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Monarch Financial Reports Higher Income, Strong Loan Growth, and Declares Cash Dividend

CHESAPEAKE, Va., Jan. 30, 2015 (GLOBE NEWSWIRE) — Monarch Financial Holdings, Inc. (MNRK), the bank holding company for Monarch Bank, reported improved fourth quarter and annual financial performance. The Board of Directors also announced a quarterly common stock cash dividend of $0.08 per common share, payable on February 27, 2015, to shareholders of record on February 10, 2015.

Annual 2014 highlights are:

Net income of $11,211,850, for Return on Equity of 10.95% Diluted earnings per share of $1.05 Cash dividends of $0.31 paid per share, up 29% from 2013 Loans held for investment grew $59.9 million, up 8.4% Non-performing assets at 0.28% of total assets Net Interest Margin was 4.25% $1.6 billion in mortgage loans closed, with 80% home purchases

Fourth quarter 2014 highlights are:

Quarterly net income of $2,683,163, up 24% Return on equity of 10.03% Diluted earnings per share of $0.25 Loans held for investment grew $58.9 million $446 million in mortgage loans closed with 69% home purchase

“We are pleased with our quarterly and annual financial performance, with very strong organic loan growth finally taking hold in the fourth quarter. Unlike many of our peers we have grown loans with our bankers, in our markets, and have not purchased loans to drive this growth. Mortgage production was in line with the previous year with our best year ever for purchase mortgage loan closings. We improved our performance in all three lines of business to include banking, mortgage, and wealth management,” stated Brad E. Schwartz, Chief Executive Officer. “Non-performing assets remained low, our margin improved due to asset mix and pricing discipline, and our capital grew stronger with our retention of earnings. The market has responded to our performance with price appreciation in our common stock that, when combined with the increase in our common stock dividends, produced a 14% total shareholder return for 2014.”

For 2014 net income was $11,211,850 compared to $11,091,007 for the same period in 2013, a 1% increase. The 2014 return on average equity (ROE) was 10.95%, and the return on average assets (ROA) was 1.13%. Annual diluted earnings per share were $1.05 compared to $1.08 in 2013, as our higher earnings were more than offset by the number of additional outstanding shares.

Net income was $2,683,163 for the fourth quarter of 2014 compared to $2,156,566 for the same period in 2013, a 24% increase. The quarterly annualized return on average equity (ROE) was 10.03%, and the annualized quarterly return on average assets (ROA) was 1.04 %, both metrics up from the same period a year ago. Diluted earnings per share for the fourth quarter were $0.25, up 25% from the previous year.

Total assets at December 31, 2014 were $1.07 billion, up 5% from the prior year. In 2014 loans held for investment grew 8% to $773 million and mortgage loans held for sale grew 48% to $148 million. The vast majority of the net loan growth occurred in the fourth quarter. Total deposits grew 3% to $919 million, with demand deposits growing $40 million or 15% for the year. Demand deposits now represent 33% of total deposits, an achievement driven by our dedicated cash management and banking office teams. While the current rate environment does not appropriately reward banks for a transaction-focused funding strategy, this strategy should deliver net interest margin protection when rates eventually rise.

“We are pleased to deliver over 8% quarterly and year over year loan growth. We are equally proud that we produced each and every loan and have not been tempted by participation loans or other loan purchase programs we see in the marketplace,” stated E. Neal Crawford Jr., President of Monarch Bank. “We continue to hire talented bankers and expect to continue expanding the banking team into 2015. Our Richmond and Peninsula expansion is driving quality loan growth and deposit growth while our cash management and private banking teams continue to focus on growing core deposits.”

Non-performing assets were 0.28% as of December 31, 2014 compared to 0.25% one year prior, and non-performing loans to loans held for investment were 0.37% compared to 0.31% one year prior. Non-performing assets were $3.0 million, comprised of $175 thousand 90 days or more past due and still accruing interest, $2.7 million in non-accrual loans and $144,000 in one parcel of other real estate owned that is already under contract for sale. The allowance for loan losses represents 1.16% of total loans held for investment and 311% of non-performing loans.

Average equity to average assets rose to 10.39% at year-end 2014, an increase from 9.73% one year prior. Cash dividends of $0.08 per share were paid in the fourth quarter of 2014, and a total of $0.31 per share was paid during the year, an increase of 29% over 2013. Total risk-based capital to risk weighted assets at Monarch Bank equaled 13.79%, significantly higher than the required level to meet the highest rating of “Well Capitalized” by federal banking regulators. We also already meet the new Basel III capital standards for a well-capitalized bank. Monarch was again awarded the highest 5-Star “Superior” rating by Bauer Financial, an independent third-party bank rating agency that rates banks on safety and soundness.

Net interest income, our number one driver of profitability, was flat for the year driven by the large volume of mortgage loans held for sale in the first six months of 2013 compared to the balances carried in 2014. These balances are driven by mortgage loan closings. Excluding the mortgage loans held for sale volatility, the net interest income from core banking operations increased 5.9% or $1.9 million. Our net interest margin for 2014 was 4.25%, up from 4.10% due to asset mix, loan and deposit pricing, mortgage loans held for sale pricing, fee income capture, and the additional income from loans previously on non-accrual status. Loan growth that occurred late in the year had minimal impact on net interest income even though it should contribute to net interest income on a going forward basis.

Non-interest income decreased $2.8 million in 2014 over the previous year driven by lower mortgage revenues, which was more than offset by a reduction of $3.6 million in commissions and incentives. Net overhead, or the difference between non-interest income and non-interest expenses, increased only $372 thousand or 1.7% due to increased spending for facilities, technology, technology risk management, compliance and marketing. Salaries and benefits were held flat for the year, a significant accomplishment with our increased benefits costs. Investment revenues related to Monarch Bank Private Wealth totaled $1.6 million for the year compared to $1.1 million the previous year, a noteworthy increase. The Company is recognized by Raymond James Financial Services as a top performing bank investment program, with $235 million in assets under management accumulated since the formation of Monarch Bank Private Wealth in the third quarter of 2012.

Mortgage revenue remains the number one driver of non-interest income. $446 million in mortgage loans were closed during the fourth quarter of 2014 (69% purchase) compared to $350 million in the fourth quarter of 2013 (80% purchase). Monarch closed $1.6 billion in mortgage loans during 2014 compared to $2.0 billion in 2012. While volumes year over year declined approximately 20%, revenues from mortgage lending declined only 5% due to a strong focus on loan product mix, secondary market pricing, and fee income.

“Our focus on the purchase market paid off in 2014 when we had the best year of purchase mortgage business in our history. We closed $1.3 billion in home purchase loans and $0.3 billion in refinances, and altogether closed over 6,000 loans during the year,” stated William T. Morrison, CEO of Monarch Mortgage. “The year 2015 is beginning with an attractive rate environment and a much stronger pipeline of activity, and we expect it to be a great year for our mortgage operations.”

Monarch Financial Holdings, Inc. is the one-bank holding company for Monarch Bank. Monarch Bank is a community bank with ten banking offices in Chesapeake, Virginia Beach, Norfolk, and Williamsburg, Virginia. Monarch Bank also has loan production offices in Newport News and Richmond, Virginia. OBX Bank, a division of Monarch Bank, operates offices in Kitty Hawk and Nags Head, North Carolina. Monarch Mortgage and our affiliated mortgage companies have over thirty offices with locations in Virginia, North Carolina, Maryland, and South Carolina. Our subsidiaries/ divisions include Monarch Bank, OBX Bank, Monarch Mortgage (secondary mortgage origination), OBX Bank Mortgage (secondary mortgage origination), Coastal Home Mortgage, LLC (secondary mortgage origination), Monarch Bank Private Wealth (investment, trust, planning and private banking), Monarch Investments (investment and insurance solutions), Real Estate Security Agency, LLC (title agency) and Monarch Capital, LLC (commercial mortgage brokerage). The shares of common stock of Monarch Financial Holdings, Inc. are publicly traded on the Nasdaq Capital Market under the symbol “MNRK”.

This press release may contain “forward-looking statements,” within the meaning of federal securities laws that involve significant risks and uncertainties. Statements herein are based on certain assumptions and analyses by the Company and are factors it believes are appropriate in the circumstances. Actual results could differ materially from those contained in or implied by such statements for a variety of reasons including, but not limited to: changes in interest rates; changes in accounting principles, policies, or guidelines; significant changes in the economic scenario: significant changes in regulatory requirements; and significant changes in securities markets. Consequently, all forward-looking statements made herein are qualified by these cautionary statements and the cautionary language in the Company’s most recent Form 10-K and 10-Q reports and other documents filed with the Securities and Exchange Commission. The Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

Consolidated Balance Sheets Monarch Financial Holdings, Inc. and Subsidiaries (In thousands) Unaudited

December 31, September 30, June 30, March 31, December 31,
2014 2014 2014 2014 2013 ASSETS:

Cash and due from banks $ 14,503 $ 21,083 $ 19,661 $ 18,510 $ 18,971 Interest bearing bank balances 49,761 58,207 37,166 37,033 31,955 Federal funds sold 1,135 3,938 29,761 84,232 53,985

Investment securities, at fair value 23,725 25,137 23,773 23,197 48,822

Mortgage loans held for sale 147,690 138,590 156,584 92,839 99,718

Loans held for investment, net of unearned income 772,590 713,667 700,159 715,088 712,671 Less: allowance for loan losses (8,949) (8,977) (9,070) (9,213) (9,061) Net loans 763,641 704,690 691,089 705,875 703,610

Bank premises and equipment, net 30,247 30,368 31,407 29,902 28,882 Restricted equity securities, at cost 3,633 3,179 3,169 3,156 3,683 Bank owned life insurance 9,687 9,587 7,526 7,467 7,409 Goodwill 775 775 775 775 775 Intangible assets, net — — 15 60 104 Accrued interest receivable and other assets 21,940 23,688 22,973 19,673 18,786 Total assets $ 1,066,737 $ 1,019,242 $ 1,023,899 $ 1,022,719 $ 1,016,700

LIABILITIES:

Demand deposits–non-interest bearing $ 235,301 $ 252,286 $ 240,348 $ 221,357 $ 206,891 Demand deposits–interest bearing 66,682 53,093 51,563 55,949 55,528 Money market deposits 369,221 365,041 377,096 367,590 374,462 Savings deposits 20,003 25,211 24,539 24,327 22,137 Time deposits 228,207 189,142 197,747 224,947 234,100 Total deposits 919,414 884,773 891,293 894,170 893,118

FHLB borrowings 1,075 1,100 1,125 1,150 1,175 Federal funds 10,000 — — — — Trust preferred subordinated debt 10,000 10,000 10,000 10,000 10,000 Accrued interest payable and other liabilities 18,710 18,145 18,650 17,422 14,661 Total liabilities 959,199 914,018 921,068 922,742 918,954

STOCKHOLDERS’ EQUITY:

Common stock 51,864 51,735 51,624 51,584 51,432 Capital in excess of par value 8,336 7,966 7,675 7,357 7,069 Retained earnings 47,354 45,523 43,566 41,232 39,437 Accumulated other comprehensive loss (102) (135) (159) (314) (419) Total Monarch Financial Holdings, Inc. stockholders’ equity 107,452 105,089 102,706 99,859 97,519 Noncontrolling interest 86 135 125 118 227 Total equity 107,538 105,224 102,831 99,977 97,746 Total liabilities and stockholders’ equity $ 1,066,737 $ 1,019,242 $ 1,023,899 $ 1,022,719 $ 1,016,700

Common shares outstanding at period end 10,652,475 10,646,873 10,624,668 10,619,444 10,502,323

Nonvested shares of common stock included in commons shares outstanding 279,750 299,910 299,910 302,710 215,960

Book value per common share at period end (1) $ 10.10 $ 9.87 $ 9.67 $ 9.40 $ 9.29 Tangible book value per common share at period end (2) $ 10.02 $ 9.80 $ 9.59 $ 9.33 $ 9.20 Closing market price $ 13.75 $ 12.56 $ 11.72 $ 12.26 $ 12.31

Total risk based capital – Consolidated company 13.79% 14.16% 14.29% 14.27% 13.91% Total risk based capital – Bank 13.81% 14.18% 14.31% 14.30% 13.95%

(1) Book value per common share is defined as stockholders’ equity divided by common shares outstanding. (2) Tangible book value per common share is defined as stockholders’ equity less goodwill and other intangibles divided by commons shares outstanding

Consolidated Statements of Income Monarch Financial Holdings, Inc. and Subsidiaries Unaudited
Three Months Ended Year Ended
December 31, December 31,
2014 2013 2014 2013 INTEREST INCOME:

Interest on federal funds sold $ 4,980 $ 42,283 $ 84,850 $ 115,963 Interest on other bank accounts 92,156 28,626 244,702 58,027 Dividends on equity securities 33,545 67,540 106,955 277,700 Interest on investment securities 100,957 60,311 359,604 230,496 Interest on mortgage loans held for sale 1,376,920 1,090,070 4,866,818 7,021,186 Interest and fees on loans held for investment 9,752,472 9,388,407 37,327,978 36,645,065 Total interest income 11,361,030 10,677,237 42,990,907 44,348,437 INTEREST EXPENSE:

Interest on deposits 722,537 905,970 3,185,965 3,936,203 Interest on trust preferred subordinated debt 46,337 122,850 416,233 491,910 Interest on other borrowings 16,615 15,002 58,966 358,345 Total interest expense 785,489 1,043,822 3,661,164 4,786,458 NET INTEREST INCOME 10,575,541 9,633,415 39,329,743 39,561,979 PROVISION FOR LOAN LOSSES — — — —

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 10,575,541 9,633,415 39,329,743 39,561,979

NON-INTEREST INCOME:

Mortgage banking income 16,210,774 13,276,836 62,440,013 65,672,402 Service charges and fees 489,974 502,373 2,058,262 1,941,926 Title income 216,895 124,774 669,785 789,253 Investment and insurance income 382,774 336,002 1,592,398 1,053,429 Other income 72,366 111,924 318,783 425,261 Total non-interest income 17,372,783 14,351,909 67,079,241 69,882,271 NON-INTEREST EXPENSE:

Salaries and employee benefits 8,798,996 8,772,157 34,134,998 34,112,834 Commissions and incentives 6,926,507 5,248,131 24,754,633 28,344,347 Occupancy and equipment 2,412,086 2,220,634 9,548,543 8,449,912 Loan expense 1,676,134 1,526,317 6,652,007 7,891,835 Marketing expense 990,383 807,717 3,111,535 2,873,259 Data processing 715,057 459,681 2,272,785 1,696,535 Telephone 296,396 314,984 1,226,389 1,184,894 Other expenses 1,789,789 1,212,731 6,778,966 6,357,202 Total non-interest expense 23,605,348 20,562,352 88,479,856 90,910,818

INCOME BEFORE TAXES 4,342,976 3,422,972 17,929,128 18,533,432 Income tax provision (1,616,093) (1,179,017) (6,490,273) (6,386,040) NET INCOME 2,726,883 2,243,955 11,438,855 12,147,392

Less: Net income attributable to noncontrolling interest (43,720) (87,389) (227,005) (1,056,385) NET INCOME ATTRIBUTABLE TO MONARCH FINANCIAL HOLDINGS, INC $2,683,163 $2,156,566 $11,211,850 $11,091,007

NET INCOME PER COMMON SHARE:

Basic $ 0.25 $ 0.21 $ 1.06 $ 1.09 Diluted $ 0.25 $ 0.20 $ 1.05 $ 1.08

Weighted average basic shares outstanding 10,648,184 10,486,056 10,619,443 10,167,156 Weighted average diluted shares outstanding 10,689,219 10,535,313 10,658,600 10,299,471

Return on average assets 1.04% 0.86% 1.13% 1.07% Return on average stockholders’ equity 10.03% 8.88% 10.95% 11.97%

Financial Highlights Monarch Financial Holdings, Inc. and Subsidiaries
(Dollars in thousands, For the Quarter Ended except per share data) December 31, September 30, June 30, March 31, December 31,
2014 2014 2014 2014 2013 EARNINGS

Interest income $ 11,361 $ 10,639 $ 10,557 $ 10,434 $ 10,677 Interest expense (786) (928) (977) (971) (1,044) Net interest income 10,575 9,711 9,580 9,463 9,633 Provision for loan losses — — — — — Noninterest income – mortgage banking income 16,211 16,658 17,369 12,202 13,277 Noninterest income – other 1,162 1,241 1,130 1,106 1,075 Noninterest expense (23,605) (23,121) (23,007) (18,747) (20,562) Pre-tax net income 4,343 4,489 5,072 4,024 3,423 Minority interest in net income (44) (46) (121) (16) (87) Income taxes (1,616) (1,635) (1,767) (1,471) (1,179) Net income $ 2,683 $ 2,808 $ 3,184 $ 2,537 $ 2,157

PER COMMON SHARE

Earnings per share – basic $ 0.25 $ 0.26 $ 0.30 $ 0.24 $ 0.21 Earnings per share – diluted 0.25 0.26 0.30 0.24 0.20 Common stock – per share dividends 0.08 0.08 0.08 0.07 0.07 Average Basic Shares Outstanding 10,648,184 10,635,275 10,620,869 10,600,766 10,486,056 Average Diluted Shares Outstanding 10,689,219 10,670,507 10,660,217 10,641,782 10,535,313

ALLOWANCE FOR LOAN LOSSES

Beginning balance $ 8,977 $ 9,070 $ 9,213 $ 9,061 $ 11,228 Provision for loan losses — — — — — Charge-offs (174) (181) (184) (12) (2,252) Recoveries 146 88 41 164 85 Net charge-offs (28) (93) (143) 152 (2,167) Ending balance $ 8,949 $ 8,977 $ 9,070 $ 9,213 $ 9,061

COMPOSITION OF RISK ASSETS

Nonperforming loans:

90 days past due $ 175 $ 243 $ 499 $ 759 $ 472 Nonaccrual loans 2,705 2,180 3,028 1,718 1,740 OREO 144 767 144 302 302 Nonperforming assets 3,024 3,190 3,671 2,779 2,514

ASSET QUALITY RATIOS

Nonperforming assets to total assets 0.28% 0.31% 0.36% 0.27% 0.25% Nonperforming loans to total loans 0.37 0.34 0.50 0.35 0.31 Allowance for loan losses to total loans held for investment 1.16 1.26 1.30 1.29 1.27 Allowance for loan losses to nonperforming loans 310.73 370.49 257.16 371.94 409.63 Annualized net charge-offs to average loans held for investment 0.02 0.05 0.08 -0.09 1.25

FINANCIAL RATIOS

Return on average assets 1.04% 1.11% 1.29% 1.06% 0.86% Return on average stockholders’ equity 10.03 10.72 12.63 10.46 8.88 Net interest margin (FTE) 4.42 4.18 4.18 4.25 4.13 Non-interest revenue/Total revenue 60.5 62.7 63.7 56.1 57.3 Efficiency – Consolidated 84.5 83.7 81.8 82.1 85.5 Efficiency – Bank only 61.2 61.7 63.9 59.9 60.4 Average equity to average assets 10.39 10.40 10.18 10.13 9.73

PERIOD END BALANCES (Amounts in thousands)

Total mortgage loans held for sale $ 147,690 $ 138,590 $ 156,584 $ 92,839 $ 99,718 Total loans held for investment 772,590 713,667 700,159 715,088 712,671 Interest-earning assets 1,003,332 945,697 949,872 956,160 952,981 Assets 1,066,737 1,019,242 1,023,899 1,022,719 1,016,700 Total deposits 919,414 884,773 891,293 894,170 893,118 Other borrowings 21,075 11,100 11,125 11,150 11,175 Stockholders’ equity 107,451 105,089 102,706 99,859 97,519

AVERAGE BALANCES (Amounts in thousands)

Total mortgage loans held for sale $ 131,471 $ 138,382 $ 116,851 $ 70,856 $ 104,104 Total loans held for investment 725,093 701,137 698,851 704,917 695,074 Interest-earning assets 958,904 930,420 927,552 910,929 935,059 Assets 1,021,591 999,358 993,003 970,815 990,734 Total deposits 883,478 867,980 867,217 848,969 869,113 Other borrowings 14,575 11,124 11,150 11,174 11,199 Stockholders’ equity 106,088 103,908 101,092 98,374 96,415

MORTGAGE PRODUCTION (Amounts in thousands)

Dollar volume of mortgage loans closed $ 445,846 $ 440,784 $ 446,863 $ 271,233 $ 349,695 Percentage of refinance based on dollar volume 30.9% 16.0% 15.0% 19.1% 20.3%

Financials IndustryBanking & Budgetingmortgage loans Contact:

Brad E. Schwartz - (757) 389-5111, www.monarchbank.com

[…]

Monarch Financial Reports Financial Performance and Declares Cash Dividend

CHESAPEAKE, Va., July 24, 2014 (GLOBE NEWSWIRE) — Monarch Financial Holdings, Inc. (MNRK), the bank holding company for Monarch Bank, reported second quarter profitability and continued strong financial performance. The Board of Directors announced a quarterly common stock cash dividend of $0.08 per common share, payable on August 29, 2014, to shareholders of record on August 8, 2014.

Second quarter 2014 highlights are:

2nd quarter net income of $3,183,574 Return on Equity of 12.63% Return on Assets of 1.29% Diluted earnings per share of $0.30 Equity Capital exceeds $100 million for first time Non-performing assets at 0.36% of total assets $447 million in mortgage loans closed with 85% purchase

Year to date 2014 highlights are:

Net income of $5,720,839, for a return on equity of 11.57% Diluted earnings per share of $0.54 $718 million in mortgage loans closed with 84% purchase

“We are pleased to report our best quarter in the past year. Our efforts to structure the company for the future resulted in improved profitability for all of our business segments. Higher mortgage loan closings, non-existent credit costs, expense management, and a strong net interest margin continued to drive our bottom line results,” stated Brad E. Schwartz, Chief Executive Officer. “Our challenge going forward is growing our loan portfolio with our disciplined style for both credit quality and interest rate risk, in an otherwise undisciplined market. We are up to this challenge.”

Net income was $3,183,574 for the second quarter of 2014, a record for the past five quarters, and up 3.8% from the same period one year ago. The quarterly annualized return on average equity (ROE) was 12.63%, and the quarterly return on average assets (ROA) was 1.29%. Quarterly diluted earnings per share increased to $0.30, compared to $0.24 in the previous quarter and $0.29 for the same quarter in 2013.

Net income was $5,720,839 for the first six months of 2014. The annualized return on average equity (ROE) was 11.57%, and the quarterly return on average assets (ROA) was 1.18%. Diluted earnings per share were $0.54, compared to $0.62 for the same period in 2013.

Total assets at June 30, 2014 were $1.0 billion, with both loans held for investment and deposits slightly down since year-end 2013. The decline in our loans held for investment portfolio was due to several large payoffs, with $95 million in new loans booked in the first six months of the year. This decline was more than offset by growth in our mortgage loans held for sale portfolio driven by stronger mortgage loan closings. Funding continues to shift to a higher level of demand deposits and money market accounts, with 33% of our total deposit mix now in demand deposits. Demand deposit balances are at a record high. Our funding mix should enhance and protect the net interest margin when rates are predicted to rise in the next 12-24 months.

“Our loan pipeline remains robust and we continue to attract top quality clients for their commercial, construction, commercial real estate, and mortgage loan needs. Our cash management and retail deposit teams continue to perform at a high level, with almost a third of our deposits now in demand deposits — which also delivered positive growth in fee income,” stated Neal Crawford, President of Monarch Bank.

Non-performing assets to total assets were 0.36%, which remain significantly below that of our local, state, and national peer group. Non-performing assets were $3.7 million which was up slightly from the previous quarter and the same period in 2013. Non-performing assets were comprised of $3.0 million in non-accrual loans, $499 thousand in loans more than 90 days past due, and $144 thousand in one foreclosed property. Net recoveries for the year were $9 thousand and the allowance for loan losses represents 1.30% of loans held for investment and 257% of non-performing loans.

During the second quarter the Company’s equity capital exceeded $100 million for the first time in its 15 year history. The Board of Directors announced a quarterly common stock cash dividend of $0.08 per common share, payable on August 29, 2014, to shareholders of record on August 8, 2014. Even with two increases in the quarterly cash dividend in the past year, tangible book value per share has increased 8.2% to $9.59, with the stock now trading at 122% of book value. We consider our stock to be undervalued.

Capital strength continues to grow by every metric. Average equity to average assets improved to 10.18%, up from 8.88% one year prior. Total risk-based capital to risk weighted assets at Monarch Bank equaled 14.29%, significantly higher than the level required to be rated “Well Capitalized” by federal banking regulators. Monarch was again awarded the highest 5-Star “Superior” rating by Bauer Financial, an independent third-party bank rating agency that rates banks on safety and soundness.

Net interest income, our number one driver of profitability, declined 2.1% or $211 thousand during the second quarter of 2014 compared to the same quarter in 2013 driven by reduced balances in mortgage loans held for sale. Mortgage loans held for sale interest income declined $499 thousand compared to the same quarter of 2013, which was partially offset by growth in loans held for investment, investment income and a reduction in funding costs. The net interest margin was 4.18% for the second quarter, which was down from the previous quarter of 4.25% but up from 4.11% in the same quarter in 2013.

Non-interest income declined 14.7% or $3.2 million from the previous year driven by reduced revenues from mortgage loans sold and related title insurance fees. Investment and insurance revenue increased 37% compared to the previous year due to the continued growth of Monarch Bank Private Wealth. Mortgage revenue continues to be the number one driver of non-interest income. We closed $447 million in mortgage loans (85% purchase) during the second quarter of 2014 compared to $271 million (81% purchase) in the first quarter of 2014, a significant increase.

“The month of June was the best month in our company’s history for purchase mortgage closings, and our realtor and builder focus drove our higher second quarter volume. We are a leaner and more nimble mortgage operation that never stopped investing in our training, technology, marketing or our people when volumes were low. This formula should continue to differentiate us in our markets and lead to continued market share growth,” stated William T. Morrison, CEO of Monarch Mortgage.

Total non-interest expense declined 12.1% or $3.2 million during the second quarter due to reduced commissions and loan expenses. Net overhead, the difference between non-interest income and non-interest expense, improved by $10 thousand. To further improve our efficiency we have decided to close one banking office and one mortgage office in July, and soon plan to announce the relocation of two banking offices to improve our footprint and growth opportunities. These initiatives and many others have allowed us to improve our technology delivery, meet growing compliance burdens, and meet our client service expectations all while keeping our expense structure in line with revenue growth.

Monarch Financial Holdings, Inc. is the one-bank holding company for Monarch Bank. Monarch Bank is a community bank with eleven banking offices in Chesapeake, Virginia Beach, Norfolk, Suffolk, and Williamsburg, Virginia. Monarch Bank also has a loan production office in Newport News, Virginia. OBX Bank, a division of Monarch Bank, operates offices in Kitty Hawk and Nags Head, North Carolina. Monarch Mortgage and our affiliated mortgage companies have over thirty offices with locations in Virginia, North Carolina, Maryland, and South Carolina. Our subsidiaries/ divisions include Monarch Bank, OBX Bank, Monarch Mortgage (secondary mortgage origination), OBX Bank Mortgage (secondary mortgage origination), Coastal Home Mortgage, LLC (secondary mortgage origination), Monarch Bank Private Wealth (investment, trust, planning and private banking), Monarch Investments (investment and insurance solutions), Real Estate Security Agency, LLC (title agency) and Monarch Capital, LLC (commercial mortgage brokerage). The shares of common stock of Monarch Financial Holdings, Inc. are publicly traded on the Nasdaq Capital Market under the symbol “MNRK”.

This press release may contain “forward-looking statements,” within the meaning of federal securities laws that involve significant risks and uncertainties. Statements herein are based on certain assumptions and analyses by the Company and are factors it believes are appropriate in the circumstances. Actual results could differ materially from those contained in or implied by such statements for a variety of reasons including, but not limited to: changes in interest rates; changes in accounting principles, policies, or guidelines; significant changes in the economic scenario: significant changes in regulatory requirements; and significant changes in securities markets. Consequently, all forward-looking statements made herein are qualified by these cautionary statements and the cautionary language in the Company’s most recent Form 10-K and 10-Q reports and other documents filed with the Securities and Exchange Commission. The Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

Consolidated Balance Sheets Monarch Financial Holdings, Inc. and Subsidiaries (In thousands) Unaudited
June 30,
2014 March 31,
2014 December 31,
2013 September 30,
2013 June 30,
2013 ASSETS:

Cash and due from banks $ 19,661 $ 18,510 $ 18,971 $ 21,016 $ 19,050 Interest bearing bank balances 37,166 37,033 31,955 24,504 15,195 Federal funds sold 29,761 84,232 53,985 83,454 56,972

Investment securities, at fair value 23,773 23,197 48,822 16,973 16,573

Loans held for sale 156,584 92,839 99,718 120,435 166,586

Loans held for investment, net of unearned income 700,159 715,088 712,671 697,541 697,376 Less: allowance for loan losses (9,070) (9,213) (9,061) (11,228) (11,320) Net loans 691,089 705,875 703,610 686,313 686,056

Bank premises and equipment, net 31,407 29,902 28,882 28,454 28,101 Restricted equity securities, at cost 3,169 3,156 3,683 3,666 3,792 Bank owned life insurance 7,526 7,467 7,409 7,351 7,290 Goodwill 775 775 775 775 775 Intangible assets, net 15 60 104 149 194 Accrued interest receivable and other assets 22,973 19,673 18,786 18,857 20,815

Total assets $ 1,023,899 $ 1,022,719 $ 1,016,700 $ 1,011,947 $ 1,021,399

LIABILITIES:

Demand deposits—non-interest bearing $ 240,348 $ 221,357 $ 206,891 $ 222,079 $ 218,880 Demand deposits—interest bearing 51,563 55,949 55,528 48,244 52,101 Money market deposits 377,096 367,590 374,462 364,488 341,042 Savings deposits 24,539 24,327 22,137 22,665 22,172 Time deposits 197,747 224,947 234,100 228,652 264,491 Total deposits 891,293 894,170 893,118 886,128 898,686

FHLB borrowings 1,125 1,150 1,175 1,200 1,225 Short Term borrowings — — — — — Trust preferred subordinated debt 10,000 10,000 10,000 10,000 10,000 Accrued interest payable and other liabilities 18,650 17,422 14,661 17,855 16,733 Total liabilities 921,068 922,742 918,954 915,183 926,644

STOCKHOLDERS’ EQUITY:

Common stock 51,624 51,584 51,432 51,230 50,873 Capital in excess of par value 7,675 7,357 7,069 6,755 6,521 Retained earnings 43,566 41,232 39,437 38,014 36,233 Accumulated other comprehensive loss (159) (314) (419) (406) (480) Total Monarch Financial Holdings, Inc. stockholders’ equity 102,706 99,859 97,519 95,593 93,147 Noncontrolling interest 125 118 227 1,171 1,608 Total equity 102,831 99,977 97,746 96,764 94,755

Total liabilities and stockholders’ equity $ 1,023,899 $ 1,022,719 $ 1,016,700 $ 1,011,947 $ 1,021,399

Common shares outstanding at period end 10,624,668 10,619,444 10,502,323 10,480,023 10,408,544 Nonvested shares of common stock included in commons shares outstanding 299,910 302,710 215,960 233,960 233,960

Book value per common share at period end (1) $ 9.67 $ 9.40 $ 9.29 $ 9.12 $ 8.95 Tangible book value per common share at period end (2) $ 9.59 $ 9.33 $ 9.20 $ 9.03 $ 8.86 Closing market price $ 11.72 $ 12.26 $ 12.31 $ 11.72 $ 10.83

Total risk based capital – Consolidated company 14.29% 14.27% 13.91% 13.68% 13.46% Total risk based capital – Bank 14.31% 14.30% 13.95% 13.83% 13.66%

(1) Book value per common share is defined as stockholders’ equity divided by common shares outstanding. (2) Tangible book value per common share is defined as stockholders’ equity less goodwill and other intangibles divided by commons shares outstanding.
Consolidated Statements of Income Monarch Financial Holdings, Inc. and Subsidiaries Unaudited
Three Months Ended
June 30, Six Months Ended
June 30,
2014 2013 2014 2013 INTEREST INCOME:

Interest on federal funds sold $ 24,179 $ 25,312 $ 64,557 $ 30,470 Interest on other bank accounts 54,905 9,952 90,937 18,094 Dividends on equity securities 22,410 69,225 52,410 143,660 Interest on investment securities 91,929 57,302 167,978 114,871 Interest on loans held for sale 1,274,498 1,773,692 2,047,230 4,507,264 Interest and fees on loans held for investment 9,089,071 9,040,004 18,567,963 18,014,998 Total interest income 10,556,992 10,975,487 20,991,075 22,829,357 INTEREST EXPENSE:

Interest on deposits 839,303 1,020,913 1,673,716 2,050,375 Interest on trust preferred subordinated debt 123,359 124,200 245,696 243,242 Interest on other borrowings 14,224 38,810 28,586 327,988 Total interest expense 976,886 1,183,923 1,947,998 2,621,605 NET INTEREST INCOME 9,580,106 9,791,564 19,043,077 20,207,752 PROVISION FOR LOAN LOSSES — — — —

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 9,580,106 9,791,564 19,043,077 20,207,752

NON-INTEREST INCOME:

Mortgage banking income 17,369,228 20,572,388 29,571,390 36,738,324 Service charges and fees 538,579 477,660 1,008,791 928,814 Title income 167,454 232,423 272,488 486,774 Investment and insurance income 335,887 245,524 781,359 452,460 Other income 87,725 146,276 173,496 248,917 Total non-interest income 18,498,873 21,674,271 31,807,524 38,855,289 NON-INTEREST EXPENSE:

Salaries and employee benefits 8,492,446 8,502,755 16,764,007 16,707,830 Commissions and incentives 6,770,022 9,703,820 10,780,986 16,769,296 Occupancy and equipment 2,395,088 2,130,445 4,671,791 3,996,963 Loan expense 2,060,570 2,630,295 3,423,711 4,460,732 Marketing expense 797,908 744,646 1,319,749 1,257,604 Data processing 476,806 435,771 956,084 836,729 Telephone 293,451 308,138 604,588 563,062 Other expenses 1,720,693 1,717,014 3,232,701 3,441,289 Total non-interest expense 23,006,984 26,172,884 41,753,617 48,033,505

INCOME BEFORE TAXES 5,071,995 5,292,951 9,096,984 11,029,536 Income tax provision (1,767,500) (1,797,773) (3,238,740) (3,791,326) NET INCOME 3,304,495 3,495,178 5,858,244 7,238,210

Less: Net income attributable to noncontrolling interest (120,921) (428,540) (137,405) (713,443) NET INCOME ATTRIBUTABLE TO MONARCH FINANCIAL HOLDINGS, INC. $3,183,574 $3,066,638 $5,720,839 $ 6,524,767

NET INCOME PER COMMON SHARE:

Basic $ 0.30 $ 0.29 $ 0.54 $ 0.66 Diluted $ 0.30 $ 0.29 $ 0.54 $ 0.62

Weighted average basic shares outstanding 10,620,869 10,401,992 10,596,786 9,854,418 Weighted average diluted shares outstanding 10,660,217 10,483,420 10,636,968 10,467,707

Return on average assets 1.29% 1.19% 1.18% 1.23% Return on average stockholders’ equity 12.63% 13.42% 11.57% 14.61%

Financial Highlights

Monarch Financial Holdings, Inc. and Subsidiaries

(Dollars in thousands, For the Quarter Ended except per share data) June 30, March 31, December 31, September 30, June 30,
2014 2014 2013 2013 2013 EARNINGS

Interest income $ 10,557 $ 10,434 $ 10,677 $ 10,842 $ 10,976 Interest expense (977) (971) (1,044) (1,121) (1,184) Net interest income 9,580 9,463 9,633 9,721 9,792 Provision for loan losses — — — — — Noninterest income – mortgage banking income 17,369 12,202 13,277 15,657 20,572 Noninterest income – other 1,130 1,106 1,075 1,018 1,102 Noninterest expense (23,007) (18,747) (20,562) (22,315) (26,173) Pre-tax net income 5,072 4,024 3,423 4,081 5,293 Minority interest in net income (121) (16) (87) (255) (428) Income taxes (1,767) (1,471) (1,179) (1,416) (1,798) Net income $ 3,184 $ 2,537 $ 2,157 $ 2,410 $ 3,067

PER COMMON SHARE

Earnings per share – basic $ 0.30 $ 0.24 $ 0.21 $ 0.23 $ 0.29 Earnings per share – diluted 0.30 0.24 0.20 0.23 0.29 Common stock – per share dividends 0.08 0.07 0.07 0.06 0.06 Average Basic Shares Outstanding 10,620,869 10,600,766 10,486,056 10,464,992 10,401,992 Average Diluted Shares Outstanding 10,660,217 10,641,782 10,535,313 10,519,472 10,483,420

ALLOWANCE FOR LOAN LOSSES

Beginning balance $ 9,213 $ 9,061 $ 11,228 $ 11,320 $ 10,788 Provision for loan losses — — — — — Charge-offs (184) (12) (2,252) (137) (279) Recoveries 41 164 85 45 811 Net charge-offs (143) 152 (2,167) (92) 532 Ending balance $ 9,070 $ 9,213 $ 9,061 $ 11,228 $ 11,320

COMPOSITION OF RISK ASSETS

Nonperforming loans:

90 days past due $ 499 $ 759 $ 472 $ 82 $ — Nonaccrual loans 3,028 1,718 1,740 2,814 2,889 OREO 144 302 302 95 95 Nonperforming assets 3,671 2,779 2,514 2,991 2,984

ASSET QUALITY RATIOS

Nonperforming assets to total assets 0.36 % 0.27 % 0.25 % 0.30 % 0.29 % Nonperforming loans to total loans 0.50 0.35 0.31 0.42 0.41 Allowance for loan losses to total loans held for investment 1.30 1.29 1.27 1.61 1.62 Allowance for loan losses to nonperforming loans 257.16 371.94 409.63 387.71 391.83 Annualized net charge-offs to average loans held for investment 0.08 -0.09 1.25 0.05 -0.31

FINANCIAL RATIOS

Return on average assets 1.29 % 1.06 % 0.86 % 0.94 % 1.19 % Return on average stockholders’ equity 12.63 10.46 8.88 10.18 13.42 Net interest margin (FTE) 4.18 4.25 4.13 4.11 4.11 Non-interest revenue/Total revenue 63.7 56.1 57.3 60.4 66.4 Efficiency – Consolidated 81.8 82.1 85.5 84.8 83.0 Efficiency – Bank only 63.9 59.9 60.4 59.1 58.2 Average equity to average assets 10.18 10.13 9.73 9.27 8.88

PERIOD END BALANCES (Amounts in thousands)

Total loans held for sale $ 156,584 $ 92,839 $ 99,718 $ 120,435 $ 166,586 Total loans held for investment 700,159 715,088 712,671 697,541 697,376 Interest-earning assets 949,872 956,160 952,981 950,760 960,481 Assets 1,023,899 1,022,719 1,016,700 1,011,947 1,021,399 Total deposits 891,293 894,170 893,118 886,128 898,686 Other borrowings 11,125 11,150 11,175 11,200 11,225 Stockholders’ equity 102,706 99,859 97,519 95,593 93,147

AVERAGE BALANCES (Amounts in thousands)

Total loans held for sale $ 116,851 $ 70,856 $ 104,104 $ 136,660 $ 200,733 Total loans held for investment 698,851 704,917 695,074 692,731 680,037 Interest-earning assets 927,552 910,929 935,059 946,575 964,872 Assets 993,003 970,815 990,734 1,013,932 1,032,345 Total deposits 867,217 848,969 869,113 882,553 908,229 Other borrowings 11,150 11,174 11,199 11,257 11,250 Stockholders’ equity 101,092 98,374 96,415 93,958 91,638

MORTGAGE PRODUCTION (Amounts in thousands)

Dollar volume of mortgage loans closed $ 446,863 $ 271,233 $ 349,695 $ 478,304 $ 607,189 Percentage of refinance based on dollar volume 15.0 % 19.1 % 20.3 % 22.6 % 39.2 % Banking & BudgetingFinancials Industrymortgage loans Contact:

Brad E. Schwartz - (757) 389-5111, www.monarchbank.com

[…]

Who Hates Payday Loans the Most | Visual.ly

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Consumers seem to harbor a deep-rooted hatred for the payday loan industry. The infographic Who Hates Payday Loans the Most explores just how much borrowers and non-borrowers despise these loans and what specifics they hate the most. Check out the full infographic to see more facts about payday loan consumers and their influencers.

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Bankies warned about payday loans / Clydebank Post / News …

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Bankies warned about payday loans

Published 18 Oct 2012 13:00

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RESIDENTS in Clydebank have been warned by the Credit Union against taking out costly payday loans.

Glasgow Credit Union has criticised lenders such as Wonga who offer the payday loan service as they believe users are only paying back interest instead of any of the borrowed balance.

More than 1.2 million Brits each year are reported to be turning to payday loans with some offering interest rates of more than 4,000 per cent.

June Walker of Glasgow Credit Union insists there are better alternatives than turning to payday loans as the country prepares to gear up for Christmas.

She said: “We launched our consolidation loan product to prevent our customers getting caught in spiralling debt. The fact that more than 1.2million has been borrowed in just 14 weeks highlights the scale of personal debt within the UK.

“Economic uncertainty and increased spending in the run up to Christmas will only exacerbate this problem.”

Return to the main index, get more from this section or browse our News archives.

Copyright ©2012 Clyde Weekly Press, 1st Floor, Carus House, 201 Dumbarton Road, Clydebank G81 4XJ • Tel: 0141 435 8888 • Fax: 0141 952 7267

[…]

Lakeland Bancorp Reports 14% Increase in Net Income and Raises Cash Dividend

OAK RIDGE, N.J., Oct. 16, 2012 (GLOBE NEWSWIRE) — Lakeland Bancorp, Inc. (LBAI) reported Net Income Available to Common Shareholders of $5.5 million or $0.20 per diluted share for the third quarter of 2012 compared to $4.8 million, or $0.18 per diluted share for the same period last year. The annualized Return on Average Assets in the third quarter of 2012 was 0.77%, while the annualized Return on Average Common Equity was 8.48%. Net Income Available to Common Shareholders for the first nine months of 2012 was $15.3 million or $0.56 per diluted share, 19% above the $12.9 million, or $0.48 per diluted share reported for the same period last year.

The Company declared a quarterly cash dividend of $0.07 per common share, an increase of $0.01 per common share from the previous quarter. The cash dividend will be paid on November 15, 2012 to holders of record as of the close of business on October 31, 2012.

Thomas J. Shara, Lakeland Bancorp’s President and CEO said, “We are pleased to report strong quarterly and year-to-date financial results, as well as improved credit trends. Furthermore, we successfully completed a $25 million common stock offering and raised the cash dividend 17%.”

Earnings

Net Interest Income

Net interest income for the third quarter of 2012 was $23.7 million, as compared to $24.4 million for the same period in 2011. The annualized Net Interest Margin (“NIM”) for the third quarter of 2012 was 3.66%, which compared to 3.85% reported in the third quarter of 2011. The decrease in NIM in the third quarter as compared to the same period last year reflects a greater reduction in yields on interest-earning assets as compared to interest-bearing liabilities. The annualized yield on interest-earning assets declined to 4.25% in the third quarter of 2012 compared to 4.63% for the same period last year. The annualized cost of interest-bearing liabilities decreased from 0.95% in the third quarter of 2011 to 0.74% in the third quarter of 2012. Subsequent to the end of the third quarter of 2012 on October 7, 2012, the Company redeemed $25.8 million of junior subordinated debentures with a coupon rate of 7.535%. This transaction will have a positive impact on the cost of interest-bearing liabilities in the fourth quarter this year.

Year-to-date, net interest income at $71.3 million compared to the $73.4 million reported for the first nine months of 2011. Annualized NIM for the first nine months of 2012 at 3.70% compared to 3.89% for the same period last year. The Company’s annualized yield on earning assets decreased from 4.69% for the first nine months of 2011, to 4.34% for the same period this year. The Company’s cost of interest bearing liabilities decreased from 0.98% for the first nine months of 2011 to 0.79% for the same period this year.

Noninterest Income

Noninterest income, exclusive of gains on sales of investment securities, totaled $4.6 million for the third quarter of 2012, as compared to $4.3 million for the same period last year, an increase of 8%. In the third quarter of 2011, the Company recorded $785,000 on gains on sales of investment securities, as compared to no gains for the same period this year. Service charges on deposit accounts totaling $2.8 million increased by 5% primarily due to the implementation of a new demand deposit pricing structure in the second quarter of 2012. Commissions and fees at $1.2 million increased by $247,000, or 27%, primarily due to increased loan fees.

Noninterest income, exclusive of gains on sales of investment securities, totaled $13.2 million for the first nine months of 2012, which was $389,000 higher than last year’s nine month total. Gains on investment securities totaled $273,000 in 2012 as compared to $1.2 million in 2011. Service charges on deposit accounts at $7.9 million were up 3%, while commissions and fees at $3.4 million increased by 22%, primarily due to increased loan fees and investment commission income. Gains on leasing related assets at $403,000 decreased by $407,000 in 2012, reflecting the reduction in the size of the leasing portfolio.

Noninterest Expense

Noninterest expense for the third quarter of 2012 was $17.0 million, as compared to $18.0 million for the same period last year. Included in the third quarter 2011 total was an $800,000 prepayment fee on long-term debt. Salary and benefit expense at $9.6 million increased by 3%. Legal expense at $135,000 was $322,000 lower than the third quarter of 2011 partially due to a $150,000 recovery in the third quarter of 2012 of previously expensed legal fees. Net occupancy expense at $1.8 million increased by 7%, primarily due to expenses incurred relating to the new operations and training center that was opened in the second quarter of 2012. Expenses on other real estate owned and other repossessed assets declined $323,000 as compared to the same period last year.

For the first nine months of 2012, noninterest expense was $49.7 million, compared to $51.8 million in 2011. Salary and benefit costs at $28.6 million increased 4%, while occupancy, furniture and equipment expenses at $8.6 million decreased by 2%. FDIC insurance expense at $1.6 million decreased by $558,000, or 26%, resulting from a change in FDIC assessment rate methodology. Core deposit intangibles were fully amortized in 2011, which resulted in a $577,000 reduction in expenses in 2012, while expenses on other real estate owned and other repossessed assets declined by $719,000 compared to the first nine months of 2011.

Financial Condition

At September 30, 2012, total assets were $2.86 billion, an increase of $33.7 million from December 31, 2011. Total loans were $2.06 billion, an increase of $23.6 million from $2.04 billion at year-end 2011, primarily due to increases in commercial real estate loans and residential mortgage loans of $15.8 million and $13.5 million, respectively. Total deposits were $2.34 billion, an increase of $91.5 million from December 31, 2011. Noninterest bearing demand deposits at $485.3 million have increased by $35.7 million or 8% from year-end 2011. Savings and interest-bearing transaction accounts at $1.54 billion have increased by $94.9 million, primarily in the public funds sector, while time deposits at $320.4 million, have decreased by $39.1 million.

Asset Quality

At September 30, 2012, non-performing assets totaled $29.2 million (1.02% of total assets) compared to $35.3 million (1.24% of total assets) at June 30, 2012. The Allowance for Loan and Lease Losses totaled $28.7 million at September 30, 2012 and represented 1.39% of total loans, and 101% of non-performing loans. In the third quarter of 2012, the Company had net charge offs totaling $3.2 million, or 0.63% of average loans. For the first nine months of 2012, the Company had net charge-offs of $11.5 million, as compared to $13.7 million for the same period last year.

Capital

At September 30, 2012, stockholders’ equity was $277.5 million and book value per common share was $9.35, as compared to $8.99 at year-end 2011. As of September 30, 2012, the Company’s leverage ratio was 9.05%. Tier I and total risk based capital ratios were 12.24% and 14.14%, respectively. These regulatory capital ratios exceed those necessary to be considered a well-capitalized institution under Federal guidelines. As previously discussed, the Company repaid $25.8 million in subordinated debentures. The Company’s pro forma capital ratios considering the payment of the subordinated debentures would have been 8.61%, 11.65% and 12.90% for the leverage ratio, the Tier I risk based capital ratio and the total risk based capital ratio, respectively.

Forward-Looking Statements

The information disclosed in this document includes various forward-looking statements (with respect to corporate objectives, trends, and other financial and business matters) 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. Lakeland 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. 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, 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 affecting the financial services industry, government intervention in the U.S. financial system, changes in levels of market interest rates, pricing pressures on loan and deposit products, credit risks of the Company’s lending and leasing activities, customers’ acceptance of the Company’s products and services and competition. Any statements made by Lakeland that are not historical facts should be considered to be forward-looking statements. Lakeland 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 accounting principles generally accepted in the United States of America (“GAAP”). The Company’s management believes that the supplemental non-GAAP information, which consists of measurements and ratios based on tangible equity and tangible assets, is utilized by regulators and market analysts to evaluate a company’s financial condition and therefore, such information is useful to investors. 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.

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, expenses on other real estate owned and other repossessed assets and, where applicable, long-term debt prepayment fees. Income for the non-GAAP ratio is increased by the favorable effect of tax-exempt income and excludes securities gains and losses, which can vary from period to period. The Company uses this ratio because it believes the ratio provides a better comparison of period to period operating performance.

Lakeland Bancorp, the holding company for Lakeland Bank, has a current asset base of $2.9 billion and forty-six (46) offices spanning six northwestern New Jersey counties: Bergen, Essex, Morris, Passaic, Sussex and Warren. Lakeland Bank, headquartered at 250 Oak Ridge Road, Oak Ridge, New Jersey offers an extensive array of consumer and commercial products and services, including online banking, localized commercial lending teams, and 24-hour or less turnaround time on consumer loan applications. For more information about their full line of products and services, visit their website at www.lakelandbank.com.

Lakeland Bancorp, Inc. Financial Highlights (unaudited)

Three Months Ended September 30, Nine Months Ended September 30,

2012 2011 2012 2011
(Dollars in thousands except per share amounts) INCOME STATEMENT

Net Interest Income $ 23,655 $ 24,351 $ 71,349 $ 73,356 Provision for Loan and Lease Losses (3,350) (4,058) (11,783) (14,391) Noninterest Income (excluding investment securities gains/losses) 4,640 4,310 13,195 12,806 Gains on investment securities — 785 273 1,229 Noninterest Expense (16,968) (18,040) (49,713) (51,798) Pretax Income 7,977 7,348 23,321 21,202 Tax Expense (2,488) (2,242) (7,408) (6,467) Net Income $ 5,489 $ 5,106 $ 15,913 $ 14,735 Dividends on Preferred Stock and Discount Accretion — (293) (620) (1,873) Net Income Available to Common Stockholders $ 5,489 $ 4,813 $ 15,293 $ 12,862

Basic Earnings Per Common Share (1) $ 0.20 $ 0.18 $ 0.56 $ 0.48 Diluted Earnings Per Common Share (1) $ 0.20 $ 0.18 $ 0.56 $ 0.48 Dividends per Common Share (1) $ 0.06 $ 0.057 $ 0.18 $ 0.17 Weighted Average Shares – Basic (1) 27,550 26,588 26,998 26,552 Weighted Average Shares – Diluted (1) 27,642 26,639 27,065 26,681

SELECTED OPERATING RATIOS

Annualized Return on Average Assets 0.77% 0.73% 0.75% 0.71% Annualized Return on Average Common Equity 8.48% 8.59% 8.55% 8.54% Annualized Return on Average Tangible Common Equity (3) 12.81% 13.63% 13.16% 13.74% Annualized Return on Interest Earning Assets 4.25% 4.63% 4.34% 4.69% Annualized Cost of Interest Bearing Liabilities 0.74% 0.95% 0.79% 0.98% Annualized Net interest spread 3.51% 3.68% 3.55% 3.71% Annualized Net interest margin 3.66% 3.85% 3.70% 3.89% Efficiency ratio (3) 58.91% 57.01% 57.93% 56.61% Stockholders’ equity to total assets

9.71% 9.30% Book value per common share (1) (2)

$ 9.35 $ 8.82 Tangible book value per common share (1) (2) (3)

$ 6.41 $ 5.57 Tangible common equity to tangible assets (2) (3)

6.87% 5.63%

ASSET QUALITY RATIOS

9/30/2012 12/31/2011 Ratio of allowance for loan and lease losses to total loans

1.39% 1.39% Non-performing loans to total loans

1.37% 2.40% Non-performing assets to total assets

1.02% 1.78% Annualized net charge-offs to average loans

0.75% 0.89%

SELECTED BALANCE SHEET DATA AT PERIOD-END

9/30/2012 12/31/2011 Loans and Leases

$ 2,064,913 $ 2,041,326 Allowance for Loan and Lease Losses

(28,669) (28,416) Investment Securities

521,294 543,644 Total Assets

2,859,647 2,825,950 Total Deposits

2,341,108 2,249,653 Short-Term Borrowings

54,581 72,131 Other Borrowings

172,322 232,322 Stockholders’ Equity

277,544 259,783

SELECTED AVERAGE BALANCE SHEET DATA For the Three Months Ended For the Nine Months Ended
9/30/2012 9/30/2011 9/30/2012 9/30/2011 Loans and Leases, net $ 2,062,928 $ 1,982,637 $ 2,063,609 $ 1,988,585 Investment Securities 501,862 518,194 508,254 531,078 Interest-Earning Assets 2,598,061 2,537,284 2,599,163 2,552,144 Total Assets 2,827,885 2,762,305 2,818,326 2,773,858 Non Interest-Bearing Demand Deposits 477,311 424,938 466,747 412,435 Savings Deposits 350,135 334,909 346,829 330,103 Interest-Bearing Transaction Accounts 1,169,953 1,058,085 1,149,501 1,075,313 Time Deposits 324,355 397,029 335,947 407,182 Total Deposits 2,321,754 2,214,961 2,299,024 2,225,033 Short-Term Borrowings 50,180 58,983 63,402 60,986 Other Borrowings 184,023 222,086 190,992 221,147 Total Interest-Bearing Liabilities 2,078,647 2,071,092 2,086,671 2,094,731 Stockholders’ Equity 257,557 254,174 251,185 254,237 Common Stockholders’ Equity 257,557 235,785 248,622 230,689

(1) Adjusted for 5% stock dividend payable on April 16, 2012 to shareholders of record March 30, 2012. (2) Excludes preferred stock (3) See supplemental information – non-GAAP financial measures

Lakeland Bancorp, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

Three Months Ended September 30, Nine Months Ended September 30,
2012 2011 2012 2011 (dollars in thousands, except per share amounts)

INTEREST INCOME

Loans and fees $24,929 $25,999 $75,659 $78,784 Federal funds sold and interest bearing deposits with banks 17 16 29 39 Taxable investment securities and other 2,121 2,773 6,668 8,448 Tax exempt investment securities 428 500 1,371 1,506 TOTAL INTEREST INCOME 27,495 29,288 83,727 88,777 INTEREST EXPENSE

Deposits 2,026 2,572 6,421 8,310 Federal funds purchased and securities sold under agreements to repurchase 12 18 68 73 Other borrowings 1,802 2,347 5,889 7,038 TOTAL INTEREST EXPENSE 3,840 4,937 12,378 15,421 NET INTEREST INCOME 23,655 24,351 71,349 73,356 Provision for loan and lease losses 3,350 4,058 11,783 14,391 NET INTEREST INCOME AFTER PROVISION FOR

LOAN AND LEASE LOSSES 20,305 20,293 59,566 58,965 NONINTEREST INCOME

Service charges on deposit accounts 2,757 2,623 7,914 7,672 Commissions and fees 1,162 915 3,401 2,787 Gains on sales of investment securities — 785 273 1,229 Income on bank owned life insurance 357 356 1,035 1,070 Gain on leasing related assets 100 117 403 810 Other income 264 299 442 467 TOTAL NONINTEREST INCOME 4,640 5,095 13,468 14,035 NONINTEREST EXPENSE

Salaries and employee benefits 9,578 9,280 28,578 27,465 Net occupancy expense 1,807 1,692 5,131 5,205 Furniture and equipment 1,205 1,172 3,427 3,561 Stationery, supplies and postage 388 298 1,079 1,058 Marketing expense 718 612 1,646 1,846 Amortization of core deposit intangibles — 46 — 577 FDIC insurance expense 519 636 1,620 2,178 Collection expense 58 70 231 195 Legal expense 135 457 880 1,163 Expenses on other real estate owned and other repossessed assets 13 336 89 808 Long-term debt prepayment fee — 800 — 800 Other expenses 2,547 2,641 7,032 6,942 TOTAL NONINTEREST EXPENSE 16,968 18,040 49,713 51,798 INCOME BEFORE PROVISION FOR INCOME TAXES 7,977 7,348 23,321 21,202 Provision for income taxes 2,488 2,242 7,408 6,467 NET INCOME $5,489 $5,106 $15,913 $14,735 Dividends on Preferred Stock and Discount Accretion — 293 620 1,873 Net Income Available to Common Stockholders $5,489 $4,813 $15,293 $12,862 EARNINGS PER COMMON SHARE

Basic $0.20 $0.18 $0.56 $0.48 Diluted $0.20 $0.18 $0.56 $0.48 DIVIDENDS PER COMMON SHARE $0.06 $0.057 $0.18 $0.17

Lakeland Bancorp, Inc. and Subsidiaries CONSOLIDATED BALANCE SHEETS

September 30, December 31, ASSETS 2012 2011 (dollars in thousands) (unaudited)
Cash and due from banks $95,702 $60,688 Federal funds sold and interest-bearing deposits due from banks 7,349 11,870 Total cash and cash equivalents 103,051 72,558

Investment securities available for sale, at fair value 419,449 463,611 Investment securities held to maturity; fair value of $99,237 in 2012 and $74,274 in 2011 95,996 71,700 Federal Home Loan Bank Stock, at cost 5,849 8,333 Loans:

Commercial, secured by real estate 1,107,907 1,092,120 Commercial, industrial and other 201,308 209,915 Leases 26,548 28,879 Residential mortgages 419,685 406,222 Consumer and home equity 309,465 304,190 Total loans 2,064,913 2,041,326 Deferred cost (134) 249 Allowance for loan and lease losses (28,669) (28,416) Net loans 2,036,110 2,013,159 Premises and equipment, net 33,237 27,917 Accrued interest receivable 8,065 8,369 Goodwill 87,111 87,111 Bank owned life insurance 45,773 44,760 Other assets 25,006 28,432 TOTAL ASSETS $2,859,647 $2,825,950

LIABILITIES AND STOCKHOLDERS’ EQUITY LIABILITIES:

Deposits:

Noninterest bearing $485,256 $449,560 Savings and interest-bearing transaction accounts 1,535,422 1,440,541 Time deposits under $100,000 196,939 211,797 Time deposits $100,000 and over 123,491 147,755 Total deposits 2,341,108 2,249,653 Federal funds purchased and securities sold under agreements to repurchase 54,581 72,131 Other borrowings 95,000 155,000 Subordinated debentures 77,322 77,322 Other liabilities 14,092 12,061 TOTAL LIABILITIES 2,582,103 2,566,167

STOCKHOLDERS’ EQUITY

Preferred stock, Series A, no par value, $1,000 liquidation value, authorized
1,000,000 shares; issued 0 shares at September 30, 2012 and 19,000 shares at December 31, 2011 — 18,480 Common stock, no par value; authorized 40,000,000 shares; issued 29,941,967 shares at September 30, 2012 and 27,275,480 shares at December 31, 2011 303,719 270,044 Accumulated Deficit (27,895) (26,061) Treasury shares, at cost, 251,425 shares at September 30, 2012 and 439,340 shares at December 31, 2011 (3,163) (5,551) Accumulated other comprehensive gain 4,883 2,871 TOTAL STOCKHOLDERS’ EQUITY 277,544 259,783 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $2,859,647 $2,825,950
Lakeland Bancorp, Inc. Financial Highlights (unaudited)

For the quarter ended
Sept 30, Jun 30, Mar 31, Dec 31, Sept 30, (dollars in thousands, except per share data) 2012 2012 2012 2011 2011 INCOME STATEMENT (unaudited) Net Interest Income $ 23,655 $ 23,748 $ 23,946 $ 24,057 $ 24,351 Provision for Loan and Lease Losses (3,350) (3,877) (4,556) (4,425) (4,058) Noninterest Income (excluding investment securities gains) 4,640 4,530 4,025 4,082 4,310 Gains on investment securities — 241 32 — 785 Long-term debt prepayment fee — — — — (800) Noninterest Expense, excluding long-term debt prepayment fee (16,968) (16,470) (16,275) (16,353) (17,240) Pretax Income 7,977 8,172 7,172 7,361 7,348 Tax Expense (2,488) (2,719) (2,201) (2,245) (2,242) Net Income $ 5,489 $ 5,453 $ 4,971 $ 5,116 $ 5,106 Dividends on Preferred Stock and Discount Accretion — — (620) (294) (293) Net Income Available to Common Stockholders $ 5,489 $ 5,453 $ 4,351 $ 4,822 $ 4,813

Basic Earnings Per Common Share (1) $ 0.20 $ 0.20 $ 0.16 $ 0.18 $ 0.18 Diluted Earnings Per Common Share (1) $ 0.20 $ 0.20 $ 0.16 $ 0.18 $ 0.18 Dividends per Common Share (1) $ 0.060 $ 0.060 $ 0.057 $ 0.057 $ 0.057 Weighted Average Shares – Basic (1) 27,550 26,737 26,700 26,629 26,589 Weighted Average Shares – Diluted (1) 27,642 26,800 26,747 26,688 26,638

SELECTED OPERATING RATIOS

Annualized Return on Average Assets 0.77% 0.78% 0.71% 0.72% 0.73% Annualized Return on Average Common Equity 8.48% 8.94% 8.23% 8.50% 8.59% Annualized Return on Tangible Common Equity (3) 12.81% 13.87% 12.83% 13.39% 13.63% Annualized Net Interest Margin 3.66% 3.70% 3.76% 3.73% 3.85% Efficiency ratio (3) 58.91% 57.18% 57.71% 57.67% 57.01% Stockholders’ equity to total assets 9.71% 8.65% 8.48% 9.19% 9.30% Common stockholders’ equity to total assets 9.71% 8.65% 8.48% 8.54% 8.62% Tangible common equity to tangible assets (3) 6.87% 5.78% 5.60% 5.63% 5.63% Tier 1 risk-based ratio 12.24% 10.21% 9.92% 11.23% 11.21% Total risk-based ratio 14.14% 12.59% 12.37% 13.39% 13.46% Tier 1 leverage ratio 9.05% 7.62% 7.46% 8.33% 8.29% Book value per common share (1) (2) $ 9.35 $ 9.15 $ 8.97 $ 8.99 $ 8.82 Tangible book value per common share (1) (2) (3) $ 6.41 $ 5.92 $ 5.74 $ 5.75 $ 5.57

(1) Adjusted for 5% stock dividend payable on April 16, 2012 to shareholders of record March 30, 2012.

(2) Excludes preferred stock

(3) See Supplemental Information – Non GAAP financial measures

Lakeland Bancorp, Inc. Financial Highlights (unaudited)

For the quarter ended
Sept 30, Jun 30, Mar 31, Dec 31, Sept 30, (dollars in thousands) 2012 2012 2012 2011 2011
(unaudited) SELECTED BALANCE SHEET DATA AT PERIOD-END

Loans and Leases $ 2,064,913 $ 2,088,695 $ 2,073,527 $ 2,041,326 $ 1,991,874 Allowance for Loan and Lease Losses (28,669) (28,543) (28,700) (28,416) (28,024) Investment Securities 521,294 516,432 522,761 543,644 515,019 Total Assets 2,859,647 2,853,202 2,852,347 2,825,950 2,741,768 Total Deposits 2,341,108 2,277,400 2,288,128 2,249,653 2,232,565 Short-Term Borrowings 54,581 92,958 96,453 72,131 53,175 Other Borrowings 172,322 222,322 212,322 232,323 187,322 Stockholders’ Equity 277,544 246,941 241,955 259,783 254,898

Loans and Leases

Commercial real estate $ 1,107,907 $ 1,116,726 $ 1,114,042 $ 1,092,120 $ 1,064,009 Commercial, industrial and other 201,308 216,406 219,270 209,915 195,121 Leases 26,548 25,603 26,214 28,879 36,178 Residential mortgages 419,685 421,338 412,027 406,222 392,454 Consumer and Home Equity 309,465 308,622 301,974 304,190 304,112 Total loans $ 2,064,913 $ 2,088,695 $ 2,073,527 $ 2,041,326 $ 1,991,874

Deposits

Noninterest bearing $ 485,256 $ 474,233 $ 476,349 $ 449,560 $ 424,789 Savings and interest-bearing transaction accounts 1,535,422 1,476,127 1,473,051 1,440,541 1,411,058 Time deposits under $100,000 196,939 201,817 206,766 211,797 222,337 Time deposits $100,000 and over 123,491 125,223 131,962 147,755 174,381 Total deposits $ 2,341,108 $ 2,277,400 $ 2,288,128 $ 2,249,653 $ 2,232,565

SELECTED AVERAGE BALANCE SHEET DATA

Loans and Leases, net $ 2,062,928 $ 2,077,813 $ 2,050,093 $ 2,024,559 $ 1,982,637 Investment Securities 501,862 502,931 520,039 530,171 518,194 Interest-Earning Assets 2,598,061 2,605,294 2,592,654 2,585,062 2,537,284 Total Assets 2,827,885 2,820,789 2,806,197 2,809,452 2,762,305 Non Interest-Bearing Demand Deposits 477,311 473,853 448,893 452,638 424,938 Savings Deposits 350,135 352,095 338,221 332,258 334,909 Interest-Bearing Transaction Accounts 1,169,953 1,141,263 1,137,069 1,128,338 1,058,085 Time Deposits 324,355 332,669 350,937 380,443 397,029 Total Deposits 2,321,754 2,299,880 2,275,120 2,293,677 2,214,961 Short-Term Borrowings 50,180 71,558 68,612 54,056 58,983 Other Borrowings 184,023 190,478 198,553 190,826 222,086 Total Interest-Bearing Liabilities 2,078,647 2,088,062 2,093,392 2,085,921 2,071,092 Stockholders’ Equity 257,557 245,253 250,676 257,164 254,174 Common Stockholders’ Equity 257,557 245,253 242,957 238,713 235,785
Lakeland Bancorp, Inc. Financial Highlights (unaudited)

For the quarter ended
Sept 30, Jun 30, Mar 31, Dec 31, Sept 30, (dollars in thousands) 2012 2012 2012 2011 2011
(unaudited) AVERAGE ANNUALIZED YIELDS (taxable equivalent basis)

Assets:

Loans and leases 4.81% 4.89% 4.99% 5.06% 5.20% Taxable investment securities and other 1.96% 2.03% 2.09% 2.12% 2.48% Tax-exempt securities 3.84% 4.09% 4.14% 4.28% 4.33% Federal funds sold and interest-bearing cash accounts 0.20% 0.10% 0.11% 0.16% 0.18% Total interest-earning assets 4.25% 4.35% 4.43% 4.46% 4.63% Liabilities:

Savings accounts 0.10% 0.11% 0.11% 0.11% 0.12% Interest-bearing transaction accounts 0.40% 0.44% 0.45% 0.51% 0.50% Time deposits 0.94% 0.97% 1.02% 1.07% 1.13% Borrowings 3.10% 3.13% 3.13% 3.47% 3.37% Total interest-bearing liabilities 0.74% 0.81% 0.83% 0.90% 0.95% Net interest spread (taxable equivalent basis) 3.51% 3.54% 3.60% 3.56% 3.68% Annualized Net Interest Margin (taxable equivalent basis) 3.66% 3.70% 3.76% 3.73% 3.85% Annualized Cost of Deposits 0.35% 0.37% 0.40% 0.44% 0.46%

ASSET QUALITY DATA

Allowance for Loan and Lease Losses

Balance at beginning of period $ 28,543 $ 28,700 $ 28,416 $ 28,024 $ 28,252 Provision for loan losses 3,350 3,877 4,556 4,425 4,058 Net Charge-offs (3,224) (4,034) (4,272) (4,033) (4,286) Balance at end of period $ 28,669 $ 28,543 $ 28,700 $ 28,416 $ 28,024

Net Loan Charge-offs (Recoveries)

Commercial real estate $ 1,420 $ 2,938 $ 3,550 $ 1,367 $ 1,420 Commercial, industrial and other 258 258 (30) (201) 1,929 Leases 291 150 (210) 358 353 Home equity and consumer 334 528 617 1,355 422 Real estate – mortgage 921 160 345 1,154 162 Net charge-offs $ 3,224 $ 4,034 $ 4,272 $ 4,033 $ 4,286

Nonperforming Assets

Commercial real estate $ 14,211 $ 18,843 $ 23,119 $ 28,971 $ 30,970 Commercial, industrial and other 1,533 1,650 5,611 4,608 4,416 Leases 294 536 621 575 4,670 Home equity and consumer 3,104 2,818 2,725 3,252 3,840 Real estate – mortgage 9,235 10,197 9,943 11,610 12,503 Total non-accruing loans 28,377 34,044 42,019 49,016 56,399 Property acquired through foreclosure or repossession 775 1,250 1,314 1,182 1,342 Total non-performing assets $ 29,152 $ 35,294 $ 43,333 $ 50,198 $ 57,741

Loans past due 90 days or more $ 1,828 $ 1,566 $ 2,343 $ 1,367 $ 1,304 Loans restructured and still accruing $ 10,937 $ 10,776 $ 8,744 $ 8,856 $ 6,075

Ratio of allowance for loan and lease losses to total loans 1.39% 1.37% 1.38% 1.39% 1.41% Non-performing loans to total loans 1.37% 1.63% 2.03% 2.40% 2.83% Non-performing assets to total assets 1.02% 1.24% 1.52% 1.78% 2.11% Annualized net charge-offs to average loans 0.63% 0.78% 0.83% 0.80% 0.86%

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

At or for the quarter ended,
Sept 30, Jun 30, Mar 31, Dec 31, Sept 30, (dollars in thousands, except per share amounts) 2012 2012 2012 2011 2011 Calculation of tangible book value per common share

Total common stockholders’ equity at end of period – GAAP $ 277,544 $ 246,941 $ 241,955 $ 241,303 $ 236,474 Less:

Goodwill 87,111 87,111 87,111 87,111 87,111 Other identifiable intangible assets, net — — — — — Total tangible common stockholders’ equity at end of period – Non- GAAP $ 190,433 $ 159,830 $ 154,844 $ 154,192 $ 149,363

Shares outstanding at end of period (1) 29,691 26,993 26,963 26,836 26,804

Book value per share – GAAP (1) $ 9.35 $ 9.15 $ 8.97 $ 8.99 $ 8.82

Tangible book value per share – Non-GAAP (1) $ 6.41 $ 5.92 $ 5.74 $ 5.75 $ 5.57

Calculation of tangible common equity to tangible assets

Total tangible common stockholders’ equity at end of period – Non- GAAP $ 190,433 $ 159,830 $ 154,844 $ 154,192 $ 149,363

Total assets at end of period $ 2,859,647 $ 2,853,202 $ 2,852,347 $ 2,825,950 $ 2,741,768 Less:

Goodwill 87,111 87,111 87,111 87,111 87,111 Other identifiable intangible assets, net — — — — — Total tangible assets at end of period – Non-GAAP $ 2,772,536 $ 2,766,091 $ 2,765,236 $ 2,738,839 $ 2,654,657

Common equity to assets – GAAP 9.71% 8.65% 8.48% 8.54% 8.62%

Tangible common equity to tangible assets – Non-GAAP 6.87% 5.78% 5.60% 5.63% 5.63%

Calculation of return on average tangible common equity

Net income – GAAP $ 5,489 $ 5,453 $ 4,971 $ 5,116 $ 5,106

Total average common stockholders’ equity 257,557 245,253 242,957 238,713 235,785 Less:

Average goodwill 87,111 87,111 87,111 87,111 87,111 Average other identifiable intangible assets, net — — — — 15 Total average tangible common stockholders’ equity – Non – GAAP $ 170,446 $ 158,142 $ 155,846 $ 151,602 $ 148,659

Return on average common stockholders’ equity – GAAP 8.48% 8.94% 8.23% 8.50% 8.59%

Return on average tangible common stockholders’ equity – Non-GAAP 12.81% 13.87% 12.83% 13.39% 13.63%

Calculation of efficiency ratio

Total non-interest expense $ 16,968 $ 16,470 $ 16,275 $ 16,353 $ 18,040 Less:

Amortization of core deposit intangibles — — — — (46) Other real estate owned and other repossessed asset (expense) income (13) (38) (38) 28 (336) Long-term debt prepayment fee — — — — (800) Provision for unfunded lending commitments, net (150) (122) 56 3 (365) Non-interest expense, as adjusted $ 16,805 $ 16,310 $ 16,293 $ 16,384 $ 16,493

Net interest income $ 23,655 $ 23,748 $ 23,946 $ 24,057 $ 24,351 Noninterest income 4,640 4,771 4,057 4,082 5,095 Total revenue 28,295 28,519 28,003 28,139 29,446 Plus: Tax-equivalent adjustment on municipal securities 230 244 264 269 269 Less: (gains) on investment securities — (241) (32) — (785) Total revenue, as adjusted $ 28,525 $ 28,522 $ 28,235 $ 28,408 $ 28,930

Efficiency ratio – Non-GAAP 58.91% 57.18% 57.71% 57.67% 57.01%

(1) Adjusted for 5% stock dividend payable on April 16, 2012 to shareholders of record March 30, 2012.
Lakeland Bancorp, Inc. Supplemental Information – Non-GAAP Financial Measures (unaudited)

For the Nine Months Ended,
September 30 September 30 (dollars in thousands, except per share amounts) 2012 2011 Calculation of return on average tangible common equity

Net income – GAAP $ 15,913 $ 14,735 Total average common stockholders’ equity $ 248,622 $ 230,689 Less:

Average goodwill 87,111 87,111 Average other identifiable intangible assets, net — 221 Total average tangible common stockholders’ equity – Non GAAP $ 161,511 $ 143,357 Return on average common stockholders’ equity – GAAP 8.55% 8.54% Return on average tangible common stockholders’ equity – Non-GAAP 13.16% 13.74% Calculation of efficiency ratio

Total non-interest expense $ 49,713 $ 51,798 Less:

Amortization of core deposit intangibles — (577) Other real estate owned and other repossessed asset expense (89) (808) Long-term debt prepayment fee — (800) Provision for unfunded lending commitments (217) (378) Non-interest expense, as adjusted $ 49,407 $ 49,235 Net interest income $ 71,349 $ 73,356 Noninterest income 13,468 14,035 Total revenue 84,817 87,391 Plus: Tax-equivalent adjustment on municipal securities 738 811 Less: gains on investment securities (273) (1,229) Total revenue, as adjusted $ 85,282 $ 86,973 Efficiency ratio – Non – GAAP 57.93% 56.61%

Contact:

Thomas J. Shara
President & CEO
Joseph F. Hurley
EVP & CFO
973-697-2000

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