Exhibit 99.1.

 

FOR IMMEDIATE RELEASE   FOR FURTHER INFORMATION
January 22, 2020
 
  CONTACT BENJAMIN BOCHNOWSKI
    (219) 853-7575

 

NORTHWEST INDIANA BANCORP

ANNOUNCES EARNINGS FOR THE TWELVE MONTHS AND QUARTER ENDED

DECEMBER 31, 2019   

 

Munster, Indiana - NorthWest Indiana Bancorp (the “Bancorp” or “NWIN”), the holding company for Peoples Bank SB (the “Bank”), reported record net income of $12.1 million, or $3.53 per share for the twelve months ended December 31, 2019. Net income for the twelve months ended December 31, 2019, increased by $2.8 million (29.6%), from the twelve months ended December 31, 2018. For the twelve months ended December 31, 2019, the return on average assets (ROA) was 0.94% and the return on average equity (ROE) was 9.54%. In connection with the successful acquisition of AJS Bancorp, Inc., (“AJSB”), which closed on January 24, 2019, the Bancorp incurred one-time expenses of approximately $2.1 million, as expansion into the Chicagoland market continued.

 

Excluding the one-time AJSB acquisition costs, the Bancorp’s net income, as adjusted, was $13.9 million, or $4.07 per share, for the twelve months ended December 31, 2019. Excluding these same one-time AJSB acquisition costs, the Bancorp’s ROA, as adjusted, was 1.08% and its ROE, as adjusted, was 10.99% for 2019. See Table 1 below for a reconciliation of these non-GAAP figures to the Bancorp’s GAAP figures.

 

For the quarter ended December 31, 2019, the Bancorp’s net income totaled $2.3 million, or $0.66 per share. Net income for the quarter ended December 31, 2019, decreased by $366 thousand (13.9%), from the quarter ended December 31, 2018. For the fourth quarter of 2019, the ROA was 0.69% and the ROE was 6.83%.

 

During the twelve months ended December 31, 2019, total assets increased by $232.6 million (21.2%), with interest-earning assets increasing by $204.2 million (20.1%). At December 31, 2019, interest-earning assets totaled $1.2 billion compared to $1.0 billion at December 31, 2018. Earning assets represented 92.0% of total assets at December 31, 2019 and 92.9% of total assets at December 31, 2018. The increase in total assets and interest earning assets for the twelve months was primarily the result of the completion of the acquisition of AJSB, as well as organic growth.

 

“Northwest Indiana Bancorp is proud to announce another year of record earnings and one of the strongest year-over-year earnings increases in company history. Earnings were up 29.6% year-over-year, as we successfully integrated the second acquisition in our Illinois market entry strategy. The Bank effectively navigated a decreasing interest rate environment and took advantage of continued expanding economic conditions throughout the year,” said Benjamin Bochnowski, president and chief executive officer. “We continued to redeploy liquidity into relationship-driven commercial loans. We also acted on opportunities to improve asset quality, and continue to execute on efficiency strategies that support scaling operations and enhance customer service,” added Bochnowski. “Additionally, we are excited to celebrate our 110 year tradition of community banking this January. We have had the sincere honor of serving our customers and communities for over a century. As we continue to grow, we are committed to service and excellence for the long term,” he added.

 

“The 2019 annual record earnings were driven by net interest income, increasing 25.6%, and noninterest income, increasing 17.3%. The increase in net interest income is attributable to a strategy of growing the commercial loan portfolio organically and core deposits from the markets we serve. In addition, with the decline in market interest rates, the Bancorp’s management is actively managing the mix of its assets and liabilities, asset yields and funding costs to lessen the impact to the net interest margin. The increase in noninterest income benefited from continued expansion of mortgage banking, wealth management, and retail banking services,” said Robert Lowry, executive vice president and chief financial officer. “The increased earnings capacity and improved asset quality allows the Bancorp to create organic capital to execute on its strategic objectives. At the end of 2019, the Bancorp’s tangible capital ratio stood at 10.1%,” said Lowry.

 

 

 

 

Net Interest Income

Net interest income was $43.2 million for the twelve months ended December 31, 2019, an increase of $8.8 million (25.6%), compared to $34.4 million for the twelve months ended December 31, 2018. The Bancorp’s net interest margin on a tax-adjusted basis was 3.73% for the twelve months ended December 31, 2019, compared to 3.81% for the twelve months ended December 31, 2018. The increased net interest income for the twelve months was primarily the result of the acquisitions of AJSB and First Personal Financial Corp. (“First Personal”), organic loan growth, and the recognition of one-time gains from excess reserves associated with purchase credit impaired loans from the former acquisitions of First Federal Savings & Loan Association of Hammond and Liberty Savings Bank. The one-time gains totaled $429 thousand and were the result of being able to work out purchase credit impaired loans with better results than were originally anticipated at the time of acquisition. Net interest income was $10.6 million for the quarter ended December 31, 2019, an increase of $932 thousand (9.7%), compared to $9.6 million for the quarter ended December 31, 2018. The Bancorp’s net interest margin on a tax-adjusted basis was 3.53% for the quarter ended December 31, 2019, compared to 3.96% for the quarter ended December 31, 2018. The Bancorp’s lower net interest margin was impacted by the lower interest rate environment and increased balance sheet liquidity.

 

Noninterest Income

Noninterest income from banking activities totaled $10.7 million for the twelve months ended December 31, 2019, compared to $9.1 million for the twelve months ended December 31, 2018, an increase of $1.6 million or 17.3%. Noninterest income from banking activities totaled $2.5 million for the quarter ended December 31, 2019, compared to $2.2 million for the quarter ended December 31, 2018, an increase of $311 thousand or 14.0%. The increase in noninterest income for the twelve months and the quarter is the result of the Bancorp’s continued focus on competitively pricing its banking services as well as increasing mortgage banking and wealth management activities. The increase in the cash value of bank owned life insurance income was primarily the result of cash surrender value appreciation related to the policies acquired through AJSB and First Personal. The increase in other noninterest income was primarily the result of gains made on the sale of fixed assets.

 

Noninterest Expense

Noninterest expense totaled $37.4 million for the twelve months ended December 31, 2019, compared to $31.4 million for the twelve months ended December 31, 2018, an increase of $6.0 million or 19.1%. Noninterest expense totaled $9.4 million for the quarter ended December 31, 2019, compared to $8.5 million for the quarter ended December 31, 2018, an increase of $953 thousand or 11.3%. For the twelve months ended December 31, 2019, one-time expenses of $2.1 million have been incurred in connection with the acquisition of AJSB. The increase in compensation and benefits for the twelve months and the quarter ended December 31, 2019, is primarily the result of increased compensation due to the acquisition of AJSB. Additionally, increases to compensation and benefits can be attributed to management’s continued focus on talent management and retention. The increase in occupancy and equipment for the twelve months ended December 31, 2019, is primarily related to the AJSB acquisition and the procurement of related assets. The increase in data processing expense for the twelve months ended December 31, 2019, was primarily related to the costs associated with data conversion for the acquisition of AJSB and increased system utilization. The increase in marketing expense for the twelve months ended December 31, 2019, is a result of the acquisition of AJSB as well as the Bancorp’s regular marketing initiatives. The decrease in federal deposit insurance premiums for the twelve months ended December 31, 2019, is the result of the application of the Small Bank Assessment Credit that was applied to the second and third quarter assessment periods. The increase in other operating expenses was primarily related to the acquisition of AJSB.

 

The Bancorp’s efficiency ratio was 69.46% for the twelve months ended December 31, 2019, compared to 72.21% for the twelve months ended December 31, 2018. Excluding the one-time acquisition expenses associated with the AJSB transaction, the efficiency ratio would have further decreased to 65.53% for the twelve months ended December 31, 2019. See Table 1 below for a reconciliation of the non-GAAP figure to the Bancorp’s GAAP efficiency ratio. The efficiency ratio is determined by dividing total noninterest expense by the sum of net interest income and total noninterest income for the period. The Bancorp’s efficiency ratio was 71.81% for the quarter ended December 31, 2019, compared to 71.30% for the quarter ended December 31, 2018.

 

Lending

The Bancorp’s loan portfolio totaled $906.9 million at December 31, 2019, compared to $764.4 million at December 31, 2018, an increase of $142.5 million or 18.6%. The increase is the result of the acquisition of AJSB, as well as organic loan portfolio growth net of loan payoffs. During the twelve months ended December 31, 2019, the Bancorp originated $249.9 million in new commercial loans. During the twelve months ended December 31, 2019, the Bancorp originated $74.9 million in new fixed rate mortgage loans for sale, compared to $55.5 million during the twelve months ended December 31, 2018. The loan portfolio represents 74.2% of earning assets and is comprised of 57.9% commercial related credits.

 

 

 

 

Investing

The Bancorp’s securities portfolio totaled $277.2 million at December 31, 2019, compared to $241.8 million at December 31, 2018, an increase of $35.5 million or 14.7%. The securities portfolio represents 22.7% of earning assets and provides a consistent source of liquidity and earnings to the Bancorp. Cash and cash equivalents totaled $47.3 million at December 31, 2019, compared to $17.1 million at December 31, 2018, an increase of $30.1 million or 175.7%. The increase in cash and cash equivalents is the result of the acquisition of AJSB, strong demand for deposit products and payments from the loan portfolio.

 

Funding

At December 31, 2019, core deposits totaled $826.7 million, compared to $670.9 million at December 31, 2018, an increase of $155.8 million or 23.2%. The increase is the result of the acquisition of AJSB as well as the Bancorp’s efforts to maintain core deposits. Core deposits include checking, savings, and money market accounts and represented 71.6% of the Bancorp’s total deposits at December 31, 2019. The increase in these core deposits is a result of the AJSB acquisition, and management’s sales efforts along with customer preferences for competitively priced short-term deposits. At December 31, 2019, balances for certificates of deposit totaled $327.7 million, compared to $258.9 million at December 31, 2018, an increase of $68.8 million or 26.6%. In addition, at December 31, 2019, borrowings and repurchase agreements totaled $25.5 million, compared to $54.6 million at December 31, 2018, a decrease of $29.1 million or 53.3%. The decrease in short-term borrowings was a result of FHLB advance maturities.

 

Asset Quality

At December 31, 2019, non-performing loans totaled $7.4 million, compared to $6.9 million at December 31, 2018, an increase of $457 thousand or 6.6%. The Bancorp’s ratio of non-performing loans to total loans was 0.81% at December 31, 2019, compared to 0.90% at December 31, 2018. The increase in the nonperforming loans for the twelve months ending December 31, 2019, is due primarily to the residential real estate loans received from the AJSB acquisition. The Bancorp’s ratio of non-performing assets to total assets was 0.72% at December 31, 2019, compared to 0.97% at December 31, 2018. The improvement in the non-performing assets ratio is related to management’s focus on improving asset quality. During 2019, securities in nonaccrual status decreased by 48% to $1.1 million and foreclosed real estate decreased by 33% to $1.1 million.

 

For the twelve months ended December 31, 2019, $2.6 million in provisions to the ALL were required, compared to $1.3 million for the twelve months ended December 31, 2018, an increase of $1.3 million or 97.6%. For the twelve months ended December 31, 2019, charge-offs, net of recoveries, totaled $1.5 million. At December 31, 2019, the allowance for loan losses totaled $9.0 million and is considered adequate by management. During the three months ended December 31, 2019, net charge-offs of $1.4 million were recorded. Included in the $1.4 million, was a charge-off of $965 thousand to one commercial and industrial borrower with two loans. The Bancorp’s increased earnings level was able to adequately provide for the additional 2019 provisions to the ALL. The allowance for loan losses as a percentage of total loans was 0.99% at December 31, 2019, compared to 1.04% at December 31, 2018. The allowance for loan losses as a percentage of non-performing loans, or coverage ratio, was 121.8% at December 31, 2019, compared to 115.1% at December 31, 2018.

 

Management also considers reserves that are not part of the ALL that have been established from acquisition activity. The Bancorp acquired loans for which there was evidence of credit quality deterioration since origination and it was determined that it was probable that the Bancorp would be unable to collect all contractually required principal and interest payments. At December 31, 2019, total purchase credit impaired loan accretable and nonaccretable discount totaled $2.2 million compared to $3.1 million at December 31, 2018. Additionally, the Bancorp has acquired loans where there was no evidence of credit quality deterioration since origination and has marked these loans to their fair values. As part of the fair value of loans receivable, a net fair value discount was established for loans acquired and totaled $3.8 million at December 31, 2019, compared to $1.5 million at December 31, 2018. The increase in the fair value discount and purchase credit impaired discounts, as of December 31, 2019, is the result of the AJSB acquisition. When these additional reserves are included on a proforma basis, the allowance for loan losses as a percentage of total loans was 1.66% at December 31, 2019, and the allowance for loan losses as a percentage of non-performing loans, or coverage ratio, was 203.56% at December 31, 2019. See Table 1 below for a reconciliation of these non-GAAP figures to the Bancorp’s GAAP figures.

 

 

 

 

Capital Adequacy

At December 31, 2019, shareholders’ equity stood at $134.1 million, and tangible capital represented 10.1% of total assets. The Bancorp’s regulatory capital ratios at December 31, 2019, were 12.7% for total capital to risk-weighted assets, 11.8% for both common equity tier 1 capital to risk-weighted assets and tier 1 capital to risk-weighted assets, and 8.5% 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 $38.85 per share at December 31, 2019.

 

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, electronic and wealth management financial services from its 22 locations in Lake and Porter Counties in Northwest Indiana and South Chicagoland. NorthWest Indiana Bancorp’s common stock is quoted on the OTC Pink Marketplace and 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

This press release may contain forward-looking statements regarding the financial performance, business prospects, growth and operating strategies of NWIN. For these statements, NWIN claims the protections of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Statements in this communication should be considered in conjunction with the other information available about NWIN, including the information in the filings NWIN makes with the SEC. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward-looking statements are based on management’s expectations and are subject to a number of risks and uncertainties. Forward-looking statements are typically identified by using words such as “anticipate,” “estimate,” “project,” “intend,” “plan,” “believe,” “will” and similar expressions in connection with any discussion of future operating or financial performance.

 

Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include: difficulties and delays in fully realizing cost savings and other benefits from the AJSB acquisition; changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; customer acceptance of NWIN’s products and services; customer borrowing, repayment, investment, and deposit practices; customer disintermediation; the introduction, withdrawal, success, and timing of business initiatives; competitive conditions; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with mergers, acquisitions, and divestitures; economic conditions; and the impact, extent, and timing of technological changes, capital management activities, and other actions of the Federal Reserve Board and legislative and regulatory actions and reforms.

 

Disclosure Regarding Non-GAAP Measures

This document refers to certain financial measures that are identified as non-GAAP. The Bancorp believes that the non-GAAP measures are helpful to investors to compare normalized, integral operations of the Bancorp removed from one-time events such as purchase accounting impacts and cost of acquisition. 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 measures identified herein and their most comparable GAAP measures.

 

 

 

NorthWest Indiana Bancorp

 

Financial Report

 
                                 

Key Ratios

 

Three Months Ended

   

Twelve Months Ended

 
   

December 31,

           

December 31,

         
   

2019

   

December 31,

   

2019

   

December 31,

 
   

(Unaudited)

   

2018

   

(Unaudited)

   

2018

 

Return on equity

    6.83 %     10.96 %     9.54 %     9.88 %

Return on assets

    0.69 %     0.97 %     0.94 %     0.93 %

Basic earnings per share

  $ 0.66     $ 0.86     $ 3.53     $ 3.17  

Diluted earnings per share

  $ 0.66     $ 0.86     $ 3.53     $ 3.17  

Yield on loans

    4.91 %     5.02 %     5.07 %     4.71 %

Yield on security investments

    2.49 %     2.94 %     2.64 %     2.86 %

Total yield on earning assets

    4.28 %     4.51 %     4.43 %     4.22 %

Cost of deposits

    0.81 %     0.56 %     0.75 %     0.45 %

Cost of repurchase agreements

    1.57 %     1.50 %     1.80 %     1.38 %

Cost of borrowings

    2.61 %     2.71 %     2.67 %     2.25 %

Total cost of funds

    0.84 %     0.72 %     0.80 %     0.57 %

Net interest margin - tax equivalent

    3.53 %     3.96 %     3.73 %     3.81 %

Noninterest income / average assets

    0.76 %     0.82 %     0.83 %     0.91 %

Noninterest expense / average assets

    2.83 %     3.10 %     2.91 %     3.13 %

Net noninterest margin / average assets

    -2.07 %     -2.28 %     -2.08 %     -2.22 %

Efficiency ratio

    71.81 %     71.30 %     69.46 %     72.21 %

Effective tax rate

    6.46 %     13.30 %     12.69 %     13.28 %

Dividend declared per common share

  $ 0.31     $ 0.30       1.23     $ 1.19  
                                 
   

December 31,

                         
   

2019

   

December 31,

                 
   

(Unaudited)

   

2018

                 

Net worth / total assets

    10.09 %     9.26 %                

Book value per share

  $ 38.85     $ 33.50                  

Non-performing assets to total assets

    0.72 %     0.97 %                

Non-performing loans to total loans

    0.81 %     0.90 %                

Allowance for loan losses to non-performing loans

    122.05 %     115.12 %                

Allowance for loan losses to loans outstanding

    0.99 %     1.04 %                

Foreclosed real estate to total assets

    0.08 %     0.15 %                
                                 

Consolidated Statements of Income

                               

(Dollars in thousands)

 

Three Months Ended

   

Twelve Months Ended

 
   

December 31,

           

December 31,

         
   

2019

   

December 31,

   

2019

   

December 31,

 
   

(Unaudited)

   

2018

   

(Unaudited)

   

2018

 

Interest income:

                               

Loans

  $ 11,092     $ 9,589     $ 44,455     $ 32,392  

Securities & short-term investments

    1,947       1,797       7,795       7,058  

Total interest income

    13,039       11,386       52,250       39,450  

Interest expense:

                               

Deposits

    2,323       1,268       8,359       3,799  

Borrowings

    152       486       733       1,292  

Total interest expense

    2,475       1,754       9,092       5,091  

Net interest income

    10,564       9,632       43,158       34,359  

Provision for loan losses

    1,262       358       2,584       1,308  

Net interest income after provision for loan losses

    9,302       9,274       40,574       33,051  

Noninterest income:

                               

Fees and service charges

    1,129       1,036       4,737       3,866  

Wealth management operations

    489       443       1,915       1,696  

Gain on sale of loans held-for-sale, net

    562       598       1,885       1,619  

Increase in cash value of bank owned life insurance

    (66 )     45       688       494  

Gain on sale of securities, net

    102       136       621       1,200  

Benefit from bank owned life insurance

    -       -       205       -  

Gain on sale of foreclosed real estate

    (5 )     (100 )     78       54  

Other

    324       66       541       170  

Total noninterest income

    2,535       2,224       10,670       9,099  

Noninterest expense:

                               

Compensation and benefits

    5,284       4,367       19,617       16,412  

Occupancy and equipment

    1,026       1,129       4,548       3,653  

Data processing

    214       391       2,967       2,467  

Marketing

    143       184       926       707  

Federal deposit insurance premiums

    14       160       300       410  

Other

    2,725       2,222       9,030       7,734  

Total noninterest expense

    9,406       8,453       37,388       31,383  

Income before income taxes

    2,431       3,045       13,856       10,767  

Income tax expenses

    157       405       1,759       1,430  

Net income

  $ 2,274     $ 2,640     $ 12,097     $ 9,337  

 

 

 

NorthWest Indiana Bancorp

Financial Report

 

Balance Sheet Data

(Dollars in thousands)

   

December 31,

                         
   

2019

   

December 31,

   

Change

   

Mix

 
   

(Unaudited)

   

2018

   

%

   

%

 

Total assets

  $ 1,328,722     $ 1,096,158       21.2 %        

Cash & cash equivalents

    47,258       17,139       175.7 %        

Securities - available for sale

    277,219       241,768       14.7 %        
                                 

Loans receivable:

                               
Construction and land development     87,710       64,433       36.1 %     9.7 %
1-4 first liens     299,333       223,323       34.0 %     33.0 %
Multifamily     51,286       47,234       8.6 %     5.7 %
Commercial real estate     283,108       253,104       11.9 %     31.2 %
Commercial business     103,088       103,439       -0.3 %     11.4 %
HELOC     49,181       45,483       8.1 %     5.4 %
Consumer     1,193       643       85.5 %     0.1 %
Manufactured Homes     15,939       5,400               1.8 %
Farmland     227       240       -5.4 %     0.0 %
Government     15,804       21,101       -25.1 %     1.7 %
Total loans     906,869       764,400       18.6 %     100.0 %
                                 

Deposits:

                               
Core deposits:                                
Noninterest bearing checking     172,094       127,277       35.2 %     14.9 %
Interest bearing checking     220,230       214,400       2.7 %     19.1 %
Savings     209,945       160,490       30.8 %     18.2 %
MMDA     224,398       168,727       33.0 %     19.4 %
Total core deposits     826,667       670,894       23.2 %     71.6 %
Certificates of deposit     327,703       258,892       26.6 %     28.4 %
Total deposits     1,154,370       929,786       24.2 %     100.0 %
                                 

Borrowings and repurchase agreements

    25,499       54,628       -53.3 %        

Stockholder's equity

    134,103       101,464       32.2 %        
                                 
                                 

Asset Quality

                               

(Dollars in thousands)

 

December 31,

                         
   

2019

   

December 31,

   

Change

         
   

(Unaudited)

   

2018

   

%

         

Nonaccruing loans

  $ 6,507     $ 6,595       -1.3 %        

Accruing loans delinquent more than 90 days

    866       321       169.8 %        

Securities in non-accrual

    1,076       2,050       -47.5 %        

Foreclosed real estate

    1,083       1,627       -33.4 %        

Total nonperforming assets

    9,532       10,593       -10.0 %        
                                 

Allowance for loan losses (ALL):

                               

ALL specific allowances for impaired loans

    165       246       -32.9 %        

ALL general allowances for loan portfolio

    8,834       7,716       14.5 %        

Total ALL

    8,999       7,962       13.0 %        
                                 

Troubled Debt Restructurings:

                               

Nonaccruing troubled debt restructurings, non-compliant (1) (2)

    163       -       0.0 %        

Nonaccruing troubled debt restructurings, compliant (2)

    161       125       28.8 %        

Accruing troubled debt restructurings

    1,776       1,906       -6.8 %        

Total troubled debt restructurings

    2,100       2,031       3.4 %        

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

(2) included in nonaccruing loan balances presented above

 

   

At December 31, 2019

                 
   

(Unaudited)

                 

Capital Adequacy

 

Actual

   

Required to be

                 
   

Ratio

   

well capitalized(1)

                 
                                 

Capital Adequacy Bancorp

                               

Common equity tier 1 capital to risk-weighted assets

    11.8 %     N/A                  

Tier 1 capital to risk-weighted assets

    11.8 %     N/A                  

Total capital to risk-weighted assets

    12.7 %     N/A                  

Tier 1 capital to adjusted average assets

    8.5 %     N/A                  
                                 

Capital Adequacy Bank

                               

Common equity tier 1 capital to risk-weighted assets

    11.6 %     6.5 %                

Tier 1 capital to risk-weighted assets

    11.6 %     8.0 %                

Total capital to risk-weighted assets

    12.5 %     10.0 %                

Tier 1 capital to adjusted average assets

    8.3 %     5.0 %                

 


 

 

 

 

Quarter-to-Date

                                               

(Dollars in thousands)

 

Average Balances, Interest, and Rates

 
   

December 31, 2019

   

December 31, 2018

 
   

Average
Balance

   

Interest

   

Rate (%)

   

Average
Balance

   

Interest

   

Rate (%)

 

ASSETS

                                               

Interest bearing deposits in other financial institutions

  $ 34,426     $ 166       1.93     $ 1,008     $ 12       4.76  

Federal funds sold

    6,235       55       3.53       445       10       8.99  

Certificates of deposit in other financial institutions

    2,170       15       2.76       3,201       21       2.62  

Securities available-for-sale

    268,868       1,672       2.49       236,791       1,720       2.91  

Securities held-to-maturity

    -               -       -               -  

Loans receivable

    904,011       11,092       4.91       759,730       9,589       5.05  

Federal Home Loan Bank stock

    3,912       39       3.99       3,331       34       4.08  

Total interest earning assets

    1,219,622     $ 13,039       4.28       1,004,506     $ 11,386       4.53  

Cash and non-interest bearing deposits in other financial institutions

    22,470                       11,130                  

Allowance for loan losses

    (9,310 )                     (7,798 )                

Other noninterest bearing assets

    94,418                       79,316                  

Total assets

  $ 1,327,200                     $ 1,087,154                  
                                                 

LIABILITIES AND STOCKHOLDERS' EQUITY

                                               

Total deposits

  $ 1,152,045     $ 2,323       0.81     $ 905,834     $ 1,268       0.56  

Repurchase agreements

    13,794       54       1.57       13,881       52       1.50  

Borrowed funds

    15,043       98       2.61       57,691       434       3.01  

Total interest bearing liabilities

    1,180,882     $ 2,475       0.84       977,406     $ 1,754       0.72  

Other noninterest bearing liabilities

    13,177                       13,377                  

Total liabilities

    1,194,059                       990,783                  

Total stockholders' equity

    133,141                       96,371                  

Total liabilities and stockholders' equity

  $ 1,327,200                     $ 1,087,154                  
                                                 
                                                 

Return on average assets

    0.69 %                     0.97 %                

Return on average equity

    6.83 %                     10.96 %                

Net interest margin (average earning assets)

    3.46 %   $ 10,564               3.84 %   $ 9,632          

Net interest margin (average earning assets) - tax equivalent

    3.53 %                     4.03 %                

 

Year-to-Date

                                               

(Dollars in thousands)

 

Average Balances, Interest, and Rates

 
   

December 31, 2019

   

December 31, 2018

 
   

Average
Balance

   

Interest

   

Rate (%)

   

Average
Balance

   

Interest

   

Rate (%)

 

ASSETS

                                               

Interest bearing deposits in other financial institutions

  $ 33,502     $ 604       1.80     $ 3,394     $ 78       2.30  

Federal funds sold

    5,170       178       3.44       901       40       4.44  

Certificates of deposit in other financial institutions

    2,154       65       3.02       2,602       59       2.27  

Securities available-for-sale

    257,003       6,773       2.64       238,375       6,730       2.82  

Loans receivable

    876,611       44,455       5.07       684,159       32,392       4.73  

Federal Home Loan Bank stock

    3,899       175       4.49       3,131       151       4.82  

Total interest earning assets

    1,178,339     $ 52,250       4.43       932,562     $ 39,450       4.23  

Cash and non-interest bearing deposits in other financial institutions

    23,237                       10,813                  

Allowance for loan losses

    (8,660 )                     (7,512 )                

Other noninterest bearing assets

    93,048                       66,045                  

Total assets

  $ 1,285,964                     $ 1,001,908                  
                                                 

LIABILITIES AND STOCKHOLDERS' EQUITY

                                               

Total deposits

  $ 1,108,687     $ 8,359       0.75     $ 839,479     $ 3,799       0.45  

Repurchase agreements

    12,928       233       1.80       12,754       176       1.38  

Borrowed funds

    18,702       500       2.67       44,627       1,116       2.50  

Total interest bearing liabilities

    1,140,317     $ 9,092       0.80       896,860     $ 5,091       0.57  

Other noninterest bearing liabilities

    18,802                       10,588                  

Total liabilities

    1,159,119                       907,448                  

Total stockholders' equity

    126,845                       94,460                  

Total liabilities and stockholders' equity

  $ 1,285,964                     $ 1,001,908                  
                                                 
                                                 

Return on average assets

    0.94 %                     0.93 %                

Return on average equity

    9.54 %                     9.88 %                

Net interest margin (average earning assets)

    3.66 %   $ 43,158               3.68 %   $ 34,359          

Net interest margin (average earning assets) - tax equivalent

    3.73 %                     3.87 %                

 

 

 

 

Table 1 - Reconciliation of the Non-GAAP Earnings and Performance Ratios

                 
                         
           

Twelve Months

         
           

Ended

         
           

December 31,

         

($ in thousands)

         

2019

         
           

(Unaudited)

         

GAAP net Income

          $ 12,097          

GAAP income tax expense

            1,759          

GAAP income before income taxes

            13,856          

One-time acquisition costs

            2,113          

Pro forma income before income taxes

            15,969          

Pro forma income taxes

            2,027          

Pro forma net income

          $ 13,942          

Pro forma net income change

            49.3 %        
                         

($ in thousands, except per share data)

 

(Unaudited)

 

For the twelve months ended, December 31, 2019

 

GAAP

   

One-time acqusition costs - tax effected

   

Non-GAAP

 

Net income

  $ 12,097     $ 1,845     $ 13,942  

Weighted average common shares outstanding

    3,425,056               3,425,056  

Earnings per share

  $ 3.53             $ 4.07  
                         
                         

($ in thousands)

 

(Unaudited)

 

For the twelve months ended, December 31, 2019

 

GAAP

   

One-time acquisition costs - tax effected

   

Non-GAAP

 

Net income

  $ 12,097     $ 1,845     $ 13,942  

Average assets

  $ 1,285,964             $ 1,285,964  

ROA

    0.94 %             1.08 %
                         
                         

($ in thousands)

 

(Unaudited)

 

For the twelve months ended, December 31, 2019

 

GAAP

   

One-time acquisition costs - tax effected

   

Non-GAAP

 

Net income

  $ 12,097     $ 1,845     $ 13,942  

Average equity

  $ 126,845             $ 126,845  

ROE

    9.54 %             10.99 %
                         

($ in thousands)

 

(Unaudited)

 

For the twelve months ended, December 31, 2019

 

GAAP

   

One-time acquisition costs

   

Non-GAAP

 

Noninterest expense

    37,388       (2,113 )     35,275  

Interest income

    52,250               52,250  

Interest expense

    9,092               9,092  

Noninterest income

    10,670               10,670  

Efficiency ratio

    69.46 %             65.53 %

 

 

 

 

($ in thousands)

 

(Unaudited)

 

For the twelve months ended, December 31, 2019

 

GAAP

   

One-time acquisition costs - tax effected

   

Non-GAAP

 

Noninterest expense

  $ 37,388     $ (2,113 )   $ 35,275  

Average assets

  $ 1,285,964             $ 1,285,964  

Non-interest expense as % of average assets

    2.91 %             2.74 %
                         
                         

($ in thousands)

 

(Unaudited)

 

For the twelve months ended, December 31, 2019

 

GAAP

   

Additional reserves not part of the ALL

   

Non-GAAP

 

Allowance for loan losses (ALL)

  $ 8,999     $ 6,042     $ 15,041  

Total loans

  $ 906,869             $ 906,869  

ALL to total loans

    0.99 %             1.66 %
                         

($ in thousands)

 

(Unaudited)

 

For the twelve months ended, December 31, 2019

 

GAAP

   

Additional reserves not part of the ALL

   

Non-GAAP

 

Allowance for loan losses (ALL)

  $ 8,999     $ 6,042     $ 15,041  

Non-performing loans

  $ 7,373             $ 7,373  

ALL to nonperfroming loans (coverage ratio)

    122.05 %             204.00 %

 

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