INSBANK Parent InsCorp Reports Annual Profits

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InsCorp (IBTN) reported a net profit of $2,267,000, or $0.79 per share, in the fourth quarter of 2023 compared to respective levels of $2,319,000 and $0.80 for the fourth quarter of 2022. For the year, net profit of $8,404,000, or $2.92 per share, in 2023 compared to $10,336,000, which benefited from a one-time $2,900,000 gain, or $3.59 per share, in 2022. InsCorp generated a ROA of 1.06% and ROE of 12.8% in 2023. INSBANK has demonstrated relative stability in a volatile environment over the past couple of years.

Positive

• Net profit of $2,267,000 in Q4 2023 compared to $2,319,000 in Q4 2022
• Net profit of $8,404,000 in 2023 compared to $10,336,000 in 2022
• InsCorp generated a ROA of 1.06% and ROE of 12.8% in 2023
• Loan growth of 5% in the fourth quarter of 2023
• Active operating accounts grew 6% in 2023
• Nonperforming loans of 0.16% of loans in 2023
• Tangible book value increased 10.7% to $24.02 at year-end
• Dividend increased by 17.6% in 2024

Negative

• Net interest income decreased 1% in Q4 2023
• Net interest margin decreased to 3.34% in 2023 compared to 3.53% in 2022
• Earnings per share decreased to $0.79 in Q4 2023 compared to $0.80 in Q4 2022

Steady Growth Defines the 4^th Quarter for the Nashville Lender         

NASHVILLE, Tenn., Jan. 29, 2024 /PRNewswire/ -- Today InsCorp (OTCQX: IBTN) reported a net profit of $2,267,000, or $0.79 per share, in the fourth quarter of 2023 compared to respective levels of $2,319,000 and $0.80 for the fourth quarter of 2022. For the year, net profit of $8,404,000, or $2.92 per share, in 2023 compared to $10,336,000, which benefited from a one-time $2,900,000 gain, or $3.59 per share, in 2022.  InsCorp generated a ROA of 1.06% and ROE of 12.8% in 2023.

INSBANK has demonstrated relative stability in a volatile environment over the past couple of years. "While we were pleased to report a meaningful increase in loan originations in the fourth quarter and loan growth of 5%, this progress was somewhat offset by the rational behavior of our customers to deploy portions of their liquidity into interest-bearing accounts," said Jim Rieniets, President and CEO of INSBANK. "Despite the optics of a decline in aggregate non-interest-bearing deposits, for the year active operating accounts grew 6% while treasury services fee income grew 20%. This is reflective of both smart customers and capable bankers, the latter of which are garnering new relationship deposits with virtually all new loans." President and CEO Rieniets further added, "Our credit discipline, proactive management, and a focus on high quality commercial borrowers resulted in de minimis charge offs in 2023, 30-day past dues of 0.03% of loans, nonperforming loans of 0.16% of loans, and the return in the aggregate level of our watch list loans to pre-pandemic levels, as of December 31, 2023."

Net interest income decreased 1% to $6,481,000 in the fourth quarter and increased 5% for the year to $25,430,000. Although the Company benefited from an increase in loan yields of 105 basis points on a year-over-year basis and of 23 basis points on a linked-quarter to 6.59% in the quarter, the average cost of interest bearing funds increased 178 basis points during the quarter on a year-over-year basis and 33 basis points on a linked-quarter basis to 3.87% in the fourth quarter. Meanwhile, an increase in the mix of interest bearing cash and securities limited the expansion in the earning asset yield to 100 basis points on a year-over-year and 16 basis points on a linked-quarter basis to 6.47% in the quarter.  The Bank's net interest margin performance on a cycle to date basis has reflected prudent interest rate risk management, as the Bank's net interest margin of 3.34% in 2023 compared to 3.53% in 2022 and 3.21% in 2021. Going forward, net interest margin comparisons with prior periods will likely reflect more pressure for another couple of quarters given the change in deposit mix favoring certificates of deposit, higher renewal rates on certificates of deposit, and a smaller relative benefit from improved loan yields.

Although the bank continued to experience elevated pay-off activity in the quarter—including two large payoffs related to sales of a business and real estate—outstanding balances increased 5% year-over-year and 5% on a linked-quarter annualized basis, as the bank's commercial bankers originated $48 million of loan commitments in the quarter compared to $26 million in the previous quarter.

Asset quality remained very strong for the Bank, as 30-day past due loans and nonperforming loans represented 0.03% and 0.16% of loans, respectively, as of December 31. Net chargeoffs were de minimis during the quarter and in 2023. The Allowance for Credit Losses ("ACL") increased to $9,565,000, or 1.40% of total loans outstanding, compared to $8,778,000, or 1.35%, a year ago. The increase in the ACL reflected an adjustment of $493,000 related to the adoption of the Current Expected Credit Loss methodology earlier in the year, with provision expense of $315,000, and $21,000 of net chargeoffs in 2023.

Measures of liquidity risk remain healthy, as on-balance sheet liquidity ended the year at approximately $118 million compared to $92 million a quarter ago and $57 million a year ago.  Estimated uninsured deposits were approximately 22% of total deposits at quarter-end compared to 32% a year ago. Balance sheet liquidity and $121 million in reciprocal deposit capacity provide ample risk mitigation strategies.

The mark to market adjustment on the carrying values of derivatives used in the management of the Bank's interest rate risk benefitted EPS by $0.01 in 4Q23 and decreased EPS by $0.01 in 4Q22. For the year, the mark to market adjustment adversely affected EPS by $0.12 in 2023 in contrast to an EPS benefit of $0.77 in 2022. The gain recognized in 2022 was related to the value of interest rate caps that were purchased in 2021 to insulate the Bank against a significant increase in interest rates, while the negative mark to market in 2023 represented the decline in value of interest rate floors purchased in the first nine months of 2023 to protect against a potential significant drop in short-term interest rates.

Tangible book value increased 10.7%, or $2.32 per share, on a year-over-year basis, and 9.5% annualized, or $0.56 per share, on a linked-quarter basis to $24.02, as of December 31, 2023. Accumulated Other Comprehensive Income was ($838,000), or less than 1% of bank-level capital of $94,075,000. Tier-1 risk-based capital was 12.4% and total risk-based capital was 13.6%. On a consolidated basis, tangible common equity was 8.3%.

The Company's board of directors also recently approved the payment of a quarterly dividend compared to its previous policy of declaring and paying dividends on a semi-annual basis. Shareholders of record on February 16, 2024, will receive a dividend of $0.10 per common share payable on March 8, 2024, which represents an increase in the annualized rate of 17.6%. "As our company continues to grow, increasing the frequency of dividend distribution is a logical step for our shareholders," said Mike Qualls, Chairman of InsCorp. "We're pleased to increase the dividend while retaining sufficient capital to fuel near-term growth as well as previously authorized stock repurchases," Qualls continued.

Highlights of the quarter and the year include:

• Earnings per share were $0.79 for the quarter ended December 31, 2023, compared to $0.80 for the quarter ended September 30, 2023, and $0.80 for the quarter ended December 31, 2022.
• Annualized return on tangible common equity was 12.8% in 2023 compared to 17.7% in 2022.
• Tangible book value increased 10.7% to $24.02 at year-end compared to $21.70 a year ago.
• Loans grew $33.2 million, or 5.1%, on a year-over-year basis, and 4.9% on a linked-quarter annualized basis, as of December 30, 2023.
• Total assets grew $84.9 million or 11.3% on a year-over-year basis, and 11.6% on a linked-quarter annualized basis, as of December 31, 2023.
• Total deposits grew $109.7 million, or 19.0%, compared to December 31, 2022, and by $23.6 million, or 18.1% on a linked-quarter annualized basis in the quarter.
• Noninterest expense to total average assets increased to 1.91% in the quarter compared to 1.77% in 3Q23 and 2.08% in 4Q23. The linked-quarter increase reflected compensation accrual expense and an increase in the FDIC assessment. All compared favorably to the bank's FDIC peer group average of 2.33%.
• Assets per employee increased 11.3% year-over-year to $14.9 million, which doubled the FDIC peer group level of $7.4 million.
• Cost of all interest bearing funds was 3.87% in the fourth quarter of 2023 compared to 2.09% for the same period in 2022.
• The percentage of loans past due >90 days, nonaccrual, and other real estate to gross loans was 0.16% compared to 0.35% for peers.
• The allowance for credit losses increased to 1.40% of loans compared to 1.35% a year ago.
• Accumulated Other Comprehensive Income (AOCI) of ($838,000) compared to ($413,000) a year ago. The change was primarily due to an increase in the securities portfolio.

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 Finworth.  Medquity offers healthcare banking solutions to physicians, partnerships, and practices nationwide, while TMA Medical Banking provides banking services specifically to members of the Tennessee Medical Association. Finworth 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.insbank.com. 

 

InsCorp, Inc.
Consolidated Balance Sheets
(000's)
(unaudited)
			December 31,		December 31,
			2023		2022
Assets
Cash and Cash Equivalents			$                           7,689		$                           5,412
Interest Bearing Deposits			49,757		18,226
Securities			58,162		38,285
Loans			681,558		648,382
Allowance for Loan Losses			(9,565)		(8,778)
Net Loans			671,993		639,604
Premises and Equipment, net			12,715		13,028
Bank Owned Life Insurance			14,065		13,721
Restricted Equity Securities			8,890		10,996
Goodwill and Related Intangibles, net			1,091		1,091
Other Assets			12,703		11,827
Total Assets			$                      837,065		$                      752,190
Liabilities and Shareholders' Equity
Liabilities
Deposits
	Non-interest-bearing		$                        70,417		$                        87,842
	Interest-bearing		615,779		488,685
	Total Deposits		686,196		576,527
Federal Home Loan Bank Advances			45,000		67,000
Paycheck Protection Program Liquidity Fund			-
Subordinated Debentures			17,500		17,500
Line of Credit			8,750		7,500
Federal Funds Purchased			-		15,000
Other Liabilities			9,500		4,823
Total Liabilities			766,946		688,350
Shareholders' Equity
	Common Stock		33,112		32,656
	Treasury Stock		(3,869)		(3,200)
	Accumulated Retained Earnings		41,714		34,797
	Accumulated Other Comprehensive Income		(838)		(413)
	Total Stockholders' Equity		70,119		63,840
Total Liabilities & Shareholders' Equity			$                      837,065		$                      752,190
Tangible Book Value			$                           24.02		$                           21.70

 

InsCorp, Inc.
Consolidated Statements of Income
(000's)
(Unaudited)
			Three Months Ended				Twelve Months Ended
			December 31, 2023		December 31, 2022		December 31, 2023		December 31, 2022
Interest Income			$                        12,145		$                           9,426		$                        46,208		$                        30,730
Interest Expense			5,664		2,879		20,778		6,517
Net Interest Income			6,481		6,547		25,430		24,213
Provision for Loan Losses			150		75		315		670
Non-Interest Income
	Service Charges on Deposit Accounts		60		41		252		209
	Bank Owned Life Insurance		91		82		345		322
	Other		414		330		1,379		1,131
Non-Interest Expense
	Salaries and Benefits		2,627		2,336		9,434		8,402
	Occupancy and equipment		424		350		1,562		1,563
	Data Processing		87		302		382		858
	Marketing and Advertising		165		150		519		524
	Other		642		598		2,576		2,266
Net income from Operations			2,951		3,189		12,618		11,592
Gain (Loss) on Interest Rate Hedges			53		(25)		(432)		2,814
Interest Expense-Holding Co. Debt			391		343		1,509		1,095
Income Before Income Taxes			2,613		2,821		10,677		13,311
Income Tax Expense			(346)		(502)		(2,273)		(2,975)
Net Income			$                           2,267		$                           2,319		$                           8,404		$                        10,336
Return on Weighted Average Common Shares			$                             0.79		$                             0.80		$                             2.92		$                             3.59

 

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SOURCE INSBANK

FAQ

What was InsCorp's net profit in the fourth quarter of 2023?

InsCorp reported a net profit of $2,267,000 in the fourth quarter of 2023.

How much did InsCorp's net profit decrease from 2022 to 2023?

Net profit decreased from $10,336,000 in 2022 to $8,404,000 in 2023.

What was InsCorp's loan growth in the fourth quarter of 2023?

InsCorp experienced a 5% loan growth in the fourth quarter of 2023.

What was the increase in the dividend in 2024?

The dividend increased by 17.6% in 2024.

What was the percentage of nonperforming loans in 2023?

Nonperforming loans represented 0.16% of loans in 2023.

How much did the tangible book value increase at year-end?

The tangible book value increased 10.7% to $24.02 at year-end.

What was the net interest income change in the fourth quarter of 2023?

Net interest income decreased by 1% in the fourth quarter of 2023.

What was the net interest margin in 2023 compared to 2022?

The net interest margin decreased to 3.34% in 2023 compared to 3.53% in 2022.

What was the earnings per share in the fourth quarter of 2023?

Earnings per share were $0.79 for the quarter ended December 31, 2023.