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		March 31, 2020
	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 May 1, 2020, there were 50,462,552 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 March 31, 2020 (unaudited) and December 31, 2019	3
	Consolidated Statements of Income for the Three Months Ended March 31, 2020 and 2019 (unaudited)	4
	Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2020 and 2019 (unaudited)	5
	Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2020 and 2019 (unaudited)	6
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2020 and 2019 (unaudited)	7
	Notes to Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44
Item 4.	Controls and Procedures	45
	Part II.     Other Information
Item 1.	Legal Proceedings	46
Item 1A.	Risk Factors	46
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47
Item 3.	Defaults Upon Senior Securities	47
Item 4.	Mine Safety Disclosures	47
Item 5.	Other Information	47
Item 6.	Exhibits	47
Signatures		48

2

PART I. FINANCIAL INFORMATION

Item 1.        Financial Statements

Lakeland Bancorp, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS

	March 31, 2020			December 31, 2019
(dollars in thousands)	(unaudited)
ASSETS
Cash	$	272,560		$	275,794
Interest-bearing deposits due from banks	13,076			6,577
Total cash and cash equivalents	285,636			282,371
Investment securities available for sale, at fair value	813,090			755,900
Equity securities, at fair value	16,902			16,473
Investment securities held to maturity; fair value of $119,023 at March 31, 2020 and $124,904 at December 31, 2019	115,752			123,975
Federal Home Loan Bank and other membership bank stock, at cost	28,575			22,505
Loans held for sale	3,098			1,743
Loans, net of deferred fees	5,328,623			5,137,823
Less: Allowance for loan losses	48,884			40,003
Net loans	5,279,739			5,097,820
Premises and equipment, net	47,618			47,608
Operating lease right-of-use assets	17,621			18,282
Accrued interest receivable	16,775			16,832
Goodwill	156,277			156,277
Other identifiable intangible assets	4,049			4,314
Bank owned life insurance	113,082			112,392
Other assets	115,694			54,744
TOTAL ASSETS	$	7,013,908		$	6,711,236
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest-bearing	$	1,129,695		$	1,124,121
Savings and interest-bearing transaction accounts	3,241,397			3,298,854
Time deposits $250 thousand and under	845,554			652,144
Time deposits over $250 thousand	238,492			218,660
Total deposits	5,455,138			5,293,779
Federal funds purchased and securities sold under agreements to repurchase	419,085			328,658
Other borrowings	140,715			165,816
Subordinated debentures	118,229			118,220
Operating lease liabilities	19,126			19,814
Other liabilities	124,693			59,686
TOTAL LIABILITIES	6,276,986			5,985,973
STOCKHOLDERS’ EQUITY
Common stock, no par value; authorized shares, 100,000,000; issued shares 50,592,673 and outstanding shares 50,461,638 at March 31, 2020 and issued and outstanding shares 50,498,410 at December 31, 2019	560,653			560,263
Retained earnings	168,780			162,752
Treasury shares, at cost, 131,035 shares at March 31, 2020 and no shares at December 31, 2019	(1,452		)	—
Accumulated other comprehensive income	8,941			2,248
TOTAL STOCKHOLDERS’ EQUITY	736,922			725,263
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	7,013,908		$	6,711,236

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 March 31,
(in thousands, except per share data)	2020			2019
INTEREST INCOME
Loans and fees	$	57,857		$	57,642
Federal funds sold and interest-bearing deposits with banks	159			254
Taxable investment securities and other	5,229			4,873
Tax-exempt investment securities	332			408
TOTAL INTEREST INCOME	63,577			63,177
INTEREST EXPENSE
Deposits	10,863			11,497
Federal funds purchased and securities sold under agreements to repurchase	429			608
Other borrowings	2,386			2,466
TOTAL INTEREST EXPENSE	13,678			14,571
NET INTEREST INCOME	49,899			48,606
Provision for loan losses	9,223			508
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	40,676			48,098
NONINTEREST INCOME
Service charges on deposit accounts	2,500			2,573
Commissions and fees	1,640			1,412
Income on bank owned life insurance	665			683
(Loss) gain on equity securities	(653		)	353
Gains on sales of loans	415			371
Gains on sales of investment securities, net	342			—
Swap income	2,843			199
Other income	259			132
TOTAL NONINTEREST INCOME	8,011			5,723
NONINTEREST EXPENSE
Salaries and employee benefits	20,235			19,231
Net occupancy expense	2,836			2,954
Furniture and equipment	2,560			2,116
FDIC insurance expense	298			450
Stationery, supplies and postage	399			447
Marketing expense	227			469
Data processing expense	1,253			1,327
Telecommunications expense	444			493
ATM and debit card expense	587			602
Core deposit intangible amortization	265			304
Other real estate and repossessed asset expense	12			86
Long-term debt prepayment fee	356			—
Merger related expenses	—			2,860
Other expenses	3,032			2,645
TOTAL NONINTEREST EXPENSE	32,504			33,984
Income before provision for income taxes	16,183			19,837
Provision for income taxes	3,791			4,211
NET INCOME	$	12,392		$	15,626
PER SHARE OF COMMON STOCK
Basic earnings	$	0.24		$	0.31
Diluted earnings	$	0.24		$	0.31
Dividends	$	0.125		$	0.115

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 March 31,
(in thousands)	2020			2019
NET INCOME	$	12,392		$	15,626
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Unrealized gains on securities available for sale	7,284			4,363
Reclassification for securities gains included in net income	(254		)	—
Unrealized losses on derivatives	(337		)	(214		)
Other comprehensive income	6,693			4,149
TOTAL COMPREHENSIVE INCOME	$	19,085		$	19,775

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 March 31, 2020 and 2019

(in thousands, except per share data)	Common Stock			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Total
January 1, 2019	$	514,703		$	116,874		$	—		$	(7,838	)	$	623,739
Cumulative adjustment for adoption of ASU 842	—			125			—			—			125
January 1, 2019, as adjusted	514,703			116,999			—			(7,838		)	623,864
Net income	—			15,626			—			—			15,626
Other comprehensive income, net of tax	—			—			—			4,149			4,149
Stock based compensation	696			—			—			—			696
Issuance of stock for Highlands acquisition	43,417			—			—			—			43,417
Retirement of restricted stock	(571		)	—			—			—			(571		)
Cash dividends on common stock of $0.115 per share	—			(5,838		)	—			—			(5,838		)
At March 31, 2019	$	558,245		$	126,787		$	—		$	(3,689	)	$	681,343
January 1, 2020	$	560,263		$	162,752		$	—		$	2,248		$	725,263
Net income	—			12,392			—			—			12,392
Other comprehensive income, net of tax	—			—			—			6,693			6,693
Purchase of treasury stock, 131,035 shares	—			—			(1,452		)	—			(1,452		)
Stock based compensation	847			—			—			—			847
Retirement of restricted stock	(457		)	—			—			—			(457		)
Cash dividends on common stock of $0.125 per share	—			(6,364		)	—			—			(6,364		)
At March 31, 2020	$	560,653		$	168,780		$	(1,452	)	$	8,941		$	736,922

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

6

Lakeland Bancorp, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	For the Three Months Ended March 31,
(in thousands)	2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	12,392		$	15,626
Adjustments to reconcile net income to net cash provided by operating activities:
Net amortization of premiums, discounts and deferred loan fees and costs	1,109			497
Depreciation and amortization	855			2,138
Amortization of intangible assets	265			304
Amortization of operating lease right-of-use assets	661			652
Provision for loan losses	9,223			508
Loans originated for sale	(14,634		)	(8,931		)
Proceeds from sales of loans held for sale	13,694			10,928
Gains on sales of securities	(342		)	—
Change in market value of equity securities	653			(353		)
Gains on sales of loans held for sale	(415		)	(371		)
Gains on other real estate and other repossessed assets	(86		)	(36		)
Losses on sales of premises and equipment	14			85
Long-term debt prepayment penalty	356			—
Stock-based compensation	847			696
Excess tax (deficiencies) benefits	(113		)	131
Increase in other assets	(64,307		)	(2,590		)
Increase in other liabilities	64,225			959
NET CASH PROVIDED BY OPERATING ACTIVITIES	24,397			20,243
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash acquired in acquisitions	—			13,454
Proceeds from repayments and maturities of available for sale securities	70,134			42,074
Proceeds from repayments and maturities of held to maturity securities	8,076			4,153
Proceeds from sales of equity securities	—			1,138
Proceeds from sales of available for sale securities	94,696			—
Purchase of available for sale securities	(213,062		)	(36,085		)
Purchase of held to maturity securities	—			(8,510		)
Purchase of equity securities	(1,082		)	(95		)
Proceeds from redemptions of Federal Home Loan Bank stock	41,450			25,792
Purchases of Federal Home Loan Bank stock	(47,520		)	(27,675		)
Net increase in loans	(191,014		)	(38,506		)
Proceeds from sales of other real estate and repossessed assets	649			253
Proceeds from dispositions and sales of premises and equipment	—			953
Purchases of premises and equipment	(1,605		)	(1,793		)
NET CASH USED IN INVESTING ACTIVITIES	(239,278		)	(24,847		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits	161,448			34,545
Increase in federal funds purchased and securities sold under agreements to repurchase	90,427			27,361
Repayments of other borrowings	(25,456		)	(33,133		)
Purchase of treasury stock	(1,452		)	—
Retirement of restricted stock	(457		)	(571		)
Dividends paid	(6,364		)	(5,838		)
NET CASH PROVIDED BY FINANCING ACTIVITIES	218,146			22,364
Net increase in cash and cash equivalents	3,265			17,760
Cash and cash equivalents, beginning of period	282,371			208,599
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	285,636		$	226,359

7

	For the Three Months Ended March 31,
(in thousands)	2020			2019
Supplemental schedule of non-cash investing and financing activities:
Cash paid during the period for income taxes	$	368		$	230
Cash paid during the period for interest	12,973			13,001
Transfer of loans into other repossessed assets and other real estate owned	(393		)	102
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	—			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.

8

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 three months ended March 31, 2020 do not necessarily indicate the results that the Company will achieve for all of 2020.

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/A for the year ended December 31, 2019. 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 have been 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.

During the second quarter of 2019, the Company revised the estimated fair value of the acquired assets as of the acquisition date as the result of additional information obtained. The adjustment related to credit-impaired loans acquired in the acquisition that were recorded at fair value and subsequently accounted for in accordance with Accounting Standards Codification ("ASC") Subtopic 310-30 and resulted in a $1.7 million increase in goodwill.

As a result of new information obtained during the third quarter of 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.

9

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

(in thousands)
Assets acquired:
Cash and cash equivalents	$	13,454
Securities, available for sale	21,234
Securities, held to maturity	1,500
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
Liabilities assumed:
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 months ended March 31, 2019, the Company incurred $2.9 million of merger and acquisition integration-related expenses, which have been separately stated in the Company's Consolidated Statements of Income. There were no merger or acquisition integration-related expenses in 2020.

10

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 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.

11

The following table sets forth the components of noninterest income for the three months ended March 31, 2020 and 2019:

	For the Three Months Ended March 31,
(in thousands)	2020			2019
Deposit Related Fees and Charges:
Debit card interchange income	$	1,223		$	1,218
Overdraft charges	953			996
ATM service charges	167			184
Demand deposit fees and charges	134			143
Savings service charges	23			32
Total	2,500			2,573
Commissions and Fees:
Loan fees	340			348
Wire transfer charges	308			267
Investment services income	523			352
Merchant fees	248			184
Commissions from sales of checks	83			103
Safe deposit income	86			91
Other income	51			61
Total	1,639			1,406
Gains on Sales of Loans	415			371
Other Income:
Gains on customer swap transactions	2,843			199
Title insurance (loss) income	(4		)	90
Other income	97			61
Total	2,936			350
Revenue not from contracts with customers	521			1,023
Total Noninterest Income	$	8,011		$	5,723
Timing of Revenue Recognition:
Products and services transferred at a point in time	7,471			4,681
Products and services transferred over time	19			19
Revenue not from contracts with customers	521			1,023
Total Noninterest Income	$	8,011		$	5,723

12

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 March 31,
(in thousands, except per share data)	2020		2019
Net income available to common shareholders	$	12,392	$	15,626
Less: earnings allocated to participating securities	102		141
Net income allocated to common shareholders	$	12,290	$	15,485
Weighted average number of common shares outstanding - basic	50,586		50,275
Share-based plans	142		167
Weighted average number of common shares outstanding - diluted	50,728		50,442
Basic earnings per share	$	0.24	$	0.31
Diluted earnings per share	$	0.24	$	0.31

There were no antidilutive options to purchase common stock excluded from the computation for the three months ended March 31, 2020 and 2019.

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:

	March 31, 2020									December 31, 2019
(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	$	155,853	$	1,807	$	(319	)	$	157,341	$	135,361	$	722	$	(436	)	$	135,647
Mortgage-backed securities, residential	461,700		13,156		(1,305		)	473,551		500,245		3,185		(1,551		)	501,879
Mortgage-backed securities, multifamily	53,026		1,500		(18		)	54,508		48,675		633		(123		)	49,185
Asset-backed securities	43,064		—		(1,951		)	41,113		—		—		—			—
Obligations of states and political subdivisions	77,353		1,023		(913		)	77,463		58,979		1,077		(35		)	60,021
Debt securities	9,000		114		—			9,114		9,000		168		—			9,168
	$	799,996	$	17,600	$	(4,506	)	$	813,090	$	752,260	$	5,785	$	(2,145	)	$	755,900

	March 31, 2020								December 31, 2019
(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	$	31,207	$	901	$	—	$	32,108	$	31,335	$	182	$	(8	)	$	31,509
Mortgage-backed securities, residential	70,999		2,162		—		73,161		76,229		734		(176		)	76,787
Mortgage-backed securities, multifamily	740		44		—		784		1,750		4		(2		)	1,752
Obligations of states and political subdivisions	10,306		164		—		10,470		12,161		195		—			12,356
Debt securities	2,500		—		—		2,500		2,500		—		—			2,500
	$	115,752	$	3,271	$	—	$	119,023	$	123,975	$	1,115	$	(186	)	$	124,904

13

The following table lists contractual maturities of investment securities classified as available for sale and held to maturity as of March 31, 2020. 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	$	90,556	$	90,722	$	6,796	$	6,831
Due after one year through five years	68,557		70,198		30,495		31,482
Due after five years through ten years	38,008		38,964		6,722		6,765
Due after ten years	45,085		44,034		—		—
	242,206		243,918		44,013		45,078
Mortgage-backed and asset-backed securities	557,790		569,172		71,739		73,945
Total securities	$	799,996	$	813,090	$	115,752	$	119,023

The following table shows proceeds from sales of available-for-sale securities, gross gains and gross losses on sales and calls of securities for the periods indicated:

	For the Three Months Ended March 31,
(in thousands)	2020			2019
Sales proceeds	$	94,696		$	—
Gross gains	569			—
Gross losses	(227		)	—

Gains or losses on sales of securities are based on the net proceeds and the adjusted carrying amount of the securities sold using the specific identification method.

Securities with a carrying value of approximately $640.3 million and $581.1 million at March 31, 2020 and December 31, 2019, respectively, were pledged to secure public deposits and for other purposes required by applicable laws and regulations.

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