Company: NWFL
Filing Date: 2025-10-28
Form Type: 424B3
Source: 0001193125-25-252482
Chunk: 242

Company: NORWOOD FINANCIAL CORP
Filing Date: 2025-10-28
Form: 424B3
Chunk 242
---
 regulatory capital. Management believes as of June 30, 2025, the Bank met all capital adequacy requirements to which it was subject. Prompt corrective action regulations provide five classifications; well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At June 30, 2025, the most recent regulatory notification categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the Bank’s category. The capital conservation buffer is designed to absorb losses during periods of economic stress. Banking institutions with a ratio of Common Equity Tier 1 capital, Tier 1 Capital or Total Capital to risk-weighted assets above the minimum but below the conservation buffer will face limitations on dividends, stock repurchases and certain discretionary bonus payments to management based on the amount of the shortfall. Under the Basel III rules, banks must hold a capital conservation buffer above the adequately capitalized risk-based capital ratios. The required capital conservation buffer is 2.50%. On January 1, 2023, the Company adopted ASC 326. Regulatory capital rules permitted the Bank to phase-in the day-one effects of adopting ASC 326 over a three-year transition period. The Bank elected to take the phase-in for the amount of $140,000. The following tables present actual and required capital ratios as of June 30, 2025 and December 31, 2024 under the Basel III Capital Rules. Bank capital levels required to be considered well capitalized are based upon prompt corrective action regulations. Actual and required capital amounts (in thousands) and ratios of the Bank are presented below at quarter-end.

| June 30, 2025                            |     | Actual |        |     |       |       |   |     | For Capital       
 Adequacy Purposes |        |     |       |      |   |     | For Capital         
 Adequacy Purposes   
 with Capital Buffer |        |     |       |       |   |     | To be Well        
 Capitalized under 
 Prompt Corrective 
 Action Provisions |        |     |       |       |   |
|:-----------------------------------------|:----|:-------|-------:|:----|:------|------:|: