Company: NWFL
Filing Date: 2025-09-19
Form Type: S-4
Source: 0001193125-25-208580
Chunk: 117

Company: NORWOOD FINANCIAL CORP
Filing Date: 2025-09-19
Form: S-4
Chunk 117
---
 entire proxy statement/prospectus, including the merger agreement attached as Annex A,
for a more complete understanding of the merger.

General

The merger agreement provides for the merger of PB Bankshares with and into Norwood, with Norwood as the surviving entity. Immediately
following the merger, Presence Bank will merge with and into Wayne Bank, with Wayne Bank as the surviving entity.

Background of the Merger

Presence Bank a community-oriented bank offering a variety of financial products and services to meet the needs of its
customers. As part of its ongoing consideration of the long-term prospects and strategies of PB Bankshares and Presence Bank, their boards have regularly considered various strategic alternatives, including opportunities for organic growth and
potential acquisitions and merger transactions. They have considered strategic options potentially available to PB Bankshares and Presence Bank, with the goal of enhancing and focusing on value for their shareholders, as well as Presence
Bank’s interest in serving its customers and community, and providing for its employees.

The PB Bankshares board believes that PB
Bankshares needs to continue to grow to reach the scale necessary to operate efficiently and absorb increased costs of operating PB Bankshares in order to become more profitable. Like many community banks, Presence Bank has incurred increasing costs
in complying with new banking laws, regulations and policies, in addition to changes in technology that affect the way customers conduct banking business, as well as the difficulty of operating in a sustained low interest rate environment. A future
economic downturn would make PB Bankshares’s continued growth more difficult to achieve.

The PB Bankshares board of directors has
regularly reviewed and discussed Presence Bank’s strategy, performance and prospects in the context of the national and local economic environment, developments in the regulation of financial institutions and the competitive landscape. During
the course of developing its strategic plan, the PB Bankshares board of directors and senior management team regularly consider various strategies for creating additional shareholder value, including, but not limited to, growth through the expansion
of its customer base in existing markets, growth through acquisitions of banks or business lines in existing or other markets and growth through sale to another financial institution with similar cultural values to PB Bankshares’ employees,
customers and community.

Janak M. Amin, the President and Chief Executive Officer of PB Bankshares and Presence Bank, has had, from time
to time, informal discussions with representatives of other financial institutions exploring topics of

74

mutual interest to the banking industry. Many of those representatives are long-time colleagues of Mr. Amin, acquired over the course of his