HONESDALE, Pa., April 22, 2024 (GLOBE NEWSWIRE) -- James O. Donnelly, President and Chief Executive Officer of Norwood Financial Corp (Nasdaq Global Market – NWFL) and its subsidiary, Wayne Bank, announced net income of $4,433,000 for the three months ended March 31, 2024, a decrease of $1,349,000, from net income of $5,782,000 for the three months ended March 31, 2023. The decrease was due primarily to a $1,383,000 decrease in net interest income and a $1,296,000 increase in total other expenses. Earnings per share on a fully diluted basis were $0.55 for the three-month period ended March 31, 2024, compared to $0.71 in the three-month period ended March 31, 2023. The annualized return on average assets was 0.80% in the first quarter of 2024 and the annualized return on average equity was 9.79%, compared to 1.13% and 13.61%, respectively, in the first quarter of 2023. Total assets were $2.260 billion as of March 31, 2024, an increase of $156.1 million, compared to March 31, 2023. As of March 31, 2024, loans receivable were $1.621 billion, total deposits were $1.839 billion and total stockholders' equity was $181.2 million. Net interest income on a fully taxable equivalent basis (fte), was $14,905,000 during the three months ended March 31, 2024, compared to $16,275,000 in the comparable three-month period of 2023. During the three-months ended March 31, 2024, the fte yield on interest-earning assets increased 71 basis points compared to the three months ended March 31, 2023, while the cost of funds increased 147 basis points. As a result, the annualized net interest spread (fte) decreased to 2.07% from 2.83% in the quarter ended March 31, 2024 compared to the corresponding three-month period in 2023. Total other income was $2,006,000 for the three months ended March 31, 2024, compared to $1,912,000 during the corresponding three-month period in 2023. The increase in other income was due primarily to a $55,000 increase in earnings and proceeds on bank-owned life insurance. All other categories of other income increased $39,000, net. During the three months ended March 31, 2024, operating expenses increased $1,296,000 to $11,732,000 as compared to operating expenses of $10,436,000 during the comparable three-month period of 2023. During the three months ended March 31, 2024, the provision for credit losses decreased $924,000 compared to the corresponding three-month period of 2023 based on the Company's analysis of the allowance for credit losses. A lower level of non-performing loans and reduced charge-offs contributed to the decreased provision for credit losses. Mr. Donnelly stated, "Our first quarter income decreased from the 2023 level due to the continued pressure on net interest income caused by the rising cost of deposits. We have continued to grow our core business lines, including a 4.5% annualized increase in loans during the quarter, while total deposits increased 9.8% annually during the first quarter of 2024. Our capital base remains above "Well-Capitalized" targets, and our credit quality metrics improved during the first quarter. We appreciate the opportunity to serve our Wayne Bank customers and our customers at the Bank of the Finger Lakes and Bank of Cooperstown locations. We continue to look for opportunities available to us as we service our growing base of customers and enhance shareholder value in the Company". Norwood Financial Corp is the parent company of Wayne Bank, which operates from fourteen offices throughout Northeastern Pennsylvania and fifteen offices in Delaware, Sullivan, Ontario, Otsego and Yates Counties, New York. The Company's stock trades on the Nasdaq Global Market under the symbol "NWFL". 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 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. Non-GAAP Financial Measures This release references net interest income on a fully taxable-equivalent basis (fte), which is a non-GAAP (Generally Accepted Accounting Principles) financial measure. Fully taxable-equivalent net interest income was derived from GAAP interest income and net interest income using an assumed tax rate of 21%. We believe the presentation of net interest income on a fully taxable-equivalent basis ensures comparability of net interest income arising from both taxable and tax-exempt sources, and is consistent with industry practice. The following table reconciles net interest income to net interest income on a fully taxable-equivalent basis: (dollars in thousands) Three months ended March 31,   2024 2023 Net interest income $ 14,710 $ 16,093 Tax equivalent basis adjustment using 21% marginal tax rate   195   182 Net interest income on a fully taxable equivalent basis $ 14,905 $ 16,275 This release also references average tangible equity, which is also a non-GAAP financial measure. Average tangible equity is calculated by deducting average goodwill and other intangible assets from average stockholders' equity. The Company believes that disclosure of tangible equity ratios enhances investor understanding of our financial position and improves the comparability of our financial data. The following table reconciles average equity to average tangible equity: (dollars in thousands) Three months ended March 31,     2024     2023   Average equity $ 182,088   $ 172,334   Average goodwill and other intangibles   (29,476 )   (29,559 ) Average tangible equity $ 152,612   $ 142,775   Contact: William S. Lance Executive Vice President & Chief Financial Officer Norwood Financial Corp 570-253-8505 www.waynebank.com NORWOOD FINANCIAL CORP                     Consolidated Balance Sheets                     (dollars in thousands, except share and per share data)                     (unaudited)                        March 31                 2024     2023               ASSETS                     Cash and due from banks  $ 19,519    $ 25,701               Interest-bearing deposits with banks   92,444     3,314               Cash and cash equivalents   111,963     29,015                                     Securities available for sale   398,374     418,245               Loans receivable   1,621,448     1,535,643               Less: Allowance for credit losses   18,020     19,445               Net loans receivable   1,603,428     1,516,198               Regulatory stock, at cost   6,545     5,963               Bank premises and equipment, net   18,057     17,660               Bank owned life insurance   45,869     45,577               Foreclosed real estate owned   97     346               Accrued interest receivable   8,135     6,633               Deferred tax assets, net   21,642     22,164               Goodwill   29,266     29,266               Other intangible assets   202     283               Other assets   16,845     13,013               TOTAL ASSETS  $ 2,260,423    $ 2,104,363                                     LIABILITIES                     Deposits:                     Non-interest bearing demand  $ 383,362    $ 419,615               Interest-bearing   1,455,636     1,336,320               Total deposits   1,838,998     1,755,935               Short-term borrowings   60,055     108,555               Other borrowings   151,179     40,189               Accrued interest payable   11,737     4,703               Other liabilities   17,241     18,566               TOTAL LIABILITIES   2,079,210     1,927,948                                     STOCKHOLDERS' EQUITY                     Preferred Stock, no par value per share, authorized 5,000,000 shares -     -               Common Stock, $.10 par value per share, authorized: 20,000,000 shares, issued: 2024: 8,310,847 shares, 2023: 8,291,401 shares   831     829               Surplus   97,893     95,052               Retained earnings   137,285     133,427               Treasury stock, at cost: 2024: 200,690 shares, 2023: 110,400 shares (5,397 )   (2,930 )             Accumulated other comprehensive loss   (49,399 )   (49,963 )             TOTAL STOCKHOLDERS' EQUITY   181,213     176,415                                     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  $ 2,260,423    $ 2,104,363                                     NORWOOD FINANCIAL CORP                     Consolidated Statements of Income                     (dollars in thousands, except per share data)                     (unaudited)                       Three Months Ended March 31,           2024     2023               INTEREST INCOME                     Loans receivable, including fees $ 23,681   $ 19,158               Securities   2,526     2,505               Other   731     48               Total Interest income   26,938     21,711                                     INTEREST EXPENSE                     Deposits   10,110     4,362               Short-term borrowings   336     779               Other borrowings   1,782     477               Total Interest expense   12,228     5,618               NET INTEREST INCOME   14,710     16,093               (RELEASE OF) PROVISION FOR CREDIT LOSSES   (624 )   300