2024 Third Quarter Financial Highlights:
- Total assets were $183.7 million at quarter end.
- Net interest income of $1.01 million for the third quarter.
- Net interest margin of 2.37% for the third quarter.
- Total deposits increased 2% to $146.4 million at September 30, 2024, compared to $143.1 million a year ago.
- Net loans increased 1% to $140.0 million at September 30, 2024, compared to $139.2 million a year ago.
- Asset quality remains pristine.
- Non-interest bearing demand deposits represent 27% of total deposits.
- Tangible book value per share was $7.67 at quarter end.
POULSBO, Wash., Nov. 01, 2024 (GLOBE NEWSWIRE) -- Liberty Northwest Bancorp, Inc. (OTCQX: LBNW) (the "Company") and its wholly-owned subsidiary Liberty Bank today announced net income of $25 thousand for the third quarter ended September 30, 2024, compared to $7 thousand for the second quarter ended June 30, 2024, and $6 thousand for the third quarter ended September 30, 2023. In the first nine months of 2024, net income increased 41% to $47 thousand, compared to $33 thousand the same period in 2023.
Total assets were $183.7 million as of September 30, 2024, compared to $188.3 million at September 30, 2023. Net loans totaled $140.0 million as of September 30, 2024, a 2% decrease compared to $143.2 million at June 30, 2024, and a 1% increase compared to $139.2 million a year ago. Loan demand was muted during the quarter largely due to the high interest rate environment.
Asset quality remained pristine during the quarter. The allowance for credit losses totaled $1.17 million as of September 30, 2024, and was 0.83% of total loans outstanding. The Company recorded net loan charge-offs of $4 thousand during the quarter. The Company has one non-performing loan of $235 thousand as of September 30, 2024.
Due to strong credit quality metrics and muted loan growth, the Company recorded a $95 thousand reversal to its provision for credit losses in the third quarter of 2024. This compared to a $90 thousand reversal to its provision for credit losses in the second quarter of 2024 and a $25 thousand reversal to its provision for credit losses in the third quarter of 2023.
Total deposits increased 2% to $146.4 million at September 30, 2024, compared to $143.1 million at September 30, 2023, and increased modestly compared to $145.8 million three months earlier. Non-interest bearing demand accounts represented 27%, interest bearing demand represented 28%, money market and savings accounts comprised 19%, and certificates of deposit made up 26% of the total deposit portfolio at September 30, 2024.
"We continue to take advantage of our strong local economy, with a growing deposit base and loan pipeline," said Rick Darrow, Liberty Northwest Bancorp, Inc. President and Chief Executive Officer. "While the high-interest rate environment continues to be a challenge, we believe we are well positioned with a strong balance sheet and ample capital to continue to grow."
Net interest income, before the provision for loan losses, was $1.01 million for the third quarter of 2024, compared to $1.14 million in the third quarter of 2023. The decrease in net interest income year-over-year was primarily due to the increase in interest expense on deposits and other borrowings resulting from the higher interest rate environment. For the first nine months of 2024, net interest income was $3.11 million, compared to $3.35 million for the first nine months of 2023.
"Higher yields on earning assets during the quarter were more than offset by the increase in cost of funds, resulting in net interest margin compression during the quarter," said Darrow. The Company's net interest margin was 2.37% for the third quarter of 2024, compared to 2.45% for the preceding quarter, and 2.64% for the third quarter of 2023. For the first nine months of 2024, the net interest margin was 2.40%, compared to 2.62% for the first nine months of 2023.
Total non-interest income was $74 thousand for the third quarter of 2024, compared to $111 thousand for the third quarter a year ago. The decrease compared to the year ago quarter was primarily due to higher referral fee income during the third quarter of 2023, compared to the third quarter of 2024. For the first nine months of 2024, non-interest income was $226 thousand, compared to $371 thousand for the first nine months of 2023.
Total noninterest expense was $1.14 million for the third quarter of 2024, a decrease of $121 thousand, or 10%, from the third quarter a year ago. Compensation and benefits costs decreased by $69 thousand, or 9%, over the year ago quarter, while occupancy costs decreased by $57 thousand, or 40% from the same quarter a year ago. Year-to-date, total noninterest expense decreased $228 thousand, or 6%, to $3.50 million, over the same period in 2023.
"We have done a good job of managing operating expenses over the last several quarters, reducing total noninterest expense by 10% over the third quarter a year ago," said Darrow. "Our operating performance is expected to continue to improve, as we improve our margin, and continue to keep operating expenses in check. We are well positioned for continued growth in our core business operations and remain focused on creating value for all of our customers, employees and shareholders."
Capital ratios continue to exceed regulatory requirements, with a total risk-based capital ratio at 15.97% at quarter end, substantially above well-capitalized regulatory requirements. The tangible book value per share was $7.67 at quarter end, compared to $7.71 a year earlier.
Near the end of the second quarter of 2024, the Company completed the issuance of $1.2 million of Preferred Stock. Under the terms of the transaction, the Preferred Stock will convert to Common Stock within a 2 year time period.
"The proceeds from this offering will be used to further strengthen our capital position and to support continued loan growth in our vibrant Pacific Northwest markets," said Darrow.
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. 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.
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, 2024 | Quarter Ended June 30, 2024 | Three Month Change | Quarter Ended Sept 30, 2023 | One Year Change | Year to Date Sept 30, 2024 | Year to Date Sept 30, 2023 | One Year Change | ||||||||||||||||||||||||
| Interest Income | |||||||||||||||||||||||||||||||
| Loans | $ | 1,994 | $ | 1,920 | 4 | % | $ | 1,814 | 10 | % | $ | 5,875 | $ | 5,283 | 11 | % | |||||||||||||||
| Interest bearing deposits in banks | 83 | 61 | 38 | % | 99 | -16 | % | 223 | 222 | 0 | % | ||||||||||||||||||||
| Securities | 114 | 119 | -4 | % | 119 | -4 | % | 352 | 343 | 3 | % | ||||||||||||||||||||
| Total interest income | 2,192 | 2,100 | 4 | % | 2,032 | 8 | % | 6,451 | 5,848 | 10 | % | ||||||||||||||||||||
| Interest Expense | |||||||||||||||||||||||||||||||
| Deposits | 903 | 785 | 15 | % | 544 | 66 | % | 2,370 | 1,484 | 60 | % | ||||||||||||||||||||
| Other Borrowings | 283 | 261 | 9 | % | 352 | -20 | % | 975 | 1,012 | -4 | % | ||||||||||||||||||||
| Total interest expense | 1,186 | 1,046 | 13 | % | 896 | 32 | % | 3,345 | 2,497 | 34 | % | ||||||||||||||||||||
| Net Interest Income | 1,005 | 1,053 | -5 | % | 1,136 | -11 | % | 3,106 | 3,352 | -7 | % | ||||||||||||||||||||
| Provision for Loan Losses | (95 | ) | (90 | ) | 6 | % | (25 | ) | 280 | % | (225 | ) | (45 | ) | 400 | % | |||||||||||||||
| Net interest income after provision for loan losses | 1,100 | 1,143 | -4 | % | 1,161 | -5 | % | 3,331 | 3,397 | -2 | % | ||||||||||||||||||||
| Non-Interest Income | |||||||||||||||||||||||||||||||
| Service charges on deposit accounts | 28 | 28 | -3 | % | 17 | 60 | % | 77 | 50 | 53 | % | ||||||||||||||||||||
| Other non-interest income | 46 | 51 | -9 | % | 94 | -51 | % | 149 | 321 | -54 | % | ||||||||||||||||||||
| Total non-interest income | 74 | 79 | -7 | % | 111 | -34 | % | 226 | 371 | -39 | % | ||||||||||||||||||||
| Non-Interest Expense | |||||||||||||||||||||||||||||||
| Salaries and employee benefits | 668 | 673 | -1 | % | 737 | -9 | % | 1,946 | 2,149 | -9 | % | ||||||||||||||||||||
| Occupancy and equipment expenses | 88 | 96 | -9 | % | 145 | -40 | % | 329 | 444 | -26 | % | ||||||||||||||||||||
| Other operating expenses | 387 | 445 | -13 | % | 382 | 1 | % | 1,223 | 1,133 | 8 | % | ||||||||||||||||||||
| Total non-interest expenses | 1,143 | 1,214 | -6 | % | 1,264 | -10 | % | 3,498 | 3,726 | -6 | % | ||||||||||||||||||||
| Net Income Before Income Tax | 31 | 9 | 268 | % | 8 | 311 | % | 59 | 42 | 41 | % | ||||||||||||||||||||
| Provision for Income Tax | 7 | 2 | 268 | % | 2 | 311 | % | 12 | 9 | 41 | % | ||||||||||||||||||||
| Net Income | $ | 25 | $ | 7 | 268 | % | $ | 6 | 311 | % | $ | 47 | $ | 33 | 41 | % | |||||||||||||||
| BALANCE SHEETS (Unaudited) | ||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| Sept 30, 2024 | June 30, 2024 | Three Month Change | Sept 30, 2023 | One Year Change | ||||||||||||||||
| Assets | ||||||||||||||||||||
| Cash and due from Banks | $ | 2,408 | $ | 2,124 | 13 | % | $ | 3,359 | -28 | % | ||||||||||
| Interest bearing deposits in banks | 11,262 | 14,625 | -23 | % | 11,635 | -3 | % | |||||||||||||
| Securities | 21,225 | 21,664 | -2 | % | 24,316 | -13 | % | |||||||||||||
| Loans | 141,206 | 144,477 | -2 | % | 140,467 | 1 | % | |||||||||||||
| Allowance for loan losses | (1,167 | ) | (1,266 | ) | -8 | % | (1,227 | ) | -5 | % | ||||||||||
| Net Loans | 140,038 | 143,210 | -2 | % | 139,240 | 1 | % | |||||||||||||
| Premises and fixed assets | 6,161 | 6,219 | -1 | % | 6,512 | -5 | % | |||||||||||||
| Accrued Interest receivable | 668 | 678 | -2 | % | 678 | -2 | % | |||||||||||||
| Intangible assets | 19 | 26 | -27 | % | 46 | -58 | % | |||||||||||||
| Other assets | 1,897 | 2,262 | -16 | % | 2,534 | -25 | % | |||||||||||||
| Total Assets | $ | 183,678 | $ | 190,808 | -4 | % | $ | 188,320 | -2 | % | ||||||||||
| Liabilities and Shareholders' Equity | ||||||||||||||||||||
| Deposits | ||||||||||||||||||||
| Demand, non-interest bearing | $ | 39,669 | $ | 44,092 | -10 | % | $ | 43,702 | -9 | % | ||||||||||
| Interest Bearing Demand | 40,764 | 40,171 | 1 | % | 30,865 | 32 | % | |||||||||||||
| Money Market and Savings | 27,419 | 24,534 | 12 | % | 27,207 | 1 | % | |||||||||||||
| Certificates of Deposit | 38,507 | 36,989 | 4 | % | 41,317 | -7 | % | |||||||||||||
| Total Deposits | 146,359 | 145,786 | 0 | % | 143,091 | 2 | % | |||||||||||||
| Total Borrowing | 22,454 | 30,446 | -26 | % | 31,923 | -30 | % | |||||||||||||
| Accrued interest payable | 238 | 244 | -2 | % | 303 | -21 | % | |||||||||||||
| Other liabilities | 704 | 212 | 233 | % | 316 | 123 | % | |||||||||||||
| Total Liabilities | 169,756 | 176,687 | -4 | % | 175,633 | -3 | % | |||||||||||||
| Shareholders' Equity | ||||||||||||||||||||
| Preferred Stock | 1,242 | 1,242 | 0 | % | *** | |||||||||||||||
| Common Stock | 1,650 | 1,650 | 0 | % | 1,644 | 0 | % | |||||||||||||
| Additional paid in capital | 13,138 | 13,147 | -0 | % | 13,095 | 0 | % | |||||||||||||
| Retained Earnings | (1,447 | ) | (1,471 | ) | 2 | % | (1,495 | ) | 3 | % | ||||||||||
| Other Comprehensive Income | (661 | ) | (447 | ) | -48 | % | (557 | ) | -19 | % | ||||||||||
| Total Shareholders' Equity | 13,922 | 14,121 | -1 | % | 12,687 | 10 | % | |||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 183,678 | $ | 190,808 | -4 | % | $ | 188,320 | -2 | % | ||||||||||
| Quarter Ended Sept 30, 2024 | Quarter Ended June 30, 2024 | Quarter Ended Sept 30, 2023 | YTD 2024 | YTD 2023 | ||||||||||||||||
| Financial Ratios | ||||||||||||||||||||
| Return on Average Assets | 0.06 | % | 0.01 | % | 0.01 | % | 0.03 | % | 0.02 | % | ||||||||||
| Return on Average Equity | 0.70 | % | 0.21 | % | 0.19 | % | 0.47 | % | 0.35 | % | ||||||||||
| Efficiency Ratio | 105.9 | % | 107.2 | % | 101.4 | % | 105.0 | % | 99.7 | % | ||||||||||
| Net Interest Margin | 2.37 | % | 2.45 | % | 2.64 | % | 2.40 | % | 2.62 | % | ||||||||||
| Loan to Deposits | 96.5 | % | 99.1 | % | 97.3 | % | ||||||||||||||
| Tangible Book Value per Share | $ | 7.67 | $ | 7.79 | $ | 7.71 | ||||||||||||||
| Book Value per Share | $ | 7.68 | $ | 7.80 | $ | 7.74 | ||||||||||||||
| Earnings per Share | $ | 0.01 | $ | 0.00 | $ | 0.00 | $ | 0.03 | $ | 0.02 | ||||||||||
| Asset Quality | ||||||||||||||||||||
| Net Loan Charge-offs (recoveries) | $ | 4 | $ | (228 | ) | $ | - | |||||||||||||
| Nonperforming Loans | $ | 235 | $ | 235 | $ | - | ||||||||||||||
| Nonperforming Assets to Total Assets | 0.13 | % | 0.12 | % | 0.00 | % | ||||||||||||||
| Allowance for Loan Losses to Total Loans | 0.83 | % | 0.88 | % | 0.87 | % | ||||||||||||||
| Other Real Estate Owned | - | - | - | |||||||||||||||||
| CAPITAL (Bank only) | ||||||||||||||||||||
| Tier 1 leverage ratio | 10.23 | % | 9.86 | % | 9.63 | % | ||||||||||||||
| Tier 1 risk-based capital ratio | 15.00 | % | 14.24 | % | 14.46 | % | ||||||||||||||
| Total risk based capital ratio | 15.97 | % | 15.26 | % | 15.48 | % | ||||||||||||||
