Norwood Financial Corp announces Second Quarter Financial Results

Quarterly Highlights:

• Record net income of $9.3 million.
• Record net interest income of $26.8 million.
• Diluted earnings per share of $0.86.
• Total assets of $2.908 billion.
• Tangible book value per share increased to $22.96, surpassing the pre-acquisition value of $22.90.
• Successfully completed Presence Bancshares integration, including core system conversion and brand convergence.
  
  

HONESDALE, Pa., July 22, 2026 (GLOBE NEWSWIRE) -- Norwood Financial Corp (the “Company”) (Nasdaq Global Market-NWFL), the holding company of Wayne Bank, announced results for the second quarter and six months ended June 30, 2026.

Jim Donnelly, President and Chief Executive Officer, stated, “We are pleased to announce strong second quarter results, highlighted by record net interest income, improved profitability, and continued progress following the integration of Presence Bancshares. Net interest margin expanded on both a year-over-year and linked-quarter basis, reflecting disciplined balance sheet management and the benefit of our larger franchise. We remain focused on credit quality, expense management, and long-term value creation for our shareholders as our teams continue to execute.”

    (dollars in thousands, except per share data)Year-Over YearLinked QuarterYear-to-Date3 Months Ended3 Months Ended6 Months EndedJun-26Jun-25ChangeMar-26ChangeJun-26Jun-25ChangeNet interest income$26,839 $19,065 $7,774$24,554 $2,285$51,393 $36,923 $14,470 Net interest spread (fte) 1 3.27%  2.75% 52 bps 3.04% 23 bps 3.16%  2.68% 48 bpsNet interest margin (fte) 1 3.90%  3.43% 47 bps 3.68% 22 bps 3.79%  3.37% 42 bpsPre Provision Net Revenue (PPNR) 1$13,573 $8,782 $4,791$6,279 $7,294$19,852 $16,927 $2,925 Net income$9,328 $6,205 $3,123$3,730 $5,598$13,058 $11,978 $1,080 Diluted earnings per share$0.86 $0.67 $0.19$0.35 $0.51$1.21 $1.30 $(0.09)Return on average assets 1.28%  1.06% 22 bps 0.53% 75 bps 0.91%  1.03% (12 bps)Return on tangible equity 15.04%  12.83% 221 bps 6.04% 900 bps 10.55%  12.62% (207 bps)                  Excluding merger-related expenses and 2026 BOLI Restructuring Fees (see Non-GAAP reconciliations)(dollars in thousands, except per share data)Year-Over YearLinked QuarterYear-to-Date3 Months Ended3 Months Ended6 Months EndedJun-26Jun-25ChangeMar-26ChangeJun-26Jun-25ChangePre Provision Net Revenue (PPNR)$13,626 $8,932 $4,694$11,445 $2,181$25,071 $8,932 $16,139 Net income$9,370 $6,324 $3,046$7,811 $1,559$17,181 $12,097 $5,085 Diluted earnings per share$0.86 $0.69 $0.17$0.72 $0.14$1.59 $1.31 $0.28 Return on average assets 1.29%  1.08% 21 bps 1.10% 19bps 1.20%  1.04% 16bpsReturn on average tangible equity 15.11%  13.08% 203 bps 12.65% 246 bps 13.88%  12.75% 126 bps                   

Discussion of financial results for the three months ended June 30, 2026 (all comparisons are to second quarter 2025, unless otherwise noted):

• Net income was $9.3 million, an increase of $3.1 million from $6.2 million. Diluted earnings per share were $0.86 compared to $0.67.
• Net interest income was $26.8 million, an increase of $7.8 million from $19.1 million. On a linked-quarter basis, net interest income increased $2.3 million from $24.6 million.
• Net interest margin (fully taxable equivalent) was 3.90% compared to 3.43%. On a linked-quarter basis, NIM increased 22 basis points from 3.68%.
• Pre-provision net revenue (PPNR) was $13.6 million, compared to $8.8 million in the prior-year quarter and $6.3 million in the linked quarter.
• Total assets were $2.908 billion, compared to $2.365 billion, an increase of 22.9%.
• Loans receivable were $2.263 billion compared to $1.791 billion, an increase of 26.4%.
• Total deposits were $2.514 billion compared to $1.998 billion, an increase of 25.8%.
• Tangible book value per share was $22.96 compared to $21.17 at June 30, 2025, and increased $0.54 on a linked-quarter basis from $22.43.
• Allowance for credit losses to total loans was 1.13%. Nonperforming loans to total loans were 1.23% and nonperforming assets to total assets were 0.98%.
  
  

Credit Quality

During the second quarter of 2026, the Company recorded net charge-offs of approximately $1.4 million, including a $729 thousand charge-off related to a previously disclosed borrower relationship that filed for Chapter 11 bankruptcy protection during June 2026. The relationship consists of five loans to four borrower entities with aggregate exposure of approximately $22 million to the Bank and is primarily secured by commercial real estate. The Company continues to evaluate the potential loss exposure associated with the relationship, monitor the bankruptcy proceedings, and assess underlying collateral values. Management believes the allowance for credit losses remains appropriate based on information currently available.

About Norwood Financial Corp

Norwood Financial Corp, through its subsidiary, Wayne Bank operates 33 Community Offices serving Wayne, Pike, Monroe, Lackawanna, Luzerne, Chester, Cumberland, and Lancaster Counties in Pennsylvania, along with Delaware, Sullivan, Otsego, Ontario, and Yates Counties in New York. The Company has total assets of $2.9 billion. The Company’s stock is traded on the Nasdaq Global Market under the symbol “NWFL”. For more information, visit wayne.bank.

Forward-Looking Statements

In addition to historical information, this earnings release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which describes the future plans, strategies and expectations of the Company. Forward-looking statements can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “assume,” “plan,” “seek,” “expect,” “will,” “may,” “should,” “indicate,” “would,” “contemplate,” “continue,” “target” and words of similar meaning. Forward-looking statements are based on our current beliefs and expectations and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Accordingly, you should not place undue reliance on such statements. We are under no duty to and do not take any obligation to update any forward-looking statements after the date of this report. Those risks and uncertainties include, among other things, changes in federal and state laws, changes in interest rates, our ability to maintain strong credit quality metrics, our ability to have future performance, our ability to control core operating expenses and costs, demand for real estate, government fiscal and trade policies, cybersecurity and general economic conditions. The Company undertakes no obligation to publicly release the results of any revisions to those forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Non-GAAP Measures

In addition to presenting information in conformity with accounting principles generally accepted in the United States of America (GAAP), this news release contains financial information determined by methods other than GAAP (non-GAAP). The following measures used in this release, which are commonly utilized by financial institutions, have not been specifically exempted by the Securities and Exchange Commission ("SEC") and may constitute "non-GAAP financial measures" within the meaning of the SEC's rules.

The Company has provided in this news release supplemental disclosures for the calculation of Return on Average Assets, Return on Average Tangible Shareholders’ Equity, Basic Earnings per Share, Diluted Earnings per Share, Tangible Book Value and Pre Provision Net Revenue. Management believes that the non-GAAP financial measures disclosed by the Company from time to time are useful in evaluating the Company’s performance and that such information should be considered as supplemental in nature and not as a substitute for or superior to the related financial information prepared in accordance with GAAP. Our non-GAAP financial measures may differ from similar measures presented by other companies.

   Contact: John M. McCaffery
Executive Vice President &
Chief Financial Officer
NORWOOD FINANCIAL CORP
272-304-3003 
www.waynebank.com   

 NORWOOD FINANCIAL CORP
Consolidated Balance Sheets
(dollars in thousands, except share and per share data)
(unaudited)
  June 30  2026
  2025
ASSETS     Cash and due from banks$30,902  $32,052 Interest-bearing deposits with banks 29,387   20,993 Fed funds sold 0   0 Cash and cash equivalents 60,289   53,045       Securities available for sale 438,967   402,460 Loans receivable 2,262,813   1,790,574 Less: Allowance for credit losses 25,632   20,908 Net loans receivable 2,237,181   1,769,666 Regulatory stock, at cost 6,399   7,538 Bank premises and equipment, net 25,262   21,608 Bank owned life insurance 55,404   46,099 Foreclosed real estate owned 771   - Accrued interest receivable 10,568   8,642 Deferred tax assets, net 19,979   17,693 Goodwill 36,375   29,266 Other intangible assets 3,153   121 Other assets 13,566   9,212 TOTAL ASSETS$2,907,914  $2,365,350       LIABILITIES     Deposits:     Non-interest bearing demand$500,383  $406,358 Interest-bearing 2,013,914   1,591,476 Total deposits 2,514,297   1,997,834 Short-term borrowings -   26,500 Other borrowings 65,513   85,350 Accrued interest payable 8,668   10,975 Other liabilities 29,796   19,266 TOTAL LIABILITIES 2,618,274   2,139,925       STOCKHOLDERS' EQUITY     Preferred Stock, no par value per share, authorized 5,000,000 shares -   - Common Stock, $.10 par value per share,     authorized: 20,000,000 shares,     issued: 2026: 11,182,591 shares, 2025: 9,490,505 shares 1,118   949 Surplus 174,337   126,990 Retained earnings 146,685   131,199 Treasury stock, at cost: 2026: 290,841 shares, 2025: 229,983 shares (7,957)  (6,208)Accumulated other comprehensive loss (24,543)  (27,505)TOTAL STOCKHOLDERS' EQUITY 289,640   225,425       TOTAL LIABILITIES AND     STOCKHOLDERS' EQUITY$2,907,914  $2,365,350       

 NORWOOD FINANCIAL CORP
Consolidated Statements of Income
(dollars in thousands, except per share data)
(unaudited)
  Three Months Ended June 30, Six Months Ended June 30,
  2026
  2025
  2026
  2025
INTEREST INCOME               Loans receivable, including fees$35,585  $27,115  $69,458  $53,103 Securities 4,495   3,871   8,605   7,742 Other 377   220   777   446 Total Interest income 40,457   31,206   78,840   61,291                 INTEREST EXPENSE               Deposits 12,899   10,869   25,686   21,617 Short-term borrowings 32   211   92   669 Other borrowings 687   1,061   1,669   2,082 Total Interest expense 13,618   12,141   27,447   24,368 NET INTEREST INCOME 26,839   19,065   51,393   36,923 PROVISION FOR CREDIT LOSSES 1,944   950   3,403   1,807 NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 24,895   18,115   47,990   35,116                                 OTHER INCOME               Service charges and fees 1,666   1,514   3,421   3,027 Income from fiduciary activities 248   226   486   551 Gains on sales of loans, net 54   65   131   112 Earnings and proceeds on life insurance policies 326   266   640   552 Other 232   177   564   357 Total other income 2,526   2,248   5,242   4,599                 OTHER EXPENSES               Salaries and employee benefits 8,674   6,605   17,223   13,077 Occupancy, furniture and equipment 1,569   1,349   3,294   2,727 Data processing and related operations 1,576   1,189   3,010   2,274 Taxes, other than income 174   192   376   385 Professional fees 596   473   1,422   1,132 FDIC Insurance assessment 428   355   935   761 Foreclosed real estate 31   137   67   141 Amortization of intangibles 165   15   331   30 Merger 53   150   4,994   150 Other 2,526   2,066   5,131   3,918 Total other expenses 15,792   12,531   36,783   24,595                 INCOME BEFORE TAX EXPENSE 11,629   7,832   16,449   15,120 INCOME TAX EXPENSE 2,301   1,627   3,391   3,142 NET INCOME$9,328  $6,205  $13,058  $11,978                 Basic earnings per share$0.86  $0.67  $1.21  $1.30                 Diluted earnings per share$0.86  $0.67  $1.21  $1.30                 

 NORWOOD FINANCIAL CORP
NET INTEREST MARGIN ANALYSIS (unaudited)
(dollars in thousands)
 For the Quarter Ended June 30, 2026March 31, 2026June 30, 2025 Average Average Average Average Average Average  BalanceInterestRate BalanceInterestRate BalanceInterestRate  (2)(1)(3) (2)(1)(3) (2)(1)(3) Assets                  Interest-earning assets:                  Fed funds sold$1,511  14 3.72 %$933  11 4.78 %$    %Interest-bearing deposits with banks 43,467 $364 3.36   72,896 $389 2.16   19,085 $220 4.62  Securities available for sale:                  Taxable 435,004  4,246 3.92   415,567  3,859 3.77   404,428  3,624 3.59  Tax-exempt (1) 44,269  315 2.85   44,634  318 2.89   44,158  312 2.83  Total securities available for sale (1) 479,273  4,561 3.82   460,201  4,177 3.68   448,586  3,936 3.52  Loans receivable (1) (4) (5) 2,253,991  35,700 6.35   2,195,033  33,999 6.28   1,783,626  27,249 6.13  Total interest-earning assets 2,778,242  40,639 5.87   2,729,063  38,576 5.73   2,251,297  31,405 5.60  Non-interest earning assets:                  Cash and due from banks 30,147      30,663      30,323     Allowance for credit losses (24,556)     (23,391)     (20,733)    Other assets 129,320      131,739      94,922     Total non-interest earning assets 134,911      139,011      104,512     Total Assets$2,913,153     $2,868,074     $2,355,809     Liabilities and Stockholders' Equity                  Interest-bearing liabilities:                  Interest-bearing demand and money market$727,580 $3,460 1.91  $723,966 $3,462 1.94  $573,904 $2,887 2.02  Savings 231,852  200 0.35   218,829  137 0.25   204,318  119 0.23  Time 1,071,210  9,239 3.46   1,040,656  9,188 3.58   821,725  7,863 3.84  Total interest-bearing deposits 2,030,642  12,899 2.55   1,983,451  12,787 2.61   1,599,947  10,869 2.72  Short-term borrowings 3,233  32 3.97   6,358  60 3.83   17,757  211 4.77  Other borrowings 67,802  687 4.06   95,152  982 4.19   95,792  1,061 4.44  Total interest-bearing liabilities 2,101,677  13,618 2.60   2,084,961  13,829 2.69   1,713,496  12,141 2.84  Non-interest bearing liabilities:                  Demand deposits 486,557      458,126      389,323     Other liabilities 36,585      35,188      29,639     Total non-interest bearing liabilities 523,142      493,314      418,962     Stockholders' equity 288,334      289,799      223,351     Total Liabilities and Stockholders' Equity$2,913,153     $2,868,074     $2,355,809     Net interest income/spread (tax equivalent basis)   27,021 3.27 %   24,747 3.04 %   19,264 2.75 %Tax-equivalent basis adjustment   (182)     (193)     (199)  Net interest income  $26,839     $24,554     $19,065   Net interest margin (tax equivalent basis)    3.90 %    3.68 %    3.43 %                                      (1) Interest and yields are presented on a tax-equivalent basis using a marginal tax rate of 21%.
(2) Average balances have been calculated based on daily balances.
(3) Annualized
(4) Loan balances include non-accrual loans and are net of unearned income.
(5) Loan yields include the effect of amortization of deferred fees, net of costs.
 

 NORWOOD FINANCIAL CORP
NET INTEREST MARGIN ANALYSIS (unaudited)
(dollars in thousands)
 Year to Date June 30, 2026June 30, 2025 Average Average Average Average  BalanceInterestRate BalanceInterestRate  (2)(1)(3) (2)(1)(3) Assets            Interest-earning assets:            Fed funds sold$1,226  25 4.11 %$    %Interest-bearing deposits with banks 58,074 $753 2.61   19,939 $446 4.51  Securities available for sale:            Taxable 425,350  8,104 3.84   406,416  7,247 3.60  Tax-exempt (1) 44,451  633 2.87   44,199  626 2.86  Total securities available for sale (1) 469,801  8,737 3.75   450,615  7,873 3.52  Loans receivable (1) (4) (5) 2,224,699  69,700 6.32   1,763,710  53,369 6.10  Total interest-earning assets 2,753,800  79,215 5.80   2,234,264  61,688 5.57  Non-interest earning assets:            Cash and due from banks 30,409      29,519     Allowance for credit losses (23,976)     (20,445)    Other assets 130,526      94,031     Total non-interest earning assets 136,959      103,105     Total Assets$2,890,759     $2,337,369     Liabilities and Stockholders' Equity            Interest-bearing liabilities:            Interest-bearing demand and money market$725,787 $6,922 1.92  $560,469 $5,688 2.05  Savings 225,380  337 0.30   208,090  261 0.25  Time 1,056,053  18,427 3.52   807,841  15,668 3.91  Total interest-bearing deposits 2,007,220  25,686 2.58   1,576,400  21,617 2.77  Short-term borrowings 4,782  92 3.88   30,954  669 4.36  Other borrowings 81,395  1,669 4.13   94,676  2,082 4.43  Total interest-bearing liabilities 2,093,397  27,447 2.64   1,702,030  24,368 2.89  Non-interest bearing liabilities:            Demand deposits 472,412      384,958     Other liabilities 35,886      29,594     Total non-interest bearing liabilities 508,297      414,552     Stockholders' equity 289,064      220,787     Total Liabilities and Stockholders' Equity$2,890,759     $2,337,369     Net interest income/spread (tax equivalent basis)   51,768 3.16 %   37,320 2.68 %Tax-equivalent basis adjustment   (375)     (397)  Net interest income  $51,393     $36,923   Net interest margin (tax equivalent basis)    3.79 %    3.37 %                          (1) Interest and yields are presented on a tax-equivalent basis using a marginal tax rate of 21%.
(2) Average balances have been calculated based on daily balances.
(3) Annualized
(4) Loan balances include non-accrual loans and are net of unearned income.
(5) Loan yields include the effect of amortization of deferred fees, net of costs.
 

 NORWOOD FINANCIAL CORP
Financial Highlights (Unaudited)
(dollars in thousands, except per share data)
      For the Three Months Ended June 30 2026
  2025
      Net interest income$26,839  $19,065 Net income 9,328   6,205       Net interest spread (fully taxable equivalent) 3.27%  2.75%Net interest margin (fully taxable equivalent) 3.90%  3.43%Return on average assets 1.28%  1.06%Return on average equity 12.98%  11.14%Return on average tangible equity 15.04%  12.83%Basic earnings per share$0.86  $0.67 Diluted earnings per share$0.86  $0.67       For the Six Months Ended June 30 2026
  2025
      Net interest income 51,393   36,923 Net income 13,058   11,978       Net interest spread (fully taxable equivalent) 3.16%  2.68%Net interest margin (fully taxable equivalent) 3.79%  3.37%Return on average assets 0.91%  1.03%Return on average equity 9.11%  10.94%Return on average tangible equity 10.55%  12.62%Basic earnings per share 1.21   1.30 Diluted earnings per share 1.21   1.30                   As of June 30 2026
  2025
      Total assets$2,907,914  $2,365,350 Total loans receivable 2,262,813   1,790,574 Allowance for credit losses 25,632   20,908 Total deposits 2,514,297   1,997,834 Stockholders' equity 289,640   225,425 Trust assets under management 242,164   207,402       Book value per share$26.59  $24.34 Tangible book value per share$22.96  $21.17 Equity to total assets 9.96%  9.53%Allowance to total loans receivable 1.13%  1.17%Nonperforming loans to total loans 1.21%  0.45%Nonperforming assets to total assets 0.97%  0.34%        

 NORWOOD FINANCIAL CORP
Consolidated Balance Sheets (unaudited)
(dollars in thousands)
  June 30  March 31  December 31  September 30June 30  2026
  2026
  2025
  2025
  2025
ASSETS              Cash and due from banks$30,902  $25,480  $32,118  $50,348  $32,052 Interest-bearing deposits with banks 29,387   75,258   12,318   24,382   20,993 Fed funds sold 0   1,835          Cash and cash equivalents 60,289   102,573   44,436   74,730   53,045                Securities available for sale 438,967   431,204   408,782   403,989   402,460 Loans receivable 2,262,813   2,238,657   1,853,422   1,814,682   1,790,574 Less: Allowance for credit losses 25,632   24,350   19,882   19,911   20,908 Net loans receivable 2,237,181   2,214,307   1,833,540   1,794,771   1,769,666 Regulatory stock, at cost 6,399   7,161   6,623   6,163   7,538 Bank owned life insurance 55,404   55,078   46,089   45,821   46,099 Bank premises and equipment, net 25,262   25,299   22,971   22,292   21,608 Foreclosed real estate owned 771   771   771   -   - Goodwill and other intangibles 39,528   39,693   29,364   29,375   29,387 Other assets 44,113   41,168   32,266   34,810   35,547 TOTAL ASSETS$2,907,914  $2,917,254  $2,424,842  $2,411,951  $2,365,350                LIABILITIES              Deposits:              Non-interest bearing demand$500,383  $470,706  $419,597  $424,027  $406,358 Interest-bearing deposits 2,013,914   2,035,992   1,659,048   1,649,941   1,591,476 Total deposits 2,514,297   2,506,698   2,078,645   2,073,968   1,997,834 Borrowings 65,513   88,268   74,133   72,071   111,850 Other liabilities 38,464   38,350   29,907   31,007   30,241 TOTAL LIABILITIES 2,618,274   2,633,316   2,182,685   2,177,046   2,139,925                STOCKHOLDERS' EQUITY 289,640   283,938   242,157   234,905   225,425                TOTAL LIABILITIES AND              STOCKHOLDERS' EQUITY$2,907,914  $2,917,254  $2,424,842  $2,411,951  $2,365,350                                              NORWOOD FINANCIAL CORP
Consolidated Statements of Income (unaudited)
(dollars in thousands, except per share data)
  June 30  March 31  December 31  September 30June 30Three months ended 2026
  2026
  2025
  2025
  2025
INTEREST INCOME              Loans receivable, including fees$35,585  $33,873  $28,666  $28,141  $27,115 Securities 4,495   4,110   3,906   3,907   3,871 Other 377   400   474   144   220 Total interest income 40,457   38,383   33,046   32,192   31,206                INTEREST EXPENSE              Deposits 12,899   12,787   11,334   10,730   10,869 Borrowings 719   1,042   768   1,004   1,272 Total interest expense 13,618   13,829   12,102   11,734   12,141 NET INTEREST INCOME 26,839   24,554   20,944   20,458   19,065 PROVISION FOR (RELEASE OF) CREDIT LOSSES 1,944   1,459   468   (502)  950 NET INTEREST INCOME AFTER (RELEASE OF) PROVISION              FOR CREDIT LOSSES 24,895   23,095   20,476   20,960   18,115                OTHER INCOME              Service charges and fees 1,666   1,755   1,734   1,660   1,514 Income from fiduciary activities 248   238   228   254   226 Net realized (losses) gains on sales of securities -   -   -   -   - Gains on sales of loans, net 54   76   83   130   65 Gains on sales of foreclosed real estate owned -   -   -   -   - Earnings and proceeds on life insurance policies 326   314   268   268   266 Other 232   332   198   193   177 Total other income 2,526   2,715   2,511   2,505   2,248                OTHER EXPENSES              Salaries and employee benefits 8,674   8,549   7,155   6,696   6,605 Occupancy, furniture and equipment, net 1,569   1,725   1,390   1,361   2,538 Foreclosed real estate 31   36   -   1   137 FDIC insurance assessment 428   507   423   368   355 Other 5,090   10,173   4,651   4,508   2,896 Total other expenses 15,792   20,990   13,619   12,934   12,531                INCOME BEFORE TAX (BENEFIT) EXPENSE 11,629   4,820   9,368   10,531   7,832 INCOME TAX (BENEFIT) EXPENSE 2,301   1,090   1,926   2,197   1,627 NET (LOSS) INCOME$9,328  $3,730  $7,442  $8,334  $6,205                Basic (loss) earnings per share$0.86  $0.35  $0.81  $0.89  $0.67                Diluted (loss) earnings per share$0.86  $0.35  $0.81  $0.89  $0.67                Book Value per share$26.59  $26.07  $26.06  $25.36  $24.34 Tangible Book Value per share 22.96   22.43   22.90   22.19   21.17                Return on average assets (annualized) 1.28%  0.53%  1.21%  1.40%  1.06%Return on average equity (annualized) 12.98%  5.22%  12.30%  14.58%  11.14%Return on average tangible equity (annualized) 15.04%  6.04%  14.01%  16.76%  12.83%               Net interest spread (fte) 3.27%  3.04%  2.93%  2.94%  2.75%Net interest margin (fte) 3.90%  3.68%  3.60%  3.63%  3.43%               Allowance for credit losses to total loans 1.13%  1.09%  1.07%  1.10%  1.17%Net charge-offs to average loans (annualized) 0.24%  0.09%  0.13%  0.13%  0.08%Nonperforming loans to total loans 1.21%  0.46%  0.34%  0.36%  0.45%Nonperforming assets to total assets 0.97%  0.38%  0.29%  0.31%  0.34%Nonperforming loans to total assets 0.94%  0.35%  0.26%  0.27%  0.34%Loan Loss Reserve/NPAs 91.13%  219.93%  279.62%  270.50%  258.43%               

 NORWOOD FINANCIAL CORP
Reconciliation of Non-GAAP Results (unaudited)
(dollars in thousands, except per share data)
                    Net Interest Income FTE
        (dollars in thousands)
 Three months ended Six months ended   June 30 June 30   2026
 2025
 2026
 2025
           Net Interest Income $26,839  $19,065  $51,393  $36,923  Taxable equivalent basis adjustment using 21% marginal tax rate  182   199   375   397  Net interest income on a fully taxable equivalent basis $27,021  $19,264  $51,768  $37,320           Average Tangible Equity
        (dollars in thousands)
           Three months ended Six months ended   June 30 June 30   2026
 2025
 2026
 2025
           Average equity $288,334  $223,351  $289,064  $220,787  Average goodwill and other intangibles  (39,609)  (29,394)  (39,472)  (29,402) Average tangible equity $248,725  $193,957  $249,592  $191,385                   

 NORWOOD FINANCIAL CORP
Reconciliation of Non-GAAP Results
(dollars in thousands, except per share data)
                                           Pre Provision Net Revenue                    (Dollars in thousands)                                           Six Months  Three Months  Three Months  Six Months
  Three Months   Ended  Ended  Ended  Ended
  Ended   June 30,  June 30,  March 31,  June 30,
  June 30,   2026  2026  2026  2025
  2025 Income before tax expense (GAAP)$16,449  $11,629  $4,820  $15,120  $7,832  Provision for credit losses 3,403   1,944   1,459   1,807   950  Pre provision net revenue (PPNR) (Non-GAAP) 19,852   13,573   6,279   16,927   8,782  Merger-related expenses 4,994   53   4,941   150   150  BOLI restructuring fee 225   0   225   0   0  PPNR adjusted for one time expenses (Non-GAAP) 25,071   13,626   11,445   17,077   8,932                      

 NORWOOD FINANCIAL CORP
Reconciliation of Non-GAAP Results (unaudited)
(dollars in thousands, except per share data)
                                   Adjusted Return on Average Assets                (Dollars in thousands)                  Six Months Three Months Three Months Six Months Three Months   Ended Ended Ended Ended Ended   June 30, June 30, March 31, June 30, June 30,   2026 2026 2026 2025 2025 Net income$13,058  $9,328  $3,730  $11,978  $6,205   Average assets 2,890,759   2,913,153   2,868,074   2,337,369   2,355,809   Return on average assets (annualized) 0.91 % 1.28 % 0.53 % 1.03 % 1.06 % Net income 13,058   9,328   3,730   11,978   6,205   Merger-related expenses 4,994   53   4,941   150   150   Boli restructuring fee 225   0   225   0   0   Tax effect at 21% (1,096)  (11)  (1,085)  (32)  (32)  Adjusted Net Income (Non-GAAP) 17,181   9,370   7,811   12,097   6,324   Average assets 2,890,759   2,913,153   2,868,074   2,337,369   2,355,809   Adjusted return on average assets (annualized)                (Non-GAAP) 1.20 % 1.29 % 1.10 % 1.04 % 1.08 %                                                                     Adjusted Return on Average Tangible Shareholders' Equity               (Dollars in thousands)                  Six Months Three Months Three Months Six Months Three Months   Ended Ended Ended Ended Ended   June 30, June 30, March 31, June 30, June 30,   2026 2026 2026 2025 2025 Net income$13,058  $9,328  $3,730  $11,978  $6,205   Average shareholders' equity 289,064   288,334   289,799   220,787   223,351   Average intangible assets (39,472)  (39,609)  (39,334)  (29,402)  (29,394)  Average tangible shareholders' equity 249,592   248,725   250,465   191,385   193,957   Return on average tangible shareholders' equity (annualized)10.55 % 15.04 % 6.04 % 12.62 % 12.83 % Net income 13,058   9,328   3,730   11,978   6,205   Merger-related expenses 4,994   53   4,941   150   150   Boli restructuring fee 225   0   225   0   0   Tax effect at 21% (1,096)  (11)  (1,085)  (32)  (32)  Adjusted Net Income (Non-GAAP) 17,181   9,370   7,811   12,097   6,324   Average tangible shareholders' equity 249,592   248,725   250,465   191,385   193,957   Adjusted return on average shareholders' equity (annualized)               (Non-GAAP) 13.88 % 15.11 % 12.65 % 12.75 % 13.08 %                                                                     Adjusted Earnings Per Share                (Dollars in thousands)                  Six Months Three Months Three Months Six Months Three Months   Ended Ended Ended Ended Ended   June 30, June 30, March 31, June 30, June 30,   2026 2026 2026 2025 2025 GAAP-Based Earnings Per Share, Basic$1.21  $0.86  $0.35  $1.30  $0.67   GAAP-Based Earnings Per Share, Diluted$1.21  $0.86  $0.35  $1.30  $0.67   Net Income 13,058   9,328   3,730   11,978   6,205   Merger-related expenses 4,994   53   4,941   150   150   Boli restructuring fee 225   0   225   0   0   Tax effect at 21% (1,096)  (11)  (1,085)  (32)  (32)  Adjusted Net Income (Non-GAAP) 17,181   9,370   7,811   12,097   6,324   Adjusted Earnings per Share, Basic (Non-GAAP)$1.59  $0.86  $0.73  $1.31  $0.69   Adjusted Earnings per Share, Diluted (Non-GAAP)$1.59  $0.86  $0.72  $1.31  $0.69