InsCorp Reports Q2 Profits Driven by Loan Growth

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Aug 03, 2022, 16:00 ET

Nashville-Based Lender Adds Local Bank Investor to its Board of Directors

NASHVILLE, Tenn., Aug. 3, 2022 /PRNewswire/ -- Today InsCorp, parent company to INSBANK (OTCQX:IBTN), reported a second quarter net profit of $2,247,000 or, $0.78 per share, representing a 64.1% increase over the second quarter of 2021. Year-to-date earnings are $5,451,000, or $1.90 per share. Net interest income for the quarter was $5,883,000, which was a 20.5% increase over the prior year same quarter, and a 15.9% increase over the first quarter of 2022. Loan growth of $45 million for the quarter contributed to the expansion of both net interest margin and operating income. Operating income, excluding non-recurring items and one-time gains, was $2,837,000, as compared to $2,097,000 during the first quarter of the year. "Our team developed a robust loan pipeline in the early part of the year, and the second quarter saw those efforts come to fruition", said Jim Rieniets, President & CEO of INSBANK. "Loan demand has been well-balanced between both local businesses and healthcare borrowers nationwide thru our Medquity division," Rieniets continued.

Interest-bearing deposit balances decreased modestly during the quarter, while transaction account balances increased. The cost of interest-bearing funding was 0.71%, increasing from 0.69% the prior quarter. The slight increase in funding cost came at a time when the Fed had increased overnight rates by 100 basis points. Quarterly operating expenses of $3,159,000 equated to 1.73% of assets, and contributed to an efficiency ratio of 42.6%, which compares favorably to the bank's historical peer group average. Asset quality measures remained strong with non-performing assets of 0.40% and past due loans totaling 0.03%. "It goes without saying that we're navigating uncertainty in this economy, with an unprecedented combination of inflationary pressures, on-going supply chain disruption; and perils of a geo-political crisis in Europe," said Jim Rieniets. "Historically INSBANK has held a steady hand in extending credit, and plans to be a consistent partner to our customers as we head into uncharted waters."

Recently InsCorp, Inc. shareholders elected Hope Lundt to join the company's board of directors at its annual meeting. Ms. Lundt has more than 30 years' experience in the financial industry and is a graduate of Vanderbilt University. Today, she serves as managing partner and fund manager for Spence Limited, LP, an investment partnership established by John Spence 30 years ago. "Our board and members of management are pleased that Hope is part of the INSBANK team," said Mike Qualls, chairman of InsCorp. "Her depth of experience and knowledge of the financial services industry will enhance our board-level resources as the bank continues to innovate, grow scale economies, and navigate changes to the industry playing field," Qualls continued. Ms. Lundt was elected by InsCorp shareholders to serve a three-year term expiring in 2025.

Highlights of the quarter and year-over-year include

Loans grew $62.6 million or 11.7% as of June 30, 2022 compared to June 30, 2021.
Total assets grew $57 million or 8.7% as of June 30, 2022 compared to June 30, 2021.
Non-interest bearing deposits grew $9.8 million or 12.04% during the 12 months ended June 30, 2022.
Non-Interest Expense to Total Average Assets was 1.73% for the quarter ended June 30, 2022, slightly higher than 1.64% for the same period in 2021 and compared favorably to the bank's FDIC peer group average of 2.34%.
Cost of all interest-bearing funding was 0.71% for the three months ended June 30, 2022 decreasing from 0.98% for the same period in 2021.
Assets per employee remained strong at $15.58 million, compared to the FDIC peer group of $6.83 million.
The bank's tier 1 capital ratio was 11.72%, while total risk-based capital was 12.97%.
The allowance for loan and lease losses was 1.43%.
Annualized return on tangible common equity was 19.33% for the six months ended June 30, 2022.
Tangible book value increased to $20.38 on June 30, 2022 from $18.04 at June 30, 2021.
The percentage of loans past due and non-accrual to gross loans was 0.43% comparing favorably to peer of 0.76%.
There were $58,000 in net recoveries for the quarter ended June 30, 2022.
Accumulated Other Comprehensive Income (AOCI) reflected a loss on the securities portfolio partially offset by gains on interest rate swaps held by the bank for interest rate risk purposes, resulting in a $401,000 decrease in AOCI for the three months ended June 30, 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)

		*June 30,*	*June 30,*
		2022	2021
Assets
Cash and Cash Equivalents		$ 3,542	$ 15,785
Interest Bearing Deposits		43,927	57,637
Securities		35,087	16,093

Loans		597,190	534,574
Allowance for Loan Losses		(8,552)	(7,225)
Net Loans		588,638	527,349

Premises and Equipment, net		13,167	13,437
Bank Owned Life Insurance		13,557	12,486
Restricted Equity Securities		10,152	8,630
Goodwill and Related Intangibles, net		1,091	1,091
Other Assets		8,172	7,640

Total Assets		$ 717,333	$ 660,148

Liabilities and Shareholders' Equity
Liabilities
Deposits
	Non-interest-bearing	$ 91,175	$ 81,376
	Interest-bearing	472,536	452,422
	Total Deposits	563,711	533,798

Federal Home Loan Bank Advances		58,010	40,000
Paycheck Protection Program Liquidity Fund		-	14,070
Subordinated Debentures		17,500	15,000
Line of Credit		5,000
Federal Funds Purchased		10,562	-
Other Liabilities		2,769	3,190
Total Liabilities		657,552	606,058

Shareholders' Equity
	Common Stock	32,426	31,585
	Treasury Stock	(3,180)	(663)
	Accumulated Retained Earnings	30,354	22,666
	Accumulated Other Comprehensive Income	181	502
	Total Stockholders' Equity	59,781	54,090
Total Liabilities & Shareholders' Equity		$ 717,333	$ 660,148

Tangible Book Value		$ 20.38	$ 18.04

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

		*Three Months Ended*		*Six Months Ended*
		*June 30, 2022*	*June 30, 2021*	*June 30, 2022*	*June 30, 2021*

Interest Income		$ 6,849	$ 6,122	$ 12,862	$ 11,998
Interest Expense		966	1,241	1,901	2,672
Net Interest Income		5,883	4,881	10,961	9,326
Provision for Loan Losses		300	375	445	1,025
Non-Interest Income
	Service Charges on Deposit Accounts	54	60	111	119
	Bank Owned Life Insurance	80	61	159	121
	Gain on Security Sales	-	-	-	62
	Other	279	346	500	583
Non-Interest Expense
	Salaries and Benefits	1,913	1,702	3,948	3,356
	Occupancy and equipment	402	319	835	644
	Data Processing	167	146	321	293
	Marketing and Advertising	129	108	257	208
	Other	548	508	1,115	1,011
Net income from Operations		2,837	2,190	4,810	3,674

Gain on Interest Rate Hedges		323	(198)	2,839	245
Interest Expense-Holding Co. Debt		238	239	471	478
Income Before Income Taxes		2,922	1,753	7,178	3,441
Income Tax Expense		(675)	(384)	(1,727)	(782)
Net Income		$ 2,247	$ 1,369	$ 5,451	$ 2,659

Return on Weighted Average Common Shares		$ 0.78	$ 0.47	$ 1.90	$ 0.91