COLUMBUS, Ind., Jan. 25, 2012 (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 fourth quarter of $1.8 million or $0.46 diluted income per common share compared to net income of $1.5 million or $0.36 diluted earnings per common share for the same period last year. Year to date net loss was $1.7 million or $(0.87) diluted loss per common share compared to net income of $5.6 million or $1.32 diluted earnings per common share a year earlier. The net loss for the year was due primarily to a $14.1 million provision for loan losses in the third quarter which resulted from net charge offs during the third quarter which totaled $13.3 million. The substantial reduction in net charge offs and provision for loan losses in the fourth quarter compared to the third quarter allowed the Company to return to profitability for the fourth quarter. Net charge offs totaled $959,000 for the fourth quarter and provision expense for the quarter was $1.2 million. Total portfolio loans decreased $0.7 million for the quarter and $40.3 million year to date while total retail deposits increased $22.2 million for the quarter and $15.2 million year to date.
Balance Sheet
Total assets were $984.6 million as of December 31, 2011, a decrease of $58.7 million from December 31, 2010. During the third quarter, the Bank prepaid the remaining Federal Home Loan Bank advances which totaled $55 million including the prepayment penalty. The majority of the funding for the prepayment of advances came from the sale of securities. As a result, total securities decreased $45.7 million year to date. Total loans decreased $0.7 million for the quarter and $40.3 million year to date. Commercial and commercial mortgage loans increased $1.1 million for the quarter and decreased $32.7 million year to date. Commercial lending activity has been slow during 2011 driven primarily by limited new business expansion combined with intense competition for high quality C&I relationships. While commercial lending balances increased slightly in the fourth quarter, commercial loan growth is expected to be a challenge in future periods. Residential mortgage loans and consumer loans were basically unchanged for the quarter and decreased $7.6 million year to date. Demand for home equity and second mortgage loans remains soft within the Bank's market footprint.
Total retail deposits increased $22.2 million for the quarter and $15.2 million year to date. The increase in retail deposits for the quarter was primarily due to an increase in public fund transaction deposits of $29.9 million partially offset by a decrease in certificates of deposit of $15.3 million for the quarter. Certificates of deposits have decreased $51.2 million year to date. The continued low interest rate environment has resulted in rates on certificates of deposit that are not attractive to consumers. Additionally, the Bank has implemented a strategy geared toward expanding relationships with customers that only maintain certificates of deposit at the Bank or allowing those customers to pursue higher interest rates elsewhere. The decrease in certificates of deposit for the year has been offset by an increase in demand and interest bearing transaction accounts which have increased $66.4 million for the year. The Bank continues to focus marketing and sales activities on transaction accounts aimed at attracting new customers and expanding relationships with existing customers. As a result, public entity transaction deposits have increased $11.1 million for the year while commercial and retail transaction deposits increased $55.3 million for the year.
Asset Quality
Provision for loan losses totaled $1.2 million for the quarter and $19.5 million year to date. Net charge offs were $959,000 for the quarter and $19.1 million year to date. The allowance for loan losses increased $378,000 for the year to $15.0 million at December 31, 2011. The ratio of the allowance for loan losses to total loans was 2.12% at December 31, 2011 compared to 1.95% at December 31, 2010. The Company's nonperforming assets decreased $4.5 million for the fourth quarter and increased $8.4 million year to date to $42.9 million at December 31, 2011. The ratio of nonperforming assets to total assets was 4.35% at December 31, 2011 compared to 4.91% at September 30, 2011.
Net Interest Income
Net interest income decreased $446,000 or 5.2% for the quarter and increased $1.2 million or 3.6% year to date. Net interest margin was 3.70% for the quarter and 3.58% year to date. Net interest margin improved 18 basis points in the fourth quarter when compared to the third quarter as a result of the balance sheet restructuring which occurred during the third quarter. Despite the improvement in net interest margin for the quarter, net interest income decreased due to the decrease in interest earning assets.
Non Interest Income
Excluding net gains on sale of securities and other than temporary impairment losses from each period, non interest income decreased $176,000 for the quarter and $380,000 year to date. Service fees on deposits decreased $17,000 or 1.1% for the quarter and $333,000 or 5.2% year to date due primarily to a decrease in overdraft fees. While not a core activity, the Bank has taken advantage of interest rate volatility in the securities market to reposition a portion of the securities portfolio and to provide funds to prepay Federal Home Loan Bank advances throughout the year. Gain on sale of securities net of other than temporary impairment losses totaled $2.3 million year to date. Gain on sale of loans decreased $34,000 for the quarter and $132,000 year to date. Miscellaneous income included a net loss on the writedown of other real estate of $458,000 year to date due primarily to the write down of a large other real estate owned property based on negotiations related to the sale of the property.
Non Interest Expenses
Excluding the Federal Home Loan Bank advances prepayment expense in the third quarter of $1.4 million, non interest expenses decreased $343,000 or 4.5% for the quarter and increased $860,000 or 3.0% year to date. Compensation and employee benefits expense decreased $188,000 or 4.8% for the quarter and increased $995,000 or 6.8% year to date. During the second quarter of 2010, the Company restructured certain senior management incentive plans which resulted in a reversal of $327,000 of previously accrued expense. The remaining increase for the year was due primarily to costs associated with additional personnel added to the commercial and investment advisory departments during 2010, increased medical benefit and pension costs and increased costs related to restricted stock grants to key management personnel. FDIC insurance expense decreased $194,000 for the quarter and $536,000 year to date due to a change in the method used to calculate the Company's quarterly contribution. Marketing expense increased $207,000 year to date as the Company has increased the marketing budget to support growth opportunities for core deposits within its market footprint.
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) | ||
| December 31, | December 31, | |
| 2011 | 2010 | |
| Assets: | ||
| Cash and due from banks | $20,683 | $12,927 |
| Interest bearing demand deposits | 278 | 136 |
| Federal funds sold | 19,634 | -- |
| Cash and cash equivalents | 40,595 | 13,063 |
| Securities available for sale at fair value (amortized cost $178,300 and $227,331) | 180,770 | 226,465 |
| Loans held for sale (fair value $6,617 and $7,827) | 6,464 | 7,666 |
| Portfolio loans: | ||
| Commercial and commercial mortgage loans | 517,970 | 550,686 |
| Residential mortgage loans | 93,757 | 92,796 |
| Second and home equity loans | 86,059 | 92,557 |
| Other consumer loans | 9,533 | 11,614 |
| Total portfolio loans | 707,319 | 747,653 |
| Unearned income | ( 233) | (252) |
| Allowance for loan losses | (14,984) | (14,606) |
| Portfolio loans, net | 692,102 | 732,795 |
| Premises and equipment | 16,617 | 16,228 |
| Accrued interest receivable | 3,085 | 3,785 |
| Other assets | 44,974 | 43,316 |
| TOTAL ASSETS | $984,607 | $1,043,318 |
| Liabilities and Shareholders' Equity: | ||
| Liabilities: | ||
| Deposits: | ||
| Demand | $103,864 | $86,425 |
| Interest checking | 222,314 | 177,613 |
| Savings | 52,181 | 45,764 |
| Money market | 222,229 | 224,382 |
| Certificates of deposits | 262,653 | 313,854 |
| Retail deposits | 863,241 | 848,038 |
| Public fund certificates | 102 | 5,305 |
| Wholesale deposits | 102 | 5,305 |
| Total deposits | 863,343 | 853,343 |
| FHLB advances | -- | 53,284 |
| Short term borrowings | -- | 12,088 |
| Junior subordinated debt | 15,464 | 15,464 |
| Other liabilities | 17,666 | 20,490 |
| Total liabilities | 896,473 | 954,669 |
| 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 | 21,265 | 21,156 |
| No par common stock; Authorized: 15,000,000 shares | ||
| Issued and outstanding: 3,422,379 and 3,385,079 | 21,735 | 21,230 |
| Retained earnings, restricted | 44,127 | 47,192 |
| Accumulated other comprehensive income/(loss), net | 1,007 | (929) |
| Total shareholders' equity | 88,134 | 88,649 |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $984,607 | $1,043,318 |
| INDIANA COMMUNITY BANCORP | ||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||
| (in thousands, except share and per share data) | ||||
| (unaudited) | ||||
| Three Months Ended | Twelve Months Ended | |||
| December 31, | December 31, | |||
| 2011 | 2010 | 2011 | 2010 | |
| Interest Income: | ||||
| Securities and interest bearing deposits | 1,034 | 1,435 | 4,993 | 5,425 |
| Commercial and commercial mortgage loans | 6,726 | 7,624 | 28,559 | 30,154 |
| Residential mortgage loans | 1,037 | 1,120 | 4,148 | 4,625 |
| Second and home equity loans | 984 | 1,131 | 4,130 | 4,581 |
| Other consumer loans | 189 | 242 | 819 | 1,079 |
| Total interest income | 9,970 | 11,570 | 42,649 | 45,864 |
| Interest Expense: | ||||
| Checking and savings accounts | 288 | 453 | 1,434 | 1,908 |
| Money market accounts | 288 | 357 | 1,327 | 1,686 |
| Certificates of deposit | 1,150 | 1,805 | 5,476 | 8,625 |
| Total interest on retail deposits | 1,726 | 2,615 | 8,237 | 12,219 |
| Public funds | -- | 4 | 12 | 10 |
| Total interest on wholesale deposits | -- | 4 | 12 | 10 |
| Total interest on deposits | 1,726 | 2,619 | 8,249 | 12,229 |
| FHLB advances | -- | 266 | 692 | 1,089 |
| Other borrowings | 1 | 1 | 9 | 1 |
| Junior subordinated debt | 81 | 76 | 308 | 311 |
| Total interest expense | 1,808 | 2,962 | 9,258 | 13,630 |
| Net interest income | 8,162 | 8,608 | 33,391 | 32,234 |
| Provision for loan losses | 1,182 | 1,950 | 19,509 | 7,179 |
| Net interest income after provision for loan losses | 6,980 | 6,658 | 13,882 | 25,055 |
| Non Interest Income: | ||||
| Gain on sale of loans | 727 | 761 | 1,975 | 2,107 |
| Gain on securities | 1 | 271 | 2,396 | 768 |
| Other than temporary impairment losses | -- | (21) | (104) | (215) |
| Service fees on deposit accounts | 1,552 | 1,569 | 6,056 | 6,389 |
| Loan servicing income, net of impairment | 135 | 111 | 492 | 473 |
| Miscellaneous | 682 | 831 | 2,175 | 2,109 |
| Total non interest income | 3,097 | 3,522 | 12,990 | 11,631 |
| Non Interest Expenses: | ||||
| Compensation and employee benefits | 3,763 | 3,951 | 15,733 | 14,738 |
| Occupancy and equipment | 959 | 1,046 | 3,897 | 3,918 |
| Service bureau expense | 516 | 493 | 2,006 | 1,954 |
| FDIC insurance expense | 329 | 523 | 1,535 | 2,071 |
| Marketing | 218 | 243 | 1,011 | 804 |
| FHLB advances prepayment fee | -- | -- | 1,353 | -- |
| Miscellaneous | 1,528 | 1,400 | 5,576 | 5,413 |
| Total non interest expenses | 7,313 | 7,656 | 31,111 | 28,898 |
| Income/(loss) before income taxes | 2,764 | 2,524 | (4,239) | 7,788 |
| Income tax provision/(credit) | 926 | 1,004 | (2,495) | 2,146 |
| Net Income/(loss) | $1,838 | $1,520 | $(1,744) | $5,642 |
| Basic earnings/(loss) per common share | $0.46 | $0.36 | $(0.87) | $1.32 |
| Diluted earnings/(loss) per common share | $0.46 | $0.36 | $(0.87) | $1.32 |
| Basic weighted average number of common shares | 3,367,470 | 3,358,079 | 3,364,934 | 3,358,079 |
| Dilutive weighted average number of common shares | 3,369,244 | 3,360,212 | 3,364,934 | 3,358,728 |
| Dividends per common share | $0.010 | $0.010 | $0.040 | $0.040 |
| Supplemental Data: | ||||
| (unaudited) | Three Months Ended | Year to Date | ||
| December 31, | December 31, | |||
| 2011 | 2010 | 2011 | 2010 | |
| Weighted average interest rate earned | ||||
| on total interest-earning assets | 4.51% | 4.60% | 4.57% | 4.74% |
| Weighted average cost of total | ||||
| interest-bearing liabilities | 0.83% | 1.21% | 1.02% | 1.44% |
| Interest rate spread during period | 3.69% | 3.39% | 3.56% | 3.30% |
| Net interest margin | ||||
| (net interest income divided by average | ||||
| interest-earning assets on annualized basis) | 3.70% | 3.42% | 3.58% | 3.33% |
| Total interest income divided by average | ||||
| Total assets (on annualized basis) | 4.08% | 4.30% | 4.19% | 4.37% |
| Total interest expense divided by | ||||
| average total assets (on annualized basis) | 0.74% | 1.10% | 0.91% | 1.30% |
| Net interest income divided by average | ||||
| total assets (on annualized basis) | 3.34% | 3.20% | 3.28% | 3.07% |
| Return on assets (net income/(loss) divided by | ||||
| average total assets on annualized basis) | 0.75% | 0.56% | -0.17% | 0.54% |
| Return on equity (net income/(loss) divided by | ||||
| average total equity on annualized basis) | 8.35% | 6.69% | -1.94% | 6.45% |
| December 31, | December 31, | |||
| 2011 | 2010 | |||
| Book value per share outstanding | $ 19.54 | $ 19.94 | ||
| Nonperforming Assets: | ||||
| Loans: Non-accrual | $ 33,971 | $ 20,278 | ||
| Past due 90 days or more | 87 | 92 | ||
| Restructured | 3,082 | 9,684 | ||
| Total nonperforming loans | 37,140 | 30,054 | ||
| Real estate owned, net | 5,734 | 4,379 | ||
| Other repossessed assets, net | 2 | 10 | ||
| Total Nonperforming Assets | 42,876 | $ 34,443 | ||
| Nonperforming assets divided by total assets | 4.35% | 3.30% | ||
| Nonperforming loans divided by total loans | 5.25% | 4.02% | ||
| Balance in Allowance for Loan Losses | $ 14,984 | $ 14,606 | ||
| Allowance for loan losses to total loans | 2.12% | 1.95% | ||