Northeast Indiana Bancorp, Inc. Announces Third Quarter Earnings

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Oct 18, 2012, 12:55 ET

HUNTINGTON, Ind., Oct. 18, 2012 /PRNewswire/ -- Northeast Indiana Bancorp, Inc. (OTCQB: NIDB), the parent company of First Federal Savings Bank, today announced net income of $594,000 ($0.48 per diluted common share) for the Company's third quarter ended September 30, 2012 compared to net income of $631,000 ($0.51 per diluted common share) for the third quarter ended September 30, 2011. The current three months earnings equates to an annualized return on average assets (ROA) of 0.86% and a return on average equity (ROE) of 8.65% compared to an annualized ROA of 0.98% and an ROE of 9.97% for the three months ended September 30, 2011.

Net interest income decreased by $84,000 to $2.2 million for the quarter ended September 30, 2012 when compared to $2.3 million for the quarter ended September 30, 2011. The Company's net interest margin decreased by thirty nine basis points to 3.46% for the current quarter compared to 3.85% in the year earlier quarter. On a linked quarter basis, the Company's 3.46% net interest margin was twenty-two basis points lower compared to the 3.68% net interest margin reported for the quarter ended June 30, 2012.

The Company made a $400,000 provision for loan loss during the quarter ended September 30, 2012 compared to a $375,000 provision for loan loss for the quarter ended September 30, 2011. 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 Company experienced an increase in net charge-offs to $255,000 for the quarter ended September 30, 2012 compared to net charge-offs of $123,000 for the quarter ended September 30, 2011. In addition, total non-performing assets increased $1.8 million to $11.0 million at September 30, 2012 compared to $9.2 million at June 30, 2012.

Noninterest income decreased to $628,000 for the third quarter ended September 30, 2012 compared to $727,000 during the quarter ended September 30, 2011. The decrease is mostly due to gains on security sales taken in the prior year quarterly period of $158,000 compared to no gains on security sales during the current quarterly period. This decline was partially offset by increased gains on sale of loans and decreased losses on sale of repossessed assets between quarterly periods.

Noninterest expense decreased $147,000 to $1.7 million for the quarter ended September 30, 2012 when compared to $1.8 million for the quarter ended September 30, 2011. This decrease was due to a reduction in employee benefits from a $90,000 non-recurring payment into the bank's frozen defined benefit pension plan during the prior year quarterly period. In addition, management set up a $67,500 valuation allowance on three real estate owned parcels during the prior year quarterly period compared to no valuation allowances during the quarter ended September 30, 2012.

Net income for the nine months ended September 30, 2012 increased to $1.94 million ($1.57 per diluted common share) compared to net income of $1.29 million ($1.05 per diluted common share) for the nine months ended September 30, 2011. Net interest income increased $107,000 to $6.80 million for the nine months ended September 30, 2012 compared to $6.69 million for the prior year nine month period. The Company made a $1.00 million provision for loan loss for the nine months ended September 30, 2012 compared to a $1.93 million provision for loan loss for the nine months ended September 30, 2011. Noninterest income increased slightly to $1.97 million for the nine months ended September 30, 2012 compared to $1.92 million for September 30, 2011. Noninterest expense was relatively unchanged at $5.14 million for the nine months ended September 30, 2012 compared to $5.15 million for the nine months ended September 30, 2011.

Total assets increased $18.38 million or 7.07% to $279.90 million at September 30, 2012 compared to December 31, 2011 assets of $261.52 million. Net loans decreased $12.68 million to $164.21 million at September 30, 2012 compared to $176.89 million at December 31, 2011. Total securities increased $19.62 million or 35.3% to $75.22 million at September 30, 2012 compared to $55.60 million at December 31, 2011. Total deposits increased sharply by $25.56 million or 13.5% to $215.40 million at September 30, 2012 from $189.84 million at December 31, 2011. The 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 $8.78 million or 20.4% to $34.18 million at September 30, 2012 compared to $42.96 million at December 31, 2011.

Shareholder's equity at September 30, 2012 was $27.61 million compared to $26.15 million at December 31, 2011. The book value of NEIB's stock was $22.27 per common share as of September 30, 2012. The number of outstanding common shares was 1,239,946. The last reported trade of the stock on October 15, 2012 was $16.5 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*					September 30, 2012				December 31, 2011
Interest-earning cash and cash equivalents					$	21,651,661			$		11,598,753
Noninterest earning cash and cash equivalents					2,592,594				2,495,578
Total cash and cash equivalents					24,244,255				14,094,331
Securities available for sale					71,925,795				55,117,994
Securities held to maturity					3,298,790				482,807
Loans held for sale					231,750				42,500
Loans receivable, net of allowance for loan loss September 30, 2012 $3,865,907 and December 31, 2011 $4,061,508					164,209,440				176,893,452
Accrued interest receivable					967,790				980,464
Premises and equipment					3,023,182				2,691,780
Investments in limited liability partnerships					94,422				153,813
Cash surrender value of life insurance					7,203,131				7,016,493
Other assets					4,703,958				4,050,116
*Total Assets*					$	279,902,513			$		261,523,750
*LIABILITIES AND STOCKHOLDERS' EQUITY*
Non-interest bearing deposits					22,060,540				14,847,250
Interest bearing deposits					193,335,503				174,988,658
Borrowed Funds					34,178,152				42,955,096
Accrued interest payable and other liabilities					2,713,573				2,587,575
*Total Liabilities*					252,287,768				235,378,579

Retained earnings – substantially restricted					27,614,745				26,145,171
*Total Liabilities and Shareholders' Equity*					$	279,902,513			$			261,523,750

CONSOLIDATED STATEMENTS OF INCOME

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2012		2011		2012			2011
Total interest income	$	2,741,592	$	3,048,865	$		8,497,766	$		9,133,501
Total interest expense		521,996		744,798			1,698,169			2,441,124
Net interest income	$	2,219,596	$	2,304,067	$		6,799,597	$		6,692,377
Provision for loan losses		400,000		375,000			1,000,000			1,925,000
Net interest income after provision for loan losses	$	1,819,596	$	1,929,067	$		5,799,597	$		4,767,377
Service charges on deposit accounts		123,235		160,060			393,699			450,048
Net gain on sale of securities		-		158,362			-			272,542
Net gain on sale of loans		224,275		187,863			691,945			441,949
Net (loss) on sale of repossessed assets		(47,289)		(103,607)			(85,476)			(204,902)
Brokerage fees		95,673		113,033			317,238			303,190
Increase in cash surrender value of life insurance		62,213		62,138			186,638			189,141
Other income		170,688		149,236			467,162			466,368
Total noninterest income	$	628,795	$	727,085	$		1,971,206	$		1,918,336
Salaries and employee benefits		865,730		925,219			2,645,954			2,634,326
Occupancy		237,524		235,265			709,296			706,614
Data processing		180,675		186,320			619,927			578,892
Deposit insurance premiums		60,000		31,000			180,000			194,000
Professional fees		79,132		102,255			277,882			289,097
Correspondent bank charges		28,462		33,662			88,543			100,989
Valuation allowances – repossessed assets		-		67,500			-			67,500
Other expense		208,897		226,598			614,912			577,585
Total noninterest expenses	$	1,660,420	$	1,807,819	$		5,136,514	$		5,149,003
Income before income tax expense	$	787,971	$	848,333	$		2,634,289	$		1,536,710
Income tax expense		194,236		217,564			691,010			243,324
Net Income	$	593,735	$	630,769	$		1,943,279	$		1,293,386

	Three Months Ended September 30,							Nine Months Ended September 30,
	2012				2011			2012		2011
Basic Earnings per common share	0.48				0.51			1.57		1.05
Dilutive Earnings per share	0.48				0.51			1.57		1.05
Net interest margin	3.46%				3.85%			3.65%		3.72%
Return on average assets	0.86%				0.98%			0.97%		0.67%
Return on average equity	8.65%				9.97%			9.46%		6.99%
Efficiency ratio	58.29%				59.64%			58.56%		59.80%
Average shares outstanding- primary	1,234,380				1,232,303			1,234,211		1,231,717
Average shares outstanding- diluted	1,234,410				1,237,507			1,234,417		1,232,584
Allowance for loan losses:
Balance at beginning of period	$		3,721,360		$	3,608,088		$	4,061,508	$	3,227,844
Charge-offs:
One-to-four family	32,767				124,116			131,055		454,569
Commercial real estate	136,360				15,138			181,926		304,479
Land/land development	-				-			653,451		284,961
Commercial	-				-			176,345		124,292
Consumer	109,845				-			139,107		160,945
Gross charge-offs	278,972				141,297			1,281,884		1,329,246
Recoveries:
One-to-four family	2,226				975			8,835		2,425
Commercial real estate	-				-			-		-
Land/land development	-				-			-		-
Commercial	1,238				-			1,233		-
Consumer	20,060				17,093			76,215		33,836
Gross recoveries	23,519				18,068			86,283		36,261
Net charge-offs	255,453				123,299			1,195,601		1,292,985
Additions charged to operations	400,000				375,000			1,000,000		1,925,000
Balance at end of period	$		3,865,907		$	3,859,859		$	3,865,907	$	3,859,859

Net loan charge-offs to average loans (1)	0.59%				0.27%			0.91%		0.94%

Nonperforming assets (000's)	At September 30,				At June 30,			At March 30,		At December 31,
Loans:	2012				2012			2012		2011
Non-accrual	$		6,518		$	5,333		$	4,066	$	7,474
Past 90 days or more and still accruing	-				-			-		-
Troubled debt restructured	2,022				1,329			1,419		1,213
Total nonperforming loans	8,540				6,662			5,485		8,687
Real estate owned	2,419				2,554			3,162		1,242
Other repossessed assets	14				-			10		-
Total nonperforming assets	$		10,973		$	9,216		$	8,657	$	9,929


Nonperforming assets to total assets			3.92%			3.39%		3.29%		3.85%
Nonperforming loans to total loans			5.08%			3.93%		3.12%		4.80%
Allowance for loan losses to nonperforming loans			45.27%			55.85%		62.73%		46.76%
Allowance for loan losses to net loans receivable			2.35%			2.24%		2.00%		2.30%


	At September 30,
	2012				2011

Stockholders' equity as a % of total assets				9.87%			9.87%
Book value per share	$	22.27			$	20.62
Common shares outstanding- EOP				1,239,946			1,239,946

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