NORTHEAST INDIANA BANCORP, INC. ANNOUNCES FIRST QUARTER 2023 EARNINGS
HUNTINGTON, Ind., April 21, 2023 /PRNewswire/ -- Northeast Indiana Bancorp, Inc., (OTCQB: NIDB), the parent company of First Federal Savings Bank, has announced net income of $1.17 million ($0.97 per diluted common share) for the first quarter ended March 31, 2023 compared to earnings from the quarter ended March 31, 2022 of $1.78 million ($1.49 per diluted common share). The current three months earnings equate to an annualized return on average assets (ROA) of 1.04% and a return on average equity (ROE) of 10.75% compared to an ROA of 1.70% and an ROE of 15.07% for the prior year quarter ended March 31, 2022. The decline was related to the increase in interest expense compared to interest income due to the historic increase in interest rates, provision for loan loss expense due to the new CECL accounting standard and several investments made for the benefit of future growth.
Total assets increased $6.6 million, or 5.9% on an annualized basis, to $452.1 million at March 31, 2023 compared to total assets of $445.5 million at December 31, 2022. Total loans increased $5.0 million, or 6.2% on an annualized basis, to $325.7 million at March 31, 2023 compared to total loans of $320.8 million at December 31, 2022. Total deposits increased $3.9 million, or 4.3% on an annualized basis, to $370.7 million at March 31, 2023 compared to $366.8 million at December 31, 2022.
Shareholders' equity increased $691,000 to $43.8 million at March 31, 2023 compared to $43.1 million at December 31, 2022. The increase in shareholders' equity was a result of accumulated other comprehensive income increasing $278,000 due to a slight improvement in the fair value of the investment portfolio and net income for the first quarter. This increase was partially offset by a decline in retained earnings of $398,000 for the initial entry to implement the new CECL accounting standard. The book value of NIDB stock increased $0.22 to $36.02 per common share as of March 31, 2023 compared to $35.80 at December 31, 2022. The number of outstanding common shares was 1,216,335 as of March 31, 2023.
Net interest income decreased $116,000 in the first quarter of 2023 compared to the same period in 2022. The decrease was a result of a 45 basis point decline in net interest margin to 3.35%, partially offset by an increase in average earning assets of $38.8 million for the first quarter of 2023 compared to the first quarter of 2022. The decline in net interest margin was primarily due to an increase of 164 basis points in costs of interest-bearing liabilities of 2.02% in the first quarter of 2023 compared to 0.38% in the first quarter of 2022 compared to an increase of 88 basis points in yield on interest earning assets to 4.97% in the first quarter of 2023 compared to 4.09% in the first quarter of 2022.
Non-interest income declined $135,000 in first quarter of 2023 compared to the same period in 2022. The decrease was a result of a decline of $177,000 in gain on sale of loans due to slower mortgage refinances in the first quarter of 2023 compared to the first quarter of 2022. Non-interest expense increased $481,000 in the first quarter of 2023 compared to the first quarter of 2022. The increase in non-interest expense is primarily due to investments made in 2022 to increase capacity for future growth and a new branch location that opened in the second quarter of 2022.
Michael S. Zahn, President/CEO said, "The historic increase in interest rates had a negative impact on our margin, but our commercial loan pipeline continues to be strong. We believe the investments that have been made position us well for the future."
Northeast Indiana Bancorp, Inc. is headquartered at 648 N. Jefferson Street, Huntington, Indiana. The company offers a full array of banking and financial brokerage services to its customers through its main office in Huntington and six full-service Indiana offices in Huntington (2), Warsaw (2) and Fort Wayne (2). The Company is traded on the OTC Markets Group, Inc. (www.otcmarkets.com) utilizing the OTCQB platform under the symbol "NIDB". Our web site address is www.firstfedindiana.bank.
This press release may contain forward-looking statements, which are based on management's current expectations regarding economic, legislative and regulatory issues. Factors which may cause future results to vary materially include, but are not limited to, general economic conditions, changes in interest rates, loan demand, and competition. Additional factors include changes in accounting principles, policies or guidelines; changes in legislation or regulation; and other economic, competitive, regulatory and technological factors affecting each company's operations, pricing, products and services.
NORTHEAST INDIANA BANCORP | ||||
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||||
March 31, | December 31, | March 31, | ||
Balance Sheet (Unaudited) | 2023 | 2022 | 2022 | |
Assets | ||||
Interest-earning cash and cash equivalents | $ 2,646,912 | $ 3,141,705 | $ 8,040,570 | |
Non-interest earning cash and cash equivalents | 1,940,693 | 747,920 | 4,216,611 | |
Total cash and cash equivalents | 4,587,606 | 3,889,625 | 12,257,181 | |
Interest-earning time deposits | 1,230,000 | 1,230,000 | 2,210,000 | |
Securities available for sale | 78,278,059 | 78,273,337 | 85,245,995 | |
Securities held to maturity | 12,787,199 | 12,062,446 | 11,791,172 | |
Loans held for sale | 403,600 | 189,600 | 1,313,598 | |
Loans, gross | 330,160,388 | 324,752,497 | 283,628,078 | |
Allowance for loan losses | (4,421,505) | (3,996,619) | (4,004,074) | |
Loans, net | 325,738,883 | 320,755,878 | 279,624,004 | |
Accrued interest receivable | 1,982,785 | 1,923,986 | 1,523,198 | |
Premises and equipment | 7,376,693 | 7,254,951 | 7,122,223 | |
FHLB Stock | 2,101,600 | 2,101,600 | 2,101,600 | |
Investment in limited partnerships | 1,153,334 | 1,228,334 | 1,453,334 | |
Cash surrender value of life insurance | 11,703,266 | 11,629,618 | 11,407,075 | |
Other assets | 4,803,252 | 4,988,219 | 3,451,488 | |
Total Assets | $ 452,146,276 | $ 445,527,594 | $ 419,500,867 | |
Liabilities and Stockholders' Equity | ||||
Non-interest bearing deposits | $ 54,547,736 | $ 53,232,315 | $ 62,072,982 | |
Interest bearing deposits | 316,197,968 | 313,584,014 | 294,557,300 | |
Borrowed funds | 34,000,000 | 32,000,000 | 13,925,706 | |
Accrued interest payable and other liabilities | 3,582,889 | 3,584,163 | 3,622,201 | |
Total Liabilities | 408,328,593 | 402,400,492 | 374,178,189 | |
Stockholders' equity | 43,817,683 | 43,127,102 | 45,322,678 | |
Total Liabilities and Stockholders' Equity | $ 452,146,276 | $ 445,527,594 | $ 419,500,867 | |
Three months ended | ||||
March 31, | December 31, | March 31, | ||
Income Statement (Unaudited) | 2023 | 2022 | 2022 | |
Net interest income | ||||
Total interest income | $ 5,388,127 | $ 5,071,415 | $ 4,033,571 | |
Total interest expense | 1,761,895 | 1,120,123 | 291,129 | |
Net interest income | 3,626,232 | 3,951,292 | 3,742,442 | |
Provision for loan losses | 90,000 | - | - | |
Net interest income after provision for loan losses | 3,536,232 | 3,951,292 | 3,742,442 | |
Non-interest income | ||||
Service charges on deposit accounts | 188,222 | 198,715 | 154,398 | |
Interchange fees | 192,338 | 193,610 | 162,545 | |
Loan servicing fees | 62,712 | |||
Net gain on sale of loans | 65,793 | 66,083 | 242,882 | |
Net loss on sale of repossessed assets | - | - | - | |
Brokerage fees | 66,485 | 41,034 | 54,151 | |
Increase in cash surrender value of life insurance | 73,648 | 74,955 | 75,134 | |
Other income | 183,244 | 102,248 | 215,866 | |
Total non-interest income | 769,730 | 739,357 | 904,976 | |
Non-interest expense | ||||
Salaries and employee benefits | 1,687,245 | 1,513,293 | 1,410,259 | |
Occupancy | 340,935 | 383,944 | 282,467 | |
Data processing | 394,597 | 371,655 | 356,919 | |
Deposit insurance premiums | 49,500 | 28,500 | 30,500 | |
Professional fees | 111,035 | 138,903 | 80,905 | |
Advertising and marketing fees | 91,717 | 89,021 | 57,088 | |
Correspondent bank charges | 38,732 | 32,864 | 25,742 | |
Other expense | 253,251 | 281,403 | 242,259 | |
Total non-interest expense | 2,967,012 | 2,839,583 | 2,486,139 | |
Income before income taxes | 1,338,950 | 1,851,066 | 2,161,279 | |
Income tax expense | 168,494 | 298,062 | 380,167 | |
Net income | $ 1,170,456 | $ 1,553,004 | $ 1,781,112 | |
Three months ended | ||||
March 31, | December 31, | March 31, | ||
Selected Financial Ratios and Other Financial Data (Unaudited) | 2023 | 2022 | 2022 | |
Average shares outstanding - basic | 1,200,659 | 1,201,442 | 1,199,001 | |
Average shares outstanding - diluted | 1,200,703 | 1,201,491 | 1,199,318 | |
Basic earnings per share | $ 0.97 | $ 1.29 | $ 1.49 | |
Diluted earnings per share | $ 0.97 | $ 1.29 | $ 1.49 | |
Net interest margin | 3.35 % | 3.73 % | 3.80 % | |
Return on average assets | 1.04 % | 1.42 % | 1.70 % | |
Return on average equity | 10.75 % | 14.84 % | 15.07 % | |
Efficiency ratio | 67.49 % | 60.54 % | 53.50 % | |
Allowance for loan losses: | ||||
Balance, beginning of period | $ 3,996,619 | $ 4,024,366 | $ 3,998,392 | |
Charge-offs: | ||||
One-to-four family | - | - | - | |
Commercial real estate | - | - | - | |
Land/land development | - | - | - | |
Commercial | - | - | - | |
Consumer | 36,130 | 60,866 | 17,435 | |
Gross charge-offs | 36,130 | 60,866 | 17,435 | |
Recoveries: | ||||
One-to-four family | - | 13,099 | 955 | |
Commercial real estate | - | 40 | 218 | |
Land/land development | - | - | - | |
Commercial | 923 | 185 | 9,725 | |
Consumer | 20,093 | 19,795 | 12,219 | |
Gross recoveries | 21,016 | 33,119 | 23,117 | |
Net charge-offs (recoveries) | 15,114 | 27,747 | (5,682) | |
CECL adjustment | 350,000 | |||
Provision for loan losses | 90,000 | - | - | |
Balance, end of period | $ 4,421,505 | $ 3,996,619 | $ 4,004,074 | |
Net loan charge-offs (recoveries) to average loans | 0.02 % | 0.03 % | -0.01 % | |
As of | ||||
March 31, | December 31, | March 31, | ||
Non-performing assets | 2023 | 2022 | 2022 | |
Loans: | ||||
Non-accrual | $ 4,137,597 | $ 2,463,911 | $ 2,023,525 | |
Past 90 days or more and still accruing | - | - | - | |
Troubled debt restructured | 525,020 | 525,383 | 363,992 | |
Total non-performing loans | 4,662,617 | 2,989,294 | 2,387,517 | |
Real estate owned | - | - | - | |
Other repossessed assets | - | - | - | |
Total non-performing assets | $ 4,662,617 | $ 2,989,294 | $ 2,387,517 | |
Non-performing assets to total assets | 1.03 % | 0.67 % | 0.57 % | |
Non-performing loans to gross loans | 1.41 % | 0.92 % | 0.84 % | |
Allowance for loan losses to non-performing loans | 94.83 % | 133.70 % | 167.71 % | |
Allowance for loan losses to gross loans | 1.34 % | 1.23 % | 1.41 % | |
Other financial ratios | ||||
Stockholders' equity as a % of total assets | 9.69 % | 9.68 % | 10.80 % | |
Book value per share | $ 36.02 | $ 35.80 | $ 37.60 | |
Common shares outstanding | 1,216,335 | 1,204,835 | 1,205,435 | |
(1) Ratios for three-month periods are annualized | ||||
SOURCE Northeast Indiana Bancorp, Inc.
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