NORTHEAST INDIANA BANCORP, INC. ANNOUNCES FIRST QUARTER 2023 EARNINGS

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Apr 21, 2023, 15:30 ET

HUNTINGTON, Ind., April 21, 2023 /PRNewswire/ -- Northeast Indiana Bancorp, Inc., (OTCQB: NIDB), the parent company of First Federal Savings Bank, has announced net income of $1.17 million ($0.97 per diluted common share) for the first quarter ended March 31, 2023 compared to earnings from the quarter ended March 31, 2022 of $1.78 million ($1.49 per diluted common share). The current three months earnings equate to an annualized return on average assets (ROA) of 1.04% and a return on average equity (ROE) of 10.75% compared to an ROA of 1.70% and an ROE of 15.07% for the prior year quarter ended March 31, 2022. The decline was related to the increase in interest expense compared to interest income due to the historic increase in interest rates, provision for loan loss expense due to the new CECL accounting standard and several investments made for the benefit of future growth.

Total assets increased $6.6 million, or 5.9% on an annualized basis, to $452.1 million at March 31, 2023 compared to total assets of $445.5 million at December 31, 2022. Total loans increased $5.0 million, or 6.2% on an annualized basis, to $325.7 million at March 31, 2023 compared to total loans of $320.8 million at December 31, 2022. Total deposits increased $3.9 million, or 4.3% on an annualized basis, to $370.7 million at March 31, 2023 compared to $366.8 million at December 31, 2022.

Shareholders' equity increased $691,000 to $43.8 million at March 31, 2023 compared to $43.1 million at December 31, 2022. The increase in shareholders' equity was a result of accumulated other comprehensive income increasing $278,000 due to a slight improvement in the fair value of the investment portfolio and net income for the first quarter. This increase was partially offset by a decline in retained earnings of $398,000 for the initial entry to implement the new CECL accounting standard. The book value of NIDB stock increased $0.22 to $36.02 per common share as of March 31, 2023 compared to $35.80 at December 31, 2022. The number of outstanding common shares was 1,216,335 as of March 31, 2023.

Net interest income decreased $116,000 in the first quarter of 2023 compared to the same period in 2022. The decrease was a result of a 45 basis point decline in net interest margin to 3.35%, partially offset by an increase in average earning assets of $38.8 million for the first quarter of 2023 compared to the first quarter of 2022. The decline in net interest margin was primarily due to an increase of 164 basis points in costs of interest-bearing liabilities of 2.02% in the first quarter of 2023 compared to 0.38% in the first quarter of 2022 compared to an increase of 88 basis points in yield on interest earning assets to 4.97% in the first quarter of 2023 compared to 4.09% in the first quarter of 2022.

Non-interest income declined $135,000 in first quarter of 2023 compared to the same period in 2022. The decrease was a result of a decline of $177,000 in gain on sale of loans due to slower mortgage refinances in the first quarter of 2023 compared to the first quarter of 2022. Non-interest expense increased $481,000 in the first quarter of 2023 compared to the first quarter of 2022. The increase in non-interest expense is primarily due to investments made in 2022 to increase capacity for future growth and a new branch location that opened in the second quarter of 2022.

Michael S. Zahn, President/CEO said, "The historic increase in interest rates had a negative impact on our margin, but our commercial loan pipeline continues to be strong. We believe the investments that have been made position us well for the future."

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 its main office in Huntington and six full-service Indiana offices in Huntington (2), Warsaw (2) and Fort Wayne (2). The Company is traded on the OTC Markets Group, Inc. (www.otcmarkets.com) utilizing the OTCQB platform under the symbol "NIDB". Our web site address is www.firstfedindiana.bank.

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

	March 31,	December 31,	March 31,
Balance Sheet (Unaudited)	2023	2022	2022

*Assets*
Interest-earning cash and cash equivalents	$ 2,646,912	$ 3,141,705	$ 8,040,570
Non-interest earning cash and cash equivalents	1,940,693	747,920	4,216,611
Total cash and cash equivalents	4,587,606	3,889,625	12,257,181
Interest-earning time deposits	1,230,000	1,230,000	2,210,000
Securities available for sale	78,278,059	78,273,337	85,245,995
Securities held to maturity	12,787,199	12,062,446	11,791,172
Loans held for sale	403,600	189,600	1,313,598
Loans, gross	330,160,388	324,752,497	283,628,078
Allowance for loan losses	(4,421,505)	(3,996,619)	(4,004,074)
Loans, net	325,738,883	320,755,878	279,624,004
Accrued interest receivable	1,982,785	1,923,986	1,523,198
Premises and equipment	7,376,693	7,254,951	7,122,223
FHLB Stock	2,101,600	2,101,600	2,101,600
Investment in limited partnerships	1,153,334	1,228,334	1,453,334
Cash surrender value of life insurance	11,703,266	11,629,618	11,407,075
Other assets	4,803,252	4,988,219	3,451,488
Total Assets	$ 452,146,276	$ 445,527,594	$ 419,500,867

*Liabilities and Stockholders' Equity*
Non-interest bearing deposits	$ 54,547,736	$ 53,232,315	$ 62,072,982
Interest bearing deposits	316,197,968	313,584,014	294,557,300
Borrowed funds	34,000,000	32,000,000	13,925,706
Accrued interest payable and other liabilities	3,582,889	3,584,163	3,622,201
Total Liabilities	408,328,593	402,400,492	374,178,189
Stockholders' equity	43,817,683	43,127,102	45,322,678
Total Liabilities and Stockholders' Equity	$ 452,146,276	$ 445,527,594	$ 419,500,867


	Three months ended
	March 31,	December 31,	March 31,
Income Statement (Unaudited)	2023	2022	2022

*Net interest income*
Total interest income	$ 5,388,127	$ 5,071,415	$ 4,033,571
Total interest expense	1,761,895	1,120,123	291,129
Net interest income	3,626,232	3,951,292	3,742,442
Provision for loan losses	90,000	-	-
Net interest income after provision for loan losses	3,536,232	3,951,292	3,742,442

*Non-interest income*
Service charges on deposit accounts	188,222	198,715	154,398
Interchange fees	192,338	193,610	162,545
Loan servicing fees		62,712
Net gain on sale of loans	65,793	66,083	242,882
Net loss on sale of repossessed assets	-	-	-
Brokerage fees	66,485	41,034	54,151
Increase in cash surrender value of life insurance	73,648	74,955	75,134
Other income	183,244	102,248	215,866
Total non-interest income	769,730	739,357	904,976

*Non-interest expense*
Salaries and employee benefits	1,687,245	1,513,293	1,410,259
Occupancy	340,935	383,944	282,467
Data processing	394,597	371,655	356,919
Deposit insurance premiums	49,500	28,500	30,500
Professional fees	111,035	138,903	80,905
Advertising and marketing fees	91,717	89,021	57,088
Correspondent bank charges	38,732	32,864	25,742
Other expense	253,251	281,403	242,259
Total non-interest expense	2,967,012	2,839,583	2,486,139

Income before income taxes	1,338,950	1,851,066	2,161,279
Income tax expense	168,494	298,062	380,167
Net income	$ 1,170,456	$ 1,553,004	$ 1,781,112

	Three months ended
	March 31,	December 31,	March 31,
Selected Financial Ratios and Other Financial Data (Unaudited)	2023	2022	2022

Average shares outstanding - basic	1,200,659	1,201,442	1,199,001
Average shares outstanding - diluted	1,200,703	1,201,491	1,199,318
Basic earnings per share	$ 0.97	$ 1.29	$ 1.49
Diluted earnings per share	$ 0.97	$ 1.29	$ 1.49
Net interest margin	3.35 %	3.73 %	3.80 %
Return on average assets	1.04 %	1.42 %	1.70 %
Return on average equity	10.75 %	14.84 %	15.07 %
Efficiency ratio	67.49 %	60.54 %	53.50 %

Allowance for loan losses:
Balance, beginning of period	$ 3,996,619	$ 4,024,366	$ 3,998,392
Charge-offs:
One-to-four family	-	-	-
Commercial real estate	-	-	-
Land/land development	-	-	-
Commercial	-	-	-
Consumer	36,130	60,866	17,435
Gross charge-offs	36,130	60,866	17,435
Recoveries:
One-to-four family	-	13,099	955
Commercial real estate	-	40	218
Land/land development	-	-	-
Commercial	923	185	9,725
Consumer	20,093	19,795	12,219
Gross recoveries	21,016	33,119	23,117
Net charge-offs (recoveries)	15,114	27,747	(5,682)
CECL adjustment	350,000
Provision for loan losses	90,000	-	-
Balance, end of period	$ 4,421,505	$ 3,996,619	$ 4,004,074

Net loan charge-offs (recoveries) to average loans	0.02 %	0.03 %	-0.01 %

	As of
	March 31,	December 31,	March 31,
Non-performing assets	2023	2022	2022
Loans:
Non-accrual	$ 4,137,597	$ 2,463,911	$ 2,023,525
Past 90 days or more and still accruing	-	-	-
Troubled debt restructured	525,020	525,383	363,992
Total non-performing loans	4,662,617	2,989,294	2,387,517
Real estate owned	-	-	-
Other repossessed assets	-	-	-
Total non-performing assets	$ 4,662,617	$ 2,989,294	$ 2,387,517

Non-performing assets to total assets	1.03 %	0.67 %	0.57 %
Non-performing loans to gross loans	1.41 %	0.92 %	0.84 %
Allowance for loan losses to non-performing loans	94.83 %	133.70 %	167.71 %
Allowance for loan losses to gross loans	1.34 %	1.23 %	1.41 %

Other financial ratios
Stockholders' equity as a % of total assets	9.69 %	9.68 %	10.80 %
Book value per share	$ 36.02	$ 35.80	$ 37.60
Common shares outstanding	1,216,335	1,204,835	1,205,435

(1) Ratios for three-month periods are annualized