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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

(X) Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

For the quarterly period ended September 30, 2004

or

(   ) Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

For the Transition Period from ________ to ________

Commission File Number 0-14354

FIRST INDIANA CORPORATION
(Exact name of registrant as specified in its charter)

 Indiana   35-1692825    
  (State or other jurisdiction of
incorporation or organization) 		  (IRS Employer Identification Number)  

135 North Pennsylvania Street, Indianapolis, IN      46204  
(Address of principal executive office)     (Zip Code)  

(317) 269-1200

(Registrant’s telephone number, including area code)

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes (X)    No (   )

        Indicate by check mark whether the registrant is an accelerated filer (as defined by Rule 12b-2 of the Securities Exchange Act). Yes (X) No (   )

        Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Class      Shares    
Common Stock, par value $0.01 per share     Outstanding at 10/29/2004
15,679,356		  

 

   

FIRST INDIANA CORPORATION AND SUBSIDIARIES
FORM 10-Q
INDEX

  Page
         
Part I Financial Information    
  Item 1 Financial Statements  
         
  Condensed Consolidated Balance Sheets as of September 30, 2004,
December 31, 2003, and September 30, 2003		   3  
         
  Condensed Consolidated Statements of Earnings for the Three and Nine
Months Ended September 30, 2004 and 2003 		  4  
         
  Condensed Consolidated Statement of Shareholders’ Equity for the Nine
Months Ended  September 30, 2004		   5  
         
  Condensed Consolidated Statements of Cash Flows for the Nine Months
Ended September 30, 2004 and 2003		   6  
         
   Notes to Condensed Consolidated Financial Statements   7  
         
  Item 2 Management’s Discussion and Analysis of Financial Condition and Results
of Operations		   17  
         
  Item 3 Quantitative and Qualitative Disclosures about Market Risk   33  
         
  Item 4 Controls and Procedures   36  
     
Part II Other Information  
         
  Item 1 Legal Proceedings   37  
         
  Item 2 Unregistered Sales of Equity Securities and Use of Proceeds   37  
         
  Item 3 Defaults upon Senior Securities   37  
         
  Item 4 Submission of Matters to a Vote of Security Holders   37  
         
  Item 5 Other Information   38  
         
  Item 6 Exhibits   39  
         
  Signatures      


  2 

Condensed Consolidated Balance Sheets
First Indiana Corporation and Subsidiaries
(Dollars in Thousands, Except Per Share Data)
(Unaudited)

 

 

 September 30
2004
December 31
2003
September 30
2003
Assets                
  Cash $         58,268       $        58,589       $         63,109   
  Interest-Bearing Due from Banks             21,267                  1,715                   7,346  
 
   
   
 
    Cash and Cash Equivalents             79,535                60,304                 70,455  
  Securities Available for Sale           213,388              215,453               209,489  
  Other Investments             25,772                24,957                 24,596  
  Loans                
    Business           482,881              515,316               551,399  
    Consumer           519,535              612,025               624,287  
    Residential Mortgage           277,215              316,822               289,034  
    Single-Family Construction           185,448              192,450               196,728  
    Commercial Real Estate           179,525              178,378               163,860  
 
   
   
 
  Total Loans        1,644,604           1,814,991            1,825,308  
    Allowance for Loan Losses           (52,511 )            (53,197 )             (57,498 )
 
   
   
 
    Net Loans        1,592,093           1,761,794            1,767,810  
  Premises and Equipment             24,083                24,732                 24,911  
  Accrued Interest Receivable               8,427                  9,353                   9,072  
  Loan Servicing Rights               5,049                  5,985                   7,913  
  Goodwill             30,682                30,682                 30,647  
  Other Intangible Assets               4,082                  4,621                   4,805  
  Assets of Discontinued Operations               7,608                  9,579                   9,729  
  Other Assets             43,060                45,677                 46,609  
 
   
   
 
    Total Assets $    2,033,779     $   2,193,137     $    2,206,036  
 
   
   
 
Liabilities                
  Non-Interest-Bearing Deposits $       291,875     $      235,811     $       231,649  
  Interest-Bearing Deposits                
    Demand Deposits           180,532              217,353               223,055  
    Savings Deposits           472,453              400,804               407,217  
    Certificates of Deposit           504,084              636,004               655,685  
 
   
   
 
      Total Interest-Bearing Deposits        1,157,069           1,254,161            1,285,957  
 
   
   
 
  Total Deposits        1,448,944           1,489,972            1,517,606  
  Short-Term Borrowings           152,185              147,074               156,912  
  Federal Home Loan Bank Advances           143,309              265,488               256,511  
  Subordinated Notes             46,627                46,534                 24,345  
  Accrued Interest Payable               2,369                  2,156                   1,962  
  Advances by Borrowers for Taxes and Insurance               2,693                  1,533                   3,467  
  Liabilities of Discontinued Operations               1,653                  2,602                   2,330  
  Other Liabilities             26,579                28,884                 32,158  
 
   
   
 
    Total Liabilities        1,824,359           1,984,243            1,995,291  
 
   
   
 
Shareholders' Equity                
  Preferred Stock, $.01 Par Value:  2,000,000 Shares Authorized; None Issued                     -                          -                           -    
  Common Stock, $.01 Par Value:  33,000,000 Shares Authorized;                
    Issued:  2004 - 17,585,943 Shares; 2003 - 17,473,764 and 17,473,675 Shares                  176                     175                      175  
  Capital Surplus             48,292                46,595                 46,402  
  Retained Earnings           186,823              185,012               185,306  
  Accumulated Other Comprehensive Income (Loss)                (780 )                1,756                   2,593  
  Treasury Stock at Cost: 2004 - 1,949,087 Shares;                
    2003 - 1,927,017 and 1,877,017 Shares           (25,091 )            (24,644 )             (23,731 )
 
   
   
 
    Total Shareholders' Equity           209,420              208,894               210,745  
 
   
   
 
    Total Liabilities and Shareholders' Equity $    2,033,779     $   2,193,137     $    2,206,036  
 
   
   
 

See Notes to Condensed Consolidated Financial Statements


  3 

Condensed Consolidated Statements of Earnings
First Indiana Corporation and Subsidiaries
(Dollars in Thousands, Except Per Share Data)
(Unaudited)

  Three Months Ended September 30
  Nine Months Ended September 30
  2004
  2003
  2004
  2003
Interest Income                
  Interest-Bearing Due from Banks $                    14         $                    14         $                  161         $                    43  
  Federal Funds Sold                        -                            -                            -                              3  
  Securities Available for Sale                   1,900                     1,985                     6,012                     5,905  
  Dividends on Other Investments                      301                        277                        883                        931  
  Loans                 23,377                   25,375                   69,729                   80,450  
 
   
   
   
 
    Total Interest Income                 25,592                   27,651                   76,785                   87,332  
Interest Expense                
  Deposits                   4,821                     5,796                   15,385                   19,636  
  Short-Term Borrowings                      417                        313                        998                     1,085  
  Federal Home Loan Bank Advances                   1,738                     2,348                     5,354                     7,167  
  Subordinated Notes                      847                        415                     2,526                        874  
 
   
   
   
 
    Total Interest Expense                   7,823                     8,872                   24,263                   28,762  
 
   
   
   
 
Net Interest Income                 17,769                   18,779                   52,522                   58,570  
Provision for Loan Losses                   5,300                   13,548                   11,550                   35,876  
 
   
   
   
 
Net Interest Income After Provision for Loan Losses                 12,469                     5,231                   40,972                   22,694  
Non-Interest Income                    
  Deposit Charges                   4,470                     4,388                   13,086                   12,710  
  Loan Servicing Income (Expense)                    (174 )                        (55 )                        111                      (320 )
  Loan Fees                      887                        785                     2,351                     2,004  
  Trust Fees                      898                        777                     2,651                     2,212  
  Investment Product Sales Commissions                       374                        473                     1,559                     1,307  
  Sale of Loans                   2,663                     2,865                     8,506                     8,233  
  Sale of Investment Securities                        -                            -                          280                            7  
  Other                      729                     1,030                     2,864                     3,333  
 
   
   
   
 
    Total Non-Interest Income                   9,847                   10,263                   31,408                   29,486  
Non-Interest Expense                  
  Salaries and Benefits                 11,120                   10,645                   31,806                   29,880  
  Net Occupancy                   1,008                        975                     3,042                     3,009  
  Equipment                   1,533                     1,471                     4,560                     4,613  
  Professional Services                   1,468                     1,588                     3,764                     4,007  
  Marketing                      547                        643                     1,641                     1,826  
  Telephone, Supplies, and Postage                      915                        921                     2,616                     2,774  
  Other Intangible Asset Amortization                      180                        184                        539                        552  
  OREO Expenses                   1,400                        131                     1,271                        315  
  Other                   2,208                     2,084                     6,572                     5,687  
 
   
   
   
 
    Total Non-Interest Expense                 20,379                   18,642                   55,811                   52,663  
 
   
   
   
 
Earnings (Loss) from Continuing Operations                   1,937                   (3,148 )                   16,569                      (483 )
Income Taxes (Benefit)                      630                   (1,026 )                     5,943                      (257 )
 
   
   
   
 
Earnings (Loss) from Continuing Operations, Net of Taxes                   1,307                   (2,122 )                   10,626                      (226 )
Discontinued Operations