Date of Report (Date of earliest event reported)
|
July 19, 2017 |
|
NORWOOD FINANCIAL CORP.
|
(Exact name of registrant as specified in its charter)
|
Pennsylvania
|
0-28364
|
23-2828306
|
(State or other jurisdiction
of incorporation)
|
(Commission
File Number)
|
(IRS Employer
Identification No.)
|
717 Main Street, Honesdale, Pennsylvania
|
18431
|
(Address of principal executive offices)
|
(Zip Code)
|
Registrant's telephone number, including area code:
|
(570) 253-1455 |
|
Not Applicable
|
(Former name or former address, if changed since last report)
|
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):
|
|||
☐
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
||
☐
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
||
☐
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
||
☐
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).
|
NORWOOD FINANCIAL CORP.
|
|||
Date:July 19, 2017 |
By:
|
/s/ Lewis J. Critelli
|
|
Lewis J. Critelli
President and Chief Executive Officer
(Duly Authorized Representative)
|
Three months ended June 30
|
Six months ended June 30
|
|||||||||||||||
(dollars in thousands)
|
2017
|
2016
|
2017
|
2016
|
||||||||||||
Net Interest Income
|
$
|
8,656
|
$
|
6,394
|
$
|
17,154
|
$
|
12,569
|
||||||||
Taxable equivalent basis adjustment
using 34% marginal tax rate
|
543
|
364
|
1,089
|
723
|
||||||||||||
Net interest income on a fully taxable
equivalent basis
|
$
|
9,199
|
$
|
6,758
|
$
|
18,243
|
$
|
13,292
|
||||||||
NORWOOD FINANCIAL CORP.
|
||||||||
Consolidated Balance Sheets
|
||||||||
(dollars in thousands, except share data)
|
||||||||
(unaudited)
|
||||||||
June 30
|
||||||||
2017
|
2016
|
|||||||
ASSETS
|
||||||||
Cash and due from banks
|
$
|
16,055
|
$
|
8,171
|
||||
Interest-bearing deposits with banks
|
348
|
4,444
|
||||||
Cash and cash equivalents
|
16,403
|
12,615
|
||||||
Securities available for sale
|
300,667
|
129,721
|
||||||
Loans receivable
|
735,026
|
581,220
|
||||||
Less: Allowance for loan losses
|
7,419
|
5,798
|
||||||
Net loans receivable
|
727,607
|
575,422
|
||||||
Regulatory stock, at cost
|
2,435
|
2,228
|
||||||
Bank premises and equipment, net
|
12,953
|
6,328
|
||||||
Bank owned life insurance
|
36,575
|
19,082
|
||||||
Foreclosed real estate owned
|
4,523
|
5,414
|
||||||
Accrued interest receivable
|
3,417
|
2,289
|
||||||
Goodwill
|
11,331
|
9,715
|
||||||
Other intangible assets
|
531
|
237
|
||||||
Deferred tax asset
|
8,181
|
2,222
|
||||||
Other assets
|
2,690
|
2,556
|
||||||
TOTAL ASSETS
|
$
|
1,127,313
|
$
|
767,829
|
||||
LIABILITIES
|
||||||||
Deposits:
|
||||||||
Non-interest bearing demand
|
$
|
200,364
|
$
|
121,743
|
||||
Interest-bearing
|
732,107
|
462,516
|
||||||
Total deposits
|
932,471
|
584,259
|
||||||
Short-term borrowings
|
42,192
|
38,100
|
||||||
Other borrowings
|
25,330
|
36,579
|
||||||
Accrued interest payable
|
942
|
891
|
||||||
Other liabilities
|
10,211
|
3,409
|
||||||
TOTAL LIABILITIES
|
1,011,146
|
663,238
|
||||||
STOCKHOLDERS' EQUITY
|
||||||||
Common Stock, $.10 par value, authorized 10,000,000 shares
|
||||||||
issued: 2017: 4,164,723 shares, 2016: 3,724,668 shares
|
416
|
373
|
||||||
Surplus
|
47,645
|
35,430
|
||||||
Retained earnings
|
69,660
|
66,876
|
||||||
Treasury stock, at cost: 2017: 566 shares, 2016: 33,444 shares
|
(22
|
)
|
(926
|
)
|
||||
Accumulated other comprehensive (loss) income
|
(1,532
|
)
|
2,838
|
|||||
TOTAL STOCKHOLDERS' EQUITY
|
116,167
|
104,591
|
||||||
TOTAL LIABILITIES AND
|
||||||||
STOCKHOLDERS' EQUITY
|
$
|
1,127,313
|
$
|
767,829
|
NORWOOD FINANCIAL CORP.
|
||||||||||||||||
Consolidated Statements of Income
|
||||||||||||||||
(dollars in thousands, except per share data)
|
||||||||||||||||
(unaudited)
|
||||||||||||||||
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
INTEREST INCOME
|
||||||||||||||||
Loans receivable, including fees
|
$
|
7,925
|
$
|
6,351
|
$
|
15,731
|
$
|
12,485
|
||||||||
Securities
|
1,633
|
878
|
3,251
|
1,768
|
||||||||||||
Other
|
24
|
5
|
35
|
7
|
||||||||||||
Total Interest income
|
9,582
|
7,234
|
19,017
|
14,260
|
||||||||||||
INTEREST EXPENSE
|
||||||||||||||||
Deposits
|
797
|
580
|
1,563
|
1,161
|
||||||||||||
Short-term borrowings
|
28
|
37
|
56
|
77
|
||||||||||||
Other borrowings
|
101
|
223
|
244
|
453
|
||||||||||||
Total Interest expense
|
926
|
840
|
1,863
|
1,691
|
||||||||||||
NET INTEREST INCOME
|
8,656
|
6,394
|
17,154
|
12,569
|
||||||||||||
PROVISION FOR LOAN LOSSES
|
600
|
700
|
1,200
|
1,150
|
||||||||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
|
8,056
|
5,694
|
15,954
|
11,419
|
||||||||||||
OTHER INCOME
|
||||||||||||||||
Service charges and fees
|
1,016
|
604
|
1,951
|
1,178
|
||||||||||||
Income from fiduciary activities
|
128
|
114
|
235
|
216
|
||||||||||||
Net realized gains on sales of securities
|
31
|
205
|
37
|
270
|
||||||||||||
Gains on sales of loans, net
|
67
|
18
|
67
|
47
|
||||||||||||
Earnings and proceeds on life insurance policies
|
275
|
166
|
530
|
333
|
||||||||||||
Other
|
139
|
116
|
479
|
246
|
||||||||||||
Total other income
|
1,656
|
1,223
|
3,299
|
2,290
|
||||||||||||
OTHER EXPENSES
|
||||||||||||||||
Salaries and employee benefits
|
3,212
|
2,248
|
6,430
|
4,551
|
||||||||||||
Occupancy, furniture and equipment
|
809
|
487
|
1,720
|
982
|
||||||||||||
Data processing and related operations
|
324
|
255
|
668
|
526
|
||||||||||||
Taxes, other than income
|
227
|
124
|
460
|
329
|
||||||||||||
Professional fees
|
240
|
181
|
489
|
332
|
||||||||||||
FDIC Insurance assessment
|
91
|
117
|
186
|
231
|
||||||||||||
Foreclosed real estate
|
152
|
432
|
724
|
462
|
||||||||||||
Other
|
1,075
|
684
|
2,067
|
1,463
|
||||||||||||
Total other expenses
|
6,130
|
4,528
|
12,744
|
8,876
|
||||||||||||
INCOME BEFORE TAX
|
3,582
|
2,389
|
6,509
|
4,833
|
||||||||||||
INCOME TAX EXPENSE
|
858
|
511
|
1,409
|
1,079
|
||||||||||||
NET INCOME
|
$
|
2,724
|
$
|
1,878
|
$
|
5,100
|
$
|
3,754
|
||||||||
Basic earnings per share
|
$
|
0.66
|
$
|
0.51
|
$
|
1.23
|
$
|
1.02
|
||||||||
Diluted earnings per share
|
$
|
0.65
|
$
|
0.51
|
$
|
1.22
|
$
|
1.02
|
NORWOOD FINANCIAL CORP.
|
||||||||
Financial Highlights (Unaudited)
|
||||||||
(dollars in thousands, except per share data)
|
||||||||
For the Three Months Ended June 30
|
2017
|
2016
|
||||||
Net interest income
|
$
|
8,656
|
$
|
6,394
|
||||
Net income
|
2,724
|
1,878
|
||||||
Net interest spread (fully taxable equivalent)
|
3.44
|
%
|
3.63
|
%
|
||||
Net interest margin (fully taxable equivalent)
|
3.54
|
%
|
3.79
|
%
|
||||
Return on average assets
|
0.97
|
%
|
0.99
|
%
|
||||
Return on average equity
|
9.45
|
%
|
7.28
|
%
|
||||
Basic earnings per share
|
$
|
0.66
|
$
|
0.51
|
||||
Diluted earnings per share
|
$
|
0.65
|
$
|
0.51
|
||||
For the Six Months Ended June 30
|
2017
|
2016
|
||||||
Net interest income
|
$
|
17,154
|
$
|
12,569
|
||||
Net income
|
5,100
|
3,754
|
||||||
Net interest spread (fully taxable equivalent)
|
3.42
|
%
|
3.59
|
%
|
||||
Net interest margin (fully taxable equivalent)
|
3.53
|
%
|
3.74
|
%
|
||||
Return on average assets
|
0.92
|
%
|
0.99
|
%
|
||||
Return on average equity
|
9.00
|
%
|
7.31
|
%
|
||||
Basic earnings per share
|
$
|
1.23
|
$
|
1.02
|
||||
Diluted earnings per share
|
$
|
1.22
|
$
|
1.02
|
||||
As of June 30
|
||||||||
Total assets
|
$
|
1,127,313
|
$
|
767,829
|
||||
Total loans receivable
|
735,026
|
581,220
|
||||||
Allowance for loan losses
|
7,419
|
5,798
|
||||||
Total deposits
|
932,471
|
584,259
|
||||||
Stockholders' equity
|
116,167
|
104,591
|
||||||
Trust assets under management
|
146,307
|
134,126
|
||||||
Book value per share
|
$
|
27.43
|
$
|
27.99
|
||||
Tangible book value per share
|
$
|
24.55
|
$
|
25.28
|
||||
Equity to total assets
|
10.30
|
%
|
13.62
|
%
|
||||
Allowance to total loans receivable
|
1.01
|
%
|
1.00
|
%
|
||||
Nonperforming loans to total loans
|
0.35
|
%
|
0.21
|
%
|
||||
Nonperforming assets to total assets
|
0.63
|
%
|
0.86
|
%
|
NORWOOD FINANCIAL CORP.
|
||||||||||||||||||||
Consolidated Balance Sheets (unaudited)
|
||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||
June 30
|
March 31
|
December 31
|
September 30
|
June 30
|
||||||||||||||||
2017
|
2017
|
2016
|
2016
|
2016
|
||||||||||||||||
ASSETS
|
||||||||||||||||||||
Cash and due from banks
|
$
|
16,055
|
$
|
12,057
|
$
|
14,900
|
$
|
19,404
|
$
|
8,171
|
||||||||||
Interest-bearing deposits with banks
|
348
|
7,785
|
2,274
|
13,729
|
4,444
|
|||||||||||||||
Cash and cash equivalents
|
16,403
|
19,842
|
17,174
|
33,133
|
12,615
|
|||||||||||||||
Securities available for sale
|
300,667
|
295,801
|
302,564
|
310,126
|
129,721
|
|||||||||||||||
Loans receivable
|
735,026
|
719,443
|
713,889
|
706,199
|
581,220
|
|||||||||||||||
Less: Allowance for loan losses
|
7,419
|
6,901
|
6,463
|
6,164
|
5,798
|
|||||||||||||||
Net loans receivable
|
727,607
|
712,542
|
707,426
|
700,035
|
575,422
|
|||||||||||||||
Regulatory stock, at cost
|
2,435
|
1,939
|
2,119
|
2,351
|
2,228
|
|||||||||||||||
Bank owned life insurance
|
36,575
|
36,352
|
36,133
|
35,889
|
19,082
|
|||||||||||||||
Bank premises and equipment, net
|
12,953
|
13,073
|
13,531
|
13,617
|
6,328
|
|||||||||||||||
Foreclosed real estate owned
|
4,523
|
4,703
|
5,302
|
5,386
|
5,414
|
|||||||||||||||
Goodwill and other intangibles
|
11,862
|
11,902
|
12,291
|
12,331
|
9,952
|
|||||||||||||||
Other assets
|
14,288
|
15,461
|
14,643
|
12,189
|
7,067
|
|||||||||||||||
TOTAL ASSETS
|
$
|
1,127,313
|
$
|
1,111,615
|
$
|
1,111,183
|
$
|
1,125,057
|
$
|
767,829
|
||||||||||
.
|
||||||||||||||||||||
LIABILITIES
|
||||||||||||||||||||
Deposits:
|
||||||||||||||||||||
Non-interest bearing demand
|
$
|
200,364
|
$
|
192,735
|
$
|
191,445
|
$
|
200,481
|
$
|
121,743
|
||||||||||
Interest-bearing deposits
|
732,107
|
738,678
|
733,940
|
721,763
|
462,516
|
|||||||||||||||
Total deposits
|
932,471
|
931,413
|
925,385
|
922,244
|
584,259
|
|||||||||||||||
Other borrowings
|
67,522
|
57,260
|
64,812
|
83,946
|
74,679
|
|||||||||||||||
Other liabilities
|
11,153
|
9,990
|
9,907
|
3,167
|
4,300
|
|||||||||||||||
TOTAL LIABILITIES
|
1,011,146
|
998,663
|
1,000,104
|
1,009,357
|
663,238
|
|||||||||||||||
STOCKHOLDERS' EQUITY
|
116,167
|
112,952
|
111,079
|
115,700
|
104,591
|
|||||||||||||||
TOTAL LIABILITIES AND
|
||||||||||||||||||||
STOCKHOLDERS' EQUITY
|
$
|
1,127,313
|
$
|
1,111,615
|
$
|
1,111,183
|
$
|
1,125,057
|
$
|
767,829
|
NORWOOD FINANCIAL CORP.
|
||||||||||||||||||||
Consolidated Statements of Income (unaudited)
|
||||||||||||||||||||
(dollars in thousands, except per share data)
|
||||||||||||||||||||
June 30
|
March 31
|
December 31
|
September 30
|
June 30
|
||||||||||||||||
Three months ended
|
2017
|
2017
|
2016
|
2016
|
2016
|
|||||||||||||||
INTEREST INCOME
|
||||||||||||||||||||
Loans receivable, including fees
|
$
|
7,925
|
$
|
7,806
|
$
|
7,858
|
$
|
7,267
|
$
|
6,351
|
||||||||||
Securities
|
1,633
|
1,618
|
1,584
|
1,239
|
878
|
|||||||||||||||
Other
|
24
|
10
|
14
|
22
|
5
|
|||||||||||||||
Total interest income
|
9,582
|
9,434
|
9,456
|
8,528
|
7,234
|
|||||||||||||||
INTEREST EXPENSE
|
||||||||||||||||||||
Deposits
|
797
|
766
|
765
|
677
|
580
|
|||||||||||||||
Borrowings
|
129
|
171
|
240
|
281
|
260
|
|||||||||||||||
Total interest expense
|
926
|
937
|
1,005
|
958
|
840
|
|||||||||||||||
NET INTEREST INCOME
|
8,656
|
8,497
|
8,451
|
7,570
|
6,394
|
|||||||||||||||
PROVISION FOR LOAN LOSSES
|
600
|
600
|
450
|
450
|
700
|
|||||||||||||||
NET INTEREST INCOME AFTER PROVISION
|
||||||||||||||||||||
FOR LOAN LOSSES
|
8,056
|
7,897
|
8,001
|
7,120
|
5,694
|
|||||||||||||||
OTHER INCOME
|
||||||||||||||||||||
Service charges and fees
|
1,016
|
936
|
951
|
840
|
604
|
|||||||||||||||
Income from fiduciary activities
|
128
|
106
|
107
|
126
|
114
|
|||||||||||||||
Net realized gains on sales of securities
|
31
|
6
|
15
|
0
|
205
|
|||||||||||||||
Gains (losses) on sales of loans, net
|
67
|
0
|
0
|
(11
|
)
|
18
|
||||||||||||||
Earnings and proceeds on life insurance policies
|
275
|
255
|
272
|
283
|
166
|
|||||||||||||||
Other
|
139
|
340
|
145
|
161
|
116
|
|||||||||||||||
Total other income
|
1,656
|
1,643
|
1,490
|
1,399
|
1,223
|
|||||||||||||||
OTHER EXPENSES
|
||||||||||||||||||||
Salaries and employee benefits
|
3,212
|
3,219
|
3,308
|
3,070
|
2,248
|
|||||||||||||||
Occupancy, furniture and equipment, net
|
809
|
911
|
889
|
755
|
487
|
|||||||||||||||
Foreclosed real estate
|
152
|
572
|
98
|
119
|
432
|
|||||||||||||||
FDIC insurance assessment
|
91
|
95
|
10
|
170
|
117
|
|||||||||||||||
Merger related
|
0
|
0
|
142
|
1,659
|
5
|
|||||||||||||||
Other
|
1,866
|
1,817
|
2,121
|
1,906
|
1,239
|
|||||||||||||||
Total other expenses
|
6,130
|
6,614
|
6,568
|
7,679
|
4,528
|
|||||||||||||||
INCOME BEFORE TAX
|
3,582
|
2,926
|
2,923
|
840
|
2,389
|
|||||||||||||||
INCOME TAX EXPENSE
|
858
|
550
|
577
|
228
|
511
|
|||||||||||||||
NET INCOME
|
$
|
2,724
|
$
|
2,376
|
$
|
2,346
|
$
|
612
|
$
|
1,878
|
||||||||||
Basic earnings per share
|
$
|
0.66
|
$
|
0.57
|
$
|
0.57
|
$
|
0.15
|
$
|
0.51
|
||||||||||
Diluted earnings per share
|
$
|
0.65
|
$
|
0.57
|
$
|
0.56
|
$
|
0.15
|
$
|
0.51
|
||||||||||
Book Value per share
|
$
|
27.43
|
$
|
27.09
|
$
|
26.15
|
$
|
25.94
|
$
|
27.99
|
||||||||||
Tangible Book Value per share
|
24.55
|
24.18
|
23.51
|
23.39
|
25.28
|
|||||||||||||||
Return on average assets (annualized)
|
0.97
|
%
|
0.87
|
%
|
0.83
|
%
|
0.69
|
%
|
0.99
|
%
|
||||||||||
Return on average equity (annualized)
|
9.45
|
%
|
8.54
|
%
|
8.17
|
%
|
5.45
|
%
|
7.28
|
%
|
||||||||||
Net interest spread (fte)
|
3.44
|
%
|
3.40
|
%
|
3.38
|
%
|
3.37
|
%
|
3.63
|
%
|
||||||||||
Net interest margin (fte)
|
3.54
|
%
|
3.51
|
%
|
3.49
|
%
|
3.50
|
%
|
3.79
|
%
|
||||||||||
Allowance for loan losses to total loans
|
1.01
|
%
|
0.96
|
%
|
0.91
|
%
|
0.87
|
%
|
1.00
|
%
|
||||||||||
Net charge-offs to average loans (annualized)
|
0.05
|
%
|
0.09
|
%
|
0.09
|
%
|
0.05
|
%
|
1.78
|
%
|
||||||||||
Nonperforming loans to total loans
|
0.35
|
%
|
0.28
|
%
|
0.25
|
%
|
0.32
|
%
|
0.21
|
%
|
||||||||||
Nonperforming assets to total assets
|
0.63
|
%
|
0.60
|
%
|
0.64
|
%
|
0.68
|
%
|
0.86
|
%
|