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, 2017

                                                                 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                                                                            (I.R.S. Employer

                    incorporation  or organization)                                                                        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, every 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, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act: (Check one):

Large accelerated filer [  ]    Accelerated filer [X]    Non-accelerated filer [  ]  Smaller reporting company [  ]  Emerging growth company [  ]

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): Yes  [  ]    No  [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 31, 2017, there were 47,352,725 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 as of June  30, 2017 (unaudited) and December 31, 2016		3
	Consolidated Statements of Income for the Three and Six Months Ended June 30, 2017 and 2016 (unaudited)		4
	Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2017 and 2016 (unaudited)		5
	Consolidated Statements of Changes in Stockholders’ Equity for the Six Months Ended June 30, 2017 and 2016 (unaudited)		6
	Consolidated Statements of Cash Flows for the Six Months Ended June  30, 2017 and 2016 (unaudited)		7
	Notes to Consolidated Financial Statements		9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		40
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		54
Item 4.	Controls and Procedures		56
	Part II.     Other Information
Item 1.	Legal Proceedings		57
Item 1A.	Risk Factors		57
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		57
Item 3.	Defaults Upon Senior Securities		57
Item 4.	Mine Safety Disclosures		57
Item 5.	Other Information		57
Item 6.	Exhibits		57
Signatures			58

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Lakeland Bancorp, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS

	June 30, 2017 (unaudited)		December 31, 2016
	(dollars in thousands)
ASSETS
Cash	$	169,109	$	169,149
Interest-bearing deposits due from banks		16,573		6,652
Total cash and cash equivalents		185,682		175,801
Investment securities available for sale, at fair value		673,164		606,704
Investment securities held to maturity; fair value of $138,619 at June 30, 2017 and $146,990 at December 31, 2016		138,468		147,614
Federal Home Loan Bank and other membership bank stock, at cost		18,899		15,099
Loans, net of deferred costs (fees)		4,050,731		3,870,598
Less: allowance for loan and lease losses		32,823		31,245
Net loans		4,017,908		3,839,353
Loans held for sale		877		1,742
Premises and equipment, net		50,411		52,236
Accrued interest receivable		13,192		12,557
Goodwill		136,433		135,747
Other identifiable intangible assets		2,631		3,344
Bank owned life insurance		89,339		72,384
Other assets		35,183		30,550
TOTAL ASSETS	$	5,362,187	$	5,093,131
LIABILITIES
Deposits:
Noninterest-bearing	$	978,668	$	927,270
Savings and interest-bearing transaction accounts		2,682,291		2,620,657
Time deposits $250 thousand and under		408,228		404,680
Time deposits over $250 thousand		158,017		140,228
Total deposits		4,227,204		4,092,835
Federal funds purchased and securities sold under agreements to repurchase		118,487		56,354
Other borrowings		312,251		260,866
Subordinated debentures		104,842		104,784
Other liabilities		31,858		28,248
TOTAL LIABILITIES		4,794,642		4,543,087
STOCKHOLDERS’ EQUITY
Common stock, no par value; authorized shares, 70,000,000; issued 47,352,725 shares at June 30, 2017 and 47,222,914 shares at December 31, 2016		511,967		510,861
Retained earnings		54,969		38,590
Accumulated other comprehensive income		609		593
TOTAL STOCKHOLDERS’ EQUITY		567,545		550,044
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	5,362,187	$	5,093,131

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

3

Lakeland Bancorp, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

	For the Three Months Ended June 30,					For the Six Months Ended June 30,
	2017			2016		2017		2016
	(in thousands, except per share data)					(in thousands, except per share data)
INTEREST INCOME
Loans, leases and fees	$	42,740		$	35,800	$	83,151	$	69,921
Federal funds sold and interest-bearing deposits with banks		132			124		408		199
Taxable investment securities and other		3,818			2,696		7,417		5,658
Tax-exempt investment securities		522			417		1,032		830
TOTAL INTEREST INCOME		47,212			39,037		92,008		76,608
INTEREST EXPENSE
Deposits		3,784			2,404		7,118		4,609
Federal funds purchased and securities sold under agreements to repurchase		98			9		108		47
Other borrowings		1,909			1,522		4,038		3,000
TOTAL INTEREST EXPENSE		5,791			3,935		11,264		7,656
NET INTEREST INCOME		41,421			35,102		80,744		68,952
Provision for loan and lease losses		1,827			1,010		3,045		2,085
NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES		39,594			34,092		77,699		66,867
NONINTEREST INCOME
Service charges on deposit accounts		2,674			2,523		5,129		4,965
Commissions and fees		1,135			1,099		2,291		2,078
Gains (losses) on sales of investment securities		(15	)		—		2,524		370
Gains on sales of loans		471			425		869		845
Income on bank owned life insurance		500			414		926		822
Other income		1,346			424		2,466		672
TOTAL NONINTEREST INCOME		6,111			4,885		14,205		9,752
NONINTEREST EXPENSE
Salaries and employee benefits		15,096			13,091		30,513		27,176
Net occupancy expense		2,507			2,341		5,343		5,029
Furniture and equipment		1,996			2,082		4,093		4,028
Stationery, supplies and postage		572			416		1,015		859
Marketing expense		508			385		909		694
FDIC insurance expense		425			681		743		1,271
Data processing expense		502			459		1,055		979
Telecommunications expense		372			386		776		810
ATM and debit card expense		517			383		958		729
Expenses on other real estate owned and other repossessed assets		4			26		41		65
Long-term debt prepayment fee		—			—		2,828		—
Merger related expenses		—			685		—		2,406
Core deposit intangible amortization		190			164		385		331
Other expenses		2,677			2,616		5,177		4,762
TOTAL NONINTEREST EXPENSE		25,366			23,715		53,836		49,139
Income before income tax expense		20,339			15,262		38,068		27,480
Income tax expense		6,969			5,132		12,386		9,242
NET INCOME	$	13,370		$	10,130	$	25,682	$	18,238
PER SHARE OF COMMON STOCK
Basic earnings	$	0.28		$	0.24	$	0.54	$	0.44
Diluted earnings	$	0.28		$	0.24	$	0.53	$	0.44
Dividends	$	0.100		$	0.095	$	0.195	$	0.180

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,
	2017			2016			2017			2016
	(in thousands)						(in thousands)
NET INCOME	$	13,370		$	10,130		$	25,682		$	18,238
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Unrealized gains on securities available for sale		1,029			1,697			1,763			5,854
Reclassification for securities losses (gains) included in net income		9			—			(1,640	)		(233	)
Unrealized losses on derivatives		(121	)		(126	)		(107	)		(126	)
Change in pension liability, net		—			6			—			44
Other comprehensive income		917			1,577			16			5,539
TOTAL COMPREHENSIVE INCOME	$	14,287		$	11,707		$	25,698		$	23,777

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, 2017 and 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
At January 1, 2017	$	510,861		$	38,590		$	593	$	550,044
Net income		—			25,682			—		25,682
Other comprehensive income, net of tax		—			—			16		16
Stock based compensation		1,566			—			—		1,566
Exercise of stock options		313			—			—		313
Retirement of restricted stock		(773	)		—			—		(773	)
Cash dividends, common stock		—			(9,303	)		—		(9,303	)
At June 30, 2017	$	511,967		$	54,969		$	609	$	567,545

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,
	2017			2016
	(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	25,682		$	18,238
Adjustments to reconcile net income to net cash provided by operating activities:
Net amortization of premiums, discounts and deferred loan fees and costs		2,413			1,794
Depreciation and amortization		2,080			1,847
Amortization of intangible assets		385			331
Provision for loan and lease losses		3,045			2,085
Loans originated for sale		(27,197	)		(38,408	)
Proceeds from sales of loans held for sale		28,931			34,023
Gains on sales of securities		(2,524	)		(370	)
Gains on sales of loans held for sale		(869	)		(845	)
Gains on other real estate and other repossessed assets		(500	)		(90	)
(Gains) losses on sales of premises and equipment		(672	)		117
Long-term debt prepayment penalty		2,828			—
Stock-based compensation		1,566			1,107
Excess tax benefits		582			—
Increase in other assets		(4,672	)		(9,176	)
Increase in other liabilities		1,988			483
NET CASH PROVIDED BY OPERATING ACTIVITIES		33,066			11,136
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash acquired in acquisitions		—			40,942
Proceeds from repayments and maturities of available for sale securities		43,726			40,083
Proceeds from repayments and maturities of held to maturity securities		18,624			13,156
Proceeds from sales of available for sale securities		4,484			15,654
Purchase of available for sale securities		(113,724	)		(61,705	)
Purchase of held to maturity securities		(9,754	)		(22,778	)
Purchase of bank owned life insurance		(16,000	)		—
Proceeds from redemptions of Federal Home Loan Bank stock		3,477			1,757
Purchases of Federal Home Loan Bank stock		(7,278	)		(504	)
Net increase in loans and leases		(186,328	)		(170,698	)
Proceeds from sales of other real estate and repossessed assets		3,583			758
Proceeds from dispositions and sales of premises and equipment		1,262			11
Purchases of premises and equipment		(1,324	)		(1,648	)
NET CASH USED IN INVESTING ACTIVITIES		(259,252	)		(144,972	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits		134,719			237,564
Increase (decrease) in federal funds purchased and securities sold under agreements to repurchase		62,133			(27,572	)
Proceeds from other borrowings		164,036			4,921
Repayments of other borrowings		(115,058	)		(39,000	)
Exercise of stock options		313			—
Retirement of restricted stock		(773	)		(206	)
Dividends paid		(9,303	)		(7,481	)
NET CASH PROVIDED BY FINANCING ACTIVITIES		236,067			168,226
Net increase in cash and cash equivalents		9,881			34,390
Cash and cash equivalents, beginning of period		175,801			118,493
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	185,682		$	152,883

7

	For the Six Months Ended June 30,
	2017		2016
	(in thousands)
Supplemental schedule of non-cash investing and financing activities:
Cash paid during the period for income taxes	$	11,703	$	10,682
Cash paid during the period for interest		11,310		7,501
Transfer of loans and leases into other repossessed assets and other real estate owned		3,425		1,280
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

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

8

Lakeland Bancorp, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation.

This quarterly report presents the consolidated financial statements of Lakeland Bancorp, Inc. and its subsidiaries, including Lakeland Bank (“Lakeland”) and 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 six months ended June 30, 2017 do not necessarily indicate the results that the Company will achieve for all of 2017.

Certain information and footnote disclosures required under U.S. GAAP have been condensed or omitted, as permitted by rules and regulations of the Securities and Exchange Commission. These unaudited interim financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes that are presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

NOTE 2 – ACQUISITIONS

Harmony Bank

On July 1, 2016, the Company completed its acquisition of Harmony Bank (“Harmony”), a bank with three branches 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 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.

During the second quarter of 2017, the Company revised the estimate of the fair value of the acquired assets as of the acquisition date. This adjustment related to the fair market value of certain loans and the valuation of core deposit intangible which resulted in an increase of $685,000 to goodwill.

The acquisition was accounted for under the acquisition method of accounting. Accordingly, 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 Harmony, net of cash consideration paid.

9

	On July 1, 2016
	(in thousands)
Cash and cash equivalents	$	27,809
Securities available for sale		7,474
Securities held to maturity		6,885
Federal Home Loan Bank stock		780
Loans		259,985
Premises and equipment		3,125
Goodwill		11,147
Identifiable intangible assets		1,088
Accrued interest receivable and other assets		8,146
Total assets acquired		326,439
Deposits		(278,060	)
Other borrowings		(9,314	)
Other liabilities		(2,411	)
Total liabilities assumed		(289,785	)
Net assets acquired	$	36,654

Loans acquired in the Harmony acquisition were recorded at fair value, and there was no carryover related allowance for loan and lease losses. The fair values of loans acquired from Harmony 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 accounted for in accordance with ASC 310-30 that were acquired in the Harmony acquisition as of the closing date.

	Acquired Credit Impaired Loans
	(in thousands)
Contractually required principal and interest at acquisition	$	1,264
Contractual cash flows not expected to be collected (non-accretable difference)		398
Expected cash flows at acquisition		866
Interest component of expected cash flows (accretable difference)		97
Fair value of acquired loans	$	769

The core deposit intangible totaled $691,000 and is being amortized 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.

10

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 which operated 8 branches in Bergen and Essex Counties in New Jersey. This acquisition enabled 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 3,314,284 shares of its common stock in the merger and paid approximately $4.5 million in cash including 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.

The acquisition was accounted for under the acquisition method of accounting. Accordingly, 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 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 January 7, 2016
	(in thousands)
Cash and cash equivalents	$	40,942
Securities held to maturity		3,925
Federal Home Loan Bank stock		2,962
Loans		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 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 accounted for in accordance with ASC 310-30 that were acquired in the Pascack acquisition as of the closing date.

11

	Acquired Credit Impaired Loans
	(in thousands)
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

The core deposit intangible totaled $1.5 million and is being amortized 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.

12

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,
	2017		2016		2017		2016
	(in thousands, except per share data)				(in thousands, except per share data)
Net income available to common shareholders	$	13,370	$	10,130	$	25,682	$	18,238
Less: earnings allocated to participating securities		119		106		239		162
Net income allocated to common shareholders	$	13,251	$	10,024	$	25,443	$	18,076
Weighted average number of common shares outstanding - basic		47,465		41,238		47,410		41,084
Share-based plans		209		168		236		161
Weighted average number of common shares outstanding - diluted		47,674		41,406		47,646		41,245
Basic earnings per share	$	0.28	$	0.24	$	0.54	$	0.44
Diluted earnings per share	$	0.28	$	0.24	$	0.53	$	0.44

There were no antidilutive options to purchase common stock excluded from the computation for the three and six months ended June 30, 2017 and 2016.

13

NOTE 4 – INVESTMENT SECURITIES

	June 30, 2017									December 31, 2016
			Gross		Gross							Gross		Gross
	Amortized		Unrealized		Unrealized			Fair		Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value		Cost		Gains		Losses			Value
	(in thousands)									(in thousands)
AVAILABLE FOR SALE
U.S. Treasury and U.S. government agencies	$	143,077	$	244	$	(877	)	$	142,444	$	118,537	$	102	$	(1,280	)	$	117,359
Mortgage-backed securities, residential		445,829		1,255		(3,541	)		443,543		406,851		1,174		(4,487	)		403,538
Mortgage-backed securities, multifamily		10,162		60		(23	)		10,199		10,192		30		(35	)		10,187
Obligations of states and political subdivisions		53,798		768		(292	)		54,274		48,868		391		(933	)		48,326
Debt securities		5,000		95		—			5,095		5,350		63		(1	)		5,412
Equity securities		15,385		2,620		(396	)		17,609		17,314		5,000		(432	)		21,882
	$	673,251	$	5,042	$	(5,129	)	$	673,164	$	607,112	$	6,760	$	(7,168	)	$	606,704
	June 30, 2017									December 31, 2016
			Gross		Gross							Gross		Gross
	Amortized		Unrealized		Unrealized			Fair		Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value		Cost		Gains		Losses			Value
	(in thousands)									(in thousands)
HELD TO MATURITY
U.S. government agencies	$	33,484	$	193	$	(283	)	$	33,394	$	33,553	$	144	$	(430	)	$	33,267
Mortgage-backed securities, residential		38,262		298		(524	)		38,036		38,706		369		(598	)		38,477
Mortgage-backed securities, multifamily		2,008		—		(17	)		1,991		2,059		—		(44	)		2,015
Obligations of states and political subdivisions		62,706		585		(135	)		63,156		71,284		269		(385	)		71,168
Debt securities		2,008		34		—			2,042		2,012		51		—			2,063
	$	138,468	$	1,110	$	(959	)	$	138,619	$	147,614	$	833	$	(1,457	)	$	146,990

14

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):

	Available for Sale				Held to Maturity
June 30, 2017	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	2,605	$	2,623	$	29,499	$	29,503
Due after one year through five years		107,942		108,341		35,641		35,904
Due after five years through ten years		66,678		66,174		28,621		28,721
Due after ten years		24,650		24,675		4,437		4,464
		201,875		201,813		98,198		98,592
Mortgage-backed securities		455,991		453,742		40,270		40,027
Equity securities		15,385		17,609		—		—
Total securities	$	673,251	$	673,164	$	138,468	$	138,619

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 June 30,					For the Six Months Ended June 30,
	2017			2016		2017		2016
Sale proceeds	$	—		$	—	$	4,499	$	15,654
Gross gains (losses)		(15	)		—		2,524		370

There were no other-than-temporary impairments during the six months ended June 30, 2017 or 2016.

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 $502.5 million and $443.4 million at June 30, 2017 and December 31, 2016, 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 for the periods presented:

15

	Less Than 12 Months				12 Months or Longer				Total
			Unrealized				Unrealized		Number of				Unrealized
June 30, 2017	Fair Value		Losses		Fair Value		Losses		Securities		Fair Value		Losses
	(dollars in thousands)
AVAILABLE FOR SALE
U.S. government agencies	$	67,712	$	653	$	4,786	$	224		15	$	72,498	$	877
Mortgage-backed securities, residential		270,813		3,099		17,938		442		85		288,751		3,541
Mortgage-backed securities, multifamily		5,159		23		—		—		1		5,159		23
Obligations of states and political subdivisions		17,616		275		877		17		32		18,493		292
Equity securities		—		—		9,602		396		2		9,602		396
	$	361,300	$	4,050	$	33,203	$	1,079		135	$	394,503	$	5,129
HELD TO MATURITY
U.S. government agencies	$	12,215	$	283	$	—	$	—		2	$	12,215	$	283
Mortgage-backed securities, residential		26,661		411		2,191		113		17		28,852		524
Mortgage-backed securities, multifamily		846		13		1,047		4		2		1,893		17
Obligations of states and political subdivisions		29,283		135		—		—		17		29,283		135
	$	69,005	$	842	$	3,238	$	117		38	$	72,243	$	959
	Less Than 12 Months				12 Months or Longer				Total
			Unrealized				Unrealized		Number of				Unrealized
December 31, 2016	Fair Value		Losses		Fair Value		Losses		Securities		Fair Value		Losses
	(dollars in thousands)
AVAILABLE FOR SALE
U.S. Treasury and U.S. government agencies	$	94,153	$	1,280	$	—	$	—		18	$	94,153	$	1,280
Mortgage-backed securities, residential		292,873		4,078		15,453		409		91		308,326		4,487
Mortgage-backed securities, multifamily		5,178		35		—		—		1		5,178		35
Obligations of states and political subdivisions		29,904		933		—		—		54		29,904		933
Other debt securities		350		1		—		—		1		350		1
Equity securities		6,030		94		4,720		338		2		10,750		432
	$	428,488	$	6,421	$	20,173	$	747		167	$	448,661	$	7,168
HELD TO MATURITY
U.S. government agencies	$	17,147	$	430	$	—	$	—		3	$	17,147	$	430
Mortgage-backed securities, residential		27,909		535		1,061		63		15		28,970		598
Mortgage-backed securities, multifamily		2,015		44		—		—		2		2,015		44
Obligations of states and political subdivisions		50,302		384		401		1		43		50,703		385
	$	97,373	$	1,393	$	1,462	$	64		63	$	98,835	$	1,457

16

Management has evaluated the securities in the above table and has concluded that none of the securities are other-than-temporarily impaired. 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, 2017, the equity securities include investments in other financial institutions for market appreciation purposes. These equities had a purchase price of $2.1 million and a market value of $4.7 million as of June 30, 2017.

As of June 30, 2017, the equity securities also included $12.9 million in investment funds that do not have a quoted market price, but use net asset value per share or its equivalent to measure fair value.

The investment funds include $9.6 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, 2017, the amortized cost of these securities was $10.0 million and the fair value was $9.6 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 these investments.

The investment funds also include $3.3 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, 2017, the net amortized cost equaled the market value of the investment. There are no unfunded commitments related to these investments.

NOTE 5 – LOANS, LEASES AND OTHER REAL ESTATE

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

	June 30, 2017			December 31, 2016
	(in thousands)
Commercial, secured by real estate	$	2,725,418		$	2,556,601
Commercial, industrial and other		352,977			350,228
Leases		70,295			67,016
Real estate - residential mortgage		337,765			349,581
Real estate - construction		230,178			211,109
Home equity and consumer		337,643			339,360
Total loans and leases		4,054,276			3,873,895
Less: deferred fees		(3,545	)		(3,297	)
Loans and leases, net of deferred fees	$	4,050,731		$	3,870,598

At June 30, 2017 and December 31, 2016, home equity and consumer loans included overdraft deposit balances of $763,000 and $364,000, respectively. At June 30, 2017 and December 31, 2016, the Company had $1.1 billion and $942.0 million, respectively, in loans pledged for actual and potential borrowings at the Federal Home Loan Bank of New York(“FHLB”).

17

Purchased Credit Impaired Loans

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 $214,000 at June 30, 2017, which was $603,000 less than the balance at the time of acquisition on January 7, 2016. In first quarter 2017, one of the Pascack purchased credit impaired (“PCI”) loans totaling $127,000 experienced further credit deterioration and was fully charged off. In the second quarter of 2017, a loan with a net value of $218,000 was fully paid off. The carrying value of loans acquired in the Harmony acquisition was $528,000 at June 30, 2017 which was $241,000 less than the balance at acquisition date on July 1, 2016. In the second quarter of 2017, a loan with a net value of $247,000 was fully paid off.

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

	For the Three Months Ended						For the Six Months Ended
	June 30, 2017			June 30, 2016			June 30, 2017			June 30, 2016
	(in thousands)						(in thousands)
Balance, beginning of period	$	180		$	69		$	145		$	—
Acquisitions		—			—			—			85
Accretion		(47	)		(15	)		(98	)		(31	)
Net reclassification non-accretable difference		—			11			86			11
Balance, end of period	$	133		$	65		$	133		$	65

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:

	June 30, 2017		December 31, 2016
	(in thousands)
Commercial, secured by real estate	$	8,768	$	10,413
Commercial, industrial and other		378		167
Leases, including leases held for sale		81		153
Real estate - residential mortgage		3,857		6,048
Real estate - construction		1,472		1,472
Home equity and consumer		1,689		2,151
Total non-accrual loans and leases	$	16,245	$	20,404
Other real estate and other repossessed assets		1,415		1,072
TOTAL NON-PERFORMING ASSETS	$	17,660	$	21,476
Troubled debt restructurings, still accruing	$	11,697	$	8,802

Non-accrual loans included $2.1 million and $2.4 million of troubled debt restructurings at June 30, 2017 and December 31, 2016, respectively. At June 30, 2017 and December 31, 2016, the Company had $3.1 million and $3.7 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, 2017 and December 31, 2016, is as follows:

18

					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, 2017
Commercial, secured by real estate	$	3,258	$	600	$	8,388	$	12,246	$	2,713,172	$	2,725,418	$	—
Commercial, industrial and other		491		—		301		792		352,185		352,977		—
Leases		303		113		81		497		69,798		70,295		—
Real estate - residential mortgage		985		636		3,295		4,916		332,849		337,765		—
Real estate - construction		—		—		1,472		1,472		228,706		230,178		—
Home equity and consumer		1,148		148		1,292		2,588		335,055		337,643		20
	$	6,185	$	1,497	$	14,829	$	22,511	$	4,031,765	$	4,054,276	$	20
December 31, 2016
Commercial, secured by real estate	$	6,082	$	1,234	$	9,313	$	16,629	$	2,539,972	$	2,556,601	$	—
Commercial, industrial and other		1,193		213		42		1,448		348,780		350,228		—
Leases		132		78		153		363		66,653		67,016		—
Real estate - residential mortgage		2,990		1,057		5,330		9,377		340,204		349,581		—
Real estate - construction		3,409		—		1,472		4,881		206,228		211,109		—
Home equity and consumer		1,260		129		2,049		3,438		335,922		339,360		10
	$	15,066	$	2,711	$	18,359	$	36,136	$	3,837,759	$	3,873,895	$	10

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 include all loans that have been modified in troubled debt restructurings. Impaired loans as of June 30, 2017 and December 31, 2016 are as follows:

19

			Contractual
	Recorded		Unpaid				Average		Interest
	Investment in		Principal		Specific		Investment in		Income
June 30, 2017	Impaired Loans		Balance		Allowance		Impaired Loans		Recognized
	(in thousands)
Loans without specific allowance:
Commercial, secured by real estate	$	14,806	$	15,180	$	—	$	13,909	$	148
Commercial, industrial and other		568		568		—		568		11
Real estate - residential mortgage		970		987		—		903		8
Real estate - construction		1,472		1,472		—		1,472		—
Home equity and consumer		—		—		—		—		—
Loans with specific allowance:
Commercial, secured by real estate		5,022		5,342		276		4,913		117
Commercial, industrial and other		431		431		14		402		9
Real estate - residential mortgage		1,005		1,134		34		1,015		15
Real estate - construction		—		—		—		—		—
Home equity and consumer		1,148		1,175		99		1,150		28
Total:
Commercial, secured by real estate	$	19,828	$	20,522	$	276	$	18,822	$	265
Commercial, industrial and other		999		999		14		970		20
Real estate - residential mortgage		1,975		2,121		34		1,918		23
Real estate - construction		1,472		1,472		—		1,472		—
Home equity and consumer		1,148		1,175		99		1,150		28
	$	25,422	$	26,289	$	423	$	24,332	$	336

20

			Contractual
	Recorded		Unpaid				Average		Interest
	Investment in		Principal		Specific		Investment in		Income
December 31, 2016	Impaired Loans		Balance		Allowance		Impaired Loans		Recognized
	(in thousands)
Loans without specific allowance:
Commercial, secured by real estate	$	12,764	$	13,195	$	—	$	13,631	$	229
Commercial, industrial and other		603		603		—		1,109		24
Leases		—		—		—		—		—
Real estate - residential mortgage		1,880		3,146		—		2,430		16
Real estate - construction		1,471		1,471		—		12		—
Home equity and consumer		139		139		—		388		—
Loans with specific allowance:
Commercial, secured by real estate		5,860		6,142		392		6,549		273
Commercial, industrial and other		349		349		12		360		17
Leases		—		—		—		1		—
Real estate - residential mortgage		1,031		1,100		31		1,011		30
Real estate - construction		—		—		—		—		—
Home equity and consumer		1,188		1,211		94		1,184		59
Total:
Commercial, secured by real estate	$	18,624	$	19,337	$	392	$	20,180	$	502
Commercial, industrial and other		952		952		12		1,469		41
Leases		—		—		—		1		—
Real estate - residential mortgage		2,911		4,246		31		3,441		46
Real estate - construction		1,471		1,471		—		12		—
Home equity and consumer		1,327		1,350		94		1,572		59
	$	25,285	$	27,356	$	529	$	26,675	$	648

Interest income recognized on impaired loans was $336,000 for each of the six months ended June 30, 2017 and 2016, respectively. Interest that would have been accrued on impaired loans during the first six months of 2017 and 2016 had the loans been performing under original terms would have been $813,000 and $828,000, 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 commercial loan portfolios. The risk rating system assists senior management in evaluating Lakeland’s commercial loan portfolio, analyzing trends, and determining the proper level of required reserves to be recommended to the Board. In assigning risk ratings, management considers, among other things, a borrower’s debt service coverage, earnings strength, loan to value ratios, 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

21

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, 2017 and December 31, 2016, by the risk ratings discussed above (in thousands):

June 30, 2017	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Real Estate - Construction
RISK RATING
1	$	—	$	448	$	—
2		—		29,901		—
3		84,407		35,124		—
4		821,819		129,845		8,800
5		1,700,154		131,751		218,054
5W - Watch		58,427		11,047		698
6 - Other assets especially mentioned		31,163		9,474		—
7 - Substandard		29,448		5,387		2,626
8 - Doubtful		—		—		—
9 - Loss		—		—		—
Total	$	2,725,418	$	352,977	$	230,178
December 31, 2016	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Real Estate - Construction
RISK RATING
1	$	—	$	1,449	$	—
2		—		26,743		—
3		82,102		36,644		—
4		729,281		135,702		28,177
5		1,615,331		129,366		175,595
5W - Watch		68,372		6,395		1,223
6 - Other assets especially mentioned		33,015		5,242		—
7 - Substandard		28,500		8,687		6,114
8 - Doubtful		—		—		—
9 - Loss		—		—		—
Total	$	2,556,601	$	350,228	$	211,109

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

Allowance for Loan and Lease Losses

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, 2017 and 2016:

22

Three Months Ended June 30, 2017	Commercial, Secured by Real Estate			Commercial, Industrial and Other			Leases			Real Estate- Residential Mortgage			Real Estate- Construction			Home Equity and Consumer			Total
										(in thousands)
Beginning Balance	$	22,083		$	1,792		$	502		$	1,825		$	2,378		$	3,010		$	31,590
Charge-offs		(83	)		(71	)		(120	)		(169	)		—			(427	)		(870	)
Recoveries		145			27			28			—			5			71			276
Provision		1,199			(60	)		119			98			213			258			1,827
Ending Balance	$	23,344		$	1,688		$	529		$	1,754		$	2,596		$	2,912		$	32,823
Three Months Ended June 30, 2016	Commercial, Secured by Real Estate			Commercial, Industrial and Other			Leases			Real Estate- Residential Mortgage			Real Estate- Construction			Home Equity and 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
Six Months Ended June 30, 2017	Commercial, Secured by Real Estate			Commercial, Industrial and Other			Leases			Real Estate- Residential Mortgage			Real Estate- Construction			Home Equity and Consumer			Total
										(in thousands)
Beginning Balance	$	21,223		$	1,723		$	548		$	1,964		$	2,352		$	3,435		$	31,245
Charge-offs		(303	)		(234	)		(163	)		(310	)		(609	)		(611	)		(2,230	)
Recoveries		364			122			32			—			20			225			763
Provision		2,060			77			112			100			833			(137	)		3,045
Ending Balance	$	23,344		$	1,688		$	529		$	1,754		$	2,596		$	2,912		$	32,823
Six Months Ended June 30, 2016	Commercial, Secured by Real Estate			Commercial, Industrial and Other			Leases			Real Estate- Residential Mortgage			Real Estate- Construction			Home Equity and 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

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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, 2017	Real Estate		and Other		Leases		Mortgage		Construction		Consumer		Total
	(in thousands)
Ending Balance: Individually evaluated for impairment	$	19,828	$	999	$	—	$	1,975	$	1,472	$	1,148	$	25,422
Ending Balance: Collectively evaluated for impairment		2,704,863		351,971		70,295		335,790		228,706		336,487		4,028,112
Ending Balance: Loans acquired with deteriorated credit quality		727		7		—		—		—		8		742
Ending Balance (1)	$	2,725,418	$	352,977	$	70,295	$	337,765	$	230,178	$	337,643	$	4,054,276
	Commercial,		Commercial,				Real Estate-				Home
	Secured by		Industrial				Residential		Real Estate-		Equity and
December 31, 2016	Real Estate		and Other		Leases		Mortgage		Construction		Consumer		Total
	(in thousands)
Ending Balance: Individually evaluated for impairment	$	18,624	$	952	$	—	$	2,911	$	1,471	$	1,327	$	25,285
Ending Balance: Collectively evaluated for impairment		2,536,858		349,001		67,016		346,670		209,638		338,019		3,847,202
Ending balance: Loans acquired with deteriorated credit quality		1,119		275		—		—		—		14		1,408
Ending Balance (1)	$	2,556,601	$	350,228	$	67,016	$	349,581	$	211,109	$	339,360	$	3,873,895

(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, 2017	Real Estate		and Other		Leases		Mortgage		Construction		Consumer		Total
	(in thousands)
Ending Balance: Individually evaluated for impairment	$	276	$	14	$	—	$	34	$	—	$	99	$	423
Ending Balance: Collectively evaluated for impairment		23,068		1,674		529		1,720		2,596		2,813		32,400
Ending Balance	$	23,344	$	1,688	$	529	$	1,754	$	2,596	$	2,912	$	32,823
	Commercial,		Commercial,				Real Estate-				Home
	Secured by		Industrial				Residential		Real Estate-		Equity and
December 31, 2016	Real Estate		and Other		Leases		Mortgage		Construction		Consumer		Total
	(in thousands)
Ending Balance: Individually evaluated for impairment	$	392	$	12	$	—	$	31	$	—	$	94	$	529
Ending Balance: Collectively evaluated for impairment		20,831		1,711		548		1,933		2,352		3,341		30,716
Ending Balance	$	21,223	$	1,723	$	548	$	1,964	$	2,352	$	3,435	$	31,245

Lakeland also maintains a reserve for unfunded lending commitments which is included in other liabilities. This reserve was $2.5 million for each of the periods ended June 30, 2017 and December 31, 2016. The Company analyzes the adequacy of the reserve for unfunded lending commitments quarterly.

Troubled Debt Restructurings

Loans are classified as troubled debt restructured loans in cases where borrowers experience financial difficulties and Lakeland makes certain concessionary modifications to contractual terms. Restructured loans typically involve a modification of terms such as a reduction of the stated interest rate, a moratorium of principal payments and/or an extension of the maturity date at a stated interest rate lower than the current market rate of a new loan with similar risk. The Company considers the potential losses on these loans as well as the remainder of its impaired loans while considering the adequacy of the allowance for loan and lease losses.

The following table summarizes loans that have been restructured during the three and six months ended June 30, 2017 and 2016:

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	For the Three Months Ended						For the Three Months Ended
	June 30, 2017						June 30, 2016
			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)
Commercial, secured by real estate		2	$	159	$	159		—	$	—	$	—
Commercial, industrial and other		2		124		124		—		—		—
		4	$	283	$	283		—	$	—	$	—
	For the Six Months Ended						For the Six Months Ended
	June 30, 2017						June 30, 2016
			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)
Commercial, secured by real estate		4	$	3,038	$	3,038	$	—	$	—	$	—
Commercial, industrial and other		2		124		124		—		—		—
Home equity and consumer		—		—		—		3		285		285
		6	$	3,162	$	3,162	$	3	$	285	$	285

The following table summarizes as of June 30, 2017 and 2016, loans that were restructured within the previous twelve months that have subsequently defaulted:

	June 30, 2017				June 30, 2016
	Number of		Recorded		Number of		Recorded
	Contracts		Investment		Contracts		Investment
	(dollars in thousands)
Real estate - residential mortgage		1	$	254		—	$	—
Home equity and consumer		—		—		1		162
		1	$	254		1	$	162

Other Real Estate and Other Repossessed Assets

At June 30, 2017, the Company had other real estate owned and other repossessed assets of $1.4 million and $28,000,

26

respectively. At December 31, 2016, the Company had other real estate owned and other repossessed assets of $1.1 million and $9,000, respectively. Included in other real estate owned was residential property acquired as a result of foreclosure proceedings totaling $1.1 million that the Company held at each of the periods ended June 30, 2017 and December 31, 2016.

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. Lakeland had $7.5 million in available for sale securities pledged for collateral on its interest rate swaps with the financial institution at each of June 30, 2017 and December 31, 2016.

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 are to add stability to interest expense and to manage its exposure to interest rate movements. The Company used interest rate swaps designated as cash flow hedges which involved the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. In these particular hedges the Company is paying a third party an average of 1.10% in exchange for a payment at 3 month LIBOR. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive income and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the six months ended June 30, 2017, the Company did not record any hedge ineffectiveness. The Company recognized $4,000 of accumulated other comprehensive income that was reclassified into interest expense for the first six months of 2017.

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 $60,000 will be reclassified as a decrease to interest expense should the rate environment remain the same.

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

June 30, 2017	Notional Amount			Average Maturity (Years)		Weighted Average Fixed Rate			Weighted Average Variable Rate		Fair Value
Classified in Other Assets:
3rd Party interest rate swaps	$	87,852			9.4		3.78	%		1 Mo. LIBOR + 2.12	$	2,989
Customer interest rate swaps		98,651			11.3		4.64	%		1 Mo. LIBOR + 2.19		2,522
Interest rate swap (cash flow hedge)		30,000			4.0		1.10	%		3 Mo. LIBOR		868
Classified in Other Liabilities:
Customer interest rate swaps	$	87,852			9.4		3.78	%		1 Mo. LIBOR + 2.12	$	(2,989	)
3rd Party interest rate swaps		98,651			11.3		4.64	%		1 Mo. LIBOR + 2.19		(2,522	)
December 31, 2016	Notional Amount			Average Maturity (Years)		Weighted Average Fixed Rate			Weighted Average Variable Rate		Fair Value
Customer interest rate swaps	$	129,252			10.9		4.03	%		1 Mo. LIBOR + 2.10	$	(2,345	)
3rd party interest rate swaps		(129,252	)		10.9		4.03	%		1 Mo. LIBOR + 2.10		2,345
Interest rate swap (cash flow hedge)		30,000			4.5		1.10	%		3 Mo. LIBOR		1,033

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NOTE 7 – GOODWILL AND INTANGIBLE ASSETS

The Company had goodwill of $136.4 million and $135.7 million for the periods ended June 30, 2017 and December 31, 2016, respectively. The Company reviews its goodwill and intangible assets annually, on November 30, or more frequently if conditions warrant, for impairment. In testing goodwill for impairment, the Company compares the estimated fair value of its reporting unit to its carrying amount, including goodwill. The Company has determined that it has one reporting unit, Community Banking.

The Company had core deposit intangible of $2.6 million and $3.3 million for the periods ended June 30, 2017 and December 31, 2016, respectively. The estimated future amortization expense for the remainder of 2017 and for each of the succeeding five years ended December 31 is as follows (dollars in thousands):

For the Year Ended
2017	$	268
2018		594
2019		504
2020		415
2021		326
2022		236

NOTE 8 – BORROWINGS

Repurchase Agreements

At June 30, 2017, the Company had federal funds purchased and securities sold under agreements to repurchase of $91.6 million and $26.9 million respectively. The securities sold under agreements to repurchase are overnight sweep arrangement accounts with our customers. The Company also had $20.0 million in long-term securities sold under agreements to repurchase included in other borrowings which mature within 1 year. As of June 30, 2017, the Company had $54.9 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.

Prepayment of Borrowings

In the first quarter of 2017, the Company repaid an aggregate of $20.0 million in long-term securities sold under agreements to repurchase and recorded $2.2 million in long-term debt prepayment fees. The Company also repaid an aggregate of $34.0 million in borrowings from the Federal Home Loan Bank of New York and recorded $638,000 in long-term debt prepayment fees.

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 $1.6 million and $1.1 million was recognized for the six months ended June 30, 2017 and 2016, respectively. As of June 30, 2017, there was unrecognized compensation cost of $149,000 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 $2.21 million as of June 30, 2017, and that cost is expected to be recognized over a period of 1.53 years. There was no unrecognized compensation expense related to unvested stock options as of June 30, 2017.

In the first six months of 2017, the Company granted 13,176 shares of restricted stock to non-employee directors at a grant date fair value of $18.20 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. 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 vested one year from the date it was granted. Compensation expense on this restricted stock was $240,000 over a one year period.

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The following is a summary of the Company’s restricted stock activity during the six months ended June 30, 2017:

				Weighted
	Number of			Average
	Shares			Price
Outstanding, January 1, 2017		42,875		$	9.72
Granted		13,176			18.20
Vested		(32,901	)		9.79
Forfeited		(48	)		9.39
Outstanding, June 30, 2017		23,102		$	14.46

In the first six months of 2017, the Company granted 117,673 RSUs to certain officers at a weighted average grant date fair value of $19.96 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 2017 is expected to average approximately $783,000 per year over a three year period. In the first six months of 2016, the Company granted 150,226 RSUs at a weighted average grant date fair value of $10.06 per share under the Company’s 2009 Equity Compensation Program. Compensation expense on these restricted stock units is expected to average approximately $504,000 per year over a three year period.

The following is a summary of the Company’s RSU activity during the six months ended June 30, 2017:

				Weighted
	Number of			Average
	Shares			Price
Outstanding, January 1, 2017		302,344		$	10.76
Granted		117,673			19.96
Vested		(148,584	)		13.01
Forfeited		(8,995	)		12.58
Outstanding, June 30, 2017		262,438		$	13.55

There were no grants of stock options in the first six months of 2017 or 2016. Option activity under the Company’s stock option plans is as follows:

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						Weighted
						Average
				Weighted		Remaining
				Average		Contractual		Aggregate
	Number of			Exercise		Term		Intrinsic
	Shares			Price		(in years)		Value
Outstanding, January 1, 2017		135,250		$	8.79		4.18	$	1,450,533
Granted		—			—
Exercised		(31,769	)		9.84
Forfeited		—			—
Expired		—			—
Outstanding, June 30, 2017		103,481		$	8.47		4.78	$	1,076,479
Options exercisable at June 30, 2017		103,481		$	8.47		4.78	$	1,076,479

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 period and the exercise price, multiplied by the number of in-the-money options).

There were 31,769 stock options exercised during the first six months of 2017. The aggregate intrinsic value of stock options exercised during the six months ended June 30, 2017 was $318,000. Exercise of stock options during the first six months of 2017 resulted in cash receipts of $313,000.

NOTE 10 – COMPREHENSIVE INCOME

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

30

	June 30, 2017									June 30, 2016
	Before			Tax Benefit			Net of			Before			Tax Benefit			Net of
For the quarter ended:	Tax Amount			(Expense)			Tax Amount			Tax Amount			(Expense)			Tax Amount
	(in thousands)									(in thousands)
Net unrealized gains (losses) on available for sale securities
Net unrealized holding gains arising during period	$	1,661		$	(632	)	$	1,029		$	2,684		$	(987	)	$	1,697
Reclassification adjustment for net losses arising during the period		15			(6	)		9			—			—			—
Net unrealized gains		1,676			(638	)		1,038			2,684			(987	)		1,697
Unrealized losses on derivatives		(186	)		65			(121	)		(193	)		67			(126	)
Change in minimum pension liability		—			—			—			8			(2	)		6
Other comprehensive income, net	$	1,490		$	(573	)	$	917		$	2,499		$	(922	)	$	1,577
For the six months ended:	Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount			Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount
	(in thousands)									(in thousands)
Net unrealized gains on available for sale securities
Net unrealized holding gains arising during period	$	2,845		$	(1,082	)	$	1,763		$	9,247		$	(3,393	)	$	5,854
Reclassification adjustment for net gains arising during the period		(2,524	)		884			(1,640	)		(370	)		137			(233	)
Net unrealized gains		321			(198	)		123			8,877			(3,256	)		5,621
Unrealized losses on derivatives		(165	)		58			(107	)		(193	)		67			(126	)
Change in minimum pension liability		—			—			—			72			(28	)		44
Other comprehensive income, net	$	156		$	(140	)	$	16		$	8,756		$	(3,217	)	$	5,539

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

31

	For the Three Months Ended June 30, 2017											For the Three Months Ended June 30, 2016
	Unrealized											Unrealized Gains
	Gains (Losses) on			Unrealized								on		Unrealized
	Available for Sale			Losses								Available for Sale		Losses
	Securities			on Derivatives			Pension Items		Total			Securities		on Derivatives			Pension Items		Total
Beginning balance	$	(1,032	)	$	686		$	38	$	(308	)	$	5,078	$	—		$	34	$	5,112
Other comprehensive income before classifications		1,029			(121	)		—		908			1,697		(126	)		6		1,577
Amounts reclassified from accumulated other comprehensive income		9			—			—		9			—		—			—		—
Net current period other comprehensive income (loss)		1,038			(121	)		—		917			1,697		(126	)		6		1,577
Ending balance	$	6		$	565		$	38	$	609		$	6,775		(126	)	$	40	$	6,689

	For the Six Months Ended June 30, 2017											For the Six Months Ended June 30, 2016
	Unrealized											Unrealized
	Gains (Losses) on			Unrealized								Gains on			Unrealized
	Available for Sale			Losses								Available for Sale			Losses
	Securities			on Derivatives			Pension Items		Total			Securities			on Derivatives			Pension Items			Total
Beginning balance	$	(117	)	$	672		$	38	$	593		$	1,154		$	—		$	(4	)	$	1,150
Other comprehensive income before classifications		1,763			(107	)		—		1,656			5,854			(126	)		44			5,772
Amounts reclassified from accumulated other comprehensive income		(1,640	)		—			—		(1,640	)		(233	)		—			—			(233	)
Net current period other comprehensive income		123			(107	)		—		16			5,621			(126	)		44			5,539
Ending balance	$	6		$	565		$	38	$	609		$	6,775			(126	)	$	40		$	6,689

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.

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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, 2017, 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:

33

	Quoted Prices in		Significant
	Active Markets		Other		Significant
	for Identical		Observable		Unobservable
	Assets		Inputs		Inputs		Total
	(Level 1)		(Level 2)		(Level 3)		Fair Value
	(in thousands)
June 30, 2017
Assets:
Investment securities, available for sale
U.S. Treasury and government agencies	$	5,696	$	136,748	$	—	$	142,444
Mortgage-backed securities		—		453,742		—		453,742
Obligations of states and political subdivisions		—		54,274		—		54,274
Other debt securities		—		5,095		—		5,095
Equity securities		4,722		12,887		—		17,609
Total securities available for sale		10,418		662,746		—		673,164
Derivative assets		—		6,379		—		6,379
Total Assets	$	10,418	$	669,125	$	—	$	679,543
Liabilities:
Derivative liabilities	$	—	$	5,511	$	—	$	5,511
Total Liabilities	$	—	$	5,511	$	—	$	5,511
December 31, 2016
Assets:
Investment securities, available for sale
U.S. Treasury and government agencies	$	5,931	$	111,428	$	—	$	117,359
Mortgage-backed securities		—		413,725		—		413,725
Obligations of states and political subdivisions		—		48,326		—		48,326
Other debt securities		—		5,412		—		5,412
Equity securities		7,748		14,134		—		21,882
Total securities available for sale		13,679		593,025		—		606,704
Derivative assets		—		3,378		—		3,378
Total Assets	$	13,679	$	596,403	$	—	$	610,082
Liabilities:
Derivative liabilities	$	—	$	2,345	$	—	$	2,345
Total Liabilities	$	—	$	2,345	$	—	$	2,345

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

	(Level 1)		(Level 2)		(Level 3)		Total Fair Value
			(in thousands)
June 30, 2017
Assets:
Impaired loans and leases	$	—	$	—	$	25,422	$	25,422
Loans held for sale		—		877		—		877
Other real estate owned and other repossessed assets		—		—		1,415		1,415
December 31, 2016
Assets:
Impaired loans and leases	$	—	$	—	$	25,285	$	25,285
Loans held for sale		—		1,742		—		1,742
Other real estate owned and other repossessed assets		—		—		1,072		1,072

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 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 5-10%) 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 re-measured 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, 2017 and

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December 31, 2016 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 $27.5 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. Management performs a credit analysis before investing in these securities.

FHLB stock is an equity interest that can be sold to the issuing FHLB, to other Federal Home Loan Banks, or to other member banks at its par value. Because ownership of these securities is restricted, they do not have a readily determinable fair value. As such, the Company’s FHLB stock is recorded at cost or par value and is evaluated for impairment each reporting period by considering the ultimate recoverability of the investment rather than temporary declines in value. The Company’s evaluation primarily includes an evaluation of liquidity, capitalization, operating performance, commitments, and regulatory or legislative events.

The net loan portfolio at June 30, 2017 and December 31, 2016 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, 2017 and December 31, 2016:

	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, 2017
Financial Assets:
Investment securities held to maturity	$	138,468	$	138,619	$	—	$	110,139	$	28,480
Federal Home Loan Bank and other membership bank stocks		18,899		18,899		—		18,899		—
Loans and leases, net		4,017,908		4,019,534		—		—		4,019,534
Financial Liabilities:
Certificates of deposit		566,245		564,084		—		564,084		—
Other borrowings		312,251		312,136		—		312,136		—
Subordinated debentures		104,842		95,588		—		—		95,588
December 31, 2016
Financial Assets:
Investment securities held to maturity	$	147,614	$	146,990	$	—	$	111,403	$	35,587
Federal Home Loan Bank and other membership bank stocks		15,099		15,099		—		15,099		—
Loans and leases, net		3,839,353		3,832,465		—		—		3,832,465
Financial Liabilities:
Certificates of deposit		544,908		543,399		—		543,399		—
Other borrowings		260,866		264,586		—		264,586		—
Subordinated debentures		104,784		94,476		—		—		94,476

NOTE 12 – RECENT ACCOUNTING PRONOUNCMENTS

In May 2017, the Financial Accounting Standards Board (“FASB”) issued an update which provides clarity and reduces diversity in practice when accounting for the modification of terms and conditions for share-based payment awards. Previous accounting guidance did not distinguish between modifications which were substantive from modifications that were merely administrative. The accounting standards update requires entities to account for the effects of a modification unless the following three conditions are met: the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified; the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. This update will be effective for annual and interim periods 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 March 2017, the FASB issued an update which shortens the amortization period for certain callable debt securities held at a premium to the earliest call date. Under current GAAP, entities amortize the premium as an adjustment of yield over the contractual life of the instrument even if the holder is certain that the call will be exercised. As a result, upon the exercise of a

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call on a callable debt security held at a premium, the unamortized premium is recorded as a loss in earnings. The update shortens the amortization period for certain callable debt securities held at a premium and requires the premium be amortized to the earliest call date. This update will be effective for annual and interim periods beginning after December 15, 2018. Entities are required to apply the amendments on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The adoption of this update is not expected to have a material impact on the Company’s financial statements.

In March 2017, the FASB issued an update which improves the presentation of net periodic pension cost and net periodic postretirement benefit cost in a company’s income statement. The amendment requires that an employer report the service cost component in the same line items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. The amendment is effective for annual and interim periods 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 January 2017, the FASB issued an update to simplify the test for goodwill impairment. This amendment eliminates Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. This update will be effective for the Company’s financial statements for fiscal years beginning after December 15, 2019. The adoption of this update is not expected to have a material impact on the Company’s financial statements.

In January 2017, the FASB issued an update that clarifies the definition of a business as it pertains to business combinations. This amendment affects all companies and other reporting organizations that must determine whether they have sold or acquired a business. This update will be effective for the Company’s financial statements for 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 2016, the FASB issued an accounting standards update to address diversity in presentation in how certain cash receipts and cash payments are presented and classified in 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 adoption of this update is not expected to have a material impact on the Company’s financial statements.

In June 2016, the 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 forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. This update is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2019. The Company is currently evaluating its existing systems and data to support the new standard as well as 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. The standard specifically requires excess tax benefits and tax deficiencies to be recorded in the income statement when awards vest or are settled. The Company adopted this accounting standards update in the first quarter of 2017. As a result, during the first six months of 2017, the Company recorded $582,000 in excess tax benefits in the income statement. The Company elected to continue its existing practice of estimating the number of awards that will be forfeited. The Company elected to apply the cash flow classification guidance prospectively, and therefore, prior periods have not been adjusted.

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. The Company adopted this accounting standards update in the first quarter of 2017. The adoption of this update did not have a material impact on the Company’s financial statements.

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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 of the new guidance on its consolidated financial statements. The Company expects to recognize a right-of-use asset and a lease liability for its operating lease commitments.

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 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. In evaluating this standard, management has determined that the majority of revenue earned by the Company is from revenue streams not included in the scope of this standard and therefore management does not expect the new revenue recognition guidance to have a material impact on its consolidated 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, 2016.

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, 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, and competition.

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. and Lakeland Preferred Equity, Inc. All intercompany balances and transactions have been eliminated.

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. These estimates and assumptions also affect reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. There have been no material changes in the Company’s critical accounting policies, judgments and estimates, including assumptions or estimation techniques utilized, as compared to those disclosed in the Company’s most recent Annual Report on Form 10-K.

Management Overview

The quarter and six months ended June 30, 2017 represented a period of continued growth for the Company. As discussed in this Management’s Discussion and Analysis:

• Net income for the second quarter of 2017 of $13.4 million compared to $10.1 million for the same period in 2016. Diluted earnings per share of $0.28 represents a 17% increase over $0.24 for the same period in 2016.

• For the second quarter of 2017, annualized return on average assets was 1.02%, annualized return on average common equity was 9.49%, and annualized return on average tangible common equity was 12.58% compared

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to 0.93%, 9.04%, and 12.63%, respectively, for the second quarter of 2016.

• Net income for the first six months of 2017 was $25.7 million, or $0.53 per diluted share, compared to $18.2 million, or $0.44 per diluted share, for the same period in 2016. 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, 2017 was 1.00%, the annualized return on average common equity was 9.26%, and the annualized return on average tangible common equity was 12.31% compared to 0.85%, 8.23% and 11.53%, respectively, for the same period in 2016.

• Commercial loans grew $190.6 million, or 6% during the first six months of 2017, while total loans grew $180.4 million, or 5%, to $4.05 billion during the same time period.

• Net interest margin (“NIM”) was 3.41% in the second quarter of 2017 compared to 3.33% in the prior quarter and 3.27% in the quarter ended December 31, 2016. The NIM increase from the linked quarter was primarily due to loan yields increasing five basis points coupled with an additional two basis points in loan prepayment fees, partially offset by rising deposit costs.

• Noninterest bearing deposits increased $51.4 million from December 31, 2016 to June 30, 2017, or 6%, to $978.7 million.

• The efficiency ratio of 52.6% in the second quarter of 2017 decreased from 56.3% for the same period in 2016.

Comparison of Operating Results for the Three Months Ended June 30, 2017 and 2016

Net Income

Net income was $13.4 million, or $0.28 per diluted share, for the second quarter of 2017 compared to net income of $10.1 million, or $0.24 per diluted share, for the second quarter of 2016. Excluding the impact of merger related expenses, net income would have been $10.7 million, or $0.26 per diluted share, for the second quarter of 2016. Net interest income of $41.4 million for the second quarter of 2017 increased $6.3 million from the second quarter of 2016 due primarily to a $8.2 million increase in interest income, partially offset by an increase of $1.9 million in interest expense. The increase in interest income reflects an increase in interest-earning assets resulting from the Harmony acquisition, from organic growth and from an increase in rates caused by the recent increases in the federal funds rate and prime rate.

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 2017 was $41.7 million, compared to $35.3 million for the second quarter of 2016. The net interest margin decreased from 3.47% in the second quarter of 2016 to 3.41% in the second quarter of 2017 primarily as a result of a 13 basis point increase in the cost of interest-bearing liabilities, partially offset by a 3 basis point increase in the yield on interest-earning assets. The increase in the cost of interest-bearing liabilities was due primarily to an increase in the cost of borrowings resulting from the subordinated debt issuance in the third quarter of 2016 as well as a higher cost of deposits. The decrease in 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 $153.5 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

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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 Three Months Ended,								For the Three Months Ended,
	June 30, 2017								June 30, 2016
						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 (1)	$	4,011,325		$	42,740		4.27	%	$	3,412,503		$	35,800		4.22	%
Taxable investment securities and other		724,675			3,818		2.11	%		493,688			2,696		2.18	%
Tax-exempt securities		112,400			803		2.86	%		81,518			642		3.15	%
Federal funds sold (2)		59,088			132		0.89	%		106,866			124		0.46	%
Total interest-earning assets		4,907,488			47,493		3.88	%		4,094,575			39,262		3.85	%
Noninterest-earning assets:
Allowance for loan and lease losses		(32,234	)							(30,898	)
Other assets		365,901								339,912
TOTAL ASSETS	$	5,241,155							$	4,403,589
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-bearing liabilities:
Savings accounts	$	492,991		$	71		0.06	%	$	485,580		$	64		0.05	%
Interest-bearing transaction accounts		2,295,256			2,513		0.44	%		1,775,129			1,376		0.31	%
Time deposits		559,665			1,200		0.86	%		487,169			964		0.79	%
Borrowings		344,833			2,007		2.30	%		377,937			1,531		1.62	%
Total interest-bearing liabilities		3,692,745			5,791		0.63	%		3,125,815			3,935		0.50	%
Noninterest-bearing liabilities:
Demand deposits		954,966								801,488
Other liabilities		28,233								25,480
Stockholders’ equity		565,211								450,806
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	5,241,155							$	4,403,589
Net interest income/spread					41,702		3.25	%					35,327		3.35	%
Tax equivalent basis adjustment					281								225
NET INTEREST INCOME				$	41,421							$	35,102
Net interest margin (3)							3.41	%							3.47	%

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

(2) Includes interest-bearing cash accounts.

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

Interest income on a tax equivalent basis increased from $39.3 million in the second quarter of 2016 to $47.5 million in the second quarter of 2017, an increase of $8.2 million, or 21%. The increase in interest income was primarily a result of the Harmony acquisition as well as organic growth in loans, as average loans and leases increased $598.8 million compared to the second quarter of 2016. The yield on average loans and leases at 4.27% in the second quarter of 2017 was 5 basis points higher than the second quarter of 2016. The yield on average taxable and tax-exempt investment securities decreased by 7 and 29 basis points, respectively, compared to the second quarter of 2016. The reduction in the yield on taxable investment securities resulted from the receipt of $101,000 in income from calls on U.S. government agency securities in the second quarter of 2016. The reduction in yields on tax-exempt investment securities was due primarily to maturing securities at higher rates and new purchases of shorter term securities at lower rates.

Total interest expense of $5.8 million in the second quarter of 2017 was $1.9 million greater than the $3.9 million reported for the same period in 2016. The cost of average interest-bearing liabilities increased from 0.50% in the second quarter of 2016 to 0.63% in the second quarter of 2017. The increase in the cost of interest-bearing liabilities was due primarily to an

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increase in the cost of borrowings, higher costing deposits acquired in the Harmony acquisition as well as an increasingly competitive market for deposits resulting from a higher interest rate environment. The 68 basis point increase in the cost of borrowings was due primarily to the $75.0 million issuance of subordinated debt in September 2016 bearing a rate of 5.125%. The prepayment of FHLB borrowings and term repurchase agreements mitigated the impact of the subordinated debt. The cost of interest-bearing liabilities was impacted by an increase in the cost of interest-bearing transaction accounts and time deposits which increased by 13 basis points and 7 basis points, respectively.

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 charge-offs; and the results of independent third party loan review.

In the second quarter of 2017, a $1.8 million provision for loan and lease losses was recorded, which was $817,000 higher than the provision for the same period last year. The higher provision resulted from growth in commercial real estate loans. The Company charged off $870,000 and recovered $276,000 in the second quarter of 2017 compared to $1.0 million and $149,000, respectively, in the second quarter of 2016. For more information regarding the determination of the provision, see “Risk Elements” below.

Noninterest Income

Noninterest income at $6.1 million in the second quarter of 2017 increased by $1.2 million compared to $4.9 million in the second quarter of 2016. Service charges on deposit accounts of $2.7 million in the second quarter of 2017 increased $151,000 compared to the same period last year, due primarily to changes in the fee structure on deposit accounts. Gains on sales of loans totaling $471,000 for the second quarter of 2017 increased 11% compared to the same period in 2016 due primarily to increased gains on sales of SBA loans. Income on bank owned life insurance of $500,000 in the second quarter of 2017 increased $86,000 or 21% compared to the second quarter of 2016 due primarily to the addition of new policies. Other income at $1.3 million in the second quarter of 2017 was $922,000 higher than the same period in 2016 due primarily to an $118,000 increase in gains on sales of other real estate owned, a $324,000 gain on the payoff of an acquired loan and $337,000 in the gain on the sale of a former branch.

Noninterest Expense

Noninterest expense in the second quarter of 2017 totaled $25.4 million, which was $1.7 million greater than the $23.7 million reported for the second quarter of 2016. Salaries and employee benefits expense of $15.1 million, increased $2.0 million from the same period last year, primarily due to the addition of Harmony employees during the second half of 2016 and year-over-year increases in employee salary and benefit costs. Net occupancy expense increased $166,000, compared to the second quarter of 2016, due primarily to the addition of the Harmony branches. Stationary, supplies and postage increased $156,000 compared to the second quarter of 2016 due primarily to consumer deposit mailings during the second quarter of 2017. Marketing expense of $508,000 in the second quarter of 2017 increased $123,000 compared to the same period last year due primarily to advertising related to the opening of the new branch in New York as well as new marketing efforts directed at the Ocean county region. FDIC insurance expense of $425,000 in the second quarter of 2017 decreased $256,000 compared to the same period last year, due primarily to the decreased non-performing loans and increased capital levels. ATM and debit card expense of $517,000 increased $134,000 due primarily to increased volume in debit card transactions as well as one-time charges due to a change in platform. During the second quarter of 2016, the Company incurred $685,000 in merger related expenses compared to none during the same period this year. The Company’s efficiency ratio, a non-GAAP financial measure, was 52.6% in the second quarter of 2017, compared to 56.3% for the same period last year. The decrease in this ratio reflects a 19% increase in revenue as well as the realization of cost savings from the Pascack and Harmony acquisitions, and the closure of seven branches in 2016. The Company uses this ratio because it believes that the ratio provides a good comparison of period-to-period performance and because the ratio is widely accepted in the banking industry. The following table shows the calculation of the efficiency ratio for the periods presented:

43

	For the Three Months Ended June 30,
	2017			2016
	(dollars in thousands)
Calculation of Efficiency Ratio
Total noninterest expense	$	25,366		$	23,715
Amortization of core deposit intangibles		(190	)		(164	)
Merger related expenses		—			(685	)
Provision for unfunded lending commitments		—			(230	)
Noninterest expense, as adjusted	$	25,176		$	22,636
Net interest income	$	41,421		$	35,102
Noninterest income		6,111			4,885
Total revenue		47,532			39,987
Tax-equivalent adjustment on municipal securities		281			225
Losses on sales of investment securities		15			—
Total revenue, as adjusted	$	47,828		$	40,212
Efficiency ratio		52.6	%		56.3	%

Income Tax Expense

The effective tax rate in the second quarter of 2017 was 34.3% compared to 33.6% during the same period last year primarily as a result of a decrease in tax advantaged items as a percent of pretax income.

Comparison of Operating Results for the Six Months Ended June 30, 2017 and 2016

Net Income

Net income was $25.7 million, or $0.53 per diluted share, for the first half of 2017 compared to net income of $18.2 million, or $0.44 per diluted share, for the first half of 2016. Excluding the impact of merger related expenses, net income would have been $20.0 million, or $0.48 per diluted share, for the first half of 2016. Net interest income of $80.7 million for the first half of 2017 increased $11.8 million from the first half of 2016 due primarily to a $15.4 million increase in interest income, partially offset by an increase of $3.6 million in interest expense. The increase in interest income reflects an increase in interest-earning assets resulting from the Harmony acquisition, organic growth and an increase in market rates.

Net Interest Income

Net interest income on a tax equivalent basis for the first six months of 2017 was $81.3 million, compared to $69.4 million for the first six months of 2016. The net interest margin decreased from 3.48% in the first half of 2016 to 3.37% in the first half of 2017 primarily as a result of a 12 basis point increase in the cost of interest-bearing liabilities as well as a 3 basis point decrease in the yield on earning assets. The increase in the cost of interest-bearing liabilities was due primarily to an increase in the cost of borrowings resulting from the subordinated debt issuance in the third quarter of 2016 as well as a moderately higher cost of deposits. The decrease in yield on interest-earning assets was due primarily to a 17 and 45 basis point decrease in yield on taxable and tax-exempt securities, respectively. The reduction in yields on investment securities was due primarily to maturing securities at higher rates and new purchases at lower rates. The decrease in 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 $157.6 million. The components of net interest income will be discussed in greater detail below.

44

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, 2017								June 30, 2016
						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 (1)	$	3,958,564		$	83,151		4.24	%	$	3,348,421		$	69,921		4.20	%
Taxable investment securities and other		700,971			7,417		2.12	%		494,788			5,658		2.29	%
Tax-exempt securities		112,719			1,588		2.82	%		78,106			1,277		3.27	%
Federal funds sold (2)		94,643			408		0.86	%		92,553			199		0.43	%
Total interest-earning assets		4,866,897			92,564		3.83	%		4,013,868			77,055		3.86	%
Noninterest-earning assets:
Allowance for loan and lease losses		(32,063	)							(31,013	)
Other assets		362,931								343,175
TOTAL ASSETS	$	5,197,765							$	4,326,030
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-bearing liabilities:
Savings accounts	$	491,890		$	139		0.06	%	$	480,725		$	157		0.07	%
Interest-bearing transaction accounts		2,268,752			4,631		0.41	%		1,728,855			2,624		0.31	%
Time deposits		557,479			2,348		0.84	%		476,097			1,828		0.77	%
Borrowings		352,926			4,146		2.34	%		388,680			3,047		1.57	%
Total interest-bearing liabilities		3,671,047			11,264		0.62	%		3,074,357			7,656		0.50	%
Noninterest-bearing liabilities:
Demand deposits		938,460								780,843
Other liabilities		28,730								25,015
Stockholders’ equity		559,528								445,815
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	5,197,765							$	4,326,030
Net interest income/spread					81,300		3.22	%					69,399		3.36	%
Tax equivalent basis adjustment					556								447
NET INTEREST INCOME				$	80,744							$	68,952
Net interest margin (3)							3.37	%							3.48	%

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

(2) Includes interest-bearing cash accounts.

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

Interest income on a tax equivalent basis increased from $77.1 million in the first half of 2016 to $92.6 million in the first half of 2017, an increase of $15.5 million, or 20%. The increase in interest income was a result of the Harmony acquisition as well as organic growth in loans, as average loans and leases increased $610.1 million compared to the first half of 2016. The yield on average loans and leases at 4.24% in the first half of 2017 was 4 basis points higher than the first half of 2016. The yield on average taxable and tax-exempt investment securities decreased by 17 and 45 basis points, respectively, compared to the first half of 2016. The reduction in the yield of taxable investment securities resulted primarily from $358,000 in income on called U.S. government agency securities received in the first six months of 2016. As previously mentioned, the reduction in yields on tax-exempt investment securities was due primarily to maturing securities at higher rates and new purchases of shorter term securities at lower rates.

Total interest expense of $11.3 million in the first half of 2017 was $3.6 million greater than the $7.7 million reported for the same period in 2016. The cost of average interest-bearing liabilities increased from 0.50% in the first half of 2016 to 0.62% in the first half of 2017. The increase in the cost of interest-bearing liabilities was due primarily to an increase in the cost of borrowings, higher costing deposits acquired in the Harmony acquisition as well as an increasingly competitive market for deposits. The 77 basis point increase in the cost of borrowings was due primarily to the $75.0 million issuance of subordinated debt in September 2016 bearing a rate of 5.125%. Also impacting the cost of interest-bearing liabilities was an increase in the cost of interest-bearing transaction accounts and time deposits which increased by 10 basis points and 7 basis points, respectively.

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Provision for Loan and Lease Losses

In the first half of 2017, a $3.0 million provision for loan and lease losses was recorded, which was $960,000 higher than the provision for the same period last year. The higher provision resulted from commercial real estate loan growth and higher charge-offs in commercial construction loans. The Company charged off $2.2 million and recovered $763,000 in the first half of 2017 compared to $2.6 million and $296,000, respectively, in the first half of 2016. For more information regarding the determination of the provision, see “Risk Elements” below.

Noninterest Income

Noninterest income of $14.2 million in the first half of 2017 increased by $4.5 million compared to $9.8 million in the first half of 2016. Included in noninterest income in the first half of 2017 was $2.5 million in gains on sales of investment securities, which compares to $370,000 during the same period last year. Commissions and fees at $2.3 million in the first half of 2017 increased $213,000 compared to the same period last year due primarily to increases in commercial loan fees and credit card related merchant service fees. Income on bank owned life insurance of $926,000 for the first half of 2017 increased $104,000 compared to the same period in 2016 due primarily to the addition of new policies. Other income of $2.5 million in the first half of 2017 was $1.8 million higher than the same period in 2016 due primarily to a $333,000 increase in swap fee income, a $396,000 increase in gains on sales of other real estate owned, a $324,000 gain on the payoff of an acquired loan and $706,000 in gains on the sale of two former branches.

Noninterest Expense

Noninterest expense in the first half of 2017 totaled $53.8 million, which was $4.7 million greater than the $49.1 million reported for the first half of 2016. During the first half of 2017, the Company incurred $2.8 million in long-term debt prepayment penalties, and in the first half of 2016, the Company incurred $2.4 million in merger related expenses. Salaries and employee benefits expense of $30.5 million, increased $3.3 million from the same period last year, primarily due to the addition of Harmony employees during the second half of 2016 and year-over-year increases in employee salary and benefit costs. Net occupancy expense increased $314,000 compared to the first half of 2016, due primarily to the addition of the Harmony branches. Stationary, supplies and postage increased $156,000 compared to the first half of 2016 due primarily to the same reason discussed in the quarterly comparison. Marketing expense of $909,000 in the first half of 2017 increased $215,000 compared to the same period last year due to the same reasons discussed in the quarterly comparison. FDIC insurance expense of $743,000 in the first half of 2017 decreased $528,000 compared to the same period last year, due primarily to the same reasons discussed in the quarterly comparison. ATM and debit card expense of $958,000 for the first half of 2017 increased $229,000 compared to the same period in 2016 due primarily to the same reasons discussed in the quarterly comparison. Other expenses of $5.2 million in the first half of 2017 increased $415,000 compared to the first half of 2016 primarily due to higher correspondent, legal and audit fees. The Company’s efficiency ratio, a non-GAAP financial measure, was 54.4% in the first half of 2017, compared to 58.3% for the same period last year. The decrease in this ratio reflects an 18% increase in revenue as well as the realization of cost savings from the Pascack and Harmony acquisitions, and the closure of seven branches in 2016. The Company uses this ratio because it believes that the ratio provides a good comparison of period-to-period performance and because the ratio is widely accepted in the banking industry. The following table shows the calculation of the efficiency ratio for the periods presented:

46

	For the Six Months Ended June 30,
	2017			2016
	(dollars in thousands)
Calculation of Efficiency Ratio
Total noninterest expense	$	53,836		$	49,139
Less:
Amortization of core deposit intangibles		(385	)		(331	)
Long-term debt prepayment penalty		(2,828	)		—
Merger related expenses		—			(2,406	)
Provision for unfunded lending commitments		—			(438	)
Noninterest expense, as adjusted	$	50,623		$	45,964
Net interest income	$	80,744		$	68,952
Noninterest income		14,205			9,752
Total revenue		94,949			78,704
Tax-equivalent adjustment on municipal securities		556			447
Gains on sales of investment securities		(2,524	)		(370	)
Total revenue, as adjusted	$	92,981		$	78,781
Efficiency ratio		54.4	%		58.3	%

Income Tax Expense

The effective tax rate in the first half of 2017 was 32.5% compared to 33.6% during the same period last year. The decrease in the effective tax rate was due primarily to the implementation of ASU 2016-09 during the first quarter of 2017 which resulted in a $582,000 tax benefit related to excess tax benefits from the exercise of stock options and the vesting of restricted stock and RSUs.

Financial Condition

The Company’s total assets increased $269.1 million from December 31, 2016, to $5.36 billion at June 30, 2017. Total loans net of deferred fees were $4.05 billion, an increase of $180.1 million, or 5%, from $3.87 billion at December 31, 2016. Total deposits were $4.23 billion, an increase of $134.4 million, or 3%, from December 31, 2016.

Loans and Leases

Gross loans and leases of $4.05 billion at June 30, 2017 increased $180.4 million from December 31, 2016, primarily in the commercial loans secured by real estate category which increased $168.8 million, or 7%, during that time period. Real estate construction loans also increased $19.1 million, or 9%, while residential mortgages decreased $11.8 million, or 3%. The decline in residential mortgages results from a decision to sell most of the residential loans that the Company originates. 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, excluding PCI loans, decreased from $21.5 million at December 31, 2016 to $17.7 million at June 30, 2017, primarily in the commercial secured by real estate and residential mortgages categories, which decreased $1.6 million and $2.2 million, respectively. The percentage of non-performing assets to total assets decreased from 0.42% at December 31, 2016 to 0.33% at June 30, 2017. Non-accrual loans at June 30, 2017 included two loan relationships with a balance of $1.0 million or over, totaling $3.6 million, and six loan relationships between $500,000 and $1.0 million, totaling $4.1 million.

There were $20,000 in loans and leases past due ninety days or more and still accruing at June 30, 2017 compared to $10,000 at December 31, 2016. These loans primarily consist 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, 2017, the Company had $11.7 million in loans that were troubled debt restructurings and accruing interest income compared to $8.8 million at December 31, 2016. 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, 2017, the Company had $25.4 million in impaired loans (consisting primarily of non-accrual and restructured loans and leases) compared to $25.3 million at year-end 2016. The Company also had purchased credit impaired loans from the Pascack and Harmony acquisitions with carrying values of $214,000 and $528,000, respectively, at June 30, 2017. 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, $423,000 of the allowance for loan and lease losses has been allocated for impairment at June 30, 2017 compared to $529,000 at December 31, 2016. At June 30, 2017, the Company also had $22.8 million in loans and leases that were rated substandard that were not classified as non-performing or impaired compared to $28.7 million at December 31, 2016.

There were no loans and leases at June 30, 2017, 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.

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:

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	Six Months			Six Months			Year
	Ended			Ended			Ended
	June 30,			June 30,			December 31,
(dollars in thousands)	2017			2016			2016
Balance of the allowance at the beginning of the year	$	31,245		$	30,874		$	30,874
Loans and leases charged off:
Commercial, secured by real estate		(303	)		(274	)		(410	)
Commercial, industrial and other		(234	)		(796	)		(796	)
Leases		(163	)		(275	)		(366	)
Real estate - mortgage		(310	)		(306	)		(1,103	)
Real estate - construction		(609	)		—			—
Home equity and consumer		(611	)		(937	)		(1,980	)
Total loans charged off		(2,230	)		(2,588	)		(4,655	)
Recoveries:
Commercial, secured by real estate		364			81			297
Commercial, industrial and other		122			76			202
Leases		32			22			31
Real estate - mortgage		—			4			8
Real estate - construction		20			—			18
Home equity and consumer		225			113			247
Total recoveries		763			296			803
Net charge-offs:		(1,467	)		(2,292	)		(3,852	)
Provision for loan and lease losses		3,045			2,085			4,223
Ending balance	$	32,823		$	30,667		$	31,245
Net charge-offs as a percentage of average loans and leases outstanding		0.07	%		0.14	%		0.11	%
Allowance as a percentage of total loans and leases oustanding		0.81	%		0.89	%		0.81	%

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 impaired 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 qualitative 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, the cyclical nature of economic and business conditions, and capitalization rates. 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.

49

The overall balance of the allowance for loan and lease losses of $32.8 million at June 30, 2017 increased $1.6 million, from December 31, 2016, an increase of 5%. 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.

Non-performing loans and leases of $16.2 million at June 30, 2017 decreased $4.2 million from December 31, 2016. The allowance for loan and lease losses as a percent of total loans was 0.81% of total loans at both June 30, 2017 and December 31, 2016. 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, 2017.

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 $754.3 million at December 31, 2016 to $811.6 million at June 30, 2017, an increase of $57.3 million.

Deposits

Total deposits increased from $4.09 billion at December 31, 2016 to $4.23 billion at June 30, 2017, an increase of $134.4 million, or 3%. Noninterest-bearing deposits, savings and interest-bearing transaction accounts and time deposits increased $51.4 million, $61.6 million and $21.3 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 $33.1 million for the first half of 2017 compared to $11.1 million for the same period in 2016.

• Deposits. Lakeland can offer new products or change its rate structure in order to increase deposits. In the first six months of 2017, Lakeland’s deposits increased $134.4 million.

• Sales of securities. At June 30, 2017 the Company had $673.2 million in securities designated “available for sale.” Of these securities, $452.6 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, 2017. Lakeland also has overnight federal funds lines available for it to borrow up to $210.0 million of which $91.6 million was outstanding at June 30, 2017. 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, 2017.

• 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

50

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, 2017 follows.

Cash and cash equivalents totaling $185.7 million on June 30, 2017 increased $9.9 million from December 31, 2016. Operating activities provided $33.1 million in net cash. Investing activities used $259.3 million in net cash, primarily reflecting an increase in loans and leases and the purchase of securities. Financing activities provided $236.1 million in net cash primarily reflecting the net increase in deposits of $134.7 million and net proceeds from federal funds purchased and other borrowings of $111.1 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, 2017. Interest on subordinated debentures and long-term borrowed funds is calculated based on current contractual interest rates.

					After One		After Three
			Within		But Within		But Within		After
	Total		One Year		Three Years		Five Years		Five Years
	(dollars in thousands)
Minimum annual rentals on noncancellable operating leases	$	30,417	$	3,129	$	5,795	$	4,914	$	16,579
Benefit plan commitments		6,160		349		838		793		4,180
Remaining contractual maturities of time deposits		566,245		394,443		144,440		27,353		9
Subordinated debentures		104,842		—		—		—		104,842
Loan commitments		902,606		620,500		141,408		22,322		118,376
Other borrowings		312,251		207,460		96,187		8,604		—
Interest on other borrowings*		60,299		7,708		11,724		10,121		30,746
Standby letters of credit		13,725		10,616		2,998		31		80
Total	$	1,996,545	$	1,244,205	$	403,390	$	74,138	$	274,812

* Includes interest on other borrowings and subordinated debentures at a weighted rate of 2.43%.

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Capital Resources

Total stockholders’ equity increased from $550.0 million on December 31, 2016 to $567.5 million on June 30, 2017, an increase of $17.5 million. Book value per common share increased to $11.99 on June 30, 2017 from $11.65 on December 31, 2016. Tangible book value per share increased from $8.70 per share on December 31, 2016 to $9.05 per share on June 30, 2017, an increase of 4%. Please see “Non-GAAP Financial Measures” below. The increase in stockholders’ equity from December 31, 2016 to June 30, 2017 was primarily due to $25.7 million of net income, partially offset by the payment of cash dividends on common stock of $9.3 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, 2017, 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, 2017, the Company’s capital levels remained characterized as “well-capitalized” under the new rules.

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

	Tier 1 Capital to Total Average Assets Ratio						Common Equity Tier 1 to Risk-Weighted Assets Ratio						Tier 1 Capital to Risk- Weighted Assets Ratio						Total Capital to Risk- Weighted Assets Ratio
	June 30,			December 31,			June 30,			December 31,			June 30,			December 31,			June 30,			December 31
	2017			2016			2017			2016			2017			2016			2017			2016
The Company		8.99	%		9.07	%		10.06	%		10.11	%		10.77	%		10.85	%		13.32	%		13.48	%
Lakeland Bank		10.01	%		10.21	%		11.98	%		12.21	%		11.98	%		12.21	%		12.81	%		13.03	%
Required capital ratios including conservation buffer		4.00	%		4.00	%		5.75	%		5.125	%		7.25	%		6.625	%		9.25	%		8.625	%
“Well capitalized” institution under FDIC Regulations		5.00	%		5.00	%		6.50	%		6.50	%		8.00	%		8.00	%		10.00	%		10.00	%

Non-GAAP Financial Measures

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

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

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

52

	June 30,			December 31,
(dollars in thousands, except per share amounts)	2017			2016
Calculation of Tangible Book Value per Common Share
Total common stockholders’ equity at end of period - GAAP	$	567,545		$	550,044
Less:
Goodwill		136,433			135,747
Other identifiable intangible assets, net		2,631			3,344
Total tangible common stockholders’ equity at end of period - Non-GAAP	$	428,481		$	410,953
Shares outstanding at end of period		47,353			47,223
Book value per share - GAAP	$	11.99		$	11.65
Tangible book value per share - Non-GAAP	$	9.05		$	8.70
Calculation of Tangible Common Equity to Tangible Assets
Total tangible common stockholders’ equity at end of period - Non-GAAP	$	428,481		$	410,953
Total assets at end of period	$	5,362,187		$	5,093,131
Less:
Goodwill		136,433			135,747
Other identifiable intangible assets, net		2,631			3,344
Total tangible assets at end of period - Non-GAAP	$	5,223,123		$	4,954,040
Common equity to assets - GAAP		10.58	%		10.80	%
Tangible common equity to tangible assets - Non-GAAP		8.20	%		8.30	%

	For the Three Months Ended,						For the Six Months ended,
	June 30,			June 30,			June 30,			June 30,
(dollars in thousands)	2017			2016			2017			2016
Calculation of Return on Average Tangible Common Equity
Net income - GAAP	$	13,370		$	10,130		$	25,682		$	18,238
Total average common stockholders’ equity	$	565,211		$	450,806		$	559,528		$	445,815
Less:
Average goodwill		135,755			125,424			135,751			124,923
Average other identifiable intangible assets, net		3,069			2,828			3,172			2,874
Total average tangible common stockholders’ equity - Non-GAAP	$	426,387		$	322,554		$	420,605		$	318,018
Return on average common stockholders’ equity - GAAP		9.49	%		9.04	%		9.26	%		8.23	%
Return on average tangible common stockholders’ equity - Non-GAAP		12.58	%		12.63	%		12.31	%		11.53	%

53

	For the Three Months Ended						For the Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2017			2016			2017			2016
	(in thousands, except per share amounts)
Reconciliation of Earnings per Share
Net income - GAAP	$	13,370		$	10,130		$	25,682		$	18,238
Non-routine transactions, net of tax
Tax deductible merger related expenses		—			175			—			986
Non-tax deductible merger related expenses		—			389			—			739
Net effect of non-routine transactions		—			564			—			1,725
Net income available to common shareholders excluding non-routine transactions		13,370			10,694			25,682			19,963
Less: Earnings allocated to participating securities		(119	)		(106	)		(239	)		(161	)
	$	13,251		$	10,588		$	25,443		$	19,802
Weighted average shares - Basic		47,465			41,238			47,410			41,084
Weighted average shares - Diluted		47,674			41,406			47,646			41,245
Basic earnings per share, GAAP	$	0.28		$	0.24		$	0.54		$	0.44
Diluted earnings per share, GAAP	$	0.28		$	0.24		$	0.53		$	0.44
Basic earnings per share, adjusted for non-routine transactions	$	0.28		$	0.26		$	0.54		$	0.48
Diluted earnings per share, adjusted for non-routine transactions	$	0.28		$	0.26		$	0.53		$	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 $164.6 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, 2017		-0.7	%	-3.1	%
December 31, 2016		-0.5	%	-2.4	%

54

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, 2017		0.7	%	0.7	%	0.5	%	-6.1	%
December 31, 2016		1.9	%	1.4	%	0.9	%	-4.8	%

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, 2017 (the base case) was $751.4 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, 2017		-5.9	%	-3.6	%	-1.4	%	-0.5	%
December 31, 2016		-7.5	%	-4.9	%	-2.2	%	0.4	%

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, 2016.

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.

55

Item 4.  Controls and Procedures

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

(b)        Changes in internal controls over financial reporting. There have been no changes in the Company’s internal control over financial reporting that occurred during the quarter ended June 30, 2017 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

56

PART II. OTHER INFORMATION

Item 1.   Legal Proceedings

There are no pending legal proceedings involving the Company or Lakeland other than those arising in the normal course of business. Management does not anticipate that the potential liability, if any, arising out of such legal proceedings will have a material effect on the financial condition or results of operations of the Company and Lakeland on a consolidated basis.

Item 1A.   Risk Factors

There have been no material changes in risk factors from those disclosed under Item 1A, “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds	Not  Applicable
Item 3.   Defaults Upon Senior Securities	Not Applicable
Item 4.   Mine Safety Disclosures	Not Applicable
Item 5.   Other Information	Not Applicable

Item 6.   Exhibits

31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	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

57

SIGNATURES

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

Lakeland Bancorp, Inc.

(Registrant)

/s/ Thomas J. Shara

Thomas J. Shara

President and Chief Executive Officer

(Principal Executive Officer)

/s/ Thomas F. Splaine

Thomas F. Splaine

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

Date: August 8, 2017

58

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 8, 2017

/s/ Thomas J. Shara

Thomas J. Shara

President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Thomas F. Splaine, 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 8, 2017

/s/ Thomas F. Splaine

Thomas F. Splaine

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, 2017 filed with the Securities and Exchange Commission (the “Report”), Thomas J. Shara, President and Chief Executive Officer of the Company, and Thomas F. Splaine, 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 8, 2017

/s/ Thomas J. Shara

Thomas J. Shara,

President and Chief Executive Officer

(Principal Executive Officer)

/s/ Thomas F. Splaine

Thomas F. Splaine

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

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, 2017	Jul. 31, 2017
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2017
Document Fiscal Year Focus	2017
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		47,352,725

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
ASSETS
Cash	$ 169,109	$ 169,149
Interest-bearing deposits due from banks	16,573	6,652
Total cash and cash equivalents	185,682	175,801
Investment securities available for sale, at fair value	673,164	606,704
Investment securities held to maturity; fair value of $138,619 at June 30, 2017 and $146,990 at December 31, 2016	138,468	147,614
Federal Home Loan Bank and other membership bank stock, at cost	18,899	15,099
Loans, net of deferred costs (fees)	4,050,731	3,870,598
Less: allowance for loan and lease losses	32,823	31,245
Net loans	4,017,908	3,839,353
Loans held for sale	877	1,742
Premises and equipment, net	50,411	52,236
Accrued interest receivable	13,192	12,557
Goodwill	136,433	135,747
Other identifiable intangible assets	2,631	3,344
Bank owned life insurance	89,339	72,384
Other assets	35,183	30,550
TOTAL ASSETS	5,362,187	5,093,131
Deposits:
Noninterest-bearing	978,668	927,270
Savings and interest-bearing transaction accounts	2,682,291	2,620,657
Time deposits $250 thousand and under	408,228	404,680
Time deposits over $250 thousand	158,017	140,228
Total deposits	4,227,204	4,092,835
Federal funds purchased and securities sold under agreements to repurchase	118,487	56,354
Other borrowings	312,251	260,866
Subordinated debentures	104,842	104,784
Other liabilities	31,858	28,248
TOTAL LIABILITIES	4,794,642	4,543,087
STOCKHOLDERS' EQUITY
Common stock, no par value; authorized shares, 70,000,000; issued 47,352,725 shares at June 30, 2017 and 47,222,914 shares at December 31, 2016	511,967	510,861
Retained earnings	54,969	38,590
Accumulated other comprehensive income	609	593
TOTAL STOCKHOLDERS' EQUITY	567,545	550,044
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 5,362,187	$ 5,093,131

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Investment securities held to maturity; fair value	$ 138,619	$ 146,990
Common stock, par value
Common stock, shares authorized	70,000,000	70,000,000
Common stock, shares issued	47,352,725	47,222,914

XML

Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
INTEREST INCOME
Loans, leases and fees	$ 42,740	$ 35,800	$ 83,151	$ 69,921
Federal funds sold and interest-bearing deposits with banks	132	124	408	199
Taxable investment securities and other	3,818	2,696	7,417	5,658
Tax-exempt investment securities	522	417	1,032	830
TOTAL INTEREST INCOME	47,212	39,037	92,008	76,608
INTEREST EXPENSE
Deposits	3,784	2,404	7,118	4,609
Federal funds purchased and securities sold under agreements to repurchase	98	9	108	47
Other borrowings	1,909	1,522	4,038	3,000
TOTAL INTEREST EXPENSE	5,791	3,935	11,264	7,656
NET INTEREST INCOME	41,421	35,102	80,744	68,952
Provision for loan and lease losses	1,827	1,010	3,045	2,085
NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES	39,594	34,092	77,699	66,867
NONINTEREST INCOME
Service charges on deposit accounts	2,674	2,523	5,129	4,965
Commissions and fees	1,135	1,099	2,291	2,078
Gains (losses) on sales of investment securities	(15)		2,524	370
Gains on sales of loans	471	425	869	845
Income on bank owned life insurance	500	414	926	822
Other income	1,346	424	2,466	672
TOTAL NONINTEREST INCOME	6,111	4,885	14,205	9,752
NONINTEREST EXPENSE
Salaries and employee benefits	15,096	13,091	30,513	27,176
Net occupancy expense	2,507	2,341	5,343	5,029
Furniture and equipment	1,996	2,082	4,093	4,028
Stationery, supplies and postage	572	416	1,015	859
Marketing expense	508	385	909	694
FDIC insurance expense	425	681	743	1,271
Data processing expense	502	459	1,055	979
Telecommunications expense	372	386	776	810
ATM and debit card expense	517	383	958	729
Expenses on other real estate owned and other repossessed assets	4	26	41	65
Long-term debt prepayment fee			2,828
Merger related expenses		685		2,406
Core deposit intangible amortization	190	164	385	331
Other expenses	2,677	2,616	5,177	4,762
TOTAL NONINTEREST EXPENSE	25,366	23,715	53,836	49,139
Income before income tax expense	20,339	15,262	38,068	27,480
Income tax expense	6,969	5,132	12,386	9,242
NET INCOME	$ 13,370	$ 10,130	$ 25,682	$ 18,238
PER SHARE OF COMMON STOCK
Basic earnings	$ 0.28	$ 0.24	$ 0.54	$ 0.44
Diluted earnings	0.28	0.24	0.53	0.44
Dividends	$ 0.100	$ 0.095	$ 0.195	$ 0.180

XML

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Statement of Comprehensive Income [Abstract]
NET INCOME	$ 13,370	$ 10,130	$ 25,682	$ 18,238
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Unrealized gains on securities available for sale	1,029	1,697	1,763	5,854
Reclassification for securities losses (gains) included in net income	9		(1,640)	(233)
Unrealized losses on derivatives	(121)	(126)	(107)	(126)
Change in pension liability, net		6		44
Other comprehensive income	917	1,577	16	5,539
TOTAL COMPREHENSIVE INCOME	$ 14,287	$ 11,707	$ 25,698	$ 23,777

XML

Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Pascack Bancorp, Inc. [Member]	Common Stock [Member]	Common Stock [Member] Pascack Bancorp, Inc. [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [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
BALANCE at Mar. 31, 2016						5,112
NET INCOME	10,130
Other comprehensive income, net of tax	1,577					1,577
BALANCE at Jun. 30, 2016	454,934		424,409		23,836	6,689
BALANCE at Dec. 31, 2016	550,044		510,861		38,590	593
NET INCOME	25,682				25,682
Other comprehensive income, net of tax	16					16
Stock based compensation	1,566		1,566
Exercise of stock options	313		313
Retirement of restricted stock	(773)		(773)
Cash dividends, common stock	(9,303)				(9,303)
BALANCE at Jun. 30, 2017	567,545		511,967		54,969	609
BALANCE at Mar. 31, 2017						(308)
NET INCOME	13,370
Other comprehensive income, net of tax	917					917
BALANCE at Jun. 30, 2017	$ 567,545		$ 511,967		$ 54,969	$ 609

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Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME	$ 25,682	$ 18,238
Adjustments to reconcile net income to net cash provided by operating activities:
Net amortization of premiums, discounts and deferred loan fees and costs	2,413	1,794
Depreciation and amortization	2,080	1,847
Amortization of intangible assets	385	331
Provision for loan and lease losses	3,045	2,085
Loans originated for sale	(27,197)	(38,408)
Proceeds from sales of loans held for sale	28,931	34,023
Gains on sales of securities	(2,524)	(370)
Gains on sales of loans held for sale	(869)	(845)
Gains on other real estate and other repossessed assets	(500)	(90)
(Gains) losses on sales of premises and equipment	(672)	117
Long-term debt prepayment penalty	2,828
Stock-based compensation	1,566	1,107
Excess tax benefits	582
Increase in other assets	(4,672)	(9,176)
Increase in other liabilities	1,988	483
NET CASH PROVIDED BY OPERATING ACTIVITIES	33,066	11,136
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash acquired in acquisitions		40,942
Proceeds from repayments and maturities of available for sale securities	43,726	40,083
Proceeds from repayments and maturities of held to maturity securities	18,624	13,156
Proceeds from sales of available for sale securities	4,484	15,654
Purchase of available for sale securities	(113,724)	(61,705)
Purchase of held to maturity securities	(9,754)	(22,778)
Purchase of bank owned life insurance	(16,000)
Proceeds from redemptions of Federal Home Loan Bank stock	3,477	1,757
Purchases of Federal Home Loan Bank stock	(7,278)	(504)
Net increase in loans and leases	(186,328)	(170,698)
Proceeds from sales of other real estate and repossessed assets	3,583	758
Proceeds from dispositions and sales of premises and equipment	1,262	11
Purchases of premises and equipment	(1,324)	(1,648)
NET CASH USED IN INVESTING ACTIVITIES	(259,252)	(144,972)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits	134,719	237,564
Increase (decrease) in federal funds purchased and securities sold under agreements to repurchase	62,133	(27,572)
Proceeds from other borrowings	164,036	4,921
Repayments of other borrowings	(115,058)	(39,000)
Exercise of stock options	313
Retirement of restricted stock	(773)	(206)
Dividends paid	(9,303)	(7,481)
NET CASH PROVIDED BY FINANCING ACTIVITIES	236,067	168,226
Net increase in cash and cash equivalents	9,881	34,390
Cash and cash equivalents, beginning of period	175,801	118,493
CASH AND CASH EQUIVALENTS, END OF PERIOD	185,682	152,883
Supplemental schedule of non-cash investing and financing activities:
Cash paid during the period for income taxes	11,703	10,682
Cash paid during the period for interest	11,310	7,501
Transfer of loans and leases into other repossessed assets and other real estate owned	$ 3,425	1,280
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

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Significant Accounting Policies

6 Months Ended

Jun. 30, 2017

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 six months ended June 30, 2017 do not necessarily indicate the results that the Company will achieve for all of 2017.

Certain information and footnote disclosures required under U.S. GAAP have been condensed or omitted, as permitted by rules and regulations of the Securities and Exchange Commission. These unaudited interim financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes that are presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

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Acquisitions

6 Months Ended

Jun. 30, 2017

Business Combinations [Abstract]

Acquisitions

NOTE 2 – ACQUISITIONS

Harmony Bank

On July 1, 2016, the Company completed its acquisition of Harmony Bank (“Harmony”), a bank with three branches 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 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.

During the second quarter of 2017, the Company revised the estimate of the fair value of the acquired assets as of the acquisition date. This adjustment related to the fair market value of certain loans and the valuation of core deposit intangible which resulted in an increase of $685,000 to goodwill.

The acquisition was accounted for under the acquisition method of accounting. Accordingly, 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 Harmony, net of cash consideration paid.

	On July 1, 2016
	(in thousands)
Cash and cash equivalents	$	27,809
Securities available for sale		7,474
Securities held to maturity		6,885
Federal Home Loan Bank stock		780
Loans		259,985
Premises and equipment		3,125
Goodwill		11,147
Identifiable intangible assets		1,088
Accrued interest receivable and other assets		8,146
Total assets acquired		326,439
Deposits		(278,060	)
Other borrowings		(9,314	)
Other liabilities		(2,411	)
Total liabilities assumed		(289,785	)
Net assets acquired	$	36,654

Loans acquired in the Harmony acquisition were recorded at fair value, and there was no carryover related allowance for loan and lease losses. The fair values of loans acquired from Harmony 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 accounted for in accordance with ASC 310-30 that were acquired in the Harmony acquisition as of the closing date.

	Acquired Credit Impaired Loans
	(in thousands)
Contractually required principal and interest at acquisition	$	1,264
Contractual cash flows not expected to be collected (non-accretable difference)		398
Expected cash flows at acquisition		866
Interest component of expected cash flows (accretable difference)		97
Fair value of acquired loans	$	769

The core deposit intangible totaled $691,000 and is being amortized 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.

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 which operated 8 branches in Bergen and Essex Counties in New Jersey. This acquisition enabled 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 3,314,284 shares of its common stock in the merger and paid approximately $4.5 million in cash including 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.

The acquisition was accounted for under the acquisition method of accounting. Accordingly, 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 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 January 7, 2016
	(in thousands)
Cash and cash equivalents	$	40,942
Securities held to maturity		3,925
Federal Home Loan Bank stock		2,962
Loans		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 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 accounted for in accordance with ASC 310-30 that were acquired in the Pascack acquisition as of the closing date.

	Acquired Credit Impaired Loans
	(in thousands)
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

The core deposit intangible totaled $1.5 million and is being amortized 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.

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Earnings Per Share

6 Months Ended

Jun. 30, 2017

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,
	2017		2016		2017		2016
	(in thousands, except per share data)				(in thousands, except per share data)
Net income available to common shareholders	$	13,370	$	10,130	$	25,682	$	18,238
Less: earnings allocated to participating securities		119		106		239		162
Net income allocated to common shareholders	$	13,251	$	10,024	$	25,443	$	18,076
Weighted average number of common shares outstanding - basic		47,465		41,238		47,410		41,084
Share-based plans		209		168		236		161
Weighted average number of common shares outstanding - diluted		47,674		41,406		47,646		41,245
Basic earnings per share	$	0.28	$	0.24	$	0.54	$	0.44
Diluted earnings per share	$	0.28	$	0.24	$	0.53	$	0.44

There were no antidilutive options to purchase common stock excluded from the computation for the three and six months ended June 30, 2017 and 2016.

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Investment Securities

6 Months Ended

Jun. 30, 2017

Investments, Debt and Equity Securities [Abstract]

Investment Securities

NOTE 4 – INVESTMENT SECURITIES

	June 30, 2017									December 31, 2016
			Gross		Gross							Gross		Gross
	Amortized		Unrealized		Unrealized			Fair		Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value		Cost		Gains		Losses			Value
	(in thousands)									(in thousands)
AVAILABLE FOR SALE
U.S. Treasury and U.S. government agencies	$	143,077	$	244	$	(877	)	$	142,444	$	118,537	$	102	$	(1,280	)	$	117,359
Mortgage-backed securities, residential		445,829		1,255		(3,541	)		443,543		406,851		1,174		(4,487	)		403,538
Mortgage-backed securities, multifamily		10,162		60		(23	)		10,199		10,192		30		(35	)		10,187
Obligations of states and political subdivisions		53,798		768		(292	)		54,274		48,868		391		(933	)		48,326
Debt securities		5,000		95		—			5,095		5,350		63		(1	)		5,412
Equity securities		15,385		2,620		(396	)		17,609		17,314		5,000		(432	)		21,882
	$	673,251	$	5,042	$	(5,129	)	$	673,164	$	607,112	$	6,760	$	(7,168	)	$	606,704
	June 30, 2017									December 31, 2016
			Gross		Gross							Gross		Gross
	Amortized		Unrealized		Unrealized			Fair		Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value		Cost		Gains		Losses			Value
	(in thousands)									(in thousands)
HELD TO MATURITY
U.S. government agencies	$	33,484	$	193	$	(283	)	$	33,394	$	33,553	$	144	$	(430	)	$	33,267
Mortgage-backed securities, residential		38,262		298		(524	)		38,036		38,706		369		(598	)		38,477
Mortgage-backed securities, multifamily		2,008		—		(17	)		1,991		2,059		—		(44	)		2,015
Obligations of states and political subdivisions		62,706		585		(135	)		63,156		71,284		269		(385	)		71,168
Debt securities		2,008		34		—			2,042		2,012		51		—			2,063
	$	138,468	$	1,110	$	(959	)	$	138,619	$	147,614	$	833	$	(1,457	)	$	146,990

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):

	Available for Sale				Held to Maturity
June 30, 2017	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	2,605	$	2,623	$	29,499	$	29,503
Due after one year through five years		107,942		108,341		35,641		35,904
Due after five years through ten years		66,678		66,174		28,621		28,721
Due after ten years		24,650		24,675		4,437		4,464
		201,875		201,813		98,198		98,592
Mortgage-backed securities		455,991		453,742		40,270		40,027
Equity securities		15,385		17,609		—		—
Total securities	$	673,251	$	673,164	$	138,468	$	138,619

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 June 30,					For the Six Months Ended June 30,
	2017			2016		2017		2016
Sale proceeds	$	—		$	—	$	4,499	$	15,654
Gross gains (losses)		(15	)		—		2,524		370

There were no other-than-temporary impairments during the six months ended June 30, 2017 or 2016.

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 $502.5 million and $443.4 million at June 30, 2017 and December 31, 2016, 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 for the periods presented:

	Less Than 12 Months				12 Months or Longer				Total
			Unrealized				Unrealized		Number of				Unrealized
June 30, 2017	Fair Value		Losses		Fair Value		Losses		Securities		Fair Value		Losses
	(dollars in thousands)
AVAILABLE FOR SALE
U.S. government agencies	$	67,712	$	653	$	4,786	$	224		15	$	72,498	$	877
Mortgage-backed securities, residential		270,813		3,099		17,938		442		85		288,751		3,541
Mortgage-backed securities, multifamily		5,159		23		—		—		1		5,159		23
Obligations of states and political subdivisions		17,616		275		877		17		32		18,493		292
Equity securities		—		—		9,602		396		2		9,602		396
	$	361,300	$	4,050	$	33,203	$	1,079		135	$	394,503	$	5,129
HELD TO MATURITY
U.S. government agencies	$	12,215	$	283	$	—	$	—		2	$	12,215	$	283
Mortgage-backed securities, residential		26,661		411		2,191		113		17		28,852		524
Mortgage-backed securities, multifamily		846		13		1,047		4		2		1,893		17
Obligations of states and political subdivisions		29,283		135		—		—		17		29,283		135
	$	69,005	$	842	$	3,238	$	117		38	$	72,243	$	959
	Less Than 12 Months				12 Months or Longer				Total
			Unrealized				Unrealized		Number of				Unrealized
December 31, 2016	Fair Value		Losses		Fair Value		Losses		Securities		Fair Value		Losses
	(dollars in thousands)
AVAILABLE FOR SALE
U.S. Treasury and U.S. government agencies	$	94,153	$	1,280	$	—	$	—		18	$	94,153	$	1,280
Mortgage-backed securities, residential		292,873		4,078		15,453		409		91		308,326		4,487
Mortgage-backed securities, multifamily		5,178		35		—		—		1		5,178		35
Obligations of states and political subdivisions		29,904		933		—		—		54		29,904		933
Other debt securities		350		1		—		—		1		350		1
Equity securities		6,030		94		4,720		338		2		10,750		432
	$	428,488	$	6,421	$	20,173	$	747		167	$	448,661	$	7,168
HELD TO MATURITY
U.S. government agencies	$	17,147	$	430	$	—	$	—		3	$	17,147	$	430
Mortgage-backed securities, residential		27,909		535		1,061		63		15		28,970		598
Mortgage-backed securities, multifamily		2,015		44		—		—		2		2,015		44
Obligations of states and political subdivisions		50,302		384		401		1		43		50,703		385
	$	97,373	$	1,393	$	1,462	$	64		63	$	98,835	$	1,457

Management has evaluated the securities in the above table and has concluded that none of the securities are other-than-temporarily impaired. 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, 2017, the equity securities include investments in other financial institutions for market appreciation purposes. These equities had a purchase price of $2.1 million and a market value of $4.7 million as of June 30, 2017.

As of June 30, 2017, the equity securities also included $12.9 million in investment funds that do not have a quoted market price, but use net asset value per share or its equivalent to measure fair value.

The investment funds include $9.6 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, 2017, the amortized cost of these securities was $10.0 million and the fair value was $9.6 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 these investments.

The investment funds also include $3.3 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, 2017, the net amortized cost equaled the market value of the investment. There are no unfunded commitments related to these investments.

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Loans, Leases and Other Real Estate

6 Months Ended

Jun. 30, 2017

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:

	June 30, 2017			December 31, 2016
	(in thousands)
Commercial, secured by real estate	$	2,725,418		$	2,556,601
Commercial, industrial and other		352,977			350,228
Leases		70,295			67,016
Real estate - residential mortgage		337,765			349,581
Real estate - construction		230,178			211,109
Home equity and consumer		337,643			339,360
Total loans and leases		4,054,276			3,873,895
Less: deferred fees		(3,545	)		(3,297	)
Loans and leases, net of deferred fees	$	4,050,731		$	3,870,598

At June 30, 2017 and December 31, 2016, home equity and consumer loans included overdraft deposit balances of $763,000 and $364,000, respectively. At June 30, 2017 and December 31, 2016, the Company had $1.1 billion and $942.0 million, respectively, in loans pledged for actual and potential borrowings at the Federal Home Loan Bank of New York(“FHLB”).

Purchased Credit Impaired Loans

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 $214,000 at June 30, 2017, which was $603,000 less than the balance at the time of acquisition on January 7, 2016. In first quarter 2017, one of the Pascack purchased credit impaired (“PCI”) loans totaling $127,000 experienced further credit deterioration and was fully charged off. In the second quarter of 2017, a loan with a net value of $218,000 was fully paid off. The carrying value of loans acquired in the Harmony acquisition was $528,000 at June 30, 2017 which was $241,000 less than the balance at acquisition date on July 1, 2016. In the second quarter of 2017, a loan with a net value of $247,000 was fully paid off.

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

	For the Three Months Ended						For the Six Months Ended
	June 30, 2017			June 30, 2016			June 30, 2017			June 30, 2016
	(in thousands)						(in thousands)
Balance, beginning of period	$	180		$	69		$	145		$	—
Acquisitions		—			—			—			85
Accretion		(47	)		(15	)		(98	)		(31	)
Net reclassification non-accretable difference		—			11			86			11
Balance, end of period	$	133		$	65		$	133		$	65

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:

	June 30, 2017		December 31, 2016
	(in thousands)
Commercial, secured by real estate	$	8,768	$	10,413
Commercial, industrial and other		378		167
Leases, including leases held for sale		81		153
Real estate - residential mortgage		3,857		6,048
Real estate - construction		1,472		1,472
Home equity and consumer		1,689		2,151
Total non-accrual loans and leases	$	16,245	$	20,404
Other real estate and other repossessed assets		1,415		1,072
TOTAL NON-PERFORMING ASSETS	$	17,660	$	21,476
Troubled debt restructurings, still accruing	$	11,697	$	8,802

Non-accrual loans included $2.1 million and $2.4 million of troubled debt restructurings at June 30, 2017 and December 31, 2016, respectively. At June 30, 2017 and December 31, 2016, the Company had $3.1 million and $3.7 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, 2017 and December 31, 2016, 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, 2017
Commercial, secured by real estate	$	3,258	$	600	$	8,388	$	12,246	$	2,713,172	$	2,725,418	$	—
Commercial, industrial and other		491		—		301		792		352,185		352,977		—
Leases		303		113		81		497		69,798		70,295		—
Real estate - residential mortgage		985		636		3,295		4,916		332,849		337,765		—
Real estate - construction		—		—		1,472		1,472		228,706		230,178		—
Home equity and consumer		1,148		148		1,292		2,588		335,055		337,643		20
	$	6,185	$	1,497	$	14,829	$	22,511	$	4,031,765	$	4,054,276	$	20
December 31, 2016
Commercial, secured by real estate	$	6,082	$	1,234	$	9,313	$	16,629	$	2,539,972	$	2,556,601	$	—
Commercial, industrial and other		1,193		213		42		1,448		348,780		350,228		—
Leases		132		78		153		363		66,653		67,016		—
Real estate - residential mortgage		2,990		1,057		5,330		9,377		340,204		349,581		—
Real estate - construction		3,409		—		1,472		4,881		206,228		211,109		—
Home equity and consumer		1,260		129		2,049		3,438		335,922		339,360		10
	$	15,066	$	2,711	$	18,359	$	36,136	$	3,837,759	$	3,873,895	$	10

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 include all loans that have been modified in troubled debt restructurings. Impaired loans as of June 30, 2017 and December 31, 2016 are as follows:

			Contractual
	Recorded		Unpaid				Average		Interest
	Investment in		Principal		Specific		Investment in		Income
June 30, 2017	Impaired Loans		Balance		Allowance		Impaired Loans		Recognized
	(in thousands)
Loans without specific allowance:
Commercial, secured by real estate	$	14,806	$	15,180	$	—	$	13,909	$	148
Commercial, industrial and other		568		568		—		568		11
Real estate - residential mortgage		970		987		—		903		8
Real estate - construction		1,472		1,472		—		1,472		—
Home equity and consumer		—		—		—		—		—
Loans with specific allowance:
Commercial, secured by real estate		5,022		5,342		276		4,913		117
Commercial, industrial and other		431		431		14		402		9
Real estate - residential mortgage		1,005		1,134		34		1,015		15
Real estate - construction		—		—		—		—		—
Home equity and consumer		1,148		1,175		99		1,150		28
Total:
Commercial, secured by real estate	$	19,828	$	20,522	$	276	$	18,822	$	265
Commercial, industrial and other		999		999		14		970		20
Real estate - residential mortgage		1,975		2,121		34		1,918		23
Real estate - construction		1,472		1,472		—		1,472		—
Home equity and consumer		1,148		1,175		99		1,150		28
	$	25,422	$	26,289	$	423	$	24,332	$	336

			Contractual
	Recorded		Unpaid				Average		Interest
	Investment in		Principal		Specific		Investment in		Income
December 31, 2016	Impaired Loans		Balance		Allowance		Impaired Loans		Recognized
	(in thousands)
Loans without specific allowance:
Commercial, secured by real estate	$	12,764	$	13,195	$	—	$	13,631	$	229
Commercial, industrial and other		603		603		—		1,109		24
Leases		—		—		—		—		—
Real estate - residential mortgage		1,880		3,146		—		2,430		16
Real estate - construction		1,471		1,471		—		12		—
Home equity and consumer		139		139		—		388		—
Loans with specific allowance:
Commercial, secured by real estate		5,860		6,142		392		6,549		273
Commercial, industrial and other		349		349		12		360		17
Leases		—		—		—		1		—
Real estate - residential mortgage		1,031		1,100		31		1,011		30
Real estate - construction		—		—		—		—		—
Home equity and consumer		1,188		1,211		94		1,184		59
Total:
Commercial, secured by real estate	$	18,624	$	19,337	$	392	$	20,180	$	502
Commercial, industrial and other		952		952		12		1,469		41
Leases		—		—		—		1		—
Real estate - residential mortgage		2,911		4,246		31		3,441		46
Real estate - construction		1,471		1,471		—		12		—
Home equity and consumer		1,327		1,350		94		1,572		59
	$	25,285	$	27,356	$	529	$	26,675	$	648

Interest income recognized on impaired loans was $336,000 for each of the six months ended June 30, 2017 and 2016, respectively. Interest that would have been accrued on impaired loans during the first six months of 2017 and 2016 had the loans been performing under original terms would have been $813,000 and $828,000, 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 commercial loan portfolios. The risk rating system assists senior management in evaluating Lakeland’s commercial loan portfolio, analyzing trends, and determining the proper level of required reserves to be recommended to the Board. In assigning risk ratings, management considers, among other things, a borrower’s debt service coverage, earnings strength, loan to value ratios, 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, 2017 and December 31, 2016, by the risk ratings discussed above (in thousands):

June 30, 2017	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Real Estate - Construction
RISK RATING
1	$	—	$	448	$	—
2		—		29,901		—
3		84,407		35,124		—
4		821,819		129,845		8,800
5		1,700,154		131,751		218,054
5W - Watch		58,427		11,047		698
6 - Other assets especially mentioned		31,163		9,474		—
7 - Substandard		29,448		5,387		2,626
8 - Doubtful		—		—		—
9 - Loss		—		—		—
Total	$	2,725,418	$	352,977	$	230,178
December 31, 2016	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Real Estate - Construction
RISK RATING
1	$	—	$	1,449	$	—
2		—		26,743		—
3		82,102		36,644		—
4		729,281		135,702		28,177
5		1,615,331		129,366		175,595
5W - Watch		68,372		6,395		1,223
6 - Other assets especially mentioned		33,015		5,242		—
7 - Substandard		28,500		8,687		6,114
8 - Doubtful		—		—		—
9 - Loss		—		—		—
Total	$	2,556,601	$	350,228	$	211,109

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

Allowance for Loan and Lease Losses

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, 2017 and 2016:

Three Months Ended June 30, 2017	Commercial, Secured by Real Estate			Commercial, Industrial and Other			Leases			Real Estate- Residential Mortgage			Real Estate- Construction			Home Equity and Consumer			Total
										(in thousands)
Beginning Balance	$	22,083		$	1,792		$	502		$	1,825		$	2,378		$	3,010		$	31,590
Charge-offs		(83	)		(71	)		(120	)		(169	)		—			(427	)		(870	)
Recoveries		145			27			28			—			5			71			276
Provision		1,199			(60	)		119			98			213			258			1,827
Ending Balance	$	23,344		$	1,688		$	529		$	1,754		$	2,596		$	2,912		$	32,823
Three Months Ended June 30, 2016	Commercial, Secured by Real Estate			Commercial, Industrial and Other			Leases			Real Estate- Residential Mortgage			Real Estate- Construction			Home Equity and 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
Six Months Ended June 30, 2017	Commercial, Secured by Real Estate			Commercial, Industrial and Other			Leases			Real Estate- Residential Mortgage			Real Estate- Construction			Home Equity and Consumer			Total
										(in thousands)
Beginning Balance	$	21,223		$	1,723		$	548		$	1,964		$	2,352		$	3,435		$	31,245
Charge-offs		(303	)		(234	)		(163	)		(310	)		(609	)		(611	)		(2,230	)
Recoveries		364			122			32			—			20			225			763
Provision		2,060			77			112			100			833			(137	)		3,045
Ending Balance	$	23,344		$	1,688		$	529		$	1,754		$	2,596		$	2,912		$	32,823
Six Months Ended June 30, 2016	Commercial, Secured by Real Estate			Commercial, Industrial and Other			Leases			Real Estate- Residential Mortgage			Real Estate- Construction			Home Equity and 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

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, 2017	Real Estate		and Other		Leases		Mortgage		Construction		Consumer		Total
	(in thousands)
Ending Balance: Individually evaluated for impairment	$	19,828	$	999	$	—	$	1,975	$	1,472	$	1,148	$	25,422
Ending Balance: Collectively evaluated for impairment		2,704,863		351,971		70,295		335,790		228,706		336,487		4,028,112
Ending Balance: Loans acquired with deteriorated credit quality		727		7		—		—		—		8		742
Ending Balance (1)	$	2,725,418	$	352,977	$	70,295	$	337,765	$	230,178	$	337,643	$	4,054,276
	Commercial,		Commercial,				Real Estate-				Home
	Secured by		Industrial				Residential		Real Estate-		Equity and
December 31, 2016	Real Estate		and Other		Leases		Mortgage		Construction		Consumer		Total
	(in thousands)
Ending Balance: Individually evaluated for impairment	$	18,624	$	952	$	—	$	2,911	$	1,471	$	1,327	$	25,285
Ending Balance: Collectively evaluated for impairment		2,536,858		349,001		67,016		346,670		209,638		338,019		3,847,202
Ending balance: Loans acquired with deteriorated credit quality		1,119		275		—		—		—		14		1,408
Ending Balance (1)	$	2,556,601	$	350,228	$	67,016	$	349,581	$	211,109	$	339,360	$	3,873,895

(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, 2017	Real Estate		and Other		Leases		Mortgage		Construction		Consumer		Total
	(in thousands)
Ending Balance: Individually evaluated for impairment	$	276	$	14	$	—	$	34	$	—	$	99	$	423
Ending Balance: Collectively evaluated for impairment		23,068		1,674		529		1,720		2,596		2,813		32,400
Ending Balance	$	23,344	$	1,688	$	529	$	1,754	$	2,596	$	2,912	$	32,823
	Commercial,		Commercial,				Real Estate-				Home
	Secured by		Industrial				Residential		Real Estate-		Equity and
December 31, 2016	Real Estate		and Other		Leases		Mortgage		Construction		Consumer		Total
	(in thousands)
Ending Balance: Individually evaluated for impairment	$	392	$	12	$	—	$	31	$	—	$	94	$	529
Ending Balance: Collectively evaluated for impairment		20,831		1,711		548		1,933		2,352		3,341		30,716
Ending Balance	$	21,223	$	1,723	$	548	$	1,964	$	2,352	$	3,435	$	31,245

Lakeland also maintains a reserve for unfunded lending commitments which is included in other liabilities. This reserve was $2.5 million for each of the periods ended June 30, 2017 and December 31, 2016. The Company analyzes the adequacy of the reserve for unfunded lending commitments quarterly.

Troubled Debt Restructurings

Loans are classified as troubled debt restructured loans in cases where borrowers experience financial difficulties and Lakeland makes certain concessionary modifications to contractual terms. Restructured loans typically involve a modification of terms such as a reduction of the stated interest rate, a moratorium of principal payments and/or an extension of the maturity date at a stated interest rate lower than the current market rate of a new loan with similar risk. The Company considers the potential losses on these loans as well as the remainder of its impaired loans while considering the adequacy of the allowance for loan and lease losses.

The following table summarizes loans that have been restructured during the three and six months ended June 30, 2017 and 2016:

	For the Three Months Ended						For the Three Months Ended
	June 30, 2017						June 30, 2016
			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)
Commercial, secured by real estate		2	$	159	$	159		—	$	—	$	—
Commercial, industrial and other		2		124		124		—		—		—
		4	$	283	$	283		—	$	—	$	—
	For the Six Months Ended						For the Six Months Ended
	June 30, 2017						June 30, 2016
			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)
Commercial, secured by real estate		4	$	3,038	$	3,038	$	—	$	—	$	—
Commercial, industrial and other		2		124		124		—		—		—
Home equity and consumer		—		—		—		3		285		285
		6	$	3,162	$	3,162	$	3	$	285	$	285

The following table summarizes as of June 30, 2017 and 2016, loans that were restructured within the previous twelve months that have subsequently defaulted:

	June 30, 2017				June 30, 2016
	Number of		Recorded		Number of		Recorded
	Contracts		Investment		Contracts		Investment
	(dollars in thousands)
Real estate - residential mortgage		1	$	254		—	$	—
Home equity and consumer		—		—		1		162
		1	$	254		1	$	162

Other Real Estate and Other Repossessed Assets

At June 30, 2017, the Company had other real estate owned and other repossessed assets of $1.4 million and $28,000, respectively. At December 31, 2016, the Company had other real estate owned and other repossessed assets of $1.1 million and $9,000, respectively. Included in other real estate owned was residential property acquired as a result of foreclosure proceedings totaling $1.1 million that the Company held at each of the periods ended June 30, 2017 and December 31, 2016.

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Derivatives

6 Months Ended

Jun. 30, 2017

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. Lakeland had $7.5 million in available for sale securities pledged for collateral on its interest rate swaps with the financial institution at each of June 30, 2017 and December 31, 2016.

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 are to add stability to interest expense and to manage its exposure to interest rate movements. The Company used interest rate swaps designated as cash flow hedges which involved the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. In these particular hedges the Company is paying a third party an average of 1.10% in exchange for a payment at 3 month LIBOR. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive income and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the six months ended June 30, 2017, the Company did not record any hedge ineffectiveness. The Company recognized $4,000 of accumulated other comprehensive income that was reclassified into interest expense for the first six months of 2017.

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 $60,000 will be reclassified as a decrease to interest expense should the rate environment remain the same.

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

June 30, 2017	Notional Amount			Average Maturity (Years)		Weighted Average Fixed Rate			Weighted Average Variable Rate		Fair Value
Classified in Other Assets:
3rd Party interest rate swaps	$	87,852			9.4		3.78	%		1 Mo. LIBOR + 2.12	$	2,989
Customer interest rate swaps		98,651			11.3		4.64	%		1 Mo. LIBOR + 2.19		2,522
Interest rate swap (cash flow hedge)		30,000			4.0		1.10	%		3 Mo. LIBOR		868
Classified in Other Liabilities:
Customer interest rate swaps	$	87,852			9.4		3.78	%		1 Mo. LIBOR + 2.12	$	(2,989	)
3rd Party interest rate swaps		98,651			11.3		4.64	%		1 Mo. LIBOR + 2.19		(2,522	)
December 31, 2016	Notional Amount			Average Maturity (Years)		Weighted Average Fixed Rate			Weighted Average Variable Rate		Fair Value
Customer interest rate swaps	$	129,252			10.9		4.03	%		1 Mo. LIBOR + 2.10	$	(2,345	)
3rd party interest rate swaps		(129,252	)		10.9		4.03	%		1 Mo. LIBOR + 2.10		2,345
Interest rate swap (cash flow hedge)		30,000			4.5		1.10	%		3 Mo. LIBOR		1,033

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Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

NOTE 7 – GOODWILL AND INTANGIBLE ASSETS

The Company had goodwill of $136.4 million and $135.7 million for the periods ended June 30, 2017 and December 31, 2016, respectively. The Company reviews its goodwill and intangible assets annually, on November 30, or more frequently if conditions warrant, for impairment. In testing goodwill for impairment, the Company compares the estimated fair value of its reporting unit to its carrying amount, including goodwill. The Company has determined that it has one reporting unit, Community Banking.

The Company had core deposit intangible of $2.6 million and $3.3 million for the periods ended June 30, 2017 and December 31, 2016, respectively. The estimated future amortization expense for the remainder of 2017 and for each of the succeeding five years ended December 31 is as follows (dollars in thousands):

For the Year Ended
2017	$	268
2018		594
2019		504
2020		415
2021		326
2022		236

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Borrowings

6 Months Ended

Jun. 30, 2017

Debt Disclosure [Abstract]

Borrowings

NOTE 8 – BORROWINGS

Repurchase Agreements

At June 30, 2017, the Company had federal funds purchased and securities sold under agreements to repurchase of $91.6 million and $26.9 million respectively. The securities sold under agreements to repurchase are overnight sweep arrangement accounts with our customers. The Company also had $20.0 million in long-term securities sold under agreements to repurchase included in other borrowings which mature within 1 year. As of June 30, 2017, the Company had $54.9 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.

Prepayment of Borrowings

In the first quarter of 2017, the Company repaid an aggregate of $20.0 million in long-term securities sold under agreements to repurchase and recorded $2.2 million in long-term debt prepayment fees. The Company also repaid an aggregate of $34.0 million in borrowings from the Federal Home Loan Bank of New York and recorded $638,000 in long-term debt prepayment fees.

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Share-Based Compensation

6 Months Ended

Jun. 30, 2017

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 $1.6 million and $1.1 million was recognized for the six months ended June 30, 2017 and 2016, respectively. As of June 30, 2017, there was unrecognized compensation cost of $149,000 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 $2.21 million as of June 30, 2017, and that cost is expected to be recognized over a period of 1.53 years. There was no unrecognized compensation expense related to unvested stock options as of June 30, 2017.

In the first six months of 2017, the Company granted 13,176 shares of restricted stock to non-employee directors at a grant date fair value of $18.20 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. 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 vested one year from the date it was granted. Compensation expense on this restricted stock was $240,000 over a one year period.

The following is a summary of the Company’s restricted stock activity during the six months ended June 30, 2017:

				Weighted
	Number of			Average
	Shares			Price
Outstanding, January 1, 2017		42,875		$	9.72
Granted		13,176			18.20
Vested		(32,901	)		9.79
Forfeited		(48	)		9.39
Outstanding, June 30, 2017		23,102		$	14.46

In the first six months of 2017, the Company granted 117,673 RSUs to certain officers at a weighted average grant date fair value of $19.96 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 2017 is expected to average approximately $783,000 per year over a three year period. In the first six months of 2016, the Company granted 150,226 RSUs at a weighted average grant date fair value of $10.06 per share under the Company’s 2009 Equity Compensation Program. Compensation expense on these restricted stock units is expected to average approximately $504,000 per year over a three year period.

The following is a summary of the Company’s RSU activity during the six months ended June 30, 2017:

				Weighted
	Number of			Average
	Shares			Price
Outstanding, January 1, 2017		302,344		$	10.76
Granted		117,673			19.96
Vested		(148,584	)		13.01
Forfeited		(8,995	)		12.58
Outstanding, June 30, 2017		262,438		$	13.55

There were no grants of stock options in the first six months of 2017 or 2016. Option activity under the Company’s stock option plans is as follows:

						Weighted
						Average
				Weighted		Remaining
				Average		Contractual		Aggregate
	Number of			Exercise		Term		Intrinsic
	Shares			Price		(in years)		Value
Outstanding, January 1, 2017		135,250		$	8.79		4.18	$	1,450,533
Granted		—			—
Exercised		(31,769	)		9.84
Forfeited		—			—
Expired		—			—
Outstanding, June 30, 2017		103,481		$	8.47		4.78	$	1,076,479
Options exercisable at June 30, 2017		103,481		$	8.47		4.78	$	1,076,479

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 period and the exercise price, multiplied by the number of in-the-money options).

There were 31,769 stock options exercised during the first six months of 2017. The aggregate intrinsic value of stock options exercised during the six months ended June 30, 2017 was $318,000. Exercise of stock options during the first six months of 2017 resulted in cash receipts of $313,000.

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Comprehensive Income

6 Months Ended

Jun. 30, 2017

Equity [Abstract]

Comprehensive Income

NOTE 10 – COMPREHENSIVE INCOME

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

	June 30, 2017									June 30, 2016
	Before			Tax Benefit			Net of			Before			Tax Benefit			Net of
For the quarter ended:	Tax Amount			(Expense)			Tax Amount			Tax Amount			(Expense)			Tax Amount
	(in thousands)									(in thousands)
Net unrealized gains (losses) on available for sale securities
Net unrealized holding gains arising during period	$	1,661		$	(632	)	$	1,029		$	2,684		$	(987	)	$	1,697
Reclassification adjustment for net losses arising during the period		15			(6	)		9			—			—			—
Net unrealized gains		1,676			(638	)		1,038			2,684			(987	)		1,697
Unrealized losses on derivatives		(186	)		65			(121	)		(193	)		67			(126	)
Change in minimum pension liability		—			—			—			8			(2	)		6
Other comprehensive income, net	$	1,490		$	(573	)	$	917		$	2,499		$	(922	)	$	1,577
For the six months ended:	Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount			Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount
	(in thousands)									(in thousands)
Net unrealized gains on available for sale securities
Net unrealized holding gains arising during period	$	2,845		$	(1,082	)	$	1,763		$	9,247		$	(3,393	)	$	5,854
Reclassification adjustment for net gains arising during the period		(2,524	)		884			(1,640	)		(370	)		137			(233	)
Net unrealized gains		321			(198	)		123			8,877			(3,256	)		5,621
Unrealized losses on derivatives		(165	)		58			(107	)		(193	)		67			(126	)
Change in minimum pension liability		—			—			—			72			(28	)		44
Other comprehensive income, net	$	156		$	(140	)	$	16		$	8,756		$	(3,217	)	$	5,539

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

	For the Three Months Ended June 30, 2017											For the Three Months Ended June 30, 2016
	Unrealized											Unrealized Gains
	Gains (Losses) on			Unrealized								on		Unrealized
	Available for Sale			Losses								Available for Sale		Losses
	Securities			on Derivatives			Pension Items		Total			Securities		on Derivatives			Pension Items		Total
Beginning balance	$	(1,032	)	$	686		$	38	$	(308	)	$	5,078	$	—		$	34	$	5,112
Other comprehensive income before classifications		1,029			(121	)		—		908			1,697		(126	)		6		1,577
Amounts reclassified from accumulated other comprehensive income		9			—			—		9			—		—			—		—
Net current period other comprehensive income (loss)		1,038			(121	)		—		917			1,697		(126	)		6		1,577
Ending balance	$	6		$	565		$	38	$	609		$	6,775		(126	)	$	40	$	6,689

	For the Six Months Ended June 30, 2017											For the Six Months Ended June 30, 2016
	Unrealized											Unrealized
	Gains (Losses) on			Unrealized								Gains on			Unrealized
	Available for Sale			Losses								Available for Sale			Losses
	Securities			on Derivatives			Pension Items		Total			Securities			on Derivatives			Pension Items			Total
Beginning balance	$	(117	)	$	672		$	38	$	593		$	1,154		$	—		$	(4	)	$	1,150
Other comprehensive income before classifications		1,763			(107	)		—		1,656			5,854			(126	)		44			5,772
Amounts reclassified from accumulated other comprehensive income		(1,640	)		—			—		(1,640	)		(233	)		—			—			(233	)
Net current period other comprehensive income		123			(107	)		—		16			5,621			(126	)		44			5,539
Ending balance	$	6		$	565		$	38	$	609		$	6,775			(126	)	$	40		$	6,689

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Estimated Fair Value of Financial Instruments and Fair Value Measurement

6 Months Ended

Jun. 30, 2017

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, 2017, 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:

	Quoted Prices in		Significant
	Active Markets		Other		Significant
	for Identical		Observable		Unobservable
	Assets		Inputs		Inputs		Total
	(Level 1)		(Level 2)		(Level 3)		Fair Value
	(in thousands)
June 30, 2017
Assets:
Investment securities, available for sale
U.S. Treasury and government agencies	$	5,696	$	136,748	$	—	$	142,444
Mortgage-backed securities		—		453,742		—		453,742
Obligations of states and political subdivisions		—		54,274		—		54,274
Other debt securities		—		5,095		—		5,095
Equity securities		4,722		12,887		—		17,609
Total securities available for sale		10,418		662,746		—		673,164
Derivative assets		—		6,379		—		6,379
Total Assets	$	10,418	$	669,125	$	—	$	679,543
Liabilities:
Derivative liabilities	$	—	$	5,511	$	—	$	5,511
Total Liabilities	$	—	$	5,511	$	—	$	5,511
December 31, 2016
Assets:
Investment securities, available for sale
U.S. Treasury and government agencies	$	5,931	$	111,428	$	—	$	117,359
Mortgage-backed securities		—		413,725		—		413,725
Obligations of states and political subdivisions		—		48,326		—		48,326
Other debt securities		—		5,412		—		5,412
Equity securities		7,748		14,134		—		21,882
Total securities available for sale		13,679		593,025		—		606,704
Derivative assets		—		3,378		—		3,378
Total Assets	$	13,679	$	596,403	$	—	$	610,082
Liabilities:
Derivative liabilities	$	—	$	2,345	$	—	$	2,345
Total Liabilities	$	—	$	2,345	$	—	$	2,345

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

	(Level 1)		(Level 2)		(Level 3)		Total Fair Value
			(in thousands)
June 30, 2017
Assets:
Impaired loans and leases	$	—	$	—	$	25,422	$	25,422
Loans held for sale		—		877		—		877
Other real estate owned and other repossessed assets		—		—		1,415		1,415
December 31, 2016
Assets:
Impaired loans and leases	$	—	$	—	$	25,285	$	25,285
Loans held for sale		—		1,742		—		1,742
Other real estate owned and other repossessed assets		—		—		1,072		1,072

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 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 5-10%) 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 re-measured 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, 2017 and December 31, 2016 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 $27.5 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. Management performs a credit analysis before investing in these securities.

FHLB stock is an equity interest that can be sold to the issuing FHLB, to other Federal Home Loan Banks, or to other member banks at its par value. Because ownership of these securities is restricted, they do not have a readily determinable fair value. As such, the Company’s FHLB stock is recorded at cost or par value and is evaluated for impairment each reporting period by considering the ultimate recoverability of the investment rather than temporary declines in value. The Company’s evaluation primarily includes an evaluation of liquidity, capitalization, operating performance, commitments, and regulatory or legislative events.

The net loan portfolio at June 30, 2017 and December 31, 2016 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, 2017 and December 31, 2016:

	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, 2017
Financial Assets:
Investment securities held to maturity	$	138,468	$	138,619	$	—	$	110,139	$	28,480
Federal Home Loan Bank and other membership bank stocks		18,899		18,899		—		18,899		—
Loans and leases, net		4,017,908		4,019,534		—		—		4,019,534
Financial Liabilities:
Certificates of deposit		566,245		564,084		—		564,084		—
Other borrowings		312,251		312,136		—		312,136		—
Subordinated debentures		104,842		95,588		—		—		95,588
December 31, 2016
Financial Assets:
Investment securities held to maturity	$	147,614	$	146,990	$	—	$	111,403	$	35,587
Federal Home Loan Bank and other membership bank stocks		15,099		15,099		—		15,099		—
Loans and leases, net		3,839,353		3,832,465		—		—		3,832,465
Financial Liabilities:
Certificates of deposit		544,908		543,399		—		543,399		—
Other borrowings		260,866		264,586		—		264,586		—
Subordinated debentures		104,784		94,476		—		—		94,476

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Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2017

Accounting Changes and Error Corrections [Abstract]

Recent Accounting Pronouncements

NOTE 12 – RECENT ACCOUNTING PRONOUNCMENTS

In May 2017, the Financial Accounting Standards Board (“FASB”) issued an update which provides clarity and reduces diversity in practice when accounting for the modification of terms and conditions for share-based payment awards. Previous accounting guidance did not distinguish between modifications which were substantive from modifications that were merely administrative. The accounting standards update requires entities to account for the effects of a modification unless the following three conditions are met: the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified; the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. This update will be effective for annual and interim periods 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 March 2017, the FASB issued an update which shortens the amortization period for certain callable debt securities held at a premium to the earliest call date. Under current GAAP, entities amortize the premium as an adjustment of yield over the contractual life of the instrument even if the holder is certain that the call will be exercised. As a result, upon the exercise of a call on a callable debt security held at a premium, the unamortized premium is recorded as a loss in earnings. The update shortens the amortization period for certain callable debt securities held at a premium and requires the premium be amortized to the earliest call date. This update will be effective for annual and interim periods beginning after December 15, 2018. Entities are required to apply the amendments on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The adoption of this update is not expected to have a material impact on the Company’s financial statements.

In March 2017, the FASB issued an update which improves the presentation of net periodic pension cost and net periodic postretirement benefit cost in a company’s income statement. The amendment requires that an employer report the service cost component in the same line items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. The amendment is effective for annual and interim periods 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 January 2017, the FASB issued an update to simplify the test for goodwill impairment. This amendment eliminates Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. This update will be effective for the Company’s financial statements for fiscal years beginning after December 15, 2019. The adoption of this update is not expected to have a material impact on the Company’s financial statements.

In January 2017, the FASB issued an update that clarifies the definition of a business as it pertains to business combinations. This amendment affects all companies and other reporting organizations that must determine whether they have sold or acquired a business. This update will be effective for the Company’s financial statements for 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 2016, the FASB issued an accounting standards update to address diversity in presentation in how certain cash receipts and cash payments are presented and classified in 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 adoption of this update is not expected to have a material impact on the Company’s financial statements.

In June 2016, the 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 forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. This update is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2019. The Company is currently evaluating its existing systems and data to support the new standard as well as 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. The standard specifically requires excess tax benefits and tax deficiencies to be recorded in the income statement when awards vest or are settled. The Company adopted this accounting standards update in the first quarter of 2017. As a result, during the first six months of 2017, the Company recorded $582,000 in excess tax benefits in the income statement. The Company elected to continue its existing practice of estimating the number of awards that will be forfeited. The Company elected to apply the cash flow classification guidance prospectively, and therefore, prior periods have not been adjusted.

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. The Company adopted this accounting standards update in the first quarter of 2017. The adoption of this update did not 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 of the new guidance on its consolidated financial statements. The Company expects to recognize a right-of-use asset and a lease liability for its operating lease commitments.

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 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. In evaluating this standard, management has determined that the majority of revenue earned by the Company is from revenue streams not included in the scope of this standard and therefore management does not expect the new revenue recognition guidance to have a material impact on its consolidated financial statements.

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Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2017

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 six months ended June 30, 2017 do not necessarily indicate the results that the Company will achieve for all of 2017.

Certain information and footnote disclosures required under U.S. GAAP have been condensed or omitted, as permitted by rules and regulations of the Securities and Exchange Commission. These unaudited interim financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes that are presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

Recent Accounting Pronouncements

RECENT ACCOUNTING PRONOUNCMENTS

In May 2017, the Financial Accounting Standards Board (“FASB”) issued an update which provides clarity and reduces diversity in practice when accounting for the modification of terms and conditions for share-based payment awards. Previous accounting guidance did not distinguish between modifications which were substantive from modifications that were merely administrative. The accounting standards update requires entities to account for the effects of a modification unless the following three conditions are met: the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified; the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. This update will be effective for annual and interim periods 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 March 2017, the FASB issued an update which shortens the amortization period for certain callable debt securities held at a premium to the earliest call date. Under current GAAP, entities amortize the premium as an adjustment of yield over the contractual life of the instrument even if the holder is certain that the call will be exercised. As a result, upon the exercise of a call on a callable debt security held at a premium, the unamortized premium is recorded as a loss in earnings. The update shortens the amortization period for certain callable debt securities held at a premium and requires the premium be amortized to the earliest call date. This update will be effective for annual and interim periods beginning after December 15, 2018. Entities are required to apply the amendments on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The adoption of this update is not expected to have a material impact on the Company’s financial statements.

In March 2017, the FASB issued an update which improves the presentation of net periodic pension cost and net periodic postretirement benefit cost in a company’s income statement. The amendment requires that an employer report the service cost component in the same line items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. The amendment is effective for annual and interim periods 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 January 2017, the FASB issued an update to simplify the test for goodwill impairment. This amendment eliminates Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. This update will be effective for the Company’s financial statements for fiscal years beginning after December 15, 2019. The adoption of this update is not expected to have a material impact on the Company’s financial statements.

In January 2017, the FASB issued an update that clarifies the definition of a business as it pertains to business combinations. This amendment affects all companies and other reporting organizations that must determine whether they have sold or acquired a business. This update will be effective for the Company’s financial statements for 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 2016, the FASB issued an accounting standards update to address diversity in presentation in how certain cash receipts and cash payments are presented and classified in 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 adoption of this update is not expected to have a material impact on the Company’s financial statements.

In June 2016, the 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 forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. This update is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2019. The Company is currently evaluating its existing systems and data to support the new standard as well as 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. The standard specifically requires excess tax benefits and tax deficiencies to be recorded in the income statement when awards vest or are settled. The Company adopted this accounting standards update in the first quarter of 2017. As a result, during the first six months of 2017, the Company recorded $582,000 in excess tax benefits in the income statement. The Company elected to continue its existing practice of estimating the number of awards that will be forfeited. The Company elected to apply the cash flow classification guidance prospectively, and therefore, prior periods have not been adjusted.

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. The Company adopted this accounting standards update in the first quarter of 2017. The adoption of this update did not 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 of the new guidance on its consolidated financial statements. The Company expects to recognize a right-of-use asset and a lease liability for its operating lease commitments.

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 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. In evaluating this standard, management has determined that the majority of revenue earned by the Company is from revenue streams not included in the scope of this standard and therefore management does not expect the new revenue recognition guidance to have a material impact on its consolidated financial statements.

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Acquisitions (Tables)

6 Months Ended

Jun. 30, 2017

Harmony Bank [Member]

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 Harmony, net of cash consideration paid.

	On July 1, 2016
	(in thousands)
Cash and cash equivalents	$	27,809
Securities available for sale		7,474
Securities held to maturity		6,885
Federal Home Loan Bank stock		780
Loans		259,985
Premises and equipment		3,125
Goodwill		11,147
Identifiable intangible assets		1,088
Accrued interest receivable and other assets		8,146
Total assets acquired		326,439
Deposits		(278,060	)
Other borrowings		(9,314	)
Other liabilities		(2,411	)
Total liabilities assumed		(289,785	)
Net assets acquired	$	36,654

Summary of Loans Acquired

The following is a summary of the loans accounted for in accordance with ASC 310-30 that were acquired in the Harmony acquisition as of the closing date.

	Acquired Credit Impaired Loans
	(in thousands)
Contractually required principal and interest at acquisition	$	1,264
Contractual cash flows not expected to be collected (non-accretable difference)		398
Expected cash flows at acquisition		866
Interest component of expected cash flows (accretable difference)		97
Fair value of acquired loans	$	769

Pascack Bancorp, Inc. [Member]

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

The acquisition was accounted for under the acquisition method of accounting. Accordingly, 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 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 January 7, 2016
	(in thousands)
Cash and cash equivalents	$	40,942
Securities held to maturity		3,925
Federal Home Loan Bank stock		2,962
Loans		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 accounted for in accordance with ASC 310-30 that were acquired in the Pascack acquisition as of the closing date.

	Acquired Credit Impaired Loans
	(in thousands)
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

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2017

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,
	2017		2016		2017		2016
	(in thousands, except per share data)				(in thousands, except per share data)
Net income available to common shareholders	$	13,370	$	10,130	$	25,682	$	18,238
Less: earnings allocated to participating securities		119		106		239		162
Net income allocated to common shareholders	$	13,251	$	10,024	$	25,443	$	18,076
Weighted average number of common shares outstanding - basic		47,465		41,238		47,410		41,084
Share-based plans		209		168		236		161
Weighted average number of common shares outstanding - diluted		47,674		41,406		47,646		41,245
Basic earnings per share	$	0.28	$	0.24	$	0.54	$	0.44
Diluted earnings per share	$	0.28	$	0.24	$	0.53	$	0.44

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Investment Securities (Tables)

6 Months Ended

Jun. 30, 2017

Investments, Debt and Equity Securities [Abstract]

Reconciliation of Available-for-Sale Securities

	June 30, 2017									December 31, 2016
			Gross		Gross							Gross		Gross
	Amortized		Unrealized		Unrealized			Fair		Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value		Cost		Gains		Losses			Value
	(in thousands)									(in thousands)
AVAILABLE FOR SALE
U.S. Treasury and U.S. government agencies	$	143,077	$	244	$	(877	)	$	142,444	$	118,537	$	102	$	(1,280	)	$	117,359
Mortgage-backed securities, residential		445,829		1,255		(3,541	)		443,543		406,851		1,174		(4,487	)		403,538
Mortgage-backed securities, multifamily		10,162		60		(23	)		10,199		10,192		30		(35	)		10,187
Obligations of states and political subdivisions		53,798		768		(292	)		54,274		48,868		391		(933	)		48,326
Debt securities		5,000		95		—			5,095		5,350		63		(1	)		5,412
Equity securities		15,385		2,620		(396	)		17,609		17,314		5,000		(432	)		21,882
	$	673,251	$	5,042	$	(5,129	)	$	673,164	$	607,112	$	6,760	$	(7,168	)	$	606,704

Reconciliation of Held-to-Maturity Securities

	June 30, 2017									December 31, 2016
			Gross		Gross							Gross		Gross
	Amortized		Unrealized		Unrealized			Fair		Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value		Cost		Gains		Losses			Value
	(in thousands)									(in thousands)
HELD TO MATURITY
U.S. government agencies	$	33,484	$	193	$	(283	)	$	33,394	$	33,553	$	144	$	(430	)	$	33,267
Mortgage-backed securities, residential		38,262		298		(524	)		38,036		38,706		369		(598	)		38,477
Mortgage-backed securities, multifamily		2,008		—		(17	)		1,991		2,059		—		(44	)		2,015
Obligations of states and political subdivisions		62,706		585		(135	)		63,156		71,284		269		(385	)		71,168
Debt securities		2,008		34		—			2,042		2,012		51		—			2,063
	$	138,468	$	1,110	$	(959	)	$	138,619	$	147,614	$	833	$	(1,457	)	$	146,990

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):

	Available for Sale				Held to Maturity
June 30, 2017	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	2,605	$	2,623	$	29,499	$	29,503
Due after one year through five years		107,942		108,341		35,641		35,904
Due after five years through ten years		66,678		66,174		28,621		28,721
Due after ten years		24,650		24,675		4,437		4,464
		201,875		201,813		98,198		98,592
Mortgage-backed securities		455,991		453,742		40,270		40,027
Equity securities		15,385		17,609		—		—
Total securities	$	673,251	$	673,164	$	138,468	$	138,619

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 June 30,					For the Six Months Ended June 30,
	2017			2016		2017		2016
Sale proceeds	$	—		$	—	$	4,499	$	15,654
Gross gains (losses)		(15	)		—		2,524		370

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 for the periods presented:

	Less Than 12 Months				12 Months or Longer				Total
			Unrealized				Unrealized		Number of				Unrealized
June 30, 2017	Fair Value		Losses		Fair Value		Losses		Securities		Fair Value		Losses
	(dollars in thousands)
AVAILABLE FOR SALE
U.S. government agencies	$	67,712	$	653	$	4,786	$	224		15	$	72,498	$	877
Mortgage-backed securities, residential		270,813		3,099		17,938		442		85		288,751		3,541
Mortgage-backed securities, multifamily		5,159		23		—		—		1		5,159		23
Obligations of states and political subdivisions		17,616		275		877		17		32		18,493		292
Equity securities		—		—		9,602		396		2		9,602		396
	$	361,300	$	4,050	$	33,203	$	1,079		135	$	394,503	$	5,129
HELD TO MATURITY
U.S. government agencies	$	12,215	$	283	$	—	$	—		2	$	12,215	$	283
Mortgage-backed securities, residential		26,661		411		2,191		113		17		28,852		524
Mortgage-backed securities, multifamily		846		13		1,047		4		2		1,893		17
Obligations of states and political subdivisions		29,283		135		—		—		17		29,283		135
	$	69,005	$	842	$	3,238	$	117		38	$	72,243	$	959
	Less Than 12 Months				12 Months or Longer				Total
			Unrealized				Unrealized		Number of				Unrealized
December 31, 2016	Fair Value		Losses		Fair Value		Losses		Securities		Fair Value		Losses
	(dollars in thousands)
AVAILABLE FOR SALE
U.S. Treasury and U.S. government agencies	$	94,153	$	1,280	$	—	$	—		18	$	94,153	$	1,280
Mortgage-backed securities, residential		292,873		4,078		15,453		409		91		308,326		4,487
Mortgage-backed securities, multifamily		5,178		35		—		—		1		5,178		35
Obligations of states and political subdivisions		29,904		933		—		—		54		29,904		933
Other debt securities		350		1		—		—		1		350		1
Equity securities		6,030		94		4,720		338		2		10,750		432
	$	428,488	$	6,421	$	20,173	$	747		167	$	448,661	$	7,168
HELD TO MATURITY
U.S. government agencies	$	17,147	$	430	$	—	$	—		3	$	17,147	$	430
Mortgage-backed securities, residential		27,909		535		1,061		63		15		28,970		598
Mortgage-backed securities, multifamily		2,015		44		—		—		2		2,015		44
Obligations of states and political subdivisions		50,302		384		401		1		43		50,703		385
	$	97,373	$	1,393	$	1,462	$	64		63	$	98,835	$	1,457

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Loans, Leases and Other Real Estate (Tables)

6 Months Ended

Jun. 30, 2017

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:

	June 30, 2017			December 31, 2016
	(in thousands)
Commercial, secured by real estate	$	2,725,418		$	2,556,601
Commercial, industrial and other		352,977			350,228
Leases		70,295			67,016
Real estate - residential mortgage		337,765			349,581
Real estate - construction		230,178			211,109
Home equity and consumer		337,643			339,360
Total loans and leases		4,054,276			3,873,895
Less: deferred fees		(3,545	)		(3,297	)
Loans and leases, net of deferred fees	$	4,050,731		$	3,870,598

Schedule of Changes in Accretable Yield

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

	For the Three Months Ended						For the Six Months Ended
	June 30, 2017			June 30, 2016			June 30, 2017			June 30, 2016
	(in thousands)						(in thousands)
Balance, beginning of period	$	180		$	69		$	145		$	—
Acquisitions		—			—			—			85
Accretion		(47	)		(15	)		(98	)		(31	)
Net reclassification non-accretable difference		—			11			86			11
Balance, end of period	$	133		$	65		$	133		$	65

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:

	June 30, 2017		December 31, 2016
	(in thousands)
Commercial, secured by real estate	$	8,768	$	10,413
Commercial, industrial and other		378		167
Leases, including leases held for sale		81		153
Real estate - residential mortgage		3,857		6,048
Real estate - construction		1,472		1,472
Home equity and consumer		1,689		2,151
Total non-accrual loans and leases	$	16,245	$	20,404
Other real estate and other repossessed assets		1,415		1,072
TOTAL NON-PERFORMING ASSETS	$	17,660	$	21,476
Troubled debt restructurings, still accruing	$	11,697	$	8,802

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, 2017 and December 31, 2016, 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, 2017
Commercial, secured by real estate	$	3,258	$	600	$	8,388	$	12,246	$	2,713,172	$	2,725,418	$	—
Commercial, industrial and other		491		—		301		792		352,185		352,977		—
Leases		303		113		81		497		69,798		70,295		—
Real estate - residential mortgage		985		636		3,295		4,916		332,849		337,765		—
Real estate - construction		—		—		1,472		1,472		228,706		230,178		—
Home equity and consumer		1,148		148		1,292		2,588		335,055		337,643		20
	$	6,185	$	1,497	$	14,829	$	22,511	$	4,031,765	$	4,054,276	$	20
December 31, 2016
Commercial, secured by real estate	$	6,082	$	1,234	$	9,313	$	16,629	$	2,539,972	$	2,556,601	$	—
Commercial, industrial and other		1,193		213		42		1,448		348,780		350,228		—
Leases		132		78		153		363		66,653		67,016		—
Real estate - residential mortgage		2,990		1,057		5,330		9,377		340,204		349,581		—
Real estate - construction		3,409		—		1,472		4,881		206,228		211,109		—
Home equity and consumer		1,260		129		2,049		3,438		335,922		339,360		10
	$	15,066	$	2,711	$	18,359	$	36,136	$	3,837,759	$	3,873,895	$	10

Impaired Loans with and without Specific Allowances

Impaired loans as of June 30, 2017 and December 31, 2016 are as follows:

			Contractual
	Recorded		Unpaid				Average		Interest
	Investment in		Principal		Specific		Investment in		Income
June 30, 2017	Impaired Loans		Balance		Allowance		Impaired Loans		Recognized
	(in thousands)
Loans without specific allowance:
Commercial, secured by real estate	$	14,806	$	15,180	$	—	$	13,909	$	148
Commercial, industrial and other		568		568		—		568		11
Real estate - residential mortgage		970		987		—		903		8
Real estate - construction		1,472		1,472		—		1,472		—
Home equity and consumer		—		—		—		—		—
Loans with specific allowance:
Commercial, secured by real estate		5,022		5,342		276		4,913		117
Commercial, industrial and other		431		431		14		402		9
Real estate - residential mortgage		1,005		1,134		34		1,015		15
Real estate - construction		—		—		—		—		—
Home equity and consumer		1,148		1,175		99		1,150		28
Total:
Commercial, secured by real estate	$	19,828	$	20,522	$	276	$	18,822	$	265
Commercial, industrial and other		999		999		14		970		20
Real estate - residential mortgage		1,975		2,121		34		1,918		23
Real estate - construction		1,472		1,472		—		1,472		—
Home equity and consumer		1,148		1,175		99		1,150		28
	$	25,422	$	26,289	$	423	$	24,332	$	336

			Contractual
	Recorded		Unpaid				Average		Interest
	Investment in		Principal		Specific		Investment in		Income
December 31, 2016	Impaired Loans		Balance		Allowance		Impaired Loans		Recognized
	(in thousands)
Loans without specific allowance:
Commercial, secured by real estate	$	12,764	$	13,195	$	—	$	13,631	$	229
Commercial, industrial and other		603		603		—		1,109		24
Leases		—		—		—		—		—
Real estate - residential mortgage		1,880		3,146		—		2,430		16
Real estate - construction		1,471		1,471		—		12		—
Home equity and consumer		139		139		—		388		—
Loans with specific allowance:
Commercial, secured by real estate		5,860		6,142		392		6,549		273
Commercial, industrial and other		349		349		12		360		17
Leases		—		—		—		1		—
Real estate - residential mortgage		1,031		1,100		31		1,011		30
Real estate - construction		—		—		—		—		—
Home equity and consumer		1,188		1,211		94		1,184		59
Total:
Commercial, secured by real estate	$	18,624	$	19,337	$	392	$	20,180	$	502
Commercial, industrial and other		952		952		12		1,469		41
Leases		—		—		—		1		—
Real estate - residential mortgage		2,911		4,246		31		3,441		46
Real estate - construction		1,471		1,471		—		12		—
Home equity and consumer		1,327		1,350		94		1,572		59
	$	25,285	$	27,356	$	529	$	26,675	$	648

Company's Commercial Loan Portfolio

The following table shows the Company’s commercial loan portfolio as of June 30, 2017 and December 31, 2016, by the risk ratings discussed above (in thousands):

June 30, 2017	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Real Estate - Construction
RISK RATING
1	$	—	$	448	$	—
2		—		29,901		—
3		84,407		35,124		—
4		821,819		129,845		8,800
5		1,700,154		131,751		218,054
5W - Watch		58,427		11,047		698
6 - Other assets especially mentioned		31,163		9,474		—
7 - Substandard		29,448		5,387		2,626
8 - Doubtful		—		—		—
9 - Loss		—		—		—
Total	$	2,725,418	$	352,977	$	230,178
December 31, 2016	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Real Estate - Construction
RISK RATING
1	$	—	$	1,449	$	—
2		—		26,743		—
3		82,102		36,644		—
4		729,281		135,702		28,177
5		1,615,331		129,366		175,595
5W - Watch		68,372		6,395		1,223
6 - Other assets especially mentioned		33,015		5,242		—
7 - Substandard		28,500		8,687		6,114
8 - Doubtful		—		—		—
9 - Loss		—		—		—
Total	$	2,556,601	$	350,228	$	211,109

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, 2017 and 2016:

Three Months Ended June 30, 2017	Commercial, Secured by Real Estate			Commercial, Industrial and Other			Leases			Real Estate- Residential Mortgage			Real Estate- Construction			Home Equity and Consumer			Total
										(in thousands)
Beginning Balance	$	22,083		$	1,792		$	502		$	1,825		$	2,378		$	3,010		$	31,590
Charge-offs		(83	)		(71	)		(120	)		(169	)		—			(427	)		(870	)
Recoveries		145			27			28			—			5			71			276
Provision		1,199			(60	)		119			98			213			258			1,827
Ending Balance	$	23,344		$	1,688		$	529		$	1,754		$	2,596		$	2,912		$	32,823
Three Months Ended June 30, 2016	Commercial, Secured by Real Estate			Commercial, Industrial and Other			Leases			Real Estate- Residential Mortgage			Real Estate- Construction			Home Equity and 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
Six Months Ended June 30, 2017	Commercial, Secured by Real Estate			Commercial, Industrial and Other			Leases			Real Estate- Residential Mortgage			Real Estate- Construction			Home Equity and Consumer			Total
										(in thousands)
Beginning Balance	$	21,223		$	1,723		$	548		$	1,964		$	2,352		$	3,435		$	31,245
Charge-offs		(303	)		(234	)		(163	)		(310	)		(609	)		(611	)		(2,230	)
Recoveries		364			122			32			—			20			225			763
Provision		2,060			77			112			100			833			(137	)		3,045
Ending Balance	$	23,344		$	1,688		$	529		$	1,754		$	2,596		$	2,912		$	32,823
Six Months Ended June 30, 2016	Commercial, Secured by Real Estate			Commercial, Industrial and Other			Leases			Real Estate- Residential Mortgage			Real Estate- Construction			Home Equity and 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

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, 2017	Real Estate		and Other		Leases		Mortgage		Construction		Consumer		Total
	(in thousands)
Ending Balance: Individually evaluated for impairment	$	19,828	$	999	$	—	$	1,975	$	1,472	$	1,148	$	25,422
Ending Balance: Collectively evaluated for impairment		2,704,863		351,971		70,295		335,790		228,706		336,487		4,028,112
Ending Balance: Loans acquired with deteriorated credit quality		727		7		—		—		—		8		742
Ending Balance (1)	$	2,725,418	$	352,977	$	70,295	$	337,765	$	230,178	$	337,643	$	4,054,276
	Commercial,		Commercial,				Real Estate-				Home
	Secured by		Industrial				Residential		Real Estate-		Equity and
December 31, 2016	Real Estate		and Other		Leases		Mortgage		Construction		Consumer		Total
	(in thousands)
Ending Balance: Individually evaluated for impairment	$	18,624	$	952	$	—	$	2,911	$	1,471	$	1,327	$	25,285
Ending Balance: Collectively evaluated for impairment		2,536,858		349,001		67,016		346,670		209,638		338,019		3,847,202
Ending balance: Loans acquired with deteriorated credit quality		1,119		275		—		—		—		14		1,408
Ending Balance (1)	$	2,556,601	$	350,228	$	67,016	$	349,581	$	211,109	$	339,360	$	3,873,895

(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, 2017	Real Estate		and Other		Leases		Mortgage		Construction		Consumer		Total
	(in thousands)
Ending Balance: Individually evaluated for impairment	$	276	$	14	$	—	$	34	$	—	$	99	$	423
Ending Balance: Collectively evaluated for impairment		23,068		1,674		529		1,720		2,596		2,813		32,400
Ending Balance	$	23,344	$	1,688	$	529	$	1,754	$	2,596	$	2,912	$	32,823
	Commercial,		Commercial,				Real Estate-				Home
	Secured by		Industrial				Residential		Real Estate-		Equity and
December 31, 2016	Real Estate		and Other		Leases		Mortgage		Construction		Consumer		Total
	(in thousands)
Ending Balance: Individually evaluated for impairment	$	392	$	12	$	—	$	31	$	—	$	94	$	529
Ending Balance: Collectively evaluated for impairment		20,831		1,711		548		1,933		2,352		3,341		30,716
Ending Balance	$	21,223	$	1,723	$	548	$	1,964	$	2,352	$	3,435	$	31,245

Summary of Restructured Loans

The following table summarizes loans that have been restructured during the three and six months ended June 30, 2017 and 2016:

	For the Three Months Ended						For the Three Months Ended
	June 30, 2017						June 30, 2016
			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)
Commercial, secured by real estate		2	$	159	$	159		—	$	—	$	—
Commercial, industrial and other		2		124		124		—		—		—
		4	$	283	$	283		—	$	—	$	—
	For the Six Months Ended						For the Six Months Ended
	June 30, 2017						June 30, 2016
			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)
Commercial, secured by real estate		4	$	3,038	$	3,038	$	—	$	—	$	—
Commercial, industrial and other		2		124		124		—		—		—
Home equity and consumer		—		—		—		3		285		285
		6	$	3,162	$	3,162	$	3	$	285	$	285

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

The following table summarizes as of June 30, 2017 and 2016, loans that were restructured within the previous twelve months that have subsequently defaulted:

	June 30, 2017				June 30, 2016
	Number of		Recorded		Number of		Recorded
	Contracts		Investment		Contracts		Investment
	(dollars in thousands)
Real estate - residential mortgage		1	$	254		—	$	—
Home equity and consumer		—		—		1		162
		1	$	254		1	$	162

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Derivatives (Tables)

6 Months Ended

Jun. 30, 2017

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, 2017	Notional Amount			Average Maturity (Years)		Weighted Average Fixed Rate			Weighted Average Variable Rate		Fair Value
Classified in Other Assets:
3rd Party interest rate swaps	$	87,852			9.4		3.78	%		1 Mo. LIBOR + 2.12	$	2,989
Customer interest rate swaps		98,651			11.3		4.64	%		1 Mo. LIBOR + 2.19		2,522
Interest rate swap (cash flow hedge)		30,000			4.0		1.10	%		3 Mo. LIBOR		868
Classified in Other Liabilities:
Customer interest rate swaps	$	87,852			9.4		3.78	%		1 Mo. LIBOR + 2.12	$	(2,989	)
3rd Party interest rate swaps		98,651			11.3		4.64	%		1 Mo. LIBOR + 2.19		(2,522	)
December 31, 2016	Notional Amount			Average Maturity (Years)		Weighted Average Fixed Rate			Weighted Average Variable Rate		Fair Value
Customer interest rate swaps	$	129,252			10.9		4.03	%		1 Mo. LIBOR + 2.10	$	(2,345	)
3rd party interest rate swaps		(129,252	)		10.9		4.03	%		1 Mo. LIBOR + 2.10		2,345
Interest rate swap (cash flow hedge)		30,000			4.5		1.10	%		3 Mo. LIBOR		1,033

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Goodwill and Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Estimated Future Amortization Expense

The estimated future amortization expense for the remainder of 2017 and for each of the succeeding five years ended December 31 is as follows (dollars in thousands):

For the Year Ended
2017	$	268
2018		594
2019		504
2020		415
2021		326
2022		236

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Share-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2017

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

Summary of Company's Restricted Stock Activity

The following is a summary of the Company’s restricted stock activity during the six months ended June 30, 2017:

				Weighted
	Number of			Average
	Shares			Price
Outstanding, January 1, 2017		42,875		$	9.72
Granted		13,176			18.20
Vested		(32,901	)		9.79
Forfeited		(48	)		9.39
Outstanding, June 30, 2017		23,102		$	14.46

The following is a summary of the Company’s RSU activity during the six months ended June 30, 2017:

				Weighted
	Number of			Average
	Shares			Price
Outstanding, January 1, 2017		302,344		$	10.76
Granted		117,673			19.96
Vested		(148,584	)		13.01
Forfeited		(8,995	)		12.58
Outstanding, June 30, 2017		262,438		$	13.55

Option Activity under the Company's Stock Option Plans

Option activity under the Company’s stock option plans is as follows:

						Weighted
						Average
				Weighted		Remaining
				Average		Contractual		Aggregate
	Number of			Exercise		Term		Intrinsic
	Shares			Price		(in years)		Value
Outstanding, January 1, 2017		135,250		$	8.79		4.18	$	1,450,533
Granted		—			—
Exercised		(31,769	)		9.84
Forfeited		—			—
Expired		—			—
Outstanding, June 30, 2017		103,481		$	8.47		4.78	$	1,076,479
Options exercisable at June 30, 2017		103,481		$	8.47		4.78	$	1,076,479

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Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2017

Equity [Abstract]

Components of Other Comprehensive Income (Loss)

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

	June 30, 2017									June 30, 2016
	Before			Tax Benefit			Net of			Before			Tax Benefit			Net of
For the quarter ended:	Tax Amount			(Expense)			Tax Amount			Tax Amount			(Expense)			Tax Amount
	(in thousands)									(in thousands)
Net unrealized gains (losses) on available for sale securities
Net unrealized holding gains arising during period	$	1,661		$	(632	)	$	1,029		$	2,684		$	(987	)	$	1,697
Reclassification adjustment for net losses arising during the period		15			(6	)		9			—			—			—
Net unrealized gains		1,676			(638	)		1,038			2,684			(987	)		1,697
Unrealized losses on derivatives		(186	)		65			(121	)		(193	)		67			(126	)
Change in minimum pension liability		—			—			—			8			(2	)		6
Other comprehensive income, net	$	1,490		$	(573	)	$	917		$	2,499		$	(922	)	$	1,577
For the six months ended:	Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount			Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount
	(in thousands)									(in thousands)
Net unrealized gains on available for sale securities
Net unrealized holding gains arising during period	$	2,845		$	(1,082	)	$	1,763		$	9,247		$	(3,393	)	$	5,854
Reclassification adjustment for net gains arising during the period		(2,524	)		884			(1,640	)		(370	)		137			(233	)
Net unrealized gains		321			(198	)		123			8,877			(3,256	)		5,621
Unrealized losses on derivatives		(165	)		58			(107	)		(193	)		67			(126	)
Change in minimum pension liability		—			—			—			72			(28	)		44
Other comprehensive income, net	$	156		$	(140	)	$	16		$	8,756		$	(3,217	)	$	5,539

Summary of Changes in Components of Other Comprehensive Income, 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, net of tax (in thousands):

	For the Three Months Ended June 30, 2017											For the Three Months Ended June 30, 2016
	Unrealized											Unrealized Gains
	Gains (Losses) on			Unrealized								on		Unrealized
	Available for Sale			Losses								Available for Sale		Losses
	Securities			on Derivatives			Pension Items		Total			Securities		on Derivatives			Pension Items		Total
Beginning balance	$	(1,032	)	$	686		$	38	$	(308	)	$	5,078	$	—		$	34	$	5,112
Other comprehensive income before classifications		1,029			(121	)		—		908			1,697		(126	)		6		1,577
Amounts reclassified from accumulated other comprehensive income		9			—			—		9			—		—			—		—
Net current period other comprehensive income (loss)		1,038			(121	)		—		917			1,697		(126	)		6		1,577
Ending balance	$	6		$	565		$	38	$	609		$	6,775		(126	)	$	40	$	6,689

	For the Six Months Ended June 30, 2017											For the Six Months Ended June 30, 2016
	Unrealized											Unrealized
	Gains (Losses) on			Unrealized								Gains on			Unrealized
	Available for Sale			Losses								Available for Sale			Losses
	Securities			on Derivatives			Pension Items		Total			Securities			on Derivatives			Pension Items			Total
Beginning balance	$	(117	)	$	672		$	38	$	593		$	1,154		$	—		$	(4	)	$	1,150
Other comprehensive income before classifications		1,763			(107	)		—		1,656			5,854			(126	)		44			5,772
Amounts reclassified from accumulated other comprehensive income		(1,640	)		—			—		(1,640	)		(233	)		—			—			(233	)
Net current period other comprehensive income		123			(107	)		—		16			5,621			(126	)		44			5,539
Ending balance	$	6		$	565		$	38	$	609		$	6,775			(126	)	$	40		$	6,689

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

6 Months Ended

Jun. 30, 2017

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:

	Quoted Prices in		Significant
	Active Markets		Other		Significant
	for Identical		Observable		Unobservable
	Assets		Inputs		Inputs		Total
	(Level 1)		(Level 2)		(Level 3)		Fair Value
	(in thousands)
June 30, 2017
Assets:
Investment securities, available for sale
U.S. Treasury and government agencies	$	5,696	$	136,748	$	—	$	142,444
Mortgage-backed securities		—		453,742		—		453,742
Obligations of states and political subdivisions		—		54,274		—		54,274
Other debt securities		—		5,095		—		5,095
Equity securities		4,722		12,887		—		17,609
Total securities available for sale		10,418		662,746		—		673,164
Derivative assets		—		6,379		—		6,379
Total Assets	$	10,418	$	669,125	$	—	$	679,543
Liabilities:
Derivative liabilities	$	—	$	5,511	$	—	$	5,511
Total Liabilities	$	—	$	5,511	$	—	$	5,511
December 31, 2016
Assets:
Investment securities, available for sale
U.S. Treasury and government agencies	$	5,931	$	111,428	$	—	$	117,359
Mortgage-backed securities		—		413,725		—		413,725
Obligations of states and political subdivisions		—		48,326		—		48,326
Other debt securities		—		5,412		—		5,412
Equity securities		7,748		14,134		—		21,882
Total securities available for sale		13,679		593,025		—		606,704
Derivative assets		—		3,378		—		3,378
Total Assets	$	13,679	$	596,403	$	—	$	610,082
Liabilities:
Derivative liabilities	$	—	$	2,345	$	—	$	2,345
Total Liabilities	$	—	$	2,345	$	—	$	2,345

Fair Value of Assets Measured on Non-recurring Basis

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

	(Level 1)		(Level 2)		(Level 3)		Total Fair Value
			(in thousands)
June 30, 2017
Assets:
Impaired loans and leases	$	—	$	—	$	25,422	$	25,422
Loans held for sale		—		877		—		877
Other real estate owned and other repossessed assets		—		—		1,415		1,415
December 31, 2016
Assets:
Impaired loans and leases	$	—	$	—	$	25,285	$	25,285
Loans held for sale		—		1,742		—		1,742
Other real estate owned and other repossessed assets		—		—		1,072		1,072

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, 2017 and December 31, 2016:

	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, 2017
Financial Assets:
Investment securities held to maturity	$	138,468	$	138,619	$	—	$	110,139	$	28,480
Federal Home Loan Bank and other membership bank stocks		18,899		18,899		—		18,899		—
Loans and leases, net		4,017,908		4,019,534		—		—		4,019,534
Financial Liabilities:
Certificates of deposit		566,245		564,084		—		564,084		—
Other borrowings		312,251		312,136		—		312,136		—
Subordinated debentures		104,842		95,588		—		—		95,588
December 31, 2016
Financial Assets:
Investment securities held to maturity	$	147,614	$	146,990	$	—	$	111,403	$	35,587
Federal Home Loan Bank and other membership bank stocks		15,099		15,099		—		15,099		—
Loans and leases, net		3,839,353		3,832,465		—		—		3,832,465
Financial Liabilities:
Certificates of deposit		544,908		543,399		—		543,399		—
Other borrowings		260,866		264,586		—		264,586		—
Subordinated debentures		104,784		94,476		—		—		94,476

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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, 2017 USD ($)	Jun. 30, 2016 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)
Business Acquisition, Contingent Consideration [Line Items]
Merger and acquisition integration-related expenses				$ 685,000		$ 2,406,000
Acquisition Related Costs [Member]
Business Acquisition, Contingent Consideration [Line Items]
Increase in goodwill			$ 685,000
Core Deposits [Member]
Business Acquisition, Contingent Consideration [Line Items]
Core deposit intangible			2,600,000		$ 2,600,000		$ 3,300,000
Harmony Bank [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
Date of Agreement					Jul. 01, 2016
Consideration price per share | $ / shares	$ 14.31
Closing stock price per share | $ / shares	11.45
Average strike price | $ / shares	$ 9.07
Cash paid in connection with cancellation of the old stock options	$ 869,000
Allowance for loan and lease losses					$ 0
Estimated useful life of core deposit intangible					10 years
Harmony Bank [Member] | Core Deposits [Member]
Business Acquisition, Contingent Consideration [Line Items]
Core deposit intangible			691,000		$ 691,000
Harmony Bank [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
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
Allowance for loan and lease losses					$ 0
Estimated useful life of core deposit intangible					10 years
Percentage of aggregate merger consideration in shares		90.00%
Percentage of aggregate merger consideration in cash		10.00%
Cash paid for acquisition		$ 4,500,000
Pascack Bancorp, Inc. [Member] | Core Deposits [Member]
Business Acquisition, Contingent Consideration [Line Items]
Core deposit intangible			$ 1,500,000		$ 1,500,000
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, 2017	Dec. 31, 2016	Jul. 01, 2016	Jan. 07, 2016
Business Acquisition [Line Items]
Goodwill	$ 136,433	$ 135,747
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				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
Harmony Bank [Member]
Business Acquisition [Line Items]
Cash and cash equivalents			$ 27,809
Securities available for sale			7,474
Securities held to maturity			6,885
Federal Home Loan Bank stock			780
Loans			259,985
Premises and equipment			3,125
Goodwill			11,147
Identifiable intangible assets			1,088
Accrued interest receivable and other assets			8,146
Total assets acquired			326,439
Deposits			(278,060)
Other borrowings			(9,314)
Other liabilities			(2,411)
Total liabilities assumed			(289,785)
Net assets acquired			$ 36,654

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Acquisitions - Summary of Loans Acquired (Detail) - Acquired Credit Impaired Loans [Member] $ in Thousands	Jun. 30, 2017 USD ($)
Harmony Bank [Member]
Business Acquisition [Line Items]
Contractually required principal and interest at acquisition	$ 1,264
Contractual cash flows not expected to be collected (non-accretable difference)	398
Expected cash flows at acquisition	866
Interest component of expected cash flows (accretable difference)	97
Fair value of acquired loans	769
Pascack Bancorp, Inc. [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

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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, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Earnings Per Share [Abstract]
Net income available to common shareholders, Income	$ 13,370	$ 10,130	$ 25,682	$ 18,238
Less: earnings allocated to participating securities, Income	119	106	239	162
Net income allocated to common shareholders	$ 13,251	$ 10,024	$ 25,443	$ 18,076
Weighted average number of common shares outstanding - basic	47,465	41,238	47,410	41,084
Share-based plans	209	168	236	161
Weighted average number of common shares outstanding - diluted	47,674	41,406	47,646	41,245
Basic earnings per share	$ 0.28	$ 0.24	$ 0.54	$ 0.44
Diluted earnings per share	$ 0.28	$ 0.24	$ 0.53	$ 0.44

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Earnings Per Share - Additional Information (Detail) - shares	3 Months Ended	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options to purchase	0	0

XML

Investment Securities - Reconciliation of Available-for-Sale Securities (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Schedule of Available-for-sale Securities [Line Items]
Total securities, Available for Sale, Amortized Cost	$ 673,251	$ 607,112
Gross Unrealized Gains	5,042	6,760
Gross Unrealized Losses	(5,129)	(7,168)
Total securities, Available for Sale, Fair Value	673,164	606,704
US Treasury and Government Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Total securities, Available for Sale, Amortized Cost	143,077	118,537
Gross Unrealized Gains	244	102
Gross Unrealized Losses	(877)	(1,280)
Total securities, Available for Sale, Fair Value	142,444	117,359
Mortgage-Backed Securities, Residential [Member]
Schedule of Available-for-sale Securities [Line Items]
Total securities, Available for Sale, Amortized Cost	445,829	406,851
Gross Unrealized Gains	1,255	1,174
Gross Unrealized Losses	(3,541)	(4,487)
Total securities, Available for Sale, Fair Value	443,543	403,538
Mortgage-Backed Securities, Multifamily [Member]
Schedule of Available-for-sale Securities [Line Items]
Total securities, Available for Sale, Amortized Cost	10,162	10,192
Gross Unrealized Gains	60	30
Gross Unrealized Losses	(23)	(35)
Total securities, Available for Sale, Fair Value	10,199	10,187
Obligations of States and Political Subdivisions [Member]
Schedule of Available-for-sale Securities [Line Items]
Total securities, Available for Sale, Amortized Cost	53,798	48,868
Gross Unrealized Gains	768	391
Gross Unrealized Losses	(292)	(933)
Total securities, Available for Sale, Fair Value	54,274	48,326
Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Total securities, Available for Sale, Amortized Cost	5,000	5,350
Gross Unrealized Gains	95	63
Gross Unrealized Losses		(1)
Total securities, Available for Sale, Fair Value	5,095	5,412
Equity Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Total securities, Available for Sale, Amortized Cost	15,385	17,314
Gross Unrealized Gains	2,620	5,000
Gross Unrealized Losses	(396)	(432)
Total securities, Available for Sale, Fair Value	$ 17,609	$ 21,882

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Investment Securities - Reconciliation of Held-to-Maturity Securities (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	$ 138,468	$ 147,614
Gross Unrealized Gains	1,110	833
Gross Unrealized Losses	(959)	(1,457)
Fair Value	138,619	146,990
U.S. Government Agencies Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	33,484	33,553
Gross Unrealized Gains	193	144
Gross Unrealized Losses	(283)	(430)
Fair Value	33,394	33,267
Mortgage-Backed Securities, Residential [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	38,262	38,706
Gross Unrealized Gains	298	369
Gross Unrealized Losses	(524)	(598)
Fair Value	38,036	38,477
Mortgage-Backed Securities, Multifamily [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	2,008	2,059
Gross Unrealized Losses	(17)	(44)
Fair Value	1,991	2,015
Obligations of States and Political Subdivisions [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	62,706	71,284
Gross Unrealized Gains	585	269
Gross Unrealized Losses	(135)	(385)
Fair Value	63,156	71,168
Debt Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	2,008	2,012
Gross Unrealized Gains	34	51
Fair Value	$ 2,042	$ 2,063

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Investment Securities - Summary of Contractual Maturities of Investment Securities Classified as Available for Sale and Held to Maturity (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Available for Sale, Amortized Cost
Due in one year or less	$ 2,605
Due after one year through five years	107,942
Due after five years through ten years	66,678
Due after ten years	24,650
Total	201,875
Total securities, Available for Sale, Amortized Cost	673,251	$ 607,112
Available for Sale, Fair Value
Due in one year or less	2,623
Due after one year through five years	108,341
Due after five years through ten years	66,174
Due after ten years	24,675
Total	201,813
Total securities, Available for Sale, Fair Value	673,164	606,704
Held to Maturity, Amortized Cost
Due in one year or less	29,499
Due after one year through five years	35,641
Due after five years through ten years	28,621
Due after ten years	4,437
Total	98,198
Amortized Cost	138,468	147,614
Held to Maturity, Fair Value
Due in one year or less	29,503
Due after one year through five years	35,904
Due after five years through ten years	28,721
Due after ten years	4,464
Total	98,592
Total securities, Held to Maturity, Fair Value	138,619	146,990
Mortgage Backed Securities [Member]
Available for Sale, Amortized Cost
Available for Sale, Amortized Cost	455,991
Available for Sale, Fair Value
Available for Sale, Fair Value	453,742
Held to Maturity, Amortized Cost
Held to Maturity, Amortized Cost	40,270
Held to Maturity, Fair Value
Held to Maturity, Fair Value	40,027
Equity Securities [Member]
Available for Sale, Amortized Cost
Available for Sale, Amortized Cost	15,385
Total securities, Available for Sale, Amortized Cost	15,385	17,314
Available for Sale, Fair Value
Available for Sale, Fair Value	17,609
Total securities, Available for Sale, Fair Value	$ 17,609	$ 21,882

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Investment Securities - Sales of Securities and Gross Gains on Sales of Securities (Detail) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2017	Jun. 30, 2016
Investments, Debt and Equity Securities [Abstract]
Sale proceeds		$ 4,499	$ 15,654
Gross gains (losses)	$ (15)	$ 2,524	$ 370

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Investment Securities - Additional Information (Detail) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Investments, Debt and Equity Securities [Abstract]
Other than temporary impairments	$ 0	$ 0
Securities, carrying value	502,500,000		$ 443,400,000
Purchase price of equities	2,100,000
Market value of equities	4,700,000
Equity securities included in investment funds	12,900,000
Investment in government guaranteed loans, mortgage-backed securities, small business loans	9,600,000
Amortized cost of securities	10,000,000
Fair value of securities	9,600,000
Unfunded commitments	0
Investment in community development loans	$ 3,300,000
Redemption of funds	60 days

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Investment Securities - Reconciliation of Available-for-Sale and Held-to-Maturity Securities in Continuous Unrealized Loss Position (Detail) $ in Thousands	Jun. 30, 2017 USD ($) Security	Dec. 31, 2016 USD ($) Security
Investment [Line Items]
Available for Sale, Less Than 12 Months, Fair Value	$ 361,300	$ 428,488
Available for Sale, Less Than 12 Months, Unrealized Losses	4,050	6,421
Available for Sale, 12 Months or Longer, Fair Value	33,203	20,173
Available for Sale, 12 Months or Longer, Unrealized Losses	$ 1,079	$ 747
Available for Sale, Number of Securities | Security	135	167
Available for Sale, Total, Fair Value	$ 394,503	$ 448,661
Available for Sale, Total, Unrealized Losses	5,129	7,168
Held to Maturity, Less Than 12 Months, Fair Value	69,005	97,373
Held to Maturity, Less Than 12 Months, Unrealized Losses	842	1,393
Held to Maturity, 12 Months or Longer, Fair Value	3,238	1,462
Held to Maturity, 12 Months or Longer, Unrealized Losses	$ 117	$ 64
Held to Maturity, Number of Securities | Security	38	63
Held to Maturity, Total, Fair Value	$ 72,243	$ 98,835
Held to Maturity, Total, Unrealized Losses	959	1,457
US Treasury and Government Agencies [Member]
Investment [Line Items]
Available for Sale, Less Than 12 Months, Fair Value	67,712	94,153
Available for Sale, Less Than 12 Months, Unrealized Losses	653	$ 1,280
Available for Sale, 12 Months or Longer, Fair Value	4,786
Available for Sale, 12 Months or Longer, Unrealized Losses	$ 224
Available for Sale, Number of Securities | Security	15	18
Available for Sale, Total, Fair Value	$ 72,498	$ 94,153
Available for Sale, Total, Unrealized Losses	877	1,280
Held to Maturity, Less Than 12 Months, Fair Value	12,215	17,147
Held to Maturity, Less Than 12 Months, Unrealized Losses	$ 283	$ 430
Held to Maturity, Number of Securities | Security	2	3
Held to Maturity, Total, Fair Value	$ 12,215	$ 17,147
Held to Maturity, Total, Unrealized Losses	283	430
Mortgage-Backed Securities, Residential [Member]
Investment [Line Items]
Available for Sale, Less Than 12 Months, Fair Value	270,813	292,873
Available for Sale, Less Than 12 Months, Unrealized Losses	3,099	4,078
Available for Sale, 12 Months or Longer, Fair Value	17,938	15,453
Available for Sale, 12 Months or Longer, Unrealized Losses	$ 442	$ 409
Available for Sale, Number of Securities | Security	85	91
Available for Sale, Total, Fair Value	$ 288,751	$ 308,326
Available for Sale, Total, Unrealized Losses	3,541	4,487
Held to Maturity, Less Than 12 Months, Fair Value	26,661	27,909
Held to Maturity, Less Than 12 Months, Unrealized Losses	411	535
Held to Maturity, 12 Months or Longer, Fair Value	2,191	1,061
Held to Maturity, 12 Months or Longer, Unrealized Losses	$ 113	$ 63
Held to Maturity, Number of Securities | Security	17	15
Held to Maturity, Total, Fair Value	$ 28,852	$ 28,970
Held to Maturity, Total, Unrealized Losses	524	598
Mortgage-Backed Securities, Multifamily [Member]
Investment [Line Items]
Available for Sale, Less Than 12 Months, Fair Value	5,159	5,178
Available for Sale, Less Than 12 Months, Unrealized Losses	$ 23	$ 35
Available for Sale, Number of Securities | Security	1	1
Available for Sale, Total, Fair Value	$ 5,159	$ 5,178
Available for Sale, Total, Unrealized Losses	23	35
Held to Maturity, Less Than 12 Months, Fair Value	846	2,015
Held to Maturity, Less Than 12 Months, Unrealized Losses	13	$ 44
Held to Maturity, 12 Months or Longer, Fair Value	1,047
Held to Maturity, 12 Months or Longer, Unrealized Losses	$ 4
Held to Maturity, Number of Securities | Security	2	2
Held to Maturity, Total, Fair Value	$ 1,893	$ 2,015
Held to Maturity, Total, Unrealized Losses	17	44
Obligations of States and Political Subdivisions [Member]
Investment [Line Items]
Available for Sale, Less Than 12 Months, Fair Value	17,616	29,904
Available for Sale, Less Than 12 Months, Unrealized Losses	275	$ 933
Available for Sale, 12 Months or Longer, Fair Value	877
Available for Sale, 12 Months or Longer, Unrealized Losses	$ 17
Available for Sale, Number of Securities | Security	32	54
Available for Sale, Total, Fair Value	$ 18,493	$ 29,904
Available for Sale, Total, Unrealized Losses	292	933
Held to Maturity, Less Than 12 Months, Fair Value	29,283	50,302
Held to Maturity, Less Than 12 Months, Unrealized Losses	$ 135	384
Held to Maturity, 12 Months or Longer, Fair Value		401
Held to Maturity, 12 Months or Longer, Unrealized Losses		$ 1
Held to Maturity, Number of Securities | Security	17	43
Held to Maturity, Total, Fair Value	$ 29,283	$ 50,703
Held to Maturity, Total, Unrealized Losses	135	385
Other Debt Securities [Member]
Investment [Line Items]
Available for Sale, Less Than 12 Months, Fair Value		350
Available for Sale, Less Than 12 Months, Unrealized Losses		$ 1
Available for Sale, Number of Securities | Security		1
Available for Sale, Total, Fair Value		$ 350
Available for Sale, Total, Unrealized Losses		1
Equity Securities [Member]
Investment [Line Items]
Available for Sale, Less Than 12 Months, Fair Value		6,030
Available for Sale, Less Than 12 Months, Unrealized Losses		94
Available for Sale, 12 Months or Longer, Fair Value	9,602	4,720
Available for Sale, 12 Months or Longer, Unrealized Losses	$ 396	$ 338
Available for Sale, Number of Securities | Security	2	2
Available for Sale, Total, Fair Value	$ 9,602	$ 10,750
Available for Sale, Total, Unrealized Losses	$ 396	$ 432

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Loans, Leases and Other Real Estate - Composition of Company`s Loan and Lease Portfolio (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	$ 4,054,276	$ 3,873,895
Less: deferred fees	(3,545)	(3,297)
Loans and leases, net of deferred fees	4,050,731	3,870,598
Commercial, Secured by Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	2,725,418	2,556,601
Commercial, Industrial and Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	352,977	350,228
Leases [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	70,295	67,016
Real Estate - Residential Mortgage [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	337,765	349,581
Real Estate-Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	230,178	211,109
Home Equity and Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	$ 337,643	$ 339,360

XML

Loans, Leases and Other Real Estate - Additional Information (Detail) - USD ($)			3 Months Ended		6 Months Ended
	Jul. 01, 2016	Jan. 07, 2016	Jun. 30, 2017	Mar. 31, 2017	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]
Troubled debt restructurings included in non accrual loans			$ 2,100,000		$ 2,100,000		$ 2,400,000
Unfunded lending reserve			2,500,000		2,500,000		2,500,000
Other real estate owned			1,400,000		1,400,000		1,100,000
Other repossessed assets owned			28,000		28,000		9,000
Residential Property [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Other real estate owned			1,100,000		1,100,000		1,100,000
Impaired Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Interest income on credit impaired loans					336,000	$ 336,000
Interest accrued on impaired loans					813,000	$ 828,000
Pascack Bancorp, Inc. [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Debt Securities Acquired with Deteriorated Credit Quality			214,000		214,000
Loans and Debt Securities Acquired with Deteriorated Credit Quality Decrease		$ 603,000
Total purchased credit impaired loans, experienced further credit deterioration and fully charged off				$ 127,000
Remaining loan amount paid			218,000
Harmony Bank [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Debt Securities Acquired with Deteriorated Credit Quality			528,000		528,000
Loans and Debt Securities Acquired with Deteriorated Credit Quality Decrease	$ 241,000
Remaining loan amount paid			247,000
Federal Home Loan Bank of New York [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Residential loans pledged for potential borrowings at the Federal Home Loan Bank of New York			1,100,000,000		1,100,000,000		942,000,000
Home Equity and Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Overdraft balances included in home equity and consumer loans			763,000		763,000		364,000
Residential Mortgages And Consumer Home Equity Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Mortgage loans that were in process of foreclosure			3,100,000		3,100,000		$ 3,700,000
Minimum [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Group of impaired loans with recorded investment			$ 500,000		$ 500,000

XML

Loans, Leases and Other Real Estate - Schedule of Changes in Accretable Yield (Detail) - Loans Acquired with Deteriorated Credit Quality [Member] - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Certain Loans Acquired in Transfer Accounted for as Debt Securities Accretable Yield Movement Schedule [Line Items]
Balance, beginning of period	$ 180	$ 69	$ 145
Acquisitions				$ 85
Accretion	(47)	(15)	(98)	(31)
Net reclassification non-accretable difference		11	86	11
Balance, end of period	$ 133	$ 65	$ 133	$ 65

XML

Loans, Leases and Other Real Estate - Company's Non-Performing Assets and Its Accruing Troubled Debt Restructurings (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total non-accrual loans and leases	$ 16,245	$ 20,404
Other real estate and other repossessed assets	1,415	1,072
TOTAL NON-PERFORMING ASSETS	17,660	21,476
Troubled debt restructurings, still accruing	11,697	8,802
Commercial, Secured by Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total non-accrual loans and leases	8,768	10,413
Commercial, Industrial and Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total non-accrual loans and leases	378	167
Leases [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total non-accrual loans and leases	81	153
Real Estate - Residential Mortgage [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total non-accrual loans and leases	3,857	6,048
Real Estate-Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total non-accrual loans and leases	1,472	1,472
Home Equity and Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total non-accrual loans and leases	$ 1,689	$ 2,151

XML

Loans, Leases and Other Real Estate - Age Analysis of Past Due Loans, Segregated by Class of Loans (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 22,511	$ 36,136
Current	4,031,765	3,837,759
Total Loans and Leases	4,054,276	3,873,895
Recorded Investment Greater than 89 Days and Still Accruing	20	10
Commercial, Secured by Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	12,246	16,629
Current	2,713,172	2,539,972
Total Loans and Leases	2,725,418	2,556,601
Commercial, Industrial and Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	792	1,448
Current	352,185	348,780
Total Loans and Leases	352,977	350,228
Leases [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	497	363
Current	69,798	66,653
Total Loans and Leases	70,295	67,016
Real Estate - Residential Mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	4,916	9,377
Current	332,849	340,204
Total Loans and Leases	337,765	349,581
Real Estate-Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,472	4,881
Current	228,706	206,228
Total Loans and Leases	230,178	211,109
Home Equity and Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	2,588	3,438
Current	335,055	335,922
Total Loans and Leases	337,643	339,360
Recorded Investment Greater than 89 Days and Still Accruing	20	10
30-59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	6,185	15,066
30-59 Days Past Due [Member] | Commercial, Secured by Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	3,258	6,082
30-59 Days Past Due [Member] | Commercial, Industrial and Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	491	1,193
30-59 Days Past Due [Member] | Leases [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	303	132
30-59 Days Past Due [Member] | Real Estate - Residential Mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	985	2,990
30-59 Days Past Due [Member] | Real Estate-Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due		3,409
30-59 Days Past Due [Member] | Home Equity and Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,148	1,260
60-89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,497	2,711
60-89 Days Past Due [Member] | Commercial, Secured by Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	600	1,234
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	113	78
60-89 Days Past Due [Member] | Real Estate - Residential Mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	636	1,057
60-89 Days Past Due [Member] | Home Equity and Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	148	129
Greater Than 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	14,829	18,359
Greater Than 89 Days Past Due [Member] | Commercial, Secured by Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	8,388	9,313
Greater Than 89 Days Past Due [Member] | Commercial, Industrial and Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	301	42
Greater Than 89 Days Past Due [Member] | Leases [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	81	153
Greater Than 89 Days Past Due [Member] | Real Estate - Residential Mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	3,295	5,330
Greater Than 89 Days Past Due [Member] | Real Estate-Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,472	1,472
Greater Than 89 Days Past Due [Member] | Home Equity and Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 1,292	$ 2,049

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, 2017	Dec. 31, 2016
Financing Receivable, Impaired [Line Items]
Recorded Investment in Impaired Loans	$ 25,422	$ 25,285
Contractual Unpaid Principal Balance	26,289	27,356
Related Allowance	423	529
Average Investment in Impaired Loans	24,332	26,675
Interest Income Recognized	336	648
Commercial, Secured by Real Estate [Member]
Financing Receivable, Impaired [Line Items]
Loans without related allowance, Recorded Investment in Impaired Loans	14,806	12,764
Loans with related allowance, Recorded Investment in Impaired Loans	5,022	5,860
Recorded Investment in Impaired Loans	19,828	18,624
Loans without related allowance, Contractual Unpaid Principal Balance	15,180	13,195
Loans with related allowance, Contractual Unpaid Principal Balance	5,342	6,142
Contractual Unpaid Principal Balance	20,522	19,337
Related Allowance	276	392
Loans without related allowance, Average Investment in Impaired Loans	13,909	13,631
Loans with related allowance, Average Investment in Impaired Loans	4,913	6,549
Average Investment in Impaired Loans	18,822	20,180
Loans without related allowance, Interest Income Recognized	148	229
Loans with related allowance, Interest Income Recognized	117	273
Interest Income Recognized	265	502
Commercial, Industrial and Other [Member]
Financing Receivable, Impaired [Line Items]
Loans without related allowance, Recorded Investment in Impaired Loans	568	603
Loans with related allowance, Recorded Investment in Impaired Loans	431	349
Recorded Investment in Impaired Loans	999	952
Loans without related allowance, Contractual Unpaid Principal Balance	568	603
Loans with related allowance, Contractual Unpaid Principal Balance	431	349
Contractual Unpaid Principal Balance	999	952
Related Allowance	14	12
Loans without related allowance, Average Investment in Impaired Loans	568	1,109
Loans with related allowance, Average Investment in Impaired Loans	402	360
Average Investment in Impaired Loans	970	1,469
Loans without related allowance, Interest Income Recognized	11	24
Loans with related allowance, Interest Income Recognized	9	17
Interest Income Recognized	20	41
Leases [Member]
Financing Receivable, Impaired [Line Items]
Loans with related allowance, Average Investment in Impaired Loans		1
Average Investment in Impaired Loans		1
Real Estate - Residential Mortgage [Member]
Financing Receivable, Impaired [Line Items]
Loans without related allowance, Recorded Investment in Impaired Loans	970	1,880
Loans with related allowance, Recorded Investment in Impaired Loans	1,005	1,031
Recorded Investment in Impaired Loans	1,975	2,911
Loans without related allowance, Contractual Unpaid Principal Balance	987	3,146
Loans with related allowance, Contractual Unpaid Principal Balance	1,134	1,100
Contractual Unpaid Principal Balance	2,121	4,246
Related Allowance	34	31
Loans without related allowance, Average Investment in Impaired Loans	903	2,430
Loans with related allowance, Average Investment in Impaired Loans	1,015	1,011
Average Investment in Impaired Loans	1,918	3,441
Loans without related allowance, Interest Income Recognized	8	16
Loans with related allowance, Interest Income Recognized	15	30
Interest Income Recognized	23	46
Real Estate-Construction [Member]
Financing Receivable, Impaired [Line Items]
Loans without related allowance, Recorded Investment in Impaired Loans	1,472	1,471
Recorded Investment in Impaired Loans	1,472	1,471
Loans without related allowance, Contractual Unpaid Principal Balance	1,472	1,471
Contractual Unpaid Principal Balance	1,472	1,471
Loans without related allowance, Average Investment in Impaired Loans	1,472	12
Average Investment in Impaired Loans	1,472	12
Home Equity and Consumer [Member]
Financing Receivable, Impaired [Line Items]
Loans without related allowance, Recorded Investment in Impaired Loans		139
Loans with related allowance, Recorded Investment in Impaired Loans	1,148	1,188
Recorded Investment in Impaired Loans	1,148	1,327
Loans without related allowance, Contractual Unpaid Principal Balance		139
Loans with related allowance, Contractual Unpaid Principal Balance	1,175	1,211
Contractual Unpaid Principal Balance	1,175	1,350
Related Allowance	99	94
Loans without related allowance, Average Investment in Impaired Loans		388
Loans with related allowance, Average Investment in Impaired Loans	1,150	1,184
Average Investment in Impaired Loans	1,150	1,572
Loans with related allowance, Interest Income Recognized	28	59
Interest Income Recognized	$ 28	$ 59

XML

Loans, Leases and Other Real Estate - Company's Commercial Loan Portfolio (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Financing Receivable, Recorded Investment [Line Items]
Total loans	$ 4,017,908	$ 3,839,353
Commercial, Secured by Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	2,725,418	2,556,601
Commercial, Secured by Real Estate [Member] | Pass 3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	84,407	82,102
Commercial, Secured by Real Estate [Member] | Pass 4 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	821,819	729,281
Commercial, Secured by Real Estate [Member] | Pass 5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	1,700,154	1,615,331
Commercial, Secured by Real Estate [Member] | Watch [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	58,427	68,372
Commercial, Secured by Real Estate [Member] | Other Assets Especially Mentioned [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	31,163	33,015
Commercial, Secured by Real Estate [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	29,448	28,500
Commercial, Industrial and Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	352,977	350,228
Commercial, Industrial and Other [Member] | Pass 1 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	448	1,449
Commercial, Industrial and Other [Member] | Pass 2 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	29,901	26,743
Commercial, Industrial and Other [Member] | Pass 3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	35,124	36,644
Commercial, Industrial and Other [Member] | Pass 4 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	129,845	135,702
Commercial, Industrial and Other [Member] | Pass 5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	131,751	129,366
Commercial, Industrial and Other [Member] | Watch [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	11,047	6,395
Commercial, Industrial and Other [Member] | Other Assets Especially Mentioned [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	9,474	5,242
Commercial, Industrial and Other [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	5,387	8,687
Real Estate-Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	230,178	211,109
Real Estate-Construction [Member] | Pass 4 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	8,800	28,177
Real Estate-Construction [Member] | Pass 5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	218,054	175,595
Real Estate-Construction [Member] | Watch [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	698	1,223
Real Estate-Construction [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	$ 2,626	$ 6,114

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, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Dec. 31, 2016
Financing Receivable, Recorded Investment, Past Due [Line Items]
Beginning Balance	$ 31,590	$ 30,553	$ 31,245	$ 30,874
Charge-offs	(870)	(1,045)	(2,230)	(2,588)
Recoveries	276	149	763	296
Provision	1,827	1,010	3,045	2,085
Ending Balance	32,823	30,667	32,823	30,667
Ending Balance: Individually evaluated for impairment					$ 25,422	$ 25,285
Ending Balance: Collectively evaluated for impairment					4,028,112	3,847,202
Total Loans and Leases					4,054,276	3,873,895
Ending Balance: Individually evaluated for impairment					423	529
Ending Balance: Collectively evaluated for impairment					32,400	30,716
Ending Balance	31,590	30,553	32,823	30,667	32,823	31,245
Loans Acquired with Deteriorated Credit Quality [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Ending Balance: Loans acquired with deteriorated credit quality					742	1,408
Commercial, Secured by Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Beginning Balance	22,083	20,077	21,223	20,223
Charge-offs	(83)	(139)	(303)	(274)
Recoveries	145	26	364	81
Provision	1,199	395	2,060	329
Ending Balance	23,344	20,359	23,344	20,359
Total Loans and Leases					2,725,418	2,556,601
Ending Balance: Individually evaluated for impairment					276	392
Ending Balance: Collectively evaluated for impairment					23,068	20,831
Ending Balance	22,083	20,077	23,344	20,359	23,344	21,223
Commercial, Secured by Real Estate [Member] | Loans and Leases [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Ending Balance: Individually evaluated for impairment					19,828	18,624
Ending Balance: Collectively evaluated for impairment					2,704,863	2,536,858
Total Loans and Leases					2,725,418	2,556,601
Commercial, Secured by Real Estate [Member] | Loans and Leases [Member] | Loans Acquired with Deteriorated Credit Quality [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Ending Balance: Loans acquired with deteriorated credit quality					727	1,119
Commercial, Industrial and Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Beginning Balance	1,792	2,597	1,723	2,637
Charge-offs	(71)	(171)	(234)	(796)
Recoveries	27	34	122	76
Provision	(60)	(248)	77	295
Ending Balance	1,688	2,212	1,688	2,212
Total Loans and Leases					352,977	350,228
Ending Balance: Individually evaluated for impairment					14	12
Ending Balance: Collectively evaluated for impairment					1,674	1,711
Ending Balance	1,792	2,597	1,688	2,212	1,688	1,723
Commercial, Industrial and Other [Member] | Loans and Leases [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Ending Balance: Individually evaluated for impairment					999	952
Ending Balance: Collectively evaluated for impairment					351,971	349,001
Total Loans and Leases					352,977	350,228
Commercial, Industrial and Other [Member] | Loans and Leases [Member] | Loans Acquired with Deteriorated Credit Quality [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Ending Balance: Loans acquired with deteriorated credit quality					7	275
Leases [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Beginning Balance	502	588	548	460
Charge-offs	(120)	(205)	(163)	(275)
Recoveries	28	21	32	22
Provision	119	220	112	417
Ending Balance	529	624	529	624
Total Loans and Leases					70,295	67,016
Ending Balance: Collectively evaluated for impairment					529	548
Ending Balance	502	588	529	624	529	548
Leases [Member] | Loans and Leases [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Ending Balance: Collectively evaluated for impairment					70,295	67,016
Total Loans and Leases					70,295	67,016
Real Estate - Residential Mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Beginning Balance	1,825	2,266	1,964	2,588
Charge-offs	(169)	(213)	(310)	(306)
Recoveries		1		4
Provision	98	110	100	(122)
Ending Balance	1,754	2,164	1,754	2,164
Total Loans and Leases					337,765	349,581
Ending Balance: Individually evaluated for impairment					34	31
Ending Balance: Collectively evaluated for impairment					1,720	1,933
Ending Balance	1,825	2,266	1,754	2,164	1,754	1,964
Real Estate - Residential Mortgage [Member] | Loans and Leases [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Ending Balance: Individually evaluated for impairment					1,975	2,911
Ending Balance: Collectively evaluated for impairment					335,790	346,670
Total Loans and Leases					337,765	349,581
Real Estate-Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Beginning Balance	2,378	1,504	2,352	1,591
Charge-offs			(609)
Recoveries	5		20
Provision	213	284	833	197
Ending Balance	2,596	1,788	2,596	1,788
Total Loans and Leases					230,178	211,109
Ending Balance: Collectively evaluated for impairment					2,596	2,352
Ending Balance	2,378	1,504	2,596	1,788	2,596	2,352
Real Estate-Construction [Member] | Loans and Leases [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Ending Balance: Individually evaluated for impairment					1,472	1,471
Ending Balance: Collectively evaluated for impairment					228,706	209,638
Total Loans and Leases					230,178	211,109
Home Equity and Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Beginning Balance	3,010	3,521	3,435	3,375
Charge-offs	(427)	(317)	(611)	(937)
Recoveries	71	67	225	113
Provision	258	249	(137)	969
Ending Balance	2,912	3,520	2,912	3,520
Ending Balance: Individually evaluated for impairment					1,148	1,327
Ending Balance: Collectively evaluated for impairment					336,487	338,019
Total Loans and Leases					337,643	339,360
Ending Balance: Individually evaluated for impairment					99	94
Ending Balance: Collectively evaluated for impairment					2,813	3,341
Ending Balance	$ 3,010	$ 3,521	$ 2,912	$ 3,520	2,912	3,435
Home Equity and Consumer [Member] | Loans Acquired with Deteriorated Credit Quality [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Ending Balance: Loans acquired with deteriorated credit quality					$ 8	$ 14

XML

Loans, Leases and Other Real Estate - Summary of Restructured Loans (Detail) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2017 USD ($) Contract	Jun. 30, 2017 USD ($) Contract	Jun. 30, 2016 USD ($) Contract
Financing Receivable, Modifications [Line Items]
Number of Contracts | Contract	4	6	3
Pre-Modification Outstanding Recorded Investment	$ 283	$ 3,162	$ 285
Post-Modification Outstanding Recorded Investment	$ 283	$ 3,162	$ 285
Commercial, Secured by Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | Contract	2	4
Pre-Modification Outstanding Recorded Investment	$ 159	$ 3,038
Post-Modification Outstanding Recorded Investment	$ 159	$ 3,038
Commercial, Industrial and Other [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | Contract	2	2
Pre-Modification Outstanding Recorded Investment	$ 124	$ 124
Post-Modification Outstanding Recorded Investment	$ 124	$ 124
Home Equity and Consumer [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | Contract			3
Pre-Modification Outstanding Recorded Investment			$ 285
Post-Modification Outstanding Recorded Investment			$ 285

XML

Loans, Leases and Other Real Estate - Summary of Restructured Loans within Previous 12 Months that have Subsequently Defaulted (Detail) $ in Thousands	6 Months Ended
	Jun. 30, 2017 USD ($) Contract	Jun. 30, 2016 USD ($) Contract
Financing Receivable, Modifications [Line Items]
Number of Contracts | Contract	1	1
Recorded Investment | $	$ 254	$ 162
Real Estate - Residential Mortgage [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | Contract	1
Recorded Investment | $	$ 254
Home Equity and Consumer [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | Contract		1
Recorded Investment | $		$ 162

XML

Derivatives - Additional Information (Detail)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($) Derivative	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($) Derivative	Jun. 30, 2018 USD ($)	Dec. 31, 2016 USD ($)
Derivative [Line Items]
Available for sale securities pledged for collateral	$ 7,500,000		$ 7,500,000			$ 7,500,000
Interest expense	$ 5,791,000	$ 3,935,000	$ 11,264,000	$ 7,656,000
Scenario, Forecast [Member] | Reclassification Out of Accumulated Other Comprehensive Income [Member]
Derivative [Line Items]
Interest expense					$ 60,000
Cash Flow Hedging [Member] | Interest Rate Swaps [Member]
Derivative [Line Items]
Number of derivatives | Derivative		2		2
Notional amount		$ 30,000,000		$ 30,000,000
Average interest rate		1.10%		1.10%
Variable rate basis			3 month LIBOR
Amount of ineffective hedges			$ 0
Interest expense			$ 4,000

XML

Derivatives - Summary Information Regarding Derivatives (Detail) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
3rd Party Interest Rate Swaps [Member]
Derivative [Line Items]
Derivatives, Asset Notional Amount	$ 87,852,000
Derivatives, Liability Notional Amount		$ 129,252,000
Derivatives, Average Maturity (Years)	9 years 4 months 24 days	10 years 10 months 25 days
Derivatives, Weighted Average Rate Fixed	3.78%	4.03%
Derivatives, Weighted Average Variable Rate, description	1 Mo. LIBOR + 2.12	1 Mo. LIBOR + 2.10
Derivatives, Weighted Average Variable Rate	2.12%	2.10%
Derivatives, Fair Value	$ 2,989,000	$ 2,345,000
Customer Interest Rate Swaps [Member]
Derivative [Line Items]
Derivatives, Asset Notional Amount	$ 98,651,000	$ 129,252,000
Derivatives, Average Maturity (Years)	11 years 3 months 19 days	10 years 10 months 25 days
Derivatives, Weighted Average Rate Fixed	4.64%	4.03%
Derivatives, Weighted Average Variable Rate, description	1 Mo. LIBOR + 2.19	1 Mo. LIBOR + 2.10
Derivatives, Weighted Average Variable Rate	2.19%	2.10%
Derivatives, Fair Value	$ 2,522,000	$ (2,345,000)
Interest Rate Swap Cash Flow Hedge [Member]
Derivative [Line Items]
Derivatives, Asset Notional Amount	$ 30,000,000	$ 30,000,000
Derivatives, Average Maturity (Years)	4 years	4 years 6 months
Derivatives, Weighted Average Rate Fixed	1.10%	1.10%
Derivatives, Weighted Average Variable Rate, description	3 Mo. LIBOR	3 Mo. LIBOR
Derivatives, Fair Value	$ 868,000	$ 1,033,000
Customer Interest Rate Swaps [Member]
Derivative [Line Items]
Derivatives, Liability Notional Amount	$ 87,852,000
Derivatives, Average Maturity (Years)	9 years 4 months 24 days
Derivatives, Weighted Average Rate Fixed	3.78%
Derivatives, Weighted Average Variable Rate, description	1 Mo. LIBOR + 2.12
Derivatives, Weighted Average Variable Rate	2.12%
Derivatives, Fair Value	$ (2,989,000)
3rd Party Interest Rate Swaps [Member]
Derivative [Line Items]
Derivatives, Liability Notional Amount	$ 98,651,000
Derivatives, Average Maturity (Years)	11 years 3 months 19 days
Derivatives, Weighted Average Rate Fixed	4.64%
Derivatives, Weighted Average Variable Rate, description	1 Mo. LIBOR + 2.19
Derivatives, Weighted Average Variable Rate	2.19%
Derivatives, Fair Value	$ (2,522,000)

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Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Goodwill And Intangible Assets [Line Items]
Goodwill	$ 136,433	$ 135,747
Core Deposits [Member]
Goodwill And Intangible Assets [Line Items]
Core deposit intangible	$ 2,600	$ 3,300

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Goodwill and Intangible Assets - Schedule of Estimated Future Amortization Expense (Detail) $ in Thousands	Jun. 30, 2017 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2017	$ 268
2018	594
2019	504
2020	415
2021	326
2022	$ 236

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Borrowings - Additional Information (Detail) - USD ($)	3 Months Ended	6 Months Ended
	Mar. 31, 2017	Jun. 30, 2017
Debt Instrument [Line Items]
Federal funds purchased		$ 91,600,000
Securities sold under agreements to repurchase		26,900,000
Securities sold under agreement to repurchase maturities due		$ 20,000,000
Borrowings maturity period		1 year
Repayment of borrowings	$ 20,000,000
Long-term debt prepayment fees	2,200,000	$ 2,828,000
Securities Sold under Agreements to Repurchase [Member]
Debt Instrument [Line Items]
Pledged securities		$ 54,900,000
Federal Home Loan Bank of New York [Member]
Debt Instrument [Line Items]
Long-term debt prepayment fees	638,000
Repayment of borrowings from the Federal Home Loan Bank	$ 34,000,000

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Share-Based Compensation - Additional Information (Detail) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 1,566,000	$ 1,107,000
Stock options exercised	31,769
Aggregate intrinsic value of stock options exercised	$ 318,000
Cash receipts due to exercise of stock options	$ 313,000
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Weighted average price	$ 18.20
Granted, Number of shares	13,176
Restricted Stock [Member] | 2009 Equity Compensation Program [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 1,600,000	$ 1,100,000
Unrecognized compensation cost	$ 149,000
Unrecognized compensation expense, period of recognition	7 months 2 days
Restricted Stock [Member] | 2009 Equity Compensation Program [Member] | Non-Employee Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options granted	13,176	23,952
Granted, Weighted average price	$ 18.20	$ 10.02
Share-based compensation expense	$ 240,000	$ 240,000
Vesting period	1 year	1 year
RSUs [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Weighted average price	$ 19.96
Granted, Number of shares	117,673
RSUs [Member] | 2009 Equity Compensation Program [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost	$ 2,210,000
Unrecognized compensation expense, period of recognition	1 year 6 months 10 days
Granted, Weighted average price	$ 19.96	$ 10.06
Share-based compensation expense	$ 783,000	$ 504,000
Vesting period	3 years	3 years
Granted, Number of shares	117,673	150,226
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
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options exercised	31,769
Stock Options [Member] | 2009 Equity Compensation Program [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost	$ 0

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Share-Based Compensation - Summary of Company's Restricted Stock Activity (Detail)	6 Months Ended
	Jun. 30, 2017 $ / shares shares
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding, Number of shares, Beginning balance | shares	42,875
Granted, Number of shares | shares	13,176
Vested, Number of shares | shares	(32,901)
Forfeited, Number of shares | shares	(48)
Outstanding, Number of shares, Ending balance | shares	23,102
Outstanding, Weighted average price, Beginning balance | $ / shares	$ 9.72
Granted, Weighted average price | $ / shares	18.20
Vested, Weighted average price | $ / shares	9.79
Forfeited, Weighted average price | $ / shares	9.39
Outstanding, Weighted average price, Ending balance | $ / shares	$ 14.46
RSUs [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding, Number of shares, Beginning balance | shares	302,344
Granted, Number of shares | shares	117,673
Vested, Number of shares | shares	(148,584)
Forfeited, Number of shares | shares	(8,995)
Outstanding, Number of shares, Ending balance | shares	262,438
Outstanding, Weighted average price, Beginning balance | $ / shares	$ 10.76
Granted, Weighted average price | $ / shares	19.96
Vested, Weighted average price | $ / shares	13.01
Forfeited, Weighted average price | $ / shares	12.58
Outstanding, Weighted average price, Ending balance | $ / shares	$ 13.55

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Share-Based Compensation - Option Activity under the Company's Stock Option Plans (Detail) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Outstanding, Number of shares, Beginning balance	135,250
Granted, Number of shares	0
Exercised, Number of shares	(31,769)
Forfeited, Number of shares	0
Expired, Number of shares	0
Outstanding, Number of shares, Ending balance	103,481	135,250
Options exercisable, Number of shares, Ending balance	103,481
Outstanding, Weighted average exercise price, Beginning balance	$ 8.79
Granted, Weighted average exercise price	0
Exercised, Weighted average exercise price	9.84
Forfeited, Weighted average exercise price	0
Expired, Weighted average exercise price	0
Outstanding, Weighted average exercise price, Ending balance	8.47	$ 8.79
Options exercisable, Weighted average exercise price, Ending balance	$ 8.47
Outstanding, Weighted average remaining contractual term (in years), Ending balance	4 years 9 months 11 days	4 years 2 months 5 days
Options exercisable, Weighted average remaining contractual term (in years), Ending balance	4 years 9 months 11 days
Outstanding, Aggregate intrinsic value	$ 1,076,479	$ 1,450,533
Options exercisable at year end, Aggregate intrinsic value	$ 1,076,479

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Comprehensive Income - Components of Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Net unrealized gains (losses) on available for sale securities
Net unrealized holding gains arising during period, Before Tax Amount	$ 1,661	$ 2,684	$ 2,845	$ 9,247
Reclassification adjustment for net gains (losses) arising during the period, Before Tax Amount	15		(2,524)	(370)
Net unrealized gains, Before Tax Amount	1,676	2,684	321	8,877
Unrealized losses on derivatives, Before Tax Amount	(186)	(193)	(165)	(193)
Change in minimum pension liability, Before Tax Amount		8		72
Other comprehensive income, net, Before Tax Amount	1,490	2,499	156	8,756
Net unrealized holding gains arising during period, Tax Benefit (Expense)	(632)	(987)	(1,082)	(3,393)
Reclassification adjustment for net gains(losses) arising during the period, Tax Benefit (Expense)	(6)		884	137
Net unrealized gains (losses), Tax Benefit (Expense)	(638)	(987)	(198)	(3,256)
Unrealized losses on derivatives, Tax Benefit (Expense)	65	67	58	67
Change in minimum pension liability, Tax Benefit (Expense)		(2)		(28)
Other comprehensive income, net, Tax Benefit (Expense)	(573)	(922)	(140)	(3,217)
Net unrealized holding gains arising during period, Net of Tax Amount	1,029	1,697	1,763	5,854
Reclassification adjustment for net gains(losses) arising during the period, Net of Tax Amount	9		(1,640)	(233)
Net unrealized gains, Net of Tax Amount	1,038	1,697	123	5,621
Unrealized losses on derivatives, Net of Tax Amount	(121)	(126)	(107)	(126)
Change in minimum pension liability, Net of Tax Amount		6		44
Other comprehensive income	$ 917	$ 1,577	$ 16	$ 5,539

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Comprehensive Income - Summary of Changes in Components of Other Comprehensive Income, Net of Tax (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Accumulated Other Comprehensive Income (Loss) [Line Items]
BALANCE			$ 550,044	$ 400,516
Other comprehensive income	$ 917	$ 1,577	16	5,539
BALANCE	567,545	454,934	567,545	454,934
Unrealized Gains (Losses) on Available-for-Sale Securities [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
BALANCE	(1,032)	5,078	(117)	1,154
Other comprehensive income before classifications	1,029	1,697	1,763	5,854
Amounts reclassified from accumulated other comprehensive income	9		(1,640)	(233)
Other comprehensive income	1,038	1,697	123	5,621
BALANCE	6	6,775	6	6,775
Unrealized Gains on Derivatives [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
BALANCE	686		672
Other comprehensive income before classifications	(121)	(126)	(107)	(126)
Other comprehensive income	(121)	(126)	(107)	(126)
BALANCE	565	(126)	565	(126)
Pension Items [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
BALANCE	38	34	38	(4)
Other comprehensive income before classifications		6		44
Other comprehensive income		6		44
BALANCE	38	40	38	40
Accumulated Other Comprehensive Income (Loss) [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
BALANCE	(308)	5,112	593	1,150
Other comprehensive income before classifications	908	1,577	1,656	5,772
Amounts reclassified from accumulated other comprehensive income	9		(1,640)	(233)
Other comprehensive income	917	1,577	16	5,539
BALANCE	$ 609	$ 6,689	$ 609	$ 6,689

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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, 2017	Dec. 31, 2016
Assets:
Investment securities, available for sale	$ 673,164	$ 606,704
US Treasury and Government Agencies [Member]
Assets:
Investment securities, available for sale	142,444	117,359
Obligations of States and Political Subdivisions [Member]
Assets:
Investment securities, available for sale	54,274	48,326
Equity Securities [Member]
Assets:
Investment securities, available for sale	17,609	21,882
Fair Value, Measurements, Recurring [Member]
Assets:
Investment securities, available for sale	673,164	606,704
Total Assets	679,543	610,082
Liabilities:
Total Liabilities	5,511	2,345
Fair Value, Measurements, Recurring [Member] | Interest Rate Derivatives [Member]
Assets:
Derivative assets	6,379	3,378
Liabilities:
Derivative liabilities	5,511	2,345
Fair Value, Measurements, Recurring [Member] | US Treasury and Government Agencies [Member]
Assets:
Investment securities, available for sale	142,444	117,359
Fair Value, Measurements, Recurring [Member] | Mortgage Backed Securities [Member]
Assets:
Investment securities, available for sale	453,742	413,725
Fair Value, Measurements, Recurring [Member] | Obligations of States and Political Subdivisions [Member]
Assets:
Investment securities, available for sale	54,274	48,326
Fair Value, Measurements, Recurring [Member] | Other Debt Securities [Member]
Assets:
Investment securities, available for sale	5,095	5,412
Fair Value, Measurements, Recurring [Member] | Equity Securities [Member]
Assets:
Investment securities, available for sale	17,609	21,882
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Recurring [Member]
Assets:
Investment securities, available for sale	10,418	13,679
Total Assets	10,418	13,679
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	5,696	5,931
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	4,722	7,748
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member]
Assets:
Investment securities, available for sale	662,746	593,025
Total Assets	669,125	596,403
Liabilities:
Total Liabilities	5,511	2,345
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | Interest Rate Derivatives [Member]
Assets:
Derivative assets	6,379	3,378
Liabilities:
Derivative liabilities	5,511	2,345
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | US Treasury and Government Agencies [Member]
Assets:
Investment securities, available for sale	136,748	111,428
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | Mortgage Backed Securities [Member]
Assets:
Investment securities, available for sale	453,742	413,725
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	54,274	48,326
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | Other Debt Securities [Member]
Assets:
Investment securities, available for sale	5,095	5,412
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | Equity Securities [Member]
Assets:
Investment securities, available for sale	$ 12,887	$ 14,134

XML

Estimated Fair Value of Financial Instruments and Fair Value Measurement - Fair Value of Assets Measured on Non-recurring Basis (Detail) - Fair Value, Measurements, Non-recurring [Member] - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans and leases	$ 25,422	$ 25,285
Loans held for sale	877	1,742
Other real estate owned and other repossessed assets	1,415	1,072
Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans held for sale	877	1,742
Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans and leases	25,422	25,285
Other real estate owned and other repossessed assets	$ 1,415	$ 1,072

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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, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term municipal bond	$ 27,500
Subordinate debt	104,842	$ 104,784
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	5.00%
Maximum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rates	11.00%
Capitalization rates	10.00%

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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, 2017	Dec. 31, 2016
Financial Assets:
Investment securities held to maturity, Fair Value	$ 138,619	$ 146,990
Investment securities held to maturity, Carrying Value	138,468	147,614
Federal Home Loan Bank and other membership bank stocks ,	18,899	15,099
Federal Home Loan Bank and other membership bank stocks, Carrying Value	18,899	15,099
Loans and leases, net Fair Value	4,019,534	3,832,465
Loans and leases, net Carrying Value	4,017,908	3,839,353
Financial Liabilities:
Certificates of deposit, Fair Value	564,084	543,399
Certificates of deposit, Carrying value	566,245	544,908
Other borrowings, Fair Value	312,136	264,586
Other borrowings, Carrying value	312,251	260,866
Subordinated debentures, Fair Value	95,588	94,476
Subordinated debentures, Carrying Value	104,842	104,784
Significant Other Observable Inputs (Level 2) [Member]
Financial Assets:
Investment securities held to maturity, Fair Value	110,139	111,403
Federal Home Loan Bank and other membership bank stocks ,	18,899	15,099
Financial Liabilities:
Certificates of deposit, Fair Value	564,084	543,399
Other borrowings, Fair Value	312,136	264,586
Significant Unobservable Inputs (Level 3) [Member]
Financial Assets:
Investment securities held to maturity, Fair Value	28,480	35,587
Loans and leases, net Fair Value	4,019,534	3,832,465
Financial Liabilities:
Subordinated debentures, Fair Value	$ 95,588	$ 94,476

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Recent Accounting Pronouncements - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2017 USD ($)
Accounting Policies [Abstract]
Excess tax benefits of stock based compensation	$ 582,000