EX-99 2 ex99-1.htm EXHIBIT 99.1

FOR IMMEDIATE RELEASE

NORWOOD FINANCIAL CORP ANNOUNCES FIRST QUARTER EARNINGS

April 23, 2009

William W. Davis, Jr., President and Chief Executive Officer of Norwood Financial Corp (NWFL-Nasdaq Global Market) and its subsidiary, Wayne Bank announced earnings of $1,737,000 for the three months ended March 31, 2009 compared to $1,779,000 for the similar period in 2008. Earnings per share on a fully diluted basis, were $.63 in the current period compared to $.64 in the 2008 period. The return on average assets for the three months ended March 31, 2009 was 1.39% with a return on average equity of 11.80%.

Total assets as of March 31, 2009 were $511.4 million with loans receivable of $351.4 million, deposits of $370.4 million and total stockholders’ equity of $60.2 million. Assets have increased $27.5 million or 5.7% from March 31, 2008. Loans receivable reflected an increase of $22.1 million, or 6.7% since March 31, 2008. The growth in loans receivable was centered in both commercial and residential real estate loans. Non-performing assets, which include non-performing loans and foreclosed real estate, totaled $2,460,000 as of March 31, 2009 compared to $2,747,000 at December 31, 2008 and $302,000 at March 31, 2008. The increase from the prior year was related to two land development projects. Net charge-offs for the three months ended March 31, 2009 totaled $45,000 with a provision for loan losses of $225,000 compared to $19,000 in net charge-offs and a $75,000 provision for loan losses for the similar period in 2008. The allowance for loan losses was $4,413,000 at March 31, 2009, compared to $4,137,000 at March 31, 2008.

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Net interest income on a fully taxable equivalent basis (fte) was $4,842,000 in the current period, an increase of $361,000 or 8.1% over the similar period in 2008. The resulting net interest margin (fte) for the three months ended March 31, 2009 was 3.96% increasing from 3.90% in the 2008 period. Other income for the three months ended March 31, 2009 totaled $1,281,000 compared to $1,262,000 in the similar period of 2008. The current period includes $133,000 related to gains on the sale of $9.7 million of residential mortgage loans compared to $388,000 in similar gains on the sale of $13.9 million of loans in the 2008 period. The mortgages, principally 30 year fixed rates, were sold for interest rate risk management. During the 2009 quarter, the Company also realized $161,000 in gains on sales of securities compared to no such gains in the 2008 quarter. Effective March 31, 2009, the Company closed its office in Hamlin and recorded a $150,000 gain on the sale of the related deposits to another financial institution. Other expenses for the three months ended March 31, 2009 totaled $3,275,000, an increase of $314,000 from $2,961,000 in the similar period in 2008. The increase is due in part to a $114,000 increase in FDIC insurance assessments.

Mr. Davis commented, “Even though we are operating in a very challenging environment, we believe the Company had a very solid start to 2009. Our core earnings are strong and our capital levels are at the top of our peer group. We are certainly aware that the slow down in the economy, increased unemployment and the soft real estate market will continue to impact our customers, but are optimistic that all the government stimulus programs will eventually turn this economy around.”

Norwood Financial Corp., through its subsidiary Wayne Bank, operates eleven offices in Wayne, Pike and Monroe Counties, Pennsylvania. The Company’s stock is traded on the Nasdaq Global Market, under the symbol, “NWFL”.

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Forward-Looking Statements. 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 the absolute and relative levels of interest rates, the ability to control costs and expenses, demand for real estate, general economic conditions and the effectiveness of governmental response thereto. 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.

Non-GAAP Financial Measures

This release references tax-equivalent interest income and net interest income, which are non-GAAP financial measures. Tax-equivalent interest income and net interest income are derived from GAAP interest income and net interest income using an assumed tax rate of 34%. We believe the presentation of interest income and net interest income on a tax–equivalent basis ensures comparability of interest income and net interest income arising from both taxable and tax-exempt sources and is consistent with industry practice.

Contact:        Lewis J. Critelli

Executive Vice President, Secretary &

Chief Financial Officer

NORWOOD FINANCIAL CORP

570-253-8512

www.waynebank.com

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NORWOOD FINANCIAL CORP.

Consolidated Balance Sheets

(dollars in thousands, except share data)

(unaudited)

		March 31,
		2009			2008
ASSETS
Cash and due from banks		$	5,682		$	8,283
Interest bearing deposits with banks			9,329			33
Federal funds sold			3,000			—
Cash and cash equivalents			18,011			8,316
Securities available for sale			124,222			130,633
Securities held to maturity, fair value 2009: $724 2008: $726			707			706
Loans receivable (net of unearned Income)			351,433			329,377
Less: Allowance for loan losses			4,413			4,137
Net loans receivable			347,020			325,240
Investment in FHLB Stock, at cost			3,538			2,124
Bank premises and equipment,net			5,413			5,668
Bank owned life insurance			8,149			7,841
Foreclosed real estate owned			768			—
Accrued interest receivable			2,314			2,409
Other assets			1,282			1,030
TOTAL ASSETS		$	511,424		$	483,967
LIABILITIES
Deposits:
Non-interest bearing demand		$	57,270		$	55,618
Interest-bearing			313,146			315,535
Total deposits			370,416			371,153
Short-term borrowings			29,412			28,006
Other borrowings			43,000			23,000
Accrued interest payable			1,944			2,621
Payable on sale of deposits			3,607			—
Other liabilities			2,895			2,613
TOTAL LIABILITIES			451,274			427,393
STOCKHOLDERS' EQUITY
Common Stock, $.10 par value, authorized 10,000,000 shares
issued: 2,840,872			284			284
Surplus			9,993			10,119
Retained earnings			51,394			47,603
Treasury stock, at cost: 2009: 106,041 shares, 2008: 101,328 shares			(3,286	)		(3,152	)
Accumulated other comprehensive income			1,765			1,720
TOTAL STOCKHOLDERS' EQUITY			60,150			56,574
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY		$	511,424		$	483,967

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NORWOOD FINANCIAL CORP.

Consolidated Statements of Income

(dollars in thousands, except per share data)

(unaudited)

		Three Months Ended March 31,
		2009			2008
INTEREST INCOME
Loans receivable, including fees		$	5,287		$	5,641
Securities			1,397			1,489
Other			6			19
Total Interest income			6,690			7,149
INTEREST EXPENSE
Deposits			1,501			2,371
Short-term borrowings			96			187
Other borrowings			412			267
Total Interest expense			2,009			2,825
NET INTEREST INCOME			4,681			4,324
PROVISION FOR LOAN LOSSES			225			75
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES			4,456			4,249
OTHER INCOME
Service charges and fees			598			638
Income from fiduciary activities			82			92
Net realized gains on sales of securities			161			—
Gains on sale of loans and servicing rights			133			388
Gain on sale of deposits			150			—
Other			157			144
Total other income			1,281			1,262
OTHER EXPENSES
Salaries and employee benefits			1,614			1,546
Occupancy, furniture and equipment			485			430
Data processing related			196			188
Taxes, other than income			136			126
Professional Fees			98			90
FDIC Insurance assessment			126			12
Foreclosed real estate owned			12			—
Other			608			569
Total other expenses			3,275			2,961
INCOME BEFORE TAX			2,462			2,550
INCOME TAX EXPENSE			725			771
NET INCOME		$	1,737		$	1,779
Basic earnings per share		$	0.63		$	0.65
Diluted earnings per share		$	0.63		$	0.64

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NORWOOD FINANCIAL CORP.

Financial Highlights (Unaudited)

(dollars in thousands, except per share data)

For the Three Months March 31	2009			2008
Net interest income	$	4,681		$	4,324
Net income		1,737			1,779
Net interest spread (fully taxable equivalent)		3.54	%		3.24	%
Net interest margin (fully taxable equivalent)		3.96	%		3.90	%
Return on average assets		1.39	%		1.49	%
Return on average equity		11.80	%		12.68	%
Basic earnings per share	$	0.63		$	0.65
Diluted earnings per share		0.63			0.64
As of March 31
Total Assets	$	511,424		$	483,967
Total Loans receivable		351,433			329,377
Allowance for loan losses		4,413			4,137
Total deposits		370,416			371,153
Stockholders' equity		60,150			56,574
Trust Assets under management		85,146			99,575
Book value per share	$	21.99		$	20.65
Equity to total assets		11.76	%		11.69	%
Allowance to total loans receivable		1.26	%		1.26	%
Nonperforming loans to total loans		0.48	%		0.09	%
Nonperforming assets to total assets		0.48	%		0.06	%

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NORWOOD FINANCIAL CORP.

Consolidated Balance Sheets (unaudited)

(dollars in thousands)

		31-Mar		31-Dec		30-Sep		30-Jun		31-Mar
		2009		2008		2008		2008		2008
ASSETS
Cash and due from banks		$5,682		$6,463		$9,277		$9,664		$8,283
Interest bearing deposits with banks		9,329		17		74		51		33
Federal funds sold		3,000		—		450		—		—
Cash and cash equivalents		18,011		6,480		9,801		9,715		8,316
Securities available for sale		124,222		130,120		128,287		130,811		130,633
Securities held to maturity		707		707		706		706		706
Loans receivable (net of unearned Income)		351,433		349,404		341,217		332,754		329,377
Less: Allowance for loan losses		4,413		4,233		4,331		4,237		4,137
Net loans receivable		347,020		345,171		336,886		328,517		325,240
Investment in FHLB stock		3,538		3,538		3,545		2,657		2,124
Bank premises and equipment, net		5,413		5,490		5,601		5,702		5,668
Foreclosed real estate owned		768		660		660		1,200		—
Other assets		11,745		12,130		13,149		12,601		11,280
TOTAL ASSETS		$511,424		$504,296		$498,635		$491,909		$483,967
LIABILITIES
Deposits:
Non-interest bearing demand		$57,270		$56,839		$63,474		$59,496		$55,618
Interest- bearing deposits		313,146		302,796		297,083		305,775		315,535
Total deposits		370,416		359,635		360,557		365,271		371,153
Other borrowings		72,412		81,126		76,575		65,060		51,006
Other liabilities		8,446		4,845		5,389		5,647		5,234
TOTAL LIABILITIES		451,274		445,606		442,521		435,978		427,393
STOCKHOLDERS' EQUITY		60,150		58,690		56,114		55,931		56,574
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY		$511,424		$504,296		$498,635		$491,909		$483,967

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NORWOOD FINANCIAL CORP.

Consolidated Statements of Income (unaudited)

(dollars in thousands, except per share data)

		31-Mar			31-Dec			30 Sep			30-Jun			31-Mar
Three months ended		2009			2008			2008			2008			2008
INTEREST INCOME
Loans receivable, including fees		$	5,287		$	5,423		$	5,509		$	5,410		$	5,641
Securities			1,397			1,508			1,549			1,537			1,489
Other			6			3			1			6			19
Total Interest income			6,690			6,934			7,059			6,953			7,149
INTEREST EXPENSE
Deposits			1,501			1,659			1,780			1,963			2,371
Borrowings			508			548			503			416			454
Total Interest expense			2,009			2,207			2,283			2,379			2,825
NET INTEREST INCOME			4,681			4,727			4,776			4,574			4,324
PROVISION FOR LOAN LOSSES			225			420			130			110			75
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES			4,456			4,307			4,646			4,464			4,249
OTHER INCOME
Service charges and fees			598			636			656			670			638
Income from fiduciary activities			82			111			91			110			92
Net realized gains (losses) on sales of securities			161			—			(27	)		9			—
Gains on sale of loans and servicing rights			133			13			90			8			388
Gain on sale of deposits			150			—			—			—			—
Other			157			130			163			165			144
Total other income			1,281			890			973			962			1,262
OTHER EXPENSES
Salaries and employee benefits			1,614			1,525			1,477			1,498			1,546
Occupancy, furniture and equipment , net			485			378			403			414			430
Foreclosed real estate owned			12			11			519			52			—
FDIC insurance assessment			126			54			12			12			12
Other			1,038			978			950			996			973
Total other expenses			3,275			2,946			3,361			2,972			2,961
INCOME BEFORE TAX			2,462			2,251			2,258			2,454			2,550
INCOME TAX EXPENSE			725			666			666			733			771
NET INCOME		$	1,737		$	1,585		$	1,592		$	1,721		$	1,779
Basic earnings per share		$	0.63		$	0.58		$	0.58		$	0.63		$	0.65
Diluted earnings per share		$	0.63		$	0.58		$	0.58		$	0.62		$	0.64
Book Value per share		$	21.99		$	21.45		$	20.51		$	20.44		$	20.65
Return on average equity			11.80	%		11.05	%		11.15	%		12.19	%		12.68	%
Return on average assets			1.39	%		1.26	%		1.28	%		1.42	%		1.49	%
Net interest spread			3.54	%		3.61	%		3.67	%		3.50	%		3.24	%
Net interest margin			3.96	%		4.09	%		4.21	%		4.06	%		3.90	%
Allowance for loan losses to total loans			1.26	%		1.21	%		1.27	%		1.27	%		1.26	%
Net charge-offs to average loans (annualized)			0.05	%		0.60	%		0.04	%		0.01	%		0.02	%
Nonperforming loans to total loans			0.48	%		0.60	%		0.66	%		0.09	%		0.09	%
Nonperforming assets to total assets			0.48	%		0.54	%		0.59	%		0.31	%		0.06	%

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