Indian Village Bancorp, Inc. Announces Fourth Quarter and Year End 1999 Earnings

Business Wire, March 6, 2000

Business Editors

GNADENHUTTEN, Ohio--(BUSINESS WIRE)--March 6, 2000

Indian Village Bancorp, Inc. (OTCBB:IDVB), the holding company for Indian Village Community Bank, today reported results for the three months and year ended December 31, 1999. The Bank converted from the mutual to the stock form of organization on July 1, 1999.

Net income for the three months ended December 31, 1999 totaled $10,000 compared to net income of $26,000 for the same period in 1998, a decrease of $16,000, or 61.5%. Net income for the year ended December 31, 1999 was $288,000 compared to $246,000 for the year ended December 31, 1998, an increase of $42,000, or 17.1%. The increase in net income for year ended December 31, 1999 as compared to the same period in 1998 was primarily attributable to an increase in net interest income associated with growth in the Bank's loan and securities portfolio, a decrease in the provision for loan losses associated with an improvement in overall credit quality, partially offset by an increase in noninterest expense. The decrease in net income for the three months ended December 31, 1999 compared to the same period in 1998 was primarily due to increased non-interest expense, partially offset by an increase in net interest income and a decrease in the provision for loan losses. Earnings per share for the three months ended December 31,1999 was $0.02. Cumulative earnings per share since converting to a stock company on July 1, 1999 was $0.31. Earnings per share is not applicable for the three months and year ended December 31, 1998, because prior to July 1, 1999, the Bank was a mutual institution.

Net interest income after the provision for loan losses for the fourth quarter of 1999 totaled $473,000 as compared to $294,000 for the same period in 1998, an increase of $179,000, or 60.9%. Net interest income after the provision for loan losses for the year ended December 31, 1999 totaled $1.6 million as compared to $1.3 million for the same period in 1998, an increase of $330,000, or 25.5%. Total interest income was $1.1 million for the three months ended December 31, 1999, a $313,000 increase from the same three month period in 1998. Total interest income for the year ended December 31, 1999 was $3.6 million, a $592,000, or 19.6% increase from the same period in 1998. Interest expense for the three months ended December 31, 1999 was $596,000, a $167,000 increase from the same period one year prior. Interest expense for the year ended December 31, 1999 totaled $2.0 million, a $308,000 increase from the same period in 1998. The increase in interest income and interest expense for the three month and one year periods is primarily attributable to the growth in the Bank's loan and securities portfolio, primarily funded by borrowings from the FHLB, deposit increases associated with the recent opening of a New Philadelphia branch office and stock conversion proceeds.

Non-interest income for the fourth quarter of 1999 was $9,000 less than the fourth quarter of 1998. For the year ended December 31, 1999 non-interest income was $42,000, an increase of $13,000 from the same period in 1998.

Non-interest expense for the fourth quarter of 1999 was $432,000, compared to $276,000 in the fourth quarter in 1998, an increase of $156,000, or 56.5%. Non-interest expense for the year ended December 31, 1999 was $1.2 million, compared to $950,000 for the same period in 1998, an increase of $247,000, or 26.0%. The primary factors contributing to the increase in non-interest expense in both respective comparative periods was increased staffing and advertising expense due to the opening of a full-service branch in New Philadelphia, Ohio during the fourth quarter of 1999 and several new loan product introductions, as well as the expense associated with the curtailment of the Company's pension plan. The curtailment expense was $68,000, incurred at the time the decision was made to terminate the current defined pension plan. The Company expects to incur an additional expense of approximately $80,000, in the second quarter of 2000, associated with the under funding of the terminated pension plan. The increases were further attributable to increased costs resulting from additional regulatory reporting related to being a publicly traded, stock company.

At December 31, 1999 total assets were $59.4 million compared to $40.0 million at December 31, 1998, an increase of $19.4 million, or 48.3%. Net loans receivable increased to $37.3 million at December 31, 1999 from $31.3 million at December 31, 1998, an increase of $6.0 million, or 19.2%. Deposits increased to $33.2 million at December 31, 1999 from $30.9 million at December 31, 1998. Borrowings from the FHLB totaled $17.2 million at December 31, 1999, compared to $4.0 million at December 31, 1998, an increase of $13.2 million, or 330.0%. The increased FHLB borrowings were primarily used to fund loan growth and securities investments.

Non-performing assets, consisting of $131,000 in repossessed assets and real estate owned and $337,000 in loans on nonaccrual, totaled $468,000 at December 31, 1999, or 0.8% of total assets, an increase of $14,000 from December 31, 1998. The allowance for loan losses totaled $232,000 at December 31, 1999, representing 68.8% of loans on nonaccrual and 0.6% of gross loans receivable. At December 31, 1998 the allowance for loan losses totaled $218,000 and represented 66.5% of loans on nonaccrual and 0.7% of gross loans receivable.