COLUMBUS, Ind., Jan. 26 /PRNewswire-FirstCall/ -- Indiana Community
Bancorp (the "Company") (NASDAQ:INCB), the holding company of
Indiana Bank and Trust Company of Columbus, Indiana (the "Bank"),
today announced a net loss for 2009 of $5.8 million or $(2.09)
diluted loss per common share compared to net income of $5.0
million or $1.47 diluted earnings per common share for 2008. During
the fourth quarter of 2009, the Company had a net loss of $1.4
million or $(0.50) diluted loss per common share compared to net
income of $1.5 million or $0.43 diluted earnings per common share
during the fourth quarter of 2008. The fourth quarter was
negatively impacted by prepayment fees on FHLB advances which
totaled $3.8 million. This expense was partially offset by security
gains of approximately $2.0 million. Management estimates that as a
result of the FHLB advance prepayment, the Company's net interest
income will improve by approximately $2.0 million annually
beginning in 2010 as compared to the annualized results from the
fourth quarter of 2009. This projected increase in net interest
income is expected to result in a net interest margin of
approximately 3.25% which would represent an increase of 38 basis
points over the net interest margin in the fourth quarter of 2009.
Excluding the impact of the FHLB advance prepayment and the
securities sale gains, the Company's net loss would have been
reduced to approximately $364,000 or $(0.20) diluted loss per
common share for the fourth quarter. The major factor which
negatively impacted the results for 2009 was the significant
increase in the provision for loan losses. The Company increased
the balance in the allowance for loan losses throughout 2009 due to
the challenging economic cycle. Net charge offs for 2009 totaled
$11.7 million compared to $2.7 million in 2008 and the provision
expense for 2009 totaled $16.2 million compared to $4.3 million in
2008. The provision for loan losses totaled $3.4 million for the
fourth quarter which exceeded net charge offs for the quarter by
$943,000. Retail deposit growth remained strong for 2009 as retail
deposits increased $15.7 million for the fourth quarter and $145.3
million for the year. As of December 31, 2009, shareholders' equity
was $84.9 million and the Company's tangible common equity to
assets ratio was 6.32%. Chairman and CEO John Keach, Jr. stated,
"The banking industry faced numerous challenges during 2009. In
addition to meeting those challenges head on, we focused on
implementing changes with an eye toward a brighter future. Our
efforts to reduce our core operating costs and to improve our net
interest margin should translate to improvements in our bottom
line." Executive Vice President and CFO Mark Gorski added,
"Capitalizing on market disruption to grow our core deposit base
has allowed us to significantly reduce our overall funding cost
which will generate increased net interest income in future
periods." Balance Sheet Total assets were $1.0 billion as of
December 31, 2009, an increase of $41.0 million from December 31,
2008. Total loans decreased $22.6 million for the quarter and $63.0
million year-to-date. Commercial and commercial mortgage loans
decreased $16.7 million for the quarter and $28.2 million
year-to-date. The commercial loan portfolio has continued to
decline due to the challenging credit market which has contributed
to the decrease in new commercial loan originations. Also
contributing to the decrease in commercial loans during the quarter
was the transfer of $9.6 million from loans to other real estate
owned during the fourth quarter. Residential mortgage and consumer
loans decreased $5.9 million for the quarter and $34.9 million
year-to-date. Mortgage loan originations remain substantially
higher than the prior year due to significant refinance activity
resulting from low interest rates; however, the majority of the
refinance activity occurred in the first half of 2009. As
substantially all new mortgage loans are being sold in the
secondary market, residential mortgage balances continue to
decline. Decreases in the mortgage loan portfolio account for $2.9
million of the decrease in consumer loans for the quarter and $22.7
million of the decrease year-to-date. Total retail deposits
increased $15.7 million for the quarter and $145.3 million or 20.9%
year-to-date. This substantial growth in retail deposits during
2009 occurred in all categories as demand deposits increased $9.2
million, interest bearing transaction accounts increased $111.5
million and certificates of deposit increased $24.6 million. The
Bank has seen deposit growth from individual accounts, business
accounts and public entity accounts across the entire market
footprint. Management believes that deposit growth reflects
customer preference for insured bank deposits which provide safety
of principal balance plus interest. Additionally, management
believes that the high level of deposit growth during the year was
due in part to the banking market disruption that occurred in the
Company's southeast Indiana footprint. Total wholesale funding
decreased $55.5 million for the quarter and $95.3 million
year-to-date. During the fourth quarter, the Company prepaid $55.3
million of FHLB advances with a weighted average rate of 4.5% to
reduce interest expense and improve net interest margin in future
periods as yields on investment alternatives were in most cases
substantially less than the rates being paid for the advances.
Asset Quality Provision for loan losses totaled $3.4 million for
the quarter and $16.2 million year-to-date which represented
significant increases over the comparable periods in 2008. The
provision expense for the year has covered net charge offs and
significantly increased the allowance for loan losses. Net charge
offs were $2.5 million for the fourth quarter and included $2.2
million of commercial loan charge offs and $273,000 of consumer
loan charge offs. Year-to-date net charge offs totaled $11.7
million and included $9.9 million of commercial loan charge offs
and $1.8 million of consumer loan charge offs. Total non-performing
assets increased $1.5 million for the fourth quarter and $6.7
million year-to-date to $34.4 million at December 31, 2009.
Non-performing assets to total assets increased to 3.41% at
December 31, 2009 compared to 2.86% at December 31, 2008. The ratio
of the allowance for loan losses to total loans increased to 1.78%
at December 31, 2009 compared to 1.07% at December 31, 2008. Net
Interest Income Net interest income decreased $145,000 or 2.0% to
$7.1 million for the fourth quarter and year-to-date net interest
income decreased $1.3 million or 4.4% to $27.5 million. Net
interest margin for the fourth quarter was 2.87% which was
consistent with the previous two quarters. Year-to-date net
interest margin was 2.93% for 2009 compared to 3.35% for 2008. The
decrease in net interest margin for the year was primarily the
result of an unusually high balance in interest earning demand
deposits and an increase in non-accrual loans. Due to continued
increases in deposits and reduced loan demand, the excess liquidity
was invested in short term securities throughout the year. During
the fourth quarter, the Company prepaid $55.3 million of FHLB
advances with a weighted average rate of 4.5%. This transaction
should significantly reduce the Company's interest expense in
future periods which will translate to expected improvement in net
interest income. Additionally, during January 2010, the Company
restructured the remaining balance of FHLB advances thereby
reducing the interest expense on the remaining portfolio of $55
million from 3.0% to approximately 1.9% based on current interest
rates. Non Interest Income Non interest income increased $1.9
million for the fourth quarter and $738,000 year-to-date, however,
included in non interest income for the fourth quarter was $1.9
million in net gain on sale of securities. Excluding the net gain
on sale of securities, non interest income would have been flat for
the fourth quarter. Gain on sale of mortgage loans continues to
exceed prior year levels due to increased origination volumes
however the quarterly gap continues to narrow. For the quarter,
gain on sale of mortgage loans was up $142,000 while the
year-to-date total has increased $1.2 million. The Bank
discontinued offering brokerage services in September 2008.
Brokerage fee income totaled $1.4 million year-to-date in 2008.
Service fees on deposits have run consistently below prior year
levels due primarily to a reduction in overdraft fees. Service fees
on deposits were down $115,000 or 6.6% for the quarter and down
$444,000 or 6.5% year-to-date. Miscellaneous income included a
write-down on other real estate owned of $468,000 related to a
former subdivision loan. Non Interest Expenses Non interest
expenses increased $4.1 million to $10.7 million for the fourth
quarter and $4.6 million to $33.4 million year-to-date, however,
included in non interest expenses for the fourth quarter was $3.8
million in FHLB prepayment fees. Compensation and employee benefits
expense increased $205,000 or 6.0% for the fourth quarter and
decreased $1.6 million or 10.0% year-to-date. Four primary factors
contributed to the year-to-date decrease in compensation and
benefits: 1) the Company froze its defined benefit pension plan
effective April 1, 2008 resulting in an expense reduction of
$354,000 for the year, 2) the Company reduced its workforce by
approximately 10% in the third quarter of 2008 resulting in an
expense reduction of approximately $600,000 for the year, 3) the
Company discontinued offering brokerage services effective
September 2008 resulting in an expense reduction of $809,000 for
the year and 4) bonus and vacation related benefits have decreased
resulting in an expense reduction of $387,000 for the year. These
decreases to compensation and employee benefits were partially
offset by an increase in mortgage commissions of $577,000 as a
result of increased mortgage volumes discussed above. FDIC
insurance increased $178,000 for the fourth quarter and $1.5
million year-to-date. The year-to-date increase includes a special
assessment of $454,000. Marketing expense decreased $464,000
year-to-date due to the timing of advertising associated with the
name change which occurred in the first and second quarters of
2008. 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. INDIANA COMMUNITY BANCORP
CONSOLIDATED BALANCE SHEETS (in thousands, except share data)
(unaudited) December 31, December 31, 2009 2008 ---- ---- Assets:
Cash and due from banks $10,808 $22,352 Interest bearing demand
deposits 41,253 234 ------ --- Cash and cash equivalents 52,061
22,586 Securities available for sale at fair value (amortized cost
$149,031 and $90,957) 149,633 91,096 Securities held to maturity at
amortized cost (fair value $3,802 and $3,884) 4,084 4,467 Loans
held for sale (fair value $6,213 and $2,907) 6,075 2,856 Portfolio
loans: Commercial and commercial mortgage loans 527,946 556,133
Residential mortgage loans 97,551 120,227 Second and home equity
loans 97,071 104,084 Other consumer loans 15,312 20,532 Unearned
income (99) (241) --- ---- Total portfolio loans 737,781 800,735
Allowance for loan losses (13,113) (8,589) ------- ------ Portfolio
loans, net 724,668 792,146 Premises and equipment 15,151 15,323
Accrued interest receivable 3,533 3,777 Goodwill - 1,394 Other
assets 55,118 35,728 ------ ------ TOTAL ASSETS $1,010,323 $969,373
========== ======== Liabilities and Shareholders' Equity:
Liabilities: Deposits: Demand $80,938 $71,726 Interest checking
170,226 110,944 Savings 42,520 40,862 Money market 207,089 156,500
Certificates of deposits 339,025 314,425 ------- ------- Retail
deposits 839,798 694,457 ------- ------- Brokered deposits - 5,420
Public fund certificates 507 10,762 --- ------ Wholesale deposits
507 16,182 --- ------ Total deposits 840,305 710,639 -------
------- FHLB advances 55,000 129,926 Short term borrowings - 4,713
Junior subordinated debt 15,464 15,464 Other liabilities 14,630
16,619 ------ ------ Total liabilities 925,399 877,361 -------
------- 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 21,054 20,962 No par common stock; Authorized: 15,000,000
shares Issued and outstanding: 3,358,079 and 3,358,079 21,060
20,985 Retained earnings, restricted 42,862 50,670 Accumulated
other comprehensive loss, net (52) (605) --- ---- Total
shareholders' equity 84,924 92,012 ------ ------ TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY $1,010,323 $969,373 ========== ========
INDIANA COMMUNITY BANCORP CONDENSED CONSOLIDATED STATEMENTS OF
INCOME (in thousands, except share and per share data) (unaudited)
Three Months Ended Year to Date December 31, December 31,
------------ ------------ 2009 2008 2009 2008 ---- ---- ---- ----
Interest Income: Short term investments $23 $12 $99 $462 Securities
1,340 815 4,164 2,878 Commercial and commercial mortgage loans
7,520 7,883 30,192 31,406 Residential mortgage loans 1,322 1,897
6,192 8,516 Second and home equity loans 1,236 1,454 4,992 6,186
Other consumer loans 335 437 1,452 1,890 --- --- ----- ----- Total
interest income 11,776 12,498 47,091 51,338 ------ ------ ------
------ Interest Expense: Checking and savings accounts 573 308
1,679 981 Money market accounts 538 611 2,235 2,867 Certificates of
deposit 2,543 2,760 10,733 12,265 ----- ----- ------ ------ Total
interest on retail deposits 3,654 3,679 14,647 16,113 ----- -----
------ ------ Brokered deposits - 91 139 426 Public funds 3 76 77
185 --- --- --- --- Total interest on wholesale deposits 3 167 216
611 --- --- --- --- Total interest on deposits 3,657 3,846 14,863
16,724 ----- ----- ------ ------ FHLB borrowings 941 1,234 4,278
5,059 Other borrowings - - 1 1 Junior subordinated debt 76 171 411
765 --- --- --- --- Total interest expense 4,674 5,251 19,553
22,549 ----- ----- ------ ------ Net interest income 7,102 7,247
27,538 28,789 Provision for loan losses 3,433 1,021 16,218 4,292
----- ----- ------ ----- Net interest income after provision for
loan losses 3,669 6,226 11,320 24,497 ----- ----- ------ ------ Non
Interest Income: Gain on sale of loans 430 288 2,630 1,446
Gain/(loss) on sale of securities 1,862 - 1,825 (437) Investment
advisory services - - - 1,371 Service fees on deposit accounts
1,625 1,740 6,347 6,791 Loan servicing income, net of impairment
135 138 530 551 Miscellaneous 532 528 1,346 2,218 --- --- -----
----- Total non interest income 4,584 2,694 12,678 11,940 -----
----- ------ ------ Non Interest Expenses: Compensation and
employee benefits 3,616 3,411 14,257 15,843 Occupancy and equipment
936 1,012 3,854 4,159 Service bureau expense 434 483 1,891 1,917
FDIC premium 392 214 1,785 286 Marketing 192 180 777 1,241 Goodwill
impairment - - 1,394 - FHLB advances prepayment fee 3,813 - 3,813 -
Miscellaneous 1,321 1,287 5,632 5,388 ----- ----- ----- ----- Total
non interest expenses 10,704 6,587 33,403 28,834 ------ -----
------ ------ Income (loss) before income taxes (2,451) 2,333
(9,405) 7,603 Income tax provision (credit) (1,082) 824 (3,556)
2,600 ------ --- ------ ----- Net Income (Loss) $(1,369) $1,509
$(5,849) $5,003 ======= ====== ======= ====== Basic earnings (loss)
per common share $(0.50) $0.43 $(2.09) $1.47 Diluted earnings
(loss) per common share $(0.50) $0.43 $(2.09) $1.47 Basic weighted
average number of common shares 3,358,079 3,358,079 3,358,079
3,359,666 Dilutive weighted average number of common shares
3,358,079 3,358,079 3,358,079 3,365,131 Dividends per common share
$0.010 $0.120 $0.260 $0.640 Supplemental Data: Three Months Ended
Year to Date (unaudited) December 31, December 31, ------------
------------ 2009 2008 2009 2008 ---- ---- ---- ---- Weighted
average interest rate earned on total interest-earning assets 4.76%
5.62% 5.00% 5.97% Weighted average cost of total interest-bearing
liabilities 1.93% 2.42% 2.14% 2.68% Interest rate spread during
period 2.82% 3.21% 2.86% 3.29% Net interest margin (net interest
income divided by average interest- earning assets on annualized
basis) 2.87% 3.26% 2.93% 3.35% Total interest income divided by
average Total assets (on annualized basis) 4.43% 5.19% 4.61% 5.51%
Total interest expense divided by average total assets (on
annualized basis) 1.76% 2.18% 1.91% 2.42% Net interest Income
divided by average total assets (on annualized basis) 2.67% 3.01%
2.70% 3.09% Return on assets (net income divided by average total
assets on annualized basis) -0.51% 0.63% -0.57% 0.54% Return on
equity (net income divided by average total equity on annualized
basis) -6.22% 7.99% -6.48% 7.11% December 31, December 31, 2009
2008 ---- ---- Book value per share outstanding $18.86 $20.98
Nonperforming Assets: Loans: Non-accrual $19,889 $22,534 Past due
90 days or more 1,410 518 Restructured 500 1,282 --- ----- Total
nonperforming loans 21,799 24,334 Real estate owned, net 12,603
3,335 Other repossessed assets, net 23 44 --- --- Total
Nonperforming Assets $34,425 $27,713 Nonperforming assets divided
by total assets 3.41% 2.86% Nonperforming loans divided by total
loans 2.95% 3.03% Balance in allowance for Loan Losses $13,113
$8,589 DATASOURCE: Indiana Community Bancorp CONTACT: John K.
Keach, Jr., Chairman, Chief Executive Officer, +1-812-373-7816, or
Mark T. Gorski, Executive Vice President, Chief Financial Officer,
+1-812-373-7379, both of Indiana Community Bancorp Web Site:
http://www.myindianabank.com/
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