Norwood Financial (NWFL) AI Stock Analysis

• Market Cap: $234.85M
• Dividend Yield: 4.89%
• Average Volume (3M): 14.45K
• Price to Earnings (P/E): 290.5
• Beta (1Y): 0.83
• Revenue Growth: -3.66%
• EPS Growth: -95.41%
• Country: US
• Employees: 264
• Sector: Financial
• Sector Strength: 73
• Industry: Banks - Regional
• EPS (TTM): 0.63
• Shares Outstanding: 9,260,522
• 10 Day Avg. Volume: 14,473
• 30 Day Avg. Volume: 14,452
• PEG Ratio: 4.69
• Price to Book (P/B): 1.77
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 14.48
• Enterprise Value/Market Cap: 1.48
• Enterprise Value/Revenue: 0.83
• Enterprise Value/Gross Profit: 6.94
• Enterprise Value/Ebitda: 6.01
• 1Y Price Target: $25.25
• Price Target Upside: -0.43% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 2

• Rating: 55 Neutral
• Price Target: $26.00 ▲(2.52%Upside)

Norwood Financial's overall score is influenced significantly by its stable financial structure and effective cash flow management. However, the high P/E ratio raises concerns about overvaluation, which, along with neutral technical indicators, suggests potential caution for investors. The absence of recent earnings guidance and notable corporate events leaves the financial performance and valuation as the primary drivers of the current stock assessment.

Positive Factors

Capital Management

NWFL recently raised ~$30M in a follow-on offering to reposition a portion of its low yielding AFS portfolio into higher yielding securities, expected to enhance profitability metrics and EPS levels for 2025 and beyond.

Dividend and Yield

The company has a strong dividend history and current ~5.0% dividend yield, which is seen as sustainable despite lower profitability metrics vs. peers.

Growth Potential

NWFL operates an extensive 29-branch network in some of the better growth markets in northern PA and southern NY, indicating potential for loan growth.

Management Strategy

The bank is well positioned in the current environment, poised for margin EPS and profitability improvement on the back of a balance sheet restructuring, normalizing yield curve, and a relatively new pro-growth management team.

Negative Factors

Financial Performance

The forecasted ROA of 1.05% in 2026 is below peers, which contributes to the Equal-Weight rating and $25.50 price target.

Norwood Financial Business Overview & Revenue Model

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.

How the Company Makes Money

Norwood Financial Corp. generates revenue primarily through its subsidiary, Wayne Bank, which earns money from interest income, fees, and service charges. The bank's primary source of income is interest accrued from loans, including commercial, residential, and consumer loans, which are offered to various customers. Additionally, Wayne Bank generates non-interest income through fees associated with account maintenance, overdrafts, and transaction services, as well as wealth management services. The company's earnings are also influenced by its investment portfolio, comprising securities and other financial instruments that yield interest income. Norwood Financial benefits from its regional presence and relationships with local businesses and individuals, which contribute to its stable deposit base and loan demand.

Norwood Financial Financial Statement Overview

Summary

Norwood Financial demonstrates operational efficiency with strong margins but faces challenges in sustaining profitability due to recent negative net income. The balance sheet is stable with manageable leverage, yet return inconsistencies may warrant attention. Cash flow is managed effectively, providing liquidity, although growth is uneven.

Income Statement

Gross profit margin and EBIT margin are strong, indicating efficient operations. However, a recent negative net income highlights profitability challenges. Revenue growth has been volatile with notable fluctuations, suggesting potential instability in income generation.

Balance Sheet

The company maintains a moderate debt-to-equity ratio, reflecting balanced leverage. The equity ratio is healthy, indicating a stable financial structure. However, return on equity has been inconsistent, suggesting variable returns for shareholders.

Cash Flow

Operating cash flow remains positive, supporting liquidity. Free cash flow growth has been mixed, but the company has managed to sustain a positive free cash flow to net income ratio. Cash flow management appears generally robust despite some fluctuations.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
101.43M	103.53M	85.53M	73.64M	58.26M
	Gross Profit
48.37M	64.64M	77.43M	69.47M	58.26M
	EBIT
9.59M	29.37M	36.38M	30.86M	20.41M
	EBITDA
1.12M	22.61M	37.96M	32.46M	19.80M
	Net Income Common Stockholders
-160.00K	16.76M	29.23M	24.91M	15.08M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
425.41M	66.12M	450.79M	613.46M	338.28M
	Total Assets
2.32B	2.20B	2.05B	2.07B	1.85B
	Total Debt
158.53M	114.24M	82.26M	90.82M	105.76M
	Net Debt
86.19M	48.12M	50.40M	-115.86M	-5.93M
	Total Liabilities
2.10B	2.02B	1.88B	1.86B	1.66B
	Stockholders Equity
213.51M	181.07M	167.09M	205.26M	194.78M
Cash Flow		Free Cash Flow
19.68M	28.41M	28.58M	27.94M	13.05M
	Operating Cash Flow
22.81M	29.82M	30.73M	29.20M	13.80M
	Investing Cash Flow
-115.20M	-116.57M	-207.99M	-130.96M	-61.36M
	Financing Cash Flow
98.62M	121.00M	2.44M	196.75M	143.84M

Norwood Financial Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 25.36
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NWFL, the sentiment is Negative. The current price of 25.36 is below the 20-day moving average (MA) of 25.89, above the 50-day MA of 24.94, and below the 200-day MA of 26.28, indicating a neutral trend. The MACD of 0.10 indicates Positive momentum. The RSI at 46.33 is Neutral, neither overbought nor oversold. The STOCH value of 27.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NWFL.

Norwood Financial Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JMSB	73 Outperform	$243.87M	13.74	7.25%	1.46%	25.96%	484.74%
PKBK	72 Outperform	$227.39M	7.98	9.81%	3.75%	9.76%	24.43%
OVLY	72 Outperform	$216.01M	8.69	13.99%	2.33%	0.40%	-10.62%
Sector *	64 Neutral	$12.77B	9.71	7.85%	78.05%	12.07%	-7.97%
NWFL	55 Neutral	$234.85M	290.49	0.59%	4.89%	-3.66%	-95.41%
FFNW	55 Neutral	$208.18M	194.65	0.66%	2.30%	2.28%	-83.17%
MVBF	52 Neutral	$264.44M	13.96	6.38%	3.34%	-8.32%	-22.46%

Norwood Financial Corporate Events

Norwood Financial Holds 2025 Annual Stockholders Meeting

Norwood Financial Corp held its 2025 Annual Meeting of Stockholders on April 22, 2025, where it presented its financial performance and strategic initiatives. The company reported a decrease in adjusted net income for 2024 due to a one-time loss from investment portfolio repositioning, but noted improvements in tangible common equity and capital strength. The company’s capital raise and portfolio adjustments are expected to enhance future yields, and it continues to demonstrate financial stability with increased assets and loans. The meeting also highlighted leadership changes and employee recognitions, underscoring the company’s commitment to growth and operational excellence.