PART I [Business Overview](index=5&type=section&id=Item%201.%20Business) Finward Bancorp, holding company for Peoples Bank, focuses on diversified lending and deposit-taking, expanding through the 2022 Royal Financial acquisition - Finward Bancorp is the holding company for Peoples Bank, an Indiana-chartered commercial bank, and NWIN Risk Management, Inc[13](index=13&type=chunk) - The Bancorp completed the acquisition of Royal Financial, Inc. on January 31, 2022, expanding its network in Illinois[16](index=16&type=chunk) RYFL Merger Consideration | Metric | Value | | :--- | :--- | | **Implied Valuation** | ~$56.7 million | | **Finward Common Stock Issued** | 795,423 shares | | **Cash Consideration Paid** | ~$18.7 million | [Lending Activities](index=8&type=section&id=Lending%20Activities) Lending activities focus on diversified growth, with total loans reaching **$1.51 billion** in 2022, primarily in real estate Loan Portfolio Composition (in thousands) | Loan Type | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Residential real estate | $484,595 | $260,134 | | Commercial real estate | $486,431 | $317,145 | | Multifamily | $251,014 | $61,194 | | Construction and land development | $108,926 | $123,822 | | Commercial business | $93,278 | $115,772 | | Other | $84,327 | $82,072 | | **Total Loans Receivable** | **$1,508,571** | **$960,139** | - The Bancorp primarily operates as a portfolio lender, selling longer-term fixed-rate loans to manage interest rate risk[27](index=27&type=chunk) - The maximum loan to a single borrower was approximately **$26.1 million** as of December 31, 2022, within regulatory limits[28](index=28&type=chunk) [Non‑Performing Assets, Asset Classification and Provision for Loan Losses](index=13&type=section&id=Non%E2%80%91Performing%20Assets%2C%20Asset%20Classification%20and%20Provision%20for%20Loan%20Losses) Non-performing assets significantly increased in 2022, with non-accrual loans reaching **$18.1 million**, and a zero provision for loan losses Non-Performing Assets (in thousands) | Category | 2022 | 2021 | | :--- | :--- | :--- | | Non-accrual loans | $18,128 | $7,056 | | Accruing loans 90+ days past due | $248 | $205 | | Troubled debt restructurings (accruing) | $2,753 | $1,422 | | **Total Non-performing Loans*** | **$18,376** | **$7,261** | | Ratio of non-performing loans to total loans | 1.21% | 0.76% | | Ratio of non-performing loans to total assets | 0.94% | 0.51% | Allowance for Loan Losses (ALL) Activity (in thousands) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Balance at beginning of period | $13,343 | $12,458 | | Net charge-offs | ($446) | ($624) | | Provision for loan losses | $0 | $1,509 | | **Balance at end of period** | **$12,897** | **$13,343** | | ALL to loans outstanding | 0.85% | 1.38% | | ALL to nonperforming loans | 70.18% | 183.76% | [Investment Activities](index=18&type=section&id=Investment%20Activities) The investment portfolio decreased to **$370.9 million** in 2022, primarily due to rising interest rates affecting fair value Investment Portfolio Composition (Carrying Value, in thousands) | Security Type | 2022 | 2021 | | :--- | :--- | :--- | | Municipal Securities | $227,718 | $332,127 | | CMOs and Mortgage-backed securities | $134,116 | $184,701 | | U.S. government sponsored agencies | $7,625 | $8,669 | | Other | $1,437 | $1,392 | | **Total** | **$370,896** | **$518,220** | - Two trust preferred securities with a cost basis of **$2.2 million** were on non-accrual status due to delayed interest payments[73](index=73&type=chunk) - Management expects the fair value of securities to recover as they approach maturity, despite current declines from interest rate changes[74](index=74&type=chunk) [Sources of Funds](index=20&type=section&id=Sources%20of%20Funds) Deposits remain the primary funding source, with average total deposits growing to **$1.82 billion** in 2022 Average Deposits and Rates Paid (in thousands) | Category | 2022 Average Balance | 2022 Average Rate | 2021 Average Balance | 2021 Average Rate | | :--- | :--- | :--- | :--- | :--- | | Noninterest bearing demand | $377,408 | - | $280,900 | - | | Interest bearing demand | $374,815 | 0.36% | $297,012 | 0.08% | | MMDA accounts | $286,155 | 0.37% | $253,468 | 0.13% | | Savings accounts | $416,898 | 0.05% | $277,839 | 0.06% | | Certificates of deposit | $368,322 | 0.26% | $271,882 | 0.46% | | **Total Deposits** | **$1,823,598** | **0.20%** | **$1,381,101** | **0.18%** | - As of December 31, 2022, the Bancorp had **$120.0 million** in FHLB advances and **$15.5 million** in repurchase agreements[75](index=75&type=chunk)[83](index=83&type=chunk) [Regulation and Supervision](index=25&type=section&id=Regulation%20and%20Supervision) The Bancorp and Peoples Bank are extensively regulated, exceeding all 'well capitalized' requirements, and preparing for CECL adoption Bank Regulatory Capital Ratios (December 31, 2022) | Ratio | Actual | Minimum for Capital Adequacy | Minimum to be Well Capitalized | | :--- | :--- | :--- | :--- | | Common equity tier 1 capital | 10.1% | 4.5% | 6.5% | | Tier 1 capital | 10.1% | 6.0% | 8.0% | | Total capital | 10.9% | 8.0% | 10.0% | | Tier 1 leverage | 7.7% | 4.0% | 5.0% | - The new CECL accounting standard, effective January 1, 2023, is expected to result in a **$3.8 million** to **$6.8 million** adjustment to the allowance for credit losses[125](index=125&type=chunk)[342](index=342&type=chunk) - The Bancorp is a financial holding company regulated by the FRB, while Peoples Bank is regulated by the FDIC and Indiana DFI[102](index=102&type=chunk)[106](index=106&type=chunk) [Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) The Bancorp faces significant business, market, liquidity, and industry risks, including interest rate sensitivity and increased competition - Key business risks include credit, market, and liquidity, with **$809.7 million** (53.7%) of the loan portfolio in fixed-rate loans posing interest rate risk[160](index=160&type=chunk)[164](index=164&type=chunk) - Rising interest rates in 2022 led to approximately **$90.0 million** in unrealized losses in the investment portfolio, impacting book capital[162](index=162&type=chunk)[163](index=163&type=chunk) - Industry risks include intense competition, economic conditions in key markets, and increased customer concerns over deposit insurance following recent bank failures[192](index=192&type=chunk)[196](index=196&type=chunk)[199](index=199&type=chunk) [Properties](index=45&type=section&id=Item%202.%20Properties) The Bancorp owns its corporate office and all 26 branch locations, with a net book value of **$40.2 million** for property and equipment - The Bancorp owns its corporate office and all 26 branch locations, with 14 in Northwest Indiana and 12 in Cook County, Illinois[217](index=217&type=chunk)[218](index=218&type=chunk) - The net book value of property, premises, and equipment was **$40.2 million** as of December 31, 2022[219](index=219&type=chunk) [Legal Proceedings](index=46&type=section&id=Item%203.%20Legal%20Proceedings) The Bancorp is involved in routine legal proceedings, with no expected material adverse effect on its financial position - The company is involved in ordinary course legal proceedings, not expected to materially affect its financial position[220](index=220&type=chunk) [Information About Our Executive Officers](index=46&type=section&id=Item%204.5%20Information%20About%20Our%20Executive%20Officers) This section provides biographical information for the Bancorp's six executive officers, including their roles and experience - The report lists six executive officers, detailing their positions and professional backgrounds[221](index=221&type=chunk) - Executive Chairman David A. Bochnowski announced his retirement effective June 30, 2023[221](index=221&type=chunk) PART II [Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=48&type=section&id=Item%205.%20Market%20for%20the%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The Bancorp's common stock trades on Nasdaq, with a repurchase program having **48,828** shares remaining available - The Bancorp's common stock trades on the Nasdaq Capital Market under the symbol "FNWD"[227](index=227&type=chunk) - A stock repurchase program authorized in 2014 has **48,828** shares remaining available for repurchase as of year-end 2022[228](index=228&type=chunk)[229](index=229&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=49&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Total assets grew to **$2.1 billion** in 2022, driven by acquisition and loan growth, with stable net income despite increased expenses [Financial Condition](index=50&type=section&id=Financial%20Condition) Total assets grew to **$2.1 billion** in 2022, driven by loan portfolio expansion to **$1.5 billion** and increased deposits Key Balance Sheet Metrics (in thousands) | Metric | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Total Assets | $2,070,339 | $1,620,743 | | Net Loans Receivable | $1,500,734 | $953,377 | | Total Deposits | $1,775,017 | $1,434,201 | | Total Borrowed Funds | $135,503 | $14,581 | - Nonperforming loans as a percentage of total loans increased to **1.21%** in 2022 from **0.75%** in 2021[240](index=240&type=chunk) - The ALL to total loans ratio decreased to **0.85%** in 2022 from **1.38%** in 2021, with ALL coverage for non-performing loans dropping to **70.2%**[250](index=250&type=chunk) [Liquidity and Capital Resources](index=56&type=section&id=Liquidity%20and%20Capital%20Resources) Stockholders' equity decreased to **$136.4 million** due to unrealized losses on securities, yet the Bank remained well-capitalized - Stockholders' equity decreased by **$20.2 million** to **$136.4 million**, primarily due to **$68.6 million** in unrealized losses on securities[261](index=261&type=chunk) - Book value per share decreased to **$31.73** at December 31, 2022, from **$45.00** at year-end 2021[261](index=261&type=chunk) - The Bank's capital levels exceeded all regulatory requirements, maintaining a "well capitalized" status as of December 31, 2022[262](index=262&type=chunk)[263](index=263&type=chunk) [Results of Operations – Comparison of 2022 to 2021](index=57&type=section&id=Results%20of%20Operations%20%E2%80%93%20Comparison%20of%202022%20to%202021) Net income remained stable at **$15.1 million** in 2022, driven by increased net interest income offset by higher noninterest expenses Key Performance Metrics | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Net Income | $15.1 million | $15.0 million | | Return on Average Assets | 0.74% | 0.95% | | Return on Average Equity | 10.47% | 9.61% | | Net Interest Income | $67.1 million | $48.6 million | | Net Interest Margin | 3.56% | 3.29% | - Noninterest income decreased by **$4.4 million** (-27.8%), mainly due to lower gains on loan and securities sales[268](index=268&type=chunk) - Noninterest expense increased by **$15.5 million** (33.2%), driven by higher compensation, data processing, and other operating costs related to the Royal acquisition[270](index=270&type=chunk)[271](index=271&type=chunk) [Financial Statements](index=61&type=section&id=Item%208.%20Financial%20Statements) This section presents the audited consolidated financial statements for 2022 and 2021, including key audit matters like ALLL valuation and acquisition accounting - The independent auditor's report from FORVIS, LLP provides an unqualified opinion on the fair presentation of financial statements[285](index=285&type=chunk) - Critical audit matters include the valuation of the Allowance for Loan Losses (ALLL) and the accounting for the Royal Financial, Inc. acquisition[291](index=291&type=chunk)[293](index=293&type=chunk) [Consolidated Financial Statements](index=64&type=section&id=Consolidated%20Financial%20Statements) Consolidated financial statements show total assets grew to **$2.07 billion**, net loans to **$1.50 billion**, and deposits to **$1.78 billion** Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Total Assets | $2,070,339 | $1,620,743 | | Net Loans Receivable | $1,500,734 | $953,377 | | Goodwill | $22,395 | $11,109 | | Total Deposits | $1,775,017 | $1,434,201 | | Total Liabilities | $1,933,946 | $1,464,128 | | Total Stockholders' Equity | $136,393 | $156,615 | Consolidated Income Statement Highlights (in thousands) | Account | 2022 | 2021 | | :--- | :--- | :--- | | Net Interest Income | $67,149 | $48,575 | | Provision for Loan Losses | $0 | $1,509 | | Noninterest Income | $11,509 | $15,947 | | Noninterest Expense | $62,100 | $46,636 | | **Net Income** | **$15,080** | **$14,963** | | Diluted EPS | $3.60 | $4.30 | [Notes to Consolidated Financial Statements](index=69&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes provide detailed accounting policies, Royal Financial acquisition details, loan portfolio breakdown, and investment securities with **$84.6 million** in unrealized losses - The Royal Financial, Inc. acquisition on January 31, 2022, for approximately **$56.7 million**, resulted in **$11.3 million** goodwill and **$3.2 million** core deposit intangibles[350](index=350&type=chunk)[353](index=353&type=chunk) - The available-for-sale investment securities portfolio had **$84.6 million** in gross unrealized losses as of December 31, 2022[358](index=358&type=chunk) - The allowance for loan losses decreased to **$12.9 million** at year-end 2022, with no provision recorded during the year[363](index=363&type=chunk) [Controls and Procedures](index=110&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2022 - The CEO and CFO concluded that the Bancorp's disclosure controls and procedures were effective as of December 31, 2022[448](index=448&type=chunk) - Management determined the Bancorp's internal control over financial reporting was effective as of December 31, 2022, based on the COSO framework[451](index=451&type=chunk) PART III [Items 10-14](index=112&type=section&id=Items%2010-14) This section incorporates information from the 2023 Proxy Statement, covering directors, executive compensation, security ownership, and related party transactions - Information on directors, executive officers, corporate governance, executive compensation, security ownership, related party transactions, and accountant fees is incorporated by reference from the 2023 Proxy Statement[456](index=456&type=chunk)[457](index=457&type=chunk)[458](index=458&type=chunk)[462](index=462&type=chunk)[463](index=463&type=chunk) Equity Compensation Plan Information (as of Dec 31, 2022) | Plan Category | Securities to be issued upon exercise | Weighted-average exercise price | Securities remaining available for future issuance | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 0 | $0 | 224,845 | PART IV [Exhibits and Financial Statement Schedules](index=113&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists financial statements, schedules, and exhibits filed with the Form 10-K, including the Royal Financial merger agreement and corporate documents - This section lists all financial statements and exhibits filed with the Form 10-K, including the merger agreement and corporate governance documents[465](index=465&type=chunk)[470](index=470&type=chunk)

PART I. Financial Information [Unaudited Financial Statements and Notes](index=3&type=section&id=Item%201.Unaudited%20Financial%20Statements%20and%20Notes) This section presents Finward Bancorp's unaudited consolidated financial statements and notes for the period ended September 30, 2022, detailing the financial position and performance, significantly impacted by the Royal Financial acquisition [Consolidated Balance Sheet](index=3&type=section&id=Consolidated%20Balance%20Sheet) Total assets increased to **$2.05 billion** by September 30, 2022, primarily from loan growth funded by deposits, while stockholders' equity decreased due to comprehensive losses Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2022 (unaudited, in thousands) | December 31, 2021 (in thousands) | | :--- | :--- | :--- | | Total cash and cash equivalents | $38,296 | $33,176 | | Securities available-for-sale | $359,035 | $526,889 | | Net loans receivable | $1,489,298 | $953,377 | | Goodwill | $22,615 | $11,109 | | **Total assets** | **$2,052,986** | **$1,620,743** | | Total deposits | $1,832,964 | $1,434,201 | | Borrowed funds | $56,174 | $- | | **Total liabilities** | **$1,934,963** | **$1,464,128** | | Accumulated other comprehensive (loss) income | $(79,839) | $4,276 | | **Total stockholders' equity** | **$118,023** | **$156,615** | | **Total liabilities and stockholders' equity** | **$2,052,986** | **$1,620,743** | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) Net income for Q3 2022 increased to **$4.6 million** due to higher net interest income, while nine-month net income slightly declined to **$11.1 million** due to noninterest income and expense changes Quarterly and Nine-Month Income Statement Highlights (in thousands, except per share data) | Metric | Q3 2022 (in thousands) | Q3 2021 (in thousands) | Nine Months 2022 (in thousands) | Nine Months 2021 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Net interest income | $17,507 | $12,200 | $50,340 | $36,118 | | Provision for loan losses | $- | $139 | $- | $1,293 | | Total noninterest income | $2,630 | $4,146 | $8,670 | $12,139 | | Total noninterest expense | $15,010 | $12,401 | $46,455 | $33,904 | | **Net income** | **$4,556** | **$3,538** | **$11,122** | **$11,652** | | Diluted EPS | $1.07 | $1.02 | $2.67 | $3.35 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail accounting policies, financial components, and the significant **Royal Financial, Inc. (RYFL) acquisition**, along with upcoming accounting standard changes like CECL - On January 31, 2022, Finward completed its acquisition of Royal Financial, Inc. (RYFL), issuing **795,423 shares** of common stock and paying approximately **$18.7 million** in cash, for an implied transaction value of about **$56.7 million**[20](index=20&type=chunk)[22](index=22&type=chunk) - The acquisition resulted in the recording of approximately **$11.5 million** in goodwill and a **$3.2 million** core deposit intangible[23](index=23&type=chunk)[25](index=25&type=chunk) - The Bancorp will adopt ASU No. 2016-13 (CECL) for measuring credit losses on financial instruments effective January 1, 2023, with management currently evaluating its impact[86](index=86&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the Bancorp's financial condition and results, emphasizing the **Royal Financial acquisition's impact** on asset growth, loan portfolio, asset quality, and capital, alongside quarterly and nine-month performance - The acquisition of Royal Financial, Inc. (RYFL) on January 31, 2022, was a key event, expanding the Bank's network in Cook and DuPage counties, Illinois[117](index=117&type=chunk) - Total assets increased by **$432.2 million (26.7%)** during the first nine months of 2022, primarily due to the RYFL acquisition[120](index=120&type=chunk) - Stockholders' equity decreased by **$38.6 million (24.6%)** in the first nine months of 2022, mainly due to an **$84.1 million** other comprehensive loss from market value changes in the securities portfolio[155](index=155&type=chunk) [Financial Condition](index=41&type=section&id=Financial%20Condition) Total assets grew to **$2.1 billion** by September 30, 2022, driven by the RYFL acquisition and loan growth, while the investment portfolio decreased due to unrealized losses Loan Portfolio Composition (in thousands) | Loan Type | Sept 30, 2022 (in thousands) | % of Total | Dec 31, 2021 (in thousands) | % of Total | | :--- | :--- | :--- | :--- | :--- | | Residential real estate | $471,565 | 31.5% | $260,134 | 33.0% | | Commercial real estate | $452,852 | 30.3% | $317,145 | 31.2% | | Multifamily | $258,377 | 17.3% | $61,194 | 5.7% | | Commercial business | $95,372 | 6.4% | $115,772 | 11.4% | | Other | $218,821 | 14.5% | $143,232 | 18.7% | | **Total Loans Receivable** | **$1,496,387** | **100.0%** | **$960,139** | **100.0%** | - The securities portfolio, all available-for-sale, decreased by **$167.9 million (31.9%)** to **$359.0 million**, attributed to increased unrealized losses from rising interest rates and using cash flows to fund loan growth[141](index=141&type=chunk) - Total deposits increased by **$398.8 million (27.8%)** to **$1.83 billion**, largely due to the RYFL acquisition and efforts to grow core deposits[146](index=146&type=chunk)[148](index=148&type=chunk) [Asset Quality](index=43&type=section&id=Asset%20Quality) Asset quality metrics, including nonperforming and substandard loans, increased due to the RYFL acquisition, while the allowance for loan losses remained stable with no new provision Asset Quality Summary (in thousands) | Metric | Sept 30, 2022 (in thousands) | Dec 31, 2021 (in thousands) | | :--- | :--- | :--- | | Nonperforming loans | $10,925 | $7,261 | | Substandard loans | $17,922 | $8,687 | | Special mention loans | $21,153 | $21,123 | | Impaired loans | $13,006 | $5,808 | | Allowance for loan losses (ALL) | $13,398 | $13,343 | | ALL to Total Loans | 0.90% | 1.38% | - The increase in substandard and impaired loans is primarily the result of loans acquired through the RYFL acquisition[127](index=127&type=chunk)[132](index=132&type=chunk) - No provision for loan losses was recorded for the nine months ended September 30, 2022, compared to a provision of **$1.3 million** for the same period in 2021[137](index=137&type=chunk) [Liquidity and Capital Resources](index=51&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity improved with increased cash, but stockholders' equity decreased due to unrealized securities losses, though capital ratios remain well above regulatory minimums Bank Capital Ratios | Ratio | Sept 30, 2022 | Minimum for Capital Adequacy | | :--- | :--- | :--- | | Common equity tier 1 capital to risk weighted assets | 11.8% | 4.5% | | Tier 1 capital to risk-weighted assets | 11.8% | 6.0% | | Total capital to risk-weighted assets | 12.8% | 8.0% | | Tier 1 capital to adjusted average assets | 8.1% | 4.0% | - The Bancorp's ability to pay dividends depends on the Bank's ability to pay dividends to the Bancorp, which is subject to regulatory limits by the DFI and FDIC[162](index=162&type=chunk) - No shares were repurchased under the stock repurchase program during the first nine months of 2022[155](index=155&type=chunk) [Results of Operations](index=53&type=section&id=Results%20of%20Operations) For Q3 2022, net income rose to **$4.6 million** driven by net interest income, while nine-month net income fell to **$11.1 million** due to a **$3.5 million** drop in noninterest income and a **$12.6 million** rise in noninterest expense Quarterly Results of Operations (in thousands) | Metric | Q3 2022 (in thousands) | Q3 2021 (in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Net Interest Income | $17,507 | $12,200 | 43.5% | | Noninterest Income | $2,630 | $4,146 | -36.6% | | Noninterest Expense | $15,010 | $12,401 | 21.0% | | Net Income | $4,556 | $3,538 | 28.8% | Nine-Month Results of Operations (in thousands) | Metric | Nine Months 2022 (in thousands) | Nine Months 2021 (in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Net Interest Income | $50,340 | $36,118 | 39.4% | | Noninterest Income | $8,670 | $12,139 | -28.6% | | Noninterest Expense | $46,455 | $33,904 | 37.0% | | Net Income | $11,122 | $11,652 | -4.5% | - The increase in noninterest expense for the nine-month period was driven by the Royal acquisition, talent management, wage inflation, and investments in technology like Salesforce and nCino[186](index=186&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=62&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This item is marked as 'Not applicable', indicating no new or materially changed quantitative and qualitative disclosures about market risk for this period - The report states this item is not applicable for this filing[193](index=193&type=chunk) [Controls and Procedures](index=62&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the Bancorp's disclosure controls and procedures were effective as of September 30, 2022, with no material changes to internal controls identified - The Chief Executive Officer and Chief Financial Officer concluded that the Bancorp's disclosure controls and procedures were effective as of September 30, 2022[194](index=194&type=chunk) - There were no changes in internal control over financial reporting during the nine months ended September 30, 2022, that materially affected or are likely to materially affect the controls[195](index=195&type=chunk) PART II. Other Information [Legal Proceedings](index=63&type=section&id=Item%201.%20Legal%20Proceedings) The Bancorp is involved in routine legal proceedings, with management expecting no material adverse financial impact from ultimate liabilities - The company is involved in routine legal proceedings, but management does not expect any material adverse financial impact[198](index=198&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=63&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No shares were repurchased under the Bancorp's existing stock repurchase program during the nine months ended September 30, 2022 - No shares were repurchased under the existing stock repurchase program during the nine months ended September 30, 2022[200](index=200&type=chunk) Share Repurchase Activity (Jan - Sep 2022) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Maximum Number of Shares That May Yet Be Purchased | | :--- | :--- | :--- | :--- | | Jan - Sep 2022 | - | N/A | 48,828 | [Exhibits](index=63&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and the Inline XBRL Interactive Data File - Filed exhibits include CEO and CFO certifications as required by Sarbanes-Oxley Act rules[202](index=202&type=chunk)[203](index=203&type=chunk) - The filing includes an Inline XBRL Interactive Data File containing tagged financial statements and notes[203](index=203&type=chunk)[204](index=204&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the quarterly period ended June 30, 2022 or ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the transition period from ______ to ______ Commission File Number: 0-26128 Finward Bancorp (Exact name of registrant as specified in its charter) Indiana 35-1927981 (State or other ju ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the quarterly period ended March 31, 2022 or ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the transition period from ______ to ______ Commission File Number: 0-26128 Finward Bancorp (Exact name of registrant as specified in its charter) Indiana 35-1927981 (State or other j ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _________________ (Mark One) FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission file number 0-26128 Finward Bancorp (Exact name of registrant as specified in its charter) incorporation or o ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the quarterly period ended September 30, 2021 or ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the transition period from to Commission File Number: 0-26128 Finward Bancorp (Exact name of registrant as specified in its charter) Indiana 35-1927981 (State or other jurisdictio ...

[PART I. Financial Information](index=3&type=section&id=PART%20I.%20Financial%20Information) This section presents the unaudited financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures for Finward Bancorp [Unaudited Financial Statements and Notes](index=3&type=section&id=Item%201.%20Unaudited%20Financial%20Statements%20and%20Notes) This section presents Finward Bancorp's unaudited condensed consolidated financial statements and detailed notes for the periods ended June 30, 2021, including the pending acquisition of Royal Financial, Inc [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Finward Bancorp's total assets grew to $1.60 billion by June 30, 2021, driven by increased cash and securities, with total liabilities and equity also rising Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2021 (unaudited) | December 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | **$1,603,513** | **$1,496,292** | | Total cash and cash equivalents | $68,625 | $19,922 | | Securities available-for-sale | $473,927 | $410,669 | | Net loans receivable | $955,852 | $952,688 | | **Total Liabilities** | **$1,447,944** | **$1,344,603** | | Total deposits | $1,395,096 | $1,302,339 | | **Total Stockholders' Equity** | **$155,569** | **$151,689** | [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Net income for Q2 2021 decreased to $3.6 million due to lower noninterest income and higher expenses, while six-month net income slightly increased to $8.1 million Key Income Statement Data (in thousands, except per share data) | Metric | Q2 2021 | Q2 2020 | 6 Months 2021 | 6 Months 2020 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $11,872 | $11,415 | $23,918 | $22,086 | | Provision for loan losses | $576 | $508 | $1,154 | $1,022 | | Total Noninterest Income | $3,680 | $5,046 | $7,993 | $8,592 | | Total Noninterest Expense | $11,010 | $10,013 | $21,503 | $20,105 | | **Net Income** | **$3,571** | **$4,851** | **$8,114** | **$7,964** | | **Diluted EPS** | **$1.03** | **$1.40** | **$2.33** | **$2.30** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail accounting policies, revisions, portfolio breakdowns, and the pending acquisition of Royal Financial, Inc., along with upcoming accounting standards - On May 24, 2021, the company's name was changed from "NorthWest Indiana Bancorp" to "Finward Bancorp"[20](index=20&type=chunk) - Previously issued financial statements were revised for immaterial errors related to deferred costs for the manufactured home loan product, resulting in a **$291 thousand understatement of net income** for the six months ended June 30, 2020[22](index=22&type=chunk)[23](index=23&type=chunk)[26](index=26&type=chunk) - The upcoming credit loss guidance (CECL) under ASU No. 2016-13 will be effective for the Bancorp's year ending December 31, 2023, with management evaluating its impact[87](index=87&type=chunk) - On July 28, 2021, Finward entered into a merger agreement to acquire Royal Financial, Inc. (RYFL) for approximately **$52.9 million**, with closing expected in Q1 2022[107](index=107&type=chunk)[108](index=108&type=chunk)[109](index=109&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Finward Bancorp's financial condition, including asset growth, stable loans, credit quality, and the Royal Financial merger, alongside operational results for the periods ended June 30, 2021 Key Performance Metrics (as of June 30, 2021) | Metric | Q2 2021 | 6 Months 2021 | | :--- | :--- | :--- | | Net Income | $3.6 million | $8.1 million | | Diluted EPS | $1.03 | $2.33 | | ROA | 0.90% | 1.04% | | ROE | 9.17% | 10.54% | - Total assets increased by **$107.2 million (7.2%)** during the first six months of 2021, primarily due to strong core deposit growth which increased cash balances[128](index=128&type=chunk) - The Bancorp is set to acquire Royal Financial, Inc. (RYFL) in a deal valued at approximately **$52.9 million**, expected to close in Q1 2022, forming a combined entity with approximately **$2.1 billion in assets**[115](index=115&type=chunk)[117](index=117&type=chunk)[111](index=111&type=chunk) - The Bancorp participated in both rounds of the Paycheck Protection Program (PPP), approving **1,202 loans for $129.0 million**, with a remaining PPP loan balance of **$50.3 million** as of June 30, 2021[127](index=127&type=chunk) [Financial Condition](index=42&type=section&id=Financial%20Condition) Total assets reached $1.6 billion, driven by interest-earning assets and strong deposit growth, while non-performing loans decreased to 1.26% of total loans Loan Portfolio Composition (in thousands) | Loan Type | June 30, 2021 | % of Total | | :--- | :--- | :--- | | Commercial real estate | $315,087 | 32.6% | | Residential real estate | $268,649 | 27.8% | | Commercial business | $149,414 | 15.5% | | Construction and land development | $104,154 | 10.8% | | Other | $127,773 | 13.3% | | **Total Loans Receivable** | **$965,077** | **100.0%** | Credit Quality Ratios | Ratio | June 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Nonperforming loans to total loans | 1.26% | 1.49% | | Allowance for loan losses to total loans | 1.41% | 1.29% | | Allowance to non-performing loans | 111.1% | 86.7% | - Total deposits grew by **$92.8 million (7.1%)** in the first six months of 2021, primarily driven by a **$66.5 million increase in checking accounts**[147](index=147&type=chunk) [Liquidity and Capital Resources](index=48&type=section&id=Liquidity%20and%20Capital%20Resources) The Bancorp maintained strong liquidity with a $48.7 million increase in cash and exceeded all regulatory capital requirements, with a Tier 1 capital ratio of 13.0% - Cash and cash equivalents increased by **$48.7 million** in the first six months of 2021, funded by **$95.1 million** in net cash from financing activities, offset by **$60.0 million** used in investing activities[151](index=151&type=chunk) Bancorp Regulatory Capital Ratios | Ratio | June 30, 2021 | Minimum Required | | :--- | :--- | :--- | | Common equity tier 1 capital | 13.0% | 4.5% | | Tier 1 capital | 13.0% | 6.0% | | Total capital | 14.2% | 8.0% | | Tier 1 leverage | 8.3% | 4.0% | - The Bancorp's ability to pay dividends depends on the Bank, which can declare dividends in 2021 up to its 2021 net profits plus **$4.7 million** without prior regulatory approval[162](index=162&type=chunk) [Results of Operations](index=53&type=section&id=Results%20of%20Operations) Q2 2021 net income decreased to $3.6 million due to lower noninterest income and higher expenses, while six-month net income slightly increased to $8.1 million with a compressed net interest margin Quarterly Performance Comparison (Q2 2021 vs Q2 2020) | Metric | Q2 2021 | Q2 2020 | Change | | :--- | :--- | :--- | :--- | | Net Interest Income | $11.9M | $11.4M | +4.0% | | Noninterest Income | $3.7M | $5.0M | -27.1% | | Noninterest Expense | $11.0M | $10.0M | +10.0% | | Net Income | $3.6M | $4.9M | -26.4% | Six-Month Performance Comparison (2021 vs 2020) | Metric | 6M 2021 | 6M 2020 | Change | | :--- | :--- | :--- | :--- | | Net Interest Income | $23.9M | $22.1M | +8.3% | | Noninterest Income | $8.0M | $8.6M | -7.0% | | Noninterest Expense | $21.5M | $20.1M | +7.0% | | Net Income | $8.1M | $8.0M | +1.9% | - The net interest margin for Q2 2021 was **3.22%**, down from **3.48%** in Q2 2020, driven by a decline in the average yield on interest-earning assets to **3.38%** from **3.93%**[165](index=165&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=58&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section on quantitative and qualitative disclosures about market risk is not applicable for the current reporting period - The company states that this section is not applicable[187](index=187&type=chunk) [Controls and Procedures](index=58&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the Bancorp's disclosure controls and procedures were effective as of June 30, 2021, with no material changes to internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the Bancorp's disclosure controls and procedures were effective as of June 30, 2021[188](index=188&type=chunk) - There were no material changes to the Bancorp's internal control over financial reporting during the six months ended June 30, 2021[189](index=189&type=chunk) [PART II. Other Information](index=60&type=section&id=PART%20II.%20Other%20Information) This section covers legal proceedings, unregistered sales of equity securities, and a list of exhibits filed with the report [Legal Proceedings](index=60&type=section&id=Item%201.%20Legal%20Proceedings) The Bancorp is involved in routine legal proceedings not expected to have a material adverse effect on its financial position - The company is involved in ordinary course legal proceedings which are not expected to have a material adverse effect on its financial condition[191](index=191&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=60&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No shares were repurchased under the Bancorp's stock repurchase program during the first six months of 2021, with 48,828 shares remaining available - No shares were repurchased under the company's stock repurchase program during the six months ended June 30, 2021[193](index=193&type=chunk) Stock Repurchase Program Status | Period | Total Shares Purchased | Maximum Shares Remaining | | :--- | :--- | :--- | | Jan 1 - Jun 30, 2021 | 0 | 48,828 | [Exhibits](index=60&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and the XBRL Interactive Data File - Exhibits filed include CEO/CFO certifications and the XBRL Interactive Data File[195](index=195&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the quarterly period ended March 31, 2021 or ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the transition period from ______ to ______ Commission File Number: 0-26128 NorthWest Indiana Bancorp (Exact name of registrant as specified in its charter) (State or other jurisdicti ...

Loan Portfolio and Performance - The Bancorp's loan portfolio totaled $966,578,000 at the end of 2020, showing an increase from $906,869,000 in 2019, representing a growth of approximately 11.5%[30] - Construction and development loans increased to $93,562,000 in 2020 from $87,710,000 in 2019, marking a growth of about 6.5%[31] - The average loans outstanding during 2020 were $961,187,000, up from $876,611,000 in 2019, indicating a year-over-year increase of approximately 9.6%[31] - Adjustable Rate Mortgage Loans (ARMs) originated totaled $9.9 million in 2020, accounting for 3.2% of total mortgage loan originations[43] - The Bancorp's primary lending area includes Lake County in Indiana and Cook County in Illinois, where the majority of loan activity is concentrated[35] - The maximum loan-to-value ratio for residential construction loans is set at 89% of the lower of the current appraised value or the cost of construction[44] - The Bancorp's fixed-rate mortgage loans generally conform to Freddie Mac guidelines, with maturities exceeding fifteen years[41] - The 15-year mortgage loan program has gained significant acceptance, with borrowers typically having larger down payments[42] - The Bancorp had no loans exceeding regulatory limitations as of December 31, 2020, with the maximum loan amount to a single borrower capped at approximately $20,315,000[27] - There were no concentrations of loans in any industry exceeding 10% of total loans as of December 31, 2020[28] Non-Performing Assets - The Bancorp's total non-performing assets as of December 31, 2020, amounted to $15,840,000, an increase from $9,149,000 in 2019[59] - The ratio of non-performing loans to total assets increased to 0.96% in 2020 from 0.56% in 2019[59] - The total of non-accrual, 90 days past due, and accruing loans that qualify as troubled debt restructurings was $15,840,000 in 2020, compared to $9,149,000 in 2019[59] - Residential real estate loans classified as substandard increased to $6,387,000 in 2020 from $4,491,000 in 2019[62] - The Bancorp's special mention loans totaled $22,684,000 in 2020, up from $12,624,000 in 2019[63] - The Bancorp's total impaired loans increased to $11,821,000 in 2020 from $7,218,000 in 2019, representing a 63.5% increase[65] - The number of troubled debt restructured loans rose to 25 in 2020, with a recorded investment of $2,121,000, compared to 22 loans with a recorded investment of $2,100,000 in 2019[66] Loan Losses and Allowances - The allowance for loan losses at the end of 2020 was $12,458,000, up from $8,999,000 at the end of 2019, marking a 38.5% increase[68] - The total charge-offs for 2020 were $286,000, a decrease from $1,621,000 in 2019, indicating improved loan performance[68] - The allowance for loan losses to loans outstanding ratio increased to 1.29% in 2020 from 0.99% in 2019[68] - The Bancorp's net charge-offs to average loans outstanding during the period was -0.02% in 2020, an improvement from -0.18% in 2019[68] Investment Portfolio - The Bancorp's investment portfolio totaled $410.7 million at December 31, 2020, an increase from $277.2 million in 2019[70] - The carrying value of mortgage-backed securities increased to $97,941,000 in 2020 from $77,316,000 in 2019, reflecting a 26.7% growth[72] - The Bancorp had $13.7 million in repurchase agreements and $6.1 million in other borrowings as of December 31, 2020[76] Deposits and Interest Rates - Retail and commercial deposits are primarily sourced from the Bancorp's primary market area, with a broad selection of deposit instruments offered[77] - Total deposits increased to $1,239,314,000 in 2020, up from $1,108,687,000 in 2019, representing an increase of 11.75%[79] - The average rate on interest-bearing deposits decreased to 0.43% in 2020 from 0.75% in 2019[79] Financial Performance - The Wealth Management Group's assets reached $351.0 million, an increase of $8.1 million compared to December 31, 2019[85] - The return on average assets improved to 1.16% in 2020, up from 0.94% in 2019[89] - The interest rate spread for 2020 was 3.46%, compared to the previous year's spread[87] - Total loans amounted to $961,187,000 in 2020, with a weighted average yield of 4.67%[90] - The average outstanding balance of repurchase agreements increased to $16,975,000 in 2020 from $12,928,000 in 2019[83] - The total stockholders' equity to total assets ratio was 10.21% at the end of 2020, slightly up from 10.09% in 2019[89] - The average balance of interest-earning assets was $1,321,159,000 in 2020, generating interest income of $51,621,000[90] - The total interest-bearing liabilities were $1,266,568,000 in 2020, with a weighted average cost of 0.45%[90] - Total stockholders' equity increased to $1,427.176 million from $1,285.964 million, reflecting a growth of approximately 11% year-over-year[92] - Net interest income rose to $45.881 million, up from $43.158 million, marking an increase of about 6.3% compared to the previous year[92] - The net interest margin decreased slightly to 3.47% from 3.66%, indicating a decline of approximately 5.2% year-over-year[92] - Total interest-earning assets saw a net change of $(629) thousand, with a total of $12,800 thousand in interest-earning assets for the year[95] - Interest expense on deposits decreased by $3.038 million, while total interest-bearing liabilities decreased by $3.352 million[95] Capital Requirements and Compliance - The Bancorp's capital requirements include a common equity Tier 1 capital ratio of 4.5% and a total capital to risk-based assets ratio of 8%[117] - The formation of NWIN Funding, Inc. as a REIT allows the Bancorp to raise capital using portfolio mortgages as collateral, enhancing financial flexibility[99] - As of December 31, 2020, the common equity Tier 1 capital ratio was 12.8%, significantly above the minimum required ratio of 4.5%[131] - Total capital to risk-weighted assets was 14.0%, exceeding the minimum requirement of 8.0%[131] - The Tier 1 capital to risk-weighted assets ratio was 12.8%, well above the minimum requirement of 6.0%[131] - The Bank's capital exceeded all applicable regulatory capital requirements as of December 31, 2020, with common equity Tier 1 capital amounting to $125.3 million[130] - The capital conservation buffer requirement was fully implemented at 2.5% on January 1, 2019, impacting capital distribution policies[121] - The Economic Growth Act established a new optional Community Bank Leverage Ratio (CBLR) for qualifying community banks, set between 8% and 10%[127] - The CBLR was temporarily lowered to 8% under the CARES Act, with a transition back to 9% planned for subsequent years[129] - The Bank's Tier 1 capital to adjusted average assets ratio was 8.5%, exceeding the minimum requirement of 4.0%[131] - The Dodd-Frank Act mandates stringent capital levels for bank holding companies, aligning them with those required for insured depository subsidiaries[123] - Institutions are classified based on capital adequacy, with "well capitalized" defined as having a total risk-based capital ratio of 10.0% or greater[124] - As of December 31, 2020, the Common Equity Tier 1 capital to risk-weighted assets ratio was 12.7%, significantly above the minimum required ratio of 4.5%[133] - The Tier 1 capital to risk-weighted assets ratio stood at 12.7%, exceeding the minimum requirement of 6.0%[133] - Total capital to risk-weighted assets ratio was 13.9%, well above the minimum requirement of 8.0%[133] - The Bancorp's Tier 1 capital to adjusted average assets ratio was 8.3%, surpassing the minimum requirement of 4.0%[133] Regulatory and Compliance Issues - The Bancorp recognized dividend income of approximately $120 thousand from its Federal Home Loan Bank stock in 2020[148] - The Bancorp had outstanding borrowings of $6.0 million from the Federal Home Loan Bank of Indianapolis as of December 31, 2020[148] - The Bancorp's excess borrowing capacity based on collateral from the Federal Home Loan Bank was $168.0 million[148] - The Bank paid net deposit insurance assessments of $731 thousand during the year ended December 31, 2020[139] - The deposit insurance assessment rate for 2020 was approximately 0.059% of insured deposits[139] - The Bank was rated "satisfactory" with respect to its Community Reinvestment Act compliance during its most recent regulatory examination[150] - The Bancorp has consolidated total deferred tax assets of $6.8 million and total deferred tax liabilities of $5.8 million, resulting in a net deferred tax asset of $981 thousand[169] - The Bank is subject to Indiana's Financial Institutions Tax at a flat rate of 6.25%, which is scheduled to decrease to 6.0% in 2020, 5.5% in 2021, 5.0% in 2022, and 4.9% in 2023 and thereafter[168] - The Bancorp's earnings and growth are influenced by the monetary and credit policies of the Federal Reserve, which regulate the national supply of bank credit[164] - The Dodd-Frank Act requires the Bancorp to provide shareholders an opportunity to vote on executive compensation and golden parachute payments, with votes being non-binding and advisory[163] - Under the Dodd-Frank Act, interchange fees for debit card transactions must be reasonable and proportional to the issuer's incremental costs, impacting smaller depository institutions[160] - The Bancorp has elected to become a financial holding company under the Gramm-Leach-Bliley Act, allowing it to offer a wider range of financial services[151] - The federal banking agencies have adopted guidelines for establishing cybersecurity standards, which the Bancorp must adhere to, although it did not discover any material cybersecurity incidents in 2020[156] - The Consumer Financial Protection Bureau (CFPB) has broad rulemaking and enforcement powers affecting the Bancorp, particularly regarding consumer financial protection laws[157] - The Bancorp's operations may be subject to additional compliance burdens due to potential changes in federal preemption standards as per the Dodd-Frank Act[158] - The federal banking regulators have issued guidance on cybersecurity in response to recent cyberattacks, emphasizing the need for robust security measures and business continuity programs[156]

Financial Performance - Net income for the quarter ended September 30, 2020, was $4.9 million, resulting in earnings per common share of $1.42, with a return on average assets (ROA) of 1.33% and return on average stockholders' equity (ROE) of 13.42%[99] - For the nine months ended September 30, 2020, the Bancorp reported net income of $13.2 million, an increase of $3.3 million (34.0%) compared to $9.8 million for the same period in 2019[170] - The efficiency ratio improved to 59.1% for the quarter ended September 30, 2020, compared to 67.7% for the same quarter in 2019, primarily due to increased noninterest income and net interest income[168] - Total noninterest income for the quarter ended September 30, 2020, was $4.855 million, an increase of $1.958 million (67.6%) compared to $2.897 million for the same quarter in 2019[165] - Total noninterest income rose to $13,447 thousand for the nine months ended September 30, 2020, a 65.3% increase from $8,135 thousand in 2019[176] Asset and Loan Growth - As of September 30, 2020, NorthWest Indiana Bancorp had total assets of $1.5 billion, total loans receivable of $975.9 million, and total deposits of $1.3 billion[99] - Total assets increased by $152.3 million (11.5%) to $1.4 billion as of September 30, 2020, compared to $1.2 billion at December 31, 2019[118] - Net loans receivable rose to $975.9 million at September 30, 2020, up from $906.9 million at December 31, 2019, marking a growth of 7.6%[119] - Total loans reached $975,940 thousand at September 30, 2020, up from $906,869 thousand at December 31, 2019, marking an increase of 7.6%[137] Loan Quality and Risk - Non-performing loans increased to $15.06 million (1.54% of total loans) at September 30, 2020, compared to $7.37 million (0.81% of total loans) at December 31, 2019[123] - The Bancorp's non-performing loans to total assets ratio increased to 1.02% at September 30, 2020, compared to 0.55% at December 31, 2019[123] - The Bancorp's substandard loans totaled $17.46 million at September 30, 2020, compared to $8.09 million at December 31, 2019, indicating a rise of 115%[124] - The Bancorp's impaired loans totaled $12.32 million at September 30, 2020, compared to $7.22 million at December 31, 2019, reflecting an increase of 70%[128] Deposits and Funding - Total deposits grew to $1,280,656 thousand, a rise of 10.9% from $1,154,370 thousand at December 31, 2019, driven by management's sales efforts and participation in the PPP[144] - The total loans receivable to total deposits ratio was 76.2% at September 30, 2020, down from 78.6% at December 31, 2019[121] - The Bancorp's end-of-period borrowed funds increased by 22.1% to $31,145 thousand as of September 30, 2020, compared to $25,499 thousand at December 31, 2019[145] Interest Income and Margin - The net interest income for the quarter ended September 30, 2020, was $11.7 million, an increase of $893 thousand (8.3%) from $10.8 million in the same quarter of 2019[160] - The Bancorp's net interest margin on earning assets was 3.41% for the quarter ended September 30, 2020, compared to 3.56% for the same quarter in 2019[160] - Net interest income for the nine months ended September 30, 2020, was $33.8 million, an increase of $1.2 million (3.6%) compared to $32.6 million for the same period in 2019[171] Tax and Expenses - Income tax expenses for the quarter ended September 30, 2020, totaled $1.0 million, an increase of $659 thousand (187.7%) compared to $351 thousand for the same quarter in 2019[169] - Total noninterest expense increased to $29,544 thousand for the nine months ended September 30, 2020, reflecting a 5.6% rise from $27,982 thousand in 2019[178] - Compensation and benefits expenses rose by 10.6% to $15,851 thousand in 2020, driven by talent management and retention efforts[178] Capital and Liquidity - The Bancorp's Common Equity Tier 1 Capital ratio was 12.8% as of September 30, 2020, significantly exceeding the minimum requirement of 4.5%[157] - The Bancorp's total capital to risk-weighted assets ratio was 13.9% as of September 30, 2020, well above the required minimum of 8.0%[157] - The Bancorp's liquidity position remains strong, with sufficient on-balance sheet liquidity and contingent liquidity sources to meet funding demand[116] Operational Adjustments - The Bancorp has implemented remote working policies for 50% of its workforce to support social distancing measures during the pandemic[116] - The Bancorp approved 782 applications totaling $91.5 million under the U.S. Small Business Administration's Paycheck Protection Program, with an average loan size of approximately $117,000, aimed at retaining 10,758 employees[108]