Norwood Financial (US:NWFL)2025-11-07 14:09Financial Performance - For the three months ended September 30, 2025, net income increased to $8.3 million, up from $3.8 million in the same period of 2024, representing a significant growth [153]. - Net income for the three months ended September 30, 2025, was $8.334 million, an increase of $4.490 million from $3.844 million for the same period in 2024 [154]. - For the nine months ended September 30, 2025, net income was $20.3 million, up from $12.5 million in the same period in 2024, primarily due to an $11.8 million increase in net interest income [168]. - Earnings per share for the three months ended September 30, 2025, were $0.89, compared to $0.48 for the same period in 2024 [153]. - Earnings per share for the nine months ended September 30, 2025, were $2.22, compared to $1.55 for the same period in 2024 [168]. Loans and Credit Quality - Loans receivable totaled $1.795 billion at September 30, 2025, reflecting a $101.0 million increase driven by growth in commercial real estate loans, commercial loans, consumer loans, construction loans, and residential loans [128]. - The allowance for credit losses was $19.9 million, representing 1.10% of total loans outstanding, compared to $19.8 million or 1.16% at December 31, 2024 [129]. - Non-performing loans decreased to $6.6 million or 0.36% of total loans as of September 30, 2025, down from $7.9 million or 0.46% at December 31, 2024 [130]. - The provision for credit losses was a release of $502,000 for the three months ended September 30, 2025, compared to a provision of $1.3 million in the same period in 2024 [159]. - The allowance for credit losses related to loans receivable was 1.10% of loans receivable as of September 30, 2025, compared to 1.12% at the same date in 2024 [159]. Deposits and Liquidity - Total deposits increased by $214.8 million during the nine months ended September 30, 2025, driven by increases in interest-bearing demand deposits, certificates of deposit, and other deposit categories [132]. - The Company had no short-term borrowings as of September 30, 2025, a decrease from $113.1 million at December 31, 2024, due to growth in deposits [133]. - Total liquidity as of September 30, 2025, was $216.4 million, representing 8.97% of total assets, an increase from $161.5 million and 6.97% of total assets as of December 31, 2024 [143]. - The Company had cash and cash equivalents of $74.7 million as of September 30, 2025 [143]. - Total interest-bearing liabilities decreased by $822,000 during the three months ended September 30, 2025, reflecting a net change in interest-bearing demand and money market accounts [154]. Interest Income and Expenses - Net interest income rose by $4.5 million, contributing to the overall increase in net income [153]. - Net interest income for the three months ended September 30, 2025, totaled $20.7 million, up $4.5 million from $16.2 million in the comparable period in 2024, with a net interest margin of 3.63% compared to 2.99% in 2024 [155][156]. - Interest income totaled $94.1 million with a yield on average earning assets of 5.61%, compared to $83.7 million and 5.20% for the same period in 2024 [171]. - Interest expense decreased to $11.7 million for the three months ended September 30, 2025, down from $12.6 million in 2024, reflecting lower market interest rates [157]. Capital and Equity - Total stockholders' equity rose to $234.9 million as of September 30, 2025, an increase of $20.3 million due to net income and an increase in the fair value of securities [137]. - Tier 1 Capital to average assets ratio improved to 9.62% as of September 30, 2025, compared to 9.36% at December 31, 2024 [139]. - The Company maintained compliance with all applicable regulatory capital requirements as of September 30, 2025 [142]. - Total capital ratio to risk-weighted assets was 13.33% as of September 30, 2025, down from 13.45% as of December 31, 2024 [139]. Other Income and Expenses - Other income increased to $2.5 million for the three months ended September 30, 2025, compared to $2.3 million in 2024, primarily due to a $143,000 increase in service charges and fees [160]. - Total expenses for the three months ended September 30, 2025, were $12.9 million, an increase of $903,000 from the same period in 2024, driven by higher salaries and professional fees [161]. - Income tax expense for the three months ended September 30, 2025, was $2.2 million, with an effective tax rate of 20.9%, compared to $1.0 million and 20.6% in 2024 [162]. - Other income increased to $7.1 million for the nine months ended September 30, 2025, up from $6.5 million in 2024, primarily due to higher service charges and fees [174]. - Other expenses totaled $37.5 million for the nine months ended September 30, 2025, an increase of $2.3 million or 6.60% compared to the same period in 2024 [175].