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Loans and Other Real Estate (Tables)
 12 Months Ended
Dec. 31, 2019
Receivables [Abstract]  
Composition of Lakeland`s Loan and Lease Portfolio
The following sets forth the composition of Lakeland’s loan portfolio:
 
 
December 31,
(in thousands)
 
2019
 
2018
Commercial, secured by real estate
 
$
3,589,593

 
$
3,057,779

Commercial, industrial and other
 
431,934

 
336,735

Equipment finance
 
111,076

 
87,925

Real estate - residential mortgage
 
335,191

 
329,854

Real estate - construction
 
335,169

 
319,545

Home equity and consumer
 
337,977

 
328,609

Total loans
 
5,140,940

 
4,460,447

Less deferred fees
 
(3,117
)
 
(3,714
)
Loans, net of deferred fees
 
$
5,137,823

 
$
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 loans ("PCI") loans acquired in mergers:
 
December 31,
(in thousands)
2019
 
2018
Acquisition
 
 
 
  Highlands
$
8,194

 
$
—

  Pascack Community Bank
113

 
157

  Harmony Bank
441

 
495

     Total
$
8,748

 
$
652
Schedule of Changes in Accretable Yield
The following table presents changes in the accretable yield for PCI loans:
 
 
Years Ended December 31,
(in thousands)
 
2019
 
2018
Balance, beginning of period
 
$
81

 
$
129

Acquisitions
 
1,431

 
—

Accretion
 
(1,236
)
 
(182
)
Net reclassification non-accretable difference
 
87

 
134

Balance, end of period
 
$
363

 
$
81
Lakeland's Non-Accrual Loans and Leases and Its Accruing Troubled Debt Restructurings (TDRs)
The following schedule sets forth certain information regarding Lakeland’s non-accrual loans, its other real estate owned and other repossessed assets, and accruing troubled debt restructurings (“TDRs”):
 
 
At December 31,
(in thousands)
 
2019
 
2018
Commercial, secured by real estate
 
$
12,314

 
$
7,192

Commercial, industrial and other
 
1,539

 
1,019

Equipment finance
 
284

 
501

Real estate - residential mortgage
 
3,428

 
1,986

Real estate - construction
 
967

 
—

Home equity and consumer
 
2,606

 
1,432

Total non-accrual loans
 
21,138

 
12,130

Other real estate and other repossessed assets
 
563

 
830

Total non-performing assets
 
$
21,701

 
$
12,960

Troubled debt restructurings, still accruing
 
$
5,650

 
$
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 December 31, 2019 and 2018, is as follows:
December 31, 2019
 
30-59 Days
Past Due
 
60-89 Days
Past Due
 
Greater
Than
89 Days
 
Total
Past Due
 
Current
 
Total Loans

 
Recorded
Investment  Greater
than 89 Days and
Still  Accruing
(in thousands)
 
 
Commercial, secured by real estate
 
$
3,578

 
$
1,200

 
$
9,702

 
$
14,480

 
$
3,569,008

 
$
3,583,488

 
$
—

Commercial, industrial and other
 
353

 
71

 
1,064

 
1,488

 
429,502

 
430,990

 
—

Equipment finance
 
166

 
80

 
284

 
530

 
110,546

 
111,076

 
—

Real estate - residential mortgage
 
1,138

 
251

 
2,075

 
3,464

 
331,337

 
334,801

 
—

Real estate - construction
 
—

 
—

 
967

 
967

 
333,418

 
334,385

 
—

Home equity and consumer
 
1,573

 
287

 
1,533

 
3,393

 
334,059

 
337,452

 
—

 
 
$
6,808

 
$
1,889

 
$
15,625

 
$
24,322

 
$
5,107,870

 
$
5,132,192

 
$
—

December 31, 2018
 
30-59 Days
Past Due
 
60-89 Days
Past Due
 
Greater
Than
89 Days
 
Total
Past Due
 
Current
 
Total Loans
 
Recorded
Investment  Greater
than 89 Days and
Still  Accruing
(in thousands)
 
 
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 The following tables represent the Company's impaired loans at December 31, 2019, 2018 and 2017.
December 31, 2019
 
Recorded
Investment in
Impaired Loans
 
Contractual
Unpaid
Principal
Balance
 
Related
Allowance
 
Interest
Income
Recognized
 
Average
Investment in
Impaired Loans
(in thousands)
 
 
Loans without related allowance:
 
 
 
 
 
 
 
 
 
 
Commercial, secured by real estate
 
$
12,478

 
$
12,630

 
$
—

 
$
164

 
$
10,386

Commercial, industrial and other
 
1,391

 
1,381

 
—

 
16

 
1,334

Equipment finance
 
—

 
—

 
—

 
—

 
—

Real estate - residential mortgage
 
803

 
815

 
—

 
—

 
233

Real estate - construction
 
1,663

 
1,661

 
—

 
2

 
82

Home equity and consumer
 
—

 
—

 
—

 
—

 
—

Loans with related allowance:
 
 
 
 
 
 
 
 
 
 
Commercial, secured by real estate
 
3,470

 
3,706

 
228

 
190

 
4,554

Commercial, industrial and other
 
113

 
113

 
5

 
6

 
113

Equipment finance
 
23

 
23

 
10

 
—

 
21

Real estate - residential mortgage
 
1,512

 
1,682

 
104

 
19

 
926

Real estate - construction
 
—

 
—

 
—

 
—

 
—

Home equity and consumer
 
671

 
765

 
5

 
29

 
693

Total:
 
 
 
 
 
 
 
 
 
 
Commercial, secured by real estate
 
$
15,948

 
$
16,336

 
$
228

 
$
354

 
$
14,940

Commercial, industrial and other
 
1,504

 
1,494

 
5

 
22

 
1,447

Equipment finance
 
23

 
23

 
10

 
—

 
21

Real estate - residential mortgage
 
2,315

 
2,497

 
104

 
19

 
1,159

Real estate - construction
 
1,663

 
1,661

 
—

 
2

 
82

Home equity and consumer
 
671

 
765

 
5

 
29

 
693

 
 
$
22,124

 
$
22,776

 
$
352

 
$
426

 
$
18,342

December 31, 2018
 
Recorded
Investment in
Impaired Loans
 
Contractual
Unpaid
Principal
Balance
 
Related
Allowance
 
Interest
Income
Recognized
 
Average
Investment in
Impaired Loans
(in thousands)
 
 
Loans without related allowance:
 
 
 
 
 
 
 
 
 
 
Commercial, secured by real estate
 
$
9,284

 
$
9,829

 
$
—

 
$
188

 
$
7,369

Commercial, industrial and other
 
1,151

 
1,449

 
—

 
19

 
1,834

Equipment finance
 
301

 
597

 
—

 
—

 
376

Real estate - residential mortgage
 
—

 
—

 
—

 
4

 
242

Real estate - construction
 
—

 
—

 
—

 
—

 
726

Home equity and consumer
 
—

 
—

 
—

 
—

 
—

Loans with related allowance:
 
 
 
 
 
 
 
 
 
 
Commercial, secured by real estate
 
7,270

 
7,597

 
307

 
317

 
7,594

Commercial, industrial and other
 
209

 
209

 
7

 
12

 
209

Equipment finance
 
30

 
30

 
14

 
—

 
19

Real estate - residential mortgage
 
730

 
884

 
4

 
20

 
745

Real estate - construction
 
—

 
—

 
—

 
—

 
—

Home equity and consumer
 
727

 
765

 
6

 
32

 
898

Total:
 
 
 
 
 
 
 
 
 
 
Commercial, secured by real estate
 
$
16,554

 
$
17,426

 
$
307

 
$
505

 
$
14,963

Commercial, industrial and other
 
1,360

 
1,658

 
7

 
31

 
2,043

Equipment finance
 
331

 
627

 
14

 
—

 
395

Real estate - residential mortgage
 
730

 
884

 
4

 
24

 
987

Real estate - construction
 
—

 
—

 
—

 
—

 
726

Home equity and consumer
 
727

 
765

 
6

 
32

 
898

 
 
$
19,702

 
$
21,360

 
$
338

 
$
592

 
$
20,012

December 31, 2017
 
Recorded
Investment in
Impaired Loans
 
Contractual
Unpaid
Principal
Balance
 
Related
Allowance
 
Interest
Income
Recognized
 
Average
Investment in
Impaired Loans
(in thousands)
 
 
Loans without related allowance:
 
 
 
 
 
 
 
 
 
 
Commercial, secured by real estate
 
$
12,155

 
$
12,497

 
$
—

 
$
366

 
$
12,774

Commercial, industrial and other
 
618

 
618

 
—

 
25

 
618

Equipment finance
 
—

 
—

 
—

 
—

 
—

Real estate - residential mortgage
 
963

 
980

 
—

 
15

 
996

Real estate - construction
 
1,471

 
1,471

 
—

 
—

 
1,471

Home equity and consumer
 
—

 
—

 
—

 
—

 
6

Loans with related allowance:
 
 
 
 
 
 
 
 
 
 
Commercial, secured by real estate
 
5,381

 
5,721

 
454

 
206

 
5,029

Commercial, industrial and other
 
164

 
164

 
9

 
14

 
283

Equipment finance
 
65

 
65

 
30

 
—

 
29

Real estate - residential mortgage
 
781

 
919

 
4

 
27

 
940

Real estate - construction
 
—

 
—

 
—

 
—

 
—

Home equity and consumer
 
993

 
1,026

 
8

 
52

 
1,090

Total:
 
 
 
 
 
 
 
 
 
 
Commercial, secured by real estate
 
$
17,536

 
$
18,218

 
$
454

 
$
572

 
$
17,803

Commercial, industrial and other
 
782

 
782

 
9

 
39

 
901

Equipment finance
 
65

 
65

 
30

 
—

 
29

Real estate - residential mortgage
 
1,744

 
1,899

 
4

 
42

 
1,936

Real estate - construction
 
1,471

 
1,471

 
—

 
—

 
1,471

Home equity and consumer
 
993

 
1,026

 
8

 
52

 
1,096

 
 
$
22,591

 
$
23,461

 
$
505

 
$
705

 
$
23,236
Lakeland's Commercial Loan Portfolio
The following table shows Lakeland’s commercial loan portfolio as of December 31, 2019 and 2018, by the risk ratings discussed above:
December 31, 2019
 
Commercial,
Secured by
Real Estate
 
Commercial,
Industrial
and  Other
 
 
 
 
(in thousands)
 
Real Estate -
Construction
 
Total Commercial Loans
RISK RATING
 
 
 
 
 
 
 
 
1
 
$
—

 
$
898

 
$
—

 
$
898

2
 
—

 
17,988

 
—

 
17,988

3
 
74,072

 
39,112

 
—

 
113,184

4
 
965,825

 
107,376

 
17,941

 
1,091,142

5
 
2,332,863

 
215,975

 
307,824

 
2,856,662

5W - Watch
 
100,347

 
30,192

 
6,959

 
137,498

6 - Other assets especially mentioned
 
55,438

 
11,328

 
—

 
66,766

7 - Substandard
 
61,048

 
9,065

 
2,445

 
72,558

8 - Doubtful
 
—

 
—

 
—

 
—

9 - Loss
 
—

 
—

 
—

 
—

Total
 
$
3,589,593

 
$
431,934

 
$
335,169

 
$
4,356,696


December 31, 2018
 
Commercial,
Secured by
Real Estate
 
Commercial,
Industrial
and  Other
 
 
 
Total Commercial Loans
(in thousands)
 
Real Estate -
Construction
 
RISK RATING
 
 
 
 
 
 
 
 
1
 
$
—

 
$
1,119

 
$
—

 
$
1,119

2
 
—

 
18,462

 
—

 
18,462

3
 
69,995

 
36,367

 
—

 
106,362

4
 
933,577

 
91,145

 
17,375

 
1,042,097

5
 
1,910,423

 
168,474

 
297,625

 
2,376,522

5W - Watch
 
61,626

 
7,798

 
3,493

 
72,917

6 - Other assets especially mentioned
 
38,844

 
2,033

 
—

 
40,877

7 - Substandard
 
43,314

 
11,337

 
1,052

 
55,703

8 - Doubtful
 
—

 
—

 
—

 
—

9 - Loss
 
—

 
—

 
—

 
—

Total
 
$
3,057,779

 
$
336,735

 
$
319,545

 
$
3,714,059
Allowance for Loan and Lease Losses by Portfolio Segment and Related Recorded Investment in Loans and Leases
The following table details activity in the allowance for loan losses by portfolio segment and the related recorded investment in loans for the years ended December 31, 2019 and 2018:
December 31, 2019
 
Commercial,
Secured by
Real Estate
 
Commercial,
Industrial
and  Other
 
Equipment Finance
 
Real Estate -
Residential
Mortgage
 
Real Estate -
Construction
 
Home
Equity and
Consumer
 
Total
(in thousands)
 
 
Beginning balance
 
$
27,881

 
$
1,742

 
$
987

 
$
1,566

 
$
3,015

 
$
2,497

 
$
37,688

Charge-offs
 
(544
)
 
(645
)
 
(414
)
 
(50
)
 
—

 
(283
)
 
(1,936
)
Recoveries
 
251

 
1,100

 
332

 
66

 
126

 
246

 
2,121

Provision
 
1,362

 
1,092

 
52

 
143

 
(469
)
 
(50
)
 
2,130

Ending balance
 
$
28,950

 
$
3,289

 
$
957

 
$
1,725

 
$
2,672

 
$
2,410

 
$
40,003

Allowance for Loan Losses
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance: Individually evaluated for impairment
 
$
228

 
$
5

 
$
10

 
$
104

 
$
—

 
$
5

 
$
352

Ending balance: Collectively evaluated for impairment
 
28,722

 
3,284

 
947

 
1,621

 
2,672

 
2,405

 
39,651

Ending balance
 
$
28,950

 
$
3,289

 
$
957

 
$
1,725

 
$
2,672

 
$
2,410

 
$
40,003

Loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance: Individually evaluated for impairment
 
$
15,948

 
$
1,504

 
$
23

 
$
2,315

 
$
1,663

 
$
671

 
$
22,124

Ending balance: Collectively evaluated for impairment
 
3,567,540

 
429,486

 
111,053

 
332,486

 
332,722

 
336,781

 
5,110,068

Ending balance: Loans acquired with deteriorated credit quality
 
6,105

 
944

 
—

 
390

 
784

 
525

 
8,748

Ending balance (1)
 
$
3,589,593

 
$
431,934

 
$
111,076

 
$
335,191

 
$
335,169

 
$
337,977

 
$
5,140,940

(1)
Excludes deferred fees
December 31, 2018
 
Commercial,
Secured by
Real Estate
 
Commercial,
Industrial
and Other
 
Equipment Finance
 
Real Estate -
Residential
Mortgage
 
Real Estate -
Construction
 
Home
Equity and
Consumer
 
Total
(in thousands)
 
 
Beginning balance
 
$
25,704

 
$
2,313

 
$
630

 
$
1,557

 
$
2,731

 
$
2,520

 
$
35,455

Charge-offs
 
(421
)
 
(1,452
)
 
(507
)
 
(131
)
 
(248
)
 
(588
)
 
(3,347
)
Recoveries
 
468

 
317

 
23

 
10

 
17

 
332

 
1,167

Provision
 
2,130

 
564

 
841

 
130

 
515

 
233

 
4,413

Ending balance
 
$
27,881

 
$
1,742

 
$
987

 
$
1,566

 
$
3,015

 
$
2,497

 
$
37,688

Allowance for Loan Losses
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance: Individually evaluated for impairment
 
$
307

 
$
7

 
$
14

 
$
4

 
$
—

 
$
6

 
$
338

Ending balance: Collectively evaluated for impairment
 
27,574

 
1,735

 
973

 
1,562

 
3,015

 
2,491

 
37,350

Ending balance
 
$
27,881

 
$
1,742

 
$
987

 
$
1,566

 
$
3,015

 
$
2,497

 
$
37,688

Loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
Summary of Restructured Loans
The following table summarizes loans that have been restructured during the periods presented:
  
 
For the Year Ended December 31, 2019
 
For the Year Ended December 31, 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
 
—

 
$
—

 
$
—

 
5

 
$
3,348

 
$
3,348

Commercial, industrial and other
 
—

 
—

 
—

 
1

 
950

 
950

Equipment finance
 
—

 
—

 
—

 
1

 
15

 
15

Real estate - construction
 
1

 
694

 
694

 
—

 
—

 
—

Home equity and consumer
 
2

 
83

 
83

 
—

 
—

 
—

 
 
3

 
$
777

 
$
777

 
7

 
$
4,313

 
$
4,313
Summary of Restructured Loans within Previous 12 Months that have Subsequently Defaulted
The following table presents loans modified as TDRs within the previous twelve months from December 31, 2019 and 2018 that have defaulted during the subsequent twelve months:
  
 
For the Year Ended December 31, 2019
 
For the Year Ended December 31, 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
Summary of Future Minimum Lease Payments of Lease Receivables
Future minimum payments of equipment finance receivables at December 31, 2019 are expected as follows:
(in thousands)
 
2020
$
36,290

2021
30,448

2022
23,029

2023
14,767

2024
5,616

Thereafter
926

 
$
111,076