FNWD 10-K & 10-Q changes, risk factors and insider trading
Finward Bancorp · Nasdaq · Savings Institution, Federally Chartered · CIK 919864 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Due to the development of new technologies and regulatory actions encouraging the use of these technologies, consumers may decide not to use banks to complete their financial transactions.”
New heading “The use of, or inability to use, artificial intelligence by us, our customers, and our shareholders presents risks and challenges that may adversely impact our business and operating results or the business and operating results of our customers and vendors.”
Removed heading “Potential acquisitions may disrupt our business and dilute stockholder value.”
Removed heading “Regulatory changes to diversity, equity, and inclusion (“DEI”) and environmental, social, and governance (“ESG”) practices may adversely impact our reputation, compliance costs, and business operations.”
Removed heading “Acquisitions and the addition of branch facilities may not produce revenue enhancements or cost savings at levels or within timeframes originally anticipated and may result in unforeseen integration difficulties and dilution to existing shareholder value.”
Largest changes
“Failure to align our DEI and ESG efforts with the current legal framework could result in reputational damage, legal challenges, and adverse impacts on our operations. Government investigations, enforcement actions, or private litigation challenging our DEI- and ESG-related policies could lead to financial penalties, increased legal costs, and potential restrictions on our ability to engage in government contracting. Moreover, various private third-party organizations continue to evaluate companies based on ESG and DEI practices. …”see in full comparison
“The use of, or inability to use, artificial intelligence by us, our customers, and our shareholders presents risks and challenges that may adversely impact our business and operating results or the business and operating results of our customers and vendors.”see in full comparison
“Our customers also may use AI tools in their personal or business activities without our knowledge, and the providers of these tools may not meet the evolving regulatory or industry standards for privacy and data protection. Consequently, this may inhibit our or our customers’ ability to uphold an appropriate level of service and data privacy. …”see in full comparison
“Acquisitions and the addition of branch facilities may not produce revenue enhancements or cost savings at levels or within timeframes originally anticipated and may result in unforeseen integration difficulties and dilution to existing shareholder value.”see in full comparison
“Regulatory changes to diversity, equity, and inclusion (“DEI”) and environmental, social, and governance (“ESG”) practices may adversely impact our reputation, compliance costs, and business operations.”see in full comparison
“Cybersecurity threat actors may utilize AI tools to automate and enhance cybersecurity attacks against us. We utilize software and platforms designed to detect such cybersecurity threats, including AI-based tools, but these threats could become more sophisticated and harder to detect and counteract, which may pose significant risks to our data security and systems. Such cybersecurity attacks, if successful, could lead to data breaches, loss of confidential or sensitive information, and financial or reputational harm.”see in full comparison
Full comparison: every changed paragraph (34)
As market interest rates increased during 2022 and continued into the early months of 2023, the Company experienced increased unrealized losses within its investment portfolio. The Company’s investment portfolio consists of federal funds, interest bearing balances in other financial institutions, U.S. government securities, U.S. Treasury securities, federal agency obligations, obligations of state and local municipalities, mortgage-backed securities and corporate securities. All of the instruments held in the Company’s investment portfolio are designated as available-for-sale, and many of these instruments are particularly sensitive to interest rate fluctuations, especially long-term fixed-income securities, including U.S. Treasury notes and bonds and corporate and municipal bonds. As of December 31, 2024,2025, the Company held approximately $214.7$201.2 million of municipal securities within the investment portfolio, which comprised approximately 64.4%63.6% of the portfolio, and approximately $109.3$104.7 million of collateralized mortgage obligations and residential mortgage-backed securities within the portfolio, which comprised approximately 32.8%33.1% of the portfolio. From December 31, 20232024 to December 31, 2024,2025, the investment portfolio experienced a reduction in unrealized losses of approximately $9.0$21.6 million. The increasedecrease in unrealized losses is reflected in Accumulated Other Comprehensive Income (Loss) (AOCI) on the Company’s balance sheet and reducesincreases the Company’s book capital and tangible common equity ratio. However, unrealized losses do not affect the Company’s regulatory capital ratios.
Management continues to actively monitor the investment portfolio and may sell securities from the portfolio before maturity in order to take advantage of restructuring opportunities.opportunities, which would include reinvestment of sale proceeds at higher rates of return, improving duration or improving interest rate risk exposure. That said, it is unlikely the Company will be required to sell the securities before recovery of their amortized cost bases, which may be at maturity. However, the Company’s access to liquidity sources could be affected by unrealized losses if securities within the investment portfolio must be sold at a loss or tangible capital ratios decline from an increase in unrealized losses or realized credit losses.
Peoples Bank’s loan portfolio includes a significant amount of loans with fixed rates of interest. At December 31, 2024,2025, $712.7$636.9 million, or 47.3%44.0% of the Bank’s total loans receivable had fixed interest rates. The Bank offers adjustable rate mortgage (ARM) loans and fixed-rate loans. Unlike ARM loans, fixed-rate loans carry the risk that, because they do not reprice to market interest rates, their yield may be insufficient to offset increases in the Bank’s cost of funds during a rising interest rate environment. Accordingly, a material and prolonged increase in market interest rates could be expected to have a greater adverse effect on the Bank’s net interest income compared to other institutions that hold a materially larger portion of their assets in ARM loans or fixed-rate loans that are originated for committed sale in the secondary market.
Our ability to sell mortgage loans readily is dependent upon the availability of an active secondary market for single-family mortgage loans, which in turn depends in part upon the continuation of programs currently offered by Fannie Mae, Freddie Mac, and Ginnie Mae (the “Agencies”) and other institutional and non-institutional investors. These entities account for a substantial portion of the secondary market in residential mortgage loans. Some of the largest participants in the secondary market, including the Agencies, are government-sponsored enterprises whose activities are governed by federal law. Any future changes in laws that significantly affect the activity of such government-sponsored enterprises could, in turn, adversely affect our operations.
In September 2008, Fannie Mae and Freddie Mac were placed into conservatorship by the U.S. government. Although to date, the conservatorship has not had a significant or adverse effect on our operations, and during 2010 and 2012 the Federal Housing Finance Agency indicated that the Treasury Department is committed to funding Fannie Mae and Freddie Mac to levels needed in order to sufficiently meet their funding needs, it is currently unclear whether further changes would significantly and adversely affect our operations. In addition, our ability to sell mortgage loans readily is dependent upon our ability to remain eligible for the programs offered by the Agencies and other institutional and non-institutional investors. Our ability to remain eligible may also depend on having an acceptable peer-relative delinquency ratio for the Federal Housing Administration (“FHA”) and maintaining a delinquency rate with respect to Ginnie Mae pools that are below Ginnie Mae guidelines.
The Bank relies heavily on internal and outsourced digital technologies, communications, and information systems to conduct its business. As our reliance on technology systems increases, the potential risks of technology-related operation interruptions in our customer relationship management, general ledger, deposit, loan, or other systems or the occurrence of cyber incidents alsoincreases increases.within the industry. Cyber incidents can result from deliberate attacks or unintentional events including (i) unauthorized access to digital systems for purposes of misappropriating assets or sensitive information, corrupting data, or causing operational disruptions; (ii) denial-of- servicedenial-of-service attacks on websites; or (iii) intelligence gathering and social engineering aimed at obtaining information. The occurrence of operational interruption, cyber incident,incidents, or a deficiency in the cyber security of our technology systems (internal or outsourced) could negatively impact our financial condition or results of operations.
We have policies and procedures expressly designed to prevent or limit the effect of a failure, interruption, or security breach of our systems and maintain cyber security insurance. However, such policies, procedures, or insurance may prove insufficient to prevent, repel, or mitigate a cyber incident. Significant interruptions to our business from technology issues could result in expensive remediation efforts and distraction of management. Although we have not experienced any material losses related to a technology-related operational interruption or cyber-attack, there can be no assurance that such failures, interruptions, or security breaches will not occur in the future or, if they do occur, that the impact will not be substantial.
Potential acquisitions may disrupt our business and dilute stockholder value.
We periodically evaluate merger and acquisition opportunities and conduct due diligence activities related to possible transactions with other financial institutions and financial services companies. We generally seek merger or acquisition partners that are culturally similar and possess either significant market presence or have potential for improved profitability through financial management, economies of scale, or expanded services. Acquiring other banks, businesses, or branches involves various risks commonly associated with acquisitions, including, among other things:
As a result, merger or acquisition discussions and, in some cases, negotiations may take place and future mergers or acquisitions involving the payment of cash or the issuance of our debt or equity securities may occur at any time. Acquisitions typically involve the payment of a premium over book, and, therefore, some dilution of our tangible book value and net income per common share may occur in connection with any future transaction. To the extent we were to issue additional shares of common stock in any such transaction, our current shareholders would be diluted and such an issuance may have the effect of decreasing our stock price, perhaps significantly. Furthermore, failure to realize the expected revenue increases, cost savings, increases in geographic or product presence, and/or other projected benefits from an acquisition could have a material adverse effect on our financial condition and results of operations. In addition, merger and acquisition costs incurred by the Company may temporarily increase operating expenses.
The Company and Bank are subject to extensive regulation and oversight, including with respect to the Order and MOU.
On NovemberAugust 7,9, 2023,2024, the Bank entered into a Stipulation and Consent to the Issuance of a Consent OrderMOU with its bank regulatory agencies, the FDIC and DFI,DFI. consentingThe MOU is an informal administrative agreement pursuant to which the issuanceBank has agreed to take various actions and comply with certain requirements to enhance certain areas of a consent order (the “Order”) relating to the Bank’s compliance with the Bank Secrecy Act and its implementing regulations (collectively, the “BSA”). In consenting to the issuance of the Order, the Bank did not admit or deny any charges of unsafe or unsound banking practices or violations of law or regulation relating to its BSA compliance.operations. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – RegulatoryRecent Developments Regarding the Company and the Bank” below for certain disclosures regarding the Order and MOU. The Order has resulted and is expected to continue to result in additional non-interest BSA compliance expenses for the Bank and the Company. It also may have the effect of limiting or delaying the Bank’s and the Company’s ability to obtain regulatory approval for certain expansionary activities, to the extent desired by the Company. Our failure to comply with the Order or MOU may result in additional regulatory action, including civil money penalties against the Bank and its officers and directors or enforcement through court proceedings, which could have a material and adverse effect on our business, results of operations, financial condition, cash flows, and stock price.
Regulatory changes to diversity, equity, and inclusion (“DEI”) and environmental, social, and governance (“ESG”) practices may adversely impact our reputation, compliance costs, and business operations.
In light of the recent executive order titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” which revokes previous mandates promoting DEI and directs federal agencies to combat “illegal DEI” practices in the private sector, many companies, including the Company, must reassess their ESG strategies to ensure compliance with the evolving regulatory environment. The order signals a shift in federal oversight and enforcement priorities, potentially affecting internal policies, hiring practices, supplier diversity programs, and corporate governance frameworks.
The executive order rescinds prior directives, such as Executive Order 11246, which required affirmative action and non-discriminatory practices by federal contractors. As a result, federal agencies may reevaluate existing contracts, scrutinize hiring and promotion policies, and take enforcement actions against companies perceived to be engaging in practices that do not align with the revised federal standards. Additionally, new guidance or rulemaking stemming from the executive order could impose restrictions on voluntary DEI initiatives, training programs, or supplier diversity efforts. These developments may necessitate changes to our internal policies, reporting obligations, and public disclosures, creating operational and compliance challenges.
Failure to align our DEI and ESG efforts with the current legal framework could result in reputational damage, legal challenges, and adverse impacts on our operations. Government investigations, enforcement actions, or private litigation challenging our DEI- and ESG-related policies could lead to financial penalties, increased legal costs, and potential restrictions on our ability to engage in government contracting. Moreover, various private third-party organizations continue to evaluate companies based on ESG and DEI practices. Unfavorable ratings from these entities could influence investor decisions, limit access to capital, and generate negative sentiment among stakeholders.
While the executive order aims to eliminate specific DEI programs, investors, customers, and other stakeholders may still expect transparency and commitment to broader ESG goals, including workforce diversity, community engagement, and responsible corporate governance. Companies that scale back DEI initiatives to comply with federal mandates may face backlash from institutional investors, advocacy groups, and employees who view such actions as a retreat from social responsibility commitments. Additionally, inconsistencies between federal and state-level DEI policies may create further complexities, as certain states continue to mandate affirmative action or corporate diversity disclosures. Moreover, the rapid pace of change in legal frameworks, regulatory guidance, and enforcement priorities resulting from the recent Presidential transition yields considerably increased uncertainty and compounds the difficulty of establishing and maintaining compliance.
Adapting to the recent regulatory changes is crucial to maintaining our reputation, ensuring operational continuity, and meeting stakeholder expectations in the evolving ESG landscape. Noncompliance or perceived noncompliance with the executive order and related regulatory guidance could expose us to increased regulatory scrutiny, litigation risks, and limitations on business opportunities. At the same time, misalignment with investor and stakeholder expectations regarding ESG and DEI commitments could impair our brand value, reduce employee engagement and retention, and negatively impact our stock performance. Given these factors, we must carefully assess and adjust our policies, disclosures, and risk mitigation strategies to navigate the shifting legal and business environment effectively.
While economic conditions have remained relatively stable in spite of these headwinds, significant challenges remain, including the continued aggregate effect of inflation levels experienced in recent years and uncertainty related to government spending levels and federal budget deficits, as well as the potential effect of changes in trade policy and tariffs under the new Trump administration. As a result, there can be no assurance that economic conditions will continue on their current course. Market stress could have a material adverse effect on the credit quality of our loans, and therefore, our financial condition and results of operations as well as other potential adverse impacts including:
The banking and financial services business in our market areas is highly competitive. Our competitors include large regional banks, local community banks, savings and loan associations, securities and brokerage companies, mortgage companies, insurance companies, finance companies, money market mutual funds, credit unions, neo-banks (a digital or mobile-only bank that exists without any physical bank branches), and other non- banknon-bank financial and digital service providers, many of which have greater financial, marketing, and technological resources than us. Many of these competitors are not subject to the same regulatory restrictions that we are and may be able to compete more effectively as a result.
Also, technology and other changes have lowered barriers to entry and made it possible for customers to complete financial transactions using neo-banks, non-banks, and financial technology (“FinTech”) companies that historically have involved banks at one or both ends of the transaction. These entities now offer products and services traditionally provided by community banks and often at lower costs. The wide acceptance of Internet- basedInternet-based commerce has resulted in a number of alternative payment processing systems, deposit, and lending platforms in which banks play only minor roles. For example, consumers can maintain funds that would have historically been held as bank deposits in brokerage accounts or mutual funds. Consumers can also complete transactions such as paying bills and/or transferring funds directly without the assistance of banks. Use of emerging alternative payment platforms, such as Apple Pay or Bitcoin or other cryptocurrencies, can alter consumer credit card behavior and consequently impact our interchange fee income.
Due to the development of new technologies and regulatory actions encouraging the use of these technologies, consumers may decide not to use banks to complete their financial transactions.
Technology and other changes are allowing parties to complete financial transactions through alternative methods that historically have involved banks. For example, consumers can now maintain funds that would have historically been held as bank deposits in brokerage accounts, mutual funds, or general-purpose reloadable prepaid cards. Consumers can complete transactions, such as paying bills and/or transferring funds directly without the assistance of banks. Transactions utilizing digital assets, including cryptocurrencies, stablecoins, and other similar assets, have increased substantially over the course of the last several years. For example, the enactment of the Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025 (GENIUS Act) provides a legal framework for stablecoins to be issued in the United States, which may allow new and existing competitors to compete for funds that may have otherwise been deposited with banks, such as the Bank.
Certain characteristics of digital asset transactions, such as the speed with which such transactions can be conducted, the ability to transact without the involvement of regulated intermediaries, the ability to engage in transactions across multiple jurisdictions, and the anonymous nature of the transactions, are appealing to certain consumers notwithstanding the various risks posed by such transactions as illustrated by the current and ongoing market volatility. Accordingly, digital asset service providers, which at present are not subject to supervision and regulation comparable to that which is faced by banking organizations and other financial institutions, have become active competitors for our customers’ banking business. The Trump Administration, through executive actions and public announcements, has established a more relaxed regulatory framework for cryptocurrencies, digital assets, and financial technology firms, and created a more favorable environment for those asset classes and firms.
The process of eliminating banks as intermediaries, known as disintermediation, could result in the loss of fee income, as well as the loss of customer deposits and the related income generated from those deposits. On October 22, 2024, the CFPB adopted a final rule regarding personal financial data rights that is designed to promote “open banking.” The final rule requires, among other things, that data providers, including any financial institution, make available to consumers and certain authorized third parties upon request certain covered transaction, account, and payment information. However, in August 2025, the CFPB issued an advanced notice of proposed rulemaking to reconsider its final rule and, in October 2025, a district court issued a preliminary injunction preventing the CFPB from enforcing the final rule until the CFPB has completed its reconsideration of the rule. A final rule, if implemented, could lead to greater competition for products and services among banks and nonbanks alike. The loss of these revenue streams and the lower cost of deposits as a source of funds could have a material adverse effect on our financial condition and results of operations.
The Company also is experiencing an increase in competition to acquire other banks, due to the overall strength of financial institutions and their high capital levels. In addition, credit unions and FinTech companies are now actively pursuing small bank acquisitions. Increased competition for bank acquisitions may slow the Company’s ability to grow earning assets at comparable historical growth rates.
Acquisitions and the addition of branch facilities may not produce revenue enhancements or cost savings at levels or within timeframes originally anticipated and may result in unforeseen integration difficulties and dilution to existing shareholder value.
We regularly explore opportunities to establish branch facilities and acquire other banks or financial institutions. New or acquired branch facilities and other facilities may not be profitable. We may not be able to correctly identify profitable locations for new branches. The costs to start up new branch facilities or to acquire existing branches, and the additional costs to operate these facilities, may increase our noninterest expense and decrease earnings in the short term. It may be difficult to adequately and profitably manage growth through the establishment of these branches. In addition, we can provide no assurance that these branch sites will successfully attract enough deposits to offset the expenses of operating these branch sites. Any new or acquired branches will be subject to regulatory approval, and there can be no assurance that we will succeed in securing such approvals.
The use of, or inability to use, artificial intelligence by us, our customers, and our shareholders presents risks and challenges that may adversely impact our business and operating results or the business and operating results of our customers and vendors.
We may use generative AI tools in our operations. If our competitors and peers use AI tools to optimize operations and we fail to utilize AI tools in a comparable manner, we may be competitively disadvantaged. However, while AI tools may facilitate optimization and operational efficiencies, they also have the potential for inaccuracy, bias, infringement, or misappropriation of intellectual property, and risks related to data privacy and cybersecurity. The use of AI tools may introduce errors or inadequacies that are not easily detectable, including deficiencies, inaccuracies, or biases in the data used for AI training, or in the content, analyses, or recommendations generated by AI applications. The results of such errors or inadequacies may adversely affect our business, financial condition, and results of operations. The legal requirements relating to AI continue to evolve and remain uncertain, including how legal developments could impact our business and ability to enforce our proprietary rights or protect against infringement of those rights.
Cybersecurity threat actors may utilize AI tools to automate and enhance cybersecurity attacks against us. We utilize software and platforms designed to detect such cybersecurity threats, including AI-based tools, but these threats could become more sophisticated and harder to detect and counteract, which may pose significant risks to our data security and systems. Such cybersecurity attacks, if successful, could lead to data breaches, loss of confidential or sensitive information, and financial or reputational harm.
Our customers also may use AI tools in their personal or business activities without our knowledge, and the providers of these tools may not meet the evolving regulatory or industry standards for privacy and data protection. Consequently, this may inhibit our or our customers’ ability to uphold an appropriate level of service and data privacy. If we, our customers, or other third parties with which we conduct business experience an actual or perceived breach of privacy or security incident due to the use of AI, we may be adversely impacted, lose valuable intellectual property or confidential information, and incur harm to our reputation and the public perception of the effectiveness of our security measures.
In addition, investors, analysts, and other market participants may use AI tools to process, summarize, or interpret our financial information or other data about us. The use of AI tools in financial and market analysis may introduce risks similar to those described above, including an inaccurate interpretation of our financial or operational performance or market trends or conditions, which in turn could result in inaccurate conclusions or recommendations.
Our inability to adopt new technological capabilities and enhancements, including AI and machine learning, may put us at a competitive disadvantage or cause us to miss opportunities to innovate and achieve efficiencies in our operations which could adversely impact our business, reputation, results of operations, and financial condition.
Management's Discussion & Analysis (MD&A)
New heading “Non-GAAP Financial Measures”
Removed heading “Results of Operations –”
Largest changes
“Our primary sources of liquidity are deposits, principal and interest payments on loans and securities, and proceeds from calls, maturities, and sales of securities, subject to market conditions. While maturities and scheduled amortization of loans and securities are predictable sources of liquidity, deposit flows and loan and securities prepayments are greatly influenced by general interest rates, economic conditions, and competition. …”see in full comparison
“Net interest income for 2024, was $48.4 million, a decrease of $6.1 million (11.2%) from $54.6 million for 2023. The decreased net interest margin is primarily the result of elevated short-term interest rates relative to long-term interest rates as part of the Federal Reserve’s response to high inflation and other factors. The compression seen earlier in 2024 has slowed and has begun to reverse in late 2024 due to the Federal Reserve’s actions to reduce Federal Funds rates by 100 basis points, which will reprice our interest-bearing liabilities at lower rates. …”see in full comparison
“Numerous actions have been taken to date by the Bank to strengthen its BSA and anti-money laundering compliance practices, policies, procedures, and controls. In this regard, the Bank began developing corrective actions prior to the entry of the Order and expects that it will be able to undertake and implement all required actions within the time periods specified in the Order. …”see in full comparison
“Although customer deposits remain our preferred funding source, maintaining additional sources of liquidity is part of our prudent liquidity risk management practices. We have the ability to borrow from the FHLB. At December 31, 2025, we had four outstanding advances totaling $45 million and the ability to borrow up to $436.0 million from the FHLB. We also have the ability to borrow from the Federal Reserve Bank of Chicago. At December 31, 2025, we had no outstanding balance from the Federal Reserve Bank of Chicago. …”see in full comparison
“Total borrowed funds were $84.7 million at December 31, 2025 compared to $105.1 million at December 31, 2024, a decrease of $20.4 million or 19.4%. The decrease in borrowings from December 31, 2024, was the result of the maturity of FHLB advances. As of December 31, 2025, 72% of our deposits are fully FDIC insured, and another 7% are further backed by the Indiana Public Deposit Insurance Fund. The Company’s liquidity position remains strong with solid core deposit customer relationships, excess cash, debt securities, and access to diversified borrowing sources. …”see in full comparison
Full comparison: every changed paragraph (92)
Finward Bancorp is a financial holding company registered with the Board of Governors of the Federal Reserve System. Peoples Bank, an Indiana commercial bank, is a wholly-owned subsidiary of the Company. The Company has no other business activity other than being a holding company for the Bank. The Company's earnings are dependent upon the earnings of the Bank. The Bank's earnings are primarily dependent upon net interest margin. The net interest margin is the difference between interest income earned on loans and investments and interest expense paid on deposits and borrowings stated as a percentage of average interest earning assets. The net interest margin is perhaps the clearest indicator of a financial institution's ability to generate core earnings. Fees and service charges, wealth management operations income, gains and losses from the sale of assets, provisions for credit losses, income taxes and operating expenses also affect the Company's profitability.
The following management’s discussion and analysis presents information concerning our financial condition as of December 31, 2025 and December 31, 2024, and the results of operations for the years ended December 31, 2025 and December 31, 2024. At December 31, 2024,2025, the Company had total assets of $2.1$2.0 billion, loans receivable, net of deferred fees and costs, of $1.4 billion and total deposits of $1.8$1.7 billion. The Company's deposit accounts are insured up to applicable limits by the Deposit Insurance Fund (DIF) that is administered by the Federal Deposit Insurance Corporation (FDIC),FDIC, an agency of the federal government. At December 31, 2024, stockholders'Stockholders' equity totaled $151.4$174.7 million,million or 8.6% of total assets, with a book value per share atof $35.10.$40.37. Net income for 2024the year ended December 31, 2025, was $12.1$8.1 million, or $2.84 diluted$1.88 earnings per diluted common share. TheFor returnthe onyear averageended assetsDecember 31, 2025, the ROA was 0.58%,0.39%, while the return on average stockholders’ equityROE was 8.06%.5.10%.
RegulatoryRecent Developments Regarding the Company and the Bank
On July 4, 2025, President Trump signed into law the legislation commonly referred to as the One Big Beautiful Bill Act, which is a sweeping federal reconciliation package that permanently extends and expands key provisions of the 2017 Tax Cuts and Jobs Act, introduces new tax benefits (including elevated standard deductions, higher state-and-local tax (SALT) caps, and no taxation on tips and overtime income for certain workers), and enacts broad reductions in government spending. The OBBBA is a complex revision to the U.S. federal income tax laws with potentially far-reaching consequences. The OBBBA will require subsequent rulemaking in a number of areas. The long-term impact of the OBBBA on the Company, the Bank, our shareholders, and the banking industry in general cannot be reliably predicted at this early stage of the new law’s implementation. Shareholders are urged to consult with their own tax advisors regarding the impact of the OBBBA to them and their acquisition, ownership, and disposition of the Company's common stock. The Company's management continues to evaluate the impact of the OBBBA on the Company, the Bank, and its business, financial condition, and results of operations.
Termination of Consent Order
On August 6, 2025, the FDIC and the DFI terminated the Consent Order issued to the Bank that was effective on November 7, 2023 relating to the Bank's compliance with the Bank Secrecy Act and its implementing regulations. The termination of the Consent Order follows the Bank's successful resolution of the deficiencies in the Bank's BSA compliance and anti-money laundering compliance program which was the subject of the Consent Order.
On November 7, 2023, the Bank entered into a Stipulation and Consent to the Issuance of a Consent Order (the “Stipulation”) with the FDIC and the Indiana Department of Financial Institutions (“DFI”), consenting to the issuance of a consent order (the “Order”) relating to the Bank’s compliance with the Bank Secrecy Act and its implementing regulations (collectively, the “BSA”). In consenting to the issuance of the Order, the Bank did not admit or deny any charges of unsafe or unsound banking practices or violations of law or regulation relating to its BSA compliance. The Order is based on findings of the FDIC and DFI during their joint examination commencing in February 2023 (the “Examination”). Since the completion of the Examination, the board of directors and management of the Company and the Bank have aggressively taken an active role in working to address the findings contained in the Examination and have proactively taken steps to comply with the requirements of the Order prior to its effectiveness, as further discussed below.
Under the terms of the Order, the Bank or its board of directors is required to take certain affirmative actions to comply with the Bank’s obligations under the BSA. These affirmative actions include, but are not limited to, the following: strengthening the board of directors’ oversight of the Bank’s BSA activities; developing, adopting, and implementing a revised BSA compliance program; developing a revised system of internal controls designed to ensure full compliance with the BSA; retaining management qualified to oversee the Bank’s BSA compliance program, including retaining a qualified BSA officer; assessing BSA staffing needs and identifying staff positions and personnel for BSA compliance; developing, adopting, and implementing a revised BSA training program; developing, adopting, and implementing a revised suspicious activity reporting program; implementing a board-approved customer due diligence program, and reviewing and enforcing enhanced customer due diligence and risk assessment procedures; eliminating or correcting certain violations of BSA law and regulations, and correcting BSA program weaknesses; ensuring that all reports required by the BSA are accurately and properly filed; and developing and implementing a written plan to review past account and transaction activity to determine whether suspicious activity was properly identified and reported.
Prior to implementation, certain of the actions required by the Order are subject to review by, and approval or non-objection from, the FDIC and the DFI. The Order will remain in effect and enforceable until it is modified, terminated, suspended, or set aside by the FDIC and DFI.
Numerous actions have been taken to date by the Bank to strengthen its BSA and anti-money laundering compliance practices, policies, procedures, and controls. In this regard, the Bank began developing corrective actions prior to the entry of the Order and expects that it will be able to undertake and implement all required actions within the time periods specified in the Order. These actions include, without limitation, the formation of a Risk Management and Compliance Committee of the board of directors, consisting solely of independent directors, to assist the board in overseeing compliance efforts; enhancing the Bank’s risk management and compliance programs through restructuring reporting lines; improving technology and increasing BSA compliance staff, including hiring senior personnel; making additional investments into processes and system upgrades to strengthen anti-money laundering controls; enhancing education and training of the Bank’s employees responsible for BSA and anti-money laundering compliance; conducting a look-back review of accounts and transaction activity to identify and properly report suspicious activity; and appointing a new Senior Vice President, General Counsel, Corporate Secretary, and Chief Risk Officer of the Company and the Bank with oversight responsibility over the Bank’s enhanced risk management infrastructure, including BSA compliance.
The Bank has incurred and will continue to incur additional non-interest expenses associated with the implementation of the corrective actions set forth in the Order. However, these expenses are not expected to have a material impact on the results of operations or financial condition of the Company or the Bank.
On August 9, 2024, the Bank entered into a memorandum of understanding (“MOU”) with the FDIC and DFI. The MOU is an informal administrative agreement pursuant to which the Bank has agreed to take various actions and comply with certain requirements to enhance certain areas of the Bank’s operations. The MOU documents an understanding among the Bank, the FDIC, and DFI that, among other things, the Bank will: refrain from paying cash dividends without prior regulatory approval and develop and implement certain plans regarding the Bank’s operations, capital, and strategy. The Bank will submit written quarterly progress reports to the FDIC and DFI detailing compliance with the MOU. The MOU will remain in effect until modified or terminated by the FDIC and DFI.
Management does not expect the actions called for by these regulatory actions to have a substantial impact on the Company’s or the Bank’s ongoing day-to-day operations, although they may have the effect of limiting or delaying the Company’sBancorp’s or the Bank’s ability or plans to expand and engage in business combinations.acquisitions.
General
During the year ended December 31, 2024,2025, total assets decreased by $47.6$39.5 million (2.3%1.9%), to $2.1 billion, with interest-earning assets decreasing by $55.8$27.2 million (2.9%1.4%). At both December 31, 2025 and December 31, 2024, interest-earning assets totaled $2.0$1.9 billionbillion. andEarning assets represented 92.3% of total assets. Loans totaled $1.5 billion and represented 79.3% of interest-earning assets, 73.2%92.7% of total assets andat 85.7%December of31, total deposits. The loan portfolio, which is the Company’s largest asset, is a significant source of both interest2025 and fee92.3% income.December 31, 2024.
Loan Portfolio
Loans receivable, net of deferred fees and costs totaled $1.45 billion at December 31, 2025 and $1.51 billion at December 31, 2024. The loan portfolio, which is the Company’s largest asset, is the primary source of both interest and fee income. The Company’s lending strategy emphasizes quality loan growth, product diversification, and competitive and profitable pricing.
The Company’s end-of-period loan balances were as follows:
Our total commercial real estate portfolio (which includes but is comprisednot oflimited to loans secured by office space, medical office space, and mixed-use retail/office space) totaled $555.6 million as of December 31, 2025, compared to $551.7 million as of December 31, 2024, compared to $503.2 million as of December 31, 2023.2024. Given prevailing market conditions such as continued elevated interest rate levels,levels and reduced occupancy as a result of the increase in hybrid work arrangements, and lower commercial real estate valuations, we are carefully monitoring these loans for signs of deterioration in credit quality.
* North American Industry Classification System (NAICS) classification coding for CRE loans began in 2023.
Criteria that may require the Bank to obtain a new appraisal or update the existing value for an existing credit include but are not limited to a change in the discount or capitalization rates for a particular location or property type; occupancy or absorption levels; market trends; and/or expense structure. Regarding the necessity of updated valuations for construction financing, factors considered are material changes in construction delays; cost overruns; or reductions in sales prices / rents. This may be done as a part of a renewal, loan workout or as a part of the usual and customary real estate review process that monitors the risks associated with the Bank’s loan portfolios.
The Company is primarily a portfolio lender. Mortgage banking activities historically have been limited to the sale of fixed rate mortgage loans with contractual maturities greater than 15 years. These loans are identified as held for saleheld-for-sale when originated and sold, on a loan-by-loan basis, in the secondary market. The Company will also retain fixed rate mortgage loans with a contractual maturity greater than 15 years on a limited basis. During the year ended December 31, 2024,2025, the BankCompany originated $36.8$40.9 million in new fixed rate mortgage loans for sale, compared to $38.0$36.8 million during the year ended December 31, 2023.2024. During the year ended December 31, 2024,2025, the Bank originated $27.4$17.8 million in new 1-4 family loans retained in its portfolio, compared to $41.6$27.4 million during the year ended December 31, 2023.2024. These retained loans are primarily construction loans and adjustable-rate loans with a fixed-rate period of 7 years or less, and the Bank continues to sell longer-duration fixed rate mortgages into the secondary market. Net gains realized from the mortgage loan sales totaled $1.2 million for the year ended December 31, 2025, compared to $1.1 million for the year ended December 31, 2024, and 2023.2024. At December 31, 2024,2025, the Company had $1.3$1.1 million in loans that were classified as held for sale,held-for-sale, compared to $340$1.3 thousandmillion at December 31, 2023.2024.
Asset Quality
Non-performing loans include those loans that are 90 days or more past due and accruing and those loans that have been placed on non-accrualnonaccrual status. AtThe DecemberCompany 31,will 2024,at alltimes non-performingmaintain certain loans are also accounted for on aaccrual non-accrualstatus, basis,despite exceptbeing for twenty-nine residential real estate loans totaling $8 thousand which represent loans serviced by third parties that remained accruing and more thanover 90 days past due.due, for short periods of time when management has reason to believe payments are in the process of being received.
The Bancorp'sCompany's nonperformingnon-performing loans are summarized below:
Substandard loans include non-performing loans and potential problem loans, where information about possible credit issues or other conditions causes management to question the ability of such borrowers to comply with loan covenants or repayment terms. No loans were internally classified as doubtful or loss at December 31, 20242025 or December 31, 2023.2024.
The Bancorp'sCompany's substandard loans are summarized below:
The Bancorp'sCompany's special mention loans are summarized below:
A loan is considered collateral dependent when, based on current information and events, it is probable that a borrower will be unable to pay all amounts due according to the contractual terms of the loan agreement.
Purchased loans acquired in a business combination are recorded at estimated fair value on their purchase date. Purchased loans with evidence of credit quality deterioration since origination are considered purchased credit impaired. Expected future cash flows at the purchase date in excess of the fair value of loans are recorded as interest income over the life of the loans if the timing and amount of the future cash flows is reasonably estimable (“accretable yield”). The difference between contractually required payments and the cash flows expected to be collected at acquisition is referred to as the non-accretable difference and represents probable losses in the portfolio. In determining the acquisition date fair value of purchased credit impaired loans, and in subsequent accounting, the Company aggregates these purchased loans into pools of loans by common risk characteristics, such as credit risk rating and loan type. Subsequent to the purchase date, increases in cash flows over those expected at the purchase date are recognized as interest income prospectively. Subsequent decreases to the expected cash flows will generally result in a provision for credit losses.
At times, the Company will modify the terms of a loan to forego a portion of interest or principal or reduce the interest rate on the loan to a rate materially less than market rates, or materially extend the maturity date of a loan as part of a concession to a borrower experiencing financial difficulty. The valuation basis for these modified loans is based on the present value of expected future cash flows; unless consistent cash flows are not present, then the fair value of the collateral securing the loan is the basis for valuation.
The following table shows the amortized cost of loans at December 31, 2024, that were both experiencing financial difficulty and modified during the year ended December 31, 2024, segregated by portfolio segment and type of modification. The percentage of the amortized cost of loans that were modified to borrowers in financial distress as compared to the amortized cost of each segment of financial receivable is also presented below.
There were no commitments to lend additional amounts to the borrowers included in the previous table.
The Company closely monitors the performance of loans and leases that have been modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table shows the performance of such modified loans is presented below.
The borrowers with term extensions have had their maturity dates extended and as a result their monthly payments were reduced.
Upon the Company’s determination that a modified loan has subsequently been deemed uncollectible, the loan or lease is written off. Therefore, the amortized cost of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount.
At December 31, 2024,2025, management is of the opinion that there are no loans, except certain of those discussed above,loans where known information about possible credit problems of borrowers causes management to have serious doubts as to the ability of such borrowers to comply with the present loan repayment terms and which will imminently result in such loans being classified as past due, non-accrualdue or a troubled loan modification.nonaccrual. Management does not presently anticipate that any of the non-performing loans or classified loans would materially affect future operations, liquidity or capital resources.
The provisionACL for credit losses representsis a charge to earnings necessary to establish anvaluation allowance for creditexpected losses that, in management’s evaluation, is appropriate to provide coverage for current expected credit losses inover the estimated life of loan and lease portfolio. The allowance for credit losses isportfolio, increased by the provision for credit losseslosses, and is decreased by charge-offs,charge-offs net of recoveries. A loan is charged off against the allowance by management as a loss when deemed uncollectible, although collection efforts continue and future recoveries onmay prior charge-offs.occur. The determination of the amounts of the ACL and provisions for credit losses is based on management’s current judgments about the credit quality of the loan portfolio with consideration given to all known relevant internal and external factors that affect loan collectability and reasonable and supportable forecasts as of the reporting date. The appropriateness of the current period provision and the overall adequacy of the ACL are determined through a disciplined and consistently applied quarterly process that reviews the Company’s current credit risk within the loan portfolio and identifies the required allowance for credit losses given the current risk estimates.
The ACL provisions take into consideration management’s current judgments about the credit quality of the loan portfolio, loan portfolio balances, changes in the portfolio mix and local economic conditions. In determining the provision for credit losses for the current period, management has considered risks associated with the local economy, changes in loan balances and mix, and asset quality.
A deferred cost reserve is maintained for the portfolio of manufactured home loans that have been purchased. This reserve is available for use for manufactured home loan nonperformance and costs associated with nonperformance. If the segment performs in line with expectations, the deferred cost reserve is paid as a premium to the third party originator of the loan. The unamortized balance of the deferred cost reserve totaled $2.9 million and $3.5 million as of December 31, 2024, and 2023, respectively, and is included in net deferred loan origination cost.
The Bancorp'sCompany's allowanceprovision tofor total(benefit loansfrom) andcredit non-performinglosses loansfor the period ended are summarized below:
The Company's charge-off and recovery information is summarized below:
The ACL provisions take into consideration management’s current judgments about the credit quality of the loan portfolio, loan portfolio balances, changes in the portfolio mix, and local economic conditions. In determining the provision for credit losses for the current period, management has considered risks associated with the local economy, changes in loan balances and mix, and asset quality.
The Company's allowance to total loans and non-performing loans are summarized below:
Investment Portfolio
The December 31, 2024, balance in the ACL account is considered adequate by management after evaluation of the loan portfolio, past experience and current economic and market conditions. While management may periodically allocate portions of the allowance for specific problem loans, the whole allowance is available for any loan charge offs that occur. The allocation of the ACL reflects performance and growth trends within the various loan categories, as well as consideration of the facts and circumstances that affect the repayment of individual loans, and loans which have been pooled as of the evaluation date, with particular attention given to non-performing loans and loans which have been classified as substandard, doubtful or loss. Management has allocated reserves to both performing and non-performing loans based on current information available.
During 2024, net sales of foreclosed real estate totaled $72 thousand and net gain from the 2024 sales totaled $1 thousand.
The primary objective of the Company’s investment portfolio is to provide for the liquidity needs of the Company and to contribute to profitability by providing a stable flow of dependable earnings. Funds are generally invested in federal funds, interest bearing balances in other financial institutions, U.S. government securities, U.S. treasury securities, federal agency obligations, obligations of state and local municipalitiesmunicipalities, mortgage-backed securities, and corporate securities. The securities portfolioportfolio, all of which is designated as available-for-sale, totaled $316.2 million at December 31, 2025, compared to $333.6 million at December 31, 2024, compared to $371.4 million at December 31, 2023, ana decrease of $37.8$17.3 thousandmillion or 10.2%.5.2%. The decrease is attributable to increased unrealized losses withinDuring the portfoliofourth and a salequarter of $15.12025, the Bank incurred $1.6 million in securities duringlosses, attributable to the quarterexecution of securities repositioning transactions. The Bank sold securities with a market value of $26.6 million and unadjusted book yield of 2.59%. The yield on the securities portfolio was 2.37% for the year ended MarchDecember 31, 2025 and 2.39% for the year ended December 31, 2024. At December 31, 2024,2025, the securities portfolio represented 16.9% of interest-earning assets and 15.6% of total assets compared to 17.5% of interest-earning assets and 16.2% of total assets compared to 19.0% of interest-earning assets and 17.6% of total assets at December 31, 2023.2024.
As of December 31, 2024, the Company’s two investments in collateralized debt obligations were in “payment in kind” status. Payment in kind status results in a temporary delay in the payment of interest. As a result of a delay in the collection of the interest payments, management placed these securities on non-accrual status. At December 31, 2024, the cost basis of the two collateralized debt obligations on non-accrual status totaled $2.2 million.
The carryingCompany’s value of the Company’send-of-period investment portfolio and other short-term investments and stock balances at December 31, 2024 and 2023 were as follows:
The net decreaseincrease in interest bearing deposits in other financial institutions is primarily the result of the timing of investmentsloan infundings interestand earning assets relative to thepayoffs, inflow and outflow of deposits, repurchase agreements and borrowed funds.
Deposits
As of December 31, 2025, deposits totaled $1.7 billion, a decrease of $33.6 million or 1.9% compared to December 31, 2024. Core deposits totaled $1.2 billion at December 31, 2025 and on December 31, 2024. Core deposits include checking, savings, and money market accounts and represented 71.1% of the Company’s total deposits at December 31, 2025. On December 31, 2025, balances for certificates of deposit totaled $499.6 million, compared to $560.3 million on December 31, 2024, a decrease of $60.7 million or 10.8%. The decrease in deposits is primarily related to a reduction in certificate of deposit activity and planned adjustments to deposit pricing.
Checking account balances increased $727 thousand and interest bearing savings account balances decreased $21.1 million from year end primarily due to decreases in personal statement savings account balances. Money market account balances increased by $47.4 million from year end due to business and retail consumer preferences. Certificates of deposits decreased by $60.7 million primarily reflecting customer prioritization of more liquid deposit products. We strive to maintain balances of personal and business checking and savings accounts through our focus on quality customer service, the desire of customers to deal with a local bank, the convenience of our branch network and the breadth and depth of our product line.
Non-interest bearing demand accounts comprised 15.5% of total deposits at December 31, 2025 and 15.0% of total deposits at December 31, 2024. Interest bearing demand accounts, including money market and savings accounts, comprised 55.6% of total deposits December 31, 2025 and 53.2% at December 31, 2024. Time accounts as a percentage of total deposits were 28.9% at December 31, 2025 and 31.8% at December 31, 2024.
Borrowed Funds
On December 31, 2024, balances for certificates of deposit totaled $560.3 million, compared to $532.1 million on December 31, 2023, an increase of $28.1 million or 5.3%. The decrease in core deposits and increase in certificate of deposit balances is generally related to customer preferences for higher yielding deposits.
Total borrowed funds were $84.7 million at December 31, 2025 compared to $105.1 million at December 31, 2024, a decrease of $20.4 million or 19.4%. The decrease in borrowings from December 31, 2024, was the result of the maturity of FHLB advances. As of December 31, 2025, 72% of our deposits are fully FDIC insured, and another 7% are further backed by the Indiana Public Deposit Insurance Fund. The Company’s liquidity position remains strong with solid core deposit customer relationships, excess cash, debt securities, and access to diversified borrowing sources. As of December 31, 2025, the Company had available liquidity of $673.9 million including borrowing capacity from the FHLB and Federal Reserve facilities (excluding brokered deposit capacity).
Other assets totaled $34.9 million at December 31, 2025, compared to $43.9 million at December 31, 2024. The decrease in other assets is primarily related to decreased fair value of the Company’s interest rate swap contract derivative and a reduction in the deferred tax asset. Accrued expenses and other liabilities totaled $34.8 million at December 31, 2025, compared to $43.6 million at December 31, 2024. The decrease in accrued expenses and other liabilities is primarily the result of a reduction in the fair value of the Company's interest rate swap liability and the related collateral received as well as lower wire transfer settlement balances at December 31, 2025.
Repurchase agreements increased as part of normal account fluctuations within that product line. Borrowed funds decreased due to cyclical inflows and outflows of interest-earning assets and interest-bearing liabilities.
What changed in the latest 10-Q
Risk Factors
We could not find a separate Risk Factors item in the latest 10-Q. Some companies leave it out of quarterly reports; see the annual 10-K risk factors and the original filing. Open the filing on SEC.gov.
Management's Discussion & Analysis (MD&A)
New heading “Results of Operations - Comparison of the Six Months Ended June 30, 2026 to June 30, 2025”
Largest changes
“Results of Operations - Comparison of the Six Months Ended June 30, 2026 to June 30, 2025”see in full comparison
“Net interest income for the quarter ended June 30, 2026, was $15.2 million, an increase of $1.2 million (8.9%), compared to $13.9 million for the quarter ended June 30, 2025. The weighted-average yield on interest-earning assets was 4.93% for the quarter June 30, 2026, compared to 4.82% for the quarter ended June 30, 2025. The weighted-average cost of interest-bearing liabilities for the quarter ended June 30, 2026, was 2.06% compared to 2.22% for the quarter ended June 30, 2025. …”see in full comparison
“Management does not presently anticipate that any of the non-performing loans or classified loans would materially affect future operations, liquidity or capital resources.”see in full comparison
Atsee in full comparisonMarchJune31,30, 2026, management is of the opinion that there are no loans where known information about possible credit problems of borrowers causes management to have serious doubts as to the ability of such borrowers to comply with the present loan repayment terms and which will imminently result in such loans being classified as past due or nonaccrual.Management does not presently anticipate that any of the non-performing loans or classified loans would materially affect future operations, liquidity or capital resources.
Other assets totaledsee in full comparison$35.1$33.1 million atMarchJune31,30, 2026, compared to $34.9 million at December 31, 2025. Theincreasedecrease in other assets is primarily relatedantoincreasedecreased fair value of the Company's interest rate swap derivative asset as well as reductions intheprepaid assets and deferred taxasset.assets. Accrued expenses and other liabilities totaled$32.9$34.6 million atMarchJune31,30, 2026, compared to $34.8 million at December 31, 2025. The decrease in accrued expenses and other liabilities is primarily the result ofdecreasedreductionACHofprefundingaccruedbalances.interest on deposits, various accrued expenses, and the long-term operating liability related to leased properties.
If interest rates across the yield curve were to uniformly decrease or increase up tosee in full comparison400200 basis points, this analysis suggests the Bankmaybemay be positioned for relatively neutralto modestly negative or positivechanges in net interest income over the next twelve months. If interest rates across the yield curve were to uniformly increase or decrease by 300 to 400 basis points, this analysis suggests a more pronounced impact to net interest income.
Full comparison: every changed paragraph (57)
Finward Bancorp is a financial holding company registered with the Board of Governors of the Federal Reserve System. Peoples Bank, an Indiana commercial bank, is a wholly-owned subsidiary of the Company. The Company has no other business activity other than being a holding company for the Bank. The following management’s discussion and analysis presents information concerning our financial condition as of MarchJune 31,30, 2026 and December 31, 2025, and the results of operations for the three and six months ending MarchJune 31,30, 2026 and MarchJune 31,30, 2025. This discussion should be read in conjunction with the condensed consolidated financial statements and other financial data presented elsewhere herein and with the condensed consolidated financial statements and other financial data, as well as the Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
At MarchJune 31,30, 2026, the Company had total assets of $2.0 billion, loans receivable, net of deferred fees and costs, of $1.4$1.5 billion and total deposits of $1.7 billion. Stockholders' equity totaled $172.4$178.3 million or 8.6%8.7% of total assets, with a book value per share of $39.81.$41.15. Net income for the three months ended MarchJune 31,30, 2026, was $2.2$2.1 million, or $0.52$0.48 earnings per diluted common share. For the three months ended MarchJune 31,30, 2026, the ROA was 0.44%,0.42%, while the ROE was 5.00%.4.74%. Net income for the six months ended June 30, 2026, was $4.3 million, or $1.00 earnings per diluted common share. For the six months ended June 30, 2026, the ROA was 0.43%, while the ROE was 4.87%.
As previously disclosed, on August 9, 2024, the Bank entered into an informal administrative agreement known as a memorandum of understanding with the FDIC and DFI. By letter dated June 24, 2026, the FDIC and DFI notified the Bank that the FDIC and DFI terminated the MOU effective immediately.
On July 21, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with First Financial Bancorp, an Ohio corporation (“First Financial”). Pursuant to the Merger Agreement, the Company will merge with and into First Financial (the “Merger”), with First Financial continuing as the surviving corporation in the Merger. Following the Merger, the Bank will merge with and into First Financial Bank, the wholly-owned Ohio state-chartered banking subsidiary of First Financial (“First Financial Bank”), with First Financial Bank continuing as the surviving bank.
Subject to the terms and conditions of the Merger Agreement, upon the completion of the Merger, each share of common stock, no par value, of the Company issued and outstanding immediately prior to the effective time of the Merger will be converted into the right to receive 1.35 shares of common stock, no par value, of First Financial. The Merger remains subject to regulatory approvals, Company shareholder approval, and other customary closing conditions. Based on First Financial’s July 20, 2026 closing price of $35.48 per share as reported on the Nasdaq Global Select Market, the transaction is valued at approximately $208 million. See Note 15 to the consolidated financial statements of the Company set forth in this Quarterly Report on Form 10-Q.
On August 9, 2024, the Bank entered into a memorandum of understanding with the FDIC and DFI. The MOU is an informal administrative agreement pursuant to which the Bank has agreed to take various actions and comply with certain requirements to enhance certain areas of the Bank’s operations. The MOU documents an understanding among the Bank, the FDIC, and DFI that, among other things, the Bank will: refrain from paying cash dividends without prior regulatory approval and develop and implement certain plans regarding the Bank’s operations, capital, and strategy. The Bank will submit written quarterly progress reports to the FDIC and DFI detailing compliance with the MOU. The MOU will remain in effect until modified or terminated by the FDIC and DFI.
Management does not expect the actions called for by the MOU to have a substantial impact on the Company’s or the Bank’s ongoing day-to-day operations, although they may have the effect of limiting or delaying the Bancorp’s or the Bank’s ability or plans to expand and engage in business acquisitions.
During the threesix months ended MarchJune 31,30, 2026, total assets decreasedincreased by $6.0$19.5 million (0.30%0.97%), with interest-earning assets decreasingincreasing by $2.2$23.3 million (0.12%1.24%). At bothJune March 31,30, 2026 and December 31, 2025, interest-earning assets totaled $1.9$1.90 billion and $1.87 billion. Earning assets represented 92.9%93.0% of total assets at MarchJune 31,30, 2026 and 92.7% December 31, 2025.
Loans receivable, net of deferred fees and costs totaled $1.46$1.50 billion at MarchJune 31,30, 2026 and $1.45 billion at December 31, 2025. The loan portfolio, which is the Company’s largest asset, is the primary source of both interest and fee income. The Company’s lending strategy emphasizes quality loan growth, product diversification, and competitive and profitable pricing.
Our total commercial real estate portfolio (which includes but is not limited to loans secured by office space, medical office space, and mixed-use retail/office space) totaled $564.6$597.4 million as of MarchJune 31,30, 2026, compared to $555.6 million as of December 31, 2025. Given prevailing market conditions such as continued elevated interest rate levels, reduced occupancy as a result of the increase in hybrid work arrangements, we are carefully monitoring these loans for signs of deterioration in credit quality.
Commercial real estate loans remained our largest loan segment and accounted for 38.8%39.7% of the total loan portfolio at MarchJune 31,30, 2026 and 38.3% at December 31, 2025. A further breakdown of the composition of the commercial real estate loan portfolio as of MarchJune 31,30, 2026 and December 31, 2025 is shown in the table below:
The following table sets forth certain information at MarchJune 31,30, 2026, regarding the dollar amount of loans in the Company’s portfolio based on their contractual terms to maturity. Demand loans, loans having no schedule of repayment and no stated maturity, and overdrafts are reported as due in one year or less. Contractual principal repayments of loans do not necessarily reflect the actual term of the loan portfolio. The average life of mortgage loans is substantially less than their contractual terms because of loan prepayments and because of enforcement of due-on-sale clauses, which give the Company the right to declare a loan immediately due and payable in the event, among other things, that the borrower sells the property subject to the mortgage. The amounts are stated in thousands (000’s).
The Company is primarily a portfolio lender. Mortgage banking activities historically have been limited to the sale of fixed rate mortgage loans with contractual maturities greater than 15 years. These loans are identified as held for sale when originated and sold, on a loan-by-loan basis, in the secondary market. The Company will also retain fixed rate mortgage loans with a contractual maturity greater than 15 years on a limited basis. During the threesix months ended MarchJune 31,30, 2026, the Company originated $9.4$15.2 million in new fixed rate mortgage loans for sale, compared to $9.6$18.1 million during the quartersix months ended MarchJune 31,30, 2025. Net gains realized from the mortgage loan sales totaled $257$228 thousand for the three months ended MarchJune 31,30, 2026, compared to $230$378 thousand for the quarter ended MarchJune 31,30, 2025. AtNet Marchgains 31,realized from the mortgage loan sales totaled $485 thousand for the six months ended June 30, 2026, compared to $608 thousand for the six months ended June 30, 2025. The Company had noloans of $1.1 million loans that were classified as held for sale, compared to $1.1 millionsale at both June 30, 2026 and December 31, 2025.
Non-performing loans include those loans that are 90 days or more past due and those loans that have been placed on nonaccrual status. The Company will at times maintain certain loans on accrual status, despite being over 90 days past due, for short periods of time when management has reason to believe payments are in the process of being received. The non-performing balance increases are driven by a variety of credits and not due to concentrations or an indication of overall economic stress within our customer base or footprint.
Substandard loans include potential problem loans, where information about possible credit issues or other conditions causes management to question the ability of such borrowers to comply with loan covenants or repayment terms. No loans were internally classified as doubtful or loss at MarchJune 31,30, 2026 or December 31, 2025.
At MarchJune 31,30, 2026, management is of the opinion that there are no loans where known information about possible credit problems of borrowers causes management to have serious doubts as to the ability of such borrowers to comply with the present loan repayment terms and which will imminently result in such loans being classified as past due or nonaccrual. Management does not presently anticipate that any of the non-performing loans or classified loans would materially affect future operations, liquidity or capital resources.
Management does not presently anticipate that any of the non-performing loans or classified loans would materially affect future operations, liquidity or capital resources.
The primary objective of the Company’s investment portfolio is to provide for the liquidity needs of the Company and to contribute to profitability by providing a stable flow of dependable earnings. Funds are generally invested in federal funds, interest bearing balances in other financial institutions, U.S. government agency securities, U.S. treasury securities, federal agency obligations, obligations of state and local municipalities, mortgage-backed securities, and corporate securities. The securities portfolio, all of which is designated as available-for-sale, totaled $307.7$310.2 million at MarchJune 31,30, 2026, compared to $316.2 million at December 31, 2025, a decrease of $8.5$6.0 million (2.7%1.9%). The decrease in securities available for sale from year end, was primarily due to ancontinued increasepayoffs inand thelack negativeof fairnew valuepurchases adjustment towithin the portfolio. The yield on the securities portfolio was 2.22%2.25% for the threesix months ended MarchJune 31,30, 2026 and 2.38%2.40% for the quartersix months ended MarchJune 31,30, 2025. Management did not execute any securities sale transactions during the quarter. At MarchJune 31,30, 2026, the securities portfolio represented 16.4%16.3% of interest-earning assets and 15.3%15.2% of total assets compared to 16.9% of interest-earning assets and 15.6% of total assets at December 31, 2025.
The increasedecrease in interest bearing deposits in other financial institutions is the result of the timing of loan fundings and payoffs, inflow and outflow of deposits, repurchase agreements and borrowed funds.
The contractual maturities and weighted average yields for the U.S. government agency securities, municipal securities, and collateralized debt obligations at MarchJune 31,30, 2026, are summarized in the table below. Securities not due at a single maturity date, such as mortgage-backed securities and collateralized mortgage obligations, are shown separately. The carrying values are stated in thousands (000’s).
As of MarchJune 31,30, 2026, deposits totaled $1.72$1.73 billion, aan decreaseincrease of $7.9$5.6 million or 0.5%0.3% compared to December 31, 2025. Core deposits totaled $1.2 billion at both MarchJune 31,30, 2026 and December 31, 2025. Core deposits include checking, savings, and money market accounts and represented 71.6%71.3% of the Company’s total deposits at MarchJune 31,30, 2026. On MarchJune 31,30, 2026, balances for certificates of deposit totaled $488.8$497.4 million, compared to $499.6 million on December 31, 2025, a decrease of $10.8$2.1 million or 2.2%.0.4%. The decreaseincrease in deposits is primarily related to cyclical flows and continued planned adjustments to deposit pricing. The Company has experienced a high rate of deposit retention after the closure of two of its bank branches during the quarter.
Non-interest bearing demand accounts comprised 16.2%15.6% of total deposits at MarchJune 31,30, 2026 and 15.5% of total deposits at December 31, 2025. Interest bearing demand accounts, including money market and savings accounts, comprised 55.6%55.7% of total deposits at bothJune March 31,30, 2026 andcompared to 52.8% at December 31, 2025. Time accounts as a percentage of total deposits were 28.4%28.7% at MarchJune 31,30, 2026 and 28.9% at December 31, 2025.
Deposit rates decreased in the threesix months ended MarchJune 31,30, 2026 compared to same periods in 2025, primarily driven by a decrease in short-term market interest rates.
Borrowings, federal funds purchased, and repurchase agreements totaled $90.8$95.3 million at MarchJune 31,30, 2026 compared to $84.7 million at December 31, 2025, aan decreaseincrease of $6.1$10.6 million or 7.2%.12.5%. The increase in borrowings from December 31, 2025, was the result of new FHLB advances and additional repurchase agreement activity.advances. As of MarchJune 31,30, 2026, 72%73% of our deposits are fully FDIC insured, and another 8% are further backed by the Indiana Public Deposit Insurance Fund. The Company’s liquidity position remains strong with solid core deposit customer relationships, excess cash, debt securities, and access to diversified borrowing sources. As of MarchJune 31,30, 2026, the Company had available liquidity of $555.0$604.3 million including borrowing capacity from the FHLB and Federal Reserve facilities.
Other assets totaled $35.1$33.1 million at MarchJune 31,30, 2026, compared to $34.9 million at December 31, 2025. The increasedecrease in other assets is primarily related anto increasedecreased fair value of the Company's interest rate swap derivative asset as well as reductions in theprepaid assets and deferred tax asset.assets. Accrued expenses and other liabilities totaled $32.9$34.6 million at MarchJune 31,30, 2026, compared to $34.8 million at December 31, 2025. The decrease in accrued expenses and other liabilities is primarily the result of decreasedreduction ACHof prefundingaccrued balances.interest on deposits, various accrued expenses, and the long-term operating liability related to leased properties.
Market risk represents the risk of loss due to changes in market values of assets and liabilities. The Company incurs market risk in the normal course of business through exposures to market interest rates, equity prices, and credit spreads. As of MarchJune 31,30, 2026, the Company has identified interest rate risk as our primary source of market risk.
The following table shows the impact of changes in interest rates on net interest income over the next twelve months and EVE at Risk based on our balance sheet as of MarchJune 31,30, 2026 (dollars in millions):
If interest rates across the yield curve were to uniformly decrease or increase up to 400200 basis points, this analysis suggests the Bank maybemay be positioned for relatively neutral to modestly negative or positive changes in net interest income over the next twelve months. If interest rates across the yield curve were to uniformly increase or decrease by 300 to 400 basis points, this analysis suggests a more pronounced impact to net interest income.
Although customer deposits remain our preferred funding source, maintaining additional sources of liquidity is part of our prudent liquidity risk management practices. We have the ability to borrow from the FHLB. At MarchJune 31,30, 2026, we had five outstanding advances totaling $50$65 million and the ability to borrow up to $269.5$314.7 million from the FHLB. We also have the ability to borrow from the Federal Reserve Bank of Chicago. At MarchJune 31,30, 2026, we had no outstanding balance from the Federal Reserve Bank of Chicago. At MarchJune 31,30, 2026, cash and cash equivalents were $118.8$94.6 million and secured borrowing capacity at the Federal Reserve Bank totaled $244.5$248.5 million, providing total additional liquidity sources of $555.0$604.3 million (excluding brokered deposit capacity).
The following table shows the Company’s sources of liquidity as of MarchJune 31,30, 2026 and December 31, 2025:
During the threesix months ended MarchJune 31,30, 2026, cash and cash equivalents decreased by $0.9$25.0 million compared to a $1.7$2.0 million increase for the quartersix months ended MarchJune 31,30, 2025. The primary sources of cash and cash equivalents were sales of loans originated for sale and the proceeds from borrowings. The primary uses of cash and cash equivalents were loan originations and the purchase of loans. Cash provided by operating activities totaled $3.6$8.4 million for the threesix months ended MarchJune 31,30, 2026, compared to cash usedprovided of $3.8$1.0 million for the quartersix months ended MarchJune 31,30, 2025. Cash used in operating activities was primarily a result of net income and sale of loans originated for sale offset by loans originated for sale. Cash used in investing activities totaled $2.2$48.4 million for the current period, compared to cash provided by investing activities of $19.7$29.9 million for the quartersix months ended MarchJune 31,30, 2025. Cash used in investing activities for the current three-monthsix-month period was primarily related to the purchase of loans and net change in loans. Cash usedprovided inby financing activities totaled $2.4$15.1 million during the current period compared to net cash usedprovided inby financing activities of $14.1$2.0 million for the quartersix months ended MarchJune 31,30, 2025. The net cash usedprovided inby financing activities was primarily the result of netproceeds changefrom inborrowed depositsfunds partially offset by the proceedsrepayment fromof borrowed funds. On a cash basis, the Company paid dividends on common stock of $1.0 million for the six months ended June 30, 2026, and $520 thousand for the threesix months ended MarchJune 31, 2026, and $518 thousand for the quarter ended March 31,30, 2025.
At MarchJune 31,30, 2026, outstanding commitments to fund loans totaled $267.9$268.4 million. Approximately 59.9%60.1% of the commitments were at variable rates. Standby letters of credit, which are conditional commitments issued by the Company to guarantee the performance of a customer to a third-party, totaled $15.0$14.1 million at MarchJune 31,30, 2026. Management believes that the Company has sufficient cash flow and borrowing capacity to fund all outstanding commitments and letters of credit, while maintaining proper levels of liquidity.
Management strongly believes that maintaining a high level of capital enhances safety and soundness. During the threesix months ended MarchJune 31,30, 2026, stockholders' equity decreasedincreased by $2.3$3.6 million 1.3%.2.1%. During the threesix months ended MarchJune 31,30, 2026, stockholders’ equity was primarily decreasedincreased by net income of $2.2$4.3 million and offset by other comprehensive income as the result of market value changes within the securities portfolio of $4.1 million and dividends declared of $520$1,040 thousand. On April 24, 2014, the Company’s Board of Directors authorized a stock repurchase program to repurchase up to 50,000 shares of the Company’s outstanding common stock, from time to time and subject to market conditions, on the open market or in privately negotiated transactions. The stock repurchase program does not expire and is only limited by the number of shares that can be purchased. The stock repurchase program will be reviewed annually by the Board of Directors. No shares were repurchased under the program during the first threesix months of 2026 or 2025. During 2025,2026, 6,02511,541 restricted stock shares vested under the Incentive Plan outlined in Note 10 of the condensed consolidated financial statements, of which 1,5081,972 of these shares were withheld in the form of a net surrender to cover the withholding tax obligations of the vesting employees. The repurchase of these surrendered shares is considered outside of the scope of the formal board approved stock repurchase program.
On March 19, 2026, the federal banking regulators issued three proposals to modernize the regulatory capital framework for banks of all sizes. The federal banking agencies stated the proposals would streamline capital requirements and better align regulatory capital with risk while maintaining the safety and soundness of the banking system. The proposals are intended to be the final phase of the Basel capital reforms. Comments on the proposals arewere due by June 18, 2026. The Company's management continues to evaluate the impact of these proposals on the Company, the Bank, and its business, financial condition, and results of operations.
During the threesix months ended MarchJune 31,30, 2026, the Company’s and Bank’s risk weighted assets continued to be negatively impacted by regulatory requirements regarding collateralized debt obligations. The regulatory requirements state that for collateralized debt obligations that have been downgraded below investment grade by the rating agencies, increased risk-based asset weightings are required. The Company currently holds pooled collateralized debt obligations with a cost basis of $2.1 million. These investments currently have ratings that are below investment grade. As a result, approximately $1.9 million of risk-based assets are generated by the collateralized debt obligations in the Company’s and Bank’s total risk based capital calculation.
In addition, the following table shows that, at MarchJune 31,30, 2026 and December 31, 2025, the Bank’s capital exceeded all applicable regulatory capital requirements as set forth in 12 C.F.R. § 324.
The Company’s ability to pay dividends to its shareholders is largely dependent upon the Bank’s ability to pay dividends to the Company. Under Indiana law, the Bank may pay dividends from its undivided profits (generally, earnings less losses, bad debts, taxes and other operating expenses) as is considered expedient by the Bank’s Board of Directors. However, the Bank must obtain the approval of the DFI if the total of all dividends declared by the Bank during the current year, including the proposed dividend, would exceed the sum of retained net income for the year to date plus its retained net income for the previous two years. For this purpose, “retained net income,” means net income as calculated for call report purposes, less all dividends declared for the applicable period. An exemption from DFI approval would require that the Bank have been assigned a composite uniform financial institutions rating of 1 or 2 as a result of the most recent federal or state examination; the proposed dividend would not result in a Tier 1 leverage ratio below 7.5%; and that the Bank not be subject to any corrective action, supervisory order, supervisory agreement, or board approved operating agreement. In addition, under the terms of the MOU, the Bank must seek regulatory approval prior to paying cash dividends. See “– Summary” above. Moreover, the FDIC and the Federal Reserve Board may prohibit the payment of dividends if it determines that the payment of dividends would constitute an unsafe or unsound practice in light of the financial condition of the Bank. Assuming receipt of regulatory approval for all cash dividends declared by the Bank under the terms of the MOU, the aggregate amount of dividends that the Bank is eligible to declare in 2026, without the need for qualifying for a further exemption or prior DFI approval under the terms of Indiana law described above, is its 2026 net income. On March 2, 2026, the Board of Directors of the Company declared the most recent quarterly dividend of $0.12 per share. The Company’s quarterly dividend was paid to shareholders on March 31, 2026 to shareholders of record on March 16, 2026.
Results of Operations - Comparison of the Three Months Ended MarchJune 31,30, 2026 toand MarchJune 31,30, 2025
For the three monthsquarter ended MarchJune 31,30, 2026, the Company reported net income of $2.2$2.1 million, an increase of $1.8 million (392.7%) compared to $455net thousandincome of $2.2 million for the quarter ended MarchJune 31,30, 2025.2025, a decrease of $58 thousand. For the three monthsquarter ended MarchJune 31,30, 2026, the ROA was 0.44%,0.42%, compared to 0.09%0.42 % for the quarter ended MarchJune 31,30, 2025. The ROE was 5.00% for the three months ended March 31, 2026, compared to 1.17%4.74% for the quarter ended MarchJune 31,30, 2026, compared to 5.66% for the quarter ended June 30, 2025.
Information relating to the average consolidated balance sheet and the yield on average earning assets and cost of average liabilities for the periods indicated are in the following table. Dividing the related interest, on an annualized basis, by the average balance of assets or liabilities drives the disclosed rates. Average balances are derived from daily balances.
Net interest income for the quarter ended June 30, 2026, was $15.2 million, an increase of $1.2 million (8.9%), compared to $13.9 million for the quarter ended June 30, 2025. The weighted-average yield on interest-earning assets was 4.93% for the quarter June 30, 2026, compared to 4.82% for the quarter ended June 30, 2025. The weighted-average cost of interest-bearing liabilities for the quarter ended June 30, 2026, was 2.06% compared to 2.22% for the quarter ended June 30, 2025. The impact of the 4.93% return on interest-earning assets and the 2.06% cost of interest-bearing liabilities resulted in an interest rate spread of 2.87% for the current quarter, an increase from the 2.60% spread for the quarter ended June 30, 2025. On a tax adjusted basis, the Company’s net interest margin was 3.37% for the quarter ended June 30, 2026, compared to 3.11% for the quarter ended June 30, 2025. The Company believes that it is a standard practice in the banking industry to present net interest margin and net interest income on a fully-taxable equivalent basis, as these measures provide useful information to make peer comparisons. Net interest margin on a tax-equivalent basis represents a non-GAAP financial measure. See the non-GAAP reconciliation table immediately below and the section captioned “Non-GAAP Financial Measures” for further disclosure regarding non-GAAP financial measures.
The increased net interest income and net interest margin for the quarter ended June 30, 2026, was primarily due to continued repricing and maturity of the existing loan portfolio, as well as strength in new loan originations.
The following table shows the change in non-interest income for the quarter ending June 30, 2026, and June 30, 2025.
The decrease in non-interest income during the quarter ended June 30, 2026 compared to the same period in 2025 was primarily due to a $180 thousand dollar loss associated with the closure of one of the Company's leased branch locations.
The following table shows the change in non-interest expense for the three months ending June 30, 2026 and June 30, 2025.
Increases in non-interest expenses during the quarter ended June 30, 2026 were primarily attributable to higher compensation and benefits and the seasonality of certain professional and outside services expenses.
The expense for income taxes was $364 thousand for the quarter ended June 30, 2026, as compared to the benefit of $35 thousand for the quarter ended June 30, 2025. The effective tax rate was 14.8% for the quarter ended June 30, 2026 as compared to negative 1.7% for the quarter ended June 30, 2025. The Company’s higher current effective tax rate for the quarter ended June 30, 2026, is primarily a result of updated projected earnings levels used in estimating full year 2026 tax accrual as well as the expiration of tax credits which no longer reduced tax expense in 2026.
Results of Operations - Comparison of the Six Months Ended June 30, 2026 to June 30, 2025
For the six months ended June 30, 2026, the Company reported net income of $4.3 million, an increase of $1.7 million (66.3%) compared to $2,606 thousand for the six months ended June 30, 2025. For the six months ended June 30, 2026, the ROA was 0.43%, compared to 0.25% for the six months ended June 30, 2025. The ROE was 4.87% for the six months ended June 30, 2026, compared to 3.39% for the six months ended June 30, 2025.
Net interest income for the threesix months ended MarchJune 31,30, 2026, was $15.1$30.3 million, an increase of $1.8$3.0 million (13.2%11.0%), compared to $13.3$27.3 million for the quartersix months ended MarchJune 31,30, 2025. The weighted-average yield on interest-earning assets was 4.86%4.90% for the threesix months ended MarchJune 31,30, 2026 compared to 4.71%4.77% for the quartersix months ended MarchJune 31,30, 2025. The weighted-average cost of interest-bearing liabilities for the threesix months ended MarchJune 31,30, 2026, was 2.00%2.03% compared to 2.28%2.25% for the quartersix months ended MarchJune 31,30, 2025. The impact of the 4.86%4.90% return on interest-earning assets and the 2.00%2.03% cost of interest-bearing liabilities resulted in an interest rate spread of 2.86%2.87% for the threesix months ended MarchJune 31,30, 2026, an increase from the 2.43%2.52% spread for the quartersix months ended MarchJune 31,30, 2025. The Company’s net interest margin on a tax-equivalent basis was 3.35%3.36% for the threesix months ended MarchJune 31,30, 2026, compared to 2.95%3.03% for the quartersix months ended MarchJune 31,30, 2025. The Company believes that it is a standard practice in the banking industry to present net interest margin and net interest income on a fully-taxable equivalent basis, as these measures provide useful information to make peer comparisons. Tax adjusted net interest margin represents a non-GAAP financial measure. See the non-GAAP reconciliation table immediately below and the section captioned “Non-GAAP Financial Measures” for further disclosure regarding non-GAAP financial measures.
The increased net interest income and net interest margin for the threesix months ended MarchJune 31,30, 2026, was primarily the result of reduced deposit and borrowing costs.costs as well as strength in new loan originations.
The following table shows the change in non-interest income for the threesix months ended MarchJune 31,30, 2026, and MarchJune 31,30, 2025.
The increasedecrease in non-interest income was primarily due to a $180 thousand dollar loss associated with the closure of one of the Company's leased branch locations and reduced gains on the sale of loans held-for-sale partially offset by an increase in fees and service charges.
The following table shows the change in non-interest expense for the threesix months ended MarchJune 31,30, 2026, and MarchJune 31,30, 2025.
Increases in non-interest expenses during the threesix months ended MarchJune 31,30, 2026, were primarily attributable to planned increases in marketing expenses, due to seasonal promotion and planned business generation purposes, as well as compensation and benefit expense driven by annual merit-based increases.expense.
The provision for income taxes was $423$787 thousand for the threesix months ended MarchJune 31,30, 2026 as compared to the provision of $161$126 thousand for the quartersix months ended MarchJune 31,30, 2025. The effective tax rate was 15.9%15.4% for the threesix months ended MarchJune 31,30, 2026, as compared to 26.1%4.6% for the quartersix months ended MarchJune 31,30, 2025. The Company’s year-to-date effective tax rate for the threesix months ended MarchJune 31,30, 2026, decreasedis primarily duea toresult lowerof updated projected earnings levels used in estimating full year 2026 tax accrual as well as expiration of coretax incomecredits experiencedwhich duringno thelonger threereduced monthstax endedexpense Marchin 31, 2025.2026.
This filing includes certain financial measures that are identified as non-GAAP, including adjusted net interest income and tax adjusted net interest margin. The Company'sCompany provides these non-GAAP performance measures because they are used by management to evaluate and measure the Company’s performance, which the Company believes also is useful to assist investors in assessing the Company’s operating performance. Where non-GAAP financial measures are used in this report, the most comparable GAAP measure, as well as the reconciliation to the most comparable GAAP measure, can be found in the tables referenced herein.
FNWD insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 10 Form 4 filings (6 insiders, 2 trade dates, 196 shares, about $7.7K) and open-market sales in 0 filings. Net open-market shares: 196 (purchases minus sales); net value about $7.7K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-25 | Scheub Todd M. |
Open-market purchase | 32 | $43.48 | $1.4K |
| 2026-09-25 | Puntillo Anthony |
Open-market purchase | 5 | $43.46 | $234 |
| 2026-09-25 | Bochnowski Benjamin J |
Open-market purchase | 5 | $43.48 | $224 |
| 2026-09-25 | Lowry Robert T |
Open-market purchase | 42 | $43.48 | $1.8K |
| 2026-06-30 | Johnson Robert E. Iii |
Open-market purchase | 5 | $35.75 | $195 |
| 2026-06-30 | Lowry Robert T |
Open-market purchase | 51 | $36.00 | $1.8K |
| 2026-06-30 | Han Amy Wong |
Open-market purchase | 4 | $35.75 | $128 |
| 2026-06-30 | Scheub Todd M. |
Open-market purchase | 39 | $36.00 | $1.4K |
| 2026-06-30 | Puntillo Anthony |
Open-market purchase | 7 | $35.75 | $233 |
| 2026-06-30 | Bochnowski Benjamin J |
Open-market purchase | 6 | $36.00 | $224 |
| 2026-05-22 | Johnson Robert E. Iii |
Grant/award | 372 | $32.24 | $12.0K |
| 2026-05-22 | Evans Jennifer |
Grant/award | 372 | $32.24 | $12.0K |
| 2026-05-22 | Han Amy Wong |
Grant/award | 372 | $32.24 | $12.0K |
| 2026-05-22 | Alwin Martin P |
Grant/award | 372 | $32.24 | $12.0K |
| 2026-05-22 | Youman Robert W. |
Grant/award | 372 | $32.24 | $12.0K |
| 2026-05-22 | Puntillo Anthony |
Grant/award | 372 | $32.24 | $12.0K |
| 2026-05-22 | Gorelick Joel |
Grant/award | 372 | $32.24 | $12.0K |
Well-known investors holding FNWD (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Renaissance Technologies | 2026-06-30 | 45,300 | $1.7M | 0.0% | No change |
| Millennium Management (Israel Englander) | 2026-06-30 | 36,086 | $1.3M | 0.0% | New position |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 19,760 | $726.8K | 0.0% | Added 25% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 16,110 | $592.5K | 0.0% | Added 182% |
| Two Sigma Investments | 2026-06-30 | 6,306 | $231.9K | 0.0% | New position |