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1. Company Snapshot

1.a. Company Description

Norwood Financial Corp.operates as the bank holding company for Wayne Bank that provides various banking products and services.The company accepts a range of deposit products, including interest-bearing and non-interest bearing transaction accounts, and statement savings and money market accounts, as well as certificate of deposits.


It also provides various loans, such as commercial loans comprising lines of credit, revolving credit, term loans, mortgages, secured lending products, and letter of credit facilities; municipal finance lending; construction loans for commercial construction projects and single-family residences; land loans; consumer loans; mortgage lending to finance principal residences and second home dwellings; and indirect dealer financing of new and used automobiles, boats, and recreational vehicles.In addition, the company offers investment securities services; trust and investment products; and cash management, direct deposit, remote deposit capture, mobile deposit capture, mobile payment, automated clearing house activity, real estate settlement, and Internet and mobile banking services.Further, it engages in the annuity and mutual fund sale, and discount brokerage activities, as well as insurance agency business.


The company serves consumers, businesses, nonprofit organizations, and municipalities.It operates fourteen offices in Northeastern Pennsylvania; and sixteen offices in Delaware, Sullivan, Ontario, Otsego, and Yates Counties, New York, as well as thirty-one automated teller machines.Norwood Financial Corp.


was founded in 1870 and is headquartered in Honesdale, Pennsylvania.

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1.b. Last Insights on NWFL

Norwood Financial Corp.'s recent performance was driven by robust earnings growth, fueled by a 25% year-over-year surge in net interest income. The company's healthy loan book and modest increase in non-performing commercial real estate loans contributed to this growth. A recent acquisition of PB Bankshares expanded Norwood's Pennsylvania footprint, creating potential value. Additionally, a $0.31 per share cash dividend, a $0.01 increase from Q3 2024, was declared. CION, PFS, and NWFL were listed as Zacks Rank #1 (Strong Buy) income stocks.

1.c. Company Highlights

2. Norwood Financial's Q3 2025 Earnings: A Strong Performance

Norwood Financial reported a robust financial performance in Q3 2025, with a significant increase in net interest income of $1.4 million driven by a 20-basis-point rise in net interest margin. The company's earnings per share (EPS) came in at $0.94, beating analyst estimates of $0.68. The strong EPS was accompanied by growing assets, which have surpassed $100 million year-to-date, and expanding margins. Revenue growth is expected to continue, with analysts estimating a 28.7% increase in revenues for the next year.

Publication Date: Oct -27

📋 Highlights
  • Net Interest Income Growth:: Increased by $1.4 million driven by a 20-basis-point rise in net interest margin.
  • Credit Loss Allowance Release:: $502,000 released under the CECL model, reflecting strong credit metrics.
  • Asset Growth & Margins:: Assets exceeded $100 million year-to-date with expanding profit margins.
  • Merger-Related Charges:: Incurred $568,000 in merger charges amid pending Presence Bank acquisition.
  • Noninterest Income Expansion:: 9% increase in noninterest income for 9 months ended September 30.

Key Drivers of Performance

The company's yield benefited from the repositioning of its bond portfolio in December 2024, and fee income also grew year-over-year as Norwood Financial focused on its wealth management, trust, and other fee income businesses. According to John McCaffery, CFO, the company's deposit cost reduction strategy has been effective, with a beta on the way down of around 50%, indicating room for further improvement. The company's net interest margin (NIM) outlook remains positive, with a goal of reaching 4% in the next few quarters.

Valuation and Outlook

Norwood Financial's current valuation metrics indicate a relatively attractive dividend yield of 4.64%. The Price-to-Tangible Book Value (P/TBV) is not directly available, but the Price-to-Book Ratio (P/B) stands at 1.01, suggesting that the stock is trading close to its book value. Given the expected revenue growth and the company's strategic initiatives, including its merger with Presence Bank, the current valuation appears reasonable. As Jim Donnelly, CEO, expressed confidence in the completion of the merger, investors can expect continued growth and expansion.

Mergers and Acquisitions Strategy

The company's M&A strategy is opportunistic, with a focus on strategic opportunities to drive growth. The pending merger with Presence Bank is awaiting regulatory approval, but management is confident in its smooth completion. This deal is expected to contribute to the company's continued expansion and growth.

3. NewsRoom

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New Strong Buy Stocks for Nov. 28: MODG, NWFL, and More

Nov -28

Source: zacks.com

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Best Income Stocks to Buy for Nov. 28

Nov -28

Source: zacks.com

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Norwood Financial Corp. (NWFL) Q3 2025 Earnings Call Transcript

Oct -22

Source: seekingalpha.com

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Norwood Financial Corp Announces Timing of Third Quarter 2025 Earnings Release and Conference Call

Oct -10

Source: globenewswire.com

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Lewis J. Critelli to Retire as Chairmen of the Board of Norwood Financial Corp; Dr. Andrew A. Forte Appointed Chairman of the Board; Dr. Marissa Nacinovich and James Shook Appointed to the Board

Sep -17

Source: globenewswire.com

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Norwood Financial Corp Announces Cash Dividend

Sep -17

Source: globenewswire.com

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Norwood Financial: Upgrading To A 'Buy' On Results And M&A

Sep -03

Source: seekingalpha.com

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Best Income Stocks to Buy for August 20th

Aug -20

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.50%)

6. Segments

Banking and Related Activities

Expected Growth: 4.5%

The growth of Norwood Financial Corp's Banking and Related Activities segment is driven by increasing demand for traditional banking services, a growing customer base, and strategic expansion into new markets.

7. Detailed Products

Commercial Loans

Norwood Financial Corp. offers commercial loans to businesses of all sizes, providing financing for various business purposes such as expansion, equipment purchases, and working capital.

Mortgage Loans

Norwood Financial Corp. offers mortgage loans to individuals and families, providing financing for purchasing or refinancing a home.

Consumer Loans

Norwood Financial Corp. offers consumer loans for personal expenses, debt consolidation, and other financial needs.

Deposit Accounts

Norwood Financial Corp. offers a range of deposit accounts, including checking, savings, and certificates of deposit (CDs), providing customers with a safe and secure way to manage their finances.

Wealth Management

Norwood Financial Corp.'s wealth management services provide investment advice, portfolio management, and retirement planning to individuals and businesses.

Insurance Services

Norwood Financial Corp. offers a range of insurance products, including life insurance, disability insurance, and long-term care insurance, to protect customers and their loved ones.

8. Norwood Financial Corp.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Norwood Financial Corp. operates in a niche market with limited substitutes, reducing the threat of substitutes.

Bargaining Power Of Customers

Norwood Financial Corp. has a diverse customer base, reducing the bargaining power of individual customers.

Bargaining Power Of Suppliers

Norwood Financial Corp. relies on a few key suppliers, giving them some bargaining power.

Threat Of New Entrants

Norwood Financial Corp. operates in a highly regulated industry, making it difficult for new entrants to join the market.

Intensity Of Rivalry

Norwood Financial Corp. operates in a highly competitive market with many established players, increasing the intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 52.36%
Debt Cost 4.64%
Equity Weight 47.64%
Equity Cost 7.10%
WACC 5.81%
Leverage 109.89%

11. Quality Control: Norwood Financial Corp. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

28.79$

Current Price

28.79$

Potential

-0.00%

Expected Cash-Flows