Northeast Indiana Bancorp, Inc. Announces Third Quarter Earnings

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Oct 15, 2010, 11:29 ET

HUNTINGTON, Ind., Oct. 15 /PRNewswire-FirstCall/ -- Northeast Indiana Bancorp, Inc. (OTC Bulletin Board: NIDB), the parent company of First Federal Savings Bank, today announced net income of $539,000 ($0.44 per diluted common share) for the Company's third quarter ended September 30, 2010 compared to net income of $518,000 ($0.42 per diluted common share) for the third quarter ended September 30, 2009. The current three months earnings equates to an annualized return on average assets (ROA) of 0.83% and a return on average equity (ROE) of 9.02% compared to an annualized ROA of 0.82% and an ROE of 9.20% for the three months ended September 30, 2009.

Net interest income increased by $82,000 or 3.9% to $2.2 million for the quarter ended September 30, 2010 when compared to $2.1 million for the quarter ended September 30, 2009. The Company's net interest margin increased by two basis points to 3.55% for the current quarter compared to 3.53% in the year earlier quarter. On a linked quarter basis, the Company's 3.55% net interest margin was unchanged compared to the quarter ended June 30, 2010 net interest margin.

The Company made a $500,000 provision for loan loss during the quarter ended September 30, 2010 compared to a $350,000 provision for loan loss for the quarter ended September 30, 2009. 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 weak economic conditions. The Company experienced net charge-offs of $515,000 for the quarter ended September 30, 2010 compared to net charge-offs of $89,000 for the quarter ended September 30, 2009.

Noninterest income increased slightly to $689,000 for the third quarter ended September 30, 2010 compared to $669,000 during the quarter ended September 30, 2009. The modest increase is mostly due to a decrease in net losses on the sale of repossessed assets of roughly $35,000 between quarterly periods.

Noninterest expense was relatively unchanged at $1.6 million for the quarters ended September 30, 2010 and September 30, 2009. Increases in salaries and employee benefits were offset by declines in occupancy, professional fees and other expenses.

Net income for the nine months ended September 30, 2010 decreased slightly to $1.48 million ($1.21 per diluted common share) compared to net income of $1.53 million ($1.24 per diluted common share) for the nine months ended September 30, 2009.

Net interest income increased $247,000 or 3.9% to $6.34 million for the nine months ended September 30, 2010 compared to $6.09 million for the prior year nine month period. Noninterest income was relatively unchanged at $1.87 million for both nine month periods. Noninterest expense was $108,000 higher for the nine months ended September 30, 2010 compared to the nine months ended September 30, 2009. Increases in salaries and employee benefits between nine month periods were mostly due to the opening of our Fort Wayne full service branch during the third quarter of 2009. These increases were partially offset by decreases in deposit insurance premiums and other expenses.

Total assets increased $7.86 million or 3.1% to $260.58 million at September 30, 2010 compared to December 31, 2009 assets of $252.72 million. Net loans decreased $3.45 million to $187.82 million at September 30, 2010 compared to $191.27 million at December 31, 2009. Total deposits increased sharply by $22.42 million or 14.5% to $177.05 million at September 30, 2010 from $154.63 million at December 31, 2009. The significant increase in total deposits came in noninterest 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 decreased $16.23 million or 22.2% to $56.83 million at September 30, 2010 compared to $73.06 million at December 31, 2009.

Shareholder's equity at September 30, 2010 was $24.27 million compared to $22.96 million at December 31, 2009. The book value of NEIB's stock was $19.58 per common share as of September 30, 2010. The number of outstanding common shares was 1,239,946. The last reported trade of the stock on October 13, 2010 was $10.75 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.

NORTHEAST INDIANA BANCORP CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION

*ASSETS*	September 30, 2010		December 31, 2009
Interest-earning cash and cash equivalents	$	9,824,412	$	10,929,272
Noninterest earning cash and cash equivalents	2,305,206		2,473,235
Total cash and cash equivalents	12,129,618		13,402,507
Securities available for sale	45,332,202		33,025,298
Securities held to maturity	400,000		550,000
Loans held for sale	460,000		53,200
Loans receivable, net of allowance for loan loss September 30, 2010 $2,823,116 and December 31, 2009 $2,868,468	187,819,947		191,267,218
Accrued interest receivable	1,048,063		1,040,528
Premises and equipment	2,092,115		2,158,406
Investments in limited liability partnerships	252,798		317,643
Cash surrender value of life insurance	6,702,509		6,514,390
Other assets	4,344,203		4,395,150
*Total Assets*	$	260,581,455	$	252,724,340
*LIABILITIES AND STOCKHOLDERS' EQUITY*
Non-interest bearing deposits	12,136,512		11,065,663
Interest bearing deposits	164,915,548		143,563,858
Borrowed Funds	56,831,370		73,064,228
Accrued interest payable and other liabilities	2,424,227		2,065,832
*Total Liabilities*	236,307,657		2,229,759,581

Retained earnings – substantially restricted	24,273,798		22,964,759
*Total Liabilities and Shareholders' Equity*	$	260,581,455	$		252,724,340


CONSOLIDATED STATEMENTS OF INCOME

			Three Months Ended					Nine Months Ended
			September 30,					September 30,
	2010			2009		2010			2009
Total interest income	$	3,248,075		$	3,462,834	$	9,691,357		$	10,446,720
Total interest expense		1,072,797			1,369,172		3,349,686			4,351,652
Net interest income	$	2,175,278		$	2,093,662	$	6,341,671		$	6,095,068
Provision for loan losses		500,000			350,000		1,350,000			925,000
Net interest income after provision for loan losses	$	1,675,278		$	1,743,662	$	4,991,671		$	5,170,068
Service charges on deposit accounts		172,027			188,516		515,344			519,706
Net (loss) on sale of securities		(29,412)			(37,346)		(69,259)			(84,135)
Other than temporary impairment-securities		-			-		-			-
Net gain on sale of loans		235,142			232,774		480,709			662,010
Net (loss) on sale of repossessed assets		(742)			(35,711)		(54,083)			(126,656)
Brokerage fees		87,169			77,279		304,914			215,690
Increase in cash surrender value of life insurance		61,481			61,626		188,119			189,499
Other income		161,171			181,964		510,238			493,521
Total noninterest income	$	686,836		$	669,102	$	1,875,982		$	1,869,635
Salaries and employee benefits		848,710			817,746		2,553,739			2,314,347
Occupancy		226,371			234,574		654,757			629,670
Data processing		188,722			181,915		566,441			566,629
Deposit insurance premiums		84,000			90,000		233,400			326,000
Professional fees		77,412			89,276		221,122			202,156
Correspondent bank charges		32,319			28,729		92,867			91,448
Valuation allowances – repossessed assets		-			-		-			-
Other expense		174,785			204,388		560,359			644,631
Total noninterest expenses	$	1,632,319		$	1,646,628	$	4,882,685		$	4,774,881
Income before income tax expense	$	729,795		$	766,136	$	1,984,968		$	2,264,822
Income tax expense		190,325			248,048		502,430			737,567
Net Income	$	539,470		$	518,088	$	1,482,538		$	1,527,255

NORTHEAST INDIANA BANCORP CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

			Three Months Ended September 30,						Nine Months Ended September 30,
	2010				2009		2010			2009
Basic Earnings per common share	0.44				0.42		1.21			1.24
Dilutive Earnings per share	0.44				0.42		1.21			1.24
Net interest margin	3.55%				3.53%		3.53%			3.45%
Return on average assets	0.83%				0.82%		0.77%			0.81%
Return on average equity	9.02%				9.20%		8.42%			9.17%
Efficiency ratio	57.03%				59.60		59.42%			59.95%
Average shares outstanding- primary	1,229,589				1,228,539		1,229,235			1,228,060
Average shares outstanding- diluted	1,229,872				1,228,615		1,229,919			1,228,780
Allowance for loan losses:
Balance at beginning of period	$	2,838,360			$	2,161,415	$	2,868,468		$	1,750,605
Charge-offs:
One-to-four family	213,145				9,695		312,504			203,962
Commercial real estate	174,286				-		302,368			-
Commercial	126,046				59,834		801,106			74,192
Consumer	21,933				26,493		31,286			144,030
Gross charge-offs	535,410				96,022		1,447,264			422,184
Recoveries:
One-to-four family	975				625		2,925			1,755
Commercial real estate	455				-		455			-
Commercial	6,791				-		6,791			136,635
Consumer	11,945				6,856		41,742			31,063
Gross recoveries	20,166				7,481		51,912			169,453
Net charge-offs	515,244				88,541		1,395,352			252,731
Additions charged to operations	500,000				350,000		1,350,000			925,000
Balance at end of period	$	2,823,116			$	2,422,874	$	2,823,116		$	2,422,874

Net loan charge-offs to average loans (1)	1.06%				0.18%		0.95%			0.17%

Nonperforming assets (000's)	At September 30,				At September 30,		At June 30,			At December 31,
Loans:	2010				2009		2010			2009
Non-accrual	$	6,246			$	2,251	$	4,552		$	2,826
Past 90 days or more and still accruing	-				-		-			-
Troubled debt restructured	708				3,000		621			3,008
Total nonperforming loans	6,954				5,251		5,173			5,834
Real estate owned	1,487				1,556		1,058			934
Other repossessed assets	19				7		6			11
Total nonperforming assets	$	8,460			$	6,814	$	6,237		$	6,779

Nonperforming assets to total assets	3.28%			2.75%			2.42%			2.68%
Nonperforming loans to total loans	3.65%			2.63%			2.68%			3.01%
Allowance for loan losses to nonperforming loans	40.59%			46.14%			54.86%			49.16%
Allowance for loan losses to net loans receivable	1.48%			1.21%			1.49%			1.50%


		At September 30,
	2010			2009

Stockholders' equity as a % of total assets	9.32%			9.25%
Book value per share	$		19.58	$	18.60
Common shares outstanding- EOP	1,239,946			1,230,670

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