Finward Bancorp · NASDAQ:FNWD
Finward Bancorp — Investor Presentation (November 2021)
33 slides from Finward Bancorp's investor presentation, Nov 29, 2021
Slide 1: Investor Presentation
Investor Presentation Monday, November 29, 2021
Slide 2: Finward Bancorp – A NASDAQ Traded Company
Finward Bancorp November 29, 2021 A NASDAQ Traded Company – Symbol FNWD 2
Slide 3: Additional Information for Shareholders
Additional Information for Shareholders 2 November 29, 2021 Additional Information for ShareholdersIn connection with the proposed merger with RYFL, Finward has filed with the SEC a Registration Statement on Form S-4 that includes a Joint Proxy Statement of RYFL and Finward, as well as a Prospectus
Slide 4: Forward-Looking Statements
Forward-Looking Statements 2 Forward-Looking StatementsThis presentation may contain forward-looking statements regarding the financial performance, business prospects, growth and operating strategies of Finward Bancorp (“FNWD”). For these statements, FNWD claims the protections of the safe harbor f
Slide 5: Overview of Finward Bancorp
Overview of Finward Bancorp Non-GAAP calculation, see Pages 29, 30 & 31.Core net income, adjusted for realized gain on sale of securities, amortization of intangibles and nonrecurring items. Company Overview Branch Map Primary Business Segments Financial Highlights 110-year old bank headquartered in
Slide 6: Investment Rationale
Investment Rationale Non-GAAP calculation, see Pages 29 & 30.Per March 2021 proxy statement. Beneficial ownership includes shares of restricted stock. Experienced Management Team Dynamic, enthusiastic management team with significant experience in Chicago area markets led by a highly accomplished Bo
Slide 7: Corporate History
Corporate History $693 $737 $808 $914 $927 $950 $1,149 $1,496 $1,610 $38 $57 $146 $179 $533 Note: Total assets as of December 31 for each period and September 30 for Q3 2021. 2014Completed acquisition of First Federal Savings & LoanBen Bochnowski named a DirectorCelebrated 30 years of being a public
Slide 8: Executive Management Team
Executive Management Team Officer Years of Banking Experience Year Started at Finward Bancorp Position with Company Benjamin J. Bochnowski 11 2010 President & Chief Executive Officer Robert T. Lowry 36 1985 Executive VP & Chief Operating Officer Todd M. Scheub 26 1996 Executive VP & Chief Banking Of
Slide 9: Diverse Board of Directors
Diverse Board of Directors Board Member Age Year Joined Board David A. BochnowskiExecutive Chairman 76 1977 Board Member Age Year Joined Board Benjamin J. BochnowskiPresident & CEO 41 2014 Donald P. Fesko 49 2005 Edward J. Furticella 74 2000 Danette Garza 67 2013 Joel Gorelick 74 2000 Board Member A
Slide 10: Dynamic & Attractive Operating Market
Dynamic & Attractive Operating Market $811.5 $475.7 $299.1 $232.2 $190.0 $187.3 $186.8 $163.6 $137.2 $100.4 New York Los Angeles Chicago Miami Dallas Washington, D.C. Philadelphia Houston Atlanta Phoenix $109.2 $86.5 $79.8 $76.8 $75.7 $75.4 $75.3 $71.1$69.0$62.6 Washington, D.C. New York Los Angeles
Slide 11: Disciplined and Experienced Acquiror
Disciplined and Experienced Acquiror Transaction Date Closed April 2014 Closed July 2015 Closed July 2018 Closed January 2019 Announced July 2021 Transaction Value (1) (1) $16M $34M $53M Assets ($M)(2) $38M $57M $146M $179M $533M As a % of FNWD Assets 5% 7% 15% 16% 33% Loans ($M)(2) $29M $28M $95M $
Slide 12: Acquisition of Royal Financial, Inc. (RYFL)
Acquisition of Royal Financial, Inc. (RYFL) Source: S&P Global Market Intelligence.Loan yield based on bank-level regulatory data and deposit cost based on BHC-GAAP data.Asset quality data based on bank-level regulatory data. Company OverviewRoyal Financial, Inc. has provided banking and financial s
Slide 13: Driving Service Excellence
Driving Service Excellence Relationships Transitioning from customers and features to relationships and solutionsDeepen ExpandMarkets Drive Efficiency Focus on what clients need to thriveBroaden product/service offerings Reduce complexityReduce cycle timeImprove sales growth Grow into new markets or
Slide 14: Well-Balanced, Growing Loan Portfolio
4.79% 4.35% 4.37% 4.37% 4.37% 4.61% 4.85% 4.47% 4.17% 32.6% 28.3% 13.2% Construction & Land Development 11.6% MultifamilyHome Equity Manufactured Homes Other $438 $459 $544 $584 $620 $670 $818 $898 $67 $28 $95 $88 $33$923 2013 2014 2015 2019 2020 Q3 2021 Organic Loans PPP Loans Acquired Loans Well-B
Slide 15: COVID-19 Impacts: Credit Modifications / Deferrals
$ in Millions Residential Real Estate Manufactured Homes Commercial Business Multifamily COVID-19 Impacts $1.4 0.2% Credit Modifications / Deferrals 15 Prudently helping borrowers unable to meet contractual payment obligations due to COVID-19 Consistent with regulatory guidance, consider deferrals/m
Slide 16: Conservative Approach to Credit
0.39% 0.35% 0.09% 0.23% 0.12% 0.18% 0.03% (0.00%) 2016 2017 Commercial Non-Accrual Non-Accrual TruPS Other NPAs Conservative Approach to Credit NPAs / Assets(1) $ in Millions $ in Millions Credit Philosophy Credit Underwriting and Administration Experienced banking team with deep knowledge of the Ch
Slide 17: Stable and Growing Core Deposit Franchise
0.20% 0.20% 0.22% 0.24% 0.27% 0.45% 0.75% 0.43% 0.47% 0.37% 0.34% 0.40% 0.44% 0.70% 0.59% 0.31%0.16% 2013 2014 2015 2016 2017 2018 2019 2020 Q3 2021YTD 20.4% 22.4% 20.2% 18.1% 8.7% 10.1% Noninterest Bearing Checking Interest Bearing Checking Savings Money Market Retail Time <$100K Jumbo Time >$100K
Slide 18: Profitability
9.6% 9.5% 9.8% 10.0% 9.9% 10.9% 10.6% 10.4% 9.9% 0.97% 0.90% 0.92% 0.93% 0.95% 0.96% 0.91% 0.94% 0.88% 2013 2014 2015 2016 2017 2018 2019 2020 Q3 2021 2013 2014 2015 2016 2017YTDSource: S&P Global Market Intelligence & Company Documents.Core net income, adjusted for realized gain on sale of securiti
Slide 19: High Quality, Recurring Revenues
74.8%Net InterestIncome$36.1 Million 25.2%NoninterestIncome$12.1 Million 0.78% 0.80% 0.84% 0.86% 0.85% 0.91% 0.83% 1.27% 1.02% 3.98% 3.81% 3.82% 3.85% 3.84% 3.81% 3.73% 3.64% 3.49% 2013 2014 2015 2016 2017 2018 2019 2020 Q3 2021YTD NII / Avg. Assets NIM (FTE) $29.8 $31.4 $34.2 $37.7 $38.5 $43.5 $53.
Slide 20: Diversified Sources of Fee Income
$88 $141 $190 $145 $153 $221 $249 $263 $304 $180 $134 $91 $174 $170 $77 $83 $78 $69 2013 2014 2015 2016 2017 2018 2019 2020 Q3 2021 $5.4 $6.1 $6.9 $7.6 $7.8 $9.1 $10.7 $18.1 $12.1 2013 2014 2015 2016Source: S&P Global Market Intelligence & Company Documents. 2017 2018 2019 2020 Q3 2021YTD Gain on Sa
Slide 21: Focused Expense Management
$ in Millions $4.3 $4.2 $4.1 $4.5 $4.5 $4.4 $5.0 $5.4 $6.0 2.9% 2.8% 2.9% 2.8% 2.8% 3.0% 2.9% 3.0% 2.8% $19.8 $21.3 $23.5 $25.2 $25.9 $29.9 $36.9 $33.8 68.0% 69.0% 70.0% 68.5% 68.7% 70.7% 69.7% 69.0% 71.8% Core Noninterest Expense Core Efficiency Ratio$42.6 Focused Expense Management $ in Millions C
Slide 22: Robust Capital Levels
160% 165% 206% 191% 214% 247% 251% 232% 239% 29% 33% 50% 43% 53% 64% 73% 68% 300% 100%75% 2013 2014 2015 2016 2017 2018 2019 2020 Q3 2021 CRE / Total Capital(2) C&D / Total Capital (2) CRE Test C&D Test 15.6% 14.8% 13.5% 14.3% 14.0% 12.6% 12.7% 14.0% 14.4% 2013 2014 2015 2016 2017 2018 2019 2020 Q3
Slide 23: Reliable Stewards of Capital
$0.85 $0.97 $1.06 $1.11 $1.15 $1.19 $1.23 $1.24 $0.93 34.0% 37.3% 38.5% 34.7% 36.7% 37.5% 36.5% 26.9% 27.7% 2013 2014 2015 2016 2017 2018 2019 2020 Q3 2021YTD Dividend Per Share Dividend Payout (%) $23.50 $26.18 $27.30 $28.28 $31.03 $29.67 $33.99 $39.41 $39.69 Reliable Stewards of Capital Tangible B
Slide 24: Recap of Franchise Highlights
Recap of Franchise Highlights ✓ Experienced and Invested LeadershipDynamic team with significant experience in Chicago area marketsInterests aligned with shareholders through substantial ownership ✓ Track Record of Exceptional Growth and ProfitabilityProducing long-term earnings growth in excess of
Slide 25: Thank You
THANK YOU IBA
Slide 26: Appendix
APPENDIX D> FINWARD BANCORP
Slide 27: Board of Directors
Board of Directors 28 Board Member Age Year Joined Board Experience David A. BochnowskiChairman 76 1977 Executive Chairman since 2016 and previously CEO of the Company for 35 yearsHonored by Indiana Bankers Association as a Leader in Banking Excellence and former Chairman of America’s Community Bank
Slide 28: Well-Positioned Securities Portfolio
60.3% 37.4% 2.0% 0.2% 0.1% Municipal Mortgage Backed U.S. Government Sponsored Collateralized Debt Obligations U.S. Treasury Securities $195.6 $220.1 $233.4 $233.6 $244.5 $241.8 $277.2 $410.7 $531.0 2.73% 2.72% 2.66% 2.54% 2.66% 2.85% 2.66% 2.05% 1.97% 2013 2014 2015 2016 2017 2018 2019 2020 Q3 2021
Slide 29: Balance Sheet & Capital
Balance Sheet & Capital Total Assets $927,259 $1,096,158 $1,328,161 $1,496,292 $1,609,924 29 Loans, Net 612,729 756,438 897,228 952,688 942,578 Total Deposits 793,004 929,786 1,154,370 1,302,339 1,406,200 Tangible Common Equity(1) 88,844 89,872 117,319 136,461 138,086 TBV Per Share(1) $31.03 $29.67
Slide 30: Core Return on Average Assets Reconciliation
Core: Return on average assets 0.97% 0.90% 0.92% 0.93% 0.95% 0.96% 0.91% 0.94% 0.88% ($ in thousands) 2013 2014 2015 2016 2017 2018 2019 2020 September 30,2021 YTD Net interest income $ 24,427 $ 25,363 $ 27,370 $ 30,054 $ 30,766 $ 34,359 $ 43,158 $ 45,881 $ 36,118 Non-interest income 5,359 6,074 6,8
Slide 31: Tangible Common Equity Reconciliation
2013 2014 2015 2016 2017 2018 2019 2020 2021 YTD Total assets $ 693,453 $ 775,044 $ 864,893 $ 913,626 $ 927,259 $ 1,096,158 $ 1,328,161 $ 1,496,292 $ 1,609,924 Goodwill — (1,611) (2,561) (2,792) (2,792) (8,170) (11,109) (11,109) (11,109) Other intangibles — (84) (523) (494) (424) (3,422) (5,114) (4,
Slide 32: Non-Performing Assets Reconciliation
($ in thousands) 2013 2014 2015 2016 2017 2018 2019 2020 September 30,2021 YTD Non-accruing loans $ 3,780 $ 4,599 $ 5,201 $ 5,605 $ 4,996 $ 6,595 $ 6,507 $ 13,799 $ 11,027 Accruing loans > 90 days delinquent 174 941 377 500 227 321 866 566 2,516 Non-accrual TruPS 1,252 1,611 1,912 1,689 2,299 2,050
Slide 33: Core Revenue and Non-Interest Expense Reconciliation
($ in thousands) 2013 2014 2015 2016 2017 2018 2019 2020 September 30,2021 YTD Net interest income $ 24,427 $ 25,363 $ 27,370 $ 30,054 $ 30,766 $ 34,359 $ 43,158 $ 45,881 $ 36,118 Non-interest income 5,359 6,074 6,850 7,613 7,752 9,099 10,670 18,148 12,139 Reported: Revenue 29,786 31,437 34,220 37,6
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