InsCorp Quarterly Profits Reflect Benefits of Balance Sheet Strategies

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May 03, 2022, 22:18 ET

Nashville-based Lender Increases Semi-Annual Dividend 25%

NASHVILLE, Tenn., May 3, 2022 /PRNewswire/ -- InsCorp, parent company to INSBANK (OTCQX:IBTN) today reported first quarter earnings of $3,204,000, or $1.12 per share, an increase of 149% over the prior year same quarter. At the bank level, net interest income was $5,078,000, representing a 15% increase over the prior year. Pre-tax income from operations was $1,973,000, an increase of $489,000 over Q1 2021. In addition to income from operations, realized and unrealized gains on interest rate caps of $1,887,000, net of tax, were a driver of earnings, which was a record for the company in a single quarter.

"During the pandemic we executed hedging strategies to protect margin from further volatility during 2021 as we re-priced maturing deposits," said Jim Rieniets, President and CEO of INSBANK. "Fortunately those liabilities re-priced before recent volatility witnessed during the first quarter of this year, which resulted in an opportunity to enhance our capital base with gains on those interest rate caps," Rieniets continued.

Core deposits grew by $27,000,000 during the quarter to $511,000,000, while core loans (excluding Paycheck Protection Program loans) grew $4,500,000. Total new loan commitments closed during the quarter were roughly $40,000,000, while funding under those commitments was approximately $25,000,000. Net loan growth was impacted by payoffs primarily from clients selling commercial real estate and other assets. "While net loan growth was ultimately lighter than expected, our loan pipeline both extended and grew during the quarter," said Rieniets. "Activity in our market remains very vibrant and our team is busy managing the pipeline of opportunities before us, both in our core commercial banking unit as well as our Medquity healthcare silos," Rieniets continued.

The board of directors also recently approved the payment of a semi-annual dividend. InsCorp shareholders of record as of May 20, 2022, will receive a $0.15 dividend payable on June 10, 2022. This is an increase of 25% over the company's most recent semi-annual dividends. "With the trajectory of earnings our team has established, we're pleased to be able to further enhance our shareholders' total return with an increase in the dividend," said Michael Qualls, Chairman of InsCorp.

Highlights of the quarter and year-over-year include

Total assets grew $88 million or 13.9% as of March 31, 2022 compared to March, 31 2021.
Non-interest bearing deposits grew $11.3 million or 15.6% during the 12 months ended March 31, 2022.
Deferred loan fees related to the PPP loans is approximately $185,000 on March 31, 2022.
Non-Interest Expense to Total Average Assets was 1.79% for the quarter ended March 31, 2022, slightly higher than 1.70% for the same period in 2021 and compared favorably to the bank's FDIC peer group average of 2.32%.
Cost of all interest-bearing funding was 0.69% for the three months ended March 31, 2022 decreasing from 1.33% for the same period in 2021.
Assets per employee remained strong at $15.05 million, compared to the FDIC peer group of $6.91 million.
The bank's tier 1 capital ratio was 12.27%, while total risk-based capital was 13.52%.
The allowance for loan and lease losses was 1.50% exclusive of PPP loan balances.
Earnings per share for the first quarter of 2022 was $1.12.
Tangible book value increased to $19.89 on March 31, 2022 from $17.69 at March 31, 2021.
The percentage of loans past due and non-accrual to gross loans was 0.47% comparing favorably to peer of 0.76%.
There were $23,000 in net recoveries for the quarter ended March 31, 2022.
Accumulated Other Comprehensive Income (AOCI) reflected a loss on the securities portfolio offset by gains on interest rate swaps held by the bank for interest rate risk purposes, resulting in a 0.9% decrease in AOCI for the three months ended March 31, 2022.

About INSBANK

Since 2000, INSBANK has offered its clients highly personalized service provided by experienced relationship managers, while positioning itself as an innovator, utilizing technologies to deliver those services efficiently and conveniently. In addition to its commercial focused operation, INSBANK operates three divisions, Medquity, TMA Medical Banking and INSBANK Online. Medquity offers healthcare banking solutions to individuals nationwide, whether they are still in residency, practicing or entering retirement, while TMA Medical Banking provides banking services specifically to members of the Tennessee Medical Association. INSBANK Online offers nationally available virtual private client services for interest bearing deposits. INSBANK is owned by InsCorp, Inc., a Tennessee bank holding company. The bank is headquartered in Nashville at 2106 Crestmoor Road, and has an office in Brentwood at 5614 Franklin Pike Circle. For more information, please visit www.insbank.com

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

		*March 31,*	*December 31,*	*March 31,*
		2022	2021	2021
Assets
Cash and Cash Equivalents		$ 17,258	$ 16,680	$ 15,561
Interest Bearing Deposits		90,288	73,746	32,268
Securities		27,545	21,606	12,747

Loans		552,473	551,463	543,178
Allowance for Loan Losses		(8,193)	(8,025)	(7,515)
Net Loans		544,280	543,438	535,663

Premises and Equipment, net		13,275	13,345	13,519
Bank Owned Life Insurance		13,477	13,398	10,176
Restricted Equity Securities		9,225	9,054	8,147
Goodwill and Related Intangibles, net		1,091	1,091	1,091
Other Assets		8,490	8,247	7,549

Total Assets		$ 724,929	$ 700,605	$ 636,721

Liabilities and Shareholders' Equity
Liabilities
Deposits
	Non-interest-bearing	$ 84,190	$ 79,929	$ 72,858
	Interest-bearing	529,316	504,781	432,295
	Total Deposits	613,506	584,710	505,153

Federal Home Loan Bank Advances		30,000	32,000	45,000
Paycheck Protection Program Liquidity Fund		322	1,404	15,485
Subordinated Debentures		17,500	17,500	15,000
Federal Funds Purchased		-	4,000	-
Notes Payable		2,500	2,500	-
Other Liabilities		2,885	3,278	3,117
Total Liabilities		666,713	645,392	583,755

Shareholders' Equity
	Common Stock	32,241	32,087	31,325
	Treasury Stock	(3,150)	(3,150)	(681)
	Accumulated Retained Earnings	28,543	25,689	21,652
	Accumulated Other Comprehensive Income	582	587	670
	Total Stockholders' Equity	58,216	55,213	52,966
Total Liabilities & Shareholders' Equity		$ 724,929	$ 700,605	$ 636,721

Tangible Book Value		$ 19.89	$ 18.90	$ 17.69

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

		*Three Months Ended*	*Twelve Months Ended*	*Three Months Ended*
		*March 31, 2022*	*December 31, 2021*	*March 31, 2021*

Interest Income		$ 6,013	$ 24,901	$ 5,876
Interest Expense		935	4,690	1,431
Net Interest Income		5,078	20,211	4,445
Provision for Loan Losses		145	1,850	650
Non-Interest Income
	Service Charges on Deposit Accounts	57	240	59
	Bank Owned Life Insurance	79	283	60
	Gain on Security Sales	-	62	62
	Other	221	1,114	237
Non-Interest Expense
	Salaries and Benefits	2,035	7,332	1,654
	Occupancy and equipment	433	1,347	325
	Data Processing	154	597	147
	Marketing and Advertising	128	574	100
	Other	567	2,373	503
Net income from Operations		1,973	7,837	1,484

Gain in Interest Rate Hedges		2,516	748	443
Interest Expense-Subordinated Debt		233	992	239
Income Before Income Taxes		4,256	7,593	1,688
Income Tax Expense		(1,052)	(1,564)	(398)
Net Income		$ 3,204	$ 6,029	$ 1,290

Return on Weighted Average Common Shares		$ 1.12	$ 2.06	$ 0.44