Northeast Indiana Bancorp, Inc. Announces Second Quarter Earnings

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Jul 18, 2012, 09:30 ET

HUNTINGTON, Ind., July 18, 2012 /PRNewswire/ -- Northeast Indiana Bancorp, Inc. (OTCQB: NIDB), the parent company of First Federal Savings Bank, today announced net income of $656,000 ($0.53 per diluted common share) for the Company's second quarter ended June 30, 2012 compared to net income of $677,000 ($0.55 per diluted common share) for the second quarter ended June 30, 2011. The current three months earnings equates to an annualized return on average assets (ROA) of 0.98% and a return on average equity (ROE) of 9.76% compared to an annualized ROA of 1.05% and an ROE of 11.05% for the three months ended June 30, 2011.

Net interest income increased by $38,000 to $2.3 million for the quarter ended June 30, 2012 when compared to $2.2 million for the quarter ended June 30, 2011. The Company's net interest margin decreased by six basis points to 3.68% for the current quarter compared to 3.74% in the year earlier quarter. Sequentially, the current quarter's 3.68% net interest margin was also a twelve basis point decline over the quarter ended March 31, 2012 net interest margin of 3.80%.

The Company made a $300,000 provision for loan loss during the quarter ended June 30, 2012 compared to a $350,000 provision for loan loss for the quarter ended June 30, 2011. Management continues to feel it is prudent to maintain or increase the allowance for loan losses by setting aside provisions for loan losses at high levels during these uncertain economic conditions. The bank recorded net charge-offs of $20,000 for the quarter ended June 30, 2012 compared to net charge-offs of $432,000 for the quarter ended June 30, 2011.

Noninterest income decreased by $58,000 to $659,000 during the quarter ended June 30, 2012 when compared to $717,000 in the same quarterly period a year ago. This was due to net gains on sale of securities of $114,000 during the prior quarterly period compared against no security gains in the current quarter. This quarterly decline was partially offset by an increase of $40,000 in net gains on sale of loans between quarterly periods.

Noninterest expense increased by $52,000 but was relatively unchanged at $1.7 million for the quarter ended June 30, 2012 and for the quarter ended June 30, 2011. Increases in salaries/benefits and data processing were partially offset by a decrease to deposit insurance premiums and professional fees. The Company's efficiency ratio continues to be well managed at 59.5% for the three months ended June 30, 2012 compared to 57.4% for the three months ended June 30, 2011.

Net income for the six months ended June 30, 2012 increased significantly by $687,000 or 104% to $1.3 million ($1.09 per diluted common share) compared to net income of $663,000 ($0.54 per diluted common share) for the six months ended June 30, 2011. The sharp increase in net income is primarily due to a decrease in loan loss provisions of $950,000 and to a lesser extent, increased noninterest income between six month periods. Management elected to take higher provision levels during the six months ended June 30, 2011 to bolster the allowance for loan losses due to continued weak real estate markets in which we do business at that time.

Noninterest income increased $151,000 or 12.7% to $1.3 million for the six months ended June 30, 2012 compared to $1.2 million for the six months ended June 30, 2011 primarily due to increased gains on sale of loans during the current six month period. Noninterest expense increased $135,000 or 4.0% during the same time frame due mostly to increases in salaries/benefits, other expense and data processing expense as the bank transitioned through a core data processing conversion and we opened our sixth overall full-service branch and second location in Fort Wayne, Indiana during the six months ended June 30, 2012.

Total assets increased $10.0 million or 3.8% to $271.5 million at June 30, 2012 compared to December 31, 2011 assets of $261.5 million. Net loans decreased $11.1 million to $165.8 million at June 30, 2012 compared to $176.9 million at December 31, 2011 as weak loan demand continues to persist. Total deposits increased by $13.9 million or 7.3% to $203.7 million at June 30, 2012 from $189.8 million at December 31, 2011. The increase in total deposits came in NOW, Noninterest Bearing DDA, MMDA and Savings balances through First Federal's full service branches. These newly acquired lower-costing deposits were utilized to pay off maturing brokered time deposits and wholesale borrowed funds. Borrowed funds declined $4.6 million or 10.7% to $38.4 million at June 30, 2012 compared to $43.0 million at December 31, 2011.

Shareholder's equity increased to $27.2 million at June 30, 2012 compared to $26.1 million at December 31, 2011. The book value of NIDB's stock was $21.90 per common share as of June 30, 2012. The number of outstanding common shares was 1,239,946 as of the same date. The last reported trade of the stock on July 16, 2012 was $15.90 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 five full-service Indiana offices in Huntington (2), Warsaw 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.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*	June 30, 2012		December 31, 2011
Interest-earning cash and cash equivalents	$	19,284,775	$	11,598,753
Noninterest earning cash and cash equivalents	3,708,619		2,495,578
Total cash and cash equivalents	22,993,394		14,094,331
Securities available for sale	66,010,510		55,117,994
Securities held to maturity	351,016		482,807
Loans held for sale	191,467		42,500
Loans receivable, net of allowance for loan loss June 30, 2012 $3,721,360 and December 31, 2011 $4,061,508	165,835,221		176,893,452
Accrued interest receivable	928,237		980,464
Premises and equipment	2,975,947		2,691,780
Investments in limited liability partnerships	114,219		153,813
Cash surrender value of life insurance	7,140,918		7,016,493
Other assets	5,015,090		4,050,116
*Total Assets*	$	271,556,019	$		261,523,750
*LIABILITIES AND STOCKHOLDERS' EQUITY*
Non-interest bearing deposits	16,897,100		14,847,250
Interest bearing deposits	186,818,595		174,988,658
Borrowed Funds	38,366,217		42,955,096
Accrued interest payable and other liabilities	2,320,800		2,587,575
*Total Liabilities*	244,402,712		235,378,579

Retained earnings – substantially restricted	27,153,307		26,145,171
*Total Liabilities and Shareholder's Equity*	$	271,556,019	$		261,523,750


CONSOLIDATED STATEMENTS OF INCOME

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2012		2011		2012		2011
Total interest income	$	2,832,239	$	3,054,984	$	5,756,176	$	6,084,635
Total interest expense		551,083		811,963		1,176,172		1,696,326
Net interest income	$	2,281,156	$	2,243,021	$	4,580,004	$	4,388,309
Provision for loan losses		300,000		350,000		600,000		1,550,000
Net interest income after provision for loan losses	$	1,981,156	$	1,893,021	$	3,980,004	$	2,838,309
Service charges on deposit accounts		132,286		154,307		270,465		289,989
Net gain on sale of securities		-		114,180		-		114,180
Net gain on sale of loans		232,078		192,274		467,670		254,086
Net loss on sale of repossessed assets		(14,564)		(51,795)		(38,188)		(101,921)
Brokerage fees		108,019		93,602		221,565		190,157
Increase in cash surrender value of life insurance		62,213		62,138		124,425		127,003
Other income		138,795		152,697		296,473		317,754
Total noninterest income	$	658,827	$	717,403	$	1,342,410	$	1,191,248
Salaries and employee benefits		905,464		859,351		1,780,223		1,709,110
Occupancy		235,613		245,581		471,772		471,347
Data processing		222,784		197,936		439,253		392,573
Deposit insurance premiums		60,000		79,000		120,000		163,000
Professional fees		87,005		109,643		198,750		186,841
Correspondent bank charges		29,659		34,977		60,080		67,327
Other expense		209,369		171,738		406,018		350,982
Total noninterest expenses	$	1,749,894	$	1,698,226	$	3,476,096	$	3,341,180
Income before income tax expenses	$	890,089	$	912,198	$	1,846,318	$	688,377
Income tax expense		234,253		235,419		496,774		25,760
Net Income	$	655,836	$	676,779	$	1,349,544	$	662,617

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012		2011
Basic Earnings per common share	0.53			0.55			1.09		0.54
Dilutive Earnings per share	0.53			0.55			1.09		0.54
Net interest margin	3.68%			3.74%			3.74%		3.66%
Return on average assets	0.98%			1.05%			1.02%		0.51%
Return on average equity	9.76%			11.05%			10.13%		5.44%
Efficiency ratio	59.52%			57.36%			58.69%		59.88%
Average shares outstanding - primary	1,234,380			1,231,675			1,234,125		1,231,419
Average shares outstanding - diluted	1,234,381			1,231,675			1,234,434		1,231,728

Allowance for loan losses:
Balance at beginning of period	$	3,440,919		$	3,690,382		$	4,061,508	$	3,227,844
Charge-offs:
One-to-four family	26,968			-			98,288		330,453
Commercial real estate	-			289,340			45,566		289,340
Land/land development	-			-			653,451		284,961
Commercial	-			77,705			176,345		124,292
Consumer	21,548			76,048			29,261		158,903
Gross charge-offs	48,516			443,093			1,002,911		1,187,949
Recoveries:
One-to-four family	5,260			650			6,609		1,450
Commercial real estate	-			-			-		-
Land/land development	-			-			-		-
Commercial	-			-			-		-
Consumer	23,697			10,149			56,164		16,743
Gross recoveries	28,957			10,799			62,763		18,193
Net charge-offs	19,559			432,294			940,148		1,169,756
Additions charged to operations	300,000			350,000			600,000		1,550,000
Balance at end of period	$	3,721,360		$	3,608,088		$	3,721,360	$	3,608,088

Net loan charge-offs to average loans (1)	0.04%			0.96%			1.06%		1.27%
Nonperforming assets (000's)	At June 30,			At March 31,			At December 31,
Loans:	2012			2012			2011
Non-accrual	$		5,333	$		4,066	$	7,474
Past 90 days or more and still accruing	-			-			-
Troubled debt restructured	1,329			1,419			1,213
Total nonperforming loans	6,662			5,485			8,687
Real estate owned	2,554			3,162			1,242
Other repossessed assets	-			10			-
Total nonperforming assets	$		9,216	$		8,657	$	9,929

Nonperforming assets to total assets	3.39%			3.29%			3.85%
Nonperforming loans to total loans	3.93%			3,12%			4.80%
Allowance for loan losses to nonperforming loans	55.85%			62.73%			46.76%
Allowance for loan losses to net loans receivable	2.24%			2.00%			2.30%

	At June 30,
	2012			2011
Stockholders' equity as a % of total assets	10.00%			9.76%
Book value per share	$		21.90	$	20.08
Common shares outstanding- EOP	1,239,946			1,239,946
(1) Ratios for the three-month periods are annualized.