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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission file number 0-28364

 

Norwood Financial Corp

(Exact name of registrant as specified in its charter)

 

Pennsylvania

 

23-2828306

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. employer

identification no.)

717 Main Street, Honesdale, Pennsylvania

 

18431

(Address of principal executive offices)

 

(Zip Code)

Registrant’s telephone number, including area code (570253-1455

N/A

Former name, former address and former fiscal year, if changed since last report.

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

symbol(s)

 

Name of each exchange

on which registered

Common Stock, par value $0.10 per share

 

NWFL

 

The Nasdaq Stock Market LLC

Indicate by check (x) whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

  

Accelerated filer

 

Non-accelerated filer

 

  

Smaller reporting company

 

 

  

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):      Yes      No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class

 

Outstanding as of May 1, 2024

Common stock, par value $0.10 per share

 

8,098,466


2


PART I. FINANCIAL INFORMATION

Item 1.    Financial Statements

NORWOOD FINANCIAL CORP

Consolidated Balance Sheets (unaudited)

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

March 31,

December 31,

2024

2023

ASSETS

Cash and due from banks

$

19,519

$

28,533

Interest-bearing deposits with banks

92,444

37,587

Cash and cash equivalents

111,963

66,120

Securities available for sale, at fair value (net of allowance for credit losses of $0)

398,374

406,259

Loans receivable (net of allowance for credit losses of $18,020 and $18,968)

1,603,428

1,584,650

Regulatory stock, at cost

6,545

7,318

Bank premises and equipment, net

18,057

17,838

Bank owned life insurance

45,869

46,439

Accrued interest receivable

8,135

8,123

Foreclosed real estate owned

97

97

Deferred tax assets, net

21,642

21,353

Goodwill

29,266

29,266

Other intangibles

202

221

Other assets

16,845

13,395

TOTAL ASSETS

$

2,260,423

$

2,201,079

LIABILITIES

Deposits:

Non-interest bearing demand

$

383,362

$

399,545

Interest-bearing

1,455,636

1,395,614

Total deposits

1,838,998

1,795,159

Short-term borrowings

60,055

74,076

Other borrowings

151,179

124,236

Accrued interest payable

11,737

10,510

Other liabilities

17,241

16,028

TOTAL LIABILITIES

2,079,210

2,020,009

STOCKHOLDERS’ EQUITY

Preferred stock, no par value per share,

authorized: 5,000,000 shares; issued: none

Common stock, $0.10 par value per share,

authorized: 20,000,000 shares,

issued: 2024: 8,310,847 shares, 2023: 8,310,847 shares

831

831

Surplus

97,893

97,700

Retained earnings

137,285

135,284

Treasury stock at cost: 2024: 200,690 shares; 2023: 200,690 shares

(5,397)

(5,397)

Accumulated other comprehensive loss

(49,399)

(47,348)

TOTAL STOCKHOLDERS’ EQUITY

181,213

181,070

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

2,260,423

$

2,201,079

See accompanying notes to the unaudited consolidated financial statements. 

3


NORWOOD FINANCIAL CORP

Consolidated Statements of Income (unaudited)

(dollars in thousan ds, except per share data)

Three Months Ended

March 31,

2024

2023

INTEREST INCOME

Loans receivable, including fees

$

23,681

$

19,158

Securities

2,526

2,505

Other

731

48

Total interest income

26,938

21,711

INTEREST EXPENSE

Deposits

10,110

4,362

Short-term borrowings

336

779

Other borrowings

1,782

477

Total interest expense

12,228

5,618

NET INTEREST INCOME

14,710

16,093

PROVISION FOR (RELEASE OF)

CREDIT LOSS EXPENSE

(624)

300

NET INTEREST INCOME AFTER

PROVISION FOR (RELEASE OF) CREDIT LOSSES

15,334

15,793

OTHER INCOME

Service charges and fees

1,343

1,313

Income from fiduciary activities

238

212

Net realized gains on sales of securities

2

Gains on sales of loans, net

6

Earnings and proceeds on bank owned life insurance

268

213

Other

151

172

Total other income

2,006

1,912

OTHER EXPENSES

Salaries and employee benefits

6,135

5,969

Occupancy, furniture & equipment, net

1,261

1,262

Data processing and related operations

1,022

768

Taxes, other than income

93

161

Professional fees

585

285

Federal Deposit Insurance Corporation insurance

361

200

Foreclosed real estate

21

29

Amortization of intangibles

19

23

Other

2,235

1,739

Total other expenses

11,732

10,436

INCOME BEFORE INCOME TAXES

5,608

7,269

INCOME TAX EXPENSE

1,175

1,487

NET INCOME

$

4,433

$

5,782

BASIC EARNINGS PER SHARE

$

0.55

$

0.71

DILUTED EARNINGS PER SHARE

$

0.55

$

0.71

See accompanying notes to the unaudited consolidated financial statements.

 

4


NORWOOD FINANCIAL CORP

Consolidated Statements of Comprehensive Income (unaudited)

(dollars in thousands)

Three Months Ended

March 31,

2024

2023

Net income

$

4,433

$

5,782

Other comprehensive income (loss)

Investment securities available for sale:

Unrealized holding (losses) gains

(2,596)

9,355

Tax effect

545

(1,963)

Reclassification of investment securities losses

recognized in net income

(2)

Tax effect

Other comprehensive (loss) income

(2,051)

7,390

Comprehensive Income

$

2,382

$

13,172

See accompanying notes to the unaudited consolidated financial statements.

 

5


NORWOOD FINANCIAL CORP

Consolidated Statements of Changes in Stockholders’ Equity (unaudited)

Three Months Ended March 31, 2024 and 2023

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

Accumulated

Other

Common Stock

Retained

Treasury Stock

Comprehensive

Shares

Amount

Surplus

Earnings

Shares

Amount

Income (Loss)

Total

Balance, December 31, 2023

8,310,847

$

831 

$

97,700 

$

135,284 

200,690

$

(5,397)

$

(47,348)

$

181,070 

Net Income

-

-

-

4,433 

-

-

-

4,433 

Other comprehensive loss

-

-

-

-

-

-

(2,051)

(2,051)

Cash dividends declared ($0.30 per share)

-

-

-

(2,432)

-

-

-

(2,432)

Compensation expense related to restricted stock

-

-

104 

-

-

-

-

104 

Compensation expense related to stock options

-

-

89 

-

-

-

-

89 

Balance, March 31, 2024

8,310,847

$

831

$

97,893

$

137,285

200,690

$

(5,397)

$

(49,399)

$

181,213

Accumulated

Other

Common Stock

Retained

Treasury Stock

Comprehensive

Shares

Amount

Surplus