Indiana Business Bancorp Reports Results of Operations for the Quarter and Year Ended December 31, 2012

  Indiana Business Bancorp Reports Results of Operations for the Quarter and
  Year Ended December 31, 2012

Business Wire

INDIANAPOLIS -- February 27, 2013

Indiana Business Bancorp (OTCBB: IBBI), the holding company for Indiana
Business Bank, announced results for the quarter and year ended December 31,

The company recorded a profit of $340,724 or $.23 per share and $862,085 or
$.57 per share for the quarter and year ended December 31, 2012. Net income
includes recognition of a tax benefit in the amount of $100,000 for the
quarter and $250,000 for the year from the carryover of net operating losses.
Pre-tax profit was $240,724 and $612,085 for the quarter and year ended
December 31, 2012. Pre-tax performance for the 2012 periods reflects
improvements of 18.5% and 11.5% over the year earlier periods, respectively.

The improvement in profits for the year is due primarily to lower credit costs
and increased net interest income. The net interest margin improved from 4.04%
in 2011 to 4.65% in 2012, despite a lower level of earning assets, due to a 40
basis point reduction in the cost of funds and a 20 basis point improvement in
the yield on earning assets.

Non-interest income for the year was $408,964, compared to $555,177 in 2011.
The difference is almost completely attributed to the variance in gains
recorded from the sale of Small Business Administration (SBA) loans. In 2011,
the company reported substantial gains from the sale of two large loans from a
single borrower. Gains on sale of SBA loans totaled $293,718 in 2012 and
$440,876 in 2011.

Non-interest expense (generally salaries and other operating expenses)
increased by 3% compared to the previous year. The increase is due to higher
salary levels reflecting annual merit increases and the higher cost of
employee benefits. The majority of remaining expense categories were flat or
below 2011 levels.

The provision for loan loss declined from $515,000 during 2011 to $278,000
during 2012. The reduced provision expense for the year reflects the improved
credit profile of the loan portfolio and lower loan balances. At December 31,
2012, the allowance for loan losses was $1,210,763, which represented 2.35% of
total loans.

Non-accrual loans, Other Real Estate Owned (OREO) and renegotiated loans
totaled $4,851,280 at December 31, 2012, which reflected a 17% reduction from
December 31, 2011. Non-performing assets, which consist of non-accrual loans,
OREO, and loans past due more than 90 days were $2,018,135 at year end, which
reflected a 46% reduction from the prior year.

All of the Bank’s capital ratios substantially exceeded the amounts needed to
be considered “well capitalized” at December 31, 2012.

President and CEO, James S. Young stated, “Our staff is pleased that 2012
results improved upon a strong 2011 performance. Although most in our industry
are fighting shrinking net interest margins, our ability to maintain yield and
decrease our cost of funds, allows us to maintain a margin that was better
than most of our peers.” Young added, “We will continue to work toward
achieving improvements in the credit risk aspect of our business by working
with borrowers. We believe 2013 will be challenging but expect, and have
planned for, quality growth throughout the year.”

About Indiana Business Bancorp and Indiana Business Bank

Indiana Business Bancorp is a bank holding company whose operations are
conducted through its subsidiary, Indiana Business Bank, a state-chartered,
locally-owned and managed commercial bank formed for the purpose of providing
highly-personalized banking services for small to medium-sized businesses,
their owners and professional services firms in the Indianapolis, Indiana
metropolitan area. The Bank provides a full line of commercial banking loan,
deposit, and cash management services that are delivered in a highly
personalized manner by experienced banking professionals. The Bank specializes
in serving the commercial and consumer banking needs of small to medium sized
businesses and their owners, and professionals located primarily throughout
Central Indiana.

We routinely post important information for investors on our website,, in the “About” section under “Investor Relations”.
We intend to use this website as a means of providing financial and other
information to investors and other interested parties. Accordingly, investors
should monitor our website, in addition to following our press releases and
other presentations. The information contained on, or that may be accessed
through, our website is not incorporated by reference into, and is not a part
of, this document.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of
1995: Statements in this press release regarding Indiana Business Bank and
Indiana Business Bancorp’s business which are not historical facts are
“forward-looking statements” that involve risks and uncertainties which may
cause actual results to differ materially from expected results, including:
the impact of a slowdown or recession on our borrowing customers; volatility
in the financial markets; general, regional and local economic conditions and
their effect on interest rates; competition among banks and other financial
intermediaries within the Indianapolis metropolitan market; risks that
borrowers may default on their loans; and changes in regulations and
accounting policies affecting financial institutions.


                           As of and for the          As of and for the
                      Three Months Ended       Twelve Months Ended
                           December 31                December 31
Operating Data         2012        2011        2012         2011
Net Interest           736,865     734,356     2,899,383    2,827,927
Provision for Loan     40,000      55,000      278,000      515,000
Noninterest Income     177,303     76,975      408,964      555,177
Noninterest            633,444     553,138     2,418,262    2,343,914
Pre Tax Net Income     240,724     203,193     612,085      549,190
Def Tax Benefit        100,000     250,000     250,000      250,000
After Tax Net          340,724     453,193     862,085      799,190
Per Share Data                                           
Net Earnings per       .23         .30         .57          .53
Weighted Average       1,510,093   1,507,341   1,510,093    1,507,341
Shares Outstanding

                                   As of
Balance Sheet Data                 December 31, 2012   December 31, 2011
Total Assets                       64,833,104            65,567,929
Net Loans                          50,187,588            52,818,804
Allowance for Loan Losses          1,210,763             1,468,949
Investment Securities              5,477,028             3,474,450
Total Deposits                     50,262,609            52,501,674
Total Shareholders’ Equity         9,804,269             8,926,659


Indiana Business Bancorp
Gregory Gault, Executive Vice President, 317-218-2181
Guy Johnson Public Relations
Guy Johnson, 317-503-4605
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