Exhibit 99.1

 

FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION
January 26, 2012 CONTACT DAVID A. BOCHNOWSKI
  (219) 853-7575

 

 

NORTHWEST INDIANA BANCORP

 

REPORTS 2011 FOURTH QUARTER AND ANNUAL RESULTS

 

  

Munster, Indiana - NorthWest Indiana Bancorp (the “Bancorp”), the holding company for Peoples Bank, reported a fourth quarter increase in earnings of 24.0%, as net income totaled $1.4 million for the three months ended December 31, 2011, compared to $1.1 million for the three months ended December 31, 2010.

 

The earnings of $1.4 million for the three months ended December 31, 2011, represent $0.50 per basic and diluted share. For the current three month period, the return on average assets (ROA) was 0.87% and the return on equity (ROE) was 8.86%.

 

For 2011, the Bancorp’s earnings increased by 4.0% as net income totaled $5.4 million, compared to $5.2 million for 2010, which represents $1.90 per basic and diluted share. For 2011, the ROA was 0.84% and the ROE was 8.90%.

 

“Peoples Bank reported another solid year of income in 2011 with results that again outpace the performance of the nation’s community banking industry. The economy began to improve during the second half of the year, resulting in a very strong fourth quarter as income for the quarter increased 24.0% over last year,” said David A. Bochnowski, Chairman and Chief Executive Officer.

 

“Banking fundamentals continue to lead our 2011 earnings performance. Core income remained strong, our capital position continued to grow, asset quality improved, and operating costs held steady,” Bochnowski said. At the end of 2011, the Bank reported a net interest margin of 4.17%, a tangible equity capital of 9.66%, a 40.7% decrease in non-performing loans, and a 3.0% increase in operating costs.

 

“Core funding continued to have a favorable impact on income as savings, checking, and money market accounts increased by $28.2 million or 8.7% at the end of the year. Core accounts exceeded 66.4% of deposits at year end and demonstrate our customer’s confidence in the strength of the Bank as well as our delivery channels for products and services,” Bochnowski noted. During November 2011, Peoples became the first community bank in Northwest Indiana to roll out a mobile banking application for smart phones, enabling customers to conduct their banking anytime, anywhere.

 
 

 

“Peoples Bank continues to be a well-capitalized bank under all applicable banking standards with a proud record of earnings since the Great Recession started in 2008. Significantly, the Bank did not need TARP funds or have to access other forms of capital assistance from the federal government during these challenging times. As the economy improves, Peoples Bank will continue to bring value to our customers with exceptional products and services, and to partner with our friends and neighbors in the growth of our communities,” Bochnowski said.

 

Net Interest Income

Net interest income, the difference between interest income from loans and investments and interest expense paid to funds providers, totaled $5.9 million for the three months ended December 31, 2011, compared to $6.1 million for the three months ended December 31, 2010, a decrease of $218 thousand or 3.5%. For 2011, net interest income totaled $23.8 million, compared to $25.1 million for 2010, a decrease of $1.3 million or 5.3%. The net interest income decrease for both the three and twelve month periods is a result of reduced loan balances and lower asset yields. The Bancorp’s net interest margin on a tax adjusted basis was 4.14% for the three months ended December 31, 2011, compared to 4.28% for the three months ended December 31, 2010. For 2011, the tax adjusted net interest margin was 4.17%, compared to 4.25% for 2010. The Bancorp’s net interest margin continues to benefit from core deposit growth and a low cost of funds as a result of the Federal Reserve’s continued action in maintaining a low interest rate environment.

 

Noninterest Income

Noninterest income from banking activities totaled $1.6 million, for both three month periods December 31, 2011 and 2010. For 2011, noninterest income totaled $6.2 million, compared to $5.8 million for 2010, an increase of $457 thousand or 7.9%. The increase for 2011 is primarily related to the Bancorp’s favorable settlement in its lawsuit against the lead lender of a commercial real estate participation loan.

 

Noninterest Expense

Noninterest expense related to operating activities totaled $4.9 million for the three months ended December 31, 2011, compared to $5.0 million for the three months ended December 31, 2010, a decrease of $142 thousand or 2.8%. For 2011, noninterest expense totaled $19.9 million, compared to $19.3 million for 2010, an increase of $587 thousand or 3.0%. The increase for 2011 is primarily related to additional expenses related to the operations of the St. John Banking Center, which opened in October 2010.

 

Funding

At December 31, 2011, core deposits totaled $350.0 million, an increase of $28.2 million or 8.7%, compared to December 31, 2010. Core deposits include checking, savings, and money market accounts and represented 66.4% of the Bancorp’s total deposits at December 31, 2011. As a result of core deposit growth and increased liquidity from loan repayments, management reduced certificate of deposit balances by $21.5 million during the year, which had a positive impact of lowering the Bancorp’s cost of funds. At December 31, 2011, borrowings and repurchase agreements totaled $52.0 million, an increase of $3.4 million from December 31, 2010.

 
 

 

Lending

The Bancorp’s loan portfolio totaled $401.4 million at December 31, 2011, a decrease of $16.8 million or 4.0%, compared to December 31, 2010. During 2011, mortgage, commercial real estate and commercial business loans increased by $13.7 million. During 2011, $10.7 million of fixed rate mortgage loans were sold into the secondary market. In addition, construction and land development loans, as well as multifamily, consumer and government loans, decreased by an aggregate of $30.5 million during the year. A significant portion of the decrease in loans is a result of management’s focused effort to remove non-performing loans from its balance sheet.

 

Investing

The Bancorp’s securities portfolio totaled $187.0 million at December 31, 2011, an increase of $26.5 million or 16.5%, compared to December 31, 2010. During 2011, management invested the Bancorp’s excess liquidity in the securities portfolio, which has had a positive impact on earnings.

 

Asset Quality

At December 31, 2011, past due loans totaled $18.1 million, compared to $33.2 million at December 31, 2010, a decrease of $15.1 million or 45.5%. Non-performing loans totaled $14.3 million at December 31, 2011, compared to $24.1 million at December 31, 2010, a decrease of $9.8 million or 40.7%. The current level of non-performing loans is concentrated with three geographically diverse commercial real estate participation loans that aggregate to $7.2 million. These participations were purchased from other originators during the period from 2005 through 2007, prior to the most recent recession. The Bancorp’s ratio of non-performing assets to total assets was 2.68% at December 31, 2011, compared to 4.46% at December 31, 2010.

 

For the three months ended December 31, 2011, loan loss provisions totaled $875 thousand, while $1.5 million in provisions were recorded for the three months ended December 31, 2010. For 2011, loan loss provisions totaled $3.5 million, while $5.6 million in provisions were recorded for 2010. The 2011 loan loss provisions were primarily related to the current credit risk in the commercial real estate participation and commercial real estate loan portfolios. Loan charge-offs, net of recoveries, totaled $4.6 million for 2011, compared to $2.6 million for 2010. At December 31, 2011, the allowance for loan losses totaled $8.0 million and is considered adequate by management. The allowance for loan losses as a percentage of total loans was 1.99% at December 31, 2011, compared to 2.18% at December 31, 2010. The allowance for loan losses as a percentage of non-performing loans, or coverage ratio, was 56.0% at December 31, 2011, compared to 37.8% at December 31, 2010.

 

Capital Adequacy

At December 31, 2011, shareholders’ equity stood at $63.0 million or 9.7% of total assets. The Bancorp’s regulatory capital ratios at December 31, 2011 were 14.3% for total capital to risk-weighted assets, 13.1% for tier 1 capital to risk-weighted assets and 9.2% for tier 1 capital to adjusted average assets. Under all regulatory capital requirements, the Bancorp is considered well capitalized. The book value of the Bancorp’s stock stood at $22.20 per share at December 31, 2011.

 
 

 

The NorthWest Indiana Bancorp’s common stock is traded on the OTC Bulletin Board under NWIN. The Bancorp’s subsidiary, Peoples Bank, has offices in Crown Point, Dyer, East Chicago, Gary, Hammond, Hobart, Merrillville, Munster, St. John, Schererville and Valparaiso, Indiana. The Bank’s website, ibankpeoples.com, provides information on the Bank’s products, services and investor relations.

 

“Forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 may be included in this release. A variety of factors could cause the Bancorp’s actual results to differ from those expected at the time of this release. These include, but are not limited to, changes in economic conditions in the Bancorp’s market area, changes in policies by regulatory agencies, fluctuation in interest rates, demand for loans in the Bancorp’s market area, economic conditions in the financial services industry, including on-going depressed demand in the housing market, competition and other risks set forth in the Bancorp’s reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2010. Readers are urged to carefully review and consider the various disclosures made by the Bancorp in its periodic reports filed with the Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made, and the Bancorp undertakes no obligation to update them in light of new information or future events.

 
 

 

NorthWest Indiana Bancorp
Financial Report
                     

Key Ratios  Three Months Ended   Twelve Months Ended 
  December 31,  December 31, 
  (Unaudited)   (Unaudited)
   2011  2010  2011  2010
Return on equity   8.86%   7.68%   8.90%   9.03%
Return on assets   0.87%   0.70%   0.84%   0.77%
Basic earnings per share  $0.50   $0.40   $1.90   $1.83 
Diluted earnings per share  $0.50   $0.40   $1.90   $1.83 
Yield on loans   5.08%   5.34%   5.10%   5.39%
Yield on security investments   2.94%   3.26%   3.20%   3.45%
Total yield on earning assets   4.38%   4.72%   4.49%   4.84%
Cost of deposits   0.39%   0.58%   0.47%   0.71%
Cost of borrowings   1.40%   1.74%   1.50%   2.04%
Total cost of funds   0.48%   0.68%   0.56%   0.82%
Net interest margin - tax equivalent   4.14%   4.28%   4.17%   4.25%
Noninterest income / average assets   0.97%   0.96%   0.97%   0.86%
Noninterest expense / average assets   3.00%   3.07%   3.10%   2.89%
Net noninterest margin / average assets   -2.03%   -2.11%   -2.13%   -2.03%
Efficiency ratio   64.77%   64.82%   66.42%   62.62%
Effective tax rate   20.54%   10.32%   17.96%   13.34%
Dividend declared per common share  $0.15   $0.15   $0.60   $0.72 
                     
   December 31,                 
    2011    December 31,          
   (Unaudited)    2010            
Net worth / total assets   9.66%   8.89%          
Book value per share  $22.20   $19.84           
Non-performing assets to total assets   2.68%   4.46%          
Non-performing loans to total loans   3.56%   5.77%          
Allowance for loan losses to non-performing loans   56.03%   37.82%          
Allowance for loan losses to loans outstanding   1.99%   2.18%          
Foreclosed real estate to total assets   0.38%   0.52%          
                     
           
Consolidated Statements of Income   Three Months Ended     Twelve Months Ended  
(Dollars in thousands)   December 31,     December 31,
   (Unaudited)    (Unaudited) 
    2011    2010    2011    2010 
Interest income:                    
Loans  $5,183   $5,683   $20,893   $24,051 
Securities & short-term investments   1,448    1,465    6,093    6,035 
Total interest income   6,631    7,148    26,986    30,086 
Interest expense:                    
Deposits   507    779    2,473    3,914 
Borrowings   189    216    758    1,075 
Total interest expense   696    995    3,231    4,989 
Net interest income   5,935    6,153    23,755    25,097 
Provision for loan losses   875    1,450    3,510    5,570 
Net interest income after provision for loan losses   5,060    4,703    20,245    19,527 
Noninterest income:                    
Fees & service charges   636    642    2,501    2,538 
Gain on sale of loans, net   119    657    256    1,263 
Wealth management operations   300    278    1,177    1,165 
Gain on sale of securities, net   283    59    966    913 
Cash value increase from bank owned life insurance   99    97    398    403 
Other-than-temporary impairment of securities   (1)   —      (1)   (128)
Gain/(loss) on foreclosed real estate   101    (181)   887    (381)
Other income   26    5    63    17 
Total noninterest income   1,563    1,557    6,247    5,790 
Noninterest expense:                    
Compensation & benefits   2,523    2,306    9,953    9,599 
Occupancy & equipment   764    624    3,333    3,010 
Federal deposit insurance premiums   141    223    946    950 
Data processing   258    242    1,005    941 
Marketing   99    156    403    485 
Other   1,071    1,447    4,288    4,356 
Total noninterest expense   4,856    4,998    19,928    19,341 
Income before income taxes   1,767    1,262    6,564    5,976 
Income tax expenses   363    130    1,179    797 
Net income  $1,404   $1,132   $5,385   $5,179 

 

 

 
 

 

 NorthWest Indiana Bancorp

Financial Report

 

 Balance Sheet Data            
 (Dollars in thousands)            
    December 31,         
   2011  December 31,  Change  Mix
   (unaudited)  2010  %  %
Total assets  $651,758   $631,053    3.3%     
Cash & cash equivalents   26,367    10,938    141.1%     
Securities - available for sale   186,962    142,055    31.6%     
Securities - held to maturity   —      18,397    -100.0%     
                     
Loans receivable:                    
Construction and land development   21,143    46,371    -54.4%   5.3%
1-4 first liens   132,231    127,959    3.3%   32.9%
Multifamily   7,313    7,605    -3.8%   1.8%
Commercial real estate   146,402    138,506    5.7%   36.5%
Commercial business   63,293    61,726    2.5%   15.8%
1-4 Junior Liens   1,814    2,434    -25.5%   0.5%
HELOC   17,434    19,325    -9.8%   4.3%
Lot loans   2,656    3,164    -16.1%   0.7%
Consumer   472    763    -38.1%   0.1%
Government and other   8,643    10,380    -16.7%   2.1%
Total loans   401,401    418,233    -4.0%   100.0%
                     
Deposits:                    
Core deposits:                    
Noninterest bearing checking   55,577    50,712    9.6%   10.5%
Interest bearing checking   102,294    90,984    12.4%   19.4%
Savings   71,417    65,146    9.6%   13.6%
MMDA   120,671    114,983    4.9%   22.9%
Total core deposits   349,959    321,825    8.7%   66.4%
Certificates of deposit   176,922    198,446    -10.8%   33.6%
Total deposits   526,881    520,271    1.3%   100.0%
                     
Borrowings  and repurchase agreements   52,013    48,619    7.0%     
Stockholder's equity   62,960    56,089    12.3%     
                     
                     
Asset Quality   December 31,                
(Dollars in thousands)   2011    December 31,    Change      
    (unaudited)    2010    %      
Nonaccruing loans  $14,010   $23,967    -41.5%     
Accruing loans delinquent more than 90 days   279    148    88.5%     
Securities in non-accrual   717    742    -3.4%     
Foreclosed real estate   2,457    3,298    -25.5%     
Total nonperforming assets   17,463    28,155    -38.0%     
                     
Allowance for loan losses (ALL):                    
ALL specific allowances for impaired loans   1,599    2,794    -42.8%     
ALL general allowances for loan portfolio   6,406    6,327    1.2%     
Total ALL   8,005    9,121    -12.2%     
                     
                     
    At December 31, 2011      
    (unaudited)      
Capital Adequacy   Actual    Required to be           
    Ratio    well capitalized           
                     
Total capital to risk-weighted assets   14.3%   10.0%          
Tier 1 capital to risk-weighted assets   13.1%   6.0%          
Tier 1 capital to adjusted average assets   9.2%   5.0%          
                     

 

 

 

 


The following information was filed by Northwest Indiana Bancorp (NWIN) on Thursday, January 26, 2012 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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