Finward Bancorp Announces Earnings for the Quarter and Nine Months Ended September 30, 2024

/EIN News/ -- MUNSTER, Ind., Oct. 29, 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 $10.0 million, or $2.35 per diluted share, for the nine months ended September 30, 2024, as compared to $6.9 million, or $1.60 per diluted share, for the corresponding prior year period. For the quarter ended September 30, 2024, the Bancorp’s net income totaled $606 thousand, or $0.14 per diluted share, as compared to $143 thousand, or $0.03 per diluted share, for the three months ended June 30, 2024, and as compared to $2.2 million, or $0.51 per diluted share, for the three months ended September 30, 2023. Selected performance metrics are as follows for the periods presented:

Performance Ratios				Quarter ended,																				Nine months ended,
				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
				September 30,				June 30,				March 31,				December 31,				September 30,				September 30,				September 30,
					2024				2024				2024				2023				2023				2024				2023
Return on equity					1.60	%			0.39	%			24.97	%			4.92	%			6.55	%			4.50	%			6.68	%
Return on assets					0.12	%			0.03	%			1.77	%			0.29	%			0.42	%			0.64	%			0.44	%
Tax adjusted net interest margin					2.67	%			2.67	%			2.57	%			2.80	%			2.87	%			2.64	%			3.04	%
Noninterest income / average assets					0.55	%			0.50	%			2.57	%			0.53	%			0.46	%			1.21	%			0.51	%
Noninterest expense / average assets					2.80	%			2.79	%			2.86	%			2.60	%			2.59	%			2.82	%			2.67	%
Efficiency ratio					97.32	%			98.56	%			59.41	%			87.49	%			86.88	%			80.16	%			83.68	%

“The Bank’s position continued to improve in the third quarter while we prepared for the Fed to begin their easing cycle. Margin and expenses were stable, with minimal benefit from the Fed’s late-quarter rate cut. We believe the Bank is poised to see margin expansion as lower rates work their way through the liability side of the balance sheet,” said Benjamin Bochnowski, chief executive officer. “We remain vigilant on credit, and we continued to build capital during the quarter. We also fully exited the Bank Term Funding Program well in advance of its March 2025 maturity.”

Highlights of the current period include:

• Net Interest Margin - The net interest margin was 2.53% for both the three months ended September 30, 2024 and the three months ended June 30, 2024. The tax-adjusted net interest margin (a non-GAAP measure) was 2.67% for both the three months ended September 30, 2024 and the three months ended June 30, 2024. The net interest margin for the nine months ended September 30, 2024, was 2.50%, compared to 2.89% for the nine months ended September 30, 2023. The tax-adjusted net interest margin (a non-GAAP measure) for the nine months ended September 30, 2024, was 2.64%, compared to 3.04% for the nine months ended September 30, 2023. 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 September 30, 2024, deposits totaled $1.7 billion, a decrease of $7.9 million or 0.5%, compared to June 30, 2024. Core deposits totaled $1.2 billion at both September 30, 2024 and June 30, 2024. Core deposits include checking, savings, and money market accounts and represented 67.9% of the Bancorp’s total deposits at September 30, 2024. As of September 30, 2024, balances for certificates of deposit totaled $562.2 million, compared to $541.2 million on June 30, 2024, an increase of $21.0 million or 3.9%. The decrease in total portfolio deposits is primarily related to cyclical flows and continued adjustments to deposit pricing. In addition, as of September 30, 2024, borrowings and repurchase agreements totaled $128.0 million, an increase of $65 thousand or 0.2%, compared to June 30, 2024. 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 terminated its involvement in the Bank Term Funding Program (the “BTFP”) and paid off its outstanding balance of $60 million, in full, through a utilization of excess liquidity and FHLB advances. As of September 30, 2024, 72% of our deposits are fully FDIC insured, and another 7% are further backed by the Indiana Public Deposit Insurance Fund. The Bancorp’s liquidity position remains strong with solid core deposit customer relationships, excess cash, debt securities, and access to diversified borrowing sources. As of September 30, 2024, the Bancorp had available liquidity of $686 million including borrowing capacity from the FHLB and Federal Reserve facilities.

• Securities Portfolio - Securities available for sale balances increased by $10.4 million to $350.0 million as of September 30, 2024, compared to $339.6 million as of June 30, 2024.  The increase in securities available for sale was due to a combination of portfolio runoff and a decrease of accumulated other comprehensive loss ("AOCL"). AOCL was $48.2 million as of September 30, 2024, compared to $58.9 million on June 30, 2024, an improvement of $10.7 million, or 18.2%. The yield on the securities portfolio decreased to 2.37% for the three months ended September 30, 2024, down from 2.43% for the three months ended June 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 September 30, 2024 and June 30, 2024. During the three months ended September 30, 2024, the Bank originated $70.4 million in new commercial loans, compared to $48.7 million during the three months ended June 30, 2024 and $73.2 million during the three months ended September 30, 2023. The loan portfolio represents 78.7% of earning assets and is comprised of 62.6% commercial-related credits. At September 30, 2024, the Bancorp’s portfolio loan balances in commercial real estate owner occupied properties totaled $236.9 million or 15.7% of total loan balances and commercial real estate non-owner occupied properties totaled $302.8 million or 20.1% of total loan balances. Of the $302.8 million in commercial real estate non-owner occupied properties balances, loans collateralized by office buildings represented $42.4 million or 2.8% of total loan balances.

• Gain on Sale of Loans - Gains from the sale of loans for the nine months ended September 30, 2024 totaled $810 thousand, an increase from $729 thousand for the nine months ended September 30, 2023. During the nine months ended September 30, 2024, the Bank originated $22.5 million in new fixed rate mortgage loans for sale, compared to $30.4 million during the nine months ended September 30, 2023. During the nine months ended September 30, 2024, the Bank originated $17.6 million in new 1-4 family loans retained in its portfolio, compared to $31.8 million during the nine months ended September 30, 2023. Total 1-4 family originations for the quarter ended September 30, 2024, totaled $20.1 million, an increase of $1.3 million compared to $18.8 million for the quarter ended June 30, 2024. These retained loans are primarily construction loans and adjustable-rate loans with a fixed-rate period of 7 years or less. The Bank continues to sell longer-duration fixed rate mortgages into the secondary market.

• Asset Quality - At September 30, 2024, non-performing loans totaled $13.8 million, compared to $11.4 million at June 30, 2024, an increase of $2.4 million or 21.4%. The Bank’s ratio of non-performing loans to total loans was 0.92% at September 30, 2024, compared to 0.75% at June 30, 2024. The Bank’s ratio of non-performing assets to total assets increased from 0.61% at June 30, 2024 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) totaled $18.5 million at September 30, 2024, compared to $18.3 million at June 30, 2024, an increase of $186 thousand or 1.0% and is considered adequate by management. For the quarter ended September 30, 2024, recoveries, net of charge-offs, totaled $186 thousand. The allowance for credit losses as a percentage of total loans was 1.23% at September 30, 2024, and the allowance for credit losses as a percentage of non-performing loans, or coverage ratio, was 134.1% at September 30, 2024.

• Operating Expenses - Non-interest expense as a percentage of average assets was 2.80% for the quarter ended September 30, 2024, as compared to 2.79% for the quarter ended June 30, 2024. Increases in non-interest expenses quarter over quarter were primarily attributable to slightly higher federal deposit insurance premium and higher occupancy and equipment expenses. The Bank remains focused on identifying additional operating efficiencies and third-party expense reductions through the remainder of this year and beyond. Compensation and benefits expense is down 1.2% for the nine months ended September 30, 2024, compared to September 30, 2023.

• Capital Adequacy - As of September 30, 2024, the Bank’s tier 1 capital to adjusted average assets ratio was 8.38%, an improvement of 0.06% compared to 8.32% at June 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 $31.28 at September 30, 2024, up from $28.67 as of June 30, 2024 (a non-GAAP measure). Tangible common equity to total assets was 6.51% at September 30, 2024, up from 5.95% as of June 30, 2024 (a non-GAAP measure). Excluding accumulated other comprehensive losses, tangible book value per share increased to $42.47 as of September 30, 2024, from $42.33 as of June 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; 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,																				Nine months ended,
					(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
					September 30,				June 30,				March 31,				December 31,				September 30,				September 30,				September 30,
						2024				2024				2024				2023				2023				2024				2023
Return on equity						1.60%				0.39%				24.97%				4.92%				6.55%				4.50%				6.68%
Return on assets						0.12%				0.03%				1.77%				0.29%				0.42%				0.64%				0.44%
Yield on loans						5.22%				5.11%				5.02%				5.09%				5.02%				5.12%				4.87%
Yield on security investments						2.37%				2.43%				2.37%				2.57%				2.41%				2.39%				2.39%
Total yield on earning assets						4.73%				4.64%				4.52%				4.64%				4.51%				4.64%				4.39%
Cost of interest-bearing deposits						2.47%				2.37%				2.36%				2.22%				1.95%				2.40%				1.58%
Cost of repurchase agreements						4.04%				3.86%				3.88%				3.78%				3.83%				3.93%				3.59%
Cost of borrowed funds						4.56%				4.95%				4.62%				4.41%				4.48%				4.70%				4.58%
Total cost of interest-bearing liabilities						2.63%				2.55%				2.53%				2.38%				2.16%				2.57%				1.82%
Tax adjusted net interest margin (1)						2.67%				2.67%				2.57%				2.80%				2.87%				2.64%				3.04%
Noninterest income / average assets						0.55%				0.50%				2.57%				0.53%				0.46%				1.21%				0.51%
Noninterest expense / average assets						2.80%				2.79%				2.86%				2.60%				2.59%				2.82%				2.67%
Net noninterest margin / average assets						-2.24%				-2.29%				-0.29%				-2.08%				-2.13%				-1.60%				-2.16%
Efficiency ratio						97.32%				98.56%				59.41%				87.49%				86.88%				80.16%				83.68%
Effective tax rate						-51.88%				-6.72%				9.48%				-30.85%				-22.20%				7.01%				0.30%
Non-performing assets to total assets						0.73%				0.61%				0.64%				0.61%				0.54%				0.73%				0.54%
Non-performing loans to total loans						0.92%				0.75%				0.78%				0.76%				0.66%				0.92%				0.66%
Allowance for credit losses to non-performing loans						134.12%				161.17%				159.12%				163.90%				192.89%				134.12%				192.89%
Allowance for credit losses to loans receivable						1.23%				1.22%				1.25%				1.24%				1.27%				1.23%				1.27%
Foreclosed real estate to total assets						0.00%				0.00%				0.00%				0.00%				0.00%				0.00%				0.00%
Basic earnings per share					$	0.14			$	0.03			$	2.18			$	0.36			$	0.52			$	2.35			$	1.60
Diluted earnings per share					$	0.14			$	0.03			$	2.17			$	0.35			$	0.51			$	2.35			$	1.60
Stockholders' equity / total assets						7.69%				7.16%				7.32%				6.99%				5.70%				7.69%				5.70%
Book value per share					$	36.99			$	34.45			$	35.17			$	34.28			$	27.68			$	36.99			$	27.68
Closing stock price					$	31.98			$	24.52			$	24.60			$	25.24			$	22.00			$	31.98			$	22.00
Price to earnings per share ratio						56.21				182.60				2.82				17.77				10.67				10.19				10.28
Dividends declared per common share					$	0.12			$	0.12			$	0.12			$	0.12			$	0.31			$	0.36			$	0.93
Common equity tier 1 capital to risk-weighted assets						11.10%				10.94%				10.89%				10.43%				10.17%				11.10%				10.17%
Tier 1 capital to risk-weighted assets						11.10%				10.94%				10.89%				10.43%				10.17%				11.10%				10.17%
Total capital to risk-weighted assets						12.14%				11.95%				11.92%				11.36%				11.12%				12.14%				11.12%
Tier 1 capital to adjusted average assets						8.38%				8.32%				8.24%				7.78%				7.81%				8.38%				7.81%
Non-GAAP Performance Ratios					Quarter ended,																				Nine months ended,
					(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
					September 30,				June 30,				March 31,				December 31,				September 30,				September 30,				September 30,
						2024				2024				2024				2023				2023				2024				2023
Net interest margin - tax equivalent						2.67%				2.67%				2.57%				2.80%				2.87%				2.64%				3.04%
Tangible book value per diluted share					$	31.28			$	28.67			$	29.30			$	28.31			$	21.63			$	31.28			$	21.63
Tangible book value per diluted share adjusted for AOCL					$	42.47			$	42.33			$	42.36			$	40.31			$	39.96			$	42.47			$	39.96
Tangible common equity to total assets						6.51%				5.95%				6.09%				5.77%				4.46%				6.51%				4.46%
Tangible common equity to total assets adjusted for AOCL						8.83%				8.79%				8.81%				8.22%				8.23%				8.83%				8.23%
(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)	September 30, 2024									June 30, 2024
	Average Balance				Interest			Rate (%)		Average Balance				Interest			Rate (%)
ASSETS
Interest bearing deposits in other financial institutions	$	44,365			$	665		6.00		$	60,378			$	800		5.30
Federal funds sold		682				9		5.28			1,263				10		3.17
Securities available-for-sale		342,451				2,031		2.37			337,226				2,047		2.43
Loans receivable		1,506,967				19,660		5.22			1,501,584				19,174		5.11
Federal Home Loan Bank stock		6,547				107		6.54			6,547				96		5.87
Total interest earning assets		1,901,012			$	22,472		4.73			1,906,998			$	22,127		4.64
Cash and non-interest bearing deposits in other financial institutions		32,198									18,054
Allowance for credit losses		(18,482	)								(18,788	)
Other noninterest bearing assets		155,996									158,358
Total assets	$	2,070,724								$	2,064,622
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing deposits	$	1,451,414			$	8,946		2.47		$	1,455,007			$	8,610		2.37
Repurchase agreements		43,074				435		4.04			41,388				399		3.86
Borrowed funds		95,224				1,085		4.56			85,940				1,064		4.95
Total interest bearing liabilities		1,589,712			$	10,466		2.63			1,582,335			$	10,073		2.55
Non-interest bearing deposits		287,507									291,618
Other noninterest bearing liabilities		41,696									45,029
Total liabilities		1,918,915									1,918,982
Total stockholders' equity		151,809									145,640
Total liabilities and stockholders' equity	$	2,070,724								$	2,064,622
Return on average assets		0.12	%								0.03	%
Return on average equity		1.60	%								0.39	%
Net interest margin (average earning assets)		2.53	%								2.53	%
Net interest margin (average earning assets) - tax equivalent		2.67	%								2.67	%
Net interest spread		2.10	%								2.09	%
Ratio of interest-earning assets to interest-bearing liabilities		1.20x									1.21x

Year-to-Date
(Dollars in thousands)	Average Balances, Interest, and Rates
(unaudited)	September 30, 2024									September 30, 2023
	Average Balance				Interest			Rate (%)		Average Balance				Interest			Rate (%)
ASSETS					`
Interest bearing deposits in other financial institutions	$	51,522			$	2,317		6.00		$	31,171			$	1,112		4.76
Federal funds sold		919				29		4.21			1,158				38		4.38
Certificates of deposit in other financial institutions		-				-		-			1,169				44		5.02
Securities available-for-sale		348,269				6,239		2.39			369,897				6,631		2.39
Loans receivable		1,504,197				57,713		5.12			1,519,981				55,481		4.87
Federal Home Loan Bank stock		6,547				285		5.80			6,547				221		4.50
Total interest earning assets		1,911,454			$	66,583		4.64			1,929,923			$	63,527		4.39
Cash and non-interest bearing deposits in other financial institutions		29,183									18,723
Allowance for credit losses		(18,670	)								(17,619	)
Other noninterest bearing assets		155,433									154,227
Total assets	$	2,077,400								$	2,085,254
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing deposits	$	1,464,682			$	26,350		2.40		$	1,455,410			$	17,258		1.58
Repurchase agreements		40,879				1,204		3.93			33,170				892		3.59
Borrowed funds		90,423				3,189		4.70			102,864				3,537		4.58
Total interest bearing liabilities		1,595,984			$	30,743		2.57			1,591,444			$	21,687		1.82
Non-interest bearing deposits		291,161									326,431
Other noninterest bearing liabilities		41,540									30,178
Total liabilities		1,928,685									1,948,053
Total stockholders' equity		148,715									137,201
Total liabilities and stockholders' equity	$	2,077,400								$	2,085,254
Return on average assets		0.64	%								0.44	%
Return on average equity		4.50	%								6.68	%
Net interest margin (average earning assets)		2.50	%								2.89	%
Net interest margin (average earning assets) - tax equivalent		2.64	%								3.04	%
Net interest spread		2.07	%								2.57	%
Ratio of interest-earning assets to interest-bearing liabilities		1.20x									1.21x

Finward Bancorp
Quarterly Financial Report
Balance Sheet Data
(Dollars in thousands)		(Unaudited)				(Unaudited)				(Unaudited)								(Unaudited)
		September 30,				June 30,				March 31,				December 31,				September 30,
			2024				2024				2024				2023				2023
ASSETS
Cash and non-interest bearing deposits in other financial institutions		$	23,071			$	19,061			$	16,418			$	17,942			$	17,922
Interest bearing deposits in other financial institutions			48,025				63,439				54,755				67,647				52,875
Total cash and cash equivalents			71,649				83,207				71,780				86,008				71,648
Securities available-for-sale			350,027				339,585				346,233				371,374				339,280
Loans held-for-sale			2,567				1,185				667				340				2,057
Loans receivable, net of deferred fees and costs			1,508,242				1,506,398				1,508,251				1,512,595				1,525,660
Less: allowance for credit losses			(18,516	)			(18,330	)			(18,805	)			(18,768	)			(19,430	)
Net loans receivable			1,489,726				1,488,068				1,489,446				1,493,827				1,506,230
Federal Home Loan Bank stock			6,547				6,547				6,547				6,547				6,547
Accrued interest receivable			7,442				7,695				7,583				8,045				7,864
Premises and equipment			47,912				48,696				47,795				38,436				38,810
Foreclosed real estate			-				-				71				71				71
Cash value of bank owned life insurance			33,312				33,107				32,895				32,702				32,509
Goodwill			22,395				22,395				22,395				22,395				22,395
Other intangible assets			2,203				2,555				2,911				3,272				3,636
Other assets			40,882				44,027				43,459				45,262				56,423
Total assets		$	2,074,662			$	2,077,067			$	2,071,782			$	2,108,279			$	2,087,470
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing		$	285,157			$	286,784			$	296,959			$	295,594			$	312,635
Interest bearing			1,463,653				1,469,970				1,450,519				1,517,827				1,471,402
Total			1,748,810				1,756,754				1,747,478				1,813,421				1,784,037
Repurchase agreements			43,038				42,973				41,137				38,124				48,310
Borrowed funds			85,000				85,000				90,000				80,000				100,000
Accrued expenses and other liabilities			38,259				43,709				41,586				29,389				36,080
Total liabilities			1,915,107				1,928,436				1,920,201				1,960,934				1,968,427
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: September 30, 2024 - 4,313,940
December 31, 2023 - 4,298,773
Additional paid-in capital			69,916				69,778				69,727				69,555				69,482
Accumulated other comprehensive loss			(48,241	)			(58,939	)			(56,313	)			(51,613	)			(78,848	)
Retained earnings			137,880				137,792				138,167				129,403				128,409
Total stockholders' equity			159,555				148,631				151,581				147,345				119,043
Total liabilities and stockholders' equity		$	2,074,662			$	2,077,067			$	2,071,782			$	2,108,279			$	2,087,470

Finward Bancorp
Quarterly Financial Report
Consolidated Statements of Income		Quarter Ended,																					Nine months ended,
(Dollars in thousands)		(Unaudited)				(Unaudited)				(Unaudited)								(Unaudited)					(Unaudited)				(Unaudited)
		September 30,				June 30,				March 31,				December 31,				September 30,					September 30,				September 30,
			2024				2024				2024				2023				2023					2024				2023
Interest income:
Loans		$	19,660			$	19,174			$	18,879			$	19,281			$	19,161				$	57,713			$	55,481
Securities & short-term investments			2,812				2,953				3,105				2,975				2,617					8,870				8,046
Total interest income			22,472				22,127				21,984				22,256				21,778					66,583				63,527
Interest expense:
Deposits			8,946				8,610				8,794				8,180				7,066					26,350				17,258
Borrowings			1,520				1,463				1,410				1,361				1,579					4,393				4,429
Total interest expense			10,466				10,073				10,204				9,541				8,645					30,743				21,687
Net interest income			12,006				12,054				11,780				12,715				13,133					35,840				41,840
Provision for credit losses			-				76				-				779				244					76				1,246
Net interest income after provision for credit losses			12,006				11,978				11,780				11,936				12,889					35,764				40,594
Noninterest income:
Fees and service charges			1,463				1,257				1,153				1,507				1,374					3,873				4,517
Wealth management operations			731				763				633				672				572					2,127				1,812
Gain on sale of loans held-for-sale, net			338				320				152				352				192					810				729
Increase in cash value of bank owned life insurance			205				212				193				193				193					610				573
Gain (loss) on sale of real estate			-				15				11,858				-				2					11,873				(13	)
Loss on sale of securities, net			-				-				(531	)			-				-					(531	)			(48	)
Other			130				6				17				11				64					154				441
Total noninterest income			2,867				2,573				13,475				2,735				2,397					18,916				8,011
Noninterest expense:
Compensation and benefits			6,963				7,037				7,109				6,290				6,729					21,109				21,365
Occupancy and equipment			2,181				2,120				1,915				1,520				1,711					6,205				4,898
Data processing			1,165				1,135				1,170				1,269				1,085					3,470				3,465
Federal deposit insurance premiums			435				397				501				492				474					1,333				1,511
Marketing			209				212				158				191				235					579				649
Other			3,521				3,516				4,151				3,755				3,259					9,465				8,547
Total noninterest expense			14,474				14,417				15,004				13,517				13,493					43,895				41,715
Income before income taxes			399				134				10,251				1,154				1,793					10,785				6,890
Income tax expenses (benefit)			(207	)			(9	)			972				(356	)			(398	)				756				21
Net income		$	606			$	143			$	9,279			$	1,510			$	2,191				$	10,029			$	6,869
Earnings per common share:
Basic		$	0.14			$	0.03			$	2.18			$	0.36			$	0.52				$	2.35			$	1.60
Diluted		$	0.14			$	0.03			$	2.17			$	0.35			$	0.51				$	2.35			$	1.60

Finward Bancorp
Quarterly Financial Report
Asset Quality					(Unaudited)				(Unaudited)				(Unaudited)						(Unaudited)
(Dollars in thousands)					September 30,				June 30,				March 31,			December 31,			September 30,
						2024				2024				2024			2023			2023
Nonaccruing loans					$	13,806			$	11,079			$	11,603		$	9,608		$	9,840
Accruing loans delinquent more than 90 days						-				294				215			1,843			233
Securities in non-accrual						1,440				1,371				1,442			1,357			1,155
Foreclosed real estate						-				-				71			71			71
	Total nonperforming assets				$	15,246			$	12,744			$	13,331		$	12,879		$	11,299
Allowance for credit losses (ACL):
	ACL specific allowances for collateral dependent loans				$	1,821			$	1,327			$	1,455		$	906		$	554
	ACL general allowances for loan portfolio					16,695				17,003				17,351			17,862			18,876
		Total ACL			$	18,516			$	18,330			$	18,806		$	18,768		$	19,430

(Dollars in millions)															Minimum Required To Be
									Minimum Required For						Well Capitalized Under Prompt
		Actual							Capital Adequacy Purposes						Corrective Action Regulations
September 30, 2024		Amount			Ratio				Amount			Ratio			Amount			Ratio
Common equity tier 1 capital to risk-weighted assets		$	176.3		11.10	%			$	71.9		4.50	%		$	103.9		6.50	%
Tier 1 capital to risk-weighted assets		$	176.3		11.10	%			$	95.9		6.00	%		$	127.9		8.00	%
Total capital to risk-weighted assets		$	194.0		12.14	%			$	127.9		8.00	%		$	159.8		10.00	%
Tier 1 capital to adjusted average assets		$	176.3		8.38	%			$	84.7		4.00	%		$	105.8		5.00	%

Table 1 - Reconciliation of the Non-GAAP Performance Measures
(Dollars in thousands)	Quarter Ended,																								Nine months ended,
(unaudited)	September 30, 2024					June 30, 2024					March 31, 2024					December 31, 2023					September 30, 2023				September 30, 2024					September 30, 2023
Calculation of tangible common equity
Total stockholder's equity	$	159,555				$	148,631				$	151,581				$	147,345				$	119,043			$	159,555				$	119,043
Goodwill		(22,395	)				(22,395	)				(22,395	)				(22,395	)				(22,395	)			(22,395	)				(22,395	)
Other intangibles		(2,203	)				(2,555	)				(2,911	)				(3,272	)				(3,636	)			(2,203	)				(3,636	)
Tangible common equity	$	134,957				$	123,681				$	126,275				$	121,678				$	93,012			$	134,957				$	93,012
Calculation of tangible common equity adjusted for accumulated other comprehensive loss
Tangible common equity	$	134,957				$	123,681				$	126,275				$	121,678				$	93,012			$	134,957				$	93,012
Accumulated other comprehensive loss		48,241					58,939					56,313					51,613					78,848				48,241					78,848
Tangible common equity adjusted for accumulated other comprehensive loss	$	183,198				$	182,620				$	182,588				$	173,291				$	171,860			$	183,198				$	171,860
Calculation of tangible book value per share
Tangible common equity	$	134,957				$	123,681				$	126,275				$	121,678				$	93,012			$	134,957				$	93,012
Shares outstanding		4,313,940					4,313,940					4,310,251					4,298,773					4,300,881				4,313,940					4,300,881
Tangible book value per diluted share	$	31.28				$	28.67				$	29.30				$	28.31				$	21.63			$	31.28				$	21.63
Calculation of tangible book value per diluted share adjusted for accumulated other comprehensive loss
Tangible common equity adjusted for accumulated other comprehensive loss	$	183,198				$	182,620				$	182,588				$	173,291				$	171,860			$	183,198				$	171,860
Diluted average common shares outstanding		4,313,940					4,313,940					4,310,251					4,298,773					4,300,881				4,313,940					4,300,881
Tangible book value per diluted share adjusted for accumulated other comprehensive loss	$	42.47				$	42.33				$	42.36				$	40.31				$	39.96			$	42.47				$	39.96
Calculation of tangible common equity to total assets
Tangible common equity	$	134,957				$	123,681				$	126,275				$	121,678				$	93,012			$	134,957				$	93,012
Total assets		2,074,662					2,077,067					2,071,782					2,108,279					2,087,470				2,074,662					2,087,470
Tangible common equity to total assets		6.51	%				5.95	%				6.09	%				5.77	%				4.46	%			6.51	%				4.46	%
Calculation of tangible common equity to total assets adjusted for accumulated other comprehensive loss
Tangible common equity adjusted for accumulated other comprehensive loss	$	183,198				$	182,620				$	182,588				$	173,291				$	171,860			$	183,198				$	171,860
Total assets		2,074,662					2,077,067					2,071,782					2,108,279					2,087,470				2,074,662					2,087,470
Tangible common equity to total assets adjusted for accumulated other comprehensive loss		8.83	%				8.79	%				8.81	%				8.22	%				8.23	%			8.83	%				8.23	%
Calculation of tax adjusted net interest margin
Net interest income	$	12,006				$	12,054				$	11,780				$	12,715				$	13,133			$	35,840				$	41,840
Tax adjusted interest on securities and loans		678					677					699					722					730				2,054					2,234
Adjusted net interest income		12,684					12,731					12,749					13,437					13,863				37,894					44,074
Total average earning assets		1,901,012					1,906,998					1,945,501					1,920,127					1,930,118				1,911,454					1,929,923
Tax adjusted net interest margin		2.67	%				2.67	%				2.57	%				2.80	%				2.87	%			2.64	%				3.04	%
Efficiency ratio
Total non-interest expense	$	14,474				$	14,417				$	15,004				$	13,517				$	13,493			$	43,895				$	13,493
Total revenue		14,873					14,627					25,255					15,450					15,530				54,756					15,530
Efficiency ratio		97.32	%				98.56	%				59.41	%				87.49	%				86.88	%			80.16	%				86.88	%

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