Finward Bancorp Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Fair Value (Tables)

Fair Value (Tables)

6 Months Ended

Jun. 30, 2015

Other than Temporary Impairment, Credit Losses Recognized in Earnings [Table Text Block]

The table below shows the credit loss roll forward on a year-to-date basis for the Bancorp’s pooled trust preferred securities that have been classified with other-than-temporary impairment:

	(Dollars in thousands)
	Collateralized debt obligations
	other-than-temporary impairment
Ending balance, December 31, 2014	$	271
Additions not previously recognized		-
Ending balance, June 30, 2015	$	271

Schedule of Fair Value, Pooled Trust Preferred Securities [Table Text Block]

The following table contains information regarding the Bancorp’s pooled trust preferred securities impairment evaluation as of June 30, 2015:

Cusip		74043CAC1			74042TAJ0			01449TAB9			01450NAC6
Deal name		PreTSL XXIV			PreTSL XXVII			Alesco IX			Alesco XVII
Class		B-1			C-1			A-2A			B
Lowest credit rating assigned		CC			C			BB			CCC
Number of performing banks		55			30			58			48
Number of performing insurance companies		13			7			10			n/a
Number of issuers in default		19			8			1			4
Number of issuers in deferral		6			4			7			4
Defaults & deferrals as a % of performing collateral		39.90	%		29.34	%		8.28	%		16.96	%
Subordination:
As a % of performing collateral		7.23	%		-5.34	%		45.64	%		25.85	%
As a % of performing collateral - adjusted for projected future defaults		2.25	%		-13.14	%		42.53	%		21.62	%
Other-than-temporary impairment model assumptions:
Defaults:
Year 1 - issuer average		1.70	%		2.30	%		1.80	%		1.80	%
Year 2 - issuer average		1.70	%		2.30	%		1.80	%		1.80	%
Year 3 - issuer average		1.70	%		2.30	%		1.80	%		1.80	%
> 3 Years - issuer average		(1)			(1)			(1)			(1)
Discount rate - 3 month Libor, plus implicit yield spread at purchase		1.48	%		1.23	%		1.27	%		1.44	%
Recovery assumptions		(2)			(2)			(2)			(2)
Prepayments		0.00	%		0.00	%		0.00	%		0.00	%
Other-than-temporary impairment	$	41		$	132		$	36		$	62

(1) - Default rates > 3 years are evaluated on a issuer by issuer basis and range from 0.25% to 5.00%.

(2) - Recovery assumptions are evaluated on a issuer by issuer basis and range from 0% to 15% with a five year lag.

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

There were no transfers to or from Levels 1 and 2 during the six months ended June 30, 2015. Assets measured at fair value on a recurring basis are summarized below:

			Fair Value Measurements at June 30, 2015 Using
			Quoted Prices in
			Active Markets		Significant Other		Significant
(Dollars in thousands)	Estimated		for Identical		Observable		Unobservable
	Fair		Assets		Inputs		Inputs
	Value		(Level 1)		(Level 2)		(Level 3)
Available-for-sale debt securities:
Money market fund	$	2,097	$	2,097	$	-	$	-
U.S. government sponsored entities		15,205		-		15,205		-
Collateralized mortgage obligations and residential mortgage-backed securities		115,315		-		115,315		-
Municipal securities		92,111		-		92,111		-
Collateralized debt obligations		2,622		-		-		2,622
Total securities available-for-sale	$	227,350	$	2,097	$	222,631	$	2,622

			Fair Value Measurements at December 31, 2014 Using
			Quoted Prices in
			Active Markets		Significant Other		Significant
(Dollars in thousands)	Estimated		for Identical		Observable		Unobservable
	Fair		Assets		Inputs		Inputs
	Value		(Level 1)		(Level 2)		(Level 3)
Available-for-sale debt securities:
Money market fund	$	6,453	$	6,453	$	-	$	-
U.S. government sponsored entities		12,869		-		12,869		-
Collateralized mortgage obligations and residential mortgage-backed securities		117,574		-		117,574		-
Municipal securities		80,725		-		80,725		-
Collateralized debt obligations		2,432		-		-		2,432
Total securities available-for-sale	$	220,053	$	6,453	$	211,168	$	2,432

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

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

	Fair Value Measurements
	Using Significant
	Unobservable
	Inputs
(Dollars in thousands)	(Level 3)
	Available-for-
	sale securities
Total realized/unrealized (losses)/gains, January 1, 2014	$	1,968
Included in earnings		-
Included in other comprehensive income		464
Transfers in and/or (out) of Level 3		-
Ending balance, December 31, 2014	$	2,432

Total realized/unrealized (losses)/gains, January 1, 2015	$	2,432
Included in earnings		-
Included in other comprehensive income		190
Transfers in and/or (out) of Level 3		-
Ending balance, June 30, 2015	$	2,622

Fair Value, Assets and Liabilities Measured on Nonrecurring Basis [Table Text Block]

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

Fair Value Measurements at June 30, 2015 Using

Quoted Prices in

Active Markets

Significant Other

Significant

(Dollars in thousands)

Estimated

for Identical

Observable

Unobservable

Fair

Assets

Inputs

Value

(Level 1)

(Level 2)

(Level 3)

Impaired loans

6,210

Foreclosed real estate

1,530

Fair Value Measurements at December 31, 2014 Using