Exhibit 99.1

FOR IMMEDIATE RELEASE

NORWOOD FINANCIAL CORP ANNOUNCES EARNINGS FOR THE FOURTH

QUARTER AND 2022 FISCAL YEAR

January 27, 2023 – Honesdale, Pennsylvania

James O. Donnelly, President and Chief Executive Officer of Norwood Financial Corp (Nasdaq Global Market – NWFL), and its subsidiary Wayne Bank, announced net income for the three months ended December 31, 2022 of $7,140,000 compared to the net income of $6,638,000 earned in the three months ended December 31, 2021. The increase in net income was due primarily to a $736,000 increase in net interest income. For the year ended December 31, 2022, net income totaled $29,233,000, an increase of $4,318,000 from net income of $24,915,000 earned in year ended December 31, 2021. The increase includes a $3,084,000 increase in net interest income and a $3,300,000 reduction in the provision for loan losses.

Earnings per share (fully diluted) were $0.88 and $0.81 for the three-month periods ended December 31, 2022 and 2021, respectively. For the year ended December 31, 2022, earnings per share on a fully diluted basis were $3.58, compared to $3.05 for the year ended December 31, 2021. For the year ended December 31, 2022, the return on average assets was 1.43%, and the return on average equity was 16.11%, compared to 1.24% and 12.35%, respectively, for the year ended December 31, 2021.

Total assets were $2.047 billion as of December 31, 2022. As of December 31, 2022, loans receivable were $1.474 billion, total deposits were $1.728 billion and stockholders’ equity was $167.1 million. The $38.2 million decrease in stockholders’ equity compared to December 31, 2021, includes a $57.1 million decrease in accumulated other comprehensive income due to a decrease in the market value of available for sale securities related to the significant increase in interest rates during 2022.


Loans receivable increased $119.0 million from the year-ended December 31, 2021, including a $90.0 million increase in retail loans and a $28.4 million increase in commercial loans. For the three months and year ended December 31, 2022, net charge-offs totaled $232,000 and $344,000, respectively, compared to $111,000 and $907,000, respectively, for the corresponding periods in 2021.

Net interest income, on a fully taxable equivalent basis (fte), totaled $17,429,000 for the three months ended December 31, 2022, an increase of $758,000 compared to the same period in 2021. For the year ended December 31, 2022, net interest income (fte) totaled $69,164,000, an increase of $3,064,000 compared to 2021, due primarily to the higher volume of earning assets, including a $160.1 million increase in average securities available for sale.

Other income for the three months ended December 31, 2022, totaled $1,926,000 compared to $2,021,000 for the similar period in 2021. Gains on the sale of loans and securities decreased $32,000, while service charges and fees decreased $55,000. All other items of other income decreased $8,000, net. Other income for the year ended December 31, 2022, totaled $9,932,000 compared to $8,361,000 in 2021, an increase of $1,571,000 due primarily to income recognized on previously acquired purchased impaired loans that were carried at a discount. Gains on the sale of loans and investment securities decreased $263,000 in the aggregate, while gains on sales of foreclosed real estate owned increased $391,000.

Other expenses totaled $10,275,000 for the three months ended December 31, 2022, compared to $10,042,000 in the similar period of 2021. For the year ended December 31, 2022, other expenses totaled $41,044,000 compared to $38,614,000 for 2021, an increase of $2,430,000, or 6.3%.


Mr. Donnelly commented, “In 2022, our earnings increased $4.3 million over our previous record year of 2021. Our Return on Average Assets was 1.43%, and our Return on Average Equity was 16.11%. Earnings per share (fully diluted) also improved to $3.58 per share in 2022 from $3.04 per share in 2021. We have continued to grow our core business lines, including an 8.8% increase in loans outstanding, and maintain our strong credit quality metrics, which should bode well for future performance. Our cash dividend of $0.29 per share declared in the fourth quarter of 2022, represents a 3.6% increase over the same period of last year. We appreciate the opportunity to serve our Wayne Bank customers and our customers at the Bank of the Finger Lakes and Bank of Cooperstown locations. We continue to look for opportunities available to us as we service our growing 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 is traded 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”, “bode”, “future performance” 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 continued effect and impact of, the COVID-19 pandemic on the economy and the Company’s results of operation and financial condition, our ability to maintain strong credit quality metrics, our ability to have future performance, our 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 net interest income on a fully taxable-equivalent basis (fte), which is a non-GAAP (Generally Accepted Accounting Principles) financial measure. Fully taxable-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 fully taxable-equivalent basis ensures comparability of net interest income arising from both taxable and tax-exempt sources, and is consistent with industry practice.

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

 

     Three months ended
December 31
     Year ended
December 31
 
(dollars in thousands)    2022      2021      2022      2021  

Net interest income

   $   17,232      $   16,496      $   68,397      $   65,313  

Tax equivalent basis adjustment using 21% marginal tax rate

     197        175        767        787  
  

 

 

    

 

 

    

 

 

    

 

 

 

Net interest income on a fully taxable equivalent basis

   $ 17,429      $ 16,671      $ 69,164      $ 66,100  
  

 

 

    

 

 

    

 

 

    

 

 

 


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 table reconciles average equity to average tangible equity:

 

     Three months ended
December 31,
     Year ended
December 31,
 
(dollars in thousands)    2022      2021      2022      2021  

Average equity

   $   162,762      $   205,053      $   181,499      $   201,681  

Average goodwill and other Intangibles

     (29,582      (29,683      (29,618      (29,738
  

 

 

    

 

 

    

 

 

    

 

 

 

Average tangible equity

   $ 133,180      $ 175,370      $ 151,881      $ 171,943  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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)

 

     December 31  
     2022     2021  

ASSETS

    

Cash and due from banks

   $ 28,847     $ 21,073  

Interest-bearing deposits with banks

     3,019       185,608  
  

 

 

   

 

 

 

Cash and cash equivalents

     31,866       206,681  

Securities available for sale

     418,927       406,782  

Loans receivable

     1,473,945       1,354,931  

Less: Allowance for loan losses

     16,999       16,442  
  

 

 

   

 

 

 

Net loans receivable

     1,456,946       1,338,489  

Regulatory stock, at cost

     5,418       3,927  

Bank premises and equipment, net

     17,924       17,289  

Bank owned life insurance

     43,364       40,038  

Foreclosed real estate owned

     346       1,742  

Accrued interest receivable

     6,917       5,889  

Deferred tax assets, net

     23,549       8,791  

Goodwill

     29,266       29,266  

Other intangible assets

     306       407  

Other assets

     12,241       9,203  
  

 

 

   

 

 

 

TOTAL ASSETS

   $ 2,047,070     $ 2,068,504  
  

 

 

   

 

 

 

LIABILITIES

    

Deposits:

    

Non-interest bearing demand

   $ 434,529     $ 440,652  

Interest-bearing

     1,293,198       1,316,141  
  

 

 

   

 

 

 

Total deposits

     1,727,727       1,756,793  

Short-term borrowings

     93,215       60,822  

Other borrowings

     40,000       29,998  

Accrued interest payable

     2,653       1,203  

Other liabilities

     16,390       14,426  
  

 

 

   

 

 

 

TOTAL LIABILITIES

     1,879,985       1,863,242  

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: 8,291,401 shares, 2021: 8,266,751 shares

     829       827  

Surplus

     96,897       96,443  

Retained earnings

     130,020       110,015  

Treasury stock, at cost: 2022: 124,650 shares, 2021: 65,328 shares

     (3,308     (1,767

Accumulated other comprehensive (loss) income

     (57,353     (256
  

 

 

   

 

 

 

TOTAL STOCKHOLDERS’ EQUITY

     167,085       205,262  
  

 

 

   

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

     $2,047,070       $2,068,504  
  

 

 

   

 

 

 


NORWOOD FINANCIAL CORP.

Consolidated Statements of Income

(dollars in thousands, except per share data)

(unaudited)

 

     Three Months Ended December 31,      Twelve Months Ended December 31,  
     2022      2021      2022      2021  

INTEREST INCOME

           

Loans receivable, including fees

   $ 17,810      $ 16,149      $ 66,013      $ 65,257  

Securities

     2,487        1,612        9,051        5,547  

Other

     98        92        602        266  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Interest income

     20,395        17,853        75,666        71,070  

INTEREST EXPENSE

           

Deposits

     2,772        1,130        6,471        4,757  

Short-term borrowings

     329        71        524        284  

Other borrowings

     62        156        274        716  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Interest expense

     3,163        1,357        7,269        5,757  
  

 

 

    

 

 

    

 

 

    

 

 

 

NET INTEREST INCOME

     17,232        16,496        68,397        65,313  

PROVISION FOR LOAN LOSSES

   $ 300        450        900        4,200  
  

 

 

    

 

 

    

 

 

    

 

 

 

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

     16,932        16,046        67,497        61,113  

OTHER INCOME

           

Service charges and fees

     1,370        1,425        5,661        5,693  

Income from fiduciary activities

     210        198        845        748  

Net realized gains on sales of securities

     3        36        3        92  

Gains on sales of loans, net

     1               3        177  

Gains on sales of foreclosed real estate owned

                   427        36  

Earnings and proceeds on life insurance policies

     195        174        1,087        941  

Other

     147        188        1,906        674  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total other income

     1,926        2,021        9,932        8,361  

OTHER EXPENSES

           

Salaries and employee benefits

     5,246        4,992        22,071        20,608  

Occupancy, furniture and equipment

     1,263        1,254        4,967        4,822  

Data processing and related operations

     917        655        2,948        2,415  

Taxes, other than income

     239        358        1,013        1,122  

Professional fees

     383        510        1,719        1,582  

FDIC Insurance assessment

     144        169        612        681  

Foreclosed real estate

     7        88        73        151  

Amortization of intangibles

     23        27        101        123  

Other

     2,053        1,989        7,540        7,110  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total other expenses

     10,275        10,042        41,044        38,614  

INCOME BEFORE TAX

     8,583        8,025        36,385        30,860  

INCOME TAX EXPENSE

     1,443        1,387        7,152        5,945  
  

 

 

    

 

 

    

 

 

    

 

 

 

NET INCOME

   $ 7,140      $ 6,638      $ 29,233      $ 24,915  
  

 

 

    

 

 

    

 

 

    

 

 

 

Basic earnings per share

   $ 0.88      $ 0.81      $ 3.59      $ 3.05  
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted earnings per share

   $ 0.88      $ 0.81      $ 3.58      $ 3.05  
  

 

 

    

 

 

    

 

 

    

 

 

 


NORWOOD FINANCIAL CORP.

Financial Highlights (Unaudited)

(dollars in thousands, except per share data)

 

For the Three Months Ended December 31    2022     2021  

Net interest income

   $   17,232     $ 16,496  

Net income

     7,140       6,638  

Net interest spread (fully taxable equivalent)

     3.30     3.29

Net interest margin (fully taxable equivalent)

     3.55     3.39

Return on average assets

     1.40     1.26

Return on average equity

     17.40     12.84

Return on average tangible equity

     21.27     15.02

Basic earnings per share

   $ 0.88     $ 0.81  

Diluted earnings per share

   $ 0.88     $ 0.81  
For the Twelve Months Ended December 31    2022     2021  

Net interest income

   $   68,397     $ 65,313  

Net income

     29,233       24,915  

Net interest spread (fully taxable equivalent)

     3.38     3.39

Net interest margin (fully taxable equivalent)

     3.53     3.50

Return on average assets

     1.43     1.24

Return on average equity

     16.11     12.35

Return on average tangible equity

     19.25     14.49

Basic earnings per share

   $ 3.59     $ 3.05  

Diluted earnings per share

   $ 3.58     $ 3.04  
As of December 31    2022     2021  

Total assets

   $   2,047,070     $   2,068,504  

Total loans receivable

     1,473,945       1,354,931  

Allowance for loan losses

     16,999       16,442  

Total deposits

     1,727,727       1,756,793  

Stockholders’ equity

     167,085       205,262  

Trust assets under management

     184,855       195,958  

Book value per share

   $ 20.86     $ 25.24  

Tangible book value per share

   $ 17.24     $ 21.63  

Equity to total assets

     8.16     9.92

Allowance to total loans receivable

     1.15     1.21

Nonperforming loans to total loans

     0.08     0.05

Nonperforming assets to total assets

     0.07     0.12


NORWOOD FINANCIAL CORP.

Consolidated Balance Sheets (unaudited)

(dollars in thousands)

 

     December 31
2022
     September 30
2022
     June 30
2022
     March 31
2022
     December 31
2021
 

ASSETS

              

Cash and due from banks

   $ 28,847      $ 23,092      $ 29,931      $ 22,394      $ 21,073  

Interest-bearing deposits with banks

     3,019        17,785        79,735        143,632        185,608  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Cash and cash equivalents

     31,866        40,877        109,666        166,026        206,681  

Securities available for sale

     418,927        427,287        440,877        434,924        406,782  

Loans receivable

     1,473,945        1,432,288        1,404,317        1,371,645        1,354,931  

Less: Allowance for loan losses

     16,999        16,931        17,017        16,660        16,442  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net loans receivable

     1,456,946        1,415,357        1,387,300        1,354,985        1,338,489  

Regulatory stock, at cost

     5,418        2,220        2,396        3,423        3,927  

Bank owned life insurance

     43,364        43,169        43,167        40,215        40,038  

Bank premises and equipment, net

     17,924        17,427        17,032        17,022        17,289  

Foreclosed real estate owned

     346        346        346        590        1,742  

Goodwill and other intangibles

     29,572        29,595        29,619        29,646        29,673  

Other assets

     42,707        42,592        35,981        30,867        23,883  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

TOTAL ASSETS

   $ 2,047,070      $ 2,018,870      $ 2,066,384      $ 2,077,698      $ 2,068,504  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

LIABILITIES

              

Deposits:

              

Non-interest bearing demand

   $ 434,529      $ 453,560      $ 442,991      $ 438,979      $ 440,652  

Interest-bearing deposits

     1,293,198        1,315,236        1,356,839        1,342,798        1,316,141  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total deposits

     1,727,727        1,768,796        1,799,830        1,781,777        1,756,793  

Borrowings

     133,215        71,754        74,839        90,466        90,820  

Other liabilities

     19,043        19,471        17,884        18,649        15,629  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

TOTAL LIABILITIES

     1,879,985        1,860,021        1,892,553        1,890,892        1,863,242  

STOCKHOLDERS’ EQUITY

     167,085        158,849        173,831        186,806        205,262  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

   $   2,047,070      $   2,018,870      $   2,066,384      $   2,077,698      $   2,068,504  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 


NORWOOD FINANCIAL CORP.

Consolidated Statements of Income (unaudited)

(dollars in thousands, except per share data)

 

Three months ended    December 31
2022
    September 30
2022
    June 30
2022
    March 31
2022
    December 31
2021
 

INTEREST INCOME

          

Loans receivable, including fees

   $ 17,810     $ 17,114     $ 15,714     $ 15,375     $ 16,149  

Securities

     2,487       2,473       2,197       1,894       1,612  

Other

     98       245       182       78       92  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total interest income

     20,395       19,832       18,093       17,347       17,853  

INTEREST EXPENSE

          

Deposits

     2,772       1,557       1,083       1,059       1,130  

Borrowings

     391       105       116       187       227  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total interest expense

     3,163       1,662       1,199       1,246       1,357  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

NET INTEREST INCOME

     17,232       18,170       16,894       16,101       16,496  

PROVISION FOR LOAN LOSSES

     300       —         300       300       450  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

     16,932       18,170       16,594       15,801       16,046  

OTHER INCOME

          

Service charges and fees

     1,370       1,346       1,475       1,470       1,425  

Income from fiduciary activities

     210       219       214       202       198  

Net realized gains on sales of securities

     3       —         —         —         36  

Gains on sales of loans, net

     1       1       —         —         —    

Gains on sales of foreclosed real estate owned

     —         —         —         427       —    

Earnings and proceeds on life insurance policies

     195       267       449       176       174  

Other

     147       345       351       1,063       188  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other income

     1,926       2,178       2,489       3,338       2,021  

OTHER EXPENSES

          

Salaries and employee benefits

     5,246       5,553       5,840       5,431       4,992  

Occupancy, furniture and equipment, net

     1,263       1,191       1,206       1,307       1,254  

Foreclosed real estate

     7       4       10       53       88  

FDIC insurance assessment

     144       143       142       183       169  

Other

     3,615       3,248       3,274       3,183       3,539  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other expenses

     10,275       10,139       10,472       10,157       10,042  

INCOME BEFORE TAX

     8,583       10,209       8,611       8,982       8,025  

INCOME TAX EXPENSE

     1,443       2,100       1,756       1,854       1,387  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME

   $ 7,140     $ 8,109     $ 6,855     $ 7,128     $ 6,638  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings per share

   $ 0.88     $ 1.00     $ 0.84     $ 0.87     $ 0.81  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings per share

   $ 0.88     $ 1.00     $ 0.84     $ 0.87     $ 0.81  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Book Value per share

   $ 20.86     $ 19.92     $ 21.65     $ 22.99     $ 25.24  

Tangible Book Value per share

     17.24       16.29       18.02       19.37       21.63  

Return on average assets (annualized)

     1.40     1.57     1.35     1.39     1.26

Return on average equity (annualized)

     17.40     17.93     15.19     14.22     12.84

Return on average tangible equity (annualized)

     21.27     21.48     18.16     16.65     15.02

Net interest spread (fte)

     3.30     3.61     3.40     3.22     3.29

Net interest margin (fte)

     3.55     3.74     3.49     3.32     3.39

Allowance for loan losses to total loans

     1.15     1.18     1.21     1.21     1.21

Net charge-offs to average loans (annualized)

     0.06     0.02     -0.02     0.02     0.03

Nonperforming loans to total loans

     0.08     0.04     0.04     0.05     0.05

Nonperforming assets to total assets

     0.07     0.05     0.05     0.06     0.12