Finward Bancorp · NASDAQ:FNWD
Finward Bancorp — NorthWest Indiana Bancorp — Investor Presentation (May 2020)
30 slides from Finward Bancorp's investor presentation, May 15, 2020
Slide 1: First Quarter 2020 Investor Presentation
BANKING FIRST QUARTER 2020 INVESTOR PRESENTATION
Slide 2: Keeps Getting Better
KEEPS GETTING BETTER STABILITY INTEGRITY COMMUNITY EXCELLENCE
Slide 3: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS ‘This presentation may contain forwardlooking stetements regarding the financiel performance, business prospects, growth and operating strategies of NorthWest Indiana Bancorp ("NWN") For these statements, NWIN claims the protections ofthe safe harbor for forward:ocking Sta
Slide 4: Disclosures Regarding Non-GAAP Measures
‘Annual Meeting DISCLOSURES REGARDING NON-GAAP MEASURES ‘This presentation refers to certain financial measures that ae identified as non-GAAP. NWIN believes that these non-GAAP measures are helpful ‘0 Investors to better understand the NWIN's asses, earnings, and shareholders’ equity at the date of
Slide 5: Overview & Introduction
OVERVIEW & INTRODUCTION STABILITY INTEGRITY COMMUNITY EXCELLENCE
Slide 6: Who We Are
‘Annual Meeting WHO WE ARE MISSION Peoples Bank is committed to helping our communities and customers be more successful VALUES STABILITY INTEGRITY COMMUNITY EXCELLENCE Customer experience Ethics Genuine concern Exceed expectations Risk management Trust Measurable impact Better, not just bigger Reli
Slide 7: Where We Are
WHERE WE ARE Full-service, broadly-based community financial institution offering consumer, business, and wealth management services — in person and digitally 22 full-service Banking Centers 267 FTE $1.3 bn in Assets Accolades* + Top 200 Community Bank for 15 consecutive years + Best Bank to Work Fo
Slide 8: Community Impact
‘Annual Meeting COMMUNITY IMPACT Values-driven partnerships with local organizations to support the health of the local community * Making sustainable investments in the % 9 organizations we partner with 12 28” alth & + Finding ways to leverage all the strengths Wellness Home Ownership & ; areas Hou
Slide 9: Shifting Focus
May 2020 SHIFTING FOCU Management’s directives as we navigate COVID-19 The health and safety of our employees, customers, and communities Manage risk for future stability 2 Ensure stability of operations + Strategic execution NorthWest ame Peoples / STABILITY INTEGRITY COMMUNITY EXCELLENCE :
Slide 10: Core Strategy Unchanged
‘Annual Meeting CORE STRAT NCHANGED Differentiation Operational Efficiency * Service-based value = * Consistent outcomes proposition * Resource allocation * Performance and Profitability Market Penetration * Community Bank serving => * Product development Northwest Indiana and * Teams and Talent Sou
Slide 11: Year Growth Story
10 YEAR GROWTH STORY $1,349.9 (Collars in Milions, Except Per hare Amounts) ~12:312009 Trough 1231-2019
Slide 12: Positioning for the Future
ee POSITIONING FOR THE FUTURE The Indiana DFI and the FDIC have recently approved Peoples Bank’s conversion to a Commercial Bank charter True Commercial Bank charter better reflects our business model and strategic objectives Part of a bigger initiative to enhance governance and position NWIN to ser
Slide 13: Growth Highlights
GROWTH HIGHLIGHTS ‘Annual Meeting Highlights 5 Year a 2009 2014 2019 Por ae Market Cap market Ca $9 $73 suse 129% $108 or $18 $28 $46 11.5% $32 Book Value be Nali si 327 $39 10.6% sa os ‘ose 200 esa 730% sos Inorganic Expansion Year Institution Assets Footprint of Assets 2018 Fist Federal $40 ma 2 B
Slide 14: 2019 Performance Review & Q1 2020 Update
2019 PERFORMANCE REVIEW & Q1 2020 UPDATE STABILITY INTEGRITY COMMUNITY EXCELLENCE
Slide 15: 2019 Performance Summary
‘Annual Meeting 2019 PERFORMANCE SUMMARY Growth Acquisitions Asset Quality NorthWest sae UA => |- Achieving record earnings in 2019 despite acquisition costs Total assets at $1.3 billion, 21.2% growth over 2018 Growth plans being evaluated against the backdrop of COVID- 19 pandemic Earnings at $12.1
Slide 16: COVID-19 Update
COVID-19 UPDATE ‘Annual Meeting Paycheck Protection Program Prudently Helping Customers Expanded Remote Work Banking Centers Open NorthWest sae UA 745 applications totaling $90.0 million as of May 11° Helped local business owners retain 10,514 employees ‘SBA lender fee is averaging approximately 3.8
Slide 17: Loan Portfolio Composition
‘Annual Meeting OAN PORTFOLIO COMPOSITION Commercial Lending * Continuing to reallocate portfolio towards commercial lending + Avoiding regulatory concentration limits with owner occupied commercial real estate portfolio * Enhancing risk management systems for continued growth Residential Lending *
Slide 18: Deposit Composition
Annual Mesting DEPOSIT COMPOSITION Core Deposit Franchise + Growing core deposit base through acquisitions and focused customer service + Competitive advantage for managing net interest income * Certificates of deposits available for additional funding when loan growth accelerates + Strong core depo
Slide 19: Assets & Return on Assets
Annual Mesting ASSETS & RETURN ON ASSETS Organic and Inorganic Growth * Up $485.0mn or 56.1% from end of 2015 to first three months 2020 + Acquisitions have created a platform for organic growth gi327 $18439 + Return on assets has been impacted by acquisitions in 2018 and 2019 * Lack of acquisition
Slide 20: Loans
Annual Mesting LOANS Acquisition and Organic Growth + Portfolio up $347.1mn or 60.7% from end of 2015 to March 31, 2020 + Strategically repositioning the balance sheet $919.0 * Loansasa% of earning assets have increased from 70% in 2015 to 74% at March 31, 2020, helping drive profitability * Organic
Slide 21: Asset Quality
ASSET QUALITY Disciplined Underwriting Allowance for loan loss (ALL) to total loans was 1.03% and the coverage ratio was 117.8%, at March 31, 2020 With reserves that are not part of the ALL that have been established from acquisition activity, the ALL to total loans would be 1.65%! and the coverage
Slide 22: Deposits
DEPOSITS Positioned to Fund Growth + Up $446.7mn or 62.5% from end of 2015 to March 31, 2020 + At March 31, 2020, 73% of total deposits are non-maturity deposits, allowing continued access to a low-cost funding source * Core deposit franchise providing strong on balance sheet liquidity + At March 31
Slide 23: Net Interest Income
NET INTEREST INCOME Managing Through Historic Low Rate Cycle + Actively managing balance sheet asset yields and funding costs to manage yield curve pressure + Net interest income up 25.6% year-end 2018 to year-end 2019 + Strategicloan mix positioned to protect interest yield in falling rate environm
Slide 24: Noninterest Income
NONINTEREST INCOME Adding value through services + Noninterest income streams, especially service income, wealth management, and mortgage banking are all internally developed and continue to be a strategic focus + 17.3% organic growth between 2018 and 2019 + Continue to competitively price bank serv
Slide 25: Noninterest Expense
‘Annual Meeting NONINTEREST EXPENSE Focused Expense Management + Recent acquisitions driving ratio of noninterest expense to average assets ira higher in 2018 and 2019, yet core expenses remain stable * Acquisition expenses totaled $2.1mn for each acquisition year of 2018 and 2019 * Efficiency ratio
Slide 26: Net Income & Earnings Per Share
‘Annual Meeting NET INCOME & EARNINGS PER SHARE Increasing Earnings Through 2019 + Record earnings in 2019, despite $2.1mn one-time acquisition expense * 2019 net income of $12.1mn resulted in EPS of $3.53 EPS Q1 2019 to Q1 2020 grew 39% * Interest rate environment and potential $e. $3.0 credit risk
Slide 27: Capital & Dividend
Annual Mesting CAPITAL & DIVIDEND Capital Adequacy * Focused on maintaining adequate capital position + Earnings continue to accrete to and build capital 113,601 + Earnings and capital should support the continued payment of the company’s dividend at current levels * Rebuilding capital after acquisi
Slide 28: Looking Ahead
‘Annual Meeting LOOKING AHEAD Phased Return to New Normal + Followinglocal governments guidelines, while prioritizing the health and safety of our team and community Phased in approach to return to new normal with the ability to continue to work remotely as needed Risk Management + Working with loan
Slide 29: Thank You
THANK YOU Peoples Bank
Slide 30: Non-GAAP Reconciliation
‘Annual Meeting NON-GAAP RECONCILIATION ‘Table 1 - Reconciliation ofthe Non-GAAP Performance Ratios (Sin thousands) (Unaudited) ‘Additonal resenes not For the three months ended March 31, 2020 GAAP pat ofthe ALL. _Non-GAAP ‘Allowance for loan losses (ALL) S$ 9st S$ 5626 S$ 15,157 Total loans S 918,9
NorthWest Indiana Bancorp — Investor Presentation (May 2020) on 6ix