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 3rd 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.