22 MARCH / APRIL 2022 StockAnalysis Review as of Jan. 31, 2022 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 Jan. 31, 2022, and Dec. 31 and Nov. 30 of 2021 or visit: indiana. bank/bank-thrift-stock-update The Size, Pricing and Profitability Reports for Indiana Banks and Thrifts as of Jan. 31, 2022, Dec. 31 and Nov. 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 29 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 declined an average of 5.9% YTD, and the bank indices improved an average of 1.4% YTD as of Jan. 31, 2022. In comparison, Indiana’s NASDAQ-traded banks are up a median of 1.0% YTD, and Indiana’s OTC/Pink Sheet-listed banks are even YTD. Indiana’s NASDAQ-listed banks are trading at a median multiple of 152.5% of tangible book value, and OTC/Pink Sheet-listed banks are trading at a median multiple of 108.6% of tangible book value as of Jan. 31, 2022. It has now been two years since the onset of the COVID-19 pandemic. After the initial market crash of over 30% in the first quarter of 2020, the market largely recovered by the end of the following calendar quarter. The market then took a positive trajectory into November 2021. Since then, the broad indices have experienced significant volatility due to a number of factors, perhaps the most significant being rapid inflation. Contributing factors include COVID-related government stimulus, supply chain disruptions, labor shortages driving up wages, and spiking fuel prices caused in part by supply concerns brought on by potential international military conflicts. To combat inflation, the Federal Reserve will begin to tighten the money supply and has announced intentions to increase interest rates several times in 2022. Banks generally stand to benefit from rising interest rates, and there appear to be more lending opportunities as the economy continues to fully reopen. Asset quality remains relatively high, and many banks are reporting record 2021 earnings, due in part to relatively small-to-negative loan loss provisions. Other trends include declining noninterest income (as banks reduce NSF and overdraft fees) and increasing noninterest expense. Banks are actively working to emphasize digital service offerings and reassessing brick-andmortar branches (which is likely to lead to more branch closures and consolidations). As for mergers and acquisitions, two Indiana banks have completed their previously announced acquisitions of Chicago-based banks. Finward Bancorp (Munster) completed its acquisition of Royal Financial Inc. on Jan. 31, 2022. The combined company has $2.2 billion in assets. Old National Bancorp completed its mergerof-equals transaction with First Midwest Bancorp on Feb. 17, 2022. The combined company has assets of $46 billion and is the sixth largest commercial bank headquartered in the Midwest. HB
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