2023 Third Quarter Financial Highlights:
- Total assets were $188.3 million at quarter end.
- Asset quality is excellent with zero nonperforming assets at quarter end.
- Total deposits increased to $ 143.1 million at quarter end.
- Net interest margin of 2.64% for the third quarter.
- Tangible book value per share increased to $7.71 at quarter end.
POULSBO, Wash., Oct. 27, 2023 (GLOBE NEWSWIRE) -- Liberty Northwest Bancorp, Inc. (OTCQX: LBNW) (the “Company”) and its wholly-owned subsidiary Liberty Bank today announced earnings of $6 thousand for the third quarter ended September 30, 2023, compared to $18 thousand reported in the second quarter ended June 30, 2023, and $187 thousand in the third quarter ended September 30, 2022. In the first nine months of 2023, net income was $33 thousand, compared to $391 thousand the same period in 2022.
Total assets increased to $188.3 million as of September 30, 2023, compared to $186.2 million at September 30, 2022. Net loans totaled $139.2 million as of September 30, 2023, compared to $139.0 million at June 30, 2023 and $146.3 million a year ago. Loan demand has tapered off modestly compared to a year ago primarily due to the high interest rate environment.
Asset quality remained strong during the quarter, with no non-performing assets as of September 30, 2023, or as of June 30, 2023. The allowance for credit losses totaled $1.23 million as of September 30, 2023, and was 0.87% of total loans outstanding. The Company recorded no net loan charge-offs during the quarter.
The Company recorded a $25 thousand reversal to its provision for credit losses in the third quarter of 2023, compared to a $50 thousand reversal to its provision for credit losses in the second quarter of 2023 and a $60 thousand provision for loan losses in the third quarter of 2022, as a result of improved credit metrics and performance.
Total deposits increased to $143.1 million at September 30, 2023 compared to $140.5 million at June 30, 2023 and decreased compared to $156.3 million a year earlier. Non-interest bearing demand accounts represented 30.5%, interest bearing demand represented 21.6%, money market and savings accounts comprised 19.0% and certificates of deposit made up 28.9% of the total deposit portfolio at September 30, 2023.
“At a time of margin compression across the banking industry, we were effective at expanding our net interest margin during the third quarter, compared to the preceding quarter. This was driven by several actions we implemented earlier in the year to mitigate net interest margin compression against higher interest rates,” said Rick Darrow, Liberty Northwest Bancorp, Inc. President and Chief Executive Officer.
The Company’s net interest margin was 2.64% for the third quarter of 2023, compared to 2.51% for the preceding quarter, and 3.35% for the third quarter of 2022. For the first nine months of 2023, the net interest margin was 2.62%, compared to 3.20% for the first nine months of 2022.
Total non-interest income was $111 thousand for the third quarter of 2023, compared to $43 thousand in the third quarter a year ago. The year-over-year 159% increase was primarily due to an increase in referral income. For the first nine months of 2023, non-interest income increased to $371 thousand, compared to $148 thousand for the first nine months of 2022, an increase of $223 thousand or 151%.
Total noninterest expense was $1.26 million for the third quarter of 2023, an increase of $37 thousand, or 3%, from the third quarter a year ago. Compensation and benefits costs increased by $43 thousand, or 6%, over the prior year quarter. During the third quarter of 2022, the Company moved into its new headquarters in Poulsbo. The banking center is in a desirable location in Poulsbo and is large enough to accommodate future growth for the bank well into the next decade. Occupancy costs increased by 2% from prior quarter of last year. Year-to-date, total noninterest expense increased $19 thousand, or 1.0%, to $3.73 million, over the same period in 2022.
Capital ratios continue to exceed regulatory requirements, with a total risk-based capital ratio at 15.48% at quarter end, substantially above well-capitalized regulatory requirements. The tangible book value per share increased to $7.71 at quarter end, compared to $7.40 a year earlier.
The Company reported the level of uninsured deposits at quarter end was approximately 30% at September 30, 2023, compared to 29% three months earlier, excluding the collateralized portion of public deposits.
“We remain focused on being a reliable resource for our customers and communities through all economic cycles,” said Darrow. “As we look to the remainder of the year and into 2024, we will continue to look for opportunities to grow our client base and take advantage of recent market disruptions in our Pacific Northwest markets.”
About Liberty Northwest Bancorp, Inc.
Liberty Northwest Bancorp, Inc. is the bank holding company for Liberty Bank, a commercial bank chartered in the State of Washington. The Bank began operations June 11, 2009, and operates a full-service branch in Poulsbo, WA in addition to a loan production office in Bellevue, WA. The Bank provides loan and deposit services to predominantly small and middle-sized businesses and individuals in and around Kitsap and King counties. The Bank is subject to regulation by the State of Washington Department of Financial Institutions and the Federal Deposit Insurance Corporation (FDIC). For more information, please visit www.libertybanknw.com. Liberty Northwest Bancorp, Inc. (OTCQX: LBNW), qualified to trade on the OTCQX® Best Market in June 2022. For information related to the trading of LBNW, please visit www.otcmarkets.com.
For further discussion, please contact the following:
Rick Darrow, Chief Executive Officer | 360-394-4750
Joel Keller, Chief Financial Officer | 360-394-4752
Forward-Looking Statement Safe Harbor: This news release contains comments or information that constitutes forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) that are based on current expectations that involve a number of risks and uncertainties. Forward-looking statements describe Liberty Northwest Bancorp, Inc.’s projections, estimates, plans and expectations of future results and can be identified by words such as “believe,” “intend,” “estimate,” “likely,” “anticipate,” “expect,” “looking forward,” and other similar expressions. They are not guarantees of future performance. Actual results may differ materially from the results expressed in these forward-looking statements, which because of their forward-looking nature, are difficult to predict. Investors should not place undue reliance on any forward-looking statement, and should consider factors that might cause differences including but not limited to the degree of competition by traditional and nontraditional competitors, declines in real estate markets, an increase in unemployment or sustained high levels of unemployment; changes in interest rates; greater than expected costs to integrate acquisitions, adverse changes in local, national and international economies; changes in the Federal Reserve’s actions that affect monetary and fiscal policies; changes in legislative or regulatory actions or reform, including without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act; demand for products and services; changes to the quality of the loan portfolio and our ability to succeed in our problem-asset resolution efforts; the impact of technological advances; changes in tax laws; and other risk factors. Liberty Northwest Bancorp, Inc. undertakes no obligation to publicly update or clarify any forward-looking statement to reflect the impact of events or circumstances that may arise after the date of this release.
| STATEMENTS OF INCOME (Unaudited) | ||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||
| Quarter Ended Sept 30, 2023 | Quarter Ended June 30, 2023 | Three Month Change | Quarter Ended Sept 30, 2022 | One Year Change | Year to Date Sept 30, 2023 | Year to Date Sept 30, 2022 | One Year Change | |||||||||||||||||||||||
| Interest Income | ||||||||||||||||||||||||||||||
| Loans | $ | 1,814 | $ | 1,783 | 2 | % | $ | 1,567 | 16 | % | $ | 5,283 | $ | 4,421 | 19 | % | ||||||||||||||
| Interest bearing deposits in banks | 99 | 82 | 21 | % | 22 | 348 | % | 222 | 49 | 356 | % | |||||||||||||||||||
| Securities | 119 | 114 | 4 | % | 102 | 16 | % | 343 | 283 | 21 | % | |||||||||||||||||||
| Total interest income | 2,032 | 1,997 | 2 | % | 1,692 | 20 | % | 5,867 | 4,753 | 23 | % | |||||||||||||||||||
| Interest Expense | ||||||||||||||||||||||||||||||
| Deposits | 544 | 515 | 6 | % | 105 | 420 | % | 1,484 | 239 | 521 | % | |||||||||||||||||||
| Other Borrowings | 352 | 352 | -0 | % | 104 | 240 | % | 1,012 | 304 | 233 | % | |||||||||||||||||||
| Total interest expense | 896 | 867 | 3 | % | 208 | 330 | % | 2,497 | 543 | 360 | % | |||||||||||||||||||
| Net Interest Income | 1,136 | 1,130 | 1 | % | 1,483 | -23 | % | 3,370 | 4,210 | -20 | % | |||||||||||||||||||
| Provision for Loan Losses | (25 | ) | (50 | ) | -50 | % | 60 | -142 | % | (45 | ) | 150 | -130 | % | ||||||||||||||||
| Net interest income after provision for loan losses | 1,161 | 1,180 | -2 | % | 1,423 | -18 | % | 3,415 | 4,060 | -16 | % | |||||||||||||||||||
| Non-Interest Income | ||||||||||||||||||||||||||||||
| Service charges on deposit accounts | 17 | 18 | -3 | % | 15 | 15 | % | 50 | 39 | 29 | % | |||||||||||||||||||
| Other non-interest income | 94 | 112 | -16 | % | 28 | 235 | % | 321 | 109 | 194 | % | |||||||||||||||||||
| Total non-interest income | 111 | 130 | -14 | % | 43 | 159 | % | 371 | 148 | 151 | % | |||||||||||||||||||
| Non-Interest Expense | ||||||||||||||||||||||||||||||
| Salaries and employee benefits | 737 | 720 | 2 | % | 694 | 6 | % | 2,149 | 2,139 | 0 | % | |||||||||||||||||||
| Occupancy and equipment expenses | 145 | 158 | -8 | % | 142 | 2 | % | 444 | 433 | 3 | % | |||||||||||||||||||
| Other operating expenses | 382 | 391 | -2 | % | 391 | -2 | % | 1,136 | 1,139 | -0 | % | |||||||||||||||||||
| Total non-interest expenses | 1,264 | 1,269 | -0 | % | 1,227 | 3 | % | 3,729 | 3,710 | 1 | % | |||||||||||||||||||
| Net Income Before Income Tax | 8 | 23 | -67 | % | 239 | -97 | % | 42 | 497 | -92 | % | |||||||||||||||||||
| Provision for Income Tax | (2 | ) | (5 | ) | -67 | % | (52 | ) | -97 | % | (9 | ) | (107 | ) | -92 | % | ||||||||||||||
| Net Income | $ | 6 | $ | 18 | -67 | % | $ | 187 | -97 | % | $ | 33 | $ | 391 | -91 | % | ||||||||||||||
| BALANCE SHEETS (Unaudited) | |||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
| Sept 30, 2023 | June 30, 2023 | Three Month Change | Sept 30, 2022 | One Year Change | |||||||||||||||
| Assets | |||||||||||||||||||
| Cash and due from Banks | $ | 3,359 | $ | 2,352 | 43 | % | $ | 2,982 | 13 | % | |||||||||
| Interest bearing deposits in banks | 11,635 | 12,674 | -8 | % | 4,470 | 160 | % | ||||||||||||
| Securities | 24,316 | 23,069 | 5 | % | 23,620 | 3 | % | ||||||||||||
| Loans | 140,467 | 139,844 | 0 | % | 147,497 | -5 | % | ||||||||||||
| Allowance for loan losses | (1,227 | ) | (1,252 | ) | -2 | % | (1,190 | ) | 3 | % | |||||||||
| Net Loans | 139,240 | 138,592 | 0 | % | 146,307 | -5 | % | ||||||||||||
| Premises and fixed assets | 6,512 | 6,615 | -2 | % | 6,370 | 2 | % | ||||||||||||
| Accrued Interest receivable | 678 | 642 | 6 | % | 630 | 8 | % | ||||||||||||
| Intangible assets | 46 | 52 | -13 | % | 72 | -36 | % | ||||||||||||
| Other assets | 2,534 | 3,107 | -18 | % | 1,704 | 49 | % | ||||||||||||
| Total Assets | $ | 188,320 | $ | 187,104 | 1 | % | $ | 186,154 | 1 | % | |||||||||
| Liabilities and Shareholders' Equity | |||||||||||||||||||
| Deposits | |||||||||||||||||||
| Demand, non-interest bearing | $ | 43,702 | $ | 43,382 | 1 | % | $ | 50,162 | -13 | % | |||||||||
| Interest Bearing Demand | 30,865 | 25,288 | 22 | % | 37,940 | -19 | % | ||||||||||||
| Money Market and Savings | 27,207 | 37,339 | -27 | % | 56,909 | -52 | % | ||||||||||||
| Certificates of Deposit | 41,317 | 34,476 | 20 | % | 11,302 | 266 | % | ||||||||||||
| Total Deposits | 143,091 | 140,486 | 2 | % | 156,313 | -8 | % | ||||||||||||
| Total Borrowing | 31,923 | 33,415 | -4 | % | 17,392 | 84 | % | ||||||||||||
| Accrued interest payable | 303 | 238 | 27 | % | 3 | 10604 | % | ||||||||||||
| Other liabilities | 316 | 365 | -13 | % | 341 | -7 | % | ||||||||||||
| Total Liabilities | 175,633 | 174,504 | 1 | % | 174,048 | 1 | % | ||||||||||||
| Shareholders' Equity | |||||||||||||||||||
| Common Stock | 1,644 | 1,638 | 0 | % | 1,633 | 1 | % | ||||||||||||
| Additional paid in capital | 13,095 | 13,081 | 0 | % | 13,008 | 1 | % | ||||||||||||
| Retained Earnings | (1,495 | ) | (1,501 | ) | -0 | % | (1,676 | ) | -11 | % | |||||||||
| Other Comprehensive Income | (557 | ) | (619 | ) | -10 | % | (859 | ) | -35 | % | |||||||||
| Total Shareholders' Equity | 12,687 | 12,600 | 1 | % | 12,106 | 5 | % | ||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 188,320 | $ | 187,104 | 1 | % | $ | 186,154 | 1 | % | |||||||||
| Sept 30, 2023 | June 30, 2023 | Sept 30, 2022 | YTD 2023 | YTD 2022 | |||||||||||||||
| Financial Ratios | |||||||||||||||||||
| Return on Average Assets | 0.01 | % | 0.04 | % | 0.40 | % | 0.02 | % | 0.28 | % | |||||||||
| Return on Average Equity | 0.19 | % | 0.58 | % | 6.02 | % | 0.35 | % | 4.21 | % | |||||||||
| Efficiency Ratio | 101.4 | % | 105.9 | % | 80.4 | % | 99.7 | % | 85.3 | % | |||||||||
| Net Interest Margin | 2.64 | % | 2.51 | % | 3.35 | % | 2.62 | % | 3.20 | % | |||||||||
| Loan to Deposits | 97.3 | % | 98.7 | % | 93.6 | % | |||||||||||||
| Tangible Book Value per Share | 7.71 | 7.68 | 7.40 | ||||||||||||||||
| Book Value per Share | 7.74 | 7.72 | 7.44 | ||||||||||||||||
| Earnings per Share | 0.00 | 0.01 | 0.11 | 0.02 | 0.24 | ||||||||||||||
| Asset Quality | |||||||||||||||||||
| Net Loan Charge-offs (recoveries) | $ | - | (18 | ) | $ | 485 | |||||||||||||
| Nonperforming Loans | - | - | $ | 670 | |||||||||||||||
| Nonperforming Assets to Total Assets | 0.00 | % | 0.00 | % | 0.36 | % | |||||||||||||
| Allowance for Credit Losses to Total Loans | 0.87 | % | 0.90 | % | 0.81 | % | |||||||||||||
| Other Real Estate Owned | $ | - | $ | - | $ | - | |||||||||||||
| CAPITAL (Bank only) | |||||||||||||||||||
| Tier 1 leverage ratio | 9.63 | % | 9.54 | % | 9.08 | % | |||||||||||||
| Tier 1 risk-based capital ratio | 14.46 | % | 14.43 | % | 13.46 | % | |||||||||||||
| Total risk based capital ratio | 15.48 | % | 15.48 | % | 14.42 | % | |||||||||||||
