Northeast Indiana Bancorp, Inc. Announces Record Quarterly Earnings and Full Year 2011 Earnings

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Feb 10, 2012, 12:08 ET

HUNTINGTON, Ind., Feb. 10, 2012 /PRNewswire/ -- Northeast Indiana Bancorp, Inc., (OTCQB: NIDB), the parent company of First Federal Savings Bank, today announced record quarterly earnings for the three months ended December 31, 2011 of $743,000 ($0.60 per diluted common share). This is an increase of $213,000 or 40.2% compared to net income of $530,000 ($0.43 per diluted common share) for the three months ended December 31, 2010. The current quarter's earnings equates to an annualized return on average assets of 1.13% and a return on average equity of 11.61% compared to an ROA of 0.81% and an ROE of 8.70% for the prior year quarter ended December 31, 2010.

The Company also announced full year 2011 earnings of $2.0 million ($1.65 per diluted common share) compared to net income of $2.0 million ($1.64 per diluted common share) for the year ended December 31, 2010. The full year 2011 earnings equates to an ROA of 0.79% and an ROE of 8.13% compared to an ROA of 0.78% and an ROE of 8.49% for the full year 2010

Commenting on the financial results, First Federal Savings Bank President and CEO Michael S. Zahn stated, "We are extremely proud to have achieved record quarterly earnings as we begin to celebrate our centennial and to have done so in continued challenging economic times. We were also able to increase core deposits, capital ratios and continue to aggressively fund the allowance for loan losses. All of these accomplishments enabled the Board of Directors to again reward our shareholders with an increased dividend in 2011."

Net interest income increased by $443,000 or 5.2% to $9.0 million for the year ended December 31, 2011 when compared to $8.6 million for the year ended December 31, 2010. The Company's net interest margin increased 19 basis points to 3.73% for the twelve months ended December 31, 2011 versus 3.54% for the twelve months ended December 31, 2010.

The Company made a $2.2 million provision for loan loss for the year ended December 31, 2011 compared to a $1.7 million provision for loan loss for the year ended December 31, 2010. Management continues to feel it is prudent to increase the allowance for loan losses by setting aside provisions for loan losses at higher levels during these uncertain economic conditions. The bank recorded net charge-offs of $1.3 million for both the year ended December 31, 2011 as well as for the year ended December 31, 2010.

Noninterest income was relatively unchanged at $2.6 million for both the year ended December 31, 2011 and for the year ended December 31, 2010. An increase in net gains on the sale of securities of $444,000 between yearly periods offset an increase in net losses on the sale of repossessed assets of $274,000 as well as decreases in deposit service charges of $63,000 and decreases in net gain on the sale of loans of $81,000.

Non-interest expenses increased to $6.9 million for the year ended December 31, 2011 compared to $6.7 million for the year ended December 31, 2010. The Company saw increases in occupancy due to higher property taxes as well as a sharp increase in professional fees due to higher collection costs and higher internal audit/consulting fees from increased compliance reviews by third parties. In addition, the Company took increased valuation allowances on repossessed assets due to continued deterioration in real estate owned market values. These increases were partially offset by a decline in FDIC premiums due to a change in the way premiums are calculated by the FDIC in the current year.

Total assets increased $5.4 million to $261.5 million at December 31, 2011 compared to December 31, 2010 assets of $256.1 million. Net loans receivable decreased to $176.9 million at December 31, 2011 from $182.9 million at December 31, 2010. Total deposits increased $13.4 million or 7.6% to $189.8 million at December 31, 2011 from $176.4 million at December 31, 2010. Non-maturity deposit balances increased $17.1 million while time deposit balances declined by $3.7 million over the current twelve month period. Borrowed funds decreased $10.6 million or 19.8% to $43.0 million at December 31, 2011 compared to $53.6 million at December 31, 2010.

Shareholder's equity at December 31, 2011 was $26.1 million compared to the $24.1 million reported at December 31, 2010. The Company paid out cash dividends of $888,000 to shareholders during the year ended December 31, 2011. The book value of NIDB stock was $21.09 per common share as of December 31, 2011 as compared to a book value of $19.46 per common share as of December 31, 2010. The number of outstanding common shares was 1,239,946. The last reported trade of the stock on December 31, 2011 was $12.20 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 OTC Markets Group, Inc. (www.otcmarkets.com) utilizing the OTCQB platform 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*	December 31, 2011		December 31, 2010
Interest-earning cash and cash equivalents	$	11,598,753	$	9,450,979
Noninterest earning cash and cash equivalents	2,495,578		2,045,215
Total cash and cash equivalents	14,094,331		11,496,194
Securities available for sale	55,117,994		46,477,692
Securities held to maturity (fair value: Dec. 31, 2011 – $482,807 and Dec. 31, 2010 - $400,000)	482,807		400,000
Loans held for sale	42,500		353,642
Loans receivable, net of allowance for loan loss Dec. 31, 2011 $4,061,508 and Dec. 31, 2010 $3,227,844	176,893,452		182,913,386
Accrued interest receivable	980,464		981,357
Premises and equipment	2,691,780		2,554,170
Investments in limited liability partnerships	153,813		233,001
Cash surrender value of life insurance	7,016,493		6,765,215
Other assets	4,050,116		3,926,783
*Total Assets*	$	261,523,750	$	256,101,440
*LIABILITIES AND STOCKHOLDERS' EQUITY*
Non-interest bearing deposits	14,847,250		14,301,482
Interest bearing deposits	174,988,658		162,099,970
Borrowed Funds	42,955,096		53,565,973
Accrued interest payable and other liabilities	2,587,575		1,998,866
*Total Liabilities*	235,378,579		231,966,291

Retained earnings – substantially restricted	26,145,171		24,135,149
*Total Liabilities and Shareholders' Equity*	$	261,523,750	$		256,101,440

CONSOLIDATED STATEMENTS OF INCOME

	Three Months Ended				Twelve Months Ended
	December 31,				December 31,
	2011		2010		2011		2010
Total interest income	$	3,001,900	$	3,201,718	$	12,135,400	$	12,893,073
Total interest expense		691,858		984,273		3,132,982		4,333,959
Net interest income	$	2,310,042	$	2,217,445	$	9,002,418	$	8,559,114
Provision for loan losses		250,000		350,000		2,175,000		1,700,000
Net interest income after provision for loan losses	$	2,060,042	$	1,867,445	$	6,827,418	$	6,859,114
Service charges on deposit accounts		156,292		153,950		606,339		669,294
Net gain (loss) on securities		-		(102,212)		272,542		(171,470)
Net gain on sale of loans		264,354		307,061		706,302		787,771
Net gain (loss) on sale of repossessed assets		(40,611)		81,473		(246,789)		27,390
Net gain (loss) on sale of fixed assets		-		(1,068)		92		(968)
Brokerage fees		98,778		80,560		401,968		385,474
Other income		221,111		215,267		877,802		913,526
Total noninterest income	$	699,924	$	735,031	$	2,618,256	$	2,611,017
Salaries and employee benefits		761,710		815,611		3,396,034		3,369,347
Occupancy		245,294		232,580		951,889		887,338
Data processing		215,351		200,322		794,244		766,761
Deposit insurance premiums		50,500		84,000		244,500		317,400
Professional fees		107,291		75,590		396,388		296,711
Correspondent bank charges		28,958		31,629		129,948		124,496
Valuation allowances – repossessed assets		110,468		148,000		177,968		148,000
Other expense		212,499		196,429		790,098		756,795
Total noninterest expenses	$	1,732,071	$	1,784,161	$	6,881,069	$	6,666,848
Income before income tax expense	$	1,027,895	$	818,315	$	2,564,605	$	2,803,283
Income tax expense		285,081		288,555		528,405		790,985
Net Income	$	742,814	$	529,760	$	2,036,200	$	2,012,298

NORTHEAST INDIANA BANCORP CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2011				2010		2011		2010
Basic Earnings per common share	0.60				0.43		1.65		1.64
Dilutive Earnings per share	0.60				0.43		1.65		1.64
Net interest margin	3.76%				3.59%		3.73%		3.54%
Return on average assets	1.13%				0.81%		0.79%		0.78%
Return on average equity	11.61%				8.70%		8.13%		8.49%
Efficiency Ratio	57.54%				60.43%		59.21%		59.68%
Average shares outstanding - primary	1,232,525				1,228,770		1,231,921		1,229,383
Average shares outstanding - diluted	1,232,525				1,228,770		1,232,571		1,229,895

Allowance for loan losses:
Balance at beginning of period	$		3,859,859		$	2,823,116	$	3,227,844	$	2,868,468
Charge-offs:
One-to-four family	-				9,645		454,569		322,150
Commercial real estate	-				-		304,478		302,368
Land/land development	-				-		284,961		-
Commercial	19,248				89,303		143,540		890,409
Consumer	56,465				25,028		217,410		56,314
Gross charge-offs	75,713				123,976		1,404,959		1,571,241
Recoveries:
One-to-four family	975				64,525		3,400		67,450
Commercial real estate	5,975				-		5,975		455
Land/land development	-				-		-		-
Commercial	-				101,304		-		108,095
Consumer	20,412				12,875		54,248		54,617
Gross recoveries	27,362				178,704		63,623		230,617
Net charge-offs (recoveries)	48,351				(54,728)		1,341,336		1,340,624
Additions charged to operations	250,000				350,000		2,175,000		1,700,000
Balance at end of period	$		4,061,508		$	3,227,844	$	4,061,508	$	3,227,844

Net loan charge-offs (recoveries) to average loans (1)	0.03%				(0.03)%		0.73%		0.69%

Nonperforming assets (000's)	At December 31,				At September 30,		At June 30,		At December 31,
Loans:	2011				2011		2011		2010
Non-accrual	$		7,474		$	6,750	$	5,640	$	7,275
Past 90 days or more and still accruing	-				-		-		-
Troubled debt restructured	1,213				-		2,421		737
Total nonperforming loans	8,687				6,750		8,061		8,012
Real estate owned	1,242				1,254		1,586		594
Other repossessed assets	-				-		1		-
Total nonperforming assets	$		9,929		$	8,004	$	9,648	$	8,606

Nonperforming assets to total assets	3.85%			3.10%			3.78%		3.36%
Nonperforming loans to total loans	4.80%			3.68%			4.53%		4.30%
Allowance for loan losses to nonperforming loans	46.76%			57.19%			44.77%		40.29%
Allowance for loan losses to total receivable	2.30%			2.11%			2.07%		1.76%
	At December 31,
	2011				2010
Stockholders' equity as a % of total assets	9.99%				9.42%
Book value per share	$	21.09			$	19.46
Common shares outstanding- EOP	1,239,946				1,239,946

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