Ledyard Financial Group, Inc. (ticker symbol LFGP), the holding company for Ledyard National Bank, is proud to announce record earnings for the second quarter of 2022. This is the tenth consecutive quarter of record earnings and while uncertainty continues in the economy, these results are evidence of the strength of our core businesses and financial condition. Despite the economic uncertainty, our attention remains on strengthening our financial position and continuing to execute on our strategic initiatives.

Net income for the quarter ended June 30, 2022, was $2,073,185 or $0.64 per share compared to $1,957,272 or $0.61 per share for the same period in 2021, an increase of $115,913 or 5.9%. Net income for the six months ended June 30, 2022, was $4,117,738 or $1.27 per share compared to $3,793,143 or $1.18 per share for the same period in 2021, an increase of $324,595 or 8.6%. The underlying results for the Company were extremely positive. The Company is well positioned to navigate any difficulties that we may encounter in the future, and we remain focused on supporting our core businesses. The decline in the equity markets during 2022 coupled with the decrease in loans primarily due to the payoff of CARES act loans did affect our second quarter results.

Total revenue for the quarter ended June 30, 2022, was $8,227,579 compared to $8,390,562 for the same period in 2021, for a decrease of $162,983 or 1.9%. Total revenue for the six months ended June 30, 2022, was $16,912,220 compared to $16,649,545 for the same period in 2021, for an increase of $262,675 or 1.6%. Net interest income for the quarter ended June 30, 2022, was $4,565,230 compared to $4,624,242 for the same period in 2021, for a decrease of $59,012 or 1.3%. Net interest income for the six months ended June 30, 2022, was $9,259,259 compared to $9,069,515 for the same period in 2021, for an increase of $189,744 or 2.1%. The quarter-to-date decline was due to the increase in CARES act loans paying off in the prior year’s quarter which accelerated earnings. The increase in our net interest income on a year-to-date basis was due primarily to an increase in investments and interest-bearing deposits and our ability to manage the cost of our deposits and borrowings. Overall our spread has improved compared to the prior year. The improvement in spread has mostly offset the decline in income from loan balances.

Ledyard Financial Advisors, a division of Ledyard National Bank, reported revenue for the quarter ended June 30, 2022, of $3,267,509 compared to $3,305,576 for the same period in 2021, a decrease of $38,067 or 1.2%. Revenue for the six months ended June 30, 2022 was $6,636,209 compared to $6,385,831 for the same period in 2021, an increase of $250,378 or 3.9%. Assets under management and custody at Ledyard Financial Advisors totaled approximately $1.68 billion as of June 30, 2022, which is a $199 million decrease compared to June 30, 2021. Since the end of 2021, the equity markets are down, and interest rates are up. These trends have contributed to a decline in AUM since the end of 2021 of $294 million. Without a recovery in the equity markets this will continue to have a negative impact on revenue from assets under management.

Non-interest expense for the quarter ended June 30, 2022, was $5,979,715 compared to $6,106,181 for the same period in 2021, a decrease of $126,466 or 2.1%. Non-interest expense for the six months ended June 30, 2022, was $12,464,124 compared to $12,354,453 for the same period in 2021, an increase of $109,671 or less than 1%.

At June 30, 2022, the Company’s shareholders’ equity stood at $47.2 million compared to $70.8 million for the same period in 2021. The decrease in shareholders’ equity is due to the decline in Other Comprehensive Income, which was in an unrealized loss position of $20.2 million at June 30, 2022, contrasted with an unrealized gain position of $9.5 million at June 30, 2021. The change in this account was directly related to the change in values on securities and derivative contracts due to changes in interest rates. The value in this account is excluded when calculating our regulatory capital ratios. All of the Company’s capital ratios are well in excess of the amount required by the Federal Reserve for a bank holding company to be considered “well capitalized” and the Company has significant levels of liquidity resources available to support operations during these unusual times. At June 30, 2022, the Company’s book value per share excluding Other Comprehensive Income stood at $20.07 compared to $18.26 for the same period in 2021.

Loans, net of the allowance for loan losses at June 30, 2022, were $347.5 million compared to $354.4 million for the same period last year, for a decrease of $6.9 million or 1.9%. The decline in loans relates primarily to the CARES Act loans forgiven and to other loans that prepaid early. Total deposits at June 30, 2022, were $566.4 million compared to $624.2 million, a decrease of $57.8 million or 9.3% from the same period last year. Included in the deposit balance fluctuation is $70 million in brokered deposits that were moved into the wholesale funding market as a more affordable cost of funding. Total assets of the Company were $733.8 million at June 30, 2022, an increase of $19.3 million over the prior year. The growth in total assets was due to investments purchased during 2021.

No funds were added to the Allowance during 2022. The total Allowance was $7.47 million at June 30, 2022, compared to $8.04 million for the prior year. Total non-performing assets were $2.6 million at June 30, 2022, compared to $1.2 million for the same period in 2021.

The Company is pleased to announce that Bruce P. King was elected as the new Chair of the Board of Directors of Ledyard Financial Group, Inc. Mr. King has served on the Ledyard board since 2014 and has served as Co-Vice Chair of the Board since 2019 and is replacing Margaret Rightmire, who will continue to serve as a Board member.

The Company is also pleased to be ranked among the Top 200 publicly traded banks and thrifts under $2 billion in assets in the United States by American Banker Magazine for the eighth consecutive year.

Ledyard Financial Group, Inc., headquartered in Hanover, New Hampshire, is the holding company for Ledyard National Bank. Ledyard National Bank, founded in 1991, is a full-service community bank offering a broad range of banking, investment, and wealth management services. Stock activity information can be found in the “Investor Relations” section of our website, which includes a wealth of other information that Ledyard shareholders and prospective shareholders may find of interest.

Ledyard Financial Group, Inc. shares can be bought and sold through the NASD sanctioned “OTC Markets” under the trading symbol LFGP. Shares may be traded through an individual’s broker. For more information, please refer to the “Investor Relations” section of the bank’s website at www.ledyardbank.com or contact the Company’s Chief Financial Officer, Gregory D. Steverson.

SENSITIVITY TO MARKET RISKS

Source: Internal asset liability management reports for the second quarter of 2022.

Forward-Looking Statements: Statements concerning future performance, developments or events, expectations for growth and income forecasts, and any other guidance on future periods constitute forward-looking statements that are subject to a number of risks and uncertainties. Actual results may differ materially from stated expectations. Specific factors include, but are not limited to, loan production, competitive pressure in the banking industry, balance sheet management, net interest margin variations, the effect of changes in equity prices on assets under management, the ability to control costs and expenses, changes in the interest rate environment, financial policies of the United States government, and general economic conditions. The Company disclaims any obligation to update any such factors.

Note: Certain reclassifications have been made to the prior period information to conform to the current period presentation.

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