Northeast Indiana Bancorp, Inc. Announces First Quarter Earnings

Northeast Indiana Bancorp, Inc. Announces First Quarter Earnings



HUNTINGTON, Ind., April 19  /PRNewswire-FirstCall/ -- Northeast Indiana
Bancorp, Inc., (NEIB), the parent company of First Federal Savings Bank, has
announced net income of $403,000 ($0.27 per diluted common share) for the first
quarter ended March 31, 2004 compared to $481,000 ($0.33 per diluted common
share) for the first quarter ended March 31, 2003.  This represents a decrease
of $78,000 or 16.2% between periods.  The decrease is primarily due to much
lower mortgage refinancing volumes during the current quarter when compared to
the year earlier period.  The current three months earnings equates to an
annualized return on average assets (ROA) of 0.73% and a return on average
equity (ROE) of 5.92%.

Net interest income increased to $1.6 million for the quarter ended March 31,
2004 when compared to $1.5 million for the quarter ended March 31, 2003. The
Company's net interest margin also improved 17 basis points to 3.01% for the
current quarter compared to 2.84% for the year earlier quarter.  This was
primarily due to a decline in the cost of interest-bearing liabilities that was
greater than the decline in interest-earning asset yields and to a lesser
extent, higher average loan balances during the quarter ended March 31, 2004
compared to the quarter ended March 31, 2003.

Net charge-offs declined to $78,000 for the quarter ended March 31, 2004
compared to $339,000 for the quarter ended March 31, 2003.  This trend along
with relative stability in non-performing assets and minimal loan growth
allowed the Company to continue with no provision for loan losses during the
current quarter, unchanged from the year earlier period.

Non-interest income decreased $132,000 or 29.7% to $312,000 for the current
period compared to $444,000 during the year earlier period.  This decline was
primarily due to decreases of $137,000 in net gain on sale of loans and $37,000
in trust and brokerage fees partially offset by an increase in other income of
$50,000.  Mortgage refinancing volume declines led to the decrease in net gain
on sale of loans, while the conversion of trust assets to another financial
institution during the third quarter of 2003 under a revenue sharing agreement
led to the decline in trust and brokerage fees.  Other income increased mainly
due to increases in cash surrender value of life insurance on new bank owned
life insurance ("BOLI") acquired late first quarter 2003 and to a lesser
extent, a decline in the amortization of mortgage servicing rights quarter to
quarter.

Non-interest expense increased $63,000 to $1.4 million for the quarter ended
March 31, 2004 compared to $1.3 million for the quarter ended March 31, 2003. 
This increase came primarily in salaries and employee benefits due to increased
funding on a defined benefit pension plan, increased ESOP expense due to the
Company's current share price, and less deferred loan origination fees due to
lower mortgage volumes.

Net loans receivable increased $1.5 million to $165.2 million at March 31, 2004
compared to $163.7 million at December 31, 2003.  Deposits increased $6.9
million or 5.6% to $128.9 million during the same time frame as all deposit
areas experienced growth.  Borrowed funds declined to $64.1 million at March
31, 2004 from $76.5 million at December 31, 2003 primarily from decreases in
repurchase agreement accounts.

Shareholders' equity was $27.3 million at March 31, 2004 compared to $27.2
million at the prior year end.  The Company announced that it would close out a
previously announced stock repurchase program prior to completion during the
current quarter but also announced the authorization of a new stock repurchase
program.  The new stock repurchase program will enable the Company to
repurchase up to 5% or 74,446 common shares over the next twelve months.  In
the opinion of management, these repurchases help leverage Northeast Indiana
Bancorp's remaining equity and tend to improve return on shareholders' equity.

The book value of NEIB's stock was $18.35 per common share as of March 31,
2004.  The number of outstanding common shares was 1,488,914.  The last
reported trade of the stock on April 15, 2004 was $21.21 per common share.

Northeast Indiana Bancorp, Inc. is headquartered at 648 North Jefferson Street,
Huntington, Indiana.  The company offers a full array of banking, trust, and
financial brokerage services to its customers through three full service
branches located in Huntington, Indiana.  The Company is traded on The NASDAQ
Stock Market under the symbol "NEIB".

This press release may contain forward-looking statements, which are based on
management's current expectations regarding economic, legislative and
regulatory issues.  Factors which may cause future results to vary materially
include, but are not limited to, general economic conditions, changes in
interest rates, loan demand, and competition.  Additional factors include
changes in accounting principles, policies or guidelines; changes in
legislation or regulation; and other economic, competitive, regulatory and
technological factors affecting each company's operations, pricing, products
and services.

              CONSOLIDATED STATEMENT OF FINANCIAL CONDITION


                        ASSETS                       March 31,  December 31,
                                                       2004          2003
  Interest-earning cash and cash equivalents       $3,902,462    $6,849,198
  Noninterest earning cash and cash equivalents     1,874,128     2,483,881
     Total cash and cash equivalents                5,776,590     9,333,079
  Securities available for sale                    40,278,949    43,687,318
  Securities held to maturity estimated market
   value of $60,000 and $150,000 at March 31,
   2004 and December 31, 2003                          60,000       150,000
  Loans held for sale                                 228,350             -
  Loans receivable, net of allowance for loan
   loss March 31, 2004 $1,694,249 and December
   31, 2003 $1,772,109                            165,192,738   163,676,825

  Accrued interest receivable                         779,914       798,722
  Premises and equipment                            2,126,833     2,061,781
  Investments in limited liability partnerships     1,544,340     1,602,147
  Cash surrender value of life insurance            5,005,688     4,352,129
  Other assets                                      1,462,454     1,732,531
      Total Assets                               $222,455,856  $227,394,532

           LIABILITIES AND STOCKHOLDERS' EQUITY
  Deposits                                        128,871,600   122,009,736
  Borrowed Funds                                   64,142,637    76,545,485
  Accrued interest payable and other liabilities    2,115,216     1,644,751
      Total Liabilities                           195,129,453   200,199,972

  Retained earnings - substantially restricted     27,326,403    27,194,560
      Total Liabilities and Shareholders' Equity $222,455,856  $227,394,532



                    CONSOLIDATED STATEMENTS OF INCOME

                                                       Three Months Ended
                                                           March 31,
                                                      2004          2003
  Total interest income                            $3,009,497    $3,234,387
  Total interest expense                            1,434,391     1,740,049
    Net interest income                            $1,575,106    $1,494,338
  Provision for loan losses                                 -             -
    Net interest income after provision for
     Loan losses                                   $1,575,106    $1,494,338
      Service charges on deposit account               84,371        84,535
      Net gain on sale of loans                        28,549       165,574
      Net gain  on sale of repossessed assets           5,690        14,354
      Trust and brokerage fees                         14,924        51,696
      Other income                                    177,947       127,517
  Total noninterest income                           $311,481      $443,676
      Salaries and employee benefits                  746,306       659,752
      Occupancy                                       112,255       123,727
      Data processing                                 164,084       169,085
      Deposit insurance premiums                        4,684         5,154
      Professional fees                                70,648        77,717
      Correspondent bank charges                       53,373        45,937
      Other expense                                   204,588       211,080
  Total noninterest expenses                        1,355,938     1,292,452
    Income before income tax expenses                $530,649      $645,562
  Income tax expenses                                 128,059       164,350
    Net Income                                       $402,590      $481,212



                         SELECTED FINANCIAL DATA

                                                         Three Months Ended
                                                              March 31,
                                                         2004          2003
  Basic Earnings per share                               0.28          0.34
  Dilutive Earnings per share                            0.27          0.33
  Net interest margin                                    3.01%         2.84%
  Return on average assets                               0.73%         0.87%
  Return on average equity                               5.92%         7.23%
  Average shares outstanding- primary               1,445,178     1,432,020
  Average shares outstanding- diluted               1,498,448     1,478,751

  Allowance for loan losses:
     Balance at beginning of period                $1,772,109    $2,135,630
     Charge-offs:
        One-to-four family                                  -        25,954
        Commercial real estate                              -       201,379
        Commercial                                          -       100,488
        Consumer                                      112,191        92,148
           Gross charge-offs                          112,191       419,969
     Recoveries:
        One-to-four family                                  -             -
        Commercial real estate                              -             -
        Commercial                                          -        13,000
        Consumer                                       34,331        67,850
           Gross recoveries                            34,331        80,850
     Net charge-offs                                   77,860       339,119
     Additions charged to operations                        -             -
     Balance at end of period                      $1,694,249    $1,796,511

     Net loan charge-offs to average loans (1)           0.18%         0.85%


  Nonperforming assets (000's)                  At March 31, At December 31,
     Loans:                                              2004          2003
        Non-accrual                                    $2,805        $2,413
        Past 90 days or more and still accruing             -             -
        Troubled debt restructured                          -             -
           Total nonperforming loans                    2,805         2,413
     Real estate owned                                     89           162
     Other repossessed assets                              17             3
           Total nonperforming assets                  $2,911        $2,578

     Nonperforming assets to total assets                1.31%         1.13%
     Nonperforming loans to total loans                  1.68%         1.46%
     Allowance for loan losses to nonperforming loans   60.39%        73.44%
     Allowance for loan losses to net loans receivable   1.02%         1.07%


                                                             At March 31,
                                                         2004          2003

  Stockholders' equity as a % of total assets           12.28%        11.85%
  Book value per share                                 $18.35        $17.93
  Common shares outstanding- EOP                    1,488,914     1,483,909


  (1) Ratios for the three-month periods are annualized.


DATASOURCE: Northeast Indiana Bancorp, Inc.



CONTACT:  Randy J Sizemore, Senior Vice President, CFO of Northeast

Indiana Bancorp, Inc., [phone]



Web site:  http://www.firstfedhuntington.com/ 

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