Northeast Indiana Bancorp, Inc. Announces Increased Quarterly Earnings

HUNTINGTON, Ind., July 14, 2011 /PRNewswire/ -- Northeast Indiana Bancorp, Inc. (OTC Bulletin Board:  NIDB), the parent company of First Federal Savings Bank, today announced net income of $677,000 ($0.55 per diluted common share) for the Company's second quarter ended June 30, 2011, an increase of $186,000 or 37.9% when compared to net income of $491,000 ($0.40 per diluted common share) for the second quarter ended June 30, 2010.  The current three months earnings equates to an annualized return on average assets (ROA) of 1.05% and a return on average equity (ROE) of 11.05% compared to an annualized ROA of 0.76% and an ROE of 8.38% for the three months ended June 30, 2010.  

Commenting on the financial results, CEO Michael S. Zahn stated, "We are very pleased to have recorded such strong earnings for our shareholders in a challenging environment.  These results are a reflection of the dedication and commitment by our employees.  As a community bank, we take pride in serving our customers and the communities in which we operate."

Net interest income increased by $107,000 or 5.0% to $2.2 million for the quarter ended June 30, 2011 when compared to $2.1 million for the quarter ended June 30, 2010.  The Company's net interest margin increased by nineteen basis points to 3.74% for the current quarter compared to 3.55% in the year earlier quarter.  Sequentially, the current quarter's 3.74% net interest margin was also a sixteen basis point improvement over the quarter ended March 31, 2011 net interest margin of 3.58%.

The Company made a $350,000 provision for loan loss during the quarter ended June 30, 2011 compared to a $500,000 provision for loan loss for the quarter ended June 30, 2010.   Management continues to feel it is prudent to maintain or increase the allowance for loan losses by setting aside provisions for loan losses at higher levels during these weak economic conditions.  The bank recorded net charge-offs of $432,000 for the quarter ended June 30, 2011 compared to net charge-offs of $452,000 for the quarter ended June 30, 2010.  

Noninterest income increased by $16,000 to $717,000 during the quarter ended June 30, 2011 when compared to $701,000 in the same quarterly period a year ago.  This was primarily due to an increase in net gains on security sales partially offset by reductions in service charges, brokerage fees and other income.    

Noninterest expense increased by $39,000 but was relatively unchanged at $1.7 million for the quarter ended June 30, 2011 and for the quarter June 30, 2010.  Modest increases in occupancy and data processing were partially offset by a decrease to other expense.  Professional fees increased as collection efforts remain high while compliance costs have been increasing as well.  The Company's efficiency ratio improved to 57.4% for the current three month period compared to 58.5% in the prior year three month period.

Net income for the six months ended June 30, 2011 decreased to $663,000 ($0.54 per diluted common share) compared to net income of $944,000 ($0.76 per diluted common share) for the six months ended June 30, 2010.  The decrease in net income between six month periods is solely due to an increase in loan loss provisions of $700,000 that management elected to take during the quarter ended March 31, 2011 to bolster the allowance for loan losses due to continued weak real estate markets in which we do business.    

Noninterest income was unchanged between six month periods at $1.2 million while noninterest expense increased $91,000 or 2.8% during the same time frame due mostly to higher occupancy and professional fees.

Total assets decreased $891,000 to $255.2 million at June 30, 2011 compared to December 31, 2010 assets of $256.1 million.  Net loans decreased $8.7 million to $174.2 million at June 30, 2011 compared to $182.9 million at December 31, 2010 as weak loan demand continues to persist.  Total deposits increased by $7.7 million to $184.9 million at June 30, 2011 from $176.4 million at December 31, 2010.  The increase in total deposits came in NOW, MMDA and Savings balances through First Federal's full service branches.  These newly acquired lower-costing deposits were utilized to pay off maturing brokered deposits and wholesale borrowed funds.  Borrowed funds declined $9.7 million or 18.0% to $43.9 million at June 30, 2011 compared to $53.6 million at December 31, 2010.  

Shareholder's equity increased to $24.9 million at June 30, 2011 compared to $24.1 million at December 31, 2010.  The book value of NIDB's stock was $20.08 per common share as of June 30, 2011.  The number of outstanding common shares was 1,239,946 as of the same date.  The last reported trade of the stock on July 13, 2011 was $11.95 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.

SOURCE Northeast Indiana Bancorp, Inc.