Exhibit 99.1
| |
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FOR IMMEDIATE RELEASE |
|
|
August 12, 2008 |
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|
FOR FURTHER INFORMATION |
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|
CONTACT DAVID A. BOCHNOWSKI |
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(219) 853-7575 |
NORTHWEST INDIANA BANCORP
REPORTS QUARTERLY EARNINGS
Munster, Indiana — NorthWest Indiana Bancorp, the holding company for Peoples Bank, reported a
1.7% increase in earnings for the quarter ended June 30, 2008 compared to second quarter earnings
reported during the prior year. This increase reflects earnings of $1.45 million, or $0.51 in
earnings per basic and diluted share, compared to earnings of $1.42 million, or $0.51 in earnings
per basic and $0.50 in earnings per diluted share for the quarter ended June 30, 2007. For the
quarter ended June 30, 2008, the return on average assets (ROA) was 0.89% and return on average
equity (ROE) was 10.36%.
The Bancorp also reported a 6.4% increase in earnings for the six months ended June 30, 2008
compared to the six-month earnings reported during the same period in 2007. This increase reflects
earnings of $3.09 million, or $1.10 in earnings per basic and $1.09 in earnings per diluted share,
compared to earnings of $2.91 million, or $1.04 in earnings per basic and $1.03 in earnings per
diluted share for the six months ended June 30, 2007. For the six months ended June 30, 2008, the
return on average assets (ROA) was 0.96% and return on average equity (ROE) was 11.19%.
“The fundamentals of Peoples Bank’s performance during the second quarter and first half of
the year remained strong despite the uncertainty of the national economy. Our net interest margin
continues to expand at a healthy pace, income from banking operations is up from prior periods, and
increases in our core accounts has driven asset growth. We are cautiously optimistic that our loan
growth will carry through the second half of the year,” said David A. Bochnowski, Chairman and
Chief Executive Officer.
At June 30, 2008, the Bancorp’s assets totaled $652.9 million, an increase of $24.2 million or
3.8% for the year. During the current six months, the Bancorp’s lending portfolio totaled $486.6
million, an increase of $18.1 million. The increase in loan balances was a result of demand
for commercial real estate loans, commercial business loans and construction & land development
loans. Investment securities totaled $119.5 million at June 30, 2008, an increase of $4.8 million
for the six-month period. At June 30, 2008, deposits totaled $511.1 million, an increase of $17.8
million during the first quarter. The increase in deposits is primarily related to growth in
checking account balances. At June 30, 2008, core deposits totaled $300.0 million, while
certificates of deposit totaled $211.1 million. Core deposits include checking, savings, and money
market accounts. Core deposits represent 58.7% of the Bancorp’s total deposits at the end of the
June. At June 30, 2008, borrowings totaled $84.6 million, an increase of $7.7 million for the
six-month period.
Net interest income, the difference between interest income from loans and investments and
interest expense paid to fund providers, totaled $5.6 million for the current quarter, compared to
$4.4 million for the quarter ended June 30, 2007, an increase of $1.2 million, or 27.0%. For the
six months ended June 30, 2008, net interest income totaled $10.6 million compared to $8.8 million
for the six months ended June 30, 2007, an increase of $1.7 million, or 19.8%. The increase in net
interest income for both periods has been positively impacted by loan growth and a decrease in the
cost of funds as a result of the Federal Reserve’s action in lowering short-term interest rates
during 2008.
At June 30, 2008, the Bancorp’s non-performing loans represented 1.51% of total assets,
compared to 1.37% at December 31, 2007. The Bancorp’s non-performing loans continue to be impacted
by two past due commercial real estate participation loans that carry a balance of $4.1 million and
$956 thousand. Management has filed a lawsuit against the lead lender of the $4.1 million
commercial real estate participation contending that the lead lender had violated the participation
agreement, as well as the underlying loan agreement. For both loans, management will continue to
take action to ensure that the Bancorp’s interest in the collateral is protected.
“As a result of trends in the economy, the Bank took the prudent step of increasing our
provision for loan losses during the most recent quarter. Although Peoples Bank has not originated
any subprime loans or made any subprime investments, additional reserves were taken in response to
our analysis of a commercial loan participation,” Bochnowski said.
During July 2008, management received an updated appraisal from the lead lender for the $4.1
million commercial real estate participation project, which is located in Ann Arbor, Michigan,
indicating a decrease in collateral value. Based on the new information provided by the lead
lender, management has increased the specific allowance for the collateral deficiency to recognize
the additional impairment for this commercial real estate participation loan. As a result of the
additional loan impairment and management’s assessment of current credit quality within its loan
portfolio, provisions to the allowance for loan losses totaled $820 thousand for the current
quarter and $950 thousand for the six months ended June 30, 2008. For the current six months, net
loan charge-offs totaled $77 thousand, compared to $1 thousand during the first six months of 2007.
At June 30, 2008, the allowance for loan losses totaled $5.5 million and is considered adequate by
management. To the extent that actual cash flows, collateral values and strength of personal
guarantees differ from current estimates used to establish the allowance for loan losses,
additional provisions to the allowance for loan losses may be required.
Noninterest income from banking activities for the quarter ended June 30, 2008 totaled $1.2
million, compared to $1.1 million for the quarter ended June 30, 2007, an increase of $89 thousand,
or 8.1%. For the six months ended June 30, 2008, noninterest income totaled $2.4 million, compared
to $2.1 million for the six months ended June 30, 2007, an increase of $249 thousand, or 11.7%. In
the current quarter and six month period, noninterest income increased as a result of income
recognized from wealth management operations, gains recognized from the sale of available-for-sale
securities, increases in the cash value of bank owned life insurance and the reversal of a
liability previously established for an impaired letter of credit.
Noninterest expense totaled $4.1 million for the quarter ended June 30, 2008, compared to $3.6
million for the quarter ended June 30, 2007, an increase of $549 thousand, or 15.3%. For the six
months ended June 30, 2008, noninterest expense totaled $8.2 million, compared to $7.1 million for
the six months ended June 30, 2007, an increase of $1.1 million, or 15.6%. In the current quarter
and six month period, the increase in noninterest expense is related to increased compensation
costs for additional lending, retail, private banking and marketing personnel that were hired to
support the Bank’s growth
initiatives. In addition, occupancy expense has increased as result of
opening of the Crown Point,
Indiana banking center in December 2007. During the first quarter, other expense has
increased as a result of an increase in third-party professional services, community contributions
and operating expenses related to banking products.
“These are challenging but exciting times for Peoples Bank. Throughout our nearly one
hundred-year history of community banking, Peoples has always been committed to our customers as
our first priority. We were pleased to learn during the June quarter that U.S. Banker Magazine
had identified the Bancorp as one of the Top 200 Community Banks in America,” Bochnowski said.
“Our growth during the first half of the year confirms the value of a community bank dedicated
to a unique brand of customer service. Our expansion into Crown Point has exceeded our
expectations and we are looking forward to the opening of our Gary banking center in the fall of
this year. In addition, Peoples Bank plans to begin construction of our first Valparaiso banking
center this winter and has recently acquired property in St. John for expansion into that growing
community,” Bochnowski said.
At June 30, 2008, shareholders’ equity totaled at $52.3 million or 8.0% of total assets. The
book value of the Bancorp’s stock stood at $18.57 at quarter-end.
The NorthWest Indiana Bancorp stock is traded on the OTC Bulletin Board under NWIN. The
Bancorp’s subsidiary, Peoples Bank, has offices in Crown Point, East Chicago, Dyer, Hammond,
Hobart, Merrillville, Munster, and Schererville, Indiana. The Bank’s website,
www.ibankpeoples.com, provides information on the Bank’s products, services and investor relations.
“Forward-looking statements” as defined in the Private Securities Litigation Reform Act of
1995 may be included in this release. A variety of factors could cause the Bancorp’s actual
results to differ from those expected at the time of this release. These include, but are not
limited to, changes in economic conditions in the Bancorp’s market area, changes in policies by
regulatory agencies, fluctuation in interest rates, demand for loans in the Bancorp’s market area,
competition and other risks set forth in the Bancorp’s reports filed with the Securities and
Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2007.
Readers are urged to carefully review and consider the various disclosures made by the Bancorp in
its periodic reports filed with the Securities and Exchange Commission. Forward-looking statements
speak only as of the date they are made, and the Bancorp undertakes no obligation to update them in
light of new information or future events.
NorthWest Indiana Bancorp
Quarterly Financial Report
| |
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|
Three Months Ended |
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Six Months Ended |
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|
June 30, |
|
June 30, |
| |
|
(Unaudited) |
|
(Unaudited) |
Key Ratios |
|
2008 |
|
2007 |
|
2008 |
|
2007 |
Return on equity |
|
|
10.36 |
% |
|
|
11.00 |
% |
|
|
11.19 |
% |
|
|
11.36 |
% |
Return on assets |
|
|
0.89 |
% |
|
|
0.93 |
% |
|
|
0.96 |
% |
|
|
0.95 |
% |
Basic earnings per share |
|
$ |
0.51 |
|
|
$ |
0.51 |
|
|
$ |
1.10 |
|
|
$ |
1.04 |
|
Diluted earnings per share |
|
$ |
0.51 |
|
|
$ |
0.50 |
|
|
$ |
1.09 |
|
|
$ |
1.03 |
|
Yield on loans |
|
|
6.05 |
% |
|
|
6.23 |
% |
|
|
6.14 |
% |
|
|
6.62 |
% |
Yield on security investments |
|
|
4.62 |
% |
|
|
4.41 |
% |
|
|
4.64 |
% |
|
|
4.38 |
% |
Total yield on earning assets |
|
|
5.77 |
% |
|
|
6.23 |
% |
|
|
5.84 |
% |
|
|
6.21 |
% |
Cost of deposits |
|
|
2.02 |
% |
|
|
3.05 |
% |
|
|
2.28 |
% |
|
|
3.03 |
% |
Cost of borrowings |
|
|
2.99 |
% |
|
|
4.27 |
% |
|
|
3.37 |
% |
|
|
4.24 |
% |
Total cost of funds |
|
|
2.14 |
% |
|
|
3.19 |
% |
|
|
2.41 |
% |
|
|
3.18 |
% |
Net interest margin — tax equivalent |
|
|
3.85 |
% |
|
|
3.21 |
% |
|
|
3.67 |
% |
|
|
3.19 |
% |
Noninterest income / average assets |
|
|
0.73 |
% |
|
|
0.72 |
% |
|
|
0.74 |
% |
|
|
0.70 |
% |
Noninterest expense / average assets |
|
|
2.55 |
% |
|
|
2.37 |
% |
|
|
2.56 |
% |
|
|
2.32 |
% |
Net noninterest margin / average assets |
|
|
-1.82 |
% |
|
|
-1.65 |
% |
|
|
-1.82 |
% |
|
|
-1.62 |
% |
Efficiency ratio |
|
|
61.00 |
% |
|
|
65.20 |
% |
|
|
63.38 |
% |
|
|
64.80 |
% |
Effective tax rate |
|
|
21.30 |
% |
|
|
25.80 |
% |
|
|
18.50 |
% |
|
|
24.60 |
% |
Dividend declared per common share |
|
$ |
0.36 |
|
|
$ |
0.36 |
|
|
$ |
0.72 |
|
|
$ |
0.72 |
|
| |
|
|
|
|
|
|
|
|
| |
|
At June 30, |
| |
|
2008 |
|
2007 |
Net worth / total assets |
|
|
8.00 |
% |
|
|
8.32 |
% |
Book value per share |
|
$ |
18.57 |
|
|
$ |
18.01 |
|
Non-performing loans to total assets |
|
|
1.51 |
% |
|
|
1.37 |
% |
Non-performing loans to total loans |
|
|
2.03 |
% |
|
|
1.84 |
% |
Allowance for loan loss to non-performing loans |
|
|
55.20 |
% |
|
|
53.20 |
% |
Allowance for loan loss to loans outstanding |
|
|
1.12 |
% |
|
|
0.98 |
% |
Foreclosed real estate to total assets |
|
|
0.09 |
% |
|
|
0.02 |
% |
| |
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|
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|
|
|
|
|
|
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Three Months Ended |
|
|
Six Months Ended |
|
| |
|
June 30, |
|
|
June 30, |
|
| Consolidated Statements of Income |
|
(Unaudited) |
|
|
(Unaudited) |
|
| (Dollars in thousands) |
|
2008 |
|
|
2007 |
|
|
2008 |
|
|
2007 |
|
Interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
$ |
7,369 |
|
|
$ |
7,675 |
|
|
$ |
14,795 |
|
|
$ |
15,412 |
|
Securities & short-term investments |
|
|
1,404 |
|
|
|
1,172 |
|
|
|
2,807 |
|
|
|
2,300 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest income |
|
|
8,773 |
|
|
|
8,847 |
|
|
|
17,602 |
|
|
|
17,712 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
2,604 |
|
|
|
3,770 |
|
|
|
5,890 |
|
|
|
7,450 |
|
Borrowings |
|
|
549 |
|
|
|
652 |
|
|
|
1,131 |
|
|
|
1,427 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest expense |
|
|
3,153 |
|
|
|
4,422 |
|
|
|
7,021 |
|
|
|
8,877 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
5,620 |
|
|
|
4,425 |
|
|
|
10,581 |
|
|
|
8,835 |
|
Provision for loan losses |
|
|
820 |
|
|
|
5 |
|
|
|
950 |
|
|
|
5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income after provision for loan losses |
|
|
4,800 |
|
|
|
4,420 |
|
|
|
9,631 |
|
|
|
8,830 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees & service charges |
|
|
707 |
|
|
|
745 |
|
|
|
1,403 |
|
|
|
1,425 |
|
Wealth management operations |
|
|
208 |
|
|
|
169 |
|
|
|
417 |
|
|
|
338 |
|
Cash value increase from bank owned life insurance |
|
|
102 |
|
|
|
97 |
|
|
|
205 |
|
|
|
195 |
|
Gain on sale of securities, net |
|
|
30 |
|
|
|
19 |
|
|
|
146 |
|
|
|
48 |
|
Gain on sale of loans, net |
|
|
31 |
|
|
|
64 |
|
|
|
70 |
|
|
|
118 |
|
Other income |
|
|
104 |
|
|
|
(1 |
) |
|
|
139 |
|
|
|
7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total noninterest income |
|
|
1,182 |
|
|
|
1,093 |
|
|
|
2,380 |
|
|
|
2,131 |
|
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation & benefits |
|
|
2,153 |
|
|
|
1,805 |
|
|
|
4,334 |
|
|
|
3,655 |
|
Occupancy & equipment |
|
|
719 |
|
|
|
657 |
|
|
|
1,415 |
|
|
|
1,270 |
|
Data processing |
|
|
216 |
|
|
|
224 |
|
|
|
428 |
|
|
|
445 |
|
Marketing |
|
|
115 |
|
|
|
60 |
|
|
|
219 |
|
|
|
119 |
|
Other |
|
|
944 |
|
|
|
852 |
|
|
|
1,818 |
|
|
|
1,617 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total noninterest expense |
|
|
4,147 |
|
|
|
3,598 |
|
|
|
8,214 |
|
|
|
7,106 |
|
Income before income taxes |
|
|
1,835 |
|
|
|
1,915 |
|
|
|
3,797 |
|
|
|
3,855 |
|
Income tax expenses |
|
|
390 |
|
|
|
494 |
|
|
|
704 |
|
|
|
948 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
1,445 |
|
|
$ |
1,421 |
|
|
$ |
3,093 |
|
|
$ |
2,907 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NorthWest Indiana Bancorp
Quarterly Financial Report
| |
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| |
|
June 30, |
|
|
|
|
|
|
|
|
|
|
| Balance Sheet Data |
|
2008 |
|
|
December 31, |
|
|
Change |
|
|
Mix |
|
| (Dollars in thousands) |
|
(Unaudited) |
|
|
2007 |
|
|
% |
|
|
% |
|
Total assets |
|
$ |
652,910 |
|
|
$ |
628,718 |
|
|
|
3.8 |
% |
|
|
|
|
Cash & cash equivalents |
|
|
12,265 |
|
|
|
12,111 |
|
|
|
1.3 |
% |
|
|
|
|
Securities — available for sale |
|
|
100,548 |
|
|
|
96,286 |
|
|
|
4.4 |
% |
|
|
|
|
Securities — held to maturity |
|
|
18,929 |
|
|
|
18,358 |
|
|
|
3.1 |
% |
|
|
|
|
| |
Loan receivable: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction and land development |
|
|
47,382 |
|
|
|
46,289 |
|
|
|
2.4 |
% |
|
|
9.7 |
% |
1-4 first liens |
|
|
200,267 |
|
|
|
201,302 |
|
|
|
-0.5 |
% |
|
|
41.2 |
% |
Multifamily |
|
|
13,716 |
|
|
|
12,884 |
|
|
|
6.5 |
% |
|
|
2.8 |
% |
Commercial real estate |
|
|
131,878 |
|
|
|
119,258 |
|
|
|
10.6 |
% |
|
|
27.1 |
% |
Commercial business |
|
|
51,235 |
|
|
|
46,954 |
|
|
|
9.1 |
% |
|
|
10.5 |
% |
1-4 Junior Liens |
|
|
4,864 |
|
|
|
5,805 |
|
|
|
-16.2 |
% |
|
|
1.0 |
% |
HELOC |
|
|
19,571 |
|
|
|
18,595 |
|
|
|
5.2 |
% |
|
|
4.0 |
% |
Lot loans |
|
|
3,592 |
|
|
|
3,309 |
|
|
|
8.6 |
% |
|
|
0.7 |
% |
Consumer |
|
|
2,243 |
|
|
|
2,399 |
|
|
|
-6.5 |
% |
|
|
0.5 |
% |
Government and other |
|
|
11,838 |
|
|
|
11,664 |
|
|
|
1.5 |
% |
|
|
2.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans |
|
|
486,586 |
|
|
|
468,459 |
|
|
|
3.9 |
% |
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest bearing checking |
|
|
51,841 |
|
|
|
44,799 |
|
|
|
15.7 |
% |
|
|
10.1 |
% |
Interest bearing checking |
|
|
89,770 |
|
|
|
71,437 |
|
|
|
25.7 |
% |
|
|
17.6 |
% |
Savings |
|
|
53,853 |
|
|
|
52,524 |
|
|
|
2.5 |
% |
|
|
10.5 |
% |
MMDA |
|
|
104,537 |
|
|
|
110,416 |
|
|
|
-5.3 |
% |
|
|
20.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total core deposits |
|
|
300,001 |
|
|
|
279,176 |
|
|
|
7.5 |
% |
|
|
58.7 |
% |
Certificates of deposit |
|
|
211,148 |
|
|
|
214,208 |
|
|
|
-1.4 |
% |
|
|
41.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits |
|
|
511,149 |
|
|
|
493,384 |
|
|
|
3.6 |
% |
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings |
|
|
84,599 |
|
|
|
76,930 |
|
|
|
10.0 |
% |
|
|
|
|
Stockholder’s equity |
|
|
52,253 |
|
|
|
52,733 |
|
|
|
-0.9 |
% |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
June 30, |
|
|
|
|
|
|
|
| Asset Quality |
|
2008 |
|
|
December 31, |
|
|
Change |
|
| (Dollars in thousands) |
|
(Unaudited) |
|
|
2007 |
|
|
% |
|
Nonaccruing loans |
|
$ |
8,966 |
|
|
$ |
7,776 |
|
|
|
15.3 |
% |
Accruing loans delinquent more than 90 days |
|
|
910 |
|
|
|
842 |
|
|
|
8.1 |
% |
Foreclosed real estate |
|
|
616 |
|
|
|
136 |
|
|
|
352.9 |
% |
|
|
|
|
|
|
|
|
|
|
Total nonperforming assets |
|
|
10,492 |
|
|
|
8,754 |
|
|
|
19.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses (ALL): |
|
|
|
|
|
|
|
|
|
|
|
|
ALL specific allowances for impaired loans |
|
|
1,684 |
|
|
|
824 |
|
|
|
104.4 |
% |
ALL general allowances for loan portfolio |
|
|
3,770 |
|
|
|
3,757 |
|
|
|
0.3 |
% |
|
|
|
|
|
|
|
|
|
|
Total ALL |
|
|
5,454 |
|
|
|
4,581 |
|
|
|
19.1 |
% |