NORTHEAST INDIANA BANCORP, INC. ANNOUNCES FIRST QUARTER 2023 EARNINGS

Rhea-AI Summary

Northeast Indiana Bancorp (NIDB) reported net income of $1.17 million ($0.97 per diluted share) for Q1 2023, down from $1.78 million ($1.49 per diluted share) in Q1 2022. The annualized return on average assets (ROA) declined to 1.04% from 1.70%, while return on equity (ROE) dropped to 10.75% from 15.07%. This decline is attributed to increased interest expenses due to rising rates and provisions for loan losses under the CECL accounting standard. Total assets rose 5.9% to $452.1 million, driven by a $5.0 million increase in loans. However, net interest income decreased $116,000 due to a 45 basis point drop in net interest margin. Non-interest income also fell by $135,000, largely due to reduced gains on loan sales.

Positive

• Total assets increased by $6.6 million to $452.1 million.
• Total loans rose by $5.0 million to $325.7 million.
• Total deposits increased by $3.9 million to $370.7 million.
• Book value per share increased by $0.22 to $36.02.

Negative

• Net income decreased by $610,000 compared to Q1 2022.
• Net interest income decreased by $116,000 year-over-year.
• Non-interest income declined by $135,000 compared to Q1 2022.
• ROA and ROE showed significant declines to 1.04% and 10.75%, respectively.

HUNTINGTON, Ind., April 21, 2023 /PRNewswire/ -- Northeast Indiana Bancorp, Inc., (OTCQB:  NIDB), the parent company of First Federal Savings Bank, has announced net income of $1.17 million ($0.97 per diluted common share) for the first quarter ended March 31, 2023 compared to earnings from the quarter ended March 31, 2022 of $1.78 million ($1.49 per diluted common share).  The current three months earnings equate to an annualized return on average assets (ROA) of 1.04% and a return on average equity (ROE) of 10.75% compared to an ROA of 1.70% and an ROE of 15.07% for the prior year quarter ended March 31, 2022. The decline was related to the increase in interest expense compared to interest income due to the historic increase in interest rates, provision for loan loss expense due to the new CECL accounting standard and several investments made for the benefit of future growth.

Total assets increased $6.6 million, or 5.9% on an annualized basis, to $452.1 million at March 31, 2023 compared to total assets of $445.5 million at December 31, 2022.  Total loans increased $5.0 million, or 6.2% on an annualized basis, to $325.7 million at March 31, 2023 compared to total loans of $320.8 million at December 31, 2022.  Total deposits increased $3.9 million, or 4.3% on an annualized basis, to $370.7 million at March 31, 2023 compared to $366.8 million at December 31, 2022.    

Shareholders' equity increased $691,000 to $43.8 million at March 31, 2023 compared to $43.1 million at December 31, 2022.  The increase in shareholders' equity was a result of accumulated other comprehensive income increasing $278,000 due to a slight improvement in the fair value of the investment portfolio and net income for the first quarter. This increase was partially offset by a decline in retained earnings of $398,000 for the initial entry to implement the new CECL accounting standard.  The book value of NIDB stock increased $0.22 to $36.02 per common share as of March 31, 2023 compared to $35.80 at December 31, 2022.  The number of outstanding common shares was 1,216,335 as of March 31, 2023. 

Net interest income decreased $116,000 in the first quarter of 2023 compared to the same period in 2022.  The decrease was a result of a 45 basis point decline in net interest margin to 3.35%, partially offset by an increase in average earning assets of $38.8 million for the first quarter of 2023 compared to the first quarter of 2022.  The decline in net interest margin was primarily due to an increase of 164 basis points in costs of interest-bearing liabilities of 2.02% in the first quarter of 2023 compared to 0.38% in the first quarter of 2022 compared to an increase of 88 basis points in yield on interest earning assets to 4.97% in the first quarter of 2023 compared to 4.09% in the first quarter of 2022.

Non-interest income declined $135,000 in first quarter of 2023 compared to the same period in 2022.  The decrease was a result of a decline of $177,000 in gain on sale of loans due to slower mortgage refinances in the first quarter of 2023 compared to the first quarter of 2022.  Non-interest expense increased $481,000 in the first quarter of 2023 compared to the first quarter of 2022.  The increase in non-interest expense is primarily due to investments made in 2022 to increase capacity for future growth and a new branch location that opened in the second quarter of 2022.

Michael S. Zahn, President/CEO said, "The historic increase in interest rates had a negative impact on our margin, but our commercial loan pipeline continues to be strong. We believe the investments that have been made position us well for the future."

Northeast Indiana Bancorp, Inc. is headquartered at 648 N. Jefferson Street, Huntington, Indiana.  The company offers a full array of banking and financial brokerage services to its customers through its main office in Huntington and six full-service Indiana offices in Huntington (2), Warsaw (2) and Fort Wayne (2).  The Company is traded on the OTC Markets Group, Inc. (www.otcmarkets.com) utilizing the OTCQB platform under the symbol "NIDB".  Our web site address is www.firstfedindiana.bank.

This press release may contain forward-looking statements, which are based on management's current expectations regarding economic, legislative and regulatory issues.  Factors which may cause future results to vary materially include, but are not limited to, general economic conditions, changes in interest rates, loan demand, and competition.  Additional factors include changes in accounting principles, policies or guidelines; changes in legislation or regulation; and other economic, competitive, regulatory and technological factors affecting each company's operations, pricing, products and services.

 

NORTHEAST INDIANA BANCORP
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
		March 31,	December 31,	March 31,
Balance Sheet (Unaudited)		2023	2022	2022
Assets
Interest-earning cash and cash equivalents		$         2,646,912	$         3,141,705	$         8,040,570
Non-interest earning cash and cash equivalents		1,940,693	747,920	4,216,611
Total cash and cash equivalents		4,587,606	3,889,625	12,257,181
Interest-earning time deposits		1,230,000	1,230,000	2,210,000
Securities available for sale		78,278,059	78,273,337	85,245,995
Securities held to maturity		12,787,199	12,062,446	11,791,172
Loans held for sale		403,600	189,600	1,313,598
Loans, gross		330,160,388	324,752,497	283,628,078
Allowance for loan losses		(4,421,505)	(3,996,619)	(4,004,074)
Loans, net		325,738,883	320,755,878	279,624,004
Accrued interest receivable		1,982,785	1,923,986	1,523,198
Premises and equipment		7,376,693	7,254,951	7,122,223
FHLB Stock		2,101,600	2,101,600	2,101,600
Investment in limited partnerships		1,153,334	1,228,334	1,453,334
Cash surrender value of life insurance		11,703,266	11,629,618	11,407,075
Other assets		4,803,252	4,988,219	3,451,488
Total Assets		$    452,146,276	$    445,527,594	$    419,500,867
Liabilities and Stockholders' Equity
Non-interest bearing deposits		$      54,547,736	$      53,232,315	$      62,072,982
Interest bearing deposits		316,197,968	313,584,014	294,557,300
Borrowed funds		34,000,000	32,000,000	13,925,706
Accrued interest payable and other liabilities		3,582,889	3,584,163	3,622,201
Total Liabilities		408,328,593	402,400,492	374,178,189
Stockholders' equity		43,817,683	43,127,102	45,322,678
Total Liabilities and Stockholders' Equity		$    452,146,276	$    445,527,594	$    419,500,867
		Three months ended
		March 31,	December 31,	March 31,
Income Statement (Unaudited)		2023	2022	2022
Net interest income
Total interest income		$         5,388,127	$         5,071,415	$         4,033,571
Total interest expense		1,761,895	1,120,123	291,129
Net interest income		3,626,232	3,951,292	3,742,442
Provision for loan losses		90,000	-	-
Net interest income after provision for loan losses		3,536,232	3,951,292	3,742,442
Non-interest income
Service charges on deposit accounts		188,222	198,715	154,398
Interchange fees		192,338	193,610	162,545
Loan servicing fees			62,712
Net gain on sale of loans		65,793	66,083	242,882
Net loss on sale of repossessed assets		-	-	-
Brokerage fees		66,485	41,034	54,151
Increase in cash surrender value of life insurance		73,648	74,955	75,134
Other income		183,244	102,248	215,866
Total non-interest income		769,730	739,357	904,976
Non-interest expense
Salaries and employee benefits		1,687,245	1,513,293	1,410,259
Occupancy		340,935	383,944	282,467
Data processing		394,597	371,655	356,919
Deposit insurance premiums		49,500	28,500	30,500
Professional fees		111,035	138,903	80,905
Advertising and marketing fees		91,717	89,021	57,088
Correspondent bank charges		38,732	32,864	25,742
Other expense		253,251	281,403	242,259
Total non-interest expense		2,967,012	2,839,583	2,486,139
Income before income taxes		1,338,950	1,851,066	2,161,279
Income tax expense		168,494	298,062	380,167
Net income		$         1,170,456	$         1,553,004	$         1,781,112
		Three months ended
		March 31,	December 31,	March 31,
Selected Financial Ratios and Other Financial Data (Unaudited)		2023	2022	2022
Average shares outstanding - basic		1,200,659	1,201,442	1,199,001
Average shares outstanding - diluted		1,200,703	1,201,491	1,199,318
Basic earnings per share		$                  0.97	$                  1.29	$                  1.49
Diluted earnings per share		$                  0.97	$                  1.29	$                  1.49
Net interest margin		3.35 %	3.73 %	3.80 %
Return on average assets		1.04 %	1.42 %	1.70 %
Return on average equity		10.75 %	14.84 %	15.07 %
Efficiency ratio		67.49 %	60.54 %	53.50 %
Allowance for loan losses:
Balance, beginning of period		$         3,996,619	$         4,024,366	$         3,998,392
Charge-offs:
One-to-four family		-	-	-
Commercial real estate		-	-	-
Land/land development		-	-	-
Commercial		-	-	-
Consumer		36,130	60,866	17,435
Gross charge-offs		36,130	60,866	17,435
Recoveries:
One-to-four family		-	13,099	955
Commercial real estate		-	40	218
Land/land development		-	-	-
Commercial		923	185	9,725
Consumer		20,093	19,795	12,219
Gross recoveries		21,016	33,119	23,117
Net charge-offs (recoveries)		15,114	27,747	(5,682)
CECL adjustment		350,000
Provision for loan losses		90,000	-	-
Balance, end of period		$         4,421,505	$         3,996,619	$         4,004,074
Net loan charge-offs (recoveries) to average loans		0.02 %	0.03 %	-0.01 %
		As of
		March 31,	December 31,	March 31,
Non-performing assets		2023	2022	2022
Loans:
Non-accrual		$         4,137,597	$         2,463,911	$         2,023,525
Past 90 days or more and still accruing		-	-	-
Troubled debt restructured		525,020	525,383	363,992
Total non-performing loans		4,662,617	2,989,294	2,387,517
Real estate owned		-	-	-
Other repossessed assets		-	-	-
Total non-performing assets		$         4,662,617	$         2,989,294	$         2,387,517
Non-performing assets to total assets		1.03 %	0.67 %	0.57 %
Non-performing loans to gross loans		1.41 %	0.92 %	0.84 %
Allowance for loan losses to non-performing loans		94.83 %	133.70 %	167.71 %
Allowance for loan losses to gross loans		1.34 %	1.23 %	1.41 %
Other financial ratios
Stockholders' equity as a % of total assets		9.69 %	9.68 %	10.80 %
Book value per share		$                36.02	$                35.80	$                37.60
Common shares outstanding		1,216,335	1,204,835	1,205,435
(1) Ratios for three-month periods are annualized

 

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SOURCE Northeast Indiana Bancorp, Inc.

FAQ

What were Northeast Indiana Bancorp's earnings for Q1 2023?

Northeast Indiana Bancorp reported net income of $1.17 million for Q1 2023.

How much did NIDB's net income decrease compared to Q1 2022?

Net income decreased by $610,000 compared to $1.78 million in Q1 2022.

What is Northeast Indiana Bancorp's current book value per share?

The book value per share as of March 31, 2023, is $36.02.

How have rising interest rates impacted NIDB's financials?

Rising interest rates have led to increased interest expenses, decreasing net interest income and margins.