Indiana Business Bancorp Reports Third Quarter Results and Cash Dividend

INDIANAPOLIS--()--Indiana Business Bancorp (OTCBB: IBBI), the holding company for Indiana Business Bank, announced results for the three and nine months ended September 30, 2014 and its fourth quarterly cash dividend.

The Company recorded a profit of $221,112, or $.14 per share and $476,874 or $.30 per share for the quarter and year to date, respectively. This compares to a profit of $124,632 or $.08 per share and $562,507 or $.37 per share for the same periods in 2013. The increase in third quarter profitability was driven by an increase in gains realized from the sale of government guaranteed business loans. The decline in year to date net income is primarily attributed to increased non-interest expense.

Non-interest income for the third quarter of 2014 was $163,978 compared to $18,515 for same period in 2013. Year to date non-interest income was $311,154 versus same period last year non-interest income of $337,002. The Bank sold its sole Other Real Estate Owned (OREO) property during the third quarter of 2013. Year to date non-interest income in 2013 included $50,397 in OREO Income and $132,642 in write-downs and losses on sale of OREO. Gains on sale of government guaranteed business loans are a significant component of non-interest income, and 2013 was a record year for the Bank in terms of gains from secondary market sales. The Bank’s strong performance in the most recent quarter is a reflection of the timing of these gains, and the year to date performance compares well to 2013.

Non-interest expense (generally salaries and other operating expenses) of $655,153 for the third quarter compares to non-interest expense of $593,499 during the prior year period. Year to date non-interest expense of $1,931,844 reflects a 5% increase from $1,839,167 in the first nine months of 2013. The increase in non-interest expense is the result of an increase in staffing, merit salary increases and increases in the cost of employee benefits.

The Bank made a $30,000 provision for loan loss during the third quarter of 2014. The provision for the year to date of $115,000 compared to the $180,000 provision expense for the same period of 2013. The smaller provision reflects the continuing improvement in the overall credit environment and the Bank’s portfolio’s risk profile. The allowance for loan losses at September 30, 2014 was $701,337 or 1.31% of total loans.

The Bank’s Tier 1 Leverage Ratio of 15.43% and Total Risk Based Capital Ratio of 20.3% exceeded the levels needed to be considered “well capitalized” at September 30, 2014.

Dividend Declared

The Company also announced that on October 23, 2014, the Board of Directors declared a dividend of $.02 per share of common stock, payable on November 17, 2014 to shareholders of record at the close of business on November 7, 2014. The Company expects to continue paying cash dividends on a quarterly basis; however, the payment and amount of any future dividends will be determined by the Board of Directors on the basis of Company’s financial condition, earnings, regulatory constraints and other factors.

President and CEO, James S. Young stated, “The past 12 months have been a period of progress for Indiana Business Bank. We have done well on two separate fronts by reducing non-performing assets by 34% while growing the loan portfolio by 4%. We are pleased to continue our recent pattern of providing value to our shareholder base through a cash dividend.”

About Indiana Business Bancorp and Indiana Business Bank

Indiana Business Bancorp is a bank holding company whose operations are conducted through its subsidiary, Indiana Business Bank, a state-chartered, locally-owned and managed commercial bank formed for the purpose of providing highly-personalized banking services for small to medium-sized businesses, their owners and professional services firms in the Indianapolis, Indiana metropolitan area. The Bank provides a full line of commercial banking loan, deposit, and cash management services that are delivered in a highly personalized manner by experienced banking professionals. The Bank specializes in serving the commercial and consumer banking needs of small to medium sized businesses and their owners, and professionals located primarily throughout Central Indiana.

We routinely post important information for investors on our website, in the “About” section under “Investor Relations”. We intend to use this website as a means of providing financial and other information to investors and other interested parties. Accordingly, investors should monitor our website, in addition to following our press releases and other presentations. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding Indiana Business Bank and Indiana Business Bancorp’s business which are not historical facts are "forward-looking statements" that involve risks and uncertainties which may cause actual results to differ materially from expected results, including: changes in general, regional and local economic conditions, and their effect on interest rates; the impact of the downturn in housing and the adverse conditions in the credit markets; our ability to improve credit quality and successfully dispose of problem assets; competition among banks and other financial intermediaries within the Indianapolis metropolitan market; risks that borrowers may default on their loans; and changes in regulations and accounting policies affecting financial institutions.



As of and for the Three Months

As of and for the
      Ending September 30   Nine Months Ending September 30

Operating Data

    2014   2013   2014  


Net Interest Income

    692,287   709,616   2,062,564   2,095,472
Provision for Loan Losses     30,000   60,000   115,000   180,000
Noninterest Income     163,978   18,515   311,154   337,002
Noninterest Expense     655,153   593,499   1,931,844   1,839,967
Pre-Tax Net Income     171,112   74,632   326,874   412,507

Tax Benefit

    50,000   50,000   150,000   150,000

Net Income

    221,112   124,632   476,874   562,507

Per Share Data

Net Earnings per share     .14   .08   .30   .37

Weighted Average

Shares Outstanding








As of

Balance Sheet Data

September 30, 2014


December 31, 2013

September 30, 2013

Total Assets 66,003,631 68,671,914 62,871,123
Total Loans 54,163,158 54,760,848 52,024,145
Allowance for Loan Losses 701,337 874,370 956,911
Investment Securities 7,855,612 8,141,359 8,253,956
Total Deposits 47,584,339 49,661,051 44,105,457
Total Shareholders’ Equity 10,737,798 10,418,284 10,218,563


Indiana Business Bancorp
Gregory Gault, Executive Vice President, 317-218-2181
Guy Johnson Public Relations
Guy Johnson, 317-503-4605

Release Summary

Indiana Business Bank 3rd Quarter Financial Report

Indiana Business Bancorp