Finward Bancorp reported a significant decline in net income for the first quarter of 2025, posting $455,000, or $0.11 per diluted share, compared to $9.3 million, or $2.18 per diluted share, in the same period last year. This 95.1% decrease is primarily attributed to a one-time pre-tax gain of $11.8 million from a sale-leaseback transaction recorded in the first quarter of 2024. The company's return on average assets (ROA) fell to 0.09% from 1.77%, while the return on average equity (ROE) decreased to 1.17% from 24.97%.
Total assets for Finward Bancorp decreased by $21 million, or 1.0%, to $2.04 billion as of March 31, 2025. The decline in assets was driven by a reduction in interest-earning assets, which fell by $18 million, or 0.9%. Net loans receivable also decreased to $1.49 billion from $1.51 billion at the end of 2024. The loan portfolio remains the largest asset for the company, with commercial real estate loans comprising 37.2% of the total loan portfolio, up from 36.6% in the previous quarter.
In terms of operational metrics, total deposits decreased by $10.2 million, or 0.6%, to $1.75 billion, with non-interest-bearing deposits increasing to 16.1% of total deposits. The company’s allowance for credit losses rose to $17.96 million, representing 1.20% of total loans, compared to 1.12% at the end of 2024. The increase in the allowance reflects management's proactive approach to potential credit risks amid changing economic conditions.
Looking ahead, Finward Bancorp is focused on enhancing its compliance with regulatory requirements, particularly in relation to the Bank Secrecy Act, following a consent order issued in November 2023. The company is implementing corrective actions to strengthen its compliance framework, which may incur additional non-interest expenses but is not expected to materially impact its financial condition. The management remains optimistic about navigating the current market conditions and is committed to maintaining a strong liquidity position, with available liquidity of approximately $696 million as of March 31, 2025.
About Finward Bancorp
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