InsCorp Reports Quarterly Profit Increase as Healthcare Brand Grows. Nashville-based Lender Resumes and Increases Dividend After Pandemic Pause

Rhea-AI Summary

InsCorp, parent of INSBANK (OTCQX: IBTN), reported Q1 earnings of $1.29 million ($0.44/share), a 60% increase from the previous quarter. Key factors include core loan growth, PPP income, and lower funding costs. Net interest income rose to $4.44 million, a 14% year-over-year increase. The board declared a semi-annual dividend of $0.12/share, payable June 11, 2021. Modified loans represent 12% of the portfolio, with significant deferments in impacted sectors. Non-performing assets increased to 1.9%. The bank maintains a strong capital position with a tier 1 capital ratio of 11.9%.

Positive

• Q1 earnings increased by 60% from the prior quarter, reaching $1.29 million.
• Net interest income rose to $4.44 million, a 14% increase year-over-year.
• Board declared a semi-annual dividend of $0.12/share after a previously suspended dividend.
• Efficiency ratio of 50.7% is better than the FDIC peer group average of 60.7%.
• Tangible book value grew by $0.41 to $17.69 due to retained earnings.

Negative

• Non-performing assets rose to 1.9%, compared to 0.68% a year earlier.
• Loan loss provision expense increased to $650,000, $350,000 higher than the prior year.

NASHVILLE, Tenn., May 7, 2021 /PRNewswire/ -- InsCorp, parent company to INSBANK (OTCQX: IBTN), today reported first quarter earnings of $1,290,000, or $0.44 per common share. This represents an increase of $482,000, or 60%, over the previous quarter, and a $557,000 increase over the same quarter the prior year. Factors contributing to the results included core loan growth; PPP loan fee income; decreased funding costs; and income recognized from interest rate hedges. "Our team members have been purposeful throughout the pandemic, allocating resources to pandemic-driven matters such as industry-specific credit challenges, PPP loans, and the Fed's zero interest rate policy, while concurrently executing innovation strategies in a rapidly-changing, technology-driven economy," said Jim Rieniets, President & CEO of INSBANK. "In the midst of the pandemic we launched our niche healthcare brand, Medquity, to promote a national presence for physician-focused lending programs that already serve clients in 15 states. Medquity offers a unique blend of industry expertise in commercial banking as well as web-driven products serving the needs of medical professionals," Rieniets continued.  Steady growth of the bank's diverse healthcare portfolio in recent years now accounts for 25% of all loans. 

Net interest income was $4,444,000 for the quarter, representing a 14 percent increase over the same period for prior year, while quarterly operating expenses of $2,729,0000 were just 2% higher than those of the prior year. Loan loss provision expense was $650,000, which was $350,000 higher than the prior year period. "Our team's depth of knowledge of our borrowers and diligence in monitoring our loan portfolio during the pandemic finds us cautiously optimistic that our loan loss reserves will provide a sufficient buffer against anticipated losses," said Jim Rieniets. "Now a year into the pandemic we expect losses in just a few credits, for which there is little concentration within a particular industry. In general, most of our affected borrowers have navigated adversity and are reporting revenue gains this spring."    

Additionally, InsCorp's board of directors recently voted to distribute a semi-annual dividend of $0.12 per share, after having suspended dividend payments during 2020. "A year ago we felt the prudent course of action was to preserve capital given the level of uncertainty surrounding the pandemic, said Michael Qualls, Chairman of InsCorp. "Recent months, however, have provided greater clarity both for our company and the industry and we're pleased to restore and increase our dividend based on current and projected operations," Qualls continued. InsCorp's dividend will be distributed on June 11^th, 2021 and payable to shareholders of record as of May 21^st, 2021.

Highlights of the quarter included:

• Modified loans, due to the pandemic, represent 12% of the loan portfolio at March 31, 2021, with 50% being on payment deferral and 50% interest only. Total deferments are $69 million.
• Payment deferrals are primarily in the restaurant, bar and tour/coach services industries, while the interest only modifications were in the hospitality and tour/coach services industries. 76% of total deferments were secured by real estate.
• Loans generated through the government's SBA-PPP program Round 2 totaled $16.8 million through March 31, 2021.
• Deferred loan fees related to the PPP loans is approximately $930,000 at March 31, 2021.
• Non-performing assets to total loans and OREO were 1.9% at March 31, 2021, compared to 0.68% at March 31, 2020.
• Yield on loans was 4.19% for the three months ended March 31, 2021 compared to 4.88% for the same period in 2020.
• Cost of all interest-bearing funding was 1.05% for the three months ended March 31, 2021 decreasing from 1.93% for the same period in 2020.
• Efficiency ratio was 50.7% at March 31, 2021, comparing favorably to the bank's FDIC peer group average of 60.7%.
• Non-Interest Expense to Total Assets was 1.70% for the three months ended March 31, 2021, slightly lower than 1.85% for the same period in 2020 and compared favorably to the bank's FDIC peer group average of 2.42%.
• Assets per employee remained strong at $13.22 million, compared to the FDIC peer group of $6.59 million.
• The allowance for loan and lease losses was 1.38%, slightly higher than the bank's FDIC peer group average of 1.37%.
• Annualized return on tangible common equity for the first quarter was 10.03%
• Tangible book value increased $0.41 to $17.69 during the quarter primarily by virtue of retained earnings.
• The bank's tier 1 capital ratio was 11.9%, while total risk-based capital was 13.2%.

About INSBANK 

Since 2000, INSBANK has offered its clients highly personalized service provided by experienced relationship managers, while positioning itself as an innovator, utilizing technologies to deliver those services efficiently and conveniently.  In addition to its commercial focused operation, INSBANK operates three divisions, Medquity, TMA Medical Banking and INSBANK Online.  Medquity offers healthcare banking solutions to individuals nationwide, whether they are still in residency, practicing or entering retirement, while TMA Medical Banking provides banking services specifically to members of the Tennessee Medical Association. INSBANK Online offers nationally available virtual private client services for interest bearing deposits.  INSBANK is owned by InsCorp, Inc., a Tennessee bank holding company. The bank is headquartered in Nashville at 2106 Crestmoor Road, and has an office in Brentwood at 5614 Franklin Pike Circle. For more information, please visit www.insbanktn.com

 

InsCorp, Inc.
Consolidated Balance Sheets
(000's)
(unaudited)
		March 31,		December 31,		March 31,
		2021		2020		2020
Assets
Cash and Cash Equivalents		$                            15,561		$                                8,219		$                              2,521
Interest Bearing Deposits		32,268		33,356		38,209
Securities		12,747		17,039		25,402
Loans		543,178		525,235		464,736
Allowance for Loan Losses		(7,515)		(7,365)		(5,680)
Net Loans		535,663		517,870		459,056
Premises and Equipment, net		13,519		13,630		13,894
Bank Owned Life Insurance		10,176		10,115		9,927
Restricted Equity Securities		8,147		7,612		6,119
Goodwill and Related Intangibles, net		1,091		1,091		1,091
Other Assets		7,549		8,298		6,721
Total Assets		$                          636,721		$                           617,230		$                          562,940
Liabilities and Shareholders' Equity
Liabilities
Deposits
	Non-interest-bearing	$                            72,858		$                             52,665		$                            42,576
	Interest-bearing	432,295		417,731		399,199
	Total Deposits	505,153		470,396		441,775
Federal Home Loan Bank Advances		45,000		50,000		51,000
Paycheck Protection Program Liquidity Fund		15,485		18,412		-
Subordinated Debentures		15,000		15,000		15,000
Federal Funds Purchased		-		7,000		-
Other Liabilities		3,117		5,328		5,475
Total Liabilities		583,755		566,136		513,250
Shareholders' Equity
	Common Stock	31,325		31,190		30,773
	Treasury Stock	(681)		(681)
	Accumulated Retained Earnings	21,652		20,377		18,677
	Accumulated Other Comprehensive Income	670		208		240
	Total Stockholders' Equity	52,966		51,094		49,690
Total Liabilities & Shareholders' Equity		$                          636,721		$                           617,230		$                          562,940
Tangible Book Value		$                              17.69		$                                17.28		$                              16.64
InsCorp, Inc.
Consolidated Statements of Income
(000's)
(Unaudited)
		Three Months Ended		Twelve Months Ended		Three Months Ended
		March 31, 2021		December 31, 2020		March 31, 2020
Interest Income		$                      5,876		$                             22,694		$                              6,018
Interest Expense		1,431		7,221		2,125
Net Interest Income		4,445		15,473		3,893
Provision for Loan Losses		650		2,400		300
Non-Interest Income
	Service Charges on Deposit Accounts	59		212		56
	Bank Owned Life Insurance	60		251		62
	Gain on Interest Rate Hedges and Security Sales	505		-		-
	Other	237		705		175
Non-Interest Expense
	Salaries and Benefits	1,654		6,200		1,629
	Occupancy and equipment	325		1,233		295
	Data Processing	147		553		138
	Marketing and Advertising	100		349		91
	Other	503		1,843		513
Net income from Operations		1,927		4,063		1,220
Interest Expense-Subordinated Debt		239		956		239
Income Before Income Taxes		1,688		3,107		981
Income Tax Expense		(398)		(674)		(248)
Net Income		$                              1,290		$                                2,433		$                                  733
Return on Weighted Average Common Shares		$                                 0.44		$                                  0.83		$                                 0.25

 

 

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SOURCE INSBANK

FAQ

What were InsCorp's Q1 earnings results for 2021?

InsCorp reported Q1 earnings of $1.29 million, or $0.44 per common share.

When will InsCorp pay its next dividend?

InsCorp's semi-annual dividend of $0.12 per share will be paid on June 11, 2021.

What is the current status of InsCorp's loan portfolio?

As of March 31, 2021, modified loans accounted for 12% of the portfolio, with significant deferments mainly in restaurants and hospitality.

How has InsCorp's net interest income changed?

Net interest income for Q1 2021 increased by 14% year-over-year, reaching $4.44 million.

What is InsCorp's tier 1 capital ratio?

InsCorp's tier 1 capital ratio stood at 11.9%.