Filed Pursuant to Rule 424(b)(3)
Registration No. 333-224328

 

 

PROXY STATEMENT FOR THE SPECIAL MEETING OF

STOCKHOLDERS OF FIRST PERSONAL FINANCIAL CORP.

and

PROSPECTUS OF

NORTHWEST INDIANA BANCORP

The boards of directors of First Personal Financial Corp. (“First Personal”) and NorthWest Indiana Bancorp (“NWIN”) have approved an Agreement and Plan of Merger (which is referred to herein as the “Merger Agreement”) that provides for First Personal to merge with and into NWIN. If the merger is approved by First Personal’s stockholders and all other closing conditions are satisfied, each outstanding share of First Personal common stock (other than shares then held of record by NWIN, shares held as treasury shares of First Personal, or dissenting shares) owned by stockholders owning of record and/or beneficially at least 100 shares of First Personal common stock shall be converted into the right to receive 0.1246 shares of NWIN common stock (subject to certain adjustments as described in the Merger Agreement), and $6.67 in cash. Stockholders of First Personal who own of record and/or beneficially fewer than 100 shares of First Personal common stock will be entitled to receive only fixed consideration of $12.12 per share in cash and will not be entitled to receive any shares of NWIN common stock. Each First Personal stockholder also will receive cash in lieu of any fractional shares of NWIN common stock that such stockholder would otherwise receive in the merger, with the amount of cash based on the market value of one share of NWIN common stock determined shortly before the closing of the merger. Additionally, First Personal has the right to terminate the Merger Agreement during the five-business day period following the 15^th business day prior to the scheduled closing date of the merger if the volume weighted average of the daily closing sales prices of a share of NWIN common stock during the immediately preceding 15 consecutive trading days is less than $35.00, and NWIN’s share price declines by an amount that is at least 20% greater than the corresponding price decline in the SNL Small Cap U.S. Bank and Thrift Index during the same period. However, if First Personal elects to exercise its termination rights, NWIN has the right to prevent First Personal’s termination under those circumstances by agreeing to increase the stock consideration pursuant to a formula set forth in the Merger Agreement.

Based on the 1,299,763 shares of First Personal common stock expected to be outstanding as of the closing of the merger, NWIN will issue an aggregate of 161,935 shares of common stock for the stock consideration and pay an aggregate of $8,670,117 in cash for the cash consideration. Subject to the adjustments described in the Merger Agreement and based on NWIN’s closing stock price of $44.25 on May 1, 2018, the value of the aggregate consideration that First Personal’s stockholders will receive in the merger is approximately $15.8 million. The boards of directors of both First Personal and NWIN believe that the merger is in the best interests of each of their respective companies and shareholders.

Your vote is very important. We cannot complete the merger unless the stockholders of First Personal approve the Merger Agreement and the merger. This document is a proxy statement that First Personal is using to solicit proxies for use at its special meeting of stockholders to be held on June 27, 2018 to vote on the Merger Agreement and the merger. This document also serves as a prospectus relating to NWIN’s issuance of up to 161,935 shares of NWIN common stock in connection with the merger. This proxy statement/prospectus describes the First Personal special meeting, the merger proposal, and other related matters.

First Personal’s board of directors unanimously recommends that First Personal’s stockholders vote “FOR” approval of the Merger Agreement and the merger.

NWIN’s common stock is not listed on any national securities exchange, but rather is quoted on the OTC Pink Marketplace, which is maintained by OTC Markets Group, Inc., and on the OTC Bulletin Board, which is maintained by the Financial Industry Regulatory Authority, Inc., under the symbol “NWIN.” On February 20, 2018, the last day prior to the public announcement of the merger, the closing price of a share of NWIN common stock was $42.80. On May 1, 2018, the latest practicable date before the date of this document, the closing price of a share of NWIN common stock was $44.25. There is no established trading market for First Personal’s common stock, and First Personal’s common stock is not listed on any national securities exchange. Please see “Risk Factors” beginning on page 14 for a discussion of certain risks relating to the merger.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued under this proxy statement/prospectus or determined if this proxy statement/prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The securities to be issued in connection with the merger are not savings or deposit accounts or other obligations of any bank or nonbank subsidiary of any of the parties, and they are not insured by the Federal Deposit Insurance Corporation, the Deposit Insurance Fund, or any other governmental agency.

This proxy statement/prospectus is dated May 4, 2018, and it is first being mailed to First Personal’s stockholders on or about May 8, 2018.

AVAILABLE INFORMATION

As permitted by Securities and Exchange Commission rules, this document incorporates certain important business and financial information about NWIN from other documents that are not included in or delivered with this document. These documents are available to you without charge upon your written or oral request. Your requests for these documents should be directed to the following:

NorthWest Indiana Bancorp

9204 Columbia Avenue

Munster, Indiana 46321

Attn: Shareholder Services

(219) 836-4400

In order to ensure timely delivery of these documents, you should make your request no later than five business days before the special meeting date, or by June 20, 2018.

You also can obtain documents incorporated by reference in this document through the SEC’s website at www.sec.gov. See “Where You Can Find More Information.”

In addition, if you are a First Personal stockholder and have questions about the merger or the First Personal special meeting, need additional copies of this proxy statement/prospectus, or need to obtain proxy cards or other information related to the proxy solicitation, you may contact the following:

First Personal Financial Corp.

14701 Ravinia Avenue

Orland Park, Illinois 60462

Attn: Randall R. Schwartz, President and Chief Executive Officer

(708) 226-2727

In order to ensure timely delivery of these documents, you should make your request no later than five business days before the special meeting date, or by June 20, 2018.

First Personal does not have a class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is not subject to the reporting requirements of Section 13(a) or 15(d) of the Exchange Act, and accordingly does not file documents or reports with the SEC.

All information in this proxy statement/prospectus concerning NWIN and its subsidiaries has been furnished by NWIN, and all information in this proxy statement/prospectus concerning First Personal and its subsidiaries has been furnished by First Personal. You should rely only on the information contained or incorporated by reference in this proxy statement/prospectus to vote on the proposals to First Personal’s stockholders in connection with the merger. We have not authorized anyone to provide you with information that is different from what is contained in this proxy statement/prospectus.

This proxy statement/prospectus is dated May 4, 2018. You should not assume that the information contained in this proxy statement/prospectus is accurate as of any date other than such date, and neither the mailing of this proxy statement/prospectus to stockholders nor the issuance of NWIN shares as contemplated by the Merger Agreement shall create any implication to the contrary.

14701 Ravinia Avenue

Orland Park, Illinois 60462

(708) 226-2727

 

 

Notice of Special Meeting of Stockholders

 

 

To Be Held on June 27, 2018

To the Stockholders of First Personal Financial Corp.:

We are pleased to notify you of and invite you to a special meeting of the stockholders of First Personal Financial Corp. (“First Personal”) to be held on Wednesday, June 27, 2018, at 10:00 a.m., local time, at the main office of First Personal Bank, located at 14701 Ravinia Avenue, Orland Park, Illinois 60462, to consider and vote upon the following matters:

 

1.

Merger Proposal. To approve the Agreement and Plan of Merger dated February 20, 2018 (which we refer to as the “Merger Agreement”) by and between NorthWest Indiana Bancorp (“NWIN”) and First Personal, pursuant to which First Personal will merge with and into NWIN. Simultaneously with the merger, First Personal Bank, the wholly-owned Illinois state chartered commercial bank subsidiary of First Personal, will merge with and into Peoples Bank SB (“Peoples Bank”), the wholly-owned Indiana state chartered savings bank subsidiary of NWIN.

 

2.

Adjournment. To approve a proposal to adjourn the special meeting, if necessary, to solicit additional proxies in the event there are not sufficient votes present at the special meeting in person or by proxy to approve the Merger.

 

3.

Other Matters. To vote upon such other matters as may properly come before the meeting or any adjournment thereof. The board of directors is not aware of any such other matters.

The enclosed proxy statement/prospectus describes the Merger Agreement and the proposed merger in detail and includes, as Appendix A, the complete text of the Merger Agreement. We urge you to read these materials for a description of the Merger Agreement and the proposed merger. In particular, you should carefully read the section captioned “Risk Factors” beginning on page 14 of the enclosed proxy statement/prospectus for a discussion of certain risk factors relating to the Merger Agreement and the merger.

The board of directors of First Personal recommends that First Personal’s stockholders vote “FOR” the approval and adoption of the Merger Agreement and the merger, and “FOR” adjournment of the special meeting, if necessary.

The board of directors of First Personal has fixed the close of business on May 4, 2018, as the record date for determining the stockholders entitled to notice of, and to vote at, the special meeting and any adjournments or postponements of the special meeting.

YOUR VOTE IS VERY IMPORTANT. The Merger Agreement must be adopted by the affirmative vote of holders of the issued and outstanding shares of First Personal common stock and convertible preferred stock, voting together as a single class, having a majority of the voting power of such shares entitled to vote thereon, in order for the proposed merger to be consummated. IF YOU DO NOT RETURN YOUR PROXY CARD OR DO NOT VOTE IN PERSON AT THE SPECIAL MEETING, THE EFFECT WILL BE A VOTE AGAINST THE PROPOSED MERGER. Whether or not you plan to attend the special meeting in person, we urge you to date, sign, and return promptly the enclosed proxy card in the accompanying envelope. You may revoke your proxy at any time before the special meeting or by attending the special meeting and voting in person.

As required by Section 262 of the Delaware General Corporation Law, First Personal is notifying all stockholders entitled to vote on the merger that you are or may be entitled to assert appraisal rights in connection with the proposed merger. A copy of the appraisal rights statute is included with the accompanying proxy statement/prospectus as Appendix D. See also “Appraisal Rights” beginning on page 68 in the accompanying proxy statement/prospectus.

 

TABLE OF CONTENTS

 

		Page
QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING			1
SUMMARY			5
The Companies			5
Special Meeting of First Personal’s Stockholders; Required Vote			6
The Merger and the Merger Agreement			6
What First Personal’s Stockholders Will Receive in the Merger			6
Recommendation of First Personal’s Board of Directors			7
Appraisal Rights			7
Voting Agreements			8
Opinion of First Personal’s Financial Advisor			8
Reasons for the Merger			8
Regulatory Approvals			8
Conditions to the Merger			8
Termination			10
Termination Fee			10
Interests of Officers and Directors in the Merger that Are Different From Yours			11
Accounting Treatment of the Merger			11
Rights of Stockholders After the Merger			11
Material Federal Tax Consequences of the Merger			11
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF NWIN			12
Per Share Equivalent Information			13
Market Prices and Share Information			13
RISK FACTORS			14
CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS			18
SPECIAL MEETING OF FIRST PERSONAL’S STOCKHOLDERS			20
General			20
Purpose of the Meeting			20
Recommendation of First Personal’s Board of Directors			20
Record Date and Voting			20
Vote Required			21
Revocability of Proxies			22
Solicitation of Proxies			22
Assistance			23
Security Ownership of Certain Beneficial Holders and Management			23
THE MERGER			25
General			25
Background of the Merger			25
First Personal’s Reasons for the Merger; Board Recommendation			33
NWIN’s Reasons for the Merger			35
Effects of the Merger			36
Negotiations, Transactions, or Materials Contracts			37
Opinion of First Personal’s Financial Advisor			37
Certain Financial Projections Provided by First Personal and NWIN			48
THE MERGER AGREEMENT			51
Structure of the Merger			51
Merger Consideration			51
Exchange Agent			52
Voting Agreements			52
Treatment of First Personal’s 401(k) Plan			52

 

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		Page
Exchange and Payment Procedures			52
Dividends and Distributions			53
Representations and Warranties			54
Conduct of Business Prior to Completion of the Merger			55
Covenants			57
Acquisition Proposals by Third Parties			59
Conditions to the Merger			60
Expenses			63
Employee Benefits and Payments			63
Termination			64
Termination Fee			66
Management and Operations After the Merger			66
Environmental Inspections			66
Effective Time of the Merger			67
Regulatory Approvals for the Merger			67
Accounting Treatment of the Merger			67
APPRAISAL RIGHTS			68
INTERESTS OF CERTAIN DIRECTORS AND OFFICERS OF FIRST PERSONAL IN THE MERGER			73
MATERIAL FEDERAL INCOME TAX CONSEQUENCES			75
COMPARISON OF THE RIGHTS OF SHAREHOLDERS			80
ADDITIONAL INFORMATION ABOUT FIRST PERSONAL			93
Business of First Personal			93
Employees			93
Properties			93
Legal Proceedings			93
Market Price and Dividend Information and Related Shareholder Matters			93
Adjournment of the Special Meeting (Item 2 on the First Personal Proxy Card)			94
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AND EXPERTS			94
LEGAL MATTERS			95
SHAREHOLDER PROPOSALS FOR NEXT YEAR			95
NWIN			95
First Personal			95
WHERE YOU CAN FIND MORE INFORMATION			95

 

APPENDICES
Appendix A		Agreement and Plan of Merger by and among NorthWest Indiana Bancorp and First Personal Financial Corp. dated as of February 20, 2018			A-1
Appendix B		Opinion of Piper Jaffray & Co.			B-1
Appendix C		Voting Agreement			C-1
Appendix D		Section 262 of the Delaware General Corporation Law Concerning Appraisal Rights			D-1

 

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QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING

 

Q:	Why do First Personal and NWIN want to merge?

 

A:

We believe that combining First Personal and NWIN will create a stronger banking franchise with an expanded regional presence in both Indiana and Illinois. The merger will give the combined company greater scale, not only for serving existing customers more efficiently but also for future expansion. We have similar, community-oriented philosophies, and the merger is expected to give NWIN a stronger presence in current and new markets. We also believe the locations of First Personal’s banking offices are consistent with NWIN’s strategic expansion plans in the Chicagoland market. We further believe the Chicagoland market offers significant growth potential as evidenced by several factors, including the large population along the Interstate Highway 80 corridor, existing customer relationships in the market, disruption in the local banking competitive landscape, the creation of a wider trade area, and the higher legal lending limit afforded by the additional capital to be created by the merger.

For additional information regarding each company’s reasons for the merger, see “The Merger – First Personal’s Reasons for the Merger; Board Recommendation” beginning on page 33, and “The Merger – NWIN’s Reasons for the Merger” beginning on page 35.

 

Q:	What will First Personal’s stockholders receive in the merger?

 

A:

If the merger is completed, each share of First Personal common stock held by a First Personal stockholder owning 100 or more shares will be converted into the right to receive both (i) 0.1246 shares of NWIN common stock (subject to certain adjustments as described in the Merger Agreement) (which we refer to as the “exchange ratio”), and (ii) $6.67 in cash (which we refer to as the “cash consideration”). We refer to the cash consideration and the exchange ratio, as adjusted, collectively as the “merger consideration.” Because the exchange ratio for the stock consideration is fixed, the value of the stock consideration will fluctuate with the market price of NWIN’s common stock. Accordingly, at the time of the merger, the per share value of the stock consideration may be greater or less than the per share value of the cash consideration. If the merger is completed, each share of First Personal common stock held by a First Personal stockholder who owns of record and/or beneficially fewer than 100 shares will receive fixed consideration in the amount of $12.12 per share in cash and will not be entitled to receive any shares of First Personal common stock.

NWIN will be entitled to reduce the amount of the cash consideration if the estimated environmental clean-up costs with respect to the real property owned or leased by First Personal are greater than $100,000, or exceed $250,000 and NWIN elects not to terminate the Merger Agreement. For more details, see “The Merger Agreement – Environmental Inspections” beginning on page 66.

The exchange ratio is subject to adjustment as follows:

 

•

if prior to the effective time of the merger, NWIN changes the number of shares of NWIN common stock outstanding by way of a stock split, stock dividend, or similar transaction, or if NWIN establishes a record date for such a change, the exchange ratio will be adjusted accordingly so that each stockholder of First Personal receives at the effective time, in the aggregate, the number of shares of NWIN common stock representing the same percentage of the outstanding shares of NWIN common stock that they would have received if such change had not occurred; or

 

•

if First Personal elects to terminate the Merger Agreement because the volume-weighted average closing price of NWIN’s common stock is less than $35.00 for the fifteen consecutive trading days before the second business day prior to the closing of the merger and if the decline in NWIN’s share price is more than 20% greater than the corresponding price decline in the SNL Small Cap U.S. Bank and Thrift Index, NWIN may elect to negate First Personal’s termination by exercising NWIN’s option to increase the exchange ratio pursuant to the formula specified in the Merger Agreement. See “The Merger Agreement – Merger Consideration” beginning on page 51.

In lieu of any fractional shares of NWIN common stock, NWIN will distribute an amount in cash equal to such fraction multiplied by the volume-weighted average per share closing price of a share of NWIN

 

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common stock as quoted on the OTC Pink Marketplace during the fifteen consecutive trading days preceding the second business day prior to the closing of the merger.

 

Q:	Will NWIN’s shareholders receive any shares or cash as a result of the merger?

 

A:	No, NWIN’s shareholders will not receive any cash or shares in the merger.

 

Q:	What risks should First Personal’s stockholders consider before voting on the Merger Agreement?

 

A:	You should review “Risk Factors” beginning on page 14.

 

Q:	What are the tax consequences of the merger to First Personal’s stockholders?

 

A:

NWIN and First Personal expect the merger to qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”) for U.S. federal income tax purposes. If the merger qualifies as a reorganization, then, in general, for U.S. federal income tax purposes: (1) a holder of First Personal common stock generally will recognize gain, but not loss, in an amount equal to the lesser of the amount of cash received (excluding any cash received in lieu of a fractional share of NWIN common stock), or the amount of gain “realized” in the merger where the amount of such realized gain will equal the amount by which (a) the cash plus the fair market value of the NWIN common stock received, exceeds (b) the holder’s aggregate adjusted tax basis in the First Personal common stock; and (2) a holder of First Personal common stock will recognize gain or loss, if any, on any fractional share of NWIN common stock for which cash is received equal to the difference between the amount of cash received and the holder’s allocable tax basis in the fractional share. At the closing, NWIN and First Personal are each to receive an opinion confirming these tax consequences. See “Material Federal Income Tax Consequences” beginning on page 75.

Your tax consequences will depend on your personal situation. You should consult your tax advisor for a full understanding of the tax consequences of the merger to you.

 

Q:	What will First Personal’s stockholders be voting on at the special stockholders meeting?

 

A:

At the Special Meeting of Stockholders of First Personal (the “Special Meeting”), First Personal’s stockholders will be asked to approve the Merger Agreement, as well as any proposal of the First Personal board of directors to adjourn or postpone the Special Meeting, if necessary, to solicit additional proxies if there are not sufficient votes, in person or by proxy, to approve any of these items. The First Personal board of directors unanimously recommends that First Personal’s stockholders vote “FOR” approval of the Merger Agreement, and “FOR” any proposal of the First Personal board of directors to adjourn or postpone the Special Meeting, if necessary.

 

Q:	What are the vote requirements to approve the matters that will be considered at the Special Meeting?

 

A:

At the Special Meeting, the affirmative vote of holders of the issued and outstanding shares of First Personal common stock and First Personal’s Convertible Preferred Stock, Series A (“Convertible Preferred Stock”), voting together as a single class, having a majority of the voting power of such shares entitled to vote thereon, is required to approve both the Merger Agreement and the proposal to adjourn the Special Meeting to allow extra time to solicit proxies.

 

Q:	What do I need to do now?

 

A:

After you have carefully read this proxy statement/prospectus and have decided how you wish to vote your shares, please vote your shares promptly. If you hold stock in your name as a shareholder of record, you must complete, sign, date, and mail your proxy card in the enclosed return envelope as soon as possible. If you hold your stock through a bank or broker (commonly referred to as held in “street name”), you may

 

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direct your bank or broker to vote in accordance with the instructions you have received from your bank or broker. Submitting your proxy card or directing your bank or broker to vote your shares will ensure that your shares are represented and voted at the Special Meeting.

 

Q:	Why is my vote important?

 

A:

If you do not vote by proxy or in person at the Special Meeting, it will be more difficult for First Personal to obtain the necessary quorum to hold the Special Meeting. In addition, if you fail to vote, by proxy or in person, it will have the same effect as a vote “AGAINST” the approval of the Merger Agreement. The Merger Agreement must be approved by the holders of the issued and outstanding shares of First Personal common stock and Convertible Preferred Stock, voting together as a single class, having a majority of the voting power of such shares entitled to vote at the Special Meeting.

 

Q:	If my shares are held in “street name” by my broker, will my broker vote my shares for me?

 

A:

If you hold First Personal shares in street name with a broker, your broker will not be able to vote your shares without instructions from you on the proposal to approve the Merger Agreement or the proposal to adjourn the Special Meeting. You should contact your broker and ask what directions your broker will need from you. If you hold First Personal shares in street name with a broker and you do not provide instructions to your broker on how to vote on the merger, your broker will not be able to vote your shares on that proposal, and this will have the effect of a vote “AGAINST” the merger.

 

Q:	Can I attend the Special Meeting and vote my shares in person?

 

A:

Yes. All First Personal stockholders are invited to attend the Special Meeting. If you are a First Personal stockholder of record, you can vote in person at the Special Meeting. If you hold First Personal shares in street name through a bank, broker, or other nominee, then you must obtain a legal proxy from the holder of record by contacting your bank, broker, or other nominee to vote your shares in person at the Special Meeting. However, we would prefer that you vote by proxy, even if you plan to attend the meeting. As noted below, you still will have a right to change your vote at the meeting, should you so choose.

 

Q:	What happens if I do not vote?

 

A:

Because the required vote of First Personal’s stockholders to approve the Merger Agreement is based upon the number of issued and outstanding shares of First Personal common stock entitled to vote rather than upon the number of shares actually voted, abstentions from voting and “broker non-votes” will have the same practical effect as a vote “AGAINST” the merger. If you return a properly signed proxy card but do not indicate how you want to vote, your proxy will be counted as a vote “FOR” the approval and adoption of the Merger Agreement and the merger.

 

Q:	Can I change my vote before the Special Meeting?

 

A:

Yes. If you are a First Personal stockholder of record, there are three ways for you to revoke your proxy and change your vote. First, you may send written notice to First Personal’s President before the Special Meeting stating that you would like to revoke your proxy. Second, you may complete and submit a new proxy card before the Special Meeting that is dated later than the date of your prior proxy card. Third, you may vote in person at the Special Meeting. Merely being present at the Special Meeting, without voting at the meeting, will not constitute a revocation of a previously given proxy. If you hold your shares in street name with a bank or broker, you must follow the directions you receive from your bank or broker to change your vote.

 

Q:	When do you currently expect to complete the merger?

 

A:	We expect to complete the merger in the third quarter of 2018. However, we cannot assure you when or if the merger will occur. The approval of First Personal’s stockholders on the Merger Agreement, among other things, must first be obtained before we are able to close the merger.

 

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Q:	Do First Personal’s stockholders have appraisal rights?

 

A:

Yes. First Personal stockholders are entitled to appraisal rights under Section 262 of the Delaware General Corporation Law (“DGCL”), provided that the stockholders fully comply with and follow the procedures and satisfy the conditions set forth in Section 262 of the DGCL. For more information regarding appraisal rights, see the section entitled “Appraisal Rights” beginning on page 68 of this proxy statement/prospectus. In addition, a copy of Section 262 of the DGCL is attached as Appendix D to this proxy statement/prospectus. Failure to comply with Section 262 of the DGCL will result in your waiver of, or inability to exercise, appraisal rights.

 

Q:	Should I send in my First Personal stock certificates now?

 

A:

No. As soon as practicable after the completion of the merger, you will receive a letter of transmittal describing how you may exchange your shares for the merger consideration and surrender your First Personal stock certificates. At that time, you must send your completed letter of transmittal to NWIN’s exchange agent for the merger named in the letter of transmittal in order to receive the merger consideration. You should not send your First Personal stock certificates until you receive the letter of transmittal.

 

Q:	Whom should I contact if I have other questions about the Merger Agreement or the merger?

 

A:	If you have more questions about the Merger Agreement or the merger, you should contact:

NorthWest Indiana Bancorp

9204 Columbia Avenue

Munster, Indiana 46321

(219) 836-4400

Attention: Shareholder Services

You may also contact:

First Personal Financial Corp.

14701 Ravinia Avenue

Orland Park, Illinois 60462

(708) 226-2727

Attention: Randall R. Schwartz, President and Chief Executive Officer

 

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RISK FACTORS

In addition to the other information contained in or incorporated by reference into this proxy statement/prospectus (see “Where You Can Find More Information” on page 95), including the risk factors included in NWIN’s Annual Report on Form 10-K for the year ended December 31, 2017, you should consider carefully the risk factors described below in deciding how to vote. You should keep these risk factors in mind when you read forward-looking statements in this document and in the documents incorporated by reference into this document. Please refer to the section of this proxy statement/prospectus titled “Cautionary Note About Forward-Looking Statements” on page 18.

Fluctuations in the market price of NWIN’s common stock may cause the value of the stock portion of the merger consideration to decrease.

Upon completion of the merger, each share of First Personal common stock will be converted into the right to receive merger consideration consisting of 0.1246 shares of NWIN common stock and $6.67 in cash pursuant to the terms of the Merger Agreement. Because the exchange ratio for the stock portion of the merger consideration is fixed, any change in the market price of NWIN’s common stock prior to completion of the merger will affect the value of any stock consideration that First Personal stockholders receive upon completion of the merger and thereafter. While First Personal will have the right to terminate the Merger Agreement in the event of a specified decline in the market value of NWIN common stock relative to the value of a designated market index unless NWIN elects to increase the aggregate merger consideration (see “The Merger Agreement – Termination”), neither company is otherwise permitted to terminate the Merger Agreement or resolicit the vote of First Personal’s stockholders solely because of changes in the market price of NWIN’s stock. Accordingly, at the time of the Special Meeting, First Personal’s stockholders will not necessarily know, or be able to calculate with certainty, the market value of the merger consideration they will receive upon the completion of the merger. Stock price changes may result from a variety of factors, including general market and economic conditions, changes in NWIN’s business, operations, and prospects, and regulatory considerations. Many of these factors are beyond the control of NWIN. You should obtain current market quotations for shares of NWIN common stock before you vote.

The merger is subject to the receipt of consents and approvals from governmental and regulatory entities that may impose conditions that could have an adverse effect on NWIN.

Before the merger can be completed, NWIN must receive a waiver from the FRB of the application requirements for the merger of First Personal into NWIN, and both the FDIC and IDFI must approve the merger of FPB into Peoples Bank. The FDIC and IDFI will consider, among other factors, the competitive impact of the holding company merger and the bank merger, the financial and managerial resources of NWIN and First Personal and their subsidiary banks, and the convenience and needs of the communities to be served. As part of that consideration, we expect that the FDIC and IDFI will review issues related to capital position, safety and soundness, and legal and regulatory compliance, including compliance with anti-money laundering laws. NWIN has received confirmation from the FRB that no formal application was required to be submitted to the FRB for the transactions contemplated by the Merger Agreement, but instead, NWIN could submit a waiver request. There can be no assurance as to whether these and other regulatory approvals will be received, the timing of those approvals, or whether any conditions will be imposed in connection with such approvals.

Additionally, these governmental entities may impose conditions on the completion of the merger or require changes to the terms of the merger. Such conditions or changes could have the effect of delaying completion of the merger or imposing additional costs on, or limiting the revenues of, NWIN following the merger, any of which might have an adverse effect on NWIN following the merger.

 

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The Merger Agreement may be terminated in accordance with its terms and the merger may not be completed, which could have a negative impact on First Personal.

The Merger Agreement with NWIN is subject to a number of conditions that must be fulfilled in order to close. Those conditions include: approval by the stockholders of First Personal, regulatory approval, the continued accuracy of certain representations and warranties by both parties and the performance by both parties of certain covenants and agreements. In particular, NWIN is not obligated to close if, subject to the conditions in the Merger Agreement, the estimated environmental clean-up costs exceed $250,000. In addition, certain circumstances exist in which First Personal may terminate the merger, including by electing to terminate if NWIN’s stock price declines below a specified level. First Personal has the right to terminate the Merger Agreement if NWIN’s volume-weighted average common stock closing price over the 15-trading day period immediately preceding the date that is the 15^th business day prior to the scheduled closing date of the merger (referred to as the “determination date”) is below $35.00 per share, and the percentage decrease in the stock price of NWIN from the NWIN stock price used to determine the value of the merger consideration is more than 20% greater than the percentage decrease in the SNL Small Cap U.S. Bank and Thrift Index during the same period. However, NWIN has the right to prevent First Personal’s termination by agreeing to increase the exchange ratio pursuant to a formula set forth in the Merger Agreement. See “The Merger Agreement – Merger Consideration” (beginning on page 51) for a more complete discussion of the merger consideration to be paid in this proposed transaction and “ – Termination” for a more complete discussion of the circumstances under which the Merger Agreement could be terminated. There can be no assurance that the conditions to closing the merger will be fulfilled or that the merger will be completed.

If the Merger Agreement is terminated, there may be various consequences to First Personal, including:

 

•

First Personal’s business may have been adversely impacted by the failure to pursue other beneficial opportunities due to the focus of management on the merger, without realizing any of the anticipated benefits of completing the merger; and

 

•

First Personal may have incurred substantial expenses in connection with the merger, without realizing any of the anticipated benefits of completing the merger.

If the Merger Agreement is terminated and First Personal’s board of directors approves another merger or business combination, under certain circumstances First Personal may be required to pay NWIN a $630,000 termination fee, and First Personal’s stockholders cannot be certain that First Personal will be able to find a party willing to pay an equivalent or more attractive price than the price NWIN has agreed to pay in the merger.

First Personal’s stockholders will have a reduced ownership and voting interest after the merger and will exercise less influence over management.

First Personal’s stockholders currently have the right to vote in the election of the First Personal board of directors and on other significant matters affecting First Personal, such as the proposed merger with NWIN. When the merger occurs, each First Personal stockholder who holds at least 100 shares of First Personal common stock will become a shareholder of NWIN with a percentage ownership of the combined organization that is much smaller than the stockholder’s percentage ownership of First Personal. Based on the anticipated number of NWIN common shares to be issued in the merger, it is anticipated that the First Personal stockholders will only own approximately 5.3% of all of the outstanding shares of NWIN’s common stock. Because of this, First Personal’s stockholders will have less influence on the management and policies of NWIN than they now have on the management and policies of First Personal. Furthermore, shareholders of NWIN do not have preemptive or similar rights, and therefore, NWIN can sell additional voting securities in the future without offering them to the former First Personal stockholders, which would further reduce their ownership percentage in, and voting control over, NWIN.

 

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NWIN may be unable to successfully integrate FPB’s operations and retain FPB’s employees.

Simultaneous with the closing of the merger, FPB will be merged with and into Peoples Bank. The possible difficulties of merging the operations of FPB with Peoples Bank include:

 

•

integrating personnel with diverse business backgrounds;

 

•

combining different corporate cultures;

 

•

integrating systems; and

 

•

retaining key employees.

The process of integrating operations could cause an interruption of, or loss of momentum in, the activities of one or more of NWIN, Peoples Bank, or FPB, and the loss of key personnel. The merger of FPB with Peoples Bank will benefit greatly from the experience and expertise of certain key employees of FPB who are expected to be retained by NWIN. However, there can be no assurances that NWIN will be successful in retaining these employees for the time period necessary to integrate FPB into Peoples Bank at the level desired by NWIN. The diversion of management’s attention and any delays or difficulties encountered in connection with the merger and integration of FPB into Peoples Bank could have an adverse effect on the business and results of operations of NWIN or Peoples Bank, and therefore, its stock price.

NWIN may be unable to retain First Personal’s customers or grow the First Personal business.

First Personal operates in geographic markets and with customers primarily located in or near Cook County, Illinois. NWIN’s markets and customers are located primarily in Northwest Indiana. Although NWIN is not anticipating major differences between the preferences of First Personal’s customers compared to NWIN’s customers, any time there is a change in products, services, ownership, or management of a bank, there is a risk that customers may seek to obtain some or all of their banking products and services from other banks. NWIN believes that the desire of First Personal’s customers to seek products or services elsewhere as a result of the merger will be lessened by the fact that the shareholders of First Personal will continue to own a portion of the combined operations after the merger and because key employees of First Personal will be continuing with the bank after the merger.

The fairness opinion delivered to First Personal’s board of directors does not reflect changes in circumstances subsequent to the date of the fairness opinion.

The fairness opinion of Piper Jaffray was delivered to First Personal’s board of directors on February 20, 2018 and speaks only as of such date. Changes in operations and prospects of NWIN and First Personal, general market and economic conditions, and other factors both within and outside of NWIN’s and First Personal’s control may significantly alter the relative value of the companies by the time the merger is completed. Piper Jaffray’s opinion does not speak as of the time the merger will be completed or as of any date other than the date of such opinion.

The termination fee and the restrictions on solicitation contained in the Merger Agreement may discourage other companies from attempting to acquire First Personal.

Until the completion of the merger, with some exceptions, First Personal is prohibited from soliciting, initiating, encouraging, or participating in any discussion of, or otherwise considering, any inquiries or proposals that may lead to an acquisition proposal, such as a merger or other business combination transaction, with any person or entity other than NWIN. In addition, First Personal has agreed to pay a termination fee of $630,000 to NWIN if the board of directors of First Personal withdraws, modifies, or changes its approval or recommendation of the Merger Agreement and approves or recommends an alternative acquisition transaction with a third party. These provisions could discourage other companies from trying to acquire First Personal even though such other

 

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companies might be willing to offer greater value to First Personal’s stockholders than NWIN has offered in the Merger Agreement. The payment of the termination fee also could have a material adverse effect on First Personal’s financial condition.

Certain of First Personal’s officers and directors have interests that are different from, or in addition to, the interests of First Personal’s stockholders generally.

Certain of First Personal’s directors and executive officers have interests in the merger that are different from, or in addition to, the interests of First Personal’s stockholders generally that may present actual or apparent conflicts of interest, including, among other things, payments under the employment agreement with First Personal’s President and Chief Executive Officer and the continuation of director and officer indemnification and liability insurance protections. See “Interests of Certain Directors and Officers of First Personal in the Merger” beginning on page 73.

The merger may fail to qualify as a reorganization for federal tax purposes, resulting in the recognition by First Personal’s stockholders of taxable gain or loss in respect of their First Personal shares.

NWIN and First Personal intend the merger to qualify as a reorganization within the meaning of Section 368(a) of the Code. Although the Internal Revenue Service (“IRS”) will not provide a ruling on the matter, NWIN and First Personal, as a condition to closing, will each obtain an opinion from their respective legal counsel that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Code for federal tax purposes. This opinion does not bind the IRS or prevent the IRS from adopting a contrary position. If the merger fails to qualify as a reorganization, a First Personal stockholder generally would recognize gain or loss in an amount equal to the difference between (1) the sum of the amount of cash and the aggregate fair market value of the NWIN common stock received in the exchange, and (2) the First Personal stockholder’s aggregate adjusted tax basis in the First Personal common stock surrendered in the exchange. Furthermore, if the merger fails to qualify as a reorganization, NWIN, as successor to First Personal, may incur a significant tax liability since the merger would be treated as a taxable sale of First Personal’s assets for U.S. federal income tax purposes.

The shares of NWIN common stock to be received by First Personal stockholders as a result of the merger will have different rights from the shares of First Personal common stock.

The rights associated with First Personal’s common stock are different from the rights associated with NWIN’s common stock. See the section of this proxy statement/prospectus entitled “Comparison of the Rights of Shareholders” (beginning on page 80) for a discussion of the different rights associated with NWIN’s and First Personal’s common stock.

Each party is subject to business uncertainties and contractual restrictions while the merger is pending, which could adversely affect each party’s business and operations.

In connection with the pendency of the merger, it is possible that some customers and other persons with whom NWIN or First Personal has a business relationship may delay or defer certain business decisions or might seek to terminate, change, or renegotiate their relationships with NWIN or First Personal, as the case may be, as a result of the merger, which could negatively affect NWIN’s or First Personal’s respective revenues, earnings, and cash flows, as well as the market price of NWIN common stock, regardless of whether the merger is completed. In addition, under the terms of the Merger Agreement, First Personal is subject to certain restrictions on the conduct of its business prior to completing the merger, which may adversely affect its ability to execute certain of its business strategies, including the ability in certain cases to enter into or amend contracts, acquire or dispose of assets, incur indebtedness, or make capital expenditures. Such limitations could negatively affect First Personal’s business and operations prior to the completion of the merger.

 

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CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS

This proxy statement/prospectus contains forward-looking statements that have been made pursuant to the provisions of, and in reliance on the safe harbor under, the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). Forward-looking statements include statements with respect to management’s beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond the control of NWIN and First Personal, and which may cause actual results, performance, or achievements to be materially different from future results, performance, or achievements expressed or implied by such forward-looking statements.

In addition, certain statements may be contained in the future filings of NWIN with the SEC, in press releases, and in oral and written statements made by or with the approval of NWIN that are not statements of historical fact and constitute forward-looking statements within the meaning of the Reform Act. Examples of such forward-looking statements include, but are not limited to:

 

•

statements about the benefits of the merger between NWIN and First Personal, including future financial and operating results, cost savings, enhanced revenues, and accretion to reported earnings that may be realized from the merger;

 

•

statements of plans, objectives, and expectations of NWIN or First Personal or their managements or boards of directors;

 

•

statements of future economic performance; and

 

•

statements of assumptions underlying such statements.

All statements other than statements of historical fact are statements that could be forward-looking statements. Words such as “believe,” “contemplate,” “seek,” “estimate,” “plan,” “project,” “anticipate,” “assume,” “expect,” “intend,” “targeted,” “continue,” “remain,” “will,” “should,” “indicate,” “would,” “may,” and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance, nor should they be relied upon as representing management’s views as of any subsequent date. The forward-looking statements are based on management’s expectations and are subject to a number of risks and uncertainties.

Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

 

•

the risk that the businesses of NWIN and First Personal will not be integrated successfully or such integration may be more difficult, time-consuming, or costly than expected;

 

•

expected revenue synergies and cost savings from the merger may not be fully realized or realized within the expected time frame;

 

•

revenues or earnings following the merger may be lower than expected;

 

•

deposit attrition, operating costs, customer loss, and business disruption following the merger, including, without limitation, difficulties in maintaining relationships with employees, may be greater than expected;

 

•

the inability to obtain governmental approvals of the merger on the proposed terms and schedule;

 

•

the failure of First Personal’s stockholders to approve the merger;

 

•

local, regional, national, and international economic conditions and the impact they may have on NWIN and First Personal and their customers and NWIN’s and First Personal’s assessment of that impact;

 

18

•

changes in the level of non-performing assets, delinquent loans, and charge-offs;

 

•

material changes in the value of NWIN’s common stock;

 

•

changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements;

 

•

the risk that management’s assumptions and estimates used in applying critical accounting policies prove unreliable, inaccurate, or not predictive of actual results;

 

•

inflation, interest rate, securities market, and monetary fluctuations;

 

•

changes in interest rates, spreads on earning assets and interest-bearing liabilities, and interest rate sensitivity;

 

•

prepayment speeds, loan originations, and credit losses;

 

•

sources of liquidity;

 

•

competitive pressures among depository and other financial institutions may increase and have an effect on pricing, spending, third-party relationships, and revenues;

 

•

changes in laws and regulations (including laws and regulations concerning taxes, banking, and securities) with which NWIN and First Personal must comply;

 

•

the effects of, and changes in, trade, monetary, and fiscal policies and laws, including interest rate policies of the Federal Reserve Board;

 

•

NWIN’s and First Personal’s common shares outstanding and common stock price volatility;

 

•

legislation affecting the financial services industry as a whole, and/or NWIN and First Personal and their subsidiaries, individually or collectively;

 

•

governmental and public policy changes;

 

•

financial resources in the amounts, at the times, and on the terms required to support NWIN’s and First Personal’s future businesses; and

 

•

the impact on NWIN’s or First Personal’s businesses, as well as on the risks set forth above, of various domestic or international military or terrorist activities or conflicts.

Additional factors that could cause NWIN’s results to differ materially from those described in the forward-looking statements can be found in NWIN’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K filed with the SEC. All subsequent written and oral forward-looking statements concerning the proposed transaction or other matters and attributable to NWIN or First Personal or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements referenced above. Forward-looking statements speak only as of the date on which such statements are made. NWIN and First Personal undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events.

We caution you not to place undue reliance on the forward-looking statements.

 

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SPECIAL MEETING OF FIRST PERSONAL’S STOCKHOLDERS

General

This document is being furnished to First Personal stockholders in connection with the solicitation of proxies by the board of directors of First Personal for use at the Special Meeting of First Personal’s Stockholders to be held on Wednesday, June 27, 2018 at 10:00 a.m., local time, at the main office of First Personal Bank, located at 14701 Ravinia Avenue, Orland Park, Illinois 60462, and at any adjournment or postponement of that meeting. This document and the enclosed form of proxy are being sent to First Personal’s stockholders on or about May 8, 2018.

Purpose of the Meeting

The Special Meeting is being held for the following purposes:

 

•

To consider and approve the Merger Agreement by and between NWIN and First Personal, pursuant to which First Personal will merge with and into NWIN. Simultaneously with the merger, FPB, an Illinois-chartered commercial bank and wholly-owned subsidiary of First Personal, will merge with and into Peoples Bank, an Indiana-chartered savings bank and wholly-owned subsidiary of NWIN;

 

•

To approve a proposal to adjourn the Special Meeting, if necessary, to solicit additional proxies in the event there are not sufficient votes present at the Special Meeting in person or by proxy to approve the merger; and

 

•

To transact such other business as may properly come before the Special Meeting or any adjournment of the Special Meeting.

First Personal’s board of directors and management is not aware of any other matters to be presented at the meeting other than those mentioned above and has not received notice from any shareholders requesting that other matters be considered. However, if any other business is properly presented before the Special Meeting and may properly be voted upon, the proxies solicited hereby will be voted on such matters in accordance with the best judgment of the proxy holders named therein.

A copy of the Merger Agreement is attached as Appendix A to this proxy statement/prospectus.

Recommendation of First Personal’s Board of Directors

The board of directors of First Personal unanimously voted in favor of the Merger Agreement and the merger. First Personal’s board of directors believes that the Merger Agreement, the merger, and the transactions contemplated thereby are in the best interests of First Personal and its shareholders, and recommends that First Personal’s shareholders vote:

 

•

“FOR” the approval and adoption of the Merger Agreement and the merger; and

 

•

“FOR” any proposal of the First Personal board of directors to adjourn the meeting, if necessary.

Record Date and Voting

The close of business on May 4, 2018 has been selected as the record date for the determination of First Personal’s stockholders entitled to notice of and to vote at the Special Meeting. On that date, 1,161,475 shares of First Personal’s common stock, $0.01 par value per share, were outstanding, and 1,121 shares of First Personal’s Convertible Preferred Stock were outstanding, which, as of that date, were convertible into 138,288 shares of common stock. Stockholders will be entitled to one vote for each share of First Personal’s common stock held by them, or, with respect to holders of Convertible Preferred Stock, one vote for each share of common stock into which their shares of Convertible Preferred Stock are convertible, of record at the close of business on the record date on any matter that may be presented for consideration and action by the stockholders. The presence, in

 

20

person or represented by proxy, of the holders of a majority of the outstanding voting power of First Personal’s common stock and Convertible Preferred Stock entitled to vote at the Special Meeting will constitute a quorum for the transaction of business at the Special Meeting.

You may vote your shares in person by attending the Special Meeting, or by mailing us your completed proxy if you are unable or do not wish to attend. We encourage you to vote by mailing the proxy card even if you plan to attend the meeting. If you are a stockholder of record as of May 4, 2018, you may vote your shares in person at the meeting. If your shares are held by a broker or other nominee, you must obtain a proxy from the broker or nominee giving you the right to vote the shares at the meeting.

All proxies properly submitted in time to be counted at the Special Meeting will be voted in accordance with the instructions contained in the proxy. If you submit a proxy without voting instructions, the proxies named in the proxy will vote on your behalf for each matter described above in accordance with the recommendations of the First Personal board of directors on all the proposals as set forth in this proxy statement/prospectus and on any other matters in accordance with their best judgment.

If you have shares held by a broker or other nominee, you may instruct the broker or other nominee to vote your shares by following the instructions the broker or other nominee provides to you. Proxies solicited by this proxy statement/prospectus may be exercised only at the Special Meeting and any adjournment or postponement thereof and will not be used for any other meeting.

Vote Required

The approval of both the Merger Agreement (Proposal 1) and the proposal to adjourn the Special Meeting, if necessary, to solicit additional proxies (Proposal 2) require the affirmative vote of the holders of the issued and outstanding shares of First Personal common stock and Convertible Preferred Stock, voting together as a single class, having a majority of the voting power of such shares entitled to vote at the Special Meeting.

In this regard, the holders of First Personal’s Convertible Preferred Stock are entitled to vote, as a single class with the holders of First Personal’s common stock, on the Merger Agreement and adjournment proposals at the Special Meeting. The certificate of designations for the Convertible Preferred Stock provides that, with respect to all matters submitted to a vote of the holders of First Personal’s common stock, each share of Convertible Preferred Stock entitles the holder thereof to an aggregate number of votes equal to the number of shares of common stock into which the shares of Convertible Preferred Stock are convertible (pursuant to the certificate of designations) in effect on the record date for determining the holders of common stock entitled to vote on the matter. The holders of Convertible Preferred Stock vote together with the holders of shares of common stock as one class on all matters submitted to a vote of First Personal’s stockholders. The holders of Convertible Preferred Stock have no other voting rights, as a separate class or otherwise, including any rights to vote as a class with respect to the merger. As of the record date for the Special Meeting, holders of First Personal’s common stock have the power to vote 1,161,475 shares, and holders of First Personal’s Convertible Preferred Stock have the power to vote 138,288 shares, at the Special Meeting, for a total of 1,299,763 shares entitled to vote on the proposals presented at the Special Meeting.

Abstentions and “broker non-votes” (described below) are counted for purposes of determining the presence or absence of a quorum but are not considered votes cast. The required votes of First Personal’s stockholders on the Merger Agreement and the proposal to adjourn the Special Meeting are based on the voting power represented by the number of outstanding shares of First Personal common stock and Convertible Preferred Stock and not the number of shares that are actually voted. Accordingly, the failure to submit a proxy card or to vote in person at the Special Meeting, or the abstention from voting by a First Personal stockholder, or the failure of any First Personal stockholder who holds shares in “street name” through a bank or broker to give voting instructions to such bank or broker (thereby resulting in a “broker non-vote”), will have the same effect as a vote “AGAINST” the Merger Agreement and “AGAINST” the proposal to adjourn the Special Meeting.

 

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A “broker non-vote” occurs when a broker submits a proxy that does not indicate a vote on a proposal because the broker has not received instructions from the beneficial owners on how to vote on such proposal and the broker does not have discretionary authority to vote in the absence of instructions. Brokers generally have the authority to vote, even though they have not received instructions, on matters that are considered “routine.” However, under the rules of the New York Stock Exchange, the Merger Agreement proposal and the adjournment proposal to be considered at the Special Meeting are not considered routine matters and brokers are not entitled to vote shares held for a beneficial owner on these matters without instructions from the beneficial owner of the shares. To avoid a broker non-vote of your shares on the Merger Agreement and adjournment, each of which is a non-routine matter, you must provide voting instructions to your broker or other nominee.

As of the record date, First Personal’s directors and executive officers and their affiliates owned and were entitled to vote 394,634 shares of First Personal common stock, and had the power to vote 138,288 shares represented by shares of Convertible Preferred Stock, which in the aggregate represents approximately 41.0% of the voting power represented by the outstanding shares of First Personal common stock and Convertible Preferred Stock. Neither NWIN nor any of its directors or executive officers owns any shares of First Personal common stock or Convertible Preferred Stock.

Revocability of Proxies

Submitting a proxy on the enclosed form of proxy does not preclude a First Personal stockholder from voting in person at the Special Meeting. A First Personal stockholder may revoke a proxy at any time prior to the vote at the Special Meeting by:

 

•

delivering to Randall R. Schwartz, First Personal’s President and Chief Executive Officer, at First Personal’s corporate office at 14701 Ravinia Avenue, Orland Park, Illinois 60462, on or before the date of the Special Meeting, a later-dated and signed proxy card or a written revocation of the proxy;

 

•

delivering to First Personal at the Special Meeting prior to the taking of the vote a later-dated and signed proxy card or a written revocation;

 

•

attending the Special Meeting and voting in person; or

 

•

if you have instructed a broker to vote your shares, following the directions received from your broker to change those instructions.

Revoking a proxy will not affect a vote once it has been taken. Attendance at the Special Meeting will not, in itself, constitute a revocation of a proxy. You must vote in person at the Special Meeting if you wish to change a vote that you have previously made by submitting a signed proxy.

Solicitation of Proxies

The proxy solicitation of First Personal’s stockholders is being made by First Personal on behalf of the First Personal board of directors and will be paid for by First Personal. In addition to solicitation by mail, directors, officers, and employees of First Personal may solicit proxies for the Special Meeting from First Personal’s stockholders personally or by telephone, the Internet, or other electronic means. However, First Personal’s directors, officers, and employees will not be paid any special or extra compensation for soliciting such proxies, although they may be reimbursed for out-of-pocket expenses incurred in connection with the solicitation. Upon request, First Personal will reimburse brokers, dealers, banks, trustees, and other fiduciaries for the reasonable expenses they incur in forwarding proxy materials to beneficial owners of First Personal’s common stock.

THE MATTERS TO BE CONSIDERED AT THE SPECIAL MEETING ARE OF GREAT IMPORTANCE TO THE STOCKHOLDERS OF FIRST PERSONAL. ACCORDINGLY, HOLDERS OF FIRST PERSONAL COMMON STOCK ARE URGED TO READ AND CAREFULLY CONSIDER THE INFORMATION

 

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PRESENTED IN THIS PROXY STATEMENT/PROSPECTUS, AND TO COMPLETE, DATE, SIGN, AND PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED POSTAGE PRE-PAID ENVELOPE.

Assistance

If you need assistance in completing your proxy card or have questions regarding the Special Meeting, please contact First Personal Financial Corp., 14701 Ravinia Avenue, Orland Park, Illinois 60462, Attention: Randall R. Schwartz, (708) 226-2727.

Security Ownership of Certain Beneficial Holders and Management

The following table sets forth as of May 4, 2018, which is the most recent practicable date, information regarding the beneficial share ownership of First Personal’s common stock and Convertible Preferred Stock by: (i) each of the directors and executive officers of First Personal; (ii) the directors and executive officers of First Personal as a group; and (iii) each person who is known to First Personal to be the beneficial owner of more than 5% of any class of First Personal’s voting securities. Information with respect to First Personal’s directors, executive officers, and 5% shareholders is based on First Personal’s records and data supplied by each of the directors, executive officers, and 5% shareholders. Unless otherwise noted below, the address of each beneficial owner listed in the table is c/o First Personal Financial Corp., 14701 Ravinia Avenue, Orland Park, Illinois 60462.

 

				Common Stock								Convertible Preferred Stock
Name		Position		Shares Beneficially Owned(1)				Percent of Class(2)				Shares Beneficially Owned				Percent of Class(3)				Percent of Total Voting Power(4)
DIRECTORS AND EXECUTIVE OFFICERS:
Deborah S. Ashen(5)		Director			5,518				*				–				–				*
George Cvack(6)		Director			38,292				3.3	%			–				–				2.9%
Richard E. Michaels(7)		Director			39,937				3.4	%			200				17.8%				5.3%
Daniel J. Horn(8)		Director			27,459				2.4	%			100				8.9%				3.1%
Randall R. Schwartz(9)		Director, President and Chief Executive Officer			250,969				21.6	%			771				68.8%				26.2%
Lawrence J. Svabek(10)		Director			32,459				2.8	%			50				4.5%				3.0%
All executive officers and directors of First Personal as a group (6 persons)					394,634				34.0	%			1,121				100.0%				41.0%
GREATER THAN 5% SHAREHOLDERS:
Steven Abraham(11) 231 South LaSalle Suite 1400 Chicago, Illinois 60604					82,709				7.1	%			–				–				6.4%

 

*	Indicates less than 1% of the total number of outstanding shares of First Personal’s common stock.

(1)

Amounts reported include shares of common stock held directly, as well as shares held in retirement accounts, by certain members of the named individuals’ families or held by trusts of which the named individual is a trustee or substantial beneficiary. Inclusion of shares shall not constitute an admission of beneficial ownership or voting or investment power over included shares.

 

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(2)

For each individual or group disclosed in the table above, the figures in this column are based on 1,161,475 shares of First Personal common stock issued and outstanding as of May 4, 2018, which is the most recent practicable date, plus the number of shares of common stock each such individual or group has the right to acquire on or within 60 days after May 4, 2018, computed in accordance with Rule 13d-3(d)(1) under the Exchange Act.

(3)

For each individual or group disclosed in the table above, the figures in this column are based on 1,121 shares of First Personal Convertible Preferred Stock issued and outstanding as of May 4, 2018, which is the most recent practicable date, plus the number of shares of Convertible Preferred Stock each such individual or group has the right to acquire on or within 60 days after May 4, 2018, computed in accordance with Rule 13d-3(d)(1) under the Exchange Act.

(4)

For each individual or group disclosed in the table above, the figures in this column are based on the aggregate voting power of the holders of First Personal’s common stock and Convertible Preferred Stock, which is represented by 1,299,763 shares of common stock (including all shares of Convertible Preferred Stock on an as-converted basis) as of May 4, 2018, which is the most recent practicable date, plus the number of shares of common stock and Convertible Preferred Stock each such individual or group has the right to acquire on or within 60 days after May 4, 2018, computed in accordance with Rule 13d-3(d)(1) under the Exchange Act.

(5)	Includes 5,518 shares of common stock held directly in the name of Ms. Ashen.

(6)

Includes 2,200 shares held in joint tenancy with Mr. Cvack’s spouse, 34,000 shares held in individual retirement accounts maintained for the benefit of Mr. Cvack as to which he maintains voting and investment power, 200 shares held by Mr. Cvack’s spouse as custodian for the benefit of Mr. Cvack’s non-minor children and 1,892 shares held in joint tenancy with Mr. Cvack’s mother.

(7)

With respect to Mr. Michaels’s shares reported in the common stock column, the amount includes 69,339 shares held in a trust under which Mr. Michaels’s spouse is trustee. With respect to Mr. Michaels’s shares reported in the Convertible Preferred Stock column, pursuant to the certificate of designations for the Convertible Preferred Stock, the reported shares are convertible into, and as of the record date represent the right to vote, 29,402 shares of common stock.

(8)

With respect to Mr. Horn’s shares reported in the common stock column, the amount includes 22,500 shares held jointly between Mr. Horn and his spouse and 4,959 shares held in an individual retirement account maintained for the benefit of Mr. Horn as to which he maintains voting and investment power. With respect to Mr. Horn’s shares reported in the Convertible Preferred Stock column, pursuant to the certificate of designations for the Convertible Preferred Stock, the reported shares are convertible into, and as of the record date represent the right to vote, 13,333 shares of common stock.

(9)

With respect to Mr. Schwartz’s shares reported in the common stock column, the amount includes 109,576 shares held in a revocable trust under which Mr. Schwartz’s spouse is trustee, 49,838 shares held in individual retirement accounts maintained for the benefit of Mr. Schwartz as to which he maintains voting and investment power, 55,518 shares held in a revocable trust under which Mr. Schwartz is trustee, and 25,000 shares held in a trust under which Mr. Schwartz’s spouse is a co-trustee and beneficiary. With respect to Mr. Schwartz’s shares reported in the Convertible Preferred Stock column, pursuant to the certificate of designations for the Convertible Preferred Stock, the reported shares are convertible into, and as of the record date represent the right to vote, 88,975 shares of common stock.

(10)

With respect to Mr. Svabek’s shares reported in the common stock column, the amount includes 27,500 shares held in a trust under which Mr. Svabek’s wife is trustee and beneficiary and 4,959 shares held in a general partnership of which Mr. Svabek is a partner. With respect to Mr. Svabek’s shares reported in the Convertible Preferred Stock column, pursuant to the certificate of designations for the Convertible Preferred Stock, the reported shares are convertible into, and as of the record date represent the right to vote, 6,578 shares of common stock.

(11)	Includes 82,709 shares of common stock held directly in the name of Mr. Abraham.

 

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THE MERGER

This section of the proxy statement/prospectus describes material aspects of the proposed merger. While NWIN and First Personal believe that the description covers the material terms of the merger, this summary may not contain all of the information that is important to you. You should read this entire proxy statement/prospectus and the other documents that we refer to carefully for more detailed information regarding the merger.

General

NWIN’s and First Personal’s boards of directors have approved and adopted the Merger Agreement, the merger, and the transactions contemplated thereby. The Merger Agreement provides for the merger of First Personal with and into NWIN, with NWIN as the surviving corporation. Simultaneously with this merger, FPB, the wholly-owned Illinois-chartered commercial bank subsidiary of First Personal, will merge with and into Peoples Bank, the wholly-owned Indiana-chartered savings bank subsidiary of NWIN.

In connection with the merger, each outstanding share of First Personal common stock owned by stockholders owning at least 100 shares of First Personal common stock will be converted into the right to receive both (i) 0.1246 shares of NWIN common stock (subject to certain adjustments as described in the Merger Agreement), and (ii) $6.67 in cash. First Personal stockholders holding fewer than 100 shares will receive fixed consideration of $12.12 per share in cash and will not be entitled to receive any shares of NWIN common stock. All of the members of the board of directors of First Personal and FPB have entered into a voting agreement pursuant to which they have agreed to vote their shares of First Personal common stock in favor of the approval and adoption of the Merger Agreement and the merger.

Under the Merger Agreement, the executive officers and directors of NWIN and Peoples Bank serving at the effective time of the merger will continue to serve as such after the merger is consummated.

Please see “The Merger Agreement” beginning on page 51 for additional and more detailed information regarding the legal documents that govern the merger, including information about the conditions to the merger and the provisions for terminating and amending the Merger Agreement.

Background of the Merger

First Personal’s board of directors and management have regularly reviewed and discussed First Personal’s business strategy, performance and prospects in the context of the economic environment, developments in the regulation of financial institutions and the competitive landscape. Among other things, these discussions have included the possibility of continuing to operate as an independent bank holding company as well as possible strategic alternatives available to First Personal, including both internal growth strategies and possible acquisitions or business combinations involving other financial institutions. In connection with First Personal’s regular and ongoing evaluation of strategic alternatives, members of management and the board of directors have had, from time to time, discussions with representatives of other financial institutions about possible transactions and have regularly updated the board regarding such discussions. First Personal has also consulted with its legal and financial advisors, including Piper Jaffray, regarding various possible transactions.

Recognizing the need to further bolster its competitive position for the benefit of its stockholders, beginning in early 2016, the senior management and board of directors of First Personal focused on potential strategic alternatives involving the combination of First Personal with another financial institution. In this regard, First Personal requested Piper Jaffray to assist First Personal in reviewing First Personal’s possible strategic alternatives and provide advice regarding a possible business combination with another entity. Initial discussions with Piper Jaffray included an analysis of First Personal’s and FPB’s financial results, developments in the banking industry in general, and the strategic rationale for a business combination with another entity.

 

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Piper Jaffray, as part of its investment banking business, is regularly engaged in the evaluation of businesses and securities in connection with mergers and acquisitions, negotiated underwritings, and distributions of listed and unlisted securities. Piper Jaffray is familiar with the market for common stocks of publicly traded and privately held banks, thrifts, and bank and thrift holding companies. Because of Piper Jaffray’s extensive experience and capabilities related to business combinations of financial institutions and its reputation as a leading investment banking firm in the financial services area, First Personal decided to seek Piper Jaffray’s assistance in its review of strategic alternatives.

From time to time, Randall A. Schwartz, President and Chief Executive Officer of First Personal, and the chief executive officer of a bank holding company (“Company A”) met to discuss their franchises and business cultures and strategies. At an industry conference in May 2016, the chief financial officer of Company A spoke with a representative from Piper Jaffray, First Personal’s financial advisor, to inquire whether First Personal had an interest in discussing a potential business transaction. After dialogue between the parties on a possible business combination, in July 2016, First Personal and Company A entered into a non-disclosure agreement and Company A began its due diligence of First Personal.

Over the course of the next several months, First Personal’s management team had several conversations with representatives from Piper Jaffray regarding the possible impact of First Personal’s common stock valuation if it continues to operate as an independent company and the potential value that could be achieved for First Personal’s stockholders in a change in control transaction. They also discussed various bank holding companies that may likely be interested in pursuing a transaction with First Personal. Throughout these months, representatives of Barack Ferrazzano Kirschbaum & Nagelberg LLP (“Barack Ferrazzano”), First Personal’s legal counsel and First Personal’s management team discussed the directors’ fiduciary duties, specifically in the context of a change of control. Management provided the board with regular updates of their conversations with Piper Jaffray and Barack Ferrazzano.

In November 2016, First Personal and Company A entered into a written non-binding letter of intent for Company A to acquire First Personal for an aggregate amount of $14.75 million in a transaction consisting of 40% cash and 60% Company A stock. In December 2016, Company A provided First Personal with a draft merger agreement. However, Company A ended negotiations and merger agreement discussions in January 2017 because Company A itself was acquired. Despite the cessation of negotiations with Company A, after extensive deliberations, it was the consensus of the board that it would continue to evaluate its strategic options over the next several months, including a potential business combination with another financial institution as a way to return long-term value to First Personal’s stockholders.

At an industry conference in January 2017, a representative of Piper Jaffray arranged a meeting with Benjamin J. Bochnowski, President and Chief Executive Officer of NWIN, Robert T. Lowry, Executive Vice President, Chief Financial Officer and Treasurer of NWIN, and Leane E. Cerven, Executive Vice President, General Counsel and Secretary of NWIN, to discuss banking industry trends, NWIN’s general strategies for Peoples Bank’s growth and its outlook regarding strategic acquisitions, and the general characteristics NWIN would look for in a possible strategic partner. The Piper Jaffray representative indicated that he would follow up with NWIN after speaking to a client that appeared to fit NWIN’s target profile. After this meeting, the Piper Jaffray representative reported back to Mr. Schwartz regarding the initial discussions with NWIN and recommended that it would be advisable and prudent for First Personal to commence initial discussions with NWIN regarding a potential transaction. Among other factors, Piper Jaffray and Mr. Schwartz discussed NWIN and First Personal sharing similar community banking cultures and values, NWIN’s steady financial performance and strong asset quality, and NWIN’s professed desire and ability to expand its lending operations into the Chicagoland market. After further discussions with Piper Jaffray and First Personal’s board, First Personal decided that Piper Jaffray should contact representatives of NWIN to arrange an initial meeting with Mr. Schwartz.

On February 3, 2017, First Personal and NWIN entered into a confidentiality agreement in anticipation of discussions between the parties regarding a potential transaction. Thereafter, on February 10, 2017, Mr. Schwartz

 

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met with Benjamin Bochnowski and David Bochnowski, NWIN’s Executive Chairman of the Board of Directors, to discuss their respective businesses and the potential benefits of a strategic combination in order to increase long-term value for the shareholders of both First Personal and NWIN. During this meeting, Mr. Schwartz, Benjamin Bochnowski, and David Bochnowski discussed the histories of their respective institutions, what a potential combination might look like on a pro forma basis, and potential management plans going forward. As a result of this meeting, the parties determined to continue discussions and commence initial due diligence.

On February 14, 2017, the Executive Committee of NWIN’s board of directors held a meeting, at which Benjamin Bochnowski and David Bochnowski updated the committee regarding their initial discussions with Mr. Schwartz. After extensive discussion among the members of the committee, the committee authorized Benjamin Bochnowski to engage with NWIN’s financial advisor, Stephens, Inc. (“Stephens”), to organize initial due diligence of First Personal. On February 24, 2017, NWIN’s board of directors held a meeting, at which Benjamin Bochnowski provided an update to the full board regarding the initial discussions with First Personal and Mr. Schwartz and the commencement of due diligence.

During February 2017, NWIN began its preliminary diligence. First Personal’s directors were kept updated on the discussions with NWIN and were provided overview materials concerning NWIN by Piper Jaffray and management. During the balance of February and March 2017, representatives of NWIN and First Personal continued preliminary discussions regarding the outline of a possible transaction between the two organizations, including discussions regarding the companies’ respective cultures and certain personnel matters to be addressed in a transaction. In early April 2017, the parties discussed pricing expectations, pursuant to which NWIN verbally indicated to First Personal that, pending further discussions, comprehensive due diligence and negotiation, NWIN would potentially be in a position to make an offer for the acquisition of First Personal at an aggregate valuation of between $13-14 million in a transaction that would consist of 50% NWIN stock and 50% cash. After extensive discussions with management and Piper Jaffray, it was the consensus of First Personal’s board of directors to move forward with further exploration of a possible transaction with NWIN at the upper end of NWIN’s verbal indication. After further discussions between Stephens and Piper Jaffray, Piper Jaffray communicated to Stephens that First Personal would consider a transaction at an aggregate purchase price of $14 million in a 50/50 stock and cash merger transaction.

On April 20, 2017, the Executive Committee of NWIN’s board held a meeting, at which these initial pricing matters were discussed. Representatives of Stephens were present at this meeting and gave an extensive presentation regarding the results of NWIN’s initial due diligence and a financial analysis of a potential transaction based on the pricing metrics that were currently being considered. After extensive discussion among the committee members, the committee authorized Stephens to verbally communicate to Piper Jaffray an offer for NWIN to acquire First Personal for an aggregate purchase price of $13 million, subject to further due diligence and based on certain credit mark and cost savings assumptions, and authorized a written non-binding indication of interest to be delivered to First Personal providing the preliminary outline of a potential combination of NWIN and First Personal, which would include an exclusivity period in favor of NWIN as a condition to further discussions. On April 21, 2017, Stephens communicated NWIN’s verbal offer to Piper Jaffray. After extensive pricing deliberations between the parties throughout the balance of April 2017, discussions were terminated with NWIN prior to the delivery of a written indication of interest.

In July 2017, Mr. Schwartz and a representative of Piper Jaffray met with the chief executive officer and chief financial officer of a bank holding company (“Company B”) and a representative of Company B’s financial advisor. The parties discussed their franchises and business cultures and philosophies. Additionally, certain specifics of a merger transaction, including pricing expectations, were discussed. Later in July 2017, First Personal and Company B entered into a non-disclosure agreement and Company B began its due diligence.

From time to time during the summer and fall of 2017, Mr. Schwartz and Benjamin Bochnowski continued to discuss their respective organizations and opportunities to work together, including the potential for First Personal to participate on credits originated by Peoples Bank in First Personal’s market area in Illinois.

 

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Following from these discussions, at a banking industry conference on September 11, 2017 in French Lick, Indiana, Benjamin Bochnowski met with a representative of Piper Jaffray and discussed current trends in the community banking industry and the general performance of FPB and Peoples Bank, including how the performance of the two institutions could afford an opportunity to re-engage on pricing discussions in connection with a potential strategic transaction. In this regard, the Piper Jaffray representative conveyed to Benjamin Bochnowski that there was potential improvement in First Personal’s asset quality and credit profile and there could be additional opportunities for cost savings, which could work to facilitate transaction discussions, particularly on pricing.

On September 21, 2017, First Personal and Company B entered into a written non-binding letter of intent for Company B to acquire First Personal for an aggregate amount of $14.3 million in a transaction consisting of 100% cash. Following further deliberations, however, specific discussions concerning a strategic combination were terminated in mid-October 2017.

During late October 2017, Benjamin Bochnowski and Mr. Schwartz remained in regular contact regarding a potential transaction between NWIN and First Personal and potential pricing metrics. During this period, Mr. Schwartz provided updated First Personal financial information to Mr. Bochnowski. This updated financial information indicated an improvement in First Personal’s and FPB’s financial performance and condition since transaction discussions were terminated in April 2017, including an approximately 25% reduction in First Personal’s other real estate owned balance and an approximately 10% reduction in delinquent loans.

On November 6, 2017, the Executive Committee of NWIN’s board held a meeting, at which Benjamin Bochnowski provided an update to the committee regarding his recent discussions with Mr. Schwartz and the apparent improvement in First Personal’s financial position. Mr. Bochnowski noted that in addition to First Personal’s apparent improving financial condition, FPB’s asset quality appeared to have improved, and there may be opportunities for additional cost savings in the transaction based on revisions to certain assumptions, including management levels after closing. After discussion among the committee members, the committee directed Stephens to update its financial analysis regarding a potential transaction with First Personal in light of this new financial information. After this meeting, Stephens prepared an updated financial analysis of the transaction based on this updated financial information.

Thereafter, between November 7 and 8, 2017, representatives of First Personal, NWIN, Piper Jaffray, and Stephens continued to have informal discussions regarding the pricing of a potential strategic transaction. During these conversations Mr. Schwartz reiterated that, as previously communicated, the aggregate purchase price for First Personal would need to be at least $14 million for First Personal to seriously entertain a transaction, which NWIN and Stephens represented NWIN may be able to accommodate, pending further due diligence and negotiations.

On November 13, 2017, the Executive Committee of NWIN’s board held another meeting, at which Benjamin Bochnowski provided a further update to the committee regarding the discussions with First Personal and provided the committee with Stephens’ updated financial analysis. Mr. Bochnowski indicated there were material changes to First Personal’s financial metrics since April 2017, including improved FPB credit quality, additional management compensation cost savings opportunities, and the fact NWIN’s stock price had increased by 10% since April. After extensive discussion among the committee members, the committee authorized a verbal non-binding indication of interest to be delivered to First Personal contemplating an aggregate purchase price for an acquisition of First Personal of $14 million, and if such verbal offer was acceptable, to proceed with a written non-binding indication of interest and the proffer of an exclusivity agreement to First Personal.

On that same day, Stephens verbally communicated to Piper Jaffray that, pending further discussions, comprehensive due diligence and negotiation, NWIN may be in a position to offer for the acquisition of First Personal $14.0 million in the aggregate in a transaction that consists of 50% NWIN stock and 50% cash. On November 16, 2017, First Personal delivered a response to NWIN indicating it would be willing to entertain an

 

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aggregate purchase price of $14.3 million, and that it preferred more cash in the deal. Separately, First Personal had been contemplating a conversion of First Personal’s convertible senior debt to common equity prior to year-end, the outcome of which would increase the transaction price but also potentially increase common equity capital for NWIN post-closing.

After a series of conversations between Piper Jaffray and Stephens between November 16 and 27, 2017, on November 28, 2017, Stephens, on behalf of NWIN, communicated a revised verbal indication of an aggregate $15.6 million purchase price, with the increased purchase price attributable solely to the assumption that First Personal would convert all of its senior debt, subordinated debentures, and convertible preferred stock to common stock prior to closing on a dollar-for-dollar basis at no additional premium, in a transaction consisting of 45% NWIN stock and 55% cash. After extensive discussions with management, it was the consensus of First Personal’s board of directors to move forward with further exploration of a possible transaction with NWIN. On November 30, 2017, Piper Jaffray, on behalf of First Personal, delivered a response to Stephens that First Personal would be willing to entertain an aggregate purchase price of $15.75 million. After further discussions between Piper Jaffray and Stephens, on December 1, 2017, NWIN revised its verbal indication to $15.75 million in the aggregate, based on further adjustments to the amount of First Personal’s debt and preferred stock that would be converted prior to closing, in a transaction that consists of 45% NWIN stock and 55% cash and a fixed exchange ratio based on NWIN’s closing stock price on November 30, 2017.

On December 5, 2017, the board of directors of First Personal convened a conference call to discuss NWIN’s verbal offer with representatives of Piper Jaffray. A representative from Piper Jaffray discussed and reviewed its presentation materials, a copy of which had been previously provided to the board of directors. The Piper Jaffray representative discussed the recent overall and bank stock market performance and presented a summary of financial and pricing information for comparable merger and acquisition transactions. Overview materials on NWIN including recent financial performance, stock performance and trading volume were reviewed. The Piper Jaffray representative discussed in detail the December 1, 2017 verbal offer that had been delivered by NWIN. The Piper Jaffray representative also addressed a typical timeline for this type of transaction. After an extensive discussion of the expected terms, the board of directors voted to move forward with further exploration of a possible transaction with NWIN and authorized management to proceed with a transaction based on an indication of interest or similar letter from NWIN containing the terms discussed at the meeting.

On December 8, 2017, NWIN submitted a written non-binding indication of interest that proposed an acquisition of First Personal by NWIN structured as a merger of First Personal with and into NWIN, and a merger of FPB with and into Peoples Bank, at an aggregate implied purchase price of $15,750,000, payable 45% in stock (based on a fixed exchange ratio) and 55% in cash. This proposal assumed a credit mark of 2.50% of First Personal’s gross loans and other real estate owned. The indication of interest also stated that NWIN planned to retain certain key officers of FPB in an effort to lead NWIN’s banking efforts in FPB’s current and expanding footprint, and specifically it stated that NWIN intended to retain Mr. Schwartz for a certain period of time after the closing of the acquisition under a new employment agreement. The proposal also contemplated First Personal entering into an exclusivity agreement with NWIN with an exclusivity period continuing through the close of business on February 28, 2018, during which period First Personal would generally be prohibited from discussing, soliciting, or engaging in negotiations regarding a possible transaction with another financial institution. First Personal’s board reviewed the indication of interest and after extensive discussions with management, it was the consensus of First Personal’s board of directors to authorize senior management, with the assistance of its financial and legal advisors, to negotiate the final terms based on the economic terms set forth in the December 8 proposal.

On December 11, 2017, First Personal responded to NWIN’s December 8 non-binding indication of interest with revisions proposing board representation for a member of First Personal’s management on NWIN’s board of directors post-closing, and an exclusivity period ending on January 31, 2018. After further discussions between Piper Jaffray and Stephens, on December 12, 2017, NWIN submitted a revised written non-binding indication of interest providing for the same economic terms for the transaction as set forth in the December 8 non-binding

 

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indication of interest and contemplating an exclusivity period continuing through the close of business on January 31, 2018, with the ability of the parties to extend the exclusivity period to February 14, 2018, but NWIN declined First Personal’s board representation proposal. The same day, Mr. Schwartz and George Cvack, Senior Vice President of First Personal Bank, met with Benjamin Bochnowski and Mr. Lowry, along with representatives of Piper Jaffray and Stephens, to discuss their respective organizations, including First Personal’s credit portfolio, and the terms of a possible strategic transaction between the companies. On December 13, 2017, First Personal indicated to NWIN that it was interested in pursuing further discussions regarding a potential transaction and that First Personal was willing to proceed with further due diligence with a view toward the negotiation of a definitive merger agreement. That same day, First Personal executed an exclusivity agreement with NWIN based on the terms discussed on December 12, 2017.

On December 15, 2017, a data room containing diligence materials relating to First Personal was made available to NWIN and its representatives. On December 20 to 21, 2017, NWIN and its representatives conducted an on-site due diligence review of First Personal’s loan portfolio. At about this same time, NWIN’s legal counsel, Barnes & Thornburg LLP (“Barnes & Thornburg”), began drafting a definitive merger agreement.

During the final weeks of December 2017 and the first week of January 2018, NWIN continued with additional due diligence and representatives of the management teams of First Personal and NWIN met and talked several times to discuss the merger, the operations and business of the two companies and certain logistical issues, such as certain pending vendor contract renewals. On January 9, 2018, NWIN formally retained Stephens to act as NWIN’s financial advisor in connection with the merger transaction and executed an engagement letter with Stephens to that effect.

On January 12, 2018, Barnes & Thornburg delivered a first draft of the definitive merger agreement for the proposed transaction to Barack Ferrazzano. At this time, Barnes & Thornburg also delivered a draft voting agreement to Barack Ferrazzano providing for all the directors and certain members of senior management of First Personal to agree to vote in favor of the merger transaction at the special meeting of First Personal’s stockholders convened to consider the merger. Between January 12 and 23, 2018, First Personal, Barack Ferrazzano, and Piper Jaffray conducted a thorough review of the first draft of the merger agreement and analyzed numerous issues relating to the proposed transaction, including First Personal’s representations and warranties, termination provisions, and executive employment agreement matters. NWIN also continued with additional due diligence on First Personal, including legal due diligence and a continuing review of FPB’s loan portfolio and other real estate owned. At this time, First Personal and Barack Ferrazzano also began preparing First Personal’s disclosure schedules to the merger agreement. At a meeting of First Personal’s board of directors on January 23, 2018, the directors were provided an update by senior management on the initial draft of the merger agreement delivered by Barnes & Thornburg and the continuing negotiations with NWIN.

On January 24, 2018, Barack Ferrazzano delivered a revised draft of the merger agreement to Barnes & Thornburg, which, among other matters, contained revised provisions regarding the inclusion of a “double-trigger” termination provision in favor of First Personal, revisions to First Personal’s representations and warranties, revisions to First Personal’s pre-closing loan covenants, employee severance matters, and provisions regarding the treatment of First Personal’s convertible preferred stock and subordinated debentures. At this same time, NWIN, First Personal, and their respective legal counsel also began discussing possible terms of employment for Mr. Schwartz by Peoples Bank after the closing of the merger.

Between January 25 and February 8, 2018, First Personal, NWIN, and their respective legal counsels, along with Piper Jaffray and Stephens, continued to negotiate the terms of the transaction, with specific emphasis on : the representations and warranties to be given by the parties; the operational covenants regarding First Personal’s actions between signing of the Merger Agreement and the closing of the transaction, including the pre-closing loan covenants of First Personal; a mechanism to terminate the Merger Agreement in the event that First Personal does not meet a certain level of adjusted minimum tangible equity; the conversion or redemption of First Personal’s outstanding convertible preferred stock and subordinated debentures; the level of severance and other

 

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rights of First Personal employees leading up to, and following, the proposed transaction; the treatment of various compensation and insurance arrangements for First Personal employees and directors; and the provisions regarding a termination fee and First Personal’s ability to pursue other transactions if necessary to satisfy the First Personal board of directors’ fiduciary duties. During this period of negotiation, the parties and their representatives continued to conduct ongoing, reciprocal comprehensive due diligence.

On January 31, 2018, NWIN and First Personal entered into a standard confidentiality agreement concerning the confidentiality and non-disclosure of NWIN’s confidential information in order to allow First Personal to conduct a more comprehensive diligence review of NWIN’s non-public information. On the same day, the parties entered into an agreement extending the expiration of the exclusivity period from January 31, 2018 to February 14, 2018.

On February 7, 2018, the Executive Committee of NWIN’s board of directors held a meeting at which representatives of Stephens participated. At this meeting, Stephens provided the committee members an updated financial analysis of the transaction based on the results of the recent loan diligence on First Personal, including revised credit mark and cost savings calculations, which affirmed the aggregate purchase price being proposed by NWIN.

On February 9, 2018, Barnes & Thornburg delivered a further revised draft of the merger agreement to Barack Ferrazzano, with specific emphasis on revisions to First Personal’s representations and warranties, the conversion of First Personal’s senior debt into common stock, First Personal’s pre-closing loan covenant and board meeting access covenant, First Personal employee severance levels, the terms of employment for Mr. Schwartz after closing, and the amount of the termination fee payable by First Personal to NWIN upon the termination of the merger agreement under certain circumstances. Between February 9 and 14, 2018, First Personal discussed extensively the revised draft of the merger agreement with Barack Ferrazzano. On February 12, 2018, First Personal and Piper Jaffray engaged in a reverse diligence conference call with NWIN and Stephens, covering topics such as documents previously provided to First Personal by NWIN, the strategic plan and future growth prospects for NWIN, integration of First Personal into NWIN, strategic plans specific to the Illinois market, stockholder liquidity, the potential impact on NWIN of recent tax reform, existing lines of business and potential new lines of business.

On February 15, 2018, Barack Ferrazzano delivered a further revised draft of the merger agreement to Barnes & Thornburg and proposed further revisions, with a particular emphasis on First Personal’s pre-closing loan covenant, First Personal’s board meeting access covenant, First Personal employee severance levels, and the amount of the termination fee, which was proposed to be $630,000 (or approximately 4% of the overall transaction value).

Between February 15 and 16, 2018, NWIN’s management held extensive discussions with Barnes & Thornburg regarding the revised draft of the merger agreement. Also on February 16, 2018, NWIN’s board of directors held a meeting, at which representatives of Barnes & Thornburg and Stephens participated. At the meeting, a representative of Barnes & Thornburg provided a detailed summary of the latest draft of the merger agreement to the directors and highlighted the remaining open issues on the transaction. Barnes & Thornburg also summarized the directors’ fiduciary duties in the context of an acquirer in a merger transaction, and responded to numerous questions from directors. Stephens then provided an updated financial analysis of the transaction and responded to numerous questions from directors. Members of NWINs management then conveyed NWIN’s firm positions on the remaining open negotiating issues and summarized an updated timeline for the public announcement of the transaction.

Following these discussions, on February 16, 2018, Barnes & Thornburg delivered a further revised draft of the merger agreement to Barack Ferrazzano, which reflected NWIN’s firm position on First Personal’s pre-closing loan covenant, First Personal employee severance levels, and the extent of First Personal director and officer indemnification protection after the closing. The revised draft of the merger agreement also finalized the

 

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exchange ratio for the stock portion of the merger consideration at 0.1246 NWIN shares for each First Personal share of common stock and the cash portion of the merger consideration at $6.67 per First Personal share of common stock. During the course of the negotiations, First Personal’s directors were kept updated by senior management on the discussions with NWIN.

Between February 16 and 17, 2018, Barack Ferrazzano discussed extensively the revised draft of the merger agreement with First Personal. After careful consideration of the revised draft of the merger agreement and the other strategic options available to First Personal at the time, First Personal’s management determined that the proposal set forth in the February 16 revised draft of the merger agreement reflected the highest and best offer NWIN would make, and that it was in the best interests of First Personal’s stockholders to move towards the execution of the merger agreement on an expedited basis. Thereafter, between February 18 and 19, 2018, Barack Ferrazzano conferred with Barnes & Thornburg to finalize the terms of the definitive merger agreement and voting agreement, and to discuss a public announcement of the transaction, and both First Personal, NWIN, and their respective legal counsels began finalizing the parties’ disclosure schedules.

On February 20, 2018, a special meeting of the First Personal board of directors was convened. Representatives of First Personal’s senior management and legal and financial advisors participated in the meeting. A copy of the Merger Agreement that had been negotiated to date, as well as certain ancillary documents, had been provided to the members of the board of directors on February 18, 2018. Representatives of Barack Ferrazzano began the meeting by summarizing the fiduciary duties of each director, with an emphasis on the role of the board of directors in a change in control scenario. Barack Ferrazzano then reviewed in detail the terms of the Merger Agreement and the voting agreements to be entered into by the directors and senior management. Barack Ferrazzano also discussed the proposed resolutions that the board of directors would be requested to approve in connection with the merger. Representatives of Piper Jaffray reviewed with the First Personal board its financial analysis of the proposed transaction, and rendered Piper Jaffray’s oral opinion (subsequently delivered in writing at the conclusion of the meeting), as described in the section titled “Opinion of First Personal’s Financial Advisor” beginning on page 37, that as of February 20, 2018, and based upon and subject to the assumptions, considerations, qualifications and limitations set forth in the written opinion, the aggregate consideration to be received by the First Personal stockholders pursuant to the merger is fair, from a financial point of view, to those stockholders. The board discussed the attributes of NWIN’s common stock, including its recent market performance and its trading volume. Following extensive discussion and questions and answers, including consideration of the factors described under “First Personal’s Reasons for the Merger; Board Recommendation,” the board determined that the Merger Agreement and the transactions contemplated thereby was advisable and in the best interests of First Personal and its stockholders. The board then approved the Merger Agreement and the transactions contemplated thereby.

On February 20, 2018, the board of directors of NWIN held a special meeting, at which representatives of Barnes & Thornburg and Stephens participated. A representative of Barnes & Thornburg updated the board on the final revisions to the merger agreement since the last time the board met on February 16, and conveyed to the board that all remaining negotiating issues on the merger agreement had been resolved. Barnes & Thornburg once again summarized the directors’ fiduciary duties in the context of an acquirer in a merger transaction, and responded to numerous questions from directors. Stephens then provided an updated analysis of the financial aspects of the proposed merger, and Benjamin Bochnowski led a discussion regarding the strategic rationale for the transaction. Following further discussion among the directors, NWIN’s board of directors unanimously approved the merger agreement as presented at the meeting and authorized the execution of the merger agreement and all related documents.

Following the completion of the First Personal and NWIN board meetings, First Personal and NWIN executed the definitive Merger Agreement and the First Personal directors and officers executed the voting agreement after the close of business on Tuesday, February 20, 2018. Before the opening of the market on Wednesday, February 21, 2018, NWIN and First Personal issued a joint press release announcing the execution of the Merger Agreement.

 

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First Personal’s Reasons for the Merger; Board Recommendation

First Personal’s board of directors has unanimously determined that the Merger Agreement and the merger are in the best interests of First Personal and its stockholders and unanimously recommends that First Personal’s stockholders vote “FOR” the approval of the Merger Agreement and the transactions contemplated by the Merger Agreement.

First Personal’s board of directors believes that the merger with NWIN is consistent with First Personal’s goal of enhancing stockholder value and providing liquidity for the holders of First Personal common stock. In making its determination and recommendation authorizing and approving the merger and in approving and adopting the Merger Agreement, First Personal’s board of directors consulted extensively with members of First Personal’s management and with representatives of Piper Jaffray and Barack Ferrazzano. To this end, First Personal’s board of directors considered a variety of factors including the following:

 

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its knowledge of First Personal’s business, operations, financial condition, asset quality, earnings, loan portfolio, capital, and prospects both as an independent organization, and as a part of a combined company with NWIN;

 

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its understanding of NWIN’s business, operations, regulatory and financial condition, asset quality, earnings, capital, and prospects taking into account senior management’s due diligence review of NWIN and information furnished by Piper Jaffray;

 

•

based on the closing price of NWIN’s common stock on February 16, 2018 and First Personal’s December 31, 2017 balance sheet, the aggregate merger consideration was priced at 134% of tangible common book value assuming the 2025 Debentures and the Convertible Preferred Stock are fully converted to common equity and 64.5x of 2017 operating earnings (operating earnings removes a one-time non-recurring $163,530 write-down of net deferred tax assets in the fourth quarter of 2017 due to the Tax Cuts and Jobs Act of 2017);

 

•

its belief that the merger will result in a stronger banking franchise with a diversified revenue stream, strong capital ratios, a well-balanced loan portfolio, and an attractive funding base that has the potential to deliver a higher value to First Personal’s stockholders as compared to continuing to operate as a stand-alone entity;

 

•

the expanded possibilities, including organic growth and future acquisitions, that would be available to the combined company, given its larger size, asset base, capital, market capitalization, and footprint;

 

•

the anticipated pro forma impact of the merger on NWIN, including potential synergies, and the expected impact on financial metrics such as earnings and tangible common equity per share, as well as on regulatory capital levels;

 

•

the financial analyses of Piper Jaffray and its written opinion, dated as of February 20, 2018, delivered to the First Personal board of directors to the effect that, as of that date, and subject to and based on the various assumptions, considerations, qualifications, and limitations set forth in the opinion, the merger consideration was fair, from a financial point of view, to the holders of First Personal common stock;

 

•

the cash component of the merger consideration offers First Personal stockholders the opportunity to realize cash for the value of their shares with immediate certainty of value;

 

•

the stock component of the merger consideration offers First Personal stockholders the opportunity to participate as stockholders of NWIN in the future performance of the combined company;

 

•

the historical performance of each of First Personal’s common stock and NWIN’s common stock and the dividends paid for each;

 

•

the fact that upon completion of the merger First Personal’s stockholders will own approximately 5.3% of the outstanding shares of the combined company;

 

33

•

the more active trading market in NWIN common stock would give First Personal stockholders greater liquidity for their investment;

 

•

the benefits to First Personal and its customers of operating as a larger organization, including enhancements in products and services, higher lending limits, and greater financial resources;

 

•

the increasing importance of operational scale and financial resources in maintaining efficiency and remaining competitive over the long term and in being able to capitalize on technological developments that significantly impact industry competitive conditions;

 

•

the expected social and economic impact of the merger on the constituencies served by First Personal, including its borrowers, customers, depositors, employees, and communities;

 

•

the effects of the merger on other First Personal employees, including the prospects for continued employment in a larger organization and various benefits agreed to be provided to First Personal employees;

 

•

the board’s understanding of the current and prospective environment in which First Personal and NWIN operate, including national and local economic conditions, the interest rate environment, increasing operating costs resulting from regulatory initiatives and compliance mandates, and the competitive effects of the continuing consolidation in the banking industry;

 

•

the ability of NWIN to complete the merger from a financial and regulatory perspective;

 

•

the board’s understanding that the merger will qualify as a “reorganization” under Section 368(a) of the Internal Revenue Code, providing favorable tax consequences to First Personal’s stockholders in the merger; and

 

•

the board’s review with its independent legal advisor, Barack Ferrazzano, of the material terms of the Merger Agreement, including the board’s ability, under certain circumstances, to withhold, withdraw, qualify, or modify its recommendation to First Personal’s stockholders and to consider an alternative unsolicited acquisition proposal, if any, subject to the potential payment by First Personal of a termination fee to NWIN, which the board of directors concluded was reasonable in the context of termination fees in comparable transactions and in light of the overall terms of the Merger Agreement, as well as the nature of the covenants, representations and warranties, and termination provisions in the Merger Agreement.

The First Personal board of directors also considered a number of potential risks and uncertainties associated with the merger in connection with its deliberation of the proposed transaction, including, without limitation, the following:

 

•

the risk that the consideration to be paid to First Personal stockholders could be adversely affected by a decrease in the trading price of NWIN common stock during the pendency of the merger;

 

•

the potential risk of diverting management attention and resources from the operation of First Personal’s business and towards the completion of the merger;

 

•

the restrictions on the conduct of First Personal’s business prior to the completion of the merger, which are customary for public company merger agreements involving financial institutions, but which, subject to specific exceptions, could delay or prevent First Personal from undertaking business opportunities that may arise or any other action it would otherwise take with respect to the operations of First Personal absent the pending merger;

 

•

the potential risks associated with achieving anticipated cost synergies and savings and successfully integrating First Personal’s business, operations, and workforce with those of NWIN;

 

•

the fact that the interests of certain of First Personal’s directors and executive officers may be different from, or in addition to, the interests of First Personal’s other stockholders as described under the heading “Interests of Certain Directors and Officers of First Personal in the Merger” beginning on page 73;

 

34

•

that, while First Personal expects that the merger will be completed, there can be no assurance that all conditions to the parties’ obligations to complete the merger will be satisfied, including the risk that necessary regulatory approvals or the First Personal stockholder approval might not be obtained and, as a result, the merger may not be completed;

 

•

the risk of potential employee attrition and/or adverse effects on business and customer relationships as a result of the pending merger;

 

•

the fact that: (i) First Personal would be prohibited from affirmatively soliciting acquisition proposals after execution of the Merger Agreement; and (ii) First Personal would be obligated to pay to NWIN a termination fee if the Merger Agreement is terminated under certain circumstances, which may discourage other parties potentially interested in a strategic transaction with First Personal from pursuing such a transaction; and

 

•

the possibility of litigation challenging the merger, and its belief that any such litigation would be without merit.

This discussion of the information and factors considered by First Personal’s board of directors in reaching its conclusions and recommendation includes the factors identified above, but is not intended to be exhaustive and may not include all of the factors considered by the First Personal board of directors. In view of the wide variety of factors considered in connection with its evaluation of the merger and the other transactions contemplated by the Merger Agreement, and the complexity of these matters, the First Personal board of directors did not find it useful and did not attempt to quantify, rank, or assign any relative or specific weights to the various factors that it considered in reaching its determination to approve the merger and the other transactions contemplated by the Merger Agreement, and to make its recommendation to First Personal’s stockholders. Rather, the First Personal board of directors viewed its decisions as being based on the totality of the information presented to it and the factors it considered. In addition, individual members of the First Personal board of directors may have assigned different weights to different factors.

Certain of First Personal’s directors and executive officers have financial interests in the merger that are different from, or in addition to, those of First Personal’s stockholders generally. The First Personal board of directors was aware of and considered these potential interests, among other matters, in evaluating the merger and in making its recommendation to First Personal’s stockholders. For a discussion of these interests, see “Interests of Certain Directors and Officers of First Personal in the Merger” beginning on page 73.

For the reasons set forth above, First Personal’s board of directors unanimously determined that the merger and the Merger Agreement are advisable and in the best interests of First Personal and its stockholders, and unanimously approved and adopted the Merger Agreement. The First Personal board of directors unanimously recommends that First Personal’s stockholders vote “FOR” approval of the Merger Agreement and the merger.

NWIN’s Reasons for the Merger

In reaching its decision to approve the Merger Agreement, NWIN’s board of directors consulted with NWIN’s management, as well as its financial and legal advisors, and considered a number of factors, including:

 

•

The overall strategic, cultural, and financial fit as a result of the merger between NWIN and First Personal;

 

•

the business, earnings, operations, financial condition, management, prospects, capital levels, and asset quality of both NWIN and First Personal, taking into account the results of NWIN’s due diligence review of First Personal, including NWIN’s assessments of First Personal’s credit policies, asset quality, adequacy of loan loss reserves, interest rate risk, and litigation;

 

•

the overall greater scale that will be achieved by the merger that will better position the combined company for future growth;

 

35

•

its belief that NWIN and First Personal have similar cultures and similar community-oriented philosophies, and the complementary nature of the strengths of the management personnel of each company;

 

•

the belief of NWIN’s management that the merger will result in pre-tax annual cost savings of approximately 45% of First Personal’s non-interest expense base with 75% realized in 2018 and 100% in 2019 and thereafter;

 

•

the belief of NWIN that the merger will produce earnings enhancement opportunities from additional sources of non-interest income;

 

•

the estimation by NWIN’s management that the merger will result in after-tax earnings per share dilution of $0.21 in 2018, and after-tax earnings per share accretion of $0.51 in 2019 and $0.56 in 2020;

 

•

the likelihood of a successful integration of First Personal’s business, operations, and workforce with those of NWIN and of successful operation of the combined company, and the belief that customer disruption in the transition phase would not be significant due to the complementary nature of the markets served by NWIN and First Personal;

 

•

the historical and current market prices of NWIN’s common stock;

 

•

the fact that First Personal’s stockholders would own approximately 5.3% of the diluted share ownership of the combined company;

 

•

the financial and other terms and conditions of the Merger Agreement, including the fact that the exchange ratio and the per share amount of the cash merger consideration are both fixed, provisions designed to limit the ability of the First Personal’s board of directors to entertain third party acquisition proposals, a provision giving First Personal the right to terminate the Merger Agreement in the event of a specified decline in the market value of NWIN’s common stock relative to a designated market index unless NWIN agrees to pay additional merger consideration, and provisions providing for payment by First Personal to NWIN of a $630,000 termination fee if the Merger Agreement is terminated under certain circumstances;

 

•

the board’s belief that NWIN will be able to finance the cash portion of the merger consideration on substantially the terms contemplated by it;

 

•

the interests of First Personal’s directors and executive officers in the merger, in addition to their interests generally as stockholders, as described under “Interests of Certain Directors and Officers of First Personal in the Merger” beginning on page 73; and

 

•

the need to obtain First Personal’s stockholder approval and regulatory approvals in order to complete the transaction.

The foregoing discussion of the factors considered by NWIN’s board of directors is not intended to be exhaustive, but rather includes the material factors considered by NWIN’s board of directors. In reaching its decision to approve the Merger Agreement and the merger, NWIN’s board of directors did not quantify or assign any relative weights to the factors considered, and individual directors may have given different weights to different factors. NWIN’s board of directors considered all these factors as a whole, including discussions with, and questioning of, NWIN’s management and its financial and legal advisors, and overall considered the factors to be favorable to, and to support, its determination.

For the reasons set forth above, NWIN’s board of directors unanimously approved the Merger Agreement and the merger, and the transactions contemplated by the Merger Agreement.

Effects of the Merger

The respective boards of directors of NWIN and First Personal believe that, over the long-term, the merger will be beneficial to NWIN’s shareholders, including the current stockholders of First Personal who will become

 

36

NWIN shareholders if the merger is completed. The NWIN board of directors believes that one of the potential benefits of the merger is the cost savings that may be realized by combining the two companies and integrating FPB into NWIN’s banking subsidiary, which savings are expected to enhance NWIN’s earnings.

NWIN expects to reduce expenses by combining accounting, data processing, retail and lending support, and other administrative functions after the merger, which will enable NWIN to achieve economies of scale in these areas. Promptly following the completion of the merger, which is expected to occur during the third quarter of 2018, NWIN plans to begin the process of eliminating redundant functions and eliminating duplicative expenses. It is contemplated that after the merger Peoples Bank will continue to operate the main offices and branch offices of FPB. For more information about FPB’s branch offices, see “Additional Information About First Personal – Properties” beginning on page 93.

The amount of any cost savings NWIN may realize in 2018 will depend upon how quickly and efficiently NWIN is able to implement the processes outlined above during the year.

NWIN believes that it will achieve cost savings based on the assumption that it will be able to:

 

•

reduce data processing costs;

 

•

reduce staff;

 

•

reduce debt service payments;

 

•

achieve economies of scale in advertising and marketing budgets; and

 

•

reduce legal and accounting fees.

NWIN has based these assumptions on its present assessment of where savings could be realized based upon the present independent operations of the two companies. Actual savings in some or all of these areas could be higher or lower than is currently expected.

NWIN also believes that the merger will be beneficial to the customers of First Personal as a result of the additional products and services offered by NWIN and because of its increased lending capabilities.

Negotiations, Transactions, or Materials Contracts

Except as set forth above or elsewhere in this proxy statement/prospectus, none of First Personal, FPB, nor any of their respective directors, executive officers, or other affiliates had any negotiations, transactions, or material contracts with NWIN, Peoples Bank, or any of their directors, executive officers, or other affiliates during the past three years that would require disclosure under the rules and regulations of the SEC applicable to this proxy statement/prospectus.

Opinion of First Personal’s Financial Advisor

By letter dated January 31, 2018, First Personal retained Piper Jaffray to act as its financial advisor in connection with a potential transaction. In its capacity as financial advisor, Piper Jaffray provided a fairness opinion to the board of directors of First Personal in connection with the merger. At the meeting of the board of directors of First Personal on February 20, 2018, Piper Jaffray rendered its oral opinion to the First Personal board (which was subsequently confirmed in writing by delivery of Piper Jaffray’s written opinion dated the same date) that, based upon and subject to the various factors, assumptions and limitations set forth in such opinion, Piper Jaffray representatives’ experience as investment bankers, Piper Jaffray’s work as described in such opinion and other factors Piper Jaffray deemed relevant, as of such date, the aggregate consideration to be received by the First Personal stockholders pursuant to the merger was fair, from a financial point of view, to those stockholders. The Piper Jaffray written opinion dated February 20, 2018 is sometimes referred to herein as the “Piper Jaffray Opinion.”

 

37

The Piper Jaffray Opinion was provided for the information and assistance of the First Personal board in connection with its consideration of the merger. The Piper Jaffray Opinion did not address the merits of First Personal’s underlying decision to engage in the merger or the relative merits of the merger compared to any alternative business strategy or transaction in which First Personal might engage. The Piper Jaffray Opinion does not constitute a recommendation to the First Personal board or any holder of First Personal common stock as to how any First Personal board member or such holder should vote with respect to the merger.

The full text of the Piper Jaffray Opinion, which sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations on the review undertaken in rendering its opinion, is attached as Appendix B to this proxy statement/prospectus and is incorporated herein by reference. The summary of the Piper Jaffray Opinion set forth herein is qualified in its entirety by reference to the full text of the opinion. First Personal common stockholders should read the full text of the opinion carefully and in its entirety. The Piper Jaffray Opinion was reviewed and approved by the fairness opinion committee of Piper Jaffray. Piper Jaffray provided its opinion to the board of directors of First Personal on February 20, 2018 in connection with and for the purposes of the First Personal board’s evaluation of the merger. The Piper Jaffray Opinion addressed only the fairness, from a financial point of view, as of February 20, 2018, of the aggregate consideration to be received by the First Personal stockholders pursuant to the merger. Piper Jaffray expressed no view or opinion as to any other terms or aspects of the Merger Agreement, the merger, or any other transactions contemplated by the Merger Agreement, including any legal, accounting, and tax matters relating to the merger and any such other transactions contemplated by the Merger Agreement. Piper Jaffray did not express any opinion as to the compensation to be received in the merger by officers, directors, or employees of First Personal, or class of such persons, other than in their capacity as First Personal stockholders.

In arriving at the opinion, Piper Jaffray has:

 

(i)

reviewed and analyzed the financial terms of a draft of the Merger Agreement dated February 19, 2018;

 

(ii)

reviewed and analyzed certain financial and other data with respect to First Personal and NWIN which was publicly available;

 

(iii)

reviewed and analyzed certain information, including historical operating data, relating to the business, earnings, cash flow, assets, liabilities and prospects of First Personal and NWIN that were publicly available, as well as those that were furnished to Piper Jaffray by First Personal and NWIN, respectively, as well as financial forecasts furnished to Piper Jaffray by First Personal and forecasts of certain cost savings expected by management of NWIN to result from the merger (the “Synergies”);

 

(iv)

conducted discussions with members of senior management and representatives of First Personal and NWIN concerning the matters described in clauses (ii) and (iii) above, as well as their respective businesses and prospects before and after giving effect to the merger and the Synergies;

 

(v)

reviewed the current and historical reported prices and trading activity of NWIN common stock;

 

(vi)

compared the financial performance of First Personal and NWIN with that of certain other publicly traded companies that Piper Jaffray deemed relevant;

 

(vii)

reviewed the financial terms, to the extent publicly available, of certain business combination transactions that Piper Jaffray deemed relevant;

 

(viii)

performed a discounted cash flow analysis for each of First Personal and NWIN on a standalone basis and;

 

(ix)

conducted such other analyses, examinations, and inquiries and considered such other financial, economic, and market criteria as Piper Jaffray deemed necessary in arriving at Piper Jaffray’s opinion.

Piper Jaffray relied upon and assumed, without assuming liability or responsibility for independent verification, the accuracy and completeness of all information that was publicly available or was furnished, or

 

38

otherwise made available, to or discussed with or reviewed by Piper Jaffray. Piper Jaffray further relied upon the assurances of the management of First Personal and NWIN that the financial information provided has been prepared on a reasonable basis in accordance with industry practice, and that they are not aware of any information or facts that would make any information provided to Piper Jaffray incomplete, inaccurate or misleading. Without limiting the generality of the foregoing, for the purpose of this opinion, Piper Jaffray assumed that with respect to financial forecasts, estimates and other forward-looking information (including the Synergies) reviewed by Piper Jaffray, that such information has been reasonably prepared based on assumptions reflecting the best available estimates and judgments of the management of First Personal, and NWIN with respect to the Synergies, as of the time they were prepared as to the expected future results of operations and financial condition of First Personal and NWIN to which such financial forecasts, estimates and other forward-looking information (including the Synergies) relate. Piper Jaffray expresses no opinion as to any such financial forecasts, estimates or forward-looking information (including the Synergies) or the assumptions on which they were based. Piper Jaffray further assumed that the merger will qualify as a tax-free reorganization for United States federal income tax purposes. Piper Jaffray relied, with consent, on advice of the outside counsel and the independent accountants to First Personal, and on the assumptions of the management of First Personal, as to all accounting, legal, tax and financial reporting matters with respect to First Personal and the merger agreement.

In arriving at its opinion, Piper Jaffray assumed that the executed Merger Agreement would be in all material respects identical to the last draft reviewed by Piper Jaffray. Piper Jaffray relied upon and assumed, without independent verification, that (i) the representations and warranties of all parties to the Merger Agreement and all other related documents and instruments that are referred to therein were true and correct, (ii) each party to such agreements would fully and timely perform all of the covenants and agreements required to be performed by such party, (iii) the merger would be consummated pursuant to the terms of the Merger Agreement without amendments thereto, and (iv) all conditions to the consummation of the merger would be satisfied without waiver by any party of any conditions or obligations thereunder. Additionally, Piper Jaffray assumed that all the necessary regulatory approvals and consents required for the merger would be obtained in a manner that will not adversely affect First Personal, NWIN, or the contemplated benefits of the merger.

In arriving at its opinion, Piper Jaffray did not perform any appraisals or valuations of any specific assets or liabilities (fixed, contingent or other) of First Personal or NWIN, and has not been furnished or provided with any such appraisals or valuations, nor has Piper Jaffray evaluated the solvency of First Personal or NWIN under any state or federal law relating to bankruptcy, insolvency or similar matters. The analyses performed by Piper Jaffray in connection with this opinion were going concern analyses. Piper Jaffray expresses no opinion regarding the liquidation value of First Personal, NWIN, or any other entity. Piper Jaffray assumed that there was no material change in the respective assets, financial condition, results of operations, business, or prospects of First Personal or NWIN since the date of the most recent financial data made available to Piper Jaffray. Piper Jaffray has not: (i) conducted a review of any individual credit files of First Personal or NWIN, nor evaluated the adequacy of the loan or lease reserves of First Personal or NWIN, (ii) conducted a review of any credit mark which may be taken in connection with the merger, nor evaluated the adequacy of any contemplated credit mark to be so taken, or (iii) conducted a review of the collectability of any asset or the future performance of any loan of First Personal or NWIN. Piper Jaffray assumed, with consent, that the respective allowances for loan and lease losses for First Personal and NWIN, and the credit mark are adequate to cover such losses and would be adequate for NWIN on a pro forma basis assuming completion of the merger. Accordingly, Piper Jaffray expresses no opinion with respect to the foregoing. Without limiting the generality of the foregoing, Piper Jaffray has undertaken no independent analysis of any pending or threatened litigation, regulatory action, possible unasserted claims or other contingent liabilities, to which First Personal, NWIN, or any of their affiliates is a party or may be subject, and at the direction of First Personal and with its consent, Piper Jaffray’s opinion makes no assumption concerning, and therefore does not consider, the possible assertion of claims, outcomes, or damages arising out of any such matters. Piper Jaffray has also assumed that neither First Personal nor NWIN is party to any material pending transaction, including without limitation any financing, recapitalization, acquisition, or merger, divestiture, or spin-off, other than the merger.

 

39

The Piper Jaffray Opinion is necessarily based upon the information available to Piper Jaffray and facts and circumstances as they exist and were subject to evaluation on the date of the opinion; events occurring after the date of the opinion could materially affect the assumptions used in preparing the Piper Jaffray Opinion. Piper Jaffray did not express any opinion as to the price at which shares of NWIN common stock may trade following announcement of the merger or at any future time. Piper Jaffray has not undertaken to reaffirm or revise its opinion or otherwise comment upon any events occurring after the date of the opinion and does not have any obligation to update, revise or reaffirm its opinion.

Pursuant to Piper Jaffray’s January 31, 2018 engagement letter, First Personal agreed to pay a fairness opinion cash fee of $100,000 to Piper Jaffray upon delivery of Piper Jaffray’s fairness opinion, which fee was not contingent on the conclusions reached in such opinion or the consummation of the merger. First Personal has also agreed to pay to Piper Jaffray a fee equal to 1.50% of the aggregate transaction value paid upon closing of the merger. In addition, First Personal has agreed to reimburse Piper Jaffray for certain expenses incurred in connection with its services and indemnify Piper Jaffray for certain liabilities, including liabilities arising under the federal securities laws. Except as disclosed above, there are no material relationships that existed during the two years prior to the date of the Piper Jaffray Opinion or that are mutually understood to be contemplated, in which any compensation was received or is intended to be received as a result of the relationship between Piper Jaffray and any party to the Merger Agreement.

As a part of its investment banking business, Piper Jaffray and its affiliates are continually engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, investments for passive and control purposes, private placements and valuations for corporate and other purposes. Piper Jaffray was selected to advise First Personal with respect to the merger on the basis of such experience and its familiarity with First Personal.

Piper Jaffray has, in the past, provided financial advisory and financing services to First Personal and may continue to do so and has received, and may receive, fees for the rendering of such services. In the ordinary course of Piper Jaffray’s business, it and its affiliates may actively trade securities of NWIN for its own account or the account of its customers and, accordingly, may at any time hold a long or short position in such securities. Piper Jaffray may also, in the future, provide investment banking and financial advisory services to First Personal, NWIN or entities that are affiliated with First Personal or NWIN, for which Piper Jaffray would expect to receive compensation.

Consistent with applicable legal and regulatory requirements, Piper Jaffray has adopted policies and procedures to establish and maintain the independence of its Research Department and personnel. As a result, Piper Jaffray’s research analysts may hold opinions, make statements or recommendations, and/or publish research reports with respect to NWIN and the merger and other participants in the merger that differ from the views of Piper Jaffray’s investment banking personnel.

The Piper Jaffray Opinion was provided to the board of directors of First Personal in connection with its consideration of the merger and is not intended to be and does not constitute a recommendation to any stockholder of First Personal as to how such stockholder should act or vote with respect to the merger or any other matter. The Piper Jaffray Opinion was approved for issuance by the fairness opinion committee of Piper Jaffray.

Piper Jaffray was not requested to opine as to, and the Piper Jaffray Opinion does not address, the basic business decision to proceed with or effect the merger, the merits of the merger relative to any alternative transaction, or business strategy that may be available to First Personal, NWIN’s ability to fund the merger consideration, or any other terms contemplated by the Merger Agreement or the fairness of the merger to any other class of securities, creditor, or other constituency of First Personal. Set forth below is a summary of the material financial analyses performed by Piper Jaffray in connection with rendering its opinion, as delivered to the First Personal board in connection with its meeting on February 20, 2018. The order of analyses described

 

40

does not represent relative importance or weight given to those analyses by Piper Jaffray. Some of the summaries of the financial analyses include information presented in tabular format. To fully understand the summary of the analyses used by Piper Jaffray, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the analysis.

For purposes of its analyses, Piper Jaffray reviewed a number of financial and operating metrics, including:

Summary of Proposal. Piper Jaffray reviewed the financial terms of the merger. Using a transaction value of $15.6 million (based on NWIN’s February 16, 2018 stock price) and a fully diluted number of shares outstanding of First Personal common stock as of December 31, 2017 including common shares to be issued in the full conversion of the 2025 Debentures and Convertible Preferred Stock to common equity assumed to occur prior to completion of the merger, Piper Jaffray calculated an implied per share merger consideration of $12.03 per share. Based on First Personal’s most recent publicly filed regulatory financial statements as of December 31, 2017, Piper Jaffray calculated the implied merger consideration multiples set forth in the table below. The terms used in the table include the following:

 

•

Book Value, which means First Personal’s total book value as of December 31, 2017;

 

•

Tangible Book Value, which means First Personal’s total book value less the value of any intangible assets, including goodwill, as of December 31, 2017;

 

•

Last Twelve Months Earnings (referred to as “LTM Earnings”), which means First Personal’s net income for the twelve month period ended December 31, 2017;

 

•

Core Deposit Premium, which means the quotient of (i) the equity value of First Personal, less tangible book value, and (ii) aggregate core deposits (excluding jumbo deposits), expressed as a percentage; and

 

•

2018 Estimated Earnings, which mean the earnings estimated by First Personal for calendar 2018.

 

Price / Book Value(1)			134	%
Price / Tangible Book Value(1)			134	%
Price / LTM Earnings – Reported			198.7	x
Price / LTM Earnings – Operating(2)			64.5	x
Price / LTM Pre-Tax Earnings			34.2	x
Price / 2018 Estimated Earnings(3)			15.4	x
Core Deposit Premium(1)			3.2	%

 

(1)	Assumes 2025 Debentures and Convertible Preferred Stock are fully converted to common equity.

(2)	Operating earnings removes one-time non-recurring $163,530 write-down of net deferred tax assets in Q4 2017 due to Tax Cuts and Jobs Act of 2017.

(3)	Based on First Personal management forecasts.

 

41

Pro Forma Contribution at Announcement. Piper Jaffray analyzed the relative contribution of certain balance sheet and income statement items of First Personal and NWIN and compared those relative contributions to the implied pro forma ownership of First Personal and NWIN common shareholders on an as-if 100% stock transaction basis. This analysis excluded any acquisition related accounting adjustments or cost synergies projected to be achieved through the merger. The balance sheet items were based on December 31, 2017 financial information. The results of Piper Jaffray’s analysis are set forth in the following table:

 

		NWIN as % of Total				First Personal as % of Total
BALANCE SHEET
Total Assets			86.3	%			13.7	%
Gross Loans			86.2	%			13.8	%
Core Deposits			85.9	%			14.1	%
Noninterest Bearing Deposits			89.2	%			10.8	%
Common Equity			90.1	%			9.9	%
Common Equity (as if fully converted)(1)			88.8	%			11.2	%
Tangible Common Equity			89.8	%			10.2	%
Tangible Common Equity (as if fully converted)(1)			88.4	%			11.6	%
PROJECTED INCOME STATEMENT
2017 Reported Earnings(2)			99.1	%			0.9	%
2017 Operating Earnings(3)			97.5	%			2.5	%
2018 Estimated Earnings			91.2	%			8.8	%
2019 Estimated Earnings			90.9	%			9.1	%
Pro Forma Ownership (as-if 100% stock transaction)			88.7	%			11.3	%
Pro Forma Ownership (proposed deal mix)			94.6	%			5.4	%

 

Note:

First Personal earnings estimates per management.

Note:

NWIN earnings estimates per Piper Jaffray assumptions, reviewed with First Personal management.

1)	Assumes First Personal’s 2025 Debentures and Convertible Preferred Stock are converted to common equity prior to closing.

2)	Reported earnings reflect write-down of net deferred tax assets in Q4 2017 for both NWIN and First Personal due to Tax Cuts and Jobs Act of 2017.

3)	Operating earnings removes one-time non-recurring $164,000 write-down of net deferred tax assets for First Personal and $517,000 write-down of net deferred tax assets for NWIN in Q4 2017 due to Tax Cuts and Jobs Act of 2017.

First Personal Comparable Public Trading Group Analysis. Using publicly available information, Piper Jaffray compared selected financial and market data of First Personal with similar data for companies Piper Jaffray deemed comparable to First Personal for purposes of its analysis.

The comparable group as determined by Piper Jaffray for purposes of its analysis consisted of banks which are exchange traded or listed on “over-the-counter” markets and are headquartered in Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin with assets between $100 million – $600 million, LTM Core ROAA (as defined below) less than 0.75%, and NPAs/Assets (as defined below) greater than 1.0%. The group was comprised of the following companies and is referred to herein as the “First Personal Comparable Public Trading Group”:

 

First Personal Comparable Public Trading Group
Bancorp. of Southern Indiana		Northern States Financial Corp		Poage Bankshares Inc.
Central Federal Corp.		West Shore Bank Corporation		Oxford Bank Corporation
Comunibanc Corp.		AMB Financial Corp.		Edgewater Bancorp Inc
Third Century Bancorp		Peoples-Sidney Financial Corp.

 

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In all instances, multiples were based on closing stock prices on February 16, 2018. For each of the following analyses performed by Piper Jaffray, financial and market data and earnings per share estimates for the selected companies were based on the selected companies’ filings with the SEC and information Piper Jaffray obtained from SNL Financial. The multiples and ratios for each of the selected companies were based on the most recent publicly available information. Throughout Piper Jaffray’s analysis the high and the low bounds of the ranges presented represented the 80^th and 20^th percentile values, respectively.

With respect to the First Personal Comparable Public Trading Group table below, the information Piper Jaffray presented included the following:

 

•

last twelve months core net income (excludes securities gains or losses) divided by average assets, or LTM Core ROAA;

 

•

last twelve months core net income (excludes securities gains or losses) divided by average equity, or LTM Core ROAE;

 

•

net interest income divided by average earnings assets, or NIM;

 

•

noninterest expense divided by operating revenue, or Efficiency Ratio;

 

•

nonperforming assets divided by total assets, or NPAs / Assets;

 

•

shareholder’s equity less intangible assets, goodwill and preferred equity divided by total assets less intangible assets and goodwill, or TCE / TA;

 

•

multiple of price to book value, or Price / Book;

 

•

multiple of price to tangible book value, or Price / TBV;

 

•

multiple of price to last twelve months earnings per share, or Price / LTM EPS;

 

•

multiple of price to last twelve months pre-tax earnings per share, or Price / Pre-Tax LTM EPS; and

 

•

premium over tangible common equity as a % of core deposits, or Core Deposit Premium.

Results of Piper Jaffray’s analysis were presented for the First Personal Comparable Public Trading Group, as shown in the following table:

 

First Personal Comparable Public Trading Group
		First Personal 12/31/17				Deal Multiple				High				Median				Low
LTM Core ROAA			0.05	%			n/a				0.72	%			0.48	%			0.28	%
LTM Core ROAE			0.77	%			n/a				7.48	%			5.12	%			2.80	%
NIM			3.46	%			n/a				3.75	%			3.42	%			3.21	%
Efficiency Ratio			91	%			n/a				81	%			78	%			77	%
NPAs / Assets			3.63	%			n/a				2.07	%			1.76	%			1.09	%
TCE / TA(1)			7.9	%			n/a				11.6	%			9.8	%			8.3	%
Price / Book(1)			n/a				1.34	x			1.14	x			1.05	x			0.96	x
Price / TBV(1)			n/a				1.34	x			1.14	x			1.08	x			0.96	x
Price / LTM EPS			n/a				198.7	x			28.8	x			18.6	x			15.0	x
Price / Pre-Tax LTM EPS			n/a				34.2	x			21.3	x			15.5	x			11.1	x
Core Deposit Premium(1)			n/a				3.2	%			1.8	%			0.9	%			-0.7	%

 

1)	Assumes First Personal’s 2025 Debentures and Convertible Preferred Stock are converted to common equity.

 

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Based on the analysis above, Piper Jaffray then applied the range of multiples to the applicable metrics of First Personal. The analysis indicated the following implied values of First Personal common stock, as compared to the merger consideration:

 

First Personal Implied Deal Value Based on Comparable Public Trading Group Multiples
		Low – High
Price / Book(1)		$11.1mm – $13.3mm
Price / TBV(1)		$11.1mm – $13.3mm
Price / LTM Operating EPS(2)		$3.6mm – $7.0mm
Price / LTM Reported EPS		$1.2mm – $2.3mm
Price / Pre-Tax LTM EPS		$5.1mm – $9.7mm
Core Deposit Premium(1)		$10.7mm – $14.0mm

 

(1)	First Personal book multiples assume 2025 Debentures and Convertible Preferred Stock are fully converted to common equity.

(2)	Operating earnings removes one-time non-recurring $163,530 write-down of net deferred tax assets in Q4 2017 due to Tax Cuts and Jobs Act of 2017.

First Personal Comparable M&A Transactions Analysis. Using publicly available information, Piper Jaffray compared the proposed financial terms of the merger to publicly available financial terms of a group of merger and acquisition transactions selected by Piper Jaffray involving companies in the depository industry.

The transactions group selected by Piper Jaffray for purposes of its analysis includes 14 selected transactions announced since January 1, 2016 with announced deal values and seller headquartered in Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin with assets between $100 million to $600 million, announced deal value greater than $1 million, LTM ROAA less than 0.75%, and NPAs/Assets greater than 1.0%. The group was comprised of the following transactions and is referred to herein as the “First Personal Comparable M&A Transactions”:

 

Buyer / Seller

Investor group/ St. Louis Bank

Guaranty Federal Bancshares, Inc./ Hometown Bancshares, Inc.

Horizon Bancorp/ Lafayette Community Bancorp

Bank First National Corporation/ Waupaca Bancorporation, Inc.

Topeka Bancorp Inc./ Kaw Valley Bancorp, Inc.

Southern Missouri Bancorp, Inc./ Tammcorp, Inc.

First Commonwealth Financial Corporation/ DCB Financial Corp

United Community Bancorp, Inc./ Liberty Bancshares, Inc.

United Community Financial Corp./ Ohio Legacy Corp

South Central Bancshares of Kentucky, Inc./ Kentucky National Bancorp, Inc

Monticello Bankshares, Inc./ Banco Harlan, Inc.

Fentura Financial, Inc./ Community Bancorp, Inc.

Mackinac Financial Corporation/ First National Bank of Eagle River

Wintrust Financial Corporation/ Generations Bancorp, Inc.

With respect to the First Personal Comparable M&A Transactions, the information Piper Jaffray presented included the following:

 

•

LTM ROAA;

 

•

NPAs / Assets;

 

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•

TE / TA;

 

•

Price / Book;

 

•

Price / TBV;

 

•

Price / LTM EPS; and

 

•

Core Deposit Premium.

Results of Piper Jaffray’s analysis were presented for the First Personal Comparable M&A Transactions, as shown in the following table:

 

First Personal Comparable M&A Transactions
		First Personal 12/31/17				Deal Multiple				High				Median				Low
LTM ROAA			0.05	%			n/a				0.62	%			0.48	%			0.17	%
NPAs/ Assets			3.63	%			n/a				3.41	%			2.41	%			1.70	%
TE/ TA			7.9	%			n/a				11.4	%			10.6	%			9.4	%
Price / Book			n/a				1.34	x			1.45	x			1.08	x			0.95	x
Price / TBV			n/a				1.34	x			1.47	x			1.16	x			0.95	x
Price / LTM EPS – Reported			n/a				198.7	x			35.3	x			28.6	x			18.0	x
Core Deposit Premium			n/a				3.2	%			6.5	%			3.3	%			0.1	%

Based on the analysis above, Piper Jaffray then applied the range of multiples to the applicable metrics of First Personal. The analysis indicated the following implied values of First Personal common equity, as compared to the merger consideration:

 

First Personal Implied Deal Value Based on Comparable M&A Transaction Group Multiples (at announcement)
		Low – High
Price / Book(1)		$11.1mm – $16.9mm
Price / TBV(1)		$11.1mm – $17.1mm
Price / LTM Operating EPS(2)		$4.4mm – $8.5mm
Price / LTM Reported EPS		$1.4mm – $2.8mm
Core Deposit Premium(1)		$11.8mm – $19.8mm

 

(1)	First Personal book multiples assume 2025 Debentures and Convertible Preferred Stock are fully converted to common equity.

(2)	Operating earnings removes one-time non-recurring $163,530 write-down of net deferred tax assets in Q4 2017 due to Tax Cuts and Jobs Act of 2017.

First Personal Discounted Cash Flow Analysis. Piper Jaffray calculated a range of implied values for First Personal common stock by estimating the present value of cash flows First Personal could provide to holders of First Personal common stock through 2022 and using the terminal multiple approach to determine a terminal value.

The following assumptions were used:

 

•

financial forecasts from 2018 – 2022 provided by First Personal management;

 

•

maintenance of a 10.00% tangible common equity-to-tangible asset ratio;

 

•

discount rates range from 15.5% to 17.5%; and

 

•

terminal multiple applied to final year earnings ranged from 17.5x to 19.5x.

 

45

The discounted cash flow calculations resulted in the below valuation ranges:

 

Discount Rate		Terminal Multiple
		17.5x		18.5x		19.5x
15.50%		$10.8mm		$11.5mm		$12.3mm
16.50%		$10.2mm		$10.9mm		$11.6mm
17.50%		$9.7mm		$10.4mm		$11.0mm

The discounted cash flow analysis is a widely used valuation methodology that relies on numerous assumptions, including asset growth rates, earnings growth rates, discount rates, and terminal multiples, and the results of such methodology are highly dependent on these assumptions. Except for the financial forecasts from 2018 – 2022 provided by First Personal management, these other assumptions were determined by Piper Jaffray for purposes of its discounted cash flow analysis. The analysis does not purport to be indicative of the actual values or expected values of First Personal. In addition, the analysis relates only to the potential value achieved by First Personal as a stand-alone entity based on assumptions described herein. Therefore, the analysis is not intended to, and does not purport to, reflect values achieved on a post-merger basis with NWIN.

NWIN Comparable Public Trading Group Analysis. Using publicly available information, Piper Jaffray compared financial data of NWIN to banks listed on “over-the-counter” markets headquartered in Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin with assets between $500 million -$1.5 billion, NPAs/Assets less than 2.0%, and LTM Core ROAA greater than 0.50%. The comparable public trading group as determined by Piper Jaffray for purposes of its analysis was comprised of the 10 following companies and is referred to herein as the “NWIN Comparable Public Trading Group”:

 

NWIN Comparable Public Trading Group
Security National Corporation		Tri City Bankshares Corporation		Oconomowoc Bancshares, Inc.
First Bankers Trustshares, Inc.		Heartland BancCorp		PSB Holdings, Inc.
Croghan Bancshares, Inc.		Cortland Bancorp		County Bank Corp
Killbuck Bancshares, Inc.

In all instances, multiples were based on closing stock prices on February 16, 2018. For each of the following analyses performed by Piper Jaffray, financial and market data and earnings per share estimates for the selected companies were based on the selected companies’ filings with the SEC and information Piper Jaffray obtained from SNL Financial. The multiples and ratios for each of the selected companies were based on the most recent publicly available information.

With respect to NWIN Comparable Public Trading Group, the information Piper Jaffray presented included the following:

 

•

LTM Core ROAA;

 

•

LTM Core ROAE;

 

•

NIM;

 

•

Efficiency Ratio;

 

•

NPAs / Assets;

 

•

TCE / TA;

 

•

Price / Book;

 

•

Price / TBV;

 

•

Price / LTM EPS;

 

46

•

Price / Pre-Tax LTM EPS; and

 

•

Core Deposit Premium.

Results of Piper Jaffray’s analysis were presented for NWIN Comparable Public Trading Group, as shown in the following table, in which the $43.00 per share market valuation is used to calculate the implied NWIN multiples:

 

NWIN Comparable Public Trading Group
		NWIN 12/31/17				High				Median				Low
LTM Core ROAA			0.93	%			1.03	%			0.83	%			0.73	%
LTM Core ROAE			9.33	%			9.84	%			9.10	%			7.89	%
NIM			3.84	%			3.89	%			3.60	%			3.30	%
Efficiency Ratio			68	%			76	%			65	%			59	%
NPAs / Assets			1.03	%			1.07	%			0.78	%			0.39	%
TCE / TA			9.6	%			10.5	%			8.8	%			8.7	%
Price / Book			1.34	x			1.53	x			1.29	x			1.16	x
Price / TBV			1.39	x			1.54	x			1.36	x			1.26	x
Price / LTM EPS			13.7	x			16.3	x			14.7	x			12.6	x
Price / Per-Tax LTM EPS			10.4	x			11.5	x			9.6	x			8.9	x
Core Deposit Premium			4.5	%			6.3	%			4.1	%			2.8	%

Based on the analysis above, Piper Jaffray then applied the range of multiples to the applicable metrics of NWIN. The analysis indicated the following implied equity values per share of NWIN common stock:

 

NWIN Implied Per Share Price based on Comparable Public Trading Group Multiples
		Low – High
Price / Book		$37.41 – $49.31
Price / TBV		$38.97 – $47.84
Price / LTM EPS		$39.50 – $51.12
Price / Pre-Tax LTM EPS		$36.77 – $47.39
Core Deposit Premium		$38.45 – $47.86

NWIN Discounted Cash Flow Analysis. Piper Jaffray calculated a range of implied values for NWIN common stock by estimating the present value of cash flows NWIN could provide to common equity holders through 2022 and using the terminal multiples approach to determine a terminal value. The following assumptions were used:

 

•

financial forecasts from 2018 – 2022 per Piper Jaffray assumptions, reviewed with First Personal management;

 

•

2019 – 2022 earnings growth rate of 5.0%;

 

•

2018 – 2022 asset growth rate of 5.0%;

 

•

maintenance of a 9.00% tangible common equity-to-tangible asset ratio;

 

•

discount rates range from 13.50% to 15.50%; and

 

•

terminal multiple applied to final year earnings ranged from 13.5x to 15.5x.

 

47

The calculations resulted in a range of implied values of $39.45 to $47.30 per share, as compared to the $43.00 per share market valuation, based on February 16, 2018 closing prices.

 

Discount Rate		Terminal Multiple
		13.5x		14.5x		15.5x
13.50%		$42.54		$44.92		$47.30
14.50%		$40.96		$43.23		$45.51
15.50%		$39.45		$41.63		$43.81

The discounted cash flow analysis is a widely used valuation methodology that relies on numerous assumptions, including asset growth rates, earnings growth rates, discount rates, and terminal multiples, and the results of such methodology are highly dependent on these assumptions. These assumptions were determined by Piper Jaffray and reviewed with First Personal management, for purposes of its discounted cash flow analysis. The analysis does not purport to be indicative of the actual values or expected values of NWIN. In addition, the analysis relates only to the potential value achieved by NWIN as a stand-alone entity based on assumptions described herein. Therefore, the analysis is not intended to, and does not purport to, reflect values achieved on a post-merger basis.

The foregoing summary of certain material financial analyses does not purport to be a complete description of the analyses or data presented by Piper Jaffray. The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Piper Jaffray believes that the foregoing summary and its analyses must be considered as a whole and that selecting portions of the foregoing summary and these analyses, without considering all of its analyses as a whole, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the processes underlying the analyses and its opinion. In arriving at its opinion, Piper Jaffray did not attribute any particular weight to any analyses or factors considered by it and did not form an opinion as to whether any individual analysis or factor (positive or negative), considered in isolation, supported or failed to support its opinion. Rather, Piper Jaffray considered the totality of the factors and analyses performed in determining its opinion. In performing its analyses, Piper Jaffray made numerous assumptions with respect to industry performance, general business, economic, monetary, regulatory, market and other conditions and other matters, many of which are beyond First Personal’s, NWIN’s, or Piper Jaffray’s control. In addition, analyses based upon forecasts of future results are inherently uncertain, as they are subject to numerous factors or events beyond the control of the parties and their advisors. Accordingly, forecasts and the analyses used or performed by Piper Jaffray are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by those analyses. Moreover, Piper Jaffray’s analyses are not and do not purport to be appraisals or otherwise reflective of the prices at which businesses actually could be bought or sold, and the range of valuations resulting from any individual analysis described above should not be taken to be Piper Jaffray’s view of First Personal’s or NWIN’s actual value. None of the selected companies reviewed is identical to First Personal or NWIN. However, the companies selected were chosen because they are publicly traded companies with operations and businesses that Piper Jaffray considered to be similar to those of First Personal or NWIN, as applicable, for purposes of its analysis. The analyses necessarily involve complex considerations and judgments concerning differences in financial and operational characteristics of the companies involved and other factors that could affect the companies compared to First Personal or NWIN, as applicable. The analyses of Piper Jaffray and its opinion were among a number of factors taken into consideration by the board of directors of First Personal in making its determination to approve the merger agreement, and the analyses described above should not be viewed as determinative of the decision of the First Personal board of directors to approve the merger agreement.

Certain Financial Projections Provided by First Personal and NWIN

First Personal and NWIN do not, as a matter of course, publicly disclose forecasts or internal projections as to their future performance, earnings, or other results due to, among other reasons, the inherent uncertainty of the underlying assumptions and estimates. However, during January and February 2018 First Personal’s

 

48

management provided NWIN certain nonpublic unaudited prospective financial information regarding First Personal prepared by First Personal’s management. In addition, Piper Jaffray, in connection with the financial analyses performed in rendering its fairness opinion, used certain forecasts of cost savings expected by management of NWIN to result from the merger, which was provided by NWIN management. A summary of these projections is included in this proxy statement/prospectus because such initial forecasts and projected data were made available to NWIN and First Personal, as the case may be, as described in the preceding sentences. They were also provided to Piper Jaffray, who also received other prospective financial information that is described below.

This nonpublic unaudited prospective financial information was not prepared for the purposes of, or with a view toward, public disclosure or with a view toward complying with the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information, published guidelines of the SEC regarding forward-looking statements, or GAAP. The information included below does not comprise all of the prospective financial information provided by NWIN and First Personal to each other or to Piper Jaffray. However, a summary of the material elements of this information is set forth below.

Although presented with numerical specificity, the financial forecasts reflect numerous estimates and assumptions of First Personal’s and NWIN’s respective management made at the time they were prepared, and, in the case of First Personal, assume the execution of various strategic initiatives that First Personal is no longer pursuing in light of the merger. These and the other estimates and assumptions underlying the financial forecasts involve judgments with respect to, among other things, the future interest rate environment, the timing and level of loan originations, deposit generation, operating and other expenses, effective tax rates, and other economic, competitive, regulatory, and financial market conditions and future business decisions that may not be realized and that are inherently subject to significant uncertainties and contingencies. These uncertainties and contingencies include, among other things, the inherent uncertainty of the business and economic conditions affecting the industry in which First Personal and NWIN operate, and the risks and uncertainties described under “Risk Factors” beginning on page 14 and “Cautionary Note About Forward-Looking Statements” beginning on page 18, all of which are difficult to predict and many of which are outside the control of First Personal and NWIN and will be beyond the control of the combined company. There can be no assurance that the underlying assumptions would prove to be accurate or that the projected results would be realized. Actual results may differ materially from those reflected in the financial forecasts, whether or not the merger is completed. Further, these assumptions do not include all potential actions that the management of First Personal and NWIN could or might have taken during these time periods.

The inclusion in this proxy statement/prospectus of the nonpublic unaudited prospective financial information below should not be regarded as an indication that First Personal, NWIN, their respective boards of directors, or Piper Jaffray considered, or now consider, these projections and forecasts to be fact or necessarily predictive of actual future results, and they should not be relied upon as such. The unaudited prospective financial information does not give effect to the merger of First Personal and NWIN, including the impact of negotiating or executing the Merger Agreement, the expenses to be incurred in connection with consummating the merger, the potential synergies that may be achieved by the combined company as a result of the merger, the effect on either NWIN or First Personal, as applicable, of any business or strategic decision or action that has been or will be taken as a result of the Merger Agreement having been executed, or the effect of any business or strategic decisions or actions that would likely have been taken if the Merger Agreement had not been executed, but that were instead altered, accelerated, postponed, or not taken in anticipation of the merger.

No assurances can be given that, if these financial forecasts had been prepared as of the date of this proxy statement/prospectus, the same underlying assumptions would be used. In addition, the financial forecasts may not reflect the manner in which NWIN would operate the First Personal business after the merger. NWIN and First Personal do not intend to, and each disclaims any obligation to, make publicly available any update or other revision to this unaudited prospective financial information to reflect circumstances occurring

 

49

since its preparation or to reflect the occurrence of unanticipated events, even in the event that any or all of the underlying assumptions are shown to be in error, or to reflect changes in general economic or industry conditions.

The financial forecasts of First Personal summarized in this section were prepared by and are the responsibility of the management of First Personal. The financial forecasts of NWIN summarized in this section were prepared by and are the responsibility of the management of NWIN. No independent registered public accounting firm has examined, compiled, or otherwise performed any procedures with respect to the prospective financial information contained in these financial forecasts and, accordingly, no independent registered public accounting firm has expressed any opinion or given any other form of assurance with respect thereto and no independent registered public accounting firm assumes any responsibility for the prospective financial information.

Further, the unaudited prospective financial information does not take into account the effect on any of First Personal, FPB, NWIN, or Peoples Bank, as applicable, of any possible failure of the merger to occur. None of First Personal, FPB, NWIN, Peoples Bank, or Piper Jaffray, or their respective affiliates, officers, directors, advisors, or other representatives has made, makes, or is authorized in the future to make any representation to any stockholder of First Personal, shareholder of NWIN, or other person regarding First Personal’s or NWIN’s ultimate performance compared to the information contained in the unaudited prospective financial information or that the projected results will be achieved.

In light of the foregoing, and taking into account that the Special Meeting will be held several months after the unaudited prospective financial information was prepared, as well as the uncertainties inherent in any forecasted information, First Personal stockholders are cautioned not to place unwarranted reliance on such information, and First Personal urges its stockholders to review First Personal’s and NWIN’s most recent financial statements for a description of their respective historical financial results.

The following information was furnished by First Personal to Piper Jaffray, and was relied upon by Piper Jaffray for purposes of its opinion.

 

		2018E				2019E				2020E				2021E				2022E
Net income (in millions)		$	1.0			$	1.1			$	1.2			$	1.3			$	1.5

The following table presents pre-tax costs savings projections for NWIN for the periods presented, which were provided by NWIN’s management to Piper Jaffray for purposes of its opinion:

 

		2018E				2019E
Pre-tax cost savings (in millions)		$	0.77			$	2.15

 

50

THE MERGER AGREEMENT

The following is a summary of the material provisions of the Merger Agreement. This summary is qualified in its entirety by reference to the Merger Agreement, a copy of which is attached as Appendix A to this document and is incorporated into this document by reference. You should read the Merger Agreement in its entirety, as it is the legal document governing the merger.

Structure of the Merger

Subject to the terms and conditions of the Merger Agreement, at the completion of the merger, First Personal will merge with and into NWIN, with NWIN as the surviving corporation of such merger. The separate existence of First Personal will terminate. The shares of NWIN common stock will continue to be quoted on the OTC Pink Marketplace and OTC Bulletin Board under the symbol “NWIN.” Simultaneously with the merger, FPB will be merged with and into Peoples Bank, a wholly owned subsidiary of NWIN.

Under the Merger Agreement, the executive officers and directors of NWIN and Peoples Bank serving at the effective time of the merger will continue to serve as such after the merger is consummated.

Merger Consideration

If the merger is completed, each share of First Personal common stock issued and outstanding immediately prior to the effective time of the merger (other than dissenting shares, shares held as treasury stock of First Personal, and shares held by NWIN) will be converted into the right to receive both (i) 0.1246 shares of NWIN common stock (which we refer to as the “exchange ratio” or the “stock consideration”), and (ii) $6.67 in cash (which we refer to as the “cash consideration,” and together with the stock consideration, the “merger consideration”); provided, however, that First Personal stockholders owning of record and/or beneficially fewer than 100 shares of First Personal common stock as of the effective time will only be entitled to receive $12.12 per share in cash and will not be entitled to receive any NWIN common stock.

No fractional shares of NWIN common stock will be issued in the merger. Instead, NWIN will pay to each holder of First Personal common stock who otherwise would be entitled to a fractional share of NWIN common stock an amount in cash (without interest) determined by multiplying such fraction by the volume-weighted average per share closing price of a share of NWIN common stock as quoted on the OTC Pink Marketplace during the fifteen consecutive trading days immediately preceding the second business day prior to the closing of the merger.

The exchange ratio is subject to adjustment as follows:

 

•

Anti-Dilution Adjustments. If prior to the effective time of the merger, NWIN changes the number of shares of NWIN common stock outstanding by way of a stock split, stock dividend, or similar transaction, or if NWIN establishes a record date for such a change, the exchange ratio will be adjusted accordingly so that each stockholder of First Personal at the effective time will receive, in the aggregate, the number of shares of NWIN common stock representing the same percentage of the outstanding shares of NWIN common stock that such stockholder would have received if such change had not occurred.

 

•

Decrease in Market Price of NWIN Common Stock. First Personal may terminate the Merger Agreement if, at any time during the five-business day period commencing on the date that is the 15th business day prior to the scheduled closing date of the merger (the “determination date”), only if both of the following conditions are satisfied:

 

•

the volume-weighted average of the daily closing price of NWIN common stock as reported on the OTC Pink Marketplace for the fifteen consecutive trading days immediately preceding the determination date (the “NWIN Market Value”) is less than $35.00; and

 

51

•

the percentage decrease in the stock price of NWIN from the NWIN stock price used to determine the value of the merger consideration (which was $43.75 per share) is more than 20% greater than the percentage decrease in the SNL Small Cap U.S. Bank and Thrift Index during the same period.

If First Personal elects to exercise its termination right as described above, NWIN may elect to avoid termination of the Merger Agreement by increasing the stock consideration by one of two amounts determined pursuant to the following formula: (i) the product obtained by multiplying the exchange ratio by the difference between (A) $35.00, and (B) the NWIN Market Value; or (ii) the product obtained by multiplying the exchange ratio by the difference between (A) the Second Trigger Price (defined below), and (B) the NWIN Market Value. For these purposes, the “Second Trigger Price” means $35.00 multiplied by the number obtained by subtracting 0.1999 from the number obtained by dividing (A) the sum of the final stock prices of each company comprising the SNL Small Cap U.S. Bank and Thrift Index (or such substitute index as determined pursuant to the Merger Agreement), by (B) the sum of the initial stock prices of each such company comprising such index. Since the formula is dependent on the future price of NWIN’s common stock and that of the SNL Small Cap U.S. Bank and Thrift Index, it is not possible to determine at this time if the merger consideration will be adjusted pursuant to the foregoing provisions or what any such adjusted merger consideration would be. However, in general, more shares of NWIN common stock would be issued, to take into account the extent by which the average price of NWIN’s common stock exceeded the decline in the average price of the common stock of the index group.

Exchange Agent

NWIN will appoint, in its discretion, a bank, trust company, or transfer agent to act as the exchange agent in connection with the merger.

Voting Agreements

As of the record date of the First Personal Special Meeting, the executive officers and directors of First Personal owned and had the power to vote 394,634 shares of First Personal common stock and 138,288 shares represented by shares of Convertible Preferred Stock, which in the aggregate represents approximately 40.8% of the voting power represented by the outstanding shares of First Personal common stock and Convertible Preferred Stock. In connection with the execution of the Merger Agreement, all of the directors of First Personal and FPB executed a voting agreement pursuant to which they agreed to vote all their First Personal shares in favor of the merger. A copy of that voting agreement is attached as Appendix C to this proxy statement/prospectus.

Treatment of First Personal’s 401(k) Plan

The First Personal Bank 401(k) Plan (referred to as the “FPB 401(k) Plan”) will be terminated prior to the effective time of the merger. First Personal will continue to make contributions to the FPB 401(k) Plan until the effective time of the merger consistent with the terms of the FPB 401(k) Plan and past practices, including without limitation elective deferral contributions of participants who are employed by First Personal and FPB. Any contributions due to the FPB 401(k) Plan for the period prior to the termination date of the plan, and not yet paid by that date, will be contributed by First Personal as soon as administratively feasible following the plan termination date.

Exchange and Payment Procedures

At and after the effective time of the merger, each certificate representing shares of First Personal common stock (other than dissenting shares, shares held as treasury stock of First Personal, and shares held by NWIN) will represent only the right to receive the merger consideration in accordance with the terms of the Merger

 

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Agreement. No later than one business day prior to the closing date of the merger, NWIN will provide the exchange agent with the authorization to issue a sufficient number of shares of NWIN common stock to be used to issue the aggregate stock consideration to the First Personal stockholders, and NWIN will deposit, or cause to be deposited, with the exchange agent cash sufficient to pay the aggregate cash consideration to the First Personal stockholders (together with cash payable with respect to any fractional shares). Within five business days after the effective time of the merger, the exchange agent will mail a letter of transmittal to each holder of First Personal common stock, which will include detailed instructions on how such holder may exchange such holder’s First Personal’s stock certificates for the merger consideration.

NWIN will cause a certificate representing the number of whole shares of NWIN common stock that each holder of First Personal common stock owning 100 or more shares of First Personal common stock has the right to receive and a check in the aggregate amount of such stockholder’s cash consideration, plus any cash that such holder has the right to receive in lieu of a fractional share of NWIN common stock, to be delivered to such stockholder as soon as reasonably practicable after the stockholder delivers to the exchange agent (or NWIN, as the case may be) the old certificates representing such shares of First Personal common stock and a properly completed letter of transmittal, and any other documents required by the Merger Agreement or reasonably requested by NWIN or the exchange agent. Beneficial owners and/or holders of record of fewer than 100 shares will receive cash equal to $12.12 per share upon delivery to NWIN of certificates representing such shares and a properly completed letter of transmittal. No interest will be paid on any merger consideration that any such holder shall be entitled to receive.

No dividends or other distributions on NWIN common stock with a record date occurring after the effective time of the merger will be paid to the holder of any unsurrendered old certificate representing shares of First Personal common stock until the holder surrenders such old certificate in accordance with the Merger Agreement.

The stock transfer books of First Personal will be closed immediately at the effective time of the merger, and after the effective time, there will be no transfers on the stock transfer records of First Personal of any shares of First Personal common stock. NWIN will be entitled to rely on First Personal’s stock transfer books to establish the identity of those persons entitled to receive merger consideration. In the event of a dispute with respect to ownership of stock represented by any old certificate of First Personal common stock, then NWIN will be entitled to deposit any merger consideration represented by the old certificate in escrow with an independent third party selected by NWIN. If any old certificate is lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming such old certificate to be lost, stolen, or destroyed and, if required by NWIN, the posting by such person of a bond or other indemnity as NWIN may reasonably direct as indemnity against any claim that may be made with respect to the old certificate, NWIN will issue the merger consideration in exchange for such lost, stolen, or destroyed certificate. All shares of First Personal common stock held as treasury stock or owned by NWIN will be cancelled and will cease to exist, and no stock of NWIN or other consideration will be exchanged for such stock.

If outstanding old certificates for First Personal shares are not surrendered or the payment for the certificates is not claimed prior to the date the merger consideration would otherwise escheat to the appropriate governmental entity, the unclaimed merger consideration will, to the extent permitted by law, become the property of NWIN free and clear of all claims of any person who may previously have been entitled to such consideration. Neither the exchange agent, NWIN, nor First Personal will have any liability to a First Personal stockholder for any escheat of the merger consideration under applicable law.

Dividends and Distributions

Until First Personal common stock certificates are surrendered for exchange, any dividends or other distributions declared after the effective time of the merger with respect to NWIN common shares into which shares of First Personal common stock may have been converted will accrue but will not be paid. When such

 

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certificates have been duly surrendered, NWIN will pay any unpaid dividends or other distributions, without interest. After the effective time of the merger, there will be no transfers on the stock transfer books of First Personal of any shares of First Personal common stock. When certificates representing shares of First Personal common stock are presented for transfer after the completion of the merger, they will be cancelled and exchanged for the merger consideration.

Representations and Warranties

The Merger Agreement contains representations and warranties of First Personal, on the one hand, and NWIN, on the other hand, to each other, as to, among other things, the following:

 

•

the corporate organization and existence of each party;

 

•

the authority of each party to enter into the Merger Agreement, perform its obligations under the Merger Agreement, and make it valid and binding;

 

•

the fact that the Merger Agreement does not conflict with or violate:

 

•

the articles or certificate of incorporation and bylaws of each party;

 

•

applicable law; and

 

•

agreements, instruments or obligations of each party;

 

•

the capitalization of First Personal and NWIN;

 

•

each party’s compliance with applicable law;

 

•

the accuracy of statements made and materials provided by each party;

 

•

the absence of undisclosed obligations or liabilities;

 

•

financial statements and reports;

 

•

the adequacy of its loan loss reserves;

 

•

the filing and accuracy of tax returns;

 

•

litigation and pending proceedings;

 

•

each party’s deposit insurance;

 

•

Community Reinvestment Act;

 

•

no reason for any denials or delays in regulatory approvals;

 

•

compliance with bank secrecy and anti-money laundering laws and regulations;

 

•

internal controls; and

 

•

absence of certain events occurring since September 30, 2017.

In addition, the Merger Agreement contains representations and warranties of First Personal to NWIN as to:

 

•

material contracts;

 

•

the status of its loans and investments and the provisions for loan losses;

 

•

indebtedness;

 

•

employee benefit plans;

 

•

labor and employment matters including compliance with applicable labor and employment laws;

 

•

obligations to employees;

 

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•

insider transactions;

 

•

indemnification agreements;

 

•

stockholder approval;

 

•

books and records;

 

•

title to its assets;

 

•

intellectual property;

 

•

information technology, including compliance with data protection and privacy laws and regulations;

 

•

agreements with regulatory agencies;

 

•

no shareholder rights plan;

 

•

insurance;

 

•

broker’s, finder’s, and other fees;

 

•

fiduciary accounts;

 

•

receipt of a fairness opinion from First Personal’s financial advisor;

 

•

the inapplicability of antitakeover provisions under applicable law; and

 

•

the conversion of all outstanding principal and accrued interest under the Loan Agreement dated June 23, 2014 between First Personal and FPB Note Holding Company, LLC into 158,705 shares of First Personal common stock.

Finally, the Merger Agreement contains representations and warranties of NWIN to First Personal as to:

 

•

Securities and Exchange Commission filings;

 

•

no approval of NWIN’s shareholders is required in connection with the merger; and

 

•

NWIN’s financial capability to pay the aggregate cash consideration under the Merger Agreement.

No representations and warranties of the parties will survive the consummation of the merger. Additionally, the parties qualified many of the representations and warranties contained in the Merger Agreement with exceptions set forth in disclosure schedules that were separately delivered by each party to the other party to the Merger Agreement.

Conduct of Business Prior to Completion of the Merger

Under the Merger Agreement, First Personal has agreed to certain restrictions on its activities until the merger is completed or terminated. In general, First Personal and FPB are required until the effective time of the merger to:

 

•

conduct its business diligently, substantially in the manner as it is presently being conducted, and in the ordinary course of business;

 

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use commercially reasonable efforts to preserve its business organization intact in all material respects, keep available the services of the present officers and employees and preserve its present relationships with customers and persons with whom it has business dealings;

 

•

use commercially reasonable efforts to maintain all of the properties and assets that it owns or utilizes in the operation of its business as currently conducted in good operating condition and repair, reasonable wear and tear excepted;

 

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•

maintain its books, records, and accounts in the usual, regular, and ordinary manner, on a basis consistent with prior years and in compliance in all material respects with all statutes, laws, rules, and regulations applicable to them and to the conduct of its business; and

 

•

not knowingly do or fail to do anything that will cause a breach of, or default in, any material contract, agreement, commitment, obligation, understanding, arrangement, lease, or license to which it is a party or by which it is or may be subject or bound.

The following is a summary of the more significant restrictions imposed upon First Personal, subject to the exceptions set forth in the Merger Agreement. Specifically, without the prior consent of NWIN, which shall not be unreasonably withheld, First Personal and FPB may not:

 

•

make any change in the capitalization or the number of issued and outstanding shares of First Personal or FPB (other than in connection with the conversion of the 2025 Debentures and Convertible Preferred Stock), or redeem any of its outstanding shares of common stock (other than in connection with any redemption of the 2025 Debentures);

 

•

authorize a class of stock or issue or grant any warrant, option, right, or other agreement relating to its stock or any convertible securities, or authorize the issuance of securities other than or in addition to its issued and outstanding common stock as of the date of the Merger Agreement;

 

•

distribute or pay any dividends on its shares of common stock or preferred stock (other than accrued and unpaid dividends on the Convertible Preferred Stock in connection with its conversion), or authorize a stock split, or make any other distribution to its stockholders, provided that First Personal’s subsidiaries may pay cash dividends to First Personal or FPB (i) to fund First Personal’s payment of unpaid or past due dividends on the Convertible Preferred Stock and unpaid or past due interest on the 2025 Debentures, and (ii) in the ordinary course of business for payment of First Personal’s reasonable and necessary business and operating expenses and expenses of the merger; and provided that, at NWIN’s request and except as prohibited by law or by any bank regulatory agency, FPB may pay dividends to First Personal; and provided further that, no dividend may be paid for the quarter in which the merger is scheduled to be consummated or actually consummated if during such period First Personal’s stockholders will become entitled to receive dividends on their shares of NWIN common stock received in the merger;

 

•

purchase or otherwise acquire any investment security for their own account that exceeds $500,000 individually;

 

•

except as already committed in writing, cancel, release, or compromise any indebtedness in excess of $50,000 owing;

 

•

amend the certificate of incorporation and bylaws of First Personal or the similar organizational documents of any of its subsidiaries;

 

•

make, renew, or otherwise modify any loan or commitment to lend money, or issue any letter of credit to any person if the loan is an existing credit on the books of First Personal or FPB and classified as “Other Loans Especially Mentioned,” “Substandard,” “Doubtful,” or “Loss” in an amount in excess of $100,000; or make, purchase, renew, modify, or amend or extend the maturity of any commercial loan in excess of $1,000,000 (provided FPB may renew, modify, amend, or extend the maturity of existing performing commercial loans (which are not classified or non-accrual) with existing principal balances of $1,000,000 or less), any 1-to-4 family residential mortgage loan with a loan to value in excess of 80% (unless private mortgage insurance is obtained) or any 1- to-4 family residential mortgage loan in excess of $424,000, any consumer loan in excess of $100,000, any home equity loan or line of credit in excess of $250,000, any loan participation, or any agreement to purchase mortgage loans from any third party originator, except as permitted by the Merger Agreement;

 

•

except as contemplated by the Merger Agreement, waive, release, grant, or transfer any material rights of value, or enter into, amend, or terminate any contract, agreement, lease, commitment, understanding,

 

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arrangement, or transaction, or incur any liability or obligation requiring payments by First Personal or any of its subsidiaries that exceed $25,000, whether individually or in the aggregate or that contain any financial commitment extending after February 20, 2019;

 

•

open or close any branch or ATM, or make an application for the foregoing, except as may be contemplated by any application filed with any bank regulatory authority in connection with the merger;

 

•

except as already committed in writing as of the date of the Merger Agreement, make any capital expenditures in excess of $25,000 individually or $150,000 in the aggregate; or

 

•

take or fail to take any action that would or would be likely to prevent, impede, or delay the merger from qualifying as a tax-free reorganization under the Code.

Covenants

In addition to the restrictions noted above, First Personal and NWIN have agreed to take other actions, such as:

 

•

in the case of First Personal, to submit the Merger Agreement to its stockholders at a meeting to be called and held as soon as reasonably practicable;

 

•

in the case of First Personal, to proceed expeditiously, cooperate fully and use commercially reasonable efforts to assist NWIN in procuring all consents, authorizations, approvals, registrations and certificates, in completing all filings and applications and in satisfying all other requirements prescribed by law that are necessary for consummation of the merger, and to ensure that any materials or information provided by First Personal to NWIN for use by NWIN in any filing with any state or federal regulatory agency or authority shall not contain any untrue or misleading statement of material fact or shall omit to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not false or misleading;

 

•

in the case of First Personal, to use commercially reasonable efforts to obtain any required third party consents to agreements, contracts, commitments, leases, instruments and documents;

 

•

in the case of First Personal, to maintain insurance on its assets, properties, and operations, fidelity coverage and directors’ and officers’ liability insurance in such amounts and with regard to such liabilities and hazards as were insured by First Personal as of the date of the Merger Agreement;

 

•

in the case of First Personal, to continue to accrue reserves for employee benefits and merger related expenses, and to consult and cooperate in good faith with NWIN on (i) conforming the loan and accounting policies and practices of First Personal to those policies and practices of NWIN for financial accounting and/or income tax reporting purposes; and (ii) determining the amount and timing for recognizing First Personal’s expenses of the merger;

 

•

in the case of First Personal, to cease and cause to be terminated any existing solicitations, discussions, or negotiations with other parties that have made or intend to make an acquisition proposal, except as permitted by the Merger Agreement;

 

•

in the case of First Personal and NWIN, to coordinate with each other prior to issuing any press releases;

 

•

in the case of First Personal and NWIN, to supplement, amend, and update the disclosure schedules to the Merger Agreement as necessary;

 

•

in the case of First Personal and NWIN, to give the other party’s representatives and agents, including investment bankers, attorneys, or accountants, upon reasonable notice, reasonable access during normal business hours throughout the period prior to the effective time of the merger to the other party’s properties, facilities, operations, books, and records (with exceptions for minutes which would result in a waiver of the attorney-client privilege);

 

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•

in the case of First Personal, to deliver updated financial statements;

 

•

in the case of First Personal, to cooperate with an environmental consulting firm designated by NWIN in the conduct by such firm of a phase I environmental investigation on all real property owned or leased by First Personal or FPB as of the date of the Merger Agreement, and any real property acquired or leased by First Personal or FPB after the date of the Merger Agreement, to the extent not prohibited by any lease governing First Personal’s lease of any property;

 

•

in the case of First Personal, to deliver any reports, notices or proxy statements sent to any governmental authority, and any orders issued by any governmental authority, to the other party when available;

 

•

in the case of First Personal, to not knowingly take any action that is intended or is reasonably likely to result in (i) any of its representations and warranties set forth in the Merger Agreement being or becoming untrue in any material respect, (ii) any of the conditions to the merger not being satisfied in any material respect, (iii) a material violation of any provision of the Merger Agreement, or (iv) a material delay in the consummation of the merger;

 

•

in the case of First Personal, not to create any employment contract, agreement, or understanding with or employment rights for any of the officers or employees of First Personal or FPB, or prohibit or restrict NWIN from changing, amending, or terminating any employee benefits provided to its employees from time to time;

 

•

in the case of First Personal, to take such actions as necessary to terminate the FPB 401(k) Plan as soon as practicable following the execution of the Merger Agreement;

 

•

in the case of First Personal, to take all actions necessary to terminate, as of the effective time of the merger, all of First Personal’s and its subsidiaries’ fully insured welfare benefit and Code Section 125 “cafeteria plans” and group insurance policies, unless otherwise instructed by NWIN;

 

•

in the case of First Personal and FPB, to cooperate with NWIN to prepare to effectuate the merger of FPB with and into Peoples Bank, and to reconstitute the directors and officers of FPB or any other subsidiary of First Personal and, if requested by NWIN, to amend the articles of incorporation and bylaws of FPB or any other subsidiary of First Personal;

 

•

in the case of First Personal, to commence immediately after the date of the Merger Agreement with transfers of information, processes, systems, and data to NWIN, and prior to the closing and after the receipt of the bank regulatory approvals to cooperate with the installation and conversion of equipment;

 

•

in the case of First Personal, to pay out all amounts payable pursuant to the employment agreement between First Personal and Randall R. Schwartz dated March 20, 2007, provided that this agreement will be amended with the written consent of Mr. Schwartz prior to the effective time of the merger to provide that no payment will be made under this agreement or under any other arrangement that would constitute an “excess parachute payment” under Section 280G of the Code, and to the extent any payment would constitute an “excess parachute payment” a reduction of the payment so that the payment would no longer be considered an “excess parachute payment,” and Mr. Schwartz enters into a mutual termination of employment agreement;

 

•

in the case of First Personal, on or before the effective time of the merger, use reasonable efforts to deliver to NWIN a non-solicitation and non-disclosure agreement executed by George Cvack, the Senior Vice President of FPB;

 

•

in the case of First Personal, prior to closing, First Personal and FPB are to use their reasonable best efforts, with the reasonable cooperation of NWIN as may be requested by First Personal, to cause FPB to execute an amendment to the Building Lease date August 1, 2016 between FPB and Professional Therapeutics, Ltd. with respect to the property located at 14711 Ravinia Avenue, Orland Park, Illinois, in a form satisfactory to NWIN, pursuant to which, among other things, the term of the lease will be extended to a date no earlier than July 31, 2021;

 

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•

in the case of NWIN, to file all applications and notices to obtain the necessary regulatory approvals for the transactions contemplated by the Merger Agreement;

 

•

in the case of First Personal and NWIN, to prepare this proxy statement/prospectus and, in the case of NWIN, file a registration statement with the SEC covering the shares of NWIN common stock to be issued to First Personal stockholders pursuant to the Merger Agreement;

 

•

in the case of NWIN, to make available to the officers and employees of First Personal who continue as employees after the effective time, substantially the same employee benefits as are generally available to NWIN employees, and to provide credit for prior service with First Personal and FPB for purposes of eligibility and vesting under NWIN’s employee benefit plans;

 

•

in the case of NWIN, to provide severance benefits to certain employees of FPB as of the effective time of the merger;

 

•

in the case of NWIN, maintain a directors’ and officers’ liability insurance policy for six years after the effective time of the merger to cover the present officers and directors of First Personal and FPB with respect to claims against such directors and officers arising from facts or events that occurred before the effective time, and continue for six years after the effective time the indemnification and exculpation rights of the present and former officers and directors of First Personal and FPB against all losses, expenses, claims, damages, or liabilities arising out of or pertaining to matters existing or occurring on or prior to the effective time to the same extent then permitted under Delaware law or the certificate or articles of incorporation or bylaws of First Personal or FPB;

 

•

in the case of NWIN, upon the effective time of the merger, to assume the due and punctual performance and observance of the covenants and conditions to be performed by First Personal under the Indenture dated May 27, 2004 between First Personal and Wilmington Trust Company, as Trustee, relating to certain Floating Rate Junior Subordinated Deferrable Interest Debentures due 2034, and the due and punctual payments of the principal of and premium, if any, and interest on such debentures; and

 

•

in the case of NWIN, to form, as soon as reasonably practicable after the closing date, a Peoples Bank Advisory Board comprised of three to five members in order to advise Peoples Bank on various matters in FPB’s existing market area, with the members of the advisory board to be determined in the discretion of NWIN after reasonable consultation with First Personal.

The Merger Agreement also contains certain additional covenants relating to employee benefits and other matters pertaining to officers and directors. See “The Merger Agreement – Employee Benefits and Payments” beginning on page 63 and “Interests of Certain Directors and Officers of First Personal in the Merger” beginning on page 73.

Acquisition Proposals by Third Parties

In the Merger Agreement, First Personal agreed to immediately cease and cause to be terminated any existing solicitations, discussions, or negotiations with other persons or entities that had made, or indicated an intention to make, a proposal to acquire First Personal. In addition, until the merger is completed or the Merger Agreement is terminated, First Personal has agreed that it, and its officers, directors, and representatives, and those of FPB, will not:

 

•

solicit, initiate, or knowingly encourage or facilitate, any inquiries, offers or proposals to acquire First Personal; or

 

•

initiate, participate in or knowingly encourage any discussions or negotiations or otherwise knowingly cooperate regarding an offer or proposal to acquire First Personal.

First Personal may furnish, however, information regarding First Personal to, or enter into and engage in discussions with, any person or entity in response to a bona fide unsolicited written proposal from a third party

 

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that was received after the date of the Merger Agreement (and not withdrawn) relating to an acquisition proposal, or change or withhold its recommendation to First Personal’s stockholders prior to obtaining stockholder approval regarding the merger, if:

 

•

First Personal’s board of directors (after consultation with its financial advisor and outside legal counsel) determines in good faith that such proposal constitutes or is reasonably likely to lead to a proposal that is superior to First Personal’s stockholders from a financial point of view than the merger, and the failure to consider such proposal would reasonably likely result in a breach of the fiduciary duties of First Personal’s board of directors;

 

•

First Personal provides any information to NWIN that it intends to provide to such third party, and only after having entered into a confidentiality agreement with such third party that contains provisions at least as restrictive to such third party as the provisions are to NWIN in the confidentiality agreement between First Personal and NWIN that has been executed in connection with the merger; and

 

•

First Personal notifies NWIN that it is prepared to change or withhold its recommendation to First Personal’s stockholders in response to a superior proposal, and provides NWIN with the most current version of any proposed written agreement or letter of intent relating to the superior proposal, and NWIN fails, within seven business days of such notice, to make a proposal that would, in the reasonable good faith judgment of the First Personal board of directors (after consultation with its financial advisor and outside legal counsel) cause the offer that previously constituted a superior proposal to no longer constitute a superior proposal.

For purposes of the Merger Agreement, the term “superior proposal” means any acquisition proposal relating to First Personal or FPB, or to which First Personal or FPB may become a party, that the First Personal board of directors determines in good faith (after having received the advice of its financial advisors) to be (i) more favorable to, and in the best interests of, the stockholders of First Personal from a financial point of view and its other constituencies than the merger (taking into account all the terms and conditions of the proposal and the Merger Agreement, including the $630,000 termination fee) and (ii) reasonably capable of being completed without undue delay.

Conditions to the Merger

The obligation of NWIN and First Personal to consummate the merger is subject to the satisfaction or waiver, on or before the completion of the merger, of a number of conditions, including:

 

•

The Merger Agreement must receive the requisite approval of First Personal’s stockholders.

 

•

Each of (i) the representations and warranties of First Personal regarding its organization and authority, corporate power and authority, conflicts with its organizational documents, capitalization, financial statements and reports, events, changes, or developments that have had or are reasonably likely to have a material adverse effect (as defined in the Merger Agreement) on First Personal, and certain amendments to First Personal’s or its subsidiaries’ organizational documents (in each case, as qualified by the matters disclosed in First Personal’s disclosure schedules) shall be true, accurate, and correct (other than de minimis inaccuracies) at the effective time of the merger; (ii) the representations and warranties of First Personal regarding conflicts with applicable law and the inapplicability of antitakeover provisions (in each case, as qualified by the matters disclosed in First Personal’s disclosure schedules) shall be true, accurate, and correct in all material respects as of immediately prior to the effective date of the merger; and (iii) the other representations and warranties of First Personal (without giving effect to any materiality or material adverse effect qualifications, but in each case, as qualified by the matters disclosed in First Personal’s disclosure schedules) shall be true, accurate, and correct in all respects as of the date of the Merger Agreement and as of immediately prior to the effective time of the merger, provided that, for the purposes of this clause (iii), such representations and warranties will be deemed true and correct unless the failures of such representations and

 

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warranties to be true and correct, either individually or in the aggregate, without giving effect to any materiality or material adverse effect qualifications set forth in such representation or warranty, has had or would reasonably be expected to have a material adverse effect on First Personal.

 

•

Each of (i) the representations and warranties of NWIN regarding its capitalization and interim events, changes, or developments that have had or are reasonably likely to have a material adverse effect (as defined in the Merger Agreement) on NWIN (in each case, as qualified by the matters disclosed in NWIN’s disclosure schedules) shall be true, accurate, and correct (other than de minimis inaccuracies) as of immediately prior to the effective time of the merger; (ii) the representations and warranties of NWIN regarding organization and authority, corporate power and authority, conflicts with its organizational documents, conflicts with applicable law, and financial statements and reports (in each case, as qualified by the matters disclosed in NWIN’s disclosure schedules) shall be true, accurate, and correct in all material respects at and as of immediately prior to the effective date of the merger; and (iii) the other representations and warranties of NWIN (without giving effect to any materiality or material adverse effect qualifications, but in each case, as qualified by the matters disclosed in NWIN’s disclosure schedules) shall be true, accurate, and correct in all respects as of the date of the Merger Agreement and as of immediately prior to the effective time of the merger, provided that, for the purposes of this clause (iii), such representations and warranties will be deemed true and correct unless the failures of such representations and warranties to be true and correct, either individually or in the aggregate, without giving effect to any materiality or material adverse effect qualifications set forth in such representation or warranty, has had or would reasonably be expected to have a material adverse effect on NWIN.

 

•

First Personal and NWIN must have performed, in all material respects, all of their covenants and agreements as required by the Merger Agreement at or prior to the effective time of the merger.

 

•

NWIN must have registered with the SEC the shares of NWIN common stock to be issued to First Personal’s stockholders in the merger, and all state securities and blue sky approvals, authorizations, and exemptions required to offer and sell such shares must have been received, the registration statement of which this proxy statement/prospectus is a part, must have been declared effective by the SEC, and no stop order suspending the effectiveness of the registration statement can have been issued or threatened.

 

•

All regulatory approvals required to consummate the transactions contemplated by the Merger Agreement must have been obtained and remain in full force and effect, all statutory waiting periods applicable to those approvals must have expired, and none of those approvals must contain any conditions, restrictions, or requirements that NWIN’s board of directors reasonably determines in good faith would either (i) have a material adverse effect on First Personal, or (ii) reduce the benefits of the merger to such a degree that NWIN would not have entered into the Merger Agreement had such conditions, restrictions, or requirements been known.

 

•

For purposes of the Merger Agreement, the term “material adverse effect,” as applied to each of First Personal and NWIN and their respective subsidiaries, means any effect that (i) is material and adverse to the results of operations, properties, assets, liabilities, conditions (financial or otherwise), value, prospects, or business of First Personal and its subsidiaries, on a consolidated basis, or NWIN and its subsidiaries, on a consolidated basis, or (ii) would materially impair the ability of First Personal or NWIN to perform its obligations under the Merger Agreement or otherwise materially threaten or materially impede the consummation of the merger and the other transactions contemplated by the Merger Agreement. However, a “material adverse effect” does not include the impact of:

 

•

changes in applicable local, state, federal, or foreign law, statute, regulation, rule, ordinance, order, restriction, or requirement, or any order, injunction, writ, or decree of any court or government agency or body;

 

•

changes in generally accepted accounting principles or regulatory accounting requirements;

 

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•

changes or events generally affecting banks, bank holding companies, or financial holding companies, or the economy or the financial, securities, or credit markets, including changes in prevailing interest rates, liquidity and quality, currency exchange rates, price levels or trading volumes in the United States or foreign securities markets;

 

•

changes in national or international political or social conditions including the engagement by the United States in hostilities;

 

•

effects of any action or omission taken by First Personal or NWIN, as applicable, with the prior written consent of the other party or at the direction of the other party, as the case may be;

 

•

changes resulting from professional expenses (such as legal, accounting, consulting, and investment bankers’ fees) incurred in connection with the Merger Agreement or the transactions contemplated by the Merger Agreement; and

 

•

the impact of the announcement of the Merger Agreement and the transactions contemplated by the Merger Agreement, and compliance with the Merger Agreement on the business, financial condition, or results of operations of First Personal and its subsidiaries or NWIN and its subsidiaries.

 

•

The boards of directors of NWIN and First Personal must have received an opinion from their respective legal counsel, dated as of the closing date of the merger, that the merger will qualify as a tax free “reorganization” within the meaning of Section 368(a) and related sections of the Code.

 

•

None of NWIN, First Personal, or FPB, or any of NWIN’s subsidiaries must be subject to any statute, rule, regulation, injunction, order, or decree which prohibits, prevents, or makes illegal the completion of the merger, and no material claim, litigation, or proceeding shall have been initiated or threatened relating to the Merger Agreement or the merger.

 

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Each of NWIN and First Personal must have received from the other at the closing of the merger all the items, documents, consents, and other closing deliveries, in form and content reasonably satisfactory to the recipient, required by the Merger Agreement.

The obligation of NWIN to consummate the merger also is subject to the fulfillment of other conditions, including:

 

•

The total number of First Personal’s dissenting shares shall be no greater than 5% of the number of shares of First Personal common stock outstanding as of the date of the Merger Agreement;

 

•

As of the end of the month prior to the effective time of the merger, First Personal’s adjusted consolidated stockholders’ equity, as defined in the Merger Agreement, shall not be less than $11,250,000;

 

•

FPB shall have provided notice of termination to FiServ with respect to that certain Master Agreement, dated June 25, 2010, as amended, between FPB and FiServ;

 

•

Randall R. Schwartz, First Personal’s President and Chief Executive Officer, shall have executed and delivered to NWIN a mutual termination of employment agreement and shall have entered into a new employment agreement with Peoples Bank;

 

•

First Personal shall have obtained all required third party consents under material contracts or agreements;

 

•

NWIN must have received a letter of tax advice, in a form satisfactory to NWIN, from First Personal’s outside, independent certified public accountants to the effect that any amounts that are paid by First Personal or FPB before the effective time of the merger, or required under First Personal’s employee benefit plans or employment agreements, or under the Merger Agreement, to be paid at or after the effective time, to persons who are “disqualified individuals” under Section 280G of the Code with

 

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