40 MARCH / APRIL 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 Jan. 31, 2023, and Dec. 31 and Nov. 30, 2022, or visit: indiana.bank/ bank-thrift-stock-update. StockAnalysis Review as of Jan. 31, 2023 INDIANA BANK & THRIFT STOCK UPDATE The Size, Pricing and Profitability Reports for Indiana Banks and Thrifts as of Jan. 31, 2023, Dec. 31 and Nov. 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 increased an average of 6.6% in January 2023 after being down an average of 20.5% in all of 2022. The bank indices increased an average of 8.3% in January after being down an average of 20.1% in all of 2022. In comparison, Indiana’s NASDAQ-traded banks increased a median of 1.4% in January 2023 after being down an average of 18.9% in all of 2022. Indiana’s OTC/Pink Sheet-listed banks increased 0.4% in January after being down an average of 13.3% in all of 2022. Despite the positive January performance, the broad and bank indices are down an average of 10.3% and 14.7%, respectively, over the one-year time horizon. Indiana’s NASDAQ-traded banks are down a median of 11.5%, and Indiana’s OTC/Pink Sheet-listed banks are down 11.6% over the same period. Indiana’s NASDAQ-listed banks are trading at a median multiple of 150.0% of tangible book value and 10.2 times earnings, and OTC/Pink Sheet-listed banks are trading at a median multiple of 121.9% of tangible book value and 8.2 times earnings as of Jan. 31. In comparison, the six selected banks headquartered outside Indiana with assets over $100 billion are trading at a median multiple of 227.8% of tangible book value and 10.7 times LTM earnings, while the eight selected banks headquartered outside Indiana with assets under $100 billion are trading at a median multiple of 184.3% of tangible book value and 11.2 times LTM earnings as of Jan. 31. On balance, banks reported strong fourth quarter and annual earnings in 2022 based on improved net interest margins and robust non-mortgage loan growth (net of PPP loans), and good asset quality. Earnings improvement continues to be held back, however, by reduced mortgage loan origination and gain on sale income, reduced deposit and other fee income, and increased staffing and other operating costs. The Federal Reserve continues to raise interest rates, albeit at a slower pace compared to previous quarters, and is seeing some success in slowing inflation. While unemployment rates are near all-time lows, more layoffs are being reported as businesses prepare for a slower economy in 2023. There is anticipation of increased pressure on asset quality, so banks are tending to increase provisions for loan losses. Deposit competition is expected to increase interest costs and ultimately result in decreased net interest margins. This is all happening with the backdrop of strong economic headwinds and heightened geopolitical upheaval. HB
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