NORWOOD FINANCIAL CORP Debt Disclosure
Short-term borrowings at December 31 consist of the following:
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| 2024 |
| 2023 | ||
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Securities sold under agreements to repurchase | $ | 36,337 |
| $ | 54,076 |
Federal Home Loan Bank short-term borrowings |
| 76,732 |
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| 20,000 |
| $ | 113,069 |
| $ | 74,076 |
The outstanding balances and related information of short-term borrowings are summarized as follows:
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| Years Ended December 31, |
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| 2024 |
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| 2023 |
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| (Dollars In Thousands) | ||||||
Average balance during the year | $ | 54,867 |
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| $ | 93,455 |
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Average interest rate during the year |
| 2.48 | % |
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| 3.26 | % |
Maximum month-end balance during the year | $ | 113,069 |
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| $ | 136,408 |
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Total short-term borrowings at end of the year | $ | 113,069 |
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| $ | 74,076 |
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Weighted average interest rate at the end of the year |
| 3.79 | % |
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| 3.14 | % |
Securities sold under agreements to repurchase generally mature within one day to one year from the transaction date. Securities with an amortized cost and fair value of $44,021,000 and $36,561,000 at December 31, 2024 and $63,542,000 and $55,056,000 at December 31, 2023, respectively, were pledged as collateral for these agreements. The securities underlying the agreements were under the Company’s control.
The collateral pledged for repurchase agreements that are classified as secured borrowings is summarized as follows (in thousands):
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| As of December 31, 2024 | |||||||||||||
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| Remaining Contractual Maturity of the Agreements | |||||||||||||
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| Overnight and continuous |
| Up to 30 days |
| 30-90 days |
| Greater than 90 days |
| Total | |||||
Repurchase Agreements: |
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U.S. Government agencies |
| $ | 1,997 |
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| $ |
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| $ |
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| $ | 1,997 |
Mortgage-backed securities - government sponsored entities |
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| 34,564 |
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| — |
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| — |
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| — |
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| 34,564 |
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| $ | 36,561 |
| $ | — |
| $ | — |
| $ | — |
| $ | 36,561 |
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Total liability recognized for repurchase agreements |
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| $ | 36,337 |
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| As of December 31, 2023 |
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| Remaining Contractual Maturity of the Agreements | |||||||||||||
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| Overnight and continuous |
| Up to 30 days |
| 30-90 days |
| Greater than 90 days |
| Total | |||||
Repurchase Agreements: |
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Mortgage-backed securities - government sponsored entities |
| $ | 55,056 |
| $ | — |
| $ | — |
| $ | — |
| $ | 55,056 |
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Total liability recognized for repurchase agreements |
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| $ | 54,076 |
The Company has a line of credit commitment available from the FHLB of Pittsburgh for borrowings of up to $150,000,000, which renews annually in June. At December 31, 2024, there was $26,732,000 of borrowings outstanding on this line. There was $20,000,000 of borrowings outstanding on this line of credit at December 31, 2023. The Company has a line of credit commitment available from Atlantic Community Bankers Bank for $7,000,000, which expires on June 30, 2025. There were no borrowings under this line of credit at December 31, 2024 and 2023. The Company has a line of credit commitment available from PNC Bank for $10,000,000 at December 31, 2024. There were no borrowings under this line of credit at December 31, 2024 and December 31, 2023.
Other borrowings consisted of the following at December 31, 2024 and 2023:
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| 2024 |
| 2023 | ||
| (In Thousands) | ||||
Notes with the FHLB: |
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Fixed rate borrowing due April 2025 at 4.26% | $ | 20,000 |
| $ | 20,000 |
Amortizing fixed rate borrowing due September 2025 at 5.67% |
| 1,941 |
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| 4,406 |
Fixed rate borrowing due April 2026 at 4.04% |
| 20,000 |
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| 20,000 |
Amortizing fixed rate borrowing due May 2027 at 4.37% |
| 18,751 |
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| 25,950 |
Amortizing fixed rate borrowing due July 2028 at 4.70% |
| 11,101 |
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| 13,880 |
Fixed rate borrowing due July 2028 at 4.49% |
| 10,000 |
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| 10,000 |
| $ | 81,793 |
| $ | 94,236 |
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Notes with the Federal Reserve Bank: |
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Fixed rate borrowing due March 2024 at 4.83% | $ | - |
| $ | 10,000 |
Fixed rate borrowing due September 2024 at 5.55% |
| - |
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| 20,000 |
Fixed rate borrowing due January 2025 at 4.76% |
| 20,000 |
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| - |
| $ | 20,000 |
| $ | 30,000 |
Contractual maturities and scheduled cash flows of other borrowings at December 31, 2024 are as follows (in thousands):
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2025 | $ | 52,658 |
2026 |
| 31,203 |
2027 |
| 5,996 |
2028 |
| 11,936 |
2029 |
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| $ | 101,793 |
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The Bank’s maximum borrowing capacity with the FHLB was $654,838,000 of which $158,525,000 was outstanding in the form of advances and $146,975,000 was outstanding in the form of letters of credit at December 31, 2024. Advances from the FHLB are secured by qualifying assets of the Bank. The total available credit from the Federal Reserve Bank was $25,000,000, of which $20,000,000 was outstanding.
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.