Company: NWFL
Filing Date: 2025-10-08
Form Type: S-4/A
Source: 0001193125-25-234244
Chunk: 39

Company: NORWOOD FINANCIAL CORP
Filing Date: 2025-10-08
Form: S-4/A
Chunk 39
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merger from being completed in a timely manner. If litigation were to be commenced related to the merger, such litigation could affect the likelihood of obtaining the required approvals from PB Bankshares shareholders. Moreover, any litigation could
be time-consuming and expensive, and could divert the attention of the management of Norwood and PB Bankshares away from their regular business. Any lawsuit adversely resolved against Norwood, PB Bankshares or members of their respective boards of
directors could have a material adverse effect on each party’s business, financial condition and results of operations

One Big Beautiful Bill Act of 2025 Impacts

The “One Big Beautiful Bill Act” presents disparate potential impacts on
financial institutions. While some provisions of the new law could boost lending and potentially lead to economic growth, others could increase costs, add complexity, and potentially destabilize the financial system. The ultimate impact will depend
on how the provisions of the new law are implemented, how other countries respond, and how the overall economy reacts to the new law provisions.

Risks Related to Norwood’s Business

In the risk factors discussed in this section, references to “we”,
“our” and “us” are references to Norwood.

We are subject to interest rate risk.

Our earnings and cash flows are largely dependent upon net interest income. Net interest income is the difference between interest income
earned on interest-earning assets such as loans and securities, and interest expense paid on interest-bearing liabilities such as deposits and borrowed funds. Interest rates are highly sensitive to many factors that are beyond our control, including
general economic conditions and policies of various governmental and regulatory agencies and, in particular, the Board of Governors of the Federal Reserve System (the “Federal Reserve”). Changes in monetary policy, including changes in
interest rates, could influence not only the interest income that we receive on loans and securities and the amount of interest expense we pay on deposits and borrowings, but such changes could also affect (i) our ability to originate loans and
obtain deposits, (ii) the fair value of financial assets and liabilities, and (iii) the average duration of mortgage-backed securities in our investment portfolio. If the interest rates paid on deposits and other borrowings increase at a
faster rate than the interest rates received on loans and other investments, our net interest income, and therefore earnings, could be adversely affected. Earnings could also be adversely affected if the interest rates received on loans and
investments fall more quickly than the interest rates paid on deposits and borrowings.