Exhibit 99.1

 

FOR IMMEDIATE RELEASE	FOR FURTHER INFORMATION
October 27, 2015	CONTACT BEN BOCHNOWSKI
	(219) 853-7575

 

 

NORTHWEST INDIANA BANCORP

 

ANNOUNCES INCREASED EARNINGS FOR NINE AND THREE MONTHS

ENDED SEPTEMBER 30, 2015

 

Munster, Indiana - NorthWest Indiana Bancorp (the “Bancorp”), the holding company for Peoples Bank (the “Bank”), reported earnings of $5.8 million for the nine months ended September 30, 2015, and earnings of $1.9 million for the three months ended September 30, 2015. At September 30, 2015, the Bancorp’s assets totaled $842.2 million compared to $775.0 million at December 31, 2014, an increase of $67.1 million or 8.7%.

 

The earnings of $5.8 million for the nine months ended September 30, 2015, represent $2.04 earnings per basic and diluted share. For the nine months ended September 30, 2015, the return on average assets (ROA) was 0.96% and the return on average equity (ROE) was 9.88%.

 

The earnings of $1.9 million for the three months ended September 30, 2015, represent $0.67 earnings per basic and diluted share. For the three months ended September 30, 2015, the ROA was 0.91% and the ROE was 9.73%.

 

Comparing 2015 to 2014 results, the Bancorp’s earnings reported as of September 30, 2015, increased by 2.8% for the nine-month period and 0.4% for the three-month period. On July 1, 2015, the Bancorp completed its acquisition of Liberty Savings Bank. One-time acquisition costs recorded by the Bancorp during 2015 totaled $368 thousand.

 

Excluding the one-time acquisition costs, the Bancorp’s 2015 earnings increased by 8.0% for the nine months ended September 30, 2015 and 13.1% for three months ended September 30, 2015. See Table 1 below for a reconciliation of these non-GAAP figures to the Bancorp’s GAAP net income.

 

"Over the last two years, Peoples Bank integrated two financial institutions into our operations, and we are pleased to report continued strong earnings.  Our capital management has enabled the expansion of our footprint in Lake and Porter counties through mergers and internal growth.  Our strategic focus remains on the fundamentals of community banking as we serve our consumer and small business customers through traditional and up to date electronic banking products and services," said David Bochnowski, chairman and chief executive officer.

      Bochnowski noted that results for the period had been driven by core earnings, loan growth, asset quality, and income derived from banking operations including the sale of mortgage loans and wealth management activities.  

 

 

 

“Not only did we close the Liberty acquisition in Q3, we also completed integration. This speaks volumes about the ability of the Bank’s team to execute its strategic plans and further expand the partnerships we have created in the community,” said Ben Bochnowski, president and chief operating officer. “Peoples Bank now has 16 full-service locations throughout Northwest Indiana, with an additional three free-standing ATMs. This growth has come as we continue to deliver excellent earnings. We look forward to the fourth quarter when we will have the additional earnings from the acquisition without the additional expense.”

 

Net Interest Income

Net interest income, the difference between interest income from loans and investments and interest expense paid to funds providers, totaled $21.6 million for the nine months ended September 30, 2015, compared to $20.2 million for the nine months ended September 30, 2014, an increase of $1.3 million or 6.5%. The Bancorp’s net interest margin on a tax adjusted basis was 3.80% for the nine months ended September 30, 2015, compared to 3.85% for the nine months ended September 30, 2014. For the three months ended September 30, 2015, net interest income totaled $7.6 million, compared to $7.0 million for the three months ended September 30, 2014 for an increase of $583 thousand or 8.3%. The Bancorp’s net interest margin on a tax adjusted basis was 3.87% for the three months ended September 30, 2015, compared to 3.85% for the three months ended September 30, 2014. During 2015, the Bancorp’s net interest income was positively impacted by strong balance sheet growth, as interest earning assets increased by $61.0 million or 8.4% since December 31, 2014.

 

Noninterest Income

Noninterest income from banking activities totaled $5.3 million for the nine months ended September 30, 2015, compared to $4.6 million for the nine months ended September 30, 2014, an increase of $739 thousand or 16.2%. For the three months ended September 30, 2015, noninterest income from banking activities totaled $1.6 million, compared to $1.5 million for the three months ended September 30, 2014, an increase of $144 thousand or 9.8%. The increase in noninterest income for 2015 is due to gains from loan sales related to increased origination volume, gains from security sales, income from wealth management operations and income from banking services.

 

Noninterest Expense

Noninterest expense totaled $17.5 million for the nine months ended September 30, 2015, compared to $15.5 million for the nine months ended September 30, 2014, an increase of $2.0 million or 13.0%. For the three months ended September 30, 2015, noninterest expense totaled $6.2 million, compared to $5.4 million for the three months ended September 30, 2014, an increase of $853 thousand or 15.9%. The increase in noninterest expense for 2015 is primarily related to the Bancorp’s acquisition of Liberty Savings Bank during 2015 and First Federal of Hammond during 2014. During 2015, one-time expenses of $368 thousand have been incurred for the acquisition of Liberty Savings Bank. In addition, 2015 compensation, occupancy costs, FDIC insurance premiums and other operating expenses are elevated as a result of integrating First Federal of Hammond for the first nine months 2015 and Liberty Savings Bank for the third quarter of 2015. In addition, to enhance organic growth, operating costs are being incurred to grow the Bancorp’s lending team.

 

 

Funding

At September 30, 2015, core deposits totaled $500.6 million, an increase of $51.0 million or 11.3%, compared to December 31, 2014. Core deposits include checking, savings, and money market accounts and represented 71.7% of the Bancorp’s total deposits at September 30, 2015. The increase in core deposits is a result of management’s sales efforts along with customer preferences for short-term liquid investments in the current low interest rate environment. The Bancorp has experienced strong growth in consumer, business, and public fund deposit balances. During the first nine months of 2015, balances for certificates of deposit increased by $13.5 million or 7.3%, compared to December 31, 2014. The growth in certificates of deposit is related to the Bancorp’s acquisition of Liberty Savings Bank. In addition, at September 30, 2015, borrowings and repurchase agreements totaled $53.6 million, a decrease of $264 thousand or 0.5%, compared to December 31, 2014. Strong core deposit growth allowed management to repay maturing FHLB advances.

 

Lending

The Bancorp’s loan portfolio totaled $552.9 million at September 30, 2015, an increase of $64.8 million or 13.3%, compared to December 31, 2014. During the first nine months of 2015, the Bancorp originated $226.0 million in new loans, an increase of $55.7 million or 32.7%, compared to the first nine months of 2014. Loan balances consisting of residential mortgage loans and consumer loans acquired in the Liberty Savings Bank acquisition totaled $28.0 million. During the nine months ended September 30, 2015, commercial, construction and government related loans increased by $40.4 million in the aggregate. During the nine months ended September 30, 2015, $40.5 million of newly originated fixed rate mortgage loans were sold into the secondary market resulting in gains of $1.0 million.

 

Investing

The Bancorp’s securities portfolio totaled $232.9 million at September 30, 2015, compared to $220.1 million at December 31, 2014, an increase of $12.8 million or 5.8%. The securities portfolio represents 29.5% of earning assets and provides a consistent source of earnings to the Bancorp. Cash & cash equivalents totaled $11.2 million at September 30, 2015, compared to $22.0 million at December 31, 2014, a decrease of $10.8 million or 49.0%. The decrease in cash and cash equivalents mostly represents the funding of loan originations and purchase of securities.

 

Asset Quality

At September 30, 2015, non-performing loans totaled $4.9 million, compared to $5.5 million at December 31, 2014, a decrease of $612 thousand or 11.0%. The Bancorp’s ratio of non-performing loans to total loans was 0.89% at September 30, 2015, compared to 1.13% at December 31, 2014. In addition, the Bancorp’s ratio of non-performing assets to total assets was 0.96% at September 30, 2015, compared to 1.15% at December 31, 2014. The decrease in non-performing loans for 2015 is primarily the result of the short sale and payoff of one commercial real estate loan and overall improvement in the residential real estate portfolio.

 

For the nine months ended September 30, 2015, loan loss provisions totaled $585 thousand, while $575 thousand in provisions were recorded for the nine months ended September 30, 2014. For the three months ended September 30, 2015, loan loss provisions totaled $100 thousand, while $165 thousand in provisions were recorded for the three months ended September 30, 2014. The 2015 loan loss provisions were primarily related to increased loan originations and overall loan portfolio growth. Loan charge-offs, net of recoveries, totaled $221 thousand for the nine months ended September 30, 2015, compared to charge-offs, net of recoveries of $1.5 million for the nine months ended September 30, 2014. At September 30, 2015, the allowance for loan losses totaled $6.7 million and is considered adequate by management. The allowance for loan losses as a percentage of total loans was 1.22% at September 30, 2015, compared to 1.30% at December 31, 2014. The allowance for loan losses as a percentage of non-performing loans, or coverage ratio, was 136.47% at September 30, 2015, compared to 114.83% at December 31, 2014.

 

 

Capital Adequacy

At September 30, 2015, shareholders’ equity stood at $80.0 million or 9.5% of total assets. The Bancorp’s regulatory capital ratios at September 30, 2015 were 13.7% for total capital to risk-weighted assets, 12.6% for both common equity tier 1 capital to risk-weighted assets and tier 1 capital to risk-weighted assets, and 8.9% for tier 1 leverage capital to adjusted average assets. Under all regulatory capital requirements, the Bancorp is considered well capitalized. The book value of the Bancorp’s stock stood at $28.08 per share at September 30, 2015.

 

About NorthWest Indiana Bancorp

NorthWest Indiana Bancorp is a locally owned and independent bank holding company headquartered in Munster, Indiana, whose activities are primarily limited to holding the stock of Peoples Bank. Peoples Bank provides a wide range of personal, business and wealth management financial services from its 16 locations in Lake and Porter Counties in Northwest Indiana. NorthWest Indiana Bancorp’s common stock is traded on the OTC Bulletin Board under the symbol NWIN. The website ibankpeoples.com provides information on Peoples Bank’s products and services, and NorthWest Indiana Bancorp’s investor relations.

 

Forward Looking Statements

“Forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 may be included in this release. A variety of factors could cause the Bancorp’s actual results to differ from those expected at the time of this release. These include, but are not limited to, changes in economic conditions in the Bancorp’s market area, changes in policies by regulatory agencies, fluctuation in interest rates, demand for loans in the Bancorp’s market area, economic conditions in the financial services industry, the Bancorp’s ability to successfully integrate the operations of recently acquired institutions, competition and other risks set forth in the Bancorp’s reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2014. Readers are urged to carefully review and consider the various disclosures made by the Bancorp in its periodic reports filed with the Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made, and the Bancorp undertakes no obligation to update them in light of new information or future events.

 

Disclosure Regarding Non-GAAP Measures

This report refers to certain financial measures that are identified as non-GAAP. The Bancorp believes that these non-GAAP measures are helpful to investors to better understand current period performance in the presence of nonrecurring expenses that were realized during 2015. This supplemental information should not be considered in isolation or as a substitute for the related GAAP measures. See the attached Table 1 at the end of this press release for a reconciliation of the non-GAAP earnings figures identified herein and their most comparable GAAP measures.

 

 

NorthWest Indiana Bancorp
Quarterly Financial Report
Key Ratios		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		(Unaudited)								(Unaudited)
		2015				2014				2015				2014
Return on equity			9.73	%			10.34	%			9.88	%			10.51	%
Return on assets			0.91	%			0.98	%			0.96	%			1.00	%
Basic earnings per share		$	0.67			$	0.67			$	2.04			$	1.99
Diluted earnings per share		$	0.67			$	0.67			$	2.04			$	1.99
Yield on loans			4.49	%			4.51	%			4.44	%			4.42	%
Yield on security investments			2.61	%			2.73	%			2.64	%			2.72	%
Total yield on earning assets			3.87	%			3.85	%			3.80	%			3.85	%
Cost of deposits			0.23	%			0.21	%			0.22	%			0.20	%
Cost of borrowings			0.91	%			0.97	%			0.98	%			0.99	%
Total cost of funds			0.28	%			0.27	%			0.27	%			0.27	%
Net interest margin - tax equivalent			3.85	%			3.87	%			3.80	%			3.85	%
Noninterest income / average assets			0.76	%			0.75	%			0.88	%			0.81	%
Noninterest expense / average assets			2.94	%			2.75	%			2.90	%			2.74	%
Net noninterest margin / average assets			-2.18	%			-2.00	%			-2.02	%			-1.93	%
Efficiency ratio			71.44	%			66.79	%			69.00	%			66.09	%
Effective tax rate			19.62	%			23.63	%			20.13	%			23.25	%
Dividend declared per common share		$	0.27			$	0.25			$	0.79			$	0.72

 

		September 30,
		2015				December 31,
		(Unaudited)				2014
Net worth / total assets			9.51	%			9.83	%
Book value per share		$	28.08			$	26.78
Non-performing assets to total assets			0.96	%			1.15	%
Non-performing loans to total loans			0.89	%			1.13	%
Allowance for loan losses to non-performing loans			136.47	%			114.83	%
Allowance for loan losses to loans outstanding			1.22	%			1.30	%
Foreclosed real estate to total assets			0.17	%			0.23	%

 

Consolidated Statements of Income		Three Months Ended								Nine Months Ended
(Dollars in thousands)		September 30,								September 30,
		(Unaudited)								(Unaudited)
		2015				2014				2015				2014
Interest income:
Loans		$	6,084			$	5,520			$	16,992			$	15,827
Securities & short-term investments			1,541				1,522				4,580				4,419
Total interest income			7,625				7,042				21,572				20,246
Interest expense:
Deposits			408				332				1,087				914
Borrowings			117				139				378				427
Total interest expense			525				471				1,465				1,341
Net interest income			7,100				6,571				20,107				18,905
Provision for loan losses			100				165				585				575
Net interest income after provision for loan losses			7,000				6,406				19,522				18,330
Noninterest income:
Fees and service charges			729				734				2,072				2,031
Wealth management operations			449				375				1,265				1,194
Gain on sale of loans held-for-sale, net			276				178				1,010				383
Gain on sale of securities, net			32				63				562				520
Increase in cash value of bank owned life insurance			117				94				327				310
Gain on sale of foreclosed real estate, net			-				16				24				21
Other			12				11				37				99
Total noninterest income			1,615				1,471				5,297				4,558
Noninterest expense:
Compensation and benefits			3,372				2,980				9,743				8,419
Occupancy and equipment			938				865				2,724				2,476
Data processing			322				291				950				851
Marketing			132				108				390				368
Federal deposit insurance premiums			124				128				367				346
Other			1,337				1,000				3,354				3,046
Total noninterest expense			6,225				5,372				17,528				15,506
Income before income taxes			2,390				2,505				7,291				7,382
Income tax expenses			469				592				1,468				1,716
Net income		$	1,921			$	1,913			$	5,823			$	5,666

 

 

 

NorthWest Indiana Bancorp
Quarterly Financial Report
Balance Sheet Data
(Dollars in thousands)		September 30,
		2015				December 31,				Change				Mix
		(Unaudited)				2014				%				%
Total assets		$842,190				$775,044				8.7%				n/a
Cash & cash equivalents			11,196				21,963				-49.0	%			n/a
Securities - available for sale			232,872				220,053				5.8	%			n/a
Loans receivable:
Construction and land development		$	32,923			$	25,733				27.9	%			6.0	%
1-4 first liens			180,988				160,526				12.7	%			32.7	%
Multifamily			44,639				31,703				40.8	%			8.1	%
Commercial real estate			161,474				156,015				3.5	%			29.2	%
Commercial business			69,626				58,682				18.6	%			12.6	%
1-4 Junior Liens			1,128				1,507				-25.1	%			0.2	%
HELOC			28,212				25,564				10.4	%			5.1	%
Lot loans			3,457				1,932				78.9	%			0.6	%
Consumer			591				472				25.2	%			0.1	%
Government and other			29,882				26,019				14.8	%			5.4	%
Total loans		$	552,920			$	488,153				13.3	%			100.0	%
Deposits:
Core deposits:
Noninterest bearing checking		$	99,487			$	80,352				23.8	%			14.2	%
Interest bearing checking			135,870				133,962				1.4	%			19.5	%
Savings			117,617				89,866				30.9	%			16.8	%
MMDA			147,590				145,384				1.5	%			21.2	%
Total core deposits			500,564				449,564				11.3	%			71.7	%
Certificates of deposit			197,892				184,382				7.3	%			28.3	%
Total deposits		$	698,456			$	633,946				10.2	%			100.0	%
Borrowings		$	53,642			$	53,906				-0.5	%
Stockholder's equity			80,078				76,165				5.1	%

 

Asset Quality		September 30,
(Dollars in thousands)		2015				December 31,				Change
		(Unaudited)				2014				%
Nonaccruing loans		$	4,652			$	4,599				1.2	%
Accruing loans delinquent more than 90 days			276				941				-70.7	%
Securities in non-accrual			1,913				1,611				18.7	%
Foreclosed real estate			1,411				1,745				-19.1	%
Total nonperforming assets		$	8,252			$	8,896				-7.2	%
Allowance for loan losses (ALL):
ALL specific allowances for impaired loans		$	367			$	426				-13.8	%
ALL general allowances for loan portfolio			6,358				5,935				7.1	%
Total ALL		$	6,725			$	6,361				5.7	%
Troubled Debt Restructurings:
Nonaccruing troubled debt restructurings, non-compliant (1) (2)		$	612			$	524				16.8	%
Nonaccruing troubled debt restructurings, compliant (2)			-				1,216				-100.0	%
Accruing troubled debt restructurings			4,543				4,687				-3.1	%
Total troubled debt restructurings		$	5,155			$	6,427				-19.8	%

(1) "non-compliant" refers to not being within the guidelines of the restructuring agreement  

(2) included in nonaccruing loan balances presented above

 

Capital Adequacy (Bancorp and Bank)		At September 30,
		2015
		Actual Ratio				Required
		(Unaudited)				To Be Well Capitalized (1)
Common equity tier 1 capital to risk-weighted assets			12.6	%			6.5	%
Tier 1 capital to risk-weighted assets			12.6	%			8.0	%
Total capital to risk-weighted assets			13.7	%			10.0	%
Tier 1 capital to adjusted average assets			8.9	%			5.0	%

(1) Effective January 1, 2015, new minimum capital requirements went into effect, which increased the Tier 1 capital to risk-weighted assets ratio to 8.0% to be well capitalized and also introduced a new common equity Tier 1 capital ratio of 4.5% (6.5% to be well capitalized).

 

 

 

Table 1 - Reconciliation of the Non-GAAP Earnings Figures
		Thee Months				Nine Months
		Ended				Ended
		9/30/2015				9/30/2015
		(Unaudited)				(Unaudited)
Net Income		$	1,921			$	5,823
Acquisition costs			303				368
Income before income taxes			2,693				7,659
Income tax expenses			528				1,542
Proforma net income		$	2,165			$	6,117
Net income change			13.1	%			8.0	%