Finward Bancorp

10/28/2025 | Press release | Distributed by Public on 10/28/2025 15:28

Business/Financial Results (Form 8-K)

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October 28, 2025
Finward Bancorp Announces Third 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 $3.5 million, or $0.81 per diluted share,
for the quarter ended September 30, 2025, as compared to $2.2 million, or $0.50 per diluted share, for the quarter ended
June 30, 2025. Selected performance metrics are as follows for the periods presented:
Performance Ratios
Quarter ended
9/30/2025
6/30/2025
3/31/2025
12/31/2024
9/30/2024
Return on equity
8.96%
5.66%
1.17%
5.39%
1.60%
Return on assets
0.68%
0.42%
0.09%
0.41%
0.12%
Net interest margin, tax-equivalent (non-GAAP)
3.18%
3.11%
2.95%
2.79%
2.66%
Non-interest income/average assets
0.57%
0.53%
0.43%
0.72%
0.55%
Non-interest expense/average assets
2.74%
2.90%
2.81%
2.75%
2.80%
Efficiency ratio
81.22%
88.92%
93.11%
87.20%
97.32%
"We continued to build momentum in the third quarter, delivering overall improved profitability. Margin expansion and
stable credit contributed to further overall profitability gains, along with benefits in overhead efficiency. The recent rate cut
by the Federal Reserve, coupled with our strengthened capital and liquidity position, provides a solid foundation for growth
as we enter the final quarter of the year," said Benjamin Bochnowski, CEO. "We are well positioned to maintain our
current trajectory, and I'm proud of our team and their disciplined execution that got us to this point."
Highlights of the current period include:
•Net Interest Margin - The net interest margin for the quarter ended September 30, 2025 was 3.04% compared to
2.97% for the quarter ended June 30, 2025. Net interest margin on a tax-equivalent basis (a non-GAAP measure) for
the quarter ended September 30, 2025 was 3.18%, as compared to 3.11% for the quarter ended June 30, 2025. The
increased net interest margin from the prior quarter is primarily the result of increased loan yields from repricing, as
well as customer payoffs of certain lower yielding loans.
•Funding - As of September 30, 2025, deposits totaled $1.8 billion, an increase of $4.2 million, or 0.2% compared with
June 30, 2025 balances, which also totaled $1.8 billion. As of September 30, 2025, non-interest-bearing deposits
totaled $280.3 million, an increase of $9.1 million. Core deposits totaled $1.2 billion at September 30, 2025 and
June 30, 2025. Core deposits include checking, savings, and money market accounts and represented 69.3% of the
Bancorp's total deposits at September 30, 2025. As of September 30, 2025, balances for certificates of deposit totaled
$536.7 million, compared to $542.7 million on June 30, 2025, a decrease of $6.0 million or 1.1%. The decrease in total
portfolio deposits is primarily related to cyclical flows and continued adjustments to deposit pricing. In addition, as of
September 30, 2025, borrowings and repurchase agreements totaled $103.4 million, a decrease of $9.9 million or
8.7%, compared to June 30, 2025. The decrease in borrowings was the result of the maturity of FHLB advances during
the quarter.
As of September 30, 2025, 72.4% of our deposits are fully FDIC insured, and another 7.9% are further backed by the
Indiana Public Deposit Insurance Fund. The Bancorp's liquidity position remains strong with solid core deposit
customer relationships, excess cash, debt securities, contractual loan repayments, and access to diversified borrowing
sources. As of September 30, 2025, the Bancorp had available liquidity of $737 million including borrowing capacity
from the FHLB and Federal Reserve facilities.
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•Securities Portfolio - Securities available for sale balances increased by $7.3 million to $335.2 million as of
September 30, 2025, compared to $327.8 million as of June 30, 2025. The increase in securities available for sale was
primarily due to an increase in the fair value of the overall portfolio. The yield on the securities portfolio decreased to
2.40% for the three months ended September 30, 2025 from 2.42% for the three months ended June 30, 2025.
Management did not execute any securities sale transactions during the quarter.
•Lending - The Bank's aggregate loan portfolio totaled $1.5 billion on both September 30, 2025 and June 30, 2025.
During the three months ended September 30, 2025, the Bank originated $62.6 million in new commercial loans,
compared to $46.1 million during the three months ended June 30, 2025. At September 30, 2025, the Bancorp's
portfolio loan balances in commercial real estate owner occupied properties totaled $252.9 million or 17.2% of total
loan balances and commercial real estate non-owner occupied properties totaled $311.6 million or 21.2% of total loan
balances. Of the $311.6 million in commercial real estate non-owner occupied properties balances, loans collateralized
by office buildings represented $42.5 million or 2.9% of total loan balances.
•Asset Quality - At September 30, 2025, non-performing loans totaled $13.9 million, compared to $13.5 million at
June 30, 2025, an increase of $366 thousand or 2.7%. The Bank's ratio of non-performing loans to total loans was
0.94% at September 30, 2025, compared to 0.91% at June 30, 2025. The Bank's ratio of non-performing assets to total
assets was 0.76% at September 30, 2025 and 0.74% at June 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 $18.0 million at September 30, 2025, or 1.22% of total loans
receivable, compared to $18.2 million at June 30, 2025, or 1.22% of total loans receivable, a decrease of $229
thousand or 1.1%. The Bank's unused commitment reserve, included in other liabilities, totaled $1.7 million at
September 30, 2025, compared to $2.0 million at June 30, 2025, a decrease of $361 thousand or 17.8%.
For the quarter ended September 30, 2025, the Bank recorded a net benefit from credit loss totaling $301 thousand
based on net loan recoveries, reduction of certain loan segment balances, and other factors within the Bank's ACL
modeling. The third quarter's benefit consisted of a $61 thousand provision for credit losses on loans, and a $361
thousand reversal of credit losses on unused commitments. For the quarter ended September 30, 2025, net loan charge-
offs totaled $268 thousand, compared to net loan recoveries of $414 thousand for the quarter ended June 30, 2025. The
allowance for credit losses as a percentage of non-performing loans, or coverage ratio, was 129.4% at September 30,
2025, compared to 133.0% at June 30, 2025.
•Operating Expenses - Non-interest expense as a percentage of average assets was 2.74% for the quarter ended
September 30, 2025, as compared to 2.90% for the quarter ended June 30, 2025. The decrease in non-interest expenses
quarter over quarter was primarily attributable to lower data processing expenses and professional and outside services
expense as well as lower federal deposit insurance premiums and other operational 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 8.77% as of September 30, 2025 and 8.69% as of June 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 $32.77 at September 30, 2025, up from $30.16 as
of June 30, 2025. Tangible common equity to tangible assets (non-GAAP) was 6.99% at September 30, 2025, up from
6.41% as of June 30, 2025. Excluding accumulated other comprehensive losses, tangible book value per share (non-
GAAP) increased to $44.16 as of September 30, 2025, from $43.47 as of June 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 October 28, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on October 28, 2025 at 21:28 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]