INSBANK Parent InsCorp Reports First Quarter Profits

Rhea-AI Summary

InsCorp (OTC-PINK: IBTN) reported a strong performance in Q1 2023, achieving a net profit of $2,050,000 or $0.71 per share. Compared to Q1 2022, net interest income increased by $1,047,000, and operating income before taxes rose to $2,614,000. Loans grew by $12.8 million or 7.8% annualized, while total assets rose by $61.8 million or 8.5%. The bank maintained a solid net interest margin of 3.44%, despite a slight decline from previous quarters. Asset quality indicators remained strong, with past due loans at only 0.05% and non-performing assets at 0.32%. The tangible book value per share grew to $22.35 during the quarter, reflecting positive operational efficiency and growth strategies despite environmental economic challenges.

Positive

• Net profit of $2,050,000, or $0.71 per share.
• Net interest income increased by $1,047,000 year-over-year.
• Operating income before taxes rose to $2,614,000 from $1,740,000.
• Loan growth of $12.8 million (7.8% annualized).
• Total assets grew by $61.8 million (8.5%).
• Strong asset quality with past due loans at 0.05% and non-performing assets at 0.32%.
• Tangible book value increased to $22.35 per share.

Negative

• Operating expenses increased by $143,000.
• Net interest margin declined by 30 basis points quarter over quarter.
• Quarterly earnings per share dropped to $0.71 from $1.21 year-over-year.

 Nashville Bank Balances Growth & Risk Management Practices to Navigate Current Economy    

NASHVILLE, Tenn., April 20, 2023 /PRNewswire/ -- Today InsCorp (OTCQX: IBTN) reported a first quarter net profit of $2,050,000 or, $0.71 per share. Relative to the same quarter of the prior year, net interest income grew $1,047,000, while operating expenses increased $143,000. Operating income before taxes and non-recurring items was $2,614,000, versus $1,740,000 the prior year. While net interest margin of 3.44% was greater than that of the prior year same period of 3.06%, margin declined 30 basis points on a sequential quarter basis. For the quarter, loans grew $12.8 million, or 7.8%, on an annualized basis, while all forms of funding increased $32 million. "Against the backdrop of unprecedented Fed rate increases over the past 12 months, our results were in line with our expectations for the early part of the year," said Jim Rieniets, President and CEO of INSBANK. "Despite the headwind of higher funding costs, loan growth and efficient operations helped enable a 13.5% return on equity for the quarter, which is consistent with our long-term strategic objectives," Rieniets continued.      

Measures of asset quality remain very strong for the company and compare very favorably to recent peer group data. Past due loans as of March 31 were 0.05%, while non-performing assets totaled just 0.32%. There were no charge-offs during the quarter, and loan risk ratings migrated positively during the period. On-balance sheet liquidity as of March 31 was $86 million, increasing $22 million during the quarter. "Recent bank failures highlighted the importance of prudent enterprise risk management, more specifically in the areas of interest rate risk and liquidity risk," said Rieniets. "Our team has historically applied the concept of diversification to funding the balance sheet, alongside risk mitigation strategies such as interest rate caps, floors, and hedges to minimize exposure to interest rate volatility. While some of our peers have seen large discounts to mark-to-market capital, our negative AOCI adjustment is a mere $208,000, or less than 0.25% of the $88 million in bank-level capital," Rieniets continued.

As of March 31, InsCorp shares had a tangible book value of $22.35 per share, and a book value of $22.73 per share. Tangible book value per share increased $0.65 during the quarter. Shares outstanding decreased slightly by virtue of a repurchase of 10,000 shares during the quarter, and the holding company's debt-to-equity ratio remained stable at 0.395. "With uncertainty around the near-term economic outlook, our team will seek to optimize growth opportunities where the bank can generate value for the customer while navigating risk for the bank. For example, Medquity, our nationwide healthcare division, continues to have a steady pipeline of prospects which have less correlation of risk to a general economic downturn than do general CRE and C&I portfolios," said Jim Rieniets. "We continue to believe that leveraging technology-focused platforms to serve niche business lines is the best path for enhancing shareholder value today, and in the future," Rieniets continued.        

Highlights of the quarter and year-over-year include:

• Loans grew $108.7 million or 19.7% as of March 31, 2023, compared to March 31, 2022.
• Total assets grew $61.8 million or 8.5% as of March 31, 2023, compared to March 31, 2022.
• Non-interest-bearing deposits grew $1.1 million or 1.3% during the 12 months ended March 31, 2023.
• Non-Interest Expense to Total Average Assets was 1.56% for the quarter ended March 31, 2023, slightly lower than 1.79% for the same period in 2022 and compared favorably to the bank's FDIC peer group average of 2.40%.
• Assets per employee remained strong at $14.0 million, compared to the FDIC peer group of $6.90 million.
• Cost of all interest-bearing funding was 2.97% for the three months ended March 31, 2023, increasing from 0.69% for the same period in 2022.
• Net income before taxes, at the bank level, was $3.08 million after excluding one-time gains at March 31, 2023, compared to $2.06 million at March 31, 2022.
• Quarterly earnings per share were $0.71 for the quarter ended March 31, 2023, compared to $1.21 for the quarter ended March 31, 2022.
• Annualized return on tangible common equity was 13.49% for the three months ended March 31, 2023.
• The percentage of loans past due and non-accrual to gross loans was 0.36% comparing to peer of 0.34%.
• The allowance for loan and lease losses was 1.42%, inclusive of a $493,000 CECL adoption adjustment in the first quarter.
• Estimated uninsured deposits at March 31 were 24.8% of total deposits.
• Deposits placed in reciprocal programs totaled $31 million as of March 31. The bank maintains an additional capacity of $108 million for placing depositors' funds in reciprocal arrangements.
• Accumulated Other Comprehensive Income (AOCI) reflected a loss on the securities portfolio substantially offset by gains on interest rate swaps held by the bank for interest rate risk purposes, resulting in a $205,000 decrease in AOCI for the three months ended March 31, 2023.
• Tangible book value increased to $22.35 on March 31, 2023, from $19.89 at March 31, 2022.

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)
					March 31,		December 31,		March 31,
					2023		2022		2022
Assets
Cash and Cash Equivalents					$                              4,765		$                                5,412		$                            17,258
Interest Bearing Deposits					31,359		18,226		90,288
Securities					50,101		40,785		27,545
Loans					661,226		648,382		552,473
Allowance for Loan Losses					(9,396)		(8,778)		(8,193)
Net Loans					651,830		639,604		544,280
Premises and Equipment, net					12,918		13,028		13,275
Bank Owned Life Insurance					13,803		13,721		13,477
Restricted Equity Securities					8,577		8,496		9,225
Goodwill and Related Intangibles, net					1,091		1,091		1,091
Other Assets					12,303		11,657		8,490
Total Assets					$                          786,747		$                           752,020		$                          724,929
Liabilities and Shareholders' Equity
Liabilities
Deposits
	Non-interest-bearing				$                            85,274		$                             87,843		$                            84,190
	Interest-bearing				542,163		488,684		529,316
	Total Deposits				627,437		576,527		613,506
Federal Home Loan Bank Advances					62,000		67,000		30,000
Paycheck Protection Program Liquidity Fund									322
Subordinated Debentures					17,500		17,500		17,500
Federal Funds Purchased					-		15,000		-
Notes Payable					8,000		7,500		2,500
Other Liabilities					6,306		4,653		2,885
Total Liabilities					721,243		688,180		666,713
Shareholders' Equity
	Common Stock				32,775		32,643		32,241
	Treasury Stock				(3,417)		(3,200)		(3,150)
	Accumulated Retained Earnings				36,354		34,810		28,543
	Accumulated Other Comprehensive Income				(208)		(413)		582
	Total Stockholders' Equity				65,504		63,840		58,216
Total Liabilities & Shareholders' Equity					$                          786,747		$                           752,020		$                          724,929
Tangible Book Value					$                              22.35		$                                21.71		$                              19.89

 

InsCorp, Inc.
Consolidated Statements of Income
(000's)
(Unaudited)
					Three Months Ended		Twelve Months Ended		Three Months Ended
					March 31, 2023		December 31, 2022		March 31, 2022
Interest Income					$                            10,386		$                             30,415		$                              6,013
Interest Expense					4,261		6,202		935
Net Interest Income					6,125		24,213		5,078
Provision for Loan Losses					125		670		145
Non-Interest Income
	Service Charges on Deposit Accounts				47		209		57
	Bank Owned Life Insurance				82		322		79
	Gain on Sale of Securities				-		-		-
	Other				298		1,156		221
Non-Interest Expense
	Salaries and Benefits				2,251		8,402		2,035
	Occupancy and equipment				373		1,563		433
	Data Processing				99		858		154
	Marketing and Advertising				116		524		128
	Other				621		2,266		567
Net income from Operations					2,967		11,617		1,973
Gain in Interest Rate Hedges					66		2,789		2,516
Interest Expense-Subordinated Debt					353		1,095		233
Income Before Income Taxes					2,680		13,311		4,256
Income Tax Expense					(630)		(2,975)		(1,052)
Net Income					$                              2,050		$                             10,336		$                              3,204
Return on Weighted Average Common Shares					$                                 0.71		$                                  3.59		$                                 1.12

 

 

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SOURCE INSBANK

FAQ

What were InsCorp's Q1 2023 earnings?

InsCorp reported a net profit of $2,050,000 or $0.71 per share.

How much did loans grow for InsCorp in Q1 2023?

Loans grew by $12.8 million, which is a 7.8% increase on an annualized basis.

What was the net interest margin for InsCorp in Q1 2023?

The net interest margin was 3.44%, down from 3.06% in the same period last year.

What is InsCorp's tangible book value per share as of March 31, 2023?

The tangible book value per share is $22.35.

How did InsCorp's operating expenses change in Q1 2023?

Operating expenses increased by $143,000 compared to the previous year.