28 NOVEMBER / DECEMBER 2021 FEATURE Stock Analysis Review as of Sept. 30, 2021 INDIANA BANK & THRIFT STOCK UPDATE 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 Sept. 30, Aug. 31 and July, 31, 2021, or visit: indiana.bank/bank-thriftstock-update The Size, Pricing and Profitability Reports for Indiana Banks and Thrifts as of Sept. 30, Aug. 31 and July 31, 2021, are available by clicking on the icon on this page 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 four bank and thrift indices are also tracked. The broad indices improved an average of 13.2% YTD, and the bank indices improved an average of 31.4% YTD. While the four broad indices continue to set fresh all-time highs over the last two months, the bank indices have not yet eclipsed the highs set earlier this year. In comparison, Indiana’s NASDAQ-traded banks are up a median of 15.0% YTD, and Indiana’s OTC/Pink Sheet-listed banks are up a median of 15.3% YTD. Indiana’s NASDAQ-listed banks are trading at a median multiple of 146.8% of tangible book value, and OTC/Pink Sheet-listed banks are trading at a median multiple of 102.6% of tangible book value as of Sept. 30, 2021. While these median multiples are much improved from the depths of the pandemic in July 2020 – when median book value multiples were 113.3% and 91.2% of tangible book value respectively – Indiana’s NASDAQ-listed and OTC/Pink Sheet-listed banks have not recovered from the pre-pandemic median levels of 181.5% and 110.2% of book value, respectively, on Dec. 31, 2019. While the overall economy is struggling with labor shortages and supply chain disruptions, banks are generally experiencing thin net interest margins and are challenged to deploy surprisingly sticky deposit growth resulting largely from pandemic-related government assistance programs. Indiana’s NASDAQ-traded banks have a median net interest margin of 3.21% and a median loan/deposit ratio of 76% as of June 30, 2021. This compares to a pre-pandemic median margin of 3.64% and a median loan/deposit ratio of 91% as of Dec. 31, 2019. As for mergers and acquisitions, German American Bancorp (Jasper) announced on Sept. 20, 2021, that it will acquire Shelbyville, KY-based Citizens Union Bancorp ($1.1BM in assets) for $154M in stock and cash. The price represents 156% of tangible book value and 14.1 times LTM earnings. This transaction represents the further continuation of a trend in which Indiana’s larger banks are acquiring substantial banking assets in surrounding states. First Financial Corporation (Terre Haute) announced that it will acquire Hawesville, KY-based Hancock Bancorp Inc. ($344M in assets) for $31.4M in cash on Aug. 10. Old National announced a 56%/44% merger of equals transaction with Chicago-based First Midwest Bancorp ($21B in assets) on June 1. In addition, Horizon Bancorp completed on Sept. 20 the acquisition of 14 Michigan branches which were required by regulators to be divested by Huntington Bancshares to gain approval of its acquisition of TCF Financial. HB
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