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INDIANA FEDERAL CORPORATION REPORTS RECORD THIRD QUARTER AND YEAR TO DATE NET INCOME AND ANNOUNCES REGULAR QUARTERLY DIVIDEND

 VALPARAISO, Ind., Oct. 25 /PRNewswire/ -- Indiana Federal Corporation, parent company of Indiana Federal Bank for Savings, today reported a 45 percent increase in net income to a record $2.5 million, or $.75 per share, for the third quarter ended Sept. 30, 1993 compared to net income of $1.7 million or $.52 per share for the same period in 1992. Included in net income for the three months ended Sept. 30, 1993 was the previously announced favorable resolution of an Internal Revenue Service (IRS) refund claim which added after tax approximately $750,000 or $.23 per share. Also, net income for the three months ended Sept. 30, 1992 included a non-recurring after tax gain of $285,000 or $.09 per share on the sale of mortgage-backed securities.
 Net income for the nine months ended Sept. 30, 1993 increased by 20 percent to $5.7 million or $1.75 per share compared to net income of $4.8 million or $1.46 per share for the same period last year. Included in net income for the nine months ended Sept. 30, 1992 was an adjustment of $250,000 or $.08 per share for the cumulative effect of changing to a different method of accounting for income taxes.
 On Oct. 21, 1993 the board of directors declared a quarterly cash dividend of $.20 per share to be paid Nov. 30, 1993 to shareholders of record as of Nov. 15, 1993.
 Peter R. Candela, president and chief executive officer said, "Improving asset quality, continued strong net interest margins and record mortgage loan production all contributed to our record results."
 Non-performing assets declined substantially to $9.2 million or 1.42 percent of total assets at Sept. 30, 1993 from $14.3 million or 2.38 percent of total assets at Dec. 31, 1992. Subsequent to Sept. 30, 1993 an income producing real estate owned property with a book value of $1.7 million was sold for approximately $200,000 above carrying value. Allowance for loan losses increased to $4.8 million or 1.17 percent of net loans receivable at Sept. 30, 1993 from $4.4 million or 1.11 percent of net loans receivable at Dec. 31, 1992.
 For the quarter ended Sept. 30, 1993, net interest income after provision for loan losses, the company's core business was $5.5 million or a 21.1 percent increase from $4.5 million recorded for the same period in 1992. Included in net interest income for the three months ended Sept. 30, 1993 was interest income of $378,000 received from the IRS on the previously mentioned resolution of a refund claim. Net interest income after provision for loan losses for the nine month period ended Sept. 30, 1993 increased by 13.4 percent or $15.5 million from $13.6 million for the same period last year. The net interest margin (net interest income divided by average interest earning assets) for the nine months ended Sept. 30, 1993 was 3.51 percent compared to 3.57 percent for the same period last year.
 Excluding gains and losses on the sale of assets, other income increased to $941,000 for the three months ended Sept. 30, 1993 from $792,000 for the same period last year. For the nine months ended Sept. 30, 1993 other income when excluding gains and losses on the sale of assets totaled $2.7 million compared to $2.3 million for the same period last year.
 Operating expenses increased by 12.8 percent to $3.5 million for the three month period ended Sept. 30, 1993 from $3.1 million for the same period last year. For the nine months ended Sept. 30, 1993 operating expenses increased by 12 percent to $10.1 million from $9 million for the same period last year. The increase in operating expenses was primarily due to the opening of our Highland/Munster full-service banking center, the addition of our commercial banking division, increased marketing expenses and to normal salary increases.
 Shareholders' equity increased to $63.6 million or $20.07 per share at Sept. 30, 1993 compared to $18.98 per share at year end 1992. The return on average shareholders' equity increased to 12.03 percent for the nine months ended Sept. 30, 1993 compared to 11.05 percent for the same period last year.
 Indiana Federal Corporation, a $650 million Savings Bank Holding Company, maintains a network of nine full service offices in northwest Indiana and loan production offices in Valparaiso, Highland and South Bend, Ind. through its wholly-owned subsidiary Indiana Federal Bank for Savings. Indiana Federal Corporation shares are traded on the NASDAQ National Market System under the symbol IFSL.
 INDIANA FEDERAL CORPORATION
 Selected Financial Data
 ($ in thousands except per data share)
 Three months ended Nine Months ended
 Sept. 30 Sept. 30
 1993 1992 1993 1992
 Net income before cumulative
 effect of a change in
 accounting principles $2,458 1,695 5,732 4,515
 Cumulative effect of changing
 methods of accounting
 for Income Taxes -- -- -- 250
 Net income after
 cumulative adjustment 2,458 1,695 5,732 4,765
 Earnings per share before
 cumulative effect of a change
 in accounting principles .75 .52 1.75 1.38
 Cumulative effect per share
 of changing methods of
 accounting for Income Taxes -- -- -- .08
 Earning per share after
 cumulative adjustment .75 .52 1.75 1.46
 Cash dividends per share .20 .15 .60 .45
 Weighted average number of
 shares outstanding (000s) 3,167 3,167 3,166 3,181
 Sept. Dec. Sept.
 30, 31, 30,
 1993 1992 1992
 Assets 650,700 602,400 607,200
 Net loans 410,500 397,300 390,000
 Investment securities 50,700 60,500 71,900
 Mortgage backed securities 133,400 93,300 90,000
 Deposits 428,100 416,100 418,800
 FHLB advances & other
 Borrowings 152,500 121,300 121,900
 Shareholders' equity 63,600 59,800 58,800
 Return on average assets 1.17 pct 1.08 pct 1.12 pct
 Return on average equity 12.03 pct 10.78 pct 11.05 pct
 Equity to assets ratio 9.78 pct 9.93 pct 9.69 pct
 Reserves to loans
 receivable ratio 1.17 pct 1.11 pct 1.02 pct
 Non-performing assets to
 total assets ratio 1.42 pct 2.38 pct 2.45 pct
 Book value per common share $20.07 $18.98 $18.68
 Shares outstanding, net of
 treasury stock (000s) 3,170 3,152 3,149
 Net interest margin 3.51 pct 3.65 pct 3.57 pct
 -0- 10/25/93
 /CONTACT: Peter R. Candela, President/CEO of Indiana Federal, 219-462-4131/
 (IFSL)


CO: Indiana Federal Corporation ST: Indiana IN: FIN SU: ERN

LG -- NY020 -- 6121 10/25/93 08:22 EDT
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Date:Oct 25, 1993
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