Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - Finward Bancorp | tv477519_8k.htm |
Exhibit 99.1.
| FOR IMMEDIATE RELEASE | FOR FURTHER INFORMATION |
| October 23, 2017 | CONTACT BENJAMIN BOCHNOWSKI |
| (219) 853-7575 |
NORTHWEST INDIANA BANCORP
ANNOUNCES EARNINGS FOR THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2017
Munster, Indiana - NorthWest Indiana Bancorp (the “Bancorp”), the financial holding company for Peoples Bank (the “Bank”), reported an earnings increase of 3.8% for the nine months ended September 30, 2017, compared to the same period for 2016. Net income totaled $7.1 million for the nine months ended September 30, 2017, compared to $6.8 million for the nine months ended September 30, 2016.
The earnings of $7.1 million for the nine months ended September 30, 2017, represent $2.47 earnings per basic and diluted share. For the first nine months of 2017, the return on average assets (ROA) was 1.04% and the return on average equity (ROE) was 10.54%. At September 30, 2017, the Bancorp’s assets totaled $916.3 million.
“Strong year to date results come from the overall execution of the Bancorp’s strategic plan. ROA was up 1 basis point from the prior period, and reflects overall enhancements to income. The Bank also added to its lending and wealth management teams, paving the way for further growth in the future,” said Benjamin Bochnowski, president & chief executive officer. “We continue to grow our capital base, which we feel provides us ample resources to support our growth goals.”
“The Bancorp’s earnings increase for the first nine months of 2017 was supported by its ability to profitably grow net interest income. For the current year, the net interest margin on a tax equivalent basis is 3.84%. Commercial loan growth of 5.8% and well managed funding costs contributed to the strong net interest margin,” said Robert Lowry, chief financial officer. “Asset quality remains strong, as nonperforming loans to total loans remains under 1.00%.”
For the three months ended September 30, 2017, the Bancorp’s net income totaled $2.2 million, compared to $2.3 million for the three months ended September 30, 2016, a decrease of 3.4%. The net income of $2.2 million for the three months ended September 30, 2017 represents $0.78 earnings per basic and diluted share. For the three months ended September 30, 2017, the ROA was 0.98% and the ROE was 9.80%.
Net Interest Income
Net interest income, the difference between interest income from loans and investments and interest expense paid to fund providers, totaled $22.9 million for the nine months ended September 30, 2017, compared to $22.5 million for the nine months ended September 30, 2016, an increase of $469 thousand or 2.1%. The Bancorp’s net interest margin on a tax-adjusted basis was 3.84% for the nine months ended September 30, 2017, compared to 3.86% for the nine months ended September 30, 2016. For the three months ended September 30, 2017, net interest income totaled $7.8 million, compared to $7.6 million for the three months ended September 30, 2016 for an increase of $190 thousand or 2.5%. The Bancorp’s net interest margin on a tax-adjusted basis was 3.86% for the three months ended September 30, 2017, compared to 3.82% for the three months ended September 30, 2016.
Noninterest Income
Noninterest income from banking activities totaled $5.8 million for the nine months ended September 30, 2017, compared to $5.7 million for the nine months ended September 30, 2016, an increase of $125 thousand or 2.2%. For the three months ended September 30, 2017, noninterest income from banking activities totaled $2.1 million, compared to $2.2 million for the three months ended September 30, 2016, a decrease of $112 thousand or 5.1%. During 2017, the Bancorp has seen increases in its noninterest income from banking services and securities sales. Also during 2017, noninterest income from mortgage loan sales decreased due to lower sales volume. In addition, income from wealth management operations decreased due to book value changes of assets under management and the timing of one-time fees.
Noninterest Expense
Noninterest expense totaled $19.3 million for the nine months ended September 30, 2017, compared to $18.6 million for the nine months ended September 30, 2016, an increase of $658 thousand or 3.5%. For the three months ended September 30, 2017, noninterest expense totaled $6.9 million, compared to $6.5 million for the three months ended September 30, 2016, an increase of $377 thousand or 5.8%. During 2017, the Bancorp has seen increases in its noninterest expense from costs related to third-party services, foreclosure and collection activity, marketing of brand and financial services, and increased compensation related to annual salary adjustments. Decreases in noninterest expense for 2017 were realized for occupancy costs and deposit insurance premiums.
Lending
The Bancorp’s loan portfolio totaled $608.0 million at September 30, 2017, compared to $583.7 million at December 31, 2016, an increase of $24.3 million or 4.2%. During the first nine months of 2017, the Bancorp originated $246.0 million in new loans. During the nine months ended September 30, 2017, the Bancorp saw its commercial real estate, construction and land development, multifamily, HELOCs and government loan balances increase. During the nine months ended September 30, 2017, $32.7 million in newly originated fixed rate mortgage loans were sold into the secondary market resulting in gains of $883 thousand. The loan portfolio represents 70.8% of earning assets and is comprised of 65.9% commercial related credits.
Investing
The Bancorp’s securities portfolio totaled $243.6 million at September 30, 2017, compared to $233.6 million at December 31, 2016, an increase of $9.9 million or 4.2%. The securities portfolio represents 28.3% of earning assets and provides a consistent source of liquidity and earnings to the Bancorp. Cash and cash equivalents totaled $14.1 million at September 30, 2017, compared to $45.1 million at December 31, 2016, a decrease of $31.0 million. The decrease in cash and cash equivalents is mostly a result of short-term deposits from local municipalities received in December 2016 and withdrawn as planned during 2017.
Funding
At September 30, 2017, core deposits totaled $584.7 million, compared to $594.1 million at December 31, 2016, a decrease of $9.4 million or 1.6%. Core deposits include checking, savings, and money market accounts and represented 77.2% of the Bancorp’s total deposits at September 30, 2017. The decrease in core deposits is primarily related to the previously mentioned planned withdrawal of short-term municipal deposits. During the nine months ended September 30, 2017, balances for consumer, business and not for profit core accounts increased by $12.1 million. The increase in these core deposits is a result of management’s sales efforts along with customer preferences for short-term liquid investments in the continued low interest rate environment. At September 30, 2017, balances for certificates of deposit totaled $172.8 million, compared to $185.7 million at December 31, 2016, a decrease of $12.8 million or 6.9%. In addition, at September 30, 2017, borrowings and repurchase agreements totaled $57.4 million, compared to $39.8 million at December 31, 2016, an increase of $17.5 million or 44.0%. During 2017, management has replaced high cost certificate of deposit with lower cost borrowings to manage short-term liquidity needs.
Asset Quality
At September 30, 2017, non-performing loans totaled $5.6 million, compared to $6.1 million at December 31, 2016, a decrease of $516 thousand or 8.5%. The Bancorp’s ratio of non-performing loans to total loans was 0.92% at September 30, 2017, compared to 1.05% at December 31, 2016. The decrease in the ratio of non-performing loans for 2017 is related to a partial charge-off totaling $829 thousand for a pool of investor owned residential real estate loans. In addition, the Bancorp’s ratio of non-performing assets to total assets was 1.08% at September 30, 2017, compared to 1.10% at December 31, 2016.
For the nine months ended September 30, 2017, $722 thousand in provisions to the ALL were required, compared to $846 thousand for the nine months ended September 30, 2016, a decrease of $124 thousand or 14.7%. The ALL provision for the current nine-month period is primarily a result of overall loan portfolio growth. For the nine months ended September 30, 2017, charge-offs, net of recoveries, totaled $1.4 million, compared to charge-offs, net of recoveries of $295 thousand for the nine months ended September 30, 2016. Of the $1.4 million in charge-offs, net of recoveries for 2017, $1.2 million was for loans with specific reserves of the allowance for loan losses at December 31, 2016. The net loan charge-offs for the first nine months of 2017 were comprised of $911 thousand in residential real estate loans, $48 thousand in consumer loans, $344 thousand in commercial business loans, and $60 thousand in home equity loans. At September 30, 2017, the allowance for loan losses totaled $7.1 million and is considered adequate by management. The allowance for loan losses as a percentage of total loans was 1.16% at September 30, 2017, compared to 1.32% at December 31, 2016. The allowance for loan losses as a percentage of non-performing loans, or coverage ratio, was 126.3% at September 30, 2017, compared to 126.1% at December 31, 2016.
Capital Adequacy
At September 30, 2017, shareholders’ equity stood at $91.1 million, and tangible capital represented 9.4% of total assets. The Bancorp’s regulatory capital ratios at September 30, 2017 were 14.1% for total capital to risk-weighted assets, 13.0% for both common equity tier 1 capital to risk-weighted assets and tier 1 capital to risk-weighted assets, and 9.6% 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 $31.82 per share at September 30, 2017.
About NorthWest Indiana Bancorp
NorthWest Indiana Bancorp is a locally managed and independent financial 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, 2016. Readers are urged to carefully review and consider the various disclosures made by the Bancorp in its periodic reports filed with the Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made, and the Bancorp undertakes no obligation to update them in light of new information or future events.
NorthWest Indiana Bancorp
Quarterly Financial Report
| Key Ratios | Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | |||||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Return on equity | 9.80 | % | 10.67 | % | 10.54 | % | 10.63 | % | ||||||||
| Return on assets | 0.98 | % | 1.03 | % | 1.04 | % | 1.03 | % | ||||||||
| Basic earnings per share | $ | 0.78 | $ | 0.81 | $ | 2.47 | $ | 2.38 | ||||||||
| Diluted earnings per share | $ | 0.78 | $ | 0.81 | $ | 2.47 | $ | 2.38 | ||||||||
| Yield on loans | 4.50 | % | 4.45 | % | 4.42 | % | 4.48 | % | ||||||||
| Yield on security investments | 2.59 | % | 2.43 | % | 2.60 | % | 2.50 | % | ||||||||
| Total yield on earning assets | 3.94 | % | 3.86 | % | 3.89 | % | 3.90 | % | ||||||||
| Cost of deposits | 0.27 | % | 0.24 | % | 0.26 | % | 0.24 | % | ||||||||
| Cost of borrowings | 1.30 | % | 1.01 | % | 1.22 | % | 1.00 | % | ||||||||
| Total cost of funds | 0.32 | % | 0.29 | % | 0.30 | % | 0.30 | % | ||||||||
| Net interest margin - tax equivalent | 3.86 | % | 3.82 | % | 3.84 | % | 3.86 | % | ||||||||
| Noninterest income / average assets | 0.91 | % | 0.97 | % | 0.86 | % | 0.86 | % | ||||||||
| Noninterest expense / average assets | 3.03 | % | 2.90 | % | 2.83 | % | 2.81 | % | ||||||||
| Net noninterest margin / average assets | -2.12 | % | -1.93 | % | -1.97 | % | -1.95 | % | ||||||||
| Efficiency ratio | 70.34 | % | 67.05 | % | 66.93 | % | 66.01 | % | ||||||||
| Effective tax rate | 18.46 | % | 21.32 | % | 19.51 | % | 21.96 | % | ||||||||
| Dividend declared per common share | $ | 0.29 | $ | 0.28 | $ | 0.87 | $ | 0.83 | ||||||||
| September 30, | ||||||||
| 2017 | December 31, | |||||||
| (Unaudited) | 2016 | |||||||
| Net worth / total assets | 9.94 | % | 9.21 | % | ||||
| Book value per share | $ | 31.82 | $ | 29.41 | ||||
| Non-performing assets to total assets | 1.08 | % | 1.10 | % | ||||
| Non-performing loans to total loans | 0.92 | % | 1.05 | % | ||||
| Allowance for loan losses to non-performing loans | 126.31 | % | 126.10 | % | ||||
| Allowance for loan losses to loans outstanding | 1.16 | % | 1.32 | % | ||||
| Foreclosed real estate to total assets | 0.20 | % | 0.29 | % | ||||
| Consolidated Statements of Income | Three Months Ended | Nine Months Ended | ||||||||||||||
| (Dollars in thousands) | September 30, | September 30, | ||||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Interest income: | ||||||||||||||||
| Loans | $ | 6,828 | $ | 6,664 | $ | 19,931 | $ | 19,654 | ||||||||
| Securities & short-term investments | 1,603 | 1,505 | 4,850 | 4,581 | ||||||||||||
| Total interest income | 8,431 | 8,169 | 24,781 | 24,235 | ||||||||||||
| Interest expense: | ||||||||||||||||
| Deposits | 518 | 445 | 1,475 | 1,315 | ||||||||||||
| Borrowings | 141 | 142 | 361 | 444 | ||||||||||||
| Total interest expense | 659 | 587 | 1,836 | 1,759 | ||||||||||||
| Net interest income | 7,772 | 7,582 | 22,945 | 22,476 | ||||||||||||
| Provision for loan losses | 165 | 262 | 722 | 846 | ||||||||||||
| Net interest income after provision for loan losses | 7,607 | 7,320 | 22,223 | 21,630 | ||||||||||||
| Noninterest income: | ||||||||||||||||
| Fees and service charges | 843 | 763 | 2,404 | 2,143 | ||||||||||||
| Wealth management operations | 459 | 423 | 1,267 | 1,280 | ||||||||||||
| Gain on sale of securities, net | 213 | 283 | 758 | 700 | ||||||||||||
| Gain on sale of loans held-for-sale, net | 412 | 579 | 883 | 1,120 | ||||||||||||
| Increase in cash value of bank owned life insurance | 119 | 118 | 349 | 354 | ||||||||||||
| Gain on sale of foreclosed real estate, net | 2 | 6 | 95 | 80 | ||||||||||||
| Other | 27 | 15 | 64 | 18 | ||||||||||||
| Total noninterest income | 2,075 | 2,187 | 5,820 | 5,695 | ||||||||||||
| Noninterest expense: | ||||||||||||||||
| Compensation and benefits | 4,094 | 3,901 | 10,847 | 10,534 | ||||||||||||
| Occupancy and equipment | 845 | 900 | 2,542 | 2,768 | ||||||||||||
| Data processing | 364 | 343 | 1,092 | 1,005 | ||||||||||||
| Marketing | 135 | 108 | 469 | 352 | ||||||||||||
| Federal deposit insurance premiums | 84 | 135 | 242 | 403 | ||||||||||||
| Other | 1,403 | 1,161 | 4,061 | 3,533 | ||||||||||||
| Total noninterest expense | 6,925 | 6,548 | 19,253 | 18,595 | ||||||||||||
| Income before income taxes | 2,757 | 2,959 | 8,790 | 8,730 | ||||||||||||
| Income tax expenses | 509 | 631 | 1,715 | 1,917 | ||||||||||||
| Net income | $ | 2,248 | $ | 2,328 | $ | 7,075 | $ | 6,813 | ||||||||
NorthWest Indiana Bancorp
Quarterly Financial Report
| Balance Sheet Data | ||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||
| September 30, 2017 | December 31, | Change | Mix | |||||||||||||
| (Unaudited) | 2016 | % | % | |||||||||||||
| Total assets | $ | 916,347 | $ | 913,626 | 0.3 | % | n/a | |||||||||
| Cash & cash equivalents | 14,128 | 45,109 | -68.7 | % | n/a | |||||||||||
| Securities - available for sale | 243,552 | 233,625 | 4.2 | % | n/a | |||||||||||
| Loans receivable: | ||||||||||||||||
| Residential real estate | $ | 171,667 | $ | 173,262 | -0.9 | % | 28.2 | % | ||||||||
| Home equity | 35,357 | 32,575 | 8.5 | % | 5.8 | % | ||||||||||
| Commercial real estate | 203,388 | 195,438 | 4.1 | % | 33.5 | % | ||||||||||
| Construction and land development | 53,983 | 38,937 | 38.6 | % | 8.9 | % | ||||||||||
| Multifamily | 37,402 | 36,086 | 3.6 | % | 6.2 | % | ||||||||||
| Consumer | 383 | 524 | -26.9 | % | 0.1 | % | ||||||||||
| Commercial business | 75,954 | 77,299 | -1.7 | % | 12.5 | % | ||||||||||
| Government | 29,830 | 29,529 | 1.0 | % | 4.9 | % | ||||||||||
| Total loans | $ | 607,964 | $ | 583,650 | 4.2 | % | 100.0 | % | ||||||||
| Deposits: | ||||||||||||||||
| Core deposits: | ||||||||||||||||
| Noninterest bearing checking | $ | 118,797 | $ | 111,800 | 6.3 | % | 15.7 | % | ||||||||
| Interest bearing checking | 165,390 | 176,349 | -6.2 | % | 21.8 | % | ||||||||||
| Savings | 132,397 | 127,626 | 3.7 | % | 17.5 | % | ||||||||||
| Money market | 168,151 | 178,332 | -5.7 | % | 22.2 | % | ||||||||||
| Total core deposits | 584,735 | 594,107 | -1.6 | % | 77.2 | % | ||||||||||
| Certificates of deposit | 172,825 | 185,664 | -6.9 | % | 22.8 | % | ||||||||||
| Total deposits | $ | 757,560 | $ | 779,771 | -2.8 | % | 100.0 | % | ||||||||
| Borrowings and repurchase agreements | $ | 57,367 | $ | 39,826 | 44.0 | % | ||||||||||
| Stockholder's equity | 91,127 | 84,108 | 8.3 | % | ||||||||||||
| Asset Quality | September 30, | |||||||||||
| (Dollars in thousands) | 2017 | December 31, | Change | |||||||||
| (Unaudited) | 2016 | % | ||||||||||
| Nonaccruing loans | $ | 5,209 | $ | 5,605 | -7.1 | % | ||||||
| Accruing loans delinquent more than 90 days | 380 | 500 | -24.0 | % | ||||||||
| Securities in non-accrual | 2,259 | 1,689 | 33.7 | % | ||||||||
| Foreclosed real estate | 1,805 | 2,665 | -32.3 | % | ||||||||
| Total nonperforming assets | $ | 9,653 | $ | 10,459 | -7.7 | % | ||||||
| Allowance for loan losses (ALL): | ||||||||||||
| ALL specific allowances for impaired loans | $ | 725 | $ | 1,236 | -41.3 | % | ||||||
| ALL general allowances for loan portfolio | 6,334 | 6,462 | -2.0 | % | ||||||||
| Total ALL | $ | 7,059 | $ | 7,698 | -8.3 | % | ||||||
| Troubled Debt Restructurings: | ||||||||||||
| Nonaccruing troubled debt restructurings, non-compliant (1) (2) | $ | - | $ | - | 0.0 | % | ||||||
| Nonaccruing troubled debt restructurings, compliant (2) | - | 246 | -100.0 | % | ||||||||
| Accruing troubled debt restructurings | 325 | 60 | 441.7 | % | ||||||||
| Total troubled debt restructurings | $ | 325 | $ | 306 | 6.2 | % | ||||||
| (1) | "non-compliant" refers to not being within the guidelines of the restructuring agreement |
| (2) | included in nonaccruing loan balances presented above |
| At September 30, 2017 Actual Ratio (Unaudited) | Required To Be Well Capitalized | |||||||
| Capital Adequacy Bancorp | ||||||||
| Common equity tier 1 capital to risk-weighted assets | 13.0 | % | 6.5 | % | ||||
| Tier 1 capital to risk-weighted assets | 13.0 | % | 8.0 | % | ||||
| Total capital to risk-weighted assets | 14.1 | % | 10.0 | % | ||||
| Tier 1 capital to adjusted average assets | 9.6 | % | 5.0 | % | ||||
| Capital Adequacy Bank | ||||||||
| Common equity tier 1 capital to risk-weighted assets | 12.7 | % | 6.5 | % | ||||
| Tier 1 capital to risk-weighted assets | 12.7 | % | 8.0 | % | ||||
| Total capital to risk-weighted assets | 13.8 | % | 10.0 | % | ||||
| Tier 1 capital to adjusted average assets | 9.4 | % | 5.0 | % | ||||