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Indiana Business Bancorp Reports Third Quarter Growth and Results of Operations

^{Published on 2008-12-31 08:35:48, Last Modified on 2008-12-31 08:37:08 - Market Wire}
 

INDIANAPOLIS--([ BUSINESS WIRE ])--Indiana Business Bancorp (OTCBB:IBBI), the holding company for Indiana Business Bank, announced results for the nine months ended September 30, 2008.

The net loss for the quarter was ($476,582) compared to a loss of ($2,763) reported for the same period in 2007. The Bank has recorded a year to date loss of ($625,831) compared to a profit of $17,990 for the nine months ending September 30, 2007. The year to date loss is a result of the repossession and subsequent $627,000 write down of two separate real estate properties - an owner occupied retail facility and a multi-family housing project. The Bank is currently carrying these assets as "other real estate owned" (OREO) at a combined value of $1,200,000.

Net interest income for the third quarter of 2008 was $717,726, an 11% increase from the third quarter of 2007. The increase is attributed to growth in the loan and investment portfolios. Non-interest income, comprised of service charges on deposits and other fee income, totaled $57,525 for the quarter ended September 30, 2008, a small increase from the same quarter a year ago. The Bank maintains an allowance for loan losses of 1.42% of loans outstanding.

Non-interest expenses (generally salaries and other operating expenses) increased by 9%, year over year, from $648,870 during the third quarter of 2007 to $707,107 for the most recent quarter, due primarily to increased staffing levels.

Assets increased almost 17% during the first nine months of 2008 from $79,883,251 at year end 2007 to $93,184,501 at September 30, 2008. Deposit growth and Federal Home Loan Bank advances funded asset growth. The Bank increased its use of long term advances because of the lower cost versus other funding alternatives.

At September 30, 2008, gross loans totaled $78,511,975 up from $67,504,846 at December 31, 2007. Deposits totaled $73,956,531 up from $64,892,600 at December 31, 2007. The Bank's ratios exceeded regulatory guidelines for "well capitalized institutions" at September 30, 2008.

President and CEO, James S. Young stated, "while we are disappointed to take back two real estate properties this year, events like this are to be expected during these difficult economic times. We will work hard and smart to upgrade and market these properties as well as pursue our legal avenues in an effort to recover as much of our loss as possible."

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.

"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; 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.