Northway Financial, Inc. Announces Third Quarter Earnings

Rhea-AI Summary

Northway Financial reported Q3 2024 net income of $1.2 million ($0.45 per share), down from $1.6 million ($0.58 per share) in Q3 2023. For the nine months ended September 30, 2024, net income was $3.6 million ($1.31 per share), compared to $4.7 million ($1.71 per share) in 2023. The company reduced wholesale funding by $122 million and announced a pending merger with Camden National , expected to complete in Q1 2025. Total assets were $1.2 billion, with loans at $900 million and deposits at $1 billion. Non-municipal deposits increased by $18 million, while net interest margin decreased from 2.67% to 2.59%.

Positive

• Wholesale funding reduced by $122 million (49%) year-over-year
• Non-Municipal Deposits increased by $18 million compared to September 2023
• Total Equity increased by $21 million (37%) year-over-year
• Bank's regulatory capital ratios exceed well-capitalized requirements

Negative

• Q3 2024 net income decreased to $1.2M from $1.6M in Q3 2023
• Nine-month net income declined to $3.6M from $4.7M year-over-year
• Net Interest Income decreased by $2.9M compared to previous year
• Net Interest Margin decreased from 2.67% to 2.59%
• Total Assets decreased by $137M (10%) year-over-year
• Loans decreased by $55M compared to September 2023

NORTH CONWAY, N.H., Nov. 01, 2024 (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 September 30, 2024 of $1.2 million, or $0.45 per basic common share, compared to $1.6 million, or $0.58 per basic common share for the quarter ended September 30, 2023. For the nine months ended September 30, 2024, the Company reported net income of $3.6 million, or $1.31 per basic common share, compared to $4.7 million, or $1.71 per basic common share for the same period in 2023.

President and CEO William J. Woodward commented: “During the third quarter we continued to reduce our reliance on wholesale funding by putting a focus on retaining deposits and limiting our lending. Wholesale funding decreased by $122 million, significantly reducing our reliance on wholesale funding. The third quarter was marked by the announcement of our pending merger with Camden National Corporation. The closing date of the merger is still to be determined but we anticipate the merger to be completed in the first quarter of 2025. We will be holding a special shareholder meeting to approve the merger agreement. The details of the merger and the shareholder meeting will be sent to all shareholders in the coming weeks. Please look out for the information and return your proxy card as soon as possible. The Board of Directors have unanimously approved the merger, and your support, as always, is greatly appreciated.”

Financial Highlights

• Total Assets were $1.2 billion, Loans, Net, were $900 million, and Total Deposits were $1 billion at September 30, 2024.
• Total Assets decreased $137 million, or 10%, compared to September 30, 2023, driven by decreases in Loans, Net of $55 million, Cash and Due from Banks and Interest-Bearing Deposits of $51 million and Securities Available-for-Sale at Fair Value of $20 million.
• The decrease in Loans, Net was led by a decrease in Commercial Real Estate loans of $25 million, Residential Real Estate loans of $22 million, and Consumer Loans of $6 million, compared to September 30, 2023.
• Non-Municipal Deposits (excluding brokered deposits) increased $18 million compared to September 30, 2023 led by an increase in Retail Deposits of $21 million or 4%.
• The increase in Retail Deposits was led by an increase in Time Deposits of $69 million offset by a decrease in Non-Maturity Deposits of $48 million.
• Non-Municipal Deposits (excluding brokered deposits) increased $18 million, or 6%, compared to December 31, 2023.
• Wholesale Funding, which includes brokered deposits and borrowings, decreased $122 million, or 49%, compared to September 30, 2023, and $82 million, or 39%, compared to December 31, 2023.
• Total Equity increased $21 million, or 37%, compared to September 30, 2023, primarily from an increase in the market value of Securities Available-for-Sale at Fair Value.
• Net Income for the nine-month period ending September 30, 2024, was $3.6 million, or $1.31, per basic common share.
• Year-to-date Net Interest Income was $2.9 million lower than the same period last year driven by an increase in interest expense of $2.2 million.
• The year-to-date Net Interest Margin decreased from 2.67% to 2.59% as funding costs increased .44% while the yield on earning assets increased 0.25%, compared to year-to-date September 30, 2023.
• Nonperforming loans as a percentage of total loans stood at 0.41% compared to 0.31% at September 30, 2023.
• Total delinquent loans as a percentage of total loans were 0.06% compared to 0.02% at September 30, 2023.
• The Bank’s regulatory capital ratios at September 30, 2024 exceeded all well-capitalized ratios as defined under FDIC’s prompt corrective action rules.
• The market price of our common stock, as of October 31, 2024, was $32.35.

Northway Financial, Inc.
Selected Financial Highlights
(Unaudited)
(Dollars in thousands, except per share data)	Three Months Ended							Nine Months Ended
	9/30/2024			9/30/2023				9/30/2024			9/30/2023
Interest and Dividend Income	$	12,772		$	13,372			$	37,576		$	38,260
Interest Expense		5,046			4,572				14,223			12,002
Net Interest and Dividend Income		7,726			8,800				23,353			26,258
Provision for Credit Losses		-			-				-			-
All Other Noninterest Income		1,445			1,036				3,819			3,535
Noninterest Expense		8,041			7,720				23,837			24,030
Net Income Before Gain (Loss) on Securities		1,130			2,116				3,335			5,763
Gain (Loss) on Securities Available-for-Sale, Net		-			-				-			-
(Loss) Gain on Marketable Equity Securities		249			(199	)			515			(309	)
Income before Income Tax (Benefit) Expense		1,379			1,917				3,850			5,454
Income Tax (Benefit) Expense		133			305				233			744
Net Income	$	1,246		$	1,612			$	3,617		$	4,710
Net Income Available to Common Stockholders	$	1,246		$	1,612			$	3,617		$	4,710
Earnings per Common Share, Basic	$	0.45		$	0.58			$	1.31		$	1.71

		9/30/2024			12/31/2023			9/30/2023
Balance Sheet
Total Assets		$	1,221,077		$	1,290,467		$	1,357,654
Cash and Due from Banks and Interest-Bearing Deposits			22,584			68,887			74,139
Securities Available-for-Sale, at Fair Value			241,224			246,756			261,502
Marketable Equity Securities, at Fair Value			3,104			2,589			3,405
Loans Held-for-Sale			1,555			-			-
Loans, Net			900,517			909,781			956,053
Total Liabilities			1,141,363			1,217,230			1,299,301
Non Municipal Non-Maturity Deposits			712,708			734,741			763,784
Municipal Non-Maturity Deposits			113,959			133,100			138,674
Certificates of Deposit			183,576			127,726			143,868
Securities Sold Under Agreements to Repurchase			49,722			55,353			68,728
Short-Term Borrowings			-			65,000			78,600
Long-Term Debt			45,000			60,000			60,000
Junior Subordinated Debentures			20,620			20,620			20,620
Stockholders' Equity			79,714			73,237			58,353
Profitability and Efficiency
Net Interest Margin			2.59	%		2.63	%		2.67	%
Yield on Earning Assets			4.11			3.90			3.86
Cost of Interest Bearing Liabilities			1.98			1.63			1.54
Book Value Per Share of Common Shares Outstanding		$	28.97		$	26.62		$	21.21
Tangible Book Value Per Share of Common Shares Outstanding			25.18			22.83			17.42
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			9.09	%		8.30	%		8.23	%
Common Equity Risk-Based Capital			15.27			14.40			13.91
Tier 1 Risk-Based Capital			15.27			14.40			13.91
Total Risk-Based Capital			16.52			15.65			15.16

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 16 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.

No Offer or Solicitation

This communication is not a proxy statement or solicitation or a proxy, consent or authorization with respect to any securities or in respect of the pending merger of Camden National Corporation (“Camden National”) and the Company (the “Merger”) and shall not constitute an offer to sell or a solicitation of an offer to buy the securities of Camden National, the Company or the combined company, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be deemed to be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended, and otherwise in accordance with applicable law.

Additional Information and Where to Find It

In connection with the Merger, Camden National has filed a registration statement on Form S-4 with the SEC, which also includes a proxy statement of Northway and a prospectus of Camden National, and Camden National will file other documents regarding the proposed transaction with the SEC. A definitive proxy statement/prospectus will also be sent to Northway stockholders seeking the required stockholder approval of the proposed transaction. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS AND SECURITY HOLDERS OF NORTHWAY ARE URGED TO CAREFULLY READ THE ENTIRE REGISTRATION STATEMENT AND PROXY STATEMENT/PROSPECTUS, WHEN THEY BECOME AVAILABLE, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The documents filed by Camden National with the SEC may be obtained free of charge at the SEC’s website at www.sec.gov. In addition, the documents filed by Camden National may be obtained free of charge under the “Investor Relations” section of Camden National’s website at http://www.camdennational.bank. Alternatively, these documents, when available, can be obtained free of charge from Camden National upon written request to Camden National Corporation, Attn: Corporate Secretary, 2 Elm Street, Camden, Maine 04843.

Participants in Solicitation

Camden National, Northway, and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction under the rules of the U.S. Securities and Exchange Commission (the “SEC”). Information regarding Camden National’s directors and executive officers is available in its definitive proxy statement, which was filed with the SEC on April 5, 2024, and certain other documents filed by Camden National with the SEC. Other information regarding the participants in the solicitation of proxies in respect of the proposed transaction and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC. Free copies of these documents, when available, may be obtained as described in the preceding paragraph.

FAQ

What was Northway Financial's (NWYF) Q3 2024 earnings per share?

Northway Financial reported earnings of $0.45 per basic common share for Q3 2024.

When is Northway Financial's (NWYF) merger with Camden National expected to complete?

The merger is anticipated to complete in the first quarter of 2025, pending shareholder approval.

How much did Northway Financial (NWYF) reduce its wholesale funding in Q3 2024?

Northway Financial reduced its wholesale funding by $122 million, representing a 49% decrease compared to September 30, 2023.

What was Northway Financial's (NWYF) net interest margin for the first nine months of 2024?

Northway Financial's net interest margin was 2.59% for the nine months ended September 30, 2024.