Exhibit 99.1
January 25, 2007
Dear Shareholder:
We are pleased to report the results of our first full year of operations and our first profitable quarter. We finished the year strong and believe we have established a good foundation on which to continue to grow during 2007.
At December 31, 2006, total gross loans outstanding were $63.0 million, increasing $8.1 million, or 15%, from September 30, 2006, and $37.0 million, or 142%, from December 31, 2005. Total deposits as of December 31, 2006 were $56.9 million, increasing $12.8 million, or 29%, from September 30, 2006, and $40.5 million, or 247%, from December 31, 2005. During the fourth quarter, we began using brokered deposits to support loan growth. At the end of the year, brokered deposits were $12.4 million. Prior to fourth quarter, deposit growth was achieved through strong deposit campaigns in our local market. We continue to focus on attracting local deposits in our highly competitive market.
For the quarter ended December 31, 2006, operations resulted in net income of $20,790, representing our first profitable quarter. We recognized $736,438 in net interest income for the quarter ended December 31, 2006 compared to $687,927 for the quarter ended September 30, 2006, an increase of $48,511, or 7%. Net interest income for the year ended December 31, 2006 was $2.5 million. We plan to continue our focus on the growth of deposits, loans, and our overall asset base, which will drive growth in net interest income and profitability in future quarters.
During the quarter ended December 31, 2006, we recorded provision for loan losses of $110,000 compared to $522,750 for the quarter ended September 30, 2006. As of December 31, 2006, it was determined that no additional reserve was needed for the loan relationship that became impaired during the third quarter. The specific reserve of $398,900 (pre-tax) that was recorded in third quarter related to this loan relationship is included in the total allowance for loan losses as of December 31, 2006. We are continuing to take action to mitigate the ultimate loss from this relationship.
Independence National Bank is a full service commercial bank, providing traditional loan and deposit services, as well as online banking, commercial cash management, remote deposit capture, and other essential services for our clients. We strive to maintain a personal focus and are dedicated to meeting the needs of our clients. We value your support as a shareholder. Please do not hesitate to contact us with any questions you may have.
Best Regards,
Lawrence R. Miller | Charles D. Walters |
President & CEO | Chairman of the Board |
Financial Highlights
(unaudited)
Balance Sheet |
| As of |
| |||||||
Data |
| 12/31/2006 |
| 09/30/2006 |
| 12/31/2005 |
| |||
|
|
|
|
|
|
|
| |||
Total assets |
| $ | 75,730,333 |
| $ | 67,788,237 |
| $ | 40,813,891 |
|
Loans, gross |
| 62,953,197 |
| 54,856,789 |
| 25,996,491 |
| |||
Allowance for loan losses |
| 1,198,153 |
| 1,093,750 |
| 338,000 |
| |||
Deposits |
| 56,906,716 |
| 44,057,888 |
| 16,416,346 |
| |||
Shareholders’ equity |
| 18,473,469 |
| 18,406,290 |
| 19,038,548 |
| |||
Income Statement |
| For the |
| For the |
| For the |
| |||
|
|
|
|
|
|
|
| |||
Net interest income |
| $ | 2,494,657 |
| $ | 736,438 |
| $ | 687,927 |
|
Provision for loan losses |
| 865,750 |
| 110,000 |
| 522,750 |
| |||
Non-interest income |
| 49,132 |
| 12,220 |
| 11,849 |
| |||
Non-interest expense |
| 2,541,527 |
| 613,948 |
| 614,515 |
| |||
Net (loss) income |
| (641,728 | ) | 20,790 |
| (324,319 | ) | |||
Net (loss) income per diluted share |
| $ | (0.31 | ) | $ | 0.01 |
| $ | (0.16 | ) |
Quarterly Net Interest Income ($$ in thousands)
Quarter End Gross Loans Outstanding ($$ in millions)
Quarter End Deposits Outstanding ($$ in millions)
Quarter End Total Assets ($$ in millions)
Certain statements in this document contain “forward-looking statements,” such as statements relating to future plans and expectations. Such forward-looking statements are subject to risks and uncertainties, such as a downturn in the economy, greater than expected non-interest expenses or excessive loan losses, which could cause actual results to differ materially from future plans and expectations expressed or implied by such forward-looking statements. For a more detailed description of factors that could cause such differences, please see our filings with the SEC.
STOCK TRANSFER AGENT
Registrar & Transfer Company
Investor Relations Department
10 Commerce Drive
Cranford, NJ 07016-3572
(800) 368-5948
Registrar & Transfer Company makes it possible for you to update shareholder information online. If you have had a change in address or other shareholder information, visit www.rtco.com, click on investor relations, and make your changes now!
FINANCIAL INFORMATION
Shareholders, analysts, and others seeking financial information should contact:
Ms. Kimberly D. Barrs
Chief Financial Officer
Independence Bancshares, Inc.
P. O. Box 1776
Greenville, SC 29602
500 E. Washington Street
Greenville, SC 29601
(864) 672-1776
24 Hour Account Access
(800) 657-7670
www.IndependenceNB.com
QUARTERLY REPORT TO SHAREHOLDERS
December 31, 2006