Company: NWFL
Filing Date: 2025-09-19
Form Type: S-4
Source: 0001193125-25-208580
Chunk: 157

Company: NORWOOD FINANCIAL CORP
Filing Date: 2025-09-19
Form: S-4
Chunk 157
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 shares of Norwood common stock deemed received as described below) will be the same as the aggregate tax basis of the PB Bankshares common stock for which it is exchanged, decreased by the amount of cash received in the merger (other than cash     
 received in lieu of a fractional share of Norwood common stock), and increased by the amount of gain recognized on the exchange (other than with respect to cash received in lieu of a fractional share in Norwood common stock) (regardless of whether 
 such gain is classified as capital gain or as dividend income, as discussed below under “— Potential Recharacterization of Gain as a Dividend”); and                                                                                                    |

| • |     | the holding period of Norwood common stock received in exchange for shares of PB Bankshares common stock                                                                              
 (including fractional shares of Norwood common stock deemed received as described below) will include the holding period of the PB Bankshares common stock for which it is exchanged. |

If a U.S. holder acquired different blocks of PB Bankshares common stock at different times or at different prices, any gain or loss will generally be determined separately with respect to each block of PB Bankshares common stock, and the cash and shares of Norwood common stock received will be allocated pro rata to each such block of stock. A loss realized on the exchange of one block of shares cannot be used to offset a gain realized on the exchange of another block of shares, but a U.S. holder will be able to reduce its recognized capital gains by recognized capital losses in determining its income tax liability. Each U.S. holder should consult its own tax advisor with regard to identifying the basis or holding periods of the particular shares of Norwood common stock received in the merger. Taxation of Gain.Except as described under “— Potential Recharacterization of Gain as a Dividend” below, gain that a U.S. holder recognizes in connection with the merger generally will constitute capital gain and will constitute long-term capital gain if such U.S. holder has held (or is treated as having held) its PB Bankshares common stock for more than one year as of the date of the merger. 101

For a non-corporate U.S. holder, the maximum U.S.
federal income tax rate on long-term capital gains generally is 20%.

Potential Recharacterization of Gain as Dividend.All
or part of the gain that a particular U.S. holder recognizes could be treated as having the effect of the distribution of dividend to such U.S. holder under the