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

Quarterly report [Sections 13 or 15(d)]

Leases

Leases

9 Months Ended

Sep. 30, 2026

Under ASC 842, operating lease expense is generally recognized on a straight-line basis over the term of the lease. As the rate implicit in the leases generally is not readily determinable for our operating leases, the discount rates used to determine the present value of our lease liability are based on our incremental borrowing rate at the lease commencement date and commensurate with the remaining lease term. Our incremental borrowing rate for a lease is the rate of interest we would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Leases with an initial term of 12 months or less are not recorded on the balance sheet and are excluded from our weighted-average remaining lease term.

The following table summarizes supplemental cash flow and other information related to our operating leases:


(Dollars in thousands)	Nine Months Ended September 30,
	2026			2025



Operating cash flows
Cash paid for amounts included in the measurement of lease liabilities for leases	$	1,223		$	1,201



Weighted-average remaining lease terms (in years) - operating leases	12			13

Weighted-average discount rate - operating leases	7.63		%	7.67		%

Variable lease payments	$	209		$	209

Operating lease costs	1,444			1,442

Total lease costs (1)	$	1,653		$	1,651

(1) Included in occupancy and equipment costs on the condensed consolidated statements of income

The following table represents the maturity of the Company's operating lease liabilities as of September 30, 2026:


(Dollars in thousands)
Maturity Analysis
Remainder 2026	$	407
2027	1,657
2028	1,692
2029	1,679
2030	1,688
2031	1,722
Thereafter	13,388
Total	22,233
Less: Present value discount	(8,101)
Lease liability	$	14,132

At September 30, 2026, operating lease right of use assets were $14.5 million and are included in premises and equipment on the consolidated balance sheet. Operating lease liabilities of $14.1 million were included in other liabilities on the consolidated balance sheet.