EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

NORWOOD FINANCIAL CORP

ANNOUNCES THIRD QUARTER EARNINGS

October 26, 2022 - Honesdale, Pennsylvania

James O. Donnelly, President and Chief Executive Officer of Norwood Financial Corp. (Nasdaq Global Market-NWFL) and its subsidiary, Wayne Bank, announced earnings for the three months ended September 30, 2022 of $8,109,000, which represents an increase of $1,128,000, or 16.2%, over the $6,981,000 earned in the same three-month period of 2021. The increase in earnings was due to a $1.2 million increase in net interest income, and a $750,000 reduction in the provision for loan losses during the three-months ended September 30, 2022. Earnings per share (fully diluted) were $1.00 in the three-months ended September 30, 2022, which represents an increase from the $0.85 earned in the same period of 2021. The annualized returns on average assets and average tangible equity for the current three-month period were 1.57% and 21.48%, respectively, compared to 1.36% and 15.78% for the three-month period ended September 30, 2021. Net income for the nine months ended September 30, 2022, totaled $22,093,000, which is $3,816,000, or 20.9%, higher than the same period of 2021. The increase in net income includes a $2,347,000 increase in net interest income, a $3,150,000 reduction in the provision for loan losses, and a $1,671,000 increase in total other income during the nine months ended September 30, 2022. Earnings per share (fully diluted) for the nine months ended September 30, 2022, totaled $2.71 per share compared to $2.23 per share in the same 2021 period.

Total assets as of September 30, 2022 were $2.019 billion, with loans receivable of $1.432 billion, deposits of $1.769 billion and stockholders’ equity of $158.8 million.

For the three months ended September 30, 2022, net interest income, on a fully taxable equivalent basis (fte), totaled $18,369,000, which represents an increase of $1,183,000, compared to the same period in 2021. A $157.7 million increase in average securities contributed to the increased income. Net interest margin (fte) for the 2022 period was 3.74%, compared to 3.61% for the similar period in 2021. Net interest income (fte) for the nine months ended September 30, 2022 totaled $51,734,000, an increase of $2,305,000, compared to the same period in 2021, due primarily to a $174.6 million increase in average securities. The net interest margin (fte) for the nine months ended September 30, 2022 was 3.52%, compared to 3.54% for the same period of 2021.

Total other income for the three months ended September 30, 2022 was $2,178,000, compared to $2,159,000 for the same period in 2021. For the nine months ended September 30, 2022, total other income was $8,006,000, compared to $6,335,000 in the same period of 2021. The increase was due primarily to income recognized on previously acquired purchased impaired loans that were carried at a discount.

Total other expenses were $10,139,000 for the three months ended September 30, 2022, compared to $9,623,000 in the same period of 2021. For the nine months ended September 30, 2022, total other expenses were $30,768,000, compared to $28,567,000 for the same period in 2021. The increase was due primarily to a $1,208,000 increase in salaries and employee benefit costs during the nine months ended September 30, 2022.

Mr. Donnelly commented, “Our results for the first nine months of 2022 reflect increasing net interest spreads due to rising interest rates, the higher level of interest earning assets, and reduced loan loss provisions related to our improved credit quality metrics. Our return on average assets for the nine months ended September 30, 2022 was 1.44%, our fully-diluted earnings per share improved 21.5% compared to the same nine-month period of last year, and our credit quality metrics remain strong, which should bode well for future performance. We appreciate the opportunity to serve our expanded base of stockholders and customers.”

Norwood Financial Corp is the parent company of Wayne Bank, which operates from fourteen offices throughout Northeastern Pennsylvania and fifteen offices in Delaware, Sullivan, Ontario, Otsego and Yates Counties, New York. The Company’s stock trades on the Nasdaq Global Market under the symbol “NWFL”.

Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 contains safe harbor provisions regarding forward-looking statements. When used in this discussion, the words “believes”, “anticipates”, “contemplates”, “expects”, and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from those projected. Those risks and uncertainties include changes in federal and state laws, changes in interest rates, the risks and uncertainty posed by, and the effect and impact of, the COVID-19 pandemic on the economy and the Company’s results of operation and financial condition, the ability to control costs and expenses, demand for real estate, government fiscal and trade policies, cybersecurity and general economic conditions. The Company undertakes no obligation to publicly release the results of any revisions to those forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Non-GAAP Financial Measures

This release references tax-equivalent net interest income, which is a non-GAAP (Generally Accepted Accounting Principles) financial measure. Tax-equivalent net interest income was derived from GAAP interest income and net interest income using an assumed tax rate of 21%. We believe the presentation of net interest income on a tax-equivalent basis ensures comparability of net interest income arising from both taxable and tax-exempt sources and is consistent with industry practice.

The following reconciles net interest income to net interest income on a fully taxable-equivalent basis:


(dollars in thousands)	Three months ended September 30				Nine months ended September 30
(dollars in thousands)	2022		2021		2022		2021
Net interest income	$	18,170	$	16,989	$	51,164	$	48,817
Tax equivalent basis adjustment using 21% marginal tax rate		199		197		570		612

Net interest income on a fully taxable equivalent basis	$	18,369	$	17,186	$	51,734	$	49,429

This release also references average tangible equity, which is also a non-GAAP financial measure. Average tangible equity is calculated by deducting average goodwill and other intangible assets from average stockholders’ equity. The Company believes that disclosure of tangible equity ratios enhances investor understanding of our financial position and improves the comparability of our financial data.

The following reconciles average equity to average tangible equity:


	Three months ended September 30						Nine months ended September 30
(dollars in thousands)	2022			2021			2022			2021
Average equity	$	179,398		$	205,848		$	187,183		$	201,102
Average goodwill and other intangibles		(29,605	)		(29,712	)		(29,630	)		(29,757	)

Average tangible equity	$	149,793		$	176,136		$	157,553		$	171,345

Contact:

William S. Lance

Executive Vice President &

Chief Financial Officer

NORWOOD FINANCIAL CORP

570-253-8505

www.waynebank.com

NORWOOD FINANCIAL CORP.

Consolidated Balance Sheets

(dollars in thousands, except share and per share data)

(unaudited)


	September 30
	2022			2021
ASSETS
Cash and due from banks	$	23,092		$	28,353
Interest-bearing deposits with banks		17,785			191,580

Cash and cash equivalents		40,877			219,933

Securities available for sale		427,287			361,988
Loans receivable		1,432,288			1,371,002
Less: Allowance for loan losses		16,931			16,103

Net loans receivable		1,415,357			1,354,899
Regulatory stock, at cost		2,220			3,898
Bank premises and equipment, net		17,427			17,364
Bank owned life insurance		43,169			39,864
Foreclosed real estate owned		346			1,876
Accrued interest receivable		6,303			6,049
Goodwill		29,266			29,266
Other intangible assets		329			434
Other assets		36,289			18,120

TOTAL ASSETS	$	2,018,870		$	2,053,691

LIABILITIES
Deposits:
Non-interest bearing demand	$	453,560		$	442,534
Interest-bearing		1,315,236			1,279,988

Total deposits		1,768,796			1,722,522
Short-term borrowings		71,754			78,246
Other borrowings		—			33,136
Accrued interest payable		1,425			1,341
Other liabilities		18,046			15,838

TOTAL LIABILITIES		1,860,021			1,851,083

STOCKHOLDERS’ EQUITY
Preferred Stock, no par value per share, authorized 5,000,000 shares		—			—
Common Stock, $.10 par value per share, authorized: 20,000,000 shares, issued: 2022: 8,275,901 shares, 2021: 8,245,951 shares		828			825
Surplus		96,785			96,100
Retained earnings		125,243			105,668
Treasury stock, at cost: 2022: 130,046 shares, 2021: 51,568 shares		(3,442	)		(1,423	)
Accumulated other comprehensive (loss) income		(60,565	)		1,438

TOTAL STOCKHOLDERS’ EQUITY		158,849			202,608

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,018,870		$	2,053,691

NORWOOD FINANCIAL CORP.

Consolidated Statements of Income

(dollars in thousands, except per share data)

(unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
INTEREST INCOME
Loans receivable, including fees	$	17,114	$	16,859	$	48,203	$	49,107
Securities		2,473		1,468		6,564		3,936
Other		245		72		504		174

Total Interest income		19,832		18,399		55,271		53,217

INTEREST EXPENSE
Deposits		1,557		1,167		3,699		3,627
Short-term borrowings		88		71		196		214
Other borrowings		17		172		212		559

Total Interest expense		1,662		1,410		4,107		4,400

NET INTEREST INCOME		18,170		16,989		51,164		48,817
PROVISION FOR LOAN LOSSES	$	—		750		600		3,750

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		18,170		16,239		50,564		45,067

OTHER INCOME
Service charges and fees		1,346		1,485		4,292		4,268
Income from fiduciary activities		219		209		634		550
Net realized gains on sales of securities		—		35		—		56
Gains on sales of loans, net		1		39		1		177
Gains on sales of foreclosed real estate owned		—		31		427		31
Earnings and proceeds on life insurance policies		267		200		892		767
Other		345		160		1,760		486

Total other income		2,178		2,159		8,006		6,335

OTHER EXPENSES
Salaries and employee benefits		5,553		5,491		16,824		15,616
Occupancy, furniture and equipment		1,191		1,163		3,704		3,568
Data processing and related operations		736		594		2,031		1,760
Taxes, other than income		240		229		773		763
Professional fees		354		189		1,336		1,072
FDIC Insurance assessment		143		177		468		512
Foreclosed real estate		4		16		66		58
Amortization of intangibles		24		28		78		96
Other		1,894		1,736		5,488		5,122

Total other expenses		10,139		9,623		30,768		28,567

INCOME BEFORE TAX		10,209		8,775		27,802		22,835
INCOME TAX EXPENSE		2,100		1,794		5,709		4,558

NET INCOME	$	8,109	$	6,981	$	22,093	$	18,277

Basic earnings per share	$	1.00	$	0.85	$	2.71	$	2.23

Diluted earnings per share	$	1.00	$	0.85	$	2.71	$	2.23

NORWOOD FINANCIAL CORP.

Financial Highlights (Unaudited)

(dollars in thousands, except per share data)


For the Three Months Ended September 30	2022			2021
Net interest income	$	18,170		$	16,989
Net income		8,109			6,981

Net interest spread (fully taxable equivalent)		3.61	%		3.49	%
Net interest margin (fully taxable equivalent)		3.74	%		3.61	%
Return on average assets		1.57	%		1.36	%
Return on average equity		17.93	%		13.50	%
Return on average tangible equity		21.48	%		15.78	%
Basic earnings per share	$	1.00		$	0.85
Diluted earnings per share	$	1.00		$	0.85

For the Nine Months Ended September 30	2022			2021
Net interest income	$	51,164		$	48,817
Net income		22,093			18,277

Net interest spread (fully taxable equivalent)		3.41	%		3.43	%
Net interest margin (fully taxable equivalent)		3.52	%		3.54	%
Return on average assets		1.44	%		1.23	%
Return on average equity		15.73	%		12.19	%
Return on average tangible equity		18.67	%		14.31	%
Basic earnings per share	$	2.71		$	2.23
Diluted earnings per share	$	2.71		$	2.23

As of September 30	2022			2021
Total assets	$	2,018,870		$	2,053,691
Total loans receivable		1,432,288			1,371,002
Allowance for loan losses		16,931			16,103
Total deposits		1,768,796			1,722,522
Stockholders’ equity		158,849			202,608
Trust assets under management		172,037			187,689

Book value per share	$	19.92		$	24.90
Tangible book value per share	$	16.29		$	21.27
Equity to total assets		7.87	%		9.87	%
Allowance to total loans receivable		1.18	%		1.17	%
Nonperforming loans to total loans		0.04	%		0.14	%
Nonperforming assets to total assets		0.05	%		0.18	%

NORWOOD FINANCIAL CORP.

Consolidated Balance Sheets (unaudited)

(dollars in thousands)


	September 30		June 30		March 31		December 31		September 30
	2022		2022		2022		2021		2021
ASSETS
Cash and due from banks	$	23,092	$	29,931	$	22,394	$	21,073	$	28,353
Interest-bearing deposits with banks		17,785		79,735		143,632		185,608		191,580

Cash and cash equivalents		40,877		109,666		166,026		206,681		219,933

Securities available for sale		427,287		440,877		434,924		406,782		361,988
Loans receivable		1,432,288		1,404,317		1,371,645		1,354,931		1,371,002
Less: Allowance for loan losses		16,931		17,017		16,660		16,442		16,103

Net loans receivable		1,415,357		1,387,300		1,354,985		1,338,489		1,354,899
Regulatory stock, at cost		2,220		2,396		3,423		3,927		3,898
Bank owned life insurance		43,169		43,167		40,215		40,038		39,864
Bank premises and equipment, net		17,427		17,032		17,022		17,289		17,364
Foreclosed real estate owned		346		346		590		1,742		1,876
Goodwill and other intangibles		29,595		29,619		29,646		29,673		29,700
Other assets		42,592		35,981		30,867		23,883		24,169

TOTAL ASSETS	$	2,018,870	$	2,066,384	$	2,077,698	$	2,068,504	$	2,053,691

LIABILITIES
Deposits:
Non-interest bearing demand	$	453,560	$	442,991	$	438,979	$	440,652	$	442,534
Interest-bearing deposits		1,315,236		1,356,839		1,342,798		1,316,141		1,279,988

Total deposits		1,768,796		1,799,830		1,781,777		1,756,793		1,722,522
Borrowings		71,754		74,839		90,466		90,820		111,382
Other liabilities		19,471		17,884		18,649		15,629		17,179

TOTAL LIABILITIES		1,860,021		1,892,553		1,890,892		1,863,242		1,851,083

STOCKHOLDERS’ EQUITY		158,849		173,831		186,806		205,262		202,608

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,018,870	$	2,066,384	$	2,077,698	$	2,068,504	$	2,053,691

NORWOOD FINANCIAL CORP.

Consolidated Statements of Income (unaudited)

(dollars in thousands, except per share data)


	September 30			June 30			March 31			December 31			September 30
Three months ended	2022			2022			2022			2021			2021
INTEREST INCOME
Loans receivable, including fees	$	17,114		$	15,714		$	15,375		$	16,149		$	16,859
Securities		2,473			2,197			1,894			1,612			1,468
Other		245			182			78			92			72

Total interest income		19,832			18,093			17,347			17,853			18,399

INTEREST EXPENSE
Deposits		1,557			1,083			1,059			1,130			1,167
Borrowings		105			116			187			227			243

Total interest expense		1,662			1,199			1,246			1,357			1,410

NET INTEREST INCOME		18,170			16,894			16,101			16,496			16,989
PROVISION FOR LOAN LOSSES		—			300			300			450			750

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		18,170			16,594			15,801			16,046			16,239

OTHER INCOME
Service charges and fees		1,346			1,475			1,470			1,425			1,485
Income from fiduciary activities		219			214			202			198			209
Net realized gains on sales of securities		—			—			—			36			35
Gains on sales of loans, net		1			—			—			—			39
Gains on sales of foreclosed real estate owned		—			—			427			—			31
Earnings and proceeds on life insurance policies		267			449			176			174			200
Other		345			351			1,063			188			160

Total other income		2,178			2,489			3,338			2,021			2,159

OTHER EXPENSES
Salaries and employee benefits		5,553			5,840			5,431			4,992			5,491
Occupancy, furniture and equipment, net		1,191			1,206			1,307			1,254			1,163
Foreclosed real estate		4			10			53			88			16
FDIC insurance assessment		143			142			183			169			177
Other		3,248			3,274			3,183			3,539			2,776

Total other expenses		10,139			10,472			10,157			10,042			9,623

INCOME BEFORE TAX		10,209			8,611			8,982			8,025			8,775
INCOME TAX EXPENSE		2,100			1,756			1,854			1,387			1,794

NET INCOME	$	8,109		$	6,855		$	7,128		$	6,638		$	6,981

Basic earnings per share	$	1.00		$	0.84		$	0.87		$	0.81		$	0.85

Diluted earnings per share	$	1.00		$	0.84		$	0.87		$	0.81		$	0.85

Book Value per share	$	19.92		$	21.65		$	22.99		$	25.24		$	24.90
Tangible Book Value per share		16.29			18.02			19.37			21.63			21.27

Return on average assets (annualized)		1.57	%		1.35	%		1.39	%		1.26	%		1.36	%
Return on average equity (annualized)		17.93	%		15.19	%		14.22	%		12.84	%		13.50	%
Return on average tangible equity (annualized)		21.48	%		18.16	%		16.65	%		15.02	%		15.78	%

Net interest spread (fte)		3.61	%		3.40	%		3.22	%		3.29	%		3.49	%
Net interest margin (fte)		3.74	%		3.49	%		3.32	%		3.39	%		3.61	%

Allowance for loan losses to total loans		1.18	%		1.21	%		1.21	%		1.21	%		1.17	%
Net charge-offs to average loans (annualized)		0.02	%		-0.02	%		0.02	%		0.03	%		0.00	%
Nonperforming loans to total loans		0.04	%		0.04	%		0.05	%		0.05	%		0.20	%
Nonperforming assets to total assets		0.05	%		0.05	%		0.06	%		0.12	%		0.22	%