U.S. markets closed
  • S&P 500

    3,825.33
    +39.95 (+1.06%)
     
  • Dow 30

    31,097.26
    +321.86 (+1.05%)
     
  • Nasdaq

    11,127.84
    +99.14 (+0.90%)
     
  • Russell 2000

    1,727.76
    +19.77 (+1.16%)
     
  • Crude Oil

    111.10
    +2.67 (+2.46%)
     
  • Gold

    1,812.60
    +11.10 (+0.62%)
     
  • Silver

    20.10
    +0.43 (+2.20%)
     
  • EUR/USD

    1.0435
    +0.0011 (+0.10%)
     
  • 10-Yr Bond

    2.8890
    0.0000 (0.00%)
     
  • GBP/USD

    1.2115
    +0.0011 (+0.09%)
     
  • USD/JPY

    136.3060
    +0.6460 (+0.48%)
     
  • BTC-USD

    20,274.03
    +1,064.93 (+5.54%)
     
  • CMC Crypto 200

    440.13
    +19.99 (+4.76%)
     
  • FTSE 100

    7,232.65
    +64.00 (+0.89%)
     
  • Nikkei 225

    26,438.09
    +284.28 (+1.09%)
     

Norwood Financial Corp Announces Earnings for the Fourth Quarter and Year

  • Oops!
    Something went wrong.
    Please try again later.
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

HONESDALE, Pa., Jan. 28, 2022 (GLOBE NEWSWIRE) -- Lewis J. Critelli, 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 December 31, 2021 of $6,638,000 compared to $5,513,000 earned in the corresponding period of 2020. The increase in earnings includes a $1,150,000 reduction in the provision for loan losses, and an $882,000 increase in net interest income. For the year ended December 31, 2021, net income totaled $24,915,000, an increase of $9,835,000 from net income of $15,080,000 earned in the prior year. The increase includes the benefits derived from the Company’s acquisition of UpState New York Bancorp, Inc. (“UpState”), which closed on July 7, 2020, and over $4.5 million of earnings recognized from Paycheck Protection Program (“PPP”) loans.

Earnings per share (fully diluted) were $0.81 and $0.67 for the three-month periods ended December 31, 2021 and 2020, respectively. For the year ended December 31, 2021, earnings per share on a fully diluted basis were $3.04, compared to $2.09 for the year ended December 31, 2020. For the year ended December 31, 2021, the return on average assets was 1.24%, and the return on average equity was 12.35%, compared to 0.97% and 9.06%, respectively, for the year ended December 31, 2020.

Total assets were $2.069 billion as of December 31, 2021. Loans receivable totaled $1.355 billion as of December 31, 2021, with total deposits of $1.757 billion and stockholders’ equity of $205.3 million as of December 31, 2021.

Loans receivable decreased $55.8 million from the year-ended December 31, 2020, due primarily to the $78.8 million decrease in PPP loans resulting from loan forgiveness. For the three months and year ended December 31, 2021, net charge-offs totaled $111,000 and $907,000, respectively, compared to $125,000 and $809,000, respectively, for the corresponding periods in 2020.

Net interest income, on a fully taxable equivalent basis (fte), totaled $16,671,000 for the three months ended December 31, 2021, an increase of $850,000 compared to the same period in 2020. For the year ended December 31, 2021, net interest income (fte) totaled $66,100,000, an increase of $14,741,000 compared to 2020, due primarily to the higher volume of earning assets, including a $209.1 million increase in average loans outstanding. Loan origination fees related to PPP loans increased $3,072,000 compared to the 2020 total.

Other income for the three months ended December 31, 2021 totaled $2,021,000 compared to $2,661,000 for the similar period in 2020. Gains on the sale of loans and securities decreased $205,000, while service charges and fees decreased $488,000. All other items of other income increased $53,000, net. Other income for the year ended December 31, 2021 totaled $8,325,000 compared to $7,780,000 in 2020, an increase of $545,000 due primarily to a $578,000 increase in service charges and fees. Gains on the sale of loans and investment securities decreased $329,000 in the aggregate, while all other items of other income increased $296,000, net.

Other expenses totaled $10,042,000 for the three months ended December 31, 2021, compared to $9,909,000 in the similar period of 2020. For the year ended December 31, 2021, other expenses totaled $38,578,000 compared to $34,440,000 for 2020, an increase of $4,138,000. The increase reflects the costs of operations acquired from UpState, including four new Community Offices.

Mr. Critelli commented, “In 2021, our earnings increased $9.8 million over our previous record year of 2020. Our Return on Average Assets was 1.24%, and our Return on Average Equity was 12.35%. Earnings per share (fully diluted) also improved to $3.04 per share in 2021 from $2.09 per share in 2020. While a portion of this increase reflects earnings and fees collected on PPP loans, we have continued to grow our core business lines, which bodes well for future success. Our results also reflect a full year accretion to earnings from our acquisition of UpState. During the year, we also made significant progress improving our credit quality metrics, which will benefit future results. Our cash dividend of $0.28 per share declared in the fourth quarter of 2021 represents a 7.7% 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 sixteen 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”, 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 operations and financial condition, the ability to continue to grow our core business, the ability to have success in the future, the ability to improve our credit quality metrics and benefit future results, 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 interest income and net interest income on a fully taxable equivalent basis (fte), which are non-GAAP (Generally Accepted Accounting Principles) financial measures. Fully tax-equivalent net interest income is derived from GAAP interest income and net interest income using an assumed tax rate of 21%. We believe the presentation of interest income and net interest income on a fully tax–equivalent basis ensures comparability of 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 tax-equivalent basis:

Three months ended
December 31

Year ended
December 31

(dollars in thousands)

2021

2020

2021

2020

Net interest income

$16,496

$15,614

$65,313

$50,476

Tax equivalent basis adjustment using 21% marginal tax rate

175

207

787

883

Net interest income on a fully taxable equivalent basis

$16,671

$15,821

$66,100

$51,359

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
December 31,

Year ended
December 31,

(dollars in thousands)

2021

2020

2021

2020

Average equity

$205,053

$193,740

$201,681

$166,427

Average goodwill and other Intangibles

(29,683)

(30,747)

(29,738)

(17,942)

Average tangible equity

$175,370

$162,993

$171,943

$148,485


Contact:

William S. Lance

Executive Vice President &

Chief Financial Officer

NORWOOD FINANCIAL CORP

570-253-8505

www.waynebank.com


NORWOOD FINANCIAL CORP.

Consolidated Balance Sheets

(dollars in thousands, except share and per share data)

(unaudited)

December 31

2021

2020

ASSETS

Cash and due from banks

$

21,073

$

19,445

Interest-bearing deposits with banks

185,608

92,248

Cash and cash equivalents

206,681

111,693

Securities available for sale

406,782

226,586

Loans receivable

1,354,931

1,410,732

Less: Allowance for loan losses

16,442

13,150

Net loans receivable

1,338,489

1,397,582

Regulatory stock, at cost

3,927

3,981

Bank premises and equipment, net

17,289

17,814

Bank owned life insurance

40,038

39,608

Foreclosed real estate owned

1,742

965

Accrued interest receivable

5,889

6,232

Goodwill

29,266

29,290

Other intangible assets

407

530

Other assets

17,994

17,583

TOTAL ASSETS

$

2,068,504

$

1,851,864

LIABILITIES

Deposits:

Non-interest bearing demand

$

440,652

$

359,559

Interest-bearing

1,316,141

1,175,826

Total deposits

1,756,793

1,535,385

Short-term borrowings

60,822

63,303

Other borrowings

29,998

42,459

Accrued interest payable

1,203

1,601

Other liabilities

14,426

14,331

TOTAL LIABILITIES

1,863,242

1,657,079

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: 2021: 8,266,751 shares, 2020: 8,236,331 shares

827

824

Surplus

96,443

95,388

Retained earnings

110,015

93,796

Treasury stock, at cost: 2021: 65,328 shares, 2020: 10,263 shares

(1,767

)

(342

)

Accumulated other comprehensive (loss) income

(256

)

5,119

TOTAL STOCKHOLDERS' EQUITY

205,262

194,785

TOTAL LIABILITIES AND

STOCKHOLDERS' EQUITY

$

2,068,504

$

1,851,864

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,

2021

2020

2021

2020

INTEREST INCOME

Loans receivable, including fees

$

16,149

$

16,336

$

65,257

$

54,046

Securities

1,612

1,064

5,547

4,337

Other

92

29

266

72

Total Interest income

17,853

17,429

71,070

58,455

INTEREST EXPENSE

Deposits

1,130

1,514

4,757

6,610

Short-term borrowings

71

81

284

325

Other borrowings

156

220

716

1,044

Total Interest expense

1,357

1,815

5,757

7,979

NET INTEREST INCOME

16,496

15,614

65,313

50,476

PROVISION FOR LOAN LOSSES

450

1,600

4,200

5,450

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

16,046

14,014

61,113

45,026

OTHER INCOME

Service charges and fees

1,425

1,913

5,693

5,115

Income from fiduciary activities

198

150

748

682

Net realized gains on sales of securities

36

-

92

71

Gains on sales of loans, net

-

241

177

527

Earnings and proceeds on life insurance policies

174

208

941

845

Other

188

149

674

540

Total other income

2,021

2,661

8,325

7,780

OTHER EXPENSES

Salaries and employee benefits

4,992

5,243

20,608

17,121

Occupancy, furniture and equipment

1,254

1,165

4,822

4,148

Data processing and related operations

655

808

2,415

2,457

Taxes, other than income

358

356

1,122

997

Professional fees

510

328

1,582

1,062

FDIC Insurance assessment

169

213

681

399

Foreclosed real estate

88

8

115

53

Amortization of intangibles

27

35

123

114

Merger related

-

66

-

2,049

Other

1,989

1,687

7,110

6,040

Total other expenses

10,042

9,909

38,578

34,440

INCOME BEFORE TAX

8,025

6,766

30,860

18,366

INCOME TAX EXPENSE

1,387

1,253

5,945

3,286

NET INCOME

$

6,638

$

5,513

$

24,915

$

15,080

Basic earnings per share

$

0.81

$

0.67

$

3.05

$

2.09

Diluted earnings per share

$

0.81

$

0.67

$

3.04

$

2.09

NORWOOD FINANCIAL CORP.

Financial Highlights (Unaudited)

(dollars in thousands, except per share data)

For the Three Months Ended December 31

2021

2020

Net interest income

$

16,496

$

15,614

Net income

6,638

5,513

Net interest spread (fully taxable equivalent)

3.29

%

3.50

%

Net interest margin (fully taxable equivalent)

3.39

%

3.65

%

Return on average assets

1.26

%

1.18

%

Return on average equity

12.84

%

11.32

%

Return on average tangible equity

15.02

%

13.46

%

Basic earnings per share

$

0.81

$

0.67

Diluted earnings per share

$

0.81

$

0.67

For the Twelve Months Ended December 31

2021

2020

Net interest income

$

65,313

$

50,476

Net income

24,915

15,080

Net interest spread (fully taxable equivalent)

3.39

%

3.36

%

Net interest margin (fully taxable equivalent)

3.50

%

3.55

%

Return on average assets

1.24

%

0.97

%

Return on average equity

12.35

%

9.06

%

Return on average tangible equity

14.49

%

10.16

%

Basic earnings per share

$

3.05

$

2.09

Diluted earnings per share

$

3.04

$

2.09

As of December 31

2021

2020

Total assets

$

2,068,504

$

1,851,864

Total loans receivable

1,354,931

1,410,732

Allowance for loan losses

16,442

13,150

Total deposits

1,756,793

1,535,385

Stockholders' equity

205,262

194,785

Trust assets under management

195,958

168,085

Book value per share

$

25.24

$

23.72

Tangible book value per share

$

21.63

$

20.10

Equity to total assets

9.92

%

10.52

%

Allowance to total loans receivable

1.21

%

0.93

%

Nonperforming loans to total loans

0.05

%

0.24

%

Nonperforming assets to total assets

0.12

%

0.24

%

NORWOOD FINANCIAL CORP.

Consolidated Balance Sheets (unaudited)

(dollars in thousands)

December 31

September 30

June 30

March

December 31

2021

2021

2021

2021

2020

ASSETS

Cash and due from banks

$

21,073

$

28,353

$

34,831

$

20,364

$

19,445

Interest-bearing deposits with banks

185,608

191,580

170,342

190,135

92,248

Cash and cash equivalents

206,681

219,933

205,173

210,499

111,693

Securities available for sale

406,782

361,988

333,636

275,224

226,586

Loans receivable

1,354,931

1,371,002

1,386,654

1,421,568

1,410,732

Less: Allowance for loan losses

16,442

16,103

15,340

14,509

13,150

Net loans receivable

1,338,489

1,354,899

1,371,314

1,407,059

1,397,582

Regulatory stock, at cost

3,927

3,898

4,084

4,043

3,981

Bank owned life insurance

40,038

39,864

39,665

39,471

39,608

Bank premises and equipment, net

17,289

17,364

17,298

17,648

17,814

Foreclosed real estate owned

1,742

1,876

844

844

965

Goodwill and other intangibles

29,673

29,700

29,727

29,785

29,820

Other assets

23,883

24,169

23,823

25,263

23,815

TOTAL ASSETS

$

2,068,504

$

2,053,691

$

2,025,564

$

2,009,836

$

1,851,864

LIABILITIES

Deposits:

Non-interest bearing demand

$

440,652

$

442,534

$

435,824

$

415,395

$

359,559

Interest-bearing deposits

1,316,141

1,279,988

1,253,117

1,269,793

1,175,826

Total deposits

1,756,793

1,722,522

1,688,941

1,685,188

1,535,385

Borrowings

90,820

111,382

119,858

112,283

105,762

Other liabilities

15,629

17,179

16,266

17,258

15,932

TOTAL LIABILITIES

1,863,242

1,851,083

1,825,065

1,814,729

1,657,079

STOCKHOLDERS' EQUITY

205,262

202,608

200,499

195,107

194,785

TOTAL LIABILITIES AND

STOCKHOLDERS' EQUITY

$

2,068,504

$

2,053,691

$

2,025,564

$

2,009,836

$

1,851,864

NORWOOD FINANCIAL CORP.

Consolidated Statements of Income (unaudited)

(dollars in thousands, except per share data)

December 31

September 30

June 30

March 31

December 31

Three months ended

2021

2021

2021

2021

2020

INTEREST INCOME

Loans receivable, including fees

$

16,149

$

16,859

$

16,102

$

16,146

$

16,336

Securities

1,612

1,468

1,356

1,112

1,064

Other

92

72

59

43

29

Total interest income

17,853

18,399

17,517

17,301

17,429

INTEREST EXPENSE

Deposits

1,130

1,167

1,205

1,255

1,514

Borrowings

227

243

259

270

301

Total interest expense

1,357

1,410

1,464

1,525

1,815

NET INTEREST INCOME

16,496

16,989

16,053

15,776

15,614

PROVISION FOR LOAN LOSSES

450

750

1,500

1,500

1,600

NET INTEREST INCOME AFTER PROVISION

FOR LOAN LOSSES

16,046

16,239

14,553

14,276

14,014

OTHER INCOME

Service charges and fees

1,425

1,485

1,532

1,247

1,913

Income from fiduciary activities

198

209

181

160

150

Net realized gains on sales of securities

36

35

-

21

-

Gains on sales of loans, net

-

39

109

29

241

Earnings and proceeds on life insurance policies

174

200

194

374

208

Other

188

160

171

158

149

Total other income

2,021

2,128

2,187

1,989

2,661

OTHER EXPENSES

Salaries and employee benefits

4,992

5,491

5,171

4,953

5,243

Occupancy, furniture and equipment, net

1,254

1,163

1,186

1,220

1,165

Foreclosed real estate

88

(15

)

13

30

8

FDIC insurance assessment

169

177

154

181

213

Merger related

-

-

-

-

66

Other

3,539

2,776

2,968

3,068

3,214

Total other expenses

10,042

9,592

9,492

9,452

9,909

INCOME BEFORE TAX

8,025

8,775

7,248

6,813

6,766

INCOME TAX EXPENSE

1,387

1,794

1,493

1,271

1,253

NET INCOME

$

6,638

$

6,981

$

5,755

$

5,542

$

5,513

Basic earnings per share

$

0.81

$

0.85

$

0.70

$

0.68

$

0.67

Diluted earnings per share

$

0.81

$

0.85

$

0.70

$

0.67

$

0.67

Book Value per share

$

25.24

$

24.90

$

24.47

$

23.82

$

23.72

Tangible Book Value per share

21.63

21.27

20.85

20.20

20.10

Return on average assets (annualized)

1.26

%

1.36

%

1.15

%

1.18

%

1.18

%

Return on average equity (annualized)

12.84

%

13.50

%

11.59

%

11.39

%

11.32

%

Return on average tangible equity (annualized)

15.02

%

15.78

%

13.63

%

13.42

%

13.46

%

Net interest spread (fte)

3.29

%

3.49

%

3.32

%

3.46

%

3.50

%

Net interest margin (fte)

3.39

%

3.61

%

3.44

%

3.59

%

3.65

%

Allowance for loan losses to total loans

1.21

%

1.17

%

1.11

%

1.02

%

0.93

%

Net charge-offs to average loans (annualized)

0.03

%

0.00

%

0.19

%

0.04

%

0.04

%

Nonperforming loans to total loans

0.05

%

0.20

%

0.28

%

0.22

%

0.24

%

Nonperforming assets to total assets

0.12

%

0.22

%

0.24

%

0.20

%

0.24

%