INDIANAPOLIS, Jan. 21, 2004 (PRIMEZONE) -- First Indiana Corporation today announced earnings of $2.5 million, or $0.16 per diluted share, for the year ended December 31, 2003. Earnings for the previous year were $21.2 million, or $1.34 per diluted share. Earnings for the fourth quarter of 2003 were $2.0 million, or $0.13 per diluted share, compared with $1.1 million, or $0.07 per diluted share, for the same period in 2002. Earnings for the fourth quarter of 2003 were affected by certain non-credit related charges, which are discussed later in this release.
Net interest income for the fourth quarter of 2003 was $18.3 million, compared with $18.7 million for the same period in 2002. Net interest income was $76.9 million for the year ended December 31, 2003, compared with $73.8 million for the year ended December 31, 2002. Net interest margin was 3.55 percent for the fourth quarter of 2003, compared with 3.62 percent for the third quarter of 2003 and 3.68 percent for the fourth quarter of 2002. Historically low interest rates continue to compress the net interest margin and net interest income, as deposit rates have been unable to fully absorb reductions in market interest rates over the past several years.
Loans outstanding averaged $1.82 billion for the fourth quarter of 2003, compared with $1.87 billion for the fourth quarter of 2002. The decrease was due primarily to continuing rapid prepayments on consumer and residential loans and increased sales of consumer loan production.
Growth in demand deposits continued, with an average of $447.4 million in the fourth quarter of 2003, an increase of 19 percent over the same quarter one year ago, exclusive of the MetroBanCorp acquisition, which was effective January 14, 2003.
The provision for loan losses for the fourth quarter was $3.1 million, resulting in a provision for the year of $39.0 million, compared with $20.8 million for the previous year. Net loan charge-offs for the fourth quarter of 2003 were $7.0 million. As a result of working through the portfolio of non-performing loans, commercial loan charge-offs in the fourth quarter of 2003 were primarily related to loans with previously established reserves. The allowance for loan losses at December 31, 2003 was $53.2 million, which represents 2.93 percent of loans, compared with 3.15 percent at September 30, 2003, and 2.42 percent at December 31, 2002. Non-performing assets decreased to $38.9 million at year-end 2003, compared with $45.6 million at September 30, 2003, and $51.8 million at year-end 2002, with improvement in both commercial and consumer non-performing levels from one year ago. The ratio of allowance for loan losses to non-performing loans was 152 percent at December 31, 2003, compared with 138 percent at September 30, 2003, and 103 percent at December 31, 2002.
Said Marni McKinney, vice chairman and chief executive officer, "Our continued improvement in the level of non-performing loans is the result of carefully reviewing our portfolio and developing and implementing specific action plans to resolve credit issues. As discussed in previous communications, we identified specific areas for improvement and worked with internal policies and procedures to address them. We are very pleased with the progress we've made, and will continue to diligently focus on credit quality."
Non-interest income for the fourth quarter of 2003 was $10.6 million, compared with $11.2 million for the same period in 2002. Included in non-interest income for the fourth quarter of 2003 was $308,000 from the MetroBanCorp acquisition. Also included in the fourth quarter of 2003 was a loan servicing loss of $1.8 million. This loss reflects continued high prepayments and adjustments to certain assumptions used in determining the estimated market value of the loan servicing rights portfolio. Non-interest income for the year ended December 31, 2003, was $49.6 million, compared with $46.8 million for the same period in 2002. Included in non-interest income for the year was $1.1 million from the MetroBanCorp acquisition. Positive growth in non-interest income for 2003 occurred in the areas of trust, up 16 percent; Somerset fees, up 10 percent; and deposit fee income, up 6 percent, exclusive of the MetroBanCorp acquisition and despite a reduction in credit card interchange rates. Growth continued in the gain on sale of loans, which was up 28 percent.
Non-interest expense was $22.8 million for the fourth quarter of 2003, compared with $17.4 million for the fourth quarter of 2002. Non-interest expense for the year ended December 31, 2003, was $83.6 million, compared with $66.5 million for the year ended December 31, 2002. Included in non-interest expense for 2003 was $4.7 million in expenses related to the integration and operation of MetroBanCorp. Also, contributing to the increase in non-interest expense for 2003 was additional staffing in key areas, expenses associated with the retirement of the Bank's president and chief executive officer in the fourth quarter of 2003, and an increase in the accrual for salaries in the third quarter. Furthermore, the management incentive bonus, although accrued at a reduced rate for 2003, is higher than 2002, when multi-year incentive awards were reversed.
On January 13, 2003, MetroBanCorp merged with First Indiana Corporation with all integration activities being completed by the end of the second quarter of 2003. The acquisition of MetroBanCorp was accretive in 2003, adding $0.03 per diluted share.
Ms. McKinney said, "The acquisition has performed very well, and we are pleased with our successful integration of associates, systems, and processes, and our success in client retention. All of these have demonstrated our ability to move into new markets and continue to grow."
Ms. McKinney and William J. Brunner, chief financial officer, will host a conference call to discuss fourth quarter and year-end financial results on Thursday, January 22, at 8:00 a.m. EST (Indianapolis time; Indianapolis is on the same time as New York.) To participate, please call (800) 278-9857 and ask for First Indiana year-end earnings. A replay of the call will be available from 11:00 a.m. EST on Thursday, January 22, through midnight, Thursday, January 29. To hear the replay, call (800) 642-1687 and use conference ID: 4810389.
First Indiana Corporation (Nasdaq:FINB) is a full-service financial services company offering comprehensive financial solutions to businesses and individuals. It is the holding company for First Indiana Bank, N.A., the largest commercial bank headquartered in Indianapolis, and Somerset, an accounting and consulting firm. Founded in 1915, First Indiana Bank is a national bank with 33 offices in Central Indiana, plus construction and consumer loan offices in Indiana, Arizona, Florida, Illinois, North Carolina, and Ohio. First Indiana also originates consumer loans in 46 states through a national independent agent network. Through Somerset and FirstTrust Indiana, First Indiana offers a full array of tax planning, accounting, consulting, retirement and estate planning, and investment advisory and trust services. Information about First Indiana is available at (317) 269-1200, or at www.firstindiana.com, which is not a part of this news release.
Statements contained in this news release that are not historical facts may constitute forward-looking statements (within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended) which involve significant risks and uncertainties. First Indiana intends such forward-looking statements to be covered by the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of invoking these safe-harbor provisions. The ability to predict results or the actual effect of future plans or strategies is inherently uncertain, and involves a number of risks and uncertainties. In particular, among the factors that could cause actual results to differ materially are general economic conditions, unforeseen international political events, changes in interest rates (including reductions or increases in lending rates established by the Board of Governors of the Federal Reserve System), changes in consumers' investment decisions due to shifts in interest rates, loss of deposits and loans to other financial institutions, substantial changes in financial markets, changes in real estate values and the real estate market, changes in estimated values of loan servicing rights, regulatory changes, or unanticipated results in pending legal proceedings or regulatory filings. The fact that there are various risks and uncertainties should be considered in evaluating forward-looking statements, and undue reliance should not be placed on such statements.
The First Indiana Corporation company logo is available at http://media.primezone.com/prs/single/?pkgid=622
Financial Highlights
First Indiana Corporation and Subsidiaries
(Dollars in Thousands, Except Per Share Data)
(Unaudited)
For the For the
Three Months Ended Twelve Months Ended
December 31 December 31
-------------------- ---------------------
2003 2002 2003 2002
-------- --------- --------- --------
Net Interest
Income $ 18,330 $ 18,712 $ 76,900 $ 73,780
Provision for
Loan Losses 3,098 11,005 38,974 20,756
Non-Interest
Income 10,599 11,205 49,563 46,765
Non-Interest
Expense 22,826 17,352 83,637 66,502
Net Earnings 1,972 1,059 2,529 21,180
Basic Earnings
Per Share $ 0.13 $ 0.07 $ 0.16 $ 1.36
Diluted Earnings
Per Share 0.13 0.07 0.16 1.34
Dividends Per
Share 0.165 0.160 0.660 0.640
Net Interest
Margin 3.55% 3.68% 3.69% 3.73%
Efficiency Ratio 78.91 58.00 66.14 55.17
Annualized Return
on Average Assets 0.36 0.20 0.11 1.02
Annualized Return on
Average Equity 3.72 1.85 1.15 9.66
Average Shares
Outstanding 15,578,099 15,550,638 15,570,508 15,537,186
Average Diluted
Shares
Outstanding 15,754,011 15,760,269 15,720,691 15,809,380
At December 31
------------------------
2003 2002
---------- ---------
Assets $ 2,193,137 $ 2,125,590
Loans 1,814,991 1,837,633
Deposits 1,489,972 1,339,204
Shareholders'
Equity 208,894 221,211
Shareholders'
Equity/Assets 9.52% 10.41%
Shareholders'
Equity Per
Share $ 13.44 $ 14.23
Market
Closing Price 18.74 18.51
Shares
Outstanding 15,546,747 15,540,460
------------------------------------------
Condensed Consolidated Balance Sheets
First Indiana Corporation and Subsidiaries
(Dollars in Thousands)
(Unaudited)
December 31 September 30 December 31
2003 2003 2002
----------- ------------ -----------
Assets
Cash $ 58,590 $ 63,111 $ 76,050
Interest-Bearing Due from
Banks 1,715 7,346 -
Securities Available for
Sale 215,453 209,490 138,457
Other Investments 24,957 24,596 22,863
Loans
Business 515,316 551,398 501,213
Consumer 612,025 624,287 666,150
Residential Mortgage 316,822 289,034 311,324
Single-Family
Construction 192,450 196,728 212,772
Commercial Real Estate 178,378 163,861 146,174
----------- ----------- -----------
Total Loans 1,814,991 1,825,308 1,837,633
Allowance for Loan
Losses (53,197) (57,498) (44,469)
----------- ----------- -----------
Net Loans 1,761,794 1,767,810 1,793,164
Premises and Equipment 25,673 25,884 21,528
Accrued Interest
Receivable 9,353 9,072 10,771
Loan Servicing Rights 5,985 7,913 9,065
Goodwill 37,042 37,007 13,045
Other Intangible Assets 4,621 4,805 -
Other Assets 47,954 49,002 40,647
----------- ----------- -----------
Total Assets $ 2,193,137 $ 2,206,036 $ 2,125,590
=========== =========== ===========
Liabilities
Non-Interest-Bearing
Deposits $ 235,811 $ 231,649 $ 180,389
Interest-Bearing
Deposits
Demand Deposits 217,353 223,055 179,751
Savings Deposits 400,804 407,217 398,752
Certificates of
Deposit 636,004 655,685 580,312
----------- ----------- -----------
Total Interest-Bearing
Deposits 1,254,161 1,285,957 1,158,815
----------- ----------- -----------
Total Deposits 1,489,972 1,517,606 1,339,204
Short-Term Borrowings 147,074 156,912 170,956
Federal Home Loan Bank
Advances 265,488 256,511 346,532
Subordinated Notes 46,534 24,345 12,169
Accrued Interest Payable 2,156 1,962 2,290
Advances by Borrowers
for Taxes and Insurance 1,533 3,467 1,820
Other Liabilities 31,486 34,488 31,408
----------- ----------- -----------
Total Liabilities 1,984,243 1,995,291 1,904,379
----------- ----------- -----------
Shareholders' Equity
Common Stock 175 175 173
Capital Surplus 46,595 46,402 43,296
Retained Earnings 185,012 185,306 194,738
Accumulated Other
Comprehensive Income 1,756 2,593 4,644
Treasury Stock at Cost (24,644) (23,731) (21,640)
----------- ----------- -----------
Total Shareholders'
Equity 208,894 210,745 221,211
----------- ----------- -----------
Total Liabilities and
Shareholders' Equity $ 2,193,137 $ 2,206,036 $ 2,125,590
=========== =========== ===========
---------------------------------------------
Condensed Consolidated Statements of Earnings
First Indiana Corporation and Subsidiaries
(Dollars in Thousands, Except Per Share Data)
(Unaudited)
Three Months Twelve Months
Ended Ended
December 31 December 31
------------------- ---------------------
2003 2002 2003 2002
-------- -------- --------- ---------
Interest Income
Loans $ 24,529 $ 28,091 $ 104,979 $ 116,039
Securities
Available
for Sale 2,131 2,007 8,035 8,501
Dividends on Other
Investments 320 331 1,252 1,367
Federal Funds Sold -- 5 3 20
Interest-Bearing
Due from Banks 18 -- 61 --
-------- -------- --------- ---------
Total Interest
Income 26,998 30,434 114,330 125,927
Interest Expense
Deposits 5,528 8,278 25,164 36,976
Short-Term
Borrowings 305 466 1,390 2,059
Federal Home
Loan Bank
Advances 2,193 2,828 9,360 12,962
Subordinated
Notes 642 150 1,516 150
-------- -------- --------- ---------
Total Interest
Expense 8,668 11,722 37,430 52,147
-------- -------- --------- ---------
Net Interest
Income 18,330 18,712 76,900 73,780
Provision for
Loan Losses 3,098 11,005 38,974 20,756
-------- -------- --------- ---------
Net Interest
Income After
Provision for
Loan Losses 15,232 7,707 37,926 53,024
Non-Interest Income
Deposit Charges 4,185 4,039 16,895 14,963
Loan Servicing
Income (Expense) (1,759) 1 (2,079) 413
Loan Fees 606 781 2,610 2,723
Trust Fees 816 649 3,028 2,614
Somerset Fees 2,422 2,112 11,900 10,798
Investment Product
Sales Commissions 410 506 1,717 2,726
Sale of Loans 2,589 1,893 10,822 8,431
Sale of Investment
Securities -- 89 7 312
Other 1,330 1,135 4,663 3,785
-------- -------- --------- ---------
Total
Non-Interest
Income 10,599 11,205 49,563 46,765
Non-Interest
Expense
Salaries and
Benefits 12,936 9,625 49,318 37,804
Net Occupancy 1,276 990 4,831 4,071
Equipment 1,809 1,459 6,751 6,040
Professional
Services 1,928 1,532 6,026 4,763
Marketing 700 680 2,630 2,351
Telephone,
Supplies,and
Postage 1,061 745 4,034 3,222
Other Intangible
Asset
Amortization 184 -- 736 --
Other 2,932 2,321 9,311 8,251
-------- -------- --------- ---------
Total
Non-Interest
Expense 22,826 17,352 83,637 66,502
-------- -------- --------- ---------
Earnings before
Income Taxes 3,005 1,560 3,852 33,287
Income Taxes 1,033 501 1,323 12,107
-------- -------- --------- ---------
Net Earnings $ 1,972 $ 1,059 $ 2,529 $ 21,180
======== ======== ========= =========
Basic Earnings
Per Share $ 0.13 $ 0.07 $ 0.16 $ 1.36
======== ======== ========= =========
Diluted Earnings
Per Share $ 0.13 $ 0.07 $ 0.16 $ 1.34
======== ======== ========= =========
Dividends Per
Common Share $ 0.165 $ 0.160 $ 0.660 $ 0.640
======== ======== ========= =========
------------------------------------------
Net Interest Margin
First Indiana Corporation and Subsidiaries
(Dollars in Thousands)
(Unaudited)
Three Months Ended
------------------------------------------------------
December 31, 2003 December 31, 2002
-------------------------- --------------------------
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
---------- -------- ---- ---------- -------- ----
Assets
Interest-
Bearing
Due from
Banks $ 6,441 $ 18 1.11% $ -- $ -- -- %
Federal
Funds Sold 17 -- 1.43 1,332 5 1.40
Securities
Available
for Sale 211,825 2,131 4.02 141,122 2,007 5.69
Other
Investments 24,824 320 5.17 22,616 331 5.85
Loans
Business 529,484 6,806 5.10 503,598 6,689 5.27
Consumer 617,571 9,721 4.16 674,229 11,609 6.87
Residential
Mortgage 307,111 3,563 4.64 328,253 4,844 5.90
Single-Family
Construction 199,680 2,200 4.37 221,205 2,841 5.10
Commercial
Real Estate 165,623 2,239 5.38 139,593 2,108 6.01
---------- -------- ---------- --------
Total Loans 1,819,469 24,529 4.65 1,866,878 28,091 5.99
---------- -------- ---------- --------
Total Earning
Assets 2,062,576 26,998 4.58 2,031,948 30,434 5.97
Other
Assets 125,615 112,293
---------- ----------
Total Assets $2,188,191 $2,144,241
========== ==========
Liabilities
and
Shareholders'
Equity
Interest-
Bearing
Deposits
Demand
Deposits $ 226,856 $ 245 0.43% $ 174,679 $ 332 0.75%
Savings
Deposits 405,973 609 0.60 395,190 1,239 1.24
Certificates
of Deposit 672,944 4,674 2.76 720,735 6,707 3.69
---------- -------- ---------- --------
Total Interest-
Bearing
Deposits 1,305,773 5,528 1.68 1,290,604 8,278 2.54
Short-Term
Borrowings 128,636 305 0.94 131,295 466 1.41
Federal Home
Loan Bank
Advances 247,735 2,193 3.51 280,901 2,828 3.99
Subordinated
Notes 35,944 642 7.14 8,202 150 7.32
---------- -------- ---------- --------
Total Interest-
Bearing
Liabilities 1,718,088 8,668 2.00 1,711,002 11,722 2.72
Non-Interest-
Bearing
Demand
Deposits 220,562 167,445
Other
Liabilities 39,320 39,271
Shareholders'
Equity 210,221 226,523
---------- ----------
Total
Liabilities
and
Shareholders'
Equity $2,188,191 $2,144,241
========== ==========
Net Interest
Income/Spread $ 18,330 2.58% $ 18,712 3.25%
======== ==== ======== ====
Net Interest
Margin 3.55% 3.68%
==== ====
-------------------------------------------
Net Interest Margin
First Indiana Corporation and Subsidiaries
(Dollars in Thousands)
(Unaudited)
Twelve Months Ended
------------------------------------------------------
December 31, 2003 December 31, 2002
-------------------------- --------------------------
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
---------- -------- ---- ---------- -------- ----
Assets
Interest-
Bearing Due
from Banks $ 5,014 $ 61 1.21% $ -- $ -- --%
Federal
Funds Sold 227 3 1.23 1,412 20 1.41
Securities
Available
for Sale 177,898 8,035 4.52 145,172 8,501 5.86
Other
Investments 24,194 1,252 5.18 22,523 1,367 6.07
Loans
Business 562,138 28,716 5.11 478,151 26,889 5.62
Consumer 648,890 42,448 6.54 678,640 50,197 7.40
Residential
Mortgage 299,519 15,563 5.20 293,316 18,683 6.37
Single-Family
Construction 204,068 9,333 4.57 223,567 11,795 5.28
Commercial
Real Estate 161,352 8,919 5.53 134,155 8,475 6.32
---------- -------- ---------- --------
Total Loans 1,875,967 104,979 5.60 1,807,829 116,039 6.42
---------- -------- ---------- --------
Total Earning
Assets 2,083,300 114,330 5.49 1,976,936 125,927 6.37
Other Assets 134,446 107,356
---------- ----------
Total Assets $2,217,746 $2,084,292
========== ==========
Liabilities
and
Shareholders'
Equity
Interest-
Bearing
Deposits
Demand
Deposits $ 210,922 $ 1,096 0.52% $ 162,822 $ 1,319 0.81%
Savings
Deposits 423,401 3,076 0.73 418,224 5,582 1.33
Certificates
of Deposit 697,478 20,992 3.01 658,934 30,075 4.56
---------- -------- ---------- --------
Total Interest-
Bearing
Deposits 1,331,801 25,164 1.89 1,239,980 36,976 2.98
Short-Term
Borrowings 132,886 1,390 1.05 126,501 2,059 1.63
Federal Home
Loan Bank
Advances 262,666 9,360 3.56 301,710 12,962 4.30
Subordinated
Notes 21,400 1,516 7.08 2,067 150 7.26
---------- -------- ---------- --------
Total Interest-
Bearing
Liabilities 1,748,753 37,430 2.13 1,670,258 52,147 3.12
Non-Interest-
Bearing Demand
Deposits 209,126 154,148
Other
Liabilities 40,122 40,738
Shareholders'
Equity 219,745 219,148
---------- ----------
Total
Liabilities
and
Shareholders'
Equity $2,217,746 $2,084,292
========== ==========
Net Interest
Income/Spread $ 76,900 3.36% $ 73,780 3.25%
======== ==== ======== ====
Net Interest
Margin 3.69% 3.73%
==== ====
------------------------------------------
Loan Charge-Offs and Recoveries
First Indiana Corporation and Subsidiaries
(Dollars in Thousands)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2003 2002 2003 2002
-------- -------- -------- --------
Allowance for Loan Losses
at Beginning of Period $ 57,498 $ 38,349 $ 44,469 $ 37,135
Charge-Offs
Business 4,886 3,035 22,820 6,813
Consumer 1,473 1,546 5,737 6,323
Residential Mortgage 7 57 157 150
Single-Family
Construction 1,103 198 5,026 641
Commercial Real Estate 79 379 101 729
-------- -------- -------- --------
Total Charge-Offs 7,548 5,215 33,841 14,656
Recoveries
Business 474 126 1,155 293
Consumer 107 195 878 851
Residential Mortgage -- -- 7 3
Single-Family
Construction 10 19 254 72
Commercial Real Estate -- (10) 34 15
-------- -------- -------- --------
Total Recoveries 591 330 2,328 1,234
-------- -------- -------- --------
Net Charge-Offs 6,957 4,885 31,513 13,422
Provision for Loan Losses 3,098 11,005 38,974 20,756
Allowance Related to
Bank Acquired -- -- 1,709 --
Transfer to Reserve for
Letters of Credit (442) -- (442) --
-------- -------- -------- --------
Allowance for Loan Losses
at End of Period $ 53,197 $ 44,469 $ 53,197 $ 44,469
======== ======== ======== ========
Net Charge-Offs to Average
Loans (Annualized) 1.52% 1.05% 1.68% 0.74%
Allowance for Loan Losses
to Loans at End of Period 2.93 2.42
Allowance for Loan Losses
to Non-Performing Loans at
End of Period 151.55 103.21
------------------------------------------
Non-Performing Assets
First Indiana Corporation and Subsidiaries
(Dollars in Thousands)
(Unaudited)
Dec. 31, Sept. 30, Dec. 31,
2003 2003 2002
------- ------- -------
Non-Performing Loans
Non-Accrual Loans
Business $ 9,483 $13,659 $20,234
Consumer 7,402 7,654 9,405
Residential Mortgage 2,211 2,481 2,474
Single-Family Construction 7,165 9,296 4,286
Commercial Real Estate 4,743 5,150 2,059
------- ------- -------
Total Non-Accrual Loans 31,004 38,240 38,458
------- ------- -------
Accruing Loans Past Due
90 Days or More
Business 1,053 1,178 1,535
Consumer 2,691 1,847 3,093
Single-Family Construction 354 408 --
------- ------- -------
Total Accruing Loans Past Due
90 Days or More 4,098 3,433 4,628
------- ------- -------
Total Non-Performing Loans 35,102 41,673 43,086
Other Real Estate Owned, Net 3,780 3,877 8,670
------- ------- -------
Total Non-Performing Assets $38,882 $45,550 $51,756
======= ======= =======
Non-Performing Loans to Loans
at End of Period 1.93% 2.28% 2.34%
Non-Performing Assets to Loans
and OREO at End of Period 2.14 2.49 2.80