EX-99 3 ex99-1.txt PRESS RELEASE NORWOOD FINANCIAL CORP ------------------------------------------------------------------------------- 717 Main Street - Honesdale, Pennsylvania 16431 - 570-253-1455 FOR IMMEDIATE RELEASE NORWOOD FINANCIAL CORP ANNOUNCES 2003 EARNINGS January 26, 2004 William W. Davis, Jr., President and Chief Executive Officer of Norwood Financial Corp (Nasdaq-NWFL) and its subsidiary, Wayne Bank announced earnings for the year-ended December 31, 2003 of $4,653,000, which represented a 6.9% increase over the $4,353,000 earned in the similar period of 2002. Earnings per share, on a fully diluted basis, were $1.75 in 2003 compared to $1.68 in 2002. Cash dividends declared in 2003 were $.65 per share, an increase of 8.3% over the $.60 per share declared in the prior year. The return on average assets for the year was 1.22% with a return on equity of 11.24%. For the fourth quarter of 2003, earnings totaled $1,227,000, an increase of $98,000 or 8.7%, over the $1,129,000 earned in the similar period of 2002. Earnings per share (diluted) were $.46 with a return on assets of 1.25% and return on equity of 11.60%. These measures of profitability all compare favorable with the fourth quarter of 2002 results of earnings per share (diluted) of $.43; with a return on assets of 1.21% and a return on equity of 11.35%. The prior period per share amounts have all been adjusted to reflect the 50% stock dividend paid on June 16, 2003. Total assets as of December 31, 2003 were $387.5 million, with loans receivable of $233.7 million, deposits of $306.7 million and stockholders' equity of $42.8 million. Total assets have increased $20.0 million when compared to December 31, 2002. Loans receivable totaled $233.7 million as of December 31, 2003, an increase of $15.8 million, or 7.2%, from December 31, 2002. The growth was principally in commercial and residential real estate, with both portfolios showing increases over 10%. The real-estate related growth was partially offset by a continued decline in indirect automobile lending as the Company has chosen to de-emphasize this product line. Asset quality ratios remain strong. As of December 31, 2003, non-performing loans represented .06% of total loans, declining from .10% at the end of the prior year. Net charge-offs also decreased in 2003, with $539,000 in net charge-offs, compared to $700,000 in 2002. Net interest income for the year-ended December 31, 2003, on a fully taxable equivalent basis, was $13,945,000, declining from $14,479,000 in the similar period in 2002. The decrease in net interest income was due in part to the decline in the yield on earning assets in the current low interest rate environment, a significant amount of loan refinancing activity at lower rates and increased cash flow from the securities portfolio reinvested at lower yields. However, net interest income, fully taxable equivalent, for the fourth quarter of 2003 totaled $3,629,000 and reflected an increase as compared to $3,588,000 in the similar period of 2002. Other income for the current year totaled $3,493,000, an increase of $489,000 over the $3,004,000 earned in 2002. The year-ended December 31, 2003, includes $692,000 in gains on sales of securities compared to $427,000 in prior year. The gains were principally due to the sale of corporate bonds, equity holdings of other financial institutions and mortgage-backed securities. Operating expenses declined $541,000 to $9,808,000 for the 2 year ended December 31, 2003 principally due to a lower level of losses on auto lease residuals. Norwood Financial Corp, through its subsidiary Wayne Bank, operates ten offices and twelve automated teller machines in Wayne, Pike and Monroe County in Northeastern Pennsylvania. The Company's stock is traded on the Nasdaq Market under the symbol NWFL. The foregoing material may contain forward-looking statements. We caution that such statements may be subject to a number of uncertainties and actual results could differ materially and therefore readers should not place undue reliance on any forward-looking statements. Norwood Financial Corp does not undertake, and specifically disclaims any obligation to publicly release the results of any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. Contact: Lewis J. Critelli Executive Vice President & Chief Financial Officer NORWOOD FINANCIAL CORP 570-253-1455 www.waynebank.com 3 NORWOOD FINANCIAL CORP. Consolidated Balance Sheets (unaudited) (dollars in thousands)
December 31 ----------------------------------------------- 2003 2002 ----------------------------------------------- ASSETS Cash and due from banks $ 9,110 $ 9,579 Interest bearing deposits with banks 64 230 Federal funds sold 0 6,435 --------------------- ---------------------- Cash and cash equivalents 9,174 16,244 Securities available for sale 124,823 114,843 Securities held to maturity, fair value 2003:$5,975 2002; $6,504 5,748 6,204 Loans receivable (net of unearned Income) 233,733 217,970 Less: Allowance for loan losses 3,267 3,146 --------------------- ---------------------- Net loans receivable 230,466 214,824 Investment in FHLB Stock 2,002 1,637 Bank premises and equipment,net 5,596 5,986 Foreclosed real estate 0 21 Accrued interest receivable 1,783 1,799 Other assets 7,891 5,910 --------------------- ---------------------- TOTAL ASSETS $ 387,483 $ 367,468 ===================== ====================== LIABILITIES Deposits: Non-interest bearing demand $ 39,517 $ 33,453 Interest-bearing 267,152 258,399 --------------------- ---------------------- Total deposits 306,669 291,852 Short-term borrowings 12,859 9,016 Long-term debt 23,000 23,000 Accrued interest payable 1,309 1,654 Other liabilities 815 1,821 --------------------- ---------------------- TOTAL LIABILITIES 344,652 327,343 STOCKHOLDERS' EQUITY Common Stock, $.10 par value, authorized 10,000,000 shares issued: 2003: 2,705,715 shares, 2002: 1,803,824 shares 270 180 Surplus 4,933 4,762 Retained earnings 37,042 34,082 Treasury stock, at cost: 2003: 21,318 shares, 2002: 31,506 shares (295) (640) Unearned ESOP Shares (550) (750) Accumulated other comprehensive income 1,431 2,491 --------------------- ---------------------- TOTAL STOCKHOLDERS' EQUITY 42,831 40,125 --------------------- ---------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 387,483 $ 367,468 ===================== ======================
4 NORWOOD FINANCIAL CORP. Consolidated Statement of Income (unaudited) (dollars in thousands, except per share data)
Three Months Ended December 31 Year ended December 31 ------------------------------- ------------------------------- 2003 2002 2003 2002 ------------------------------- ------------------------------- INTEREST INCOME Loans receivable, including fees $ 3,653 $ 3,823 $ 14,506 $ 15,651 Securities 1,183 1,379 4,744 5,650 Other 8 70 95 263 ------------ ------------- ------------ ----------- Total Interest income 4,844 5,272 19,345 21,564 INTEREST EXPENSE Deposits 997 1,423 4,638 6,139 Short-term borrowings 26 46 99 176 Long-term debt 324 324 1,286 1,298 ------------ ------------- ------------ ----------- Total Interest expense 1,347 1,793 6,023 7,613 ------------ ------------- ------------ ----------- NET INTEREST INCOME 3,497 3,479 13,322 13,951 PROVISION FOR LOAN LOSSES 165 150 660 630 ------------ ------------- ------------ ----------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 3,332 3,329 12,662 13,321 OTHER INCOME Service charges and fees 455 475 1,846 1,788 Income from fiduciary activities 61 59 250 236 Net realized gains on sales of securities 150 692 427 Other 132 86 705 553 ------------ ------------- ------------ ----------- Total other income 798 620 3,493 3,004 OTHER EXPENSES Salaries and employee benefits 1,235 1,172 4,916 4,847 Occupancy, furniture and equipment , net 340 325 1,401 1,276 Data processing related 134 150 549 556 Losses on lease residuals 25 80 50 870 Taxes, other than income 89 78 256 222 Professional Fees 82 33 277 186 Other 545 547 2,359 2,392 ------------ ------------- ------------ ----------- Total other expenses 2,450 2,385 9,808 10,349 INCOME BEFORE TAX 1,680 1,564 6,347 5,976 INCOME TAX EXPENSE 453 435 1,694 1,623 ------------ ------------- ------------ ----------- NET INCOME $ 1,227 $ 1,129 $ 4,653 $ 4,353 ============ ============= ============ =========== Basic earnings per share * $ 0.47 $ 0.44 $ 1.79 $ 1.70 ============ ============= ============ =========== Diluted earnings per share * $ 0.46 $ 0.43 $ 1.75 $ 1.68 ============ ============= ============ ===========
* Reflects three-for-two stock split paid June 16, 2003, in the form of a 50% stock dividend 5 NORWOOD FINANCIAL CORP. Financial Highlights (Unaudited) (dollars in thousands, except per share data) Three Months Ended December 31 2003 2002 ------------------------------ ----------- ------------ Net interest income $ 3,497 $ 3,479 Net income 1,227 1,129 Net interest spread (fully taxable equivalent) 3.61% 3.68% Net interest margin (fully taxable equivalent) 3.92% 4.08% Return on average assets 1.25% 1.21% Return on average equity 11.60% 11.35% Basic earnings per share * $ 0.47 $ 0.44 Diluted earnings per share * 0.46 0.43 Year ended December 31 ---------------------- Net interest income 13,322 13,951 Net income 4,653 4,353 Net interest spread (fully taxable equivalent) 3.51% 3.82% Net interest margin (fully taxable equivalent) 3.86% 4.26% Return on average assets 1.22% 1.21% Return on average equity 11.24% 11.60% Basic earnings per share * $ 1.79 $ 1.70 Diluted earnings per share * $ 1.75 $ 1.68 As of December 31 ----------------- Total Assets $ 387,483 $ 367,468 Total Loans receivable 233,733 217,970 Allowance for loan losses 3,267 3,146 Total deposits 306,669 291,852 Stockholders' equity 42,831 40,125 Trust Assets under management 73,991 60,102 Book value per share * $ 15.96 $ 15.09 Equity to total assets 11.05% 10.92% Allowance to total loans receivable 1.40% 1.44% Nonperforming loans to total loans 0.06% 0.10% * Reflects three-for-two stock split paid June 16, 2003, in the form of a 50% stock dividend 6 NORWOOD FINANCIAL CORP Consolidated Balance Sheets (unaudited) (dollars in thousands)
December 31 September 30 June 30 March 31 December 31 2003 2003 2003 2003 2002 ------------ ------------- ------------ ----------- ------------ ASSETS Cash and due from banks $ 9,110 11,870 12,196 11,069 $ 9,579 Interest bearing deposits with banks 64 796 62 144 230 Federal funds sold - 3,400 7,050 10,680 6,435 Cash and cash equivalents 9,174 16,066 19,308 21,893 16,244 Securities available for sale 124,823 127,437 120,282 110,480 114,843 Securities held to maturity 5,748 6,193 6,173 6,206 6,204 Loans receivable (net of unearned Income) 233,733 228,884 225,222 220,426 217,970 Less: Allowance for loan losses 3,267 3,272 3,294 3,212 3,146 ------------ ------------- ------------ ----------- ------------ Net loans receivable 230,466 225,612 221,928 217,214 214,824 Investment in FHLB stock 2,002 1,935 1,865 1,832 1,637 Bank premises and equipment, net 5,596 5,629 5,740 5,861 5,986 Foreclosed real estate 11 11 11 21 Other assets 9,674 9,834 7,294 7,131 7,709 ------------ ------------- ------------ ----------- ------------ TOTAL ASSETS $ 387,483 392,717 382,601 370,628 $ 367,468 ============ ============= ============ =========== ============ LIABILITIES Deposits: Non-interest bearing demand $ 39,517 45,846 40,699 34,419 $ 33,453 Interest- bearing deposits 267,152 269,614 266,493 261,495 258,399 ------------ ------------- ------------ ----------- ------------ Total deposits 306,669 315,460 307,192 295,914 291,852 Other borrowings 35,859 32,925 30,589 30,951 32,016 Other liabilities 2,124 2,497 3,087 3,200 3,475 ------------ ------------- ------------ ----------- ------------ TOTAL LIABILITIES 344,652 350,882 340,868 330,065 327,343 STOCKHOLDERS' EQUITY 42,831 41,835 41,733 40,563 40,125 ------------ ------------- ------------ ----------- ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 387,483 392,717 382,601 370,628 $ 367,468 ============ ============= ============ =========== ============ 7 NORWOOD FINANCIAL CORP Consolidated Statements of Income (unaudited) (dollars in thousands, except per share data) December September June 30 March 31 December 31 Three months ended 2003 2003 2003 2003 2002 ------------------------------------ --------------- -------------------------- INTEREST INCOME Loans receivable, including fees $ 3,653 3,590 3,627 $ 3,636 $ 3,823 Securities 1,183 1,148 1,157 1,256 1,379 Other 8 22 32 33 70 ------------- ------------- ------------ ------------ ------------ Total Interest income 4,844 4,760 4,816 4,925 5,272 INTEREST EXPENSE Deposits 997 1,114 1,222 1,305 1,423 Borrowings 350 347 346 342 370 ------------- ------------- ------------ ------------ ------------ Total Interest expense 1,347 1,461 1,568 1,647 1,793 NET INTEREST INCOME 3,497 3,299 3,248 3,278 3,479 PROVISION FOR LOAN LOSSES 165 165 165 165 150 ------------- ------------- ------------ ------------ ------------ NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 3,332 3,134 3,083 3,113 3,329 OTHER INCOME Service charges and fees 455 489 460 442 475 Income from fiduciary activities 61 85 54 50 59 Net realized gains on sales of securities 150 156 243 143 0 Other 132 155 165 253 86 ------------- ------------- ------------ ------------ ------------ Total other income 798 885 922 888 620 OTHER EXPENSES Salaries and employee benefits 1,235 1,232 1,219 1,230 1,172 Occupancy, furniture and equipment , net 340 346 359 356 325 Losses on lease residuals 25 0 25 0 80 Other 850 839 872 880 808 ------------- ------------- ------------ ------------ ------------ Total other expenses 2,450 2,417 2,475 2,466 2,385 INCOME BEFORE TAX 1,680 1,602 1,530 1,535 1,564 INCOME TAX EXPENSE 453 408 408 425 435 ------------- ------------- ------------ ------------ ------------ NET INCOME $ 1,227 1,194 1,122 $ 1,110 $ 1,129 ============= ============= ============ ============ ============ Basic earnings per share * $ 0.47 0.46 0.43 $ 0.43 $ 0.44 ============= ============= ============ ============ ============ Diluted earnings per share * $ 0.46 0.45 0.42 $ 0.42 $ 0.43 ============= ============= ============ ============ ============ Book Value per share * $ 15.96 15.60 15.69 $ 15.26 $ 15.09 Return on average equity 11.60% 11.41% 10.92% 11.12% 11.35% Return on average assets 1.25% 1.22% 1.19% 1.23% 1.21% Net interest spread 3.61% 3.44% 3.44% 3.55% 3.68% Net interest margin 3.92% 3.80% 3.81% 3.94% 4.08% Allowance for loan losses to total loans 1.40% 1.43% 1.46% 1.46% 1.44% Net charge-offs to average loans (annualized) 0.29% 0.33% 0.15% 0.18% 0.27% Nonperforming loans to total loans 0.06% 0.13% 0.18% 0.08% 0.10% Nonperforming assets to toal assets 0.04% 0.08% 0.11% 0.05% 0.07%
*Adjusted for a three-for-two stock split payable in the form of a 50% stock dividend, paid June 16, 2003. 8