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Lakeland Bancorp Inc. Reports Operating Results (10-Q)

November 09, 2011 | About:
10qk

10qk

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Lakeland Bancorp Inc. (LBAI) filed Quarterly Report for the period ended 2011-09-30.

Lakeland Bancorp Inc. has a market cap of $233.6 million; its shares were traded at around $9.16 with a P/E ratio of 13.1 and P/S ratio of 1.6. The dividend yield of Lakeland Bancorp Inc. stocks is 2.6%.

Highlight of Business Operations:

Net income for the third quarter of 2011 was $5.1 million, compared to net income of $4.9 million for the same period in 2010. Net income available to common shareholders was $4.8 million compared to $3.3 million for the same period last year. Dividends on preferred stock and accretion decreased to $293,000 for the third quarter of 2011 from $1.6 million 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 $0.19 for the third quarter of 2011, compared to diluted earnings per share of $0.13 for the same period last year. During the third quarter of 2010 the Company repaid $20.0 million in preferred stock to the U.S. Department of the Treasury under the CPP. In doing so, a non-cash charge of $898,000 was recorded, reflecting the acceleration of the preferred stock discount accretion. The non-cash charge affected diluted earnings per share in the third quarter of 2010 by $0.04.

Interest income on a tax equivalent basis decreased from $31.6 million in the third quarter of 2010 to $29.6 million in the third quarter of 2011, a decrease of $2.0 million, or 6%. The decrease in interest income was due primarily to a 30 basis point decrease in the yield on interest earning assets, as a result of increased loan modifications and refinances along with lower yields on new loans and investments. The yield on average loans and leases at 5.20% in the third quarter of 2011 was 35 basis points lower than the third quarter of 2010. The yield on average taxable and tax exempt investment securities decreased by 32 basis points and 48 basis points, respectively, compared to the third quarter of 2010. Average loans and leases at $1.98 billion increased $6.4 million from the third quarter of 2010, while average investment securities at $518.2 million increased $11.7 million.

Net income for the first nine months of 2011 was $14.7 million, compared to net income of $14.2 million for the same period in 2010. Net income available to common shareholders was $12.9 million compared to $10.8 million for the same period last year. Diluted earnings per share was $0.50 for the first nine months of 2011, compared to diluted earnings per share of $0.43 per share for the same period last year. Dividends on preferred stock and accretion declined from $3.4 million for the first nine months of 2010 to $1.9 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 compared to a charge of $898,000 in 2010 reflecting the acceleration of the preferred stock discount accretion.

Net interest income on a tax equivalent basis for the first nine months of 2011 was $74.2 million, which was $1.2 million less than the $75.3 million earned in the first nine months of 2010. The net interest margin decreased from 3.96% in the first nine months of 2010 to 3.89% in the first nine months of 2011, primarily as a result a 33 basis point decline in the yield on interest-earning assets, which was partially offset by a 28 basis point reduction in the cost of interest-bearing liabilities. The net interest spread as a result declined 5 basis points to 3.71%. Although the net interest spread declined, the decline was mitigated by an increase in income earned on free funds resulting from an increase in average non-interest bearing deposits of $63.9 million. The components of net interest income will be discussed in greater detail below.

Interest income on a tax equivalent basis decreased from $95.5 million in the first nine months of 2010 to $89.6 million in the first nine months of 2011, a decrease of $5.9 million, or 6%. The decrease in interest income was due to a 33 basis point decrease in the yield on interest earning assets, as a result of lower yields on new loans and investments, along with a lower percentage of earning assets being deployed in loans and leases. The yield on average loans and leases at 5.30% in the first nine months of 2011 was 33 basis points lower than the same period in 2010. The yield on average taxable and tax exempt investment securities decreased by 42 basis points and 56 basis points, respectively, in the first nine months of 2011. Average loans and leases at $1.99 billion decreased $6.3 million from the first nine months of 2010, while average investment securities at $531.1 million increased $45.3 million. Loans and leases typically earn higher yields than investment securities.

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