Finward Bancorp Announces Fourth Quarter 2025 Results

MUNSTER, Ind.--( BUSINESS WIRE)--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:

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.

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.

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%

1.20%

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

$ 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

$ 0.36

$ 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

3.59

1,285

3.74

868

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

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

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

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

(56

)

(212

)

Loss on sale of securities, net

(1,577

)

Other

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

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

)

(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

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

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

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

)

(177

)

(311

)

(46

)

(134

)

(147.3

(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

1,630

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

)

(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

4,324,889

4,324,485

4,313,698

Common book value per share (GAAP)

40.36

38.24

35.67

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%.