Northway Financial, Inc. Announces First Quarter Earnings

NORTH CONWAY, N.H., April 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 quarter ended March 31, 2024 of $1.5 million, or $0.55 per basic common share, compared to $1.4 million, or $0.50 per basic common share for the quarter ended March 31, 2023.President and CEO William J. Woodward commented: “In the first quarter, net income was consistent compared to last year. The high-rate environment continues to put downward pressure on our net interest margin. We are focusing on offsetting the margin compression by continuing to reduce operating costs without impacting customer service. Our non-municipal deposits are tracking well with our December 2023 levels. We are in the process of introducing new deposit products to further increase deposits. There is uncertainty regarding when the Federal Reserve will lower rates. We know that the inflationary environment impacts almost everyone.”

*Financial Highlights*

· Total Assets were $1.2 billion, loans, net, were $909 million, and total deposits were $978 million at March 31, 2024.
· Total Assets decreased $126 million compared to March 31, 2023, driven by decreases in Cash and Due from Banks and Interest-Bearing Deposits of $39 million, Securities Available-for-Sale of $52 million, and Loans, net of $30 million.
· The decrease in Cash and Due from Banks and Interest-Bearing Deposits was due to the paydown of borrowings while the decrease in securities was primarily due to the $30 million in securities sales in December 2023.
· Residential mortgage loan balances decreased $13 million and commercial real estate loan balances decreased $18 million, compared to March 31, 2023.
· Non-Municipal Liabilities decreased $54 million or 6% compared to March 31, 2023, the result of a decrease in Retail Deposits of $31 million, or 5%, and a decrease in Commercial Liabilities of $12 million, or 9%.
· Compared to December 31, 2023, Non-Municipal Liabilities increased $12 million.
· Short Term Borrowings and Long-Term Debt decreased $85 million compared to March 31, 2023.
· Net Income for the quarter ending March 31, 2024, was $1.5 million or $0.55 per basic common share.
· Net Interest Income was $826 thousand lower than the same period last year and was partially offset by lower operating expenses of $388 thousand.
· The Year-to-Date Net Interest Margin decreased from 2.87% to 2.70% as funding costs increased 1.17% while the yield on earning assets increased 0.66%, when compared to year-to-date March 31, 2023.
· Nonperforming loans as a percentage of total loans stood at 0.36% compared to 0.24% at March 31, 2023.
· Total delinquent loans as a percentage of total loans were 0.31% compared to 0.28% at March 31, 2023.
· The Bank’s regulatory capital ratios at March 31, 2024 exceeded all well-capitalized ratios as defined under FDIC’s prompt corrective action rules.
· The market price of our common stock, as of April 25, 2024, was $18.25.

Northway Financial, Inc.
Selected Financial Highlights
(Unaudited)         (Dollars in thousands, except per share data) Three Months Ended     3/31/2024   3/31/2023                   Interest and Dividend Income $ 12,588   $ 11,948     Interest Expense   4,351     2,885     Net Interest and Dividend Income   8,237     9,063     Provision for Credit Losses   -     -     All Other Noninterest Income   1,257     1,246     Noninterest Expense   8,086     8,474     Net Income Before Gain (Loss) on Securities   1,408     1,835     Gain (Loss) on Securities Available-for-Sale, Net   -     -     Gain (Loss) on Marketable Equity Securities   277     (250 )   Income before Income Tax Expense   1,685     1,585     Income Tax Expense   173     210     Net Income $ 1,512   $ 1,375     Net Income Available to Common Stockholders $ 1,512   $ 1,375     Earnings per Common Share, Basic $ 0.55   $ 0.50            
  3/31/2024   12/31/2023   3/31/2023          
*Balance Sheet*          
Total Assets $ 1,244,319   $ 1,290,467   $ 1,369,822  
Cash and Due from Banks and Interest-Bearing Deposits   37,075     68,887     76,306  
Securities Available-for-Sale, at Fair Value   238,806     246,756     290,511  
Marketable Equity Securities, at Fair Value   2,867     2,589     5,467  
Loans Held-for-Sale   716     -     690  
Loans, Net   908,614     909,781     938,470  
Total Liabilities   1,173,293     1,217,230     1,300,726  
Non Municipal Non-Maturity Deposits   727,635     734,741     773,702  
Municipal Non-Maturity Deposits   120,516     133,100     127,777  
Certificates of Deposit   129,157     127,726     111,716  
Securities Sold Under Agreements to Repurchase   45,680     55,353     50,609  
Short-Term Borrowings   50,000     65,000     145,500  
Long-Term Debt   60,000     60,000     50,000  
Junior Subordinated Debentures   20,620     20,620     20,620  
Stockholders' Equity   71,026     73,237     69,096  
*Profitability and Efficiency*          
Net Interest Margin   2.70 %   2.63 %   2.87 %
Yield on Earning Assets   4.09     3.90     3.76  
Cost of Interest Bearing Liabilities   1.80     1.63     1.17  
Book Value Per Share of Common Shares Outstanding $ 25.81   $ 26.62   $ 25.11  
Tangible Book Value Per Share of Common Shares Outstanding   22.03     22.83     21.33  
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   8.98 %   8.30 %   8.36 %
Common Equity Risk-Based Capital   14.83     14.40     13.51  
Tier 1 Risk-Based Capital   14.83     14.40     13.51  
Total Risk-Based Capital   16.08     15.65     14.76                    

*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: Contact:
Gary Laurash
Chief Financial Officer
603-326-7377