Date of Report (Date of earliest event reported)
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January 30, 2015
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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: January 30, 2015
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By:
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/s/ Lewis J. Critelli
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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
December 31 |
Year ended
December 31 |
||||||||||||||
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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$ | 6,105 | $ | 6,145 | $ | 24,560 | $ | 24,661 | ||||||||
Tax equivalent basis adjustment using 34% marginal tax rate
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294 | 316 | 1,258 | 1,196 | ||||||||||||
Net interest income on a fully taxable equivalent basis
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$ | 6,399 | $ | 6,461 | $ | 25,818 | $ | 25,857 |
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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||||||||
December 31
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||||||||
2014
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2013
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|||||||
ASSETS
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||||||
Cash and due from banks
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$ | 8,081 | $ | 7,528 | ||||
Interest-bearing deposits with banks
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4,295 | 335 | ||||||
Cash and cash equivalents
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12,376 | 7,863 | ||||||
Securities available for sale
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156,395 | 158,132 | ||||||
Securities held to maturity, fair value 2013: $177
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- | 174 | ||||||
Loans receivable (net of unearned Income)
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501,135 | 503,097 | ||||||
Less: Allowance for loan losses
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5,875 | 5,708 | ||||||
Net loans receivable
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495,260 | 497,389 | ||||||
Regulatory stock, at cost
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1,714 | 2,877 | ||||||
Bank premises and equipment, net
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6,734 | 7,125 | ||||||
Bank owned life insurance
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18,284 | 17,790 | ||||||
Foreclosed real estate owned
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3,726 | 1,009 | ||||||
Accrued interest receivable
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2,339 | 2,422 | ||||||
Goodwill
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9,715 | 9,715 | ||||||
Other intangible assets
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389 | 510 | ||||||
Deferred tax asset
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3,779 | 4,819 | ||||||
Other assets
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924 | 1,409 | ||||||
TOTAL ASSETS
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$ | 711,635 | $ | 711,234 | ||||
LIABILITIES
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||||||||
Deposits:
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||||||||
Non-interest bearing demand
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$ | 98,064 | $ | 92,684 | ||||
Interest-bearing
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461,880 | 448,498 | ||||||
Total deposits
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559,944 | 541,182 | ||||||
Short-term borrowings
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25,695 | 49,914 | ||||||
Other borrowings
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22,200 | 23,761 | ||||||
Accrued interest payable
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966 | 1,022 | ||||||
Other liabilities
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3,789 | 3,491 | ||||||
TOTAL LIABILITIES
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612,594 | 619,370 | ||||||
STOCKHOLDERS' EQUITY
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||||||||
Common Stock, $.10 par value, authorized 10,000,000 shares
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||||||||
issued: 2014: 3,718,018 shares; 2013: 3,708,718 shares
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372 | 371 | ||||||
Surplus
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35,206 | 35,010 | ||||||
Retained earnings
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64,078 | 60,798 | ||||||
Treasury stock, at cost: 2014: 40,576 shares, 2013: 64,628 shares
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(1,077 | ) | (1,713 | ) | ||||
Accumulated other comprehensive income (loss)
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462 | (2,602 | ) | |||||
TOTAL STOCKHOLDERS' EQUITY
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99,041 | 91,864 | ||||||
TOTAL LIABILITIES AND
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||||||||
STOCKHOLDERS' EQUITY
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$ | 711,635 | $ | 711,234 |
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
December 31 |
Twelve Months Ended
December 31 |
|||||||||||||||
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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$ | 5,954 | $ | 6,019 | $ | 23,841 | $ | 24,576 | ||||||||
Securities
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940 | 972 | 3,920 | 3,657 | ||||||||||||
Other
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4 | 9 | 7 | 26 | ||||||||||||
Total Interest income
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6,898 | 7,000 | 27,768 | 28,259 | ||||||||||||
INTEREST EXPENSE
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||||||||||||||||
Deposits
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611 | 674 | 2,463 | 2,848 | ||||||||||||
Short-term borrowings
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15 | 22 | 77 | 66 | ||||||||||||
Other borrowings
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167 | 159 | 668 | 684 | ||||||||||||
Total Interest expense
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793 | 855 | 3,208 | 3,598 | ||||||||||||
NET INTEREST INCOME
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6,105 | 6,145 | 24,560 | 24,661 | ||||||||||||
PROVISION FOR LOAN LOSSES
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420 | 400 | 1,680 | 2,400 | ||||||||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
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5,685 | 5,745 | 22,880 | 22,261 | ||||||||||||
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||||||||||||||||
OTHER INCOME
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||||||||||||||||
Service charges and fees
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604 | 578 | 2,350 | 2,412 | ||||||||||||
Income from fiduciary activities
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109 | 94 | 437 | 379 | ||||||||||||
Net realized gains on sales of securities
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265 | 291 | 1,170 | 881 | ||||||||||||
Gains on sale of loans
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82 | 121 | 132 | 112 | ||||||||||||
Earnings and proceeds on life insurance policies
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171 | 162 | 685 | 1,386 | ||||||||||||
Other
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96 | 64 | 336 | 445 | ||||||||||||
Total other income
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1,327 | 1,310 | 5,110 | 5,615 | ||||||||||||
OTHER EXPENSES
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||||||||||||||||
Salaries and employee benefits
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2,252 | 2,009 | 8,616 | 8,447 | ||||||||||||
Occupancy, furniture and equipment
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516 | 550 | 2,117 | 2,136 | ||||||||||||
Data processing related
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249 | 218 | 929 | 891 | ||||||||||||
Taxes, other than income
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161 | 179 | 649 | 710 | ||||||||||||
Professional Fees
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196 | 128 | 671 | 626 | ||||||||||||
FDIC Insurance assessment
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100 | 109 | 420 | 444 | ||||||||||||
Foreclosed real estate owned
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822 | 73 | 1,555 | 567 | ||||||||||||
Other
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701 | 832 | 2,770 | 2,884 | ||||||||||||
Total other expenses
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4,997 | 4,098 | 17,727 | 16,705 | ||||||||||||
INCOME BEFORE TAX
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2,015 | 2,957 | 10,263 | 11,171 | ||||||||||||
INCOME TAX EXPENSE
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474 | 776 | 2,606 | 2,706 | ||||||||||||
NET INCOME
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$ | 1,541 | $ | 2,181 | $ | 7,657 | $ | 8,465 | ||||||||
Basic earnings per share
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$ | 0.42 | $ | 0.60 | $ | 2.10 | $ | 2.33 | ||||||||
Diluted earnings per share
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$ | 0.42 | $ | 0.60 | $ | 2.10 | $ | 2.33 |
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 December 31
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2014
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2013
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||||||
Net interest income
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$ | 6,105 | $ | 6,145 | ||||
Net income
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1,541 | 2,181 | ||||||
Net interest spread (fully taxable equivalent)
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3.72 | % | 3.76 | % | ||||
Net interest margin (fully taxable equivalent)
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3.87 | % | 3.91 | % | ||||
Return on average assets
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0.86 | % | 1.23 | % | ||||
Return on average equity
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6.17 | % | 9.33 | % | ||||
Basic earnings per share
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$ | 0.42 | $ | 0.60 | ||||
Diluted earnings per share
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$ | 0.42 | $ | 0.60 | ||||
For the Twelve Months Ended December 31
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||||||||
Net interest income
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$ | 24,560 | $ | 24,661 | ||||
Net income
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7,657 | 8,465 | ||||||
Net interest spread (fully taxable equivalent)
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3.76 | % | 3.85 | % | ||||
Net interest margin (fully taxable equivalent)
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3.90 | % | 4.00 | % | ||||
Return on average assets
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1.08 | % | 1.23 | % | ||||
Return on average equity
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7.92 | % | 9.13 | % | ||||
Basic earnings per share
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$ | 2.10 | $ | 2.33 | ||||
Diluted earnings per share
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$ | 2.10 | $ | 2.33 | ||||
As of December 31
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||||||||
Total assets
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$ | 711,635 | $ | 711,234 | ||||
Total loans receivable
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501,135 | 503,097 | ||||||
Allowance for loan losses
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5,875 | 5,708 | ||||||
Total deposits
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559,944 | 541,182 | ||||||
Stockholders' equity
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99,041 | 91,864 | ||||||
Trust assets under management
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134,888 | 126,673 | ||||||
Book value per share
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$ | 26.30 | $ | 25.43 | ||||
Equity to total assets
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13.92 | % | 12.92 | % | ||||
Allowance to total loans receivable
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1.17 | % | 1.13 | % | ||||
Nonperforming loans to total loans
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1.12 | % | 1.90 | % | ||||
Nonperforming assets to total assets
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1.31 | % | 1.48 | % |
NORWOOD FINANCIAL CORP.
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|||||||||||||||||||
Consolidated Balance Sheets (unaudited)
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(dollars in thousands)
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||||||||||||||||||||
December 31
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September 30
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June 30
|
March 31
|
December 31
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||||||||||||||||
2014
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2014
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2014
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2014
|
2013
|
||||||||||||||||
ASSETS
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||||||||||||||||||||
Cash and due from banks
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$ | 8,081 | $ | 13,105 | $ | 12,196 | $ | 8,607 | $ | 7,528 | ||||||||||
Interest-bearing deposits with banks
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4,295 | 158 | 3,182 | 142 | 335 | |||||||||||||||
Cash and cash equivalents
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12,376 | 13,263 | 15,378 | 8,749 | 7,863 | |||||||||||||||
Securities available for sale
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156,395 | 158,701 | 154,925 | 156,165 | 158,132 | |||||||||||||||
Securities held to maturity
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- | - | - | 175 | 174 | |||||||||||||||
Loans receivable (net of unearned income)
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501,135 | 500,844 | 502,316 | 496,016 | 503,097 | |||||||||||||||
Less: Allowance for loan losses
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5,875 | 5,651 | 5,611 | 5,727 | 5,708 | |||||||||||||||
Net loans receivable
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495,260 | 495,193 | 496,705 | 490,289 | 497,389 | |||||||||||||||
Regulatory stock, at cost
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1,714 | 3,210 | 2,437 | 2,741 | 2,877 | |||||||||||||||
Bank owned life insurance
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18,284 | 18,143 | 18,002 | 17,930 | 17,790 | |||||||||||||||
Bank premises and equipment, net
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6,734 | 6,825 | 6,910 | 7,031 | 7,125 | |||||||||||||||
Foreclosed real estate owned
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3,726 | 4,962 | 4,293 | 1,364 | 1,009 | |||||||||||||||
Goodwill and other intangibles
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10,104 | 10,133 | 10,161 | 10,192 | 10,225 | |||||||||||||||
Other assets
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7,042 | 7,783 | 8,051 | 8,598 | 8,650 | |||||||||||||||
TOTAL ASSETS
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$ | 711,635 | $ | 718,213 | $ | 716,862 | $ | 703,234 | $ | 711,234 | ||||||||||
LIABILITIES
|
||||||||||||||||||||
Deposits:
|
||||||||||||||||||||
Non-interest bearing demand
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$ | 98,064 | $ | 102,343 | $ | 103,954 | $ | 93,400 | $ | 92,684 | ||||||||||
Interest-bearing deposits
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461,880 | 445,995 | 450,760 | 446,676 | 448,498 | |||||||||||||||
Total deposits
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559,944 | 548,338 | 554,714 | 540,076 | 541,182 | |||||||||||||||
Other borrowings
|
47,895 | 67,296 | 60,992 | 63,746 | 73,675 | |||||||||||||||
Other liabilities
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4,755 | 5,172 | 4,954 | 5,212 | 4,513 | |||||||||||||||
TOTAL LIABILITIES
|
612,594 | 620,806 | 620,660 | 609,034 | 619,370 | |||||||||||||||
STOCKHOLDERS' EQUITY
|
99,041 | 97,407 | 96,202 | 94,200 | 91,864 | |||||||||||||||
TOTAL LIABILITIES AND
|
||||||||||||||||||||
STOCKHOLDERS' EQUITY
|
$ | 711,635 | $ | 718,213 | $ | 716,862 | $ | 703,234 | $ | 711,234 |
NORWOOD FINANCIAL CORP.
|
||||||||||||||||||||
Consolidated Statements of Income (unaudited)
|
||||||||||||||||||||
(dollars in thousands, except per share data)
|
||||||||||||||||||||
December 31
|
September 30
|
June 30
|
March 31
|
December 31
|
||||||||||||||||
Three months ended
|
2014
|
2014
|
2014
|
2014
|
2013
|
|||||||||||||||
INTEREST INCOME
|
||||||||||||||||||||
Loans receivable, including fees
|
$ | 5,954 | $ | 5,972 | $ | 5,933 | $ | 5,980 | $ | 6,019 | ||||||||||
Securities
|
940 | 968 | 1,025 | 987 | 972 | |||||||||||||||
Other
|
4 | 1 | 2 | 1 | 9 | |||||||||||||||
Total interest income
|
6,898 | 6,941 | 6,960 | 6,968 | 7,000 | |||||||||||||||
INTEREST EXPENSE
|
||||||||||||||||||||
Deposits
|
611 | 600 | 618 | 635 | 674 | |||||||||||||||
Borrowings
|
182 | 187 | 187 | 188 | 181 | |||||||||||||||
Total interest expense
|
793 | 787 | 805 | 823 | 855 | |||||||||||||||
NET INTEREST INCOME
|
6,105 | 6,154 | 6,155 | 6,145 | 6,145 | |||||||||||||||
PROVISION FOR LOAN LOSSES
|
420 | 420 | 420 | 420 | 400 | |||||||||||||||
NET INTEREST INCOME AFTER PROVISION
|
||||||||||||||||||||
FOR LOAN LOSSES
|
5,685 | 5,734 | 5,735 | 5,725 | 5,745 | |||||||||||||||
OTHER INCOME
|
||||||||||||||||||||
Service charges and fees
|
604 | 587 | 583 | 576 | 578 | |||||||||||||||
Income from fiduciary activities
|
109 | 125 | 99 | 104 | 94 | |||||||||||||||
Net realized gains on sales of securities
|
265 | 301 | 509 | 95 | 291 | |||||||||||||||
Gains (losses) on sale of loans and servicing rights
|
82 | (15 | ) | 26 | 39 | 121 | ||||||||||||||
Earnings and proceeds on life insurance policies
|
171 | 170 | 175 | 168 | 162 | |||||||||||||||
Other
|
96 | 94 | 76 | 71 | 64 | |||||||||||||||
Total other income
|
1,327 | 1,262 | 1,468 | 1,053 | 1,310 | |||||||||||||||
OTHER EXPENSES
|
||||||||||||||||||||
Salaries and employee benefits
|
2,252 | 2,028 | 2,172 | 2,165 | 2,009 | |||||||||||||||
Occupancy, furniture and equipment, net
|
516 | 505 | 518 | 578 | 550 | |||||||||||||||
Foreclosed real estate owned
|
822 | 271 | 396 | 65 | 73 | |||||||||||||||
FDIC insurance assessment
|
100 | 104 | 102 | 114 | 109 | |||||||||||||||
Other
|
1,307 | 1,216 | 1,285 | 1,210 | 1,357 | |||||||||||||||
Total other expenses
|
4,997 | 4,124 | 4,473 | 4,132 | 4,098 | |||||||||||||||
INCOME BEFORE TAX
|
2,015 | 2,872 | 2,730 | 2,646 | 2,957 | |||||||||||||||
INCOME TAX EXPENSE
|
474 | 754 | 696 | 682 | 776 | |||||||||||||||
NET INCOME
|
$ | 1,541 | $ | 2,118 | $ | 2,034 | $ | 1,964 | $ | 2,181 | ||||||||||
Basic earnings per share
|
$ | 0.42 | $ | 0.58 | $ | 0.56 | $ | 0.54 | $ | 0.60 | ||||||||||
|
||||||||||||||||||||
Diluted earnings per share
|
$ | 0.42 | $ | 0.58 | $ | 0.56 | $ | 0.54 | $ | 0.60 | ||||||||||
Book Value per share
|
$ | 26.30 | $ | 26.30 | $ | 26.14 | $ | 25.88 | $ | 25.43 | ||||||||||
Return on average equity (annualized)
|
6.17 | % | 8.62 | % | 8.49 | % | 8.46 | % | 9.33 | % | ||||||||||
Return on average assets (annualized)
|
0.86 | % | 1.18 | % | 1.15 | % | 1.13 | % | 1.23 | % | ||||||||||
Net interest spread (fte)
|
3.72 | % | 3.78 | % | 3.77 | % | 3.77 | % | 3.76 | % | ||||||||||
Net interest margin (fte)
|
3.87 | % | 3.92 | % | 3.91 | % | 3.91 | % | 3.91 | % | ||||||||||
Allowance for loan losses to total loans
|
1.17 | % | 1.13 | % | 1.12 | % | 1.15 | % | 1.13 | % | ||||||||||
Net charge-offs to average loans (annualized)
|
0.16 | % | 0.30 | % | 0.43 | % | 0.32 | % | 0.21 | % | ||||||||||
Nonperforming loans to total loans
|
1.12 | % | 1.18 | % | 1.49 | % | 1.92 | % | 1.90 | % | ||||||||||
Nonperforming assets to total assets
|
1.31 | % | 1.52 | % | 1.65 | % | 1.55 | % | 1.48 | % |