EX-99.1 3 dex991.htm PRESS RELEASE Press Release
 
FOR RELEASE:  Thursday January 16, 2003
   
CONTACT:
   
Roger Bosma
         
President & CEO
         
Joseph F. Hurley
EVP & CFO
973-697-2000
 
 
Lakeland Bancorp Reports a 31% increase in Fourth Quarter Net Income
 
Oak Ridge, NJ – January 16th, 2003 — Lakeland Bancorp, Inc. (NASDAQ: LBAI) reported fourth quarter net income of $4.0 million, or $0.28 per diluted share which was 31% higher than the $3.1 million or $0.21 per diluted share reported in fourth quarter last year. Return on Average Assets was 1.34% and Return on Average Equity was 17.89% for the fourth quarter 2002.
 
Net Income for the year ended December 31, 2002 was $10.1 million or $0.69 per diluted share including a $7.5 million additional provision for loan and lease losses relating to $16.0 million in commercial leases that are on a non-accrual status. Excluding the additional provision, net income would have been $14.7 million or $1.01 per diluted share, up 34% from the $11.0 million or $0.76 per diluted share reported for 2001.
 
Lakeland Bancorp also announced its quarterly cash dividend of $0.095 per common share. The cash dividend will be paid on February 14, 2003 to holders of record as of the close of business on January 31, 2003. After giving effect to the 5% stock dividend that the Company paid in November 2002, the $0.095 per share effectively represents a 5% increase in the amount paid to shareholders. All share amounts have been retroactively restated to reflect the 5% stock dividend.
 
Roger Bosma, Lakeland Bancorp’s President and CEO said, “Despite the additional provision recorded for the commercial leases in the third quarter, Lakeland’s core earnings in 2002 are up 34% from last year reflecting our strong deposit and loan growth. We continue to vigorously pursue our insurance claims relating to the commercial leases and believe that we have substantial and meritorious positions.”

-Continued-

 
Earnings
 
Net Interest Income
Net interest income for the fourth quarter of 2002 was $12.9 million or 19% higher than the $10.9 million earned in the fourth quarter of 2001 reflecting growth in interest earning assets. Net interest margin increased to 4.72% in the fourth quarter 2002 from 4.71% for the same period last year.
 
For the full year, net interest income was $48.2 million, or 19% higher than the $40.5 million reported for 2001. Net interest margin increased to 4.75% for the year ended December 31, 2002 from 4.69% for the same period last year.
 
Noninterest income
Noninterest income (exclusive of gains/losses on sales of investment securities) was $2.3 million in the fourth quarter 2002 which was $136,000 or 6% higher than the fourth quarter 2001. Commissions and fees increased to $494,000 in fourth quarter 2002 as a result of increased fees on construction loans and investment services commission income. Gains on sales of leases declined due to the decision to retain a larger amount of lease originations in the Company’s own portfolio.
 
For the entire year, noninterest income (exclusive of gains on sales of investment securities) increased from $8.3 million for 2001 to $9.0 million for 2002. Service charges on deposit accounts increased $423,000 or 8% to $5.9 million. Commissions and fees increased $499,000 or 35% to $1.9 million as a result of increases in loan fees and investment services commission income. Gains on sales of leases declined by $550,000 as a result of retaining a larger percentage of lease originations throughout 2002.
 
Noninterest expense
Noninterest expense for the fourth quarter of 2002 was $8.8 million as compared to $8.1 million in the fourth quarter of 2001, an increase of $685,000 or 8%. The bank’s efficiency ratio improved from 59% in the fourth quarter of 2001 to 56% in the fourth quarter of 2002 as revenue growth outpaced expense growth.
 
For the year, noninterest expense was $33.6 million compared to $31.2 million in 2001, an increase of $2.4 million or 8%. Of this increase, $1.2 million relates to increased salary and benefit costs. Occupancy expenses increased by $324,000 reflecting five new branch openings over the past two years. Stationery, supplies and postage expense decreased by $351,000, which reflects the outsourcing of statement rendering and higher 2001 costs due to the merger of our subsidiary banks.
 
Financial Condition
 
At December 31, 2002, total assets were $1.21 billion compared to $1.04 billion at year-end 2001, an increase of $163 million or 16%. Loans increased 20% from $600 million at year-end 2001 to $719 million at December 31, 2002 while deposits grew $147 million or 16% during the same time period.

Page 2 of 3

-Continued-

 
Loans
Loans have increased to $719 million in 2002, an increase of $119 million or 20% from year-end 2001. Although there has been an increase in all loan categories this year, the most substantial growth has been in consumer loans, which have increased to $234 million, an increase of $58 million or 33% from year-end. Commercial loans have increased $53 million or 20% to $314 million at December 31.
 
Asset Quality
At December 31, 2002, non-performing assets totaled $20 million (1.66% of total assets) including $16 million related to commercial lease pools and $4 million of other non-performing assets (0.33% of total assets). The Allowance for Loan and Lease Losses totaled $18 million at December 31, 2002 or 2.50% of total loans. Net charge-offs totaling $780,000 dropped to 0.12% of average loans from 0.41% on December 31, 2001.
 
Deposits
At December 31, 2002, total deposits were $1.06 billion, an increase of $147 million or 16% from December 31, 2001. Core deposits, which are defined as noninterest bearing deposits and savings and interest bearing transaction accounts, increased by $130 million or 19% to $808 million at December 31, 2002. Core deposits, as defined, represent 76% of total deposits as compared to 74% on December 31, 2001.
 
Capital
As of December 31, 2002, stockholders’ equity was $91 million and book value per common share was $6.38. The Company’s leverage ratio was 7.01%. Tier I and total risk based capital ratios were 10.94% and 12.21%, respectively. These regulatory capital ratios exceed those necessary to be considered a well-capitalized institution under Federal guidelines.
 
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 possible loan losses), 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 factors disclosed by the Company 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: pricing pressures on loan and deposit products; competition; changes in economic conditions nationally, regionally and in the Company’s markets; the extent and timing of actions of the Federal Reserve Board; changes in levels of market interest rates; clients’ acceptance of the Company’s products and services; credit risks of lending activities and competitive factors; whether or not the Company ultimately receives payment of all amounts due from the lease portfolio as described in Note 15-Commitments and Contingencies in Notes to the Consolidated Financial Statements contained in Form 10-K for the period ended December 31, 2001; and the extent and timing of legislative and regulatory actions and reforms.
 
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.

Page 3 of 3

 
Lakeland Bancorp, Inc.
Financial Highlights
(unaudited)
 
    
Three months ended
December 31,
     
Year ended
December 31,
  
    
2002
     
2001
     
2002
     
2001
  
    
(Dollars in thousands except per share amounts)
  
INCOME STATEMENT
                                    
Net Interest Income
   
$
12,883
 
   
$
10,870
 
   
$
48,174
 
   
$
40,492
 
Provision for Loan and Lease Losses
   
 
(750
)
   
 
(400
)
   
 
(10,500
)
   
 
(1,600
)
Noninterest Income
   
 
2,314
 
   
 
2,178
 
   
 
9,001
 
   
 
8,347
 
Gains (losses) on sales of investment securities
   
 
1
 
   
 
(92
)
   
 
876
 
   
 
(57
)
Noninterest Expense
   
 
(8,760
)
   
 
(8,075
)
   
 
(33,587
)
   
 
(31,206
)
    
  
  
  
Pretax Income
   
 
5,688
 
   
 
4,481
 
   
 
13,964
 
   
 
15,976
 
Tax Expense
   
 
(1,652
)
   
 
(1,395
)
   
 
(3,887
)
   
 
(4,953
)
    
  
  
  
Net Income
   
$
4,036
 
   
$
3,086
 
   
$
10,077
 
   
$
11,023
 
    
  
  
  
Basic Earnings Per Share
   
$
0.28
 
   
$
0.21
 
   
$
0.70
 
   
$
0.76
 
Diluted Earnings Per Share
   
$
0.28
 
   
$
0.21
 
   
$
0.69
 
   
$
0.76
 
Dividends per share
   
$
0.09
 
   
$
0.08
 
   
$
0.35
 
   
$
0.31
 
Weighted Average Shares—Basic
   
 
14,265,575
 
   
 
14,373,372
 
   
 
14,320,188
 
   
 
14,417,820
 
Weighted Average Shares—Diluted
   
 
14,551,623
 
   
 
14,607,226
 
   
 
14,586,706
 
   
 
14,592,310
 
SELECTED OPERATING RATIOS
                                    
Return on Average Assets
   
 
1.34
%
   
 
1.20
%
   
 
0.89
%
   
 
1.14
%
Return on Average Equity
   
 
17.89
%
   
 
14.36
%
   
 
11.29
%
   
 
13.37
%
Yield on Interest Earning Assets
   
 
6.21
%
   
 
7.69
%
   
 
6.41
%
   
 
7.26
%
Cost of funds
   
 
1.87
%
   
 
3.83
%
   
 
2.10
%
   
 
3.94
%
Net interest spread
   
 
4.34
%
   
 
3.86
%
   
 
4.31
%
   
 
3.32
%
Net interest margin
   
 
4.72
%
   
 
4.71
%
   
 
4.75
%
   
 
4.69
%
Efficiency ratio
   
 
56.30
%
   
 
59.10
%
   
 
57.50
%
   
 
61.70
%
Stockholders’ equity to total assets
                     
 
7.52
%
   
 
8.19
%
Book value per share
                     
$
6.38
 
   
$
5.96
 
Closing stock price
                     
$
17.87
 
   
$
15.52
 
ASSET QUALITY RATIOS
                                    
Ratio of net charge-offs to average loans
                     
 
0.12
%
   
 
0.41
%
Ratio of allowance to total loans
                     
 
2.50
%
   
 
1.37
%
Non-performing loans to total loans
                     
 
2.77
%
   
 
0.56
%
Non-performing assets to total assets
                     
 
1.66
%
   
 
0.37
%
Allowance to non-performing loans
                     
 
90
%
   
 
245
%
SELECTED BALANCE SHEET DATA AT PERIOD-END
                     
 
12/31/2002
 
   
 
12/31/2001
 
Loans
                     
$
718,676
 
   
$
600,074
 
Allowance for Loan and Lease Losses
                     
 
17,940
 
   
 
8,220
 
Investment Securities
                     
 
407,843
 
   
 
343,341
 
Total Assets
                     
 
1,207,105
 
   
 
1,044,338
 
Deposits
                     
 
1,059,092
 
   
 
912,110
 
Other Borrowings
                     
 
19,974
 
   
 
19,920
 
Long Term Debt
                     
 
31,000
 
   
 
21,000
 
Stockholders’ Equity
                     
 
90,767
 
   
 
85,567
 
                      
  
SELECTED AVERAGE BALANCE SHEET DATA
                            
    
For the quarter ended
     
For the year ended
  
    
12/31/2002
     
12/31/2001
     
12/31/2002
     
12/31/2001
  
Loans, net
   
$
707,022
 
   
$
586,666
 
   
$
666,952
 
   
$
558,027
 
Interest Earning Assets
   
 
1,111,260
 
   
 
939,924
 
   
 
1,041,048
 
   
 
888,020
 
Deposits
   
 
1,054,118
 
   
 
900,698
 
   
 
986,232
 
   
 
843,717
 
Total Assets
   
 
1,198,130
 
   
 
1,028,856
 
   
 
1,129,280
 
   
 
966,988
 
Stockholders’ Equity
   
 
89,487
 
   
 
85,968
 
   
 
89,295
 
   
 
82,452
 

 
Lakeland Bancorp, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
ASSETS
   
December 31, 2002
     
December 31, 2001
  
    
(dollars in thousands)
  
Cash and due from banks
   
$
35,465
 
   
$
48,615
 
Investment securities available for sale
   
 
361,760
 
   
 
273,082
 
Investment securities held to maturity; fair value of $48,436
                  
in 2002 and $72,101 in 2001
   
 
46,083
 
   
 
70,259
 
Loans:
                  
Commercial
   
 
314,378
 
   
 
261,101
 
Residential mortgages
   
 
170,039
 
   
 
162,569
 
Consumer and home equity
   
 
234,259
 
   
 
176,404
 
Total loans
   
 
718,676
 
   
 
600,074
 
Plus: deferred costs
   
 
982
 
   
 
1,885
 
Less: Allowance for loan and lease losses
   
 
17,940
 
   
 
8,220
 
Net loans
   
 
701,718
 
   
 
593,739
 
Premises and equipment—net
   
 
25,167
 
   
 
24,785
 
Accrued interest receivable
   
 
5,495
 
   
 
5,041
 
Other assets
   
 
31,417
 
   
 
28,817
 
TOTAL ASSETS
   
$
1,207,105
 
   
$
1,044,338
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
                  
LIABILITIES:
                  
Deposits:
                  
Noninterest bearing
   
$
214,110
 
   
$
206,783
 
Savings and interest-bearing transaction accounts
   
 
593,637
 
   
 
470,563
 
Time deposits under $100
   
 
180,257
 
   
 
184,011
 
Time deposits $100 and over
   
 
71,088
 
   
 
50,753
 
Total deposits
   
 
1,059,092
 
   
 
912,110
 
Federal funds purchased and securities sold under
                  
agreements to repurchase
   
 
19,974
 
   
 
19,920
 
Long-term debt
   
 
31,000
 
   
 
21,000
 
Other liabilities
   
 
6,272
 
   
 
5,741
 
TOTAL LIABILITIES
   
 
1,116,338
 
   
 
958,771
 
    
  
STOCKHOLDERS’ EQUITY
                  
Common stock, no par value; authorized shares, 40,000,000; issued
                  
shares, 14,671,093 at December 31, 2002 and December 31, 2001
   
 
101,664
 
   
 
88,273
 
Accumulated Deficit
   
 
(9,436
)
   
 
(931
)
Treasury stock, at cost, 442,497 shares at December 31, 2002 and
                  
306,414 at December 31, 2001
   
 
(5,881
)
   
 
(3,175
)
Accumulated other comprehensive income
   
 
4,420
 
   
 
1,400
 
TOTAL STOCKHOLDERS’ EQUITY
   
 
90,767
 
   
 
85,567
 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
   
$
1,207,105
 
   
$
1,044,338
 

 
Lakeland Bancorp, Inc. and Subsidiaries
CONSOLIDATED INCOME STATEMENTS
(Unaudited)
 
    
Three months Ended
December 31,
     
Year Ended
December 31,
  
    
2002
   
2001
     
2002
   
2001
  
    
(In thousands, except per share data)
  
INTEREST INCOME
                                
Loans and fees
   
$
12,642
   
$
11,118
 
   
$
47,076
   
$
44,286
 
Federal funds sold and interest bearing deposits with banks
   
 
96
   
 
161
 
   
 
357
   
 
802
 
Taxable investment securities
   
 
3,706
   
 
4,277
 
   
 
15,758
   
 
16,109
 
Tax-exempt investment securities
   
 
618
   
 
529
 
   
 
2,329
   
 
2,126
 
TOTAL INTEREST INCOME
   
 
17,062
   
 
16,085
 
   
 
65,520
   
 
63,323
 
INTEREST EXPENSE
                                
Deposits
   
 
3,698
   
 
4,842
 
   
 
15,462
   
 
21,231
 
Securities sold under agreements to repurchase
   
 
72
   
 
81
 
   
 
293
   
 
751
 
Long-term debt
   
 
409
   
 
292
 
   
 
1,591
   
 
849
 
TOTAL INTEREST EXPENSE
   
 
4,179
   
 
5,215
 
   
 
17,346
   
 
22,831
 
NET INTEREST INCOME
   
 
12,883
   
 
10,870
 
   
 
48,174
   
 
40,492
 
Provision for loan and lease losses
   
 
750
   
 
400
 
   
 
10,500
   
 
1,600
 
NET INTEREST INCOME AFTER PROVISION FOR
LOAN AND LEASE LOSSES
   
 
12,133
   
 
10,470
 
   
 
37,674
   
 
38,892
 
NONINTEREST INCOME
                                
Service charges on deposit accounts
   
 
1,564
   
 
1,572
 
   
 
5,940
   
 
5,517
 
Commissions and fees
   
 
494
   
 
408
 
   
 
1,927
   
 
1,428
 
Gains (losses) on sales of investment securities
   
 
1
   
 
(92
)
   
 
876
   
 
(57
)
Gains on sales of leases
   
 
36
   
 
105
 
   
 
176
   
 
726
 
Other income
   
 
220
   
 
93
 
   
 
958
   
 
676
 
TOTAL NONINTEREST INCOME
   
 
2,315
   
 
2,086
 
   
 
9,877
   
 
8,290
 
NONINTEREST EXPENSE
                                
Salaries and employee benefits
   
 
4,498
   
 
4,393
 
   
 
18,491
   
 
17,262
 
Net occupancy expense
   
 
879
   
 
811
 
   
 
3,370
   
 
3,046
 
Furniture and equipment
   
 
929
   
 
726
 
   
 
3,255
   
 
2,978
 
Stationery, supplies and postage
   
 
307
   
 
359
 
   
 
1,255
   
 
1,606
 
Other expenses
   
 
2,147
   
 
1,786
 
   
 
7,216
   
 
6,314
 
TOTAL NONINTEREST EXPENSE
   
 
8,760
   
 
8,075
 
   
 
33,587
   
 
31,206
 
INCOME BEFORE PROVISION FOR INCOME TAXES
   
 
5,688
   
 
4,481
 
   
 
13,964
   
 
15,976
 
Provision for income taxes
   
 
1,652
   
 
1,395
 
   
 
3,887
   
 
4,953
 
NET INCOME
   
$
4,036
   
$
3,086
 
   
$
10,077
   
$
11,023
 
EARNINGS PER COMMON SHARE
                                
Basic
   
$
0.28
   
$
0.21
 
   
$
0.70
   
$
0.76
 
Diluted
   
$
0.28
   
$
0.21
 
   
$
0.69
   
$
0.76
 
DIVIDENDS PER SHARE
   
$
0.09
   
$
0.08
 
   
$
0.35
   
$
0.31