Lumbee Guaranty Bank Reports 2nd Quarter 2020 Earnings
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Lumbee Guaranty Bank Reports 2nd Quarter 2020 Earnings

Monday, August 10, 2020 4:50 PM
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Conference Call,Earnings

Company reports lower earnings but significant loan and deposit growth

  • $345 thousand in net income for the quarter-ended June 30, 2020
  • Over 15% loan growth
  • Nearly 14% deposit growth

PEMBROKE, NC / ACCESSWIRE / August 10, 2020 / For the quarter ended June 30, 2020, Lumbee Guaranty Bank ("Lumbee" or "Bank"), reported net income of $345,000, or earnings per share of $0.10, compared to net income of $654,000, or earnings per share of $0.19, for the same period in 2019. For the six-month period ended as of the same date, Lumbee reported net income of $1.067 million in 2020, or earnings per share of $0.31, compared to net income of $1.474 million for the six months ended June 30, 2019, or earnings per share of $0.43. The primary cause of the decrease in net income compared to prior periods was a loan loss provision of $175,000 in the second quarter of 2020, compared to no provision during the same period in 2019. This increased provision was due to factors associated with the COVID-19 pandemic and its effects on the economy.

As of June 30, 2020, Lumbee reported assets of $380.1 million, an increase of over 13% from assets of $336.3 million as of June 30, 2019. Loans were up over 15% to $215.2 million, compared to loans of $187.1 million reported June 30, 2019. Deposits grew to $326.9 million at quarter-end, an increase of almost 14% over June 30, 2019 deposits of $287.3 million. Capital levels remained robust, as shareholders equity totaled $42.7 million, or 11.23% of assets at June 30, 2020, versus $40.2 million, or 11.95% of assets at the year-ago date.

Net interest income totaled $2.86 million in the second quarter of 2020, down 10% from $3.19 million in the year-ago quarter. The decline was due to a lower net interest margin, which declined 73 basis points to 3.33% in 2020's second quarter from 4.06% in the year-ago quarter, though average earning asset growth partially offset the margin drop. The reduced margin was pressured both by the rapid decline in interest rates orchestrated by the Federal Reserve in early March and lower rates on loans originated through the Paycheck Protection Program (PPP). Noninterest income was down about 9% to $449 thousand in 2020's second quarter from $491 thousand in the year-ago quarter, mainly due to a decrease of 21% in deposit service charges attributable to lower transaction activity caused by the pandemic.

Cost containment measures enacted by management produced a decrease in noninterest expense both on a linked quarter and versus the year-ago quarter basis. Specifically, noninterest expense was $2.79 million in the second quarter of 2020, which was down 1% from $2.81 million in 2020's first quarter and 5% from $2.94 million in the year-ago quarter. As a percentage of average assets (annualized), noninterest expense fell to 3.02% in 2020's second quarter from 3.51% a year ago.

"The second quarter of 2020 presented unprecedented challenges for our Bank." said Kyle R. Chavis, Chief Executive Officer of Lumbee. "The effects of the COVID-19 pandemic are significant and far-reaching, and our customers, shareholders, and employees have all been impacted in some fashion. However, Lumbee Guaranty Bank stands ready to continue to support and serve the communities of southeastern N.C. One such example of our efforts is our participation in the Paycheck Protection Program. To date, we have closed and funded over 300 PPP loans for almost $23MM. These loans provided a necessary injection of capital to our small business customers when they needed it most. We have benefited from the goodwill created in our communities because of the PPP, primarily due to our success in obtaining approval for every eligible PPP application that we received. Additionally, to help our customers during these difficult times, we granted loan modifications on over 200 existing loans totaling nearly $30 million." Chavis further stated, "The Bank's strong capital position, robust liquidity levels, and stable asset quality will enable us to navigate the challenges presented by this pandemic, and our employees remain committed to continuing to work diligently to meet the needs of our customers."

Lumbee Guaranty Bank is a community bank headquartered in Pembroke, NC and serves Robeson, Cumberland, and Hoke Counties. Established in 1971, the Bank offers a full array of financial services through its network of fourteen strategically located branch offices over the three-county area. The Bank's common stock is traded on the OTC-QX under the stock symbol LUMB.

The information as of and for the quarter ended June 30, 2020, as presented is unaudited. This news release contains forward-looking statements. Actual results may differ materially from those projected, for various reasons, including our ability to manage growth, our limited operating history, substantial changes in financial markets, regulatory changes, changes in interest rates, loss of deposits and loan demand to other savings and financial institutions, and changes in real estate values and the real estate market.

LUMBEE GUARANTY BANK
           
Balance Sheets (unaudited) June 30,
  2020     2019  
 
  (Dollars in thousands)  
Assets
           
Cash and due from banks
  $ 5,586     $ 4,174  
Interest-earning deposits with banks
    34,235       16,743  
Total cash and cash equivalents
    39,821       20,917  
Net Investments
    103,236       106,796  
Loans receivable
    215,219       187,081  
Allowance for loan losses
    2,177       2,223  
Net loans receivable
    213,042       184,858  
Bank premises & equipment, net
    9,084       8,835  
Other assets
    14,873       14,853  
Total assets
  $ 380,056     $ 336,259  
 
               
Liabilities and Shareholders' Equity
               
Deposits:
               
Demand deposits, Money market & NOW
  $ 211,881     $ 176,590  
Savings
    30,634       25,817  
Time deposits
    84,069       84,924  
Total deposits
    326,584       287,331  
Securities Sold under Agreement to Repurchase
    1,060       1,724  
Other borrowed money
    5,129       2,895  
Accrued interest payable and other liabilities
    4,608       4,144  
Total liabilities
    337,381       296,094  
Total shareholders' equity
    42,675       40,165  
Total liabilities and shareholders' equity
  $ 380,056     $ 336,259  
 
               
Book value per share
  $ 12.55     $ 11.75  

 

LUMBEE GUARANTY BANK
           
Statement of Operations (unaudited) Six Months Ended, June 30,
  2020     2019  
 
  (Dollars in thousands,
except per share data)
 
     
Interest Income
    6,793       7,223  
Interest Expense
    823       840  
     
Net Interest Income
    5,970       6,383  
Provision for loan losses
    175       0  
     
Net Interest Income after provision
    5,795       6,383  
     
Service charges on deposit accounts
    598       657  
Other
    383       344  
Total noninterest Income
    981       1,001  
     
Personnel costs
    3,177       3,156  
Occupancy and equipment
    769       621  
Data processing fees
    620       677  
Other
    1,030       1,224  
Total noninterest expense
    5,596       5,678  
 
               
Net Income before income taxes
    1,180       1,706  
Income taxes
    113       232  
Net Income
    1,067       1,474  
     
Net income per common share
  $ 0.31     $ 0.43  

 

LUMBEE GUARANTY BANK
           
Statement of Operations (unaudited) Three Months Ended, June 30,
  2020     2019  
 
  (Dollars in thousands,
except per share data)
 
     
Interest Income
    3,245       3,625  
Interest Expense
    389       435  
     
Net Interest Income
    2,856       3,190  
Provision for loan losses
    175       0  
     
Net Interest Income after provision
    2,681       3,190  
     
Service charges on deposit accounts
    265       337  
Other
    184       155  
Total noninterest Income
    449       492  
     
Personnel costs
    1,614       1,575  
Occupancy and equipment
    374       319  
Data processing fees
    297       360  
Other
    500       684  
Total noninterest expense
    2,785       2,938  
 
               
Net Income before income taxes
    345       744  
Income taxes
    0       90  
Net Income
    345       654  
     
Net income per common share
  0.10     0.19  

CONTACT:

Kyle R. Chavis, Chief Executive Officer
Lumbee Guaranty Bank
(910) 521-9707; [email protected]; www.lumbeeguarantybank.com

SOURCE: Lumbee Guaranty Bank

Lumbee Guaranty Bank
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LUMB
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