NORTHEAST INDIANA BANCORP, INC. ANNOUNCES FOURTH QUARTER AND ANNUAL EARNINGS

Rhea-AI Summary

Northeast Indiana Bancorp, Inc. (NIDB) announces $4.3 million net income for 2023, a decline from $6.6 million in 2022. The bank experienced margin pressure, increased provision expenses, and higher overhead expenses. Total assets increased to $498.7 million, with net loans rising to $370.7 million and total deposits to $401.1 million. Stockholder's equity increased to $46.4 million. First Federal Savings Bank was named to American Banker Magazine's Top 200 Community Banks for the 12th consecutive year and maintained its position on the Dividend Champions List. President and CEO Michael Zahn expressed satisfaction with the bank's performance despite challenges.

Positive

• None.

Negative

• Net income declined from $6.6 million in 2022 to $4.3 million in 2023
• Margin pressure led to a reduction in net interest income
• Provision expenses increased by $1.1 million due to the implementation of the new CECL accounting standard
• Overhead expenses increased by $1.1 million in 2023

HUNTINGTON, Ind., Jan. 23, 2024 /PRNewswire/ -- Northeast Indiana Bancorp, Inc. (OTCQB:  NIDB), the parent company of First Federal Savings Bank, today announced net income for the full year of 2023 was $4.3 million, or $1.77 per diluted common share, compared to net income of $6.6 million, or $2.73 per diluted common share for the full year of 2022.  The annual earnings of 2023 equate to a return on average assets (ROA) ratio of 0.90% and a return on average equity (ROE) ratio of 9.72% compared to ROA of 1.54% and ROE of 14.90% for the full year of 2022. 

Net income for the fourth quarter ended December 31, 2023 was $741,000, or $0.31 per diluted common share, compared to net income of $1.6 million, or $0.65 per diluted common share for the fourth quarter ended December 31, 2022.  The current quarter earnings equate to an annualized ROA of 0.60% and an annualized ROE of 6.75% compared to an annualized ROA of 1.42% and an annualized ROE of 14.84% for the fourth quarter ended December 31, 2022. 

Factoring into the decline of net income was margin pressure throughout 2023 leading to a reduction in net interest income of $730,000 compared to the same period in 2022.  Provision expenses increased by $1.1 million as implementation of the new CECL accounting standard during the year required the bank to increase the allowance for loan loss reserve to account for its strong loan growth in 2023.   Overhead expenses increased by $1.1 million during 2023 with employee compensation and benefits higher by $650,000 as compared to 2022.

Total Assets increased $53.2 million to $498.7 million at December 31, 2023 compared to $445.5 million at December 31, 2022.  This increase was primarily due to net loans increasing $49.9 million, or 15.6% in 2023, to $370.7 million as of December 31, 2023 compared to $320.8 million as of December 31, 2022.  Total deposits increased $34.3 million, or 9.3% in 2023, to $401.1 million at December 31, 2023 compared to $366.8 million at December 31, 2022.  Stockholder's equity increased $3.3 million to $46.4 million at December 31, 2023 compared to $43.1 million at December 31, 2022.  Contributing to this increase was a $1.5 million improvement in the bank's net unrealized loss position in the investment portfolio.  The book value of NIDB's stock was $19.15 per common share and the tangible common equity ratio was 9.31% as of December 31, 2023. 

In the current year, Northeast Indiana Bancorp and First Federal Savings Bank have been recognized for its performance.  First Federal Savings Bank was named to American Banker Magazine's Top 200 Community Banks for the 12th consecutive year for 2022. The magazine qualifies banks for this listing if they have less than $2 billion in total assets and are publicly traded. FFSB came in at #59 on this year's list of the top 200 publicly traded community banks. This is a 3-spot improvement from #62 in 2021. The magazine ranked the institutions based on the profitability metric, Return on Average Equity, over a 3-year period. Only 11 banks from the state of Indiana made this elite list and First Federal Savings Bank ranked 3^rd in the State.

In addition, Northeast Indiana Bancorp, Inc., the holding company for First Federal Savings Bank, maintained its position on the Dividend Champions List.  To achieve Champion status, a company must increase its dividend payments to its shareholders for 25 consecutive years.  Northeast Indiana Bancorp is one of 150 companies in the United States to achieve this status and one of five companies from Indiana.  With the latest dividend increase in the fourth quarter of 2023, Northeast Indiana Bancorp has increased dividends 29 years in a row.

Michael Zahn, President and CEO, states "The Bank had another strong year despite the challenging interest rate environment and implementation of new accounting rules as it relates to our loan loss reserve.  I'm very pleased with our loan and deposit growth and the recognitions we continue to receive.  Our team is second to none and provides exceptional service to our customers and communities.  We will continue to invest in talent as we grow.   Our dedication to community banking is the cornerstone of who we are and drives our continued goal of enhancing shareholder value moving forward." 

*All share data has been adjusted to reflect Northeast Indiana Bancorp, Inc.'s two-for-one stock split effective July 14, 2023.

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
		December 31,	December 31,
Balance Sheet (Unaudited)		2023	2022
			(Audited)
Assets
Non-interest earning cash and cash equivalents		$          4,304,296	$           3,141,705
Interest-earning cash and cash equivalents		1,166,180	747,920
Total cash and cash equivalents		5,470,476	3,889,625
Interest-earning time deposits		4,320,000	1,230,000
Securities available for sale		76,228,755	78,273,337
Securities held to maturity		12,754,763	12,062,446
Loans held for sale		-	189,600
Loans, gross		375,992,822	324,752,497
Allowance for loan losses		(5,335,305)	(3,996,619)
Loans, net		370,657,517	320,755,878
Accrued interest receivable		2,354,636	1,923,986
Premises and equipment		7,366,169	7,254,951
FHLB Stock		2,227,500	2,101,600
Investment in limited partnerships		928,334	1,228,334
Cash surrender value of life insurance		11,751,653	11,629,618
Other assets		4,624,206	4,988,219
Total Assets		$      498,684,009	$      445,527,594
Liabilities and Stockholders' Equity
Non-interest bearing deposits		$        54,764,981	$         53,232,315
Interest bearing deposits		346,307,200	313,584,014
Borrowed funds		47,250,000	32,000,000
Accrued interest payable and other liabilities		3,941,438	3,584,163
Total Liabilities		452,263,619	402,400,492
Stockholders' equity		46,420,390	43,127,102
Total Liabilities and Stockholders' Equity		$      498,684,009	$      445,527,594
		Three months ended				Twelve months ended
		December 31,	September 30,	December 31,		December 31,	December 31,
Income Statement (Unaudited)		2023	2023	2022		2023	2022
Net interest income
Total interest income		$          6,702,608	$           6,354,262	$            5,071,415		$        24,158,344	$       17,551,740
Total interest expense		2,952,000	2,610,737	1,120,123		9,584,701	2,244,786
Net interest income		3,750,608	3,743,525	3,951,292		14,573,643	15,306,954
Provision for loan losses		780,000	90,000	-		1,050,000	-
Net interest income after provision for loan losses		2,970,608	3,653,525	3,951,292		13,523,643	15,306,954
Non-interest income
Service charges on deposit accounts		184,623	184,111	198,715		734,612	741,330
Interchange fees		195,918	199,248	193,610		787,690	784,129
Loan servicing fees		108,432	102,753	62,712		414,958	354,009
Net gain on sale of loans		67,979	115,722	66,083		329,174	613,364
Brokerage fees		29,086	44,957	41,034		184,326	203,357
Increase in cash surrender value of life insurance		75,763	74,217	74,955		296,990	297,677
Other income		73,390	37,652	102,248		458,274	350,771
Total non-interest income		735,191	758,660	739,357		3,206,024	3,344,637
Non-interest expense
Salaries and employee benefits		1,443,480	1,604,968	1,513,293		6,416,398	5,768,201
Occupancy		340,005	330,735	383,944		1,381,140	1,368,039
Data processing		387,894	397,132	371,655		1,573,667	1,461,156
Deposit insurance premiums		54,000	46,000	28,500		205,500	116,000
Professional fees		207,204	173,208	138,903		634,672	479,529
Advertising and marketing fees		129,495	13,909	89,021		311,634	268,029
Correspondent bank charges		39,288	35,395	32,864		148,756	122,585
Other expense		335,295	386,385	281,403		1,258,685	1,199,405
Total non-interest expense		2,936,661	2,987,732	2,839,583		11,930,452	10,782,944
Income before income taxes		769,138	1,424,453	1,851,066		4,799,215	7,868,647
Income tax expense		27,866	193,172	298,062		539,525	1,316,051
Net income		$             741,272	$           1,231,281	$            1,553,004		$          4,259,690	$          6,552,596
		Three months ended				Twelve months ended
		December 31,	September 30,	December 31,		December 31,	December 31,
Selected Financial Ratios and Other Financial Data (Unaudited)		2023	2023	2022		2023	2022
Average shares outstanding - basic		2,401,584	2,402,070	2,399,770		2,401,745	2,400,103
Average shares outstanding - diluted		2,401,584	2,402,094	2,399,914		2,401,773	2,400,409
Basic earnings per share		$                    0.31	$                    0.51	$                      0.65		$                    1.77	$                   2.73
Diluted earnings per share		$                    0.31	$                    0.51	$                      0.65		$                    1.77	$                   2.73
Net interest margin		3.16 %	3.21 %	3.73 %		3.20 %	3.76 %
Return on average assets		0.60 %	1.02 %	1.42 %		0.90 %	1.54 %
Return on average equity		6.75 %	11.16 %	14.84 %		9.72 %	14.90 %
Efficiency ratio		65.47 %	66.36 %	60.54 %		67.10 %	57.81 %
Allowance for loan losses:
Balance, beginning of period		$          4,529,631	$           4,508,446	$            4,024,366		$          3,996,619	$          3,998,392
Charge-offs:
One-to-four family		-	21,457	-		27,466	-
Commercial real estate		-	-	-		-	-
Land/land development		-	-	-		-	-
Commercial		-	-	-		-	-
Consumer		68,491	73,324	60,866		198,755	139,976
Gross charge-offs		68,491	94,781	60,866		226,221	139,976
Recoveries:
One-to-four family		10,664	586	13,099		11,249	15,689
Commercial real estate		-	-	40		-	478
Land/land development		-	-	-		-	-
Commercial		200	600	185		3,930	49,910
Consumer		38,301	24,780	19,795		104,728	72,126
Gross recoveries		49,165	25,966	33,119		119,907	138,203
Net charge-offs (recoveries)		19,326	68,815	27,747		106,314	1,773
CECL adjustment		-	-	-		350,000	-
Provision for loan losses		825,000	90,000	-		1,095,000	-
Balance, end of period		$          5,335,305	$           4,529,631	$            3,996,619		$          5,335,305	$          3,996,619
Net loan charge-offs (recoveries) to average loans		0.02 %	0.08 %	0.03 %		0.03 %	0.00 %
		As of
		December 31,	September 30,	December 31,
Non-performing assets		2023	2023	2022
Loans:
Non-accrual		$          6,415,623	$           3,667,841	$            2,463,911
Past 90 days or more and still accruing		-	-	-
Troubled debt restructured		524,970	524,970	525,383
Total non-performing loans		6,940,593	4,192,811	2,989,294
Real estate owned		-	-	-
Other repossessed assets		-	-	-
Total non-performing assets		$          6,940,593	$           4,192,811	$            2,989,294
Non-performing assets to total assets		1.39 %	0.87 %	0.67 %
Non-performing loans to gross loans		1.85 %	1.15 %	0.92 %
Allowance for loan losses to non-performing loans		76.87 %	108.03 %	133.70 %
Allowance for loan losses to gross loans		1.42 %	1.24 %	1.23 %
Other financial ratios
Tangible common equity		9.31 %	9.05 %	9.68 %
Book value per share		$                 19.15	$                  18.08	$                    17.90
Common shares outstanding		2,423,698	2,425,670	2,409,670
(1) Ratios for three-month periods are annualized
(2) All share data has been adjusted for the 2:1 stock split on July 14, 2023.

 

View original content:https://www.prnewswire.com/news-releases/northeast-indiana-bancorp-inc-announces-fourth-quarter-and-annual-earnings-302042368.html

SOURCE Northeast Indiana Bancorp, Inc.

FAQ

What was Northeast Indiana Bancorp, Inc.'s net income for 2023?

Northeast Indiana Bancorp, Inc. reported a net income of $4.3 million for 2023.

What caused the decline in net income for Northeast Indiana Bancorp, Inc.?

The decline in net income was due to margin pressure, increased provision expenses, and higher overhead expenses.

How much did total assets increase to in 2023?

Total assets increased to $498.7 million in 2023.

What recognition did First Federal Savings Bank receive?

First Federal Savings Bank was named to American Banker Magazine's Top 200 Community Banks for the 12th consecutive year and maintained its position on the Dividend Champions List.

Who is the President and CEO of Northeast Indiana Bancorp, Inc.?

Michael Zahn is the President and CEO of Northeast Indiana Bancorp, Inc.