Finward Bancorp

07/28/2026 | Press release | Distributed by Public on 07/28/2026 14:50

Business/Financial Results (Form 8-K)

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July 28, 2026
Finward Bancorp Announces Second Quarter 2026 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 $2.1 million, or $0.48 per diluted share,
for the quarter ended June 30, 2026, as compared to $2.2 million, or $0.52 per diluted share, for the quarter ended
March 31, 2026. Selected performance metrics are as follows for the periods presented:
Performance Ratios
Quarter ended
6/30/2026
3/31/2026
12/31/2025
9/30/2025
6/30/2025
Return on equity
4.74%
5.00%
4.66%
8.96%
5.66%
Return on assets
0.42%
0.44%
0.39%
0.68%
0.42%
Net interest margin, tax-equivalent (non-GAAP)
3.37%
3.35%
3.32%
3.18%
3.11%
Non-interest income/average assets
0.48%
0.48%
0.29%
0.57%
0.53%
Non-interest expense/average assets
2.95%
2.93%
2.90%
2.74%
2.90%
Efficiency ratio
84.52%
84.45%
89.50%
81.22%
88.92%
"Despite overhead impacts from merger-related expenses and a previously disclosed branch closure, we showed continued
progress in key areas this quarter. Results were supported by solid loan growth, stable deposit funding, and continued
momentum across the organization. These results reflect the dedication of our team and the strength of the relationships we
have built throughout Northwest Indiana and Chicagoland, and I am proud of what our team has accomplished together,"
said Benjamin Bochnowski, Chief Executive Officer. "The quarter was also highlighted by the announcement of our
planned merger with First Financial. This transaction recognizes the value of our franchise and positions our customers,
employees, communities, and shareholders to benefit from an even stronger banking organization in the years ahead. While
we are excited about the opportunities this partnership creates, our near-term priorities are clear: serving customers,
maintaining strong credit quality, and preparing for a successful combination with First Financial."
Highlights of the current period include:
•Net Interest Margin - The net interest margin for the quarter ended June 30, 2026 was 3.25% compared to 3.23% for
the quarter ended March 31, 2026. Net interest margin on a tax-equivalent basis (a non-GAAP measure) for the quarter
ended June 30, 2026 was 3.37%, as compared to 3.35% for the quarter ended March 31, 2026. Net interest margin
increased from the prior quarter primarily due to continued repricing and maturity of the existing loan portfolio, as
well as strength in new loan originations.
•Funding - As of June 30, 2026, deposits totaled $1.73 billion, an increase of $13.5 million, or 0.8% compared with
March 31, 2026 balances, which totaled $1.72 billion. As of June 30, 2026, non-interest-bearing deposits totaled
$270.7 million, a decrease of $8.0 million. Core deposits totaled $1.2 billion at both June 30, 2026 and March 31,
2026. Core deposits include checking, savings, and money market accounts and represented 71.3% of the Bancorp's
total deposits at June 30, 2026. As of June 30, 2026, balances for certificates of deposit totaled $497.4 million,
compared to $488.8 million on March 31, 2026, an increase of $8.6 million or 1.8%. The increase in total portfolio
deposits is primarily related to cyclical flows and continued adjustments to deposit pricing. In addition, as of June 30,
2026, borrowings, federal funds purchased and repurchase agreements totaled $95.3 million, an increase of $4.5
million or 4.9%, compared to March 31, 2026. The increase in borrowings was primarily attributable to new FHLB
advances in conjunction with increased loan origination during the quarter.
As of June 30, 2026, 72.5% of our deposits are fully FDIC insured, and another 7.8% 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 June 30, 2026, the Bancorp had available liquidity of $604 million including borrowing capacity from the FHLB
and Federal Reserve facilities.
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•Securities Portfolio - Securities available for sale balances increased by $2.5 million to $310.2 million as of June 30,
2026, compared to $307.7 million as of March 31, 2026. The yield on the securities portfolio increased to 2.27% for
the three months ended June 30, 2026 from 2.22% for the three months ended March 31, 2026. The increase in
securities available for sale was primarily attributable to a decrease in the negative fair value adjustment to securities.
The Bank did not sell or purchase any securities during the quarter.
•Lending - The Bank's aggregate loan portfolio totaled $1.50 billion on June 30, 2026 and $1.46 billion on March 31,
2026. During the three months ended June 30, 2026, the Bank originated $81.3 million in new commercial loans,
compared to $37.4 million during the three months ended March 31, 2026, based on strength experienced in the
lending pipeline, specifically within commercial business and commercial real estate portfolios. At June 30, 2026, the
Bancorp's portfolio loan balances in commercial real estate owner occupied properties totaled $262.4 million or 17.4%
of loans receivable and commercial real estate non-owner occupied properties totaled $334.9 million or 22.3% of loans
receivable. Of the $334.9 million in commercial real estate non-owner occupied properties balances, loans
collateralized by office buildings represented $41.2 million or 2.7% of total loan balances.
•Asset Quality - At June 30, 2026, non-performing loans totaled $16.5 million, compared to $12.4 million at March 31,
2026, an increase of $4.2 million or 33.8%. The Bank's ratio of non-performing loans to total loans was 1.10% at
June 30, 2026, compared to 0.85% at March 31, 2026. The Bank's ratio of non-performing assets to total assets was
0.90% at June 30, 2026 and 0.71% at March 31, 2026. The non-performing balance increases are driven by a variety of
credits and not due to concentrations or an indication of overall economic stress within our customer base or footprint.
The increase in non-performers consisted of twelve loans from eleven different relationships, averaging $417 thousand
per loan across commercial real estate, multifamily and residential real estate. 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 $17.7 million at June 30, 2026, or 1.18% of total loans
receivable, compared to $17.3 million at March 31, 2026, or 1.19% of total loans receivable, an increase of $409
thousand or 2.37%. The Bank's unused commitment reserve, included in other liabilities, totaled $1.9 million at
June 30, 2026, compared to $2.0 million at March 31, 2026, a decrease of $114 thousand or 5.6%.
For the quarter ended June 30, 2026, the Bank recorded a net provision for credit loss totaling $264 thousand based on
quarterly growth in certain loan segment balances and other factors within the Bank's ACL modeling. The second
quarter's provision consisted of a $378 thousand provision for credit losses on loans, and a $114 thousand reversal of
credit losses on unused commitments. For the quarter ended June 30, 2026, net loan recoveries totaled $31 thousand,
compared to net loan recoveries of $3 thousand for the quarter ended March 31, 2026. The allowance for credit losses
as a percentage of non-performing loans, or coverage ratio, was 106.9% at June 30, 2026, compared to 139.7% at
March 31, 2026.
•Operating Income and Expenses - Non-interest income as a percentage of average assets was 0.48% for both the
quarter ended June 30, 2026 and March 31, 2026. Total non-interest expense increased slightly from the prior quarter,
while non-interest expense as a percentage of average assets was 2.95% for the quarter ended June 30, 2026, as
compared to 2.93% for the quarter ended March 31, 2026. The aggregate reduction in non-interest income as
compared to the prior quarter was due to a $180 thousand loss associated with the closure of one of the Bancorp's
leased branch locations. The increase in non-interest expense quarter over quarter was primarily attributable to
compensation and benefits and seasonality of certain professional and outside services expenses.
•Capital Adequacy - The Bank's tier 1 leverage ratio was 9.31% as of June 30, 2026 and 9.24% as of March 31, 2026.
The Bank's capital continues to exceed all applicable regulatory capital requirements. The Bancorp's tangible book
value per share (non-GAAP) was $35.75 at June 30, 2026, up from $34.39 as of March 31, 2026. Tangible common
equity to tangible assets (non-GAAP) was 7.68% at June 30, 2026, up from 7.48% as of March 31, 2026.
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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 book value per share, tangible common equity/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 24 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 July 28, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on July 28, 2026 at 20:51 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]