Third Quarter 2026
Filed Oct 27, 2026Net income was $ 1,361 (Dollars in thousands), or $ 0.31 per diluted share, for the quarter ended September 30, 2026, versus $ 2,093 (Dollars in thousands), or $ 0.48 per diluted share, for the quarter ended June 30, 2026.
Net interest income and net interest margin increased sequentially, deposits grew and borrowings declined, but merger-related compensation, benefits, and professional-service costs drove higher non-interest expense and lower net income, return metrics, tangible book value, and capital ratios.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total interest income, quarter ended September 30, 2026GAAP | $24.02M | – | – |
| Total interest expense, quarter ended September 30, 2026GAAP | $8.07M | – | – |
| Net interest income, quarter ended September 30, 2026GAAP | $15.94M | – | – |
| Provision for credit losses, quarter ended September 30, 2026GAAP | $124K | – | – |
| Net interest income after provision for credit losses, quarter ended September 30, 2026GAAP | $15.82M | – | – |
| Total non-interest income, quarter ended September 30, 2026GAAP | $2.65M | – | – |
| Total revenue, quarter ended September 30, 2026other | $18.60M | – | – |
| Total non-interest expense, quarter ended September 30, 2026GAAP | $16.98M | – | – |
| Income before income taxes, quarter ended September 30, 2026GAAP | $1.49M | – | – |
| Net income, quarter ended September 30, 2026GAAP | $1.36M | – | – |
| Basic earnings per share, quarter ended September 30, 2026GAAP | $ 0.32 | – | – |
| Diluted earnings per share, quarter ended September 30, 2026GAAP | $ 0.31 | – | – |
| Net interest margin, quarter ended September 30, 2026GAAP | 3.39% | – | – |
| Net interest margin, tax-equivalent, quarter ended September 30, 2026non-GAAP | 3.51% | – | – |
| Efficiency ratio, quarter ended September 30, 2026non-GAAP | 91.32% | – | – |
| Return on assets, quarter ended September 30, 2026GAAP | 0.27% | – | – |
| Return on equity, quarter ended September 30, 2026GAAP | 3.10% | – | – |
| Net income, nine months ended September 30, 2026GAAP | $5.70M | – | – |
| Total interest income, nine months ended September 30, 2026GAAP | $69.80M | – | – |
| Net interest income, nine months ended September 30, 2026GAAP | $46.19M | – | – |
| Total non-interest income, nine months ended September 30, 2026GAAP | $7.47M | – | – |
| Total non-interest expense, nine months ended September 30, 2026GAAP | $46.61M | – | – |
| Diluted earnings per share, nine months ended September 30, 2026GAAP | $ 1.32 | – | – |
| Total assets, September 30, 2026GAAP | $2.01B | – | – |
| Total deposits, September 30, 2026GAAP | $1.76B | 1.5 % | 0.4 % |
| Loans receivable, net, September 30, 2026GAAP | $1.50B | (0.3) % | 1.7 % |
| Total stockholders' equity, September 30, 2026GAAP | $157.8M | – | – |
| Tangible common equity, September 30, 2026non-GAAP | $134.6M | – | – |
| Tangible common equity to tangible assets, September 30, 2026non-GAAP | 6.76 % | – | – |
| Tangible common book value per share, September 30, 2026non-GAAP | $ 31.07 | – | – |
| Non-performing loans, September 30, 2026GAAP | $16.79M | 1.4% | – |
| Non-performing loans to total loans, September 30, 2026GAAP | 1.12% | – | – |
| Allowance for credit losses, September 30, 2026GAAP | $17.54M | a decrease of $257 thousand or 1.49% | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Capital returns
- Dividends declared per common share were $ 0.12 for the quarter ended September 30, 2026.
- Dividends declared per common share were $ 0.36 for the nine months ended September 30, 2026.
What drove it
- Net interest margin increased primarily because of continued repricing and maturity of the existing loan portfolio and full-quarter loan-yield results from new loan origination strength during the second quarter.
- Non-interest income increased sequentially due to a $182 thousand gain associated with the sale of one branch location.
- Total deposits increased by $25.9 million, or 1.5%, from June 30, 2026, primarily related to cyclical flows and continued adjustments to deposit pricing.
- Borrowings, federal funds purchased and repurchase agreements decreased by $ 35.5 million or 37.2% from June 30, 2026, primarily due to a reduction in FHLB advances resulting from deposit balance strength.
- The quarter included $1. 8 million of one-time compensation and benefits adjustments and $536 thousand of professional and outside services expenses associated with the pending merger.
Concerns
- Net income declined to $ 1,361 (Dollars in thousands) from $ 2,093 (Dollars in thousands) in the prior quarter and $ 3,497 (Dollars in thousands) in the prior-year quarter.
- Total non-interest expense increased to $ 16,983 (Dollars in thousands) from $ 14,857 (Dollars in thousands) in the prior quarter.
- Accumulated other comprehensive loss was $ (63,520) (Dollars in thousands) at September 30, 2026, compared with $ (41,532) (Dollars in thousands) at June 30, 2026.
- Non-performing loans increased to $ 16,788 (Dollars in thousands), and the allowance for credit losses to non-performing loans declined to 104.49% from 106.92% in the prior quarter.
- Tangible common equity to tangible assets declined to 6.76 % from 7.68 %, while tangible common book value per share declined to $ 31.07 from $ 35.75.
What to watch
- Closing progress and costs associated with the pending merger with First Financial.
- Whether loan repricing, loan origination yields, and deposit pricing sustain the 3.39% net interest margin.
- Future credit performance following the increase in non-performing loans and net loan charge-offs of $240 thousand.
- Securities fair-value movements, which reduced securities available-for-sale balances and increased accumulated other comprehensive loss.
- Deposit retention and the pace of FHLB advance reduction.
Balance sheet and cash flow
- Total cash and cash equivalents were $ 92,659 (Dollars in thousands) at September 30, 2026, compared to $ 94,642 (Dollars in thousands) at June 30, 2026.
- Borrowed funds were $ 35,000 (Dollars in thousands) at September 30, 2026, compared to $ 65,000 (Dollars in thousands) at June 30, 2026.
- Federal funds purchased and repurchase agreements were $ 24,849 (Dollars in thousands) at September 30, 2026, compared to $ 30,301 (Dollars in thousands) at June 30, 2026.
- Available liquidity was $623 million as of September 30, 2026, including borrowing capacity from the FHLB and Federal Reserve facilities.
- Securities available-for-sale were $ 279,869 (Dollars in thousands) at September 30, 2026, compared to $ 310,198 (Dollars in thousands) at June 30, 2026.
Analysis
Finward reported lower third-quarter profitability as merger-related costs outweighed improved core spread income. Net income was $ 1,361 (Dollars in thousands), compared with $ 2,093 (Dollars in thousands) in the preceding quarter and $ 3,497 (Dollars in thousands) in the prior-year quarter. Diluted earnings per share were $ 0.31, down from $ 0.48 sequentially and $ 0.81 a year earlier. Return on assets fell to 0.27% from 0.42% in the prior quarter, while return on equity declined to 3.10% from 4.74%.
Core interest earnings improved. Net interest income rose to $ 15,942 (Dollars in thousands) from $ 15,180 (Dollars in thousands) in the second quarter, as net interest margin increased to 3.39% from 3.25%. The tax-equivalent margin increased to 3.51% from 3.37%. Management attributed the improvement to continued repricing and maturity of the loan portfolio and a full-quarter contribution from second-quarter loan originations. Loan yield rose to 5.73% from 5.55%, while the cost of interest-bearing deposits increased to 2.04% from 1.98%.
Expenses were the main earnings pressure. Total non-interest expense rose to $ 16,983 (Dollars in thousands) from $ 14,857 (Dollars in thousands) in the prior quarter, and the non-GAAP efficiency ratio increased to 91.32% from 84.52%. The release attributed the increase principally to $1. 8 million of one-time compensation and benefits adjustments and $536 thousand of professional and outside services expenses related to the pending merger. Non-interest income improved to $ 2,655 (Dollars in thousands), aided by a $182 thousand gain on the sale of a branch location.
Funding strengthened during the quarter. Total deposits were $ 1,758,457 (Dollars in thousands), up $ 25,913 (Dollars in thousands), or 1.5 %, from June 30, 2026. Borrowed funds declined to $ 35,000 (Dollars in thousands) from $ 65,000 (Dollars in thousands), and federal funds purchased and repurchase agreements declined to $ 24,849 (Dollars in thousands) from $ 30,301 (Dollars in thousands). The company reported $623 million of available liquidity. Loan balances were broadly stable sequentially, with loans receivable, net at $ 1,499,222 (Dollars in thousands).
Asset quality remained a focal point. Non-performing loans increased to $ 16,788 (Dollars in thousands) from $ 16,549 (Dollars in thousands), and the non-performing loan ratio increased to 1.12% from 1.10%. Net loan charge-offs were $240 thousand, compared with net loan recoveries of $31 thousand in the preceding quarter. Securities available-for-sale declined to $ 279,869 (Dollars in thousands) from $ 310,198 (Dollars in thousands), primarily due to a larger negative fair-value adjustment. Accumulated other comprehensive loss increased to $ (63,520) (Dollars in thousands), contributing to declines in total stockholders' equity, tangible common equity to tangible assets, and tangible common book value per share. The release provided no forward financial guidance.
Management, verbatim
The third quarter was impacted by merger-related expenses related to our pending merger with First Financial, announced earlier in the quarter. The quarter included additional expenses in the areas of compensation and benefits, and third-party costs associated with the merger.
Benjamin Bochnowski, Chief Executive Officer
Credit quality remained stable, as did our core banking business and customer base.
Benjamin Bochnowski, Chief Executive Officer
We continue to make progress toward closing our merger with First Financial, and we believe the combination of our companies will have benefits for our shareholders, customers, communities, and employees.
Benjamin Bochnowski, Chief Executive Officer
Not in the filing
stated, not guessed- Forward financial guidance
- Prior outlook for comparison
- Gross margin
- GAAP or non-GAAP operating income line item
- Operating cash flow
- Free cash flow
- Share repurchases
- Cash flow statement
- Explicit revenue guidance
- Explicit expense guidance
- Explicit tax-rate guidance
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.