FOR IMMEDIATE RELEASE
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NORWOOD FINANCIAL CORP ANNOUNCES 9.8% EARNINGS INCREASE
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April 23, 2007
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 three months ended March 31, 2007.
Net income for the three months ended March 31, 2007 totaled
$1,463,000, which represents a 9.8% increase over the $1,333,000 earned for the
similar period in 2006. Earnings per share on a fully diluted basis were $.51
per share in 2007, increasing from $.47 per share for the 2006 period. The
annualized return on assets for the current quarter was 1.29% with an annualized
return on equity of 11.26%.
Total assets as of March 31, 2007 were $461.4 million with total loans
receivable of $320.7 million, deposits of $360.0 million and stockholders'
equity of $53.1 million. Total assets have increased $27.3 million, or 6.3%,
when compared to March 31, 2006.
Loans receivable have increased $28.9 million, or 9.9% from a year ago.
The growth was centered in commercial lending (including real estate) which
increased $17.8 million and residential mortgage activity, including home equity
lending which reflected growth of $13.7 million. Non-performing loans totaled
$407,000 or .13% of total loans as of March 31, 2007 compared to $398,000, or
..14% of total loans, as of March 31, 2006. The total is principally related to
one loan relationship secured by real estate for which the Company is actively
pursuing a resolution. The Company had net charge-offs of $7,000 for the three
months ended March 31, 2007. As a result of the continued low level of
charge-offs, the Company was able to reduce its provision for loan losses to
$50,000 in the 2007 period from $70,000 in the 2006 period. Notwithstanding the
lower provision expense, the
allowance for loan losses increased by $128,000 from a year earlier to
$3,871,000 and represented 1.21% of total loans as of March 31, 2007.
For the three months ended March 31, 2007, net interest income, on a
fully taxable equivalent basis (fte) totaled $4,221,000 increasing from
$4,076,000 for the similar period in 2006. The increase in net interest income
was principally due to loan growth and higher yields on loans and investments
which partially offset the higher cost of deposits. The Company is continuing to
experience an increase in deposit costs, principally CDs. As a result, the net
interest margin declined to 3.85% in the current quarter compared to 3.98% in
the similar period in the prior year.
Other income for the three months ended March 31, 2007 totaled $894,000
compared to $824,000 for the similar period in 2006. The increase was
principally due to a higher level of revenues from the Company's Wealth
Management Division, $125,000 in the current quarter compared to $77,000 for the
similar period in 2006. Other expenses totaled $2,861,000 in the 2007 period
compared to $2,766,000 in the similar period in 2006. The increase was
principally due to staffing and occupancy expenses related to the Tannersville
Branch which opened in December 2006.
Mr. Davis commented, "We are pleased with our good start to 2007.
Despite slightly shrinking margins, our overall earnings continue to improve.
The official grand opening of our Tannersville Office was held on March 28th.
This office serves as an excellent compliment to our other two Monroe County
locations, in Marshalls Creek and on Ninth Avenue at the entrance to the Stroud
Mall. We think this office will be a great enhancement to our customer base in
the county."
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 forward looking 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 releases 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
----------------------
2007 2006
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ASSETS
Cash and due from banks $ 8,604 $ 9,330
Interest bearing deposits with banks 141 22
Federal funds sold 3,130 --
--------- ---------
Cash and cash equivalents 11,875 9,352
Securities available for sale 112,597 116,659
Securities held to maturity, fair value 2007: $974 2006: $976 955 953
Loans receivable (net of unearned Income) 320,744 291,840
Less: Allowance for loan losses 3,871 3,743
--------- ---------
Net loans receivable 316,873 288,097
Investment in FHLB Stock 1,923 2,073
Bank premises and equipment,net 5,935 5,508
Accrued interest receivable 2,175 1,979
Other assets 9,050 9,509
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TOTAL ASSETS $ 461,383 $ 434,130
========= =========
LIABILITIES
Deposits:
Non-interest bearing demand $ 54,046 $ 54,505
Interest-bearing 305,988 285,002
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Total deposits 360,034 339,507
Short-term borrowings 19,986 19,765
Other borrowings 23,000 23,000
Accrued interest payable 3,402 1,626
Other liabilities 1,902 1,735
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TOTAL LIABILITIES 408,324 385,633
STOCKHOLDERS' EQUITY
Common Stock, $.10 par value, authorized 10,000,000 shares
issued: 2,840,872 284 284
Surplus 10,233 5,730
Retained earnings 43,946 44,497
Treasury stock, at cost: 2007: 53,107 shares, 2006: 35,267 shares (1,556) (1,029)
Unearned ESOP Shares -- (77)
Accumulated other comprehensive income (loss) 152 (908)
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TOTAL STOCKHOLDERS' EQUITY 53,059 48,497
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 461,383 $ 434,130
========= =========
NORWOOD FINANCIAL CORP.
Consolidated Statements of Income
(dollars in thousands, except per share data)
(unaudited)
Three Months Ended March 31
---------------------------
2007 2006
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INTEREST INCOME
Loans receivable, including fees $ 5,840 $ 4,944
Securities 1,218 1,050
Other 21 2
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Total Interest income 7,079 5,996
INTEREST EXPENSE
Deposits 2,486 1,590
Short-term borrowings 256 187
Other borrowings 246 293
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Total Interest expense 2,988 2,070
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NET INTEREST INCOME 4,091 3,926
PROVISION FOR LOAN LOSSES 50 70
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NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 4,041 3,856
OTHER INCOME
Service charges and fees 606 590
Income from fiduciary activities 125 77
Net realized gains on sales of securities -- 7
Gains on sale of loans 7 --
Other 156 150
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Total other income 894 824
OTHER EXPENSES
Salaries and employee benefits 1,497 1,406
Occupancy, furniture and equipment 415 380
Data processing related 174 156
Taxes, other than income 118 113
Professional Fees 89 113
Other 568 598
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Total other expenses 2,861 2,766
INCOME BEFORE TAX 2,074 1,914
INCOME TAX EXPENSE 611 581
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NET INCOME $ 1,463 $ 1,333
========== ==========
Basic earnings per share $ 0.52 $ 0.48
========== ==========
Diluted earnings per share $ 0.51 $ 0.47
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NORWOOD FINANCIAL CORP.
Financial Highlights (Unaudited)
(dollars in thousands, except per share data)
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Three Months Ended March 31 2007 2006
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Net interest income $ 4,091 $ 3,926
Net income 1,463 1,333
Net interest spread (fully taxable equivalent) 3.16% 3.49%
Net interest margin (fully taxable equivalent) 3.85% 3.98%
Return on average assets 1.29% 1.25%
Return on average equity 11.26% 11.14%
Basic earnings per share $ 0.52 $ 0.48
Diluted earnings per share 0.51 0.47
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As of March 31
Total Assets $ 461,383 $ 434,130
Total Loans receivable 320,744 291,840
Allowance for loan losses 3,871 3,743
Total deposits 360,034 339,507
Stockholders' equity 53,059 48,497
Trust Assets under management 99,072 93,105
Book value per share $ 18.96 $ 17.29
Equity to total assets 11.50% 11.17%
Allowance to total loans receivable 1.21% 1.28%
Nonperforming loans to total loans 0.13% 0.14%
NORWOOD FINANCIAL CORP
Consolidated Balance Sheets (unaudited)
(dollars in thousands)
31-Mar 31-Dec 30-Sep 30-Jun 31-Mar
2007 2006 2006 2006 2006
--------- --------- --------- --------- ---------
ASSETS
Cash and due from banks $ 8,604 $ 9,450 $ 9,448 $ 10,509 $ 9,330
Interest bearing deposits with banks 141 67 141 179 22
Federal funds sold 3,130 -- 1,525 13,615 --
--------- --------- --------- --------- ---------
Cash and cash equivalents 11,875 9,517 11,114 24,303 9,352
Securities available for sale 112,597 112,912 112,402 114,441 116,659
Securities held to maturity 955 954 954 954 953
Loans receivable (net of unearned Income) 320,744 315,567 313,678 299,366 291,840
Less: Allowance for loan losses 3,871 3,828 3,828 3,794 3,743
--------- --------- --------- --------- ---------
Net loans receivable 316,873 311,739 309,850 295,572 288,097
Investment in FHLB stock 1,923 1,687 1,634 2,294 2,073
Bank premises and equipment, net 5,935 6,020 5,489 5,457 5,508
Other assets 11,225 11,527 11,727 12,138 11,488
--------- --------- --------- --------- ---------
TOTAL ASSETS $ 461,383 $ 454,356 $ 453,170 $ 455,159 $ 434,130
========= ========= ========= ========= =========
LIABILITIES
Deposits:
Non-interest bearing demand $ 54,046 $ 53,856 $ 63,331 $ 59,538 $ 54,505
Interest- bearing deposits 305,988 304,247 301,275 293,929 285,002
--------- --------- --------- --------- ---------
Total deposits 360,034 358,103 364,606 353,467 339,507
Other borrowings 42,986 35,736 33,086 48,687 42,765
Other liabilities 5,304 8,286 4,419 3,813 3,361
--------- --------- --------- --------- ---------
TOTAL LIABILITIES 408,324 402,125 402,111 405,967 385,633
STOCKHOLDERS' EQUITY 53,059 52,231 51,059 49,192 48,497
--------- --------- --------- --------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 461,383 $ 454,356 $ 453,170 $ 455,159 $ 434,130
========= ========= ========= ========= =========
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 2007 2006 2006 2006 2006
------- ------- ------- ------- -------
INTEREST INCOME
Loans receivable, including fees $ 5,840 $ 5,771 $ 5,506 $ 5,201 $ 4,944
Securities 1,218 1,159 1,105 1,066 1,050
Other 21 26 36 83 2
------- ------- ------- ------- -------
Total Interest income 7,079 6,956 6,647 6,350 5,996
INTEREST EXPENSE
Deposits 2,486 2,358 2,032 1,738 1,590
Borrowings 502 472 513 583 480
------- ------- ------- ------- -------
Total Interest expense 2,988 2,830 2,545 2,321 2,070
NET INTEREST INCOME 4,091 4,126 4,102 4,029 3,926
PROVISION FOR LOAN LOSSES 50 50 45 55 70
------- ------- ------- ------- -------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 4,041 4,076 4,057 3,974 3,856
OTHER INCOME
Service charges and fees 606 605 616 644 590
Income from fiduciary activities 125 94 89 95 77
Net realized gains on sales of securities -- -- 45 14 7
Gains on sale of loans 7 37 3 107 --
Other 156 126 141 143 150
------- ------- ------- ------- -------
Total other income 894 862 894 1,003 824
OTHER EXPENSES
Salaries and employee benefits 1,497 1,311 1,482 1,456 1,406
Occupancy, furniture and equipment, net 415 368 329 369 380
Other 949 941 919 1,016 980
------- ------- ------- ------- -------
Total other expenses 2,861 2,620 2,730 2,841 2,766
INCOME BEFORE TAX 2,074 2,318 2,221 2,136 1,914
INCOME TAX EXPENSE 611 739 699 660 581
------- ------- ------- ------- -------
NET INCOME $ 1,463 $ 1,579 $ 1,522 $ 1,476 $ 1,333
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Basic earnings per share $ 0.52 $ 0.56 $ 0.54 $ 0.53 $ 0.48
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Diluted earnings per share $ 0.51 $ 0.55 $ 0.53 $ 0.52 $ 0.47
======= ======= ======= ======= =======
Book Value per share $ 18.96 $ 18.67 $ 18.25 $ 17.57 $ 17.29
Return on average equity 11.26% 12.09% 12.06% 12.06% 11.14%
Return on average assets 1.29% 1.38% 1.35% 1.34% 1.25%
Net interest spread 3.16% 3.25% 3.34% 3.39% 3.49%
Net interest margin 3.85% 3.94% 3.98% 3.95% 3.98%
Allowance for loan losses to total loans 1.21% 1.21% 1.22% 1.27% 1.28%
Net charge-offs/(recoveries) to average loans (annualized) 0.01% 0.06% 0.01% 0.01% (.01)%
Nonperforming loans to total loans 0.13% 0.13% 0.13% 0.10% 0.14%
Nonperforming assets to total assets 0.09% 0.09% 0.09% 0.07% 0.10%