Lincoln Park Bancorp Announces Fourth Quarter and 2021 Annual Results

Rhea-AI Summary

Lincoln Park Bancorp (OTC Pink Market: LPBC) reported a net loss of $1.2 million ($0.71 per diluted share) for 2021, an improvement from a $2.2 million loss in 2020. The fourth quarter loss narrowed to $339 thousand, down from $1.7 million in Q4 2020. The bank will merge with Ion Financial, with a fixed cash consideration of $10.10 per share. As of December 31, 2021, total assets decreased by 16.5% to $261.4 million, while total deposits fell by 22.2% to $176 million, attributed to strategic deposit runoff. The bank remains adequately capitalized per regulatory standards.

Positive

• Net losses improved by $1 million year-over-year to $1.2 million in 2021.
• Non-interest income increased by 32.3%, totaling $1.5 million for 2021.
• Merger with Ion Financial could enhance the scale and operational efficiency of Lincoln Park Bancorp.

Negative

• Net interest income decreased by 17% to $4.4 million for 2021.
• Total assets declined by 16.5%, down to $261.4 million as of December 31, 2021.
• Total deposits dropped by 22.2%, reflecting an intentional runoff of higher-cost deposits.

PINE BROOK, NJ / ACCESSWIRE / April 21, 2022 / Lincoln Park Bancorp (OTC Pink Market:LPBC) (the "Company"), the holding company of Lincoln 1^st Bank (the "Bank" or "Lincoln"), announced today a net loss of $1.2 million or $0.71 per diluted share for the year ended December 31, 2021, compared to a net loss of $2.2 million or $1.28 per diluted share for the year ended December 31, 2020.

For the quarter ended December 31, 2021, the Company reported a net loss of $339 thousand, or $0.20 per diluted share as compared to a net loss of $1.7 million or $1.00 per diluted share for the quarter ended December 31, 2020.

Merger News:

On November 23, 2021, Connecticut-based Ion Financial, MHC, parent company of Ion Bank, and New Jersey-based Lincoln Park Bancorp, MHC, the mutual holding companyof Lincoln Park Bancorp, parentcompany of Lincoln1st Bank, jointly announced entry into a definitive agreement pursuant to which Lincoln Park Bancorp will be combined with Ion Financial, MHC and Lincoln 1st Bank will merge into Ion Bank. Concurrently with the completion of the mergers, Lincoln Park Bancorp, MHC will be dissolved. The merger agreement was unanimously approved by the boards of directors of all parties to it. On March 24, 2022, the parties amended the merger agreement to fix the cash merger consideration at $10.10 per share.

Subject to requisite regulatory approvals and approval by Lincoln Park Bancorp stockholders, the parties intend to complete the transaction in the third quarter of 2022. Lincoln Park Bancorp will hold a Special Meeting of Stockholders on June 15, 2022, at which stockholders will vote on the merger agreement and the proposed merger.After completion of the merger,the combined entityis expected to have $2.0 billion in assets.

Financial Performance Overview:

Fourth QTD 2021 v. Fourth QTD 2020

For the three months ended December 31, 2021, net losses totaled $339 thousand, which reflects a decrease of $1.4 million, in comparison to net losses of $1.7 million for the three months ended December 31, 2020

Net interest income for the three months ended December 31, 2021 decreased $155 thousand to $1.1 million as compared to $1.3 million for the three months ended December 31, 2020. While net interest income decreased, the cost of funds declined by 17 basis points as a result of planned run-off of higher-cost deposits. Average interest-bearing liabilities decreased $39.2 million, which was outpaced by a decrease in the average balance of interest-earning assets of $41.7 million over the same period.

The provision for loan and lease losses for the three months ended December 31, 2021 resulted in a benefit of $3 thousand, as compared to a provision of $65 thousand for the three months ended December 31, 2020. The benefit for the quarter can be attributed to a normal assessment of the Company's environmental factors as part of the general reserve calculation.

Non-interest income increased $7 thousand, or 6.0%, to $124 thousand for the three months ended December 31, 2021, compared with non-interest income of $117 thousand for the three months ended December 31, 2020. This increase is primarily attributed to increased fee income for the quarter ended December 31, 2021.

Non-interest expense remained relatively flat at $1.8 million for the three months ended December 31, 2021 and December 31, 2020.

Income tax expense decreased $1.5 million, to a benefit of $251 thousand for the three months ended December 31, 2021, compared to expense of $1.3 million for the three months ended December 31, 2020. This decrease in expense is derived from the valuation allowance required against the Company's deferred tax asset during the quarter ended December 31, 2021.

YTD 2021 v. YTD 2020

For the year ended December 31, 2021, net losses totaled $1.2 million, which reflects a decreased loss of $998 thousand, in comparison to net losses of $2.2 million for the year ended December 31, 2020.

Net interest income for the year ended December 31, 2021 decreased $862 thousand, or 17.0%, to $4.4 million as compared to $5.3 million for the year ended December 31, 2020. The decrease can be attributed to $20.8 million less in average interest-earning assets in combination with net interest margin decreasing 18 basis points.

Provision for loan losses for the year ended December 31, 2021 decreased $1.3 million, or 117.2%, to a benefit of $191 thousand as compared to a provision of $1.1 million for the year ended December 31, 2020. The benefit for 2021 was derived from an assessment of the Company's environmental factors as part of the general reserve calculation, as net loans receivable decreased $8.8 million over the same period.

Non-interest income increased $370 thousand, or 32.3%, to $1.5 million for the year ended December 31, 2021, compared with $1.1 million for the year ended December 31, 2020. This increase is primarily attributed to the realized gain from selling the Bank's former Lincoln Park location and increased fee income derived from loans, offset by decreased realized gains from sales on the Company's securities portfolio.

Non-interest expense increased $245 thousand, or 3.4%, to $7.4 million for the year ended December 31, 2021, as compared to $7.1 million for the year ended December 31, 2020. The increase in expense is attributed to increased equipment expenses relating to the acceleration of depreciation from assets pertaining to the former Lincoln Park location.

Financial Condition:

As of December 31, 2021, total assets were $261.4 million, a decrease of $51.6 million, or 16.5%, as compared to total assets of $313.0 million at December 31, 2020. The decrease in total assets was associated with a reduction in cash of $41.3 million used to fund the strategic runoff of higher costing deposits.

Net loans receivable decreased $8.8 million, or 4.8%, to $172.9 million as of December 31, 2021, as compared to $181.7 million as of December 31, 2020. The decrease in net loans receivable was driven by payoffs within the participation portfolio of $16.0 million, partially offset by organic loan growth of $7.0 million driven by originations in the residential loan portfolio.

Total deposits decreased $50.1 million, or 22.2% to $176.0 million as of December 31, 2021, from $226.1 million at December 31, 2020. The decrease in deposits reflects an intentional outflow of deposits that the Bank chose not to retain, primarily given their above market rates.

As of December 31, 2021, the Bank's Tier 1 capital leverage ratio, common equity tier 1 capital ratio, Tier 1 capital ratio and total capital ratios were 6.89%, 12.96%, 12.96% and 14.21%, respectively, all in excess of the ratios required to be deemed "well-capitalized." However, due to a supervisory provision the Bank is deemed "adequately capitalized" until it meets a minimum Tier 1 capital leverage ratio of 8.00%.

About Lincoln Park Bancorp

Headquartered in Pine Brook, N.J., Lincoln Park Bancorp (OTC Pink Market: LPBC) through its wholly owned subsidiary Lincoln 1st Bank operates 2 branch locations in Lincoln Park and Montville, New Jersey. Established in 1923, the Bank provides businesses and individuals a wide range of loans and deposit products, along with retail and commercial banking services. For more information, please visit www.mylincoln1st.com.

Forward-Looking Statements

This earnings release may contain forward-looking statements concerning the Company's unaudited consolidated financial condition and results of operations and the business of the Company. We caution that such statements are subject to a number of uncertainties and actual results could differ materially, and, therefore, readers should not place undue reliance on any forward-looking statements. The Company does not undertake, and specifically disclaims, any obligation to publicly release the results of any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

Contact: Erik Terpstra
Co-President & Chief Financial Officer
862 777 8540

LINCOLN PARK BANCORP

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(in thousands)

(unaudited)

		December 31, 2021				December 31, 2020
ASSETS
CASH AND CASH EQUIVALENTS		$	13,612			$	54,914
INVESTMENTS			59,042				60,117
ORGANIC LOANS RECEIVABLE			140,058				133,071
PARTICIPATION LOANS RECEIVABLE			35,284				51,268
ALLOWANCE FOR LOAN LOSSES			(2,453	)			(2,644	)
NET LOANS RECEIVABLE			172,888				181,695
PREMISES AND EQUIPMENT			2,728				2,915
RIGHT OF USE ASSETS			1,565				1,097
FHLB/ACBB STOCK			3,229				3,276
INTEREST RECEIVABLE			689				993
BOLI			6,502				6,330
OTHER ASSETS			1,124				1,652
TOTAL ASSETS		$	261,379			$	312,989
LIABILITIES
NON-INTEREST-BEARING DEPOSITS		$	25,004			$	32,178
INTEREST-BEARING DEPOSITS			111,962				134,557
BROKERED AND LISTING DEPOSITS			39,056				59,381
BOND ISSUE			4,903				4,881
BORROWED MONEY			63,367				63,093
LEASE LIABILITIES			1,681				1,141
OTHER LIABILITIES			2,777				2,590
TOTAL LIABILITIES			248,750				297,821
TOTAL STOCKHOLDERS' EQUITY			12,629				15,168
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	261,379			$	312,989

LINCOLN PARK BANCORP

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(in thousands)

(unaudited)

		For the Year Ended								For the Three Months Ended
		December 31, 2021				December 31, 2020				December 31, 2021				December 31, 2020
INTEREST INCOME
LOANS RECEIVABLE		$	6,790			$	8,056			$	1,675			$	1,945
SECURITIES			960				1,722				217				348
OTHER			125				168				30				32
TOTAL INTEREST INCOME			7,875				9,946				1,922				2,325
INTEREST EXPENSE
DEPOSITS			1,397				2,578				276				525
BOND ISSUANCE			418				419				105				105
BORROWINGS			1,626				1,653				409				408
TOTAL INTEREST EXPENSE			3,441				4,650				790				1,038
NET INTEREST INCOME			4,434				5,296				1,132				1,287
(CREDIT) PROVISION FOR LOAN LOSSES			(191	)			1,113				(3	)			65
NET INTEREST INCOME AFTER
(CREDIT) PROVISION FOR LOAN LOSSES			4,625				4,183				1,135				1,222
NON-INTEREST INCOME			1,517				1,147				124				117
NON-INTEREST EXPENSE			7,364				7,119				1,849				1,777
INTEREST RATE CAP LOSS			-				(48	)			-				-
LOSS BEFORE INCOME TAXES			(1,222	)			(1,837	)			(590	)			(438	)
INCOME TAX EXPENSE (BENEFIT)			4				377				(251	)			1,291
NET LOSS		$	(1,226	)		$	(2,214	)		$	(339	)		$	(1,729	)

LINCOLN PARK BANCORP

CONSOLIDATED FINANCIAL RATIOS

(dollars in thousands, except per share amounts)

(unaudited)

		At or For the Year Ended								At or For the Three Months Ended
		December 31, 2021				December 31, 2020				December 31, 2021				December 31, 2020
(LOSS) EARNINGS PER SHARE:
BASIC		$	(0.71	)		$	(1.28	)		$	(0.20	)		$	(1.00	)
DILUTED		$	(0.71	)		$	(1.28	)		$	(0.20	)		$	(1.00	)
NET INTEREST MARGIN (NIM):
(Interest Income - Interest Expense)		$	4,434			$	5,296			$	1,132			$	1,287
Average Interest-Bearing Assets		$	275,051			$	295,823			$	259,178			$	300,907
			1.61	%			1.79	%			1.75	%			1.71	%
COST OF FUNDS:
Interest Expense		$	3,441			$	4,650			$	790			$	1,038
Average Interest-Bearing Liabilities		$	262,507			$	281,305			$	247,420			$	286,652
			1.31	%			1.65	%			1.28	%			1.45	%
RETURN ON AVERAGE ASSETS (ROA):
Net Income		$	(1,226	)		$	(2,214	)		$	(339	)		$	(1,729	)
Average Total Assets		$	285,444			$	307,100			$	269,409			$	312,074
			(0.43	%)			(0.72	%)			(0.50	%)			(2.22	%)
RETURN ON AVERAGE EQUITY (ROE):
Net Income		$	(1,226	)		$	(2,214	)		$	(339	)		$	(1,729	)
Average Stockholders' Equity		$	12,576			$	15,115			$	12,576			$	15,115
			(9.75	%)			(14.65	%)			(10.78	%)			(45.76	%)
NON-PERFORMING ASSETS (NPA):
Net Non-Performing Assets		$	2,394			$	4,299
Outstanding Loans		$	174,842			$	184,190
			1.37	%			2.33	%

SOURCE: Lincoln Park Bancorp

View source version on accesswire.com:
https://www.accesswire.com/698342/Lincoln-Park-Bancorp-Announces-Fourth-Quarter-and-2021-Annual-Results

FAQ

What were Lincoln Park Bancorp's net losses for 2021 and how do they compare to 2020?

Lincoln Park Bancorp reported net losses of $1.2 million for 2021, an improvement from $2.2 million in 2020.

What is the status of the merger between Lincoln Park Bancorp and Ion Financial?

The merger agreement was unanimously approved and is expected to be completed in the third quarter of 2022, subject to regulatory approvals.

What was the total asset value for Lincoln Park Bancorp as of December 31, 2021?

As of December 31, 2021, Lincoln Park Bancorp's total assets were $261.4 million, a decrease of 16.5% from the previous year.

How did Lincoln Park Bancorp's non-interest income perform in 2021?

Non-interest income increased by 32.3% to $1.5 million in 2021, compared to $1.1 million in 2020.

What was the fixed cash merger consideration for shareholders of Lincoln Park Bancorp?

The fixed cash merger consideration for Lincoln Park Bancorp shareholders is set at $10.10 per share.