Lakeland Bancorp Inc. in Oak Ridge, N.J., has paid off its remaining debt to Troubled Asset Relief Program.
The $2.8 billion-asset company announced Wednesday that it has paid back the final $19.2 million of the $59 million it received from the Treasury Department program in February 2009. The company had previously made $20 million installments in August 2010 and March 2011.
In a news release, Lakeland President and Chief Executive Thomas J. Shara attributed the decision to pay off the debt to its strong financial performance of late and its improving capital position. Lakeland earned $17.7 million last year, a 16% increase over 2010, and its tangible book value per share increased by 13% year over year, to $6.03.
Lakeland said the repayment will save it roughly $1.2 million a year in dividend payments and other costs related to its participation in the program. The company expects to take a one-time, non-cash charge of $501,000 this quarter in connection with the repayment.
The Treasury still holds warrants to purchase more than 997,000 of Lakeland's shares at a price of $8.88 each. Lakeland said in its news release Wednesday that it will determine within about two weeks whether to exercise its options to repurchase the shares at fair market value.
Lakeland's shares were trading at $10.31 late Wednesday, unchanged from Tuesday's closing price.