Northeast Indiana Bancorp, Inc. Announces Second Quarter Earnings

HUNTINGTON, Ind., July 13 /PRNewswire-FirstCall/ -- Northeast Indiana Bancorp, Inc. (OTC Bulletin Board: NIDB), the parent company of First Federal Savings Bank, today announced net income of $491,000 ($0.40 per diluted common share) for the Company's second quarter ended June 30, 2010 compared to net income of $476,000 ($0.39 per diluted common share) for the second quarter ended June 30, 2009.  The current three months earnings equates to an annualized return on average assets (ROA) of 0.76% and a return on average equity (ROE) of 8.38% compared to an annualized ROA of 0.77% and an ROE of 8.61% for the months ended June 30, 2009.  

Net interest income increased by $138,000 or 6.9% to $2.1 million for the quarter ended June 30, 2010 when compared to $2.0 million for the quarter ended June 30, 2009.  The Company's net interest margin increased by twelve basis points to 3.55% for the current quarter compared to 3.43% in the year earlier quarter.  Sequentially, the current quarter's 3.55% net interest margin was also a seven basis point improvement over the quarter ended March 31, 2010 net interest margin of 3.48%.

The Company made a $500,000 provision for loan loss during the quarter ended June 30, 2010 compared to a $300,000 provision for loan loss for the quarter ended June 30, 2009.   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 $452,000 for the quarter ended June 30, 2010 compared to net charge-offs of $25,000 for the quarter ended June 30, 2009.  

Noninterest income increased by $73,000 or 11.6% to $701,000 during the quarter ended June 30, 2010 when compared to $628,000 in the same quarterly period a year ago.  This was primarily due to an increase in brokerage fees from improving asset values in wealth management as well as a reduction in net losses on sale of securities.    

Noninterest expense increased by $34,000 to $1.7 million for the current quarter compared with $1.6 million for the quarter ended June 30, 2009.   Increases in salaries/benefits and occupancy were due to our new Fort Wayne branch office that opened September 2009.  Legal expenses were higher due to increased collection efforts during the current period.  These increases were largely offset by a sharp reduction in FDIC premiums by $104,000.  The quarter ended June 30, 2009 contained an FDIC Special Assessment levied on all FDIC-insured financial institutions of $115,000.  The Company's efficiency ratio improved to 58.5% for the current three month period compared to 61.9% in the prior year three month period.

Net income for the six months ended June 30, 2010 decreased to $944,000 ($0.76 per diluted common share) compared to net income of $1.0 million ($0.82 per diluted common share) for the six months ended June 30, 2009.  The decrease in net income between six month periods is primarily due to an increase in loan loss provisions of $275,000 between six month periods, as well as a sharp reduction of $184,000 in net gain on sale of loans due to significantly reduced mortgage refinance volumes.  

These items were partially offset by increased net interest income of $165,000, reduced FDIC premiums of $87,000 and a lower effective tax rate for the current six month period due to the implementation of a Nevada Investment Subsidiary/REIT during the fourth quarter of 2009.  

Total assets increased $5.5 million to $258.2 million at June 30, 2010 compared to December 31, 2009 assets of $252.7 million.  Net loans decreased $1.2 million to $190.0 million at June 30, 2010 compared to $191.2 million at December 31, 2009.  Total deposits increased sharply by $17.3 million to $171.9 million at June 30, 2010 from $154.6 million at December 31, 2009.  The significant increase in total deposits came in non-interest bearing DDA, 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 $13.2 million or 18.1% to $59.9 million June 30, 2010 compared to $73.1 million at December 31, 2009.  

Shareholder's equity increased to $23.7 million at June 30, 2010 compared to $23.0 million at December 31, 2009.  The book value of NIDB's stock was $19.11 per common share as of June 30, 2010.  The number of outstanding common shares was 1,239,946 as of the same date.  The last reported trade of the stock on July 9, 2010 was $10.89 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.