Exhibit 28.1
FOR IMMEDIATE RELEASE
OCTOBER 15, 2002
FOR ADDITIONAL INFORMATION
CONTACT: RANDY J. SIZEMORE
SR VICE PRESIDENT, CFO
(260) 358-4680
NORTHEAST INDIANA BANCORP, INC.
ANNOUNCES THIRD QUARTER EARNINGS
HUNTINGTON, INDIANA, -- Northeast Indiana Bancorp, Inc. (NEIB), the parent
company of First Federal Savings Bank, today announced net income of $430,000
($0.30 per diluted share) for the Company's third quarter ended September 30,
2002 compared to net income of $531,000 ($0.35 per diluted share) for the third
quarter ended September 30, 2001, a decrease in net income of $101,000 or 19.0%.
Sequentially however, the third quarter 2002 net income is $106,000 or 32.7%
higher than the net income reported for the second quarter ended June 30, 2002
of $324,000. The net interest margin showed a positive trend improving to 3.04%
for the current period as compared to 2.89% during the year earlier period. The
current three months earnings represents an annualized return on average assets
(ROA) of 0.77% and a return on average equity (ROE) of 6.48% as compared to an
ROA of 0.89% and an ROE of 7.84% for the three months ended September 30, 2001.
Stephen E. Zahn, President and Chief Executive Officer, attributes the decrease
in third quarter earnings for September 30, 2002 compared with September 30,
2001 to the following: increased loan loss provisions, increased net losses on
the sale of repossessed assets, and increases in other noninterest expenses
between the two periods. Provision for loan losses increased to $190,000 during
the third quarter of 2002 compared to $135,000 during the same quarter of 2001
as the company continued to monitor asset quality and overall market conditions
in general. NEIB's ratio of reserves to total loans was 1.32% at September 30,
2002, an increase from 1.04% at September 30, 2001. "We have continued to review
the credit quality of certain segments of the loan portfolio and to be proactive
in our collection efforts, which has led to both the increased provision and the
net losses on the sale of repossessed assets", according to Mr. Zahn.
Noninterest expenses increased $130,000 to $1.2 million for the period ended
September 30, 2002 as compared to $1.1 million for the period ended September
30, 2001. There was a one-time adjustment to employee benefits during the third
quarter of the prior year, which reduced noninterest expense in that quarter.
The remainder of the difference is due to increases in salaries, professional
fees and other operating expenses.
Net interest income was $4.8 million for the nine months ended September 30,
2002 compared to $5.0 million for the nine months ended September 30, 2001, a
4.3% decrease. Even though the net interest margin for the nine months ended
September 30, 2002 of 2.91% showed a slight improvement compared to the same
period in 2001 of 2.90%, the company had fewer interest-earning assets during
the current period. The company has had success in repricing a significant
portion of the deposit portfolio during the nine months ended September 30,
2002. However, the decline in loan balances
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outstanding combined with low yields currently available on alternative uses of
funds such as interest earning deposits in correspondent banks and security
investments has continued to provide pressure to the net interest margin in the
current year.
Net income for the first nine months of the current year was $1.1 million (or
$0.74 per diluted share) compared to the first nine months of 2001's net income
of $1.4 million (or $0.91 per diluted share) a dollar decrease of 23.0%. This
decrease in net income between periods is primarily related to the decline in
net interest income, increased provisions for loan losses, and other factors
discussed in more detail in the three-month comparison. ROE for the nine months
ended September 30, 2002 was 5.58% compared to 7.15% for the same period of
2001.
Total assets at September 30, 2002 of $223.0 million compared to December 31,
2001 assets of $238.4 million reflects a 6.5% decrease. This reduction in assets
is primarily related to both the selling of fixed rate residential mortgages
into the secondary market, due to the low interest rate environment, and
continued efforts to reposition the company's liabilities by allowing out of
area time deposits to leave as they mature.
Shareholder's equity at September 30, 2002 was unchanged at $26.3 million when
compared to December 31, 2001. The company repurchased 37,800 shares of treasury
stock, at an average cost of $15.45, for a total cost of approximately $584,000
during the quarter ended September 30, 2002. These repurchases help leverage
Northeast Indiana Bancorp's remaining equity and tend to improve return on
shareholder's equity. Northeast Indiana Bancorp has approximately 32,000 shares
that may be repurchased under the current stock repurchase program, which was
previously announced.
The book value of NEIB's stock was $17.42 per share as of September 30, 2002.
The number of outstanding shares was 1,511,943. The last reported trade of the
stock on October 11, 2002 was $13.50 per share. This represents an 8.0% increase
over the closing price of $12.50 on December 31, 2001.
Northeast Indiana Bancorp, Inc. is headquartered at 648 North Jefferson Street,
Huntington, Indiana. The company offers a full array of banking, trust, and
financial brokerage services to its customers through three full service
branches located in Huntington, Indiana. The company is traded on the Nasdaq
National Market under the symbol "NEIB".
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.
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NORTHEAST INDIANA BANCORP
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
ASSETS September 30, December 31,
------ ------------- ------------
2002 2001
---- ----
Interest-earning cash and cash equivalents $ 4,812,648 $ 23,541,599
Noninterest earning cash and cash equivalents 2,343,740 2,750,133
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Total cash and cash equivalents 7,156,388 26,291,732
Securities available for sale 47,545,885 39,365,026
Securities held to maturity estimated market value of $225,000 and $306,000 at September 30,
2002 and December 31, 2001 225,000 306,000
Loans held for sale 1,991,220 1,543,422
Loans receivable, net of allowance for loan loss September 30, 2002 $2,111,706 and December 31,
2001 $1,954,900 157,814,287 162,830,186
Accrued interest receivable 711,530 753,000
Premises and equipment 2,207,692 2,298,102
Investments in limited liability partnerships 1,910,745 1,546,177
Other assets 3,420,421 3,460,884
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Total Assets $222,983,168 $238,394,529
==============================
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits 123,382,330 137,030,011
Borrowed Funds 71,698,945 73,966,411
Accrued interest payable and other liabilities 1,566,910 1,117,069
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Total Liabilities 196,648,185 212,113,491
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Retained earnings - substantially restricted 26,334,983 26,281,038
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Total Liabilities and Shareholder's Equity $222,983,168 $238,394,529
==============================
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CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
---- ---- ---- ----
Total interest income $ 3,562,600 $ 4,293,912 $ 10,945,676 $ 13,369,346
Total interest expense 1,934,491 2,643,467 6,140,110 8,345,829
------------ ------------ ------------ ------------
Net interest income $ 1,628,109 $ 1,650,445 $ 4,805,566 $ 5,023,517
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Provision for loan losses 190,000 135,000 582,300 385,000
Net interest income after provision for
Loan losses $ 1,438,109 $ 1,515,445 $ 4,223,266 $ 4,638,517
------------ ------------ ------------ ------------
Service charges on deposit accounts 88,423 92,778 262,273 276,080
Net loss on sale of securities -- -- (10,535) --
Net gain on sale of loans 106,887 50,626 179,094 139,048
Net gain (loss) on sale of repossessed assets (37,782) 40,743 (100,070) 1,137
Trust and brokerage fees 56,149 35,659 172,415 111,650
Other income 116,094 134,639 377,022 412,427
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Total noninterest income $ 329,771 $ 354,445 $ 880,199 $ 940,342
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Salaries and employee benefits 619,222 569,130 1,826,573 1,732,875
Occupancy 115,585 114,118 346,899 346,232
Data processing 148,330 151,806 457,864 467,006
Deposit insurance premiums 5,738 6,970 18,209 20,416
Professional fees 57,500 42,526 195,889 186,256
Correspondent bank charges 59,398 56,764 166,899 169,420
Other expense 235,827 170,749 684,504 595,854
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Total noninterest expenses 1,241,600 1,112,063 3,696,837 3,518,059
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Income before income tax expenses $ 526,280 $ 757,827 $ 1,406,628 $ 2,060,800
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Income tax expenses 95,868 226,673 299,106 621,708
------------ ------------ ------------ ------------
Net Income $ 430,412 $ 531,154 $ 1,107,522 $ 1,439,092
============ ============ ============ ============
NORTHEAST INDIANA BANCORP
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
===================================================================================================================================
SELECTED FINANCIAL DATA
Three Months Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
---- ---- ---- ----
Basic Earnings per share 0.30 0.35 0.76 0.92
Dilutive Earnings per share 0.30 0.35 0.74 0.91
Net interest margin 3.04% 2.89% 2.91% 2.90%
Return on average assets 0.77% 0.89% 0.64% 0.79%
Return on average equity 6.48% 7.84% 5.58% 7.15%
Average shares outstanding- primary 1,438,787 1,521,506 1,452,981 1,556,299
Average shares outstanding- diluted 1,454,882 1,537,059 1,494,661 1,589,940
At September 30,
2002 2001
---- ----
Total non- performing assets as a % of total assets 3.08% 2,86%
Stockholders' equity as a % of total assets 11.81% 11.04%
Book value per share 17.42 16.73
Common shares outstanding- EOP 1,511,943 1,595,036