Citing trouble with its leasing portfolio, Lakeland Bancorp Inc. in Oak Ridge, N.J., said Thursday that its fourth-quarter earnings fell 73% from a year earlier, to $889,000, or 4 cents a share.
The results missed the average estimate of analysts by 20 cents, according to Thomson Reuters.
By Thursday afternoon Lakeland's shares were down 14% from Wednesday's close, to $8.23.
The $2.6 billion-asset company said its provision for loan and lease losses jumped 182%, to $11 million, including $8.5 million for the leasing division.
Lakeland said one of its lease originators indicated that it could no longer fulfill its contractual obligations. The company said it has 860 leases worth $37.8 million from this originator, and 17% of them are more than 30 days past due.
The nonperforming asset ratio increased 35 basis points from a year earlier, to 0.78%. Leases accounted for more than half of the $20.5 million of nonperformers. They also made 84% of the $6.2 million of fourth-quarter chargeoffs.
“We are clearly disappointed with the performance of the leasing portfolio, which we are aggressively addressing in this challenging economic environment,” Thomas J. Shara, Lakeland's president and chief executive officer, said in a press release.
Lakeland has been shrinking its lease volume, he said; as of Dec. 31 it had $311 million of them, down 19% since June. Leases as a percentage of the loan portfolio fell 4 percentage points from a year earlier, to 15%.