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Lakeland Bancorp Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 6, 2010 01:21PM
Lakeland Bancorp Inc. (LBAI) filed Quarterly Report for the period ended 2010-06-30.
Highlight of Business Operations:
Net income for the second quarter of 2010 was $4.8 million, compared to a net loss of ($12.7) million for the same period in 2009. Net income available to common shareholders was $3.8 million compared to a net loss of ($13.6) million for the same period last year. Diluted earnings per share was $0.16 for the second quarter of 2010, compared to a loss of ($0.58) per share for the same period last year.
2010, a decrease of $4.0 million, or 38%. Average interest-bearing liabilities increased $21.4 million, but the cost of those liabilities decreased from 2.03% in 2009 to 1.25% in 2010. The decrease in yield was due to the declining rate environment along with a change in the mix of interest-bearing liabilities. Average rates paid on interest-bearing liabilities declined in all categories. Savings and interest-bearing transaction accounts as a percent of interest-bearing liabilities increased from 54% in the second quarter of 2009 to 64% in the second quarter of 2010. Time deposits as a percent of interest-bearing liabilities declined from 30% in the second quarter of 2009 to 22% in the second quarter of 2010 as customers preferred to keep their deposits in short-term transaction accounts in the current low rate environment. Average borrowings decreased from $332.3 million in 2009 to $281.3 million in 2010, as deposit growth outpaced loan and lease growth and because the Company prepaid $55.0 million of long-term debt in the fourth quarter of 2009.
During the second quarter of 2010, the Company charged off loans of $4.9 million and recovered $763,000 in previously charged off loans and leases compared to $35.7 million and $390,000, respectively, during the same period in 2009. For more information regarding the determination of the provision, see Risk Elements below.
Noninterest income increased $1.1 million or 33% to $4.6 million in the second quarter of 2010 compared to the second quarter of 2009. Included in noninterest income for the second quarter of 2009 was a $532,000 other-than-temporary impairment loss that the Company recorded on equity securities in its investment portfolio. The remainder of the increase in noninterest income is due primarily to gains on leasing related assets, which were $555,000 in the second quarter of 2010 compared to losses of $529,000 in the second quarter of 2009. In the second quarter of 2010, our gains on leasing related assets includes gains from payoffs and sales of held for sale leases, and gains on sales of other repossessed assets. In the second quarter of 2009, we recorded $585,000 in losses on sales of leasing related other repossessed assets. Other income at $280,000 was $198,000 higher than the same period last year, as the Company recorded a gain of $181,000 on the sale of a former branch office building. Partially offsetting these positive variances was service charges on deposits at $2.5 million, which decreased by $199,000, or 7%, from 2009, due to reduced overdraft fees collected. Commissions and fees at $833,000, decreased by $40,000, or 5%, from 2009, primarily due to reduced loan fees. Additionally, income on bank owned life insurance at $385,000 decreased by $433,000 as the Company received insurance proceeds of $486,000 on a bank owned life insurance policy in the second quarter of 2009.
Noninterest expense totaling $17.1 million decreased $2.5 million in the second quarter of 2010 from the second quarter of 2009. Marketing expense at $648,000 decreased $136,000, or 17%, due primarily to a reduction in media expenses. FDIC insurance expense at $964,000 decreased by $1.5 million, as the Company paid an industry-wide special FDIC assessment in the second quarter of 2009 of $1.2 million. Collection expense at $159,000 and other real estate and repossessed asset expense at $198,000 decreased $218,000, or 58%, and $467,000, or 70%, respectively, due to decreased leasing related expenses. Other real estate and other repossessed asset expense included write-downs of other repossessed assets of $661,000 in the second quarter of 2009. Legal expense at $423,000 increased $231,000 in the second quarter of 2010 compared to the same period in 2009 as a result of increased workout expenses related to non-performing loans and leases. Other expenses decreased by $787,000 to $2.2 million in the second quarter of 2010 primarily as a result of a $704,000 expense that the Company recorded in the second quarter of 2009 relating to the pretax payout to beneficiaries of the previously mentioned life insurance proceeds. The Companys efficiency ratio, a non-GAAP financial measure, was
Net income for the first half of 2010 was $9.3 million, compared to net loss of ($9.5) million for the same period in 2009. Diluted earnings per share was $0.31 for the first half of 2010, compared to a loss per share of ($0.46) in the first half of 2009. The increase in net income related to the decrease in the provision for loan and lease losses from $40.5 million in the first half of 2009 to $9.9 million in the first half of 2010.