Northway Financial, Inc. Announces Third Quarter Earnings

NORTH CONWAY, N.H., Oct. 27, 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 September 30, 2023, of $1.6 million, or $0.58 per basic common share. Year-to-date, the Company reported net income of $4.7 million, or $1.71 per basic common share.

President and CEO William J. Woodward commented: “We continue to operate in very uncertain times as the frequency of interest rate increases by the Federal Reserve has caused disruption for consumers, businesses, and the banking infrastructure. We continue to be cautious in our lending and aggressive in defending our core deposit base. Actions taken in prior periods are paying off as Year-to-Date Net Interest and Dividend Income is holding steady despite the pressure on our cost of funding. We are maintaining elevated levels of cash balances as a precaution against further industry turmoil. The credit quality of our loan portfolio continues to perform at or better than peers and we are optimistic that this advantage will continue.”

Financial Highlights

• Total assets were $1.4 billion. Net loans were $956 million, and total deposits were $1.05 billion at September 30, 2023.
• Total loan portfolio increased $34 million or 3.6% compared to September 30, 2022.
• Residential mortgage loan balances increased $21 million, or 6%, compared to September 30, 2022.
• Total deposits decreased $6 million compared to September 30, 2022; however, deposits sourced through wholesale channels increased $92 million.
• Total time deposits, excluding broker deposits, increased $18 million or 30% when compared to September 30, 2022.
• Total borrowings increased $66 million to $139 million when compared to September 30, 2022.
• Year-to-Date Net Income was $4.7 million or $5.9 million higher than September 30, 2022, which reflects the impact of a $5.6 million change in market value of the Bank’s Marketable Equity Securities Portfolio.
• As of September 30, 2023, the balance of the Marketable Equity Securities portfolio was $3.4 million which was $18 million lower than September 30, 2022, due to the sale of securities.
• Net Interest and Dividend Income before Provision for Loan Losses was $26.3 million which was unchanged from September 30, 2022.
• The Year-to-Date Net Interest Margin was 2.67% or .25% lower than the same period in 2022: the result of an increase in the yield on earning assets of .72% offset by an increase in the cost of interest-bearing liabilities of 1.24%.
• Nonperforming loans as a percentage of total loans stood at 0.31% compared to 0.21% at September 30, 2022.
• The Bank’s regulatory capital ratios at September 30, 2023, exceeded all well-capitalized ratios as defined under FDIC’s prompt corrective action rules.
• The market price of our common stock, as of October 26, 2023, was $16.95.

Northway Financial, Inc.
Selected Financial Highlights
(Unaudited)
(Dollars in thousands, except per share data)	Three Months Ended								Nine Months Ended
	9/30/2023				9/30/2022				9/30/2023				9/30/2022
Interest and Dividend Income	$	13,372			$	10,302			$	38,260			$	28,338
Interest Expense		4,572				1,015				12,002				2,070
Net Interest and Dividend Income		8,800				9,287				26,258				26,268
Provision for Loan Losses		-				750				-				1,050
All Other Noninterest Income		1,036				908				3,535				2,338
Noninterest Expense		7,720				7,957				24,030				24,183
Net Income Before Gain (Loss) on Securities		2,116				1,488				5,763				3,373
Gain (Loss) on Securities Available-for-Sale, net		-				-				-				-
Gain (Loss) on Marketable Equity Securities		(199	)			(1,805	)			(309	)			(5,645	)
Income (Loss) before Income Tax Expense (Benefit)		1,917				(317	)			5,454				(2,272	)
Income Tax Expense (Benefit)		305				(304	)			744				(1,028	)
Net Income (Loss)	$	1,612			$	(13	)		$	4,710			$	(1,244	)
Net Income (Loss) Available to Common Stockholders	$	1,612			$	(13	)		$	4,710			$	(1,244	)
Earnings per Common Share, Basic	$	0.58			$	-			$	1.71			$	(0.45	)

		9/30/2023				12/31/2022				9/30/2022
Balance Sheet
Total Assets		$	1,357,654			$	1,302,602			$	1,318,922
Cash and Due from Banks and Interest-Bearing Deposits			74,139				26,520				22,548
Securities Available-for-Sale, at Fair Value			261,502				288,576				292,149
Marketable Equity Securities, at Fair Value			3,405				10,586				21,799
Loans Held-for-Sale			-				208				-
Loans, Net			956,053				918,170				922,587
Total Liabilities			1,299,301				1,238,166				1,260,084
Non Municipal Non-Maturity Deposits			763,784				817,305				844,776
Municipal Non-Maturity Deposits			138,674				125,257				131,201
Certificates of Deposit			143,868				119,079				76,331
Securities Sold Under Agreements to Repurchase			68,728				78,793				92,258
Short-Term Borrowings			28,600				55,000				73,000
Long-Term Borrowings			110,000				-				-
Junior Subordinated Debentures			20,620				20,620				20,620
Stockholders' Equity			58,353				64,436				58,838
Profitability and Efficiency
Net Interest Margin			2.67	%			2.90	%			2.92	%
Yield on Earning Assets			3.86				3.24				3.14
Cost of Interest Bearing Liabilities			1.54				0.46				0.30
Book Value Per Share of Common Shares Outstanding		$	21.21			$	23.42			$	21.38
Tangible Book Value Per Share of Common Shares Outstanding			17.42				19.63				17.58
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			8.23	%			8.15	%			8.31	%
Common Equity Risk-Based Capital			13.91				13.47				12.56
Tier 1 Risk-Based Capital			13.91				13.47				12.56
Total Risk-Based Capital			15.16				14.72				13.81

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