Norwood Financial Corp announces Second Quarter Financial Results

About this update from Norwood Financial Corp.

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 Year Linked Quarter Year-to-Date 3 Months Ended 3 Months Ended 6 Months Ended Jun-26 Jun-25 Change Mar-26 Change Jun-26 Jun-25 Change Net 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 bps Net interest margin (fte) 1   3.90%     3.43%   47 bps   3.68%   22 bps   3.79%     3.37%   42 bps Pre 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 Year Linked Quarter Year-to-Date 3 Months Ended 3 Months Ended 6 Months Ended Jun-26 Jun-25 Change Mar-26 Change Jun-26 Jun-25 Change Pre 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%   16bps Return 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, 2026 March 31, 2026 June 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 $ 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, 2026 June 30, 2025   Average   Average   Average   Average     Balance Interest Rate   Balance Interest Rate     (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 30 June 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 30 June 30 Three 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                                      

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