NORWOOD [LOGO]
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FINANCIAL CORP. 717 Main Street o Honesdale, Pennsylvania 18431 o 570-253-1455
FOR IMMEDIATE RELEASE
NORWOOD FINANCIAL CORP
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ANNOUNCES INCREASED EARNINGS
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April 22, 2005-Honesdale, PA
William W. Davis, Jr., President and Chief Executive Officer of Norwood
Financial Corp (Nasdaq-NWFL) and its subsidiary Wayne Bank announced earnings
for the three months ended March 31, 2005 of $1,243,000 which represents an
increase of 3.6% over the $1,200,000 earned in the similar period of 2004.
Earnings per share, on a fully diluted basis were $.46 per share in 2005,
compared to $.45 earned for the similar period in 2004. The return on assets for
the current quarter was 1.24% with a return on equity of 10.96%.
Total assets as of March 31, 2005 were $413.2 million, with loans
receivable of $266.0 million, deposits of $316.9 million and stockholders'
equity of $45.6 million. Total assets have increased $29.3 million, or 7.6%,
when compared to March 31, 2004.
Loans receivable increased $32.4 million, or 13.9%, from March 31, 2004
to March 31, 2005. The growth was principally due to strong commercial real
estate activity and residential real estate, primarily home equity lending. The
Company continues to focus on real estate lending through its branch network and
commercial lenders. The real estate activity offset the on-going planned decline
in indirect automobile lending.
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The Company's asset quality ratios remain excellent. As of March 31,
2005 non-performing loans totaled $92,000, or .03% of total loans. The Company
reduced the provision for loan losses to $100,000 for the three months ended
March 31, 2005 compared to $125,000 for the three months ended March 31, 2004.
This was as a result of a lower level of net charge-offs, $25,000 in the current
period, which is .04% of average loans (annualized), declining from $90,000, or
..16% of average loans (annualized) in the 2004 period. The allowance for loan
losses represented 1.32% of total loans as of March 31, 2005.
Net interest income on a fully taxable equivalent basis (fte) totaled
$3,730,000 for the three months ended March 31, 2005, an increase of $141,000,
or 3.9%, over the similar period in 2004. The net interest margin (fte) for the
current period was 3.86%, compared to 3.95% for the period in 2004. Short-term
rates have increased much faster than long-term rates over the past twelve
months. As a result, interest rates on fixed residential real estate lending
have remained relatively flat while funding costs have increased causing
pressure on the net interest margin. This was partially offset by the increase
in yields on floating rate loans and growth in the balance sheet.
Other income, excluding gains on sales of securities, for the three
months ended March 31, 2005 was $843,000 compared to $761,000 in the similar
period of 2004. The increase was principally due to the many customers using the
new Overdraft Manager Service. Gains on sales of securities were lower for the
period in 2005 at $77,000 compared to $178,000 for the similar period in 2004.
Other expenses for the
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three months ended March 31, 2005 totaled $2,651,000, which was an increase of
$56,000 or 2.2% over the period in 2004. The three months ended March 31, 2004
included $90,000 of expenses related to losses in the lease portfolio, with no
such expense in 2005, as the Company liquidated its final leased vehicles in
2004.
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 undertake and specifically disclaims any
obligation to publicly release the results of any revisions that 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)
(unaudited)
March 31
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2005 2004
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ASSETS
Cash and due from banks $ 7,186 $ 8,272
Interest bearing deposits with banks 29 186
Federal funds sold -- 6,375
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Cash and cash equivalents 7,215 14,833
Securities available for sale 119,490 116,431
Securities held to maturity, fair value 2005: $ 5,229 2004: $ 6,014 5,103 5,750
Loans receivable (net of unearned Income) 266,032 233,587
Less: Allowance for loan losses 3,523 3,302
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Net loans receivable 262,509 230,285
Investment in FHLB Stock 2,477 1,834
Bank premises and equipment,net 5,475 5,556
Accrued interest receivable 1,800 1,724
Other assets 9,119 7,481
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TOTAL ASSETS $ 413,188 $ 383,894
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LIABILITIES
Deposits:
Non-interest bearing demand $ 46,774 $ 40,645
Interest-bearing 270,174 264,795
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Total deposits 316,948 305,440
Short-term borrowings 24,956 9,076
Long-term debt 23,000 23,000
Accrued interest payable 1,188 1,216
Other liabilities 1,501 1,116
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TOTAL LIABILITIES 367,593 339,848
STOCKHOLDERS' EQUITY
Common Stock, $.10 par value, authorized 10,000,000 shares
issued: 2,705,715 shares 270 270
Surplus 5,421 5,001
Retained earnings 40,984 37,790
Treasury stock, at cost: 2005: 7,872 shares, 2004: 19,247 shares (157) (310)
Unearned ESOP Shares (299) (500)
Accumulated other comprehensive income (624) 1,795
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TOTAL STOCKHOLDERS' EQUITY 45,595 44,046
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 413,188 $ 383,894
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NORWOOD FINANCIAL CORP.
Consolidated Statements of Income
(dollars in thousands, except per share data)
(unaudited)
Three Months Ended March 31
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2005 2004
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INTEREST INCOME
Loans receivable, including fees $3,920 $3,552
Securities 1,041 1,130
Other 12 7
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Total Interest income 4,973 4,689
INTEREST EXPENSE
Deposits 987 908
Short-term borrowings 99 28
Long-term debt 317 320
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Total Interest expense 1,403 1,256
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NET INTEREST INCOME 3,570 3,433
PROVISION FOR LOAN LOSSES 100 125
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NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 3,470 3,308
OTHER INCOME
Service charges and fees 579 441
Income from fiduciary activities 84 86
Net realized gains on sales of securities 77 178
Gains on sale of loans 40 57
Other 140 177
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Total other income 920 939
OTHER EXPENSES
Salaries and employee benefits 1,387 1,302
Occupancy, furniture and equipment 384 352
Data processing related 160 146
Losses on lease residuals -- 90
Taxes, other than income 98 91
Professional Fees 109 85
Other 513 529
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Total other expenses 2,651 2,595
INCOME BEFORE TAX 1,739 1,652
INCOME TAX EXPENSE 496 452
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NET INCOME $1,243 $1,200
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Basic earnings per share $ 0.47 $ 0.46
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Diluted earnings per share $ 0.46 $ 0.45
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NORWOOD FINANCIAL CORP.
Financial Highlights (Unaudited)
(dollars in thousands, except per share data)
Three Months Ended March 31 2005 2004
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Net interest income $ 3,570 $ 3,433
Net income 1,243 1,200
Net interest spread (fully taxable equivalent) 3.52% 3.65%
Net interest margin (fully taxable equivalent) 3.86% 3.95%
Return on average assets 1.24% 1.26%
Return on average equity 10.96% 11.08%
Basic earnings per share $ 0.47 $ 0.46
Diluted earnings per share 0.46 0.45
As of March 31
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Total Assets $ 413,188 $ 383,894
Total Loans receivable 266,032 233,587
Allowance for loan losses 3,523 3,302
Total deposits 316,948 305,440
Stockholders' equity 45,595 44,046
Trust Assets under management 80,555 77,208
Book value per share $ 16.90 $ 16.40
Equity to total assets 11.03% 11.47%
Allowance to total loans receivable 1.32% 1.41%
Nonperforming loans to total loans 0.03% 0.03%
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NORWOOD FINANCIAL CORP
Consolidated Balance Sheets (unaudited)
(dollars in thousands)
31-Mar 31-Dec 30-Sep 30-Jun 31-Mar
2005 2004 2004 2004 2004
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ASSETS
Cash and due from banks $ 7,186 $ 7,488 $ 10,290 $ 9,651 $ 8,272
Interest bearing deposits with banks 29 118 101 83 186
Federal funds sold -- 13,060 610 7,875 6,375
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Cash and cash equivalents 7,215 20,666 11,001 17,609 14,833
Securities available for sale 119,490 116,933 111,100 116,484 116,431
Securities held to maturity 5,103 5,724 5,720 5,718 5,750
Loans receivable (net of unearned Income) 266,032 254,757 256,919 246,220 233,587
Less: Allowance for loan losses 3,523 3,448 3,418 3,362 3,302
-------- -------- -------- -------- --------
Net loans receivable 262,509 251,309 253,501 242,858 230,285
Investment in FHLB stock 2,477 2,225 2,183 1,976 1,834
Bank premises and equipment, net 5,475 5,489 5,602 5,559 5,556
Foreclosed real estate -- -- -- -- 22
Other assets 10,919 9,280 9,466 9,719 9,183
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TOTAL ASSETS $413,188 $411,626 $398,573 $399,923 $383,894
======== ======== ======== ======== ========
LIABILITIES
Deposits:
Non-interest bearing demand $ 46,774 $ 44,450 $ 51,752 $ 50,592 $ 40,645
Interest- bearing deposits 270,174 274,195 266,193 267,407 264,795
-------- -------- -------- -------- --------
Total deposits 316,948 318,645 317,945 317,999 305,440
Other borrowings 47,956 45,982 34,194 38,040 32,076
Other liabilities 2,689 1,314 1,644 1,106 2,332
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TOTAL LIABILITIES 367,593 365,941 353,783 357,145 339,848
STOCKHOLDERS' EQUITY 45,595 45,685 44,790 42,778 44,046
-------- -------- -------- -------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $413,188 $411,626 $398,573 $399,923 $383,894
======== ======== ======== ======== ========
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NORWOOD FINANCIAL CORP
Consolidated Statements of Income (unaudited)
(dollars in thousands, except per share data)
31-Mar 31-Dec 30-Sep 30-Jun 31-Mar
Three months ended 2005 2004 2004 2004 2004
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INTEREST INCOME
Loans receivable, including fees $3,920 $3,908 $3,770 $3,564 $3,552
Securities 1,041 987 1,004 1,021 1,130
Other 12 45 8 10 7
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Total Interest income 4,973 4,940 4,782 4,595 4,689
INTEREST EXPENSE
Deposits 987 927 858 862 908
Borrowings 416 372 366 353 348
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Total Interest expense 1,403 1,299 1,224 1,215 1,256
NET INTEREST INCOME 3,570 3,641 3,558 3,380 3,433
PROVISION FOR LOAN LOSSES 100 65 100 165 125
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NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 3,470 3,576 3,458 3,215 3,308
OTHER INCOME
Service charges and fees 579 633 575 473 441
Income from fiduciary activities 84 63 83 69 86
Net realized gains on sales of securities 77 145 51 84 178
Gains on sale of loans 40 4 1 5 57
Other 140 129 161 131 177
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Total other income 920 974 871 762 939
OTHER EXPENSES
Salaries and employee benefits 1,387 1,293 1,276 1,262 1,302
Occupancy, furniture and equipment, net 384 330 335 338 352
Losses on lease residuals -- -- -- -- 90
Other 880 919 898 844 851
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Total other expenses 2,651 2,542 2,509 2,444 2,595
INCOME BEFORE TAX 1,739 2,008 1,820 1,533 1,652
INCOME TAX EXPENSE 496 645 500 406 452
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NET INCOME $1,243 $1,363 $1,320 $1,127 $1,200
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Basic earnings per share $ 0.47 $ 0.51 $ 0.50 $ 0.43 $ 0.46
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Diluted earnings per share $ 0.46 $ 0.50 $ 0.49 $ 0.42 $ 0.45
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Book Value per share $16.90 $16.95 $16.63 $15.89 $16.40
Return on average equity 10.96% 11.98% 12.01% 10.44% 11.08%
Return on average assets 1.24% 1.33% 1.32% 1.16% 1.26%
Net interest spread 3.52% 3.60% 3.60% 3.52% 3.65%
Net interest margin 3.86% 3.93% 3.93% 3.84% 3.95%
Allowance for loan losses to total loans 1.32% 1.35% 1.33% 1.37% 1.41%
Net charge-offs to average loans (annualized) 0.04% 0.05% 0.07% 0.17% 0.16%
Nonperforming loans to total loans 0.03% 0.03% 0.03% 0.12% 0.03%
Nonperforming assets to total assets 0.02% 0.02% 0.02% 0.07% 0.03%
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