Finward Bancorp(FNWD) - 2019 Q3 - Quarterly Report

Financial Performance - Net income for Q3 2019 was $3.6 million, translating to $1.04 earnings per common share, while net income for the nine months ended September 30, 2019, was $9.8 million or $2.88 per share[92]. - The Bancorp reported net income of $9.8 million for the nine months ended September 30, 2019, an increase of $3.1 million (46.7%) from $6.7 million for the same period in 2018[141]. - The Bancorp reported net income of $3.6 million for the quarter ended September 30, 2019, an increase of $2.0 million, or 120.2%, compared to the same quarter in 2018[130]. Asset and Loan Growth - As of September 30, 2019, total assets reached $1.3 billion, with total loans receivable at $904.3 million and total deposits at $1.2 billion[92]. - Total assets increased by $234.3 million (21.4%) during the nine months ended September 30, 2019, primarily due to the acquisition of AJSB and internal growth[93]. - Total loans reached $904.273 million, up from $764.400 million at December 31, 2018, indicating a growth of 18.3%[109]. - Net loans receivable grew to $895.1 million, up from $756.4 million at the end of 2018, with residential real estate loans increasing to $297.8 million (32.9% of total loans)[94]. Deposits and Funding - The Bancorp's total deposits grew to $1.152 billion, a 23.9% increase from $929.786 million at December 31, 2018, primarily due to the acquisition of AJSB[114]. - Total deposits increased to $1,146.053 million for the quarter ended September 30, 2019, compared to $883.405 million for the same period in 2018[134]. - Total borrowed funds decreased to $30.931 million from $54.628 million at December 31, 2018, a decline of 43.4%[115]. Non-Performing Loans and Allowance for Loan Losses - Non-performing loans totaled $9.6 million, representing 1.06% of total loans, an increase from 0.90% at the end of 2018[97]. - The increase in nonperforming and substandard loans was attributed to the AJSB acquisition and new commercial business loans[103]. - As of September 30, 2019, the allowance for loan losses (ALL) increased to $9.174 million from $7.962 million at December 31, 2018, representing a growth of 15.2%[109]. - Non-performing loans increased to $9.588 million from $6.916 million at December 31, 2018, reflecting a rise of 38.4%[109]. Income and Expense Analysis - Net interest income for the quarter ended September 30, 2019, was $10.8 million, an increase of $1.8 million, or 19.7%, from $9.0 million in the same quarter of 2018[131]. - Total noninterest income for the quarter ended September 30, 2019, was $2.897 million, an increase of $674 thousand (30.3%) from $2.223 million in the same quarter of 2018[137]. - Total noninterest expense increased to $27,982 thousand for the nine months ended September 30, 2019, compared to $22,930 thousand in 2018, representing a rise of 22.0%[150]. - Compensation and benefits expenses rose by 19.0% to $14,333 thousand in 2019 from $12,045 thousand in 2018, primarily due to acquisitions[150]. Capital Ratios and Dividends - The Bancorp's Common Equity Tier 1 Capital ratio was 11.7% as of September 30, 2019, exceeding the minimum required ratio of 4.5%[126]. - The Bancorp's total capital to risk-weighted assets ratio was 12.7% as of September 30, 2019, exceeding the minimum requirement of 8.0%[126]. - The Bancorp declared a third quarter dividend of $0.31 per share, paid on October 3, 2019[129]. Efficiency and Yield Metrics - The efficiency ratio improved to 67.7% for the quarter ended September 30, 2019, compared to 80.59% for the same quarter in 2018, driven by increased interest income[139]. - The efficiency ratio improved to 68.7% for the nine months ended September 30, 2019, down from 72.6% in 2018, attributed to increased interest income[150]. - The weighted-average yield on interest-earning assets was 4.40% for the quarter ended September 30, 2019, compared to 4.26% for the same quarter in 2018[131]. Future Outlook - The Bancorp's forward-looking statements indicate expectations for continued growth in interest income and potential merger and acquisition activities[153].