Finward Bancorp · NASDAQ:FNWD
Finward Bancorp — NorthWest Indiana Bancorp — Merger or Acquisition (September 2018)
27 slides from Finward Bancorp's merger presentation, Sep 4, 2018
Slide 1: Fall 2018 Investor Presentation
Fall 2018 Investor Presentation Filed by NorthWest Indiana Bancorp pursuant to Rule 425 under the Securities Act of 1933 and deemed filed Pursuant to Rule 14a - 12 of the Securities Exchange Act of 1934 Subject Company: NorthWest Indiana Bancorp Commission File No. 000 - 26128 Exhibit 99.1
Slide 2: Forward-Looking Statements
Forward - Looking Statements This presentation may contain forward - looking statements regarding the financial performance, business prospects, growth and operating strategies of NorthWest Indiana Bancorp (“NWIN”), as well as those of AJS Bancorp, Inc. (“AJSB”), with which NWIN has entered into a p
Slide 3: Additional Information For Shareholders
Additional Information For Shareholders In connection with the proposed merger, NorthWest Indiana Bancorp (“NWIN”) will file with the SEC a Registration Statement on Form S - 4 that will include a Proxy Statement of AJSB and a Prospectus of NWIN (the “proxy statement/prospectus”) as well as other re
Slide 4: Disclosures Regarding Non-GAAP Measures
Disclosures Regarding Non - GAAP Measures This presentation refers to certain financial measures that are identified as non - GAAP. The Bancorp believes that these non - GAAP measures are helpful to investors to better understand the Bancorp’s assets , earnings, and shareholders’ equity at the date
Slide 5: Sustained Performance
SUSTAINED PERFORMANCE Fall 2018 5
Slide 6: Over Decades of Performance
Over 3 Decades of Performance Converted to Stock Institution Munster Converted to Federal Stock Savings Bank Schererville NorthWest Indiana Bancorp formed East Chicago (new) Broadway Hobart Corporate Center Crown Point Gary Valparaiso St. John First Federal Acquisition Liberty Savings Acquisition 0
Slide 7: Value-Driven Culture
Value - Driven Culture • To help our customers and communities be more successful Mission • Stability • Integrity • Community • Excellence Values • Shareholders • Customers • Employees • Communities Stakeholders Fall 2018 7
Slide 8: Strategic Focus
Strategic Focus Fall 2018 8 Market Expansion • M&A • Organic Growth Market Penetration • Products • Teams Operational Efficiency • Consistency • Resources Strategic Goals - Service - based value proposition - Performance and Profitability - Community Bank serving Northwest Indiana and South Suburban
Slide 9: 2018 Performance Summary
2018 PERFORMANCE SUMMARY Fall 2018 9
Slide 10: 2018 Performance Summary
2018 Performance Summary Asset quality • Strong, stable loan portfolio • Non - performing loans at 0.65% of total loans Growth • Total assets at $959.0mn, 4.1% growth over last 12 months • Capital supports pro forma assets of $1.3bn Sales • Added bankers to the Mortgage, Commercial, and Retail areas
Slide 11: Operating Results for the six months ended June 30, 2018
Operating Results for the six months ended June 30, 2018 Income $5.5mn* 14.9% increase ROA 1.18%* 11 bp increase Assets $959.0mn 3.4% growth Nonint. Income $4.7mn 24.2% growth Cost of Funds 0.48% Efficient funding Named to “Best Places to Work in Indiana” 2013 - 2018 By the Best Companies Group Name
Slide 12: Loans and Deposits
Loans and Deposits Fall 2018 12 33% 31% 29% 27% 27% 44% 46% 47% 50% 50% 12% 12% 13% 12% 13% 6% 6% 6% 6% 6% 5% 5% 5% 5% 4% $0.0 $50.0 $100.0 $150.0 $200.0 $250.0 $300.0 $350.0 $400.0 $450.0 $500.0 $550.0 $600.0 $650.0 $700.0 2014 2015 2016 2017 2018 Loan Mix 2014 - 2018 1-4 first liens Commercial rea
Slide 13: Assets Growth and Quality
Assets Growth and Quality • Up $31.7mn in 2018 • 4.4% 5 year compound annual growth rate • $177.2mn in total loan originations resulting in $26.1mn of net loan growth for first six months of 2018 • Growth reflects focus on loan originations • Maintaining strong credit underwriting practices Fall 201
Slide 14: Asset Quality
Asset Quality ¹Nonaccruing loans + accruing loans 90 days past due Strong credit quality • Nonperforming loans stable at 0.65% • Texas Ratio 9.0% at midyear 2018 • Total classification ratio 10.6% at midyear 2018 • ALL reserves are proportionate to risk Fall 2018 14 1.10% 0.98% 1.05% 0.84% 0.65% 0.0
Slide 15: Interest Income (TE)
Interest Income (TE) Data Source: S&P Global Market Intelligence Competitive yields • Positive impact from increasing yields and improved economic conditions • Prior acquisitions continue to benefit interest income • Portfolio mix delivering increased earnings • Shorter duration positions the portfo
Slide 16: Interest Expense
Interest Expense Data Source: S&P Global Market Intelligence Fall 2018 16 0.49% 0.44% 0.51% 0.65% 0.43% 0.0% 0.1% 0.2% 0.3% 0.4% 0.5% 0.6% 0.7% Indiana Banks Indiana Thrifts U.S. Banks U.S. Thrifts NWIN Interest Expense / Avg. Assets Top Performer • Strong competitive advantage against peers • Conti
Slide 17: Net Interest Margin (TE)
Net Interest Margin (TE) Strong margin • Supported by increase in earning assets • Stability in retail core funding costs has helped support margin during • Main driver of ROA Data Source: S&P Global Market Intelligence Fall 2018 17 3.58% 3.92% 3.87% 3.37% 3.69% 2.5% 2.7% 2.9% 3.1% 3.3% 3.5% 3.7% 3.
Slide 18: Noninterest Expense
Noninterest Expense Strong expense management • Efficient operations ensure agility and low overhead • Investments back into the company have allowed for growth • Efficiency ratio of 65.5%* • Approximately $4.6mn assets per employee, up from $4.0mn in 2012 Data Source: S&P Global Market Intelligence
Slide 19: Return On Assets
Return On Assets Competitive ROA • Management focus on ROA has resulted in enhanced earnings • NWIN midyear 2018 non - GAAP ROA 1.18%* • Long - term performance is the key to ROE and continued independence Data Source: S&P Global Market Intelligence Fall 2018 *See the table at the end of this presen
Slide 20: Building Capital
Building Capital Building capital for growth • Well capitalized at 9.7% tier 1 capital • Deployed capital in 2014 & 2015 through acquisitions • Continue to deploy capital for First Personal & AJSB acquisitions • Day 1 Tier 1 capital projected at 8.8% with First Personal acquisition Fall 2018 20 9.2%
Slide 21: Return on Equity
Return on Equity Continued excellence • Earnings and capital management deliver superior results to shareholders • Returned 33% of earnings to shareholders during six months of 2018 • Performance recognized as a top 200 community bank for past 14 years by American Banker Magazine Data Source: S&P Gl
Slide 22: AJS Bancorp, Inc. Acquisition Highlights
AJS BANCORP, INC. ACQUISITION HIGHLIGHTS 22 Fall 2018
Slide 23: Expanding Chicagoland Presence
Expanding Chicagoland Presence Acquisition of AJS Bancorp, Inc. and subsidiary, A.J. Smith FSB Financially Compelling with Strong Strategic and Cultural Fit • Adds additional scale in south suburban Chicagoland market • Institutions share focus on customers and communities • Strong core deposit fran
Slide 24: Peoples Banking Center Network
Peoples Banking Center Network Projected 22 full - service banking centers 24 1. NWIN branches include three branches in IL acquired in their recently completed acquisition of First Personal Financial Corpo rat ion. Fall 2018 NorthWest Indiana Bancorp 1 (19) AJS Bancorp, Inc. (3)
Slide 25: Deal Assumptions
Deal Assumptions • 0.8% TBV per share day 1 dilution • Expected 6.0% EPS accretion for 2019 (excluding one - time deal related charges) and 6.4% in 2020 • Approximately 2.2 years TBV per share earn back • 20%+ projected IRR Shareholder Impact • $34.6 million purchase price (55% stock, 45% cash) 1 •
Slide 26: Thank you.
NorthWest Indiana BANCORP Thank you.
Slide 27: Appendix (Reconciliation of GAAP and prospective, non-GAAP measures)
Fall 2018 Appendix (Reconciliation of GAAP and prospective, non - GAAP measures) 27 Thee Months Six Months Ended Ended 6/30/2018 6/30/2018 (Unaudited) (Unaudited) GAAP net Income 2,511$ 5,072$ GAAP income tax expense 365 780 GAAP income before income taxes 2,876 5,852 Acquisition costs 533 545 Pro f
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