Company: NWFL
Filing Date: 2025-10-28
Form Type: 424B3
Source: 0001193125-25-252482
Chunk: 201

Company: NORWOOD FINANCIAL CORP
Filing Date: 2025-10-28
Form: 424B3
Chunk 201
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 concerning expectations of future

F-9

PB BANKSHARES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS economic conditions. This evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available. These qualitative risk factors may include, but are not limited to:

| 1. | Lending policies and procedures, including underwriting standards and collection, charge-off, and recovery 
 practices.                                                                                                 |

| 2. | National, regional, and local economic and business conditions as well as the condition of various market 
 segments, including the value of underlying collateral for collateral dependent loans.                    |

| 3. | Nature and volume of the portfolio and terms of loans. |

| 4. | Volume and severity of past due, classified and nonaccrual loans as well as other loan modifications. |

| 5. | Existence and effect of any concentrations of credit and changes in the level of such concentrations. |

| 6. | Effect of external factors, such as competition and legal and regulatory requirements. |

| 7. | Experience, ability, and depth of lending management and other relevant staff. |

| 8. | Quality of loan review and Board of Director oversight. |

| 9. | The effect of other external factors (i.e. competition, legal and regulatory 
 requirements) on the level of estimated credit losses.                       |

| 10. | Changes in inflationary environment. |

| 11. | Changes in the interest rate environment. |

Each factor is assigned a value to reflect improving, stable or declining conditions based on management’s best judgment using relevant information available at the time of the evaluation. Adjustments to the factors are supported through documentation of changes in conditions in a narrative accompanying the allowance for credit losses calculation for our loan portfolio. The evaluation also considers the following risk characteristics of each loan portfolio segment:

| • |     | One- to four-family residential real estate loans carry risks associated with the continued creditworthiness of 
 the borrower and changes in the value of the collateral.                                                        |

| • |     | Commercial real estate loans carry risks associated with the successful operation of a business or a real estate                                                                                      
 project, in addition to other risks associated with the ownership of real estate, because repayment of these loans may be dependent upon the profitability and cash flows of the business or project. |

| • |     | Construction loans carry risks that the project may not be finished according to schedule, the project may not be