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Norwood Financial Corp Announces Second Quarter Earnings

Norwood Financial Corp.

HONESDALE, Pa., July 22, 2020 (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, 2020 of $1,488,000, which was $2,034,000 lower than the similar period of last year due to increased loan loss provisions and $1,597,000 of expenses related to the acquisition of UpState New York Bancorp, Inc. (“UpState”) which closed on July 7, 2020.  Earnings per share (fully diluted) were $0.24 in the 2020 compared to $0.56 in the same period of last year.  Annualized return on average assets for the three months ended June 30, 2020 was 0.45% with an annualized return on average equity of 4.17%.  Net income for the six months ended June 30, 2020 totaled $4,567,000, which is $2,145,000 lower than the same six-month period of last year due primarily to increased loan loss provisions and merger related expenses.  Earnings per share (fully diluted) for the six months ended June 30, 2020 were $0.73 compared to $1.06 in the 2019 period.

Total assets as of June 30, 2020 were $1.355 billion, with loans receivable of $988.7 million, deposits of $1.086 billion and stockholders’ equity of $142.7 million.  Loans receivable increased $101.0 million since June 30, 2019, while total deposits increased $105.0 million.  The increase in loans includes $67.3 million of Paycheck Protection Program (“PPP”) loans, while the increase in deposits also includes significant stimulus funds resulting from the PPP and CARES Act.

Non-performing assets, which include non-performing loans and foreclosed assets, totaled $3.9 million and represented 0.29% of total assets as of June 30, 2020 compared to $3.0 million, or 0.25% of total assets, as of June 30, 2019.  The allowance for loan losses totaled $10,312,000 as of June 30, 2020 and represented 1.04% of total loans outstanding, compared to $8,228,000 and 0.93%, respectively, on June 30, 2019.  

For the three months ended June 30, 2020, net interest income, on a fully-taxable equivalent basis (fte), totaled $10,088,000, an increase of $210,000 compared to the similar period in 2019.  A $101.2 million increase in average loans outstanding contributed to the increased income.  Net interest margin (fte) for the 2020 period was 3.25%, compared to 3.49% in 2019 period.  The tax-equivalent yield on interest-earning assets decreased 38 basis points to 3.89% compared to the prior year while the cost of interest-bearing liabilities decreased 16 basis points to 0.86%.  Net interest income (fte) for the six months ended June 30, 2020 totaled $19,991,000, which was $578,000 higher than the similar period in 2019 due to the higher volume of earning assets.  The net interest margin (fte) was 3.36% in the 2020 period and 3.46% during the first six months of 2019.  The decrease in the net interest margin (fte) reflects the growth in PPP loans and the reduced net interest spread earned due to the 1.00% interest rate on these loans.

Other income for the three months ended June 30, 2020 totaled $1,392,000 compared to $1,641,000 for the similar period in 2019.  The decrease can be attributed to a lower level of service charges and fees due to accommodations made to customers as a result of the COVID-19 pandemic.   For the six months ended June 30, 2020, other income totaled $3,047,000 compared to $3,201,000 in the 2019 period.  Service charges on deposits and fees on loans decreased $182,000, net,  due to accommodations made to customers as a result of the COVID-19 pandemic. 

Other expenses totaled $8,092,000 for the three months ended June 30, 2020, an increase of $1,307,000 compared to the $6,785,000 reported in the similar period of 2019 due primarily to merger related expenses of $1,597,000.  For the six months ended June 30, 2020, other expenses totaled $15,152,000 compared to $13,433,000 for the similar period in 2019.  The increase includes the $1,597,000 of merger related expenses.

Mr. Critelli commented, “Our results for the first half of 2020 have been significantly impacted by our efforts to assist our customers during the COVID-19 pandemic, restrictions on business activity and the costs associated with our acquisition of UpState New York Bancorp, Inc.  Our balance sheet reflects our success providing small business customers with PPP loans and other economic stimulus that has been provided”. Mr. Critelli further commented, “We are pleased to announce the completion of the merger on July 7th and to welcome Upstate’s shareholders to Norwood and the employees to Wayne Bank.  We also look forward to serving the customers of Bank of the Finger Lakes and Bank of Cooperstown.  We continue to search out 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 fifteen 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 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:

 

 

Three months ended
June 30

Six months ended
June 30

(dollars in thousands)

 

 

2020

 

 

  2019

 

 

2020

 

 

2019

 

 

 

 

 

 

 

Net Interest Income

 

$

9,867

 

$

9,612

 

$

19,532

 

$

18,882

 

Taxable equivalent basis adjustment  using 21% marginal tax rate

 

 

 221

 

 

266

 

 

459

 

 

531

 

Net interest income on a fully taxable  equivalent basis

 

$

10,088

 

$

9,878

 

$

19,991

 

$

19,413

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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)

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

 

 

 

 

Average equity

 

$

143,472

 

$

129,215

 

$

142,217

 

$

126,993

 

 

 

 

 

 

 

Average goodwill and other intangibles

 

 

(11,530

)

 

(11,621

)

 

(11,541

)

 

(11,635

)

Average tangible equity 

 

$

131,942

 

$

117,594

 

$

130,676

 

$

115,358

 

 

 

 

 

 

 

 

 

 

 

 

 


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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Cash and due from banks

 $

15,387

 

 $

14,207

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Interest-bearing deposits with banks

 

67,989

 

 

4,265

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Cash and cash equivalents

 

83,376

 

 

18,472

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Securities available for sale

 

196,735

 

 

238,083

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Loans receivable

 

988,679

 

 

887,673

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Less: Allowance for loan losses

 

10,312

 

 

8,228

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Net loans receivable

 

978,367

 

 

879,445

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Regulatory stock, at cost

 

3,677

 

 

3,155

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Bank premises and equipment, net

 

14,040

 

 

13,880

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Bank owned life insurance

 

39,183

 

 

38,340

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Foreclosed real estate owned

 

965

 

 

1,677

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Accrued interest receivable

 

4,383

 

 

3,979

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Goodwill

 

11,331

 

 

11,331

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Other intangible assets

 

191

 

 

280

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Other assets

 

22,293

 

 

13,886

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  TOTAL ASSETS

 $

1,354,541

 

 $

1,222,528

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Non-interest bearing demand

 $

284,754

 

 $

221,764

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Interest-bearing

 

801,484

 

 

759,460

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Total deposits

 

1,086,238

 

 

981,224

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Short-term borrowings

 

55,204

 

 

48,094

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Other borrowings

 

50,823

 

 

44,024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Accrued interest payable

 

2,826

 

 

3,008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Other liabilities

 

16,786

 

 

14,695

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  TOTAL LIABILITIES

 

1,211,877

 

 

1,091,045

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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: 2020: 6,342,568 shares, 2019: 6,304,413 shares

 

634

 

 

630

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Surplus

 

49,778

 

 

48,741

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Retained earnings

 

87,939

 

 

82,127

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Treasury stock, at cost: 2020: 13,778 shares, 2019: 13,807 shares

 

(469

)

 

(455

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Accumulated other comprehensive income

 

4,782

 

 

440

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  TOTAL STOCKHOLDERS' EQUITY

 

142,664

 

 

131,483

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  TOTAL LIABILITIES AND

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  STOCKHOLDERS' EQUITY

 $

1,354,541

 

 $

1,222,528

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2020

 

 

2019

 

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Loans receivable, including fees

$

10,767

 

$

10,328

 

 

 

$

21,450

 

$

20,298

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Securities

 

1,063

 

 

1,435

 

 

 

 

2,242

 

 

2,876

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Other

 

19

 

 

51

 

 

 

 

25

 

 

66

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Total Interest income

 

11,849

 

 

11,814

 

 

 

 

23,717

 

 

23,240

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Deposits

 

1,630

 

 

1,839

 

 

 

 

3,420

 

 

3,568

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Short-term borrowings

 

73

 

 

85

 

 

 

 

184

 

 

209

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Other borrowings

 

279

 

 

278

 

 

 

 

581

 

 

581

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Total Interest expense

 

1,982

 

 

2,202

 

 

 

 

4,185

 

 

4,358

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INTEREST INCOME

 

9,867

 

 

9,612

 

 

 

 

19,532

 

 

18,882

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PROVISION FOR LOAN LOSSES

 

1,300

 

 

300

 

 

 

 

2,000

 

 

750

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

8,567

 

 

9,312

 

 

 

 

17,532

 

 

18,132

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Service charges and fees

 

837

 

 

1,052

 

 

 

 

1,901

 

 

2,083

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Income from fiduciary activities

 

175

 

 

145

 

 

 

 

328

 

 

287

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Net realized gains on sales of securities

 

-

 

 

64

 

 

 

 

38

 

 

64

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Gains on sales of loans, net

 

65

 

 

67

 

 

 

 

121

 

 

110

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Earnings and proceeds on life insurance policies

 

212

 

 

207

 

 

 

 

420

 

 

408

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Other

 

103

 

 

106

 

 

 

 

239

 

 

249

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Total other income

 

1,392

 

 

1,641

 

 

 

 

3,047

 

 

3,201

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Salaries and employee benefits

 

3,289

 

 

3,599

 

 

 

 

7,065

 

 

7,248

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Occupancy, furniture and equipment

 

906

 

 

940

 

 

 

 

1,875

 

 

1,864

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Data processing and related operations

 

466

 

 

472

 

 

 

 

903

 

 

920

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Taxes, other than income

 

214

 

 

179

 

 

 

 

427

 

 

340

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Professional fees

 

225

 

 

226

 

 

 

 

443

 

 

476

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  FDIC Insurance assessment

 

42

 

 

84

 

 

 

 

42

 

 

155

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Foreclosed real estate

 

(2

)

 

(10

)

 

 

 

14

 

 

13

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Amortization of intangibles

 

21

 

 

27

 

 

 

 

44

 

 

56

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Merger related

 

1,597

 

 

-

 

 

 

 

1,597

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Other

 

1,334

 

 

1,268

 

 

 

 

2,742

 

 

2,361

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Total other expenses

 

8,092

 

 

6,785

 

 

 

 

15,152

 

 

13,433

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME BEFORE TAX

 

1,867

 

 

4,168

 

 

 

 

5,427

 

 

7,900

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME TAX EXPENSE

 

379

 

 

646

 

 

 

 

860

 

 

1,188

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME

 $

1,488

 

 $

3,522

 

 

 

 $

4,567

 

 $

6,712

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

$

0.24

 

$

0.56

 

 

 

$

0.73

 

$

1.07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

$

0.24

 

$

0.56

 

 

 

$

0.73

 

$

1.06

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NORWOOD FINANCIAL CORP. 

Financial Highlights (Unaudited) 

(dollars in thousands, except per share data) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended June 30

 

2020 

 

2019 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 $

9,867

 

 $

9,612

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

1,488

 

 

3,522

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest spread (fully taxable equivalent)

 

3.03

%

 

3.24

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin (fully taxable equivalent)

 

3.25

%

 

3.49

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

0.45

%

 

1.16

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average equity

 

4.17

%

 

10.93

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average tangible equity

 

4.54

%

 

12.01

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 $

0.24

 

 $

0.56

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 $

0.24

 

 $

0.56

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended June 30

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 $

19,532

 

 $

18,882

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

4,567

 

 

6,712

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest spread (fully taxable equivalent)

 

3.12

%

 

3.22

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin (fully taxable equivalent)

 

3.36

%

 

3.46

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

0.72

%

 

1.12

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average equity

 

6.46

%

 

10.66

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average tangible equity

 

7.03

%

 

11.73

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 $

0.73

 

 $

1.07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 $

0.73

 

 $

1.06

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of June 30

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 $

1,354,541

 

 $

1,222,528

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans receivable

 

988,679

 

 

887,673

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses

 

10,312

 

 

8,228

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total deposits

 

1,086,238

 

 

981,224

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

142,664

 

 

131,483

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trust assets under management

 

149,535

 

 

163,103

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share

 $

22.62

 

 $

20.90

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible book value per share

 $

20.80

 

 $

19.06

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity to total assets

 

10.53

%

 

10.76

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance to total loans receivable

 

1.04

%

 

0.93

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming loans to total loans

 

0.30

%

 

0.15

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets to total assets

 

0.29

%

 

0.25

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NORWOOD FINANCIAL CORP. 

Consolidated Balance Sheets (unaudited) 

(dollars in thousands) 

 

 

June 30

 

  March 31

 

  December 31

 

  September 30

  June 30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2020 

 

2020 

 

2019 

 

2019 

 

2019 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Cash and due from banks

 $

15,387

 

 $

14,712

 

 $

15,038

 

 $

20,067

 

 $

14,207

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Interest-bearing deposits with banks

 

67,989

 

 

23,706

 

 

377

 

 

848

 

 

4,265

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Cash and cash equivalents

 

83,376

 

 

38,418

 

 

15,415

 

 

20,915

 

 

18,472

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Securities available for sale

 

196,735

 

 

196,998

 

 

210,205

 

 

211,199

 

 

238,083

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Loans receivable

 

988,679

 

 

928,565

 

 

924,581

 

 

905,582

 

 

887,673

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Less: Allowance for loan losses

 

10,312

 

 

9,088

 

 

8,509

 

 

8,405

 

 

8,228

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Net loans receivable

 

978,367

 

 

919,477

 

 

916,072

 

 

897,177

 

 

879,445

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Regulatory stock, at cost

 

3,677

 

 

3,770

 

 

4,844

 

 

3,137

 

 

3,155

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Bank owned life insurance

 

39,183

 

 

38,971

 

 

38,763

 

 

38,562

 

 

38,340

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Bank premises and equipment, net

 

14,040

 

 

14,071

 

 

14,228

 

 

13,927

 

 

13,880

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Foreclosed real estate owned

 

965

 

 

1,077

 

 

1,556

 

 

1,572

 

 

1,677

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Goodwill and other intangibles

 

11,522

 

 

11,543

 

 

11,566

 

 

11,588

 

 

11,611

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Other assets

 

26,676

 

 

17,966

 

 

17,961

 

 

17,779

 

 

17,865

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  TOTAL ASSETS

 $

1,354,541

 

 $

1,242,291

 

 $

1,230,610

 

 $

1,215,856

 

 $

1,222,528

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Non-interest bearing demand

 $

284,754

 

 $

213,359

 

 $

207,299

 

 $

231,211

 

 $

221,764

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Interest-bearing deposits

 

801,484

 

 

776,801

 

 

750,230

 

 

743,222

 

 

759,460

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Total deposits

 

1,086,238

 

 

990,160

 

 

957,529

 

 

974,433

 

 

981,224

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Borrowings

 

106,027

 

 

92,006

 

 

118,694

 

 

88,684

 

 

92,118

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Other liabilities

 

19,612

 

 

17,938

 

 

16,959

 

 

17,845

 

 

17,703

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  TOTAL LIABILITIES

 

1,211,877

 

 

1,100,104

 

 

1,093,182

 

 

1,080,962

 

 

1,091,045

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY

 

142,664

 

 

142,187

 

 

137,428

 

 

134,894

 

 

131,483

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  TOTAL LIABILITIES AND

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  STOCKHOLDERS' EQUITY

 $

1,354,541

 

 $

1,242,291

 

 $

1,230,610

 

 $

1,215,856

 

 $

1,222,528

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

2020 

 

2020 

 

2019 

 

2019 

2019 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Loans receivable, including fees

 $

10,767

 

 $

10,683

 

 $

10,815

 

 $

10,776

 

 $

10,328

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Securities

 

1,063

 

 

1,179

 

 

1,159

 

 

1,278

 

 

1,435

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Other

 

19

 

 

6

 

 

11

 

 

5

 

 

51

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Total interest income

 

11,849

 

 

11,868

 

 

11,985

 

 

12,059

 

 

11,814

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Deposits

 

1,630

 

 

1,790

 

 

1,784

 

 

1,787

 

 

1,839

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Borrowings

 

352

 

 

413

 

 

368

 

 

381

 

 

363

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Total interest expense

 

1,982

 

 

2,203

 

 

2,152

 

 

2,168

 

 

2,202

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INTEREST INCOME

 

9,867

 

 

9,665

 

 

9,833

 

 

9,891

 

 

9,612

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PROVISION FOR LOAN LOSSES

 

1,300

 

 

700

 

 

200

 

 

300

 

 

300

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INTEREST INCOME AFTER PROVISION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  FOR LOAN LOSSES

 

8,567

 

 

8,965

 

 

9,633

 

 

9,591

 

 

9,312

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Service charges and fees

 

837

 

 

1,063

 

 

1,168

 

 

1,200

 

 

1,052

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Income from fiduciary activities

 

175

 

 

153

 

 

156

 

 

167

 

 

145

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Net realized gains on sales of securities

 

-

 

 

38

 

 

21

 

 

169

 

 

64

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Gains on sales of loans, net

 

65

 

 

56

 

 

44

 

 

15

 

 

67

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Earnings and proceeds on life insurance policies

 

212

 

 

208

 

 

200

 

 

222

 

 

207

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Other

 

103

 

 

136

 

 

107

 

 

109

 

 

106

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Total other income

 

1,392

 

 

1,654

 

 

1,696

 

 

1,882

 

 

1,641

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Salaries and employee benefits

 

3,289

 

 

3,777

 

 

3,740

 

 

3,667

 

 

3,599

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Occupancy, furniture and equipment, net

 

906

 

 

968

 

 

938

 

 

916

 

 

940

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Foreclosed real estate

 

(2

)

 

16

 

 

9

 

 

24

 

 

(10

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  FDIC insurance assessment

 

42

 

 

-

 

 

3

 

 

(5

)

 

84

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Merger related

 

1,597

 

 

-

 

 

-

 

 

-

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Other

 

2,260

 

 

2,298

 

 

2,398

 

 

2,189

 

 

2,172

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Total other expenses

 

8,092

 

 

7,059

 

 

7,088

 

 

6,791

 

 

6,785

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME BEFORE TAX

 

1,867

 

 

3,560

 

 

4,241

 

 

4,682

 

 

4,168

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME TAX EXPENSE

 

379

 

 

481

 

 

645

 

 

775

 

 

646

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME

 $

1,488

 

 $

3,079

 

 $

3,596

 

 $

3,907

 

 $

3,522

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 $

0.24

 

 $

0.49

 

 $

0.57

 

 $

0.62

 

 $

0.56

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 $

0.24

 

 $

0.49

 

 $

0.57

 

 $

0.62

 

 $

0.56

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book Value per share

$

22.62

 

$

22.52

 

$

21.67

 

$

21.41

 

$

20.90

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible Book Value per share

 

20.80

 

 

20.70

 

 

19.84

 

 

19.57

 

 

19.06

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (annualized)

 

0.45

%

 

1.01

%

 

1.18

%

 

1.27

%

 

1.16

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average equity (annualized)

 

4.17

%

 

8.79

%

 

10.42

%

 

11.56

%

 

10.93

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average tangible equity (annualized)

 

4.54

%

 

9.57

%

 

11.38

%

 

12.66

%

 

12.01

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest spread (fte)

 

3.03

%

 

3.23

%

 

3.33

%

 

3.35

%

 

3.24

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin (fte)

 

3.25

%

 

3.48

%

 

3.59

%

 

3.60

%

 

3.49

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses to total loans

 

1.04

%

 

0.98

%

 

0.92

%

 

0.93

%

 

0.93

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net charge-offs to average loans (annualized)

 

0.03

%

 

0.05

%

 

0.04

%

 

0.05

%

 

0.19

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming loans to total loans

 

0.30

%

 

0.30

%

 

0.09

%

 

0.15

%

 

0.15

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets to total assets

 

0.29

%

 

0.31

%

 

0.19

%

 

0.24

%

 

0.25

%