Finward Bancorp Announces Earnings for the Quarter Ended March 31, 2024

/EIN News/ -- MUNSTER, Ind., April 24, 2024 (GLOBE NEWSWIRE) -- Finward Bancorp (Nasdaq: FNWD) (the “Bancorp”), the holding company for Peoples Bank (the “Bank”), today announced that net income available to common stockholders was $9.3 million, or $2.17 per diluted share, for the quarter ended March 31, 2024, as compared to $2.2 million, or $0.51 per diluted share, for the corresponding prior year period. Increases to our profitability results and performance ratio increases reported for quarter ended March 31, 2024 were primarily attributable to the pre-tax non-interest income gain of approximately $11.8 million from the previously-announced sale-leaseback transaction completed on February 22, 2024. Selected performance metrics are as follows for the periods presented:

Performance Ratios		Quarter ended,
		(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
		March 31,		December 31,		September 30,		June 30,		March 31,
		2024		2023		2023		2023		2023
Return on equity		24.97%		4.92%		6.55%		7.05%		6.42%
Return on assets		1.77%		0.29%		0.42%		0.46%		0.43%
Noninterest income / average assets		2.57%		0.53%		0.46%		0.57%		0.50%
Noninterest expense / average assets		2.86%		2.60%		2.59%		2.66%		2.75%
Efficiency ratio		59.41%		87.49%		86.88%		82.11%		82.35%

“Management was focused on high-level strategic initiatives in the first quarter, which resulted in the successful execution of our sale-leaseback transaction. We remain opportunistic with our positioning and were able to sell roughly $15 million in low-yielding securities at minimal incurred loss. This allowed us to deleverage the balance sheet further as we build capital, and will benefit go-forward interest income. We will continue to seek out similar opportunities with minimal execution risk and earnback periods under two years,” said Benjamin Bochnowski, Chief Executive Officer. “Asset quality remains stable as a result of our diligence in underwriting and relationship-based lending. Capital also improved, allowing us to serve our core customers more effectively. We will optimize the balance sheet in a prudent manner, and our strong core deposit base has benefitted our ability to do so,” he added. “While non-interest expenses increased in the first quarter, we are committed to reducing those levels as our efficiency strategies are implemented and deal-related charges normalize. With that in mind, we added staff in key areas such as finance and compliance, which we believe will have a long-term benefit to the company.”

Highlights of the year-to-date period include:

• Net interest margin - The net interest margin for the quarter ended March 31, 2024, was 2.42%, compared to 2.65% for the quarter ended December 31, 2023 and 3.07% for quarter ended March 31, 2023. The tax-adjusted net interest margin (a non-GAAP measure) for the quarter ended March 31, 2024, was 2.57%, compared to 2.80% for the quarter ended December 31, 2023 and 3.23% for the quarter ended March 31, 2023. The decreased net interest margin  compared to March 31, 2023 is primarily the result of the increase in short-term interest rates relative to long-term interest rates as part of the Federal Reserve’s response to high inflation and other factors. 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 - On March 31, 2024, deposits totaled $1.7 billion, compared to $1.8 billion on December 31, 2023, a decrease of $65.9 million or 3.6%. As of March 31, 2024, core deposits totaled $1.2 billion, compared to $1.3 billion on December 31, 2023, a decrease of $65.2 million or 5.1%. Core deposits include checking, savings, and money market accounts and represented 69.6% of the Bancorp’s total deposits at March 31, 2024. On March 31, 2024, balances for certificates of deposit totaled $531.3 million, compared to $532.1 million on December 31, 2023, a decrease of $793 thousand or 0.1%. The decrease in core deposits is primarily related to cyclical inflows and outflows related to certain of the bank’s municipality depositors and planned reduction in deposit pricing. In addition, on March 31, 2024, borrowings and repurchase agreements totaled $131.1 million, compared to $118.1 million at December 31, 2023, an increase of $13.0 million or 11.0%. The increase in short-term borrowings was the result of cyclical inflows and outflows of interest-earning assets and interest-bearing liabilities. During the quarter, the Bancorp repaid an additional $15 million of its outstanding Bank Term Funding Program (the “BTFP”) balance, resulting in a $65 million balance as of March 31, 2024. As of March 31, 2024, 72% of our deposits are fully FDIC insured, and another 7% are further backed by the Indiana Public Deposit Insurance Fund, an overall decrease of 4% from the amount as of December 31, 2023, of 71% of deposits being fully FDIC insured, and 11% 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 March 31,2024, the Bancorp had available liquidity of $500 million including borrowing capacity from the FHLB and Federal Reserve facilities.
  
  
• Securities portfolio - During the quarter ending March 31, 2024, the Bancorp executed a sale of $15.1 million in securities resulting in a $531 thousand realized loss. This transaction was executed to improve future profitability, deleverage the balance sheet through a reduction in borrowings outstanding, and further benefit regulatory capital ratios in subsequent periods. Securities available for sale declined by $14.8 million from $346.2 million as of March 31, 2024, compared to $371.4 million on December 31, 2023. Accumulated other comprehensive losses were $56.3 million as of March 31, 2024, compared to $51.6 million on December 31, 2023, an increase of $4.7 million or 9.1%. The yield on the securities portfolio decreased to 2.37% for the quarter ended March 31, 2024, down from 2.39% for the quarter ended March 31, 2023. Management will continue to monitor the securities portfolio for additional restructuring opportunities.
  
  
• Gain on sale of loans - Increases in mortgage rates have slowed the sale of fixed rate mortgage loans into the secondary market. As a result, gains from the sale of loans for the quarter ended March 31, 2024, totaled $152 thousand, down from $263 thousand for the quarter ended March 31, 2023. During the quarter ended March 31, 2024, the Bank originated $3.8 million in new fixed rate mortgage loans for sale, compared to $8.9 million during the quarter ended March 31, 2023. During the quarter ended March 31, 2024, the Bank originated $3.1 million in new 1-4 family loans retained in its portfolio, compared to $5.7 million during the quarter ended March 31, 2023. Total 1-4 family originations for the quarter ended March 31, 2024, totaled $6.9 million, a decrease of $10.4 million from the amount for the quarter ended March 31, 2023, totaling $17.3 million. This decrease was driven by lower seasonal demand for mortgages, as well as increasing market interest rates 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, and 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 March 31, 2024 and December 31, 2023. During the quarter ended March 31, 2024, the Bank originated $47.9 million in new commercial loans, compared to $63.7 million during the quarter ended March 31, 2023. The loan portfolio represents 78.7% of earning assets and is comprised of 62.1% commercial related credits. At March 31, 2024, the Bancorp’s portfolio loan balances in commercial real estate owner occupied properties totaled $232.7 million or 15.4% of total loan balances and commercial real estate non-owner occupied properties totaled $285.0 million or 18.9% of total loan balances. Of the $285.0 million in commercial real estate non-owner occupied properties balances, loans collateralized by office buildings represented $41.2 million or 2.7% of total loan balances.
  
  
• Asset quality - At March 31, 2024, non-performing loans totaled $11.8 million, compared to $11.5 million at December 31, 2023, an increase of $367 thousand or 3.2%. The Bank’s ratio of non-performing loans to total loans was 0.78% at March 31, 2024, compared to 0.76% at December 31, 2023. The Bank’s ratio of non-performing assets to total assets was 0.64% at March 31, 2024, compared to 0.61% at December 31, 2023. The Bank experienced a minimal increase in non-performing loans at March 31, 2024 of 0.6% compared to non-performing loans at December 31, 2023. Management maintains a vigilant oversight of nonperforming loans through proactive relationship management. The allowance for credit losses (ACL) totaled $18.8 million at March 31, 2024 and is considered adequate by management. For the quarter ended March 31, 2024, charge-offs, net of recoveries, totaled $4 thousand. The allowance for credit losses as a percentage of total loans was 1.25% at March 31, 2024, and the allowance for credit losses as a percentage of non-performing loans, or coverage ratio, was 159.1% at March 31, 2024.
  
  
• Operating Expenses - Non-interest expense as a percent of average assets was 2.86% for the quarter ended March 31, 2024, as compared to 2.75% for quarter ended March 31, 2023. Increases in non-interest expenses during the quarter ended March 31, 2024 were primarily attributable to accounting and service fees associated with CECL loan model review and enhancements, together with higher non-recurring consulting and legal expenses supporting our recent sales-leaseback transaction in February and third-party expenses related to operational enhancements. The Bank remains focused on identifying additional operating expense opportunities and expense reductions through the remainder of this year. Management also continues to maintain discipline in staffing. Compensation and benefits expense is down 5.7% for the quarter ended March 31, 2024, compared to March 31, 2023.
  
  
• Capital Adequacy - As of March 31, 2024, the Bank’s tier 1 capital to adjusted average assets ratio was 8.24% which is within all regulatory capital requirements and an improvement of 0.46% compared to 7.78% at December 31, 2023. The Bank continues to be considered well capitalized. The Bancorp’s tangible book value per share was $29.30 at March 31, 2024, up from $28.31 as of December 31, 2023 (a non-GAAP measure). Tangible common equity to total assets was 6.09% at March 31, 2024, up from 5.77% as of December 31, 2023 (a non-GAAP measure). Excluding accumulated other comprehensive losses, tangible book value per share increased to $42.36 as of March 31, 2024, from $40.31 as of December 31, 2023 (a non-GAAP measure). An adjustment of $2.0 million was also made to tangible equity as a part of the CECL phase-in. 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.
  
  
• Sale-Leaseback Transaction - On February 22, 2024, the Bank closed its previously announced sale-leaseback transaction with MountainSeed Real Estate Services, LLC (the “Buyer”), pursuant to which the Bank sold to the Buyer five properties owned and operated as branch locations (the “Properties”) for an aggregate purchase price of $17.2 million, including customary closing adjustments. The transaction closed in accordance with the Agreement for Purchase and Sale of Property dated January 29, 2024 between the Bank and Buyer (the “Sale Agreement”), which was previously announced in the Current Report on Form 8-K filed by the Bancorp on January 31, 2024. The sale-leaseback transaction resulted in proceeds in excess of book value of the Properties of approximately $11.8 million. Under the Sale Agreement, the Bank also entered into lease agreements (the “Lease Agreements”) with the Buyer under which the Bank leases each of the Properties. Each of the Lease Agreements became effective upon the closing of the sale-leaseback transaction and have an initial term of 15 years. The Bank’s obligations under the Lease Agreements are guaranteed by the Bancorp. The Bank did not close any branches or exit any markets as part of the sale-leaseback transaction. The Bank anticipates using the net proceeds generated from the sale-leaseback transaction for general corporate purposes, including a potential reduction in borrowed funds and associated interest expense costs.
  

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. 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 Ratios					Quarter ended,
					(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
					March 31,				December 31,				September 30,				June 30,				March 31,
						2024				2023				2023				2023				2023
Return on equity						24.97%				4.92%				6.55%				7.05%				6.42%
Return on assets						1.77%				0.29%				0.42%				0.46%				0.43%
Noninterest income / average assets						2.57%				0.53%				0.46%				0.57%				0.50%
Noninterest expense / average assets						2.86%				2.60%				2.59%				2.66%				2.75%
Net noninterest margin / average assets						-0.29%				-2.08%				-2.13%				-2.09%				-2.25%
Efficiency ratio						59.41%				87.49%				86.88%				82.11%				82.35%
Effective tax rate						9.48%				-30.85%				-22.20%				3.86%				12.53%
Non-performing assets to total assets						0.64%				0.61%				0.54%				0.62%				1.02%
Non-performing loans to total loans						0.78%				0.76%				0.66%				0.80%				1.34%
Allowance for credit losses to non-performing loans						159.12%				163.90%				192.89%				158.26%				96.15%
Allowance for credit losses to loans outstanding						1.25%				1.24%				1.27%				1.27%				1.29%
Foreclosed real estate to total assets						0.00%				0.00%				0.00%				0.00%				0.00%
Basic earnings per share					$2.18				$0.36				$0.52				$0.57				$0.52
Diluted earnings per share					$2.17				$0.35				$0.51				$0.57				$0.51
Stockholders' equity / total assets						7.32%				6.99%				5.70%				6.33%				6.66%
Book value per share					$35.17				$34.28				$27.68				$31.77				$32.47
Closing stock price					$24.60				$25.24				$22.00				$22.00				$29.10
Price to earnings per share ratio						2.82				17.77				10.67				9.59				14.10
Dividend declared per common share					$0.12				$0.12				$0.31				$0.31				$0.31
Common equity tier 1 capital to risk-weighted assets						10.89%				10.43%				10.17%				10.00%				10.11%
Tier 1 capital to risk-weighted assets						10.89%				10.43%				10.17%				10.00%				10.11%
Total capital to risk-weighted assets						11.92%				11.36%				11.12%				10.96%				10.92%
Tier 1 capital to adjusted average assets						8.24%				7.78%				7.81%				7.58%				7.65%
Non-GAAP Performance Ratios					Quarter ended,
					(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
					March 31,				December 31,				September 30,				June 30,				March 31,
						2024				2023				2023				2023				2023
Net interest margin - tax equivalent						2.57%				2.80%				2.87%				3.03%				3.23%
Tangible book value per diluted share					$29.30				$28.31				$21.63				$25.64				$26.24
Tangible book value per diluted share adjusted for AOCI					$42.36				$40.31				$39.96				$39.62				$39.23
Tangible common equity to total assets						6.09%				5.77%				4.46%				5.11%				5.38%
Tangible common equity to total assets adjusted for AOCI						8.81%				8.22%				8.23%				7.89%				8.05%

Quarter Ended
(Dollars in thousands)	Average Balances, Interest, and Rates
(unaudited)	March 31, 2024									March 31, 2023
	Average Balance				Interest			Rate (%)		Average Balance				Interest			Rate (%)
ASSETS
Interest bearing deposits in other financial institutions	$	68,935			$	853		4.95		$	15,200			$	183		4.82
Federal funds sold		814				10		4.91			836				8		3.83
Certificates of deposit in other financial institutions		-				-		-			2,455				16		2.61
Securities available-for-sale		365,194				2,161		2.37			373,548				2,234		2.39
Securities held-to-maturity		-				-		-			-				-		-
Loans receivable		1,504,011				18,879		5.02			1,510,061				17,626		4.67
Federal Home Loan Bank stock		6,547				82		5.01			6,547				69		4.22
Total interest earning assets		1,945,501			$	21,985		4.52			1,908,647			$	20,136		4.22
Cash and non-interest bearing deposits in other financial institutions		18,230									15,821
Allowance for credit losses		(18,743	)								(13,157	)
Other noninterest bearing assets		151,945									155,944
Total assets	$	2,096,933								$	2,067,255
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing deposits	$	1,487,771			$	8,794		2.36		$	1,429,776			$	4,087		1.14
Repurchase agreements		38,151				370		3.88			18,270				121		2.65
Borrowed funds		90,053				1,040		4.62			106,406				1,260		4.74
Total interest bearing liabilities		1,615,975			$	10,204		2.53			1,554,452			$	5,468		1.41
Non-interest bearing deposits		294,398									348,037
Other noninterest bearing liabilities		37,897									25,198
Total liabilities		1,948,270									1,927,687
Total stockholders' equity		148,663									139,568
Total liabilities and stockholders' equity	$	2,096,933								$	2,067,255
Return on average assets		1.77	%								0.43	%
Return on average equity		24.97	%								6.42	%
Net interest margin (average earning assets)		2.42	%								3.07	%
Net interest margin (average earning assets) - tax equivalent		2.57	%								3.23	%
Net interest spread		1.99	%								2.81	%
Net interest margin		2.42	%								3.07	%
Ratio of interest-earning assets to interest-bearing liabilities	1.20x									1.23x

 

Finward Bancorp
Quarterly Financial Report
Balance Sheet Data
(Dollars in thousands)					(Unaudited)								(Unaudited)				(Unaudited)				(Unaudited)
					March 31,				December 31,				September 30,				June 30,				March 31,
						2024				2023				2023				2023				2023
ASSETS
Cash and non-interest bearing deposits in other financial institutions					$	16,418			$	17,942			$	17,922			$	23,210			$	33,785
Interest bearing deposits in other financial institutions						54,755				67,647				52,875				89,706				20,342
Total cash and cash equivalents						71,780				86,008				71,648				115,673				54,781
Certificates of deposit in other financial institutions						-				-				-				-				2,452
Securities available-for-sale						346,233				371,374				339,280				368,136				377,901
Loans held-for-sale						667				340				2,057				1,832				1,672
Loans receivable, net of deferred fees and costs						1,508,251				1,512,595				1,525,660				1,534,161				1,521,089
Less: allowance for credit losses (1)						(18,805	)			(18,768	)			(19,430	)			(19,507	)			(19,568	)
Net loans receivable						1,489,446				1,493,827				1,506,230				1,514,654				1,501,521
Federal Home Loan Bank stock						6,547				6,547				6,547				6,547				6,547
Accrued interest receivable						7,583				8,045				7,864				7,714				7,717
Premises and equipment						47,795				38,436				38,810				39,204				39,732
Foreclosed real estate						71				71				71				71				64
Cash value of bank owned life insurance						32,895				32,702				32,509				32,316				32,115
Goodwill						22,395				22,395				22,395				22,395				22,395
Other intangible assets						2,911				3,272				3,636				4,015				4,402
Other assets						43,459				45,262				56,423				48,661				47,293
Total assets					$	2,071,782			$	2,108,279			$	2,087,470			$	2,161,218			$	2,098,592
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing					$	296,959			$	295,594			$	312,635			$	315,671			$	330,057
Interest bearing						1,450,519				1,517,827				1,471,402				1,479,476				1,476,053
Total						1,747,478				1,813,421				1,784,037				1,795,147				1,806,110
Repurchase agreements						41,137				38,124				48,310				46,402				28,423
Borrowed funds						90,000				80,000				100,000				150,000				100,000
Accrued expenses and other liabilities						41,586				29,389				36,080				32,919				24,323
Total liabilities						1,920,201				1,960,934				1,968,427				2,024,468				1,958,856
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						-				-				-				-				-
Additional paid-in capital						69,727				69,555				69,482				69,384				69,182
Accumulated other comprehensive loss						(56,313	)			(51,613	)			(78,848	)			(60,185	)			(55,895	)
Retained earnings						138,167				129,403				128,409				127,551				126,449
Total stockholders' equity						151,581				147,345				119,043				136,750				139,736
Total liabilities and stockholders' equity					$	2,071,782			$	2,108,279			$	2,087,470			$	2,161,218			$	2,098,592

 

Finward Bancorp
Quarterly Financial Report
Consolidated Statements of Income		Quarter Ended,
(Dollars in thousands)		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
		March 31,				December 31,				September 30,				June 30,				March 31,
		2024				2023				2023				2023				2023
Interest income:
Loans		$	18,879			$	19,281			$	19,161			$	18,694			$	17,626
Securities & short-term investments			3,105				2,975				2,617				2,919				2,510
Total interest income			21,984				22,256				21,778				21,613				20,136
Interest expense:
Deposits			8,794				8,180				7,066				6,105				4,087
Borrowings			1,410				1,361				1,579				1,469				1,381
Total interest expense			10,204				9,541				8,645				7,574				5,468
Net interest income			11,780				12,715				13,133				14,039				14,668
Provision for credit losses			-				779				244				514				488
Net interest income after provision for credit losses			11,780				11,936				12,889				13,525				14,180
Noninterest income:
Fees and service charges			1,153				1,507				1,374				1,832				1,311
Wealth management operations			633				672				572				626				614
Gain on sale of loans held-for-sale, net			152				352				192				274				263
Increase in cash value of bank owned life insurance			193				193				193				201				179
Gain (loss) on sale of real estate			11,858				-				2				(15	)			-
Loss on sale of securities, net			(531	)			-				-				(48	)			-
Other			17				11				64				136				241
Total noninterest income			13,475				2,735				2,397				3,006				2,608
Noninterest expense:
Compensation and benefits			7,109				6,290				6,729				7,098				7,538
Occupancy and equipment			1,915				1,520				1,711				1,636				1,690
Data processing			1,170				1,269				1,085				1,407				973
Federal deposit insurance premiums			501				492				474				572				465
Marketing			158				191				235				159				255
Other			4,151				3,755				3,259				3,123				3,306
Total noninterest expense			15,004				13,517				13,493				13,995				14,227
Income before income taxes			10,251				1,154				1,793				2,536				2,561
Income tax expenses (benefit)			972				(356	)			(398	)			98				321
Net income		$	9,279			$	1,510			$	2,191			$	2,438			$	2,240
Earnings per common share:
Basic		$	2.18			$	0.36			$	0.52			$	0.57			$	0.52
Diluted		$	2.17			$	0.35			$	0.51			$	0.57			$	0.51

Finward Bancorp
Quarterly Financial Report
Asset Quality					(Unaudited)								(Unaudited)			(Unaudited)
(Dollars in thousands)					March 31,				December 31,				September 30,			June 30,			March 31,
						2024				2023				2023			2023			2023
Nonaccruing loans					$	11,603			$	9,608			$	9,840		$	12,071		$	19,473
Accruing loans delinquent more than 90 days						215				1,843				233			255			878
Securities in non-accrual						1,442				1,357				1,155			1,075			1,017
Foreclosed real estate						71				71				71			61			60
	Total nonperforming assets				$	13,331			$	12,879			$	11,299		$	13,462		$	21,428
Allowance for credit losses (ACL):
	ACL specific allowances for collateral dependent loans				$	1,455			$	906			$	554		$	717		$	1,075
	ACL general allowances for loan portfolio					17,351				17,862				18,876			18,790			18,493
		Total ACL			$	18,806			$	18,768			$	19,430		$	19,507		$	19,568
					(Unaudited)
					March 31,				Required
						2024			To Be Well
					Actual Ratio				Capitalized
Capital Adequacy Bank
Common equity tier 1 capital to risk-weighted assets						10.89%				6.50%
Tier 1 capital to risk-weighted assets						10.89%				8.00%
Total capital to risk-weighted assets						11.92%				10.00%
Tier 1 capital to adjusted average assets						8.24%				5.00%

 

		Table 1 - Reconciliation of the Non-GAAP Performance Measures
		(Dollars in thousands)	Quarter Ended,
		(unaudited)	March 31, 2024				March 31, 2023
		Calculation of tangible common equity
		Total stockholder's equity	$	151,581			$	139,736
		Goodwill		(22,395	)			(22,395	)
		Other intangibles		(2,911	)			(4,402	)
(A)		Tangible common equity	$	126,275			$	112,939
		Calculation of tangible common equity adjusted for accumulated other comprehensive loss
(A)		Tangible common equity	$	126,275			$	112,939
		Accumulated other comprehensive loss		56,313				55,895
(B)		Tangible common equity adjusted for accumulated other comprehensive loss	$	182,588			$	168,834
		Calculation of tangible book value per share
(A)		Tangible common equity	$	126,275			$	112,939
		Shares outstanding		4,310,251				4,304,026
		Tangible book value per diluted share	$	29.30			$	26.24
		Calculation of tangible book value per diluted share adjusted for accumulated other comprehensive loss
(B)		Tangible common equity adjusted for accumulated other comprehensive loss	$	182,588			$	168,834
		Diluted average common shares outstanding		4,310,251				4,304,026
		Tangible book value per diluted share adjusted for accumulated other comprehensive loss	$	42.36			$	39.23
		Calculation of tangible common equity to total assets
(A)		Tangible common equity	$	126,275			$	112,939
		Total assets		2,071,782				2,098,592
		Tangible common equity to total assets		6.09	%			5.38	%
		Calculation of tangible common equity to total assets
(B)		Tangible common equity adjusted for accumulated other comprehensive loss	$	182,588			$	168,834
		Total assets		2,071,782				2,098,592
		Tangible common equity to total assets adjusted for accumulated other comprehensive loss		8.81	%			8.05	%
		Calculation of tax adjusted net interest margin
		Net interest income	$	11,780			$	14,668
		Tax adjusted interest on securities and loans		722				756
		Adjusted net interest income		12,502				15,424
		Total average earning assets		1,945,501				1,908,647
		Tax adjusted net interest margin		2.57	%			3.23	%
		Efficiency ratio
		Total non-interest expense	$	15,004			$	14,227
		Total revenue		25,255				17,276
		Efficiency ratio		59.41	%			82.35	%

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