Company: NWFL
Filing Date: 2025-09-19
Form Type: S-4
Source: 0001193125-25-208580
Chunk: 116

Company: NORWOOD FINANCIAL CORP
Filing Date: 2025-09-19
Form: S-4
Chunk 116
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 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.

73

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/prospectus carefully and in its entirety, including the annexes, for more detailed information concerning the merger agreement and the merger. A copy of the merger agreement is attached to this proxy statement/prospectus as
Annex A.

The PB Bankshares board of directors unanimously recommends that PB Bankshares shareholders vote “FOR” the approval of the merger agreement.

THE MERGER AND THE MERGER AGREEMENT

The following discussion contains certain information about the merger. The discussion is subject, and qualified in its entirety by reference,
to the merger agreement attached as Annex A to this proxy statement/prospectus and incorporated herein by reference. We urge you to read carefully and fully this