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Ledyard Financial Group Reports Third Quarter and Year-to-date Earnings

Ledyard Financial Group, Inc. (ticker symbol LFGP), the holding company for Ledyard National Bank, today announced financial results for Q3 2022 and Q3 2022 YTD. The results confirmed the strength and resiliency of the company’s core businesses. ROA, ROE, and key capital ratios all exceeded figures for comparable prior periods. The company remains focused on safely navigating today’s uncertain economic environment (including volatile equity markets), while continuing to support its clients, its employees, and the communities it serves.

Net income for Q3 2022 was $2.08 million or $0.64 per share compared to $1.97 million or $0.61 per share for Q3 2021, an increase of $105 thousand or 5%. Net income for Q3 2022 YTD was $6.20 million or $1.90 per share compared to $5.77 million or $1.80 per share for the comparable prior year period, an increase of $429 thousand or 7%. In recognition of the low level of risk in the company’s loan portfolio, $750 thousand was released from the allowance for loan losses during Q3 2022.

Total revenue (comprised of net interest income after provision and all non-interest revenue) for Q3 2022 was $8.68 million compared to $8.39 million for Q3 2021, an increase of $298 thousand, or 4%. Total revenue for Q3 2022 YTD was $25.60 million compared to $24.99 million for Q3 2021, an increase of $610 thousand or 2%. Net interest income for Q3 2022 was $4.50 million compared to $4.65 million for Q3 2021, a decrease of $147 thousand or 3%. Net interest income for Q3 2022 YTD was $13.76 million compared to $13.72 million for Q3 2021, for an increase of $43 thousand or less than 1%. As noted above, a release of $750 thousand from the allowance for loan losses in Q3 2022 contributed favorably to net interest income after provision, as comparable prior periods had either a small provision or none at all. Total non-interest revenue, consisting primarily of revenue from Ledyard Financial Advisors (see detail discussion below), amounted to $3.43 million for Q3 2022 and $11.09 million for Q3 2022 YTD, down 8% and 2%, respectively, from the comparable periods in 2021.

Ledyard Financial Advisors (LFA), a division of Ledyard National Bank, reported revenue trends consistent with the broad-based negative market trends of the last year. With the S&P 500 down 17% and the yield on ten-year U.S. treasuries up over 200 basis points, Ledyard’s assets under management (AUM) totaled $1.60 billion at 9/30/2022, down 15% from $1.88 billion at 9/30/2021. Accordingly, at $3.11 million and $9.75 million, Q3 2022 and Q3 2022 YTD revenues from LFA were down 8% and 2%, respectively, from the comparable prior year periods. Without a recovery in the equity markets LFA revenue growth will remain under pressure.

Non-interest expense for Q3 2022 was $6.49 million compared to $6.22 million for Q3 2021, an increase of $271 thousand or 4%. Non-interest expense for Q3 2022 YTD was $18.95 million compared to $18.57 million for the same period in 2021, an increase of $381 thousand or 2%.

On September 30, 2022, the Company’s shareholders’ equity stood at $47.4 million compared to $72.6 million on the same date in 2021. The decrease in shareholders’ equity is due to a decline in Accumulated Other Comprehensive Income (AOCI), which moved from an unrealized gain position of $9.1 million at September 30, 2021 to an unrealized loss position of $21.5 million at September 30, 2022. This change is directly related to the interest rate driven decline in the market value of Available-For-Sale securities and related derivative contracts used for hedging purposes. (Note: AOCI is excluded when calculating regulatory capital ratios.) All of the Company’s capital ratios are well in excess of the amount required by the Federal Reserve for a bank holding company to be considered “well capitalized” and the Company has significant levels of liquidity resources available to support operations during these unusual times. At September 30, 2022, the Company’s book value per share excluding AOCI stood at $20.55 compared to $19.01 for the same period in 2021.

At $729.5 million, total assets of the Company at September 30, 2022 were essentially unchanged from total assets of $729.2 million at September 30, 2021. Loans, net of the allowance for loan losses at September 30, 2022, were $346.8 million compared to $344.6 million for the same date last year, an increase of $2.2 million or less than 1%. Deposits at September 30, 2022 were essentially unchanged from the prior year, ending Q3 2022 at $567.7 million compared to $567.4 million a year ago.

The Allowance for Loan Losses stood at $6.7 million at September 30, 2022, compared to $8.1 million at September 30, 2021, providing over 2x coverage of non-performing assets as of the end of Q3 2022. Total non-performing assets were $3.2 million at September 30, 2022, compared to $1.3 million for the same period in 2021, with the increase attributable to two currently underperforming loans that the company expects will cure.

The Company is pleased to welcome Peter Sprudzs as the new SVP Chief Financial Officer. Mr. Sprudzs brings many years of experience in finance, treasury, and risk management for public and private companies both large and small and succeeds Greg Steverson, who will be retiring from Ledyard in December after 20 years with the Company.

Ledyard Financial Group, Inc., headquartered in Hanover, New Hampshire, is the holding company for Ledyard National Bank. Ledyard National Bank, founded in 1991, is a full-service community bank offering a broad range of banking, investment, and wealth management services. Stock activity information can be found in the Investor Relations section of Ledyard’s website, which includes a wealth of other information that Ledyard shareholders and prospective shareholders may find of interest.

Ledyard Financial Group, Inc. shares can be bought and sold through the NASD sanctioned OTC Markets under the trading symbol LFGP. Shares may be traded through an individual’s broker. For more information, please refer to the Investor Relations section of the bank’s website at www.ledyard.bank or contact the Company’s SVP CFO, Peter Sprudzs.

Ledyard Financial Group, Inc.

Selected Financial Highlights

(Unaudited)

Operating Data

For the Three Months Ended

For the Nine Months Ended

9/30/2022

9/30/2021

9/30/2022

9/30/2021

 

Loan interest income

$3,179,740

$3,415,663

$9,414,221

$10,497,775

Investment interest income

1,887,898

1,554,828

5,556,347

4,395,647

Total interest income

5,067,638

4,970,491

14,970,568

14,893,422

Interest expense on deposits

130,726

160,441

450,770

591,643

Interest expense on borrowings

436,453

162,983

760,082

585,198

Total interest expense

567,179

323,424

1,210,852

1,176,841

Net interest income before provision

4,500,459

4,647,067

13,759,716

13,716,581

Provision for loan losses

(750,000)

-

(750,000)

 

50,000

Net interest income after provision

5,250,459

4,647,067

14,509,716

13,666,581

Ledyard Financial Advisors revenue

3,112,208

3,376,600

9,748,417

9,762,432

Securities gains (losses)

-

-

-

275,827

Other non-interest income

321,409

362,860

1,338,162

1,281,230

Total revenue

8,684,076

8,386,527

25,596,295

24,986,070

Non-interest expense

6,489,762

6,218,579

18,953,887

18,573,032

Pre-tax income

2,194,314

2,167,948

6,642,408

6,413,038

Tax expense

114,679

193,109

445,037

645,058

Net income

2,079,635

1,974,839

6,197,371

5,767,980

Earnings per common share, basic

$0.64

$0.61

$1.90

$1.80

Earnings per common share, diluted

$0.63

$0.60

$1.89

$1.77

Financial Condition Data

As of 9/30/2022

As of 9/30/2021

 

Total assets

729,479,304

729,188,129

Investments & interest-bearing deposits

317,304,454

337,409,854

Gross loans

353,550,744

352,719,776

Allowance for loan loss

6,720,147

8,077,220

Net loans

346,830,597

344,642,556

Premises, equipment & other assets

65,344,253

47,135,719

Deposits

567,746,223

567,442,683

Brokered Deposits

-

70,009,452

Borrowings

90,401,956

12,822,967

Subordinated debt

18,000,000

-

Other liabilities

5,933,528

6,273,332

Capital

70,561,027

65,337,575

Other comprehensive income

(21,519,192)

9,062,145

Treasury stock

(1,644,238)

(1,760,025)

Total shareholder's equity

47,397,597

72,639,695

 

Other Data

As of 9/30/2022

As of 9/30/2021

Dividends per common share

$0.63

$0.59

Book value per share (excluding OCI)

20.55

19.01

Book value per share (including OCI)

14.13

21.72

Efficiency ratio

76.28%

74.19%

Stock price - high

25.00

26.08

Stock price - low

19.76

17.87

Stock price - average

21.81

22.84

Common stock issued

3,470,127

3,468,612

Treasury shares

115,998

124,164

Assets under management (billions)

1.597

1.877

Leverage ratio

9.46%

8.69%

Risk based capital ratio

19.99%

16.79%

Return on assets

1.09%

1.08%

Return on equity

14.57%

11.00%

Allowance to total loans

1.90%

2.29%

Texas ratio

3.58%

1.90%

Allowance for loan losses to non-performing assets

211.86%

621.48%

Economic Value of Equity (000s)

Minus 100BP

Base

Plus 200 BP

Total Assets

725,423

696,887

636,829

Total Liabilities

578,944

550,606

518,616

Economic Value of Equity

146,479

146,281

118,213

Economic Value of Equity Ratio

20.20%

21.00%

18.60%

 

Sensitivity to Interest Rates - Net Interest Income (NII in 000s)

Current Year

NII

Y1

Y2

Y3

Y4

Y5

Up 200 BP

20,635

21,994

23,877

26,070

27,465

Base

21,309

22,940

24,115

25,507

26,342

Down 100BP

20,718

21,694

22,386

23,241

23,790

Prior Year

NII

Y1

Y2

Y3

Y4

Y5

Up 200 BP

19,767

20,577

22,348

24,044

25,845

Base

20,161

21,145

22,083

23,084

24,155

Down 100BP

20,042

20,191

20,554

21,125

21,672

--------Difference-------

NII

Y1

Y2

Y3

Y4

Y5

Up 200 BP

868

1,417

1,529

2,026

1,620

Base

1,148

1,795

2,032

2,423

2,187

Down 100BP

676

1,503

1,832

2,116

2,118

Source: Internal asset liability management reports for the third quarter of 2022.

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.

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