Norwood Financial announces results
HONESDALE, PA — Norwood Financial Corp. and its subsidiary Wayne Bank have announced earnings for the three months ended December 31, 2017 of $157,000 compared to $2,346,000 earned in the corresponding period of 2016. The decrease in earnings is due to the $3,060,000 of non-recurring additional tax expense attributable to the revaluation of the company’s net deferred tax asset as a result of the Tax Cuts and Jobs Act (the “Act”). The company’s core operating results (which excludes the non-recurring tax expense related to the revaluation of the deferred tax asset) for the three-month period improved $871,000 to $3,217,000. For the year ended December 31, 2017, net income totaled $8,198,000, an increase of $1,487,000 from the $6,711,000 earned in the prior year. For the year of 2017, the company’s core operating results increased $4,547,000 to $11,258,000.
Among other things, the Act reduces the corporate tax rate from a maximum of 35% to a flat 21% rate effective January 1, 2018. Prior to December 22, 2017, the company had a net deferred tax asset totaling $7.6 million, based on the pre-Act federal tax rate of 35%. As a result of the reduction in the corporate income tax rate to 21%, the company revalued its net deferred tax asset as of December 31, 2017. Beginning in 2018, the company’s earnings are expected to benefit from the lower corporate income tax rate.