QUARTERLY FINANCIAL RESULTS
LEXICON BANCORP REPORTS CONSOLIDATED FINANCIAL RESULTS FOR THE THIRD QUARTER OF 2023 AND YEAR-TO-DATE
Third Quarter 2023 Highlights
- Completed the formation of Lexicon Bancorp as the sole shareholder for Lexicon Bank.
- Lexicon Bancorp completed an investment in PartnersHoldings LLC and its operating entity, IconTrust, LLC, a trustee services firm based in Las Vegas, NV.
- Core loans, net of fees, grew to $145.8 million on September 30, 2023, an increase of $3.1 million, or 2.2%, from the prior quarter.
- Deposits grew to $221.6 million on September 30, 2023, an increase of $21.9 million, or 10.9%, from the prior quarter through the addition of 236 new accounts contributing $25 million in new deposits.
- Net income after taxes for the third quarter was $96 thousand and $728 thousand year-to-date, reflecting an increase of $567 thousand over the prior year.
Lexicon Bancorp (“Bancorp,” the parent company for Lexicon Bank (“Bank,” and “Lexicon” collectively), announces unaudited results for the quarter ending September 30, 2023. The Bank continues to focus on personalized services for clients, which is reflected in the solid growth of our core loans and deposits and the continued strategic repositioning and diversification of our deposit base.
Core loans, net of fees, grew to $145.8 million as of September 30, 2023, reflecting year-to-date growth of $23.0 million. The loan portfolio had zero delinquencies and one charge-off totaling $99 thousand during the quarter. The portfolio remains healthy and strong. PPP loans, net of fees, decreased by $2.0 million for the quarter to $10.2 million. The weighted average interest rate on the core loan portfolio increased from 5.18% on December 31, 2022, to 5.54% on September 30, 2023, reflecting the current interest rate environment.
Total deposits grew by $21.9 million in the third quarter to $221.6 million. We held cash and cash equivalents of $55.8 million on September 30, 2023, compared to $35.4 million on June 30, 2023. The average cost of deposits for the quarter increased to 1.61% compared to 0.98% in the prior quarter, primarily due to increases in overall interest rates and changes in the mix of deposit accounts.
Our core loan-to-deposit ratio increased to 65.8% on September 30, 2023 from 54.8% on December 31, 2022. We are focused on achieving a ratio closer to the desired range of 70% to 80%, to allow liquidity and capital to be more effectively utilized.
Total equity was $24.9 million, decreasing by $327 thousand during the third quarter of 2023. This was primarily due to net income after taxes of $96 thousand offset by a $368 thousand increase in the unrealized losses on securities, net of taxes.
For the third quarter of 2023, net income after taxes was $96 thousand compared to $456 thousand for the second quarter of 2023. The decrease was primarily attributable to lower net interest income due to the impact of higher interest expense on deposits and higher noninterest expenses due to higher provisions for unfunded loan commitments and the costs related to the formation of Bancorp. Net income after taxes for the nine months ended September 30, 2023 and 2022 were $728 thousand and $161 thousand, respectively. The large increase was due to continued balance sheet growth driving net interest income higher, partially offset by lower income from PPP loans.
As of September 30, 2023, the Bank’s assets totaled $250.7 million, an increase of $20.4 million from total assets of $230.2 million on June 30, 2023.
Upon formation of Lexicon Bancorp as the holding company for Lexicon Bank, 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 Consolidated Financial Results for the periods indicated:
“Lexicon remains committed to serving our clients and communities throughout Southern Nevada by building long-term mutually beneficial relationships,” said Stacy Watkins, President and CEO of Lexicon. “We continue providing loans to our clients to support their growth and strategic needs while building a diversified deposit base backed by a safe and sound balance sheet. Our liquidity and capital positions remain strong to support continued growth. Lexicon is extremely excited about our partnership with IconTrust and the extended services we can offer to our clients.”
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 Bank’s Board and executive officers (collectively, “Management”), as well as assumptions made by and information currently available to the Bank’s Management. All statements regarding the Bank’s business strategy and plans and objectives of Management of the Bank 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 Bank or the Bank’s Management, are intended to identify forward-looking statements. Although the Bank 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 Bank 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 Bank, the secure and effective implementation of technology, risks related to the local and national economy, the Bank'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.