2022 Financial Summary
Dear Shareholders, Clients, Neighbors & Friends,
2022 was Lakeside Bank’s 56th anniversary. It was a challenging year for the US economy, the stock market and the banking industry. Inflation was the highest it’s been in 40 years. The Fed raised interest rates seven times. The stock market had a dismal year. In the banking world, branch closures continued as large banks reduced expenses … and their ability to serve clients. Then, in the first quarter of 2023, the forced closures of Silicon Valley Bank, Signature Bank and First Republic impacted all banks, especially regional competitors.
The demanding times reaffirmed the uniqueness of Lakeside Bank. As we have throughout our history, we managed headwinds well, with our balanced portfolio and relationship-driven philosophy setting us apart from competition. In an age of reduced customer service, we continued to prove that business and retail clients want and need personal service. Of course, we offer gold standard electronic banking capabilities. But 2022 confirmed again there is no substitute for the benefit of having your own Lakeside professional. Our difference will assure Lakeside’s continued growth trajectory. Competitors cannot match Lakeside personal service or emphasis on long-term relationships.
In immediate affirmation of the power of Lakeside differentiation, our number of new accounts jumped by 237% in the first quarter of 2023!
As a reflection of growing demand for Lakeside services, we opened a new, larger, Operations Center early 2023.
Key Indicators for 2022
Net operating earnings of $50.2 million represents a 2.11 return on average assets and a 22.21 return on equity. The year ended with $2.3 billion in total assets. This includes $1.8 billion in total loans. Stockholder equity grew from $234.1 million to $239.8 million. As always, our capital ratio remains significantly above “well capitalized” levels. In fact, our Tier 1 Leverage Capital Ratio closed 2022 at 11.75%, more than twice the regulatory capital requirement, and 17.5% superior to our immediate peer group. Our conservative fiscal management for over half a century has kept the Lakeside ship steady through every challenge.
Notable 2022 Achievements Loan portfolio growth was 9.4% in 2022. This is certainly favorable given the environment. Importantly, Lakeside loans are not in struggling industry segments like office buildings.
Treasury Management had the most product implementations and new client onboardings in Lakeside history, reiterating our commitment to provide small businesses and commercial clients with streamlined, powerful and advantageous banking tools.
We also added a new Account Analysis software providing enhanced analytics and operations, offering clients a more transparent and practical experience. TM is also hard at work on new payment software allowing both business and retail customers to send and receive funds instantaneously, at any time of any day. The Real Time Payments and FedNow instant payment technologies will come on stream through 2023 and 2024.
The Residential Mortgage Department reported lower volume versus 2021, as did the entire industry. Fortunately, as interest rates rose at a rapid pace, our team found new ways to both generate business and grow our industry leading personal service. We added incentives for first time home buyers, teachers and first responders. We also increased our Home Equity and Portfolio Loan production. Despite higher interest rates, we’re confident in increased market share in 2023. 2022
Marketing succeeded in maintaining our brand and advertising awareness with consumers. We remain the only bank with a positive “Net Promoter Score,” meaning our clients recommend us. We will capitalize on how strongly our clients feel about us with unique endorsement stories in 2023. Our NPS score increased among business clients. We have increased support to key targets and business segments in 2023.
Mark Twain said, “Tough times teach trust.” Through a difficult year, we saw trust multiply among Lakesiders and with our clients. I’m proud of how our departmental teams worked individually and together to continue building the Lakeside brand and business. And I’m thankful every day for the people and businesses that call Lakeside their trusted advisor … and their banking home. As more and more Chicagoans experience the Lakeside difference, that trust will grow. Although I suspect we’d all be very pleased to leave the “tough times” part of the equation behind!
Sincerely,

Philip D. Cacciatore
Chairman & Chief Executive Officer
Lakeside Since 1999