INSBANK Parent InsCorp Reports Quarterly Profit Increase

Rhea-AI Summary

InsCorp reports a third quarter net profit of $2,311,000, increasing year-to-date profits to $6,137,000. Quarterly profits increased by 29% compared to the second quarter of 2023. Total assets remain consistent at $813,465,000. Non-interest bearing deposits increased by 8% while interest-bearing deposits remained unchanged. Net interest income for the quarter increased to $6,590,000. Operating income on a year-to-date basis increased by $1,264,000. Measures of asset quality remain strong with past due loans at 0.03% and non-performing assets at 0.22%. The company's board of directors approved a semi-annual dividend of $0.17 per share.

Positive

• Quarterly profits increased by 29% compared to the second quarter of 2023.
• Non-interest bearing deposits increased by 8%.
• Net interest income for the quarter increased to $6,590,000.
• Operating income on a year-to-date basis increased by $1,264,000.
• Measures of asset quality remain strong with past due loans at 0.03% and non-performing assets at 0.22%.
• The company's board of directors approved a semi-annual dividend of $0.17 per share.

Negative

• None.

Nashville Lender Announces Semi-Annual Dividend Payment

NASHVILLE, Tenn., Oct. 30, 2023 /PRNewswire/ -- Today InsCorp (OTCQX: IBTN) reported a third quarter net profit of $2,311,000 or, $0.80 per share, increasing year-to-date profits to $6,137,000, or $2.13 per share. Quarterly profits compared favorably to the prior quarter, increasing $0.18 cents, or 29% over the second quarter of 2023. A variety of factors contributed to the growth in earnings, including: an increase in net interest margin; quarterly growth in loan fee income; a modest reversal of loan loss reserve provision; and on-going contributions from hedging activities reducing the impact of increased funding costs. "We were pleased to demonstrate both balance sheet stability and operating income growth during this period of market volatility and industry uncertainty," said Jim Rieniets, President and CEO of INSBANK. "Our team remains focused on things we can control, including acquiring new customers, administering credit in a prudent fashion, and employing technology to better serve clients," Rieniets continued. Total assets as of September 30 were $813,465,000 consistent with the prior quarter, and a 12.3% increase over the prior year same period. During the quarter non-interest bearing deposits increased $1,629,000 or 8% on an annualized basis, while interest-bearing deposits were virtually unchanged. The mix of interest-bearing deposits continued to shift in favor of certificates of deposit, though that trend was slowing toward the end of the quarter.     

Net interest income for the quarter totaled $6,590,000, increasing $356,000 over the most recent quarter. Year-to-date net interest income of $18,949,000 represented a 7.3% increase over the same period for the prior year. The cost of interest bearing deposits increased 38 basis points during the quarter to 3.81%, while the yield on earnings assets was 6.35%.  Operating income, excluding gains and losses on hedging activities, was $9,667,000 on a year-to-date basis, which was an increase of $1,264,000 over the prior year. Net interest margin was 3.36% on a year-to-date basis, comparing to 3.44% for the prior year. "A commercial and private banking business model like INSBANK's is going to front-load deposit costs relative to some of our peers, but it also lends itself to greater loan re-pricing," said Jim Rieniets. "While we expect continued increases in deposit costs over the next couple of quarters, the relative change will be moderating, and should be mitigated by re-pricing loans projected during 2024," Rieniets continued.  

While lending activity progressed during the quarter with over $26 million in loan commitments originated, outstanding balances reduced slightly as of quarter-end due to pay-offs. As the Nashville real estate market remains stable, most of the loan payoffs were on real estate secured loans.  Measures of asset quality remain very strong for the company, as past due loans as of September 30 were 0.03%, while non-performing assets totaled just 0.22%. There were no charge-offs during the quarter, and the Allowance for Loan and Lease Losses was $9,164,000, or 1.36% of total loans outstanding.

Measures of liquidity risk remain healthy.  At quarter-end, on-balance sheet liquidity was $90 million, which was consistent with the prior quarter.  Estimated uninsured deposits were 20%, with the combination of balance sheet liquidity and $114 million in reciprocal deposit capacity providing ample 'at-risk' mitigation strategies.

Tangible book value increased $0.47 during the quarter to $23.46 as of September 30. Accumulated Other Comprehensive Income was ($802,000), or less than 1% of bank-level capital of $91,103,000. Tier 1 risk-based capital was 11.7%, while total risk-based capital equaled 12.9%. On a consolidated basis, tangible common equity was 8.3%.  

The company's board of directors also recently approved the payment of a semi-annual dividend. Shareholders of record on November 17, 2023, will receive a $0.17 dividend per share payable on December 08, 2023. "In the current environment, we seek to allocate our company's earnings in a way that optimizes shareholder value," said Mike Qualls, Chairman of InsCorp. "In addition to dividend payments, capital is available for supporting continued growth as well as previously authorized stock repurchases," Qualls continued.  

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

• Loans grew $56.2 million or 9.1% as of Sept 30, 2023, compared to Sept 30, 2022.
• Total assets grew $89 million or 12.3% as of Sept 30, 2023, compared to Sept 30, 2022.
• Total deposits grew $89.8 million or 15.8% during the 12 months ended Sept 30, 2023.
• Non-Interest Expense to Total Average Assets was 1.70% YTD as of Sept 30, 2023, slightly lower than 1.76% for the same period in 2022 and compared favorably to the bank's FDIC peer group average of 2.39%.
• Assets per employee remained strong at $14.2 million, compared to the FDIC peer group of $7.1 million.
• Cost of all interest-bearing funding was 3.54% for the three months ended Sept 30, 2023, increasing from 1.18% for the same period in 2022.
• YTD Net income before taxes, at the bank level, was $10.0 million after excluding interest rate hedges at Sept 30, 2023, compared to $8.7 million at Sept 30, 2022.
• Quarterly earnings per share were $0.80 for the quarter ended Sept 30, 2023, compared to $0.89 for the quarter ended Sept 30, 2022.
• Annualized return on tangible common equity was 12.6% for the six months ended Sept 30, 2023.
• The percentage of loans past due >90 days, non-accrual, and other real estate to gross loans was 0.22% compared to peer of 0.42%.
• The allowance for loan and lease losses was 1.36%, inclusive of a $493,000 CECL adoption adjustment in the first quarter.
• Estimated uninsured deposits less brokered at Sept 30 were 19.4% of total deposits. Deposits placed in reciprocal programs totaled $29 million as of Sept 30. The bank maintains an additional capacity of $114 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 $389,000 increase in AOCI for the nine months ended Sept 30, 2023.
• Tangible book value increased to $23.46 on Sept 30, 2023, from $21.07 at Sept 30, 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)
							September 30,				September 30,
							2023				2022
Assets
Cash and Cash Equivalents							$                           5,182				$                           1,394
Interest Bearing Deposits							38,575				25,495
Securities							53,565				39,304
Loans							673,256				617,094
Allowance for Loan Losses							(9,164)				(8,701)
Net Loans							664,092				608,393
Premises and Equipment, net							12,799				13,082
Bank Owned Life Insurance							13,975				13,639
Restricted Equity Securities							8,980				10,468
Goodwill and Related Intangibles, net							1,091				1,091
Other Assets							15,206				11,629
Total Assets							$                      813,465				$                      724,495
Liabilities and Shareholders' Equity
Liabilities
Deposits
	Non-interest-bearing						$                        77,253				$                        87,548
	Interest-bearing						579,247				479,201
	Total Deposits						656,500				566,749
Federal Home Loan Bank Advances							53,000				63,000
Paycheck Protection Program Liquidity Fund							-
Subordinated Debentures							17,500				17,500
Line of Credit							8,250				7,500
Federal Funds Purchased							-				3,000
Other Liabilities							9,932				4,996
Total Liabilities							745,182				662,745
Shareholders' Equity
	Common Stock						32,999				32,500
	Treasury Stock						(3,857)				(3,199)
	Accumulated Retained Earnings						39,943				32,919
	Accumulated Other Comprehensive Income						(802)				(470)
	Total Stockholders' Equity						68,283				61,750
Total Liabilities & Shareholders' Equity							$                      813,465				$                      724,495
Tangible Book Value							$                           23.46				$                           21.07

 

InsCorp, Inc.
Consolidated Statements of Income
(000's)
(Unaudited)
					Three Months Ended				Nine Months Ended
					September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
Interest Income					$                        12,129		$                           8,442		$                        34,063		$                        21,304
Interest Expense					5,539		1,737		15,114		3,638
Net Interest Income					6,590		6,705		18,949		17,666
Provision for Loan Losses					(100)		150		165		595
Non-Interest Income
	Service Charges on Deposit Accounts				94		57		192		168
	Bank Owned Life Insurance				87		81		254		240
	Other				373		301		965		801
Non-Interest Expense
	Salaries and Benefits				2,324		2,118		6,807		6,066
	Occupancy and equipment				391		378		1,138		1,213
	Data Processing				80		235		295		556
	Marketing and Advertising				78		117		354		374
	Other				697		553		1,934		1,668
Net income from Operations					3,674		3,593		9,667		8,403
Gain (Loss) on Interest Rate Hedges					(247)		-		(485)		2,839
Interest Expense-Holding Co. Debt					385		281		1,118		752
Income Before Income Taxes					3,042		3,312		8,064		10,490
Income Tax Expense					(731)		(746)		(1,927)		(2,473)
Net Income					$                           2,311		$                           2,566		$                           6,137		$                           8,017
Return on Weighted Average Common Shares					$                             0.80		$                             0.89		$                             2.13		$                             2.79

 

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SOURCE INSBANK

FAQ

What is the net profit reported by InsCorp for the third quarter?

InsCorp reported a net profit of $2,311,000 for the third quarter.

How much did the quarterly profits increase compared to the second quarter of 2023?

The quarterly profits increased by 29% compared to the second quarter of 2023.

What is the total assets of InsCorp?

The total assets of InsCorp are $813,465,000.

Did the non-interest bearing deposits increase or decrease?

The non-interest bearing deposits increased by 8%.

What is the net interest income for the quarter?

The net interest income for the quarter is $6,590,000.

How much did the operating income increase on a year-to-date basis?

The operating income increased by $1,264,000 on a year-to-date basis.

What are the measures of asset quality for InsCorp?

The past due loans are at 0.03% and the non-performing assets are at 0.22%.

What dividend did the company's board of directors approve?

The company's board of directors approved a semi-annual dividend of $0.17 per share.