Northway Financial, Inc. Announces First Quarter Earnings

NORTH CONWAY, N.H., April 28, 2023 (GLOBE NEWSWIRE) -- Northway Financial, Inc. (the “Company”) (OTCQB: NWYF), the parent company of Northway Bank (the “Bank”), today reported net income for the quarter ended March 31, 2023, of $1.4 million, or $0.50 per basic common share.

President and CEO William J. Woodward commented: “In the first quarter, net income increased $1.5 million compared to last year as loan growth fueled an increase in net interest income. The Federal Reserve increased rates by 400 basis points from March of 2022 to March of 2023. This unprecedented increase in rates affected everyone and we know that many of our customers have been significantly impacted. The failure of Silicon Valley Bank and Signature Bank caused a temporary concern by customers regarding the safety of their deposits. We took the opportunity to communicate with our customers regarding the many ways they can secure their deposits. We are fortunate to have a very loyal customer base, which is not something we take for granted. The efforts we took were very much appreciated by our customers. We are looking forward to our 2023 annual meeting of shareholders, which is expected to be held on May 25, 2023. In accordance with the Company’s bylaws, any shareholder proposals must be received by the Company no later than May 13, 2023. We look forward to connecting with our shareholders in person at the meeting.”

Financial Highlights

• Total assets were $1.4 billion. Net loans were $938 million, and total deposits were $1 billion at March 31, 2023.
• Residential mortgage loan balances increased $81 million, or 30%, compared to March 31, 2022.
• Commercial real estate loans increased $35 million, or 9%, compared to March 31, 2022.
• Total deposits were unchanged from March 31, 2022; however, $30 million of deposits at March 31, 2023 were considered brokered time deposits, of which there were none at March 31, 2022.
• Total borrowings increased $159 million when compared to March 31, 2022. $50 million of the borrowings are currently held in Cash earning interest to deal with any potential market volatility.
• Year-to-Date Net Income was $1.4 million or $1.5 million higher than March 31, 2022.
• Year-to-Date Net Interest and Dividend Income was $9.1 million or 10% greater than March 31, 2022.
• During the previous 12 months, $20 million of the equity portfolio was liquidated which reduced its effect on Net Income by $1 million via a lower loss on Marketable Equity Securities when compared to March 31, 2022.
• The rapid rise in interest rates since March 2022 resulted in a decline in the market value of securities classified as Available for Sale, which reduced Total Capital by $19 million from the same period last year. This adjustment does not affect regulatory capital.
• Nonperforming loans as a percentage of total loans stood at 0.24% compared to 0.27% at March 31, 2022.
• The Bank’s regulatory capital ratios at March 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 April 27, 2023, was $18.25.

Northway Financial, Inc.
Selected Financial Highlights
(Unaudited)
(Dollars in thousands, except per share data)	Three Months Ended
	3/31/2023				3/31/2022
Interest and Dividend Income	$	11,948			$	8,711
Interest Expense		2,885				454
Net Interest and Dividend Income		9,063				8,257
Provision for Loan Losses		-				-
All Other Noninterest Income		1,246				799
Noninterest Expense		8,474				8,201
Net Income Before Gain (Loss) on Securities		1,835				855
Gain (Loss) on Securities Available-for-Sale, net		-				-
Loss on Marketable Equity Securities		(250	)			(1,184	)
Income (Loss) before Income Tax Expense (Benefit)		1,585				(329	)
Income Tax Expense (Benefit)		210				(198	)
Net Income (Loss)	$	1,375			$	(131	)
Net Income (Loss) Available to Common Stockholders	$	1,375			$	(131	)
Earnings per Common Share, Basic	$	0.50			$	(0.05	)

		3/31/2023			12/31/2022			3/31/2022
Balance Sheet
Total Assets		$	1,369,822		$	1,302,602		$	1,226,571
Cash and Due from Banks and Interest-Bearing Deposits			76,306			26,520			55,241
Securities Available-for-Sale, at Fair Value			290,511			288,576			286,389
Marketable Equity Securities, at Fair Value			5,467			10,586			25,306
Loans Held-for-Sale			690			208			-
Loans, Net			938,470			918,170			815,177
Total Liabilities			1,300,726			1,238,166			1,141,038
Non Municipal Non-Maturity Deposits			773,702			817,305			825,633
Municipal Non-Maturity Deposits			127,777			125,257			114,844
Certificates of Deposit			111,716			119,079			75,759
Securities Sold Under Agreements to Repurchase			50,609			78,793			87,874
Short-Term Borrowings			95,500			55,000			-
Long-Term Borrowings			100,000			-			-
Junior Subordinated Debentures			20,620			20,620			20,620
Stockholders' Equity			69,096			64,436			85,533
Profitability and Efficiency
Net Interest Margin			2.87	%		2.90	%		2.83	%
Yield on Earning Assets			3.76			3.24			2.99
Cost of Interest Bearing Liabilities			1.17			0.46			0.20
Book Value Per Share of Common Shares Outstanding		$	25.11		$	23.42		$	31.08
Tangible Book Value Per Share of Common Shares Outstanding			21.33			19.63			27.27
Common Shares Outstanding			2,751,650			2,751,650			2,751,650
Weighted Average Number of Common Shares, Basic			2,751,650			2,751,650			2,751,650
Capital Ratios for the Bank
Tier 1 Core Capital to Average Assets			8.36	%		8.15	%		8.86	%
Common Equity Risk-Based Capital			13.51			13.47			13.88
Tier 1 Risk-Based Capital			13.51			13.47			13.88
Total Risk-Based Capital			14.76			14.72			15.11

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 full-service 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.