Company Overview: Finward Bancorp

Business Description

• Type: Bank holding company primarily engaged in banking activities.
• Subsidiary: People's Bank, an Indiana-chartered commercial bank (100% owned).
• Primary Business: Attracting deposits and originating loans.
• Primary Market Areas:
  • Lake and Porter Counties in Northwest Indiana
  • Cook County in Illinois
  • Also active in Porter, LaPorte, Newton, Jasper counties in Indiana and DuPage, Lake, Will counties in Illinois.

Banking Activities

• Loan Portfolio Composition (as of Dec 31, 2024):

  • Total loans: $1.5 billion
  • Key loan segments include:
    • Residential real estate: $467.3 million (31.0%)
    • Commercial real estate: $551.7 million (36.6%)
    • Home equity: $49.8 million (3.3%)
    • Construction and land development: $82.9 million (5.5%)
    • Multifamily: $212.5 million (14.1%)
    • Commercial business: $104.2 million (6.9%)
    • Consumer loans and manufactured homes also in the portfolio.

• Loan Types & Terms:

  • Focus on adjustable-rate and shorter-term fixed-rate loans.
  • Mortgage loans: predominantly conventional, with 75.2% of 2024 closings having 20%+ equity.
  • Construction loans generally for one year residential or commercial projects.
  • Commercial real estate loans often have 15-25 years terms with balloon structures.
  • Consumer loans: secured and unsecured, includes home equity lines.
  • Commercial and municipal loans are also offered.

• Loan Origination & Sales:

  • Originates loans for sale (~$36.8 million in 2024) and retains some fixed-rate loans (>15 years).
  • Loans sold on the secondary market to Freddie Mac, US Bank, or FHLB.
  • Focus on loan quality, collateral, and compliance with underwriting standards.

Securities & Investment Portfolio

• Total securities (Dec 2024): $333.6 million (available-for-sale).
  • Composition includes:
    • U.S. government-sponsored entities: $8.1 million
    • Mortgage-backed securities: $109.3 million
    • Municipal securities: $214.7 million
    • Collateralized debt obligations: $1.4 million
• Investment focus: U.S. government securities, municipal bonds, mortgage-backed securities.
• Investment issues: Unrealized losses (~$9 million, increasing in 2024).

Customer & Employee Data

• Customer Base: Not explicitly provided.
• Employees:
  • 293 full-time employees
  • 20 part-time employees
  • Employees are not unionized and management reports good employee relations.

Financial Results (2024)

• Net Income: $12.1 million
• Earnings per Share (Diluted): $2.84
• Return on Assets: 0.58%
• Return on Equity: 8.06%
• Total Assets: $2.1 billion
• Total Deposits: $1.76 billion
• Stockholders’ Equity: $151.4 million (book value per share: $35.10)

Business Model

• Primarily a portfolio lender with a focus on quality growth and product diversification.
• Offers a range of deposit products including checking, savings, money markets, and CDs.
• Derives revenue mainly from net interest income and fees from lending activities and wealth management.

Regulatory & Operational Details

• Regulation: Subject to oversight by the FRB, FDIC, Indiana DFI.
• Branch Network: 26 branches total (21 owned, 5 leased).
• Technology: Outsources core processing to FIS in Jacksonville, FL.
• Revenue Streams: Interest on loans, securities, wealth management, and fee-based services.

Summary

Finward Bancorp operates primarily through its subsidiary, Peoples Bank, providing comprehensive banking services in Northwest Indiana and the Chicago suburbs. It manages a substantial loan portfolio concentrated in real estate and commercial lending, supplemented by investment securities, and earns income from interest, fees, and wealth management operations. The company employs over 300 staff members, serving a broad customer base within its regional markets, and focuses on prudent risk management, regulatory compliance, and balanced growth.