Financials
Below you will find a quick summary of noteworthy financial highlights that may assist in understanding the detailed financial statements and supporting graphs.
Summary
We are currently engaged in growth mode as a management team, and with that has come expenses related to the addition of new products and their subsequent distribution and administration. All these activities are centered around growing the total asset valuation of the association, and as you’ll see, that trend is going up.
Financial Highlights
LCBA’s surplus decreased by $1.5M in 2023, while recognizing a net loss of $1M and a decrease in Risk-Based Capital ratio from 913% to 785%. These overall financial results reflect LCBA’s internal projections and are a result of the expenses and reserving resulting from growth initiatives, and the issuance of new business. We recognize the significance of these investments and expect similar trends to continue into the immediate future. The planned long-term results will be increasing assets, and long-term premium income which will contribute to the rebuilding of surplus.
Overall portfolio investment quality remains high, with an average rating of “A” and 99% of bonds are investment grade. LCBA’s bond portfolio grew by $6 million from 2022. The ending book yield for 2023 is up 4 basis points from 2022. LCBA continues to work directly with its investment advisors to maintain stable investment income while structuring cash flows that are sufficient to meet the needs of the organization regardless of interest rate fluctuations, while also managing an appropriate risk/return tradeoff.
General expenses overall are up 13% from the prior year, while remaining under budget by 15%. Overall, total operating expenses are expected to increase gradually as we reinvest in the future of the association. This year was the start of implementing a long-term strategic plan which includes investing in future financial product offerings and the team needed bring them to market while correspondingly increasing our service capabilities to best serve our members.
2023 ANNUAL FINANCIAL REPORT
STATEMENT OF FINANCIAL POSITION
As of December 31,
| Assets | 2023 | 2022 |
|---|---|---|
| Bonds | $112,231,623 | $106,244,024 |
| Mortgage Loans | $500,000 | $500,000 |
| Real Estate | $1,435,590 | $1,468,675 |
| Certificate Loans | $889,057 | $946,842 |
| Cash & Cash Equivalents | $2,797,381 | $3,280,212 |
| EDP Equipment | $13,487 | $18,883 |
| Income Due & accrued | $2,680,992 | $2,311,585 |
| Total Assets | $120,548,130 | $114,770,221 |
| Liabilities & Surplus | 2023 | 2022 |
| Certificate Reserves | $96,928,727 | $89,272,521 |
| Deposit-Type Contracts | $5,859,864 | $5,910,361 |
| Certificate Claims | $649,609 | $488,547 |
| Provision for Dividends | $441,095 | $369,951 |
| Advance Premiums | $199,068 | $199,741 |
| Investment Reserves | $6,319,711 | $6,907,493 |
| Accrued General Expenses | $299,491 | $264,444< |
| Other Liabilities | $675,667 | $695,653 |
| Unassigned Funds | $9,174,898 | $10,661,510 |
| Total Liabilities & Surplus | $120,548,130 | $114,770,221 |
SUMMARY OF OPERATIONS
Through December 31,
| Income | 2023 | 2022 |
|---|---|---|
| Life insurance premiums | $9,908,894 | $10,010,410 |
| Annuity premiums | $6,099,914 | $5,566,999 |
| Accident & health premiums | $101,421 | $112,095 |
| Net investment income | $5,139,172 | $4,831,754 |
| Other income | $1,309,079 | $1,498,301 |
| Total Income | $22,558,480 | $22,019,559 |
| Member Benefits | 2023 | 2022 |
| Death benefits | $4,306,643 | $3,923,153 |
| Life & annuity benefits | $5,934,114 | $5,264,985 |
| Reserve changes | $7,656,206 | $7,307,186 |
| Total Member Benefits | $17,896,963 | $16,495,324 |
| Operating Expenses | 2023 | 2022 |
| Commissions | $1,217,449 | $1,409,006 |
| General expenses | $ 3,895,859 | $3,445,283 |
| Taxes & other | $169,171 | $154,752 |
| Total Operating Expenses | $5,282,479 | $5,009,041 |
| Total Benefits & Expenses | $23,179,442 | $21,504,365 |
| Net Gain from Operations | $(620,962) | $515,194 |
| Dividends incurred | $(434,475) | $(352,301) |
| Net Income | $(1,055,437) | $162,893 |
| Other Changes in Surplus | $(431,175) | $(262,657) |
| Net Change in Surplus | $(1,486,612) | $(99,764) |
