INSCORP, INC. Nashville Bank Balances Growth & Risk Management Practices to Navigate Current Economy
NASHVILLE, Tenn., April 20, 2023 /PRNewswire/ -- Today InsCorp (OTCQX: IBTN) reported a first quarter net profit of $2,050,000 or, $0.71 per share. Relative to the same quarter of the prior year, net interest income grew $1,047,000, while operating expenses increased $143,000. Operating income before taxes and non-recurring items was $2,614,000, versus $1,740,000 the prior year. While net interest margin of 3.44% was greater than that of the prior year same period of 3.06%, margin declined 30 basis points on a sequential quarter basis. For the quarter, loans grew $12.8 million, or 7.8%, on an annualized basis, while all forms of funding increased $32 million. "Against the backdrop of unprecedented Fed rate increases over the past 12 months, our results were in line with our expectations for the early part of the year," said Jim Rieniets, President and CEO of INSBANK. "Despite the headwind of higher funding costs, loan growth and efficient operations helped enable a 13.5% return on equity for the quarter, which is consistent with our long-term strategic objectives," Rieniets continued.
Measures of asset quality remain very strong for the company and compare very favorably to recent peer group data. Past due loans as of March 31 were 0.05%, while non-performing assets totaled just 0.32%. There were no charge-offs during the quarter, and loan risk ratings migrated positively during the period. On-balance sheet liquidity as of March 31 was $86 million, increasing $22 million during the quarter. "Recent bank failures highlighted the importance of prudent enterprise risk management, more specifically in the areas of interest rate risk and liquidity risk," said Rieniets. "Our team has historically applied the concept of diversification to funding the balance sheet, alongside risk mitigation strategies such as interest rate caps, floors, and hedges to minimize exposure to interest rate volatility. While some of our peers have seen large discounts to mark-to-market capital, our negative AOCI adjustment is a mere $208,000, or less than 0.25% of the $88 million in bank-level capital," Rieniets continued.
As of March 31, InsCorp shares had a tangible book value of $22.35 per share, and a book value of $22.73 per share. Tangible book value per share increased $0.65 during the quarter. Shares outstanding decreased slightly by virtue of a repurchase of 10,000 shares during the quarter, and the holding company's debt-to-equity ratio remained stable at 0.395. "With uncertainty around the near-term economic outlook, our team will seek to optimize growth opportunities where the bank can generate value for the customer while navigating risk for the bank. For example, Medquity, our nationwide healthcare division, continues to have a steady pipeline of prospects which have less correlation of risk to a general economic downturn than do general CRE and C&I portfolios," said Jim Rieniets. "We continue to believe that leveraging technology-focused platforms to serve niche business lines is the best path for enhancing shareholder value today, and in the future," Rieniets continued.
Highlights of the quarter and year-over-year include:
- Loans grew $108.7 million or 19.7% as of March 31, 2023, compared to March 31, 2022.
- Total assets grew $61.8 million or 8.5% as of March 31, 2023, compared to March 31, 2022.
- Non-interest-bearing deposits grew $1.1 million or 1.3% during the 12 months ended March 31, 2023.
- Non-Interest Expense to Total Average Assets was 1.56% for the quarter ended March 31, 2023, slightly lower than 1.79% for the same period in 2022 and compared favorably to the bank's FDIC peer group average of 2.40%.
- Assets per employee remained strong at $14.0 million, compared to the FDIC peer group of $6.90 million.
- Cost of all interest-bearing funding was 2.97% for the three months ended March 31, 2023, increasing from 0.69% for the same period in 2022.
- Net income before taxes, at the bank level, was $3.08 million after excluding one-time gains at March 31, 2023, compared to $2.06 million at March 31, 2022.
- Quarterly earnings per share were $0.71 for the quarter ended March 31, 2023, compared to $1.21 for the quarter ended March 31, 2022.
- Annualized return on tangible common equity was 13.49% for the three months ended March 31, 2023.
- The percentage of loans past due and non-accrual to gross loans was 0.36% comparing to peer of 0.34%.
- The allowance for loan and lease losses was 1.42%, inclusive of a $493,000 CECL adoption adjustment in the first quarter.
- Estimated uninsured deposits at March 31 were 24.8% of total deposits.
- Deposits placed in reciprocal programs totaled $31 million as of March 31. The bank maintains an additional capacity of $108 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 $205,000 decrease in AOCI for the three months ended March 31, 2023.
- Tangible book value increased to $22.35 on March 31, 2023, from $19.89 at March 31, 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
InsCorp, Inc. | |||||||||
Consolidated Balance Sheets | |||||||||
(000's) | |||||||||
(unaudited) | |||||||||
March 31, | December 31, | March 31, | |||||||
2023 | 2022 | 2022 | |||||||
Assets | |||||||||
Cash and Cash Equivalents | $ 4,765 | $ 5,412 | $ 17,258 | ||||||
Interest Bearing Deposits | 31,359 | 18,226 | 90,288 | ||||||
Securities | 50,101 | 40,785 | 27,545 | ||||||
Loans | 661,226 | 648,382 | 552,473 | ||||||
Allowance for Loan Losses | (9,396) | (8,778) | (8,193) | ||||||
Net Loans | 651,830 | 639,604 | 544,280 | ||||||
Premises and Equipment, net | 12,918 | 13,028 | 13,275 | ||||||
Bank Owned Life Insurance | 13,803 | 13,721 | 13,477 | ||||||
Restricted Equity Securities | 8,577 | 8,496 | 9,225 | ||||||
Goodwill and Related Intangibles, net | 1,091 | 1,091 | 1,091 | ||||||
Other Assets | 12,303 | 11,657 | 8,490 | ||||||
Total Assets | $ 786,747 | $ 752,020 | $ 724,929 | ||||||
Liabilities and Shareholders' Equity | |||||||||
Liabilities | |||||||||
Deposits | |||||||||
Non-interest-bearing | $ 85,274 | $ 87,843 | $ 84,190 | ||||||
Interest-bearing | 542,163 | 488,684 | 529,316 | ||||||
Total Deposits | 627,437 | 576,527 | 613,506 | ||||||
Federal Home Loan Bank Advances | 62,000 | 67,000 | 30,000 | ||||||
Paycheck Protection Program Liquidity Fund | 322 | ||||||||
Subordinated Debentures | 17,500 | 17,500 | 17,500 | ||||||
Federal Funds Purchased | - | 15,000 | - | ||||||
Notes Payable | 8,000 | 7,500 | 2,500 | ||||||
Other Liabilities | 6,306 | 4,653 | 2,885 | ||||||
Total Liabilities | 721,243 | 688,180 | 666,713 | ||||||
Shareholders' Equity | |||||||||
Common Stock | 32,775 | 32,643 | 32,241 | ||||||
Treasury Stock | (3,417) | (3,200) | (3,150) | ||||||
Accumulated Retained Earnings | 36,354 | 34,810 | 28,543 | ||||||
Accumulated Other Comprehensive Income | (208) | (413) | 582 | ||||||
Total Stockholders' Equity | 65,504 | 63,840 | 58,216 | ||||||
Total Liabilities & Shareholders' Equity | $ 786,747 | $ 752,020 | $ 724,929 | ||||||
Tangible Book Value | $ 22.35 | $ 21.71 | $ 19.89 | ||||||
InsCorp, Inc. | |||||||||
Consolidated Statements of Income | |||||||||
(000's) | |||||||||
(Unaudited) | |||||||||
Three Months Ended | Twelve Months Ended | Three Months Ended | |||||||
March 31, 2023 | December 31, 2022 | March 31, 2022 | |||||||
Interest Income | $ 10,386 | $ 30,415 | $ 6,013 | ||||||
Interest Expense | 4,261 | 6,202 | 935 | ||||||
Net Interest Income | 6,125 | 24,213 | 5,078 | ||||||
Provision for Loan Losses | 125 | 670 | 145 | ||||||
Non-Interest Income | |||||||||
Service Charges on Deposit Accounts | 47 | 209 | 57 | ||||||
Bank Owned Life Insurance | 82 | 322 | 79 | ||||||
Gain on Sale of Securities | - | - | - | ||||||
Other | 298 | 1,156 | 221 | ||||||
Non-Interest Expense | |||||||||
Salaries and Benefits | 2,251 | 8,402 | 2,035 | ||||||
Occupancy and equipment | 373 | 1,563 | 433 | ||||||
Data Processing | 99 | 858 | 154 | ||||||
Marketing and Advertising | 116 | 524 | 128 | ||||||
Other | 621 | 2,266 | 567 | ||||||
Net income from Operations | 2,967 | 11,617 | 1,973 | ||||||
Gain in Interest Rate Hedges | 66 | 2,789 | 2,516 | ||||||
Interest Expense-Subordinated Debt | 353 | 1,095 | 233 | ||||||
Income Before Income Taxes | 2,680 | 13,311 | 4,256 | ||||||
Income Tax Expense | (630) | (2,975) | (1,052) | ||||||
Net Income | $ 2,050 | $ 10,336 | $ 3,204 | ||||||
Return on Weighted Average Common Shares | $ 0.71 | $ 3.59 | $ 1.12 | ||||||
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SOURCE INSBANK