24 SEPTEMBER / OCTOBER 2020 Stock Analysis Review as of July 31, 2020 INDIANA BANK & THRIFT STOCK UPDATE The Size, Pricing and Profitability Reports for Indiana Banks and Thrifts as of July 31, June 30 and May 31, 2020, are available by clicking on the icon in the statistics box in HB Digital or by visiting the designated website location. These reports present the stock price changes for the 30 Indiana banks and thrifts that are traded on the NASDAQ and Over-The-Counter markets over the prior two years, one year and year-to-date, in addition to pricing and performance metrics. Selected banks headquartered outside Indiana, four broad market indices, and five bank and thrift indices are also tracked. The U.S. economy continues to struggle as the coronavirus pandemic is delaying or modifying the fall start of in-person education at all levels and challenging businesses to safely reopen. Sporting events, from little leagues to the major leagues, essentially shut down in mid-March and are just now restarting under significantly modified schedules and conditions. The most notable of those conditions is the outright prohibition or severe restriction of fans in the stands. The impact on the travel and leisure industries has been profound and may continue for the foreseeable future. The shift to studying and working remotely may have long-term societal impacts and potentially could lead to a reduced demand for campus and office accommodations. Massive government stimulus and enhanced unemployment compensation programs continue to be rolled out to sustain businesses and consumers. While there is optimism for improved therapies and perhaps even a vaccine for the coronavirus, protracted spending is increasing the national debt to alarming levels. Add to the backdrop civil unrest in numerous major cities, international trade and other political tensions, and an upcoming presidential election … we have a perfect storm for investor uncertainty. The bright spot for investors is the tech-rich NASDAQ, which is up 19.8% year-to-date. The broader S&P 500 is up only 1.3% YTD, and the Dow Jones Industrials are down 7.4% YTD. In stark contrast, bank and thrift stock indices are down an average 32.7% YTD, continuing the sector’s significant underperformance to broader markets that began early this year. Indiana’s NASDAQ banks are down a median of 26.9% YTD, while our OTC/Pink Sheet banks are down a median of 14.5%. Continued net interest margin contraction brought on by low interest rates and asset quality concerns resulting from borrowers’ business interruptions are among the biggest issues for financial institutions. One interesting side effect of extraordinary government payments and economic uncertainty has been the increase in bank deposits. Many financial institutions are seeing significant increases in deposit totals, some over 10% in the second quarter. The most recently completed bank sales included: West End Indiana Bancshares of Richmond selling to Three Rivers Federal Credit Union of Fort Wayne on June 1; and Teachers Credit Union of South Bend buying New Bancorp Inc. of New Buffalo, MI, on June 8. Recent acquisition announcements include: Piper Holdings (Fountain Trust Company) of Covington acquiring SBB Bancshares (State Bank of Burnettsville); Crane Credit Union acquiring Community State Bank of Southwestern Indiana in Poseyville; and Heritage Credit Union acquiring Elberfeld State Bank in Warrick County. HB Michael A. Renninger Principal Renninger & Associates LLC mrenninger@ renningerllc.com Renninger & Associates LLC is a Diamond Associate Member of the Indiana Bankers Association. Securities offered through Ausdal Financial Partners Inc. Member FINRA/SIPC. 5187 Utica Ridge Road, Davenport IA 52807 563-326-2064. Renninger & Associates and Ausdal Financial Partners Inc. are separately owned and operated. Indiana Statistics Click on the hand icon in HB Digital to access statistics through July 31, June 30 and May 31, or visit: indiana.bank/bank-thrift-stockupdate
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