Ledyard Financial Group Reports Third Quarter and Year-to-date Earnings

Rhea-AI Summary

Ledyard Financial Group, trading as LFGP, reported robust financial results for Q3 2022, with a net income of $2.08 million, marking a 5% increase from $1.97 million in Q3 2021. Year-to-date net income rose 7% to $6.20 million. Total revenue improved by 4% to $8.68 million for Q3 2022, driven by a $750,000 release from the allowance for loan losses. However, net interest income fell by 3% to $4.50 million. Total assets remained stable at $729.5 million, while total shareholder equity decreased significantly to $47.4 million, primarily due to a shift to an unrealized loss position in investments.

Positive

• Net income increased by 5% year-over-year for Q3 2022.
• Year-to-date net income growth of 7% compared to prior year.
• Total revenue rose by 4%, driven by the release of loan loss allowances.

Negative

• Net interest income decreased by 3% for Q3 2022.
• Total shareholder equity fell from $72.6 million to $47.4 million due to unrealized losses.
• Assets under management declined by 15% to $1.60 billion.

HANOVER, N.H.--(BUSINESS WIRE)-- Ledyard Financial Group, Inc. (ticker symbol LFGP), the holding company for Ledyard National Bank, today announced financial results for Q3 2022 and Q3 2022 YTD. The results confirmed the strength and resiliency of the company’s core businesses. ROA, ROE, and key capital ratios all exceeded figures for comparable prior periods. The company remains focused on safely navigating today’s uncertain economic environment (including volatile equity markets), while continuing to support its clients, its employees, and the communities it serves.

Net income for Q3 2022 was $2.08 million or $0.64 per share compared to $1.97 million or $0.61 per share for Q3 2021, an increase of $105 thousand or 5%. Net income for Q3 2022 YTD was $6.20 million or $1.90 per share compared to $5.77 million or $1.80 per share for the comparable prior year period, an increase of $429 thousand or 7%. In recognition of the low level of risk in the company’s loan portfolio, $750 thousand was released from the allowance for loan losses during Q3 2022.

Total revenue (comprised of net interest income after provision and all non-interest revenue) for Q3 2022 was $8.68 million compared to $8.39 million for Q3 2021, an increase of $298 thousand, or 4%. Total revenue for Q3 2022 YTD was $25.60 million compared to $24.99 million for Q3 2021, an increase of $610 thousand or 2%. Net interest income for Q3 2022 was $4.50 million compared to $4.65 million for Q3 2021, a decrease of $147 thousand or 3%. Net interest income for Q3 2022 YTD was $13.76 million compared to $13.72 million for Q3 2021, for an increase of $43 thousand or less than 1%. As noted above, a release of $750 thousand from the allowance for loan losses in Q3 2022 contributed favorably to net interest income after provision, as comparable prior periods had either a small provision or none at all. Total non-interest revenue, consisting primarily of revenue from Ledyard Financial Advisors (see detail discussion below), amounted to $3.43 million for Q3 2022 and $11.09 million for Q3 2022 YTD, down 8% and 2%, respectively, from the comparable periods in 2021.

Ledyard Financial Advisors (LFA), a division of Ledyard National Bank, reported revenue trends consistent with the broad-based negative market trends of the last year. With the S&P 500 down 17% and the yield on ten-year U.S. treasuries up over 200 basis points, Ledyard’s assets under management (AUM) totaled $1.60 billion at 9/30/2022, down 15% from $1.88 billion at 9/30/2021. Accordingly, at $3.11 million and $9.75 million, Q3 2022 and Q3 2022 YTD revenues from LFA were down 8% and 2%, respectively, from the comparable prior year periods. Without a recovery in the equity markets LFA revenue growth will remain under pressure.

Non-interest expense for Q3 2022 was $6.49 million compared to $6.22 million for Q3 2021, an increase of $271 thousand or 4%. Non-interest expense for Q3 2022 YTD was $18.95 million compared to $18.57 million for the same period in 2021, an increase of $381 thousand or 2%.

On September 30, 2022, the Company’s shareholders’ equity stood at $47.4 million compared to $72.6 million on the same date in 2021. The decrease in shareholders’ equity is due to a decline in Accumulated Other Comprehensive Income (AOCI), which moved from an unrealized gain position of $9.1 million at September 30, 2021 to an unrealized loss position of $21.5 million at September 30, 2022. This change is directly related to the interest rate driven decline in the market value of Available-For-Sale securities and related derivative contracts used for hedging purposes. (Note: AOCI is excluded when calculating regulatory capital ratios.) All of the Company’s capital ratios are well in excess of the amount required by the Federal Reserve for a bank holding company to be considered “well capitalized” and the Company has significant levels of liquidity resources available to support operations during these unusual times. At September 30, 2022, the Company’s book value per share excluding AOCI stood at $20.55 compared to $19.01 for the same period in 2021.

At $729.5 million, total assets of the Company at September 30, 2022 were essentially unchanged from total assets of $729.2 million at September 30, 2021. Loans, net of the allowance for loan losses at September 30, 2022, were $346.8 million compared to $344.6 million for the same date last year, an increase of $2.2 million or less than 1%. Deposits at September 30, 2022 were essentially unchanged from the prior year, ending Q3 2022 at $567.7 million compared to $567.4 million a year ago.

The Allowance for Loan Losses stood at $6.7 million at September 30, 2022, compared to $8.1 million at September 30, 2021, providing over 2x coverage of non-performing assets as of the end of Q3 2022. Total non-performing assets were $3.2 million at September 30, 2022, compared to $1.3 million for the same period in 2021, with the increase attributable to two currently underperforming loans that the company expects will cure.

The Company is pleased to welcome Peter Sprudzs as the new SVP Chief Financial Officer. Mr. Sprudzs brings many years of experience in finance, treasury, and risk management for public and private companies both large and small and succeeds Greg Steverson, who will be retiring from Ledyard in December after 20 years with the Company.

Ledyard Financial Group, Inc., headquartered in Hanover, New Hampshire, is the holding company for Ledyard National Bank. Ledyard National Bank, founded in 1991, is a full-service community bank offering a broad range of banking, investment, and wealth management services. Stock activity information can be found in the Investor Relations section of Ledyard’s website, which includes a wealth of other information that Ledyard shareholders and prospective shareholders may find of interest.

Ledyard Financial Group, Inc. shares can be bought and sold through the NASD sanctioned OTC Markets under the trading symbol LFGP. Shares may be traded through an individual’s broker. For more information, please refer to the Investor Relations section of the bank’s website at www.ledyard.bank or contact the Company’s SVP CFO, Peter Sprudzs.

Ledyard Financial Group, Inc.
Selected Financial Highlights
(Unaudited)

		Operating Data
		For the Three Months Ended				For the Nine Months Ended
		9/30/2022		9/30/2021		9/30/2022		9/30/2021
Loan interest income		$3,179,740		$3,415,663		$9,414,221		$10,497,775
Investment interest income		1,887,898		1,554,828		5,556,347		4,395,647
Total interest income		5,067,638		4,970,491		14,970,568		14,893,422
Interest expense on deposits		130,726		160,441		450,770		591,643
Interest expense on borrowings		436,453		162,983		760,082		585,198
Total interest expense		567,179		323,424		1,210,852		1,176,841
Net interest income before provision		4,500,459		4,647,067		13,759,716		13,716,581
Provision for loan losses		(750,000)		-		(750,000)		50,000
Net interest income after provision		5,250,459		4,647,067		14,509,716		13,666,581
Ledyard Financial Advisors revenue		3,112,208		3,376,600		9,748,417		9,762,432
Securities gains (losses)		-		-		-		275,827
Other non-interest income		321,409		362,860		1,338,162		1,281,230
Total revenue		8,684,076		8,386,527		25,596,295		24,986,070
Non-interest expense		6,489,762		6,218,579		18,953,887		18,573,032
Pre-tax income		2,194,314		2,167,948		6,642,408		6,413,038
Tax expense		114,679		193,109		445,037		645,058
Net income		2,079,635		1,974,839		6,197,371		5,767,980
Earnings per common share, basic		$0.64		$0.61		$1.90		$1.80
Earnings per common share, diluted		$0.63		$0.60		$1.89		$1.77

		Financial Condition Data
		As of 9/30/2022		As of 9/30/2021
Total assets		729,479,304		729,188,129
Investments & interest-bearing deposits		317,304,454		337,409,854
Gross loans		353,550,744		352,719,776
Allowance for loan loss		6,720,147		8,077,220
Net loans		346,830,597		344,642,556
Premises, equipment & other assets		65,344,253		47,135,719
Deposits		567,746,223		567,442,683
Brokered Deposits		-		70,009,452
Borrowings		90,401,956		12,822,967
Subordinated debt		18,000,000		-
Other liabilities		5,933,528		6,273,332
Capital		70,561,027		65,337,575
Other comprehensive income		(21,519,192)		9,062,145
Treasury stock		(1,644,238)		(1,760,025)
Total shareholder's equity		47,397,597		72,639,695
		Other Data
		As of 9/30/2022		As of 9/30/2021
Dividends per common share		$0.63		$0.59
Book value per share (excluding OCI)		20.55		19.01
Book value per share (including OCI)		14.13		21.72
Efficiency ratio		76.28%		74.19%
Stock price - high		25.00		26.08
Stock price - low		19.76		17.87
Stock price - average		21.81		22.84
Common stock issued		3,470,127		3,468,612
Treasury shares		115,998		124,164
Assets under management (billions)		1.597		1.877
Leverage ratio		9.46%		8.69%
Risk based capital ratio		19.99%		16.79%
Return on assets		1.09%		1.08%
Return on equity		14.57%		11.00%
Allowance to total loans		1.90%		2.29%
Texas ratio		3.58%		1.90%
Allowance for loan losses to non-performing assets		211.86%		621.48%

		Economic Value of Equity (000s)
		Minus 100BP		Base		Plus 200 BP
Total Assets		725,423		696,887		636,829
Total Liabilities		578,944		550,606		518,616
Economic Value of Equity		146,479		146,281		118,213
Economic Value of Equity Ratio		20.20%		21.00%		18.60%

				Sensitivity to Interest Rates - Net Interest Income (NII in 000s)
				Current Year
NII				Y1		Y2		Y3		Y4		Y5
Up 200 BP				20,635		21,994		23,877		26,070		27,465
Base				21,309		22,940		24,115		25,507		26,342
Down 100BP				20,718		21,694		22,386		23,241		23,790
				Prior Year
NII				Y1		Y2		Y3		Y4		Y5
Up 200 BP				19,767		20,577		22,348		24,044		25,845
Base				20,161		21,145		22,083		23,084		24,155
Down 100BP				20,042		20,191		20,554		21,125		21,672
				--------Difference-------
NII				Y1		Y2		Y3		Y4		Y5
Up 200 BP				868		1,417		1,529		2,026		1,620
Base				1,148		1,795		2,032		2,423		2,187
Down 100BP				676		1,503		1,832		2,116		2,118

Source: Internal asset liability management reports for the third quarter of 2022.

Forward-Looking Statements: Statements concerning future performance, developments or events, expectations for growth and income forecasts, and any other guidance on future periods constitute forward-looking statements that are subject to a number of risks and uncertainties. Actual results may differ materially from stated expectations. Specific factors include, but are not limited to, loan production, competitive pressure in the banking industry, balance sheet management, net interest margin variations, the effect of changes in equity prices on assets under management, the ability to control costs and expenses, changes in the interest rate environment, financial policies of the United States government, and general economic conditions. The Company disclaims any obligation to update any such factors.

Note: Certain reclassifications have been made to the prior period information to conform to the current period presentation.

View source version on businesswire.com: https://www.businesswire.com/news/home/20221026005739/en/

Peter Sprudzs, SVP CFO

(603) 640-2743

peter.sprudzs@ledyard.bank

Ticker Symbol: LFGP

Source: Ledyard Financial Group, Inc.

FAQ

What were Ledyard Financial Group's Q3 2022 earnings?

Ledyard Financial Group reported a net income of $2.08 million for Q3 2022, or $0.64 per share.

How did LFGP's total revenue perform in Q3 2022?

Total revenue for Q3 2022 was $8.68 million, up 4% from $8.39 million in Q3 2021.

What is the current status of Ledyard Financial Group's assets under management?

As of September 30, 2022, Ledyard Financial Group's assets under management totaled $1.60 billion, down 15% from the previous year.

How has LFGP's shareholder equity changed in the latest report?

Shareholder equity decreased to $47.4 million as of September 30, 2022, from $72.6 million a year earlier.

What challenges does Ledyard Financial Advisors face according to the press release?

Ledyard Financial Advisors is experiencing revenue pressure due to broad negative market trends.