What changed in this filing

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Item 1. Financial Statements

2025-11-12 compared with 2025-08-13 · 159 added, 146 removed, 1079 unchanged (22% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

(Dollars in thousands) June 30,

(Dollars in thousands) September 30,

2025 December 31,

31 unchanged sentences

shares issued and outstanding:

June 30, 2025 - 4,324,889 December 31, 2024 - 4,313,698

September 30, 2025 - 4,327,511 December 31, 2024 - 4,313,698

Additional paid-in capital 70,233 70,034

5 unchanged sentences

Finward Bancorp

Consolidated Statements of Income

Three Months Ended June 30, Six Months Ended June 30,

Condensed Consolidated Statements of Income

Three Months Ended September 30, Nine Months Ended September 30,

(Dollars in thousands, except per share data) 2025 2024 2025 2024

15 unchanged sentences

Wealth management operations 759 731 2,074 2,127

Gain on tax credit investment - - 67 -

Gain on sale of loans held-for-sale, net 378 320 608 472

Loss on sale of securities, net - - - ( 531 )

Increase in cash value of bank owned life insurance 220 212 418 405

Gain on sale of real estate - 15 - 11,873

Gain (loss) on tax credit investment 23 - 90 -

Gain (loss) on sale of loans held-for-sale, net 265 338 873 810

Gain (loss) on sale of securities, net - - - ( 531 )

Increase (decrease) in cash value of bank owned life insurance 210 205 628 610

Gain (loss) on sale of real estate ( 56 ) - ( 56 ) 11,873

Other 249 130 314 154

19 unchanged sentences

Finward Bancorp

Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended June 30 Six Months Ended June 30

Condensed Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended September 30 Nine Months Ended September 30

(Dollars in thousands) 2025 2024 2025 2024

9 unchanged sentences

Finward Bancorp

Consolidated Statements of Changes in Stockholder's Equity

Condensed Consolidated Statements of Changes in Stockholder's Equity

(Dollars in thousands, except per share data) Common

4 unchanged sentences

Stockholders'

Balance at March 31, 2024 $ - $ 69,727 $ ( 56,313 ) $ 138,167 $ 151,581

Balance at June 30, 2024 $ - $ 69,778 $ ( 58,939 ) $ 137,792 $ 148,631

Net income - - - 606 606

Other comprehensive loss, net of tax - - ( 2,626 ) - ( 2,626 )

Net surrender value of 3,364 restricted stock awards

- ( 82 ) - - ( 82 )

Other comprehensive income (loss), net of tax - - 10,698 - 10,698

Stock-based compensation expense - 138 - - 138

1 unchanged sentence

- - - ( 518 ) ( 518 )

Balance at June 30, 2024 $ - $ 69,778 $ ( 58,939 ) $ 137,792 $ 148,631

Balance at September 30, 2024 $ - $ 69,916 $ ( 48,241 ) $ 137,880 $ 159,555

Balance at January 1, 2024 $ - $ 69,555 $ ( 51,613 ) $ 129,403 $ 147,345

Net income - - - 10,029 10,029

Other comprehensive loss, net of tax - - ( 7,326 ) - ( 7,326 )

Other comprehensive income (loss), net of tax - - 3,372 - 3,372

Net surrender value of 3,364 restricted stock awards

3 unchanged sentences

- - - ( 1,552 ) ( 1,552 )

Balance at September 30, 2024 $ - $ 69,916 $ ( 48,241 ) $ 137,880 $ 159,555

Balance at June 30, 2025 $ - $ 70,263 $ ( 57,560 ) $ 141,550 $ 154,253

Balance at March 31, 2025 $ - $ 70,132 $ ( 58,244 ) $ 139,919 $ 151,807

Net income - - - 3,497 3,497

Other comprehensive income, net of tax - - 684 - 684

Other comprehensive income (loss), net of tax - - 8,294 - 8,294

Net surrender value of 5,328 restricted stock awards

- ( 146 ) - - ( 146 )

Stock-based compensation expense - 116 - - 116

1 unchanged sentence

- - - ( 519 ) ( 519 )

Balance at June 30, 2025 $ - $ 70,263 $ ( 57,560 ) $ 141,550 $ 154,253

Balance at September 30, 2025 $ - $ 70,233 $ ( 49,266 ) $ 144,528 $ 165,495

Balance at January 1, 2025 $ - $ 70,034 $ ( 58,084 ) $ 139,464 $ 151,414

Net income - - - 6,103 6,103

Other comprehensive income, net of tax - - 524 - 524

Other comprehensive income (loss), net of tax - - 8,818 - 8,818

Net surrender value of 5,328 restricted stock awards

- ( 146 ) - - ( 146 )

Stock-based compensation expense - 345 - - 345

1 unchanged sentence

- - - ( 1,039 ) ( 1,039 )

Balance at June 30, 2025 $ - $ 70,263 $ ( 57,560 ) $ 141,550 $ 154,253

Balance at September 30, 2025 $ - $ 70,233 $ ( 49,266 ) $ 144,528 $ 165,495

See accompanying notes to condensed consolidated financial statements.

Finward Bancorp

Consolidated Statements of Cash Flows

Six months ended June 30,

Condensed Consolidated Statements of Cash Flows

Nine months ended September 30,

(Dollars in thousands) 2025 2024

7 unchanged sentences

Cash payments for lease liabilities ( 1,201 ) ( 965 )

Loss on sale of securities, net - 531

Gain on sale of loans held-for-sale, net ( 624 ) ( 470 )

Gain on sale of real estate - ( 11,873 )

Gain on sale of foreclosed real estate - ( 1 )

Increase of cash value of bank owned life insurance ( 418 ) ( 405 )

Gain on derivatives 16 ( 2 )

Provision for credit losses 180 76

(Gain) loss on sale of securities, net - 531

(Gain) loss on sale of loans held-for-sale, net ( 906 ) ( 744 )

(Gain) loss on sale of real estate 56 ( 11,873 )

(Gain) loss on sale of foreclosed real estate - ( 1 )

(Increase) decrease of cash value of bank owned life insurance ( 628 ) ( 610 )

(Gain) loss on death benefits of bank-owned life insurance ( 236 ) -

(Gain) loss on derivatives 33 ( 66 )

Provision for (benefit from) credit losses ( 121 ) 76

Interest receivable 136 603

3 unchanged sentences

Total adjustments ( 3,943 ) ( 11,029 )

Net cash provided by operating activities 960 2,725

Net cash provided by (used in) operating activities 2,160 ( 1,000 )

CASH FLOWS FROM INVESTING ACTIVITIES:

5 unchanged sentences

Proceeds from sale of foreclosed real estate - 72

Net cash provided by investing activities 29,891 42,404

Proceeds from death benefits of bank owned life insurance 535 -

Net cash provided by (used in) investing activities 44,229 42,972

CASH FLOWS FROM FINANCING ACTIVITIES:

25 unchanged sentences

generally accepted accounting principles ("GAAP") for complete presentation of condensed consolidated financial statements.

In the opinion of management, the condensed consolidated financial statements contain all adjustments necessary to present fairly the condensed consolidated balance sheets of the Company as of June 30, 2025, and December 31, 2024, and the condensed consolidated statements of income, comprehensive income (loss), and changes in stockholders’ equity for the three and six months ended June 30, 2025, and 2024, and condensed consolidated statements of cash flows for the six months ended June 30, 2025, and 2024.

The income reported for the six months ended June 30, 2025, is not necessarily indicative of the results to be expected for the full year.

In the opinion of management, the condensed consolidated financial statements contain all adjustments necessary to present fairly the condensed consolidated balance sheets of the Company as of September 30, 2025, and December 31, 2024, and the condensed consolidated statements of income, comprehensive income (loss), and changes in stockholders’ equity for the three and nine months ended September 30, 2025, and 2024, and condensed consolidated statements of cash flows for the nine months ended September 30, 2025, and 2024.

The income reported for the nine months ended September 30, 2025, is not necessarily indicative of the results to be expected for the full year.

The Company's revenue is primarily derived from the business of banking.

11 unchanged sentences

Note 2 - Use of Estimates

Preparing financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period, as well as the disclosures provided.

Preparing condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period, as well as the disclosures provided.

Actual results could differ from those estimates.

20 unchanged sentences

We are currently evaluating the impact of this accounting standard, but we do not expect it to have a material impact on our condensed consolidated financial statements.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets, which introduces a practical expedient for all entities and an accounting policy election that is available to all entities other than public business entities related to applying ASC-320 to simplify the measurement of credit losses on current accounts receivable and current contract assets that occur from transactions accounted for under ASC 606.

The amendments are effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods beginning after December 15, 2025.

Early adoption is permitted.

We are currently evaluating the impact of this accounting standard, but we do not expect it to have a material impact on our condensed consolidated financial statements.

Note 4 - Securities

2 unchanged sentences

Losses Estimated

June 30, 2025

September 30, 2025

government sponsored entities $ 8,884 $ - $ ( 498 ) $ 8,386

11 unchanged sentences

Total securities available-for-sale $ 409,968 $ - $ ( 76,414 ) $ 333,554

The cost basis and estimated fair value of available-for-sale debt securities at June 30, 2025, by contractual maturity, were as follows.

The cost basis and estimated fair value of available-for-sale debt securities at September 30, 2025, by contractual maturity, were as follows.

Securities not due at a single maturity date, primarily collateralized mortgage obligations and residential mortgage-backed securities, are shown separately.

1 unchanged sentence

Available-for-sale

June 30, 2025 Cost

September 30, 2025 Cost

Basis Estimated

6 unchanged sentences

Sales of available-for-sale securities were as follows for the quarter ended:

Three Months Ended June 30 Six Months Ended June 30

Three Months Ended September 30 Nine Months Ended September 30

2025 2024 2025 2024

5 unchanged sentences

Unrealized loss

Beginning balance, April 1, 2025 $ ( 58,244 )

Beginning balance, June 30, 2025 $ ( 57,560 )

Period change 8,294

Ending balance, June 30, 2025 $ ( 57,560 )

Ending balance, September 30, 2025 $ ( 49,266 )

(Dollars in thousands)

Unrealized loss

Beginning balance, April 1, 2024 $ ( 56,313 )

Beginning balance, June 30, 2024 $ ( 58,939 )

Current period change 10,698

Ending balance, June 30, 2024 $ ( 58,939 )

Ending balance, September 30, 2024 $ ( 48,241 )

(Dollars in thousands)

2 unchanged sentences

Period change 8,818

Ending Balance, June 30, 2025 $ ( 57,560 )

Ending Balance, September 30, 2025 $ ( 49,266 )

(Dollars in thousands)

2 unchanged sentences

Current period change 3,372

Ending balance, June 30, 2024 $ ( 58,939 )

Securities with market values of approximately $ 327.1 million and $ 326.5 million were pledged as of June 30, 2025 and December 31, 2024, respectively, as collateral for repurchase agreements, public funds, and for other purposes as permitted or required by law.

Securities with unrealized losses at June 30, 2025, and December 31, 2024 not recognized in income are as follows:

Ending balance, September 30, 2024 $ ( 48,241 )

Securities with market values of approximately $ 334.4 million and $ 326.5 million were pledged as of September 30, 2025 and December 31, 2024, respectively, as collateral for repurchase agreements, public funds, and for other purposes as permitted or required by law.

Securities with unrealized losses at September 30, 2025, and December 31, 2024 not recognized in income are as follows:

(Dollars in thousands)

8 unchanged sentences

in Loss Position

June 30, 2025

September 30, 2025

government sponsored entities $ - $ - $ 8,386 $ ( 498 ) $ 8,386 $ ( 498 ) 100.0 %

24 unchanged sentences

The fair values are expected to recover as the securities approach maturity.

Collateralized debt obligations with a cost basis of $ 2.1 million and fair value of $ 1.6 million at June 30, 2025 and $ 1.4 million million at December 31, 2024, had previously recorded impairment of $ 173 thousand, which will not be recoverable until maturity of the security.

Accrued interest receivable on AFS debt securities totaled $ 2.1 million at June 30, 2025, and $ 2.3 million at December 31, 2024.

Collateralized debt obligations with a cost basis of $ 2.1 million and fair value of $ 1.6 million at September 30, 2025 and $ 1.4 million at December 31, 2024, had previously recorded impairment of $ 173 thousand, which will not be recoverable until maturity of the security.

Accrued interest receivable on AFS debt securities totaled $ 2.2 million at September 30, 2025, and $ 2.3 million at December 31, 2024.

These amounts are excluded from the estimate of credit losses.

42 unchanged sentences

Commercial construction loans are typically made for periods not to exceed two years or date of occupancy, whichever is less.

Commercial Business and Farmland Loans.

Commercial Business.

Although the Company’s priority in extending various types of commercial business loans changes from time to time, the basic considerations in determining the makeup of the commercial business loan portfolio are economic factors, regulatory requirements and money market conditions.

2 unchanged sentences

The following loans, although not inclusive, are considered preferable for the Company’s commercial loan portfolio:

loans collateralized by liquid assets;

agriculture loans, loans collateralized by liquid assets;

loans secured by general use machinery and equipment;

14 unchanged sentences

The Company is permitted to purchase non-rated municipal securities, tax anticipation notes and warrants within the local market area.

Loans consist of the following as of June 30, 2025, and December 31, 2024:

(Dollars in thousands) June 30, 2025 December 31, 2024

Loans consist of the following as of September 30, 2025, and December 31, 2024:

(Dollars in thousands) September 30, 2025 December 31, 2024

Loans secured by real estate:

16 unchanged sentences

Days Past Due Total Past Due and

Accruing Current Accruing Loans Non-accrual

Accruing Current Accruing Loans Nonaccrual

Loans Total Loans

June 30, 2025

September 30, 2025

Residential real estate $ 4,848 $ 615 $ - $ 5,463 $ 438,730 $ 444,193 $ 5,814 $ 450,007

19 unchanged sentences

Total $ 14,907 $ 2,799 $ - $ 17,706 $ 1,475,139 $ 1,492,845 $ 13,738 $ 1,506,583

The following table shows the amortized cost of loans, segregated by portfolio segment, credit quality rating and year of origination as of June 30, 2025, and December 31, 2024, and gross charge-offs for the six months ended June 30, 2025, and for the year ended December 31, 2024.

June 30, 2025 2025 2024 2023 2022 2021 Prior Revolving Revolving

The following table shows the amortized cost of loans, segregated by portfolio segment, credit quality rating and year of origination as of September 30, 2025, and December 31, 2024, and gross charge-offs for the nine months ended September 30, 2025, and for the year ended December 31, 2024.

September 30, 2025 2025 2024 2023 2022 2021 Prior Revolving Revolving

Total Loans Receivable $ 96,295 $ 125,770 $ 128,741 $ 272,358 $ 271,138 $ 474,161 $ 102,022 $ 1,479 $ 1,471,964

19 unchanged sentences

Pass (1-6) $ 26,125 $ 26,218 $ 16,188 $ 3,165 $ 1,562 $ 1,010 $ 3,103 $ - $ 77,371

Special Mention (7) - - 458 - 122 - - - 580

Substandard (8) - - 1,002 64 1,241 - - - 2,307

13 unchanged sentences

Pass (1-6) $ 154 $ 65 $ 86 $ 22 $ 21 $ - $ - $ - $ 348

Substandard (8) - - - - 2 - - - 2

Total $ 154 $ 65 $ 86 $ 22 $ 21 $ - $ - $ - $ 348

2 unchanged sentences

Pass (1-6) $ - $ - $ - $ 1,749 $ 10,707 $ 11,826 $ - $ - $ 24,282

Special Mention (7) - - - - - 90 - - $ 90

Substandard (8) - - - - - - - - -

105 unchanged sentences

Loans are still considered collectible, but due to increased risks and defined weaknesses of the credit, some loss could be incurred in collection if the deficiencies are not corrected.

Such loans have been placed on non-accrual status and may be heavily dependent upon collateral possessing a value that is difficult to determine or based upon some near-term event which lacks clear certainty.

Such loans have been placed on nonaccrual status and may be heavily dependent upon collateral possessing a value that is difficult to determine or based upon some near-term event which lacks clear certainty.

These loans have all of the weaknesses of those classified as Substandard;

3 unchanged sentences

Loans classified as substandard or worse were individually evaluated for impairment and specific reserves were established, if applicable.

Risk gradings for loans with balances greater than $ 1 million are updated every 12 months through analysis during origination, renewals, modifications, or regular annual review.

gradings for loans with balances greater than $ 1 million are updated every 12 months through analysis during origination, renewals, modifications, or regular annual review.

Risk gradings for loans with balances less than $ 1 million are updated primarily through analysis during origination, renewals, modifications, or periodic review.

9 unchanged sentences

Because the effect of most modifications to borrowers experiencing financial difficulty is already included in the allowance for credit losses, no change to the allowance for credit losses is generally recorded for these modifications.

The following table shows the amortized cost basis of loans at June 30, 2025, that were both experiencing financial difficulty and modified during the three and six months ended June 30, 2025, segregated by portfolio segment and type of modification.

The following table shows the amortized cost basis of loans at September 30, 2025, that were both experiencing financial difficulty and modified during the three and nine months ended September 30, 2025, 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 financing receivable is also presented below.

For the three months ended June 30, 2025

For the three months ended September 30, 2025

(Dollars in thousands) Payment

4 unchanged sentences

Reduction % of Total

Commercial business $ 1,851 $ - $ - $ - 1.75 %

Residential real estate $ - $ 307 $ - $ - 0.07 %

Commercial real estate - 390 - - 0.07 %

Total $ - $ 697 $ - $ - 0.05 %

For the three months ended June 30, 2024

For the three months ended September 30, 2024

(Dollars in thousands) Payment

6 unchanged sentences

Total $ 121 $ 332 $ - $ - 0.03 %

For the six months ended June 30, 2025

For the nine months ended September 30, 2025

(Dollars in thousands) Payment

5 unchanged sentences

Residential real estate $ - $ 472 $ - $ - 0.10 %

Commercial real estate 135 390 - - 0.09 %

Construction and land development 654 - - - 0.82 %

Commercial business 1,053 - - - 1.09 %

Total $ 1,842 $ 862 $ - $ - 0.18 %

For the six months ended June 30, 2024

For the nine months ended September 30, 2024

(Dollars in thousands) Payment

6 unchanged sentences

Total $ 253 $ 1,807 $ - $ - 0.14 %

The financial effects of payment delay modifications and term extension modifications had a forbearance average of five months and six months weighted average extension to life of loan, respectively.

The financial effects of payment delay modifications and term extension modifications had a forbearance average of five months and one hundred eighty-seven months weighted average extension to life of loan, respectively.

There were no commitments to lend additional amounts to the borrowers included in the previous tables.

The borrowers with term extension have had their maturity dates extended and as a result their monthly payments were reduced or had payments added to the end of the loan which resulted in payment relief.

For the three months ended June 30, 2025

For the three months ended September 30, 2025

(Dollars in thousands) Principal Forgiveness Weighted average interest rate reduction Weighted average term extension (months) Payment delay

Commercial business $ - — % - 5

For the three months ended June 30, 2024

Residential real estate $ - — % 7 -

Commercial real estate $ - — % 180 -

For the three months ended September 30, 2024

(Dollars in thousands) Principal Forgiveness Weighted average interest rate reduction Weighted average term extension (months) Payment delay

Residential real estate $ - — % 4 7

For the six months ended June 30, 2025

For the nine months ended September 30, 2025

(Dollars in thousands) Principal Forgiveness Weighted average interest rate reduction Weighted average term extension (months) Payment delay

Residential real estate $ - — % 7 -

Commercial business $ - — % - 5

For the six months ended June 30, 2024

Commercial real estate $ - — % 180 5

For the nine months ended September 30, 2024

(Dollars in thousands) Principal Forgiveness Weighted average interest rate reduction Weighted average term extension (months) Payment delay

2 unchanged sentences

The following tables present the performance of such loans in the twelve months following modification.

June 30, 2025

September 30, 2025

(Dollars in thousands) Current 30-59 Days

4 unchanged sentences

Home equity 30 - - -

Commercial real estate 390 - - 135

Construction and land development - - - 654

Commercial business 2 - - 1,051

Total $ 922 $ - $ 378 $ 2,155

June 30, 2024

September 30, 2024

(Dollars in thousands) Current 30-59 Days

7 unchanged sentences

All modified loans are deemed collectible.

As part of the normal course of business, the Company had $ 181 thousand in loans involved in the foreclosure process at June 30, 2025 compared to $ 700 thousand at December 31, 2024.

The Company had no other real estate owned as of June 30, 2025 and December 31, 2024.

As part of the normal course of business, the Company had $ 2.1 million in loans involved in the foreclosure process at September 30, 2025 compared to $ 700 thousand at December 31, 2024.

The Company had no other real estate owned as of September 30, 2025 and December 31, 2024.

Acquired Loan Purchase Discounts

As part of the fair value of loans receivable, there was a net fair value discount for loans acquired of $ 3.9 million at June 30, 2025, compared to $ 4.4 million at December 31, 2024.

Accretable yield, or income recorded for the six months ended June 30, is as follows:

As part of the fair value of loans receivable, there was a net fair value discount for loans acquired of $ 3.9 million at September 30, 2025, compared to $ 4.4 million at December 31, 2024.

Accretable yield, or income recorded for the nine months ended September 30, is as follows:

(Dollars in thousands) Total

15 unchanged sentences

Due to its minimal loss history, the Company elected to use peer data for a more reasonable calculation.

The following tables show the changes in the allowance for credit losses, segregated by portfolio segment, for the three and six months ended June 30, 2025, and 2024.

The Company's activity in the allowance for credit losses, by loan segment, is summarized below for the three months ended June 30, 2025:

The following tables show the changes in the allowance for credit losses, segregated by portfolio segment, for the three and nine months ended September 30, 2025, and 2024.

The Company's activity in the allowance for credit losses, by loan segment, is summarized below for the three months ended September 30, 2025:

(Dollars in thousands) Beginning Balance Charge-offs Recoveries Provisions Ending Balance

10 unchanged sentences

Total $ 18,184 $ ( 290 ) $ 22 $ 61 $ 17,977

The Company's activity in the allowance for credit losses, by loan segment, is summarized below for the three months ended June 30, 2024:

The Company's activity in the allowance for credit losses, by loan segment, is summarized below for the three months ended September 30, 2024:

(Dollars in thousands) Beginning Balance Charge-offs Recoveries Provisions Ending Balance

10 unchanged sentences

Total $ 18,330 $ ( 47 ) $ 233 $ - $ 18,516

The Company's activity in the allowance for credit losses, by loan segment, is summarized below for the six months ended June 30, 2025:

The Company's activity in the allowance for credit losses, by loan segment, is summarized below for the nine months ended September 30, 2025:

(Dollars in thousands) Beginning Balance Charge-offs Recoveries Provisions Ending Balance

10 unchanged sentences

Total $ 16,911 $ ( 418 ) $ 532 $ 952 $ 17,977

The Company's activity in the allowance for credit losses, by loan segment, is summarized below for the six months ended June 30, 2024:

The Company's activity in the allowance for credit losses, by loan segment, is summarized below for the nine months ended September 30, 2024:

(Dollars in thousands) Beginning Balance Charge-offs Recoveries Provisions Ending Balance

16 unchanged sentences

The table below presents the amortized cost basis and allowance for credit losses (“ACL”) allocated for collateral dependent loans in accordance with ASC 326, which are individually evaluated to determine expected credit losses.

(Dollars in thousands) June 30, 2025

(Dollars in thousands) September 30, 2025

Real Estate Equipment/Inventory Accounts Receivable Vehicles Total ACL Allocation

18 unchanged sentences

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 $ 3.0 million and $ 2.9 million as of June 30, 2025, and December 31, 2024, respectively, and is included in net deferred loan origination cost.

The unamortized balance of the deferred cost reserve totaled $ 2.5 million and $ 2.9 million as of September 30, 2025, and December 31, 2024, respectively, and is included in net deferred loan origination cost.

The following table presents non–accrual loans and loans past due over 90 days still on accrual by class of loans:

As of June 30, 2025 Nonaccrual with

As of September 30, 2025 Nonaccrual with

No Allowance for

25 unchanged sentences

Total $ 9,891 $ 3,847 $ 13,738 $ -

Accrued interest receivable on loans totaled $ 5.4 million on June 30, 2025, and $ 5.3 million on December 31, 2024, and is excluded from the estimate of credit losses.

Accrued interest receivable on loans totaled $ 5.3 million on September 30, 2025, as well as $ 5.3 million on December 31, 2024, and is excluded from the estimate of credit losses.

The Company made the accounting policy election to not measure an ACL for accrued interest receivable.

5 unchanged sentences

(Dollars in thousands) Three months ended,

June 30, 2025 Three months ended,

June 30, 2024

September 30, 2025 Three months ended,

September 30, 2024

Balance, beginning of period $ 2,027 $ 3,914

1 unchanged sentence

Balance, end of period $ 1,666 $ 3,914

(Dollars in thousands) Six months ended,

June 30, 2025 Six months ended,

June 30, 2024

(Dollars in thousands) Nine months ended,

September 30, 2025 Nine months ended,

September 30, 2024

Balance, beginning of period $ 2,739 $ 3,441

4 unchanged sentences

Goodwill balance January 1, $ 22,395 $ 22,395

Goodwill balance June 30, $ 22,395 $ 22,395

Goodwill balance September 30, $ 22,395 $ 22,395

Goodwill arising from business combinations represents the value attributable to unidentifiable intangible assets in the business acquired.

4 unchanged sentences

In addition to goodwill, a core deposit intangible was established from previous acquisitions.

The Company had core deposit intangible balances of $ 1.4 million and $ 1.9 million as of June 30, 2025, and December 31, 2024, respectively.

The Company had core deposit intangible balances of $ 1.3 million and $ 1.9 million as of September 30, 2025, and December 31, 2024, respectively.

The table below summarizes the intangibles amortization:

The amortization recorded for the quarter ended June 30, is as follows:

The amortization recorded for the quarter ended September 30, is as follows:

(Dollars in thousands) Total

The amortization recorded for the six months ended June 30, is as follows:

The amortization recorded for the nine months ended September 30, is as follows:

(Dollars in thousands) Total

6 unchanged sentences

The Company’s end-of-period deposit portfolio balances were as follows:

(Dollars in thousands) June 30, 2025 December 31, 2024

(Dollars in thousands) September 30, 2025 December 31, 2024

Checking $ 579,760 $ 591,487

3 unchanged sentences

Total deposits $ 1,750,646 $ 1,760,566

The aggregate amount of retail and brokered certificates of deposit with a balance of $250 thousand or more was approximately $ 134.3 million at June 30, 2025 and $ 141.4 million at December 31, 2024.

At June 30, 2025, selected maturities of retail and brokered certificate of deposits were as follows:

The aggregate amount of retail and brokered certificates of deposit with a balance of $250 thousand or more was approximately $ 120.7 million at September 30, 2025 and $ 141.4 million at December 31, 2024.

At September 30, 2025, selected maturities of retail and brokered certificate of deposits were as follows:

(Dollars in thousands)

2025 $ 242,577

2029 and thereafter 202

Thereafter 119

Total $ 536,673

6 unchanged sentences

Earnings per common share is computed by dividing net income by the weighted-average number of common shares outstanding.

A reconciliation of the numerators and denominators of the basic and diluted earnings per common share computations for the three and six months ended June 30, 2025 and 2024, are as follows:

A reconciliation of the numerators and denominators of the basic and diluted earnings per common share computations for the three and nine months ended September 30, 2025 and 2024, are as follows:

Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

(dollars in thousands except per share data) 2025 2024 2025 2024

16 unchanged sentences

As required by the Stock Compensation Topic, companies are required to record compensation cost for stock options and awards provided to employees in return for employment service.

For the three months ended June 30, 2025, stock based compensation expense of $ 131 thousand was recorded, compared to $ 133 thousand for the three months ended June 30, 2024.

For the six months ended June 30, 2025, stock based compensation expense of $ 229 thousand was recorded, compared to $ 306 thousand for the six months ended June 30, 2024.

It is anticipated that current outstanding unvested awards will result in additional compensation expense of approximately $ 0.7 million with a weighted average life of 2.0 years.

For the three months ended September 30, 2025, stock based compensation expense of $ 116 thousand was recorded, compared to $ 138 thousand for the three months ended September 30, 2024.

For the nine months ended September 30, 2025, stock based compensation expense of $ 345 thousand was recorded, compared to $ 443 thousand for the nine months ended September 30, 2024.

It is anticipated that current outstanding unvested awards will result in additional compensation expense of approximately $ 700 thousand with a weighted average life of 2.1 years.

Restricted stock awards are issued with an award price equal to the market price of the Company’s common stock on the award date and vest one year after the grant date for independent directors and three years after the grant date for employees.

Forfeiture provisions exist for personnel that separate employment before the vesting period expires.

A summary of restricted stock activity under the Company’s Plan described above for the six months ended June 30, 2025, follows:

A summary of restricted stock activity under the Company’s Plan described above for the nine months ended September 30, 2025, follows:

Non-vested Shares Shares Weighted

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Forfeited ( 1,180 ) 27.76

Non-vested at June 30, 2025 43,905 $ 36.76

Non-vested at September 30, 2025 46,458 $ 36.24

Note 11 – Derivative Financial Instruments

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The following table shows the amounts of non-hedging derivative financial instruments:

June 30, 2025

September 30, 2025

Asset derivatives Liability derivatives

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The following table shows the amounts included in the Statements of Income for non-hedging derivative financial instruments:

Three Months Ended June 30,

Three Months Ended September 30,

(Dollars in thousands) Statement of Income Classification 2025 2024

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Total $ 153 $ 244

Six Months Ended June 30,

Nine Months Ended September 30,

(Dollars in thousands) Statement of Income Classification 2025 2024

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Condition Financial Instruments Cash Collateral Received Net Amount

June 30, 2025

September 30, 2025

Interest rate swap contracts $ 4,086 $ - $ 4,086 $ - $ 2,180 $ 1,906

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Condition Financial Instruments Cash Collateral Pledged Net Amount

June 30, 2025

September 30, 2025

Interest rate swap contracts $ 4,086 $ - $ 4,086 $ - $ - $ 4,086

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If any improvements in credit exceed the amount of previously reduced amortized cost bases, recoveries will be recorded through the income statement in the period received.

The allowance for collateralized debt credit losses was at $ 173 thousand at June 30, 2025 and December 31, 2024.

The allowance for collateralized debt credit losses was at $ 173 thousand at September 30, 2025 and December 31, 2024.

The Company’s subordination for each collateralized debt obligation is calculated by taking the total performing collateral and subtracting the sum of the total collateral within the Company’s class and the total collateral within all senior classes, and then stating this result as a percentage of the total performing collateral.

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Subordination assuming future default/deferral assumptions is calculated by deducting future defaults from the current performing collateral.

At June 30, 2025 and December 31, 2024, management reviewed the subordination levels for each security in context of the level of current collateral defaults and deferrals within each security;

At September 30, 2025 and December 31, 2024, management reviewed the subordination levels for each security in context of the level of current collateral defaults and deferrals within each security;

the potential for additional defaults and deferrals within each security;

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and the Company’s class position within each security.

At June 30, 2025 and December 31, 2024, the collateralized debt obligations with a cost basis of $ 2.1 million and $ 2.2 million have been placed in “payment in kind” status.

At September 30, 2025 and December 31, 2024, the collateralized debt obligations with a cost basis of $ 2.1 million and $ 2.2 million have been placed in “payment in kind” status.

The Company’s securities that are classified as “payment in kind” are a result of not receiving the scheduled quarterly interest payments.

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As a result of the principal reduction in the senior tranche, more cash is available for future payments to the Company’s tranche.

Management will not capitalize the “payment in kind” interest payments to the book value of the securities and will keep these securities in non-accrual status until the quarterly interest payments resume.

Management will not capitalize the “payment in kind” interest payments to the book value of the securities and will keep these securities in nonaccrual status until the quarterly interest payments resume.

The fair value of the Company’s interest rate swap contracts, both assets and liabilities, are valued by a third- party pricing agent using an income approach and are classified within Level 2 of the valuation hierarchy.

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Assets and Liabilities Measured at Fair Value on a Recurring Basis

There were no transfers to or from Levels 1 and 2 during the six months ended June 30, 2025 and the year ended December 31, 2024.

Changes in Level 3 assets relate to the result of change in estimated fair values, payments received, and sales of securities that have been classified as Level 3 during the six months ended June 30, 2025 and all of 2024.

There were no transfers to or from Levels 1 and 2 during the nine months ended September 30, 2025 and the year ended December 31, 2024.

Changes in Level 3 assets relate to the result of change in estimated fair values, payments received, and sales of securities that have been classified as Level 3 during the nine months ended September 30, 2025 and all of 2024.

Assets measured at fair value on a recurring basis are summarized below:

Fair Value Measurements at June 30, 2025 Using

Fair Value Measurements at September 30, 2025 Using

(Dollars in thousands) Estimated

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Principal payments ( 11 )

Total unrealized gains, included in other comprehensive loss 204

Ending balance, June 30, 2025 $ 1,616

Total unrealized gains, included in other comprehensive income (loss) 208

Ending balance, September 30, 2025 $ 1,616

Beginning balance, January 1, 2024 $ 1,357

Principal payments ( 11 )

Total unrealized gains, included in other comprehensive income 21

Ending balance, June 30, 2024 $ 1,371

Total unrealized gains, included in other comprehensive income (loss) 94

Ending balance, September 30, 2024 $ 1,440

Assets measured at fair value on a non-recurring basis are summarized below:

Fair Value Measurements at June 30, 2025 Using

Fair Value Measurements at September 30, 2025 Using

(Dollars in thousands) Estimated

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(Dollars in thousands) Fair Value at

June 30, 2025 Valuation

September 30, 2025 Valuation

Technique Significant Unobservable Inputs Range Weighted-Average

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Items that are not financial instruments are not included.

June 30, 2025 Estimated Fair Value Measurements

at June 30, 2025 Using

September 30, 2025 Estimated Fair Value Measurements

at September 30, 2025 Using

(Dollars in thousands) Carrying

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Accrued interest payable 620 620 - 620 -

The following methods were used to estimate the fair value of financial instruments presented in the preceding table at June 30, 2025 and December 31, 2024:

The following methods were used to estimate the fair value of financial instruments presented in the preceding table at September 30, 2025 and December 31, 2024:

Cash and cash equivalent carrying amounts approximate fair value.

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Note 13 - Borrowings

At June 30, 2025, and December 31, 2024, borrowed funds are summarized below:

At September 30, 2025, and December 31, 2024, borrowed funds are summarized below:

(Dollars in thousands)

September 30,

2025 December 31,

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FHLB Fixed rate advance with outstanding rate of 4.77 %, maturing May 19, 2025

FHLB Fixed rate advance with outstanding rate of 4.49 %,

maturing July 3, 2025

FHLB Fixed rate advance with outstanding rate of 3.63 %, maturing March 7, 2028 (1)

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(1) FHLB retains putable option to call these advances after a period of time.

At June 30, 2025, scheduled maturities of borrowed funds were as follows:

At September 30, 2025, scheduled maturities of borrowed funds were as follows:

(Dollars in thousands)

2025 $ 10,000

Total $ 55,000

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The Company also maintains a $ 25.0 million line of credit with the Federal Home Loan Bank of Indianapolis.

The Company did not have a balance at June 30, 2025, or as of December 31, 2024.

The Company did not have other borrowings at June 30, 2025, or as of December 31, 2024.

The Company did not have a balance at September 30, 2025, or as of December 31, 2024.

The Company did not have other borrowings at September 30, 2025, or as of December 31, 2024.

Note 14 - Leases

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On February 22, 2024, the Bank closed its previously announced sale-leaseback transaction with MountainSeed Real Estate Services, LLC (the “Buyer”), pursuant to which the Bank sold to the Buyer five properties owned and operated as branch locations (the “Properties”) for an aggregate purchase price of $ 17.2 million, including customary closing adjustments.

Under the Sale Agreement, the Bank also entered into triple net lease agreements (the “Lease Agreements”) with the Buyer under which the Bank leases each of the Properties, and pursuant to which the Bank is responsible for the insurance, real

estate taxes, and maintenance and repairs for each of the properties.

Each of the Lease Agreements became effective upon the closing of the sale-leaseback transaction and have an initial term of 15 years.

Each of the Lease Agreements became effective upon

the closing of the sale-leaseback transaction and have an initial term of 15 years.

The Bank’s obligations under the Lease Agreements are guaranteed by the Company.

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The following table summarizes supplemental cash flow and other information related to our operating leases:

(Dollars in thousands) Six Months Ended June 30,

(Dollars in thousands) Nine Months Ended September 30,

Gain on sale-leaseback transaction, net $ - $ ( 11,772 )

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Cash paid for amounts included in the measurement of lease liabilities for leases 1,201 965

ROU assets obtained in the exchange for lease liabilities - operating leases (1) - 16,140

ROU assets obtained in exchange for lease liabilities - operating leases (1) - 16,140

Weighted-average remaining lease terms (in years) - operating leases 13 14

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(2) Included in occupancy and equipment costs on the condensed consolidated statements of income

The following table represents the maturity of the Company's operating lease liabilities as of June 30, 2025:

The following table represents the maturity of the Company's operating lease liabilities as of September 30, 2025:

(Dollars in thousands)

5 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements