Full Transcript: Norwood Financial Q2 2026 Earnings Call

Norwood Financial (NASDAQ: NWFL ) released second-quarter financial results and hosted an earnings call on Wednesday. Read the complete transcript below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

View the webcast at Summary Norwood Financial Corp. 9%. The successful integration of Presence Bank has been completed, contributing to improved financial performance and operational synergies. A customer loan of $22 million filed for Chapter 11 bankruptcy, resulting in a net charge-off of $700,000, but the situation is being actively managed.

Strategic initiatives include enhancing operating efficiency and customer experience through AI, and strengthening the leadership team with key promotions. The company has recovered the shareholder dilution from the acquisition of Presence Bancshares, improving tangible book value ahead of schedule. Future outlook remains positive with continued focus on disciplined execution, potential for further acquisitions, and maintaining a competitive edge in lending and deposit markets. Full Transcript OPERATOR Good day and thank you for standing by.

Welcome to the Norwood Financial Corp. second quarter 2026 earnings conference call. At this time all participants are in a listen-only mode. After the speakers' presentation there will be a question-and-answer session.

To ask a question during this session you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Mackenzie Jackson, Corporate Secretary. Ma'am, please go ahead. Mackenzie Jackson, Corporate Secretary Thank you, Michelle. Good morning everyone, and welcome to our second quarter 2026 earnings conference call.

With me today are Jim Donnelly, our President and CEO, and John McCaffrey, our CFO. The press release we issued earlier this morning together with the presentation material that accompanies our remarks are available on the Investor Relations section of our webpage. Comments made by any participant on today's call may include forward-looking statements. These statements are subject to various risks and uncertainties and other factors that are difficult to predict.

Actual results may differ materially from those expressed or implied and we assume no obligation to update any forward-looking information. Please refer to our most recent Form 10-K and other subsequent reports filed with the SEC for more information about risks related to forward-looking statements. During our discussion we may refer to certain non-GAAP financial measures. These measures are useful for analysts, investors and management to evaluate ongoing performance.

A reconciliation of these measures to GAAP financial results is provided in our presentation. I will now turn the call over to Jim. Jim Donnelly, President and CEO Thank you, Mackenzie, and good morning everyone. I'm pleased to report that the entire Norwood team performed well in the second quarter, continuing our strong performance as we build momentum and deliver another quarter of improving financial results.

8 million, an increase of 41% compared with last year and another record for us as we continue to elevate our performance. Organic growth plus Presence Bank's acquisition contributed to the increase. 9%, an increase of 47 basis points compared with last year. Net income and earnings per share also increased, improving 48% and 25% respectively on an adjusted basis, with higher adjusted returns on average assets and tangible equity.

By nearly every metric it was a great quarter as we continue to benefit from our repositioned portfolio, favorable interest rate movement, strong team performance and the acquisition. As we disclosed last month, June 18, one of our customers' loans totaling 22 million filed Chapter 11 bankruptcy. We have been involved in the process, engaging in discussions with all parties to achieve an agreeable outcome. Based on the process as it stands and anticipated result, we have recorded a net charge-off of $700,000.

I believe this is an acceptable outcome given the total exposure. The bankruptcy process is ongoing and we are continuing to monitor its progress to understand the impact on us. I am proud of the team that has been leading this process for us, ensuring that the outcome is in the best interest of the bank and our shareholders. Next, I'd like to review our 2026 strategic priorities.

This priority is to successfully complete the Presence Bank integration. I am pleased to report that we have completed all of our planned integration activities. The integration team has done a great job leading us through this process, going above and beyond to achieve these milestones in addition to their normal daily responsibilities. The experience we have gained from this integration will serve us well as we continue to explore and pursue acquisitions in the future.

We have combined our systems to drive common operating practices across the organization. With the completion of our core integration, we have completed the rollout and convergence of our brand across all entities and branches. While the integration is complete, we continue to engage in open conversations across all locations and functions to identify and adopt best-in-class practices and policies that will enable us to better serve our communities while improving our results. I'm excited about this activity and looking forward to how the combined organizations will continue to drive operational excellence well beyond the integratio