Loan Growth Drives Q4 Profits for INSBANK Parent InsCorp

Rhea-AI Summary

InsCorp (OTCQX: IBTN) reported a fourth quarter net profit of $2,319,000, or $0.80 per share, marking a 33% increase from the previous year. Year-to-date earnings reached $10,336,000, or $3.59 per share. Net interest income rose 17.3% to $6,546,000, driven by loan growth of $31 million, an annualized rate of 20%. Non-interest bearing deposits grew 9.9%, while the cost of interest-bearing deposits increased to 2.05%. The bank also completed a key upgrade to an open API core system. Highlights included a 17.6% loan growth year-over-year and strong asset quality metrics with non-performing loans at 0.36%.

Positive

• Fourth quarter net profit of $2,319,000, a 33% increase year-over-year.
• Year-to-date earnings of $10,336,000 or $3.59 per share.
• Net interest income increased by 17.3% to $6,546,000.
• Loan growth of $31 million at an annualized rate of 20%.
• Non-interest bearing deposits grew by 9.9%.
• Successful completion of multi-year project to upgrade to open API core system.
• Tangible book value rose to $21.70 from $18.90 year-over-year.

Negative

• Interest-bearing accounts decreased slightly by 3.2%.

Nashville Lender Completes Conversion to Open API Core System

NASHVILLE, Tenn., Jan. 27, 2023 /PRNewswire/ -- Today InsCorp (OTCQX: IBTN) reported a fourth quarter net profit of $2,319,000 or, 0.80 per share, representing a 33% increase over the fourth quarter of 2021. Year-to-date earnings are $10,336,000, or $3.59 per share. At the bank-level, net interest income for the quarter was $6,546,000, which was a 17.3% increase over the prior year same quarter. Operating income for the quarter was driven by a stable net interest margin as well as loan growth. During the quarter loans grew $31 million, or at an annualized rate of 20%. Operating income before tax at the bank-level was $3,208,000, as compared to $2,719,000 during the fourth quarter of the prior year. "The momentum of the quarter capped off a strong year of loan growth for INSBANK, which included more than $60 million of net growth in our MedQuity division," said Jim Rieniets, President & CEO of INSBANK. "While credit markets are tightening amid concerns of recession, we are thoughtfully allocating credit to industry silos that have had minimal credit cycle correlation to recessionary environments," Rieniets continued.

For the year non-interest bearing deposit balances increased 9.9% on a consolidated basis, while interest-bearing accounts decreased slightly by 3.2%. The cost of interest-bearing deposits was 2.05% during the fourth quarter, increasing from 1.18% the prior quarter. Bank-level quarterly operating expenses of $3,618,000 equated to 1.99% of assets, and contributed to an efficiency ratio of 53.3%, which compares favorably to the bank's historical peer group average. Asset quality measures remained strong with non-performing assets and past due loans totaling 0.36%. "While we're very pleased with strong loan growth, the fourth quarter also witnessed the culmination of a multi-year project to convert and upgrade to an open API core software platform," said Jim Rieniets, President & CEO of INSBANK. "With this conversion successfully completed, the bank can better leverage data and integrate industry-specific software solutions for our customers, both of which are critical for achieving core deposit objectives in 2023 and beyond," Rieniets continued.

Also during the fourth quarter, on December 9th the company paid a semi-annual dividend of $0.15 to shareholders of record as of November 18, 2022.

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

• Loans grew $96.9 million or 17.6% as of December 31, 2022, compared to December 31, 2021.
• Total assets grew $51.6 million or 7.4% as of December 31, 2022, compared to December 31, 2021.
• Non-interest bearing deposits grew $7.9 million or 9.9% during the 12 months ended December 31, 2022.
• Non-Interest Expense to Total Average Assets was 1.86% for the year ended December 31, 2022, slightly higher than 1.77% for the same period in 2021 and compared favorably to the bank's most recently reported FDIC peer group average of 2.36%.
• Assets per employee remained strong at $13.4 million, compared to the most recent FDIC peer group average of $6.9 million.
• Cost of all interest-bearing funding was 2.17% for the three months ended December 31, 2022, increasing from 0.72% for the same period in 2021.
• Net income before taxes, at the bank level, were $12.0 million after excluding one-time gains on derivative products of $2.8 million at December 31, 2022, compared to $9.2 million at December 31, 2021.
• Quarterly earnings per share were $0.80 for the quarter ended December 31, 2022, compared to $0.60 for the quarter ended December 31, 2021.
• Annualized return on assets was 1.26% for the quarter-ended December 31, 2022.
• Annualized return on tangible common equity was 15.03% for the quarter-ended December 31, 2022.
• The percentage of loans past due and non-accrual to gross loans was 0.36%.
• Net recoveries for the twelve months ended December 31, 2022, were $83,000.
• The allowance for loan and lease losses was 1.35%.
• Accumulated Other Comprehensive Income (AOCI) reflected a loss on the securities portfolio partially offset by gains on interest rate swaps held by the bank for interest rate risk purposes, resulting in a $57,000 increase in AOCI for the three months ended December 31, 2022.
• Tangible book value increased to $21.70 on December 31, 2022, from $18.90 at December 31, 2021.

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 physicians, partnerships, and practices nationwide, 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.insbank.com

InsCorp, Inc.
Consolidated Balance Sheets
(000's)
(unaudited)
					December 31,				December 31,
					2022				2021
Assets
Cash and Cash Equivalents					$                         5,412				$                       16,680
Interest Bearing Deposits					18,226				73,746
Securities					38,285				21,606
Loans					648,382				551,463
Allowance for Loan Losses					(8,778)				(8,025)
Net Loans					639,604				543,438
Premises and Equipment, net					13,028				13,345
Bank Owned Life Insurance					13,721				13,398
Restricted Equity Securities					10,996				9,054
Goodwill and Related Intangibles, net					1,091				1,091
Other Assets					11,827				8,247
Total Assets					$                    752,190				$                    700,605
Liabilities and Shareholders' Equity
Liabilities
Deposits
	Non-interest-bearing				$                       87,842				$                       79,929
	Interest-bearing				488,685				504,781
	Total Deposits				576,527				584,710
Federal Home Loan Bank Advances					67,000				32,000
Paycheck Protection Program Liquidity Fund					-				1,404
Subordinated Debentures					17,500				17,500
Line of Credit					7,500				2,500
Federal Funds Purchased					15,000				4,000
Other Liabilities					4,823				3,278
Total Liabilities					688,350				645,392
Shareholders' Equity
	Common Stock				32,656				32,087
	Treasury Stock				(3,200)				(3,150)
	Accumulated Retained Earnings				34,797				25,689
	Accumulated Other Comprehensive Income				(413)				587
	Total Stockholders' Equity				63,840				55,213
Total Liabilities & Shareholders' Equity					$                    752,190				$                    700,605
Tangible Book Value					$                         21.70				$                         18.90

 

InsCorp, Inc.
Consolidated Statements of Income
(000's)
(Unaudited)
			Three Months Ended				Twelve Months Ended
			December 31, 2022		December 31, 2021		December 31, 2022		December 31, 2021
Interest Income			$                           9,426		$                         6,521		$                        30,730		$                       24,901
Interest Expense			2,879		938		6,517		4,690
Net Interest Income			6,547		5,583		24,213		20,211
Provision for Loan Losses			75		450		670		1,850
Non-Interest Income
	Service Charges on Deposit Accounts		41		60		209		240
	Bank Owned Life Insurance		82		81		322		283
	Gain on Security Sales		-		-		-		62
	Other		330		222		1,131		1,114
Non-Interest Expense
	Salaries and Benefits		2,336		2,234		8,402		7,332
	Occupancy and equipment		350		363		1,563		1,347
	Data Processing		302		151		858		597
	Marketing and Advertising		150		170		524		574
	Other		598		843		2,266		2,373
Net income from Operations			3,189		1,735		11,592		7,837
Gain on Interest Rate Hedges/Securities			(25)		604		2,814		748
Interest Expense-Holding Co. Debt			343		275		1,095		992
Income Before Income Taxes			2,821		2,064		13,311		7,593
Income Tax Expense			(502)		(321)		(2,975)		(1,564)
Net Income			$                           2,319		$                         1,743		$                        10,336		$                         6,029
Return on Weighted Average Common Shares			$                             0.80		$                           0.60		$                             3.59		$                           2.06

 

 

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SOURCE INSBANK

FAQ

What is InsCorp's net profit for the fourth quarter of 2022?

InsCorp reported a net profit of $2,319,000 for the fourth quarter of 2022.

How much did InsCorp's net interest income increase in the fourth quarter of 2022?

Net interest income increased by 17.3% to $6,546,000 in the fourth quarter of 2022.

What was the annualized loan growth rate for InsCorp in the fourth quarter?

InsCorp achieved a loan growth of $31 million, at an annualized rate of 20%.

What is the percentage of non-performing loans at InsCorp?

The percentage of non-performing loans at InsCorp is 0.36%.

What was the dividend paid by InsCorp in December 2022?

InsCorp paid a semi-annual dividend of $0.15 to shareholders on December 9, 2022.

When did InsCorp complete its conversion to an open API core system?

InsCorp completed the conversion to an open API core system during the fourth quarter of 2022.