Financial Performance - For the year ended December 31, 2024, net interest income was $62.191 million, a slight increase from $62.067 million in 2023[98]. - The net loss for 2024 was $160,000, a significant decline from net income of $16.759 million in 2023[98]. - The dividend payout ratio for 2024 was -6074.38%, indicating a substantial change from 56.19% in 2023[98]. - Total other income for the year ended December 31, 2024, was a loss of $11,151,000, a decrease of $19,275,000 compared to income of $8,124,000 in 2023[158]. - Net realized losses on sales of securities increased to $19,962,000 in 2024, up from a loss of $209,000 in 2023[159]. - Other expenses totaled $48,625,000 for the year ended December 31, 2024, compared to $43,497,000 in 2023, reflecting an increase of $5,128,000[162]. - Salaries and employee benefits increased by $1,453,000 to $25,018,000 in 2024[160]. - The efficiency ratio for 2024 was 68.5%, up from 62.1% in 2023, indicating a decline in operational efficiency[161]. Credit Losses and Allowances - The provision for credit losses decreased significantly to $2.673 million in 2024 from $5.548 million in 2023[98]. - The allowance for credit losses to total loans ratio was 1.16% as of December 31, 2024, slightly down from 1.18% in 2023[98]. - The allowance for credit losses was $19,843,000, representing 1.16% of total loans, compared to $18,968,000 and 1.18% in 2023[121]. - Net charge-offs for 2024 totaled $1,671,000, a significant decrease from $6,078,000 in 2023, reflecting a net charge-off rate of 0.10% compared to 0.39% in the previous year[131]. - The provision for credit losses decreased to $2,546,000 for the twelve months ended December 31, 2024, down from $5,581,000 in 2023[131]. Assets and Loans - Total assets increased to $2.317 billion as of December 31, 2024, up by $116.4 million from $2.201 billion in 2023[99]. - Loans receivable rose to $1.714 billion, an increase of $110.2 million compared to $1.604 billion in 2023, driven by increases in consumer and commercial real estate loans[100]. - As of December 31, 2024, total loans receivable amounted to $1,713,638,000, an increase from $1,603,618,000 in 2023[129]. - The company maintained a diversified loan portfolio with no concentrations exceeding 10% in any one industry as of December 31, 2024[124]. - The company had $716.9 million in commercial real estate loans, accounting for 41.8% of total loans outstanding as of December 31, 2024[126]. - Non-performing loans totaled $7,874,000 as of December 31, 2024, slightly up from $7,622,000 in 2023[135]. Capital and Equity - Stockholders' equity increased to $213.508 million in 2024 from $181.070 million in 2023[98]. - The Tier 1 Capital to risk-adjusted assets ratio improved to 12.35% in 2024, up from 11.99% in 2023[98]. - The total risk-based capital ratio as of December 31, 2024, was 13.45%, up from 13.06% in 2023[164]. - Total stockholders' equity as of December 31, 2024, was $213.5 million, an increase from $181.1 million in 2023, primarily due to $28.1 million in net proceeds from an offering[164]. Interest Income and Expenses - Fully taxable equivalent net interest income for 2024 totaled $63,010,000, an increase of $194,000 from 2023, with a net interest spread of 2.17% compared to 2.47% in the previous year[150][154]. - Total interest expense rose to $50,389,000 in 2024, with an average cost of interest-bearing liabilities increasing to 3.07% from 2.21% in 2023[156]. - The net interest margin on a tax-equivalent basis for 2024 was 2.91%, down from 3.06% in 2023[168]. - Average loans outstanding increased by $80.5 million in 2024, contributing to an increase in interest income of $14.3 million[150]. - Total interest-earning assets increased to $17,110,000 in 2024, up from $6,773,000 in 2023, primarily driven by a $9,550,000 increase in loans receivable[172]. Securities and Investments - The securities portfolio was valued at $397.8 million, with unrealized losses of $33.5 million as of December 31, 2024[136]. - The average life of the securities portfolio was 7.1 years, with purchases totaling $208.1 million during the year[137]. - The Company held 215 investment securities in a loss position as of December 31, 2024, with a combined unrealized loss of $42.6 million, primarily due to changes in interest rates[140]. - The Company repositioned its available-for-sale debt securities portfolio, selling securities with an amortized cost of approximately $175 million and recognizing a pre-tax loss of $20 million[141]. Deposits and Liquidity - Total deposits as of December 31, 2024, were $1.859 billion, an increase of $64.0 million from the previous year, with time deposits increasing by $58.4 million[147]. - Non-interest bearing demand deposits decreased to $381.5 million in 2024 from $399.5 million in 2023[148]. - The company's liquidity as of December 31, 2024, was $470.1 million, representing 20.3% of total assets, down from 21.5% in 2023[186]. - The company maintained established lines of credit totaling $192.0 million, with $178.5 million outstanding as of December 31, 2024[187]. Taxation - The effective tax rate for 2024 was 38.0%, compared to 20.7% in 2023, with an income tax benefit of $98,000 in 2024[152]. - The effective tax rate for 2024 was 38.0%, compared to an income tax expense of $4,387,000 and a rate of 20.7% in 2023[163]. Interest Rate Sensitivity - The sensitivity analysis indicated that a 200-basis point increase in interest rates would decrease net interest income by 5.1% in year 1 and 2.7% in year 2[180]. - The yield on U.S. Treasury 5-year notes increased by 54 basis points from 3.84% to 4.38% during the year[179]. - The effective duration of the bond portfolio remained steady at 5.5 years as of December 31, 2024[181]. - The company’s asset and liability management aims to maintain a strong, stable net interest margin while effectively utilizing capital[174].
Norwood Financial (NWFL) - 2024 Q4 - Annual Report