Finward Bancorp Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Note 4 - Loans Receivable (Tables)

Note 4 - Loans Receivable (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

(Dollars in thousands)
	December 31, 2019			December 31, 2018
Loans secured by real estate:
Residential real estate	$	299,569		$	224,082
Home equity		49,118			45,423
Commercial real estate		283,108			253,104
Construction and land development		87,710			64,433
Multifamily		51,286			47,234
Farmland		227			240
Total loans secured by real estate		771,018			634,516
Commercial business		103,222			103,628
Consumer		627			495
Manufactured homes		13,285			4,798
Government		15,804			21,101
Subtotal		903,956			764,538
Plus (less):
Net deferred loan origination fees		2,934			530
Undisbursed loan funds		(21	)		(668	)
Loans receivable	$	906,869		$	764,400

Financing Receivable, Allowance for Credit Loss [Table Text Block]

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

The Bancorp's activity in the allowance for loan losses, by loan segment, is summarized below for the twelve months ended December 31, 2019:

Allowance for loan losses:
Residential real estate	$	1,715	$	(160	)	$	29	$	228		$	1,812
Home equity		202		-			-		21		$	223
Commercial real estate		3,335		(229	)		-		667		$	3,773
Construction and land development		756		-			-		342		$	1,098
Multifamily		472		-			-		57		$	529
Farmland		-		-			-		-		$	-
Commercial business		1,362		(1,178	)		25		1,295		$	1,504
Consumer		82		(54	)		20		(5	)	$	43
Manufactured homes		-		-			-		-		$	-
Government		38		-			-		(21	)	$	17
Total	$	7,962	$	(1,621	)	$	74	$	2,584		$	8,999

The Bancorp's activity in the allowance for loan losses, by loan segment, is summarized below for the twelve months ended December 31, 2018:

Allowance for loan losses:
Residential real estate	$	1,568	$	(194	)	$	1	$	340		$	1,715
Home equity		166		(48	)		-		84			202
Commercial real estate		3,125		(119	)		24		305			3,335
Construction and land development		618		-			-		138			756
Multifamily		622		-			-		(150	)		472
Farmland		-		-			-		-			-
Commercial business		1,298		(592	)		134		522			1,362
Consumer		31		(58	)		24		85			82
Manufactured homes		-		-			-		-			-
Government		54		-			-		(16	)		38
Total	$	7,482	$	(1,011	)	$	183	$	1,308		$	7,962

Financing Receivable, Impairment Evaluation [Table Text Block]

	Ending Balances

(Dollars in thousands)	Individually evaluated impairment reserves		Collectively evaluated impairment reserves		Loan receivables		Loans individually evaluated for impairment		Purchased credit impaired loans individually evaluated for impairment		Loans collectively evaluated for impairment

The Bancorp's allowance for loan losses impairment evaluation and loan receivables are summarized below at December 31, 2019:

Residential real estate	$	10	$	1,802	$	299,333	$	642	$	1,581	$	297,110
Home equity		4		219		49,181		221		216		48,744
Commercial real estate		-		3,773		283,108		1,078		487		281,543
Construction and land development		-		1,098		87,710		-		-		87,710
Multifamily		-		529		51,286		129		673		50,484
Farmland		-		-		227		-		-		227
Commercial business		152		1,352		103,088		1,041		1,150		100,897
Consumer		-		43		627		-		-		627
Manufactured homes		-		-		16,505		-		-		16,505
Government		-		17		15,804		-		-		15,804
Total	$	166	$	8,833	$	906,869	$	3,111	$	4,107	$	899,651


The Bancorp's allowance for loan losses impairment evaluation and loan receivables are summarized below at December 31, 2018:

Residential real estate	$	22		1,693		223,323	$	570	$	980	$	221,773
Home equity		9		193		45,483		141		123		45,219
Commercial real estate		210		3,125		253,104		1,703		402		250,999
Construction and land development		-		756		64,433		-		-		64,433
Multifamily		-		472		47,234		-		-		47,234
Farmland		-		-		240		-		-		240
Commercial business		5		1,357		103,439		423		1,440		101,576
Consumer		-		82		643		-		-		643
Manufactured homes		-		-		5,400		-		-		5,400
Government		-		38		21,101		-		-		21,101
Total	$	246	$	7,716	$	764,400	$	2,837	$	2,945	$	758,618

Financing Receivable Credit Quality Indicators [Table Text Block]

	Credit Exposure - Credit Risk Portfolio By Creditworthiness Category
	December 31, 2019
(Dollars in thousands)	2		3		4		5		6		7		8

Loan Segment	Moderate		Above average acceptable		Acceptable		Marginally acceptable		Pass/monitor		Special mention		Substandard		Total
Residential real estate	$	827	$	119,138	$	104,153	$	13,463	$	53,058		4,203		4,491	$	299,333
Home equity		100		6,536		40,027		264		934		813		507		49,181
Commercial real estate		-		2,030		82,158		135,058		56,917		5,380		1,565		283,108
Construction and land development		-		719		26,900		45,751		14,340		-		-		87,710
Multifamily		-		903		18,107		26,800		4,674		-		802		51,286
Farmland		-		-		-		-		227		-		-		227
Commercial business		8,312		13,158		19,638		39,016		20,009		2,228		727		103,088
Consumer		90		-		537		-		-		-		-		627
Manufactured homes		3,221		2,413		9,825		184		862		-		-		16,505
Government		-		1,889		11,505		2,410		-		-		-		15,804
Total	$	12,550	$	146,786	$	312,850	$	262,946	$	151,021	$	12,624	$	8,092	$	906,869

	December 31, 2018
(Dollars in thousands)	2		3		4		5		6		7		8

Loan Segment	Moderate		Above average acceptable		Acceptable		Marginally acceptable		Pass/monitor		Special mention		Substandard		Total
Residential real estate	$	261	$	58,276	$	100,374	$	10,404	$	44,734	$	3,908	$	5,366	$	223,323
Home equity		192		3,736		40,165		37		323		657		373		45,483
Commercial real estate		-		5,042		78,611		110,984		51,982		4,715		1,770		253,104
Construction and land development		-		322		24,271		29,383		10,457		-		-		64,433
Multifamily		-		569		19,255		23,417		3,844		149		-		47,234
Farmland		-		-		-		-		240		-		-		240
Commercial business		10,655		19,127		20,941		34,996		14,034		2,958		728		103,439
Consumer		202		-		441		-		-		-		-		643
Manufactured homes		723		2,953		599		196		909		20		-		5,400
Government		-		2,111		14,795		4,195		-		-		-		21,101
Total	$	12,033	$	92,136	$	299,452	$	213,612	$	126,523	$	12,407	$	8,237	$	764,400

Impaired Financing Receivables [Table Text Block]

							For the twelve months ended
	As of December 31, 2019						December 31, 2019
(Dollars in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Residential real estate	$	2,140	$	3,555	$	-	$	1,960	$	85
Home equity		429		451		-		380		10
Commercial real estate		1,547		2,141		-		1,578		52
Construction and land development		-		-		-		-		-
Multifamily		802		884		-		581		20
Farmland		-		-		-		-		-
Commercial business		1,814		1,906		-		1,909		81
Consumer		-		-		-		-		-
Manufactured homes		-		-		-		-		-
Government		-		-		-		-		-

With an allowance recorded:
Residential real estate		83		83		10		143		3
Home equity		8		8		4		50		-
Commercial real estate		18		18		-		382		-
Construction and land development		-		-		-		-		-
Multifamily		-		-		-		-		-
Farmland		-		-		-		-		-
Commercial business		377		377		152		513		4
Consumer		-		-		-		-		-
Manufactured homes		-		-		-		-		-
Government		-		-		-		-		-

Total:
Residential real estate	$	2,223	$	3,638	$	10	$	2,103	$	88
Home equity	$	437	$	459	$	4	$	430	$	10
Commercial real estate	$	1,565	$	2,159	$	-	$	1,960	$	52
Construction & land development	$	-	$	-	$	-	$	-	$	-
Multifamily	$	802	$	884	$	-	$	581	$	20
Farmland	$	-	$	-	$	-	$	-	$	-
Commercial business	$	2,191	$	2,283	$	152	$	2,422	$	85
Consumer	$	-	$	-	$	-	$	-	$	-
Manufactured homes	$	-	$	-	$	-	$	-	$	-
Government	$	-	$	-	$	-	$	-	$	-

							For the twelve months ended
	As of December 31, 2018						December 31, 2018
(Dollars in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Residential real estate	$	1,389	$	3,628	$	-	$	1,244	$	79
Home equity		207		214		-		111		2
Commercial real estate		1,624		2,222		-		1,216		64
Construction & land development		-		-		-		54		-
Multifamily		-		-		-		-		-
Farmland		-		-		-		-		-
Commercial business		1,799		2,038		-		880		38
Consumer		-		-		-		-		-
Manufactured homes		-		-		-		-		-
Government		-		-		-		-		-

With an allowance recorded:
Residential real estate		161		161		22		123		5
Home equity		57		57		9		35		-
Commercial real estate		481		481		210		320		-
Construction & land development		-		-		-		-		-
Multifamily		-		-		-		-		-
Farmland		-		-		-		-		-
Commercial business		64		64		5		140		1
Consumer		-		-		-		-		-
Manufactured homes		-		-		-		-		-
Government		-		-		-		-		-

Total:
Residential real estate	$	1,550	$	3,789	$	22	$	1,367	$	84
Home equity	$	264	$	271	$	9	$	146	$	2
Commercial real estate	$	2,105	$	2,703	$	210	$	1,536	$	64
Construction & land development	$	-	$	-	$	-	$	54	$	-
Multifamily	$	-	$	-	$	-	$	-	$	-
Farmland	$	-	$	-	$	-	$	-	$	-
Commercial business	$	1,863	$	2,102	$	5	$	1,020	$	39
Consumer	$	-	$	-	$	-	$	-	$	-
Manufactured homes	$	-	$	-	$	-	$	-	$	-
Government	$	-	$	-	$	-	$	-	$	-

Financing Receivable, Past Due [Table Text Block]

(Dollars in thousands)													Recorded Investments Greater than 90
	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days Past Due		Total Past Due		Current		Total Loans		Days Past Due and Accruing
December 31, 2019
Residential real estate	$	3,486	$	1,332	$	3,724	$	8,542	$	290,791	$	299,333	$	452
Home equity		90		24		388		502		48,679		49,181		19
Commercial real estate		1,461		170		719		2,350		280,758		283,108		61
Construction and land development		143		289		-		432		87,278		87,710		-
Multifamily		140		-		160		300		50,986		51,286		-
Farmland		-		-		-		-		227		227		-
Commercial business		926		583		870		2,379		100,709		103,088		288
Consumer		-		-		-		-		627		627		-
Manufactured homes		63		36		46		145		16,360		16,505		46
Government		-		-		-		-		15,804		15,804		-
Total	$	6,309	$	2,434	$	5,907	$	14,650	$	892,219	$	906,869	$	866

December 31, 2018
Residential real estate	$	3,659	$	909	$	4,362	$	8,930	$	214,393	$	223,323	$	122
Home equity		143		5		304		452		45,031		45,483		50
Commercial real estate		842		18		611		1,471		251,633		253,104		-
Construction and land development		491		533		-		1,024		63,409		64,433		-
Multifamily		-		149		-		149		47,085		47,234		-
Farmland		-		-		-		-		240		240		-
Commercial business		733		260		436		1,429		102,010		103,439		149
Consumer		1		-		-		1		642		643		-
Manufactured homes		-		72		-		72		5,328		5,400		-
Government		-		-		-		-		21,101		21,101		-
Total	$	5,869	$	1,946	$	5,713	$	13,528	$	750,872	$	764,400	$	321

Financing Receivable, Nonaccrual [Table Text Block]

(Dollars in thousands)
	December 31, 2019		December 31, 2018
Residential real estate	$	4,374	$	5,135
Home equity		473		270
Commercial real estate		658		695
Construction and land development		-		-
Multifamily		420		-
Farmland		-		-
Commercial business		582		495
Consumer		-		-
Manufactured homes		-		-
Government		-		-
Total	$	6,507	$	6,595

Schedule of Accretable Yield from Financing Receivables [Table Text Block]

(dollars in thousands)	First Personal
2018	$	157
2019		147

(dollars in thousands)	First Personal
2020		(96	)
2021		(24	)
Total	$	(120	)

(dollars in thousands)	First Federal		Liberty Savings		First Personal		AJ Smith		Total
2018	$	138	$	266	$	424	$	-	$	828
2019		22		42		586		1,174	$	1,824

(dollars in thousands)	First Personal		AJ Smith		Total
2020	$	392	$	800	$	1,192
2021		336		793		1,129
2022		325		793		1,118
2023		74		327		401
Total	$	1,127	$	2,712	$	3,839

Schedule of Financing Receivables Acquired Discount [Table Text Block]

(dollars in thousands)	First Federal				Liberty Savings				First Personal				AJ Smith
	Net fair value discount		Accretable period in months		Net fair value discount		Accretable period in months		Net fair value discount		Accretable period in months		Net fair value discount		Accretable period in months
Residential real estate	$	1,062		59	$	1,203		44	$	948		56	$	3,734		52
Home equity		44		29		5		29		51		50		141		32
Commercial real estate		-		-		-		-		208		56		8		9
Construction and land development		-		-		-		-		1		30		-		-
Multifamily		-		-		-		-		11		48		2		48
Consumer		-		-		-		-		146		50		1		5
Commercial business		-		-		-		-		348		24		-		-
Purchased credit impaired loans		-		-		-		-		424		32		-		-
Total	$	1,106			$	1,208			$	2,137			$	3,886