HUNTINGTON, Ind., July 20 /PRNewswire-FirstCall/ -- Northeast Indiana Bancorp, Inc. (BULLETIN BOARD: NIDB) , the parent company of First Federal Savings Bank, today announced a net loss of ($455,000) ($0.34 per diluted common share) for the Company's second quarter ended June 30, 2007 compared to net income of $373,000 ($0.27 per diluted common share) for the second quarter ended June 30, 2006. The decrease between periods is primarily due to a significant increase in loan loss provisions of roughly $1.1 million between periods and specific reserves established on two real estate owned properties of roughly $90,000. Net income would have been approximately $264,000 ($0.20 per diluted common share) without these two items.
Net interest income decreased to $1.2 million for the quarter ended June 30, 2007 when compared to $1.3 million for the quarter ended June 30, 2006. The Company's net interest margin declined to 2.21% for the current quarter compared to 2.39% in the year earlier quarter. However, the current quarter's 2.21% net interest margin was basically flat with the 2.22% net interest margin reported for the linked quarter ended March 31, 2007.
The Company made a $1.13 million provision for loan loss during the quarter ended June 30, 2007 compared to a $45,000 provision for loan loss for the quarter ended June 30, 2006. The significant provision became necessary due to continued weak local economic conditions and more specifically, further deterioration in two commercial relationships that had been in non-accrual status for the past two years. Management continues to pursue legal remedies against both borrowers. No new significant accounts were added to non- performing assets during the quarter ended June 30, 2007. Primarily due to the charge off of the second borrower, net charge-offs increased to $582,000 for the quarter ended June 30, 2007 compared to $242 for the quarter ended June 30, 2006.
Noninterest income increased by $40,000 or 7.9% to $543,000 during the quarter ended June 30, 2007 when compared to $503,000 in the same period a year ago. This was primarily due to increases in net realized gain on the sale of loans, increased brokerage fees and increases in electronic banking fees between periods.
Noninterest expense increased $142,000 to $1.5 million for the quarter ended June 30, 2007 compared to $1.4 million for the quarter ended June 30, 2006. This increase was primarily related to the establishment of $90,000 in specific reserves on two real estate owned properties.
Net income for the six months ended June 30, 2007 decreased to a net loss of ($150,000) compared to net income of $821,000 for the six months ended June 30, 2006. This decrease is mainly due to the increased provision for loan loss of $1.1 million and the establishment of $90,000 in specific reserves against two real estate owned properties during the current quarterly period as discussed above. Noninterest income decreased $52,000 to $1.1 million for the quarter ended June 30, 2007 compared to $1.15 million for the quarter ended June 30, 2006.
However, the prior year six month period contained a roughly $220,000 non- recurring gain on the sale of the bank's former credit card portfolio. Noninterest expenses increased $212,000 to $3.0 million for the six months ended June 30, 2007 compared to $2.8 million for the six months ended June 30, 2006 with $90,000 due to the creation of the specific reserve on bank owned properties during the current year's quarter as discussed above.
Total assets at June 30, 2007 of $243.1 million were increased compared to December 31, 2006 assets of $230.0 million. This is primarily due to short term increases in securities sold under repurchase agreement accounts of $13.7 million. Net loans decreased $1.1 million to $175.0 million at June 30, 2007 compared to $176.1 million at December 31, 2006. Total deposits increased $3.3 million to $128.0 million at June 30, 2007 from $124.7 million at December 31, 2006 with $2.5 million of that increase in non-interest bearing demand account balances.
Shareholder's equity was $23.1 million at June 30, 2007 compared to $24.2 million at December 31, 2006. The Company repurchased 11,267 shares on the open market at an average cost of $15.99 for a total cost of $180,150 during the six months ended June 30, 2007. In the opinion of management, these repurchases help leverage Northeast Indiana Bancorp's remaining equity and tend to improve return on shareholder's equity. The Company has approximately 60,000 shares that may be repurchased under the current stock repurchase program, which was previously announced.
The book value of the Company's stock was $17.24 per common share as of June 30, 2007. The number of outstanding common shares was 1,337,692 as of the same date. The last reported trade of the stock on July 18, 2007 was $16.00 per common share.
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 three full service branches located in Huntington, Indiana and one full service branch located in Warsaw, Indiana. The Company is traded on the Over the Counter Bulletin Board 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
June 30, December 31,
2007 2006
Interest-earning cash and cash equivalents $18,781,922 $1,813,138
Noninterest earning cash and cash
equivalents 2,788,720 2,666,733
Total cash and cash equivalents 21,570,642 4,479,871
Securities available for sale 31,980,974 34,606,580
Loans held for sale - 100,000
Loans receivable, net of allowance for
loan loss June 30, 2007 $2,565,473
and December 31, 2006 $1,964,467 174,994,223 176,140,667
Accrued interest receivable 1,082,055 1,046,382
Premises and equipment 2,375,891 2,407,455
Investments in limited liability
partnerships 792,849 908,463
Cash surrender value of life insurance 5,888,417 5,768,605
Other assets 4,430,694 4,544,245
Total Assets $243,115,745 $230,002,268
LIABILITIES AND STOCKHOLDERS' EQUITY
Non-interest bearing deposits 10,126,786 7,623,325
Interest bearing deposits 117,832,671 117,080,719
Total deposits 127,959,457 124,704,044
FHLB Advances 63,250,000 66,000,000
Securities sold under repurchase agreements 26,842,648 13,169,681
Accrued interest payable and other
liabilities 2,001,975 1,937,138
Total Liabilities 220,054,080 205,810,863
Retained earnings - substantially
restricted 23,061,665 24,191,405
Total Liabilities and Shareholder's
Equity $243,115,745 $230,002,268
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Six Months Ended
June 30, June 30,
2007 2006 2007 2006
Total interest income $3,531,254 $3,357,164 $6,860,070 $6,589,129
Total interest expense 2,302,443 2,038,853 4,469,568 3,876,020
Net interest income $1,228,811 $1,318,311 2,390,502 $2,713,109
Provision for loan
losses 1,130,000 45,000 1,175,000 90,000
Net interest income
after provision for
loan losses $98,811 $1,273,311 $1,215,502 $2,623,109
Service charges on
deposit accounts 180,263 164,274 330,706 311,781
Net gain on sale of
securities - 47,112 64,726 47,112
Net gain on sale of
loans 61,179 25,773 97,399 259,406
Net gain (loss) on
sale of repossessed
assets (27,114) (1,296) (23,241) (5,204)
Brokerage fees 122,041 92,606 228,379 174,039
Other income 207,117 175,095 400,136 362,625
Total noninterest income $543,486 $503,564 $1,098,105 $1,149,759
Salaries and employee 797,917 796,557 1,605,351 1,590,444
Occupancy 172,949 124,065 347,747 247,778
Data processing 153,406 145,977 325,620 303,624
Deposit insurance
premiums 3,758 4,079 7,611 8,404
Professional fees 42,882 57,415 81,312 100,019
Correspondent bank
charges 57,217 68,326 109,091 138,947
Other expense 302,889 192,451 524,982 400,845
Total noninterest
expenses $1,531,018 $1,388,870 $3,001,714 $2,790,061
Income / (Loss) before
income tax expenses $(888,721) $388,005 $(688,107) $982,807
Income tax expense
(benefit) (434,085) 15,312 (538,326) 162,023
Net Income / (Loss) $(454,636) $372,693 $(149,781) $820,784
NORTHEAST INDIANA BANCORP
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2007 2006 2007 2006
Basic Earnings per
common share (0.34) 0.27 (0.11) 0.60
Dilutive Earnings per
share (0.34) 0.27 (0.11) 0.60
Net interest margin 2.21% 2.39% 2.22% 2.49%
Return on average assets (0.76%) 0.63% (0.13%) 0.70%
Return on average equity (7.64%) 6.21% (1.26%) 6.82%
Average shares outstanding
-primary 1,335,874 1,359,557 1,337,415 1,369,027
Average shares outstanding
- diluted 1,335,874 1,361,157 1,337,415 1,371,773
Allowance for loan losses:
Balance at beginning of
period $2,017,418 $3,118,986 $1,964,467 $3,093,985
Charge-offs:
One-to-four family 3,102 - 3,102 -
Commercial real estate 44,101 - 44,101 6,346
Commercial 554,694 - 554,694 -
Consumer 3,578 21,397 7,105 55,623
Gross charge-offs 605,475 21,397 609,002 61,969
Recoveries:
One-to-four family - - - -
Commercial real estate - 1,606 - 4,154
Commercial 3,000 2,000 6,100 2,000
Consumer 20,529 17,549 28,908 35,574
Gross recoveries 23,529 21,155 35,008 41,728
Net charge-offs 581,946 242 573,994 20,241
Additions charged to
operations 1,130,000 45,000 1,175,000 90,000
Balance at end of
period $2,565,473 $3,163,744 $2,565,473 $3,163,744
Net loan charge-
offs to average
loans (1) 0.32% 0.00% 0.32% 0.01%
Nonperforming assets
(000's) At June 30, At March 31, At December 31,
Loans: 2007 2007 2006
Non-accrual $1,657 $1,874 $1,868
Past 90 days or more
and still accruing - - -
Troubled debt
restructured 1,582 1,581 1,590
Total nonperforming
loans 3,239 3,455 3,458
Real estate owned 1,429 1,581 1,774
Other repossessed assets - - 28
Total nonperforming
assets $4,668 $5,036 $5,260
Nonperforming assets to
total assets 1.92% 2.22% 2.29%
Nonperforming loans to
total loans 1.82% 1.97% 1.94%
Allowance for loan losses
to nonperforming loans 79.19% 58.38% 56.80%
Allowance for loan losses
to net loans receivable 1.44% 1.15% 1.10%
At June 30,
2007 2006
Stockholders' equity as a
% of total assets 9.49% 10.16%
Book value per share $17.24 $17.51
Common shares outstanding
- EOP 1,337,692 1,364,859
(1) Ratios for the three-month periods are annualized.
