COLUMBUS, Ind., April 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 quarterly earnings of $418,000 or $0.04 diluted earnings per common share compared to $440,000 or $0.05 diluted earnings per common share a year earlier. The provision for loan losses of $2.1 million for the quarter, while still at elevated levels, was unchanged compared to the prior year. However, net charge offs for the quarter totaled $613,000 which was a significant decrease from $1.8 million in the first quarter of 2009. The significant decrease in net charge offs resulted in a $1.5 million increase in the allowance for loan losses. Total loans increased $4.1 million while total deposits increased $16.2 million. Chairman and CEO John Keach, Jr. stated, "We are pleased with our return to profitability this quarter. Throughout the economic downturn, we have continued to execute a business plan designed to build a solid foundation from which to enhance the Company's franchise value." Executive Vice President and CFO Mark Gorski added, "It is gratifying to see the improvement in net earnings and net interest margin which resulted from the balance sheet repositioning. The growth in commercial loans and deposits will be important to improvements in earnings in future quarters."
Balance Sheet
Total assets were $1.0 billion as of March 31, 2010, an increase of $13.5 million from December 31, 2009. Total loans increased $4.1 million for the quarter. Commercial and commercial mortgage loans increased $10.3 million for the quarter while residential mortgage loans and consumer loans decreased $6.2 million for the quarter. Commercial loan growth was driven by the successful acquisition of a few larger commercial relationships mainly in the Bank's southeast Indiana footprint.
Total retail deposits increased $16.2 million for the quarter. This substantial growth in retail deposits occurred in all categories, however the majority of the increase occurred in interest bearing transaction accounts which increased $12.7 million. The Bank is still benefiting from the market disruption in many of its southeast Indiana markets.
Asset Quality
Provision for loan losses totaled $2.1 million for the quarter which was equal to the provision for the first quarter of 2009. Net charge offs were $613,000 for the first quarter compared to $1.8 million for the first quarter of 2009. As a result, the allowance for loan losses increased by $1.5 million for the quarter to $14.6 million at March 31, 2010. The ratio of the allowance for loan losses to total loans increased to 1.97% at March 31, 2010 compared to 1.78% at December 31, 2009. Total non-performing assets decreased $1.4 million to $33.0 million at March 31, 2010. Non-performing assets to total assets was 3.23% at March 31, 2010.
Net Interest Income
Net interest income increased $477,000 or 6.9% to $7.4 million for the quarter. The increase in net interest income was primarily attributable to significant improvement in the net interest margin. Net interest margin for the quarter was 3.25%, which represented an increase of 38 basis points compared to the fourth quarter of 2009. The increase in the net interest margin was primarily due to the result of the Company's balance sheet repositioning which was executed in December and January. The prepayment and restructuring of the FHLB advances aided in reducing the Company's overall cost of interest bearing liabilities by 27 basis points or 14% in the first quarter of 2010 compared to the fourth quarter of 2009. Additionally, the net interest margin was aided by an increase in loans which have a higher yield than other interest earning assets.
Non Interest Income
Non interest income decreased $880,000 for the quarter. Gain on sale of loans decreased $705,000 for the quarter due to a significant decrease in origination volumes. Due to a significant reduction in interest rates that began late in 2008, there was a significant amount of mortgage refinance activity which increased origination volumes during the majority of 2009. Miscellaneous income decreased $132,000 for the quarter. Fee income from trust and investment management increased $160,000 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, miscellaneous income included a net loss on the writedown of other real estate of $338,000 for the quarter. The Company wrote down the carrying value of its largest other real estate owned property by $400,000 to $6.5 million based on negotiations related to the sale of the property. Management expects the sale to be completed during the second half of 2010.
Non Interest Expenses
Non interest expenses decreased $125,000 to $7.1 million for the quarter. Compensation and employee benefits expense increased $71,000 or 1.9% for the quarter. FDIC insurance expense increased $207,000 to $507,000 for the quarter. Miscellaneous expense decreased $292,000 for the quarter due primarily to a decrease in problem loan workout related costs of $234,000.
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.
| INDIANA COMMUNITY BANCORP | ||
| CONSOLIDATED BALANCE SHEETS | ||
| (in thousands, except share data) | ||
| (unaudited) | ||
|
March 31, 2010 |
December 31, 2009 |
|
| Assets: | ||
| Cash and due from banks | $ 10,952 | $ 10,808 |
| Interest bearing demand deposits | 8,597 | 41,253 |
| Cash and cash equivalents | 19,549 | 52,061 |
| Securities available for sale at fair value (amortized cost $197,671 and $149,031) | 198,559 | 149,633 |
| Securities held to maturity at amortized cost (fair value $3,554 and $3,802) | 3,786 | 4,084 |
| Loans held for sale (fair value $2,463 and $6,213) | 2,404 | 6,075 |
| Portfolio loans: | ||
| Commercial and commercial mortgage loans | 538,267 | 527,946 |
| Residential mortgage loans | 95,005 | 97,551 |
| Second and home equity loans | 94,712 | 97,071 |
| Other consumer loans | 13,960 | 15,312 |
| Unearned income | (80) | (99) |
| Total portfolio loans | 741,864 | 737,781 |
| Allowance for loan losses | (14,595) | (13,113) |
| Portfolio loans, net | 727,269 | 724,668 |
| Premises and equipment | 15,269 | 15,151 |
| Accrued interest receivable | 3,921 | 3,533 |
| Other assets | 53,096 | 55,118 |
| TOTAL ASSETS | $ 1,023,853 | $ 1,010,323 |
| Liabilities and Shareholders' Equity: | ||
| Liabilities: | ||
| Deposits: | ||
| Demand | $ 81,337 | $ 80,938 |
| Interest checking | 174,025 | 170,226 |
| Savings | 45,921 | 42,520 |
| Money market | 212,553 | 207,089 |
| Certificates of deposit | 342,148 | 339,025 |
| Retail deposits | 855,984 | 839,798 |
| Public fund certificates | 528 | 507 |
| Wholesale deposits | 528 | 507 |
| Total deposits | 856,512 | 840,305 |
| FHLB Advances | 52,717 | 55,000 |
| Junior subordinated debt | 15,464 | 15,464 |
| Other liabilities | 13,918 | 14,630 |
| Total liabilities | 938,611 | 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 | 21,079 | 21,054 |
| No par common stock; Authorized: 15,000,000 shares | ||
| Issued and outstanding: 3,358,079 and 3,358,079 | 21,071 | 21,060 |
| Retained earnings, restricted | 42,952 | 42,862 |
| Accumulated other comprehensive income/(loss), net | 140 | (52) |
| Total shareholders' equity | 85,242 | 84,924 |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 1,023,853 | $ 1,010,323 |
| INDIANA COMMUNITY BANCORP | ||
| CONSOLIDATED STATEMENTS OF INCOME | ||
| (in thousands, except share and per share data) | ||
| (unaudited) | ||
|
Three Months Ended March 31, |
||
| Interest Income: | 2010 | 2009 |
| Short term investments | $ 16 | $ 7 |
| Securities | 1,075 | 821 |
| Commercial and commercial mortgage loans | 7,356 | 7,582 |
| Residential mortgage loans | 1,215 | 1,798 |
| Second and home equity loans | 1,167 | 1,278 |
| Other consumer loans | 295 | 390 |
| Total interest income | 11,124 | 11,876 |
| Interest Expense: | ||
| Checking and savings accounts | 456 | 273 |
| Money market accounts | 491 | 474 |
| Certificates of deposit | 2,432 | 2,768 |
| Total interest on retail deposits | 3,379 | 3,515 |
| Brokered deposits | -- | 56 |
| Public funds | 2 | 52 |
| Total interest on wholesale deposits | 2 | 108 |
| Total interest on deposits | 3,381 | 3,623 |
| FHLB advances | 263 | 1,188 |
| Junior subordinated debt | 74 | 136 |
| Total interest expense | 3,718 | 4,947 |
| Net interest income | 7,406 | 6,929 |
| Provision for loan losses | 2,095 | 2,098 |
| Net interest income after provision for loan losses | 5,311 | 4,831 |
| Non Interest Income: | ||
| Gain on sale of loans | 357 | 1,062 |
| Other than temporary impairment losses | (55) | -- |
| Service fees on deposit accounts | 1,484 | 1,454 |
| Loan servicing income, net of impairment | 115 | 133 |
| Miscellaneous | 262 | 394 |
| Total non interest income | 2,163 | 3,043 |
| Non Interest Expenses: | ||
| Compensation and employee benefits | 3,749 | 3,678 |
| Occupancy and equipment | 954 | 1,032 |
| Service bureau expense | 478 | 479 |
| FDIC insurance expense | 507 | 300 |
| Marketing | 184 | 216 |
| Miscellaneous | 1,236 | 1,528 |
| Total non interest expenses | 7,108 | 7,233 |
| Income before income taxes | 366 | 641 |
| Income tax provision (credit) | (52) | 201 |
| Net Income | $ 418 | $ 440 |
| Basic earnings per common share | $ 0.04 | $ 0.05 |
| Diluted earnings per common share | $ 0.04 | $ 0.05 |
| Basic weighted average number of common shares | 3,358,079 | 3,358,079 |
| Dilutive weighted average number of common shares | 3,358,079 | 3,358,079 |
| Dividends per common share | $ 0.010 | $ 0.120 |
| Supplemental Data: |
Three Months Ended March 31, |
|
| (unaudited) | 2010 | 2009 |
|
Weighted average interest rate earned on total interest-earning assets |
4.89% | 5.34% |
| Weighted average cost of total interest-bearing liabilities | 1.66% | 2.32% |
| Interest rate spread during period | 3.23% | 3.02% |
|
Net interest margin (net interest income divided by average interest-earning assets on annualized basis) |
3.25% | 3.12% |
|
Total interest income divided by average total assets (on annualized basis) |
4.44% | 4.91% |
|
Total interest expense divided by average total assets (on annualized basis) |
1.48% | 2.05% |
|
Net interest income divided by average total assets (on annualized basis) |
2.95% | 2.86% |
|
Return on assets (net income divided by average total assets on annualized basis) |
0.17% | 0.18% |
|
Return on equity (net income divided by average total equity on annualized basis) |
1.99% | 1.93% |
| March 31, 2010 | December 31, 2009 | |
| Book value per share outstanding | $ 19.11 | $ 19.02 |
| Nonperforming Assets: | ||
| Loans: Non-accrual | $ 21,228 | $ 19,889 |
| Past due 90 days or more | 53 | 1,410 |
| Restructured | 226 | 499 |
| Total nonperforming loans | 21,507 | 21,798 |
| Real estate owned, net | 11,505 | 12,603 |
| Other repossessed assets, net | 14 | 24 |
| Total Nonperforming Assets | $ 33,026 | $ 34,425 |
| Nonperforming assets divided by total assets | 3.23% | 3.41% |
| Nonperforming loans divided by total loans | 2.90% | 2.95% |
| Balance in Allowance for Loan Losses | $ 14,595 | $ 13,113 |