Luther Burbank Corporation (NASDAQ:LBC) Q2 2020 Earnings Conference Call - Final Transcript

Jul 29, 2020 • 11:00 am ET


Luther Burbank Corporation (NASDAQ:LBC) Q2 2020 Earnings Conference Call - Final Transcript


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Good morning, and welcome to the Luther Burbank Corporation Second Quarter 2020 Earnings Financial Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity for the three analysts covering Luther Burbank Corporation to ask questions. [Operator Instructions]

Before we begin, I would like to remind everyone that some of the comments made during this call may be considered forward-looking statements. The Company's Form 10-K for the 2019 fiscal year, its quarterly reports on Form 10-Q and current reports on Form 8-K identify certain factors that could cause the Company's actual results to differ materially from those projected in any forward-looking statements made this morning. The Company does not undertake to update any forward-looking statements as a result of new information or future events or developments. The Company's periodic reports are available on the Company -- from the Company or on the Company's website or the SEC's website.

I would like to remind you that while the Company's management thinks the Company's prospects for performance are good, it is the Company's policy not to establish with the markets any earnings, margin or balance sheet guidance.

I would now like to turn the conference over to Simone Lagomarsino, President and CEO. Please go ahead.

Simone Lagomarsino

Thank you very much, and good morning, everybody. Welcome to the Luther Burbank Corporation second quarter 2020 earnings conference call. This is Simone Lagomarsino. I'm the President and Chief Executive Officer, and with me today are Laura Tarantino, our Chief Financial Officer; and John Cardamone, our Chief Credit Officer.

Before discussing our second quarter results, I would like to recognize the dedication of our bank employees as we continue to navigate through the ongoing COVID-19 pandemic. Our employees have been working to keep each other and our customers safe and healthy, while continuing to provide uninterrupted outstanding service to our customers. We pride ourselves in being a bank, where depositors can place their funds in a safe and reliable deposit account, earning competitive returns, and where loan customers understand that we are a trusted lender, willing to facilitate temporary accommodations or expedite loan fundings as needed based on their individual circumstances. Our flexibility and outstanding service speak to the bank's culture, especially during this time of crisis, and I am proud to be associated with this team of remarkable employees.

Now let's turn to our second quarter results. Our net income for the second quarter was $9.3 million, or $0.18 per diluted common share, an improvement as compared to the linked quarter net earnings of $7.6 million, or $0.14 per diluted common share. The $1.7 million increase in net earnings was largely attributable to a $1 million expansion in our net interest income as well as a $1.5 million reduction in non-interest expense. These pre-tax amounts were partially offset by a corresponding $725,000 increase in income tax expense.

During the second quarter, our net interest margin grew to 1.88% from the prior quarter level of 1.84%. The improvements in our