COLUMBUS, Ind., July 27, 2010 (GLOBE NEWSWIRE) -- Indiana Community Bancorp (the "Company") (Nasdaq:INCB), the holding company of Indiana Bank and Trust Company of Columbus, Indiana (the "Bank"), today announced net income for the second quarter of $1.7 million or $0.41 diluted earnings per common share compared to a net loss of $2.8 million or $(0.93) diluted loss per common share a year earlier. Year-to-date net income was $2.1 million or $0.45 diluted earnings per common share compared to a net loss of $2.4 million or $(0.89) diluted loss per common share a year earlier. The quarter over quarter increase in net income was primarily driven by an increase in net interest income of $456,000 and a reduction in the provision for loan losses of $599,000. Total loans increased $9.2 million for the quarter and $13.3 million year-to-date while total deposits increased $19.2 million for the quarter and $35.4 million year-to-date. Chairman and CEO John Keach, Jr. stated, "We are pleased with the solid earnings for the quarter combined with growth in commercial loans and retail deposits." Executive Vice President and CFO Mark Gorski added, "The improvement in net interest margin has been the catalyst in driving increased net interest income. The balance sheet repositioning we completed in December, 2009 and January, 2010 has resulted in a $760,000 increase in quarterly net interest income since year end."
Balance Sheet
Total assets were $1.1 billion as of June 30, 2010, an increase of $50.5 million from December 31, 2009. Total loans increased $9.2 million for the quarter and $13.3 million year-to-date. Commercial and commercial mortgage loans increased $10.1 million for the quarter and $20.4 million year-to-date. Residential mortgage loans and consumer loans decreased $862,000 for the quarter and $7.1 million year-to-date. Commercial loan growth was consistent during the first and second quarters resulting from adding a few new commercial relationships each quarter coupled with providing funding for existing customers.
Total retail deposits increased $19.2 million for the quarter and $35.4 million year-to-date. The growth in retail deposits is being driven primarily from growth in the interest bearing checking and money market categories which increased $32.4 million for the quarter and $41.7 million year-to-date. These increases were offset by a reduction in higher cost certificates of deposit which decreased $8.6 million for the quarter and $5.5 million year-to-date. The Bank is still benefiting from the favorable environment for bank deposits.
Asset Quality
Provision for loan losses totaled $1.5 million for the quarter and $3.6 million year-to-date which represent significant decreases from comparable periods in 2009. Net charge offs were $1.8 million for the quarter and $2.4 million year-to-date. Although charge offs increased in the second quarter of 2010 compared to the first quarter, $1.2 million of charge offs for the second quarter were related to two condominium loans that had established specific reserves from previous quarters. As a result, the allowance for loan losses decreased by $256,000 for the second quarter to $14.3 million at June 30, 2010. The ratio of the allowance for loan losses to total loans increased to 1.91% at June 30, 2010 compared to 1.78% at December 31, 2009. Total non-performing assets increased $1.6 million for the second quarter and $148,000 year-to-date to $34.6 million at June 30, 2010. Non-performing assets to total assets was 3.26% at June 30, 2010. In addition, the Bank received a signed letter of intent for the purchase of its largest other real estate owned property. Management expects the sale to close in the fourth quarter of 2010 and the Bank does not anticipate financing the transaction, although there can be no guarantee that the transaction will close on such terms.
Net Interest Income
Net interest income increased $1.2 million or 17.8% to $7.9 million for the quarter and $1.7 million or 12.2% to $15.3 million year-to-date. The increase in net interest income was primarily attributable to significant improvement in the net interest margin. Net interest margin for the quarter was 3.28%, which represented an increase of 3 basis points on a linked quarter basis and an increase of 40 basis points compared to the fourth quarter of 2009. The increase in the net interest margin was primarily due to the Company's balance sheet repositioning which was executed in December 2009 and January 2010. The prepayment and restructuring of the FHLB advances aided in reducing the Company's overall cost of interest-bearing liabilities. Additionally, the net interest margin was aided by a decrease in deposit costs which have been driven down during the year due to overall market conditions and high levels of liquidity in the banking system.
Non Interest Income
Non interest income increased $196,000 for the quarter and decreased $684,000 year-to-date. Gain on sale of loans decreased $245,000 for the quarter and $950,000 year-to-date due to a significant decrease in origination volumes. A significant reduction in interest rates that began late in 2008 resulted in increased mortgage refinance activity and origination volumes during the majority of 2009. Miscellaneous income increased $344,000 for the quarter and $212,000 year-to-date. The majority of the miscellaneous income increase was due to fee income from trust and investment management, which increased $183,000 for the quarter and $343,000 year-to-date due to an increase in assets under management that resulted from the hiring of an investment consultant during the second quarter of 2009. In addition, 2010 year-to-date miscellaneous income included a net loss on the writedown of other real estate of $361,000. During the first quarter of 2010, the Company wrote down the carrying value of its largest other real estate owned property by $400,000 based on negotiations related to the sale of the property.
Non Interest Expenses
Non interest expenses decreased $557,000 to $6.9 million for the quarter and $682,000 to $14.0 million year-to-date. Compensation and employee benefits expense remained at levels consistent with the prior year for both the second quarter and year-to-date. FDIC insurance expense decreased $247,000 for the quarter due to the $475,000 special assessment which occurred in the second quarter of 2009. Miscellaneous expense decreased $155,000 for the quarter and $447,000 year-to-date due primarily to a decrease in problem loan workout related costs.
Indiana Community Bancorp is a bank holding company registered with the Board of Governors of the Federal Reserve System. Indiana Bank and Trust Company, its principal subsidiary, is an FDIC insured state chartered commercial bank. Indiana Bank and Trust Company was founded in 1908 and offers a wide range of consumer and commercial financial services through 20 branch offices in central and southeastern Indiana.
Forward-Looking Statement
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include expressions such as "expects," "intends," "believes," and "should," which are necessarily statements of belief as to the expected outcomes of future events. Actual results could materially differ from those presented. Indiana Community Bancorp undertakes no obligation to release revisions to these forward-looking statements or reflect events or circumstances after the date of this release. The Company's ability to predict future results involves a number of risks and uncertainties, some of which have been set forth in the Company's most recent annual report on Form 10-K, which disclosures are incorporated by reference herein.
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INDIANA COMMUNITY BANCORP |
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| CONSOLIDATED BALANCE SHEETS | ||
| (in thousands, except share data) | ||
| (unaudited) | June 30, | December 31, |
| 2010 | 2009 | |
| Assets: | ||
| Cash and due from banks | $12,845 | $10,808 |
| Interest bearing demand deposits | 4,792 | 41,253 |
| Cash and cash equivalents | 17,637 | 52,061 |
| Interest bearing time deposits | 410 | 410 |
|
Securities available for sale at fair value (amortized cost $229,344 and $149,031) |
230,998 | 149,633 |
| Securities held to maturity at amortized cost (fair value $0 and $3,392) | -- | 3,674 |
| Loans held for sale (fair value $3,392 and $6,213) | 3,295 | 6,075 |
| Portfolio loans: | ||
| Commercial and commercial mortgage loans | 548,320 | 527,946 |
| Residential mortgage loans | 93,169 | 97,551 |
| Second and home equity loans | 96,361 | 97,071 |
| Other consumer loans | 13,379 | 15,312 |
| Unearned income | ( 174) | ( 99) |
| Total portfolio loans | 751,055 | 737,781 |
| Allowance for loan losses | (14,339) | (13,113) |
| Portfolio loans, net | 736,716 | 724,668 |
| Premises and equipment | 16,156 | 15,151 |
| Accrued interest receivable | 3,980 | 3,533 |
| Other assets | 51,676 | 55,118 |
| TOTAL ASSETS | $1,060,868 | $1,010,323 |
| Liabilities and Shareholders' Equity: | ||
| Liabilities: | ||
| Deposits: | ||
| Demand | $76,749 | $80,938 |
| Interest checking | 195,921 | 170,226 |
| Savings | 45,896 | 42,520 |
| Money market | 223,080 | 207,089 |
| Certificates of deposits | 333,540 | 339,025 |
| Retail deposits | 875,186 | 839,798 |
| Public fund certificates | 508 | 507 |
| Wholesale deposits | 508 | 507 |
| Total deposits | 875,694 | 840,305 |
| FHLB advances | 64,917 | 55,000 |
| Junior subordinated debt | 15,464 | 15,464 |
| Other liabilities | 17,631 | 14,630 |
| Total liabilities | 973,706 | 925,399 |
| Commitments and Contingencies | ||
| Shareholders' equity: | ||
| No par preferred stock; Authorized: 2,000,000 shares | ||
|
Issued and outstanding: 21,500 and 21,500; Liquidation preference $1,000 per share |
21,105 | 21,054 |
| No par common stock; Authorized: 15,000,000 shares | ||
| Issued and outstanding: 3,385,079 and 3,358,079 | 21,097 | 21,060 |
| Retained earnings, restricted | 44,309 | 42,862 |
| Accumulated other comprehensive income (loss), net | 651 | (52) |
| Total shareholders' equity | 87,162 | 84,924 |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $1,060,868 | $1,010,323 |
| INDIANA COMMUNITY BANCORP | ||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||
| (in thousands, except share and per share data) | ||||
| (unaudited) | ||||
| Three Months Ended | Six Months Ended | |||
| June 30, | June 30, | |||
| 2010 | 2009 | 2010 | 2009 | |
| Interest Income: | ||||
| Securities and interest bearing deposits | 1,448 | 839 | 2,539 | 1,667 |
| Commercial and commercial mortgage loans | 7,432 | 7,586 | 14,788 | 15,168 |
| Residential mortgage loans | 1,156 | 1,609 | 2,371 | 3,407 |
| Second and home equity loans | 1,141 | 1,253 | 2,308 | 2,531 |
| Other consumer loans | 279 | 369 | 574 | 759 |
| Total interest income | 11,456 | 11,656 | 22,580 | 23,532 |
| Interest Expense: | ||||
| Checking and savings accounts | 519 | 352 | 975 | 625 |
| Money market accounts | 450 | 615 | 941 | 1,089 |
| Certificates of deposit | 2,285 | 2,745 | 4,717 | 5,513 |
| Total interest on retail deposits | 3,254 | 3,712 | 6,633 | 7,227 |
| Brokered deposits | -- | 51 | -- | 107 |
| Public funds | 2 | 18 | 4 | 70 |
| Total interest on wholesale deposits | 2 | 69 | 4 | 177 |
| Total interest on deposits | 3,256 | 3,781 | 6,637 | 7,404 |
| FHLB advances | 262 | 1,088 | 525 | 2,276 |
| Other borrowings | -- | 1 | -- | 1 |
| Junior subordinated debt | 76 | 112 | 150 | 248 |
| Total interest expense | 3,594 | 4,982 | 7,312 | 9,929 |
| Net interest income | 7,862 | 6,674 | 15,268 | 13,603 |
| Provision for loan losses | 1,496 | 6,788 | 3,591 | 8,886 |
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Net interest income (loss) after provision for loan losses |
6,366 | (114) | 11,677 | 4,717 |
| Non Interest Income: | ||||
| Gain on sale of loans | 429 | 674 | 786 | 1,736 |
| Gain on securities | 12 | -- | 12 | -- |
| Other than temporary impairment losses | -- | -- | (55) | -- |
| Service fees on deposit accounts | 1,698 | 1,594 | 3,182 | 3,048 |
| Loan servicing income, net of impairment | 121 | 140 | 236 | 273 |
| Miscellaneous | 672 | 328 | 934 | 722 |
| Total non interest income | 2,932 | 2,736 | 5,095 | 5,779 |
| Non Interest Expenses: | ||||
| Compensation and employee benefits | 3,310 | 3,454 | 7,059 | 7,132 |
| Occupancy and equipment | 960 | 962 | 1,914 | 1,994 |
| Service bureau expense | 490 | 513 | 968 | 992 |
| FDIC insurance expense | 528 | 775 | 1,035 | 1,075 |
| Marketing | 205 | 191 | 389 | 407 |
| Miscellaneous | 1,415 | 1,570 | 2,651 | 3,098 |
| Total non interest expenses | 6,908 | 7,465 | 14,016 | 14,698 |
| Income (loss) before income taxes | 2,390 | (4,843) | 2,756 | (4,202) |
| Income tax provision (credit) | 705 | (2,001) | 653 | (1,800) |
| Net Income (loss) | $1,685 | $(2,842) | $2,103 | $(2,402) |
| Basic earnings (loss) per common share | $0.41 | $(0.93) | $0.45 | $(0.89) |
| Diluted earnings (loss) per common share | $0.41 | $(0.93) | $0.45 | $(0.89) |
| Basic weighted average number of common shares | 3,358,079 | 3,358,079 | 3,358,079 | 3,358,079 |
| Dilutive weighted average number of common shares | 3,358,079 | 3,358,079 | 3,358,079 | 3,358,079 |
| Dividends per common share | $0.010 | $0.120 | $0.020 | $0.240 |
| Supplemental Data: | Six Months Ended | Year to Date | ||
| (unaudited) | June 30, | June 30, | ||
| 2010 | 2009 | 2010 | 2009 | |
| Weighted average interest rate earned | ||||
| on total interest-earning assets | 4.78% | 5.04% | 4.83% | 5.19% |
| Weighted average cost of total | ||||
| interest-bearing liabilities | 1.52% | 2.24% | 1.59% | 2.28% |
| Interest rate spread during period | 3.26% | 2.80% | 3.24% | 2.91% |
| Net interest margin | ||||
| (net interest income divided by average | ||||
| interest-earning assets on annualized basis) | 3.28% | 2.88% | 3.27% | 3.00% |
| Total interest income divided by average | ||||
| Total assets (on annualized basis) | 4.38% | 4.63% | 4.41% | 4.77% |
| Total interest expense divided by | ||||
| average total assets (on annualized basis) | 1.38% | 1.98% | 1.43% | 2.01% |
| Net interest income divided by average | ||||
| total assets (on annualized basis) | 3.01% | 2.65% | 2.98% | 2.76% |
| Return on assets (net income divided by | ||||
| average total assets on annualized basis) | 0.64% | -1.13% | 0.41% | -0.49% |
| Return on equity (net income divided by | ||||
| average total equity on annualized basis) | 7.85% | -12.45% | 4.95% | -5.27% |
| June 30, | December 31, | |||
| 2010 | 2009 | |||
| Book value per share outstanding | $ 19.51 | $ 19.02 | ||
| Nonperforming Assets: | ||||
| Loans: Non-accrual | $ 19,474 | $ 19,889 | ||
| Past due 90 days or more | -- | 1,410 | ||
| Restructured | 3,454 | 499 | ||
| Total nonperforming loans | 22,928 | 21,798 | ||
| Real estate owned, net | 11,635 | 12,603 | ||
| Other repossessed assets, net | 10 | 24 | ||
| Total Nonperforming Assets | $ 34,573 | $ 34,425 | ||
| Nonperforming assets divided by total assets | 3.26% | 3.41% | ||
| Nonperforming loans divided by total loans | 3.05% | 2.95% | ||
| Balance in Allowance for Loan Losses | $ 14,339 | $ 13,113 | ||