Exhibit 99.1

FOR IMMEDIATE RELEASE
FOR FURTHER INFORMATION
October 27, 2011
CONTACT DAVID A. BOCHNOWSKI
 
(219) 853-7575

 
NORTHWEST INDIANA BANCORP

REPORTS RESULTS FOR QUARTER AND NINE MONTHS
ENDED SEPTEMBER 30, 2011


Munster, Indiana - NorthWest Indiana Bancorp (“the Bancorp”), the holding company for Peoples Bank (“the Bank”), reported an increase in earnings with net income of $1.13 million for the three months ended September 30, 2011, compared to $1.04 million for the three months ended September 30, 2010.

The earnings of $1.13 million for the three months ended September 30, 2011, represent earnings of $0.40 per basic and diluted share.  For the current three month period, the return on average assets (ROA) was 0.70% and the return on equity (ROE) was 7.34%.

“Peoples Bank continued to show earnings improvement during the third quarter of this year as net income increased 8.5% over the third quarter of 2010.  Our core earnings remain strong and asset quality continues to improve, a good sign that economic conditions are improving modestly,” said David A. Bochnowski, Chairman and Chief Executive Officer.

“The Bank continues to grow despite an uncertain economy with total assets up 3.2% for the first nine months of the year.  Customer response to our products and services has driven our core account growth as checking, savings, and money market account balances increased $24.48 million during the first nine months of the year,” said Bochnowski.  At the end of September 2011 core accounts represented 65.6% of total deposits.

According to Bochnowski, the Bank’s asset quality, as measured by non-performing assets has improved 21.8% since the end of 2010.  In addition, the Bank’s strong earnings have resulted in increased capital levels with tangible equity capital at 9.5% of assets at the end of September, 2011.  The Bancorp and Peoples Bank continue to exceed all regulatory capital requirements and are considered well capitalized under applicable banking regulations.

For the nine months ended September 30, 2011, the Bancorp’s net income was $3.98 million, compared to $4.05 million for the nine months ended September 30, 2010.  The earnings of $3.98 million for the nine months ended September 30, 2011, represent earnings of $1.41 per basic and diluted share.  For the current nine month period, the return on average assets was 0.83% and the return on equity was 8.91%.

Net Interest Income
Net interest income, the difference between interest income from loans and investments and interest expense paid to funds providers, totaled $5.92 million for the three months ended September 30, 2011, compared to $6.26 million for the three months ended September 30, 2010, a decrease of $344 thousand or 5.5%.  For the nine months ended September 30, 2011, net interest income totaled $17.82 million, compared to $18.94 million for the nine months ended September 30, 2010, a decrease of $1.12 million or 5.9%.  The net interest income decrease for both three and nine month periods is a result of reduced loan balances and lower asset yields.  The Bancorp’s net interest margin on a tax adjusted basis was 4.14% for the three months ended September 30, 2011, compared to 4.27% for the three months ended September 30, 2010.  For the nine months ended September 30, 2011, the tax adjusted net interest margin was 4.19%, compared to 4.24% for the nine months ended September 30, 2010.  The Bancorp’s net interest margin continues to benefit from core deposit growth and a low 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 three months ended September 30, 2011 totaled $1.25 million, compared to $1.28 million for the three months ended September 30, 2010, a decrease of $24 thousand or 1.9%.  For the nine months ended September 30, 2011, noninterest income totaled $4.68 million, compared to $4.23 million for the nine months ended September 30, 2010, an increase of $452 thousand or 10.7%.  The increase for the nine month period is primarily related to the Bancorp’s favorable settlement in its lawsuit against the lead lender of a commercial real estate participation loan.

Noninterest Expense
Noninterest expense related to operating activities totaled $5.24 million for the three months ended September 30, 2011, compared to $4.78 million for the three months ended September 30, 2010, an increase of $451 thousand or 9.4%.  For the nine months ended September 30, 2011, noninterest expense totaled $15.07 million, compared to $14.34 million for the nine months ended September 30, 2010, an increase of $731 thousand or 5.1%.  The increase for both three and nine month periods is primarily related to foreclosure and legal expenses, and additional expenses related to the operations of the St. John Banking Center, which opened in October 2010.

Funding
At September 30, 2011, core deposits totaled $346.31 million, an increase of $24.48 million or 7.6%, compared to December 31, 2010.  Core deposits include checking, savings, and money market accounts and represented 65.6% of the Bancorp’s total deposits at September 30, 2011.  As a result of core deposit growth and increased liquidity from loan repayments, management reduced certificate of deposit balances by $17.09 million during the year, which had a positive impact of lowering the Bancorp’s cost of funds.  At September 30, 2011, borrowings and repurchase agreements totaled $53.81 million, an increase of $5.20 million from December 31, 2010.

Lending
The Bancorp’s loan portfolio totaled $407.10 million at September 30, 2011, a decrease of $11.14 million or 2.7%, compared to December 31, 2010.  During the first nine months of 2011, commercial real estate, commercial business and government loans increased by $12.33 million.  Mortgage loans decreased by $546 thousand, as a result of sales of fixed rate loans into the secondary market.  In addition, construction and land development loans, as well as multifamily and consumer loans, decreased by an aggregate of $22.92 million during the year.

“As a result of the improvement in asset quality, the Bank has taken lower loan loss provisions for the most recent three months as well as the first nine months of this year.  The continuation of this positive trend strengthens our balance sheet and improves our earnings outlook,” Bochnowski noted.
 
 
 

 

 
Investing
The Bancorp’s securities portfolio totaled $184.39 million at September 30, 2011, an increase of $23.94 million or 14.9%, compared to December 31, 2010.  During 2011, management has invested the Bancorp’s excess liquidity in the securities portfolio, which has had a positive impact on earnings.

Asset Quality
At September 30, 2011, past due loans totaled $23.11 million, compared to $33.15 million at December 31, 2010, a decrease of $10.04 million or 30.3%.  Non-performing loans totaled $19.70 million at September 30, 2011, compared to $24.12 million at December 31, 2010, a decrease of $4.42 million or 18.3%.  The current level of non-performing loans is concentrated with five geographically diverse commercial real estate participation loans that aggregate to $11.73 million. These participations were purchased from other originators in the period from 2005 through 2007 prior to the most recent recession.  The Bancorp’s ratio of non-performing assets to total assets was 3.38% at September 30, 2011, compared to 4.46% at December 31, 2010.

For the three months ended September 30, 2011, loan loss provisions totaled $570 thousand, while $1.62 million in provisions were recorded for the three months ended September 30, 2010.  For the nine months ended September 30, 2011, loan loss provisions totaled $2.64 million, while $4.12 million in provisions were recorded for the nine months ended September 30, 2010.  The 2011 loan loss provisions were related to the current credit risk in the commercial real estate participation and commercial real estate loan portfolios.  Loan charge-offs, net of recoveries, totaled $3.39 million for the nine months ended September 30, 2011, compared to $2.04 million for the nine months ended September 30, 2010.  At September 30, 2011, the allowance for loan losses totaled $8.36 million and is considered adequate by management.  The allowance for loan losses as a percentage of total loans was 2.05% at September 30, 2011, compared to 2.18% at December 31, 2010.

Capital Adequacy
At September 30, 2011, shareholders’ equity stood at $62.07 million or 9.5% of total assets.  The Bancorp’s regulatory capital ratios at September 30, 2011 were 14.0% for total capital to risk-weighted assets, 12.8% for tier 1 capital to risk-weighted assets and 9.1% 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 $21.91 per share at the end of the third quarter 2011.

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, 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 in the financial services industry, including on-going 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, 2010.  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)  
    2011     2010     2011     2010  
Return on equity     7.34 %     7.09 %     8.91 %     9.50 %
Return on assets     0.70 %     0.62 %     0.83 %     0.80 %
Basic earnings per share   $ 0.40     $ 0.37     $ 1.41     $ 1.43  
Diluted earnings per share   $ 0.40     $ 0.37     $ 1.41     $ 1.43  
Yield on loans     5.08 %     5.38 %     5.10 %     5.40 %
Yield on security investments     3.35 %     3.30 %     3.54 %     3.51 %
Total yield on earning assets     4.43 %     4.78 %     4.53 %     4.88 %
Cost of deposits     0.44 %     0.64 %     0.50 %     0.75 %
Cost of borrowings     1.46 %     1.94 %     1.54 %     2.13 %
Total cost of funds     0.53 %     0.75 %     0.59 %     0.87 %
Net interest margin - tax equivalent     4.14 %     4.27 %     4.19 %     4.24 %
Noninterest income / average assets     0.78 %     0.76 %     0.97 %     0.84 %
Noninterest expense / average assets     3.25 %     2.87 %     3.13 %     2.83 %
Net noninterest margin / average assets     -2.47 %     -2.11 %     -2.16 %     -1.99 %
Efficiency ratio     73.04 %     63.52 %     66.97 %     61.89 %
Effective tax rate     16.97 %     8.30 %     17.01 %     14.20 %
Dividend declared per common share   $ 0.15     $ 0.15     $ 0.45     $ 0.57  
   
   
                                 
    September 30,                          
     2011     December 31,                  
    (Unaudited)      2010                  
Net worth / total assets     9.54 %     8.89 %                
Book value per share   $ 21.91     $ 19.84                  
Non-performing assets to total assets     3.38 %     4.46 %                
Non-performing loans to total loans     4.84 %     5.77 %                
Allowance for loan loss to non-performing loans     42.46 %     37.82 %                
Allowance for loan loss to loans outstanding     2.05 %     2.18 %                
Foreclosed real estate to total assets     0.25 %     0.52 %                
   
   
Consolidated Statements of Income   Three Months Ended     Nine Months Ended  
(Dollars in thousands)   September 30,     September 30,  
    (Unaudited)     (Unaudited)  
    2011     2010     2011     2010  
Interest income:                                
Loans   $ 5,149     $ 5,933     $ 15,710     $ 18,368  
Securities & short-term investments     1,532       1,462       4,645       4,570  
Total interest income     6,681       7,395       20,355       22,938  
Interest expense:                                
Deposits     581       880       1,966       3,135  
Borrowings     185       256       569       859  
Total interest expense     766       1,136       2,535       3,994  
Net interest income     5,915       6,259       17,820       18,944  
Provision for loan losses     570       1,615       2,635       4,120  
Net interest income after provision for loan losses     5,345       4,644       15,185       14,824  
Noninterest income:                                
Fees & service charges     644       652       1,865       1,896  
Wealth management operations     293       353       877       887  
Gain on sale of securities, net     183       111       683       853  
Cash value increase from bank owned life insurance     97       102       299       306  
Gain on sale of loans, net     27       335       137       607  
Gain/(loss) on foreclosed real estate     (2 )     (266 )     786       (201 )
Other-than-temporary impairment of securities     -       (15 )     -       (128 )
Other income     9       3       37       12  
Total noninterest income     1,251       1,275       4,684       4,232  
Noninterest expense:                                
Compensation & benefits     2,519       2,426       7,430       7,293  
Occupancy & equipment     877       794       2,569       2,386  
Federal deposit insurance premiums     208       231       805       727  
Data processing     246       236       747       700  
Marketing     88       90       304       329  
Other     1,297       1,007       3,217       2,906  
Total noninterest expense     5,235       4,784       15,072       14,341  
Income before income taxes     1,361       1,135       4,797       4,715  
Income tax expenses     231       94       816       669  
Net income   $ 1,130     $ 1,041     $ 3,981     $ 4,046  
 
 
 

 

    
NorthWest Indiana Bancorp  
Quarterly Financial Report  
   
Balance Sheet Data                        
(Dollars in thousands)                        
   
 September 30,
2011
    December 31,     Change     Mix  
    (Unaudited)     2010     %     %  
Total assets   $ 650,957     $ 631,053       3.2 %      
Cash & cash equivalents     23,314       10,938       113.1 %      
Securities - available for sale     184,391       142,055       29.8 %      
Securities - held to maturity     -       18,397       -100.0 %      
   
Loans receivable:                              
Construction and land development     26,300       46,371       -43.3 %     6.5 %
1-4 first liens     127,413       127,959       -0.4 %     31.3 %
Multifamily     7,423       7,605       -2.4 %     1.8 %
Commercial real estate     146,915       138,506       6.1 %     36.1 %
Commercial business     65,430       61,726       6.0 %     16.1 %
1-4 Junior Liens     1,922       2,434       -21.0 %     0.5 %
HELOC     17,722       19,325       -8.3 %     4.4 %
Lot loans     2,835       3,164       -10.4 %     0.7 %
Consumer     539       762       -29.3 %     0.1 %
Government and other     10,596       10,381       2.1 %     2.5 %
Total loans     407,095       418,233       -2.7 %     100.0 %
   
Deposits:                                
Core deposits:                                
Noninterest bearing checking     61,737       50,712       21.7 %     11.7 %
Interest bearing checking     98,101       90,984       7.8 %     18.6 %
Savings     70,394       65,146       8.1 %     13.3 %
MMDA     116,073       114,983       0.9 %     22.0 %
Total core deposits     346,305       321,825       7.6 %     65.6 %
Certificates of deposit     181,358       198,446       -8.6 %     34.4 %
Total deposits     527,663       520,271       1.4 %     100.0 %
   
Borrowings     53,813       48,618       10.7 %        
Stockholder's equity     62,073       56,089       10.7 %        
   
   
Asset Quality
(Dollars in thousands)
 
 September 30,
2011
    December 31,     Change          
    (Unaudited)     2010     %          
Nonaccruing loans   $ 19,508     $ 23,967       -18.6 %        
Accruing loans delinquent more than 90 days     187       148       26.4 %        
Securities in non-accrual     717       742       -3.4 %        
Foreclosed real estate     1,606       3,298       -51.3 %        
Total nonperforming assets     22,018       28,155       -21.8 %        
   
Allowance for loan losses (ALL):                                
ALL specific allowances for impaired loans     1,691       2,794       -39.5 %        
ALL general allowances for loan portfolio     6,671       6,327       5.4 %        
Total ALL     8,362       9,121       -8.3 %        
   
   
Capital Adequacy  
 September 30,
2011
    Required to be                  
    Actual Ratio     well capitalized                  
   
Total capital to risk-weighted assets     14.0 %     10.0 %                
Tier 1 capital to risk-weighted assets     12.8 %     6.0 %                
Tier 1 capital to adjusted average assets     9.1 %     5.0 %