Community Bank Shares of Indiana, Inc. Reports 1st Quarter Net Income Available to Common Shareholders of $1.5 Million and 2nd Quarter Dividend

Community Bank Shares of Indiana, Inc. Reports 1^st Quarter Net Income Available to Common Shareholders of $1.5 Million and 2^nd Quarter Dividend

Community Bank Shares of Indiana, Inc. (NASDAQ: CBIN) reported first quarter net income available to common shareholders of $1.5 million and earnings per diluted common share of $0.44. The Company also announced today that on April 26^th, its board of directors declared a quarterly cash dividend on the Company’s common stock of $0.10 per share payable on May 31, 2011 to shareholders of record at the close of business on May 12, 2011.

James Rickard, President and Chief Executive Officer, commented, “Our operating results for the first quarter reflect the progress our Company has made in several areas. First, we continue to maintain a stable and improved net interest margin versus both our Company’s historical average and our peer group¹ for the first quarter of 2011. Second, we remain committed to working through a challenging credit cycle. Credit trends have shown stability and slight improvement in recent quarters. In addition to credit resolutions, our loan officers have originated $42.0 million in loans to local businesses over the past two quarters, which is both an encouraging bright spot and a margin driver.”

Rickard continued, “We continue to invest in new technologies to improve all aspects of our business. Our Company’s drive to improve process efficiencies, analytics, margin, and ultimately profitability are rooted in each investment we have made to move this Company forward. These new investments paired with the talent, energy, and passion of our team members will be the key drivers of our success.”

The following points summarize significant financial information for the first quarter of 2011:

• Net income available to common shareholders was $1.5 million.
• Tangible book value per common share of $13.60.
• Net interest margin, on a tax equivalent basis, of 3.99%.
• Provision for loan losses was $810,000, a decrease of $303,000 and $115,000 from the quarters ended March 31, 2010 and December 31, 2010, respectively.
• Non-performing assets decreased by 1.0%, or $253,000 from the prior quarter end
• Gains of $584,000 were realized on the sale of available for sale securities

The Company’s unaudited consolidated condensed statements of operations and credit quality metrics are as follows:

					Three Months Ended
					March 31,										December 31,
					2011					2010					2010
					(In thousands, except per share data)
Interest income					$	8,712				$	9,351				$	8,649
Interest expense						1,731					2,166					1,929
Net interest income						6,981					7,185					6,720
Provision for loan losses						810					1,113					925
Non-interest income						1,958					1,928					1,912
Non-interest expense						5,847					5,694					5,582
Income before income taxes						2,282					2,306					2,125
Income tax expense						494					501					421
Net income					$	1,788				$	1,805				$	1,704
Preferred stock dividends and discount accretion						(266	)				(268	)				(266	)
Net income available to common shareholders					$	1,522				$	1,537				$	1,438
Basic earnings per common share					$	0.46				$	0.47				$	0.43
Diluted earnings per common share					$	0.44				$	0.47				$	0.42

					As of
					March 31, 2011				December 31, 2010				March 31, 2010
Non-Performing Assets to Total Assets					3.63	%			3.62	%			3.76	%
Allowance for Loan Losses to Total Loans					2.16				2.12				2.73

The Company’s unaudited condensed consolidated balance sheets are as follows:

					March 31, 2011				December 31, 2010
					(In thousands)
ASSETS
Cash and due from financial institutions					$	12,304			$	11,658
Interest-bearing deposits in other financial institutions						9,398				23,818
Securities available for sale						210,333				204,188
Loans held for sale						625				1,080
Loans, net of allowance for loan losses of $10,881 and $10,864						493,526				502,223
Federal Home Loan Bank and Federal Reserve stock						6,808				6,808
Accrued interest receivable						3,325				3,089
Premises and equipment, net						13,567				13,659
Cash surrender value of life insurance						19,487				19,210
Other intangible assets						1,044				1,106
Foreclosed and repossessed assets						3,959				3,633
Other assets						9,575				10,994
Total Assets					$	783,951			$	801,466
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits
Non interest-bearing					$	120,358			$	115,014
Interest-bearing						483,850				503,807
Total deposits						604,208				618,821
Other borrowings						52,571				49,426
Federal Home Loan Bank advances						40,000				50,000
Subordinated debentures						17,000				17,000
Accrued interest payable						543				615
Other liabilities						4,384				2,439
Total liabilities						718,706				738,301
STOCKHOLDERS’ EQUITY
Total stockholders’ equity						65,245				63,165
Total Liabilities and Stockholders’ Equity					$	783,951			$	801,466

About Community Bank Shares of Indiana, Inc.
Community Bank Shares of Indiana, Inc. was formed in 1991 as the nation’s first ever mutual holding company. In 1995 the company went public under the NASDAQ symbol CBIN. Today, Community Bank Shares of Indiana ,Inc. is Southeastern Indiana’s largest locally owned and headquartered bank holding company and includes Your Community Bank and The Scott County State Bank. The mission statement of Community Bank Shares of Indiana reflects its purpose: “Achieving financial goals through exceptional people and exceptional service.” Community Bank Shares of Indiana strives to help shareholders, customers, employees, and our communities achieve their respective financial goals by empowering talented individuals to provide a level of unmatched customer service. To learn more about us, please visit www.yourcommunitybank.com and www.scottcountystatebank.com.

Statements in this press release relating to the Company’s plans, objectives, or future performance are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations. The Company’s actual strategies and results in future periods may differ materially from those currently expected due to various risks and uncertainties, including those discussed in the Company’s 2010 Form 10-K and subsequent 10-Qs filed with the Securities and Exchange Commission.

¹ Bank holding companies between $500 million and $1 billion in assets

Community Bank Shares of Indiana, Inc.
Paul Chrisco, CFO, 812-981-7375