Liberty Northwest Bancorp, Inc. Earns $165,000 in Second Quarter 2022

Rhea-AI Summary

Liberty Northwest Bancorp reported a net income of $165,000 for Q2 2022, a 122% rise from the previous year. Total assets grew to $186 million, with a 9.6% increase in loans and a 1.7% rise in deposits. Non-performing assets stabilized at 0.63% of total assets. The company saw a net interest margin of 3.28%. Non-interest income fell to $36,000, while non-interest expenses decreased by 17.8%. The efficiency ratio improved to 80.8%. The tangible book value per share was $7.45. CEO Rick Darrow highlighted loan growth and preparedness for potential future interest rate increases.

Positive

• Net income increased by 122% year-over-year to $165 thousand.
• Total assets grew to $186 million, up from $170.3 million a year prior.
• Loans increased by 9.6% in Q2 2022 and 19.5% year-over-year.
• Deposits rose 1.7% in Q2 2022 and 11.3% compared to the prior year.
• Non-performing assets remained steady at 0.63% of total assets.
• Net interest margin improved to 3.28%.

Negative

• Non-interest income decreased by 42.9% from the prior year to $36 thousand.
• Tangible book value per share decreased from $7.61 year-over-year to $7.45.

2022 Second Quarter Financial Highlights:

• Net income increased to $165 thousand, or $0.10 per share, in the second quarter of 2022, with net interest income of $1.44 million.
• Total assets grew to $186 million.
• Total loans grew by 9.6% in the second quarter and 19.5% from prior year.
• Total deposits increased 1.7% in the second quarter 2022, and increased 11.3% compared to the prior year. Demand deposits increased 8% year-over-year.
• Nonperforming assets to total assets remained steady at 0.63%.
  

POULSBO, Wash., July 28, 2022 (GLOBE NEWSWIRE) -- Liberty Northwest Bancorp, Inc. (OTCQX: LBNW) (the “Company”) and its wholly-owned subsidiary Liberty Bank today announced earnings of $165 thousand for the second quarter ended June 30, 2022, an increase of $91 thousand, or 122%, compared to the second quarter ended June 30, 2021.

Return on common shareholders' equity for the second quarter of 2022 was 5.39% compared to 2.40% for the second quarter a year ago. Return on assets for the second quarter of 2022 was 0.35% compared to 0.17% for the same quarter in the prior year.

“We are pleased with the Bank’s progress this year – particularly given the challenging economic environment,” said Rick Darrow, Liberty Northwest Bancorp, Inc. President and Chief Executive Officer. “Our second quarter results reflect continued loan growth, increasing 9.6% during the quarter and nearly 20% year-over-year. We are well positioned to capitalize on additional growth opportunities and to benefit from expected future interest rate increases by the Federal Reserve.”

Total assets were $186.0 million as of June 30, 2022, compared to $170.3 million at June 30, 2021, primarily due to the $24.1 million increase in loans receivable funded by continued growth in client deposits and reduction in short-term investments. In addition to growing organic loans, the Bank acquired a pool of residential mortgage loans during the quarter to support strategic initiatives and deploy available liquidity into higher earnings assets. Investment securities increased by $4.3 million since June 30, 2021.

Total deposits increased 11.3% to $164.5 million as of June 30, 2022, compared to $147.9 million a year earlier and $161.8 million at March 31, 2022. Total demand deposits increased $6.7 million, or 7.9%, from June 30, 2021.

Credit quality remains strong. At June 30, 2022, non-performing assets remained low at $1.17 million or 0.63% of total assets corresponding to a single borrower relationship. The allowance for loan losses totaled $1.615 million as of June 30, 2022, and was 1.10% of total loans outstanding.

The Company recorded a $75 thousand provision for loan losses in the second quarter of 2022, compared to a $15 thousand provision for loan losses in the second quarter of 2021. The provision in the second quarter of 2022 was primarily due to growth in loans receivable partially offset by improvements in the credit quality of certain loan segments related to strong real estate markets and collateral conditions.

The Company’s net interest margin was 3.28% for the second quarter of 2022, compared to 3.05% for the preceding quarter, and 3.46% for the second quarter of 2021. “Steady loan growth and recent short-term interest rate increases by the Federal Reserve led to improved loan yields and net interest margin expansion,” said Darrow. “Earnings over the past two quarters position us well as we head into the second half of 2022.”

Total non-interest income was $36 thousand for the second quarter of 2022 compared to $63 thousand in the second quarter a year ago. The decrease in non-interest income was primarily due to a slowing of fees earned on brokered mortgage loans due to higher interest rates.

Total noninterest expense was $1.193 million in the second quarter of 2022, a decrease of $258 thousand, or 17.8%, from the prior year's quarter. The Company’s efficiency ratio in the second quarter of 2022 improved to 80.8%, compared to 93.2% for the same period one year ago due to active management of operating expenses. Compensation and benefits costs decreased by $238 thousand, or 25.8%, over the prior year quarter primarily due lower staff count.

Capital ratios continue to exceed regulatory requirements, with total risk-based capital substantially above well-capitalized regulatory requirements. Tangible book value per share was $7.45 at quarter end, compared to $7.61 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 June 30, 2022				Quarter Ended March 31, 2022				Three Month Change			Quarter Ended June 30, 2021				One Year Change
Interest Income
Loans		$	1,508			$	1,347			12	%		$	1,583			-5	%
Interest bearing deposits in banks			16				10			58	%			6			174	%
Securities			90				90			1	%			46			98	%
Total interest income			1,614				1,447			12	%			1,635			-1	%
Interest Expense
Deposits			74				60			22	%			49			52	%
Other Borrowings			100				101			-1	%			113			-12	%
Total interest expense			174				161			8	%			161			8	%
Net Interest Income			1,441				1,286			12	%			1,473			-2	%
Provision for Loan Losses			75				15			400	%			15			400	%
Net interest income after provision for loan losses			1,366				1,271			7	%			1,458			-6	%
Non-Interest Income
Service charges on deposit accounts			11				12			-6	%			10			11	%
Other non-interest income			25				57			-56	%			52			-53	%
Total non-interest income			36				69			-47	%			63			-42	%
Non-Interest Expense
Salaries and employee benefits			683				761			-10	%			921			-26	%
Occupancy and equipment expenses			141				150			-6	%			153			-8	%
Other operating expenses			368				380			-3	%			377			-2	%
Total non-interest expenses			1,193				1,290			-8	%			1,451			-18	%
Net Income Before Income Tax			209				49			326	%			70			198	%
Provision for Income Tax			(44	)			(10	)		326	%			(15	)		198	%
Net Income		$	165			$	39			326	%		$	56			198	%

BALANCE SHEETS (Unaudited)
(Dollars in thousands)
		June 30, 2022				March 31, 2022				Three Month Change			June 30, 2021				One Year Change
Assets
Cash and due from Banks		$	4,381			$	3,766			16	%		$	4,981			-12	%
Interest bearing deposits in banks			4,524				18,013			-75	%			20,095			-77	%
Securities			24,769				24,391			2	%			20,499			21	%
Loans			146,375				133,651			10	%			122,296			20	%
Allowance for loan losses			(1,615	)			(1,540	)		5	%			(1,195	)		35	%
Net Loans			144,759				132,110			10	%			121,101			20	%
Premises and fixed assets			5,580				4,543			23	%			1,767			216	%
Accrued Interest receivable			618				494			25	%			507			22	%
Intangible assets			78				85			-8	%			109			-28	%
Other assets			1,316				1,198			10	%			1,200			10	%
Total Assets		$	186,026			$	184,599			1	%		$	170,260			9	%
Liabilities and Shareholders' Equity
Deposits
Demand, non-interest bearing		$	52,799			$	54,906			-4	%		$	63,551			-17	%
Interest Bearing Demand			38,042				39,534			-4	%			20,638			84	%
Money Market and Savings			59,974				53,406			12	%			56,818			6	%
Certificates of Deposit			13,700				13,929			-2	%			6,862			100	%
Total Deposits			164,516				161,776			2	%			147,869			11	%
Total Borrowing			8,884				10,401			-15	%			9,500			-6	%
Accrued interest payable			72				7			1002	%			70			3	%
Other liabilities			348				265			31	%			429			-19	%
Total Liabilities			173,820				172,448			1	%			157,868			10	%
Shareholders' Equity
Common Stock			1,627				1,627			0	%			1,620			0	%
Additional paid in capital			13,004				12,993			0	%			12,822			1	%
Retained Earnings			(1,863	)			(2,028	)						(2,092	)
Other Comprehensive Income			(562	)			(441	)		27	%			43			-1396	%
Total Shareholders' Equity			12,206				12,151			0	%			12,392			-2	%
Total Liabilities and Shareholders' Equity		$	186,026			$	184,599			1	%		$	170,260			9	%

		June 30, 2022				March 31, 2022			June 30, 2021
Financial Ratios
Return on Average Assets			0.35	%		0.09	%		0.17	%
Return on Average Equity			5.39	%		1.25	%		2.40	%
Efficiency Ratio			80.8	%		95.3	%		93.2	%
Net Interest Margin			3.28	%		3.05	%		3.46	%
Loan to Deposits			89.0	%		82.6	%		82.7	%
Tangible Book Value per Share			7.45			7.42			7.61
Book Value per Share			7.50			7.47			7.65
Earnings per Share			0.10			0.02			0.05
Asset Quality
Net Loan Charge-offs (recoveries)		$	-			-			-
Nonperforming Loans		$	1,167			1,178			0
Nonperforming Assets to Total Assets			0.63	%		0.64	%		0.00	%
Allowance for Loan Losses to Total Loans			1.10	%		1.15	%		0.98	%
Other Real Estate Owned		$	-			-			-
CAPITAL (Bank only)
Tier 1 leverage ratio			8.60	%		8.83	%		9.13	%
Tier 1 risk-based capital ratio			13.00	%		13.64	%		16.82	%
Total risk-based capital ratio			14.25	%		14.89	%		18.07	%

FAQ

What were the Q2 2022 earnings for Liberty Northwest Bancorp (LBNW)?

Liberty Northwest Bancorp reported a net income of $165,000 for Q2 2022.

How much did loans grow for Liberty Northwest Bancorp in Q2 2022?

Loans grew by 9.6% in Q2 2022 and 19.5% compared to the prior year.

What is the net interest margin for LBNW in Q2 2022?

The net interest margin for Liberty Northwest Bancorp in Q2 2022 was 3.28%.

How did non-performing assets change for LBNW in Q2 2022?

Non-performing assets remained steady at 0.63% of total assets.

What was the efficiency ratio for LBNW in Q2 2022?

The efficiency ratio improved to 80.8% for Q2 2022.