Date of Report (Date of earliest event reported)
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October 22, 2014
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NORWOOD FINANCIAL CORP.
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(Exact name of registrant as specified in its charter)
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Pennsylvania
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0-28364
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23-2828306
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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717 Main Street, Honesdale, Pennsylvania
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18431
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code:
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(570) 253-1455
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Not Applicable
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(Former name or former address, if changed since last report)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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¨
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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¨
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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¨
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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¨
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).
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NORWOOD FINANCIAL CORP.
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|||
Date: October 22, 2014
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By:
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/s/ Lewis J. Critelli | |
Lewis J. Critelli
President and Chief Executive Officer
(Duly Authorized Representative)
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(dollars in thousands)
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Three months ended
September 30 |
Nine months ended
September 30 |
||||||||||||||
2014
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2013
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2014
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2013
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|||||||||||||
Net interest income
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$ | 6,154 | $ | 6,270 | $ | 18,454 | $ | 18,516 | ||||||||
Tax equivalent basis adjustment
using 34% marginal tax rate
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313 | 308 | 964 | 880 | ||||||||||||
Net interest income on a fully
taxable equivalent basis
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$ | 6,467 | $ | 6,578 | $ | 19,418 | $ | 19,396 |
NORWOOD FINANCIAL CORP.
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||||||||
Consolidated Balance Sheets
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||||||||
(dollars in thousands, except share data)
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||||||||
(unaudited)
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||||||||
September 30
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||||||||
2014
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2013
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|||||||
ASSETS
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|
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||||||
Cash and due from banks
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$ | 13,105 | $ | 15,193 | ||||
Interest-bearing deposits with banks
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158 | 12,221 | ||||||
Cash and cash equivalents
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13,263 | 27,414 | ||||||
Securities available for sale
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158,701 | 150,904 | ||||||
Securities held to maturity, fair value 2013: $176
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- | 174 | ||||||
Loans receivable (net of unearned Income)
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500,844 | 486,968 | ||||||
Less: Allowance for loan losses
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5,651 | 5,559 | ||||||
Net loans receivable
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495,193 | 481,409 | ||||||
Regulatory stock, at cost
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3,210 | 2,141 | ||||||
Bank premises and equipment, net
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6,825 | 7,250 | ||||||
Bank owned life insurance
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18,143 | 14,653 | ||||||
Foreclosed real estate owned
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4,962 | 993 | ||||||
Accrued interest receivable
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2,367 | 2,373 | ||||||
Goodwill
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9,715 | 9,715 | ||||||
Other intangible assets
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418 | 543 | ||||||
Deferred tax asset
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3,691 | 4,584 | ||||||
Other assets
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1,725 | 1,618 | ||||||
TOTAL ASSETS
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$ | 718,213 | $ | 703,771 | ||||
LIABILITIES
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||||||||
Deposits:
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||||||||
Non-interest bearing demand
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$ | 102,343 | $ | 101,632 | ||||
Interest-bearing
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445,995 | 447,066 | ||||||
Total deposits
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548,338 | 548,698 | ||||||
Short-term borrowings
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44,704 | 38,466 | ||||||
Other borrowings
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22,592 | 19,956 | ||||||
Accrued interest payable
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975 | 1,075 | ||||||
Other liabilities
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4,197 | 4,230 | ||||||
TOTAL LIABILITIES
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620,806 | 612,425 | ||||||
STOCKHOLDERS' EQUITY
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||||||||
Common Stock, $.10 par value, authorized 10,000,000 shares
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||||||||
issued: 3,708,718 shares
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371 | 371 | ||||||
Surplus
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35,143 | 34,991 | ||||||
Retained earnings
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63,637 | 59,710 | ||||||
Treasury stock, at cost: 2014: 63,019 shares, 2013: 81,249 shares
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(1,673 | ) | (2,154 | ) | ||||
Accumulated other comprehensive loss
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(71 | ) | (1,572 | ) | ||||
TOTAL STOCKHOLDERS' EQUITY
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97,407 | 91,346 | ||||||
TOTAL LIABILITIES AND
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||||||||
STOCKHOLDERS' EQUITY
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$ | 718,213 | $ | 703,771 |
NORWOOD FINANCIAL CORP.
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||||||||||||||||
Consolidated Statements of Income
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||||||||||||||||
(dollars in thousands, except per share data)
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||||||||||||||||
(unaudited)
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|||||||||||||||
Three Months Ended
September 30 |
Nine Months Ended
September 30 |
|||||||||||||||
2014
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2013
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2014
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2013
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|||||||||||||
INTEREST INCOME
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||||||||||||||||
Loans receivable, including fees
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$ | 5,972 | $ | 6,202 | $ | 17,885 | $ | 18,557 | ||||||||
Securities
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968 | 939 | 2,981 | 2,685 | ||||||||||||
Other
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1 | 5 | 3 | 17 | ||||||||||||
Total Interest income
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6,941 | 7,146 | 20,869 | 21,259 | ||||||||||||
INTEREST EXPENSE
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||||||||||||||||
Deposits
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600 | 701 | 1,852 | 2,174 | ||||||||||||
Short-term borrowings
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19 | 17 | 62 | 44 | ||||||||||||
Other borrowings
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168 | 158 | 501 | 525 | ||||||||||||
Total Interest expense
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787 | 876 | 2,415 | 2,743 | ||||||||||||
NET INTEREST INCOME
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6,154 | 6,270 | 18,454 | 18,516 | ||||||||||||
PROVISION FOR LOAN LOSSES
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420 | 400 | 1,260 | 2,000 | ||||||||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
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5,734 | 5,870 | 17,194 | 16,516 | ||||||||||||
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||||||||||||||||
OTHER INCOME
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||||||||||||||||
Service charges and fees
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587 | 614 | 1,746 | 1,834 | ||||||||||||
Income from fiduciary activities
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125 | 111 | 328 | 285 | ||||||||||||
Net realized gains on sales of securities
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301 | 198 | 904 | 590 | ||||||||||||
Gains on sale of loans
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(15 | ) | (12 | ) | 50 | (9 | ) | |||||||||
Earnings and proceeds on life insurance policies
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170 | 150 | 514 | 1,224 | ||||||||||||
Other
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94 | 155 | 241 | 381 | ||||||||||||
Total other income
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1,262 | 1,216 | 3,783 | 4,305 | ||||||||||||
OTHER EXPENSES
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||||||||||||||||
Salaries and employee benefits
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2,028 | 2,103 | 6,364 | 6,438 | ||||||||||||
Occupancy, furniture and equipment
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505 | 507 | 1,601 | 1,586 | ||||||||||||
Data processing related
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240 | 221 | 680 | 673 | ||||||||||||
Taxes, other than income
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161 | 179 | 488 | 531 | ||||||||||||
Professional Fees
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136 | 139 | 475 | 498 | ||||||||||||
FDIC Insurance assessment
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104 | 114 | 320 | 335 | ||||||||||||
Foreclosed real estate owned
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271 | 217 | 733 | 494 | ||||||||||||
Other
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679 | 693 | 2,068 | 2,052 | ||||||||||||
Total other expenses
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4,124 | 4,173 | 12,729 | 12,607 | ||||||||||||
INCOME BEFORE TAX
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2,872 | 2,913 | 8,248 | 8,214 | ||||||||||||
INCOME TAX EXPENSE
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754 | 777 | 2,132 | 1,930 | ||||||||||||
NET INCOME
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$ | 2,118 | $ | 2,136 | $ | 6,116 | $ | 6,284 | ||||||||
Basic earnings per share
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$ | 0.58 | $ | 0.59 | $ | 1.68 | $ | 1.73 | ||||||||
Diluted earnings per share
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$ | 0.58 | $ | 0.59 | $ | 1.68 | $ | 1.73 |
NORWOOD FINANCIAL CORP.
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||||||||
Financial Highlights (Unaudited)
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||||||||
(dollars in thousands, except per share data)
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||||||||
For the Three Months Ended September 30
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2014
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2013
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||||||
Net interest income
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$ | 6,154 | $ | 6,270 | ||||
Net income
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2,118 | 2,136 | ||||||
Net interest spread (fully taxable equivalent)
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3.78 | % | 3.89 | % | ||||
Net interest margin (fully taxable equivalent)
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3.92 | % | 4.05 | % | ||||
Return on average assets
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1.18 | % | 1.22 | % | ||||
Return on average equity
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8.62 | % | 9.33 | % | ||||
Basic earnings per share
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$ | 0.58 | $ | 0.59 | ||||
Diluted earnings per share
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$ | 0.58 | $ | 0.59 | ||||
For the Nine Months Ended September 30
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||||||||
Net interest income
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$ | 18,454 | $ | 18,516 | ||||
Net income
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6,116 | 6,284 | ||||||
Net interest spread (fully taxable equivalent)
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3.77 | % | 3.88 | % | ||||
Net interest margin (fully taxable equivalent)
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3.91 | % | 4.04 | % | ||||
Return on average assets
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1.15 | % | 1.22 | % | ||||
Return on average equity
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8.53 | % | 9.07 | % | ||||
Basic earnings per share
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$ | 1.68 | $ | 1.73 | ||||
Diluted earnings per share
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$ | 1.68 | $ | 1.73 | ||||
As of September 30
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||||||||
Total assets
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$ | 718,213 | $ | 703,771 | ||||
Total loans receivable
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500,844 | 486,968 | ||||||
Allowance for loan losses
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5,651 | 5,559 | ||||||
Total deposits
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548,338 | 548,698 | ||||||
Stockholders' equity
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97,407 | 91,346 | ||||||
Trust assets under management
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132,652 | 124,147 | ||||||
Book value per share
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$ | 26.30 | $ | 25.54 | ||||
Equity to total assets
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13.56 | % | 12.98 | % | ||||
Allowance to total loans receivable
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1.13 | % | 1.14 | % | ||||
Nonperforming loans to total loans
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1.18 | % | 2.11 | % | ||||
Nonperforming assets to total assets
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1.52 | % | 1.60 | % |
NORWOOD FINANCIAL CORP.
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Consolidated Balance Sheets (unaudited)
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(dollars in thousands)
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||||||||||||||||||||
September 30
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June 30
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March 31
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December 31
|
September 30
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||||||||||||||||
2014
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2014
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2014
|
2013
|
2013
|
||||||||||||||||
ASSETS
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||||||||||||||||||||
Cash and due from banks
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$ | 13,105 | $ | 12,196 | $ | 8,607 | $ | 7,528 | $ | 15,193 | ||||||||||
Interest-bearing deposits with banks
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158 | 3,182 | 142 | 335 | 12,221 | |||||||||||||||
Cash and cash equivalents
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13,263 | 15,378 | 8,749 | 7,863 | 27,414 | |||||||||||||||
Securities available for sale
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158,701 | 154,925 | 156,165 | 158,132 | 150,904 | |||||||||||||||
Securities held to maturity
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- | - | 175 | 174 | 174 | |||||||||||||||
Loans receivable (net of unearned income)
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500,844 | 502,316 | 496,016 | 503,097 | 486,968 | |||||||||||||||
Less: Allowance for loan losses
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5,651 | 5,611 | 5,727 | 5,708 | 5,558 | |||||||||||||||
Net loans receivable
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495,193 | 496,705 | 490,289 | 497,389 | 481,410 | |||||||||||||||
Regulatory stock, at cost
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3,210 | 2,437 | 2,741 | 2,877 | 2,141 | |||||||||||||||
Bank owned life insurance
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18,143 | 18,002 | 17,930 | 17,790 | 14,653 | |||||||||||||||
Bank premises and equipment, net
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6,825 | 6,910 | 7,031 | 7,125 | 7,250 | |||||||||||||||
Foreclosed real estate owned
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4,962 | 4,293 | 1,364 | 1,009 | 993 | |||||||||||||||
Goodwill and other intangibles
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10,133 | 10,161 | 10,192 | 10,225 | 10,258 | |||||||||||||||
Other assets
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7,783 | 8,051 | 8,598 | 8,650 | 8,574 | |||||||||||||||
TOTAL ASSETS
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$ | 718,213 | $ | 716,862 | $ | 703,234 | $ | 711,234 | $ | 703,771 | ||||||||||
LIABILITIES
|
||||||||||||||||||||
Deposits:
|
||||||||||||||||||||
Non-interest bearing demand
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$ | 102,343 | $ | 103,954 | $ | 93,400 | $ | 92,684 | $ | 101,632 | ||||||||||
Interest-bearing deposits
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445,995 | 450,760 | 446,676 | 448,498 | 447,066 | |||||||||||||||
Total deposits
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548,338 | 554,714 | 540,076 | 541,182 | 548,698 | |||||||||||||||
Other borrowings
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67,296 | 60,992 | 63,746 | 73,675 | 58,422 | |||||||||||||||
Other liabilities
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5,172 | 4,954 | 5,212 | 4,513 | 5,305 | |||||||||||||||
TOTAL LIABILITIES
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620,806 | 620,660 | 609,034 | 619,370 | 612,425 | |||||||||||||||
STOCKHOLDERS' EQUITY
|
97,407 | 96,202 | 94,200 | 91,864 | 91,346 | |||||||||||||||
TOTAL LIABILITIES AND
|
||||||||||||||||||||
STOCKHOLDERS' EQUITY
|
$ | 718,213 | $ | 716,862 | $ | 703,234 | $ | 711,234 | $ | 703,771 |
NORWOOD FINANCIAL CORP.
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||||||||||||||||||||
Consolidated Statements of Income (unaudited)
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||||||||||||||||||||
(dollars in thousands, except per share data)
|
||||||||||||||||||||
September 30
|
June 30
|
March 31
|
December 31
|
September 30
|
||||||||||||||||
Three months ended
|
2014
|
2014
|
2014
|
2013
|
2013
|
|||||||||||||||
INTEREST INCOME
|
||||||||||||||||||||
Loans receivable, including fees
|
$ | 5,972 | $ | 5,933 | $ | 5,980 | $ | 6,019 | $ | 6,202 | ||||||||||
Securities
|
968 | 1,025 | 987 | 972 | 939 | |||||||||||||||
Other
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1 | 2 | 1 | 9 | 5 | |||||||||||||||
Total interest income
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6,941 | 6,960 | 6,968 | 7,000 | 7,146 | |||||||||||||||
INTEREST EXPENSE
|
||||||||||||||||||||
Deposits
|
600 | 618 | 635 | 674 | 701 | |||||||||||||||
Borrowings
|
187 | 187 | 188 | 181 | 175 | |||||||||||||||
Total interest expense
|
787 | 805 | 823 | 855 | 876 | |||||||||||||||
NET INTEREST INCOME
|
6,154 | 6,155 | 6,145 | 6,145 | 6,270 | |||||||||||||||
PROVISION FOR LOAN LOSSES
|
420 | 420 | 420 | 400 | 400 | |||||||||||||||
NET INTEREST INCOME AFTER PROVISION
|
||||||||||||||||||||
FOR LOAN LOSSES
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5,734 | 5,735 | 5,725 | 5,745 | 5,870 | |||||||||||||||
OTHER INCOME
|
||||||||||||||||||||
Service charges and fees
|
587 | 583 | 576 | 578 | 614 | |||||||||||||||
Income from fiduciary activities
|
125 | 99 | 104 | 94 | 111 | |||||||||||||||
Net realized gains on sales of securities
|
301 | 509 | 95 | 291 | 198 | |||||||||||||||
Gains (losses) on sale of loans and servicing rights
|
(15 | ) | 26 | 39 | 121 | (12 | ) | |||||||||||||
Earnings and proceeds on life insurance policies
|
170 | 175 | 168 | 162 | 150 | |||||||||||||||
Other
|
94 | 76 | 71 | 64 | 155 | |||||||||||||||
Total other income
|
1,262 | 1,468 | 1,053 | 1,310 | 1,216 | |||||||||||||||
OTHER EXPENSES
|
||||||||||||||||||||
Salaries and employee benefits
|
2,028 | 2,172 | 2,165 | 2,009 | 2,103 | |||||||||||||||
Occupancy, furniture and equipment, net
|
505 | 518 | 578 | 550 | 507 | |||||||||||||||
Foreclosed real estate owned
|
271 | 396 | 65 | 73 | 217 | |||||||||||||||
FDIC insurance assessment
|
104 | 102 | 114 | 109 | 114 | |||||||||||||||
Other
|
1,216 | 1,285 | 1,210 | 1,357 | 1,232 | |||||||||||||||
Total other expenses
|
4,124 | 4,473 | 4,132 | 4,098 | 4,173 | |||||||||||||||
INCOME BEFORE TAX
|
2,872 | 2,730 | 2,646 | 2,957 | 2,913 | |||||||||||||||
INCOME TAX EXPENSE
|
754 | 696 | 682 | 776 | 777 | |||||||||||||||
NET INCOME
|
$ | 2,118 | $ | 2,034 | $ | 1,964 | $ | 2,181 | $ | 2,136 | ||||||||||
Basic earnings per share
|
$ | 0.58 | $ | 0.56 | $ | 0.54 | $ | 0.60 | $ | 0.59 | ||||||||||
|
||||||||||||||||||||
Diluted earnings per share
|
$ | 0.58 | $ | 0.56 | $ | 0.54 | $ | 0.60 | $ | 0.59 | ||||||||||
Book Value per share
|
$ | 26.30 | $ | 26.14 | $ | 25.88 | $ | 25.43 | $ | 25.54 | ||||||||||
Return on average equity (annualized)
|
8.62 | % | 8.49 | % | 8.46 | % | 9.33 | % | 9.33 | % | ||||||||||
Return on average assets (annualized)
|
1.18 | % | 1.15 | % | 1.13 | % | 1.23 | % | 1.22 | % | ||||||||||
Net interest spread (fte)
|
3.78 | % | 3.77 | % | 3.77 | % | 3.76 | % | 3.89 | % | ||||||||||
Net interest margin (fte)
|
3.92 | % | 3.91 | % | 3.91 | % | 3.91 | % | 4.05 | % | ||||||||||
Allowance for loan losses to total loans
|
1.13 | % | 1.12 | % | 1.15 | % | 1.13 | % | 1.14 | % | ||||||||||
Net charge-offs to average loans (annualized)
|
0.30 | % | 0.43 | % | 0.32 | % | 0.21 | % | 0.49 | % | ||||||||||
Nonperforming loans to total loans
|
1.18 | % | 1.49 | % | 1.92 | % | 1.90 | % | 2.11 | % | ||||||||||
Nonperforming assets to total assets
|
1.52 | % | 1.65 | % | 1.55 | % | 1.48 | % | 1.60 | % |