HUNTINGTON, Ind., Feb. 17 /PRNewswire-FirstCall/ -- Northeast Indiana Bancorp, Inc. (BULLETIN BOARD: NIDB) , the parent company of First Federal Savings Bank, today announced earnings for the year ended December 31, 2005 of $258,000 ($0.19 per diluted common share) compared to net income of $982,000 ($0.67 per diluted common share) for the year ended December 31, 2004. The year ended December 31, 2005 was impacted negatively by a $2.14 million provision for loan loss compared to a $37,500 provision for loan loss in the year earlier period. The significantly higher provision for loan loss became necessary during 2005 to allocate necessary allowances against two commercial lending relationships whose financial ability to repay loans under contractual terms became impaired. The specific allocations towards these two commercial lending relationships account for $1.95 million of the $2.14 million in loan loss provisions for the year ended December 31, 2005. The Company's net income would have been $1.4 million ($1.04 per diluted common share) for the year ended December 31, 2005 without the excess provision for loan loss.
Net interest income decreased $419,000 to $6.0 million for the year ended December 31, 2005 when compared to $6.4 million for the year ended December 31, 2004. This decrease was primarily related to rates increasing faster on interest bearing liabilities than on interest earning assets in 2005 compared to 2004. The Company's net interest margin declined to 2.73% for the twelve months ended December 31, 2005 versus 2.97% for the twelve months ended December 31, 2004.
Northeast Indiana Bancorp, Inc. saw increases in non-performing asset trends during 2005 solely due to the previously mentioned two commercial lending relationships, which represent $4.7 million or 77.0% of the $6.1 million in non-performing assets reported at December 31, 2005. The Company's non-performing assets were $1.9 million or 0.8% of total assets at December 31, 2004. Net charge-offs decreased to $404,000 for the twelve months ended December 31, 2005 versus $452,000 during the same period of 2004.
Noninterest income was $1.9 million for the year ended December 31, 2005, an increase of $1.2 million or 161.4% compared to $720,000 reported for the year ended December 31, 2004. Noninterest income was negatively impacted in 2004 by a $735,000 non-cash impairment charge against certain FHLMC and FNMA preferred stocks in the investment portfolio.
Without considering the non-cash impairment charge, noninterest income would still have increased $427,000 or 29.3% from an adjusted $1.5 million for the twelve months ended December 31, 2004 compared to $1.9 million for the current twelve month period. Most of the increase came from sharp increases in both service charges on deposits and brokerage fees.
Non-interest expenses increased to $5.8 million for the year ended December 31, 2005 compared to $5.5 million for the year ended December 31, 2004. This increase came primarily from increased data processing, professional fees, correspondent bank charges, and other expenses. Professional fees and other expenses increased primarily from costs associated with de-registering with the SEC during the first and second quarters of 2005.
Net income was reported at $(55,000) for the three months ended December 31, 2005 compared to $(275,000) for the year earlier quarter. The current quarter was negatively impacted by a $640,000 provision for loan loss while the three months ended December 31, 2004 was negatively impacted by the $735,000 non-cash impairment charge on certain FHLMC and FNMA investment securities. Net interest income saw a decline between quarterly periods due to net interest margin compression that was further amplified by significantly higher non accrual loan balances for the current quarter ended December 31, 2005 compared to the quarter one year ago. Without considering the non-cash impairment charge in the year earlier quarter, noninterest income was $75,000 or 16.3% higher at $531,000 for three months ended December 31, 2005 compared to an adjusted $456,000 for the three months ended December 31, 2004. Noninterest expenses saw a slight decline between three month periods.
Total assets at December 31, 2005 of $232.8 million compared to December 31, 2004 assets of $228.7 million. Net loans receivable increased $895,000 to $175.7 million at December 31, 2005 from $174.8 million at December 31, 2004. Deposits increased to $128.5 million at December 31, 2005 from $124.0 million at December 31, 2004
Shareholders' equity at December 31, 2005 was $23.9 million compared to the $26.0 million reported at December 31, 2004. The company repurchased 48,158 shares of treasury stock, at an average cost of $20.34, for a total cost of approximately $979,000 during the year ended December 31, 2005. In the opinion of management, these repurchases help leverage Northeast Indiana Bancorp's remaining equity and tend to improve return on shareholders' equity. Northeast Indiana Bancorp has approximately 62,000 shares that may be repurchased under the current stock repurchase program, which was previously announced. In addition to the share repurchases, a reverse/forward stock split was approved at the annual shareholders' meeting in June 2005 and approximately 46,684 shares were cashed out under that program for a total cost of $1.1 million. This transaction enabled Northeast Indiana Bancorp, Inc. to de-register with the SEC.
The book value of NEIB's stock was $17.58 per common share as of December 31, 2005. The number of outstanding common shares was 1,356,637. The last reported trade of the stock on December 31, 2005 was $17.40 per common share.
Northeast Indiana Bancorp, Inc. is headquartered at 648 North Jefferson Street, Huntington, Indiana. The company offers a full array of banking, trust, and financial brokerage services to its customers through three full service branches located in Huntington, Indiana. The company is traded on the Over the Counter Bulletin Board ("OTCBB") under the symbol "NIDB".
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
(Unaudited)
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
ASSETS
December 31, December 31,
2005 2004
Interest-earning cash and
cash equivalents $4,081,948 $1,142,340
Noninterest earning cash and
cash equivalents 3,365,826 2,242,859
Total cash and cash equivalents 7,447,774 3,385,199
Securities available for sale 36,894,920 38,903,998
Securities held to maturity estimated
market value of $0 and $60,000 at
December 31, 2005 and December 31, 2004 - 60,000
Loans receivable, net of allowance
for loan loss December 31, 2005
$3,093,985 and
December 31, 2004 $1,357,505 175,694,369 174,800,272
Accrued interest receivable 952,512 830,837
Premises and equipment 2,504,341 2,175,981
Investments in limited
liability partnerships 1,139,691 1,370,919
Cash surrender value of life insurance 5,557,887 5,159,178
Other assets 2,646,156 1,985,839
Total Assets $232,837,650 $228,672,223
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits 128,505,603 123,950,768
Borrowed Funds 78,793,197 77,066,576
Accrued interest payable and
other liabilities 1,685,499 1,608,346
Total Liabilities 208,984,299 202,625,690
Retained earnings - substantially
restricted 23,853,351 26,046,533
Total Liabilities and
Shareholders' Equity $232,837,650 $228,672,223
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Twelve Months Ended
December 31, December 31,
2005 2004 2005 2004
Total interest income $3,168,379 $3,071,645 $12,556,469 $12,103,226
Total interest expense 1,813,383 1,431,383 6,587,776 5,715,241
Net interest income $1,354,996 $1,640,262 $5,968,693 $6,387,985
Provision for loan losses 640,000 37,500 2,140,000 37,500
Net interest income
after provision
for loan losses $714,996 $1,602,762 $3,828,693 $6,350,485
Service charges on
deposit accounts 217,356 170,129 696,231 529,665
Net loss on
securities - (735,500) - (716,364)
Net gain on
sale of loans 16,127 13,928 69,503 89,164
Net gain on sale of
repossessed assets 29,164 11,588 35,859 884
Brokerage fees 84,716 76,782 335,642 102,226
Other income 183,801 184,186 745,787 714,795
Total noninterest income $531,164 $(278,887) $1,883,022 $720,370
Salaries and
employee benefits 788,942 832,154 3,133,559 3,106,407
Occupancy 122,363 122,648 478,923 456,225
Data processing 163,729 161,461 693,612 645,002
Deposit insurance
premiums 4,298 4,718 17,630 18,840
Professional fees 42,773 60,461 283,268 257,495
Correspondent
bank charges 66,364 53,373 260,629 216,063
Other expense 223,751 194,898 891,119 777,122
Total noninterest
expenses $1,412,220 $1,429,713 $5,758,740 $5,477,154
Income/(Loss) before
income tax expense $(166,060) $(105,838) $(47,025) $1,593,701
Income tax
expense/(benefit) (111,203) 169,410 (304,870) 611,479
Net Income/(Loss) $(54,857) $(275,248) $257,845 $982,222
NORTHEAST INDIANA BANCORP
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2005 2004 2005 2004
Basic Earnings
per common share (0.04) (0.20) 0.19 0.69
Dilutive Earnings per share (0.04) (0.20) 0.19 0.67
Net interest margin 2.47% 2.96% 2.73% 2.97%
Return on average assets (0.09)% (0.47)% 0.11% 0.43%
Return on average equity (0.92)% (4.24)% 1.03% 3.70%
Average shares
outstanding - primary 1,327,335 1,381,620 1,356,090 1,415,729
Average shares
outstanding - diluted 1,327,335 1,381,620 1,383,469 1,463,908
Allowance for loan losses:
Balance at beginning
of period $2,489,607 $1,461,051 $1,357,505 $1,772,109
Charge-offs:
One-to-four family - - 84,387 2,907
Commercial
real estate 16,135 49,531 278,479 257,749
Commercial - 73,460 1,654 73,460
Consumer 73,434 38,593 201,076 274,399
Gross charge-offs 89,568 161,584 565,595 608,515
Recoveries:
One-to-four family - - 7,893 -
Commercial real estate - - - -
Commercial 41,101 - 62,248 10,000
Consumer 12,486 20,538 91,934 146,411
Gross recoveries 53,947 20,538 162,075 156,411
Net charge-offs
(recoveries) 35,622 141,046 403,520 452,104
Additions charged to
operations 640,000 37,500 2,140,000 37,500
Balance at end
of period $3,093,985 $1,357,505 $3,093,985 $1,357,505
Net loan charge-offs
(recoveries) to
average loans (1) 0.08% 0.31% 0.30% 0.26%
Nonperforming At At At At
assets (000's) December 31, September 30, June 30, December 31,
Loans: 2005 2005 2005 2004
Non-accrual $4,395 $3,727 $3,063 $1,713
Past 90 days or
more and still
accruing - - - -
Troubled debt
restructured 1,658 1,658 - -
Total
nonperforming
loans 6,053 5,385 3,063 1,713
Real estate owned - 280 204 204
Other repossessed
assets 28 22 30 7
Total
nonperforming
assets $6,081 $5,687 $3,297 $1,924
Nonperforming assets
to total assets 2.61% 2.46% 1.44% 0.84%
Nonperforming loans
to total loans 3.39% 3.05% 1.75% 0.97%
Allowance for loan
losses to
nonperforming loans 51.12% 46.24% 52.99% 79.30%
Allowance for loan
losses to total
receivable 1.73% 1.41% 0.93% 0.77%
At December 31,
2005 2004
Stockholders' equity as a % of total assets 10.24% 11.39%
Book value per share $17.58 $18.33
Common shares outstanding - EOP 1,356,637 1,420,779
(1) Ratios for the three-month periods are annualized.
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