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8-K - FORM 8-K - NATIONAL BANK OF INDIANAPOLIS CORP | c24914e8vk.htm |
Exhibit 99.1
November 17, 2011
Dear Shareholder:
The third quarter of 2011 showed excellent growth for your Corporation. The National Bank of
Indianapolis Corporation reached total assets of $1.487 billion at September 30 compared to total
assets of $1.342 billion at September 30 last year, an increase of approximately $145 million or
11%.
In the third quarter, your Corporation earned $1,441,000 or $0.58 per fully diluted share compared
to $756,000 or $0.32 in the third quarter last year. Book value per share at September 30, 2011
equaled $37.78.
Results for the third quarter of 2011 included a negative provision for loan losses of ($371,000).
Third quarter net charge offs totaled $1,048,000. Loans charged off in the third quarter were
primarily attributable to one commercial real estate relationship and a small number of other
borrowers that were affected by the general decline in the economy. The reserve is now
$14,748,000, which we believe is adequate in light of the continued weakness in the economy.
Our third quarter performance also showed continued growth of the loan portfolio. Loans exceeded
$945 million for a growth of $35 million or 4% since September 30, 2010. While cautious, the Bank
continues to make loans to creditworthy borrowers. Deposits grew $118 million or 10% in the third
quarter despite strong competition.
Fee income was another important aspect of our performance in the third quarter. For the third
quarter of 2011, the Corporation generated fee income in excess of $3,699,000. Residential
Mortgage Banking experienced strong demand in mortgage originations as clients moved to take
advantage of lower interest rates. Also, the Wealth Management Division provided meaningful
contributions to total fee income. At September 30, total assets under administration in the
Wealth Management Division reached $1.319 billion. This further contributed to fee income in the
third quarter.
At this time, the economic recovery is still soft. While economic growth is positive, it remains
low and recent forecasts call for more of the same. Unemployment continues to be high as companies
are reluctant to increase hiring or invest in expansion. The housing market remains a source of
weakness. Interest rates are at historically low levels and are expected to remain low perhaps
until 2014. The Federal Reserve is providing monetary stimulus by purchasing billions of dollars
of securities in an effort to drive down long term interest rates. The European debt crisis
threatens to cause financial turmoil and may slow economic growth even further. Until employment
begins to grow in a meaningful way, collateral values will remain soft and creditworthy loan demand
will remain weak.
In summary, The National Bank of Indianapolis Corporation is profitable and well-capitalized. We
believe that the Corporation remains well-positioned to meet the many challenges of 2011. As
always, we appreciate the numerous referrals of our shareholders and the dedication of our
employees.
Sincerely,
Michael S. Maurer
|
Morris L. Maurer | Philip B. Roby | ||
Chairman
|
President and | Executive Vice President and | ||
Chief Executive Officer | Chief Operating Officer |
FORWARD LOOKING STATEMENTS
This document contains forward-looking statements. Forward-looking statements provide current
expectations or forecasts of future events and are not guarantees of future performance, nor should
they be relied upon as representing managements views as of any subsequent date. The
forward-looking statements are based on managements expectations and are subject to a number of
risks and uncertainties. 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, without limitation, the Corporations ability to effectively execute its
business plans; changes in general economic and financial market conditions; changes in interest
rates; changes in the competitive environment; continuing consolidation in the financial services
industry; new litigation or changes in existing litigation; losses, customer bankruptcy, claims and
assessments; changes in banking regulations or other regulatory or legislative requirements
affecting the Corporations business; and changes in accounting policies or procedures as may be
required by the Financial Accounting Standards Board or other regulatory agencies. Additional
information concerning factors that could cause actual results to differ materially from those
expressed or implied in the forward-looking statements is available in the Corporations Annual
Report on Form 10-K for the year ended December 31, 2010, and subsequent filings with the United
States Securities and Exchange Commission (SEC). Copies of these filings are available at no cost
on the SECs Web site at www.sec.gov or on the Corporations Web site at
www.nbofi.com. Management may elect to update forward-looking statements at some future
point; however, it specifically disclaims any obligation to do so.
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THIRD QUARTER 2011 HIGHLIGHTS
Selected Balance Sheet Information
Sept. 30, 2011 | Sept. 30, 2010 | Dec. 31, 2010 | ||||||||||
(in thousands) | (unaudited) | (unaudited) | (audited) | |||||||||
Total Assets |
$ | 1,487,169 | $ | 1,342,264 | $ | 1,441,393 | ||||||
Loans |
945,849 | 910,883 | 901,756 | |||||||||
Reserve for Loan Losses |
(14,748 | ) | (15,598 | ) | (15,134 | ) | ||||||
Investment Securities |
273,554 | 176,390 | 190,353 | |||||||||
Total Deposits |
1,277,850 | 1,159,893 | 1,238,840 | |||||||||
Shareholders Equity |
88,379 | 77,260 | 79,357 |
Selected Income Statement Information
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(in thousands) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||
Net Interest Income |
$ | 10,197 | $ | 9,646 | $ | 30,296 | $ | 28,237 | ||||||||
Provision for Loan Losses |
(371 | ) | 1,875 | 2,307 | 4,344 | |||||||||||
Non-Interest Income |
3,699 | 4,208 | 10,439 | 10,448 | ||||||||||||
Non-Interest Expense |
12,436 | 11,137 | 33,338 | 31,823 | ||||||||||||
Pretax Income (Loss) |
1,831 | 842 | 5,090 | 2,518 | ||||||||||||
Net Income (Loss) |
1,441 | 756 | 4,096 | 2,214 |
Selected Per Share Information
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
Basic Earnings (Loss) Per Share |
$ | 0.62 | $ | 0.33 | $ | 1.76 | $ | 0.96 | ||||||||
Diluted Earnings (Loss) Per Share |
$ | 0.58 | $ | 0.32 | $ | 1.68 | $ | 0.93 | ||||||||
Book Value per Share |
$ | 37.78 | $ | 33.33 | $ | 37.78 | $ | 33.33 |
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