• Norwood Financial Corp Announces Earnings for the Fourth Quarter And 2022 Fiscal Year

    Источник: Nasdaq GlobeNewswire / 27 янв 2023 08:15:00   America/New_York

    HONESDALE, Pa., Jan. 27, 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 for the three months ended December 31, 2022 of $7,140,000 compared to the net income of $6,638,000 earned in the three months ended December 31, 2021. The increase in net income was due primarily to a $736,000 increase in net interest income. For the year ended December 31, 2022, net income totaled $29,233,000, an increase of $4,318,000 from net income of $24,915,000 earned in year ended December 31, 2021. The increase includes a $3,084,000 increase in net interest income and a $3,300,000 reduction in the provision for loan losses.

    Earnings per share (fully diluted) were $0.88 and $0.81 for the three-month periods ended December 31, 2022 and 2021, respectively. For the year ended December 31, 2022, earnings per share on a fully diluted basis were $3.58, compared to $3.05 for the year ended December 31, 2021. For the year ended December 31, 2022, the return on average assets was 1.43%, and the return on average equity was 16.11%, compared to 1.24% and 12.35%, respectively, for the year ended December 31, 2021.         

    Total assets were $2.047 billion as of December 31, 2022. As of December 31, 2022, loans receivable were $1.474 billion, total deposits were $1.728 billion and stockholders’ equity was $167.1 million. The $38.2 million decrease in stockholders’ equity compared to December 31, 2021, includes a $57.1 million decrease in accumulated other comprehensive income due to a decrease in the market value of available for sale securities related to the significant increase in interest rates during 2022.

    Loans receivable increased $119.0 million from the year-ended December 31, 2021, including a $90.0 million increase in retail loans and a $28.4 million increase in commercial loans. For the three months and year ended December 31, 2022, net charge-offs totaled $232,000 and $344,000, respectively, compared to $111,000 and $907,000, respectively, for the corresponding periods in 2021.

    Net interest income, on a fully taxable equivalent basis (fte), totaled $17,429,000 for the three months ended December 31, 2022, an increase of $758,000 compared to the same period in 2021. For the year ended December 31, 2022, net interest income (fte) totaled $69,164,000, an increase of $3,064,000 compared to 2021, due primarily to the higher volume of earning assets, including a $160.1 million increase in average securities available for sale.

    Other income for the three months ended December 31, 2022, totaled $1,926,000 compared to $2,021,000 for the similar period in 2021. Gains on the sale of loans and securities decreased $32,000, while service charges and fees decreased $55,000. All other items of other income decreased $8,000, net. Other income for the year ended December 31, 2022, totaled $9,932,000 compared to $8,361,000 in 2021, an increase of $1,571,000 due primarily to income recognized on previously acquired purchased impaired loans that were carried at a discount. Gains on the sale of loans and investment securities decreased $263,000 in the aggregate, while gains on sales of foreclosed real estate owned increased $391,000.

    Other expenses totaled $10,275,000 for the three months ended December 31, 2022, compared to $10,042,000 in the similar period of 2021. For the year ended December 31, 2022, other expenses totaled $41,044,000 compared to $38,614,000 for 2021, an increase of $2,430,000, or 6.3%.

    Mr. Donnelly commented, “In 2022, our earnings increased $4.3 million over our previous record year of 2021. Our Return on Average Assets was 1.43%, and our Return on Average Equity was 16.11%. Earnings per share (fully diluted) also improved to $3.58 per share in 2022 from $3.04 per share in 2021. We have continued to grow our core business lines, including an 8.8% increase in loans outstanding, and maintain our strong credit quality metrics, which should bode well for future performance. Our cash dividend of $0.29 per share declared in the fourth quarter of 2022, represents a 3.6% increase over the same period of last year. 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 is traded 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 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 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:


    (dollars in thousands)
    Three months ended 
    December 31
     Year ended
    December 31
      2022 2021 2022 2021
    Net interest income$17,232$16,496$68,397$65,313
    Tax equivalent basis adjustment
    using 21% marginal tax rate
     197 175 
    767
     787
    Net interest income on a fully
    taxable equivalent basis

    $

    17,429

    $

    16,671

    $

    69,164
    $66,100
             

    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:

    (dollars in thousands) Three months ended
    December 31,  
     Year ended
    December 31,
      2022 2021 2022  2021
             
    Average equity$162,762$205,053$181,499$201,681
    Average goodwill and other Intangibles (29,582) (29,683) (29,618) (29,738)
    Average tangible equity$133,180$175,370$151,881$171,943
             


                
    NORWOOD FINANCIAL CORP.           
    Consolidated Balance Sheets            
    (dollars in thousands, except share and per share data)           
     (unaudited)           
      December 31       
       2022  2021        
    ASSETS           
       Cash and due from banks $ 28,847  $21,073        
       Interest-bearing deposits with banks  3,019  185,608        
              Cash and cash equivalents  31,866  206,681        
                
      Securities available for sale  418,927  406,782        
      Loans receivable  1,473,945  1,354,931        
      Less: Allowance for loan losses  16,999  16,442        
         Net loans receivable  1,456,946  1,338,489        
      Regulatory stock, at cost  5,418  3,927        
      Bank premises and equipment, net  17,924  17,289        
      Bank owned life insurance  43,364  40,038        
      Foreclosed real estate owned  346  1,742        
      Accrued interest receivable  6,917  5,889        
      Deferred tax assets, net  23,549  8,791        
      Goodwill  29,266  29,266        
      Other intangible assets  306  407        
      Other assets  12,241  9,203        
              TOTAL ASSETS $ 2,047,070  $2,068,504        
                
    LIABILITIES           
       Deposits:           
         Non-interest bearing demand $ 434,529  $440,652        
         Interest-bearing  1,293,198  1,316,141        
              Total deposits  1,727,727  1,756,793        
      Short-term borrowings  93,215  60,822        
      Other borrowings  40,000  29,998        
      Accrued interest payable  2,653  1,203        
      Other liabilities  16,390  14,426        
                TOTAL LIABILITIES  1,879,985  1,863,242        
                
    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: 8,291,401 shares, 2021: 8,266,751 shares  829  827        
      Surplus  96,897  96,443        
      Retained earnings  130,020  110,015        
      Treasury stock, at cost: 2022: 124,650 shares, 2021: 65,328 shares (3,308) (1,767)       
      Accumulated other comprehensive (loss) income  (57,353) (256)       
               TOTAL STOCKHOLDERS' EQUITY  167,085  205,262        
                
              TOTAL LIABILITIES AND           
                     STOCKHOLDERS' EQUITY $ 2,047,070  $2,068,504        
                
                
                
                
    NORWOOD FINANCIAL CORP.           
    Consolidated Statements of Income            
    (dollars in thousands, except per share data)           
      (unaudited)           
       Three Months Ended
    December 31,
        Twelve Months Ended
    December 31,
     
       2022  2021    2022  2021  
    INTEREST INCOME           
        Loans receivable, including fees$ 17,810 $16,149   $66,013 $65,257  
        Securities  2,487  1,612    9,051  5,547  
        Other  98  92    602  266  
             Total Interest income  20,395  17,853    75,666  71,070  
                
    INTEREST EXPENSE           
       Deposits  2,772  1,130    6,471  4,757  
       Short-term borrowings  329  71    524  284  
       Other borrowings  62  156    274  716  
            Total Interest expense  3,163  1,357    7,269  5,757  
    NET INTEREST INCOME  17,232  16,496    68,397  65,313  
    PROVISION FOR LOAN LOSSES $ 300  450    900  4,200  
    NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 16,932  16,046    67,497  61,113  
                
    OTHER INCOME           
        Service charges and fees  1,370  1,425    5,661  5,693  
        Income from fiduciary activities  210  198    845  748  
        Net realized gains on sales of securities  3  36    3  92  
        Gains on sales of loans, net  1  -    3  177  
        Gains on sales of foreclosed real estate owned  -  -    427  36  
        Earnings and proceeds on life insurance policies  195  174    1,087  941  
        Other  147  188    1,906  674  
               Total other income  1,926  2,021    9,932  8,361  
                
    OTHER EXPENSES           
          Salaries and employee benefits  5,246  4,992    22,071  20,608  
          Occupancy, furniture and equipment  1,263  1,254    4,967  4,822  
          Data processing and related operations  917  655    2,948  2,415  
          Taxes, other than income  239  358    1,013  1,122  
          Professional fees  383  510    1,719  1,582  
          FDIC Insurance assessment  144  169    612  681  
          Foreclosed real estate  7  88    73  151  
          Amortization of intangibles  23  27    101  123  
          Other  2,053  1,989    7,540  7,110  
                 Total other expenses  10,275  10,042    41,044  38,614  
                
    INCOME BEFORE TAX  8,583  8,025    36,385  30,860  
    INCOME TAX EXPENSE  1,443  1,387    7,152  5,945  
    NET INCOME $ 7,140  $6,638    $29,233  $24,915  
                
    Basic earnings per share$ 0.88 $0.81   $3.59 $3.05  
                
    Diluted earnings per share$ 0.88 $0.81   $3.58 $3.05  
                
                
                
    NORWOOD FINANCIAL CORP.           
    Financial Highlights (Unaudited)           
    (dollars in thousands, except per share data)           
                
    For the Three Months Ended December 31  2022  2021        
                
    Net interest income $ 17,232  $16,496        
    Net income  7,140  6,638        
                
    Net interest spread (fully taxable equivalent)  3.30% 3.29%       
    Net interest margin (fully taxable equivalent)  3.55% 3.39%       
    Return on average assets  1.40% 1.26%       
    Return on average equity  17.40% 12.84%       
    Return on average tangible equity  21.27% 15.02%       
    Basic earnings per share $ 0.88  $0.81        
    Diluted earnings per share $ 0.88  $0.81        
                
    For the Twelve Months Ended December 31  2022  2021        
                
    Net interest income $ 68,397  $65,313        
    Net income  29,233  24,915        
                
    Net interest spread (fully taxable equivalent)  3.38% 3.39%       
    Net interest margin (fully taxable equivalent)  3.53% 3.50%       
    Return on average assets  1.43% 1.24%       
    Return on average equity  16.11% 12.35%       
    Return on average tangible equity  19.25% 14.49%       
    Basic earnings per share $ 3.59  $3.05        
    Diluted earnings per share $ 3.58  $3.04        
                
    As of December 31  2022  2021        
                
    Total assets $ 2,047,070  $2,068,504        
    Total loans receivable  1,473,945  1,354,931        
    Allowance for loan losses  16,999  16,442        
    Total deposits  1,727,727  1,756,793        
    Stockholders' equity  167,085  205,262        
    Trust assets under management  184,855  195,958        
                
    Book value per share $ 20.86  $25.24        
    Tangible book value per share $ 17.24  $21.63        
    Equity to total assets  8.16% 9.92%       
    Allowance to total loans receivable  1.15% 1.21%       
    Nonperforming loans to total loans  0.08% 0.05%       
    Nonperforming assets to total assets  0.07% 0.12%       
                
                
                
    NORWOOD FINANCIAL CORP.           
    Consolidated Balance Sheets (unaudited)           
    (dollars in thousands)           
      December 31 September 30
     June 30 March 31 December 31 
       2022 2022 2022 2022 2021 
    ASSETS           
       Cash and due from banks $ 28,847  $23,092  $29,931  $22,394  $21,073  
       Interest-bearing deposits with banks  3,019  17,785  79,735  143,632  185,608  
            Cash and cash equivalents  31,866  40,877  109,666  166,026  206,681  
                
      Securities available for sale  418,927  427,287  440,877  434,924  406,782  
      Loans receivable  1,473,945  1,432,288  1,404,317  1,371,645  1,354,931  
       Less: Allowance for loan losses  16,999  16,931  17,017  16,660  16,442  
         Net loans receivable  1,456,946  1,415,357  1,387,300  1,354,985  1,338,489  
      Regulatory stock, at cost  5,418  2,220  2,396  3,423  3,927  
      Bank owned life insurance  43,364  43,169  43,167  40,215  40,038  
      Bank premises and equipment, net  17,924  17,427  17,032  17,022  17,289  
      Foreclosed real estate owned  346  346  346  590  1,742  
      Goodwill and other intangibles  29,572  29,595  29,619  29,646  29,673  
      Other assets  42,707  42,592  35,981  30,867  23,883  
              TOTAL ASSETS $ 2,047,070  $2,018,870  $2,066,384  $2,077,698  $2,068,504  
                
    LIABILITIES           
       Deposits:           
         Non-interest bearing demand $ 434,529  $453,560  $442,991  $438,979  $440,652  
         Interest-bearing deposits  1,293,198  1,315,236  1,356,839  1,342,798  1,316,141  
              Total deposits  1,727,727  1,768,796  1,799,830  1,781,777  1,756,793  
       Borrowings  133,215  71,754  74,839  90,466  90,820  
       Other liabilities  19,043  19,471  17,884  18,649  15,629  
                TOTAL LIABILITIES  1,879,985  1,860,021  1,892,553  1,890,892  1,863,242  
                
    STOCKHOLDERS' EQUITY  167,085  158,849  173,831  186,806  205,262  
                
              TOTAL LIABILITIES AND           
                     STOCKHOLDERS' EQUITY $ 2,047,070  $2,018,870  $2,066,384  $2,077,698  $2,068,504  
                
                
                
    NORWOOD FINANCIAL CORP.           
    Consolidated Statements of Income (unaudited)           
    (dollars in thousands, except per share data)           
      December 31 September 30June 30 March 31 December 31 
    Three months ended  2022 2022 2022 2022 2021 
    INTEREST INCOME           
        Loans receivable, including fees $ 17,810  $17,114  $15,714  $15,375  $16,149  
        Securities  2,487  2,473  2,197  1,894  1,612  
        Other  98  245  182  78  92  
             Total interest income  20,395  19,832  18,093  17,347  17,853  
                
    INTEREST EXPENSE           
        Deposits  2,772  1,557  1,083  1,059  1,130  
        Borrowings  391  105  116  187  227  
            Total interest expense  3,163  1,662  1,199  1,246  1,357  
    NET INTEREST INCOME  17,232  18,170  16,894  16,101  16,496  
    PROVISION FOR LOAN LOSSES  300  -  300  300  450  
    NET INTEREST INCOME AFTER PROVISION           
         FOR LOAN LOSSES  16,932  18,170  16,594  15,801  16,046  
                
    OTHER INCOME           
        Service charges and fees  1,370  1,346  1,475  1,470  1,425  
        Income from fiduciary activities  210  219  214  202  198  
        Net realized gains on sales of securities  3  -  -  -  36  
        Gains on sales of loans, net  1  1  -  -  -  
        Gains on sales of foreclosed real estate owned  -  -  -  427  -  
        Earnings and proceeds on life insurance policies  195  267  449  176  174  
        Other  147  345  351  1,063  188  
               Total other income  1,926  2,178  2,489  3,338  2,021  
                
    OTHER EXPENSES           
        Salaries and employee benefits  5,246  5,553  5,840  5,431  4,992  
        Occupancy, furniture and equipment, net  1,263  1,191  1,206  1,307  1,254  
        Foreclosed real estate  7  4  10  53  88  
        FDIC insurance assessment  144  143  142  183  169  
        Other  3,615  3,248  3,274  3,183  3,539  
                 Total other expenses  10,275  10,139  10,472  10,157  10,042  
                
    INCOME BEFORE TAX  8,583  10,209  8,611  8,982  8,025  
    INCOME TAX EXPENSE  1,443  2,100  1,756  1,854  1,387  
    NET INCOME $ 7,140  $8,109  $6,855  $7,128  $6,638  
                
    Basic earnings per share $ 0.88  $1.00  $0.84  $0.87  $0.81  
                
    Diluted earnings per share $ 0.88  $1.00  $0.84  $0.87  $0.81  
                
    Book Value per share$ 20.86 $19.92 $21.65 $22.99 $25.24  
    Tangible Book Value per share  17.24  16.29  18.02  19.37  21.63  
                
    Return on average assets (annualized)  1.40% 1.57% 1.35% 1.39% 1.26% 
    Return on average equity (annualized)  17.40% 17.93% 15.19% 14.22% 12.84% 
    Return on average tangible equity (annualized)  21.27% 21.48% 18.16% 16.65% 15.02% 
                
    Net interest spread (fte)  3.30% 3.61% 3.40% 3.22% 3.29% 
    Net interest margin (fte)  3.55% 3.74% 3.49% 3.32% 3.39% 
                
    Allowance for loan losses to total loans  1.15% 1.18% 1.21% 1.21% 1.21% 
    Net charge-offs to average loans (annualized)  0.06% 0.02% -0.02% 0.02% 0.03% 
    Nonperforming loans to total loans  0.08% 0.04% 0.04% 0.05% 0.05% 
    Nonperforming assets to total assets  0.07% 0.05% 0.05% 0.06% 0.12% 
                

     

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

     


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