GlobeNewswire Inc | Jan 26, 2022 08:00AM EST

January 26, 2022

OAK RIDGE, N.J., Jan. 26, 2022 (GLOBE NEWSWIRE) -- Lakeland Bancorp, Inc. (NASDAQ: LBAI) (the Company), the parent company of Lakeland Bank (Lakeland), reported net income of $22.2 million and earnings per diluted share ("EPS") of $0.43 for the three months ended December31, 2021, compared to net income of $18.8 million and diluted EPS of $0.37 for the fourth quarter of 2020. For the fourth quarter of 2021, annualized return on average assets was 1.06%, annualized return on average common equity was 10.70% and annualized return on average tangible common equity was 13.26%.

For the year ended December31, 2021, the Company reported net income of $95.0 million, a 65% increase compared to $57.5 million for the same period in 2020, resulting in return on average assets of 1.19%, return on average common equity of 11.95%, and return on average tangible common equity of 14.93%. For 2021, the Company reported diluted EPS of $1.85, compared to diluted EPS of $1.13 for 2020.

The current year results were favorably impacted by negative provisions for credit losses of $10.9 million compared to provisions of $27.2 million for 2020 as forecasted macroeconomic conditions have improved and Lakeland's asset quality continues to be strong. Fourth quarter 2021 results were favorably impacted by a $3.9 million increase in net interest income and a $1.4 million reduction in non-interest expenses compared to the fourth quarter of 2020.

Thomas Shara, Lakeland Bancorps President and CEO commented, "We ended 2021 with strong quarterly and annual earnings. We experienced total asset growth of 7%, deposit growth of 8% and non-performing assets declined by 60% during 2021. With the acquisition of 1st Constitution Bancorp on January 6, 2022, we expanded Lakeland's presence into central New Jersey and look forward to bringing our banking model into the desirable markets of Mercer, Middlesex and Monmouth counties. Full systems integration is progressing well andis expected to be completed in February 2021."

Full Year 2021 Highlights

-- Total asset growth of 7% to $8.20 billion at December31, 2021. -- Deposit generation of 8% or $510.0 million, including 15% growth in noninterest-bearing deposits. -- In September 2021, the Company issued $150.0 million Fixed-to-Floating Rate Subordinated Notes at a fixed rate of 2.875% per annum until September 2026 when the interest rate will reset to the three-month Secured Overnight Financing Rate plus a spread of 220 basis points, and redeemed $75.0 million of its outstanding 5.125% Fixed-to-Floating Rate Subordinated Notes. -- Net interest margin for 2021 increased four basis points to 3.13% compared to 2020 due primarily to a reduction in the cost of interest-bearing liabilities. -- Non-performing assets declined to $17.0 million at December31, 2021 compared to $42.8 million at December 31, 2020. -- Paycheck Protection Program ("PPP") loans outstanding totaled $56.6 million at December 31, 2021 compared to $284.6 million at December 31, 2020. Unamortized net deferred fees on PPP loans totaled $1.6 million at December 31, 2021 compared to $5.8 million at December 31, 2020. -- Net loan charge-offs for the year totaled $2.2 million, or 0.04% of average loans.

Net Interest Margin and Net Interest Income

Net interest margin for the fourth quarter of 2021 of 2.98% decreased 10 basis points compared to the fourth quarter of 2020 and decreased 12 basis points compared to the third quarter of 2021. The decrease compared to the fourth quarter of 2020 was primarily a result of a decrease in the yield on loans and securities as well as an increase in lower yielding federal funds sold. The decrease in net interest margin compared to the third quarter of 2021 was due primarily to a decrease in the yield on loans and an increase in lower yielding average securities balances. Net interest margin for 2021 of 3.13% increased four basis points compared to 3.09% for 2020 due primarily to a reduction in the cost of interest-bearing liabilities.

The yield on interest-earning assets for the fourth quarter of 2021 was 3.22% compared to 3.51% for the fourth quarter of 2020 and 3.40% for the third quarter of 2021. The decrease in yield on interest-earning assets when compared to the fourth quarter 2020 was due primarily to a reduction in the yield on loans and securities as well as increased balances in lower yielding average federal funds sold. The decrease in yield on interest-earning assets when compared to the third quarter of 2021 was due primarily to a reduction in the yield on loans and increased balances in lower yielding average securities. The yield on interest-earning assets for 2021 was 3.43% compared to 3.70% for 2020 resulting primarily from a reduction in the yield on interest earning assets and increased balances in lower yielding average federal funds sold as a result of maintaining excess liquidity during the pandemic.

The cost of interest-bearing liabilities decreased in the fourth quarter of 2021 to 0.33% compared to 0.59% for the fourth quarter of 2020 and 0.41% for the third quarter of 2021. The cost of interest-bearing liabilities for 2021 was 0.42% compared to 0.83% during the same period in 2020. The reduction in the cost of interest-bearing liabilities compared to prior periods was largely driven by reductions in market interest rates as well as a change in the mix of interest-bearing liabilities as balances of higher cost time deposits decreased while lower cost interest-bearing transaction account balances increased. Additionally, replacing the Company's existing subordinated debt with a new issuance at a lower interest rate during 2021 decreased the cost of borrowings.

Net interest income increased to $59.0million for the fourth quarter of 2021 compared to $55.1million for the fourth quarter of 2020, due primarily to lower interest rates on interest-bearing liabilities as well as the growth of interest-earning assets partially offset by lower yields on interest-earning assets. Net interest income for 2021 was $234.8million, as compared to $207.7million for 2020 due to the same reasons discussed in the quarterly comparison.

Noninterest Income

Noninterest income decreased $981,000 to $5.9million for the fourth quarter of 2021 from $6.8million for the fourth quarter of 2020. Commissions and fees in the fourth quarter of 2021 increased $612,000 compared to the same period in 2020 due primarily to increases in investment commission income and commercial loan fees. Gain on sales of loans in the fourth quarter of 2021 decreased $361,000 due primarily to the Company retaining more originated residential mortgage loans in the loan portfolio. Fourth quarter 2020 results included an $871,000 gain on sales of securities compared to no gain on sales of securities during the same period in 2021. There was no swap income recorded in the fourth quarter of 2021 compared to $485,000 during the same period in 2020 due primarily to changes in the yield curve which decreases the demand for swap transactions.

For 2021, noninterest income decreased $4.7million to $22.4million compared to 2020 due primarily to a reduction in swap income. Service charges on deposit accounts increased $708,000 compared to 2020 due primarily to increases in debit card income. Commissions and fees in 2021 increased $1.1million compared to 2020 due to the same reasons discussed in the quarterly comparison. Gains on sales of loans and swap income decreased $1.1million and $4.1million, respectively, compared to 2020, both due primarily to the same reasons discussed in the quarterly comparison. Gain on sales and calls of investment securities totaled $9,000 in 2021 compared to $1.2million in 2020.

Noninterest Expense

Noninterest expense totaled $35.6million for the fourth quarter of 2021, a decrease of $1.4million compared to the fourth quarter of 2020 due primarily to long-term debt prepayment fees of $3.8million recorded in the fourth quarter of 2020 to deploy excess liquidity. Compensation and employee benefit expense in the fourth quarter of 2021 increased $1.0million, or 5%, compared to the fourth quarter of 2020 due primarily to staff additions and normal merit increases. In the fourth quarter of 2021, premises and equipment expense increased $549,000 due primarily to an increase in IT service agreement expense, and data processing expense increased $341,000 due primarily to increased fees from service providers compared to the fourth quarter of 2020. The fourth quarter of 2021 included $710,000 in merger-related costs for the acquisition of 1st Constitution Bancorp.

For 2021, noninterest expense increased $8.0million to $140.8million compared to $132.8million for 2020 due primarily to compensation and employee benefit expense which increased $6.1million, or 8%. The increase in compensation and employee benefits expense was due primarily to the same reasons discussed in the quarterly comparison. Premises and equipment expense in 2021 increased $2.9million due to the same reason discussed in the quarterly comparison. Noninterest expense in 2021 included merger-related expenses of $1.8million for the acquisition of 1st Constitution Bancorp. Additionally, noninterest expense in 2020 included $4.1million in long-term debt prepayment fees compared to none in 2021.

Income Tax Expense

The effective tax rate for the fourth quarter of 2021 was 23.4% compared to 22.3% for the fourth quarter of 2020. The effective tax rate for 2021 was 25.4% compared to 23.1% for 2020. The increased effective tax rate for 2021 periods was primarily a result of tax advantaged items declining as a percentage of pretax income due to the increase in pretax income.

Financial Condition

At December 31, 2021, total assets were $8.20 billion, an increase of $533.8 million or 7% compared to December 31, 2020. For the year ended December 31, 2021, total loans declined $45.1 million to $5.98 billion due to a decline in PPP loans of $228.1 million, partially offset by an increase in other loan categories of $183.0 million, primarily in the multifamily and residential mortgage loan segments. Investment securities increased $648.1million or 67% to $1.62 billion during 2021 as the Company deployed liquidity into the investment portfolio. On the funding side, total deposits increased $510.0million or 8% to $6.97 billion primarily in the saving and interest bearing transaction accounts category, while borrowings decreased $2.3 million or 1% to $310.5 million for the year ended December 31, 2021. At December 31, 2021, total loans as a percent of total deposits was 85.8%.

Asset Quality

At December 31, 2021, non-performing assets decreased 60% to $17.0 million, 0.21% of total assets, compared to $42.8 million, 0.56% of total assets, at December31, 2020. Non-accrual loans as a percent of total loans decreased to 0.28% at December 31, 2021 compared to 0.71% at December31, 2020. At December 31, 2021, the allowance for credit losses decreased to $58.0 million, 0.97% of total loans compared to $71.1 million, 1.18% of total loans, at December31, 2020. In the fourth quarter of 2021, the Company had net recoveries of $181,000, or 0.01% of average loans, annualized, compared to net charge-offs of $528,000, or 0.04% of average loans, annualized, for the same period in 2020. Provision for credit losses on loans for the fourth quarter of 2021 was a benefit of $87,000 compared to a benefit of $246,000 in the fourth quarter of 2020.

Capital

At December 31, 2021, stockholders' equity increased 8% to $827.0 million as compared to $763.8 million at December31, 2020. Lakeland Bancorp remains above FDIC well capitalized standards, with a Tier 1 leverage ratio of 8.51% at December31, 2021. The book value per common share and tangible book value per common share increased 8.0% and 10.4% to $16.34 and $13.21, respectively, compared to $15.13 and $11.97 at December31, 2020 (see "Supplemental Information - Non-GAAP Financial Measures" for a reconciliation of non-GAAP financial measures, including tangible book value). On January24, 2022, the Company declared a quarterly cash dividend of $0.135 per share to be paid on February17, 2022, to shareholders of record as of February7, 2022.

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, 2020, 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, changes in economic conditions nationally, regionally and in the Companys 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, pricing pressures on loan and deposit products, credit risks of the Companys lending and leasing activities, successful implementation, deployment and upgrades of new and existing technology, systems, services and products, customers acceptance of the Companys products and services, competition, and 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. 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. The pandemic and related local and national economic disruption may, among other effects, result in a material adverse change for the demand for our products and services; increased levels of loan delinquencies, problem assets and foreclosures; branch disruptions, unavailability of personnel and increased cybersecurity risks as employees work remotely. 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 Companys management uses in its analysis of the Companys 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 companys financial condition and, therefore, the Companys 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" 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 $8.20 billion in total assets at December 31, 2021. On January 6, 2022, the Company completed its acquisition of 1st Constitution Bancorp, which represents a significant addition to the Company's New Jersey franchise. 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 973-697-2000 for more information.

Thomas J. Shara Thomas F. SplainePresident & CEO EVP & CFO

Lakeland Bancorp, Inc.Financial Highlights(Unaudited) Three Months Ended Year Ended December 31, December 31,(dollars inthousands, except 2021 2020 2021 2020 per share amounts)Income Statement Net interest income $ 59,029 $ 55,135 $ 234,835 $ 207,687 (Provision) benefit (408 ) (789 ) 10,896 (27,222 )for credit lossesGain on investmentsecurities ? 871 9 1,213 transactions, netGain on sales of 399 760 2,264 3,322 loans(Loss) gain on (94 ) 73 (285 ) (552 )equity securitiesOther noninterest 5,559 5,141 20,373 23,127 incomeLong-term debt ? (3,777 ) ? (4,133 )prepayment feesLong-term debtextinguishment ? ? (831 ) ? costsMerger-related (710 ) ? (1,782 ) ? expensesOther noninterest (34,840 ) (33,168 ) (138,144 ) (128,665 )expensePretax income 28,935 24,246 127,335 74,777 Provision for (6,765 ) (5,398 ) (32,294 ) (17,259 )income taxesNet income $ 22,170 $ 18,848 $ 95,041 $ 57,518 Basic earnings per $ 0.43 $ 0.37 $ 1.85 $ 1.13 common shareDiluted earnings $ 0.43 $ 0.37 $ 1.85 $ 1.13 per common shareDividends paid per $ 0.135 $ 0.125 $ 0.530 $ 0.500 common shareWeighted average 50,647 50,527 50,624 50,540 shares - basicWeighted average 50,959 50,672 50,870 50,650 shares - diluted Selected Operating RatiosAnnualized return 1.06 % 0.98 % 1.19 % 0.80 %on average assetsAnnualized returnon average common 10.70 % 9.96 % 11.95 % 7.74 %equityAnnualized returnon average tangible 13.26 % 12.64 % 14.93 % 9.86 %common equity (1)Annualized yield oninterest-earning 3.22 % 3.51 % 3.43 % 3.70 %assetsAnnualized cost ofinterest-bearing 0.33 % 0.59 % 0.42 % 0.83 %liabilitiesAnnualized net 2.89 % 2.92 % 3.02 % 2.87 %interest spreadAnnualized net 2.98 % 3.08 % 3.13 % 3.09 %interest marginEfficiency ratio 53.19 % 53.74 % 53.23 % 54.54 %(1)Stockholders'equity to total 10.09 % 9.97 %assetsBook value per $ 16.34 $ 15.13 common shareTangible book valueper common share $ 13.21 $ 11.97 (1)Tangible commonequity to tangible 8.31 % 8.05 %assets (1) Asset Quality December 31, December 31,Ratios 2021 2020Ratio of allowancefor credit losses 0.97 % 1.18 %on loans to totalloansNon-performingloans to total 0.28 % 0.71 %loansNon-performingassets to total 0.21 % 0.47 %assetsNet charge-offs to 0.04 % 0.03 %average loans (1) See Supplemental Information - Non-GAAP Financial Measures Lakeland Bancorp, Inc.Financial Highlights(Unaudited) (dollars in December 31, December 31,thousands)Selected BalanceSheet Data at 2021 2020 Period EndLoans $ 5,976,148 $ 6,021,232 Allowance forcredit losses on 58,047 71,124 loansInvestment 1,621,329 973,185 securitiesTotal assets 8,198,056 7,664,297 Total deposits 6,965,823 6,455,783 Short-term 106,453 169,560 borrowingsOther borrowings 204,043 143,257 Stockholders' 827,014 763,784 equity Three Months Ended Year Ended December 31, December 31, 2021 2020 2021 2020 Selected Average Balance Sheet DataLoans $ 5,902,152 $ 5,939,904 $ 6,003,325 $ 5,626,273 Investment 1,423,650 912,723 1,160,503 889,223 securitiesInterest-earning 7,874,181 7,137,884 7,516,662 6,735,825 assetsTotal assets 8,332,637 7,625,458 7,974,905 7,208,366 Noninterest-bearing 1,775,119 1,499,093 1,671,889 1,362,918 demand depositsSavings deposits 670,039 571,794 642,298 535,754 Interest-bearingtransaction 3,862,443 3,313,556 3,613,484 3,035,626 accountsTime deposits 781,199 1,112,053 882,379 1,064,187 Total deposits 7,088,800 6,496,496 6,810,050 5,998,485 Short-term 112,533 68,962 95,111 92,425 borrowingsOther borrowings 204,266 155,943 162,643 244,000 Totalinterest-bearing 5,630,479 5,222,308 5,395,915 4,971,992 liabilitiesStockholders' 822,001 753,059 795,554 743,225 equity

Lakeland Bancorp, Inc.Consolidated Statements of Income(Unaudited) Three Months Ended Year Ended December 31, December 31,(in thousands, except per share 2021 2020 2021 2020 amounts) Interest Income Loans and fees $ 57,773 $ 58,553 $ 237,037 $ 229,036 Federal funds sold andinterest-bearing deposits with 190 61 440 348 banksTaxable investment securities and 4,966 3,680 17,208 17,811 otherTax exempt investment securities 802 565 2,633 1,647 Total Interest Income 63,731 62,859 257,318 248,842 Interest Expense Deposits 3,444 6,090 16,793 32,059 Federal funds purchased andsecurities sold under agreements 20 25 78 556 to repurchaseOther borrowings 1,238 1,609 5,612 8,540 Total Interest Expense 4,702 7,724 22,483 41,155 Net Interest Income 59,029 55,135 234,835 207,687 Provision (benefit) for credit 408 789 (10,896 ) 27,222 lossesNet Interest Income after 58,621 54,346 245,731 180,465 Provision for Credit LossesNoninterest Income Service charges on deposit 2,579 2,485 9,856 9,148 accountsCommissions and fees 1,977 1,365 6,939 5,868 Income on bank owned life 754 657 2,676 2,657 insurance(Loss) gain on equity securities (94 ) 73 (285 ) (552 )Gain on sales of loans 399 760 2,264 3,322 Gain on investment securities ? 871 9 1,213 transactions, netSwap income ? 485 634 4,719 Other income 249 149 268 735 Total Noninterest Income 5,864 6,845 22,361 27,110 Noninterest Expense Compensation and employee 20,186 19,188 82,589 76,470 benefitsPremises and equipment 6,171 5,622 24,773 21,871 FDIC insurance 548 750 2,341 2,123 Data processing 1,405 1,064 5,454 4,964 Merger-related expenses 710 ? 1,782 ? Long-term debt prepayment fees ? 3,777 ? 4,133 Other operating expenses 6,530 6,544 23,818 23,237 Total Noninterest Expense 35,550 36,945 140,757 132,798 Income before provision for 28,935 24,246 127,335 74,777 income taxesProvision for income taxes 6,765 5,398 32,294 17,259 Net Income $ 22,170 $ 18,848 $ 95,041 $ 57,518 Per Share of Common Stock Basic earnings $ 0.43 $ 0.37 $ 1.85 $ 1.13 Basic earnings $ 0.43 $ 0.37 $ 1.85 $ 1.13 Dividends $ 0.135 $ 0.125 $ 0.530 $ 0.500

Lakeland Bancorp, Inc.Consolidated Balance Sheets (dollars in thousands) December 31, December 31, 2021 2020 (Unaudited) Assets Cash $ 199,158 $ 262,327 Interest-bearing deposits due from banks 29,372 7,763 Total cash and cash equivalents 228,530 270,090 Investment securities available for sale, atestimated fair value (allowance for credit 769,956 855,746 losses of $83 at December 31, 2021 and $2 atDecember 31, 2020 )Investment securities held to maturity(estimated fair value of $815,211 atDecember 31, 2021 and $93,868 at December 824,956 90,766 31, 2020, allowance for credit losses of$181 at December 31, 2021 and none atDecember 31, 2020)Equity securities, at fair value 17,368 14,694 Federal Home Loan Bank and other membership 9,049 11,979 stocks, at costLoans held for sale 1,943 1,335 Loans, net of deferred fees 5,976,148 6,021,232 Less: Allowance for credit losses 58,047 71,124 Net loans 5,918,101 5,950,108 Premises and equipment, net 45,916 48,495 Operating lease right-of-use assets 15,222 16,772 Accrued interest receivable 19,209 19,339 Goodwill 156,277 156,277 Other identifiable intangible assets 2,420 3,288 Bank owned life insurance 117,356 115,115 Other assets 71,753 110,293 Total Assets $ 8,198,056 $ 7,664,297 Liabilities and Stockholders' Equity Liabilities Deposits: Noninterest-bearing $ 1,732,452 $ 1,510,224 Savings and interest-bearing transaction 4,474,144 3,867,303 accountsTime deposits $250 thousand and under 623,393 895,056 Time deposits over $250 thousand 135,834 183,200 Total deposits 6,965,823 6,455,783 Federal funds purchased and securities sold 106,453 169,560 under agreements to repurchaseOther borrowings 25,000 25,000 Subordinated debentures 179,043 118,257 Operating lease liabilities 16,523 18,183 Other liabilities 78,200 113,730 Total Liabilities 7,371,042 6,900,513 Stockholders' Equity Common stock, no par value; authorized100,000,000 shares; issued 50,737,400 sharesand outstanding 50,606,365 shares at 565,862 562,421 December31, 2021 and issued 50,610,681shares and outstanding 50,479,646 shares atDecember31, 2020Retained earnings 259,340 191,418 Treasury shares, at cost, 131,035 shares at (1,452 ) (1,452 )December 31, 2021 and December 31, 2020Accumulated other comprehensive income 3,264 11,397 Total Stockholders' Equity 827,014 763,784 Total Liabilities and Stockholders' Equity $ 8,198,056 $ 7,664,297

Lakeland Bancorp, Inc.Financial Highlights(Unaudited) For the Quarter Ended December September June 30, March 31, December 31, 30, 31,(dollars inthousands, except 2021 2021 2021 2021 2020 per share data) Income Statement Net interest income $ 59,029 $ 59,338 $ 59,740 $ 56,728 $ 55,135 (Provision) benefitfor credit losses (408 ) 2,703 5,959 2,642 (789 )(1)Gain on investmentsecurities ? ? 9 ? 871 transactions, netGain on sales of 399 550 607 708 760 loans(Loss) gain on (94 ) (58 ) 11 (144 ) 73 equity securitiesOther noninterest 5,559 4,977 4,642 5,195 5,141 incomeLong-term debtextinguishment ? (831 ) ? ? ? costsLong-term debt ? ? ? ? (3,777 )prepayment feesMerger-related (710 ) (1,072 ) ? ? ? expensesOther noninterest (34,840 ) (35,304 ) (34,097 ) (33,903 ) (33,168 )expensePretax income 28,935 30,303 36,871 31,226 24,246 Provision for (6,765 ) (8,014 ) (9,464 ) (8,051 ) (5,398 )income taxesNet income $ 22,170 $ 22,289 $ 27,407 $ 23,175 $ 18,848 Basic earnings per $ 0.43 $ 0.43 $ 0.53 $ 0.45 $ 0.37 common shareDiluted earnings $ 0.43 $ 0.43 $ 0.53 $ 0.45 $ 0.37 per common shareDividends paid per $ 0.135 $ 0.135 $ 0.135 $ 0.125 $ 0.125 common shareDividends paid $ 6,921 $ 7,001 $ 6,828 $ 6,369 $ 6,364 Weighted average 50,647 50,637 50,636 50,576 50,527 shares - basicWeighted average 50,959 50,875 50,858 50,780 50,672 shares - diluted Selected Operating RatiosAnnualized return 1.06 % 1.10 % 1.41 % 1.22 % 0.98 %on average assetsAnnualized returnon average common 10.70 % 10.94 % 14.07 % 12.20 % 9.96 %equityAnnualized returnon average tangible 13.26 % 13.63 % 17.67 % 15.39 % 12.64 %common equity (2)Annualized net 2.98 % 3.10 % 3.27 % 3.19 % 3.08 %interest marginEfficiency ratio 53.19 % 54.02 % 51.98 % 53.75 % 53.74 %(2)Commonstockholders' 10.09 % 9.96 % 10.14 % 9.88 % 9.97 %equity to totalassetsTangible commonequity to tangible 8.31 % 8.18 % 8.29 % 8.00 % 8.05 %assets (2)Tier 1 risk-based 11.15 % 11.19 % 10.78 % 10.47 % 10.22 %ratioTotal risk-based 14.48 % 14.73 % 13.11 % 13.02 % 12.85 %ratioTier 1 leverage 8.51 % 8.60 % 8.70 % 8.51 % 8.37 %ratioCommon equity tier 10.67 % 10.70 % 10.29 % 9.98 % 9.73 %1 capital ratioBook value per $ 16.34 $ 16.09 $ 15.74 $ 15.18 $ 15.13 common shareTangible book valueper common share $ 13.21 $ 12.95 $ 12.60 $ 12.03 $ 11.97 (2)

(1) The Company adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("CECL") on December 31, 2020, with a transition adjustment retroactive to January 1, 2020.

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

Lakeland Bancorp, Inc.Financial Highlights(Unaudited) For the Quarter Ended December 31, September 30, June 30, March 31, December 31,(dollars in 2021 2021 2021 2021 2020 thousands) Selected BalanceSheet Data at Period EndLoans $ 5,976,148 $ 5,880,802 $ 5,988,832 $ 6,108,946 $ 6,021,232 Allowance forcredit losses on 58,047 57,953 60,389 67,252 71,124 loans (3)Investment 1,621,329 1,248,705 1,107,601 1,078,750 973,185 securitiesTotal assets 8,198,056 8,172,479 7,854,238 7,771,761 7,664,297 Total deposits 6,965,823 6,930,912 6,715,035 6,635,226 6,455,783 Short-term 106,453 111,907 100,190 111,999 169,560 borrowingsOther borrowings 204,043 212,107 138,045 143,267 143,257 Stockholders' 827,014 814,128 796,676 768,065 763,784 equity Loans Non owner occupied $ 2,316,284 $ 2,300,637 $ 2,330,376 $ 2,375,024 $ 2,398,946 commercialOwner occupied 908,449 884,144 870,535 857,506 827,092 commercialMultifamily 972,233 907,903 902,394 858,168 813,225 Non owner occupied 177,097 177,592 189,765 195,534 200,229 residentialCommercial,industrial and 405,832 363,976 358,659 394,416 433,553 otherConstruction 302,228 332,868 335,167 291,252 266,883 Paycheck Protection 56,574 109,348 207,045 346,150 284,636 ProgramEquipment financing 123,212 119,709 121,096 119,428 116,690 Residential 438,710 407,021 391,589 385,778 377,380 mortgagesConsumer and home 275,529 277,604 282,206 285,690 302,598 equityTotal loans $ 5,976,148 $ 5,880,802 $ 5,988,832 $ 6,108,946 $ 6,021,232 Deposits Noninterest-bearing $ 1,732,452 $ 1,724,646 $ 1,683,887 $ 1,631,942 $ 1,510,224 Savings andinterest-bearing 4,474,144 4,401,367 4,198,709 4,049,914 3,867,303 transactionaccountsTime deposits 759,227 804,899 832,439 953,370 1,078,256 Total deposits $ 6,965,823 $ 6,930,912 $ 6,715,035 $ 6,635,226 $ 6,455,783 Total loans tototal deposits 85.8 % 84.8 % 89.2 % 92.1 % 93.3 %ratio Selected Average Balance Sheet DataLoans $ 5,902,152 $ 5,943,698 $ 6,080,408 $ 6,089,757 $ 5,939,904 Investment 1,423,650 1,144,356 1,066,086 1,003,479 912,723 securitiesInterest-earning 7,874,181 7,611,259 7,342,952 7,230,136 7,137,884 assetsTotal assets 8,332,637 8,070,050 7,784,385 7,704,603 7,625,458 Noninterest-bearing 1,775,119 1,702,788 1,660,825 1,545,968 1,499,093 demand depositsSavings deposits 670,039 653,840 639,540 604,931 571,794 Interest-bearingtransaction 3,862,443 3,701,676 3,495,610 3,388,027 3,313,556 accountsTime deposits 781,199 826,831 880,079 1,044,915 1,112,053 Total deposits 7,088,800 6,885,135 6,676,054 6,583,841 6,496,496 Short-term 112,533 108,519 85,325 73,492 68,962 borrowingsOther borrowings 204,266 162,216 140,162 143,261 155,943 Totalinterest-bearing 5,630,479 5,453,082 5,240,716 5,254,626 5,222,308 liabilitiesStockholders' 822,001 807,956 781,299 770,255 753,059 equity

(3) The Company adopted CECL on December 31, 2020, with a transition adjustment retroactive to January 1, 2020.

Lakeland Bancorp, Inc.Financial Highlights(Unaudited) For the Quarter Ended December September June 30, March 31, December 31, 30, 31,(dollars in thousands) 2021 2021 2021 2021 2020 Average AnnualizedYields (Taxable Equivalent Basis) andCostsAssets Loans 3.88 % 4.00 % 3.99 % 3.91 % 3.92 %Taxable investment 1.60 % 1.68 % 1.72 % 1.81 % 1.84 %securities and otherTax-exempt securities 2.20 % 2.15 % 2.50 % 2.54 % 2.51 %Federal funds sold andinterest-bearing cash 0.14 % 0.12 % 0.11 % 0.11 % 0.09 %accountsTotal interest-earning 3.22 % 3.40 % 3.57 % 3.56 % 3.51 %assetsLiabilities Savings accounts 0.05 % 0.05 % 0.05 % 0.05 % 0.05 %Interest-bearing 0.24 % 0.30 % 0.32 % 0.34 % 0.38 %transaction accountsTime deposits 0.51 % 0.55 % 0.61 % 0.83 % 1.01 %Borrowings 1.55 % 2.33 % 2.22 % 2.87 % 2.84 %Total interest-bearing 0.33 % 0.41 % 0.42 % 0.51 % 0.59 %liabilitiesNet interest spread(taxable equivalent 2.89 % 2.99 % 3.15 % 3.05 % 2.92 %basis)Annualized net interestmargin (taxable 2.98 % 3.10 % 3.27 % 3.19 % 3.08 %equivalent basis)Annualized cost of 0.19 % 0.23 % 0.25 % 0.32 % 0.37 %depositsAsset Quality Data Allowance for Credit Losses on LoansBalance at beginning of $ 57,953 $ 60,389 $ 67,252 $ 71,124 $ 65,242 periodImpact of adopting ASU ? ? ? ? 6,656 2016-13 (4)Benefit for credit (87 ) (2,705 ) (5,314 ) (2,808 ) (246 )losses on loansCharge-offs (461 ) (969 ) (1,862 ) (1,270 ) (746 )Recoveries 642 1,238 313 206 218 Balance at end of period $ 58,047 $ 57,953 $ 60,389 $ 67,252 $ 71,124 Net Loan Charge-Offs (Recoveries)Non owner occupied $ ? $ 6 $ 1,649 $ 592 commercialOwner occupied (1 ) (80 ) (9 ) 70 commercialMultifamily ? 28 ? ? Non owner occupied (136 ) (5 ) (8 ) 206 residentialTotal commercial,secured by real estate $ (137 ) $ (51 ) $ 1,632 $ 868 $ (45 )(4)Commercial, industrial (449 ) (265 ) 5 221 477 and otherConstruction (4 ) 50 (42 ) (25 ) Equipment financing 60 139 4 83 64 Residential mortgages 49 27 (82 ) (58 ) ? Consumer and home equity 300 (169 ) 32 (25 ) 32 Net (recoveries) $ (181 ) $ (269 ) $ 1,549 $ 1,064 $ 528 charge-offs(4) Periods prior to December 31, 2020 do not reflect the adoption of ASU 2016-13 Non-Performing Assets Non owner occupied $ 3,009 $ 4,748 $ 11,427 $ 12,835 $ 16,537 commercialOwner occupied 2,810 4,656 7,152 8,797 14,271 commercialMultifamily ? ? 195 201 626 Non owner occupied 2,852 922 1,305 1,417 2,217 residentialConstruction ? ? 515 718 1,440 Commercial, industrial 6,763 1,108 1,449 2,252 2,633 and otherEquipment financing 43 238 264 300 327 Residential mortgages 817 123 ? 2,328 2,469 Consumer and home equity 687 453 308 2,277 2,243 Total non-accrual loans 16,981 12,248 22,615 31,125 42,763 Property acquiredthrough foreclosure or ? ? ? ? ? repossessionTotal non-performing $ 16,981 $ 12,248 $ 22,615 $ 31,125 $ 42,763 assetsLoans past due 90 daysor more and still $ 1 $ ? $ ? $ ? $ 1 accruingLoans restructured and $ 3,342 $ 3,414 $ 3,595 $ 3,799 $ 3,856 still accruingRatio of allowance forcredit losses to total 0.97 % 0.99 % 1.01 % 1.10 % 1.18 %loansTotal non-accrual loans 0.28 % 0.21 % 0.38 % 0.51 % 0.71 %to total loansTotal non-performing 0.21 % 0.15 % 0.29 % 0.40 % 0.56 %assets to total assetsAnnualized net ) )(recoveries) charge-offs (0.01 % (0.02 % 0.10 % 0.07 % 0.04 %to average loans

Lakeland Bancorp, Inc.Supplemental Information - Non-GAAP Financial Measures(Unaudited) At or for the Quarter Ended December 31, September 30, June 30, March 31, December 31,(dollars inthousands, 2021 2021 2021 2021 2020 except pershare amounts) Calculation ofTangible Book Value PerCommon ShareTotal commonstockholders'equity at end $ 827,014 $ 814,128 $ 796,676 $ 768,065 $ 763,784 of period -GAAPLess: Goodwill 156,277 156,277 156,277 156,277 156,277 Less: Otheridentifiable 2,420 2,631 2,841 3,063 3,288 intangibleassetsTotal tangiblecommonstockholders' $ 668,317 $ 655,220 $ 637,558 $ 608,725 $ 604,219 equity at endof period -Non-GAAPSharesoutstanding at 50,606 50,602 50,601 50,598 50,480 end of periodBook value per $ 16.34 $ 16.09 $ 15.74 $ 15.18 $ 15.13 share - GAAPTangible bookvalue per $ 13.21 $ 12.95 $ 12.60 $ 12.03 $ 11.97 share -Non-GAAPCalculation ofTangibleCommon Equity to TangibleAssetsTotal tangiblecommonstockholders' $ 668,317 $ 655,220 $ 637,558 $ 608,725 $ 604,219 equity at endof period -Non-GAAPTotal assetsat end of $ 8,198,056 $ 8,172,479 $ 7,854,238 $ 7,771,761 $ 7,664,297 period - GAAPLess: Goodwill 156,277 156,277 156,277 156,277 156,277 Less: Otheridentifiable 2,420 2,631 2,841 3,063 3,288 intangibleassetsTotal tangibleassets at end $ 8,039,359 $ 8,013,571 $ 7,695,120 $ 7,612,421 $ 7,504,732 of period -Non-GAAPCommon equityto assets - 10.09 % 9.96 % 10.14 % 9.88 % 9.97 %GAAPTangiblecommon equityto tangible 8.31 % 8.18 % 8.29 % 8.00 % 8.05 %assets -Non-GAAPCalculation ofReturn onAverage TangibleCommon EquityNet income - $ 22,170 $ 22,289 $ 27,407 $ 23,175 $ 18,848 GAAPTotal averagecommon $ 822,001 $ 807,956 $ 781,299 $ 770,255 $ 753,059 stockholders'equity - GAAPLess: Average 156,277 156,277 156,277 156,277 156,277 goodwillLess: Averageotheridentifiable 2,544 2,758 2,979 3,192 3,433 intangibleassetsTotal averagetangiblecommon $ 663,180 $ 648,921 $ 622,043 $ 610,786 $ 593,349 stockholders'equity -Non-GAAPReturn onaverage common 10.70 % 10.94 % 14.07 % 12.20 % 9.96 %stockholders'equity - GAAPReturn onaveragetangiblecommon 13.26 % 13.63 % 17.67 % 15.39 % 12.64 %stockholders'equity -Non-GAAPCalculation ofEfficiency RatioTotalnoninterest $ 35,550 $ 37,207 $ 34,097 $ 33,903 $ 36,945 expenseAmortizationof core (210 ) (211 ) (221 ) (226 ) (249 )depositintangiblesMerger-related (710 ) (1,072 ) ? ? ? expensesLong-term debtextinguishment ? (831 ) ? ? ? costsLong-term debt ? ? ? ? (3,777 )prepayment feeNoninterestexpense, as $ 34,630 $ 35,093 $ 33,876 $ 33,677 $ 32,919 adjustedNet interest $ 59,029 $ 59,338 $ 59,740 $ 56,728 $ 55,135 incomeTotalnoninterest 5,864 5,469 5,269 5,759 6,845 incomeTotal revenue $ 64,893 $ 64,807 $ 65,009 $ 62,487 $ 61,980 Tax-equivalentadjustment on 213 157 167 163 149 municipalsecuritiesGain on salesof investment ? ? (9 ) ? (871 )securitiesTotal revenue, $ 65,106 $ 64,964 $ 65,167 $ 62,650 $ 61,258 as adjustedEfficiencyratio - 53.19 % 54.02 % 51.98 % 53.75 % 53.74 %Non-GAAP

Lakeland Bancorp, Inc.Supplemental Information - Non-GAAP Financial Measures(Unaudited) For the Twelve Months Ended December 31,(dollars in thousands) 2021 2020 Calculation of Return on Average Tangible Common EquityNet income - GAAP $ 95,040 $ 57,518 Total average common stockholders' equity - $ 795,554 $ 743,225 GAAPLess: Average goodwill 156,277 156,277 Less: Average other identifiable intangible 2,866 3,816 assetsTotal average tangible common stockholders' $ 636,411 $ 583,132 equity - Non-GAAPReturn on average common stockholders' equity - 11.95 % 7.74 %GAAPReturn on average tangible common stockholders' 14.93 % 9.86 %equity - Non-GAAPCalculation of Efficiency Ratio Total noninterest expense $ 140,756 $ 132,798 Amortization of core deposit intangibles (868 ) (1,025 )Long-term debt prepayment fees ? (4,133 )Long-term debt extinguishment costs (831 ) ? Merger-related expenses (1,782 ) ? Noninterest expense, as adjusted $ 137,275 $ 127,640 Net interest income $ 234,834 $ 207,687 Noninterest income 22,361 27,110 Total revenue $ 257,195 $ 234,797 Tax-equivalent adjustment on municipal 700 438 securitiesGain on sales and calls of investment (9 ) (1,213 )securitiesTotal revenue, as adjusted $ 257,886 $ 234,022 Efficiency ratio - Non-GAAP 53.23 % 54.54 %