EX-99 2 ex99-1.txt PRESS RELEASE FOR IMMEDIATE RELEASE --------------------- NORWOOD FINANCIAL CORP ---------------------- ANNOUNCES 10.6% INCREASE IN EARNINGS ------------------------------------ October 19, 2004 - Honesdale, PA William W. Davis, Jr. President and Chief Executive Officer of Norwood Financial Corp (Nasdaq-NWFL) and its subsidiary Wayne Bank announced earnings for the three months ended September 30, 2004 of $1,320,000, which represents a $126,000, or 10.6%, increase over the $1,194,000 earned in the similar period of 2003. Earnings per share, on a fully diluted basis were $.49 per share in 2004 period compared to $.45 per share for the similar period in 2003. The return on assets for the three month period in 2004 was 1.32% with a return on equity of 12.01%. For the nine months ended September 30, 2004, net income totaled $3,647,000, an increase of 6.5% over the similar period in 2003. Earnings per share on a fully diluted basis were a $1.35 in the 2004 period increasing from $1.30 for the same period in 2003. Total assets as of September 30, 2004 were $398.6 million, an increase of $5.9 million from September 30, 2003. Year over year, stockholder equity has increased $3.0 million to total $44.8 million and deposits grew by $2.5 million to $317.9 million. Loans receivable totaled $256.9 million, as of September 30, 2004 reflecting an increase of $28 million, or 12.2%, from September 30, 2003. The Company continues to experience strong commercial loan growth, with the portfolio increasing over 20% from the prior year. Residential real estate loans, driven by home equity loans, has also 1 increased in excess of 20% when compared to September 30, 2003. The growth in these portfolios was partially offset by the continued decline in indirect automobile lending, as the Company is focusing on real estate lending. The Company's asset quality ratios remain very strong. Non-performing loans totaled $68,000, or .03% of total loans as of September 30, 2004 declining from $290,000, or .13% in the prior year. The Company was also able to reduce its provision for loan loss expense to $100,000 for the three months ended September 30, 2004 compared to $165,000 in the similar period of 2003, as a result of the decrease in non-performing loans as well as a lower level of net charge-offs. Net interest income on a fully taxable equivalent basis (fte) totaled $3,713,000 for the three months ended September 30, 2004, an increase of $238,000, or 6.8%, over the similar period in 2003. As a result of the increase in short-term interest rates, and an improvement in asset mix, with more loans, the net interest margin (fte) increased 13 basis points to 3.93% for the three month period in 2004 when compared to the same period in 2003. For the nine months ended September 30, 2004, net interest income (fte) totaled $10,858,000, an increase of 5.3% over 2003. The net interest margin (fte) also increased to 3.91% in the 2004 period from 3.85% in 2003. Other income excluding gains on sales of securities and loans for the three months ended September 30, 2004 was $819,000 compared to $710,000 in 2003. The Company's gains on sales of securities and mortgage loans were only $52,000 for the three month period in 2004, compared to $175,000 in 2003. For the nine months ended September 30, 2 2004, gains on sales of securities and mortgage loans totaled $376,000, decreasing from $734,000 in 2003. Other expenses for the three months ended September 30, 2004 totaled $2,509,000 compared to $2,417,000 in the 2003 period, an increase of 3.8%. The increase was due in part to the opening of the Marshalls Creek Branch in July 2004. For the nine months ended September 30, 2004, other expense totaled $7,548,000, an increase of $190,000 or 2.6%. The increase was due in part to $90,000 of expenses related to losses on lease residuals in 2004 compared to $25,000 in 2003. The Company liquidated its final vehicles in September 2004 with no additional loss. Norwood Financial Corp, through its subsidiary Wayne Bank, operates eleven offices and twelve automated teller machines in Wayne, Pike and Monroe Counties. The Company's stock is traded on the Nasdaq National 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. Those risks and uncertainties include changes in interest rates, risks associated with the effect of opening a new branch, the ability to control costs and expenses, and general economic conditions. 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. 3 Contact: Lewis J. Critelli Executive Vice President & Chief Financial Officer NORWOOD FINANCIAL CORP 570-253-1455 www.waynebank.com ----------------- 4 NORWOOD FINANCIAL CORP. Consolidated Balance Sheets (unaudited) (dollars in thousands)
September 30 ---------------------- 2004 2003 --------- --------- ASSETS Cash and due from banks $ 10,290 $ 11,870 Interest bearing deposits with banks 101 796 Federal funds sold 610 3,400 --------- --------- Cash and cash equivalents 11,001 16,066 Securities available for sale 111,100 127,437 Securities held to maturity, fair value 2004: $5,912 2003: $6,451 5,720 6,193 Loans receivable (net of unearned Income) 256,919 228,884 Less: Allowance for loan losses 3,418 3,272 --------- --------- Net loans receivable 253,501 225,612 Investment in FHLB Stock 2,183 1,935 Bank premises and equipment,net 5,602 5,629 Foreclosed real estate -- 11 Accrued interest receivable 1,667 1,775 Other assets 7,799 8,059 --------- --------- TOTAL ASSETS $ 398,573 $ 392,717 ========= ========= LIABILITIES Deposits: Non-interest bearing demand $ 51,752 $ 45,846 Interest-bearing 266,193 269,614 --------- --------- Total deposits 317,945 315,460 Short-term borrowings 11,194 9,925 Long-term debt 23,000 23,000 Accrued interest payable 1,136 1,448 Other liabilities 508 1,049 --------- --------- TOTAL LIABILITIES 353,783 350,882 STOCKHOLDERS' EQUITY Common Stock, $.10 par value, authorized 10,000,000 shares issued: 2,705,715 shares 272 270 Surplus 5,180 4,835 Retained earnings 39,338 36,260 Treasury stock, at cost: 2004: 12,597 shares, 2003: 23,736 shares (204) (328) Unearned ESOP Shares (400) (601) Accumulated other comprehensive income 604 1,399 --------- --------- TOTAL STOCKHOLDERS' EQUITY 44,790 41,835 --------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 398,573 $ 392,717 ========= =========
NORWOOD FINANCIAL CORP. Consolidated Statements of Income (unaudited) (dollars in thousands, except per share data)
Three Months Ended Nine Months Ended September 30 September 30 ------------------ ------------------ 2004 2003 2004 2003 ------- ------- ------- ------- INTEREST INCOME Loans receivable, including fees $ 3,770 $ 3,590 $10,886 $10,853 Securities 1,004 1,148 3,155 3,561 Other 8 22 25 87 ------- ------- ------- ------- Total Interest income 4,782 4,760 14,066 14,501 INTEREST EXPENSE Deposits 858 1,114 2,628 3,641 Short-term borrowings 46 23 103 73 Long-term debt 320 324 964 962 ------- ------- ------- ------- Total Interest expense 1,224 1,461 3,695 4,676 ------- ------- ------- ------- NET INTEREST INCOME 3,558 3,299 10,371 9,825 PROVISION FOR LOAN LOSSES 100 165 390 495 ------- ------- ------- ------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 3,458 3,134 9,981 9,330 OTHER INCOME Service charges and fees 575 489 1,489 1,391 Income from fiduciary activities 83 85 238 189 Net realized gains on sales of securities 51 156 313 542 Gains on sale of loans 1 19 63 192 Other 161 136 469 381 ------- ------- ------- ------- Total other income 871 885 2,572 2,695 OTHER EXPENSES Salaries and employee benefits 1,276 1,232 3,840 3,681 Occupancy, furniture and equipment, net 335 346 1,025 1,061 Data processing related 149 137 451 415 Losses on lease residuals -- -- 90 25 Taxes, other than income 2 (3) 185 167 Professional Fees 77 67 233 195 Other 670 638 1,724 1,814 ------- ------- ------- ------- Total other expenses 2,509 2,417 7,548 7,358 INCOME BEFORE TAX 1,820 1,602 5,005 4,667 INCOME TAX EXPENSE 500 408 1,358 1,241 ------- ------- ------- ------- NET INCOME $ 1,320 $ 1,194 $ 3,647 $ 3,426 ======= ======= ======= ======= Basic earnings per share $ 0.50 $ 0.46 $ 1.38 $ 1.32 ======= ======= ======= ======= Diluted earnings per share $ 0.49 $ 0.45 $ 1.35 $ 1.30 ======= ======= ======= ======= Cash dividends per share $ 0.17 $ 0.16 $ 0.51 $ 0.48 ======= ======= ======= =======
NORWOOD FINANCIAL CORP. Financial Highlights (Unaudited) (dollars in thousands, except per share data) Three Months Ended September 30 2004 2003 ------------------------------- ----------- ---------- Net interest income $ 3,558 $ 3,299 Net income 1,320 1,194 Net interest spread (fully taxable equivalent) 3.60% 3.44% Net interest margin (fully taxable equivalent) 3.93% 3.80% Return on average assets 1.32% 1.22% Return on average equity 12.01% 11.41% Basic earnings per share $ 0.50 $ 0.46 Diluted earnings per share 0.49 0.45 Nine Months Ended September 30 Net interest income $ 10,371 $ 9,825 Net income 3,647 3,426 Net interest spread (fully taxable equivalent) 3.59% 3.48% Net interest margin (fully taxable equivalent) 3.91% 3.85% Return on average assets 1.24% 1.22% Return on average equity 11.18% 11.16% Basic earnings per share $ 1.38 $ 1.32 Diluted earnings per share 1.35 1.30 As of September 30 Total Assets $ 398,573 $ 392,717 Total Loans receivable 256,919 228,884 Allowance for loan losses 3,418 3,272 Total deposits 317,945 315,460 Stockholders' equity 44,790 41,835 Trust Assets under management 77,651 70,058 Book value per share $ 16.63 $ 15.60 Equity to total assets 11.24% 10.65% Allowance to total loans receivable 1.33% 1.43% Nonperforming loans to total loans 0.03% 0.13%