NORTHEAST INDIANA BANCORP

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

CONSOLIDATED STATEMENT OF FINANCIAL CONDITION

ASSETS

December 31, 2013

December  31, 2012

Interest-earning cash and cash equivalents

$

5,476,740

$

16,687,647

Noninterest earning cash and cash equivalents

2,481,418

3,997,988

   Total cash and cash equivalents

7,958,158

20,685,635

Securities available for sale

86,295,635

71,353,159

Interest-earning deposits in financial institutions

7,135,000

5,910,000

Securities held to maturity

1,466,003

1,326,984

Loans held for sale

142,500

1,549,475

Loans receivable, net of allowance for loan loss Dec. 31, 2013 $3,355,534 and Dec. 31, 2012 $3,846,021

150,790,666

154,746,404

Accrued interest receivable

932,105

929,061

Premises and equipment

2,929,520

2,989,226

Investments in limited liability partnerships

-

74,625

Cash surrender value of life insurance

7,497,893

7,261,343

Other assets

3,410,137

4,577,142

    Total Assets

$

268,557,617

$

271,403,054

LIABILITIES AND STOCKHOLDERS' EQUITY

Non-interest bearing deposits

18,196,448

20,123,659

Interest bearing deposits

190,686,051

191,462,228

Borrowed Funds

28,755,460

28,902,484

Accrued interest payable and other liabilities

3,109,814

2,975,529

    Total Liabilities

240,747,773

243,463,900

Retained earnings – substantially restricted

27,809,844

27,939,154

    Total Liabilities and Shareholders' Equity

$

268,557,617

$

271,403,054

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2013

2012

2013

2012

Total interest income

$

2,545,756

$

2,693,418

$

9,820,554

$

11,191,182

Total interest expense

321,798

427,843

1,354,112

2,126,010

    Net interest income

$

2,223,958

$

2,265,575

$

8,466,442

$

9,065,172

Provision for loan losses

450,000

450,000

1,250,000

1,450,000

  Net interest income after provision for loan losses

$

1,773,958

$

1,815,575

$

7,216,442

$

7,615,172

     Service charges on deposit accounts

126,922

139,367

509,473

533,067

     Net gain on sale of securities

208,585

335,118

244,945

335,118

    Net gain on sale of loans

213,808

320,055

952,841

1,012,000

    Net loss on sale of repossessed assets

(97,388)

(79,105)

(82,337)

(164,582)

     Net loss on sale of fixed assets

(7,001)

(1,834)

(7,286)

(1,500)

    Brokerage fees

101,419

96,301

423,125

413,539

    Other income

230,053

187,102

911,640

840,568

Total noninterest income

$

776,398

$

997,004

$

2,952,401

$

2,968,210

     Salaries and employee benefits

883,234

824,361

3,534,070

3,470,312

     Occupancy

265,905

274,555

1,071,202

983,853

     Data processing

192,183

212,772

787,886

832,700

     Deposit insurance premiums

60,000

60,000

240,000

240,000

     Professional fees

140,726

83,223

340,694

361,105

     Correspondent bank charges

29,362

29,262

119,788

117,804

     Other expense

210,755

226,162

860,328

841,075

Total noninterest expenses

$

1,782,165

$

1,710,335

$

6,953,968

$

6,846,849

  Income before income tax expense

$

768,191

$

1,102,244

$

3,214,875

$

3,736,533

Income tax expense

116,155

189,057

737,967

880,067

Net Income

$

652,036

$

913,187

$

2,476,908

$

2,856,466

Three Months Ended December 31,

Twelve Months Ended December 31,

2013

2012

2013

2012

Basic Earnings per common share

0.53

0.74

2.01

2.31

Dilutive Earnings per share

0.53

0.74

2.01

2.31

Net interest margin

3.48%

3.52%

3.36%

3.61%

Return on average assets

0.96%

1.32%

0.92%

1.06%

Return on average equity

9.31%

13.07%

8.85%

10.38%

Efficiency Ratio

59.40%

52.42%

60.90%

56.90%

Average shares outstanding - primary

1,225,561

1,234,380

1,232,212

1,234,253

Average shares outstanding - diluted

1,225,561

1,234,417

1,232,407

1,234,408

Allowance for loan losses:

   Balance at beginning of period

$

3,847,260

$

3,865,907

$

3,846,021

$

4,061,508

   Charge-offs:

      One-to-four family

132,835

1,632

208,021

132,686

      Commercial real estate

902,253

6,421

910,736

188,347

      Land/land development

-

-

145,000

653,451

      Commercial

34,867

424,970

672,258

601,315

      Consumer

68,633

52,922

209,271

192,028

         Gross charge-offs

1,138,588

485,945

2,145,286

1,767,828

   Recoveries:

      One-to-four family

1,285

2,714

6,271

11,549

      Commercial real estate

-

-

72,801

-

      Land/land development

2,500

-

32,500

-

      Commercial

168,123

-

193,971

1,233

      Consumer

24,954

13,345

99,256

89,559

         Gross recoveries

196,862

16,059

404,799

102,341

   Net charge-offs

941,726

469,886

1,740,487

1,665,487

   Additions charged to operations

450,000

450,000

1,250,000

1,450,000

   Balance at end of period

$

3,355,534

$

3,846,021

$

3,355,534

$

3,846,021

   Net loan charge-offs (recoveries) to average loans (1)

0.61%

0.28%

1.14%

0.96%

Nonperforming assets (000's)

At December 31,

At September 30,

At June 30,

At December 31,

   Loans:

2013

2013

2013

2012

      Non-accrual

$

5,443

$

6,461

$

5,553

$

5,464

      Past 90 days or more and still accruing

-

-

-

-

      Troubled debt restructured

1,398

1,379

1,666

3,347

         Total nonperforming loans

6,841

7,840

7,219

8,811

   Real estate owned

508

589

906

1,719

   Other repossessed assets

20

4

-

-

         Total nonperforming assets

$

7,369

$

8,433

$

8,126

$

10,530

   Nonperforming assets to total assets

2.74%

3.10%

2.99%

3.88%

   Nonperforming loans to total loans

4.44%

5.26%

4.92%

5.56%

   Allowance for loan losses to nonperforming loans

49.06%

49.07%

51.51%

43.65%

   Allowance for loan losses to total receivable

2.23%

2.58%

2.53%

2.49%

At December 31,

2013

2012

Stockholders' equity as a % of total assets

10.36%

10.30%

Book value per share

$

22.65

$

22.53

Common shares outstanding- EOP

1,227,946

1,239,946

(1) Ratios for the three-month periods are annualized.