INSBANK Parent, InsCorp, Inc., Reports Quarterly Profit Amid Pandemic Effects

Nashville Bank Approves $45 Million in Payroll Protection Program Loans for Local Businesses

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May 06, 2020, 17:28 ET

NASHVILLE, Tenn., May 6, 2020 /PRNewswire/ -- INSCORP, Inc. (the "Company") (OTCQX: IBTN), the parent company of INSBANK, reported first quarter net income of $732,877, or $0.25 per share, for the first quarter of 2020 compared to net income of $902,525, or $0.31 per share, for the first quarter of 2019. The decrease in profits was driven by two factors, both of which can be attributed to COVID19. During the quarter and due to anticipated challenges from the pandemic the Nashville-based lender added $300,000 to its loan loss reserve, increasing it from 1.15% to 1.22% of total loans outstanding. Multiple rate cuts by the Federal Reserve during the quarter contributed to a decline in net interest margin to 3.00% from 3.23% the prior quarter.

"While we don't manage the daily operations of the bank expecting a severe economic downturn and rate shock, we do manage related risks to minimize the impact and duration of such unforeseen events," said Jim Rieniets, President & CEO of INSBANK. "The bank's net interest margin, for example, is negatively impacted in the near term but should benefit from historically laddered liabilities of more than $220 million expected to reprice over the next five quarters."

Highlights for the quarter-ended March 31, 2020 include:

Non-performing assets to total loans and OREO were 0.68% at March 31, 2020, comparing favorably to the bank's FDIC peer group average of 0.87%
Annualized net charge-offs to average loans were 0.00% for the three months ended March 31, 2020 compared to 0.10% for the same period in 2019
Yield on assets was 4.42% for the three months ended March 31, 2020 compared to 4.72% for the same period in 2019
Non-interest-bearing deposits grew to $42.5 million, an increase of 15% over the past twelve months
Cost of interest-bearing funding was 1.93% for the three months ended March 31, 2020 decreasing from 2.03% for the same period in 2019
Efficiency ratio was 62.3% at March 31, 2020, comparing favorably to the bank's FDIC peer group average of 64.7%
Non-Interest Expense to Total Assets was 1.92% for the three months ended March 31, 2020, slightly higher than 1.85% for the same period in 2019
Annualized return on tangible common equity for the first quarter was 6.10%
Tangible book value increased $0.32 to $16.64 during the quarter by virtue of retained earnings and an increase in accumulated other comprehensive income

As of May 1, the bank had approved 202 Cares Act Payroll Protection Program loans totaling more than $45 million. Roughly 80% of the loans were to existing customers while the remainder were made to new clients. These funds will be used by the borrowers to support more than 5,200 jobs, primarily in the greater Nashville area.

"Our team quickly implemented the bank's pandemic plan and has been focused on working with our clients to address the challenges we face together whether in the form of modifying their current business loan, getting a PPP loan approved under the CARES Act, or employing alternative protocols so that an at-risk deposit-holder could renew a CD without leaving their home or having internet access," Rieniets continued. "The first quarter of 2020 began a new era for banking and many other industries; one that will test the decisions of our past, the resolve of our present, and the innovative capacity of our future. We expect our culture of respect and credo of "Where Genuine Matters" to be more relevant than ever in this time of uncertainty," said Jim Rieniets, President and CEO of INSBANK.

About INSBANK

Since 2000, INSBANK has offered its clients highly personal services provided by experienced relationship managers, and has utilized technologies to deliver those services efficiently and conveniently. TMA Medical Banking is a division of INSBANK which provides banking services to members of the Tennessee Medical Association. INSBANK is owned by InsCorp, Inc., a Tennessee bank holding company. The bank has offices in Nashville at 2106 Crestmoor Road, and in Brentwood at 5614 Franklin Pike Circle. For more information, please visit www.insbanktn.com.

InsCorp, Inc. Consolidated Balance Sheets (000's) (unaudited)

		*March 31,*	*December 31,*	*March 31,*
		2020	2019	2019
Assets
Cash and Cash Equivalents		$ 2,521	$ 5,342	$ 4,423
Interest Bearing Deposits		38,209	27,418	38,638
Securities		25,402	20,996	22,010

Loans		464,736	469,172	429,916
Allowance for Loan Losses		(5,680)	(5,380)	(4,954)
Net Loans		459,056	463,792	424,962

Premises and Equipment, net		13,894	13,982	14,147
Bank Owned Life Insurance		9,927	9,865	9,674
Restricted Equity Securities		6,119	5,866	4,676
Goodwill and Related Intangibles, net		1,091	1,091	1,091
Other Assets		6,721	5,022	4,018

Total Assets		$ 562,940	$ 553,374	$ 523,639

Liabilities and Shareholders' Equity
Liabilities
Deposits
	Non-interest-bearing	$ 42,576	$ 34,854	$ 37,070
	Interest-bearing	399,199	402,118	372,401
	Total Deposits	441,775	436,972	409,471

Federal Home Loan Bank Advances		51,000	49,000	45,000
Subordinated Debentures		15,000	15,000	15,000
Federal Funds Purchased			-	5,000
Other Liabilities		5,475	3,404	3,648
Total Liabilities		513,250	504,376	478,119

Shareholders' Equity
	Common Stock	30,773	30,993	30,759
	Accumulated Retained Earnings	18,677	17,944	14,908
	Accumulated Other Comprehensive Income	240	61	(147)
	Total Stockholders' Equity	49,690	48,998	45,520
Total Liabilities & Shareholders' Equity		$ 562,940	$ 553,374	$ 523,639

Tangible Book Value		$ 16.64	$ 16.32	$ 15.23

InsCorp, Inc. Consolidated Statements of Income (000's) (Unaudited)

		*Three Months Ended*	*Twelve Months Ended*	*Three Months Ended*
		*March 31, 2020*	*December 31, 2019*	*March 31, 2019*

Net Interest Income		$ 3,893	$ 16,069	$ 3,951
Provision for Loan Losses		300	725	225
Non-Interest Income
	Service Charges on Deposit Accounts	56	154	36
	Residential Mortgage Services	-	4	-
	Bank Owned Life Insurance	62	253	62
	Sale of Government Guaranteed Loans	-	384
	Other	175	600	97
Non-Interest Expense
	Salaries and Benefits	1,629	6,023	1,406
	Occupancy and equipment	295	1,160	273
	Data Processing	138	499	124
	Marketing and Advertising	91	379	78
	Other	513	1,988	565
Net income from Operations		1,220	6,690	1,475

Interest Expense-Subordinated Debt		239	956	239
Income Before Income Taxes		981	5,734	1,236
Income Tax Expense		(248)	(1,207)	(333)
Net Income		$ 733	$ 4,527	$ 903

Return on Weighted Average Common Shares		$ 0.25	$ 1.55	$ 0.31