Northeast Indiana Bancorp, Inc. Announces First Quarter Earnings

Share Name	Share Symbol	Market	Type
Northeast Indiana Bancorp (MM)	NASDAQ:NEIB	NASDAQ	Common Stock

Northeast Indiana Bancorp (NASDAQ:NEIB)
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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., +1-260-358-4680 Web site: http://www.firstfedhuntington.com/

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NEIB Northeast Indiana Bancorp (MM)