Earnings release
Page 1
Norwood Financial Corp announces Third Quarter Financial Results October 27, 2026 Quarterly Highlights: Record net income of $11.8 million. Record net interest income of $28.0 million. Net interest margin 4.01%. Diluted earnings per share of $1.08. Total assets of $2.95 billion. Disciplined execution across the enterprise plus contribution from Presence Bank acquisition contributed to the strong performance. HONESDALE, Pa., Oct. 27, 2026 (GLOBE NEWSWIRE) -- - Norwood Financial Corp (the “Company”) (Nasdaq Global Market- NWFL), the holding company of Wayne Bank, announced results for the three- and nine-month periods ended September 30, 2026. Jim Donnelly, President and Chief Executive Officer, stated, “The entire Wayne Bank team continued to perform well in the third quarter, delivering record net income and net interest income for the second consecutive quarter. In addition to strong income growth, we navigated the bankruptcy related to a borrower relationship, resolving the issue with favorable outcome. Net interest margin expanded on disciplined balance sheet management and one-time benefit of the bankruptcy resolution. Our financial position is strong and believe we are poised to extend our performance for long-term shareholder value creation.” (dollars in thousands, except per share data) Year-Over Year Linked Quarter Year-to-Date 3 Months Ended 3 Months Ended 9 Months Ended Sep-26 Sep-25 Change Jun-26 Change Sep-26 Sep-25 Change Net interest income $ 28,009 $ 20,458 $ 7,551 $ 26,839 $ 1,170 $ 79,402 $ 57,380 $ 22,022 Net interest spread (fte) 1 3.36% 2.94% 42 bps 3.27% 9 bps 3.23% 2.77% 46 bps Net interest margin (fte) 1 4.01% 3.63% 38 bps 3.90% 11 bps 3.87% 3.46% 140 bps Pre Provision Net Revenue (PPNR) 1 $ 15,377 $ 10,029 $ 5,348 $ 13,573 $ 1,804 $ 35,229 $ 24,346 $ 10,883 Net income $ 11,763 $ 8,334 $ 3,429 $ 9,328 $ 2,435 $ 24,821 $ 20,313 $ 4,508 Diluted earnings per share $ 1.08 $ 0.89 $ 0.19 $ 0.86 $ 0.22 $ 2.29 $ 2.22 $ 0.07 Return on average assets 1.60% 1.40% 20 bps 1.28% 32 bps 1.15% 1.16% (1 bp) Return on tangible equity 18.51% 16.76% 175 bps 15.04% 347 bps 13.25% 14.04% (79 bps) Excluding merger-related expenses and 2026 BOLI Restructuring Fees (see Non-GAAP reconciliations) (dollars in thousands, except per share data) Year-Over Year Linked Quarter Year-to-Date 3 Months Ended 3 Months Ended 9 Months Ended Sep-26 Sep-25 Change Jun-26 Change Sep-26 Sep-25 Change Pre Provision Net Revenue (PPNR) $ 15,377 $ 10,597 $ 4,780 $ 8,932 $ 6,445 $ 40,448 $ 27,674 $ 12,774 Net income $ 11,763 $ 8,783 $ 2,980 $ 6,324 $ 5,440 $ 30,040 $ 21,031 $ 9,009
Page 2
Diluted earnings per share $ 1.08 $ 0.94 $ 0.14 $ 0.69 $ 0.39 $ 2.67 $ 2.28 $ 0.39 Return on average assets 1.60% 1.47% 13 bps 1.08% 52bps 1.39% 1.20% 19 bps Return on average tangible equity 18.51% 17.66% 85 bps 13.08% 543 bps 16.04% 14.54% 150 bps Discussion of financial results for the three months ended September 30, 2026 (all comparisons are to third quarter 2025, unless otherwise noted): Net income was $11.8 million, an increase of $3.4 million from $8.3 million. Diluted earnings per share were $1.08 compared to $0.89. Net interest income was $28.0 million, an increase of $7.6 million from $20.5 million. On a linked-quarter basis, net interest income increased $1.2 million from $26.8 million. Net interest margin (fully taxable equivalent) was 4.01% compared to 3.63%. On a linked-quarter basis, NIM increased 11 basis points from 3.90%. Pre-provision net revenue (PPNR) was $15.4 million, compared to $10.0 million in the prior year quarter and $13.6 million in the linked quarter. Total assets were $2.951 billion, compared to $2.412 billion, an increase of 18.3%. Loans receivable were $2.294 billion compared to $1.815 billion, an increase of 20.9%. Total deposits were $2.509 billion compared to $2.074 billion, an increase of 17.3%. Tangible book value per share was $22.35 compared to $21.19 at September 30, 2025, and decreased $0.61 on a linked- quarter basis from $22.96. Allowance for credit losses to total loans was 1.10%. Nonperforming loans to total loans were 0.73% and nonperforming assets to total assets were 0.59%. Follow-up on Second Quarter Credit Event During the second quarter of 2026, the Company recorded a $729 thousand charge-off related to a borrower relationship that filed for Chapter 11 bankruptcy protection. During the third quarter, one of the loans that had been placed on non-accrual, due to the bankruptcy previously disclosed, was purchased by a new entity, as was the underlying business. All past due interest from the previous loan was paid. During the period that the business was in bankruptcy, Wayne Bank advanced debtor-in-possession (DIP) financing to keep the business operating. The DIP financing along with all interest and fees was settled as part of the loan purchase. Accordingly, interest income increased in the third quarter which, in turn, increased our margin during the quarter. Additionally, removing the previous loan from non-accrual status resulted in a lower provision expense for the quarter. Following the purchase of this loan, there remain two loans related to the borrower with a total exposure of $7.1 million. 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
Page 3
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) September 30 2026 2025 ASSETS Cash and due from banks $ 19,857 $ 50,348 Interest-bearing deposits with banks 52,667 24,382 Cash and cash equivalents 72,524 74,730 Securities available for sale 429,492 403,989 Loans receivable 2,294,467 1,814,682 Less: Allowance for credit losses 25,146 19,911 Net loans receivable 2,269,321 1,794,771 Regulatory stock, at cost 8,460 6,163 Bank premises and equipment, net 25,140 22,292 Bank owned life insurance 62,738 45,821 Foreclosed real estate owned 771 - Accrued interest receivable 10,609 8,686 Deferred tax assets, net 22,982 16,528 Goodwill 36,375 29,266 Other intangible assets 2,992 109 Other assets 10,153 9,596 TOTAL ASSETS $ 2,951,557 $ 2,411,951 LIABILITIES Deposits: Non-interest bearing demand $ 487,753 $ 424,027 Interest-bearing 2,021,227 1,649,941 Total deposits 2,508,980 2,073,968 Short-term borrowings 56,124 - Other borrowings 62,728 72,071
Page 4
Accrued interest payable 10,467 9,823 Other liabilities 29,897 21,184 TOTAL LIABILITIES 2,668,196 2,177,046 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: 11,184,631 shares, 2025: 9,491,558 shares 1,118 949 Surplus 174,650 127,190 Retained earnings 154,956 136,662 Treasury stock, at cost: 2026: 269,841 shares, 2025: 229,233 shares (7,390) (6,188) Accumulated other comprehensive loss (39,973) (23,708) TOTAL STOCKHOLDERS' EQUITY 283,361 234,905 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,951,557 $ 2,411,951 NORWOOD FINANCIAL CORP Consolidated Statements of Income (dollars in thousands, except per share data) (unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2026 2025 2026 2025 INTEREST INCOME Loans receivable, including fees $ 36,635 $ 28,141 $ 106,093 $ 81,244 Securities 4,472 3,907 13,076 11,648 Other 354 144 1,132 590 Total Interest income 41,461 32,192 120,301 93,482 INTEREST EXPENSE Deposits 12,775 10,730 38,462 32,347 Short-term borrowings 37 105 128 774 Other borrowings 640 899 2,309 2,981 Total Interest expense 13,452 11,734 40,899 36,102 NET INTEREST INCOME 28,009 20,458 79,402 57,380 PROVISION FOR (RELEASE OF) CREDIT LOSSES 100 (502) 3,503 1,305 NET INTEREST INCOME AFTER PROVISION FOR (RELEASE OF) CREDIT LOSSES 27,909 20,960 75,899 56,075 OTHER INCOME Service charges and fees 2,004 1,660 5,425 4,687 Income from fiduciary activities 265 254 751 805 Gains on sales of loans, net 58 130 188 242 Earnings and proceeds on life insurance policies 334 268 974 820 Other 259 193 824 551 Total other income 2,920 2,505 8,162 7,105 OTHER EXPENSES Salaries and employee benefits 8,274 6,696 25,497 19,773 Occupancy, furniture and equipment 1,521 1,361 4,815 4,088 Data processing and related operations 1,650 1,087 4,660 3,361 Taxes, other than income 145 192 521 577
Page 5
Professional fees 530 400 1,952 1,532 FDIC Insurance assessment 639 368 1,574 1,129 Foreclosed real estate 58 1 125 143 Amortization of intangibles 162 12 493 42 Merger 0 568 4,994 718 Other 2,573 2,249 7,704 6,166 Total other expenses 15,552 12,934 52,335 37,529 INCOME BEFORE TAX EXPENSE 15,277 10,531 31,726 25,651 INCOME TAX EXPENSE 3,514 2,197 6,905 5,338 NET INCOME $ 11,763 $ 8,334 $ 24,821 $ 20,313 Basic earnings per share $ 1.08 $ 0.89 $ 2.29 $ 2.22 Diluted earnings per share $ 1.08 $ 0.89 $ 2.29 $ 2.22 NORWOOD FINANCIAL CORP NET INTEREST MARGIN ANALYSIS (dollars in thousands) For the Quarter Ended September 30, 2026 June 30, 2026 September 30, 2025 Average Average Average Average Average Average Balance Interest Rate Balance Interest Rate Balance Interest Rate (2) (1) (3) (2) (1) (3) (2) (1) (3) Assets Interest-earning assets: Fed funds sold $ 15 – – % $ 1,511 14 3.72% $ – – – % Interest-bearing deposits with banks 39,717 $ 354 3.54 43,467 $ 364 3.36 12,485 $ 144 4.58 Securities available for sale: Taxable 439,064 4,224 3.82 435,004 4,246 3.92 399,090 3,661 3.64 Tax-exempt (1) 43,956 322 2.91 44,269 315 2.85 44,074 312 2.81 Total securities available for sale (1) 483,020 4,546 3.73 479,273 4,561 3.82 443,164 3,973 3.56 Loans receivable (1) (4) (5) 2,267,664 36,760 6.43 2,253,991 35,700 6.35 1,802,046 28,267 6.22 Total interest- earning assets 2,790,416 41,660 5.92 2,778,242 40,639 5.87 2,257,695 32,384 5.69 Non-interest earning assets: Cash and due from banks 19,466 30,147 31,050 Allowance for credit losses (26,101) (24,556) (21,128) Other assets 125,818 129,320 96,142 Total non-interest earning assets 119,183 134,911 106,064 Total Assets $ 2,909,599 $ 2,913,153 $ 2,363,759
Page 6
Liabilities and Stockholders' Equity Interest-bearing liabilities: Interest-bearing demand and money market $ 741,251 $ 3,519 1.88 $ 727,580 $ 3,460 1.91 $ 579,145 $ 2,900 1.99 Savings 230,456 268 0.46 231,852 200 0.35 200,559 113 0.22 Time 1,045,893 8,989 3.41 1,071,210 9,239 3.46 822,491 7,717 3.72 Total interest- bearing deposits 2,017,600 12,776 2.51 2,030,642 12,899 2.55 1,602,195 10,730 2.66 Short-term borrowings 3,540 36 4.03 3,233 32 3.97 8,740 105 4.77 Other borrowings 63,901 640 3.97 67,802 687 4.06 81,125 899 4.40 Total interest- bearing liabilities 2,085,041 13,452 2.56 2,101,677 13,618 2.60 1,692,060 11,734 2.75 Non-interest bearing liabilities: Demand deposits 494,690 486,557 416,150 Other liabilities 38,244 36,585 28,816 Total non-interest bearing liabilities 532,934 523,142 444,966 Stockholders' equity 291,624 288,334 226,733 Total Liabilities and Stockholders' Equity $ 2,909,599 $ 2,913,153 $ 2,363,759 Net interest income/spread (tax equivalent basis) 28,208 3.36% 27,021 3.27% 20,650 2.94% Tax-equivalent basis adjustment (199) (182) (192) Net interest income $ 28,009 $ 26,839 $ 20,458 Net interest margin (tax equivalent basis) 4.01% 3.90% 3.63% (1) Interest and yields are presented on a tax-equivalent basis. (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 (dollars in thousands) Year to Date September 30, 2026 June 30, 2026 September 30, 2025 Average Average Average Average Average Average
Page 7
Balance Interest Rate Balance Interest Rate Balance Interest Rate (2) (1) (3) (2) (1) (3) (2) (1) (3) Assets Interest-earning assets: Fed funds sold $ 818 25 4.09% $ 1,226 25 4.11% $ – – – % Interest-bearing deposits with banks 51,908 $ 1,107 2.85 58,074 $ 753 2.61 17,427 $ 590 4.53 Securities available for sale: Taxable 429,970 12,328 3.83 425,350 8,104 3.84 403,947 10,907 3.61 Tax-exempt (1) 44,285 955 2.88 44,451 633 2.87 44,157 938 2.84 Total securities available for sale (1) 474,255 13,283 3.74 469,801 8,737 3.75 448,104 11,845 3.53 Loans receivable (1) (4) (5) 2,239,147 106,460 6.36 2,224,699 69,700 6.32 1,776,629 81,636 6.14 Total interest- earning assets 2,766,128 120,875 5.84 2,753,800 79,215 5.80 2,242,160 94,071 5.61 Non-interest earning assets: Cash and due from banks 26,719 30,409 30,035 Allowance for credit losses (24,691) (23,976) (20,675) Other assets 128,943 130,526 94,389 Total non-interest earning assets 130,971 136,959 103,749 Total Assets $ 2,897,099 $ 2,890,759 $ 2,345,909 Liabilities and Stockholders' Equity Interest-bearing liabilities: Interest-bearing demand and money market $ 730,956 $ 10,441 1.91 $ 725,787 $ 6,922 1.92 $ 566,762 $ 8,588 2.03 Savings 227,101 605 0.36 225,380 337 0.30 205,552 374 0.24 Time 1,052,670 27,416 3.48 1,056,053 18,427 3.52 812,778 23,385 3.85 Total interest- bearing deposits 2,010,727 38,462 2.56 2,007,220 25,686 2.58 1,585,092 32,347 2.73 Short-term borrowings 4,337 128 3.95 4,782 92 3.88 23,468 774 4.41 Other borrowings 75,503 2,309 4.09 81,395 1,669 4.13 90,110 2,981 4.42 Total interest- bearing liabilities 2,090,567 40,899 2.62 2,093,397 27,447 2.64 1,698,670 36,102 2.84 Non-interest bearing liabilities: Demand deposits 479,931 472,412 395,470 Other liabilities 36,680 35,886 28,978 Total non-interest bearing liabilities 516,611 508,298 424,448 Stockholders' equity 289,921 289,064 222,791 Total Liabilities and Stockholders' Equity $ 2,897,099 $ 2,890,759 $ 2,345,909 Net interest income/spread (tax equivalent basis) 79,976 3.23% 51,768 3.16% 57,969 2.77%
Page 8
Tax-equivalent basis adjustment (574) (375) (589) Net interest income $ 79,402 $ 51,393 $ 57,380 Net interest margin (tax equivalent basis) 3.87% 3.79% 3.46% (1) Interest and yields are presented on a tax-equivalent basis. (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 September 30 2026 2025 Net interest income $ 28,009 $ 20,458 Net income 11,763 8,334 Net interest spread (fully taxable equivalent) 3.36% 2.94% Net interest margin (fully taxable equivalent) 4.01% 3.63% Return on average assets 1.60% 1.40% Return on average equity 16.00% 14.58% Return on average tangible equity 18.51% 16.76% Basic earnings per share $ 1.08 $ 0.89 Diluted earnings per share $ 1.08 $ 0.89 Efficiency ratio 50.28% 56.33% Operating expense/Average assets 2.14% 2.19% For the Nine Months Ended September 30 2026 2025 Net interest income 79,402 57,380 Net income 24,821 20,313 Net interest spread (fully taxable equivalent) 3.23% 2.77% Net interest margin (fully taxable equivalent) 3.87% 3.46% Return on average assets 1.15% 1.16% Return on average equity 11.45% 12.19% Return on average tangible equity 13.25% 14.04% Basic earnings per share 2.29 2.22 Diluted earnings per share 2.29 2.22 Efficiency ratio 59.77% 58.20% Operating expense/Average assets 2.41% 2.13% As of September 30 2026 2025 Total assets $ 2,951,557 $ 2,411,951 Total loans receivable 2,294,467 1,814,682 Allowance for credit losses 25,146 19,911
Page 9
Total deposits 2,508,980 2,073,968 Stockholders' equity 283,361 234,905 Trust assets under management 231,302 211,563 Book value per share $ 25.96 $ 25.36 Tangible book value per share $ 22.35 $ 22.19 Equity to total assets 9.60% 9.74% Allowance to total loans receivable 1.10% 1.10% Nonperforming loans to total loans 0.73% 0.36% Nonperforming assets to total assets 0.59% 0.31% NORWOOD FINANCIAL CORP Consolidated Balance Sheets (unaudited) (dollars in thousands) September 30 June 30 March 31 December 31 September 30 2026 2026 2026 2025 2025 ASSETS Cash and due from banks $ 19,857 $ 30,902 $ 25,480 $ 32,118 $ 50,348 Interest-bearing deposits with banks 52,667 29,387 75,258 12,318 24,382 Fed funds sold 0 0 1,835 0 0 Cash and cash equivalents 72,524 60,289 102,573 44,436 74,730 Securities available for sale 429,492 438,967 431,204 408,782 403,989 Loans receivable 2,294,467 2,262,813 2,238,657 1,853,422 1,814,682 Less: Allowance for credit losses 25,146 25,632 24,350 19,882 19,911 Net loans receivable 2,269,321 2,237,181 2,214,307 1,833,540 1,794,771 Regulatory stock, at cost 8,460 6,399 7,161 6,623 6,163 Bank owned life insurance 62,738 55,404 55,078 46,089 45,821 Bank premises and equipment, net 25,140 25,262 25,299 22,971 22,292 Foreclosed real estate owned 771 771 771 771 - Goodwill and other intangibles 39,367 39,528 39,693 29,364 29,375 Other assets 43,744 44,113 41,168 32,266 34,810 TOTAL ASSETS $ 2,951,557 $ 2,907,914 $ 2,917,254 $ 2,424,842 $ 2,411,951 LIABILITIES Deposits: Non-interest bearing demand $ 487,753 $ 500,383 $ 470,706 $ 419,597 $ 424,027 Interest-bearing deposits 2,021,227 2,013,914 2,035,992 1,659,048 1,649,941 Total deposits 2,508,980 2,514,297 2,506,698 2,078,645 2,073,968 Borrowings 118,852 65,513 88,268 74,133 72,071 Other liabilities 40,364 38,464 38,350 29,907 31,007 TOTAL LIABILITIES 2,668,196 2,618,274 2,633,316 2,182,685 2,177,046 STOCKHOLDERS' EQUITY 283,361 289,640 283,938 242,157 234,905 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,951,557 $ 2,907,914 $ 2,917,254 $ 2,424,842 $ 2,411,951 NORWOOD FINANCIAL CORP Consolidated Statements of Income (unaudited) (dollars in thousands, except per share data)
Page 10
September 30 June 30 March 31 December 31 September 30 Three months ended 2026 2026 2026 2025 2025 INTEREST INCOME Loans receivable, including fees $ 36,635 $ 35,585 $ 33,873 $ 28,666 $ 28,141 Securities 4,472 4,495 4,110 3,906 3,907 Other 354 377 400 474 144 Total interest income 41,461 40,457 38,383 33,046 32,192 INTEREST EXPENSE Deposits 12,775 12,899 12,787 11,334 10,730 Borrowings 677 719 1,042 768 1,004 Total interest expense 13,452 13,618 13,829 12,102 11,734 NET INTEREST INCOME 28,009 26,839 24,554 20,944 20,458 PROVISION FOR (RELEASE OF) CREDIT LOSSES 100 1,944 1,459 468 (502) NET INTEREST INCOME AFTER (RELEASE OF) PROVISION FOR CREDIT LOSSES 27,909 24,895 23,095 20,476 20,960 OTHER INCOME Service charges and fees 2,004 1,666 1,755 1,734 1,660 Income from fiduciary activities 265 248 238 228 254 Net realized (losses) gains on sales of securities - - - - - Gains on sales of loans, net 58 54 76 83 130 Gains on sales of foreclosed real estate owned - - - - - Earnings and proceeds on life insurance policies 334 326 314 268 268 Other 259 232 332 198 193 Total other income 2,920 2,526 2,715 2,511 2,505 OTHER EXPENSES Salaries and employee benefits 8,274 8,674 8,549 7,155 6,696 Occupancy, furniture and equipment, net 1,521 1,569 1,725 1,390 1,361 Foreclosed real estate 58 31 36 - 1 FDIC insurance assessment 639 428 507 423 368 Other 5,060 5,090 10,173 4,651 4,508 Total other expenses 15,552 15,792 20,990 13,619 12,934 INCOME BEFORE TAX (BENEFIT) EXPENSE 15,277 11,629 4,820 9,368 10,531 INCOME TAX (BENEFIT) EXPENSE 3,514 2,301 1,090 1,926 2,197 NET (LOSS) INCOME $ 11,763 $ 9,328 $ 3,730 $ 7,442 $ 8,334 Basic (loss) earnings per share $ 1.08 $ 0.86 $ 0.35 $ 0.81 $ 0.89 Diluted (loss) earnings per share $ 1.08 $ 0.86 $ 0.35 $ 0.81 $ 0.89 Book Value per share $ 25.96 $ 26.59 $ 26.07 $ 26.06 $ 25.36 Tangible Book Value per share 22.35 22.96 22.43 22.90 22.19 Return on average assets (annualized) 1.60% 1.28% 0.53% 1.21% 1.40% Return on average equity (annualized) 16.00% 12.98% 5.22% 12.30% 14.58% Return on average tangible equity (annualized) 18.51% 15.04% 6.04% 14.01% 16.76%
Page 11
Net interest spread (fte) 3.36% 3.27% 3.04% 2.93% 2.94% Net interest margin (fte) 4.01% 3.90% 3.68% 3.60% 3.63% Allowance for credit losses to total loans 1.10% 1.13% 1.09% 1.07% 1.10% Net charge-offs to average loans (annualized) 0.13% 0.24% 0.09% 0.13% 0.13% Nonperforming loans to total loans 0.73% 1.21% 0.46% 0.34% 0.36% Nonperforming assets to total assets 0.59% 0.97% 0.38% 0.29% 0.31% Nonperforming loans to total assets 0.57% 0.94% 0.35% 0.26% 0.27% Loan Loss Reserve/NPAs 143.33% 91.13% 219.93% 279.62% 270.50% NORWOOD FINANCIAL CORP NON-GAAP ADJUSTMENTS (dollars in thousands) Adjusted Return on Average Assets (Dollars in thousands) Nine Months Three Months Three Months Nine Months Three Months Ended Ended Ended Ended Ended September 30, September 30, June 30, September 30, September 30, 2026 2026 2026 2025 2025 Net income $ 24,821 $ 11,763 $ 9,328 $ 20,313 $ 8,334 Average assets 2,897,099 2,909,599 2,913,153 2,345,909 2,363,759 Return on average assets (annualized) 1.15% 1.60% 1.28% 1.16% 1.40% Net income 24,821 11,763 9,328 20,313 8,334 Merger-related expenses 4,994 0 53 718 568 Boli restructuring fee 225 0 0 0 0 Tax effect 0 0 0 0 0 Adjusted net income (Non-GAAP) 30,040 11,763 9,381 21,031 8,902 Average assets 2,897,099 2,909,599 2,913,153 2,345,909 2,363,759 Adjusted return on average assets (annualized) (Non-GAAP) 1.39% 1.60% 1.29% 1.20% 1.49% Adjusted Return on Average Tangible Shareholders' Equity (Dollars in thousands) Nine Months Three Months Three Months Nine Months Three Months Ended Ended Ended Ended Ended September 30, September 30, June 30, September 30, September 30, 2026 2026 2026 2025 2025 Net income $ 24,821 $ 11,763 $ 9,328 $ 20,313 $ 8,334 Average shareholders' equity 289,921 291,624 288,334 222,791 226,733 Average intangible assets 39,466 39,455 39,609 29,394 29,380 Average tangible shareholders' equity 250,455 252,169 248,725 193,397 197,353 Return on average tangible shareholders' equity (annualized) 13.25% 18.51% 15.04% 14.04% 16.76% Net income 24,821 11,763 9,328 20,313 8,334 Merger-related expenses 4,994 0 53 718 568 Boli restructuring fee 225 0 0 0 0 Tax effect 0 0 0 0 0 Adjusted net income (Non-GAAP) 30,040 11,763 9,381 21,031 8,902 Average tangible shareholders' equity 250,455 252,169 248,725 193,397 197,353
Page 12
Adjusted return on average shareholders' equity (annualized) (Non-GAAP) 16.04 18.51% 15.13% 14.54% 17.90% Adjusted Earnings Per Share (Dollars in thousands) Nine Months Three Months Three Months Nine Months Three Months Ended Ended Ended Ended Ended September 30, September 30, June 30, September 30, September 30, 2026 2026 2026 2025 2025 GAAP-Based Earnings Per Share, Basic $ 2.29 $ 1.08 $ 0.86 $ 2.22 $ 0.89 GAAP-Based Earnings Per Share, Diluted $ 2.29 $ 1.08 $ 0.86 $ 2.22 $ 0.89 Net income 24,821 11,763 9,328 20,313 8,334 Merger-related expenses 4,994 0 53 718 568 Boli restructuring fee 225 0 0 0 0 Tax effect 0 0 0 0 0 Adjusted net income (Non-GAAP) 30,040 11,763 9,381 21,031 8,902 Adjusted Earnings per Share, Basic (Non-GAAP) $ 2.67 $ 1.08 $ 0.86 $ 2.28 $ 0.94 Adjusted Earnings per Share, Diluted (Non-GAAP) $ 2.67 $ 1.08 $ 0.86 $ 2.28 $ 0.94 Pre Provision Net Revenue (Dollars in thousands) Nine Months Three Months Three Months Nine Months Three Months Ended Ended Ended Ended Ended September 30, September 30, June 30, September 30, September 30, 2026 2026 2026 2025 2025 Income before tax expense (GAAP) $ 31,726 $ 15,277 $ 11,629 $ 25,651 10,531 Provision for credit losses 3,503 100 1,944 1,305 (502) Pre provision net revenue (PPNR) (Non-GAAP) 35,229 15,377 13,573 26,956 10,029 Merger-related expenses 4,994 0 53 718 568 BOLI restructuring fee 225 0 0 0 0 PPNR adjusted for one time expenses (Non-GAAP) 40,448 15,377 13,626 27,674 10,597 Net Interest Income FTE (Dollars in thousands) Nine Months Three Months Three Months Nine Months Three Months Ended Ended Ended Ended Ended September 30, September 30, June 30, September 30, September 30, 2026 2026 2026 2025 2025 Net interest income $ 79,402 $ 28,009 $ 26,839 $ 57,380 $ 20,458 Tax effect at 21% 574 199 182 589 192 Net interest income on a fully taxable equivalent basis $ 79,976 $ 28,208 $ 27,021 $ 57,969 $ 20,650 Average Tangible Shareholders' Equity (Dollars in thousands) Nine Months Three Months Three Months Nine Months Three Months
Page 13
Ended Ended Ended Ended Ended September 30, September 30, June 30, September 30, September 30, 2026 2026 2026 2025 2025 Average shareholders' equity $ 289,921 $ 291,624 $ 288,334 $ 222,791 $ 226,733 Average intangible assets (39,466) (39,455) (39,609) (29,394) (29,380) Average tangible shareholders' equity $ 250,455 $ 252,169 $ 248,725 $ 193,397 $ 197,353