Quarterly Profits Increase for INSBANK Parent, InsCorp, Inc.

Rhea-AI Summary

Inscorp, parent company of INSBANK (OTCQX: IBTN), reported 4th quarter earnings of $808,500, or $0.28 per share, marking an increase of $465,500 from the 3rd quarter. Key drivers included improved net interest margin and reduced loan loss provisions. Total assets grew by $63.5 million (11.5%) for 2020, with non-interest bearing deposits rising by 49%. However, 2020 earnings fell to $0.83 per share from $1.55 due to pandemic-related impacts. Despite challenges, management expressed optimism for 2021, citing digital growth and efficient business models as focus areas.

Positive

• Earnings increased by $465,500 or $0.17 per share from the 3rd quarter.
• Total assets grew by $63.5 million or 11.5% year-over-year.
• Non-interest bearing deposits increased by $17 million or 49% in 2020.
• Efficiency ratio improved to 59.9%, better than FDIC peer average of 62.7%.
• Cost of interest-bearing funding decreased to 1.31% from 2.06% year-over-year.
• Tangible book value increased by $0.26 to $17.24 due to retained earnings.

Negative

• 2020 earnings decreased to $0.83 per share from $1.55 in the prior year.
• Increased loan loss provisions due to pandemic impacts.
• Annualized net charge-offs rose to 0.08% from 0.04% year-over-year.

NASHVILLE, Tenn., Feb. 4, 2021 /PRNewswire/ -- Inscorp, Inc., parent company of INSBANK, (OTCQX: IBTN) today reported 4^th quarter earnings of $808,500 or $0.28 per share. Quarterly earnings for the Nashville-based lender were up $465,500, or $0.17 per share versus the 3^rd quarter, primarily driven by both an increase in net interest margin and a decrease in loan loss provision expense.  The bank's net interest margin improved by 19 basis points over the 3^rd quarter, and provision expense decreased by $200,000.

"In the 4^th quarter we were pleased not only with improved financial results, but also with the resumption of loan and deposit pipelines that indicate certain sectors of our local economy are moving forward, albeit with changes driven by the pandemic, said Jim Rieniets, President & CEO of INSBANK. "We're cautiously optimistic that lower funding costs and core loan growth are trends that will give us inertia into 2021, as we continue to both build on digital lines of business, and hire more team members for our core, commercial banking units," Rieniets continued.

While core net interest income and operating expenses were consistent with the same quarter in the prior year, earnings were down $722,000, or $0.24 per share a result of less non-interest income and more loan loss provision expense versus that of Q4 2019. For the year the company reported earnings of $0.83 per share versus $1.55 the prior year. Factors contributing to the decline in earnings in 2020 were driven by the pandemic, in the form of the margin-compressing rate shock of March 2020, and a year-long effort to bolster loan loss reserves given the uncertainty of outcomes for business borrowers most affected by the pandemic.          

"While the ultimate effects of the pandemic remain unknown, our team has worked diligently with our impacted customers to quantify risks and identify paths forward, including PPP loans and loan modifications, where appropriate," continued Rieniets. "In an industry whose evolution has been accelerated by the pandemic, we're approaching 2021 with optimism given our ability to decrease cost of funding and increase operating leverage with our technology-driven, efficient business model."    

Highlights of the quarter and year-ended include:

• Total assets grew $63.5 million year over year or 11.5% for 2020.
• Non-interest bearing deposits grew $17 million or 49% during 2020.
• Loans generated through the government's SBA-PPP program totaled $45.7 million.
• Deferred loan fees related to the PPP loans is approximately $900,000 at December 31, 2020
• Efficiency ratio was 59.9% at December 31, 2020, comparing favorably to the bank's FDIC peer group average of 62.7%.
• Non-Interest Expense to Total Assets was 1.73% for the year ended December 31, 2020, slightly lower than 1.89% for the same period in 2019 and compared favorably to the bank's FDIC peer group average of 2.60%.
• Cost of all interest-bearing funding was 1.31% for the three months ended December 31, 2020 decreasing from 2.06% for the same period in 2019.
• Assets per employee remained strong at $13.66 million, compared to the FDIC peer group of $6.34 million.
• The bank's tier 1 capital ratio was 12.1%, while total risk-based capital was 13.3%.
• Annualized net charge-offs to average loans were 0.08% for the year ended December 31, 2020 compared to 0.04% for the same period in 2019.
• The allowance for loan and lease losses was 1.40%, slightly higher than the bank's FDIC peer group average of 1.38%.
• Annualized return on tangible common equity for the year was 4.86%
• During 2020 InsCorp returned to shareholders $751,000 in the form of stock buybacks.
• Tangible book value increased $0.26 to $17.24 during the quarter primarily by virtue of retained earnings.

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)
					December 31		December 31,
					2020		2019
Assets
Cash and Cash Equivalents					$                            8,219		$                              5,342
Interest Bearing Deposits					33,356		27,418
Securities					17,039		20,996
Loans					525,235		469,172
Allowance for Loan Losses					(7,365)		(5,380)
Net Loans					517,870		463,792
Premises and Equipment, net					13,630		13,982
Bank Owned Life Insurance					10,115		9,865
Restricted Equity Securities					7,612		5,866
Goodwill and Related Intangibles, net					1,091		1,091
Other Assets					7,947		5,022
Total Assets					$                        616,879		$                          553,374
Liabilities and Shareholders' Equity
Liabilities
Deposits
	Non-interest-bearing				$                          52,665		$                            34,854
	Interest-bearing				417,731		402,118
	Total Deposits				470,396		436,972
Federal Home Loan Bank Advances					50,000		49,000
Paycheck Protection Program Liquidity Fund					18,412		-
Subordinated Debentures					15,000		15,000
Federal Funds Purchased					7,000		-
Other Liabilities					5,013		3,404
Total Liabilities					565,821		504,376
Shareholders' Equity
	Common Stock				31,204		30,993
	Treasury Stock				(681)		-
	Accumulated Retained Earnings				20,362		17,944
	Accumulated Other Comprehensive Income				173		61
	Total Stockholders' Equity				51,058		48,998
Total Liabilities & Shareholders' Equity					$                       616,879		$                          553,374
Tangible Book Value					$                           17.24		$                              16.32

 

InsCorp, Inc.
Consolidated Statements of Income
(000's)
(Unaudited)
					Twelve Months Ended		Twelve Months Ended
					December 31, 2020		December 31, 2019
Interest Income					22,694		24,941
Interest Expense					7,221		8,872
Net Interest Income					$                            15,473		$                             16,069
Provision for Loan Losses					2,400		725
Non-Interest Income
	Service Charges on Deposit Accounts				212		154
	Bank Owned Life Insurance				251		253
	Sale of Government Guaranteed Loans				-		384
	Other				705		604
Non-Interest Expense
	Salaries and Benefits				6,200		6,023
	Occupancy and equipment				1,233		1,160
	Data Processing				553		499
	Marketing and Advertising				349		379
	Other				1,843		1,988
Net income from Operations					4,063		6,690
Interest Expense-Subordinated Debt					956		956
Income Before Income Taxes					3,107		5,734
Income Tax Expense					(674)		(1,207)
Net Income					$                              2,433		$                                4,527
Return on Weighted Average Common Shares					$                                 0.83		$                                  1.55

 

 

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SOURCE INSBANK

FAQ

What are the 4th quarter earnings for INSBANK (IBTN)?

INSBANK reported 4th quarter earnings of $808,500 or $0.28 per share.

How did INSBANK’s earnings change from the 3rd quarter?

Earnings increased by $465,500 or $0.17 per share compared to the 3rd quarter.

What caused the earnings decline for INSCORP in 2020?

Earnings fell due to pandemic impacts, with a decrease in non-interest income and increased loan loss provisions.

What is the growth rate of total assets for INSBANK in 2020?

Total assets grew by $63.5 million or 11.5% year-over-year.

What is the efficiency ratio reported by INSBANK?

The efficiency ratio was 59.9%, which is better than the FDIC peer group average of 62.7%.