2023 Fourth Quarter Financial Highlights:
- Total assets were $184.7 million at year end.
- Asset quality remains excellent with zero nonperforming assets at year end.
- Net interest income of $1.07 million for the fourth quarter and $4.44 million for the year.
- Net interest margin of 2.48% for the fourth quarter and 2.59% for the year.
- Total deposits increased modestly to $ 142.2 million at year end compared to $141.8 million a year ago.
- Tangible book value per share was $7.58 at year end.
POULSBO, Wash., Feb. 07, 2024 (GLOBE NEWSWIRE) -- Liberty Northwest Bancorp, Inc. (OTCQX: LBNW) (the "Company") and its wholly-owned subsidiary Liberty Bank today announced earnings of $1 thousand for the fourth quarter ended December 31, 2023, compared to $6 thousand reported in the third quarter ended September 30, 2023, and $136 thousand in the fourth quarter ended December 31, 2022. For the twelve months ended December 31, 2023, net income was $35 thousand, compared to $526 thousand for the twelve months ended December 31, 2022.
Total assets were $184.7 million as of December 31, 2023, compared to $193.0 million at December 31, 2022. Net loans totaled $142.8 million as of December 31, 2023, compared to $139.2 million at September 30, 2023 and $145.0 million a year ago. Loan demand has weakened modestly compared to a year ago primarily due to the high interest rate environment.
Asset quality remained pristine during the quarter, with no non-performing assets as of December 31, 2023, or as of September 30, 2023. The allowance for credit losses totaled $1.15 million as of December 31, 2023, and was 0.80% of total loans outstanding. The Company recorded no net loan charge-offs during the quarter.
Due to improved credit quality metrics, the Company recorded a $60 thousand reversal to its provision for credit losses in the fourth quarter of 2023, compared to a $25 thousand reversal to its provision for credit losses in the third quarter of 2023 and a $40 thousand provision for loan losses in the fourth quarter of 2022.
Total deposits decreased 1% to $142.2 million at December 31, 2023 compared to $143.1 million at September 30, 2023 and increased modestly compared to $141.8 million a year earlier. Non-interest bearing demand accounts represented 30.1%, interest bearing demand represented 16.5%, money market and savings accounts comprised 18.8% and certificates of deposit made up 34.6% of the total deposit portfolio at December 31, 2023.
Net interest income, before the provision for loan losses, was $1.07 million for the fourth quarter of 2023, compared to $1.35 million in the fourth quarter a year ago. For the year 2023, net interest income was $4.44 million, compared to $5.56 million for 2022. The decrease in net interest income year over year was largely due to an increase in funding costs resulting from the high interest rate environment.
"Our net interest margin contracted compared to the preceding quarter, as the increase in cost of funds outpaced the growth in our yields on earning assets. We are working hard to build core customer deposits, and while deposit pricing pressure persists, we anticipate funding costs will start to stabilize over the next few quarters," said Rick Darrow, Liberty Northwest Bancorp, Inc. President and Chief Executive Officer.
The Company's net interest margin was 2.48% for the fourth quarter of 2023, compared to 2.64% for the preceding quarter, and 3.11% for the fourth quarter of 2022. For the full year 2023, the net interest margin was 2.59%, compared to 3.18% for 2022.
Total non-interest income was $78 thousand for the fourth quarter of 2023, compared to $45 thousand in the fourth quarter a year ago. The year-over-year 75% increase was primarily due to an increase in referral income. For the year 2023, non-interest income increased to $449 thousand, compared to $193 thousand for 2022, an increase of $256 thousand, or 133%.
Total noninterest expense was $1.22 million for the fourth quarter of 2023, an increase of $54 thousand, or 5%, from the fourth quarter a year ago. Compensation and benefits costs increased by $71 thousand, or 11%, over the prior year quarter, while occupancy costs decreased by 1% from prior quarter of last year. For the year 2023, total noninterest expense increased $66 thousand, or 1%, to $4.95 million, over the same period in 2022.
Capital ratios continue to exceed regulatory requirements, with a total risk-based capital ratio at 15.09% at quarter end, substantially above well-capitalized regulatory requirements. The tangible book value per share increased to $7.58 at quarter end, compared to $7.51 a year earlier.
"While the high interest rate environment continues to be a challenge, we are well positioned with a strong balance sheet to continue our growth in 2024," said Darrow. "Additionally, the recent market disruptions in our Pacific Northwest markets continues to give us opportunities to grow our client base. We have the right team in place, together with the strength of our local markets, to improve our operating results in the year ahead."
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:
Rick Darrow, Chief Executive Officer | 360-394-4750
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, 2023 | Quarter Ended Sept 30, 2023 | Three Month Change | Quarter Ended Dec 31, 2022 | Quarter over Quarter - One Year Change | Year to Date Dec 31, 2023 | Year to Date Dec 31, 2022 | One Year Change | ||||||||||||||||||||||||
| Interest Income | |||||||||||||||||||||||||||||||
| Loans | $ | 1,890 | $ | 1,814 | 4 | % | $ | 1,708 | 11 | % | $ | 7,173 | $ | 6,129 | 17 | % | |||||||||||||||
| Interest bearing deposits in banks | 101 | 99 | 1 | % | 19 | 423 | % | 323 | 68 | 375 | % | ||||||||||||||||||||
| Securities | 140 | 119 | 18 | % | 103 | 36 | % | 483 | 386 | 25 | % | ||||||||||||||||||||
| Total interest income | 2,112 | 2,032 | 4 | % | 1,830 | 15 | % | 7,979 | 6,583 | 21 | % | ||||||||||||||||||||
| Interest Expense | |||||||||||||||||||||||||||||||
| Deposits | 656 | 544 | 21 | % | 239 | 174 | % | 2,141 | 477 | 348 | % | ||||||||||||||||||||
| Other Borrowings | 384 | 352 | 9 | % | 242 | 58 | % | 1,396 | 547 | 155 | % | ||||||||||||||||||||
| Total interest expense | 1,040 | 896 | 16 | % | 481 | 116 | % | 3,537 | 1,024 | 245 | % | ||||||||||||||||||||
| Net Interest Income | 1,072 | 1,136 | -6 | % | 1,349 | -21 | % | 4,442 | 5,559 | -20 | % | ||||||||||||||||||||
| Provision for Loan Losses | (60 | ) | (25 | ) | 140 | % | 40 | -250 | % | (105 | ) | 190 | -155 | % | |||||||||||||||||
| Net interest income after provision for loan losses | 1,132 | 1,161 | -2 | % | 1,309 | -14 | % | 4,547 | 5,369 | -15 | % | ||||||||||||||||||||
| Non-Interest Income | |||||||||||||||||||||||||||||||
| Service charges on deposit accounts | 17 | 17 | -2 | % | 15 | 14 | % | 67 | 54 | 25 | % | ||||||||||||||||||||
| Other non-interest income | 61 | 94 | -35 | % | 30 | 104 | % | 382 | 139 | 174 | % | ||||||||||||||||||||
| Total non-interest income | 78 | 111 | -30 | % | 45 | 75 | % | 449 | 193 | 133 | % | ||||||||||||||||||||
| Non-Interest Expense | |||||||||||||||||||||||||||||||
| Salaries and employee benefits | 705 | 737 | -4 | % | 634 | 11 | % | 2,854 | 2,773 | 3 | % | ||||||||||||||||||||
| Occupancy and equipment expenses | 151 | 145 | 4 | % | 152 | -1 | % | 595 | 585 | 2 | % | ||||||||||||||||||||
| Other operating expenses | 367 | 382 | -4 | % | 383 | -4 | % | 1,503 | 1,528 | -2 | % | ||||||||||||||||||||
| Total non-interest expenses | 1,223 | 1,264 | -3 | % | 1,169 | 5 | % | 4,952 | 4,886 | 1 | % | ||||||||||||||||||||
| Net Income Before Income Tax | 2 | 8 | -75 | % | 185 | -99 | % | 44 | 682 | -94 | % | ||||||||||||||||||||
| Provision for Income Tax | (0 | ) | (2 | ) | -75 | % | (49 | ) | -99 | % | (9 | ) | (156 | ) | -94 | % | |||||||||||||||
| Net Income | $ | 1 | $ | 6 | -75 | % | $ | 136 | -99 | % | $ | 35 | $ | 526 | -93 | % | |||||||||||||||
| BALANCE SHEETS (Unaudited) | |||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
| Dec 31, 2023 | Sept 30, 2023 | Three Month Change | Dec 31, 2022 | One Year Change | |||||||||||||||
| Assets | |||||||||||||||||||
| Cash and due from Banks | $ | 1,817 | $ | 3,359 | -46 | % | $ | 2,844 | -36 | % | |||||||||
| Interest bearing deposits in banks | 7,896 | 11,635 | -32 | % | 11,480 | -31 | % | ||||||||||||
| Securities | 23,034 | 24,316 | -5 | % | 23,682 | -3 | % | ||||||||||||
| Loans | 143,913 | 140,467 | 2 | % | 146,185 | -2 | % | ||||||||||||
| Allowance for loan losses | (1,150 | ) | (1,227 | ) | -6 | % | (1,235 | ) | -7 | % | |||||||||
| Net Loans | 142,763 | 139,240 | 3 | % | 144,950 | -2 | % | ||||||||||||
| Premises and fixed assets | 6,418 | 6,512 | -1 | % | 6,769 | -5 | % | ||||||||||||
| Accrued Interest receivable | 765 | 678 | 13 | % | 699 | 9 | % | ||||||||||||
| Intangible assets | 46 | -100 | % | 65 | -100 | % | |||||||||||||
| Other assets | 2,031 | 2,534 | -20 | % | 2,527 | -20 | % | ||||||||||||
| Total Assets | $ | 184,724 | $ | 188,320 | -2 | % | $ | 193,016 | -4 | % | |||||||||
| Liabilities and Shareholders' Equity | |||||||||||||||||||
| Deposits | |||||||||||||||||||
| Demand, non-interest bearing | $ | 42,803 | $ | 43,702 | -2 | % | $ | 46,152 | -7 | % | |||||||||
| Interest Bearing Demand | 23,528 | 30,865 | -24 | % | 23,892 | -2 | % | ||||||||||||
| Money Market and Savings | 26,667 | 27,207 | -2 | % | 40,438 | -34 | % | ||||||||||||
| Certificates of Deposit | 49,200 | 41,317 | 19 | % | 31,286 | 57 | % | ||||||||||||
| Total Deposits | 142,198 | 143,091 | -1 | % | 141,768 | 0 | % | ||||||||||||
| Total Borrowing | 29,430 | 31,923 | -8 | % | 38,149 | -23 | % | ||||||||||||
| Accrued interest payable | 335 | 303 | 11 | % | 165 | 103 | % | ||||||||||||
| Other liabilities | 214 | 316 | -33 | % | 606 | -65 | % | ||||||||||||
| Total Liabilities | 172,177 | 175,633 | -2 | % | 180,690 | -5 | % | ||||||||||||
| Shareholders' Equity | |||||||||||||||||||
| Common Stock | 1,650 | 1,644 | 0 | % | 1,633 | 1 | % | ||||||||||||
| Additional paid in capital | 13,108 | 13,095 | 0 | % | 13,019 | 1 | % | ||||||||||||
| Retained Earnings | (1,493 | ) | (1,495 | ) | -0 | % | (1,541 | ) | -3 | % | |||||||||
| Other Comprehensive Income | (718 | ) | (557 | ) | 29 | % | (785 | ) | -9 | % | |||||||||
| Total Shareholders' Equity | 12,547 | 12,687 | -1 | % | 12,326 | 2 | % | ||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 184,724 | $ | 188,320 | -2 | % | $ | 193,016 | -4 | % | |||||||||
| Quarter Ended Dec 31, 2023 | Quarter Ended Sept 30, 2023 | Quarter Ended Dec 31, 2022 | YTD 2023 | YTD 2022 | ||||||||||||||
| Financial Ratios | ||||||||||||||||||
| Return on Average Assets | 0.00 | % | 0.01 | % | 0.30 | % | 0.02 | % | 0.29 | % | ||||||||
| Return on Average Equity | 0.03 | % | 0.19 | % | 4.41 | % | 0.28 | % | 4.36 | % | ||||||||
| Efficiency Ratio | 106.4 | % | 101.4 | % | 83.9 | % | 101.2 | % | 85.0 | % | ||||||||
| Net Interest Margin | 2.48 | % | 2.64 | % | 3.11 | % | 2.59 | % | 3.18 | % | ||||||||
| Loan to Deposits | 101.2 | % | 97.3 | % | 102.2 | % | ||||||||||||
| Tangible Book Value per Share | 7.58 | 7.71 | 7.51 | |||||||||||||||
| Book Value per Share | 7.60 | 7.74 | 7.55 | |||||||||||||||
| Earnings per Share | 0.00 | 0.00 | 0.08 | 0.02 | 0.32 | |||||||||||||
| Asset Quality | ||||||||||||||||||
| Net Loan Charge-offs (recoveries) | - | - | - | |||||||||||||||
| Nonperforming Loans | - | - | $ | 659 | ||||||||||||||
| Nonperforming Assets to Total Assets | 0.00 | % | 0.00 | % | 0.34 | % | ||||||||||||
| Allowance for Loan Losses to Total Loans | 0.80 | % | 0.87 | % | 0.85 | % | ||||||||||||
| Other Real Estate Owned | ||||||||||||||||||
| CAPITAL (Bank only) | ||||||||||||||||||
| Tier 1 leverage ratio | 9.56 | % | 9.63 | % | 9.37 | % | ||||||||||||
| Tier 1 risk-based capital ratio | 14.16 | % | 14.46 | % | 13.64 | % | ||||||||||||
| Total risk based capital ratio | 15.09 | % | 15.48 | % | 14.63 | % | ||||||||||||
