Company: NWFL
Filing Date: 2025-09-19
Form Type: S-4
Source: 0001193125-25-208580
Chunk: 94

Company: NORWOOD FINANCIAL CORP
Filing Date: 2025-09-19
Form: S-4
Chunk 94
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 the composition, characteristics and quality of our loan portfolios, as well as the prevailing economic conditions and forecasts utilized. Material changes to these and other
relevant factors may result in greater volatility to the allowance for credit losses, and therefore, greater volatility to our reported earnings.

Although we believe that we use the best information available to establish the allowance for credit losses, future adjustments to the
allowance may be necessary if economic conditions differ substantially from the assumptions used in making the evaluation. In addition, the FDIC and the PADOB, as an integral part of their examination process, periodically review our allowance for
credit losses, and as a result of such reviews, we may have to adjust our allowance for credit losses. However, regulatory agencies are not directly involved in establishing the allowance for credit losses as the process is our responsibility and
any increase or decrease in the allowance is the responsibility of management. A large loss could deplete the allowance and require increased provisions to replenish the allowance, which would adversely affect earnings.

Comparison of Financial Condition at June 30, 2025 and December 31, 2024

Total assets. Total assets increased $12.8 million to $464.1 million at June 30, 2025 from
$451.3 million at December 31, 2024. The increase in assets was primarily due to increases in cash and cash equivalents and net loans receivable, partially offset by a decrease in debt securities available-for-sale. Growth in total assets was funded by the increase in deposits while growth in loans and cash and cash equivalents were primarily the result of maturities of short-term treasury securities
that were not reinvested in additional securities and instead used to enhance commercial loan growth and our cash position. Cash and cash equivalents increased $18.1 million to $55.9 million at June 30, 2025 from $37.8 million at
December 31, 2024. Gross loans increased $8.7 million, or 2.5%, to $358.4 million at June 30, 2025 from $349.8 million at December 31, 2024, primarily due to growth in the commercial real estate loan portfolio and one-to four-family residential real estate portfolio. Debt securities available-for-sale decreased $14.7 million to
$35.6 million at June 30, 2025 from $50.3 million at December 31, 2024, primarily due to the maturity of short-term treasury securities.

Net loans