Lumbee Guaranty Bank Reports 4th Quarter 2020 Earnings

Rhea-AI Summary

Lumbee Guaranty Bank (OTCQX:LUMB) reported a net income of $2.5 million for 2020, down 17.84% from 2019's $3.0 million. The decrease was attributed to lower net interest income and a loan loss provision of $300,000. However, the bank's 4th quarter net income rose to $853,000, surpassing $726,000 from the previous year. Total assets grew by 21.36% to $417.2 million, with loans increasing by 11.10% to $212.9 million and deposits up 22.29% to $362.1 million. Noninterest expenses were reduced by 2.54%, reflecting effective cost-containment measures.

Positive

• 4th quarter net income rose to $853,000, a 17.5% increase year-over-year.
• Total assets increased by 21.36% to $417.2 million.
• Loans grew by 11.10% to $212.9 million.
• Deposits increased by 22.29% to $362.1 million.
• Noninterest expense reduced by 2.54% to $11.03 million.

Negative

• Net income for the year declined by 17.84% to $2.5 million.
• Earnings per share decreased by 17.13% to $0.73.
• Net interest margin dropped by 55 basis points to 3.34%.
• Loan loss provision increased to $300,000 from a negative $100,000 last year.

Bank reports higher quarterly earnings but a decrease from prior year earnings

• $2.47 million in net income for 2020
• 4^th quarter of 2020 was up 17% over 4^th 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 4^th 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; kylechavis@lumbeeguarantybank.com; www.lumbeeguarantybank.com

LUMBEE GUARANTY BANK
Balance Sheets (unaudited) June 30,		2020				2019
		(Dollars in thousands)
Assets
Cash and due from banks		$	5,482			$	4,829
Interest-earning deposits with banks			39,314				26,243
Total cash and cash equivalents			44,796				31,072
Net Investments			136,778				99,294
Loans receivable			212,897				191,622
Allowance for loan losses			2,361				2,067
Net loans receivable			210,536				189,555
Bank premises & equipment, net			8,922				9,056
Other assets			16,162				14,776
Total assets		$	417,194			$	343,753
Liabilities and Shareholders' Equity
Deposits:
Demand deposits, Money market & NOW		$	245,599			$	184,058
Savings			34,165				26,384
Time deposits			82,324				85,652
Total deposits			362,088				296,094
Securities Sold under Agreement to Repurchase			1,631				1,096
Other borrowed money			5,114				825
Accrued interest payable and other liabilities			5,413				4,811
Total liabilities			374,246				302,826
Total shareholders' equity			42,948				40,927
Total liabilities and shareholders' equity		$	417,194			$	343,753
Book value per share		$	12.69			$	11.99

LUMBEE GUARANTY BANK
Statement of Operations (unaudited) Twelve Months Ended, December 31,		2020				2019
		(Dollars in thousands, except per share data)
Interest Income			13,623				14,436
Interest Expense			1,472				1,784
Net Interest Income			12,151				12,652
Provision for loan losses			300				-100
Net Interest Income after provision			11,851				12,752
Service charges on deposit accounts			1,192				1,350
Other			766				686
Total noninterest Income			1,958				2,036
Realized gains on AFS securities			0				25
Personnel costs			6,184				6,327
Occupancy and equipment			1,532				1,273
Data processing fees			1,206				1,400
Other			2,112				2,322
Total noninterest expense			11,034				11,322
Net Income before income taxes			2,775				3,491
Income taxes			307				487
Net Income			2,468				3,004
Net income per common share		$	0.73			$	0.88

LUMBEE GUARANTY BANK
Statement of Operations (unaudited) Three Months Ended, December 31,		2020				2019
		(Dollars in thousands, except per share data)
Interest Income			3,494				3,547
Interest Expense			295				471
Net Interest Income			3,199				3,076
Provision for loan losses			0				-100
Net Interest Income after provision			3,199				3,176
Service charges on deposit accounts			303				340
Other			172				157
Total noninterest Income			475				497
Realized gains on AFS securities			0				25
Personnel costs			1,428				1,613
Occupancy and equipment			390				302
Data processing fees			298				364
Other			568				573
Total noninterest expense			2,684				2,852
Net Income before income taxes			990				846
Income taxes			137				120
Net Income			853				726
Net income per common share		$	0.25			$	0.21

SOURCE: Lumbee Guaranty Bank

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FAQ

What is the net income for Lumbee Guaranty Bank in 2020?

Lumbee Guaranty Bank reported a net income of $2.5 million for the year 2020.

How much did Lumbee's earnings per share decline in 2020?

Earnings per share decreased by 17.13% to $0.73 for the year 2020.

What were the total assets of Lumbee Guaranty Bank as of December 31, 2020?

As of December 31, 2020, Lumbee's total assets were $417.2 million.

How much did Lumbee's deposits increase by in 2020?

Deposits increased by 22.29% to $362.1 million as of December 31, 2020.

What was the loan loss provision for Lumbee in 2020?

The loan loss provision for Lumbee in 2020 was $300,000.