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Northeast Indiana Bancorp, Inc. Announces Increased Third Quarter Earnings
HUNTINGTON, Ind., Oct. 13, 2011 /PRNewswire/ -- Northeast Indiana Bancorp, Inc. (OTCQB: NIDB), the parent company of First Federal Savings Bank, today announced net income increased $92,000 or 17.1% to $631,000 ($0.51 per diluted common share) for the Company's third quarter ended September 30, 2011 compared to net income of $539,000 ($0.44 per diluted common share) for the third quarter ended September 30, 2010. The current three months earnings equates to an annualized return on average assets (ROA) of 0.98% and a return on average equity (ROE) of 9.97% compared to an annualized ROA of 0.83% and an ROE of 9.02% for the three months ended September 30, 2010.

Net interest income increased by $129,000 or 5.9% to $2.3 million for the quarter ended September 30, 2011 when compared to $2.2 million for the quarter ended September 30, 2010. The Company's net interest margin increased by thirty basis points to 3.85% for the current quarter compared to 3.55% in the year earlier quarter. On a linked quarter basis, the Company's 3.85% net interest margin was eleven basis points higher compared to the 3.74% net interest margin reported for the quarter ended June 30, 2011.

The Company made a $375,000 provision for loan loss during the quarter ended September 30, 2011 compared to a $500,000 provision for loan loss for the quarter ended September 30, 2010. Management continues to feel it is prudent to increase the allowance for loan losses by setting aside provisions for loan losses at higher levels during these weak economic conditions. The Company experienced a decline in net charge-offs to $123,000 for the quarter ended September 30, 2011 compared to net charge-offs of $515,000 for the quarter ended September 30, 2010. In addition, total non-performing assets declined $1.6 million or 17.0% to $8.0 million at September 30, 2011 compared to $9.6 million at June 30, 2011.

Noninterest income increased slightly to $727,000 for the third quarter ended September 30, 2011 compared to $687,000 during the quarter ended September 30, 2010. The modest increase is mostly due to an increase of $188,000 in net gains on security sales more than offsetting an increase in net losses on repossessed asset sales and a decline in net gain on loan sales between quarterly periods.

Noninterest expense increased $175,000 to $1.8 million for the quarter ended September 30, 2011 when compared to $1.6 million for the quarter ended September 30, 2010. This increase was due to a $90,000 non-recurring payment into the bank's frozen defined benefit pension plan to remain adequately funded. In addition, management set up a $67,500 valuation allowance on three real estate owned parcels due to continued weak market pricing on similar collateral.

Net income for the nine months ended September 30, 2011 decreased to $1.29 million ($1.05 per diluted common share) compared to net income of $1.48 million ($1.21 per diluted common share) for the nine months ended September 30, 2010. Net interest income increased $351,000 or 5.5% to $6.69 million for the nine months ended September 30, 2011 compared to $6.34 million for the prior year nine month period. The Company made a $1.93 million provision for loan loss for the nine months ended September 30, 2011 compared to a $1.35 million provision for loan loss for the nine months ended September 30, 2010. Noninterest income increased slightly to $1.92 million for the nine months ended September 30, 2011 compared to $1.88 million for September 30, 2010. Noninterest expense was $266,000 higher for the nine months ended September 30, 2011 compared to the nine months ended September 30, 2010. Increases in salaries and employee benefits between nine month periods were due to the non-recurring pension payment as well as the establishment of a valuation allowance on real estate owned, both of which were discussed with quarterly results. These increases were partially offset by decreases in deposit insurance premiums.

Total assets increased $3.07 million or 1.2% to $259.17 million at September 30, 2011 compared to December 31, 2010 assets of $256.10 million. Net loans decreased $3.45 million to $179.46 million at September 30, 2011 compared to $182.91 million at December 31, 2010. However, net loans increased 3.0% or $5.26 million for the current quarter when compared to net loans reported of $174.20 million at June 30, 2011. Total deposits increased sharply by $13.16 million or 7.5% to $189.56 million at September 30, 2011 from $176.40 million at December 31, 2010. The increase in total deposits came in noninterest bearing DDA, NOW, MMDA and Savings balances through First Federal's full service branches. These newly acquired lower-costing deposits were utilized to pay off maturing brokered deposits and wholesale borrowed funds. Borrowed funds decreased $12.18 million or 22.7% to $41.38 million at September 30, 2011 compared to $53.56 million at December 31, 2010.

Shareholder's equity at September 30, 2011 was $25.57 million compared to $24.13 million at December 31, 2010. The book value of NEIB's stock was $20.62 per common share as of September 30, 2011. The number of outstanding common shares was 1,239,946. The last reported trade of the stock on October 11, 2011 was $12.10 per common share.

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 four full-service Indiana offices in Huntington (2), Warsaw and Fort Wayne. 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.com.

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

(Unaudited)


CONSOLIDATED STATEMENT OF FINANCIAL CONDITION





ASSETS

September 30,

2011
December 31,

2010

Interest-earning cash and cash equivalents
$
8,993,434
$
9,450,979

Noninterest earning cash and cash equivalents
3,065,342
2,045,215

Total cash and cash equivalents
12,058,776
11,496,194

Securities available for sale
51,463,727
46,477,692

Securities held to maturity
483,304
400,000

Loans held for sale
1,248,200
353,642

Loans receivable, net of allowance for loan loss September 30, 2011
$3,859,859 and December 31, 2010 $3,227,844
179,465,188
182,913,386

Accrued interest receivable
968,755
981,357

Premises and equipment
2,510,383
2,554,170

Investments in limited liability partnerships
173,610
233,001

Cash surrender value of life insurance
6,954,356
6,765,215

Other assets
3,843,423
3,926,783

Total Assets
$
259,169,722
$
256,101,440

LIABILITIES AND STOCKHOLDERS' EQUITY



Non-interest bearing deposits
14,616,806
14,301,482

Interest bearing deposits
174,947,410
162,099,970

Borrowed Funds
41,385,764
53,565,973

Accrued interest payable and other liabilities
2,649,100
1,998,866

Total Liabilities
233,599,080
231,966,291





Retained earnings – substantially restricted
25,570,642
24,135,149

Total Liabilities and Shareholders' Equity
$
259,169,722
$
256,101,440













CONSOLIDATED STATEMENTS OF INCOME






Three Months Ended
Nine Months Ended


September 30,
September 30,



2011

2010

2011

2010

Total interest income
$
3,048,865
$
3,248,075
$
9,133,501
$
9,691,357

Total interest expense

744,798

1,072,797

2,441,124

3,349,686

Net interest income
$
2,304,067
$
2,175,278
$
6,692,377
$
6,341,671

Provision for loan losses

375,000

500,000

1,925,000

1,350,000

Net interest income after provision for loan losses
$
1,929,067
$
1,675,278
$
4,767,377
$
4,991,671

Service charges on deposit accounts

160,060

172,027

450,048

515,344

Net gain/ (loss) on sale of securities

158,362

(29,412)

272,542

(69,259)

Net gain on sale of loans

187,863

235,142

441,949

480,709

Net (loss) on sale of repossessed assets

(103,607)

(742)

(204,902)

(54,083)

Brokerage fees

113,033

87,169

303,190

304,914

Increase in cash surrender value of life insurance

62,138

61,481

189,141

188,119

Other income

149,236

161,171

466,368

510,238

Total noninterest income
$
727,085
$
686,836
$
1,918,336
$
1,875,982

Salaries and employee benefits

925,219

848,710

2,634,326

2,553,739

Occupancy

235,265

226,371

706,614

654,757

Data processing

186,320

188,722

578,892

566,441

Deposit insurance premiums

31,000

84,000

194,000

233,400

Professional fees

102,255

77,412

289,097

221,122

Correspondent bank charges

33,662

32,319

100,989

92,867

Valuation allowances – repossessed assets

67,500

-

67,500

-

Other expense

226,598

174,785
577,585

560,359

Total noninterest expenses
$
1,807,819
$
1,632,319
$
5,149,003
$
4,882,685

Income before income tax expense
$
848,333
$
729,795
$
1,536,710
$
1,984,968

Income tax expense

217,564

190,325

243,324

502,430

Net Income
$
630,769
$
539,470
$
1,293,386
$
1,482,538







NORTHEAST INDIANA BANCORP

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



Three Months Ended

September 30,
Nine Months Ended

September 30,


2011
2010
2011
2010

Basic Earnings per common share
0.51
0.44
1.05
1.21

Dilutive Earnings per share
0.51
0.44
1.05
1.21

Net interest margin
3.85%
3.55%
3.72%
3.53%

Return on average assets
0.98%
0.83%
0.67%
0.77%

Return on average equity
9.97%
9.02%
6.99%
8.42%

Efficiency ratio
59.64%
57.03%
59.80%
59.42%

Average shares outstanding- primary
1,232,303
1,229,589
1,231,717
1,229.235

Average shares outstanding- diluted
1,237,507
1,229,872
1,232,584
1,229,919

Allowance for loan losses:





Balance at beginning of period
$
3,608,088
$
2,838,360
$
3,227,844
$
2,868,468

Charge-offs:





One-to-four family
124,116
213,145
454,569
312,504

Commercial real estate
15,138
174,286
304,479
302,368

Land/land development
-
-
284,961
-

Commercial
-
126,046
124,292
801,106

Consumer
-
21,933
160,945
31,286

Gross charge-offs
141,297
535,410
1,329,246
1,447,264

Recoveries:





One-to-four family
975
975
2,425
2,925

Commercial real estate
-
455
-
455

Land/land development
-
-
-
-

Commercial
-
6,791
-
6,791

Consumer
17,093
11,945
33,836
41,742

Gross recoveries
18,068
20,166
36,261
51,912

Net charge-offs
123,299
515,244
1,292,985
1,395,352

Additions charged to operations
375,000
500,000
1,925,000
1,350,000

Balance at end of period
$
3,859,859
$
2,823,116
$
3,859,859
$
2,823,116







Net loan charge-offs to average loans (1)
0.27%
1.06%
0.94%
0.95%







Nonperforming assets (000's)
At September 30,
At September 30,
At June 30,
At December 31,

Loans:
2011
2010
2011
2010

Non-accrual
$
6,750
$
6,246
$
5,640
$
7,275

Past 90 days or more and still accruing
-
-
-
-

Troubled debt restructured
-
708
2,421
737

Total nonperforming loans
6,750
6,954
8,061
8,012

Real estate owned
1,254
1,487
1,586
594

Other repossessed assets
-
19
1
0

Total nonperforming assets
$
8,004
$
8,460
$
9,648
$
8,606





Nonperforming assets to total assets
3.10%
3.28%
3.78%
3.36%

Nonperforming loans to total loans
3.68%
3.65%
4.53%
4.30%

Allowance for loan losses to nonperforming loans
57.19%
40.59%
44.77%
40.29%

Allowance for loan losses to net loans receivable
2.11%
1.48%
2.07%
1.76%










At September 30,


2011
2010









Stockholders' equity as a % of total assets
9.87%
9.32%



Book value per share
$
20.62
$
19.58



Common shares outstanding- EOP
1,239,946
1,239,946









(1) Ratios for the three-month periods are annualized.

















SOURCE Northeast Indiana Bancorp, Inc.