Finward Bancorp (NASDAQ:FNWD) (the "Bancorp"), the holding company for Peoples Bank (the "Bank"), today announced that net income available to common stockholders was $2.0 million, or $0.46 per diluted share, for the quarter ended December 31, 2025, as compared to $3.5 million, or $0.81 per diluted share, for the quarter ended September 30, 2025. Selected performance metrics are as follows for the periods presented:

Performance Ratios
	Quarter ended
	12/31/2025	9/30/2025	6/30/2025	3/31/2025	12/31/2024
Return on equity	4.66%	8.96%	5.66%	1.17%	5.39%
Return on assets	0.39%	0.68%	0.42%	0.09%	0.41%
Net interest margin, tax-equivalent (non-GAAP)	3.32%	3.18%	3.11%	2.95%	2.79%
Non-interest income/average assets	0.29%	0.57%	0.53%	0.43%	0.72%
Non-interest expense/average assets	2.90%	2.74%	2.90%	2.81%	2.75%
Efficiency ratio	89.50%	81.22%	88.92%	93.11%	87.20%

"Operational results were significantly stronger in 2025 than 2024, reflecting the execution of successful strategic initiatives that have strengthened our organization over that time. While we continue to aim higher, these results reflect the hard work our team has put in throughout the year, " said Benjamin Bochnowski, CEO. "Actions taken in the fourth quarter are expected to further enhance our financial position, including steps to optimize our balance sheet, reduce risk, increase net interest margin, and improve efficiency. This included a small securities repositioning, where the Bank sold $26.6 million in primarily municipal securities, generating a $1.6 million pre-tax reduction to our posted fourth quarter results. Credit quality also remains stable, and the current rate environment remains supportive of continued progress in operational results in 2026."

Highlights of the current period include:

Net Interest Margin - The net interest margin for the quarter ended December 31, 2025 was 3.18% compared to 3.04% for the quarter ended September 30, 2025. Net interest margin on a tax-equivalent basis (a non-GAAP measure) for the quarter ended December 31, 2025 was 3.32%, as compared to 3.18% for the quarter ended September 30, 2025. The increased net interest margin from the prior quarter is primarily the result of increased loan yields from loan repricing, as well as reduced deposit costs as a result of the Federal Reserve's continued reduction of federal funds rates during the quarter.
Funding - As of December 31, 2025, deposits totaled $1.7 billion, a decrease of $23.7 million, or 1.4% compared with September 30, 2025 balances, which totaled $1.8 billion. As of December 31, 2025, non-interest-bearing deposits totaled $267.4 million, a decrease of $12.9 million. Core deposits totaled $1.2 billion at both December 31, 2025 and September 30, 2025. Core deposits include checking, savings, and money market accounts and represented 71.1% of the Bancorp's total deposits at December 31, 2025. As of December 31, 2025, balances for certificates of deposit totaled $499.6 million, compared to $536.7 million on September 30, 2025, a decrease of $37.1 million or 6.9%. As of December 31, 2025, the Bank has no remaining brokered deposits. The decrease in total portfolio deposits is primarily related to cyclical flows, maturity of $20 million in brokered deposits, and continued adjustments to deposit pricing. In addition, as of December 31, 2025, borrowings and repurchase agreements totaled $84.7 million, a decrease of $18.7 million or 18.1%, compared to September 30, 2025. The decrease in borrowings was the result of certain called putable FHLB advances occurring during the quarter.

As of December 31, 2025, 71.8% of our deposits are fully FDIC insured, and another 7.3% are further backed by the Indiana Public Deposit Insurance Fund. The Bancorp's liquidity position remains strong with solid core deposit customer relationships, excess cash, debt securities, contractual loan repayments, and access to diversified borrowing sources. As of December 31, 2025, the Bancorp had available liquidity of $674 million including borrowing capacity from the FHLB and Federal Reserve facilities.

Securities Portfolio - Securities available for sale balances decreased by $18.9 million to $316.2 million as of December 31, 2025, compared to $335.2 million as of September 30, 2025. The yield on the securities portfolio decreased to 2.29% for the three months ended December 31, 2025 from 2.40% for the three months ended September 30, 2025. During the fourth quarter, the Bank incurred $1.6 million in securities losses, attributable to the execution of securities repositioning transactions where the Bank sold securities with a market value of $26.6 million and an unadjusted book yield of 2.59%.
Lending - The Bank's aggregate loan portfolio totaled $1.45 billion on December 31, 2025 and $1.47 billion on September 30, 2025. During the three months ended December 31, 2025, the Bank originated $68.9 million in new commercial loans, compared to $62.6 million during the three months ended September 30, 2025. At December 31, 2025, the Bancorp's portfolio loan balances in commercial real estate owner occupied properties totaled $253.5 million or 17.4% of total loan balances and commercial real estate non-owner occupied properties totaled $302.1 million or 20.9% of total loan balances. Of the $302.1 million in commercial real estate non-owner occupied properties balances, loans collateralized by office buildings represented $42.1 million or 2.9% of total loan balances. The decrease in total portfolio loans is primarily due to customer loan payoffs experienced during the quarter.
Asset Quality - At December 31, 2025, non-performing loans totaled $11.9 million, compared to $13.9 million at September 30, 2025, a decrease of $2.0 million or 14.3%. The Bank's ratio of non-performing loans to total loans was 0.82% at December 31, 2025, compared to 0.94% at September 30, 2025. The Bank's ratio of non-performing assets to total assets was 0.68% at December 31, 2025 and 0.76% at September 30, 2025. Management maintains a vigilant oversight of nonperforming loans through proactive relationship management. The Bank has no known credit exposures to non-depositary financial institutions at this time.

The allowance for credit losses (ACL) on loans totaled $17.5 million at December 31, 2025, or 1.21% of total loans receivable, compared to $18.0 million at September 30, 2025, or 1.22% of total loans receivable, a decrease of $471 thousand or 2.62%. The Bank's unused commitment reserve, included in other liabilities, totaled $1.8 million at December 31, 2025, compared to $1.7 million at September 30, 2025, an increase of $86 thousand or 5.2%.

For the quarter ended December 31, 2025, the Bank recorded a net benefit from credit loss totaling $84 thousand based on lower loan impairments, reduction of certain loan segment balances, and other factors within the Bank's ACL modeling. The fourth quarter's benefit consisted of a $170 thousand reversal for credit losses on loans, and a $86 thousand provision of credit losses on unused commitments. For the quarter ended December 31, 2025, net loan charge-offs totaled $301 thousand, compared to net loan charge-offs of $268 thousand for the quarter ended September 30, 2025. The allowance for credit losses as a percentage of non-performing loans, or coverage ratio, was 147.1% at December 31, 2025, compared to 129.4% at September 30, 2025.

Operating Income and Expenses - Non-interest income as percentage of average assets was 0.29% for the quarter ended December 31, 2025, as compared to 0.57% for the quarter ended September 30, 2025. The decrease in non-interest income quarter over quarter was primarily attributable to the realized losses on the sale of investment securities partially offset by bank owned life insurance death claim benefits. Non-interest expense as a percentage of average assets was 2.90% for the quarter ended December 31, 2025, as compared to 2.74% for the quarter ended September 30, 2025. The increase in non-interest expenses quarter over quarter was primarily attributable to higher compensation and benefits and data processing expense as well as higher occupancy and equipment expenses. The Bank remains focused on identifying additional operating efficiencies and third-party expense reductions.
Capital Adequacy - The Bank's tier 1 leverage ratio was 8.93% as of December 31, 2025 and 8.77% as of September 30, 2025. The Bank's capital continues to exceed all applicable regulatory capital requirements as set forth in 12 C.F.R. § 324. The Bancorp's tangible book value per share (non-GAAP) was $34.92 at December 31, 2025, up from $32.77 as of September 30, 2025. Tangible common equity to tangible assets (non-GAAP) was 7.56% at December 31, 2025, up from 6.99% as of September 30, 2025. Excluding accumulated other comprehensive losses, tangible book value per share (non-GAAP) increased to $44.55 as of December 31, 2025, from $44.16 as of September 30, 2025.

Disclosures Regarding Non-GAAP Financial Measures

Reported amounts are presented in accordance with GAAP. In this press release, the Bancorp also provides certain financial measures identified as non-GAAP. The Bancorp's management believes that the non-GAAP information, which consists of tangible common equity, tangible common equity adjusted for accumulated other comprehensive losses, tangible book value per share, tangible book value per share adjusted for accumulated other comprehensive losses, tangible common equity/tangible assets, tangible common equity adjusted for other comprehensive loss/tangible assets, net interest margin on a tax-equivalent basis, and efficiency ratio which can vary from period to period, provides a better comparison of period to period operating performance. The net interest income and net interest margin on a tax-equivalent basis measures recognize the income tax savings when comparing taxable and tax-exempt assets. Interest income and yields on tax-exempt securities and loans are presented using the current federal corporate income tax rate of 21%. Management believes that it is standard practice in the banking industry to present net interest income and net interest margin on a fully tax-equivalent basis and that it may enhance comparability for peer comparison purposes. Additionally, the Bancorp believes this information is utilized by regulators and market analysts to evaluate a company's financial condition and, therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. Refer to the "Reconciliation of non-GAAP Financial Measures" below for more information.

About Finward Bancorp

Finward Bancorp is a locally managed and independent financial holding company headquartered in Munster, Indiana, whose activities are primarily limited to holding the stock of Peoples Bank. Peoples Bank provides a wide range of personal, business, electronic and wealth management financial services from its 26 locations in Lake and Porter Counties in Northwest Indiana and Chicagoland. Finward Bancorp's common stock is quoted on The NASDAQ Stock Market, LLC under the symbol FNWD. The website ibankpeoples.com provides information on Peoples Bank's products and services, and Finward Bancorp's investor relations.

Forward Looking Statements

This press release may contain forward-looking statements regarding the financial performance, business prospects, growth and operating strategies of the Bancorp. For these statements, the Bancorp claims the protections of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Statements in this communication should be considered in conjunction with the other information available about the Bancorp, including the information in the filings the Bancorp makes with the SEC. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward-looking statements are based on management's expectations and are subject to a number of risks and uncertainties. Forward-looking statements are typically identified by using words such as "anticipate," "estimate," "project," "intend," "plan," "believe," "will" and similar expressions in connection with any discussion of future operating or financial performance.

Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include: changes in domestic and international trade policies, including tariffs and other non-tariff barriers, and the effects of such changes on the Bank and its customers; risks related to the development and use of artificial intelligence (AI); the Bank's ability to demonstrate compliance with the terms of the previously disclosed memorandum of understanding entered into between the Bank and the Federal Deposit Insurance Corporation ("FDIC") and Indiana Department of Financial Institutions ("DFI"), or to demonstrate compliance to the satisfaction of the FDIC and/or DFI within prescribed time frames; the Bank's agreement under the memorandum of understanding to refrain from paying cash dividends without prior regulatory approval; changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates, market liquidity, and capital markets, as well as the magnitude of such changes, which may reduce net interest margins; inflation; further deterioration in the market value of securities held in the Bancorp's investment securities portfolio, whether as a result of macroeconomic factors or otherwise; customer acceptance of the Bancorp's products and services; customer borrowing, repayment, investment, and deposit practices; customer disintermediation; the introduction, withdrawal, success, and timing of business initiatives; competitive conditions; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with mergers, acquisitions, and divestitures; economic conditions; and the impact, extent, and timing of technological changes, capital management activities, regulatory actions by the Federal Deposit Insurance Corporation and Indiana Department of Financial Institutions, and other actions of the Federal Reserve Board and legislative and regulatory actions and reforms. Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the Bancorp's reports (such as the Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K) filed with the SEC and available at the SEC's Internet website (www.sec.gov). All subsequent written and oral forward-looking statements concerning matters attributable to the Bancorp or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. Except as required by law, The Bancorp does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statement is made.

In addition to the above factors, we also caution that the actual amounts and timing of any future common stock dividends or share repurchases will be subject to various factors, including our capital position, financial performance, capital impacts of strategic initiatives, market conditions, and regulatory and accounting considerations, as well as any other factors that our Board of Directors deems relevant in making such a determination. Therefore, there can be no assurance that we will repurchase shares or pay any dividends to holders of our common stock, or as to the amount of any such repurchases or dividends.

Performance Ratios

	Quarter Ended					Year Ended
	12/31/2025	9/30/2025	6/30/2025	3/31/2025	12/31/2024	12/31/2025	12/31/2024
Return on equity	4.66%	8.96%	5.66%	1.17%	5.39%	5.10%	8.06%
Return on assets	0.39%	0.68%	0.42%	0.09%	0.41%	0.39%	0.58%
Yield on loans	5.64%	5.49%	5.36%	5.25%	5.27%	5.43%	5.15%
Yield on security investments	2.29%	2.40%	2.42%	2.38%	2.34 %	2.41%	2.38%
Total yield on earning assets	4.96%	4.91%	4.82%	4.71%	4.74%	4.85%	4.67%
Cost of interest-bearing deposits	2.09%	2.16%	2.12%	2.17%	2.41%	2.13%	2.40%
Cost of repurchase agreements	3.10%	3.37%	3.32%	3.35%	3.65%	3.29%	3.85%
Cost of borrowed funds	3.73%	3.64%	3.91%	4.12%	4.31%	3.86%	4.62%
Total cost of interest-bearing liabilities	2.16%	2.25%	2.22%	2.28%	2.53%	2.23%	2.56%
Net interest margin	3.18%	3.04%	2.97%	2.81%	2.65%	3.00%	2.54%
Net interest margin, tax-equivalent (non-GAAP)⁽¹⁾	3.32%	3.18%	3.11%	2.95%	2.79%	3.14%	2.68%
Non-interest income/average assets	0.29%	0.57%	0.53%	0.43%	0.72%	0.45%	1.09%
Non-interest expense/average assets	2.90%	2.74%	2.90%	2.81%	2.75%	2.84%	2.80%
Efficiency ratio (non-GAAP)⁽¹⁾	89.50%	81.22%	88.92%	93.11%	87.20%	88.03%	81.78%

Non-performing assets to total assets	0.68%	0.76%	0.74%	0.69%	0.74%	0.68%	0.74%
Non-performing loans to total loans	0.82%	0.94%	0.91%	0.84%	0.91%	0.82%	0.91%
Allowance for credit losses to non-performing loans	147.12%	129.41%	133.01%	143.84%	123.10%	147.12%	123.10%
Allowance for credit losses to loans receivable	1.21%	1.22%	1.22%	1.20%	1.12%	1.21%	1.12%
Net charge-offs (recoveries) as a percentage of average loans receivable	0.08%	0.07%	(0.11%)	0.01%	0.59%	0.01%	0.14 %

Basic earnings per share	$ 0.46	$ 0.82	$ 0.50	$ 0.11	$ 0.49	$ 1.89	$ 2.85
Diluted earnings per share	$ 0.46	$ 0.81	$ 0.50	$ 0.11	$ 0.49	$ 1.88	$ 2.84
Weighted average common shares outstanding—basic	4,273,421	4,273,022	4,271,952	4,266,976	4,261,079	4,271,350	4,259,570
Weighted average common shares outstanding—diluted	4,301,462	4,299,007	4,291,319	4,284,496	4,286,742	4,292,058	4,274,633

Stockholders' equity to total assets	8.64 %	8.06 %	7.48 %	7.44 %	7.35 %	8.64%	7.35%
Tangible common equity to tangible assets (non-GAAP) ⁽¹⁾	7.56 %	6.99 %	6.41 %	6.34 %	6.24 %	7.56 %	6.24 %
Tangible common equity adjusted for accumulated other comprehensive loss to tangible assets (non-GAAP) ⁽¹⁾	9.65%	9.42%	9.24%	9.23%	9.10%	9.65 %	9.10 %
Book value per share	$ 40.37	$ 38.24	$ 35.67	$ 35.10	$ 35.10	$ 40.37	$ 35.10
Tangible common book value per share (non-GAAP) ⁽¹⁾	$ 34.92	$ 32.77	$ 30.16	$ 29.55	$ 29.48	$ 34.92	$ 29.48
Tangible common book value per share adjusted for accumulated other comprehensive loss (non-GAAP) ⁽¹⁾	$ 44.55	$ 44.16	$ 43.47	$ 43.02	$ 42.94	$ 44.55	$ 42.94
Closing stock price	$ 35.19	$ 32.09	$ 27.62	$ 29.10	$ 28.11	$ 35.19	$ 28.11
Dividends declared per common share	$ 0.12	$ 0.12	$ 0.12	$ —	$ 0.12	$ 0.36	$ 0.48

(1)	See the reconciliation of these non-GAAP measures to the most directly comparable GAAP measures on pg 13.

Average Balances, Interest, Rates

	Quarter Ended
	December 31, 2025							September 30, 2025							June 30, 2025
(Dollars in thousands)	Average Balance			Interest		Yield/Rate		Average Balance			Interest		Yield/Rate		Average Balance			Interest		Yield/Rate
ASSETS
Interest bearing deposits in other financial institutions	$	100,035		$	903	3.61	%	$	90,880		$	991	4.36	%	$	57,749		$	614	4.25	%
Federal funds sold		1,113			10	3.59	%		1,285			12	3.74	%		868			8	3.69	%
Securities available-for-sale		327,747			1,877	2.29	%		327,030			1,965	2.40	%		327,867			1,980	2.42	%
Loans receivable		1,454,174			20,496	5.64	%		1,474,324			20,246	5.49	%		1,486,861			19,940	5.36	%
Federal Home Loan Bank stock		6,547			126	7.70	%		6,547			126	7.70	%		6,547			128	7.82	%
Total interest earning assets		1,889,616		$	23,412	4.96	%		1,900,066		$	23,340	4.91	%		1,879,892		$	22,670	4.82	%
Cash and non-interest bearing deposits in other financial institutions		23,385							24,882							27,192
Allowance for credit losses		(18,049	)						(18,243	)						(18,028	)
Other non-interest bearing assets		146,675							152,135							152,880
Total assets	$	2,041,627						$	2,058,840						$	2,041,936

LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing deposits	$	1,458,748		$	7,605	2.09	%	$	1,478,543		$	7,996	2.16	%	$	1,470,225		$	7,780	2.12	%
Repurchase agreements		40,968			317	3.10	%		46,498			392	3.37	%		44,401			370	3.33	%
Borrowed funds		48,089			448	3.73	%		55,904			509	3.64	%		58,995			575	3.90	%
Total interest bearing liabilities		1,547,805		$	8,370	2.16	%		1,580,945		$	8,897	2.25	%		1,573,621		$	8,725	2.22	%
Non-interest bearing deposits		288,073							285,347							278,620
Other non-interest bearing liabilities		35,588							36,397							37,703
Total liabilities		1,871,466							1,902,689							1,889,944
Total stockholders' equity		170,161							156,151							151,992
Total liabilities and stockholders' equity	$	2,041,627						$	2,058,840						$	2,041,936

Net interest income				$	15,042						$	14,443						$	13,945
Return on average assets		0.39	%						0.68	%						0.42	%
Return on average equity		4.66	%						8.96	%						5.66	%
Net interest margin		3.18	%						3.04	%						2.97	%
Net interest margin, tax-equivalent (non-GAAP)⁽¹⁾		3.32	%						3.18	%						3.11	%
Net interest spread		2.80	%						2.66	%						2.60	%
Ratio of interest-earning assets to interest-bearing liabilities	1.22x							1.20x							1.19x

(1)	See the reconciliation of these non-GAAP measures to the most directly comparable GAAP measures on pg 13.

Consolidated Balance Sheets

	As of
(Dollars in thousands)	12/31/2025			9/30/2025			6/30/2025			3/31/2025			12/31/2024
ASSETS
Cash and non-interest bearing deposits in other financial institutions	$	18,265		$	19,458		$	23,027		$	18,563		$	17,883
Interest bearing deposits in other financial institutions		101,382			84,157			79,976			52,829			52,047
Federal funds sold		-			563			411			975			654
Total cash and cash equivalents		119,647			104,178			103,414			72,367			70,584
Securities available-for-sale		316,227			335,150			327,845			330,127			333,554
Loans held-for-sale		1,096			2,641			834			2,849			1,253
Loans receivable, net of deferred fees and costs		1,450,387			1,473,774			1,484,278			1,491,696			1,508,976
Less: allowance for credit losses		(17,506	)		(17,977	)		(18,184	)		(17,955	)		(16,911	)
Net loans receivable		1,432,881			1,455,797			1,466,094			1,473,741			1,492,065
Federal Home Loan Bank stock		6,547			6,547			6,547			6,547			6,547
Accrued interest receivable		7,781			7,585			7,651			7,821			7,721
Premises and equipment		44,976			45,544			46,179			46,680			47,259
Cash value of bank owned life insurance		33,586			33,843			33,932			33,712			33,514
Goodwill		22,395			22,395			22,395			22,395			22,395
Other intangible assets		1,172			1,273			1,414			1,635			1,860
Other assets		34,873			37,771			41,606			41,840			43,947
Total assets	$	2,021,181		$	2,052,724		$	2,057,911		$	2,039,714		$	2,060,699
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing	$	267,441		$	280,296		$	271,172		$	281,461		$	263,324
Interest bearing		1,459,530			1,470,350			1,483,678			1,468,923			1,497,242
Total		1,726,971			1,750,646			1,754,850			1,750,384			1,760,566
Repurchase agreements		39,152			48,426			48,331			45,053			40,116
Borrowed funds		45,551			55,000			65,000			56,657			65,000
Accrued expenses and other liabilities		34,844			33,157			35,477			35,813			43,603
Total liabilities		1,846,518			1,887,229			1,903,658			1,887,907			1,909,285
Stockholders' Equity:
Preferred stock, no par or stated value; 10,000,000 shares authorized, none outstanding		-			-			-			-			-
Common stock, no par or stated value; 10,000,000 shares authorized⁽¹⁾		-			-			-			-			-
Additional paid-in capital		70,331			70,233			70,263			70,132			70,034
Accumulated other comprehensive loss		(41,662	)		(49,266	)		(57,560	)		(58,244	)		(58,084	)
Retained earnings		145,994			144,528			141,550			139,919			139,464
Total stockholders' equity		174,663			165,495			154,253			151,807			151,414
Total liabilities and stockholders' equity	$	2,021,181		$	2,052,724		$	2,057,911		$	2,039,714		$	2,060,699

(1)	Shares of common stock issued and outstanding were 4,326,747 at 12/31/2025; 4,327,511 at 9/30/2025; 4,324,889 at 6/30/2025; 4,324,485 at 3/31/2025; and 4,313,698 at 12/31/24.

Consolidated Statements of Income

	Quarter Ended
(Dollars in thousands, except per share data)	12/31/2025			9/30/2025			6/30/2025			3/31/2025		12/31/2024
Interest income:
Loans	$	20,496		$	20,246		$	19,940		$	19,655	$	19,802
Securities & short-term investments		2,916			3,094			2,730			2,686		2,793
Total interest income		23,412			23,340			22,670			22,341		22,595
Interest expense:
Deposits		7,605			7,996			7,780			8,045		8,812
Borrowings		765			901			945			983		1,176
Total interest expense		8,370			8,897			8,725			9,028		9,988
Net interest income		15,042			14,443			13,945			13,313		12,607
Provision for (benefit from) credit losses		(84	)		(301	)		(274	)		454		(579	)
Net interest income after provision for credit losses		15,126			14,744			14,219			12,859		13,186
Non-interest income:
Fees and service charges		1,485			1,463			1,330			1,109		1,439
Wealth management operations		659			759			696			619		728
Gain on tax credit investment		-			23			-			67		1,236
Gain on sale of loans held-for-sale, net		346			265			378			230		328
Bank owned life insurance		522			439			220			198		202
Gain (loss) on sale of property and equipment		1			(56	)		-			-		(212	)
Loss on sale of securities, net		(1,577	)		-			-			-		-
Other		37			20			59			6		11
Total non-interest income		1,473			2,913			2,683			2,229		3,732
Non-interest expense:
Compensation and benefits		7,573			7,330			7,313			7,372		6,628
Occupancy and equipment		2,111			2,004			1,935			2,111		2,045
Data processing		1,465			1,116			1,341			1,039		1,202
Federal deposit insurance premiums		417			399			471			433		457
Marketing		230			257			214			86		220
Professional and outside services		906			945			1,115			1,260		1,341
Technology		521			549			545			454		509
Other		1,558			1,497			1,852			1,717		1,845
Total non-interest expense		14,781			14,097			14,786			14,472		14,247
Income before income taxes		1,818			3,560			2,116			616		2,671
Income tax expenses (benefit)		(166	)		63			(35	)		161		569
Net income	$	1,984		$	3,497		$	2,151		$	455	$	2,102

Earnings per common share:
Basic	$	0.46		$	0.82		$	0.50		$	0.11	$	0.49
Diluted	$	0.46		$	0.81		$	0.50		$	0.11	$	0.49

Consolidated Statements of Income (cont'd)

	Year Ended
(Dollars in thousands, except per share data)	12/31/2025			12/31/2024
Interest income:
Loans	$	80,337		$	77,515
Securities & short-term investments		11,426			11,663
Total interest income		91,763			89,178
Interest expense:
Deposits		31,426			35,162
Borrowings		3,594			5,569
Total interest expense		35,020			40,731
Net interest income		56,743			48,447
Provision for (benefit from) credit losses		(205	)		(503	)
Net interest income after provision for credit losses		56,948			48,950
Non-interest income:
Fees and service charges		5,387			5,312
Wealth management operations		2,733			2,855
Gain on tax credit investment		90			1,236
Gain on sale of loans held-for-sale, net		1,219			1,138
Bank owned life insurance		1,379			812
Gain (loss) on sale of property and equipment		(55	)		11,661
Loss on sale of securities, net		(1,577	)		(531	)
Other		122			164
Total non-interest income		9,298			22,647
Non-interest expense:
Compensation and benefits		29,588			27,737
Occupancy and equipment		8,161			8,250
Data processing		4,961			4,672
Federal deposit insurance premiums		1,720			1,790
Marketing		787			799
Professional and outside services		4,226			5,405
Technology		2,069			2,243
Other		6,624			7,246
Total non-interest expense		58,136			58,142
Income before income taxes		8,110			13,455
Income tax expenses		23			1,325
Net income	$	8,087		$	12,130

Earnings per common share:
Basic	$	1.89		$	2.85
Diluted	$	1.88		$	2.84

Loans

	As of
(Dollars in thousands)	12/31/2025			9/30/2025		6/30/2025			3/31/2025			12/31/2024			12/31/2025 vs 9/30/2025					12/31/2025 vs 12/31/2024
Residential real estate	$	442,443		$	450,007	$	457,248		$	458,424		$	467,293		$	(7,564	)	(1.7	)%	$	(24,850	)	(5.3	)%
Home equity		53,497			51,813		51,112			49,752			49,758			1,684		3.3	%		3,739		7.5	%
Commercial real estate		555,594			564,558		551,091			554,866			551,674			(8,964	)	(1.6	)%		3,920		0.7	%
Construction and land development		77,208			79,678		74,795			86,728			82,874			(2,470	)	(3.1	)%		(5,666	)	(6.8	)%
Multifamily		183,902			192,698		200,440			204,964			212,455			(8,796	)	(4.6	)%		(28,553	)	(13.4	)%
Commercial business		99,304			96,192		105,636			99,519			104,246			3,112		3.2	%		(4,942	)	(4.7	)%
Consumer		870			348		2,347			504			551			522		150.0	%		319		57.9	%
Manufactured homes		23,708			24,372		25,146			25,762			26,708			(664	)	(2.7	)%		(3,000	)	(11.2	)%
Government		12,298			12,298		14,628			9,279			11,024			—		—	%		1,274		11.6	%
Loans receivable		1,448,824			1,471,964		1,482,443			1,489,798			1,506,583			(23,140	)	(1.6	)%		(57,759	)	(3.8	)%
Net deferred loan origination costs		1,606			1,719		2,012			2,209			2,439			(113	)	(6.6	)%		(833	)	(34.2	)%
Loan clearing funds		(43	)		91		(177	)		(311	)		(46	)		(134	)	(147.3	)%		3		(6.5	)%
Loans receivable, net	$	1,450,387		$	1,473,774	$	1,484,278		$	1,491,696		$	1,508,976		$	(23,387	)	(1.6	)%	$	(58,589	)	(3.9	)%

Deposits

	As of
(Dollars in thousands)	12/31/2025		9/30/2025		6/30/2025		3/31/2025		12/31/2024		12/31/2025 vs 9/30/2025					12/31/2025 vs 12/31/2024
Checking	$	592,214	$	579,760	$	593,471	$	589,403	$	591,487	$	12,454		2.1	%	$	727		0.1	%
Savings		254,055		257,058		266,070		274,028		275,121		(3,003	)	(1.2	)%		(21,066	)	(7.7	)%
Money market		381,111		377,155		352,616		342,106		333,705		3,956		1.0	%		47,406		14.2	%
Certificates of deposit		499,591		536,673		542,693		544,847		560,253		(37,082	)	(6.9	)%		(60,662	)	(10.8	)%
Total deposits	$	1,726,971	$	1,750,646	$	1,754,850	$	1,750,384	$	1,760,566	$	(23,675	)	(1.4	)%	$	(33,595	)	(1.9	)%

Asset Quality

	As of and for the Quarter Ended
(Dollars in thousands)	12/31/2025		9/30/2025		6/30/2025		3/31/2025		12/31/2024
Non-accruing loans	$	11,899	$	13,892	$	13,526	$	12,483	$	13,738
Accruing loans delinquent more than 90 days		-		-		145		-		-
Securities in non-accrual		1,882		1,616		1,616		1,630		1,419
Total nonperforming assets	$	13,781	$	15,508	$	15,287	$	14,113	$	15,157

Allowance for credit losses (ACL):
ACL specific allowances for collateral dependent loans	$	263	$	912	$	570	$	259	$	284
ACL general allowances for loan portfolio		17,243		17,065		17,614		17,696		16,627
Total ACL	$	17,506	$	17,977	$	18,184	$	17,955	$	16,911

Allowance for Credit Losses

	As of and for the Quarter Ended
(Dollars in thousands)	12/31/2025			9/30/2025			6/30/2025			3/31/2025			12/31/2024
Beginning allowance for credit losses	$	17,977		$	18,184		$	17,955		$	16,911		$	18,516
Provision for (benefit from) loan losses		(170	)		61			(185	)		1,077			597
Net (charge-offs) recoveries		(301	)		(268	)		414			(33	)		(2,202	)
Ending allowance for credit losses	$	17,506		$	17,977		$	18,184		$	17,955		$	16,911

Bank-Level Regulatory Capital Requirements

	December 31, 2025
	Actual⁽¹⁾				Minimum Required For Capital Adequacy Purposes					Minimum Required To Be Well Capitalized Under Prompt Corrective Action Regulations
(Dollars in thousands)	Amount		Ratio		Amount		Ratio			Amount		Ratio
Common equity tier 1 capital to risk-weighted assets	$	186,214	11.86	%	$	70,626		4.50	%	$	102,016	6.50	%
Tier 1 capital to risk-weighted assets	$	186,214	11.86	%	$	94,168		6.00	%	$	125,558	8.00	%
Total capital to risk-weighted assets	$	205,472	13.09	%	$	125,558		8.00	%	$	156,947	10.00	%
Tier 1 leverage ratio	$	186,214	8.93	%	$	83,379		4.00	%	$	104,223	5.00	%

(1)	Current quarter ratios are estimated.

Reconciliation of Non-GAAP Performance Measures

	Quarter Ended
(Dollars in thousands, except per share amounts)	12/31/2025			9/30/2025			6/30/2025			3/31/2025			12/31/2024
Tangible Common Ratios
Stockholder's equity (GAAP)	$	174,663		$	165,495		$	154,253		$	151,807		$	151,414
Less: Goodwill (GAAP)		(22,395	)		(22,395	)		(22,395	)		(22,395	)		(22,395	)
Less: Other intangibles (GAAP)		(1,172	)		(1,273	)		(1,414	)		(1,635	)		(1,860	)
Tangible common equity (non-GAAP)	$	151,096		$	141,827		$	130,444		$	127,777		$	127,159
Add: Accumulated other comprehensive loss (GAAP)		41,662			49,266			57,560			58,244			58,084
Tangible common equity adjusted for accumulated other comprehensive loss (non-GAAP) ⁽¹⁾	$	192,758		$	191,093		$	188,004		$	186,021		$	185,243
Total assets (GAAP)	$	2,021,181		$	2,052,724		$	2,057,911		$	2,039,714		$	2,060,699
Less: Goodwill (GAAP)		(22,395	)		(22,395	)		(22,395	)		(22,395	)		(22,395	)
Less: Other intangibles (GAAP)		(1,172	)		(1,273	)		(1,414	)		(1,635	)		(1,860	)
Tangible assets (non-GAAP)	$	1,997,614		$	2,029,056		$	2,034,102		$	2,015,684		$	2,036,444
Shares outstanding - end of quarter		4,327,511			4,327,511			4,324,889			4,324,485			4,313,698
Common book value per share (GAAP)	$	40.36		$	38.24		$	35.67		$	35.10		$	35.10
Tangible common book value per share (non-GAAP)	$	34.92		$	32.77		$	30.16		$	29.55		$	29.48
Tangible common book value per share adjusted for accumulated other comprehensive loss (non-GAAP)	$	44.54		$	44.16		$	43.47		$	43.02		$	42.94
Total equity to total assets (GAAP)		8.64	%		8.06	%		7.50	%		7.44	%		7.35	%
Tangible common equity to tangible assets (non-GAAP)		7.56	%		6.99	%		6.41	%		6.34	%		6.24	%
Tangible common equity adjusted for accumulated other comprehensive loss to tangible assets (non-GAAP)		9.65	%		9.42	%		9.24	%		9.23	%		9.10	%

Calculation of net interest margin, taxable-equivalent basis
Net interest income (GAAP)	$	15,042		$	14,443		$	13,945		$	13,313		$	12,607
Tax-equivalent adjustment on securities and loans ⁽²⁾		629			663			674			670			674
Net interest income (tax-equivalent basis)	$	15,671		$	15,106		$	14,619		$	13,983		$	13,281
Total average earning assets	$	1,889,616		$	1,900,066		$	1,879,892		$	1,895,847		$	1,905,333
Net interest margin		3.18	%		3.04	%		2.97	%		2.81	%		2.65	%
Net interest margin (tax-equivalent basis)		3.32	%		3.18	%		3.11	%		2.95	%		2.79	%

Efficiency ratio
Total non-interest expense	$	14,781		$	14,097		$	14,786		$	14,472		$	14,247
Total revenue		16,515			17,356			16,628			15,542			16,339
Efficiency ratio		89.50	%		81.22	%		88.92	%		93.11	%		87.20	%

(1)	Tangible common equity adjusted for accumulated other comprehensive loss is a non-GAAP financial measure used by management to evaluate the Company's capital position without the impact of unrealized losses recorded in accumulated other comprehensive loss. This measure adjusts tangible common equity by adding back unrealized losses included in accumulated other comprehensive loss.
(2)	The tax equivalent adjustment represents the increase in net interest income needed to reflect the tax-exempt income from certain investment securities and loans on tax-equivalent basis using a federal statutory corporate rate of 21%.

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Finward Bancorp Announces Fourth Quarter 2025 Results