MUNSTER, Ind., Oct. 25, 2022 (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 $11.1 million, or $2.67 per
diluted share, for the nine months ended September 30, 2022, as
compared to $11.7 million, or $3.35 per diluted share, for the
corresponding prior year period. For the quarter ended September
30, 2022, the Bancorp’s net income totaled $4.6 million, or $1.07
per diluted share, as compared to $3.5 million, or $1.02 per
diluted share, for the quarter ending September 30, 2021. 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, |
|
|
2022 |
|
2022 |
|
2022 |
|
2021 |
|
2021 |
|
|
2022 |
|
2021 |
Return on equity |
|
13.65% |
|
12.45% |
|
5.01% |
|
8.56% |
|
8.90% |
|
|
9.98% |
|
9.96% |
Return on assets |
|
0.88% |
|
0.85% |
|
0.44% |
|
0.83% |
|
0.87% |
|
|
0.73% |
|
0.98% |
Noninterest income / average assets |
|
0.51% |
|
0.56% |
|
0.64% |
|
0.95% |
|
1.02% |
|
|
0.57% |
|
1.02% |
Noninterest expense / average assets |
|
2.90% |
|
2.91% |
|
3.33% |
|
3.18% |
|
3.04% |
|
|
3.04% |
|
2.85% |
Efficiency ratio |
|
74.54% |
|
75.15% |
|
87.10% |
|
78.28% |
|
75.87% |
|
|
78.72% |
|
70.26% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core net income for the nine months ended September 30, 2022,
amounted to $12.7 million, or $3.04 per diluted share, compared to
$10.5 million, or $3.03 per diluted share for the nine months ended
September 30, 2021. Core net income for the quarter ended September
30, 2022, amounted to $4.7 million, or $1.10 per diluted share,
compared to $3.1 million, or $0.88 per diluted share for the
quarter ended September 30, 2021. Core net income is a non-GAAP
measure. For the periods presented, the core net income measure
excludes merger related expenses, net (gain) loss on securities,
net loss recognized on the sale of premises and equipment, core
deposit accretion, certificate of deposit purchase premium
amortization, purchase discount amortization, and related tax
benefit/(cost). Selected non-GAAP performance metrics are as
follows for the periods presented:
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, |
|
|
2022 |
|
2022 |
|
2022 |
|
2021 |
|
2021 |
|
|
2022 |
|
2021 |
Core return on equity |
|
17.75% |
|
13.78% |
|
11.32% |
|
7.83% |
|
8.46% |
|
|
13.96% |
|
9.96% |
Core return on assets |
|
0.90% |
|
0.75% |
|
0.83% |
|
0.71% |
|
0.75% |
|
|
0.83% |
|
0.89% |
Core noninterest expense / average assets |
|
2.78% |
|
2.83% |
|
2.67% |
|
3.12% |
|
2.98% |
|
|
2.76% |
|
2.81% |
Core efficiency ratio |
|
73.10% |
|
77.12% |
|
72.87% |
|
81.01% |
|
78.48% |
|
|
74.39% |
|
72.49% |
Net interest margin - tax equivalent |
|
3.84% |
|
3.78% |
|
3.63% |
|
3.58% |
|
3.46% |
|
|
3.75% |
|
3.49% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refer to “Disclosure Regarding Non-GAAP Measures” and the
“Reconciliation of the Non-GAAP Performance Ratios” table below for
additional information regarding our non-GAAP measures and impact
per period by operation.
Highlights of the year-to-date period include:
- Core net income benefiting from acquisition and
internal growth: GAAP net income for the nine months ended
September 30, 2022, decreased $530 thousand compared to the nine
months ended September 30, 2021. However, core net income for the
nine months ended September 30, 2022, increased by $2.1 million, as
compared to the nine months ended September 30, 2021, primarily
relating to the increase in interest-earning assets acquired from
the acquisition of Royal Financial, Inc. (“Royal”), organic loan
growth, and the continued ability to manage the net interest
margin.
- Net interest margin continuing to improve: The
net interest margin for the nine months ended September 30, 2022,
was 3.56%, compared to 3.29% for the nine months ended September
30, 2021. The tax-adjusted net interest margin (a non-GAAP measure)
for the nine months ended September 30, 2022, was 3.75%, compared
to 3.49% for the nine months ended September 30, 2021. The
increased net interest margin and tax-adjusted margin is primarily
related to increased loan balances from acquired and internally
generated growth and the ability to manage deposit and borrowing
costs to support earning asset growth. Internally generated loan
growth (separate from the acquisition) totaled $81.2 million or
8.4%. Leading the internally generated loan growth was commercial
real estate loans of $63.6 million or 6.5%. 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. Despite the
continued improvement to the net interest margin, the overall
interest rate environment will likely make maintaining and
improving this metric more difficult into next year.
- Unrealized losses on the securities portfolio:
Accumulated other comprehensive losses were $79.8 million as of
September 30, 2022. However, during the quarter, securities
portfolio cashflows from sales and regular paydowns of the
portfolio of $17 million were used to fund internally generated
loan growth. Furthermore, a year-to-date total of $67 million of
cashflows have been redirected from the securities portfolio to
fund internal loan growth. The yield on the securities portfolio
improved on a year-to-date basis to 2.17% at September 30, 2022, up
from 1.97% at September 30, 2021. The securities portfolio also
generated gains of $662 thousand from the sale of securities for
the nine months ended September 30, 2022. The effective duration of
the securities portfolio was 6.9 years as of September 30, 2022.
Management continues to actively manage the securities portfolio
and does not currently anticipate the need to realize losses from
the securities portfolio. Further, it remains unlikely the Bancorp
will be required to sell the investments before recovery of their
amortized cost basis, which may be at maturity.
- Gain on sale of loans: Increases in mortgage
rates have dampened demand and slowed the sale of fixed rate
mortgage loans into the secondary market. As a result, gains from
the sale of loans for the nine-months ended September 30, 2022,
totaled $1.2 million, down from $4.4 million for the nine-months
ended September 30, 2021. During the nine months ended September
30, 2022, the Bancorp originated $40.8 million in new fixed rate
mortgage loans for sale, compared to $120.1 million during the nine
months ended September 30, 2021. During the nine months ended
September 30, 2022, the Bancorp originated $78.8 million in new
mortgage loans retained in its portfolio, compared to $34.7 million
during the nine months ended September 30, 2021. These retained
loans are primarily construction loans and adjustable-rate loans
with duration of 5 years or less, and the Bank continues to sell
longer-duration fixed rate mortgages into the secondary
market.
- Building a digital-forward foundation: Primary
focus remains on enhancing the customer experience and managing
risk through our digital platforms. The Bank transitioned to a new
tech-enabled customer contact platform during October and is in
process of transitioning all customer calls to the platform. The
Bank is also planning further enhancements to customer acquisition,
onboarding, and servicing platforms to enhance customer experience
and drive efficiency in these areas.
- Optimizing the banking center footprint:
Following the previous year’s successful closure of one banking
center and the donation and leaseback of another, progress during
the quarter continued towards the closure of two additional banking
centers which closed on July 1st, as well as the
announcement of plans to close three additional banking centers by
the end of the current year. Each branch closure is expected to
result in approximately $250 thousand in operational expense
reduction, excluding personnel expenses. The 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 communities Finward serves. By the end of 2022,
the Bank expects to have reduced its overall branch count by nearly
20% over a 12-month period and management will continue to evaluate
branch operations as circumstances permit.
- Asset Quality: At September 30, 2022, the
allowance for loan losses totaled $13.4 million and is considered
adequate by management. For the nine months ended September 30,
2022, recoveries, net of charge-offs, totaled $56 thousand. The
allowance for loan losses as a percentage of total loans was 0.89%
at September 30, 2022, and the allowance for loan losses as a
percentage of non-performing loans, or coverage ratio, was 122.6%
at September 30, 2022. Management also considers reserves that are
not part of the ALL that have been established from acquisition
activity. When these additional reserves are included on a non-GAAP
basis, the allowance for loan losses as a percentage of total loans
was 1.40% at September 30, 2022, and the allowance for loan losses
as a percentage of non-performing loans, or coverage ratio, was
193.2% at September 30, 2022. See Table 1 at the end of this press
release for a reconciliation of the adjusted allowance for loan
losses to total loans and coverage ratio to the related GAAP
ratios.
- Personnel: The Bank has had a headcount freeze
in place through the end of the third quarter, with an attrition
program further managing headcount going forward. A total 10%
reduction in retail staff is also targeted from current levels
through the end of 2023.
- Capital Adequacy: As of September 30, 2022,
the Bancorp’s tier 1 capital to adjusted average assets ratio
totaled 8.1%, and under all regulatory capital requirements,
continues to be considered well capitalized. Tangible book value
per share was $20.99 at September 30, 2022, down from $25.24 as of
June 30, 2022 (a non-GAAP measure). The decrease is due to
continued accumulated other comprehensive losses from unrealized
losses on the securities portfolio as noted above. Excluding
accumulated other comprehensive losses, tangible book value per
share increased to $39.57 as of September 30, 2022, from $38.69 as
of June 30, 2022 (a non-GAAP measure). Tangible capital represented
4.5% of tangible assets at September 30, 2022 (a non-GAAP measure).
Tangible capital, excluding accumulated other comprehensive losses,
was 8.4% at September 30, 2022 (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
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.
“During the quarter, we continued to improve our core net income
and managed our net interest margin to new highs on the year, while
making progress in rebalancing our earning assets. Changes in
consumer demand for fixed-rate mortgages has slowed our ability to
generate gains from the sales of loans; however, we continue to
grow our residential real estate loan portfolio. Cashflows from our
securities portfolio, along with securities sales in a volatile
market and growth in core deposits, have supported strong
commercial loan growth with commercial real estate loans increasing
by 8.4% year-to-date. We are actively managing our expense base to
achieve greater economies of scale and continue to perform at
levels that accrete capital and allow for the ongoing investments
in the digital transformation process for Peoples Bank and Finward
Bancorp,” said Benjamin Bochnowski, president and chief executive
officer. “With economic conditions in mind, we are focused on
running the bank efficiently, managing credit and underwriting, and
continuing to rebalance our securities portfolio in order to recoup
unrealized losses back into tangible book value.”
Net Interest Income
Year-to-Date |
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands) |
Average Balances, Interest, and Rates |
(unaudited) |
September 30, 2022 |
|
September 30, 2021 |
|
Average
Balance |
|
Interest |
|
Rate (%) |
|
Average
Balance |
|
Interest |
|
Rate (%) |
ASSETS |
|
|
` |
|
|
|
|
|
|
|
|
Interest bearing deposits in other financial institutions |
$ |
24,268 |
|
|
$ |
163 |
|
0.90 |
|
$ |
53,774 |
|
|
$ |
33 |
|
0.08 |
Federal funds sold |
|
3,561 |
|
|
|
8 |
|
0.30 |
|
|
1,064 |
|
|
|
- |
|
- |
Certificates of deposit in other financial institutions |
|
1,750 |
|
|
|
15 |
|
1.14 |
|
|
1,443 |
|
|
|
21 |
|
1.94 |
Securities available-for-sale |
|
447,319 |
|
|
|
7,295 |
|
2.17 |
|
|
435,119 |
|
|
|
6,428 |
|
1.97 |
Loans receivable* |
|
1,406,591 |
|
|
|
44,629 |
|
4.23 |
|
|
970,740 |
|
|
|
31,291 |
|
4.30 |
Federal Home Loan Bank stock |
|
3,364 |
|
|
|
63 |
|
2.50 |
|
|
3,535 |
|
|
|
55 |
|
2.07 |
Total interest earning assets |
|
1,886,853 |
|
|
$ |
52,173 |
|
3.69 |
|
|
1,465,675 |
|
|
$ |
37,828 |
|
3.44 |
Cash and non-interest bearing deposits in other financial
institutions |
|
21,279 |
|
|
|
|
|
|
|
37,186 |
|
|
|
|
|
Allowance for loan losses |
|
(13,418 |
) |
|
|
|
|
|
|
(13,205 |
) |
|
|
|
|
Other noninterest bearing assets |
|
142,254 |
|
|
|
|
|
|
|
97,674 |
|
|
|
|
|
Total assets |
$ |
2,036,968 |
|
|
|
|
|
|
$ |
1,587,330 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
Total deposits |
$ |
1,833,712 |
|
|
$ |
1,597 |
|
0.12 |
|
$ |
1,395,883 |
|
|
$ |
1,652 |
|
0.16 |
Repurchase agreements |
|
20,935 |
|
|
|
93 |
|
0.59 |
|
|
17,458 |
|
|
|
35 |
|
0.27 |
Borrowed funds |
|
11,175 |
|
|
|
143 |
|
1.71 |
|
|
992 |
|
|
|
23 |
|
3.09 |
Total interest bearing liabilities |
|
1,865,822 |
|
|
$ |
1,833 |
|
0.13 |
|
|
1,414,333 |
|
|
$ |
1,710 |
|
0.16 |
Other noninterest bearing liabilities |
|
22,510 |
|
|
|
|
|
|
|
17,052 |
|
|
|
|
|
Total liabilities |
|
1,888,332 |
|
|
|
|
|
|
|
1,431,385 |
|
|
|
|
|
Total stockholders' equity |
|
148,636 |
|
|
|
|
|
|
|
155,945 |
|
|
|
|
|
Total liabilities and stockholders' equity |
$ |
2,036,968 |
|
|
|
|
|
|
$ |
1,587,330 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income was $50.3 million for the nine months ended
September 30, 2022, an increase of $14.2 million (39.4%), compared
to $36.1 million for the nine months ended September 30, 2021. The
Bancorp’s net interest margin on a tax-adjusted basis was 3.75% for
the nine months ended September 30, 2022, compared to 3.49% for the
nine months ended September 30, 2021.
(Dollars in thousands) |
Average Balances, Interest, and Rates |
(unaudited) |
September 30, 2022 |
|
September 30, 2021 |
|
Average
Balance |
|
Interest |
|
Rate (%) |
|
Average
Balance |
|
Interest |
|
Rate (%) |
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
Interest bearing deposits in other financial institutions |
$ |
24,732 |
|
|
$ |
110 |
|
1.78 |
|
$ |
53,786 |
|
|
$ |
12 |
|
0.09 |
Federal funds sold |
|
1,579 |
|
|
|
6 |
|
1.52 |
|
|
1,112 |
|
|
|
- |
|
- |
Certificates of deposit in other financial institutions |
|
1,899 |
|
|
|
9 |
|
1.90 |
|
|
1,262 |
|
|
|
6 |
|
1.90 |
Securities available-for-sale |
|
394,796 |
|
|
|
2,271 |
|
2.30 |
|
|
486,993 |
|
|
|
2,363 |
|
1.94 |
Loans receivable* |
|
1,484,678 |
|
|
|
16,122 |
|
4.34 |
|
|
960,274 |
|
|
|
10,270 |
|
4.28 |
Federal Home Loan Bank stock |
|
3,038 |
|
|
|
21 |
|
2.76 |
|
|
3,247 |
|
|
|
15 |
|
1.85 |
Total interest earning assets |
|
1,910,722 |
|
|
$ |
18,539 |
|
3.88 |
|
|
1,506,674 |
|
|
$ |
12,666 |
|
3.36 |
Cash and non-interest bearing deposits in other financial
institutions |
|
21,954 |
|
|
|
|
|
|
|
41,378 |
|
|
|
|
|
Allowance for loan losses |
|
(13,487 |
) |
|
|
|
|
|
|
(13,688 |
) |
|
|
|
|
Other noninterest bearing assets |
|
149,950 |
|
|
|
|
|
|
|
97,290 |
|
|
|
|
|
Total assets |
$ |
2,069,139 |
|
|
|
|
|
|
$ |
1,631,654 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
Total deposits |
$ |
1,873,962 |
|
|
$ |
871 |
|
0.19 |
|
$ |
1,436,125 |
|
|
$ |
452 |
|
0.13 |
Repurchase agreements |
|
20,781 |
|
|
|
51 |
|
0.98 |
|
|
20,970 |
|
|
|
13 |
|
0.25 |
Borrowed funds |
|
17,456 |
|
|
|
110 |
|
2.52 |
|
|
41 |
|
|
|
1 |
|
9.76 |
Total interest bearing liabilities |
|
1,912,199 |
|
|
$ |
1,032 |
|
0.22 |
|
|
1,457,136 |
|
|
$ |
466 |
|
0.13 |
Other noninterest bearing liabilities |
|
23,458 |
|
|
|
|
|
|
|
15,508 |
|
|
|
|
|
Total liabilities |
|
1,935,657 |
|
|
|
|
|
|
|
1,472,644 |
|
|
|
|
|
Total stockholders' equity |
|
133,482 |
|
|
|
|
|
|
|
159,010 |
|
|
|
|
|
Total liabilities and stockholders' equity |
$ |
2,069,139 |
|
|
|
|
|
|
$ |
1,631,654 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income was $17.5 million for the quarter ended
September 30, 2022, an increase of $5.4 million (43.5%), compared
to $12.2 million for the quarter ended September 30, 2021. The
Bancorp’s net interest margin was 3.67% for the quarter ended
September 30, 2022, compared to 3.24% for the quarter ended
September 30, 2021. The Bancorp’s net interest margin on a
tax-adjusted basis was 3.84% for the quarter ended September 30,
2022, compared to 3.46% for the quarter ended September 30, 2021.
The increased net interest income and net interest margin for the
quarter and the nine months was primarily the result of the
increased earning assets acquired through the Royal acquisition,
the reallocation of securities cashflows into organic loan growth,
and managing interest expense.
Noninterest Income
(Dollars in thousands) |
|
Nine Months Ended September 30, |
|
|
9/30/2022 vs. 9/30/2021 |
(Unaudited) |
|
|
2022 |
|
|
|
2021 |
|
|
|
$ Change |
|
% Change |
Noninterest income: |
|
|
|
|
|
|
|
|
|
Fees and service charges |
|
|
4,434 |
|
|
|
4,010 |
|
|
|
424 |
|
|
10.6 |
% |
Wealth management operations |
|
|
1,590 |
|
|
|
1,787 |
|
|
|
(197 |
) |
|
-11.0 |
% |
Gain on sale of loans held-for-sale, net |
|
|
1,242 |
|
|
|
4,394 |
|
|
|
(3,152 |
) |
|
-71.7 |
% |
Gain on sale of securities, net |
|
|
662 |
|
|
|
1,276 |
|
|
|
(614 |
) |
|
-48.1 |
% |
Increase in cash value of bank owned life insurance |
|
|
628 |
|
|
|
537 |
|
|
|
91 |
|
|
16.9 |
% |
Gain on sale of foreclosed real estate |
|
|
- |
|
|
|
27 |
|
|
|
(27 |
) |
|
-100.0 |
% |
Other |
|
|
114 |
|
|
|
108 |
|
|
|
6 |
|
|
5.6 |
% |
|
|
|
|
|
|
|
|
|
|
Total noninterest income |
|
|
8,670 |
|
|
|
12,139 |
|
|
|
(3,469 |
) |
|
-28.6 |
% |
(Dollars in thousands) |
|
Quarter Ended September 30, |
|
9/30/2022 vs. 9/30/2021 |
(Unaudited) |
|
|
2022 |
|
|
|
2021 |
|
|
$ Change |
|
% Change |
Noninterest income: |
|
|
|
|
|
|
|
|
Fees and service charges |
|
|
1,570 |
|
|
|
1,473 |
|
|
97 |
|
|
6.6 |
% |
Wealth management operations |
|
|
407 |
|
|
|
604 |
|
|
(197 |
) |
|
-32.6 |
% |
Gain on sale of loans held-for-sale, net |
|
|
344 |
|
|
|
1,229 |
|
|
(885 |
) |
|
-72.0 |
% |
Gain on sale of securities, net |
|
|
23 |
|
|
|
590 |
|
|
(567 |
) |
|
-96.1 |
% |
Increase in cash value of bank owned life insurance |
|
|
183 |
|
|
|
180 |
|
|
3 |
|
|
1.7 |
% |
Gain on sale of foreclosed real estate |
|
|
- |
|
|
|
- |
|
|
- |
|
|
0.0 |
% |
Other |
|
|
103 |
|
|
|
70 |
|
|
33 |
|
|
47.1 |
% |
|
|
|
|
|
|
|
|
|
Total noninterest income |
|
|
2,630 |
|
|
|
4,146 |
|
|
(1,516 |
) |
|
-36.6 |
% |
|
|
|
|
|
|
|
|
|
The increase in fees and service charges, for the quarter and
the year-to-date periods, is primarily the result of the
acquisition of Royal and the resultant increase in our customer
base. The decrease in wealth management operations, for the quarter
and the year-to-date periods, is result of lower fee income year
over year due to market conditions. The decrease in gain on sale of
loans, for the quarter and the year-to-date periods, is the result
of significant refinance activity which started in 2020 and
continued into 2021 due to the economic and low-rate environment,
which resulted in more loans originated and sold. We expect demand
for fixed rate mortgage loans held-for-sale in the secondary market
to be lower as borrowing rates on loans increase. The decrease in
gains on the sale of securities, for the quarter and the
year-to-date periods, is a result of current market conditions and
actively repositioning the portfolio.
Noninterest Expense
(Dollars in thousands) |
|
Nine Months Ended September 30, |
|
9/30/2022 vs. 9/30/2021 |
(Unaudited) |
|
|
2022 |
|
|
|
2021 |
|
|
$ Change |
|
% Change |
Noninterest expense: |
|
|
|
|
|
|
|
|
Compensation and benefits |
|
|
22,403 |
|
|
|
17,624 |
|
|
4,779 |
|
|
27.1 |
% |
Data processing |
|
|
5,512 |
|
|
|
1,997 |
|
|
3,515 |
|
|
176.0 |
% |
Occupancy and equipment |
|
|
5,033 |
|
|
|
4,076 |
|
|
957 |
|
|
23.5 |
% |
Marketing |
|
|
1,623 |
|
|
|
728 |
|
|
895 |
|
|
122.9 |
% |
Federal deposit insurance premiums |
|
|
949 |
|
|
|
620 |
|
|
329 |
|
|
53.1 |
% |
Net loss recognized on sale of premises and equipment |
|
|
254 |
|
|
|
- |
|
|
254 |
|
|
0.0 |
% |
Other |
|
|
10,681 |
|
|
|
8,859 |
|
|
1,822 |
|
|
20.6 |
% |
|
|
|
|
|
|
|
|
|
Total noninterest expense |
|
|
46,455 |
|
|
|
33,904 |
|
|
12,551 |
|
|
37.0 |
% |
(Dollars in thousands) |
|
Quarter Ended September 30, |
|
9/30/2022 vs. 9/30/2021 |
(Unaudited) |
|
|
2022 |
|
|
|
2021 |
|
|
$ Change |
|
% Change |
Noninterest expense: |
|
|
|
|
|
|
|
|
Compensation and benefits |
|
|
7,498 |
|
|
|
6,042 |
|
|
1,456 |
|
|
24.1 |
% |
Data processing |
|
|
1,212 |
|
|
|
872 |
|
|
340 |
|
|
39.0 |
% |
Occupancy and equipment |
|
|
1,804 |
|
|
|
1,380 |
|
|
424 |
|
|
30.7 |
% |
Marketing |
|
|
587 |
|
|
|
334 |
|
|
253 |
|
|
75.7 |
% |
Federal deposit insurance premiums |
|
|
350 |
|
|
|
236 |
|
|
114 |
|
|
48.3 |
% |
Net loss recognized on sale of premises and equipment |
|
|
254 |
|
|
|
- |
|
|
254 |
|
|
0.0 |
% |
Other |
|
|
3,305 |
|
|
|
3,537 |
|
|
(232 |
) |
|
-6.6 |
% |
|
|
|
|
|
|
|
|
|
Total noninterest expense |
|
|
15,010 |
|
|
|
12,401 |
|
|
2,609 |
|
|
21.0 |
% |
|
|
|
|
|
|
|
|
|
The increase in compensation and benefits, for the quarter and
year-to-date periods, is primarily the result of the Royal
acquisition, management’s continued focus on talent management, and
wage inflation. The increase in occupancy and equipment expense,
for the quarter and the year-to-date periods, is primarily related
to the Royal acquisition and higher operating costs. Marketing
expenses, for the quarter and the year-to-date periods, have
increased to enhance brand recognition in new markets and gain more
wallet share. The increase in federal deposit insurance premiums,
for the quarter and the year-to-date periods, is primarily the
result of growth of the bank’s average assets. The increase in data
processing expense for the nine-month period ending September 30,
2022, is primarily the result of data conversion expenses related
to the acquisition of Royal, increased system utilization due to
growth of the Bank, and continued investment in technological
advancements such as Salesforce and nCino. The increase in data
processing expense for the quarter ending September 30, 2022, is
due to increased system utilization due to growth of the Bank, and
continued investment in technological advancements such as
Salesforce and nCino. The increase in net loss recognized on sale
of premises and equipment, for the quarter and year-to-date
periods, is the result of the sale of a branch to reduce future
fixed costs, allowing for redeployment of a portion of occupancy
expenses into building a digital-forward foundation so that Finward
can better serve its customers. The increase in other operating
expenses for the nine-month period ending September 30, 2022, is
primarily the result of one-time expenses related to the
acquisition of Royal, continued investments in strategic
initiatives focusing on growth of the organization, and
inflationary pressures. The decrease in other operating expenses
for the quarter ending September 30, 2022, is primarily due to
lower utilization of outside consultants related to bank
initiatives during the quarter.
Income Tax Expense
The provision for income taxes was $1.4 million for the nine months
ended September 30, 2022, as compared to $1.4 million for the nine
months ended September 30, 2021. The effective tax rate was 11.4%
for the nine months ended September 30, 2022, as compared to 10.8%
for the nine months ended September 30, 2021. The provision for
income taxes was $571 thousand for the quarter ended September 30,
2022, as compared to $268 thousand for the quarter ended September
30, 2021. The effective tax rate was 11.1% for the quarter ended
September 30, 2022, as compared to 7.0% for the quarter ended
September 30, 2021. The Bancorp’s higher current effective tax
rate, for the quarter and year-to-date periods, is a result of
higher earnings relative to tax preferred income.
Lending
The Bancorp’s loan portfolio totaled $1.5 billion on September 30,
2022, compared to $966.7 million on December 31, 2021, an increase
of $536.0 million or 55.4%. The increase is primarily the result of
the Royal acquisition, as well as organic loan portfolio growth.
During the first nine months of 2022 the Bancorp originated $296.8
million in new commercial loans, compared to $258.1 million during
the nine months ended September 30, 2021. During the nine months
ended September 30, 2022, the Bancorp originated $40.8 million in
new fixed rate mortgage loans for sale, compared to $120.1 million
during the nine months ended September 30, 2021. During the nine
months ended September 30, 2022, the Bancorp originated $78.8
million in new mortgage loans retained in its portfolio, compared
to $34.7 million during the nine months ended September 30, 2021.
The loan portfolio represents 79.9% of earning assets and is
comprised of 62.6% commercial related credits.
Asset Quality
At September 30, 2022, non-performing loans totaled $10.9 million,
compared to $7.3 million at December 31, 2021, an increase of $3.7
million or 50.5%. The Bancorp’s ratio of non-performing loans to
total loans was 0.73% at September 30, 2022, compared to 0.76% at
December 31, 2021. The Bancorp’s ratio of non-performing assets to
total assets was 0.58% at September 30, 2022, compared to 0.51% at
December 31, 2021.
For the nine months ended September 30, 2022, no provisions to
the ALL were required, compared to $1.2 million for the nine months
ended September 30, 2021, a decrease of $1.2 million. For the
quarter ended September 30, 2022, no provisions to the ALL were
required, compared to $139 thousand for the quarter ended September
30, 2021, a decrease of $139 thousand. For the nine months ended
September 30, 2022, recoveries, net of charge-offs, totaled $56
thousand. For the quarter ended September 30, 2022, charge-offs,
net of recoveries, totaled $7 thousand. At September 30, 2022, the
allowance for loan losses totaled $13.4 million and is considered
adequate by management. The allowance for loan losses as a
percentage of total loans was 0.89% at September 30, 2022, compared
to 1.38% at December 31, 2021. The allowance for loan losses as a
percentage of non-performing loans, or coverage ratio, was 122.6%
at September 30, 2022, compared to 183.8% at December 31, 2021.
Management also considers reserves that are not part of the ALL
that have been established from acquisition activity. The Bancorp
acquired loans for which there was evidence of credit quality
deterioration since origination, and it was determined that it was
probable that the Bancorp would be unable to collect all
contractually required principal and interest payments.
Additionally, the Bancorp has acquired loans where there was no
evidence of credit quality deterioration since origination and has
marked these loans to their fair values. When these additional
reserves are included on a non-GAAP basis, the allowance for loan
losses as a percentage of total loans was 1.40% at September 30,
2022, and the allowance for loan losses as a percentage of
non-performing loans, or coverage ratio, was 193.2% at September
30, 2022. See Table 1 below for a reconciliation of these non-GAAP
figures to the Bancorp’s GAAP figures.
Investing
The Bancorp’s securities portfolio totaled $359.0 million at
September 30, 2022, compared to $526.9 million at December 31,
2021, a decrease of $167.9 million or 31.9%. The decrease is
attributable to increased unrealized losses within the portfolio
and the use of cashflows from the securities portfolio to fund loan
growth. The securities portfolio represents 19.1% of earning assets
and provides a consistent source of liquidity and earnings to the
Bancorp. Cash and cash equivalents totaled $38.3 million on
September 30, 2022, compared to $33.2 million on December 31, 2021,
an increase of $5.1 million or 15.4%. The increase in cash and cash
equivalents is primarily the result of the timing of investments in
interest earning assets relative to the inflow and outflow of
deposits and repurchase agreements.
Funding
On September 30, 2022, core deposits totaled $1.5 billion, compared
to $1.2 billion on December 31, 2021, an increase of $310.3 million
or 26.0%. The increase is the result of the Royal acquisition,
which added $279.9 million of core deposits at the time of
acquisition, as well as the Bancorp’s efforts to maintain and grow
core deposits. Core deposits include checking, savings, and money
market accounts and represented 82.1% of the Bancorp’s total
deposits at September 30, 2022. During the first nine months of
2022, balances for checking, savings, and money market accounts
increased. The increase in these core deposits is a result of the
Royal acquisition, as well as management’s sales efforts along with
customer preferences for competitively priced short-term liquid
investments. On September 30, 2022, balances for certificates of
deposit totaled $327.7 million, compared to $239.2 million on
December 31, 2021, an increase of $88.4 million or 37.0%. The
increase related to certificate of deposits is related to the Royal
acquisition, which added $195.2 million of certificates at the time
of acquisition. In addition, on September 30, 2022, borrowings and
repurchase agreements totaled $78.1 million, compared to $14.6
million at December 31, 2021, an increase of $63.6 million or
435.9%. The increase in short-term borrowings was the result of
cyclical inflows and outflows of interest-earning assets and
interest-bearing liabilities.
Capital Adequacy
At September 30, 2022, shareholders’ equity stood at $118.0
million, a decrease of $38.6 million, or 24.6% from December 31,
2021. This decrease is the result of net unrealized losses in the
securities portfolio which resulted in an accumulated comprehensive
loss of $79.8 million at September 30, 2022. The Bank’s regulatory
capital ratios at September 30, 2022, were 12.8% for total capital
to risk-weighted assets, 11.8% for both common equity tier 1
capital to risk-weighted assets and tier 1 capital to risk-weighted
assets, and 8.1% for tier 1 capital to adjusted average assets.
Under all regulatory capital requirements, the Bank is considered
well capitalized. Tangible capital represented 4.5% of tangible
assets at September 30, 2022.The tangible book value of the
Bancorp’s stock stood at $20.99 per share at September 30, 2022,
compared to $40.91 at December 31, 2021. This is primarily the
result of increased net unrealized loss on securities
available-for-sale, net of reclassification and tax effects.
Management continues to actively manage the securities portfolio
and does not currently anticipate the need to realize losses from
the securities portfolio that would result in reductions to
retained earnings.
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 core net income, core diluted earnings per share, core return on
equity, core return on assets, core pre-provision net revenue, core
pre-provision net revenue/average assets, tangible assets
(excluding PPP), tangible common equity, tangible common
equity/tangible assets (excluding PPP), average tangible common
equity, core yield on loans, core noninterest expense, core
noninterest expense/average assets, core efficiency ratio, core
earnings, adjusted allowance for loan loss to total loans, adjusted
allowance for loan loss to nonperforming loans, adjusted allowance
for loan loss to total loans (excluding PPP), core revenue,
adjusted net interest margin, and reported net income excluding
non-core operations, 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 29 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 Finward’s and Royal’s businesses or fully realizing
cost savings and other benefits; business disruption following the
merger; any continuing risks and uncertainties for our business,
results of operations, and financial condition relating to the
COVID-19 pandemic; 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 Finward’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
Finward or any person acting on its behalf are expressly qualified
in their entirety by the cautionary statements above. Except as
required by law, Finward 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, |
|
|
2022 |
|
2022 |
|
2022 |
|
2021 |
|
2021 |
|
|
2022 |
|
2021 |
Return on equity |
|
|
13.65 |
% |
|
|
12.45 |
% |
|
|
5.01 |
% |
|
|
8.56 |
% |
|
|
8.90 |
% |
|
|
|
9.98 |
% |
|
|
9.96 |
% |
Return on
assets |
|
|
0.88 |
% |
|
|
0.85 |
% |
|
|
0.44 |
% |
|
|
0.83 |
% |
|
|
0.87 |
% |
|
|
|
0.73 |
% |
|
|
0.98 |
% |
Yield on
loans |
|
|
4.34 |
% |
|
|
4.18 |
% |
|
|
4.17 |
% |
|
|
4.28 |
% |
|
|
4.28 |
% |
|
|
|
4.23 |
% |
|
|
4.30 |
% |
Yield on
security investments |
|
|
2.30 |
% |
|
|
2.23 |
% |
|
|
2.02 |
% |
|
|
1.94 |
% |
|
|
1.94 |
% |
|
|
|
2.17 |
% |
|
|
1.97 |
% |
Total yield
on earning assets |
|
|
3.88 |
% |
|
|
3.68 |
% |
|
|
3.49 |
% |
|
|
3.42 |
% |
|
|
3.36 |
% |
|
|
|
3.69 |
% |
|
|
3.44 |
% |
Cost of
deposits |
|
|
0.19 |
% |
|
|
0.08 |
% |
|
|
0.08 |
% |
|
|
0.10 |
% |
|
|
0.13 |
% |
|
|
|
0.12 |
% |
|
|
0.16 |
% |
Cost of
repurchase agreements |
|
|
0.98 |
% |
|
|
0.46 |
% |
|
|
0.33 |
% |
|
|
0.26 |
% |
|
|
0.25 |
% |
|
|
|
0.59 |
% |
|
|
0.27 |
% |
Cost of
borrowed funds |
|
|
2.52 |
% |
|
|
1.10 |
% |
|
|
0.39 |
% |
|
|
0.47 |
% |
|
|
9.76 |
% |
|
|
|
1.71 |
% |
|
|
3.09 |
% |
Total cost
of funds |
|
|
0.22 |
% |
|
|
0.09 |
% |
|
|
0.08 |
% |
|
|
0.10 |
% |
|
|
0.13 |
% |
|
|
|
0.13 |
% |
|
|
0.16 |
% |
Noninterest
income / average assets |
|
|
0.51 |
% |
|
|
0.56 |
% |
|
|
0.64 |
% |
|
|
0.95 |
% |
|
|
1.02 |
% |
|
|
|
0.57 |
% |
|
|
1.02 |
% |
Noninterest
expense / average assets |
|
|
2.90 |
% |
|
|
2.91 |
% |
|
|
3.33 |
% |
|
|
3.18 |
% |
|
|
3.04 |
% |
|
|
|
3.04 |
% |
|
|
2.85 |
% |
Net
noninterest margin / average assets |
|
|
-2.39 |
% |
|
|
-2.36 |
% |
|
|
-2.68 |
% |
|
|
-2.23 |
% |
|
|
-2.02 |
% |
|
|
|
-2.47 |
% |
|
|
-1.83 |
% |
Efficiency
ratio |
|
|
74.54 |
% |
|
|
75.15 |
% |
|
|
87.10 |
% |
|
|
78.28 |
% |
|
|
75.87 |
% |
|
|
|
78.72 |
% |
|
|
70.26 |
% |
Effective
tax rate |
|
|
11.14 |
% |
|
|
11.70 |
% |
|
|
11.41 |
% |
|
|
0.18 |
% |
|
|
7.04 |
% |
|
|
|
11.41 |
% |
|
|
10.78 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-performing assets to total assets |
|
|
0.58 |
% |
|
|
0.53 |
% |
|
|
0.47 |
% |
|
|
0.51 |
% |
|
|
0.91 |
% |
|
|
|
0.58 |
% |
|
|
0.91 |
% |
Non-performing loans to total loans |
|
|
0.73 |
% |
|
|
0.68 |
% |
|
|
0.62 |
% |
|
|
0.76 |
% |
|
|
1.42 |
% |
|
|
|
0.73 |
% |
|
|
1.42 |
% |
Allowance
for loan losses to non-performing loans |
|
|
122.64 |
% |
|
|
133.78 |
% |
|
|
150.28 |
% |
|
|
183.76 |
% |
|
|
101.71 |
% |
|
|
|
122.64 |
% |
|
|
101.71 |
% |
Allowance
for loan losses to loans outstanding |
|
|
0.89 |
% |
|
|
0.91 |
% |
|
|
0.93 |
% |
|
|
1.38 |
% |
|
|
1.44 |
% |
|
|
|
0.89 |
% |
|
|
1.44 |
% |
Foreclosed
real estate to total assets |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.01 |
% |
|
|
|
0.00 |
% |
|
|
0.01 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
earnings per share |
|
$ |
1.07 |
|
|
$ |
1.04 |
|
|
$ |
0.53 |
|
|
$ |
0.95 |
|
|
$ |
1.02 |
|
|
|
$ |
2.68 |
|
|
$ |
3.35 |
|
Diluted
earnings per share |
|
$ |
1.07 |
|
|
$ |
1.04 |
|
|
$ |
0.53 |
|
|
$ |
0.95 |
|
|
$ |
1.02 |
|
|
|
$ |
2.67 |
|
|
$ |
3.35 |
|
Net worth /
total assets |
|
|
5.75 |
% |
|
|
6.50 |
% |
|
|
7.51 |
% |
|
|
9.66 |
% |
|
|
9.48 |
% |
|
|
|
5.75 |
% |
|
|
9.48 |
% |
Book value
per share |
|
$ |
27.46 |
|
|
$ |
31.80 |
|
|
$ |
36.71 |
|
|
$ |
45.00 |
|
|
$ |
43.85 |
|
|
|
$ |
27.46 |
|
|
$ |
43.85 |
|
Closing
stock price |
|
$ |
34.01 |
|
|
$ |
37.49 |
|
|
$ |
46.21 |
|
|
$ |
45.88 |
|
|
$ |
41.05 |
|
|
|
$ |
34.01 |
|
|
$ |
41.05 |
|
Price per
earnings per share |
|
$ |
7.92 |
|
|
$ |
8.97 |
|
|
$ |
21.76 |
|
|
$ |
12.07 |
|
|
$ |
10.06 |
|
|
|
$ |
4.23 |
|
|
$ |
4.08 |
|
Dividend
declared per common share |
|
$ |
0.31 |
|
|
$ |
0.31 |
|
|
$ |
0.31 |
|
|
$ |
0.31 |
|
|
$ |
0.31 |
|
|
|
$ |
0.93 |
|
|
$ |
0.93 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, |
|
|
2022 |
|
2022 |
|
2022 |
|
2021 |
|
2021 |
|
|
2022 |
|
2021 |
Core return
on equity |
|
|
17.75 |
% |
|
|
13.78 |
% |
|
|
11.32 |
% |
|
|
7.83 |
% |
|
|
8.46 |
% |
|
|
|
13.96 |
% |
|
|
9.96 |
% |
Core return
on assets |
|
|
0.90 |
% |
|
|
0.75 |
% |
|
|
0.83 |
% |
|
|
0.71 |
% |
|
|
0.75 |
% |
|
|
|
0.83 |
% |
|
|
0.89 |
% |
Core
noninterest expense / average assets |
|
|
2.78 |
% |
|
|
2.83 |
% |
|
|
2.67 |
% |
|
|
3.12 |
% |
|
|
2.98 |
% |
|
|
|
2.76 |
% |
|
|
2.81 |
% |
Core
efficiency ratio |
|
|
73.10 |
% |
|
|
77.12 |
% |
|
|
72.87 |
% |
|
|
81.01 |
% |
|
|
78.48 |
% |
|
|
|
74.39 |
% |
|
|
72.49 |
% |
Net interest
margin - tax equivalent |
|
|
3.84 |
% |
|
|
3.78 |
% |
|
|
3.63 |
% |
|
|
3.58 |
% |
|
|
3.46 |
% |
|
|
|
3.75 |
% |
|
|
3.49 |
% |
Tangible
book value per diluted share |
|
$ |
20.99 |
|
|
$ |
25.24 |
|
|
$ |
30.01 |
|
|
$ |
40.91 |
|
|
$ |
39.69 |
|
|
|
$ |
20.99 |
|
|
$ |
39.69 |
|
Tangible book value per diluted share adjusted for AOCI |
$ |
39.57 |
|
|
$ |
38.69 |
|
|
$ |
37.80 |
|
|
$ |
39.68 |
|
|
$ |
38.94 |
|
|
|
$ |
39.57 |
|
|
$ |
38.94 |
|
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, |
|
|
|
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
Total assets |
|
$ |
2,052,986 |
|
|
$ |
2,101,485 |
|
|
$ |
2,097,845 |
|
|
$ |
1,620,743 |
|
|
$ |
1,609,924 |
|
Cash & cash equivalents |
|
|
38,296 |
|
|
|
79,302 |
|
|
|
54,501 |
|
|
|
33,176 |
|
|
|
31,765 |
|
Certificates of deposit in other financial institutions |
|
|
2,214 |
|
|
|
1,482 |
|
|
|
1,731 |
|
|
|
1,709 |
|
|
|
977 |
|
Securities - available for sale |
|
|
359,035 |
|
|
|
400,466 |
|
|
|
464,320 |
|
|
|
526,889 |
|
|
|
531,010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans receivable: |
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate |
|
$ |
452,852 |
|
|
$ |
420,735 |
|
|
$ |
408,375 |
|
|
$ |
317,145 |
|
|
$ |
309,905 |
|
|
Residential real estate |
|
|
471,565 |
|
|
|
459,151 |
|
|
|
444,753 |
|
|
|
260,134 |
|
|
|
268,798 |
|
|
Commercial business |
|
|
95,372 |
|
|
|
103,649 |
|
|
|
112,396 |
|
|
|
115,772 |
|
|
|
125,922 |
|
|
Construction and land development |
|
|
134,301 |
|
|
|
153,422 |
|
|
|
150,810 |
|
|
|
123,822 |
|
|
|
110,289 |
|
|
Multifamily |
|
|
258,377 |
|
|
|
248,495 |
|
|
|
234,267 |
|
|
|
61,194 |
|
|
|
56,869 |
|
|
Home equity |
|
|
37,578 |
|
|
|
35,672 |
|
|
|
34,284 |
|
|
|
34,612 |
|
|
|
35,652 |
|
|
Manufactured homes |
|
|
35,866 |
|
|
|
37,693 |
|
|
|
38,636 |
|
|
|
37,887 |
|
|
|
32,857 |
|
|
Government |
|
|
9,649 |
|
|
|
8,081 |
|
|
|
8,176 |
|
|
|
8,991 |
|
|
|
9,841 |
|
|
Consumer |
|
|
827 |
|
|
|
1,673 |
|
|
|
924 |
|
|
|
582 |
|
|
|
650 |
|
|
Farmland |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
205 |
|
|
|
Total loans |
|
$ |
1,496,387 |
|
|
$ |
1,468,571 |
|
|
$ |
1,432,621 |
|
|
$ |
960,139 |
|
|
$ |
950,988 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
Core deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest bearing checking |
|
$ |
386,137 |
|
|
$ |
370,567 |
|
|
$ |
380,515 |
|
|
$ |
295,294 |
|
|
$ |
287,376 |
|
|
|
Interest bearing checking |
|
|
422,559 |
|
|
|
384,689 |
|
|
|
350,825 |
|
|
|
333,744 |
|
|
|
315,575 |
|
|
|
Savings |
|
|
427,505 |
|
|
|
436,203 |
|
|
|
425,634 |
|
|
|
293,976 |
|
|
|
284,681 |
|
|
|
Money market |
|
|
269,110 |
|
|
|
327,360 |
|
|
|
307,850 |
|
|
|
271,970 |
|
|
|
254,671 |
|
|
|
|
Total core deposits |
|
|
1,505,311 |
|
|
|
1,518,819 |
|
|
|
1,464,824 |
|
|
|
1,194,984 |
|
|
|
1,142,303 |
|
|
Certificates of deposit |
|
|
327,653 |
|
|
|
398,396 |
|
|
|
430,387 |
|
|
|
239,217 |
|
|
|
263,897 |
|
|
|
|
Total deposits |
|
$ |
1,832,964 |
|
|
$ |
1,917,215 |
|
|
$ |
1,895,211 |
|
|
$ |
1,434,201 |
|
|
$ |
1,406,200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings and repurchase agreements |
|
$ |
78,140 |
|
|
$ |
24,536 |
|
|
$ |
23,244 |
|
|
$ |
14,581 |
|
|
$ |
23,844 |
|
Stockholder's equity |
|
|
118,023 |
|
|
|
136,654 |
|
|
|
157,637 |
|
|
|
156,615 |
|
|
|
152,569 |
|
Finward Bancorp |
Quarterly Financial Report |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of Income |
|
Quarter ended, |
|
|
Nine months ended, |
(Dollars in thousands) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
|
(Unaudited) |
|
(Unaudited) |
|
|
September 30,
|
|
June 30, |
|
March 31, |
|
December 31,
|
|
September 30,
|
|
|
September 30, |
|
September 30, |
|
|
2022 |
|
2022 |
|
2022 |
|
2021 |
|
2021 |
|
|
2022 |
|
2021 |
Interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
$ |
16,122 |
|
$ |
15,221 |
|
$ |
13,286 |
|
$ |
10,282 |
|
$ |
10,270 |
|
|
$ |
44,629 |
|
$ |
31,291 |
Securities & short-term investments |
|
|
2,417 |
|
|
2,519 |
|
|
2,608 |
|
|
2,545 |
|
|
2,396 |
|
|
|
7,544 |
|
|
6,537 |
Total interest income |
|
|
18,539 |
|
|
17,740 |
|
|
15,894 |
|
|
12,827 |
|
|
12,666 |
|
|
|
52,173 |
|
|
37,828 |
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
871 |
|
|
389 |
|
|
337 |
|
|
350 |
|
|
452 |
|
|
|
1,597 |
|
|
1,652 |
Borrowings |
|
|
161 |
|
|
53 |
|
|
22 |
|
|
20 |
|
|
14 |
|
|
|
236 |
|
|
58 |
Total interest expense |
|
|
1,032 |
|
|
442 |
|
|
359 |
|
|
370 |
|
|
466 |
|
|
|
1,833 |
|
|
1,710 |
Net interest income |
|
|
17,507 |
|
|
17,298 |
|
|
15,535 |
|
|
12,457 |
|
|
12,200 |
|
|
|
50,340 |
|
|
36,118 |
Provision for loan losses |
|
|
- |
|
|
- |
|
|
- |
|
|
216 |
|
|
139 |
|
|
|
- |
|
|
1,293 |
Net interest income after provision for loan losses |
|
|
17,507 |
|
|
17,298 |
|
|
15,535 |
|
|
12,241 |
|
|
12,061 |
|
|
|
50,340 |
|
|
34,825 |
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees and service charges |
|
|
1,570 |
|
|
1,560 |
|
|
1,304 |
|
|
1,378 |
|
|
1,473 |
|
|
|
4,434 |
|
|
4,010 |
Wealth management operations |
|
|
407 |
|
|
588 |
|
|
595 |
|
|
588 |
|
|
604 |
|
|
|
1,590 |
|
|
1,787 |
Gain on sale of loans held-for-sale, net |
|
|
344 |
|
|
291 |
|
|
607 |
|
|
902 |
|
|
1,229 |
|
|
|
1,242 |
|
|
4,394 |
Gain on sale of securities, net |
|
|
23 |
|
|
258 |
|
|
381 |
|
|
711 |
|
|
590 |
|
|
|
662 |
|
|
1,276 |
Increase in cash value of bank owned life insurance |
|
|
183 |
|
|
193 |
|
|
252 |
|
|
178 |
|
|
180 |
|
|
|
628 |
|
|
537 |
Gain on sale of foreclosed real estate, net |
|
|
- |
|
|
- |
|
|
- |
|
|
20 |
|
|
- |
|
|
|
- |
|
|
27 |
Other |
|
|
103 |
|
|
6 |
|
|
5 |
|
|
31 |
|
|
70 |
|
|
|
114 |
|
|
108 |
Total noninterest income |
|
|
2,630 |
|
|
2,896 |
|
|
3,144 |
|
|
3,808 |
|
|
4,146 |
|
|
|
8,670 |
|
|
12,139 |
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits |
|
|
7,498 |
|
|
7,538 |
|
|
7,367 |
|
|
6,617 |
|
|
6,042 |
|
|
|
22,403 |
|
|
17,624 |
Data processing |
|
|
1,804 |
|
|
1,729 |
|
|
1,500 |
|
|
1,651 |
|
|
872 |
|
|
|
5,512 |
|
|
1,997 |
Occupancy and equipment |
|
|
1,212 |
|
|
1,246 |
|
|
3,054 |
|
|
1,461 |
|
|
1,380 |
|
|
|
5,033 |
|
|
4,076 |
Marketing |
|
|
587 |
|
|
385 |
|
|
651 |
|
|
357 |
|
|
334 |
|
|
|
1,623 |
|
|
728 |
Federal deposit insurance premiums |
|
|
350 |
|
|
380 |
|
|
219 |
|
|
241 |
|
|
236 |
|
|
|
949 |
|
|
620 |
Net loss recognized on sale of premises and equipment |
|
|
254 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
254 |
|
|
- |
Other |
|
|
3,305 |
|
|
3,898 |
|
|
3,478 |
|
|
2,405 |
|
|
3,537 |
|
|
|
10,681 |
|
|
8,859 |
Total noninterest expense |
|
|
15,010 |
|
|
15,176 |
|
|
16,269 |
|
|
12,732 |
|
|
12,401 |
|
|
|
46,455 |
|
|
33,904 |
Income before income taxes |
|
|
5,127 |
|
|
5,018 |
|
|
2,410 |
|
|
3,317 |
|
|
3,806 |
|
|
|
12,555 |
|
|
13,060 |
Income tax expenses |
|
|
571 |
|
|
587 |
|
|
275 |
|
|
6 |
|
|
268 |
|
|
|
1,433 |
|
|
1,408 |
Net income |
|
$ |
4,556 |
|
$ |
4,431 |
|
$ |
2,135 |
|
$ |
3,311 |
|
$ |
3,538 |
|
|
$ |
11,122 |
|
$ |
11,652 |
Finward Bancorp |
Quarterly Financial Report |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
|
|
(Unaudited) |
(Dollars in thousands) |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
|
|
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
Nonaccruing loans |
|
$ |
8,943 |
|
|
$ |
8,813 |
|
|
$ |
8,414 |
|
|
$ |
7,056 |
|
|
$ |
11,027 |
|
Accruing loans delinquent more than 90 days |
|
|
1,982 |
|
|
|
1,208 |
|
|
|
494 |
|
|
|
205 |
|
|
|
2,516 |
|
Securities in non-accrual |
|
|
1,027 |
|
|
|
1,030 |
|
|
|
972 |
|
|
|
992 |
|
|
|
1,011 |
|
Foreclosed real estate |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
81 |
|
|
Total nonperforming assets |
|
$ |
11,952 |
|
|
$ |
11,051 |
|
|
$ |
9,880 |
|
|
$ |
8,253 |
|
|
$ |
14,635 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses (ALL): |
|
|
|
|
|
|
|
|
|
|
|
ALL specific allowances for impaired loans |
|
$ |
749 |
|
|
$ |
731 |
|
|
$ |
716 |
|
|
$ |
684 |
|
|
$ |
1,904 |
|
|
ALL general allowances for loan portfolio |
|
|
12,649 |
|
|
|
12,675 |
|
|
|
12,671 |
|
|
|
12,659 |
|
|
|
11,870 |
|
|
|
Total ALL |
|
$ |
13,398 |
|
|
$ |
13,406 |
|
|
$ |
13,387 |
|
|
$ |
13,343 |
|
|
$ |
13,774 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Troubled Debt Restructurings: |
|
|
|
|
|
|
|
|
|
|
|
Nonaccruing troubled debt restructurings, non-compliant (1)
(2) |
$ |
452 |
|
|
$ |
308 |
|
|
$ |
300 |
|
|
$ |
1,122 |
|
|
$ |
1,126 |
|
|
Nonaccruing troubled debt restructurings, compliant (2) |
|
|
542 |
|
|
|
657 |
|
|
|
265 |
|
|
|
306 |
|
|
|
102 |
|
|
Accruing troubled debt restructurings |
|
|
3,480 |
|
|
|
1,484 |
|
|
|
1,379 |
|
|
|
1,421 |
|
|
|
1,427 |
|
|
|
Total troubled debt restructurings |
|
$ |
4,474 |
|
|
$ |
2,449 |
|
|
$ |
1,944 |
|
|
$ |
2,849 |
|
|
$ |
2,655 |
|
|
|
|
(1) "non-compliant" refers to not being within the guidelines
of the restructuring agreement |
|
|
|
(2) included in nonaccruing loan balances presented
above |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
Required |
|
|
|
|
|
|
|
|
|
|
|
|
2022 |
|
|
To Be Well |
|
|
|
|
|
|
|
|
|
|
|
Actual Ratio |
|
Capitalized |
|
|
|
|
|
|
Capital Adequacy Bank |
|
|
|
|
|
|
|
|
|
|
Common equity tier 1 capital to risk-weighted assets |
|
|
11.8% |
|
|
|
6.5% |
|
|
|
|
|
|
|
Tier 1 capital to risk-weighted assets |
|
|
11.8% |
|
|
|
8.0% |
|
|
|
|
|
|
|
Total capital to risk-weighted assets |
|
|
12.8% |
|
|
|
10.0% |
|
|
|
|
|
|
|
Tier 1 capital to adjusted average assets |
|
|
8.1% |
|
|
|
5.0% |
|
|
|
|
|
|
|
|
Table 1 - Reconciliation of the Non-GAAP Performance Measures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands) |
Quarter Ended |
|
Nine Months Ended |
|
(unaudited) |
September 30,
2022 |
|
June 30,
2022 |
|
March 31,
2022 |
|
December 31,
2021 |
|
September 31,
2021 |
|
September 30,
2022 |
|
September 30,
2021 |
|
Calculation of core net income |
|
Net income |
$ |
4,556 |
|
|
$ |
4,431 |
|
|
$ |
2,135 |
|
|
$ |
3,311 |
|
|
$ |
3,538 |
|
|
$ |
11,122 |
|
|
$ |
11,652 |
|
|
Realized loss/(gain) on securities |
|
(23 |
) |
|
|
(258 |
) |
|
|
(381 |
) |
|
|
(771 |
) |
|
|
(590 |
) |
|
|
(662 |
) |
|
|
(1,276 |
) |
|
Net loss recognized on sale of premises and equipment |
|
254 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
254 |
|
|
|
- |
|
|
Merger related expenses |
|
- |
|
|
|
- |
|
|
|
2,852 |
|
|
|
- |
|
|
|
- |
|
|
|
2,852 |
|
|
|
- |
|
|
CD premium amortization |
|
(134 |
) |
|
|
(175 |
) |
|
|
(129 |
) |
|
|
- |
|
|
|
- |
|
|
|
(438 |
) |
|
|
- |
|
|
Core deposit amortization |
|
400 |
|
|
|
410 |
|
|
|
347 |
|
|
|
249 |
|
|
|
249 |
|
|
|
1,157 |
|
|
|
497 |
|
|
Purchase discount amortization |
|
(342 |
) |
|
|
(613 |
) |
|
|
(234 |
) |
|
|
(144 |
) |
|
|
(271 |
) |
|
|
(1,189 |
) |
|
|
(626 |
) |
|
Related tax benefit/(cost) |
|
(33 |
) |
|
|
134 |
|
|
|
(516 |
) |
|
|
127 |
|
|
|
129 |
|
|
|
(415 |
) |
|
|
295 |
|
(A) |
Core net income |
$ |
4,678 |
|
|
$ |
3,929 |
|
|
$ |
4,074 |
|
|
$ |
2,772 |
|
|
$ |
3,055 |
|
|
$ |
12,681 |
|
|
$ |
10,542 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of core diluted earnings per
share |
(A) |
Core net income |
$ |
4,678 |
|
|
$ |
3,929 |
|
|
$ |
4,074 |
|
|
$ |
2,832 |
|
|
$ |
3,055 |
|
|
$ |
12,681 |
|
|
$ |
10,542 |
|
|
Diluted average common shares outstanding |
|
4,260,596 |
|
|
|
4,258,503 |
|
|
|
4,020,815 |
|
|
|
3,479,988 |
|
|
|
3,479,139 |
|
|
|
4,170,537 |
|
|
|
3,476,406 |
|
|
Core diluted earnings per share |
$ |
1.10 |
|
|
$ |
0.92 |
|
|
$ |
1.01 |
|
|
$ |
0.81 |
|
|
$ |
0.88 |
|
|
$ |
3.04 |
|
|
$ |
3.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of core return on average assets |
(A) |
Core net income |
$ |
4,678 |
|
|
$ |
3,929 |
|
|
$ |
4,074 |
|
|
$ |
2,832 |
|
|
$ |
3,055 |
|
|
$ |
12,681 |
|
|
$ |
10,542 |
|
|
Average total assets |
|
2,069,139 |
|
|
|
2,085,039 |
|
|
|
1,955,347 |
|
|
|
1,601,040 |
|
|
|
1,631,654 |
|
|
|
2,036,968 |
|
|
|
1,587,330 |
|
|
Core return on average assets |
|
0.90% |
|
|
|
0.75% |
|
|
|
0.83% |
|
|
|
0.71% |
|
|
|
0.75% |
|
|
|
0.83% |
|
|
|
0.89% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of core pre-provision net revenue |
|
Net interest income |
$ |
17,507 |
|
|
$ |
17,298 |
|
|
$ |
15,535 |
|
|
$ |
12,457 |
|
|
$ |
12,200 |
|
|
$ |
50,340 |
|
|
$ |
36,118 |
|
|
Non-interest income |
|
2,630 |
|
|
|
2,896 |
|
|
|
3,144 |
|
|
|
3,808 |
|
|
|
4,146 |
|
|
|
8,670 |
|
|
|
12,139 |
|
|
Non-interest expense |
|
(15,010 |
) |
|
|
(15,176 |
) |
|
|
(16,269 |
) |
|
|
(12,732 |
) |
|
|
(12,401 |
) |
|
|
(46,455 |
) |
|
|
(33,904 |
) |
|
Pre-provision net revenue |
|
5,127 |
|
|
|
5,018 |
|
|
|
2,410 |
|
|
|
3,533 |
|
|
|
3,945 |
|
|
|
12,555 |
|
|
|
14,353 |
|
|
Realized loss/(gain) on securities |
|
(23 |
) |
|
|
(258 |
) |
|
|
(381 |
) |
|
|
(711 |
) |
|
|
(590 |
) |
|
|
(662 |
) |
|
|
(1,276 |
) |
|
Core deposit amortization |
|
400 |
|
|
|
410 |
|
|
|
347 |
|
|
|
249 |
|
|
|
249 |
|
|
|
1,157 |
|
|
|
497 |
|
|
Purchase discount amortization |
|
(342 |
) |
|
|
(613 |
) |
|
|
(234 |
) |
|
|
(144 |
) |
|
|
(271 |
) |
|
|
(1,189 |
) |
|
|
(626 |
) |
(B) |
Core pre-provision net revenue |
$ |
5,162 |
|
|
$ |
4,557 |
|
|
$ |
2,142 |
|
|
$ |
2,927 |
|
|
$ |
3,333 |
|
|
$ |
11,861 |
|
|
$ |
12,948 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of core pre-provision net revenue to average
assets |
(B) |
Core pre-provision net revenue |
$ |
5,162 |
|
|
$ |
4,557 |
|
|
$ |
2,142 |
|
|
$ |
2,927 |
|
|
$ |
3,333 |
|
|
$ |
11,861 |
|
|
$ |
12,948 |
|
|
Average total assets |
|
2,069,139 |
|
|
|
2,085,039 |
|
|
|
1,955,347 |
|
|
|
1,601,040 |
|
|
|
1,631,654 |
|
|
|
2,036,968 |
|
|
|
1,587,330 |
|
|
Core pre-provision net revenue to average assets |
|
1.00% |
|
|
|
0.87% |
|
|
|
0.44% |
|
|
|
0.73% |
|
|
|
0.82% |
|
|
|
0.78% |
|
|
|
1.09% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of tangible assets (excluding
PPP) |
|
Total assets |
$ |
2,052,986 |
|
|
$ |
2,101,485 |
|
|
$ |
2,097,845 |
|
|
$ |
1,620,743 |
|
|
$ |
1,609,924 |
|
|
$ |
2,052,986 |
|
|
$ |
1,609,924 |
|
|
Goodwill |
|
(22,615 |
) |
|
|
(22,615 |
) |
|
|
(22,774 |
) |
|
|
(11,109 |
) |
|
|
(11,109 |
) |
|
|
(22,615 |
) |
|
|
(11,109 |
) |
|
Other Intangibles |
|
(5,188 |
) |
|
|
(5,588 |
) |
|
|
(5,998 |
) |
|
|
(3,126 |
) |
|
|
(3,374 |
) |
|
|
(5,188 |
) |
|
|
(3,374 |
) |
|
Paycheck Protection Plan ("PPP") loans |
|
(226 |
) |
|
|
(570 |
) |
|
|
(9,983 |
) |
|
|
(22,072 |
) |
|
|
(32,892 |
) |
|
|
(226 |
) |
|
|
(32,892 |
) |
(C) |
Tangible assets (excluding PPP) |
$ |
2,024,957 |
|
|
$ |
2,072,712 |
|
|
$ |
2,059,090 |
|
|
$ |
1,584,436 |
|
|
$ |
1,562,549 |
|
|
$ |
2,024,957 |
|
|
$ |
1,562,549 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of tangible common equity |
|
Total stockholder's equity |
$ |
118,023 |
|
|
$ |
136,654 |
|
|
$ |
157,637 |
|
|
$ |
156,615 |
|
|
$ |
152,569 |
|
|
$ |
118,023 |
|
|
$ |
152,569 |
|
|
Goodwill |
|
(22,615 |
) |
|
|
(22,615 |
) |
|
|
(22,774 |
) |
|
|
(11,109 |
) |
|
|
(11,109 |
) |
|
|
(22,615 |
) |
|
|
(11,109 |
) |
|
Other intangibles |
|
(5,188 |
) |
|
|
(5,588 |
) |
|
|
(5,998 |
) |
|
|
(3,126 |
) |
|
|
(3,374 |
) |
|
|
(5,188 |
) |
|
|
(3,374 |
) |
(D) |
Tangible common equity |
$ |
90,220 |
|
|
$ |
108,451 |
|
|
$ |
128,865 |
|
|
$ |
142,380 |
|
|
$ |
138,086 |
|
|
$ |
90,220 |
|
|
$ |
138,086 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of tangible common equity adjusted for
accumulated other comprehensive loss (income) |
(D) |
Tangible common equity |
$ |
90,220 |
|
|
$ |
108,451 |
|
|
$ |
128,865 |
|
|
$ |
142,380 |
|
|
$ |
138,086 |
|
|
$ |
90,220 |
|
|
$ |
138,086 |
|
|
Accumulated other comprehensive loss (income) |
|
79,839 |
|
|
|
57,781 |
|
|
|
33,462 |
|
|
|
(4,276 |
) |
|
|
(2,608 |
) |
|
|
79,839 |
|
|
|
(2,608 |
) |
(I) |
Tangible common equity adjusted for accumulated other comprehensive
loss (income) |
$ |
170,059 |
|
|
$ |
166,232 |
|
|
$ |
162,327 |
|
|
$ |
138,104 |
|
|
$ |
135,478 |
|
|
$ |
170,059 |
|
|
$ |
135,478 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of tangible book value per diluted
share |
(D) |
Tangible common equity |
$ |
90,220 |
|
|
$ |
108,451 |
|
|
$ |
128,865 |
|
|
$ |
142,380 |
|
|
$ |
138,086 |
|
|
$ |
90,220 |
|
|
$ |
138,086 |
|
|
Shares outstanding |
|
4,297,900 |
|
|
|
4,296,949 |
|
|
|
4,294,136 |
|
|
|
3,480,701 |
|
|
|
3,479,139 |
|
|
|
4,297,900 |
|
|
|
3,479,139 |
|
|
Tangible book value per diluted share |
$ |
20.99 |
|
|
$ |
25.24 |
|
|
$ |
30.01 |
|
|
$ |
40.91 |
|
|
$ |
39.69 |
|
|
$ |
20.99 |
|
|
$ |
39.69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of tangible book value per diluted share
adjusted for accumulated other comprehensive loss
(income) |
(I) |
Tangible common equity adjusted for accumulated other comprehensive
loss (income) |
$ |
170,059 |
|
|
$ |
166,232 |
|
|
$ |
162,327 |
|
|
$ |
138,104 |
|
|
$ |
135,478 |
|
|
$ |
170,059 |
|
|
$ |
135,478 |
|
|
Diluted average common shares outstanding |
|
4,297,900 |
|
|
|
4,296,949 |
|
|
|
4,294,136 |
|
|
|
3,480,701 |
|
|
|
3,479,139 |
|
|
|
4,297,900 |
|
|
|
3,479,139 |
|
|
Tangible book value per diluted share adjusted for accumulated
other comprehensive loss (income) |
$ |
39.57 |
|
|
$ |
38.69 |
|
|
$ |
37.80 |
|
|
$ |
39.68 |
|
|
$ |
38.94 |
|
|
$ |
39.57 |
|
|
$ |
38.94 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of tangible common equity to tangible assets
(excluding PPP) |
(D) |
Tangible common equity |
$ |
90,220 |
|
|
$ |
108,451 |
|
|
$ |
128,865 |
|
|
$ |
142,380 |
|
|
$ |
138,086 |
|
|
$ |
90,220 |
|
|
$ |
138,086 |
|
(C) |
Tangible assets (excluding PPP) |
|
2,024,957 |
|
|
|
2,072,712 |
|
|
|
2,059,090 |
|
|
|
1,584,436 |
|
|
|
1,562,549 |
|
|
|
2,024,957 |
|
|
|
1,562,549 |
|
|
Tangible common equity to tangible assets |
|
4.46% |
|
|
|
5.23% |
|
|
|
6.26% |
|
|
|
8.99% |
|
|
|
8.84% |
|
|
|
4.46% |
|
|
|
8.84% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of tangible common equity to tangible assets
(excluding PPP and
AOCI) |
(I) |
Tangible common equity adjusted for accumulated other comprehensive
losses (income) |
$ |
170,059 |
|
|
$ |
166,232 |
|
|
$ |
162,327 |
|
|
$ |
138,104 |
|
|
$ |
135,478 |
|
|
$ |
170,059 |
|
|
$ |
135,478 |
|
(C) |
Tangible assets (excluding PPP) |
|
2,024,957 |
|
|
|
2,072,712 |
|
|
|
2,059,090 |
|
|
|
1,584,436 |
|
|
|
1,562,549 |
|
|
|
2,024,957 |
|
|
|
1,562,549 |
|
|
Tangible common equity adjusted for accumulated other comprehensive
loss (income) to tangible assets |
|
8.40% |
|
|
|
8.02% |
|
|
|
7.88% |
|
|
|
8.72% |
|
|
|
8.67% |
|
|
|
8.40% |
|
|
|
8.67% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of average tangible common
equity |
|
Average stockholder's common equity |
$ |
133,482 |
|
|
$ |
142,415 |
|
|
$ |
170,374 |
|
|
$ |
159,010 |
|
|
$ |
159,010 |
|
|
$ |
148,636 |
|
|
$ |
155,945 |
|
|
Average goodwill |
|
(22,615 |
) |
|
|
(22,543 |
) |
|
|
(21,251 |
) |
|
|
(11,109 |
) |
|
|
(11,109 |
) |
|
|
(22,003 |
) |
|
|
(11,109 |
) |
|
Average other intangibles |
|
(5,438 |
) |
|
|
(5,850 |
) |
|
|
(5,174 |
) |
|
|
(3,270 |
) |
|
|
(3,523 |
) |
|
|
(5,488 |
) |
|
|
(3,768 |
) |
(E) |
Average tangible stockholders' common equity |
$ |
105,429 |
|
|
$ |
114,022 |
|
|
$ |
143,949 |
|
|
$ |
144,631 |
|
|
$ |
144,378 |
|
|
$ |
121,145 |
|
|
$ |
141,068 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of core return on average common
equity |
(A) |
Core net income |
$ |
4,678 |
|
|
$ |
3,929 |
|
|
$ |
4,074 |
|
|
$ |
2,832 |
|
|
$ |
3,055 |
|
|
$ |
12,681 |
|
|
$ |
10,542 |
|
(E) |
Average tangible common equity |
|
105,429 |
|
|
|
114,022 |
|
|
|
143,949 |
|
|
|
144,631 |
|
|
|
144,378 |
|
|
|
121,145 |
|
|
|
141,068 |
|
|
Core return on average common equity |
|
17.75% |
|
|
|
13.78% |
|
|
|
11.32% |
|
|
|
7.83% |
|
|
|
8.46% |
|
|
|
13.96% |
|
|
|
9.96% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of core yield on
loans |
|
Interest income on loans |
$ |
16,122 |
|
|
$ |
15,221 |
|
|
$ |
13,286 |
|
|
$ |
10,282 |
|
|
$ |
10,270 |
|
|
$ |
44,629 |
|
|
$ |
31,291 |
|
|
Loan accretion income |
|
(342 |
) |
|
|
(613 |
) |
|
|
(234 |
) |
|
|
(144 |
) |
|
|
(271 |
) |
|
|
(1,189 |
) |
|
|
(626 |
) |
|
Adjusted interest income on loans |
|
15,780 |
|
|
|
14,608 |
|
|
|
13,052 |
|
|
|
10,138 |
|
|
|
9,999 |
|
|
|
43,440 |
|
|
|
30,665 |
|
|
Average loan balances |
|
1,484,678 |
|
|
|
1,457,625 |
|
|
|
1,274,407 |
|
|
|
960,606 |
|
|
|
960,274 |
|
|
|
1,406,591 |
|
|
|
970,740 |
|
|
Core yield on loans |
|
4.25% |
|
|
|
4.01% |
|
|
|
4.10% |
|
|
|
4.22% |
|
|
|
4.17% |
|
|
|
4.12% |
|
|
|
4.21% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of adjusted allowance for loan loss to total
loans |
|
Allowance for loan losses |
$ |
(13,398 |
) |
|
$ |
(13,406 |
) |
|
$ |
(13,387 |
) |
|
$ |
(13,343 |
) |
|
$ |
(13,774 |
) |
|
$ |
(13,398 |
) |
|
$ |
(13,774 |
) |
|
Additional reserves not part of the allowance for loan loss |
|
(7,708 |
) |
|
|
(7,908 |
) |
|
|
(8,749 |
) |
|
|
(2,428 |
) |
|
|
(2,572 |
) |
|
|
(7,708 |
) |
|
|
(2,572 |
) |
(F) |
Adjusted allowance for loan loss |
|
(21,106 |
) |
|
|
(21,314 |
) |
|
|
(22,136 |
) |
|
|
(15,771 |
) |
|
|
(16,346 |
) |
|
|
(21,106 |
) |
|
|
(16,346 |
) |
|
Total loans |
|
1,502,696 |
|
|
|
1,474,381 |
|
|
|
1,439,728 |
|
|
|
966,720 |
|
|
|
956,352 |
|
|
|
1,502,696 |
|
|
|
956,352 |
|
|
Adjusted allowance for loan loss to total loans |
|
1.40% |
|
|
|
1.45% |
|
|
|
1.54% |
|
|
|
1.63% |
|
|
|
1.71% |
|
|
|
1.40% |
|
|
|
1.71% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of adjusted allowance for loan loss to
nonperforming
loans |
(F) |
Adjusted allowance for loan loss |
$ |
(21,106 |
) |
|
$ |
(21,314 |
) |
|
$ |
(22,136 |
) |
|
$ |
(15,771 |
) |
|
$ |
(16,346 |
) |
|
$ |
(21,106 |
) |
|
$ |
(16,346 |
) |
|
Nonperforming loans |
|
10,925 |
|
|
|
10,021 |
|
|
|
8,908 |
|
|
|
7,261 |
|
|
|
13,543 |
|
|
|
10,925 |
|
|
|
13,543 |
|
|
Adjusted allowance for loan loss to nonperforming loans (coverage
ratios) |
|
193.19% |
|
|
|
212.69% |
|
|
|
248.50% |
|
|
|
217.20% |
|
|
|
120.70% |
|
|
|
193.19% |
|
|
|
120.70% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of adjusted allowance for loan loss to total
loans excluding
PPP |
(F) |
Adjusted allowance for loan loss |
$ |
(21,106 |
) |
|
$ |
(21,314 |
) |
|
$ |
(22,136 |
) |
|
$ |
(15,771 |
) |
|
$ |
(16,346 |
) |
|
$ |
(21,106 |
) |
|
$ |
(16,346 |
) |
|
Total loans |
|
1,502,696 |
|
|
|
1,474,381 |
|
|
|
1,439,728 |
|
|
|
966,720 |
|
|
|
956,352 |
|
|
|
1,502,696 |
|
|
|
956,352 |
|
|
PPP loans |
|
(226 |
) |
|
|
(570 |
) |
|
|
(9,983 |
) |
|
|
(22,072 |
) |
|
|
(32,892 |
) |
|
|
(226 |
) |
|
|
(32,892 |
) |
|
Total loans excluding PPP |
|
1,502,470 |
|
|
|
1,473,811 |
|
|
|
1,429,745 |
|
|
|
944,648 |
|
|
|
923,460 |
|
|
|
1,502,470 |
|
|
|
923,460 |
|
|
Adjusted allowance for loan loss to total loans excluding PPP |
|
1.40% |
|
|
|
1.45% |
|
|
|
1.55% |
|
|
|
1.67% |
|
|
|
1.77% |
|
|
|
1.40% |
|
|
|
1.77% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of core revenue
|
|
Net interest income |
$ |
17,507 |
|
|
$ |
17,298 |
|
|
$ |
15,535 |
|
|
$ |
12,457 |
|
|
$ |
12,200 |
|
|
$ |
50,340 |
|
|
$ |
36,118 |
|
|
Non-interest income |
|
2,630 |
|
|
|
2,896 |
|
|
|
3,144 |
|
|
|
3,808 |
|
|
|
4,146 |
|
|
|
8,670 |
|
|
|
12,139 |
|
|
CD premium amortization |
|
(134 |
) |
|
|
(175 |
) |
|
|
(129 |
) |
|
|
- |
|
|
|
- |
|
|
|
(438 |
) |
|
|
- |
|
|
Purchase discount amortization |
|
(342 |
) |
|
|
(613 |
) |
|
|
(234 |
) |
|
|
(144 |
) |
|
|
(271 |
) |
|
|
(1,189 |
) |
|
|
(897 |
) |
|
Realized loss/(gain) on securities |
|
(23 |
) |
|
|
(258 |
) |
|
|
(381 |
) |
|
|
(711 |
) |
|
|
(590 |
) |
|
|
(662 |
) |
|
|
(1,276 |
) |
(G) |
Core revenue |
$ |
19,638 |
|
|
$ |
19,148 |
|
|
$ |
17,935 |
|
|
$ |
15,410 |
|
|
$ |
15,485 |
|
|
$ |
56,721 |
|
|
$ |
46,084 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of core non-interest
expense |
|
Non-interest expense |
$ |
15,010 |
|
|
$ |
15,176 |
|
|
$ |
16,269 |
|
|
$ |
12,732 |
|
|
$ |
12,401 |
|
|
$ |
46,455 |
|
|
$ |
33,904 |
|
|
Net loss recognized on sale of premises and equipment |
|
(254 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(254 |
) |
|
|
- |
|
|
Merger related expenses |
|
- |
|
|
|
- |
|
|
|
(2,852 |
) |
|
|
- |
|
|
|
- |
|
|
|
(2,852 |
) |
|
|
- |
|
|
Core deposit amortization |
|
(400 |
) |
|
|
(410 |
) |
|
|
(347 |
) |
|
|
(249 |
) |
|
|
(249 |
) |
|
|
(1,157 |
) |
|
|
(497 |
) |
(H) |
Core non-interest expense |
$ |
14,356 |
|
|
$ |
14,766 |
|
|
$ |
13,070 |
|
|
$ |
12,483 |
|
|
$ |
12,152 |
|
|
$ |
42,192 |
|
|
$ |
33,407 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of core efficiency
ratio |
(H) |
Core non-interest expense |
$ |
14,356 |
|
|
$ |
14,766 |
|
|
$ |
13,070 |
|
|
$ |
12,483 |
|
|
$ |
12,152 |
|
|
$ |
42,192 |
|
|
$ |
33,407 |
|
(G) |
Core revenue |
|
19,638 |
|
|
|
19,148 |
|
|
|
17,935 |
|
|
|
15,410 |
|
|
|
15,485 |
|
|
|
56,721 |
|
|
|
46,084 |
|
|
Core efficiency ratio |
|
73.10% |
|
|
|
77.12% |
|
|
|
72.87% |
|
|
|
81.01% |
|
|
|
78.48% |
|
|
|
74.39% |
|
|
|
72.49% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of non-interest expense to total average
assets |
|
Non-interest expense |
$ |
15,010 |
|
|
$ |
15,176 |
|
|
$ |
16,269 |
|
|
$ |
12,732 |
|
|
$ |
12,401 |
|
|
$ |
46,455 |
|
|
$ |
33,904 |
|
|
Average total assets |
|
2,069,139 |
|
|
|
2,085,039 |
|
|
|
1,955,347 |
|
|
|
1,601,040 |
|
|
|
1,631,654 |
|
|
|
2,036,968 |
|
|
|
1,587,330 |
|
|
Non-interest expense to total average assets |
|
2.90% |
|
|
|
2.91% |
|
|
|
3.33% |
|
|
|
3.18% |
|
|
|
3.04% |
|
|
|
3.04% |
|
|
|
2.85% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of core non-interest expense to total average
assets |
(H) |
Core non-interest expense |
$ |
14,356 |
|
|
$ |
14,766 |
|
|
$ |
13,070 |
|
|
$ |
12,483 |
|
|
$ |
12,152 |
|
|
$ |
42,192 |
|
|
$ |
33,407 |
|
|
Average total assets |
|
2,069,139 |
|
|
|
2,085,039 |
|
|
|
1,955,347 |
|
|
|
1,601,040 |
|
|
|
1,631,654 |
|
|
|
2,036,968 |
|
|
|
1,587,330 |
|
|
Core non-interest expense to total average assets |
|
2.78% |
|
|
|
2.83% |
|
|
|
2.67% |
|
|
|
3.12% |
|
|
|
2.98% |
|
|
|
2.76% |
|
|
|
2.81% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of tax adjusted net interest
margin |
|
Net interest income |
$ |
17,507 |
|
|
$ |
17,298 |
|
|
$ |
15,535 |
|
|
$ |
12,457 |
|
|
$ |
12,200 |
|
|
$ |
50,340 |
|
|
$ |
36,118 |
|
|
Tax adjusted interest on securities and loans |
|
817 |
|
|
|
930 |
|
|
|
966 |
|
|
|
959 |
|
|
|
851 |
|
|
|
2,713 |
|
|
|
2,273 |
|
|
Adjusted net interest income |
|
18,324 |
|
|
|
18,228 |
|
|
|
16,501 |
|
|
|
13,416 |
|
|
|
13,051 |
|
|
|
53,053 |
|
|
|
38,391 |
|
|
Total average earning assets |
|
1,910,722 |
|
|
|
1,927,664 |
|
|
|
1,820,588 |
|
|
|
1,500,183 |
|
|
|
1,506,674 |
|
|
|
1,886,853 |
|
|
|
1,465,675 |
|
|
Tax adjusted net interest margin |
|
3.84% |
|
|
|
3.78% |
|
|
|
3.63% |
|
|
|
3.58% |
|
|
|
3.46% |
|
|
|
3.75% |
|
|
|
3.49% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency
Ratio |
|
Total non-interest expense |
$ |
15,010 |
|
|
$ |
15,176 |
|
|
$ |
16,269 |
|
|
$ |
12,732 |
|
|
$ |
12,401 |
|
|
$ |
46,455 |
|
|
$ |
33,904 |
|
|
Total revenue |
|
20,137 |
|
|
|
20,194 |
|
|
|
18,679 |
|
|
|
16,265 |
|
|
|
16,346 |
|
|
|
59,010 |
|
|
|
48,257 |
|
|
Efficiency ratio |
|
74.54% |
|
|
|
75.15% |
|
|
|
87.10% |
|
|
|
78.28% |
|
|
|
75.87% |
|
|
|
78.72% |
|
|
|
70.26% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FOR FURTHER INFORMATION
CONTACT SHAREHOLDER SERVICES
(219) 853-7575
Finward Bancorp (NASDAQ:FNWD)
Gráfica de Acción Histórica
De May 2024 a Jun 2024
Finward Bancorp (NASDAQ:FNWD)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024