Exhibit 99.1

 
FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION
October 29, 2010 CONTACT DAVID A. BOCHNOWSKI
  (219) 853-7575
 

NORTHWEST INDIANA BANCORP
REPORTS RESULTS FOR QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2010

Munster, Indiana - NorthWest Indiana Bancorp, the holding company for Peoples Bank, reported net income of $1.0 million for the quarter ended September 30, 2010, a 174.6% increase over the net loss of $1.4 million reported for the third quarter of 2009.

Earnings for the nine-month period ended September 30, 2010 were $4.0 million compared to net income of $1.4 million for the same period in 2009.  The Bancorp’s nine-month results were a 196.8% increase over the results for the first nine months of 2009.

“Our operating results improved due to strong core income and operating efficiency,” said David A. Bochnowski, Chairman and Chief Executive Officer.  “We are pleased that our results for the current year outpace national averages as Peoples Bank continues to weather the storm of the current economy.”

Earnings per basic and diluted share for the third quarter of 2010 were $0.37 compared to a $0.50 loss per basic and diluted share for the third quarter of 2009.  For the quarter ended September 30, 2010, return on average assets (ROA) was 0.62% and return on average equity (ROE) was 7.09%.  For the first nine months of 2010 earnings per basic and diluted share were $1.43, compared to $0.48 earnings per basic and diluted share for the first nine months of 2009.  For the nine months ended September 30, 2010, ROA was 0.80% and ROE was 9.50%.

“Our results were favorably impacted by the continued strong performance of our Wealth Management Group, gains taken on the sale of home mortgages consistent with our interest rate risk strategy, and gains taken on the sale of investments available for sale,” noted Bochnowski.

“The Bank continues to monitor the performance of our loan portfolio as we take appropriate action to build our provision for estimated losses in light of national economic conditions.  During the third quarter we increased our reserves to reflect elevated risk in our loan participation portfolio” Bochnowski said.

“Management is focused on maintaining a strong capital position during these challenging times.   Peoples Bank continues to exceed all regulatory capital requirements and is considered well capitalized under all regulatory standards, “Bochnowski reported.

 
 
 
 
“Peoples Bank just opened our newest banking center in St. John, and we are happy to report that this location has garnered robust activity during the first few days of operation.  We will continue to look for opportunities to serve our customers and communities with the products, locations, and up-to-date electronic banking services to meet their needs,” said Bochnowski.

Net Interest Income
Net interest income, the difference between interest income from loans and investments and interest expense paid to fund providers, totaled $6.3 million for the quarter ended September 30, 2010, compared to $5.7 million for the quarter ended September 30, 2009, an increase of $515 thousand or 9.0%.  For the nine months ended September 30, 2010, net interest income totaled $18.9 million, compared to $17.3 million for the nine months ended September 30, 2009, an increase of $1.7 million or 9.8%.  The Bancorp’s net interest margin on a tax adjusted basis was 4.27% for the quarter ended September 30, 2010, compared to 3.91% for the quarter ended September 30, 2009.  For the nine months ended September 30, 2010, the tax adjusted net interest margin was 4.24%, compared to 3.68% for the nine months ended September 30, 2009.  The Bancorp’s net interest income was positively impacted by core deposit growth and a continued decrease in the cost of funds as a result of the Federal Reserve’s action in maintaining a low interest rate environment.

Noninterest Income
Noninterest income from banking activities for the quarter ended September 30, 2010 totaled $1.28 million, compared to $1.26 million for the quarter ended September 30, 2009, an increase of $12 thousand or 1.0%.  The change during the current quarter was positively impacted by an increase in gains from the sale of securities and loans, and an increase in income from Wealth Management operations.  For the nine months ended September 30, 2010, noninterest income totaled $4.2 million, compared to $4.4 million for the nine months ended September 30, 2009, a decrease of $140 thousand or 3.2%.  The decrease in noninterest income for the nine months ended September 30, 2010 resulted from a reduction in gains from the sale of loans, as mortgage loan refinance activity declined during 2010 compared to 2009.

Noninterest Expense
Noninterest expense related to operating activities totaled $4.78 million for the quarter ended September 30, 2010, compared to $4.77 million for the quarter ended September 30, 2009, an increase of $6 thousand or 0.1%.  For the nine months ended September 30, 2010, noninterest expense totaled $14.34 million, compared to $14.28 million for the nine months ended September 30, 2009, an increase of $63 thousand or 0.4%.  Noninterest expense for the nine-month period ended September 30, 2010 was impacted by increased compensation and occupancy costs related to the opening of the Valparaiso Banking Center in 2009.  Also, for the nine-month period, Federal deposit insurance premiums decreased as a result of an industry wide FDIC special assessment at September 30, 2009 that was not repeated in 2010.

Funding
At September 30, 2010, core deposits totaled $334.6 million, an increase of $20.9 million compared to December 31, 2009.  Core deposits include checking, savings, and money market accounts and represented 62.2% of the Bancorp’s total deposits at September 30, 2010.  As a result of strong core deposit growth, management decreased certificate of deposit balances by $23.6 million, which had a positive impact of lowering the Bank’s cost of funds.  At September 30, 2010, borrowings and repurchase agreements totaled $49.7 million, a decrease of $13.3 million from December 31, 2009, as excess liquidity was used to repay borrowings.

 
 
 
 
Lending
 The Bancorp’s lending portfolio totaled $428.8 million at September 30, 2010, a decrease of $29.4 million, compared to December 31, 2009.  During the current nine months, commercial business and commercial real estate loans increased by $5.7 million.  Mortgage loans decreased by $22.6 million as a result of the sales of fixed rate loans into the secondary market.  In addition, construction and land development, as well as government and consumer loans, decreased by $12.5 million.

Asset Quality
Non-performing loans totaled $23.5 million at September 30, 2010, compared to $18.6 million at December 31, 2009, an increase of $4.9 million or 26.4%.  The increase is primarily related to one $4.4 million commercial real estate participation loan that was placed on nonaccrual status during the third quarter.  The current level of non-performing loans is concentrated with five commercial real estate participation loans in the aggregate of $13.9 million, which includes the loan referred to in the preceding sentence.  The Bancorp’s ratio of non-performing loans to total assets was 3.61% at September 30, 2010, compared to 2.80% at December 31, 2009.

For the three months ended September 30, 2010, loan loss provisions totaled $1.6 million, while $4.7 million in provisions were recorded for the three months ended September 30, 2009.  For the nine months ended September 30, 2010, loan loss provisions totaled $4.1 million, while $6.5 million in provisions were recorded for the nine months ended September 30, 2009.  The current year loan loss provisions were related to continued elevated credit risk in the commercial real estate, commercial business and mortgage loan portfolios.  Loan charge-offs, net of recoveries, totaled $2.0 million for the nine months ended September 30, 2010, compared to $7.1 million for the nine months ended September 30, 2009.  At September 30, 2010, the allowance for loan losses totaled $8.2 million and is considered adequate by management.  The allowance for loan losses as a percentage of totals loans was 1.91% at September 30, 2010, compared to 1.33% at December 31, 2009.  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.

Capital Adequacy
At September 30, 2010, shareholders’ equity stood at $57.5 million or 8.8% of total assets.  The Bancorp’s regulatory capital ratios at September 30, 2010 were 12.5% for total capital to risk-weighted assets, 11.2% for tier 1 capital to risk-weighted assets and 8.2% for tier 1 capital to adjusted average assets.  Under all regulatory capital requirements, the Bancorp is considered well capitalized.  The book value of the Bancorp’s stock stood at $20.34 at the end of the third quarter.

The NorthWest Indiana Bancorp’s common stock is traded on the OTC Bulletin Board under NWIN.   The Bancorp’s subsidiary, Peoples Bank, has offices in Crown Point, Dyer, East Chicago, Gary, Hammond, Hobart, Merrillville, Munster, St. John, Schererville and Valparaiso, 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, economic conditions resulting from the current turmoil in the financial services industry, including depressed demand in the housing market, 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, 2009.  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)
  
   
2010
    
2009
    
2010
    
2009
  
Return on equity
     7.09 %     -10.20 %     9.50 %     3.32 %
Return on assets
     0.62 %     -0.84 %     0.80 %     0.27 %
Basic earnings per share
   $ 0.37     $ -0.50     $ 1.43     $ 0.48  
Diluted earnings per share
   $ 0.37     $ -0.50     $ 1.43     $ 0.48  
Yield on loans
     5.38 %     5.38 %     5.40 %     5.53 %
Yield on security investments
     3.30 %     3.98 %     3.51 %     4.13 %
Total yield on earning assets
     4.78 %     5.03 %     4.88 %     5.19 %
Cost of deposits
     0.64 %     1.22 %     0.75 %     1.41 %
Cost of borrowings
     1.94 %     2.59 %     2.13 %     2.62 %
Total cost of funds
     0.75 %     1.37 %     0.87 %     1.55 %
Net interest margin - tax equivalent
     4.27 %     3.91 %     4.24 %     3.90 %
Noninterest income / average assets
     0.76 %     0.76 %     0.84 %     0.87 %
Noninterest expense / average assets
     2.87 %     2.87 %     2.83 %     2.84 %
Net noninterest margin / average assets
     -2.11 %     -2.11 %     -1.99 %     -1.97 %
Efficiency ratio
     63.52 %     68.19 %     61.89 %     66.00 %
Effective tax rate
     8.30 %     8.99 %     14.20 %     -57.54 %
Dividend declared per common share
   $ 0.15     $ 0.32     $ 0.57     $ 1.00  
                                 
                                 
   
September 30,
                          
   
2010
    
December 31,
                  
   
(Unaudited)
    
2009
                  
Net worth / total assets
     8.81 %     8.03 %                
Book value per share
   $ 20.34     $ 18.83                  
Non-performing loans to total assets
     3.61 %     2.80 %                
Non-performing loans to total loans
     5.49 %     4.05 %                
Allowance for loan loss to non-performing loans
     34.82 %     32.93 %                
Allowance for loan loss to loans outstanding
     1.91 %     1.33 %                
Foreclosed real estate to total assets
     0.78 %     0.57 %                
   
                                 
Consolidated Statements of Income
  
Three Months Ended
    
Nine Months Ended
  
(Dollars in thousands)
  
September 30,
    
September 30,
  
   
(Unaudited)
    
(Unaudited)
  
   
2010
    
2009
    
2010
    
2009
  
Interest income:
                                
Loans
   $ 5,933     $ 6,276     $ 18,368     $ 19,686  
Securities & short-term investments
     1,462       1,541       4,570       4,646  
Total interest income
     7,395       7,817       22,938       24,332  
Interest expense:
                                
Deposits
     880       1,636       3,135       5,687  
Borrowings
     256       437       859       1,384  
Total interest expense
     1,136       2,073       3,994       7,071  
Net interest income
     6,259       5,744       18,944       17,261  
Provision for loan losses
     1,615       4,675       4,120       6,490  
Net interest income after provision for loan losses
     4,644       1,069       14,824       10,771  
Noninterest income:
                                
Fees & service charges
     652       694       1,896       2,004  
Gain on sale of securities, net
     111       93       853       437  
Wealth management operations
     353       270       887       672  
Gain on sale of loans, net
     335       167       607       1,032  
Cash value increase from bank owned life insurance
     102       98       306       306  
Loss on foreclosed real estate
     (266 )     (26 )     (201 )     (58 )
Other-than-temporary impairment of securities
     (15 )     (44 )     (128 )     (44 )
Other income
     3       11       12       23  
Total noninterest income
     1,275       1,263       4,232       4,372  
Noninterest expense:
                                
Compensation & benefits
     2,426       2,451       7,293       7,061  
Occupancy & equipment
     794       782       2,386       2,315  
Federal deposit insurance premiums
     231       246       727       986  
Data processing
     236       222       700       652  
Marketing
     90       153       329       368  
Other
     1,007       924       2,906       2,896  
Total noninterest expense
     4,784       4,778       14,341       14,278  
Income before income taxes
     1,135       (2,446 )     4,715       865  
Income tax expenses/(benefit)
     94       (1,051 )     669       (498 )
Net income/(loss)
   $ 1,041     $ (1,395 )   $ 4,046     $ 1,363  
   
 
 
 
 

   
NorthWest Indiana Bancorp
  
Quarterly Financial Report
  
                         
Balance Sheet Data
                        
(Dollars in thousands)
  
September 30,
                    
   
2010
    
December 31,
    
Change
    
Mix
  
   
(Unaudited)
    
2009
    
%
    
%
  
Total assets
   $ 652,115     $ 661,806       -1.5 %      
Cash & cash equivalents
     16,051       13,222       21.4 %      
Securities - available for sale
     141,736       124,776       13.6 %      
Securities - held to maturity
     18,476       19,557       -5.5 %      
                               
Loans receivable:
                              
Construction and land development
     48,157       53,288       -9.6 %     10.6 %
1-4 first liens
     133,288       155,937       -14.5 %     40.9 %
Multifamily
     7,971       9,165       -13.0 %     2.7 %
Commercial real estate
     135,676       132,278       2.6 %     26.0 %
Commercial business
     65,378       63,099       3.6 %     10.4 %
1-4 Junior Liens
     2,789       3,227       -13.6 %     1.1 %
HELOC
     20,121       22,264       -9.6 %     4.2 %
Lot loans
     3,339       3,010       10.9 %     0.7 %
Consumer
     870       1,504       -42.2 %     0.4 %
Government and other
     11,223       14,473       -22.5 %     3.0 %
Total loans
     428,812       458,245       -6.4 %     100.0 %
                                 
Deposits:
                                
Core deposits:
                                
Noninterest bearing checking
     53,515       42,390       26.2 %     9.3 %
Interest bearing checking
     103,539       102,287       1.2 %     16.2 %
Savings
     62,800       56,920       10.3 %     10.3 %
MMDA
     114,774       112,071       2.4 %     23.0 %
Total core deposits
     334,628       313,668       6.7 %     58.8 %
Certificates of deposit
     203,273       226,859       -10.4 %     41.2 %
Total deposits
     537,901       540,527       -0.5 %     100.0 %
                                 
Borrowings
     49,729       63,022       -21.1 %        
Stockholder's equity
     57,454       53,078       8.2 %        
   
                                 
Asset Quality
  
September 30,
                          
(Dollars in thousands)
  
2010
    
December 31,
    
Change
          
   
(Unaudited)
    
2009
    
%
          
Nonaccruing loans
   $ 23,238     $ 17,074       36.1 %        
Accruing loans delinquent more than 90 days
     296       1,491       -80.1 %        
Securities in non-accrual
     671       704       -4.7 %        
Foreclosed real estate
     5,068       3,747       35.3 %        
Total nonperforming assets
     29,273       23,016       27.2 %        
                                 
Allowance for loan losses (ALL):
                                
ALL specific allowances for impaired loans
     1,041       1,179       -11.7 %        
ALL general allowances for loan portfolio
     7,154       4,935       45.0 %        
Total ALL
     8,195       6,114       34.0 %        
   
                                 
Capital Adequacy
  
Actual
    
Required to be
                  
   
Ratio
    
well capitalized
                  
                                 
Total capital to risk-weighted assets
     12.5 %     10.0 %                
Tier 1 capital to risk-weighted assets
     11.2 %     6.0 %                
Tier 1 capital to adjusted average assets
     8.2 %     5.0 %