OREGON CITY, Ore.--(BUSINESS WIRE)--Lewis & Clark Bancorp (OTC Pink: LWCL) announces 2021 second quarter and year to date consolidated results. As a result of the Lewis & Clark Bancorp holding company reorganization and merger, effective as of July 31, 2020, the current period financial discussion reflects the Lewis & Clark Bancorp consolidated summary balance sheet for both periods presented. The current year summary income statements in this release reflect Lewis & Clark Bancorp consolidated, while the comparative prior year period is Lewis & Clark Bank only. As the results presented are substantially the performance of Lewis & Clark Bank, management believes there is not a material difference related to disclosing the current and comparative results as presented.
Quarter to date net income totaled $1,034,000 for the three months ended June 30, 2021, an increase of $417,000 compared to $617,000 for the same period last year. Earnings per share were $0.94 for the current year quarter, compared to $0.54 for the prior year quarter.
The increased earnings in the current year quarter were due to an increase in net interest income and a decrease in the provision for loan losses, partially offset by a decrease in noninterest income and 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 interest and fees earned from the SBA Paycheck Protection Program (PPP) loans and a decrease in interest expense on deposits due to Management’s decision to lower the cost of funds to reflect market conditions. 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 decline in interest earned on investments due to liquidating the investment portfolio in the prior year. 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 decrease in noninterest income was due to a realized gain on the liquidation of the investment portfolio in the prior year quarter, partially offset by increases in interchange fees due to an increase in debit cards, earnings from bank owned life insurance and unrealized gains on equity securities. The increase in noninterest expense was due to an increase in salaries and employee benefits and bank service charges, partially offset by declines in both professional fees and intangible amortization. The increase in the provision for income taxes was due to increased pre-tax earnings compared to the prior year period.
Year to date net income totaled $1,944,000, or $1.74 per share, compared to $743,000, or $0.66 per share for the same period last year. The increased earnings in the current year period were due to an increase in net interest income and a decrease in both the provision for loan losses and noninterest expense, partially offset by a decrease in noninterest income and an increase in the provision for income taxes compared to the same period one year ago. With the exception of noninterest expense, the increased earnings for the year-to-date period are substantially the same as those for the current year quarter as previously discussed. The decrease in noninterest expense was due to decreases in data processing related to the core conversion in the prior year, professional fees related to expenses incurred in the prior year to form the parent holding company, and intangible amortization. These decreases were partially offset by an increase in salaries and employee benefits due to an increase in wages and a decrease in deferred origination fees related to the PPP loans and an increase in occupancy expense related to our new loan production office in Vancouver.
Jeffrey Sumpter, President and CEO, commented, “We are pleased to report increased earnings during the current year period and continued strong balance sheet growth primarily as a result of increased deposits. We are also pleased to report that we have paid 21 consecutive quarters of shareholder dividends.” Sumpter continued, “Although we have experienced an increase in earnings during the current year, we expect that the additional interest and fees earned from the PPP loans will be exhausted by the end of the year, and despite our ongoing efforts to lower our overall cost of funds and control expenses we expect that the extended low interest rate environment, continued economic headwinds, and soft loan demand will create earnings challenges as we move forward.”
As of June 30, 2021, total consolidated assets were $437.2 million, an increase of $90.9 million, or 26.3%, compared to December 31, 2020. This increase was primarily due to increases in cash, and total deposits, partially offset by a decline in gross loans and borrowings compared to the balances reported at December 31, 2020. Cash increased by $106.0 million, primarily due to an increase in total deposits and a decrease in gross loans, partially offset by the repayment of borrowings. Total deposits increased $96.6 million primarily due to increases in noninterest-bearing and interest-bearing demand deposits, related to the PPP loans, as well as money market and savings deposits, partially offset by a decline in time deposits. The decrease in time deposits is due to depositor’s preference to hold their balances in liquid accounts as well as adjusting deposit rates to reflect current market conditions and allowing higher rate deposits to transition out. Total gross loans decreased $19.3 million substantially due to $60.1 million in forgiveness related to the PPP loans and principal reductions on existing 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 $36.9 million at June 30, 2021, an increase of $19,000, compared to December 31, 2020. The increase was due to earnings of $1,944,000, substantially offset by the Company repurchasing $1,771,000 of stock during the current year related to the Company’s share repurchase program, and shareholder dividends totaling $168,000.
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 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 |
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(dollars in thousands) |
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June 30, 2021 |
December 31, 2020 |
$ Change |
% Change |
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ASSETS |
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Cash |
$ 179,126 |
|
$ 73,171 |
|
$ 105,955 |
|
144.8 |
% |
||||
Equity Securities |
1,962 |
|
702 |
|
1,260 |
|
179.5 |
% |
||||
Investment Securities |
1,515 |
|
1,515 |
|
- |
|
0.0 |
% |
||||
Gross loans |
236,967 |
|
256,233 |
|
(19,266 |
) |
-7.5 |
% |
||||
Allowance for loan losses |
(3,054 |
) |
(3,043 |
) |
(11 |
) |
0.4 |
% |
||||
Net loans |
233,913 |
|
253,190 |
|
(19,277 |
) |
-7.6 |
% |
||||
Fixed Assets |
7,339 |
|
7,210 |
|
129 |
|
1.8 |
% |
||||
Other Assets |
13,383 |
|
10,510 |
|
2,873 |
|
27.3 |
% |
||||
Total Assets |
$ 437,238 |
|
$ 346,298 |
|
$ 90,940 |
|
26.3 |
% |
||||
LIABILITIES AND EQUITY |
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Deposits: |
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Noninterest-bearing |
$ 116,760 |
|
$ 86,191 |
|
$ 30,569 |
|
35.5 |
% |
||||
Interest-bearing demand |
17,871 |
|
16,791 |
|
1,080 |
|
6.4 |
% |
||||
Money market and savings |
216,976 |
|
149,915 |
|
67,061 |
|
44.7 |
% |
||||
Time deposits |
39,980 |
|
42,082 |
|
(2,102 |
) |
-5.0 |
% |
||||
Total deposits |
391,587 |
|
294,979 |
|
96,608 |
|
32.8 |
% |
||||
Subordinated debentures, net |
6,893 |
|
6,880 |
|
13 |
|
0.19 |
% |
||||
Borrowings |
- |
|
5,873 |
|
(5,873 |
) |
-100.0 |
% |
||||
Other liabilities |
1,863 |
|
1,690 |
|
173 |
|
10.2 |
% |
||||
Total liabilities |
400,343 |
|
309,422 |
|
90,921 |
|
29.4 |
% |
||||
Equity |
36,895 |
|
36,876 |
|
19 |
|
0.1 |
% |
||||
Total Liabilities and Equity |
$ 437,238 |
|
$ 346,298 |
|
$ 90,940 |
|
26.3 |
% |
||||
Net loans to deposits |
59.73 |
% |
85.83 |
% |
||||||||
Allowance for loan losses to total loans |
1.29 |
% |
1.19 |
% |
||||||||
DDA deposits to total deposits |
29.82 |
% |
29.22 |
% |
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Tangible book value per share |
$ 33.19 |
|
$ 31.42 |
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Summary Income Statement |
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(dollars in thousands) |
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Three months ended June 30, |
Six months ended June 30, |
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2021 |
|
2020 |
|
2021 |
|
2020 |
|
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Interest and fees on loans and investments |
$ 3,682 |
|
$ 3,277 |
|
$ 7,195 |
|
$ 6,380 |
|
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Interest expense |
378 |
|
328 |
|
738 |
|
849 |
|
||||
Net interest income |
3,304 |
|
2,949 |
|
6,457 |
|
5,531 |
|
||||
Provision for loan losses |
- |
|
427 |
|
- |
|
627 |
|
||||
Net interest income after provision |
3,304 |
|
2,522 |
|
6,457 |
|
4,904 |
|
||||
Noninterest income |
345 |
|
455 |
|
504 |
|
568 |
|
||||
Noninterest expense |
2,293 |
|
2,147 |
|
4,373 |
|
4,484 |
|
||||
Pre-tax income |
1,356 |
|
830 |
|
2,588 |
|
988 |
|
||||
Provision for income taxes |
322 |
|
213 |
|
644 |
|
245 |
|
||||
Net income |
$ 1,034 |
|
$ 617 |
|
$ 1,944 |
|
$ 743 |
|
||||
Return on average equity |
11.20 |
% |
6.83 |
% |
10.51 |
% |
4.14 |
% |
||||
Return on average assets |
0.96 |
% |
0.80 |
% |
0.95 |
% |
0.50 |
% |
||||
Net interest margin |
3.24 |
% |
4.07 |
% |
3.34 |
% |
3.99 |
% |
||||
Efficiency ratio |
62.84 |
% |
63.07 |
% |
62.82 |
% |
77.40 |
% |
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