Exhibit 99.1

FOR IMMEDIATE RELEASE

NORWOOD FINANCIAL CORP ANNOUNCES EARNINGS FOR THE FOURTH

QUARTER AND 2023 FISCAL YEAR

January 29, 2024 – 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, 2023 of $355,000 compared to the net income of $7,140,000 earned in the three months ended December 31, 2022. The decrease in net income was due primarily to a $1,939,000 decrease in net interest income, and a $5,816,000 increase in the provision for credit losses. For the year ended December 31, 2023, net income totaled $16,759,000, a decrease of $12,474,000 from net income of $29,233,000 earned in year ended December 31, 2022. The decrease includes a $6,330,000 decrease in net interest income and a $4,648,000 increase in the provision for credit losses.

Earnings per share (fully diluted) were $0.04 and $0.88 for the three-month periods ended December 31, 2023 and 2022, respectively. For the year ended December 31, 2023, earnings per share on a fully diluted basis were $2.07, compared to $3.58 for the year ended December 31, 2022. For the year ended December 31, 2023, the return on average assets was 0.79%, and the return on average equity was 9.67%, compared to 1.43% and 16.11%, respectively, for the year ended December 31, 2022.     

Total assets were $2.201 billion as of December 31, 2023. As of December 31, 2023, loans receivable were $1.604 billion, total deposits were $1.795 billion and stockholders’ equity was $181.1 million.

Loans receivable increased $129.7 million to $1.604 billion at December 31, 2023, from $1.474 billion at December 31, 2022. The increase in loans receivable in 2023 included an $83.9 million increase in retail loans and a $45.8 million increase in commercial loans. For the three months and year ended December 31, 2023, net charge-offs totaled $3,181,000 and $6,078,000, respectively, compared to $232,000 and $344,000, respectively, for the corresponding periods in 2022. The increase in net charge-offs for the three months and year ended December 31, 2023 was due primarily to losses on one credit relationship in the amount of $2,806,000 and $4,806,000, respectively.

Net interest income, on a fully taxable equivalent basis (fte), totaled $15,488,000 for the three months ended December 31, 2023, a decrease of $1,941,000 compared to the same period in 2022. For the year ended December 31, 2023, net interest income (fte) totaled $62,816,000, a decrease of $6,348,000 compared to 2022, due primarily to the increase in funding costs on interest-bearing liabilities in excess of the increase in the yield earned on interest earning assets.

The provision for credit losses totaled $6,116,000 for the three months ended December 31, 2023, compared to $300,000 for the three months ended December 31, 2022. The increase was required to maintain the allowance for credit losses at an adequate level based on the quarterly analysis and was due primarily to replenish the allowance for credit losses for charge-offs recorded during the period. For the year ended December 31, 2023, the provision for credit losses totaled $5,548,000 compared to $900,000 for the year ended December 31, 2022. The $4,648,000 increase in the provision for credit losses was required to replenish the allowance for credit losses for charge-offs incurred during the year ended December 31, 2023.

Other income for the three months ended December 31, 2023, totaled $2,123,000 compared to $1,926,000 for the similar period in 2022. Gains on the sale of loans, securities and foreclosed real estate increased $98,000, while service charges and fees increased $51,000. All other items of other income increased $48,000, net. Other income for the year ended December 31, 2023, totaled $8,124,000 compared to $9,932,000 in 2022, a decrease of $1,808,000 due primarily to income recognized in 2022 on previously acquired purchased impaired loans that were carried at a discount. For the year ended December 31, 2023, gains on the sale of loans and investment securities decreased $152,000 in the aggregate, compared to the year ended December 31, 2022. Gains on sales of foreclosed real estate owned decreased $347,000 during the year ended December 31, 2023, compared to the year ended December 31, 2022.

Other expenses totaled $10,849,000 for the three months ended December 31, 2023, compared to $10,275,000 in the similar period of 2022. For the year ended December 31, 2023, other expenses totaled $43,497,000 compared to $41,044,000 for 2022, an increase of $2,453,000, or 6.0%.

Mr. Donnelly commented, “Our results in 2023 reflect decreasing net interest spreads due to rising interest rates, which have impacted our cost of interest-bearing liabilities more than the increase in yield earned on interest-earning assets. Our Return on Average Assets was 0.79%, and our Return on Average Equity was 9.67%. We have continued to grow our core business lines, including an 8.8% increase in loans outstanding and a 3.90% increase in total deposits. Our cash dividend of $0.30 per share declared in the fourth quarter of 2023, represents a 3.5% 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 customers and enhance shareholder value in our Company.”

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, our ability to maintain strong credit quality metrics, our ability to have future performance, our ability to control core operating expenses and costs, 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:

 

(dollars in thousands)		Three months ended December 31								Year ended December 31
		2023				2022				2023				2022
Net interest income		$	15,293			$	17,232			$	62,067			$	68,397
Tax equivalent basis adjustment using 21% marginal tax rate			195				197				749				767
Net interest income on a fully taxable equivalent basis		$	15,488			$	17,429			$	62,816			$	69,164

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)		2023				2022				2023				2022
Average equity		$	168,320			$	162,762			$	173,274			$	181,499
Average goodwill and other Intangibles			(29,495	)			(29,582	)			(29,526	)			(29,618	)
Average tangible equity		$	138,825			$	133,180			$	143,748			$	151,881

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
		2023				2022
ASSETS
Cash and due from banks		$	28,533			$	28,847
Interest-bearing deposits with banks			37,587				3,019
Cash and cash equivalents			66,120				31,866
Securities available for sale			406,259				418,927
Loans receivable			1,603,618				1,473,945
Less: Allowance for credit losses			18,968				16,999
Net loans receivable			1,584,650				1,456,946
Regulatory stock, at cost			7,318				5,418
Bank premises and equipment, net			17,838				17,924
Bank owned life insurance			46,439				43,364
Foreclosed real estate owned			97				346
Accrued interest receivable			8,123				6,917
Deferred tax assets, net			21,353				23,549
Goodwill			29,266				29,266
Other intangible assets			221				306
Other assets			13,395				12,241
TOTAL ASSETS		$	2,201,079			$	2,047,070
LIABILITIES
Deposits:
Non-interest bearing demand		$	399,545			$	434,529
Interest-bearing			1,395,614				1,293,198
Total deposits			1,795,159				1,727,727
Short-term borrowings			74,076				93,215
Other borrowings			124,236				40,000
Accrued interest payable			10,510				2,653
Other liabilities			16,028				16,390
TOTAL LIABILITIES			2,020,009				1,879,985
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: 2023: 8,310,847 shares, 2022: 8,291,401 shares			831				829
Surplus			97,700				96,897
Retained earnings			135,284				130,020
Treasury stock, at cost: 2023: 200,690 shares, 2022: 124,650 shares			(5,397	)			(3,308	)
Accumulated other comprehensive loss			(47,348	)			(57,353	)
TOTAL STOCKHOLDERS’ EQUITY			181,070				167,085
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	2,201,079			$	2,047,070

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,
		2023				2022				2023				2022
INTEREST INCOME
Loans receivable, including fees		$	23,328			$	17,810			$	85,209			$	66,013
Securities			2,504				2,487				9,922				9,051
Other			253				98				409				602
Total Interest income			26,085				20,395				95,540				75,666
INTEREST EXPENSE
Deposits			8,910				2,772				26,029				6,471
Short-term borrowings			346				329				3,048				524
Other borrowings			1,536				62				4,396				274
Total Interest expense			10,792				3,163				33,473				7,269
NET INTEREST INCOME			15,293				17,232				62,067				68,397
PROVISION FOR CREDIT LOSSES			6,116				300				5,548				900
NET INTEREST INCOME AFTER (RELEASE OF) PROVISION FOR CREDIT LOSSES			9,177				16,932				56,519				67,497
OTHER INCOME
Service charges and fees			1,421				1,370				5,613				5,661
Income from fiduciary activities			210				210				898				845
Net realized (losses) gains on sales of securities			—				3				(209	)			3
Gains on sales of loans, net			36				1				63				3
Gains on sales of foreclosed real estate owned			66				—				80				427
Earnings and proceeds on life insurance policies			242				195				1,012				1,087
Other			148				147				667				1,906
Total other income			2,123				1,926				8,124				9,932
OTHER EXPENSES
Salaries and employee benefits			5,672				5,246				23,565				22,071
Occupancy, furniture and equipment			1,265				1,263				5,083				4,967
Data processing and related operations			877				917				3,342				2,948
Taxes, other than income			77				239				566				1,013
Professional fees			544				383				1,676				1,719
FDIC Insurance assessment			287				144				985				612
Foreclosed real estate			17				7				129				73
Amortization of intangibles			19				23				85				101
Other			2,091				2,053				8,066				7,540
Total other expenses			10,849				10,275				43,497				41,044
INCOME BEFORE TAX			451				8,583				21,146				36,385
INCOME TAX EXPENSE			96				1,443				4,387				7,152
NET INCOME		$	355			$	7,140			$	16,759			$	29,233
Basic earnings per share		$	0.04			$	0.88			$	2.08			$	3.59
Diluted earnings per share		$	0.04			$	0.88			$	2.07			$	3.58

NORWOOD FINANCIAL CORP

Financial Highlights (Unaudited)

(dollars in thousands, except per share data)

 

For the Three Months Ended December 31		2023				2022
Net interest income		$	15,293			$	17,232
Net income			355				7,140
Net interest spread (fully taxable equivalent)			2.24	%			3.30	%
Net interest margin (fully taxable equivalent)			2.95	%			3.55	%
Return on average assets			0.06	%			1.40	%
Return on average equity			0.84	%			17.40	%
Return on average tangible equity			1.01	%			21.27	%
Basic earnings per share		$	0.04			$	0.88
Diluted earnings per share		$	0.04			$	0.88
For the Twelve Months Ended December 31		2023				2022
Net interest income		$	62,067			$	68,397
Net income			16,759				29,233
Net interest spread (fully taxable equivalent)			2.47	%			3.38	%
Net interest margin (fully taxable equivalent)			3.06	%			3.53	%
Return on average assets			0.79	%			1.43	%
Return on average equity			9.67	%			16.11	%
Return on average tangible equity			11.66	%			19.25	%
Basic earnings per share		$	2.08			$	3.59
Diluted earnings per share		$	2.07			$	3.58
As of December 31		2023				2022
Total assets		$	2,201,079			$	2,047,070
Total loans receivable			1,603,618				1,473,945
Allowance for credit losses			18,968				16,999
Total deposits			1,795,159				1,727,727
Stockholders’ equity			181,070				167,085
Trust assets under management			192,374				184,855
Book value per share		$	22.99			$	20.86
Tangible book value per share		$	19.36			$	17.24
Equity to total assets			8.23	%			8.16	%
Allowance to total loans receivable			1.18	%			1.15	%
Nonperforming loans to total loans			0.48	%			0.08	%
Nonperforming assets to total assets			0.35	%			0.07	%

NORWOOD FINANCIAL CORP

Consolidated Balance Sheets (unaudited)

(dollars in thousands)

 

		December 31 2023				September 30 2023				June 30 2023				March 31 2023				December 31 2022
ASSETS
Cash and due from banks		$	28,533			$	41,141			$	30,053			$	25,701			$	28,847
Interest-bearing deposits with banks			37,587				13,005				3,036				3,314				3,019
Cash and cash equivalents			66,120				54,146				33,089				29,015				31,866
Securities available for sale			406,259				380,499				403,621				418,245				418,927
Loans receivable			1,603,618				1,611,069				1,577,699				1,535,643				1,473,945
Less: Allowance for credit losses			18,968				16,086				17,483				19,445				16,999
Net loans receivable			1,584,650				1,594,983				1,560,216				1,516,198				1,456,946
Regulatory stock, at cost			7,318				8,843				7,924				5,963				5,418
Bank owned life insurance			46,439				46,197				45,806				45,577				43,364
Bank premises and equipment, net			17,838				17,254				17,363				17,660				17,924
Foreclosed real estate owned			97				290				387				346				346
Goodwill and other intangibles			29,487				29,506				29,526				29,549				29,572
Other assets			42,871				48,280				43,833				41,810				42,707
TOTAL ASSETS		$	2,201,079			$	2,179,998			$	2,141,765			$	2,104,363			$	2,047,070
LIABILITIES
Deposits:
Non-interest bearing demand		$	399,545			$	430,242			$	425,757			$	419,615			$	434,529
Interest-bearing deposits			1,395,614				1,316,582				1,306,240				1,336,320				1,293,198
Total deposits			1,795,159				1,746,824				1,731,997				1,755,935				1,727,727
Borrowings			198,312				241,328				211,978				148,744				133,215
Other liabilities			26,538				27,144				24,366				23,269				19,043
TOTAL LIABILITIES			2,020,009				2,015,296				1,968,341				1,927,948				1,879,985
STOCKHOLDERS’ EQUITY			181,070				164,702				173,424				176,415				167,085
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	2,201,079			$	2,179,998			$	2,141,765			$	2,104,363			$	2,047,070

NORWOOD FINANCIAL CORP

Consolidated Statements of Income (unaudited)

(dollars in thousands, except per share data)

 

Three months ended		December 31 2023				September 30 2023				June 30 2023				March 31 2023				December 31 2022
INTEREST INCOME
Loans receivable, including fees		$	23,328			$	22,021			$	20,702			$	19,158			$	17,810
Securities			2,504				2,433				2,481				2,505				2,487
Other			253				54				53				48				98
Total interest income			26,085				24,508				23,236				21,711				20,395
INTEREST EXPENSE
Deposits			8,910				7,017				5,740				4,362				2,772
Borrowings			1,882				2,452				1,854				1,256				391
Total interest expense			10,792				9,469				7,594				5,618				3,163
NET INTEREST INCOME			15,293				15,039				15,642				16,093				17,232
PROVISION FOR (RELEASE OF) CREDIT LOSSES			6,116				882				(1,750	)			300				300
NET INTEREST INCOME AFTER (RELEASE OF) PROVISION FOR CREDIT LOSSES			9,177				14,157				17,392				15,793				16,932
OTHER INCOME
Service charges and fees			1,421				1,527				1,353				1,313				1,370
Income from fiduciary activities			210				246				229				212				210
Net realized (losses) gains on sales of securities			—				—				(212	)			2				3
Gains on sales of loans, net			36				18				10				—				1
Gains on sales of foreclosed real estate owned			66				13				—				—				—
Earnings and proceeds on life insurance policies			242				328				229				213				195
Other			148				174				174				172				147
Total other income			2,123				2,306				1,783				1,912				1,926
OTHER EXPENSES
Salaries and employee benefits			5,672				6,083				5,842				5,969				5,246
Occupancy, furniture and equipment, net			1,265				1,242				1,314				1,262				1,263
Foreclosed real estate			17				9				74				29				7
FDIC insurance assessment			287				254				244				200				144
Other			3,608				3,688				3,464				2,976				3,615
Total other expenses			10,849				11,276				10,938				10,436				10,275
INCOME BEFORE TAX			451				5,187				8,237				7,269				8,583
INCOME TAX EXPENSE			96				1,068				1,734				1,487				1,443
NET INCOME		$	355			$	4,119			$	6,503			$	5,782			$	7,140
Basic earnings per share		$	0.04			$	0.51			$	0.81			$	0.71			$	0.88
Diluted earnings per share		$	0.04			$	0.51			$	0.81			$	0.71			$	0.88
Book Value per share		$	22.99			$	21.15			$	22.24			$	21.92			$	20.86
Tangible Book Value per share			19.36				17.49				18.58				18.31				17.24
Return on average assets (annualized)			0.06	%			0.76	%			1.23	%			1.13	%			1.40	%
Return on average equity (annualized)			0.84	%			9.33	%			14.72	%			13.61	%			17.40	%
Return on average tangible equity (annualized)			1.01	%			11.22	%			17.66	%			16.42	%			21.27	%
Net interest spread (fte)			2.24	%			2.28	%			2.56	%			2.83	%			3.30	%
Net interest margin (fte)			2.95	%			2.94	%			3.09	%			3.25	%			3.55	%
Allowance for credit losses to total loans			1.18	%			1.00	%			1.11	%			1.27	%			1.15	%
Net charge-offs to average loans (annualized)			0.79	%			0.59	%			0.06	%			0.08	%			0.06	%
Nonperforming loans to total loans			0.48	%			0.65	%			0.20	%			0.18	%			0.08	%
Nonperforming assets to total assets			0.35	%			0.50	%			0.17	%			0.15	%			0.07	%