Monday, 08 February 2021 03:45 PM
Earnings
Bank reports higher quarterly earnings but a decrease from prior year earnings
- $2.47 million in net income for 2020
- 4th quarter of 2020 was up 17% over 4th quarter of 2019
- Reduced noninterest expense and improved efficiency measures
PEMBROKE, NC / ACCESSWIRE / February 8, 2021 / For the year ended December 31, 2020, Lumbee Guaranty Bank (OTCQX:LUMB)("Lumbee" or "Bank"), reported net income of $2.5 million, or earnings per share of $0.73, compared to net income of $3.0 million, or earnings per share of $0.88, for the year ended December 31, 2019. Net income declined by 17.84%, while earnings per share decreased by 17.13%. The primary cause of the decrease in net income compared to the previous year was a decrease in net interest income due to the low interest rate environment and a loan loss provision of $300,000, compared a negative $100,000 provision during the previous year. For the three-month period ended as of the same date, Lumbee reported net income of $853,000, compared to net income of $726,000 for the three months ended December 31, 2019.
As of December 31, 2020, Lumbee reported assets of $417.2 million, an increase of 21.36% over assets of $343.8 million as of December 31, 2019. Loans were up over 11.10% to $212.9 million, compared to loans of $191.6 million reported December 31, 2019. Deposits grew to $362.1 million at year-end, an increase of 22.29% over December 31, 2019 deposits of $296.1 million. Capital levels remained strong, as shareholders equity totaled $42.9 million, or 10.3% of assets at December 31, 2020, versus $40.9 million, or 11.9% of assets at the year-ago date. For the three-month period ended December 31, 2020, assets rose by $7.9 million, loans dropped by $7.1 million, and deposits increased by $6.3 million.
Net interest income was $3.20 million in 2020's fourth quarter, up by 4% from $3.08 million in the fourth quarter of 2019. Net interest margin declined by 55 basis points to 3.34% in the fourth quarter of 2020 from 3.89% in the year-ago quarter, which was partially offset by both earning asset growth and the recognition of approximately $162,000 in deferred Paycheck Protection Program (PPP) fees. Noninterest income fell 4.43% to $475 thousand in the fourth quarter of 2020 from $497 thousand in the year-ago quarter due to lower service charges on deposit accounts. As a result of cost-containment measures implemented by management, noninterest expense was reduced by 5.89% from $2.85 million in the fourth quarter of 2019 to $2.68 million in 2020's fourth quarter. Year over year, noninterest expense fell from $11.32 million in 2019 to $11.03 million in 2020, a reduction of 2.54%.
Asset quality measurements continued to improve during 2020, as nonperforming assets (including nonaccruing loans, loans more than 90 days past due and still accruing, and Other Real Estate Owned) totaled $4.4 million as of year-end, or 1.06% of total assets. This was a decrease from $4.6 million, or 1.13% of total assets as of September 30, 2020 and from $4.7 million, or 1.35% of total assets as of the year-ago date. The Bank's capital position remains solid, as all capital ratios exceed the regulatory minimums to be considered "Well Capitalized".
"Even with good news on the horizon regarding vaccines, the challenges of managing our bank through COVID-19 have not ended. With an extremely low interest rate environment, management continues to concentrate on maximizing our earnings while controlling costs. We can see our efforts coming to fruition with strong financial performance in the 4th quarter of 2020," said Kyle R. Chavis, Chief Executive Officer of Lumbee. "Despite the obstacles, our employees remain focused on our goal to continue to serve our customers and to help meet their changing financial needs." Chavis added, "Our bank stands ready to lend money, provide financial expertise, and assist our customers in the continued economic recovery of our region."
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.
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The information as of and for the quarter ended December 31, 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, 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.
Kyle R. Chavis, Chief Executive Officer
Lumbee Guaranty Bank
(910) 521-9707; [email protected]; www.lumbeeguarantybank.com
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LUMBEE GUARANTY BANK
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Balance Sheets (unaudited) June 30,
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2020 | 2019 | ||||||
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(Dollars in thousands) | |||||||
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Assets
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Cash and due from banks
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$ | 5,482 | $ | 4,829 | ||||
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Interest-earning deposits with banks
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39,314 | 26,243 | ||||||
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Total cash and cash equivalents
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44,796 | 31,072 | ||||||
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Net Investments
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136,778 | 99,294 | ||||||
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Loans receivable
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212,897 | 191,622 | ||||||
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Allowance for loan losses
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2,361 | 2,067 | ||||||
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Net loans receivable
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210,536 | 189,555 | ||||||
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Bank premises & equipment, net
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8,922 | 9,056 | ||||||
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Other assets
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16,162 | 14,776 | ||||||
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Total assets
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$ | 417,194 | $ | 343,753 | ||||
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Liabilities and Shareholders' Equity
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Deposits:
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Demand deposits, Money market & NOW
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$ | 245,599 | $ | 184,058 | ||||
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Savings
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34,165 | 26,384 | ||||||
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Time deposits
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82,324 | 85,652 | ||||||
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Total deposits
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362,088 | 296,094 | ||||||
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Securities Sold under Agreement to Repurchase
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1,631 | 1,096 | ||||||
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Other borrowed money
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5,114 | 825 | ||||||
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Accrued interest payable and other liabilities
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5,413 | 4,811 | ||||||
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Total liabilities
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374,246 | 302,826 | ||||||
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Total shareholders' equity
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42,948 | 40,927 | ||||||
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Total liabilities and shareholders' equity
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$ | 417,194 | $ | 343,753 | ||||
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Book value per share
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$ | 12.69 | $ | 11.99 | ||||
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LUMBEE GUARANTY BANK
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Statement of Operations (unaudited) Twelve Months
Ended, December 31, |
2020 | 2019 | ||||||||
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(Dollars in thousands, except per share data) | |||||||||
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Interest Income
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13,623 | 14,436 | ||||||||
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Interest Expense
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1,472 | 1,784 | ||||||||
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Net Interest Income
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12,151 | 12,652 | ||||||||
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Provision for loan losses
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300 | -100 | ||||||||
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Net Interest Income after provision
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11,851 | 12,752 | ||||||||
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Service charges on deposit accounts
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1,192 | 1,350 | ||||||||
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Other
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766 | 686 | ||||||||
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Total noninterest Income
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1,958 | 2,036 | ||||||||
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Realized gains on AFS securities
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0 | 25 | ||||||||
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Personnel costs
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6,184 | 6,327 | ||||||||
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Occupancy and equipment
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1,532 | 1,273 | ||||||||
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Data processing fees
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1,206 | 1,400 | ||||||||
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Other
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2,112 | 2,322 | ||||||||
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Total noninterest expense
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11,034 | 11,322 | ||||||||
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Net Income before income taxes
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2,775 | 3,491 | ||||||||
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Income taxes
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307 | 487 | ||||||||
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Net Income
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2,468 | 3,004 | ||||||||
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Net income per common share
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$ | 0.73 | $ | 0.88 | ||||||
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LUMBEE GUARANTY BANK
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Statement of Operations (unaudited) Three Months Ended,
December 31, |
2020 | 2019 | ||||||||
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(Dollars in thousands, except per share data) | |||||||||
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Interest Income
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3,494 | 3,547 | ||||||||
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Interest Expense
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295 | 471 | ||||||||
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Net Interest Income
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3,199 | 3,076 | ||||||||
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Provision for loan losses
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0 | -100 | ||||||||
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Net Interest Income after provision
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3,199 | 3,176 | ||||||||
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Service charges on deposit accounts
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303 | 340 | ||||||||
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Other
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172 | 157 | ||||||||
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Total noninterest Income
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475 | 497 | ||||||||
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Realized gains on AFS securities
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0 | 25 | ||||||||
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Personnel costs
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1,428 | 1,613 | ||||||||
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Occupancy and equipment
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390 | 302 | ||||||||
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Data processing fees
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298 | 364 | ||||||||
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Other
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568 | 573 | ||||||||
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Total noninterest expense
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2,684 | 2,852 | ||||||||
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Net Income before income taxes
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990 | 846 | ||||||||
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Income taxes
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137 | 120 | ||||||||
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Net Income
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853 | 726 | ||||||||
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Net income per common share
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$ | 0.25 | $ | 0.21 | ||||||
SOURCE: Lumbee Guaranty Bank