Company: NWFL
Filing Date: 2025-10-28
Form Type: 424B3
Source: 0001193125-25-252482
Chunk: 238

Company: NORWOOD FINANCIAL CORP
Filing Date: 2025-10-28
Form: 424B3
Chunk 238
---
 were modified during the three or six months ended June 30, 2025 and 2024 to borrowers experiencing financial difficulty. The Company closely monitors the performance of modified loans to understand the effectiveness of its modification efforts. Upon the determination that all or a portion of a modified loan is uncollectible, that amount is charged against the allowance for credit losses. There were no payment defaults during the three or six months ended June 30, 2025 and 2024 of modified loans. At June 30, 2025 and December 31, 2024, there was no other real estate owned. There was no real estate in process of foreclosure as of June 30, 2025 and December 31, 2024. F-58

5. Leases Lease liabilities represent the Company’s obligation to make lease payments and are presented at each reporting date as the net present value of the remaining contractual cash flows. Cash flows are discounted at the Company’s incremental borrowing rate in effect at the commencement date of the lease. Right-of-use assets represent the Company’s right to use the underlying asset for the lease term and are calculated as the sum of the lease liability and if applicable prepaid rent, initial direct costs and any incentives received from the lessor. The Company’s long-term lease agreements are classified as operating leases. Certain of these leases offer the option to extend the lease term and the Company has included such extensions in its calculation of the lease liabilities to the extent the options are reasonably certain of being exercised. The lease agreements do not provide for residual value guarantees and have no restrictions or covenants that would impact dividends or require incurring additional financial obligations. The following tables present information about the Company’s leases as of June 30, 2025 and December 31, 2024, and for the three and six months ended June 30, 2025 and 2024 (dollars in thousands):

|                                       |     | 2025 | June 30, |       |     | 2024 | December 31, |       |
|:--------------------------------------|:----|:-----|---------:|:------|:----|:-----|-------------:|:------|
| Right-of-use assets                   |     | $    |    1,582 |       |     | $    |        1,567 |       |
| Lease liabilities                     |     | $    |    1,560 |       |     | $    |        1,536 |       |