EVANSVILLE, Ind. - s4story -- First Bancorp of Indiana, Inc. (OTCPK:FBPI), the holding company (the "Company") for First Federal Savings Bank (the "Bank"), reported earnings of $487,000 ($0.29 per diluted common share) for the fourth fiscal quarter ended June 30, 2026, compared to $241,000 ($0.14 per diluted common share) for the same quarter a year ago. Likewise, earnings for the fiscal year ended June 30, 2026, totaled $1.82 million ($1.07 per diluted common share), compared to $1.17 million ($0.69 per diluted common share) last fiscal year. Annual earnings equate to a return on average assets ("ROAA") of 0.31% and a return on average equity ("ROAE") of 5.02%. This compares to an annualized ROAA of 0.19% and an annualized ROAE of 3.55% for the prior fiscal year.

"The Company ended the fiscal year with improved earnings, stronger stockholders' equity, and increased tangible book value per share," stated Michael H. Head, President and CEO. "These results reflect steady execution by our employees and our continued focus on prudent capital management, sound credit quality, and long-term shareholder value."

Net interest income improved for the quarter ended June 30, 2026, as management's focus on reducing funding costs more than offset lower interest income from loans and investments. The Company's net interest margin ("NIM"), measured as a percentage of average interest-earning assets, was 3.12% for the quarter ended June 30, 2026, an improvement from 2.68% as reported for the same timeframe last year. Noninterest income increased during the most recent quarter, driven by improved service charges and higher interchange income. Noninterest expense also rose, primarily due to higher compensation costs and increased advertising related to a deposit acquisition initiative.

Trends for the full fiscal year largely mirrored the quarterly activity. The Company's net interest margin expanded to 2.96% for the fiscal year ended June 30, 2026, as lower interest income was more than offset by reduced interest expense. Noninterest income improved during the fiscal year due to higher service charges, increased loan sale income, and proceeds from a life insurance claim. The 4.4% year-over-year increase in noninterest expense was primarily attributable to higher compensation expense, reflecting annual merit increases, and advertising costs associated with a deposit acquisition initiative. These increases were partially offset by lower deposit insurance expense and reduced data processing costs.

The securities portfolio, which is primarily composed of investment-grade municipal bonds or obligations of U.S. government agencies, totaled $87.1 million on June 30, 2026, little changed since the beginning of the fiscal year.

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Net loans outstanding totaled $424.1 million at June 30, 2026, a decrease of $22.2 million during the fiscal year, partially due to the repayment of a seasonal commercial loan relationship. Commercial loan production increased to $48.6 million for the fiscal year, including one $1.5 million SBA-backed loan. Single-family mortgage loan production, primarily originated for sale to FNMA or the Federal Home Loan Bank, totaled $20.7 million during the same timeframe. Construction lending represented 6.6% of this activity. Consumer lending originations, which included auto loans, personal loans, and home equity loans and lines of credit, totaled $17.5 million.

No provision for credit losses on loans was recorded in the twelve months ended June 30, 2026 or 2025. Net loan recoveries totaled $30,300 this fiscal year, compared to $334,000 of charge offs for the prior fiscal year. The ratio of nonperforming loans 90 days or more delinquent to total loans was 0.24% on June 30, 2026, compared to 0.42% a year ago, primarily reflecting improvement in two larger commercial relationships.

Overall, the Allowance for Credit Losses, including reserves for investment securities and unfunded commitments, stood at $5.34 million at June 30, 2026, compared to $5.31 million on June 30, 2025. The portion of the allowance attributed to the loan portfolio represented 1.18% of at-risk loans on June 30, 2026, compared to 1.13% last year. Management considers the allowance sufficient under current conditions but acknowledges that ongoing economic uncertainty and elevated inflation – characteristics of the current economic cycle – could negatively impact the credit quality of the loan portfolio. In response, management continues to closely monitor borrowers most affected by these challenges and stands ready to adjust the allowance as needed to address emerging risks.

Deposit accounts, totaling $469.1 million on June 30, 2026, declined by $19.3 million since the beginning of the fiscal year. During the year, growth in core local deposits and public funds accounts have supported the Bank's liquidity position and allowed management to reduce reliance on higher-cost wholesale funding, including the retirement of $66.0 million of brokered deposits. Local deposit rates have moderated in recent months, resulting in the cost of deposits totaling 2.28% for the current quarter compared to 2.63% for the same quarter last fiscal year. Similarly, the Company's total cost of funds, including FHLB advances and debt of the holding company, totaled 2.46% for the quarter, compared to 2.75% for the quarter ended June 30, 2025.

As a part of the Bank's liquidity management plan, diversified contingency funding sources are maintained, and liquidity stress tests are used to assess adequacy. On June 30, 2026, First Federal Savings Bank had unused lines of credit totaling $25.0 million available at correspondent financial institutions. Additional secured borrowing capacity is accessible from the Federal Reserve Bank's discount window ($21.8 million) and the Federal Home Loan Bank ($113.1 million).

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Stockholders' equity totaled $38.0 million on June 30, 2026, compared with $33.3 million at June 30, 2025. The year-over-year increase primarily reflected earnings for the fiscal year and a decrease in the unrealized loss on the Bank's available-for-sale securities portfolio. Based on the 1,707,291 outstanding common shares on June 30, 2026, the tangible book value per share of FBPI stock was $18.61, compared to $15.95 on June 30, 2025.

On June 30, 2026, First Federal Savings Bank's Community Bank Leverage Ratio ("CBLR") improved to 9.54%. Comparatively, the Bank's Tier 1 Leverage ratio was 8.95% one year ago.

This press release may contain statements that are forward-looking, as that term is defined by the Private Securities Litigation Act of 1995 or the Securities and Exchange Commission in its rules, regulations and releases. The Company intends that such forward-looking statements be subject to the safe harbors created thereby. All forward-looking statements are based on current expectations regarding important risk factors including, but not limited to: general economic conditions; prices for real estate in the Company's market areas; the interest rate environment and the impact of the interest rate environment on our business, financial condition and results of operations; our ability to successfully  conserve and enhance capital levels, enhance liquidity and earnings, and reduce higher funding costs; the Company's ability to pay future dividends; the Bank's ability to pay dividends to the Company to fund the payment of cash dividends on the Company's common stock, and the ability of the Bank to receive any required regulatory approval or non-objection to do so; changes in the demand for loans or in the quality or composition of our loan or investment portfolios; deposits and other financial services that we provide; the possibility that future credit losses may be higher than currently expected as a result of changes in relevant accounting or regulatory requirements, among other factors; competitive pressures among financial services companies; the ability to attract, develop and retain qualified employees; our ability to maintain the security of our data processing and information technology systems; the outcome of pending or threatened litigation, or of matters before regulatory agencies; changes in law, governmental policies and regulations; and rapidly changing technology affecting financial services. Accordingly, actual results may differ from those expressed in the forward-looking statements, and the making of such statements should not be regarded as a representation by the Company or any other person that results expressed therein will be achieved. The Company undertakes no obligation to release revisions to these forward-looking statements publicly to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported by applicable law