Net interest margin increased 5 basis points vs. the prior quarter and 11 basis points over the prior year.
Loans grew at an 9% annualized rate during the fourth quarter.
Completed capital raise that supports our long-term strategy and repositions our investment portfolio to improve our yield on the portfolio.
Capital continues to improve due to recent equity offering and lower AOCI adjustment.
HONESDALE, Pa., Jan. 27, 2025 (GLOBE NEWSWIRE) -- Norwood Financial Corp (Nasdaq Global Market-NWFL) and its subsidiary, Wayne Bank, announced results for the three months and fiscal year ended December 31, 2024.
Jim Donnelly, President and Chief Executive Officer of Norwood Financial Corp and Wayne Bank, stated, “During the fourth quarter, we successfully completed a capital raise that enabled us to reposition our investment portfolio for improved yields on the portfolio in future periods. While we incurred a one-time $20 million loss as a result of this repositioning, we believe the portfolio is better positioned for the current and future interest rate environment. Excluding this loss, we performed well during the fourth quarter, delivering higher net interest income year-over-year for both the fourth quarter and the full year. As a result of these actions, we believe the Company is financially stronger and better protected from changes in interest rates and will enhance our future performance.”
Selected Financial Highlights
(dollars in thousands, except per share data)
Three Months Ended
Twelve Months Ended
December 31, 2024
December 31, 2024
2024
2023
Change
2024
2023
Change
Net interest income
16,625
15,293
1,332
62,191
62,067
124
Net interest spread (fte)
2.31%
2.23%
8 bps
2.17%
2.47%
(30 bps
)
Net interest margin (fte)
3.04%
2.93%
11 bps
2.91%
3.06%
(15 bps
)
Net income (loss)
(12,651
)
355
(13,006
)
(160
)
16,759
(16,919
)
Diluted earnings per share
(1.54
)
0.04
(1.41
)
(0.02
)
2.07
(2.09
)
Return on average assets
(2.19%
)
0.06%
(225 bps
)
-0.01%
0.79%
(80 bps
)
Return on tangible equity
(30.77%
)
1.01%
(3,178 bps
)
(0.10%
)
11.66%
(1,167 bps
)
Discussion of financial results for the three months ended December 31, 2024:
The Company has a net loss of $12.7 million for the three months ended December 31, 2024. This was $13 million lower than the same period last year due one-time $20 million loss incurred on the sale of securities during December.
Net interest income was higher during the fourth quarter of 2024 than 2023 as increases in asset yields outpaced increases in yields on liabilities.
Correspondingly, the net interest margin in the fourth quarter was 3.04% in 2024 compared to 2.93% in 2023.
Discussion of financial results for the year ended December 31, 2024:
The Company posted a had a net loss of $160 thousand, or -$0.02 per diluted share, for the full-fiscal year ended year December 31, 2024 compared to net income of $16.8 million, or $2.07 per diluted share, for the fiscal year ended December in31. 2023. This loss was primarily due to a one-time $20 million loss incurred on the sale of securities during December 2024.
The full-year net interest margin was 2.91% in 2024 versus 3.06% in 2023. Deposit costs were higher in 2024, especially in the earlier part of the year, before the Federal Reserve began to cut rates.
Total non-interest expenses for 2024 were $48.6 million compared to $43.5 million in 2023. The increase was generally due to higher compensation and data processing costs.
Adjusted net income for the year was lower as higher net interest income and total other income was more than offset by an increase in total other expenses.
As of December 31, 2024, total assets were $2.317 billion, compared to $2.201 billion at December 31, 2023. Loans receivable were $1.693 billion, total deposits were $1.859 billion, and stockholders’ equity was $213.5 million.
Tangible Common Equity was 8.05% as of December 31, 2024, versus 6.98% at the end of 2023.
The following non-GAAP financial measures exclude the one-time $20.0 million net realized loss incurred in the fourth quarter as a result of the repositioning of our investment portfolio. Please see “Non-GAAP Financial Measures” below for a reconciliation of all non-GAAP financial measures.
(dollars in thousands, except per share data)
Three Months Ended
Twelve Months Ended
December 31, 2024
December 31, 2024
2024
2023
Change
2024
2023
Change
Adjusted net income
3,119
355
2,764
15,610
16,759
(1,149
)
Adjusted diluted earnings per share
0.38
0.04
0.34
1.93
2.07
(0.14
)
Adjusted return on average assets
0.54%
0.06%
48 bps
0.69%
0.79%
(10 bps
)
Adjusted return on tangible equity
7.59%
1.01%
654 bps
9.97%
11.66%
(169 bps
)
Norwood Financial Corp is the parent company of Wayne Bank, which operates from 16 offices throughout Northeastern Pennsylvania and 14 offices in 4 Delaware, Sullivan, Ontario, Otsego and Yates Counties, New York. The Company’s stock trades on the Nasdaq Global Market under the symbol “NWFL”.
Non-GAAP Financial Measures
This release references adjusted net income, adjusted diluted earnings per share, adjusted return on average assets and adjusted return on tangible equity, all of which are non-GAAP (Generally Accepted Accounting Principles) financial measures. Adjusted values were derived by reversing the effect of loss on sale of securities in 2024 along with the attendant tax effect. We believe the presentation of adjusted net income, adjusted diluted earnings per share, adjusted return on average assets and adjusted return on tangible equity ensures comparability of these measures as the portfolio restructuring is not something the Company expects to be a recurring event.
Adjusted Return on Average Assets
(Dollars in thousands)
Three Months Ended December 31,
Twelve Months Ended December 31,
2024
2023
2024
2023
Net (loss) income
$
(12,651
)
$
355
$
(160
)
$
16,759
Average assets
2,299,732
2,166,821
2,250,171
2,128,570
Return on average assets (annualized)
-2.19
%
0.06
%
-0.01
%
0.79
%
Net (loss) income
(12,651
)
355
(160
)
16,759
Net realized losses on sale of securities
19,962
0
19,962
0
Tax effect at 21%
(4,192
)
0
(4,192
)
0
Adjusted Net Income (Non-GAAP)
3,119
355
15,610
16,759
Average assets
2,299,732
2,166,821
2,250,171
2,128,570
Adjusted return on average assets (annualized)
(Non-GAAP)
0.54
%
0.06
%
0.69
%
0.79
%
Adjusted Return on Average Tangible Shareholders' Equity
(Dollars in thousands)
Three Months Ended December 31,
Twelve Months Ended December 31,
2024
2023
2024
2023
Net (loss) income
$
(12,651
)
$
355
$
(160
)
$
16,759
Average shareholders' equity
192,981
168,317
185,952
173,273
Average intangible assets
29,424
29,495
29,449
29,526
Average tangible shareholders' equity
163,557
138,822
156,503
143,747
Return on average tangible shareholders' equity (annualized)
-30.77
%
1.01
%
-0.10
%
11.66
%
Net (loss) income
(12,651
)
355
(160
)
16,759
Net realized losses on sale of securities
19,962
0
19,962
0
Tax effect at 21%
(4,192
)
0
(4,192
)
0
Adjusted Net Income (Non-GAAP)
3,119
355
15,610
16,759
Average tangible shareholders' equity
163,557
138,822
156,503
143,747
Adjusted return on average shareholders' equity (annualized)
(Non-GAAP)
7.59
%
1.01
%
9.97
%
11.66
%
Adjusted Earnings Per Share
(Dollars in thousands)
Three Months Ended December 31,
Twelve Months Ended December 31,
2024
2023
2024
2023
GAAP-Based Earnings Per Share, Basic
$
(1.54
)
$
0.04
$
(0.02
)
$
2.08
GAAP-Based Earnings Per Share, Diluted
$
(1.54
)
$
0.04
$
(0.02
)
$
2.07
Net (Loss) Income
(12,651
)
355
(160
)
16,759
Net realized losses on sale of securities
19,962
0
19,962
0
Tax effect at 21%
(4,192
)
0
(4,192
)
0
Adjusted Net Income (Non-GAAP)
3,119
355
15,610
16,759
Adjusted Earnings per Share, Basic (Non-GAAP)
$
0.38
$
0.04
$
1.93
$
2.08
Adjusted Earnings per Share, Diluted (Non-GAAP)
$
0.38
$
0.04
$
1.93
$
2.07
The following table reconciles average equity to average tangible equity:
Tangible Book Value
(Dollars in thousands)
December 31,
2024
2023
Total shareholders' equity
213,508
181,070
Adjustments:
Goodwill
(29,266
)
(29,266
)
Other intangible assets
(152
)
(221
)
Tangible common equity (Non-GAAP)
184,090
151,583
Common shares outstanding
9,272,906
8,110,157
Book value per common share
23.02
22.33
Tangible book value per common share (Non-GAAP)
19.85
18.69
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, among other things, changes in federal and state laws, changes in interest rates, our ability to maintain strong credit quality metrics, our ability to have future performance, our ability to control core operating expenses and costs, 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.
Contact:
John M. McCaffery
Executive Vice President &
Chief Financial Officer
NORWOOD FINANCIAL CORP
272-304-3003
www.waynebank.com
NORWOOD FINANCIAL CORP
Consolidated Balance Sheets
(dollars in thousands, except share and per share data)
(unaudited)
December 31
2024
2023
ASSETS
Cash and due from banks
$
27,562
$
28,533
Interest-bearing deposits with banks
44,777
37,587
Cash and cash equivalents
72,339
66,120
Securities available for sale
397,846
406,259
Loans receivable
1,713,638
1,603,618
Less: Allowance for credit losses
19,843
18,968
Net loans receivable
1,693,795
1,584,650
Regulatory stock, at cost
13,366
7,318
Bank premises and equipment, net
19,657
17,838
Bank owned life insurance
46,657
46,439
Foreclosed real estate owned
-
97
Accrued interest receivable
8,466
8,123
Deferred tax assets, net
17,696
21,353
Goodwill
29,266
29,266
Other intangible assets
152
221
Other assets
18,222
13,395
TOTAL ASSETS
$
2,317,462
$
2,201,079
LIABILITIES
Deposits:
Non-interest bearing demand
$
381,479
$
399,545
Interest-bearing
1,477,684
1,395,614
Total deposits
1,859,163
1,795,159
Short-term borrowings
113,069
74,076
Other borrowings
101,793
124,236
Accrued interest payable
12,615
10,510
Other liabilities
17,314
16,028
TOTAL LIABILITIES
2,103,954
2,020,009
STOCKHOLDERS' EQUITY
Preferred Stock, no par value per share, authorized 5,000,000 shares
