Correcting and Replacing – Finward Bancorp Announces Earnings for the Quarter Ended June 30, 2024


MUNSTER, Ind., July 30, 2024 (GLOBE NEWSWIRE) -- Finward Bancorp (Nasdaq: FNWD) (the “Bancorp”), the holding company for Peoples Bank (the “Bank”), today announced corrections to its press release issued on July 24, 2024.  Specifically, the following press release (i) corrects the “Performance Ratios” table set forth in the rear portion of the original press release to include line items for return on equity, return on assets, tax adjusted net interest margin, noninterest income / average assets, noninterest expense / average assets, and efficiency ratio which were inadvertently not included in the version of the original press release issued through the Bancorp’s press release distribution service, and corrects the amounts disclosed in the line items in the table for basic earnings per share (from $0.03 to $2.21), diluted earnings per share ($0.03 to $2.21), and price to earnings per share ratio (from 730.40 to 5.54) under the column for the six months ended June 30, 2024 which were inadvertently included from a prior interim version of the press release; (ii) corrects calculations in the “Performance Ratios” and “Capital Adequacy Bank” tables for the line items common equity tier 1 capital to risk-weighted assets (from 11.23% to 10.94%), tier 1 capital to risk-weighted assets (from 11.23% to 10.94%), and total capital to risk-weighted assets (from 12.27% to 11.95%); (iii) corrects the “Balance Sheet” table set forth in the rear portion of the Original Earnings Release to include figures in the line item for Federal funds sold for the periods ended June 30, 2024, March 31, 2024, and December 31, 2023 which were inadvertently not included in the version of the original press release issued through the Bancorp’s press release distribution service; and (iv) corrects the amount listed in the “Securities Portfolio” paragraph for securities yield for the three months ended (from 2.39% to 2.37%).  The complete, corrected press release reads as follows: 

Munster, Indiana - Finward Bancorp (Nasdaq: FNWD) (the “Bancorp”), the holding company for Peoples Bank (the “Bank”), today announced that net income available to common stockholders was $9.4 million, or $2.21 per diluted share, for the six months ended June 30, 2024, as compared to $4.7 million, or $1.10 per diluted share, for the corresponding prior year period. For the quarter ended June 30, 2024, the Bancorp’s net income totaled $143 thousand, or $0.03 per diluted share, as compared to $2.4 million, or $0.57 per diluted share, for the three months ended June 30, 2023. Selected performance metrics are as follows for the periods presented: 

Performance Ratios Quarter ended, Six months ended, 
     (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) 
     June 30, March 31, December 31,September 30,June 30, June 30, June 30, 
     2024  2024  2023  2023  2023  2024  2023  
Return on equity 0.39% 24.97% 4.92% 6.55% 7.05% 12.81% 6.74% 
Return on assets 0.03% 1.77% 0.29% 0.42% 0.46% 0.91% 0.45% 
Tax adjusted net interest margin 2.67% 2.57% 2.80% 2.87% 3.03% 2.62% 3.13% 
Noninterest income / average assets 0.50% 2.57% 0.53% 0.46% 0.57% 1.54% 0.54% 
Noninterest expense / average assets 2.79% 2.86% 2.60% 2.59% 2.66% 2.83% 2.71% 
Efficiency ratio  98.56% 59.41% 87.49% 86.88% 82.11% 73.77% 82.23% 

 

“Key operating areas saw benefits in the second quarter from previously announced strategic initiatives. Net interest margin demonstrated signs of continued stabilization during the quarter, and non-interest expense levels decreased as expected, as we believe operational efficiency will continue to improve in the second half of the year. Provision expense increased primarily as the result of new unfunded commitments as we continue to provide capital to our customers," said Benjamin Bochnowski, chief executive officer. "Asset yields have begun to show improvement as we fund new lending opportunities in our core market. While loan balances are down, originations remain on pace with expectations for the year. Credit quality remains strong, and we are well-positioned for potential changes in the interest rate environment”.

Highlights of the current period include:

  • Net Interest Margin - The net interest margin for the three months ended June 30, 2024, was 2.54%, compared to 2.42% for the three months ended March 31, 2024. The tax-adjusted net interest margin (a non-GAAP measure) for the three months ended June 30, 2024, was 2.67%, compared to 2.57% for the three months ended March 31, 2024. The increased net interest margin is primarily the result of gradual improvement in earning asset yields as loans are originated or are generally repricing at higher rates, while maintaining relatively stable interest-bearing liability costs in this current interest rate environment.  See Table 1 at the end of this press release for a reconciliation of the tax-adjusted net interest margin to the GAAP net interest margin.

  • Funding - As of June 30, 2024, deposits totaled $1.8 billion, compared to $1.7 billion on March 31, 2024, an increase of $9.2 million or 0.5%. Core deposits totaled $1.2 billion at both June 30, 2024 and March 31, 2024. Core deposits include checking, savings, and money market accounts and represented 69.2% of the Bancorp’s total deposits at June 30, 2024. On June 30, 2024, balances for certificates of deposit totaled $541.2 million, compared to $531.3 million on March 31, 2024, an increase of $9.8 million or 1.7%. The increase in deposits is primarily related to cyclical inflows and outflows related to a number of municipality depositors and planned adjustments to deposit pricing. In addition, on June 30, 2024, borrowings and repurchase agreements totaled $128.0 million, compared to $131.1 million at March 31, 2024, a decrease of $3.2 million or 2.4%. The decrease in short-term borrowings was the result of cyclical inflows and outflows of interest-earning assets and interest-bearing liabilities. Furthermore, during the quarter, the Bancorp repaid an additional $5 million of its outstanding Bank Term Funding Program (the “BTFP”) balance, resulting in a $60 million balance as of June 30, 2024. As of June 30, 2024, 71% of our deposits are fully FDIC insured, and another 8% are further backed by the Indiana Public Deposit Insurance Fund. The Bancorp’s liquidity position remains strong with solid core deposit customer relationships, excess cash, debt securities, and access to diversified borrowing sources. As of June 30, 2024, the Bancorp had available liquidity of $585 million including borrowing capacity from the FHLB and Federal Reserve facilities.

  • Securities Portfolio - Securities available for sale balances declined by $6.6 million to $339.6 million as of June 30, 2024, compared to $346.2 million as of March 31, 2024.  The decrease in securities available for sale was due to a combination of portfolio runoff and an increase of accumulated other comprehensive income ("AOCI") losses. AOCI losses were $58.9 million as of June 30, 2024, compared to $56.3 million on March 31, 2024, an increase of $2.6 million or 4.7%. The yield on the securities portfolio increased to 2.43% for the three months ended June 30, 2024, up from 2.37% for the three months ended March 31, 2024. Management did not execute any securities sale transactions during the quarter but will continue to monitor the securities portfolio for additional restructuring opportunities.  

  • Gain on Sale of Loans - Lower levels of mortgage loan origination in our markets continues to drive reduced fixed rate mortgage loan sale activity into the secondary market. As a result, gains from the sale of loans for the six months ended June 30, 2024, totaled $472 thousand, a decrease from $537 thousand for the six months ended June 30, 2023. During the six months ended June 30, 2024, the Bank originated $9.7 million in new fixed rate mortgage loans for sale, compared to $19.3 million during the six months ended June 30, 2023. During the six months ended June 30, 2024, the Bank originated $8.8 million in new 1-4 family loans retained in its portfolio, compared to $17.4 million during the six months ended June 30, 2023. Total 1-4 family originations for the quarter ended June 30, 2024, totaled $18.5 million, a decrease of $4.2 million from the amount for the quarter ended June 30, 2023, totaling $22.7 million. This decrease was driven by increasing market interest rates and continued low levels of housing inventory, which slowed mortgage applications. These retained loans are primarily construction loans and adjustable-rate loans with a fixed-rate period of 7 years or less. The Bank continues to sell longer-duration fixed rate mortgages into the secondary market.

  • Commercial Lending - The Bank’s aggregate loan portfolio totaled $1.5 billion on both June 30, 2024 and March 31, 2024. During the three months ended June 30, 2024, the Bank originated $48.7 million in new commercial loans, compared to $47.9 million during the three months ended March 31, 2024 and $73.2 million during the three months ended June 30, 2023. The loan portfolio represents 78.5% of earning assets and is comprised of 62.2% commercial-related credits. At June 30, 2024, the Bancorp’s portfolio loan balances in commercial real estate owner occupied properties totaled $235.9 million or 15.7% of total loan balances and commercial real estate non-owner occupied properties totaled $293.5 million or 19.5% of total loan balances. Of the $293.5 million in commercial real estate non-owner occupied properties balances, loans collateralized by office buildings represented $42.6 million or 2.8% of total loan balances.

  • Asset Quality - At June 30, 2024, non-performing loans totaled $11.4 million, compared to $11.8 million at March 31, 2024, a decrease of $445 thousand or 3.8%. The Bank’s ratio of non-performing loans to total loans was 0.75% at June 30, 2024, compared to 0.78% at March 31, 2024. The Bank’s ratio of non-performing assets to total assets declined from 0.64% at March 31, 2024 to 0.61% at June 30, 2024. Management maintains a vigilant oversight of nonperforming loans through proactive relationship management. The allowance for credit losses (ACL) totaled $18.3 million at June 30, 2024, compared to $18.8 million at March 31, 2024, a decrease of $476 thousand or 2.5% and is considered adequate by management. For the quarter ended June 30, 2024, charge-offs, net of recoveries, totaled $37 thousand. The allowance for credit losses as a percentage of total loans was 1.22% at June 30, 2024, and the allowance for credit losses as a percentage of non-performing loans, or coverage ratio, was 161.2% at June 30, 2024.

  • Operating Expenses - Non-interest expense as a percent of average assets was 2.79% for the quarter ended June 30, 2024, as compared to 2.86% for quarter ended March 31, 2024, a decrease of 0.07%.  Decreases in non-interest expenses quarter over quarter were primarily attributable to lower accounting and service fees with lower third-party expenses related to operational enhancements. The Bank remains focused on identifying additional operating efficiencies and third-party expense reductions through the remainder of this year and beyond. Compensation and benefits expense is down 3.3% for the six months ended June 30, 2024, compared to June 30, 2023.

  • Capital Adequacy - As of June 30, 2024, the Bank’s tier 1 capital to adjusted average assets ratio was 8.32% which is within all regulatory capital requirements and an improvement of 0.08% compared to 8.24% at March 31, 2024. The Bank continues to be considered well capitalized. The Bancorp’s tangible book value per share was $28.67 at June 30, 2024, down from $29.30 as of March 31, 2024 (a non-GAAP measure). Tangible common equity to total assets was 5.95% at June 30, 2024, down from 6.09% as of March 31, 2024 (a non-GAAP measure). Excluding accumulated other comprehensive losses, tangible book value per share decreased to $42.33 as of June 30, 2024, from $42.36 as of March 31, 2024 (a non-GAAP measure). See Table 1 at the end of this press release for a reconciliation of the tangible book value per share, tangible book value per share adjusted for accumulated comprehensive other losses, tangible common equity as a percentage of total assets, and tangible common equity as a percentage of total assets adjusted for accumulated other comprehensive losses to the related GAAP ratios.

Disclosures Regarding Non-GAAP Financial Measures
Reported amounts are presented in accordance with GAAP. In this press release, the Bancorp also provides certain financial measures identified as non-GAAP. The Bancorp’s management believes that the non-GAAP information, which consists of tangible common equity, tangible common equity adjusted for accumulated other comprehensive losses, tangible book value per share, tangible book value per share adjusted for accumulated other comprehensive losses, tangible common equity/total assets, tax-adjusted net interest margin, and efficiency ratio, which can vary from period to period, provides a better comparison of period to period operating performance. The adjusted net interest income and tax-adjusted net interest margin measures recognize the income tax savings when comparing taxable and tax-exempt assets. Interest income and yields on tax-exempt securities and loans are presented using the current federal income tax rate of 21%. Management believes that it is standard practice in the banking industry to present net interest income and net interest margin on a fully tax-equivalent basis and that it may enhance comparability for peer comparison purposes. Additionally, the Bancorp believes this information is utilized by regulators and market analysts to evaluate a company’s financial condition and, therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. Refer to Table 1 – Reconciliation of Non-GAAP Financial Measures at the end of this document for a reconciliation of the non-GAAP measures identified herein and their most comparable GAAP measures.
   
About Finward Bancorp
Finward Bancorp is a locally managed and independent financial holding company headquartered in Munster, Indiana, whose activities are primarily limited to holding the stock of Peoples Bank. Peoples Bank provides a wide range of personal, business, electronic and wealth management financial services from its 26 locations in Lake and Porter Counties in Northwest Indiana and Chicagoland. Finward Bancorp’s common stock is quoted on The NASDAQ Stock Market, LLC under the symbol FNWD. The website ibankpeoples.com provides information on Peoples Bank’s products and services, and Finward Bancorp’s investor relations.

Forward Looking Statements
This press release may contain forward-looking statements regarding the financial performance, business prospects, growth and operating strategies of the Bancorp. For these statements, the Bancorp claims the protections of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Statements in this communication should be considered in conjunction with the other information available about the Bancorp, including the information in the filings the Bancorp makes with the SEC. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward-looking statements are based on management’s expectations and are subject to a number of risks and uncertainties. Forward-looking statements are typically identified by using words such as “anticipate,” “estimate,” “project,” “intend,” “plan,” “believe,” “will” and similar expressions in connection with any discussion of future operating or financial performance.

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: the Bank’s ability to demonstrate compliance with the terms of the previously disclosed consent order and memorandum of understanding entered into between the Bank and the Federal Deposit Insurance Corporation (“FDIC”) and Indiana Department of Financial Institutions (“DFI”), or to demonstrate compliance to the satisfaction of the FDIC and/or DFI within prescribed time frames; the Bank’s agreement under the memorandum of understanding to refrain from paying cash dividends without prior regulatory approval; changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates, market liquidity, and capital markets, as well as the magnitude of such changes, which may reduce net interest margins; inflation; further deterioration in the market value of securities held in the Bancorp’s investment securities portfolio, whether as a result of macroeconomic factors or otherwise; customer acceptance of the Bancorp’s products and services; customer borrowing, repayment, investment, and deposit practices; customer disintermediation; the introduction, withdrawal, success, and timing of business initiatives; competitive conditions; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with mergers, acquisitions, and divestitures; economic conditions; and the impact, extent, and timing of technological changes, capital management activities, regulatory actions by the Federal Deposit Insurance Corporation and Indiana Department of Financial Institutions, and other actions of the Federal Reserve Board and legislative and regulatory actions and reforms. Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the Bancorp’s reports (such as the Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K) filed with the SEC and available at the SEC’s Internet website (www.sec.gov). All subsequent written and oral forward-looking statements concerning matters attributable to the Bancorp or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. Except as required by law, The Bancorp does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statement is made.

In addition to the above factors, we also caution that the actual amounts and timing of any future common stock dividends or share repurchases will be subject to various factors, including our capital position, financial performance, capital impacts of strategic initiatives, market conditions, and regulatory and accounting considerations, as well as any other factors that our Board of Directors deems relevant in making such a determination. Therefore, there can be no assurance that we will repurchase shares or pay any dividends to holders of our common stock, or as to the amount of any such repurchases or dividends.

Finward Bancorp
Quarterly Financial Report
              
Performance RatiosQuarter ended, Six months ended,
 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
 June 30, March 31, December 31,September 30,June 30, June 30, June 30,
  2024   2024   2023   2023   2023   2024   2023 
Return on equity 0.39%  24.97%  4.92%  6.55%  7.05%  12.81%  6.74%
Return on assets 0.03%  1.77%  0.29%  0.42%  0.46%  0.91%  0.45%
Yield on loans 5.11%  5.02%  5.09%  5.02%  4.91%  5.06%  4.79%
Yield on security investments 2.43%  2.37%  2.57%  2.41%  2.36%  2.40%  2.38%
Total yield on earning assets 4.64%  4.52%  4.64%  4.51%  4.43%  4.58%  4.33%
Cost of interest-bearing deposits 2.37%  2.36%  2.22%  1.95%  1.65%  2.37%  1.40%
Cost of repurchase agreements 3.86%  3.88%  3.78%  3.83%  3.78%  3.87%  3.39%
Cost of borrowed funds 4.76%  4.62%  4.41%  4.48%  4.53%  4.69%  4.64%
Total cost of interest-bearing liabilities 2.54%  2.53%  2.38%  2.16%  1.87%  2.53%  1.64%
Tax adjusted net interest margin 2.67%  2.57%  2.80%  2.87%  3.03%  2.62%  3.13%
Noninterest income / average assets 0.50%  2.57%  0.53%  0.46%  0.57%  1.54%  0.54%
Noninterest expense / average assets 2.79%  2.86%  2.60%  2.59%  2.66%  2.83%  2.71%
Net noninterest margin / average assets -2.29%  -0.29%  -2.08%  -2.13%  -2.09%  -1.29%  -2.17%
Efficiency ratio 98.56%  59.41%  87.49%  86.88%  82.11%  73.77%  82.23%
Effective tax rate -6.72%  9.48%  -30.85%  -22.20%  3.86%  9.27%  8.22%
              
Non-performing assets to total assets 0.61%  0.64%  0.61%  0.54%  0.62%  0.61%  0.62%
Non-performing loans to total loans 0.75%  0.78%  0.76%  0.66%  0.80%  0.75%  0.80%
Allowance for credit losses to non-performing loans 161.17%  159.12%  163.90%  192.89%  158.26%  161.17%  158.26%
Allowance for credit losses to loans outstanding 1.22%  1.25%  1.24%  1.27%  1.27%  1.22%  1.27%
Foreclosed real estate to total assets 0.00%  0.00%  0.00%  0.00%  0.00%  0.00%  0.00%
              
Basic earnings per share$0.03  $2.18  $0.36  $0.52  $0.57  $2.21  $1.10 
Diluted earnings per share$0.03  $2.17  $0.35  $0.51  $0.57  $2.21  $1.10 
Stockholders' equity / total assets 7.16%  7.32%  6.99%  5.70%  6.33%  7.16%  6.33%
Book value per share$34.45  $35.17  $34.28  $27.68  $31.77  $34.45  $31.77 
Closing stock price$24.52  $24.60  $25.24  $22.00  $22.00  $24.52  $22.00 
Price to earnings per share ratio 182.60   2.82   17.77   10.67   9.59   5.54   9.99 
Dividend declared per common share$0.12  $0.12  $0.12  $0.31  $0.31  $0.24  $0.62 
              
Common equity tier 1 capital to risk-weighted assets 10.94%  10.89%  10.43%  10.17%  10.00%  10.94%  10.00%
Tier 1 capital to risk-weighted assets 10.94%  10.89%  10.43%  10.17%  10.00%  10.94%  10.00%
Total capital to risk-weighted assets 11.95%  11.92%  11.36%  11.12%  10.96%  11.95%  10.96%
Tier 1 capital to adjusted average assets 8.32%  8.24%  7.78%  7.81%  7.58%  8.32%  7.58%
              
              
Non-GAAP Performance RatiosQuarter ended, Six Months Ended
 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
 June 30, March 31, December 31,September 30,June 30, June 30, June 30,
  2024   2024   2023   2023   2023   2024   2023 
Net interest margin - tax equivalent 2.67%  2.57%  2.80%  2.87%  3.03%  2.62%  3.13%
Tangible book value per diluted share$28.67  $29.30  $28.31  $21.63  $25.64  $28.67  $25.64 
Tangible book value per diluted share adjusted for AOCI$42.33  $42.36  $40.31  $39.96  $39.62  $42.33  $39.62 
Tangible common equity to total assets 5.95%  6.09%  5.77%  4.46%  5.11%  5.95%  5.11%
Tangible common equity to total assets adjusted for AOCI 8.79%  8.81%  8.22%  8.23%  7.89%  8.79%  7.89%
                            


Quarter Ended            
(Dollars in thousands)Average Balances, Interest, and Rates 
(unaudited)June 30, 2024 March 31, 2024 
 Average Balance Interest Rate (%) Average Balance Interest Rate (%) 
ASSETS            
Interest bearing deposits in other financial institutions$60,378  $799 5.29 $68,935  $853  4.95 
Federal funds sold 1,263   10 3.17  814   10  4.91 
Securities available-for-sale 337,226   2,047 2.43  365,194   2,161  2.37 
Loans receivable 1,501,584   19,174 5.11  1,504,011   18,879  5.02 
Federal Home Loan Bank stock 6,547   96 5.87  6,547   82  5.01 
Total interest earning assets 1,906,998  $22,126 4.64  1,945,501  $21,985  4.52 
Cash and non-interest bearing deposits in other financial institutions 18,054       18,230      
Allowance for credit losses (18,788)      (18,743)     
Other noninterest bearing assets 158,358       151,945      
    Total assets$2,064,622      $2,096,933      
             
LIABILITIES AND STOCKHOLDERS' EQUITY            
Interest-bearing deposits$1,455,007  $8,610 2.37 $1,487,771  $8,794  2.36 
Repurchase agreements 41,388   399 3.86  38,151   370  3.88 
Borrowed funds 85,940   1,022 4.76  90,053   1,040  4.62 
Total interest bearing liabilities 1,582,335  $10,031 2.54  1,615,975  $10,204  2.53 
Non-interest bearing deposits 291,618       294,398      
Other noninterest bearing liabilities 45,029       37,897      
    Total liabilities 1,918,982       1,948,270      
    Total stockholders' equity 145,640       148,663      
    Total liabilities and stockholders' equity$2,064,622       $2,096,933      
             
             
Return on average assets 0.03%      1.77%     
Return on average equity 0.39%      24.97%     
Net interest margin (average earning assets) 2.54%       2.42%      
Net interest margin (average earning assets) - tax equivalent 2.67%      2.57%     
Net interest spread 2.11%      1.99%      
Ratio of interest-earning assets to interest-bearing liabilities1.21x     1.20x     



               
 Year-to-Date             
 (Dollars in thousands)Average Balances, Interest, and Rates  
 (unaudited)June 30, 2024 June 30, 2023  
  Average Balance Interest Rate (%) Average Balance Interest Rate (%)  
 ASSETS  `          
 Interest bearing deposits in other financial institutions$64,657  $1,652 5.11 $30,140  $765 5.08   
 Federal funds sold 1,039   20 3.85  1,275   27 4.24   
 Certificates of deposit in other financial institutions -   - -  1,762   31 3.52   
 Securities available-for-sale 351,210   4,208 2.40  373,413   4,440 2.38   
 Loans receivable 1,502,798   38,053 5.06  1,516,689   36,320 4.79   
 Federal Home Loan Bank stock 6,547   178 5.44  6,547   166 5.07   
 Total interest earning assets 1,926,251  $44,111 4.58  1,929,826  $41,749 4.33   
 Cash and non-interest bearing deposits in other financial institutions 18,142       18,523       
 Allowance for credit losses (18,765)      (16,569)      
 Other noninterest bearing assets 155,147       154,227       
     Total assets$2,080,775      $2,086,007       
               
 LIABILITIES AND STOCKHOLDERS' EQUITY             
 Interest-bearing deposits$1,471,389  $17,404 2.37 $1,457,235  $10,192 1.40   
 Repurchase agreements 39,769   769 3.87  26,635   451 3.39   
 Borrowed funds 87,996   2,062 4.69  103,465   2,399 4.64   
 Total interest bearing liabilities 1,599,154  $20,235 2.53  1,587,335  $13,042 1.64   
 Non-interest bearing deposits 293,008       331,690       
 Other noninterest bearing liabilities 41,461       28,066       
     Total liabilities 1,933,623       1,947,091       
     Total stockholders' equity 147,152       138,916       
     Total liabilities and stockholders' equity$2,080,775      $2,086,007       
               
               
 Return on average assets 0.91%      0.45%      
 Return on average equity 12.81%      6.74%      
 Net interest margin (average earning assets) 2.48%       2.98%        
 Net interest margin (average earning assets) - tax equivalent 2.62%      3.13%      
 Net interest spread 2.05%      2.69%       
 Ratio of interest-earning assets to interest-bearing liabilities1.20x     1.01x      
               



Finward Bancorp    
Quarterly Financial Report    
                  
Balance Sheet Data                 
(Dollars in thousands)    (Unaudited) (Unaudited)   (Unaudited) (Unaudited)    
     June 30, March 31, December 31,September 30,June 30,    
      2024   2024   2023   2023   2023     
ASSETS                 
                  
Cash and non-interest bearing deposits in other financial institutions $19,061  $16,418  $17,942  $17,922  $23,210     
Interest bearing deposits in other financial institutions  63,439   54,755   67,647   52,875   89,706     
Federal funds sold     707   607   419   851   2,757     
    Total cash and cash equivalents  83,207   71,780   86,008   71,648   115,673     
                  
Securities available-for-sale    339,585   346,233   371,374   339,280   368,136     
Loans held-for-sale     1,185   667   340   2,057   1,832     
Loans receivable, net of deferred fees and costs  1,506,398   1,508,251   1,512,595   1,525,660   1,534,161     
Less: allowance for credit losses   (18,330)  (18,805)  (18,768)  (19,430)  (19,507)    
    Net loans receivable     1,488,068   1,489,446   1,493,827   1,506,230   1,514,654     
Federal Home Loan Bank stock   6,547   6,547   6,547   6,547   6,547     
Accrued interest receivable    7,695   7,583   8,045   7,864   7,714     
Premises and equipment    48,696   47,795   38,436   38,810   39,204     
Foreclosed real estate     -   71   71   71   71     
Cash value of bank owned life insurance  33,107   32,895   32,702   32,509   32,316     
Goodwill     22,395   22,395   22,395   22,395   22,395     
Other intangible assets     2,555   2,911   3,272   3,636   4,015     
Other assets     44,027   43,459   45,262   56,423   48,661     
                  
    Total assets    $2,077,067  $2,071,782  $2,108,279  $2,087,470  $2,161,218     
                  
LIABILITIES AND STOCKHOLDERS' EQUITY              
                  
Deposits:                 
  Non-interest bearing    $286,784  $296,959  $295,594  $312,635  $315,671     
  Interest bearing     1,469,970   1,450,519   1,517,827   1,471,402   1,479,476     
    Total     1,756,754   1,747,478   1,813,421   1,784,037   1,795,147     
Repurchase agreements    42,973   41,137   38,124   48,310   46,402     
Borrowed funds     85,000   90,000   80,000   100,000   150,000     
Accrued expenses and other liabilities  43,709   41,586   29,389   36,080   32,919     
                  
    Total liabilities     1,928,436   1,920,201   1,960,934   1,968,427   2,024,468     
                  
Commitments and contingencies              
                  
Stockholders' Equity:                 
                  
Preferred stock, no par or stated value;              
  10,000,000 shares authorized, none outstanding  -   -   -   -   -     
Common stock, no par or stated value; 10,000,000 shares authorized;  -   -   -   -   -     
shares issued and outstanding: June 30, 2024 - 4,313,940              
                                           December 31, 2023 - 4,298,773              
Additional paid-in capital    69,778   69,727   69,555   69,482   69,384     
Accumulated other comprehensive loss  (58,939)  (56,313)  (51,613)  (78,848)  (60,185)    
Retained earnings     137,792   138,167   129,403   128,409   127,551     
                  
                  
                  
    Total stockholders' equity    148,631   151,581   147,345   119,043   136,750     
                  
    Total liabilities and stockholders' equity $2,077,067  $2,071,782  $2,108,279  $2,087,470  $2,161,218     
                  



Finward Bancorp 
Quarterly Financial Report 
                 
Consolidated Statements of Income Quarter Ended,  Six months ended, 
(Dollars in thousands) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)  (Unaudited) (Unaudited) 
  June 30, March 31, December 31,September 30,June 30,  June 30, June 30, 
   2024   2024   2023   2023   2023    2024   2023  
Interest income:                
Loans $19,174  $18,879  $19,281  $19,161  $18,694   $38,053  $36,320  
Securities & short-term investments  2,953   3,105   2,975   2,617   2,919    6,058   5,429  
Total interest income  22,127   21,984   22,256   21,778   21,613    44,111   41,749  
Interest expense:                
Deposits  8,610   8,794   8,180   7,066   6,105    17,404   10,192  
Borrowings  1,463   1,410   1,361   1,579   1,469    2,873   2,850  
Total interest expense  10,073   10,204   9,541   8,645   7,574    20,277   13,042  
Net interest income  12,054   11,780   12,715   13,133   14,039    23,834   28,707  
Provision for credit losses  76   -   779   244   514    76   1,002  
Net interest income after provision for credit losses  11,978   11,780   11,936   12,889   13,525    23,758   27,705  
Noninterest income:                
Fees and service charges  1,257   1,153   1,507   1,374   1,832    2,410   3,143  
Wealth management operations  763   633   672   572   626    1,396   1,240  
Gain on sale of loans held-for-sale, net  320   152   352   192   274    472   537  
Increase in cash value of bank owned life insurance 212   193   193   193   201    405   380  
Gain (loss) on sale of real estate  15   11,858   -   2   (15)   11,873   (15) 
Loss on sale of securities, net  -   (531)  -   -   (48)   (531)  (48) 
Other  6   17   11   64   136    24   377  
Total noninterest income  2,573   13,475   2,735   2,397   3,006    16,049   5,614  
Noninterest expense:                
Compensation and benefits  7,037   7,109   6,290   6,729   7,098    14,146   14,636  
Occupancy and equipment  2,120   1,915   1,520   1,711   1,636    4,035   3,326  
Data processing  1,135   1,170   1,269   1,085   1,407    2,305   2,380  
Federal deposit insurance premiums  397   501   492   474   572    898   1,037  
Marketing  212   158   191   235   159    370   414  
Other  3,516   4,151   3,755   3,259   3,123    7,667   6,429  
Total noninterest expense  14,417   15,004   13,517   13,493   13,995    29,421   28,222  
Income before income taxes  134   10,251   1,154   1,793   2,536    10,386   5,097  
Income tax expenses (benefit)  (9)  972   (356)  (398)  98    963   419  
Net income $143  $9,279  $1,510  $2,191  $2,438   $9,423  $4,678  
                 
Earnings per common share:                
Basic $0.03  $2.18  $0.36  $0.52  $0.57   $2.21  $1.10  
Diluted $0.03  $2.17  $0.35  $0.51  $0.57   $2.21  $1.10  
                 


Finward Bancorp 
Quarterly Financial Report 
               
Asset Quality (Unaudited) (Unaudited)   (Unaudited) (Unaudited) 
(Dollars in thousands) June 30, March 31, December 31, September 30, June 30, 
     2024 2024 2023 2023 2023 
Nonaccruing loans $11,079  $11,603  $9,608  $9,840 $12,071 
Accruing loans delinquent more than 90 days  294   215   1,843   233  255 
Securities in non-accrual  1,371   1,442   1,357   1,155  1,075 
Foreclosed real estate  -   71   71   71  61 
 Total nonperforming assets $12,744  $13,331  $12,879  $11,299 $13,462 
               
Allowance for credit losses (ACL):           
 ACL specific allowances for collateral dependent loans $1,327  $1,455  $906  $554 $717 
 ACL general allowances for loan portfolio  17,003   17,351   17,862   18,876  18,790 
  Total ACL $18,330  $18,806  $18,768  $19,430 $19,507 
               
               
     (Unaudited) Minimum Required To Be     
     June 30, Well Capitalized Under     
      2024  Prompt Corrective     
     Actual Ratio Action Regulations     
Capital Adequacy Bank           
Common equity tier 1 capital to risk-weighted assets  10.94%       6.50%     
Tier 1 capital to risk-weighted assets  10.94%      8.00%     
Total capital to risk-weighted assets  11.95%      10.00%     
Tier 1 capital to adjusted average assets  8.32%      5.00%     
               



Table 1 - Reconciliation of the Non-GAAP Performance Measures              
               
(Dollars in thousands)Quarter Ended, Six months ended, 
(unaudited)June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 June 30, 2024 June 30, 2023 
Calculation of tangible common equity              
Total stockholder's equity$148,631  $151,581  $147,345  $119,043  $136,750  $148,631  $136,750  
Goodwill (22,395)  (22,395)  (22,395)  (22,395)  (22,395)  (22,395)  (22,395) 
Other intangibles (2,555)  (2,911)  (3,272)  (3,636)  (4,015)  (2,555)  (4,015) 
Tangible common equity$123,681  $126,275  $121,678  $93,012  $110,340  $123,681  $110,340  
               
Calculation of tangible common equity adjusted for accumulated other comprehensive loss             
Tangible common equity$123,681  $126,275  $121,678  $93,012  $110,340  $123,681  $110,340  
Accumulated other comprehensive loss 58,939   56,313   51,613   78,848   60,185   58,939   60,185  
Tangible common equity adjusted for accumulated other comprehensive loss$182,620  $182,588  $173,291  $171,860  $170,525  $182,620  $170,525  
               
Calculation of tangible book value per share              
Tangible common equity$123,681  $126,275  $121,678  $93,012  $110,340  $123,681  $110,340  
Shares outstanding 4,313,940   4,310,251   4,298,773   4,300,881   4,303,766   4,313,940   4,303,766  
Tangible book value per diluted share$28.67  $29.30  $28.31  $21.63  $25.64  $28.67  $25.64  
               
Calculation of tangible book value per diluted share adjusted for accumulated other comprehensive loss             
Tangible common equity adjusted for accumulated other comprehensive loss$182,620  $182,588  $173,291  $171,860  $170,525  $182,620  $170,525  
Diluted average common shares outstanding 4,313,940   4,310,251   4,298,773   4,300,881   4,303,766   4,313,940   4,303,766  
Tangible book value per diluted share adjusted for accumulated other comprehensive loss$42.33  $42.36  $40.31  $39.96  $39.62  $42.33  $39.62  
               
Calculation of tangible common equity to total assets              
Tangible common equity$123,681  $126,275  $121,678  $93,012  $110,340  $123,681  $110,340  
Total assets 2,077,067   2,071,782   2,108,279   2,087,470   2,161,218   2,077,067   2,161,218  
Tangible common equity to total assets 5.95%  6.09%  5.77%  4.46%  5.11%  5.95%  5.11% 
Calculation of tangible common equity to total assets adjusted for accumulated other comprehensive loss             
Tangible common equity adjusted for accumulated other comprehensive loss$182,620  $182,588  $173,291  $171,860  $170,525  $182,620  $170,525  
Total assets 2,077,067   2,071,782   2,108,279   2,087,470   2,161,218   2,077,067   2,161,218  
Tangible common equity to total assets adjusted for accumulated other comprehensive loss 8.79%  8.81%  8.22%  8.23%  7.89%  8.79%  7.89% 
               
Calculation of tax adjusted net interest margin              
Net interest income$12,054  $11,780  $12,715  $13,133  $14,039  $23,834  $28,707  
Tax adjusted interest on securities and loans 677   699   722   730   748   1,376   1,504  
Adjusted net interest income 12,731   12,749   13,437   13,863   14,787   25,210   30,211  
Total average earning assets 1,906,998   1,945,501   1,920,127   1,930,118   1,950,774   1,926,251   1,929,826  
Tax adjusted net interest margin 2.67%  2.57%  2.80%  2.87%  3.03%  2.62%  3.13% 
               
Efficiency ratio              
Total non-interest expense$14,417  $15,004  $13,517  $13,493  $13,995  $29,421  $13,995  
Total revenue 14,627   25,255   15,450   15,530   17,045   39,883   17,045  
Efficiency ratio 98.56%  59.41%  87.49%  86.88%  82.11%  73.77%  82.11% 
               


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