Luther Burbank Savings profits in Santa Rosa’s second quarter fall nearly 2% from first quarter

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Luther Burbank Corp. (Nasdaq: LBC), the parent company of Luther Burbank Savings, on Wednesday reported net income of $22.56 million in the second quarter, a performance slightly lower than the previous quarter but up 6% from the previous quarter. ‘last year.

The Santa Rosa-based bank posted a profit of $22.94 million for the three months ended March 31. The second quarter ending June 30 represents a decline of more than 1.5% compared to the first quarter of the year.

On a year-over-year basis, second-quarter earnings topped $21.21 million in mid-2021.

Net profit for the first half of the year was $45.5 million, surpassing $39.62 million for this period in 2021.

“We believe our strong capital position will support our future growth and provide some protection against the next potential economic downturn,” Chief Financial Officer Brad Satenberg told The Business Journal.

The mixed bag from quarter to quarter marks the ebbs and flows of an economy absorbing the effects imposed on most businesses by a host of challenges – a pandemic, inflationary pressures and high interest rates. The latter is important to Luther Burbank, given that his portfolio is filled with loans on multifamily properties.

Still, a key upside, Chairman and CEO Simone Lagomarsino said on a conference call with investors Wednesday, is strong demand for real estate.

“We’re running out of affordable housing…in our area,” Lagomarsino said in response to a question on the call. “We are also seeing a double-digit increase in rental rates.”

Bank officials pointed to robust lending activity and solid credit quality as other reasons the bank is holding strong and thriving in this economy.

Total loans totaled $6.63 billion, compared to $6.36 billion for the previous quarter ending March 31. The value also topped $6.44 billion on the books in a year-over-year comparison with the second quarter of 2021.

Net interest income – which excludes provisions for loan losses – for the second quarter was $47.47 million, up from $45 million in the prior quarter. Net interest income takes into account the difference between income generated by interest-bearing assets and liability management costs.

Non-interest income was $362,000 for the second quarter of 2022. The amount eclipses the $58,000 for the prior quarter, but is lower than the $510,000 for the three months ending June 30, 2021.

Another financial barometer, deposits – which surged during the pandemic – totaled $5.66 billion for the three months ended June 30. This figure exceeded the $5.6 billion of the last quarter.

Overall, bank officials said they were satisfied with the performance.

“I am proud to report our second quarter earnings, which reflect our commitment to our strategic plan focused on organic growth and quality earnings,” Lagomarsino said in a statement.

The bank’s board declared a cash dividend of 12 cents per common share, payable August 15.

With assets totaling $7.53 billion, Luther Burbank Savings operates 10 branches in northern and southern California, one branch in Washington, and seven loan offices located throughout the West, including Oregon.

Susan Wood covers law, cannabis, manufacturing, technology, energy, transportation, agriculture, and banking and finance. For 27 years, Susan worked for various publications, including the North County Times, Tahoe Daily Tribune and Lake Tahoe News. Contact her at 530-545-8662 or [email protected]

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