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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark one)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended | | March 31, 2022 |
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☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number | 000-17820 | |
LAKELAND BANCORP, INC.
(Exact name of registrant as specified in its charter)
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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 and zip code)
(973) 697-2000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class | Trading Symbol | Name of exchange on which registered |
Common Stock, no par value | LBAI | The NASDAQ Stock Market |
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 ☒ 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 ☒ 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 ☒ 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 ☒
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 3, 2022, there were 64,779,728 outstanding shares of Common Stock, no par value.
LAKELAND BANCORP, INC.
Form 10-Q Index
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| Consolidated Statements of Income for the Three Months Ended March 31, 2022 and 2021 (unaudited) | |
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Item 5. | Other Information | |
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Lakeland Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets
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| March 31, 2022 | | December 31, 2021 |
(dollars in thousands) | (unaudited) | |
| | | |
Assets | | | |
Cash | $ | 384,490 | | | $ | 199,158 | |
Interest-bearing deposits due from banks | 37,179 | | | 29,372 | |
Total cash and cash equivalents | 421,669 | | | 228,530 | |
Investment securities available for sale, at fair value (allowance for credit losses of $1,267 at March 31, 2022 and $83 at December 31, 2021) | 1,170,938 | | | 769,956 | |
Investment securities held to maturity (fair value of $859,928 at March 31, 2022 and $815,211 at December 31, 2021 and allowance for credit losses of $199 at March 31, 2022 and $181 at December 31, 2021) | 940,786 | | | 824,956 | |
Equity securities, at fair value | 16,915 | | | 17,368 | |
Federal Home Loan Bank and other membership bank stock, at cost | 10,415 | | | 9,049 | |
Loans held for sale | 1,906 | | | 1,943 | |
Loans, net of deferred fees | 7,137,793 | | | 5,976,148 | |
Less: Allowance for credit losses | 67,112 | | | 58,047 | |
Total loans, net | 7,070,681 | | | 5,918,101 | |
Premises and equipment, net | 58,591 | | | 45,916 | |
Operating lease right-of-use assets | 27,281 | | | 15,222 | |
Accrued interest receivable | 24,999 | | | 19,209 | |
Goodwill | 271,829 | | | 156,277 | |
Other intangible assets | 10,842 | | | 2,420 | |
Bank owned life insurance | 155,700 | | | 117,356 | |
Other assets | 92,681 | | | 71,753 | |
Total Assets | $ | 10,275,233 | | | $ | 8,198,056 | |
Liabilities and Stockholders' Equity | | | |
Liabilities | | | |
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Deposits | 8,748,909 | | | 6,965,823 | |
Federal funds purchased and securities sold under agreements to repurchase | 102,911 | | | 106,453 | |
Other borrowings | 25,000 | | | 25,000 | |
Subordinated debentures | 193,904 | | | 179,043 | |
Operating lease liabilities | 28,694 | | | 16,523 | |
Other liabilities | 86,533 | | | 78,200 | |
Total Liabilities | 9,185,951 | | | 7,371,042 | |
Stockholders' Equity | | | |
Common stock, no par value; authorized 100,000,000 shares; issued 64,910,643 shares and outstanding 64,779,608 shares at March 31, 2022 and issued 50,737,400 shares and outstanding 50,606,365 shares at December 31, 2021 | 852,110 | | | 565,862 | |
Retained earnings | 266,460 | | | 259,340 | |
Treasury shares, at cost, 131,035 shares at March 31, 2022 and December 31, 2021 | (1,452) | | | (1,452) | |
Accumulated other comprehensive income | (27,836) | | | 3,264 | |
Total Stockholders' Equity | 1,089,282 | | | 827,014 | |
Total Liabilities and Stockholders' Equity | $ | 10,275,233 | | | $ | 8,198,056 | |
The accompanying notes are an integral part of these consolidated financial statements.
Lakeland Bancorp, Inc. and Subsidiaries
Consolidated Statements of Income (Unaudited)
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| | For the Three Months Ended March 31, | | |
(in thousands, except per share data) | | 2022 | | 2021 | | | | |
Interest Income | | | | | | | | |
Loans and fees | | $ | 67,809 | | | $ | 58,778 | | | | | |
Federal funds sold and interest-bearing deposits with banks | | 182 | | | 37 | | | | | |
Taxable investment securities and other | | 6,709 | | | 3,981 | | | | | |
Tax-exempt investment securities | | 1,302 | | | 612 | | | | | |
Total Interest Income | | 76,002 | | | 63,408 | | | | | |
Interest Expense | | | | | | | | |
Deposits | | 4,039 | | | 5,124 | | | | | |
Federal funds purchased and securities sold under agreements to repurchase | | 20 | | | 23 | | | | | |
Other borrowings | | 1,555 | | | 1,533 | | | | | |
Total Interest Expense | | 5,614 | | | 6,680 | | | | | |
Net Interest Income | | 70,388 | | | 56,728 | | | | | |
Provision (benefit) for credit losses | | 6,272 | | | (2,642) | | | | | |
Net Interest Income after Provision (Benefit) for Credit Losses | | 64,116 | | | 59,370 | | | | | |
Noninterest Income | | | | | | | | |
Service charges on deposit accounts | | 2,626 | | | 2,296 | | | | | |
Commissions and fees | | 2,106 | | | 1,598 | | | | | |
Income on bank owned life insurance | | 830 | | | 634 | | | | | |
Loss on equity securities | | (485) | | | (144) | | | | | |
Gains on sales of loans held for sale | | 1,426 | | | 708 | | | | | |
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Swap income | | — | | | 562 | | | | |
Other income | | 277 | | | 105 | | | | | |
Total Noninterest Income | | 6,780 | | | 5,759 | | | | | |
Noninterest Expense | | | | | | | | |
Compensation and employee benefits | | 27,679 | | | 20,518 | | | | | |
Premises and equipment | | 7,972 | | | 6,318 | | | | | |
FDIC insurance expense | | 672 | | | 711 | | | | | |
Data processing expense | | 1,670 | | | 1,255 | | | | | |
Merger related expenses | | 4,585 | | | — | | | | | |
Other expenses | | 7,381 | | | 5,101 | | | | | |
Total Noninterest Expense | | 49,959 | | | 33,903 | | | | | |
Income before provision for income taxes | | 20,937 | | | 31,226 | | | | | |
Provision for income taxes | | 5,008 | | | 8,051 | | | | | |
Net Income | | $ | 15,929 | | | $ | 23,175 | | | | | |
Per Share of Common Stock | | | | | | |
Basic earnings | | $ | 0.25 | | | $ | 0.45 | | | | | |
Diluted earnings | | $ | 0.25 | | | $ | 0.45 | | | | | |
Dividends paid | | $ | 0.135 | | | $ | 0.125 | | | | | |
The accompanying notes are an integral part of these consolidated financial statements.
Lakeland Bancorp, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income (Unaudited)
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| | For the Three Months Ended March 31, | | |
(in thousands) | | 2022 | | 2021 | | | | |
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Net Income | | $ | 15,929 | | | $ | 23,175 | | | | | |
Other comprehensive income (loss), net of tax: | | | | | | | | |
Unrealized losses on securities available for sale | | (30,965) | | | (13,135) | | | | | |
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Amortization of gain on debt securities reclassified to held to maturity | | (135) | | | — | | | | | |
Unrealized gains on derivatives | | — | | | 47 | | | | | |
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Other comprehensive loss | | (31,100) | | | (13,088) | | | | | |
Total Comprehensive (Loss) Income | | $ | (15,171) | | | $ | 10,087 | | | | | |
The accompanying notes are an integral part of these consolidated financial statements.
Lakeland Bancorp, Inc. and Subsidiaries
Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)
For the Three Months Ended March 31, 2022 and 2021
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(in thousands, except per share data) | Common Stock | | Retained Earnings | | Treasury Stock | | Accumulated Other Comprehensive Income (Loss) | | Total |
| |
January 1, 2021 | $ | 562,421 | | | $ | 191,418 | | | $ | (1,452) | | | $ | 11,397 | | | $ | 763,784 | |
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Net income | — | | | 23,175 | | | — | | | — | | | 23,175 | |
Other comprehensive loss, net of tax | — | | | — | | | — | | | (13,088) | | | (13,088) | |
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Stock based compensation | 1,206 | | | — | | | — | | | — | | | 1,206 | |
Retirement of restricted stock | (656) | | | — | | | — | | | — | | | (656) | |
Exercise of stock options | 13 | | | — | | | — | | | — | | | 13 | |
Cash dividends on common stock of $0.125 per share | — | | | (6,369) | | | — | | | — | | | (6,369) | |
March 31, 2021 | 562,984 | | | 208,224 | | | (1,452) | | | (1,691) | | | 768,065 | |
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January 1, 2022 | $ | 565,862 | | | $ | 259,340 | | | $ | (1,452) | | | $ | 3,264 | | | $ | 827,014 | |
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Net income | — | | | 15,929 | | | — | | | — | | | 15,929 | |
Other comprehensive loss, net of tax | — | | | — | | | — | | | (31,100) | | | (31,100) | |
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Issuance of stock for 1st Constitution acquisition | 285,742 | | | — | | | — | | | — | | | 285,742 | |
Stock based compensation | 1,439 | | | — | | | — | | | — | | | 1,439 | |
Retirement of restricted stock | (933) | | | — | | | — | | | — | | | (933) | |
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Cash dividends on common stock of $0.135 per share | — | | | (8,809) | | | — | | | — | | | (8,809) | |
March 31, 2022 | $ | 852,110 | | | $ | 266,460 | | | $ | (1,452) | | | $ | (27,836) | | | $ | 1,089,282 | |
The accompanying notes are an integral part of these consolidated financial statements.
Lakeland Bancorp, Inc. and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
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| For the Three Months Ended March 31, |
(in thousands) | 2022 | | 2021 |
Cash Flows from Operating Activities: | | | |
Net income | $ | 15,929 | | | $ | 23,175 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | |
Net amortization of premiums, discounts and deferred loan fees and costs | 1,271 | | | (1,497) | |
Depreciation and amortization | 1,665 | | | 1,040 | |
Amortization of intangible assets | 596 | | | 226 | |
Amortization of operating lease right-of-use assets | 1,021 | | | 682 | |
Provision (benefit) for credit losses | 6,272 | | | (2,642) | |
Loans originated for sale | (25,379) | | | (16,905) | |
Proceeds from sales of loans held for sale | 31,462 | | | 17,718 | |
| | | |
Loss on equity securities | 485 | | | 144 | |
Income on bank owned life insurance | (777) | | | (634) | |
Gains on proceeds from bank owned life insurance policies | (53) | | | — | |
Gains on sales of loans held for sale | (1,426) | | | (708) | |
Gains on other real estate and other repossessed assets | (8) | | | — | |
Loss on sales of premises and equipment | 3 | | | — | |
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Stock-based compensation | 1,439 | | | 1,206 | |
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Excess tax deficiencies (benefits) | 79 | | | (88) | |
(Increase) decrease in other assets | (1,860) | | | 26,971 | |
Decrease in other liabilities | (1,379) | | | (18,687) | |
Net Cash Provided by Operating Activities | 29,340 | | | 30,001 | |
Cash Flows from Investing Activities: | | | |
Net cash acquired in acquisitions | 326,236 | | | — | |
Proceeds from repayments and maturities of available for sale securities | 41,454 | | | 55,314 | |
Proceeds from repayments and maturities of held to maturity securities | 42,432 | | | 9,561 | |
| | | |
| | | |
Purchase of available for sale securities | (269,070) | | | (188,321) | |
Purchase of held to maturity securities | (35,648) | | | (3,968) | |
Purchase of equity securities | (32) | | | (40) | |
| | | |
Death benefit proceeds from bank owned life insurance policy | 95 | | | — | |
Proceeds from redemptions of Federal Home Loan Bank stock | — | | | 11,251 | |
Purchases of Federal Home Loan Bank stock | (119) | | | (10,044) | |
Net increase in loans | (60,109) | | | (94,975) | |
Proceeds from sales of loans previously held for investment | — | | | 10,078 | |
Proceeds from sales of other real estate and repossessed assets | 8 | | | — | |
Proceeds from dispositions and sales of premises and equipment | 123 | | | — | |
Purchases of premises and equipment | (944) | | | (1,714) | |
Net Cash Provided by (Used in) Investing Activities | 44,426 | | | (212,858) | |
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Cash Flows from Financing Activities: | | | |
Net increase in deposits | 132,657 | | | 179,458 | |
Decrease in federal funds purchased and securities sold under agreements to repurchase | (3,542) | | | (57,561) | |
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Exercise of stock options | — | | | 13 | |
Retirement of restricted stock | (933) | | | (656) | |
Dividends paid | (8,809) | | | (6,369) | |
Net Cash Provided by Financing Activities | 119,373 | | | 114,885 | |
Net increase (decrease) in cash and cash equivalents | 193,139 | | | (67,972) | |
Cash and cash equivalents, beginning of period | 228,530 | | | 270,090 | |
Cash and cash equivalents, end of period | $ | 421,669 | | | $ | 202,118 | |
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| For the Three Months Ended March 31, |
(in thousands) | 2022 | | 2021 |
Supplemental schedule of non-cash investing and financing activities: | | | |
Cash paid during the period for income taxes | $ | 5,619 | | | $ | 9,035 | |
Cash paid during the period for interest | 6,969 | | | 8,273 | |
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Transfer of loans to loans held for sale | — | | | 10,078 | |
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Right-of-use assets obtained in exchange for new lease liabilities | 89 | | | 109 | |
Acquisitions: | | | |
Non-cash assets acquired: | | | |
Federal Home Loan Bank stock | 1,247 | | | — | |
Investment securities available for sale | 217,774 | | | — | |
Investment securities held to maturity | 124,485 | | | — | |
Loans held for sale | 4,620 | | | — | |
Loans | 1,095,266 | | | — | |
Fixed Assets | 13,748 | | | — | |
Operating lease right-of-use assets | 12,991 | | | — | |
Goodwill and other intangible assets, net | 124,570 | | | — | |
Bank owned life insurance | 37,580 | | | — | |
Other assets | 8,820 | | | — | |
Total non-cash assets acquired | 1,641,101 | | | — | |
Liabilities assumed: | | | |
Deposits | 1,650,613 | | | — | |
Subordinated debt | 14,734 | | | — | |
Operating lease liabilities | 12,991 | | | — | |
Other liabilities | 3,257 | | | — | |
Total liabilities assumed | 1,681,595 | | | — | |
Common stock issued | $ | 285,742 | | | $ | — | |
The accompanying notes are an integral part of these consolidated financial statements.
Lakeland Bancorp, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
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 Lakeland’s wholly owned subsidiaries (collectively, the “Company”). The accounting and reporting policies of the Company conform with U.S. generally accepted accounting principles (“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, 2022 do not necessarily indicate the results that the Company will achieve for all of 2022.
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, 2021. Certain reclassifications have been made in the consolidated financial statements to conform with current year classifications.
Note 2 – Acquisitions
On January 6, 2022, the Company completed its acquisition of 1st Constitution Bancorp ("1st Constitution"), a bank holding company headquartered in Cranbury, New Jersey. 1st Constitution was the parent of 1st Constitution Bank, which operated 25 branches in Bergen, Mercer, Middlesex, Monmouth, Ocean and Somerset Counties in New Jersey. This acquisition enabled the Company to establish a presence in Mercer, Middlesex and Monmouth Counties and broaden its presence in the other counties. Effective as of the close of business on January 6, 2022, 1st Constitution merged into the Company and 1st Constitution Bank merged into Lakeland. Pursuant to the merger agreement, the shareholders of 1st Constitution received for each outstanding share of 1st Constitution common stock that they owned at the effective time of the merger, 1.3577 shares of Lakeland Bancorp, Inc. common stock. The Company issued 14,020,495 shares of its common stock in the merger. Outstanding 1st Constitution stock options were paid out in cash at the difference between $25.55 and an average strike price of $15.95 for a total cash payment of $559,000.
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. 1st Constitution's assets were recorded at their preliminary estimated fair values as of January 6, 2022 and 1st Constitution's results of operations have been 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 calculation of goodwill is subject to change for up to one year after the closing date of the transaction as additional information relative to closing date estimates and uncertainties becomes available. As the Company finalizes its analysis of these assets and liabilities, there may be adjustments to the recorded carrying values. The Goodwill is not deductible for tax purposes.
The following table summarizes the estimated fair value of the acquired assets and liabilities assumed at the date of acquisition for 1st Constitution.
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(in thousands) | |
Assets acquired: | |
Cash and cash equivalents | $ | 326,236 | |
Investment securities available for sale | 217,774 | |
Investment securities held to maturity | 124,485 | |
Federal Home Loan Bank stock | 1,247 | |
Loans held for sale | 4,620 | |
Loans | 1,095,266 | |
Premises and equipment | 13,748 | |
Right-of-use assets, operating lease | 12,991 | |
Goodwill | 115,552 | |
Other intangible assets | 9,018 | |
Bank owned life insurance | 37,580 | |
Accrued interest receivable and other assets | 8,820 | |
Total assets acquired | 1,967,337 | |
Liabilities assumed: | |
Deposits | (1,650,613) | |
| |
Subordinated debt | (14,734) | |
Operating lease liabilities | (12,991) | |
Other liabilities | (3,257) | |
Total liabilities assumed | (1,681,595) | |
Net assets acquired | $ | 285,742 | |
Loans acquired in the 1st Constitution 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 1st Constitution were estimated using the discounted cash flow method 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 based on the relative risk of the cash flows, taking into account the loan type, liquidity risk, maturity of the loans, servicing costs, and a required return on capital; the monthly principal and interest cash flows were discounted to present value and summed to arrive at the calculated value of loans.
For loans acquired without evidence of more-than-insignificant deterioration in credit quality since origination, the Company prepared the interest rate loan fair value and credit fair value adjustments. Loans were grouped into pools based on similar characteristics, such as loan type, fixed or adjustable interest rates, payment type, index rate and caps/floors, and non-accrual status. The loans were valued at the sub-pool level and were pooled at the summary level based on loan type. Market rates for similar loans were obtained from various internal and external data sources and reviewed by management for reasonableness. The average of these market rates was used as the fair value interest rate that a market participant would utilize.
Loans acquired that have experienced more-than-insignificant deterioration in credit quality since origination are considered purchased credit deteriorated ("PCD") loans. The Company evaluated acquired loans for deterioration in credit quality based on any of, but not limited to, the following: (1) non-accrual status; (2) troubled debt restructured designation; (3) risk ratings of special mention, substandard or doubtful; and (4) delinquency status. At the acquisition date, an estimate of expected credit losses is made for groups of PCD loans with similar risk characteristics and individual PCD loans without similar risk characteristics. Additionally for PCD loans, an allowance for loan losses was calculated using management's best estimate of projected losses over the remaining life of the loans, in accordance with ASC 326-20. This represents the portion of loan balances that has been deemed uncollectible based on the Company's expectation of future cash flows for the PCD loans. For loans that were put in collection status immediately, Management made a best estimate of the loan's fair value based on analysis of the credit and our lien position. For all other loans, the fair value was determined using discounted cash flows as described above for non-PCD loans.
The table below illustrates the fair value adjustments made to the amortized cost basis in order to present a fair value of the loans acquired (in thousands):
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Gross amortized cost basis at January 6, 2022 | $ | 1,110,600 | |
Interest rate fair value adjustment on all loans | 3,057 | |
Credit fair value adjustment on non-PCD loans | (6,314) | |
Fair value of acquired loans at January 6, 2022 | 1,107,343 | |
Allowance for credit losses on PCD loans | (12,077) | |
Fair value of acquired loans, net, as of January 6 2022 | $ | 1,095,266 | |
The following is a summary of the PCD loans acquired in the 1st Constitution acquisition as of the closing date. | | | | | |
(in thousands) | PCD Loans |
Gross amortized cost basis at January 6, 2022 | $ | 140,300 | |
Interest component of expected cash flows (accretable difference) | (3,792) | |
Allowance for credit losses on PCD loans | (12,077) | |
Net PCD loans | $ | 124,431 | |
The Company acquired 25 branches through the 1st Constitution merger, seven of which were owned premises. The fair value of the properties acquired was derived by valuations prepared by an independent third party using the sales comparison approach to value the property as improved.
As part of the 1st Constitution acquisition, the Company added 17 lease obligations. The Company recorded a $13.0 million right of use asset and lease liability for these lease obligations.
The core deposit intangible totaled $9.0 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 deposit 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. The Company incurred $4.6 million merger-related expenses during the first quarter of 2022 which have been separately stated in the Company's Consolidated Statements of Income. There were no merger-related expenses in the first quarter of 2021.
Supplemental Pro Forma Financial Information
The following table presents financial information regarding the former 1st Constitution operations included in the Consolidated Statements of Income from the date of the acquisition (January 6, 2022) through March 31, 2022. In addition the table provides condensed pro forma financial information assuming that the 1st Constitution acquisition had been completed as of January 1, 2022 for the quarters ended March 31, 2021 and 2022. The table 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. The pro forma information does not reflect management's estimate of any revenue-enhancing opportunities nor anticipated cost savings that may have occurred as a result of the integration and consolidation of 1st Constitution's operations. The pro forma information reflects adjustments related to certain purchase accounting fair value adjustments, amortization of core deposit and other intangibles, and related income tax effects.
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(in thousands) | 1st Constitution Actual from acquisition to March 31, 2022 | | Pro forma Quarter ended March 31, 2022 | | Pro forma Quarter ended March 31, 2021 |
Net interest income | $ | 11,406 | | | $ | 72,794 | | | $ | 71,689 | |
Provision (benefit) for credit losses | 37 | | | 6,272 | | | (1,242) | |
Noninterest income | 2,108 | | | 6,478 | | | 9,837 | |
Noninterest expense | 7,730 | | | 48,407 | | | 45,306 | |
Net income | 4,352 | | | 18,713 | | | 27,671 | |
Earnings per share: | | | | | |
Fully diluted | $ | 0.07 | | | $ | 0.29 | | | $ | 0.43 | |
Note 3 – Earnings Per Share
The following schedule shows the Company’s earnings per share calculations for the periods presented:
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| | For the Three Months Ended March 31, | | |
(in thousands, except per share data) | | 2022 | | 2021 | | | | |
Net income available to common shareholders | | $ | 15,929 | | | $ | 23,175 | | | | | |
Less: earnings allocated to participating securities | | 164 | | | 216 | | | | | |
Net income allocated to common shareholders | | $ | 15,765 | | | $ | 22,959 | | | | | |
Weighted average number of common shares outstanding - basic | | 63,961 | | | 50,576 | | | | | |
Share-based plans | | 277 | | | 204 | | | | | |
Weighted average number of common shares outstanding - diluted | | 64,238 | | | 50,780 | | | | | |
Basic earnings per share | | $ | 0.25 | | | $ | 0.45 | | | | | |
Diluted earnings per share | | $ | 0.25 | | | $ | 0.45 | | | | | |
There were no antidilutive options to purchase common stock excluded from the computation for the three months ended March 31, 2022 and 2021.
Note 4 – Investment Securities
The amortized cost, gross unrealized gains and losses, allowance for credit losses and the fair value of the Company's available for sale securities are as follows:
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| | March 31, 2022 |
(in thousands) | | Amortized Cost | | Gross Unrealized Gains | | Gross Unrealized Losses | | Allowance for Credit Losses | | Fair Value |
U.S. Treasury and U.S. government agencies | | $ | 397,100 | | | $ | 131 | | | $ | (13,516) | | | $ | — | | | $ | 383,715 | |
Mortgage-backed securities, residential | | 377,454 | | | 59 | | | (16,817) | | | — | | | 360,696 | |
Collateralized mortgage obligations, residential | | 196,369 | | | 80 | | | (6,659) | | | — | | | 189,790 | |
Mortgage-backed securities, multifamily | | 1,809 | | | — | | | (206) | | | — | | | 1,603 | |
Collateralized mortgage obligations, multifamily | | 56,101 | | | 31 | | | (1,901) | | | — | | | 54,231 | |
Asset-backed securities | | 63,685 | | | 9 | | | (738) | | | — | | | 62,956 | |
Obligations of states and political subdivisions | | 24,069 | | | 1 | | | (590) | | | (2) | | | 23,478 | |
Corporate bonds | | 96,232 | | | 227 | | | (725) | | | (1,265) | | | 94,469 | |
Total | | $ | 1,212,819 | | | $ | 538 | | | $ | (41,152) | | | $ | (1,267) | | | $ | 1,170,938 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | December 31, 2021 |
(in thousands) | | Amortized Cost | | Gross Unrealized Gains | | Gross Unrealized Losses | | Allowance for Credit Losses | | Fair Value |
U.S. Treasury and U.S. government agencies | | $ | 202,961 | | | $ | 1,215 | | | $ | (789) | | | $ | — | | | $ | 203,387 | |
Mortgage-backed securities, residential | | 238,456 | | | 1,250 | | | (1,731) | | | — | | | 237,975 | |
Collateralized mortgage obligations, residential | | 191,086 | | | 1,693 | | | (1,488) | | | — | | | 191,291 | |
Mortgage-backed securities, multifamily | | 1,816 | | | — | | | (75) | | | — | | | 1,741 | |
Collateralized mortgage obligations, multifamily | | 32,254 | | | 511 | | | (246) | | | — | | | 32,519 | |
Asset-backed securities | | 52,518 | | | 153 | | | (87) | | | — | | | 52,584 | |
| | | | | | | | | | |
Corporate bonds | | 49,598 | | | 959 | | | (15) | | | (83) | | | 50,459 | |
Total | | |