NASHVILLE, Tenn., May 6, 2020 /PRNewswire/ -- INSCORP, Inc. (the "Company") IBTN, the parent company of INSBANK, reported first quarter net income of $732,877, or $0.25 per share, for the first quarter of 2020 compared to net income of $902,525, or $0.31 per share, for the first quarter of 2019. The decrease in profits was driven by two factors, both of which can be attributed to COVID19. During the quarter and due to anticipated challenges from the pandemic the Nashville-based lender added $300,000 to its loan loss reserve, increasing it from 1.15% to 1.22% of total loans outstanding. Multiple rate cuts by the Federal Reserve during the quarter contributed to a decline in net interest margin to 3.00% from 3.23% the prior quarter.
"While we don't manage the daily operations of the bank expecting a severe economic downturn and rate shock, we do manage related risks to minimize the impact and duration of such unforeseen events," said Jim Rieniets, President & CEO of INSBANK. "The bank's net interest margin, for example, is negatively impacted in the near term but should benefit from historically laddered liabilities of more than $220 million expected to reprice over the next five quarters."
Highlights for the quarter-ended March 31, 2020 include:
- Non-performing assets to total loans and OREO were 0.68% at March 31, 2020, comparing favorably to the bank's FDIC peer group average of 0.87%
- Annualized net charge-offs to average loans were 0.00% for the three months ended March 31, 2020 compared to 0.10% for the same period in 2019
- Yield on assets was 4.42% for the three months ended March 31, 2020 compared to 4.72% for the same period in 2019
- Non-interest-bearing deposits grew to $42.5 million, an increase of 15% over the past twelve months
- Cost of interest-bearing funding was 1.93% for the three months ended March 31, 2020 decreasing from 2.03% for the same period in 2019
- Efficiency ratio was 62.3% at March 31, 2020, comparing favorably to the bank's FDIC peer group average of 64.7%
- Non-Interest Expense to Total Assets was 1.92% for the three months ended March 31, 2020, slightly higher than 1.85% for the same period in 2019
- Annualized return on tangible common equity for the first quarter was 6.10%
- Tangible book value increased $0.32 to $16.64 during the quarter by virtue of retained earnings and an increase in accumulated other comprehensive income
As of May 1, the bank had approved 202 Cares Act Payroll Protection Program loans totaling more than $45 million. Roughly 80% of the loans were to existing customers while the remainder were made to new clients. These funds will be used by the borrowers to support more than 5,200 jobs, primarily in the greater Nashville area.
"Our team quickly implemented the bank's pandemic plan and has been focused on working with our clients to address the challenges we face together whether in the form of modifying their current business loan, getting a PPP loan approved under the CARES Act, or employing alternative protocols so that an at-risk deposit-holder could renew a CD without leaving their home or having internet access," Rieniets continued. "The first quarter of 2020 began a new era for banking and many other industries; one that will test the decisions of our past, the resolve of our present, and the innovative capacity of our future. We expect our culture of respect and credo of "Where Genuine Matters" to be more relevant than ever in this time of uncertainty," said Jim Rieniets, President and CEO of INSBANK.
About INSBANK
Since 2000, INSBANK has offered its clients highly personal services provided by experienced relationship managers, and has utilized technologies to deliver those services efficiently and conveniently. TMA Medical Banking is a division of INSBANK which provides banking services to members of the Tennessee Medical Association. INSBANK is owned by InsCorp, Inc., a Tennessee bank holding company. The bank has offices in Nashville at 2106 Crestmoor Road, and in Brentwood at 5614 Franklin Pike Circle. For more information, please visit www.insbanktn.com.
InsCorp, Inc. Consolidated Balance Sheets (000's) (unaudited) | ||||||
March 31, | December 31, | March 31, | ||||
2020 | 2019 | 2019 | ||||
Assets | ||||||
Cash and Cash Equivalents | $ 2,521 | $ 5,342 | $ 4,423 | |||
Interest Bearing Deposits | 38,209 | 27,418 | 38,638 | |||
Securities | 25,402 | 20,996 | 22,010 | |||
Loans | 464,736 | 469,172 | 429,916 | |||
Allowance for Loan Losses | (5,680) | (5,380) | (4,954) | |||
Net Loans | 459,056 | 463,792 | 424,962 | |||
Premises and Equipment, net | 13,894 | 13,982 | 14,147 | |||
Bank Owned Life Insurance | 9,927 | 9,865 | 9,674 | |||
Restricted Equity Securities | 6,119 | 5,866 | 4,676 | |||
Goodwill and Related Intangibles, net | 1,091 | 1,091 | 1,091 | |||
Other Assets | 6,721 | 5,022 | 4,018 | |||
Total Assets | $ 562,940 | $ 553,374 | $ 523,639 | |||
Liabilities and Shareholders' Equity | ||||||
Liabilities | ||||||
Deposits | ||||||
Non-interest-bearing | $ 42,576 | $ 34,854 | $ 37,070 | |||
Interest-bearing | 399,199 | 402,118 | 372,401 | |||
Total Deposits | 441,775 | 436,972 | 409,471 | |||
Federal Home Loan Bank Advances | 51,000 | 49,000 | 45,000 | |||
Subordinated Debentures | 15,000 | 15,000 | 15,000 | |||
Federal Funds Purchased | - | 5,000 | ||||
Other Liabilities | 5,475 | 3,404 | 3,648 | |||
Total Liabilities | 513,250 | 504,376 | 478,119 | |||
Shareholders' Equity | ||||||
Common Stock | 30,773 | 30,993 | 30,759 | |||
Accumulated Retained Earnings | 18,677 | 17,944 | 14,908 | |||
Accumulated Other Comprehensive Income | 240 | 61 | (147) | |||
Total Stockholders' Equity | 49,690 | 48,998 | 45,520 | |||
Total Liabilities & Shareholders' Equity | $ 562,940 | $ 553,374 | $ 523,639 | |||
Tangible Book Value | $ 16.64 | $ 16.32 | $ 15.23 | |||
InsCorp, Inc. Consolidated Statements of Income (000's) (Unaudited) | ||||||
Three Months Ended | Twelve Months Ended | Three Months Ended | ||||
March 31, 2020 | December 31, 2019 | March 31, 2019 | ||||
Net Interest Income | $ 3,893 | $ 16,069 | $ 3,951 | |||
Provision for Loan Losses | 300 | 725 | 225 | |||
Non-Interest Income | ||||||
Service Charges on Deposit Accounts | 56 | 154 | 36 | |||
Residential Mortgage Services | - | 4 | - | |||
Bank Owned Life Insurance | 62 | 253 | 62 | |||
Sale of Government Guaranteed Loans | - | 384 | ||||
Other | 175 | 600 | 97 | |||
Non-Interest Expense | ||||||
Salaries and Benefits | 1,629 | 6,023 | 1,406 | |||
Occupancy and equipment | 295 | 1,160 | 273 | |||
Data Processing | 138 | 499 | 124 | |||
Marketing and Advertising | 91 | 379 | 78 | |||
Other | 513 | 1,988 | 565 | |||
Net income from Operations | 1,220 | 6,690 | 1,475 | |||
Interest Expense-Subordinated Debt | 239 | 956 | 239 | |||
Income Before Income Taxes | 981 | 5,734 | 1,236 | |||
Income Tax Expense | (248) | (1,207) | (333) | |||
Net Income | $ 733 | $ 4,527 | $ 903 | |||
Return on Weighted Average Common Shares | $ 0.25 | $ 1.55 | $ 0.31 | |||
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SOURCE INSBANK
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