Exhibit 99.1
FOR IMMEDIATE RELEASE
January 21, 2004
FOR ADDITIONAL INFORMATION
CONTACT: RANDY J. SIZEMORE
SR VICE PRESIDENT, CFO
(260) 358-4680
NORTHEAST INDIANA BANCORP, INC.
ANNOUNCES YEAR END 2003 AND FOURTH QUARTER EARNINGS
HUNTINGTON, INDIANA, -- Northeast Indiana Bancorp, Inc. (NEIB), the parent
company of First Federal Savings Bank, today announced earnings for the year
ended December 31, 2003 of $1.9 million ($1.31 per diluted common share)
compared to net income of $1.6 million ($1.06 per diluted common share) for the
year ended December 31, 2002, an increase in net income of $340,000 or 21.4%.
The 2003 year end earnings represents an annualized return on average assets
(ROA) of 0.87% and a return on average equity (ROE) of 7.22% as compared to an
ROA of 0.69% and an ROE of 6.01% in the year earlier period.
Net interest income declined to $5.8 million for the year ended December 31,
2003 when compared to $6.3 million for the year ended December 31, 2002. This
decrease was primarily related to the loss of asset yields on loans and
mortgage-related securities from the high level of mortgage refinancing that
occurred during the second and third quarter of 2003 along with lower average
interest earning assets in 2003 compared to 2002. The Company's net interest
margin declined to 2.78% for the twelve months ended December 31, 2003 versus
2.87% for the twelve months ended December 31, 2002.
Northeast Indiana Bancorp, Inc. saw significant improvements in non-performing
asset trends in each of the four quarters of 2003. The Company's non-performing
assets were $2.6 million or 1.1% of total assets at December 31, 2003, a steep
decline from the $6.7 million or 3.0% of total assets reported at December 31,
2002. Management was able to reduce non-performing assets by $4.1 million or
61.2% during the year ended December 31, 2003 through increased collection
efforts implemented in the latter part of 2002 and maintained during 2003. In
addition, net charge-offs declined to $364,000 for the twelve months ended
December 31, 2003 versus $552,000 during the same period of 2002. These trends
enabled The Company to make no provisions for loan losses during the current
year compared to $732,000 during the prior year.
Noninterest income increased $276,000 or 18.8% to $1.7 million for the year
ended December 31, 2003 compared to $1.5 million for the year ended December 31,
2002. Increases were recorded in every component of noninterest income with the
exception of trust and brokerage fees. The Company recorded a record year in net
gain on the sale of loans at $510,000 for 2003, eclipsing the prior record of
$475,000 recorded just a year earlier in 2002. Other income also rose sharply
due to increased loan processing fees, late charges collected, and increases in
cash surrender values on Bank Owned Life Insurance for 2003 over 2002.
Non-interest expenses were unchanged at $4.97 million for both twelve months
ended December 31, 2003 and 2002 due to diligent cost containment efforts
implemented by management.
-MORE-
Net income declined to $422,000 for the three months ended December 31, 2003
from $482,000 for the three months ended December 31, 2002. Sequentially, the
fourth quarter 2003 earnings of $422,000 exceeded earnings of $395,000 for the
quarter ended September 30, 2003. The primary reason for the decline in earnings
is a sharp decline in net gain on the sale of loans to $33,000 for the quarter
ended December 31, 2003 from $296,000 for the quarter ended December 31, 2002 as
refinance volumes were considerably less between the two periods. This loss of
income was partially offset by no provisions for loan losses in the current
quarter compared to $150,000 in provisions for loan loss in the prior year
quarter, and a decline of $45,000 in noninterest expenses quarter to quarter.
Total assets at December 31, 2003 of $227.4 million compared to December 31,
2002 assets of $225.0 million reflects a 1.1% increase. Net loans receivable
increased $9.1 million or 5.9% to $163.7 million at December 31, 2003 from
$154.6 million at December 31, 2002. Most of this increase came in the second
six months of 2003 as loan demand remained good, while mortgage prepayment
speeds declined from prior quarters. Deposits declined to $122.0 million at
December 31, 2003 from $122.4 million at December 31, 2002. Despite the slight
decline in total deposits, funding cost efficiencies were achieved as $3.2
million in higher-cost time deposits were replaced by an increase of $2.8
million in lower-cost Savings, MMDA, NOW, and Non-interest bearing checking
accounts.
Shareholder's equity at December 31, 2003 was $27.2 million compared to the
$26.6 million reported at December 31, 2002. The company repurchased 54,328
shares of treasury stock, at an average cost of $16.63, for a total cost of
approximately $903,000 during the year ended December 31, 2003. In the opinion
of management, these repurchases help leverage Northeast Indiana Bancorp's
remaining equity and tend to improve return on shareholder's equity. Northeast
Indiana Bancorp has approximately 49,000 shares that may be repurchased under
the current stock repurchase program, which was previously announced.
The book value of NEIB's stock was $18.28 per common share as of December 31,
2003. The number of outstanding common shares was 1,487,514. The last reported
trade of the stock on December 31, 2003 was $21.04 per common share. This
represents a 33.2% increase over the closing price of $15.80 on December 31,
2002.
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
Stock 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.
-MORE-
NORTHEAST INDIANA BANCORP
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
- ------------------------------------------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
ASSETS December 31, December 31,
------------ ------------
2003 2002
---- ----
Interest-earning cash and cash equivalents $ 6,849,198 $ 15,195,326
Noninterest earning cash and cash equivalents 2,483,881 3,061,082
-------------- -------------
Total cash and cash equivalents 9,333,079 18,256,408
Securities available for sale 43,687,318 42,838,211
Securities held to maturity estimated market value
of $150,000 and $225,000 at December 31, 2003 and December 31, 2002 150,000 225,000
Loans held for sale - 409,375
Loans receivable, net of allowance for loan loss
December 31, 2003 $1,772,109 and December 31, 2002 $2,135,630 163,676,825 154,559,565
Accrued interest receivable 798,722 694,593
Premises and equipment 2,061,781 2,176,356
Investments in limited liability partnerships 1,602,147 1,833,375
Cash surrender value of life insurance 4,352,129 2,082,890
Other assets 1,732,531 1,943,142
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Total Assets $ 227,394,532 $ 225,018,915
============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits 122,009,736 122,356,652
Borrowed Funds 76,545,485 74,893,922
Accrued interest payable and other liabilities 1,644,751 1,205,856
-------------- -------------
Total Liabilities 200,199,972 198,456,430
-------------- -------------
Retained earnings - substantially restricted 27,194,560 26,562,485
-------------- -------------
Total Liabilities and Shareholder's Equity $ 227,394,532 $ 225,018,915
============== =============
==================================================================================================================
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Twelve Months Ended
December 31, December 31,
2003 2002 2003 2002
---- ---- ---- ----
Total interest income $ 2,987,812 $ 3,351,593 $ 12,368,715 $ 14,297,273
Total interest expense 1,505,554 1,857,370 6,519,296 7,997,483
------------- ------------- ------------- -------------
Net interest income $ 1,482,258 $ 1,494,223 $ 5,849,419 6,299,790
- -----------------------------------------------------------------------------------------------------------------
Provision for loan losses - 150,000 - 732,300
Net interest income after provision for
Loan losses $ 1,482,258 $ 1,344,223 $ 5,849,419 5,567,490
------------- ------------- ------------- -------------
Service charges on deposit accounts 87,602 92,266 360,389 354,539
Net gain (loss) on sale of securities 6,030 - 18,427 (10,535)
Net gain on sale of loans 33,154 295,959 510,369 475,053
Net gain (loss) on sale of repossessed assets (8,923) (15,862) 48,110 (115,931)
Trust and brokerage fees 16,905 46,941 151,107 219,356
Other income 170,017 164,287 650,975 541,309
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Total noninterest income $ 304,785 $ 583,591 $ 1,739,377 $ 1,463,791
- -----------------------------------------------------------------------------------------------------------------
Salaries and employee benefits * 676,541 649,816 2,607,819 2,600,923
Occupancy 105,283 119,456 463,926 466,357
Data processing 155,609 163,659 667,745 621,523
Deposit insurance premiums 4,661 5,362 19,733 23,570
Professional fees 51,025 44,800 248,978 240,688
Correspondent bank charges 54,959 57,836 210,273 224,734
Other expense * 180,606 232,896 750,880 792,869
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Total noninterest expenses 1,228,684 1,273,825 4,969,354 4,970,664
- -----------------------------------------------------------------------------------------------------------------
Income before income tax expenses $ 558,359 $ 653,989 $ 2,619,442 2,060,617
- -----------------------------------------------------------------------------------------------------------------
Income tax expenses 136,840 171,615 689,468 470,721
------------- ------------- ------------- -------------
Net Income $ 421,519 $ 482,374 $ 1,929,974 1,589,896
============= ============= ============= =============
* - Certain prior year line items were reclassified to conform with current year
presentations.
NORTHEAST INDIANA BANCORP
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
SELECTED FINANCIAL DATA
Three Months Ended Twelve Months Ended
December 31, December 31,
2003 2002 2003 2002
---- ---- ---- ----
Basic Earnings per share 0.30 0.34 1.36 1.09
Dilutive Earnings per share 0.29 0.34 1.31 1.06
Net interest margin 2.81% 2.74% 2.78% 2.87%
Return on average assets 0.75% 0.84% 0.87% 0.69%
Return on average equity 6.24% 7.30% 7.22% 6.01%
Average shares outstanding- primary 1,420,728 1,426,694 1,419,417 1,455,470
Average shares outstanding- diluted 1,435,438 1,439,040 1,477,455 1,497,014
- ------------------------------------------------------------------------------------------------------------
Allowance for loan losses:
Balance at beginning of period $ 1,856,347 $ 2,111,707 $ 2,135,630 $ 1,954,900
Charge-offs:
One-to-four family - - 25,954 -
Commercial real estate - 48,206 235,722 109,606
Commercial 59,611 - 160,099 -
Consumer 54,946 183,421 226,134 727,308
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Gross charge-offs 114,557 231,627 647,909 836,914
Recoveries:
One-to-four family - - - -
Commercial real estate - - - -
Commercial - 71,435 96,000 81,928
Consumer 30,319 34,115 188,388 203,416
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Gross recoveries 30,319 105,550 284,388 285,344
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Net charge-offs 84,238 126,077 363,521 551,570
Additions charged to operations - 150,000 - 732,300
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Balance at end of period $ 1,772,109 $ 2,135,630 $ 1,772,109 $ 2,135,630
=========================================================
Net loan charge-offs to average loans (1) .20% .31% .23% .33%
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Nonperforming assets (000's) At At At At
December 31, September 30, June 30, December 31,
Loans: 2003 2003 2003 2002
---- ---- ---- ----
Non-accrual $ 2,413 $ 3,231 $ 3,845 $ 6,218
Past 90 days or more and still accruing - - - -
Troubled debt restructured - - - -
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Total nonperforming loans 2,413 3,231 3,845 6,218
Real estate owned 162 218 370 516
Other repossessed assets 3 11 14 12
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Total nonperforming assets $ 2,579 $ 3,460 $ 4,229 $ 6,746
=========================================================
Nonperforming assets to total assets 1.13% 1.56% 1.92% 3.00%
Nonperforming loans to total loans 1.46% 2.07% 2.53% 3.97%
Allowance for loan losses to nonperforming loans 73.44% 57.44% 48.30% 34.35%
Allowance for loan losses to total loans 1.07% 1.19% 1.22% 1.36%
- ------------------------------------------------------------------------------------------------------------
At December 31,
2003 2002
---- ----
Stockholders' equity as a % of total assets 11.96% 11.80%
Book value per share $ 18.28 $ 17.74
Common shares outstanding- EOP 1,487,514 1,497,058
(1) Ratios for the three-month periods are
annualized.