10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark one)

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

For the quarterly period ended June 30, 2016

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)	(Zip Code)

(973) 697-2000

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report.)

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  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, any Interactive Data File required to be submitted and posted 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 and post such files).    Yes  x    No  ¨

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

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨	Smaller reporting Company	¨

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

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 July 29, 2016, there were 44,441,935 outstanding shares of Common Stock, no par value.

LAKELAND BANCORP, INC.

Form 10-Q Index

		PAGE
Part I. Financial Information
Item 1.	Financial Statements:
	Consolidated Balance Sheets - June 30, 2016 (unaudited) and December 31, 2015		3
	Consolidated Statements of Income - Unaudited Three and Six Months Ended June 30, 2016 and 2015		4
	Consolidated Statements of Comprehensive Income - Unaudited Three and Six Months Ended June 30, 2016 and 2015		5
	Consolidated Statements of Changes in Stockholders’ Equity - Unaudited Six Months Ended June 30, 2016		6
	Consolidated Statements of Cash Flows - Unaudited Six Months Ended June 30, 2016 and 2015		7
	Notes to Consolidated Financial Statements unaudited		8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		38
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		53
Item 4.	Controls and Procedures		54
Part II. Other Information
Item 1.	Legal Proceedings		56
Item 1A.	Risk Factors		56
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		56
Item 3.	Defaults Upon Senior Securities		56
Item 4.	Mine Safety Disclosures		56
Item 5.	Other Information		56
Item 6.	Exhibits		56
Signatures			57

The Securities and Exchange Commission maintains a web site which contains reports, proxy and information statements and other information relating to registrants that file electronically at the address: http:/ / www.sec.gov.

2

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements

Lakeland Bancorp, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS

	June 30, 2016		December 31,
	(unaudited)		2015
	(dollars in thousands, except share amounts)
ASSETS
Cash	$	146,306	$	113,894
Interest-bearing deposits due from banks		6,577		4,599
Total cash and cash equivalents		152,883		118,493
Investment securities available for sale, at fair value		460,390		442,349
Investment securities held to maturity; fair value of $129,447 at June 30, 2016 and $117,594 at December 31, 2015		126,221		116,740
Federal Home Loan Bank and other membership bank stock, at cost		15,797		14,087
Loans held for sale		6,463		1,233
Loans, net of deferred costs (fees)		3,451,382		2,965,200
Less: allowance for loan and lease losses		30,667		30,874
Net loans		3,420,715		2,934,326
Premises and equipment, net		49,322		35,881
Accrued interest receivable		10,480		9,208
Goodwill		125,285		109,974
Other identifiable intangible assets		2,728		1,545
Bank owned life insurance		66,212		65,361
Other assets		31,364		20,353
TOTAL ASSETS	$	4,467,860	$	3,869,550
LIABILITIES
Deposits:
Noninterest bearing	$	824,077	$	693,741
Savings and interest-bearing transaction accounts		2,235,918		1,958,510
Time deposits $250 thousand and under		359,471		270,623
Time deposits over $250 thousand		117,865		72,698
Total deposits		3,537,331		2,995,572
Federal funds purchased and securities sold under agreements to repurchase		123,662		151,234
Other borrowings		294,771		271,905
Subordinated debentures		31,238		31,238
Other liabilities		25,924		19,085
TOTAL LIABILITIES		4,012,926		3,469,034
STOCKHOLDERS’ EQUITY
Common stock, no par value; authorized shares, 70,000,000; issued 41,240,826 shares at June 30, 2016 and 37,906,481 shares at December 31, 2015		424,409		386,287
Retained earnings		23,836		13,079
Accumulated other comprehensive income		6,689		1,150
TOTAL STOCKHOLDERS’ EQUITY		454,934		400,516
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	4,467,860	$	3,869,550

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

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Lakeland Bancorp, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2016		2015		2016		2015
	(in thousands, except per share data)
INTEREST INCOME
Loans, leases and fees	$	35,800	$	28,211	$	69,921	$	56,107
Federal funds sold and interest-bearing deposits with banks		124		11		199		23
Taxable investment securities and other		2,696		2,688		5,658		5,362
Tax-exempt investment securities		417		398		830		808
TOTAL INTEREST INCOME		39,037		31,308		76,608		62,300
INTEREST EXPENSE
Deposits		2,404		1,346		4,609		2,629
Federal funds purchased and securities sold under agreements to repurchase		9		37		47		59
Other borrowings		1,522		1,256		3,000		2,425
TOTAL INTEREST EXPENSE		3,935		2,639		7,656		5,113
NET INTEREST INCOME		35,102		28,669		68,952		57,187
Provision for loan and lease losses		1,010		740		2,085		1,610
NET INTEREST INCOME AFTER
PROVISION FOR LOAN AND LEASE LOSSES		34,092		27,929		66,867		55,577
NONINTEREST INCOME
Service charges on deposit accounts		2,523		2,450		4,965		4,790
Commissions and fees		1,099		1,196		2,078		2,503
Gains on sales of investment securities		—		17		370		17
Gains on sales of loans		425		464		845		729
Income on bank owned life insurance		414		388		822		1,087
Other income		424		443		672		570
TOTAL NONINTEREST INCOME		4,885		4,958		9,752		9,696
NONINTEREST EXPENSE
Salaries and employee benefits		13,091		12,144		27,176		23,894
Net occupancy expense		2,341		2,273		5,029		4,821
Furniture and equipment		2,082		1,629		4,028		3,285
Stationery, supplies and postage		416		377		859		742
Marketing expense		385		416		694		656
FDIC insurance expense		681		531		1,271		1,049
Data processing expense		459		438		979		773
Telecommunications expense		386		358		810		703
ATM and debit card expense		383		382		729		724
Expenses on other real estate owned and other repossessed assets		26		27		65		19
Merger related expenses		685		—		2,406		—
Core deposit intangible amortization		164		107		331		218
Other expenses		2,616		2,513		4,762		4,353
TOTAL NONINTEREST EXPENSE		23,715		21,195		49,139		41,237
Income before provision for income taxes		15,262		11,692		27,480		24,036
Income tax expense		5,132		3,830		9,242		7,844
NET INCOME	$	10,130	$	7,862	$	18,238	$	16,192
PER SHARE OF COMMON STOCK
Basic earnings	$	0.24	$	0.21	$	0.44	$	0.42
Diluted earnings	$	0.24	$	0.21	$	0.44	$	0.42
Dividends	$	0.095	$	0.085	$	0.180	$	0.160

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 June 30,						For the Six Months Ended June 30,
	2016			2015			2016			2015
	(in thousands)
NET INCOME	$	10,130		$	7,862		$	18,238		$	16,192
OTHER COMPREHENSIVE INCOME, NET OF TAX:
Unrealized securities gains (losses) during period		1,697			(2,177	)		5,854			498
Reclassification for gains included in net income		—			(17	)		(233	)		(17	)
Unrealized losses on derivatives		(126	)		—			(126	)		—
Change in pension liability, net		6			5			44			10
Other comprehensive income (loss)		1,577			(2,189	)		5,539			491
TOTAL COMPREHENSIVE INCOME	$	11,707		$	5,673		$	23,777		$	16,683

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 Six Months Ended June 30, 2016
							Accumulated
							Other
	Common			Retained			Comprehensive
	Stock			Earnings			Income		Total
	(in thousands)
At January 1, 2016	$	386,287		$	13,079		$	1,150	$	400,516
Net Income		—			18,238			—		18,238
Other comprehensive income, net of tax		—			—			5,539		5,539
Stock based compensation		1,107			—			—		1,107
Issuance of stock for Pascack acquisition		37,221			—			—		37,221
Retirement of restricted stock		(206	)		—			—		(206	)
Cash dividends, common stock		—			(7,481	)		—		(7,481	)
At June 30, 2016	$	424,409		$	23,836		$	6,689	$	454,934

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 Six Months Ended June 30,
	2016			2015
	(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	18,238		$	16,192
Adjustments to reconcile net income to net cash provided by operating activities:
Net amortization of premiums, discounts and deferred loan fees and costs		1,794			2,009
Depreciation and amortization		1,847			1,914
Amortization of intangible assets		331			218
Provision for loan and lease losses		2,085			1,610
Loans originated for sale		(38,408	)		(34,649	)
Proceeds from sales of loans		34,023			32,622
Gains on sales of securities		(370	)		(17	)
Gains on sales of loans held for sale		(845	)		(729	)
Gains on other real estate and other repossessed assets		(90	)		(144	)
Losses on sales of premises and equipment		117			2
Stock-based compensation		1,107			912
Increase in other assets		(9,176	)		(3,535	)
Increase (decrease) in other liabilities		483			(281	)
NET CASH PROVIDED BY OPERATING ACTIVITIES		11,136			16,124
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash acquired in acquisition		40,942			—
Proceeds from repayments on and maturity of securities:
Available for sale		40,083			37,946
Held to maturity		13,156			8,804
Proceeds from sales of securities
Available for sale		15,654			11,472
Purchase of securities:
Available for sale		(61,705	)		(54,241	)
Held to maturity		(22,778	)		(24,245	)
Purchase of bank owned life insurance		—			(4,078	)
Proceeds from bank owned life insurance policy		—			772
Net decrease (increase) in Federal Home Loan Bank Stock		1,253			(2,933	)
Net increase in loans and leases		(170,698	)		(103,750	)
Proceeds from sales of other real estate and repossessed assets		758			853
Proceeds from dispositions and sales of premises and equipment		11			4
Capital expenditures		(1,648	)		(2,053	)
NET CASH USED IN INVESTING ACTIVITIES		(144,972	)		(131,449	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposits		237,564			52,204
(Decrease) increase in federal funds purchased and securities sold under agreements to repurchase		(27,572	)		37,314
Proceeds from other borrowings		4,921			70,230
Repayments of other borrowings		(39,000	)		(10,000	)
Excess tax benefits		—			59
Exercise of stock options		—			113
Retirement of restricted stock		(206	)		(250	)
Dividends paid		(7,481	)		(6,095	)
NET CASH PROVIDED BY FINANCING ACTIVITIES		168,226			143,575
Net increase in cash and cash equivalents		34,390			28,250
Cash and cash equivalents, beginning of period		118,493			109,316
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	152,883		$	137,566

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

7

Notes to Consolidated Financial Statements –Unaudited

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 the Bank’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 and six months ended June 30, 2016 do not necessarily indicate the results that the Company will achieve for all of 2016.

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. You should read these interim financial statements in conjunction with the audited consolidated financial statements and accompanying notes that are presented in the Lakeland Bancorp, Inc. Annual Report on Form 10-K for the year ended December 31, 2015.

Note 2. Acquisitions

Harmony Bank

On July 1, 2016, the Company completed its acquisition of Harmony Bank, a bank located in Ocean County, NJ. Effective upon the opening of business on July 1, 2016, Harmony was merged into Lakeland Bank. This merger allows the Company to expand its presence to Ocean County. The merger agreement provided that shareholders of Harmony would receive 1.25 shares of the Company common stock for each share of Harmony Bank common stock that they owned at the effective time of the merger. The Company issued an aggregate of approximately 3,201,109 shares of its common stock in the merger. Outstanding Harmony stock options were paid out in cash at the difference between $14.31 (Lakeland’s closing stock price on July 1, 2016 of $11.45 multiplied by 1.25) and the average strike price of $9.07 for a total cash payment of $869,000. As of the opening of business July 1, 2016, Harmony operated three branches in Ocean County, New Jersey, and had total assets, total loans, total deposits and total stockholders’ equity of $314 million, $261 million, $277 million, and $24 million, respectively. As the merger has not been completed as of June 30, 2016, the transaction is not reflected in the balance sheet or results of operations for the periods presented in this document.

Pascack Bancorp

On January 7, 2016, the Company completed its acquisition of Pascack Bancorp, Inc. (“Pascack”), a bank holding company headquartered in Waldwick, New Jersey. Pascack was the parent of Pascack Community Bank. This acquisition enables the Company to broaden its presence in Bergen and Essex counties. Effective as of the close of business on January 7, 2016, Pascack merged into the Company, and Pascack Community Bank merged into Lakeland Bank. The Merger Agreement provided that the shareholders of Pascack would receive, at their election, for each outstanding share of Pascack common stock that they own at the effective time of the merger, either 0.9576 shares of Lakeland Bancorp common stock or $11.35 in cash, subject to proration as described in the Merger Agreement, so that 90% of the aggregate merger consideration was shares of Lakeland Bancorp common stock and 10% was cash. Lakeland Bancorp issued an aggregate of 3,314,284 shares of its common stock in the merger and paid approximately $4.4 million in cash excluding the cash paid in connection with the cancellation of Pascack stock options. Outstanding Pascack stock options were paid out in cash at the difference between $11.35 and an average strike price of $7.37 for a total cash payment of $122,000. As of January 7, 2016, Pascack operated 8 branches in Bergen and Essex Counties in New Jersey, and had total assets, total loans, total deposits and total stockholders’ equity of $389.9 million, $320.9 million, $303.2 million and $26.9 million, respectively, before purchase accounting adjustments. This transaction resulted in $15.3 million of goodwill and generated $1.5 million in core deposit intangibles.

8

During the quarter ended June 30, 2016, 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 the fair market value of certain fixed assets which resulted in a $158,000 decrease in goodwill.

The acquisition was accounted for under the acquisition method of accounting and accordingly, assets acquired, liabilities assumed and consideration exchanged were recorded at their estimated fair values as of the acquisition date. Pascack’s assets were recorded at their preliminary estimated fair values as of January 7, 2016 and Pascack’s results of operations are 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. The following table summarizes the estimated fair value of the acquired assets and liabilities assumed at the date of acquisition for Pascack, net of cash consideration paid.

	On Janaury 7, 2016
	(in thousands)
Cash and cash equivalents	$	40,942
Securities held to maturity		3,925
Federal Home Loan Bank stock		2,962
Loans and leases		319,575
Premises and equipment		14,438
Goodwill		15,311
Identifiable intangible assets		1,514
Accrued interest receivable and other assets		6,672
Total assets acquired		405,339
Deposits		(304,466	)
Other borrowings		(57,308	)
Other liabilities		(6,344	)
Total liabilities assumed		(368,118	)
Net assets acquired	$	37,221

Loans acquired in the Pascack acquisition were recorded at fair value and subsequently accounted for in accordance with ASC Topic 310, and there was no carryover related allowance for loan and lease losses. The fair values of loans acquired from Pascack 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.

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The following is a summary of the loans acquired in the Pascack acquisition as of the closing date.

(in thousands)	Acquired Credit Impaired Loans		Acquired Non-Credit Impaired Loans		Total Acquired Loans
Contractually required principal and interest at acquisition	$	4,932	$	442,401	$	447,333
Contractual cash flows not expected to be collected (non-accretable difference)		4,030		—		4,030
Expected cash flows at acquisition	$	902	$	442,401	$	443,303
Interest component of expected cash flows (accretable difference)		85		123,643		123,728
Fair value of acquired loans	$	817	$	318,758	$	319,575

The core deposit intangible totaled $1.5 million and is being estimated over its estimated useful life of approximately 10 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 Pascack and Harmony acquisitions were expensed as incurred. During the six months ended June 30, 2016, the Company incurred $2.4 million of merger and acquisition integration-related expenses, 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 Pascack acquisition had been completed as of January 1, 2016, for the six months ended June 30, 2016 and as of January 1, 2015 for the six months ended June 30, 2015. 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 acquisition occurred as of the beginning of the periods presented, nor is it indicative of future results. Furthermore, the unaudited proforma 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 company to the Company’s policies that may have occurred as a result of the integration and consolidation of Pascack’s 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 Pascack since the acquisition because of the manner in which Pascack’s branches and lending team were immediately merged into Lakeland’s branches and lending team making such information impracticable to provide.

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(in thousands)	Pro-Forma June 30, 2016		Pro-Forma June 30, 2015
Net interest income	$	69,209	$	64,518
Provision for loan losses		2,085		1,610
Noninterest income		9,756		9,887
Noninterest expense		46,978		46,506
Net income		19,855		17,528
Earnings per share:
Fully diluted	$	0.48	$	0.42

Note 3. Earnings Per Share

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

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
(In thousands, except per share data)	2016		2015		2016		2015
Net income available to common shareholders	$	10,130	$	7,862	$	18,238	$	16,192
Less: earnings allocated to participating securities		106		68		162		120
Net income allocated to common shareholders	$	10,024	$	7,794	$	18,076	$	16,072
Weighted average number of common shares outstanding - basic		41,238		37,854		41,084		37,827
Share-based plans		168		134		161		134
Weighted average number of common shares outstanding - diluted		41,406		37,988		41,245		37,961
Basic earnings per share	$	0.24	$	0.21	$	0.44	$	0.42
Diluted earnings per share	$	0.24	$	0.21	$	0.44	$	0.42

There were no antidilutive options to purchase common stock to be excluded from the computation for the three and six months ended June 30, 2016.

Options to purchase 83,437 shares of common stock at a weighted average price of $12.29 per share were outstanding and were not included in the computations of diluted earnings per share for the three and six months ended June 30, 2015 because the exercise price was greater than the average market price.

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Note 4. Investment Securities

Available For Sale	June 30, 2016									December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)									(in thousands)
U.S. treasury and U.S. government agencies	$	90,746	$	2,034	$	—		$	92,780	$	97,617	$	190	$	(674	)	$	97,133
Mortgage-backed securities, residential		292,829		4,835		(119	)		297,545		280,018		1,717		(2,283	)		279,452
Mortgage-backed securities, multifamily		10,220		288		—			10,508		10,249		—		(129	)		10,120
Obligations of states and political subdivisions		39,225		1,390		(8	)		40,607		35,639		910		(51	)		36,498
Other debt securities		—		—		—			—		498		3		—			501
Equity securities		16,715		2,490		(255	)		18,950		16,550		2,393		(298	)		18,645
	$	449,735	$	11,037	$	(382	)	$	460,390	$	440,571	$	5,213	$	(3,435	)	$	442,349
Held to Maturity	June 30, 2016									December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)									(in thousands)
U.S. government agencies	$	26,589	$	974	$	—		$	27,563	$	30,477	$	289	$	(94	)	$	30,672
Mortgage-backed securities, residential		37,972		882		(33	)		38,821		36,466		411		(426	)		36,451
Mortgage-backed securities, multifamily		2,110		23		—			2,133		2,159		—		(60	)		2,099
Obligations of states and political subdivisions		57,534		1,370		(62	)		58,842		45,617		809		(156	)		46,270
Other debt securities		2,016		72		—			2,088		2,021		81		—			2,102
	$	126,221	$	3,321	$	(95	)	$	129,447	$	116,740	$	1,590	$	(736	)	$	117,594

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The following table shows investment securities by stated maturity. Securities backed by mortgages have expected maturities that differ from contractual maturities because borrowers have the right to call or prepay, and are, therefore, classified separately with no specific maturity date (in thousands):

			June 30, 2016
	Available for Sale				Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	2,389	$	2,405	$	20,956	$	20,924
Due after one year through five years		73,837		75,555		23,854		24,629
Due after five years through ten years		48,059		49,516		34,112		35,442
Due after ten years		5,686		5,911		7,217		7,498
		129,971		133,387		86,139		88,493
Mortgage-backed securities		303,049		308,053		40,082		40,954
Equity securities		16,715		18,950		—		—
Total securities	$	449,735	$	460,390	$	126,221	$	129,447

The following table shows proceeds from sales of securities and gross gains on sales of securities for the periods indicated (in thousands):

	For the Three Months Ended					For the Six Months Ended
	June 30,					June 30,
	2016		2015			2016		2015
Sale proceeds	$	—	$	11,472		$	15,654	$	11,472
Gross gains		—		28			370		28
Gross losses		—		(11	)		—		(11	)

There were no other-than-temporary impairments for the six months ended June 30, 2016 or 2015.

Gains or losses on sales of investment 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 $357.0 million and $347.7 million at June 30, 2016 and December 31, 2015, respectively, were pledged to secure public deposits and for other purposes required by applicable laws and regulations.

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The following table indicates the length of time individual securities have been in a continuous unrealized loss position at June 30, 2016 and December 31, 2015:

June 30, 2016	Less than 12 months				12 months or longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Number of Securities		Fair Value		Unrealized Losses
	(in thousands)
Available for Sale
Mortgage-backed securities, residential	$	5,089	$	22	$	16,727	$	97		14	$	21,816	$	119
Obligations of states and political subdivisions		888		8		—		—		1		888		8
Equity securities		234		42		4,774		213		2		5,008		255
	$	6,211	$	72	$	21,501	$	310		17	$	27,712	$	382
Held to Maturity
Mortgage-backed securities, residential	$	2,291	$	10	$	1,121	$	23		3	$	3,412	$	33
Obligations of states and political subdivisions		15,204		61		752		1		13		15,956		62
	$	17,495	$	71	$	1,873	$	24		16	$	19,368	$	95
December 31, 2015	Less than 12 months				12 months or longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Number of Securities		Fair Value		Unrealized Losses
	(in thousands)
Available for Sale
U.S. treasury and U.S. government agencies	$	80,192	$	674	$	—	$	—		16	$	80,192	$	674
Mortgage-backed securities, residential		103,749		1,043		50,095		1,240		50		153,844		2,283
Mortgage-backed securities, multifamily		10,120		129		—		—		2		10,120		129
Obligations of states and political subdivisions		2,051		4		1,466		47		7		3,517		51
Other debt securities		—		—		—		—		—		—		—
Equity securities		247		24		4,643		274		3		4,890		298
	$	196,359	$	1,874	$	56,204	$	1,561		78	$	252,563	$	3,435
Held to Maturity
U.S. government agencies	$	15,683	$	94	$	—	$	—		3	$	15,683	$	94
Mortgage-backed securities, residential		20,283		262		6,687		164		11		26,970		426
Mortgage-backed securities, multifamily		1,223		18		876		42		2		2,099		60
Obligations of states and political subdivisions		9,181		149		2,043		7		15		11,224		156
	$	46,370	$	523	$	9,606	$	213		31	$	55,976	$	736

Management has evaluated the securities in the above table and has concluded that none of the securities are other-than-temporarily impaired. The cause of the fair values being below cost is due to interest rate movements and is deemed temporary. All investment securities are evaluated on a periodic basis to identify any factors that would require a 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;

14

• 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 and consider the results of a discounted cash flow analysis.

As of June 30, 2016, the equity securities include investments in equity stocks and investments in investment funds that use net asset value per share to measure fair value. The equity stocks represent investments in other financial institutions for market appreciation purposes. Those equities had a purchase price of $2.7 million and a market value of $5.0 million as of June 30, 2016.

The investment funds include $2.9 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 June 30, 2016, the net amortized cost equaled the market value of the investment. There are no unfunded commitments related to this investment.

The investment funds also include $11.0 million that are invested in government guaranteed loans, mortgage-backed securities, small business loans and other instruments supporting affordable housing and economic development. The Company may redeem these funds at the net asset value calculated at the end of the current business day less any unpaid management fees. As of June 30, 2016, the amortized cost of these securities was $11.0 million and the fair value was $11.0 million. There are no restrictions on redemptions for the holdings in these investments other than the notice required by the fund manager. There are no unfunded commitments related to this investment.

Note 5. Loans, Leases and Other Real Estate

The following sets forth the composition of the Company’s loan and lease portfolio as of June 30, 2016 and December 31, 2015:

	June 30, 2016			December 31, 2015
	(in thousands)
Commercial, secured by real estate	$	2,200,147		$	1,761,589
Commercial, industrial and other		313,062			307,044
Leases		63,338			56,660
Real estate - residential mortgage		383,823			389,692
Real estate - construction		152,978			118,070
Home equity and consumer		340,956			334,891
Total loans		3,454,304			2,967,946
Less: deferred fees		(2,922	)		(2,746	)
Loans, net of deferred fees	$	3,451,382		$	2,965,200

At June 30, 2016 and December 31, 2015, home equity and consumer loans included overdraft deposit balances of $512,000 and $705,000, respectively. At June 30, 2016 and December 31, 2015, the Company had $807.0 million and $738.7 million in loans pledged for actual and potential borrowings at the Federal Home Loan Bank of New York (“FHLB”).

15

The carrying value of loans acquired in the Pascack acquisition and accounted for in accordance with ASC Subtopic 310-30, “Loans and Debt Securities Acquired with Deteriorated Credit Quality,” was $0.8 million at June 30, 2016, which was substantially the same as the balance at the Pascack acquisition date of January 7, 2016. Under ASC Subtopic 310-30, these loans, referred to as purchased credit impaired (“PCI”) loans, may be aggregated and accounted for as pools of loans if the loans being aggregated have common risk characteristics. The Company elected to account for the loans with evidence of credit deterioration individually rather than aggregate them into pools. The difference between the undiscounted cash flows expected at acquisition and the investment in the acquired loans, or the “accretable yield,” is recognized as interest income utilizing the level-yield method over the life of each loan. Contractually required payments for interest and principal that exceed the undiscounted cash flows expected at acquisition, or the “non-accretable difference,” are not recognized as a yield adjustment, as a loss accrual or as a valuation allowance.

Increases in expected cash flows subsequent to the acquisition are recognized prospectively through an adjustment of the yield on the loans over the remaining life, while decreases in expected cash flows are recognized as impairments through a loss provision and an increase in the allowance for loan and lease losses. Valuation allowances (recognized in the allowance for loan and lease losses) on these impaired loans reflect only losses incurred after the acquisition (representing all cash flows that were expected at acquisition but currently are not expected to be received).

There were no material increases or decreases in the expected cash flows between acquisition date and June 30, 2016. The Company recognized $31,000 of interest income on the credit impaired loans acquired.

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)	June 30, 2016		December 31, 2015
Commercial, secured by real estate	$	12,554	$	10,446
Commercial, industrial and other		41		103
Leases		159		316
Real estate - residential mortgage		8,865		8,664
Home equity and consumer		3,325		3,167
Total non-accrual loans and leases	$	24,944	$	22,696
Other real estate and other repossessed assets		1,594		983
TOTAL NON-PERFORMING ASSETS	$	26,538	$	23,679
Troubled debt restructurings, still accruing	$	9,509	$	10,108

Non-accrual loans included $2.4 million and $2.5 million of troubled debt restructurings as of June 30, 2016 and December 31, 2015, respectively. As of June 30, 2016 and December 31, 2015, the Company had $7.0 million and $7.9 million, respectively, in residential mortgages and consumer home equity loans that were in the process of foreclosure.

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An age analysis of past due loans, segregated by class of loans as of June 30, 2016 and December 31, 2015, is as follows:

					Greater								Recorded
					Than						Total		Investment Greater
	30-59 Days		60-89 Days		89 Days		Total				Loans		than 89 Days and
	Past Due		Past Due		Past Due		Past Due		Current		and Leases		Still Accruing
					(in thousands)
June 30, 2016
Commercial, secured by real estate	$	5,357	$	4,150	$	9,269	$	18,776	$	2,181,371	$	2,200,147	$	—
Commercial, industrial and other		792		213		136		1,141		311,921		313,062		—
Leases		145		25		159		329		63,009		63,338		—
Real estate - residential mortgage		2,168		1,263		6,906		10,337		373,486		383,823		—
Real estate - construction		—		—		—		—		152,978		152,978		—
Home equity and consumer		650		146		2,568		3,364		337,592		340,956		42
	$	9,112	$	5,797	$	19,038	$	33,947	$	3,420,357	$	3,454,304	$	42
December 31, 2015
Commercial, secured by real estate	$	1,465	$	693	$	7,853	$	10,011	$	1,751,578	$	1,761,589	$	—
Commercial, industrial and other		205		—		103		308		306,736		307,044		—
Leases		62		26		316		404		56,256		56,660		—
Real estate—residential mortgage		1,361		725		7,472		9,558		380,134		389,692		—
Real estate—construction		—		—		—		—		118,070		118,070		—
Home equity and consumer		876		141		3,498		4,515		330,376		334,891		331
	$	3,969	$	1,585	$	19,242	$	24,796	$	2,943,150	$	2,967,946	$	331

Impaired Loans

The Company defines impaired loans as all non-accrual loans and leases with recorded investments of $500,000 or greater. Impaired loans also includes all loans modified in troubled debt restructurings. Impaired loans as of June 30, 2016 and December 31, 2015 are as follows:

			Contractual
	Recorded		Unpaid				Interest		Average
	Investment in		Principal		Specific		Income		Investment in
June 30, 2016	Impaired Loans		Balance		Allowance		Recognized		Impaired Loans
	(in thousands)
Loans without specific allowance:
Commercial, secured by real estate	$	12,615	$	13,090	$	—	$	116	$	13,015
Commercial, industrial and other		95		95		—		2		96
Leases		—		—		—		—		—
Real estate - residential mortgage		3,129		3,146		—		8		2,084
Real estate - construction		—		—		—		—		—
Home equity and consumer		537		537		—		—		545
Loans with specific allowance:
Commercial, secured by real estate		7,630		8,143		493		145		6,924
Commercial, industrial and other		916		916		43		20		938
Leases		—		—		—		—		3
Real estate - residential mortgage		934		1,008		31		15		938
Real estate - construction		—		—		—		—		—
Home equity and consumer		1,247		1,406		103		30		1,201
Total:
Commercial, secured by real estate	$	20,245	$	21,233	$	493	$	261	$	19,939
Commercial, industrial and other		1,011		1,011		43		22		1,034
Leases		—		—		—		—		3
Real estate - residential mortgage		4,063		4,154		31		23		3,022
Real estate - construction		—		—		—		—		—
Home equity and consumer		1,784		1,943		103		30		1,746
	$	27,103	$	28,341	$	670	$	336	$	25,744

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			Contractual
	Recorded		Unpaid				Interest		Average
	Investment in		Principal		Specific		Income		Investment in
December 31, 2015	Impaired Loans		Balance		Allowance		Recognized		Impaired Loans
	(in thousands)
Loans without specific allowance:
Commercial, secured by real estate	$	14,065	$	14,712	$	—	$	344	$	12,928
Commercial, industrial and other		209		887		—		14		749
Leases		—		—		—		—		—
Real estate - residential mortgage		2,195		2,242		—		—		2,096
Real estate - construction		—		—		—		—		94
Home equity and consumer		574		575		—		5		762
Loans with specific allowance:
Commercial, secured by real estate		5,721		5,918		598		271		6,249
Commercial, industrial and other		1,023		1,023		77		32		717
Leases		6		6		1		—		—
Real estate - residential mortgage		832		865		73		37		840
Real estate - construction		380		380		21		13		308
Home equity and consumer		1,001		1,013		73		54		1,006
Total:
Commercial, secured by real estate	$	19,786	$	20,630	$	598	$	615	$	19,177
Commercial, industrial and other		1,232		1,910		77		46		1,466
Leases		6		6		1		—		—
Real estate - residential mortgage		3,027		3,107		73		37		2,936
Real estate - construction		380		380		21		13		402
Home equity and consumer		1,575		1,588		73		59		1,768
	$	26,006	$	27,621	$	843	$	770	$	25,749

Interest income recognized on impaired loans was $336,000 and $394,000, respectively, for the six months ended June 30, 2016 and 2015. Interest that would have been accrued on impaired loans during the first six months of 2016 and 2015 had the loans been performing under original terms would have been $828,000 and $794,000, 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 leases and assesses the quantitative and qualitative risks arising from the credit quality of its loans and leases. 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 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, 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 June 30, 2016 and December 31, 2015, by the risk ratings discussed above (in thousands):

	Commercial,		Commercial,
	Secured by		Industrial		Real Estate-
June 30, 2016	Real Estate		and Other		Construction
Risk Rating
1	$	—	$	4,790	$	—
2		—		12,859		—
3		90,333		39,328		—
4		664,396		120,918		21,003
5		1,299,359		111,842		128,998
5W - Watch		74,293		8,824		271
6 - Other assets especially mentioned		23,139		4,918		1,472
7 - Substandard		48,627		9,583		1,234
8 - Doubtful		—		—		—
9 - Loss		—		—		—
Total	$	2,200,147	$	313,062	$	152,978
	Commercial,		Commercial,
	Secured by		Industrial		Real Estate-
December 31, 2015	Real Estate		and Other		Construction
Risk Rating
1	$	—	$	3,517	$	—
2		—		9,662		—
3		65,199		56,895		—
4		526,909		111,702		19,125
5		1,044,888		105,301		94,535
5W - Watch		43,342		4,259		146
6 - Other assets especially mentioned		34,570		4,105		1,851
7 - Substandard		46,681		11,603		2,413
8 - Doubtful		—		—		—
9 - Loss		—		—		—
Total	$	1,761,589	$	307,044	$	118,070

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

Allowance for Loan and Lease Losses

In 2015, the Company refined and enhanced its assessment of the adequacy of the allowance for loan and lease losses by extending the lookback period on its commercial loan portfolios from three years to five years and by extending the lookback period for all other portfolios from two to three years in order to capture more of the economic cycle. It also enhanced its qualitative factor framework to include a factor that captures the risk related to appraised real estate values, and how those values could change in relation to a change in capitalization rates. This enhancement is meant to increase the level of precision in the allowance for loan and lease losses. As a result, the Company no longer has an “unallocated” segment in its allowance for loan losses, as the risks and uncertainties meant to be captured by the unallocated allowance have been included in the qualitative framework for the respective portfolios.

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The following table details activity in the allowance for loan and lease losses by portfolio segment for the three and six months ended June 30, 2016 and 2015:

	Commercial,			Commercial,						Real Estate-					Home
	Secured by			Industrial						Residential			Real Estate-		Equity and
Three Months Ended June 30, 2016	Real Estate			and Other			Leases			Mortgage			Construction		Consumer			Total
	(in thousands)
Beginning Balance	$	20,077		$	2,597		$	588		$	2,266		$	1,504	$	3,521		$	30,553
Charge-offs		(139	)		(171	)		(205	)		(213	)		—		(317	)		(1,045	)
Recoveries		26			34			21			1			—		67			149
Provision		395			(248	)		220			110			284		249			1,010
Ending Balance	$	20,359		$	2,212		$	624		$	2,164		$	1,788	$	3,520		$	30,667

	Commercial,			Commercial,						Real Estate-					Home
	Secured by			Industrial						Residential			Real Estate-		Equity and
Three Months Ended June 30, 2015	Real Estate			and Other			Leases			Mortgage			Construction		Consumer			Unallocated		Total
	(in thousands)
Beginning Balance	$	12,560		$	3,307		$	1,038		$	3,298		$	637	$	6,924		$	2,741	$	30,505
Charge-offs		(805	)		(64	)		(102	)		(89	)		—		(415	)		—		(1,475	)
Recoveries		325			42			—			2			6		29			—		404
Provision		1,839			(417	)		18			(195	)		82		(619	)		32		740
Ending Balance	$	13,919		$	2,868		$	954		$	3,016		$	725	$	5,919		$	2,773	$	30,174

	Commercial,			Commercial,						Real Estate-					Home
	Secured by			Industrial						Residential			Real Estate-		Equity and
Six Months Ended June 30, 2016	Real Estate			and Other			Leases			Mortgage			Construction		Consumer			Total
	(in thousands)
Beginning Balance	$	20,223		$	2,637		$	460		$	2,588		$	1,591	$	3,375		$	30,874
Charge-offs		(274	)		(796	)		(275	)		(306	)		—		(937	)		(2,588	)
Recoveries		81			76			22			4			—		113			296
Provision		329			295			417			(122	)		197		969			2,085
Ending Balance	$	20,359		$	2,212		$	624		$	2,164		$	1,788	$	3,520		$	30,667

	Commercial,			Commercial,						Real Estate-						Home
	Secured by			Industrial						Residential			Real Estate-			Equity and
Six Months Ended June 30, 2015	Real Estate			and Other			Leases			Mortgage			Construction			Consumer			Unallocated		Total
	(in thousands)
Beginning Balance	$	13,577		$	3,196		$	582		$	4,020		$	553		$	6,333		$	2,423	$	30,684
Charge-offs		(1,351	)		(74	)		(529	)		(106	)		(20	)		(676	)		—		(2,756	)
Recoveries		364			84			20			3			106			59			—		636
Provision		1,329			(338	)		881			(901	)		86			203			350		1,610
Ending Balance	$	13,919		$	2,868		$	954		$	3,016		$	725		$	5,919		$	2,773	$	30,174

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

	Commercial,		Commercial,				Real Estate-				Home
	Secured by		Industrial				Residential		Real Estate-		Equity and
June 30, 2016	Real Estate		and Other		Leases		Mortgage		Construction		Consumer		Total
	(in thousands)
Ending Balance: Individually evaluated for impairment	$	20,245	$	1,011	$	—	$	4,063	$	—	$	1,784	$	27,103
Ending Balance: Collectively evaluated for impairment		2,179,493		311,720		63,338		379,760		152,978		339,153	$	3,426,442
Ending Balance: Loans acquired with deteriorated credit quality		409		331		—		—		—		19	$	759
Ending Balance (1)	$	2,200,147	$	313,062	$	63,338	$	383,823	$	152,978	$	340,956	$	3,454,304
(1)    Excludes deferred fees
	Commercial,		Commercial,				Real Estate-				Home
	Secured by		Industrial				Residential		Real Estate-		Equity and
December 31, 2015	Real Estate		and Other		Leases		Mortgage		Construction		Consumer		Total
	(in thousands)
Ending Balance: Individually evaluated for impairment	$	19,786	$	1,232	$	6	$	3,027	$	380	$	1,575	$	26,006
Ending Balance: Collectively evaluated for impairment		1,741,803		305,812		56,654		386,665		117,690		333,316	$	2,941,940
Ending Balance (1)	$	1,761,589	$	307,044	$	56,660	$	389,692	$	118,070	$	334,891	$	2,967,946

(1) Excludes deferred fees

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

	Commercial,		Commercial,				Real Estate-				Home
	Secured by		Industrial				Residential		Real Estate-		Equity and
June 30, 2016	Real Estate		and Other		Leases		Mortgage		Construction		Consumer		Total
	(in thousands)
Ending Balance: Individually evaluated for impairment	$	493	$	43	$	—	$	31	$	—	$	103	$	670
Ending Balance: Collectively evaluated for impairment		19,866		2,169		624		2,133		1,788		3,417	$	29,997
Ending Balance	$	20,359	$	2,212	$	624	$	2,164	$	1,788	$	3,520	$	30,667
	Commercial,		Commercial,				Real Estate-				Home
	Secured by		Industrial				Residential		Real Estate-		Equity and
December 31, 2015	Real Estate		and Other		Leases		Mortgage		Construction		Consumer		Total
	(in thousands)
Ending Balance: Individually evaluated for impairment	$	598	$	77	$	1	$	73	$	21	$	73	$	843
Ending Balance: Collectively evaluated for impairment		19,625		2,560		459		2,515		1,570		3,302	$	30,031
Ending Balance	$	20,223	$	2,637	$	460	$	2,588	$	1,591	$	3,375	$	30,874

Lakeland also maintains a reserve for unfunded lending commitments which is included in other liabilities. This reserve was $2.5 million and $2.0 million at June 30, 2016 and December 31, 2015, respectively. The Company analyzes the adequacy of the reserve for unfunded lending commitments in conjunction with its analysis of the adequacy of the allowance for loan and lease losses. For more information on this analysis, see “Risk Elements” in Management’s Discussion and Analysis.

Troubled Debt Restructurings

Troubled debt restructurings are those loans where concessions have been made due to borrowers’ financial difficulties. 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 and lease losses.

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The following table summarizes loans that have been restructured during the three and six months ended June 30, 2016 and 2015:

	For the Three Months Ended						For the Three Months Ended
	June 30, 2016						June 30, 2015
			Pre-		Post-				Pre-		Post-
			Modification		Modification				Modification		Modification
			Outstanding		Outstanding				Outstanding		Outstanding
	Number of		Recorded		Recorded		Number of		Recorded		Recorded
	Contracts		Investment		Investment		Contracts		Investment		Investment
	(dollars in thousands)
Troubled Debt Restructurings
Commercial, secured by real estate		—	$	—	$	—		2	$	1,458	$	1,458
Commercial, industrial and other		—		—		—		2		784		784
		—	$	—	$	—		4	$	2,242	$	2,242
	For the Six Months Ended						For the Six Months Ended
	June 30, 2016						June 30, 2015
			Pre-		Post-				Pre-		Post-
			Modification		Modification				Modification		Modification
			Outstanding		Outstanding				Outstanding		Outstanding
	Number of		Recorded		Recorded		Number of		Recorded		Recorded
	Contracts		Investment		Investment		Contracts		Investment		Investment
	(dollars in thousands)
Troubled Debt Restructurings
Commercial, secured by real estate		—	$	—	$	—		2	$	1,458	$	1,458
Commercial, industrial and other		—		—		—		3		1,933		1,933
Leases		—		—		—		1		14		14
Real estate - construction		—		—		—		1		396		396
Home equity and consumer		3		285		285		1		9		9
		3	$	285	$	285		8	$	3,810	$	3,810

The following table summarizes as of June 30, 2016 and 2015, loans that were restructured within the previous twelve months that have subsequently defaulted:

	June 30, 2016				June 30, 2015
	Number of		Recorded		Number of		Recorded
	Contracts		Investment		Contracts		Investment
	(dollars in thousands)
Defaulted Troubled Debt Restructurings
Real estate - residential mortgage		—	$	—		1	$	483
Home equity and consumer		1		162		—		—
		1	$	162		1	$	483

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Other Real Estate and Other Repossessed Assets

At June 30, 2016, the Company had other real estate owned of $1.6 million. It had no other repossessed assets as of June 30, 2016. At December 31, 2015, the Company had other real estate owned and other repossessed assets of $934,000 and $49,000, respectively. The other real estate owned that the Company held at June 30, 2016 and December 31, 2015 included $1.0 million and $805,000, respectively, in residential property acquired as a result of foreclosure proceedings or through a deed in lieu of foreclosure.

Note 6. Derivatives

Lakeland is a party to interest rate derivatives that are not designated as hedging instruments. Under a program, Lakeland executes interest rate swaps with commercial lending customers to facilitate their respective risk management strategies. These interest rate swaps with customers are simultaneously offset by interest rate swaps that Lakeland executes with a third party, such that Lakeland minimizes its net risk exposure resulting from such transactions. Because the interest rate swaps associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings. The changes in the fair value of the swaps offset each other, except for the credit risk of the counterparties, which is determined by taking into consideration the risk rating, probability of default and loss given default for all counterparties. As of June 30, 2016 and December 31, 2015, Lakeland had $7.2 million and $2.5 million, respectively, in available for sale securities pledged for collateral on its interest rate swaps with the financial institution.

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 the cash flow hedge is to add stability to interest expense and to manage its exposure to interest rate movements. The Company used interest rate swaps designated as cash flow hedges which involved the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. In these particular hedges the Company is paying a third party an average of 1.10% in exchange for a payment at 3 month LIBOR. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive income and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the six months ended June 30, 2016, the Company did not record any hedge ineffectiveness.

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 $141,000 will be reclassified as an increase to interest expense should the rate environment remain the same.

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The following table presents summary information regarding these derivatives for the periods presented (dollars in thousands):

June 30, 2016	Notional Amount			Average Maturity (Years)		Weighted Average Fixed Rate			Weighted Average Variable Rate	Fair Value
Customer interest rate swaps	$	82,229			11.8		4.13	%	1 Mo Libor + 2.01	$	6,078
3rd Party interest rate swaps		(82,229	)		11.8		4.13	%	1 Mo Libor + 2.01		(6,078	)
Interest rate swap (cash flow hedge)		30,000			5		1.10	%	3 Mo. Libor		(193	)
December 31, 2015	Notional Amount			Average Maturity (Years)		Weighted Average Fixed Rate			Weighted Average Variable Rate	Fair Value
Customer interest rate swaps	$	35,664			14.6		4.54	%	1 Mo Libor + 2.00	$	1,518
3rd party interest rate swaps		(35,664	)		14.6		4.54	%	1 Mo Libor + 2.00		(1,518	)

Note 7. Goodwill and Intangible Assets

The Company has recorded goodwill of $125.3 million and $110.0 million at June 30, 2016 and December 31, 2015, respectively, which includes $15.3 million from the Pascack merger in 2016, $22.9 million from the Somerset Hills acquisition in 2013 and $87.1 million from prior acquisitions. 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 recorded $1.5 million and $2.7 million in core deposit intangible for the Pascack and Somerset Hills acquisitions, respectively. Year-to-date, it has amortized $331,000 in core deposit intangible including $138,000 and $193,000 for Pascack and Somerset Hills, respectively. The estimated future amortization expense for the remainder of 2016 and for each of the succeeding five years ended December 31 is as follows (dollars in thousands):

For the Year Ended	Pascack		Somerset Hills
2016	$	138	$	173
2017		248		316
2018		220		267
2019		193		218
2020		165		168
2021		138		119

Note 8. Borrowings

At June 30, 2016, the Company had federal funds purchased and securities sold under agreements to repurchase of $99.6 million and $24.0 million respectively. The securities sold under agreements to repurchase are overnight sweep arrangement accounts with our customers. The Company also had $50.0 million in long-term securities sold under agreements to repurchase included in other borrowings which have maturities ranging from one to seven years. As of June 30, 2016, the Company had $102.5 million in mortgage backed securities pledged for its securities sold under agreements to repurchase.

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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 9. Share-Based Compensation

The Company grants restricted stock, restricted stock units (RSUs) and stock options under the 2009 Equity Compensation Program. Share-based compensation expense of $1.1 million and $912,000 was recognized for the six months ended June 30, 2016 and 2015, respectively. As of June 30, 2016, there was unrecognized compensation cost of $240,000 related to unvested restricted stock that is expected to be recognized over a weighted average period of approximately 0.59 years. Unrecognized compensation expense related to RSUs was approximately $1.7 million as of June 30, 2016, and that cost is expected to be recognized over a period of 1.36 years. Unrecognized compensation expense related to unvested stock options was approximately $32,000 as of June 30, 2016 and is expected to be recognized over a period of 0.92 years.

In the first six months of 2016, the Company granted 23,952 shares of restricted stock to non-employee directors at a grant date fair value of $10.02 per share under the 2009 Equity Compensation Program. The restricted stock vests one year from the date it was granted. Compensation expense on this restricted stock is expected to be $240,000 over a one year period.

Information regarding the Company’s restricted stock and changes during the six months ended June 30, 2016 is as follows:

	Number of Shares			Weighted Average Price
Outstanding, January 1, 2016		73,500		$	9.33
Granted		23,952			10.02
Vested		(54,360	)		9.33
Forfeited		(168	)		9.12
Outstanding, June 30, 2016		42,924		$	9.72

In the first six months of 2016, the Company granted 150,226 RSUs to certain officers at a weighted average grant date fair value of $10.06 per share under the Company’s 2009 Equity Compensation Program. These units vest within a range of two to three years. A portion of these RSUs will vest subject to certain performance conditions in the restricted stock unit 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 half of 2016 is expected to average approximately $504,000 per year over a three year period. In the first six months of 2015, the Company granted 129,509 RSUs at a weighted average grant date fair value of $11.06 per share under the Company’s 2009 Equity Compensation Program. Compensation expense on these restricted stock units is expected to average approximately $477,000 per year over a three year period.

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Information regarding the Company’s RSUs and changes during the six months ended June 30, 2016 is as follows:

	Number of Shares			Weighted Average Price
Outstanding, January 1, 2016		200,910		$	10.87
Granted		150,226			10.06
Vested		(66,749	)		10.28
Forfeited		(6,157	)		10.65
Outstanding, June 30, 2016		278,230		$	10.58

There were no grants of stock options in the first six months of 2016 or 2015. 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, 2016		175,892	$	8.38			$	602,236
Granted		—		—
Exercised		—		—
Forfeited		—		—
Expired		—		—
Outstanding, June 30, 2016		175,892	$	8.38		4.53	$	530,121
Options exercisable at June 30, 2016		165,274	$	8.30		4.38	$	509,241

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 first six months of 2016 and the exercise price, multiplied by the number of in-the-money options).

The aggregate intrinsic value of stock options exercised during the six months ended June 30, 2015 was $63,000. Exercise of stock options during the first six months of 2015 resulted in cash receipts of $113,000.

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Note 10. Comprehensive Income

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

	June 30, 2016									June 30, 2015
	Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount			Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount
	(in thousands)									(in thousands)
For the quarter ended:
Net unrealized gains (losses) on available for sale securities
Net unrealized holding gains (losses) arising during period	$	2,684		($	987	)	$	1,697		($	3,466	)	$	1,289		($	2,177	)
Reclassification adjustment for net gains arising during the period		—			—			—			(26	)		9			(17	)
Net unrealized gains (losses)	$	2,684		($	987	)	$	1,697		($	3,492	)	$	1,298		($	2,194	)
Unrealized loss on derivatives		(193	)		67			(126	)		—			—			—
Change in minimum pension liability		8			(2	)		6			8			(3	)		5
Other comprehensive income (loss), net	$	2,499		($	922	)	$	1,577		($	3,484	)	$	1,295		($	2,189	)
	Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount			Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount
	(in thousands)									(in thousands)
For the six months ended:
Net unrealized gains on available for sale securities
Net unrealized holding gains arising during period	$	9,247		($	3,393	)	$	5,854		$	759		($	261	)	$	498
Reclassification adjustment for net gains arising during the period		(370	)		137			(233	)		(26	)		9			(17	)
Net unrealized gains	$	8,877		($	3,256	)	$	5,621		$	733		($	252	)	$	481
Unrealized loss on derivatives		(193	)		67			(126	)		—			—			—
Change in minimum pension liability		72			(28	)		44			16			(6	)		10
Other comprehensive income, net	$	8,756		($	3,217	)	$	5,539		$	749		($	258	)	$	491

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The following table shows the changes in the balances of each of the components of other comprehensive income for the periods presented (in thousands):

Changes in Accumulated Other Comprehensive Income by component, net of tax

	For the three months ended June 30, 2016												For the three months ended June 30, 2015
	Unrealized Gains on Available-for-Sale Securities			Unrealized Losses on Derivatives			Pension Items			Total			Unrealized Gains (Losses) on Available-for-Sale Securities			Pension Items			Total
Beginning Balance	$	5,078		$	—		$	34		$	5,112		$	4,206		($	3	)	$	4,203
	(in thousands)
Other comprehensive income (loss) before classifications		1,697			(126	)		6			1,577			(2,177	)		5			(2,172	)
Amounts reclassified from accumulated other comprehensive income		—			—			—			—			(17	)		—			(17	)
Net current period other comprehensive income (loss)		1,697			(126	)		6			1,577			(2,194	)		5			(2,189	)
Ending Balance	$	6,775		($	126	)	$	40		$	6,689		$	2,012		$	2		$	2,014
	For the six months ended June 30, 2016												For the six months ended June 30, 2015
	Unrealized Gains on Available-for-sale Securities			Unrealized Losses on Derivatives			Pension Items			Total			Unrealized Gains on Available-for-sale Securities			Pension Items			Total
Beginning Balance	$	1,154		$	—		($	4	)	$	1,150		$	1,531		($	8	)	$	1,523
Other comprehensive income before classifications		5,854			(126	)		44			5,772			498			10			508
Amounts reclassified from accumulated other comprehensive income		(233	)		—			—			(233	)		(17	)		—			(17	)
Net current period other comprehensive income		5,621			(126	)		44			5,539			481			10			491
Ending Balance	$	6,775		($	126	)	$	40		$	6,689		$	2,012		$	2		$	2,014

Note 11. 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.

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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 it’s available for sale investment securities. 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, 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 six months ended June 30, 2016, 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:

	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
June 30, 2016
Assets:
Investment securities, available for sale
U.S. treasury and government agencies	$	92,780	$	6,060	$	86,720	$	—
Mortgage backed securities		308,053		—		308,053		—
Obligations of states and political subdivisions		40,607		—		40,607		—
Equity securities		18,950		5,038		13,912		—
Total securities available for sale		460,390		11,098		449,292		—
Derivative Assets		6,078		—		6,078		—
Total Assets		466,468	$	11,098	$	455,370	$	—
Liabilities:
Derivative Liabilities	$	6,271	$	—	$	6,271	$	—
Total Liabilities	$	6,271	$	—	$	6,271	$	—
December 31, 2015
Assets:
Investment securities, available for sale
U.S. treasury and government agencies	$	97,133	$	4,888	$	92,245	$	—
Mortgage backed securities		289,572		—		289,572		—
Obligations of states and political subdivisions		36,498		—		36,498		—
Other debt securities		501		—		501		—
Equity securities		18,645		5,052		13,593		—
Total securities available for sale		442,349		9,940		432,409		—
Derivative Assets		1,518		—		1,518		—
Total Assets		443,867	$	9,940	$	433,927	$	—
Liabilities:
Derivative Liabilities	$	1,518	$	—	$	1,518	$	—
Total Liabilities	$	1,518	$	—	$	1,518	$	—

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The following table sets forth the Company’s assets subject to fair value adjustments (impairment) on a nonrecurring basis. Assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
	(in thousands)
June 30, 2016
Assets:
Impaired Loans and Leases	$	—	$	—	$	27,103	$	27,103
Loans held for sale		—		6,463		—		6,463
Other real estate owned and other repossessed assets		—		—		1,594		1,594
December 31, 2015
Assets:
Impaired Loans and Leases	$	—	$	—	$	26,006	$	26,006
Loans held for sale		—		1,233		—		1,233
Other real estate owned and other repossessed assets		—		—		983		983

Impaired loans are evaluated and valued at the time the loan is identified as impaired at the lower of cost or market value of the underlying collateral. Because most of Lakeland’s impaired loans are collateral dependent, fair value is generally measured based on the value of the collateral, less estimated costs to sell, securing these loans and leases and is classified at a level 3 in the fair value hierarchy. Collateral may be real estate, accounts receivable, inventory, equipment and/or other business assets. The value of the real estate is assessed based on appraisals by qualified third party licensed appraisers. The appraisers may use the sales comparison approach, the cost approach or 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. Loans that are not collateral dependent are evaluated based on a discounted cash flow method. 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.

Other real estate owned (OREO) and other repossessed assets, representing property acquired through foreclosure, are recorded at fair value less estimated disposal costs of the acquired property on the date of acquisition and thereafter remeasured and carried at lower of cost or fair market value. Fair value on other real estate owned is based on the appraised value of the collateral using the sales comparison approach or the income approach with 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.

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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. 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 June 30, 2016 and December 31, 2015 are outlined below.

This summary, as well as the table below, excludes financial assets and liabilities for which carrying value approximates fair value. For financial assets, these include cash and cash equivalents. For financial liabilities, these include noninterest bearing demand deposits, savings and interest-bearing transaction accounts and federal funds sold and securities sold under agreements to repurchase. The estimated fair value of demand, savings and interest-bearing transaction accounts is the amount payable on demand at the reporting date. Carrying value is used because there is no stated maturity on these accounts, and the customer has the ability to withdraw the funds immediately. Also excluded from this summary and the following table are those financial instruments recorded at fair value on a recurring basis, as previously described.

The fair value of Investment Securities Held to Maturity was measured using information from the same third-party servicer used for Investment Securities Available for Sale using the same methodologies discussed above. Investment Securities Held to Maturity includes $19.5 million in short-term municipal bond anticipation notes and $1.0 million in subordinated debt that are non-rated and do not have an active secondary market or information readily available on standard financial systems. As a result, the securities are classified as Level 3 securities. These are investments that management performs a credit analysis on 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 at June 30, 2016 and December 31, 2015 has been valued using a present value discounted cash flow where market prices are not available. The discount rate used in these calculations is the estimated current market rate adjusted for credit risk. The valuation of the Company’s loan portfolio is consistent with accounting guidance but does not fully incorporate the exit price approach.

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 June 30, 2016 and December 31, 2015:

	Carrying Value		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
June 30, 2016
Financial Instruments - Assets:
Investment securities held to maturity	$	126,221	$	129,447	$	—	$	109,946	$	19,501
Federal Home Loan Bank and other membership bank stocks		15,797		15,797		—		15,797		—
Loans and leases, net		3,420,715		3,439,536		—		—		3,439,536
Financial Instruments - Liabilities:
Certificates of deposit		477,336		478,596		—		478,596		—
Other borrowings		294,771		300,956		—		300,956		—
Subordinated debentures		31,238		21,242		—		—		21,242
December 31, 2015
Financial Instruments - Assets:
Investment securities held to maturity	$	116,740	$	117,594	$	—	$	110,293	$	7,301
Federal Home Loan Bank and other membership bank stocks		14,087		14,087		—		14,087		—
Loans and leases, net		2,934,326		2,930,188		—		—		2,930,188
Financial Instruments - Liabilities:
Certificates of deposit		343,321		341,998		—		341,998		—
Other borrowings		271,905		275,409		—		275,409		—
Subordinated debentures		31,238		24,366		—		—		24,366

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Note 12. Statement of Cash Flow Information, Supplemental Information

	For the six months ended June 30,
	2016			2015
	(in thousands)
Supplemental schedule of noncash investing and financing activities:
Cash paid during the period for income taxes	$	10,682		$	7,645
Cash paid during the period for interest		7,501			5,016
Transfer of loans and leases into other repossessed assets and other real estate owned		1,280			760
Acquisition of Pascack:
Non-cash assets acquired:
Federal Home Loan Bank stock		2,962			—
Investment securities held for maturity		3,925			—
Loans, including loans held for sale		319,575			—
Goodwill and other intangible assets, net		16,825			—
Other assets		21,110			—
Total non-cash assets acquired		364,397			—
Liabilities assumed:
Deposits		(304,466	)		—
Other borrowings		(57,308	)		—
Other liabilities		(6,344	)		—
Total liabilities assumed		(368,118	)		—
Common stock issued and fair value of stock options converted to Lakeland Bancorp stock options		37,221			—

Note 13. Recent Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued an accounting standards update pertaining to the measurement of credit losses on financial instruments. This update requires the measurement of all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable and supportable financials. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. This update is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2019. The Company is currently assessing the impact that the guidance will have on the Company’s consolidated financial statements.

In March 2016, the FASB issued an accounting standards update to simplify employee share-based payment accounting. The areas for simplification in this update involve several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2017. The Company is currently assessing the impact that the guidance will have on the Company’s consolidated financial statements.

In March, 2016, the FASB issued an accounting standards update that requires that embedded derivatives be separated from the host contract and accounted for separately as derivatives if certain criteria are met, including the “clearly and closely related” criterion. The amendments in this update clarify the requirements for assessing whether contingent call or put options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. This update

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will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2016. This guidance will be applied on a modified retrospective basis as of the beginning of the fiscal year that the amendment is effective. The adoption of this update is not expected to have a material impact on the Company’s financial statements.

In February 2016, FASB issued accounting guidance that requires all lessees to recognize a lease liability and a right-of-use asset, measured at the present value of the future minimum lease payments, at the lease commencement date. Lessor accounting remains largely unchanged under the new guidance. The guidance is effective for fiscal years beginning after December 15, 2018, including interim reporting periods within that reporting period, with early adoption permitted. A modified retrospective approach must be applied for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently assessing the impact that the guidance will have on the Company’s consolidated financial statements.

In January 2016, the FASB issued an accounting standards update intended to improve the recognition and measurement of financial instruments. Specifically, the accounting standards update requires all equity instruments, with the exception of those that are accounted for under the equity method of accounting, to be measured at fair value with changes in the fair value recognized through net income. Additionally, public business entities are required to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. The amendments in this update also require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. This amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The adoption of this update is not expected to have a material impact on the Company’s financial statements.

In September 2015, the FASB issued an accounting standards update simplifying the accounting for adjustments made to provisional amounts recognized in a business combination, eliminating the requirement to retrospectively account for those adjustments. To simplify the accounting for adjustments made to provisional amounts, the amendments in the accounting standards update require that the acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amount is determined. The acquirer is required to also record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. In addition, an entity is required to present separately on the face of the income statement or disclose in the notes to the financial statements the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. This amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The adoption of this update did not have a material impact on the Company’s financial statements.

In May 2015, the FASB issued an accounting standards update clarifying how investments valued using the net asset value practical expedient within the fair value hierarchy should be classified. The accounting standards update was issued to address diversity in practice by exempting investments measured using the net asset value expedient from categorization in the fair value hierarchy. This accounting standards update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The adoption of this update did not have a material impact on the Company’s financial statements.

In April 2015, the FASB issued an accounting standards update requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability consistent with the presentation of debt discounts. The purpose of this update is to simplify the presentation of debt issuance costs and to align the U.S. GAAP presentation of debt more closely with international accounting standards. In August 2015, the FASB issued a subsequent update which discussed presentation and subsequent measurement of debt issuance costs associated with line-of-credit arrangements. These amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The adoption of these updates did not have a material impact on the Company’s financial statements.

In January 2015, the FASB issued an accounting standards update regarding the elimination of the concept of the extraordinary items from the statement of operations. The purpose of this update is to simplify the statement of operations presentation and to align the U.S. GAAP income statement more closely with international accounting standards. This update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The adoption of this update did not have a material impact on the Company’s financial statements.

In May 2014, the FASB issued an accounting standards update that clarifies the principles for recognizing revenue. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to a

36

customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for these goods or services. To achieve that core principle, an entity should apply the following steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. In 2016, the FASB issued further implementation guidance regarding revenue recognition. This additional guidance included clarification on certain principal versus agent considerations within the implementation of the guidance as well as clarification related to identifying performance obligations and licensing. The guidance along with its updates is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company is still evaluating the potential impact on the Company’s financial statements.

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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, 2015.

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 and lease 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 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 affecting the financial services industry including but not limited to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, government intervention in the U.S. financial system, changes in levels of market interest rates, pricing pressures on loan and deposit products, credit risks of Lakeland’s lending and leasing activities, customers’ acceptance of Lakeland’s products and services, competition, and the failure to realize anticipated efficiencies and synergies following the Pascack and Harmony mergers.

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, Lakeland NJ Investment Corp., Lakeland Investment Corp., Lakeland Equity, Inc., Lakeland Preferred Equity, Inc., and Sullivan Financial Services, 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.

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Management Overview

The quarter and six months ended June 30, 2016 represented a period of continued growth for the Company. As discussed in this Management’s Discussion and Analysis:

• Net income in the second quarter of 2016 was $10.1 million, 29% higher than the $7.9 million for the same period in 2015. Excluding the after-tax impact of $0.6 million in merger related expenses pertaining to the Company’s acquisitions of Pascack Bancorp, Inc. (“Pascack”), which closed on January 7, 2016, and Harmony Bank (“Harmony”), which closed on July 1, 2016, net income for the second quarter of 2016 was $10.7 million.

• Earnings per diluted share was $0.24 in the second quarter of 2016, 14% higher than the $0.21 per diluted share reported in the second quarter of 2015. Excluding merger related expenses, earnings per diluted share was $0.26 in the second quarter of 2016, a 24% increase over the same period in 2015. Please see “Non- GAAP Financial Measures” below for a reconciliation of EPS excluding merger related expenses.

• Net income for the first six months of 2016 was $18.2 million, or $0.44 per diluted share, compared to $16.2 million, or $0.42 per diluted share, for the same period in 2015. Excluding the after-tax impact of $1.7 million in merger related expenses, net income for the first six months of 2016 was $20.0 million, or $0.48 per diluted share.

• The annualized return on average assets for the six months ended June 30, 2016 was 0.85%, the annualized return on average common equity was 8.23%, and the annualized return on average tangible common equity was 11.53%. Excluding merger related expenses, these ratios were 0.93%, 9.00% and 12.62%, respectively.

• Net interest margin (“NIM”) was 3.47% for the second quarter of 2016, compared to 3.48% for the first quarter of 2016 and 3.46% for the second quarter of 2015.

• The Company reported strong loan growth for the first six months of 2016. For the first six months of 2016, total loans and leases increased by $486.4 million, or 16%, to $3.45 billion. This increase was $166.8 million, or 6%, after excluding the $319.6 million in loans acquired from Pascack.

• The Company also reported strong deposit growth for the first six months of 2016. Total deposits have increased $541.8 million, or 18%, since December 31, 2015. This increase was $237.3 million, or 8%, after excluding the $304.5 million in deposits acquired from Pascack. Noninterest bearing deposits increased $130.3 million, or 19%, in 2016. This increase was $65.9 million, or 9%, after excluding the $64.4 million in deposits acquired from Pascack.

• On January 7, 2016, the Company completed its acquisition of Pascack which added $405.5 million in total assets, $319.6 million in total loans and $304.5 million in total deposits. The Company recorded goodwill of $15.3 million and core deposit intangible of $1.5 million. Anticipated synergies and overlapping markets allowed the Company to close three branches during the first half of 2016. The Company’s financial statements reflect the impact of the merger from the date of acquisition, which should be considered when comparing periods. For more information, please see Note 2 in Notes to the Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

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Comparison of Operating Results for the Three Months Ended June 30, 2016 and 2015

Net Income

Net income was $10.1 million in the second quarter of 2016 compared to net income of $7.9 million for the second quarter of 2015. Diluted earnings per share was $0.24 for the second quarter of 2016, compared to diluted earnings per share of $0.21 for the same period last year. Excluding the impact of merger related expenses, net income would have been $10.7 million, or $0.26 per diluted share, in the second quarter of 2016. Net interest income at $35.1 million for the second quarter of 2016 increased $6.4 million from the second quarter of 2015 due primarily to a $7.7 million increase in interest income, offset by an increase of $1.3 million in interest expense. The increase in interest income reflects an increase in interest earning assets resulting primarily from the Pascack acquisition as well as organic growth.

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 second quarter of 2016 was $35.3 million, compared to $28.9 million for the second quarter of 2015. The net interest margin increased from 3.46% in the second quarter of 2015 to 3.47% in the second quarter of 2016 primarily as a result of a seven basis point increase in the yield on earning assets, partially offset by an eight basis point increase in the yield on interest bearing liabilities. The increase in the net interest margin was augmented by an increase in interest income earned on free funds (interest earning assets funded by noninterest bearing liabilities) resulting from an increase in average noninterest bearing deposits of $112.6 million. 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 are computed on a tax equivalent basis using a tax rate of 35%.

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	For the Three Months Ended,								For the Three Months Ended,
	June 30, 2016								June 30, 2015
						Average								Average
				Interest		Rates						Interest		Rates
	Average			Income/		Earned/			Average			Income/		Earned/
	Balance			Expense		Paid			Balance			Expense		Paid
	(dollars in thousands)
Assets
Interest-earning assets:
Loans and leases (A)	$	3,412,503		$	35,800		4.22	%	$	2,720,801		$	28,211		4.16	%
Taxable investment securities and other		493,688			2,696		2.18	%		532,150			2,688		2.02	%
Tax-exempt securities		81,518			642		3.15	%		68,397			612		3.58	%
Federal funds sold (B)		106,866			124		0.46	%		24,032			11		0.18	%
Total interest-earning assets		4,094,575			39,262		3.85	%		3,345,380			31,522		3.78	%
Noninterest-earning assets:
Allowance for loan and lease losses		(30,898	)							(30,996	)
Other assets		339,912								286,032
TOTAL ASSETS	$	4,403,589							$	3,600,416
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Savings accounts	$	485,580		$	64		0.05	%	$	402,142		$	53		0.05	%
Interest-bearing transaction accounts		1,775,129			1,376		0.31	%		1,480,866			853		0.23	%
Time deposits		487,169			964		0.79	%		295,996			440		0.59	%
Borrowings		377,937			1,531		1.62	%		326,859			1,293		1.58	%
Total interest-bearing liabilities		3,125,815			3,935		0.50	%		2,505,863			2,639		0.42	%
Noninterest-bearing liabilities:
Demand deposits		801,488								688,854
Other liabilities		25,480								15,548
Stockholders’ equity		450,806								390,151
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	4,403,589							$	3,600,416
Net interest income/spread					35,327		3.35	%					28,883		3.36	%
Tax equivalent basis adjustment					225								214
NET INTEREST INCOME				$	35,102							$	28,669
Net interest margin (C)							3.47	%							3.46	%

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

(B) Includes interest-bearing cash accounts.

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

Interest income on a tax equivalent basis increased from $31.5 million in the second quarter of 2015 to $39.3 million in the second quarter of 2016, an increase of $7.7 million, or 25%. The increase in interest income was primarily a result of the Pascack acquisition and organic growth in loans, as average loans and leases increased $691.7 million compared to the second quarter of 2015. The yield on average loans and leases at 4.22% in the second quarter of 2016 was six basis points higher than the second quarter of 2015, due primarily to a $367,000 increase in loan and lease prepayment fees. The yield on average taxable investment securities increased 16 basis points, while the yield on tax-exempt investment securities decreased by 43 basis points, compared to the second quarter of 2015. The income on taxable securities included $101,000 in income from calls on U.S. Government Agency securities. The decrease in yield on tax-exempt investment securities was primarily due to maturing securities at higher rates and new purchases at lower rates.

Total interest expense of $3.9 million in the second quarter of 2016 was $1.3 million greater than the $2.6 million reported for the same period in 2015. The cost of average interest-bearing liabilities increased from 0.42% in the second quarter of 2015 to 0.50% in 2016. The increase in the yield on interest-bearing deposits was due primarily to higher costing

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deposits acquired in the Pascack acquisition as well as an increasingly competitive market for deposits. The yield on interest-bearing transaction accounts and time deposits increased by eight basis points and 20 basis points, respectively. Time deposits, which pay a higher interest rate than interest-bearing transaction accounts, increased from 12% of interest- bearing liabilities in the second quarter of 2015 to 16% in the second quarter of 2016, impacting the increase in the Company’s cost of interest-bearing liabilities. Also impacting the cost of interest-bearing liabilities was an increase in the cost of borrowings which increased four basis points compared to the second quarter of 2015. As loan growth exceeded growth in core deposits from the second quarter of 2015 to the same period in 2016, the Company utilized higher cost time deposits and term borrowings from the Federal Home Loan Bank of New York to fund loan growth.

Provision for Loan and Lease Losses

In determining the provision for loan and lease 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 net charge-offs; and the results of independent third party loan review.

In the second quarter of 2016, a $1.0 million provision for loan and lease losses was recorded, which was $270,000, or 36%, higher than the provision for the same period last year. During the second quarter of 2016, the Company charged off loans and leases of $1.0 million and recovered $149,000 in previously charged off loans and leases compared to $1.5 million and $404,000, respectively, during the same period in 2015. The higher provision resulted primarily from increasing trends in non-performing loans. For more information regarding the determination of the provision, see “Risk Elements” below.

Noninterest Income

Noninterest income at $4.9 million in the second quarter of 2016 decreased by $73,000 compared to $5.0 million in the second quarter of 2015. Commissions and fees at $1.1 million in the second quarter of 2016 decreased $97,000 compared to the same period last year, due primarily to a decrease in investment commission income resulting from a decrease in demand for annuities. Gains on sales of loans totaled $425,000 in the second quarter of 2016 compared to $464,000 during the same period last year, due to decreased sales of residential mortgages. Income on bank owned life insurance of $414,000 for the second quarter of 2016 increased $26,000 or 7% compared to the same period last year, due primarily to the addition of new policies late in 2015.

Noninterest Expense

Noninterest expense in the second quarter of 2016 totaled $23.7 million, which was $2.5 million greater than the $21.2 million reported for the second quarter of 2015. Included in noninterest expense during the second quarter of 2016 was $685,000 in merger related expenses. Excluding merger related expenses, total noninterest expense would have been $23.0 million, a $1.8 million increase compared to the second quarter of 2015. Salaries and employee benefits expense at $13.1 million, increased $947,000 from the same period last year, primarily due to a full quarter of expenses associated with the loan production offices that opened in 2015, the addition of Pascack employees during the first quarter of 2016 and year- over-year increases in employee salary and benefit costs. Net occupancy expense, telecommunications expense and furniture and equipment increased $68,000, $28,000 and $453,000, respectively, compared to the second quarter of 2015, due primarily to the addition of the Pascack branches. Stationary, supplies and postage at $416,000 in the second quarter of 2016 was $39,000 greater than the same period last year, due primarily to mailings and supplies associated with the Pascack merger. Marketing expense of $385,000 in the second quarter of 2016 decreased $31,000 compared to the second quarter of 2015, due primarily to the timing of marketing campaigns. FDIC insurance expense of $681,000 in the second quarter of 2016 increased $150,000 compared to the same period last year, due to the addition of the Pascack deposits. The Company’s efficiency ratio, a non-GAAP financial measure, was 56.23% in the second quarter of 2016, compared to 62.09% for the same period last year. The decrease in this ratio reflects the realization of cost savings from the Pascack acquisition, including the closing of three branches. The Company uses this ratio because it believes that the ratio provides a good

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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:

	For the Three Months Ended June 30,
	2016			2015
	(dollars in thousands)
Calculation of Efficiency Ratio
Total noninterest expense	$	23,715		$	21,195
Amortization of core deposit intangibles		(164	)		(107	)
Other real estate owned and other repossessed asset expense		(26	)		(27	)
Merger related expenses		(685	)		—
Provision for unfunded lending commitments		(230	)		(60	)
Noninterest expense, as adjusted	$	22,610		$	21,001
Net interest income	$	35,102		$	28,669
Noninterest income		4,885			4,958
Total revenue		39,987			33,627
Tax-equivalent adjustment on municipal securities		225			214
Less:
Gains on sales of investment securities		—			(17	)
Total revenue, as adjusted	$	40,212		$	33,824
Efficiency ratio		56.2	%		62.1	%

Income Tax Expense

The effective tax rate increased from 32.8% in the second quarter of 2015 to 33.6% in the second quarter of 2016 primarily as a result of a decrease in tax advantaged items as a percent of pretax income. Tax advantaged items include tax-exempt security interest and income on bank owned life insurance policies. Also contributing to the increase in the effective tax rate was the impact of non-deductible merger related expenses.

Comparison of Operating Results for the Six Months Ended June 30, 2016 and 2015

Net Income

Net income was $18.2 million in the first half of 2016 compared to net income of $16.2 million for the first half of 2015. Diluted earnings per share was $0.44 for the first half of 2016, compared to diluted earnings per share of $0.42 for the same period last year. Excluding the impact of merger related expenses, net income for the first six months of 2016 was $20.0 million, or $0.48 per diluted share. Net interest income at $69.0 million for the first half of 2016 increased $11.8 million compared to the first half of 2015 due to a $14.3 million increase in interest income partially offset by a $2.5 million increase in interest expense. The increase in interest income reflects an increase in interest earning assets resulting primarily from the Pascack acquisition as well as organic growth.

Net Interest Income

Net interest income on a tax equivalent basis for the first half of 2016 was $69.4 million, compared to $57.6 million for the first half of 2015 resulting primarily from growth in average earning assets of $705.4 million. The net interest margin decreased from 3.51% in the first half of 2015 to 3.48% in the first half of 2016 primarily as a result of a nine basis point increase in the cost of interest bearing liabilities primarily due to an increasingly competitive market for deposits as well as higher costing core deposits acquired in the Pascack acquisition. The decrease in the net interest margin was somewhat mitigated by an increase in interest income earned on free funds (interest earning assets funded by noninterest bearing liabilities) resulting from an increase in average noninterest bearing deposits of $106.1 million. The components of net interest income will be discussed in greater detail below.

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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 are computed on a tax equivalent basis using a tax rate of 35%.

	For the Six Months Ended,								For the Six Months Ended,
	June 30, 2016								June 30, 2015
						Average								Average
				Interest		Rates						Interest		Rates
	Average			Income/		Earned/			Average			Income/		Earned/
	Balance			Expense		Paid			Balance			Expense		Paid
	(dollars in thousands)
Assets
Interest-earning assets:
Loans (A)	$	3,348,421		$	69,921		4.20	%	$	2,690,823		$	56,107		4.20	%
Taxable investment securities and other		494,788			5,658		2.29	%		523,179			5,362		2.05	%
Tax-exempt securities		78,106			1,277		3.27	%		68,599			1,243		3.62	%
Federal funds sold (B)		92,553			199		0.43	%		25,849			23		0.18	%
Total interest-earning assets		4,013,868			77,055		3.86	%		3,308,450			62,735		3.82	%
Noninterest-earning assets:
Allowance for loan and lease losses		(31,013	)							(30,994	)
Other assets		343,175								286,404
TOTAL ASSETS	$	4,326,030							$	3,563,860
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Savings accounts	$	480,725		$	157		0.07	%	$	398,667		$	104		0.05	%
Interest-bearing transaction accounts		1,728,855			2,624		0.31	%		1,488,028			1,692		0.23	%
Time deposits		476,097			1,828		0.77	%		288,459			833		0.58	%
Borrowings		388,680			3,047		1.57	%		311,089			2,484		1.60	%
Total interest-bearing liabilities		3,074,357			7,656		0.50	%		2,486,243			5,113		0.41	%
Noninterest-bearing liabilities:
Demand deposits		780,843								674,780
Other liabilities		25,015								15,950
Stockholders’ equity		445,815								386,887
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	4,326,030							$	3,563,860
Net interest income/spread					69,399		3.36	%					57,622		3.41	%
Tax equivalent basis adjustment					447								435
NET INTEREST INCOME				$	68,952							$	57,187
Net interest margin (C)							3.48	%							3.51	%

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

(B) Includes interest-bearing cash accounts.

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

Interest income on a tax equivalent basis increased from $62.7 million in the first half of 2015 to $77.1 million in the first half of 2016, an increase of $14.3 million, or 23%. The increase in interest income was primarily a result of the Pascack acquisition and organic growth in loans, as the average balance of loans and leases increased $657.6 million compared to the first half of 2015. The yield on average loans and leases of 4.20% in the first half of 2016 equaled the first half of 2015. The yield on average taxable investment securities increased 24 basis points, while the yield on tax-exempt investment securities decreased by 35 basis points, compared to the first half of 2015. Interest on taxable investment securities included $358,000 in income on called U.S. Government Agency securities. The decrease in yield on tax-exempt investment securities was due to the same reasons discussed in the quarterly comparison.

Total interest expense increased from $5.1 million in the first half of 2015 to $7.7 million in the first half of 2016, an increase of $2.5 million, or 50%. The cost of average interest-bearing liabilities increased from 0.41% in the first half of 2015 to 0.50% in 2016. The yield on interest-bearing transaction accounts and time deposits increased by eight basis points

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and 19 basis points, respectively. The increase in the yield on interest-bearing deposits was due primarily to higher costing deposits acquired in the Pascack acquisition as well as an increasingly competitive market for deposits. As growth in loans exceeded growth in core deposits from the first half of 2015 to the first half of 2016, the Company utilized higher cost time deposits and term borrowings from the Federal Home Loan Bank of New York to fund loan growth.

Provision for Loan and Lease Losses

In the first half of 2016, a $2.1 million provision for loan and lease losses was recorded, which was $475,000 greater than the provision for the same period last year. During the first half of 2016, the Company charged off loans and leases of $2.6 million and recovered $296,000 in previously charged off loans and leases compared to $2.8 million and $636,000, respectively, during the same period in 2015. The increased provision primarily resulted from higher net charge- offs during the six months ended June 30, 2016, as well as an increasing trend in non-performing loans from June 30, 2015 to June 30, 2016. For more information regarding the determination of the provision, see “Risk Elements” below.

Noninterest Income

Noninterest income of $9.8 million in the first half of 2016 increased by $56,000 compared to the first half of 2015. Service charges on deposit accounts of $5.0 million in the first half of 2016 increased $175,000, or 4%, while commissions and fees of $2.1 million in the first half of 2016 decreased $425,000 compared to the same period last year due primarily to the same reason discussed in the quarterly analysis. Gains on sales of loans of $845,000 and gain on investment securities of $370,000 in the first half of 2016 increased $116,000 and $353,000, respectively, compared to the same period last year. In the first half of 2015, a $332,000 death benefit was received on a bank owned life insurance policy, accounting for the 24% decrease in that category. Other income totaling $672,000 in the first half of 2016 was $102,000 higher than the same period in 2015 as swap income increased $173,000 while gains on sale of other real estate decreased $78,000 compared to the first half of 2015.

Noninterest Expense

Noninterest expense totaling $49.1 million increased $7.9 million in the first half of 2016 from the first half of 2015. Included in noninterest expense during the first half of 2016 was $2.4 million in merger related expenses. Excluding merger related expenses, total noninterest expense would have been $46.7 million, a $5.5 million increase compared to the first half of 2015. Salary and employee benefits of $27.2 million increased by $3.3 million, or 14%, due primarily to the addition of the Pascack employees as well as normal salary and benefit increases. Net occupancy expense, telecommunications expense and furniture and equipment increased $208,000, $107,000 and $743,000, respectively, compared to the first half of 2015 due to the addition of the Pascack branches. Stationary, supplies and postage increased $117,000 compared to the first half of 2015 primarily due to the same reason discussed in the quarterly comparison. Marketing expense of $694,000 in the first half of 2016 increased $38,000 compared to the first half of 2015 due primarily to the timing of marketing campaigns. FDIC insurance expense of $1.3 million in the first half of 2016 increased $222,000 compared to the same period last year, due to the addition of the Pascack deposits. Data processing expense of $979,000 increased $206,000, primarily due to increases in the cost of mobile banking and the addition of the Pascack branches. Other expenses of $4.8 million in the first half of 2016 increased $410,000 compared to the first half of 2015 as donation expense and courier expense increased $119,000 and $167,000, respectively. The increase in courier expense is due to the outsourcing of the Company’s couriers which had previously impacted salary expense. The Company’s efficiency ratio, a non-GAAP financial measure, was 58.3% in the first half of 2016, compared to 60.6% for the same period last year. The decrease in efficiency ratio was due to the same reason discussed in the quarterly comparison. The Company uses this ratio because it believes that the ratio provides a good comparison of period-to-period

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performance and because the ratio is widely accepted in the banking industry. The following table shows our calculation of the efficiency ratio for the periods presented:

	For the Six Months Ended June 30,
	2016			2015
	(dollars in thousands)
Calculation of Efficiency Ratio
Total noninterest expense	$	49,139		$	41,237
Less:
Amortization of core deposit intangibles		(331	)		(218	)
Other real estate owned and other repossessed asset expense		(65	)		(19	)
Merger related expenses		(2,406	)		—
Provision for unfunded lending commitments		(438	)		(190	)
Noninterest expense, as adjusted	$	45,899		$	40,810
Net interest income	$	68,952		$	57,187
Noninterest income		9,752			9,696
Total revenue		78,704			66,883
Tax-equivalent adjustment on municipal securities		447			435
Less:
Gains on sales of investment securities		(370	)		(17	)
Total revenue, as adjusted	$	78,781		$	67,301
Efficiency ratio		58.3	%		60.6	%

Income Tax Expense

The effective tax rate increased from 32.6% in the first half of 2015 to 33.6% in the first half of 2016 as a result of the same reasons discussed in the quarterly comparison.

Financial Condition

The Company’s total assets increased $598.3 million from December 31, 2015, to $4.47 billion at June 30, 2016 including the impact of Pascack’s assets which represented $405.5 million at the time of acquisition.

Loans and Leases

Gross loans and leases of $3.45 billion increased by $486.4 million from December 31, 2015 including Pascack loans which totaled $319.6 million at acquisition. Excluding Pascack’s loans, total loans have increased 6% from December 31, 2015, primarily in the commercial loans secured by real estate category. Excluding the impact of the Pascack loans of $273.7 million, commercial loans secured by real estate increased $164.8 million, or 9%, from December 31, 2015 to June 30, 2016. Leases also increased $6.7 million, or 12%, resulting from increased demand for equipment financing. Excluding the impact of the Pascack loans of $22.3 million, commercial, industrial and other decreased $16.3 million, or 5%. Real estate-residential mortgages declined $16.1 million, or 4%, excluding the impact of Pascack’s residential mortgages of $10.3 million. The decline in residential mortgages results from a decision to sell most of the residential loans that the Company originates. Excluding the impact of Pascack loans totaling $1.0 million and $12.2 million, respectively, Real estate construction loans increased $33.9 million, or 29%, while home equity and consumer loans decreased $6.2 million. For more information on the loan portfolio, see Note 5 in Notes to the Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

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Risk Elements

Non-performing assets increased from $23.7 million at December 31, 2015 to $26.5 million at June 30, 2016, primarily in the commercial secured by real estate category which increased by $2.1 million. Although non-performing assets increased, the percentage of non-performing assets to total assets decreased from 0.61% at December 31, 2015 to 0.59% at June 30, 2016. Non-accrual loans at June 30, 2016 included 5 loan relationships with a balance of $1.0 million or over, totaling $7.8 million, and 4 loan relationships between $500,000 and $1.0 million, totaling $2.8 million.

There were $42,000 in loans and leases past due ninety days or more and still accruing at June 30, 2016 compared to $331,000 at December 31, 2015. These loans primarily consisted of consumer loans which are generally placed on non- accrual and reviewed for charge-off when principal and interest payments are four months in arrears unless the obligations are well-secured and in the process of collection.

On June 30, 2016, the Company had $9.5 million in loans that were troubled debt restructurings and accruing interest income compared to $10.1 million at December 31, 2015. 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 June 30, 2016, the Company had $27.1 million in impaired loans (consisting primarily of non-accrual and restructured loans and leases) compared to $26.0 million at year-end 2015. The Company also had purchased credit impaired loans from the Pascack acquisition of $758,000 at June 30, 2016. For more information on impaired loans and leases see Note 5 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, $670,000 of the allowance for loan and lease losses has been allocated for impairment at June 30, 2016. At June 30, 2016, the Company also had $43.6 million in loans and leases that were rated substandard that were not classified as non-performing or impaired compared to $46.6 million at December 31, 2015.

There were no loans and leases at June 30, 2016, 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 and leases 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 and lease losses, the provision for loan and lease losses, the amount of loans and leases charged-off and the amount of loan and lease recoveries:

	Six Months			Six Months			Year
	Ended			Ended			Ended
	June 30,			June 30,			December 31,
(dollars in thousands)	2016			2015			2015
Balance of the allowance at the beginning of the year	$	30,874		$	30,684		$	30,684
Loans and leases charged off:
Commercial, secured by real estate		274			1,351			1,821
Commercial, industrial and other		796			74			205
Leases		275			529			548
Real estate - mortgage		306			106			375
Real estate - construction		—			20			20
Home equity and consumer		937			676			1,511
Total loans charged off		2,588			2,756			4,480
Recoveries:
Commercial, secured by real estate		81			364			2,221
Commercial, industrial and other		76			84			183
Leases		22			20			26
Real estate - mortgage		4			3			63
Real estate - construction		—			106			106
Home equity and consumer		113			59			129
Total recoveries		296			636			2,728
Net charge-offs:		2,292			2,120			1,752
Provision for loan and lease losses		2,085			1,610			1,942
Ending balance	$	30,667		$	30,174		$	30,874
Ratio of annualized net charge-offs to average loans and leases outstanding		0.14	%		0.16	%		0.06	%
Ratio of allowance at end of period as a percentage of period end total loans and leases		0.89	%		1.09	%		1.04	%

The ratio of the allowance for loan and lease losses to loans and leases outstanding reflects management’s evaluation of the underlying credit risk inherent in the loan portfolio. The determination of the adequacy of the allowance for loan and lease losses and periodic provisioning for estimated losses included in the consolidated financial statements is the responsibility of management and the Board of Directors. The evaluation process is undertaken on a quarterly basis.

Methodology employed for assessing the adequacy of the allowance consists of the following criteria:

• The establishment of specific reserve amounts for all specifically identified classified loans and leases that have been designated as requiring attention by Lakeland.

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

• The establishment of reserve amounts for the unimpaired loans and leases in each portfolio based upon the historical average loss experience as modified by management’s assessment of the loss emergence period for these portfolios and management’s evaluation of key environmental factors.

Consideration is given to the results of ongoing credit quality monitoring processes, the adequacy and expertise of the Company’s lending staff, underwriting policies, loss histories, delinquency trends, and the cyclical nature of economic and business conditions. Since many of the Company’s loans depend on the sufficiency of collateral as a secondary means of repayment, any adverse trend in the real estate markets could affect underlying values available to protect the Company against loss.

The overall balance of the allowance for loan and lease losses of $30.7 million at June 30, 2016 decreased $207,000, from December 31, 2015, a decline of 1%. The change in the allowance within segments of the loan portfolio reflects changes in the non-performing loan and charge-off statistics within each segment as well as the level of growth in each segment. Loan reserves are based on a combination of historical charge-off experience, estimating the appropriate loss emergence and pre-emergence periods and assigning qualitative factors based on general economic conditions and specific bank portfolio characteristics.

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Non-performing loans and leases increased from $22.7 million at December 31, 2015 to $24.9 million at June 30, 2016. The allowance for loan and lease losses as a percent of total loans was 0.89% of total loans on June 30, 2016 compared to 1.04% as of December 31, 2015. The reduction in the percentage of the allowance for loan and lease losses as a percent of total loans and leases was primarily due to the $319.6 million increase in loans resulting from the Pascack acquisition, which is accounted for under acquisition accounting. Excluding the Pascack loans, the allowance as a percent of total loans would be 0.98%. Management believes, based on appraisals and estimated selling costs, that the majority of its non-performing loans and leases are adequately secured and reserves on its non-performing loans and leases are adequate. Based upon the process employed and giving recognition to all accompanying factors related to the loan and lease portfolio, management considers the allowance for loan and lease losses to be adequate at June 30, 2016.

Investment Securities

For detailed information on the composition and maturity distribution of the Company’s investment securities portfolio, see Note 4 in Notes to Consolidated Financial Statements contained in this Quarterly Report on Form 10-Q. Total investment securities increased from $559.1 million at December 31, 2015 to $586.6 million at June 30, 2016, an increase of $27.5 million.

Deposits

Total deposits increased from $3.00 billion at December 31, 2015 to $3.54 billion at June 30, 2016, an increase of $541.8 million, or 18%. Pascack’s deposits totaled $304.5 million at the time of acquisition. Noninterest bearing deposits increased $130.3 million, or 19%, to $824.1 million. Excluding $64.4 million in Pascack demand deposits, noninterest bearing demand deposits have increased by $65.9 million, or 9%, from year-end 2015. Savings and interest-bearing transaction accounts and time deposits increased $277.4 million and $134.0 million, respectively. At the time of acquisition, Pascack had savings and interest-bearing transaction accounts and time deposits of $161.9 million and $78.1 million, 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 $11.1 million for the first half of 2016 compared to $16.1 million for the same period in 2015.

• Deposits. Lakeland can offer new products or change its rate structure in order to increase deposits. In the first half of 2016, Lakeland’s deposits increased $237.3 million, excluding the impact of Pascack deposits.

• Sales of securities. At June 30, 2016 the Company had $460.4 million in securities designated “available for sale.” Of these securities, $300.7 million were pledged to secure public deposits and for other purposes required by applicable laws and regulations.

• Repayments on loans and leases can also be a source of liquidity to fund further loan growth.

• 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 no overnight borrowings from the FHLB on June 30, 2016. Lakeland also has overnight federal funds lines available for it to borrow up to $192.0 million. Lakeland had borrowings against these lines of $99.6 million at June 30, 2016. 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 June 30, 2016.

49

• 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 six months ended June 30, 2016 follows.

Cash and cash equivalents totaling $152.9 million on June 30, 2016 increased $34.4 million from December 31, 2015. Operating activities provided $11.1 million in net cash. Investing activities used $145.0 million in net cash, primarily reflecting an increase in loans and leases. Financing activities provided $168.2 million in net cash primarily reflecting the increase in deposits of $237.6 million offset by declines in federal funds purchased and securities sold under agreements to repurchase of $27.6 million and net repayments of other borrowings of $34.1 million. 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 June 30, 2016. Interest on subordinated debentures and long-term borrowed funds is calculated based on current contractual interest rates.

					After One but		After Three
			Within		But Within		But Within		After
(dollars in thousands)	Total		One Year		Three Years		Five Years		Five Years
Minimum annual rentals on noncancellable operating leases	$	30,081	$	2,926	$	5,057	$	4,365	$	17,733
Benefit plan commitments		6,334		250		793		793		4,498
Remaining contractual maturities of time deposits		477,336		305,558		139,793		31,985		—
Subordinated debentures		31,238		—		—		—		31,238
Loan commitments		884,478		651,264		124,047		10,939		98,228
Other borrowings		294,771		111,029		168,710		5,032		10,000
Interest on other borrowings*		28,450		6,096		5,826		3,032		13,496
Standby letters of credit		12,098		10,519		1,467		32		80
Total	$	1,764,786	$	1,087,642	$	445,693	$	56,178	$	175,273

* Includes interest on other borrowings and subordinated debentures at a weighted rate of 2.05%.

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Capital Resources

Total stockholders’ equity increased from $400.5 million on December 31, 2015 to $454.9 million on June 30, 2016, an increase of $54.4 million, or 14%. Book value per common share increased to $11.03 on June 30, 2016 from $10.57 on December 31, 2015. Tangible book value per share increased from $7.62 per share on December 31, 2015 to $7.93 per share on June 30, 2016, an increase of 4%. Please see “Non-GAAP Financial Measures” below. The increase in stockholders’ equity from December 31, 2015 to June 30, 2016 was primarily due to stock issued of $37.2 million for the acquisition of Pascack, $18.2 million of net income and $5.5 million of other comprehensive income on the Company’s available for sale securities portfolio, partially offset by the payment of cash dividends on common stock of $7.5 million.

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’s financial statements. As of June 30, 2016, 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, to be fully phased-in by January 1, 2019. As of June 30, 2016, the Company’s capital levels remained characterized as “well-capitalized” under the new rules. The capital ratios for the Company and Lakeland at June 30, 2016 are as follows:

				Common Equity
	Tier 1 Capital			Tier 1 to			Tier 1 Capital			Total Capital
	to Total Average			Risk-Weighted			to Risk-Weighted			to Risk-Weighted
	Assets Ratio			Assets Ratio			Assets Ratio			Assets Ratio
	June 30,			June 30,			June 30,			June 30,
Capital Ratios	2016			2016			2016			2016
The Company		8.24	%		8.91	%		9.74	%		10.65	%
Lakeland Bank		7.93	%		9.38	%		9.38	%		10.30	%
Required capital ratios including conservation buffer		4.00	%		5.125	%		6.625	%		8.625	%
“Well capitalized” institution under FDIC Regulations		5.00	%		6.50	%		8.00	%		10.00	%

Non-GAAP Financial Measures

Reported amounts are presented in accordance with U.S. GAAP. The Company’s management believes that the supplemental non-GAAP information, which consists of measurements and ratios based on tangible equity and tangible assets, is utilized by regulators and market analysts to evaluate a company’s financial condition and therefore, such information is useful to investors. 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.

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	June 30,			December 31,
(dollars in thousands, except per share amounts)	2016			2015
Calculation of Tangible Book Value per Common Share
Total common stockholders’ equity at end of period - GAAP	$	454,934		$	400,516
Less:
Goodwill		125,285			109,974
Other identifiable intangible assets, net		2,728			1,545
Total tangible common stockholders’ equity at end of period - Non-GAAP	$	326,921		$	288,997
Shares outstanding at end of period		41,241			37,906
Book value per share - GAAP	$	11.03		$	10.57
Tangible book value per share - Non-GAAP	$	7.93		$	7.62
Calculation of Tangible Common Equity to Tangible Assets
Total tangible common stockholders’ equity at end of period - Non-GAAP	$	326,921		$	288,997
Total assets at end of period	$	4,467,860		$	3,869,550
Less:
Goodwill		125,285			109,974
Other identifiable intangible assets, net		2,728			1,545
Total tangible assets at end of period - Non-GAAP	$	4,339,847		$	3,758,031
Common equity to assets - GAAP		10.18	%		10.35	%
Tangible common equity to tangible assets - Non-GAAP		7.53	%		7.69	%

	For the three months ended,						For the six months ended,
	June 30,			June 30,			June 30,			June 30,
(dollars in thousands)	2016			2015			2016			2015
Calculation of Return on Average Tangible Common Equity
Net income - GAAP	$	10,130		$	7,862		$	18,238		$	16,192
Total average common stockholders’ equity	$	450,806		$	390,151		$	445,815		$	386,887
Less:
Average goodwill		125,424			109,974			124,923			109,974
Average other identifiable intangible assets, net		2,828			1,807			2,874			1,863
Total average tangible common stockholders’ equity - Non-GAAP	$	322,554		$	278,370		$	318,018		$	275,050
Return on average common stockholders’ equity - GAAP		9.04	%		8.08	%		8.23	%		8.44	%
Return on average tangible common stockholders’ equity - Non-GAAP		12.63	%		11.33	%		11.53	%		11.87	%

52

Reconciliation of Earnings Per Share excluding non-routine expenses	For the three months ended June 30, 2016			For the six months ended June 30, 2016
(in thousands, except per share amounts)
Net Income:	$	10,130		$	18,238
Non-routine expenses:
Tax deductible merger related expenses, net of tax		175			986
Non-tax deductible merger related expenses		389			739
Non-routine expenses, net of tax	$	564		$	1,725
Net income available to common shareholders
Excluding merger related expenses	$	10,694		$	19,963
Less: Earnings Allocated to Participating Securities		(106	)		(161	)
	$	10,588		$	19,802
Weighted Average Shares - Basic		41,238			41,084
Weighted Average Shares - Diluted		41,406			41,245
Basic Earnings Per Common Share	$	0.26		$	0.48
Diluted Earnings Per Common Share	$	0.26		$	0.48

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 $136.5 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	%
June 30, 2016		-1.2	%		-1.5	%
December 31, 2015		-1.4	%		-1.6	%

53

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
Asset/Liability Policy Limit		-15.0	%		-10.0	%		-5.0	%		-5.0	%
June 30, 2016		1.2	%		1.1	%		1.0	%		-3.5	%
December 31, 2015		1.7	%		1.3	%		0.8	%		-4.5	%

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 June 30, 2016 (the base case) was $574.8 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
Asset/Liability Policy Limit		-25.0	%		-20.0	%		-10.0	%		-10.0	%
June 30, 2016		-8.3	%		-4.7	%		-1.8	%		-3.1	%
December 31, 2015		-10.2	%		-6.5	%		-2.9	%		0.3	%

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, 2015.

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 Rule 13a-15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The term “disclosure controls and procedures,” as defined in Rule 13a-15, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

54

Based on the evaluation of the Company’s disclosure controls and procedures as of June 30, 2016, the Company’s Chief Executive Officer and Chief Financial Officer concluded that, as a result of the material weakness in the Company’s internal control over financial reporting previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2015 (the “2015 10-K”), the Company’s disclosure controls and procedures were not effective as of June 30, 2016.

As previously disclosed in the Company’s 2015 Form 10-K, during the fourth quarter of 2015, management identified a material weakness in internal controls over the completeness and accuracy of the information used to determine the qualitative component of the allowance for loan and lease losses estimate. This material weakness in internal controls occurred due to the control operator not executing the review control, as designed, of the completeness and accuracy of the information used in the qualitative component of the allowance for loan and lease losses estimate as of December 31, 2015. No restatement of prior period financial statements and no change in previously issued financial results were required as a result of this weakness in internal control. Management has taken steps to remediate this weakness by enhancing review controls, including adding an additional independent level of review over the information used to determine the qualitative component in the allowance for loan and lease losses estimation process . Management is still evaluating these new controls and procedures. Once placed in operation for a sufficient period of time, the Company will subject them to appropriate tests in order to determine whether they are operating effectively.

(b) Changes in internal controls over financial reporting. As discussed above, management has continued to remediate the underlying causes of the material weakness disclosed in the 2015 Form 10-K. Other than the plan for remediation described above, there has been no change in the Company’s internal control over financial reporting in the quarter ended June 30, 2016 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

55

PART II OTHER INFORMATION

Item 1. Legal Proceedings

Reference is made to the legal proceedings and stipulation of settlement disclosed in the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2016. On June 24, 2016, the court gave final approval to the settlement.

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, 2015.

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.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

56

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/ Joseph F. Hurley

Joseph F. Hurley

Executive Vice President and

Chief Financial Officer

(Principal Financial Officer)

Date: August 9, 2016

57

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: August 9, 2016

/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, Joseph F. Hurley, 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: August 9, 2016

/s/ Joseph F. Hurley

Joseph F. Hurley

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 June 30, 2016 filed with the Securities and Exchange Commission (the “Report”), Thomas J. Shara, President and Chief Executive Officer of the Company, and Joseph F. Hurley, 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: August 9, 2016

/s/ Thomas J. Shara

Thomas J. Shara,

President and Chief Executive Officer

(Principal Executive Officer)

/s/ Joseph F. Hurley

Joseph F. Hurley

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

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Jul. 29, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Trading Symbol	LBAI
Entity Registrant Name	LAKELAND BANCORP INC
Entity Central Index Key	0000846901
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		44,441,935

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
ASSETS
Cash	$ 146,306	$ 113,894
Interest-bearing deposits due from banks	6,577	4,599
Total cash and cash equivalents	152,883	118,493
Investment securities available for sale, at fair value	460,390	442,349
Investment securities held to maturity; fair value of $129,447 at June 30, 2016 and $117,594 at December 31, 2015	126,221	116,740
Federal Home Loan Bank and other membership bank stock, at cost	15,797	14,087
Loans held for sale	6,463	1,233
Loans, net of deferred costs (fees)	3,451,382	2,965,200
Less: allowance for loan and lease losses	30,667	30,874
Net loans	3,420,715	2,934,326
Premises and equipment, net	49,322	35,881
Accrued interest receivable	10,480	9,208
Goodwill	125,285	109,974
Other identifiable intangible assets	2,728	1,545
Bank owned life insurance	66,212	65,361
Other assets	31,364	20,353
TOTAL ASSETS	4,467,860	3,869,550
Deposits:
Noninterest bearing	824,077	693,741
Savings and interest-bearing transaction accounts	2,235,918	1,958,510
Time deposits $250 thousand and under	359,471	270,623
Time deposits over $250 thousand	117,865	72,698
Total deposits	3,537,331	2,995,572
Federal funds purchased and securities sold under agreements to repurchase	123,662	151,234
Other borrowings	294,771	271,905
Subordinated debentures	31,238	31,238
Other liabilities	25,924	19,085
TOTAL LIABILITIES	4,012,926	3,469,034
STOCKHOLDERS' EQUITY
Common stock, no par value; authorized shares, 70,000,000; issued 41,240,826 shares at June 30, 2016 and 37,906,481 shares at December 31, 2015	424,409	386,287
Retained earnings	23,836	13,079
Accumulated other comprehensive income	6,689	1,150
TOTAL STOCKHOLDERS' EQUITY	454,934	400,516
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 4,467,860	$ 3,869,550

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Investment securities held to maturity; fair value	$ 129,447	$ 117,594
Common stock, par value
Common stock, shares authorized	70,000,000	70,000,000
Common stock, shares issued	41,240,826	37,906,481

XML

Consolidated Statements of Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
INTEREST INCOME
Loans, leases and fees	$ 35,800	$ 28,211	$ 69,921	$ 56,107
Federal funds sold and interest-bearing deposits with banks	124	11	199	23
Taxable investment securities and other	2,696	2,688	5,658	5,362
Tax-exempt investment securities	417	398	830	808
TOTAL INTEREST INCOME	39,037	31,308	76,608	62,300
INTEREST EXPENSE
Deposits	2,404	1,346	4,609	2,629
Federal funds purchased and securities sold under agreements to repurchase	9	37	47	59
Other borrowings	1,522	1,256	3,000	2,425
TOTAL INTEREST EXPENSE	3,935	2,639	7,656	5,113
NET INTEREST INCOME	35,102	28,669	68,952	57,187
Provision for loan and lease losses	1,010	740	2,085	1,610
NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES	34,092	27,929	66,867	55,577
NONINTEREST INCOME
Service charges on deposit accounts	2,523	2,450	4,965	4,790
Commissions and fees	1,099	1,196	2,078	2,503
Gains on sales of investment securities		17	370	17
Gains on sales of loans	425	464	845	729
Income on bank owned life insurance	414	388	822	1,087
Other income	424	443	672	570
TOTAL NONINTEREST INCOME	4,885	4,958	9,752	9,696
NONINTEREST EXPENSE
Salaries and employee benefits	13,091	12,144	27,176	23,894
Net occupancy expense	2,341	2,273	5,029	4,821
Furniture and equipment	2,082	1,629	4,028	3,285
Stationery, supplies and postage	416	377	859	742
Marketing expense	385	416	694	656
FDIC insurance expense	681	531	1,271	1,049
Data processing expense	459	438	979	773
Telecommunications expense	386	358	810	703
ATM and debit card expense	383	382	729	724
Expenses on other real estate owned and other repossessed assets	26	27	65	19
Merger related expenses	685		2,406
Core deposit intangible amortization	164	107	331	218
Other expenses	2,616	2,513	4,762	4,353
TOTAL NONINTEREST EXPENSE	23,715	21,195	49,139	41,237
Income before provision for income taxes	15,262	11,692	27,480	24,036
Income tax expense	5,132	3,830	9,242	7,844
NET INCOME	$ 10,130	$ 7,862	$ 18,238	$ 16,192
PER SHARE OF COMMON STOCK
Basic earnings	$ 0.24	$ 0.21	$ 0.44	$ 0.42
Diluted earnings	0.24	0.21	0.44	0.42
Dividends	$ 0.095	$ 0.085	$ 0.180	$ 0.160

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Statement of Comprehensive Income [Abstract]
NET INCOME	$ 10,130	$ 7,862	$ 18,238	$ 16,192
OTHER COMPREHENSIVE INCOME, NET OF TAX:
Unrealized securities gains (losses) during period	1,697	(2,177)	5,854	498
Reclassification for gains included in net income		(17)	(233)	(17)
Unrealized losses on derivatives	(126)		(126)
Change in pension liability, net	6	5	44	10
Other comprehensive income (loss)	1,577	(2,189)	5,539	491
TOTAL COMPREHENSIVE INCOME	$ 11,707	$ 5,673	$ 23,777	$ 16,683

XML

Consolidated Statements of Changes in Stockholders' Equity - 6 months ended Jun. 30, 2016 - USD ($) $ in Thousands	Total	Common Stock [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income [Member]
BALANCE at Dec. 31, 2015	$ 400,516	$ 386,287	$ 13,079	$ 1,150
NET INCOME	18,238		18,238
Other comprehensive income, net of tax	5,539			5,539
Stock based compensation	1,107	1,107
Issuance of stock for Pascack acquisition	37,221	37,221
Retirement of restricted stock	(206)	(206)
Cash dividends, common stock	(7,481)		(7,481)
BALANCE at Jun. 30, 2016	$ 454,934	$ 424,409	$ 23,836	$ 6,689

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES
NET INCOME	$ 18,238	$ 16,192
Adjustments to reconcile net income to net cash provided by operating activities:
Net amortization of premiums, discounts and deferred loan fees and costs	1,794	2,009
Depreciation and amortization	1,847	1,914
Amortization of intangible assets	331	218
Provision for loan and lease losses	2,085	1,610
Loans originated for sale	(38,408)	(34,649)
Proceeds from sales of loans	34,023	32,622
Gains on sales of securities	(370)	(17)
Gains on sales of loans held for sale	(845)	(729)
Gains on other real estate and other repossessed assets	(90)	(144)
Losses on sales of premises and equipment	117	2
Stock-based compensation	1,107	912
Increase in other assets	(9,176)	(3,535)
Increase (decrease) in other liabilities	483	(281)
NET CASH PROVIDED BY OPERATING ACTIVITIES	11,136	16,124
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash acquired in acquisition	40,942
Proceeds from repayments on and maturity of securities:
Available for sale	40,083	37,946
Held to maturity	13,156	8,804
Proceeds from sales of securities
Available for sale	15,654	11,472
Purchase of securities:
Available for sale	(61,705)	(54,241)
Held to maturity	(22,778)	(24,245)
Purchase of bank owned life insurance		(4,078)
Proceeds from bank owned life insurance policy		772
Net decrease (increase) in Federal Home Loan Bank Stock	1,253	(2,933)
Net increase in loans and leases	(170,698)	(103,750)
Proceeds from sales of other real estate and repossessed assets	758	853
Proceeds from dispositions and sales of premises and equipment	11	4
Capital expenditures	(1,648)	(2,053)
NET CASH USED IN INVESTING ACTIVITIES	(144,972)	(131,449)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposits	237,564	52,204
(Decrease) increase in federal funds purchased and securities sold under agreements to repurchase	(27,572)	37,314
Proceeds from other borrowings	4,921	70,230
Repayments of other borrowings	(39,000)	(10,000)
Excess tax benefits		59
Exercise of stock options		113
Retirement of restricted stock	(206)	(250)
Dividends paid	(7,481)	(6,095)
NET CASH PROVIDED BY FINANCING ACTIVITIES	168,226	143,575
Net increase in cash and cash equivalents	34,390	28,250
Cash and cash equivalents, beginning of period	118,493	109,316
CASH AND CASH EQUIVALENTS, END OF PERIOD	$ 152,883	$ 137,566

XML

Significant Accounting Policies

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Significant Accounting Policies

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 the Bank’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 and six months ended June 30, 2016 do not necessarily indicate the results that the Company will achieve for all of 2016.

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. You should read these interim financial statements in conjunction with the audited consolidated financial statements and accompanying notes that are presented in the Lakeland Bancorp, Inc. Annual Report on Form 10-K for the year ended December 31, 2015.

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Acquisitions

6 Months Ended

Jun. 30, 2016

Business Combinations [Abstract]

Acquisitions

Note 2. Acquisitions

Harmony Bank

On July 1, 2016, the Company completed its acquisition of Harmony Bank, a bank located in Ocean County, NJ. Effective upon the opening of business on July 1, 2016, Harmony was merged into Lakeland Bank. This merger allows the Company to expand its presence to Ocean County. The merger agreement provided that shareholders of Harmony would receive 1.25 shares of the Company common stock for each share of Harmony Bank common stock that they owned at the effective time of the merger. The Company issued an aggregate of approximately 3,201,109 shares of its common stock in the merger. Outstanding Harmony stock options were paid out in cash at the difference between $14.31 (Lakeland’s closing stock price on July 1, 2016 of $11.45 multiplied by 1.25) and the average strike price of $9.07 for a total cash payment of $869,000. As of the opening of business July 1, 2016, Harmony operated three branches in Ocean County, New Jersey, and had total assets, total loans, total deposits and total stockholders’ equity of $314 million, $261 million, $277 million, and $24 million, respectively. As the merger has not been completed as of June 30, 2016, the transaction is not reflected in the balance sheet or results of operations for the periods presented in this document.

Pascack Bancorp

On January 7, 2016, the Company completed its acquisition of Pascack Bancorp, Inc. (“Pascack”), a bank holding company headquartered in Waldwick, New Jersey. Pascack was the parent of Pascack Community Bank. This acquisition enables the Company to broaden its presence in Bergen and Essex counties. Effective as of the close of business on January 7, 2016, Pascack merged into the Company, and Pascack Community Bank merged into Lakeland Bank. The Merger Agreement provided that the shareholders of Pascack would receive, at their election, for each outstanding share of Pascack common stock that they own at the effective time of the merger, either 0.9576 shares of Lakeland Bancorp common stock or $11.35 in cash, subject to proration as described in the Merger Agreement, so that 90% of the aggregate merger consideration was shares of Lakeland Bancorp common stock and 10% was cash. Lakeland Bancorp issued an aggregate of 3,314,284 shares of its common stock in the merger and paid approximately $4.4 million in cash excluding the cash paid in connection with the cancellation of Pascack stock options. Outstanding Pascack stock options were paid out in cash at the difference between $11.35 and an average strike price of $7.37 for a total cash payment of $122,000. As of January 7, 2016, Pascack operated 8 branches in Bergen and Essex Counties in New Jersey, and had total assets, total loans, total deposits and total stockholders’ equity of $389.9 million, $320.9 million, $303.2 million and $26.9 million, respectively, before purchase accounting adjustments. This transaction resulted in $15.3 million of goodwill and generated $1.5 million in core deposit intangibles.

During the quarter ended June 30, 2016, 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 the fair market value of certain fixed assets which resulted in a $158,000 decrease in goodwill.

The acquisition was accounted for under the acquisition method of accounting and accordingly, assets acquired, liabilities assumed and consideration exchanged were recorded at their estimated fair values as of the acquisition date. Pascack’s assets were recorded at their preliminary estimated fair values as of January 7, 2016 and Pascack’s results of operations are 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. The following table summarizes the estimated fair value of the acquired assets and liabilities assumed at the date of acquisition for Pascack, net of cash consideration paid.

	On Janaury 7, 2016
	(in thousands)
Cash and cash equivalents	$	40,942
Securities held to maturity		3,925
Federal Home Loan Bank stock		2,962
Loans and leases		319,575
Premises and equipment		14,438
Goodwill		15,311
Identifiable intangible assets		1,514
Accrued interest receivable and other assets		6,672
Total assets acquired		405,339
Deposits		(304,466	)
Other borrowings		(57,308	)
Other liabilities		(6,344	)
Total liabilities assumed		(368,118	)
Net assets acquired	$	37,221

Loans acquired in the Pascack acquisition were recorded at fair value and subsequently accounted for in accordance with ASC Topic 310, and there was no carryover related allowance for loan and lease losses. The fair values of loans acquired from Pascack 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 loans acquired in the Pascack acquisition as of the closing date.

(in thousands)	Acquired Credit Impaired Loans		Acquired Non-Credit Impaired Loans		Total Acquired Loans
Contractually required principal and interest at acquisition	$	4,932	$	442,401	$	447,333
Contractual cash flows not expected to be collected (non-accretable difference)		4,030		—		4,030
Expected cash flows at acquisition	$	902	$	442,401	$	443,303
Interest component of expected cash flows (accretable difference)		85		123,643		123,728
Fair value of acquired loans	$	817	$	318,758	$	319,575

The core deposit intangible totaled $1.5 million and is being estimated over its estimated useful life of approximately 10 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 Pascack and Harmony acquisitions were expensed as incurred. During the six months ended June 30, 2016, the Company incurred $2.4 million of merger and acquisition integration-related expenses, 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 Pascack acquisition had been completed as of January 1, 2016, for the six months ended June 30, 2016 and as of January 1, 2015 for the six months ended June 30, 2015. 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 acquisition occurred as of the beginning of the periods presented, nor is it indicative of future results. Furthermore, the unaudited proforma 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 company to the Company’s policies that may have occurred as a result of the integration and consolidation of Pascack’s 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 Pascack since the acquisition because of the manner in which Pascack’s branches and lending team were immediately merged into Lakeland’s branches and lending team making such information impracticable to provide.

(in thousands)	Pro-Forma June 30, 2016		Pro-Forma June 30, 2015
Net interest income	$	69,209	$	64,518
Provision for loan losses		2,085		1,610
Noninterest income		9,756		9,887
Noninterest expense		46,978		46,506
Net income		19,855		17,528
Earnings per share:
Fully diluted	$	0.48	$	0.42

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Earnings Per Share

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Earnings Per Share

Note 3. Earnings Per Share

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

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
(In thousands, except per share data)	2016		2015		2016		2015
Net income available to common shareholders	$	10,130	$	7,862	$	18,238	$	16,192
Less: earnings allocated to participating securities		106		68		162		120
Net income allocated to common shareholders	$	10,024	$	7,794	$	18,076	$	16,072
Weighted average number of common shares outstanding - basic		41,238		37,854		41,084		37,827
Share-based plans		168		134		161		134
Weighted average number of common shares outstanding - diluted		41,406		37,988		41,245		37,961
Basic earnings per share	$	0.24	$	0.21	$	0.44	$	0.42
Diluted earnings per share	$	0.24	$	0.21	$	0.44	$	0.42

There were no antidilutive options to purchase common stock to be excluded from the computation for the three and six months ended June 30, 2016.

Options to purchase 83,437 shares of common stock at a weighted average price of $12.29 per share were outstanding and were not included in the computations of diluted earnings per share for the three and six months ended June 30, 2015 because the exercise price was greater than the average market price.

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Investment Securities

6 Months Ended

Jun. 30, 2016

Investments, Debt and Equity Securities [Abstract]

Investment Securities

Note 4. Investment Securities

Available For Sale	June 30, 2016									December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)									(in thousands)
U.S. treasury and U.S. government agencies	$	90,746	$	2,034	$	—		$	92,780	$	97,617	$	190	$	(674	)	$	97,133
Mortgage-backed securities, residential		292,829		4,835		(119	)		297,545		280,018		1,717		(2,283	)		279,452
Mortgage-backed securities, multifamily		10,220		288		—			10,508		10,249		—		(129	)		10,120
Obligations of states and political subdivisions		39,225		1,390		(8	)		40,607		35,639		910		(51	)		36,498
Other debt securities		—		—		—			—		498		3		—			501
Equity securities		16,715		2,490		(255	)		18,950		16,550		2,393		(298	)		18,645
	$	449,735	$	11,037	$	(382	)	$	460,390	$	440,571	$	5,213	$	(3,435	)	$	442,349
Held to Maturity	June 30, 2016									December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)									(in thousands)
U.S. government agencies	$	26,589	$	974	$	—		$	27,563	$	30,477	$	289	$	(94	)	$	30,672
Mortgage-backed securities, residential		37,972		882		(33	)		38,821		36,466		411		(426	)		36,451
Mortgage-backed securities, multifamily		2,110		23		—			2,133		2,159		—		(60	)		2,099
Obligations of states and political subdivisions		57,534		1,370		(62	)		58,842		45,617		809		(156	)		46,270
Other debt securities		2,016		72		—			2,088		2,021		81		—			2,102
	$	126,221	$	3,321	$	(95	)	$	129,447	$	116,740	$	1,590	$	(736	)	$	117,594

The following table shows investment securities by stated maturity. Securities backed by mortgages have expected maturities that differ from contractual maturities because borrowers have the right to call or prepay, and are, therefore, classified separately with no specific maturity date (in thousands):

			June 30, 2016
	Available for Sale				Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	2,389	$	2,405	$	20,956	$	20,924
Due after one year through five years		73,837		75,555		23,854		24,629
Due after five years through ten years		48,059		49,516		34,112		35,442
Due after ten years		5,686		5,911		7,217		7,498
		129,971		133,387		86,139		88,493
Mortgage-backed securities		303,049		308,053		40,082		40,954
Equity securities		16,715		18,950		—		—
Total securities	$	449,735	$	460,390	$	126,221	$	129,447

The following table shows proceeds from sales of securities and gross gains on sales of securities for the periods indicated (in thousands):

	For the Three Months Ended					For the Six Months Ended
	June 30,					June 30,
	2016		2015			2016		2015
Sale proceeds	$	—	$	11,472		$	15,654	$	11,472
Gross gains		—		28			370		28
Gross losses		—		(11	)		—		(11	)

There were no other-than-temporary impairments for the six months ended June 30, 2016 or 2015.

Gains or losses on sales of investment 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 $357.0 million and $347.7 million at June 30, 2016 and December 31, 2015, respectively, were pledged to secure public deposits and for other purposes required by applicable laws and regulations.

The following table indicates the length of time individual securities have been in a continuous unrealized loss position at June 30, 2016 and December 31, 2015:

June 30, 2016	Less than 12 months				12 months or longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Number of Securities		Fair Value		Unrealized Losses
	(in thousands)
Available for Sale
Mortgage-backed securities, residential	$	5,089	$	22	$	16,727	$	97		14	$	21,816	$	119
Obligations of states and political subdivisions		888		8		—		—		1		888		8
Equity securities		234		42		4,774		213		2		5,008		255
	$	6,211	$	72	$	21,501	$	310		17	$	27,712	$	382
Held to Maturity
Mortgage-backed securities, residential	$	2,291	$	10	$	1,121	$	23		3	$	3,412	$	33
Obligations of states and political subdivisions		15,204		61		752		1		13		15,956		62
	$	17,495	$	71	$	1,873	$	24		16	$	19,368	$	95
December 31, 2015	Less than 12 months				12 months or longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Number of Securities		Fair Value		Unrealized Losses
	(in thousands)
Available for Sale
U.S. treasury and U.S. government agencies	$	80,192	$	674	$	—	$	—		16	$	80,192	$	674
Mortgage-backed securities, residential		103,749		1,043		50,095		1,240		50		153,844		2,283
Mortgage-backed securities, multifamily		10,120		129		—		—		2		10,120		129
Obligations of states and political subdivisions		2,051		4		1,466		47		7		3,517		51
Other debt securities		—		—		—		—		—		—		—
Equity securities		247		24		4,643		274		3		4,890		298
	$	196,359	$	1,874	$	56,204	$	1,561		78	$	252,563	$	3,435
Held to Maturity
U.S. government agencies	$	15,683	$	94	$	—	$	—		3	$	15,683	$	94
Mortgage-backed securities, residential		20,283		262		6,687		164		11		26,970		426
Mortgage-backed securities, multifamily		1,223		18		876		42		2		2,099		60
Obligations of states and political subdivisions		9,181		149		2,043		7		15		11,224		156
	$	46,370	$	523	$	9,606	$	213		31	$	55,976	$	736

Management has evaluated the securities in the above table and has concluded that none of the securities are other-than-temporarily impaired. The cause of the fair values being below cost is due to interest rate movements and is deemed temporary. All investment securities are evaluated on a periodic basis to identify any factors that would require a 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 and consider the results of a discounted cash flow analysis.

As of June 30, 2016, the equity securities include investments in equity stocks and investments in investment funds that use net asset value per share to measure fair value. The equity stocks represent investments in other financial institutions for market appreciation purposes. Those equities had a purchase price of $2.7 million and a market value of $5.0 million as of June 30, 2016.

The investment funds include $2.9 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 June 30, 2016, the net amortized cost equaled the market value of the investment. There are no unfunded commitments related to this investment.

The investment funds also include $11.0 million that are invested in government guaranteed loans, mortgage-backed securities, small business loans and other instruments supporting affordable housing and economic development. The Company may redeem these funds at the net asset value calculated at the end of the current business day less any unpaid management fees. As of June 30, 2016, the amortized cost of these securities was $11.0 million and the fair value was $11.0 million. There are no restrictions on redemptions for the holdings in these investments other than the notice required by the fund manager. There are no unfunded commitments related to this investment.

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Loans, Leases and Other Real Estate

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Loans, Leases and Other Real Estate

Note 5. Loans, Leases and Other Real Estate

The following sets forth the composition of the Company’s loan and lease portfolio as of June 30, 2016 and December 31, 2015:

	June 30, 2016			December 31, 2015
	(in thousands)
Commercial, secured by real estate	$	2,200,147		$	1,761,589
Commercial, industrial and other		313,062			307,044
Leases		63,338			56,660
Real estate - residential mortgage		383,823			389,692
Real estate - construction		152,978			118,070
Home equity and consumer		340,956			334,891
Total loans		3,454,304			2,967,946
Less: deferred fees		(2,922	)		(2,746	)
Loans, net of deferred fees	$	3,451,382		$	2,965,200

At June 30, 2016 and December 31, 2015, home equity and consumer loans included overdraft deposit balances of $512,000 and $705,000, respectively. At June 30, 2016 and December 31, 2015, the Company had $807.0 million and $738.7 million in loans pledged for actual and potential borrowings at the Federal Home Loan Bank of New York (“FHLB”).

The carrying value of loans acquired in the Pascack acquisition and accounted for in accordance with ASC Subtopic 310-30, “Loans and Debt Securities Acquired with Deteriorated Credit Quality,” was $0.8 million at June 30, 2016, which was substantially the same as the balance at the Pascack acquisition date of January 7, 2016. Under ASC Subtopic 310-30, these loans, referred to as purchased credit impaired (“PCI”) loans, may be aggregated and accounted for as pools of loans if the loans being aggregated have common risk characteristics. The Company elected to account for the loans with evidence of credit deterioration individually rather than aggregate them into pools. The difference between the undiscounted cash flows expected at acquisition and the investment in the acquired loans, or the “accretable yield,” is recognized as interest income utilizing the level-yield method over the life of each loan. Contractually required payments for interest and principal that exceed the undiscounted cash flows expected at acquisition, or the “non-accretable difference,” are not recognized as a yield adjustment, as a loss accrual or as a valuation allowance.

Increases in expected cash flows subsequent to the acquisition are recognized prospectively through an adjustment of the yield on the loans over the remaining life, while decreases in expected cash flows are recognized as impairments through a loss provision and an increase in the allowance for loan and lease losses. Valuation allowances (recognized in the allowance for loan and lease losses) on these impaired loans reflect only losses incurred after the acquisition (representing all cash flows that were expected at acquisition but currently are not expected to be received).

There were no material increases or decreases in the expected cash flows between acquisition date and June 30, 2016. The Company recognized $31,000 of interest income on the credit impaired loans acquired.

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)	June 30, 2016		December 31, 2015
Commercial, secured by real estate	$	12,554	$	10,446
Commercial, industrial and other		41		103
Leases		159		316
Real estate - residential mortgage		8,865		8,664
Home equity and consumer		3,325		3,167
Total non-accrual loans and leases	$	24,944	$	22,696
Other real estate and other repossessed assets		1,594		983
TOTAL NON-PERFORMING ASSETS	$	26,538	$	23,679
Troubled debt restructurings, still accruing	$	9,509	$	10,108

Non-accrual loans included $2.4 million and $2.5 million of troubled debt restructurings as of June 30, 2016 and December 31, 2015, respectively. As of June 30, 2016 and December 31, 2015, the Company had $7.0 million and $7.9 million, respectively, in residential mortgages and consumer home equity loans that were in the process of foreclosure.

An age analysis of past due loans, segregated by class of loans as of June 30, 2016 and December 31, 2015, is as follows:

					Greater								Recorded
					Than						Total		Investment Greater
	30-59 Days		60-89 Days		89 Days		Total				Loans		than 89 Days and
	Past Due		Past Due		Past Due		Past Due		Current		and Leases		Still Accruing
					(in thousands)
June 30, 2016
Commercial, secured by real estate	$	5,357	$	4,150	$	9,269	$	18,776	$	2,181,371	$	2,200,147	$	—
Commercial, industrial and other		792		213		136		1,141		311,921		313,062		—
Leases		145		25		159		329		63,009		63,338		—
Real estate - residential mortgage		2,168		1,263		6,906		10,337		373,486		383,823		—
Real estate - construction		—		—		—		—		152,978		152,978		—
Home equity and consumer		650		146		2,568		3,364		337,592		340,956		42
	$	9,112	$	5,797	$	19,038	$	33,947	$	3,420,357	$	3,454,304	$	42
December 31, 2015
Commercial, secured by real estate	$	1,465	$	693	$	7,853	$	10,011	$	1,751,578	$	1,761,589	$	—
Commercial, industrial and other		205		—		103		308		306,736		307,044		—
Leases		62		26		316		404		56,256		56,660		—
Real estate—residential mortgage		1,361		725		7,472		9,558		380,134		389,692		—
Real estate—construction		—		—		—		—		118,070		118,070		—
Home equity and consumer		876		141		3,498		4,515		330,376		334,891		331
	$	3,969	$	1,585	$	19,242	$	24,796	$	2,943,150	$	2,967,946	$	331

Impaired Loans

The Company defines impaired loans as all non-accrual loans and leases with recorded investments of $500,000 or greater. Impaired loans also includes all loans modified in troubled debt restructurings. Impaired loans as of June 30, 2016 and December 31, 2015 are as follows:

			Contractual
	Recorded		Unpaid				Interest		Average
	Investment in		Principal		Specific		Income		Investment in
June 30, 2016	Impaired Loans		Balance		Allowance		Recognized		Impaired Loans
	(in thousands)
Loans without specific allowance:
Commercial, secured by real estate	$	12,615	$	13,090	$	—	$	116	$	13,015
Commercial, industrial and other		95		95		—		2		96
Leases		—		—		—		—		—
Real estate - residential mortgage		3,129		3,146		—		8		2,084
Real estate - construction		—		—		—		—		—
Home equity and consumer		537		537		—		—		545
Loans with specific allowance:
Commercial, secured by real estate		7,630		8,143		493		145		6,924
Commercial, industrial and other		916		916		43		20		938
Leases		—		—		—		—		3
Real estate - residential mortgage		934		1,008		31		15		938
Real estate - construction		—		—		—		—		—
Home equity and consumer		1,247		1,406		103		30		1,201
Total:
Commercial, secured by real estate	$	20,245	$	21,233	$	493	$	261	$	19,939
Commercial, industrial and other		1,011		1,011		43		22		1,034
Leases		—		—		—		—		3
Real estate - residential mortgage		4,063		4,154		31		23		3,022
Real estate - construction		—		—		—		—		—
Home equity and consumer		1,784		1,943		103		30		1,746
	$	27,103	$	28,341	$	670	$	336	$	25,744

			Contractual
	Recorded		Unpaid				Interest		Average
	Investment in		Principal		Specific		Income		Investment in
December 31, 2015	Impaired Loans		Balance		Allowance		Recognized		Impaired Loans
	(in thousands)
Loans without specific allowance:
Commercial, secured by real estate	$	14,065	$	14,712	$	—	$	344	$	12,928
Commercial, industrial and other		209		887		—		14		749
Leases		—		—		—		—		—
Real estate - residential mortgage		2,195		2,242		—		—		2,096
Real estate - construction		—		—		—		—		94
Home equity and consumer		574		575		—		5		762
Loans with specific allowance:
Commercial, secured by real estate		5,721		5,918		598		271		6,249
Commercial, industrial and other		1,023		1,023		77		32		717
Leases		6		6		1		—		—
Real estate - residential mortgage		832		865		73		37		840
Real estate - construction		380		380		21		13		308
Home equity and consumer		1,001		1,013		73		54		1,006
Total:
Commercial, secured by real estate	$	19,786	$	20,630	$	598	$	615	$	19,177
Commercial, industrial and other		1,232		1,910		77		46		1,466
Leases		6		6		1		—		—
Real estate - residential mortgage		3,027		3,107		73		37		2,936
Real estate - construction		380		380		21		13		402
Home equity and consumer		1,575		1,588		73		59		1,768
	$	26,006	$	27,621	$	843	$	770	$	25,749

Interest income recognized on impaired loans was $336,000 and $394,000, respectively, for the six months ended June 30, 2016 and 2015. Interest that would have been accrued on impaired loans during the first six months of 2016 and 2015 had the loans been performing under original terms would have been $828,000 and $794,000, 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 leases and assesses the quantitative and qualitative risks arising from the credit quality of its loans and leases. 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 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, 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 June 30, 2016 and December 31, 2015, by the risk ratings discussed above (in thousands):

	Commercial,		Commercial,
	Secured by		Industrial		Real Estate-
June 30, 2016	Real Estate		and Other		Construction
Risk Rating
1	$	—	$	4,790	$	—
2		—		12,859		—
3		90,333		39,328		—
4		664,396		120,918		21,003
5		1,299,359		111,842		128,998
5W - Watch		74,293		8,824		271
6 - Other assets especially mentioned		23,139		4,918		1,472
7 - Substandard		48,627		9,583		1,234
8 - Doubtful		—		—		—
9 - Loss		—		—		—
Total	$	2,200,147	$	313,062	$	152,978
	Commercial,		Commercial,
	Secured by		Industrial		Real Estate-
December 31, 2015	Real Estate		and Other		Construction
Risk Rating
1	$	—	$	3,517	$	—
2		—		9,662		—
3		65,199		56,895		—
4		526,909		111,702		19,125
5		1,044,888		105,301		94,535
5W - Watch		43,342		4,259		146
6 - Other assets especially mentioned		34,570		4,105		1,851
7 - Substandard		46,681		11,603		2,413
8 - Doubtful		—		—		—
9 - Loss		—		—		—
Total	$	1,761,589	$	307,044	$	118,070

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

Allowance for Loan and Lease Losses

In 2015, the Company refined and enhanced its assessment of the adequacy of the allowance for loan and lease losses by extending the lookback period on its commercial loan portfolios from three years to five years and by extending the lookback period for all other portfolios from two to three years in order to capture more of the economic cycle. It also enhanced its qualitative factor framework to include a factor that captures the risk related to appraised real estate values, and how those values could change in relation to a change in capitalization rates. This enhancement is meant to increase the level of precision in the allowance for loan and lease losses. As a result, the Company no longer has an “unallocated” segment in its allowance for loan losses, as the risks and uncertainties meant to be captured by the unallocated allowance have been included in the qualitative framework for the respective portfolios.

The following table details activity in the allowance for loan and lease losses by portfolio segment for the three and six months ended June 30, 2016 and 2015:

	Commercial,			Commercial,						Real Estate-					Home
	Secured by			Industrial						Residential			Real Estate-		Equity and
Three Months Ended June 30, 2016	Real Estate			and Other			Leases			Mortgage			Construction		Consumer			Total
	(in thousands)
Beginning Balance	$	20,077		$	2,597		$	588		$	2,266		$	1,504	$	3,521		$	30,553
Charge-offs		(139	)		(171	)		(205	)		(213	)		—		(317	)		(1,045	)
Recoveries		26			34			21			1			—		67			149
Provision		395			(248	)		220			110			284		249			1,010
Ending Balance	$	20,359		$	2,212		$	624		$	2,164		$	1,788	$	3,520		$	30,667

	Commercial,			Commercial,						Real Estate-					Home
	Secured by			Industrial						Residential			Real Estate-		Equity and
Three Months Ended June 30, 2015	Real Estate			and Other			Leases			Mortgage			Construction		Consumer			Unallocated		Total
	(in thousands)
Beginning Balance	$	12,560		$	3,307		$	1,038		$	3,298		$	637	$	6,924		$	2,741	$	30,505
Charge-offs		(805	)		(64	)		(102	)		(89	)		—		(415	)		—		(1,475	)
Recoveries		325			42			—			2			6		29			—		404
Provision		1,839			(417	)		18			(195	)		82		(619	)		32		740
Ending Balance	$	13,919		$	2,868		$	954		$	3,016		$	725	$	5,919		$	2,773	$	30,174

	Commercial,			Commercial,						Real Estate-					Home
	Secured by			Industrial						Residential			Real Estate-		Equity and
Six Months Ended June 30, 2016	Real Estate			and Other			Leases			Mortgage			Construction		Consumer			Total
	(in thousands)
Beginning Balance	$	20,223		$	2,637		$	460		$	2,588		$	1,591	$	3,375		$	30,874
Charge-offs		(274	)		(796	)		(275	)		(306	)		—		(937	)		(2,588	)
Recoveries		81			76			22			4			—		113			296
Provision		329			295			417			(122	)		197		969			2,085
Ending Balance	$	20,359		$	2,212		$	624		$	2,164		$	1,788	$	3,520		$	30,667

	Commercial,			Commercial,						Real Estate-						Home
	Secured by			Industrial						Residential			Real Estate-			Equity and
Six Months Ended June 30, 2015	Real Estate			and Other			Leases			Mortgage			Construction			Consumer			Unallocated		Total
	(in thousands)
Beginning Balance	$	13,577		$	3,196		$	582		$	4,020		$	553		$	6,333		$	2,423	$	30,684
Charge-offs		(1,351	)		(74	)		(529	)		(106	)		(20	)		(676	)		—		(2,756	)
Recoveries		364			84			20			3			106			59			—		636
Provision		1,329			(338	)		881			(901	)		86			203			350		1,610
Ending Balance	$	13,919		$	2,868		$	954		$	3,016		$	725		$	5,919		$	2,773	$	30,174

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

	Commercial,		Commercial,				Real Estate-				Home
	Secured by		Industrial				Residential		Real Estate-		Equity and
June 30, 2016	Real Estate		and Other		Leases		Mortgage		Construction		Consumer		Total
	(in thousands)
Ending Balance: Individually evaluated for impairment	$	20,245	$	1,011	$	—	$	4,063	$	—	$	1,784	$	27,103
Ending Balance: Collectively evaluated for impairment		2,179,493		311,720		63,338		379,760		152,978		339,153	$	3,426,442
Ending Balance: Loans acquired with deteriorated credit quality		409		331		—		—		—		19	$	759
Ending Balance (1)	$	2,200,147	$	313,062	$	63,338	$	383,823	$	152,978	$	340,956	$	3,454,304
(1)    Excludes deferred fees
	Commercial,		Commercial,				Real Estate-				Home
	Secured by		Industrial				Residential		Real Estate-		Equity and
December 31, 2015	Real Estate		and Other		Leases		Mortgage		Construction		Consumer		Total
	(in thousands)
Ending Balance: Individually evaluated for impairment	$	19,786	$	1,232	$	6	$	3,027	$	380	$	1,575	$	26,006
Ending Balance: Collectively evaluated for impairment		1,741,803		305,812		56,654		386,665		117,690		333,316	$	2,941,940
Ending Balance (1)	$	1,761,589	$	307,044	$	56,660	$	389,692	$	118,070	$	334,891	$	2,967,946

(1) Excludes deferred fees

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

	Commercial,		Commercial,				Real Estate-				Home
	Secured by		Industrial				Residential		Real Estate-		Equity and
June 30, 2016	Real Estate		and Other		Leases		Mortgage		Construction		Consumer		Total
	(in thousands)
Ending Balance: Individually evaluated for impairment	$	493	$	43	$	—	$	31	$	—	$	103	$	670
Ending Balance: Collectively evaluated for impairment		19,866		2,169		624		2,133		1,788		3,417	$	29,997
Ending Balance	$	20,359	$	2,212	$	624	$	2,164	$	1,788	$	3,520	$	30,667
	Commercial,		Commercial,				Real Estate-				Home
	Secured by		Industrial				Residential		Real Estate-		Equity and
December 31, 2015	Real Estate		and Other		Leases		Mortgage		Construction		Consumer		Total
	(in thousands)
Ending Balance: Individually evaluated for impairment	$	598	$	77	$	1	$	73	$	21	$	73	$	843
Ending Balance: Collectively evaluated for impairment		19,625		2,560		459		2,515		1,570		3,302	$	30,031
Ending Balance	$	20,223	$	2,637	$	460	$	2,588	$	1,591	$	3,375	$	30,874

Lakeland also maintains a reserve for unfunded lending commitments which is included in other liabilities. This reserve was $2.5 million and $2.0 million at June 30, 2016 and December 31, 2015, respectively. The Company analyzes the adequacy of the reserve for unfunded lending commitments in conjunction with its analysis of the adequacy of the allowance for loan and lease losses. For more information on this analysis, see “Risk Elements” in Management’s Discussion and Analysis.

Troubled Debt Restructurings

Troubled debt restructurings are those loans where concessions have been made due to borrowers’ financial difficulties. 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 and lease losses.

The following table summarizes loans that have been restructured during the three and six months ended June 30, 2016 and 2015:

	For the Three Months Ended						For the Three Months Ended
	June 30, 2016						June 30, 2015
			Pre-		Post-				Pre-		Post-
			Modification		Modification				Modification		Modification
			Outstanding		Outstanding				Outstanding		Outstanding
	Number of		Recorded		Recorded		Number of		Recorded		Recorded
	Contracts		Investment		Investment		Contracts		Investment		Investment
	(dollars in thousands)
Troubled Debt Restructurings
Commercial, secured by real estate		—	$	—	$	—		2	$	1,458	$	1,458
Commercial, industrial and other		—		—		—		2		784		784
		—	$	—	$	—		4	$	2,242	$	2,242
	For the Six Months Ended						For the Six Months Ended
	June 30, 2016						June 30, 2015
			Pre-		Post-				Pre-		Post-
			Modification		Modification				Modification		Modification
			Outstanding		Outstanding				Outstanding		Outstanding
	Number of		Recorded		Recorded		Number of		Recorded		Recorded
	Contracts		Investment		Investment		Contracts		Investment		Investment
	(dollars in thousands)
Troubled Debt Restructurings
Commercial, secured by real estate		—	$	—	$	—		2	$	1,458	$	1,458
Commercial, industrial and other		—		—		—		3		1,933		1,933
Leases		—		—		—		1		14		14
Real estate - construction		—		—		—		1		396		396
Home equity and consumer		3		285		285		1		9		9
		3	$	285	$	285		8	$	3,810	$	3,810

The following table summarizes as of June 30, 2016 and 2015, loans that were restructured within the previous twelve months that have subsequently defaulted:

	June 30, 2016				June 30, 2015
	Number of		Recorded		Number of		Recorded
	Contracts		Investment		Contracts		Investment
	(dollars in thousands)
Defaulted Troubled Debt Restructurings
Real estate - residential mortgage		—	$	—		1	$	483
Home equity and consumer		1		162		—		—
		1	$	162		1	$	483

Other Real Estate and Other Repossessed Assets

At June 30, 2016, the Company had other real estate owned of $1.6 million. It had no other repossessed assets as of June 30, 2016. At December 31, 2015, the Company had other real estate owned and other repossessed assets of $934,000 and $49,000, respectively. The other real estate owned that the Company held at June 30, 2016 and December 31, 2015 included $1.0 million and $805,000, respectively, in residential property acquired as a result of foreclosure proceedings or through a deed in lieu of foreclosure.

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Derivatives

6 Months Ended

Jun. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

Note 6. Derivatives

Lakeland is a party to interest rate derivatives that are not designated as hedging instruments. Under a program, Lakeland executes interest rate swaps with commercial lending customers to facilitate their respective risk management strategies. These interest rate swaps with customers are simultaneously offset by interest rate swaps that Lakeland executes with a third party, such that Lakeland minimizes its net risk exposure resulting from such transactions. Because the interest rate swaps associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings. The changes in the fair value of the swaps offset each other, except for the credit risk of the counterparties, which is determined by taking into consideration the risk rating, probability of default and loss given default for all counterparties. As of June 30, 2016 and December 31, 2015, Lakeland had $7.2 million and $2.5 million, respectively, in available for sale securities pledged for collateral on its interest rate swaps with the financial institution.

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 the cash flow hedge is to add stability to interest expense and to manage its exposure to interest rate movements. The Company used interest rate swaps designated as cash flow hedges which involved the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. In these particular hedges the Company is paying a third party an average of 1.10% in exchange for a payment at 3 month LIBOR. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive income and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the six months ended June 30, 2016, the Company did not record any hedge ineffectiveness.

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 $141,000 will be reclassified as an increase 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):

June 30, 2016	Notional Amount			Average Maturity (Years)		Weighted Average Fixed Rate			Weighted Average Variable Rate	Fair Value
Customer interest rate swaps	$	82,229			11.8		4.13	%	1 Mo Libor + 2.01	$	6,078
3rd Party interest rate swaps		(82,229	)		11.8		4.13	%	1 Mo Libor + 2.01		(6,078	)
Interest rate swap (cash flow hedge)		30,000			5		1.10	%	3 Mo. Libor		(193	)
December 31, 2015	Notional Amount			Average Maturity (Years)		Weighted Average Fixed Rate			Weighted Average Variable Rate	Fair Value
Customer interest rate swaps	$	35,664			14.6		4.54	%	1 Mo Libor + 2.00	$	1,518
3rd party interest rate swaps		(35,664	)		14.6		4.54	%	1 Mo Libor + 2.00		(1,518	)

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Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Note 7. Goodwill and Intangible Assets

The Company has recorded goodwill of $125.3 million and $110.0 million at June 30, 2016 and December 31, 2015, respectively, which includes $15.3 million from the Pascack merger in 2016, $22.9 million from the Somerset Hills acquisition in 2013 and $87.1 million from prior acquisitions. 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 recorded $1.5 million and $2.7 million in core deposit intangible for the Pascack and Somerset Hills acquisitions, respectively. Year-to-date, it has amortized $331,000 in core deposit intangible including $138,000 and $193,000 for Pascack and Somerset Hills, respectively. The estimated future amortization expense for the remainder of 2016 and for each of the succeeding five years ended December 31 is as follows (dollars in thousands):

For the Year Ended	Pascack		Somerset Hills
2016	$	138	$	173
2017		248		316
2018		220		267
2019		193		218
2020		165		168
2021		138		119

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Borrowings

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Borrowings

Note 8. Borrowings

At June 30, 2016, the Company had federal funds purchased and securities sold under agreements to repurchase of $99.6 million and $24.0 million respectively. The securities sold under agreements to repurchase are overnight sweep arrangement accounts with our customers. The Company also had $50.0 million in long-term securities sold under agreements to repurchase included in other borrowings which have maturities ranging from one to seven years. As of June 30, 2016, the Company had $102.5 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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Share-Based Compensation

6 Months Ended

Jun. 30, 2016

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

Share-Based Compensation

Note 9. Share-Based Compensation

The Company grants restricted stock, restricted stock units (RSUs) and stock options under the 2009 Equity Compensation Program. Share-based compensation expense of $1.1 million and $912,000 was recognized for the six months ended June 30, 2016 and 2015, respectively. As of June 30, 2016, there was unrecognized compensation cost of $240,000 related to unvested restricted stock that is expected to be recognized over a weighted average period of approximately 0.59 years. Unrecognized compensation expense related to RSUs was approximately $1.7 million as of June 30, 2016, and that cost is expected to be recognized over a period of 1.36 years. Unrecognized compensation expense related to unvested stock options was approximately $32,000 as of June 30, 2016 and is expected to be recognized over a period of 0.92 years.

In the first six months of 2016, the Company granted 23,952 shares of restricted stock to non-employee directors at a grant date fair value of $10.02 per share under the 2009 Equity Compensation Program. The restricted stock vests one year from the date it was granted. Compensation expense on this restricted stock is expected to be $240,000 over a one year period.

Information regarding the Company’s restricted stock and changes during the six months ended June 30, 2016 is as follows:

	Number of Shares			Weighted Average Price
Outstanding, January 1, 2016		73,500		$	9.33
Granted		23,952			10.02
Vested		(54,360	)		9.33
Forfeited		(168	)		9.12
Outstanding, June 30, 2016		42,924		$	9.72

In the first six months of 2016, the Company granted 150,226 RSUs to certain officers at a weighted average grant date fair value of $10.06 per share under the Company’s 2009 Equity Compensation Program. These units vest within a range of two to three years. A portion of these RSUs will vest subject to certain performance conditions in the restricted stock unit 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 half of 2016 is expected to average approximately $504,000 per year over a three year period. In the first six months of 2015, the Company granted 129,509 RSUs at a weighted average grant date fair value of $11.06 per share under the Company’s 2009 Equity Compensation Program. Compensation expense on these restricted stock units is expected to average approximately $477,000 per year over a three year period.

Information regarding the Company’s RSUs and changes during the six months ended June 30, 2016 is as follows:

	Number of Shares			Weighted Average Price
Outstanding, January 1, 2016		200,910		$	10.87
Granted		150,226			10.06
Vested		(66,749	)		10.28
Forfeited		(6,157	)		10.65
Outstanding, June 30, 2016		278,230		$	10.58

There were no grants of stock options in the first six months of 2016 or 2015. 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, 2016		175,892	$	8.38			$	602,236
Granted		—		—
Exercised		—		—
Forfeited		—		—
Expired		—		—
Outstanding, June 30, 2016		175,892	$	8.38		4.53	$	530,121
Options exercisable at June 30, 2016		165,274	$	8.30		4.38	$	509,241

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 first six months of 2016 and the exercise price, multiplied by the number of in-the-money options).

The aggregate intrinsic value of stock options exercised during the six months ended June 30, 2015 was $63,000. Exercise of stock options during the first six months of 2015 resulted in cash receipts of $113,000.

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Comprehensive Income

6 Months Ended

Jun. 30, 2016

Equity [Abstract]

Comprehensive Income

Note 10. Comprehensive Income

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

	June 30, 2016									June 30, 2015
	Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount			Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount
	(in thousands)									(in thousands)
For the quarter ended:
Net unrealized gains (losses) on available for sale securities
Net unrealized holding gains (losses) arising during period	$	2,684		($	987	)	$	1,697		($	3,466	)	$	1,289		($	2,177	)
Reclassification adjustment for net gains arising during the period		—			—			—			(26	)		9			(17	)
Net unrealized gains (losses)	$	2,684		($	987	)	$	1,697		($	3,492	)	$	1,298		($	2,194	)
Unrealized loss on derivatives		(193	)		67			(126	)		—			—			—
Change in minimum pension liability		8			(2	)		6			8			(3	)		5
Other comprehensive income (loss), net	$	2,499		($	922	)	$	1,577		($	3,484	)	$	1,295		($	2,189	)
	Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount			Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount
	(in thousands)									(in thousands)
For the six months ended:
Net unrealized gains on available for sale securities
Net unrealized holding gains arising during period	$	9,247		($	3,393	)	$	5,854		$	759		($	261	)	$	498
Reclassification adjustment for net gains arising during the period		(370	)		137			(233	)		(26	)		9			(17	)
Net unrealized gains	$	8,877		($	3,256	)	$	5,621		$	733		($	252	)	$	481
Unrealized loss on derivatives		(193	)		67			(126	)		—			—			—
Change in minimum pension liability		72			(28	)		44			16			(6	)		10
Other comprehensive income, net	$	8,756		($	3,217	)	$	5,539		$	749		($	258	)	$	491

The following table shows the changes in the balances of each of the components of other comprehensive income for the periods presented (in thousands):

Changes in Accumulated Other Comprehensive Income by component, net of tax

	For the three months ended June 30, 2016												For the three months ended June 30, 2015
	Unrealized Gains on Available-for-Sale Securities			Unrealized Losses on Derivatives			Pension Items			Total			Unrealized Gains (Losses) on Available-for-Sale Securities			Pension Items			Total
Beginning Balance	$	5,078		$	—		$	34		$	5,112		$	4,206		($	3	)	$	4,203
	(in thousands)
Other comprehensive income (loss) before classifications		1,697			(126	)		6			1,577			(2,177	)		5			(2,172	)
Amounts reclassified from accumulated other comprehensive income		—			—			—			—			(17	)		—			(17	)
Net current period other comprehensive income (loss)		1,697			(126	)		6			1,577			(2,194	)		5			(2,189	)
Ending Balance	$	6,775		($	126	)	$	40		$	6,689		$	2,012		$	2		$	2,014
	For the six months ended June 30, 2016												For the six months ended June 30, 2015
	Unrealized Gains on Available-for-sale Securities			Unrealized Losses on Derivatives			Pension Items			Total			Unrealized Gains on Available-for-sale Securities			Pension Items			Total
Beginning Balance	$	1,154		$	—		($	4	)	$	1,150		$	1,531		($	8	)	$	1,523
Other comprehensive income before classifications		5,854			(126	)		44			5,772			498			10			508
Amounts reclassified from accumulated other comprehensive income		(233	)		—			—			(233	)		(17	)		—			(17	)
Net current period other comprehensive income		5,621			(126	)		44			5,539			481			10			491
Ending Balance	$	6,775		($	126	)	$	40		$	6,689		$	2,012		$	2		$	2,014

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Estimated Fair Value of Financial Instruments and Fair Value Measurement

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Estimated Fair Value of Financial Instruments and Fair Value Measurement

Note 11. 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 it’s available for sale investment securities. 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, 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 six months ended June 30, 2016, 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:

	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
June 30, 2016
Assets:
Investment securities, available for sale
U.S. treasury and government agencies	$	92,780	$	6,060	$	86,720	$	—
Mortgage backed securities		308,053		—		308,053		—
Obligations of states and political subdivisions		40,607		—		40,607		—
Equity securities		18,950		5,038		13,912		—
Total securities available for sale		460,390		11,098		449,292		—
Derivative Assets		6,078		—		6,078		—
Total Assets		466,468	$	11,098	$	455,370	$	—
Liabilities:
Derivative Liabilities	$	6,271	$	—	$	6,271	$	—
Total Liabilities	$	6,271	$	—	$	6,271	$	—
December 31, 2015
Assets:
Investment securities, available for sale
U.S. treasury and government agencies	$	97,133	$	4,888	$	92,245	$	—
Mortgage backed securities		289,572		—		289,572		—
Obligations of states and political subdivisions		36,498		—		36,498		—
Other debt securities		501		—		501		—
Equity securities		18,645		5,052		13,593		—
Total securities available for sale		442,349		9,940		432,409		—
Derivative Assets		1,518		—		1,518		—
Total Assets		443,867	$	9,940	$	433,927	$	—
Liabilities:
Derivative Liabilities	$	1,518	$	—	$	1,518	$	—
Total Liabilities	$	1,518	$	—	$	1,518	$	—

The following table sets forth the Company’s assets subject to fair value adjustments (impairment) on a nonrecurring basis. Assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
	(in thousands)
June 30, 2016
Assets:
Impaired Loans and Leases	$	—	$	—	$	27,103	$	27,103
Loans held for sale		—		6,463		—		6,463
Other real estate owned and other repossessed assets		—		—		1,594		1,594
December 31, 2015
Assets:
Impaired Loans and Leases	$	—	$	—	$	26,006	$	26,006
Loans held for sale		—		1,233		—		1,233
Other real estate owned and other repossessed assets		—		—		983		983

Impaired loans are evaluated and valued at the time the loan is identified as impaired at the lower of cost or market value of the underlying collateral. Because most of Lakeland’s impaired loans are collateral dependent, fair value is generally measured based on the value of the collateral, less estimated costs to sell, securing these loans and leases and is classified at a level 3 in the fair value hierarchy. Collateral may be real estate, accounts receivable, inventory, equipment and/or other business assets. The value of the real estate is assessed based on appraisals by qualified third party licensed appraisers. The appraisers may use the sales comparison approach, the cost approach or 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. Loans that are not collateral dependent are evaluated based on a discounted cash flow method. 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.

Other real estate owned (OREO) and other repossessed assets, representing property acquired through foreclosure, are recorded at fair value less estimated disposal costs of the acquired property on the date of acquisition and thereafter remeasured and carried at lower of cost or fair market value. Fair value on other real estate owned is based on the appraised value of the collateral using the sales comparison approach or the income approach with 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. 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 June 30, 2016 and December 31, 2015 are outlined below.

This summary, as well as the table below, excludes financial assets and liabilities for which carrying value approximates fair value. For financial assets, these include cash and cash equivalents. For financial liabilities, these include noninterest bearing demand deposits, savings and interest-bearing transaction accounts and federal funds sold and securities sold under agreements to repurchase. The estimated fair value of demand, savings and interest-bearing transaction accounts is the amount payable on demand at the reporting date. Carrying value is used because there is no stated maturity on these accounts, and the customer has the ability to withdraw the funds immediately. Also excluded from this summary and the following table are those financial instruments recorded at fair value on a recurring basis, as previously described.

The fair value of Investment Securities Held to Maturity was measured using information from the same third-party servicer used for Investment Securities Available for Sale using the same methodologies discussed above. Investment Securities Held to Maturity includes $19.5 million in short-term municipal bond anticipation notes and $1.0 million in subordinated debt that are non-rated and do not have an active secondary market or information readily available on standard financial systems. As a result, the securities are classified as Level 3 securities. These are investments that management performs a credit analysis on 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 at June 30, 2016 and December 31, 2015 has been valued using a present value discounted cash flow where market prices are not available. The discount rate used in these calculations is the estimated current market rate adjusted for credit risk. The valuation of the Company’s loan portfolio is consistent with accounting guidance but does not fully incorporate the exit price approach.

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 June 30, 2016 and December 31, 2015:

	Carrying Value		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
June 30, 2016
Financial Instruments - Assets:
Investment securities held to maturity	$	126,221	$	129,447	$	—	$	109,946	$	19,501
Federal Home Loan Bank and other membership bank stocks		15,797		15,797		—		15,797		—
Loans and leases, net		3,420,715		3,439,536		—		—		3,439,536
Financial Instruments - Liabilities:
Certificates of deposit		477,336		478,596		—		478,596		—
Other borrowings		294,771		300,956		—		300,956		—
Subordinated debentures		31,238		21,242		—		—		21,242
December 31, 2015
Financial Instruments - Assets:
Investment securities held to maturity	$	116,740	$	117,594	$	—	$	110,293	$	7,301
Federal Home Loan Bank and other membership bank stocks		14,087		14,087		—		14,087		—
Loans and leases, net		2,934,326		2,930,188		—		—		2,930,188
Financial Instruments - Liabilities:
Certificates of deposit		343,321		341,998		—		341,998		—
Other borrowings		271,905		275,409		—		275,409		—
Subordinated debentures		31,238		24,366		—		—		24,366

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Statement of Cash Flow Information, Supplemental Information

6 Months Ended

Jun. 30, 2016

Supplemental Cash Flow Elements [Abstract]

Statement of Cash Flow Information, Supplemental Information

Note 12. Statement of Cash Flow Information, Supplemental Information

	For the six months ended June 30,
	2016			2015
	(in thousands)
Supplemental schedule of noncash investing and financing activities:
Cash paid during the period for income taxes	$	10,682		$	7,645
Cash paid during the period for interest		7,501			5,016
Transfer of loans and leases into other repossessed assets and other real estate owned		1,280			760
Acquisition of Pascack:
Non-cash assets acquired:
Federal Home Loan Bank stock		2,962			—
Investment securities held for maturity		3,925			—
Loans, including loans held for sale		319,575			—
Goodwill and other intangible assets, net		16,825			—
Other assets		21,110			—
Total non-cash assets acquired		364,397			—
Liabilities assumed:
Deposits		(304,466	)		—
Other borrowings		(57,308	)		—
Other liabilities		(6,344	)		—
Total liabilities assumed		(368,118	)		—
Common stock issued and fair value of stock options converted to Lakeland Bancorp stock options		37,221			—

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Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2016

Accounting Changes and Error Corrections [Abstract]

Recent Accounting Pronouncements

Note 13. Recent Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued an accounting standards update pertaining to the measurement of credit losses on financial instruments. This update requires the measurement of all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable and supportable financials. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. This update is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2019. The Company is currently assessing the impact that the guidance will have on the Company’s consolidated financial statements.

In March 2016, the FASB issued an accounting standards update to simplify employee share-based payment accounting. The areas for simplification in this update involve several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2017. The Company is currently assessing the impact that the guidance will have on the Company’s consolidated financial statements.

In March, 2016, the FASB issued an accounting standards update that requires that embedded derivatives be separated from the host contract and accounted for separately as derivatives if certain criteria are met, including the “clearly and closely related” criterion. The amendments in this update clarify the requirements for assessing whether contingent call or put options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. This update

will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2016. This guidance will be applied on a modified retrospective basis as of the beginning of the fiscal year that the amendment is effective. The adoption of this update is not expected to have a material impact on the Company’s financial statements.

In February 2016, FASB issued accounting guidance that requires all lessees to recognize a lease liability and a right-of-use asset, measured at the present value of the future minimum lease payments, at the lease commencement date. Lessor accounting remains largely unchanged under the new guidance. The guidance is effective for fiscal years beginning after December 15, 2018, including interim reporting periods within that reporting period, with early adoption permitted. A modified retrospective approach must be applied for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently assessing the impact that the guidance will have on the Company’s consolidated financial statements.

In January 2016, the FASB issued an accounting standards update intended to improve the recognition and measurement of financial instruments. Specifically, the accounting standards update requires all equity instruments, with the exception of those that are accounted for under the equity method of accounting, to be measured at fair value with changes in the fair value recognized through net income. Additionally, public business entities are required to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. The amendments in this update also require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. This amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The adoption of this update is not expected to have a material impact on the Company’s financial statements.

In September 2015, the FASB issued an accounting standards update simplifying the accounting for adjustments made to provisional amounts recognized in a business combination, eliminating the requirement to retrospectively account for those adjustments. To simplify the accounting for adjustments made to provisional amounts, the amendments in the accounting standards update require that the acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amount is determined. The acquirer is required to also record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. In addition, an entity is required to present separately on the face of the income statement or disclose in the notes to the financial statements the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. This amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The adoption of this update did not have a material impact on the Company’s financial statements.

In May 2015, the FASB issued an accounting standards update clarifying how investments valued using the net asset value practical expedient within the fair value hierarchy should be classified. The accounting standards update was issued to address diversity in practice by exempting investments measured using the net asset value expedient from categorization in the fair value hierarchy. This accounting standards update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The adoption of this update did not have a material impact on the Company’s financial statements.

In April 2015, the FASB issued an accounting standards update requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability consistent with the presentation of debt discounts. The purpose of this update is to simplify the presentation of debt issuance costs and to align the U.S. GAAP presentation of debt more closely with international accounting standards. In August 2015, the FASB issued a subsequent update which discussed presentation and subsequent measurement of debt issuance costs associated with line-of-credit arrangements. These amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The adoption of these updates did not have a material impact on the Company’s financial statements.

In January 2015, the FASB issued an accounting standards update regarding the elimination of the concept of the extraordinary items from the statement of operations. The purpose of this update is to simplify the statement of operations presentation and to align the U.S. GAAP income statement more closely with international accounting standards. This update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The adoption of this update did not have a material impact on the Company’s financial statements.

In May 2014, the FASB issued an accounting standards update that clarifies the principles for recognizing revenue. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to a

customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for these goods or services. To achieve that core principle, an entity should apply the following steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. In 2016, the FASB issued further implementation guidance regarding revenue recognition. This additional guidance included clarification on certain principal versus agent considerations within the implementation of the guidance as well as clarification related to identifying performance obligations and licensing. The guidance along with its updates is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company is still evaluating the potential impact on the Company’s financial statements.

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Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2016

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 the Bank’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 and six months ended June 30, 2016 do not necessarily indicate the results that the Company will achieve for all of 2016.

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. You should read these interim financial statements in conjunction with the audited consolidated financial statements and accompanying notes that are presented in the Lakeland Bancorp, Inc. Annual Report on Form 10-K for the year ended December 31, 2015.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued an accounting standards update pertaining to the measurement of credit losses on financial instruments. This update requires the measurement of all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable and supportable financials. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. This update is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2019. The Company is currently assessing the impact that the guidance will have on the Company’s consolidated financial statements.

In March 2016, the FASB issued an accounting standards update to simplify employee share-based payment accounting. The areas for simplification in this update involve several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2017. The Company is currently assessing the impact that the guidance will have on the Company’s consolidated financial statements.

In March, 2016, the FASB issued an accounting standards update that requires that embedded derivatives be separated from the host contract and accounted for separately as derivatives if certain criteria are met, including the “clearly and closely related” criterion. The amendments in this update clarify the requirements for assessing whether contingent call or put options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. This update

will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2016. This guidance will be applied on a modified retrospective basis as of the beginning of the fiscal year that the amendment is effective. The adoption of this update is not expected to have a material impact on the Company’s financial statements.

In February 2016, FASB issued accounting guidance that requires all lessees to recognize a lease liability and a right-of-use asset, measured at the present value of the future minimum lease payments, at the lease commencement date. Lessor accounting remains largely unchanged under the new guidance. The guidance is effective for fiscal years beginning after December 15, 2018, including interim reporting periods within that reporting period, with early adoption permitted. A modified retrospective approach must be applied for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently assessing the impact that the guidance will have on the Company’s consolidated financial statements.

In January 2016, the FASB issued an accounting standards update intended to improve the recognition and measurement of financial instruments. Specifically, the accounting standards update requires all equity instruments, with the exception of those that are accounted for under the equity method of accounting, to be measured at fair value with changes in the fair value recognized through net income. Additionally, public business entities are required to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. The amendments in this update also require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. This amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The adoption of this update is not expected to have a material impact on the Company’s financial statements.

In September 2015, the FASB issued an accounting standards update simplifying the accounting for adjustments made to provisional amounts recognized in a business combination, eliminating the requirement to retrospectively account for those adjustments. To simplify the accounting for adjustments made to provisional amounts, the amendments in the accounting standards update require that the acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amount is determined. The acquirer is required to also record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. In addition, an entity is required to present separately on the face of the income statement or disclose in the notes to the financial statements the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. This amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The adoption of this update did not have a material impact on the Company’s financial statements.

In May 2015, the FASB issued an accounting standards update clarifying how investments valued using the net asset value practical expedient within the fair value hierarchy should be classified. The accounting standards update was issued to address diversity in practice by exempting investments measured using the net asset value expedient from categorization in the fair value hierarchy. This accounting standards update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The adoption of this update did not have a material impact on the Company’s financial statements.

In April 2015, the FASB issued an accounting standards update requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability consistent with the presentation of debt discounts. The purpose of this update is to simplify the presentation of debt issuance costs and to align the U.S. GAAP presentation of debt more closely with international accounting standards. In August 2015, the FASB issued a subsequent update which discussed presentation and subsequent measurement of debt issuance costs associated with line-of-credit arrangements. These amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The adoption of these updates did not have a material impact on the Company’s financial statements.

In January 2015, the FASB issued an accounting standards update regarding the elimination of the concept of the extraordinary items from the statement of operations. The purpose of this update is to simplify the statement of operations presentation and to align the U.S. GAAP income statement more closely with international accounting standards. This update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The adoption of this update did not have a material impact on the Company’s financial statements.

In May 2014, the FASB issued an accounting standards update that clarifies the principles for recognizing revenue. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to a

customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for these goods or services. To achieve that core principle, an entity should apply the following steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. In 2016, the FASB issued further implementation guidance regarding revenue recognition. This additional guidance included clarification on certain principal versus agent considerations within the implementation of the guidance as well as clarification related to identifying performance obligations and licensing. The guidance along with its updates is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company is still evaluating the potential impact on the Company’s financial statements.

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Acquisitions (Tables)

6 Months Ended

Jun. 30, 2016

Business Combinations [Abstract]

Summary of Estimated Fair Value of Acquired Assets and Liabilities Assumed at Date of Acquisition, Net of Cash Consideration Paid

The following table summarizes the estimated fair value of the acquired assets and liabilities assumed at the date of acquisition for Pascack, net of cash consideration paid.

	On Janaury 7, 2016
	(in thousands)
Cash and cash equivalents	$	40,942
Securities held to maturity		3,925
Federal Home Loan Bank stock		2,962
Loans and leases		319,575
Premises and equipment		14,438
Goodwill		15,311
Identifiable intangible assets		1,514
Accrued interest receivable and other assets		6,672
Total assets acquired		405,339
Deposits		(304,466	)
Other borrowings		(57,308	)
Other liabilities		(6,344	)
Total liabilities assumed		(368,118	)
Net assets acquired	$	37,221

Summary of Loans Acquired

The following is a summary of the loans acquired in the Pascack acquisition as of the closing date.

(in thousands)	Acquired Credit Impaired Loans		Acquired Non-Credit Impaired Loans		Total Acquired Loans
Contractually required principal and interest at acquisition	$	4,932	$	442,401	$	447,333
Contractual cash flows not expected to be collected (non-accretable difference)		4,030		—		4,030
Expected cash flows at acquisition	$	902	$	442,401	$	443,303
Interest component of expected cash flows (accretable difference)		85		123,643		123,728
Fair value of acquired loans	$	817	$	318,758	$	319,575

Summary of Pro Forma Financial Information

(in thousands)	Pro-Forma June 30, 2016		Pro-Forma June 30, 2015
Net interest income	$	69,209	$	64,518
Provision for loan losses		2,085		1,610
Noninterest income		9,756		9,887
Noninterest expense		46,978		46,506
Net income		19,855		17,528
Earnings per share:
Fully diluted	$	0.48	$	0.42

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Computation of Basic and Diluted Earnings Per Share

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

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
(In thousands, except per share data)	2016		2015		2016		2015
Net income available to common shareholders	$	10,130	$	7,862	$	18,238	$	16,192
Less: earnings allocated to participating securities		106		68		162		120
Net income allocated to common shareholders	$	10,024	$	7,794	$	18,076	$	16,072
Weighted average number of common shares outstanding - basic		41,238		37,854		41,084		37,827
Share-based plans		168		134		161		134
Weighted average number of common shares outstanding - diluted		41,406		37,988		41,245		37,961
Basic earnings per share	$	0.24	$	0.21	$	0.44	$	0.42
Diluted earnings per share	$	0.24	$	0.21	$	0.44	$	0.42

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Investment Securities (Tables)

6 Months Ended

Jun. 30, 2016

Investments, Debt and Equity Securities [Abstract]

Reconciliation of Available-for-Sale Securities

Available For Sale	June 30, 2016									December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)									(in thousands)
U.S. treasury and U.S. government agencies	$	90,746	$	2,034	$	—		$	92,780	$	97,617	$	190	$	(674	)	$	97,133
Mortgage-backed securities, residential		292,829		4,835		(119	)		297,545		280,018		1,717		(2,283	)		279,452
Mortgage-backed securities, multifamily		10,220		288		—			10,508		10,249		—		(129	)		10,120
Obligations of states and political subdivisions		39,225		1,390		(8	)		40,607		35,639		910		(51	)		36,498
Other debt securities		—		—		—			—		498		3		—			501
Equity securities		16,715		2,490		(255	)		18,950		16,550		2,393		(298	)		18,645
	$	449,735	$	11,037	$	(382	)	$	460,390	$	440,571	$	5,213	$	(3,435	)	$	442,349

Reconciliation of Held-to-Maturity Securities

Held to Maturity	June 30, 2016									December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)									(in thousands)
U.S. government agencies	$	26,589	$	974	$	—		$	27,563	$	30,477	$	289	$	(94	)	$	30,672
Mortgage-backed securities, residential		37,972		882		(33	)		38,821		36,466		411		(426	)		36,451
Mortgage-backed securities, multifamily		2,110		23		—			2,133		2,159		—		(60	)		2,099
Obligations of states and political subdivisions		57,534		1,370		(62	)		58,842		45,617		809		(156	)		46,270
Other debt securities		2,016		72		—			2,088		2,021		81		—			2,102
	$	126,221	$	3,321	$	(95	)	$	129,447	$	116,740	$	1,590	$	(736	)	$	117,594

Summary of Contractual Maturities of Investment Securities Classified as Available for Sale and Held to Maturity

The following table shows investment securities by stated maturity. Securities backed by mortgages have expected maturities that differ from contractual maturities because borrowers have the right to call or prepay, and are, therefore, classified separately with no specific maturity date (in thousands):

			June 30, 2016
	Available for Sale				Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	2,389	$	2,405	$	20,956	$	20,924
Due after one year through five years		73,837		75,555		23,854		24,629
Due after five years through ten years		48,059		49,516		34,112		35,442
Due after ten years		5,686		5,911		7,217		7,498
		129,971		133,387		86,139		88,493
Mortgage-backed securities		303,049		308,053		40,082		40,954
Equity securities		16,715		18,950		—		—
Total securities	$	449,735	$	460,390	$	126,221	$	129,447

Sales of Securities and Gross Gains on Sales of Securities

The following table shows proceeds from sales of securities and gross gains on sales of securities for the periods indicated (in thousands):

	For the Three Months Ended					For the Six Months Ended
	June 30,					June 30,
	2016		2015			2016		2015
Sale proceeds	$	—	$	11,472		$	15,654	$	11,472
Gross gains		—		28			370		28
Gross losses		—		(11	)		—		(11	)

Reconciliation of Available-for-Sale and Held-to-Maturity Securities in Continuous Unrealized Loss Position

The following table indicates the length of time individual securities have been in a continuous unrealized loss position at June 30, 2016 and December 31, 2015:

June 30, 2016	Less than 12 months				12 months or longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Number of Securities		Fair Value		Unrealized Losses
	(in thousands)
Available for Sale
Mortgage-backed securities, residential	$	5,089	$	22	$	16,727	$	97		14	$	21,816	$	119
Obligations of states and political subdivisions		888		8		—		—		1		888		8
Equity securities		234		42		4,774		213		2		5,008		255
	$	6,211	$	72	$	21,501	$	310		17	$	27,712	$	382
Held to Maturity
Mortgage-backed securities, residential	$	2,291	$	10	$	1,121	$	23		3	$	3,412	$	33
Obligations of states and political subdivisions		15,204		61		752		1		13		15,956		62
	$	17,495	$	71	$	1,873	$	24		16	$	19,368	$	95
December 31, 2015	Less than 12 months				12 months or longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Number of Securities		Fair Value		Unrealized Losses
	(in thousands)
Available for Sale
U.S. treasury and U.S. government agencies	$	80,192	$	674	$	—	$	—		16	$	80,192	$	674
Mortgage-backed securities, residential		103,749		1,043		50,095		1,240		50		153,844		2,283
Mortgage-backed securities, multifamily		10,120		129		—		—		2		10,120		129
Obligations of states and political subdivisions		2,051		4		1,466		47		7		3,517		51
Other debt securities		—		—		—		—		—		—		—
Equity securities		247		24		4,643		274		3		4,890		298
	$	196,359	$	1,874	$	56,204	$	1,561		78	$	252,563	$	3,435
Held to Maturity
U.S. government agencies	$	15,683	$	94	$	—	$	—		3	$	15,683	$	94
Mortgage-backed securities, residential		20,283		262		6,687		164		11		26,970		426
Mortgage-backed securities, multifamily		1,223		18		876		42		2		2,099		60
Obligations of states and political subdivisions		9,181		149		2,043		7		15		11,224		156
	$	46,370	$	523	$	9,606	$	213		31	$	55,976	$	736

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Loans, Leases and Other Real Estate (Tables)

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Composition of Company`s Loan and Lease Portfolio

The following sets forth the composition of the Company’s loan and lease portfolio as of June 30, 2016 and December 31, 2015:

	June 30, 2016			December 31, 2015
	(in thousands)
Commercial, secured by real estate	$	2,200,147		$	1,761,589
Commercial, industrial and other		313,062			307,044
Leases		63,338			56,660
Real estate - residential mortgage		383,823			389,692
Real estate - construction		152,978			118,070
Home equity and consumer		340,956			334,891
Total loans		3,454,304			2,967,946
Less: deferred fees		(2,922	)		(2,746	)
Loans, net of deferred fees	$	3,451,382		$	2,965,200

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)	June 30, 2016		December 31, 2015
Commercial, secured by real estate	$	12,554	$	10,446
Commercial, industrial and other		41		103
Leases		159		316
Real estate - residential mortgage		8,865		8,664
Home equity and consumer		3,325		3,167
Total non-accrual loans and leases	$	24,944	$	22,696
Other real estate and other repossessed assets		1,594		983
TOTAL NON-PERFORMING ASSETS	$	26,538	$	23,679
Troubled debt restructurings, still accruing	$	9,509	$	10,108

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

An age analysis of past due loans, segregated by class of loans as of June 30, 2016 and December 31, 2015, is as follows:

					Greater								Recorded
					Than						Total		Investment Greater
	30-59 Days		60-89 Days		89 Days		Total				Loans		than 89 Days and
	Past Due		Past Due		Past Due		Past Due		Current		and Leases		Still Accruing
					(in thousands)
June 30, 2016
Commercial, secured by real estate	$	5,357	$	4,150	$	9,269	$	18,776	$	2,181,371	$	2,200,147	$	—
Commercial, industrial and other		792		213		136		1,141		311,921		313,062		—
Leases		145		25		159		329		63,009		63,338		—
Real estate - residential mortgage		2,168		1,263		6,906		10,337		373,486		383,823		—
Real estate - construction		—		—		—		—		152,978		152,978		—
Home equity and consumer		650		146		2,568		3,364		337,592		340,956		42
	$	9,112	$	5,797	$	19,038	$	33,947	$	3,420,357	$	3,454,304	$	42
December 31, 2015
Commercial, secured by real estate	$	1,465	$	693	$	7,853	$	10,011	$	1,751,578	$	1,761,589	$	—
Commercial, industrial and other		205		—		103		308		306,736		307,044		—
Leases		62		26		316		404		56,256		56,660		—
Real estate—residential mortgage		1,361		725		7,472		9,558		380,134		389,692		—
Real estate—construction		—		—		—		—		118,070		118,070		—
Home equity and consumer		876		141		3,498		4,515		330,376		334,891		331
	$	3,969	$	1,585	$	19,242	$	24,796	$	2,943,150	$	2,967,946	$	331

Impaired Loans with and without Specific Allowances

Impaired loans as of June 30, 2016 and December 31, 2015 are as follows:

			Contractual
	Recorded		Unpaid				Interest		Average
	Investment in		Principal		Specific		Income		Investment in
June 30, 2016	Impaired Loans		Balance		Allowance		Recognized		Impaired Loans
	(in thousands)
Loans without specific allowance:
Commercial, secured by real estate	$	12,615	$	13,090	$	—	$	116	$	13,015
Commercial, industrial and other		95		95		—		2		96
Leases		—		—		—		—		—
Real estate - residential mortgage		3,129		3,146		—		8		2,084
Real estate - construction		—		—		—		—		—
Home equity and consumer		537		537		—		—		545
Loans with specific allowance:
Commercial, secured by real estate		7,630		8,143		493		145		6,924
Commercial, industrial and other		916		916		43		20		938
Leases		—		—		—		—		3
Real estate - residential mortgage		934		1,008		31		15		938
Real estate - construction		—		—		—		—		—
Home equity and consumer		1,247		1,406		103		30		1,201
Total:
Commercial, secured by real estate	$	20,245	$	21,233	$	493	$	261	$	19,939
Commercial, industrial and other		1,011		1,011		43		22		1,034
Leases		—		—		—		—		3
Real estate - residential mortgage		4,063		4,154		31		23		3,022
Real estate - construction		—		—		—		—		—
Home equity and consumer		1,784		1,943		103		30		1,746
	$	27,103	$	28,341	$	670	$	336	$	25,744

			Contractual
	Recorded		Unpaid				Interest		Average
	Investment in		Principal		Specific		Income		Investment in
December 31, 2015	Impaired Loans		Balance		Allowance		Recognized		Impaired Loans
	(in thousands)
Loans without specific allowance:
Commercial, secured by real estate	$	14,065	$	14,712	$	—	$	344	$	12,928
Commercial, industrial and other		209		887		—		14		749
Leases		—		—		—		—		—
Real estate - residential mortgage		2,195		2,242		—		—		2,096
Real estate - construction		—		—		—		—		94
Home equity and consumer		574		575		—		5		762
Loans with specific allowance:
Commercial, secured by real estate		5,721		5,918		598		271		6,249
Commercial, industrial and other		1,023		1,023		77		32		717
Leases		6		6		1		—		—
Real estate - residential mortgage		832		865		73		37		840
Real estate - construction		380		380		21		13		308
Home equity and consumer		1,001		1,013		73		54		1,006
Total:
Commercial, secured by real estate	$	19,786	$	20,630	$	598	$	615	$	19,177
Commercial, industrial and other		1,232		1,910		77		46		1,466
Leases		6		6		1		—		—
Real estate - residential mortgage		3,027		3,107		73		37		2,936
Real estate - construction		380		380		21		13		402
Home equity and consumer		1,575		1,588		73		59		1,768
	$	26,006	$	27,621	$	843	$	770	$	25,749

Company's Commercial Loan Portfolio

The following table shows the Company’s commercial loan portfolio as of June 30, 2016 and December 31, 2015, by the risk ratings discussed above (in thousands):

	Commercial,		Commercial,
	Secured by		Industrial		Real Estate-
June 30, 2016	Real Estate		and Other		Construction
Risk Rating
1	$	—	$	4,790	$	—
2		—		12,859		—
3		90,333		39,328		—
4		664,396		120,918		21,003
5		1,299,359		111,842		128,998
5W - Watch		74,293		8,824		271
6 - Other assets especially mentioned		23,139		4,918		1,472
7 - Substandard		48,627		9,583		1,234
8 - Doubtful		—		—		—
9 - Loss		—		—		—
Total	$	2,200,147	$	313,062	$	152,978
	Commercial,		Commercial,
	Secured by		Industrial		Real Estate-
December 31, 2015	Real Estate		and Other		Construction
Risk Rating
1	$	—	$	3,517	$	—
2		—		9,662		—
3		65,199		56,895		—
4		526,909		111,702		19,125
5		1,044,888		105,301		94,535
5W - Watch		43,342		4,259		146
6 - Other assets especially mentioned		34,570		4,105		1,851
7 - Substandard		46,681		11,603		2,413
8 - Doubtful		—		—		—
9 - Loss		—		—		—
Total	$	1,761,589	$	307,044	$	118,070

Allowance for Loan and Lease Losses by Portfolio Segment

The following table details activity in the allowance for loan and lease losses by portfolio segment for the three and six months ended June 30, 2016 and 2015:

	Commercial,			Commercial,						Real Estate-					Home
	Secured by			Industrial						Residential			Real Estate-		Equity and
Three Months Ended June 30, 2016	Real Estate			and Other			Leases			Mortgage			Construction		Consumer			Total
	(in thousands)
Beginning Balance	$	20,077		$	2,597		$	588		$	2,266		$	1,504	$	3,521		$	30,553
Charge-offs		(139	)		(171	)		(205	)		(213	)		—		(317	)		(1,045	)
Recoveries		26			34			21			1			—		67			149
Provision		395			(248	)		220			110			284		249			1,010
Ending Balance	$	20,359		$	2,212		$	624		$	2,164		$	1,788	$	3,520		$	30,667

	Commercial,			Commercial,						Real Estate-					Home
	Secured by			Industrial						Residential			Real Estate-		Equity and
Three Months Ended June 30, 2015	Real Estate			and Other			Leases			Mortgage			Construction		Consumer			Unallocated		Total
	(in thousands)
Beginning Balance	$	12,560		$	3,307		$	1,038		$	3,298		$	637	$	6,924		$	2,741	$	30,505
Charge-offs		(805	)		(64	)		(102	)		(89	)		—		(415	)		—		(1,475	)
Recoveries		325			42			—			2			6		29			—		404
Provision		1,839			(417	)		18			(195	)		82		(619	)		32		740
Ending Balance	$	13,919		$	2,868		$	954		$	3,016		$	725	$	5,919		$	2,773	$	30,174

	Commercial,			Commercial,						Real Estate-					Home
	Secured by			Industrial						Residential			Real Estate-		Equity and
Six Months Ended June 30, 2016	Real Estate			and Other			Leases			Mortgage			Construction		Consumer			Total
	(in thousands)
Beginning Balance	$	20,223		$	2,637		$	460		$	2,588		$	1,591	$	3,375		$	30,874
Charge-offs		(274	)		(796	)		(275	)		(306	)		—		(937	)		(2,588	)
Recoveries		81			76			22			4			—		113			296
Provision		329			295			417			(122	)		197		969			2,085
Ending Balance	$	20,359		$	2,212		$	624		$	2,164		$	1,788	$	3,520		$	30,667

	Commercial,			Commercial,						Real Estate-						Home
	Secured by			Industrial						Residential			Real Estate-			Equity and
Six Months Ended June 30, 2015	Real Estate			and Other			Leases			Mortgage			Construction			Consumer			Unallocated		Total
	(in thousands)
Beginning Balance	$	13,577		$	3,196		$	582		$	4,020		$	553		$	6,333		$	2,423	$	30,684
Charge-offs		(1,351	)		(74	)		(529	)		(106	)		(20	)		(676	)		—		(2,756	)
Recoveries		364			84			20			3			106			59			—		636
Provision		1,329			(338	)		881			(901	)		86			203			350		1,610
Ending Balance	$	13,919		$	2,868		$	954		$	3,016		$	725		$	5,919		$	2,773	$	30,174

Loans Receivable Summarized by Portfolio Segment and Impairment Method

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

	Commercial,		Commercial,				Real Estate-				Home
	Secured by		Industrial				Residential		Real Estate-		Equity and
June 30, 2016	Real Estate		and Other		Leases		Mortgage		Construction		Consumer		Total
	(in thousands)
Ending Balance: Individually evaluated for impairment	$	20,245	$	1,011	$	—	$	4,063	$	—	$	1,784	$	27,103
Ending Balance: Collectively evaluated for impairment		2,179,493		311,720		63,338		379,760		152,978		339,153	$	3,426,442
Ending Balance: Loans acquired with deteriorated credit quality		409		331		—		—		—		19	$	759
Ending Balance (1)	$	2,200,147	$	313,062	$	63,338	$	383,823	$	152,978	$	340,956	$	3,454,304
(1)    Excludes deferred fees
	Commercial,		Commercial,				Real Estate-				Home
	Secured by		Industrial				Residential		Real Estate-		Equity and
December 31, 2015	Real Estate		and Other		Leases		Mortgage		Construction		Consumer		Total
	(in thousands)
Ending Balance: Individually evaluated for impairment	$	19,786	$	1,232	$	6	$	3,027	$	380	$	1,575	$	26,006
Ending Balance: Collectively evaluated for impairment		1,741,803		305,812		56,654		386,665		117,690		333,316	$	2,941,940
Ending Balance (1)	$	1,761,589	$	307,044	$	56,660	$	389,692	$	118,070	$	334,891	$	2,967,946

(1) Excludes deferred fees

Allowance for Loan Losses Summarized by Portfolio Segment and Impairment Classification

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

	Commercial,		Commercial,				Real Estate-				Home
	Secured by		Industrial				Residential		Real Estate-		Equity and
June 30, 2016	Real Estate		and Other		Leases		Mortgage		Construction		Consumer		Total
	(in thousands)
Ending Balance: Individually evaluated for impairment	$	493	$	43	$	—	$	31	$	—	$	103	$	670
Ending Balance: Collectively evaluated for impairment		19,866		2,169		624		2,133		1,788		3,417	$	29,997
Ending Balance	$	20,359	$	2,212	$	624	$	2,164	$	1,788	$	3,520	$	30,667
	Commercial,		Commercial,				Real Estate-				Home
	Secured by		Industrial				Residential		Real Estate-		Equity and
December 31, 2015	Real Estate		and Other		Leases		Mortgage		Construction		Consumer		Total
	(in thousands)
Ending Balance: Individually evaluated for impairment	$	598	$	77	$	1	$	73	$	21	$	73	$	843
Ending Balance: Collectively evaluated for impairment		19,625		2,560		459		2,515		1,570		3,302	$	30,031
Ending Balance	$	20,223	$	2,637	$	460	$	2,588	$	1,591	$	3,375	$	30,874

Summary of Restructured Loans

The following table summarizes loans that have been restructured during the three and six months ended June 30, 2016 and 2015:

	For the Three Months Ended						For the Three Months Ended
	June 30, 2016						June 30, 2015
			Pre-		Post-				Pre-		Post-
			Modification		Modification				Modification		Modification
			Outstanding		Outstanding				Outstanding		Outstanding
	Number of		Recorded		Recorded		Number of		Recorded		Recorded
	Contracts		Investment		Investment		Contracts		Investment		Investment
	(dollars in thousands)
Troubled Debt Restructurings
Commercial, secured by real estate		—	$	—	$	—		2	$	1,458	$	1,458
Commercial, industrial and other		—		—		—		2		784		784
		—	$	—	$	—		4	$	2,242	$	2,242
	For the Six Months Ended						For the Six Months Ended
	June 30, 2016						June 30, 2015
			Pre-		Post-				Pre-		Post-
			Modification		Modification				Modification		Modification
			Outstanding		Outstanding				Outstanding		Outstanding
	Number of		Recorded		Recorded		Number of		Recorded		Recorded
	Contracts		Investment		Investment		Contracts		Investment		Investment
	(dollars in thousands)
Troubled Debt Restructurings
Commercial, secured by real estate		—	$	—	$	—		2	$	1,458	$	1,458
Commercial, industrial and other		—		—		—		3		1,933		1,933
Leases		—		—		—		1		14		14
Real estate - construction		—		—		—		1		396		396
Home equity and consumer		3		285		285		1		9		9
		3	$	285	$	285		8	$	3,810	$	3,810

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

The following table summarizes as of June 30, 2016 and 2015, loans that were restructured within the previous twelve months that have subsequently defaulted:

	June 30, 2016				June 30, 2015
	Number of		Recorded		Number of		Recorded
	Contracts		Investment		Contracts		Investment
	(dollars in thousands)
Defaulted Troubled Debt Restructurings
Real estate - residential mortgage		—	$	—		1	$	483
Home equity and consumer		1		162		—		—
		1	$	162		1	$	483

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Derivatives (Tables)

6 Months Ended

Jun. 30, 2016

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):

June 30, 2016	Notional Amount			Average Maturity (Years)		Weighted Average Fixed Rate			Weighted Average Variable Rate	Fair Value
Customer interest rate swaps	$	82,229			11.8		4.13	%	1 Mo Libor + 2.01	$	6,078
3rd Party interest rate swaps		(82,229	)		11.8		4.13	%	1 Mo Libor + 2.01		(6,078	)
Interest rate swap (cash flow hedge)		30,000			5		1.10	%	3 Mo. Libor		(193	)
December 31, 2015	Notional Amount			Average Maturity (Years)		Weighted Average Fixed Rate			Weighted Average Variable Rate	Fair Value
Customer interest rate swaps	$	35,664			14.6		4.54	%	1 Mo Libor + 2.00	$	1,518
3rd party interest rate swaps		(35,664	)		14.6		4.54	%	1 Mo Libor + 2.00		(1,518	)

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Goodwill and Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Estimated Future Amortization Expense

The estimated future amortization expense for the remainder of 2016 and for each of the succeeding five years ended December 31 is as follows (dollars in thousands):

For the Year Ended	Pascack		Somerset Hills
2016	$	138	$	173
2017		248		316
2018		220		267
2019		193		218
2020		165		168
2021		138		119

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Share-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2016

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

Summary of Company's Restricted Stock

Information regarding the Company’s restricted stock and changes during the six months ended June 30, 2016 is as follows:

	Number of Shares			Weighted Average Price
Outstanding, January 1, 2016		73,500		$	9.33
Granted		23,952			10.02
Vested		(54,360	)		9.33
Forfeited		(168	)		9.12
Outstanding, June 30, 2016		42,924		$	9.72

Information regarding the Company’s RSUs and changes during the six months ended June 30, 2016 is as follows:

	Number of Shares			Weighted Average Price
Outstanding, January 1, 2016		200,910		$	10.87
Granted		150,226			10.06
Vested		(66,749	)		10.28
Forfeited		(6,157	)		10.65
Outstanding, June 30, 2016		278,230		$	10.58

Option Activity under the Company's Stock Option Plans

There were no grants of stock options in the first six months of 2016 or 2015. 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, 2016		175,892	$	8.38			$	602,236
Granted		—		—
Exercised		—		—
Forfeited		—		—
Expired		—		—
Outstanding, June 30, 2016		175,892	$	8.38		4.53	$	530,121
Options exercisable at June 30, 2016		165,274	$	8.30		4.38	$	509,241

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Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2016

Equity [Abstract]

Components of Other Comprehensive Income (Loss)

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

	June 30, 2016									June 30, 2015
	Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount			Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount
	(in thousands)									(in thousands)
For the quarter ended:
Net unrealized gains (losses) on available for sale securities
Net unrealized holding gains (losses) arising during period	$	2,684		($	987	)	$	1,697		($	3,466	)	$	1,289		($	2,177	)
Reclassification adjustment for net gains arising during the period		—			—			—			(26	)		9			(17	)
Net unrealized gains (losses)	$	2,684		($	987	)	$	1,697		($	3,492	)	$	1,298		($	2,194	)
Unrealized loss on derivatives		(193	)		67			(126	)		—			—			—
Change in minimum pension liability		8			(2	)		6			8			(3	)		5
Other comprehensive income (loss), net	$	2,499		($	922	)	$	1,577		($	3,484	)	$	1,295		($	2,189	)
	Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount			Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount
	(in thousands)									(in thousands)
For the six months ended:
Net unrealized gains on available for sale securities
Net unrealized holding gains arising during period	$	9,247		($	3,393	)	$	5,854		$	759		($	261	)	$	498
Reclassification adjustment for net gains arising during the period		(370	)		137			(233	)		(26	)		9			(17	)
Net unrealized gains	$	8,877		($	3,256	)	$	5,621		$	733		($	252	)	$	481
Unrealized loss on derivatives		(193	)		67			(126	)		—			—			—
Change in minimum pension liability		72			(28	)		44			16			(6	)		10
Other comprehensive income, net	$	8,756		($	3,217	)	$	5,539		$	749		($	258	)	$	491

Summary of Changes in Accumulated Other Comprehensive Income by Component, Net of Tax

The following table shows the changes in the balances of each of the components of other comprehensive income for the periods presented (in thousands):

Changes in Accumulated Other Comprehensive Income by component, net of tax

	For the three months ended June 30, 2016												For the three months ended June 30, 2015
	Unrealized Gains on Available-for-Sale Securities			Unrealized Losses on Derivatives			Pension Items			Total			Unrealized Gains (Losses) on Available-for-Sale Securities			Pension Items			Total
Beginning Balance	$	5,078		$	—		$	34		$	5,112		$	4,206		($	3	)	$	4,203
	(in thousands)
Other comprehensive income (loss) before classifications		1,697			(126	)		6			1,577			(2,177	)		5			(2,172	)
Amounts reclassified from accumulated other comprehensive income		—			—			—			—			(17	)		—			(17	)
Net current period other comprehensive income (loss)		1,697			(126	)		6			1,577			(2,194	)		5			(2,189	)
Ending Balance	$	6,775		($	126	)	$	40		$	6,689		$	2,012		$	2		$	2,014
	For the six months ended June 30, 2016												For the six months ended June 30, 2015
	Unrealized Gains on Available-for-sale Securities			Unrealized Losses on Derivatives			Pension Items			Total			Unrealized Gains on Available-for-sale Securities			Pension Items			Total
Beginning Balance	$	1,154		$	—		($	4	)	$	1,150		$	1,531		($	8	)	$	1,523
Other comprehensive income before classifications		5,854			(126	)		44			5,772			498			10			508
Amounts reclassified from accumulated other comprehensive income		(233	)		—			—			(233	)		(17	)		—			(17	)
Net current period other comprehensive income		5,621			(126	)		44			5,539			481			10			491
Ending Balance	$	6,775		($	126	)	$	40		$	6,689		$	2,012		$	2		$	2,014

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

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value of Financial Assets and Liabilities Measured on Recurring Basis

Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:

	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
June 30, 2016
Assets:
Investment securities, available for sale
U.S. treasury and government agencies	$	92,780	$	6,060	$	86,720	$	—
Mortgage backed securities		308,053		—		308,053		—
Obligations of states and political subdivisions		40,607		—		40,607		—
Equity securities		18,950		5,038		13,912		—
Total securities available for sale		460,390		11,098		449,292		—
Derivative Assets		6,078		—		6,078		—
Total Assets		466,468	$	11,098	$	455,370	$	—
Liabilities:
Derivative Liabilities	$	6,271	$	—	$	6,271	$	—
Total Liabilities	$	6,271	$	—	$	6,271	$	—
December 31, 2015
Assets:
Investment securities, available for sale
U.S. treasury and government agencies	$	97,133	$	4,888	$	92,245	$	—
Mortgage backed securities		289,572		—		289,572		—
Obligations of states and political subdivisions		36,498		—		36,498		—
Other debt securities		501		—		501		—
Equity securities		18,645		5,052		13,593		—
Total securities available for sale		442,349		9,940		432,409		—
Derivative Assets		1,518		—		1,518		—
Total Assets		443,867	$	9,940	$	433,927	$	—
Liabilities:
Derivative Liabilities	$	1,518	$	—	$	1,518	$	—
Total Liabilities	$	1,518	$	—	$	1,518	$	—

Fair Value of Assets Measured on Nonrecurring Basis

The following table sets forth the Company’s assets subject to fair value adjustments (impairment) on a nonrecurring basis. Assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
	(in thousands)
June 30, 2016
Assets:
Impaired Loans and Leases	$	—	$	—	$	27,103	$	27,103
Loans held for sale		—		6,463		—		6,463
Other real estate owned and other repossessed assets		—		—		1,594		1,594
December 31, 2015
Assets:
Impaired Loans and Leases	$	—	$	—	$	26,006	$	26,006
Loans held for sale		—		1,233		—		1,233
Other real estate owned and other repossessed assets		—		—		983		983

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 June 30, 2016 and December 31, 2015:

	Carrying Value		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
June 30, 2016
Financial Instruments - Assets:
Investment securities held to maturity	$	126,221	$	129,447	$	—	$	109,946	$	19,501
Federal Home Loan Bank and other membership bank stocks		15,797		15,797		—		15,797		—
Loans and leases, net		3,420,715		3,439,536		—		—		3,439,536
Financial Instruments - Liabilities:
Certificates of deposit		477,336		478,596		—		478,596		—
Other borrowings		294,771		300,956		—		300,956		—
Subordinated debentures		31,238		21,242		—		—		21,242
December 31, 2015
Financial Instruments - Assets:
Investment securities held to maturity	$	116,740	$	117,594	$	—	$	110,293	$	7,301
Federal Home Loan Bank and other membership bank stocks		14,087		14,087		—		14,087		—
Loans and leases, net		2,934,326		2,930,188		—		—		2,930,188
Financial Instruments - Liabilities:
Certificates of deposit		343,321		341,998		—		341,998		—
Other borrowings		271,905		275,409		—		275,409		—
Subordinated debentures		31,238		24,366		—		—		24,366

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Statement of Cash Flow Information, Supplemental Information (Tables)

6 Months Ended

Jun. 30, 2016

Supplemental Cash Flow Elements [Abstract]

Supplemental Schedule of Noncash Investing and Financing Activities

	For the six months ended June 30,
	2016			2015
	(in thousands)
Supplemental schedule of noncash investing and financing activities:
Cash paid during the period for income taxes	$	10,682		$	7,645
Cash paid during the period for interest		7,501			5,016
Transfer of loans and leases into other repossessed assets and other real estate owned		1,280			760
Acquisition of Pascack:
Non-cash assets acquired:
Federal Home Loan Bank stock		2,962			—
Investment securities held for maturity		3,925			—
Loans, including loans held for sale		319,575			—
Goodwill and other intangible assets, net		16,825			—
Other assets		21,110			—
Total non-cash assets acquired		364,397			—
Liabilities assumed:
Deposits		(304,466	)		—
Other borrowings		(57,308	)		—
Other liabilities		(6,344	)		—
Total liabilities assumed		(368,118	)		—
Common stock issued and fair value of stock options converted to Lakeland Bancorp stock options		37,221			—

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Acquisitions - Additional Information (Detail)			3 Months Ended	6 Months Ended
	Jul. 01, 2016 USD ($) Branch $ / shares shares	Jan. 07, 2016 USD ($) Branch $ / shares shares	Jun. 30, 2016 USD ($)	Jun. 30, 2016 USD ($)	Dec. 31, 2015 USD ($)
Business Acquisition, Contingent Consideration [Line Items]
Goodwill			$ 125,285,000	$ 125,285,000	$ 109,974,000
Core deposit intangible			1,500,000	$ 1,500,000
Decrease in goodwill			(158,000)
Estimated useful life of core deposit intangible				10 years
Merger and acquisition integration-related expenses			685,000	$ 2,406,000
Harmony Bank [Member]
Business Acquisition, Contingent Consideration [Line Items]
Date of Agreement				Jul. 01, 2016
Harmony Bank [Member] | Subsequent Event [Member]
Business Acquisition, Contingent Consideration [Line Items]
Shares to receive by the acquiree at the time of merger | shares	1.25
Consideration paid through common stock | shares	3,201,109
Total assets	$ 314,000,000
Total loans	261,000,000
Total deposits	277,000,000
Total stockholders' equity/capital	$ 24,000,000
Consideration price per share | $ / shares	$ 14.31
Average strike price | $ / shares	$ 9.07
Cash paid in connection with cancellation of the old stock options	$ 869,000
Closing stock price per share | $ / shares	$ 11.45
Harmony Bank [Member] | Subsequent Event [Member] | New Jersey [Member]
Business Acquisition, Contingent Consideration [Line Items]
Number of bank branches operated | Branch	3
Pascack Bancorp, Inc. [Member]
Business Acquisition, Contingent Consideration [Line Items]
Shares to receive by the acquiree at the time of merger | shares		0.9576
Consideration paid through common stock | shares		3,314,284
Date of Agreement				Jan. 07, 2016
Total assets		$ 405,339,000
Total loans		320,900,000
Total deposits		304,466,000
Total stockholders' equity/capital		$ 26,900,000
Consideration price per share | $ / shares		$ 11.35
Average strike price | $ / shares		$ 7.37
Cash paid in connection with cancellation of the old stock options		$ 122,000
Percentage of aggregate merger consideration in shares		90.00%
Percentage of aggregate merger consideration in cash		10.00%
Cash paid for acquisition		$ 4,400,000
Goodwill		15,311,000	15,300,000	$ 15,300,000
Core deposit intangible		$ 1,500,000	$ 1,500,000	1,500,000
Allowance for loan and lease losses				$ 0
Pascack Bancorp, Inc. [Member] | New Jersey [Member]
Business Acquisition, Contingent Consideration [Line Items]
Number of bank branches operated | Branch		8

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Acquisitions - Summary of Estimated Fair Value of Acquired Assets and Liabilities Assumed at Date of Acquisition, Net of Cash Consideration Paid (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Jan. 07, 2016	Dec. 31, 2015
Business Acquisition [Line Items]
Goodwill	$ 125,285		$ 109,974
Pascack Bancorp, Inc. [Member]
Business Acquisition [Line Items]
Cash and cash equivalents		$ 40,942
Securities held to maturity		3,925
Federal Home Loan Bank stock		2,962
Loans and leases		319,575
Premises and equipment		14,438
Goodwill	$ 15,300	15,311
Identifiable intangible assets		1,514
Accrued interest receivable and other assets		6,672
Total assets acquired		405,339
Deposits		(304,466)
Other borrowings		(57,308)
Other liabilities		(6,344)
Total liabilities assumed		(368,118)
Net assets acquired		$ 37,221

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Acquisitions - Summary of Loans Acquired (Detail) - Pascack Bancorp, Inc. [Member] $ in Thousands	Jun. 30, 2016 USD ($)
Business Acquisition [Line Items]
Contractually required principal and interest at acquisition	$ 447,333
Contractual cash flows not expected to be collected (non-accretable difference)	4,030
Expected cash flows at acquisition	443,303
Interest component of expected cash flows (accretable difference)	123,728
Fair value of acquired loans	319,575
Acquired Credit Impaired Loans [Member]
Business Acquisition [Line Items]
Contractually required principal and interest at acquisition	4,932
Contractual cash flows not expected to be collected (non-accretable difference)	4,030
Expected cash flows at acquisition	902
Interest component of expected cash flows (accretable difference)	85
Fair value of acquired loans	817
Acquired Non-Credit Impaired Loans [Member]
Business Acquisition [Line Items]
Contractually required principal and interest at acquisition	442,401
Expected cash flows at acquisition	442,401
Interest component of expected cash flows (accretable difference)	123,643
Fair value of acquired loans	$ 318,758

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Acquisitions - Summary of Pro Forma Financial Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Business Combinations [Abstract]
Net interest income	$ 69,209	$ 64,518
Provision for loan losses	2,085	1,610
Noninterest income	9,756	9,887
Noninterest expense	46,978	46,506
Net income	$ 19,855	$ 17,528
Earnings per share:
Fully diluted	$ 0.48	$ 0.42

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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		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Earnings Per Share [Abstract]
Net income available to common shareholders, Income	$ 10,130	$ 7,862	$ 18,238	$ 16,192
Less: earnings allocated to participating securities, Income	106	68	162	120
Net income allocated to common shareholders	$ 10,024	$ 7,794	$ 18,076	$ 16,072
Weighted average number of common shares outstanding - basic	41,238	37,854	41,084	37,827
Share-based plans	168	134	161	134
Weighted average number of common shares outstanding - diluted	41,406	37,988	41,245	37,961
Basic earnings per share	$ 0.24	$ 0.21	$ 0.44	$ 0.42
Diluted earnings per share	$ 0.24	$ 0.21	$ 0.44	$ 0.42

XML

Earnings Per Share - Additional Information (Detail) - Common Stock [Member] - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options to purchase	0	83,437	0	83,437
Weighted average price per share		$ 12.29		$ 12.29

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Investment Securities - Reconciliation of Available-for-Sale Securities (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Total securities, Available for Sale, Amortized Cost	$ 449,735	$ 440,571
Gross Unrealized Gains	11,037	5,213
Gross Unrealized Losses	(382)	(3,435)
Total securities, Available for Sale, Fair Value	460,390	442,349
US Treasury and Government Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Total securities, Available for Sale, Amortized Cost	90,746	97,617
Gross Unrealized Gains	2,034	190
Gross Unrealized Losses		(674)
Total securities, Available for Sale, Fair Value	92,780	97,133
Mortgage-Backed Securities, Residential [Member]
Schedule of Available-for-sale Securities [Line Items]
Total securities, Available for Sale, Amortized Cost	292,829	280,018
Gross Unrealized Gains	4,835	1,717
Gross Unrealized Losses	(119)	(2,283)
Total securities, Available for Sale, Fair Value	297,545	279,452
Mortgage-Backed Securities, Multifamily [Member]
Schedule of Available-for-sale Securities [Line Items]
Total securities, Available for Sale, Amortized Cost	10,220	10,249
Gross Unrealized Gains	288
Gross Unrealized Losses		(129)
Total securities, Available for Sale, Fair Value	10,508	10,120
Obligations of States and Political Subdivisions [Member]
Schedule of Available-for-sale Securities [Line Items]
Total securities, Available for Sale, Amortized Cost	39,225	35,639
Gross Unrealized Gains	1,390	910
Gross Unrealized Losses	(8)	(51)
Total securities, Available for Sale, Fair Value	40,607	36,498
Other Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Total securities, Available for Sale, Amortized Cost		498
Gross Unrealized Gains		3
Total securities, Available for Sale, Fair Value		501
Equity Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Total securities, Available for Sale, Amortized Cost	16,715	16,550
Gross Unrealized Gains	2,490	2,393
Gross Unrealized Losses	(255)	(298)
Total securities, Available for Sale, Fair Value	$ 18,950	$ 18,645

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Investment Securities - Reconciliation of Held-to-Maturity Securities (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	$ 126,221	$ 116,740
Gross Unrealized Gains	3,321	1,590
Gross Unrealized Losses	(95)	(736)
Fair Value	129,447	117,594
U.S. Government Agencies Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	26,589	30,477
Gross Unrealized Gains	974	289
Gross Unrealized Losses		(94)
Fair Value	27,563	30,672
Mortgage-Backed Securities, Residential [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	37,972	36,466
Gross Unrealized Gains	882	411
Gross Unrealized Losses	(33)	(426)
Fair Value	38,821	36,451
Mortgage-Backed Securities, Multifamily [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	2,110	2,159
Gross Unrealized Gains	23
Gross Unrealized Losses		(60)
Fair Value	2,133	2,099
Obligations of States and Political Subdivisions [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	57,534	45,617
Gross Unrealized Gains	1,370	809
Gross Unrealized Losses	(62)	(156)
Fair Value	58,842	46,270
Other Debt Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	2,016	2,021
Gross Unrealized Gains	72	81
Fair Value	$ 2,088	$ 2,102

XML

Investment Securities - Summary of Contractual Maturities of Investment Securities Classified as Available for Sale and Held to Maturity (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Available for Sale, Amortized Cost
Due in one year or less	$ 2,389
Due after one year through five years	73,837
Due after five years through ten years	48,059
Due after ten years	5,686
Total	129,971
Total securities, Available for Sale, Amortized Cost	449,735	$ 440,571
Available for Sale, Fair Value
Due in one year or less	2,405
Due after one year through five years	75,555
Due after five years through ten years	49,516
Due after ten years	5,911
Total	133,387
Total securities, Available for Sale, Fair Value	460,390	442,349
Held to Maturity, Amortized Cost
Due in one year or less	20,956
Due after one year through five years	23,854
Due after five years through ten years	34,112
Due after ten years	7,217
Total	86,139
Amortized Cost	126,221	116,740
Held to Maturity, Fair Value
Due in one year or less	20,924
Due after one year through five years	24,629
Due after five years through ten years	35,442
Due after ten years	7,498
Total	88,493
Total securities, Held to Maturity, Fair Value	129,447	117,594
Mortgage Backed Securities [Member]
Available for Sale, Amortized Cost
Available for Sale, Amortized Cost	303,049
Available for Sale, Fair Value
Available for Sale, Fair Value	308,053
Held to Maturity, Amortized Cost
Held to Maturity, Amortized Cost	40,082
Held to Maturity, Fair Value
Held to Maturity, Fair Value	40,954
Equity Securities [Member]
Available for Sale, Amortized Cost
Available for Sale, Amortized Cost	16,715
Total securities, Available for Sale, Amortized Cost	16,715	16,550
Available for Sale, Fair Value
Available for Sale, Fair Value	18,950
Total securities, Available for Sale, Fair Value	$ 18,950	$ 18,645

XML

Investment Securities - Sales of Securities and Gross Gains on Sales of Securities (Detail) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Investments, Debt and Equity Securities [Abstract]
Sale proceeds	$ 11,472,000	$ 15,654,000	$ 11,472,000
Gross gains	28,000	370,000	28,000
Gross losses	$ (11,000)	$ 0	$ (11,000)

XML

Investment Securities - Additional Information (Detail) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Investments, Debt and Equity Securities [Abstract]
Other-than-temporary impairments	$ 11,000	$ 0	$ 11,000
Securities, carrying value		357,000,000		$ 347,700,000
Purchase price of equities		2,700,000
Market value of equities		5,000,000
Investment in community development loans		$ 2,900,000
Redemption of funds		60 days
Investment in government guaranteed loans, mortgage-backed securities, small business loans		$ 11,000,000
Amortized cost of securities		11,000,000
Fair value of securities		11,000,000
Unfunded commitments		$ 0

XML

Investment Securities - Reconciliation of Available-for-Sale and Held-to-Maturity Securities in Continuous Unrealized Loss Position (Detail) $ in Thousands	Jun. 30, 2016 USD ($) Security	Dec. 31, 2015 USD ($) Security
Investment [Line Items]
Available for Sale, Less than 12 months, Fair value	$ 6,211	$ 196,359
Available for Sale, Less than 12 months, Unrealized Losses	72	1,874
Available for Sale, 12 months or longer, Fair value	21,501	56,204
Available for Sale, 12 months or longer, Unrealized Losses	$ 310	$ 1,561
Available for Sale, Number of securities | Security	17	78
Available for Sale, Total, Fair value	$ 27,712	$ 252,563
Available for Sale, Total, Unrealized Losses	382	3,435
Held to Maturity, Less than 12 months, Fair Value	17,495	46,370
Held to Maturity, Less than 12 months, Unrealized Losses	71	523
Held to Maturity, 12 months or longer, Fair Value	1,873	9,606
Held to Maturity, 12 months or longer, Unrealized Losses	$ 24	$ 213
Held to Maturity, Number of Securities | Security	16	31
Held to Maturity, Total, Fair Value	$ 19,368	$ 55,976
Held to Maturity, Total, Unrealized Losses	95	736
US Treasury and Government Agencies [Member]
Investment [Line Items]
Held to Maturity, Less than 12 months, Fair Value		15,683
Held to Maturity, Less than 12 months, Unrealized Losses		$ 94
Held to Maturity, Number of Securities | Security		3
Held to Maturity, Total, Fair Value		$ 15,683
Held to Maturity, Total, Unrealized Losses		94
Mortgage-Backed Securities, Residential [Member]
Investment [Line Items]
Held to Maturity, Less than 12 months, Fair Value	2,291	20,283
Held to Maturity, Less than 12 months, Unrealized Losses	10	262
Held to Maturity, 12 months or longer, Fair Value	1,121	6,687
Held to Maturity, 12 months or longer, Unrealized Losses	$ 23	$ 164
Held to Maturity, Number of Securities | Security	3	11
Held to Maturity, Total, Fair Value	$ 3,412	$ 26,970
Held to Maturity, Total, Unrealized Losses	33	426
Mortgage-Backed Securities, Multifamily [Member]
Investment [Line Items]
Held to Maturity, Less than 12 months, Fair Value		1,223
Held to Maturity, Less than 12 months, Unrealized Losses		18
Held to Maturity, 12 months or longer, Fair Value		876
Held to Maturity, 12 months or longer, Unrealized Losses		$ 42
Held to Maturity, Number of Securities | Security		2
Held to Maturity, Total, Fair Value		$ 2,099
Held to Maturity, Total, Unrealized Losses		60
Obligations of States and Political Subdivisions [Member]
Investment [Line Items]
Held to Maturity, Less than 12 months, Fair Value	15,204	9,181
Held to Maturity, Less than 12 months, Unrealized Losses	61	149
Held to Maturity, 12 months or longer, Fair Value	752	2,043
Held to Maturity, 12 months or longer, Unrealized Losses	$ 1	$ 7
Held to Maturity, Number of Securities | Security	13	15
Held to Maturity, Total, Fair Value	$ 15,956	$ 11,224
Held to Maturity, Total, Unrealized Losses	62	156
US Treasury and Government Agencies [Member]
Investment [Line Items]
Available for Sale, Less than 12 months, Fair value		80,192
Available for Sale, Less than 12 months, Unrealized Losses		$ 674
Available for Sale, Number of securities | Security		16
Available for Sale, Total, Fair value		$ 80,192
Available for Sale, Total, Unrealized Losses		674
Mortgage-Backed Securities, Residential [Member]
Investment [Line Items]
Available for Sale, Less than 12 months, Fair value	5,089	103,749
Available for Sale, Less than 12 months, Unrealized Losses	22	1,043
Available for Sale, 12 months or longer, Fair value	16,727	50,095
Available for Sale, 12 months or longer, Unrealized Losses	$ 97	$ 1,240
Available for Sale, Number of securities | Security	14	50
Available for Sale, Total, Fair value	$ 21,816	$ 153,844
Available for Sale, Total, Unrealized Losses	119	2,283
Mortgage-Backed Securities, Multifamily [Member]
Investment [Line Items]
Available for Sale, Less than 12 months, Fair value		10,120
Available for Sale, Less than 12 months, Unrealized Losses		$ 129
Available for Sale, Number of securities | Security		2
Available for Sale, Total, Fair value		$ 10,120
Available for Sale, Total, Unrealized Losses		129
Obligations of States and Political Subdivisions [Member]
Investment [Line Items]
Available for Sale, Less than 12 months, Fair value	888	2,051
Available for Sale, Less than 12 months, Unrealized Losses	$ 8	4
Available for Sale, 12 months or longer, Fair value		1,466
Available for Sale, 12 months or longer, Unrealized Losses		$ 47
Available for Sale, Number of securities | Security	1	7
Available for Sale, Total, Fair value	$ 888	$ 3,517
Available for Sale, Total, Unrealized Losses	8	51
Equity Securities [Member]
Investment [Line Items]
Available for Sale, Less than 12 months, Fair value	234	247
Available for Sale, Less than 12 months, Unrealized Losses	42	24
Available for Sale, 12 months or longer, Fair value	4,774	4,643
Available for Sale, 12 months or longer, Unrealized Losses	$ 213	$ 274
Available for Sale, Number of securities | Security	2	3
Available for Sale, Total, Fair value	$ 5,008	$ 4,890
Available for Sale, Total, Unrealized Losses	$ 255	$ 298

XML

Loans, Leases and Other Real Estate - Composition of Company`s Loan and Lease Portfolio (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	$ 3,454,304	$ 2,967,946
Less: deferred fees	(2,922)	(2,746)
Loans, net of deferred fees	3,451,382	2,965,200
Commercial, Secured by Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	2,200,147	1,761,589
Commercial, Industrial and Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	313,062	307,044
Leases [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	63,338	56,660
Real Estate-Residential Mortgage [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	383,823	389,692
Real Estate-Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	152,978	118,070
Home Equity and Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	$ 340,956	$ 334,891

XML

Loans, Leases and Other Real Estate - Additional Information (Detail) - USD ($)	6 Months Ended		12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans pledged for actual and potential borrowings at the Federal Home Loan Bank of New York	$ 807,000,000		$ 738,700,000
Interest income on credit impaired loans acquired	31,000
Troubled debt restructurings included in non accrual loans	2,400,000		2,500,000
Interest income on credit impaired loans acquired	336,000		770,000
Unfunded lending reserve	2,500,000		2,000,000
Other real estate owned	1,600,000		934,000
Other repossessed assets owned	0		49,000
Impaired Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Interest income on credit impaired loans acquired	336,000	$ 394,000
Interest accrued on impaired loans	828,000	$ 794,000
Pascack Bancorp, Inc. [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Debt Securities Acquired with Deteriorated Credit Quality	800,000
Residential Property [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Other real estate owned	$ 1,000,000		805,000
Commercial Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Lookback period	5 years	3 years
Other Portfolio [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Lookback period	3 years	2 years
Minimum [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Group of impaired loans with recorded investment	$ 500,000
Home Equity and Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Overdraft balances included in home equity and consumer loans	512,000		705,000
Interest income on credit impaired loans acquired	30,000		59,000
Residential Mortgages And Consumer Home Equity Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Mortgage loans that were in process of foreclosure	$ 7,000,000		$ 7,900,000

XML

Loans, Leases and Other Real Estate - Company's Non-Performing Assets and its Accruing Troubled Debt Restructurings, Excluding PCI Loans (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total non-accrual loans and leases	$ 24,944	$ 22,696
Other real estate and other repossessed assets	1,594	983
TOTAL NON-PERFORMING ASSETS	26,538	23,679
Troubled debt restructurings, still accruing	9,509	10,108
Commercial, Secured by Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total non-accrual loans and leases	12,554	10,446
Commercial, Industrial and Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total non-accrual loans and leases	41	103
Leases [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total non-accrual loans and leases	159	316
Real Estate-Residential Mortgage [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total non-accrual loans and leases	8,865	8,664
Home Equity and Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total non-accrual loans and leases	$ 3,325	$ 3,167

XML

Loans, Leases and Other Real Estate - Age Analysis of Past Due Loans, Segregated by Class of Loans (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 33,947	$ 24,796
Current	3,420,357	2,943,150
Total Loans and Leases	3,454,304	2,967,946
Recorded Investment Greater than 89 Days and Still Accruing	42	331
Commercial, Secured by Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	18,776	10,011
Current	2,181,371	1,751,578
Total Loans and Leases	2,200,147	1,761,589
Commercial, Industrial and Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,141	308
Current	311,921	306,736
Total Loans and Leases	313,062	307,044
Leases [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	329	404
Current	63,009	56,256
Total Loans and Leases	63,338	56,660
Real Estate-Residential Mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	10,337	9,558
Current	373,486	380,134
Total Loans and Leases	383,823	389,692
Real Estate-Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	152,978	118,070
Total Loans and Leases	152,978	118,070
Home Equity and Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	3,364	4,515
Current	337,592	330,376
Total Loans and Leases	340,956	334,891
Recorded Investment Greater than 89 Days and Still Accruing	42	331
30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	9,112	3,969
30-59 Days Past Due [Member] | Commercial, Secured by Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	5,357	1,465
30-59 Days Past Due [Member] | Commercial, Industrial and Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	792	205
30-59 Days Past Due [Member] | Leases [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	145	62
30-59 Days Past Due [Member] | Real Estate-Residential Mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	2,168	1,361
30-59 Days Past Due [Member] | Home Equity and Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	650	876
60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	5,797	1,585
60-89 Days Past Due [Member] | Commercial, Secured by Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	4,150	693
60-89 Days Past Due [Member] | Commercial, Industrial and Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	213
60-89 Days Past Due [Member] | Leases [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	25	26
60-89 Days Past Due [Member] | Real Estate-Residential Mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,263	725
60-89 Days Past Due [Member] | Home Equity and Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	146	141
Greater Than 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	19,038	19,242
Greater Than 89 Days Past Due [Member] | Commercial, Secured by Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	9,269	7,853
Greater Than 89 Days Past Due [Member] | Commercial, Industrial and Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	136	103
Greater Than 89 Days Past Due [Member] | Leases [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	159	316
Greater Than 89 Days Past Due [Member] | Real Estate-Residential Mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	6,906	7,472
Greater Than 89 Days Past Due [Member] | Home Equity and Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 2,568	$ 3,498

XML

Loans, Leases and Other Real Estate - Impaired Loans with and without Specific Allowances (Detail) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Financing Receivable, Impaired [Line Items]
Recorded Investment in Impaired Loans	$ 27,103	$ 26,006
Contractual Unpaid Principal Balance	28,341	27,621
Specific Allowance	670	843
Interest Income Recognized	336	770
Average Investment in Impaired Loans	25,744	25,749
Commercial, Secured by Real Estate [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment in Impaired Loans	20,245	19,786
Contractual Unpaid Principal Balance	21,233	20,630
Specific Allowance	493	598
Interest Income Recognized	261	615
Average Investment in Impaired Loans	19,939	19,177
Commercial, Secured by Real Estate [Member] | Loans with Specific Allowance [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment in Impaired Loans	7,630	5,721
Contractual Unpaid Principal Balance	8,143	5,918
Specific Allowance	493	598
Interest Income Recognized	145	271
Average Investment in Impaired Loans	6,924	6,249
Commercial, Secured by Real Estate [Member] | Loans without Specific Allowance [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment in Impaired Loans	12,615	14,065
Contractual Unpaid Principal Balance	13,090	14,712
Interest Income Recognized	116	344
Average Investment in Impaired Loans	13,015	12,928
Commercial, Industrial and Other [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment in Impaired Loans	1,011	1,232
Contractual Unpaid Principal Balance	1,011	1,910
Specific Allowance	43	77
Interest Income Recognized	22	46
Average Investment in Impaired Loans	1,034	1,466
Commercial, Industrial and Other [Member] | Loans with Specific Allowance [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment in Impaired Loans	916	1,023
Contractual Unpaid Principal Balance	916	1,023
Specific Allowance	43	77
Interest Income Recognized	20	32
Average Investment in Impaired Loans	938	717
Commercial, Industrial and Other [Member] | Loans without Specific Allowance [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment in Impaired Loans	95	209
Contractual Unpaid Principal Balance	95	887
Interest Income Recognized	2	14
Average Investment in Impaired Loans	96	749
Leases [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment in Impaired Loans		6
Contractual Unpaid Principal Balance		6
Specific Allowance		1
Average Investment in Impaired Loans	3
Leases [Member] | Loans with Specific Allowance [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment in Impaired Loans		6
Contractual Unpaid Principal Balance		6
Specific Allowance		1
Average Investment in Impaired Loans	3
Real Estate-Residential Mortgage [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment in Impaired Loans	4,063	3,027
Contractual Unpaid Principal Balance	4,154	3,107
Specific Allowance	31	73
Interest Income Recognized	23	37
Average Investment in Impaired Loans	3,022	2,936
Real Estate-Residential Mortgage [Member] | Loans with Specific Allowance [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment in Impaired Loans	934	832
Contractual Unpaid Principal Balance	1,008	865
Specific Allowance	31	73
Interest Income Recognized	15	37
Average Investment in Impaired Loans	938	840
Real Estate-Residential Mortgage [Member] | Loans without Specific Allowance [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment in Impaired Loans	3,129	2,195
Contractual Unpaid Principal Balance	3,146	2,242
Interest Income Recognized	8
Average Investment in Impaired Loans	2,084	2,096
Real Estate-Construction [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment in Impaired Loans		380
Contractual Unpaid Principal Balance		380
Specific Allowance		21
Interest Income Recognized		13
Average Investment in Impaired Loans		402
Real Estate-Construction [Member] | Loans with Specific Allowance [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment in Impaired Loans		380
Contractual Unpaid Principal Balance		380
Specific Allowance		21
Interest Income Recognized		13
Average Investment in Impaired Loans		308
Real Estate-Construction [Member] | Loans without Specific Allowance [Member]
Financing Receivable, Impaired [Line Items]
Average Investment in Impaired Loans		94
Home Equity and Consumer [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment in Impaired Loans	1,784	1,575
Contractual Unpaid Principal Balance	1,943	1,588
Specific Allowance	103	73
Interest Income Recognized	30	59
Average Investment in Impaired Loans	1,746	1,768
Home Equity and Consumer [Member] | Loans with Specific Allowance [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment in Impaired Loans	1,247	1,001
Contractual Unpaid Principal Balance	1,406	1,013
Specific Allowance	103	73
Interest Income Recognized	30	54
Average Investment in Impaired Loans	1,201	1,006
Home Equity and Consumer [Member] | Loans without Specific Allowance [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment in Impaired Loans	537	574
Contractual Unpaid Principal Balance	537	575
Interest Income Recognized		5
Average Investment in Impaired Loans	$ 545	$ 762

XML

Loans, Leases and Other Real Estate - Company's Commercial Loan Portfolio (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Commercial, Secured by Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Commercial loan portfolio	$ 2,200,147	$ 1,761,589
Commercial, Secured by Real Estate [Member] | Pass 3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Commercial loan portfolio	90,333	65,199
Commercial, Secured by Real Estate [Member] | Pass 4 [Member]
Financing Receivable, Recorded Investment [Line Items]
Commercial loan portfolio	664,396	526,909
Commercial, Secured by Real Estate [Member] | Pass 5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Commercial loan portfolio	1,299,359	1,044,888
Commercial, Secured by Real Estate [Member] | Watch [Member]
Financing Receivable, Recorded Investment [Line Items]
Commercial loan portfolio	74,293	43,342
Commercial, Secured by Real Estate [Member] | Other Assets Especially Mentioned [Member]
Financing Receivable, Recorded Investment [Line Items]
Commercial loan portfolio	23,139	34,570
Commercial, Secured by Real Estate [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Commercial loan portfolio	48,627	46,681
Commercial, Industrial and Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Commercial loan portfolio	313,062	307,044
Commercial, Industrial and Other [Member] | Pass 1 [Member]
Financing Receivable, Recorded Investment [Line Items]
Commercial loan portfolio	4,790	3,517
Commercial, Industrial and Other [Member] | Pass 2 [Member]
Financing Receivable, Recorded Investment [Line Items]
Commercial loan portfolio	12,859	9,662
Commercial, Industrial and Other [Member] | Pass 3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Commercial loan portfolio	39,328	56,895
Commercial, Industrial and Other [Member] | Pass 4 [Member]
Financing Receivable, Recorded Investment [Line Items]
Commercial loan portfolio	120,918	111,702
Commercial, Industrial and Other [Member] | Pass 5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Commercial loan portfolio	111,842	105,301
Commercial, Industrial and Other [Member] | Watch [Member]
Financing Receivable, Recorded Investment [Line Items]
Commercial loan portfolio	8,824	4,259
Commercial, Industrial and Other [Member] | Other Assets Especially Mentioned [Member]
Financing Receivable, Recorded Investment [Line Items]
Commercial loan portfolio	4,918	4,105
Commercial, Industrial and Other [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Commercial loan portfolio	9,583	11,603
Real Estate-Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Commercial loan portfolio	152,978	118,070
Real Estate-Construction [Member] | Pass 4 [Member]
Financing Receivable, Recorded Investment [Line Items]
Commercial loan portfolio	21,003	19,125
Real Estate-Construction [Member] | Pass 5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Commercial loan portfolio	128,998	94,535
Real Estate-Construction [Member] | Watch [Member]
Financing Receivable, Recorded Investment [Line Items]
Commercial loan portfolio	271	146
Real Estate-Construction [Member] | Other Assets Especially Mentioned [Member]
Financing Receivable, Recorded Investment [Line Items]
Commercial loan portfolio	1,472	1,851
Real Estate-Construction [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Commercial loan portfolio	$ 1,234	$ 2,413

XML

Loans, Leases and Other Real Estate - Allowance for Loan and Lease Losses by Portfolio Segment (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Financing Receivable, Recorded Investment, Past Due [Line Items]
Beginning Balance	$ 30,553	$ 30,505	$ 30,874	$ 30,684
Charge-offs	(1,045)	(1,475)	(2,588)	(2,756)
Recoveries	149	404	296	636
Provision	1,010	740	2,085	1,610
Ending Balance	30,667	30,174	30,667	30,174
Commercial, Secured by Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Beginning Balance	20,077	12,560	20,223	13,577
Charge-offs	(139)	(805)	(274)	(1,351)
Recoveries	26	325	81	364
Provision	395	1,839	329	1,329
Ending Balance	20,359	13,919	20,359	13,919
Commercial, Industrial and Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Beginning Balance	2,597	3,307	2,637	3,196
Charge-offs	(171)	(64)	(796)	(74)
Recoveries	34	42	76	84
Provision	(248)	(417)	295	(338)
Ending Balance	2,212	2,868	2,212	2,868
Leases [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Beginning Balance	588	1,038	460	582
Charge-offs	(205)	(102)	(275)	(529)
Recoveries	21		22	20
Provision	220	18	417	881
Ending Balance	624	954	624	954
Real Estate-Residential Mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Beginning Balance	2,266	3,298	2,588	4,020
Charge-offs	(213)	(89)	(306)	(106)
Recoveries	1	2	4	3
Provision	110	(195)	(122)	(901)
Ending Balance	2,164	3,016	2,164	3,016
Real Estate-Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Beginning Balance	1,504	637	1,591	553
Charge-offs				(20)
Recoveries		6		106
Provision	284	82	197	86
Ending Balance	1,788	725	1,788	725
Home Equity and Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Beginning Balance	3,521	6,924	3,375	6,333
Charge-offs	(317)	(415)	(937)	(676)
Recoveries	67	29	113	59
Provision	249	(619)	969	203
Ending Balance	$ 3,520	5,919	$ 3,520	5,919
Unallocated [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Beginning Balance		2,741		2,423
Provision		32		350
Ending Balance		$ 2,773		$ 2,773

XML

Loans, Leases and Other Real Estate - Loans Receivable Summarized by Portfolio Segment and Impairment Method (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Financing Receivable, Allowance for Credit Losses [Line Items]
Ending Balance: Individually evaluated for impairment	$ 27,103	$ 26,006
Ending Balance: Collectively evaluated for impairment	3,426,442	2,941,940
Ending Balance	3,454,304	2,967,946
Loans Acquired with Deteriorated Credit Quality [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Ending Balance: Loans acquired with deteriorated credit quality	759
Commercial, Secured by Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Ending Balance: Individually evaluated for impairment	20,245	19,786
Ending Balance: Collectively evaluated for impairment	2,179,493	1,741,803
Ending Balance	2,200,147	1,761,589
Commercial, Secured by Real Estate [Member] | Loans Acquired with Deteriorated Credit Quality [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Ending Balance: Loans acquired with deteriorated credit quality	409
Commercial, Industrial and Other [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Ending Balance: Individually evaluated for impairment	1,011	1,232
Ending Balance: Collectively evaluated for impairment	311,720	305,812
Ending Balance	313,062	307,044
Commercial, Industrial and Other [Member] | Loans Acquired with Deteriorated Credit Quality [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Ending Balance: Loans acquired with deteriorated credit quality	331
Leases [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Ending Balance: Individually evaluated for impairment		6
Ending Balance: Collectively evaluated for impairment	63,338	56,654
Ending Balance	63,338	56,660
Real Estate-Residential Mortgage [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Ending Balance: Individually evaluated for impairment	4,063	3,027
Ending Balance: Collectively evaluated for impairment	379,760	386,665
Ending Balance	383,823	389,692
Real Estate-Construction [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Ending Balance: Individually evaluated for impairment		380
Ending Balance: Collectively evaluated for impairment	152,978	117,690
Ending Balance	152,978	118,070
Home Equity and Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Ending Balance: Individually evaluated for impairment	1,784	1,575
Ending Balance: Collectively evaluated for impairment	339,153	333,316
Ending Balance	340,956	$ 334,891
Home Equity and Consumer [Member] | Loans Acquired with Deteriorated Credit Quality [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Ending Balance: Loans acquired with deteriorated credit quality	$ 19

XML

Loans, Leases and Other Real Estate - Allowance for Loan Losses Summarized by Portfolio Segment and Impairment Classification (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014
Financing Receivable, Allowance for Credit Losses [Line Items]
Ending Balance: Individually evaluated for impairment	$ 670		$ 843
Ending Balance: Collectively evaluated for impairment	29,997		30,031
Ending Balance	30,667	$ 30,553	30,874	$ 30,174	$ 30,505	$ 30,684
Commercial, Secured by Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Ending Balance: Individually evaluated for impairment	493		598
Ending Balance: Collectively evaluated for impairment	19,866		19,625
Ending Balance	20,359	20,077	20,223	13,919	12,560	13,577
Commercial, Industrial and Other [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Ending Balance: Individually evaluated for impairment	43		77
Ending Balance: Collectively evaluated for impairment	2,169		2,560
Ending Balance	2,212	2,597	2,637	2,868	3,307	3,196
Leases [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Ending Balance: Individually evaluated for impairment			1
Ending Balance: Collectively evaluated for impairment	624		459
Ending Balance	624	588	460	954	1,038	582
Real Estate-Residential Mortgage [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Ending Balance: Individually evaluated for impairment	31		73
Ending Balance: Collectively evaluated for impairment	2,133		2,515
Ending Balance	2,164	2,266	2,588	3,016	3,298	4,020
Real Estate-Construction [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Ending Balance: Individually evaluated for impairment			21
Ending Balance: Collectively evaluated for impairment	1,788		1,570
Ending Balance	1,788	1,504	1,591	725	637	553
Home Equity and Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Ending Balance: Individually evaluated for impairment	103		73
Ending Balance: Collectively evaluated for impairment	3,417		3,302
Ending Balance	$ 3,520	$ 3,521	$ 3,375	$ 5,919	$ 6,924	$ 6,333

XML

Loans, Leases and Other Real Estate - Summary of Restructured Loans (Detail) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2015 USD ($) Contract	Jun. 30, 2016 USD ($) Contract	Jun. 30, 2015 USD ($) Contract
Financing Receivable, Modifications [Line Items]
Number of Contracts | Contract	4	3	8
Pre-Modification Outstanding Recorded Investment	$ 2,242	$ 285	$ 3,810
Post-Modification Outstanding Recorded Investment	$ 2,242	$ 285	$ 3,810
Commercial, Secured by Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | Contract	2		2
Pre-Modification Outstanding Recorded Investment	$ 1,458		$ 1,458
Post-Modification Outstanding Recorded Investment	$ 1,458		$ 1,458
Commercial, Industrial and Other [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | Contract	2		3
Pre-Modification Outstanding Recorded Investment	$ 784		$ 1,933
Post-Modification Outstanding Recorded Investment	$ 784		$ 1,933
Leases [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | Contract			1
Pre-Modification Outstanding Recorded Investment			$ 14
Post-Modification Outstanding Recorded Investment			$ 14
Real Estate-Construction [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | Contract			1
Pre-Modification Outstanding Recorded Investment			$ 396
Post-Modification Outstanding Recorded Investment			$ 396
Home Equity and Consumer [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | Contract		3	1
Pre-Modification Outstanding Recorded Investment		$ 285	$ 9
Post-Modification Outstanding Recorded Investment		$ 285	$ 9

XML

Loans, Leases and Other Real Estate - Summary of Restructured Loans within Previous Twelve Months that have Subsequently Defaulted (Detail) $ in Thousands	6 Months Ended
	Jun. 30, 2016 USD ($) Contract	Jun. 30, 2015 USD ($) Contract
Financing Receivable, Modifications [Line Items]
Number of Contracts | Contract	1	1
Recorded Investment | $	$ 162	$ 483
Real Estate-Residential Mortgage [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | Contract		1
Recorded Investment | $		$ 483
Home Equity and Consumer [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | Contract	1
Recorded Investment | $	$ 162

XML

Derivatives - Additional Information (Detail)	1 Months Ended	3 Months Ended		6 Months Ended
	Jun. 30, 2016 USD ($) Derivative	Jun. 30, 2016 USD ($) Derivative	Jun. 30, 2015 USD ($)	Jun. 30, 2016 USD ($) Derivative	Jun. 30, 2015 USD ($)	Dec. 31, 2015 USD ($)
Derivative [Line Items]
Available for sale securities pledged for collateral	$ 7,200,000	$ 7,200,000		$ 7,200,000		$ 2,500,000
Interest expense		$ 3,935,000	$ 2,639,000	7,656,000	$ 5,113,000
Reclassification Out of Accumulated Other Comprehensive Income [Member]
Derivative [Line Items]
Interest expense				$ 141,000
Cash Flow Hedging [Member] | Interest Rate Swaps [Member]
Derivative [Line Items]
Number of derivatives | Derivative	2	2		2
Notional amount	$ 30,000,000	$ 30,000,000		$ 30,000,000
Average interest rate	1.10%	1.10%		1.10%
Variable rate basis				3 month LIBOR
Amount of ineffective hedges	$ 0

XML

Derivatives - Summary Information Regarding Derivatives (Detail) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Customer Interest Rate Swaps [Member]
Derivative [Line Items]
Derivatives, Asset Notional Amount	$ 82,229,000	$ 35,664,000
Derivatives, Average Maturity (Years)	11 years 9 months 18 days	14 years 7 months 6 days
Derivatives, Weighted Average Fixed Rate	4.13%	4.54%
Derivatives, Weighted Average Variable Rate, description	1 Mo Libor + 2.01	1 Mo Libor + 2.00
Derivatives, Weighted Average Variable Rate	2.01%	2.00%
Derivatives, Fair Value	$ 6,078,000	$ 1,518,000
3rd Party Interest Rate Swaps [Member]
Derivative [Line Items]
Derivatives, Liability Notional Amount	$ (82,229,000)	$ (35,664,000)
Derivatives, Average Maturity (Years)	11 years 9 months 18 days	14 years 7 months 6 days
Derivatives, Weighted Average Fixed Rate	4.13%	4.54%
Derivatives, Weighted Average Variable Rate, description	1 Mo Libor + 2.01	1 Mo Libor + 2.00
Derivatives, Weighted Average Variable Rate	2.01%	2.00%
Derivatives, Fair Value	$ (6,078,000)	$ (1,518,000)
Interest Rate Swap Cash Flow Hedge [Member]
Derivative [Line Items]
Derivatives, Asset Notional Amount	$ 30,000,000
Derivatives, Average Maturity (Years)	5 years
Derivatives, Weighted Average Fixed Rate	1.10%
Derivatives, Weighted Average Variable Rate, description	3 Mo. Libor
Derivatives, Fair Value	$ (193,000)

XML

Goodwill and Intangible Assets - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Jan. 07, 2016	Dec. 31, 2015	Dec. 31, 2013
Goodwill And Intangible Assets [Line Items]
Goodwill	$ 125,285,000		$ 125,285,000			$ 109,974,000
Core deposit intangible	1,500,000		1,500,000
Amortization of core deposit intangible	164,000	$ 107,000	331,000	$ 218,000
Pascack Bancorp, Inc. [Member]
Goodwill And Intangible Assets [Line Items]
Goodwill	15,300,000		15,300,000		$ 15,311,000
Core deposit intangible	1,500,000		1,500,000		$ 1,500,000
Amortization of core deposit intangible			138,000
Somerset Hills Acquisition [Member]
Goodwill And Intangible Assets [Line Items]
Goodwill							$ 22,900,000
Core deposit intangible	2,700,000		2,700,000
Amortization of core deposit intangible			193,000
Prior Acquisitions [Member]
Goodwill And Intangible Assets [Line Items]
Goodwill	$ 87,100,000		$ 87,100,000

XML

Goodwill and Intangible Assets - Schedule of Estimated Future Amortization Expense (Detail) $ in Thousands	Jun. 30, 2016 USD ($)
Pascack Bancorp, Inc. [Member]
Finite-Lived Intangible Assets [Line Items]
2016	$ 138
2017	248
2018	220
2019	193
2020	165
2021	138
Somerset Hills Acquisition [Member]
Finite-Lived Intangible Assets [Line Items]
2016	173
2017	316
2018	267
2019	218
2020	168
2021	$ 119

XML

Borrowings - Additional Information (Detail) $ in Millions	6 Months Ended
	Jun. 30, 2016 USD ($)
Debt Instrument [Line Items]
Federal funds purchased	$ 99.6
Securities sold under agreements to repurchase	24.0
Securities sold under agreement to repurchase maturities due	50.0
Securities Sold under Agreements to Repurchase [Member]
Debt Instrument [Line Items]
Pledged securities	$ 102.5
Minimum [Member]
Debt Instrument [Line Items]
Borrowings maturity period	1 year
Maximum [Member]
Debt Instrument [Line Items]
Borrowings maturity period	7 years

XML

Share-Based Compensation - Additional Information (Detail) - USD ($)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 1,107,000	$ 912,000
Stock options granted	0
Aggregate intrinsic value of stock options exercised		63,000
Cash receipts due to exercise of stock options		$ 113,000
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost	$ 240,000
Unrecognized compensation expense, period of recognition	7 months 2 days
Granted, Number of shares	23,952
Granted, Weighted Average Price	$ 10.02
Restricted Stock [Member] | 2009 Equity Compensation Program [Member] | Non-Employee Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Number of shares	23,952
Granted, Weighted Average Price	$ 10.02
Share-based compensation expense	$ 240,000
Vesting period	1 year
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost	$ 32,000
Unrecognized compensation expense, period of recognition	11 months 1 day
Stock options granted	0	0
RSUs [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost	$ 1,700,000
Unrecognized compensation expense, period of recognition	1 year 4 months 10 days
Granted, Number of shares	150,226
Granted, Weighted Average Price	$ 10.06
RSUs [Member] | 2009 Equity Compensation Program [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Number of shares	150,226	129,509
Granted, Weighted Average Price	$ 10.06	$ 11.06
Share-based compensation expense	$ 504,000	$ 477,000
Vesting period	3 years	3 years
RSUs [Member] | 2009 Equity Compensation Program [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	2 years
RSUs [Member] | 2009 Equity Compensation Program [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years

XML

Share-Based Compensation - Summary of Company's Restricted Stock (Detail)	6 Months Ended
	Jun. 30, 2016 $ / shares shares
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding, Number of Shares, Beginning balance | shares	73,500
Granted, Number of Shares | shares	23,952
Vested, Number of Shares | shares	(54,360)
Forfeited, Number of Shares | shares	(168)
Outstanding, Number of Shares, Ending balance | shares	42,924
Outstanding, Weighted Average Price, Beginning balance | $ / shares	$ 9.33
Granted, Weighted Average Price | $ / shares	10.02
Vested, Weighted Average Price | $ / shares	9.33
Forfeited, Weighted Average Price | $ / shares	9.12
Outstanding, Weighted Average Price, Ending balance | $ / shares	$ 9.72
RSUs [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding, Number of Shares, Beginning balance | shares	200,910
Granted, Number of Shares | shares	150,226
Vested, Number of Shares | shares	(66,749)
Forfeited, Number of Shares | shares	(6,157)
Outstanding, Number of Shares, Ending balance | shares	278,230
Outstanding, Weighted Average Price, Beginning balance | $ / shares	$ 10.87
Granted, Weighted Average Price | $ / shares	10.06
Vested, Weighted Average Price | $ / shares	10.28
Forfeited, Weighted Average Price | $ / shares	10.65
Outstanding, Weighted Average Price, Ending balance | $ / shares	$ 10.58

XML

Share-Based Compensation - Option Activity under the Company's Stock Option Plans (Detail)	6 Months Ended
	Jun. 30, 2016 USD ($) $ / shares shares
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Outstanding, Number of Shares, Beginning balance	175,892
Granted, Number of Shares	0
Exercised, Number of Shares	0
Forfeited, Number of Shares	0
Expired, Number of Shares	0
Outstanding, Number of Shares, Ending balance	175,892
Options exercisable, Number of Shares, Ending balance	165,274
Outstanding, Weighted Average Exercise Price, Beginning balance | $ / shares	$ 8.38
Outstanding, Weighted Average Exercise Price, Ending balance | $ / shares	8.38
Options exercisable, Weighted Average Exercise Price, Ending balance | $ / shares	$ 8.30
Outstanding, Weighted Average Remaining Contractual Term (in years), Ending balance	4 years 6 months 11 days
Options exercisable, Weighted Average Remaining Contractual Term (in years), Ending balance	4 years 4 months 17 days
Outstanding, Aggregate Intrinsic Value, Beginning balance | $	$ 602,236
Outstanding, Aggregate Intrinsic Value, Ending balance | $	530,121
Options exercisable,Aggregate Intrinsic Value, Ending balance | $	$ 509,241

XML

Comprehensive Income - Components of Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Net unrealized gains (losses) on available for sale securities
Net unrealized holding gains (losses) arising during period, Before Tax Amount	$ 2,684	$ (3,466)	$ 9,247	$ 759
Reclassification adjustment for net gains arising during the period, Before Tax Amount		(26)	(370)	(26)
Net unrealized gains (losses), Before Tax Amount	2,684	(3,492)	8,877	733
Unrealized loss on derivatives, Before Tax Amount	(193)		(193)
Change in minimum pension liability, Before Tax Amount	8	8	72	16
Other comprehensive income (loss), net, Before Tax Amount	2,499	(3,484)	8,756	749
Net unrealized holding gains (losses) arising during period, Tax Benefit (Expense)	(987)	1,289	(3,393)	(261)
Reclassification adjustment for net gains arising during the period, Tax Benefit (Expense)		9	137	9
Net unrealized gains (losses), Tax Benefit (Expense)	(987)	1,298	(3,256)	(252)
Unrealized loss on derivatives, Tax Benefit (Expense)	67		67
Change in minimum pension liability, Tax Benefit (Expense)	(2)	(3)	(28)	(6)
Other comprehensive income (loss), net, Tax Benefit (Expense)	(922)	1,295	(3,217)	(258)
Net unrealized holding gains (losses) arising during period, Net of Tax Amount	1,697	(2,177)	5,854	498
Reclassification adjustment for net gains arising during the period, Net of Tax Amount		(17)	(233)	(17)
Net unrealized gains (losses), Net of Tax Amount	1,697	(2,194)	5,621	481
Unrealized loss on derivatives, Net of Tax Amount	(126)		(126)
Change in minimum pension liability, Net of Tax Amount	6	5	44	10
Other comprehensive income (loss)	$ 1,577	$ (2,189)	$ 5,539	$ 491

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Comprehensive Income - Summary of Changes in Accumulated Other Comprehensive Income by Component, Net of Tax (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	$ 5,112	$ 4,203	$ 1,150	$ 1,523
Other comprehensive income (loss) before classifications	1,577	(2,172)	5,772	508
Amounts reclassified from accumulated other comprehensive income		(17)	(233)	(17)
Other comprehensive income (loss)	1,577	(2,189)	5,539	491
Ending Balance	6,689	2,014	6,689	2,014
Unrealized Gains (Losses) on Available-for-Sale Securities [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	5,078	4,206	1,154	1,531
Other comprehensive income (loss) before classifications	1,697	(2,177)	5,854	498
Amounts reclassified from accumulated other comprehensive income		(17)	(233)	(17)
Other comprehensive income (loss)	1,697	(2,194)	5,621	481
Ending Balance	6,775	2,012	6,775	2,012
Unrealized Losses on Derivatives [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other comprehensive income (loss) before classifications	(126)		(126)
Other comprehensive income (loss)	(126)		(126)
Ending Balance	(126)		(126)
Pension Items [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	34	(3)	(4)	(8)
Other comprehensive income (loss) before classifications	6	5	44	10
Other comprehensive income (loss)	6	5	44	10
Ending Balance	$ 40	$ 2	$ 40	$ 2

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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	Jun. 30, 2016	Dec. 31, 2015
Assets:
Investment securities, available for sale	$ 460,390	$ 442,349
US Treasury and Government Agencies [Member]
Assets:
Investment securities, available for sale	92,780	97,133
Obligations of States and Political Subdivisions [Member]
Assets:
Investment securities, available for sale	40,607	36,498
Other Debt Securities [Member]
Assets:
Investment securities, available for sale		501
Equity Securities [Member]
Assets:
Investment securities, available for sale	18,950	18,645
Fair Value, Measurements, Recurring [Member]
Assets:
Investment securities, available for sale	460,390	442,349
Derivative Assets	6,078	1,518
Total Assets	466,468	443,867
Liabilities:
Derivative Liabilities	6,271	1,518
Total Liabilities	6,271	1,518
Fair Value, Measurements, Recurring [Member] | US Treasury and Government Agencies [Member]
Assets:
Investment securities, available for sale	92,780	97,133
Fair Value, Measurements, Recurring [Member] | Mortgage Backed Securities [Member]
Assets:
Investment securities, available for sale	308,053	289,572
Fair Value, Measurements, Recurring [Member] | Obligations of States and Political Subdivisions [Member]
Assets:
Investment securities, available for sale	40,607	36,498
Fair Value, Measurements, Recurring [Member] | Other Debt Securities [Member]
Assets:
Investment securities, available for sale		501
Fair Value, Measurements, Recurring [Member] | Equity Securities [Member]
Assets:
Investment securities, available for sale	18,950	18,645
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Recurring [Member]
Assets:
Investment securities, available for sale	11,098	9,940
Total Assets	11,098	9,940
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Recurring [Member] | US Treasury and Government Agencies [Member]
Assets:
Investment securities, available for sale	6,060	4,888
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Recurring [Member] | Equity Securities [Member]
Assets:
Investment securities, available for sale	5,038	5,052
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member]
Assets:
Investment securities, available for sale	449,292	432,409
Derivative Assets	6,078	1,518
Total Assets	455,370	433,927
Liabilities:
Derivative Liabilities	6,271	1,518
Total Liabilities	6,271	1,518
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | US Treasury and Government Agencies [Member]
Assets:
Investment securities, available for sale	86,720	92,245
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | Mortgage Backed Securities [Member]
Assets:
Investment securities, available for sale	308,053	289,572
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | Obligations of States and Political Subdivisions [Member]
Assets:
Investment securities, available for sale	40,607	36,498
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | Other Debt Securities [Member]
Assets:
Investment securities, available for sale		501
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | Equity Securities [Member]
Assets:
Investment securities, available for sale	$ 13,912	$ 13,593

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Estimated Fair Value of Financial Instruments and Fair Value Measurement - Fair Value of Assets Measured on Nonrecurring Basis (Detail) - Fair Value, Measurements, Nonrecurring [Member] - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired Loans and Leases	$ 27,103	$ 26,006
Loans held for sale	6,463	1,233
Other real estate owned and other repossessed assets	1,594	983
Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans held for sale	6,463	1,233
Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired Loans and Leases	27,103	26,006
Other real estate owned and other repossessed assets	$ 1,594	$ 983

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Estimated Fair Value of Financial Instruments and Fair Value Measurement - Additional Information (Detail) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term municipal bond	$ 19,500
Subordinate debt	31,238	$ 31,238
Non-rated [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Subordinate debt	$ 1,000
Minimum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rates	5.00%
Capitalization rates	4.00%
Maximum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rates	11.00%
Capitalization rates	9.00%

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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	Jun. 30, 2016	Dec. 31, 2015
Financial Instruments - Assets
Investment securities held to maturity, Fair Value	$ 129,447	$ 117,594
Investment securities held to maturity, Carrying Value	126,221	116,740
Federal Home Loan Bank and other membership bank stocks, Fair Value	15,797	14,087
Federal Home Loan Bank and other membership bank stocks, Carrying Value	15,797	14,087
Loans and leases, net Fair Value	3,439,536	2,930,188
Loans and leases, net Carrying Value	3,420,715	2,934,326
Financial Instruments - Liabilities
Certificates of Deposit, Fair Value	478,596	341,998
Certificates of Deposit, Carrying value	477,336	343,321
Other borrowings, Fair Value	300,956	275,409
Other borrowings, Carrying value	294,771	271,905
Subordinated debentures, Fair Value	21,242	24,366
Subordinated debentures, Carrying Value	31,238	31,238
Significant Other Observable Inputs (Level 2) [Member]
Financial Instruments - Assets
Investment securities held to maturity, Fair Value	109,946	110,293
Federal Home Loan Bank and other membership bank stocks, Fair Value	15,797	14,087
Financial Instruments - Liabilities
Certificates of Deposit, Fair Value	478,596	341,998
Other borrowings, Fair Value	300,956	275,409
Significant Unobservable Inputs (Level 3) [Member]
Financial Instruments - Assets
Investment securities held to maturity, Fair Value	19,501	7,301
Loans and leases, net Fair Value	3,439,536	2,930,188
Financial Instruments - Liabilities
Subordinated debentures, Fair Value	$ 21,242	$ 24,366

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Statement of Cash Flow Information, Supplemental Information - Supplemental Schedule of Noncash Investing and Financing Activities (Detail) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Supplemental schedule of noncash investing and financing activities:
Cash paid during the period for income taxes	$ 10,682	$ 7,645
Cash paid during the period for interest	7,501	5,016
Transfer of loans and leases into other repossessed assets and other real estate owned	1,280	$ 760
Pascack Bancorp, Inc. [Member]
Non-cash assets acquired:
Federal Home Loan Bank stock	2,962
Investment securities held for maturity	3,925
Loans, including loans held for sale	319,575
Goodwill and other intangible assets, net	16,825
Other assets	21,110
Total non-cash assets acquired	364,397
Liabilities assumed:
Deposits	(304,466)
Other borrowings	(57,308)
Other liabilities	(6,344)
Total liabilities assumed	(368,118)
Common stock issued and fair value of stock options converted to Lakeland Bancorp stock options	$ 37,221