Lewis & Clark Bancorp Announces 2022 Third Quarter and Year to Date Results

Rhea-AI Summary

Lewis & Clark Bancorp (OTC Pink: LWCL) reported a net income of $318,000 for Q3 2022, down $981,000 from $1,299,000 in Q3 2021. Earnings per share fell to $0.30 from $1.21. Key factors include decreased net interest income and increased noninterest expense, despite a drop in tax provisions. Year-to-date net income reached $1,217,000, a decline from $3,243,000 last year. Total assets decreased by 16.1% to $373.2 million, driven by declines in cash, loans, and deposits. Shareholders’ equity stood at $29.3 million, down from $37.6 million.

Positive

• Increase in noninterest income due to cash surrender value of life insurance and gains on equity securities.
• Twenty-six consecutive quarters of shareholder dividends paid.

Negative

• Net income decreased by $981,000 in Q3 2022 compared to Q3 2021.
• Earnings per share fell from $1.21 to $0.30 year-over-year.
• Net interest margin declined from 3.73% to 3.06%.
• Total assets decreased by $71.5 million or 16.1% compared to December 31, 2021.
• Shareholders' equity decreased by $8.3 million from December 31, 2021.

OREGON CITY, Ore.--(BUSINESS WIRE)-- Lewis & Clark Bancorp (OTC Pink: LWCL) announces 2022 third quarter and year to date consolidated results. Quarter to date net income totaled $318,000 for the three months ended September 30, 2022, a decrease of $981,000 compared to $1,299,000 for the same period last year. Earnings per share were $0.30 for the current year quarter, compared to $1.21 for the prior year quarter.

The decreased earnings in the current year quarter were due to a decrease in both net interest income and noninterest income and an increase in noninterest expense, partially offset by a decrease in the provision for income taxes compared to the same period one year ago. The decrease in net interest income was due to a decrease in interest and fees on loans, primarily due to a decline in interest and fees earned on the Paycheck Protection Program (PPP) loans in the prior year period, partially offset by an increase in interest on interest bearing cash and investment securities, and a decrease in interest expense due to lower rates paid on deposits. Net interest margin was 3.06% for the current year quarter compared to 3.73% for the same period one year ago. The decrease in the net interest margin was primarily due to a decrease in interest and fees earned from the PPP loans, as well as the reinvestment of cash received upon forgiveness of the related loans into lower yielding investment securities. The increase in noninterest expense was due to increases in salaries and employee benefits, advertising and marketing, professional fees, software license and maintenance, and various other overhead expenses, partially offset by a decrease in both the FDIC assessment and intangible amortization. The increased noninterest expense is primarily due to our long-range strategic investment and growth initiatives, which are now in full implementation mode. These include infrastructure and channel partnership development to support banking-as-a-service, (Baas) lending platforms, and payments; automation efforts to support scale; and overall, back-office operational efficiencies. These infrastructure and channel partnership investments are anticipated to continue at similar levels into the first half of 2023, before tapering off or being offset by associated revenue. The decrease in the provision for income taxes was due to a decrease in pre-tax earnings compared to the prior year period.

Year to date net income totaled $1,217,000, or $1.13 per share, compared to $3,243,000, or $2.94 per share for the same period last year. The decreased earnings in the current year period were due to a decrease in net interest income and an increase in noninterest expense, partially offset by an increase in noninterest income and a decrease in the provision for income taxes compared to the same period one year ago. Except for noninterest income, the decreased earnings for the year-to-date period are substantially the same as those for the current year quarter as previously discussed. The increase in noninterest income was due to increases in both earnings from cash surrender value of life insurance and gains on equity securities compared to the prior year period, partially offset by a decline in proceeds from life insurance received in the prior year period.

Jeffrey Sumpter, President and CEO, commented, “Although our quarterly and year to date earnings are less than those reported in the prior year periods, they are in line with our expectations given the many and previously announced strategic investment and growth initiatives that are now in full implementation mode.” Sumpter added, “We continue to move forward with these initiatives which are designed to augment and diversify revenue, ensure capacity to scale, and improve overall efficiencies as we move forward into the coming years. Our balance sheet is well positioned to accommodate anticipated loan and deposit growth arising from the several strategic partnerships that have recently gone live or will go live over the next two quarters. We are also pleased to report that we have paid twenty-six consecutive quarters of shareholder dividends.”

As of September 30, 2022, total consolidated assets were $373.2 million, a decrease of $71.5 million, or 16.1%, compared to December 31, 2021, primarily due to decreases in cash, investment securities, gross loans, and total deposits, partially offset by an increase in other assets and borrowings. Investment securities decreased by $13.6 million substantially due to a $12.8 million increase in unrealized losses. Gross loans decreased by $20.5 million primarily due to principal reductions and payoffs exceeding new originations. Total deposits decreased $83.5 million, which was expected given the increased growth in the prior year related to the deposits generated from PPP loans. Total other assets increased by $3.6 million due to an increase in deferred taxes related to unrealized losses on investment securities. Shareholders’ equity totaled $29.3 million at September 30, 2022, a decrease of $8.3 million, compared to $37.6 million at December 31, 2021. The decrease was due to a $9.3 million increase in unrealized losses on investment securities, and shareholder dividends totaling $241,000, partially offset by earnings of $1,217,000.

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—whether in our local geographic footprint within Oregon and SW Washington or through select channel partnerships nationally—we believe that being an integral part of the community we serve helps promote both growth and success for all stakeholders.

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

Forward-looking Statements

Statements included in this press release that are not historical or current fact are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. Lewis & Clark Bancorp disclaims any obligation to subsequently revise any forward-looking statements to reflect events or circumstances after the date of such statements, or to reflect the occurrence of anticipated or unanticipated events or circumstances.

Summary Balance Sheet
(dollars in thousands)
		September 30, 2022				December 31, 2021				$ Change				% Change
ASSETS
Cash		$	25,337			$	66,517			$	(41,180	)		-61.9	%
Equity Securities			2,512				2,117				395			18.7	%
Investment Securities			150,728				164,324				(13,596	)		-8.3	%
Gross loans			173,149				193,657				(20,508	)		-10.6	%
Allowance for loan losses			(3,058	)			(3,054	)			(4	)		0.1	%
Net loans			170,091				190,603				(20,512	)		-10.8	%
Fixed Assets			7,031				7,232				(201	)		-2.8	%
Other Assets			17,468				13,830				3,638			26.3	%
Total Assets		$	373,167			$	444,623			$	(71,456	)		-16.1	%
LIABILITIES AND EQUITY
Deposits:
Noninterest-bearing		$	103,950			$	97,189			$	6,761			7.0	%
Interest-bearing demand			16,601				20,558				(3,957	)		-19.2	%
Money market and savings			161,574				237,681				(76,107	)		-32.0	%
Time deposits			32,324				42,527				(10,203	)		-24.0	%
Total deposits			314,449				397,955				(83,506	)		-21.0	%
Subordinated debentures, net			6,924				6,905				19			0.28	%
Borrowings			21,000				-				21,000			100.00	%
Other liabilities			1,504				2,134				(630	)		-29.5	%
Total liabilities			343,877				406,994				(63,117	)		-15.5	%
Equity			29,290				37,629				(8,339	)		-22.2	%
Total Liabilities and Equity		$	373,167			$	444,623			$	(71,456	)		-16.1	%
Net loans to deposits			54.09	%			47.90	%
Allowance for loan losses to total loans			1.77	%			1.58	%
DDA deposits to total deposits			33.06	%			24.42	%
Tangible book value per share		$	27.12			$	34.22

Summary Income Statement
(dollars in thousands)
		Three months ended September 30,								Nine months ended September 30,
			2022				2021				2022				2021
Interest and fees on loans and investments		$	2,999			$	4,224			$	9,247			$	11,410
Interest expense			263				330				733				1,068
Net interest income			2,736				3,894				8,514				10,342
Provision for loan losses			-				-				-				-
Net interest income after provision			2,736				3,894				8,514				10,342
Noninterest income			221				226				804				739
Noninterest expense			2,542				2,362				7,711				6,735
Pre-tax income			415				1,758				1,607				4,346
Provision for income taxes			97				459				390				1,103
Net income		$	318			$	1,299			$	1,217			$	3,243
Return on average equity			4.07	%			13.92	%			4.88	%			11.61	%
Return on average assets			0.33	%			1.17	%			0.40	%			1.03	%
Net interest margin			3.06	%			3.73	%			2.97	%			3.47	%
Efficiency ratio			85.96	%			57.33	%			82.75	%			60.78	%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20221114006123/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 key financial results for Lewis & Clark Bancorp in Q3 2022?

Lewis & Clark Bancorp reported a net income of $318,000 and earnings per share of $0.30 in Q3 2022.

How did Lewis & Clark Bancorp's earnings in Q3 2022 compare to Q3 2021?

Earnings decreased by $981,000 in Q3 2022 compared to $1,299,000 in Q3 2021.

What caused the decline in net interest income for Lewis & Clark Bancorp?

The decrease was primarily due to a reduction in interest and fees earned on Paycheck Protection Program (PPP) loans.

What is the current status of Lewis & Clark Bancorp's total assets?

As of September 30, 2022, total assets were $373.2 million, down 16.1% from the previous year.

How many consecutive quarters has Lewis & Clark Bancorp paid dividends?

Lewis & Clark Bancorp has paid dividends for twenty-six consecutive quarters.