Lewis & Clark Bancorp Announces 2021 Fourth Quarter and Year to Date Results

Rhea-AI Summary

Lewis & Clark Bancorp (OTC Pink: LWCL) reported a strong financial performance for Q4 2021, with net income reaching $557,000, up from $519,000 year-over-year. Full-year net income totaled $3.8 million, a significant increase from $1.58 million in 2020. Earnings per share rose to $0.52 in Q4 and $3.47 for the year, driven by higher net interest and noninterest income. Total assets increased by 28.4% to $444.5 million, while total deposits grew by $103 million. The company anticipates challenges in 2022, including reduced earnings from PPP loans and inflationary pressures.

Positive

• Net income increased to $557,000 in Q4 2021, up from $519,000 in Q4 2020.
• Full-year net income surged to $3.8 million from $1.58 million in 2020.
• Earnings per share rose to $0.52 for Q4 and $3.47 for the year.
• Total consolidated assets reached $444.5 million, a 28.4% increase from 2020.
• Total deposits grew by $103 million, enhancing liquidity.

Negative

• Total gross loans decreased by $62.6 million, largely due to PPP loan forgiveness.
• Increased noninterest expense due to various rising costs, impacting profitability.
• Potential challenges in 2022 include decreased earnings from PPP loans and inflation.

OREGON CITY, Ore.--(BUSINESS WIRE)-- Lewis & Clark Bancorp (OTC Pink: LWCL) announces 2021 fourth quarter and year to date consolidated results. Quarter to date net income totaled $557,000 for the three months ended December 31, 2021, an increase of $38,000 compared to $519,000 for the same period last year. Earnings per share were $0.52 for the current year quarter, compared to $0.46 for the prior year quarter. Year to date net income totaled $3,800,000 an increase of $2,219,000 compared to $1,581,000 for the same period last year. Earnings per share were $3.47 for the current year period, compared to $1.39 for the prior year period.

The increased earnings in the current year quarter were due to an increase in both net interest income and noninterest income, partially offset by increases in both noninterest expense and the provision for income taxes compared to the same period one year ago. The increase in net interest income is due to an increase in interest and fees on loans and investments primarily due to increased earnings on investment securities, and a decrease in interest expense on deposits due to lower cost of funds. The increase in noninterest income was due to an increase in both the unrealized gains on equity securities and earnings from bank owned life insurance. The increase in noninterest expense was due to increases in salaries and employee benefits, data processing, FDIC assessment fees, professional fees, business related travel expenses, and a new local business tax related to metropolitan supportive housing, partially offset by a decline in intangible amortization. The increase in the provision for income taxes was due to increased pre-tax earnings compared to the prior year period.

The increased earnings in the current year period were due to an increase in net interest income, a decrease in the provision for loan losses, and an increase in noninterest income, partially offset by increases in both noninterest expense and the provision for income taxes compared to the same period one year ago. The increase in net interest income is due to an increase in interest and fees on loans primarily related to increased fees earned from the SBA Paycheck Protection Program (PPP) loans, increased earnings on investment securities and a decrease in interest expense on deposits due to lower cost of funds. These favorable variances were partially offset by an increase in interest expense on borrowings due to the subordinated debt issued in the prior year, and a decrease in interest earned on interest bearing cash balances. The decrease in the provision for loan losses was due to Management’s assessment of risk factors related to the ongoing COVID-19 pandemic and improved qualitative risk factors compared to the prior year. The increase in noninterest income was due to increases in interchange fees, earnings from bank owned life insurance, and unrealized gains on equity securities, partially offset by recording a gain on the liquidation of the securities portfolio in the prior year. The increase in noninterest expense was due to increases in salaries and employee benefits, occupancy expense, FDIC assessment fees, software license and maintenance fees, employee education, business related travel expenses, and bank service charges. These increases were partially offset by decreases in data processing, professional fees, and amortization for intangible assets.

Jeffrey Sumpter, President and CEO commented, “We are pleased to report record earnings during the current year period and strong balance sheet growth primarily as a result of increased deposits. We are also pleased to report that we have paid twenty-three consecutive quarters of shareholder dividends.” Sumpter continued, “As we look back on a year of record earnings, we also note that 2022 will present new challenges including: lower earnings absent the interest and fees earned on PPP loans; increased inflationary pressure; several anticipated rate increases as cited by the Federal Reserve’s Open Market Committee; and continued economic disruptions resulting from the ongoing negative impact of COVID-19.” Sumpter added, “In spite of these headwinds, we see good days ahead. We have marked 2022 as a year of strategic investment in several areas of the Company, with the ultimate intent of positioning for even greater success in 2023 and beyond. These investments include, among others, reengineering many of our back-office processes to support automation and scale; augmenting our already strong operations and compliance capabilities; and increasing staffing, technology and program support for a growing number of banking-as-a-service deployments.”

As of December 31, 2021, total consolidated assets were $444.5 million, an increase of $98.2 million, or 28.4%, compared to December 31, 2020. This increase was primarily due to increases in investment securities and total deposits, partially offset by declines in cash, gross loans and borrowings compared to the balances reported at December 31, 2020. Investment securities increased by $162.8 million primarily due to management’s decision to deploy excess liquidity into higher yielding assets compared to holding cash. Total deposits increased $103.0 million due to increases in noninterest-bearing and interest-bearing demand deposits, money market and savings deposits, and time deposits. Cash decreased by $6.7 million, primarily due to an increase in investment securities and the repayment of borrowings, partially offset by a decrease in gross loans and an increase in total deposits. Total gross loans decreased $62.6 million substantially due to $107.3. million in forgiveness related to the PPP loans partially offset by originating $44.7 million in new PPP loans. Borrowings decreased $5.9 million due to the repayment of funding provided through the Federal Reserve’s Paycheck Protection Program Liquidity Facility. Shareholders’ equity totaled $37.6 million at December 31, 2021, an increase of $753,000, compared to December 31, 2020. The increase was due to earnings of $3,800,000, partially offset by the Company repurchasing $1,983,000 of stock during the current year related to the Company’s share repurchase program, shareholder dividends totaling $331,000, and a $760,000 increase in unrealized losses on available for sale securities.

About Lewis & Clark Bancorp

Headquartered in Oregon City, Oregon, Lewis & Clark Bancorp is the holding company for Lewis & Clark Bank, a state-chartered full-service commercial bank. Partnering with people and businesses throughout Oregon and SW Washington, the Bank believes that being an integral part of the community it serves, helps promote both growth and success.

For more information about Lewis & Clark Bank, visit www.lewisandclarkbank.com.

Summary Balance Sheet
(dollars in thousands)
		December 31, 2021				December 31, 2020				$ Change				% Change
ASSETS
Cash		$	66,517			$	73,171			$	(6,654	)		-9.1	%
Equity Securities			2,117				702				1,415			201.6	%
Investment Securities			164,324				1,515				162,809			10746.5	%
Gross loans			193,657				256,233				(62,576	)		-24.4	%
Allowance for loan losses			(3,054	)			(3,043	)			(11	)		0.4	%
Net loans			190,603				253,190				(62,587	)		-24.7	%
Fixed Assets			7,232				7,210				22			0.3	%
Other Assets			13,715				10,510				3,205			30.5	%
Total Assets		$	444,508			$	346,298			$	98,210			28.4	%
LIABILITIES AND EQUITY
Deposits:
Noninterest-bearing		$	97,189			$	86,191			$	10,998			12.8	%
Interest-bearing demand			20,558				16,791				3,767			22.4	%
Money market and savings			237,681				149,915				87,766			58.5	%
Time deposits			42,527				42,082				445			1.1	%
Total deposits			397,955				294,979				102,976			34.9	%
Subordinated debentures, net			6,905				6,880				25			0.36	%
Borrowings			-				5,873				(5,873	)		-100.00	%
Other liabilities			2,019				1,690				329			19.5	%
Total liabilities			406,879				309,422				97,457			31.5	%
Equity			37,629				36,876				753			2.0	%
Total Liabilities and Equity		$	444,508			$	346,298			$	98,210			28.4	%
Net loans to deposits			47.90	%			85.83	%
Allowance for loan losses to total loans			1.58	%			1.19	%
DDA deposits to total deposits			24.42	%			29.22	%
Tangible book value per share		$	34.22			$	31.42

Summary Income Statement
(dollars in thousands)
		Three months ended December 31,								Full year ended December 31,
			2021				2020				2021				2020
Interest and fees on loans and investments		$	3,139			$	3,073			$	14,549			$	12,563
Interest expense			243				375				1,311				1,523
Net interest income			2,896				2,698				13,238				11,040
Provision for loan losses			-				-				-				1,055
Net interest income after provision			2,896				2,698				13,238				9,985
Noninterest income			307				183				1,046				937
Noninterest expense			2,454				2,226				9,189				8,854
Pre-tax income			749				655				5,095				2,068
Provision for income taxes			192				136				1,295				487
Net income		$	557			$	519			$	3,800			$	1,581
Return on average equity			5.87	%			5.64	%			10.15	%			4.36	%
Return on average assets			0.55	%			0.63	%			0.91	%			0.51	%
Net interest margin			3.01	%			3.47	%			3.36	%			3.82	%
Efficiency ratio			76.62	%			77.27	%			64.33	%			73.93	%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220301006180/en/

Jeffrey Sumpter – President and Chief Executive Officer

Phone: (503) 212-3107

John Lende – Executive Vice President and Chief Financial Officer

Phone: (503) 212-3141

Source: Lewis & Clark Bancorp

FAQ

What were the Q4 2021 net income results for LWCL?

LWCL reported a Q4 2021 net income of $557,000, up from $519,000 in Q4 2020.

How much did LWCL's total assets increase by in 2021?

Total consolidated assets increased by 28.4% to $444.5 million as of December 31, 2021.

What is LWCL's earnings per share for the full year 2021?

LWCL's earnings per share for the full year 2021 were $3.47, compared to $1.39 in 2020.

What challenges does LWCL foresee in 2022?

LWCL anticipates challenges such as lower earnings without PPP loan interest and inflationary pressures.

How did total deposits change for LWCL in 2021?

Total deposits increased by $103 million in 2021, contributing to improved liquidity.