OAK RIDGE, N.J., Jan. 25, 2024 (GLOBE NEWSWIRE) -- Lakeland Bancorp, Inc. (NASDAQ: LBAI) (the "Company"), the parent company of Lakeland Bank ("Lakeland"), reported net income of $20.1 million and earnings per diluted share ("EPS") of $0.30 for the three months ended December 31, 2023, compared to net income of $33.6 million and diluted EPS of $0.51 for the fourth quarter of 2022. For the fourth quarter of 2023, annualized return on average assets was 0.73%, annualized return on average common equity was 6.97% and annualized return on average tangible common equity was 9.23%.

For the year ended December 31, 2023, the Company reported net income of $84.7 million, a 21% decrease compared to $107.4 million for 2022, resulting in return on average assets of 0.78%, return on average common equity of 7.48%, and return on average tangible common equity of 9.94% for 2023. For 2023, the Company reported diluted EPS of $1.29 compared to diluted EPS of $1.63 for 2022.

The current year results include a $30.9 million decrease in net interest income, a decrease in noninterest income of $3.0 million, and an increase in provision for credit losses of $4.5 million offset in part by a decrease in non-interest expenses of $5.2 million. Fourth quarter 2023 results were negatively impacted by a $16.3 million, or 20%, decrease in net interest income and a $4.7 million increase in the provision for credit losses partially offset by a $2.4 million decrease in non-interest expenses compared to the fourth quarter of 2022.

Thomas Shara, Lakeland Bancorp's President and CEO commented on the yearly financial results: "Despite a challenging economic environment in 2023, we are very pleased with our continued loan growth of 6% and our continued stellar asset quality as loan charge-offs for the year were negligible. Our deposit base was resilient throughout the banking crisis which speaks to our core deposit customer focus. I want to thank all of the Lakeland associates for their incredible contributions and unwavering customer support during this uncertain period."

Regarding the announced merger with Provident Financial Services, Inc. ("Provident Financial"), Mr. Shara continued, "We are actively engaged in discussions with our regulators concerning the merger. Both Provident Financial and Lakeland have agreed to extend the merger deadline to March 31, 2024, to allow additional time to obtain the necessary regulatory approvals. We look forward to closing the transaction as soon as possible following the receipt of the approvals."

Full Year 2023 Highlights

Loans grew $477.8 million or 6% during the year with commercial real estate loans increasing $263.0 million, or 5%, and residential mortgages increasing $220.2 million, or 29%.
Net interest margin for 2023 decreased 47 basis points to 2.77% compared to 2022 due primarily to the increase in the market rate environment and the resulting movement of customers from lower rate interest-bearing transaction accounts to higher rate time deposits.

The provision for credit losses of $13.1 million for the year ended December 31, 2023 increased $4.5 million from $8.5 million for 2022. The Company recorded a charge-off of $6.6 million for subordinated debt securities issued by Signature Bank which failed in first quarter of 2023.

Net Interest Margin and Net Interest Income

Net interest margin for the three months and year ended December 31, 2023 declined from previous periods as a result of an increase in the cost of interest-bearing liabilities partially offset by an increase in the yields of interest-earning assets driven by the increase in market interest rates. The increasing rate environment also has resulted in a change to customers' banking behaviors causing them to move funds from lower yielding interest-bearing transaction accounts to higher yielding time deposits.

Net interest income for the fourth quarter of 2023 of $65.3 million decreased $16.3 million compared to the fourth quarter of 2022. Net interest income of $281.7 million for the year ended December 31, 2023 decreased from $312.6 million for 2022, a decline of $30.9 million, or 10%.

Net interest margin for the fourth quarter of 2023 of 2.52% decreased 76 basis points compared to the fourth quarter of 2022 and declined 16 basis points compared to the third quarter of 2023. Net interest margin for the full year of 2023 of 2.77% decreased 47 basis points compared to 3.24% for 2022.

The yield on interest-earning assets for the fourth quarter of 2023 was 4.93% compared to 4.31% for the fourth quarter of 2022 and 4.86% for the third quarter of 2023. The yield on interest-earning assets for 2023 was 4.77% compared to 3.77% for 2022 resulting primarily from an increase in the yields on interest-earning assets.

The cost of interest-bearing liabilities increased in the fourth quarter of 2023 to 3.25% compared to 1.50% for the fourth quarter of 2022 and 2.96% for the third quarter of 2023. The cost of interest-bearing liabilities for the year ended December 31, 2023 was 2.74% compared to 0.80% during the same period in 2022.

Noninterest Income

Noninterest income decreased $237,000 to $6.8 million for the fourth quarter of 2023 from $7.0 million for the fourth quarter of 2022. Commissions and fees in the fourth quarter of 2023 decreased $537,000 compared to the same period in 2022 due primarily to decreases in investment commission income. Gain on sales of loans in the fourth quarter of 2023 increased $236,000. Gain on equity securities increased from $11,000 in fourth quarter 2022 to $391,000 in fourth quarter 2023.

For the year ended December 31, 2023, noninterest income decreased $3.0 million to $25.1 million compared to 2022. Gains on sales of loans decreased from $2.8 million in 2022 to $1.5 million in 2023 resulting from lower sale volume of residential mortgages. Service charges on deposit accounts decreased $646,000 compared to 2022 due primarily to decreases in interchange income as a result of the provisions of the Durbin amendment which became effective for Lakeland in the third quarter of 2023. Commissions and fees in 2023 decreased $1.9 million compared to 2022 due to decreases in investment commission income and commercial loan fees. Income on bank owned life insurance decreased $530,000 due primarily to death benefits received during 2022. Offsetting these decreases in noninterest income was an increase in gain (loss) on equity securities which increased to a gain of $110,000 in 2023 from a loss of $1.3 million in 2022.

Noninterest Expense

Noninterest expense totaled $43.0 million for the fourth quarter of 2023, a decrease of $2.4 million compared to the fourth quarter of 2022. Compensation and employee benefit expense in the fourth quarter of 2023 decreased $1.8 million, or 7%, compared to the fourth quarter of 2022 as a result of a decline in headcount related to the anticipated merger with Provident Financial. Data processing expense increased $486,000 due primarily to credits received from service providers in the fourth quarter of 2022. FDIC insurance costs increased $660,000 in the fourth quarter of 2023 from $690,000 in the fourth quarter of 2022 relating to Lakeland's asset size exceeding $10 billion. In the fourth quarter of 2023, merger-related costs included $129,000 for the proposed merger with Provident Financial, compared to $533,000 in the fourth quarter of 2022.

For the year ended December 31, 2023, noninterest expense decreased $5.2 million to $183.0 million compared to $188.2 million for 2022 due primarily to merger-related expenses of $864,000 for 2023 compared to $8.6 million in 2022. Merger-related expenses in 2022 included $4.6 million related to the Company's acquisition of 1st Constitution Bancorp, as well as $4.0 million related to the anticipated transaction with Provident Financial. Data processing expense increased from $6.2 million to $7.6 million for the same reason noted in the quarterly comparison.

Income Tax Expense

The effective tax rate for the fourth quarter of 2023 was 26.1% compared to 27.1% for the fourth quarter of 2022. The effective tax rate for 2023 and 2022 was 23.5% and 25.4%, respectively. The effective tax rate declined from 2022 to 2023 as a result in a decline in pretax income and the resulting increase of tax advantaged items as a percent of pretax income.

Financial Condition

At December 31, 2023, total assets were $11.14 billion, an increase of $354.7 million, or 3%, compared to December 31, 2022. For the year ended December 31, 2023, total loans increased $477.8 million to $8.34 billion, while investment securities decreased $184.5 million to $1.85 billion. On the funding side, total deposits increased $13.8 million, while borrowings increased $285.8 million to $1.23 billion for the year ended December 31, 2023. At December 31, 2023, total loans as a percent of total deposits was 97.2%.

Asset Quality

At December 31, 2023, non-performing assets increased to $26.0 million, 0.23% of total assets, compared to $17.4 million, 0.16% of total assets, at December 31, 2022. Non-performing assets increased $12.5 million from the linked quarter as a result of one construction loan totaling $12.7 million being placed in non-accrual late in fourth quarter. Non-accrual loans as a percent of total loans increased to 0.31% at December 31, 2023 compared to 0.22% at December 31, 2022. At December 31, 2023, the allowance for credit losses was $77.2 million, 0.92% of total loans compared to $70.3 million, 0.89% of total loans, at December 31, 2022. In the fourth quarter of 2023, the Company had net charge-offs of $242,000, or 0.01% of average loans, annualized, compared to net charge-offs of $79,000, or 0.00% of average loans, annualized, for the same period in 2022. Provision for credit losses on loans for the fourth quarter of 2023 was a provision of $2.2 million compared to a provision of $1.5 million in the fourth quarter of 2022. There was no provision for credit losses on investments for the fourth quarter of 2023 compared to a benefit of $3.9 million for the same period in 2022.

Capital

At December 31, 2023, stockholders' equity increased 5% to $1.2 billion as compared to $1.1 billion at December 31, 2022. Lakeland Bancorp remains above regulatory "well capitalized" standards, with a Tier 1 leverage ratio of 9.27% at December 31, 2023. Book value per common share and tangible book value per common share were $17.98 and $13.69, respectively, compared to $17.09 and $12.76 at December 31, 2022 (see "Supplemental Information - Non-GAAP Financial Measures" for a reconciliation of non-GAAP financial measures, including tangible book value). On January 23, 2024, the Company declared a quarterly cash dividend of $0.145 per share to be paid on February 15, 2024, to shareholders of record as of February 5, 2024.

Forward-Looking Statements

The information disclosed in this document includes various forward-looking statements that are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words "anticipates," "projects," "intends," "estimates," "expects," "believes," "plans," "may," "will," "should," "could," and other similar expressions are intended to identify such forward-looking statements. The Company cautions that these forward-looking statements are necessarily speculative and speak only as of the date made, and are subject to numerous assumptions, risks and uncertainties, all of which may change over time. Actual results could differ materially from such forward-looking statements. Accordingly, you should not place undue reliance on forward-looking statements. In addition to the specific risk factors disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, as updated by our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, the following factors, among others, could cause actual results to differ materially and adversely from such forward-looking statements: changes in the financial services industry and the U.S. and global capital markets; inflation and other changes in economic conditions nationally, regionally and in the Company's markets; the nature and timing of actions of the Federal Reserve Board and other regulators; the nature and timing of legislation and regulation affecting the financial services industry; government intervention in the U.S. financial system; changes in federal and state tax laws; changes in levels of market interest rates, which may affect demand for our products and the value of our financial instruments; pricing pressures on loan and deposit products; credit risks of the Company's lending and leasing activities; successful implementation, deployment and upgrades of new and existing technology, systems, services and products; customers' acceptance of the Company's products and services; competition; failure to realize anticipated efficiencies and synergies from the merger of 1st Constitution Bancorp into Lakeland Bancorp and the merger of 1st Constitution Bank into Lakeland Bank; and expenses related to our proposed merger with Provident Financial, unexpected delays related to the merger, inability to obtain regulatory approvals or satisfy other closing conditions required to complete the merger, and failure to realize anticipated efficiencies and synergies from the merger. Further, given its ongoing and dynamic nature, it is difficult to predict the continuing effects that the COVID-19 pandemic will have on our business and results of operations. Any statements made by the Company that are not historical facts should be considered to be forward-looking statements. The Company is not obligated to update and does not undertake to update any of its forward-looking statements made herein.

Explanation of Non-GAAP Financial Measures

Reported amounts are presented in accordance with U.S. generally accepted accounting principles ("GAAP"). This press release also contains certain supplemental non-GAAP information that the Company's management uses in its analysis of the Company's financial results.

The Company also provides measurements and ratios based on tangible equity and tangible assets. These measures are utilized by regulators and market analysts to evaluate a company's financial condition and, therefore, the Company's management believes that such information is useful to investors.

Specifically, the Company also uses an efficiency ratio that is a non-GAAP financial measure. The ratio that the Company uses excludes amortization of core deposit intangibles, and, where applicable, long-term debt prepayment fees and merger-related expenses. Income for the non-GAAP ratio is increased by the favorable effect of tax-exempt income and excludes gains and losses from the sale of investment securities, which can vary from period to period. The Company uses this ratio because it believes the ratio provides a relevant measure to compare the operating performance period to period.

These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. See accompanying "Supplemental Information - Non-GAAP Financial Measures" and "Supplemental Information – Reconciliation of Net Income" for a reconciliation of non-GAAP financial measures.

About Lakeland

Lakeland Bank is the wholly-owned subsidiary of Lakeland Bancorp, Inc. (NASDAQ:LBAI), which had $11.14 billion in total assets at December 31, 2023. With an extensive branch network and commercial lending centers throughout New Jersey and Highland Mills, N.Y., the Bank offers business and retail banking products and services. Business services include commercial loans and lines of credit, commercial real estate loans, loans for healthcare services, asset-based lending, equipment financing, small business loans and lines and cash management services. Consumer services include online and mobile banking, home equity loans and lines, mortgage options and wealth management solutions. Lakeland is proud to be recognized as one of New Jersey's Best-In State Banks by Forbes and Statista, rated a 5-Star Bank by Bauer Financial and named one of New Jersey's 50 Fastest Growing Companies by NJBIZ. Visit LakelandBank.com or 973-697-6140 for more information.

Thomas J. Shara	Thomas F. Splaine
President & CEO	EVP & CFO

Lakeland Bancorp, Inc. Financial Highlights (Unaudited)

	Three Months Ended December 31,						Years Ended December 31,
(dollars in thousands, except per share amounts)		2023			2022			2023			2022
Income Statement
Net interest income	$	65,308		$	81,640		$	281,681		$	312,615
(Provision) benefit for credit losses		(1,950	)		2,760			(13,052	)		(8,514	)
Gain on sales of loans		505			269			1,513			2,765
Gain (loss) on equity securities		391			11			110			(1,302	)
Other noninterest income		5,890			6,743			23,515			26,636
Merger-related expenses		(129	)		(533	)		(864	)		(8,606	)
Other noninterest expense		(42,864	)		(44,837	)		(182,110	)		(179,602	)
Pretax income		27,151			46,053			110,793			143,992
Provision for income taxes		(7,083	)		(12,476	)		(26,053	)		(36,623	)
Net income	$	20,068		$	33,577		$	84,740		$	107,369

Basic earnings per common share	$	0.31		$	0.51		$	1.29		$	1.64
Diluted earnings per common share	$	0.30		$	0.51		$	1.29		$	1.63
Dividends paid per common share	$	0.145		$	0.145		$	0.580		$	0.570
Weighted average shares - basic		65,064			64,854			65,039			64,624
Weighted average shares - diluted		65,258			65,222			65,217			64,918

Selected Operating Ratios
Annualized return on average assets		0.73	%		1.26	%		0.78	%		1.04	%
Annualized return on average common equity		6.97	%		12.19	%		7.48	%		9.80	%
Annualized return on average tangible common equity (1)		9.23	%		16.42	%		9.94	%		13.17	%
Annualized yield on interest-earning assets		4.93	%		4.31	%		4.77	%		3.77	%
Annualized cost of interest-bearing liabilities		3.25	%		1.50	%		2.74	%		0.80	%
Annualized net interest spread		1.68	%		2.81	%		2.03	%		2.97	%
Annualized net interest margin		2.52	%		3.28	%		2.77	%		3.24	%
Efficiency ratio (1)		58.45	%		49.67	%		58.38	%		51.79	%
Stockholders' equity to total assets								10.50	%		10.28	%
Book value per common share							$	17.98		$	17.09
Tangible book value per common share (1)							$	13.69		$	12.76
Tangible common equity to tangible assets (1)								8.20	%		7.88	%

Asset Quality Ratios							December 31, 2023			December 31, 2022
Ratio of allowance for credit losses on loans to total loans								0.92	%		0.89	%
Non-performing loans to total loans								0.31	%		0.22	%
Non-performing assets to total assets								0.23	%		0.16	%
Net charge-offs to average loans								—	%		0.10	%
(1) See Supplemental Information - Non-GAAP Financial Measures

Selected Balance Sheet Data at Period End								2023			2022
Loans							$	8,343,861		$	7,866,050
Allowance for credit losses on loans								77,163			70,264
Investment securities								1,852,873			2,037,386
Total assets								11,138,567			10,783,840
Total deposits								8,581,238			8,567,471
Short-term borrowings								714,152			728,797
Other borrowings								519,705			219,264
Stockholders' equity								1,169,369			1,108,587

Lakeland Bancorp, Inc. Financial Highlights (Unaudited)

	Three Months Ended December 31,				Year Ended December 31,
		2023		2022		2023		2022
Selected Average Balance Sheet Data
Loans	$	8,304,747	$	7,729,510	$	8,094,267	$	7,376,839
Investment securities		1,955,407		2,145,252		2,037,915		2,128,870
Interest-earning assets		10,354,079		9,923,173		10,234,821		9,694,234
Total assets		10,963,641		10,534,884		10,837,396		10,307,245
Noninterest-bearing demand deposits		1,829,996		2,240,197		1,918,633		2,267,867
Savings deposits		699,199		1,001,870		803,762		1,094,399
Interest-bearing transaction accounts		4,229,019		4,389,672		4,140,942		4,373,830
Time deposits		1,926,436		1,100,911		1,724,672		922,935
Total deposits		8,684,650		8,732,650		8,588,009		8,659,031
Short-term borrowings		423,629		311,875		649,551		197,557
Other borrowings		519,635		219,202		298,379		218,811
Total interest-bearing liabilities		7,797,918		7,023,530		7,617,306		6,807,532
Stockholders' equity		1,142,031		1,092,720		1,132,656		1,095,861

	Lakeland Bancorp, Inc. Consolidated Statements of Income (Unaudited)

		Three Months Ended December 31,					Year Ended December 31,
(in thousands, except per share amounts)			2023		2022			2023		2022
Interest Income
Loans and fees		$	114,678	$	95,295		$	432,038	$	325,001
Federal funds sold and interest-bearing deposits with banks			1,293		449			5,309		1,295
Taxable investment securities and other			11,905		10,769			47,476		35,352
Tax exempt investment securities			1,450		1,666			6,215		5,895
	Total Interest Income		129,326		108,179			491,038		367,543
Interest Expense
Deposits			52,175		21,767			163,095		44,253
Federal funds purchased and securities sold under agreements to repurchase			5,791		2,771			33,564		3,658
Other borrowings			6,052		2,001			12,698		7,017
	Total Interest Expense		64,018		26,539			209,357		54,928
Net Interest Income			65,308		81,640			281,681		312,615
Provision (benefit) for credit losses			1,950		(2,760	)		13,052		8,514
	Net Interest Income after Provision (Benefit) for Credit Losses		63,358		84,400			268,629		304,101
Noninterest Income
Service charges on deposit accounts			2,710		2,840			10,339		10,985
Commissions and fees			1,706		2,243			7,225		9,116
Income on bank owned life insurance			837		862			3,450		3,980
Gain (loss) on equity securities			391		11			110		(1,302	)
Gain on sales of loans			505		269			1,513		2,765
Swap income			482		466			1,596		1,576
Other income			155		332			905		979
	Total Noninterest Income		6,786		7,023			25,138		28,099
Noninterest Expense
Compensation and employee benefits			25,137		26,914			108,874		108,167
Premises and equipment			7,447		7,657			31,304		30,882
FDIC insurance			1,350		690			5,294		2,724
Data processing			1,744		1,258			7,563		6,238
Merger-related expenses			129		533			864		8,606
Other operating expenses			7,186		8,318			29,075		31,591
	Total Noninterest Expense		42,993		45,370			182,974		188,208
Income before provision for income taxes			27,151		46,053			110,793		143,992
Provision for income taxes			7,083		12,476			26,053		36,623
Net Income		$	20,068	$	33,577		$	84,740	$	107,369
Per Share of Common Stock
Basic earnings		$	0.31	$	0.51		$	1.29	$	1.64
Diluted earnings		$	0.30	$	0.51		$	1.29	$	1.63
Dividends		$	0.145	$	0.145		$	0.580	$	0.570

Lakeland Bancorp, Inc. Consolidated Balance Sheets

(dollars in thousands)	December 31, 2023			December 31, 2022
	(Unaudited)
Assets
Cash	$	293,366		$	223,299
Interest-bearing deposits due from banks		27,289			12,651
Total cash and cash equivalents		320,655			235,950
Investment securities available for sale, at estimated fair value (allowance for credit losses of $0 at December 31, 2023 and $310 at December 31, 2022)		946,282			1,054,312
Investment securities held to maturity (estimated fair value of $702,563 at December 31, 2023 and $760,455 at December 31, 2022, allowance for credit losses of $146 at December 31, 2023 and $107 at December 31, 2022)		836,377			923,308
Equity securities, at fair value		17,697			17,283
Federal Home Loan Bank and other membership stocks, at cost		52,517			42,483
Loans held for sale		664			536
Loans, net of deferred fees		8,343,861			7,866,050
Less: Allowance for credit losses		77,163			70,264
Net loans		8,266,698			7,795,786
Premises and equipment, net		52,846			55,429
Operating lease right-of-use assets		16,008			20,052
Accrued interest receivable		37,508			33,374
Goodwill		271,829			271,829
Other identifiable intangible assets		7,058			9,088
Bank owned life insurance		159,862			156,985
Other assets		152,566			167,425
Total Assets	$	11,138,567		$	10,783,840
Liabilities and Stockholders' Equity
Liabilities
Deposits:
Noninterest-bearing	$	1,781,619		$	2,113,289
Savings and interest-bearing transaction accounts		4,832,171			5,246,005
Time deposits $250 thousand and under		1,458,640			901,505
Time deposits over $250 thousand		508,808			306,672
Total deposits		8,581,238			8,567,471
Federal funds purchased and securities sold under agreements to repurchase		714,152			728,797
Other borrowings		325,000			25,000
Subordinated debentures		194,705			194,264
Operating lease liabilities		16,891			21,449
Other liabilities		137,212			138,272
Total Liabilities		9,969,198			9,675,253
Stockholders' Equity
Common stock, no par value; authorized 100,000,000 shares; issued 65,161,310 shares and outstanding 65,030,275 shares at December 31, 2023 and issued 65,002,738 shares and outstanding 64,871,703 shares at December 31, 2022		858,857			855,425
Retained earnings		376,044			329,375
Treasury shares, at cost, 131,035 shares at December 31, 2023 and December 31, 2022		(1,452	)		(1,452	)
Accumulated other comprehensive (loss) income		(64,080	)		(74,761	)
Total Stockholders' Equity		1,169,369			1,108,587
Total Liabilities and Stockholders' Equity	$	11,138,567		$	10,783,840

Lakeland Bancorp, Inc. Financial Highlights (Unaudited)

	For the Quarter Ended
(dollars in thousands, except per share data)	December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022
Income Statement
Net interest income	$	65,308		$	68,906		$	71,542		$	75,925		$	81,640
(Provision) benefit for credit losses		(1,950	)		(1,262	)		(1,947	)		(7,893	)		2,760
Gain on sales of loans		505			349			229			430			269
Gain (loss) on equity securities		391			(294	)		(135	)		148			11
Other noninterest income		5,890			5,363			6,575			5,687			6,743
Merger-related expenses		(129	)		(198	)		(242	)		(295	)		(533	)
Other noninterest expense		(42,864	)		(44,170	)		(46,766	)		(48,310	)		(44,837	)
Pretax income		27,151			28,694			29,256			25,692			46,053
Provision for income taxes		(7,083	)		(6,455	)		(6,628	)		(5,887	)		(12,476	)
Net income	$	20,068		$	22,239		$	22,628		$	19,805		$	33,577

Basic earnings per common share	$	0.31		$	0.34		$	0.34		$	0.30		$	0.51
Diluted earnings per common share	$	0.30		$	0.34		$	0.34		$	0.30		$	0.51
Dividends paid per common share	$	0.145		$	0.145		$	0.145		$	0.145		$	0.145
Dividends paid	$	9,521		$	9,521		$	9,529		$	9,500		$	9,505
Weighted average shares - basic		65,064			65,064			65,059			64,966			64,854
Weighted average shares - diluted		65,258			65,222			65,173			65,228			65,222

Selected Operating Ratios
Annualized return on average assets		0.73	%		0.81	%		0.84	%		0.75	%		1.26	%
Annualized return on average common equity		6.97	%		7.76	%		8.03	%		7.17	%		12.19	%
Annualized return on average tangible common equity (1)		9.23	%		10.29	%		10.67	%		9.57	%		16.42	%
Annualized net interest margin		2.52	%		2.68	%		2.83	%		3.07	%		3.28	%
Efficiency ratio (1)		58.45	%		58.43	%		58.82	%		57.84	%		49.67	%
Common stockholders' equity to total assets		10.50	%		10.16	%		10.38	%		10.40	%		10.28	%
Tangible common equity to tangible assets (1)		8.20	%		7.86	%		8.02	%		8.02	%		7.88	%
Tier 1 risk-based ratio		11.51	%		11.31	%		11.43	%		11.33	%		11.24	%
Total risk-based ratio		14.11	%		13.87	%		14.03	%		13.93	%		13.83	%
Tier 1 leverage ratio		9.27	%		9.24	%		9.17	%		9.13	%		9.16	%
Common equity tier 1 capital ratio		11.00	%		10.80	%		10.90	%		10.81	%		10.71	%
Book value per common share	$	17.98		$	17.46		$	17.40		$	17.33		$	17.09
Tangible book value per common share (1)	$	13.69		$	13.17		$	13.10		$	13.01		$	12.76

(1) See Supplemental Information - Non-GAAP Financial Measures

Lakeland Bancorp, Inc. Financial Highlights (Unaudited)

	For the Quarter Ended
(dollars in thousands)	December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022
Selected Balance Sheet Data at Period End
Loans	$	8,343,861		$	8,294,057		$	8,101,287		$	7,952,553		$	7,866,050
Allowance for credit losses on loans		77,163			75,159			73,965			71,403			70,264
Investment securities		1,852,873			1,860,996			1,938,611			1,994,927			2,037,386
Total assets		11,138,567			11,176,809			10,897,966			10,837,241			10,783,840
Total deposits		8,581,238			8,602,503			8,444,681			8,536,943			8,567,471
Short-term borrowings		714,152			728,769			938,718			813,328			728,797
Other borrowings		519,705			519,596			219,486			219,376			219,264
Stockholders' equity		1,169,369			1,135,627			1,131,702			1,126,580			1,108,587

Loans
Non owner occupied commercial	$	2,987,959		$	2,980,811		$	2,991,124		$	2,943,897		$	2,906,014
Owner occupied commercial		1,283,221			1,299,977			1,201,049			1,205,635			1,246,189
Multifamily		1,408,905			1,361,628			1,314,255			1,275,771			1,260,814
Non owner occupied residential		213,986			208,560			205,818			210,203			218,026
Commercial, industrial and other		638,507			632,531			594,401			562,287			606,276
Paycheck Protection Program		387			388			389			390			435
Construction		302,745			333,998			354,918			404,994			380,100
Equipment finance		179,171			174,946			173,469			161,889			151,575
Residential mortgages		985,768			956,535			922,109			857,427			765,552
Consumer and home equity		343,212			344,683			343,755			330,060			331,069
Total loans	$	8,343,861		$	8,294,057		$	8,101,287		$	7,952,553		$	7,866,050

Deposits
Noninterest-bearing	$	1,781,619		$	1,857,324		$	1,866,252		$	1,998,590		$	2,113,289
Savings and interest-bearing transaction accounts		4,832,171			4,862,246			4,775,184			4,918,041			5,246,005
Time deposits		1,967,448			1,882,933			1,803,245			1,620,312			1,208,177
Total deposits	$	8,581,238		$	8,602,503		$	8,444,681		$	8,536,943		$	8,567,471

Total loans to total deposits ratio		97.2	%		96.4	%		95.9	%		93.2	%		91.8	%

Selected Average Balance Sheet Data
Loans	$	8,304,747		$	8,167,362		$	7,999,285		$	7,900,426		$	7,729,510
Investment securities		1,955,407			2,013,153			2,068,073			2,117,076			2,145,252
Interest-earning assets		10,354,079			10,276,375			10,214,142			10,091,341			9,923,173
Total assets		10,963,641			10,875,553			10,808,261			10,698,807			10,534,884
Noninterest-bearing demand deposits		1,829,996			1,871,516			1,935,776			2,040,070			2,240,197
Savings deposits		699,199			759,232			830,836			928,796			1,001,870
Interest-bearing transaction accounts		4,229,019			4,103,217			4,007,867			4,224,024			4,389,672
Time deposits		1,926,436			1,856,266			1,722,935			1,385,661			1,100,911
Total deposits		8,684,650			8,590,231			8,497,414			8,578,551			8,732,650
Short-term borrowings		423,629			744,582			813,471			617,611			311,875
Other borrowings		519,635			232,573			219,425			219,308			219,202
Total interest-bearing liabilities		7,797,918			7,695,870			7,594,534			7,375,400			7,023,530
Stockholders' equity		1,142,031			1,137,387			1,130,563			1,120,356			1,092,720

Lakeland Bancorp, Inc. Financial Highlights (Unaudited)

	For the Quarter Ended
(dollars in thousands)	December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022
Average Annualized Yields (Taxable Equivalent Basis) and Costs
Assets
Loans		5.48	%		5.42	%		5.22	%		5.10	%		4.84	%
Taxable investment securities and other		2.87	%		2.84	%		2.74	%		2.61	%		2.41	%
Tax-exempt securities		2.49	%		2.49	%		2.45	%		2.41	%		2.36	%
Federal funds sold and interest-bearing cash accounts		5.46	%		5.41	%		5.41	%		4.00	%		3.68	%
Total interest-earning assets		4.93	%		4.86	%		4.71	%		4.56	%		4.31	%
Liabilities
Savings accounts		0.20	%		0.24	%		0.26	%		0.28	%		0.29	%
Interest-bearing transaction accounts		2.89	%		2.60	%		2.16	%		1.85	%		1.46	%
Time deposits		4.34	%		3.78	%		3.39	%		2.71	%		1.77	%
Borrowings		4.91	%		5.04	%		4.80	%		4.46	%		3.52	%
Total interest-bearing liabilities		3.25	%		2.96	%		2.59	%		2.11	%		1.50	%
Net interest spread (taxable equivalent basis)		1.68	%		1.90	%		2.12	%		2.45	%		2.81	%
Annualized net interest margin (taxable equivalent basis)		2.52	%		2.68	%		2.83	%		3.07	%		3.28	%
Annualized cost of deposits		2.38	%		2.08	%		1.73	%		1.38	%		0.99	%
Asset Quality Data
Allowance for Credit Losses on Loans
Balance at beginning of period	$	75,159		$	73,965		$	71,403		$	70,264		$	68,879
Provision for credit losses on loans		2,246			1,327			2,422			1,213			1,464
Charge-offs		(265	)		(217	)		(148	)		(139	)		(138	)
Recoveries		23			84			288			65			59
Balance at end of period	$	77,163		$	75,159		$	73,965		$	71,403		$	70,264
Net Loan Charge-Offs (Recoveries)
Non owner occupied commercial	$	—		$	—		$	—		$	—		$	—
Owner occupied commercial		—			—			(6	)		—			—
Multifamily		—			—			—			—			—
Non owner occupied residential		—			—			—			—			—
Commercial, industrial and other		(7	)		—			(163	)		(35	)		(24	)
Construction		—			—			13			—			—
Equipment finance		83			136			12			46			51
Residential mortgages		128			—			—			—			—
Consumer and home equity		38			(3	)		4			63			52
Net (recoveries) charge-offs	$	242		$	133		$	(140	)	$	74		$	79

Lakeland Bancorp, Inc. Financial Highlights (Unaudited)

	For the Quarter Ended
(dollars in thousands)	December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022
Non-Performing Assets
Non owner occupied commercial	$	769		$	798		$	864		$	908		$	618
Owner occupied commercial		6,849			7,026			8,076			8,757			9,439
Multifamily		1,096			1,106			266			584			—
Non owner occupied residential		—			—			41			—			441
Commercial, industrial and other		401			217			1,737			2,221			2,978
Construction		12,698			—			—			980			980
Equipment financing		518			626			644			379			114
Residential mortgages		2,400			2,319			1,954			1,918			2,011
Consumer and home equity		1,232			1,331			2,486			1,131			781
Total non-accrual loans		25,963			13,423			16,068			16,878			17,362
Total non-performing assets	$	25,963		$	13,423		$	16,068		$	16,878		$	17,362

Loans past due 90 days or more and still accruing	$	—		$	—		$	—		$	—		$	—
Loans restructured and still accruing		—			—			—			—			2,640
Ratio of allowance for credit losses on loans to total loans		0.92	%		0.91	%		0.91	%		0.90	%		0.89	%
Total non-accrual loans to total loans		0.31	%		0.16	%		0.20	%		0.21	%		0.22	%
Total non-performing assets to total assets		0.23	%		0.12	%		0.15	%		0.16	%		0.16	%
Annualized net (recoveries) charge-offs to average loans		0.01	%		0.01	%		(0.01)	%		—	%		—	%

Lakeland Bancorp, Inc. Supplemental Information - Non-GAAP Financial Measures (Unaudited)

	At or for the Quarter Ended
(dollars in thousands, except per share amounts)	December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022
Calculation of Tangible Book Value Per Common Share
Total common stockholders' equity at end of period - GAAP	$	1,169,369		$	1,135,627		$	1,131,702		$	1,126,580		$	1,108,587
Less: Goodwill		271,829			271,829			271,829			271,829			271,829
Less: Other identifiable intangible assets		7,058			7,559			8,060			8,572			9,088
Total tangible common stockholders' equity at end of period - Non-GAAP	$	890,482		$	856,239		$	851,813		$	846,179		$	827,670
Shares outstanding at end of period		65,030			65,030			65,028			65,017			64,872
Book value per share - GAAP	$	17.98		$	17.46		$	17.40		$	17.33		$	17.09
Tangible book value per share - Non-GAAP	$	13.69		$	13.17		$	13.10		$	13.01		$	12.76
Calculation of Tangible Common Equity to Tangible Assets
Total tangible common stockholders' equity at end of period - Non-GAAP	$	890,482		$	856,239		$	851,813		$	846,179		$	827,670
Total assets at end of period - GAAP	$	11,138,567		$	11,176,809		$	10,897,966		$	10,837,241		$	10,783,840
Less: Goodwill		271,829			271,829			271,829			271,829			271,829
Less: Other identifiable intangible assets		7,058			7,559			8,060			8,572			9,088
Total tangible assets at end of period - Non-GAAP	$	10,859,680		$	10,897,421		$	10,618,077		$	10,556,840		$	10,502,923
Common equity to assets - GAAP		10.50	%		10.16	%		10.38	%		10.40	%		10.28	%
Tangible common equity to tangible assets - Non-GAAP		8.20	%		7.86	%		8.02	%		8.02	%		7.88	%
Calculation of Return on Average Tangible Common Equity
Net income - GAAP	$	20,068		$	22,239		$	22,628		$	19,805		$	33,577
Total average common stockholders' equity - GAAP	$	1,142,031		$	1,137,387		$	1,130,563		$	1,120,356		$	1,092,720
Less: Average goodwill		271,829			271,829			271,829			271,829			271,829
Less: Average other identifiable intangible assets		7,383			7,887			8,353			8,904			9,386
Total average tangible common stockholders' equity - Non-GAAP	$	862,819		$	857,671		$	850,381		$	839,623		$	811,505
Return on average common stockholders' equity - GAAP		6.97	%		7.76	%		8.03	%		7.17	%		12.19	%
Return on average tangible common stockholders' equity - Non-GAAP		9.23	%		10.29	%		10.67	%		9.57	%		16.42	%
Calculation of Efficiency Ratio
Total noninterest expense	$	42,993		$	44,368		$	47,008		$	48,605		$	45,370
Less:
Amortization of core deposit intangibles		500			501			512			516			581
Merger-related expenses		129			198			242			295			533
Noninterest expense, as adjusted	$	42,364		$	43,669		$	46,254		$	47,794		$	44,256
Net interest income	$	65,308		$	68,906		$	71,542		$	75,925		$	81,640
Total noninterest income		6,786			5,418			6,669			6,265			7,023
Total revenue	$	72,094		$	74,324		$	78,211		$	82,190		$	88,663
Tax-equivalent adjustment on municipal securities		385			408			422			436			443
Total revenue, as adjusted	$	72,479		$	74,732		$	78,633		$	82,626		$	89,106
Efficiency ratio - Non-GAAP		58.45	%		58.43	%		58.82	%		57.84	%		49.67	%

Lakeland Bancorp, Inc. Supplemental Information - Non-GAAP Financial Measures (Unaudited)

	For the Twelve Months Ended December 31,
(dollars in thousands)		2023			2022
Calculation of Return on Average Tangible Common Equity
Net income - GAAP	$	84,740		$	107,369
Total average common stockholders' equity - GAAP	$	1,132,656		$	1,095,861
Less: Average goodwill		271,829			270,246
Less: Average other identifiable intangible assets		8,127			10,192
Total average tangible common stockholders' equity - Non-GAAP	$	852,700		$	815,423
Return on average common stockholders' equity - GAAP		7.48	%		9.80	%
Return on average tangible common stockholders' equity - Non-GAAP		9.94	%		13.17	%
Calculation of Efficiency Ratio
Total noninterest expense	$	182,974		$	188,208
Less:
Amortization of core deposit intangibles		2,029			2,351
Merger-related expenses		864			8,606
Noninterest expense, as adjusted	$	180,081		$	177,251
Net interest income	$	281,681		$	312,615
Noninterest income		25,138			28,099
Total revenue	$	306,819		$	340,714
Tax-equivalent adjustment on municipal securities		1,652			1,567
Total revenue, as adjusted	$	308,471		$	342,281
Efficiency ratio - Non-GAAP		58.38	%		51.79	%

Lakeland Bancorp Announces Quarterly and Year-End 2023 Earnings