Company: NWFL
Filing Date: 2025-10-28
Form Type: 424B3
Source: 0001193125-25-252482
Chunk: 108

Company: NORWOOD FINANCIAL CORP
Filing Date: 2025-10-28
Form: 424B3
Chunk 108
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 increase in net interest income for the six months ended June 30, 2025 compared to the six
months ended June 30, 2024 was primarily due to the increases in interest income on loans and debt securities available-for-sale and a decrease in interest expense
on borrowings and deposits, partially offset by a decrease in interest income on cash and cash equivalents. Average net interest-earning assets increased by $4.6 million to $68.8 million for the six months ended June 30, 2025 from
$64.3 million for the six months ended June 30, 2024. Our net interest margin increased 38 basis points to 2.87% for the six months ended June 30, 2025 from 2.49% for the six months ended June 30, 2024. Our net interest rate
spread increased 37 basis points to 2.38% for the six months ended June 30, 2025 from 2.01% for the six months ended June 30, 2024.

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 on commitments to grant loans that
are expected to be advanced at the consolidated balance sheet date. In determining the level of the allowance for credit losses, we consider our past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect
the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current and forecasted economic conditions,

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and the levels of non-performingand other classified loans. The amount of the allowance is based on estimates and the ultimate losses may vary from such estimates as more information becomes available or conditions change. We assess the allowance for credit losses on a quarterly basis and make provisions for credit losses in order to maintain the allowance. Based on our evaluation of the above factors, we recorded a $101,000 provision for credit losses for the six months ended June 30, 2025 compared to a reversal of provision for credit losses of $67,000 for the six months ended June 30, 2024. The increase in provision for credit losses was primarily due to a provision for loans of $90,000 for the six months ended June 30, 2025 as