QUARTERLY FINANCIAL RESULTS
LEXICON BANCORP REPORTS CONSOLIDATED FINANCIAL RESULTS FOR THE FIRST QUARTER OF 2024
First Quarter 2024 Highlights
Net income for the first quarter of 2024 was $386 thousand compared to $175 thousand for the first quarter of 2023, up 120.6%.
Core loans, net of fees, grew to $157.0 million on March 31, 2024, compared to $133.6 million on March 31, 2023, up 17.6%.
Deposits were $231.2 million on March 31, 2024, compared to $239.0 million on March 31, 2023, with non-interest bearing deposits increasing to 44% of total deposits compared to 37% a year ago.
Lexicon Bancorp (“Bancorp”), the parent company for Lexicon Bank (“Bank”) (collectively, “the Company” or “Lexicon”), announces unaudited consolidated results for the first quarter of 2024. Lexicon continues to focus on personalized concierge banking services for clients, which is reflected in the growth in core loans and stability in deposits while producing solid operating results.
“Lexicon remains committed to serving our clients and communities throughout Southern Nevada by building long-term mutually beneficial relationships through providing proactive financial services,” said Stacy Watkins, President and CEO of Lexicon. “We continue providing loans to our clients across Southern Nevada to support their growth and strategic goals while building a diversified deposit base backed by a safe and sound balance sheet. We are also committed to delivering sound operating results for our shareholders.”
For the first quarter of 2024, net income was $386 thousand compared to $175 thousand for the first quarter of 2023. The increase was driven by higher net interest income of $234 thousand from continued balance sheet growth, and higher non-interest income of $70 thousand. This was offset by increased provisions for credit losses of $7 thousand and a 3.2% increase in operating non-interest expenses of $60 thousand.
Lexicon’s return on average assets and return on average equity improved to 0.59% and 5.88%, respectively, moving us closer to our strategic goal of 1% and 10%, respectively.
Core loans, net of fees, grew to $157.0 million as of March 31, 2024, reflecting growth of $23.5 million from the first quarter of last year, and demonstrating our support for the businesses building and investing in the Southern Nevada community. The core loan portfolio continues to perform well, remaining healthy and strong with no delinquencies. The average interest rate on the core loan portfolio was 6.27% for the first quarter of 2024, compared to 5.41% in the first quarter of 2023, reflecting the current higher interest rate environment. The allowance for credit losses to total core loans was 1.51% on March 31, 2024, compared to 1.27% on March 31, 2023, reflecting the overall forecasts of the economic environment utilized in the calculations.
PPP loans, net of fees, decreased to $8.6 million during the quarter. During the first quarter of 2024, we experienced a charge-off of $229,000 related to the PPP loan portfolio.
Total deposits were $231.2 million on March 31, 2024, with non-interest bearing deposits improving to 44% of total deposits from 37% a year ago. The average cost of deposits for the quarter increased to 1.79% compared to 1.01% in the same quarter a year ago reflective of the overall higher interest rate environment. We continue to remain focused on building relationships, many of which are deposit focused, as well as utilizing third parties to expand FDIC deposit insurance coverage for larger relationships when desired.
Our core loan-to-deposit ratio increased to 68% on March 31, 2024, from 56% on March 31, 2023. We continue to leverage our deposit base through the origination of core loans as we move the ratio closer to 80% over time to serve the needs of businesses in Southern Nevada.
We held cash and cash equivalents of $69.1 million, or 30% of total deposits, on March 31, 2024. Additionally, we have combined unused lines of credit and unpledged securities totaling $97.5 million, or 42.2% of total deposits on March 31, 2024. The combined cash and cash equivalents and unused lines of credit represent 72% of total deposits. This combination of liquid assets and available resources provides a strong liquidity position for Lexicon.
Total shareholders’ equity was $26.3 million on March 31, 2024, compared to $25.1 million on March 31, 2023, driven by earnings offset by a net increase in the net unrealized losses on available for sale (“AFS”) securities which totaled $2.6 million on March 31, 2024, compared to $2.4 million a year ago. Lexicon’s community bank leverage ratio (“CBLR”) was 10.9% with Tier I capital of $28.9 million on March 31, 2024, above the 9% level required to be considered a well-capitalized bank by its primary regulator.
As of March 31, 2024, Lexicon’s consolidated total assets totaled $269.1 million, up slightly from $267.7 million on March 31, 2023.
Upon the formation of Lexicon Bancorp as the holding company for Lexicon Bank in July 2023, all information herein reflects consolidated financial information for Lexicon Bancorp, including Lexicon Bank (therefore, certain information may not match the standalone financial information for Lexicon Bank).
Accordingly, presented below is a summary of the Quarterly Consolidated Selected Financial Data as of and for the quarterly periods indicated:
ABOUT LEXICON BANCORP
Lexicon Bancorp was established in July 2023 to become the bank holding company for Lexicon Bank. Founded in 2019, Lexicon Bank is Southern Nevada's community-focused banking partner. Lexicon provides personal, comprehensive banking services to business and individual banking clients, emphasizing creating and nurturing long-term relationships. By providing personalized services to all clients, Lexicon helps to foster Southern Nevada's economy and community—ultimately helping to grow and develop the region's local businesses. The Bank is redefining banking as it should be in Southern Nevada by creating a concierge-like experience for businesses, regardless of size. Lexicon Bank is located in Tivoli Village at 330 S. Rampart Blvd., Suite 150. The Bank is open from 9 A.M. to 5 P.M. Monday through Friday and 10 A.M. to 2 P.M. on Saturdays. Clients can contact us by phone at (702) 780-7700 or online at lexiconbank.com. Follow us on Facebook, Instagram, LinkedIn, and Twitter @lexiconbank. Lexicon Bank is a member of the FDIC.
This press release includes “forward-looking statements,” as such term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on the current beliefs of the Company’s Board and executive officers (collectively, “Management”), as well as assumptions made by and information currently available to the Company’s Management. All statements regarding the Company’s business strategy and plans and objectives of Management of the Company for future operations are forward-looking statements. When used in this press release, the words “anticipate,” “believe,” “estimate,” “expect” and “intend” and words or phrases of similar meaning, as they relate to the Company or the Company’s Management, are intended to identify forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Important factors that could cause actual results to differ materially from the Bank’s expectations (“cautionary statements”) are the effects of the COVID-19 pandemic and related government actions on the Company and its clients, loan losses, changes in interest rates, loss of key personnel, lower lending limits and capital than competitors, regulatory restrictions and oversight of the Company, the secure and effective implementation of technology, risks related to the local and national economy, the Company's implementation of its business plans and management of growth, loan performance, interest rates, and regulatory matters, the effects of trade, monetary and fiscal policies, inflation, the effects of natural disasters, and changes in accounting policies and practices. Based upon changing conditions, if any one or more of these risks or uncertainties materialize, or if any underlying assumptions prove incorrect, actual results may vary materially from those described as anticipated, believed, estimated, expected, or intended. The Bank does not intend to update these forward-looking statements.
