InsCorp Reports Quarterly Profit Increase as Healthcare Brand Grows. Nashville-based Lender Resumes and Increases Dividend After Pandemic Pause

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May 07, 2021, 16:31 ET

NASHVILLE, Tenn., May 7, 2021 /PRNewswire/ -- InsCorp, parent company to INSBANK (OTCQX: IBTN), today reported first quarter earnings of $1,290,000, or $0.44 per common share. This represents an increase of $482,000, or 60%, over the previous quarter, and a $557,000 increase over the same quarter the prior year. Factors contributing to the results included core loan growth; PPP loan fee income; decreased funding costs; and income recognized from interest rate hedges. "Our team members have been purposeful throughout the pandemic, allocating resources to pandemic-driven matters such as industry-specific credit challenges, PPP loans, and the Fed's zero interest rate policy, while concurrently executing innovation strategies in a rapidly-changing, technology-driven economy," said Jim Rieniets, President & CEO of INSBANK. "In the midst of the pandemic we launched our niche healthcare brand, Medquity, to promote a national presence for physician-focused lending programs that already serve clients in 15 states. Medquity offers a unique blend of industry expertise in commercial banking as well as web-driven products serving the needs of medical professionals," Rieniets continued. Steady growth of the bank's diverse healthcare portfolio in recent years now accounts for 25% of all loans.

Net interest income was $4,444,000 for the quarter, representing a 14 percent increase over the same period for prior year, while quarterly operating expenses of $2,729,0000 were just 2% higher than those of the prior year. Loan loss provision expense was $650,000, which was $350,000 higher than the prior year period. "Our team's depth of knowledge of our borrowers and diligence in monitoring our loan portfolio during the pandemic finds us cautiously optimistic that our loan loss reserves will provide a sufficient buffer against anticipated losses," said Jim Rieniets. "Now a year into the pandemic we expect losses in just a few credits, for which there is little concentration within a particular industry. In general, most of our affected borrowers have navigated adversity and are reporting revenue gains this spring."

Additionally, InsCorp's board of directors recently voted to distribute a semi-annual dividend of $0.12 per share, after having suspended dividend payments during 2020. "A year ago we felt the prudent course of action was to preserve capital given the level of uncertainty surrounding the pandemic, said Michael Qualls, Chairman of InsCorp. "Recent months, however, have provided greater clarity both for our company and the industry and we're pleased to restore and increase our dividend based on current and projected operations," Qualls continued. InsCorp's dividend will be distributed on June 11^th, 2021 and payable to shareholders of record as of May 21^st, 2021.

Highlights of the quarter included:

Modified loans, due to the pandemic, represent 12% of the loan portfolio at March 31, 2021, with 50% being on payment deferral and 50% interest only. Total deferments are $69 million.
Payment deferrals are primarily in the restaurant, bar and tour/coach services industries, while the interest only modifications were in the hospitality and tour/coach services industries. 76% of total deferments were secured by real estate.
Loans generated through the government's SBA-PPP program Round 2 totaled $16.8 million through March 31, 2021.
Deferred loan fees related to the PPP loans is approximately $930,000 at March 31, 2021.
Non-performing assets to total loans and OREO were 1.9% at March 31, 2021, compared to 0.68% at March 31, 2020.
Yield on loans was 4.19% for the three months ended March 31, 2021 compared to 4.88% for the same period in 2020.
Cost of all interest-bearing funding was 1.05% for the three months ended March 31, 2021 decreasing from 1.93% for the same period in 2020.
Efficiency ratio was 50.7% at March 31, 2021, comparing favorably to the bank's FDIC peer group average of 60.7%.
Non-Interest Expense to Total Assets was 1.70% for the three months ended March 31, 2021, slightly lower than 1.85% for the same period in 2020 and compared favorably to the bank's FDIC peer group average of 2.42%.
Assets per employee remained strong at $13.22 million, compared to the FDIC peer group of $6.59 million.
The allowance for loan and lease losses was 1.38%, slightly higher than the bank's FDIC peer group average of 1.37%.
Annualized return on tangible common equity for the first quarter was 10.03%
Tangible book value increased $0.41 to $17.69 during the quarter primarily by virtue of retained earnings.
The bank's tier 1 capital ratio was 11.9%, while total risk-based capital was 13.2%.

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.insbanktn.com

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

		*March 31,*	*December 31,*	*March 31,*
		2021	2020	2020
Assets
Cash and Cash Equivalents		$ 15,561	$ 8,219	$ 2,521
Interest Bearing Deposits		32,268	33,356	38,209
Securities		12,747	17,039	25,402

Loans		543,178	525,235	464,736
Allowance for Loan Losses		(7,515)	(7,365)	(5,680)
Net Loans		535,663	517,870	459,056

Premises and Equipment, net		13,519	13,630	13,894
Bank Owned Life Insurance		10,176	10,115	9,927
Restricted Equity Securities		8,147	7,612	6,119
Goodwill and Related Intangibles, net		1,091	1,091	1,091
Other Assets		7,549	8,298	6,721

Total Assets		$ 636,721	$ 617,230	$ 562,940

Liabilities and Shareholders' Equity
Liabilities
Deposits
	Non-interest-bearing	$ 72,858	$ 52,665	$ 42,576
	Interest-bearing	432,295	417,731	399,199
	Total Deposits	505,153	470,396	441,775

Federal Home Loan Bank Advances		45,000	50,000	51,000
Paycheck Protection Program Liquidity Fund		15,485	18,412	-
Subordinated Debentures		15,000	15,000	15,000
Federal Funds Purchased		-	7,000	-
Other Liabilities		3,117	5,328	5,475
Total Liabilities		583,755	566,136	513,250

Shareholders' Equity
	Common Stock	31,325	31,190	30,773
	Treasury Stock	(681)	(681)
	Accumulated Retained Earnings	21,652	20,377	18,677
	Accumulated Other Comprehensive Income	670	208	240
	Total Stockholders' Equity	52,966	51,094	49,690
Total Liabilities & Shareholders' Equity		$ 636,721	$ 617,230	$ 562,940

Tangible Book Value		$ 17.69	$ 17.28	$ 16.64






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

		*Three Months Ended*	*Twelve Months Ended*	*Three Months Ended*
		*March 31, 2021*	*December 31, 2020*	*March 31, 2020*

Interest Income		$ 5,876	$ 22,694	$ 6,018
Interest Expense		1,431	7,221	2,125
Net Interest Income		4,445	15,473	3,893
Provision for Loan Losses		650	2,400	300
Non-Interest Income
	Service Charges on Deposit Accounts	59	212	56
	Bank Owned Life Insurance	60	251	62
	Gain on Interest Rate Hedges and Security Sales	505	-	-
	Other	237	705	175
Non-Interest Expense
	Salaries and Benefits	1,654	6,200	1,629
	Occupancy and equipment	325	1,233	295
	Data Processing	147	553	138
	Marketing and Advertising	100	349	91
	Other	503	1,843	513
Net income from Operations		1,927	4,063	1,220

Interest Expense-Subordinated Debt		239	956	239
Income Before Income Taxes		1,688	3,107	981
Income Tax Expense		(398)	(674)	(248)
Net Income		$ 1,290	$ 2,433	$ 733

Return on Weighted Average Common Shares		$ 0.44	$ 0.83	$ 0.25