Finward Bancorp(FNWD) - 2019 Q2 - Quarterly Report

Financial Performance - Net income for the quarter ended June 30, 2019, was $4.0 million, resulting in earnings per common share of $1.17, with a return on average assets (ROA) of 1.27% and return on average stockholders' equity (ROE) of 12.77%[96] - The Bancorp reported net income of $4.0 million for the quarter ended June 30, 2019, an increase of $1.5 million (60.2%) compared to $2.5 million for the same quarter in 2018[141] - The net income for the six months ended June 30, 2019, was $6.2 million, an increase of $1.2 million (23.1%) compared to $5.1 million for the same period in 2018[151] Asset and Loan Growth - As of June 30, 2019, the Bancorp had total assets of $1.3 billion, total loans receivable of $894.3 million, and total deposits of $1.1 billion[96] - Total assets increased by $213.2 million (19.4%) during the six months ended June 30, 2019, primarily due to the acquisition of AJSB and internal growth[103] - The Bancorp's net loans receivable totaled $885.5 million at June 30, 2019, up from $756.4 million at December 31, 2018[104] - Total assets as of June 30, 2019, were $1,265,132 thousand, compared to $944,348 thousand as of June 30, 2018[144] - Total assets increased to $1,247,870 thousand as of June 30, 2019, compared to $938,738 thousand as of June 30, 2018, representing a growth of 32.9%[154] Deposits and Funding - Total deposits reached $1,127,121 thousand as of June 30, 2019, representing a year-to-date increase of $197,335 thousand or 21.2%[125] - Total deposits increased to $1,097,283 thousand for the quarter ended June 30, 2019, from $786,207 thousand in the same quarter of 2018[144] - The Bancorp's total borrowed funds decreased by $16,000 thousand (29.3%) to $38,628 thousand as of June 30, 2019, compared to $54,628 thousand at December 31, 2018[127] Non-Performing Loans and Loan Losses - Non-performing loans increased to $9.9 million (1.11% of total loans) as of June 30, 2019, compared to $6.9 million (0.90% of total loans) at December 31, 2018[108] - Total impaired loans increased to $8,622 thousand as of June 30, 2019, compared to $5,782 thousand in 2018, reflecting a significant rise of 49.5%[112] - The provision for loan losses for the six months ended June 30, 2019, was $828 thousand, up from $638 thousand in the same period of 2018, indicating a 29.8% increase[118] - Non-performing loans totaled $9,900 thousand as of June 30, 2019, up from $6,916 thousand in 2018, marking a 43.0% increase[120] - The increase in commercial business loans contributed $1,200 thousand to the rise in non-performing loans as of June 30, 2019[114] Income and Expense Analysis - Net interest income for the quarter ended June 30, 2019 was $11.2 million, an increase of $3.3 million (42.2%) from $7.9 million for the same quarter in 2018[142] - Total noninterest income for the quarter ended June 30, 2019, was $2,669 thousand, an increase of $466 thousand (21.2%) compared to $2,203 thousand in the same quarter of 2018[146] - Noninterest income totaled $5,238 thousand for the six months ended June 30, 2019, a 12.6% increase from $4,652 thousand in 2018, driven by a 30.8% rise in fees and service charges[156] - Noninterest expense increased by 34.9% to $18,713 thousand for the six months ended June 30, 2019, up from $13,873 thousand in 2018, primarily due to higher compensation and benefits related to acquisitions[159] Capital and Ratios - The Common Equity Tier 1 Capital ratio was 11.5% at June 30, 2019, exceeding the minimum required ratio of 4.5%[138] - The Bancorp's stockholders' equity increased by $27.3 million (27.0%) during the six months ended June 30, 2019, primarily due to net income and the issuance of shares for the acquisition of AJSB[132] - The efficiency ratio improved to 60.7% for the quarter ended June 30, 2019, down from 68.5% for the same quarter in 2018, primarily due to increased interest income[149] - The efficiency ratio for the six months ended June 30, 2019, was 69.2%, compared to 68.1% for the same period in 2018, reflecting increased noninterest expenses[159] Acquisitions - The Bancorp completed the acquisition of AJSB on January 24, 2019, with an implied valuation of approximately $32.9 million, expanding its banking center network to 22 locations[97][99] - The Bancorp issued 416,478 shares of common stock and paid approximately $15.7 million in cash to AJSB stockholders as part of the acquisition[99] - The acquisition of First Personal in July 2018 expanded the Bancorp's retail banking network to 19 banking centers, marking its entry into the South Suburban Chicagoland market[100] Forward-Looking Statements - The company cautions that forward-looking statements regarding future business prospects and financial performance are subject to risks and uncertainties that may cause actual results to differ materially[162]