EX-99 2 ex-99.txt PRESS RELEASE FOR IMMEDIATE RELEASE NORWOOD FINANCIAL CORP ---------------------- ANNOUNCES RECORD EARNINGS FOR 2004 ---------------------------------- 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 2 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 3 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 ------------- 4 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%