Finward Bancorp(US:FNWD)2025-11-12 21:04Financial Performance - Net income for the three months ended September 30, 2025, was $3.5 million, resulting in earnings of $0.81 per diluted common share, while net income for the nine months was $6.1 million, or $1.42 per diluted common share[144]. - For the nine months ended September 30, 2025, the company reported net income of $6.1 million, a decrease of $3.9 million (39.1%) compared to $10.0 million for the same period in 2024[219]. - The company reported net income of $3.5 million for the quarter ended September 30, 2025, compared to $606 thousand for the same quarter in 2024, representing an increase of $2.9 million[208]. - Net interest income for the quarter ended September 30, 2025, was $14.4 million, an increase of $2.4 million (20.3%) compared to $12.0 million for the same quarter in 2024[211]. - Net interest income for the nine months ended September 30, 2025, was $41.7 million, an increase of $5.9 million (16.4%) compared to $35.8 million for the same period in 2024[224]. - Total non-interest income for the quarter ended September 30, 2025, was $2.913 million, a slight increase of $46 thousand (1.6%) compared to $2.867 million for the same quarter in 2024[214]. - Total non-interest income decreased to $7.8 million for the nine months ended September 30, 2025, a decline of $11.1 million (58.6%) compared to $18.9 million in 2024[226]. Asset and Loan Portfolio - As of September 30, 2025, total assets were $2.1 billion, with loans receivable of $1.5 billion and total deposits of $1.8 billion[144]. - Total assets decreased by $8.0 million (0.39%) during the nine months ended September 30, 2025, with interest-earning assets decreasing by $1.6 million (0.08%)[149]. - The commercial real estate loan portfolio totaled $564.6 million as of September 30, 2025, accounting for 38.4% of the total loan portfolio[150]. - The residential real estate loans were $450.0 million, representing 30.6% of total loans as of September 30, 2025[150]. - Total loans receivable amounted to $1,471.964 million as of September 30, 2025, with a breakdown of $450.007 million in residential real estate and $564.558 million in commercial real estate[154]. - Non-performing loans increased to $13.892 million as of September 30, 2025, representing 0.94% of total loans, up from 0.91% at December 31, 2024[156]. - Special mention loans increased to $28.331 million as of September 30, 2025, from $25.290 million at December 31, 2024[159]. Deposits and Borrowings - As of September 30, 2025, total deposits amounted to $1.75 billion, a decrease of $9.9 million or 0.6% compared to December 31, 2024[170]. - Core deposits totaled $1.2 billion at September 30, 2025, representing 69.3% of total deposits[170]. - Interest-bearing deposits in other financial institutions rose by 61.7% to $84.157 million as of September 30, 2025, from $52.047 million at December 31, 2024[166]. - Borrowings and repurchase agreements totaled $103.4 million at September 30, 2025, a decrease of $1.7 million or 1.6% from December 31, 2024[176]. - The Company had available liquidity of $737.1 million as of September 30, 2025, including borrowing capacity from the FHLB and Federal Reserve facilities[176]. Capital and Equity - The Common Equity Tier 1 Capital ratio was 11.49% as of September 30, 2025, exceeding the minimum required ratio of 4.5%[206]. - The Tier 1 leverage ratio was 8.77% as of September 30, 2025, exceeding the minimum required ratio of 4%[206]. - For the nine months ended September 30, 2025, stockholders' equity increased by $14.1 million, or 9.3%, primarily due to net income of $6.1 million and other comprehensive income of $8.8 million[199]. - The total stockholders' equity increased to $154.5 million as of September 30, 2025, compared to $148.7 million in 2024[224]. Interest Rates and Risk Management - Interest rate risk is identified as the primary source of market risk, with a focus on managing the size and mix of the balance sheet[178][180]. - Under a +400 basis points interest rate scenario, the Economic Value of Equity (EVE) is projected to decrease by 33.3%[188]. - The Company forecasts that a 100 to 300 basis points increase in interest rates would positively impact net interest income over the next twelve months[189]. - The average rate on interest-bearing demand deposits decreased to 0.74% in 2025 from 0.91% in 2024[175]. - The interest rate spread increased to 2.57% for the nine months ended September 30, 2025, compared to 2.05% for the same period in 2024[224]. Regulatory Compliance - The termination of the Consent Order on August 6, 2025, followed the Bank's successful resolution of deficiencies in compliance with the Bank Secrecy Act[146]. - The memorandum of understanding (MOU) with the FDIC and DFI requires the Bank to refrain from paying cash dividends without prior regulatory approval[147]. - The Company is evaluating the long-term impact of the One Big Beautiful Bill Act (OBBBA) on its business and financial condition[145]. Operational Efficiency - The Company originated $29.3 million in new fixed-rate mortgage loans for sale during the nine months ended September 30, 2025, compared to $22.5 million in the same period of 2024[154]. - Net gains from mortgage loan sales totaled $873 thousand for the nine months ended September 30, 2025, compared to $810 thousand for the same period in 2024[154]. - Cash provided by operating activities totaled $2.2 million for the nine months ended September 30, 2025, compared to cash used of $1.0 million for the same period in 2024[197]. - Cash flows from investing activities totaled $44.2 million for the nine months ended September 30, 2025, compared to $43.0 million for the same period in 2024[197]. - The company declared a quarterly dividend of $0.12 per share on August 15, 2025, paid on September 12, 2025[208].