Munster-based Peoples Bank announced increased earnings and income during the first half of the year.
NorthWest Indiana Bancorp, the holding company for Peoples Bank, reported an earnings increase of 13.6 percent for the first six months of the year. Net income rose to $3.4 million through June, as compared to $3 million over the same period last year.
The bank, which has total assets of $697 million, made a profit of $1.19 per basic and diluted share. The return on average assets was 0.98 percent.
"With income up 13.6 percent for the first six months of the year, the bank continues to show superior results as our operating strategy focuses on keeping an eye on operating costs and working through asset quality issues remaining from the last business cycle," said David Bochnowski, chairman and chief executive officer. "The market continues to reward the bancorp for its strong performance as the price per share of the NorthWest Indiana Bancorp stock has risen 26 percent since the beginning of the year."
In the second quarter, the bank's earnings increased by 5.4 percent. Net income reached $1.7 million in the second quarter, topping the $1.6 million in income Peoples Bank pulled in during the same period of 2012.
Much of the earnings came from reduced operating expenses and an improvement in the bank's loan portfolio. The bank decreased expenses by $304,000, or 3.1 percent, primarily through a reduction of occupancy, data processing and legal costs.
The bank's funding improved. Deposits into checking, savings and money market accounts totaled $411.8 million by the end of June, an increase of $17 million or 4.3 percent since December.
Customers have been putting their money into more liquid accounts because the low interest rates limit what they can make from certificates of deposit. CD balances declined by 6.2 percent during the first six months of 2013.
Income from interest, lending, investing, and loan and securities fees all decreased over the first six months of the year. The value of non-performing loans also ticked up from $11.5 million at the end of the year to $11.7 million through the first six months, largely because of a $4.3 million commercial real estate loan that was ultimately paid off in July.
As a result, the ratio of non-performing loans to total loans has dropped from 2.7 percent to 1.72 percent.
Loan loss provisions totaled $230,000 through the first six months, as compared to $1.1 million over the same time in 2012.
"Although loan payoffs outpaced loan originations during the first six months, asset quality continued to improve, resulting in lower provisions for loan losses," Bochnowski said. "Asset quality improvement continued during July as the bank was paid in full on a non-performing $4.3 million participation loan. If that payoff had occurred at the end of June, the bank's ratio of nonperforming assets to total assets would have fallen to 1.29 percent."
Peoples Bank has offices in Crown Point, Dyer, East Chicago, Gary, Hammond, Hobart, Merrillville, Munster, St. John, Schererville and Valparaiso.