Ledyard Financial Group, Inc. (the “Company”, OTCQX®: LFGP), the
holding company for Ledyard National Bank (the “Bank”), today
announced financial results for Q2 2024. Quarter-over-quarter
improvement in net income provides continued evidence that the
Company’s strategic plan is beginning to bear fruit. By continuing
to leverage the integration of its banking and wealth management
businesses, the Company remains focused on promoting growth and the
pursuit of making life better for its clients, its employees, its
shareholders, and the communities it serves.
Q2 2024 Highlights
- Q2 2024 net income was $726 thousand ($0.22 per share), up $263
thousand over Q1 2024, and up $7 thousand from Q2 2023.
- Total assets ended the quarter at $908.0 million, having grown
$13.6 million or 1.5% from the prior quarter, and ending $158.6
million or 21.2% higher than a year ago. Loan growth in Q2 2024
remained strong, with gross loan balances increasing $38.8 million
or 8.5% from the prior quarter, and ending $124.4 million or 33.5%
higher than a year ago.
- Client deposits were up $23.9 million and $182.2 million over
Q1 2024 and Q2 2023, respectively. Contributing to this increase
was the transfer onto the Bank’s balance sheet of $123.2 million in
Ledyard Financial Advisors (LFA) client wealth management funds in
January; excluding those new balances, client deposits grew $6.4
million (1.1%) in Q2 2024 and $39.4 million (7.4%) since a year
ago.
- Capital ratios remain well in excess of regulatory
well-capitalized minimums.
- Assets under management (AUM) ended the quarter at $2.04
billion, up 0.8% and 12.0% from Q1 2024 and Q2 2023, respectively.
Revenue from the wealth management business was up $111 thousand
(3.3%) and $358 thousand (11.4%) over the corresponding
quarters.
- The Company declared a regular quarterly dividend of $0.21 per
share.
“In Q2 we remained focused on developing and maintaining a
balance sheet with a product mix, liquidity profile, and capital
base that supports the company’s strategic direction. With our
strong liquidity position, we were able to grow loans and deposits,
add to credit reserves, shrink the investment portfolio, and widen
net interest margin by 13 basis points. The second quarter earnings
improvement represents another step forward on our path to more
normalized performance levels, and we are maintaining our quarterly
dividend,” said Peter Sprudzs, CFO.
“Our continued ability to grow both loans and deposits confirms
that the growth pillar of our strategic plan is on track, and the
widening of our net interest margin and the revenue growth in our
wealth management business reveal the strength of our uniquely
integrated business model. Customer satisfaction surveys confirm
that we are succeeding in the pursuit of the second pillar of our
strategic plan – high client engagement, and with our recent
recognition as the “Best Place to Work” by the Concord Monitor’s
Cappies Awards, it is clear that our efforts to reward, support,
and develop our workforce are also returning value. We look forward
to continued growth and evolution as our upcoming strategic
initiatives unfold,” added Josephine Moran, CEO.
Q2 2024 Results
Net income for Q2 2024 was $726 thousand ($0.22 per share)
compared to $463 thousand ($0.14 per share) in Q1 2024 and $719
thousand ($0.22 per share) in Q2 2023.
Q2 2024 net interest income was $4.5 million, up $301 thousand
or 7.2% from the prior quarter, and up $248 thousand or 5.8% from
Q2 2023. Net interest margin (NIM) in Q2 2024 widened to 2.14% from
2.01% in Q1 2024 and was down 34 basis points from 2.48% in Q2
2023. Driven by a 33-basis point increase in loan portfolio yield,
earning assets returned 16 basis points more than in Q1 2024, while
the cost of interest-bearing liabilities inched up only 5 basis
points. Reported NIM figures do not reflect the beneficial effect
of the tax advantage provided by the Company’s $180.1 million in
municipal bond holdings. (Application of a more precise calculation
methodology accounts for the 3-basis point change in the NIM
reported for Q1 2024, previously reported as 1.98%.)
Provision for credit losses was $139 thousand in Q2 2024, which
consisted of a net $87 thousand addition to the Allowance for
Credit Losses (ACL), and a $52 thousand net addition to the
Liability for Unfunded Commitments.
Non-interest revenue for Q2 2024 amounted to $3.9 million, up
from $3.8 million and $3.6 million in Q1 2024 and Q2 2023,
respectively.
- Revenue from LFA amounted to $3.5 million in Q2 2024, up $111
thousand or 3.3% from $3.4 million in Q1 2024, and up $358 thousand
or 11.4% from $3.1 million in Q2 2023.
- AUM ended the quarter at $2.04 billion, up 0.8% from $2.02
billion at the end of Q1 2024, and up 12.0% from $1.82 billion at
the end of Q2 2023.
Non-interest expense in Q2 2024 was $7.5 million, up $430
thousand (6.1%) from $7.1 million in Q1 2024, and up $443 thousand
(6.3%) from $7.1 million in Q2 2023. Most of the increase over the
prior quarter results from annual salary increases for staff and
the deployment of new on-line capabilities.
The Company continues to benefit from its investments in Low
Income Housing Tax Credits and tax-exempt municipal bonds. In Q2
2024, the net tax expense was $33 thousand.
Total assets of the Company at June 30, 2024 were $908.0
million, up $13.6 million or 1.5% from the end of Q1 2024, and up
$158.6 million or 21.2% from the end of Q2 2023, driven primarily
by loan growth.
Gross loans at June 30, 2024 were $496.2 million, compared to
$457.4 million on March 31, 2024 and $371.8 million on June 30,
2023, higher by 8.5% for the quarter and 33.5% for the year. Loan
growth has been concentrated in the commercial loan portfolio.
During Q2 the Company executed a minor balance sheet
repositioning in support of its growth strategy. Through the sale
of $34 million in AFS securities (a mix of floating rate securities
and long-dated municipal bonds), the Company created additional
capacity for loan growth and recorded a net gain of $6
thousand.
Credit reserves amounted to $4.2 million on June 30,2024, the
sum of $3.4 million in ACL and $775 thousand in Liability for
Unfunded Commitments. ACL increased $87 thousand and $298 thousand
over Q1 2024 and Q2 2023, respectively, and amounted to 0.69% of
loan balances at June 30, 2024, as compared to 0.73% and 0.84% at
March 31,2024, and June 30, 2023, respectively. The Liability for
Unfunded Commitments was up $52 thousand and $772 thousand from Q1
2024 and Q2 2023, respectively. This reserve balance is included in
Other Liabilities on the balance sheet. The Company experienced net
recoveries of $5 thousand in Q2 2024, and the ACL at the end of the
quarter provides 3.6x coverage of non-performing assets.
Client deposits were up $23.9 million and $182.2 million over Q1
2024 and Q2 2023, respectively. Contributing to these increases
were net deposit inflows from LFA client wealth management funds of
$17.5 million in Q2 2024 and the transfer onto the Bank’s balance
sheet of $123.2 million in LFA client wealth management funds in
January; excluding those new balances, client deposits grew $6.4
million (1.1%) in Q2 2024 and $39.4 million (7.4%) since a year
ago.
The Company continues to focus on maintaining a robust liquidity
profile, with a diverse deposit base (roughly 75/25
retail/commercial), a small proportion of uninsured deposits
(estimated at 14%), and proven access to both unsecured and secured
wholesale funding channels.
Quarter-over-quarter, the Company reduced wholesale borrowings
and deposits acquired through brokers or listing channels by $10.2
million. The overall maturity profile of the wholesale funding was
3.8 years at quarter end, effectively unchanged from the prior
quarter.
The Company has significant liquidity resources available to
support operations, as it maintains good standing and extensive
portfolios pledged at FHLB Boston and the Federal Reserve. The
Company had over $340 million in readily accessible borrowing
capacity as of June 30, 2024.
At June 30, 2024, shareholders’ equity was $55.5 million,
essentially unchanged from the prior quarter, but down $380
thousand or 0.7% from Q2 2023. These changes include the impact of
changes in Accumulated Other Comprehensive Income (AOCI), which
moved from an unrealized loss position of $15.1 million at Q2 2023
to an unrealized loss position of $14.9 million at Q1 2024, and
then back to an unrealized loss position of $15.1 million at the
end of Q2 2024. These movements directly track interest rate driven
changes in the market value of Available-for-Sale securities and
derivative contracts used for hedging purposes.
The Company’s capital ratios remain well in excess of the levels
required under Basel 3 and the regulatory framework for prompt
corrective action. At June 30, 2024, the Company’s book value per
share excluding AOCI stood at $20.70 compared to $20.93 on March
31, 2024 and $21.04 on June 30, 2023.
Dividend Declaration
The Company is pleased to announce that a regular quarterly
dividend of $0.21 per share will be paid on September 6, 2024 to
shareholders of record as of August 16, 2024.
About the Company
Ledyard Financial Group, Inc., headquartered in Hanover, New
Hampshire, is the holding company for Ledyard National Bank,
founded in 1991. Ledyard National Bank is a full-service community
bank offering a broad range of banking, investment, and wealth
management services.
Ledyard Financial Group, Inc. shares can be bought and sold
through the NASD sanctioned OTCQX® Best Markets under the trading
symbol LFGP. For additional information about the company, stock
activity, or financial results please visit the Investor Relations
section of bank’s website (www.ledyard.bank), or contact the
Company’s Chief Financial Officer, Peteris J. Sprudzs.
For the Three Months
Ended
Income Statement (unaudited,
$000s)
6/30/2024
3/31/2024
6/30/2023
Net interest income before provision
$
4,482
$
4,181
$
4,234
Provision for credit losses
139
486
233
Net interest income after
provision
4,343
3,695
4,002
Ledyard Financial Advisors revenue
3,495
3,384
3,137
Securities gains
6
-
-
Other non-interest income
421
373
415
Total non-interest income
3,922
3,757
3,552
Total revenue
8,265
7,452
7,554
Non-interest expense
7,506
7,076
7,063
Pre-tax income
759
376
491
Tax expense (benefit)
33
(87
)
(228
)
Net income
$
726
$
463
$
719
For the Three Months
Ended
Other Operating Metrics
6/30/2024
3/31/2024
6/30/2023
Earnings per common share,
basic
$
0.22
$
0.14
$
0.22
Earnings per common share,
diluted
$
0.22
$
0.14
$
0.22
Dividends per common share
$
0.21
$
0.21
$
0.21
Return on assets
0.28
%
0.18
%
0.37
%
Return on equity
4.61
%
2.82
%
4.97
%
Net interest margin
2.14
%
2.01
%
2.48
%
Efficiency ratio
89.31
%
89.14
%
90.71
%
Balance Sheet (unaudited,
$000s)
6/30/2024
3/31/2024
6/30/2023
Investments & interest-bearing
deposits
$
349,109
$
374,580
$
314,569
Gross loans
496,232
457,444
371,804
Allowance for credit losses
(3,409
)
(3,322
)
(3,111
)
Net loans
492,823
454,122
368,693
Premises, equipment & other
assets
66,053
65,661
66,088
Total assets
$
907,985
$
894,363
$
749,350
Client deposits
711,442
687,591
529,222
Brokered & institutional deposits
82,366
92,382
32,368
Borrowings
32,280
32,452
108,815
Subordinated debt
18,000
18,000
18,000
Other liabilities
8,375
8,393
5,043
Total liabilities
852,463
838,818
693,448
Capital
72,224
72,122
72,656
Accumulated other comprehensive loss
(15,058
)
(14,933
)
(15,110
)
Treasury stock
(1,644
)
(1,644
)
(1,644
)
Total shareholders' equity
55,522
55,545
55,902
Total liabilities and equity
$
907,985
$
894,363
$
749,350
Other Metrics (as of stated
date)
6/30/2024
3/31/2024
6/30/2023
Book value per share (excluding
AOCI)
$
20.70
$
20.93
$
21.04
Book value per share (including
AOCI)
$
16.29
$
16.49
$
16.56
Leverage ratio
7.78
%
7.81
%
9.58
%
Risk based capital ratio
15.54
%
16.25
%
19.79
%
Allowance to total loans
0.69
%
0.73
%
0.84
%
Texas ratio
1.09
%
1.94
%
1.28
%
Allowance to non-performing
assets
360
%
198
%
280
%
Assets under management
(billions)
$
2.038
$
2.021
$
1.820
Shares of common stock issued
3,525,357
3,483,504
3,491,100
Treasury shares
115,998
115,998
115,998
Stock price - high
$
15.20
$
16.74
$
17.00
Stock price - low
$
13.44
$
14.80
$
13.75
Stock price - average
$
14.49
$
15.59
$
14.98
Forward-Looking Statements: Certain statements herein
constitute “forward-looking statements” within the meaning of
Section 27A of the Securities Act of 1933, as amended, and are
intended to be covered by the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Such statements may be
identified by words such as “believes,” “will,” “would,” “expects,”
“project,” “may,” “could,” “developments,” “strategic,”
“launching,” “opportunities,” “anticipates,” “estimates,”
“intends,” “plans,” “targets” and similar expressions. These
statements are based upon the current beliefs and expectations of
Ledyard Financial Group, Inc.’s (the “Company’s”) management and
are subject to significant risks and uncertainties. Actual results
may differ materially from those set forth in the forward-looking
statements as a result of numerous factors. Factors that could
cause such differences to exist include, but are not limited to,
changes in interest rates; changes in general business and economic
conditions (including inflation and concerns about liquidity) on a
national basis and in the local markets in which the Company
operates, including changes that adversely affect borrowers’
ability to service and repay the Company’s loans; changes in
customer behavior; turbulence in the capital and debt markets and
the impact of such conditions on the Company’s business activities;
changes in employment levels; increases in loan default and
charge-off rates; decreases in the value of securities in the
Company’s investment portfolio; fluctuations in real estate values;
the possibility that future credit losses may be higher than
currently expected due to changes in economic assumptions, customer
behavior or adverse economic developments; changes in loan loss
reserves; decreases in deposit levels necessitating increased
borrowing to fund loans and investments; competitive pressures from
other financial institutions; operational risks including, but not
limited to, cybersecurity incidents, fraud, natural disasters, war,
terrorism, civil unrest, and future pandemics; changes in
regulation; changes in accounting standards and practices; the risk
that goodwill and intangibles recorded in the Company’s financial
statements will become impaired; demand for loans in the Company’s
market area; the Company’s ability to attract and maintain
deposits; risks related to the implementation of acquisitions,
dispositions, and restructurings; and the risk that the Company may
not be successful in the implementation of its business strategy.
Should one or more of these risks materialize or should underlying
beliefs or assumptions prove incorrect, the Company’s actual
results could differ materially from those discussed. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this release. The
Company disclaims any obligation to publicly update or revise any
forward-looking statements to reflect changes in underlying
assumptions or factors, new information, future events or other
changes, except as required by law.
Note: Certain reclassifications have been made to the
prior period information to conform to the current period
presentation.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240726083557/en/
Peteris J. Sprudzs, CFO (603) 640-2743
Peter.sprudzs@ledyard.bank