Recent Fintech Initiatives Yielding Loan & Deposit Activity
NASHVILLE, Tenn., Nov. 10, 2020 /PRNewswire/ -- Inscorp, Inc., parent company of INSBANK, today reported 3rd quarter earnings of $343,000 or $0.11 per share. Quarterly earnings for the Nashville-based lender were down $783,000, or $0.27 per share, versus those of the same period the prior year. Contributing to this decline, the bank added $750,000 to its provision for loan loss reserves during the quarter, compared to $125,000 in the same period the prior year. A decline in net interest margin, primarily due to a full quarter of Paycheck Protection Program loans yielding 1%, also contributed to reduced operating earnings. Year-to-date earnings totaled $1,624,000, or $0.55 per share.
"Pandemic effects remain the financial story of the last couple quarters, with margin having declined and loan loss reserves being built up," said Jim Rieniets, President & CEO of INSBANK. "Fortunately, our deposit portfolio is steadily repricing downward and loan yields are stabilizing, so we expect margin to improve in the near term. While we expect to continue growth of our loan loss reserve, loan deferments and modifications actually decreased during the quarter and portfolio stress testing gives us confidence in moving ahead with our organic growth plans," Rieniets continued.
Previously announced fintech initiatives, INSBANK Online and Medquity, both became operational during the quarter. INSBANK Online is a fully-digital deposit platform available to depositors in Nashville and beyond. The bank began gathering new deposits thru this channel, which it promotes as providing a virtual private client experience with a dedicated service team. Medquity's web-based medical student loan refinance program also went live during the quarter and the bank made its first loans thru the automated platform.
"We're really excited about our fintech ventures, both of which address long-term strategic needs for a community bank in a rapidly changing world. While these convenience and technology-driven platforms are niche business lines today, they will likely expand over time and become a bigger part of our core operations," said Jim Rieniets, President & CEO of INSBANK.
Highlights of the quarter included:
Yield on loans was 4.16% for the three months ended September 30, 2020 compared to 5.50% for the same period in 2019.
Cost of all interest-bearing funding was 1.51% for the three months ended September 30, 2020 decreasing from 2.18% for the same period in 2019.
Efficiency ratio was 60.3% at September 30, 2020, comparing favorably to the bank's FDIC peer group average of 62.4%.
Non-Interest Expense to Total Assets was 1.74% for the nine months ended September 30, 2020, slightly lower than 1.87% for the same period in 2019 and compared favorably to the bank's FDIC peer group average of 2.59%.
Assets per employee remained strong at $12.97 million, compared to the FDIC peer group of $6.28 million.
Annualized net charge-offs to average loans were 0.06% for the nine months ended September 30, 2020 compared to 0.04% for the same period in 2019.
The allowance for loan and lease losses was 1.40%, slightly higher than the bank's FDIC peer group average of 1.29%.
Annualized return on tangible common equity for the third quarter was 4.35%
Tangible book value increased $0.13 to $16.98 during the quarter primarily by virtue of retained earnings.
The bank's tier 1 capital ratio was 12.7%, while total risk-based capital was 14.0%
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 and Medquity are both divisions of INSBANK. TMA Medical Banking provides banking services to members of the Tennessee Medical Association, while Medquity offers healthcare banking solutions to individuals beyond the scope of Tennessee, whether they are still in residency, practicing or entering retirement. 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.
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