2021 ANNUAL REPORT
Financial Highlights
($ in thousands except per share amounts)
At Period End
Total assets
2021
$ 433,529
Securities 55,478
Loans, net of allowance for loan losses 290,851
Deposits 373,520
Shareholders' equity 56,945
Average Balances
Total assets 438,497
Securities 42,370
Loans, net of allowance for loan losses 316,857
Deposits 370,115
Shareholders' equity 55,454
Summary of Operating Results
Interest income 17,157
Interest expense 915
Net interest income 16,242
Provision for loan losses 480
Non-interest income 2,573
Non-interest expense 11,916
Net income 5,212
Per Total Shares Outstanding
Net income (basic earnings per share) 5.81
Cash dividends paid 1.50
Book value 63.05
Selected Ratios
Return on average assets 1.19%
Return on average shareholders' equity 9.40%
Net interest margin 3.94%
Dividend payout 25.89%
Other Data
Number of full-time equivalent employees Number of shareholders
2020
$
398,432
44,259
307,764
322,705
53,345
391,202
38,203
291,064
313,738
51,491
16,368
1,948
14,420
1,250
3,021
10,813
4,316
4.84 1.20 59.41
1.10% 8.38% 3.94% 24.84%
72 74
384 379
Percent Change
8.8%
25.3%
-5.5%
15.7%
6.7%
12.1%
10.9%
8.9%
18.0%
7.7%
4.8%
-53.0%
12.6%
-61.6%
-14.8%
10.2%
20.8% 20.0% 20.8% 6.1%
PRESIDENT'S LETTER
FROM THE DESK OF RON ZIMMERLY, JR.
Dear Shareholders and Friends:
The Journey Continues is the theme of our 2021 Annual Report and I think we can all agree that we have all been on quite a journey since March of 2020. Entering 2021 there was optimism that there would be a journey toward normalcy. Ohioans began receiving vaccinations in late December and the number of COVID-19 cases were drastically reduced by late spring. Confidence returned to individuals and businesses and COVID-19 restrictions were removed by Governor DeWine in early June. Gross Domestic Product (GDP) resumed growing, unemployment claims fell, and Americans were again taking vacations and spending money.
The national and local economies, banking industry, and Liberty National Bank all benefited from fiscal and monetary stimulus in 2021. The combination of direct payments to individuals and municipalities, extension of unemployment and expansion of childcare benefits, relief to small businesses in the form of Small Business Administration PPP loans, and a low interest rate policy from the Federal Reserve resulted in significant growth in the economy in the second half of 2021. The increased confidence of consumers and businesses resulted in the economy making the journey from stagnation to prosperity. Gross Domestic Product increased 5.7% and 6.0% in the 3rd and 4th quarters, respectively.
The combination of pent-up demand and economic stimulus also resulted in unintended consequences. Strong demand for goods, materials, and services placed significant strain on our nation's supply chain. Lumber, steel, and energy prices soared, and food prices were higher. New and used car availability was limited and new cars were selling at or above MSRP. Demand for housing was strong and the limited inventory of housing translated to multiple offers for houses above the listed asking price. Christmas sales soared 8.5% and many online purchases could not be delivered by Christmas. Inflation was benign at the beginning of the year and the 4% inflation rate by mid-summer was initially viewed by economists as transitory. The inflation rate stubbornly remained above 4% for the second half of the year and by December the inflation rate stood at 7%. The Federal Reserve Bank indicated that they will be ending their low interest rate policy and pundits are predicting multiple interest rate increases for 2022. The Journey Continues indeed!
2 LIBERTY BANCSHARES, INC.
2021 ANNUAL REPORT
Our 2021 results demonstrate the success of our story. We had record mortgage volume and deposit growth. Our net interest margin remained strong. Our delinquencies and our
charge-offs were at historic lows.
Throughout our 128-year journey, Liberty National Bank has built its reputation on being there for our customers and communities in the most critical times. This continues to be our driving philosophy. In 2021, we reopened our lobbies to customers and kept them open. We resumed attending and hosting community events and county fairs. We made donations and invested in our communities. We wore masks and worked from home to keep our customers, employees, and communities safe. We continued to make SBA PPP loans to assist businesses. We improved our digital banking capabilities and expanded our treasury management services to meet the electronic banking needs of businesses and consumers. We were there for our customers and communities!
Our 2021 results demonstrate the success of our story. We had record mortgage volume and deposit growth. Our net interest margin remained strong. Our delinquencies and charge-offs were at historic lows. The financial results were characterized by the following:
• Increased and record earnings
• Solid Return on Average Assets (ROAA)
• Solid Loan/Deposit Ratio
• Low Efficiency Ratio
• Solid asset expansion
• Strong capital position
Net income for 2021 was $5.21 million, compared to $4.32 million in 2020, a 20.8% increase. We ended the year with $290.9 million in total loans and $373.5 million in total deposits compared to $307.8 million in loans and $322.7 million in deposits at the end of 2020. Included
2021 ANNUAL REPORT
in December 31, 2021 loan totals are $777,000 of Small Business Administration (SBA) Paycheck Protection Program (PPP) loans compared to $19.4 million at December 31, 2020. Shareholders' equity was $56.9 million compared to $53.3 million as of December 31, 2021 and 2020 respectively.
As was the case in 2021, we enter 2022 in a position of strength. We continue to have capital strength and are considered well capitalized by our regulators. Profitability is strong. Conservative underwriting practices have resulted in historically low delinquencies in our loan portfolio. Growth is strong. We continue to invest in our people, technology, and communities. Strategic opportunities continue to remain a top priority to provide additional growth, new market acquisition, enhanced product offerings and increased shareholder value.
We will continue to face challenges and 2022 will be no different. We will likely see higher interest rates (and as a result, lower mortgage volumes), interest and fees from PPP loans will diminish as the remaining PPP loans are forgiven, and high liquidity levels on our balance sheet will pressure our net interest margin. COVID variants continue to evolve and at the time of this writing COVID cases are again rapidly falling. As we have in the past, we will face and overcome these and other challenges!
I, on behalf of the entire Senior Management Team, would like to personally express our sincere thanks to our employees and the Board of Directors for their continued support and efforts during these evolving times, and to you, our Shareholders, for your continuing loyalty and faith in us.
The Journey Continues!
SINCERELY,
Ronald L. Zimmerly, Jr.
PRESIDENT & CEO
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Liberty Bancshares Inc. published this content on 25 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 April 2022 20:39:30 UTC.