Company: NWFL
Filing Date: 2025-10-28
Form Type: 424B3
Source: 0001193125-25-252482
Chunk: 84

Company: NORWOOD FINANCIAL CORP
Filing Date: 2025-10-28
Form: 424B3
Chunk 84
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119.7 million for 2023 was due to using brokered deposits to increase liquidity. The average
balance of interest-bearing transaction accounts increased $1.2 million to $162.9 million for 2024 from $161.6 million for 2023. The increase in the average balance of our transaction accounts primarily reflected management efforts to
grow the lower cost deposits.

Interest expense on Federal Home Loan Bank borrowings decreased $22,000, or 1.2%, to $1.8 million for
the year ended December 31, 2024 as compared to the year ended December 31, 2023. The decrease in interest expense on Federal Home Loan Bank borrowings was caused by a decrease of $2.0 million in our average balance of
Federal Home Loan Bank borrowings to $49.0 million for 2024 compared to $51.0 million for 2023 as a result of maturing Federal Home Loan Bank borrowings not being replaced in 2024, partially offset by the average cost of these funds
increasing 15 basis points from 3.49% in 2023 to 3.64% in 2024 due to the higher interest rate environment for most of 2024.

Net Interest Income. Net interest income decreased $1.0 million, or 8.4%, to $11.1 million for the year ended December 31, 2024 from $12.1 million for the year ended December 31, 2023. The
decrease in net interest income from 2023 to 2024 was primarily due to the increase in interest expense on deposits, partially offset by the increases in interest income on loans, cash and cash equivalents and investment securities. Our net interest
margin decreased 53 basis points to 2.54% for 2024 from 3.07% for 2023. Our net interest rate spread decreased 68 basis points to 2.03% for 2024 from 2.71% for 2023. Average net interest-earning assets increased by $2.5 million to
$66.1 million for 2024 from $63.6 million for 2023.

Provision for Credit Losses. We charge
provisions for credit losses to operations in order to maintain our allowance for credit losses on loans and reserve for unfunded commitments at a level that is considered reasonable and necessary to absorb expected credit losses inherent in the
loan portfolio and expected losses