Lakeland sees Second Leasing Company Hit

The good news is that Lakeland Bancorp, Inc., Oak Ridge, NJ ( Nasdaq : LBAI)reported Net Income for the fourth quarter of 2008 of $889,000 although the previous year was to $3.3 million.Net Income for the year ended December 31, 2008 was $15.2 million, compared to the $18.0 million reported for 2007.

The bank press release stated:

"The fourth quarter results were adversely impacted by an $11.0 million provision for loan and lease losses compared to a $3.9 million provision for the same period last year. For the full year, the provision for loan and lease losses was $23.7 million, an increase of $17.8 million from the prior year. The higher provision includes $8.5 million related to the leasing division for the fourth quarter and $17.8 million for the full year. During the fourth quarter, a second leasing originator indicated that it could no longer fulfill all of its obligations under contractual recourse provisions. The Company had $37.8 million outstanding from this originator representing 860 individual leases of which approximately 83% were current or less than 30 days past due.

"Thomas J. Shara, Lakeland Bancorp 's President and CEO, said: "We are clearly disappointed with the performance of the leasing portfolio which we are aggressively addressing in this challenging economic environment. As of December 31 , 2008, leases outstanding have declined $75 million or 19% since June 2008 to $311 million and represents 15% of the total loan portfolio down from 19% at December 31, 2007. Fourth quarter charge-offs in loan categories other than leasing totaled less than $1.0 million. Additionally, we have not had any significant impairment issues in the securities portfolio. The Allowance for Loan and Lease Losses now represents 1.23% of Total Loans at December 31, 2008, up from 0.78% at December 31, 2007. For 2008, loans grew 8% and deposits grew 3%. We are pleased to report that our Net Interest Margin in 2008 improved 38 basis points, driven by a $16.9 million or 23% increase in Net Interest Income . Our Efficiency Ratio improved to below 55% down from 63% in 2007 as revenues increased 17% while expenses only increased 3%."

Full Release:
http://news.prnewswire.com/DisplayReleaseContent.aspx?ACCT=104&STORY=/www/story/01-22-2009/0004958604&EDATE

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