Company: NWFL
Filing Date: 2025-10-28
Form Type: 424B3
Source: 0001193125-25-252482
Chunk: 115

Company: NORWOOD FINANCIAL CORP
Filing Date: 2025-10-28
Form: 424B3
Chunk 115
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 or raise interest rates on deposits to attract new deposits, which may
result in higher levels of interest expense.

Contractual obligations. In the ordinary course of our operations, we
enter into certain contractual obligations. Such obligations include data processing services, operating leases for equipment, agreements with respect to borrowed funds and deposit liabilities.

Impact of Inflation and Changing Prices

The financial statements and related data presented herein have been prepared in accordance with generally accepted accounting principles in
the United States of America, which require the measurement of financial position and operating results in terms of historical dollars without considering changes in the relative purchasing power of money over time due to inflation. The primary
impact of inflation on our operations is reflected in increased operating costs. Unlike most industrial companies, virtually all of the assets and liabilities of a financial institution are monetary in nature. As a result, interest rates generally
have a more significant impact on a financial institution’s performance than does inflation. Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services. Higher
inflation and its impacts, nationally or in the markets that the Company serves could adversely affect, among other things, real estate valuations, unemployment levels, the ability of businesses to remain viable, and consumer and business
confidence, which could lead to decreases in demand for loans and deposits and increases in loan delinquencies and defaults.

For the three months
ended June 30, 2025, we reported net income of $640,000 compared to net income of $370,000 for the three months ended June 30, 2024. The period over period increase in earnings of $270,000 was attributable to increases in
net interest income and noninterest income, partially offset by increases in noninterest expense, provision for credit losses and income tax expense.

For the six months ended June 30, 2025, we reported net income of $1.1 million compared to net income of $687,000 for
the six months ended June 30, 2024. The period over period increase in earnings of $426,000 was attributable to increases in net interest income and noninterest income, partially offset by increases in noninterest expense,
provision for credit losses and income tax expense.

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PROPOSAL NO. 1 – APPROVAL OF THE MERGER AND THE MERGER AGREEMENT

PB Bankshares is asking its shareholders to approve the merger agreement and the merger. PB Bankshares stockholders should
read this proxy statement/prospect