Lumbee Guaranty Bank Reports 1st Quarter 2023 Earnings

*Company reports increased quarterly earnings, asset growth, and improving net interest margin.*

· *$1.56 million in net income for the quarter-ended March 31, 2023.*
· *Year-over year asset growth of 0.6%, driven by an 5.8% increase in loans.*
· *Net interest income up 25.2% from a year earlier.*

*PEMBROKE, NC* */ ACCESSWIRE / May 12, 2023 / *For the quarter ended March 31, 2023, Lumbee Guaranty Bank ("Lumbee" or "Bank"), reported net income of $1,555,000, or earnings per share of $0.47, compared to net income of $1,057,000, or earnings per share of $0.32, for the same period in 2022. The primary causes of the increase in net income compared to prior periods were an increase in net interest income due to rising rates.

As of March 31, 2023, Lumbee reported assets of $489.5 million, an increase of 0.6% over assets of $486.4 million as of March 31, 2022. Loans increased 5.8% to $185.9 million, compared to loans of $175.7 million reported March 31, 2022. Investments rose to $239.6 million from $238.9 million at the year-ago date, an increase of 0.3%. Deposits grew to $440.7 million at March 31, 2023, an increase of 0.5% from March 31, 2022 deposits of $438.6 million. Capital levels remained strong, as shareholders' equity totaled $39.2 million, or 8.0% of assets at March 31, 2023, versus $38.8 million, or 8.0% of assets at the year-ago date.

Net interest income totaled $4.09 million in the first quarter of 2023, up 25.2% from $3.27 million in the year-ago quarter. The increase in net interest income was due to higher interest margins and growth of the Bank's loan portfolio. Noninterest income was down 4.7% to $584 thousand in 2023's first quarter from $613 thousand in the year-ago quarter, due to decreases in mortgage loan origination fees and other non-interest income. Noninterest expense was $2.83 million in the first quarter of 2023, up 1.7% from $2.78 million in the year-ago quarter.

Nonperforming assets ("NPAs") at March 31, 2023, (including nonaccruing loans, loans more than 90 days past due and still accruing, and OREO) were $1.6 million, or 0.32% of total assets, which was up 14.4% from $1.39 million, or 0.29% of total assets, at December 31, 2022, and down from $2.06 million, or 0.42% of total assets, at March 31, 2022. The allowance for loan losses was $1.71 million, or 0.92% of gross loans, at March 31, 2023, versus $1.96 million, or 1.12% of gross loans, at the year-ago date, with the difference primarily due to the adoption of the new CECL guidelines for determining allowance for credit losses.

"I am pleased with our first quarter financial performance" said Kyle R. Chavis, Chief Executive Officer of Lumbee. "Achieving loan growth, coupled with our improved net interest margin, boosted our earnings nicely. We have continued to be able to control non-interest expenses and hold loan losses to an exceptionally low level, both of which have also bolstered the bottom line." Chavis continued, "With the unrest experienced in the banking industry during the last few months, our commitment to operating in a conservative and safe manner has remained steadfast. Our core principles of strong liquidity, ample capital, and asset quality have served us well for over a half century. We will continue to monitor the changing economic conditions and interest rate environment and employ strategies to keep our bank safe and sound while delivering consistent returns for our shareholders."

Lumbee Guaranty Bank is a community bank headquartered in Pembroke, NC and serves Robeson, Cumberland, and Hoke Counties. Established in 1971, the Bank offers a full array of financial services through its network of fourteen strategically located branch offices over the three-county area. The Bank's common stock is traded on the OTC-QX under the stock symbol LUMB.

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The information as of and for the quarter ended March 31, 2023, as presented is unaudited. This news release contains forward-looking statements. Actual results may differ materially from those projected, for various reasons, including our ability to manage growth, our limited operating history, substantial changes in financial markets, regulatory changes, changes in interest rates, loss of deposits and loan demand to other savings and financial institutions, and changes in real estate values and the real estate market.

*CONTACT:*

Kyle R. Chavis, Chief Executive Officer
Lumbee Guaranty Bank
(910) 521-9707; kylechavis@lumbeeguarantybank.com; www.lumbeeguarantybank.com

*LUMBEE GUARANTY BANK*
*Balance Sheets (unaudited) March 31,* *2023* 2022

(Dollars in thousands)
*Assets*

Cash and due from banks
*$* *5,079* $ 6,031
Interest-earning deposits with banks
*32,611* 40,250
Total cash and cash equivalents
*37,690* 46,281
Net Investments
*239,622* 238,863
Loans receivable
*185,910* 175,725
Allowance for loan losses
*1,712* 1,964
Net loans receivable
*184,198* 173,761
Bank premises & equipment, net
*8,494* 8,420
Other assets
*19,479* 19,025

Total assets
*$* *489,483* $ 486,351


*Liabilities and Shareholders' Equity*

Deposits:

Demand deposits, Money market & NOW
*$* *311,364* $ 313,946
Savings
*44,284* 42,216
Time deposits
*85,077* 82,392
Total deposits
*440,725* 438,554
Securities Sold under Agreement to Repurchase
*5,748* 2,751
Other borrowed money
*39* 73
Accrued interest payable and other liabilities
*3,779* 6,184
Total liabilities
*450,291* 447,562
Total shareholders' equity
*39,192* 38,789
Total liabilities and shareholders' equity
*$* *489,483* $ 486,351


Book value per share
*$* *11.73* $ 11.59

*LUMBEE GUARANTY BANK*
*Statement of Operations (unaudited) Three Months Ended, March 31,* *2023* 2022

(Dollars in thousands, except per share data)

Interest Income
*4,407* 3,409
Interest Expense
*320* 144


Net Interest Income
*4,087* 3,265
Provision for loan losses
*24* -88


Net Interest Income after provision
*4,063* 3,353


Service charges on deposit accounts
*373* 371
Other
*211* 242
Total noninterest Income
*584* 613


Personnel costs
*1,633* 1,631
Occupancy and equipment
*343* 375
Data processing fees
*304* 297
Other
*550* 479
Total noninterest expense
*2,830* 2,782


Net Income before income taxes
*1,817* 1,184
Income taxes
*262* 127
*Net Income*
*1,555* 1,057


Net income per common share
*$* *0.47* $ 0.32

*SOURCE: *Lumbee Guaranty Bank
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