Stock Based Compensation |
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Jun. 30, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock Based Compensation | Stock Based Compensation
The Company replaced its expired 2015 Stock Option and Incentive Plan with a new equity incentive plan named the Finward Bancorp 2025 Omnibus Equity Incentive Plan (the “Plan”), which was adopted by the Company’s Board of Directors on March 21, 2025, and approved by the Company’s shareholders on May 22, 2025. The maximum number of shares of common stock cumulatively available for issuance under the Plan is 250,889 shares. Awards granted under the Plan may be in the form of incentive stock options, non-qualified stock options, restricted stock, unrestricted stock, restricted stock units, performance shares, stock appreciation rights, or any combination thereof, as provided in the Plan. Unvested awards granted under the prior plan will continue to be governed by the terms of the award agreements entered into with the participants under the prior plan. Shares of common stock underlying awards granted under the prior plan that expire, terminate, or are canceled or forfeited under the terms of the prior plan will be available for issuance under the new plan.
During the second quarter of 2026, the Company granted 16,021 performance share units to certain members of senior management under the Company's 2025 Omnibus Equity Incentive Plan. The performance share units are subject to a three-year performance period from 2026 through 2028 and three-year cliff vesting. The number of shares earned is based on the achievement of annual ROA performance goals, weighted 25%, 25% and 50% for 2026, 2027 and 2028, respectively. Depending on the level of achievement of the applicable ROA performance goals, shares earned may range from 50% of target at threshold performance to 150% of target at maximum performance, with no shares earned for performance below threshold and interpolation between achievement levels.
The grant-date fair value of the PSUs is based on the market price of the Company's common stock on the grant date. Compensation expense is recognized over the requisite service period based on the number of PSUs expected to vest when achievement of the applicable performance conditions is considered probable. The Company reassesses the probability of achieving the performance conditions each reporting period and adjusts compensation expense for changes in those estimates. The Company has elected to account for forfeitures as they occur.
For the three months ended June 30, 2026, stock based compensation expense of $148 thousand was recorded, compared to $131 thousand for the three months ended June 30, 2025. For the six months ended June 30, 2026, stock based compensation expense of $274 thousand was recorded, compared to $229 thousand for the six months ended June 30, 2025. It is anticipated that current outstanding unvested awards will result in additional compensation expense of approximately $1.1 million which is expected to be recognized over a weighted average life of 2.0 years.
Restricted stock awards are issued with an award price equal to the market price of the Company’s common stock on the award date and vest one year after the grant date for independent directors and three years after the grant date for
employees. Forfeiture provisions exist for personnel that separate employment before the vesting period expires. Performance share units are reflected at target shares until achievement of the applicable performance conditions is determined. A summary of non-vested shares under the Company’s Plan for the six months ended June 30, 2026, follows:
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