Finward Bancorp (NASDAQ:FNWD) (the "Bancorp"), the holding company for Peoples Bank (the "Bank"), today announced that net income available to common stockholders was $2.1 million, or $0.48 per diluted share, for the quarter ended June 30, 2026, as compared to $2.2 million, or $0.52 per diluted share, for the quarter ended March 31, 2026. Selected performance metrics are as follows for the periods presented:

Performance Ratios
	Quarter ended
	6/30/2026		3/31/2026		12/31/2025		9/30/2025		6/30/2025
Return on equity	4.74	%	5.00	%	4.66	%	8.96	%	5.66	%
Return on assets	0.42	%	0.44	%	0.39	%	0.68	%	0.42	%
Net interest margin, tax-equivalent (non-GAAP)	3.37	%	3.35	%	3.32	%	3.18	%	3.11	%
Non-interest income/average assets	0.48	%	0.48	%	0.29	%	0.57	%	0.53	%
Non-interest expense/average assets	2.95	%	2.93	%	2.90	%	2.74	%	2.90	%
Efficiency ratio	84.52	%	84.45	%	89.50	%	81.22	%	88.92	%

"Despite overhead impacts from merger-related expenses and a previously disclosed branch closure, we showed continued progress in key areas this quarter. Results were supported by solid loan growth, stable deposit funding, and continued momentum across the organization. These results reflect the dedication of our team and the strength of the relationships we have built throughout Northwest Indiana and Chicagoland, and I am proud of what our team has accomplished together," said Benjamin Bochnowski, Chief Executive Officer. "The quarter was also highlighted by the announcement of our planned merger with First Financial. This transaction recognizes the value of our franchise and positions our customers, employees, communities, and shareholders to benefit from an even stronger banking organization in the years ahead. While we are excited about the opportunities this partnership creates, our near-term priorities are clear: serving customers, maintaining strong credit quality, and preparing for a successful combination with First Financial."

Highlights of the current period include:

Net Interest Margin - The net interest margin for the quarter ended June 30, 2026 was 3.25% compared to 3.23% for the quarter ended March 31, 2026. Net interest margin on a tax-equivalent basis (a non-GAAP measure) for the quarter ended June 30, 2026 was 3.37%, as compared to 3.35% for the quarter ended March 31, 2026. Net interest margin increased from the prior quarter primarily due to continued repricing and maturity of the existing loan portfolio, as well as strength in new loan originations.

Funding - As of June 30, 2026, deposits totaled $1.73 billion, an increase of $13.5 million, or 0.8% compared with March 31, 2026 balances, which totaled $1.72 billion. As of June 30, 2026, non-interest-bearing deposits totaled $270.7 million, a decrease of $8.0 million. Core deposits totaled $1.2 billion at both June 30, 2026 and March 31, 2026. Core deposits include checking, savings, and money market accounts and represented 71.3% of the Bancorp’s total deposits at June 30, 2026. As of June 30, 2026, balances for certificates of deposit totaled $497.4 million, compared to $488.8 million on March 31, 2026, an increase of $8.6 million or 1.8%. The increase in total portfolio deposits is primarily related to cyclical flows and continued adjustments to deposit pricing. In addition, as of June 30, 2026, borrowings, federal funds purchased and repurchase agreements totaled $95.3 million, an increase of $4.5 million or 4.9%, compared to March 31, 2026. The increase in borrowings was primarily attributable to new FHLB advances in conjunction with increased loan origination during the quarter.

As of June 30, 2026, 72.5% of our deposits are fully FDIC insured, and another 7.8% are further backed by the Indiana Public Deposit Insurance Fund. The Bancorp’s liquidity position remains strong with solid core deposit customer relationships, excess cash, debt securities, contractual loan repayments, and access to diversified borrowing sources. As of June 30, 2026, the Bancorp had available liquidity of $604 million including borrowing capacity from the FHLB and Federal Reserve facilities.

Securities Portfolio - Securities available for sale balances increased by $2.5 million to $310.2 million as of June 30, 2026, compared to $307.7 million as of March 31, 2026. The yield on the securities portfolio increased to 2.27% for the three months ended June 30, 2026 from 2.22% for the three months ended March 31, 2026. The increase in securities available for sale was primarily attributable to a decrease in the negative fair value adjustment to securities. The Bank did not sell or purchase any securities during the quarter.

Lending - The Bank’s aggregate loan portfolio totaled $1.50 billion on June 30, 2026 and $1.46 billion on March 31, 2026. During the three months ended June 30, 2026, the Bank originated $81.3 million in new commercial loans, compared to $37.4 million during the three months ended March 31, 2026, based on strength experienced in the lending pipeline, specifically within commercial business and commercial real estate portfolios. At June 30, 2026, the Bancorp’s portfolio loan balances in commercial real estate owner occupied properties totaled $262.4 million or 17.4% of loans receivable and commercial real estate non-owner occupied properties totaled $334.9 million or 22.3% of loans receivable. Of the $334.9 million in commercial real estate non-owner occupied properties balances, loans collateralized by office buildings represented $41.2 million or 2.7% of total loan balances.

Asset Quality - At June 30, 2026, non-performing loans totaled $16.5 million, compared to $12.4 million at March 31, 2026, an increase of $4.2 million or 33.8%. The Bank’s ratio of non-performing loans to total loans was 1.10% at June 30, 2026, compared to 0.85% at March 31, 2026. The Bank’s ratio of non-performing assets to total assets was 0.90% at June 30, 2026 and 0.71% at March 31, 2026. The non-performing balance increases are driven by a variety of credits and not due to concentrations or an indication of overall economic stress within our customer base or footprint. The increase in non-performers consisted of twelve loans from eleven different relationships, averaging $417 thousand per loan across commercial real estate, multifamily and residential real estate. Management maintains a vigilant oversight of nonperforming loans through proactive relationship management. The Bank has no known credit exposures to non-depositary financial institutions at this time.

The allowance for credit losses (ACL) on loans totaled $17.7 million at June 30, 2026, or 1.18% of total loans receivable, compared to $17.3 million at March 31, 2026, or 1.19% of total loans receivable, an increase of $409 thousand or 2.37%. The Bank's unused commitment reserve, included in other liabilities, totaled $1.9 million at June 30, 2026, compared to $2.0 million at March 31, 2026, a decrease of $114 thousand or 5.6%.

For the quarter ended June 30, 2026, the Bank recorded a net provision for credit loss totaling $264 thousand based on quarterly growth in certain loan segment balances and other factors within the Bank's ACL modeling. The second quarter's provision consisted of a $378 thousand provision for credit losses on loans, and a $114 thousand reversal of credit losses on unused commitments. For the quarter ended June 30, 2026, net loan recoveries totaled $31 thousand, compared to net loan recoveries of $3 thousand for the quarter ended March 31, 2026. The allowance for credit losses as a percentage of non-performing loans, or coverage ratio, was 106.9% at June 30, 2026, compared to 139.7% at March 31, 2026.

Operating Income and Expenses - Non-interest income as a percentage of average assets was 0.48% for both the quarter ended June 30, 2026 and March 31, 2026. Total non-interest expense increased slightly from the prior quarter, while non-interest expense as a percentage of average assets was 2.95% for the quarter ended June 30, 2026, as compared to 2.93% for the quarter ended March 31, 2026. The aggregate reduction in non-interest income as compared to the prior quarter was due to a $180 thousand loss associated with the closure of one of the Bancorp's leased branch locations. The increase in non-interest expense quarter over quarter was primarily attributable to compensation and benefits and seasonality of certain professional and outside services expenses.

Capital Adequacy - The Bank’s tier 1 leverage ratio was 9.31% as of June 30, 2026 and 9.24% as of March 31, 2026. The Bank’s capital continues to exceed all applicable regulatory capital requirements. The Bancorp’s tangible book value per share (non-GAAP) was $35.75 at June 30, 2026, up from $34.39 as of March 31, 2026. Tangible common equity to tangible assets (non-GAAP) was 7.68% at June 30, 2026, up from 7.48% as of March 31, 2026.

Disclosures Regarding Non-GAAP Financial Measures

Reported amounts are presented in accordance with GAAP. In this press release, the Bancorp also provides certain financial measures identified as non-GAAP. The Bancorp’s management believes that the non-GAAP information, which consists of tangible common equity, tangible book value per share, tangible common equity/tangible assets, net interest margin on a tax-equivalent basis, and efficiency ratio which can vary from period to period, provides a better comparison of period to period operating performance. The net interest income and net interest margin on a tax-equivalent basis measures recognize the income tax savings when comparing taxable and tax-exempt assets. Interest income and yields on tax-exempt securities and loans are presented using the current federal corporate income tax rate of 21%. Management believes that it is standard practice in the banking industry to present net interest income and net interest margin on a fully tax-equivalent basis and that it may enhance comparability for peer comparison purposes. Additionally, the Bancorp believes this information is utilized by regulators and market analysts to evaluate a company’s financial condition and, therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. Refer to the "Reconciliation of non-GAAP Financial Measures" below for more information.

About Finward Bancorp

Finward Bancorp is a locally managed and independent financial holding company headquartered in Munster, Indiana, whose activities are primarily limited to holding the stock of Peoples Bank. Peoples Bank provides a wide range of personal, business, electronic and wealth management financial services from its 24 locations in Lake and Porter Counties in Northwest Indiana and Chicagoland. Finward Bancorp’s common stock is quoted on The NASDAQ Stock Market, LLC under the symbol FNWD. The website ibankpeoples.com provides information on Peoples Bank’s products and services, and Finward Bancorp’s investor relations.

Forward Looking Statements

This press release may contain forward-looking statements regarding the financial performance, business prospects, growth and operating strategies of the Bancorp. For these statements, the Bancorp claims the protections of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Statements in this communication should be considered in conjunction with the other information available about the Bancorp, including the information in the filings the Bancorp makes with the SEC. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward-looking statements are based on management’s expectations and are subject to a number of risks and uncertainties. Forward-looking statements are typically identified by using words such as "anticipate," "estimate," "project," "intend," "plan," "believe," "will" and similar expressions in connection with any discussion of future operating or financial performance.

Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include: changes in domestic and international trade policies, including tariffs and other non-tariff barriers, and the effects of such changes on the Bank and its customers; risks related to the development and use of artificial intelligence (AI); changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates, market liquidity, and capital markets, as well as the magnitude of such changes, which may reduce net interest margins; inflation; further deterioration in the market value of securities held in the Bancorp’s investment securities portfolio, whether as a result of macroeconomic factors or otherwise; customer acceptance of the Bancorp’s products and services; customer borrowing, repayment, investment, and deposit practices; customer disintermediation; the introduction, withdrawal, success, and timing of business initiatives; competitive conditions; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with mergers, acquisitions, and divestitures; economic conditions; and the impact, extent, and timing of technological changes, capital management activities, regulatory actions by the Federal Deposit Insurance Corporation and Indiana Department of Financial Institutions, and other actions of the Federal Reserve Board and legislative and regulatory actions and reforms. Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the Bancorp’s reports (such as the Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K) filed with the SEC and available at the SEC’s Internet website (www.sec.gov). All subsequent written and oral forward-looking statements concerning matters attributable to the Bancorp or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. Except as required by law, The Bancorp does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statement is made.

In addition to the above factors, we also caution that the actual amounts and timing of any future common stock dividends or share repurchases will be subject to various factors, including our capital position, financial performance, capital impacts of strategic initiatives, market conditions, and regulatory and accounting considerations, as well as any other factors that our Board of Directors deems relevant in making such a determination. Therefore, there can be no assurance that we will repurchase shares or pay any dividends to holders of our common stock, or as to the amount of any such repurchases or dividends.

Performance Ratios

	Quarter Ended															Six Months Ended
	6/30/2026			3/31/2026			12/31/2025			9/30/2025			6/30/2025			6/30/2026			6/30/2025
Return on equity		4.74	%		5.00	%		4.66	%		8.96	%		5.66	%		4.87	%		3.39	%
Return on assets		0.42	%		0.44	%		0.39	%		0.68	%		0.42	%		0.43	%		0.25	%
Yield on loans		5.55	%		5.50	%		5.64	%		5.49	%		5.36	%		5.53	%		5.31	%
Yield on security investments		2.27	%		2.22	%		2.29	%		2.40	%		2.42	%		2.25	%		2.40	%
Total yield on earning assets		4.93	%		4.86	%		4.96	%		4.91	%		4.82	%		4.90	%		4.77	%
Cost of interest-bearing deposits		1.98	%		1.92	%		2.09	%		2.16	%		2.12	%		1.95	%		2.14	%
Cost of federal funds purchased and repurchase agreements		2.82	%		2.85	%		3.12	%		3.37	%		3.32	%		2.84	%		3.34	%
Cost of borrowed funds		3.80	%		3.70	%		3.70	%		3.64	%		3.91	%		3.75	%		4.01	%
Total cost of interest-bearing liabilities		2.06	%		2.00	%		2.16	%		2.25	%		2.22	%		2.03	%		2.25	%
Net interest margin		3.25	%		3.23	%		3.18	%		3.04	%		2.97	%		3.24	%		2.89	%
Net interest margin, tax-equivalent (non-GAAP)⁽¹⁾		3.37	%		3.35	%		3.32	%		3.18	%		3.11	%		3.36	%		3.03	%
Non-interest income/average assets		0.48	%		0.48	%		0.29	%		0.57	%		0.53	%		0.48	%		0.48	%
Non-interest expense/average assets		2.95	%		2.93	%		2.90	%		2.74	%		2.90	%		2.95	%		2.86	%
Efficiency ratio (non-GAAP)⁽¹⁾		84.52	%		84.45	%		89.50	%		81.22	%		88.92	%		84.48	%		90.95	%

Non-performing assets to total assets		0.90	%		0.71	%		0.65	%		0.76	%		0.74	%		0.90	%		0.74	%
Non-performing loans to total loans		1.10	%		0.85	%		0.77	%		0.94	%		0.91	%		1.10	%		0.91	%
Allowance for credit losses to non-performing loans		106.92	%		139.72	%		156.84	%		129.41	%		133.01	%		106.92	%		133.01	%
Allowance for credit losses to loans receivable		1.18	%		1.19	%		1.21	%		1.22	%		1.22	%		1.18	%		1.22	%
Net charge-offs (recoveries) as a percentage of average loans receivable		(0.01	%)		0.00	%		0.08	%		0.07	%		(0.11	%)		(0.01	)%		(0.05	)%

Basic earnings per share	$	0.49		$	0.52		$	0.46		$	0.82		$	0.50		$	1.01		$	0.61
Diluted earnings per share	$	0.48		$	0.52		$	0.46		$	0.81		$	0.50		$	1.00		$	0.61
Weighted average common shares outstanding—basic		4,280,844			4,276,530			4,273,421			4,273,022			4,271,952			4,278,699			4,269,478
Weighted average common shares outstanding—diluted		4,319,052			4,302,206			4,301,462			4,299,007			4,291,319			4,316,606			4,287,877

Stockholders' equity to total assets		8.74	%		8.56	%		8.64	%		8.06	%		7.48	%		8.74	%		7.48	%
Tangible common equity to tangible assets (non-GAAP) ⁽¹⁾		7.68	%		7.48	%		7.56	%		6.99	%		6.41	%		7.68	%		6.41	%
Book value per share	$	41.15		$	39.81		$	40.37		$	38.24		$	35.67		$	41.15		$	35.67
Tangible common book value per share (non-GAAP) ⁽¹⁾	$	35.75		$	34.39		$	34.92		$	32.77		$	30.16		$	35.75		$	30.16
Closing stock price	$	36.78		$	36.30		$	35.19		$	32.09		$	27.62		$	35.19		$	27.62
Dividends declared per common share	$	0.12		$	0.12		$	0.12		$	0.12		$	0.12		$	0.24		$	0.12
(1) See the reconciliation of these non-GAAP measures to the most directly comparable GAAP measures on pg 13.

Average Balances, Interest, Rates

	Quarter Ended
	June 30, 2026							March 31, 2026							December 31, 2025
(Dollars in thousands)	Average Balance			Interest		Yield/Rate		Average Balance			Interest		Yield/Rate		Average Balance			Interest		Yield/Rate
ASSETS
Interest bearing deposits in other financial institutions	$	78,886		$	718	3.64	%	$	96,250		$	949	3.94	%	$	100,035		$	903	3.61	%
Federal funds sold		1,046			8	3.06	%		1,523			11	2.89	%		1,113			10	3.59	%
Securities available-for-sale		309,251			1,757	2.27	%		318,670			1,771	2.22	%		327,747			1,877	2.29	%
Loans receivable		1,474,063			20,468	5.55	%		1,445,921			19,871	5.50	%		1,454,174			20,496	5.64	%
Federal Home Loan Bank stock		6,547			114	6.97	%		6,547			119	7.27	%		6,547			126	7.70	%
Total interest earning assets		1,869,793		$	23,065	4.93	%		1,868,911		$	22,721	4.86	%		1,889,616		$	23,412	4.96	%
Cash and non-interest bearing deposits in other financial institutions		15,504							21,331							23,385
Allowance for credit losses		(17,418	)						(17,608	)						(18,049	)
Other non-interest bearing assets		143,484							143,452							146,675
Total assets	$	2,011,363						$	2,016,086						$	2,041,627

LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing deposits	$	1,446,072		$	7,159	1.98	%	$	1,447,994		$	6,959	1.92	%	$	1,458,748		$	7,605	2.09	%
Federal funds purchased and repurchase agreements		33,076			233	2.82	%		38,113			272	2.85	%		40,968			317	3.10	%
Borrowed funds		51,925			493	3.80	%		45,334			419	3.70	%		48,089			448	3.73	%
Total interest bearing liabilities		1,531,073		$	7,885	2.06	%		1,531,441		$	7,650	2.00	%		1,547,805		$	8,370	2.16	%
Non-interest bearing deposits		268,540							270,626							288,073
Other non-interest bearing liabilities		35,243							34,588							35,588
Total liabilities		1,834,856							1,836,655							1,871,466
Total stockholders' equity		176,507							179,431							170,161
Total liabilities and stockholders' equity	$	2,011,363						$	2,016,086						$	2,041,627

Net interest income				$	15,180						$	15,071						$	15,042
Return on average assets		0.42	%						0.44	%						0.39	%
Return on average equity		4.74	%						5.00	%						4.66	%
Net interest margin		3.25	%						3.23	%						3.18	%
Net interest margin, tax-equivalent (non-GAAP)⁽¹⁾		3.37	%						3.35	%						3.32	%
Net interest spread		2.87	%						2.86	%						2.80	%
Ratio of interest-earning assets to interest-bearing liabilities	1.22x							1.22x							1.22x
(1) See the reconciliation of non-GAAP measures to the most directly comparable GAAP measures on pg 13.

Consolidated Balance Sheets

	As of
(Dollars in thousands)	6/30/2026			3/31/2026			12/31/2025			9/30/2025			6/30/2025
ASSETS
Cash and non-interest bearing deposits in other financial institutions	$	17,384		$	15,758		$	18,265		$	19,458		$	23,027
Interest bearing deposits in other financial institutions		76,270			102,997			101,382			84,157			79,976
Federal funds sold		988			-			-			563			411
Total cash and cash equivalents		94,642			118,755			119,647			104,178			103,414
Securities available-for-sale		310,198			307,686			316,227			335,150			327,845
Loans held-for-sale		1,083			-			1,096			2,641			834
Loans receivable, net of deferred fees and costs		1,503,793			1,455,118			1,450,387			1,473,774			1,484,278
Less: allowance for credit losses		(17,694	)		(17,285	)		(17,506	)		(17,977	)		(18,184	)
Net loans receivable		1,486,099			1,437,833			1,432,881			1,455,797			1,466,094
Federal Home Loan Bank stock		6,547			6,547			6,547			6,547			6,547
Accrued interest receivable		7,671			7,700			7,781			7,585			7,651
Premises and equipment		43,932			44,315			44,976			45,544			46,179
Cash value of bank owned life insurance		34,010			33,786			33,586			33,843			33,932
Goodwill		22,395			22,395			22,395			22,395			22,395
Other intangible assets		984			1,076			1,172			1,273			1,414
Other assets		33,145			35,063			34,873			37,771			41,606
Total assets	$	2,040,706		$	2,015,156		$	2,021,181		$	2,052,724		$	2,057,911
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing	$	270,682		$	278,705		$	267,441		$	280,296		$	271,172
Interest bearing		1,461,862			1,440,366			1,459,530			1,470,350			1,483,678
Total		1,732,544			1,719,071			1,726,971			1,750,646			1,754,850
Federal funds purchased and repurchase agreements		30,301			40,815			39,703			48,426			48,331
Borrowed funds		65,000			50,000			45,000			55,000			65,000
Accrued expenses and other liabilities		34,574			32,870			34,844			33,157			35,477
Total liabilities		1,862,419			1,842,756			1,846,518			1,887,229			1,903,658
Stockholders' Equity:
Preferred stock, no par or stated value; 10,000,000 shares authorized, none outstanding		-			-			-			-			-
Common stock, no par or stated value; 10,000,000 shares authorized⁽¹⁾		-			-			-			-			-
Additional paid-in capital		70,530			70,397			70,331			70,233			70,263
Accumulated other comprehensive loss		(41,532	)		(45,713	)		(41,662	)		(49,266	)		(57,560	)
Retained earnings		149,289			147,716			145,994			144,528			141,550
Total stockholders' equity		178,287			172,400			174,663			165,495			154,253
Total liabilities and stockholders' equity	$	2,040,706		$	2,015,156		$	2,021,181		$	2,052,724		$	2,057,911
(1) Shares of common stock issued and outstanding were 4,333,002 at 6/30/2026; 4,330,486 at 3/31/2026; 4,326,747 at 12/31/2025; 4,327,511 at 9/30/2025; and 4,324,889 at 6/30/2025.

Consolidated Statements of Income

	Quarter Ended
(Dollars in thousands, except per share data)	6/30/2026			3/31/2026		12/31/2025			9/30/2025			6/30/2025
Interest income:
Loans	$	20,468		$	19,871	$	20,496		$	20,246		$	19,940
Securities & short-term investments		2,597			2,850		2,916			3,094			2,730
Total interest income		23,065			22,721		23,412			23,340			22,670
Interest expense:
Deposits		7,159			6,959		7,605			7,996			7,780
Borrowings		726			691		765			901			945
Total interest expense		7,885			7,650		8,370			8,897			8,725
Net interest income		15,180			15,071		15,042			14,443			13,945
Provision for (benefit from) credit losses		264			55		(84	)		(301	)		(274	)
Net interest income after provision for credit losses		14,916			15,016		15,126			14,744			14,219
Non-interest income:
Fees and service charges		1,331			1,295		1,485			1,463			1,330
Wealth management operations		748			661		659			759			696
Gain (loss) on tax credit investment		-			-		-			23			-
Gain (loss) on sale of loans held-for-sale, net		228			257		346			265			378
Gain (loss) on sale of securities, net		-			-		(1,577	)		-			-
Bank owned life insurance		223			201		522			439			220
Gain (loss) on sale of property and equipment		(180	)		-		1			(56	)		-
Other		48			3		37			20			59
Total non-interest income		2,398			2,417		1,473			2,913			2,683
Non-interest expense:
Compensation and benefits		8,033			7,591		7,573			7,330			7,313
Occupancy and equipment		1,741			1,991		2,111			2,004			1,935
Data processing		1,176			1,105		1,465			1,116			1,341
Federal deposit insurance premiums		347			381		417			399			471
Marketing		266			587		230			257			214
Professional and outside services		1,221			1,169		906			945			1,115
Technology		516			508		521			549			545
Other		1,557			1,436		1,558			1,497			1,852
Total non-interest expense		14,857			14,768		14,781			14,097			14,786
Income before income taxes		2,457			2,665		1,818			3,560			2,116
Income tax expenses (benefit)		364			423		(166	)		63			(35	)
Net income	$	2,093		$	2,242	$	1,984		$	3,497		$	2,151

Earnings per common share:
Basic	$	0.49		$	0.52	$	0.46		$	0.82		$	0.50
Diluted	$	0.48		$	0.52	$	0.46		$	0.81		$	0.50

Consolidated Statements of Income (cont'd)

	Six Months Ended
(Dollars in thousands, except per share data)	6/30/2026			6/30/2025
Interest income:
Loans	$	40,339		$	39,595
Securities & short-term investments		5,447			5,416
Total interest income		45,786			45,011
Interest expense:
Deposits		14,118			15,825
Borrowings		1,417			1,928
Total interest expense		15,535			17,753
Net interest income		30,251			27,258
Provision for (benefit from) credit losses		319			180
Net interest income after provision for credit losses		29,932			27,078
Non-interest income:
Fees and service charges		2,626			2,439
Wealth management operations		1,409			1,315
Gain on tax credit investment		—			67
Gain on sale of loans held-for-sale, net		485			608
Bank owned life insurance		424			418
Gain (loss) on sale of property and equipment		(180	)		-
Other		51			65
Total non-interest income		4,815			4,912
Non-interest expense:
Compensation and benefits		15,624			14,685
Occupancy and equipment		3,732			4,046
Data processing		2,281			2,380
Federal deposit insurance premiums		728			904
Marketing		853			300
Professional and outside services		2,390			2,375
Technology		1,024			999
Other		2,993			3,569
Total non-interest expense		29,625			29,258
Income before income taxes		5,122			2,732
Income tax expenses		787			126
Net income	$	4,335		$	2,606

Earnings per common share:
Basic	$	1.01		$	0.61
Diluted	$	1.00		$	0.61

Loans

	As of
(Dollars in thousands)	6/30/2026			3/31/2026			12/31/2025			9/30/2025		6/30/2025			6/30/2026 vs 3/31/2026					6/30/2026 vs 6/30/2025
Residential real estate	$	455,882		$	445,097		$	442,443		$	450,007	$	457,248		$	10,785		2.4	%	$	(1,366	)	(0.3	)%
Home equity		55,601			53,855			53,497			51,813		51,112			1,746		3.2	%		4,489		8.8	%
Commercial real estate		597,364			564,613			555,594			564,558		551,091			32,751		5.8	%		46,273		8.4	%
Construction and land development		77,710			76,582			77,208			79,678		74,795			1,128		1.5	%		2,915		3.9	%
Multifamily		180,148			185,824			183,902			192,698		200,440			(5,676	)	(3.1	)%		(20,292	)	(10.1	)%
Commercial business		103,281			94,160			99,304			96,192		105,636			9,121		9.7	%		(2,355	)	(2.2	)%
Consumer		2,036			310			870			348		2,347			1,726		556.8	%		(311	)	(13.3	)%
Manufactured homes		22,050			22,981			23,708			24,372		25,146			(931	)	(4.1	)%		(3,096	)	(12.3	)%
Government		9,818			9,998			12,298			12,298		14,628			(180	)	(1.8	)%		(4,810	)	(32.9	)%
Loans receivable		1,503,890			1,453,420			1,448,824			1,471,964		1,482,443			50,470		3.5	%		21,447		1.4	%
Net deferred loan origination costs		1,006			1,723			1,606			1,719		2,012			(717	)	(41.6	)%		(1,006	)	(50.0	)%
Loan clearing funds		(1,103	)		(25	)		(43	)		91		(177	)		(1,078	)	4312.0	%		(926	)	523.2	%
Loans receivable, net	$	1,503,793		$	1,455,118		$	1,450,387		$	1,473,774	$	1,484,278		$	48,675		3.3	%	$	19,515		1.3	%

Deposits

	As of
(Dollars in thousands)	6/30/2026		3/31/2026		12/31/2025		9/30/2025		6/30/2025		6/30/2026 vs 3/31/2026					6/30/2026 vs 6/30/2025
Checking	$	584,901	$	587,575	$	592,214	$	579,760	$	593,471	$	(2,674	)	(0.5	)%	$	(8,570	)	(1.4	)%
Savings		247,054		253,408		254,055		257,058		266,070		(6,354	)	(2.5	)%		(19,016	)	(7.1	)%
Money market		403,140		389,274		381,111		377,155		352,616		13,866		3.6	%		50,524		14.3	%
Certificates of deposit		497,449		488,814		499,591		536,673		542,693		8,635		1.8	%		(45,244	)	(8.3	)%
Total deposits	$	1,732,544	$	1,719,071	$	1,726,971	$	1,750,646	$	1,754,850	$	13,473		0.8	%	$	(22,306	)	(1.3	)%

Asset Quality

	As of and for the Quarter Ended
(Dollars in thousands)	6/30/2026		3/31/2026		12/31/2025		9/30/2025		6/30/2025
Non-accruing loans	$	16,549	$	12,371	$	11,162	$	13,892	$	13,526
Accruing loans delinquent more than 90 days		-		-		-		-		145
Securities in non-accrual		1,909		1,891		1,882		1,616		1,616
Foreclosed real estate		-		89		89		-		-
Total nonperforming assets	$	18,458	$	14,351	$	13,133	$	15,508	$	15,287

Allowance for credit losses (ACL):
ACL specific allowances for collateral dependent loans	$	147	$	-	$	263	$	912	$	570
ACL general allowances for loan portfolio		17,547		17,285		17,243		17,065		17,614
Total ACL	$	17,694	$	17,285	$	17,506	$	17,977	$	18,184

Allowance for Credit Losses


	As of and for the Quarter Ended
(Dollars in thousands)	6/30/2026		3/31/2026			12/31/2025			9/30/2025			6/30/2025
Beginning allowance for credit losses	$	17,285	$	17,506		$	17,977		$	18,184		$	17,955
Provision for (benefit from) loan losses		378		(224	)		(170	)		61			(185	)
Net (charge-offs) recoveries		31		3			(301	)		(268	)		414
Ending allowance for credit losses	$	17,694	$	17,285		$	17,506		$	17,977		$	18,184

Bank-Level Regulatory Capital Requirements

	June 30, 2026
	Actual⁽¹⁾				Minimum Required For Capital Adequacy Purposes					Minimum Required To Be Well Capitalized Under Prompt Corrective Action Regulations
(Dollars in thousands)	Amount		Ratio		Amount		Ratio			Amount		Ratio
Common equity tier 1 capital to risk-weighted assets	$	189,965	11.81	%	$	72,385		4.50	%	$	104,557	6.50	%
Tier 1 capital to risk-weighted assets	$	189,965	11.81	%	$	96,514		6.00	%	$	128,685	8.00	%
Total capital to risk-weighted assets	$	209,575	13.03	%	$	128,685		8.00	%	$	160,856	10.00	%
Tier 1 leverage ratio	$	189,965	9.31	%	$	81,581		4.00	%	$	101,976	5.00	%
(1) Current quarter ratios are estimated.

Reconciliation of Non-GAAP Performance Measures

	Quarter Ended
(Dollars in thousands, except per share amounts)	6/30/2026			3/31/2026			12/31/2025			9/30/2025			6/30/2025
Tangible Common Ratios
Stockholder's equity (GAAP)	$	178,287		$	172,400		$	174,663		$	165,495		$	154,253
Less: Goodwill (GAAP)		(22,395	)		(22,395	)		(22,395	)		(22,395	)		(22,395	)
Less: Other intangibles (GAAP)		(984	)		(1,076	)		(1,172	)