FOR IMMEDIATE RELEASE
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NORWOOD FINANCIAL CORP. ANNOUNCES EARNINGS FOR FIRST QUARTER
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AND 5% STOCK DIVIDEND
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April 24, 2006
William W. Davis, Jr., President and Chief Executive Officer of Norwood
Financial Corp. (NWFL-Nasdaq) and its subsidiary Wayne Bank today announced
earnings for the quarter ended March 31, 2006 and the declaration of a 5% stock
dividend payable May 26, 2006 to shareholders of record as of May 12, 2006.
Earnings for the three months ended March 31, 2006 were $1,333,000,
which represents a 7.2% increase over the $1,243,000 earned for the similar
period in 2005. Earnings per share on a fully diluted basis were $.47 per share
in 2006, increasing from $.43 per share for the 2005 period. The per share
amounts have been adjusted for the 5% stock dividend. The annualized return on
assets for the current quarter was 1.25% with an annualized return on equity of
11.14%.
Total assets as of March 31, 2006 were $434.1 million with total loans
receivable of $291.8 million, deposits of $339.5 million and shareholders'
equity of $48.5 million. Total assets have increased $20.9 million, or 5.1%,
when compared to March 31, 2005.
Loans receivable have increased $25.8 million, or 9.7%, from the prior
year. The growth was balanced between commercial lending (including real estate)
and residential mortgage activity, including home equity lending. Non-performing
loans totaled $398,000 or .14% of total loans as of March 31, 2006 compared to
$92,000, or .03% of total loans, as of March 31, 2005. The increase is due to
one loan relationship for which
the Company is actively pursuing a resolution. The Company was in a net recovery
position of $4,000 for the three months ended March 31, 2006 compared to net
charge-offs of $25,000 for the similar period in 2005. As a result of the lower
level of charge-offs, the Company was able to reduce its provision for loan
losses to $70,000 in the 2006 period from $100,000 in the 2005 period.
Notwithstanding the lower provision expense, the allowance for loan losses
increased by $220,000 from a year earlier to $3,743,000 and represented 1.28% of
total loans as of March 31, 2006.
For the three months ended March 31, 2006, net interest income, on a
fully taxable equivalent basis (fte), totaled $4,076,000 with a net interest
margin (fte) of 3.98% improving from $3,730,000 and 3.86% for the similar period
in 2005. The increase was due to both the higher percentage of loans on the
balance sheet and the higher short-term interest rates in 2006 which have
boosted yields on our prime-based loans.
Other income excluding gains on the sales of securities for the three
months ended March 31, 2006 totaled $817,000 compared to $843,000 for the
similar period in 2005. The decrease was principally due to a $40,000 gain on
the sale of residential mortgages in 2005, with no such gain in the 2006 period.
Net gains on sales of securities were also lower in the 2006 period at $7,000
compared to $77,000 in 2005. Other expenses totaled $2,766,000 in the 2006
period compared to $2,651,000 in the similar period in 2005.
Mr. Davis commented "We are pleased with our good start to 2006. With
the Company's earnings growth, the Board of Directors felt it was appropriate to
pay our shareholders this special 5% stock dividend. Shareholders will receive
cash in lieu of fractional shares."
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 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 forwardlooking statements. Those risks and uncertainties
include changes in the absolute and relative levels of interest rates, risks
associated with the effect of opening a new branch, the ability to control costs
and expenses, demand for real estate and general economic conditions. Norwood
Financial Corp. does not 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
NORWOOD FINANCIAL CORP.
Consolidated Balance Sheets
(dollars in thousands)
(unaudited)
March 31
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2006 2005
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ASSETS
Cash and due from banks $ 9,330 $ 7,186
Interest bearing deposits with banks 22 29
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Cash and cash equivalents 9,352 7,215
Securities available for sale 116,659 119,490
Securities held to maturity, fair value 2006: $976
2005: $5,229 953 5,103
Loans receivable (net of unearned Income) 291,840 266,032
Less: Allowance for loan losses 3,743 3,523
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Net loans receivable 288,097 262,509
Investment in FHLB Stock 2,073 2,477
Bank premises and equipment,net 5,508 5,475
Accrued interest receivable 1,979 1,800
Other assets 9,509 9,119
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TOTAL ASSETS $ 434,130 $ 413,188
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LIABILITIES
Deposits:
Non-interest bearing demand $ 54,505 $ 46,774
Interest-bearing 285,002 270,174
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Total deposits 339,507 316,948
Short-term borrowings 19,765 24,956
Long-term debt 23,000 23,000
Accrued interest payable 1,626 1,188
Other liabilities 1,735 1,501
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TOTAL LIABILITIES 385,633 367,593
STOCKHOLDERS' EQUITY
Common Stock, $.10 par value, authorized 10,000,000 shares
issued:2006: 2,841,000 2005: 2,705,715 shares 284 270
Surplus 5,730 5,421
Retained earnings 44,497 40,984
Treasury stock, at cost: 2006: 35,267 shares,
2005: 7,872 (1,029) (157)
Unearned ESOP Shares (77) (299)
Accumulated other comprehensive income (908) (624)
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TOTAL STOCKHOLDERS' EQUITY 48,497 45,595
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 434,130 $ 413,188
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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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2006 2005
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INTEREST INCOME
Loans receivable, including fees $ 4,944 $ 3,920
Securities 1,050 1,041
Other 2 12
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Total Interest income 5,996 4,973
INTEREST EXPENSE
Deposits 1,590 987
Short-term borrowings 187 99
Long-term debt 293 317
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Total Interest expense 2,070 1,403
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NET INTEREST INCOME 3,926 3,570
PROVISION FOR LOAN LOSSES 70 100
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NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 3,856 3,470
OTHER INCOME
Service charges and fees 590 579
Income from fiduciary activities 77 84
Net realized gains/(loss) on sales of securities 7 77
Gains on sale of loans -- 40
Other 150 140
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Total other income 824 920
OTHER EXPENSES
Salaries and employee benefits 1,406 1,387
Occupancy, furniture and equipment 380 384
Data processing related 156 160
Taxes, other than income 113 98
Professional Fees 113 109
Other 598 513
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Total other expenses 2,766 2,651
INCOME BEFORE TAX 1,914 1,739
INCOME TAX EXPENSE 581 496
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NET INCOME $ 1,333 $ 1,243
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Basic earnings per share $ 0.48 $ 0.44
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Diluted earnings per share $ 0.47 $ 0.43
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Per share amounts have been adjusted for a 5% stock dividend declared on April
11, 2006
NORWOOD FINANCIAL CORP.
Financial Highlights (Unaudited)
(dollars in thousands, except per share data)
THREE MONTHS ENDED MARCH 31 2006 2005
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Net interest income $ 3,926 $ 3,570
Net income 1,333 1,243
Net interest spread (fully taxable equivalent) 3.49% 3.52%
Net interest margin (fully taxable equivalent) 3.98% 3.86%
Return on average assets 1.25% 1.24%
Return on average equity 11.14% 10.96%
Basic earnings per share $ 0.48 $ 0.44
Diluted earnings per share 0.47 0.43
AS OF MARCH 31
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Total assets $ 434,130 $ 413,188
Total loans receivable 291,840 266,032
Allowance for loan losses 3,743 3,523
Total deposits 339,507 316,948
Stockholders' equity 48,497 45,595
Trust assets under management 93,105 80,555
Book value per share $ 17.29 $ 16.10
Equity to total assets 11.17% 11.03%
Allowance to total loans receivable 1.28% 1.32%
Nonperforming loans to total loans 0.14% 0.03%
Per share amounts have been adjusted for a 5% stock dividend declared on April
11, 2006
NORWOOD FINANCIAL CORP
Consolidated Balance Sheets (unaudited)
(dollars in thousands)
31-Mar 31-Dec 30-Sep 30-Jun 31-Mar
2006 2005 2005 2005 2005
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ASSETS
Cash and due from banks $ 9,330 $ 9,746 $ 9,755 $ 11,895 $ 7,186
Interest bearing deposits with banks 22 70 132 119 29
Federal funds sold --- --- 2,295 5,290 ---
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Cash and cash equivalents 9,352 9,816 12,182 17,304 7,215
Securities available for sale 116,659 115,814 113,162 111,497 119,490
Securities held to maturity 953 1,452 2,860 3,337 5,103
Loans receivable (net of unearned Income) 291,840 290,890 282,264 275,558 266,032
Less: Allowance for loan losses 3,743 3,669 3,643 3,600 3,523
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Net loans receivable 288,097 287,221 278,621 271,958 262,509
Investment in FHLB stock 2,073 1,620 1,711 1,973 2,477
Bank premises and equipment, net 5,508 5,393 5,454 5,434 5,475
Other assets 11,488 12,240 11,621 11,052 10,919
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TOTAL ASSETS $ 434,130 $ 433,556 $ 425,611 $ 422,555 $ 413,188
============ ============= ========== =========== =============
LIABILITIES
Deposits:
Non-interest bearing demand $ 54,505 $ 50,891 $ 58,061 $ 53,628 $ 46,774
Interest- bearing deposits 285,002 289,712 282,370 285,305 270,174
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Total deposits 339,507 340,603 340,431 338,933 316,948
Other borrowings 42,765 41,564 34,515 33,928 47,956
Other liabilities 3,361 3,281 3,218 2,863 2,689
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TOTAL LIABILITIES 385,633 385,448 378,164 375,724 367,593
STOCKHOLDERS' EQUITY 48,497 48,108 47,447 46,831 45,595
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 434,130 $ 433,556 $ 425,611 $ 422,555 $ 413,188
============ ============= ========== =========== =============
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 2006 2005 2005 2005 2005
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INTEREST INCOME
Loans receivable, including fees $ 4,944 $ 4,848 $ 4,527 $ 4,288 $ 3,920
Securities 1,050 999 993 1,020 1,041
Other 2 57 58 5 12
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Total Interest income 5,996 5,904 5,578 5,313 4,973
INTEREST EXPENSE
Deposits 1,590 1,520 1,262 1,102 987
Borrowings 480 421 382 415 416
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Total Interest expense 2,070 1,941 1,644 1,517 1,403
NET INTEREST INCOME 3,926 3,963 3,934 3,796 3,570
PROVISION FOR LOAN LOSSES 70 70 90 90 100
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NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 3,856 3,893 3,844 3,706 3,470
OTHER INCOME
Service charges and fees 590 677 648 603 579
Income from fiduciary activities 77 89 78 92 84
Net realized gains (losses) on sales of securities 7 (41) 3 3 77
Gains on sale of loans -- 1 8 15 40
Other 150 129 171 152 140
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Total other income 824 855 908 865 920
OTHER EXPENSES
Salaries and employee benefits 1,406 1,329 1,360 1,334 1,387
Occupancy, furniture and equipment , net 380 398 356 365 384
Other 980 941 911 978 880
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Total other expenses 2,766 2,668 2,627 2,677 2,651
INCOME BEFORE TAX 1,914 2,080 2,125 1,894 1,739
INCOME TAX EXPENSE 581 638 643 564 496
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NET INCOME $ 1,333 $ 1,442 $ 1,482 $ 1,330 $ 1,243
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Basic earnings per share $ 0.48 $ 0.52 $ 0.53 $ 0.47 $ 0.44
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Diluted earnings per share $ 0.47 $ 0.51 $ 0.52 $ 0.46 $ 0.43
======= ======= ======= ======= =======
Book Value per share $ 17.29 $ 17.07 $ 16.80 $ 16.58 $ 16.10
Return on average equity 11.14% 11.97% 12.43% 11.48% 10.96%
Return on average assets 1.25% 1.32% 1.38% 1.29% 1.24%
Net interest spread 3.49% 3.52% 3.63% 3.64% 3.52%
Net interest margin 3.98% 4.01% 4.06% 4.03% 3.86%
Allowance for loan losses to total loans 1.28% 1.26% 1.29% 1.31% 1.32%
Net charge-offs/(recoveries) to average loans
(annualized) (.01)% 0.06% 0.07% 0.02% 0.04%
Nonperforming loans to total loans 0.14% 0.12% 0.04% 0.04% 0.03%
Nonperforming assets to total assets 0.10% 0.08% 0.02% 0.02% 0.02%
Per share amounts have been adjusted for a 5% stock dividend declared on April
11, 2006