Finward Bancorp Quarterly report [Sections 13 or 15(d)]

Quarterly report [Sections 13 or 15(d)]

Fair Value (Tables)

Fair Value (Tables)

3 Months Ended

Mar. 31, 2026

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

Assets measured at fair value on a recurring basis are summarized below:


			Fair Value Measurements at March 31, 2026 Using
(Dollars in thousands)	Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Interest rate swap contracts	$	3,445	$	-	$	3,445	$	-
Interest rate lock commitments	31		-		31		-
Available-for-sale debt securities:
U.S. government sponsored entities	8,483		-		8,483		-
Collateralized mortgage obligations and residential mortgage-backed securities	101,902		-		101,902		-
Municipal securities	195,410		-		195,410		-
Collateralized debt obligations	1,891		-		-		1,891
Total securities available-for-sale	$	307,686	$	-	$	305,795	$	1,891

Liabilities:
Interest rate swap contracts	$	3,445	$	-	$	3,445	$	-


			Fair Value Measurements at December 31, 2025 Using
(Dollars in thousands)	Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Interest rate swap contracts	$	3,641	$	-	$	3,641	$	-
Interest rate lock commitments	50		-		50		-
Available-for-sale debt securities:
U.S. government sponsored entities	8,466		-		8,466		-
Collateralized mortgage obligations and residential mortgage-backed securities	104,655		-		104,655		-
Municipal securities	201,214		-		201,214		-
Collateralized debt obligations	1,882		-		-		1,882
Total securities available-for-sale	$	316,217	$	-	$	314,335	$	1,882

Liabilities:
Interest rate swap contracts	$	3,641	$	-	$	3,641	$	-

Schedule of Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

A reconciliation of available-for-sale securities, which require significant adjustment based on unobservable data, are presented in the following table:


	(Dollars in thousands)
	Estimated Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Available-for- sale securities
Beginning balance, January 1, 2026	$	1,882
Principal payments	(4)
Total unrealized gains, included in other comprehensive income (loss)	13
Ending balance, March 31, 2026	$	1,891

Beginning balance, January 1, 2025	$	1,419
Principal payments	(4)
Total unrealized gains, included in other comprehensive income (loss)	215
Ending balance, March 31, 2025	$	1,630

Schedule of Fair Value Measurements, Nonrecurring


			Fair Value Measurements at December 31, 2025 Using

(Dollars in thousands)	Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Collateral dependent loans	$	6,535	$	-	$	-	$	6,535
Other real estate owned	$	89	$	-	$	-	$	89

Schedule of Fair Value Measurement Inputs and Valuation Techniques

The following tables present quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements.

(Dollars in thousands)

Fair Value at
March 31, 2026

Valuation
Technique

Significant Unobservable Inputs

Range

Weighted-Average

Collateralized debt obligations

1,891

Discounted cash flow model

Default rates, loss severity assumptions, discount rates

7.9% - 11.2%

9.6


(Dollars in thousands)	Fair Value at December 31, 2025		Valuation Technique	Significant Unobservable Inputs	Range		Weighted-Average
Collateralized debt obligations	$	1,882	Discounted cash flow model	Default rates, loss severity assumptions, discount rates	7.9% - 11.2%		9.6	%
Collateral dependent loans	$	6,535	Fair Value of Collateral	Discount for type of property and current market conditions	—% - 80%		8.6	%
Other real estate(1)	$	89	Fair Value of Collateral	Discount for type of property and current market conditions	—	%	—	%

(1) At March 31, 2026 and December 31, 2025, there was only one property, so no range or weighted-average range is reported.

Schedule of Fair Value, by Balance Sheet Grouping

The following table shows carrying values and related estimated fair values of financial instruments not carried at fair value in the condensed consolidated balance sheets as of the dates indicated. Estimated fair values are further categorized by the inputs used to measure fair value. Items that are not financial instruments are not included.


	March 31, 2026				Estimated Fair Value Measurements at March 31, 2026 Using
(Dollars in thousands)	Carrying Value		Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets:
Cash and cash equivalents	$	118,755	$	118,755	$	118,755	$	-	$	-

Loans receivable, net	1,437,833		1,395,102		-		-		1,395,102
Federal Home Loan Bank stock	6,547		6,547		-		6,547		-
Accrued interest receivable	7,700		7,700		-		7,700		-

Financial liabilities:
Non-interest bearing deposits	278,705		278,705		278,705		-		-
Interest bearing deposits	1,440,366		1,439,105		951,552		487,553		-
Federal funds purchased and repurchase agreements	40,815		40,732		38,686		2,046		-
Borrowed funds	50,000		49,723		-		49,723		-
Accrued interest payable	945		945		-		945		-


	December 31, 2025				Estimated Fair Value Measurements at December 31, 2025 Using
(Dollars in thousands)	Carrying Value		Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets:
Cash and cash equivalents	$	119,647	$	119,647	$	119,647	$	-	$	-
Loans held-for-sale	1,096		1,124		-		1,124		-
Loans receivable, net	1,432,881		1,403,061		-		-		1,403,061
Federal Home Loan Bank stock	6,547		6,547		-		6,547		-
Accrued interest receivable	7,781		7,781		-		7,781		-

Financial liabilities:
Non-interest bearing deposits	267,441		267,441		267,441		-		-
Interest bearing deposits	1,459,530		1,458,116		959,939		498,177		-
Repurchase agreements	39,703		39,671		37,717		1,954		-
Borrowed funds	45,000		44,921		-		44,921		-
Accrued interest payable	958		958		-		958		-

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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