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Net income: Q1 2024 was $4.43 million, a decrease of 23.3% from $5.78 million in Q1 2023.
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Earnings per share: It was lowered from $0.71 in Q1 2023 to $0.55 in Q1 2024.
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Total assets: The amount increased from $2.1 billion as of March 31, 2023 to $2.26 billion as of March 31, 2024.
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Net interest income: This decreased from $16.09 million in the first quarter of 2023 to $14.71 million in the first quarter of 2024.
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Total deposit amount: The amount increased from $1.76 billion as of March 31, 2023 to $1.84 billion as of March 31, 2024.
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Average return on assets: It will decrease from 1.13% in Q1 2023 to 0.80% in Q1 2024.
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Average return on equity: It decreased from 13.61% in Q1 2023 to 9.79% in Q1 2024.
Norwood Financial Corporation (NASDAQ:NWFL), the parent company of Wayne Bank, disclosed its first quarter 2024 financial results through an 8-K filing on April 22, 2024. The company reported net income of $4.433 million for the quarter, down $1.349 million from $5.782 million in the year-ago period. This decrease was primarily due to a decrease in net interest income of $1,383,000 and an increase in total other expense of $1,296,000.
Norwood Financial Corp. is headquartered in Honesdale, Pennsylvania and operates as a bank holding company through Wayne Bank. We provide a variety of banking services, including personal and business credit services, trust and investment products, and real estate settlement services, across multiple counties in Pennsylvania and New York. The bank maintains multiple automated teller machines and has a large presence in the communities it serves.
Financial performance summary
Fully diluted earnings per share (EPS) for the quarter was $0.55, down from $0.71 in the first quarter of 2023. The annual average return on assets and average return on equity also declined to 0.80% and 9.79%, respectively. , compared to 1.13% and 13.61% in the previous year. Despite these challenges, his total assets increased by $156.1 million to $2.26 billion as of March 31, 2024.
Net interest income on a fully taxable equivalent basis was $14,905,000 in the quarter, compared to $16,275,000 in the same period in 2023. The company experienced a significant increase in cost of funds of 147 basis points, which exceeded his 71 basis point increase in 2023. Yields on interest-earning assets improve, reducing the annualized net interest spread by 2.07%.
Operational highlights and challenges
President and CEO James O. Donnelly commented on the results, noting pressure on net interest income from higher deposit costs. However, he highlighted growth in its core business areas, with loan volumes increasing by 4.5% annually and total deposits increasing by 9.8% annually. Mr Donnelly highlighted the bank's strong capital position and improving credit quality metrics, which remain above its “capital adequacy” target.
The bank also had a small increase in other income, primarily due to income and income from bank-owned life insurance and a net increase in other income categories. Meanwhile, the allowance for credit losses decreased $924,000 due to lower non-performing loan levels and lower charge-offs.
Strategic outlook and future prospects
Looking ahead, Norwood Financial Corporation aims to continue to increase shareholder value by leveraging growth opportunities in the services sector. The bank's strategic initiatives are focused on maintaining its financial health and growing its customer base across its operating regions.
In conclusion, although Norwood Financial Corporation faced some financial headwinds in the first quarter of 2024, its strategic growth initiatives and strong capital base provide a solid foundation for future performance. Investors and stakeholders will be watching to see how the company overcomes the challenges of rising costs and takes advantage of opportunities in the coming quarters.
For more information, see Norwood Financial Corp's full 8-K earnings release here.
This article first appeared on GuruFocus.
