Nashville Lender Announces Semi-Annual Dividend Payment
NASHVILLE, Tenn., Oct. 30, 2023 /PRNewswire/ — Today InsCorp (OTCQX: IBTN) reported a third quarter net profit of $2,311,000 or, $0.80 per share, increasing year-to-date profits to $6,137,000, or $2.13 per share. Quarterly profits compared favorably to the prior quarter, increasing $0.18 cents, or 29% over the second quarter of 2023. A variety of factors contributed to the growth in earnings, including: an increase in net interest margin; quarterly growth in loan fee income; a modest reversal of loan loss reserve provision; and on-going contributions from hedging activities reducing the impact of increased funding costs. “We were pleased to demonstrate both balance sheet stability and operating income growth during this period of market volatility and industry uncertainty,” said Jim Rieniets, President and CEO of INSBANK. “Our team remains focused on things we can control, including acquiring new customers, administering credit in a prudent fashion, and employing technology to better serve clients,” Rieniets continued. Total assets as of September 30 were $813,465,000 consistent with the prior quarter, and a 12.3% increase over the prior year same period. During the quarter non-interest bearing deposits increased $1,629,000 or 8% on an annualized basis, while interest-bearing deposits were virtually unchanged. The mix of interest-bearing deposits continued to shift in favor of certificates of deposit, though that trend was slowing toward the end of the quarter.
Net interest income for the quarter totaled $6,590,000, increasing $356,000 over the most recent quarter. Year-to-date net interest income of $18,949,000 represented a 7.3% increase over the same period for the prior year. The cost of interest bearing deposits increased 38 basis points during the quarter to 3.81%, while the yield on earnings assets was 6.35%. Operating income, excluding gains and losses on hedging activities, was $9,667,000 on a year-to-date basis, which was an increase of $1,264,000 over the prior year. Net interest margin was 3.36% on a year-to-date basis, comparing to 3.44% for the prior year. “A commercial and private banking business model like INSBANK’s is going to front-load deposit costs relative to some of our peers, but it also lends itself to greater loan re-pricing,” said Jim Rieniets. “While we expect continued increases in deposit costs over the next couple of quarters, the relative change will be moderating, and should be mitigated by re-pricing loans projected during 2024,” Rieniets continued.
While lending activity progressed during the quarter with over $26 million in loan commitments originated, outstanding balances reduced slightly as of quarter-end due to pay-offs. As the Nashville real estate market remains stable, most of the loan payoffs were on real estate secured loans. Measures of asset quality remain very strong for the company, as past due loans as of September 30 were 0.03%, while non-performing assets totaled just 0.22%. There were no charge-offs during the quarter, and the Allowance for Loan and Lease Losses was $9,164,000, or 1.36% of total loans outstanding.
Measures of liquidity risk remain healthy. At quarter-end, on-balance sheet liquidity was $90 million, which was consistent with the prior quarter. Estimated uninsured deposits were 20%, with the combination of balance sheet liquidity and $114 million in reciprocal deposit capacity providing ample ‘at-risk’ mitigation strategies.
Tangible book value increased $0.47 during the quarter to $23.46 as of September 30. Accumulated Other Comprehensive Income was ($802,000), or less than 1% of bank-level capital of $91,103,000. Tier 1 risk-based capital was 11.7%, while total risk-based capital equaled 12.9%. On a consolidated basis, tangible common equity was 8.3%.
The company’s board of directors also recently approved the payment of a semi-annual dividend. Shareholders of record on November 17, 2023, will receive a $0.17 dividend per share payable on December 08, 2023. “In the current environment, we seek to allocate our company’s earnings in a way that optimizes shareholder value,” said Mike Qualls, Chairman of InsCorp. “In addition to dividend payments, capital is available for supporting continued growth as well as previously authorized stock repurchases,” Qualls continued.
Highlights of the quarter and year-over-year include:
Loans grew $56.2 million or 9.1% as of Sept 30, 2023, compared to Sept 30, 2022.
Total assets grew $89 million or 12.3% as of Sept 30, 2023, compared to Sept 30, 2022.
Total deposits grew $89.8 million or 15.8% during the 12 months ended Sept 30, 2023.
Non-Interest Expense to Total Average Assets was 1.70% YTD as of Sept 30, 2023, slightly lower than 1.76% for the same period in 2022 and compared favorably to the bank’s FDIC peer group average of 2.39%.
Assets per employee remained strong at $14.2 million, compared to the FDIC peer group of $7.1 million.
Cost of all interest-bearing funding was 3.54% for the three months ended Sept 30, 2023, increasing from 1.18% for the same period in 2022.
YTD Net income before taxes, at the bank level, was $10.0 million after excluding interest rate hedges at Sept 30, 2023, compared to $8.7 million at Sept 30, 2022.
Quarterly earnings per share were $0.80 for the quarter ended Sept 30, 2023, compared to $0.89 for the quarter ended Sept 30, 2022.
Annualized return on tangible common equity was 12.6% for the six months ended Sept 30, 2023.
The percentage of loans past due >90 days, non-accrual, and other real estate to gross loans was 0.22% compared to peer of 0.42%.
The allowance for loan and lease losses was 1.36%, inclusive of a $493,000 CECL adoption adjustment in the first quarter.
Estimated uninsured deposits less brokered at Sept 30 were 19.4% of total deposits. Deposits placed in reciprocal programs totaled $29 million as of Sept 30. The bank maintains an additional capacity of $114 million for placing depositors’ funds in reciprocal arrangements.
Accumulated Other Comprehensive Income (AOCI) reflected a loss on the securities portfolio substantially offset by gains on interest rate swaps held by the bank for interest rate risk purposes, resulting in a $389,000 increase in AOCI for the nine months ended Sept 30, 2023.
Tangible book value increased to $23.46 on Sept 30, 2023, from $21.07 at Sept 30, 2022.
About INSBANK
Since 2000, INSBANK has offered its clients highly personalized service provided by experienced relationship managers, while positioning itself as an innovator, utilizing technologies to deliver those services efficiently and conveniently. In addition to its commercial focused operation, INSBANK operates three divisions, Medquity, TMA Medical Banking and Finworth. Medquity offers healthcare banking solutions to physicians, partnerships, and practices nationwide, while TMA Medical Banking provides banking services specifically to members of the Tennessee Medical Association. Finworth offers nationally available virtual private client services for interest bearing deposits. INSBANK is owned by InsCorp, Inc., a Tennessee bank holding company. The bank is headquartered in Nashville at 2106 Crestmoor Road, and has an office in Brentwood at 5614 Franklin Pike Circle. For more information, please visit www.insbank.com
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InsCorp, Inc. |
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Consolidated Balance Sheets |
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(000’s) |
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(unaudited) |
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September 30, |
September 30, |
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2023 |
2022 |
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Assets |
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Cash and Cash Equivalents |
$ 5,182 |
$ 1,394 |
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Interest Bearing Deposits |
38,575 |
25,495 |
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Securities |
53,565 |
39,304 |
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Loans |
673,256 |
617,094 |
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Allowance for Loan Losses |
(9,164) |
(8,701) |
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Net Loans |
664,092 |
608,393 |
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Premises and Equipment, net |
12,799 |
13,082 |
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Bank Owned Life Insurance |
13,975 |
13,639 |
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Restricted Equity Securities |
8,980 |
10,468 |
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Goodwill and Related Intangibles, net |
1,091 |
1,091 |
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Other Assets |
15,206 |
11,629 |
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Total Assets |
$ 813,465 |
$ 724,495 |
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Liabilities and Shareholders’ Equity |
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Liabilities |
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Deposits |
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Non-interest-bearing |
$ 77,253 |
$ 87,548 |
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Interest-bearing |
579,247 |
479,201 |
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Total Deposits |
656,500 |
566,749 |
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Federal Home Loan Bank Advances |
53,000 |
63,000 |
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Paycheck Protection Program Liquidity Fund |
– |
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Subordinated Debentures |
17,500 |
17,500 |
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Line of Credit |
8,250 |
7,500 |
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Federal Funds Purchased |
– |
3,000 |
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Other Liabilities |
9,932 |
4,996 |
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Total Liabilities |
745,182 |
662,745 |
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Shareholders’ Equity |
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Common Stock |
32,999 |
32,500 |
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Treasury Stock |
(3,857) |
(3,199) |
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Accumulated Retained Earnings |
39,943 |
32,919 |
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Accumulated Other Comprehensive Income |
(802) |
(470) |
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Total Stockholders’ Equity |
68,283 |
61,750 |
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Total Liabilities & Shareholders’ Equity |
$ 813,465 |
$ 724,495 |
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Tangible Book Value |
$ 23.46 |
$ 21.07 |
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InsCorp, Inc. |
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Consolidated Statements of Income |
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(000’s) |
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(Unaudited) |
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Three Months Ended |
Nine Months Ended |
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September 30, 2023 |
September 30, 2022 |
September 30, 2023 |
September 30, 2022 |
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Interest Income |
$ 12,129 |
$ 8,442 |
$ 34,063 |
$ 21,304 |
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Interest Expense |
5,539 |
1,737 |
15,114 |
3,638 |
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Net Interest Income |
6,590 |
6,705 |
18,949 |
17,666 |
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Provision for Loan Losses |
(100) |
150 |
165 |
595 |
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Non-Interest Income |
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Service Charges on Deposit Accounts |
94 |
57 |
192 |
168 |
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Bank Owned Life Insurance |
87 |
81 |
254 |
240 |
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Other |
373 |
301 |
965 |
801 |
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Non-Interest Expense |
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Salaries and Benefits |
2,324 |
2,118 |
6,807 |
6,066 |
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Occupancy and equipment |
391 |
378 |
1,138 |
1,213 |
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Data Processing |
80 |
235 |
295 |
556 |
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Marketing and Advertising |
78 |
117 |
354 |
374 |
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Other |
697 |
553 |
1,934 |
1,668 |
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Net income from Operations |
3,674 |
3,593 |
9,667 |
8,403 |
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Gain (Loss) on Interest Rate Hedges |
(247) |
– |
(485) |
2,839 |
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Interest Expense-Holding Co. Debt |
385 |
281 |
1,118 |
752 |
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Income Before Income Taxes |
3,042 |
3,312 |
8,064 |
10,490 |
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Income Tax Expense |
(731) |
(746) |
(1,927) |
(2,473) |
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Net Income |
$ 2,311 |
$ 2,566 |
$ 6,137 |
$ 8,017 |
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Return on Weighted Average Common Shares |
$ 0.80 |
$ 0.89 |
$ 2.13 |
$ 2.79 |
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SOURCE INSBANK