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Lakeland Bancorp Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 11, 2009 03:06PM
Lakeland Bancorp Inc. (LBAI) filed Quarterly Report for the period ended 2009-03-31. LAKELAND BANCORP INC. is a bank holding company engaged in general banking business. Lakeland Bancorp Inc. has a market cap of $200.36 million; its shares were traded at around $8.49 with a P/E ratio of 16.33 and P/S ratio of 1.24. The dividend yield of Lakeland Bancorp Inc. stocks is 4.71%. Lakeland Bancorp Inc. had an annual average earning growth of 12.3% over the past 10 years. GuruFocus rated Lakeland Bancorp Inc. the business predictability rank of 4.5-star.
Highlight of Business Operations:
Interest income on a tax equivalent basis decreased from $36.5 million in the first quarter of 2008 to $34.5 million in 2009, a decrease of $2.0 million or 6%. The decrease in interest income was due to a 71 basis point decrease in average rates earned on interest earning assets. Average loans and investment securities increased by $135.6 million and $8.2 million, respectively.
Total interest expense decreased from $15.7 million in the first quarter of 2008 to $11.3 million in the first quarter of 2009, a decrease of $4.4 million, or 28%. Average interest-bearing liabilities increased $90.4 million, but the cost of those liabilities decreased from 3.11% in 2008 to 2.15% in 2009. The decrease in liability yields reflects the decrease in short term interest rates, as the Federal Reserve Bank lowered the federal funds target rate from 2.25% at the end of the first quarter of 2008 to a range between 0% and .25% at the end of the first quarter of 2009. Lakeland lowered its deposit rates to reflect the lower interest rate environment. Average deposits increased from $1.98 billion in the first quarter of 2008 to $2.06 billion in the first quarter of 2009, an increase of $82.9 million, or 4 %. Average borrowings increased from $326.5 million in 2008 to $341.7
The provision for loan and lease losses increased to $6.4 million for the first quarter of 2009 from $1.3 million for the same period last year as a result of managements evaluation of the adequacy of the allowance for loan and lease losses. During the first quarter of 2009, the Company charged off loans of $6.5 million and recovered $680,000 in previously charged off loans compared to $587,000 and $91,000, respectively, during the same period in 2008. The higher provision for loan and lease losses in the first quarter of 2009 compared to the first quarter of 2008 reflects a higher level of non-performing loans and leases and net charge-offs. The provision in the first quarter of 2009 included $5.8 million for the Companys leases compared to $433,000 for the same period last year. For more information regarding the determination of the provision, see Risk Elements under Financial Condition.
Noninterest income increased $330,000, or 7%, from the first quarter of 2008 to the first quarter of 2009. This increase was primarily due to an increase in gain on sales of investment securities of $876,000 partially offset by a $499,000 decrease in other income. The majority of the decrease in other income can be attributed to a $452,000 decrease in gain on sales of leases. Commissions and fees decreased from $952,000 in the first quarter of 2008 to $823,000 in the first quarter of 2009 due to a decrease in loan fees.
Noninterest expense increased from $15.3 million in the first quarter of 2008 to $16.8 million in the first quarter of 2009, an increase of $1.4 million or 9%. Salaries and employee benefits expense increased $179,000 or 2% to $8.6 million in the first quarter of 2009. Net occupancy expense increased by $236,000 or 14% to $1.9 million in the first quarter of 2009 from the first quarter of 2008 due primarily to expenses incurred in two new branch offices. Marketing expense increased from $458,000 in the first quarter of 2008 to $557,000 in the first quarter of 2009 as a result of deposit promotions and new branch openings. Stationery, supplies and postage decreased from $464,000 in the first quarter of 2008 to $420,000 in the first quarter of 2009 due to a reduction in mailings. FDIC expense increased from $300,000 in the first quarter of 2008 to $900,000 in 2009 as a result of increased assessment rates. Other expenses increased by $377,000 or 15% to $2.9 million in the first quarter of 2009 primarily due to an increase in collection fees of $454,000 compared to the first quarter of 2008. The Companys efficiency ratio was 60.0% in the first quarter of 2009, compared to 59.2% for the same period last year. The efficiency ratio expresses the relationship between noninterest expense (excluding other real estate expense and core deposit amortization) to total tax-equivalent revenue (excluding gains (losses) on sales of securities).
Gross loans and leases remained the same at $2.03 billion from December 31, 2008 to March 31, 2009. Within the loan portfolio, mortgages increased $21.0 million from December 31, 2008 to March 31, 2009. Commercial loans increased $12.9 million in the first three months of 2009. Leases declined from $311.5 million on December 31, 2008 to $276.2 million on March 31, 2009. 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.
Stocks Discussed: LBAI,