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Flood, bad loan wallop Columbus bank

July 11, 2008

Investors have been hammering Indiana Community Bancorp stock since the company announced Thursday that it will take a $1.9 million provision for loan and investment losses in the second quarter.

The Columbus-based parent of Indiana Bank and Trust Co. said the move was necessary because of losses stemming from flood damage and investments gone bad.

The shares on Thursday fell 10.3 percent, to $12.75. The stock is down an additional $1.03 today.

Indiana Community was known as Home Federal Bancorp before recently changing its name. It hired Colts center Jeff Saturday to promote the new moniker.

The bank said it boosted anticipated flood losses to $400,000. It already has charged off $100,000 due to the record flooding in June; the additional $300,000 is attributed to damage to housing on which it has loans.

Another $600,000 of the provision stems from writing down a $3 million housing development loan that was classified last year as nonperforming.

An additional $419,000 loss was attributed to the falling value of a $4.2 million investment in the AMF Ultra Short Mortgage Fund. The fund was hit by liquidity problems in the mortgage-backed securities market, the bank said.

Indiana Community Bancorp is schedule to release earnings on July 22.

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