• Norwood Financial Corp Announces Third Quarter Earnings

    المصدر: Nasdaq GlobeNewswire / 26 أكتوبر 2022 08:15:01   America/New_York

    HONESDALE, Pa., Oct. 26, 2022 (GLOBE NEWSWIRE) -- James O. Donnelly, President and Chief Executive Officer of Norwood Financial Corp. (Nasdaq Global Market-NWFL) and its subsidiary, Wayne Bank, announced earnings for the three months ended September 30, 2022 of $8,109,000, which represents an increase of $1,128,000, or 16.2%, over the $6,981,000 earned in the same three-month period of 2021. The increase in earnings was due to a $1.2 million increase in net interest income, and a $750,000 reduction in the provision for loan losses during the three-months ended September 30, 2022. Earnings per share (fully diluted) were $1.00 in the three-months ended September 30, 2022, which represents an increase from the $0.85 earned in the same period of 2021. The annualized returns on average assets and average tangible equity for the current three-month period were 1.57% and 21.48%, respectively, compared to 1.36% and 15.78% for the three-month period ended September 30, 2021. Net income for the nine months ended September 30, 2022, totaled $22,093,000, which is $3,816,000, or 20.9%, higher than the same period of 2021. The increase in net income includes a $2,347,000 increase in net interest income, a $3,150,000 reduction in the provision for loan losses, and a $1,671,000 increase in total other income during the nine months ended September 30, 2022. Earnings per share (fully diluted) for the nine months ended September 30, 2022, totaled $2.71 per share compared to $2.23 per share in the same 2021 period.

    Total assets as of September 30, 2022 were $2.019 billion, with loans receivable of $1.432 billion, deposits of $1.769 billion and stockholders’ equity of $158.8 million.

    For the three months ended September 30, 2022, net interest income, on a fully taxable equivalent basis (fte), totaled $18,369,000, which represents an increase of $1,183,000, compared to the same period in 2021. A $157.7 million increase in average securities contributed to the increased income. Net interest margin (fte) for the 2022 period was 3.74%, compared to 3.61% for the similar period in 2021. Net interest income (fte) for the nine months ended September 30, 2022 totaled $51,734,000, an increase of $2,305,000, compared to the same period in 2021, due primarily to a $174.6 million increase in average securities. The net interest margin (fte) for the nine months ended September 30, 2022 was 3.52%, compared to 3.54% for the same period of 2021.

    Total other income for the three months ended September 30, 2022 was $2,178,000, compared to $2,159,000 for the same period in 2021. For the nine months ended September 30, 2022, total other income was $8,006,000, compared to $6,335,000 in the same period of 2021. The increase was due primarily to income recognized on previously acquired purchased impaired loans that were carried at a discount.

    Total other expenses were $10,139,000 for the three months ended September 30, 2022, compared to $9,623,000 in the same period of 2021. For the nine months ended September 30, 2022, total other expenses were $30,768,000, compared to $28,567,000 for the same period in 2021. The increase was due primarily to a $1,208,000 increase in salaries and employee benefit costs during the nine months ended September 30, 2022.

    Mr. Donnelly commented, “Our results for the first nine months of 2022 reflect increasing net interest spreads due to rising interest rates, the higher level of interest earning assets, and reduced loan loss provisions related to our improved credit quality metrics. Our return on average assets for the nine months ended September 30, 2022 was 1.44%, our fully-diluted earnings per share improved 21.5% compared to the same nine-month period of last year, and our credit quality metrics remain strong, which should bode well for future performance. We appreciate the opportunity to serve our expanded 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”, 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 effect and impact of, the COVID-19 pandemic on the economy and the Company’s results of operation and financial condition, the ability to control costs and expenses, 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 tax-equivalent net interest income, which is a non-GAAP (Generally Accepted Accounting Principles) financial measure. Tax-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 tax-equivalent basis ensures comparability of net interest income arising from both taxable and tax-exempt sources and is consistent with industry practice.

    The following reconciles net interest income to net interest income on a fully taxable-equivalent basis:

    (dollars in thousands)Three months ended September 30Nine months ended September 30
      2022 2021 2022 2021
    Net interest income$18,170$16,989$51,164$48,817
    Tax equivalent basis adjustment using 21% marginal tax rate 199 197 570 612
    Net interest income on a fully taxable equivalent basis$18,369$17,186$51,734$49,429

    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 reconciles average equity to average tangible equity:
      Three months ended September 30Nine months ended September 30
    (dollars in thousands)  2022  2021  2022  2021 
          
    Average equity $179,398 $205,848 $187,183 $201,102 
          
    Average goodwill and other intangibles  (29,605
    )
     (29,712) (29,630) (29,757)
    Average tangible equity

     $149,793 $176,136 $157,553 $171,345 



                    
    NORWOOD FINANCIAL CORP.               
    Consolidated Balance Sheets                
    (dollars in thousands, except share and per share data)               
     (unaudited)               
      September 30           
       2022  2021            
    ASSETS               
       Cash and due from banks $ 23,092  $28,353            
       Interest-bearing deposits with banks  17,785  191,580            
              Cash and cash equivalents  40,877  219,933            
                    
      Securities available for sale  427,287  361,988            
      Loans receivable  1,432,288  1,371,002            
      Less: Allowance for loan losses  16,931  16,103            
         Net loans receivable  1,415,357  1,354,899            
      Regulatory stock, at cost  2,220  3,898            
      Bank premises and equipment, net  17,427  17,364            
      Bank owned life insurance  43,169  39,864            
      Foreclosed real estate owned  346  1,876            
      Accrued interest receivable  6,303  6,049            
      Goodwill  29,266  29,266            
      Other intangible assets  329  434            
      Other assets  36,289  18,120            
              TOTAL ASSETS $ 2,018,870  $2,053,691            
                    
    LIABILITIES               
       Deposits:               
         Non-interest bearing demand $ 453,560  $442,534            
         Interest-bearing  1,315,236  1,279,988            
              Total deposits  1,768,796  1,722,522            
      Short-term borrowings  71,754  78,246            
      Other borrowings  -  33,136            
      Accrued interest payable  1,425  1,341            
      Other liabilities  18,046  15,838            
                TOTAL LIABILITIES  1,860,021  1,851,083            
                    
    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: 2022: 8,275,901 shares, 2021: 8,245,951 shares  828  825            
      Surplus  96,785  96,100            
      Retained earnings  125,243  105,668            
      Treasury stock, at cost: 2022: 130,046 shares, 2021: 51,568 shares (3,442) (1,423)           
      Accumulated other comprehensive (loss) income  (60,565) 1,438            
               TOTAL STOCKHOLDERS' EQUITY  158,849  202,608            
                    
              TOTAL LIABILITIES AND               
                     STOCKHOLDERS' EQUITY $ 2,018,870  $2,053,691            
                    
                    
                    
                    
    NORWOOD FINANCIAL CORP.               
    Consolidated Statements of Income                
    (dollars in thousands, except per share data)               
      (unaudited)               
       Three Months Ended September 30,    Nine Months Ended September 30,     
       2022  2021    2022  2021      
    INTEREST INCOME               
        Loans receivable, including fees$ 17,114 $16,859   $48,203 $49,107      
        Securities  2,473  1,468    6,564  3,936      
        Other  245  72    504  174      
             Total Interest income  19,832  18,399    55,271  53,217      
                    
    INTEREST EXPENSE               
       Deposits  1,557  1,167    3,699  3,627      
       Short-term borrowings  88  71    196  214      
       Other borrowings  17  172    212  559      
            Total Interest expense  1,662  1,410    4,107  4,400      
    NET INTEREST INCOME  18,170  16,989    51,164  48,817      
    PROVISION FOR LOAN LOSSES $ -  750    600  3,750      
    NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 18,170  16,239    50,564  45,067      
                    
    OTHER INCOME               
        Service charges and fees  1,346  1,485    4,292  4,268      
        Income from fiduciary activities  219  209    634  550      
        Net realized gains on sales of securities  -  35    -  56      
        Gains on sales of loans, net  1  39    1  177      
        Gains on sales of foreclosed real estate owned  -  31    427  31      
        Earnings and proceeds on life insurance policies  267  200    892  767      
        Other  345  160    1,760  486      
               Total other income  2,178  2,159    8,006  6,335      
                    
    OTHER EXPENSES               
          Salaries and employee benefits  5,553  5,491    16,824  15,616      
          Occupancy, furniture and equipment  1,191  1,163    3,704  3,568      
          Data processing and related operations  736  594    2,031  1,760      
          Taxes, other than income  240  229    773  763      
          Professional fees  354  189    1,336  1,072      
          FDIC Insurance assessment  143  177    468  512      
          Foreclosed real estate  4  16    66  58      
          Amortization of intangibles  24  28    78  96      
          Other  1,894  1,736    5,488  5,122      
                 Total other expenses  10,139  9,623    30,768  28,567      
                    
    INCOME BEFORE TAX  10,209  8,775    27,802  22,835      
    INCOME TAX EXPENSE  2,100  1,794    5,709  4,558      
    NET INCOME $ 8,109  $6,981    $22,093  $18,277      
                    
    Basic earnings per share$ 1.00 $0.85   $2.71 $2.23      
                    
    Diluted earnings per share$ 1.00 $0.85   $2.71 $2.23      
                    
                    
                    
    NORWOOD FINANCIAL CORP.               
    Financial Highlights (Unaudited)               
    (dollars in thousands, except per share data)               
                    
    For the Three Months Ended September 30  2022  2021            
                    
    Net interest income $ 18,170  $16,989            
    Net income  8,109  6,981            
                    
    Net interest spread (fully taxable equivalent)  3.61% 3.49%           
    Net interest margin (fully taxable equivalent)  3.74% 3.61%           
    Return on average assets  1.57% 1.36%           
    Return on average equity  17.93% 13.50%           
    Return on average tangible equity  21.48% 15.78%           
    Basic earnings per share $ 1.00  $0.85            
    Diluted earnings per share $ 1.00  $0.85            
                    
    For the Nine Months Ended September 30  2022  2021            
                    
    Net interest income $ 51,164  $48,817            
    Net income  22,093  18,277            
                    
    Net interest spread (fully taxable equivalent)  3.41% 3.43%           
    Net interest margin (fully taxable equivalent)  3.52% 3.54%           
    Return on average assets  1.44% 1.23%           
    Return on average equity  15.73% 12.19%           
    Return on average tangible equity  18.67% 14.31%           
    Basic earnings per share $ 2.71  $2.23            
    Diluted earnings per share $ 2.71  $2.23            
                    
    As of September 30  2022  2021            
                    
    Total assets $ 2,018,870  $2,053,691            
    Total loans receivable  1,432,288  1,371,002            
    Allowance for loan losses  16,931  16,103            
    Total deposits  1,768,796  1,722,522            
    Stockholders' equity  158,849  202,608            
    Trust assets under management  172,037  187,689            
                    
    Book value per share $ 19.92  $24.90            
    Tangible book value per share $ 16.29  $21.27            
    Equity to total assets  7.87% 9.87%           
    Allowance to total loans receivable  1.18% 1.17%           
    Nonperforming loans to total loans  0.04% 0.14%           
    Nonperforming assets to total assets  0.05% 0.18%           
                    
                    
                    
    NORWOOD FINANCIAL CORP.               
    Consolidated Balance Sheets (unaudited)               
    (dollars in thousands)               
         September 30   June 30    March 31    December 31    September 30    
       2022  2022  2022  2021  2021      
    ASSETS               
       Cash and due from banks $ 23,092  $29,931  $22,394  $21,073  $28,353      
       Interest-bearing deposits with banks  17,785  79,735  143,632  185,608  191,580      
            Cash and cash equivalents  40,877  109,666  166,026  206,681  219,933      
                    
      Securities available for sale  427,287  440,877  434,924  406,782  361,988      
      Loans receivable  1,432,288  1,404,317  1,371,645  1,354,931  1,371,002      
       Less: Allowance for loan losses  16,931  17,017  16,660  16,442  16,103      
         Net loans receivable  1,415,357  1,387,300  1,354,985  1,338,489  1,354,899      
      Regulatory stock, at cost  2,220  2,396  3,423  3,927  3,898      
      Bank owned life insurance  43,169  43,167  40,215  40,038  39,864      
      Bank premises and equipment, net  17,427  17,032  17,022  17,289  17,364      
      Foreclosed real estate owned  346  346  590  1,742  1,876      
      Goodwill and other intangibles  29,595  29,619  29,646  29,673  29,700      
      Other assets  42,592  35,981  30,867  23,883  24,169      
              TOTAL ASSETS $ 2,018,870  $2,066,384  $2,077,698  $2,068,504  $2,053,691      
                    
    LIABILITIES               
       Deposits:               
         Non-interest bearing demand $ 453,560  $442,991  $438,979  $440,652  $442,534      
         Interest-bearing deposits  1,315,236  1,356,839  1,342,798  1,316,141  1,279,988      
              Total deposits  1,768,796  1,799,830  1,781,777  1,756,793  1,722,522      
       Borrowings  71,754  74,839  90,466  90,820  111,382      
       Other liabilities  19,471  17,884  18,649  15,629  17,179      
                TOTAL LIABILITIES  1,860,021  1,892,553  1,890,892  1,863,242  1,851,083      
                    
    STOCKHOLDERS' EQUITY  158,849  173,831  186,806  205,262  202,608      
                    
              TOTAL LIABILITIES AND               
                     STOCKHOLDERS' EQUITY $ 2,018,870  $2,066,384  $2,077,698  $2,068,504  $2,053,691      
                    
                    
                    
    NORWOOD FINANCIAL CORP.               
    Consolidated Statements of Income (unaudited)               
    (dollars in thousands, except per share data)               
         September 30   June 30    March 31    December 31    September 30    
    Three months ended  2022  2022  2022  2021  2021      
    INTEREST INCOME               
        Loans receivable, including fees $ 17,114  $15,714  $15,375  $16,149  $16,859      
        Securities  2,473  2,197  1,894  1,612  1,468      
        Other  245  182  78  92  72      
             Total interest income  19,832  18,093  17,347  17,853  18,399      
                    
    INTEREST EXPENSE               
        Deposits  1,557  1,083  1,059  1,130  1,167      
        Borrowings  105  116  187  227  243      
            Total interest expense  1,662  1,199  1,246  1,357  1,410      
    NET INTEREST INCOME  18,170  16,894  16,101  16,496  16,989      
    PROVISION FOR LOAN LOSSES  -  300  300  450  750      
    NET INTEREST INCOME AFTER PROVISION               
         FOR LOAN LOSSES  18,170  16,594  15,801  16,046  16,239      
                    
    OTHER INCOME               
        Service charges and fees  1,346  1,475  1,470  1,425  1,485      
        Income from fiduciary activities  219  214  202  198  209      
        Net realized gains on sales of securities  -  -  -  36  35      
        Gains on sales of loans, net  1  -  -  -  39      
        Gains on sales of foreclosed real estate owned  -  -  427  -  31      
        Earnings and proceeds on life insurance policies  267  449  176  174  200      
        Other  345  351  1,063  188  160      
               Total other income  2,178  2,489  3,338  2,021  2,159      
                    
    OTHER EXPENSES               
        Salaries and employee benefits  5,553  5,840  5,431  4,992  5,491      
        Occupancy, furniture and equipment, net  1,191  1,206  1,307  1,254  1,163      
        Foreclosed real estate  4  10  53  88  16      
        FDIC insurance assessment  143  142  183  169  177      
        Other  3,248  3,274  3,183  3,539  2,776      
                 Total other expenses  10,139  10,472  10,157  10,042  9,623      
                    
    INCOME BEFORE TAX  10,209  8,611  8,982  8,025  8,775      
    INCOME TAX EXPENSE  2,100  1,756  1,854  1,387  1,794      
    NET INCOME $ 8,109  $6,855  $7,128  $6,638  $6,981      
                    
    Basic earnings per share $ 1.00  $0.84  $0.87  $0.81  $0.85      
                    
    Diluted earnings per share $ 1.00  $0.84  $0.87  $0.81  $0.85      
                    
    Book Value per share$ 19.92 $21.65 $22.99 $25.24 $24.90      
    Tangible Book Value per share  16.29  18.02  19.37  21.63  21.27      
                    
    Return on average assets (annualized)  1.57% 1.35% 1.39% 1.26% 1.36%     
    Return on average equity (annualized)  17.93% 15.19% 14.22% 12.84% 13.50%     
    Return on average tangible equity (annualized)  21.48% 18.16% 16.65% 15.02% 15.78%     
                    
    Net interest spread (fte)  3.61% 3.40% 3.22% 3.29% 3.49%     
    Net interest margin (fte)  3.74% 3.49% 3.32% 3.39% 3.61%     
                    
    Allowance for loan losses to total loans  1.18% 1.21% 1.21% 1.21% 1.17%     
    Net charge-offs to average loans (annualized)  0.02% -0.02% 0.02% 0.03% -0.00%     
    Nonperforming loans to total loans  0.04% 0.04% 0.05% 0.05% 0.20%     
    Nonperforming assets to total assets  0.05% 0.05% 0.06% 0.12% 0.22%     
                    

    Contact:

    William S. Lance
    Executive Vice President & Chief Financial Officer
    NORWOOD FINANCIAL CORP
    570-253-8505
    www.waynebank.com


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