Hoosier Banker 45 The Size, Pricing and Profitability Reports for Indiana Banks and Thrifts as of Nov. 30, Oct. 31 and Sept. 30, 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 18.6% YTD, and the bank indices improved an average of 31.4% YTD as of Nov. 30, 2021. In comparison, Indiana’s NASDAQ-traded banks are up a median of 18.3% YTD, and Indiana’s OTC/Pink Sheet-listed banks are up a median of 20.0% YTD. Indiana’s NASDAQ-listed banks are trading at a median multiple of 143.9% of tangible book value, and OTC/Pink Sheet-listed banks are trading at a median multiple of 105.8% of tangible book value as of Nov. 30, 2021. The overall economy continues to struggle with labor shortages and supply chain disruptions, and there are heightened concerns that COVID-19 variants, travel constraints, and international trade and military conflicts may cause further economic challenges and stock volatility. To combat high inflation that is no longer deemed transitory, the Federal Reserve plans to speed up its announced bond tapering program and is expected to raise interest rates at least a couple of times in 2022. While rising interest rates generally benefit the banking industry, loan demand might be muted, exacerbating already low loan-to-deposit ratios. Indiana’s NASDAQ-traded banks have a median net interest margin of 3.26% and a median loan/deposit ratio of 73.2% as of Sept. 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, First Merchants Corporation (Muncie) announced on Nov. 4, 2021, that it will acquire Farmington Hills, MI-based Level One Bancorp ($2.5B in assets) for $323.5M in stock and cash. The price represents 183.3% of tangible book value and 10.0 times LTM earnings. Strategically, this acquisition is a logical geographic expansion within Michigan, generally, and into the greater Detroit area more specifically. First Internet Bancorp (Fishers) announced on Nov. 2, 2021, that it will acquire Roswell, GA-based First Century Bancorp ($408M in assets) for $80M in cash. The price represents 148% of tangible book value and 9.8 times LTM earnings. First Century is a nontraditional bank with technology enabled, fee generating services that complement First Internet’s digital strategy. Both of these transactions represent the further continuation of a trend in which Indiana’s larger banks are acquiring substantial banking assets in other states, primarily Illinois, Michigan and Kentucky. In other news, Merchants Bancorp (Carmel) became the third Indiana-based bank to exceed $10B in assets as of Sept. 30, 2021. HB StockAnalysis Review as of Nov. 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 Nov. 30, Oct. 31 and Sept. 20, 2021, or visit: indiana.bank/bank-thriftstock-update
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