FOR IMMEDIATE RELEASE
NORWOOD FINANCIAL CORP
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ANNOUNCES RECORD EARNINGS FOR 2004
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January 25, 2005
William W. Davis, Jr. President and Chief Executive Officer of Norwood
Financial Corp (Nasdaq-NWFL) and its subsidiary Wayne Bank announced record
earnings for the year ended December 31, 2004 of $5,010,000, which represented
an increase of 7.7% over the $4,653,000 earned in the similar period of 2003.
Earnings per share on a fully diluted basis were $1.85 in 2004 compared to $1.75
in 2003. The return on average assets for the year was 1.27% with a return on
average equity of 11.39%. Earnings for three months ended December 31, 2004 were
$1,363,000, which is an 11.1% increase over the similar period in 2003. Earnings
per share (diluted) for the most recent quarter were $.50 per share, with a
return on assets (ROA) of 1.33% and return on equity (ROE) of 11.98%. These
measures of profitability all compare favorably with the fourth quarter of 2003
in which the Company earned $.46 per share (diluted) with an ROA of 1.25% and
ROE of 11.60%.
Total assets as of December 31, 2004 were $411.6 million, with loans
receivable of $254.8 million, deposits of $318.6 million and stockholders'
equity of $45.7 million. Total assets have increased $24.1 million when compared
to December 31, 2003. Loans receivable increased $21 million or 9.0% from
December 31, 2003. The growth was
principally due to strong commercial real estate activity, and residential real
estate, primarily home equity lending. The growth in these portfolios was
partially offset by the continued planned decline in indirect automobile
lending, as the Company continues to focus more on real estate lending through
its branch network.
The Company's asset quality ratios remain excellent. As of December 31,
2004 non-performing loans totaled $67,000, or .03% of total loans, improving
from $143,000 or .06% as of December 31, 2003. The Company reduced the provision
for loan losses for the fourth quarter and the year 2004, as a result of the
decrease in non-performing loans, as well as a lower level of net charge-offs.
Net interest income on a fully taxable equivalent basis (fte) totaled
$3,795,000 for the three months ended December 31, 2004, which is an increase of
$166,000 or 4.6% over the similar period in 2003. The net interest margin for
the current quarter was 3.93% compared to 3.92% for the similar period in 2003.
For the year, net interest income (fte) totaled $14,653,000, an increase of 5.1%
over 2003. The net interest margin for 2004 increased 5 basis points to 3.91%.
This was a result of the increase in short-term interest rates in 2004 and an
improvement in asset mix, as the Company had more loans on the balance sheet in
2004.
Other income, excluding gains on sales of securities, for the three months
ended December 31, 2004 was $829,000 compared to $648,000 in the similar period
of 2003. The increase was principally due to the many customers using the new
Overdraft Manager Service, as well as revenue from the new title insurance
company. Other income for the year, excluding gains on sales of securities,
totaled $3,088,000 compared to $2,801,000 in
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2003. Gains on sales of securities was much lower for the year ended December
31, 2004, at $458,000 decreasing from $692,000 for the similar period in 2003.
Other expenses for the three months ended December 31, 2004 totaled
$2,542,000, an increase of 3.8% over the prior year. For the year, expenses
totaled $10,090,000, an increase of 2.9% over the prior year. The Company
liquidated its final leased vehicles in September 2004, and is now completely
out of the automobile leasing business.
During the fourth quarter, Ralph Matergia joined the Norwood and Wayne
Bank Board of Directors. Mr. Matergia brings to the Board a wide range of
business experience as well as legal expertise and an in-depth knowledge of
Monroe County. He has been an attorney in the Monroe County area for over 25
years and is the founding partner of the law firm, Matergia and Dunn. Mr.
Matergia will also continue to serve on Wayne Bank's Monroe County Advisory
Board.
Norwood Financial Corp, through its subsidiary Wayne Bank, operates
eleven offices in Wayne, Pike and Monroe Counties. The Company's stock is traded
on the Nasdaq National Market, under the symbol, "NWFL".
The foregoing material may contain forward-looking statements. We
caution that such statements may be subject to a number of uncertainties and
actual results could differ materially and therefore readers should not place
undue reliance on any forward looking statements. Those risks and uncertainties
include changes in interest rates, risks associated with the effect of opening a
new branch, the ability to control costs and expenses, and general economic
conditions. Norwood Financial Corp does not undertake and specifically disclaims
any obligation to publicly release the results of any revisions that
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may be made to any forward-looking statements to reflect the occurrence of
anticipated or unanticipated events or circumstances after the date of such
statements.
Contact: Lewis J. Critelli
Executive Vice President &
Chief Financial Officer
NORWOOD FINANCIAL CORP
570-253-1455
www.waynebank.com
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NORWOOD FINANCIAL CORP.
Consolidated Balance Sheets
(dollars in thousands)
December 31
----------------------
2004 2003
--------- ---------
(unaudited)
ASSETS
Cash and due from banks $ 7,488 $ 9,110
Interest bearing deposits with banks 118 64
Federal funds sold 13,060 -
--------- ---------
Cash and cash equivalents 20,666 9,174
Securities available for sale 116,933 124,823
Securities held to maturity, fair value 2004: $5,878
2003: $5,975 5,724 5,748
Loans receivable (net of unearned Income) 254,757 233,733
Less: Allowance for loan losses 3,448 3,267
--------- ---------
Net loans receivable 251,309 230,466
Investment in FHLB Stock 2,225 2,002
Bank premises and equipment,net 5,489 5,596
Accrued interest receivable 1,641 1,783
Other assets 7,639 7,891
--------- ---------
TOTAL ASSETS $ 411,626 $ 387,483
========= =========
LIABILITIES
Deposits:
Non-interest bearing demand $ 44,450 $ 39,517
Interest-bearing 274,195 267,152
--------- ---------
Total deposits 318,645 306,669
Short-term borrowings 22,982 12,859
Long-term debt 23,000 23,000
Accrued interest payable 1,200 1,309
Other liabilities 114 815
--------- ---------
TOTAL LIABILITIES 365,941 344,652
STOCKHOLDERS' EQUITY
Common Stock, $.10 par value,
authorized 10,000,000 shares issued:
2,705,715 shares 270 270
Surplus 5,336 4,933
Retained earnings 40,222 37,042
Treasury stock, at cost: 2004: 8,913 shares,
2003: 21,318 shares (149) (295)
Unearned ESOP Shares (327) (550)
Accumulated other comprehensive income 333 1,431
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 45,685 42,831
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 411,626 $ 387,483
========= =========
NORWOOD FINANCIAL CORP.
Consolidated Statements of Income
(dollars in thousands, except per share data)
Three Months Ended December 31 Year ended December 31
------------------------------ -------------------------
2004 2003 2004 2003
-------------------------- -------------------------
(unaudited) (unaudited) (unaudited)
INTEREST INCOME
Loans receivable, including fees $ 3,908 $ 3,653 $14,794 $14,506
Securities 987 1,183 4,142 4,744
Other 45 8 70 95
------- ------- ------- -------
Total Interest income 4,940 4,844 19,006 19,345
INTEREST EXPENSE
Deposits 927 997 3,555 4,638
Short-term borrowings 48 26 151 99
Long-term debt 324 324 1,288 1,286
------- ------- ------- -------
Total Interest expense 1,299 1,347 4,994 6,023
------- ------- ------- -------
NET INTEREST INCOME 3,641 3,497 14,012 13,322
PROVISION FOR LOAN LOSSES 65 165 455 660
------- ------- ------- -------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 3,576 3,332 13,557 12,662
OTHER INCOME
Service charges and fees 633 455 2,122 1,846
Income from fiduciary activities 63 61 301 250
Net realized gains on sales of securities 145 150 458 692
Gains on sale of loans 4 - 67 192
Other 129 132 598 513
------- ------- ------- -------
Total other income 974 798 3,546 3,493
OTHER EXPENSES
Salaries and employee benefits 1,293 1,235 5,133 4,916
Occupancy, furniture and equipment, net 330 340 1,355 1,401
Data processing related 147 134 598 549
Losses on lease residuals - 25 90 50
Taxes, other than income 91 89 276 256
Professional Fees 90 82 323 277
Other 591 545 2,315 2,359
------- ------- ------- -------
Total other expenses 2,542 2,450 10,090 9,808
INCOME BEFORE TAX 2,008 1,680 7,013 6,347
INCOME TAX EXPENSE 645 453 2,003 1,694
------- ------- ------- -------
NET INCOME $ 1,363 $ 1,227 $ 5,010 $ 4,653
======= ======= ======= =======
Basic earnings per share $ 0.51 $ 0.47 $ 1.89 $ 1.79
======= ======= ======= =======
Diluted earnings per share $ 0.50 $ 0.46 $ 1.85 $ 1.75
======= ======= ======= =======
Cash dividends per share $ 0.18 $ 0.17 $ 0.69 $ 0.65
======= ======= ======= =======
NORWOOD FINANCIAL CORP.
Financial Highlights (Unaudited)
(dollars in thousands, except per share data)
Three Months Ended December 31 2004 2003
- ------------------------------ ------------ --------------
Net interest income $ 3,641 $ 3,497
Net income 1,363 1,227
Net interest spread (fully taxable equivalent) 3.60% 3.61%
Net interest margin (fully taxable equivalent) 3.93% 3.92%
Return on average assets 1.33% 1.25%
Return on average equity 11.98% 11.60%
Basic earnings per share $ 0.51 $ 0.47
Diluted earnings per share 0.50 0.46
For the Year Ended December 31
- ------------------------------
Net interest income $ 14,012 $ 13,322
Net income 5,010 4,653
Net interest spread (fully taxable equivalent) 3.60% 3.51%
Net interest margin (fully taxable equivalent) 3.91% 3.86%
Return on average assets 1.27% 1.22%
Return on average equity 11.39% 11.24%
Basic earnings per share $ 1.89 $ 1.79
Diluted earnings per share 1.85 1.75
As of December 31
- -----------------
Total Assets $ 411,626 $ 387,483
Total Loans receivable 254,757 233,733
Allowance for loan losses 3,448 3,267
Total deposits 318,645 306,669
Stockholders' equity 45,685 42,831
Trust Assets under management 83,397 73,991
Book value per share $ 16.95 $ 15.96
Equity to total assets 11.10% 11.05%
Allowance to total loans receivable 1.35% 1.40%
Nonperforming loans to total loans 0.03% 0.06%
NORWOOD FINANCIAL CORP
Consolidated Balance Sheets (unaudited)
(dollars in thousands)
31-Dec 30-Sep 30-Jun 31-Mar 31-Dec
2004 2004 2004 2004 2003
-------- -------- -------- -------- --------
ASSETS
Cash and due from banks $ 7,488 $ 10,290 $ 9,651 $ 8,272 $ 9,110
Interest bearing deposits with banks 118 101 83 186 64
Federal funds sold 13,060 610 7,875 6,375 -
-------- -------- -------- -------- --------
Cash and cash equivalents 20,666 11,001 17,609 14,833 9,174
Securities available for sale 116,933 111,100 116,484 116,431 124,823
Securities held to maturity 5,724 5,720 5,718 5,750 5,748
Loans receivable (net of unearned Income) 254,757 256,919 246,220 233,587 233,733
Less: Allowance for loan losses 3,448 3,418 3,362 3,302 3,267
-------- -------- -------- -------- --------
Net loans receivable 251,309 253,501 242,858 230,285 230,466
Investment in FHLB stock 2,225 2,183 1,976 1,834 2,002
Bank premises and equipment, net 5,489 5,602 5,559 5,556 5,596
Foreclosed real estate - - - 22 -
Other assets 9,280 9,466 9,719 9,183 9,674
-------- -------- -------- -------- --------
TOTAL ASSETS $411,626 $398,573 $399,923 $383,894 $387,483
======== ======== ======== ======== ========
LIABILITIES
Deposits:
Non-interest bearing demand $ 44,450 $ 51,752 $ 50,592 $ 40,645 $ 39,517
Interest- bearing deposits 274,195 266,193 267,407 264,795 267,152
-------- -------- -------- -------- --------
Total deposits 318,645 317,945 317,999 305,440 306,669
Other borrowings 45,982 34,194 38,040 32,076 35,859
Other liabilities 1,314 1,644 1,106 2,332 2,124
-------- -------- -------- -------- --------
TOTAL LIABILITIES 365,941 353,783 357,145 339,848 344,652
STOCKHOLDERS' EQUITY 45,685 44,790 42,778 44,046 42,831
-------- -------- -------- -------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $411,626 $398,573 $399,923 $383,894 $387,483
======== ======== ======== ======== ========
NORWOOD FINANCIAL CORP
Consolidated Statements of Income (unaudited)
(dollars in thousands, except per share data)
31-Dec 30-Sep 30-Jun 31-Mar 31-Dec
Three months ended 2004 2004 2004 2004 2003
------ ------ ------ ------ ------
INTEREST INCOME
Loans receivable, including fees $3,908 $3,770 $3,564 $3,552 $3,653
Securities 987 1,004 1,021 1,130 1,183
Other 45 8 10 7 8
------ ------ ------ ------ ------
Total Interest income 4,940 4,782 4,595 4,689 4,844
INTEREST EXPENSE
Deposits 927 858 862 908 997
Borrowings 372 366 353 348 350
------ ------ ------ ------ ------
Total Interest expense 1,299 1,224 1,215 1,256 1,347
NET INTEREST INCOME 3,641 3,558 3,380 3,433 3,497
PROVISION FOR LOAN LOSSES 65 100 165 125 165
------ ------ ------ ------ ------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 3,576 3,458 3,215 3,308 3,332
OTHER INCOME
Service charges and fees 633 575 473 441 455
Income from fiduciary activities 63 83 69 86 61
Net realized gains on sales of securities 145 51 84 178 150
Gains on sale of loans 4 1 5 57 -
Other 129 161 131 177 132
------ ------ ------ ------ ------
Total other income 974 871 762 939 798
OTHER EXPENSES
Salaries and employee benefits 1,293 1,276 1,262 1,302 1,235
Occupancy, furniture and equipment, net 330 335 338 352 340
Losses on lease residuals - - - 90 25
Other 919 898 844 851 850
------ ------ ------ ------ ------
Total other expenses 2,542 2,509 2,444 2,595 2,450
INCOME BEFORE TAX 2,008 1,820 1,533 1,652 1,680
INCOME TAX EXPENSE 645 500 406 452 453
------ ------ ------ ------ ------
NET INCOME $1,363 $1,320 $1,127 $1,200 $1,227
====== ====== ====== ====== ======
Basic earnings per share $ 0.51 $ 0.50 $ 0.43 $ 0.46 $ 0.47
====== ====== ====== ====== ======
Diluted earnings per share $ 0.50 $ 0.49 $ 0.42 $ 0.45 $ 0.46
====== ====== ====== ====== ======
Book Value per share $16.95 $16.63 $15.89 $16.40 $15.96
Return on average equity 11.98% 12.01% 10.44% 11.08% 11.60%
Return on average assets 1.33% 1.32% 1.16% 1.26% 1.25%
Net interest spread 3.60% 3.60% 3.52% 3.65% 3.61%
Net interest margin 3.93% 3.93% 3.84% 3.95% 3.92%
Allowance for loan losses to total loans 1.35% 1.33% 1.37% 1.41% 1.40%
Net charge-offs to average loans (annualized) 0.05% 0.07% 0.17% 0.16% 0.29%
Nonperforming loans to total loans 0.03% 0.03% 0.12% 0.03% 0.06%
Nonperforming assets to toal assets 0.02% 0.02% 0.07% 0.03% 0.04%