44 JANUARY / FEBRUARY 2023 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. 30, 2022, or visit: indiana.bank/bank-thriftstock-update. The Size, Pricing and Profitability Reports for Indiana Banks and Thrifts as of Nov. 30, Oct. 31 and Sept. 30, 2022, 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 15.3% YTD, and the bank indices declined an average of 13.9% YTD as of Nov. 30, 2022. In comparison, Indiana’s NASDAQ-traded banks are down a median of 15.0% YTD, while Indiana’s OTC/Pink Sheet-listed banks are down 11.8% YTD. Despite the current year (2022) performance, the broad and bank indices are up an average of 8.2% and 24.2% respectively over the two-year time horizon. Indiana’s NASDAQ-traded banks are up a median of 20.7%, and Indiana’s OTC/Pink Sheet-listed banks are up 13.7% over the same period. Indiana’s NASDAQ-listed banks are trading at a median multiple of 160.3% of tangible book value and 9.8 times earnings, and OTC/Pink Sheet-listed banks are trading at a median multiple of 134.1% of tangible book value and 8.3 times earnings as of Nov. 30, 2022. In comparison, the six selected banks headquartered outside Indiana with assets over $100 billion are trading at a median multiple of 238.9% of tangible book value and 11.5 times LTM earnings, while the eight selected banks headquartered outside Indiana with assets under $100 billion are trading at a median multiple of 188.1% StockAnalysis Review as of Nov. 30, 2022 of tangible book value and 12.0 times LTM earnings as of Nov. 30, 2022. Bank stock price-to-tangible book value multiples at Nov. 30, 2022, are up significantly compared to the prior year, indicating that tangible book values have declined more than the stock price declines noted above. While banks are reporting generally strong earnings and paying consistent dividends, tangible book values are being negatively impacted by increased unrealized losses on available-for-sale (AFS) investments. Many banks had unrealized gains in their AFS portfolios a year ago, but aggressive interest rate increases by the Federal Reserve over the last year have resulted in significant unrealized losses. Strong economic headwinds are contributing to continued stock and bond market volatility. There is a hopeful expectation that inflation will slow and that the pace and size of Federal Reserve interest rate increases will abate. There is considerable debate of the anticipated depth, breadth and length of an imminent recession. In the meantime, banks are enjoying improved net interest margins and robust non-mortgage loan growth, and good asset quality. Earnings improvement is being held back, however, by reduced mortgage loan origination and gain on sale income, deposit and other fee income, and increased staffing and other operating costs. HB INDIANA BANK & THRIFT STOCK UPDATE
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