assumptions used in the Company’s simulation models, please refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Certain shortcomings are inherent in the methodologies used in the above interest rate risk measurements. Modeling changes in net interest income requires the making of certain assumptions regarding prepayment and deposit decay rates, which may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. While management believes such assumptions are reasonable, there can be no assurance that assumed prepayment rates and decay rates will approximate actual future loan prepayment and deposit withdrawal activity. Moreover, the net interest income table presented assumes that the composition of interest sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured and also assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration to maturity or repricing of specific assets and liabilities. Accordingly, although the net interest income table provides an indication of the Company’s interest rate risk exposure at a particular point in time, such measurement is not intended to and does not provide a precise forecast of the effect of changes in market interest rates on net interest income and will differ from actual results.

Item 4.  Controls and Procedures

(a)Disclosure controls and procedures. As of the end of the Company’s most recently completed fiscal quarter covered by this report, the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures pursuant to Securities Exchange Act Rule 13a-15. Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and are operating in an effective manner and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

(b)Changes in internal controls over financial reporting. There have been no changes in the Company’s internal control over financial reporting that occurred during the quarter ended September 30, 2019 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

52

PART II. OTHER INFORMATION

Item 1.   Legal Proceedings

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.

Item 1A.   Risk Factors

There have been no material changes in risk factors from those disclosed under Item 1A, “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds Not Applicable

Item 3.   Defaults Upon Senior Securities Not Applicable

Item 4.   Mine Safety Disclosures Not Applicable

Item 5.   Other Information Not Applicable

Item 6.   Exhibits

31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	Inline XBRL Instance Document (The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document)
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibits 101)

53

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Lakeland Bancorp, Inc.

(Registrant)

/s/ Thomas J. Shara

Thomas J. Shara

President and Chief Executive Officer

(Principal Executive Officer)

/s/ Thomas F. Splaine

Thomas F. Splaine

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

Date: November 8, 2019

54

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Thomas J. Shara, certify that:

1. I have reviewed this quarterly report on Form 10-Q 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 controls 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.

Date: November 8, 2019

/s/ Thomas J. Shara

Thomas J. Shara

President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Thomas F. Splaine, Jr., certify that:

1.    I have reviewed this quarterly report on Form 10-Q 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 controls 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.

Dated: November 8, 2019

/s/ Thomas F. Splaine, Jr.

Thomas F. Splaine, Jr.

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

AND OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Lakeland Bancorp, Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2019 filed with the Securities and Exchange Commission (the “Report”), Thomas J. Shara, President and Chief Executive Officer of the Company, and Thomas F. Splaine, Jr., Executive Vice President and Chief Financial Officer of the Company, each certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that based on his knowledge:

(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.

Dated: November 8, 2019

/s/ Thomas J. Shara

Thomas J. Shara,

President and Chief Executive Officer

(Principal Executive Officer)

/s/ Thomas F. Splaine, Jr.

Thomas F. Splaine, Jr.

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

This certification has been furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Investment securities held to maturity, Fair Value	$ 152,495	$ 150,932
Common stock, par value (in usd per share)	$ 0	$ 0
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	50,489,161	47,486,250

XML

Loans and Other Real Estate - Company's Commercial Loan Portfolio (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Financing Receivable, Recorded Investment [Line Items]
Total loans	$ 4,884,759	$ 4,419,045
Commercial, secured by real estate
Financing Receivable, Recorded Investment [Line Items]
Total loans	3,442,973	3,057,779
Commercial, secured by real estate | 1
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
Commercial, secured by real estate | 2
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
Commercial, secured by real estate | 3
Financing Receivable, Recorded Investment [Line Items]
Total loans	71,581	69,995
Commercial, secured by real estate | 4
Financing Receivable, Recorded Investment [Line Items]
Total loans	910,695	933,577
Commercial, secured by real estate | 5
Financing Receivable, Recorded Investment [Line Items]
Total loans	2,245,570	1,910,423
Commercial, secured by real estate | 5W - Watch
Financing Receivable, Recorded Investment [Line Items]
Total loans	103,619	61,626
Commercial, secured by real estate | 6 - Other assets especially mentioned
Financing Receivable, Recorded Investment [Line Items]
Total loans	50,155	38,844
Commercial, secured by real estate | 7 - Substandard
Financing Receivable, Recorded Investment [Line Items]
Total loans	61,353	43,314
Commercial, secured by real estate | 8 - Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
Commercial, secured by real estate | 9 - Loss
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
Commercial, industrial and other
Financing Receivable, Recorded Investment [Line Items]
Total loans	391,486	336,735
Commercial, industrial and other | 1
Financing Receivable, Recorded Investment [Line Items]
Total loans	2,655	1,119
Commercial, industrial and other | 2
Financing Receivable, Recorded Investment [Line Items]
Total loans	17,865	18,462
Commercial, industrial and other | 3
Financing Receivable, Recorded Investment [Line Items]
Total loans	34,392	36,367
Commercial, industrial and other | 4
Financing Receivable, Recorded Investment [Line Items]
Total loans	91,329	91,145
Commercial, industrial and other | 5
Financing Receivable, Recorded Investment [Line Items]
Total loans	208,024	168,474
Commercial, industrial and other | 5W - Watch
Financing Receivable, Recorded Investment [Line Items]
Total loans	24,302	7,798
Commercial, industrial and other | 6 - Other assets especially mentioned
Financing Receivable, Recorded Investment [Line Items]
Total loans	3,805	2,033
Commercial, industrial and other | 7 - Substandard
Financing Receivable, Recorded Investment [Line Items]
Total loans	9,114	11,337
Commercial, industrial and other | 8 - Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
Commercial, industrial and other | 9 - Loss
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
Real estate - construction
Financing Receivable, Recorded Investment [Line Items]
Total loans	306,440	319,545
Real estate - construction | 1
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
Real estate - construction | 2
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
Real estate - construction | 3
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
Real estate - construction | 4
Financing Receivable, Recorded Investment [Line Items]
Total loans	18,871	17,375
Real estate - construction | 5
Financing Receivable, Recorded Investment [Line Items]
Total loans	273,997	297,625
Real estate - construction | 5W - Watch
Financing Receivable, Recorded Investment [Line Items]
Total loans	8,487	3,493
Real estate - construction | 6 - Other assets especially mentioned
Financing Receivable, Recorded Investment [Line Items]
Total loans	967	0
Real estate - construction | 7 - Substandard
Financing Receivable, Recorded Investment [Line Items]
Total loans	4,118	1,052
Real estate - construction | 8 - Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
Real estate - construction | 9 - Loss
Financing Receivable, Recorded Investment [Line Items]
Total loans	$ 0	$ 0

XML

Loans and Other Real Estate - Schedule of Changes in Accretable Yield (Detail) - Loans Acquired with Deteriorated Credit Quality - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Balance, beginning of period	$ 1,191	$ 100	$ 81	$ 129
Acquisitions	0	0	1,431	0
Accretion	(306)	(58)	(687)	(145)
Net reclassification non-accretable difference	16	41	76	99
Balance, end of period	$ 901	$ 83	$ 901	$ 83

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Consolidated Statements of Changes in Stockholders' Equity (Unaudited) Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Statement of Stockholders' Equity [Abstract]
Common stock, dividends price per share (in usd per share)	$ 0.125	$ 0.115	$ 0.365	$ 0.330

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Recent Accounting Pronouncements - Additional Information (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Jan. 01, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease right-of-use assets	$ 17,953	$ 18,651
Operating lease liabilities	$ 19,509	20,203
Cumulative adjustment for adoption of ASU 2016-01		125
Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease right-of-use assets		18,700
Operating lease liabilities		$ 20,200

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Share-Based Compensation - Summary of Company's Restricted Stock Activity (Detail)	9 Months Ended
	Sep. 30, 2019 $ / shares shares
Restricted Stock
Number of Shares
Balance at beginning of period (in shares) | shares	11,701
Granted (in shares) | shares	13,052
Vested (in shares) | shares	(11,643)
Forfeited (in shares) | shares	0
Balance at end of period (in shares) | shares	13,110
Weighted Average Price
Balance at beginning of period (in usd per share) | $ / shares	$ 20.18
Granted (in usd per share) | $ / shares	15.96
Vested (in usd per share) | $ / shares	20.24
Forfeited (in usd per share) | $ / shares	0
Balance of end of period (in usd per share) | $ / shares	$ 15.93
RSUs
Number of Shares
Balance at beginning of period (in shares) | shares	299,347
Granted (in shares) | shares	141,059
Vested (in shares) | shares	(107,396)
Forfeited (in shares) | shares	(7,565)
Balance at end of period (in shares) | shares	325,445
Weighted Average Price
Balance at beginning of period (in usd per share) | $ / shares	$ 16.60
Granted (in usd per share) | $ / shares	16.62
Vested (in usd per share) | $ / shares	12.20
Forfeited (in usd per share) | $ / shares	17.86
Balance of end of period (in usd per share) | $ / shares	$ 18.03

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Estimated Fair Value of Financial Instruments and Fair Value Measurement - Fair Value of Financial Assets and Liabilities Measured on Recurring Basis (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Assets:
Investment securities available for sale, at fair value	$ 720,405	$ 638,618
Equity securities, at fair value	15,552	15,921
U.S. Treasury and U.S. government agencies
Assets:
Investment securities available for sale, at fair value	146,330	140,927
Obligations of states and political subdivisions
Assets:
Investment securities available for sale, at fair value	44,044	45,505
Fair Value, Measurements, Recurring
Assets:
Investment securities available for sale, at fair value	720,405	638,618
Equity securities, at fair value	15,552	15,921
Derivative assets	34,722	12,135
Total Assets	770,679	666,674
Liabilities:
Derivative liabilities	34,430	11,036
Total Liabilities	34,430	11,036
Fair Value, Measurements, Recurring | U.S. Treasury and U.S. government agencies
Assets:
Investment securities available for sale, at fair value	146,330	140,927
Fair Value, Measurements, Recurring | Mortgage-backed securities
Assets:
Investment securities available for sale, at fair value	524,898	447,094
Fair Value, Measurements, Recurring | Obligations of states and political subdivisions
Assets:
Investment securities available for sale, at fair value	44,044	45,505
Fair Value, Measurements, Recurring | Other debt securities
Assets:
Investment securities available for sale, at fair value	5,133	5,092
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Measurements, Recurring
Assets:
Investment securities available for sale, at fair value	12,618	4,920
Equity securities, at fair value	1,843	2,731
Derivative assets	0	0
Total Assets	14,461	7,651
Liabilities:
Derivative liabilities	0	0
Total Liabilities	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Measurements, Recurring | U.S. Treasury and U.S. government agencies
Assets:
Investment securities available for sale, at fair value	12,618	4,920
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Measurements, Recurring | Mortgage-backed securities
Assets:
Investment securities available for sale, at fair value	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Measurements, Recurring | Obligations of states and political subdivisions
Assets:
Investment securities available for sale, at fair value	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Measurements, Recurring | Other debt securities
Assets:
Investment securities available for sale, at fair value	0	0
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring
Assets:
Investment securities available for sale, at fair value	707,787	633,698
Equity securities, at fair value	13,709	13,190
Derivative assets	34,722	12,135
Total Assets	756,218	659,023
Liabilities:
Derivative liabilities	34,430	11,036
Total Liabilities	34,430	11,036
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | U.S. Treasury and U.S. government agencies
Assets:
Investment securities available for sale, at fair value	133,712	136,007
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | Mortgage-backed securities
Assets:
Investment securities available for sale, at fair value	524,898	447,094
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | Obligations of states and political subdivisions
Assets:
Investment securities available for sale, at fair value	44,044	45,505
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | Other debt securities
Assets:
Investment securities available for sale, at fair value	5,133	5,092
Significant Unobservable Inputs (Level 3) | Fair Value, Measurements, Recurring
Assets:
Investment securities available for sale, at fair value	0	0
Equity securities, at fair value	0	0
Derivative assets	0	0
Total Assets	0	0
Liabilities:
Derivative liabilities	0	0
Total Liabilities	0	0
Significant Unobservable Inputs (Level 3) | Fair Value, Measurements, Recurring | U.S. Treasury and U.S. government agencies
Assets:
Investment securities available for sale, at fair value	0	0
Significant Unobservable Inputs (Level 3) | Fair Value, Measurements, Recurring | Mortgage-backed securities
Assets:
Investment securities available for sale, at fair value	0	0
Significant Unobservable Inputs (Level 3) | Fair Value, Measurements, Recurring | Obligations of states and political subdivisions
Assets:
Investment securities available for sale, at fair value	0	0
Significant Unobservable Inputs (Level 3) | Fair Value, Measurements, Recurring | Other debt securities
Assets:
Investment securities available for sale, at fair value	$ 0	$ 0

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Loans and Other Real Estate

9 Months Ended

Sep. 30, 2019

Receivables [Abstract]

Loans and Other Real Estate

LOANS AND OTHER REAL ESTATE

The following sets forth the composition of the Company’s loan portfolio:

(in thousands)	September 30, 2019			December 31, 2018
Commercial, secured by real estate	$	3,442,973		$	3,057,779
Commercial, industrial and other	391,486			336,735
Equipment finance	104,689			87,925
Real estate - residential mortgage	337,482			329,854
Real estate - construction	306,440			319,545
Home equity and consumer	342,928			328,609
Total loans	4,925,998			4,460,447
Less: deferred fees	(2,584		)	(3,714		)
Loans, net of deferred fees	$	4,923,414		$	4,456,733

At September 30, 2019 and December 31, 2018, home equity and consumer loans included overdraft deposit balances of $391,000 and $452,000, respectively. At September 30, 2019 and December 31, 2018, the Company had $1.35 billion and $1.16 billion, respectively, in loans pledged for actual and potential borrowings at the Federal Home Loan Bank of New York (“FHLB”).

Purchased Credit Impaired Loans

The following sets forth the carrying value of the purchased credit impaired ("PCI") loans acquired in mergers:

(in thousands)	September 30, 2019		December 31, 2018
Acquisition
Highlands	$	11,627	$	—
Pascack Community Bank ("Pascack")	122		157
Harmony Bank ("Harmony")	456		495
Total	$	12,205	$	652

The carrying value of loans acquired in the Highlands merger and accounted for in accordance with ASC Subtopic 310-30, “Loans and Debt Securities Acquired with Deteriorated Credit Quality,” was $13.8 million at acquisition on January 4, 2019.

The following table presents changes in the accretable yield for PCI loans:

	For the Three Months Ended						For the Nine Months Ended
(in thousands)	September 30, 2019			September 30, 2018			September 30, 2019			September 30, 2018
Balance, beginning of period	$	1,191		$	100		$	81		$	129
Acquisitions	—			—			1,431			—
Accretion	(306		)	(58		)	(687		)	(145		)
Net reclassification non-accretable difference	16			41			76			99
Balance, end of period	$	901		$	83		$	901		$	83

Non-Performing Assets and Past Due Loans

The following schedule sets forth certain information regarding the Company’s non-performing assets and its accruing troubled debt restructurings, excluding PCI loans:

(in thousands)	September 30, 2019		December 31, 2018
Commercial, secured by real estate	$	9,164	$	7,192
Commercial, industrial and other	795		1,019
Equipment finance	271		501
Real estate - residential mortgage	3,250		1,986
Home equity and consumer	2,437		1,432
Total non-accrual loans	$	15,917	$	12,130
Other real estate and other repossessed assets	944		830
TOTAL NON-PERFORMING ASSETS	$	16,861	$	12,960
Troubled debt restructurings, still accruing	$	5,029	$	9,293

Non-accrual loans included $1.6 million and $3.6 million of troubled debt restructurings at September 30, 2019 and December 31, 2018, respectively. At September 30, 2019 and December 31, 2018, the Company had $1.0 million and $1.5 million, respectively, in residential mortgages and consumer home equity loans that were in the process of foreclosure which are included in non-accrual loans in the above table.

An age analysis of past due loans, excluding PCI loans which are accounted for on a pool basis, segregated by class of loans as of September 30, 2019 and December 31, 2018, is as follows:

(in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater Than 89 Days Past Due		Total Past Due		Current		Total Loans		Recorded Investment  Greater than 89 Days and Still Accruing
September 30, 2019
Commercial, secured by real estate	$	4,800	$	1,898	$	7,124	$	13,822	$	3,422,449	$	3,436,271	$	—
Commercial, industrial and other	29		197		409		635		389,690		390,325		—
Equipment finance	41		93		271		405		104,284		104,689		—
Real estate - residential mortgage	1,217		166		2,904		4,287		332,798		337,085		—
Real estate - construction	694		—		—		694		302,322		303,016		—
Home equity and consumer	1,682		76		1,771		3,529		338,878		342,407		—
	$	8,463	$	2,430	$	12,479	$	23,372	$	4,890,421	$	4,913,793	$	—
December 31, 2018
Commercial, secured by real estate	$	1,477	$	639	$	2,080	$	4,196	$	3,052,931	$	3,057,127	$	—
Commercial, industrial and other	173		243		750		1,166		335,569		336,735		—
Equipment finance	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	$	5,957	$	12,022	$	4,447,773	$	4,459,795	$	—

Impaired Loans

The Company defines impaired loans as all non-accrual loans with recorded investments of $500,000 or greater. Impaired loans also include all loans that have been modified in troubled debt restructurings, but excludes PCI loans. Impaired loans as of September 30, 2019 and December 31, 2018 are as follows:

(in thousands)	Recorded Investment in Impaired  Loans		Contractual Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired  Loans		Interest Income Recognized
September 30, 2019
Loans without specific allowance:
Commercial, secured by real estate	$	10,886	$	11,457	$	—	$	10,399	$	157
Commercial, industrial and other	628		617		—		1,341		13
Equipment finance	—		—		—		—		—
Real estate - residential mortgage	1,678		1,672		—		75		—
Real estate - construction	—		—		—		—		—
Home equity and consumer	—		—		—		—		—
Loans with specific allowance:
Commercial, secured by real estate	2,934		3,162		201		4,088		128
Commercial, industrial and other	121		121		6		121		5
Equipment finance	25		25		11		25		2
Real estate - residential mortgage	686		855		3		698		15
Real estate - construction	—		—		—		—		—
Home equity and consumer	695		788		5		713		22
Total:
Commercial, secured by real estate	$	13,820	$	14,619	$	201	$	14,487	$	285
Commercial, industrial and other	749		738		6		1,462		18
Equipment finance	25		25		11		25		2
Real estate - residential mortgage	2,364		2,527		3		773		15
Real estate - construction	—		—		—		—		—
Home equity and consumer	695		788		5		713		22
	$	17,653	$	18,697	$	226	$	17,460	$	342

(in thousands)	Recorded Investment in Impaired  Loans		Contractual Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired  Loans		Interest Income Recognized
December 31, 2018
Loans without specific allowance:
Commercial, secured by real estate	$	9,284	$	9,829	$	—	$	7,369	$	188
Commercial, industrial and other	1,151		1,449		—		1,834		19
Equipment finance	301		597		—		376		—
Real estate - residential mortgage	—		—		—		242		4
Real estate - construction	—		—		—		726		—
Home equity and consumer	—		—		—		—		—
Loans with specific allowance:
Commercial, secured by real estate	7,270		7,597		307		7,594		317
Commercial, industrial and other	209		209		7		209		12
Equipment finance	30		30		14		19		—
Real estate - residential mortgage	730		884		4		745		20
Real estate - construction	—		—		—		—		—
Home equity and consumer	727		765		6		898		32
Total:
Commercial, secured by real estate	$	16,554	$	17,426	$	307	$	14,963	$	505
Commercial, industrial and other	1,360		1,658		7		2,043		31
Equipment finance	331		627		14		395		—
Real estate - residential mortgage	730		884		4		987		24
Real estate - construction	—		—		—		726		—
Home equity and consumer	727		765		6		898		32
	$	19,702	$	21,360	$	338	$	20,012	$	592

Interest income recognized on impaired loans was $342,000 and $450,000 for the nine months ended September 30, 2019 and 2018, respectively. Interest that would have been accrued on impaired loans during the first nine months of 2019 and 2018 had the loans been performing under original terms would have been $703,000 and $842,000, respectively.

Credit Quality Indicators

The class of loans is determined by internal risk rating. Management closely and continually monitors the quality of its loans and assesses the quantitative and qualitative risks arising from the credit quality of its loans. Lakeland assigns a credit risk rating 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 commercial loan portfolios. The risk rating system assists senior management in evaluating Lakeland’s commercial 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, guarantor support, industry conditions and economic conditions. Management categorizes commercial 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.

The following table shows the Company’s commercial loan portfolio as of September 30, 2019 and December 31, 2018, by the risk ratings discussed above (in thousands):

September 30, 2019	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Real Estate - Construction
RISK RATING
1	$	—	$	2,655	$	—
2	—		17,865		—
3	71,581		34,392		—
4	910,695		91,329		18,871
5	2,245,570		208,024		273,997
5W - Watch	103,619		24,302		8,487
6 - Other assets especially mentioned	50,155		3,805		967
7 - Substandard	61,353		9,114		4,118
8 - Doubtful	—		—		—
9 - Loss	—		—		—
Total	$	3,442,973	$	391,486	$	306,440

December 31, 2018	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Real Estate - Construction
RISK RATING
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

The risk rating tables above do not include residential mortgage loans, consumer loans, or equipment finance loans because they are evaluated on their payment status.

Allowance for Loan Losses

The following table details activity in the allowance for loan losses by portfolio segment for the three and nine months ended September 30, 2019 and 2018:

(in thousands)	Commercial, Secured by Real Estate			Commercial, Industrial and Other			Equipment Finance		Real Estate- Residential Mortgage			Real Estate- Construction			Home Equity and Consumer			Total
Three Months Ended September 30, 2019
Beginning Balance	$	28,095		$	2,633		$	1,055	$	1,606		$	2,708		$	2,565		$	38,662
Charge-offs	(314		)	(425		)	—		—			—			(70		)	(809		)
Recoveries	72			32			—		55			39			68			266
Provision	672			218			55		(57		)	(186		)	(166		)	536
Ending Balance	$	28,525		$	2,458		$	1,110	$	1,604		$	2,561		$	2,397		$	38,655

(in thousands)	Commercial, Secured by Real Estate			Commercial, Industrial and Other			Equipment Finance			Real Estate- Residential Mortgage			Real Estate- Construction			Home Equity and Consumer			Total
Three Months Ended September 30, 2018
Beginning Balance	$	26,174		$	2,012		$	1,264		$	1,585		$	3,063		$	2,506		$	36,604
Charge-offs	(24		)	(151		)	(368		)	(38		)	—			(172		)	(753		)
Recoveries	135			177			2			2			4			76			396
Provision	1,361			(70		)	(12		)	(62		)	(166		)	(5		)	1,046
Ending Balance	$	27,646		$	1,968		$	886		$	1,487		$	2,901		$	2,405		$	37,293

(in thousands)	Commercial, Secured by Real Estate			Commercial, Industrial and Other			Equipment Finance			Real Estate- Residential Mortgage			Real Estate- Construction			Home Equity and Consumer			Total
Nine Months Ended September 30, 2019
Beginning Balance	$	27,881		$	1,742		$	987		$	1,566		$	3,015		$	2,497		$	37,688
Charge-offs	(501		)	(610		)	(380		)	(50		)	—			(197		)	(1,738		)
Recoveries	212			1,076			2			66			104			201			1,661
Provision	933			250			501			22			(558		)	(104		)	1,044
Ending Balance	$	28,525		$	2,458		$	1,110		$	1,604		$	2,561		$	2,397		$	38,655

(in thousands)	Commercial, Secured by Real Estate			Commercial, Industrial and Other			Equipment Finance			Real Estate- Residential Mortgage			Real Estate- Construction			Home Equity and Consumer			Total
Nine Months Ended September 30, 2018
Beginning Balance	$	25,704		$	2,313		$	630		$	1,557		$	2,731		$	2,520		$	35,455
Charge-offs	(256		)	(1,452		)	(463		)	(131		)	(248		)	(416		)	(2,966		)
Recoveries	440			273			7			7			12			243			982
Provision	1,758			834			712			54			406			58			3,822
Ending Balance	$	27,646		$	1,968		$	886		$	1,487		$	2,901		$	2,405		$	37,293

Loans receivable summarized by portfolio segment and impairment method are as follows:

(in thousands)	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Equipment Finance		Real Estate- Residential Mortgage		Real Estate- Construction		Home Equity and Consumer		Total
September 30, 2019
Ending Balance: Individually evaluated for impairment	$	13,820	$	749	$	25	$	2,364	$	—	$	695	$	17,653
Ending Balance: Collectively evaluated for impairment	3,422,451		389,576		104,664		334,721		303,016		341,712		4,896,140
Ending Balance: Loans acquired with deteriorated credit quality	6,702		1,161		—		397		3,424		521		12,205
Ending Balance (1)	$	3,442,973	$	391,486	$	104,689	$	337,482	$	306,440	$	342,928	$	4,925,998

(in thousands)	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Equipment Finance		Real Estate- Residential Mortgage		Real Estate- Construction		Home Equity and Consumer		Total
December 31, 2018
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

The allowance for loan losses is summarized by portfolio segment and impairment classification as follows:

(in thousands)	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Equipment Finance		Real Estate- Residential Mortgage		Real Estate- Construction		Home Equity and Consumer		Total
September 30, 2019
Ending Balance: Individually evaluated for impairment	$	201	$	6	$	11	$	3	$	—	$	5	$	226
Ending Balance: Collectively evaluated for impairment	28,324		2,452		1,099		1,601		2,561		2,392		38,429
Ending Balance	$	28,525	$	2,458	$	1,110	$	1,604	$	2,561	$	2,397	$	38,655

(in thousands)	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Equipment Finance		Real Estate- Residential Mortgage		Real Estate- Construction		Home Equity and Consumer		Total
December 31, 2018
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

Lakeland also maintains a reserve for unfunded lending commitments which is included in other liabilities. This reserve was $1.8 million and $2.3 million as of September 30, 2019 and December 31, 2018, respectively. The Company analyzes the adequacy of the reserve for unfunded lending commitments quarterly.

Troubled Debt Restructurings

Loans are classified as troubled debt restructured loans 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, a moratorium of principal payments and/or an extension of the maturity date at a stated interest rate lower than the current market rate of a new loan with similar risk. The Company considers the potential losses on these loans as well as the remainder of its impaired loans while considering the adequacy of the allowance for loan losses.

The following table summarizes loans that have been restructured during the three and nine months ended September 30, 2019 and 2018:

	For the Three Months Ended September 30, 2019					For the Three Months Ended September 30, 2018
(dollars in thousands)	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
Commercial, secured by real estate	—	$	—	$	—	1	$	1,175	$	1,175
Home equity and consumer	2	83		83		—	—		—
	2	83		83		1	1,175		1,175

	For the Nine Months Ended September 30, 2019					For the Nine Months Ended September 30, 2018
(dollars in thousands)	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
Commercial, secured by real estate	—	$	—	$	—	4	$	3,002	$	3,002
Commercial, industrial and other	—	—		—		1	950		950
Home equity and consumer	2	$	83	$	83	—	—		—
	2	$	83	$	83	5	$	3,952	$	3,952

The following table summarizes as of September 30, 2019 and 2018, loans that were restructured within the previous twelve months that have subsequently defaulted:

	September 30, 2019			September 30, 2018
(dollars in thousands)	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
Commercial, secured by real estate	—	$	—	1	$	171
Home equity and consumer	2	$	83	—	$	—
	2	$	83	1	$	171

Other Real Estate and Other Repossessed Assets

At September 30, 2019 and December 31, 2018, the Company had other real estate owned of $944,000 and $830,000, respectively. Included in other real estate owned was residential property acquired as a result of foreclosure proceedings totaling $879,000 and $702,000 at September 30, 2019 and December 31, 2018, respectively. There were no balances of other repossessed assets at both September 30, 2019 and December 31, 2018.

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Acquisitions

9 Months Ended

Sep. 30, 2019

Business Combinations [Abstract]

Acquisitions

ACQUISITIONS

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 stock 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.

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.

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. The fair values are preliminary estimates and subject to adjustment for up to one year after the closing date of the acquisition.

As a result of new information obtained during the quarter ended September 30, 2019, about facts and circumstances that existed as of the acquisition date, the Company revised the estimated fair value on two Highlands branches acquired. The adjustment resulted in an increase in goodwill of $447,000.

The following table summarizes the estimated fair value of the acquired assets and liabilities assumed at the date of acquisition for Highlands.

(in thousands)
Cash and cash equivalents	$	13,454
Securities, available for sale	22,734
Federal Home Loan Bank stock	1,767
Loans held for sale	1,113
Loans	425,005
Premises and equipment	2,613
Goodwill	19,844
Identifiable intangible assets	3,728
Accrued interest receivable and other assets	6,244
Total assets acquired	496,502
Deposits	(409,638		)
Other borrowings	(27,800		)
Subordinated debt	(13,157		)
Other liabilities	(2,490		)
Total liabilities assumed	(453,085		)
Net assets acquired	$	43,417

Loans acquired in the Highlands acquisition were recorded at fair value and subsequently accounted for in accordance with ASC Topic 310. There was no carryover related allowance for loan losses. The fair values of loans acquired from Highlands were estimated using cash flow projections based on the remaining maturity and repricing terms. Cash flows were adjusted for estimated future credit losses and the rate of prepayments. Projected cash flows were then discounted to present value using a risk-adjusted market rate for similar loans.

The following is a summary of the credit impaired loans acquired in the Highlands acquisition as of the closing date.

(in thousands)
Contractually required principal and interest at acquisition	$	22,363
Contractual cash flows not expected to be collected (non-accretable difference)	7,129
Expected cash flows at acquisition	$	15,234
Interest component of expected cash flows (accretable difference)	1,431
Fair value of acquired loans	$	13,803

The core deposit intangible totaled $3.7 million and is being amortized over its estimated useful life of approximately ten years using an accelerated method. The goodwill will be evaluated annually for impairment. The goodwill is not deductible for tax purposes.

The fair values of deposit liabilities with no stated maturities such as checking, money market and savings accounts, were assumed to equal the carrying amounts since these deposits are payable on demand. The fair values of certificates of deposits and IRAs represent the present value of contractual cash flows discounted at market rates for similar certificates of deposit.

Direct costs related to the acquisition were expensed as incurred. During the three and nine months ended September 30, 2019, the Company incurred $0 and $3.2 million of merger and acquisition integration-related expenses, respectively, which have been separately stated in the Company's Consolidated Statements of Income.

Supplemental Pro Forma Financial Information

The following table provides unaudited condensed pro forma financial information assuming that the Highlands acquisition had been completed as of January 1, 2019, for the nine months ended September 30, 2019 and as of January 1, 2018 for the nine months ended September 30, 2018. The table below has been prepared for comparative purposes only and is not necessarily indicative of the actual results that would have been attained had the acquisitions occurred as of the beginning of the periods presented, nor is it indicative of future results. Furthermore, the unaudited pro forma information does not reflect management’s estimate of any revenue-enhancing opportunities nor anticipated cost savings or the impact of conforming certain accounting policies of the acquired companies to the Company’s policies that may have occurred as a result of the integration and consolidation of Highlands' operations. The pro forma information shown reflects adjustments related to certain purchase accounting fair value adjustments; amortization of core deposit and other intangibles; and related income tax effects. The Company has not provided separate information regarding revenue and earnings of Highlands since the acquisition because of the manner in which Highlands' branches and lending team were immediately merged into Lakeland’s branches and lending team making such information impracticable to provide.

	Pro Forma Nine Months Ended
(in thousands)	September 30, 2019		September 30, 2018
Net interest income	$	146,633	$	143,250
Provision for loan losses	1,044		4,219
Noninterest income	18,783		19,029
Noninterest expense	92,136		92,344
Net income	54,373		52,244
Earnings per share:
Fully diluted	$	1.07	$	1.03

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Borrowings

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Borrowings

BORROWINGS

At September 30, 2019, the Company had federal funds purchased and securities sold under agreements to repurchase of $155.0 million and $44.3 million, respectively, compared to $192.1 million and $41.8 million, respectively, at December 31, 2018. The securities sold under agreements to repurchase are overnight sweep arrangement accounts with our customers. As of September 30, 2019, the Company had $49.2 million in mortgage backed securities pledged for its securities sold under agreements to repurchase.

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 Lakeland to pledge additional collateral to meet that margin call.

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Label	Element	Value
Common Stock [Member]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance	us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1	$ 512,734,000
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance	us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1	514,703,000
Retained Earnings [Member]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance	us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1	74,780,000
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance	us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1	$ 116,999,000

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Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2019

Equity [Abstract]

Components of Other Comprehensive Income (Loss)

The components of other comprehensive income (loss) are as follows:

	For the Three Months Ended
	September 30, 2019									September 30, 2018
(in thousands)	Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount			Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount
Net unrealized gains (losses) on available for sale securities:
Net unrealized holding gains (losses) arising during period	$	1,911		$	(431	)	$	1,480		$	(2,816	)	$	797		$	(2,019	)
Reclassification adjustment for net gains arising during the period	—			—			—			—			—			—
Net unrealized gains (losses)	1,911			(431		)	1,480			(2,816		)	797			(2,019		)
Unrealized (losses) gains on derivatives	(111		)	33			(78		)	9			(3		)	6
Other comprehensive income (loss), net	$	1,800		$	(398	)	$	1,402		$	(2,807	)	$	794		$	(2,013	)

	For the Nine Months Ended
	September 30, 2019									September 30, 2018
(in thousands)	Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount			Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount
Net unrealized gains (losses) on available for sale securities:
Net unrealized holding gains (losses) arising during period	$	15,872		$	(4,253	)	$	11,619		$	(12,521	)	$	3,080		$	(9,441	)
Reclassification adjustment for net gains arising during the period	—			—			—			—			—			—
Net unrealized gains (losses)	15,872			(4,253		)	11,619			(12,521		)	3,080			(9,441		)
Unrealized (losses) gains on derivatives	(807		)	236			(571		)	434			(92		)	342
Other comprehensive income (loss), net	$	15,065		$	(4,017	)	$	11,048		$	(12,087	)	$	2,988		$	(9,099	)

Summary of Changes in Components of Other Comprehensive Income, Net of Tax

The following tables show the changes in the balances of each of the components of other comprehensive income for the periods presented, net of tax:

	For the Three Months Ended September 30, 2019									For the Three Months Ended September 30, 2018
(in thousands)	Unrealized Gains (Losses) on Available for  Sale Securities		Unrealized Gains on Derivatives			Pension Items		Total		Unrealized Losses on Available for Sale Securities			Unrealized Gains  on Derivatives		Pension Items		Total
Beginning balance	$	1,357	$	410		$	41	$	1,808	$	(12,697	)	$	1,198	$	21	$	(11,478	)
Other comprehensive income (loss) before classifications	1,480		(78		)	—		1,402		(2,019		)	6		—		(2,013		)
Amounts reclassified from accumulated other comprehensive income	—		—			—		—		—			—		—		—
Net current period other comprehensive income (loss)	1,480		(78		)	—		1,402		(2,019		)	6		—		(2,013		)
Ending balance	$	2,837	$	332		$	41	$	3,210	$	(14,716	)	$	1,204	$	21	$	(13,491	)

	For the Nine Months Ended September 30, 2019											For the Nine Months Ended September 30, 2018
(in thousands)	Unrealized Gains (Losses) on Available for  Sale Securities			Unrealized Gains on Derivatives			Pension Items		Total			Unrealized Losses on Available for  Sale Securities			Unrealized Gains  on Derivatives		Pension Items		Total
Beginning balance	$	(8,782	)	$	903		$	41	$	(7,838	)	$	(3,232	)	$	862	$	21	$	(2,349	)
Adjustment for implementation of ASU 2016-01	—			—			—		—			(2,043		)	—		—		(2,043		)
Adjusted beginning balance	(8,782		)	903			41		(7,838		)	(5,275		)	862		21		(4,392		)
Other comprehensive income (loss) before classifications	11,619			(571		)	—		11,048			(9,441		)	342		—		(9,099		)
Amounts reclassified from accumulated other comprehensive income	—			—			—		—			—			—		—		—
Net current period other comprehensive income (loss)	11,619			(571		)	—		11,048			(9,441		)	342		—		(9,099		)
Ending balance	$	2,837		$	332		$	41	$	3,210		$	(14,716	)	$	1,204	$	21	$	(13,491	)

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Acquisitions - Summary of the Loans Acquired (Details) - Financial Asset Acquired with Credit Deterioration - Highlands Bancorp, Inc. $ in Thousands	Jan. 04, 2019 USD ($)
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items]
Contractually required principal and interest at acquisition	$ 22,363
Contractual cash flows not expected to be collected (non-accretable difference)	7,129
Expected cash flows at acquisition	15,234
Interest component of expected cash flows (accretable difference)	1,431
Fair value of acquired loans	$ 13,803

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

Computation of Earnings Per Share

The following schedule shows the Company’s earnings per share calculations for the periods presented:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(in thousands, except per share data)	2019		2018		2019		2018
Net income available to common shareholders	$	18,874	$	16,758	$	51,957	$	47,851
Less: earnings allocated to participating securities	156		153		443		440
Net income allocated to common shareholders	$	18,718	$	16,605	$	51,514	$	47,411
Weighted average number of common shares outstanding - basic	50,553		47,605		50,447		47,570
Share-based plans	141		183		148		194
Weighted average number of common shares outstanding - diluted	50,694		47,788		50,595		47,764
Basic earnings per share	$	0.37	$	0.35	$	1.02	$	1.00
Diluted earnings per share	$	0.37	$	0.35	$	1.02	$	0.99

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Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2019

Accounting Changes and Error Corrections [Abstract]

Recent Accounting Pronouncements

RECENT ACCOUNTING PRONOUNCEMENTS

In August 2018, the Financial Accounting Standards Board ("FASB") issued Update 2018-13, an update to Topic 820, Fair Value Measurement, to improve the effectiveness of fair value measurement disclosures. Among other provisions, the update removes requirements to disclose amounts of and reasons for 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 not expected to have a material impact on the Company's financial statements.

In August 2018, the FASB issued Update 2018-15, an update to Subtopic 350-40, Intangibles - Goodwill and Other - Internal-Use Software, 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 Update 2018-14, an update to Subtopic 715-20, Compensation - Retirement Benefits - Defined Benefit Plans - General, 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 plans that require calculation of projected benefit obligations or accumulated benefit obligations, the update will not have a material impact on the Company's financial statements.

In June 2018, the FASB issued Update 2018-07, an update to Topic 718, Compensation - Stock Compensation, 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 was permitted. The adoption of this update did not have a significant impact on the Company's financial statements.

In August 2017, the FASB issued Update 2017-05, an update to Subtopic 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets, 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. This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2019. The Company is still evaluating the impact that this guidance will have on its financial statements.

In July 2017, the FASB issued Update 2017-11, 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 adoption of this update did not have a material impact on the Company’s financial statements because the Company does not have any equity-linked financial instruments that have such down round features.

In March 2017, the FASB issued Update 2017-08, an update to Subtopic 310-20, Receivables - Nonrefundable Fees and Other Costs, 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 did not have a material impact on the Company’s financial statements.

In January 2017, the FASB issued Update 2017-04, an update to Topic 350, Intangibles - Goodwill and Other, 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 not expected to have a material impact on the Company’s financial statements.

In June 2016, the FASB issued Update 2016-13, Topic 326, Financial Instruments - Credit Losses, 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. In order to prepare for implementation of Update 2016-13, the Company formed a cross-functional 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. Our implementation process included choosing a software and advisory service provider to aid in implementation. Part of the implementation process included making specific Topic 326 policy elections.

Our planned approach for estimated expected lifetime credit losses include the following key components for all loan portfolio segments: a) the calculation of a baseline lifetime loss by applying a segment-specific historical average annual loss rate, calculated using an open pool method, applied over the remaining life of each instrument; b) a single set of economic forecast inputs for the reasonable and supportable period; c) an initial reasonable and supportable forecast period, which reflects management's expectations of losses based on forward-looking economic scenarios over that time; d) baseline lifetime loss rates adjusted for changes in macroeconomic conditions over the reasonable and supportable forecast period via a series of adjustment factors developed using a third-party developed and supported top-down statistical model suite that uses a set of relevant economic forecast inputs sourced from a leading global forecasting firm; e) a reversion period (after the reasonable and supportable forecast period) using a straight-line approach; f) a historical loss period which represents a full economic credit cycle (with the exception of equipment finance loans which will use a shorter time period due to circumstances unique to that segment); and g) expected

prepayment rates estimated on more recent historical experience adjusted for refinance incentive, seasoning and burnout, as applicable.

Based on the above parameters, the software provider has completed configuration of the software platform, user access testing has been completed and the system has been moved to a production environment. The Company has completed preparation and validation of historical data for the software, consistent with the Company's selected methodology. Third-party macroeconomic models have been updated and integrated with the software platform. Metrics are being developed for the determination of reasonable and supportable forecast and reversion periods and prepayment speed estimates. The Company and software provider are beginning scenario analysis and sensitivity testing and expect to continue reviewing and fine tuning assumptions in the model based on results. The Company is still developing qualitative adjustments. The Company has engaged a third-party firm to conduct a review and validation of its methodology and models, which is in process. The Company is also developing its future process and governance structure to ensure Lakeland is prepared for adoption of the standard as of January 1, 2020. The adoption of this standard could have a material impact on the Company’s financial statements depending on the characteristics of the loan portfolio, as well as the current and forecasted economic conditions as of the date of adoption. The Company is currently in the process of evaluating the effects of the standard on its estimated credit losses. Adoption of the standard may materially increase volatility of the allowance for credit loss estimates and provisions in the future based on changes in economic conditions.

In February 2016, FASB issued Update 2016-02, Topic 842, Leases, 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. The Company retained the services of a software provider to aid in its implementation. 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 Accounting Standards Codification ("ASC") 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 ASC 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. Management used the optional transition method discussed above and also used the practical expedient to account for non-lease components with the associated lease component as a single component assuming the appropriate conditions are met. The FASB issued further clarification of the standard and addressed implementation and disclosure requirements. With the adoption of this update, the Company recorded an operating lease right-of-use asset of $18.7 million, a corresponding liability of $20.2 million and a cumulative adjustment to retained earnings of $125,000.

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Investment Securities - Reconciliation of Available-for-Sale Securities (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 715,656	$ 649,741
Gross Unrealized Gains	6,694	1,078
Gross Unrealized Losses	(1,945)	(12,201)
Investment securities available for sale, at fair value	720,405	638,618
U.S. Treasury and U.S. government agencies
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	145,976	143,495
Gross Unrealized Gains	846	0
Gross Unrealized Losses	(492)	(2,568)
Investment securities available for sale, at fair value	146,330	140,927
Mortgage-backed securities, residential
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	471,178	434,208
Gross Unrealized Gains	4,171	779
Gross Unrealized Losses	(1,341)	(8,843)
Investment securities available for sale, at fair value	474,008	426,144
Mortgage-backed securities, multifamily
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	50,164	21,087
Gross Unrealized Gains	818	67
Gross Unrealized Losses	(92)	(204)
Investment securities available for sale, at fair value	50,890	20,950
Obligations of states and political subdivisions
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	43,338	45,951
Gross Unrealized Gains	726	140
Gross Unrealized Losses	(20)	(586)
Investment securities available for sale, at fair value	44,044	45,505
Debt securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	5,000	5,000
Gross Unrealized Gains	133	92
Gross Unrealized Losses	0	0
Investment securities available for sale, at fair value	$ 5,133	$ 5,092

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Investment Securities - Additional Information (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Jan. 01, 2019	Dec. 31, 2018	Jan. 01, 2018
Investment [Line Items]
Proceeds from sales of available for sale securities			$ 0	$ 0
Other than temporary impairments		$ 0
Securities, carrying value	$ 576,200,000		576,200,000			$ 476,300,000
Equity securities, at fair value	15,552,000		15,552,000			$ 15,921,000
Cumulative adjustment for adoption of ASU 2016-01					$ 125,000
Proceeds from sales of equity securities			1,153,000	2,155,000
Loss on equity securities	(72,000)	$ 439,000	(525,000)	$ 384,000
Investment in community development loans	3,500,000		$ 3,500,000
Redemption of funds			60 days
Unfunded commitments	0		$ 0
Investment in government guaranteed loans, mortgage-backed securities, small business loans	10,200,000		10,200,000
Other financial institutions
Investment [Line Items]
Equity securities, at fair value	1,800,000		1,800,000
Community reinvestment funds
Investment [Line Items]
Equity securities, at fair value	$ 13,700,000		$ 13,700,000
Retained Earnings
Investment [Line Items]
Cumulative adjustment for adoption of ASU 2016-01					$ 125,000		$ 2,043,000

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Leases - Maturity analysis of operating lease liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Jan. 01, 2019
Leases [Abstract]
Within one year	$ 3,186
After one year but within two years	2,923
After two year but within three years	2,533
After three year but within four years	2,124
After four year but within five years	2,066
After 5 years	11,028
Total undiscounted cash flows	23,860
Discount on cash flows	(4,351)
Operating lease liabilities	$ 19,509	$ 20,203

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Loans and Other Real Estate - Summary of Restructured Loans within Previous 12 Months that have Subsequently Defaulted (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($) Contract	Sep. 30, 2018 USD ($) Contract
Financing Receivable, Modifications [Line Items]
Number of Contracts | Contract	2	1
Financing receivable, modifications, subsequent default, recorded investment | $	$ 83	$ 171
Commercial, secured by real estate
Financing Receivable, Modifications [Line Items]
Number of Contracts | Contract		1
Financing receivable, modifications, subsequent default, recorded investment | $	$ 0	$ 171

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Goodwill and Intangible Assets - Schedule of Estimated Future Amortization Expense (Detail) $ in Thousands	Sep. 30, 2019 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2019	$ 289
2020	1,025
2021	868
2022	711
2023	554
2024	$ 425

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Investment Securities (Tables)

9 Months Ended

Sep. 30, 2019

Investments, Debt and Equity Securities [Abstract]

Reconciliation of Available-for-Sale Securities

	September 30, 2019									December 31, 2018
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
AVAILABLE FOR SALE
U.S. Treasury and U.S. government agencies	$	145,976	$	846	$	(492	)	$	146,330	$	143,495	$	—	$	(2,568	)	$	140,927
Mortgage-backed securities, residential	471,178		4,171		(1,341		)	474,008		434,208		779		(8,843		)	426,144
Mortgage-backed securities, multifamily	50,164		818		(92		)	50,890		21,087		67		(204		)	20,950
Obligations of states and political subdivisions	43,338		726		(20		)	44,044		45,951		140		(586		)	45,505
Debt securities	5,000		133		—			5,133		5,000		92		—			5,092
	$	715,656	$	6,694	$	(1,945	)	$	720,405	$	649,741	$	1,078	$	(12,201	)	$	638,618

Reconciliation of Held-to-Maturity Securities

	September 30, 2019									December 31, 2018
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
HELD TO MATURITY
U.S. government agencies	$	31,974	$	234	$	(18	)	$	32,190	$	33,025	$	—	$	(677	)	$	32,348
Mortgage-backed securities, residential	81,503		823		(148		)	82,178		75,859		169		(1,838		)	74,190
Mortgage-backed securities, multifamily	1,775		15		(5		)	1,785		1,853		—		(35		)	1,818
Obligations of states and political subdivisions	29,363		468		(30		)	29,801		37,909		113		(328		)	37,694
Debt securities	6,500		41		—			6,541		5,000		—		(118		)	4,882
	$	151,115	$	1,581	$	(201	)	$	152,495	$	153,646	$	282	$	(2,996	)	$	150,932

Summary of Investment Securities by Stated Maturity

The following table lists contractual maturities of investment securities classified as available for sale and held to maturity as of September 30, 2019. 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.

	Available for Sale				Held to Maturity
(in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	29,607	$	29,610	$	7,751	$	7,751
Due after one year through five years	103,697		104,533		34,577		34,959
Due after five years through ten years	43,357		44,014		24,746		25,057
Due after ten years	17,653		17,350		763		765
	194,314		195,507		67,837		68,532
Mortgage-backed securities	521,342		524,898		83,278		83,963
Total securities	$	715,656	$	720,405	$	151,115	$	152,495

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 for the periods presented:

	Less Than 12 Months				12 Months or Longer				Total
(dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses
September 30, 2019
AVAILABLE FOR SALE
U.S. Treasury and U.S. government agencies	$	5,180	$	31	$	56,134	$	461	12	$	61,314	$	492
Mortgage-backed securities, residential	84,842		284		106,968		1,057		73	191,810		1,341
Mortgage-backed securities, multifamily	8,236		80		4,916		12		3	13,152		92
Obligations of states and political subdivisions	2,850		3		3,172		17		11	6,022		20
	$	101,108	$	398	$	171,190	$	1,547	99	$	272,298	$	1,945
HELD TO MATURITY
U.S. government agencies	$	3,799	$	6	$	5,129	$	12	2	$	8,928	$	18
Mortgage-backed securities, residential	3,984		6		13,516		142		14	17,500		148
Mortgage-backed securities, multifamily	—		—		1,007		5		1	1,007		5
Obligations of states and political subdivisions	—		—		5,170		30		1	5,170		30
	$	7,783	$	12	$	24,822	$	189	18	$	32,605	$	201

	Less Than 12 Months				12 Months or Longer				Total
(dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses
December 31, 2018
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

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Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

This quarterly report presents the consolidated financial statements of Lakeland Bancorp, Inc. and its subsidiaries, including Lakeland Bank (“Lakeland”) and Lakeland’s wholly owned subsidiaries (collectively, the “Company”). The accounting and reporting policies of the Company conform with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and predominant practices within the banking industry. The Company’s unaudited interim financial statements reflect all adjustments, such as normal recurring accruals that are, in the opinion of management, necessary for the fair presentation of the results of the interim periods. The results of operations for the nine months ended September 30, 2019 do not necessarily indicate the results that the Company will achieve for all of 2019.

Certain information and footnote disclosures required under U.S. GAAP have been condensed or omitted, as permitted by rules and regulations of the Securities and Exchange Commission. These unaudited interim financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes that are presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. Certain reclassifications have been made in the consolidated financial statements to conform with current year classifications.

Recent Accounting Pronouncements

In August 2018, the Financial Accounting Standards Board ("FASB") issued Update 2018-13, an update to Topic 820, Fair Value Measurement, to improve the effectiveness of fair value measurement disclosures. Among other provisions, the update removes requirements to disclose amounts of and reasons for 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 not expected to have a material impact on the Company's financial statements.

In August 2018, the FASB issued Update 2018-15, an update to Subtopic 350-40, Intangibles - Goodwill and Other - Internal-Use Software, 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 Update 2018-14, an update to Subtopic 715-20, Compensation - Retirement Benefits - Defined Benefit Plans - General, 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 plans that require calculation of projected benefit obligations or accumulated benefit obligations, the update will not have a material impact on the Company's financial statements.

In June 2018, the FASB issued Update 2018-07, an update to Topic 718, Compensation - Stock Compensation, 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 was permitted. The adoption of this update did not have a significant impact on the Company's financial statements.

In August 2017, the FASB issued Update 2017-05, an update to Subtopic 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets, 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. This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2019. The Company is still evaluating the impact that this guidance will have on its financial statements.

In July 2017, the FASB issued Update 2017-11, 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 adoption of this update did not have a material impact on the Company’s financial statements because the Company does not have any equity-linked financial instruments that have such down round features.

In March 2017, the FASB issued Update 2017-08, an update to Subtopic 310-20, Receivables - Nonrefundable Fees and Other Costs, 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 did not have a material impact on the Company’s financial statements.

In January 2017, the FASB issued Update 2017-04, an update to Topic 350, Intangibles - Goodwill and Other, 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 not expected to have a material impact on the Company’s financial statements.

In June 2016, the FASB issued Update 2016-13, Topic 326, Financial Instruments - Credit Losses, 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. In order to prepare for implementation of Update 2016-13, the Company formed a cross-functional 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. Our implementation process included choosing a software and advisory service provider to aid in implementation. Part of the implementation process included making specific Topic 326 policy elections.

Our planned approach for estimated expected lifetime credit losses include the following key components for all loan portfolio segments: a) the calculation of a baseline lifetime loss by applying a segment-specific historical average annual loss rate, calculated using an open pool method, applied over the remaining life of each instrument; b) a single set of economic forecast inputs for the reasonable and supportable period; c) an initial reasonable and supportable forecast period, which reflects management's expectations of losses based on forward-looking economic scenarios over that time; d) baseline lifetime loss rates adjusted for changes in macroeconomic conditions over the reasonable and supportable forecast period via a series of adjustment factors developed using a third-party developed and supported top-down statistical model suite that uses a set of relevant economic forecast inputs sourced from a leading global forecasting firm; e) a reversion period (after the reasonable and supportable forecast period) using a straight-line approach; f) a historical loss period which represents a full economic credit cycle (with the exception of equipment finance loans which will use a shorter time period due to circumstances unique to that segment); and g) expected

prepayment rates estimated on more recent historical experience adjusted for refinance incentive, seasoning and burnout, as applicable.

Based on the above parameters, the software provider has completed configuration of the software platform, user access testing has been completed and the system has been moved to a production environment. The Company has completed preparation and validation of historical data for the software, consistent with the Company's selected methodology. Third-party macroeconomic models have been updated and integrated with the software platform. Metrics are being developed for the determination of reasonable and supportable forecast and reversion periods and prepayment speed estimates. The Company and software provider are beginning scenario analysis and sensitivity testing and expect to continue reviewing and fine tuning assumptions in the model based on results. The Company is still developing qualitative adjustments. The Company has engaged a third-party firm to conduct a review and validation of its methodology and models, which is in process. The Company is also developing its future process and governance structure to ensure Lakeland is prepared for adoption of the standard as of January 1, 2020. The adoption of this standard could have a material impact on the Company’s financial statements depending on the characteristics of the loan portfolio, as well as the current and forecasted economic conditions as of the date of adoption. The Company is currently in the process of evaluating the effects of the standard on its estimated credit losses. Adoption of the standard may materially increase volatility of the allowance for credit loss estimates and provisions in the future based on changes in economic conditions.

In February 2016, FASB issued Update 2016-02, Topic 842, Leases, 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. The Company retained the services of a software provider to aid in its implementation. 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 Accounting Standards Codification ("ASC") 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 ASC 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. Management used the optional transition method discussed above and also used the practical expedient to account for non-lease components with the associated lease component as a single component assuming the appropriate conditions are met. The FASB issued further clarification of the standard and addressed implementation and disclosure requirements. With the adoption of this update, the Company recorded an operating lease right-of-use asset of $18.7 million, a corresponding liability of $20.2 million and a cumulative adjustment to retained earnings of $125,000.

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Earnings Per Share - Additional Information (Detail) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options to purchase (in shares)	0	0	0	0

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Investment Securities - Sales of Securities and Gross Gains and Losses on Sales of Securities (Detail) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Investments, Debt and Equity Securities [Abstract]
Sale proceeds	$ 0	$ 0
Gross gains	0	0
Gross losses	$ 0	$ 0

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Borrowings - Additional Information (Detail) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Federal funds purchased	$ 155.0	$ 192.1
Securities sold under agreements to repurchase	44.3	$ 41.8
Securities Sold under Agreements to Repurchase
Debt Instrument [Line Items]
Pledged securities	$ 49.2

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Derivatives - Additional Information (Detail)	9 Months Ended		12 Months Ended
	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2020 USD ($)	Dec. 31, 2018 USD ($)	Jun. 30, 2016 USD ($) Derivative
Scenario, Forecast [Member] | Reclassification Out of Accumulated Other Comprehensive Income
Derivative [Line Items]
Estimated decrease in interest expense			$ 287,000
Interest Rate Swaps
Derivative [Line Items]
Available for sale securities pledged for collateral	$ 45,500,000			$ 498,000
Interest Rate Swaps | Cash Flow Hedging
Derivative [Line Items]
Number of derivatives | Derivative					2
Notional amount					$ 30,000,000.0
Average interest rate					1.10%
Variable rate basis	3 month LIBOR
Amount of ineffective hedges	$ 0
Interest Rate Swaps | Cash Flow Hedging | Interest Expense
Derivative [Line Items]
Accumulated other comprehensive income (loss) reclassified	$ 334,000	$ 227,000

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Leases (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Jan. 01, 2019
Lessee, Lease, Description [Line Items]
Operating lease liabilities	$ 19,509,000		$ 19,509,000		$ 20,203,000
Operating lease right-of-use assets	$ 17,953,000		$ 17,953,000		18,651,000
Operating lease, weighted average remaining lease term	10 years 8 months 8 days		10 years 8 months 8 days
Lessee, operating lease, discount rate	3.51%		3.51%
Operating lease, lease not yet commenced	$ 0		$ 0
Accounting Standards Update 2016-02
Lessee, Lease, Description [Line Items]
Operating lease liabilities					20,200,000
Operating lease right-of-use assets					$ 18,700,000
Rent expense		$ 731,000		$ 2,200,000
Related Parties Lease Transaction
Lessee, Lease, Description [Line Items]
Sale leaseback transaction	$ 0		$ 0

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Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
ASSETS
Cash	$ 249,553	$ 205,199
Interest-bearing deposits due from banks	32,405	3,400
Total cash and cash equivalents	281,958	208,599
Investment securities available for sale, at fair value	720,405	638,618
Equity securities, at fair value	15,552	15,921
Investment securities held to maturity; fair value of $152,495 at September 30, 2019 and $150,932 at December 31, 2018	151,115	153,646
Federal Home Loan Bank and other membership bank stock, at cost	18,006	13,301
Loans held for sale	3,077	1,113
Loans, net of deferred fees	4,923,414	4,456,733
Allowance for loan losses	(38,655)	(37,688)
Net loans	4,884,759	4,419,045
Premises and equipment, net	47,372	49,175
Operating lease right-of-use assets	17,953
Accrued interest receivable	16,573	16,114
Goodwill	156,277	136,433
Other identifiable intangible assets	4,602	1,768
Bank owned life insurance	111,717	110,052
Other assets	63,108	42,308
TOTAL ASSETS	6,492,474	5,806,093
Deposits:
Noninterest-bearing	1,101,083	950,218
Savings and interest-bearing transaction accounts	3,196,323	2,913,414
Time deposits $250 thousand and under	682,677	589,737
Time deposits over $250 thousand	230,536	167,301
Total deposits	5,210,619	4,620,670
Federal funds purchased and securities sold under agreements to repurchase	199,326	233,905
Other borrowings	165,818	181,118
Subordinated debentures	118,211	105,027
Operating lease liabilities	19,509
Other liabilities	65,787	41,634
TOTAL LIABILITIES	5,779,270	5,182,354
STOCKHOLDERS’ EQUITY
Common stock, no par value; authorized shares, 100,000,000; issued shares, 50,489,161 at September 30, 2019 and 47,486,250 at December 31, 2018	559,595	514,703
Retained earnings	150,399	116,874
Accumulated other comprehensive income (loss)	3,210	(7,838)
TOTAL STOCKHOLDERS’ EQUITY	713,204	623,739
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 6,492,474	$ 5,806,093

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Loans and Other Real Estate - Activity in the Allowance for Loan and Lease Losses by Portfolio Segment (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	$ 38,662	$ 36,604	$ 37,688	$ 35,455
Charge-offs	(809)	(753)	(1,738)	(2,966)
Recoveries	266	396	1,661	982
Provision	536	1,046	1,044	3,822
Ending Balance	38,655	37,293	38,655	37,293
Commercial, secured by real estate
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	28,095	26,174	27,881	25,704
Charge-offs	(314)	(24)	(501)	(256)
Recoveries	72	135	212	440
Provision	672	1,361	933	1,758
Ending Balance	28,525	27,646	28,525	27,646
Commercial, industrial and other
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	2,633	2,012	1,742	2,313
Charge-offs	(425)	(151)	(610)	(1,452)
Recoveries	32	177	1,076	273
Provision	218	(70)	250	834
Ending Balance	2,458	1,968	2,458	1,968
Equipment finance
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	1,055	1,264	987	630
Charge-offs	0	(368)	(380)	(463)
Recoveries	0	2	2	7
Provision	55	(12)	501	712
Ending Balance	1,110	886	1,110	886
Real estate - residential mortgage
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	1,606	1,585	1,566	1,557
Charge-offs	0	(38)	(50)	(131)
Recoveries	55	2	66	7
Provision	(57)	(62)	22	54
Ending Balance	1,604	1,487	1,604	1,487
Real estate - construction
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	2,708	3,063	3,015	2,731
Charge-offs	0	0	0	(248)
Recoveries	39	4	104	12
Provision	(186)	(166)	(558)	406
Ending Balance	2,561	2,901	2,561	2,901
Home equity and consumer
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	2,565	2,506	2,497	2,520
Charge-offs	(70)	(172)	(197)	(416)
Recoveries	68	76	201	243
Provision	(166)	(5)	(104)	58
Ending Balance	$ 2,397	$ 2,405	$ 2,397	$ 2,405

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Loans and Other Real Estate - Company's Non-Performing Assets and Its Accruing Troubled Debt Restructurings (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total non-accrual loans	$ 15,917	$ 12,130
Other real estate and other repossessed assets	944	830
TOTAL NON-PERFORMING ASSETS	16,861	12,960
Troubled debt restructurings, still accruing	5,029	9,293
Commercial, secured by real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total non-accrual loans	9,164	7,192
Commercial, industrial and other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total non-accrual loans	795	1,019
Equipment finance
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total non-accrual loans	271	501
Real estate - residential mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total non-accrual loans	3,250	1,986
Home equity and consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total non-accrual loans	$ 2,437	$ 1,432

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Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative adjustment for adoption of ASU 2016-01				$ (2,043)
January 1, 2018, as adjusted				(4,392)
Balance at beginning of period at Dec. 31, 2017	$ 583,122	$ 512,734	$ 72,737	(2,349)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	47,851		47,851
Other comprehensive loss, net of tax	(9,099)			(9,099)
Stock based compensation	1,930	1,930
Exercise of stock options	307	307
Retirement of restricted stock	(759)	(759)
Cash dividends on common stock of $0.33 per share	(15,797)		(15,797)
Balance at end of period at Sep. 30, 2018	607,555	514,212	106,834	(13,491)
Balance at beginning of period at Jun. 30, 2018	597,864	513,756	95,586	(11,478)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	16,758		16,758
Other comprehensive loss, net of tax	(2,013)			(2,013)
Stock based compensation	471	471
Retirement of restricted stock	(15)	(15)
Cash dividends on common stock of $0.33 per share	(5,510)		(5,510)
Balance at end of period at Sep. 30, 2018	607,555	514,212	106,834	(13,491)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative adjustment for adoption of ASU 2016-01				0
January 1, 2018, as adjusted				(7,838)
Balance at beginning of period at Dec. 31, 2018	623,739	514,703	116,874	(7,838)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	51,957		51,957
Other comprehensive loss, net of tax	11,048			11,048
Stock based compensation	1,822	1,822
Exercise of stock options	307	307
Retirement of restricted stock	(654)	(654)
Cash dividends on common stock of $0.33 per share	(18,557)		(18,557)
Issuance of stock for Highlands acquisition	43,417	43,417
Balance at end of period at Sep. 30, 2019	713,204	559,595	150,399	3,210
Balance at beginning of period at Jun. 30, 2019	698,463	558,768	137,887	1,808
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	18,874		18,874
Other comprehensive loss, net of tax	1,402			1,402
Stock based compensation	558	558
Exercise of stock options	307	307
Retirement of restricted stock	(38)	(38)
Cash dividends on common stock of $0.33 per share	(6,362)		(6,362)
Balance at end of period at Sep. 30, 2019	$ 713,204	$ 559,595	$ 150,399	$ 3,210

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Share-Based Compensation - Additional Information (Detail) - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 1,822,000	$ 1,930,000
Granted, Number of shares (in shares)	0	0
Stock options exercised (in shares)	34,727
Aggregate intrinsic value of stock options exercised	$ 255,000	$ 406,000
Cash receipts due to exercise of stock options	$ 307,000	307,000
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in usd per share)	$ 15.96
Granted (in shares)	13,052
Restricted Stock | 2018 Omnibus Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 160,000
Unrecognized compensation cost	$ 52,000
Unrecognized compensation expense, period of recognition	3 months 18 days
Restricted Stock | 2018 Omnibus Equity Incentive Plan | Non-Employee Directors
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted (in shares)	13,052
Granted (in usd per share)	$ 15.96
Share-based compensation expense	$ 208,000
Vesting period	1 year
Restricted Stock | 2009 Equity Compensation Program
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense		$ 174,000
Restricted Stock | 2009 Equity Compensation Program | Non-Employee Directors
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted (in shares)		10,945
Granted (in usd per share)		$ 20.55
Share-based compensation expense		$ 225,000
Vesting period		1 year
RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in usd per share)	$ 16.62
Granted (in shares)	141,059
RSUs | 2018 Omnibus Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 1,700,000
Granted (in usd per share)	$ 16.62
Share-based compensation expense	$ 781,000
Vesting period	3 years
Granted (in shares)	141,059	1,500
RSUs | 2018 Omnibus Equity Incentive Plan | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	2 years
RSUs | 2018 Omnibus Equity Incentive Plan | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
RSUs | 2009 Equity Compensation Program
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense		$ 1,800,000
Vesting period		3 years
Granted (in shares)		151,733
RSUs | 2009 Equity Compensation Program and 2018 Omnibus Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost	$ 3,000,000.0
Unrecognized compensation expense, period of recognition	1 year 5 months 19 days
Granted (in usd per share)		$ 19.14
Share-based compensation expense		$ 978,000
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options exercised (in shares)	34,727	34,728
Stock Options | 2009 Equity Compensation Program
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost	$ 0

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Comprehensive Income - Summary of Changes in Components of Other Comprehensive Income, Net of Tax (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Jan. 01, 2019	Dec. 31, 2018	Jan. 01, 2018	Dec. 31, 2017
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Balance at beginning of period	$ 698,463	$ 597,864	$ 623,739	$ 583,122
Cumulative adjustment for adoption of ASU 2016-01					$ 125
Adjusted equity balance					623,864		$ 583,122
Other comprehensive income (loss) before classifications	1,402	(2,013)	11,048	(9,099)
Amounts reclassified from accumulated other comprehensive income	0	0	0	0
Net current period other comprehensive income (loss)	1,402	(2,013)	11,048	(9,099)
Balance at end of period	713,204	607,555	713,204	607,555
Unrealized Gains (Losses) on Available for Sale Securities
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Balance at beginning of period	1,357	(12,697)	(8,782)	(3,232)
Cumulative adjustment for adoption of ASU 2016-01						$ 0		$ (2,043)
Adjusted equity balance						(8,782)		(5,275)
Other comprehensive income (loss) before classifications	1,480	(2,019)	11,619	(9,441)
Amounts reclassified from accumulated other comprehensive income	0	0	0	0
Net current period other comprehensive income (loss)	1,480	(2,019)	11,619	(9,441)
Balance at end of period	2,837	(14,716)	2,837	(14,716)
Unrealized Gains on Derivatives
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Balance at beginning of period	410	1,198	903	862
Cumulative adjustment for adoption of ASU 2016-01						0		0
Adjusted equity balance						903		862
Other comprehensive income (loss) before classifications	(78)	6	(571)	342
Amounts reclassified from accumulated other comprehensive income	0	0	0	0
Net current period other comprehensive income (loss)	(78)	6	(571)	342
Balance at end of period	332	1,204	332	1,204
Pension Items
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Balance at beginning of period	41	21	41	21
Cumulative adjustment for adoption of ASU 2016-01						0		0
Adjusted equity balance						41		21
Other comprehensive income (loss) before classifications	0	0	0	0
Amounts reclassified from accumulated other comprehensive income	0	0	0	0
Net current period other comprehensive income (loss)	0	0	0	0
Balance at end of period	41	21	41	21
Accumulated Other Comprehensive Income (Loss)
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Balance at beginning of period	1,808	(11,478)	(7,838)	(2,349)
Cumulative adjustment for adoption of ASU 2016-01						0	(2,043)	(2,043)
Adjusted equity balance					$ (7,838)	$ (7,838)	$ (4,392)	$ (4,392)
Balance at end of period	$ 3,210	$ (13,491)	$ 3,210	$ (13,491)

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Estimated Fair Value of Financial Instruments and Fair Value Measurement- Carrying Values and Fair Values of Company's Financial Instruments (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Financial Assets:
Investment securities held to maturity	$ 151,115	$ 153,646
Investment securities held to maturity, Fair Value	152,495	150,932
Federal Home Loan Bank and other membership bank stocks, Carrying Value	18,006	13,301
Federal Home Loan Bank and other membership bank stocks, Fair Value	18,006	13,301
Loans and leases, net Carrying Value	4,884,759	4,419,045
Loans and leases, net Fair Value	4,964,970	4,341,477
Financial Liabilities:
Certificates of deposit, Carrying value	913,213	757,038
Certificates of deposit, Fair Value	913,550	750,801
Other borrowings, Carrying value	165,818	181,118
Other borrowings, Fair Value	166,581	176,921
Subordinated debentures, Carrying Value	118,211	105,027
Subordinated debentures, Fair Value	116,160	102,497
Quoted Prices in Active Markets for Identical Assets (Level 1)
Financial Assets:
Investment securities held to maturity, Fair Value	0	0
Federal Home Loan Bank and other membership bank stocks, Fair Value	0	0
Loans and leases, net Fair Value	0	0
Financial Liabilities:
Certificates of deposit, Fair Value	0	0
Other borrowings, Fair Value	0	0
Subordinated debentures, Fair Value	0	0
Significant Other Observable Inputs (Level 2)
Financial Assets:
Investment securities held to maturity, Fair Value	149,093	143,913
Federal Home Loan Bank and other membership bank stocks, Fair Value	18,006	13,301
Loans and leases, net Fair Value	0	0
Financial Liabilities:
Certificates of deposit, Fair Value	913,550	750,801
Other borrowings, Fair Value	166,581	176,921
Subordinated debentures, Fair Value	0	0
Significant Unobservable Inputs (Level 3)
Financial Assets:
Investment securities held to maturity, Fair Value	3,402	7,019
Federal Home Loan Bank and other membership bank stocks, Fair Value	0	0
Loans and leases, net Fair Value	4,964,970	4,341,477
Financial Liabilities:
Certificates of deposit, Fair Value	0	0
Other borrowings, Fair Value	0	0
Subordinated debentures, Fair Value	$ 116,160	$ 102,497

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Share-Based Compensation

9 Months Ended

Sep. 30, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation

SHARE-BASED COMPENSATION

The Company grants restricted stock, restricted stock units (“RSUs”) and stock options under the 2018 Omnibus Equity Incentive Plan and previously granted such awards under the 2009 Equity Compensation Program. The Company recognized share-based compensation expense on its restricted stock of $160,000 and $174,000 for the nine months ended September 30, 2019 and 2018, respectively. As of September 30, 2019, there was unrecognized compensation cost of $52,000 related to unvested restricted stock that is expected to be recognized over a weighted average period of approximately 0.30 years. The Company recognized share based compensation expense of $1.7 million and $1.8 million on RSUs for the nine months ended September 30, 2019 and 2018, respectively. Unrecognized compensation expense related to RSUs was approximately $3.0 million as of September 30, 2019, and that cost is expected to be recognized over a period of 1.47 years. There was no unrecognized compensation expense related to unvested stock options as of September 30, 2019.

In the first nine months of 2019, the Company granted 13,052 shares of restricted stock to non-employee directors at a grant date fair value of $15.96 per share under the 2018 Omnibus Equity Incentive Program. The restricted stock vests one year from the date it was granted. Compensation expense on this restricted stock is expected to be $208,000 over a one year period. In the first nine months of 2018, the Company granted 10,945 shares of restricted stock to non-employee directors at a grant date fair value of $20.55 per share under the 2009 Equity Compensation Program. The restricted stock vested one year from the date it was granted with a compensation expense of $225,000 over such period.

The following is a summary of the Company’s restricted stock activity during the nine months ended September 30, 2019:

	Number of Shares		Weighted Average Price
Outstanding, January 1, 2019	11,701		$	20.18
Granted	13,052		15.96
Vested	(11,643	)	20.24
Forfeited	—		—
Outstanding, September 30, 2019	13,110		$	15.93

In the first nine months of 2019, the Company granted 141,059 RSUs under the 2018 Omnibus Equity Incentive Plan at a weighted average grant date fair value of $16.62 per share. 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 agreement. There are also certain provisions in the compensation program which state that if a recipient 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 restricted stock units issued in the first nine months of 2019 is expected to average approximately $781,000 per year over a three year period. In the first nine months of 2018, the Company granted 151,733 RSUs under the Company’s 2009 Equity Compensation Program and 1,500 RSUs under the 2018 Omnibus Equity Incentive Plan at a weighted average grant date fair value of $19.14 per share. Compensation expense on these RSUs is expected to average approximately $978,000 per year over a three year period.

The following is a summary of the Company’s RSU activity during the nine months ended September 30, 2019:

	Number of Shares		Weighted Average Price
Outstanding, January 1, 2019	299,347		$	16.60
Granted	141,059		16.62
Vested	(107,396	)	12.20
Forfeited	(7,565	)	17.86
Outstanding, September 30, 2019	325,445		$	18.03

There were no grants of stock options in the first nine months of 2019 or 2018. Option activity under the Company’s stock option plans is as follows:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding, January 1, 2019	67,488		$	8.28	2.86	$	440,483
Granted	—		—
Exercised	(34,727	)	8.84
Forfeited	—		—
Expired	—		—
Outstanding, September 30, 2019	32,761		$	7.70	0.81	$	253,314
Options exercisable at September 30, 2019	32,761		$	7.70	0.81	$	253,314

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, multiplied by the number of in-the-money options).

There were 34,727 stock options exercised during the first nine months of 2019 and 34,728 stock options were exercised during the first nine months of 2018. The aggregate intrinsic value of stock options exercised during the first nine months of 2019 was $255,000 and resulted in $307,000 in cash receipts. For the nine months ended September 30, 2018, the intrinsic value of stock options exercised was $406,000 and the exercises resulted in cash receipts of $307,000.

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Leases

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Leases

LEASES

The Company leases certain premises and equipment under operating leases. Portions of certain properties are subleased for terms extending through 2024. At September 30, 2019, the Company had lease liabilities totaling $19.5 million and right-of-use assets totaling $18.0 million related to these leases. The calculated amount of the right-of-use asset and lease liabilities are impacted by the length of the lease term and the discount rate used to calculate the present value of the minimum lease payments. The Company's lease agreements often include one or more options to renew at the Company's discretion. If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the right-of-use asset and lease liability. The Company uses its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term. For leases existing prior to January 1, 2019, the rate for the remaining lease term as of January 1, 2019 was used.

For the nine months ended September 30, 2019, the weighted average remaining lease term for operating leases was 10.69 years and the weighted average discount rate used in the measurement of operating lease liabilities was 3.51%.

As the Company elected not to separate lease and non-lease components and instead to account for them as a single lease component, the variable lease cost primarily represents variable payments such as common area maintenance and utilities. Lease costs were as follows:

(in thousands)	Three Months Ended September 30, 2019			Nine Months Ended September 30, 2019
Operating lease cost	$	819		$	2,465
Short-term lease cost	—			—
Variable lease cost	32			100
Sublease income	(31		)	(92		)
Net lease cost	$	820		$	2,473

Rent expense for the three and nine months ended September 30, 2018, prior to the adoption of ASU 2016-02, was $731,000 and $2.2 million, respectively.

The table below presents other information on the Company's operating leases for the nine months ended September 30, 2019:

(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,977
Right-of-use asset obtained in exchange for new operating lease liabilities	$	765

There were no sale and leaseback transactions, leveraged leases or lease transactions with related parties during the three and nine months ended September 30, 2019. At September 30, 2019, the Company had no leases that had not yet commenced.

A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total operating lease liability at September 30, 2019 is as follows:

(in thousands)
Within one year	$	3,186
After one year but within two years	2,923
After two year but within three years	2,533
After three year but within four years	2,124
After four year but within five years	2,066
After 5 years	11,028
Total undiscounted cash flows	23,860
Discount on cash flows	(4,351		)
Total lease liability	$	19,509

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Revenue Recognition

9 Months Ended

Sep. 30, 2019

Revenue from Contract with Customer [Abstract]

Revenue Recognition

REVENUE RECOGNITION

The Company’s primary source of revenue is interest income generated from loans and investment securities. Interest income is recognized according to the terms of the financial instrument agreement over the life of the loan 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 fees, merchant fees, loan sales, investment services 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 three and nine months ended September 30, 2019 and 2018:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(in thousands)	2019		2018		2019		2018
Deposit Related Fees and Charges:
Debit card interchange income	$	1,429	$	1,280	$	4,059	$	3,675
Overdraft charges	1,047		966		3,024		2,975
ATM service charges	226		220		626		627
Demand deposit fees and charges	124		119		389		398
Savings service charges	25		29		81		95
Total	2,851		2,614		8,179		7,770
Commissions and Fees:
Loan fees	303		267		1,182		952
Wire transfer charges	316		291		888		813
Investment services income	474		378		1,253		917
Merchant fees	202		199		586		589
Commissions from sales of checks	85		106		299		326
Safe deposit income	94		92		275		280
Other income	66		77		187		205
Total	1,540		1,410		4,670		4,082
Gains on Sales of Loans	486		484		1,285		1,030
Other Income:
Gains on customer swap transactions	730		319		1,585		1,178
Title insurance income	9		27		128		149
Other income	627		48		755		203
Total	1,366		394		2,468		1,530
Revenue not from contracts with customers	457		737		2,210		2,270
Total Noninterest Income	$	6,700	$	5,639	$	18,812	$	16,682
Timing of Revenue Recognition:
Products and services transferred at a point in time	6,224		4,883		16,546		14,356
Products and services transferred over time	19		19		56		56
Revenue not from contracts with customers	457		737		2,210		2,270
Total Noninterest Income	$	6,700	$	5,639	$	18,812	$	16,682

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Share-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Summary of Company's Restricted Stock Activity

The following is a summary of the Company’s RSU activity during the nine months ended September 30, 2019:

	Number of Shares		Weighted Average Price
Outstanding, January 1, 2019	299,347		$	16.60
Granted	141,059		16.62
Vested	(107,396	)	12.20
Forfeited	(7,565	)	17.86
Outstanding, September 30, 2019	325,445		$	18.03

The following is a summary of the Company’s restricted stock activity during the nine months ended September 30, 2019:

	Number of Shares		Weighted Average Price
Outstanding, January 1, 2019	11,701		$	20.18
Granted	13,052		15.96
Vested	(11,643	)	20.24
Forfeited	—		—
Outstanding, September 30, 2019	13,110		$	15.93

Option Activity under the Company's Stock Option Plans

There were no grants of stock options in the first nine months of 2019 or 2018. Option activity under the Company’s stock option plans is as follows:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding, January 1, 2019	67,488		$	8.28	2.86	$	440,483
Granted	—		—
Exercised	(34,727	)	8.84
Forfeited	—		—
Expired	—		—
Outstanding, September 30, 2019	32,761		$	7.70	0.81	$	253,314
Options exercisable at September 30, 2019	32,761		$	7.70	0.81	$	253,314

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Acquisitions - Estimated Fair Value of the Acquired Assets and Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Jan. 04, 2019	Dec. 31, 2018
Business Acquisition [Line Items]
Goodwill	$ 156,277		$ 136,433
Highlands Bancorp, Inc.
Business Acquisition [Line Items]
Cash and cash equivalents		$ 13,454
Securities, available for sale		22,734
Federal Home Loan Bank stock		1,767
Loans held for sale		1,113
Loans		425,005
Premises and equipment		2,613
Goodwill		19,844
Identifiable intangible assets		3,728
Accrued interest receivable and other assets		6,244
Total assets acquired		496,502
Deposits		(409,638)
Other borrowings		(27,800)
Subordinated debt		(13,157)
Other liabilities		(2,490)
Total liabilities assumed		(453,085)
Net assets acquired		$ 43,417

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Revenue Recognition (Tables)

9 Months Ended

Sep. 30, 2019

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following table sets forth the components of noninterest income for the three and nine months ended September 30, 2019 and 2018:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(in thousands)	2019		2018		2019		2018
Deposit Related Fees and Charges:
Debit card interchange income	$	1,429	$	1,280	$	4,059	$	3,675
Overdraft charges	1,047		966		3,024		2,975
ATM service charges	226		220		626		627
Demand deposit fees and charges	124		119		389		398
Savings service charges	25		29		81		95
Total	2,851		2,614		8,179		7,770
Commissions and Fees:
Loan fees	303		267		1,182		952
Wire transfer charges	316		291		888		813
Investment services income	474		378		1,253		917
Merchant fees	202		199		586		589
Commissions from sales of checks	85		106		299		326
Safe deposit income	94		92		275		280
Other income	66		77		187		205
Total	1,540		1,410		4,670		4,082
Gains on Sales of Loans	486		484		1,285		1,030
Other Income:
Gains on customer swap transactions	730		319		1,585		1,178
Title insurance income	9		27		128		149
Other income	627		48		755		203
Total	1,366		394		2,468		1,530
Revenue not from contracts with customers	457		737		2,210		2,270
Total Noninterest Income	$	6,700	$	5,639	$	18,812	$	16,682
Timing of Revenue Recognition:
Products and services transferred at a point in time	6,224		4,883		16,546		14,356
Products and services transferred over time	19		19		56		56
Revenue not from contracts with customers	457		737		2,210		2,270
Total Noninterest Income	$	6,700	$	5,639	$	18,812	$	16,682

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Estimated Fair Value of Financial Instruments and Fair Value Measurement

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Estimated Fair Value of Financial Instruments and Fair Value Measurement

ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENT

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 upon 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 from a third party 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 nine months ended September 30, 2019, the Company did not make any transfers between any levels within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:

(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
September 30, 2019
Assets:
Investment securities, available for sale
U.S. Treasury and government agencies	$	12,618	$	133,712	$	—	$	146,330
Mortgage-backed securities	—		524,898		—		524,898
Obligations of states and political subdivisions	—		44,044		—		44,044
Debt securities	—		5,133		—		5,133
Total securities available for sale	12,618		707,787		—		720,405
Equity securities, at fair value	1,843		13,709		—		15,552
Derivative assets	—		34,722		—		34,722
Total Assets	$	14,461	$	756,218	$	—	$	770,679
Liabilities:
Derivative liabilities	$	—	$	34,430	$	—	$	34,430
Total Liabilities	$	—	$	34,430	$	—	$	34,430
December 31, 2018
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
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

The following table sets forth the Company’s 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:

(in thousands)	(Level 1)		(Level 2)		(Level 3)		Total Fair Value
September 30, 2019
Assets:
Impaired loans	$	—	$	—	$	17,653	$	17,653
Loans held for sale	—		3,077		—		3,077
Properties held for sale	$	—	$	—	$	1,836	$	1,836
Other real estate owned and other repossessed assets	—		—		944		944
December 31, 2018
Assets:
Impaired loans	$	—	$	—	$	19,702	$	19,702
Loans held for sale	—		1,113		—		1,113
Other real estate owned and other repossessed assets	—		—		830		830

Impaired loans 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 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 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 adjusted 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 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 market value. Fair value is generally determined by the value of purchase commitments.

Properties held for sale contain two properties from the Highlands acquisition that the Company plans to sell. These properties are carried at fair value less estimated disposal costs of the acquired property. Fair value is based on current listing prices for these properties.

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 recognized valuation resources.

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 September 30, 2019, and December 31, 2018, 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 purchased 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 is 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 $902,000 in short-term municipal bond anticipation notes and $2.5 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 Federal Home Loan Banks, 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 has been valued using an exit price approach, which incorporates a buildup discount rate calculation that uses a swap rate adjusted for credit risk, servicing costs, a liquidity premium and a prepayment premium.

For fixed maturity certificates of deposit, fair value is 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 value 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 September 30, 2019 and December 31, 2018:

(in thousands)	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)
September 30, 2019
Financial Assets:
Investment securities held to maturity	$	151,115	$	152,495	$	—	$	149,093	$	3,402
Federal Home Loan Bank and other membership bank stocks	18,006		18,006		—		18,006		—
Loans, net	4,884,759		4,964,970		—		—		4,964,970
Financial Liabilities:
Certificates of deposit	913,213		913,550		—		913,550		—
Other borrowings	165,818		166,581		—		166,581		—
Subordinated debentures	118,211		116,160		—		—		116,160
December 31, 2018
Financial Assets:
Investment securities held to maturity	$	153,646	$	150,932	$	—	$	143,913	$	7,019
Federal Home Loan Bank and other membership bank stocks	13,301		13,301		—		13,301		—
Loans, 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

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Leases (Tables)

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Lease, Cost

Lease costs were as follows:

(in thousands)	Three Months Ended September 30, 2019			Nine Months Ended September 30, 2019
Operating lease cost	$	819		$	2,465
Short-term lease cost	—			—
Variable lease cost	32			100
Sublease income	(31		)	(92		)
Net lease cost	$	820		$	2,473

Schedule of Lease, Other Information

The table below presents other information on the Company's operating leases for the nine months ended September 30, 2019:

(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,977
Right-of-use asset obtained in exchange for new operating lease liabilities	$	765

Maturity analysis of operating lease liabilities

A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total operating lease liability at September 30, 2019 is as follows:

(in thousands)
Within one year	$	3,186
After one year but within two years	2,923
After two year but within three years	2,533
After three year but within four years	2,124
After four year but within five years	2,066
After 5 years	11,028
Total undiscounted cash flows	23,860
Discount on cash flows	(4,351		)
Total lease liability	$	19,509

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Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Jan. 04, 2019	Dec. 31, 2018
Goodwill And Intangible Assets [Line Items]
Goodwill	$ 156,277		$ 136,433
Core Deposits
Goodwill And Intangible Assets [Line Items]
Core deposit intangible	$ 4,600		$ 1,800
Highlands Bancorp, Inc.
Goodwill And Intangible Assets [Line Items]
Goodwill		$ 19,844
Identifiable intangible assets		$ 3,728

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Leases - Other Information (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($)
Leases [Abstract]
Operating cash flows from operating leases	$ 1,977
Right-of-use asset obtained in exchange for new operating lease liabilities	$ 765

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Investment Securities - Reconciliation of Available-for-Sale and Held-to-Maturity Securities in Continuous Unrealized Loss Position (Detail) $ in Thousands	Sep. 30, 2019 USD ($) Security	Dec. 31, 2018 USD ($) Security
Investment [Line Items]
Available for Sale, Less Than 12 Months, Fair Value	$ 101,108	$ 33,973
Available for Sale, Less Than 12 Months, Unrealized Losses	398	278
Available for Sale, 12 Months or Longer, Fair Value	171,190	476,622
Available for Sale, 12 Months or Longer, Unrealized Losses	$ 1,547	$ 11,923
Available for Sale, Number of Securities (in shares) | Security	99	220
Available for Sale, Total, Fair Value	$ 272,298	$ 510,595
Available for Sale, Total, Unrealized Losses	1,945	12,201
Held to Maturity, Less Than 12 Months, Fair Value	7,783	13,971
Held to Maturity, Less Than 12 Months, Unrealized Losses	12	185
Held to Maturity, 12 Months or Longer, Fair Value	24,822	103,507
Held to Maturity, 12 Months or Longer, Unrealized Losses	$ 189	$ 2,811
Held to Maturity, Number of Securities (in shares) | Security	18	72
Held to Maturity, Total, Fair Value	$ 32,605	$ 117,478
Held to Maturity, Total, Unrealized Losses	201	2,996
U.S. Treasury and U.S. government agencies
Investment [Line Items]
Available for Sale, Less Than 12 Months, Fair Value	5,180	20,588
Available for Sale, Less Than 12 Months, Unrealized Losses	31	216
Available for Sale, 12 Months or Longer, Fair Value	56,134	120,338
Available for Sale, 12 Months or Longer, Unrealized Losses	$ 461	$ 2,352
Available for Sale, Number of Securities (in shares) | Security	12	27
Available for Sale, Total, Fair Value	$ 61,314	$ 140,926
Available for Sale, Total, Unrealized Losses	492	2,568
Held to Maturity, Less Than 12 Months, Fair Value	3,799	0
Held to Maturity, Less Than 12 Months, Unrealized Losses	6	0
Held to Maturity, 12 Months or Longer, Fair Value	5,129	32,348
Held to Maturity, 12 Months or Longer, Unrealized Losses	$ 12	$ 677
Held to Maturity, Number of Securities (in shares) | Security	2	6
Held to Maturity, Total, Fair Value	$ 8,928	$ 32,348
Held to Maturity, Total, Unrealized Losses	18	677
Mortgage-backed securities, residential
Investment [Line Items]
Available for Sale, Less Than 12 Months, Fair Value	84,842	10,119
Available for Sale, Less Than 12 Months, Unrealized Losses	284	58
Available for Sale, 12 Months or Longer, Fair Value	106,968	316,851
Available for Sale, 12 Months or Longer, Unrealized Losses	$ 1,057	$ 8,785
Available for Sale, Number of Securities (in shares) | Security	73	139
Available for Sale, Total, Fair Value	$ 191,810	$ 326,970
Available for Sale, Total, Unrealized Losses	1,341	8,843
Held to Maturity, Less Than 12 Months, Fair Value	3,984	8,325
Held to Maturity, Less Than 12 Months, Unrealized Losses	6	59
Held to Maturity, 12 Months or Longer, Fair Value	13,516	53,761
Held to Maturity, 12 Months or Longer, Unrealized Losses	$ 142	$ 1,779
Held to Maturity, Number of Securities (in shares) | Security	14	36
Held to Maturity, Total, Fair Value	$ 17,500	$ 62,086
Held to Maturity, Total, Unrealized Losses	148	1,838
Mortgage-backed securities, multifamily
Investment [Line Items]
Available for Sale, Less Than 12 Months, Fair Value	8,236	1,977
Available for Sale, Less Than 12 Months, Unrealized Losses	80	2
Available for Sale, 12 Months or Longer, Fair Value	4,916	12,911
Available for Sale, 12 Months or Longer, Unrealized Losses	$ 12	$ 202
Available for Sale, Number of Securities (in shares) | Security	3	4
Available for Sale, Total, Fair Value	$ 13,152	$ 14,888
Available for Sale, Total, Unrealized Losses	92	204
Held to Maturity, Less Than 12 Months, Fair Value	0	0
Held to Maturity, Less Than 12 Months, Unrealized Losses	0	0
Held to Maturity, 12 Months or Longer, Fair Value	1,007	1,818
Held to Maturity, 12 Months or Longer, Unrealized Losses	$ 5	$ 35
Held to Maturity, Number of Securities (in shares) | Security	1	2
Held to Maturity, Total, Fair Value	$ 1,007	$ 1,818
Held to Maturity, Total, Unrealized Losses	5	35
Obligations of states and political subdivisions
Investment [Line Items]
Available for Sale, Less Than 12 Months, Fair Value	2,850	1,289
Available for Sale, Less Than 12 Months, Unrealized Losses	3	2
Available for Sale, 12 Months or Longer, Fair Value	3,172	26,522
Available for Sale, 12 Months or Longer, Unrealized Losses	$ 17	$ 584
Available for Sale, Number of Securities (in shares) | Security	11	50
Available for Sale, Total, Fair Value	$ 6,022	$ 27,811
Available for Sale, Total, Unrealized Losses	20	586
Held to Maturity, Less Than 12 Months, Fair Value	0	1,764
Held to Maturity, Less Than 12 Months, Unrealized Losses	0	8
Held to Maturity, 12 Months or Longer, Fair Value	5,170	15,580
Held to Maturity, 12 Months or Longer, Unrealized Losses	$ 30	$ 320
Held to Maturity, Number of Securities (in shares) | Security	1	27
Held to Maturity, Total, Fair Value	$ 5,170	$ 17,344
Held to Maturity, Total, Unrealized Losses	$ 30	328
Other debt securities
Investment [Line Items]
Held to Maturity, Less Than 12 Months, Fair Value		3,882
Held to Maturity, Less Than 12 Months, Unrealized Losses		118
Held to Maturity, 12 Months or Longer, Fair Value		0
Held to Maturity, 12 Months or Longer, Unrealized Losses		$ 0
Held to Maturity, Number of Securities (in shares) | Security		1
Held to Maturity, Total, Fair Value		$ 3,882
Held to Maturity, Total, Unrealized Losses		$ 118

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Revenue Recognition - Disaggregation of Revenues (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Disaggregation of Revenue [Line Items]
Gains on sales of loans	$ 486	$ 484	$ 1,285	$ 1,030
Other Income
Gains on customer swap transactions	730	319	1,585	1,178
Title insurance income	9	27	128	149
Other income	627	48	755	203
Total	1,366	394	2,468	1,530
Revenue not from contracts with customers	457	737	2,210	2,270
Total Noninterest Income	6,700	5,639	18,812	16,682
Products and services transferred at a point in time
Other Income
Revenue from contract with customer	6,224	4,883	16,546	14,356
Products and services transferred over time
Other Income
Revenue from contract with customer	19	19	56	56
Deposit Related Fees and Charges:
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	2,851	2,614	8,179	7,770
Debit card interchange income
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	1,429	1,280	4,059	3,675
Overdraft charges
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	1,047	966	3,024	2,975
ATM service charges
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	226	220	626	627
Demand deposit fees and charges
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	124	119	389	398
Savings service charges
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	25	29	81	95
Commissions and Fees:
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	1,540	1,410	4,670	4,082
Loan fees
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	303	267	1,182	952
Wire transfer charges
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	316	291	888	813
Investment services income
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	474	378	1,253	917
Merchant fees
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	202	199	586	589
Commissions from sales of checks
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	85	106	299	326
Safe deposit income
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	94	92	275	280
Other income
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	$ 66	$ 77	$ 187	$ 205

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Investment Securities - Reconciliation of Held-to-Maturity Securities (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	$ 151,115	$ 153,646
Gross Unrealized Gains	1,581	282
Gross Unrealized Losses	(201)	(2,996)
Investment securities held to maturity, Fair Value	152,495	150,932
U.S. government agencies
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	31,974	33,025
Gross Unrealized Gains	234	0
Gross Unrealized Losses	(18)	(677)
Investment securities held to maturity, Fair Value	32,190	32,348
Mortgage-backed securities, residential
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	81,503	75,859
Gross Unrealized Gains	823	169
Gross Unrealized Losses	(148)	(1,838)
Investment securities held to maturity, Fair Value	82,178	74,190
Mortgage-backed securities, multifamily
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	1,775	1,853
Gross Unrealized Gains	15	0
Gross Unrealized Losses	(5)	(35)
Investment securities held to maturity, Fair Value	1,785	1,818
Obligations of states and political subdivisions
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	29,363	37,909
Gross Unrealized Gains	468	113
Gross Unrealized Losses	(30)	(328)
Investment securities held to maturity, Fair Value	29,801	37,694
Debt securities
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	6,500	5,000
Gross Unrealized Gains	41	0
Gross Unrealized Losses	0	(118)
Investment securities held to maturity, Fair Value	$ 6,541	$ 4,882

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Share-Based Compensation - Option Activity under the Company's Stock Option Plans (Detail) - USD ($)	9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Number of Shares
Outstanding, Number of shares, Beginning balance (in shares)	67,488
Granted, Number of shares (in shares)	0	0
Exercised, Number of shares (in shares)	(34,727)
Forfeited, Number of shares (in shares)	0
Expired, Number of shares (in shares)	0
Outstanding, Number of shares, Ending balance (in shares)	32,761		67,488
Options exercisable, Number of shares, Ending balance (in shares)	32,761
Weighted Average Exercise Price
Outstanding, Weighted average exercise price, Beginning balance (in usd per share)	$ 8.28
Granted, Weighted average exercise price (in usd per share)	0
Exercised, Weighted average exercise price (in usd per share)	8.84
Forfeited, Weighted average exercise price (in usd per share)	0
Expired, Weighted average exercise price (in usd per share)	0
Outstanding, Weighted average exercise price, Ending balance (in usd per share)	7.70		$ 8.28
Options exercisable, Weighted average exercise price, Ending balance (in usd per share)	$ 7.70
Weighted Average Remaining Contractual Term (in years)
Outstanding, Average remaining contractual term (in years)	24 days		2 years 10 months 9 days
Options exercisable, Average remaining contractual term (in years)	24 days
Aggregate Intrinsic Value
Outstanding, Aggregate intrinsic value	$ 253,314		$ 440,483
Options exercisable at year end, Aggregate intrinsic value	$ 253,314

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Estimated Fair Value of Financial Instruments and Fair Value Measurement - Fair Value of Assets Measured on Non-recurring Basis (Detail) - Fair Value, Measurements, Non-recurring - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Assets:
Impaired loans	$ 17,653	$ 19,702
Loans held for sale	3,077	1,113
Properties held for sale	1,836
Other real estate owned and other repossessed assets	944	830
(Level 1)
Assets:
Impaired loans	0	0
Loans held for sale	0	0
Properties held for sale	0
Other real estate owned and other repossessed assets	0	0
(Level 2)
Assets:
Impaired loans	0	0
Loans held for sale	3,077	1,113
Properties held for sale	0
Other real estate owned and other repossessed assets	0	0
(Level 3)
Assets:
Impaired loans	17,653	19,702
Loans held for sale	0	0
Properties held for sale	1,836
Other real estate owned and other repossessed assets	$ 944	$ 830

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Loans and Other Real Estate - Impaired Loans with and without Specific Allowances (Detail) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Financing Receivable, Impaired [Line Items]
Recorded Investment in Impaired Loans	$ 17,653	$ 19,702
Contractual Unpaid Principal Balance	18,697	21,360
Related Allowance	226	338
Average Investment in Impaired Loans	17,460	20,012
Interest Income Recognized	342	592
Commercial, secured by real estate
Financing Receivable, Impaired [Line Items]
Loans without related allowance, Recorded Investment in Impaired Loans	10,886	9,284
Loans with related allowance, Recorded Investment in Impaired Loans	2,934	7,270
Recorded Investment in Impaired Loans	13,820	16,554
Loans without related allowance, Contractual Unpaid Principal Balance	11,457	9,829
Loans with related allowance, Contractual Unpaid Principal Balance	3,162	7,597
Contractual Unpaid Principal Balance	14,619	17,426
Related Allowance	201	307
Loans without related allowance, Average Investment in Impaired Loans	10,399	7,369
Loans with related allowance, Average Investment in Impaired Loans	4,088	7,594
Average Investment in Impaired Loans	14,487	14,963
Loans without related allowance, Interest Income Recognized	157	188
Loans with related allowance, Interest Income Recognized	128	317
Interest Income Recognized	285	505
Commercial, industrial and other
Financing Receivable, Impaired [Line Items]
Loans without related allowance, Recorded Investment in Impaired Loans	628	1,151
Loans with related allowance, Recorded Investment in Impaired Loans	121	209
Recorded Investment in Impaired Loans	749	1,360
Loans without related allowance, Contractual Unpaid Principal Balance	617	1,449
Loans with related allowance, Contractual Unpaid Principal Balance	121	209
Contractual Unpaid Principal Balance	738	1,658
Related Allowance	6	7
Loans without related allowance, Average Investment in Impaired Loans	1,341	1,834
Loans with related allowance, Average Investment in Impaired Loans	121	209
Average Investment in Impaired Loans	1,462	2,043
Loans without related allowance, Interest Income Recognized	13	19
Loans with related allowance, Interest Income Recognized	5	12
Interest Income Recognized	18	31
Equipment finance
Financing Receivable, Impaired [Line Items]
Loans without related allowance, Recorded Investment in Impaired Loans	0	301
Loans with related allowance, Recorded Investment in Impaired Loans	25	30
Recorded Investment in Impaired Loans	25	331
Loans without related allowance, Contractual Unpaid Principal Balance	0	597
Loans with related allowance, Contractual Unpaid Principal Balance	25	30
Contractual Unpaid Principal Balance	25	627
Related Allowance	11	14
Loans without related allowance, Average Investment in Impaired Loans	0	376
Loans with related allowance, Average Investment in Impaired Loans	25	19
Average Investment in Impaired Loans	25	395
Loans without related allowance, Interest Income Recognized	0	0
Loans with related allowance, Interest Income Recognized	2	0
Interest Income Recognized	2	0
Real estate - residential mortgage
Financing Receivable, Impaired [Line Items]
Loans without related allowance, Recorded Investment in Impaired Loans	1,678	0
Loans with related allowance, Recorded Investment in Impaired Loans	686	730
Recorded Investment in Impaired Loans	2,364	730
Loans without related allowance, Contractual Unpaid Principal Balance	1,672	0
Loans with related allowance, Contractual Unpaid Principal Balance	855	884
Contractual Unpaid Principal Balance	2,527	884
Related Allowance	3	4
Loans without related allowance, Average Investment in Impaired Loans	75	242
Loans with related allowance, Average Investment in Impaired Loans	698	745
Average Investment in Impaired Loans	773	987
Loans without related allowance, Interest Income Recognized	0	4
Loans with related allowance, Interest Income Recognized	15	20
Interest Income Recognized	15	24
Real estate - construction
Financing Receivable, Impaired [Line Items]
Loans without related allowance, Recorded Investment in Impaired Loans	0	0
Loans with related allowance, Recorded Investment in Impaired Loans	0	0
Recorded Investment in Impaired Loans	0	0
Loans without related allowance, Contractual Unpaid Principal Balance	0	0
Loans with related allowance, Contractual Unpaid Principal Balance	0	0
Contractual Unpaid Principal Balance	0	0
Related Allowance	0	0
Loans without related allowance, Average Investment in Impaired Loans	0	726
Loans with related allowance, Average Investment in Impaired Loans	0	0
Average Investment in Impaired Loans	0	726
Loans without related allowance, Interest Income Recognized	0	0
Loans with related allowance, Interest Income Recognized	0	0
Interest Income Recognized	0	0
Home equity and consumer
Financing Receivable, Impaired [Line Items]
Loans without related allowance, Recorded Investment in Impaired Loans	0	0
Loans with related allowance, Recorded Investment in Impaired Loans	695	727
Recorded Investment in Impaired Loans	695	727
Loans without related allowance, Contractual Unpaid Principal Balance	0	0
Loans with related allowance, Contractual Unpaid Principal Balance	788	765
Contractual Unpaid Principal Balance	788	765
Related Allowance	5	6
Loans without related allowance, Average Investment in Impaired Loans	0	0
Loans with related allowance, Average Investment in Impaired Loans	713	898
Average Investment in Impaired Loans	713	898
Loans without related allowance, Interest Income Recognized	0	0
Loans with related allowance, Interest Income Recognized	22	32
Interest Income Recognized	$ 22	$ 32

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Loans and Other Real Estate - Narrative (Detail) - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Jan. 04, 2019	Dec. 31, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and debt securities acquired with deteriorated credit quality	$ 12,205,000			$ 652,000
Troubled debt restructurings included in non accrual loans	1,600,000			3,600,000
Unfunded lending reserve	1,800,000			2,300,000
Other real estate owned	944,000			830,000
Other repossessed assets owned	0			0
Residential Property
Accounts, Notes, Loans and Financing Receivable [Line Items]
Other real estate owned	879,000			702,000
Impaired Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Interest income on credit impaired loans	342,000	$ 450,000
Interest accrued on impaired loans	703,000	$ 842,000
Highlands Bancorp, Inc.
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and debt securities acquired with deteriorated credit quality	11,627,000		$ 13,800,000	0
Federal Home Loan Bank of New York
Accounts, Notes, Loans and Financing Receivable [Line Items]
Residential loans pledged for potential borrowings at the Federal Home Loan Bank of New York	1,350,000,000			1,160,000,000
Home equity and consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Overdraft balances included in home equity and consumer loans	391,000			452,000
Residential Mortgages And Consumer Home Equity Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Mortgage loans that were in process of foreclosure	1,000,000.0			$ 1,500,000
Minimum
Accounts, Notes, Loans and Financing Receivable [Line Items]
Group of impaired loans with recorded investment	$ 500,000

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Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
INTEREST INCOME
Loans and fees	$ 58,563	$ 49,181	$ 175,324	$ 142,384
Federal funds sold and interest-bearing deposits with banks	695	533	1,297	844
Taxable investment securities and other	5,007	4,141	14,865	12,160
Tax-exempt investment securities	361	427	1,165	1,299
TOTAL INTEREST INCOME	64,626	54,282	192,651	156,687
INTEREST EXPENSE
Deposits	13,267	8,429	37,526	20,685
Federal funds purchased and securities sold under agreements to repurchase	231	42	1,333	409
Other borrowings	2,446	2,187	7,306	6,240
TOTAL INTEREST EXPENSE	15,944	10,658	46,165	27,334
NET INTEREST INCOME	48,682	43,624	146,486	129,353
Provision for loan losses	536	1,046	1,044	3,822
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	48,146	42,578	145,442	125,531
NONINTEREST INCOME
Service charges on deposit accounts	2,851	2,614	8,179	7,770
Commissions and fees	1,545	1,414	4,682	4,096
Income on bank owned life insurance	691	1,127	2,064	2,557
Gain on equity securities	72	(439)	525	(384)
Gains on sales of loans	486	484	1,285	1,030
Other income	1,055	439	2,077	1,613
Total Noninterest Income	6,700	5,639	18,812	16,682
NONINTEREST EXPENSE
Salaries and employee benefits	19,062	17,352	57,672	50,921
Net occupancy expense	2,767	2,316	8,350	7,657
Furniture and equipment	2,084	2,070	6,365	6,287
FDIC insurance expense	(420)	400	431	1,225
Stationery, supplies and postage	366	371	1,214	1,230
Marketing expense	423	343	1,430	1,160
Data processing expense	1,248	1,083	3,800	2,525
Telecommunications expense	480	438	1,451	1,321
ATM and debit card expense	588	556	1,773	1,624
Core deposit intangible amortization	288	142	893	452
Other real estate and repossessed asset expense	29	45	223	112
Merger related expenses	0	0	3,178	0
Other expenses	2,648	2,677	8,453	7,990
TOTAL NONINTEREST EXPENSE	29,563	27,793	95,233	82,504
Income before provision for income taxes	25,283	20,424	69,021	59,709
Provision for income taxes	6,409	3,666	17,064	11,858
NET INCOME	$ 18,874	$ 16,758	$ 51,957	$ 47,851
PER SHARE OF COMMON STOCK
Basic earnings (in usd per share)	$ 0.37	$ 0.35	$ 1.02	$ 1.00
Diluted earnings (in usd per share)	0.37	0.35	1.02	0.99
Common stock, dividends price per share (in usd per share)	$ 0.125	$ 0.115	$ 0.365	$ 0.330

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Loans and Other Real Estate - Summary of Restructured Loans (Detail) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019 USD ($) Contract	Sep. 30, 2018 USD ($) Contract	Sep. 30, 2019 USD ($) Contract	Sep. 30, 2018 USD ($) Contract
Financing Receivable, Modifications [Line Items]
Number of Contracts | Contract	2	1	2	5
Pre- Modification Outstanding Recorded Investment	$ 83	$ 1,175	$ 83	$ 3,952
Post- Modification Outstanding Recorded Investment	$ 83	$ 1,175	$ 83	$ 3,952
Commercial, secured by real estate
Financing Receivable, Modifications [Line Items]
Number of Contracts | Contract	0	1	0	4
Pre- Modification Outstanding Recorded Investment	$ 0	$ 1,175	$ 0	$ 3,002
Post- Modification Outstanding Recorded Investment	$ 0	$ 1,175	$ 0	$ 3,002
Commercial, industrial and other
Financing Receivable, Modifications [Line Items]
Number of Contracts | Contract			0	1
Pre- Modification Outstanding Recorded Investment			$ 0	$ 950
Post- Modification Outstanding Recorded Investment			$ 0	$ 950
Home Equity And Consumer
Financing Receivable, Modifications [Line Items]
Number of Contracts | Contract	2	0
Pre- Modification Outstanding Recorded Investment	$ 83	$ 0
Post- Modification Outstanding Recorded Investment	$ 83	$ 0

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Consolidated Statements of Cash Flows (Unaudited) $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME	$ 51,957	$ 47,851
Adjustments to reconcile net income to net cash provided by operating activities:
Net amortization of premiums, discounts and deferred loan fees and costs	1,838	3,548
Depreciation and amortization	1,162	4,114
Amortization of intangible assets	893	452
Amortization of operating lease right-of-use assets	1,938
Provision for loan losses	1,044	3,822
Loans originated for sale	(40,074)	(35,270)
Proceeds from sales of loans held for sale	40,508	34,932
Change in market value of equity securities	(525)	366
Gains on proceeds from bank owned life insurance policies	0	(421)
Gains on sales of loans held for sale	(1,285)	(546)
Losses (gains) on other real estate and other repossessed assets	87	(98)
Losses on sales of premises and equipment	486	3
Stock-based compensation	1,822	1,930
Deferred tax benefit	0	(1,263)
Excess tax benefits	183	313
Increase in other assets	(20,386)	(1,438)
Increase in other liabilities	21,935	8,105
NET CASH PROVIDED BY OPERATING ACTIVITIES	61,583	66,400
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash acquired in acquisitions	13,454	0
Proceeds from repayments and maturities of available for sale securities	102,133	68,240
Proceeds from repayments and maturities of held to maturity securities	22,330	18,229
Proceeds from sales of equity securities	1,153	2,155
Purchase of available for sale securities	(149,182)	(68,845)
Purchase of held to maturity securities	(18,897)	(37,655)
Purchase of equity securities	(259)	(469)
Death benefit proceeds from bank owned life insurance policy	121	755
Proceeds from redemptions of Federal Home Loan Bank stock	79,217	5,716
Purchases of Federal Home Loan Bank stock	(82,155)	(6,598)
Net increase in loans	(38,613)	(181,561)
Proceeds from sales of other real estate and repossessed assets	399	1,795
Proceeds from dispositions and sales of premises and equipment	1,827	61
Purchases of premises and equipment	(4,166)	(3,899)
NET CASH USED IN INVESTING ACTIVITIES	(72,638)	(202,076)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits	180,990	274,029
Decrease in federal funds purchased and securities sold under agreements to repurchase	(34,579)	(77,538)
Proceeds from other borrowings	46,260	39,437
Repayments of other borrowings	(89,353)	(46,700)
Exercise of stock options	307	307
Retirement of restricted stock	(654)	(759)
Dividends paid	(18,557)	(15,797)
NET CASH PROVIDED BY FINANCING ACTIVITIES	84,414	172,979
Net increase in cash and cash equivalents	73,359	37,303
Cash and cash equivalents, beginning of period	208,599	142,933
CASH AND CASH EQUIVALENTS, END OF PERIOD	281,958	180,236
Supplemental schedule of non-cash investing and financing activities:
Cash paid during the period for income taxes	10,847	4,614
Cash paid during the period for interest	46,532	25,748
Transfer of loans into other repossessed assets and other real estate owned	599	3,608
Initial recognition of operating lease right-of-use assets	17,953
Initial recognition of operating lease liabilities	19,509
Non-cash assets acquired:
Federal Home Loan Bank stock	1,767	0
Investment securities available for sale	22,734	0
Loans, including loans held for sale	426,118	0
Goodwill and other intangible assets, net	23,125	0
Other assets	9,304	0
Total non-cash assets acquired	483,048	0
Deposits	409,638	0
Other borrowings	40,957	0
Other liabilities	2,490	0
Total liabilities assumed	453,085	0
Common stock issued	$ 43,417	$ 0

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Acquisitions - Supplemental Pro Forma Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Business Combinations [Abstract]
Net interest income	$ 146,633	$ 143,250
Provision for loan losses	1,044	4,219
Noninterest income	18,783	19,029
Noninterest expense	92,136	92,344
Net income	$ 54,373	$ 52,244
Fully diluted (in usd per share)	$ 1.07	$ 1.03

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Derivatives (Tables)

9 Months Ended

Sep. 30, 2019

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):

September 30, 2019	Notional Amount		Average Maturity (Years)	Weighted Average Fixed Rate		Weighted Average Variable Rate	Fair  Value
Classified in Other Assets:
3rd Party interest rate swaps	$	6,468	4.0	3.78	%	1 Mo. LIBOR + 2.50%	$	26
Customer interest rate swaps	424,321		9.8	4.36	%	1 Mo. LIBOR + 1.96%	34,404
Interest rate swap (cash flow hedge)	30,000		1.8	1.10	%	3 Mo. LIBOR	292
Classified in Other Liabilities:
Customer interest rate swaps	$	6,468	4.0	3.78	%	1 Mo. LIBOR + 2.50%	$	(26	)
3rd Party interest rate swaps	424,321		9.8	4.36	%	1 Mo. LIBOR + 1.96%	(34,404		)

December 31, 2018	Notional  Amount		Average Maturity (Years)	Weighted  Average Fixed Rate		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		)

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Estimated Fair Value of Financial Instruments and Fair Value Measurement (Tables)

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value of Financial Assets and Liabilities Measured on Recurring Basis

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 nine months ended September 30, 2019, the Company did not make any transfers between any levels within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:

(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
September 30, 2019
Assets:
Investment securities, available for sale
U.S. Treasury and government agencies	$	12,618	$	133,712	$	—	$	146,330
Mortgage-backed securities	—		524,898		—		524,898
Obligations of states and political subdivisions	—		44,044		—		44,044
Debt securities	—		5,133		—		5,133
Total securities available for sale	12,618		707,787		—		720,405
Equity securities, at fair value	1,843		13,709		—		15,552
Derivative assets	—		34,722		—		34,722
Total Assets	$	14,461	$	756,218	$	—	$	770,679
Liabilities:
Derivative liabilities	$	—	$	34,430	$	—	$	34,430
Total Liabilities	$	—	$	34,430	$	—	$	34,430
December 31, 2018
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
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

Fair Value of Assets Measured on Non-recurring Basis

The following table sets forth the Company’s 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:

(in thousands)	(Level 1)		(Level 2)		(Level 3)		Total Fair Value
September 30, 2019
Assets:
Impaired loans	$	—	$	—	$	17,653	$	17,653
Loans held for sale	—		3,077		—		3,077
Properties held for sale	$	—	$	—	$	1,836	$	1,836
Other real estate owned and other repossessed assets	—		—		944		944
December 31, 2018
Assets:
Impaired loans	$	—	$	—	$	19,702	$	19,702
Loans held for sale	—		1,113		—		1,113
Other real estate owned and other repossessed assets	—		—		830		830

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 September 30, 2019 and December 31, 2018:

(in thousands)	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)
September 30, 2019
Financial Assets:
Investment securities held to maturity	$	151,115	$	152,495	$	—	$	149,093	$	3,402
Federal Home Loan Bank and other membership bank stocks	18,006		18,006		—		18,006		—
Loans, net	4,884,759		4,964,970		—		—		4,964,970
Financial Liabilities:
Certificates of deposit	913,213		913,550		—		913,550		—
Other borrowings	165,818		166,581		—		166,581		—
Subordinated debentures	118,211		116,160		—		—		116,160
December 31, 2018
Financial Assets:
Investment securities held to maturity	$	153,646	$	150,932	$	—	$	143,913	$	7,019
Federal Home Loan Bank and other membership bank stocks	13,301		13,301		—		13,301		—
Loans, 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

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Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

GOODWILL AND INTANGIBLE ASSETS

The Company had goodwill of $156.3 million and $136.4 million at September 30, 2019 and December 31, 2018, respectively. The Company recorded $19.8 million in goodwill from the Highlands merger in January 2019. The Company reviews its goodwill and intangible assets annually, on November 30, or more frequently if conditions warrant, for impairment. In testing goodwill for impairment, the Company compares the estimated fair value of its reporting unit to its carrying amount, including goodwill. The Company has determined that it has one reporting unit, Community Banking.

The Company had core deposit intangibles of $4.6 million and $1.8 million at September 30, 2019 and December 31, 2018, respectively. The Company recorded core deposit intangible of $3.7 million for the Highlands acquisition. The estimated future amortization expense for the remainder of 2019 and for each of the succeeding five years ended December 31 is as follows (in thousands):

For the Year Ended
2019	$	289
2020	1,025
2021	868
2022	711
2023	554
2024	425

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Investment Securities

9 Months Ended

Sep. 30, 2019

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:

	September 30, 2019									December 31, 2018
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
AVAILABLE FOR SALE
U.S. Treasury and U.S. government agencies	$	145,976	$	846	$	(492	)	$	146,330	$	143,495	$	—	$	(2,568	)	$	140,927
Mortgage-backed securities, residential	471,178		4,171		(1,341		)	474,008		434,208		779		(8,843		)	426,144
Mortgage-backed securities, multifamily	50,164		818		(92		)	50,890		21,087		67		(204		)	20,950
Obligations of states and political subdivisions	43,338		726		(20		)	44,044		45,951		140		(586		)	45,505
Debt securities	5,000		133		—			5,133		5,000		92		—			5,092
	$	715,656	$	6,694	$	(1,945	)	$	720,405	$	649,741	$	1,078	$	(12,201	)	$	638,618

	September 30, 2019									December 31, 2018
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
HELD TO MATURITY
U.S. government agencies	$	31,974	$	234	$	(18	)	$	32,190	$	33,025	$	—	$	(677	)	$	32,348
Mortgage-backed securities, residential	81,503		823		(148		)	82,178		75,859		169		(1,838		)	74,190
Mortgage-backed securities, multifamily	1,775		15		(5		)	1,785		1,853		—		(35		)	1,818
Obligations of states and political subdivisions	29,363		468		(30		)	29,801		37,909		113		(328		)	37,694
Debt securities	6,500		41		—			6,541		5,000		—		(118		)	4,882
	$	151,115	$	1,581	$	(201	)	$	152,495	$	153,646	$	282	$	(2,996	)	$	150,932

The following table lists contractual maturities of investment securities classified as available for sale and held to maturity as of September 30, 2019. 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.

	Available for Sale				Held to Maturity
(in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	29,607	$	29,610	$	7,751	$	7,751
Due after one year through five years	103,697		104,533		34,577		34,959
Due after five years through ten years	43,357		44,014		24,746		25,057
Due after ten years	17,653		17,350		763		765
	194,314		195,507		67,837		68,532
Mortgage-backed securities	521,342		524,898		83,278		83,963
Total securities	$	715,656	$	720,405	$	151,115	$	152,495

There were no sales of available for sale or held to maturity securities during the nine months ended September 30, 2019 and 2018.

Securities with a carrying value of approximately $576.2 million and $476.3 million at September 30, 2019 and December 31, 2018, 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 for the periods presented:

	Less Than 12 Months				12 Months or Longer				Total
(dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses
September 30, 2019
AVAILABLE FOR SALE
U.S. Treasury and U.S. government agencies	$	5,180	$	31	$	56,134	$	461	12	$	61,314	$	492
Mortgage-backed securities, residential	84,842		284		106,968		1,057		73	191,810		1,341
Mortgage-backed securities, multifamily	8,236		80		4,916		12		3	13,152		92
Obligations of states and political subdivisions	2,850		3		3,172		17		11	6,022		20
	$	101,108	$	398	$	171,190	$	1,547	99	$	272,298	$	1,945
HELD TO MATURITY
U.S. government agencies	$	3,799	$	6	$	5,129	$	12	2	$	8,928	$	18
Mortgage-backed securities, residential	3,984		6		13,516		142		14	17,500		148
Mortgage-backed securities, multifamily	—		—		1,007		5		1	1,007		5
Obligations of states and political subdivisions	—		—		5,170		30		1	5,170		30
	$	7,783	$	12	$	24,822	$	189	18	$	32,605	$	201

	Less Than 12 Months				12 Months or Longer				Total
(dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses
December 31, 2018
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

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:

• 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.

If the above factors indicate that 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 $15.6 million and $15.9 million at September 30, 2019 and December 31, 2018, 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. For the nine months ended September 30, 2019, the Company recorded proceeds from sales of equity securities of $1.2 million and recorded proceeds from sales of equity securities of $2.2 million for the nine months ended September 30, 2018. The Company recorded $525,000 in market value gains on equity securities in noninterest income for the nine months ended September 30, 2019, and $384,000 in market value losses on equity securities for the nine months ended September 30, 2018.

As of September 30, 2019, the market value of equity investments in other financial institutions was $1.8 million. The market value of the Community Reinvestment funds at September 30, 2019 was $13.7 million and includes $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 with 60 days notice at the net asset value less unpaid management fees with the approval of the fund manager. As of September 30, 2019, the net amortized cost equaled the market value of the investment. There are no unfunded commitments related to these investments.

The Community Reinvestment funds include $10.2 million that are primarily 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. 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 these investments.

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Comprehensive Income - Components of Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Before Tax Amount
Other comprehensive loss, net	$ 1,800	$ (2,807)	$ 15,065	$ (12,087)
Tax Benefit (Expense)
Other comprehensive loss, net	(398)	794	(4,017)	2,988
Net of Tax Amount
Other comprehensive income (loss)	1,402	(2,013)	11,048	(9,099)
Net unrealized gains (losses) on available for sale securities:
Before Tax Amount
Net unrealized holding gains (losses) arising during period	1,911	(2,816)	15,872	(12,521)
Reclassification adjustment for net gains arising during the period	0	0	0	0
Other comprehensive loss, net	1,911	(2,816)	15,872	(12,521)
Tax Benefit (Expense)
Net unrealized holding gains (losses) arising during period	(431)	797	(4,253)	3,080
Reclassification adjustment for net gains arising during the period	0	0	0	0
Other comprehensive loss, net	(431)	797	(4,253)	3,080
Net of Tax Amount
Net unrealized holding gains (losses) arising during period	1,480	(2,019)	11,619	(9,441)
Reclassification adjustment for net gains arising during the period	0	0	0	0
Other comprehensive income (loss)	1,480	(2,019)	11,619	(9,441)
Unrealized (losses) gains on derivatives
Before Tax Amount
Other comprehensive loss, net	(111)	9	(807)	434
Tax Benefit (Expense)
Other comprehensive loss, net	33	(3)	236	(92)
Net of Tax Amount
Other comprehensive income (loss)	$ (78)	$ 6	$ (571)	$ 342

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Estimated Fair Value of Financial Instruments and Fair Value Measurement - Additional Information (Detail) $ in Thousands	Sep. 30, 2019 USD ($)	Dec. 31, 2018 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Subordinate debt	$ 118,211	$ 105,027
Non-rated
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term municipal bond	902
Subordinate debt	$ 2,500
Measurement Input, Discount Rate [Member] | Minimum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input	0.05
Measurement Input, Discount Rate [Member] | Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input	0.11
Measurement Input, Cap Rate [Member] | Minimum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input	0.04
Measurement Input, Cap Rate [Member] | Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input	0.09

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Loans and Other Real Estate - Allowance for Loan and Lease Losses by Portfolio Segment (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Jun. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Dec. 31, 2017
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	$ 4,925,998		$ 4,460,447
Ending Balance: Individually evaluated for impairment, related allowance	226		338
Ending Balance	38,655	$ 38,662	37,688	$ 37,293	$ 36,604	$ 35,455
Loans and Leases
Financing Receivable, Recorded Investment, Past Due [Line Items]
Ending Balance: Individually evaluated for impairment	17,653		19,702
Ending Balance: Collectively evaluated for impairment	4,896,140		4,440,093
Ending Balance: Loans acquired with deteriorated credit quality	12,205		652
Total Loans	4,925,998		4,460,447
Ending Balance: Individually evaluated for impairment, related allowance	226		338
Ending Balance: Collectively evaluated for impairment, related allowance	38,429		37,350
Ending Balance	38,655		37,688
Commercial, secured by real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	3,442,973		3,057,779
Ending Balance: Individually evaluated for impairment, related allowance	201		307
Ending Balance	28,525	28,095	27,881	27,646	26,174	25,704
Commercial, secured by real estate | Loans and Leases
Financing Receivable, Recorded Investment, Past Due [Line Items]
Ending Balance: Individually evaluated for impairment	13,820		16,554
Ending Balance: Collectively evaluated for impairment	3,422,451		3,040,573
Ending Balance: Loans acquired with deteriorated credit quality	6,702		652
Total Loans	3,442,973		3,057,779
Ending Balance: Individually evaluated for impairment, related allowance	201		307
Ending Balance: Collectively evaluated for impairment, related allowance	28,324		27,574
Ending Balance	28,525		27,881
Commercial, industrial and other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	391,486		336,735
Ending Balance: Individually evaluated for impairment, related allowance	6		7
Ending Balance	2,458	2,633	1,742	1,968	2,012	2,313
Commercial, industrial and other | Loans and Leases
Financing Receivable, Recorded Investment, Past Due [Line Items]
Ending Balance: Individually evaluated for impairment	749		1,360
Ending Balance: Collectively evaluated for impairment	389,576		335,375
Ending Balance: Loans acquired with deteriorated credit quality	1,161		0
Total Loans	391,486		336,735
Ending Balance: Individually evaluated for impairment, related allowance	6		7
Ending Balance: Collectively evaluated for impairment, related allowance	2,452		1,735
Ending Balance	2,458		1,742
Equipment finance
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	104,689		87,925
Ending Balance: Individually evaluated for impairment, related allowance	11		14
Ending Balance	1,110	1,055	987	886	1,264	630
Equipment finance | Loans and Leases
Financing Receivable, Recorded Investment, Past Due [Line Items]
Ending Balance: Individually evaluated for impairment	25		331
Ending Balance: Collectively evaluated for impairment	104,664		87,594
Ending Balance: Loans acquired with deteriorated credit quality	0		0
Total Loans	104,689		87,925
Ending Balance: Individually evaluated for impairment, related allowance	11		14
Ending Balance: Collectively evaluated for impairment, related allowance	1,099		973
Ending Balance	1,110		987
Real estate - residential mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	337,482		329,854
Ending Balance: Individually evaluated for impairment, related allowance	3		4
Ending Balance	1,604	1,606	1,566	1,487	1,585	1,557
Real estate - residential mortgage | Loans and Leases
Financing Receivable, Recorded Investment, Past Due [Line Items]
Ending Balance: Individually evaluated for impairment	2,364		730
Ending Balance: Collectively evaluated for impairment	334,721		329,124
Ending Balance: Loans acquired with deteriorated credit quality	397		0
Total Loans	337,482		329,854
Ending Balance: Individually evaluated for impairment, related allowance	3		4
Ending Balance: Collectively evaluated for impairment, related allowance	1,601		1,562
Ending Balance	1,604		1,566
Real estate - construction
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	306,440		319,545
Ending Balance: Individually evaluated for impairment, related allowance	0		0
Ending Balance	2,561	2,708	3,015	2,901	3,063	2,731
Real estate - construction | Loans and Leases
Financing Receivable, Recorded Investment, Past Due [Line Items]
Ending Balance: Individually evaluated for impairment	0		0
Ending Balance: Collectively evaluated for impairment	303,016		319,545
Ending Balance: Loans acquired with deteriorated credit quality	3,424		0
Total Loans	306,440		319,545
Ending Balance: Individually evaluated for impairment, related allowance	0		0
Ending Balance: Collectively evaluated for impairment, related allowance	2,561		3,015
Ending Balance	2,561		3,015
Home equity and consumer
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	342,928		328,609
Ending Balance: Individually evaluated for impairment, related allowance	5		6
Ending Balance	2,397	$ 2,565	2,497	$ 2,405	$ 2,506	$ 2,520
Home equity and consumer | Loans and Leases
Financing Receivable, Recorded Investment, Past Due [Line Items]
Ending Balance: Individually evaluated for impairment	695		727
Ending Balance: Collectively evaluated for impairment	341,712		327,882
Ending Balance: Loans acquired with deteriorated credit quality	521		0
Total Loans	342,928		328,609
Ending Balance: Individually evaluated for impairment, related allowance	5		6
Ending Balance: Collectively evaluated for impairment, related allowance	2,392		2,491
Ending Balance	$ 2,397		$ 2,497

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Significant Accounting Policies

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Significant Accounting Policies

SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

This quarterly report presents the consolidated financial statements of Lakeland Bancorp, Inc. and its subsidiaries, including Lakeland Bank (“Lakeland”) and Lakeland’s wholly owned subsidiaries (collectively, the “Company”). The accounting and reporting policies of the Company conform with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and predominant practices within the banking industry. The Company’s unaudited interim financial statements reflect all adjustments, such as normal recurring accruals that are, in the opinion of management, necessary for the fair presentation of the results of the interim periods. The results of operations for the nine months ended September 30, 2019 do not necessarily indicate the results that the Company will achieve for all of 2019.

Certain information and footnote disclosures required under U.S. GAAP have been condensed or omitted, as permitted by rules and regulations of the Securities and Exchange Commission. These unaudited interim financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes that are presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. Certain reclassifications have been made in the consolidated financial statements to conform with current year classifications.

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Cover page - shares	9 Months Ended
	Sep. 30, 2019	Nov. 01, 2019
Cover page.
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2019
Document Transition Report	false
Entity File Number	000-17820
Entity Registrant Name	LAKELAND BANCORP, INC
Entity Incorporation, State or Country Code	NJ
Entity Tax Identification Number	22-2953275
Entity Address, Address Line One	250 Oak Ridge Road
Entity Address, City or Town	Oak Ridge
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	07438
City Area Code	973
Local Phone Number	697-2000
Title of 12(b) Security	Common Stock, no par value
Trading Symbol	LBAI
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		50,498,410
Amendment Flag	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Entity Central Index Key	0000846901
Current Fiscal Year End Date	--12-31

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Loans and Other Real Estate - Age Analysis of Past Due Loans, Segregated by Class of Loans (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 23,372	$ 12,022
Current	4,890,421	4,447,773
Total Loans	4,913,793	4,459,795
Recorded Investment Greater than 89 Days and Still Accruing	0	0
Commercial, secured by real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	13,822	4,196
Current	3,422,449	3,052,931
Total Loans	3,436,271	3,057,127
Recorded Investment Greater than 89 Days and Still Accruing	0	0
Commercial, industrial and other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	635	1,166
Current	389,690	335,569
Total Loans	390,325	336,735
Recorded Investment Greater than 89 Days and Still Accruing	0	0
Equipment finance
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	405	1,047
Current	104,284	86,878
Total Loans	104,689	87,925
Recorded Investment Greater than 89 Days and Still Accruing	0	0
Real estate - residential mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	4,287	2,630
Current	332,798	327,224
Total Loans	337,085	329,854
Recorded Investment Greater than 89 Days and Still Accruing	0	0
Real estate - construction
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	694	0
Current	302,322	319,545
Total Loans	303,016	319,545
Recorded Investment Greater than 89 Days and Still Accruing	0	0
Home equity and consumer
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	3,529	2,983
Current	338,878	325,626
Total Loans	342,407	328,609
Recorded Investment Greater than 89 Days and Still Accruing	0	0
30-59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	8,463	4,843
30-59 Days Past Due | Commercial, secured by real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	4,800	1,477
30-59 Days Past Due | Commercial, industrial and other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	29	173
30-59 Days Past Due | Equipment finance
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	41	533
30-59 Days Past Due | Real estate - residential mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,217	743
30-59 Days Past Due | Real estate - construction
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	694	0
30-59 Days Past Due | Home equity and consumer
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,682	1,917
60-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	2,430	1,222
60-89 Days Past Due | Commercial, secured by real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,898	639
60-89 Days Past Due | Commercial, industrial and other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	197	243
60-89 Days Past Due | Equipment finance
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	93	13
60-89 Days Past Due | Real estate - residential mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	166	111
60-89 Days Past Due | Real estate - construction
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
60-89 Days Past Due | Home equity and consumer
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	76	216
Greater Than 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	12,479	5,957
Greater Than 89 Days Past Due | Commercial, secured by real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	7,124	2,080
Greater Than 89 Days Past Due | Commercial, industrial and other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	409	750
Greater Than 89 Days Past Due | Equipment finance
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	271	501
Greater Than 89 Days Past Due | Real estate - residential mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	2,904	1,776
Greater Than 89 Days Past Due | Real estate - construction
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
Greater Than 89 Days Past Due | Home equity and consumer
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 1,771	$ 850

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Loans and Other Real Estate - Carrying value of the purchased credit impaired loans acquired in mergers (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Jan. 04, 2019	Dec. 31, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and debt securities acquired with deteriorated credit quality	$ 12,205		$ 652
Highlands Bancorp, Inc.
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and debt securities acquired with deteriorated credit quality	11,627	$ 13,800	0
Pascack Bancorp, Inc.
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and debt securities acquired with deteriorated credit quality	122		157
Harmony Bank
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and debt securities acquired with deteriorated credit quality	$ 456		$ 495

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Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Statement of Comprehensive Income [Abstract]
NET INCOME	$ 18,874	$ 16,758	$ 51,957	$ 47,851
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Unrealized gains (losses) on securities available for sale	1,480	(2,019)	11,619	(9,441)
Unrealized (losses) gains on derivatives	(78)	6	(571)	342
Other comprehensive income (loss)	1,402	(2,013)	11,048	(9,099)
TOTAL COMPREHENSIVE INCOME	$ 20,276	$ 14,745	$ 63,005	$ 38,752

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Goodwill and Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Estimated Future Amortization Expense

The estimated future amortization expense for the remainder of 2019 and for each of the succeeding five years ended December 31 is as follows (in thousands):

For the Year Ended
2019	$	289
2020	1,025
2021	868
2022	711
2023	554
2024	425

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- Acquisitions (Details) $ / shares in Units, $ in Thousands		3 Months Ended		9 Months Ended
	Jan. 04, 2019 USD ($) Branch $ / shares shares	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)
Business Acquisition [Line Items]
Merger related expenses		$ 0	$ 0	$ 3,178	$ 0
Highlands Bancorp, Inc.
Business Acquisition [Line Items]
Number of bank branches operated | Branch	4
Business acquisition, conversion, shares issued | shares	1.015
Consideration paid through common stock | shares	2,837,524
Stock option payout price per share (in dollars per share) | $ / shares	$ 14.71
Average strike price (in dollars per share) | $ / shares	$ 8.09
Cash paid for redemption of stock options	$ 797
Goodwill, period increase (decrease)				447,000
Identifiable intangible assets	$ 3,728
Useful life	10 years
Merger related expenses		$ 0		$ 3,200

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Revenue Recognition - Narrative (Details)	9 Months Ended
	Sep. 30, 2019 Region Segment
Revenue from Contract with Customer [Abstract]
Number of geographic regions | Region	1
Number of operating segments | Segment	1

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Derivatives

9 Months Ended

Sep. 30, 2019

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. Lakeland had $45.5 million and $498,000, respectively, in available for sale securities pledged for collateral on its interest rate swaps with the financial institution for September 30, 2019 and December 31, 2018.

In June 2016, the Company entered into two cash flow hedges in order to hedge the variable cash outflows associated with its subordinated debentures. The notional value of these hedges was $30.0 million. The Company’s objectives in using cash flow hedges are 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 nine months ended September 30, 2019, the Company did not record any hedge ineffectiveness. The Company recognized $334,000 and $227,000 of accumulated other comprehensive income that was reclassified into interest expense for the first nine months of 2019 and 2018, respectively.

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 $287,000 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):

September 30, 2019	Notional Amount		Average Maturity (Years)	Weighted Average Fixed Rate		Weighted Average Variable Rate	Fair  Value
Classified in Other Assets:
3rd Party interest rate swaps	$	6,468	4.0	3.78	%	1 Mo. LIBOR + 2.50%	$	26
Customer interest rate swaps	424,321		9.8	4.36	%	1 Mo. LIBOR + 1.96%	34,404
Interest rate swap (cash flow hedge)	30,000		1.8	1.10	%	3 Mo. LIBOR	292
Classified in Other Liabilities:
Customer interest rate swaps	$	6,468	4.0	3.78	%	1 Mo. LIBOR + 2.50%	$	(26	)
3rd Party interest rate swaps	424,321		9.8	4.36	%	1 Mo. LIBOR + 1.96%	(34,404		)

December 31, 2018	Notional  Amount		Average Maturity (Years)	Weighted  Average Fixed Rate		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		)

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Earnings Per Share

9 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

Earnings Per Share

EARNINGS PER SHARE

The following schedule shows the Company’s earnings per share calculations for the periods presented:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(in thousands, except per share data)	2019		2018		2019		2018
Net income available to common shareholders	$	18,874	$	16,758	$	51,957	$	47,851
Less: earnings allocated to participating securities	156		153		443		440
Net income allocated to common shareholders	$	18,718	$	16,605	$	51,514	$	47,411
Weighted average number of common shares outstanding - basic	50,553		47,605		50,447		47,570
Share-based plans	141		183		148		194
Weighted average number of common shares outstanding - diluted	50,694		47,788		50,595		47,764
Basic earnings per share	$	0.37	$	0.35	$	1.02	$	1.00
Diluted earnings per share	$	0.37	$	0.35	$	1.02	$	0.99

There were no antidilutive options to purchase common stock excluded from the computation for the three and nine months ended September 30, 2019 and 2018.

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Loans and Other Real Estate (Tables)

9 Months Ended

Sep. 30, 2019

Receivables [Abstract]

Composition of Company`s Loan and Lease Portfolio

The following sets forth the composition of the Company’s loan portfolio:

(in thousands)	September 30, 2019			December 31, 2018
Commercial, secured by real estate	$	3,442,973		$	3,057,779
Commercial, industrial and other	391,486			336,735
Equipment finance	104,689			87,925
Real estate - residential mortgage	337,482			329,854
Real estate - construction	306,440			319,545
Home equity and consumer	342,928			328,609
Total loans	4,925,998			4,460,447
Less: deferred fees	(2,584		)	(3,714		)
Loans, net of deferred fees	$	4,923,414		$	4,456,733

Schedule of Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period

The following is a summary of the credit impaired loans acquired in the Highlands acquisition as of the closing date.

(in thousands)
Contractually required principal and interest at acquisition	$	22,363
Contractual cash flows not expected to be collected (non-accretable difference)	7,129
Expected cash flows at acquisition	$	15,234
Interest component of expected cash flows (accretable difference)	1,431
Fair value of acquired loans	$	13,803

The following sets forth the carrying value of the purchased credit impaired ("PCI") loans acquired in mergers:

(in thousands)	September 30, 2019		December 31, 2018
Acquisition
Highlands	$	11,627	$	—
Pascack Community Bank ("Pascack")	122		157
Harmony Bank ("Harmony")	456		495
Total	$	12,205	$	652

Schedule of Changes in Accretable Yield

The following table presents changes in the accretable yield for PCI loans:

	For the Three Months Ended						For the Nine Months Ended
(in thousands)	September 30, 2019			September 30, 2018			September 30, 2019			September 30, 2018
Balance, beginning of period	$	1,191		$	100		$	81		$	129
Acquisitions	—			—			1,431			—
Accretion	(306		)	(58		)	(687		)	(145		)
Net reclassification non-accretable difference	16			41			76			99
Balance, end of period	$	901		$	83		$	901		$	83

Company's Non-Performing Assets and its Accruing Troubled Debt Restructurings, Excluding PCI Loans

The following schedule sets forth certain information regarding the Company’s non-performing assets and its accruing troubled debt restructurings, excluding PCI loans:

(in thousands)	September 30, 2019		December 31, 2018
Commercial, secured by real estate	$	9,164	$	7,192
Commercial, industrial and other	795		1,019
Equipment finance	271		501
Real estate - residential mortgage	3,250		1,986
Home equity and consumer	2,437		1,432
Total non-accrual loans	$	15,917	$	12,130
Other real estate and other repossessed assets	944		830
TOTAL NON-PERFORMING ASSETS	$	16,861	$	12,960
Troubled debt restructurings, still accruing	$	5,029	$	9,293

Age Analysis of Past Due Loans, Segregated by Class of Loans

An age analysis of past due loans, excluding PCI loans which are accounted for on a pool basis, segregated by class of loans as of September 30, 2019 and December 31, 2018, is as follows:

(in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater Than 89 Days Past Due		Total Past Due		Current		Total Loans		Recorded Investment  Greater than 89 Days and Still Accruing
September 30, 2019
Commercial, secured by real estate	$	4,800	$	1,898	$	7,124	$	13,822	$	3,422,449	$	3,436,271	$	—
Commercial, industrial and other	29		197		409		635		389,690		390,325		—
Equipment finance	41		93		271		405		104,284		104,689		—
Real estate - residential mortgage	1,217		166		2,904		4,287		332,798		337,085		—
Real estate - construction	694		—		—		694		302,322		303,016		—
Home equity and consumer	1,682		76		1,771		3,529		338,878		342,407		—
	$	8,463	$	2,430	$	12,479	$	23,372	$	4,890,421	$	4,913,793	$	—
December 31, 2018
Commercial, secured by real estate	$	1,477	$	639	$	2,080	$	4,196	$	3,052,931	$	3,057,127	$	—
Commercial, industrial and other	173		243		750		1,166		335,569		336,735		—
Equipment finance	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	$	5,957	$	12,022	$	4,447,773	$	4,459,795	$	—

Impaired Loans with and without Specific Allowances

Impaired loans as of September 30, 2019 and December 31, 2018 are as follows:

(in thousands)	Recorded Investment in Impaired  Loans		Contractual Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired  Loans		Interest Income Recognized
September 30, 2019
Loans without specific allowance:
Commercial, secured by real estate	$	10,886	$	11,457	$	—	$	10,399	$	157
Commercial, industrial and other	628		617		—		1,341		13
Equipment finance	—		—		—		—		—
Real estate - residential mortgage	1,678		1,672		—		75		—
Real estate - construction	—		—		—		—		—
Home equity and consumer	—		—		—		—		—
Loans with specific allowance:
Commercial, secured by real estate	2,934		3,162		201		4,088		128
Commercial, industrial and other	121		121		6		121		5
Equipment finance	25		25		11		25		2
Real estate - residential mortgage	686		855		3		698		15
Real estate - construction	—		—		—		—		—
Home equity and consumer	695		788		5		713		22
Total:
Commercial, secured by real estate	$	13,820	$	14,619	$	201	$	14,487	$	285
Commercial, industrial and other	749		738		6		1,462		18
Equipment finance	25		25		11		25		2
Real estate - residential mortgage	2,364		2,527		3		773		15
Real estate - construction	—		—		—		—		—
Home equity and consumer	695		788		5		713		22
	$	17,653	$	18,697	$	226	$	17,460	$	342

(in thousands)	Recorded Investment in Impaired  Loans		Contractual Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired  Loans		Interest Income Recognized
December 31, 2018
Loans without specific allowance:
Commercial, secured by real estate	$	9,284	$	9,829	$	—	$	7,369	$	188
Commercial, industrial and other	1,151		1,449		—		1,834		19
Equipment finance	301		597		—		376		—
Real estate - residential mortgage	—		—		—		242		4
Real estate - construction	—		—		—		726		—
Home equity and consumer	—		—		—		—		—
Loans with specific allowance:
Commercial, secured by real estate	7,270		7,597		307		7,594		317
Commercial, industrial and other	209		209		7		209		12
Equipment finance	30		30		14		19		—
Real estate - residential mortgage	730		884		4		745		20
Real estate - construction	—		—		—		—		—
Home equity and consumer	727		765		6		898		32
Total:
Commercial, secured by real estate	$	16,554	$	17,426	$	307	$	14,963	$	505
Commercial, industrial and other	1,360		1,658		7		2,043		31
Equipment finance	331		627		14		395		—
Real estate - residential mortgage	730		884		4		987		24
Real estate - construction	—		—		—		726		—
Home equity and consumer	727		765		6		898		32
	$	19,702	$	21,360	$	338	$	20,012	$	592

Company's Commercial Loan Portfolio

The following table shows the Company’s commercial loan portfolio as of September 30, 2019 and December 31, 2018, by the risk ratings discussed above (in thousands):

September 30, 2019	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Real Estate - Construction
RISK RATING
1	$	—	$	2,655	$	—
2	—		17,865		—
3	71,581		34,392		—
4	910,695		91,329		18,871
5	2,245,570		208,024		273,997
5W - Watch	103,619		24,302		8,487
6 - Other assets especially mentioned	50,155		3,805		967
7 - Substandard	61,353		9,114		4,118
8 - Doubtful	—		—		—
9 - Loss	—		—		—
Total	$	3,442,973	$	391,486	$	306,440

December 31, 2018	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Real Estate - Construction
RISK RATING
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

Allowance for Loan and Lease Losses by Portfolio Segment

The following table details activity in the allowance for loan losses by portfolio segment for the three and nine months ended September 30, 2019 and 2018:

(in thousands)	Commercial, Secured by Real Estate			Commercial, Industrial and Other			Equipment Finance		Real Estate- Residential Mortgage			Real Estate- Construction			Home Equity and Consumer			Total
Three Months Ended September 30, 2019
Beginning Balance	$	28,095		$	2,633		$	1,055	$	1,606		$	2,708		$	2,565		$	38,662
Charge-offs	(314		)	(425		)	—		—			—			(70		)	(809		)
Recoveries	72			32			—		55			39			68			266
Provision	672			218			55		(57		)	(186		)	(166		)	536
Ending Balance	$	28,525		$	2,458		$	1,110	$	1,604		$	2,561		$	2,397		$	38,655

(in thousands)	Commercial, Secured by Real Estate			Commercial, Industrial and Other			Equipment Finance			Real Estate- Residential Mortgage			Real Estate- Construction			Home Equity and Consumer			Total
Three Months Ended September 30, 2018
Beginning Balance	$	26,174		$	2,012		$	1,264		$	1,585		$	3,063		$	2,506		$	36,604
Charge-offs	(24		)	(151		)	(368		)	(38		)	—			(172		)	(753		)
Recoveries	135			177			2			2			4			76			396
Provision	1,361			(70		)	(12		)	(62		)	(166		)	(5		)	1,046
Ending Balance	$	27,646		$	1,968		$	886		$	1,487		$	2,901		$	2,405		$	37,293

(in thousands)	Commercial, Secured by Real Estate			Commercial, Industrial and Other			Equipment Finance			Real Estate- Residential Mortgage			Real Estate- Construction			Home Equity and Consumer			Total
Nine Months Ended September 30, 2019
Beginning Balance	$	27,881		$	1,742		$	987		$	1,566		$	3,015		$	2,497		$	37,688
Charge-offs	(501		)	(610		)	(380		)	(50		)	—			(197		)	(1,738		)
Recoveries	212			1,076			2			66			104			201			1,661
Provision	933			250			501			22			(558		)	(104		)	1,044
Ending Balance	$	28,525		$	2,458		$	1,110		$	1,604		$	2,561		$	2,397		$	38,655

(in thousands)	Commercial, Secured by Real Estate			Commercial, Industrial and Other			Equipment Finance			Real Estate- Residential Mortgage			Real Estate- Construction			Home Equity and Consumer			Total
Nine Months Ended September 30, 2018
Beginning Balance	$	25,704		$	2,313		$	630		$	1,557		$	2,731		$	2,520		$	35,455
Charge-offs	(256		)	(1,452		)	(463		)	(131		)	(248		)	(416		)	(2,966		)
Recoveries	440			273			7			7			12			243			982
Provision	1,758			834			712			54			406			58			3,822
Ending Balance	$	27,646		$	1,968		$	886		$	1,487		$	2,901		$	2,405		$	37,293

Loans Receivable Summarized by Portfolio Segment and Impairment Method

Loans receivable summarized by portfolio segment and impairment method are as follows:

(in thousands)	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Equipment Finance		Real Estate- Residential Mortgage		Real Estate- Construction		Home Equity and Consumer		Total
September 30, 2019
Ending Balance: Individually evaluated for impairment	$	13,820	$	749	$	25	$	2,364	$	—	$	695	$	17,653
Ending Balance: Collectively evaluated for impairment	3,422,451		389,576		104,664		334,721		303,016		341,712		4,896,140
Ending Balance: Loans acquired with deteriorated credit quality	6,702		1,161		—		397		3,424		521		12,205
Ending Balance (1)	$	3,442,973	$	391,486	$	104,689	$	337,482	$	306,440	$	342,928	$	4,925,998

(in thousands)	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Equipment Finance		Real Estate- Residential Mortgage		Real Estate- Construction		Home Equity and Consumer		Total
December 31, 2018
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

Allowance for Loan Losses Summarized by Portfolio Segment and Impairment Classification

The allowance for loan losses is summarized by portfolio segment and impairment classification as follows:

(in thousands)	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Equipment Finance		Real Estate- Residential Mortgage		Real Estate- Construction		Home Equity and Consumer		Total
September 30, 2019
Ending Balance: Individually evaluated for impairment	$	201	$	6	$	11	$	3	$	—	$	5	$	226
Ending Balance: Collectively evaluated for impairment	28,324		2,452		1,099		1,601		2,561		2,392		38,429
Ending Balance	$	28,525	$	2,458	$	1,110	$	1,604	$	2,561	$	2,397	$	38,655

(in thousands)	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Equipment Finance		Real Estate- Residential Mortgage		Real Estate- Construction		Home Equity and Consumer		Total
December 31, 2018
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

Summary of Restructured Loans

The following table summarizes loans that have been restructured during the three and nine months ended September 30, 2019 and 2018:

	For the Three Months Ended September 30, 2019					For the Three Months Ended September 30, 2018
(dollars in thousands)	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
Commercial, secured by real estate	—	$	—	$	—	1	$	1,175	$	1,175
Home equity and consumer	2	83		83		—	—		—
	2	83		83		1	1,175		1,175

	For the Nine Months Ended September 30, 2019					For the Nine Months Ended September 30, 2018
(dollars in thousands)	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
Commercial, secured by real estate	—	$	—	$	—	4	$	3,002	$	3,002
Commercial, industrial and other	—	—		—		1	950		950
Home equity and consumer	2	$	83	$	83	—	—		—
	2	$	83	$	83	5	$	3,952	$	3,952

Summary of Restructured Loans within Previous 12 Months that have Subsequently Defaulted

The following table summarizes as of September 30, 2019 and 2018, loans that were restructured within the previous twelve months that have subsequently defaulted:

	September 30, 2019			September 30, 2018
(dollars in thousands)	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
Commercial, secured by real estate	—	$	—	1	$	171
Home equity and consumer	2	$	83	—	$	—
	2	$	83	1	$	171

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Acquisitions - (Tables)

9 Months Ended

Sep. 30, 2019

Business Combinations [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table summarizes the estimated fair value of the acquired assets and liabilities assumed at the date of acquisition for Highlands.

(in thousands)
Cash and cash equivalents	$	13,454
Securities, available for sale	22,734
Federal Home Loan Bank stock	1,767
Loans held for sale	1,113
Loans	425,005
Premises and equipment	2,613
Goodwill	19,844
Identifiable intangible assets	3,728
Accrued interest receivable and other assets	6,244
Total assets acquired	496,502
Deposits	(409,638		)
Other borrowings	(27,800		)
Subordinated debt	(13,157		)
Other liabilities	(2,490		)
Total liabilities assumed	(453,085		)
Net assets acquired	$	43,417

Schedule of Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period

The following is a summary of the credit impaired loans acquired in the Highlands acquisition as of the closing date.

(in thousands)
Contractually required principal and interest at acquisition	$	22,363
Contractual cash flows not expected to be collected (non-accretable difference)	7,129
Expected cash flows at acquisition	$	15,234
Interest component of expected cash flows (accretable difference)	1,431
Fair value of acquired loans	$	13,803

The following sets forth the carrying value of the purchased credit impaired ("PCI") loans acquired in mergers:

(in thousands)	September 30, 2019		December 31, 2018
Acquisition
Highlands	$	11,627	$	—
Pascack Community Bank ("Pascack")	122		157
Harmony Bank ("Harmony")	456		495
Total	$	12,205	$	652

Business Acquisition, Pro Forma Information

	Pro Forma Nine Months Ended
(in thousands)	September 30, 2019		September 30, 2018
Net interest income	$	146,633	$	143,250
Provision for loan losses	1,044		4,219
Noninterest income	18,783		19,029
Noninterest expense	92,136		92,344
Net income	54,373		52,244
Earnings per share:
Fully diluted	$	1.07	$	1.03

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Comprehensive Income

9 Months Ended

Sep. 30, 2019

Equity [Abstract]

Comprehensive Income

COMPREHENSIVE INCOME

The components of other comprehensive income (loss) are as follows:

	For the Three Months Ended
	September 30, 2019									September 30, 2018
(in thousands)	Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount			Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount
Net unrealized gains (losses) on available for sale securities:
Net unrealized holding gains (losses) arising during period	$	1,911		$	(431	)	$	1,480		$	(2,816	)	$	797		$	(2,019	)
Reclassification adjustment for net gains arising during the period	—			—			—			—			—			—
Net unrealized gains (losses)	1,911			(431		)	1,480			(2,816		)	797			(2,019		)
Unrealized (losses) gains on derivatives	(111		)	33			(78		)	9			(3		)	6
Other comprehensive income (loss), net	$	1,800		$	(398	)	$	1,402		$	(2,807	)	$	794		$	(2,013	)

	For the Nine Months Ended
	September 30, 2019									September 30, 2018
(in thousands)	Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount			Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount
Net unrealized gains (losses) on available for sale securities:
Net unrealized holding gains (losses) arising during period	$	15,872		$	(4,253	)	$	11,619		$	(12,521	)	$	3,080		$	(9,441	)
Reclassification adjustment for net gains arising during the period	—			—			—			—			—			—
Net unrealized gains (losses)	15,872			(4,253		)	11,619			(12,521		)	3,080			(9,441		)
Unrealized (losses) gains on derivatives	(807		)	236			(571		)	434			(92		)	342
Other comprehensive income (loss), net	$	15,065		$	(4,017	)	$	11,048		$	(12,087	)	$	2,988		$	(9,099	)

The following tables show the changes in the balances of each of the components of other comprehensive income for the periods presented, net of tax:

	For the Three Months Ended September 30, 2019									For the Three Months Ended September 30, 2018
(in thousands)	Unrealized Gains (Losses) on Available for  Sale Securities		Unrealized Gains on Derivatives			Pension Items		Total		Unrealized Losses on Available for Sale Securities			Unrealized Gains  on Derivatives		Pension Items		Total
Beginning balance	$	1,357	$	410		$	41	$	1,808	$	(12,697	)	$	1,198	$	21	$	(11,478	)
Other comprehensive income (loss) before classifications	1,480		(78		)	—		1,402		(2,019		)	6		—		(2,013		)
Amounts reclassified from accumulated other comprehensive income	—		—			—		—		—			—		—		—
Net current period other comprehensive income (loss)	1,480		(78		)	—		1,402		(2,019		)	6		—		(2,013		)
Ending balance	$	2,837	$	332		$	41	$	3,210	$	(14,716	)	$	1,204	$	21	$	(13,491	)

	For the Nine Months Ended September 30, 2019											For the Nine Months Ended September 30, 2018
(in thousands)	Unrealized Gains (Losses) on Available for  Sale Securities			Unrealized Gains on Derivatives			Pension Items		Total			Unrealized Losses on Available for  Sale Securities			Unrealized Gains  on Derivatives		Pension Items		Total
Beginning balance	$	(8,782	)	$	903		$	41	$	(7,838	)	$	(3,232	)	$	862	$	21	$	(2,349	)
Adjustment for implementation of ASU 2016-01	—			—			—		—			(2,043		)	—		—		(2,043		)
Adjusted beginning balance	(8,782		)	903			41		(7,838		)	(5,275		)	862		21		(4,392		)
Other comprehensive income (loss) before classifications	11,619			(571		)	—		11,048			(9,441		)	342		—		(9,099		)
Amounts reclassified from accumulated other comprehensive income	—			—			—		—			—			—		—		—
Net current period other comprehensive income (loss)	11,619			(571		)	—		11,048			(9,441		)	342		—		(9,099		)
Ending balance	$	2,837		$	332		$	41	$	3,210		$	(14,716	)	$	1,204	$	21	$	(13,491	)

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Derivatives - Summary Information Regarding Derivatives (Detail) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
3rd Party interest rate swaps
Derivative [Line Items]
Other Assets, Notional Amount	$ 6,468	$ 153,909
Other Assets, Average Maturity (Years)	4 years	8 years 3 months 18 days
Other Assets, Wighted Average Fixed Rate	3.78%	4.10%
Other Assets, Weighted Average Variable Rate	1 Mo. LIBOR + 2.50%	1 Mo. LIBOR + 2.13%
Other Assets, Fair Value	$ 26	$ 5,329
Other Assets, Average Basis Spread On Variable Rate	2.24%	2.13%
Other Liabilities, Notional Amount	$ 424,321	$ 164,427
Other Liabilities, Average Maturity (Years)	9 years 9 months 18 days	12 years
Other Liabilities, Weighted Average Fixed Rate	4.36%	5.04%
Other Liabilities, Weighted Average Variable Rate	1 Mo. LIBOR + 1.96%	1 Mo. LIBOR + 2.05%
Other Liabilities, Fair Value	$ (34,404)	$ (5,707)
Other Liabilities, Average Basis Spread On Variable Rate	1.97%	2.05%
Customer interest rate swaps
Derivative [Line Items]
Other Assets, Notional Amount	$ 424,321	$ 164,427
Other Assets, Average Maturity (Years)	9 years 9 months 18 days	12 years
Other Assets, Wighted Average Fixed Rate	4.36%	5.04%
Other Assets, Weighted Average Variable Rate	1 Mo. LIBOR + 1.96%	1 Mo. LIBOR + 2.05%
Other Assets, Fair Value	$ 34,404	$ 5,707
Other Assets, Average Basis Spread On Variable Rate	1.97%	2.05%
Other Liabilities, Notional Amount	$ 6,468	$ 153,909
Other Liabilities, Average Maturity (Years)	4 years	8 years 3 months 18 days
Other Liabilities, Weighted Average Fixed Rate	3.78%	4.10%
Other Liabilities, Weighted Average Variable Rate	1 Mo. LIBOR + 2.50%	1 Mo. LIBOR + 2.13%
Other Liabilities, Fair Value	$ (26)	$ (5,329)
Other Liabilities, Average Basis Spread On Variable Rate	2.24%	2.13%
Interest rate swap (cash flow hedge)
Derivative [Line Items]
Other Assets, Notional Amount	$ 30,000	$ 30,000
Other Assets, Average Maturity (Years)	1 year 9 months 18 days	2 years 6 months
Other Assets, Wighted Average Fixed Rate	1.10%	1.10%
Other Assets, Weighted Average Variable Rate	3 Mo. LIBOR	3 Mo. LIBOR
Other Assets, Fair Value	$ 292	$ 1,099

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Leases - Schedule of Lease, Cost (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Leases [Abstract]
Operating lease cost	$ 819	$ 2,465
Short-term Lease, Cost	0	0
Variable lease cost	32	100
Sublease Income	(31)	(92)
Net lease cost	$ 820	$ 2,473

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Earnings Per Share - Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Earnings Per Share [Abstract]
Net income available to common shareholders	$ 18,874	$ 16,758	$ 51,957	$ 47,851
Less: earnings allocated to participating securities	156	153	443	440
Net income allocated to common shareholders	$ 18,718	$ 16,605	$ 51,514	$ 47,411
Weighted average number of common shares outstanding - basic (in shares)	50,553	47,605	50,447	47,570
Share-based plans (in shares)	141	183	148	194
Weighted average number of common shares outstanding - diluted (in shares)	50,694	47,788	50,595	47,764
Basic earnings per share (in usd per share)	$ 0.37	$ 0.35	$ 1.02	$ 1.00
Diluted earnings per share (in usd per share)	$ 0.37	$ 0.35	$ 1.02	$ 0.99

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Investment Securities - Summary of Contractual Maturities of Investment Securities Classified as Available for Sale and Held to Maturity (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Available for Sale, Amortized Cost
Due in one year or less	$ 29,607
Due after one year through five years	103,697
Due after five years through ten years	43,357
Due after ten years	17,653
Total	194,314
Total securities	715,656	$ 649,741
Available for Sale, Fair Value
Due in one year or less	29,610
Due after one year through five years	104,533
Due after five years through ten years	44,014
Due after ten years	17,350
Total	195,507
Total securities	720,405	638,618
Held to Maturity, Amortized Cost
Due in one year or less	7,751
Due after one year through five years	34,577
Due after five years through ten years	24,746
Due after ten years	763
Total	67,837
Investment securities held to maturity; fair value of $152,495 at September 30, 2019 and $150,932 at December 31, 2018	151,115	153,646
Held to Maturity, Fair Value
Due in one year or less	7,751
Due after one year through five years	34,959
Due after five years through ten years	25,057
Due after ten years	765
Total	68,532
Total securities	152,495	$ 150,932
Mortgage-backed securities
Available for Sale, Amortized Cost
Mortgage-backed securities	521,342
Available for Sale, Fair Value
Mortgage-backed securities	524,898
Held to Maturity, Amortized Cost
Mortgage-backed securities	83,278
Held to Maturity, Fair Value
Mortgage-backed securities	$ 83,963

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Loans and Other Real Estate - Composition of Company`s Loan and Lease Portfolio (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	$ 4,925,998	$ 4,460,447
Less: deferred fees	(2,584)	(3,714)
Loans, net of deferred fees	4,923,414	4,456,733
Commercial, secured by real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	3,442,973	3,057,779
Commercial, industrial and other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	391,486	336,735
Equipment finance
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	104,689	87,925
Real estate - residential mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	337,482	329,854
Real estate - construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	306,440	319,545
Home equity and consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	$ 342,928	$ 328,609