INB Reports Second Quarter Results
Wednesday, August 06, 2008
The events of the first six months of 2008 have challenged the banking industry. During this period, our bank has shown positive growth in some of our key performance areas; however we have been negatively impacted as well. Because we value you, our shareholder, we want to keep you thoroughly informed of our operating results.
At June 30, 2008, total assets were $131.3 million, increasing $20.8 million, or 19%, from December 31, 2007, and $32.1 million, or 32%, from June 30, 2007. Total gross loans outstanding were $119.6 million, increasing $20.8 million, or 21%, from December 31, 2007, and $33.7 million, or 39%, from June 30, 2007. Total deposits as of June 30, 2008 were $98.3 million, increasing $16.2 million, or 20%, from December 31, 2007, and $23.5 million, or 31%, from June 30, 2007. Growth in core deposits represented $7.6 million of the total $16.2 million growth for the six months. At June 30, 2008, brokered deposits, included in total deposits, were $43.8 million compared to $35.2 million at December 31, 2007.
Operations resulted in a net loss of $110,430 for the quarter ended June 30, 2008 and $272,396 for the six months ended June 30, 2008. Our net loss can be attributed to two primary factors. First, our non-interest expenses increased in the current year due to the opening of a branch on Wade Hampton Boulevard in October 2007. While opening and operating a new office negatively impacts earnings initially, we believe branching is an important part of our corporate strategy if we are to better serve our shareholders and customers, and position ourselves to reach new customers in the community. Our current year results were also impacted by a decrease in net interest margin from 4.05% for the six months ended June 30, 2007 to 2.81% for the six months ended June 30, 2008. This decrease is primarily due to a decrease in yield on earning assets from 7.81% to 6.38% between periods as a result of the significant rate decreases initiated by the Federal Reserve Board during the first half of 2008. This decrease was only slightly offset by a decrease in cost of funds from 4.87% to 4.28% between periods due to the timing of rate adjustments on liabilities. Our variable rate loans adjust immediately; however, our certificates of deposit renew at current market rates only on their maturity dates.
Although the financial services industry in general remains volatile and uncertain, we want to assure you, our shareholders, that we remain focused on the fundamentals that will enable us to maneuver through these challenging times. We have a strong capital base and seek to maintain excellent credit quality, which should keep us positioned for increasing long-term shareholder value. As we look to the remainder of 2008, we believe credit quality and core deposit growth to be critical. Let us assure you that these areas will be our primary focus.
Please visit our investor relations page for the full quarterly report to shareholders.
