Company: NWFL
Filing Date: 2025-10-28
Form Type: 424B3
Source: 0001193125-25-252482
Chunk: 206

Company: NORWOOD FINANCIAL CORP
Filing Date: 2025-10-28
Form: 424B3
Chunk 206
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 are reported as a
separate component of the equity section of the consolidated balance sheet, such items, along with net income, are components of comprehensive income.

Segment Reporting

The Company’s financial
results are considered to be aggregated into one reportable operating segment with revenue derived from the business of community banking. Through its community banking segment, the Company offers a full range of products and services through
various delivery channels. The banking products and services include the acceptance of deposits in noninterest-bearing demand deposits, interest-bearing demand deposits, savings deposits, money market deposits and certificate of deposits; the
origination and servicing of real

F-13

PB BANKSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

estate one-to four-family residential, real estate commercial, real estate construction, commercial and industrial and consumer and other loans; and other services including wire transfers. The
community banking segment derives revenues mainly from interest income on loans to customers, investment securities held and fees and income related to the services listed above.

The accounting policies of the community banking segment are the same as those described in the summary of significant accounting policies. The
Company’s President and Chief Executive Officer and Chief Financial Officer are the Chief Operating Decision Makers (CODMs). The CODMs are responsible for the day-to-day management of the company, including regularly reviewing the operating
and financial performance of the Company on a consolidated basis.

The primary measure of financial performance is consolidated net income which is used to
assess performance and make decisions about resource allocation. Net income is used to monitor budget versus actual results as well as comparing prior year’s results. The comparative analysis along with the monitoring of budget versus actual
results are used in assessing the performance of the segment. The presentation of financial performance to the CODMs is consistent with amounts and financial statement lines shown in the Company’s consolidated balance sheets and consolidated
statements of income. The Company’s significant expenses are segmented by category and amount in the consolidated statements of income to include all significant items including salaries and employee benefits, occupancy and equipment, data and
item processing, advertising and marketing, professional fees, Directors’ fees, FDIC insurance premiums, Pennsylvania shares tax, debit card expense and other general operating expenses.

Recent Accounting Pronouncements

This section provides a
summary description of recent Accounting Standards Updates (ASUs) issued by the Financial Accounting Standards Board (FASB) to the Accounting Standards Codification (ASC) that had or that management expects may have an impact on the consolidated
financial