2015 Annual Report
NorthWest Indiana Bancorp
Financial Highlights
(Dollars in thousands, except for per share and ratios data)
Earnings:
December 31,
2015
December 31,
2014
Net revenue (a)
Noninterest expense
Pre-provision profit
Provision for loan losses
Net income
Earnings per common share data:
Net income per share:
Basic
Diluted
Cash dividends declared
Book value
Selected balance sheet data (period-end):
Total assets
Loans
Deposits
Total stockholders' equity
Selected ratios:
Return on Equity
Return on Assets
Common equity tier 1 capital to risk-weighted assets
Tier 1 capital to risk-weighted assets
Total capital to risk-weighted assets
Tier 1 capital to adjusted average assets
34,220
23,616
10,604
954
7,852
2.75
2.75
1.06
28.37
864,893
571,898
714,875
80,909
9.90%
0.96%
12.4%
12.4%
13.5%
9.0%
31,437
21,015
10,422
875
7,394
2.60
2.60
0.97
26.78
775,044
488,153
633,946
76,165
10.14%
0.97%
N/A
13.6%
14.8%
9.2%
(a) Net revenue represents the Bancorp's net interest income, plus noninterest income.
2015 Annual Report
Dear Shareholder:
Success is often a mix of hard work and opportunity, and
both came together to make 2015 another record year for
Peoples Bank. The economy continues to strengthen and
the team at Peoples Bank has worked extremely hard to be
a part of the exciting things happening in our local markets.
Of the Bank’s 11.6% growth, roughly half was organic and
half was inorganic through our acquisition of Liberty
Savings, with locations in Whiting and Winfield, Indiana.
Peoples has the team in place to capture the momentum
that we see locally – and the experience to harness it for
our shareholders. The Bank’s efforts to deepen customer
relationships have resulted in solid growth, and the skilled
integration of two mergers has significantly broadened our
reach. All of this translated into a high return on your equity
over the past three years, which in turn led American Banker magazine to name Peoples as
a Top 200 Community Bank for the 11th consecutive year.
Benjamin Bochnowski
David A. Bochnowski
The banking landscape has seen a world of change in the past decade. New technology, ever-
changing regulations and rapid consolidation are just a few of the challenges facing Peoples.
This company has a proud history of adapting so that we can continue to help our customers
achieve their financial goals, help our employees grow, help our communities thrive, and create
a solid return for our shareholders at the same time.
Our brand, You First Banking, is all about creating value for our stakeholders: our customers,
our employees, our communities, and our shareholders. We do that by engaging our
stakeholders, understanding their goals, partnering with them, and going above and beyond to
help them realize those goals.
To continue to create that value, Peoples Bank has a three-part goal: continue to achieve scale,
strive for elite financial performance, and remain independent. There are more than 200
individuals who come to Peoples Bank every day dedicated to making that goal a reality, and
2015 shows the result of that hard work. The Bank has grown sustainably, and because of that
hard work, the outlook for the future is extremely positive.
NWIN Performance
We are happy to report that NWIN’s stock price ended the year at $30.80, a 16% increase
throughout the year. Moreover, the total return was over 20% for the calendar year; total return
was over 75% for the years 2013-2015. These strong figures were driven by both solid price
appreciation and another dividend increase of $0.08 per share, or 8%, in 2015. Dividend yield
stood at 3.5% for year-end, while NWIN’s book value climbed from $26.78 per share to $28.37.
NWIN’s stock performance continues to compare extremely favorably to peer. In its most recent
quarterly banking summary, Monroe Securities reported an average ROA of 0.75% nationally
and 0.80% in the Midwest region; they also reported average ROE at 7.15% nationally and
7.56% in the Midwest. NWIN outperformed both at an ROA of 0.96% and a ROE of 9.90%,
respectively. Further, the report pegs the average price-to-book ratio at 100% nationally and
94% in the Midwest; NWIN ended the year trading at 115% of book value.
2015 Wrap-Up
Last year, this letter outlined the Bank’s vision for 2015, and we are happy to report positive
results on all fronts under the stewardship of the Bank’s leadership team. Peoples has a
seasoned, forward-thinking team that has led the Bank out of the Great Recession and towards
a promising future. Capital remained solid through the end of the year, with a Tier 1 capital ratio
of 9.0%, providing a stable foundation on which the Bank can continue to grow.
Commercial lending activity was strong in 2015, growing by $59 million during the year.
Commercial loans now comprise over 60% of the Bank’s portfolio, driving a strong margin. This
has been a strategic focus for the Bank in recent years, and the results speak for themselves.
An expanded team of Business Bankers has delivered high-quality growth, as both Non-
Performing Loan and Non-Performing Asset ratios both ended the year near just 1%.
Mortgage lending was similarly strong, with record originations at Peoples Bank. A growing
team of mortgage lenders had more products to offer into a strong local market. As a result,
over $47 million in fixed rate mortgages were sold in the secondary market, which brought a
gain of $1.2 million for the Bank. Loan balances were also boosted by the acquisition of Liberty
Savings in the amount of $28 million, enhancing overall loan yield.
Core funding has been a competitive advantage for Peoples Bank in recent years, and the Bank
built on that success again in 2015. Core funds grew by $71 million, and accounted for roughly
¾ of all deposits at Peoples Bank. These stable funds were a key driver of the Bank’s
performance in 2015, and represent the skill with which we have been able to deliver on our
customers’ expectations.
Income from Wealth Management operations increased by over 3% in 2015, contributing $1.7
million to earnings. Peoples made large investments in order to enhance Wealth Management
platforms and products, at the same time investing in its team so that they are best equipped to
partner with our customers for the future. The Wealth team has grown in recent years, as have
assets under management, which ended the year just over $280 million.
The Bank’s cybersecurity efforts intensified in 2015, with major investments into security
technology and training on the human front. Risks are constantly evolving in the financial
services industry, and the Bank has been quick to react to threats. We take responsibility very
seriously for the safekeeping of our customers’ privacy and personal information. Peoples
continues to expand its electronic banking offerings in order to enhance the customer
experience – but we only do so after a careful vetting process so that our customers can bank
safely and with confidence.
Vision for the Future
Nothing demonstrates ability like results – and another record year in 2015 says volumes about
the entire team at Peoples Bank. With assets at an all-time high and strong fundamentals, the
leadership team has the confidence to push into the future with the strength of the Bank’s You
First brand.
Your company has been undergoing a transition in leadership over the past several years, and
we are in the final stages of that transition. Ben was appointed President of the Bank in early
2015, and he has had responsibility for the overall strategic direction and performance of the
company for the past two years.
Peoples has created a solid formula for success. In 2016, we will continue to focus on the things
we do best. A customer-centric approach will drive growth in business banking, mortgage
lending, retail banking and wealth management. New products and superb service will back that
brand promise in order to deliver a seamless customer experience. Talent development will
ensure we have the right people with the right skills in order to exceed our customers’
expectations.
Growth also means expanding our footprint. The Bank has plans to open a newer, upgraded
Banking Center in Highland that is designed around the customer experience. Combined with
new technologies, this will serve as a model for future banking centers that are built around the
relationships that we have with our customers. Plans to further expand into Porter County are
also in the works.
As customers change, so does Peoples Bank. We are using technology to enhance the
customer experience – not to replace it. In an increasingly complex world, the human side of
banking is more important than ever. Peoples is committed to building those individual
relationships that are the essence of community banking. This is at the core of our culture and
our business. The Bank’s success has been because of the people who are our stakeholders,
and it is because of them that we continue to strive for excellence now and as we move into the
future.
Peoples Bank had a great year in 2015. We want to thank you for your continued support and
confidence as we look forward to 2016.
Sincerely,
David A. Bochnowski
Chairman & Chief Executive Officer
Benjamin Bochnowski
President & Chief Operating Officer
Market Information
Book Value per Share
The Bancorp’s Common Stock is traded in the
over-the-counter market and quoted on the OTC
Bulletin Board. The Bancorp’s stock is not actively
traded. As of February 19, 2016, the Bancorp had
2,856,657 shares of common stock outstanding and
407 stockholders of record. This does not reflect the
number of persons or entities who may hold their
stock in nominee or “street” name through brokerage
firms. Set forth below are the high and low bid prices
during each quarter for the years ended December
31, 2015 and December 31, 2014. The bid prices
reflect inter-dealer prices without retail mark-up,
mark-down or commission and may not necessarily
represent actual transactions. Also set forth is
information concerning the dividends declared by
the Bancorp during the periods reported. Note 11 to
the Financial Statements describes regulatory limits
on the Bancorp’s ability to pay dividends.
Year Ended
December 31, 2015
Year Ended
December 31, 2014
Per Share Prices
High
Low
Dividends
Declared Per
Common Share
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
$
27.75
27.35
31.99
31.10
$
27.95
26.90
27.10
26.50
$
26.50
26.40
26.25
29.26
$
25.00
24.88
25.75
25.16
$
0.25
0.27
0.27
0.27
$
0.22
0.25
0.25
0.25
$28.37
$26.78
$23.83
$23.50
$22.20
2011
2012
2013
2014
2015
Basic Earnings per Share
$2.41
$2.50
$2.75
$2.60
$1.90
2011
2012
2013
2014
2015
Dividends per Share
$1.06
$0.97
$0.85
$0.72
$0.60
2011
2012
2013
2014
2015
2015 Board of Directors
2015 Board Committees
David A. Bochnowski, Director since 1977
Chairman, Chief Executive Officer of the Bancorp
Stanley E. Mize, Director since 1997
Retired; former President of Stan Mize Towne & Country
Auto Sales, Inc.
James L. Wieser, Director since 1999
Attorney and Senior Partner, Wieser & Wyllie, LLP
Edward J. Furticella, Director since 2000
Former Executive Vice President and CFO of the
Bancorp; currently Professor, Department Head of the
Accounting Program and Director of the Masters of
Accountancy Program at Purdue University Calumet
Joel Gorelick, Director since 2000
Director Indiana Economics Development Corporation
Past Chairman/Director Lake County Economic Alliance
Kenneth V. Krupinski, Director since 2003
Certified Public Accountant, Swartz Retson, P.C.
Anthony M. Puntillo, D.D.S., M.S.D., Director since
2004
Orthodontist, CEO of Puntillo and Crane Orthodontics,
P.C.
Donald P. Fesko, Director since 2005
Chief Executive Officer, Community Hospital
Amy W. Han, Ph.D., Director since 2008
Indiana University School of Medicine – Northwest
Danette Garza, Director since 2013
Attorney At Law, Certified Public Accountant,
Owner of Continental Languages, LLC
Benjamin J. Bochnowski, Director since 2014
President, Chief Operating Officer of the Bancorp
Leroy F. Cataldi, P.D., Director Emeritus
Lourdes M. Dennison, Director Emeritus
Martin A. Dybel, Director Emeritus
John Freyek, Director Emeritus
Gloria C. Gray-Weissman, Director Emeritus
Compensation and Benefits
Kenneth V. Krupinski, Chairman
Donald P. Fesko
Amy W. Han
Stanley E. Mize
Executive Committee
David A. Bochnowski, Chairman
Edward J. Furticella
Joel Gorelick
Stanley E. Mize
James L. Wieser
Nominating and Corporate Governance
Stanley E. Mize, Chairman
Donald P. Fesko
Edward J. Furticella
Danette Garza
Amy W. Han
Kenneth V. Krupinski
Anthony M. Puntillo
James L. Wieser
Risk Management
Edward J. Furticella, Chairman
Danette Garza
Kenneth V. Krupinski
Stanley E. Mize
Anthony M. Puntillo
Strategic Planning
James L. Wieser, Chairman
Edward J. Furticella
Danette Garza
Joel Gorelick
Kenneth V. Krupinski
Stanley E. Mize
Anthony M. Puntillo
Wealth Management
Donald P. Fesko, Chairman
Joel Gorelick
Amy W. Han
Officers of NorthWest Indiana
Bancorp and Peoples Bank
Officers of Peoples Bank
David A. Bochnowski
Chairman, Chief Executive Officer
Benjamin J. Bochnowski
President, Chief Operating Officer
John J. Diederich
Executive Vice President
Robert T. Lowry
Executive Vice President, Chief Financial Officer
and Treasurer
Leane E. Cerven
Executive Vice President, General Counsel
and Corporate Secretary
Tanya A. Leetz
Senior Vice President, Chief Information
and Technology Officer
Terrence M. Quinn
Senior Vice President, Chief Wealth
Management Officer
Todd M. Scheub
Senior Vice President, Chief Lending Officer
CORPORATE HEADQUARTERS
9204 Columbia Avenue
Munster, Indiana 46321
(219) 836-4400
(SUBSIDIARY OF NORTHWEST INDIANA BANCORP)
Map represents the Peoples
Banking Center Network.
Stock Transfer Agent
The Bank acts as the transfer agent
for the Bancorp’s common stock.
Independent Auditors
Plante & Moran, PLLC
10 S. Riverside Plaza, 9th Floor
Chicago, Illinois 60606-3564
Special Legal Counsel
Barnes & Thornburg LLP
11 S. Meridian Street
Indianapolis, Indiana 46204
ibankpeoples.com
Annual Stockholders Meeting
The Annual Meeting of Stockholders
of NorthWest Indiana Bancorp will be
held at 8:30am on April 28, 2016 at:
Peoples Bank Corporate Center
9204 Columbia Avenue,
Munster, Indiana 46321
Annual Report on Form 10-K
A copy of the Annual Report on Form
10-K, for the NorthWest Indiana Bancorp,
as filed with the Securities and Exchange
Commission, will be furnished without
charge to stockholders as of the record
date upon written request to the:
Corporate Secretary
NorthWest Indiana Bancorp
9204 Columbia Avenue
Munster, Indiana 46321
Member FDIC