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NORWOOD FINANCIAL CORP (NWFL)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 GAAP results were impacted by a one-time $19.962M realized loss on securities tied to an investment portfolio repositioning, resulting in net loss of $12.651M and diluted EPS of -$1.54; adjusted diluted EPS was $0.38 as management excluded the non-recurring loss .
  • Core trends improved: net interest margin rose to 3.04% (up 5 bps Q/Q and 11 bps Y/Y) and loans grew at a 9% annualized pace, supporting stronger net interest income versus prior year .
  • Capital strengthened: the company priced a public offering of 1,000,000 shares at $26.00 (gross proceeds ~$26M; up to ~$30M with the over-allotment) to support capital ratios and the portfolio repositioning; tangible common equity per share reached $19.85 and stockholders’ equity increased to $213.5M .
  • Dividend increased to $0.31 per share (up $0.01 Q/Q and 3.33% Y/Y), signaling management confidence despite near-term reported losses from the repositioning .

What Went Well and What Went Wrong

What Went Well

  • Net interest margin expansion continued: NIM (fte) rose to 3.04% in Q4 (from 2.99% in Q3 and 2.93% in Q4 2023); CEO emphasized portfolio repositioning to improve future yields and interest-rate resilience .
  • Loan growth remained solid: loans rose to $1.714B at quarter-end; management called out 9% annualized loan growth in Q4 .
  • Capital actions bolstered future earnings power: completed equity raise to fund the AFS portfolio repositioning (moving ~2% yielding paper into ~5%), with management stating “we believe the portfolio is better positioned” for the rate environment; tangible book per share rose and AOCI improved .

What Went Wrong

  • One-time $19.962M securities loss drove a GAAP net loss of $12.651M in Q4; diluted EPS was -$1.54 (vs $0.04 in Q4 2023) .
  • Noninterest expense increased: Q4 other expenses were $13.419M (vs $10.849M in Q4 2023); full-year 2024 other expenses rose to $48.625M (vs $43.497M in 2023) .
  • Deposit costs remained elevated: Q4 deposit interest expense was $10.984M (vs $8.910M in Q4 2023); management noted higher 2024 deposit costs pressured full-year NIM (2.91% vs 3.06% in 2023) .

Financial Results

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Total Interest Income ($000)$26,085 $27,671 $28,487 $29,485
Net Interest Income ($000)$15,293 $14,925 $15,931 $16,625
Total Other Income ($000)$2,123 $2,207 $2,295 $(17,659)
Net (Loss) Income ($000)$355 $4,213 $3,844 $(12,651)
Diluted EPS ($)$0.04 $0.52 $0.48 $(1.54)
Net Interest Margin (fte) (%)2.93% 2.79% 2.99% 3.04%
Net Interest Spread (fte) (%)2.23% 2.05% 2.23% 2.31%
ROAA (annualized) (%)0.06% 0.75% 0.68% (2.19%)
ROATCE (annualized) (%)1.01% 11.26% 9.58% (30.77%)

Non-GAAP (adjusted) measures:

MetricQ4 2023Q4 2024
Adjusted Net Income ($000)$355 $3,119
Adjusted Diluted EPS ($)$0.04 $0.38
Adjusted ROAA (annualized) (%)0.06% 0.54%
Adjusted ROATCE (annualized) (%)1.01% 7.59%

KPIs and balance sheet:

KPIQ4 2023Q2 2024Q3 2024Q4 2024
Loans Receivable ($000)$1,603,618 $1,641,356 $1,675,139 $1,713,638
Total Deposits ($000)$1,795,159 $1,811,172 $1,855,251 $1,859,163
Allowance / Total Loans (%)1.18% 1.08% 1.12% 1.16%
NPLs / Total Loans (%)0.48% 0.47% 0.47% 0.46%
Net Charge-offs / Avg Loans (annualized) (%)0.79% 0.13% 0.08% 0.12%
Equity / Total Assets (%)8.23% 8.15% 8.58% 9.21%
Book Value / Share ($)22.33 23.26 24.92 23.02
Tangible BV / Share ($)18.69 19.62 21.28 19.85
Tangible Common Equity Ratio (%)6.98% ——8.05%

Segment breakdown: Not applicable; NWFL reports consolidated results only .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per shareQ4 2024$0.30 (Q3 2024) $0.31 Raised
Investment portfolio repositioning (AFS)Q4 2024 and forwardNot providedReposition <½ of AFS, moving ~2% avg rate into ~5% reinvestment; expect improved future yields; one-time loss recognized Strategic update
CapitalQ4 2024Not providedPublic offering of 1,000,000 shares at $26.00; gross proceeds ~$26–$30M including over-allotment; supports capital ratios Raised capital
Revenue, margins (forward), OpEx, OI&E, tax rateQ4 2024Not providedNot providedMaintained (no formal guidance)

Earnings Call Themes & Trends

Note: No Q4 2024 earnings call transcript was found; themes reflect management press releases and filings .

TopicPrevious Mentions (Q-2)Previous Mentions (Q-1)Current Period (Q4)Trend
Net interest margin trajectoryNIM stable at 2.79% in Q2; deposit costs up; margin pressure noted NIM improved to 2.99% (+19 bps Q/Q); fte asset yields up; liabilities cost up NIM at 3.04%; continued expansion; higher net interest income Improving
Deposit costsRising deposit and borrowing costs weighed on NIM Cost of interest-bearing liabilities up; margin up modestly Full-year NIM down due to higher deposit costs; improvement late in year Mixed but easing
Loan growthLinked-quarter annualized 4.9% in Q2 8% annualized in Q3 9% annualized in Q4 Strengthening
Credit qualityStrong credit metrics; NPLs low Credit metrics remained strong NPLs 0.46%; ACL/loans 1.16%; net charge-offs modest Stable
Capital/AOCIWell-capitalized; AOCI pressure persisted Capital base above well-capitalized; mark-to-market impact lessened 42% Y/Y Equity offering; TCE per share higher; AOCI improved Strengthening
Portfolio repositioning——One-time $19.962M loss recognized; reinvest at ~5% vs ~2% Near-term pain, long-term accretive
Dividend——Raised to $0.31; Q4 payment date corrected to Feb 3, 2025 Raised

Management Commentary

  • “During the fourth quarter, we successfully completed a capital raise that enabled us to reposition our investment portfolio for improved yields… While we incurred a one-time $20 million loss… we believe the portfolio is better positioned… Excluding this loss, we performed well… higher net interest income year-over-year… we believe the Company is financially stronger and better protected from changes in interest rates” — Jim Donnelly, CEO .
  • “We plan to reposition less than half of our bond portfolio… at an average rate of ~2%. We believe that we can reinvest those funds at ~5%, more than twice the current rate…” — Shareholder Letter .
  • Q3 context: “Net interest margin (fte) for this quarter eclipsed the margin for last year… Our capital base remains above ‘Well-Capitalized’ targets… credit quality metrics remained strong…” — CEO .

Q&A Highlights

  • No Q4 2024 earnings call transcript was available; management commentary came via press release and filings .
  • Dividend timing clarification issued via 8-K/press release (payment date correction to Feb 3, 2025) .

Estimates Context

  • S&P Global consensus estimates (EPS and revenue) for Q4 2024 were unavailable at the time of retrieval due to provider limitations; as a result, a comparison to Wall Street consensus could not be included. Values from S&P Global were not retrievable for this report.

Key Takeaways for Investors

  • The Q4 GAAP loss is non-recurring and tied to a deliberate portfolio repositioning; adjusted earnings and expanding NIM indicate improving core profitability heading into 2025 .
  • Equity capital raise strengthens balance sheet and supports reinvestment at materially higher yields (~5% vs ~2%), a tailwind for future net interest income as the repositioning settles .
  • NIM momentum (3.04% in Q4) and loan growth (9% annualized) are positive catalysts; watch for continued easing in deposit costs to sustain margin expansion .
  • Credit quality remains solid (NPLs 0.46%; ACL/loans 1.16%), limiting credit cost headwinds; net charge-offs stayed modest .
  • Dividend increase to $0.31 underscores confidence in normalized earnings power post-repositioning; payment date confirmed for Feb 3, 2025 .
  • Near-term risks include residual volatility in noninterest income from securities activity and operating expense pressure; full-year OpEx rose in 2024 .
  • Dilution from the share issuance is a trade-off for portfolio optimization and capital strength; shares outstanding increased, and equity rose to $213.5M .