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Indiana Business Bancorp Slips To Loss In Q2 On Higher Provisions - Quick Facts

(RTTNews) - Indiana Business Bancorp (IBBI.OB), the holding company for Indiana Business Bank, Friday reported a loss for the second quarter compared to a profit last year, hurt primarily by a much higher provision expense as well as lower interest income.

Net loss for the quarter was $484.68 thousand or $0.32 per share compared to a net income of $37.91 thousand or $0.03 per share last year.

Net interest income for the quarter decreased 9.7% to $732.24 thousand from $803.07 thousand in the comparable quarter a year ago.

Provision for loan losses increased sharply to $706.25 thousand from $40 thousand in the previous year's second quarter. The company said that the higher provisions were primarily related to a single commercial real estate borrowing relationship that was restructured.

The underlying real estate was reappraised in June at a value substantially less than the original appraised value obtained in 2006. As a result, the book value of the restructured loan was written down to reflect the current appraised value of the real estate, underlying cash flows, and general market conditions, the company added.

Noninterest income rose to $166 thousand from $72.56 thousand a year ago.