Finward Bancorp

01/27/2026 | Press release | Distributed by Public on 01/27/2026 15:03

Business/Financial Results (Form 8-K)

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January 27, 2026
Finward Bancorp Announces Fourth Quarter 2025 Results
Munster, Indiana - Finward Bancorp (Nasdaq: FNWD) (the "Bancorp"), the holding company for Peoples Bank (the
"Bank"), today announced that net income available to common stockholders was $2.0 million, or $0.46 per diluted share,
for the quarter ended December 31, 2025, as compared to $3.5 million, or $0.81 per diluted share, for the quarter ended
September 30, 2025. Selected performance metrics are as follows for the periods presented:
Performance Ratios
Quarter ended
12/31/2025
9/30/2025
6/30/2025
3/31/2025
12/31/2024
Return on equity
4.66%
8.96%
5.66%
1.17%
5.39%
Return on assets
0.39%
0.68%
0.42%
0.09%
0.41%
Net interest margin, tax-equivalent (non-GAAP)
3.32%
3.18%
3.11%
2.95%
2.79%
Non-interest income/average assets
0.29%
0.57%
0.53%
0.43%
0.72%
Non-interest expense/average assets
2.90%
2.74%
2.90%
2.81%
2.75%
Efficiency ratio
89.50%
81.22%
88.92%
93.11%
87.20%
"Operational results were significantly stronger in 2025 than 2024, reflecting the execution of successful strategic
initiatives that have strengthened our organization over that time. While we continue to aim higher, these results reflect the
hard work our team has put in throughout the year, " said Benjamin Bochnowski, CEO. "Actions taken in the fourth quarter
are expected to further enhance our financial position, including steps to optimize our balance sheet, reduce risk, increase
net interest margin, and improve efficiency. This included a small securities repositioning, where the Bank sold $26.6
million in primarily municipal securities, generating a $1.6 million pre-tax reduction to our posted fourth quarter results.
Credit quality also remains stable, and the current rate environment remains supportive of continued progress in operational
results in 2026."
Highlights of the current period include:
•Net Interest Margin - The net interest margin for the quarter ended December 31, 2025 was 3.18% compared to
3.04% for the quarter ended September 30, 2025. Net interest margin on a tax-equivalent basis (a non-GAAP measure)
for the quarter ended December 31, 2025 was 3.32%, as compared to 3.18% for the quarter ended September 30, 2025.
The increased net interest margin from the prior quarter is primarily the result of increased loan yields from loan
repricing, as well as reduced deposit costs as a result of the Federal Reserve's continued reduction of federal funds
rates during the quarter.
•Funding - As of December 31, 2025, deposits totaled $1.7 billion, a decrease of $23.7 million, or 1.4% compared with
September 30, 2025 balances, which totaled $1.8 billion. As of December 31, 2025, non-interest-bearing deposits
totaled $267.4 million, a decrease of $12.9 million. Core deposits totaled $1.2 billion at both December 31, 2025 and
September 30, 2025. Core deposits include checking, savings, and money market accounts and represented 71.1% of
the Bancorp's total deposits at December 31, 2025. As of December 31, 2025, balances for certificates of deposit
totaled $499.6 million, compared to $536.7 million on September 30, 2025, a decrease of $37.1 million or 6.9%. As of
December 31, 2025, the Bank has no remaining brokered deposits. The decrease in total portfolio deposits is primarily
related to cyclical flows, maturity of $20 million in brokered deposits, and continued adjustments to deposit pricing. In
addition, as of December 31, 2025, borrowings and repurchase agreements totaled $84.7 million, a decrease of $18.7
million or 18.1%, compared to September 30, 2025. The decrease in borrowings was the result of certain called
putable FHLB advances occurring during the quarter.
As of December 31, 2025, 71.8% of our deposits are fully FDIC insured, and another 7.3% are further backed by the
Indiana Public Deposit Insurance Fund. The Bancorp's liquidity position remains strong with solid core deposit
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customer relationships, excess cash, debt securities, contractual loan repayments, and access to diversified borrowing
sources. As of December 31, 2025, the Bancorp had available liquidity of $674 million including borrowing capacity
from the FHLB and Federal Reserve facilities.
•Securities Portfolio - Securities available for sale balances decreased by $18.9 million to $316.2 million as of
December 31, 2025, compared to $335.2 million as of September 30, 2025. The yield on the securities portfolio
decreased to 2.29% for the three months ended December 31, 2025 from 2.40% for the three months ended
September 30, 2025. During the fourth quarter, the Bank incurred $1.6 million in securities losses, attributable to the
execution of securities repositioning transactions where the Bank sold securities with a market value of $26.6 million
and an unadjusted book yield of 2.59%.
•Lending - The Bank's aggregate loan portfolio totaled $1.45 billion on December 31, 2025 and $1.47 billion on
September 30, 2025. During the three months ended December 31, 2025, the Bank originated $68.9 million in new
commercial loans, compared to $62.6 million during the three months ended September 30, 2025. At December 31,
2025, the Bancorp's portfolio loan balances in commercial real estate owner occupied properties totaled $253.5 million
or 17.4% of total loan balances and commercial real estate non-owner occupied properties totaled $302.1 million or
20.9% of total loan balances. Of the $302.1 million in commercial real estate non-owner occupied properties balances,
loans collateralized by office buildings represented $42.1 million or 2.9% of total loan balances. The decrease in total
portfolio loans is primarily due to customer loan payoffs experienced during the quarter.
•Asset Quality - At December 31, 2025, non-performing loans totaled $11.9 million, compared to $13.9 million at
September 30, 2025, a decrease of $2.0 million or 14.3%. The Bank's ratio of non-performing loans to total loans was
0.82% at December 31, 2025, compared to 0.94% at September 30, 2025. The Bank's ratio of non-performing assets to
total assets was 0.68% at December 31, 2025 and 0.76% at September 30, 2025. Management maintains a vigilant
oversight of nonperforming loans through proactive relationship management. The Bank has no known credit
exposures to non-depositary financial institutions at this time.
The allowance for credit losses (ACL) on loans totaled $17.5 million at December 31, 2025, or 1.21% of total loans
receivable, compared to $18.0 million at September 30, 2025, or 1.22% of total loans receivable, a decrease of $471
thousand or 2.62%. The Bank's unused commitment reserve, included in other liabilities, totaled $1.8 million at
December 31, 2025, compared to $1.7 million at September 30, 2025, an increase of $86 thousand or 5.2%.
For the quarter ended December 31, 2025, the Bank recorded a net benefit from credit loss totaling $84 thousand based
on lower loan impairments, reduction of certain loan segment balances, and other factors within the Bank's ACL
modeling. The fourth quarter's benefit consisted of a $170 thousand reversal for credit losses on loans, and a $86
thousand provision of credit losses on unused commitments. For the quarter ended December 31, 2025, net loan
charge-offs totaled $301 thousand, compared to net loan charge-offs of $268 thousand for the quarter ended
September 30, 2025. The allowance for credit losses as a percentage of non-performing loans, or coverage ratio, was
147.1% at December 31, 2025, compared to 129.4% at September 30, 2025.
•Operating Income and Expenses - Non-interest income as percentage of average assets was 0.29% for the quarter
ended December 31, 2025, as compared to 0.57% for the quarter ended September 30, 2025. The decrease in non-
interest income quarter over quarter was primarily attributable to the realized losses on the sale of investment securities
partially offset by bank owned life insurance death claim benefits. Non-interest expense as a percentage of average
assets was 2.90% for the quarter ended December 31, 2025, as compared to 2.74% for the quarter ended September 30,
2025. The increase in non-interest expenses quarter over quarter was primarily attributable to higher compensation and
benefits and data processing expense as well as higher occupancy and equipment expenses. The Bank remains focused
on identifying additional operating efficiencies and third-party expense reductions.
•Capital Adequacy - The Bank's tier 1 leverage ratio was 8.93% as of December 31, 2025 and 8.77% as of
September 30, 2025. 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 (non-GAAP) was $34.92 at December 31, 2025, up
from $32.77 as of September 30, 2025. Tangible common equity to tangible assets (non-GAAP) was 7.56% at
December 31, 2025, up from 6.99% as of September 30, 2025. Excluding accumulated other comprehensive losses,
tangible book value per share (non-GAAP) increased to $44.55 as of December 31, 2025, from $44.16 as of
September 30, 2025.
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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/tangible assets, tangible common equity adjusted for other comprehensive loss/tangible assets, net interest
margin on a tax-equivalent basis, and efficiency ratio which can vary from period to period, provides a better comparison
of period to period operating performance. The net interest income and net interest margin on a tax-equivalent basis
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 corporate 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 the "Reconciliation of non-GAAP Financial Measures" below for more
information.
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
Finward Bancorp published this content on January 27, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on January 27, 2026 at 21:03 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]