Northway Financial, Inc. Announces 2023 Earnings and Declares Semi-Annual Dividend
January 26, 2024 at 08:00 am EST
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NORTH CONWAY, N.H., Jan. 26, 2024 (GLOBE NEWSWIRE) -- Northway Financial, Inc. (the “Company”) (OTCQB: NWYF), the parent company of Northway Bank (the “Bank”), today reported net income for the year ended December 31, 2023 of $5.8 million, or $2.10 per basic common share, compared to $2.7 million, or $0.97 per basic common share for the year ended December 31, 2022.
The Board of Directors declared a semi-annual cash dividend of $0.35 per common share, payable on February 12, 2024, to common stockholders of record on February 5, 2024.
President and CEO William J. Woodward commented: “This past year was a difficult year for us as we dealt with the Federal Reserve’s interest rate hikes, which started in March 2022 and continued into 2023. These 11 rate increases significantly impacted our deposit and loan balances. We experienced a loss of deposits as customers used funds deposited with us to pay for the increases in food and energy as a result of inflation. We also lost some deposits, as competitors were offering high-rate CDs, which we were not willing to match. Loan production was down substantially from prior years as higher rates kept many borrowers on the sidelines and caused us to be highly selective in granting new loans. The instability in the economy negatively impacted our customers, our communities, and our Bank. We have taken actions like selling securities at a loss to improve future earnings without significantly impacting current capital. As we move into 2024, we are still operating under an uncertain economic environment. We will continue to seek opportunities to enhance profitability and increase shareholder value.”
Financial Highlights
Year-to-Date Net Income increased $3 million from December 31, 2022.
Net Income was negatively impacted by a $1.8 million loss from the sale of fixed income securities.
The Year-to-Date Net Interest Margin decreased from 2.90% to 2.63% as funding costs increased 1.17% while the yield on earning assets increased .66%, when compared to year-to-date December 2022.
Total assets were $1.3 billion, loans, net, were $910 million, and total deposits were $996 million at December 31, 2023.
The loan portfolio contracted $18 million, or 2%, compared to December 31, 2022.
Residential mortgage loan balances decreased $5 million and commercial real estate loan balances decreased $12 million.
Securities available-for-sale decreased $42 million primarily due to the sale of $30 million of fixed income securities.
To reduce earnings volatility, Marketable Equity Securities were reduced by $8 million during the year.
Stockholders’ Equity increased $9 million compared to December 31, 2022, the result of an increase in Net Income and an increase in the market value of the securities available-for-sale.
Nonperforming loans as a percentage of total loans stood at 0.31% compared to 0.23% at December 31, 2022.
Total delinquent loans as a percentage of total loans were 0.34% compared to 0.88% at December 31, 2022.
The Bank’s regulatory capital ratios at December 31, 2023 exceeded all well-capitalized ratios as defined under FDIC’s prompt corrective action rules.
The market price of our common stock, as of January 25, 2024, was $18.70.
Northway Financial, Inc.
Selected Financial Highlights
(Unaudited)
(Dollars in thousands, except per share data)
Three Months Ended
Year Ended
12/31/2023
12/31/2022
12/31/2023
12/31/2022
Interest and Dividend Income
$
13,317
$
11,579
$
51,577
$
39,917
Interest Expense
5,038
2,237
17,040
4,307
Net Interest and Dividend Income
8,279
9,342
34,537
35,610
Provision for Loan Losses
(405
)
750
(405
)
1,800
All Other Noninterest Income
1,436
1,324
4,971
3,662
Noninterest Expense
7,532
7,837
31,562
32,020
Net Income Before Gain (Loss) on Securities
2,588
2,079
8,351
5,452
Loss on Securities Available-for-Sale, net
(1,871
)
-
(1,871
)
-
Gain (Loss) on Marketable Equity Securities
194
2,937
(115
)
(2,708
)
Income before Income Tax Expense (Benefit)
911
5,016
6,365
2,744
Income Tax Expense (Benefit)
(150
)
1,097
594
69
Net Income
$
1,061
$
3,919
$
5,771
$
2,675
Net Income Available to Common Stockholders
$
1,061
$
3,919
$
5,771
$
2,675
Earnings per Common Share, Basic
$
0.39
$
1.42
$
2.10
$
0.97
12/31/2023
12/31/2022
Balance Sheet
Total Assets
$
1,290,467
$
1,302,602
Cash and Due from Banks and Interest-Bearing Deposits
68,887
26,520
Securities Available-for-Sale, at Fair Value
246,756
288,576
Marketable Equity Securities, at Fair Value
2,589
10,586
Loans Held-for-Sale
-
208
Loans, Net
909,781
918,170
Total Liabilities
1,217,230
1,238,166
Non Municipal Non-Maturity Deposits
734,741
817,305
Municipal Non-Maturity Deposits
133,100
125,257
Certificates of Deposit
127,726
119,079
Securities Sold Under Agreements to Repurchase
55,353
78,793
Short-Term Borrowings
15,000
55,000
Long-Term Borrowings
110,000
-
Junior Subordinated Debentures
20,620
20,620
Stockholders' Equity
73,237
64,436
Profitability and Efficiency
Net Interest Margin
2.63
%
2.90
%
Yield on Earning Assets
3.90
3.24
Cost of Interest Bearing Liabilities
1.63
0.46
Book Value Per Share of Common Shares Outstanding
$
26.62
$
23.42
Tangible Book Value Per Share of Common Shares Outstanding
22.83
19.63
Common Shares Outstanding
2,751,650
2,751,650
Weighted Average Number of Common Shares, Basic
2,751,650
2,751,650
Capital Ratios for the Bank
Tier 1 Core Capital to Average Assets
8.33
%
8.15
%
Common Equity Risk-Based Capital
14.44
13.47
Tier 1 Risk-Based Capital
14.44
13.47
Total Risk-Based Capital
15.70
14.72
About Northway Financial, Inc.
Northway Financial, Inc., headquartered in North Conway, New Hampshire, is a bank holding company. Through its subsidiary bank, Northway Bank, the Company offers a broad range of financial products and services to individuals, businesses, and the public sector from its 17 banking offices and its loan production offices located in Bedford and Portsmouth, New Hampshire.
Forward-looking Statements
Statements included in this press release that are not historical or current fact are “forward-looking statements” made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995 and are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. Northway Financial, Inc. disclaims any obligation to subsequently revise any forward-looking statements to reflect events or circumstances after the date of such statements, or to reflect the occurrence of anticipated or unanticipated events or circumstances.
Contact:
Gary Laurash
Chief Financial Officer
603-326-7377
Northway Financial, Inc. is a bank holding company for Northway Bank (the Bank). The Bank is engaged principally in the business of attracting deposits from the general public and investing those deposits in securities, commercial loans, real estate loans and consumer loans. It has six segments. Residential segment offers first lien mortgages and home equity loans. Construction segment offers residential construction and commercial real estate construction loans. Commercial segment offers loans, which are secured primarily by income-producing investor-owned or owner-occupied business properties. Commercial segment offers loans, which are made to businesses and are generally secured by assets of the business. Consumer segment offers automobile and aircraft loans, and repayment is dependent on the credit quality of the individual borrower. Municipal segment offers loans, which are generally unsecured, and repayment is dependent on the tax assessments of the local municipalities.
NORTHWAY FINANCIAL, INC. 
