NORTHEAST INDIANA BANCORP, INC. ANNOUNCES FOURTH QUARTER AND ANNUAL EARNINGS

News provided by

Jan 23, 2024, 12:56 ET

HUNTINGTON, Ind., Jan. 23, 2024 /PRNewswire/ -- Northeast Indiana Bancorp, Inc. (OTCQB: NIDB), the parent company of First Federal Savings Bank, today announced net income for the full year of 2023 was $4.3 million, or $1.77 per diluted common share, compared to net income of $6.6 million, or $2.73 per diluted common share for the full year of 2022. The annual earnings of 2023 equate to a return on average assets (ROA) ratio of 0.90% and a return on average equity (ROE) ratio of 9.72% compared to ROA of 1.54% and ROE of 14.90% for the full year of 2022.

Net income for the fourth quarter ended December 31, 2023 was $741,000, or $0.31 per diluted common share, compared to net income of $1.6 million, or $0.65 per diluted common share for the fourth quarter ended December 31, 2022. The current quarter earnings equate to an annualized ROA of 0.60% and an annualized ROE of 6.75% compared to an annualized ROA of 1.42% and an annualized ROE of 14.84% for the fourth quarter ended December 31, 2022.

Factoring into the decline of net income was margin pressure throughout 2023 leading to a reduction in net interest income of $730,000 compared to the same period in 2022. Provision expenses increased by $1.1 million as implementation of the new CECL accounting standard during the year required the bank to increase the allowance for loan loss reserve to account for its strong loan growth in 2023. Overhead expenses increased by $1.1 million during 2023 with employee compensation and benefits higher by $650,000 as compared to 2022.

Total Assets increased $53.2 million to $498.7 million at December 31, 2023 compared to $445.5 million at December 31, 2022. This increase was primarily due to net loans increasing $49.9 million, or 15.6% in 2023, to $370.7 million as of December 31, 2023 compared to $320.8 million as of December 31, 2022. Total deposits increased $34.3 million, or 9.3% in 2023, to $401.1 million at December 31, 2023 compared to $366.8 million at December 31, 2022. Stockholder's equity increased $3.3 million to $46.4 million at December 31, 2023 compared to $43.1 million at December 31, 2022. Contributing to this increase was a $1.5 million improvement in the bank's net unrealized loss position in the investment portfolio. The book value of NIDB's stock was $19.15 per common share and the tangible common equity ratio was 9.31% as of December 31, 2023.

In the current year, Northeast Indiana Bancorp and First Federal Savings Bank have been recognized for its performance. First Federal Savings Bank was named to American Banker Magazine's Top 200 Community Banks for the 12th consecutive year for 2022. The magazine qualifies banks for this listing if they have less than $2 billion in total assets and are publicly traded. FFSB came in at #59 on this year's list of the top 200 publicly traded community banks. This is a 3-spot improvement from #62 in 2021. The magazine ranked the institutions based on the profitability metric, Return on Average Equity, over a 3-year period. Only 11 banks from the state of Indiana made this elite list and First Federal Savings Bank ranked 3^rd in the State.

In addition, Northeast Indiana Bancorp, Inc., the holding company for First Federal Savings Bank, maintained its position on the Dividend Champions List. To achieve Champion status, a company must increase its dividend payments to its shareholders for 25 consecutive years. Northeast Indiana Bancorp is one of 150 companies in the United States to achieve this status and one of five companies from Indiana. With the latest dividend increase in the fourth quarter of 2023, Northeast Indiana Bancorp has increased dividends 29 years in a row.

Michael Zahn, President and CEO, states "The Bank had another strong year despite the challenging interest rate environment and implementation of new accounting rules as it relates to our loan loss reserve. I'm very pleased with our loan and deposit growth and the recognitions we continue to receive. Our team is second to none and provides exceptional service to our customers and communities. We will continue to invest in talent as we grow. Our dedication to community banking is the cornerstone of who we are and drives our continued goal of enhancing shareholder value moving forward."

*All share data has been adjusted to reflect Northeast Indiana Bancorp, Inc.'s two-for-one stock split effective July 14, 2023.

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

	December 31,	December 31,
Balance Sheet (Unaudited)	2023	2022
		(Audited)
*Assets*
Non-interest earning cash and cash equivalents	$ 4,304,296	$ 3,141,705
Interest-earning cash and cash equivalents	1,166,180	747,920
Total cash and cash equivalents	5,470,476	3,889,625
Interest-earning time deposits	4,320,000	1,230,000
Securities available for sale	76,228,755	78,273,337
Securities held to maturity	12,754,763	12,062,446
Loans held for sale	-	189,600
Loans, gross	375,992,822	324,752,497
Allowance for loan losses	(5,335,305)	(3,996,619)
Loans, net	370,657,517	320,755,878
Accrued interest receivable	2,354,636	1,923,986
Premises and equipment	7,366,169	7,254,951
FHLB Stock	2,227,500	2,101,600
Investment in limited partnerships	928,334	1,228,334
Cash surrender value of life insurance	11,751,653	11,629,618
Other assets	4,624,206	4,988,219
Total Assets	$ 498,684,009	$ 445,527,594

*Liabilities and Stockholders' Equity*
Non-interest bearing deposits	$ 54,764,981	$ 53,232,315
Interest bearing deposits	346,307,200	313,584,014
Borrowed funds	47,250,000	32,000,000
Accrued interest payable and other liabilities	3,941,438	3,584,163
Total Liabilities	452,263,619	402,400,492
Stockholders' equity	46,420,390	43,127,102
Total Liabilities and Stockholders' Equity	$ 498,684,009	$ 445,527,594


	Three months ended			Twelve months ended
	December 31,	September 30,	December 31,	December 31,	December 31,
Income Statement (Unaudited)	2023	2023	2022	2023	2022

*Net interest income*
Total interest income	$ 6,702,608	$ 6,354,262	$ 5,071,415	$ 24,158,344	$ 17,551,740
Total interest expense	2,952,000	2,610,737	1,120,123	9,584,701	2,244,786
Net interest income	3,750,608	3,743,525	3,951,292	14,573,643	15,306,954
Provision for loan losses	780,000	90,000	-	1,050,000	-
Net interest income after provision for loan losses	2,970,608	3,653,525	3,951,292	13,523,643	15,306,954

*Non-interest income*
Service charges on deposit accounts	184,623	184,111	198,715	734,612	741,330
Interchange fees	195,918	199,248	193,610	787,690	784,129
Loan servicing fees	108,432	102,753	62,712	414,958	354,009
Net gain on sale of loans	67,979	115,722	66,083	329,174	613,364
Brokerage fees	29,086	44,957	41,034	184,326	203,357
Increase in cash surrender value of life insurance	75,763	74,217	74,955	296,990	297,677
Other income	73,390	37,652	102,248	458,274	350,771
Total non-interest income	735,191	758,660	739,357	3,206,024	3,344,637

*Non-interest expense*
Salaries and employee benefits	1,443,480	1,604,968	1,513,293	6,416,398	5,768,201
Occupancy	340,005	330,735	383,944	1,381,140	1,368,039
Data processing	387,894	397,132	371,655	1,573,667	1,461,156
Deposit insurance premiums	54,000	46,000	28,500	205,500	116,000
Professional fees	207,204	173,208	138,903	634,672	479,529
Advertising and marketing fees	129,495	13,909	89,021	311,634	268,029
Correspondent bank charges	39,288	35,395	32,864	148,756	122,585
Other expense	335,295	386,385	281,403	1,258,685	1,199,405
Total non-interest expense	2,936,661	2,987,732	2,839,583	11,930,452	10,782,944

Income before income taxes	769,138	1,424,453	1,851,066	4,799,215	7,868,647
Income tax expense	27,866	193,172	298,062	539,525	1,316,051
Net income	$ 741,272	$ 1,231,281	$ 1,553,004	$ 4,259,690	$ 6,552,596

	Three months ended			Twelve months ended
	December 31,	September 30,	December 31,	December 31,	December 31,
Selected Financial Ratios and Other Financial Data (Unaudited)	2023	2023	2022	2023	2022

Average shares outstanding - basic	2,401,584	2,402,070	2,399,770	2,401,745	2,400,103
Average shares outstanding - diluted	2,401,584	2,402,094	2,399,914	2,401,773	2,400,409
Basic earnings per share	$ 0.31	$ 0.51	$ 0.65	$ 1.77	$ 2.73
Diluted earnings per share	$ 0.31	$ 0.51	$ 0.65	$ 1.77	$ 2.73
Net interest margin	3.16 %	3.21 %	3.73 %	3.20 %	3.76 %
Return on average assets	0.60 %	1.02 %	1.42 %	0.90 %	1.54 %
Return on average equity	6.75 %	11.16 %	14.84 %	9.72 %	14.90 %
Efficiency ratio	65.47 %	66.36 %	60.54 %	67.10 %	57.81 %

*Allowance for loan losses:*
Balance, beginning of period	$ 4,529,631	$ 4,508,446	$ 4,024,366	$ 3,996,619	$ 3,998,392
Charge-offs:
One-to-four family	-	21,457	-	27,466	-
Commercial real estate	-	-	-	-	-
Land/land development	-	-	-	-	-
Commercial	-	-	-	-	-
Consumer	68,491	73,324	60,866	198,755	139,976
Gross charge-offs	68,491	94,781	60,866	226,221	139,976
Recoveries:
One-to-four family	10,664	586	13,099	11,249	15,689
Commercial real estate	-	-	40	-	478
Land/land development	-	-	-	-	-
Commercial	200	600	185	3,930	49,910
Consumer	38,301	24,780	19,795	104,728	72,126
Gross recoveries	49,165	25,966	33,119	119,907	138,203
Net charge-offs (recoveries)	19,326	68,815	27,747	106,314	1,773
CECL adjustment	-	-	-	350,000	-
Provision for loan losses	825,000	90,000	-	1,095,000	-
Balance, end of period	$ 5,335,305	$ 4,529,631	$ 3,996,619	$ 5,335,305	$ 3,996,619

Net loan charge-offs (recoveries) to average loans	0.02 %	0.08 %	0.03 %	0.03 %	0.00 %

	As of
	December 31,	September 30,	December 31,
*Non-performing assets*	2023	2023	2022
Loans:
Non-accrual	$ 6,415,623	$ 3,667,841	$ 2,463,911
Past 90 days or more and still accruing	-	-	-
Troubled debt restructured	524,970	524,970	525,383
Total non-performing loans	6,940,593	4,192,811	2,989,294
Real estate owned	-	-	-
Other repossessed assets	-	-	-
Total non-performing assets	$ 6,940,593	$ 4,192,811	$ 2,989,294

Non-performing assets to total assets	1.39 %	0.87 %	0.67 %
Non-performing loans to gross loans	1.85 %	1.15 %	0.92 %
Allowance for loan losses to non-performing loans	76.87 %	108.03 %	133.70 %
Allowance for loan losses to gross loans	1.42 %	1.24 %	1.23 %

*Other financial ratios*
Tangible common equity	9.31 %	9.05 %	9.68 %
Book value per share	$ 19.15	$ 18.08	$ 17.90
Common shares outstanding	2,423,698	2,425,670	2,409,670

(1) Ratios for three-month periods are annualized
(2) All share data has been adjusted for the 2:1 stock split on July 14, 2023.