10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark one)

[X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended		March 31, 2019
	OR

[   ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 000-17820

LAKELAND BANCORP, INC.

(Exact name of registrant as specified in its charter)

New Jersey	22-2953275
(State or other jurisdiction of  incorporation  or organization)	(I.R.S. Employer Identification No.)
250 Oak Ridge Road, Oak Ridge, New Jersey	07438
(Address of principal executive offices)	(Zip Code)
(973) 697-2000
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report.)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  [X]    No  [  ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit such files).  Yes  [ X ]    No  [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer [X]    Accelerated filer []    Non-accelerated filer [  ]  Smaller reporting company [  ]  Emerging growth company [  ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  [  ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): Yes  [  ]    No  [X]

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of exchange on which registered
Common Stock, no par value	LBAI	The NASDAQ Stock Market

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of May 1, 2019, there were 50,441,279 outstanding shares of Common Stock, no par value.

1

LAKELAND BANCORP, INC.

Form 10-Q Index

		PAGE
	Part I.     Financial Information
Item 1.	Financial Statements:
	Consolidated Balance Sheets as of March 31, 2019 (unaudited) and December 31, 2018	3
	Consolidated Statements of Income for the Three Months Ended March 31, 2019 and 2018 (unaudited)	4
	Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2019 and 2018 (unaudited)	5
	Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2019 and 2018 (unaudited)	6
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2019 and 2018(unaudited)	7
	Notes to Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 4.	Controls and Procedures	44
	Part II.     Other Information
Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 3.	Defaults Upon Senior Securities	45
Item 4.	Mine Safety Disclosures	45
Item 5.	Other Information	45
Item 6.	Exhibits	46
Signatures		47

2

PART I. FINANCIAL INFORMATION

Item 1.        Financial Statements

Lakeland Bancorp, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS

	March 31, 2019			December 31, 2018
	(unaudited)
ASSETS	(dollars in thousands)
Cash	$	205,322		$	205,199
Interest-bearing deposits due from banks	21,037			3,400
Total cash and cash equivalents	226,359			208,599
Investment securities available for sale, at fair value	659,238			638,618
Equity securities, at fair value	15,232			15,921
Investment securities held to maturity; fair value of $158,219 at March 31, 2019 and $150,932 at December 31, 2018	159,308			153,646
Federal Home Loan Bank and other membership bank stock, at cost	16,951			13,301
Loans, net of deferred costs (fees)	4,921,391			4,456,733
Less: allowance for loan losses	37,979			37,688
Net loans	4,883,412			4,419,045
Loans held for sale	600			1,113
Premises and equipment, net	51,703			49,175
Operating lease right-of-use assets	19,239			—
Accrued interest receivable	17,515			16,114
Goodwill	154,153			136,433
Other identifiable intangible assets	5,192			1,768
Bank owned life insurance	110,430			110,052
Other assets	45,731			42,308
TOTAL ASSETS	$	6,365,063		$	5,806,093
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest-bearing	$	1,071,890		$	950,218
Savings and interest-bearing transaction accounts	3,046,322			2,913,414
Time deposits $250 thousand and under	753,126			589,737
Time deposits over $250 thousand	193,246			167,301
Total deposits	5,064,584			4,620,670
Federal funds purchased and securities sold under agreements to repurchase	261,266			233,905
Other borrowings	175,783			181,118
Subordinated debentures	118,193			105,027
Operating lease liabilities	20,823			—
Other liabilities	43,071			41,634
TOTAL LIABILITIES	5,683,720			5,182,354
STOCKHOLDERS’ EQUITY
Common stock, no par value; authorized shares, 100,000,000 at March 31, 2019 and December 31, 2018; issued shares, 50,435,663 at March 31, 2019 and 47,486,250 at December 31, 2018	558,245			514,703
Retained earnings	126,787			116,874
Accumulated other comprehensive loss	(3,689		)	(7,838		)
TOTAL STOCKHOLDERS’ EQUITY	681,343			623,739
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	6,365,063		$	5,806,093

The accompanying notes are an integral part of these consolidated financial statements.

3

Lakeland Bancorp, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

	For the Three Months Ended March 31,
	2019		2018
	(in thousands, except per share data)
INTEREST INCOME
Loans and fees	$	57,642	$	45,544
Federal funds sold and interest-bearing deposits with banks	254		166
Taxable investment securities and other	4,873		3,992
Tax-exempt investment securities	408		443
TOTAL INTEREST INCOME	63,177		50,145
INTEREST EXPENSE
Deposits	11,497		5,755
Federal funds purchased and securities sold under agreements to repurchase	608		134
Other borrowings	2,466		2,020
TOTAL INTEREST EXPENSE	14,571		7,909
NET INTEREST INCOME	48,606		42,236
Provision for loan losses	508		1,284
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	48,098		40,952
NONINTEREST INCOME
Service charges on deposit accounts	2,573		2,611
Commissions and fees	1,412		1,272
Income on bank owned life insurance	683		719
Gain (loss) on equity securities	353		(18		)
Gains on sales of loans	371		246
Other income	331		504
TOTAL NONINTEREST INCOME	5,723		5,334
NONINTEREST EXPENSE
Salaries and employee benefits	19,231		16,861
Net occupancy expense	2,954		2,738
Furniture and equipment	2,116		2,206
FDIC insurance expense	450		425
Stationery, supplies and postage	447		416
Marketing expense	469		361
Data processing expense	1,327		466
Telecommunications expense	493		421
ATM and debit card expense	602		510
Core deposit intangible amortization	304		157
Other real estate and repossessed asset expense	86		46
Merger related expenses	2,860		—
Other expenses	2,645		2,530
TOTAL NONINTEREST EXPENSE	33,984		27,137
Income before provision for income taxes	19,837		19,149
Provision for income taxes	4,211		3,894
NET INCOME	$	15,626	$	15,255
PER SHARE OF COMMON STOCK
Basic earnings	$	0.31	$	0.32
Diluted earnings	$	0.31	$	0.32
Dividends	$	0.115	$	0.100

The accompanying notes are an integral part of these consolidated financial statements.

4

Lakeland Bancorp, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

	For the Three Months Ended March 31,
	2019			2018
	(in thousands)
NET INCOME	$	15,626		$	15,255
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Unrealized gains (losses) on securities available for sale	4,363			(5,732		)
Unrealized (losses) gains on derivatives	(214		)	283
Other comprehensive income (loss)	4,149			(5,449		)
TOTAL COMPREHENSIVE INCOME	$	19,775		$	9,806

The accompanying notes are an integral part of these consolidated financial statements.

5

Lakeland Bancorp, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

For the Three Months EndedMarch 31,2019 and 2018

	Common Stock			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
	(in thousands)
At January 1, 2018	$	512,734		$	72,737		$	(2,349	)	$	583,122
Cumulative adjustment for adoption of ASU 2016-01	—			2,043			(2,043		)	—
January 1, 2018, as adjusted	512,734			74,780			(4,392		)	583,122
Net income	—			15,255			—			15,255
Other comprehensive loss, net of tax	—			—			(5,449		)	(5,449		)
Stock based compensation	994			—			—			994
Exercise of stock options	248			—			—			248
Retirement of restricted stock	(744		)	—			—			(744		)
Cash dividends, common stock	—			(4,778		)	—			(4,778		)
At March 31, 2018	$	513,232		$	85,257		$	(9,841	)	$	588,648
At January 1, 2019	$	514,703		$	116,874		$	(7,838	)	$	623,739
Cumulative adjustment for adoption of ASU 842	—			125			—			125
January 1, 2019, as adjusted	514,703			116,999			(7,838		)	623,864
Net income	—			15,626			—			15,626
Other comprehensive income, net of tax	—			—			4,149			4,149
Stock based compensation	696			—			—			696
Issuance of stock for Highlands acquisition	43,417			—			—			43,417
Retirement of restricted stock	(571		)	—			—			(571		)
Cash dividends, common stock	—			(5,838		)	—			(5,838		)
At March 31, 2019	$	558,245		$	126,787		$	(3,689	)	$	681,343

The accompanying notes are an integral part of these consolidated financial statements.

6

Lakeland Bancorp, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	For the Three Months Ended March 31,
	2019			2018
	(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	15,626		$	15,255
Adjustments to reconcile net income to net cash provided by operating activities:
Net amortization of premiums, discounts and deferred loan fees and costs	497			1,250
Depreciation and amortization	2,138			1,323
Amortization of intangible assets	304			157
Amortization of operating lease right-of-use assets	652			—
Provision for loan losses	508			1,284
Loans originated for sale	(8,931		)	(8,473		)
Proceeds from sales of loans held for sale	10,928			9,175
Change in market value of equity securities	(353		)	18
Gains on sales of loans held for sale	(371		)	(246		)
Gains on other real estate and other repossessed assets	(36		)	(25		)
Losses on sales of premises and equipment	85			—
Stock-based compensation	696			994
Excess tax benefits	131			298
Increase in other assets	(2,590		)	(2,388		)
Increase in other liabilities	959			1,262
NET CASH PROVIDED BY OPERATING ACTIVITIES	20,243			19,884
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash acquired in acquisitions	13,454			—
Proceeds from repayments and maturities of available for sale securities	42,074			20,928
Proceeds from repayments and maturities of held to maturity securities	4,153			5,820
Proceeds from sales of equity securities	1,138			—
Purchase of available for sale securities	(36,085		)	(24,589		)
Purchase of held to maturity securities	(8,510		)	(18,461		)
Purchase of equity securities	(95		)	(326		)
Proceeds from redemptions of Federal Home Loan Bank stock	25,792			688
Purchases of Federal Home Loan Bank stock	(27,675		)	—
Net increase in loans	(38,506		)	(73,247		)
Proceeds from sales of other real estate and repossessed assets	253			145
Proceeds from dispositions and sales of premises and equipment	953			—
Purchases of premises and equipment	(1,793		)	(1,354		)
NET CASH USED IN INVESTING ACTIVITIES	(24,847		)	(90,396		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits	34,545			79,339
Increase in federal funds purchased and securities sold under agreements to repurchase	27,361			1,549
Repayments of other borrowings	(33,133		)	(15,000		)
Exercise of stock options	—			248
Retirement of restricted stock	(571		)	(744		)
Dividends paid	(5,838		)	(4,778		)
NET CASH PROVIDED BY FINANCING ACTIVITIES	22,364			60,614
Net increase (decrease) in cash and cash equivalents	17,760			(9,898		)
Cash and cash equivalents, beginning of period	$	208,599		142,933
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	226,359		$	133,035

7

	For the Three Months Ended March 31,
	2019		2018
	(in thousands)
Supplemental schedule of non-cash investing and financing activities:
Cash paid during the period for income taxes	$	230	$	2,046
Cash paid during the period for interest	13,001		6,716
Transfer of loans into other repossessed assets and other real estate owned	102		669
Initial recognition of operating lease right-of-use assets	18,651		—
Initial recognition of operating lease liabilities	20,203		—
Acquisitions:
Non-cash assets acquired:
Federal Home Loan Bank stock	1,767		—
Investment securities available for sale	22,734		—
Loans, including loans held for sale	428,072		—
Goodwill and other intangible assets, net	21,448		—
Other assets	8,602		—
Total non-cash assets acquired	482,623		—
Liabilities assumed:
Deposits	409,638		—
Other borrowings	40,957		—
Other liabilities	2,065		—
Total liabilities assumed	452,660		—
Common stock issued and fair value of stock options converted to Lakeland Bancorp stock options	43,417		—

The accompanying notes are an integral part of these consolidated financial statements.

8

Lakeland Bancorp, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

This quarterly report presents the consolidated financial statements of Lakeland Bancorp, Inc. and its subsidiaries, including Lakeland Bank (“Lakeland”) and the Bank’s wholly owned subsidiaries (collectively, the “Company”). The accounting and reporting policies of the Company conform with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and predominant practices within the banking industry. The Company’s unaudited interim financial statements reflect all adjustments, such as normal recurring accruals that are, in the opinion of management, necessary for the fair presentation of the results of the interim periods. The results of operations for the three months ended March 31, 2019 do not necessarily indicate the results that the Company will achieve for all of 2019.

Certain information and footnote disclosures required under U.S. GAAP have been condensed or omitted, as permitted by rules and regulations of the Securities and Exchange Commission. These unaudited interim financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes that are presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. Certain reclassifications have been made in the consolidated financial statements to conform with current year classifications.

NOTE 2 – ACQUISITIONS

On January 4, 2019, the Company completed its acquisition of Highlands Bancorp, Inc. ("Highlands"), a bank holding company headquartered in Vernon, New Jersey. Highlands was the parent of Highlands State Bank, which operated four branches in Sussex, Passaic and Morris Counties in New Jersey. This acquisition enabled the Company to broaden its presence in those counties. Effective as of the close of business on January 4, 2019, Highlands merged into the Company and Highlands State Bank merged into Lakeland. Pursuant to the merger agreement, the shareholders of Highlands received for each outstanding share of Highlands common stock that they owned at the effective time of the merger, 1.015 shares of Lakeland Bancorp, Inc. common stock. The Company issued 2,837,524 shares of its common stock in the merger. Outstanding Highlands options were paid out in cash at the difference between $14.71 and an average strike price of $8.09 for a total cash payment of $797,000.

The acquisition was accounted for under the acquisition method of accounting and accordingly, the assets acquired and liabilities assumed in the acquisition were recorded at their estimated fair values as of the acquisition date. Highlands' assets were recorded at their preliminary estimated fair values as of January 4, 2019 and Highlands' results of operations will be included in the Company's Consolidated Statements of Income from that date forward.

The assets acquired and liabilities assumed in the acquisition were recorded at their estimated fair values based on management's best estimates using information available at the date of the acquisition, including the use of a third-party valuation specialist. The fair values are preliminary estimates and subject to adjustment for up to one year after the closing date of the acquisition.

9

The following table summarizes the estimated fair value of the acquired assets and liabilities assumed at the date of acquisition for Highlands.

(in thousands)
Cash and cash equivalents	13,454
Securities, available for sale	22,734
Federal Home Loan Bank stock	1,767
Loans held for sale	1,113
Loans	426,959
Premises and equipment	3,253
Goodwill	17,720
Identifiable intangible assets	3,728
Accrued interest receivable and other assets	5,349
Total assets acquired	496,077
Deposits	(409,638		)
Other borrowings	(27,800		)
Subordinated debt	(13,157		)
Other liabilities	(2,065		)
Total liabilities assumed	(452,660		)
Net assets acquired	$	43,417

Loans acquired in the Highlands acquisition were recorded at fair value and subsequently accounted for in accordance with ASC Topic 310. There was no carryover related allowance for loan losses. The fair values of loans acquired from Highlands were estimated using cash flow projections based on the remaining maturity and repricing terms. Cash flows were adjusted for estimated future credit losses and the rate of prepayments. Projected cash flows were then discounted to present value using a risk-adjusted market rate for similar loans.

The following is a summary of the credit impaired loans acquired in the Highlands acquisition as of the closing date.

(in thousands)
Contractually required principal and interest at acquisition	$	20,025
Contractual cash flows not expected to be collected (non-accretable difference)	4,758
Expected cash flows at acquisition	$	15,267
Interest component of expected cash flows (accretable difference)	1,420
Fair value of acquired loans	$	13,847

The core deposit intangible totaled $3.7 million and is being amortized over its estimated useful life of approximately ten years using an accelerated method. The goodwill will be evaluated annually for impairment. The goodwill is not deductible for tax purposes.

The fair values of deposit liabilities with no stated maturities such as checking, money market and savings accounts, were assumed to equal the carrying amounts since these deposits are payable on demand. The fair values of certificates of deposits and IRAs represent the present value of contractual cash flows discounted at market rates for similar certificates of deposit.

Direct costs related to the acquisition were expensed as incurred. During the three months ended March 31, 2019, the Company incurred $2.9 million of merger and acquisition integration-related expenses, which have been separately stated in the Company's Consolidated Statements of Income.

10

Supplemental Pro Forma Financial Information

The following table provides unaudited condensed pro forma financial information assuming that the Highlands acquisition had been completed as of January 1, 2019, for the three months ended March 31, 2019 and as of January 1, 2018 for the three months ended March 31, 2018. The table below has been prepared for comparative purposes only and is not necessarily indicative of the actual results that would have been attained had the acquisitions occurred as of the beginning of the periods presented, nor is it indicative of future results. Furthermore, the unaudited pro forma information does not reflect management’s estimate of any revenue-enhancing opportunities nor anticipated cost savings or the impact of conforming certain accounting policies of the acquired companies to the Company’s policies that may have occurred as a result of the integration and consolidation of Highlands' operations. The pro forma information shown reflects adjustments related to certain purchase accounting fair value adjustments; amortization of core deposit and other intangibles; and related income tax effects. The Company has not provided separate information regarding revenue and earnings of Highlands since the acquisition because of the manner in which Highlands' branches and lending team were immediately merged into Lakeland’s branches and lending team making such information impracticable to provide.

	Pro Forma		Pro Forma
(in thousands)	March 31, 2019		March 31, 2018
Net interest income	$	48,753	$	46,787
Provision for loan losses	508		1,382
Noninterest income	5,694		6,198
Noninterest expense	31,205		30,501
Net income	17,784		16,687
Earnings per share:
Fully diluted	$	0.35	$	0.33

NOTE 3 – REVENUE RECOGNITION

The Company’s primary source of revenue is interest income generated from loans and investment securities. Interest income is recognized according to the terms of the financial instrument agreement over the life of the loan or investment security unless it is determined that the counterparty is unable to continue making interest payments. Interest income also includes prepaid interest fees from commercial customers, which approximates the interest foregone on the balance of the loan prepaid.

The Company’s additional source of income, also referred to as noninterest income, is generated from deposit related fees, interchange fees, loan fees, merchant fees, loan sales and other miscellaneous income and is largely based on contracts with customers. In these cases, the Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. The Company considers a customer to be any party to which the Company will provide goods or services that are an output of the Company’s ordinary activities in exchange for consideration. There is little seasonality with regards to revenue from contracts with customers and all inter-company revenue is eliminated when the Company’s financial statements are consolidated.

Generally, the Company enters into contracts with customers that are short-term in nature where the performance obligations are fulfilled and payment is processed at the same time. Such examples include revenue related to merchant fees, interchange fees and investment services income. In addition, revenue generated from existing customer relationships such as deposit accounts are also considered short-term in nature, because the relationship may be terminated at any time and payment is processed at the time performance obligations are fulfilled. As a result, the Company does not have contract assets, contract liabilities or related receivable accounts for contracts with customers. In cases where collectability is a concern, the Company does not record revenue.

Generally, the pricing of transactions between the Company and each customer is either (i) established within a legally enforceable contract between the two parties, as is the case with the loan sales, or (ii) disclosed to the customer at a specific point in time, as is the case when a deposit account is opened or before a new loan is underwritten. Fees are usually fixed at a specific amount or as a percentage of a transaction amount. No judgment or estimates by management are required to record revenue related to these transactions and pricing is clearly identified within these contracts.

The Company primarily operates in one geographic region, Northern and Central New Jersey and contiguous areas. Therefore, all significant operating decisions are based upon analysis of the Company as one operating segment or unit.

11

We disaggregate our revenue from contracts with customers by contract-type and timing of revenue recognition, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Noninterest income not generated from customers during the Company’s ordinary activities primarily relates to mortgage servicing rights, gains/losses on the sale of investment securities, gains/losses on the sale of other real estate owned, gains/losses on the sale of property, plant and equipment, and income from bank owned life insurance.

The following table sets forth the components of noninterest income for the three months ended March 31, 2019 and 2018:

	For the Three Months Ended March 31,
(in thousands)	2019		2018
Deposit Related Fees and Charges
Debit card interchange income	$	1,218	$	1,118
Overdraft charges	996		1,109
ATM service charges	184		190
Demand deposit fees and charges	143		158
Savings service charges	32		36
Total	2,573		2,611
Commissions and Fees
Loan fees	348		322
Wire transfer charges	267		248
Investment services income	352		228
Merchant fees	184		216
Commissions from sales of checks	103		108
Safe deposit income	91		84
Other income	61		63
Total	1,406		1,269
Gains on Sale of Loans	371		246
Other Income
Gains on customer swap transactions	199		332
Title insurance income	90		49
Other income	61		97
Total	350		478
Revenue not from contracts with customers	1,023		730
Total Noninterest Income	5,723		5,334
Timing of Revenue Recognition
Products and services transferred at a point in time	4,681		4,585
Products and services transferred over time	19		19
Revenue not from contracts with customers	1,023		730
Total Noninterest Income	$	5,723	$	5,334

12

NOTE 4 – EARNINGS PER SHARE

The following schedule shows the Company’s earnings per share calculations for the periods presented:

	For the Three Months Ended March 31,
(in thousands, except per share data)	2019		2018
Net income available to common shareholders	$	15,626	$	15,255
Less: earnings allocated to participating securities	141		141
Net income allocated to common shareholders	$	15,485	$	15,114
Weighted average number of common shares outstanding - basic	50,275		47,503
Share-based plans	167		233
Weighted average number of common shares outstanding - diluted	50,442		47,736
Basic earnings per share	$	0.31	$	0.32
Diluted earnings per share	$	0.31	$	0.32

There were no antidilutive options to purchase common stock excluded from the computation for the three months ended March 31, 2019 and 2018.

NOTE 5 – INVESTMENT SECURITIES

The amortized cost, gross unrealized gains and losses and the fair value of the Company's available for sale and held to maturity investment securities are as follows:

	March 31, 2019									December 31, 2018
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
AVAILABLE FOR SALE
U.S. Treasury and U.S. government agencies	$	141,088	$	94	$	(1,601	)	$	139,581	$	143,495	$	—	$	(2,568	)	$	140,927
Mortgage-backed securities, residential	442,358		1,473		(5,204		)	438,627		434,208		779		(8,843		)	426,144
Mortgage-backed securities, multifamily	30,956		135		(82		)	31,009		21,087		67		(204		)	20,950
Obligations of states and political subdivisions	44,850		362		(195		)	45,017		45,951		140		(586		)	45,505
Debt securities	5,000		4		—			5,004		5,000		92		—			5,092
	$	664,252	$	2,068	$	(7,082	)	$	659,238	$	649,741	$	1,078	$	(12,201	)	$	638,618

	March 31, 2019									December 31, 2018
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
HELD TO MATURITY
U.S. government agencies	$	32,461	$	—	$	(360	)	$	32,101	$	33,025	$	—	$	(677	)	$	32,348
Mortgage-backed securities, residential	82,070		246		(1,033		)	81,283		75,859		169		(1,838		)	74,190
Mortgage-backed securities, multifamily	1,827		—		(19		)	1,808		1,853		—		(35		)	1,818
Obligations of states and political subdivisions	36,450		274		(127		)	36,597		37,909		113		(328		)	37,694
Debt securities	6,500		—		(70		)	6,430		5,000		—		(118		)	4,882
	$	159,308	$	520	$	(1,609	)	$	158,219	$	153,646	$	282	$	(2,996	)	$	150,932

13

The following table lists contractual maturities of investment securities classified as available for sale and held to maturity as of March 31, 2019. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Available for Sale				Held to Maturity
(in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
March 31, 2019
Due in one year or less	$	24,755	$	24,636	$	5,924	$	5,929
Due after one year through five years	116,056		115,089		42,423		42,361
Due after five years through ten years	32,550		32,602		24,379		24,144
Due after ten years	17,577		17,275		2,685		2,694
	190,938		189,602		75,411		75,128
Mortgage-backed securities	473,314		469,636		83,897		83,091
Total securities	$	664,252	$	659,238	$	159,308	$	158,219

There were no sales of available for sale or held to maturity securities during the three months ended March 31, 2019 and 2018.

Securities with a carrying value of approximately $511.3 million and $476.3 million at March 31, 2019 and December 31, 2018, respectively, were pledged to secure public deposits and for other purposes required by applicable laws and regulations.

The following tables indicates the length of time individual securities have been in a continuous unrealized loss position for the periods presented:

	Less Than 12 Months				12 Months or Longer				Total
(dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses
March 31, 2019
AVAILABLE FOR SALE
U.S. Treasury and U.S. government agencies	$	12,112	$	78	$	116,126	$	1,523	25	$	128,238	$	1,601
Mortgage-backed securities, residential	719		1		289,307		5,203		126	290,026		5,204
Mortgage-backed securities, multifamily	4,979		9		12,993		73		4	17,972		82
Obligations of states and political subdivisions	—		—		16,088		195		30	16,088		195
	$	17,810	$	88	$	434,514	$	6,994	185	$	452,324	$	7,082
HELD TO MATURITY
U.S. government agencies	$	—	$	—	$	32,101	$	360	6	$	32,101	$	360
Mortgage-backed securities, residential	9,012		27		47,210		1,006		31	56,222		1,033
Mortgage-backed securities, multifamily	—		—		1,808		19		2	1,808		19
Obligations of states and political subdivisions	—		—		8,222		127		7	8,222		127
Debt securities	3,930		70		—		—		1	3,930		70
	$	12,942	$	97	$	89,341	$	1,512	47	$	102,283	$	1,609

14

	Less Than 12 Months				12 Months or Longer				Total
(dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses
December 31, 2018
AVAILABLE FOR SALE
U.S. Treasury and U.S. government agencies	$	20,588	$	216	$	120,338	$	2,352	27	$	140,926	$	2,568
Mortgage-backed securities, residential	10,119		58		316,851		8,785		139	326,970		8,843
Mortgage-backed securities, multifamily	1,977		2		12,911		202		4	14,888		204
Obligations of states and political subdivisions	1,289		2		26,522		584		50	27,811		586
	$	33,973	$	278	$	476,622	$	11,923	220	$	510,595	$	12,201
HELD TO MATURITY
U.S. government agencies	$	—	$	—	$	32,348	$	677	6	$	32,348	$	677
Mortgage-backed securities, residential	8,325		59		53,761		1,779		36	62,086		1,838
Mortgage-backed securities, multifamily	—		—		1,818		35		2	1,818		35
Obligations of states and political subdivisions	1,764		8		15,580		320		27	17,344		328
Debt securities	3,882		118		—		—		1	3,882		118
	$	13,971	$	185	$	103,507	$	2,811	72	$	117,478	$	2,996

Management has evaluated the securities in the above table and has concluded that none of the securities with unrealized losses has impairments that are other-than-temporary. Fair value below cost is solely due to interest rate movements and is deemed temporary.

Investment securities, including the mortgage-backed securities and corporate securities, are evaluated on a periodic basis to determine if factors are identified that would require further analysis. In evaluating the Company’s securities, management considers the following items:

• The Company’s ability and intent to hold the securities, including an evaluation of the need to sell the security to meet certain liquidity measures, or whether the Company has sufficient levels of cash to hold the identified security in order to recover the entire amortized cost of the security;

• The financial condition of the underlying issuer;

• The credit ratings of the underlying issuer and if any changes in the credit rating have occurred;

• The length of time the security’s fair value has been less than amortized cost; and

• Adverse conditions related to the security or its issuer if the issuer has failed to make scheduled payments or other factors.

If the above factors indicate that an additional analysis is required, management will perform a discounted cash flow analysis evaluating the security.

Equity securities at fair value

The Company has an equity securities portfolio which consists of investments in other financial institutions for market appreciation purposes and investments in Community Reinvestment funds. The market value of these investments was $15.2 million and $15.9 million at March 31, 2019 and December 31, 2018, respectively. Upon implementation of Accounting Standards Update 2016-01 - Financial Instruments ("ASU 2016-01"), the Company made a cumulative adjustment of $2.0 million from other comprehensive income to retained earnings as of January 1, 2018. In the first three months of 2019, the Company recorded proceeds from sales of equity securities of $1.1 million while recording no sales in the first three months of 2018. The Company also recorded $353,000 in market value gain on equity securities in noninterest income for the first quarter of 2019 and $18,000 in market value loss in the same period of 2018.

As of March 31, 2019, the equity investments in other financial institutions and Community Reinvestment funds had a market value of $1.9 million and $13.4 million, respectively. The Community Reinvestment funds include $3.5 million that are primarily invested in community development loans that are guaranteed by the Small Business Administration (“SBA”). Because the funds are primarily guaranteed by the federal government there are minimal changes in market value between accounting periods. These funds can be redeemed with 60 days notice at the net asset value less unpaid management fees with the approval of the fund manager. As of March 31, 2019, the net amortized cost equaled the market value of the investment. There are no unfunded commitments related to these investments.

15

The Community Reinvestment funds include $9.8 million that are primarily invested in government guaranteed loans, mortgage-backed securities, small business loans and other instruments supporting affordable housing and economic development. The Company may redeem these funds at the net asset value calculated at the end of the current business day less any unpaid management fees. There are no restrictions on redemptions for the holdings in these investments other than the notice required by the fund manager. There are no unfunded commitments related to these investments.

NOTE 6 – LOANS AND OTHER REAL ESTATE

The following sets forth the composition of the Company’s loan portfolio:

(in thousands)	March 31, 2019			December 31, 2018
Commercial, secured by real estate	$	3,436,550		$	3,057,779
Commercial, industrial and other	389,230			336,735
Equipment finance	90,791			87,925
Real estate - residential mortgage	335,290			329,854
Real estate - construction	332,995			319,545
Home equity and consumer	339,815			328,609
Total loans	4,924,671			4,460,447
Less: deferred fees	(3,280		)	(3,714		)
Loans, net of deferred fees	$	4,921,391		$	4,456,733

At March 31, 2019 and December 31, 2018, home equity and consumer loans included overdraft deposit balances of $368,000 and $452,000, respectively. At March 31, 2019 and December 31, 2018, the Company had $1.32 billion and $1.16 billion, respectively, in loans pledged for actual and potential borrowings at the Federal Home Loan Bank of New York (“FHLB”).

Purchased Credit Impaired Loans

The carrying value of loans acquired in the Highlands merger and accounted for in accordance with ASC Subtopic 310-30, “Loans and Debt Securities Acquired with Deteriorated Credit Quality,” was $13.7 million which was substantially the same as the balance at acquisition on January 4, 2019. The carrying value of the purchased credit impaired ("PCI") loans acquired in the Pascack Community Bank ("Pascack") acquisition was $145,000 at March 31, 2019 compared to $157,000 at December 31, 2018. The carrying value of PCI loans acquired in the Harmony Bank ("Harmony") acquisition was $485,000 at March 31, 2019 compared to $495,000 at December 31, 2018.

The following table presents changes in the accretable yield for PCI loans:

	For the Three Months Ended
(in thousands)	March 31, 2019			March 31, 2018
Balance, beginning of period	$	81		$	129
Acquisitions	1,420			—
Accretion	(193		)	(44		)
Net reclassification non-accretable difference	30			28
Balance, end of period	$	1,338		$	113

16

Non-Performing Assets and Past Due Loans

The following schedule sets forth certain information regarding the Company’s non-performing assets and its accruing troubled debt restructurings, excluding PCI loans:

(in thousands)	March 31, 2019		December 31, 2018
Commercial, secured by real estate	$	9,817	$	7,192
Commercial, industrial and other	2,202		1,019
Equipment finance	383		501
Real estate - residential mortgage	1,740		1,986
Home equity and consumer	1,581		1,432
Total non-accrual loans	$	15,723	$	12,130
Other real estate and other repossessed assets	715		830
TOTAL NON-PERFORMING ASSETS	$	16,438	$	12,960
Troubled debt restructurings, still accruing	$	6,352	$	9,293

Non-accrual loans included $2.8 million and $3.6 million of troubled debt restructurings for the periods ended March 31, 2019 and December 31, 2018, respectively. At March 31, 2019 and December 31, 2018, the Company had $1.2 million and $1.5 million, respectively, in residential mortgages and consumer home equity loans that were in the process of foreclosure which are included in non-accrual loans in the above table.

An age analysis of past due loans, segregated by class of loans as of March 31, 2019 and December 31, 2018, is as follows:

(in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater Than 89 Days Past Due		Total Past Due		Current		Total Loans		Recorded Investment Greater than 89 Days and Still Accruing
March 31, 2019
Commercial, secured by real estate	$	14,944	$	3,060	$	3,913	$	21,917	$	3,414,633	$	3,436,550	$	—
Commercial, industrial and other	1,084		220		377		1,681		387,549		389,230		—
Equipment finance	358		210		383		951		89,840		90,791		—
Real estate - residential mortgage	2,406		—		1,146		3,552		331,738		335,290		—
Real estate - construction	—		—		3,423		3,423		329,572		332,995		—
Home equity and consumer	1,845		365		1,297		3,507		336,308		339,815		78
	$	20,637	$	3,855	$	10,539	$	35,031	$	4,889,640	$	4,924,671	$	78
December 31, 2018
Commercial, secured by real estate	$	1,477	$	639	$	2,237	$	4,353	$	3,053,426	$	3,057,779	$	—
Commercial, industrial and other	173		243		750		1,166		335,569		336,735		—
Equipment finance	533		13		501		1,047		86,878		87,925		—
Real estate - residential mortgage	743		111		1,776		2,630		327,224		329,854		—
Real estate - construction	—		—		—		—		319,545		319,545		—
Home equity and consumer	1,917		216		850		2,983		325,626		328,609		—
	$	4,843	$	1,222	$	6,114	$	12,179	$	4,448,268	$	4,460,447	$	—

17

Impaired Loans

The Company defines impaired loans as all non-accrual loans with recorded investments of $500,000 or greater. Impaired loans also include all loans that have been modified in troubled debt restructurings, but excludes PCI loans. Impaired loans as of March 31, 2019 and December 31, 2018 are as follows:

(in thousands)	Recorded Investment in Impaired Loans		Contractual Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized
March 31, 2019
Loans without specific allowance:
Commercial, secured by real estate	$	12,188	$	12,883	$	—	$	8,878	$	52
Commercial, industrial and other	2,309		2,633		—		1,142		4
Equipment finance	301		597		—		301		—
Real estate - residential mortgage	—		—		—		—		—
Real estate - construction	—		—		—		—		—
Home equity and consumer	—		—		—		—		—
Loans with specific allowance:
Commercial, secured by real estate	3,797		4,070		229		6,642		72
Commercial, industrial and other	200		199		8		199		3
Equipment finance	26		26		12		26		—
Real estate - residential mortgage	715		875		4		718		5
Real estate - construction	—		—		—		—		—
Home equity and consumer	700		741		6		697		8
Total:
Commercial, secured by real estate	$	15,985	$	16,953	$	229	$	15,520	$	124
Commercial, industrial and other	2,509		2,832		8		1,341		7
Equipment finance	327		623		12		327		—
Real estate - residential mortgage	715		875		4		718		5
Real estate - construction	—		—		—		—		—
Home equity and consumer	700		741		6		697		8
	$	20,236	$	22,024	$	259	$	18,603	$	144

18

(in thousands)	Recorded Investment in Impaired Loans		Contractual Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized
December 31, 2018
Loans without specific allowance:
Commercial, secured by real estate	$	9,284	$	9,829	—		$	7,369	$	188
Commercial, industrial and other	1,151		1,449		—		1,834		19
Equipment finance	301		597		—		376		—
Real estate - residential mortgage	—		—		—		242		4
Real estate - construction	—		—		—		726		—
Home equity and consumer	—		—		—		—		—
Loans with specific allowance:
Commercial, secured by real estate	7,270		7,597		307		7,594		317
Commercial, industrial and other	209		209		7		209		12
Equipment finance	30		30		14		19		—
Real estate - residential mortgage	730		884		4		745		20
Real estate - construction	—		—		—		—		—
Home equity and consumer	727		765		6		898		32
Total:
Commercial, secured by real estate	$	16,554	$	17,426	$	307	$	14,963	$	505
Commercial, industrial and other	1,360		1,658		7		2,043		31
Equipment finance	331		627		14		395		—
Real estate - residential mortgage	730		884		4		987		24
Real estate - construction	—		—		—		726		—
Home equity and consumer	727		765		6		898		32
	$	19,702	$	21,360	$	338	$	20,012	$	592

Interest income recognized on impaired loans was $144,000 and $177,000 for the three months ended March 31, 2019 and 2018, respectively. Interest that would have been accrued on impaired loans during the first three months of 2019 and 2018 had the loans been performing under original terms would have been $268,000 and $307,000, respectively.

Credit Quality Indicators

The class of loans is determined by internal risk rating. Management closely and continually monitors the quality of its loans and assesses the quantitative and qualitative risks arising from the credit quality of its loans. Lakeland assigns a credit risk rating to all commercial loans and loan commitments. The credit risk rating system has been developed by management to provide a methodology to be used by loan officers, department heads and senior management in identifying various levels of credit risk that exist within Lakeland’s commercial loan portfolios. The risk rating system assists senior management in evaluating Lakeland’s commercial loan portfolio, analyzing trends, and determining the proper level of required reserves to be recommended to the Board. In assigning risk ratings, management considers, among other things, a borrower’s debt service coverage, earnings strength, loan to value ratios, guarantor support, industry conditions and economic conditions. Management categorizes commercial loans and commitments into a one (1) to nine (9) numerical structure with rating 1 being the strongest rating and rating 9 being the weakest. Ratings 1 through 5W are considered ‘Pass’ ratings.

19

The following table shows the Company’s commercial loan portfolio as of March 31, 2019 and December 31, 2018, by the risk ratings discussed above (in thousands):

March 31, 2019	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Real Estate - Construction
RISK RATING
1	$	—	$	2,450	$	—
2	—		18,444		—
3	68,756		36,739		—
4	933,390		88,551		18,204
5	2,247,650		205,999		302,190
5W - Watch	89,295		19,381		5,873
6 - Other assets especially mentioned	46,466		3,988		2,267
7 - Substandard	50,993		13,678		4,461
8 - Doubtful	—		—		—
9 - Loss	—		—		—
Total	$	3,436,550	$	389,230	$	332,995

December 31, 2018	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Real Estate - Construction
RISK RATING
1	$	—	$	1,119	$	—
2	—		18,462		—
3	69,995		36,367		—
4	933,577		91,145		17,375
5	1,910,423		168,474		297,625
5W - Watch	61,626		7,798		3,493
6 - Other assets especially mentioned	38,844		2,033		—
7 - Substandard	43,314		11,337		1,052
8 - Doubtful	—		—		—
9 - Loss	—		—		—
Total	$	3,057,779	$	336,735	$	319,545

The risk rating tables above do not include residential mortgage loans, consumer loans, or equipment finance because they are evaluated on their payment status.

20

Allowance for Loan Losses

The following table details activity in the allowance for loan losses by portfolio segment for the three months ended March 31, 2019 and 2018:

(in thousands)	Commercial, Secured by Real Estate			Commercial, Industrial and Other			Equipment Finance			Real Estate- Residential Mortgage			Real Estate- Construction			Home Equity and Consumer			Total
Three Months Ended March 31, 2019
Beginning Balance	$	27,881		$	1,742		$	987		$	1,566		$	3,015		$	2,497		$	37,688
Charge-offs	(187		)	(147		)	(87		)	(50		)	—			(45		)	(516		)
Recoveries	115			97			2			9			5			71			299
Provision	(294		)	900			45			39			(133		)	(49		)	508
Ending Balance	$	27,515		$	2,592		$	947		$	1,564		$	2,887		$	2,474		$	37,979

(in thousands)	Commercial, Secured by Real Estate			Commercial, Industrial and Other			Equipment Finance			Real Estate- Residential Mortgage			Real Estate- Construction		Home Equity and Consumer			Total
Three Months Ended March 31, 2018
Beginning Balance	$	25,704		$	2,313		$	630		$	1,557		$	2,731	$	2,520		$	35,455
Charge-offs	(22		)	(1,012		)	(23		)	(93		)	—		(100		)	(1,250		)
Recoveries	31			20			2			2			5		95			155
Provision	104			447			433			123			196		(19		)	1,284
Ending Balance	$	25,817		$	1,768		$	1,042		$	1,589		$	2,932	$	2,496		$	35,644

Loans receivable summarized by portfolio segment and impairment method are as follows:

(in thousands)	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Equipment Finance		Real Estate- Residential Mortgage		Real Estate- Construction		Home Equity and Consumer		Total
March 31, 2019
Ending Balance: Individually evaluated for impairment	$	15,985	$	2,509	$	327	$	715	$	—	$	700	$	20,236
Ending Balance: Collectively evaluated for impairment	3,413,062		384,213		90,464		334,177		329,566		338,573		4,890,055
Ending Balance: Loans acquired with deteriorated credit quality	7,503		2,508		—		398		3,429		542		14,380
Ending Balance (1)	$	3,436,550	$	389,230	$	90,791	$	335,290	$	332,995	$	339,815	$	4,924,671

(in thousands)	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Equipment Finance		Real Estate- Residential Mortgage		Real Estate- Construction		Home Equity and Consumer		Total
December 31, 2018
Ending Balance: Individually evaluated for impairment	$	16,554	$	1,360	$	331	$	730	$	—	$	727	$	19,702
Ending Balance: Collectively evaluated for impairment	3,040,573		335,375		87,594		329,124		319,545		327,882		4,440,093
Ending balance: Loans acquired with deteriorated credit quality	652		—		—		—		—		—		652
Ending Balance (1)	$	3,057,779	$	336,735	$	87,925	$	329,854	$	319,545	$	328,609	$	4,460,447

(1) Excludes deferred fees

21

The allowance for loan losses is summarized by portfolio segment and impairment classification as follows:

(in thousands)	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Equipment Finance		Real Estate- Residential Mortgage		Real Estate- Construction		Home Equity and Consumer		Total
March 31, 2019
Ending Balance: Individually evaluated for impairment	$	229	$	8	$	12	$	4	$	—	$	6	$	259
Ending Balance: Collectively evaluated for impairment	27,286		2,584		935		1,560		2,887		2,468		37,720
Ending Balance	$	27,515	$	2,592	$	947	$	1,564	$	2,887	$	2,474	$	37,979

(in thousands)	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Equipment Finance		Real Estate- Residential Mortgage		Real Estate- Construction		Home Equity and Consumer		Total
December 31, 2018
Ending Balance: Individually evaluated for impairment	$	307	$	7	$	14	$	4	$	—	$	6	$	338
Ending Balance: Collectively evaluated for impairment	27,574		1,735		973		1,562		3,015		2,491		37,350
Ending Balance	$	27,881	$	1,742	$	987	$	1,566	$	3,015	$	2,497	$	37,688

Lakeland also maintains a reserve for unfunded lending commitments which is included in other liabilities. This reserve was $2.3 million as of March 31, 2019 and December 31, 2018. The Company analyzes the adequacy of the reserve for unfunded lending commitments quarterly.

Troubled Debt Restructurings

Loans are classified as troubled debt restructured loans in cases where borrowers experience financial difficulties and Lakeland makes certain concessionary modifications to contractual terms. Restructured loans typically involve a modification of terms such as a reduction of the stated interest rate, a moratorium of principal payments and/or an extension of the maturity date at a stated interest rate lower than the current market rate of a new loan with similar risk. The Company considers the potential losses on these loans as well as the remainder of its impaired loans while considering the adequacy of the allowance for loan losses.

The following table summarizes loans that have been restructured during the three months ended March 31, 2019 and 2018:

	For the Three Months Ended March 31, 2019					For the Three Months Ended March 31, 2018
(dollars in thousands)	Number of Contracts	Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Contracts	Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial, secured by real estate	—	$	—	$	—	2	$	1,657	$	1,657
	—	$	—	$	—	2	$	1,657	$	1,657

There were no loans as of March 31, 2019 and 2018 that were restructured within the previous twelve months that have subsequently defaulted.

Other Real Estate and Other Repossessed Assets

At March 31, 2019 and December 31, 2018, the Company had other real estate owned of $715,000 and $830,000, respectively. Included in other real estate owned was residential property acquired as a result of foreclosure proceedings totaling $624,000 and $702,000 at March 31, 2019 and December 31, 2018, respectively. There were no balances of other repossessed assets at both March 31, 2019 and December 31, 2018.

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NOTE 7 – LEASES

The Company leases certain premises and equipment under operating leases. Portions of certain properties are subleased for terms extending through 2024. At March 31, 2019, the Company had lease liabilities totaling $20.8 million and right-of-use assets totaling $19.2 million related to these leases. The calculated amount of the right-of-use asset and lease liabilities are impacted by the length of the lease term and the discount rate used to calculate the present value of the minimum lease payments. The Company's lease agreements often include one or more options to renew at the Company's discretion. If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the right-of-use asset and lease liability. The Company uses its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term. For leases existing prior to January 1, 2019, the rate for the remaining lease term as of January 1, 2019 was used.

For the three months ended March 31, 2019, the weighted average remaining lease term for operating leases was 10.86 years and the weighted average discount rate used in the measurement of operating lease liabilities was 3.49%.

As the Company elected not to separate lease and non-lease components and instead to account for them as a single lease component, the variable lease cost primarily represents variable payments such as common area maintenance and utilities. Lease costs were as follows:

(in thousands)	Three Months Ended March 31, 2019
Operating lease cost	$	820
Variable lease cost	35
Sublease income	(31		)
Net lease cost	$	824

Rent expense for the three months ended March 31, 2018, prior to the adoption of ASU 2016-02, was $758,000.

Other information (in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	660
Right-of-use asset obtained in exchange for new operating lease liabilities	$	765

There were no sale and leaseback transactions, leveraged leases or lease transactions with related parties during the three months ended March 31, 2019. At March 31, 2019, the Company had no leases that had not yet commenced.

A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total operating lease liability at March 31, 2019 is as follows:

(in thousands)
Within one year	$	3,273
After one year but within two years	3,036
After two year but within three years	2,786
After three year but within four years	2,283
After four year but within five years	2,058
After 5 years	12,061
Total undiscounted cash flows	25,497
Discount on cash flows	(4,674		)
Total lease liability	$	20,823

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NOTE 8 – DERIVATIVES

Lakeland is a party to interest rate derivatives that are not designated as hedging instruments. Under a program, Lakeland executes interest rate swaps with commercial lending customers to facilitate their respective risk management strategies. These interest rate swaps with customers are simultaneously offset by interest rate swaps that Lakeland executes with a third party, such that Lakeland minimizes its net risk exposure resulting from such transactions. Because the interest rate swaps associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings. The changes in the fair value of the swaps offset each other, except for the credit risk of the counterparties, which is determined by taking into consideration the risk rating, probability of default and loss given default for all counterparties. Lakeland had $11.2 million and $498,000, respectively, in available for sale securities pledged for collateral on its interest rate swaps with the financial institution for March 31, 2019 and December 31, 2018.

In June 2016, the Company entered into two cash flow hedges in order to hedge the variable cash outflows associated with its subordinated debentures. The notional value of these hedges was $30.0 million. The Company’s objectives in using the cash flow hedge are to add stability to interest expense and to manage its exposure to interest rate movements. The Company used interest rate swaps designated as cash flow hedges which involved the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. In these particular hedges the Company is paying a third party an average of 1.10% in exchange for a payment at 3 month LIBOR. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive income and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the three months ended March 31, 2019, the Company did not record any hedge ineffectiveness. The Company recognized $124,000 and $43,000 of accumulated other comprehensive income (loss) that was reclassified into interest expense for the first three months of 2019 and 2018, respectively.

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s debt. During the next twelve months, the Company estimates that $448,000 will be reclassified as a decrease to interest expense should the rate environment remain the same.

The following table presents summary information regarding these derivatives for the periods presented (dollars in thousands):

March 31, 2019	Notional Amount		Average Maturity (Years)	Weighted Average Fixed Rate		Weighted Average Variable Rate	Fair  Value
Classified in Other Assets:
3rd Party interest rate swaps	$	88,842	7.5	3.80	%	1 Mo. LIBOR + 2.13%	$	2,939
Customer interest rate swaps	253,922		10.8	4.83	%	1 Mo. LIBOR + 2.04%	11,411
Interest rate swap (cash flow hedge)	30,000		2.3	1.10	%	3 Mo. LIBOR	828
Classified in Other Liabilities:
Customer interest rate swaps	$	88,842	7.5	3.80	%	1 Mo. LIBOR + 2.13%	$	(2,939	)
3rd Party interest rate swaps	253,922		10.8	4.83	%	1 Mo. LIBOR + 2.04%	(11,411		)

December 31, 2018	Notional  Amount		Average Maturity (Years)	Weighted  Average Fixed Rate		Weighted Average Variable Rate	Fair  Value
Classified in Other Assets:
3rd Party interest rate swaps	$	153,909	8.3	4.10	%	1 Mo. LIBOR + 2.13%	$	5,329
Customer interest rate swaps	164,427		12.0	5.04	%	1 Mo. LIBOR + 2.05%	5,707
Interest rate swap (cash flow hedge)	30,000		2.5	1.10	%	3 Mo. LIBOR	1,099
Classified in Other Liabilities:
Customer interest rate swaps	$	153,909	8.3	4.10	%	1 Mo. LIBOR + 2.13%	$	(5,329	)
3rd party interest rate swaps	164,427		12.0	5.04	%	1 Mo. LIBOR + 2.05%	(5,707		)

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NOTE 9 – GOODWILL AND INTANGIBLE ASSETS

The Company had goodwill of $154.2 million and $136.4 million at March 31, 2019 and December 31, 2018, respectively. The Company recorded $17.7 million in goodwill from the Highlands merger in January 2019. The Company reviews its goodwill and intangible assets annually, on November 30, or more frequently if conditions warrant, for impairment. In testing goodwill for impairment, the Company compares the estimated fair value of its reporting unit to its carrying amount, including goodwill. The Company has determined that it has one reporting unit, Community Banking.

The Company had core deposit intangibles of $5.2 million and $1.8 million at March 31, 2019 and December 31, 2018, respectively. The Company recorded core deposit intangible of $3.7 million for the Highlands acquisition. The estimated future amortization expense for the remainder of 2019 and for each of the succeeding five years ended December 31 is as follows (in thousands):

For the Year Ended
2019	$	878
2020	1,025
2021	868
2022	711
2023	554
2024	425

NOTE 10 – BORROWINGS

At March 31, 2019, the Company had federal funds purchased and securities sold under agreements to repurchase of $220.0 million and $41.3 million, respectively, compared to federal funds purchased and securities sold under agreements to repurchase of $192.1 million and $41.8 million, respectively, at December 31, 2018. The securities sold under agreements to repurchase are overnight sweep arrangement accounts with our customers. As of March 31, 2019, the Company had $56.2 million in mortgage backed securities pledged for its securities sold under agreements to repurchase.

At times the market values of securities collateralizing our securities sold under agreements to repurchase may decline due to changes in interest rates and may necessitate our lenders to issue a “margin call” which requires Lakeland to pledge additional collateral to meet that margin call.

NOTE 11 – SHARE-BASED COMPENSATION

The Company grants restricted stock, restricted stock units (“RSUs”) and stock options under the 2018 Omnibus Equity Incentive Plan and previously granted such awards under the 2009 Equity Compensation Program. The Company recognized share based compensation expense on its restricted stock of $55,000 and $56,000 for the three months ended March 31, 2019 and 2018, respectively. As of March 31, 2019, there was unrecognized compensation cost of $156,000 related to unvested restricted stock that is expected to be recognized over a weighted average period of approximately 0.80 years. The Company recognized share based compensation expense of $640,000 and $938,000 on RSUs for the three months ended March 31, 2019 and 2018, respectively. Unrecognized compensation expense related to RSUs was approximately $3.9 million as of March 31, 2019, and that cost is expected to be recognized over a period of 1.78 years. There was no unrecognized compensation expense related to unvested stock options as of March 31, 2019.

In the first three months of 2019, the Company granted 13,052 shares of restricted stock to non-employee directors at a grant date fair value of $15.96 per share under the 2018 Omnibus Equity Incentive Program. The restricted stock vests one year from the date it was granted. Compensation expense on this restricted stock is expected to be $208,000 over a one year period. In the first three months of 2018, the Company granted 10,945 shares of restricted stock to non-employee directors at a grant date fair value of $20.55 per share under the 2009 Equity Compensation Program. The restricted stock vested one year from the date it was granted. Compensation expense on this restricted stock was $225,000 over a one year period.

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The following is a summary of the Company’s restricted stock activity during the three months ended March 31, 2019:

	Number of Shares		Weighted Average Price
Outstanding, January 1, 2019	11,701		$	20.18
Granted	13,052		15.96
Vested	(11,643	)	20.24
Forfeited	—		—
Outstanding, March 31, 2019	13,110		$	15.93

In the first three months of 2019, the Company granted 127,559 RSUs under the 2018 Omnibus Equity Incentive Plan at a weighted average grant date fair value of $16.66 per share. These units vest within a range of two to three years. A portion of these RSUs will vest subject to certain performance conditions in the restricted stock unit agreement. There are also certain provisions in the compensation program which state that if a recipient of the RSUs reaches a certain age and years of service, the person has effectively earned a portion of the RSUs at that time. Compensation expense on the restricted stock units issued in the first three months of 2019 is expected to average approximately $708,000 per year over a three year period. In the first three months of 2018, the Company granted 146,233 RSUs at a weighted average grant date fair value of $19.11 per share under the Company’s 2009 Equity Compensation Program. Compensation expense on these restricted stock units is expected to average approximately $932,000 per year over a three year period.

The following is a summary of the Company’s RSU activity during the three months ended March 31, 2019:

	Number of Shares		Weighted Average Price
Outstanding, January 1, 2019	299,347		$	16.60
Granted	127,559		16.66
Vested	(83,396	)	12.53
Forfeited	(2,717	)	17.38
Outstanding, March 31, 2019	340,793		$	17.61

There were no grants of stock options in the first three months of 2019 or 2018. Option activity under the Company’s stock option plans is as follows:

	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding, January 1, 2019	67,488	$	8.28	2.86	$	440,483
Granted	—	—
Exercised	—	—
Forfeited	—	—
Expired	—	—
Outstanding, March 31, 2019	67,488	$	8.28	2.61	$	448,581
Options exercisable at March 31, 2019	67,488	$	8.28	2.61	$	448,581

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, multiplied by the number of in-the-money options).

There were no stock options exercised during the first three months of 2019 and 26,250 stock options exercised during the first three months of 2018. The aggregate intrinsic value of stock options exercised during the three months ended March 31, 2019 and 2018 was $0 and $297,000, respectively. Exercise of stock options during the first three months of 2019 and 2018, resulted in cash receipts of $0 and $248,000, respectively.

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NOTE 12 – COMPREHENSIVE INCOME

The components of other comprehensive income (loss) are as follows:

	For the Three Months Ended
	March 31, 2019									March 31, 2018
(in thousands)	Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount			Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount
Net unrealized gains (losses) on available for sale securities:
Net unrealized holding (losses) gains arising during period	$	6,109		$	(1,746	)	$	4,363		$	(7,502	)	$	1,770		$	(5,732	)
Reclassification adjustment for net gains arising during the period	—			—			—			—			—			—
Net unrealized losses (gains)	6,109			(1,746		)	4,363			(7,502		)	1,770			(5,732		)
Unrealized gains (losses) on derivatives	(271		)	57			(214		)	358			(75		)	283
Other comprehensive (loss) income, net	$	5,838		$	(1,689	)	$	4,149		$	(7,144	)	$	1,695		$	(5,449	)

The following table shows the changes in the balances of each of the components of other comprehensive income for the periods presented, net of tax:

	For the Three Months Ended March 31, 2019							For the Three Months Ended March 31, 2018
(in thousands)	Unrealized Losses on Available for  Sale Securities		Unrealized Gains on Derivatives		Pension Items	Total		Unrealized Gains (Losses) on Available for  Sale Securities			Unrealized Gains  on Derivatives		Pension Items		Total
Beginning balance	(8,782	)	903		41	(7,838	)	$	(3,232	)	$	862	$	21	$	(2,349	)
Adjustment for implementation of ASU 2016-01	—		—		—	—		(2,043		)	—		—		(2,043		)
Adjusted beginning balance	(8,782	)	903		41	(7,838	)	(5,275		)	862		21		(4,392		)
Net current period other comprehensive (loss) income	4,363		(214	)	—	4,149		(5,732		)	283		—		(5,449		)
Ending balance	(4,419	)	689		41	(3,689	)	$	(11,007	)	$	1,145	$	21	$	(9,841	)

NOTE 13 – ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENT

Fair Value Measurement

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for an asset or liability in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels giving the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest level priority to unobservable inputs (level 3 measurements). The following describes the three levels of fair value hierarchy:

Level 1 – unadjusted quoted prices in active markets for identical assets or liabilities; includes U.S. Treasury Notes, and other U.S. Government Agency securities that actively trade in over-the-counter markets; equity securities and mutual funds that actively trade in over-the-counter markets.

Level 2 – quoted prices for similar assets or liabilities in active markets; or quoted prices for identical or similar assets or liabilities in markets that are not active; or inputs other than quoted prices that are observable for the asset or liability including yield curves, volatilities, and prepayment speeds.

Level 3 – unobservable inputs for the asset or liability that reflect the Company’s own assumptions about assumptions that market participants would use in the pricing of the asset or liability and that are consequently not based on market activity but upon particular valuation techniques.

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The Company’s assets that are measured at fair value on a recurring basis are its available for sale investment securities and its interest rate swaps. The Company obtains fair values on its securities using information from a third-party servicer. If quoted prices for securities are available in an active market, those securities are classified as Level 1 securities. The Company has U.S. Treasury Notes and certain equity securities that are classified as Level 1 securities. Level 2 securities were primarily comprised of U.S. Agency bonds, residential mortgage-backed securities, obligations of state and political subdivisions and corporate securities. Fair values were estimated primarily by obtaining quoted prices for similar assets in active markets or through the use of pricing models supported with market data information. Standard inputs include benchmark yields, reported trades, broker-dealer quotes, issuer spreads, bids and offers. On a quarterly basis, the Company reviews the pricing information received from the Company’s third-party pricing service. This review includes a comparison to non-binding third-party quotes.

The fair values of derivatives are based on valuation models from a third party using current market terms (including interest rates and fees), the remaining terms of the agreements and the credit worthiness of the counter party as of the measurement date (Level 2).

The following table sets forth the Company’s financial assets that were accounted for at fair value on a recurring basis as of the periods presented by level within the fair value hierarchy. During the three months ended March 31, 2019, the Company did not make any transfers between any levels within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:

(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
March 31, 2019
Assets:
Investment securities, available for sale
U.S. Treasury and government agencies	$	16,293	$	123,288	$	—	$	139,581
Mortgage-backed securities	—		469,636		—		469,636
Obligations of states and political subdivisions	—		45,017		—		45,017
Other debt securities	—		5,004		—		5,004
Total securities available for sale	16,293		642,945		—		659,238
Equity securities, at fair value	1,864		13,368		—		15,232
Derivative assets	—		15,178		—		15,178
Total Assets	$	18,157	$	671,491	$	—	$	689,648
Liabilities:
Derivative liabilities	$	—	$	14,350	$	—	$	14,350
Total Liabilities	$	—	$	14,350	$	—	$	14,350
December 31, 2018
Assets:
Investment securities, available for sale
U.S. Treasury and government agencies	$	4,920	$	136,007	$	—	$	140,927
Mortgage-backed securities	—		447,094		—		447,094
Obligations of states and political subdivisions	—		45,505		—		45,505
Corporate debt securities	—		5,092		—		5,092
Total securities available for sale	4,920		633,698		—		638,618
Equity securities, at fair value	2,731		13,190		—		15,921
Derivative assets	—		12,135		—		12,135
Total Assets	$	7,651	$	659,023	$	—	$	666,674
Liabilities:
Derivative liabilities	$	—	$	11,036	$	—	$	11,036
Total Liabilities	$	—	$	11,036	$	—	$	11,036

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The following table sets forth the Company’s assets subject to fair value adjustments (impairment) on a non-recurring basis. Assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:

(in thousands)	(Level 1)		(Level 2)		(Level 3)		Total Fair Value
March 31, 2019
Assets:
Impaired loans	$	—	$	—	$	20,236	$	20,236
Loans held for sale	—		600		—		600
Other real estate owned and other repossessed assets	—		—		715		715
December 31, 2018
Assets:
Impaired loans	$	—	$	—	$	19,702	$	19,702
Loans held for sale	—		1,113		—		1,113
Other real estate owned and other repossessed assets	—		—		830		830

Impaired loans are evaluated and valued at the time the loan is identified as impaired at the lower of cost or market value. Because most of Lakeland’s impaired loans are collateral dependent, fair value is generally measured based on the value of the collateral, less estimated costs to sell, securing these loans and is classified at a level 3 in the fair value hierarchy. Collateral may be real estate, accounts receivable, inventory, equipment and/or other business assets. The value of real estate is assessed based on appraisals by qualified third-party licensed appraisers. The appraisers may use the income approach to value the collateral using discount rates (with ranges of 5-11%) or capitalization rates (with ranges of 4-9%) to evaluate the property. The value of the equipment may be determined by an appraiser, if significant, inquiry through a recognized valuation resource, or by the value on the borrower’s financial statements. Field examiner reviews on business assets may be conducted based on the loan exposure and reliance on this type of collateral. Appraised and reported values may be adjusted based on management’s historical knowledge, changes in market conditions from the time of valuation, and/or management’s expertise and knowledge of the client and client’s business. Impaired loans are reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly, based on the same factors identified above.

The Company has a held for sale loan portfolio that consists of residential mortgages that are being sold in the secondary market. The Company records these mortgages at the lower of cost or market value. Fair value is generally determined by the value of purchase commitments.

Other real estate owned (“OREO”) and other repossessed assets, representing property acquired through foreclosure or deed in lieu of foreclosure, are carried at fair value less estimated disposal costs of the acquired property. Fair value on other real estate owned is based on the appraised value of the collateral using discount rates or capitalization rates similar to those used in impaired loan valuation. The fair value of other repossessed assets is estimated by inquiry through recognized valuation resources.

Changes in the assumptions or methodologies used to estimate fair values may materially affect the estimated amounts. Changes in economic conditions, locally or nationally, could impact the value of the estimated amounts of impaired loans, OREO and other repossessed assets.

Fair Value of Certain Financial Instruments

Estimated fair values have been determined by the Company using the best available data and an estimation methodology suitable for each category of financial instruments. Management is concerned that there may not be reasonable comparability between institutions due to the wide range of permitted assumptions and methodologies in the absence of active markets. This lack of uniformity gives rise to a high degree of subjectivity in estimating financial instrument fair values.

The estimation methodologies used, the estimated fair values and recorded book balances at March 31, 2019, and December 31, 2018, are outlined below.

This summary, as well as the table below, excludes financial assets and liabilities for which carrying value approximates fair value. For financial assets, these include cash and cash equivalents. For financial liabilities, these include noninterest-bearing demand deposits, savings and interest-bearing transaction accounts and federal funds purchased and securities sold under agreements to repurchase. The estimated fair value of demand, savings and interest-bearing transaction accounts is the amount payable on demand at the reporting date. Carrying value is used because there is no stated maturity on these accounts, and the customer has the ability to withdraw the funds immediately. Also excluded from this summary and the following table are those financial instruments recorded at fair value on a recurring basis, as previously described.

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The fair value of investment securities held to maturity was measured using information from the same third-party servicer used for investment securities available for sale using the same methodologies discussed above. Investment securities held to maturity includes $5.0 million in short-term municipal bond anticipation notes and $2.5 million in subordinated debt that are non-rated and do not have an active secondary market or information readily available on standard financial systems. As a result, the securities are classified as Level 3 securities. Management performs a credit analysis before investing in these securities.

FHLB stock is an equity interest that can be sold to the issuing FHLB, to other Federal Home Loan Banks, or to other member banks at its par value. Because ownership of these securities is restricted, they do not have a readily determinable fair value. As such, the Company’s FHLB stock is recorded at cost or par value and is evaluated for impairment each reporting period by considering the ultimate recoverability of the investment rather than temporary declines in value. The Company’s evaluation primarily includes an evaluation of liquidity, capitalization, operating performance, commitments, and regulatory or legislative events.

The net loan portfolio has been valued using an exit price approach, which incorporates a buildup discount rate calculation that uses a swap rate adjusted for credit risk, servicing costs, a liquidity premium and a prepayment premium.

For fixed maturity certificates of deposit, fair value is estimated based on the present value of discounted cash flows using the rates currently offered for deposits of similar remaining maturities. The carrying amount of accrued interest payable approximates its fair value.

The fair value of long-term debt is based upon the discounted value of contractual cash flows. The Company estimates the discount rate using the rates currently offered for similar borrowing arrangements. The fair value of subordinated debentures is based on bid/ask prices from brokers for similar types of instruments.

The fair values of commitments to extend credit and standby letters of credit are estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair value of guarantees and letters of credit is based on fees currently charged for similar agreements or on the estimated cost to terminate them or otherwise settle the obligations with the counterparties at the reporting date. The fair value of commitments to extend credit and standby letters of credit are deemed immaterial.

The following table presents the carrying values, fair values and placement in the fair value hierarchy of the Company’s financial instruments as of March 31, 2019 and December 31, 2018:

(in thousands)	Carrying Value		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
March 31, 2019
Financial Assets:
Investment securities held to maturity	$	159,308	$	158,219	$	—	$	150,700	$	7,519
Federal Home Loan Bank and other membership bank stocks	16,951		16,951		—		16,951		—
Loans, net	4,883,412		4,899,288		—		—		4,899,288
Financial Liabilities:
Certificates of deposit	946,372		942,283		—		942,283		—
Other borrowings	175,783		174,569		—		174,569		—
Subordinated debentures	118,193		115,462		—		—		115,462
December 31, 2018
Financial Assets:
Investment securities held to maturity	$	153,646	$	150,932	$	—	$	143,913	$	7,019
Federal Home Loan Bank and other membership bank stocks	13,301		13,301		—		13,301		—
Loans, net	4,419,045		4,341,477		—		—		4,341,477
Financial Liabilities:
Certificates of deposit	757,038		750,801		—		750,801		—
Other borrowings	181,118		176,921		—		176,921		—
Subordinated debentures	105,027		102,497		—		—		102,497

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NOTE 14 – RECENT ACCOUNTING PRONOUNCEMENTS

In August 2018, the Financial Accounting Standards Board ("FASB") issued an update to improve the effectiveness of fair value measurement disclosures. Among other provisions, the update removes requirements to disclose amounts and reasons of transfers between Level 1 and Level 2 in the fair value hierarchy, and it modifies the disclosures regarding transfers in and out of Level 3 of the fair value hierarchy. The update requires a discussion regarding the change in unrealized gains and losses included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period, and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements.This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2019. Because the Company does not typically have Level 3 fair value measurements, the update is not expected to have a material impact on the Company's financial statements.

In August 2018, the FASB issued an update which aligns the requirements for capitalizing implementation costs in a cloud-computing arrangement service contract with the requirements for capitalizing implementation costs incurred for an internal-use software license. Implementation costs incurred by customers in a cloud computing arrangement are to be deferred and recognized over the term of the arrangement, if those costs would be capitalized by the customer in a software licensing arrangement under the internal-use software guidance.This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2019. The Company is currently assessing the impact that the guidance will have on its financial statements.

In August 2018, the FASB issued an update which changes the disclosure of accounting and reporting requirements related to single-employer defined benefit pension or other postretirement benefit plans. The amendments in the update remove disclosures that are no longer considered cost-beneficial, clarify the specific requirements of disclosures and add disclosure requirements identified as relevant. For calendar-year public companies, the changes will be effective for annual periods, including interim periods within those annual periods, in 2020. Because the Company has minimal pension plans that require calculation of projected benefit obligations or accumulated benefit obligations, the update will not have a material impact on the Company's financial statements.

In June 2018, the FASB issued an update expanding earlier guidance on stock compensation to include share-based payments issued to nonemployees for goods and services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially the same.This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2018. Earlier adoption was permitted. The adoption of this update did not have a significant impact on the Company's financial statements.

In August 2017, the FASB issued an update intended to improve and simplify accounting rules around hedge accounting. Amendments expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. The amendments in this update also make certain targeted improvements to simplify the application of hedge accounting guidance and ease the administrative burden of hedge documentation requirements and assessing hedge effectiveness. This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2019. The Company is still evaluating the impact that this guidance will have on its financial statements.

In July 2017, the FASB issued guidance which simplifies the accounting for certain financial instruments with down round features, a provision in an equity-linked financial instrument (or embedded feature) that provides a downward adjustment of the current exercise price based on the price of future equity offerings. The provisions of the new guidance related to down rounds are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The adoption of this update did not have a material impact on the Company’s financial statements because the Company does not have any equity-linked financial instruments that have such down round features.

In March 2017, the FASB issued an update which shortens the amortization period for certain callable debt securities held at a premium to the earliest call date. Under current GAAP, entities amortize the premium as an adjustment of yield over the contractual life of the instrument even if the holder is certain that the call will be exercised. As a result, upon the exercise of a call on a callable debt security held at a premium, the unamortized premium is recorded as a loss in earnings. The update shortens the amortization period for certain callable debt securities held at a premium and requires the premium be amortized to the earliest call date. This update will be effective for annual and interim periods beginning after December 15, 2018. Entities are required to apply the amendments on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The adoption of this update did not have a material impact on the Company’s financial statements.

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In January 2017, the FASB issued an update to simplify the test for goodwill impairment. This amendment eliminates Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. This update will be effective for the Company’s financial statements for annual years beginning after December 15, 2019. The adoption of this update is not expected to have a material impact on the Company’s financial statements.

In June 2016, the FASB issued an accounting standards update pertaining to the measurement of credit losses on financial instruments. This update requires the measurement of all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. This update is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2019. The Company formed a working group under the direction of the Chief Risk Officer that is comprised of individuals from the credit, risk management, finance and project management areas for implementation of this update. In 2018, the Company contracted with a software and advisory service provider to aid in implementation. The software provider has completed configuration of the software platform and the Company has completed initial data preparation for the software. The Company and software provider have begun evaluating results of initial scenario analysis and as a result have been reviewing and fine tuning assumptions in the model. The Company is still developing qualitative adjustments as well as metrics for determination of a reasonable and supportable forecast period. The Company has engaged a third-party firm to conduct a review and validation of our methodology and models.

In February 2016, FASB issued accounting guidance that requires all lessees to recognize a lease liability and a right-of-use asset, measured at the present value of the future minimum lease payments, at the lease commencement date. Lessor accounting remains largely unchanged under the new guidance. The guidance is effective for fiscal years beginning after December 15, 2018, including interim reporting periods within that reporting period, with early adoption permitted. A modified retrospective approach must be applied for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company retained the services of a software provider to aid in its implementation. In the third quarter of 2018, the FASB issued updates which included targeted improvements to the leasing guidance that is intended to reduce costs and ease implementation of the leases standard. The improvements include an optional transition method to adopt the new leases standard where the entity could initially apply the new leases standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. Consequently, an entity's reporting for comparative periods presented in the financial statements in which it adopts the new leases standard, will continue to be in accordance with Accounting Standards Codification ("ASC") Topic 840, Leases. An entity that adopts this additional transition method, must provide the required disclosures for all periods that continue to be in accordance with the current ASC 840. The lease update also includes a practical expedient, by class of underlying asset, to not separate nonlease components from the associated lease component and, instead, to account for these components as a single component if the nonlease components otherwise would be accounted for under the new revenue guidance and both of the following conditions are met: 1) the timing and pattern of transfer of the nonlease component(s) and associated lease component are the same, and 2) the lease component, if accounted for separately, would be classified as an operating lease. Management used the optional transition method discussed above and also used the practical expedient to account for non-lease components with the associated lease component as a single component assuming the appropriate conditions are met. The FASB issued further clarification of the standard and addressed implementation and disclosure requirements. With the adoption of this update, the Company recorded an operating lease right-of-use asset of $18.7 million, a corresponding liability of $20.2 million and a cumulative adjustment to retained earnings of $125,000.

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Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

This section should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Statements Regarding Forward Looking Information

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 with respect to credit quality (including delinquency trends and the allowance for loan losses), the Company's future tax expense, corporate objectives, and other financial and business matters. 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.

In addition to the risk factors disclosed elsewhere in this document, the following factors, among others, could cause the Company’s 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 Lakeland’s lending and leasing activities, successful implementation, deployment and upgrades of new and existing technology, systems, services and products, customers’ acceptance of Lakeland’s products and services, competition and failure to realize anticipated efficiencies and synergies from the merger of Highlands Bancorp, Inc. into the Company and Highlands State Bank into Lakeland.

The above-listed risk factors are not necessarily exhaustive, particularly as to possible future events, and new risk factors may emerge from time to time. Certain events may occur that could cause the Company’s actual results to be materially different than those described in the Company’s periodic filings with the Securities and Exchange Commission. 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.

Critical Accounting Policies, Judgments and Estimates

The accounting and reporting policies of the Company and its subsidiaries conform to accounting principles generally accepted in the United States of America and predominant practices within the banking industry. The consolidated financial statements include the accounts of the Company, Lakeland and their subsidiaries, including Lakeland NJ Investment Corp., Lakeland Investment Corp., Lakeland Equity, Inc. and Lakeland Preferred Equity, Inc. All intercompany balances and transactions have been eliminated.

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. These estimates and assumptions also affect reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. There have been no material changes in the Company’s critical accounting policies, judgments and estimates, including assumptions or estimation techniques utilized, as compared to those disclosed in the Company’s most recent Annual Report on Form 10-K.

Financial Overview

During the first quarter, the Company completed the merger of Highlands Bancorp Inc. ("Highlands"), adding $496.1 million in total assets, including $428.1 million in total loans, including loans held for sale, and $409.6 million in total deposits. The Company's financial statements reflect the impact of the merger from the date of acquisition, which should be considered when comparing periods.

For the first quarter of 2019, the Company reported net income of $15.6 million and earnings per diluted share of $0.31 compared to net income of $15.3 million and earnings per diluted share of $0.32 for the first quarter of 2018. Excluding merger-related expenses pertaining to the Company's acquisition of Highlands, of $2.1 million, tax-effected, net income for the first quarter of 2019 was $17.8 million, or $0.35 per diluted share. For more information, please see "Reconciliation of Net Income" in "Non-GAAP Financial Measures" below. For the first quarter of 2019, annualized return on average assets was 1.02%, annualized return on average common equity was 9.41% and annualized return on average tangible common equity was 12.32% compared to 1.14%, 10.60%, and 13.90%, respectively, for the first quarter of 2018.

Net interest margin was 3.42% in the first quarter of 2019 compared to 3.39% in the first quarter of 2018.

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Total loans, net of deferred fees, grew $464.7 million, or 10%, to $4.92 billion during the first three months of 2019 and included $427.0 million of Highlands loan balances.

Total deposits increased $443.9 million, or 10%, from December 31, 2018 to March 31, 2019, to $5.06 billion and included $409.6 million of Highlands deposit balances.

Comparison of Operating Results for the Three Months Ended March 31, 2019 and 2018

Net Income

Net income was $15.6 million, or $0.31 per diluted share, for the first quarter of 2019 compared to net income of $15.3 million, or $0.32 per diluted share, for the first quarter of 2018. Net interest income of $48.6 million for the first quarter of 2019 increased $6.4 million from the first quarter of 2018 as a result of the merger, organic growth and an increase in market interest rates.

Net Interest Income

Net interest income is the difference between interest income on earning assets and the cost of funds supporting those assets. The Company’s net interest income is determined by: (i) the volume of interest-earning assets that it holds and the yields that it earns on those assets, and (ii) the volume of interest-bearing liabilities that it has assumed and the rates that it pays on those liabilities.

Net interest income on a tax equivalent basis for the first quarter of 2019 was $48.7 million, compared to $42.4 million for the first quarter of 2018. The net interest margin increased to 3.42% in the first quarter of 2019 from 3.39% in the first quarter of 2018 primarily as a result of an increase in the yield on interest-earning assets partially offset by an increase in the cost of interest-bearing liabilities. The components of net interest income will be discussed in greater detail below.

The following table reflects the components of the Company’s net interest income, setting forth for the periods presented, (1) average assets, liabilities and stockholders’ equity, (2) interest income earned on interest-earning assets and interest expense paid on interest-bearing liabilities, (3) average yields earned on interest-earning assets and average rates paid on interest-bearing liabilities, (4) the Company’s net interest spread (i.e., the average yield on interest-earning assets less the average cost of interest-bearing liabilities) and (5) the Company’s net interest margin. Rates for the three months ended March 31, 2019 and March 31, 2018 are computed on a tax equivalent basis using a tax rate of 21%.

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	For the Three Months Ended March 31, 2019							For the Three Months Ended March 31, 2018
(dollars in thousands)	Average Balance			Interest Income/ Expense		Average Rates Earned/ Paid		Average Balance			Interest Income/ Expense		Average Rates Earned/ Paid
ASSETS
Interest-earning assets:
Loans (1)	$	4,871,534		$	57,642	4.80	%	$	4,194,207		$	45,544	4.40	%
Taxable investment securities and other	782,699			4,873		2.49	%	736,342			3,992		2.17	%
Tax-exempt securities	75,347			516		2.74	%	84,713			561		2.65	%
Federal funds sold (2)	43,273			254		2.35	%	47,366			166		1.40	%
Total interest-earning assets	5,772,853			63,285		4.44	%	5,062,628			50,263		4.02	%
Noninterest-earning assets:
Allowance for loan losses	(41,829		)					(35,979		)
Other assets	452,200							382,760
TOTAL ASSETS	$	6,183,224						$	5,409,409
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-bearing liabilities:
Savings accounts	$	513,270		$	94	0.07	%	$	487,666		$	69	0.06	%
Interest-bearing transaction accounts	2,554,865			7,417		1.18	%	2,240,044			3,343		0.61	%
Time deposits	890,070			3,986		1.79	%	761,418			2,343		1.23	%
Borrowings	435,501			3,074		2.82	%	338,782			2,154		2.54	%
Total interest-bearing liabilities	4,393,706			14,571		1.34	%	3,827,910			7,909		0.83	%
Noninterest-bearing liabilities:
Demand deposits	1,056,060							964,498
Other liabilities	60,253							33,301
Stockholders’ equity	673,205							583,700
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	6,183,224						$	5,409,409
Net interest income/spread				48,714		3.10	%				42,354		3.19	%
Tax equivalent basis adjustment				108							118
NET INTEREST INCOME				$	48,606						$	42,236
Net interest margin (3)						3.42	%						3.39	%

(1)    Includes non-accrual loans, the effect of which is to reduce the yield earned on loans, and deferred loan fees.

(2)    Includes interest-bearing cash accounts.

(3)    Net interest income divided by interest-earning assets.

Interest income on a tax equivalent basis increased $13.0 million, or 26% from $50.3 million in the first quarter of 2018 to $63.3 million in the first quarter of 2019, as a result of the continued increase in the loan portfolio yield as a result of the higher interest rate environment and $787,000 in accretion income on loans resulting from the Highlands acquisition. Average loans increased $677.3 million compared to the first quarter of 2018 while the yield on average loans increased 40 basis points to 4.80% in the first quarter of 2019 from the first quarter of 2018. Total average taxable investment securities increased $46.4 million to $782.7 million for the first quarter of 2019 from the first quarter of 2018, while average tax-exempt securities decreased $9.4 million to $75.3 million for the same periods. The yield on average taxable investment securities increased 32 basis points from the first quarter of 2018 to 2.49% for the first quarter of 2019, while the yield on average tax-exempt investment securities increased nine basis points to 2.74%.

Total interest expense of $14.6 million in the first quarter of 2019 was $6.7 million greater than the $7.9 million reported for the same period in 2018. Total average interest-bearing liabilities increased $565.8 million as a result of organic growth and the Highlands acquisition. The cost of average interest-bearing liabilities increased from 0.83% in the first quarter of 2018 to 1.34% in the first quarter of 2019. The increase in the cost of interest-bearing liabilities was due primarily to an increasingly competitive market for deposits resulting from a higher interest rate environment as well as an increase in the cost of borrowings.

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For the first quarter of 2019, the cost of interest-bearing transaction accounts and time deposits increased by 57 basis points and 56 basis points, respectively, when compared to the first quarter of 2018, due to a higher rate environment as well as the continuing impact of a money market deposit account promotion in the third quarter of 2018.

Provision for Loan Losses

In determining the provision for loan losses, management considers national and local economic conditions; trends in the portfolio including orientation to specific loan types or industries; experience, ability and depth of lending management in relation to the complexity of the portfolio; adequacy and adherence to policies, procedures and practices; levels and trends in delinquencies, impaired loans and charge-offs and the results of independent third-party loan review.

In the first quarter of 2019, a $508,000 provision for loan losses was recorded, compared to $1.3 million for the same period last year. The Company charged off $516,000 and recovered $299,000 in the first quarter of 2019 compared to $1.3 million and $155,000, respectively, in the first quarter of 2018. For more information regarding the determination of the provision, see “Risk Elements” below.

Noninterest Income

The Company recorded noninterest income of $5.7 million and $5.3 million in the first quarter of 2019 and 2018, respectively, an increase of $389,000, or 7%, from the prior year. Commissions and fees increased $140,000 compared to the first quarter of 2018 due primarily to increased investment services income. Gains on sales of loans increased $125,000 when compared to the first quarter of 2018 to $371,000 in the first quarter of 2019. Income on bank owned life insurance was $683,000 for the first quarter of 2019, decreasing $36,000 compared to the same period last year. Other income decreased $173,000 compared to the same period in 2018 due primarily to a loss on the disposal of premises and equipment and a decrease in swap income.

Noninterest Expense

Noninterest expense in the first quarter of 2019 totaled $34.0 million compared to $27.1 million reported for the same quarter of 2018, an increase of $6.8 million or 25%, and includes $2.9 million of expenses related to the merger with Highlands. In general, noninterest expense for the first quarter of 2019 is higher when compared to the same period last year as a result of the additional branches and staff from the Highlands merger. With the successful completion of the Highlands core conversion to our systems in April 2019, it is anticipated that we will begin to see synergies and cost reductions in the coming year. Salaries and employee benefits expense was $19.2 million for the first quarter of 2019, increasing $2.4 million, or 14%, from the same period last year, as a result of additions to our staff from the merger, additions to support continued growth, normal merit increases and increases in benefits costs. For the first quarters of 2019 and 2018, data processing expense was $1.3 million and $466,000, respectively, an increase of $861,000 compared to the prior year period due primarily to the expansion and improvement of the Company's digital infrastructure as well as increases related to the Highlands merger.

The Company’s efficiency ratio, a non-GAAP financial measure, was 56.62% in the first quarter of 2019, compared to 56.58% for the same period last year. The Company uses this ratio because it believes that the ratio provides a good comparison of period-to-period performance and because the ratio is widely accepted in the banking industry. The following table shows the calculation of the efficiency ratio for the periods presented:

	For the Three Months Ended March 31,
(dollars in thousands)	2019			2018
Total noninterest expense	$	33,984		$	27,137
Amortization of core deposit intangibles	(304		)	(157		)
Merger-related expenses	(2,860		)	—
Noninterest expense, as adjusted	$	30,820		$	26,980
Net interest income	$	48,606		$	42,236
Noninterest income	5,723			5,334
Total revenue	54,329			47,570
Tax-equivalent adjustment on municipal securities	108			118
Total revenue, as adjusted	$	54,437		$	47,688
Efficiency ratio	56.62		%	56.58		%

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Income Tax Expense

The effective tax rate in the first quarter of 2019 was 21.23% compared to 20.34% during the same period in 2018 primarily due to the changes in New Jersey tax law during 2018.

Financial Condition

The Company’s total assets increased $559.0 million from December 31, 2018, to $6.37 billion at March 31, 2019. Total loans, net of deferred fees, were $4.92 billion, an increase of $464.7 million, or 10%, from $4.46 billion at December 31, 2018. Total deposits were $5.06 billion, an increase of $443.9 million, or 10%, from December 31, 2018.

With the completion of the Highlands merger in January 2019, the Company recorded the assets acquired and the liabilities assumed in the acquisition at their estimated fair values as of the acquisition date. Total assets acquired were $496.1 million, total loans and total deposits acquired were $428.1 million and $409.6 million, respectively.

Loans

Gross loans of $4.92 billion at March 31, 2019 increased $464.2 million from December 31, 2018, primarily in the commercial loans secured by real estate category which increased $378.8 million, or 12%, $333.7 million of which was from the Highlands acquisition. Commercial, industrial and other loans increased $52.5 million, or 16%, $45.3 million of which was from the Highlands acquisition. Additionally, real estate construction loans increased $13.5 million, or 4%. Construction loans from the Highlands acquisition were $26.3 million. For more information on the loan portfolio, see Note 6 in Notes to the Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Risk Elements

Non-performing assets, excluding PCI loans, increased from $13.0 million at December 31, 2018 to $16.4 million at March 31, 2019, primarily as a result of one customer relationship being moved into non-accrual. Non-accrual loans in the commercial loans secured by real estate and commercial, industrial and other category increased $2.6 million and $1.2 million, respectively. The percentage of non-performing assets to total assets was 0.26% at March 31, 2019 compared to 0.22% at December 31, 2018. Non-accrual loans at March 31, 2019 included three loan relationships with a balance of $1 million or greater, totaling $7.3 million, and two loan relationships between $500,000 and $1.0 million, totaling $1.5 million.

There were $78,000 in loans past due ninety days or more and still accruing at March 31, 2019 compared to none at December 31, 2018. These loans consist of open-end consumer loans secured by real estate which are generally placed on non-accrual and reviewed for charge-off when principal and interest payments are four months in arrears unless the obligations are well-secured and in the process of collection.

On March 31, 2019, the Company had $6.4 million in loans that were troubled debt restructurings and accruing interest income compared to $9.3 million at December 31, 2018. The Company has troubled debt restructurings that are accruing interest on loans that are expected to be able to perform under the modified terms of the loan. On March 31, 2019, the Company had $2.8 million in troubled debt restructurings that were included in non-accrual loans compared to $3.6 million at December 31, 2018. Troubled debt restructurings are those loans where the Company has granted concessions to the borrower in payment terms, either in rate or in term, as a result of the financial condition of the borrower.

On March 31, 2019, the Company had $20.2 million in impaired loans (consisting primarily of non-accrual and restructured loans) compared to $19.7 million at year-end 2018. The Company also had purchased credit impaired loans from the Highlands, Pascack and Harmony acquisitions with carrying values of $13.7 million, $145,000 and $485,000, respectively, at March 31, 2019. For more information on impaired loans see Note 6 in Notes to the Consolidated Financial Statements of this Quarterly Report on Form 10-Q. The valuation allowance for impaired loans is based primarily on the fair value of the underlying collateral. Based on such evaluation, $259,000 of the allowance for loan losses has been allocated for impairment at March 31, 2019 compared to $338,000 at December 31, 2018. At March 31, 2019, the Company also had $41.5 million in loans that were rated substandard that were not classified as non-performing or impaired compared to $41.8 million at December 31, 2018.

At March 31, 2019, there were commitments to lend $457,000 in additional funds on non-accrual loans. There were no loans at March 31, 2019, other than those designated non-performing, impaired or substandard, where the Company was aware of any credit conditions of any borrowers or obligors that would indicate a strong possibility of the borrowers not complying with present terms and conditions of repayment and which may result in such loans being included as non-accrual, past due or renegotiated at a future date.

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The following table sets forth for the periods presented, the historical relationships among the allowance for loan losses, the provision for loan losses, the amount of loans charged-off and the amount of loan recoveries:

(dollars in thousands)	For the Three Months Ended March 31, 2019			For the Three Months Ended March 31, 2018			For the Year Ended December 31, 2018
Balance of the allowance at the beginning of the year	$	37,688		$	35,455		$	35,455
Loans charged off:
Commercial, secured by real estate	(187		)	(22		)	(421		)
Commercial, industrial and other	(147		)	(1,012		)	(1,452		)
Equipment finance	(87		)	(23		)	(507		)
Real estate - mortgage	(50		)	(93		)	(131		)
Real estate - construction	—			—			(248		)
Home equity and consumer	(45		)	(100		)	(588		)
Total loans charged off	(516		)	(1,250		)	(3,347		)
Recoveries:
Commercial, secured by real estate	115			31			468
Commercial, industrial and other	97			20			317
Equipment finance	2			2			23
Real estate - mortgage	9			2			10
Real estate - construction	5			5			17
Home equity and consumer	71			95			332
Total recoveries	299			155			1,167
Net charge-offs	(217		)	(1,095		)	(2,180		)
Provision for loan losses	508			1,284			4,413
Ending balance	$	37,979		$	35,644		$	37,688
Net charge-offs as a percentage of average loans outstanding	0.02		%	0.10		%	0.05		%
Allowance as a percentage of total loans outstanding	0.77		%	0.84		%	0.84		%
Allowance as a percentage of non-accrual loans	241.55		%	267.10		%	310.70		%

The determination of the adequacy of the allowance for loan losses and the periodic provisioning for estimated losses included in the consolidated financial statements is the responsibility of management and the Board of Directors. Management performs a formal quarterly evaluation of the allowance for loan losses. This quarterly process is performed by the credit administration department and approved by the Chief Credit Officer. All supporting documentation with regard to the evaluation process is maintained by the credit administration department. Each quarter, the evaluation along with the supporting documentation is reviewed by the finance department before approval by the Chief Credit Officer. The allowance evaluation is then presented to an Allowance for Loan Losses Committee, which gives final approval to the allowance evaluation before being presented to the Board of Directors for their approval.

The methodology employed for assessing the adequacy of the allowance consists of the following criteria:

• The establishment of specific reserve amounts for impaired loans, including PCI loans.

• The establishment of reserves for pools of homogeneous loans not subject to specific review, including impaired loans under $500,000, equipment finance, 1 - 4 family residential mortgages, and consumer loans.

The establishment of reserve amounts for pools of homogeneous loans are based upon the determination of historical loss rates, which are adjusted to reflect current conditions through the use of qualitative factors. The qualitative factors considered by the Company include an evaluation of the results of the Company’s independent loan review function, the Company's reporting capabilities, the adequacy and expertise of Lakeland’s lending staff, underwriting policies, loss histories, trends in the portfolio, delinquency trends, economic and business conditions and capitalization rates. Since many of Lakeland’s loans depend on the sufficiency of collateral as a secondary source of repayment, any adverse trends in the real estate market could affect the underlying values available to protect Lakeland from losses.

Additionally, management determines the loss emergence periods for each loan segment, which are used to define loss migration periods and establish appropriate ranges for qualitative adjustments for each loan segment. The loss emergence period

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is the estimated time from the date of a loss event (such as a personal bankruptcy) to the actual recognition of the loss (typically via the first partial or full loan charge-off), and is determined based upon a study of our past loss experience by loan segment. All of the factors considered in the analysis of the adequacy of the allowance for loan losses may be subject to change. To the extent actual outcomes differ from management estimates, additional provisions for loan losses may be required that would adversely impact earnings in future periods.

The overall balance of the allowance for loan losses of $38.0 million at March 31, 2019 increased $291,000 from December 31, 2018, an increase of 1%. The change in the allowance within loan segments during the two comparable periods captures changes in the non-performing loan and charge-off statistics and the level of growth.

Non-performing loans of $15.7 million at March 31, 2019 increased $3.6 million from December 31, 2018. The allowance for loan losses as a percent of total loans was 0.77% at March 31, 2019 compared to 0.84% at December 31, 2018. The reduction in the percentage of the allowance for loan losses as a percent of total loans was primarily due to the loans resulting from the Highlands acquisition which are accounted for under acquisition accounting and have no allowance for loan loss. Excluding the loans from the Highlands acquisition, the allowance as a percent of total loans would be 0.84% as of March 31, 2019. Management believes, based on appraisals and estimated selling costs that the majority of its non-performing loans are adequately secured and reserves on its non-performing loans are adequate. Based upon the process employed and giving recognition to all accompanying factors related to the loan portfolio, management considers the allowance for loan losses to be adequate at March 31, 2019.

Investment Securities

For detailed information on the composition and maturity distribution of the Company’s investment securities portfolio, see Note 5 in Notes to Consolidated Financial Statements contained in this Quarterly Report on Form 10-Q. Investment securities totaled $818.5 million at March 31, 2019 and $792.3 million at December 31, 2018, increasing $26.3 million from year-end and includes $22.7 million acquired in the Highlands merger.

Deposits

Total deposits increased from $4.62 billion at December 31, 2018 to $5.06 billion at March 31, 2019, an increase of $443.9 million, or 10%, including $409.6 million acquired in the Highlands merger. Savings and interest-bearing transaction accounts and time deposits increased $132.9 million and $189.3 million, respectively. Noninterest-bearing deposits increased $121.7 million during the first quarter of 2019.

Liquidity

“Liquidity” measures whether an entity has sufficient cash flow to meet its financial obligations and commitments on a timely basis. The Company is liquid when its subsidiary bank has the cash available to meet the borrowing and cash withdrawal requirements of customers and the Company can pay for current and planned expenditures and satisfy its debt obligations.

Lakeland funds loan demand and operation expenses from several sources:

• Net income. Cash provided by operating activities was $20.2 million for the first three months of 2019 compared to $19.9 million for the same period in 2018.

• Deposits. Lakeland can offer new products or change its rate structure in order to increase deposits. In the first three months of 2019, Lakeland’s deposits increased $34.3 million excluding the impact of the Highlands acquisition.

• Sales of securities. At March 31, 2019 the Company had $659.2 million in securities designated “available for sale.” Of these securities, $452.0 million were pledged to secure public deposits and for other purposes required by applicable laws and regulations.

• Repayments on loans can also be a source of liquidity.

• Credit lines. As a member of the FHLB, Lakeland has the ability to borrow overnight based on the market value of collateral pledged. Lakeland had $75.0 million in overnight borrowings from the FHLB on March 31, 2019. Lakeland also has overnight federal funds lines available for it to borrow up to $220.0 million of which $145.0 million was outstanding at March 31, 2019. Lakeland may also borrow from the discount window of the Federal Reserve Bank of New York based on the market value of collateral pledged. Lakeland had no borrowings with the Federal Reserve Bank of New York as of March 31, 2019.

• Other borrowings. Lakeland can also generate funds by utilizing long-term debt or securities sold under agreements to repurchase that would be collateralized by security or mortgage collateral. At times the market values of securities collateralizing our securities sold under agreements to repurchase may decline due to changes in interest rates and may necessitate our lenders to issue a “margin call” which requires Lakeland to pledge additional collateral to meet that margin call.

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Management and the Board monitor the Company’s liquidity through the Asset/Liability Committee, which monitors the Company’s compliance with certain regulatory ratios and other various liquidity guidelines.

The cash flow statements for the periods presented provide an indication of the Company’s sources and uses of cash, as well as an indication of the ability of the Company to maintain an adequate level of liquidity. A discussion of the cash flow statement for the three months ended March 31, 2019 follows.

Cash and cash equivalents totaling $226.4 million on March 31, 2019 increased $17.8 million from December 31, 2018. Operating activities provided $20.2 million in net cash. Investing activities used $24.8 million in net cash, primarily reflecting an increase in loans and the purchase of securities. Financing activities provided $22.4 million in net cash primarily reflecting the net increase in deposits of $34.5 million offset by net repayments from federal funds purchased and other borrowings of $5.8 million. The Company anticipates that it will have sufficient funds available to meet its current loan commitments and deposit maturities. This constitutes a forward-looking statement under the Private Securities Litigation Reform Act of 1995.

The following table sets forth contractual obligations and other commitments representing required and potential cash outflows as of March 31, 2019. Interest on subordinated debentures and long-term borrowed funds is calculated based on current contractual interest rates.

(in thousands)	Total		Within One Year		After One But Within Three Years		After Three But Within Five Years		After Five Years
Minimum annual rentals on noncancellable operating leases	$	25,497	$	3,273	$	5,822	$	4,341	$	12,061
Benefit plan commitments	5,581		306		793		816		3,666
Remaining contractual maturities of time deposits	946,372		730,681		173,805		41,886		—
Subordinated debentures	118,193		—		—		—		118,193
Loan commitments	1,014,524		725,365		123,566		15,355		150,238
Other borrowings	175,783		50,028		85,752		40,003		—
Interest on other borrowings*	67,991		9,751		17,019		13,825		27,396
Standby letters of credit	19,837		18,375		1,382		—		80
Total	$	2,373,778	$	1,537,779	$	408,139	$	116,226	$	311,634

*Includes interest on other borrowings and subordinated debentures at a weighted rate of 3.45%.    

Capital Resources

Total stockholders’ equity increased to $681.3 million on March 31, 2019 from $623.7 million on December 31, 2018, an increase of $57.6 million. Book value per common share increased to $13.51 on March 31, 2019 from $13.14 on December 31, 2018. Tangible book value per share increased from $10.22 per share on December 31, 2018 to $10.35 per share on March 31, 2019, an increase of 1%. Please see “Non-GAAP Financial Measures” below. In addition to the equity acquired in the Highlands merger of $43.4 million, the increase in stockholders’ equity from December 31, 2018 to March 31, 2019 was primarily due to $15.6 million of net income and other comprehensive income on the Company's available for sale securities portfolio of $4.1 million, which was partially offset by the payment of cash dividends on common stock of $5.8 million.

The Company and Lakeland are subject to various regulatory capital requirements that are monitored by federal banking agencies. Failure to meet minimum capital requirements can lead to certain supervisory actions by regulators; any supervisory action could have a direct material adverse effect on the Company or Lakeland’s financial statements. As of March 31, 2019, the Company and Lakeland met all capital adequacy requirements to which they are subject.     

The final rules implementing the Basel Committee on Banking Supervision’s (“BCBS”) capital guidelines for U.S. banks became effective for the Company on January 1, 2015, with full compliance with all of the final rule’s requirements phased in over a multi-year schedule, occurring January 1, 2019. As of March 31, 2019, the Company’s capital levels remained characterized as “well-capitalized” under the new rules.

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The capital ratios for the Company and Lakeland for the periods presented are as follows: 

	Tier 1 Capital to Total Average Assets Ratio				Common Equity Tier 1 to Risk-Weighted Assets Ratio				Tier 1 Capital to Risk- Weighted Assets Ratio				Total Capital to Risk- Weighted Assets Ratio
	March 31, 2019		December 31, 2018		March 31, 2019		December 31, 2018		March 31, 2019		December 31, 2018		March 31, 2019		December 31, 2018
The Company	9.23	%	9.39	%	10.38	%	10.62	%	10.98	%	11.27	%	13.48	%	13.71	%
Lakeland Bank	10.11	%	10.17	%	12.02	%	12.20	%	12.02	%	12.20	%	12.81	%	13.06	%
Required capital ratios including conservation buffer	4.00	%	4.00	%	7.00	%	6.375	%	8.50	%	7.875	%	10.50	%	9.875	%
“Well capitalized” institution under FDIC Regulations	5.00	%	5.00	%	6.50	%	6.50	%	8.00	%	8.00	%	10.00	%	10.00	%

The Economic Growth, Regulatory Relief, and Consumer Protection Act (the “Act”) was signed into law during the second quarter of 2018. The Act, among other matters, amends the Federal Deposit Insurance Act to require federal banking agencies to develop a specified Community Bank Leverage Ratio (the ratio of a bank's equity capital to its consolidated assets) for banks with assets of less than $10 billion. Banks that exceed this ratio shall be deemed to comply with all other capital and leverage requirements. The Act also expands the definition of qualified mortgages that may be held by a financial institution. We are unable to predict the specific impact the Act and the implementing rules and regulations, which have not yet been written, will have on the Company and Lakeland Bank.

Non-GAAP Financial Measures

Reported amounts are presented in accordance with U.S. GAAP. The Company’s management uses certain supplemental non-GAAP information in its analysis of the Company’s financial results. Specifically, the Company provides measurements and ratios based on tangible equity and tangible assets. These measures are utilized by regulators and market analysts to evaluate a company’s financial condition and therefore, such information is useful to investors.

The Company also provides measures based on what it believes are its operating earnings on a consistent basis, and excludes material non-routine operating items which affect the GAAP reporting of results of operations. The Company’s management believes that providing this information to analysts and investors allows them to better understand and evaluate the Company’s core financial results for the periods in question.

These disclosures should not be viewed as a substitute for financial results determined in accordance with U.S. GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies.

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(dollars in thousands, except per share amounts)	March 31, 2019			December 31, 2018
Calculation of Tangible Book Value per Common Share
Total common stockholders’ equity at end of period - GAAP	$	681,343		$	623,739
Less:
Goodwill	154,153			136,433
Other identifiable intangible assets, net	5,192			1,768
Total tangible common stockholders’ equity at end of period - Non-GAAP	$	521,998		$	485,538
Shares outstanding at end of period	50,436			47,486
Book value per share - GAAP	$	13.51		$	13.14
Tangible book value per share - Non-GAAP	$	10.35		$	10.22
Calculation of Tangible Common Equity to Tangible Assets
Total tangible common stockholders’ equity at end of period - Non-GAAP	$	521,998		$	485,538
Total assets at end of period	$	6,365,063		$	5,806,093
Less:
Goodwill	154,153			136,433
Other identifiable intangible assets, net	5,192			1,768
Total tangible assets at end of period - Non-GAAP	$	6,205,718		$	5,667,892
Common equity to assets - GAAP	10.70		%	10.74		%
Tangible common equity to tangible assets - Non-GAAP	8.41		%	8.57		%

	For the Three Months Ended
(dollars in thousands)	March 31, 2019			March 31, 2018
Calculation of Return on Average Tangible Common Equity
Net income - GAAP	$	15,626		$	15,255
Total average common stockholders’ equity	$	673,205		$	583,700
Less:
Average goodwill	153,562			136,433
Average other identifiable intangible assets, net	5,254			2,300
Total average tangible common stockholders’ equity - Non-GAAP	$	514,389		$	444,967
Return on average common stockholders’ equity - GAAP	9.41		%	10.60		%
Return on average tangible common stockholders’ equity - Non-GAAP	12.32		%	13.90		%

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	For the Three Months Ended
(dollars in thousands, except per share amounts)	March 31, 2019		March 31, 2018
Reconciliation of Net Income
Net income - GAAP	$	15,626	$	15,255
Non-routine transactions, net of tax
Tax deductible merger related expenses	1,656		—
Non-tax deductible merger related expenses	491		—
Net effect of non-routine transactions	2,147		—
Net income available to common shareholders excluding non-routine transactions	$	17,773	$	15,255
Less: Earnings allocated to participating securities	141		141
Net Income, excluding non-routine transactions	$	17,632	$	15,114
Weighted average shares - Basic	50,275		$	47,503
Weighted average shares - Diluted	50,442		$	47,736
Basic earnings per share - GAAP	$	0.31	$	0.32
Diluted earnings per share - GAAP	$	0.31	$	0.32
Basic earnings per share, adjusted for non-routine transactions	$	0.35	$	0.32
Diluted earnings per share, adjusted for non-routine transactions (Core EPS)	$	0.35	$	0.32

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company manages interest rate risk and market risk by identifying and quantifying interest rate risk exposures using simulation analysis and economic value at risk models. Net interest income simulation considers the relative sensitivities of the balance sheet including the effects of interest rate caps on adjustable rate mortgages and the relatively stable aspects of core deposits. As such, net interest income simulation is designed to address the probability of interest rate changes and the behavioral response of the balance sheet to those changes. Market Value of Portfolio Equity represents the fair value of the net present value of assets, liabilities and off-balance-sheet items. Changes in estimates and assumptions made for interest rate sensitivity modeling could have a significant impact on projected results and conclusions. These assumptions could include prepayment rates, sensitivity of non-maturity deposits and other similar assumptions. Therefore, if our assumptions should change, this technique may not accurately reflect the impact of general interest rate movements on the Company’s net interest income or net portfolio value.

The starting point (or “base case”) for the following table is an estimate of the following year’s net interest income assuming that both interest rates and the Company’s interest-sensitive assets and liabilities remain at period-end levels. The net interest income estimated for the next twelve months (the base case) is $198.0 million. The information provided for net interest income assumes that changes in interest rates of plus 200 basis points and minus 200 basis points change gradually in equal increments (“rate ramp”) over the twelve month period.

	Changes in Interest Rates
Rate Ramp	+200 bp		-200 bp
Asset/Liability policy limit	(5.0	)%	(5.0	)%
March 31, 2019	(1.2	)%	(0.3	)%
December 31, 2018	(1.5	)%	(0.7	)%

The Company’s review of interest rate risk also includes policy limits for net interest income changes in various “rate shock” scenarios. Rate shocks assume that current interest rates change immediately. The information provided for net interest income assumes fluctuations or “rate shocks” for changes in interest rates as shown in the table below.

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	Changes in Interest Rates
Rate Shock	+300 bp		+200 bp		+100 bp		-100 bp		-200 bp
Asset/Liability policy limit	(15.0	)%	(10.0	)%	(5.0	)%	(5.0	)%	(10.0	)%
March 31, 2019	0.4	%	0.3	%	0.3	%	(2.3	)%	(5.6	)%
December 31, 2018	0.6	%	0.4	%	0.3	%	(2.5	)%	(8.0	)%

The base case for the following table is an estimate of the Company’s net portfolio value for the periods presented using current discount rates, and assuming the Company’s interest-sensitive assets and liabilities remain at period-end levels. The net portfolio value at March 31, 2019 (the base case) was $874.4 million. The information provided for the net portfolio value assumes fluctuations or “rate shocks” for changes in interest rates as shown in the table below. Rate shocks assume that current interest rates change immediately.

	Changes in Interest Rates
Rate Shock	+300 bp		+200 bp		+100 bp		-100 bp		-200 bp
Asset/Liability policy limit	(25.0	)%	(20.0	)%	(10.0	)%	(10.0	)%	(20.0	)%
March 31, 2019	(7.1	)%	(4.5	)%	(1.9	)%	0.1	%	(0.9	)%
December 31, 2018	(5.2	)%	(3.3	)%	(1.4	)%	(0.2	)%	(1.5	)%

The information set forth in the above tables is based on significant estimates and assumptions, and constitutes a forward-looking statement under the Private Securities Litigation Reform Act of 1995. For more information regarding the Company’s market risk and assumptions used in the Company’s simulation models, please refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Certain shortcomings are inherent in the methodologies used in the above interest rate risk measurements. Modeling changes in net interest income requires the making of certain assumptions regarding prepayment and deposit decay rates, which may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. While management believes such assumptions are reasonable, there can be no assurance that assumed prepayment rates and decay rates will approximate actual future loan prepayment and deposit withdrawal activity. Moreover, the net interest income table presented assumes that the composition of interest sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured and also assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration to maturity or repricing of specific assets and liabilities. Accordingly, although the net interest income table provides an indication of the Company’s interest rate risk exposure at a particular point in time, such measurement is not intended to and does not provide a precise forecast of the effect of changes in market interest rates on net interest income and will differ from actual results.

Item 4.  Controls and Procedures

(a)Disclosure controls and procedures. As of the end of the Company’s most recently completed fiscal quarter covered by this report, the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures pursuant to Securities Exchange Act Rule 13a-15. Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and are operating in an effective manner and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

(b)Changes in internal controls over financial reporting. There have been no changes in the Company’s internal control over financial reporting that occurred during the quarter ended March 31, 2019 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1.   Legal Proceedings

There are no pending legal proceedings involving the Company or Lakeland other than those arising in the normal course of business. Management does not anticipate that the potential liability, if any, arising out of such legal proceedings will have a material effect on the financial condition or results of operations of the Company and Lakeland on a consolidated basis.

Item 1A.   Risk Factors

There have been no material changes in risk factors from those disclosed under Item 1A, “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds Not Applicable

Item 3.   Defaults Upon Senior Securities Not Applicable

Item 4.   Mine Safety Disclosures Not Applicable

Item 5. Other Information

On May 9, 2019, Lakeland Bancorp, Inc., Lakeland Bank and Ronald E. Schwarz entered into an Amendatory Agreement (the “Amendment”) to Mr. Schwarz’s Change in Control Agreement, dated as of May 29, 2009 (as amended from time to time, the “Agreement”).  The Agreement provides for certain terms and conditions of Mr. Schwarz’s employment in the event of a “change in control” (as defined in the Agreement). The Amendment amends the “Contract Period”, as defined in the Agreement, to commence the day immediately preceding a Change in Control and ending on the earlier of (i) the second anniversary of the Change in Control, (ii) February 7, 2022, or (iii) the death of the Executive.  Prior to the Amendment, Mr. Schwarz’s Agreement provided for the Contract Period to end on the earlier of (i) the second anniversary of the Change in Control, (ii) Mr. Schwarz’s attainment of age 65, or (iii) his death. The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the Amendment, which is filed with this Quarterly Report on Form 10-Q as Exhibit 10.2 and incorporated into this Item 5 by reference.

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Item 6.   Exhibits

10.1	Change in Control Agreement, dated March 1, 2019, among Lakeland Bancorp, Inc., Lakeland Bank and Paul Ho Sing Loy
10.2	Amendatory Agreement dated May 9, 2019, to Change in Control Agreement dated May 29, 2009, among Lakeland Bancorp, Inc., Lakeland Bank and Ronald E. Schwarz
31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Lakeland Bancorp, Inc.

(Registrant)

/s/ Thomas J. Shara

Thomas J. Shara

President and Chief Executive Officer

(Principal Executive Officer)

/s/ Thomas F. Splaine

Thomas F. Splaine

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

Date: May 9, 2019

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EX-10.1

FIRST AMENDED CHANGE IN CONTROL AGREEMENT

THIS CHANGE IN CONTROL AGREEMENT (the "Agreement"), is dated as of the 1st day of March 2019, among Lakeland Bancorp, Inc. (the "Holding Company"), a New Jersey corporation, and Lakeland Bank (the "Bank"), a New Jersey chartered commercial bank, having offices at 250 Oak Ridge Road, Oak Ridge, New Jersey 07438 (the Holding Company and the Bank are collectively referred to herein as the "Company") and Paul Ho Sing Loy (the "Executive"), and amends, restates and supersedes that certain Change In Control Agreement dates as of July, 19, 2017.

BACKGROUND

WHEREAS, the Executive is or will be employed as Executive Vice President and Chief Information Officer of the Bank; and

WHEREAS, the Company believes that the future services of the Executive are of great value to the Company and that it is important for the growth and development of the Company that the Executive continue in his position; and

WHEREAS, the Board of Directors of the Company (the “Board”) believes it is imperative that the Company be able to rely upon the Executive to continue in his position in the event that Holding Company receives any proposal from a third person concerning a possible business combination with, or acquisition of equities securities of, the Company, and that they be able to receive and rely upon his advice, if they request it, as to the best interests of the Company and its shareholders, without concern that the Executive might be distracted by the personal uncertainties and risks created by such a proposal; and

WHEREAS, to achieve that goal, and to retain the Executive’s services prior to any such activity, the Company and the Executive have agreed to enter into this Agreement to govern the Executive's termination benefits in the event of a Change in Control, as hereinafter defined;

NOW, THEREFORE, to assure the Company that it will have the continued dedication of the Executive and the availability of his advice and counsel notwithstanding the possibility, threat or occurrence of a bid to take over control of the Company, and to induce the Executive to remain in the employ of the Company, and for other good and valuable consideration, the Company and the Executive, each intending to be legally bound hereby agree as follows:

1.    Definitions

a.Cause.     For purposes of this Agreement "Cause" with respect to the termination by the Company of Executive's employment shall mean: (i) failure by the Executive to materially perform his duties for the Company under this Agreement after at least one warning in writing identifying specifically any such material failure and offering a reasonable opportunity to cure such failure; (ii) the willful engaging

by the Executive in material misconduct which causes material injury to the Company; or (iii) conviction of a crime (other than a traffic violation), habitual drunkenness, drug abuse, or excessive absenteeism other than for illness, after a warning (with respect to drunkenness or absenteeism only) in writing to refrain from such behavior. No act or failure to act on the part of the Executive shall be considered willful unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the action or omission was in the best interest of the Company. The Company shall have the burden of proving Cause by clear and convincing evidence.

b.Change in Control.    For purposes of this Agreement, a “Change in Control” shall mean the occurrence of any of the following events with respect to the Holding Company:

(i)the consummation of any consolidation or merger of the Holding Company in which the Holding Company is not the continuing or surviving corporation or pursuant to which shares of the Holding Company's common stock ("Common Stock") would be converted into cash, securities or other property, other than a merger of the Holding Company in which the holders of the shares of the Holding Company's Common Stock immediately prior to the merger have the same proportionate ownership of common stock of the surviving corporation immediately after the merger; or

(ii)the consummation of any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Holding Company, other than to a subsidiary or affiliate; or

(iii)an approval by the shareholders of the Holding Company of any plan or proposal for the liquidation or dissolution of the Holding Company; or

(iv)any action pursuant to which any person (as such term is defined in Section 13(d) of the Exchange Act), corporation or other entity (other than any person who owns more than ten percent (10%) of the outstanding Common Stock on the date this Agreement is entered into, the Holding Company or any benefit plan sponsored by the Holding Company or any of its subsidiaries) shall become the "beneficial owner" (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of shares of capital stock entitled to vote generally for the election of directors of the Holding Company ("Voting Securities") representing fifty-one (51%) percent or more of the combined voting power of the Holding Company's then outstanding Voting Securities (calculated as provided in Rule 13d-3(d) in the case of rights to acquire any such securities), unless, prior to such person so becoming such beneficial owner, the Board shall determine that such person so becoming such beneficial owner shall not constitute a Change in Control; or

(v)the individuals (x) who, as of the date on which the Agreement is entered into, constitute the Board (the "Original Directors") and (y) who thereafter are elected to the Board and whose election, or nomination for election, to the Board was approved by a vote of at least two thirds of the

2

Original Directors then still in office (such Directors being called "Additional Original Directors^") and (z) who thereafter are elected to the Board and whose election or nomination for election to the Board was approved by a vote of at least two thirds of the Original Directors and Additional Original Directors then still in office, cease for any reason to constitute a majority of the members of the Board.

c.     Contract Period. "Contract Period" shall mean the period

commencing the day immediately preceding a Change in Control and ending on the earlier of: (i) the second anniversary of the Change in Control; (ii) the date the Executive would attain age 65; or (iii) the death of the Executive.

d.Exchange Act. "Exchange Act" means the Securities Exchange Act of 1934, as amended.

e.Good Reason. When used with reference to a voluntary termination by Executive of his employment with the Company, "Good Reason^" shall mean any of the following, if taken without Executive's express written consent:

(i)The assignment to Executive of any duties inconsistent with, or the reduction of authority, powers or responsibilities associated with, Executive's position, title, duties, responsibilities and status with the Company immediately prior to a Change in Control (a "Change in Assignment") or any removal of Executive from, or any failure to re-elect Executive to, any position(s) or office(s) Executive held immediately prior to such Change in Control. A change in position, title, duties, responsibilities and status or position(s) or office(s) following a Change in Control shall constitute a Change in Assignment unless the Executive's new title, duties and responsibilities are accepted in writing by the Executive, in the sole discretion of the Executive;

(ii)A reduction by the Company in Executive's annual base compensation as in effect immediately prior to a Change in Control;

(iii)A failure by the Company to continue for Executive any bonus plan in which Executive participated immediately prior to the Change in Control or a failure by the Company to continue Executive as a participant in such plan on at least the same basis as Executive participated in such plan prior to the Change in Control;

(iv)After a Change in Control, the Company's transfer of Executive to another geographic location outside of New Jersey or more than 25 miles from his present office location, except for required travel on the Company's business to an extent substantially consistent with Executive's business travel obligations immediately prior to such Change in Control;

(v)The failure by the Company to continue in effect for Executive any employee benefit plan, program or arrangement (including, without limitation any 401(k) plan, pension

3

plan, life insurance plan, health and accident plan, disability plan, or stock option plan) in which Executive is participating immediately prior to a Change in Control (except that the Company may institute or continue plans, programs or arrangements providing Executive with substantially similar benefits); the taking of any action by the Company after a Change in Control which would adversely affect Executive's participation in or materially reduce Executive's benefits under, any of such plans, programs or arrangements, the failure to continue, or the taking of any action which would deprive Executive, of any material fringe benefit enjoyed by Executive immediately prior to such Change in Control; or the failure by the Company to provide Executive with the number of paid vacation days to which Executive was entitled immediately prior to such Change in Control; or

(vi) The failure by the Company to obtain an assumption in writing of the obligations of the Company to perform this Agreement by any successor to the Company and to provide such assumption to the Executive upon consummation of the event giving rise to the Change in Control.

2.Employment. During the Contract Period, the Company hereby agrees to employ the Executive, and the Executive hereby accepts employment, upon the terms and conditions set forth herein.

3.Position. During the Contract Period, the Executive shall be employed as Executive Vice President and Chief Information Officer of the Company or such other corporate or divisional profit center as shall then be the principal successor to the business, assets and properties of the Company, with the same title and the same duties and responsibilities as before the Change in Control. The Executive shall devote his full time and attention to the business of the Company, and shall not during the Contract Period be engaged in any other business activity. This paragraph shall not be construed as preventing the Executive from managing any investments of his which do not require any service on his part in the operation of such investments.

4.Cash Compensation. The Company shall pay to the Executive salary and bonus compensation for his services during the Contract Period as follows:

a.Annual Salary. An Annual salary equal to the annual salary in effect immediately prior to Change in Control. The annual salary shall be payable in installments in accordance with the Company’s usual payroll method. The annual salary shall not be reduced during the Contract Period.

b.Annual Bonus. An Annual cash bonus equal to the highest annual bonus paid to the Executive during the three most recent fiscal years prior to the Change in Control. The bonus shall be payable at the time and in the manner which the Company paid such bonuses prior to the Change in Control.

5.Expenses and Fringe Benefits.     During the Contract Period, the Executive shall be entitled to reimbursement for all business expenses incurred by his with respect to the business of the Company in the same manner and to the same extent as such expenses were previously reimbursed to his immediately prior to the Change in Control. If prior to the Change in Control, the Executive was entitled to the use of an

4

automobile, he shall be entitled to the same use of an automobile at least comparable to the automobile provided to his prior to the Change in Control, and he shall be entitled to vacations and sick days, in accordance with the practices and procedures of the Company, as such existed immediately prior to the Change in Control. During the Contract Period, the Executive also shall be entitled to hospital, health, medical and life insurance, and any other benefits enjoyed, from time to time, by Executive officers of the Company, all upon terms as favorable as those enjoyed by other Executive officers of the Company. Notwithstanding anything in this section to the contrary, if the Company adopts any change in the expenses allowed to, or fringe benefits provided for, Executive officers of the Company, and such policy is uniformly applied to all Executive officers of the Company (and any successor or acquirer of the Company, if any), including the chief executive officer of such entities, then no such change shall be deemed to be contrary to this Section.

All reimbursements provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A of the Code (as defined in Section 9 below), including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during Executive's lifetime (or during a shorter period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred, and (iv) the right to reimbursement is not subject to liquidation or exchange for another benefit.

5

6.Termination for Cause. The Company shall have the right to terminate the Executive for Cause, upon written notice to his of the termination which notice shall specify the reasons for the termination. In the event of a valid termination for Cause, the Executive shall not be entitled to any further compensation or benefits under this Agreement.

7.Disability. During the Contract Period, if the Executive becomes permanently disabled, or is unable to perform his duties hereunder for six consecutive months, the Company may terminate the employment of the Executive. In such event, the Executive shall not be entitled to any further benefits under this Agreement other than payments under any disability policy which the Company may obtain for the benefit of senior officers generally.

8.Death Benefits. Upon the Executive's death during the Contract Period, the Executive shall be entitled to the benefits of any life insurance policy paid for by the Company which provides, permits and allows the Executive to name a beneficiary other than the Company, but his estate shall not be entitled to any further benefits under this Agreement or any other life insurance policy, except for such policies or benefits customarily provided to employees of the Bank.

9.Termination Without Cause or Resignation for Good Reason. The Company may terminate the Executive without Cause during the Contract Period by written notice to the Executive, or the Executive may resign for Good Reason during the Contract Period upon four weeks' prior written notice to the Company specifying the Good Reason. If the Company terminates the Executive's employment during the Contract Period without Cause or if the Executive resigns during the Contract Period for Good Reason, the Company shall, within 20 business days of the Executive's termination of employment, pay the Executive a lump sum equal to two times the highest annual compensation, including only salary and cash bonus, paid the Executive during any of the three calendar years immediately prior to the Change in Control (the "Lump Sum Payment"). During the remainder of the Contract Period, the Company also shall continue to provide the Executive with and pay for medical and hospital insurance, disability insurance and life insurance, as were provided and paid for at the time of the termination of his employment with the Company; provided, that such insurance coverage shall be provided only to the extent permitted under the terms and conditions of the Company's employee benefit plans. The Executive shall also have the right to purchase from the Company, at book value price, such automobile of the Company, if any, as was used by the Executive while employed by the Company; provided, that the Executive exercises such right within 10 days of his termination of employment and completes the purchase transaction within 30 days of his termination of employment. The Executive shall not have a duty to mitigate the damages suffered by his in connection with the termination by the Company of his employment without Cause or a resignation for Good Reason during the Contract Period.

The Lump Sum Payment is intended to be administered and interpreted in a manner such that it shall not be subject to “additional tax” within the meaning of Section 409A(a)(1)(B) of the Code. Notwithstanding

6

any provision of this Agreement to the contrary, if and to the extent necessary to comply with the restriction in Section 409A(a)(2)(B) of the Code concerning payments to “specified employees,” the Lump Sum Payment shall be paid on the first business day of the seventh month following the Executive's separation from service with the Company, and shall be paid together with interest accrued during the period of such restriction at a rate, per annum, equal to the applicable federal short-term rate (compounded monthly) in effect under Section 1274(d) of the Code on the date of termination. Notwithstanding provision of this Agreement to the contrary, the Executive shall not be considered to have terminated employment with the Company for purposes of this Section 9 unless he would be considered to have incurred a “termination of employment” from the Company within the meaning of Treasury Regulation §1.409A-1(h)(1)(ii).

The Executive acknowledges that any tax liability incurred by the Executive under Section 409A of the Code is solely the responsibility of the Executive.

For purposes of the foregoing, the Executive’s salary and cash bonus shall be determined without regard to any reductions to such amounts made at the election of the Executive, including without limitation, reductions pursuant to any deferral election under a 401(k) plan or deferred compensation plan or arrangement or contributions made under a “cafeteria plan” within the meaning of Section 125 of the Internal Revenue Code of 1986, as amended.

10.Resignation Without Good Reason. The Executive shall be entitled to resign from the employment of the Company at any time during the Contract Period without Good Reason, but upon such resignation the Executive shall not be entitled to any additional compensation for the time after which he ceases to be employed by the Company, and shall not be entitled to any of the other benefits provided hereunder. No such resignation shall be effective unless in writing with four weeks^' notice thereof.

11.Non-Disclosure of Confidential Information. In consideration of the covenants of the Company herein, the Executive agrees as follows:

a.The Executive hereby agrees and acknowledges that he has and has had access to or is aware of Confidential Information. The Executive hereby agrees that he shall keep strictly confidential and will not during and after his employment with the Company, without the Company's express written consent, divulge, furnish or make accessible to any person or entity, or make use of for the benefit of herself or others, any Confidential Information obtained, possessed, or known by his except as required in the regular course of performing the duties and responsibilities of his employment by the Company while in the employ of the Company, and that he will, prior to or upon the date on which his employment with the Company terminates (the "Date of Termination") deliver or return to the Company all such Confidential Information that is in written or other physical or recorded form or which has been reduced to written or other physical or recorded form, and all copies thereof, in his possession, custody or control. The foregoing covenant shall not apply to (i) any Confidential Information that becomes generally known or available to the public other

7

than as a result of a breach of the agreements of the Executive contained herein, (ii) any disclosure of Confidential Information by the Executive that is expressly required by judicial or administrative order; provided however that the Executive shall have (x) notified the Company as promptly as possible of the existence, terms and circumstances of any notice, subpoena or other process or order issued by a court or administrative authority that may require his to disclose any Confidential Information, and (y) cooperated with the Company, at the Company's request, in taking legally available steps to resist or narrow such process or order and to obtain an order or other reliable assurance that confidential treatment will be given to such Confidential Information as is required to be disclosed.

b.For purposes of this Agreement, "Confidential Information" means all non-public or proprietary information, data, trade secrets, "know-how", or technology with respect to any products, designs, improvements, research, styles, techniques, suppliers, clients, markets, methods of distribution, accounting, advertising and promotion, pricing, sales, finances, costs, profits, financial condition, organization, personnel, business systems (including without limitation computer systems, software and programs), business activities, operations, budgets, plans, prospects, objectives or strategies of the Company.

12.    Post-Employment Obligations. In consideration of the covenants of the Company herein, the Executive agrees as follows:

a.The Executive agrees that while he is in the employ of the Company and for a one year period after the Date of Termination (unless such termination is by the Company without Cause), he shall not, without the prior written consent of the Company, directly or indirectly, and regardless of the reason for his ceasing to be employed by the Company, employ, solicit for employment, or advise or recommend to any other person that they employ or solicit for employment or retention as a consultant, any person who is, or was at any time within twelve (12) months prior to the Date of Termination, an employee of, or exclusive consultant to, the Company.

b.If the Executive commits a breach or is about to commit a breach, of any of the provisions of Sections 11 or 12 hereof, the Company shall have the right to have the provisions of this Agreement specifically enforced by any court having equity jurisdiction without being required to post bond or other security and without having to prove the inadequacy of the available remedies at law, it being acknowledged and agreed that any such breach or threatened breach will cause irreparable injury to the Company that money damages will not provide an adequate remedy to the Company. In addition, the Company may take all such other actions and remedies available to them under law or in equity and shall be entitled to such damages as they can show they have sustained by reason of such breach.

c.The parties acknowledge that the type and periods of restriction imposed in the provisions of Sections 11 and 12 hereof are fair and reasonable and are reasonably required for the protection of the Company and the goodwill associated with the business of the Company; and that the provisions of

8

Sections 11 and 12 have been specifically negotiated by sophisticated parties and are given as an integral part of this Agreement.

13.No Effect Prior to Change in Control. This Agreement shall not affect any rights of the Company or the Executive prior to a Change in Control or any rights of the Executive granted in any other agreement, plan or arrangements. The rights, duties and benefits provided hereunder shall only become effective upon a Change in Control. If the employment of the Executive by the Company is terminated for any reason prior to a Change in Control, this Agreement shall thereafter be of no further force and effect.

14.Certain Reduction of Payments by the Company.

a.Anything in this Agreement to the contrary notwithstanding, prior to the payment of any compensation or benefits payable under Section 9 hereof, the certified public accountants of the Company immediately prior to a Change of Control (the ^"Certified Public Accountants") shall determine as promptly as practical and in any event within 20 business days following the termination of employment of Executive whether any payment or distribution by the Company to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise) (a "Payment") would more likely than not be nondeductible by the Company for Federal income purposes because of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), and if it is then the aggregate present value of amounts payable or distributable to or for the benefit of Executive pursuant to this Agreement are hereinafter referred to as "Agreement Payments" shall be reduced (but not below zero) to the Reduced Amount. For purposes of this paragraph, the "Reduced Amount" shall be an amount expressed in present value which maximizes the aggregate present value of Agreement Payments without causing any Payment to be nondeductible by the Company because of said Section 280G of the Code.

b. If under paragraph a of this section the Certified Public Accountants determine that any Payment would more likely than not be nondeductible by the Company because of Section 280G of the Code, the Company shall promptly give the Executive notice to that effect and a copy of the detailed calculation thereof and of the Reduced Amount, and the Executive may then elect, in his sole discretion, which and how much of the Agreement Payments shall be eliminated or reduced (as long as after such election the aggregate present value of the Agreement Payments equals the Reduced Amount), and shall advise the Company in writing of his election within 20 business days of his receipt of notice. If no such election is made by the Executive within such 20-day period, the Company may elect which and how much of the Agreement Payments shall be eliminated or reduced (as long as after such election the aggregate present value of the Agreement Payments equals the Reduced Amount) and shall notify the Executive promptly of such election. For purposes of this paragraph, present value shall be determined in accordance with Section 280G (d) (4) of the Code. All determinations made by the Certified Public Accountants shall be binding upon the Company and Executive and shall be made within 20 days of a termination of employment

9

of Executive. The Company may suspend for a period of up to 30 days after termination of employment the Lump Sum Payment and any other payments or benefits due to the Executive under Section 9 hereof until the Certified Public Accountants finish the determination and the Executive (or the Company, as the case may be) elect how to reduce the Agreement Payments, if necessary. As promptly as practicable following such determination and the elections hereunder, the Company shall pay to or distribute to or for the benefit of Executive such amounts as are then due to Executive under this Agreement and shall promptly pay to or distribute for the benefit of Executive in the future such amounts as become due to Executive under this Agreement.

c.As a result of the uncertainty in the application of Section 280G of the Code, it is possible that Agreement Payments may have been made by the Company which should not have been made ("Overpayment") or that additional Agreement Payments which will have not been made by the Company could have been made ("Underpayment^"), in each case, consistent with the calculation of the Reduced Amount hereunder. In the event that the Certified Public Accountants, based upon the assertion of a deficiency by the Internal Revenue Service against the Company or Executive which said Certified Public Accountant believe has a high probability of success, determines that an Overpayment has been made, any such Overpayment shall be treated for all purposes as a loan to Executive which Executive shall repay to the Company together with interest at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Code; provided, however, that no amount shall be payable by Executive to the Company in and to the extent such payment would not reduce the amount which is subject to taxation under Section 4999 of the Code. In the event that the Certified Public Accountants, based upon controlling precedent, determine that an Underpayment has occurred, any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive together with interest at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Code.

15.Severance Compensation and Benefits Not in Derogation of other Benefits. Anything to the contrary herein contained notwithstanding, the payment or obligation to pay any monies, or granting of any benefits, rights or privileges to Executive as provided in this Agreement now has or will have under any plans or programs of the Company, except that the Executive shall not be in lieu or derogation of the rights and privileges that the Executive now has or will have under any plans or programs of the Company, except that the Executive shall not be entitled to the benefits of any other plan or program of the Company expressly providing for severance or termination pay if the Executive is terminated without Cause or resigns for Good Reason after a Change in Control.

16.Miscellaneous. The terms of this Agreement shall be governed by, and interpreted and construed in accordance with the provisions of, the laws of New Jersey and, to the applicable, federal law. This Agreement supersedes all prior agreements and understandings with respect to the matters covered

10

hereby. The amendment or termination of this Agreement may be made only in writing executed by the Company and the Executive, and no amendment or termination of this Agreement shall be effective unless and until made in such in writing. This Agreement shall be binding upon any successor (whether direct or indirect, by purchase, merge, consolidation, liquidation or otherwise) to all or substantially all of the assets of the Company. This Agreement is personal to the Executive and the Executive may not assign any of his rights or duties hereunder but this Agreement shall be enforceable by the Executive’s legal representatives, executors or administrators. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and it shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart.

IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by its duly authorized representatives pursuant to the authority of its Board, and the Executive has personally executed this Agreement, all as of the day and year first written above.

LAKELAND BANCORP, INC.

By: /s/ Thomas J. Shara

Thomas J. Shara, President and CEO

LAKELAND BANK

By: /s/ Thomas J. Shara

                         Thomas J. Shara, President and CEO

Executive:

By: /s/ Paul Ho Sing Loy

PAUL HO SING LOY

11

EX-10.2

AMENDATORY AGREEMENT

TO CHANGE IN CONTROL AGREEMENT

This AMENDATORY AGREEMENT (the “Amendatory Agreement”) is made and entered into as of the 9^th day of May, 2019 by and among Lakeland Bancorp, Inc. (“Bancorp”), Lakeland Bank (the “Bank” and, collectively with Bancorp, the “Company”) and Ronald E. Schwarz (the “Executive”).

WITNESSETH:

WHEREAS, the Company and the Executive entered into a certain Change in Control Agreement, dated as of May 29, 2009, which Agreement has been amended from time to time thereafter (as amended, the “Agreement”); and

WHEREAS, the Agreement provides for certain terms and conditions of the Executive’s employment in the event of a “Change in Control” (as defined therein); and

WHEREAS, the Company and the Executive desire to amend the Agreement to clarify certain terms of the severance to be paid thereunder; and

WHEREAS, Section 16 of the Agreement permits the Agreement to be amended by a writing executed by the parties thereto;

NOW, THEREFORE, the Company and the Executive hereby agree that, effective as of the date first above written, the following sections are hereby amended:

1. Section 1(c) of the Agreement (definition of the “Contract Period”) is hereby amended by deleting the noted subsection in its entirety and replacing it with the following:

Contract Period. “Contract Period” shall mean the period commencing the day immediately preceding a Change in Control and ending of the earlier of (i) the second anniversary of the Change in Control, (ii) February 7, 2022, or (iii) the death of the Executive.”

Except as specifically provided herein to the contrary, the Agreement shall continue in full force and effect.

[Signature Page Follows]

IN WITNESS WHEREOF, the Company has caused this Amendatory Agreement to be executed and the Executive has hereunto set his hand, all as of the date first above written.

EXECUTIVE:

/s/ Ronald E. Schwarz

Ronald E. Schwarz    

LAKELAND BANCORP, INC.

By: /s/Thomas J. Shara

Thomas J. Shara, President and CEO

LAKELAND BANK

By: /s/Thomas J. Shara

Thomas J. Shara, President and CEO

36167484.

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Thomas J. Shara, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Lakeland Bancorp, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2019

/s/ Thomas J. Shara

Thomas J. Shara

President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Thomas F. Splaine, Jr., certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Lakeland Bancorp, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: May 9, 2019

/s/ Thomas F. Splaine, Jr.

Thomas F. Splaine, Jr.

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

AND OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Lakeland Bancorp, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2019 filed with the Securities and Exchange Commission (the “Report”), Thomas J. Shara, President and Chief Executive Officer of the Company, and Thomas F. Splaine, Jr., Executive Vice President and Chief Financial Officer of the Company, each certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that based on his knowledge:

(1) The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the consolidated financial condition of the Company as of the dates presented and consolidated results of operations of the Company for the periods presented.

Dated: May 9, 2019

/s/ Thomas J. Shara

Thomas J. Shara,

President and Chief Executive Officer

(Principal Executive Officer)

/s/ Thomas F. Splaine, Jr.

Thomas F. Splaine, Jr.

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

This certification has been furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	May 01, 2019
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Trading Symbol	LBAI
Entity Registrant Name	LAKELAND BANCORP INC
Entity Central Index Key	0000846901
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		50,441,279

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
ASSETS
Cash	$ 205,322	$ 205,199
Interest-bearing deposits due from banks	21,037	3,400
Total cash and cash equivalents	226,359	208,599
Investment securities available for sale, at fair value	659,238	638,618
Equity securities, at fair value	15,232	15,921
Investment securities held to maturity; fair value of $158,219 at March 31, 2019 and $150,932 at December 31, 2018	159,308	153,646
Federal Home Loan Bank and other membership bank stock, at cost	16,951	13,301
Loans, net of deferred costs (fees)	4,921,391	4,456,733
Less: allowance for loan losses	37,979	37,688
Net loans	4,883,412	4,419,045
Loans held for sale	600	1,113
Premises and equipment, net	51,703	49,175
Operating lease right-of-use assets	19,239
Accrued interest receivable	17,515	16,114
Goodwill	154,153	136,433
Other identifiable intangible assets	5,192	1,768
Bank owned life insurance	110,430	110,052
Other assets	45,731	42,308
TOTAL ASSETS	6,365,063	5,806,093
Deposits:
Noninterest-bearing	1,071,890	950,218
Savings and interest-bearing transaction accounts	3,046,322	2,913,414
Time deposits $250 thousand and under	753,126	589,737
Time deposits over $250 thousand	193,246	167,301
Total deposits	5,064,584	4,620,670
Federal funds purchased and securities sold under agreements to repurchase	261,266	233,905
Other borrowings	175,783	181,118
Subordinated debentures	118,193	105,027
Operating lease liabilities	20,823
Other liabilities	43,071	41,634
TOTAL LIABILITIES	5,683,720	5,182,354
STOCKHOLDERS’ EQUITY
Common stock, no par value; authorized shares, 100,000,000 at March 31, 2019 and December 31, 2018; issued shares, 50,435,663 at March 31, 2019 and 47,486,250 at December 31, 2018	558,245	514,703
Retained earnings	126,787	116,874
Accumulated other comprehensive loss	(3,689)	(7,838)
TOTAL STOCKHOLDERS’ EQUITY	681,343	623,739
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 6,365,063	$ 5,806,093

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Investment securities held to maturity; fair value	$ 158,219	$ 150,932
Common stock, par value (in usd per share)	$ 0	$ 0
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	50,435,663	47,486,250

XML

Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
INTEREST INCOME
Loans and fees	$ 57,642	$ 45,544
Federal funds sold and interest-bearing deposits with banks	254	166
Taxable investment securities and other	4,873	3,992
Tax-exempt investment securities	408	443
TOTAL INTEREST INCOME	63,177	50,145
INTEREST EXPENSE
Deposits	11,497	5,755
Federal funds purchased and securities sold under agreements to repurchase	608	134
Other borrowings	2,466	2,020
TOTAL INTEREST EXPENSE	14,571	7,909
NET INTEREST INCOME	48,606	42,236
Provision for loan losses	508	1,284
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	48,098	40,952
NONINTEREST INCOME
Service charges on deposit accounts	2,573	2,611
Commissions and fees	1,412	1,272
Income on bank owned life insurance	683	719
Gain (loss) on equity securities	353	(18)
Gains on sales of loans	371	246
Other income	331	504
TOTAL NONINTEREST INCOME	5,723	5,334
NONINTEREST EXPENSE
Salaries and employee benefits	19,231	16,861
Net occupancy expense	2,954	2,738
Furniture and equipment	2,116	2,206
FDIC insurance expense	450	425
Stationery, supplies and postage	447	416
Marketing expense	469	361
Data processing expense	1,327	466
Telecommunications expense	493	421
ATM and debit card expense	602	510
Core deposit intangible amortization	304	157
Other real estate and repossessed asset expense	86	46
Merger related expenses	2,860	0
Other expenses	2,645	2,530
TOTAL NONINTEREST EXPENSE	33,984	27,137
Income before provision for income taxes	19,837	19,149
Provision for income taxes	4,211	3,894
NET INCOME	$ 15,626	$ 15,255
PER SHARE OF COMMON STOCK
Basic earnings (in usd per share)	$ 0.31	$ 0.32
Diluted earnings (in dollars per share)	0.31	0.32
Dividends (in usd per share)	$ 0.115	$ 0.1

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Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Statement of Comprehensive Income [Abstract]
NET INCOME	$ 15,626	$ 15,255
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Unrealized gains (losses) on securities available for sale	4,363	(5,732)
Unrealized (losses) gains on derivatives	(214)	283
Other comprehensive income (loss)	4,149	(5,449)
TOTAL COMPREHENSIVE INCOME	$ 19,775	$ 9,806

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Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative adjustment for adoption of ASU 2016-01				$ (2,043)
January 1, 2018, as adjusted				(4,392)
Balance at beginning of period at Dec. 31, 2017	$ 583,122	$ 512,734	$ 72,737	(2,349)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	15,255		15,255
Other comprehensive loss, net of tax	(5,449)			(5,449)
Stock based compensation	994	994
Exercise of stock options	248	248
Retirement of restricted stock	(744)	(744)
Cash dividends, common stock	(4,778)		(4,778)
Balance at end of period at Mar. 31, 2018	588,648	513,232	85,257	(9,841)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative adjustment for adoption of ASU 2016-01				0
January 1, 2018, as adjusted				(7,838)
Balance at beginning of period at Dec. 31, 2018	623,739	514,703	116,874	(7,838)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	15,626
Other comprehensive loss, net of tax	4,149			4,149
Stock based compensation	696	696
Retirement of restricted stock	(571)	(571)
Cash dividends, common stock	(5,838)		(5,838)
Issuance of stock for Highlands acquisition	43,417	43,417
Balance at end of period at Mar. 31, 2019	$ 681,343	$ 558,245	$ 126,787	$ (3,689)

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Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME	$ 15,626	$ 15,255
Adjustments to reconcile net income to net cash provided by operating activities:
Net amortization of premiums, discounts and deferred loan fees and costs	497	1,250
Depreciation and amortization	2,138	1,323
Amortization of intangible assets	304	157
Amortization of operating lease right-of-use assets	652
Provision for loan losses	508	1,284
Loans originated for sale	(8,931)	(8,473)
Proceeds from sales of loans held for sale	10,928	9,175
Change in market value of equity securities	(353)	18
Gains on sales of loans held for sale	(371)	(246)
Gains on other real estate and other repossessed assets	(36)	(25)
Losses on sales of premises and equipment	85	0
Stock-based compensation	696	994
Excess tax benefits	131	298
Increase in other assets	(2,590)	(2,388)
Increase in other liabilities	959	1,262
NET CASH PROVIDED BY OPERATING ACTIVITIES	20,243	19,884
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash acquired in acquisitions	13,454	0
Proceeds from repayments and maturities of available for sale securities	42,074	20,928
Proceeds from repayments and maturities of held to maturity securities	4,153	5,820
Proceeds from sales of equity securities	1,138	0
Purchase of available for sale securities	(36,085)	(24,589)
Purchase of held to maturity securities	(8,510)	(18,461)
Purchase of equity securities	(95)	(326)
Proceeds from redemptions of Federal Home Loan Bank stock	25,792	688
Purchases of Federal Home Loan Bank stock	(27,675)	0
Net increase in loans	(38,506)	(73,247)
Proceeds from sales of other real estate and repossessed assets	253	145
Proceeds from dispositions and sales of premises and equipment	953	0
Purchases of premises and equipment	(1,793)	(1,354)
NET CASH USED IN INVESTING ACTIVITIES	(24,847)	(90,396)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits	34,545	79,339
Increase in federal funds purchased and securities sold under agreements to repurchase	27,361	1,549
Repayments of other borrowings	(33,133)	(15,000)
Exercise of stock options	0	248
Retirement of restricted stock	(571)	(744)
Dividends paid	(5,838)	(4,778)
NET CASH PROVIDED BY FINANCING ACTIVITIES	22,364	60,614
Net increase (decrease) in cash and cash equivalents	17,760	(9,898)
Cash and cash equivalents, beginning of period	208,599	142,933
CASH AND CASH EQUIVALENTS, END OF PERIOD	226,359	133,035
Supplemental schedule of non-cash investing and financing activities:
Cash paid during the period for income taxes	230	2,046
Cash paid during the period for interest	13,001	6,716
Transfer of loans into other repossessed assets and other real estate owned	102	669
Initial recognition of operating lease right-of-use assets	19,239
Initial recognition of operating lease liabilities	20,823
Non-cash assets acquired:
Federal Home Loan Bank stock	1,767	0
Investment securities available for sale	22,734	0
Loans, including loans held for sale	428,072	0
Goodwill and other intangible assets, net	21,448	0
Other assets	8,602	0
Total non-cash assets acquired	482,623	0
Deposits	409,638	0
Other borrowings	40,957	0
Other liabilities	2,065	0
Total liabilities assumed	452,660	0
Common stock issued and fair value of stock options converted to Lakeland Bancorp stock options	$ 43,417	$ 0

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Significant Accounting Policies

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Significant Accounting Policies

SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

This quarterly report presents the consolidated financial statements of Lakeland Bancorp, Inc. and its subsidiaries, including Lakeland Bank (“Lakeland”) and the Bank’s wholly owned subsidiaries (collectively, the “Company”). The accounting and reporting policies of the Company conform with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and predominant practices within the banking industry. The Company’s unaudited interim financial statements reflect all adjustments, such as normal recurring accruals that are, in the opinion of management, necessary for the fair presentation of the results of the interim periods. The results of operations for the three months ended March 31, 2019 do not necessarily indicate the results that the Company will achieve for all of 2019.

Certain information and footnote disclosures required under U.S. GAAP have been condensed or omitted, as permitted by rules and regulations of the Securities and Exchange Commission. These unaudited interim financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes that are presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. Certain reclassifications have been made in the consolidated financial statements to conform with current year classifications.

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Acquisitions

3 Months Ended

Mar. 31, 2019

Business Combinations [Abstract]

Acquisitions

ACQUISITIONS

On January 4, 2019, the Company completed its acquisition of Highlands Bancorp, Inc. ("Highlands"), a bank holding company headquartered in Vernon, New Jersey. Highlands was the parent of Highlands State Bank, which operated four branches in Sussex, Passaic and Morris Counties in New Jersey. This acquisition enabled the Company to broaden its presence in those counties. Effective as of the close of business on January 4, 2019, Highlands merged into the Company and Highlands State Bank merged into Lakeland. Pursuant to the merger agreement, the shareholders of Highlands received for each outstanding share of Highlands common stock that they owned at the effective time of the merger, 1.015 shares of Lakeland Bancorp, Inc. common stock. The Company issued 2,837,524 shares of its common stock in the merger. Outstanding Highlands options were paid out in cash at the difference between $14.71 and an average strike price of $8.09 for a total cash payment of $797,000.

The acquisition was accounted for under the acquisition method of accounting and accordingly, the assets acquired and liabilities assumed in the acquisition were recorded at their estimated fair values as of the acquisition date. Highlands' assets were recorded at their preliminary estimated fair values as of January 4, 2019 and Highlands' results of operations will be included in the Company's Consolidated Statements of Income from that date forward.

The assets acquired and liabilities assumed in the acquisition were recorded at their estimated fair values based on management's best estimates using information available at the date of the acquisition, including the use of a third-party valuation specialist. The fair values are preliminary estimates and subject to adjustment for up to one year after the closing date of the acquisition.

The following table summarizes the estimated fair value of the acquired assets and liabilities assumed at the date of acquisition for Highlands.

(in thousands)
Cash and cash equivalents	13,454
Securities, available for sale	22,734
Federal Home Loan Bank stock	1,767
Loans held for sale	1,113
Loans	426,959
Premises and equipment	3,253
Goodwill	17,720
Identifiable intangible assets	3,728
Accrued interest receivable and other assets	5,349
Total assets acquired	496,077
Deposits	(409,638		)
Other borrowings	(27,800		)
Subordinated debt	(13,157		)
Other liabilities	(2,065		)
Total liabilities assumed	(452,660		)
Net assets acquired	$	43,417

Loans acquired in the Highlands acquisition were recorded at fair value and subsequently accounted for in accordance with ASC Topic 310. There was no carryover related allowance for loan losses. The fair values of loans acquired from Highlands were estimated using cash flow projections based on the remaining maturity and repricing terms. Cash flows were adjusted for estimated future credit losses and the rate of prepayments. Projected cash flows were then discounted to present value using a risk-adjusted market rate for similar loans.

The following is a summary of the credit impaired loans acquired in the Highlands acquisition as of the closing date.

(in thousands)
Contractually required principal and interest at acquisition	$	20,025
Contractual cash flows not expected to be collected (non-accretable difference)	4,758
Expected cash flows at acquisition	$	15,267
Interest component of expected cash flows (accretable difference)	1,420
Fair value of acquired loans	$	13,847

The core deposit intangible totaled $3.7 million and is being amortized over its estimated useful life of approximately ten years using an accelerated method. The goodwill will be evaluated annually for impairment. The goodwill is not deductible for tax purposes.

The fair values of deposit liabilities with no stated maturities such as checking, money market and savings accounts, were assumed to equal the carrying amounts since these deposits are payable on demand. The fair values of certificates of deposits and IRAs represent the present value of contractual cash flows discounted at market rates for similar certificates of deposit.

Direct costs related to the acquisition were expensed as incurred. During the three months ended March 31, 2019, the Company incurred $2.9 million of merger and acquisition integration-related expenses, which have been separately stated in the Company's Consolidated Statements of Income.

Supplemental Pro Forma Financial Information

The following table provides unaudited condensed pro forma financial information assuming that the Highlands acquisition had been completed as of January 1, 2019, for the three months ended March 31, 2019 and as of January 1, 2018 for the three months ended March 31, 2018. The table below has been prepared for comparative purposes only and is not necessarily indicative of the actual results that would have been attained had the acquisitions occurred as of the beginning of the periods presented, nor is it indicative of future results. Furthermore, the unaudited pro forma information does not reflect management’s estimate of any revenue-enhancing opportunities nor anticipated cost savings or the impact of conforming certain accounting policies of the acquired companies to the Company’s policies that may have occurred as a result of the integration and consolidation of Highlands' operations. The pro forma information shown reflects adjustments related to certain purchase accounting fair value adjustments; amortization of core deposit and other intangibles; and related income tax effects. The Company has not provided separate information regarding revenue and earnings of Highlands since the acquisition because of the manner in which Highlands' branches and lending team were immediately merged into Lakeland’s branches and lending team making such information impracticable to provide.

	Pro Forma		Pro Forma
(in thousands)	March 31, 2019		March 31, 2018
Net interest income	$	48,753	$	46,787
Provision for loan losses	508		1,382
Noninterest income	5,694		6,198
Noninterest expense	31,205		30,501
Net income	17,784		16,687
Earnings per share:
Fully diluted	$	0.35	$	0.33

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Revenue Recognition

3 Months Ended

Mar. 31, 2019

Revenue from Contract with Customer [Abstract]

Revenue Recognition

REVENUE RECOGNITION

The Company’s primary source of revenue is interest income generated from loans and investment securities. Interest income is recognized according to the terms of the financial instrument agreement over the life of the loan or investment security unless it is determined that the counterparty is unable to continue making interest payments. Interest income also includes prepaid interest fees from commercial customers, which approximates the interest foregone on the balance of the loan prepaid.

The Company’s additional source of income, also referred to as noninterest income, is generated from deposit related fees, interchange fees, loan fees, merchant fees, loan sales and other miscellaneous income and is largely based on contracts with customers. In these cases, the Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. The Company considers a customer to be any party to which the Company will provide goods or services that are an output of the Company’s ordinary activities in exchange for consideration. There is little seasonality with regards to revenue from contracts with customers and all inter-company revenue is eliminated when the Company’s financial statements are consolidated.

Generally, the Company enters into contracts with customers that are short-term in nature where the performance obligations are fulfilled and payment is processed at the same time. Such examples include revenue related to merchant fees, interchange fees and investment services income. In addition, revenue generated from existing customer relationships such as deposit accounts are also considered short-term in nature, because the relationship may be terminated at any time and payment is processed at the time performance obligations are fulfilled. As a result, the Company does not have contract assets, contract liabilities or related receivable accounts for contracts with customers. In cases where collectability is a concern, the Company does not record revenue.

Generally, the pricing of transactions between the Company and each customer is either (i) established within a legally enforceable contract between the two parties, as is the case with the loan sales, or (ii) disclosed to the customer at a specific point in time, as is the case when a deposit account is opened or before a new loan is underwritten. Fees are usually fixed at a specific amount or as a percentage of a transaction amount. No judgment or estimates by management are required to record revenue related to these transactions and pricing is clearly identified within these contracts.

The Company primarily operates in one geographic region, Northern and Central New Jersey and contiguous areas. Therefore, all significant operating decisions are based upon analysis of the Company as one operating segment or unit.

We disaggregate our revenue from contracts with customers by contract-type and timing of revenue recognition, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Noninterest income not generated from customers during the Company’s ordinary activities primarily relates to mortgage servicing rights, gains/losses on the sale of investment securities, gains/losses on the sale of other real estate owned, gains/losses on the sale of property, plant and equipment, and income from bank owned life insurance.

The following table sets forth the components of noninterest income for the three months ended March 31, 2019 and 2018:

	For the Three Months Ended March 31,
(in thousands)	2019		2018
Deposit Related Fees and Charges
Debit card interchange income	$	1,218	$	1,118
Overdraft charges	996		1,109
ATM service charges	184		190
Demand deposit fees and charges	143		158
Savings service charges	32		36
Total	2,573		2,611
Commissions and Fees
Loan fees	348		322
Wire transfer charges	267		248
Investment services income	352		228
Merchant fees	184		216
Commissions from sales of checks	103		108
Safe deposit income	91		84
Other income	61		63
Total	1,406		1,269
Gains on Sale of Loans	371		246
Other Income
Gains on customer swap transactions	199		332
Title insurance income	90		49
Other income	61		97
Total	350		478
Revenue not from contracts with customers	1,023		730
Total Noninterest Income	5,723		5,334
Timing of Revenue Recognition
Products and services transferred at a point in time	4,681		4,585
Products and services transferred over time	19		19
Revenue not from contracts with customers	1,023		730
Total Noninterest Income	$	5,723	$	5,334

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Earnings Per Share

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Earnings Per Share

EARNINGS PER SHARE

The following schedule shows the Company’s earnings per share calculations for the periods presented:

	For the Three Months Ended March 31,
(in thousands, except per share data)	2019		2018
Net income available to common shareholders	$	15,626	$	15,255
Less: earnings allocated to participating securities	141		141
Net income allocated to common shareholders	$	15,485	$	15,114
Weighted average number of common shares outstanding - basic	50,275		47,503
Share-based plans	167		233
Weighted average number of common shares outstanding - diluted	50,442		47,736
Basic earnings per share	$	0.31	$	0.32
Diluted earnings per share	$	0.31	$	0.32

There were no antidilutive options to purchase common stock excluded from the computation for the three months ended March 31, 2019 and 2018.

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Investment Securities

3 Months Ended

Mar. 31, 2019

Investments, Debt and Equity Securities [Abstract]

Investment Securities

INVESTMENT SECURITIES

The amortized cost, gross unrealized gains and losses and the fair value of the Company's available for sale and held to maturity investment securities are as follows:

	March 31, 2019									December 31, 2018
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
AVAILABLE FOR SALE
U.S. Treasury and U.S. government agencies	$	141,088	$	94	$	(1,601	)	$	139,581	$	143,495	$	—	$	(2,568	)	$	140,927
Mortgage-backed securities, residential	442,358		1,473		(5,204		)	438,627		434,208		779		(8,843		)	426,144
Mortgage-backed securities, multifamily	30,956		135		(82		)	31,009		21,087		67		(204		)	20,950
Obligations of states and political subdivisions	44,850		362		(195		)	45,017		45,951		140		(586		)	45,505
Debt securities	5,000		4		—			5,004		5,000		92		—			5,092
	$	664,252	$	2,068	$	(7,082	)	$	659,238	$	649,741	$	1,078	$	(12,201	)	$	638,618

	March 31, 2019									December 31, 2018
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
HELD TO MATURITY
U.S. government agencies	$	32,461	$	—	$	(360	)	$	32,101	$	33,025	$	—	$	(677	)	$	32,348
Mortgage-backed securities, residential	82,070		246		(1,033		)	81,283		75,859		169		(1,838		)	74,190
Mortgage-backed securities, multifamily	1,827		—		(19		)	1,808		1,853		—		(35		)	1,818
Obligations of states and political subdivisions	36,450		274		(127		)	36,597		37,909		113		(328		)	37,694
Debt securities	6,500		—		(70		)	6,430		5,000		—		(118		)	4,882
	$	159,308	$	520	$	(1,609	)	$	158,219	$	153,646	$	282	$	(2,996	)	$	150,932

The following table lists contractual maturities of investment securities classified as available for sale and held to maturity as of March 31, 2019. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Available for Sale				Held to Maturity
(in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
March 31, 2019
Due in one year or less	$	24,755	$	24,636	$	5,924	$	5,929
Due after one year through five years	116,056		115,089		42,423		42,361
Due after five years through ten years	32,550		32,602		24,379		24,144
Due after ten years	17,577		17,275		2,685		2,694
	190,938		189,602		75,411		75,128
Mortgage-backed securities	473,314		469,636		83,897		83,091
Total securities	$	664,252	$	659,238	$	159,308	$	158,219

There were no sales of available for sale or held to maturity securities during the three months ended March 31, 2019 and 2018.

Securities with a carrying value of approximately $511.3 million and $476.3 million at March 31, 2019 and December 31, 2018, respectively, were pledged to secure public deposits and for other purposes required by applicable laws and regulations.

The following tables indicates the length of time individual securities have been in a continuous unrealized loss position for the periods presented:

	Less Than 12 Months				12 Months or Longer				Total
(dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses
March 31, 2019
AVAILABLE FOR SALE
U.S. Treasury and U.S. government agencies	$	12,112	$	78	$	116,126	$	1,523	25	$	128,238	$	1,601
Mortgage-backed securities, residential	719		1		289,307		5,203		126	290,026		5,204
Mortgage-backed securities, multifamily	4,979		9		12,993		73		4	17,972		82
Obligations of states and political subdivisions	—		—		16,088		195		30	16,088		195
	$	17,810	$	88	$	434,514	$	6,994	185	$	452,324	$	7,082
HELD TO MATURITY
U.S. government agencies	$	—	$	—	$	32,101	$	360	6	$	32,101	$	360
Mortgage-backed securities, residential	9,012		27		47,210		1,006		31	56,222		1,033
Mortgage-backed securities, multifamily	—		—		1,808		19		2	1,808		19
Obligations of states and political subdivisions	—		—		8,222		127		7	8,222		127
Debt securities	3,930		70		—		—		1	3,930		70
	$	12,942	$	97	$	89,341	$	1,512	47	$	102,283	$	1,609

	Less Than 12 Months				12 Months or Longer				Total
(dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses
December 31, 2018
AVAILABLE FOR SALE
U.S. Treasury and U.S. government agencies	$	20,588	$	216	$	120,338	$	2,352	27	$	140,926	$	2,568
Mortgage-backed securities, residential	10,119		58		316,851		8,785		139	326,970		8,843
Mortgage-backed securities, multifamily	1,977		2		12,911		202		4	14,888		204
Obligations of states and political subdivisions	1,289		2		26,522		584		50	27,811		586
	$	33,973	$	278	$	476,622	$	11,923	220	$	510,595	$	12,201
HELD TO MATURITY
U.S. government agencies	$	—	$	—	$	32,348	$	677	6	$	32,348	$	677
Mortgage-backed securities, residential	8,325		59		53,761		1,779		36	62,086		1,838
Mortgage-backed securities, multifamily	—		—		1,818		35		2	1,818		35
Obligations of states and political subdivisions	1,764		8		15,580		320		27	17,344		328
Debt securities	3,882		118		—		—		1	3,882		118
	$	13,971	$	185	$	103,507	$	2,811	72	$	117,478	$	2,996

Management has evaluated the securities in the above table and has concluded that none of the securities with unrealized losses has impairments that are other-than-temporary. Fair value below cost is solely due to interest rate movements and is deemed temporary.

Investment securities, including the mortgage-backed securities and corporate securities, are evaluated on a periodic basis to determine if factors are identified that would require further analysis. In evaluating the Company’s securities, management considers the following items:

• The Company’s ability and intent to hold the securities, including an evaluation of the need to sell the security to meet certain liquidity measures, or whether the Company has sufficient levels of cash to hold the identified security in order to recover the entire amortized cost of the security;

• The financial condition of the underlying issuer;

• The credit ratings of the underlying issuer and if any changes in the credit rating have occurred;

• The length of time the security’s fair value has been less than amortized cost; and

• Adverse conditions related to the security or its issuer if the issuer has failed to make scheduled payments or other factors.

If the above factors indicate that an additional analysis is required, management will perform a discounted cash flow analysis evaluating the security.

Equity securities at fair value

The Company has an equity securities portfolio which consists of investments in other financial institutions for market appreciation purposes and investments in Community Reinvestment funds. The market value of these investments was $15.2 million and $15.9 million at March 31, 2019 and December 31, 2018, respectively. Upon implementation of Accounting Standards Update 2016-01 - Financial Instruments ("ASU 2016-01"), the Company made a cumulative adjustment of $2.0 million from other comprehensive income to retained earnings as of January 1, 2018. In the first three months of 2019, the Company recorded proceeds from sales of equity securities of $1.1 million while recording no sales in the first three months of 2018. The Company also recorded $353,000 in market value gain on equity securities in noninterest income for the first quarter of 2019 and $18,000 in market value loss in the same period of 2018.

As of March 31, 2019, the equity investments in other financial institutions and Community Reinvestment funds had a market value of $1.9 million and $13.4 million, respectively. The Community Reinvestment funds include $3.5 million that are primarily invested in community development loans that are guaranteed by the Small Business Administration (“SBA”). Because the funds are primarily guaranteed by the federal government there are minimal changes in market value between accounting periods. These funds can be redeemed with 60 days notice at the net asset value less unpaid management fees with the approval of the fund manager. As of March 31, 2019, the net amortized cost equaled the market value of the investment. There are no unfunded commitments related to these investments.

The Community Reinvestment funds include $9.8 million that are primarily invested in government guaranteed loans, mortgage-backed securities, small business loans and other instruments supporting affordable housing and economic development. The Company may redeem these funds at the net asset value calculated at the end of the current business day less any unpaid management fees. There are no restrictions on redemptions for the holdings in these investments other than the notice required by the fund manager. There are no unfunded commitments related to these investments.

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Loans and Other Real Estate

3 Months Ended

Mar. 31, 2019

Receivables [Abstract]

Loans and Other Real Estate

LOANS AND OTHER REAL ESTATE

The following sets forth the composition of the Company’s loan portfolio:

(in thousands)	March 31, 2019			December 31, 2018
Commercial, secured by real estate	$	3,436,550		$	3,057,779
Commercial, industrial and other	389,230			336,735
Equipment finance	90,791			87,925
Real estate - residential mortgage	335,290			329,854
Real estate - construction	332,995			319,545
Home equity and consumer	339,815			328,609
Total loans	4,924,671			4,460,447
Less: deferred fees	(3,280		)	(3,714		)
Loans, net of deferred fees	$	4,921,391		$	4,456,733

At March 31, 2019 and December 31, 2018, home equity and consumer loans included overdraft deposit balances of $368,000 and $452,000, respectively. At March 31, 2019 and December 31, 2018, the Company had $1.32 billion and $1.16 billion, respectively, in loans pledged for actual and potential borrowings at the Federal Home Loan Bank of New York (“FHLB”).

Purchased Credit Impaired Loans

The carrying value of loans acquired in the Highlands merger and accounted for in accordance with ASC Subtopic 310-30, “Loans and Debt Securities Acquired with Deteriorated Credit Quality,” was $13.7 million which was substantially the same as the balance at acquisition on January 4, 2019. The carrying value of the purchased credit impaired ("PCI") loans acquired in the Pascack Community Bank ("Pascack") acquisition was $145,000 at March 31, 2019 compared to $157,000 at December 31, 2018. The carrying value of PCI loans acquired in the Harmony Bank ("Harmony") acquisition was $485,000 at March 31, 2019 compared to $495,000 at December 31, 2018.

The following table presents changes in the accretable yield for PCI loans:

	For the Three Months Ended
(in thousands)	March 31, 2019			March 31, 2018
Balance, beginning of period	$	81		$	129
Acquisitions	1,420			—
Accretion	(193		)	(44		)
Net reclassification non-accretable difference	30			28
Balance, end of period	$	1,338		$	113

Non-Performing Assets and Past Due Loans

The following schedule sets forth certain information regarding the Company’s non-performing assets and its accruing troubled debt restructurings, excluding PCI loans:

(in thousands)	March 31, 2019		December 31, 2018
Commercial, secured by real estate	$	9,817	$	7,192
Commercial, industrial and other	2,202		1,019
Equipment finance	383		501
Real estate - residential mortgage	1,740		1,986
Home equity and consumer	1,581		1,432
Total non-accrual loans	$	15,723	$	12,130
Other real estate and other repossessed assets	715		830
TOTAL NON-PERFORMING ASSETS	$	16,438	$	12,960
Troubled debt restructurings, still accruing	$	6,352	$	9,293

Non-accrual loans included $2.8 million and $3.6 million of troubled debt restructurings for the periods ended March 31, 2019 and December 31, 2018, respectively. At March 31, 2019 and December 31, 2018, the Company had $1.2 million and $1.5 million, respectively, in residential mortgages and consumer home equity loans that were in the process of foreclosure which are included in non-accrual loans in the above table.

An age analysis of past due loans, segregated by class of loans as of March 31, 2019 and December 31, 2018, is as follows:

(in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater Than 89 Days Past Due		Total Past Due		Current		Total Loans		Recorded Investment Greater than 89 Days and Still Accruing
March 31, 2019
Commercial, secured by real estate	$	14,944	$	3,060	$	3,913	$	21,917	$	3,414,633	$	3,436,550	$	—
Commercial, industrial and other	1,084		220		377		1,681		387,549		389,230		—
Equipment finance	358		210		383		951		89,840		90,791		—
Real estate - residential mortgage	2,406		—		1,146		3,552		331,738		335,290		—
Real estate - construction	—		—		3,423		3,423		329,572		332,995		—
Home equity and consumer	1,845		365		1,297		3,507		336,308		339,815		78
	$	20,637	$	3,855	$	10,539	$	35,031	$	4,889,640	$	4,924,671	$	78
December 31, 2018
Commercial, secured by real estate	$	1,477	$	639	$	2,237	$	4,353	$	3,053,426	$	3,057,779	$	—
Commercial, industrial and other	173		243		750		1,166		335,569		336,735		—
Equipment finance	533		13		501		1,047		86,878		87,925		—
Real estate - residential mortgage	743		111		1,776		2,630		327,224		329,854		—
Real estate - construction	—		—		—		—		319,545		319,545		—
Home equity and consumer	1,917		216		850		2,983		325,626		328,609		—
	$	4,843	$	1,222	$	6,114	$	12,179	$	4,448,268	$	4,460,447	$	—

Impaired Loans

The Company defines impaired loans as all non-accrual loans with recorded investments of $500,000 or greater. Impaired loans also include all loans that have been modified in troubled debt restructurings, but excludes PCI loans. Impaired loans as of March 31, 2019 and December 31, 2018 are as follows:

(in thousands)	Recorded Investment in Impaired Loans		Contractual Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized
March 31, 2019
Loans without specific allowance:
Commercial, secured by real estate	$	12,188	$	12,883	$	—	$	8,878	$	52
Commercial, industrial and other	2,309		2,633		—		1,142		4
Equipment finance	301		597		—		301		—
Real estate - residential mortgage	—		—		—		—		—
Real estate - construction	—		—		—		—		—
Home equity and consumer	—		—		—		—		—
Loans with specific allowance:
Commercial, secured by real estate	3,797		4,070		229		6,642		72
Commercial, industrial and other	200		199		8		199		3
Equipment finance	26		26		12		26		—
Real estate - residential mortgage	715		875		4		718		5
Real estate - construction	—		—		—		—		—
Home equity and consumer	700		741		6		697		8
Total:
Commercial, secured by real estate	$	15,985	$	16,953	$	229	$	15,520	$	124
Commercial, industrial and other	2,509		2,832		8		1,341		7
Equipment finance	327		623		12		327		—
Real estate - residential mortgage	715		875		4		718		5
Real estate - construction	—		—		—		—		—
Home equity and consumer	700		741		6		697		8
	$	20,236	$	22,024	$	259	$	18,603	$	144

(in thousands)	Recorded Investment in Impaired Loans		Contractual Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized
December 31, 2018
Loans without specific allowance:
Commercial, secured by real estate	$	9,284	$	9,829	—		$	7,369	$	188
Commercial, industrial and other	1,151		1,449		—		1,834		19
Equipment finance	301		597		—		376		—
Real estate - residential mortgage	—		—		—		242		4
Real estate - construction	—		—		—		726		—
Home equity and consumer	—		—		—		—		—
Loans with specific allowance:
Commercial, secured by real estate	7,270		7,597		307		7,594		317
Commercial, industrial and other	209		209		7		209		12
Equipment finance	30		30		14		19		—
Real estate - residential mortgage	730		884		4		745		20
Real estate - construction	—		—		—		—		—
Home equity and consumer	727		765		6		898		32
Total:
Commercial, secured by real estate	$	16,554	$	17,426	$	307	$	14,963	$	505
Commercial, industrial and other	1,360		1,658		7		2,043		31
Equipment finance	331		627		14		395		—
Real estate - residential mortgage	730		884		4		987		24
Real estate - construction	—		—		—		726		—
Home equity and consumer	727		765		6		898		32
	$	19,702	$	21,360	$	338	$	20,012	$	592

Interest income recognized on impaired loans was $144,000 and $177,000 for the three months ended March 31, 2019 and 2018, respectively. Interest that would have been accrued on impaired loans during the first three months of 2019 and 2018 had the loans been performing under original terms would have been $268,000 and $307,000, respectively.

Credit Quality Indicators

The class of loans is determined by internal risk rating. Management closely and continually monitors the quality of its loans and assesses the quantitative and qualitative risks arising from the credit quality of its loans. Lakeland assigns a credit risk rating to all commercial loans and loan commitments. The credit risk rating system has been developed by management to provide a methodology to be used by loan officers, department heads and senior management in identifying various levels of credit risk that exist within Lakeland’s commercial loan portfolios. The risk rating system assists senior management in evaluating Lakeland’s commercial loan portfolio, analyzing trends, and determining the proper level of required reserves to be recommended to the Board. In assigning risk ratings, management considers, among other things, a borrower’s debt service coverage, earnings strength, loan to value ratios, guarantor support, industry conditions and economic conditions. Management categorizes commercial loans and commitments into a one (1) to nine (9) numerical structure with rating 1 being the strongest rating and rating 9 being the weakest. Ratings 1 through 5W are considered ‘Pass’ ratings.

The following table shows the Company’s commercial loan portfolio as of March 31, 2019 and December 31, 2018, by the risk ratings discussed above (in thousands):

March 31, 2019	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Real Estate - Construction
RISK RATING
1	$	—	$	2,450	$	—
2	—		18,444		—
3	68,756		36,739		—
4	933,390		88,551		18,204
5	2,247,650		205,999		302,190
5W - Watch	89,295		19,381		5,873
6 - Other assets especially mentioned	46,466		3,988		2,267
7 - Substandard	50,993		13,678		4,461
8 - Doubtful	—		—		—
9 - Loss	—		—		—
Total	$	3,436,550	$	389,230	$	332,995

December 31, 2018	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Real Estate - Construction
RISK RATING
1	$	—	$	1,119	$	—
2	—		18,462		—
3	69,995		36,367		—
4	933,577		91,145		17,375
5	1,910,423		168,474		297,625
5W - Watch	61,626		7,798		3,493
6 - Other assets especially mentioned	38,844		2,033		—
7 - Substandard	43,314		11,337		1,052
8 - Doubtful	—		—		—
9 - Loss	—		—		—
Total	$	3,057,779	$	336,735	$	319,545

The risk rating tables above do not include residential mortgage loans, consumer loans, or equipment finance because they are evaluated on their payment status.

Allowance for Loan Losses

The following table details activity in the allowance for loan losses by portfolio segment for the three months ended March 31, 2019 and 2018:

(in thousands)	Commercial, Secured by Real Estate			Commercial, Industrial and Other			Equipment Finance			Real Estate- Residential Mortgage			Real Estate- Construction			Home Equity and Consumer			Total
Three Months Ended March 31, 2019
Beginning Balance	$	27,881		$	1,742		$	987		$	1,566		$	3,015		$	2,497		$	37,688
Charge-offs	(187		)	(147		)	(87		)	(50		)	—			(45		)	(516		)
Recoveries	115			97			2			9			5			71			299
Provision	(294		)	900			45			39			(133		)	(49		)	508
Ending Balance	$	27,515		$	2,592		$	947		$	1,564		$	2,887		$	2,474		$	37,979

(in thousands)	Commercial, Secured by Real Estate			Commercial, Industrial and Other			Equipment Finance			Real Estate- Residential Mortgage			Real Estate- Construction		Home Equity and Consumer			Total
Three Months Ended March 31, 2018
Beginning Balance	$	25,704		$	2,313		$	630		$	1,557		$	2,731	$	2,520		$	35,455
Charge-offs	(22		)	(1,012		)	(23		)	(93		)	—		(100		)	(1,250		)
Recoveries	31			20			2			2			5		95			155
Provision	104			447			433			123			196		(19		)	1,284
Ending Balance	$	25,817		$	1,768		$	1,042		$	1,589		$	2,932	$	2,496		$	35,644

Loans receivable summarized by portfolio segment and impairment method are as follows:

(in thousands)	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Equipment Finance		Real Estate- Residential Mortgage		Real Estate- Construction		Home Equity and Consumer		Total
March 31, 2019
Ending Balance: Individually evaluated for impairment	$	15,985	$	2,509	$	327	$	715	$	—	$	700	$	20,236
Ending Balance: Collectively evaluated for impairment	3,413,062		384,213		90,464		334,177		329,566		338,573		4,890,055
Ending Balance: Loans acquired with deteriorated credit quality	7,503		2,508		—		398		3,429		542		14,380
Ending Balance (1)	$	3,436,550	$	389,230	$	90,791	$	335,290	$	332,995	$	339,815	$	4,924,671

(in thousands)	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Equipment Finance		Real Estate- Residential Mortgage		Real Estate- Construction		Home Equity and Consumer		Total
December 31, 2018
Ending Balance: Individually evaluated for impairment	$	16,554	$	1,360	$	331	$	730	$	—	$	727	$	19,702
Ending Balance: Collectively evaluated for impairment	3,040,573		335,375		87,594		329,124		319,545		327,882		4,440,093
Ending balance: Loans acquired with deteriorated credit quality	652		—		—		—		—		—		652
Ending Balance (1)	$	3,057,779	$	336,735	$	87,925	$	329,854	$	319,545	$	328,609	$	4,460,447

(1) Excludes deferred fees

The allowance for loan losses is summarized by portfolio segment and impairment classification as follows:

(in thousands)	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Equipment Finance		Real Estate- Residential Mortgage		Real Estate- Construction		Home Equity and Consumer		Total
March 31, 2019
Ending Balance: Individually evaluated for impairment	$	229	$	8	$	12	$	4	$	—	$	6	$	259
Ending Balance: Collectively evaluated for impairment	27,286		2,584		935		1,560		2,887		2,468		37,720
Ending Balance	$	27,515	$	2,592	$	947	$	1,564	$	2,887	$	2,474	$	37,979

(in thousands)	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Equipment Finance		Real Estate- Residential Mortgage		Real Estate- Construction		Home Equity and Consumer		Total
December 31, 2018
Ending Balance: Individually evaluated for impairment	$	307	$	7	$	14	$	4	$	—	$	6	$	338
Ending Balance: Collectively evaluated for impairment	27,574		1,735		973		1,562		3,015		2,491		37,350
Ending Balance	$	27,881	$	1,742	$	987	$	1,566	$	3,015	$	2,497	$	37,688

Lakeland also maintains a reserve for unfunded lending commitments which is included in other liabilities. This reserve was $2.3 million as of March 31, 2019 and December 31, 2018. The Company analyzes the adequacy of the reserve for unfunded lending commitments quarterly.

Troubled Debt Restructurings

Loans are classified as troubled debt restructured loans in cases where borrowers experience financial difficulties and Lakeland makes certain concessionary modifications to contractual terms. Restructured loans typically involve a modification of terms such as a reduction of the stated interest rate, a moratorium of principal payments and/or an extension of the maturity date at a stated interest rate lower than the current market rate of a new loan with similar risk. The Company considers the potential losses on these loans as well as the remainder of its impaired loans while considering the adequacy of the allowance for loan losses.

The following table summarizes loans that have been restructured during the three months ended March 31, 2019 and 2018:

	For the Three Months Ended March 31, 2019					For the Three Months Ended March 31, 2018
(dollars in thousands)	Number of Contracts	Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Contracts	Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial, secured by real estate	—	$	—	$	—	2	$	1,657	$	1,657
	—	$	—	$	—	2	$	1,657	$	1,657

There were no loans as of March 31, 2019 and 2018 that were restructured within the previous twelve months that have subsequently defaulted.

Other Real Estate and Other Repossessed Assets

At March 31, 2019 and December 31, 2018, the Company had other real estate owned of $715,000 and $830,000, respectively. Included in other real estate owned was residential property acquired as a result of foreclosure proceedings totaling $624,000 and $702,000 at March 31, 2019 and December 31, 2018, respectively. There were no balances of other repossessed assets at both March 31, 2019 and December 31, 2018.

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Leases

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Leases

LEASES

The Company leases certain premises and equipment under operating leases. Portions of certain properties are subleased for terms extending through 2024. At March 31, 2019, the Company had lease liabilities totaling $20.8 million and right-of-use assets totaling $19.2 million related to these leases. The calculated amount of the right-of-use asset and lease liabilities are impacted by the length of the lease term and the discount rate used to calculate the present value of the minimum lease payments. The Company's lease agreements often include one or more options to renew at the Company's discretion. If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the right-of-use asset and lease liability. The Company uses its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term. For leases existing prior to January 1, 2019, the rate for the remaining lease term as of January 1, 2019 was used.

For the three months ended March 31, 2019, the weighted average remaining lease term for operating leases was 10.86 years and the weighted average discount rate used in the measurement of operating lease liabilities was 3.49%.

As the Company elected not to separate lease and non-lease components and instead to account for them as a single lease component, the variable lease cost primarily represents variable payments such as common area maintenance and utilities. Lease costs were as follows:

(in thousands)	Three Months Ended March 31, 2019
Operating lease cost	$	820
Variable lease cost	35
Sublease income	(31		)
Net lease cost	$	824

Rent expense for the three months ended March 31, 2018, prior to the adoption of ASU 2016-02, was $758,000.

Other information (in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	660
Right-of-use asset obtained in exchange for new operating lease liabilities	$	765

There were no sale and leaseback transactions, leveraged leases or lease transactions with related parties during the three months ended March 31, 2019. At March 31, 2019, the Company had no leases that had not yet commenced.

A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total operating lease liability at March 31, 2019 is as follows:

(in thousands)
Within one year	$	3,273
After one year but within two years	3,036
After two year but within three years	2,786
After three year but within four years	2,283
After four year but within five years	2,058
After 5 years	12,061
Total undiscounted cash flows	25,497
Discount on cash flows	(4,674		)
Total lease liability	$	20,823

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Derivatives

3 Months Ended

Mar. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

DERIVATIVES

Lakeland is a party to interest rate derivatives that are not designated as hedging instruments. Under a program, Lakeland executes interest rate swaps with commercial lending customers to facilitate their respective risk management strategies. These interest rate swaps with customers are simultaneously offset by interest rate swaps that Lakeland executes with a third party, such that Lakeland minimizes its net risk exposure resulting from such transactions. Because the interest rate swaps associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings. The changes in the fair value of the swaps offset each other, except for the credit risk of the counterparties, which is determined by taking into consideration the risk rating, probability of default and loss given default for all counterparties. Lakeland had $11.2 million and $498,000, respectively, in available for sale securities pledged for collateral on its interest rate swaps with the financial institution for March 31, 2019 and December 31, 2018.

In June 2016, the Company entered into two cash flow hedges in order to hedge the variable cash outflows associated with its subordinated debentures. The notional value of these hedges was $30.0 million. The Company’s objectives in using the cash flow hedge are to add stability to interest expense and to manage its exposure to interest rate movements. The Company used interest rate swaps designated as cash flow hedges which involved the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. In these particular hedges the Company is paying a third party an average of 1.10% in exchange for a payment at 3 month LIBOR. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive income and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the three months ended March 31, 2019, the Company did not record any hedge ineffectiveness. The Company recognized $124,000 and $43,000 of accumulated other comprehensive income (loss) that was reclassified into interest expense for the first three months of 2019 and 2018, respectively.

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s debt. During the next twelve months, the Company estimates that $448,000 will be reclassified as a decrease to interest expense should the rate environment remain the same.

The following table presents summary information regarding these derivatives for the periods presented (dollars in thousands):

March 31, 2019	Notional Amount		Average Maturity (Years)	Weighted Average Fixed Rate		Weighted Average Variable Rate	Fair  Value
Classified in Other Assets:
3rd Party interest rate swaps	$	88,842	7.5	3.80	%	1 Mo. LIBOR + 2.13%	$	2,939
Customer interest rate swaps	253,922		10.8	4.83	%	1 Mo. LIBOR + 2.04%	11,411
Interest rate swap (cash flow hedge)	30,000		2.3	1.10	%	3 Mo. LIBOR	828
Classified in Other Liabilities:
Customer interest rate swaps	$	88,842	7.5	3.80	%	1 Mo. LIBOR + 2.13%	$	(2,939	)
3rd Party interest rate swaps	253,922		10.8	4.83	%	1 Mo. LIBOR + 2.04%	(11,411		)

December 31, 2018	Notional  Amount		Average Maturity (Years)	Weighted  Average Fixed Rate		Weighted Average Variable Rate	Fair  Value
Classified in Other Assets:
3rd Party interest rate swaps	$	153,909	8.3	4.10	%	1 Mo. LIBOR + 2.13%	$	5,329
Customer interest rate swaps	164,427		12.0	5.04	%	1 Mo. LIBOR + 2.05%	5,707
Interest rate swap (cash flow hedge)	30,000		2.5	1.10	%	3 Mo. LIBOR	1,099
Classified in Other Liabilities:
Customer interest rate swaps	$	153,909	8.3	4.10	%	1 Mo. LIBOR + 2.13%	$	(5,329	)
3rd party interest rate swaps	164,427		12.0	5.04	%	1 Mo. LIBOR + 2.05%	(5,707		)

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Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

GOODWILL AND INTANGIBLE ASSETS

The Company had goodwill of $154.2 million and $136.4 million at March 31, 2019 and December 31, 2018, respectively. The Company recorded $17.7 million in goodwill from the Highlands merger in January 2019. The Company reviews its goodwill and intangible assets annually, on November 30, or more frequently if conditions warrant, for impairment. In testing goodwill for impairment, the Company compares the estimated fair value of its reporting unit to its carrying amount, including goodwill. The Company has determined that it has one reporting unit, Community Banking.

The Company had core deposit intangibles of $5.2 million and $1.8 million at March 31, 2019 and December 31, 2018, respectively. The Company recorded core deposit intangible of $3.7 million for the Highlands acquisition. The estimated future amortization expense for the remainder of 2019 and for each of the succeeding five years ended December 31 is as follows (in thousands):

For the Year Ended
2019	$	878
2020	1,025
2021	868
2022	711
2023	554
2024	425

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Borrowings

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Borrowings

BORROWINGS

At March 31, 2019, the Company had federal funds purchased and securities sold under agreements to repurchase of $220.0 million and $41.3 million, respectively, compared to federal funds purchased and securities sold under agreements to repurchase of $192.1 million and $41.8 million, respectively, at December 31, 2018. The securities sold under agreements to repurchase are overnight sweep arrangement accounts with our customers. As of March 31, 2019, the Company had $56.2 million in mortgage backed securities pledged for its securities sold under agreements to repurchase.

At times the market values of securities collateralizing our securities sold under agreements to repurchase may decline due to changes in interest rates and may necessitate our lenders to issue a “margin call” which requires Lakeland to pledge additional collateral to meet that margin call.

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Share-Based Compensation

3 Months Ended

Mar. 31, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation

SHARE-BASED COMPENSATION

The Company grants restricted stock, restricted stock units (“RSUs”) and stock options under the 2018 Omnibus Equity Incentive Plan and previously granted such awards under the 2009 Equity Compensation Program. The Company recognized share based compensation expense on its restricted stock of $55,000 and $56,000 for the three months ended March 31, 2019 and 2018, respectively. As of March 31, 2019, there was unrecognized compensation cost of $156,000 related to unvested restricted stock that is expected to be recognized over a weighted average period of approximately 0.80 years. The Company recognized share based compensation expense of $640,000 and $938,000 on RSUs for the three months ended March 31, 2019 and 2018, respectively. Unrecognized compensation expense related to RSUs was approximately $3.9 million as of March 31, 2019, and that cost is expected to be recognized over a period of 1.78 years. There was no unrecognized compensation expense related to unvested stock options as of March 31, 2019.

In the first three months of 2019, the Company granted 13,052 shares of restricted stock to non-employee directors at a grant date fair value of $15.96 per share under the 2018 Omnibus Equity Incentive Program. The restricted stock vests one year from the date it was granted. Compensation expense on this restricted stock is expected to be $208,000 over a one year period. In the first three months of 2018, the Company granted 10,945 shares of restricted stock to non-employee directors at a grant date fair value of $20.55 per share under the 2009 Equity Compensation Program. The restricted stock vested one year from the date it was granted. Compensation expense on this restricted stock was $225,000 over a one year period.

The following is a summary of the Company’s restricted stock activity during the three months ended March 31, 2019:

	Number of Shares		Weighted Average Price
Outstanding, January 1, 2019	11,701		$	20.18
Granted	13,052		15.96
Vested	(11,643	)	20.24
Forfeited	—		—
Outstanding, March 31, 2019	13,110		$	15.93

In the first three months of 2019, the Company granted 127,559 RSUs under the 2018 Omnibus Equity Incentive Plan at a weighted average grant date fair value of $16.66 per share. These units vest within a range of two to three years. A portion of these RSUs will vest subject to certain performance conditions in the restricted stock unit agreement. There are also certain provisions in the compensation program which state that if a recipient of the RSUs reaches a certain age and years of service, the person has effectively earned a portion of the RSUs at that time. Compensation expense on the restricted stock units issued in the first three months of 2019 is expected to average approximately $708,000 per year over a three year period. In the first three months of 2018, the Company granted 146,233 RSUs at a weighted average grant date fair value of $19.11 per share under the Company’s 2009 Equity Compensation Program. Compensation expense on these restricted stock units is expected to average approximately $932,000 per year over a three year period.

The following is a summary of the Company’s RSU activity during the three months ended March 31, 2019:

	Number of Shares		Weighted Average Price
Outstanding, January 1, 2019	299,347		$	16.60
Granted	127,559		16.66
Vested	(83,396	)	12.53
Forfeited	(2,717	)	17.38
Outstanding, March 31, 2019	340,793		$	17.61

There were no grants of stock options in the first three months of 2019 or 2018. Option activity under the Company’s stock option plans is as follows:

	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding, January 1, 2019	67,488	$	8.28	2.86	$	440,483
Granted	—	—
Exercised	—	—
Forfeited	—	—
Expired	—	—
Outstanding, March 31, 2019	67,488	$	8.28	2.61	$	448,581
Options exercisable at March 31, 2019	67,488	$	8.28	2.61	$	448,581

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, multiplied by the number of in-the-money options).

There were no stock options exercised during the first three months of 2019 and 26,250 stock options exercised during the first three months of 2018. The aggregate intrinsic value of stock options exercised during the three months ended March 31, 2019 and 2018 was $0 and $297,000, respectively. Exercise of stock options during the first three months of 2019 and 2018, resulted in cash receipts of $0 and $248,000, respectively.

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Comprehensive Income

3 Months Ended

Mar. 31, 2019

Equity [Abstract]

Comprehensive Income

COMPREHENSIVE INCOME

The components of other comprehensive income (loss) are as follows:

	For the Three Months Ended
	March 31, 2019									March 31, 2018
(in thousands)	Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount			Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount
Net unrealized gains (losses) on available for sale securities:
Net unrealized holding (losses) gains arising during period	$	6,109		$	(1,746	)	$	4,363		$	(7,502	)	$	1,770		$	(5,732	)
Reclassification adjustment for net gains arising during the period	—			—			—			—			—			—
Net unrealized losses (gains)	6,109			(1,746		)	4,363			(7,502		)	1,770			(5,732		)
Unrealized gains (losses) on derivatives	(271		)	57			(214		)	358			(75		)	283
Other comprehensive (loss) income, net	$	5,838		$	(1,689	)	$	4,149		$	(7,144	)	$	1,695		$	(5,449	)

The following table shows the changes in the balances of each of the components of other comprehensive income for the periods presented, net of tax:

	For the Three Months Ended March 31, 2019							For the Three Months Ended March 31, 2018
(in thousands)	Unrealized Losses on Available for  Sale Securities		Unrealized Gains on Derivatives		Pension Items	Total		Unrealized Gains (Losses) on Available for  Sale Securities			Unrealized Gains  on Derivatives		Pension Items		Total
Beginning balance	(8,782	)	903		41	(7,838	)	$	(3,232	)	$	862	$	21	$	(2,349	)
Adjustment for implementation of ASU 2016-01	—		—		—	—		(2,043		)	—		—		(2,043		)
Adjusted beginning balance	(8,782	)	903		41	(7,838	)	(5,275		)	862		21		(4,392		)
Net current period other comprehensive (loss) income	4,363		(214	)	—	4,149		(5,732		)	283		—		(5,449		)
Ending balance	(4,419	)	689		41	(3,689	)	$	(11,007	)	$	1,145	$	21	$	(9,841	)

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Estimated Fair Value of Financial Instruments and Fair Value Measurement

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Estimated Fair Value of Financial Instruments and Fair Value Measurement

ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENT

Fair Value Measurement

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for an asset or liability in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels giving the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest level priority to unobservable inputs (level 3 measurements). The following describes the three levels of fair value hierarchy:

Level 1 – unadjusted quoted prices in active markets for identical assets or liabilities; includes U.S. Treasury Notes, and other U.S. Government Agency securities that actively trade in over-the-counter markets; equity securities and mutual funds that actively trade in over-the-counter markets.

Level 2 – quoted prices for similar assets or liabilities in active markets; or quoted prices for identical or similar assets or liabilities in markets that are not active; or inputs other than quoted prices that are observable for the asset or liability including yield curves, volatilities, and prepayment speeds.

Level 3 – unobservable inputs for the asset or liability that reflect the Company’s own assumptions about assumptions that market participants would use in the pricing of the asset or liability and that are consequently not based on market activity but upon particular valuation techniques.

The Company’s assets that are measured at fair value on a recurring basis are its available for sale investment securities and its interest rate swaps. The Company obtains fair values on its securities using information from a third-party servicer. If quoted prices for securities are available in an active market, those securities are classified as Level 1 securities. The Company has U.S. Treasury Notes and certain equity securities that are classified as Level 1 securities. Level 2 securities were primarily comprised of U.S. Agency bonds, residential mortgage-backed securities, obligations of state and political subdivisions and corporate securities. Fair values were estimated primarily by obtaining quoted prices for similar assets in active markets or through the use of pricing models supported with market data information. Standard inputs include benchmark yields, reported trades, broker-dealer quotes, issuer spreads, bids and offers. On a quarterly basis, the Company reviews the pricing information received from the Company’s third-party pricing service. This review includes a comparison to non-binding third-party quotes.

The fair values of derivatives are based on valuation models from a third party using current market terms (including interest rates and fees), the remaining terms of the agreements and the credit worthiness of the counter party as of the measurement date (Level 2).

The following table sets forth the Company’s financial assets that were accounted for at fair value on a recurring basis as of the periods presented by level within the fair value hierarchy. During the three months ended March 31, 2019, the Company did not make any transfers between any levels within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:

(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
March 31, 2019
Assets:
Investment securities, available for sale
U.S. Treasury and government agencies	$	16,293	$	123,288	$	—	$	139,581
Mortgage-backed securities	—		469,636		—		469,636
Obligations of states and political subdivisions	—		45,017		—		45,017
Other debt securities	—		5,004		—		5,004
Total securities available for sale	16,293		642,945		—		659,238
Equity securities, at fair value	1,864		13,368		—		15,232
Derivative assets	—		15,178		—		15,178
Total Assets	$	18,157	$	671,491	$	—	$	689,648
Liabilities:
Derivative liabilities	$	—	$	14,350	$	—	$	14,350
Total Liabilities	$	—	$	14,350	$	—	$	14,350
December 31, 2018
Assets:
Investment securities, available for sale
U.S. Treasury and government agencies	$	4,920	$	136,007	$	—	$	140,927
Mortgage-backed securities	—		447,094		—		447,094
Obligations of states and political subdivisions	—		45,505		—		45,505
Corporate debt securities	—		5,092		—		5,092
Total securities available for sale	4,920		633,698		—		638,618
Equity securities, at fair value	2,731		13,190		—		15,921
Derivative assets	—		12,135		—		12,135
Total Assets	$	7,651	$	659,023	$	—	$	666,674
Liabilities:
Derivative liabilities	$	—	$	11,036	$	—	$	11,036
Total Liabilities	$	—	$	11,036	$	—	$	11,036

The following table sets forth the Company’s assets subject to fair value adjustments (impairment) on a non-recurring basis. Assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:

(in thousands)	(Level 1)		(Level 2)		(Level 3)		Total Fair Value
March 31, 2019
Assets:
Impaired loans	$	—	$	—	$	20,236	$	20,236
Loans held for sale	—		600		—		600
Other real estate owned and other repossessed assets	—		—		715		715
December 31, 2018
Assets:
Impaired loans	$	—	$	—	$	19,702	$	19,702
Loans held for sale	—		1,113		—		1,113
Other real estate owned and other repossessed assets	—		—		830		830

Impaired loans are evaluated and valued at the time the loan is identified as impaired at the lower of cost or market value. Because most of Lakeland’s impaired loans are collateral dependent, fair value is generally measured based on the value of the collateral, less estimated costs to sell, securing these loans and is classified at a level 3 in the fair value hierarchy. Collateral may be real estate, accounts receivable, inventory, equipment and/or other business assets. The value of real estate is assessed based on appraisals by qualified third-party licensed appraisers. The appraisers may use the income approach to value the collateral using discount rates (with ranges of 5-11%) or capitalization rates (with ranges of 4-9%) to evaluate the property. The value of the equipment may be determined by an appraiser, if significant, inquiry through a recognized valuation resource, or by the value on the borrower’s financial statements. Field examiner reviews on business assets may be conducted based on the loan exposure and reliance on this type of collateral. Appraised and reported values may be adjusted based on management’s historical knowledge, changes in market conditions from the time of valuation, and/or management’s expertise and knowledge of the client and client’s business. Impaired loans are reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly, based on the same factors identified above.

The Company has a held for sale loan portfolio that consists of residential mortgages that are being sold in the secondary market. The Company records these mortgages at the lower of cost or market value. Fair value is generally determined by the value of purchase commitments.

Other real estate owned (“OREO”) and other repossessed assets, representing property acquired through foreclosure or deed in lieu of foreclosure, are carried at fair value less estimated disposal costs of the acquired property. Fair value on other real estate owned is based on the appraised value of the collateral using discount rates or capitalization rates similar to those used in impaired loan valuation. The fair value of other repossessed assets is estimated by inquiry through recognized valuation resources.

Changes in the assumptions or methodologies used to estimate fair values may materially affect the estimated amounts. Changes in economic conditions, locally or nationally, could impact the value of the estimated amounts of impaired loans, OREO and other repossessed assets.

Fair Value of Certain Financial Instruments

Estimated fair values have been determined by the Company using the best available data and an estimation methodology suitable for each category of financial instruments. Management is concerned that there may not be reasonable comparability between institutions due to the wide range of permitted assumptions and methodologies in the absence of active markets. This lack of uniformity gives rise to a high degree of subjectivity in estimating financial instrument fair values.

The estimation methodologies used, the estimated fair values and recorded book balances at March 31, 2019, and December 31, 2018, are outlined below.

This summary, as well as the table below, excludes financial assets and liabilities for which carrying value approximates fair value. For financial assets, these include cash and cash equivalents. For financial liabilities, these include noninterest-bearing demand deposits, savings and interest-bearing transaction accounts and federal funds purchased and securities sold under agreements to repurchase. The estimated fair value of demand, savings and interest-bearing transaction accounts is the amount payable on demand at the reporting date. Carrying value is used because there is no stated maturity on these accounts, and the customer has the ability to withdraw the funds immediately. Also excluded from this summary and the following table are those financial instruments recorded at fair value on a recurring basis, as previously described.

The fair value of investment securities held to maturity was measured using information from the same third-party servicer used for investment securities available for sale using the same methodologies discussed above. Investment securities held to maturity includes $5.0 million in short-term municipal bond anticipation notes and $2.5 million in subordinated debt that are non-rated and do not have an active secondary market or information readily available on standard financial systems. As a result, the securities are classified as Level 3 securities. Management performs a credit analysis before investing in these securities.

FHLB stock is an equity interest that can be sold to the issuing FHLB, to other Federal Home Loan Banks, or to other member banks at its par value. Because ownership of these securities is restricted, they do not have a readily determinable fair value. As such, the Company’s FHLB stock is recorded at cost or par value and is evaluated for impairment each reporting period by considering the ultimate recoverability of the investment rather than temporary declines in value. The Company’s evaluation primarily includes an evaluation of liquidity, capitalization, operating performance, commitments, and regulatory or legislative events.

The net loan portfolio has been valued using an exit price approach, which incorporates a buildup discount rate calculation that uses a swap rate adjusted for credit risk, servicing costs, a liquidity premium and a prepayment premium.

For fixed maturity certificates of deposit, fair value is estimated based on the present value of discounted cash flows using the rates currently offered for deposits of similar remaining maturities. The carrying amount of accrued interest payable approximates its fair value.

The fair value of long-term debt is based upon the discounted value of contractual cash flows. The Company estimates the discount rate using the rates currently offered for similar borrowing arrangements. The fair value of subordinated debentures is based on bid/ask prices from brokers for similar types of instruments.

The fair values of commitments to extend credit and standby letters of credit are estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair value of guarantees and letters of credit is based on fees currently charged for similar agreements or on the estimated cost to terminate them or otherwise settle the obligations with the counterparties at the reporting date. The fair value of commitments to extend credit and standby letters of credit are deemed immaterial.

The following table presents the carrying values, fair values and placement in the fair value hierarchy of the Company’s financial instruments as of March 31, 2019 and December 31, 2018:

(in thousands)	Carrying Value		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
March 31, 2019
Financial Assets:
Investment securities held to maturity	$	159,308	$	158,219	$	—	$	150,700	$	7,519
Federal Home Loan Bank and other membership bank stocks	16,951		16,951		—		16,951		—
Loans, net	4,883,412		4,899,288		—		—		4,899,288
Financial Liabilities:
Certificates of deposit	946,372		942,283		—		942,283		—
Other borrowings	175,783		174,569		—		174,569		—
Subordinated debentures	118,193		115,462		—		—		115,462
December 31, 2018
Financial Assets:
Investment securities held to maturity	$	153,646	$	150,932	$	—	$	143,913	$	7,019
Federal Home Loan Bank and other membership bank stocks	13,301		13,301		—		13,301		—
Loans, net	4,419,045		4,341,477		—		—		4,341,477
Financial Liabilities:
Certificates of deposit	757,038		750,801		—		750,801		—
Other borrowings	181,118		176,921		—		176,921		—
Subordinated debentures	105,027		102,497		—		—		102,497

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Recent Accounting Pronouncements

3 Months Ended

Mar. 31, 2019

Accounting Changes and Error Corrections [Abstract]

Recent Accounting Pronouncements

RECENT ACCOUNTING PRONOUNCEMENTS

In August 2018, the Financial Accounting Standards Board ("FASB") issued an update to improve the effectiveness of fair value measurement disclosures. Among other provisions, the update removes requirements to disclose amounts and reasons of transfers between Level 1 and Level 2 in the fair value hierarchy, and it modifies the disclosures regarding transfers in and out of Level 3 of the fair value hierarchy. The update requires a discussion regarding the change in unrealized gains and losses included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period, and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements.This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2019. Because the Company does not typically have Level 3 fair value measurements, the update is not expected to have a material impact on the Company's financial statements.

In August 2018, the FASB issued an update which aligns the requirements for capitalizing implementation costs in a cloud-computing arrangement service contract with the requirements for capitalizing implementation costs incurred for an internal-use software license. Implementation costs incurred by customers in a cloud computing arrangement are to be deferred and recognized over the term of the arrangement, if those costs would be capitalized by the customer in a software licensing arrangement under the internal-use software guidance.This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2019. The Company is currently assessing the impact that the guidance will have on its financial statements.

In August 2018, the FASB issued an update which changes the disclosure of accounting and reporting requirements related to single-employer defined benefit pension or other postretirement benefit plans. The amendments in the update remove disclosures that are no longer considered cost-beneficial, clarify the specific requirements of disclosures and add disclosure requirements identified as relevant. For calendar-year public companies, the changes will be effective for annual periods, including interim periods within those annual periods, in 2020. Because the Company has minimal pension plans that require calculation of projected benefit obligations or accumulated benefit obligations, the update will not have a material impact on the Company's financial statements.

In June 2018, the FASB issued an update expanding earlier guidance on stock compensation to include share-based payments issued to nonemployees for goods and services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially the same.This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2018. Earlier adoption was permitted. The adoption of this update did not have a significant impact on the Company's financial statements.

In August 2017, the FASB issued an update intended to improve and simplify accounting rules around hedge accounting. Amendments expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. The amendments in this update also make certain targeted improvements to simplify the application of hedge accounting guidance and ease the administrative burden of hedge documentation requirements and assessing hedge effectiveness. This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2019. The Company is still evaluating the impact that this guidance will have on its financial statements.

In July 2017, the FASB issued guidance which simplifies the accounting for certain financial instruments with down round features, a provision in an equity-linked financial instrument (or embedded feature) that provides a downward adjustment of the current exercise price based on the price of future equity offerings. The provisions of the new guidance related to down rounds are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The adoption of this update did not have a material impact on the Company’s financial statements because the Company does not have any equity-linked financial instruments that have such down round features.

In March 2017, the FASB issued an update which shortens the amortization period for certain callable debt securities held at a premium to the earliest call date. Under current GAAP, entities amortize the premium as an adjustment of yield over the contractual life of the instrument even if the holder is certain that the call will be exercised. As a result, upon the exercise of a call on a callable debt security held at a premium, the unamortized premium is recorded as a loss in earnings. The update shortens the amortization period for certain callable debt securities held at a premium and requires the premium be amortized to the earliest call date. This update will be effective for annual and interim periods beginning after December 15, 2018. Entities are required to apply the amendments on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The adoption of this update did not have a material impact on the Company’s financial statements.

In January 2017, the FASB issued an update to simplify the test for goodwill impairment. This amendment eliminates Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. This update will be effective for the Company’s financial statements for annual years beginning after December 15, 2019. The adoption of this update is not expected to have a material impact on the Company’s financial statements.

In June 2016, the FASB issued an accounting standards update pertaining to the measurement of credit losses on financial instruments. This update requires the measurement of all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. This update is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2019. The Company formed a working group under the direction of the Chief Risk Officer that is comprised of individuals from the credit, risk management, finance and project management areas for implementation of this update. In 2018, the Company contracted with a software and advisory service provider to aid in implementation. The software provider has completed configuration of the software platform and the Company has completed initial data preparation for the software. The Company and software provider have begun evaluating results of initial scenario analysis and as a result have been reviewing and fine tuning assumptions in the model. The Company is still developing qualitative adjustments as well as metrics for determination of a reasonable and supportable forecast period. The Company has engaged a third-party firm to conduct a review and validation of our methodology and models.

In February 2016, FASB issued accounting guidance that requires all lessees to recognize a lease liability and a right-of-use asset, measured at the present value of the future minimum lease payments, at the lease commencement date. Lessor accounting remains largely unchanged under the new guidance. The guidance is effective for fiscal years beginning after December 15, 2018, including interim reporting periods within that reporting period, with early adoption permitted. A modified retrospective approach must be applied for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company retained the services of a software provider to aid in its implementation. In the third quarter of 2018, the FASB issued updates which included targeted improvements to the leasing guidance that is intended to reduce costs and ease implementation of the leases standard. The improvements include an optional transition method to adopt the new leases standard where the entity could initially apply the new leases standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. Consequently, an entity's reporting for comparative periods presented in the financial statements in which it adopts the new leases standard, will continue to be in accordance with Accounting Standards Codification ("ASC") Topic 840, Leases. An entity that adopts this additional transition method, must provide the required disclosures for all periods that continue to be in accordance with the current ASC 840. The lease update also includes a practical expedient, by class of underlying asset, to not separate nonlease components from the associated lease component and, instead, to account for these components as a single component if the nonlease components otherwise would be accounted for under the new revenue guidance and both of the following conditions are met: 1) the timing and pattern of transfer of the nonlease component(s) and associated lease component are the same, and 2) the lease component, if accounted for separately, would be classified as an operating lease. Management used the optional transition method discussed above and also used the practical expedient to account for non-lease components with the associated lease component as a single component assuming the appropriate conditions are met. The FASB issued further clarification of the standard and addressed implementation and disclosure requirements. With the adoption of this update, the Company recorded an operating lease right-of-use asset of $18.7 million, a corresponding liability of $20.2 million and a cumulative adjustment to retained earnings of $125,000.

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Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

This quarterly report presents the consolidated financial statements of Lakeland Bancorp, Inc. and its subsidiaries, including Lakeland Bank (“Lakeland”) and the Bank’s wholly owned subsidiaries (collectively, the “Company”). The accounting and reporting policies of the Company conform with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and predominant practices within the banking industry. The Company’s unaudited interim financial statements reflect all adjustments, such as normal recurring accruals that are, in the opinion of management, necessary for the fair presentation of the results of the interim periods. The results of operations for the three months ended March 31, 2019 do not necessarily indicate the results that the Company will achieve for all of 2019.

Certain information and footnote disclosures required under U.S. GAAP have been condensed or omitted, as permitted by rules and regulations of the Securities and Exchange Commission. These unaudited interim financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes that are presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. Certain reclassifications have been made in the consolidated financial statements to conform with current year classifications.

Recent Accounting Pronouncements

In August 2018, the Financial Accounting Standards Board ("FASB") issued an update to improve the effectiveness of fair value measurement disclosures. Among other provisions, the update removes requirements to disclose amounts and reasons of transfers between Level 1 and Level 2 in the fair value hierarchy, and it modifies the disclosures regarding transfers in and out of Level 3 of the fair value hierarchy. The update requires a discussion regarding the change in unrealized gains and losses included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period, and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements.This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2019. Because the Company does not typically have Level 3 fair value measurements, the update is not expected to have a material impact on the Company's financial statements.

In August 2018, the FASB issued an update which aligns the requirements for capitalizing implementation costs in a cloud-computing arrangement service contract with the requirements for capitalizing implementation costs incurred for an internal-use software license. Implementation costs incurred by customers in a cloud computing arrangement are to be deferred and recognized over the term of the arrangement, if those costs would be capitalized by the customer in a software licensing arrangement under the internal-use software guidance.This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2019. The Company is currently assessing the impact that the guidance will have on its financial statements.

In August 2018, the FASB issued an update which changes the disclosure of accounting and reporting requirements related to single-employer defined benefit pension or other postretirement benefit plans. The amendments in the update remove disclosures that are no longer considered cost-beneficial, clarify the specific requirements of disclosures and add disclosure requirements identified as relevant. For calendar-year public companies, the changes will be effective for annual periods, including interim periods within those annual periods, in 2020. Because the Company has minimal pension plans that require calculation of projected benefit obligations or accumulated benefit obligations, the update will not have a material impact on the Company's financial statements.

In June 2018, the FASB issued an update expanding earlier guidance on stock compensation to include share-based payments issued to nonemployees for goods and services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially the same.This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2018. Earlier adoption was permitted. The adoption of this update did not have a significant impact on the Company's financial statements.

In August 2017, the FASB issued an update intended to improve and simplify accounting rules around hedge accounting. Amendments expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. The amendments in this update also make certain targeted improvements to simplify the application of hedge accounting guidance and ease the administrative burden of hedge documentation requirements and assessing hedge effectiveness. This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2019. The Company is still evaluating the impact that this guidance will have on its financial statements.

In July 2017, the FASB issued guidance which simplifies the accounting for certain financial instruments with down round features, a provision in an equity-linked financial instrument (or embedded feature) that provides a downward adjustment of the current exercise price based on the price of future equity offerings. The provisions of the new guidance related to down rounds are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The adoption of this update did not have a material impact on the Company’s financial statements because the Company does not have any equity-linked financial instruments that have such down round features.

In March 2017, the FASB issued an update which shortens the amortization period for certain callable debt securities held at a premium to the earliest call date. Under current GAAP, entities amortize the premium as an adjustment of yield over the contractual life of the instrument even if the holder is certain that the call will be exercised. As a result, upon the exercise of a call on a callable debt security held at a premium, the unamortized premium is recorded as a loss in earnings. The update shortens the amortization period for certain callable debt securities held at a premium and requires the premium be amortized to the earliest call date. This update will be effective for annual and interim periods beginning after December 15, 2018. Entities are required to apply the amendments on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The adoption of this update did not have a material impact on the Company’s financial statements.

In January 2017, the FASB issued an update to simplify the test for goodwill impairment. This amendment eliminates Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. This update will be effective for the Company’s financial statements for annual years beginning after December 15, 2019. The adoption of this update is not expected to have a material impact on the Company’s financial statements.

In June 2016, the FASB issued an accounting standards update pertaining to the measurement of credit losses on financial instruments. This update requires the measurement of all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. This update is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. This update will be effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2019. The Company formed a working group under the direction of the Chief Risk Officer that is comprised of individuals from the credit, risk management, finance and project management areas for implementation of this update. In 2018, the Company contracted with a software and advisory service provider to aid in implementation. The software provider has completed configuration of the software platform and the Company has completed initial data preparation for the software. The Company and software provider have begun evaluating results of initial scenario analysis and as a result have been reviewing and fine tuning assumptions in the model. The Company is still developing qualitative adjustments as well as metrics for determination of a reasonable and supportable forecast period. The Company has engaged a third-party firm to conduct a review and validation of our methodology and models.

In February 2016, FASB issued accounting guidance that requires all lessees to recognize a lease liability and a right-of-use asset, measured at the present value of the future minimum lease payments, at the lease commencement date. Lessor accounting remains largely unchanged under the new guidance. The guidance is effective for fiscal years beginning after December 15, 2018, including interim reporting periods within that reporting period, with early adoption permitted. A modified retrospective approach must be applied for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company retained the services of a software provider to aid in its implementation. In the third quarter of 2018, the FASB issued updates which included targeted improvements to the leasing guidance that is intended to reduce costs and ease implementation of the leases standard. The improvements include an optional transition method to adopt the new leases standard where the entity could initially apply the new leases standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. Consequently, an entity's reporting for comparative periods presented in the financial statements in which it adopts the new leases standard, will continue to be in accordance with Accounting Standards Codification ("ASC") Topic 840, Leases. An entity that adopts this additional transition method, must provide the required disclosures for all periods that continue to be in accordance with the current ASC 840. The lease update also includes a practical expedient, by class of underlying asset, to not separate nonlease components from the associated lease component and, instead, to account for these components as a single component if the nonlease components otherwise would be accounted for under the new revenue guidance and both of the following conditions are met: 1) the timing and pattern of transfer of the nonlease component(s) and associated lease component are the same, and 2) the lease component, if accounted for separately, would be classified as an operating lease. Management used the optional transition method discussed above and also used the practical expedient to account for non-lease components with the associated lease component as a single component assuming the appropriate conditions are met. The FASB issued further clarification of the standard and addressed implementation and disclosure requirements. With the adoption of this update, the Company recorded an operating lease right-of-use asset of $18.7 million, a corresponding liability of $20.2 million and a cumulative adjustment to retained earnings of $125,000.

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Acquisitions - (Tables)

3 Months Ended

Mar. 31, 2019

Business Combinations [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table summarizes the estimated fair value of the acquired assets and liabilities assumed at the date of acquisition for Highlands.

(in thousands)
Cash and cash equivalents	13,454
Securities, available for sale	22,734
Federal Home Loan Bank stock	1,767
Loans held for sale	1,113
Loans	426,959
Premises and equipment	3,253
Goodwill	17,720
Identifiable intangible assets	3,728
Accrued interest receivable and other assets	5,349
Total assets acquired	496,077
Deposits	(409,638		)
Other borrowings	(27,800		)
Subordinated debt	(13,157		)
Other liabilities	(2,065		)
Total liabilities assumed	(452,660		)
Net assets acquired	$	43,417

Schedule of Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period

The following is a summary of the credit impaired loans acquired in the Highlands acquisition as of the closing date.

(in thousands)
Contractually required principal and interest at acquisition	$	20,025
Contractual cash flows not expected to be collected (non-accretable difference)	4,758
Expected cash flows at acquisition	$	15,267
Interest component of expected cash flows (accretable difference)	1,420
Fair value of acquired loans	$	13,847

Business Acquisition, Pro Forma Information

	Pro Forma		Pro Forma
(in thousands)	March 31, 2019		March 31, 2018
Net interest income	$	48,753	$	46,787
Provision for loan losses	508		1,382
Noninterest income	5,694		6,198
Noninterest expense	31,205		30,501
Net income	17,784		16,687
Earnings per share:
Fully diluted	$	0.35	$	0.33

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Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2019

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following table sets forth the components of noninterest income for the three months ended March 31, 2019 and 2018:

	For the Three Months Ended March 31,
(in thousands)	2019		2018
Deposit Related Fees and Charges
Debit card interchange income	$	1,218	$	1,118
Overdraft charges	996		1,109
ATM service charges	184		190
Demand deposit fees and charges	143		158
Savings service charges	32		36
Total	2,573		2,611
Commissions and Fees
Loan fees	348		322
Wire transfer charges	267		248
Investment services income	352		228
Merchant fees	184		216
Commissions from sales of checks	103		108
Safe deposit income	91		84
Other income	61		63
Total	1,406		1,269
Gains on Sale of Loans	371		246
Other Income
Gains on customer swap transactions	199		332
Title insurance income	90		49
Other income	61		97
Total	350		478
Revenue not from contracts with customers	1,023		730
Total Noninterest Income	5,723		5,334
Timing of Revenue Recognition
Products and services transferred at a point in time	4,681		4,585
Products and services transferred over time	19		19
Revenue not from contracts with customers	1,023		730
Total Noninterest Income	$	5,723	$	5,334

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Computation of Earnings Per Share

The following schedule shows the Company’s earnings per share calculations for the periods presented:

	For the Three Months Ended March 31,
(in thousands, except per share data)	2019		2018
Net income available to common shareholders	$	15,626	$	15,255
Less: earnings allocated to participating securities	141		141
Net income allocated to common shareholders	$	15,485	$	15,114
Weighted average number of common shares outstanding - basic	50,275		47,503
Share-based plans	167		233
Weighted average number of common shares outstanding - diluted	50,442		47,736
Basic earnings per share	$	0.31	$	0.32
Diluted earnings per share	$	0.31	$	0.32

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Investment Securities (Tables)

3 Months Ended

Mar. 31, 2019

Investments, Debt and Equity Securities [Abstract]

Reconciliation of Available-for-Sale Securities

	March 31, 2019									December 31, 2018
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
AVAILABLE FOR SALE
U.S. Treasury and U.S. government agencies	$	141,088	$	94	$	(1,601	)	$	139,581	$	143,495	$	—	$	(2,568	)	$	140,927
Mortgage-backed securities, residential	442,358		1,473		(5,204		)	438,627		434,208		779		(8,843		)	426,144
Mortgage-backed securities, multifamily	30,956		135		(82		)	31,009		21,087		67		(204		)	20,950
Obligations of states and political subdivisions	44,850		362		(195		)	45,017		45,951		140		(586		)	45,505
Debt securities	5,000		4		—			5,004		5,000		92		—			5,092
	$	664,252	$	2,068	$	(7,082	)	$	659,238	$	649,741	$	1,078	$	(12,201	)	$	638,618

Reconciliation of Held-to-Maturity Securities

	March 31, 2019									December 31, 2018
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
HELD TO MATURITY
U.S. government agencies	$	32,461	$	—	$	(360	)	$	32,101	$	33,025	$	—	$	(677	)	$	32,348
Mortgage-backed securities, residential	82,070		246		(1,033		)	81,283		75,859		169		(1,838		)	74,190
Mortgage-backed securities, multifamily	1,827		—		(19		)	1,808		1,853		—		(35		)	1,818
Obligations of states and political subdivisions	36,450		274		(127		)	36,597		37,909		113		(328		)	37,694
Debt securities	6,500		—		(70		)	6,430		5,000		—		(118		)	4,882
	$	159,308	$	520	$	(1,609	)	$	158,219	$	153,646	$	282	$	(2,996	)	$	150,932

Summary of Investment Securities by Stated Maturity

The following table lists contractual maturities of investment securities classified as available for sale and held to maturity as of March 31, 2019. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Available for Sale				Held to Maturity
(in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
March 31, 2019
Due in one year or less	$	24,755	$	24,636	$	5,924	$	5,929
Due after one year through five years	116,056		115,089		42,423		42,361
Due after five years through ten years	32,550		32,602		24,379		24,144
Due after ten years	17,577		17,275		2,685		2,694
	190,938		189,602		75,411		75,128
Mortgage-backed securities	473,314		469,636		83,897		83,091
Total securities	$	664,252	$	659,238	$	159,308	$	158,219

Reconciliation of Available-for-Sale and Held-to-Maturity Securities in Continuous Unrealized Loss Position

The following tables indicates the length of time individual securities have been in a continuous unrealized loss position for the periods presented:

	Less Than 12 Months				12 Months or Longer				Total
(dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses
March 31, 2019
AVAILABLE FOR SALE
U.S. Treasury and U.S. government agencies	$	12,112	$	78	$	116,126	$	1,523	25	$	128,238	$	1,601
Mortgage-backed securities, residential	719		1		289,307		5,203		126	290,026		5,204
Mortgage-backed securities, multifamily	4,979		9		12,993		73		4	17,972		82
Obligations of states and political subdivisions	—		—		16,088		195		30	16,088		195
	$	17,810	$	88	$	434,514	$	6,994	185	$	452,324	$	7,082
HELD TO MATURITY
U.S. government agencies	$	—	$	—	$	32,101	$	360	6	$	32,101	$	360
Mortgage-backed securities, residential	9,012		27		47,210		1,006		31	56,222		1,033
Mortgage-backed securities, multifamily	—		—		1,808		19		2	1,808		19
Obligations of states and political subdivisions	—		—		8,222		127		7	8,222		127
Debt securities	3,930		70		—		—		1	3,930		70
	$	12,942	$	97	$	89,341	$	1,512	47	$	102,283	$	1,609

	Less Than 12 Months				12 Months or Longer				Total
(dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses
December 31, 2018
AVAILABLE FOR SALE
U.S. Treasury and U.S. government agencies	$	20,588	$	216	$	120,338	$	2,352	27	$	140,926	$	2,568
Mortgage-backed securities, residential	10,119		58		316,851		8,785		139	326,970		8,843
Mortgage-backed securities, multifamily	1,977		2		12,911		202		4	14,888		204
Obligations of states and political subdivisions	1,289		2		26,522		584		50	27,811		586
	$	33,973	$	278	$	476,622	$	11,923	220	$	510,595	$	12,201
HELD TO MATURITY
U.S. government agencies	$	—	$	—	$	32,348	$	677	6	$	32,348	$	677
Mortgage-backed securities, residential	8,325		59		53,761		1,779		36	62,086		1,838
Mortgage-backed securities, multifamily	—		—		1,818		35		2	1,818		35
Obligations of states and political subdivisions	1,764		8		15,580		320		27	17,344		328
Debt securities	3,882		118		—		—		1	3,882		118
	$	13,971	$	185	$	103,507	$	2,811	72	$	117,478	$	2,996

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Loans and Other Real Estate (Tables)

3 Months Ended

Mar. 31, 2019

Receivables [Abstract]

Composition of Company`s Loan and Lease Portfolio

The following sets forth the composition of the Company’s loan portfolio:

(in thousands)	March 31, 2019			December 31, 2018
Commercial, secured by real estate	$	3,436,550		$	3,057,779
Commercial, industrial and other	389,230			336,735
Equipment finance	90,791			87,925
Real estate - residential mortgage	335,290			329,854
Real estate - construction	332,995			319,545
Home equity and consumer	339,815			328,609
Total loans	4,924,671			4,460,447
Less: deferred fees	(3,280		)	(3,714		)
Loans, net of deferred fees	$	4,921,391		$	4,456,733

Schedule of Changes in Accretable Yield

The following table presents changes in the accretable yield for PCI loans:

	For the Three Months Ended
(in thousands)	March 31, 2019			March 31, 2018
Balance, beginning of period	$	81		$	129
Acquisitions	1,420			—
Accretion	(193		)	(44		)
Net reclassification non-accretable difference	30			28
Balance, end of period	$	1,338		$	113

Company's Non-Performing Assets and its Accruing Troubled Debt Restructurings, Excluding PCI Loans

The following schedule sets forth certain information regarding the Company’s non-performing assets and its accruing troubled debt restructurings, excluding PCI loans:

(in thousands)	March 31, 2019		December 31, 2018
Commercial, secured by real estate	$	9,817	$	7,192
Commercial, industrial and other	2,202		1,019
Equipment finance	383		501
Real estate - residential mortgage	1,740		1,986
Home equity and consumer	1,581		1,432
Total non-accrual loans	$	15,723	$	12,130
Other real estate and other repossessed assets	715		830
TOTAL NON-PERFORMING ASSETS	$	16,438	$	12,960
Troubled debt restructurings, still accruing	$	6,352	$	9,293

Age Analysis of Past Due Loans, Segregated by Class of Loans

An age analysis of past due loans, segregated by class of loans as of March 31, 2019 and December 31, 2018, is as follows:

(in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater Than 89 Days Past Due		Total Past Due		Current		Total Loans		Recorded Investment Greater than 89 Days and Still Accruing
March 31, 2019
Commercial, secured by real estate	$	14,944	$	3,060	$	3,913	$	21,917	$	3,414,633	$	3,436,550	$	—
Commercial, industrial and other	1,084		220		377		1,681		387,549		389,230		—
Equipment finance	358		210		383		951		89,840		90,791		—
Real estate - residential mortgage	2,406		—		1,146		3,552		331,738		335,290		—
Real estate - construction	—		—		3,423		3,423		329,572		332,995		—
Home equity and consumer	1,845		365		1,297		3,507		336,308		339,815		78
	$	20,637	$	3,855	$	10,539	$	35,031	$	4,889,640	$	4,924,671	$	78
December 31, 2018
Commercial, secured by real estate	$	1,477	$	639	$	2,237	$	4,353	$	3,053,426	$	3,057,779	$	—
Commercial, industrial and other	173		243		750		1,166		335,569		336,735		—
Equipment finance	533		13		501		1,047		86,878		87,925		—
Real estate - residential mortgage	743		111		1,776		2,630		327,224		329,854		—
Real estate - construction	—		—		—		—		319,545		319,545		—
Home equity and consumer	1,917		216		850		2,983		325,626		328,609		—
	$	4,843	$	1,222	$	6,114	$	12,179	$	4,448,268	$	4,460,447	$	—

Impaired Loans with and without Specific Allowances

Impaired loans as of March 31, 2019 and December 31, 2018 are as follows:

(in thousands)	Recorded Investment in Impaired Loans		Contractual Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized
March 31, 2019
Loans without specific allowance:
Commercial, secured by real estate	$	12,188	$	12,883	$	—	$	8,878	$	52
Commercial, industrial and other	2,309		2,633		—		1,142		4
Equipment finance	301		597		—		301		—
Real estate - residential mortgage	—		—		—		—		—
Real estate - construction	—		—		—		—		—
Home equity and consumer	—		—		—		—		—
Loans with specific allowance:
Commercial, secured by real estate	3,797		4,070		229		6,642		72
Commercial, industrial and other	200		199		8		199		3
Equipment finance	26		26		12		26		—
Real estate - residential mortgage	715		875		4		718		5
Real estate - construction	—		—		—		—		—
Home equity and consumer	700		741		6		697		8
Total:
Commercial, secured by real estate	$	15,985	$	16,953	$	229	$	15,520	$	124
Commercial, industrial and other	2,509		2,832		8		1,341		7
Equipment finance	327		623		12		327		—
Real estate - residential mortgage	715		875		4		718		5
Real estate - construction	—		—		—		—		—
Home equity and consumer	700		741		6		697		8
	$	20,236	$	22,024	$	259	$	18,603	$	144

(in thousands)	Recorded Investment in Impaired Loans		Contractual Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized
December 31, 2018
Loans without specific allowance:
Commercial, secured by real estate	$	9,284	$	9,829	—		$	7,369	$	188
Commercial, industrial and other	1,151		1,449		—		1,834		19
Equipment finance	301		597		—		376		—
Real estate - residential mortgage	—		—		—		242		4
Real estate - construction	—		—		—		726		—
Home equity and consumer	—		—		—		—		—
Loans with specific allowance:
Commercial, secured by real estate	7,270		7,597		307		7,594		317
Commercial, industrial and other	209		209		7		209		12
Equipment finance	30		30		14		19		—
Real estate - residential mortgage	730		884		4		745		20
Real estate - construction	—		—		—		—		—
Home equity and consumer	727		765		6		898		32
Total:
Commercial, secured by real estate	$	16,554	$	17,426	$	307	$	14,963	$	505
Commercial, industrial and other	1,360		1,658		7		2,043		31
Equipment finance	331		627		14		395		—
Real estate - residential mortgage	730		884		4		987		24
Real estate - construction	—		—		—		726		—
Home equity and consumer	727		765		6		898		32
	$	19,702	$	21,360	$	338	$	20,012	$	592

Company's Commercial Loan Portfolio

The following table shows the Company’s commercial loan portfolio as of March 31, 2019 and December 31, 2018, by the risk ratings discussed above (in thousands):

March 31, 2019	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Real Estate - Construction
RISK RATING
1	$	—	$	2,450	$	—
2	—		18,444		—
3	68,756		36,739		—
4	933,390		88,551		18,204
5	2,247,650		205,999		302,190
5W - Watch	89,295		19,381		5,873
6 - Other assets especially mentioned	46,466		3,988		2,267
7 - Substandard	50,993		13,678		4,461
8 - Doubtful	—		—		—
9 - Loss	—		—		—
Total	$	3,436,550	$	389,230	$	332,995

December 31, 2018	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Real Estate - Construction
RISK RATING
1	$	—	$	1,119	$	—
2	—		18,462		—
3	69,995		36,367		—
4	933,577		91,145		17,375
5	1,910,423		168,474		297,625
5W - Watch	61,626		7,798		3,493
6 - Other assets especially mentioned	38,844		2,033		—
7 - Substandard	43,314		11,337		1,052
8 - Doubtful	—		—		—
9 - Loss	—		—		—
Total	$	3,057,779	$	336,735	$	319,545

Allowance for Loan and Lease Losses by Portfolio Segment

The following table details activity in the allowance for loan losses by portfolio segment for the three months ended March 31, 2019 and 2018:

(in thousands)	Commercial, Secured by Real Estate			Commercial, Industrial and Other			Equipment Finance			Real Estate- Residential Mortgage			Real Estate- Construction			Home Equity and Consumer			Total
Three Months Ended March 31, 2019
Beginning Balance	$	27,881		$	1,742		$	987		$	1,566		$	3,015		$	2,497		$	37,688
Charge-offs	(187		)	(147		)	(87		)	(50		)	—			(45		)	(516		)
Recoveries	115			97			2			9			5			71			299
Provision	(294		)	900			45			39			(133		)	(49		)	508
Ending Balance	$	27,515		$	2,592		$	947		$	1,564		$	2,887		$	2,474		$	37,979

(in thousands)	Commercial, Secured by Real Estate			Commercial, Industrial and Other			Equipment Finance			Real Estate- Residential Mortgage			Real Estate- Construction		Home Equity and Consumer			Total
Three Months Ended March 31, 2018
Beginning Balance	$	25,704		$	2,313		$	630		$	1,557		$	2,731	$	2,520		$	35,455
Charge-offs	(22		)	(1,012		)	(23		)	(93		)	—		(100		)	(1,250		)
Recoveries	31			20			2			2			5		95			155
Provision	104			447			433			123			196		(19		)	1,284
Ending Balance	$	25,817		$	1,768		$	1,042		$	1,589		$	2,932	$	2,496		$	35,644

Loans Receivable Summarized by Portfolio Segment and Impairment Method

Loans receivable summarized by portfolio segment and impairment method are as follows:

(in thousands)	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Equipment Finance		Real Estate- Residential Mortgage		Real Estate- Construction		Home Equity and Consumer		Total
March 31, 2019
Ending Balance: Individually evaluated for impairment	$	15,985	$	2,509	$	327	$	715	$	—	$	700	$	20,236
Ending Balance: Collectively evaluated for impairment	3,413,062		384,213		90,464		334,177		329,566		338,573		4,890,055
Ending Balance: Loans acquired with deteriorated credit quality	7,503		2,508		—		398		3,429		542		14,380
Ending Balance (1)	$	3,436,550	$	389,230	$	90,791	$	335,290	$	332,995	$	339,815	$	4,924,671

(in thousands)	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Equipment Finance		Real Estate- Residential Mortgage		Real Estate- Construction		Home Equity and Consumer		Total
December 31, 2018
Ending Balance: Individually evaluated for impairment	$	16,554	$	1,360	$	331	$	730	$	—	$	727	$	19,702
Ending Balance: Collectively evaluated for impairment	3,040,573		335,375		87,594		329,124		319,545		327,882		4,440,093
Ending balance: Loans acquired with deteriorated credit quality	652		—		—		—		—		—		652
Ending Balance (1)	$	3,057,779	$	336,735	$	87,925	$	329,854	$	319,545	$	328,609	$	4,460,447

(1) Excludes deferred fees

Allowance for Loan Losses Summarized by Portfolio Segment and Impairment Classification

The allowance for loan losses is summarized by portfolio segment and impairment classification as follows:

(in thousands)	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Equipment Finance		Real Estate- Residential Mortgage		Real Estate- Construction		Home Equity and Consumer		Total
March 31, 2019
Ending Balance: Individually evaluated for impairment	$	229	$	8	$	12	$	4	$	—	$	6	$	259
Ending Balance: Collectively evaluated for impairment	27,286		2,584		935		1,560		2,887		2,468		37,720
Ending Balance	$	27,515	$	2,592	$	947	$	1,564	$	2,887	$	2,474	$	37,979

(in thousands)	Commercial, Secured by Real Estate		Commercial, Industrial and Other		Equipment Finance		Real Estate- Residential Mortgage		Real Estate- Construction		Home Equity and Consumer		Total
December 31, 2018
Ending Balance: Individually evaluated for impairment	$	307	$	7	$	14	$	4	$	—	$	6	$	338
Ending Balance: Collectively evaluated for impairment	27,574		1,735		973		1,562		3,015		2,491		37,350
Ending Balance	$	27,881	$	1,742	$	987	$	1,566	$	3,015	$	2,497	$	37,688

Summary of Restructured Loans

The following table summarizes loans that have been restructured during the three months ended March 31, 2019 and 2018:

	For the Three Months Ended March 31, 2019					For the Three Months Ended March 31, 2018
(dollars in thousands)	Number of Contracts	Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Contracts	Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial, secured by real estate	—	$	—	$	—	2	$	1,657	$	1,657
	—	$	—	$	—	2	$	1,657	$	1,657

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Leases (Tables)

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Lease, Cost

Lease costs were as follows:

(in thousands)	Three Months Ended March 31, 2019
Operating lease cost	$	820
Variable lease cost	35
Sublease income	(31		)
Net lease cost	$	824

Maturity analysis of operating lease liabilities

A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total operating lease liability at March 31, 2019 is as follows:

(in thousands)
Within one year	$	3,273
After one year but within two years	3,036
After two year but within three years	2,786
After three year but within four years	2,283
After four year but within five years	2,058
After 5 years	12,061
Total undiscounted cash flows	25,497
Discount on cash flows	(4,674		)
Total lease liability	$	20,823

Schedule of Lease, Other Information

Other information (in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	660
Right-of-use asset obtained in exchange for new operating lease liabilities	$	765

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Derivatives (Tables)

3 Months Ended

Mar. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary Information Regarding Derivatives

The following table presents summary information regarding these derivatives for the periods presented (dollars in thousands):

March 31, 2019	Notional Amount		Average Maturity (Years)	Weighted Average Fixed Rate		Weighted Average Variable Rate	Fair  Value
Classified in Other Assets:
3rd Party interest rate swaps	$	88,842	7.5	3.80	%	1 Mo. LIBOR + 2.13%	$	2,939
Customer interest rate swaps	253,922		10.8	4.83	%	1 Mo. LIBOR + 2.04%	11,411
Interest rate swap (cash flow hedge)	30,000		2.3	1.10	%	3 Mo. LIBOR	828
Classified in Other Liabilities:
Customer interest rate swaps	$	88,842	7.5	3.80	%	1 Mo. LIBOR + 2.13%	$	(2,939	)
3rd Party interest rate swaps	253,922		10.8	4.83	%	1 Mo. LIBOR + 2.04%	(11,411		)

December 31, 2018	Notional  Amount		Average Maturity (Years)	Weighted  Average Fixed Rate		Weighted Average Variable Rate	Fair  Value
Classified in Other Assets:
3rd Party interest rate swaps	$	153,909	8.3	4.10	%	1 Mo. LIBOR + 2.13%	$	5,329
Customer interest rate swaps	164,427		12.0	5.04	%	1 Mo. LIBOR + 2.05%	5,707
Interest rate swap (cash flow hedge)	30,000		2.5	1.10	%	3 Mo. LIBOR	1,099
Classified in Other Liabilities:
Customer interest rate swaps	$	153,909	8.3	4.10	%	1 Mo. LIBOR + 2.13%	$	(5,329	)
3rd party interest rate swaps	164,427		12.0	5.04	%	1 Mo. LIBOR + 2.05%	(5,707		)

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Goodwill and Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Estimated Future Amortization Expense

The estimated future amortization expense for the remainder of 2019 and for each of the succeeding five years ended December 31 is as follows (in thousands):

For the Year Ended
2019	$	878
2020	1,025
2021	868
2022	711
2023	554
2024	425

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Share-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Summary of Company's Restricted Stock Activity

The following is a summary of the Company’s restricted stock activity during the three months ended March 31, 2019:

	Number of Shares		Weighted Average Price
Outstanding, January 1, 2019	11,701		$	20.18
Granted	13,052		15.96
Vested	(11,643	)	20.24
Forfeited	—		—
Outstanding, March 31, 2019	13,110		$	15.93

The following is a summary of the Company’s RSU activity during the three months ended March 31, 2019:

	Number of Shares		Weighted Average Price
Outstanding, January 1, 2019	299,347		$	16.60
Granted	127,559		16.66
Vested	(83,396	)	12.53
Forfeited	(2,717	)	17.38
Outstanding, March 31, 2019	340,793		$	17.61

Option Activity under the Company's Stock Option Plans

There were no grants of stock options in the first three months of 2019 or 2018. Option activity under the Company’s stock option plans is as follows:

	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding, January 1, 2019	67,488	$	8.28	2.86	$	440,483
Granted	—	—
Exercised	—	—
Forfeited	—	—
Expired	—	—
Outstanding, March 31, 2019	67,488	$	8.28	2.61	$	448,581
Options exercisable at March 31, 2019	67,488	$	8.28	2.61	$	448,581

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Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2019

Equity [Abstract]

Components of Other Comprehensive Income (Loss)

The components of other comprehensive income (loss) are as follows:

	For the Three Months Ended
	March 31, 2019									March 31, 2018
(in thousands)	Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount			Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount
Net unrealized gains (losses) on available for sale securities:
Net unrealized holding (losses) gains arising during period	$	6,109		$	(1,746	)	$	4,363		$	(7,502	)	$	1,770		$	(5,732	)
Reclassification adjustment for net gains arising during the period	—			—			—			—			—			—
Net unrealized losses (gains)	6,109			(1,746		)	4,363			(7,502		)	1,770			(5,732		)
Unrealized gains (losses) on derivatives	(271		)	57			(214		)	358			(75		)	283
Other comprehensive (loss) income, net	$	5,838		$	(1,689	)	$	4,149		$	(7,144	)	$	1,695		$	(5,449	)

Summary of Changes in Components of Other Comprehensive Income, Net of Tax

The following table shows the changes in the balances of each of the components of other comprehensive income for the periods presented, net of tax:

	For the Three Months Ended March 31, 2019							For the Three Months Ended March 31, 2018
(in thousands)	Unrealized Losses on Available for  Sale Securities		Unrealized Gains on Derivatives		Pension Items	Total		Unrealized Gains (Losses) on Available for  Sale Securities			Unrealized Gains  on Derivatives		Pension Items		Total
Beginning balance	(8,782	)	903		41	(7,838	)	$	(3,232	)	$	862	$	21	$	(2,349	)
Adjustment for implementation of ASU 2016-01	—		—		—	—		(2,043		)	—		—		(2,043		)
Adjusted beginning balance	(8,782	)	903		41	(7,838	)	(5,275		)	862		21		(4,392		)
Net current period other comprehensive (loss) income	4,363		(214	)	—	4,149		(5,732		)	283		—		(5,449		)
Ending balance	(4,419	)	689		41	(3,689	)	$	(11,007	)	$	1,145	$	21	$	(9,841	)

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Estimated Fair Value of Financial Instruments and Fair Value Measurement (Tables)

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value of Financial Assets and Liabilities Measured on Recurring Basis

The following table sets forth the Company’s financial assets that were accounted for at fair value on a recurring basis as of the periods presented by level within the fair value hierarchy. During the three months ended March 31, 2019, the Company did not make any transfers between any levels within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:

(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
March 31, 2019
Assets:
Investment securities, available for sale
U.S. Treasury and government agencies	$	16,293	$	123,288	$	—	$	139,581
Mortgage-backed securities	—		469,636		—		469,636
Obligations of states and political subdivisions	—		45,017		—		45,017
Other debt securities	—		5,004		—		5,004
Total securities available for sale	16,293		642,945		—		659,238
Equity securities, at fair value	1,864		13,368		—		15,232
Derivative assets	—		15,178		—		15,178
Total Assets	$	18,157	$	671,491	$	—	$	689,648
Liabilities:
Derivative liabilities	$	—	$	14,350	$	—	$	14,350
Total Liabilities	$	—	$	14,350	$	—	$	14,350
December 31, 2018
Assets:
Investment securities, available for sale
U.S. Treasury and government agencies	$	4,920	$	136,007	$	—	$	140,927
Mortgage-backed securities	—		447,094		—		447,094
Obligations of states and political subdivisions	—		45,505		—		45,505
Corporate debt securities	—		5,092		—		5,092
Total securities available for sale	4,920		633,698		—		638,618
Equity securities, at fair value	2,731		13,190		—		15,921
Derivative assets	—		12,135		—		12,135
Total Assets	$	7,651	$	659,023	$	—	$	666,674
Liabilities:
Derivative liabilities	$	—	$	11,036	$	—	$	11,036
Total Liabilities	$	—	$	11,036	$	—	$	11,036

Fair Value of Assets Measured on Non-recurring Basis

The following table sets forth the Company’s assets subject to fair value adjustments (impairment) on a non-recurring basis. Assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:

(in thousands)	(Level 1)		(Level 2)		(Level 3)		Total Fair Value
March 31, 2019
Assets:
Impaired loans	$	—	$	—	$	20,236	$	20,236
Loans held for sale	—		600		—		600
Other real estate owned and other repossessed assets	—		—		715		715
December 31, 2018
Assets:
Impaired loans	$	—	$	—	$	19,702	$	19,702
Loans held for sale	—		1,113		—		1,113
Other real estate owned and other repossessed assets	—		—		830		830

Carrying Values and Fair Values of Company's Financial Instruments

The following table presents the carrying values, fair values and placement in the fair value hierarchy of the Company’s financial instruments as of March 31, 2019 and December 31, 2018:

(in thousands)	Carrying Value		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
March 31, 2019
Financial Assets:
Investment securities held to maturity	$	159,308	$	158,219	$	—	$	150,700	$	7,519
Federal Home Loan Bank and other membership bank stocks	16,951		16,951		—		16,951		—
Loans, net	4,883,412		4,899,288		—		—		4,899,288
Financial Liabilities:
Certificates of deposit	946,372		942,283		—		942,283		—
Other borrowings	175,783		174,569		—		174,569		—
Subordinated debentures	118,193		115,462		—		—		115,462
December 31, 2018
Financial Assets:
Investment securities held to maturity	$	153,646	$	150,932	$	—	$	143,913	$	7,019
Federal Home Loan Bank and other membership bank stocks	13,301		13,301		—		13,301		—
Loans, net	4,419,045		4,341,477		—		—		4,341,477
Financial Liabilities:
Certificates of deposit	757,038		750,801		—		750,801		—
Other borrowings	181,118		176,921		—		176,921		—
Subordinated debentures	105,027		102,497		—		—		102,497

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- Acquisitions (Details) $ / shares in Units, $ in Thousands		3 Months Ended
	Jan. 04, 2019 USD ($) Branch $ / shares shares	Mar. 31, 2019 USD ($)	Mar. 31, 2018 USD ($)
Business Acquisition [Line Items]
Merger related expenses		$ 2,860	$ 0
Highlands Bancorp, Inc.
Business Acquisition [Line Items]
Number of bank branches operated | Branch	4
Business acquisition, conversion, shares issued | shares	1.015
Consideration paid through common stock | shares	2,837,524
Stock option payout price per share (in dollars per share) | $ / shares	$ 14.71
Average strike price (in dollars per share) | $ / shares	$ 8.09
Cash paid for redemption of stock options	$ 797
Identifiable intangible assets	$ 3,728
Merger related expenses		$ 2,860

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Acquisitions - Estimated Fair Value of the Acquired Assets and Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Jan. 04, 2019	Dec. 31, 2018
Business Acquisition [Line Items]
Goodwill	$ 154,153		$ 136,433
Highlands Bancorp, Inc.
Business Acquisition [Line Items]
Cash and cash equivalents		$ 13,454
Securities, available for sale		22,734
Federal Home Loan Bank stock		1,767
Loans held for sale		1,113
Loans		426,959
Premises and equipment		3,253
Goodwill		17,720
Identifiable intangible assets		3,728
Accrued interest receivable and other assets		5,349
Total assets acquired		496,077
Deposits		(409,638)
Other borrowings		(27,800)
Subordinated debt		(13,157)
Other liabilities		(2,065)
Total liabilities assumed		(452,660)
Net assets acquired		$ 43,417

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Acquisitions - Summary of the Loans Acquired (Details) - Financial Asset Acquired with Credit Deterioration - Highlands Bancorp, Inc. $ in Thousands	Jan. 04, 2019 USD ($)
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items]
Contractually required principal and interest at acquisition	$ 20,025
Contractual cash flows not expected to be collected (non-accretable difference)	4,758
Expected cash flows at acquisition	15,267
Interest component of expected cash flows (accretable difference)	1,420
Fair value of acquired loans	$ 13,847

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Acquisitions - Supplemental Pro Forma Financial Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Business Combinations [Abstract]
Net interest income	$ 48,753	$ 46,787
Provision for loan losses	508	1,382
Noninterest income	5,694	6,198
Noninterest expense	31,205	30,501
Net income	$ 17,784	$ 16,687
Fully diluted (in dollars per share)	$ 0.35	$ 0.33

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Revenue Recognition - Narrative (Details)	3 Months Ended
	Mar. 31, 2019 Region Segment
Revenue from Contract with Customer [Abstract]
Number of geographic regions | Region	1
Number of operating segments | Segment	1

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Revenue Recognition - Disaggregation of Revenues (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Deposit Related Fees and Charges [Abstract]
Debit card interchange income	$ 1,218	$ 1,118
Overdraft charges	996	1,109
ATM service charges	184	190
Demand deposit fees and charges	143	158
Savings service charges	32	36
Total	2,573	2,611
Commissions and Fees
Loans, leases and fees	348	322
Wire transfer charges	267	248
Investment services income	352	228
Merchant fees	184	216
Commissions from sales of checks	103	108
Safe deposit income	91	84
Other income	61	63
Total	1,406	1,269
Gains on sales of loans	371	246
Other Income
Gains on customer swap transactions	199	332
Other income	61	97
Total	350	478
Title insurance income	90	49
Revenue not from contracts with customers	1,023	730
TOTAL NONINTEREST INCOME	5,723	5,334
Products and services transferred at a point in time
Other Income
Revenue from contract with customer	4,681	4,585
Products and services transferred over time
Other Income
Revenue from contract with customer	$ 19	$ 19

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Earnings Per Share - Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Earnings Per Share [Abstract]
Net income available to common shareholders	$ 15,626	$ 15,255
Less: earnings allocated to participating securities	141	141
Net income allocated to common shareholders	$ 15,485	$ 15,114
Weighted average number of common shares outstanding - basic (in shares)	50,275	47,503
Share-based plans (in shares)	167	233
Weighted average number of common shares outstanding - diluted (in shares)	50,442	47,736
Basic earnings per share (in usd per share)	$ 0.31	$ 0.32
Diluted earnings per share (in usd per share)	$ 0.31	$ 0.32

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Earnings Per Share - Additional Information (Detail) - shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options to purchase (in shares)	0	0

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Investment Securities - Reconciliation of Available-for-Sale Securities (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 664,252	$ 649,741
Gross Unrealized Gains	2,068	1,078
Gross Unrealized Losses	(7,082)	(12,201)
Fair Value	659,238	638,618
U.S. Treasury and U.S. government agencies
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	141,088	143,495
Gross Unrealized Gains	94	0
Gross Unrealized Losses	(1,601)	(2,568)
Fair Value	139,581	140,927
Mortgage-backed securities, residential
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	442,358	434,208
Gross Unrealized Gains	1,473	779
Gross Unrealized Losses	(5,204)	(8,843)
Fair Value	438,627	426,144
Mortgage-backed securities, multifamily
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	30,956	21,087
Gross Unrealized Gains	135	67
Gross Unrealized Losses	(82)	(204)
Fair Value	31,009	20,950
Obligations of states and political subdivisions
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	44,850	45,951
Gross Unrealized Gains	362	140
Gross Unrealized Losses	(195)	(586)
Fair Value	45,017	45,505
Debt securities
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	5,000	5,000
Gross Unrealized Gains	4	92
Gross Unrealized Losses	0	0
Fair Value	$ 5,004	$ 5,092

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Investment Securities - Reconciliation of Held-to-Maturity Securities (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	$ 159,308	$ 153,646
Gross Unrealized Gains	520	282
Gross Unrealized Losses	(1,609)	(2,996)
Fair Value	158,219	150,932
U.S. government agencies
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	32,461	33,025
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(360)	(677)
Fair Value	32,101	32,348
Mortgage-backed securities, residential
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	82,070	75,859
Gross Unrealized Gains	246	169
Gross Unrealized Losses	(1,033)	(1,838)
Fair Value	81,283	74,190
Mortgage-backed securities, multifamily
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	1,827	1,853
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(19)	(35)
Fair Value	1,808	1,818
Obligations of states and political subdivisions
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	36,450	37,909
Gross Unrealized Gains	274	113
Gross Unrealized Losses	(127)	(328)
Fair Value	36,597	37,694
Debt securities
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	6,500	5,000
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(70)	(118)
Fair Value	$ 6,430	$ 4,882

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Investment Securities - Summary of Contractual Maturities of Investment Securities Classified as Available for Sale and Held to Maturity (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Available for Sale, Amortized Cost
Due in one year or less	$ 24,755
Due after one year through five years	116,056
Due after five years through ten years	32,550
Due after ten years	17,577
Total	190,938
Total securities	664,252
Available for Sale, Fair Value
Due in one year or less	24,636
Due after one year through five years	115,089
Due after five years through ten years	32,602
Due after ten years	17,275
Total	189,602
Total securities	659,238	$ 638,618
Held to Maturity, Amortized Cost
Due in one year or less	5,924
Due after one year through five years	42,423
Due after five years through ten years	24,379
Due after ten years	2,685
Total	75,411
Total securities	159,308	153,646
Held to Maturity, Fair Value
Due in one year or less	5,929
Due after one year through five years	42,361
Due after five years through ten years	24,144
Due after ten years	2,694
Total	75,128
Total securities	158,219	$ 150,932
Mortgage-backed securities
Available for Sale, Amortized Cost
Mortgage-backed securities	473,314
Available for Sale, Fair Value
Mortgage-backed securities	469,636
Held to Maturity, Amortized Cost
Mortgage-backed securities	83,897
Held to Maturity, Fair Value
Mortgage-backed securities	$ 83,091

XML

Investment Securities - Sales of Securities and Gross Gains and Losses on Sales of Securities (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Investments, Debt and Equity Securities [Abstract]
Sale proceeds	$ 0	$ 0
Gross gains	0	0
Gross losses	$ 0	$ 0

XML

Investment Securities - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Jan. 01, 2019	Dec. 31, 2018	Jan. 01, 2018
Investment [Line Items]
Proceeds from Sale of Available-for-sale Securities, Debt	$ 0
Other than temporary impairments		$ 0
Securities, carrying value	511,300,000			$ 476,300,000
Equity securities, at fair value	15,232,000			$ 15,921,000
Cumulative adjustment for adoption of ASU 2016-01			$ 125,000
Proceeds from sales of equity securities	1,138,000	0
Loss on equity securities	(353,000)	$ 18,000
Investment in government guaranteed loans, mortgage-backed securities, small business loans	9,800,000
Investment in community development loans	$ 3,500,000
Redemption of funds	60 days
Unfunded commitments	$ 0
Other financial institutions
Investment [Line Items]
Equity securities, at fair value	1,900,000
Community reinvestment funds
Investment [Line Items]
Equity securities, at fair value	$ 13,400,000
Retained Earnings
Investment [Line Items]
Cumulative adjustment for adoption of ASU 2016-01			$ 125,000		$ 2,043,000

XML

Investment Securities - Reconciliation of Available-for-Sale and Held-to-Maturity Securities in Continuous Unrealized Loss Position (Detail) $ in Thousands	Mar. 31, 2019 USD ($) Security	Dec. 31, 2018 USD ($) Security
Investment [Line Items]
Available for Sale, Less Than 12 Months, Fair Value	$ 17,810	$ 33,973
Available for Sale, Less Than 12 Months, Unrealized Losses	88	278
Available for Sale, 12 Months or Longer, Fair Value	434,514	476,622
Available for Sale, 12 Months or Longer, Unrealized Losses	$ 6,994	$ 11,923
Available for Sale, Number of Securities (in shares) | Security	185	220
Available for Sale, Total, Fair Value	$ 452,324	$ 510,595
Available for Sale, Total, Unrealized Losses	7,082	12,201
Held to Maturity, Less Than 12 Months, Fair Value	12,942	13,971
Held to Maturity, Less Than 12 Months, Unrealized Losses	97	185
Held to Maturity, 12 Months or Longer, Fair Value	89,341	103,507
Held to Maturity, 12 Months or Longer, Unrealized Losses	$ 1,512	$ 2,811
Held to Maturity, Number of Securities (in shares) | Security	47	72
Held to Maturity, Total, Fair Value	$ 102,283	$ 117,478
Held to Maturity, Total, Unrealized Losses	1,609	2,996
U.S. Treasury and U.S. government agencies
Investment [Line Items]
Available for Sale, Less Than 12 Months, Fair Value	12,112	20,588
Available for Sale, Less Than 12 Months, Unrealized Losses	78	216
Available for Sale, 12 Months or Longer, Fair Value	116,126	120,338
Available for Sale, 12 Months or Longer, Unrealized Losses	$ 1,523	$ 2,352
Available for Sale, Number of Securities (in shares) | Security	25	27
Available for Sale, Total, Fair Value	$ 128,238	$ 140,926
Available for Sale, Total, Unrealized Losses	1,601	2,568
Held to Maturity, Less Than 12 Months, Fair Value	0	0
Held to Maturity, Less Than 12 Months, Unrealized Losses	0	0
Held to Maturity, 12 Months or Longer, Fair Value	32,101	32,348
Held to Maturity, 12 Months or Longer, Unrealized Losses	$ 360	$ 677
Held to Maturity, Number of Securities (in shares) | Security	6	6
Held to Maturity, Total, Fair Value	$ 32,101	$ 32,348
Held to Maturity, Total, Unrealized Losses	360	677
Mortgage-backed securities, residential
Investment [Line Items]
Available for Sale, Less Than 12 Months, Fair Value	719	10,119
Available for Sale, Less Than 12 Months, Unrealized Losses	1	58
Available for Sale, 12 Months or Longer, Fair Value	289,307	316,851
Available for Sale, 12 Months or Longer, Unrealized Losses	$ 5,203	$ 8,785
Available for Sale, Number of Securities (in shares) | Security	126	139
Available for Sale, Total, Fair Value	$ 290,026	$ 326,970
Available for Sale, Total, Unrealized Losses	5,204	8,843
Held to Maturity, Less Than 12 Months, Fair Value	9,012	8,325
Held to Maturity, Less Than 12 Months, Unrealized Losses	27	59
Held to Maturity, 12 Months or Longer, Fair Value	47,210	53,761
Held to Maturity, 12 Months or Longer, Unrealized Losses	$ 1,006	$ 1,779
Held to Maturity, Number of Securities (in shares) | Security	31	36
Held to Maturity, Total, Fair Value	$ 56,222	$ 62,086
Held to Maturity, Total, Unrealized Losses	1,033	1,838
Mortgage-backed securities, multifamily
Investment [Line Items]
Available for Sale, Less Than 12 Months, Fair Value	4,979	1,977
Available for Sale, Less Than 12 Months, Unrealized Losses	9	2
Available for Sale, 12 Months or Longer, Fair Value	12,993	12,911
Available for Sale, 12 Months or Longer, Unrealized Losses	$ 73	$ 202
Available for Sale, Number of Securities (in shares) | Security	4	4
Available for Sale, Total, Fair Value	$ 17,972	$ 14,888
Available for Sale, Total, Unrealized Losses	82	204
Held to Maturity, Less Than 12 Months, Fair Value	0	0
Held to Maturity, Less Than 12 Months, Unrealized Losses	0	0
Held to Maturity, 12 Months or Longer, Fair Value	1,808	1,818
Held to Maturity, 12 Months or Longer, Unrealized Losses	$ 19	$ 35
Held to Maturity, Number of Securities (in shares) | Security	2	2
Held to Maturity, Total, Fair Value	$ 1,808	$ 1,818
Held to Maturity, Total, Unrealized Losses	19	35
Obligations of states and political subdivisions
Investment [Line Items]
Available for Sale, Less Than 12 Months, Fair Value	0	1,289
Available for Sale, Less Than 12 Months, Unrealized Losses	0	2
Available for Sale, 12 Months or Longer, Fair Value	16,088	26,522
Available for Sale, 12 Months or Longer, Unrealized Losses	$ 195	$ 584
Available for Sale, Number of Securities (in shares) | Security	30	50
Available for Sale, Total, Fair Value	$ 16,088	$ 27,811
Available for Sale, Total, Unrealized Losses	195	586
Held to Maturity, Less Than 12 Months, Fair Value	0	1,764
Held to Maturity, Less Than 12 Months, Unrealized Losses	0	8
Held to Maturity, 12 Months or Longer, Fair Value	8,222	15,580
Held to Maturity, 12 Months or Longer, Unrealized Losses	$ 127	$ 320
Held to Maturity, Number of Securities (in shares) | Security	7	27
Held to Maturity, Total, Fair Value	$ 8,222	$ 17,344
Held to Maturity, Total, Unrealized Losses	127	328
Debt securities
Investment [Line Items]
Held to Maturity, Less Than 12 Months, Fair Value	3,930	3,882
Held to Maturity, Less Than 12 Months, Unrealized Losses	70	118
Held to Maturity, 12 Months or Longer, Fair Value	0	0
Held to Maturity, 12 Months or Longer, Unrealized Losses	$ 0	$ 0
Held to Maturity, Number of Securities (in shares) | Security	1	1
Held to Maturity, Total, Fair Value	$ 3,930	$ 3,882
Held to Maturity, Total, Unrealized Losses	$ 70	$ 118

XML

Loans and Other Real Estate - Composition of Company`s Loan and Lease Portfolio (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	$ 4,924,671	$ 4,460,447
Less: deferred fees	(3,280)	(3,714)
Loans, net of deferred fees	4,921,391	4,456,733
Commercial, secured by real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	3,436,550	3,057,779
Commercial, industrial and other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	389,230	336,735
Equipment finance
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	90,791	87,925
Real estate - residential mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	335,290	329,854
Real estate - construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	332,995	319,545
Home equity and consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	$ 339,815	$ 328,609

XML

Loans and Other Real Estate - Narrative (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Troubled debt restructurings included in non accrual loans	$ 2,800,000		$ 3,600,000
Unfunded lending reserve	2,300,000		2,300,000
Other real estate owned	700,000		830,000
Other repossessed assets owned	0		0
Financing receivable, modifications, subsequent default, recorded investment	0	$ 0
Residential Property
Accounts, Notes, Loans and Financing Receivable [Line Items]
Other real estate owned	600,000		702,000
Impaired Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Interest income on credit impaired loans	144,000	177,000
Interest accrued on impaired loans	268,000	$ 300,000
Highlands Bancorp, Inc.
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and debt securities acquired with deteriorated credit quality	13,700,000
Pascack Bancorp, Inc.
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and debt securities acquired with deteriorated credit quality	145,000		157,000
Harmony Bank
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and debt securities acquired with deteriorated credit quality	485,000
Federal Home Loan Bank of New York
Accounts, Notes, Loans and Financing Receivable [Line Items]
Residential loans pledged for potential borrowings at the Federal Home Loan Bank of New York	1,300,000,000		1,200,000,000
Home equity and consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Overdraft balances included in home equity and consumer loans	368,000		452,000
Residential Mortgages And Consumer Home Equity Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Mortgage loans that were in process of foreclosure	1,200,000		$ 1,500,000
Minimum
Accounts, Notes, Loans and Financing Receivable [Line Items]
Group of impaired loans with recorded investment	$ 500,000

XML

Loans and Other Real Estate - Schedule of Changes in Accretable Yield (Detail) - Loans Acquired with Deteriorated Credit Quality - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Balance, beginning of period	$ 81	$ 129
Acquisitions	1,420	0
Accretion	(193)	(44)
Net reclassification non-accretable difference	30	28
Balance, end of period	$ 1,338	$ 113

XML

Loans and Other Real Estate - Company's Non-Performing Assets and Its Accruing Troubled Debt Restructurings (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total non-accrual loans	$ 15,723	$ 12,130
Other real estate and other repossessed assets	715	830
TOTAL NON-PERFORMING ASSETS	16,438	12,960
Troubled debt restructurings, still accruing	6,352	9,293
Commercial, secured by real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total non-accrual loans	9,817	7,192
Commercial, industrial and other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total non-accrual loans	2,202	1,019
Equipment finance
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total non-accrual loans	383	501
Real estate - residential mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total non-accrual loans	1,740	1,986
Home equity and consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total non-accrual loans	$ 1,581	$ 1,432

XML

Loans and Other Real Estate - Age Analysis of Past Due Loans, Segregated by Class of Loans (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 35,031	$ 12,179
Current	4,889,640	4,448,268
Total Loans	4,924,671	4,460,447
Recorded Investment Greater than 89 Days and Still Accruing	78	0
Commercial, secured by real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	21,917	4,353
Current	3,414,633	3,053,426
Total Loans	3,436,550	3,057,779
Recorded Investment Greater than 89 Days and Still Accruing	0	0
Commercial, industrial and other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,681	1,166
Current	387,549	335,569
Total Loans	389,230	336,735
Recorded Investment Greater than 89 Days and Still Accruing	0	0
Equipment finance
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	951	1,047
Current	89,840	86,878
Total Loans	90,791	87,925
Recorded Investment Greater than 89 Days and Still Accruing	0	0
Real estate - residential mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	3,552	2,630
Current	331,738	327,224
Total Loans	335,290	329,854
Recorded Investment Greater than 89 Days and Still Accruing	0	0
Real estate - construction
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	3,423	0
Current	329,572	319,545
Total Loans	332,995	319,545
Recorded Investment Greater than 89 Days and Still Accruing	0	0
Home equity and consumer
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	3,507	2,983
Current	336,308	325,626
Total Loans	339,815	328,609
Recorded Investment Greater than 89 Days and Still Accruing	78	0
30-59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	20,637	4,843
30-59 Days Past Due | Commercial, secured by real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	14,944	1,477
30-59 Days Past Due | Commercial, industrial and other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,084	173
30-59 Days Past Due | Equipment finance
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	358	533
30-59 Days Past Due | Real estate - residential mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	2,406	743
30-59 Days Past Due | Real estate - construction
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
30-59 Days Past Due | Home equity and consumer
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,845	1,917
60-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	3,855	1,222
60-89 Days Past Due | Commercial, secured by real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	3,060	639
60-89 Days Past Due | Commercial, industrial and other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	220	243
60-89 Days Past Due | Equipment finance
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	210	13
60-89 Days Past Due | Real estate - residential mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	111
60-89 Days Past Due | Real estate - construction
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
60-89 Days Past Due | Home equity and consumer
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	365	216
Greater Than 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	10,539	6,114
Greater Than 89 Days Past Due | Commercial, secured by real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	3,913	2,237
Greater Than 89 Days Past Due | Commercial, industrial and other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	377	750
Greater Than 89 Days Past Due | Equipment finance
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	383	501
Greater Than 89 Days Past Due | Real estate - residential mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,146	1,776
Greater Than 89 Days Past Due | Real estate - construction
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	3,423	0
Greater Than 89 Days Past Due | Home equity and consumer
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 1,297	$ 850

XML

Loans and Other Real Estate - Impaired Loans with and without Specific Allowances (Detail) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Financing Receivable, Impaired [Line Items]
Recorded Investment in Impaired Loans	$ 20,236	$ 19,702
Contractual Unpaid Principal Balance	22,024	21,360
Related Allowance	259	338
Average Investment in Impaired Loans	18,603	20,012
Interest Income Recognized	144	592
Commercial, secured by real estate
Financing Receivable, Impaired [Line Items]
Loans without related allowance, Recorded Investment in Impaired Loans	12,188	9,284
Loans with related allowance, Recorded Investment in Impaired Loans	3,797	7,270
Recorded Investment in Impaired Loans	15,985	16,554
Loans without related allowance, Contractual Unpaid Principal Balance	12,883	9,829
Loans with related allowance, Contractual Unpaid Principal Balance	4,070	7,597
Contractual Unpaid Principal Balance	16,953	17,426
Related Allowance	229	307
Loans without related allowance, Average Investment in Impaired Loans	8,878	7,369
Loans with related allowance, Average Investment in Impaired Loans	6,642	7,594
Average Investment in Impaired Loans	15,520	14,963
Loans without related allowance, Interest Income Recognized	52	188
Loans with related allowance, Interest Income Recognized	72	317
Interest Income Recognized	124	505
Commercial, industrial and other
Financing Receivable, Impaired [Line Items]
Loans without related allowance, Recorded Investment in Impaired Loans	2,309	1,151
Loans with related allowance, Recorded Investment in Impaired Loans	200	209
Recorded Investment in Impaired Loans	2,509	1,360
Loans without related allowance, Contractual Unpaid Principal Balance	2,633	1,449
Loans with related allowance, Contractual Unpaid Principal Balance	199	209
Contractual Unpaid Principal Balance	2,832	1,658
Related Allowance	8	7
Loans without related allowance, Average Investment in Impaired Loans	1,142	1,834
Loans with related allowance, Average Investment in Impaired Loans	199	209
Average Investment in Impaired Loans	1,341	2,043
Loans without related allowance, Interest Income Recognized	4	19
Loans with related allowance, Interest Income Recognized	3	12
Interest Income Recognized	7	31
Equipment finance
Financing Receivable, Impaired [Line Items]
Loans without related allowance, Recorded Investment in Impaired Loans	301	301
Loans with related allowance, Recorded Investment in Impaired Loans	26	30
Recorded Investment in Impaired Loans	327	331
Loans without related allowance, Contractual Unpaid Principal Balance	597	597
Loans with related allowance, Contractual Unpaid Principal Balance	26	30
Contractual Unpaid Principal Balance	623	627
Related Allowance	12	14
Loans without related allowance, Average Investment in Impaired Loans	301	376
Loans with related allowance, Average Investment in Impaired Loans	26	19
Average Investment in Impaired Loans	327	395
Loans without related allowance, Interest Income Recognized	0	0
Loans with related allowance, Interest Income Recognized	0	0
Interest Income Recognized	0	0
Real estate - residential mortgage
Financing Receivable, Impaired [Line Items]
Loans without related allowance, Recorded Investment in Impaired Loans	0	0
Loans with related allowance, Recorded Investment in Impaired Loans	715	730
Recorded Investment in Impaired Loans	715	730
Loans without related allowance, Contractual Unpaid Principal Balance	0	0
Loans with related allowance, Contractual Unpaid Principal Balance	875	884
Contractual Unpaid Principal Balance	875	884
Related Allowance	4	4
Loans without related allowance, Average Investment in Impaired Loans	0	242
Loans with related allowance, Average Investment in Impaired Loans	718	745
Average Investment in Impaired Loans	718	987
Loans without related allowance, Interest Income Recognized	0	4
Loans with related allowance, Interest Income Recognized	5	20
Interest Income Recognized	5	24
Real estate - construction
Financing Receivable, Impaired [Line Items]
Loans without related allowance, Recorded Investment in Impaired Loans	0	0
Loans with related allowance, Recorded Investment in Impaired Loans	0	0
Recorded Investment in Impaired Loans	0	0
Loans without related allowance, Contractual Unpaid Principal Balance	0	0
Loans with related allowance, Contractual Unpaid Principal Balance	0	0
Contractual Unpaid Principal Balance	0	0
Related Allowance	0	0
Loans without related allowance, Average Investment in Impaired Loans	0	726
Loans with related allowance, Average Investment in Impaired Loans	0	0
Average Investment in Impaired Loans	0	726
Loans without related allowance, Interest Income Recognized	0	0
Loans with related allowance, Interest Income Recognized	0	0
Interest Income Recognized	0	0
Home equity and consumer
Financing Receivable, Impaired [Line Items]
Loans without related allowance, Recorded Investment in Impaired Loans	0	0
Loans with related allowance, Recorded Investment in Impaired Loans	700	727
Recorded Investment in Impaired Loans	700	727
Loans without related allowance, Contractual Unpaid Principal Balance	0	0
Loans with related allowance, Contractual Unpaid Principal Balance	741	765
Contractual Unpaid Principal Balance	741	765
Related Allowance	6	6
Loans without related allowance, Average Investment in Impaired Loans	0	0
Loans with related allowance, Average Investment in Impaired Loans	697	898
Average Investment in Impaired Loans	697	898
Loans without related allowance, Interest Income Recognized	0	0
Loans with related allowance, Interest Income Recognized	8	32
Interest Income Recognized	$ 8	$ 32

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Loans and Other Real Estate - Company's Commercial Loan Portfolio (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Financing Receivable, Recorded Investment [Line Items]
Total loans	$ 4,883,412	$ 4,419,045
Commercial, secured by real estate
Financing Receivable, Recorded Investment [Line Items]
Total loans	3,436,550	3,057,779
Commercial, secured by real estate | 1
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
Commercial, secured by real estate | 2
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
Commercial, secured by real estate | 3
Financing Receivable, Recorded Investment [Line Items]
Total loans	68,756	69,995
Commercial, secured by real estate | 4
Financing Receivable, Recorded Investment [Line Items]
Total loans	933,390	933,577
Commercial, secured by real estate | 5
Financing Receivable, Recorded Investment [Line Items]
Total loans	2,247,650	1,910,423
Commercial, secured by real estate | 5W - Watch
Financing Receivable, Recorded Investment [Line Items]
Total loans	89,295	61,626
Commercial, secured by real estate | 6 - Other assets especially mentioned
Financing Receivable, Recorded Investment [Line Items]
Total loans	46,466	38,844
Commercial, secured by real estate | 7 - Substandard
Financing Receivable, Recorded Investment [Line Items]
Total loans	50,993	43,314
Commercial, secured by real estate | 8 - Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
Commercial, secured by real estate | 9 - Loss
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
Commercial, industrial and other
Financing Receivable, Recorded Investment [Line Items]
Total loans	389,230	336,735
Commercial, industrial and other | 1
Financing Receivable, Recorded Investment [Line Items]
Total loans	2,450	1,119
Commercial, industrial and other | 2
Financing Receivable, Recorded Investment [Line Items]
Total loans	18,444	18,462
Commercial, industrial and other | 3
Financing Receivable, Recorded Investment [Line Items]
Total loans	36,739	36,367
Commercial, industrial and other | 4
Financing Receivable, Recorded Investment [Line Items]
Total loans	88,551	91,145
Commercial, industrial and other | 5
Financing Receivable, Recorded Investment [Line Items]
Total loans	205,999	168,474
Commercial, industrial and other | 5W - Watch
Financing Receivable, Recorded Investment [Line Items]
Total loans	19,381	7,798
Commercial, industrial and other | 6 - Other assets especially mentioned
Financing Receivable, Recorded Investment [Line Items]
Total loans	3,988	2,033
Commercial, industrial and other | 7 - Substandard
Financing Receivable, Recorded Investment [Line Items]
Total loans	13,678	11,337
Commercial, industrial and other | 8 - Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
Commercial, industrial and other | 9 - Loss
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
Real estate - construction
Financing Receivable, Recorded Investment [Line Items]
Total loans	332,995	319,545
Real estate - construction | 1
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
Real estate - construction | 2
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
Real estate - construction | 3
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
Real estate - construction | 4
Financing Receivable, Recorded Investment [Line Items]
Total loans	18,204	17,375
Real estate - construction | 5
Financing Receivable, Recorded Investment [Line Items]
Total loans	302,190	297,625
Real estate - construction | 5W - Watch
Financing Receivable, Recorded Investment [Line Items]
Total loans	5,873	3,493
Real estate - construction | 6 - Other assets especially mentioned
Financing Receivable, Recorded Investment [Line Items]
Total loans	2,267	0
Real estate - construction | 7 - Substandard
Financing Receivable, Recorded Investment [Line Items]
Total loans	4,461	1,052
Real estate - construction | 8 - Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	0
Real estate - construction | 9 - Loss
Financing Receivable, Recorded Investment [Line Items]
Total loans	$ 0	$ 0

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Loans and Other Real Estate - Activity in the Allowance for Loan and Lease Losses by Portfolio Segment (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	$ 37,688	$ 35,455
Charge-offs	516	1,250
Recoveries	299	155
Provision	508	1,284
Ending Balance	37,979	35,644
Commercial, secured by real estate
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	27,881	25,704
Charge-offs	(187)	(22)
Recoveries	115	31
Provision	(294)	104
Ending Balance	27,515	25,817
Commercial, industrial and other
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	1,742	2,313
Charge-offs	(147)	(1,012)
Recoveries	97	20
Provision	900	447
Ending Balance	2,592	1,768
Equipment finance
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	987	630
Charge-offs	(87)	(23)
Recoveries	2	2
Provision	45	433
Ending Balance	947	1,042
Real estate - residential mortgage
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	1,566	1,557
Charge-offs	(50)	(93)
Recoveries	9	2
Provision	39	123
Ending Balance	1,564	1,589
Real estate - construction
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	3,015	2,731
Charge-offs	0	0
Recoveries	5	5
Provision	(133)	196
Ending Balance	2,887	2,932
Home equity and consumer
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	2,497	2,520
Charge-offs	(45)	(100)
Recoveries	71	95
Provision	(49)	(19)
Ending Balance	$ 2,474	$ 2,496

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Loans and Other Real Estate - Allowance for Loan and Lease Losses by Portfolio Segment (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018	Dec. 31, 2017
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	$ 4,924,671	$ 4,460,447
Ending Balance: Individually evaluated for impairment, related allowance	259	338
Ending Balance	37,979	37,688	$ 35,644	$ 35,455
Loans and Leases
Financing Receivable, Recorded Investment, Past Due [Line Items]
Ending Balance: Individually evaluated for impairment	20,236	19,702
Ending Balance: Collectively evaluated for impairment	4,890,055	4,440,093
Ending Balance: Loans acquired with deteriorated credit quality	14,380	652
Total Loans	4,924,671	4,460,447
Ending Balance: Individually evaluated for impairment, related allowance	259	338
Ending Balance: Collectively evaluated for impairment, related allowance	37,720	37,350
Ending Balance	37,979	37,688
Commercial, secured by real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	3,436,550	3,057,779
Ending Balance: Individually evaluated for impairment, related allowance	229	307
Ending Balance	27,515	27,881	25,817	25,704
Commercial, secured by real estate | Loans and Leases
Financing Receivable, Recorded Investment, Past Due [Line Items]
Ending Balance: Individually evaluated for impairment	15,985	16,554
Ending Balance: Collectively evaluated for impairment	3,413,062	3,040,573
Ending Balance: Loans acquired with deteriorated credit quality	7,503	652
Total Loans	3,436,550	3,057,779
Ending Balance: Individually evaluated for impairment, related allowance	229	307
Ending Balance: Collectively evaluated for impairment, related allowance	27,286	27,574
Ending Balance	27,515	27,881
Commercial, industrial and other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	389,230	336,735
Ending Balance: Individually evaluated for impairment, related allowance	8	7
Ending Balance	2,592	1,742	1,768	2,313
Commercial, industrial and other | Loans and Leases
Financing Receivable, Recorded Investment, Past Due [Line Items]
Ending Balance: Individually evaluated for impairment	2,509	1,360
Ending Balance: Collectively evaluated for impairment	384,213	335,375
Ending Balance: Loans acquired with deteriorated credit quality	2,508	0
Total Loans	389,230	336,735
Ending Balance: Individually evaluated for impairment, related allowance	8	7
Ending Balance: Collectively evaluated for impairment, related allowance	2,584	1,735
Ending Balance	2,592	1,742
Equipment finance
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	90,791	87,925
Ending Balance: Individually evaluated for impairment, related allowance	12	14
Ending Balance	947	987	1,042	630
Equipment finance | Loans and Leases
Financing Receivable, Recorded Investment, Past Due [Line Items]
Ending Balance: Individually evaluated for impairment	327	331
Ending Balance: Collectively evaluated for impairment	90,464	87,594
Ending Balance: Loans acquired with deteriorated credit quality	0	0
Total Loans	90,791	87,925
Ending Balance: Individually evaluated for impairment, related allowance	12	14
Ending Balance: Collectively evaluated for impairment, related allowance	935	973
Ending Balance	947	987
Real estate - residential mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	335,290	329,854
Ending Balance: Individually evaluated for impairment, related allowance	4	4
Ending Balance	1,564	1,566	1,589	1,557
Real estate - residential mortgage | Loans and Leases
Financing Receivable, Recorded Investment, Past Due [Line Items]
Ending Balance: Individually evaluated for impairment	715	730
Ending Balance: Collectively evaluated for impairment	334,177	329,124
Ending Balance: Loans acquired with deteriorated credit quality	398	0
Total Loans	335,290	329,854
Ending Balance: Individually evaluated for impairment, related allowance	4	4
Ending Balance: Collectively evaluated for impairment, related allowance	1,560	1,562
Ending Balance	1,564	1,566
Real estate - construction
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	332,995	319,545
Ending Balance: Individually evaluated for impairment, related allowance	0	0
Ending Balance	2,887	3,015	2,932	2,731
Real estate - construction | Loans and Leases
Financing Receivable, Recorded Investment, Past Due [Line Items]
Ending Balance: Individually evaluated for impairment	0	0
Ending Balance: Collectively evaluated for impairment	329,566	319,545
Ending Balance: Loans acquired with deteriorated credit quality	3,429	0
Total Loans	332,995	319,545
Ending Balance: Individually evaluated for impairment, related allowance	0	0
Ending Balance: Collectively evaluated for impairment, related allowance	2,887	3,015
Ending Balance	2,887	3,015
Home equity and consumer
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	339,815	328,609
Ending Balance: Individually evaluated for impairment, related allowance	6	6
Ending Balance	2,474	2,497	$ 2,496	$ 2,520
Home equity and consumer | Loans and Leases
Financing Receivable, Recorded Investment, Past Due [Line Items]
Ending Balance: Individually evaluated for impairment	700	727
Ending Balance: Collectively evaluated for impairment	338,573	327,882
Ending Balance: Loans acquired with deteriorated credit quality	542	0
Total Loans	339,815	328,609
Ending Balance: Individually evaluated for impairment, related allowance	6	6
Ending Balance: Collectively evaluated for impairment, related allowance	2,468	2,491
Ending Balance	$ 2,474	$ 2,497

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Loans and Other Real Estate - Summary of Restructured Loans (Detail) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($) Contract	Mar. 31, 2018 USD ($) Contract
Financing Receivable, Modifications [Line Items]
Number of Contracts | Contract	0	2
Pre- Modification Outstanding Recorded Investment	$ 0	$ 1,657
Post- Modification Outstanding Recorded Investment	$ 0	$ 1,657
Commercial, secured by real estate
Financing Receivable, Modifications [Line Items]
Number of Contracts | Contract	0	2
Pre- Modification Outstanding Recorded Investment	$ 0	$ 1,657
Post- Modification Outstanding Recorded Investment	$ 0	$ 1,657

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Leases (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Jan. 01, 2019
Lessee, Lease, Description [Line Items]
Operating lease liabilities	$ 20,823,000		$ 20,203,000
Operating lease right-of-use assets	$ 19,239,000		18,651,000
Operating lease, weighted average remaining lease term	10 years 10 months 10 days
Lessee, operating lease, discount rate	3.49%
Operating lease, lease not yet commenced	$ 0
Accounting Standards Update 2016-02
Lessee, Lease, Description [Line Items]
Operating lease liabilities			20,200,000
Operating lease right-of-use assets			$ 18,700,000
Rent expense		$ 758,000
Related Parties Lease Transaction
Lessee, Lease, Description [Line Items]
Sale leaseback transaction	$ 0

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Leases - Schedule of Lease, Cost (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Leases [Abstract]
Operating lease cost	$ 820
Variable lease cost	35
Sublease Income	(31)
Total lease cost	$ 824

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Leases - Maturity analysis of operating lease liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Jan. 01, 2019
Leases [Abstract]
Within one year	$ 3,273
After one year but within two years	3,036
After two year but within three years	2,786
After three year but within four years	2,283
After four year but within five years	2,058
After 5 years	12,061
Total undiscounted cash flows	25,497
Discount on cash flows	(4,674)
Operating lease liabilities	$ 20,823	$ 20,203

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Leases - Other Information (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Leases [Abstract]
Operating cash flows from operating leases	$ 660
Right-of-use asset obtained in exchange for new operating lease liabilities	$ 765

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Derivatives - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2019 USD ($)	Mar. 31, 2018 USD ($)	Dec. 31, 2018 USD ($)	Jun. 30, 2016 USD ($) Derivative
Derivative [Line Items]
Available for sale securities pledged for collateral	$ 11,200,000		$ 498,000
Reclassification Out of Accumulated Other Comprehensive Income
Derivative [Line Items]
Estimated decrease in interest expense	$ 448,000
Cash Flow Hedging | Interest Rate Swaps
Derivative [Line Items]
Number of derivatives | Derivative				2
Notional amount				$ 30,000,000
Average interest rate				1.10%
Variable rate basis	3 month LIBOR
Amount of ineffective hedges	$ 0
Cash Flow Hedging | Interest Rate Swaps | Interest Expense
Derivative [Line Items]
Accumulated other comprehensive income (loss) reclassified	$ 124,000	$ 43,000

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Derivatives - Summary Information Regarding Derivatives (Detail) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
3rd Party interest rate swaps
Derivative [Line Items]
Other Assets, Notional Amount	$ 88,842	$ 153,909
Other Assets, Average Maturity (Years)	7 years 6 months	8 years 3 months 18 days
Other Assets, Wighted Average Fixed Rate	3.80%	4.10%
Other Assets, Weighted Average Variable Rate	1 Mo. LIBOR + 2.13%	1 Mo. LIBOR + 2.13%
Other Assets, Fair Value	$ 2,939	$ 5,329
Other Assets, Average Basis Spread On Variable Rate	2.13%	2.13%
Other Liabilities, Notional Amount	$ 253,922	$ 164,427
Other Liabilities, Average Maturity (Years)	10 years 10 months 2 days	12 years
Other Liabilities, Weighted Average Fixed Rate	4.83%	5.04%
Other Liabilities, Weighted Average Variable Rate	1 Mo. LIBOR + 2.04%	1 Mo. LIBOR + 2.05%
Other Liabilities, Fair Value	$ (11,411)	$ (5,707)
Other Liabilities, Average Basis Spread On Variable Rate	2.04%	2.05%
Customer interest rate swaps
Derivative [Line Items]
Other Assets, Notional Amount	$ 253,922	$ 164,427
Other Assets, Average Maturity (Years)	10 years 10 months 2 days	12 years
Other Assets, Wighted Average Fixed Rate	4.83%	5.04%
Other Assets, Weighted Average Variable Rate	1 Mo. LIBOR + 2.04%	1 Mo. LIBOR + 2.05%
Other Assets, Fair Value	$ 11,411	$ 5,707
Other Assets, Average Basis Spread On Variable Rate	2.04%	2.05%
Other Liabilities, Notional Amount	$ 88,842	$ 153,909
Other Liabilities, Average Maturity (Years)	7 years 6 months	8 years 3 months 18 days
Other Liabilities, Weighted Average Fixed Rate	3.80%	4.10%
Other Liabilities, Weighted Average Variable Rate	1 Mo. LIBOR + 2.13%	1 Mo. LIBOR + 2.13%
Other Liabilities, Fair Value	$ (2,939)	$ (5,329)
Other Liabilities, Average Basis Spread On Variable Rate	2.13%	2.13%
Interest rate swap (cash flow hedge)
Derivative [Line Items]
Other Assets, Notional Amount	$ 30,000	$ 30,000
Other Assets, Average Maturity (Years)	2 years 3 months	2 years 6 months
Other Assets, Wighted Average Fixed Rate	1.10%	1.10%
Other Assets, Weighted Average Variable Rate	3 Mo. LIBOR	3 Mo. LIBOR
Other Assets, Fair Value	$ 828	$ 1,099

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Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Jan. 04, 2019	Dec. 31, 2018
Goodwill And Intangible Assets [Line Items]
Goodwill	$ 154,153		$ 136,433
Core Deposits
Goodwill And Intangible Assets [Line Items]
Core deposit intangible	$ 5,200		$ 1,800
Highlands Bancorp, Inc.
Goodwill And Intangible Assets [Line Items]
Goodwill		$ 17,720
Identifiable intangible assets		$ 3,728

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Goodwill and Intangible Assets - Schedule of Estimated Future Amortization Expense (Detail) $ in Thousands	Mar. 31, 2019 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2019	$ 878
2020	1,025
2021	868
2022	711
2023	554
2024	$ 425

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Borrowings - Additional Information (Detail) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Federal funds purchased	$ 220.0	$ 192.1
Securities sold under agreements to repurchase	41.3	$ 41.8
Securities Sold under Agreements to Repurchase
Debt Instrument [Line Items]
Pledged securities	$ 56.2

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Share-Based Compensation - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 696,000	$ 994,000
Granted, Number of shares (in shares)	0	0
Stock options exercised (in shares)	0
Aggregate intrinsic value of stock options exercised	$ 0	$ 297,000
Cash receipts due to exercise of stock options	$ 0	248,000
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in usd per share)	$ 15.96
Granted (in shares)	13,052
Restricted Stock | 2009 Equity Compensation Program
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 55,000	$ 56,000
Unrecognized compensation cost	$ 156,000
Unrecognized compensation expense, period of recognition	9 months 18 days
Restricted Stock | 2009 Equity Compensation Program | Non-Employee Directors
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted (in shares)		10,945
Granted (in usd per share)	$ 15.96	$ 20.55
Share-based compensation expense	$ 208,000	$ 225,000
Vesting period	1 year	1 year
Restricted Stock | 2018 Omnibus Equity Incentive Plan | Non-Employee Directors
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted (in shares)	13,052
RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in usd per share)	$ 16.66
Granted (in shares)	127,559
RSUs | 2009 Equity Compensation Program
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense		$ 900,000
Unrecognized compensation cost	$ 3,900,000
Unrecognized compensation expense, period of recognition	1 year 9 months 12 days
Granted (in usd per share)	$ 16.66	$ 19.11
Share-based compensation expense	$ 708,000	$ 932,000
Vesting period	3 years	3 years
Granted (in shares)		146,233
RSUs | 2009 Equity Compensation Program | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	2 years
RSUs | 2009 Equity Compensation Program | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
RSUs | 2018 Omnibus Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 600,000
Granted (in shares)	127,559
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options exercised (in shares)	0	26,250
Stock Options | 2009 Equity Compensation Program
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost	$ 0

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Share-Based Compensation - Summary of Company's Restricted Stock Activity (Detail)	3 Months Ended
	Mar. 31, 2019 $ / shares shares
Restricted Stock
Number of Shares
Balance at beginning of period (in shares) | shares	11,701
Granted (in shares) | shares	13,052
Vested (in shares) | shares	(11,643)
Forfeited (in shares) | shares	0
Balance at end of period (in shares) | shares	13,110
Weighted Average Price
Balance at beginning of period (in usd per share) | $ / shares	$ 20.18
Granted (in usd per share) | $ / shares	15.96
Vested (in usd per share) | $ / shares	20.24
Forfeited (in usd per share) | $ / shares	0.00
Balance of end of period (in usd per share) | $ / shares	$ 15.93
RSUs
Number of Shares
Balance at beginning of period (in shares) | shares	299,347
Granted (in shares) | shares	127,559
Vested (in shares) | shares	(83,396)
Forfeited (in shares) | shares	(2,717)
Balance at end of period (in shares) | shares	340,793
Weighted Average Price
Balance at beginning of period (in usd per share) | $ / shares	$ 16.60
Granted (in usd per share) | $ / shares	16.66
Vested (in usd per share) | $ / shares	12.53
Forfeited (in usd per share) | $ / shares	17.38
Balance of end of period (in usd per share) | $ / shares	$ 17.61

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Share-Based Compensation - Option Activity under the Company's Stock Option Plans (Detail) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Number of Shares
Outstanding, Number of shares, Beginning balance (in shares)	67,488
Granted, Number of shares (in shares)	0	0
Exercised, Number of shares (in shares)	0
Forfeited, Number of shares (in shares)	0
Expired, Number of shares (in shares)	0
Outstanding, Number of shares, Ending balance (in shares)	67,488		67,488
Options exercisable, Number of shares, Ending balance (in shares)	67,488
Weighted Average Exercise Price
Outstanding, Weighted average exercise price, Beginning balance (in usd per share)	$ 8.28
Granted, Weighted average exercise price (in usd per share)	0.00
Exercised, Weighted average exercise price (in usd per share)	0.00
Forfeited, Weighted average exercise price (in usd per share)	0.00
Expired, Weighted average exercise price (in usd per share)	0.00
Outstanding, Weighted average exercise price, Ending balance (in usd per share)	8.28		$ 8.28
Options exercisable, Weighted average exercise price, Ending balance (in usd per share)	$ 8.28
Weighted Average Remaining Contractual Term (in years)
Outstanding, Average remaining contractual term (in years)	2 years 7 months 10 days		2 years 10 months 10 days
Options exercisable, Average remaining contractual term (in years)	2 years 7 months 10 days
Aggregate Intrinsic Value
Outstanding, Aggregate intrinsic value	$ 448,581		$ 440,483
Options exercisable at year end, Aggregate intrinsic value	$ 448,581

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Comprehensive Income - Components of Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Before Tax Amount
Other comprehensive loss, net	$ 5,838	$ (7,144)
Tax Benefit (Expense)
Other comprehensive loss, net	(1,689)	1,695
Net of Tax Amount
Other comprehensive income (loss)	4,149	(5,449)
Net unrealized gains (losses) on available for sale securities:
Before Tax Amount
Net unrealized holding (losses) gains arising during period	6,109	(7,502)
Reclassification adjustment for net gains arising during the period	0	0
Other comprehensive loss, net	6,109	(7,502)
Tax Benefit (Expense)
Net unrealized holding (losses) gains arising during period	(1,746)	1,770
Reclassification adjustment for net gains arising during the period	0	0
Other comprehensive loss, net	(1,746)	1,770
Net of Tax Amount
Net unrealized holding (losses) gains arising during period	4,363	(5,732)
Reclassification adjustment for net gains arising during the period	0	0
Other comprehensive income (loss)	4,363	(5,732)
Unrealized gains on derivatives
Before Tax Amount
Other comprehensive loss, net	(271)	358
Tax Benefit (Expense)
Other comprehensive loss, net	57	(75)
Net of Tax Amount
Other comprehensive income (loss)	$ (214)	$ 283

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Comprehensive Income - Summary of Changes in Components of Other Comprehensive Income, Net of Tax (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Jan. 01, 2019	Dec. 31, 2018	Jan. 01, 2018	Dec. 31, 2017
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Balance at beginning of period	$ 623,739	$ 583,122
Cumulative adjustment for adoption of ASU 2016-01			$ 125
Adjusted equity balance			623,864		$ 583,122
Net current period other comprehensive (loss) income	4,149	(5,449)
Balance at end of period	681,343	588,648
Unrealized Losses on Available for Sale Securities
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Balance at beginning of period	(8,782)	(3,232)
Cumulative adjustment for adoption of ASU 2016-01				$ 0		$ (2,043)
Adjusted equity balance				(8,782)		(5,275)
Net current period other comprehensive (loss) income	4,363	(5,732)
Balance at end of period	(4,419)	(11,007)
Unrealized Gains on Derivatives
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Balance at beginning of period	903	862
Cumulative adjustment for adoption of ASU 2016-01				0		0
Adjusted equity balance				903		862
Net current period other comprehensive (loss) income	(214)	283
Balance at end of period	689	1,145
Pension Items
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Balance at beginning of period	41	21
Cumulative adjustment for adoption of ASU 2016-01				0		0
Adjusted equity balance				41		21
Net current period other comprehensive (loss) income	0	0
Balance at end of period	41	21
Accumulated Other Comprehensive Income (Loss)
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Balance at beginning of period	(7,838)	(2,349)
Cumulative adjustment for adoption of ASU 2016-01				0	(2,043)	(2,043)
Adjusted equity balance			$ (7,838)	$ (7,838)	$ (4,392)	$ (4,392)
Balance at end of period	$ (3,689)	$ (9,841)

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Estimated Fair Value of Financial Instruments and Fair Value Measurement - Fair Value of Financial Assets and Liabilities Measured on Recurring Basis (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Assets:
Investment securities available for sale, at fair value	$ 659,238	$ 638,618
Equity securities, at fair value	15,232	15,921
Fair Value, Measurements, Recurring
Assets:
Investment securities available for sale, at fair value	659,238	638,618
Equity securities, at fair value	15,232	15,921
Derivative assets	15,178	12,135
Total Assets	689,648	666,674
Liabilities:
Derivative liabilities	14,350	11,036
Total Liabilities	14,350	11,036
Fair Value, Measurements, Recurring | U.S. Treasury and U.S. government agencies
Assets:
Investment securities available for sale, at fair value	139,581	140,927
Fair Value, Measurements, Recurring | Mortgage-backed securities
Assets:
Investment securities available for sale, at fair value	469,636	447,094
Fair Value, Measurements, Recurring | Obligations of states and political subdivisions
Assets:
Investment securities available for sale, at fair value	45,017	45,505
Fair Value, Measurements, Recurring | Other debt securities
Assets:
Investment securities available for sale, at fair value	5,004	5,092
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Measurements, Recurring
Assets:
Investment securities available for sale, at fair value	16,293	4,920
Equity securities, at fair value	1,864	2,731
Derivative assets	0	0
Total Assets	18,157	7,651
Liabilities:
Derivative liabilities	0	0
Total Liabilities	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Measurements, Recurring | U.S. Treasury and U.S. government agencies
Assets:
Investment securities available for sale, at fair value	16,293	4,920
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Measurements, Recurring | Mortgage-backed securities
Assets:
Investment securities available for sale, at fair value	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Measurements, Recurring | Obligations of states and political subdivisions
Assets:
Investment securities available for sale, at fair value	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Measurements, Recurring | Other debt securities
Assets:
Investment securities available for sale, at fair value	0	0
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring
Assets:
Investment securities available for sale, at fair value	642,945	633,698
Equity securities, at fair value	13,368	13,190
Derivative assets	15,178	12,135
Total Assets	671,491	659,023
Liabilities:
Derivative liabilities	14,350	11,036
Total Liabilities	14,350	11,036
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | U.S. Treasury and U.S. government agencies
Assets:
Investment securities available for sale, at fair value	123,288	136,007
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | Mortgage-backed securities
Assets:
Investment securities available for sale, at fair value	469,636	447,094
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | Obligations of states and political subdivisions
Assets:
Investment securities available for sale, at fair value	45,017	45,505
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | Other debt securities
Assets:
Investment securities available for sale, at fair value	5,004	5,092
Significant Unobservable Inputs (Level 3) | Fair Value, Measurements, Recurring
Assets:
Investment securities available for sale, at fair value	0	0
Equity securities, at fair value	0	0
Derivative assets	0	0
Total Assets	0	0
Liabilities:
Derivative liabilities	0	0
Total Liabilities	0	0
Significant Unobservable Inputs (Level 3) | Fair Value, Measurements, Recurring | U.S. Treasury and U.S. government agencies
Assets:
Investment securities available for sale, at fair value	0	0
Significant Unobservable Inputs (Level 3) | Fair Value, Measurements, Recurring | Mortgage-backed securities
Assets:
Investment securities available for sale, at fair value	0	0
Significant Unobservable Inputs (Level 3) | Fair Value, Measurements, Recurring | Obligations of states and political subdivisions
Assets:
Investment securities available for sale, at fair value	0	0
Significant Unobservable Inputs (Level 3) | Fair Value, Measurements, Recurring | Other debt securities
Assets:
Investment securities available for sale, at fair value	$ 0	$ 0

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Estimated Fair Value of Financial Instruments and Fair Value Measurement - Fair Value of Assets Measured on Non-recurring Basis (Detail) - Fair Value, Measurements, Non-recurring - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Assets:
Impaired loans	$ 20,236	$ 19,702
Loans held for sale	600	1,113
Other real estate owned and other repossessed assets	715	830
(Level 1)
Assets:
Impaired loans	0	0
Loans held for sale	0	0
Other real estate owned and other repossessed assets	0	0
(Level 2)
Assets:
Impaired loans	0	0
Loans held for sale	600	1,113
Other real estate owned and other repossessed assets	0	0
(Level 3)
Assets:
Impaired loans	20,236	19,702
Loans held for sale	0	0
Other real estate owned and other repossessed assets	$ 715	$ 830

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Estimated Fair Value of Financial Instruments and Fair Value Measurement - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Subordinate debt	$ 118,193	$ 105,027
Non-rated
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term municipal bond	5,000
Subordinate debt	$ 2,500
Minimum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rates	5.00%
Capitalization rates	4.00%
Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rates	11.00%
Capitalization rates	9.00%

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Estimated Fair Value of Financial Instruments and Fair Value Measurement- Carrying Values and Fair Values of Company's Financial Instruments (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Financial Assets:
Investment securities held to maturity; fair value of $158,219 at March 31, 2019 and $150,932 at December 31, 2018	$ 159,308	$ 153,646
Investment securities held to maturity, Fair Value	158,219	150,932
Federal Home Loan Bank and other membership bank stocks, Carrying Value	16,951	13,301
Federal Home Loan Bank and other membership bank stocks, Fair Value	16,951	13,301
Loans and leases, net Carrying Value	4,883,412	4,419,045
Loans and leases, net Fair Value	4,899,288	4,341,477
Financial Liabilities:
Certificates of deposit, Carrying value	946,372	757,038
Certificates of deposit, Fair Value	942,283	750,801
Other borrowings, Carrying value	175,783	181,118
Other borrowings, Fair Value	174,569	176,921
Subordinated debentures, Carrying Value	118,193	105,027
Subordinated debentures, Fair Value	115,462	102,497
Quoted Prices in Active Markets for Identical Assets (Level 1)
Financial Assets:
Investment securities held to maturity, Fair Value	0	0
Federal Home Loan Bank and other membership bank stocks, Fair Value	0	0
Loans and leases, net Fair Value	0	0
Financial Liabilities:
Certificates of deposit, Fair Value	0	0
Other borrowings, Fair Value	0	0
Subordinated debentures, Fair Value	0	0
Significant Other Observable Inputs (Level 2)
Financial Assets:
Investment securities held to maturity, Fair Value	150,700	143,913
Federal Home Loan Bank and other membership bank stocks, Fair Value	16,951	13,301
Loans and leases, net Fair Value	0	0
Financial Liabilities:
Certificates of deposit, Fair Value	942,283	750,801
Other borrowings, Fair Value	174,569	176,921
Subordinated debentures, Fair Value	0	0
Significant Unobservable Inputs (Level 3)
Financial Assets:
Investment securities held to maturity, Fair Value	7,519	7,019
Federal Home Loan Bank and other membership bank stocks, Fair Value	0	0
Loans and leases, net Fair Value	4,899,288	4,341,477
Financial Liabilities:
Certificates of deposit, Fair Value	0	0
Other borrowings, Fair Value	0	0
Subordinated debentures, Fair Value	$ 115,462	$ 102,497

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Recent Accounting Pronouncements - Additional Information (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Jan. 01, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease right-of-use assets	$ 19,239	$ 18,651
Operating lease liabilities	$ 20,823	20,203
Cumulative adjustment for adoption of ASU 2016-01		125
Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease right-of-use assets		18,700
Operating lease liabilities		$ 20,200

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Label	Element	Value
Retained Earnings [Member]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance	us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1	$ 74,780,000
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance	us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1	116,999,000
Common Stock [Member]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance	us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1	512,734,000
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance	us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1	$ 514,703,000