Finward Bancorp Announces Earnings for the Six and Three Months Ended June 30, 2023

Rhea-AI Summary

Finward Bancorp (Nasdaq: FNWD) reported net income available to common stockholders of $4.7 million, or $1.09 per diluted share, for the six months ended June 30, 2023, compared to $6.6 million, or $1.59 per diluted share, for the same period last year. For the three months ended June 30, 2023, net income was $2.4 million, or $0.57 per diluted share, compared to $4.4 million, or $1.04 per share, for the same period in 2022. The net interest margin for the six months ended June 30, 2023, was 2.98%, compared to 3.50% for the same period last year.

Positive

• Net income available to common stockholders decreased by 29% for the six months ended June 30, 2023, compared to the same period last year.
• Net income for the three months ended June 30, 2023, decreased by 45% compared to the same period in 2022.
• The net interest margin decreased from 3.50% to 2.98% for the six months ended June 30, 2023, compared to the same period last year.

Negative

• None.

MUNSTER, Ind., July 26, 2023 (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 $4.7 million, or $1.09 per diluted share, for the six months ended June 30, 2023, as compared to $6.6 million, or $1.59 per diluted share, for the corresponding prior year period. For the three months ended June 30, 2023, the Bancorp’s net income totaled $2.4 million, or $0.57 per diluted share, as compared to $4.4 million, or $1.04 per share, for the three months ending June 30, 2022. 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,
		2023		2023		2022		2022		2022			2023		2022
Return on equity		7.05%		6.42%		12.96%		13.65%		12.45%			6.74%		8.40%
Return on assets		0.46%		0.43%		0.78%		0.88%		0.85%			0.45%		0.65%
Noninterest income / average assets		0.57%		0.50%		0.56%		0.51%		0.56%			0.54%		0.60%
Noninterest expense / average assets		2.66%		2.75%		3.07%		2.90%		2.91%			2.71%		3.11%
Efficiency ratio		82.11%		82.35%		79.63%		74.54%		75.15%			82.23%		80.89%

“Business conditions have stabilized significantly over the second quarter, for both Peoples Bank and the industry more broadly. The Bank’s deposits were largely stable, although we did see continued movement of customers’ deposits from lower-cost to higher-cost deposit accounts. We have maintained a defensive liquidity position, and in this environment it is possible to generate some marginal income while we maintain our cash position. With that in mind, like many banks, we are focused on serving our core customers and communities with our capital and liquidity, and loan yields are starting to show some momentum,” said Benjamin Bochnowski, Chairman and CEO. “Our team has remained disciplined with operating expenses and we are serving our customers more efficiently and effectively. We anticipate that we could be at the top of the rate cycle for some time, and with that in mind, we are also highly focused on credit quality. We have been selective and diligent in our underwriting while we have reduced our number of non-performing loans.”

Highlights of the year-to-date period include:

• Net interest margin: The net interest margin for the six months ended June 30, 2023, was 2.98%, compared to 3.50% for the six months ended June 30, 2022. The tax-adjusted net interest margin (a non-GAAP measure) for the six months ended June 30, 2023, was 3.13%, compared to 3.70% for the six months ended June 30, 2022. The decreased net interest margin 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. We anticipate the compression seen in the first six months of the year could continue, unless target rates decrease, and our interest-bearing liabilities are able to be repriced at those lower rates. 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 June 30, 2023, deposits totaled $1.80 billion, compared to $1.78 billion on December 31, 2022, an increase of $20.1 million or 1.1%. As of June 30, 2023, core deposits totaled $1.3 billion, compared to $1.4 billion on December 31, 2022, a decrease of $121.5 million or 8.6%. Core deposits include checking, savings, and money market accounts and represented 71.9% of the Bancorp’s total deposits at June 30, 2023. Through the first six months of 2023, balances for checking and savings accounts decreased, as balances migrated into higher yielding accounts. On June 30, 2023, balances for certificates of deposit totaled $504.7 million, compared to $363.1 million on December 31, 2022, an increase of $141.6 million or 39.0%. The decrease in core deposits and increase in certificate of deposit balances is related to customer preferences for higher yielding deposits, along with efforts by the Bank to manage future deposit costs. In addition, on June 30, 2023, borrowings and repurchase agreements totaled $196.4 million, compared to $135.5 million at December 31, 2022, an increase of $60.9 million or 44.9%. The increase in short-term borrowings was the result of cyclical inflows and outflows of interest-earning assets and interest-bearing liabilities. As of June 30, 2023, 71% 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, and access to diversified borrowing sources. The Bancorp has available liquidity of $693 million including borrowing capacity from the FHLB and Federal Reserve facilities.
• Unrealized losses on the securities portfolio: Accumulated other comprehensive losses were $60.2 million as of June 30, 2023, compared to $64.3 million on December 31, 2022, a decrease of $4.1 million or 6.4%. The yield on the securities portfolio improved on a year-to-date basis to 2.38% for the six months ended June 30, 2023, up from 2.12% for the six months ended June 30, 2022. The effective duration of the securities portfolio was 6.6 years as of June 30, 2023. Management continues to actively manage the securities portfolio and does not currently anticipate the need to realize losses from sales in the securities portfolio, as losses are currently driven by the interest rate environment and management expects such losses to be fully recoverable. Further, it remains unlikely the Bancorp will be required to sell the investments in the portfolio before recovery of their amortized cost basis, which may be at maturity.
• Gain on sale of loans: Lack of existing housing inventory and 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 six months ended June 30, 2023, totaled $537 thousand, down from $898 thousand for the six months ended June 30, 2022. During the six months ended June 30, 2023, the Bank originated $19.3 million in new fixed rate mortgage loans for sale, compared to $29.2 million during the six months ended June 30, 2022. During the six months ended June 30, 2023, the Bank originated $17.4 million in new mortgage loans retained in its portfolio, compared to $50.0 million during the six months ended June 30, 2022. Total mortgage originations for the three month period ending June 30, 2023, totaled $22.7 million, an increase of $8.7 million from the three month period ending March 31, 2023’s total of $14.0 million. This increase was primarily driven by seasonal demand for mortgages peaking in the spring and summer months. 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 $1.53 billion on June 30, 2023, compared to $1.51 billion on December 31, 2022, an increase of $20.5 million or 1.4%. The increase is the result of organic loan portfolio growth. During the six months ended June 30, 2023, the Bank originated $136.9 million in new commercial loans, compared to $196.9 million during the six months ended June 30, 2022. The loan portfolio represents 76.6% of earning assets and is comprised of 62.7% commercial related credits. At June 30, 2023, the Bancorp’s held loan balances in commercial real estate owner occupied properties of $215.4 million or 14.1% of total loan balances and commercial real estate non-owner occupied properties of $286.4 million of 18.7% of total loan balances. Of the $286.4 million in commercial real estate non-owner occupied properties balances, loans collateralized by office build represented $39.7 million or 2.5% of total loan balances.
• Asset quality: At June 30, 2023, non-performing loans totaled $12.3 million, compared to $18.4 million at December 31, 2022, a decrease of $6.1 million or 32.9%. The Bank’s ratio of non-performing loans to total loans was 0.80% at June 30, 2023, compared to 1.21% at December 31, 2022. The Bank’s ratio of non-performing assets to total assets was 0.62% at June 30, 2023, compared to 0.94% at December 31, 2022. The decrease in non-performing loans is primarily the result of management’s strategic non-performing asset management which includes proactive relationship management and note sales. At June 30, 2023, the allowance for credit losses (ACL) totaled $19.5 million and is considered adequate by management. For the quarter ended June 30, 2023, charge-offs, net of recoveries, totaled $579 thousand. The allowance for credit losses as a percentage of total loans was 1.27% at June 30, 2023, and the allowance for credit losses as a percentage of non-performing loans, or coverage ratio, was 158.3% at June 30, 2023. On January 1, 2023, the Bancorp adopted ASU No. 2016-13 resulting in an implementation entry of $8.3 million, increasing the ACL by $5.2 million and unfunded commitment liability of $3.1 million, and also resulting in retained earnings decreasing $6.1 million and generating a deferred tax asset of $2.2 million. The majority of the implementation entry is related to including acquired loan portfolios in the model and the addition of using economic forecasts in estimating future losses. In addition, $1.0 million of non-accretable credit loan discounts on purchase credit impaired loans now classified as purchase credit deteriorated were reallocated to the ACL.
• Optimizing the banking center footprint: During the six months ended June 30, 2023, the Bank sold two banking centers held for sale, resulting in a gain of $276 thousand for the period. Each banking center closure and sale is expected to result in approximately $250 thousand in operational expense reduction, excluding personnel expenses. The Bank’s remaining 26 locations are being analyzed for footprint optimization opportunities, with additional locations showing the potential for reducing operating overhead over the next 12 months. These efforts are reducing fixed costs and allowing for redeployment of a portion of occupancy expenses into building a digital-forward foundation to better meet the needs of the customers and communities the Bancorp serves.
• Personnel: Management continues to look for efficiency in personnel and has netted a reduction of 21 full time equivalents, or 7%, through the six months ended June 30, 2023.
• Capital Adequacy: As of June 30, 2023, the Bank’s tier 1 capital to adjusted average assets ratio totaled 7.6%, which is within all regulatory capital requirements, and continues to be considered well capitalized. The Bancorp’s tangible book value per share was $25.64 at June 30, 2023, up from $25.41 as of December 31, 2022 (a non-GAAP measure). Tangible common equity to total assets was 5.11% at June 30, 2023, down from 5.27% as of December 31, 2022 (a non-GAAP measure). The decrease is due to increased average assets compared to year-ended December 31, 2022. Excluding accumulated other comprehensive losses, tangible book value per share decreased to $39.62 as of June 30, 2023, from $40.36 as of December 31, 2022 (a non-GAAP measure). The decrease is related to a reduction of retained earnings of $6.1 million due to the impact of the adoption of ASU No. 2016-13 and the payment of dividends of $2.7 million. 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 other losses, tangible capital as a percentage of tangible assets, and tangible capital as a percentage of tangible 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 is providing certain financial measures that are 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 losses, tangible book value per share, tangible book value per share adjusted for accumulated other losses, tangible common equity/total assets, 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: difficulties and delays in integrating the Bancorp’s and Royal’s businesses or fully realizing cost savings and other benefits; business disruption following the merger; 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, 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,											Six months ended,
		(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)			(Unaudited)		(Unaudited)
		June 30,		March 31,		December 31,		September 30,		June 30,			June 30,		June 30,
		2023		2023		2022		2022		2022			2023		2022
Return on equity		7.05%		6.42%		12.96%		13.65%		12.45%			6.74%		8.40%
Return on assets		0.46%		0.43%		0.78%		0.88%		0.85%			0.45%		0.65%
Yield on loans		4.91%		4.67%		4.66%		4.34%		4.18%			4.79%		4.17%
Yield on security investments		2.36%		2.39%		2.44%		2.30%		2.23%			2.38%		2.12%
Total yield on earning assets		4.43%		4.22%		4.21%		3.88%		3.68%			4.33%		3.59%
Cost of deposits		1.36%		0.92%		0.45%		0.19%		0.08%			1.14%		0.08%
Cost of repurchase agreements		3.78%		2.65%		2.06%		0.98%		0.46%			3.39%		0.40%
Cost of borrowed funds		4.53%		4.74%		5.19%		2.52%		1.10%			4.64%		0.83%
Total cost of funds		1.57%		1.15%		0.65%		0.22%		0.09%			1.36%		0.09%
Noninterest income / average assets		0.57%		0.50%		0.56%		0.51%		0.56%			0.54%		0.60%
Noninterest expense / average assets		2.66%		2.75%		3.07%		2.90%		2.91%			2.71%		3.11%
Net noninterest margin / average assets		-2.09%		-2.25%		-2.52%		-2.39%		-2.36%			-2.17%		-2.51%
Efficiency ratio		82.11%		82.35%		79.63%		74.54%		75.15%			82.23%		80.89%
Effective tax rate		3.86%		12.53%		1.12%		11.14%		11.70%			8.22%		11.60%
Non-performing assets to total assets		0.62%		1.02%		0.94%		0.58%		0.53%			0.62%		0.53%
Non-performing loans to total loans		0.80%		1.34%		1.21%		0.73%		0.68%			0.80%		0.68%
Allowance for credit losses to non-performing loans		158.26%		96.15%		70.18%		122.64%		133.78%			158.26%		133.78%
Allowance for credit losses to loans outstanding		1.27%		1.29%		0.85%		0.89%		0.91%			1.27%		0.91%
Foreclosed real estate to total assets		0.00%		0.00%		0.00%		0.00%		0.00%			0.00%		0.00%
Basic earnings per share		$0.57		$0.52		$0.93		$1.07		$1.04			$1.09		$1.60
Diluted earnings per share		$0.57		$0.51		$0.93		$1.07		$1.04			$1.09		$1.59
Net worth / total assets		6.33%		6.66%		6.59%		5.75%		6.50%			6.33%		6.50%
Book value per share		$31.77		$32.47		$31.73		$27.46		$31.80			$31.77		$31.80
Closing stock price		$22.00		$29.10		$36.20		$34.01		$37.49			$22.00		$37.49
Price per earnings per share		$9.59		$14.10		$9.70		$7.92		$8.97			$10.10		$11.73
Dividend declared per common share		$0.31		$0.31		$0.31		$0.31		$0.31			$0.62		$0.62
Non-GAAP 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,
		2023		2023		2022		2022		2022			2023		2022
Net interest margin - tax equivalent		3.03%		3.23%		3.73%		3.84%		3.78%			3.13%		3.63%
Tangible book value per diluted share		$25.64		$26.24		$25.41		$20.99		$25.24			$25.64		$25.24
Tangible book value per diluted share adjusted for AOCI		$39.62		$39.23		$40.36		$39.57		$38.69			$39.62		$38.69
Tangible common equity to total assets		5.11%		5.38%		5.27%		4.39%		5.16%			5.11%		5.16%
Tangible common equity to total assets adjusted for AOCI		7.89%		8.05%		8.38%		8.28%		7.91%			7.89%		7.91%

Quarter Ended
(Dollars in thousands)								Average Balances, Interest, and Rates
(unaudited)								June 30, 2023															June 30, 2022
								Average Balance				Interest						Rate (%)					Average Balance							Interest			Rate (%)
ASSETS
Interest bearing deposits in other financial institutions								$	44,916			$	582					5.18					$	25,679						$	45			0.70
Federal funds sold									1,709				19					4.45						1,388							2			0.58
Certificates of deposit in other financial institutions									1,078				15					5.57						1,625							3			0.74
Securities available-for-sale									373,280				2,206					2.36						438,309							2,449			2.23
Loans receivable*									1,523,244				18,694					4.91						1,457,625							15,221			4.18
Federal Home Loan Bank stock									6,547				97					5.93						3,038							20			2.63
Total interest earning assets									1,950,774			$	21,613					4.43						1,927,664						$	17,740			3.68
Cash and non-interest bearing deposits in other financial institutions									21,195															21,435
Allowance for credit losses									(19,943	)														(13,399	)
Other noninterest bearing assets									152,623															149,339
Total assets								$	2,104,649														$	2,085,039
LIABILITIES AND STOCKHOLDERS' EQUITY
Total deposits								$	1,799,915			$	6,105					1.36					$	1,884,712						$	389			0.08
Repurchase agreements									34,909				330					3.78						22,618							26			0.46
Borrowed funds									100,556				1,139					4.53						9,851							27			1.10
Total interest bearing liabilities									1,935,380			$	7,574					1.57						1,917,181						$	442			0.09
Other noninterest bearing liabilities									31,001															25,443
Total liabilities									1,966,381															1,942,624
Total stockholders' equity									138,268															142,415
Total liabilities and stockholders' equity								$	2,104,649														$	2,085,039
Return on average assets									0.46%															0.85%
Return on average equity									7.05%															12.45%
Net interest margin (average earning assets)									2.88%															3.59%
Net interest margin (average earning assets) - tax equivalent									3.03%															3.78%
Net interest spread									2.87%															3.59%
Net interest margin**									2.88%															3.59%
Ratio of interest-earning assets to interest-bearing liabilities								1.01x															1.01x
Year-to-Date
(Dollars in thousands)								Average Balances, Interest, and Rates
(unaudited)								June 30, 2023															June 30, 2022
								Average Balance				Interest						Rate (%)					Average Balance							Interest			Rate (%)
ASSETS												`																		`
Interest bearing deposits in other financial institutions								$	30,140			$	765					5.08					$	24,032						$	53			0.44
Federal funds sold									1,275				27					4.24						4,683							2			0.09
Certificates of deposit in other financial institutions									1,762				31					3.52						1,674							6			0.72
Securities available-for-sale									373,413				4,440					2.38						474,016							5,024			2.12
Loans receivable*									1,516,689				36,320					4.79						1,366,900							28,507			4.17
Federal Home Loan Bank stock									6,547				166					5.07						3,530							42			2.38
Total interest earning assets									1,929,826			$	41,749					4.33						1,874,835						$	33,634			3.59
Cash and non-interest bearing deposits in other financial institutions									18,523															20,821
Allowance for loan losses									(16,569	)														(13,383	)
Other noninterest bearing assets									154,227															138,343
Total assets								$	2,086,007														$	2,020,616
LIABILITIES AND STOCKHOLDERS' EQUITY
Total deposits								$	1,788,925			$	10,192					1.14					$	1,813,254						$	726			0.08
Repurchase agreements									26,635				451					3.39						21,013							42			0.40
Borrowed funds									103,465				2,399					4.64						7,982							33			0.83
Total interest bearing liabilities									1,919,025				13,042					1.36						1,842,249						$	801			0.09
Other noninterest bearing liabilities									28,066															22,029
Total liabilities									1,947,091															1,864,278
Total stockholders' equity									138,916															156,338
Total liabilities and stockholders' equity								$	2,086,007														$	2,020,616
Return on average assets									0.45%															0.65%
Return on average equity									6.74%															8.40%
Net interest margin (average earning assets)									2.98%															3.50%
Net interest margin (average earning assets) - tax equivalent									3.13%															3.70%
Net interest spread									2.97%															3.50%
Net interest margin**									2.98%															3.50%
Ratio of interest-earning assets to interest-bearing liabilities								1.01x															1.02x

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,
					2023			2023							2022					2022								2022
Total assets					$	2,161,218		$	2,098,592						$	2,070,339				$	2,052,986							$	2,101,485
Cash & cash equivalents						115,673			54,781							31,282					38,296								79,302
Certificates of deposit in other financial institutions						-			2,452							2,456					2,214								1,482
Securities - available for sale						368,136			377,901							370,896					359,035								400,466
Loans receivable:
	Commercial real estate				$	501,759		$	484,564						$	486,431				$	452,852							$	420,735
	Residential real estate					480,791			476,899							484,595					471,565								459,151
	Commercial business					95,796			100,652							93,278					95,372								103,649
	Construction and land development					123,655			116,308							108,926					134,301								153,422
	Multifamily					240,647			252,633							251,014					258,377								248,495
	Home equity					43,153			39,877							38,978					37,578								35,672
	Manufactured homes					32,669			34,027							34,882					35,866								37,693
	Government					10,646			10,646							9,549					9,649								8,081
	Consumer					667			723							918					827								1,673
		Total loans			$	1,529,783		$	1,516,329						$	1,508,571				$	1,496,387							$	1,468,571
Deposits:
	Core deposits:
		Noninterest bearing checking			$	315,671		$	330,057						$	359,092				$	386,137							$	370,567
		Interest bearing checking				350,931			363,237							396,285					422,559								384,689
		Savings				339,434			365,176							402,365					427,505								436,203
		Money market				284,406			276,236							254,157					269,110								327,360
			Total core deposits			1,290,442			1,334,706							1,411,899					1,505,311								1,518,819
	Certificates of deposit					504,705			471,404							363,118					327,653								398,396
			Total deposits		$	1,795,147		$	1,806,110						$	1,775,017				$	1,832,964							$	1,917,215
Borrowings and repurchase agreements					$	196,402		$	128,423						$	135,503				$	78,140							$	24,536
Stockholder's equity						136,750			139,736							136,393					118,023								136,654

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,
		2023				2023			2022			2022			2022				2023				2022
Interest income:
Loans		$	18,694			$	17,626		$	17,504		$	16,122		$	15,221			$	36,320			$	28,507
Securities & short-term investments			2,919				2,510			2,358			2,417			2,519				5,429				5,127
Total interest income			21,613				20,136			19,862			18,539			17,740				41,749				33,634
Interest expense:
Deposits			6,105				4,087			2,007			871			389				10,192				726
Borrowings			1,469				1,381			1,046			161			53				2,850				75
Total interest expense			7,574				5,468			3,053			1,032			442				13,042				801
Net interest income			14,039				14,668			16,809			17,507			17,298				28,707				32,833
Provision for credit losses			514				488			-			-			-				1,002				-
Net interest income after provision for credit losses			13,525				14,180			16,809			17,507			17,298				27,705				32,833
Noninterest income:
Fees and service charges			1,832				1,311			1,823			1,570			1,560				3,143				2,864
Wealth management operations			626				614			523			407			588				1,240				1,183
Gain on sale of loans held-for-sale, net			274				263			126			344			291				537				898
Increase in cash value of bank owned life insurance			201				179			182			183			193				380				445
(Loss) gain on sale of foreclosed real estate, net			(15	)			-			16			-			-				(15	)			-
(Loss) gain on sale of securities, net			(48	)			-			-			23			258				(48	)			639
Other			136				241			169			103			6				377				11
Total noninterest income			3,006				2,608			2,839			2,630			2,896				5,614				6,040
Noninterest expense:
Compensation and benefits			7,098				7,538			6,587			7,498			7,538				14,636				14,905
Occupancy and equipment			1,636				1,690			1,752			1,804			1,729				3,326				3,229
Data processing			1,407				973			1,238			1,212			1,246				2,380				4,300
Federal deposit insurance premiums			572				465			279			350			380				1,037				599
Marketing			159				255			284			587			385				414				1,036
Impairment charge on assets held for sale			-				-			1,232			-			-				-				-
Net loss recognized on sale of premises and equipment			-				-			49			254			-				-				-
Other			3,123				3,306			4,224			3,305			3,898				6,429				7,376
Total noninterest expense			13,995				14,227			15,645			15,010			15,176				28,222				31,445
Income before income taxes			2,536				2,561			4,003			5,127			5,018				5,097				7,428
Income tax expenses			98				321			45			571			587				419				862
Net income		$	2,438			$	2,240		$	3,958		$	4,556		$	4,431			$	4,678			$	6,566

Finward Bancorp
Quarterly Financial Report
Asset Quality				(Unaudited)				(Unaudited)							(Unaudited)			(Unaudited)
(Dollars in thousands)				June 30,				March 31,				December 31,			September 30,			June 30,
				2023				2023				2022			2022			2022
Nonaccruing loans				$	12,071			$	19,473			$	18,128		$	8,943		$	8,813
Accruing loans delinquent more than 90 days					255				878				248			1,982			1,208
Securities in non-accrual					1,075				1,017				1,048			1,027			1,030
Foreclosed real estate					61				60				-			-			-
	Total nonperforming assets			$	13,462			$	21,428			$	19,424		$	11,952		$	11,051
Allowance for credit losses (ACL):
	ACL specific allowances for impaired loans			$	717			$	1,075			$	338		$	749		$	731
	ACL general allowances for loan portfolio				18,790				18,493				12,559			12,649			12,675
		Total ACL		$	19,507			$	19,568			$	12,897		$	13,398		$	13,406
				(Unaudited)
				June 30,				Required
				2023				To Be Well
				Actual Ratio				Capitalized
Capital Adequacy Bank
Common equity tier 1 capital to risk-weighted assets					10.0%				6.5%
Tier 1 capital to risk-weighted assets					10.0%				8.0%
Total capital to risk-weighted assets					11.0%				10.0%
Tier 1 capital to adjusted average assets					7.6%				5.0%

  

	Table 1 - Reconciliation of the Non-GAAP Performance Measures
	(Dollars in thousands)	Three Months Ended,																				Six Months Ended
	(unaudited)	June 30, 2023				March 31, 2023				December 31, 2022				September 30, 2022				June 30, 2022				June 30, 2023				June 30, 2022
	Calculation of tangible common equity
	Total stockholder's equity	$	136,750			$	139,736			$	136,393			$	118,023			$	136,654			$	136,750			$	136,654
	Goodwill		(22,395	)			(22,395	)			(22,395	)			(22,615	)			(22,615	)			(22,395	)			(22,615	)
	Other intangibles		(4,015	)			(4,402	)			(4,794	)			(5,188	)			(5,588	)			(4,015	)			(5,588	)
(A)	Tangible common equity	$	110,340			$	112,939			$	109,204			$	90,220			$	108,451			$	110,340			$	108,451
	Calculation of tangible common equity adjusted for accumulated other comprehensive loss (income)
(A)	Tangible common equity	$	110,340			$	112,939			$	109,204			$	90,220			$	108,451			$	110,340			$	108,451
	Accumulated other comprehensive loss (income)		60,185				55,895				64,300				79,839				57,781				60,185				57,781
(B)	Tangible common equity adjusted for accumulated other comprehensive loss (income)	$	170,525			$	168,834			$	173,504			$	170,059			$	166,232			$	170,525			$	166,232
	Calculation of tangible book value per share
(A)	Tangible common equity	$	110,340			$	112,939			$	109,204			$	90,220			$	108,451			$	110,340			$	108,451
	Shares outstanding		4,303,766				4,304,026				4,298,401				4,297,900				4,296,949				4,303,766				4,296,949
	Tangible book value per diluted share	$	25.64			$	26.24			$	25.41			$	20.99			$	25.24			$	25.64			$	25.24
	Calculation of tangible book value per diluted share adjusted for accumulated other comprehensive loss (income)
(B)	Tangible common equity adjusted for accumulated other comprehensive loss (income)	$	170,525			$	168,834			$	173,504			$	170,059			$	166,232			$	170,525			$	166,232
	Diluted average common shares outstanding		4,303,766				4,304,026				4,298,401				4,297,900				4,296,949				4,303,766				4,296,949
	Tangible book value per diluted share adjusted for accumulated other comprehensive loss (income)	$	39.62			$	39.23			$	40.36			$	39.57			$	38.69			$	39.62			$	38.69
	Calculation of tangible common equity to total assets
(A)	Tangible common equity	$	110,340			$	112,939			$	109,204			$	90,220			$	108,451			$	110,340			$	108,451
	Total assets		2,161,218				2,098,592				2,070,339				2,052,986				2,101,485				2,134,808				2,101,485
	Tangible common equity to total assets		5.11%				5.38%				5.27%				4.39%				5.16%				5.17%				5.16%
	Calculation of tangible common equity to total assets
(B)	Tangible common equity adjusted for accumulated other comprehensive loss (income)	$	170,525			$	168,834			$	173,504			$	170,059			$	166,232			$	170,525			$	166,232
	Total assets		2,161,218				2,098,592				2,070,339				2,052,986				2,101,485				2,161,218				2,101,485
	Tangible common equity to total assets adjusted for accumulated other comprehensive loss (income)		7.89%				8.05%				8.38%				8.28%				7.91%				7.89%				7.91%
	Calculation of tax adjusted net interest margin
	Net interest income	$	14,039			$	14,668			$	16,809			$	17,507			$	17,298			$	28,707			$	32,833
	Tax adjusted interest on securities and loans		748				756				791				817				930				1,504				1,896
	Adjusted net interest income		14,787				15,424				17,600				18,324				18,228				30,211				34,729
	Total average earning assets		1,950,774				1,908,647				1,886,596				1,910,722				1,927,664				1,929,826				1,874,835
	Tax adjusted net interest margin		3.03%				3.23%				3.73%				3.84%				3.78%				3.13%				3.70%
	Efficiency ratio
	Total non-interest expense	$	13,995			$	14,227			$	15,645			$	15,010			$	15,176			$	28,222			$	31,445
	Total revenue		17,045				17,276				19,648				20,137				20,194				34,321				38,873
	Efficiency ratio		82.11%				82.35%				79.63%				74.54%				75.15%				82.23%				80.89%

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FAQ

What is the stock symbol for Finward Bancorp?

The stock symbol for Finward Bancorp is FNWD.

What was the net income per diluted share for the six months ended June 30, 2023?

The net income per diluted share for the six months ended June 30, 2023, was $1.09.

How did the net income for the three months ended June 30, 2023, compare to the same period in 2022?

The net income for the three months ended June 30, 2023, decreased by 45% compared to the same period in 2022.

What was the net interest margin for the six months ended June 30, 2023?

The net interest margin for the six months ended June 30, 2023, was 2.98%.