INSBANK Parent, InsCorp, Inc., Reports Quarterly Earnings

Deposit Growth Follows PPP Loans to New Clients

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Aug 13, 2020, 08:41 ET

NASHVILLE, Tenn., Aug. 12, 2020 /PRNewswire/ -- InsCorp, Inc., parent company of INSBANK (OTCQX: IBTN), today reported 2^nd quarter earnings of $548,000, or $0.19 per share. Quarterly earnings for the Nashville-based lender were down $420,000, or $0.14 per share, versus those of the same period the prior year. Contributing to this decline, the bank added $800,000 to its provision for loan loss reserves during the quarter, compared to $175,000 in the same period the prior year. In addition to the reserve expense, a decline in net interest margin contributed to reduced operating earnings. Year-to-date earnings totaled $1,281,000, or $0.44 per share.

"While the latter part of the quarter saw some affected business clients resume operations, other industries remain muted while the pandemic prolongs," said Jim Rieniets, President & CEO of INSBANK. "Until such time as there is clarity around the virus, the duration of its impact on the economy, and the extent of legislative and regulatory response to this emerging crisis, we plan to prudently add to reserves while we work with borrowers on a case-by-case basis to navigate dynamic challenges."

As previously reported, roughly 20% of the Paycheck Protection Program (PPP) Loans originated by INSBANK were provided to new business customers. While PPP loan disbursements also contributed to aggregate deposit growth, new commercial deposit account relationships helped fuel $22.9 million of deposit growth during the quarter.

"Despite the challenges facing the banking industry, our team has remained focused on executing our plans for core deposit growth and expansion of business lines, a couple of which are fintech ventures," continued Rieniets. "In many ways this pandemic will challenge traditional banking, and those financial institutions, like INSBANK, with forward-looking business models and cultures should emerge with a competitive advantage."

Highlights of the quarter included:

Yield on assets was 4.38% for the three months ended June 30, 2020 compared to 5.03% for the same period in 2019.
Cost of interest-bearing funding was 1.48% for the three months ended June 30, 2020 decreasing from 1.78% for the same period in 2019.
Efficiency ratio was 59.6% at June 30, 2020, comparing favorably to the bank's FDIC peer group average of 62.8%.
Non-Interest Expense to Total Assets was 1.78% for the three months ended June 30, 2020, slightly lower than 1.86% for the same period in 2019 and compared favorably to the bank's FDIC peer group average of 2.65%.
Assets per employee remained strong at $12.86 million, compared to the FDIC peer group of $6.20 million.
Annualized net charge-offs to average loans were 0.00% for the three months ended June 30, 2020 compared to 0.06% for the same period in 2019.
The allowance for loan and lease losses was 1.30%, slightly higher than the bank's FDIC peer group average of 1.25%.
Annualized return on tangible common equity for the second quarter was 5.18%
Tangible book value increased $0.21 to $16.85 during the quarter by virtue of retained earnings and an increase in accumulated other comprehensive income.

About INSBANK

Since 2000, INSBANK has offered its clients highly personal services provided by experienced relationship managers, and has utilized technologies to deliver those services efficiently and conveniently. TMA Medical Banking and Medquity are both divisions of INSBANK. TMA Medical Banking provides banking services to members of the Tennessee Medical Association, while Medquity offers healthcare banking solutions to individuals beyond the scope of Tennessee, whether they are still in residency, practicing or entering retirement. INSBANK is owned by InsCorp, Inc., a Tennessee bank holding company. The bank has offices in Nashville at 2106 Crestmoor Road, and in Brentwood at 5614 Franklin Pike Circle. For more information, please visit www.insbanktn.com.

InsCorp, Inc.
Consolidated Balance Sheets
(000's)
(unaudited)

	*June 30*	*December 31,*	*June 30*
	2020	2019	2019
Assets
Cash and Cash Equivalents	$ 4,986	$ 5,342	$ 3,386
Interest Bearing Deposits	32,297	27,418	45,100
Securities	23,508	20,996	20,638

Loans	500,025	469,172	438,003
Allowance for Loan Losses	(6,480)	(5,380)	(5,102)
Net Loans	493,545	463,792	432,901

Premises and Equipment, net	13,831	13,982	14,070
Bank Owned Life Insurance	9,989	9,865	9,737
Restricted Equity Securities	6,299	5,866	5,064
Goodwill and Related Intangibles, net	1,091	1,091	1,091
Other Assets	8,090	5,022	4,885

Total Assets	$ 593,636	$ 553,374	$ 536,872

Liabilities and Shareholders' Equity
Liabilities
Deposits
Non-interest-bearing	$ 66,773	$ 34,854	$ 34,757
Interest-bearing	397,941	402,118	390,427
Total Deposits	464,714	436,972	425,184

Federal Home Loan Bank Advances	49,000	49,000	46,000
Paycheck Protection Program Liquidity Fund	8,400
Subordinated Debentures	15,000	15,000	15,000
Federal Funds Purchased		-
Other Liabilities	6,079	3,404	4,228
Total Liabilities	543,193	504,376	490,412

Shareholders' Equity
Common Stock	31,155	30,993	30,865
Accumulated Retained Earnings	18,948	17,944	15,583
Accumulated Other Comprehensive Income	340	61	12
Total Stockholders' Equity	50,443	48,998	46,460
Total Liabilities & Shareholders' Equity	$ 593,636	$ 553,374	$ 536,872

Tangible Book Value	$ 16.85	$ 16.32	$ 15.59

InsCorp, Inc.
Consolidated Statements of Income
(000's)
(Unaudited)

	*Six Months Ended*	*Twelve Months Ended*	*Six Months Ended*
	*June 30, 2020*	*December 31, 2019*	*June 30, 2019*

Interest Income	11,780	24,941	12,229
Interest Expense	3,975	8,872	4,328
Net Interest Income	$ 7,805	$ 16,069	$ 7,901
Provision for Loan Losses	1,100	725	400
Non-Interest Income
Service Charges on Deposit Accounts	103	154	70
Residential Mortgage Services	-	4
Bank Owned Life Insurance	124	253	125
Sale of Government Guaranteed Loans	-	384	-
Other	383	600	219
Non-Interest Expense
Salaries and Benefits	3,137	6,023	2,834
Occupancy and equipment	584	1,160	545
Data Processing	270	499	249
Marketing and Advertising	152	379	171
Other	983	1,988	1,081
Net income from Operations	2,189	6,690	3,035

Interest Expense-Subordinated Debt	478	956	478
Income Before Income Taxes	1,711	5,734	2,557
Income Tax Expense	(430)	(1,207)	(686)
Net Income	$ 1,281	$ 4,527	$ 1,871

Return on Weighted Average Common Shares	$ 0.44	$ 1.55	$ 0.64