Finward Bancorp Announces Third Quarter 2026 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 $1.4 million, or $0.31 per diluted share, for the quarter ended September 30, 2026, as compared to $2.1 million, or $0.48 per diluted share, for the quarter ended June 30, 2026. Selected performance metrics are as follows for the periods presented:

Performance Ratios
	Quarter ended
	9/30/2026		6/30/2026		3/31/2026		12/31/2025		9/30/2025
Return on equity	3.10	%	4.74	%	5.00	%	4.66	%	8.96	%
Return on assets	0.27	%	0.42	%	0.44	%	0.39	%	0.68	%
Net interest margin, tax-equivalent (non-GAAP)	3.51	%	3.37	%	3.35	%	3.32	%	3.18	%
Non-interest income/average assets	0.52	%	0.48	%	0.48	%	0.29	%	0.57	%
Non-interest expense/average assets	3.35	%	2.95	%	2.93	%	2.90	%	2.74	%
Efficiency ratio (non-GAAP)	91.32	%	84.52	%	84.45	%	89.50	%	81.22	%

"The third quarter was impacted by merger-related expenses related to our pending merger with First Financial, announced earlier in the quarter. The quarter included additional expenses in the areas of compensation and benefits, and third-party costs associated with the merger," said Benjamin Bochnowski, Chief Executive Officer. "Credit quality remained stable, as did our core banking business and customer base. The rapid increase in interest rates contributed positively to loan yields and margin, although it also resulted in higher unrealized losses in the bond portfolio. We continue to make progress toward closing our merger with First Financial, and we believe the combination of our companies will have benefits for our shareholders, customers, communities, and employees. Throughout this process, our commitment to our customers and communities grounds the team, and our team is working diligently to ensure a seamless transition that maximizes the promise of the merger.”

Highlights of the current period include:

• Net Interest Margin - The net interest margin for the quarter ended September 30, 2026 was 3.39% compared to 3.25% for the quarter ended June 30, 2026. Net interest margin on a tax-equivalent basis (a non-GAAP measure) for the quarter ended September 30, 2026 was 3.51%, as compared to 3.37% for the quarter ended June 30, 2026. Net interest margin increased from the prior quarter primarily due to continued repricing and maturity of the existing loan portfolio, as well as full quarterly loan yield results from new loan origination strength during the second quarter.

• Funding - As of September 30, 2026, deposits totaled $1.76 billion, an increase of $25.9 million, or 1.5% compared with June 30, 2026 balances, which totaled $1.73 billion. As of September 30, 2026, non-interest-bearing deposits totaled $281.5 million, an increase of $10.8 million. Core deposits totaled $1.3 billion at September 30, 2026 and $1.2 billion at June 30, 2026. Core deposits include checking, savings, and money market accounts and represented 71.9% of the Bancorp’s total deposits at September 30, 2026. As of September 30, 2026, balances for certificates of deposit totaled $493.3 million, compared to $497.4 million on June 30, 2026, a decrease of $4.1 million or 0.8%. The increase in total portfolio deposits is primarily related to cyclical flows and continued adjustments to deposit pricing. In addition, as of September 30, 2026, borrowings, federal funds purchased and repurchase agreements totaled $59.8 million, a decrease of $35.5 million or 37.2%, compared to June 30, 2026. The decrease in borrowings was primarily attributable to a reduction in FHLB advances resulting from deposit balance strength.
  
  As of September 30, 2026, 71.7% of our deposits are fully FDIC insured, and another 8.3% 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 September 30, 2026, the Bancorp had available liquidity of $623 million including borrowing capacity from the FHLB and Federal Reserve facilities.

• Securities Portfolio - Securities available for sale balances decreased by $30.3 million to $279.9 million as of September 30, 2026, compared to $310.2 million as of June 30, 2026. The yield on the securities portfolio increased to 2.33% for the three months ended September 30, 2026 from 2.27% for the three months ended June 30, 2026. The decrease in securities available for sale was primarily attributable to an increase in the negative fair value adjustment to securities. The Bank did not sell any securities during the quarter.

• Lending - The Bank’s aggregate loan portfolio totaled $1.50 billion on September 30, 2026 and $1.50 billion on June 30, 2026. During the three months ended September 30, 2026, the Bank originated $69.7 million in new commercial loans, compared to $81.3 million during the three months ended June 30, 2026. At September 30, 2026, the Bancorp’s portfolio loan balances in commercial real estate owner occupied properties totaled $263.5 million or 17.6% of loans receivable and commercial real estate non-owner occupied properties totaled $332.4 million or 22.2% of loans receivable. Of the $332.4 million in commercial real estate non-owner occupied properties balances, loans collateralized by office buildings represented $31.5 million or 2.1% of total loan balances.

• Asset Quality - At September 30, 2026, non-performing loans totaled $16.8 million, compared to $16.5 million at June 30, 2026, an increase of $239 thousand or 1.4%. The Bank’s ratio of non-performing loans to total loans was 1.12% at September 30, 2026, compared to 1.10% at June 30, 2026. The Bank’s ratio of non-performing assets to total assets was 0.92% at September 30, 2026 and 0.90% at June 30, 2026. The increase in non-performers included the addition of a $1.1 million residential real estate loan coupled with eight smaller loans averaging $89 thousand across eight relationships. These were offset by the removal of thirteen loans totaling $1.2 million in the commercial real estate, commercial business and residential real estate loan segments. 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 September 30, 2026, or 1.17% of total loans receivable, compared to $17.7 million at June 30, 2026, or 1.18% of total loans receivable, a decrease of $257 thousand or 1.49%. The Bank's unused commitment reserve, included in other liabilities, totaled $2.0 million at September 30, 2026, compared to $1.9 million at June 30, 2026, an increase of $36 thousand or 1.8%.
  
  For the quarter ended September 30, 2026, the Bank recorded a net provision for credit loss totaling $124 thousand based on quarterly growth in certain loan segment balances and other factors within the Bank's ACL modeling. The third quarter's provision consisted of a $88 thousand provision for credit losses on loans, and a $36 thousand provision of credit losses on unused commitments. For the quarter ended September 30, 2026, net loan charge-offs totaled $240 thousand, compared to net loan recoveries of $31 thousand for the quarter ended June 30, 2026. The allowance for credit losses as a percentage of non-performing loans, or coverage ratio, was 104.5% at September 30, 2026, compared to 106.9% at June 30, 2026.

• Operating Income and Expenses - Non-interest income as a percentage of average assets was 0.52% for the quarter ended September 30, 2026 and 0.48% for the quarter ended June 30, 2026. Non-interest expense as a percentage of average assets was 3.35% for the quarter ended September 30, 2026, as compared to 2.95% for the quarter ended June 30, 2026. The increase in non-interest income as compared to the prior quarter was due to a $182 thousand gain associated with the sale of one of the Bancorp's branch locations. The increase in non-interest expense quarter over quarter was primarily attributable to one-time compensation and benefits adjustments totaling $1.8 million and professional and outside services expenses totaling $536 thousand, both associated with the Bancorp's pending merger.

• Capital Adequacy - The Bank’s tier 1 leverage ratio was 9.29% as of September 30, 2026 and 9.31% as of June 30, 2026. The Bank’s capital continues to exceed all applicable regulatory capital requirements. The Bancorp’s tangible book value per share (non-GAAP) was $31.07 at September 30, 2026, down from $35.75 as of June 30, 2026. Tangible common equity to tangible assets (non-GAAP) was 6.76% at September 30, 2026, down from 7.68% as of June 30, 2026.

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 book value per share, tangible common equity/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 24 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: the ability of First Financial Bancorp ("First Financial") and the Bancorp to complete the proposed merger; the effects of the pendency of the proposed merger with First Financial on the Bancorp and its business; 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); 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; 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.

Important Additional Information About the Transaction and Where to Find It

In connection with the proposed merger transaction between First Financial and the Bancorp (the “Merger”), First Financial has filed with the SEC a Registration Statement on Form S-4 (the “Registration Statement”) to register the shares of First Financial common stock to be issued in connection with the proposed transaction. The Registration Statement includes a proxy statement of the Bancorp and a prospectus of First Financial (the “Proxy Statement/Prospectus”), and First Financial and the Bancorp may file with the SEC other relevant documents concerning the proposed transaction. First Financial and the Bancorp have mailed the definitive Proxy Statement/Prospectus to shareholders of the Bancorp (which mailings were first made on or about September 28, 2026. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS AND SHAREHOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED TRANSACTION IN THEIR ENTIRETY AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT FIRST FINANCIAL, THE BANCORP AND THE PROPOSED TRANSACTION AND RELATED MATTERS.

A copy of the Registration Statement, Proxy Statement/Prospectus, as well as other filings containing information about First Financial and the Bancorp, may be obtained, free of charge, at the SEC’s website (www.sec.gov). Copies of documents filed with the SEC by First Financial will be made available free of charge in the “Investor Relations” section of First Financial’s website, https://www.bankatfirst.com/about/investor-relations.html. Copies of documents filed with the SEC by the Bancorp will be made available free of charge in the “Investor Relations” section of the Bancorp’s website, https://investorrelations.ibankpeoples.com/. The information on First Financial’s and the Bancorp’s websites is not, and shall not be deemed to be, a part of this communication or incorporated into other filings either company makes with the SEC.

Participants in Solicitation

The Bancorp and its directors, executive officers, management and employees may be deemed to be participants in the solicitation of proxies in respect of the Merger. Information concerning the Bancorp’s participants is set forth in the Proxy Statement, dated April 3, 2026, for the Company’s 2026 annual meeting of shareholders as filed with the SEC on Schedule 14A. Additional information regarding the participants in the solicitation of proxies in respect of the proposed transaction and interests of the participants of the Bancorp in the solicitation of proxies in respect of the Merger are included in the Registration Statement and Proxy Statement/Prospectus on file with the SEC. Free copies of these documents may be obtained as described in the preceding paragraph.

Performance Ratios

	Quarter Ended															Nine Months Ended
	9/30/2026			6/30/2026			3/31/2026			12/31/2025			9/30/2025			9/30/2026			9/30/2025
Return on equity		3.10	%		4.74	%		5.00	%		4.66	%		8.96	%		4.29	%		5.27	%
Return on assets		0.27	%		0.42	%		0.44	%		0.39	%		0.68	%		0.38	%		0.40	%
Yield on loans		5.73	%		5.55	%		5.50	%		5.64	%		5.49	%		5.60	%		5.37	%
Yield on security investments		2.33	%		2.27	%		2.22	%		2.29	%		2.40	%		2.28	%		2.40	%
Total yield on earning assets		5.10	%		4.93	%		4.86	%		4.96	%		4.91	%		4.97	%		4.82	%
Cost of interest-bearing deposits		2.04	%		1.98	%		1.92	%		2.09	%		2.16	%		1.98	%		2.15	%
Cost of federal funds purchased and repurchase agreements		2.85	%		2.82	%		2.85	%		3.12	%		3.37	%		2.84	%		3.35	%
Cost of borrowed funds		3.90	%		3.80	%		3.70	%		3.70	%		3.64	%		3.80	%		3.90	%
Total cost of interest-bearing liabilities		2.11	%		2.06	%		2.00	%		2.16	%		2.25	%		2.06	%		2.25	%
Net interest margin		3.39	%		3.25	%		3.23	%		3.18	%		3.04	%		3.29	%		2.94	%
Net interest margin, tax-equivalent (non-GAAP)^(1)		3.51	%		3.37	%		3.35	%		3.32	%		3.18	%		3.41	%		3.08	%
Non-interest income/average assets		0.52	%		0.48	%		0.48	%		0.29	%		0.57	%		0.49	%		0.51	%
Non-interest expense/average assets		3.35	%		2.95	%		2.93	%		2.90	%		2.74	%		3.08	%		2.81	%
Efficiency ratio (non-GAAP)^(1)		91.32	%		84.52	%		84.45	%		89.50	%		81.22	%		86.85	%		87.54	%
Non-performing assets to total assets		0.92	%		0.90	%		0.71	%		0.65	%		0.76	%		0.92	%		0.76	%
Non-performing loans to total loans		1.12	%		1.10	%		0.85	%		0.77	%		0.94	%		1.12	%		0.94	%
Allowance for credit losses to non-performing loans		104.49	%		106.92	%		139.72	%		156.84	%		129.41	%		104.49	%		129.41	%
Allowance for credit losses to loans receivable		1.17	%		1.18	%		1.19	%		1.21	%		1.22	%		1.17	%		1.22	%
Net charge-offs (recoveries) as a percentage of average loans receivable		0.06	%		(0.01	%)		0.00	%		0.08	%		0.07	%		(0.01	)%		(0.01	)%
Basic earnings per share	$	0.32		$	0.49		$	0.52		$	0.46		$	0.82		$	1.33		$	1.43
Diluted earnings per share	$	0.31		$	0.48		$	0.52		$	0.46		$	0.81		$	1.32		$	1.42
Weighted average common shares outstanding—basic		4,283,138			4,280,844			4,276,530			4,273,421			4,273,022			4,280,195			4,270,652
Weighted average common shares outstanding—diluted		4,325,700			4,319,052			4,302,206			4,301,462			4,299,007			4,318,918			4,291,171
Stockholders' equity to total assets		7.84	%		8.74	%		8.56	%		8.64	%		8.06	%		7.84	%		8.06	%
Tangible common equity to tangible assets (non-GAAP) ^(1)		6.76	%		7.68	%		7.48	%		7.56	%		6.99	%		6.76	%		6.99	%
Book value per share	$	36.45		$	41.15		$	39.81		$	40.37		$	38.24		$	36.45		$	38.24
Tangible common book value per share (non-GAAP) ^(1)	$	31.07		$	35.75		$	34.39		$	34.92		$	32.77		$	31.07		$	32.77
Closing stock price	$	41.65		$	36.78		$	36.30		$	35.19		$	32.09		$	41.65		$	32.09
Dividends declared per common share	$	0.12		$	0.12		$	0.12		$	0.12		$	0.12		$	0.36		$	0.24

(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
	September 30, 2026							June 30, 2026							March 31, 2026
(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	$	75,192		$	683	3.63	%	$	78,886		$	718	3.64	%	$	96,250		$	949	3.94	%
Federal funds sold		1,276			9	2.82	%		1,046			8	3.06	%		1,523			11	2.89	%
Securities available-for-sale		303,374			1,768	2.33	%		309,251			1,757	2.27	%		318,670			1,771	2.22	%
Loans receivable		1,495,817			21,438	5.73	%		1,474,063			20,468	5.55	%		1,445,921			19,871	5.50	%
Federal Home Loan Bank stock		6,547			119	7.27	%		6,547			114	6.97	%		6,547			119	7.27	%
Total interest earning assets		1,882,206		$	24,017	5.10	%		1,869,793		$	23,065	4.93	%		1,868,911		$	22,721	4.86	%
Cash and non-interest bearing deposits in other financial institutions		15,864							15,504							21,331
Allowance for credit losses		(17,541	)						(17,418	)						(17,608	)
Other non-interest bearing assets		144,816							143,484							143,452
Total assets	$	2,025,345						$	2,011,363						$	2,016,086
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing deposits	$	1,462,769		$	7,478	2.04	%	$	1,446,072		$	7,159	1.98	%	$	1,447,994		$	6,959	1.92	%
Federal funds purchased and repurchase agreements		26,852			191	2.85	%		33,076			233	2.82	%		38,113			272	2.85	%
Borrowed funds		41,630			406	3.90	%		51,925			493	3.80	%		45,334			419	3.70	%
Total interest bearing liabilities		1,531,251		$	8,075	2.11	%		1,531,073		$	7,885	2.06	%		1,531,441		$	7,650	2.00	%
Non-interest bearing deposits		282,313							268,540							270,626
Other non-interest bearing liabilities		36,373							35,243							34,588
Total liabilities		1,849,937							1,834,856							1,836,655
Total stockholders' equity		175,408							176,507							179,431
Total liabilities and stockholders' equity	$	2,025,345						$	2,011,363						$	2,016,086
Net interest income				$	15,942						$	15,180						$	15,071
Return on average assets		0.27	%						0.42	%						0.44	%
Return on average equity		3.10	%						4.74	%						5.00	%
Net interest margin		3.39	%						3.25	%						3.23	%
Net interest margin, tax-equivalent (non-GAAP)^(1)		3.51	%						3.37	%						3.35	%
Net interest spread		2.99	%						2.87	%						2.86	%
Ratio of interest-earning assets to interest-bearing liabilities	1.23x							1.22x							1.22x

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

Consolidated Balance Sheets

	As of
(Dollars in thousands)	9/30/2026			6/30/2026			3/31/2026			12/31/2025			9/30/2025
ASSETS
Cash and non-interest bearing deposits in other financial institutions	$	16,630		$	17,384		$	15,758		$	18,265		$	19,458
Interest bearing deposits in other financial institutions		74,978			76,270			102,997			101,382			84,157
Federal funds sold		1,051			988			-			-			563
Total cash and cash equivalents		92,659			94,642			118,755			119,647			104,178
Securities available-for-sale		279,869			310,198			307,686			316,227			335,150
Loans held-for-sale		2,181			1,083			-			1,096			2,641
Loans receivable, net of deferred fees and costs		1,499,222			1,503,793			1,455,118			1,450,387			1,473,774
Less: allowance for credit losses		(17,542	)		(17,694	)		(17,285	)		(17,506	)		(17,977	)
Net loans receivable		1,481,680			1,486,099			1,437,833			1,432,881			1,455,797
Federal Home Loan Bank stock		6,547			6,547			6,547			6,547			6,547
Accrued interest receivable		7,802			7,671			7,700			7,781			7,585
Premises and equipment		43,499			43,932			44,315			44,976			45,544
Cash value of bank owned life insurance		34,225			34,010			33,786			33,586			33,843
Goodwill		22,395			22,395			22,395			22,395			22,395
Other intangible assets		896			984			1,076			1,172			1,273
Other assets		42,372			33,145			35,063			34,873			37,771
Total assets	$	2,014,125		$	2,040,706		$	2,015,156		$	2,021,181		$	2,052,724
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing	$	281,477		$	270,682		$	278,705		$	267,441		$	280,296
Interest bearing		1,476,980			1,461,862			1,440,366			1,459,530			1,470,350
Total		1,758,457			1,732,544			1,719,071			1,726,971			1,750,646
Federal funds purchased and repurchase agreements		24,849			30,301			40,815			39,703			48,426
Borrowed funds		35,000			65,000			50,000			45,000			55,000
Accrued expenses and other liabilities		37,977			34,574			32,870			34,844			33,157
Total liabilities		1,856,283			1,862,419			1,842,756			1,846,518			1,887,229
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		71,232			70,530			70,397			70,331			70,233
Accumulated other comprehensive loss		(63,520	)		(41,532	)		(45,713	)		(41,662	)		(49,266	)
Retained earnings		150,130			149,289			147,716			145,994			144,528
Total stockholders' equity		157,842			178,287			172,400			174,663			165,495
Total liabilities and stockholders' equity	$	2,014,125		$	2,040,706		$	2,015,156		$	2,021,181		$	2,052,724

(1) Shares of common stock issued and outstanding were 4,330,893 at 9/30/2026; 4,333,002 at 6/30/2026; 4,330,486 at 3/31/2026; 4,326,747 at 12/31/2025; and 4,327,511 at 9/30/2025.

Consolidated Statements of Income

	Quarter Ended
(Dollars in thousands, except per share data)	9/30/2026		6/30/2026			3/31/2026		12/31/2025			9/30/2025
Interest income:
Loans	$	21,438	$	20,468		$	19,871	$	20,496		$	20,246
Securities & short-term investments		2,579		2,597			2,850		2,916			3,094
Total interest income		24,017		23,065			22,721		23,412			23,340
Interest expense:
Deposits		7,478		7,159			6,959		7,605			7,996
Borrowings		597		726			691		765			901
Total interest expense		8,075		7,885			7,650		8,370			8,897
Net interest income		15,942		15,180			15,071		15,042			14,443
Provision for (benefit from) credit losses		124		264			55		(84	)		(301	)
Net interest income after provision for credit losses		15,818		14,916			15,016		15,126			14,744
Non-interest income:
Fees and service charges		1,251		1,331			1,295		1,485			1,463
Wealth management operations		725		748			661		659			759
Gain (loss) on tax credit investment		-		-			-		-			23
Gain (loss) on sale of loans held-for-sale, net		281		228			257		346			265
Gain (loss) on sale of securities, net		-		-			-		(1,577	)		-
Bank owned life insurance		215		223			201		522			439
Gain (loss) on sale of property and equipment		182		(180	)		-		1			(56	)
Other		1		48			3		37			20
Total non-interest income		2,655		2,398			2,417		1,473			2,913
Non-interest expense:
Compensation and benefits		9,735		8,033			7,591		7,573			7,330
Occupancy and equipment		1,693		1,741			1,991		2,111			2,004
Data processing		1,210		1,176			1,105		1,465			1,116
Federal deposit insurance premiums		383		347			381		417			399
Marketing		399		266			587		230			257
Professional and outside services		1,614		1,221			1,169		906			945
Technology		594		516			508		521			549
Other		1,355		1,557			1,436		1,558			1,497
Total non-interest expense		16,983		14,857			14,768		14,781			14,097
Income before income taxes		1,490		2,457			2,665		1,818			3,560
Income tax expenses (benefit)		129		364			423		(166	)		63
Net income	$	1,361	$	2,093		$	2,242	$	1,984		$	3,497
Earnings per common share:
Basic	$	0.32	$	0.49		$	0.52	$	0.46		$	0.82
Diluted	$	0.31	$	0.48		$	0.52	$	0.46		$	0.81

Consolidated Statements of Income (cont'd)

	Nine Months Ended
(Dollars in thousands, except per share data)	9/30/2026		9/30/2025
Interest income:
Loans	$	61,777	$	59,841
Securities & short-term investments		8,026		8,510
Total interest income		69,803		68,351
Interest expense:
Deposits		21,596		23,821
Borrowings		2,014		2,829
Total interest expense		23,610		26,650
Net interest income		46,193		41,701
Provision for (benefit from) credit losses		443		(121	)
Net interest income after provision for credit losses		45,750		41,822
Non-interest income:
Fees and service charges		3,877		3,902
Wealth management operations		2,134		2,074
Gain on tax credit investment		—		90
Gain on sale of loans held-for-sale, net		766		873
Bank owned life insurance		639		857
Gain (loss) on sale of property and equipment		2		(56	)
Other		52		85
Total non-interest income		7,470		7,825
Non-interest expense:
Compensation and benefits		25,359		22,015
Occupancy and equipment		5,425		6,050
Data processing		3,491		3,496
Federal deposit insurance premiums		1,111		1,303
Marketing		1,252		557
Professional and outside services		4,004		3,320
Technology		1,618		1,548
Other		4,348		5,066
Total non-interest expense		46,608		43,355
Income before income taxes		6,612		6,292
Income tax expenses		916		189
Net income	$	5,696	$	6,103
Earnings per common share:
Basic	$	1.33	$	1.43
Diluted	$	1.32	$	1.42

Loans

	As of
(Dollars in thousands)	9/30/2026		6/30/2026			3/31/2026			12/31/2025			9/30/2025		9/30/2026 vs 6/30/2026					9/30/2026 vs 9/30/2025
Residential real estate	$	454,668	$	455,882		$	445,097		$	442,443		$	450,007	$	(1,214	)	(0.3	)%	$	4,661		1.0	%
Home equity		53,180		55,601			53,855			53,497			51,813		(2,421	)	(4.4	)%		1,367		2.6	%
Commercial real estate		595,850		597,364			564,613			555,594			564,558		(1,514	)	(0.3	)%		31,292		5.5	%
Construction and land development		86,646		77,710			76,582			77,208			79,678		8,936		11.5	%		6,968		8.7	%
Multifamily		173,382		180,148			185,824			183,902			192,698		(6,766	)	(3.8	)%		(19,316	)	(10.0	)%
Commercial business		105,513		103,281			94,160			99,304			96,192		2,232		2.2	%		9,321		9.7	%
Consumer		278		2,036			310			870			348		(1,758	)	(86.3	)%		(70	)	(20.1	)%
Manufactured homes		21,318		22,050			22,981			23,708			24,372		(732	)	(3.3	)%		(3,054	)	(12.5	)%
Government		7,640		9,818			9,998			12,298			12,298		(2,178	)	(22.2	)%		(4,658	)	(37.9	)%
Loans receivable		1,498,475		1,503,890			1,453,420			1,448,824			1,471,964		(5,415	)	(0.4	)%		26,511		1.8	%
Net deferred loan origination costs		745		1,006			1,723			1,606			1,719		(261	)	(25.9	)%		(974	)	(56.7	)%
Loan clearing funds		2		(1,103	)		(25	)		(43	)		91		1,105		(100.2	)%		(89	)	(97.8	)%
Loans receivable, net	$	1,499,222	$	1,503,793		$	1,455,118		$	1,450,387		$	1,473,774	$	(4,571	)	(0.3	)%	$	25,448		1.7	%

Deposits

	As of
(Dollars in thousands)	9/30/2026		6/30/2026		3/31/2026		12/31/2025		9/30/2025		9/30/2026 vs 6/30/2026					9/30/2026 vs 9/30/2025
Checking	$	590,974	$	584,901	$	587,575	$	592,214	$	579,760	$	6,073		1.0	%	$	11,214		1.9	%
Savings		241,412		247,054		253,408		254,055		257,058		(5,642	)	(2.3	)%		(15,646	)	(6.1	)%
Money market		432,725		403,140		389,274		381,111		377,155		29,585		7.3	%		55,570		14.7	%
Certificates of deposit		493,346		497,449		488,814		499,591		536,673		(4,103	)	(0.8	)%		(43,327	)	(8.1	)%
Total deposits	$	1,758,457	$	1,732,544	$	1,719,071	$	1,726,971	$	1,750,646	$	25,913		1.5	%	$	7,811		0.4	%

Asset Quality

	As of and for the Quarter Ended
(Dollars in thousands)	9/30/2026		6/30/2026		3/31/2026		12/31/2025		9/30/2025
Non-accruing loans	$	16,788	$	16,549	$	12,371	$	11,162	$	13,892
Securities in non-accrual		1,708		1,909		1,891		1,882		1,616
Foreclosed real estate		-		-		89		89		-
Total nonperforming assets	$	18,496	$	18,458	$	14,351	$	13,133	$	15,508
Allowance for credit losses (ACL):
ACL specific allowances for collateral dependent loans	$	155	$	147	$	-	$	263	$	912
ACL general allowances for loan portfolio		17,387		17,547		17,285		17,243		17,065
Total ACL	$	17,542	$	17,694	$	17,285	$	17,506	$	17,977

Allowance for Credit Losses

	As of and for the Quarter Ended
(Dollars in thousands)	9/30/2026			6/30/2026		3/31/2026			12/31/2025			9/30/2025
Beginning allowance for credit losses	$	17,694		$	17,285	$	17,506		$	17,977		$	18,184
Provision for (benefit from) loan losses		88			378		(224	)		(170	)		61
Net (charge-offs) recoveries		(240	)		31		3			(301	)		(268	)
Ending allowance for credit losses	$	17,542		$	17,694	$	17,285		$	17,506		$	17,977

Bank-Level Regulatory Capital Requirements

	September 30, 2026
	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	$	191,109	11.74	%	$	73,249		4.50	%	$	105,805	6.50	%
Tier 1 capital to risk-weighted assets	$	191,109	11.74	%	$	97,666		6.00	%	$	130,221	8.00	%
Total capital to risk-weighted assets	$	210,604	12.94	%	$	130,221		8.00	%	$	162,777	10.00	%
Tier 1 leverage ratio	$	191,109	9.29	%	$	82,312		4.00	%	$	102,891	5.00	%

(1) Current quarter ratios are estimated.

Reconciliation of Non-GAAP Performance Measures

	Quarter Ended
(Dollars in thousands, except per share amounts)	9/30/2026			6/30/2026			3/31/2026			12/31/2025			9/30/2025
Tangible Common Ratios
Stockholder's equity (GAAP)	$	157,842		$	178,287		$	172,400		$	174,663		$	165,495
Less: Goodwill (GAAP)		(22,395	)		(22,395	)		(22,395	)		(22,395	)		(22,395	)
Less: Other intangibles (GAAP)		(896	)		(984	)		(1,076	)		(1,172	)		(1,273	)
Tangible common equity (non-GAAP)	$	134,551		$	154,908		$	148,929		$	151,096		$	141,827
Total assets (GAAP)	$	2,014,125		$	2,040,706		$	2,015,156		$	2,021,181		$	2,052,724
Less: Goodwill (GAAP)		(22,395	)		(22,395	)		(22,395	)		(22,395	)		(22,395	)
Less: Other intangibles (GAAP)		(896	)		(984	)		(1,076	)		(1,172	)		(1,273	)
Tangible assets (non-GAAP)	$	1,990,834		$	2,017,327		$	1,991,685		$	1,997,614		$	2,029,056
Shares outstanding - end of quarter		4,330,893			4,333,002			4,330,486			4,326,747			4,327,511
Common book value per share (GAAP)	$	36.45		$	41.15		$	39.81		$	40.37		$	38.24
Tangible common book value per share (non-GAAP)	$	31.07		$	35.75		$	34.39		$	34.92		$	32.77
Total equity to total assets (GAAP)		7.84	%		8.74	%		8.56	%		8.64	%		8.06	%
Tangible common equity to tangible assets (non-GAAP)		6.76	%		7.68	%		7.48	%		7.56	%		6.99	%
Calculation of net interest margin, taxable-equivalent basis
Net interest income (GAAP)	$	15,942		$	15,180		$	15,071		$	15,042		$	14,443
Tax-equivalent adjustment on securities and loans ^(1)		575			580			582			629			663
Net interest income (tax-equivalent basis)	$	16,517		$	15,760		$	15,653		$	15,671		$	15,106
Total average earning assets	$	1,882,206		$	1,869,793		$	1,868,911		$	1,889,616		$	1,900,066
Net interest margin		3.39	%		3.25	%		3.23	%		3.18	%		3.04	%
Net interest margin (tax-equivalent basis)		3.51	%		3.37	%		3.35	%		3.32	%		3.18	%
Efficiency ratio
Total non-interest expense	$	16,983		$	14,857		$	14,768		$	14,781		$	14,097
Total revenue		18,597			17,578			17,488			16,515			17,356
Efficiency ratio		91.32	%		84.52	%		84.45	%		89.50	%		81.22	%

(1) 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%.