Exhibit 99.1
FOR IMMEDIATE RELEASE
JULY 16, 2004
FOR ADDITIONAL INFORMATION
CONTACT: RANDY J. SIZEMORE
SR VICE PRESIDENT, CFO
(260) 358-4680
NORTHEAST INDIANA BANCORP, INC.
ANNOUNCES SECOND QUARTER EARNINGS
HUNTINGTON, INDIANA, -- Northeast Indiana Bancorp, Inc. (NEIB), the parent
company of First Federal Savings Bank, today announced net income of $432,000
($0.30 per diluted common share) for the Company's second quarter ended June 30,
2004 compared to net income of $632,000 ($0.44 per diluted common share) for the
second quarter ended June 30, 2003. The decline is primarily due to
significantly less refinancing activity between quarters that produced net gains
on the sale of loans of $28,000 for the current quarter compared to $260,000 in
the year earlier quarter. Sequentially, the second quarter 2004 net income is
$29,000 or 7.2% higher than the first quarter ended March 31, 2004 net income of
$403,000. The current three month earnings represents an annualized return on
average assets (ROA) of 0.77% and a return on average equity (ROE) of 6.46%.
Net interest income increased to $1.6 million for the quarter ended June 30,
2004 when compared to $1.5 million for the quarter ended June 30, 2003. The
Company's net interest margin also improved 21 basis points to 2.99% for the
current quarter compared to 2.78% in the year earlier quarter. This was
primarily due to a decline in the cost of interest-bearing liabilities that was
greater than the decline in interest-earning asset yields and to a lesser
extent, higher average loan balances during the quarter ended June 30, 2004
compared to the quarter ended June 30, 2003.
A very positive development for the Company came in the form of a sharp decline
of $1.5 million in non-performing loans to $1.3 million at June 30, 2004
compared to $2.8 million at March 31, 2004. The decrease was due to a
significant commercial real estate loan being transferred to real estate owned
during the quarter ended June 30, 2004 and still being carried as such at
quarter end. Subsequent to the transfer of the property to real estate owned,
the Bank accepted a purchase agreement and earnest money from a qualified buyer.
The closing is expected to take place during July 2004. Based on the outcome of
this loan and no significant change in loans outstanding, the Company made no
provision for loan losses during the quarter ended June 30, 2004.
Noninterest income decreased by $307,000 to $331,000 during the quarter ended
June 30, 2004 when compared to $638,000 in the same period a year ago. This was
primarily due to a $232,000 decrease in net gains on the sale of loans quarter
to quarter as mentioned above. The Company also recorded a net loss on the sale
of repossessed assets for the quarter ended June 30, 2004 of $1,000 compared to
a net gain on the sale of repossessed assets for the quarter ended June 30, 2003
of $49,000. Trust and brokerage fees declined $40,000 between quarters due to
the conversion of trust assets to another financial institution during the third
quarter of 2003 under a revenue sharing agreement. Service charges on deposit
accounts increased $31,000 for the current quarter as a new retail overdraft
program was implemented by management during the quarter ended June 30, 2004.
Non-interest expense increased to $1.3 million for the quarter ended June 30,
2004 compared to $1.2 million for the quarter ended June 30, 2003. This increase
came primarily in salaries and employee benefits due to increased funding on a
defined benefit pension plan, increased ESOP expense due to the Company's
current share price, and less deferred loan origination fees due to
significantly lower mortgage volumes. Occupancy, data processing, professional
fees and other expenses saw decreases between quarters.
Net income for the six months ended June 30, 2004 decreased to $835,000 compared
to $1.1 million for the six months ended June 30, 2003. This decrease is mainly
due to a decline of $369,000 in net gain on the sale of loans between periods
due to significantly lower mortgage sales volumes and to a lesser extent, lower
deferred loan origination fees and increased benefit costs between periods.
These items were partially offset by an increase in net interest income of
$194,000 or 6.5% to $3.2 million for the six months ended June 30, 2004 compared
to $3.0 million for the six months ended June 30, 2003.
Total assets at June 30, 2004 of $225.1 million was relatively unchanged
compared to December 31, 2003 assets of $227.4 million. However, total deposits
increased $8.1 million or 6.6% to $130.1 million at June 30, 2004 from $122.0
million at December 31, 2003. The increases came primarily in MMDA, NOW,
savings, and non-interest bearing checking accounts as management continues to
focus on lower costing funding sources. These funds were used primarily to
replace other borrowed funds.
Shareholder's equity at June 30, 2004 was $26.5 million compared to $27.2
million at December 31, 2003. The company repurchased 30,186 shares of treasury
stock, at an average cost of $21.95, for a total cost of approximately $663,000
during the quarter ended June 30, 2004. 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 44,000 shares that may be repurchased under the current stock
repurchase program, which was previously announced.
The book value of NEIB's stock was $18.07 per common share as of June 30, 2004.
The number of outstanding common shares was 1,467,917 as of the same date. The
last reported trade of the stock on July 12, 2004 was $21.41 per common share.
This represents a 1.8% increase over the closing price of $21.04 per common
share on December 31, 2003.
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)
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CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
ASSETS June 30, December 31,
2004 2003
Interest-earning cash and cash equivalents $ 2,331,792 $ 6,849,198
Noninterest earning cash and cash equivalents 4,462,827 2,483,881
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Total cash and cash equivalents 6,794,619 9,333,079
Securities available for sale 41,174,716 43,687,318
Securities held to maturity estimated market value of $60,000 and $150,000 at June 30, 2004 and
December 31, 2003 60,000 150,000
Loans held for sale -- --
Loans receivable, net of allowance for loan loss June 30, 2004 $1,483,672 and December 31, 2003
$1,772,109 164,358,144 163,676,825
Accrued interest receivable 803,947 798,722
Premises and equipment 2,117,731 2,061,781
Investments in limited liability partnerships 1,486,533 1,602,147
Cash surrender value of life insurance 5,056,430 4,352,129
Other assets 3,247,321 1,732,531
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Total Assets $225,099,441 $227,394,532
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LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits 130,070,620 122,009,736
Borrowed Funds 66,802,588 76,545,485
Accrued interest payable and other liabilities 1,702,849 1,644,751
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Total Liabilities 198,576,057 200,199,972
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Retained earnings - substantially restricted 26,523,384 27,194,560
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Total Liabilities and Shareholder's Equity $225,099,441 $227,394,532
==============================
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CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
---- ---- ---- ----
Total interest income $ 2,994,605 $ 3,148,787 $ 6,004,104 $ 6,383,181
Total interest expense 1,406,257 1,673,717 2,840,648 3,413,766
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Net interest income $ 1,588,348 $ 1,475,070 $ 3,163,456 $ 2,969,415
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Provision for loan losses -- -- -- --
Net interest income after provision for loan losses $ 1,588,348 $ 1,475,070 $ 3,163,456 $ 2,969,415
Service charges on deposit accounts 124,493 93,585 208,865 178,121
Net gain on sale of securities -- -- 18,971 --
Net gain on sale of loans 27,659 259,546 56,208 425,120
Net gain (loss) on sale of repossessed assets (1,450) 48,508 4,241 62,862
Trust and brokerage fees 10,913 50,517 25,837 102,212
Other income 169,826 185,706 328,800 313,220
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Total noninterest income $ 331,441 $ 637,862 $ 642,922 $ 1,081,535
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Salaries and employee benefits 756,050 617,615 1,502,354 1,277,364
Occupancy 110,409 123,454 222,663 247,182
Data processing 158,181 167,243 322,266 336,324
Deposit insurance premiums 4,680 4,918 9,364 10,071
Professional fees 65,103 69,288 135,751 147,005
Correspondent bank charges 54,251 53,836 107,626 99,773
Other expense 183,481 186,981 388,071 398,072
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Total noninterest expenses $ 1,332,155 $ 1,223,335 $ 2,688,095 $ 2,515,791
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Income before income tax expenses $ 587,634 $ 889,597 $ 1,118,283 $ 1,535,159
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Income tax expenses 155,214 257,550 283,273 421,900
Net Income $ 432,420 $ 632,047 $ 835,010 $ 1,113,259
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Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
---- ---- ---- ----
Basic Earnings per common share 0.30 0.45 0.58 0.78
Dilutive Earnings per share 0.30 0.44 0.56 0.75
Net interest margin 2.99% 2.78% 3.00% 2.81%
Return on average assets 0.77% 1.13% 0.75% 1.00%
Return on average equity 6.46% 9.47% 6.19% 8.35%
Average shares outstanding- primary 1,436,264 1,414,449 1,440,721 1,423,186
Average shares outstanding- diluted 1,461,025 1,442,606 1,491,937 1,475,036
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Allowance for loan losses:
Balance at beginning of period $ 1,694,249 $ 1,796,511 $ 1,772,109 $ 2,135,630
Charge-offs:
One-to-four family 2,907 -- 2,907 25,954
Commercial real estate 208,218 -- 208,218 201,379
Commercial -- -- -- 100,488
Consumer 55,291 48,717 167,482 140,865
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Gross charge-offs 266,416 48,717 378,607 468,686
Recoveries:
One-to-four family -- -- -- --
Commercial real estate -- -- -- --
Commercial 10,000 83,000 10,000 96,000
Consumer 45,839 27,169 80,170 95,019
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Gross recoveries 55,839 110,169 90,170 191,019
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Net charge-offs (recoveries) 210,577 (61,452) 288,437 277,667
Additions charged to operations -- -- -- --
Balance at end of period $ 1,483,672 $ 1,857,963 $ 1,483,672 $ 1,857,963
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Net loan charge-offs (recoveries) to average loans (1) 0.49% (0.16)% 0.34% 0.35%
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Nonperforming assets (000's) At June 30, At March 31, At December 31,
Loans: 2004 2004 2003
---- ---- ----
Non-accrual $ 1,342 $ 2,805 $ 2,413
Past 90 days or more and still accruing -- -- --
Troubled debt restructured -- -- --
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Total nonperforming loans 1,342 2,805 2,413
Real estate owned 1,099 89 162
Other repossessed assets -- 17 3
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Total nonperforming assets $ 2,441 $ 2,911 $ 2,578
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Nonperforming assets to total assets 1.08% 1.31% 1.13%
Nonperforming loans to total loans 0.81% 1.68% 1.46%
Allowance for loan losses to nonperforming loans 110.58% 60.39% 73.44%
Allowance for loan losses to net loans receivable 0.89% 1.02% 1.07%
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At June 30,
2004 2003
---- ----
Stockholders' equity as a % of total assets 11.78% 12.17%
Book value per share $ 18.07 $ 18.28
Common shares outstanding- EOP 1,467,917 1,464,944
(1) Ratios for the three-month periods are annualized.