Date of Report (Date of earliest event reported)
|
July 26, 2018
|
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)
|
☐ |
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)).
|
(d) |
Exhibits:
|
No. |
Description
|
99.1 |
Press Release, dated July 26, 2018
|
NORWOOD FINANCIAL CORP.
|
||||
Date:
|
July 26, 2018
|
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)
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
Net Interest Income
|
$
|
9,215
|
$
|
8,656
|
$
|
18,022
|
$
|
17,154
|
||||||||
Taxable equivalent basis adjustment using marginal tax rate
|
269
|
543
|
545
|
1,089
|
||||||||||||
Net interest income on a fully taxable equivalent basis
|
$
|
9,484
|
$
|
9,199
|
$
|
18,567
|
$
|
18,243
|
Three months ended
June 30
|
Six months ended
June 30
|
|||||||||||||||
(dollars in thousands)
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
Average equity
|
$
|
115,042
|
$
|
115,690
|
$
|
115,180
|
$
|
114,237
|
||||||||
Goodwill and other intangibles
|
(11,738
|
)
|
(11,878
|
)
|
(11,755
|
)
|
(11,997
|
)
|
||||||||
Average tangible equity
|
$
|
103,387
|
$
|
103,812
|
$
|
103,425
|
$
|
102,240
|
Contact:
|
William S. Lance
|
Executive Vice President &
|
|
Chief Financial Officer
|
|
NORWOOD FINANCIAL CORP
|
|
570-253-8505
|
|
www.waynebank.com
|
June 30
|
||||||||
2018
|
2017
|
|||||||
ASSETS
|
||||||||
Cash and due from banks
|
$
|
15,193
|
$
|
16,055
|
||||
Interest-bearing deposits with banks
|
914
|
348
|
||||||
Cash and cash equivalents
|
16,107
|
16,403
|
||||||
Securities available for sale
|
259,442
|
300,667
|
||||||
Loans receivable
|
803,773
|
735,026
|
||||||
Less: Allowance for loan losses
|
8,326
|
7,419
|
||||||
Net loans receivable
|
795,447
|
727,607
|
||||||
Regulatory stock, at cost
|
2,313
|
2,435
|
||||||
Bank premises and equipment, net
|
13,894
|
12,953
|
||||||
Bank owned life insurance
|
37,485
|
36,575
|
||||||
Foreclosed real estate owned
|
1,386
|
4,523
|
||||||
Accrued interest receivable
|
3,672
|
3,417
|
||||||
Goodwill
|
11,331
|
11,331
|
||||||
Other intangible assets
|
394
|
531
|
||||||
Deferred tax asset
|
5,885
|
8,181
|
||||||
Other assets
|
3,237
|
2,690
|
||||||
TOTAL ASSETS
|
$
|
1,150,593
|
$
|
1,127,313
|
||||
LIABILITIES
|
||||||||
Deposits:
|
||||||||
Non-interest bearing demand
|
$
|
216,472
|
$
|
200,364
|
||||
Interest-bearing
|
734,417
|
732,107
|
||||||
Total deposits
|
950,889
|
932,471
|
||||||
Short-term borrowings
|
43,325
|
42,192
|
||||||
Other borrowings
|
30,283
|
25,330
|
||||||
Accrued interest payable
|
1,461
|
942
|
||||||
Other liabilities
|
9,102
|
10,211
|
||||||
TOTAL LIABILITIES
|
1,035,060
|
1,011,146
|
||||||
STOCKHOLDERS' EQUITY
|
||||||||
Common Stock, $.10 par value, authorized 10,000,000 shares issued: 2018: 6,266,388 shares, 2017: 6,247,085 shares
|
627
|
416
|
||||||
Surplus
|
47,815
|
47,645
|
||||||
Retained earnings
|
74,315
|
69,660
|
||||||
Treasury stock, at cost: 2018: 5,729 shares, 2017: 849 shares
|
(188
|
)
|
(22
|
)
|
||||
Accumulated other comprehensive loss
|
(7,036
|
)
|
(1,532
|
)
|
||||
TOTAL STOCKHOLDERS' EQUITY
|
115,533
|
116,167
|
||||||
|
||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
1,150,593
|
$
|
1,127,313
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
INTEREST INCOME
|
||||||||||||||||
Loans receivable, including fees
|
$
|
8,857
|
$
|
7,925
|
$
|
17,344
|
$
|
15,731
|
||||||||
Securities
|
1,536
|
1,633
|
3,060
|
3,251
|
||||||||||||
Other
|
43
|
24
|
61
|
35
|
||||||||||||
Total Interest income
|
10,436
|
9,582
|
20,465
|
19,017
|
||||||||||||
INTEREST EXPENSE
|
||||||||||||||||
Deposits
|
1,052
|
797
|
2,082
|
1,563
|
||||||||||||
Short-term borrowings
|
38
|
28
|
90
|
56
|
||||||||||||
Other borrowings
|
131
|
101
|
271
|
244
|
||||||||||||
Total Interest expense
|
1,221
|
926
|
2,443
|
1,863
|
||||||||||||
NET INTEREST INCOME
|
9,215
|
8,656
|
18,022
|
17,154
|
||||||||||||
PROVISION FOR LOAN LOSSES
|
425
|
600
|
975
|
1,200
|
||||||||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
|
8,790
|
8,056
|
17,047
|
15,954
|
||||||||||||
OTHER INCOME
|
||||||||||||||||
Service charges and fees
|
1,101
|
1,016
|
2,082
|
1,951
|
||||||||||||
Income from fiduciary activities
|
175
|
128
|
311
|
235
|
||||||||||||
Net realized gains on sales of securities
|
58
|
31
|
200
|
37
|
||||||||||||
Gains on sales of loans, net
|
-
|
67
|
-
|
67
|
||||||||||||
Gains on sale of deposits
|
-
|
-
|
-
|
209
|
||||||||||||
Earnings and proceeds on life insurance policies
|
279
|
275
|
552
|
530
|
||||||||||||
Other
|
161
|
139
|
323
|
270
|
||||||||||||
Total other income
|
1,774
|
1,656
|
3,468
|
3,299
|
||||||||||||
OTHER EXPENSES
|
||||||||||||||||
Salaries and employee benefits
|
3,406
|
3,212
|
6,868
|
6,430
|
||||||||||||
Occupancy, furniture and equipment
|
857
|
809
|
1,749
|
1,720
|
||||||||||||
Data processing and related operations
|
340
|
324
|
658
|
668
|
||||||||||||
Taxes, other than income
|
153
|
227
|
327
|
460
|
||||||||||||
Professional fees
|
229
|
240
|
459
|
489
|
||||||||||||
FDIC Insurance assessment
|
86
|
91
|
178
|
186
|
||||||||||||
Foreclosed real estate
|
114
|
152
|
95
|
724
|
||||||||||||
Amortization of intangibles
|
33
|
39
|
68
|
80
|
||||||||||||
Other
|
1,135
|
1,036
|
2,198
|
1,987
|
||||||||||||
Total other expenses
|
6,353
|
6,130
|
12,600
|
12,744
|
||||||||||||
INCOME BEFORE TAX
|
4,211
|
3,582
|
7,915
|
6,509
|
||||||||||||
INCOME TAX EXPENSE
|
698
|
858
|
1,273
|
1,409
|
||||||||||||
NET INCOME
|
$
|
3,513
|
$
|
2,724
|
$
|
6,642
|
$
|
5,100
|
||||||||
Basic earnings per share *
|
$
|
0.57
|
$
|
0.44
|
$
|
1.07
|
$
|
0.82
|
||||||||
Diluted earnings per share *
|
$
|
0.56
|
$
|
0.43
|
$
|
1.06
|
$
|
0.81
|
For the Three Months Ended June 30
|
2018
|
2017
|
||||||
Net interest income
|
$
|
9,215
|
$
|
8,656
|
||||
Net income
|
3,513
|
2,724
|
||||||
Net interest spread (fully taxable equivalent)
|
3.40
|
%
|
3.44
|
%
|
||||
Net interest margin (fully taxable equivalent)
|
3.54
|
%
|
3.54
|
%
|
||||
Return on average assets
|
1.23
|
%
|
0.97
|
%
|
||||
Return on average equity
|
12.25
|
%
|
9.45
|
%
|
||||
Return on average tangible equity
|
13.64
|
%
|
10.53
|
%
|
||||
Basic earnings per share *
|
$
|
0.57
|
$
|
0.44
|
||||
Diluted earnings per share *
|
$
|
0.56
|
$
|
0.43
|
||||
For the Six Months Ended June 30
|
2018
|
2017
|
||||||
Net interest income
|
$
|
18,022
|
$
|
17,154
|
||||
Net income
|
6,642
|
5,100
|
||||||
Net interest spread (fully taxable equivalent)
|
3.35
|
%
|
3.42
|
%
|
||||
Net interest margin (fully taxable equivalent)
|
3.50
|
%
|
3.53
|
%
|
||||
Return on average assets
|
1.18
|
%
|
0.92
|
%
|
||||
Return on average equity
|
11.63
|
%
|
9.00
|
%
|
||||
Return on average tangible equity
|
12.95
|
%
|
10.06
|
%
|
||||
Basic earnings per share *
|
$
|
1.07
|
$
|
0.82
|
||||
Diluted earnings per share *
|
$
|
1.06
|
$
|
0.81
|
||||
As of June 30
|
||||||||
Total assets
|
$
|
1,150,593
|
$
|
1,127,313
|
||||
Total loans receivable
|
803,773
|
735,026
|
||||||
Allowance for loan losses
|
8,326
|
7,419
|
||||||
Total deposits
|
950,889
|
932,471
|
||||||
Stockholders' equity
|
115,533
|
116,167
|
||||||
Trust assets under management
|
158,117
|
146,307
|
||||||
Book value per share *
|
$
|
18.35
|
$
|
18.29
|
||||
Tangible book value per share *
|
$
|
16.47
|
$
|
16.37
|
||||
Equity to total assets
|
10.04
|
%
|
10.30
|
%
|
||||
Allowance to total loans receivable
|
1.04
|
%
|
1.01
|
%
|
||||
Nonperforming loans to total loans
|
0.16
|
%
|
0.35
|
%
|
||||
Nonperforming assets to total assets
|
0.23
|
%
|
0.63
|
%
|
June 30
2018
|
March 31
2018
|
December 31
2017
|
September 30
2017
|
June 30
2017
|
||||||||||||||||
ASSETS
|
||||||||||||||||||||
Cash and due from banks
|
$
|
15,193
|
$
|
10,103
|
$
|
16,212
|
$
|
13,947
|
$
|
16,055
|
||||||||||
Interest-bearing deposits with banks
|
914
|
2,039
|
485
|
368
|
348
|
|||||||||||||||
Cash and cash equivalents
|
16,107
|
12,142
|
16,697
|
14,315
|
16,403
|
|||||||||||||||
Securities available for sale
|
259,442
|
265,862
|
281,121
|
285,706
|
300,667
|
|||||||||||||||
Loans receivable
|
803,773
|
775,681
|
764,092
|
756,014
|
735,026
|
|||||||||||||||
Less: Allowance for loan losses
|
8,326
|
8,099
|
7,634
|
7,760
|
7,419
|
|||||||||||||||
Net loans receivable
|
795,447
|
767,582
|
756,458
|
748,254
|
727,607
|
|||||||||||||||
Regulatory stock, at cost
|
2,313
|
2,545
|
3,505
|
3,115
|
2,435
|
|||||||||||||||
Bank owned life insurance
|
37,485
|
37,270
|
37,060
|
36,839
|
36,575
|
|||||||||||||||
Bank premises and equipment, net
|
13,894
|
13,808
|
13,864
|
12,922
|
12,953
|
|||||||||||||||
Foreclosed real estate owned
|
1,386
|
1,436
|
1,661
|
4,243
|
4,523
|
|||||||||||||||
Goodwill and other intangibles
|
11,725
|
11,758
|
11,793
|
11,827
|
11,862
|
|||||||||||||||
Other assets
|
12,794
|
14,634
|
10,757
|
14,732
|
14,288
|
|||||||||||||||
TOTAL ASSETS
|
$
|
1,150,593
|
$
|
1,127,037
|
$
|
1,132,916
|
$
|
1,131,953
|
$
|
1,127,313
|
||||||||||
LIABILITIES
|
||||||||||||||||||||
Deposits:
|
||||||||||||||||||||
Non-interest bearing demand
|
$
|
216,472
|
$
|
204,027
|
$
|
205,138
|
$
|
212,844
|
$
|
200,364
|
||||||||||
Interest-bearing deposits
|
734,417
|
736,122
|
724,246
|
711,178
|
732,107
|
|||||||||||||||
Total deposits
|
950,889
|
940,149
|
929,384
|
924,022
|
932,471
|
|||||||||||||||
Other borrowings
|
73,608
|
62,998
|
78,475
|
79,000
|
67,522
|
|||||||||||||||
Other liabilities
|
10,563
|
10,052
|
9,318
|
11,239
|
11,153
|
|||||||||||||||
TOTAL LIABILITIES
|
1,035,060
|
1,013,199
|
1,017,177
|
1,014,261
|
1,011,146
|
|||||||||||||||
STOCKHOLDERS' EQUITY
|
115,533
|
113,838
|
115,739
|
117,692
|
116,167
|
|||||||||||||||
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
|
$
|
1,150,593
|
$
|
1,127,037
|
$
|
1,132,916
|
$
|
1,131,953
|
$
|
1,127,313
|
Three months ended
|
June 30
2018
|
March 31
2018
|
December 31
2017
|
September 30
2017
|
June 30
2017
|
|||||||||||||||
INTEREST INCOME
|
||||||||||||||||||||
Loans receivable, including fees
|
$
|
8,857
|
$
|
8,487
|
$
|
8,503
|
$
|
8,289
|
$
|
7,925
|
||||||||||
Securities
|
1,536
|
1,524
|
1,560
|
1,605
|
1,633
|
|||||||||||||||
Other
|
43
|
18
|
12
|
2
|
24
|
|||||||||||||||
Total interest income
|
10,436
|
10,029
|
10,075
|
9,896
|
9,582
|
|||||||||||||||
INTEREST EXPENSE
|
||||||||||||||||||||
Deposits
|
1,052
|
1,029
|
985
|
828
|
797
|
|||||||||||||||
Borrowings
|
169
|
193
|
206
|
198
|
129
|
|||||||||||||||
Total interest expense
|
1,221
|
1,222
|
1,191
|
1,026
|
926
|
|||||||||||||||
NET INTEREST INCOME
|
9,215
|
8,807
|
8,884
|
8,870
|
8,656
|
|||||||||||||||
PROVISION FOR LOAN LOSSES
|
425
|
550
|
400
|
600
|
600
|
|||||||||||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
|
8,790
|
8,257
|
8,484
|
8,270
|
8,056
|
|||||||||||||||
OTHER INCOME
|
||||||||||||||||||||
Service charges and fees
|
1,101
|
980
|
1,023
|
1,105
|
1,016
|
|||||||||||||||
Income from fiduciary activities
|
175
|
137
|
116
|
160
|
128
|
|||||||||||||||
Net realized gains on sales of securities
|
58
|
142
|
181
|
129
|
31
|
|||||||||||||||
Gains on sales of loans, net
|
-
|
-
|
-
|
-
|
67
|
|||||||||||||||
Earnings and proceeds on life insurance policies
|
279
|
273
|
283
|
320
|
275
|
|||||||||||||||
Other
|
161
|
162
|
151
|
144
|
139
|
|||||||||||||||
Total other income
|
1,774
|
1,694
|
1,754
|
1,858
|
1,656
|
|||||||||||||||
OTHER EXPENSES
|
||||||||||||||||||||
Salaries and employee benefits
|
3,406
|
3,462
|
3,211
|
3,209
|
3,212
|
|||||||||||||||
Occupancy, furniture and equipment, net
|
857
|
892
|
841
|
799
|
809
|
|||||||||||||||
Foreclosed real estate
|
114
|
(19
|
)
|
136
|
303
|
152
|
||||||||||||||
FDIC insurance assessment
|
86
|
92
|
94
|
97
|
91
|
|||||||||||||||
Other
|
1,890
|
1,821
|
1,604
|
1,831
|
1,866
|
|||||||||||||||
Total other expenses
|
6,353
|
6,248
|
5,886
|
6,239
|
6,130
|
|||||||||||||||
INCOME BEFORE TAX
|
4,211
|
3,703
|
4,352
|
3,889
|
3,582
|
|||||||||||||||
INCOME TAX EXPENSE
|
698
|
574
|
4,195
|
948
|
858
|
|||||||||||||||
NET INCOME
|
$
|
3,513
|
$
|
3,129
|
$
|
157
|
$
|
2,941
|
$
|
2,724
|
||||||||||
Basic earnings per share
|
$
|
0.57
|
$
|
0.50
|
$
|
0.03
|
$
|
0.47
|
$
|
0.44
|
||||||||||
Diluted earnings per share
|
$
|
0.56
|
$
|
0.50
|
$
|
0.03
|
$
|
0.47
|
$
|
0.43
|
||||||||||
Book Value per share
|
$
|
18.35
|
$
|
18.45
|
$
|
18.61
|
$
|
18.46
|
$
|
18.29
|
||||||||||
Tangible Book Value per share
|
16.47
|
16.56
|
16.71
|
16.54
|
16.37
|
|||||||||||||||
Return on average assets (annualized)
|
1.23
|
%
|
1.13
|
%
|
0.05
|
%
|
1.03
|
%
|
0.97
|
%
|
||||||||||
Return on average equity (annualized)
|
12.25
|
%
|
11.00
|
%
|
0.52
|
%
|
9.85
|
%
|
9.45
|
%
|
||||||||||
Return on average tangible equity (annualized)
|
13.64
|
%
|
12.25
|
%
|
0.58
|
%
|
10.95
|
%
|
10.53
|
%
|
||||||||||
Net interest spread (fte)
|
3.40
|
%
|
3.31
|
%
|
3.44
|
%
|
3.48
|
%
|
3.44
|
%
|
||||||||||
Net interest margin (fte)
|
3.54
|
%
|
3.46
|
%
|
3.56
|
%
|
3.60
|
%
|
3.54
|
%
|
||||||||||
Allowance for loan losses to total loans
|
1.04
|
%
|
1.04
|
%
|
1.00
|
%
|
1.03
|
%
|
1.01
|
%
|
||||||||||
Net charge-offs to average loans (annualized)
|
0.10
|
%
|
0.04
|
%
|
0.28
|
%
|
0.14
|
%
|
0.05
|
%
|
||||||||||
Nonperforming loans to total loans
|
0.16
|
%
|
0.22
|
%
|
0.32
|
%
|
0.27
|
%
|
0.35
|
%
|
||||||||||
Nonperforming assets to total assets
|
0.23
|
%
|
0.28
|
%
|
0.37
|
%
|
0.55
|
%
|
0.63
|
%
|