Finward Bancorp Announces Earnings for the Quarter and Twelve Months Ended December 31, 2024

Rhea-AI Summary

Finward Bancorp (FNWD) reported net income of $12.1 million ($2.84 per diluted share) for the year ended December 31, 2024, up from $8.4 million ($1.96 per diluted share) in 2023. Fourth quarter 2024 net income was $2.1 million ($0.49 per diluted share), compared to $606,000 in Q3 2024 and $1.5 million in Q4 2023.

The bank's net interest margin improved to 2.65% in Q4 2024 from 2.51% in Q3 2024, driven by increased loan portfolio yields and reduced deposit costs. Total deposits reached $1.8 billion, with 72% fully FDIC insured. The loan portfolio remained stable at $1.5 billion, with commercial-related credits comprising 63% of total loans.

Asset quality metrics showed non-performing loans at $13.7 million (0.91% of total loans). The bank recorded a net negative provision for credit loss of $579,000 in Q4 2024, while net charge-offs totaled $2.2 million. The tier 1 capital ratio improved to 8.46% from 8.38% in Q3 2024.

Positive

• Net income increased 44% YoY to $12.1 million in 2024
• Net interest margin improved to 2.65% in Q4 from 2.51% in Q3 2024
• Tier 1 capital ratio improved to 8.46% from 8.38% in Q3 2024
• One-time gain of $1.2 million from tax credit investment in Q4

Negative

• Net charge-offs increased to $2.2 million in Q4 2024
• Non-interest bearing deposits decreased 7.7% QoQ
• Year-over-year net interest margin declined from 2.83% to 2.54%
• Tangible book value per share decreased to $29.48 from $31.28 in Q3 2024

Insights

Financial Analyst

The Q4 2024 results reveal a robust financial performance with several noteworthy developments:

The standout metric is the 44% year-over-year increase in full-year earnings to $12.1 million, demonstrating significant operational improvement. The quarterly progression is particularly telling - net income surged 246% from Q3 to Q4 2024, partly boosted by a $1.2 million one-time gain from a tax credit investment.

Credit quality metrics warrant attention: The $2.2 million in net charge-offs during Q4, primarily from commercial loans, indicates some portfolio stress. However, the maintained non-performing loans ratio of 0.91% and coverage ratio of 123.1% suggest adequate risk management.

The funding profile shows strategic positioning:

• Core deposits remain stable at $1.2 billion, representing 68.2% of total deposits
• 72% of deposits are FDIC-insured, with an additional 9% backed by state insurance
• Reduced borrowings by 17.9% quarter-over-quarter indicates improved liquidity management

The efficiency ratio of 87.20% in Q4, while improved from Q3's 97.32%, suggests room for operational optimization. The bank's focus on expense management is evident in the declining non-interest expense ratio, but further improvements could enhance profitability.

Capital levels remain solid with Tier 1 capital ratio at 8.46%, though tangible book value per share declined to $29.48 from $31.28, primarily due to increased accumulated other comprehensive losses.

MUNSTER, Ind., Jan. 28, 2025 (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 $12.1 million, or $2.84 per diluted share, for the twelve months ended December 31, 2024, as compared to $8.4 million, or $1.96 per diluted share, for the corresponding prior year period. For the three months ended December 31, 2024, the Bancorp’s net income totaled $2.1 million, or $0.49 per diluted share, as compared to $606 thousand, or $0.14 per diluted share, for the three months ended September 30, 2024, and as compared to $1.5 million, or $0.35 per diluted share, for the three months ended December 31, 2023. Selected performance metrics are as follows for the periods presented:

Performance Ratios		Quarter ended,										Twelve months ended,
		(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
		December 31,		September 30,		June 30,		March 31,		December 31,		December 31,		December 31,
		2024		2024		2024		2024		2023		2024		2023
Return on equity		5.39%		1.60%		0.39%		24.97%		4.92%		8.06%		6.28%
Return on assets		0.41%		0.12%		0.03%		1.77%		0.29%		0.58%		0.40%
Tax adjusted net interest margin (Non-GAAP)		2.79%		2.66%		2.67%		2.57%		2.80%		2.68%		2.98%
Noninterest income / average assets		0.72%		0.55%		0.50%		2.57%		0.53%		1.09%		0.52%
Noninterest expense / average assets		2.75%		2.80%		2.79%		2.86%		2.60%		2.80%		2.65%
Efficiency ratio		87.20%		97.32%		98.56%		59.41%		87.49%		81.78%		84.58%

“The Bank ended the year with continued improvement in its overall positioning and increased momentum for 2025,” said Benjamin Bochnowski, chief executive officer. “We improved regulatory capital throughout the year through balance sheet management and earnings and had the benefit of one-time income including our sale leaseback transaction early in the year and a gain on a long-held tax credit investment this past quarter. Net interest margin improved throughout 2024 as expected, based on our earning asset position and reduced funding costs driven by recent Federal Reserve interest rate policy,” he continued. “The Bank charged off a small number of commercial business loans in the 4th quarter, and management will continue to actively manage credit quality,” he concluded.  

Highlights of the current period include:

• Net Interest Margin - The net interest margin for the three months ended December 31, 2024, was 2.65%, compared to 2.51% for the three months ended September 30, 2024. The tax-adjusted net interest margin (a non-GAAP measure) for the three months ended December 31, 2024, was 2.79%, compared to 2.66% for the three months ended September 30, 2024. The net interest margin for the twelve months ended December 31, 2024, was 2.54%, compared to 2.83% for the twelve months ended December 31, 2023. The tax-adjusted net interest margin (a non-GAAP measure) for the twelve months ended December 31, 2024, was 2.68%, compared to 2.98% for the twelve months ended December 31, 2023. The increased net interest margin for the three months ended December 31, 2024 compared to September 30, 2024 is primarily the result of increased yields on the Bank’s loan portfolio, combined with reduced deposit and borrowing costs as a result of the Federal Reserve’s continued reduction of federal funds rates during the quarter. 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 December 31, 2024, deposits totaled $1.8 billion, an increase of $11.8 million or 0.7%, compared to September 30, 2024. As of December 31, 2024, non-interest-bearing deposits totaled $263.3 million, a decrease of $21.8 million or 7.7%, compared to September 30, 2024. Core deposits totaled $1.2 billion at both December 31, 2024, and September 30, 2024. Core deposits include checking, savings, and money market accounts and represented 68.2% of the Bancorp’s total deposits at December 31, 2024. As of December 31, 2024, balances for certificates of deposit totaled $560.3 million, compared to $562.2 million on September 30, 2024, a decrease of $2.0 million or 0.4%. The increase in total portfolio deposits is primarily related to cyclical flows and continued adjustments to deposit pricing. The decrease in non-interest-bearing deposits is primarily attributable to regular outflow of business-related checking deposits at year-end which tend to return in subsequent periods. In addition, as of December 31, 2024, borrowings and repurchase agreements totaled $105.0 million, a decrease of $22.9 million or 17.9%, compared to September 30, 2024. The decrease in short-term borrowings was the result of cyclical inflows and outflows of interest-earning assets and interest-bearing liabilities.
  
  As of December 31, 2024, 72% of our deposits are fully FDIC insured, and another 9% 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, contractual loan repayments, and access to diversified borrowing sources. As of December 31, 2024, the Bancorp had available liquidity of $687 million including borrowing capacity from the FHLB and Federal Reserve facilities.

• Securities Portfolio - Securities available for sale balances decreased by $16.5 million to $333.6 million as of December 31, 2024, compared to $350.0 million as of September 30, 2024.  The decrease in securities available for sale was due to a combination of portfolio runoff and an increase of accumulated other comprehensive loss ("AOCL"). AOCL was $58.1 million as of December 31, 2024, compared to $48.2 million on September 30, 2024, a decline of $9.8 million, or 20.4%. The yield on the securities portfolio decreased to 2.34% for the three months ended December 31, 2024, down from 2.37% for the three months ended September 30, 2024. Management did not execute any securities sale transactions during the quarter but will continue to monitor the securities portfolio for additional restructuring opportunities.

• Lending - The Bank’s aggregate loan portfolio totaled $1.5 billion on both December 31, 2024, and September 30, 2024. During the three months ended December 31, 2024, the Bank originated $59.2 million in new commercial loans, compared to $70.4 million during the three months ended September 30, 2024, and $47.5 million during the three months ended December 31, 2023. The loan portfolio represents 79.3% of earning assets and is comprised of 63.0% commercial-related credits. At December 31, 2024, the Bancorp’s portfolio loan balances in commercial real estate owner occupied properties totaled $246.6 million or 16.3% of total loan balances and commercial real estate non-owner-occupied properties totaled $305.1 million or 20.2% of total loan balances. Of the $305.1 million in commercial real estate non-owner-occupied properties balances, loans collateralized by office buildings represented $38.5 million or 2.5% of total loan balances.

• Gain on Sale of Loans - Gains from the sale of loans totaled $1.1 million for both the twelve months ended December 31, 2024, and 2023. During the twelve months ended December 31, 2024, the Bank originated $36.8 million in new fixed rate mortgage loans for sale, compared to $38.0 million during the twelve months ended December 31, 2023. During the twelve months ended December 31, 2024, the Bank originated $27.4 million in new 1-4 family loans retained in its portfolio, compared to $41.6 million during the twelve months ended December 31, 2023. Total 1-4 family originations for the quarter ended December 31, 2024, totaled $25.4 million, an increase of $5.3 million compared to $20.1 million for the quarter ended September 30, 2024. The 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.

• Gain on Tax Credit Investment - During the three months ended December 31, 2024, the Bank successfully concluded a long term, non-controlling interest in a partnership established to facilitate tax credit investments. Upon the termination of the partnership, the Bank recognized a one-time gain of $1.2 million recognized through noninterest income. The proceeds from the dissolution of this tax credit investment will contribute to the Bank’s financial position, thereby supporting ongoing strategic initiatives and operational priorities.

• Asset Quality - At December 31, 2024, non-performing loans totaled $13.7 million, compared to $13.8 million at September 30, 2024, a decrease of $68 thousand or 0.5%. The Bank’s ratio of non-performing loans to total loans was 0.91% at December 31, 2024, compared to 0.92% at September 30, 2024. The Bank’s ratio of non-performing assets to total assets was 0.74% at December 31, 2024, compared to 0.73% at September 30, 2024. Management maintains a vigilant oversight of nonperforming loans through proactive relationship management.
  
  The allowance for credit losses (ACL) on loans totaled $16.9 million at December 31, 2024, or 1.12% of total loans receivable, compared to $18.5 million at September 30, 2024, or 1.23% of total loans receivable, a decrease of $1.6 million or 8.7% and is considered adequate by management. The Bank’s unused commitment reserve, included in other liabilities, totaled $2.7 million at December 31, 2024, compared to $3.9 million at September 30, 2024, a decrease of $1.2 million or 30%.
  
  For the quarter ended December 31, 2024, the Bank recorded a net negative provision for credit loss expense totaling $579 thousand based on a decline in individually assessed loans balances, historical loss rate updates, migration of loan and unfunded commitment segment balances, and other factors within the Bank’s ACL modeling. The fourth quarter’s provision expense consisted of a $597 thousand provision for credit losses on loans, and a $1.2 million reversal of provision for credit losses on unused commitments. The decrease in the Bank’s unused commitment reserve was primarily due to reduced unused commitment balances and other factors. For the quarter ended December 31, 2024, net charge-offs, totaled $2.2 million. Most of these charge-offs involved a small number of commercial or multifamily-related loans which were previously monitored and had specific allocations toward individual impairment or contributed to higher expected loss rates within the Bank’s prior ACL balance. For the quarter ended September 30, 2024, the Bank recorded no provision expense and recoveries, net of charge-offs, totaled $186 thousand. The ACL as a percentage of non-performing loans, or coverage ratio, was 123.1% at December 31, 2024 compared to 134.1% at September 30, 2024.

• Operating Expenses - Non-interest expense as a percentage of average assets was 2.75% for the quarter ended December 31, 2024, as compared to 2.80% for the quarter ended September 30, 2024. Decreases in non-interest expenses quarter over quarter were primarily attributable to reduced compensation and benefit expenses, and lower occupancy and equipment expenses. The Bank remains focused on identifying additional operating efficiencies and third-party expense reductions. Compensation and benefits expense is up 0.3% for the twelve months ended December 31, 2024, compared to December 31, 2023.

• Capital Adequacy - As of December 31, 2024, the Bank’s tier 1 capital to adjusted average assets ratio was 8.46%, an improvement of 0.08% compared to 8.38% at September 30, 2024. The Bank’s capital continues to exceed all applicable regulatory capital requirements as set forth in 12 C.F.R. § 324. The Bancorp’s tangible book value per share was $29.48 at December 31, 2024, down from $31.28 as of September 30, 2024 (a non-GAAP measure). Tangible common equity to total assets was 6.17% at December 31, 2024, down from 6.51% as of September 30, 2024 (a non-GAAP measure). Excluding accumulated other comprehensive losses, tangible book value per share increased to $42.94 as of December 31, 2024, from $42.47 as of September 30, 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 other accumulated comprehensive 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; the aggregate effects of inflation experienced in recent years; 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,																				Twelve months ended,
		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
		December 31,				September 30,				June 30,				March 31,				December 31,				December 31,				December 31,
			2024				2024				2024				2024				2023				2024				2023
Return on equity			5.39	%			1.60	%			0.39	%			24.97	%			4.92	%			8.06	%			6.28	%
Return on assets			0.41	%			0.12	%			0.03	%			1.77	%			0.29	%			0.58	%			0.40	%
Yield on loans			5.27	%			5.22	%			5.11	%			5.02	%			5.09	%			5.15	%			4.92	%
Yield on security investments			2.34	%			2.37	%			2.43	%			2.37	%			2.57	%			2.38	%			2.43	%
Total yield on earning assets			4.74	%			4.70	%			4.64	%			4.52	%			4.64	%			4.67	%			4.45	%
Cost of interest-bearing deposits			2.41	%			2.47	%			2.37	%			2.36	%			2.22	%			2.40	%			1.74	%
Cost of repurchase agreements			3.65	%			4.04	%			3.86	%			3.88	%			3.78	%			3.85	%			3.64	%
Cost of borrowed funds			4.31	%			4.56	%			4.95	%			4.62	%			4.41	%			4.62	%			4.55	%
Total cost of interest-bearing liabilities			2.53	%			2.63	%			2.55	%			2.53	%			2.38	%			2.56	%			1.96	%
Tax adjusted net interest margin (Non-GAAP)			2.79	%			2.66	%			2.67	%			2.57	%			2.80	%			2.68	%			2.98	%
Noninterest income / average assets			0.72	%			0.55	%			0.50	%			2.57	%			0.53	%			1.09	%			0.52	%
Noninterest expense / average assets			2.75	%			2.80	%			2.79	%			2.86	%			2.60	%			2.80	%			2.65	%
Net noninterest margin / average assets			-2.03	%			-2.24	%			-2.29	%			-0.29	%			-2.08	%			-1.71	%			-2.14	%
Efficiency ratio			87.20	%			97.32	%			98.56	%			59.41	%			87.49	%			81.78	%			84.58	%
Effective tax rate			21.30	%			-51.88	%			-6.72	%			9.48	%			-30.85	%			9.85	%			-4.16	%
Non-performing assets to total assets			0.74	%			0.73	%			0.61	%			0.64	%			0.61	%			0.74	%			0.61	%
Non-performing loans to total loans			0.91	%			0.92	%			0.75	%			0.78	%			0.76	%			0.91	%			0.76	%
Allowance for credit losses to non-performing loans			123.10	%			134.12	%			161.17	%			159.12	%			163.90	%			123.10	%			163.90	%
Allowance for credit losses to loans receivable			1.12	%			1.23	%			1.22	%			1.25	%			1.24	%			1.12	%			1.24	%
Foreclosed real estate to total assets			0.00	%			0.00	%			0.00	%			0.00	%			0.00	%			0.00	%			0.00	%
Basic earnings per share		$	0.49			$	0.14			$	0.03			$	2.18			$	0.36			$	2.85			$	1.96
Diluted earnings per share		$	0.49			$	0.14			$	0.03			$	2.17			$	0.35			$	2.84			$	1.96
Stockholders' equity / total assets			7.35	%			7.69	%			7.16	%			7.32	%			6.99	%			7.35	%			6.99	%
Book value per share		$	35.10			$	36.99			$	34.45			$	35.17			$	34.28			$	35.10			$	34.28
Closing stock price		$	28.11			$	31.98			$	24.52			$	24.60			$	25.24			$	28.11			$	25.24
Price to earnings per share ratio			14.25				56.21				182.60				2.82				17.77				9.87				12.87
Dividends declared per common share		$	0.12			$	0.12			$	0.12			$	0.12			$	0.12			$	0.48			$	1.05
Bank Level Capital
Common equity tier 1 capital to risk-weighted assets			11.32	%			11.10	%			10.94	%			10.89	%			10.43	%			11.32	%			10.43	%
Tier 1 capital to risk-weighted assets			11.32	%			11.10	%			10.94	%			10.89	%			10.43	%			11.32	%			10.43	%
Total capital to risk-weighted assets			12.26	%			12.14	%			11.95	%			11.92	%			11.36	%			12.26	%			11.36	%
Tier 1 capital to adjusted average assets			8.46	%			8.38	%			8.32	%			8.24	%			7.78	%			8.46	%			7.78	%
Non-GAAP Performance Ratios		Quarter ended,																				Twelve months ended,
		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
		December 31,				September 30,				June 30,				March 31,				December 31,				December 31,				December 31,
			2024				2024				2024				2024				2023				2024				2023
Net interest margin - tax equivalent			2.79	%			2.66	%			2.67	%			2.57	%			2.80	%			2.68	%			2.98	%
Tangible book value per diluted share		$	29.48			$	31.28			$	28.67			$	29.30			$	28.31			$	29.48			$	28.31
Tangible book value per diluted share adjusted for AOCL		$	42.94			$	42.47			$	42.33			$	42.36			$	40.31			$	42.94			$	40.31
Tangible common equity to total assets			6.17	%			6.51	%			5.95	%			6.09	%			5.77	%			6.17	%			5.77	%
Tangible common equity to total assets adjusted for AOCL			8.99	%			8.83	%			8.79	%			8.81	%			8.22	%			8.99	%			8.22	%
(1) Tax adjusted net interest margin represents a non-GAAP financial measure. See the non-GAAP reconciliation table section captioned “Non-GAAP Financial Measures” for further disclosure regarding non-GAAP financial measures

Quarter Ended
(Dollars in thousands)	Average Balances, Interest, and Rates
(unaudited)	December 31, 2024									September 30, 2024
	Average Balance				Interest			Rate (%)		Average Balance				Interest			Rate (%)
ASSETS
Interest bearing deposits in other financial institutions	$	50,271			$	650		5.17		$	54,084			$	665		4.92
Federal funds sold		891				9		4.04			682				9		5.28
Securities available-for-sale		343,411				2,011		2.34			342,451				2,031		2.37
Loans receivable		1,504,233				19,802		5.27			1,506,967				19,660		5.22
Federal Home Loan Bank stock		6,547				123		7.51			6,547				107		6.54
Total interest earning assets		1,905,353			$	22,595		4.74			1,910,731			$	22,472		4.70
Cash and non-interest bearing deposits in other financial institutions		27,360									22,478
Allowance for credit losses		(18,110	)								(18,482	)
Other noninterest bearing assets		154,707									155,997
Total assets	$	2,069,310								$	2,070,724
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing deposits	$	1,465,198			$	8,811		2.41		$	1,451,414			$	8,946		2.47
Repurchase agreements		43,372				396		3.65			43,074				435		4.04
Borrowed funds		72,536				781		4.31			95,224				1,085		4.56
Total interest bearing liabilities		1,581,106			$	9,988		2.53			1,589,712			$	10,466		2.63
Non-interest bearing deposits		289,467									287,507
Other noninterest bearing liabilities		42,944									41,696
Total liabilities		1,913,517									1,918,915
Total stockholders' equity		155,793									151,809
Total liabilities and stockholders' equity	$	2,069,310								$	2,070,724
Net interest income					$	12,607								$	12,006
Return on average assets		0.41	%								0.12	%
Return on average equity		5.39	%								1.60	%
Net interest margin (average earning assets)		2.65	%								2.51	%
Net interest margin (average earning assets) - tax equivalent		2.79	%								2.66	%
Net interest spread		2.21	%								2.07	%
Ratio of interest-earning assets to interest-bearing liabilities	1.21		x							1.20		x
Year-to-Date
(Dollars in thousands)	Average Balances, Interest, and Rates
(unaudited)	December 31, 2024									September 30, 2024
	Average Balance				Interest			Rate (%)		Average Balance				Interest			Rate (%)
ASSETS					`
Interest bearing deposits in other financial institutions	$	51,202			$	2,967		5.79		$	61,107			$	2,317		5.06
Federal funds sold		912				38		4.17			919				29		4.21
Securities available-for-sale		347,048				8,250		2.38			348,269				6,239		2.39
Loans receivable		1,504,206				77,515		5.15			1,504,197				57,713		5.12
Federal Home Loan Bank stock		6,547				408		6.23			6,547				285		5.80
Total interest earning assets		1,909,915			$	89,178		4.67			1,921,039			$	66,583		4.62
Cash and non-interest bearing deposits in other financial institutions		28,730									19,598
Allowance for credit losses		(18,529	)								(18,670	)
Other noninterest bearing assets		155,251									155,433
Total assets	$	2,075,367								$	2,077,400
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing deposits	$	1,462,039			$	35,161		2.40		$	1,464,682			$	26,350		2.40
Repurchase agreements		41,506				1,600		3.85			40,879				1,204		3.93
Borrowed funds		85,927				3,970		4.62			90,423				3,189		4.70
Total interest bearing liabilities		1,589,472			$	40,731		2.56			1,595,984			$	30,743		2.57
Non-interest bearing deposits		293,508									291,161
Other noninterest bearing liabilities		41,893									41,540
Total liabilities		1,924,873									1,928,685
Total stockholders' equity		150,494									148,715
Total liabilities and stockholders' equity	$	2,075,367								$	2,077,400
Net interest income					$	48,447								$	35,840
Return on average assets		0.58	%								0.64	%
Return on average equity		8.06	%								4.50	%
Net interest margin (average earning assets)		2.54	%								2.49	%
Net interest margin (average earning assets) - tax equivalent		2.68	%								2.63	%
Net interest spread		2.11	%								2.05	%
Ratio of interest-earning assets to interest-bearing liabilities	1.20		x							1.20		x

Finward Bancorp
Quarterly Financial Report
Balance Sheet Data
(Dollars in thousands)			(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
			December 31,				September 30,				June 30,				March 31,				December 31,
				2024				2024				2024				2024				2023
ASSETS
Cash and non-interest bearing deposits in other financial institutions			$	17,883			$	23,071			$	19,061			$	16,418			$	17,942
Interest bearing deposits in other financial institutions				52,047				48,025				63,439				54,755				67,647
Federal funds sold				654				553				707				607				419
Total cash and cash equivalents				70,584				71,649				83,207				71,780				86,008
Securities available-for-sale				333,554				350,027				339,585				346,233				371,374
Loans held-for-sale				1,253				2,567				1,185				667				340
Loans receivable, net of deferred fees and costs				1,508,976				1,508,242				1,506,398				1,508,251				1,512,595
Less: allowance for credit losses				(16,911	)			(18,516	)			(18,330	)			(18,805	)			(18,768	)
Net loans receivable				1,492,065				1,489,726				1,488,068				1,489,446				1,493,827
Federal Home Loan Bank stock				6,547				6,547				6,547				6,547				6,547
Accrued interest receivable				7,721				7,442				7,695				7,583				8,045
Premises and equipment				47,259				47,912				48,696				47,795				38,436
Foreclosed real estate				-				-				-				71				71
Cash value of bank owned life insurance				33,514				33,312				33,107				32,895				32,702
Goodwill				22,395				22,395				22,395				22,395				22,395
Other intangible assets				1,860				2,203				2,555				2,911				3,272
Other assets				43,947				40,882				44,027				43,459				45,262
Total assets			$	2,060,699			$	2,074,662			$	2,077,067			$	2,071,782			$	2,108,279
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing			$	263,324			$	285,157			$	286,784			$	296,959			$	295,594
Interest bearing				1,497,242				1,463,653				1,469,970				1,450,519				1,517,827
Total				1,760,566				1,748,810				1,756,754				1,747,478				1,813,421
Repurchase agreements				40,116				43,038				42,973				41,137				38,124
Borrowed funds				65,000				85,000				85,000				90,000				80,000
Accrued expenses and other liabilities				43,603				38,259				43,709				41,586				29,389
Total liabilities				1,909,285				1,915,107				1,928,436				1,920,201				1,960,934
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: December 31, 2024 - 4,313,698 December 31, 2023 - 4,298,773				-				-				-				-				-
Additional paid-in capital				70,034				69,916				69,778				69,727				69,555
Accumulated other comprehensive loss				(58,084	)			(48,241	)			(58,939	)			(56,313	)			(51,613	)
Retained earnings				139,464				137,880				137,792				138,167				129,403
Total stockholders' equity				151,414				159,555				148,631				151,581				147,345
Total liabilities and stockholders' equity			$	2,060,699			$	2,074,662			$	2,077,067			$	2,071,782			$	2,108,279

Finward Bancorp
Quarterly Financial Report
Consolidated Statements of Income		Quarter Ended,																					Twelve months ended,
(Dollars in thousands)		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)					(Unaudited)				(Unaudited)
		December 31,				September 30,				June 30,				March 31,				December 31,					December 31,				December 31,
			2024				2024				2024				2024				2023					2024				2023
Interest income:
Loans		$	19,802			$	19,660			$	19,174			$	18,879			$	19,281				$	77,515			$	74,762
Securities & short-term investments			2,793				2,812				2,953				3,105				2,975					11,663				11,021
Total interest income			22,595				22,472				22,127				21,984				22,256					89,178				85,783
Interest expense:
Deposits			8,812				8,946				8,610				8,794				8,180					35,162				25,438
Borrowings			1,176				1,520				1,463				1,410				1,361					5,569				5,790
Total interest expense			9,988				10,466				10,073				10,204				9,541					40,731				31,228
Net interest income			12,607				12,006				12,054				11,780				12,715					48,447				54,555
Provision/(benefit) for credit losses			(579	)			-				76				-				779					(503	)			2,025
Net interest income after provision for credit losses			13,186				12,006				11,978				11,780				11,936					48,950				52,530
Noninterest income:
Fees and service charges			1,439				1,463				1,257				1,153				1,507					5,312				6,024
Wealth management operations			728				731				763				633				672					2,855				2,484
Gain on tax credit investment			1,236				-				-				-				-					1,236				-
Gain on sale of loans held-for-sale, net			328				338				320				152				352					1,138				1,081
Increase in cash value of bank owned life insurance			202				205				212				193				193					812				766
Gain (Loss) on real estate			(212	)			-				15				11,858				-					11,661				-
Loss on sale of securities, net			-				-				-				(531	)			-					(531	)			(48	)
Other			11				130				6				17				11					164				439
Total noninterest income			3,732				2,867				2,573				13,475				2,735					22,647				10,746
Noninterest expense:
Compensation and benefits			6,628				6,963				7,037				7,109				6,290					27,737				27,655
Occupancy and equipment			2,045				2,181				2,116				1,908				1,484					8,250				6,382
Data processing			1,202				1,165				1,135				1,170				1,269					4,672				4,734
Federal deposit insurance premiums			457				435				397				501				492					1,790				2,003
Marketing			220				209				212				158				191					799				840
Professional and Outside Services			1,341				1,251				1,257				1,557				1,420					5,406				4,279
Technology			509				602				507				625				374					2,243				1,654
Other			1,845				1,668				1,756				1,976				1,997					7,245				7,684
Total noninterest expense			14,247				14,474				14,417				15,004				13,517					58,142				55,231
Income before income taxes			2,671				399				134				10,251				1,154					13,455				8,045
Income tax expenses (benefit)			569				(207	)			(9	)			972				(356	)				1,325				(335	)
Net income		$	2,102			$	606			$	143			$	9,279			$	1,510				$	12,130			$	8,380
Earnings per common share:
Basic		$	0.49			$	0.14			$	0.03			$	2.18			$	0.36				$	2.85			$	1.96
Diluted		$	0.49			$	0.14			$	0.03			$	2.17			$	0.35				$	2.84			$	1.96

Finward Bancorp
Quarterly Financial Report
Asset Quality					(Unaudited)				(Unaudited)				(Unaudited)			(Unaudited)				(Unaudited)
(Dollars in thousands)					December 31,				September 30,				June 30,			March 31,				December 31,
						2024				2024				2024			2024				2023
Nonaccruing loans					$	13,738			$	13,806			$	11,079		$	11,603			$	9,608
Accruing loans delinquent more than 90 days						-				-				294			215				1,843
Securities in non-accrual						1,419				1,440				1,371			1,442				1,357
Foreclosed real estate						-				-				-			71				71
	Total nonperforming assets				$	15,157			$	15,246			$	12,744		$	13,331			$	12,879
Allowance for credit losses (ACL):
	ACL specific allowances for collateral dependent loans				$	284			$	1,821			$	1,327		$	1,455			$	906
	ACL general allowances for loan portfolio					16,627				16,695				17,003			17,351				17,862
		Total ACL			$	16,911			$	18,516			$	18,330		$	18,806			$	18,768

Bank Level Capital												Minimum Required To Be
(Dollars in thousands)							Minimum Required For					Well Capitalized Under Prompt
		Actual					Capital Adequacy Purposes					Corrective Action Regulations
December 31, 2024		Amount			Ratio		Amount			Ratio		Amount			Ratio
Common equity tier 1 capital to risk-weighted assets		$179,625			11.32%		$71,415			4.50%		$103,154			6.50%
Tier 1 capital to risk-weighted assets		$179,625			11.32%		$95,219			6.00%		$126,959			8.00%
Total capital to risk-weighted assets		$194,500			12.26%		$126,959			8.00%		$158,699			10.00%
Tier 1 capital to adjusted average assets		$179,625			8.46%		$84,854			4.00%		$106,068			5.00%

Table 1 - Reconciliation of the Non-GAAP Performance Measures
(Dollars in thousands)	Quarter Ended,																				Twelve months ended,
(unaudited)	December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023				December 31, 2024				December 31, 2023
Calculation of tangible common equity
Total stockholder's equity	$	151,414			$	159,555			$	148,631			$	151,581			$	147,345			$	151,414			$	147,345
Goodwill		(22,395	)			(22,395	)			(22,395	)			(22,395	)			(22,395	)			(22,395	)			(22,395	)
Other intangibles		(1,860	)			(2,203	)			(2,555	)			(2,911	)			(3,272	)			(1,860	)			(3,272	)
Tangible common equity	$	127,159			$	134,957			$	123,681			$	126,275			$	121,678			$	127,159			$	121,678
Calculation of tangible common equity adjusted for accumulated other comprehensive loss
Tangible common equity	$	127,159			$	134,957			$	123,681			$	126,275			$	121,678			$	127,159			$	121,678
Accumulated other comprehensive loss		58,084				48,241				58,939				56,313				51,613				58,084				51,613
Tangible common equity adjusted for accumulated other comprehensive loss	$	185,243			$	183,198			$	182,620			$	182,588			$	173,291			$	185,243			$	173,291
Calculation of tangible book value per share
Tangible common equity	$	127,159			$	134,957			$	123,681			$	126,275			$	121,678			$	127,159			$	121,678
Shares outstanding		4,313,698				4,313,940				4,313,940				4,310,251				4,298,773				4,313,698				4,298,773
Tangible book value per diluted share	$	29.48			$	31.28			$	28.67			$	29.30			$	28.31			$	29.48			$	28.31
Calculation of tangible book value per diluted share adjusted for accumulated other comprehensive loss
Tangible common equity adjusted for accumulated other comprehensive loss	$	185,243			$	183,198			$	182,620			$	182,588			$	173,291			$	185,243			$	173,291
Diluted average common shares outstanding		4,313,698				4,313,940				4,313,940				4,310,251				4,298,773				4,313,698				4,298,773
Tangible book value per diluted share adjusted for accumulated other comprehensive loss	$	42.94			$	42.47			$	42.33			$	42.36			$	40.31			$	42.94			$	40.31
Calculation of tangible common equity to total assets
Tangible common equity	$	127,159			$	134,957			$	123,681			$	126,275			$	121,678			$	127,159			$	121,678
Total assets		2,060,699				2,074,662				2,077,067				2,071,782				2,108,279				2,060,699				2,108,279
Tangible common equity to total assets		6.17	%			6.51	%			5.95	%			6.09	%			5.77	%			6.17	%			5.77	%
Calculation of tangible common equity to total assets adjusted for accumulated other comprehensive loss
Tangible common equity adjusted for accumulated other comprehensive loss	$	185,243			$	183,198			$	182,620			$	182,588			$	173,291			$	185,243			$	173,291
Total assets		2,060,699				2,074,662				2,077,067				2,071,782				2,108,279				2,060,699				2,108,279
Tangible common equity to total assets adjusted for accumulated other comprehensive loss		8.99	%			8.83	%			8.79	%			8.81	%			8.22	%			8.99	%			8.22	%
Calculation of tax adjusted net interest margin
Net interest income	$	12,607			$	12,006			$	12,054			$	11,780			$	12,715			$	48,447			$	54,555
Tax adjusted interest on securities and loans		674				678				677				699				722				2,728				2,956
Adjusted net interest income	$	13,281				12,684				12,731				12,749			$	13,437			$	51,175			$	57,511
Total average earning assets		1,905,353				1,910,731				1,906,998				1,945,501				1,920,127				1,909,915				1,927,455
Tax adjusted net interest margin		2.79	%			2.66	%			2.67	%			2.57	%			2.80	%			2.68	%			2.98	%
Efficiency ratio
Total non-interest expense	$	14,247			$	14,474			$	14,417			$	15,004			$	13,517			$	58,142			$	55,232
Total revenue		16,339				14,873				14,627				25,255				15,450				71,094				65,301
Efficiency ratio		87.20	%			97.32	%			98.56	%			59.41	%			87.49	%			81.78	%			84.58	%

FOR FURTHER INFORMATION CONTACT SHAREHOLDER SERVICES (219) 853-7575

FAQ

What was FNWD's earnings per share for full-year 2024?

Finward Bancorp reported earnings of $2.84 per diluted share for the full year 2024.

How much did FNWD's net interest margin improve in Q4 2024?

FNWD's net interest margin improved to 2.65% in Q4 2024 from 2.51% in Q3 2024.

What percentage of FNWD's deposits are FDIC insured as of Q4 2024?

72% of FNWD's deposits are fully FDIC insured, with an additional 9% backed by the Indiana Public Deposit Insurance Fund.

What was FNWD's non-performing loans ratio in Q4 2024?

FNWD's non-performing loans ratio was 0.91% as of December 31, 2024.

How much did FNWD's commercial loan originations total in Q4 2024?

FNWD originated $59.2 million in new commercial loans during Q4 2024.