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Norwood Financial Corp Announces First Quarter Earnings
来源: Nasdaq GlobeNewswire / 18 4月 2022 08:15:00 America/New_York
HONESDALE, Pa., April 18, 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 record earnings of $7,128,000 for the three months ended March 31, 2022, an increase of 28.6% from the $5,542,000 earned during the corresponding period of 2021. The increase includes a $1,200,000 decrease in the provision for loan losses and a $1,349,000 increase in other income. Earnings per share on a fully diluted basis were $0.87 for the three-month period ended March 31, 2022, compared to $0.67 in the three-month period ended March 31, 2021. The annualized return on average assets was 1.39% in the first quarter of 2022 and the annualized return on average equity was 14.22%, compared to 1.18% and 11.39%, respectively, in the first quarter of 2021.
Total assets were $2.078 billion as of March 31, 2022, an increase of $67.9 million compared to March 31, 2021. As of March 31, 2022, loans totaled $1.372 billion, with deposits of $1.782 billion and stockholders’ equity of $186.8 million.
Net interest income on a fully taxable equivalent basis (fte), was $16,283,000 during the three months ended March 31, 2022, which is $302,000 higher than the comparable three-month period of 2021. A $193.4 million increase in average securities available for sale over the corresponding period in 2021 contributed to the increased interest income. During the three-months ended March 31, 2022, the fte yield on interest-earning assets decreased thirty-six basis points compared to the three months ended March 31, 2021, while the cost of funds decreased twelve basis points. As a result, the annualized net interest spread (fte) decreased to 3.22% from 3.46% in the quarter ended March 31, 2022 compared to the corresponding three-month period in 2021. A $378,000 reduction in loan origination fees recognized on Paycheck Protection Program (“PPP”) loans compared to the three months ended March 31, 2021, contributed to the reduced net interest spread (fte).
Other income totaled $3,338,000 for the three months ended March 31, 2022, compared to $1,992,000 during the corresponding period of last year. The increase is due primarily to $875,000 of income recognized on previously acquired purchased impaired loans that were carried at a discount, and a $427,000 gain on the sale of a property carried in Foreclosed Real Estate Owned. All other categories of other income increased $44,000, net.
Operating expenses totaled $10,157,000 in the three months ended March 31, 2022, and were $705,000, or 7.5%, higher than the $9,452,000 recorded in the same period of last year.
Mr. Critelli stated, “Our first quarter results provide a good start for 2022 and exceed our budget level. Total loans increased 7.7% annually during the quarter after excluding the impact of loan forgiveness related to PPP loans. Our total deposits increased 5.7% annually during the quarter, our core operating expenses remain well-controlled, and our capital base remains above “Well-Capitalized” targets. Additionally, our credit quality metrics continued to improve during the first quarter, which we believe should benefit future results. 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 trades on the Nasdaq Global Market under the symbol “NWFL”.
Forward-Looking Statements.
The Private Securities Litigation Reform Act of 1995 contains safe harbor provisions regarding forward-looking statements. When used in this discussion, the words “believes”, “anticipates”, “contemplates”, “expects”, and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from those projected. Those risks and uncertainties include changes in federal and state laws, changes in interest rates, the risks and uncertainty posed by, and the effect and impact of, the COVID-19 pandemic on the economy and the Company’s results of 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 taxable 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 taxable equivalent basis:
(dollars in thousands) Three months ended March 31, 2022 2021 Net interest income $16,101 $15,776 Tax equivalent basis adjustment using 21% marginal tax rate 182 205 Net interest income on a fully taxable equivalent basis $16,283 $15,981 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:
(dollars in thousands) Three months ended March 31, 2022 2021 Average equity $203,260 $197,243 Average goodwill and other intangibles (29,656 ) (29,798 ) Average tangible equity $173,604 $167,445 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) March 31 2022 2021 ASSETS Cash and due from banks $ 22,394 $ 20,364 Interest-bearing deposits with banks 143,632 190,135 Cash and cash equivalents 166,026 210,499 Securities available for sale 434,924 275,224 Loans receivable 1,371,645 1,421,568 Less: Allowance for loan losses 16,660 14,509 Net loans receivable 1,354,985 1,407,059 Regulatory stock, at cost 3,423 4,043 Bank premises and equipment, net 17,022 17,648 Bank owned life insurance 40,215 39,471 Foreclosed real estate owned 590 844 Accrued interest receivable 5,876 6,317 Goodwill 29,266 29,290 Other intangible assets 380 495 Other assets 24,991 18,946 TOTAL ASSETS $ 2,077,698 $ 2,009,836 LIABILITIES Deposits: Non-interest bearing demand $ 438,979 $ 415,395 Interest-bearing 1,342,798 1,269,793 Total deposits 1,781,777 1,685,188 Short-term borrowings 63,622 72,917 Other borrowings 26,844 39,366 Accrued interest payable 1,160 1,370 Other liabilities 17,489 15,888 TOTAL LIABILITIES 1,890,892 1,814,729 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: 8,268,401 shares, 2021: 8,240,081 shares 827 824 Surplus 96,619 95,717 Retained earnings 114,845 97,201 Treasury stock, at cost: 2022: 65,089 shares, 2021: 21,568 shares (1,760 ) (656 ) Accumulated other comprehensive (loss) income (23,725 ) 2,021 TOTAL STOCKHOLDERS' EQUITY 186,806 195,107 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,077,698 $ 2,009,836 NORWOOD FINANCIAL CORP. Consolidated Statements of Income (dollars in thousands, except per share data) (unaudited) Three Months Ended March 31, 2022 2021 INTEREST INCOME Loans receivable, including fees $ 15,375 $ 16,146 Securities 1,894 1,112 Other 78 43 Total Interest income 17,347 17,301 INTEREST EXPENSE Deposits 1,059 1,255 Short-term borrowings 48 69 Other borrowings 139 201 Total Interest expense 1,246 1,525 NET INTEREST INCOME 16,101 15,776 PROVISION FOR LOAN LOSSES 300 1,500 NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 15,801 14,276 OTHER INCOME Service charges and fees 1,470 1,247 Income from fiduciary activities 202 160 Net realized gains on sales of securities - 21 Gains on sales of loans, net - 29 Gains on sales of foreclosed real estate owned 427 3 Earnings and proceeds on life insurance policies 176 374 Other 1,063 158 Total other income 3,338 1,992 OTHER EXPENSES Salaries and employee benefits 5,431 4,953 Occupancy, furniture and equipment 1,307 1,220 Data processing and related operations 628 603 Taxes, other than income 294 305 Professional fees 575 540 FDIC Insurance assessment 183 181 Foreclosed real estate 53 33 Amortization of intangibles 27 35 Other 1,659 1,585 Total other expenses 10,157 9,455 INCOME BEFORE TAX 8,982 6,813 INCOME TAX EXPENSE 1,854 1,271 NET INCOME $ 7,128 $ 5,542 Basic earnings per share $ 0.87 $ 0.68 Diluted earnings per share $ 0.87 $ 0.67 NORWOOD FINANCIAL CORP. Financial Highlights (Unaudited) (dollars in thousands, except per share data) For the Three Months Ended March 31 2022 2021 Net interest income $ 16,101 $ 15,776 Net income 7,128 5,542 Net interest spread (fully taxable equivalent) 3.22 % 3.46 % Net interest margin (fully taxable equivalent) 3.32 % 3.59 % Return on average assets 1.39 % 1.18 % Return on average equity 14.22 % 11.39 % Return on average tangible equity 16.65 % 13.42 % Basic earnings per share $ 0.87 $ 0.68 Diluted earnings per share $ 0.87 $ 0.67 As of March 31 2022 2021 Total assets $ 2,077,698 $ 2,009,836 Total loans receivable 1,371,645 1,421,568 Allowance for loan losses 16,660 14,509 Total deposits 1,781,777 1,685,188 Stockholders' equity 186,806 195,107 Trust assets under management 190,144 173,263 Book value per share $ 22.99 $ 23.82 Tangible book value per share $ 19.37 $ 20.20 Equity to total assets 8.99 % 9.71 % Allowance to total loans receivable 1.21 % 1.02 % Nonperforming loans to total loans 0.05 % 0.22 % Nonperforming assets to total assets 0.06 % 0.20 % NORWOOD FINANCIAL CORP. Consolidated Balance Sheets (unaudited) (dollars in thousands) March 31 December 31 September 30 June 30 March 31 2022 2021 2021 2021 2021 ASSETS Cash and due from banks $ 22,394 $ 21,073 $ 28,353 $ 34,831 $ 20,364 Interest-bearing deposits with banks 143,632 185,608 191,580 170,342 190,135 Cash and cash equivalents 166,026 206,681 219,933 205,173 210,499 Securities available for sale 434,924 406,782 361,988 333,636 275,224 Loans receivable 1,371,645 1,354,931 1,371,002 1,386,654 1,421,568 Less: Allowance for loan losses 16,660 16,442 16,103 15,340 14,509 Net loans receivable 1,354,985 1,338,489 1,354,899 1,371,314 1,407,059 Regulatory stock, at cost 3,423 3,927 3,898 4,084 4,043 Bank owned life insurance 40,215 40,038 39,864 39,665 39,471 Bank premises and equipment, net 17,022 17,289 17,364 17,298 17,648 Foreclosed real estate owned 590 1,742 1,876 844 844 Goodwill and other intangibles 29,646 29,673 29,700 29,727 29,785 Other assets 30,867 23,883 24,169 23,823 25,263 TOTAL ASSETS $ 2,077,698 $ 2,068,504 $ 2,053,691 $ 2,025,564 $ 2,009,836 LIABILITIES Deposits: Non-interest bearing demand $ 438,979 $ 440,652 $ 442,534 $ 435,824 $ 415,395 Interest-bearing deposits 1,342,798 1,316,141 1,279,988 1,253,117 1,269,793 Total deposits 1,781,777 1,756,793 1,722,522 1,688,941 1,685,188 Borrowings 90,466 90,820 111,382 119,858 112,283 Other liabilities 18,649 15,629 17,179 16,266 17,258 TOTAL LIABILITIES 1,890,892 1,863,242 1,851,083 1,825,065 1,814,729 STOCKHOLDERS' EQUITY 186,806 205,262 202,608 200,499 195,107 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,077,698 $ 2,068,504 $ 2,053,691 $ 2,025,564 $ 2,009,836 NORWOOD FINANCIAL CORP. Consolidated Statements of Income (unaudited) (dollars in thousands, except per share data) March 31 December 31 September 30 June 30 March 31 Three months ended 2022 2021 2021 2021 2021 INTEREST INCOME Loans receivable, including fees $ 15,375 $ 16,149 $ 16,859 $ 16,102 $ 16,146 Securities 1,894 1,612 1,468 1,356 1,112 Other 78 92 72 59 43 Total interest income 17,347 17,853 18,399 17,517 17,301 INTEREST EXPENSE Deposits 1,059 1,130 1,167 1,205 1,255 Borrowings 187 227 243 259 270 Total interest expense 1,246 1,357 1,410 1,464 1,525 NET INTEREST INCOME 16,101 16,496 16,989 16,053 15,776 PROVISION FOR LOAN LOSSES 300 450 750 1,500 1,500 NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 15,801 16,046 16,239 14,553 14,276 OTHER INCOME Service charges and fees 1,470 1,425 1,485 1,532 1,247 Income from fiduciary activities 202 198 209 181 160 Net realized gains on sales of securities - 36 35 - 21 Gains on sales of loans, net - - 39 109 29 Gains on sales of foreclosed real estate owned 427 - 31 2 3 Earnings and proceeds on life insurance policies 176 174 200 194 374 Other 1,063 188 160 171 158 Total other income 3,338 2,021 2,159 2,189 1,992 OTHER EXPENSES Salaries and employee benefits 5,431 4,992 5,491 5,171 4,953 Occupancy, furniture and equipment, net 1,307 1,254 1,163 1,186 1,220 Foreclosed real estate 53 88 16 15 33 FDIC insurance assessment 183 169 177 154 181 Other 3,183 3,539 2,776 2,968 3,068 Total other expenses 10,157 10,042 9,623 9,494 9,455 INCOME BEFORE TAX 8,982 8,025 8,775 7,248 6,813 INCOME TAX EXPENSE 1,854 1,387 1,794 1,493 1,271 NET INCOME $ 7,128 $ 6,638 $ 6,981 $ 5,755 $ 5,542 Basic earnings per share $ 0.87 $ 0.81 $ 0.85 $ 0.70 $ 0.68 Diluted earnings per share $ 0.87 $ 0.81 $ 0.85 $ 0.70 $ 0.67 Book Value per share $ 22.99 $ 25.24 $ 24.90 $ 24.47 $ 23.82 Tangible Book Value per share 19.37 21.63 21.27 20.85 20.20 Return on average assets (annualized) 1.39 % 1.26 % 1.36 % 1.15 % 1.18 % Return on average equity (annualized) 14.22 % 12.84 % 13.50 % 11.59 % 11.39 % Return on average tangible equity (annualized) 16.65 % 15.02 % 15.78 % 13.63 % 13.42 % Net interest spread (fte) 3.22 % 3.29 % 3.49 % 3.32 % 3.46 % Net interest margin (fte) 3.32 % 3.39 % 3.61 % 3.44 % 3.59 % Allowance for loan losses to total loans 1.21 % 1.21 % 1.17 % 1.11 % 1.02 % Net charge-offs to average loans (annualized) 0.02 % 0.03 % -0.00 % 0.19 % 0.04 % Nonperforming loans to total loans 0.05 % 0.05 % 0.20 % 0.28 % 0.22 % Nonperforming assets to total assets 0.06 % 0.12 % 0.22 % 0.24 % 0.20 % 
