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Lakeland Bancorp Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 6, 2011 08:20PM
Lakeland Bancorp Inc. (LBAI) filed Quarterly Report for the period ended 2011-03-31. Lakeland Bancorp Inc. has a market cap of $253.4 million; its shares were traded at around $9.97 with a P/E ratio of 16.1 and P/S ratio of 1.8. The dividend yield of Lakeland Bancorp Inc. stocks is 2.4%.
Highlight of Business Operations:
Net income for the first quarter of 2011 was $4.8 million, compared to net income of $4.6 million for the same period in 2010. Net income available to common shareholders was $3.5 million compared to net income of $3.7 million for the same period last year. Diluted earnings per share was $0.14 for the first quarter of 2011, compared to diluted earnings per share of $0.15 per share for the same period last year. As previously reported, the Company repaid $20.0 million of the outstanding $39.0 million in preferred stock to the U.S. Department of the Treasury under the Capital Purchase Program in the first quarter of 2011. In doing so, a non-cash charge of $745,000 was recorded, reflecting the acceleration of the preferred stock discount accretion. The effect of this non-cash charge was ($0.03) per diluted share.
In the first quarter of 2011, a $4.9 million provision for loan and lease losses was recorded, which was comparable to the provision for the same period last year. During the first quarter of 2011, the Company charged off loans of $5.7 million and recovered $1.6 million in previously charged off loans and leases compared to $4.1 million and $535,000, respectively, during the same period in 2010. For more information regarding the determination of the provision, see Risk Elements below.
Noninterest income increased $121,000, or 3%, to $4.2 million in the first quarter of 2011 compared to the first quarter of 2010. The increase in noninterest income was due primarily to gains on leasing related assets, which were $463,000 in the first quarter of 2011 compared to gains of $304,000 in the first quarter of 2010. Commissions and fees totaled $832,000 in the first quarter of 2011 and were $53,000 or 6% lower than the same period last year due primarily to a reduction in investment commission income and loan fees. Income on bank owned life insurance at $355,000 was $31,000 less than the same period last year primarily as a result of decreases in rates for the underlying policies.
Noninterest expense totaling $17.0 million increased $246,000, or 1%, in the first quarter of 2011 from the first quarter of 2010. Net occupancy expense at $1.9 million increased $116,000 compared to the first quarter of 2010 due primarily to increased snow removal costs. Stationery, supplies and postage at $365,000 in the first quarter decreased $61,000 primarily as a result of a reduction in postage expense due to the implementation of electronic statement delivery. Marketing expense totaling $615,000 increased $61,000, or 11%, compared to the first quarter of 2010 due primarily to an increase in incentives and the timing of media expenses incurred. Collection expense at $65,000 and legal expense at $295,000 decreased $83,000 and $46,000, respectively, while other real estate and repossessed asset expense at $272,000 increased $235,000. The Companys efficiency ratio, a non-GAAP financial measure, was 56.7% in the first quarter of 2011, compared to 56.9% for the same period last year reflecting continued management of expenses. 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:
Gross loans and leases, including leases held for sale, at $1.97 billion decreased by $36.8 million from December 31, 2010. The decrease in gross loans and leases is primarily due to leases at $46.1 million and residential mortgages at $394.0 million decreasing $21.1 million and $9.6 million, respectively. Additionally, construction loans declined from $70.8 million to $65.5 million, a decline of $5.1 million or 7% because repayments on construction loans have not been replaced with new construction loans due to the continued economic downturn. For more information on the loan portfolio, see Note 7 in Notes to the Consolidated Financial Statements in this Quarterly Report on Form 10-Q.
Non-performing assets increased from $44.6 million, or 1.60% of total assets, on December 31, 2010 to $50.4 million, or 1.83% of total assets, on March 31, 2011. The majority of the increase was due to real estate construction loan non-accruals, which increased $6.5 million from December, 31 2010 as a result of one loan being placed on a non-accrual status which totaled $6.6 million. Leases on non-accrual decreased $978,000 from December 31, 2010 to $5.3 million on March 31, 2011. Non-accrual leases include $4.0 million in net receivables related to one lessee who has named the Company and other unrelated parties in a complaint in connection with the leases. For more information, please see Legal Proceedings in Item 1 of Part II of this Quarterly Report on Form 10-Q. Commercial loan non-accruals at March 31, 2011 included six loan relationships with balances over $1.0 million, totaling $16.8 million, and nine loan relationships between $500,000 and $1.0 million, totaling $6.5 million.
Stocks Discussed: LBAI,