Lumbee Guaranty Bank Reports 4th Quarter 2021 Earnings

Rhea-AI Summary

Lumbee Guaranty Bank reported strong quarterly earnings of $925,000 and record annual earnings of $4.023 million for the year ended December 31, 2021. This represents an increase in earnings per share from $0.25 to $0.28 quarter-over-quarter and $0.73 to $1.20 year-over-year. Key growth drivers included a 16.4% increase in deposits and improved asset quality, leading to a credit for loan losses. Net interest income rose 13.25% to $3.62 million, while noninterest income grew by 22.11%. However, total loans decreased by 15.10% due to Paycheck Protection Program loan forgiveness.

Positive

• Net income increased to $4.023 million for 2021, up 62.89% year-over-year.
• Deposits grew by 16.4% to $421.6 million, enhancing liquidity.
• Net interest income rose by 13.25% to $3.62 million in Q4 2021.

Negative

• Total loans decreased by 15.10% to $180.7 million due to PPP loan forgiveness.
• Noninterest expense increased by 16.28% to $3.12 million in Q4 2021.

Company reports strong quarterly earnings, record annual earnings and improving asset quality

• $925 thousand in net income for the quarter-ended December 31, 2021.
• 13.4% asset growth, driven by a 16.4% increase in deposits.
• Improving asset quality led to a credit for loan losses.

PEMBROKE, NC / ACCESSWIRE / February 14, 2022 / For the quarter ended December 31, 2021, Lumbee Guaranty Bank ("Lumbee" or "Bank"), reported net income of $925,000, or earnings per share of $0.28, compared to net income of $853,000, or earnings per share of $0.25, for the same period in 2020. For the twelve-month period ended as of the same date, Lumbee reported net income of $4.023 million in 2021, or earnings per share of $1.20, compared to net income of $2.468 million for the twelve months ended December 31, 2020, or earnings per share of $0.73. The primary causes of the increase in net income compared to prior periods were an increase in interest income, a decrease in interest expense, and a credit for loan losses compared to a provision during the same period in 2020.

As of December 31, 2021, Lumbee reported assets of $473.3 million, an increase of 13.44% from assets of $417.2 million as of December 31, 2020. Due to receipt of forgiveness from the Small Business Administration of Paycheck Protection Program (PPP) loans, loans were down 15.10% to $180.7 million, compared to loans of $212.9 million reported December 31, 2020. Deposits grew to $421.6 million at year-end, an increase of 16.43% over December 31, 2020 deposits of $362.1 million. Capital levels remained healthy, as shareholders' equity totaled $43.3 million, or 9.14% of assets at December 31, 2021, versus $43.0 million, or 10.29% of assets at the year-ago date.

Net interest income totaled $3.62 million in the fourth quarter of 2021, up 13.25% from $3.20 million in the year-ago quarter. The growth was due to higher average earning assets, specifically in the Bank's investment portfolio, along with reallocating lower-yielding PPP loans to higher-yielding investments and loans. Additionally, the drop in interest expense from $295 thousand for the fourth quarter of 2020 to $156 thousand in 2021 contributed to the improvement in net interest income.

As asset quality continues to improve, the Bank was able to recognize a credit of $125 thousand in the quarter ending December 31, 2021, compared to no provision in 2020's fourth quarter. Nonperforming assets ("NPAs") at December 31, 2021, (including nonaccruing loans, loans more than 90 days past due and still accruing, and OREO) were $2.1 million, or 0.44% of total assets, which was down 19.23% from $2.6 million, or 0.55% of total assets, at September 30, 2021, and down 52.27% from $4.4 million, or 1.06% of total assets, at December 31, 2020. The allowance for loan losses was $2.04 million, or 1.13% of gross loans, at December 31, 2021, versus $2.4 million, or 1.05% of gross loans, at the year-ago date.

Noninterest income increased by 22.11% from $475 thousand in the quarter ending December 31, 2020 to $580 thousand at quarter-end due to increased service charges on deposit accounts. Noninterest expense was $3.12 million in the fourth quarter of 2021, up 16.28% from $2.68 million in the year-ago quarter. The increased expenses were due to a combination of increased personnel costs, accelerating payment of certain prepaid items, and higher data processing fees.

"As we celebrated the Bank's 50^th anniversary in 2021, I can think of no better way to commemorate this occasion than by posting record earnings" said Kyle R. Chavis, Chief Executive Officer of Lumbee. "Being able to recognize fees from the Paycheck Protection Program loans we originated in 2020 and 2021 contributed to our strong earnings. However, excluding PPP fees and other nonrecurring items, our pretax income was still up 12%. With our management of expenses, our improving asset quality, and our continued strong deposit growth, I am pleased with our financial results for 2021." Chavis continued, "Our earnings and growth are the results of a capable and committed workforce who love to serve our customers. We look forward to continuing to deliver stable returns for our shareholders in 2022."

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.

The information as of and for the quarter ended December 31, 2021, 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, our limited operating history, 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.

Contact:

Kyle R. Chavis, Chief Executive Officer
Lumbee Guaranty Bank
(910) 521-9707; kylechavis@lumbeeguarantybank.com; www.lumbeeguarantybank.com

LUMBEE GUARANTY BANK
Balance Sheets (unaudited) December 31,

		2021				2020
		(Dollars in thousands)
Assets
Cash and due from banks		$	5,561			$	5,482
Interest-earning deposits with banks			36,324				39,314
Total cash and cash equivalents			41,885				44,796
Net Investments			227,691				136,778
Loans receivable			180,743				212,897
Allowance for loan losses			2,042				2,361
Net loans receivable			178,701				210,536
Bank premises & equipment, net			8,435				8,922
Other assets			16,554				16,162
Total assets		$	473,266			$	417,194
Liabilities and Shareholders' Equity
Deposits:
Demand deposits, Money market & NOW		$	297,832			$	245,599
Savings			40,078				34,165
Time deposits			83,665				82,324
Total deposits			421,575				362,088
Securities Sold under Agreement to Repurchase			2,338				1,631
Other borrowed money			81				5,114
Accrued interest payable and other liabilities			6,024				5,413
Total liabilities			430,018				374,246
Total shareholders' equity			43,248				42,948
Total liabilities and shareholders' equity		$	473,266			$	417,194
Book value per share		$	12.87			$	12.69

LUMBEE GUARANTY BANK
Statement of Operations (unaudited) Twelve Months
Ended, December 31,

		2021				2020
		(Dollars in thousands, except per share data)
Interest Income			14,561				13,623
Interest Expense			722				1,472
Net Interest Income			13,839				12,151
Provision for loan losses			-325				300
Net Interest Income after provision			14,164				11,851
Service charges on deposit accounts			1,232				1,192
Other			980				766
Total noninterest Income			2,212				1,958
Realized gains/(loss) on AFS securities			-197				0
Personnel costs			6,525				6,184
Occupancy and equipment			1,564				1,532
Data processing fees			1,258				1,206
Other			2,225				2,112
Total noninterest expense			11,572				11,034
Net Income before income taxes			4,607				2,775
Income taxes			584				307
Net Income			4,023				2,468
Net income per common share		$	1.20			$	0.73

LUMBEE GUARANTY BANK
Statement of Operations (unaudited) Three Months Ended,
December 31,

		2021				2020
		(Dollars in thousands, except per share data)
Interest Income			3,779				3,494
Interest Expense			156				295
Net Interest Income			3,623				3,199
Provision for loan losses			-125				0
Net Interest Income after provision			3,748				3,199
Service charges on deposit accounts			356				303
Other			224				172
Total noninterest Income			580				475
Realized gains/(loss) on AFS securities			-183				0
Personnel costs			1,692				1,428
Occupancy and equipment			425				390
Data processing fees			311				298
Other			693				568
Total noninterest expense			3,121				2,684
Net Income before income taxes			1,024				990
Income taxes			99				137
Net Income			925				853
Net income per common share		$	0.28			$	0.25

SOURCE: Lumbee Guaranty Bank

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FAQ

What was Lumbee's net income for the quarter ended December 31, 2021?

Lumbee reported a net income of $925,000 for the quarter ended December 31, 2021.

How much did Lumbee's deposits grow by at year-end December 31, 2021?

Deposits grew by 16.4% to $421.6 million as of December 31, 2021.

What is Lumbee's earnings per share for 2021?

Lumbee's earnings per share for 2021 were $1.20, up from $0.73 in 2020.

How much did Lumbee's net interest income increase in Q4 2021?

Net interest income increased by 13.25% to $3.62 million in Q4 2021.

What percentage of total assets were nonperforming assets at December 31, 2021?

Nonperforming assets were 0.44% of total assets at December 31, 2021.