U.S. markets closed
  • S&P Futures

    4,166.50
    -2.50 (-0.06%)
     
  • Dow Futures

    34,270.00
    -48.00 (-0.14%)
     
  • Nasdaq Futures

    13,380.75
    -6.25 (-0.05%)
     
  • Russell 2000 Futures

    2,219.00
    -3.70 (-0.17%)
     
  • Crude Oil

    65.66
    +0.29 (+0.44%)
     
  • Gold

    1,849.40
    +11.30 (+0.61%)
     
  • Silver

    27.70
    +0.34 (+1.22%)
     
  • EUR/USD

    1.2136
    -0.0010 (-0.08%)
     
  • 10-Yr Bond

    1.6350
    -0.0330 (-1.98%)
     
  • Vix

    18.81
    -4.32 (-18.68%)
     
  • GBP/USD

    1.4082
    -0.0020 (-0.14%)
     
  • USD/JPY

    109.3550
    +0.0080 (+0.01%)
     
  • BTC-USD

    45,139.77
    -2,930.26 (-6.10%)
     
  • CMC Crypto 200

    1,251.57
    -106.99 (-7.88%)
     
  • FTSE 100

    7,043.61
    +80.28 (+1.15%)
     
  • Nikkei 225

    27,892.71
    -191.76 (-0.68%)
     

Norwood Financial Corp Announces Second Quarter Earnings

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

HONESDALE, Pa. , July 26, 2019 (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 June 30, 2019 of $3,522,000, which represents an increase from the $3,513,000 earned in the similar period of 2018. Earnings per share (fully diluted) were $0.56 in both the 2019 and 2018 periods. Annualized return on average assets for the three months ended June 30, 2019 was 1.16% with an annualized return on average equity of 10.93%. Net income for the six months ended June 30, 2019 totaled $6,712,000, which is $70,000 higher than the same six-month period of last year due primarily to improved net interest income. Earnings per share (fully diluted) for the six months ended June 30, 2019 and 2018, each totaled $1.06.

Total assets as of June 30, 2019 were $1.223 billion with loans receivable of $887.7 million, deposits of $981.2 million and stockholders’ equity of $131.5 million. Loans receivable increased $83.9 million since June 30, 2018 while total deposits increased $30.3 million.

Non-performing assets, which include non-performing loans and foreclosed assets, totaled $3.0 million and represented 0.25% of total assets as of June 30, 2019 compared to $2.7 million, or 0.23% of total assets, as of June 30, 2018. The increase was due primarily to a $291,000 increase in foreclosed real estate owned. The allowance for loan losses totaled $8,228,000 as of June 30, 2019 and represented 0.93% of total loans outstanding, compared to $8,326,000 and 1.04%, respectively, on June 30, 2018. As of June 30, 2019, the reserve for loan losses was 607% of nonperforming loans compared to 655% on June 30, 2018.

For the three months ended June 30, 2019, net interest income, on a fully taxable equivalent basis (fte), totaled $9,878,000, an increase of $394,000 compared to the similar period in 2018. An $88.1 million increase in average loans outstanding contributed to the increased income. Net interest margin (fte) for the 2019 period was 3.49%, compared to 3.54% in 2018 period. The tax-equivalent yield on interest-earning assets increased 27 basis points to 4.27% compared to the prior year while the cost of interest-bearing liabilities increased 42 basis points to 1.02%. Net interest income (fte) for the six months ended June 30, 2019 totaled $19,413,000, which was $846,000 higher than the similar period in 2018 due to the higher volume of earning assets. The net interest margin (fte) was 3.46% in the 2019 period and 3.50% during the first six months of 2018. The decrease in the net interest margin (fte) reflects the increase in the rate paid on time deposits due to the renewal of maturing certificates of deposit at market rates.

Other income for the three months ended June 30, 2019 totaled $1,641,000 compared to $1,774,000 for the similar period in 2018. The decrease can be attributed to a lower level of service charges and fees and a reduction in earnings and proceeds on bank-owned life insurance policies. Net gains from the sale of loans and securities increased $73,000. For the six months ended June 30, 2019, other income totaled $3,201,000 compared to $3,468,000 in the 2018 period. Net gains from the sale of loans and securities decreased $26,000, while earnings and proceeds on bank-owned life insurance policies decreased $144,000.

Other expenses totaled $6,785,000 for the three months ended June 30, 2019, an increase of $432,000, or 6.8%, compared to the $6,353,000 reported in the similar period of 2018. Salaries and employee benefits rose $193,000 over the same period of last year while all other expenses increased $239,000, net. For the six months ended June 30, 2019, other expenses totaled $13,433,000 compared to $12,600,000 for the similar period in 2018. The increase includes a $380,000 increase in salaries and employee benefits, while all other expenses increased $453,000, or 7.9%, net.

Mr. Critelli commented, “Our earnings for the first half of 2019 have increased over the first six months of last year. Our annualized loan growth exceeded 8.0%, operating expenses remain well controlled and our capital base remains above regulatory “well capitalized” targets. The Bank also expanded its market area into Luzerne County, Pennsylvania with the recent opening of our Hanover Township Office. We continue to search out opportunities available to us and we look forward to serving 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 twelve offices in the Southern Tier of 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 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 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 taxable equivalent basis:

Three months ended June 30

Six months ended June 30

(dollars in thousands)

2019

2018

2019

2018

Net Interest Income

$

9,612

$

9,215

$

18,882

$

18,022

Taxable equivalent basis adjustment using 21% marginal tax rate

266

269

531

545

Net interest income on a fully taxable equivalent basis

$

9,878

$

9,484

$

19,413

$

18,567

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 June 30

Six months ended June 30

(dollars in thousands)

2019

2018

2019

2018

Average equity

$

129,215

$

115,042

$

126,993

$

115,180

Average goodwill and other intangibles

(11,621

)

(11,738

)

(11,635

)

(11,755

)

Average tangible equity

$

117,594

$

103,384

$

115,358

$

103,425

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)

June 30

2019

2018

ASSETS

Cash and due from banks

$

14,207

$

15,193

Interest-bearing deposits with banks

4,265

914

Cash and cash equivalents

18,472

16,107

Securities available for sale

238,083

259,442

Loans receivable

887,673

803,773

Less: Allowance for loan losses

8,228

8,326

Net loans receivable

879,445

795,447

Regulatory stock, at cost

3,155

2,313

Bank premises and equipment, net

13,880

13,894

Bank owned life insurance

38,340

37,485

Foreclosed real estate owned

1,677

1,386

Accrued interest receivable

3,979

3,672

Goodwill

11,331

11,331

Other intangible assets

280

394

Other assets

13,886

9,122

TOTAL ASSETS

$

1,222,528

$

1,150,593

LIABILITIES

Deposits:

Non-interest bearing demand

$

221,764

$

216,472

Interest-bearing

759,460

734,417

Total deposits

981,224

950,889

Short-term borrowings

48,094

43,325

Other borrowings

44,024

30,283

Accrued interest payable

3,008

1,461

Other liabilities

14,695

9,102

TOTAL LIABILITIES

1,091,045

1,035,060

STOCKHOLDERS' EQUITY

Prefered Stock, no par value per share, authorized 5,000,000 shares

-

-

Common Stock, $.10 par value per share,

authorized: 2019: 20,000,000 shares, 2018: 10,000,000 shares

630

627

issued: 2019: 6,304,413 shares, 2018: 6,266,388shares

Surplus

48,741

47,815

Retained earnings

82,127

74,315

Treasury stock, at cost: 2019: 13,807 shares, 2018: 5,729 shares

(455

)

(188

)

Accumulated other comprehensive loss

440

(7,036

)

TOTAL STOCKHOLDERS' EQUITY

131,483

115,533

TOTAL LIABILITIES AND

STOCKHOLDERS' EQUITY

$

1,222,528

$

1,150,593

NORWOOD FINANCIAL CORP.

Consolidated Statements of Income

(dollars in thousands, except per share data)

(unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2019

2018

2019

2018

INTEREST INCOME

Loans receivable, including fees

$

10,328

$

8,857

$

20,298

$

17,344

Securities

1,435

1,536

2,876

3,060

Other

51

43

66

61

Total Interest income

11,814

10,436

23,240

20,465

INTEREST EXPENSE

Deposits

1,839

1,052

3,568

2,082

Short-term borrowings

85

38

209

90

Other borrowings

278

131

581

271

Total Interest expense

2,202

1,221

4,358

2,443

NET INTEREST INCOME

9,612

9,215

18,882

18,022

PROVISION FOR LOAN LOSSES

300

425

750

975

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

9,312

8,790

18,132

17,047

OTHER INCOME

Service charges and fees

1,052

1,101

2,083

2,082

Income from fiduciary activities

145

175

287

311

Net realized gains on sales of securities

64

58

64

200

Gains on sales of loans, net

67

-

110

-

Earnings and proceeds on life insurance policies

207

279

408

552

Other

106

161

249

323

Total other income

1,641

1,774

3,201

3,468

OTHER EXPENSES

Salaries and employee benefits

3,599

3,406

7,248

6,868

Occupancy, furniture and equipment

940

857

1,864

1,749

Data processing and related operations

472

340

920

658

Taxes, other than income

179

153

340

327

Professional fees

226

229

476

459

FDIC Insurance assessment

84

86

155

178

Foreclosed real estate

(10

)

114

13

95

Amortization of intangibles

27

33

56

68

Other

1,268

1,135

2,361

2,198

Total other expenses

6,785

6,353

13,433

12,600

INCOME BEFORE TAX

4,168

4,211

7,900

7,915

INCOME TAX EXPENSE

646

698

1,188

1,273

NET INCOME

$

3,522

$

3,513

$

6,712

$

6,642

Basic earnings per share

$

0.56

$

0.57

$

1.07

$

1.07

Diluted earnings per share

$

0.56

$

0.56

$

1.06

$

1.06

NORWOOD FINANCIAL CORP.

Financial Highlights (Unaudited)

(dollars in thousands, except per share data)

For the Three Months Ended June 30

2019

2018

Net interest income

$

9,612

$

9,215

Net income

3,522

3,513

Net interest spread (fully taxable equivalent)

3.24

%

3.40

%

Net interest margin (fully taxable equivalent)

3.49

%

3.54

%

Return on average assets

1.16

%

1.23

%

Return on average equity

10.93

%

12.25

%

Return on average tangible equity

12.01

%

13.64

%

Basic earnings per share

$

0.56

$

0.57

Diluted earnings per share

$

0.56

$

0.56

For the Six Months Ended June 30

Net interest income

$

18,882

$

18,022

Net income

6,712

6,642

Net interest spread (fully taxable equivalent)

3.22

%

3.35

%

Net interest margin (fully taxable equivalent)

3.46

%

3.50

%

Return on average assets

1.12

%

1.18

%

Return on average equity

10.66

%

11.63

%

Return on average tangible equity

11.73

%

12.95

%

Basic earnings per share

$

1.07

$

1.07

Diluted earnings per share

$

1.06

$

1.06

As of June 30

Total assets

$

1,222,528

$

1,150,593

Total loans receivable

887,673

803,773

Allowance for loan losses

8,228

8,326

Total deposits

981,224

950,889

Stockholders' equity

131,483

115,533

Trust assets under management

163,103

158,117

Book value per share

$

20.90

$

18.35

Tangible book value per share

$

19.06

$

16.47

Equity to total assets

10.76

%

10.04

%

Allowance to total loans receivable

0.93

%

1.04

%

Nonperforming loans to total loans

0.15

%

0.16

%

Nonperforming assets to total assets

0.25

%

0.23

%

NORWOOD FINANCIAL CORP.

Consolidated Balance Sheets (unaudited)

(dollars in thousands)

June 30

March 31

December 31

September 30

June 30

2019

2019

2018

2018

2018

ASSETS

Cash and due from banks

$

14,207

$

13,583

$

18,039

$

17,073

$

15,193

Interest-bearing deposits with banks

4,265

6,291

309

295

914

Cash and cash equivalents

18,472

19,874

18,348

17,368

16,107

Securities available for sale

238,083

240,621

243,277

247,517

259,442

Loans receivable

887,673

864,198

850,182

819,197

803,773

Less: Allowance for loan losses

8,228

8,349

8,452

8,280

8,326

Net loans receivable

879,445

855,849

841,730

810,917

795,447

Regulatory stock, at cost

3,155

3,132

3,926

3,261

2,313

Bank owned life insurance

38,340

38,134

37,932

37,718

37,485

Bank premises and equipment, net

13,880

14,165

13,846

13,797

13,894

Foreclosed real estate owned

1,677

1,792

1,115

1,209

1,386

Goodwill and other intangibles

11,611

11,638

11,667

11,695

11,725

Other assets

17,865

18,390

12,718

13,266

12,794

TOTAL ASSETS

$

1,222,528

$

1,203,595

$

1,184,559

$

1,156,748

$

1,150,593

LIABILITIES

Deposits:

Non-interest bearing demand

$

221,764

$

206,806

$

201,457

$

218,979

$

216,472

Interest-bearing deposits

759,460

767,609

745,323

720,735

734,417

Total deposits

981,224

974,415

946,780

939,714

950,889

Borrowings

92,118

85,779

105,330

89,469

73,608

Other liabilities

17,703

16,629

10,164

10,885

10,563

TOTAL LIABILITIES

1,091,045

1,076,823

1,062,274

1,040,068

1,035,060

STOCKHOLDERS' EQUITY

131,483

126,772

122,285

116,680

115,533

TOTAL LIABILITIES AND

STOCKHOLDERS' EQUITY

$

1,222,528

$

1,203,595

$

1,184,559

$

1,156,748

$

1,150,593

NORWOOD FINANCIAL CORP.

Consolidated Statements of Income (unaudited)

(dollars in thousands, except per share data)

June 30

March 31

December 31

September 30

June 30

Three months ended

2019

2019

2018

2018

2018

INTEREST INCOME

Loans receivable, including fees

$

10,328

$

9,970

$

9,759

$

9,301

$

8,857

Securities

1,435

1,441

1,476

1,483

1,536

Other

51

15

10

2

43

Total interest income

11,814

11,426

11,245

10,786

10,436

INTEREST EXPENSE

Deposits

1,839

1,729

1,446

1,116

1,052

Borrowings

363

426

370

282

169

Total interest expense

2,202

2,155

1,816

1,398

1,221

NET INTEREST INCOME

9,612

9,271

9,429

9,388

9,215

PROVISION FOR LOAN LOSSES

300

450

375

375

425

NET INTEREST INCOME AFTER PROVISION

FOR LOAN LOSSES

9,312

8,821

9,054

9,013

8,790

OTHER INCOME

Service charges and fees

1,052

1,031

1,085

1,129

1,101

Income from fiduciary activities

145

142

126

151

175

Net realized gains on sales of securities

64

-

-

13

58

Gains on sales of loans, net

67

42

-

15

-

Earnings and proceeds on life insurance policies

207

202

277

297

279

Other

106

143

112

392

161

Total other income

1,641

1,560

1,600

1,997

1,774

OTHER EXPENSES

Salaries and employee benefits

3,599

3,649

3,575

3,577

3,406

Occupancy, furniture and equipment, net

940

924

1,036

910

857

Foreclosed real estate

(10

)

23

104

(26

)

114

FDIC insurance assessment

84

71

83

87

86

Other

2,172

1,981

2,005

2,024

1,890

Total other expenses

6,785

6,648

6,803

6,572

6,353

INCOME BEFORE TAX

4,168

3,733

3,851

4,438

4,211

INCOME TAX EXPENSE

646

543

552

728

698

NET INCOME

$

3,522

$

3,190

$

3,299

$

3,710

$

3,513

Basic earnings per share

$

0.56

$

0.51

$

0.53

$

0.59

$

0.57

Diluted earnings per share

$

0.56

$

0.51

$

0.53

$

0.58

$

0.56

Book Value per share

$

20.90

$

20.16

$

19.43

$

18.49

$

18.35

Tangible Book Value per share

19.06

18.31

17.58

16.62

16.47

Return on average assets (annualized)

1.16

%

1.09

%

1.12

%

1.28

%

1.23

%

Return on average equity (annualized)

10.93

%

10.37

%

11.02

%

12.55

%

12.25

%

Return on average tangible equity (annualized)

12.01

%

11.44

%

12.23

%

13.94

%

13.64

%

Net interest spread (fte)

3.24

%

3.20

%

3.33

%

3.40

%

3.40

%

Net interest margin (fte)

3.49

%

3.43

%

3.54

%

3.57

%

3.54

%

Allowance for loan losses to total loans

0.93

%

0.97

%

0.99

%

1.01

%

1.04

%

Net charge-offs to average loans (annualized)

0.19

%

0.26

%

0.10

%

0.21

%

0.10

%

Nonperforming loans to total loans

0.15

%

0.13

%

0.13

%

0.14

%

0.16

%

Nonperforming assets to total assets

0.25

%

0.24

%

0.19

%

0.20

%

0.23

%

total NAL (net of specific credit mark)

1,354,667

1,097,440

1,140,442

1,114,599

1,270,967

past due 90+

-

-

-

-

-

total non performing loans

1,354,667

1,097,440

1,140,442

1,114,599

1,270,967

OREO

1,677,000

1,791,675

1,115,494

1,208,943

1,386,315

total Non performing assets

3,031,667

2,889,115

2,255,936

2,323,542

2,657,282

total loans

887,672,717

864,197,793

850,181,654

819,196,863

803,772,975

total assets

1,222,529,298

1,203,594,916

1,184,559,213

1,156,748,475

1,150,592,577

net charge off's, this quarter

420,911

553,355

203,024

420,863

197,931

average loans, this quarter

876,117,767

857,437,767

834,360,524

813,091,861

788,025,551

Loan loss reserve

8,228,078

8,348,989

8,452,344

8,280,368

8,326,231

.

.