Ledyard Financial Group, Inc. (the “Company”, OTCQX: LFGP), the
holding company for Ledyard National Bank (the “Bank”), today
announced financial results for Q1 2024. The balance sheet growth
in the quarter is evidence of the Company’s unique approach to
integrating its banking and wealth management businesses, and 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.
Q1 2024 Highlights
- Q1 2024 net income was $463 thousand, up $347 thousand over Q4
2023, and down $1.0 million from Q1 2023. The improvement over Q4
2023 is due in part to higher revenue, primarily related to the
wealth management business, while the decline from the prior year
can be attributed primarily to the industry-wide compression in net
interest margin.
- Total assets ended the quarter at $894.4 million, having grown
$39.6 million or 4.6% from the prior quarter, and up $147.6 million
or 19.8% from a year ago; loan growth in Q1 2024 remained strong,
with gross loan balances increasing $38.7 million or 9.2% from the
prior quarter, and up $93.9 million or 25.8% from a year ago.
- Client deposits were up $127.7 million and $162.6 million over
Q4 2023 and Q1 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 $2.4
million (0.4%) in Q1 2024 and $37.3 million (7.1%) since a year
ago.
- Capital ratios remain well in excess of regulatory
well-capitalized minimums.
- Assets under management (AUM) ended the quarter at $2.02
billion, up 3.8% and 15.4% from Q4 and Q1 2023, respectively.
Revenue from the wealth management business was up $169 thousand
(5.3%) and $290 thousand (9.4%) over the corresponding
quarters.
- The Company declared a regular quarterly dividend of $0.21 per
share.
“In Q1 we remained focused on ensuring continued balance sheet
strength - we added over $120 million in client deposits from our
wealth management business to bolster our already strong liquidity
profile, we added nearly $40 million in high-quality loans, and we
increased credit reserves by 20%. The quarter-over-quarter earnings
improvement represents a first step towards returning to more
normalized performance levels, and we are maintaining our quarterly
dividend,” said Peter Sprudzs, CFO.
“Our ability to grow both loans and deposits in the first
quarter confirmed that our growth strategy is working, especially
as we continue to derive synergies from our complementary banking
and wealth management businesses. We are pleased that clients and
prospects are recognizing the unique value and service we provide,
and we look forward to growing and deepening those relationships as
our upcoming growth initiatives unfold,” added Josephine Moran,
CEO.
Q1 2024 Results
Net income for Q1 2024 was $463 thousand ($0.14 per share)
compared to $116 thousand ($0.04 per share) in Q4 2023 and $1.5
million ($0.45 per share) in Q1 2023.
Q1 2024 net interest income was $4.2 million, essentially
unchanged from the prior quarter, but down $695 thousand or 14.3%
from Q1 2023. Net interest margin (NIM) in Q1 2024 decreased to
1.98% from 2.16% in Q4 2023 and was down 91 basis points from 2.89%
in Q1 2023. Reported NIM figures do not reflect the beneficial
effect of the tax advantage provided by the Company’s $184.6
million in municipal bond holdings.
Provision for credit losses was $486 thousand in Q1 2024, which
was comprised of $537 thousand directed to the Allowance for Credit
Losses (ACL) and a $51 thousand reduction in the Liability for
Unfunded Commitments.
Non-interest revenue for Q1 2024 amounted to $3.8 million, up
from $3.6 million and $3.4 million in Q4 and Q1, 2023,
respectively.
- Revenue from LFA amounted to $3.4 million in Q1 2024, up $169
thousand or 5.3% from $3.2 million in Q4 2023, and up $290 thousand
or 9.4% from $3.1 million in Q1 2023.
- AUM ended the quarter at $2.02 billion, up 3.8% from $1.95
billion at the end of Q4 2023, and up 15.4% from $1.75 billion at
the end of Q1 2023.
Non-interest expense in Q1 2024 was $7.1 million, up $53
thousand (0.8%) from $7.0 million in Q4 2023, and up $336 thousand
(5.0%) from $6.7 million in Q1 2023.
The Company continues to benefit from its investments in Low
Income Housing Tax Credits and tax-exempt municipal bonds. In Q1
2024, the tax credits earned from these investments exceeded the
tax liability for the quarter, resulting in a tax benefit of $87
thousand.
Total assets of the Company at March 31, 2024 were $894.4
million, up $39.6 million or 4.6% from the end of Q4 2023, and up
$147.6 million or 19.8% from the end of Q1 2023, driven primarily
by loan growth and new investments.
Gross loans at March 31, 2024 were $457.4 million, compared to
$418.8 million on December 31, 2023 and $363.5 million on March 31,
2023, higher by 9.2% for the quarter and 25.8% for the year. Loan
growth has been concentrated in the commercial loan portfolio.
Credit reserves amounted to $4.0 million on 3/31/2024, the sum
of $3.3 million in ACL and $723 thousand in Liability for Unfunded
Commitments. ACL increased $542 thousand and $474 thousand over Q4
2023 and Q1 2023 respectively, and amounted to 0.73% of loan
balances at March 31, 2024, as compared to 0.66% and 0.78% at
December 31, 2023, and March 31, 2023, respectively. The Liability
for Unfunded Commitments declined $51 thousand from the prior
quarter end, and had a negligible balance in Q1 2023. This reserve
balance is included in Other Liabilities on the balance sheet. The
Company experienced net recoveries of $5 thousand in Q1 2024, and
the ACL at the end of the quarter provides 1.9x coverage of
non-performing assets.
Client deposits were up $127.7 million and $162.6 million over
Q4 2023 and Q1 2023, respectively. Contributing to this increase
was 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 $2.4 million (0.4%) in Q1 2024 and
$37.3 million (7.1%) since a year ago.
The Company continues to focus on maintaining a robust liquidity
profile, with a diverse deposit base (roughly 70/30
retail/commercial), a small proportion of uninsured deposits
(estimated at 13%), and proven access to both unsecured and secured
wholesale funding channels.
Quarter-over-quarter, the Company reduced wholesale borrowings
and brokered deposits by $88.5 million as a result of the transfer
onto the Bank’s balance sheet of the $123.2 million of wealth
management deposits. As part of that reduction, deposits acquired
through broker and listing service channels decreased $7.8 million
from $100.2 million to $92.4 million. The overall maturity profile
of the wholesale funding that remains has a longer term now than at
the end of the prior quarter.
The Company has significant liquidity resources available to
support operations due to its good standing and with extensive
portfolios pledged at FHLB Boston and the Federal Reserve. The
Company had over $370 million in readily accessible borrowing
capacity as of March 31, 2024.
At March 31, 2024, shareholders’ equity was $55.5 million, down
$475 thousand or 0.8% from Q4 2023, and up $640 thousand or 1.2%
from Q1 2023. These changes include the impact of changes in
Accumulated Other Comprehensive Income (AOCI), which moved from an
unrealized loss position of $15.9 million at Q1 2023 to an
unrealized loss position of $14.6 million and $14.9 million at the
end of Q4 2023 and Q1 2024, respectively. These movements directly
track interest rate driven changes in the market value of
Available-For-Sale securities and derivative contracts used for
hedging purposes.
As expected, capital ratios have declined in concert with
strategic balance sheet growth, and all the Company’s capital
ratios remain well in excess of the amount required by the Federal
Reserve for a bank holding company to be considered well
capitalized. At March 31, 2024, the Company’s book value per share
excluding AOCI stood at $20.93 compared to $20.97 on December 31,
2023 and $21.15 on March 31, 2023.
Dividend Declaration
The Company is pleased to announce that a regular quarterly
dividend of $0.21 per share will be paid on June 7, 2024 to
shareholders of record as of May 17, 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 (603)
640-2743; Peter.sprudzs@ledyard.bank.
For the Three Months
Ended
Income Statement (unaudited,
$000s)
3/31/2024
12/31/2023
3/31/2023
Net interest income before provision
$
4,181
$
4,153
$
4,876
Provision for credit losses
486
712
21
Net interest income after
provision
3,695
3,441
4,855
Ledyard Financial Advisors revenue
3,384
3,215
3,094
Securities losses
-
(5
)
-
Other non-interest income
373
350
337
Total non-interest income
3,757
3,560
3,431
Total revenue
7,452
7,001
8,286
Non-interest expense
7,076
7,023
6,740
Pre-tax income (loss)
376
(22
)
1,546
Tax expense (benefit)
(87
)
(138
)
54
Net income
$
463
$
116
$
1,492
For the Three Months
Ended
Other Operating Metrics
3/31/2024
12/31/2023
3/31/2023
Earnings per common share,
basic
$
0.14
$
0.04
$
0.45
Earnings per common share,
diluted
$
0.14
$
0.04
$
0.45
Dividends per common share
$
0.21
$
0.21
$
0.21
Return on assets
0.18
%
0.05
%
0.77
%
Return on equity
2.82
%
0.83
%
10.32
%
Efficiency ratio
89.14
%
91.06
%
81.14
%
Balance Sheet (unaudited,
$000s)
3/31/2024
12/31/2023
3/31/2023
Investments & interest-bearing
deposits
$
374,580
$
374,516
$
319,987
Gross loans
457,444
418,766
363,499
Allowance for credit losses
(3,322
)
(2,780
)
(2,848
)
Net loans
454,122
415,986
360,651
Premises, equipment & other
assets
65,661
64,276
66,143
Total assets
$
894,363
$
854,779
$
746,781
Client deposits
687,591
559,915
525,013
Brokered & institutional deposits
92,382
100,242
-
Borrowings
32,452
113,076
139,686
Subordinated debt
18,000
18,000
18,000
Other liabilities
8,393
7,526
9,178
Total liabilities
838,818
798,759
691,877
Capital
72,122
72,276
72,432
Accumulated other comprehensive loss
(14,933
)
(14,612
)
(15,883
)
Treasury stock
(1,644
)
(1,644
)
(1,644
)
Total shareholders' equity
55,545
56,020
54,904
Total liabilities and equity
$
894,363
$
854,779
$
746,781
Other Metrics (as of stated
date)
3/31/2024
12/31/2023
3/31/2023
Book value per share (excluding
AOCI)
$
20.93
$
20.97
$
21.15
Book value per share (including
AOCI)
$
16.49
$
16.64
$
16.40
Leverage ratio
7.81
%
8.31
%
9.56
%
Risk based capital ratio
16.25
%
17.61
%
19.91
%
Allowance to total loans
0.73
%
0.66
%
0.78
%
Texas ratio
1.94
%
2.01
%
1.48
%
Allowance to non-performing
assets
198
%
161
%
223
%
Assets under management
(billions)
$
2.021
$
1.947
$
1.751
Shares of common stock issued
3,483,504
3,483,513
3,463,692
Treasury shares
115,998
115,998
115,998
Stock price - high
$
16.74
$
17.00
$
18.71
Stock price - low
$
14.80
$
12.95
$
15.22
Stock price - average
$
15.59
$
14.53
$
17.17
Forward-Looking Statements: Statements concerning future
performance, developments or events, expectations for growth and
income forecasts, and any other guidance on future periods
constitute forward-looking statements that are subject to a number
of risks and uncertainties. Actual results may differ materially
from stated expectations. Specific factors include, but are not
limited to, loan production, competitive pressure in the banking
industry, balance sheet management, net interest margin variations,
the effect of changes in equity prices on assets under management,
the ability to control costs and expenses, changes in the interest
rate environment, financial policies of the United States
government, and general economic conditions. The Company disclaims
any obligation to update any such factors. 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/20240426854016/en/
For further information contact: Peteris J. Sprudzs, CFO
(603) 640-2743 Peter.sprudzs@ledyard.bank