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Norwood Financial Corp announces First Quarter 2025 Results

1. NWFL's EPS increased 14.5% to $0.63 year-over-year. 2. Return on assets improved to over 1.00%, signaling financial health. 3. Net interest margin rose to 3.30%, enhancing profitability. 4. Loan growth accelerated at a 13.5% annualized rate, boosting lending capacity. 5. Total deposits climbed 9.00%, reflecting increased customer confidence.

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FAQ

Why Very Bullish?

The significant increases in EPS, return on assets, and loan growth indicate strong operational performance, similar to prior bullish market conditions affecting NWFL positively in the past, such as the post-COVID recovery period showing similar growth metrics.

How important is it?

The reported financial highlights are indicative of a strong upward trend, significantly relevant for investors looking at NWFL's growth potential and stability in the current economic environment.

Why Short Term?

The positive quarterly results and capital improvements are likely to impact NWFL’s stock price quickly, similarly seen in previous quarters where financial reports led to immediate market reactions.

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Quarterly Highlights: Fully diluted EPS of $0.63, a 14.5% increase over the same period in 2024Return on assets rises to over 1.00%.Net interest margin increased 30 basis points vs. the prior quarter and 11 basis points over the prior year.Loans grew at a 13.5% annualized rate during the first quarter.Capital continues to improve on increased earnings and lower AOCI adjustment. HONESDALE, Pa., April 17, 2025 (GLOBE NEWSWIRE) -- Norwood Financial Corp (Nasdaq Global Market-NWFL) and its subsidiary, Wayne Bank, announced results for the three months March 31, 2025. Jim Donnelly, President and Chief Executive Officer of Norwood Financial Corp and Wayne Bank, stated, “The actions that we took in December 2024 to improve our capital and earnings have given us a great start to 2025. The portfolio repositioning has improved our net interest margin. That, coupled with strong annualized growth in loans and deposits, put us on a positive trajectory for 2025. We continue to benefit from lower deposit costs together with higher assets yields and our deposit growth has allowed us to lower our use of wholesale borrowings.” Mr. Donnelly continued, “The capital that we raised in December 2024, has strengthened our balance sheet and will allow our Company to better weather any headwinds that come with global uncertainty. Although we do not have any international business per se, we do have customers who may have exposure to developing trade conditions. Because we are a community bank we are contacting our customers to determine how we can best assist them, if necessary. Additionally, we are being prudent regarding the opportunities in front of us, taking the time to assess the effects of changing economic circumstances.” Selected Financial Highlights (dollars in thousands, except per share data)Year-Over YearLinked QuarterAdjusted Linked Quarter1  3 Months Ended3 Months Ended3 Months Ended  Mar-25Mar-24ChangeDec-24ChangeDec-24Change Net interest income17,857 14,710 3,14716,625 1,23216,625 1,232 Net interest spread (fte)2.61% 2.08% 53 bps2.31% 30 bps2.31% 30 bps Net interest margin (fte)3.30% 2.80% 50 bps3.04% 26 bps3.04% 26 bps Net income (loss)5,773 4,433 1,340(12,651) 18,4243,119 2,654 Diluted earnings per share0.63 0.55 0.08-1.54 -2.090.38 0.25 Return on average assets1.01% 0.80% 21 bps-2.19% 320 bps0.54% 47 bps Return on tangible equity12.40% 11.65% 75 bps-30.77% (4,317 bps)7.59% 481 bps      1 - The above table includes non-GAAP financial measures excluding the one-time $20.0 million net realized loss incurred in the fourth quarter as a result of the repositioning of our investment portfolio. Please see “Non-GAAP Financial Measures” below for a reconciliation of all non-GAAP financial measures. Discussion of financial results for the three months ended March 31, 2025: The Company had net income of $5.8 million for the three months ended March 31, 2025, an increase $1.3 million over the same period last year.Net interest income increased during the first quarter of 2025 compared to the first quarter of 2024 due to increases in asset yields which outpaced increases in yields on liabilities.Correspondingly, the net interest margin in the first quarter of 2025 was 3.30% compared to 2.80% in the first quarter of 2024.The efficiency ratio for the first quarter of 2025 was 59.7% compared to 70.6% in the first quarter of 2024.As of March 31, 2025, total assets were $2.376 billion, compared to $2.260 billion at March 31, 2024, an increase of 5.07%.Loans receivable were $1.771 billion at March 31 2025, compared to $1.621 billion at March 31, 2024, an increase of 9.24%.Total deposits were $2.004 billion at March 31 2025, compared to $1.839 billion at March 31, 2024, an increase of 9.00%.Tangible Common Equity was 8.16% as of March 31, 2025, versus 6.80% at March 31, 2024.Tangible Book Value per share increased $0.81 from $19.85 at December 31, 2024 to $20.66 at March 31, 2025. Norwood Financial Corp is the parent company of Wayne Bank, which operates from sixteen offices throughout Northeastern Pennsylvania and fourteen offices in Delaware, Sullivan, Ontario, Otsego and Yates Counties, New York. The Company’s stock trades on the Nasdaq Global Market under the symbol “NWFL”. Non-GAAP Financial Measures This release references adjusted net income, adjusted diluted earnings per share, adjusted return on average assets and adjusted return on tangible equity, all of which are non-GAAP (Generally Accepted Accounting Principles) financial measures. Adjusted values were derived by reversing the effect of loss on sale of securities in December 2024 along with the attendant tax effect. We believe the presentation of adjusted net income, adjusted diluted earnings per share, adjusted return on average assets and adjusted return on tangible equity ensures comparability of these measures as the portfolio restructuring is not something the Company expects to be a recurring event. Adjusted Return on Average Assets   (Dollars in thousands)    Three Months Ended December 31, 2024Net (loss) income$(12,651) Average assets 2,299,732 Return on average assets (annualized) -2.19%Net (loss) income (12,651) Net realized losses on sale of securities 19,962 Tax effect at 21% (4,192) Adjusted Net Income (Non-GAAP) 3,119 Average assets 2,299,732 Adjusted return on average assets (annualized)   (Non-GAAP) 0.54%        Adjusted Return on Average Tangible Shareholders' Equity   (Dollars in thousands)        Three Months Ended December 31, 2024Net (loss) income$(12,651) Average shareholders' equity 192,981 Average intangible assets 29,424 Average tangible shareholders' equity 163,557 Return on average tangible shareholders' equity (annualized) -30.77%Net (loss) income (12,651) Net realized losses on sale of securities 19,962 Tax effect at 21% (4,192) Adjusted Net Income (Non-GAAP) 3,119 Average tangible shareholders' equity 163,557 Adjusted return on average shareholders' equity (annualized)   (Non-GAAP) 7.59%        Adjusted Earnings Per Share   (Dollars in thousands)        Three Months Ended December 31, 2024GAAP-Based Earnings Per Share, Basic$(1.54) GAAP-Based Earnings Per Share, Diluted$(1.54) Net (Loss) Income (12,651) Net realized losses on sale of securities 19,962 Tax effect at 21% (4,192) Adjusted Net Income (Non-GAAP) 3,119 Adjusted Earnings per Share, Basic (Non-GAAP)$0.38 Adjusted Earnings per Share, Diluted (Non-GAAP)$0.38  The following table reconciles average equity to average tangible equity:   For the Period Ended(dollars in thousands) March 31   2025   2024        Average equity $218,194  $182,088 Average goodwill and other intangibles  (29,409)  (29,476)Average tangible equity $188,785  $152,612         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, among other things, 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. Contact: John M. McCaffery Executive Vice President & Chief Financial Officer NORWOOD FINANCIAL CORP 272-304-3003 www.waynebank.com       NORWOOD FINANCIAL CORP    Consolidated Balance Sheets     (dollars in thousands, except share and per share data)     (unaudited)      March 31  2025  2024 ASSETS       Cash and due from banks$31,729 $19,519    Interest-bearing deposits with banks 43,678  92,444           Cash and cash equivalents 75,407  111,963        Securities available for sale 408,742  398,374   Loans receivable 1,771,269  1,621,448   Less: Allowance for credit losses 20,442  18,020      Net loans receivable 1,750,827  1,603,428   Regulatory stock, at cost 7,616  6,545   Bank premises and equipment, net 20,273  18,057   Bank owned life insurance 46,914  45,869   Foreclosed real estate owned -  97   Accrued interest receivable 8,587  8,135   Deferred tax assets, net 17,859  21,642   Goodwill 29,266  29,266   Other intangible assets 136  202   Other assets 10,417  16,845           TOTAL ASSETS$2,376,044 $2,260,423      LIABILITIES       Deposits:         Non-interest bearing demand$391,377 $383,362      Interest-bearing 1,613,071  1,455,636           Total deposits 2,004,448  1,838,998   Short-term borrowings -  60,055   Other borrowings 118,590  151,179   Accrued interest payable 13,864  11,737   Other liabilities 18,435  17,241             TOTAL LIABILITIES 2,155,337  2,079,210      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: 2025: 9,489,398 shares, 2024: 8,310,847 shares 949  831   Surplus 126,785  97,893   Retained earnings 127,865  137,285   Treasury stock, at cost: 2025: 229,979 shares, 2024: 200,690 shares (6,208) (5,397)  Accumulated other comprehensive loss (28,684) (49,399)           TOTAL STOCKHOLDERS' EQUITY 220,707  181,213                TOTAL LIABILITIES AND                     STOCKHOLDERS' EQUITY$2,376,044 $2,260,423           NORWOOD FINANCIAL CORP    Consolidated Statements of Income     (dollars in thousands, except per share data)      (unaudited)       Three Months Ended March 31,  2025  2024 INTEREST INCOME        Loans receivable, including fees$25,988 $23,681     Securities 3,870  2,526     Other 226  731          Total Interest income 30,084  26,938      INTEREST EXPENSE       Deposits 10,748  10,110    Short-term borrowings 458  336    Other borrowings 1,021  1,782         Total Interest expense 12,227  12,228 NET INTEREST INCOME 17,857  14,710 PROVISION FOR (RELEASE OF) CREDIT LOSSES$857 $(624)NET INTEREST INCOME AFTER PROVISION FOR (RELEASE OF) CREDIT LOSSES 17,000  15,334           OTHER INCOME        Service charges and fees 1,513  1,343     Income from fiduciary activities 325  238     Gains on sales of loans, net 47  6     Earnings and proceeds on life insurance policies 286  268     Other 180  151            Total other income 2,351  2,006      OTHER EXPENSES          Salaries and employee benefits 6,472  6,135       Occupancy, furniture and equipment 1,378  1,261       Data processing and related operations 1,085  1,022       Taxes, other than income 192  93       Professional fees 659  585       FDIC Insurance assessment 406  361       Foreclosed real estate 4  21       Amortization of intangibles 15  19       Other 1,853  2,235              Total other expenses 12,064  11,732      INCOME BEFORE TAX EXPENSE 7,287  5,608 INCOME TAX EXPENSE 1,514  1,175 NET INCOME$5,773 $4,433      Basic earnings per share$0.63 $0.55      Diluted earnings per share$0.63 $0.55         NORWOOD FINANCIAL CORP                  NET INTEREST MARGIN ANALYSIS                  (dollars in thousands)                                      For the Quarter Ended March 31, 2025December 31, 2024March 31, 2024 Average Average Average Average Average Average  BalanceInterest   Rate  BalanceInterest    Rate  BalanceInterest    Rate   (2)(1)(3) (2)(1)(3) (2)(1)(3) Assets                  Interest-earning assets:                    Interest-bearing deposits with banks$20,802 $226 4.41 %$46,629 $574 4.90 %$53,930 $730 5.44 %   Securities available for sale:                       Taxable 408,427  3,623 3.60   404,777  2,434 2.39   402,275  2,147 2.15       Tax-exempt (1) 44,242  312 2.86   65,628  449 2.72   69,880  481 2.77          Total securities available for sale (1) 452,669  3,935 3.53   470,405  2,883 2.44   472,155  2,628 2.24       Loans receivable (1) (4) (5) 1,743,572  26,120 6.08   1,690,650  26,246 6.18   1,612,106  23,775 5.93          Total interest-earning assets  2,217,043  30,281 5.54   2,207,684  29,703 5.35   2,138,191  27,133 5.10  Non-interest earning assets:                     Cash and due from banks 28,705      27,283      24,593        Allowance for credit losses (20,154)     (18,741)     (19,096)       Other assets 93,131      83,506      73,692             Total non-interest earning assets  101,682      92,048      79,189     Total Assets $2,318,725     $2,299,732     $2,217,380     Liabilities and Stockholders' Equity                  Interest-bearing liabilities:                     Interest-bearing demand and money market$546,884 $2,801 2.08  $528,330 $3,017 2.27  $449,825 $2,311 2.07     Savings 211,905  142 0.27   209,362  162 0.31   235,545  250 0.43     Time 793,803  7,805 3.99   764,819  7,805 4.06   725,199  7,549 4.19        Total interest-bearing deposits  1,552,592  10,748 2.81   1,502,511  10,984 2.91   1,410,569  10,110 2.88  Short-term borrowings 44,297  458 4.19   46,267  348 2.99   57,997  336 2.33  Other borrowings 93,549  1,021 4.43   133,620  1,528 4.55   155,498  1,782 4.61     Total interest-bearing liabilities  1,690,438  12,227 2.93   1,682,398  12,860 3.04   1,624,064  12,228 3.03  Non-interest bearing liabilities:                     Demand deposits 380,544      394,001      386,066        Other liabilities 29,549      30,352      25,162           Total non-interest bearing liabilities  410,093      424,353      411,228        Stockholders' equity 218,194      192,981      182,088     Total Liabilities and Stockholders' Equity $2,318,725     $2,299,732     $2,217,380     Net interest income/spread (tax equivalent basis)   18,054 2.61 %   16,843 2.31 %   14,905 2.08 %Tax-equivalent basis adjustment   (197)     (218)     (195)  Net interest income  $17,857     $16,625     $14,710   Net interest margin (tax equivalent basis)    3.30 %    3.04 %    2.80 %                                      (1) Interest and yields are presented on a tax-equivalent basis using a marginal tax rate of 21%.              (2) Average balances have been calculated based on daily balances.               (3) Annualized                  (4) Loan balances include non-accrual loans and are net of unearned income.              (5) Loan yields include the effect of amortization of deferred fees, net of costs.               NORWOOD FINANCIAL CORP    Financial Highlights (Unaudited)    (dollars in thousands, except per share data)         For the Three Months Ended March 31 2025  2024      Net interest income$17,857 $14,710 Net income 5,773  4,433      Net interest spread (fully taxable equivalent) 2.61% 2.08%Net interest margin (fully taxable equivalent) 3.30% 2.80%Return on average assets 1.01% 0.80%Return on average equity 10.73% 9.79%Return on average tangible equity 12.40% 11.68%Basic earnings per share$0.63 $0.55 Diluted earnings per share$0.63 $0.55      As of March 31 2025  2024      Total assets$2,376,044 $2,260,423 Total loans receivable 1,771,269  1,621,448 Allowance for credit losses 20,442  18,020 Total deposits 2,004,448  1,838,998 Stockholders' equity 220,707  181,213 Trust assets under management 198,761  202,020      Book value per share$23.84 $22.34 Tangible book value per share$20.66 $18.71 Equity to total assets 9.29% 8.02%Allowance to total loans receivable 1.15% 1.11%Nonperforming loans to total loans 0.45% 0.23%Nonperforming assets to total assets 0.33% 0.17%      NORWOOD FINANCIAL CORP          Consolidated Balance Sheets (unaudited)          (dollars in thousands)            March 31 December 31 September 30 June 30 March 31  2025 2024 2024 2024 2024ASSETS          Cash and due from banks$31,729$27,562$47,072$29,903$19,519Interest-bearing deposits with banks 43,678 44,777 35,808 39,492 92,444Cash and cash equivalents 75,407 72,339 82,880 69,395 111,963           Securities available for sale 408,742 397,846 396,891 397,578 398,374Loans receivable 1,771,269 1,713,638 1,675,139 1,641,356 1,621,448Less: Allowance for credit losses 20,442 19,843 18,699 17,807 18,020Net loans receivable 1,750,827 1,693,795 1,656,440 1,623,549 1,603,428Regulatory stock, at cost 7,616 13,366 6,329 6,443 6,545Bank owned life insurance 46,914 46,657 46,382 46,121 45,869Bank premises and equipment, net 20,273 19,657 18,503 18,264 18,057Foreclosed real estate owned - - - - 97Goodwill and other intangibles 29,402 29,418 29,433 29,449 29,468Other assets 36,863 44,384 42,893 44,517 46,622TOTAL ASSETS$2,376,044$2,317,462$2,279,751$2,235,316$2,260,423           LIABILITIES          Deposits:          Non-interest bearing demand$391,377$381,479$420,967$391,849$383,362Interest-bearing deposits 1,613,071 1,477,684 1,434,284 1,419,323 1,455,636Total deposits 2,004,448 1,859,163 1,855,251 1,811,172 1,838,998Borrowings 118,590 214,862 197,412 210,422 211,234Other liabilities 32,299 29,929 31,434 31,534 28,978TOTAL LIABILITIES 2,155,337 2,103,954 2,084,097 2,053,128 2,079,210           STOCKHOLDERS' EQUITY 220,707 213,508 195,654 182,188 181,213           TOTAL LIABILITIES AND          STOCKHOLDERS' EQUITY$2,376,044$2,317,462$2,279,751$2,235,316$2,260,423            NORWOOD FINANCIAL CORP          Consolidated Statements of Income (unaudited)          (dollars in thousands, except per share data)            March 31 December 31 September 30 June 30 March 31Three months ended 2025  2024  2024  2024  2024 INTEREST INCOME          Loans receivable, including fees$25,988 $26,122 $25,464 $24,121 $23,681 Securities 3,870  2,789  2,526  2,584  2,526 Other 226  574  497  966  731 Total interest income 30,084  29,485  28,487  27,671  26,938            INTEREST EXPENSE          Deposits 10,748  10,984  10,553  10,687  10,110 Borrowings 1,479  1,876  2,003  2,059  2,118 Total interest expense 12,227  12,860  12,556  12,746  12,228 NET INTEREST INCOME 17,857  16,625  15,931  14,925  14,710 PROVISION FOR (RELEASE OF) CREDIT LOSSES 857  1,604  1,345  347  (624)NET INTEREST INCOME AFTER (RELEASE OF) PROVISION          FOR CREDIT LOSSES 17,000  15,021  14,586  14,578  15,334            OTHER INCOME          Service charges and fees 1,513  1,595  1,517  1,504  1,343 Income from fiduciary activities 325  224  256  225  238 Net realized (losses) gains on sales of securities -  (19,962) -  -  - Gains on sales of loans, net 47  50  103  36  6 Gains on sales of foreclosed real estate owned -  -  -  32  - Earnings and proceeds on life insurance policies 286  275  261  253  268 Other 180  159  158  157  151 Total other income 2,351  (17,659) 2,295  2,207  2,006            OTHER EXPENSES          Salaries and employee benefits 6,472  6,690  6,239  5,954  6,135 Occupancy, furniture and equipment, net 1,378  1,291  1,269  1,229  1,261 Foreclosed real estate 4  9  9  15  21 FDIC insurance assessment 406  335  339  309  361 Other 3,804  5,094  4,175  3,937  3,954 Total other expenses 12,064  13,419  12,031  11,444  11,732            INCOME BEFORE TAX (BENEFIT) EXPENSE 7,287  (16,057) 4,850  5,341  5,608 INCOME TAX (BENEFIT) EXPENSE 1,514  (3,406) 1,006  1,128  1,175 NET (LOSS) INCOME$5,773 $(12,651)$3,844 $4,213 $4,433            Basic (loss) earnings per share$0.63 $(1.54)$0.48 $0.52 $0.55            Diluted (loss) earnings per share$0.63 $(1.54)$0.48 $0.52 $0.55            Book Value per share$23.84 $23.02 $24.18 $22.52 $22.34 Tangible Book Value per share 20.66  19.85  20.54  18.88  18.71            Return on average assets (annualized) 1.01% -2.19% 0.68% 0.75% 0.80%Return on average equity (annualized) 10.73% -26.08% 8.09% 9.41% 9.79%Return on average tangible equity (annualized) 12.40% -30.77% 9.58% 11.26% 11.68%           Net interest spread (fte) 2.61% 2.31% 2.23% 2.06% 2.08%Net interest margin (fte) 3.30% 3.04% 2.99% 2.80% 2.80%           Allowance for credit losses to total loans 1.15% 1.16% 1.12% 1.08% 1.11%Net charge-offs to average loans (annualized) 0.07% 0.12% 0.08% 0.13% 0.08%Nonperforming loans to total loans 0.45% 0.46% 0.47% 0.47% 0.23%Nonperforming assets to total assets 0.33% 0.34% 0.35% 0.34% 0.17%

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