NORTHEAST INDIANA BANCORP, INC. ANNOUNCES SECOND QUARTER 2023 EARNINGS

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Jul 28, 2023, 09:50 ET

HUNTINGTON, Ind., July 28, 2023 /PRNewswire/ -- Northeast Indiana Bancorp, Inc. (OTCQB: NIDB), the parent company of First Federal Savings Bank, today announced net income for the six months ended June 30, 2023, was $2.3 million, or $1.90 per diluted common share, compared to net income of $3.4 million, or $2.81 per diluted common share for the six months ended June 30, 2022. The current six months earnings equate to an annualized ROA of 1.00% and an annualized ROE of 10.46% compared to an annualized ROA of 1.61% and an annualized ROE of 14.96% for the six months ended June 30, 2022.

Net income for the second quarter ended June 30, 2023, was $1.1 million, or $0.93 per diluted common share, compared to net income of $1.6 million, or $1.33 per diluted common share for the second quarter ended June 30, 2022. The current quarter earnings equate to an annualized return on average assets (ROA) of 0.96% and an annualized return on average equity (ROE) of 10.16% compared to an annualized ROA of 1.52% and an annualized ROE of 14.81% for the second quarter June 30, 2022.

The declines in net income are primarily related to a decrease in net interest income and an increase in overhead expenses. Net Interest Income was down $500,000 through the first six months of 2023 compared to the same period in 2022. Payroll and employee benefit expenses increased $625,000 in 2023 compared to the same period in 2022. In addition, the gain on sale of mortgage loans decreased by $290,000 for the first six months of 2023 compared to the same period in 2022. Partially offsetting this decline was an increase in Non-Interest Operating Income of $225,000 for the first six months of 2023 compared to 2022.

Total Assets increased $30.1 million to $475.6 million at June 30, 2023 compared to $445.5 million at December 31, 2022. Net loans increased $26.9 million, or 16.9% on an annualized basis to $347.7 million at June 30, 2023 compared to $320.7 million at December 31, 2022. Total deposits increased $17.7 million, or 9.3% on an annualized basis to $383.9 million at June 30, 2023 compared to $366.8 million at December 31, 2022. Stockholder's equity increased slightly to $44.1 million at June 30, 2023 compared to $43.1 million at December 31, 2022. The book value of NIDB's stock was $36.42 per common share and tangible common equity ratio was 9.29% as of June 30, 2023.

Michael S. Zahn, President, and CEO commented, "In a challenging banking environment, we continue to experience excellent growth. With the rapid increases in interest rates by the Federal Reserve to combat inflation, margins continue to be under pressure. We are in a positive position to navigate the uncertain interest rate waters that lie ahead. Our focus on the success of our customers while investing in our employees should continue to serve our communities and enhance shareholder value."

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

	June 30,	December 31,	June 30,
Balance Sheet (Unaudited)	2023	2022	2022
		(Audited)
Assets
Non-interest earning cash and cash equivalents	$ 5,035,444	$ 3,141,705	$ 4,216,886
Interest-earning cash and cash equivalents	2,600,052	747,920	165,720
Total cash and cash equivalents	7,635,496	3,889,625	4,382,607
Interest-earning time deposits	3,433,249	1,230,000	1,965,000
Securities available for sale	74,823,867	78,273,337	78,495,626
Securities held to maturity	12,776,430	12,062,446	12,081,645
Loans held for sale	528,600	189,600	161,200
Loans, gross	352,224,183	324,752,497	291,571,122
Allowance for loan losses	(4,508,446)	(3,996,619)	(3,982,194)
Loans, net	347,715,738	320,755,878	287,588,928
Accrued interest receivable	2,022,072	1,923,986	1,648,755
Premises and equipment	7,019,007	7,254,951	7,187,929
FHLB Stock	2,101,600	2,101,600	2,101,600
Investment in limited partnerships	1,078,334	1,228,334	1,378,334
Cash surrender value of life insurance	11,601,672	11,629,618	11,480,059
Other assets	4,892,556	4,988,219	4,943,047
Total Assets	$ 475,628,620	$ 445,527,594	$ 413,414,729

Liabilities and Stockholders' Equity
Non-interest bearing deposits	$ 59,627,379	$ 53,232,315	$ 59,310,279
Interest bearing deposits	324,309,052	313,584,014	298,125,285
Borrowed funds	43,500,000	32,000,000	11,200,000
Accrued interest payable and other liabilities	4,024,153	3,584,163	2,747,398
Total Liabilities	431,460,583	402,400,492	371,382,961
Stockholders' equity	44,168,037	43,127,102	42,031,768
Total Liabilities and Stockholders' Equity	$ 475,628,620	$ 445,527,594	$ 413,414,729

	Three months ended			Six months ended
	June 30,	March 31,	June 30,	June 30,	June 30,
Income Statement (Unaudited)	2023	2023	2022	2023	2022

Net interest income
Total interest income	$ 5,713,346	$ 5,388,127	$ 3,990,602	$ 11,101,473	$ 8,024,174
Total interest expense	2,260,069	1,761,895	324,499	4,021,964	615,628
Net interest income	3,453,277	3,626,232	3,666,104	7,079,509	7,408,546
Provision for loan losses	90,000	90,000	-	180,000	-
Net interest income after provision for loan losses	3,363,277	3,536,232	3,666,104	6,899,509	7,408,546

Non-interest income
Service charges on deposit accounts	177,656	188,222	186,399	365,878	340,797
Interchange fees	200,186	192,338	202,532	392,524	388,873
Loan servicing fees	-	-	88,523	-	192,926
Net gain on sale of loans	79,680	65,793	189,597	145,473	432,478
Net loss on sale of repossessed assets	-	-	-	-	-
Brokerage fees	43,798	66,485	57,014	110,283	111,166
Increase in cash surrender value of life insurance	73,360	73,649	72,984	147,009	148,118
Other income	376,994	183,244	80,077	560,238	168,066
Total non-interest income	951,674	769,730	877,126	1,721,404	1,782,424

Non-interest expense
Salaries and employee benefits	1,680,705	1,687,245	1,334,097	3,367,950	2,744,356
Occupancy	369,466	340,935	328,827	710,401	611,294
Data processing	394,044	394,597	360,896	788,641	717,815
Deposit insurance premiums	56,000	49,500	28,500	105,500	59,000
Professional fees	143,224	111,035	142,591	254,260	223,496
Advertising and marketing fees	76,513	91,717	38,684	168,230	95,772
Correspondent bank charges	35,342	38,732	31,310	74,074	57,052
Other expense	292,984	253,251	368,060	546,235	610,640
Total non-interest expense	3,048,278	2,967,012	2,632,965	6,015,290	5,119,425

Income before income taxes	1,266,673	1,338,950	1,910,266	2,605,623	4,071,544
Income tax expense	149,993	168,494	314,737	318,487	694,904
Net income	$ 1,116,680	$ 1,170,456	$ 1,595,529	$ 2,287,136	$ 3,376,640

	Three months ended			Six months ended
	June 30,	March 31,	June 30,	June 30,	June 30,
Selected Financial Ratios and Other Financial Data (Unaudited)	2023	2023	2022	2023	2022

Average shares outstanding - basic	1,201,035	1,200,659	1,199,885	1,200,851	1,199,512
Average shares outstanding - diluted	1,201,035	1,200,703	1,200,059	1,200,873	1,199,757
Basic earnings per share	$ 0.93	$ 0.97	$ 1.33	$ 1.90	$ 2.82
Diluted earnings per share	$ 0.93	$ 0.97	$ 1.33	$ 1.90	$ 2.81
Net interest margin	3.09 %	3.35 %	3.66 %	3.22 %	3.73 %
Return on average assets	0.96 %	1.04 %	1.52 %	1.00 %	1.61 %
Return on average equity	10.16 %	10.75 %	14.81 %	10.46 %	14.96 %
Efficiency ratio	69.20 %	67.49 %	57.95 %	68.35 %	55.70 %

Allowance for loan losses:
Balance, beginning of period	$ 4,421,505	$ 3,996,619	$ 4,004,074	$ 3,996,619	$ 3,998,392
Charge-offs:
One-to-four family	6,009	-	-	6,009	-
Commercial real estate	-	-	-	-	-
Land/land development	-	-	-	-	-
Commercial	-	-	-	-	-
Consumer	20,811	36,130	40,072	56,941	57,507
Gross charge-offs	26,820	36,130	40,072	62,950	57,507
Recoveries:
One-to-four family	-	-	974	-	1,929
Commercial real estate	-	-	113	-	331
Land/land development	-	-	-	-	-
Commercial	2,207	923	-	3,130	9,725
Consumer	21,554	20,093	17,105	41,647	29,324
Gross recoveries	23,761	21,016	18,192	44,777	41,309
Net charge-offs (recoveries)	3,059	15,114	21,880	18,173	16,198
CECL adjustment	-	350,000	-	350,000
Provision for loan losses	90,000	90,000	-	180,000	-
Balance, end of period	$ 4,508,446	$ 4,421,505	$ 3,982,194	$ 4,508,446	$ 3,982,194

Net loan charge-offs (recoveries) to average loans	0.00 %	0.02 %	0.03 %	0.01 %	0.01 %

	As of
	June 30,	March 31,	June 30,
Non-performing assets	2023	2023	2022
Loans:
Non-accrual	$ 6,302,505	$ 4,137,597	$ 2,248,220
Past 90 days or more and still accruing	-	-	-
Troubled debt restructured	525,020	525,020	475,210
Total non-performing loans	6,827,525	4,662,617	2,723,430
Real estate owned	-	-	-
Other repossessed assets	-	-	-
Total non-performing assets	$ 6,827,525	$ 4,662,617	$ 2,723,430

Non-performing assets to total assets	1.44 %	1.03 %	0.66 %
Non-performing loans to gross loans	1.94 %	1.41 %	0.93 %
Allowance for loan losses to non-performing loans	66.03 %	94.83 %	146.22 %
Allowance for loan losses to gross loans	1.28 %	1.34 %	1.37 %

Other financial ratios
Tangible common equity	9.29 %	9.69 %	10.17 %
Book value per share	$ 36.42	$ 36.02	$ 34.88
Common shares outstanding	1,212,835	1,216,335	1,205,135