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Lakeland Bancorp Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 9, 2011 10:07AM

Lakeland Bancorp Inc. (LBAI) filed Quarterly Report for the period ended 2011-06-30. Lakeland Bancorp Inc. has a market cap of $203.9 million; its shares were traded at around $8.23 with a P/E ratio of 12.4 and P/S ratio of 1.4. The dividend yield of Lakeland Bancorp Inc. stocks is 3%.



Highlight of Business Operations:

Net income for the second quarter of 2011 was $4.9 million, compared to net income of $4.8 million for the same period in 2010. Net income available to common shareholders was $4.6 million compared to net income of $3.8 million for the same period last year. Dividends on preferred stock and accretion decreased to $294,000 for the second quarter of 2011 from $904,000 for the same period last year. The lower dividends and accretion reflect a total of $40.0 million in repayments to the U.S. Department of the Treasury to repurchase preferred stock under the CPP. Diluted earnings per share was $0.18 for the second quarter of 2011, compared to diluted earnings per share of $0.15 for the same period last year.

Total interest expense decreased from $6.7 million in the second quarter of 2010 to $5.2 million in the second quarter of 2011, a decrease of $1.5 million, or 22%. The cost of average interest-bearing liabilities decreased from 1.25% in the second quarter of 2010 to 0.99% in 2011. The decrease in yield was due to the continuing low 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 64% in the second quarter of 2010 to 67% in the second quarter of 2011. Time deposits as a percent of interest-bearing liabilities declined from 22% in the second quarter of 2010 to 20% in the second quarter of 2011 as customers preferred to keep their deposits in short-term transaction accounts in the current low rate environment. Average borrowings decreased from $281.3 million in the second quarter of 2010 to $271.4 million in 2011.

In the second quarter of 2011, a $5.4 million provision for loan and lease losses was recorded, which was $405,000 greater than the provision for the same period last year. During the second quarter of 2011, the Company charged off loans of $6.9 million and recovered $1.6 million in previously charged off loans and leases compared to $4.9 million and $763,000, respectively, during the same period in 2010. For more information regarding the determination of the provision, see “Risk Elements” below.

Noninterest income increased $157,000, or 3%, to $4.7 million in the second quarter of 2011 compared to the second quarter of 2010. The increase in noninterest income was due primarily to gains on investment securities, which were $444,000 in the second quarter of 2011 compared to no gains in the second quarter of 2010. Commissions and fees at $1.0 million increased by $207,000, or 25%, primarily due to a $125,000, or 52%, increase in investment commission income. Gains on leasing related assets at $230,000 decreased by $325,000, reflecting a smaller portfolio, while other income at $66,000 was $214,000 lower than the same period last year, as the Company recorded a gain of $181,000 on the sale of a branch office building in the second quarter of 2010. Income on bank owned life insurance at $359,000 was $26,000 less than the same period last year primarily as a result of decreases in rates for the underlying policies.

Noninterest expense totaling $16.7 million decreased $375,000, or 2%, in the second quarter of 2011 from the second quarter of 2010. The decrease in noninterest expense in this quarter was due primarily to a $369,000 reduction in FDIC expenses as a result of changes made by the FDIC in the method of calculating assessment rates. Additionally, collection expense totaling $60,000 was $99,000 lower than the same period in 2010 due primarily to a reduction in leasing related costs. The Company’s efficiency ratio, a non-GAAP financial measure, was 56.2% in the second quarter of 2011, compared to 55.9% 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 for the periods presented:

Net income for the first half of 2011 was $9.6 million, compared to net income of $9.3 million for the same period in 2010. Net income available to common shareholders was $8.0 million compared to net income of $7.5 million for the same period last year. Diluted earnings per share was $0.31 for the first half of 2011, compared to diluted earnings per share of $0.30 per share for the same period last year. Dividends on preferred stock and accretion declined from $1.8 million for the first six months of 2010 to $1.6 million for the same period in 2011 reflecting repayments to the U.S. Department of the Treasury to repurchase preferred stock under the CPP. These repayments consisted of a $20.0 million repayment in August of 2010 and a $20.0 million repayment in March of 2011. Dividends on preferred stock and accretion in 2011 include a non-cash charge of $745,000 reflecting the acceleration of the preferred stock discount accretion on the $20.0 million payment in 2011.

Read the The complete Report



Stocks Discussed: LBAI,
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