Liberty Northwest Bancorp, Inc. Earns $136,000 in Fourth Quarter and $526,000 for the Year 2022

Rhea-AI Summary

Liberty Northwest Bancorp (OTCQX: LBNW) reported fourth-quarter net income of $136 thousand, a significant recovery from a $135 thousand loss a year prior. For 2022, net income rose to $526 thousand, a 139% increase. Total assets grew 10.2% to $193 million, although total loans decreased 0.9% in Q4 but increased 21.2% year-over-year. Net interest margin was 3.11% for Q4, down from 3.35% in Q3. Total deposits fell 6.3% to $141.8 million amid competitive deposit pricing. Nonperforming assets improved to 0.34% of total assets, and total noninterest expense decreased 16.8% year-over-year.

Positive

• Net income rose 139% year-over-year to $526 thousand for 2022.
• Total assets increased by 10.2% to $193 million.
• Nonperforming assets improved to 0.34% of total assets.
• Total noninterest expense decreased 16.8% year-over-year, improving efficiency.

Negative

• Total deposits decreased 6.3% to $141.8 million.
• Net interest margin compressed to 3.11%, down from 3.35%.

2022 Fourth Quarter and Full Year Financial Highlights:

• Net income was $136 thousand, or $0.08 per share, in the fourth quarter of 2022, with net interest income of $1.35 million.
• Net income for the year was $526 thousand, with net interest income of $5.56 million.
• Total assets increased 10.2% year-over-year to $193.0 million.
• Total loans decreased 0.9% in the fourth quarter and increased 21.2% from the prior year.
• Net interest margin of 3.11% for the fourth quarter and 3.18% for the year.
• Nonperforming assets to total assets improved to 0.34%.

POULSBO, Wash., Jan. 31, 2023 (GLOBE NEWSWIRE) -- Liberty Northwest Bancorp, Inc. (OTCQX: LBNW) (the “Company”) and its wholly-owned subsidiary Liberty Bank today announced earnings of $136 thousand for the fourth quarter ended December 31, 2022, an increase of $271 thousand, compared to the $135 thousand loss reported in the fourth quarter ended December 31, 2021. For the twelve months ended December 31, 2022, net income increased $306 thousand, or 139%, compared to the twelve months ended December 31, 2021.

In the fourth quarter of 2022, the Company generated a return on common shareholders' equity of 4.41% and a return on assets of 0.30%, compared to 6.02% and 0.40%, respectively, in the immediate prior quarter. For the year 2022, return on common shareholders' equity was 4.36%, and return on assets was 0.29%, compared to 1.77% and 0.212%, respectively, in 2021.

“Our fourth quarterly results were a strong end to what was a monumental year on several measures,” said Rick Darrow, Liberty Northwest Bancorp, Inc. President and Chief Executive Officer. “We generated positive operating results for the fourth quarter, and delivered one of the most profitable years in the Company’s history for the full year 2022, reflecting the dedicated effort put forth by all of our employees. As we look to 2023, our focus remains on improving the financial performance of the Company, while continuing to meet the needs of our community.”  

“Earlier this month, we held the grand opening of our new headquarters in Poulsbo,” Darrow continued. “The banking center is in a desirable location in downtown Poulsbo and is large enough to accommodate future growth for the bank well into the next decade. This new space will add to the energy and momentum that we have generated over the last several years.”

The Company’s net interest margin was 3.11% for the fourth quarter of 2022, compared to 3.35% for the preceding quarter, and 3.37% for the fourth quarter of 2021. “Higher yields on earning assets during the quarter were more than offset by the increase in deposit costs, resulting in net interest margin compression during the quarter,” said Darrow. For the year, the net interest margin was 3.18%, compared to 3.48% for 2021.

Total assets increased 10.2% to $193.0 million as of December 31, 2022, compared to $175.1 million at December 31, 2021. The year-over-year increase was primarily due to a $25.5 million increase in loans receivable funded by deposits, increased borrowings, and a reduction in short-term investments.

“Like other financial institutions, we experienced a decrease in deposit balances during the quarter, as deposit pricing pressures persist and customers are seeking higher yields,” said Darrow. Total deposits decreased 6.3% to $141.8 million at December 31, 2022, compared to $151.2 million a year earlier and decreased 9.3% compared to $156.3 million at September 30, 2022. Total demand deposits decreased $5.3 million, or 10.4%, from December 31, 2021. Non-interest bearing demand accounts represented 32.6%, interest bearing demand represented 16.9%, money market and savings accounts comprised 28.5% and certificates of deposit made up 22.1% of the total deposit portfolio at December 31, 2022.

At September 30, 2022, non-performing assets remained low at $659 thousand, or 0.34% of total assets, corresponding to a single borrower relationship. The allowance for loan losses totaled $1.24 million as of December 31, 2022, and was 0.85% of total loans outstanding. The Company recorded a $40 thousand provision for loan losses in the fourth quarter of 2022, compared to a $60 thousand provision in the third quarter of 2022 and a $315 thousand provision in the fourth quarter of 2021.

Total non-interest income was $45 thousand for the fourth quarter of 2022, compared to $78 thousand in the fourth quarter a year ago. The decrease in non-interest income was due to lower fee income earned on brokered mortgage loans in 2022. For the year 2022, non-interest income totaled $193 thousand, compared to $314 thousand for 2021.

Total noninterest expense was $1.17 million for the fourth quarter of 2022, a decrease of $237 thousand, or 16.8%, from the fourth quarter a year ago. The Company’s efficiency ratio in the fourth quarter of 2022 improved to 83.9%, compared to 90.7% for the same period one year ago. Compensation and benefits costs decreased by $271 thousand, or 30.0%, over the prior year quarter primarily due to lower staff count. For the year 2022, total noninterest expense decreased $843 thousand, or 14.7%, to $4.89 million, compared to $5.73 million in 2021.

Capital ratios continue to exceed regulatory requirements, with total risk-based capital substantially above well-capitalized regulatory requirements. The tangible book value per share was $7.51 at quarter end, compared to $7.59 a year earlier.

About Liberty Northwest Bancorp, Inc.
Liberty Northwest Bancorp, Inc. is the bank holding company for Liberty Bank, a commercial bank chartered in the State of Washington. The Bank began operations June 11, 2009, and operates a full-service branch in Poulsbo, WA in addition to a loan production office in Bellevue, WA. The Bank provides loan and deposit services to predominantly small and middle-sized businesses and individuals in and around Kitsap and King counties. The Bank is subject to regulation by the State of Washington Department of Financial Institutions and the Federal Deposit Insurance Corporation (FDIC). For more information, please visit www.libertybanknw.com. Liberty Northwest Bancorp, Inc. (OTCQX: LBNW), qualified to trade on the OTCQX® Best Market in June 2022. For information related to the trading of LBNW, please visit www.otcmarkets.com.

For further discussion, please contact the following:
Rick Darrow, Chief Executive Officer | 360-394-4750
Joel Keller, Chief Financial Officer | 360-394-4752

Forward-Looking Statement Safe Harbor: This news release contains comments or information that constitutes forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) that are based on current expectations that involve a number of risks and uncertainties. Forward-looking statements describe Liberty Northwest Bancorp, Inc.’s projections, estimates, plans and expectations of future results and can be identified by words such as “believe,” “intend,” “estimate,” “likely,” “anticipate,” “expect,” “looking forward,” and other similar expressions. They are not guarantees of future performance. Actual results may differ materially from the results expressed in these forward-looking statements, which because of their forward-looking nature, are difficult to predict. Investors should not place undue reliance on any forward-looking statement, and should consider factors that might cause differences including but not limited to the degree of competition by traditional and nontraditional competitors, declines in real estate markets, an increase in unemployment or sustained high levels of unemployment; changes in interest rates; greater than expected costs to integrate acquisitions, adverse changes in local, national and international economies; changes in the Federal Reserve’s actions that affect monetary and fiscal policies; changes in legislative or regulatory actions or reform, including without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act; demand for products and services; changes to the quality of the loan portfolio and our ability to succeed in our problem-asset resolution efforts; the impact of technological advances; changes in tax laws; and other risk factors. Liberty Northwest Bancorp, Inc. undertakes no obligation to publicly update or clarify any forward-looking statement to reflect the impact of events or circumstances that may arise after the date of this release.

STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands)
			Quarter Ended Dec 31, 2022				Quarter Ended Sept 30, 2022				Three Month Change			Quarter Ended Dec 31, 2021				One Year Change
Interest Income
	Loans		$	1,708			$	1,568			9	%		$	1,561			9	%
	Interest bearing deposits in banks			19				22			-13	%			8			148	%
	Securities			103				102			1	%			84			23	%
	Total interest income			1,830				1,692			8	%			1,653			11	%
Interest Expense
	Deposits			239				104			128	%			60			300	%
	Other Borrowings			242				104			134	%			121			100	%
	Total interest expense			481				208			131	%			181			166	%
Net Interest Income				1,349				1,483			-9	%			1,473			-8	%
	Provision for Loan Losses			40				60			-33	%			315			-87	%
Net interest income after provision for loan losses				1,309				1,423			-8	%			1,158			13	%
Non-Interest Income
	Service charges on deposit accounts			15				15			-1	%			14			4	%
	Other non-interest income			30				28			6	%			64			-53	%
	Total non-interest income			45				43			4	%			78			-43	%
Non-Interest Expense
	Salaries and employee benefits			634				694			-9	%			906			-30	%
	Occupancy and equipment expenses			152				142			7	%			136			12	%
	Other operating expenses			383				391			-2	%			364			5	%
	Total non-interest expenses			1,169				1,227			-5	%			1,406			-17	%
Net Income Before Income Tax				185				239			-23	%			(170	)		-208	%
Provision for Income Tax				(49	)			(52	)		-7	%			35			-241	%
Net Income			$	136			$	187			-27	%			(135	)		-200	%

STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands)
				Year to Date Dec 31, 2022				Year to Date Dec 31, 2021				One Year Change
Interest Income
	Loans			$	6,129			$	6,422			-5	%
	Interest bearing deposits in banks				68				27			149	%
	Securities				386				229			69	%
	Total interest income				6,583				6,678			-1	%
Interest Expense
	Deposits				477				201			138	%
	Other Borrowings				547				386			42	%
	Total interest expense				1,024				587			75	%
Net Interest Income					5,559				6,091			-9	%
	Provision for Loan Losses				190				400			-53	%
Net interest income after provision for loan losses					5,369				5,691			-6	%
Non-Interest Income
	Service charges on deposit accounts				54				45			19	%
	Other non-interest income				139				269			-48	%
	Total non-interest income				193				314			-39	%
Non-Interest Expense
	Salaries and employee benefits				2,773				3,693			-25	%
	Occupancy and equipment expenses				585				600			-3	%
	Other operating expenses				1,528				1,437			6	%
	Total non-interest expenses				4,886				5,730			-15	%
Net Income Before Income Tax					682				279			144	%
Provision for Income Tax					(156	)			(59	)		161	%
Net Income				$	526			$	220			139	%

BALANCE SHEETS (Unaudited)
(Dollars in thousands)
			Dec 31, 2022				Sept 30, 2022				Three Month Change			Dec 31, 2021				One Year Change
Assets
	Cash and due from Banks		$	2,844			$	2,982			-5	%		$	2,969			-4	%
	Interest bearing deposits in banks			11,480				4,470			157	%			22,644			-49	%
	Securities			23,682				23,620			0	%			25,809			-8	%
	Loans			146,185				147,497			-1	%			120,647			21	%
	Allowance for loan losses			(1,235	)			(1,190	)		4	%			(1,525	)		-19	%
	Net Loans			144,950				146,307			-1	%			119,121			22	%
	Premises and fixed assets			6,769				6,370			6	%			2,825			140	%
	Accrued Interest receivable			699				630			11	%			507			38	%
	Intangible assets			65				72			-9	%			93			-30	%
	Other assets			2,527				1,704			48	%			1,142			121	%
	Total Assets		$	193,016			$	186,154			4	%		$	175,111			10	%
Liabilities and Shareholders' Equity
	Deposits
	Demand, non-interest bearing		$	46,152			$	50,162			-8	%		$	51,481			-10	%
	Interest Bearing Demand			23,892				37,940			-37	%			39,378			-39	%
	Money Market and Savings			40,438				56,909			-29	%			51,522			-22	%
	Certificates of Deposit			31,286				11,302			177	%			8,860			253	%
	Total Deposits			141,768				156,313			-9	%			151,241			-6	%
	Total Borrowing			38,149				17,392			119	%			10,956			248	%
	Accrued interest payable			165				3			5738	%			73			126	%
	Other liabilities			606				343			78	%			410			48	%
	Total Liabilities			180,690				174,048			4	%			162,679			11	%
	Shareholders' Equity
	Common Stock			1,633				1,633			0	%			1,626			0	%
	Additional paid in capital			13,019				13,008			0	%			12,984			0	%
	Retained Earnings			(1,541	)			(1,676	)						(2,067	)
	Other Comprehensive Income			(785	)			(859	)		-9	%			(111	)		608	%
	Total Shareholders' Equity			12,326				12,106			2	%			12,432			-1	%
	Total Liabilities and Shareholders' Equity		$	193,016			$	186,154			4	%		$	175,111			10	%

				Quarter Ended Dec 31, 2022				Quarter Ended Sept 30, 2022				Quarter Ended Dec 31, 2021				YTD 2022			YTD 2021
Financial Ratios
	Return on Average Assets				0.30	%			0.40	%			-0.30	%		0.29	%		0.12	%
	Return on Average Equity				4.41	%			6.02	%			-4.33	%		4.36	%		1.77	%
	Efficiency Ratio				83.9	%			80.4	%			90.7	%		85.0	%		89.5	%
	Net Interest Margin				3.11	%			3.35	%			3.37	%		3.18	%		3.48	%
	Loan to Deposits				102.2	%			93.6	%			79.8	%
	Tangible Book Value per Share				7.51				7.40				7.59
	Book Value per Share				7.55				7.44				7.65
	Earnings per Share				0.08				0.11				(0.08	)		0.32			0.14
	Asset Quality
	Net Loan Charge-offs (recoveries)			$	-			$	485				-
	Nonperforming Loans			$	659			$	670			$	1,185
	Nonperforming Assets to Total Assets				0.34	%			0.36	%			0.68	%
	Allowance for Loan Losses to Total Loans				0.85	%			0.81	%			1.26	%
	Other Real Estate Owned			$	-			$	-				-
	CAPITAL (Bank only)
	Tier 1 leverage ratio				9.37	%			9.08	%			9.08	%
	Tier 1 risk-based capital ratio				13.64	%			13.46	%			14.45	%
	Total risk based capital ratio				14.63	%			14.42	%			15.70	%

FAQ

What were Liberty Northwest Bancorp's fourth quarter 2022 earnings?

Liberty Northwest Bancorp reported net income of $136 thousand for the fourth quarter of 2022.

How did Liberty Northwest Bancorp's net interest margin change in Q4 2022?

The net interest margin for Q4 2022 was 3.11%, a decrease from 3.35% in the previous quarter.

What is the total asset growth for Liberty Northwest Bancorp in 2022?

Total assets grew by 10.2% to $193 million for the year ended December 31, 2022.

How much did Liberty Northwest Bancorp's total deposits decrease in Q4 2022?

Total deposits decreased by 6.3% to $141.8 million at the end of Q4 2022.

What was Liberty Northwest Bancorp's return on assets for 2022?

Liberty Northwest Bancorp's return on assets for the year 2022 was 0.29%.