Exhibit 99.1
| |
|
|
|
|
FOR IMMEDIATE RELEASE |
|
|
October 23, 2008 |
|
|
FOR FURTHER INFORMATION |
|
|
CONTACT DAVID A. BOCHNOWSKI |
|
|
(219) 853-7575 |
NORTHWEST INDIANA BANCORP
REPORTS QUARTERLY EARNINGS INCREASE
Munster, Indiana — NorthWest Indiana Bancorp, the holding company for Peoples Bank, reported
an 8.9% increase in earnings for the quarter ended September 30, 2008 compared to third quarter
earnings reported during the prior year. This increase reflects earnings of $1.57 million, or
$0.56 in earnings per basic and diluted share, compared to earnings of $1.44 million, or $0.51 in
earnings per basic and diluted share for the quarter ended September 30, 2007. For the quarter
ended September 30, 2008, the return on average assets (ROA) was 0.96% and return on average equity
(ROE) was 11.75%.
The Bancorp also reported a 7.2% increase in earnings for the nine months ended September 30,
2008 compared to the nine-month earnings reported during the same period in 2007. This increase
reflects earnings of $4.7 million, or $1.66 in earnings per basic and $1.65 in earnings per diluted
share, compared to earnings of $4.4 million, or $1.55 in earnings per basic and $1.54 in earnings
per diluted share for the nine months ended September 30, 2007. For the nine months ended
September 30, 2008, the return on average assets (ROA) was 0.96% and return on average equity (ROE)
was 11.37%.
“Despite the turmoil in the financial markets, Peoples Bank is very pleased to report
increased earnings for both the most recent quarter and the first nine months of the year. For
all the talk about what is happening on Wall Street and Main Street, it is clear that Peoples Bank
continues to strongly perform and deliver consumer, commercial and wealth management products and
services that meet the needs of our customers,” said David A. Bochnowski, Chairman and Chief
Executive Officer.
At September 30, 2008, the Bancorp’s assets totaled $655.8 million, an increase of $27.1
million or 4.3% for the year. During the current nine months, the Bancorp’s lending portfolio
totaled $486.4 million, an increase of $18.0 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 $122.9 million at September 30, 2008, an increase
of $4.7 million for the nine-month period. At September 30, 2008, deposits totaled $522.4 million,
an increase of $29.1 million during the first quarter. The increase in deposits is primarily
related to growth in checking and money market account balances. At September 30, 2008, core
deposits totaled $307.0 million, while certificates of deposit totaled $215.5 million. Core
deposits include checking, savings, and money market accounts. Core deposits represented 58.8% of
the Bancorp’s total deposits at the end of the September. At September 30, 2008, borrowings
totaled $77.1 million, an increase of $207 thousand for the nine-month period.
Net interest income, the difference between interest income from loans and investments and
interest expense paid to fund providers, totaled $5.8 million for the current quarter, compared to
$4.5 million for the quarter ended September 30, 2007, an increase of $1.3 million, or 30.0%. For
the nine months ended September 30, 2008, net interest income totaled $16.4 million compared to
$13.3 million for the nine months ended September 30, 2007, an increase of $3.1 million, or 23.2%.
The increase in net interest income for both periods has been positively impacted by loan and core
deposit 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 September 30, 2008, the Bancorp’s non-performing loans represented 1.56% 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 $3.8 million and
$956 thousand. The Bancorp’s management has filed a lawsuit against the lead lender of the $3.8
million commercial real estate participation, contending that the lead lender violated the
participation agreement, as well as the underlying loan agreement. For both loans, management
continues to take action to ensure that the Bancorp’s interest in the collateral is protected.
“Current economic conditions continue to exert stress on our loan portfolio. Because of the
uncertainty in the economy, management has aggressively increased our provision for loan losses,”
Bochnowski noted.
As a result of management’s assessment of current credit quality within its loan portfolio,
provisions to the allowance for loan losses totaled $590 thousand for the current quarter and
$1,540 thousand for the nine months ended September 30, 2008. For the current nine months, net
loan charge-offs totaled $552 thousand, compared to $201 thousand during the first nine months of
2007. At September 30, 2008, the allowance for loan losses totaled $5.6 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 September 30, 2008 totaled
$1.13 million, compared to $1.15 million for the quarter ended September 30, 2007, a decrease of
$19 thousand, or 1.6%. For the nine months ended September 30, 2008, noninterest income totaled
$3.5 million, compared to $3.3 million for the nine months ended September 30, 2007, an increase of
$230 thousand, or 7.0%. Factors contributing to the increase in noninterest income include income
from wealth management operations, gains recognized from the sale of available-for-sale securities,
income from deposit operations and the reversal of a liability previously established for an
impaired letter of credit.
Noninterest expense totaled $4.3 million for the quarter ended September 30, 2008, compared to
$3.6 million for the quarter ended September 30, 2007, an increase of $648 thousand, or 17.9%. For
the nine months ended September 30, 2008, noninterest expense totaled $12.5 million, compared to
$10.7 million for the nine months ended September 30, 2007, an increase of $1.8 million, or 16.3%.
In the current quarter and nine 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.
“Our conservative approach to managing our balance sheet has proven to be a reliable strength
that continues to serve the interests of our customers and community. Peoples Bank is a
well-capitalized bank that has avoided any involvement with subprime lending or investment
activity,” according to Bochnowski.
“The economy moves in cycles and we are well positioned for the future. Our tenth banking
center will open in Gary during the last week of October and our Valparaiso banking center is under
construction with an opening planned for next spring,” Bochnowski added.
At September 30, 2008, shareholders’ equity totaled at $51.4 million or 7.84% of total assets.
The book value of the Bancorp’s stock stood at $18.13 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
Key Ratios
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
Nine Months Ended |
| |
|
September 30, |
|
September 30, |
| |
|
(Unaudited) |
|
(Unaudited) |
| |
|
2008 |
|
2007 |
|
2008 |
|
2007 |
Return on equity |
|
|
11.75 |
% |
|
|
11.12 |
% |
|
|
11.37 |
% |
|
|
11.23 |
% |
Return on assets |
|
|
0.96 |
% |
|
|
0.94 |
% |
|
|
0.96 |
% |
|
|
0.95 |
% |
Basic earnings per share |
|
$ |
0.56 |
|
|
$ |
0.51 |
|
|
$ |
1.66 |
|
|
$ |
1.55 |
|
Diluted earnings per share |
|
$ |
0.56 |
|
|
$ |
0.51 |
|
|
$ |
1.65 |
|
|
$ |
1.54 |
|
Yield on loans |
|
|
5.97 |
% |
|
|
6.64 |
% |
|
|
6.09 |
% |
|
|
6.63 |
% |
Yield on security investments |
|
|
4.78 |
% |
|
|
4.60 |
% |
|
|
4.68 |
% |
|
|
4.46 |
% |
Total yield on earning assets |
|
|
5.73 |
% |
|
|
6.24 |
% |
|
|
5.80 |
% |
|
|
6.22 |
% |
Cost of deposits |
|
|
1.84 |
% |
|
|
3.08 |
% |
|
|
2.14 |
% |
|
|
3.05 |
% |
Cost of borrowings |
|
|
2.97 |
% |
|
|
4.38 |
% |
|
|
3.22 |
% |
|
|
4.29 |
% |
Total cost of funds |
|
|
2.00 |
% |
|
|
3.23 |
% |
|
|
2.27 |
% |
|
|
3.19 |
% |
Net interest margin — tax equivalent |
|
|
3.94 |
% |
|
|
3.19 |
% |
|
|
3.76 |
% |
|
|
3.19 |
% |
Noninterest income / average assets |
|
|
0.69 |
% |
|
|
0.74 |
% |
|
|
0.72 |
% |
|
|
0.71 |
% |
Noninterest expense / average assets |
|
|
2.62 |
% |
|
|
2.36 |
% |
|
|
2.58 |
% |
|
|
2.34 |
% |
Net noninterest margin / average assets |
|
|
-1.93 |
% |
|
|
-1.62 |
% |
|
|
-1.85 |
% |
|
|
-1.62 |
% |
Efficiency ratio |
|
|
61.86 |
% |
|
|
64.84 |
% |
|
|
62.85 |
% |
|
|
64.82 |
% |
Effective tax rate |
|
|
23.16 |
% |
|
|
23.52 |
% |
|
|
20.16 |
% |
|
|
24.22 |
% |
Dividend declared per common share |
|
$ |
0.36 |
|
|
$ |
0.36 |
|
|
$ |
1.08 |
|
|
$ |
1.08 |
|
| |
|
|
|
|
|
|
|
|
| |
|
September 30, |
|
|
| |
|
2008 |
|
December 31, |
| |
|
(Unaudited) |
|
2007 |
Net worth / total assets |
|
|
7.77 |
% |
|
|
8.32 |
% |
Book value per share |
|
$ |
18.13 |
|
|
$ |
18.01 |
|
Non-performing loans to total assets |
|
|
1.56 |
% |
|
|
1.37 |
% |
Non-performing loans to total loans |
|
|
2.10 |
% |
|
|
1.84 |
% |
Allowance for loan loss to non-performing loans |
|
|
54.42 |
% |
|
|
53.20 |
% |
Allowance for loan loss to loans outstanding |
|
|
1.14 |
% |
|
|
0.98 |
% |
Foreclosed real estate to total assets |
|
|
0.13 |
% |
|
|
0.02 |
% |
Consolidated Statements of Income
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
|
Nine Months Ended |
|
| |
|
September 30, |
|
|
September 30, |
|
| |
|
(Unaudited) |
|
|
(Unaudited) |
|
| (Dollars in thousands) |
|
2008 |
|
|
2007 |
|
|
2008 |
|
|
2007 |
|
Interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
$ |
7,266 |
|
|
$ |
7,678 |
|
|
$ |
22,061 |
|
|
$ |
23,091 |
|
Securities & short-term investments |
|
|
1,495 |
|
|
|
1,295 |
|
|
|
4,302 |
|
|
|
3,595 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest income |
|
|
8,761 |
|
|
|
8,973 |
|
|
|
26,363 |
|
|
|
26,686 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
2,365 |
|
|
|
3,846 |
|
|
|
8,255 |
|
|
|
11,295 |
|
Borrowings |
|
|
607 |
|
|
|
674 |
|
|
|
1,738 |
|
|
|
2,102 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest expense |
|
|
2,972 |
|
|
|
4,520 |
|
|
|
9,993 |
|
|
|
13,397 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
5,789 |
|
|
|
4,453 |
|
|
|
16,370 |
|
|
|
13,289 |
|
Provision for loan losses |
|
|
590 |
|
|
|
80 |
|
|
|
1,540 |
|
|
|
85 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income after provision for loan losses |
|
|
5,199 |
|
|
|
4,373 |
|
|
|
14,830 |
|
|
|
13,204 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees & service charges |
|
|
782 |
|
|
|
722 |
|
|
|
2,185 |
|
|
|
2,147 |
|
Wealth management operations |
|
|
201 |
|
|
|
192 |
|
|
|
618 |
|
|
|
530 |
|
Cash value increase from bank owned life insurance |
|
|
106 |
|
|
|
107 |
|
|
|
311 |
|
|
|
302 |
|
Gain on sale of securities, net |
|
|
41 |
|
|
|
51 |
|
|
|
187 |
|
|
|
99 |
|
Gain on sale of loans, net |
|
|
24 |
|
|
|
54 |
|
|
|
94 |
|
|
|
172 |
|
Gain/(loss) on foreclosed real estate |
|
|
(40 |
) |
|
|
12 |
|
|
|
(21 |
) |
|
|
6 |
|
Other income |
|
|
11 |
|
|
|
6 |
|
|
|
131 |
|
|
|
19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total noninterest income |
|
|
1,125 |
|
|
|
1,144 |
|
|
|
3,505 |
|
|
|
3,275 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation & benefits |
|
|
2,243 |
|
|
|
1,895 |
|
|
|
6,577 |
|
|
|
5,551 |
|
Occupancy & equipment |
|
|
733 |
|
|
|
610 |
|
|
|
2,148 |
|
|
|
1,880 |
|
Data processing |
|
|
213 |
|
|
|
213 |
|
|
|
641 |
|
|
|
658 |
|
Marketing |
|
|
85 |
|
|
|
71 |
|
|
|
304 |
|
|
|
190 |
|
Other |
|
|
1,003 |
|
|
|
840 |
|
|
|
2,821 |
|
|
|
2,457 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total noninterest expense |
|
|
4,277 |
|
|
|
3,629 |
|
|
|
12,491 |
|
|
|
10,736 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
2,047 |
|
|
|
1,888 |
|
|
|
5,844 |
|
|
|
5,743 |
|
Income tax expenses |
|
|
474 |
|
|
|
444 |
|
|
|
1,178 |
|
|
|
1,391 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
1,573 |
|
|
$ |
1,444 |
|
|
$ |
4,666 |
|
|
$ |
4,352 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NorthWest Indiana Bancorp
Quarterly Financial Report
Balance Sheet Data
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
September 30, |
|
|
|
|
|
|
|
|
|
|
|
| |
|
2008 |
|
|
December 31, |
|
|
|
Change |
|
Mix |
|
| (Dollars in thousands) |
|
(Unaudited) |
|
|
2007 |
|
|
% |
|
|
% |
|
Total assets |
|
$ |
655,831 |
|
|
$ |
628,718 |
|
|
|
4.3 |
% |
|
|
|
|
Cash & cash equivalents |
|
|
12,601 |
|
|
|
12,111 |
|
|
|
4.0 |
% |
|
|
|
|
Securities — available for sale |
|
|
100,630 |
|
|
|
96,286 |
|
|
|
4.5 |
% |
|
|
|
|
Securities — held to maturity |
|
|
18,589 |
|
|
|
18,358 |
|
|
|
1.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan receivable: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction and land development |
|
|
51,385 |
|
|
|
46,289 |
|
|
|
11.0 |
% |
|
|
10.6 |
% |
1-4 first liens |
|
|
198,908 |
|
|
|
201,302 |
|
|
|
-1.2 |
% |
|
|
40.9 |
% |
Multifamily |
|
|
13,154 |
|
|
|
12,884 |
|
|
|
2.1 |
% |
|
|
2.7 |
% |
Commercial real estate |
|
|
126,313 |
|
|
|
119,258 |
|
|
|
5.9 |
% |
|
|
26.0 |
% |
Commercial business |
|
|
50,898 |
|
|
|
46,954 |
|
|
|
8.4 |
% |
|
|
10.4 |
% |
1-4 Junior Liens |
|
|
5,322 |
|
|
|
5,805 |
|
|
|
-8.3 |
% |
|
|
1.1 |
% |
HELOC |
|
|
20,504 |
|
|
|
18,595 |
|
|
|
10.3 |
% |
|
|
4.2 |
% |
Lot loans |
|
|
3,378 |
|
|
|
3,309 |
|
|
|
2.1 |
% |
|
|
0.7 |
% |
Consumer |
|
|
2,093 |
|
|
|
2,399 |
|
|
|
-12.8 |
% |
|
|
0.4 |
% |
Government and other |
|
|
14,469 |
|
|
|
11,664 |
|
|
|
24.0 |
% |
|
|
3.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans |
|
|
486,424 |
|
|
|
468,459 |
|
|
|
3.8 |
% |
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest bearing checking |
|
|
48,535 |
|
|
|
44,799 |
|
|
|
8.3 |
% |
|
|
9.3 |
% |
Interest bearing checking |
|
|
84,817 |
|
|
|
71,437 |
|
|
|
18.7 |
% |
|
|
16.2 |
% |
Savings |
|
|
53,641 |
|
|
|
52,524 |
|
|
|
2.1 |
% |
|
|
10.3 |
% |
MMDA |
|
|
120,004 |
|
|
|
110,416 |
|
|
|
8.7 |
% |
|
|
23.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total core deposits |
|
|
306,997 |
|
|
|
279,176 |
|
|
|
10.0 |
% |
|
|
58.8 |
% |
Certificates of deposit |
|
|
215,452 |
|
|
|
214,208 |
|
|
|
0.6 |
% |
|
|
41.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits |
|
|
522,449 |
|
|
|
493,384 |
|
|
|
5.9 |
% |
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings |
|
|
77,137 |
|
|
|
76,930 |
|
|
|
0.3 |
% |
|
|
|
|
Stockholder’s equity |
|
|
50,936 |
|
|
|
52,733 |
|
|
|
-3.4 |
% |
|
|
|
|
Asset Quality
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
June 30, |
|
|
|
|
|
|
|
| |
|
2008 |
|
|
December 31, |
|
|
Change |
|
| (Dollars in thousands) |
|
(Unaudited) |
|
|
2007 |
|
|
% |
|
Nonaccruing loans |
|
$ |
9,113 |
|
|
$ |
7,776 |
|
|
|
17.2 |
% |
Accruing loans delinquent more than 90 days |
|
|
1,120 |
|
|
|
842 |
|
|
|
33.0 |
% |
Foreclosed real estate |
|
|
826 |
|
|
|
136 |
|
|
|
507.4 |
% |
|
|
|
|
|
|
|
|
|
|
Total nonperforming assets |
|
|
11,059 |
|
|
|
8,754 |
|
|
|
26.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses (ALL): |
|
|
|
|
|
|
|
|
|
|
|
|
ALL specific allowances for impaired loans |
|
|
1,424 |
|
|
|
824 |
|
|
|
72.8 |
% |
ALL general allowances for loan portfolio |
|
|
4,145 |
|
|
|
3,757 |
|
|
|
10.3 |
% |
|
|
|
|
|
|
|
|
|
|
Total ALL |
|
|
5,569 |
|
|
|
4,581 |
|
|
|
21.6 |
% |