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, 2020

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

(Dollars in thousands)
	December 31, 2020			December 31, 2019
Loans secured by real estate:
Residential real estate	$	286,048		$	299,569
Home equity		39,233			49,118
Commercial real estate		298,257			283,108
Construction and land development		93,562			87,710
Multifamily		50,571			51,286
Farmland		215			227
Total loans secured by real estate		767,886			771,018
Commercial business		158,140			103,222
Consumer		1,025			627
Manufactured homes		24,232			13,285
Government		10,142			15,804
Subtotal		961,425			903,956
Plus:
Net deferred loan origination fees		5,303			2,934
Undisbursed loan funds		(150	)		(21	)
Loans receivable	$	966,578		$	906,869

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, 2020:

Allowance for loan losses:
Residential real estate	$	1,812	$	(2	)	$	27	$	374		$	2,211
Home equity		223		-			-		53			276
Commercial real estate		3,773		(80	)		-		1,713			5,406
Construction and land development		1,098		(17	)		-		324			1,405
Multifamily		529		-			-		97			626
Farmland		-		-			-		-			-
Commercial business		1,504		(158	)		17		1,145			2,508
Consumer		43		(29	)		14		(2	)		26
Manufactured homes		-		-			-		-			-
Government		17		-			-		(17	)		-
Total	$	8,999	$	(286	)	$	58	$	3,687		$	12,458

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

Financing Receivable, Impairment Evaluation [Table Text Block]

	Ending Balances

(Dollars in thousands)	Individually evaluated for impairment reserves		Collectively evaluated for 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, 2020:

Residential real estate	$	173	$	2,038	$	285,651	$	868	$	1,297	$	283,486
Home equity		1		275		39,286		216		137		38,933
Commercial real estate		1,089		4,317		298,257		6,190		151		291,916
Construction and land development		-		1,405		93,562		-		-		93,562
Multifamily		-		626		50,571		95		621		49,855
Farmland		-		-		215		-		-		215
Commercial business		512		1,996		156,965		1,086		1,160		154,719
Consumer		-		26		1,025		-		-		1,025
Manufactured homes		-		-		30,904		-		-		30,904
Government		-		-		10,142		-		-		10,142
Total	$	1,775	$	10,683	$	966,578	$	8,455	$	3,366	$	954,757


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

Financing Receivable Credit Quality Indicators [Table Text Block]

	Credit Exposure - Credit Risk Portfolio By Creditworthiness Category
	December 31, 2020
(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	$	1,202	$	116,631	$	100,334	$	15,753	$	41,805	$	3,539	$	6,387	$	285,651
Home equity		66		4,949		31,974		108		933		761		495		39,286
Commercial real estate		-		1,847		70,062		150,983		55,202		11,983		8,180		298,257
Construction and land development		-		4,282		31,612		41,961		12,055		3,652		-		93,562
Multifamily		-		709		7,264		35,621		5,065		1,408		504		50,571
Farmland		-		-		-		-		215		-		-		215
Commercial business		7,929		75,783		16,842		33,942		20,067		1,341		1,061		156,965
Consumer		510		1		514		-		-		-		-		1,025
Manufactured homes		6,673		1,864		21,460		176		731		-		-		30,904
Government		-		-		9,202		940		-		-		-		10,142
Total	$	16,380	$	206,066	$	289,264	$	279,484	$	136,073	$	22,684	$	16,627	$	966,578

	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

Impaired Financing Receivables [Table Text Block]

							For the twelve months ended
	As of December 31, 2020						December 31, 2020
(Dollars in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Residential real estate	$	1,895	$	3,228	$	-	$	2,028	$	115
Home equity		352		363		-		373		16
Commercial real estate		1,177		1,761		-		1,305		80
Construction and land development		-		-		-		-		-
Multifamily		716		798		-		763		42
Farmland		-		-		-				-
Commercial business		1,497		1,514		-		1,591		80
Consumer		-		-		-		-		-
Manufactured homes		-		-		-		-		-
Government		-		-		-		-		-

With an allowance recorded:
Residential real estate	$	270	$	314	$	173	$	174	$	6
Home equity		1		9		1		5		-
Commercial real estate		5,164		5,164		1,089		2,109		16
Construction and land development		-		-		-		-		-
Multifamily		-		-		-		-		-
Farmland		-		-		-				-
Commercial business		749		749		512		739		30
Consumer		-		-		-		-		-
Manufactured homes		-		-		-		-		-
Government		-		-		-		-		-

Total:
Residential real estate	$	2,165	$	3,542	$	173	$	2,202	$	121
Home equity	$	353	$	372	$	1	$	378	$	16
Commercial real estate	$	6,341	$	6,925	$	1,089	$	3,414	$	96
Construction & land development	$	-	$	-	$	-	$	-	$	-
Multifamily	$	716	$	798	$	-	$	763	$	42
Farmland	$	-	$	-	$	-	$	-	$	-
Commercial business	$	2,246	$	2,263	$	512	$	2,330	$	110
Consumer	$	-	$	-	$	-	$	-	$	-
Manufactured homes	$	-	$	-	$	-	$	-	$	-
Government	$	-	$	-	$	-	$	-	$	-

							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 & 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 & 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	$	-	$	-	$	-	$	-	$	-

Financing Receivable, Past Due [Table Text Block]

The Bancorp's age analysis of past due loans is summarized below:
(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days Past Due		Total Past Due		Current		Total Loans		Recorded Investments Greater than 90 Days Past Due and Accruing
December 31, 2020
Residential real estate	$	2,797	$	1,119	$	4,875	$	8,791	$	276,860	$	285,651	$	80
Home equity		616		323		416		1,355		37,931		39,286		29
Commercial real estate		1,172		237		680		2,089		296,168		298,257		437
Construction and land development		471		-		20		491		93,071		93,562		20
Multifamily		94		266		150		510		50,061		50,571		-
Farmland		-		-		-		-		215		215		-
Commercial business		845		96		269		1,210		155,755		156,965		-
Consumer		2		-		-		2		1,023		1,025		-
Manufactured homes		303		173		-		476		30,428		30,904		-
Government		380		-		-		380		9,762		10,142		-
Total	$	6,680	$	2,214	$	6,410	$	15,304	$	951,274	$	966,578	$	566

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

Financing Receivable, Nonaccrual [Table Text Block]

The Bancorp's loans on nonaccrual status are summarized below:

(Dollars in thousands)
	December 31,		December 31,
	2020		2019
Residential real estate	$	6,390	$	4,374
Home equity		476		473
Commercial real estate		5,390		658
Construction and land development.		-		-
Multifamily		504		420
Farmland		-		-
Commercial business		1,039		582
Consumer		-		-
Manufactured homes		-		-
Government		-		-
Total	$	13,799	$	6,507

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

(dollars in thousands)	First Personal
2019	$	147
2020		99

(dollars in thousands)	First Personal
2021		21
Total	$	21

Accretable yield, or income recorded for the twelve months ended December 31, is as follows:

(dollars in thousands)	First Federal		Libery Savings		First Personal		AJSB		Total
2019	$	22	$	42	$	586	$	1,174	$	1,824
2020		-		-		534		1,286		1,820

Accretable yield, or income expected to be recorded in the future is as follows:

(dollars in thousands)	First Personal		AJ Smith		Total
2021	$	243	$	536	$	779
2022		243		536		779
2023		106		355		461
Total	$	592	$	1,426	$	2,018

Schedule of Financing Receivables Acquired Discount [Table Text Block]

(dollars in thousands)	First Federal				Libery Savings				First Personal				AJSB
	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