Quarterly Profits Increase for INSBANK Parent, InsCorp, Inc.

Margin Improves as Funding Costs Steadily Decrease

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Feb 04, 2021, 13:32 ET

NASHVILLE, Tenn., Feb. 4, 2021 /PRNewswire/ -- Inscorp, Inc., parent company of INSBANK, (OTCQX: IBTN) today reported 4^th quarter earnings of $808,500 or $0.28 per share. Quarterly earnings for the Nashville-based lender were up $465,500, or $0.17 per share versus the 3^rd quarter, primarily driven by both an increase in net interest margin and a decrease in loan loss provision expense. The bank's net interest margin improved by 19 basis points over the 3^rd quarter, and provision expense decreased by $200,000.

"In the 4^th quarter we were pleased not only with improved financial results, but also with the resumption of loan and deposit pipelines that indicate certain sectors of our local economy are moving forward, albeit with changes driven by the pandemic, said Jim Rieniets, President & CEO of INSBANK. "We're cautiously optimistic that lower funding costs and core loan growth are trends that will give us inertia into 2021, as we continue to both build on digital lines of business, and hire more team members for our core, commercial banking units," Rieniets continued.

While core net interest income and operating expenses were consistent with the same quarter in the prior year, earnings were down $722,000, or $0.24 per share a result of less non-interest income and more loan loss provision expense versus that of Q4 2019. For the year the company reported earnings of $0.83 per share versus $1.55 the prior year. Factors contributing to the decline in earnings in 2020 were driven by the pandemic, in the form of the margin-compressing rate shock of March 2020, and a year-long effort to bolster loan loss reserves given the uncertainty of outcomes for business borrowers most affected by the pandemic.

"While the ultimate effects of the pandemic remain unknown, our team has worked diligently with our impacted customers to quantify risks and identify paths forward, including PPP loans and loan modifications, where appropriate," continued Rieniets. "In an industry whose evolution has been accelerated by the pandemic, we're approaching 2021 with optimism given our ability to decrease cost of funding and increase operating leverage with our technology-driven, efficient business model."

Highlights of the quarter and year-ended include:

Total assets grew $63.5 million year over year or 11.5% for 2020.
Non-interest bearing deposits grew $17 million or 49% during 2020.
Loans generated through the government's SBA-PPP program totaled $45.7 million.
Deferred loan fees related to the PPP loans is approximately $900,000 at December 31, 2020
Efficiency ratio was 59.9% at December 31, 2020, comparing favorably to the bank's FDIC peer group average of 62.7%.
Non-Interest Expense to Total Assets was 1.73% for the year ended December 31, 2020, slightly lower than 1.89% for the same period in 2019 and compared favorably to the bank's FDIC peer group average of 2.60%.
Cost of all interest-bearing funding was 1.31% for the three months ended December 31, 2020 decreasing from 2.06% for the same period in 2019.
Assets per employee remained strong at $13.66 million, compared to the FDIC peer group of $6.34 million.
The bank's tier 1 capital ratio was 12.1%, while total risk-based capital was 13.3%.
Annualized net charge-offs to average loans were 0.08% for the year ended December 31, 2020 compared to 0.04% for the same period in 2019.
The allowance for loan and lease losses was 1.40%, slightly higher than the bank's FDIC peer group average of 1.38%.
Annualized return on tangible common equity for the year was 4.86%
During 2020 InsCorp returned to shareholders $751,000 in the form of stock buybacks.
Tangible book value increased $0.26 to $17.24 during the quarter primarily by virtue of retained earnings.

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)

		*December 31*	*December 31,*
		2020	2019
Assets
Cash and Cash Equivalents		$ 8,219	$ 5,342
Interest Bearing Deposits		33,356	27,418
Securities		17,039	20,996

Loans		525,235	469,172
Allowance for Loan Losses		(7,365)	(5,380)
Net Loans		517,870	463,792

Premises and Equipment, net		13,630	13,982
Bank Owned Life Insurance		10,115	9,865
Restricted Equity Securities		7,612	5,866
Goodwill and Related Intangibles, net		1,091	1,091
Other Assets		7,947	5,022

Total Assets		$ 616,879	$ 553,374

Liabilities and Shareholders' Equity
Liabilities
Deposits
	Non-interest-bearing	$ 52,665	$ 34,854
	Interest-bearing	417,731	402,118
	Total Deposits	470,396	436,972

Federal Home Loan Bank Advances		50,000	49,000
Paycheck Protection Program Liquidity Fund		18,412	-
Subordinated Debentures		15,000	15,000
Federal Funds Purchased		7,000	-
Other Liabilities		5,013	3,404
Total Liabilities		565,821	504,376

Shareholders' Equity
	Common Stock	31,204	30,993
	Treasury Stock	(681)	-
	Accumulated Retained Earnings	20,362	17,944
	Accumulated Other Comprehensive Income	173	61
	Total Stockholders' Equity	51,058	48,998
Total Liabilities & Shareholders' Equity		$ 616,879	$ 553,374

Tangible Book Value		$ 17.24	$ 16.32

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

		*Twelve Months Ended*	*Twelve Months Ended*
		*December 31, 2020*	*December 31, 2019*

Interest Income		22,694	24,941
Interest Expense		7,221	8,872
Net Interest Income		$ 15,473	$ 16,069
Provision for Loan Losses		2,400	725
Non-Interest Income
	Service Charges on Deposit Accounts	212	154
	Bank Owned Life Insurance	251	253
	Sale of Government Guaranteed Loans	-	384
	Other	705	604
Non-Interest Expense
	Salaries and Benefits	6,200	6,023
	Occupancy and equipment	1,233	1,160
	Data Processing	553	499
	Marketing and Advertising	349	379
	Other	1,843	1,988
Net income from Operations		4,063	6,690

Interest Expense-Subordinated Debt		956	956
Income Before Income Taxes		3,107	5,734
Income Tax Expense		(674)	(1,207)
Net Income		$ 2,433	$ 4,527

Return on Weighted Average Common Shares		$ 0.83	$ 1.55