Northeast Indiana Bancorp, Inc. Announces First Quarter Earnings

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Apr 15, 2010, 01:54 ET

HUNTINGTON, Ind., April 15 /PRNewswire-FirstCall/ -- Northeast Indiana Bancorp, Inc., (OTC Bulletin Board: NIDB), the parent company of First Federal Savings Bank, has announced net income of $452,000 ($0.37 per diluted common share) for the first quarter ended March 31, 2010, a decrease of $81,000 or 17.8% compared to $533,000 ($0.43 per diluted common share) for the first quarter ended March 31, 2009. The current three months earnings equates to an annualized return on average assets (ROA) of 0.72% and a return on average equity (ROE) of 7.84% as compared to an ROA of 0.84% and an ROE of 9.72% for the three months ended March 31, 2009.

Commenting on the financial results, First Federal Savings Bank President Michael S. Zahn stated, "We are pleased with our first quarter performance. Our margins continue to expand and we have been able to increase our core deposits. With ongoing difficult economic conditions, we felt it was prudent to continue to aggressively fund our provisions for loan losses. Also, the significant decrease in mortgage volumes negatively impacted our income for the quarter."

Net interest income was $2.0 million for both the quarter ended March 31, 2010 as well as for the quarter ended March 31, 2009. The Company's net interest margin increased slightly to 3.48% for the current quarter compared to 3.37% for the year earlier quarter.

The Company made a $350,000 provision for loan loss during the quarter ended March 31, 2010 compared to a $275,000 provision for loan loss for the quarter ended March 31, 2009. Net charge-offs were $428,000 for the quarter ended March 31, 2010 compared to net charge-offs of $139,000 for the quarter ended March 31, 2009. Non performing assets increased slightly to $7.0 million at March 31, 2010 when compared to $6.8 million at December 31, 2009.

Noninterest income decreased by $84,000 to $489,000 for the current period compared to $573,000 during the year earlier period. The reduction is solely due to a reduction of $193,000 between quarterly periods in net gain on the sale of loans, due to significantly reduced refinancing volumes. Those volumes were at record levels for First Federal during the quarter ended March 31, 2009. This decrease was partially offset by a reduction in losses on the sale of repossessed assets of $61,000 and an increase in brokerage fees of $34,000 between the current quarterly period and the prior year quarterly period.

Noninterest expense increased $88,000 to $1.6 million for the quarter ended March 31, 2010 compared to $1.5 million for the quarter ended March 31, 2009.

This increase came primarily from increases in salaries and benefits due to both additional staffing at our new Fort Wayne office that opened September 2009 as well as a reduction in deferred loan fees during the current quarter due to significantly lower mortgage volumes. These increases were partially offset by decreases in other expenses of $29,000 between quarterly periods.

Net loans receivable increased $1.1 million to $192.4 million at March 31, 2010 when compared to $191.3 million at December 31, 2009. Total deposits increased sharply by $14.7 million or 9.5% to $169.3 million at March 31, 2010 compared to $154.6 million at December 31, 2009. The significant increase in deposits came in retail NOW, MMDA, Savings and CD balances through First Federal's full service branches. These newly acquired retail deposits were utilized to pay off maturing wholesale borrowed funds. Borrowed funds declined $16.0 million or 21.8% to $57.1 million at March 31, 2010 compared to $73.1 million at December 31, 2009.

Shareholders' equity increased to $23.3 million at March 31, 2010 compared to $23.0 million at December 31, 2009. The book value of NIDB's stock was $18.83 per common share as of March 31, 2010. The number of outstanding common shares was 1,239,946. The last reported trade of the stock on April 14, 2010 was $10.50 per common share.

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 four full-service Indiana offices in Huntington (2), Warsaw and Fort Wayne. The Company is traded on the Over the Counter Bulletin Board under the symbol "NIDB". Our web site address is www.firstfedindiana.com.

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 (Unaudited) CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
*ASSETS*	March 31, 2010	December 31, 2009
Interest-earning cash and cash equivalents	$6,692,821	$10,929,272
Noninterest earning cash and cash equivalents	1,705,145	2,473,235
Total cash and cash equivalents	8,397,966	13,402,507
Securities available for sale	36,707,168	33,025,298
Securities held to maturity	400,000	550,000
Loans held for sale	-	53,200
Loans receivable, net of allowance for loan loss March 31, 2010 $2,790,401 and December 31, 2009 $2,868,468	192,433,535	191,267,218
Accrued interest receivable	1,008,312	1,040,528
Premises and equipment	2,151,678	2,158,406
Investments in limited liability partnerships	292,392	317,643
Cash surrender value of life insurance	6,577,709	6,514,390
Other assets	4,109,998	4,395,150
*Total Assets*	$252,078,758	$252,724,340
*LIABILITIES AND STOCKHOLDERS' EQUITY*
Non-interest bearing deposits	11,349,758	11,065,663
Interest bearing deposits	157,935,269	143,563,858
Borrowed Funds	57,123,345	73,064,228
Accrued interest payable and other liabilities	2,324,921	2,065,832
*Total Liabilities*	228,733,293	229,759,581

Retained earnings – substantially restricted	23,345,465	22,964,759
*Total Liabilities and Shareholders' Equity*	$252,078,758	$252,724,340

CONSOLIDATED STATEMENTS OF INCOME

	Three Months Ended
	March 31,
	2010		2009
Total interest income	$	3,207,663	$	3,561,779
Total interest expense		1,176,827		1,558,179
Net interest income	$	2,030,836	$	2,003,600
Provision for loan losses		350,000		275,000
Net interest income after provision for loan losses	$	1,680,836	$	1,728,600
Service charges on deposit accounts		165,447		153,769
Net gain on sale of loans		30,844		223,658
Net gain (loss) on sale of securities		(34,201)		(1,592)
Net gain (loss) on sale of repossessed assets		(15,766)		(76,912)
Brokerage fees		110,875		76,620
Increase in cash surrender value of life insurance		63,319		66,249
Other income		167,984		130,774
Total noninterest income	$	488,502	$	572,566
Salaries and employee benefits		839,797		738,296
Occupancy		204,352		202,953
Data processing		190,348		191,025
Deposit insurance premiums		71,400		54,000
Professional fees		62,538		62,797
Correspondent bank charges		28,895		31,088
Other expense		194,283		223,633
Total noninterest expenses	$	1,591,613	$	1,503,792
Income before income tax expenses	$	577,725	$	797,374
Income tax expense		125,437		264,676
Net Income	$	452,288	$	532,698

NORTHEAST INDIANA BANCORP CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
	Three Months Ended March 31,
	2010	2009
Basic Earnings per common share	0.37	0.43
Dilutive Earnings per share	0.37	0.43
Net interest margin	3.48%	3.37%
Return on average assets	0.72%	0.84%
Return on average equity	7.84%	9.72%
Efficiency ratio	63.18%	58.37%
Average shares outstanding- primary	1,235,605	1,227,711
Average shares outstanding- diluted	1,235,672	1,227,944

Allowance for loan losses:
Balance at beginning of period	$2,868,468	$1,750,605
Charge-offs:
One-to-four family	92,067	54,958
Commercial real estate	37,065	-
Commercial	309,726	-
Consumer	370	95,499
Gross charge-offs	439,228	150,457
Recoveries:
One-to-four family	975	370
Commercial real estate	-	-
Commercial	-	-
Consumer	10,186	10,673
Gross recoveries	11,161	11,043
Net charge-offs	428,067	139,414
Additions charged to operations	350,000	275,000
Balance at end of period	$2,790,401	$1,886,191

Net loan charge-offs to average loans (1)	0.87%	0.27%

Nonperforming assets (000's)	At March 31,	At December 31,
Loans:	2010	2009
Non-accrual	$5,474	$2,826
Past 90 days or more and still accruing	-	-
Troubled debt restructured	621	3,008
Total nonperforming loans	6,095	5,834
Real estate owned	884	934
Other repossessed assets	3	11
Total nonperforming assets	$6,982	$6,779

Nonperforming assets to total assets	2.77%	2.68%
Nonperforming loans to total loans	3.12%	3.01%
Allowance for loan losses to nonperforming loans	45.78%	49.16%
Allowance for loan losses to net loans receivable	1.45%	1.50%

	At March 31,
	2010	2009

Stockholders' equity as a % of total assets	9.26%	8.80%
Book value per share	$ 18.83	$ 17.86
Common shares outstanding- EOP	1,239,946	1,230,670

(1) Ratios for the three-month periods are annualized.