Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Norwood Financial Corp Announces First Quarter 2023 Earnings By: Norwood Financial Corp via GlobeNewswire April 21, 2023 at 16:30 PM EDT HONESDALE, Pa., April 21, 2023 (GLOBE NEWSWIRE) -- James O. Donnelly, President and Chief Executive Officer of Norwood Financial Corp (Nasdaq Global Market – NWFL) and its subsidiary, Wayne Bank, announced net income of $5,782,000 for the three months ended March 31, 2023, a decrease of $1,346,000, from net income of $7,128,000 for the three months ended March 31, 2022. The decrease was due primarily to a $1,426,000 decrease in other income. Earnings per share on a fully diluted basis were $0.71 for the three-month period ended March 31, 2023, compared to $0.87 in the three-month period ended March 31, 2022. The annualized return on average assets was 1.13% in the first quarter of 2023 and the annualized return on average equity was 13.61%, compared to 1.39% and 14.22%, respectively, in the first quarter of 2022. Total assets were $2.104 billion as of March 31, 2023, an increase of $26.7 million, compared to March 31, 2022. As of March 31, 2023, loans totaled $1.536 billion, with deposits of $1.756 billion and stockholders’ equity of $176.4 million. Net interest income on a fully taxable equivalent basis (fte), was $16,275,000 during the three months ended March 31, 2023, compared to $16,283,000 in the comparable three-month period of 2022. During the three-months ended March 31, 2023, the fte yield on interest-earning assets increased 80 basis points compared to the three months ended March 31, 2022, while the cost of funds increased 119 basis points. As a result, the annualized net interest spread (fte) decreased to 2.83% from 3.22% in the quarter ended March 31, 2023 compared to the corresponding three-month period in 2022. Total other income was $1,912,000 for the three months ended March 31, 2023, compared to $3,338,000 during the corresponding period of last year. The decrease in other income includes $875,000 of income recognized in 2022 on previously acquired purchased impaired loans that were carried at a discount, and a $427,000 gain recorded in 2022 on the sale of a property carried in foreclosed real estate owned. All other categories of other income decreased $124,000, net. Operating expenses totaled $10,436,000 in the three months ended March 31, 2023, and were $279,000, or 2.7%, higher than the $10,157,000 recorded in the same three-month period of last year. Additionally, effective January 1, 2023, the Company adopted Accounting Standards Update 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, referred to as the current expected credit loss model (“CECL”). This accounting standard requires that credit losses for financial assets and off-balance sheet credit exposures be measured based on expected credit losses, rather than on incurred credit losses as in prior periods. As a result of the adoption of CECL, the allowance for credit losses was increased by $2,216,000, and retained earnings was decreased by $1,751,000, net of tax. The Company also recorded an off-balance sheet reserve for unfunded commitments of $329,000, with a corresponding decrease to retained earnings of $260,000, net of tax. Mr. Donnelly stated, “Our first quarter income decreased from the 2022 level due to one-time gains recognized in 2022 and the rising cost of deposits and borrowed funds. Loan growth was 16.7% annually during the quarter, while total deposits increased 6.6% annually during the first quarter of 2023. Our core operating expenses remain well-controlled, and our capital base remains above “Well-Capitalized” targets. Additionally, our credit quality metrics remained strong during the first quarter, which we believe should benefit future performance. We appreciate the opportunity to serve our Wayne Bank customers and our customers at the Bank of the Finger Lakes and Bank of Cooperstown locations. We continue to look for opportunities available to us as we service our growing base of stockholders and customers.” Norwood Financial Corp is the parent company of Wayne Bank, which operates from fourteen offices throughout Northeastern Pennsylvania and fifteen offices in Delaware, Sullivan, Ontario, Otsego and Yates Counties, New York. The Company’s stock trades on the Nasdaq Global Market under the symbol “NWFL”. Forward-Looking Statements. The Private Securities Litigation Reform Act of 1995 contains safe harbor provisions regarding forward-looking statements. When used in this discussion, the words “believes”, “anticipates”, “contemplates”, “expects”, “bode”, “future performance” and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from those projected. Those risks and uncertainties include changes in federal and state laws, changes in interest rates, the risks and uncertainty posed by, and the continued effect and impact of, the COVID-19 pandemic on the economy and the Company’s results of operation and financial condition, our ability to maintain strong credit quality metrics, our ability to have future performance, our ability to control core operating expenses and costs, demand for real estate, government fiscal and trade policies, cybersecurity and general economic conditions. The Company undertakes no obligation to publicly release the results of any revisions to those forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Non-GAAP Financial Measures This release references net interest income on a fully taxable-equivalent basis (fte), which is a non-GAAP (Generally Accepted Accounting Principles) financial measure. Fully taxable-equivalent net interest income was derived from GAAP interest income and net interest income using an assumed tax rate of 21%. We believe the presentation of net interest income on a fully taxable-equivalent basis ensures comparability of net interest income arising from both taxable and tax-exempt sources, and is consistent with industry practice. The following table reconciles net interest income to net interest income on a fully taxable-equivalent basis: Three months ended March 31,(dollars in thousands) 2023 2022Net interest income$16,093 $16,101Tax equivalent basis adjustment using 21% marginal tax rate 182 182Net interest income on a fully taxable equivalent basis$16,275 $16,283 This release also references average tangible equity, which is also a non-GAAP financial measure. Average tangible equity is calculated by deducting average goodwill and other intangible assets from average stockholders’ equity. The Company believes that disclosure of tangible equity ratios enhances investor understanding of our financial position and improves the comparability of our financial data. The following table reconciles average equity to average tangible equity: Three months ended March 31,(dollars in thousands) 2023 2022Average equity$172,334 $203,260 Average goodwill and other intangibles (29,559) (29,656)Average tangible equity$142,775 $173,604 Contact: William S. Lance Executive Vice President & Chief Financial Officer Norwood Financial Corp 570-253-8505 www.waynebank.com NORWOOD FINANCIAL CORPConsolidated Balance Sheets (dollars in thousands, except share and per share data)(unaudited) March 31 2023 2022 ASSETS Cash and due from banks$25,701 $22,394 Interest-bearing deposits with banks 3,314 143,632 Cash and cash equivalents 29,015 166,026 Securities available for sale 418,245 434,924 Loans receivable 1,535,643 1,371,645 Less: Allowance for credit losses 19,445 16,660 Net loans receivable 1,516,198 1,354,985 Regulatory stock, at cost 5,963 3,423 Bank premises and equipment, net 17,660 17,022 Bank owned life insurance 45,577 40,215 Foreclosed real estate owned 346 590 Accrued interest receivable 6,633 5,876 Deferred tax assets, net 22,164 14,771 Goodwill 29,266 29,266 Other intangible assets 283 380 Other assets 13,013 10,220 TOTAL ASSETS$2,104,363 $2,077,698 LIABILITIES Deposits: Non-interest bearing demand$419,615 $438,979 Interest-bearing 1,336,320 1,342,798 Total deposits 1,755,935 1,781,777 Short-term borrowings 108,555 63,622 Other borrowings 40,189 26,844 Accrued interest payable 4,703 1,160 Other liabilities 18,566 17,489 TOTAL LIABILITIES 1,927,948 1,890,892 STOCKHOLDERS' EQUITY Preferred Stock, no par value per share, authorized 5,000,000 shares- - Common Stock, $.10 par value per share, authorized: 20,000,000 shares, issued: 2023: 8,291,401 shares, 2022: 8,268,401 shares 829 827 Surplus 95,052 96,619 Retained earnings 133,427 114,845 Treasury stock, at cost: 2023: 110,400 shares, 2022: 65,089 shares(2,930) (1,760) Accumulated other comprehensive loss (49,963) (23,725) TOTAL STOCKHOLDERS' EQUITY 176,415 186,806 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$2,104,363 $2,077,698 NORWOOD FINANCIAL CORPConsolidated Statements of Income(dollars in thousands, except per share data)(unaudited) Three Months Ended March 31, 2023 2022 INTEREST INCOME Loans receivable, including fees$19,158 $15,375 Securities 2,505 1,894 Other 48 78 Total Interest income 21,711 17,347 INTEREST EXPENSE Deposits 4,362 1,059 Short-term borrowings 779 48 Other borrowings 477 139 Total Interest expense 5,618 1,246 NET INTEREST INCOME 16,093 16,101 PROVISION FOR CREDIT LOSSES$300 300 NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 15,793 15,801 OTHER INCOME Service charges and fees 1,313 1,470 Income from fiduciary activities 212 202 Net realized gains on sales of securities 2 - Gains on sales of loans, net - - Gains on sales of foreclosed real estate owned - 427 Earnings and proceeds on life insurance policies 213 176 Other 172 1,063 Total other income 1,912 3,338 OTHER EXPENSES Salaries and employee benefits 5,969 5,431 Occupancy, furniture and equipment 1,262 1,307 Data processing and related operations 768 628 Taxes, other than income 161 294 Professional fees 285 575 FDIC Insurance assessment 200 183 Foreclosed real estate 29 53 Amortization of intangibles 23 27 Other 1,739 1,659 Total other expenses 10,436 10,157 INCOME BEFORE TAX 7,269 8,982 INCOME TAX EXPENSE 1,487 1,854 NET INCOME$5,782 $7,128 Basic earnings per share$0.71 $0.87 Diluted earnings per share$0.71 $0.87 NORWOOD FINANCIAL CORPFinancial Highlights (Unaudited)(dollars in thousands, except per share data) For the Three Months Ended March 31 2023 2022 Net interest income$16,093 $16,101 Net income 5,782 7,128 Net interest spread (fully taxable equivalent) 2.83% 3.22% Net interest margin (fully taxable equivalent) 3.25% 3.32% Return on average assets 1.13% 1.39% Return on average equity 13.61% 14.22% Return on average tangible equity 16.42% 16.65% Basic earnings per share$0.71 $0.87 Diluted earnings per share$0.71 $0.87 As of March 31 2023 2022 Total assets$2,104,363 $2,077,698 Total loans receivable 1,535,643 1,371,645 Allowance for credit losses 19,445 16,660 Total deposits 1,755,935 1,781,777 Stockholders' equity 176,415 186,806 Trust assets under management 187,345 190,144 Book value per share$21.92 $22.99 Tangible book value per share$18.31 $19.37 Equity to total assets 8.38% 8.99% Allowance to total loans receivable 1.27% 1.21% Nonperforming loans to total loans 0.07% 0.05% Nonperforming assets to total assets 0.06% 0.06% NORWOOD FINANCIAL CORPConsolidated Balance Sheets (unaudited)(dollars in thousands) March 31 December 31 September 30 June 30 March 31 2023 2022 2022 2022 2022ASSETS Cash and due from banks$25,701 $28,847 $23,092 $29,931 $22,394 Interest-bearing deposits with banks 3,314 3,019 17,785 79,735 143,632 Cash and cash equivalents 29,015 31,866 40,877 109,666 166,026 Securities available for sale 418,245 418,927 427,287 440,877 434,924 Loans receivable 1,535,643 1,473,945 1,432,288 1,404,317 1,371,645 Less: Allowance for credit losses 19,445 16,999 16,931 17,017 16,660 Net loans receivable 1,516,198 1,456,946 1,415,357 1,387,300 1,354,985 Regulatory stock, at cost 5,963 5,418 2,220 2,396 3,423 Bank owned life insurance 45,577 43,364 43,169 43,167 40,215 Bank premises and equipment, net 17,660 17,924 17,427 17,032 17,022 Foreclosed real estate owned 346 346 346 346 590 Goodwill and other intangibles 29,549 29,572 29,595 29,619 29,646 Other assets 41,810 42,707 42,592 35,981 30,867 TOTAL ASSETS$2,104,363 $2,047,070 $2,018,870 $2,066,384 $2,077,698 LIABILITIES Deposits: Non-interest bearing demand$419,615 $434,529 $453,560 $442,991 $438,979 Interest-bearing deposits 1,336,320 1,293,198 1,315,236 1,356,839 1,342,798 Total deposits 1,755,935 1,727,727 1,768,796 1,799,830 1,781,777 Borrowings 148,744 133,215 71,754 74,839 90,466 Other liabilities 23,269 19,043 19,471 17,884 18,649 TOTAL LIABILITIES 1,927,948 1,879,985 1,860,021 1,892,553 1,890,892 STOCKHOLDERS' EQUITY 176,415 167,085 158,849 173,831 186,806 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$2,104,363 $2,047,070 $2,018,870 $2,066,384 $2,077,698 NORWOOD FINANCIAL CORP Consolidated Statements of Income (unaudited) (dollars in thousands, except per share data) March 31 December 31 September 30June 30 March 31Three months ended 2023 2022 2022 2022 2022INTEREST INCOME Loans receivable, including fees$19,158 $17,810 $17,114 $15,714 $15,375 Securities 2,505 2,487 2,473 2,197 1,894 Other 48 98 245 182 78 Total interest income 21,711 20,395 19,832 18,093 17,347 INTEREST EXPENSE Deposits 4,362 2,772 1,557 1,083 1,059 Borrowings 1,256 391 105 116 187 Total interest expense 5,618 3,163 1,662 1,199 1,246 NET INTEREST INCOME 16,093 17,232 18,170 16,894 16,101 PROVISION FOR CREDIT LOSSES 300 300 - 300 300 NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 15,793 16,932 18,170 16,594 15,801 OTHER INCOME Service charges and fees 1,313 1,370 1,346 1,475 1,470 Income from fiduciary activities 212 210 219 214 202 Net realized gains on sales of securities 2 3 - - - Gains on sales of loans, net - 1 1 - - Gains on sales of foreclosed real estate owned - - - - 427 Earnings and proceeds on life insurance policies 213 195 267 449 176 Other 172 147 345 351 1,063 Total other income 1,912 1,926 2,178 2,489 3,338 OTHER EXPENSES Salaries and employee benefits 5,969 5,246 5,553 5,840 5,431 Occupancy, furniture and equipment, net 1,262 1,263 1,191 1,206 1,307 Foreclosed real estate 29 7 4 10 53 FDIC insurance assessment 200 144 143 142 183 Other 2,976 3,615 3,248 3,274 3,183 Total other expenses 10,436 10,275 10,139 10,472 10,157 INCOME BEFORE TAX 7,269 8,583 10,209 8,611 8,982 INCOME TAX EXPENSE 1,487 1,443 2,100 1,756 1,854 NET INCOME$5,782 $7,140 $8,109 $6,855 $7,128 Basic earnings per share$0.71 $0.88 $1.00 $0.84 $0.87 Diluted earnings per share$0.71 $0.88 $1.00 $0.84 $0.87 Book Value per share$21.92 $20.86 $19.92 $21.65 $22.99 Tangible Book Value per share 18.31 17.24 16.29 18.02 19.37 Return on average assets (annualized) 1.13% 1.40% 1.57% 1.35% 1.39%Return on average equity (annualized) 13.61% 17.40% 17.93% 15.19% 14.22%Return on average tangible equity (annualized) 16.42% 21.27% 21.48% 18.16% 16.65% Net interest spread (fte) 2.83% 3.30% 3.61% 3.40% 3.22%Net interest margin (fte) 3.25% 3.55% 3.74% 3.49% 3.32% Allowance for credit losses to total loans 1.27% 1.15% 1.18% 1.21% 1.21%Net charge-offs to average loans (annualized) 0.08% 0.06% 0.02% -0.02% 0.02%Nonperforming loans to total loans 0.07% 0.08% 0.04% 0.04% 0.05%Nonperforming assets to total assets 0.06% 0.07% 0.05% 0.05% 0.06% Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. 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Norwood Financial Corp Announces First Quarter 2023 Earnings By: Norwood Financial Corp via GlobeNewswire April 21, 2023 at 16:30 PM EDT HONESDALE, Pa., April 21, 2023 (GLOBE NEWSWIRE) -- James O. Donnelly, President and Chief Executive Officer of Norwood Financial Corp (Nasdaq Global Market – NWFL) and its subsidiary, Wayne Bank, announced net income of $5,782,000 for the three months ended March 31, 2023, a decrease of $1,346,000, from net income of $7,128,000 for the three months ended March 31, 2022. The decrease was due primarily to a $1,426,000 decrease in other income. Earnings per share on a fully diluted basis were $0.71 for the three-month period ended March 31, 2023, compared to $0.87 in the three-month period ended March 31, 2022. The annualized return on average assets was 1.13% in the first quarter of 2023 and the annualized return on average equity was 13.61%, compared to 1.39% and 14.22%, respectively, in the first quarter of 2022. Total assets were $2.104 billion as of March 31, 2023, an increase of $26.7 million, compared to March 31, 2022. As of March 31, 2023, loans totaled $1.536 billion, with deposits of $1.756 billion and stockholders’ equity of $176.4 million. Net interest income on a fully taxable equivalent basis (fte), was $16,275,000 during the three months ended March 31, 2023, compared to $16,283,000 in the comparable three-month period of 2022. During the three-months ended March 31, 2023, the fte yield on interest-earning assets increased 80 basis points compared to the three months ended March 31, 2022, while the cost of funds increased 119 basis points. As a result, the annualized net interest spread (fte) decreased to 2.83% from 3.22% in the quarter ended March 31, 2023 compared to the corresponding three-month period in 2022. Total other income was $1,912,000 for the three months ended March 31, 2023, compared to $3,338,000 during the corresponding period of last year. The decrease in other income includes $875,000 of income recognized in 2022 on previously acquired purchased impaired loans that were carried at a discount, and a $427,000 gain recorded in 2022 on the sale of a property carried in foreclosed real estate owned. All other categories of other income decreased $124,000, net. Operating expenses totaled $10,436,000 in the three months ended March 31, 2023, and were $279,000, or 2.7%, higher than the $10,157,000 recorded in the same three-month period of last year. Additionally, effective January 1, 2023, the Company adopted Accounting Standards Update 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, referred to as the current expected credit loss model (“CECL”). This accounting standard requires that credit losses for financial assets and off-balance sheet credit exposures be measured based on expected credit losses, rather than on incurred credit losses as in prior periods. As a result of the adoption of CECL, the allowance for credit losses was increased by $2,216,000, and retained earnings was decreased by $1,751,000, net of tax. The Company also recorded an off-balance sheet reserve for unfunded commitments of $329,000, with a corresponding decrease to retained earnings of $260,000, net of tax. Mr. Donnelly stated, “Our first quarter income decreased from the 2022 level due to one-time gains recognized in 2022 and the rising cost of deposits and borrowed funds. Loan growth was 16.7% annually during the quarter, while total deposits increased 6.6% annually during the first quarter of 2023. Our core operating expenses remain well-controlled, and our capital base remains above “Well-Capitalized” targets. Additionally, our credit quality metrics remained strong during the first quarter, which we believe should benefit future performance. We appreciate the opportunity to serve our Wayne Bank customers and our customers at the Bank of the Finger Lakes and Bank of Cooperstown locations. We continue to look for opportunities available to us as we service our growing base of stockholders and customers.” Norwood Financial Corp is the parent company of Wayne Bank, which operates from fourteen offices throughout Northeastern Pennsylvania and fifteen offices in Delaware, Sullivan, Ontario, Otsego and Yates Counties, New York. The Company’s stock trades on the Nasdaq Global Market under the symbol “NWFL”. Forward-Looking Statements. The Private Securities Litigation Reform Act of 1995 contains safe harbor provisions regarding forward-looking statements. When used in this discussion, the words “believes”, “anticipates”, “contemplates”, “expects”, “bode”, “future performance” and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from those projected. Those risks and uncertainties include changes in federal and state laws, changes in interest rates, the risks and uncertainty posed by, and the continued effect and impact of, the COVID-19 pandemic on the economy and the Company’s results of operation and financial condition, our ability to maintain strong credit quality metrics, our ability to have future performance, our ability to control core operating expenses and costs, demand for real estate, government fiscal and trade policies, cybersecurity and general economic conditions. The Company undertakes no obligation to publicly release the results of any revisions to those forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Non-GAAP Financial Measures This release references net interest income on a fully taxable-equivalent basis (fte), which is a non-GAAP (Generally Accepted Accounting Principles) financial measure. Fully taxable-equivalent net interest income was derived from GAAP interest income and net interest income using an assumed tax rate of 21%. We believe the presentation of net interest income on a fully taxable-equivalent basis ensures comparability of net interest income arising from both taxable and tax-exempt sources, and is consistent with industry practice. The following table reconciles net interest income to net interest income on a fully taxable-equivalent basis: Three months ended March 31,(dollars in thousands) 2023 2022Net interest income$16,093 $16,101Tax equivalent basis adjustment using 21% marginal tax rate 182 182Net interest income on a fully taxable equivalent basis$16,275 $16,283 This release also references average tangible equity, which is also a non-GAAP financial measure. Average tangible equity is calculated by deducting average goodwill and other intangible assets from average stockholders’ equity. The Company believes that disclosure of tangible equity ratios enhances investor understanding of our financial position and improves the comparability of our financial data. The following table reconciles average equity to average tangible equity: Three months ended March 31,(dollars in thousands) 2023 2022Average equity$172,334 $203,260 Average goodwill and other intangibles (29,559) (29,656)Average tangible equity$142,775 $173,604 Contact: William S. Lance Executive Vice President & Chief Financial Officer Norwood Financial Corp 570-253-8505 www.waynebank.com NORWOOD FINANCIAL CORPConsolidated Balance Sheets (dollars in thousands, except share and per share data)(unaudited) March 31 2023 2022 ASSETS Cash and due from banks$25,701 $22,394 Interest-bearing deposits with banks 3,314 143,632 Cash and cash equivalents 29,015 166,026 Securities available for sale 418,245 434,924 Loans receivable 1,535,643 1,371,645 Less: Allowance for credit losses 19,445 16,660 Net loans receivable 1,516,198 1,354,985 Regulatory stock, at cost 5,963 3,423 Bank premises and equipment, net 17,660 17,022 Bank owned life insurance 45,577 40,215 Foreclosed real estate owned 346 590 Accrued interest receivable 6,633 5,876 Deferred tax assets, net 22,164 14,771 Goodwill 29,266 29,266 Other intangible assets 283 380 Other assets 13,013 10,220 TOTAL ASSETS$2,104,363 $2,077,698 LIABILITIES Deposits: Non-interest bearing demand$419,615 $438,979 Interest-bearing 1,336,320 1,342,798 Total deposits 1,755,935 1,781,777 Short-term borrowings 108,555 63,622 Other borrowings 40,189 26,844 Accrued interest payable 4,703 1,160 Other liabilities 18,566 17,489 TOTAL LIABILITIES 1,927,948 1,890,892 STOCKHOLDERS' EQUITY Preferred Stock, no par value per share, authorized 5,000,000 shares- - Common Stock, $.10 par value per share, authorized: 20,000,000 shares, issued: 2023: 8,291,401 shares, 2022: 8,268,401 shares 829 827 Surplus 95,052 96,619 Retained earnings 133,427 114,845 Treasury stock, at cost: 2023: 110,400 shares, 2022: 65,089 shares(2,930) (1,760) Accumulated other comprehensive loss (49,963) (23,725) TOTAL STOCKHOLDERS' EQUITY 176,415 186,806 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$2,104,363 $2,077,698 NORWOOD FINANCIAL CORPConsolidated Statements of Income(dollars in thousands, except per share data)(unaudited) Three Months Ended March 31, 2023 2022 INTEREST INCOME Loans receivable, including fees$19,158 $15,375 Securities 2,505 1,894 Other 48 78 Total Interest income 21,711 17,347 INTEREST EXPENSE Deposits 4,362 1,059 Short-term borrowings 779 48 Other borrowings 477 139 Total Interest expense 5,618 1,246 NET INTEREST INCOME 16,093 16,101 PROVISION FOR CREDIT LOSSES$300 300 NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 15,793 15,801 OTHER INCOME Service charges and fees 1,313 1,470 Income from fiduciary activities 212 202 Net realized gains on sales of securities 2 - Gains on sales of loans, net - - Gains on sales of foreclosed real estate owned - 427 Earnings and proceeds on life insurance policies 213 176 Other 172 1,063 Total other income 1,912 3,338 OTHER EXPENSES Salaries and employee benefits 5,969 5,431 Occupancy, furniture and equipment 1,262 1,307 Data processing and related operations 768 628 Taxes, other than income 161 294 Professional fees 285 575 FDIC Insurance assessment 200 183 Foreclosed real estate 29 53 Amortization of intangibles 23 27 Other 1,739 1,659 Total other expenses 10,436 10,157 INCOME BEFORE TAX 7,269 8,982 INCOME TAX EXPENSE 1,487 1,854 NET INCOME$5,782 $7,128 Basic earnings per share$0.71 $0.87 Diluted earnings per share$0.71 $0.87 NORWOOD FINANCIAL CORPFinancial Highlights (Unaudited)(dollars in thousands, except per share data) For the Three Months Ended March 31 2023 2022 Net interest income$16,093 $16,101 Net income 5,782 7,128 Net interest spread (fully taxable equivalent) 2.83% 3.22% Net interest margin (fully taxable equivalent) 3.25% 3.32% Return on average assets 1.13% 1.39% Return on average equity 13.61% 14.22% Return on average tangible equity 16.42% 16.65% Basic earnings per share$0.71 $0.87 Diluted earnings per share$0.71 $0.87 As of March 31 2023 2022 Total assets$2,104,363 $2,077,698 Total loans receivable 1,535,643 1,371,645 Allowance for credit losses 19,445 16,660 Total deposits 1,755,935 1,781,777 Stockholders' equity 176,415 186,806 Trust assets under management 187,345 190,144 Book value per share$21.92 $22.99 Tangible book value per share$18.31 $19.37 Equity to total assets 8.38% 8.99% Allowance to total loans receivable 1.27% 1.21% Nonperforming loans to total loans 0.07% 0.05% Nonperforming assets to total assets 0.06% 0.06% NORWOOD FINANCIAL CORPConsolidated Balance Sheets (unaudited)(dollars in thousands) March 31 December 31 September 30 June 30 March 31 2023 2022 2022 2022 2022ASSETS Cash and due from banks$25,701 $28,847 $23,092 $29,931 $22,394 Interest-bearing deposits with banks 3,314 3,019 17,785 79,735 143,632 Cash and cash equivalents 29,015 31,866 40,877 109,666 166,026 Securities available for sale 418,245 418,927 427,287 440,877 434,924 Loans receivable 1,535,643 1,473,945 1,432,288 1,404,317 1,371,645 Less: Allowance for credit losses 19,445 16,999 16,931 17,017 16,660 Net loans receivable 1,516,198 1,456,946 1,415,357 1,387,300 1,354,985 Regulatory stock, at cost 5,963 5,418 2,220 2,396 3,423 Bank owned life insurance 45,577 43,364 43,169 43,167 40,215 Bank premises and equipment, net 17,660 17,924 17,427 17,032 17,022 Foreclosed real estate owned 346 346 346 346 590 Goodwill and other intangibles 29,549 29,572 29,595 29,619 29,646 Other assets 41,810 42,707 42,592 35,981 30,867 TOTAL ASSETS$2,104,363 $2,047,070 $2,018,870 $2,066,384 $2,077,698 LIABILITIES Deposits: Non-interest bearing demand$419,615 $434,529 $453,560 $442,991 $438,979 Interest-bearing deposits 1,336,320 1,293,198 1,315,236 1,356,839 1,342,798 Total deposits 1,755,935 1,727,727 1,768,796 1,799,830 1,781,777 Borrowings 148,744 133,215 71,754 74,839 90,466 Other liabilities 23,269 19,043 19,471 17,884 18,649 TOTAL LIABILITIES 1,927,948 1,879,985 1,860,021 1,892,553 1,890,892 STOCKHOLDERS' EQUITY 176,415 167,085 158,849 173,831 186,806 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$2,104,363 $2,047,070 $2,018,870 $2,066,384 $2,077,698 NORWOOD FINANCIAL CORP Consolidated Statements of Income (unaudited) (dollars in thousands, except per share data) March 31 December 31 September 30June 30 March 31Three months ended 2023 2022 2022 2022 2022INTEREST INCOME Loans receivable, including fees$19,158 $17,810 $17,114 $15,714 $15,375 Securities 2,505 2,487 2,473 2,197 1,894 Other 48 98 245 182 78 Total interest income 21,711 20,395 19,832 18,093 17,347 INTEREST EXPENSE Deposits 4,362 2,772 1,557 1,083 1,059 Borrowings 1,256 391 105 116 187 Total interest expense 5,618 3,163 1,662 1,199 1,246 NET INTEREST INCOME 16,093 17,232 18,170 16,894 16,101 PROVISION FOR CREDIT LOSSES 300 300 - 300 300 NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 15,793 16,932 18,170 16,594 15,801 OTHER INCOME Service charges and fees 1,313 1,370 1,346 1,475 1,470 Income from fiduciary activities 212 210 219 214 202 Net realized gains on sales of securities 2 3 - - - Gains on sales of loans, net - 1 1 - - Gains on sales of foreclosed real estate owned - - - - 427 Earnings and proceeds on life insurance policies 213 195 267 449 176 Other 172 147 345 351 1,063 Total other income 1,912 1,926 2,178 2,489 3,338 OTHER EXPENSES Salaries and employee benefits 5,969 5,246 5,553 5,840 5,431 Occupancy, furniture and equipment, net 1,262 1,263 1,191 1,206 1,307 Foreclosed real estate 29 7 4 10 53 FDIC insurance assessment 200 144 143 142 183 Other 2,976 3,615 3,248 3,274 3,183 Total other expenses 10,436 10,275 10,139 10,472 10,157 INCOME BEFORE TAX 7,269 8,583 10,209 8,611 8,982 INCOME TAX EXPENSE 1,487 1,443 2,100 1,756 1,854 NET INCOME$5,782 $7,140 $8,109 $6,855 $7,128 Basic earnings per share$0.71 $0.88 $1.00 $0.84 $0.87 Diluted earnings per share$0.71 $0.88 $1.00 $0.84 $0.87 Book Value per share$21.92 $20.86 $19.92 $21.65 $22.99 Tangible Book Value per share 18.31 17.24 16.29 18.02 19.37 Return on average assets (annualized) 1.13% 1.40% 1.57% 1.35% 1.39%Return on average equity (annualized) 13.61% 17.40% 17.93% 15.19% 14.22%Return on average tangible equity (annualized) 16.42% 21.27% 21.48% 18.16% 16.65% Net interest spread (fte) 2.83% 3.30% 3.61% 3.40% 3.22%Net interest margin (fte) 3.25% 3.55% 3.74% 3.49% 3.32% Allowance for credit losses to total loans 1.27% 1.15% 1.18% 1.21% 1.21%Net charge-offs to average loans (annualized) 0.08% 0.06% 0.02% -0.02% 0.02%Nonperforming loans to total loans 0.07% 0.08% 0.04% 0.04% 0.05%Nonperforming assets to total assets 0.06% 0.07% 0.05% 0.05% 0.06%
HONESDALE, Pa., April 21, 2023 (GLOBE NEWSWIRE) -- James O. Donnelly, President and Chief Executive Officer of Norwood Financial Corp (Nasdaq Global Market – NWFL) and its subsidiary, Wayne Bank, announced net income of $5,782,000 for the three months ended March 31, 2023, a decrease of $1,346,000, from net income of $7,128,000 for the three months ended March 31, 2022. The decrease was due primarily to a $1,426,000 decrease in other income. Earnings per share on a fully diluted basis were $0.71 for the three-month period ended March 31, 2023, compared to $0.87 in the three-month period ended March 31, 2022. The annualized return on average assets was 1.13% in the first quarter of 2023 and the annualized return on average equity was 13.61%, compared to 1.39% and 14.22%, respectively, in the first quarter of 2022. Total assets were $2.104 billion as of March 31, 2023, an increase of $26.7 million, compared to March 31, 2022. As of March 31, 2023, loans totaled $1.536 billion, with deposits of $1.756 billion and stockholders’ equity of $176.4 million. Net interest income on a fully taxable equivalent basis (fte), was $16,275,000 during the three months ended March 31, 2023, compared to $16,283,000 in the comparable three-month period of 2022. During the three-months ended March 31, 2023, the fte yield on interest-earning assets increased 80 basis points compared to the three months ended March 31, 2022, while the cost of funds increased 119 basis points. As a result, the annualized net interest spread (fte) decreased to 2.83% from 3.22% in the quarter ended March 31, 2023 compared to the corresponding three-month period in 2022. Total other income was $1,912,000 for the three months ended March 31, 2023, compared to $3,338,000 during the corresponding period of last year. The decrease in other income includes $875,000 of income recognized in 2022 on previously acquired purchased impaired loans that were carried at a discount, and a $427,000 gain recorded in 2022 on the sale of a property carried in foreclosed real estate owned. All other categories of other income decreased $124,000, net. Operating expenses totaled $10,436,000 in the three months ended March 31, 2023, and were $279,000, or 2.7%, higher than the $10,157,000 recorded in the same three-month period of last year. Additionally, effective January 1, 2023, the Company adopted Accounting Standards Update 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, referred to as the current expected credit loss model (“CECL”). This accounting standard requires that credit losses for financial assets and off-balance sheet credit exposures be measured based on expected credit losses, rather than on incurred credit losses as in prior periods. As a result of the adoption of CECL, the allowance for credit losses was increased by $2,216,000, and retained earnings was decreased by $1,751,000, net of tax. The Company also recorded an off-balance sheet reserve for unfunded commitments of $329,000, with a corresponding decrease to retained earnings of $260,000, net of tax. Mr. Donnelly stated, “Our first quarter income decreased from the 2022 level due to one-time gains recognized in 2022 and the rising cost of deposits and borrowed funds. Loan growth was 16.7% annually during the quarter, while total deposits increased 6.6% annually during the first quarter of 2023. Our core operating expenses remain well-controlled, and our capital base remains above “Well-Capitalized” targets. Additionally, our credit quality metrics remained strong during the first quarter, which we believe should benefit future performance. We appreciate the opportunity to serve our Wayne Bank customers and our customers at the Bank of the Finger Lakes and Bank of Cooperstown locations. We continue to look for opportunities available to us as we service our growing base of stockholders and customers.” Norwood Financial Corp is the parent company of Wayne Bank, which operates from fourteen offices throughout Northeastern Pennsylvania and fifteen offices in Delaware, Sullivan, Ontario, Otsego and Yates Counties, New York. The Company’s stock trades on the Nasdaq Global Market under the symbol “NWFL”. Forward-Looking Statements. The Private Securities Litigation Reform Act of 1995 contains safe harbor provisions regarding forward-looking statements. When used in this discussion, the words “believes”, “anticipates”, “contemplates”, “expects”, “bode”, “future performance” and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from those projected. Those risks and uncertainties include changes in federal and state laws, changes in interest rates, the risks and uncertainty posed by, and the continued effect and impact of, the COVID-19 pandemic on the economy and the Company’s results of operation and financial condition, our ability to maintain strong credit quality metrics, our ability to have future performance, our ability to control core operating expenses and costs, demand for real estate, government fiscal and trade policies, cybersecurity and general economic conditions. The Company undertakes no obligation to publicly release the results of any revisions to those forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Non-GAAP Financial Measures This release references net interest income on a fully taxable-equivalent basis (fte), which is a non-GAAP (Generally Accepted Accounting Principles) financial measure. Fully taxable-equivalent net interest income was derived from GAAP interest income and net interest income using an assumed tax rate of 21%. We believe the presentation of net interest income on a fully taxable-equivalent basis ensures comparability of net interest income arising from both taxable and tax-exempt sources, and is consistent with industry practice. The following table reconciles net interest income to net interest income on a fully taxable-equivalent basis: Three months ended March 31,(dollars in thousands) 2023 2022Net interest income$16,093 $16,101Tax equivalent basis adjustment using 21% marginal tax rate 182 182Net interest income on a fully taxable equivalent basis$16,275 $16,283 This release also references average tangible equity, which is also a non-GAAP financial measure. Average tangible equity is calculated by deducting average goodwill and other intangible assets from average stockholders’ equity. The Company believes that disclosure of tangible equity ratios enhances investor understanding of our financial position and improves the comparability of our financial data. The following table reconciles average equity to average tangible equity: Three months ended March 31,(dollars in thousands) 2023 2022Average equity$172,334 $203,260 Average goodwill and other intangibles (29,559) (29,656)Average tangible equity$142,775 $173,604 Contact: William S. Lance Executive Vice President & Chief Financial Officer Norwood Financial Corp 570-253-8505 www.waynebank.com NORWOOD FINANCIAL CORPConsolidated Balance Sheets (dollars in thousands, except share and per share data)(unaudited) March 31 2023 2022 ASSETS Cash and due from banks$25,701 $22,394 Interest-bearing deposits with banks 3,314 143,632 Cash and cash equivalents 29,015 166,026 Securities available for sale 418,245 434,924 Loans receivable 1,535,643 1,371,645 Less: Allowance for credit losses 19,445 16,660 Net loans receivable 1,516,198 1,354,985 Regulatory stock, at cost 5,963 3,423 Bank premises and equipment, net 17,660 17,022 Bank owned life insurance 45,577 40,215 Foreclosed real estate owned 346 590 Accrued interest receivable 6,633 5,876 Deferred tax assets, net 22,164 14,771 Goodwill 29,266 29,266 Other intangible assets 283 380 Other assets 13,013 10,220 TOTAL ASSETS$2,104,363 $2,077,698 LIABILITIES Deposits: Non-interest bearing demand$419,615 $438,979 Interest-bearing 1,336,320 1,342,798 Total deposits 1,755,935 1,781,777 Short-term borrowings 108,555 63,622 Other borrowings 40,189 26,844 Accrued interest payable 4,703 1,160 Other liabilities 18,566 17,489 TOTAL LIABILITIES 1,927,948 1,890,892 STOCKHOLDERS' EQUITY Preferred Stock, no par value per share, authorized 5,000,000 shares- - Common Stock, $.10 par value per share, authorized: 20,000,000 shares, issued: 2023: 8,291,401 shares, 2022: 8,268,401 shares 829 827 Surplus 95,052 96,619 Retained earnings 133,427 114,845 Treasury stock, at cost: 2023: 110,400 shares, 2022: 65,089 shares(2,930) (1,760) Accumulated other comprehensive loss (49,963) (23,725) TOTAL STOCKHOLDERS' EQUITY 176,415 186,806 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$2,104,363 $2,077,698 NORWOOD FINANCIAL CORPConsolidated Statements of Income(dollars in thousands, except per share data)(unaudited) Three Months Ended March 31, 2023 2022 INTEREST INCOME Loans receivable, including fees$19,158 $15,375 Securities 2,505 1,894 Other 48 78 Total Interest income 21,711 17,347 INTEREST EXPENSE Deposits 4,362 1,059 Short-term borrowings 779 48 Other borrowings 477 139 Total Interest expense 5,618 1,246 NET INTEREST INCOME 16,093 16,101 PROVISION FOR CREDIT LOSSES$300 300 NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 15,793 15,801 OTHER INCOME Service charges and fees 1,313 1,470 Income from fiduciary activities 212 202 Net realized gains on sales of securities 2 - Gains on sales of loans, net - - Gains on sales of foreclosed real estate owned - 427 Earnings and proceeds on life insurance policies 213 176 Other 172 1,063 Total other income 1,912 3,338 OTHER EXPENSES Salaries and employee benefits 5,969 5,431 Occupancy, furniture and equipment 1,262 1,307 Data processing and related operations 768 628 Taxes, other than income 161 294 Professional fees 285 575 FDIC Insurance assessment 200 183 Foreclosed real estate 29 53 Amortization of intangibles 23 27 Other 1,739 1,659 Total other expenses 10,436 10,157 INCOME BEFORE TAX 7,269 8,982 INCOME TAX EXPENSE 1,487 1,854 NET INCOME$5,782 $7,128 Basic earnings per share$0.71 $0.87 Diluted earnings per share$0.71 $0.87 NORWOOD FINANCIAL CORPFinancial Highlights (Unaudited)(dollars in thousands, except per share data) For the Three Months Ended March 31 2023 2022 Net interest income$16,093 $16,101 Net income 5,782 7,128 Net interest spread (fully taxable equivalent) 2.83% 3.22% Net interest margin (fully taxable equivalent) 3.25% 3.32% Return on average assets 1.13% 1.39% Return on average equity 13.61% 14.22% Return on average tangible equity 16.42% 16.65% Basic earnings per share$0.71 $0.87 Diluted earnings per share$0.71 $0.87 As of March 31 2023 2022 Total assets$2,104,363 $2,077,698 Total loans receivable 1,535,643 1,371,645 Allowance for credit losses 19,445 16,660 Total deposits 1,755,935 1,781,777 Stockholders' equity 176,415 186,806 Trust assets under management 187,345 190,144 Book value per share$21.92 $22.99 Tangible book value per share$18.31 $19.37 Equity to total assets 8.38% 8.99% Allowance to total loans receivable 1.27% 1.21% Nonperforming loans to total loans 0.07% 0.05% Nonperforming assets to total assets 0.06% 0.06% NORWOOD FINANCIAL CORPConsolidated Balance Sheets (unaudited)(dollars in thousands) March 31 December 31 September 30 June 30 March 31 2023 2022 2022 2022 2022ASSETS Cash and due from banks$25,701 $28,847 $23,092 $29,931 $22,394 Interest-bearing deposits with banks 3,314 3,019 17,785 79,735 143,632 Cash and cash equivalents 29,015 31,866 40,877 109,666 166,026 Securities available for sale 418,245 418,927 427,287 440,877 434,924 Loans receivable 1,535,643 1,473,945 1,432,288 1,404,317 1,371,645 Less: Allowance for credit losses 19,445 16,999 16,931 17,017 16,660 Net loans receivable 1,516,198 1,456,946 1,415,357 1,387,300 1,354,985 Regulatory stock, at cost 5,963 5,418 2,220 2,396 3,423 Bank owned life insurance 45,577 43,364 43,169 43,167 40,215 Bank premises and equipment, net 17,660 17,924 17,427 17,032 17,022 Foreclosed real estate owned 346 346 346 346 590 Goodwill and other intangibles 29,549 29,572 29,595 29,619 29,646 Other assets 41,810 42,707 42,592 35,981 30,867 TOTAL ASSETS$2,104,363 $2,047,070 $2,018,870 $2,066,384 $2,077,698 LIABILITIES Deposits: Non-interest bearing demand$419,615 $434,529 $453,560 $442,991 $438,979 Interest-bearing deposits 1,336,320 1,293,198 1,315,236 1,356,839 1,342,798 Total deposits 1,755,935 1,727,727 1,768,796 1,799,830 1,781,777 Borrowings 148,744 133,215 71,754 74,839 90,466 Other liabilities 23,269 19,043 19,471 17,884 18,649 TOTAL LIABILITIES 1,927,948 1,879,985 1,860,021 1,892,553 1,890,892 STOCKHOLDERS' EQUITY 176,415 167,085 158,849 173,831 186,806 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$2,104,363 $2,047,070 $2,018,870 $2,066,384 $2,077,698 NORWOOD FINANCIAL CORP Consolidated Statements of Income (unaudited) (dollars in thousands, except per share data) March 31 December 31 September 30June 30 March 31Three months ended 2023 2022 2022 2022 2022INTEREST INCOME Loans receivable, including fees$19,158 $17,810 $17,114 $15,714 $15,375 Securities 2,505 2,487 2,473 2,197 1,894 Other 48 98 245 182 78 Total interest income 21,711 20,395 19,832 18,093 17,347 INTEREST EXPENSE Deposits 4,362 2,772 1,557 1,083 1,059 Borrowings 1,256 391 105 116 187 Total interest expense 5,618 3,163 1,662 1,199 1,246 NET INTEREST INCOME 16,093 17,232 18,170 16,894 16,101 PROVISION FOR CREDIT LOSSES 300 300 - 300 300 NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 15,793 16,932 18,170 16,594 15,801 OTHER INCOME Service charges and fees 1,313 1,370 1,346 1,475 1,470 Income from fiduciary activities 212 210 219 214 202 Net realized gains on sales of securities 2 3 - - - Gains on sales of loans, net - 1 1 - - Gains on sales of foreclosed real estate owned - - - - 427 Earnings and proceeds on life insurance policies 213 195 267 449 176 Other 172 147 345 351 1,063 Total other income 1,912 1,926 2,178 2,489 3,338 OTHER EXPENSES Salaries and employee benefits 5,969 5,246 5,553 5,840 5,431 Occupancy, furniture and equipment, net 1,262 1,263 1,191 1,206 1,307 Foreclosed real estate 29 7 4 10 53 FDIC insurance assessment 200 144 143 142 183 Other 2,976 3,615 3,248 3,274 3,183 Total other expenses 10,436 10,275 10,139 10,472 10,157 INCOME BEFORE TAX 7,269 8,583 10,209 8,611 8,982 INCOME TAX EXPENSE 1,487 1,443 2,100 1,756 1,854 NET INCOME$5,782 $7,140 $8,109 $6,855 $7,128 Basic earnings per share$0.71 $0.88 $1.00 $0.84 $0.87 Diluted earnings per share$0.71 $0.88 $1.00 $0.84 $0.87 Book Value per share$21.92 $20.86 $19.92 $21.65 $22.99 Tangible Book Value per share 18.31 17.24 16.29 18.02 19.37 Return on average assets (annualized) 1.13% 1.40% 1.57% 1.35% 1.39%Return on average equity (annualized) 13.61% 17.40% 17.93% 15.19% 14.22%Return on average tangible equity (annualized) 16.42% 21.27% 21.48% 18.16% 16.65% Net interest spread (fte) 2.83% 3.30% 3.61% 3.40% 3.22%Net interest margin (fte) 3.25% 3.55% 3.74% 3.49% 3.32% Allowance for credit losses to total loans 1.27% 1.15% 1.18% 1.21% 1.21%Net charge-offs to average loans (annualized) 0.08% 0.06% 0.02% -0.02% 0.02%Nonperforming loans to total loans 0.07% 0.08% 0.04% 0.04% 0.05%Nonperforming assets to total assets 0.06% 0.07% 0.05% 0.05% 0.06%