InsCorp Reports Record Earnings as Margin Increases

NASHVILLE, Tenn., Jan. 27, 2022 /PRNewswire/ -- InsCorp, parent company to INSBANK (OTCQX:IBTN) today reported fourth quarter earnings of $1,743,000, or $0.60 per share compared to $809,000 and $0.28 per share for the same period in 2020, an increase of 115%. For the year net income was $6,029,000, or $2.06 per share, which was a 148% increase over the prior year of $2,433,000, or $0.83 per share. Net interest margin improved for the fifth consecutive quarter as the bank's cost of interest-bearing funds has steadily decreased since the onset of the pandemic. In addition to growth of net interest and non-interest income sources, quarterly momentum was enhanced by mark-to-market adjustments to interest rate hedges.  Total interest income of $24.9 million, including PPP fee income of $1.4 million, increased 10% over the prior year, while interest expense decreased 35% from $7.2 million to $4.7 million. The company's investments in technology and its business model emphasizing digital delivery channels continue to generate efficiencies with scale. For the year the bank's efficiency ratio improved from 59% to 51%, placing it in the top quartile of performance amongst its FDIC-defined peer group.

In 2021 operating revenues were driven by loan growth as core loans, excluding PPP advances, increased $57 million, or 12% during the year. Growth was accomplished with a balanced mix of business and commercial real estate loans, as well as niche lending products offered by Medquity, the bank's healthcare lending division that serves a national footprint. "2021 was a unique year that found the bank and its customers pursuing new opportunities while simultaneously navigating matters unique to a pandemic," said Jim Rieniets, President and CEO of INSBANK. "In that respect, we are very pleased not only with our financial performance, but also with deployment of both customer-facing and back-office technologies. As change accelerates in the financial services industry, we believe INSBANK's tech initiatives and differentiated business model are characteristic of a bank that is plotting a course for relevancy," Rieniets continued.

During the 4^th quarter of 2021, a number of items were executed to enhance shareholder value at the holding company level. InsCorp issued $10 million in subordinated debt at 3.75%, as previously reported, and executed on 134,000 in share repurchase agreements. Additionally, InsCorp was able to repurchase $7.5 million of its vintage-2018 subordinated debt with a 6.375% coupon, financed with a senior debt plan. Lastly, $2 million was contributed to InsBank for the purpose of growth capital.

The board of directors also recently approved the payment of a special dividend. InsCorp shareholders of record February 11, 2022, will receive a $0.12 dividend payable on March 4, 2022. Regular, semi-annual dividends were suspended shortly after the onset of the COVID-19 pandemic in 2020, and were resumed a year later in May of 2021.  "We chose a cautionary path in 2020 that included retaining all of our earnings, given the amount of economic uncertainty at the time. Over the course of 2021, however, our company thrived while risks elements diminished, said Michael Qualls, Chairman of InsCorp. "As a result, we're pleased to enhance our shareholders' return with this special dividend."

Highlights of the quarter and year-over-year include:

• Total assets grew $83 million year over year or 13.5% as of December 31, 2021.
• Non-interest bearing deposits grew $27.3 million or 51.8% during the 12 months ended December 31, 2021.
• Deferred loan fees related to the PPP loans is approximately $270,000 on December 31, 2021.
• Efficiency ratio was 50.99% on December 31, 2021, comparing favorably to the bank's FDIC peer group average of 59.26%.
• Non-Interest Expense to Total Average Assets was 1.74% for the year ended December 31, 2021, slightly higher than 1.73% for the same period in 2020 and compared favorably to the bank's FDIC peer group average of 2.27%.
• Cost of all interest-bearing funding was 0.72% for the three months ended December 31, 2021 decreasing from 1.33% for the same period in 2020.
• Assets per employee remained strong at $13.96 million, compared to the FDIC peer group of $7.16 million.
• The bank's tier 1 capital ratio was 11.98%, while total risk-based capital was 13.23%.
• The allowance for loan and lease losses was 1.48% exclusive of PPP loan balances.
• Annualized return on tangible common equity for the year was 11.58% for the year ended December 31, 2021
• Tangible book value increased to $18.90 on December 31, 2021 from $17.24 at December 31, 2020.
• As of yearend the mark –to-market adjustment for interest rate hedges was $748,000 with $604,000 occurring in the 4^th quarter.
• The percentage of loans past due and non-accrual to gross loans was 0.52% comparing favorably to peer of 0.78%.
• There were no net charge-offs for the quarter ended December 31, 2021.

About INSBANK 

Since 2000, INSBANK has offered its clients highly personalized service provided by experienced relationship managers, while positioning itself as an innovator, utilizing technologies to deliver those services efficiently and conveniently.  In addition to its commercial focused operation, INSBANK operates three divisions, Medquity, TMA Medical Banking and INSBANK Online.  Medquity offers healthcare banking solutions to individuals nationwide, whether they are still in residency, practicing or entering retirement, while TMA Medical Banking provides banking services specifically to members of the Tennessee Medical Association. INSBANK Online offers nationally available virtual private client services for interest bearing deposits.  INSBANK is owned by InsCorp, Inc., a Tennessee bank holding company. The bank is headquartered in Nashville at 2106 Crestmoor Road, and has an office in Brentwood at 5614 Franklin Pike Circle. For more information, please visit www.insbank.com

SOURCE INSBANK