NORTHEAST INDIANA BANCORP, INC. ANNOUNCES THIRD QUARTER 2022 EARNINGS

News provided by

Oct 21, 2022, 11:00 ET

HUNTINGTON, Ind., Oct. 21, 2022 /PRNewswire/ -- Northeast Indiana Bancorp, Inc. (OTCQB: NIDB), the parent company of First Federal Savings Bank, today announced net income for the nine months ended September 30, 2022 was $5.0 million, or $4.17 per diluted common share, compared to net income of $5.8 million, or $4.80 per diluted common share for the nine months ended September 30, 2021. The current nine months earnings equate to an annualized ROA of 1.58% and an annualized ROE of 14.94% compared to an annualized ROA of 1.89% and an annualized ROE of 16.23% for the nine months ended September 30, 2021.

Net income for the third quarter ended September 30, 2022 was $1.6 million, or $1.35 per diluted common share, compared to net income of $1.9 million, or $1.62 per diluted common share for the third quarter ended September 30, 2021. The current quarter earnings equate to an annualized return on average assets (ROA) of 1.53% and an annualized return on average equity (ROE) of 15.09% compared to an annualized ROA of 1.88% and an annualized ROE of 15.90% for the third quarter ended September 30, 2021.

The declines in net income are primarily related to a reduction in gain on sale of mortgage loans of $1.0 million for the nine months ended 2022 compared to the same period in 2021 and a reduction of $218,000 for the current quarter 2022 compared to the same period in 2021. Mortgage production declined during 2022 compared to the first nine months of 2021 as interest rates increased quickly due to actions taken by the Federal Reserve to mitigate inflation. Partially offsetting this decline was an increase in net interest income of $490,000 for the nine months ended 2022 compared to the same period in 2021.

Total Assets increased $11.8 million to $429.4 million at September 30, 2022 compared to $417.7 million at December 31, 2021. This increase was primarily due to net loans increasing $30.5 million, or 14.8% on an annualized basis, to $304.7 million as of September 30, 2022 compared to $274.3 million as of December 31, 2021. This increase was partially reduced by a $13.8 million reduction in the market value of the investment portfolio due to the volatility of interest rates during 2022. Total deposits increased $14.8 million, or 5.8% on an annualized basis to $356.7 million at September 30, 2022 compared to $341.9 million at December 31, 2021. Stockholder's equity decreased $6.8 million to $42.0 million at September 30, 2022 compared to $48.7 million at December 31, 2021. This decrease was a result of a decline in accumulated other comprehensive income by $10.8 million in the first nine months of 2022 due to unrealized losses in the investment portfolio. The book value of NIDB's stock was $34.85 per common share and tangible common equity ratio was 9.78% as of September 30, 2022.

Michael S. Zahn, President and CEO, commented "We are having another strong year in 2022. Our focus on the well-being of our clients and our employees should continue to promote our communities and enhance shareholder value. We continue to see strong loan demand in this ever-changing interest rate environment."

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

	September 30,	December 31,	September 30,
Balance Sheet (Unaudited)	2022	2021	2021
		(Audited)
*Assets*
Non-interest earning cash and cash equivalents	$ 3,531,435	$ 3,595,989	$ 3,709,841
Interest-earning cash and cash equivalents	930,052	12,185,155	14,716,427
Total cash and cash equivalents	4,461,487	15,781,144	18,426,268
Interest-earning time deposits	985,000	2,210,000	2,210,000
Securities available for sale	77,283,002	86,644,434	80,089,033
Securities held to maturity	12,072,056	11,916,667	11,926,106
Loans held for sale	494,900	538,635	1,408,000
Loans, gross	308,763,256	278,265,486	282,486,114
Allowance for loan losses	(4,024,366)	(3,998,392)	(4,013,967)
Loans, net	304,738,890	274,267,094	278,472,147
Accrued interest receivable	1,742,598	1,489,036	1,561,054
Premises and equipment	7,211,971	6,937,418	6,806,146
FHLB Stock	2,101,600	2,426,500	2,426,500
Investment in limited partnerships	1,303,334	1,528,334	1,603,334
Cash surrender value of life insurance	11,554,663	11,331,941	10,265,336
Real estate owned and other repossessed assets	-	-	5,000
Other assets	5,484,511	2,585,660	2,191,937
Total Assets	$ 429,434,012	$ 417,656,863	$ 417,390,861

*Liabilities and Stockholders' Equity*
Non-interest bearing deposits	$ 66,847,065	$ 56,435,410	$ 59,659,995
Interest bearing deposits	289,856,179	285,513,161	267,089,646
Borrowed funds	28,000,000	23,001,166	37,711,346
Accrued interest payable and other liabilities	2,729,801	4,013,574	3,347,304
Total Liabilities	387,433,045	368,963,311	367,808,291
Stockholders' equity	42,000,967	48,693,552	49,582,570
Total Liabilities and Stockholders' Equity	$ 429,434,012	$ 417,656,863	$ 417,390,861

	Three months ended			Nine months ended
	September 30,	June 30,	September 30,	September 30,	September 30,
Income Statement (Unaudited)	2022	2022	2021	2022	2021

*Net interest income*
Total interest income	$ 4,456,152	$ 3,990,602	$ 4,381,819	$ 12,480,325	$ 12,248,544
Total interest expense	509,035	324,499	418,799	1,124,663	1,383,263
Net interest income	3,947,117	3,666,104	3,963,020	11,355,662	10,865,281
Provision for loan losses	-	-	-	-	120,000
Net interest income after provision for loan losses	3,947,117	3,666,104	3,963,020	11,355,662	10,745,281

*Non-interest income*
Service charges on deposit accounts	201,818	186,399	181,654	542,615	488,770
Interchange fees	201,646	202,532	192,486	590,520	578,232
Loan servicing fees	98,371	88,523	40,549	291,297	97,002
Net gain on sale of loans	114,804	189,597	332,411	547,282	1,565,034
Net loss on sale of repossessed assets	-	-	(2,954)	-	(2,954)
Brokerage fees	51,158	57,014	59,658	162,324	191,873
Increase in cash surrender value of life insurance	74,604	72,984	64,631	222,722	193,894
Other income	80,456	80,077	97,881	248,521	285,294
Total non-interest income	822,857	877,126	966,316	2,605,281	3,397,145

*Non-interest expense*
Salaries and employee benefits	1,510,552	1,334,097	1,408,743	4,254,907	3,729,398
Occupancy	372,801	328,827	262,437	984,095	788,310
Data processing	371,686	360,896	350,898	1,089,502	1,019,939
Deposit insurance premiums	28,500	28,500	25,500	87,500	75,500
Professional fees	117,130	142,591	96,921	340,626	258,682
Advertising and marketing fees	83,237	38,684	64,072	179,008	159,559
Correspondent bank charges	32,669	31,310	27,977	89,721	80,241
Other expense	307,363	368,060	310,187	918,003	932,791
Total non-interest expense	2,823,938	2,632,965	2,546,735	7,943,362	7,044,420

Income before income taxes	1,946,036	1,910,266	2,382,601	6,017,581	7,098,006
Income tax expense	323,085	314,737	443,200	1,017,989	1,337,969
Net income	$ 1,622,951	$ 1,595,529	$ 1,939,401	$ 4,999,592	$ 5,760,037

	Three months ended			Nine months ended
	September 30,	June 30,	September 30,	September 30,	September 30,
Selected Financial Ratios and Other Financial Data (Unaudited)	2022	2022	2021	2022	2021

Average shares outstanding - basic	1,199,885	1,199,885	1,197,861	1,199,736	1,198,323
Average shares outstanding - diluted	1,199,957	1,200,059	1,198,028	1,199,924	1,200,079
Basic earnings per share	$ 1.35	$ 1.33	$ 1.62	$ 4.17	$ 4.81
Diluted earnings per share	$ 1.35	$ 1.33	$ 1.62	$ 4.17	$ 4.80
Net interest margin	3.88 %	3.66 %	4.06 %	3.77 %	3.78 %
Return on average assets	1.53 %	1.52 %	1.88 %	1.58 %	1.89 %
Return on average equity	15.09 %	14.81 %	15.90 %	14.94 %	16.23 %
Efficiency ratio	59.20 %	57.95 %	51.66 %	56.90 %	49.39 %

*Allowance for loan losses:*
Balance, beginning of period	$ 3,982,194	$ 4,004,074	$ 3,987,013	$ 3,998,392	$ 3,851,897
Charge-offs:
One-to-four family	-	-	-	-	-
Commercial real estate	-	-	-	-	15,194
Land/land development	-	-	-	-	-
Commercial	-	-	-	-	-
Consumer	21,604	40,072	13,103	79,111	75,191
Gross charge-offs	21,604	40,072	13,103	79,111	90,385
Recoveries:
One-to-four family	661	974	7,503	2,590	10,380
Commercial real estate	108	113	9,086	439	19,281
Land/land development	-	-	-	-	-
Commercial	40,000	-	250	49,725	990
Consumer	23,007	17,105	23,218	52,331	101,804
Gross recoveries	63,776	18,192	40,057	105,085	132,455
Net charge-offs (recoveries)	(42,172)	21,880	(26,954)	(25,974)	(42,070)
Provision for loan losses	-	-	-	-	120,000
Balance, end of period	$ 4,024,366	$ 3,982,194	$ 4,013,967	$ 4,024,366	$ 4,013,967

Net loan charge-offs (recoveries) to average loans	-0.06 %	0.03 %	-0.04 %	-0.01 %	-0.02 %

	As of
	September 30,	June 30,	September 30,
*Non-performing assets*	2022	2022	2021
Loans:
Non-accrual	$ 2,683,491	$ 2,248,220	$ 2,466,772
Past 90 days or more and still accruing	-	-	-
Troubled debt restructured	525,383	475,210	360,771
Total non-performing loans	3,208,874	2,723,430	2,827,543
Real estate owned	-	-	5,000
Other repossessed assets	-	-	-
Total non-performing assets	$ 3,208,874	$ 2,723,430	$ 2,832,543

Non-performing assets to total assets	0.75 %	0.66 %	0.68 %
Non-performing loans to gross loans	1.04 %	0.93 %	1.00 %
Allowance for loan losses to non-performing loans	125.41 %	146.22 %	141.96 %
Allowance for loan losses to gross loans	1.30 %	1.37 %	1.42 %

*Other financial ratios*
Tangible common equity	9.78 %	10.17 %	11.88 %
Book value per share	$ 34.85	$ 34.88	$ 41.22
Common shares outstanding	1,205,135	1,205,135	1,202,985

(1) Ratios for three and nine-month periods are annualized