2022 Fourth Quarter and Full Year Financial Highlights:
- Net income was $136 thousand, or $0.08 per share, in the fourth quarter of 2022, with net interest income of $1.35 million.
- Net income for the year was $526 thousand, with net interest income of $5.56 million.
- Total assets increased 10.2% year-over-year to $193.0 million.
- Total loans decreased 0.9% in the fourth quarter and increased 21.2% from the prior year.
- Net interest margin of 3.11% for the fourth quarter and 3.18% for the year.
- Nonperforming assets to total assets improved to 0.34%.
POULSBO, Wash., Jan. 31, 2023 (GLOBE NEWSWIRE) -- Liberty Northwest Bancorp, Inc. (OTCQX: LBNW) (the “Company”) and its wholly-owned subsidiary Liberty Bank today announced earnings of $136 thousand for the fourth quarter ended December 31, 2022, an increase of $271 thousand, compared to the $135 thousand loss reported in the fourth quarter ended December 31, 2021. For the twelve months ended December 31, 2022, net income increased $306 thousand, or 139%, compared to the twelve months ended December 31, 2021.
In the fourth quarter of 2022, the Company generated a return on common shareholders' equity of 4.41% and a return on assets of 0.30%, compared to 6.02% and 0.40%, respectively, in the immediate prior quarter. For the year 2022, return on common shareholders' equity was 4.36%, and return on assets was 0.29%, compared to 1.77% and 0.212%, respectively, in 2021.
“Our fourth quarterly results were a strong end to what was a monumental year on several measures,” said Rick Darrow, Liberty Northwest Bancorp, Inc. President and Chief Executive Officer. “We generated positive operating results for the fourth quarter, and delivered one of the most profitable years in the Company’s history for the full year 2022, reflecting the dedicated effort put forth by all of our employees. As we look to 2023, our focus remains on improving the financial performance of the Company, while continuing to meet the needs of our community.”
“Earlier this month, we held the grand opening of our new headquarters in Poulsbo,” Darrow continued. “The banking center is in a desirable location in downtown Poulsbo and is large enough to accommodate future growth for the bank well into the next decade. This new space will add to the energy and momentum that we have generated over the last several years.”
The Company’s net interest margin was 3.11% for the fourth quarter of 2022, compared to 3.35% for the preceding quarter, and 3.37% for the fourth quarter of 2021. “Higher yields on earning assets during the quarter were more than offset by the increase in deposit costs, resulting in net interest margin compression during the quarter,” said Darrow. For the year, the net interest margin was 3.18%, compared to 3.48% for 2021.
Total assets increased 10.2% to $193.0 million as of December 31, 2022, compared to $175.1 million at December 31, 2021. The year-over-year increase was primarily due to a $25.5 million increase in loans receivable funded by deposits, increased borrowings, and a reduction in short-term investments.
“Like other financial institutions, we experienced a decrease in deposit balances during the quarter, as deposit pricing pressures persist and customers are seeking higher yields,” said Darrow. Total deposits decreased 6.3% to $141.8 million at December 31, 2022, compared to $151.2 million a year earlier and decreased 9.3% compared to $156.3 million at September 30, 2022. Total demand deposits decreased $5.3 million, or 10.4%, from December 31, 2021. Non-interest bearing demand accounts represented 32.6%, interest bearing demand represented 16.9%, money market and savings accounts comprised 28.5% and certificates of deposit made up 22.1% of the total deposit portfolio at December 31, 2022.
At September 30, 2022, non-performing assets remained low at $659 thousand, or 0.34% of total assets, corresponding to a single borrower relationship. The allowance for loan losses totaled $1.24 million as of December 31, 2022, and was 0.85% of total loans outstanding. The Company recorded a $40 thousand provision for loan losses in the fourth quarter of 2022, compared to a $60 thousand provision in the third quarter of 2022 and a $315 thousand provision in the fourth quarter of 2021.
Total non-interest income was $45 thousand for the fourth quarter of 2022, compared to $78 thousand in the fourth quarter a year ago. The decrease in non-interest income was due to lower fee income earned on brokered mortgage loans in 2022. For the year 2022, non-interest income totaled $193 thousand, compared to $314 thousand for 2021.
Total noninterest expense was $1.17 million for the fourth quarter of 2022, a decrease of $237 thousand, or 16.8%, from the fourth quarter a year ago. The Company’s efficiency ratio in the fourth quarter of 2022 improved to 83.9%, compared to 90.7% for the same period one year ago. Compensation and benefits costs decreased by $271 thousand, or 30.0%, over the prior year quarter primarily due to lower staff count. For the year 2022, total noninterest expense decreased $843 thousand, or 14.7%, to $4.89 million, compared to $5.73 million in 2021.
Capital ratios continue to exceed regulatory requirements, with total risk-based capital substantially above well-capitalized regulatory requirements. The tangible book value per share was $7.51 at quarter end, compared to $7.59 a year earlier.
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 Dec 31, 2022 | Quarter Ended Sept 30, 2022 | Three Month Change | Quarter Ended Dec 31, 2021 | One Year Change | |||||||||||||||
| Interest Income | |||||||||||||||||||
| Loans | $ | 1,708 | $ | 1,568 | 9 | % | $ | 1,561 | 9 | % | |||||||||
| Interest bearing deposits in banks | 19 | 22 | -13 | % | 8 | 148 | % | ||||||||||||
| Securities | 103 | 102 | 1 | % | 84 | 23 | % | ||||||||||||
| Total interest income | 1,830 | 1,692 | 8 | % | 1,653 | 11 | % | ||||||||||||
| Interest Expense | |||||||||||||||||||
| Deposits | 239 | 104 | 128 | % | 60 | 300 | % | ||||||||||||
| Other Borrowings | 242 | 104 | 134 | % | 121 | 100 | % | ||||||||||||
| Total interest expense | 481 | 208 | 131 | % | 181 | 166 | % | ||||||||||||
| Net Interest Income | 1,349 | 1,483 | -9 | % | 1,473 | -8 | % | ||||||||||||
| Provision for Loan Losses | 40 | 60 | -33 | % | 315 | -87 | % | ||||||||||||
| Net interest income after provision for loan losses | 1,309 | 1,423 | -8 | % | 1,158 | 13 | % | ||||||||||||
| Non-Interest Income | |||||||||||||||||||
| Service charges on deposit accounts | 15 | 15 | -1 | % | 14 | 4 | % | ||||||||||||
| Other non-interest income | 30 | 28 | 6 | % | 64 | -53 | % | ||||||||||||
| Total non-interest income | 45 | 43 | 4 | % | 78 | -43 | % | ||||||||||||
| Non-Interest Expense | |||||||||||||||||||
| Salaries and employee benefits | 634 | 694 | -9 | % | 906 | -30 | % | ||||||||||||
| Occupancy and equipment expenses | 152 | 142 | 7 | % | 136 | 12 | % | ||||||||||||
| Other operating expenses | 383 | 391 | -2 | % | 364 | 5 | % | ||||||||||||
| Total non-interest expenses | 1,169 | 1,227 | -5 | % | 1,406 | -17 | % | ||||||||||||
| Net Income Before Income Tax | 185 | 239 | -23 | % | (170 | ) | -208 | % | |||||||||||
| Provision for Income Tax | (49 | ) | (52 | ) | -7 | % | 35 | -241 | % | ||||||||||
| Net Income | $ | 136 | $ | 187 | -27 | % | (135 | ) | -200 | % | |||||||||
| STATEMENTS OF INCOME (Unaudited) | |||||||||||||
| (Dollars in thousands) | |||||||||||||
| Year to Date Dec 31, 2022 | Year to Date Dec 31, 2021 | One Year Change | |||||||||||
| Interest Income | |||||||||||||
| Loans | $ | 6,129 | $ | 6,422 | -5 | % | |||||||
| Interest bearing deposits in banks | 68 | 27 | 149 | % | |||||||||
| Securities | 386 | 229 | 69 | % | |||||||||
| Total interest income | 6,583 | 6,678 | -1 | % | |||||||||
| Interest Expense | |||||||||||||
| Deposits | 477 | 201 | 138 | % | |||||||||
| Other Borrowings | 547 | 386 | 42 | % | |||||||||
| Total interest expense | 1,024 | 587 | 75 | % | |||||||||
| Net Interest Income | 5,559 | 6,091 | -9 | % | |||||||||
| Provision for Loan Losses | 190 | 400 | -53 | % | |||||||||
| Net interest income after provision for loan losses | 5,369 | 5,691 | -6 | % | |||||||||
| Non-Interest Income | |||||||||||||
| Service charges on deposit accounts | 54 | 45 | 19 | % | |||||||||
| Other non-interest income | 139 | 269 | -48 | % | |||||||||
| Total non-interest income | 193 | 314 | -39 | % | |||||||||
| Non-Interest Expense | |||||||||||||
| Salaries and employee benefits | 2,773 | 3,693 | -25 | % | |||||||||
| Occupancy and equipment expenses | 585 | 600 | -3 | % | |||||||||
| Other operating expenses | 1,528 | 1,437 | 6 | % | |||||||||
| Total non-interest expenses | 4,886 | 5,730 | -15 | % | |||||||||
| Net Income Before Income Tax | 682 | 279 | 144 | % | |||||||||
| Provision for Income Tax | (156 | ) | (59 | ) | 161 | % | |||||||
| Net Income | $ | 526 | $ | 220 | 139 | % | |||||||
| BALANCE SHEETS (Unaudited) | |||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
| Dec 31, 2022 | Sept 30, 2022 | Three Month Change | Dec 31, 2021 | One Year Change | |||||||||||||||
| Assets | |||||||||||||||||||
| Cash and due from Banks | $ | 2,844 | $ | 2,982 | -5 | % | $ | 2,969 | -4 | % | |||||||||
| Interest bearing deposits in banks | 11,480 | 4,470 | 157 | % | 22,644 | -49 | % | ||||||||||||
| Securities | 23,682 | 23,620 | 0 | % | 25,809 | -8 | % | ||||||||||||
| Loans | 146,185 | 147,497 | -1 | % | 120,647 | 21 | % | ||||||||||||
| Allowance for loan losses | (1,235 | ) | (1,190 | ) | 4 | % | (1,525 | ) | -19 | % | |||||||||
| Net Loans | 144,950 | 146,307 | -1 | % | 119,121 | 22 | % | ||||||||||||
| Premises and fixed assets | 6,769 | 6,370 | 6 | % | 2,825 | 140 | % | ||||||||||||
| Accrued Interest receivable | 699 | 630 | 11 | % | 507 | 38 | % | ||||||||||||
| Intangible assets | 65 | 72 | -9 | % | 93 | -30 | % | ||||||||||||
| Other assets | 2,527 | 1,704 | 48 | % | 1,142 | 121 | % | ||||||||||||
| Total Assets | $ | 193,016 | $ | 186,154 | 4 | % | $ | 175,111 | 10 | % | |||||||||
| Liabilities and Shareholders' Equity | |||||||||||||||||||
| Deposits | |||||||||||||||||||
| Demand, non-interest bearing | $ | 46,152 | $ | 50,162 | -8 | % | $ | 51,481 | -10 | % | |||||||||
| Interest Bearing Demand | 23,892 | 37,940 | -37 | % | 39,378 | -39 | % | ||||||||||||
| Money Market and Savings | 40,438 | 56,909 | -29 | % | 51,522 | -22 | % | ||||||||||||
| Certificates of Deposit | 31,286 | 11,302 | 177 | % | 8,860 | 253 | % | ||||||||||||
| Total Deposits | 141,768 | 156,313 | -9 | % | 151,241 | -6 | % | ||||||||||||
| Total Borrowing | 38,149 | 17,392 | 119 | % | 10,956 | 248 | % | ||||||||||||
| Accrued interest payable | 165 | 3 | 5738 | % | 73 | 126 | % | ||||||||||||
| Other liabilities | 606 | 343 | 78 | % | 410 | 48 | % | ||||||||||||
| Total Liabilities | 180,690 | 174,048 | 4 | % | 162,679 | 11 | % | ||||||||||||
| Shareholders' Equity | |||||||||||||||||||
| Common Stock | 1,633 | 1,633 | 0 | % | 1,626 | 0 | % | ||||||||||||
| Additional paid in capital | 13,019 | 13,008 | 0 | % | 12,984 | 0 | % | ||||||||||||
| Retained Earnings | (1,541 | ) | (1,676 | ) | (2,067 | ) | |||||||||||||
| Other Comprehensive Income | (785 | ) | (859 | ) | -9 | % | (111 | ) | 608 | % | |||||||||
| Total Shareholders' Equity | 12,326 | 12,106 | 2 | % | 12,432 | -1 | % | ||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 193,016 | $ | 186,154 | 4 | % | $ | 175,111 | 10 | % | |||||||||
| Quarter Ended Dec 31, 2022 | Quarter Ended Sept 30, 2022 | Quarter Ended Dec 31, 2021 | YTD 2022 | YTD 2021 | ||||||||||||||||
| Financial Ratios | ||||||||||||||||||||
| Return on Average Assets | 0.30 | % | 0.40 | % | -0.30 | % | 0.29 | % | 0.12 | % | ||||||||||
| Return on Average Equity | 4.41 | % | 6.02 | % | -4.33 | % | 4.36 | % | 1.77 | % | ||||||||||
| Efficiency Ratio | 83.9 | % | 80.4 | % | 90.7 | % | 85.0 | % | 89.5 | % | ||||||||||
| Net Interest Margin | 3.11 | % | 3.35 | % | 3.37 | % | 3.18 | % | 3.48 | % | ||||||||||
| Loan to Deposits | 102.2 | % | 93.6 | % | 79.8 | % | ||||||||||||||
| Tangible Book Value per Share | 7.51 | 7.40 | 7.59 | |||||||||||||||||
| Book Value per Share | 7.55 | 7.44 | 7.65 | |||||||||||||||||
| Earnings per Share | 0.08 | 0.11 | (0.08 | ) | 0.32 | 0.14 | ||||||||||||||
| Asset Quality | ||||||||||||||||||||
| Net Loan Charge-offs (recoveries) | $ | - | $ | 485 | - | |||||||||||||||
| Nonperforming Loans | $ | 659 | $ | 670 | $ | 1,185 | ||||||||||||||
| Nonperforming Assets to Total Assets | 0.34 | % | 0.36 | % | 0.68 | % | ||||||||||||||
| Allowance for Loan Losses to Total Loans | 0.85 | % | 0.81 | % | 1.26 | % | ||||||||||||||
| Other Real Estate Owned | $ | - | $ | - | - | |||||||||||||||
| CAPITAL (Bank only) | ||||||||||||||||||||
| Tier 1 leverage ratio | 9.37 | % | 9.08 | % | 9.08 | % | ||||||||||||||
| Tier 1 risk-based capital ratio | 13.64 | % | 13.46 | % | 14.45 | % | ||||||||||||||
| Total risk based capital ratio | 14.63 | % | 14.42 | % | 15.70 | % | ||||||||||||||
