# NORWOOD FINANCIAL CORP (NWFL)

Informational only - not investment advice.

CIK: 0001013272
SIC: 6022 State Commercial Banks
SIC breadcrumb: [Finance, Insurance, And Real Estate](/division/H/) > [Depository Institutions](/major-group/60/) > [SIC 6022 State Commercial Banks](/industry/6022/)
Latest 10-K filed: 2026-03-13
SEC page: https://www.sec.gov/edgar/browse/?CIK=1013272
Filing source: https://www.sec.gov/Archives/edgar/data/1013272/000101327226000003/nwfl-20251231x10k.htm

## At a glance

FY2025 · period end 2025-12-31 · filed 2026-03-13 · accession 0001013272-26-000003 · source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001013272.json

| Metric | Value | FY | Provenance |
| --- | ---: | ---: | --- |
| Revenue | 126,528,000 USD | 2025 | verified |
| Net income | 27,755,000 USD | 2025 | verified |
| Assets | 2,424,842,000 USD | 2025 | verified |
| Free cash flow | 29,247,000 USD | 2025 | computed |
| Net margin | 21.94% | 2025 | computed |
| Revenue YoY | +12.39% | 2025 | computed |
| ROE | 11.46% | 2025 | computed |

Computed values are grepcent-computed from the verified facts above and may differ from ratios the company itself reports. Free cash flow = operating cash flow − capital expenditures. Net margin = net income ÷ revenue. Revenue YoY = FY2025 revenue ÷ FY2024 revenue − 1 (consecutive fiscal years only). ROE = net income ÷ period-end stockholders' equity.

No market price, no rating, no forecast on this site. Not investment advice.

### Peer percentile fingerprint

| Ratio | NWFL | Peer median | Percentile | N |
| --- | ---: | ---: | ---: | ---: |
| Net margin | 21.9% | 21.9% | 51 | 149 |
| Revenue growth | 12.4% | 6.0% | 80 | 148 |
| FCF margin | 23.1% | 23.8% | 45 | 133 |
| ROE | 11.5% | 9.6% | 69 | 149 |
| ROA | 1.1% | 1.1% | 56 | 149 |
| Liabilities / equity | 9.01 | 8.04 | 72 | 149 |

Percentile = share of the N covered peers reporting that ratio whose value is lower (ties counted half); computed among grepcent-covered companies in SIC industry 6022 State Commercial Banks, not the whole market. A higher percentile means a higher value of the ratio, not a better company. Ratios with fewer than 8 reporting peers are omitted. Latest reported values per company; fiscal periods may differ. Descriptive arithmetic - not a score, rating, or ranking.

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 126528000 | USD | 2025 | 2026-03-13 |
| Net income | 27755000 | USD | 2025 | 2026-03-13 |
| Assets | 2424842000 | USD | 2025 | 2026-03-13 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-13. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001013272.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

| Metric | 2014 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue |  | 32,244,000 | 38,988,000 | 42,496,000 | 47,284,000 | 58,455,000 | 71,070,000 | 75,666,000 | 95,540,000 | 112,580,000 | 126,528,000 |
| Net income |  | 6,711,000 | 8,198,000 | 13,651,000 | 14,215,000 | 15,080,000 | 24,915,000 | 29,233,000 | 16,759,000 | -160,000 | 27,755,000 |
| Diluted EPS |  | 1.15 | 1.31 | 2.17 | 2.25 | 2.09 | 3.04 | 3.58 | 2.07 | -0.02 | 3.01 |
| Operating cash flow | 10,531,000 |  | 16,051,000 | 17,298,000 | 18,438,000 | 13,797,000 | 29,198,000 | 30,734,000 | 29,824,000 | 22,807,000 | 33,967,000 |
| Capital expenditures |  | 511,000 | 1,633,000 | 873,000 | 1,623,000 | 749,000 | 1,258,000 | 2,153,000 | 1,412,000 | 3,127,000 | 4,720,000 |
| Dividends paid |  | 4,714,000 | 5,386,000 | 5,509,000 | 6,041,000 | 7,263,000 | 8,539,000 | 9,158,000 | 9,417,000 | 9,719,000 | 11,489,000 |
| Share buybacks |  | 447,000 | 1,587,000 | 194,000 | 428,000 | 108,000 | 1,440,000 | 2,515,000 | 3,100,000 | 703,000 | 361,000 |
| Assets |  | 1,111,183,000 | 1,132,916,000 | 1,184,559,000 | 1,230,610,000 | 1,851,864,000 | 2,068,504,000 | 2,047,070,000 | 2,201,079,000 | 2,317,462,000 | 2,424,842,000 |
| Liabilities |  | 1,000,104,000 | 1,017,177,000 | 1,062,274,000 | 1,093,182,000 | 1,657,079,000 | 1,863,242,000 | 1,879,985,000 | 2,020,009,000 | 2,103,954,000 | 2,182,685,000 |
| Stockholders' equity |  | 111,079,000 | 115,739,000 | 122,285,000 | 137,428,000 | 194,785,000 | 205,262,000 | 167,085,000 | 181,070,000 | 213,508,000 | 242,157,000 |
| Free cash flow |  |  | 14,418,000 | 16,425,000 | 16,815,000 | 13,048,000 | 27,940,000 | 28,581,000 | 28,412,000 | 19,680,000 | 29,247,000 |

### Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

| Metric | 2014 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net margin |  | 20.81% | 21.03% | 32.12% | 30.06% | 25.80% | 35.06% | 38.63% | 17.54% | -0.14% | 21.94% |
| Return on equity |  | 6.04% | 7.08% | 11.16% | 10.34% | 7.74% | 12.14% | 17.50% | 9.26% | -0.07% | 11.46% |
| Return on assets |  | 0.60% | 0.72% | 1.15% | 1.16% | 0.81% | 1.20% | 1.43% | 0.76% | -0.01% | 1.14% |
| Liabilities / equity |  | 9.00 | 8.79 | 8.69 | 7.95 | 8.51 | 9.08 | 11.25 | 11.16 | 9.85 | 9.01 |

## As-reported value updates

No tracked differences above grepcent's stated thresholds and capped precision rule were found between the earliest XBRL-filed value and the value currently on file for the standardized annual metrics grepcent tracks.


## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-08-07. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001013272.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2022-Q3 | 2022-09-30 |  |  | 1.00 | reported discrete quarter |
| 2023-Q1 | 2023-03-31 |  |  | 0.71 | reported discrete quarter |
| 2023-Q2 | 2023-06-30 |  |  | 0.81 | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 24,508,000 | 4,119,000 | 0.51 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 26,085,000 | 354,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2024-03-31 | 26,938,000 | 4,433,000 | 0.55 | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 27,671,000 | 4,213,000 | 0.52 | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 28,487,000 | 3,844,000 | 0.48 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 29,485,000 | -12,651,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2025-03-31 | 30,084,000 | 5,773,000 | 0.63 | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 31,206,000 | 6,205,000 | 0.67 | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 32,192,000 | 8,334,000 | 0.89 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 33,046,000 | 7,442,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2026-03-31 | 38,383,000 | 3,730,000 | 0.35 | reported discrete quarter |
| 2026-Q2 | 2026-06-30 | 40,457,000 | 9,328,000 | 0.86 | reported discrete quarter |

## Filed narrative (10-K & 10-Q)

## Business

Verbatim Item 1 Business section from NWFL's latest 10-K: [/company/NWFL/business/](/company/NWFL/business/).

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1013272/000101327226000016/nwfl-20260630x10q.htm

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary.
Confidence: high
Filing date: 2026-08-07
Report date: 2026-06-30

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This Quarterly Report on Form 10-Q may include certain forward-looking statements based on current management expectations. Such forward-looking statements may be identified by reference to a future period or periods or by the use of forward-looking terminology, such as “may”, “will”, “believe”, “expect”, “estimate”, “anticipate”, “continue”, or similar terms or variations on those terms, or the negative of those terms. The actual results of the Company could differ materially from those management expectations. This includes statements regarding general economic conditions, legislative and regulatory changes, monetary, trade, tariff and fiscal policies of the federal government, changes in tax policies, rates and regulations of federal, state and local tax authorities and failure to integrate or profitably operate acquired businesses. Additional potential factors include changes in interest rates, the rate of inflation, deposit flows, cost of funds, demand for loan products and financial services, competition and changes in the quality or composition of loan and investment portfolios of the Company. Other factors that could cause future results to vary from current management expectations include changes in accounting principles, policies or guidelines, and other economic, competitive, governmental and technological factors affecting the Company’s operations, markets, products, services and prices, instability in the banking system, and the potential for a recessionary economy. Further description of the risks and uncertainties to the business are included in the Company’s other filings with the Securities and Exchange Commission.

The majority of the assets and liabilities of a financial institution are monetary in nature, and therefore, differ greatly from most commercial and industrial companies that have significant investments in fixed assets or inventories. However, inflation does have an impact on the Company, particularly with respect to the growth of total assets and noninterest expenses, which tend to rise during periods of general inflation. Risks also exist due to supply and demand imbalances, employment shortages, the interest rate environment, and geopolitical tensions. It is reasonably foreseeable that estimates made in the financial statements could be materially and adversely impacted in the near term as a result of these conditions, including expected credit losses on loans and the fair value of financial instruments that are carried at fair value.

Our operations are subject to risks and uncertainties surrounding our exposure to changes in the interest rate environment. Earnings and liquidity depend to a great extent on our interest rates. Interest rates are highly sensitive to many factors beyond our control, including competition, general economic conditions, geopolitical tensions and conflicts and monetary and fiscal policies of various governmental and regulatory authorities, including the Federal Reserve. Conditions such as inflation, deflation, recession, unemployment and other factors beyond our control may also affect interest rates. The nature and timing of any changes in interest rates or general economic conditions and their effect on us cannot be controlled and are difficult to predict. If the rate of interest we pay on our interest-bearing liabilities increases more than the rate of interest we receive on our interest-earning assets, our net interest income, and therefore our earnings, could contract and be materially adversely affected. Our earnings could also be materially adversely affected if the rates on interest-earning assets fall more quickly than those on our interest-bearing liabilities. Changes in interest rates could also create competitive pressures, which could impact our liquidity position. See “Item 3. Quantitative and Qualitative Disclosures about Market Risk – Asset/Liability Management.”

Except as required by applicable law or regulation, the Company does not undertake, and specifically disclaims any obligation, to release publicly the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of the statements or to reflect the occurrence of anticipated or unanticipated events.

Critical Accounting Policies

Note 2 to the Company’s consolidated financial statements for the fiscal year ended December 31, 2025 (included in Item 8 of the Annual Report on Form 10-K for the fiscal year ended December 31, 2025) lists significant accounting policies used in the development and presentation of its financial statements. This discussion and analysis, the significant accounting policies, and other financial statement disclosures identify and address key variables and other qualitative and quantitative factors that are necessary for an understanding and evaluation of the Company and its results of operations.

Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for credit losses, the determination of goodwill impairment, and business combination accounting. Please refer to the discussion of the allowance for credit losses calculation under “Changes in Financial Condition - Loans” below.

In connection with the acquisition of North Penn in 2011, we recorded goodwill in the amount of $9.7 million, representing the excess of amounts paid over the fair value of the net assets of the institution acquired at the date of acquisition. In connection with the acquisition of Delaware in 2016, we recorded goodwill in the amount of $1.6 million, representing the excess of amounts paid over the fair value of the net assets of the institution acquired at the date of acquisition. In connection with the acquisition of UpState New York

39

Bancorp, Inc. in July 2020, we recorded goodwill in the amount of $17.9 million, representing the excess of amounts paid over the fair value of the net assets of the institution acquired at the date of acquisition. In connection with the acquisition of PB Bankshares, we recorded goodwill in the amount of $7.1 million, representing the excess of amounts paid over the fair value of the net assets of the institution acquired at the date of acquisition. Goodwill is tested annually and deemed impaired when the carrying value of goodwill exceeds its implied fair value.

Changes in Financial Condition

General

Total assets as of June 30, 2026, were $2.908 billion compared to $2.425 billion as of December 31, 2025. The increase was due primarily to a $409.4 million increase in outstanding loans receivable, which was primarily a result of the PB Bankshares acquisition.

Other Assets

Other assets as of June 30, 2026, were $13.6 million compared to $8.4 million as of December 31, 2025. The increase was the result of $3.6 million which consisted of two investment securities that were called/matured as of June 30, 2026, and final payment was not received until early in the next quarter.

Securities

The fair value of securities available for sale as of June 30, 2026 was $439.0 million compared to $408.8 million as of December 31, 2025. The increase of $30.2 million was due primarily to the acquired portfolio, as well as investment purchases during 2026.

The Company has securities in an unrealized loss position. In Management’s opinion the unrealized losses reflect changes in interest rates subsequent to the acquisition of specific securities. The increase in the unrealized loss is due to the overall increase in interest rates. The Company did not recognize any credit losses on these available for sale debt securities for the six months ended June 30, 2026. The Company does not intend to sell the securities and it is more likely than not that it will not have to sell the securities before recovery of its cost basis.

Loans

Loans receivable totaled $2.263 billion at June 30, 2026 compared to $1.854 billion as of December 31, 2025, due primarily to the acquired portfolio from Presence Bank. The $409.4 million increase in loans receivable during the six months ended June 30, 2026, was due primarily to a $273.4 million increase in commercial real estate loans, a $58.9 million increase in residential real estate loans, a $45.1 million increase in construction loans, and an increase of $32.4 million in all other portfolios, net.

The allowance for credit losses totaled $25.6 million as of June 30, 2026, and represented 1.13% of total loans outstanding, compared to $19.9 million, or 1.07% of total loans outstanding, at December 31, 2025. The Company had net charge-offs for the six months ended June 30, 2026 of $1,869,000, compared to $699,000 in the corresponding period in 2025. The Company’s management assesses the adequacy of the allowance for credit losses on a quarterly basis. Based on management’s best judgement, the qualitative factors are applied to the final adjusted loss rate each quarter. Management considers the allowance for credit losses adequate at June 30, 2026 based on the Company’s criteria. However, there can be no assurance that the allowance for credit losses will be adequate to cover significant losses, if any, which might be incurred in the future.

As of June 30, 2026, non-performing loans totaled $27.4 million, or 1.21%, of total loans compared to $6.3 million, or 0.34%, of total loans at December 31, 2025. At June 30, 2026, non-performing assets totaled $28.1 million, or 0.97%, of total assets, compared to $7.1 million, or 0.29%, of total assets at December 31, 2025. The increase is due primarily to the addition of one large commercial real estate relationship being placed on non-accrual, following the borrower’s filing for chapter 11 bankruptcy in June 2026.

40

The following table sets forth information regarding non-performing loans and foreclosed real estate at the dates indicated:

[[GREPCENT_TABLE]]
[["(dollars in thousands)","June 30, 2026","","","December 31, 2025"],["Loans accounted for on a non-accrual basis:"],["Real Estate"],["Residential","$","1,409","","","$","919"],["Commercial","","22,645","","","","4,064"],["Agricultural","","1,530","","","","\u2014"],["Construction","","24","","","","34"],["Commercial loans","","122","","","","68"],["Other agricultural loans","","188","","","","\u2014"],["Consumer loans to individuals","","1,438","","","","1,131"],["Total non-accrual loans","","27,356","","","","6,216"],["Accruing loans which are contractually"],["past due 90 days or more","","\u2014","","","","123"],["Total non-performing loans","","27,356","","","","6,339"],["Foreclosed real estate","","771","","","","771"],["Total non-performing assets","$","28,127","","","$","7,110"],["Allowance for credit losses","$","25,632","","","$","19,882"],["Coverage of non-performing loans","","0.94","%","","","3.14","%"],["Non-performing loans to total loans","","1.21","%","","","0.34","%"],["Non-performing loans to total assets","","0.94","%","","","0.27","%"],["Non-performing assets to total assets","","0.97","%","","","0.29","%"]]
[[/GREPCENT_TABLE]]

Deposits

During the six-months ended June 30, 2026, total deposits increased $435.7 million due primarily to a $192.1 million increase in certificates of deposit, an $80.8 million increase in non interest-bearing demand deposits, and a $162.7 million increase in all other deposit categories. All increases were primarily due to the PB Bankshares acquisition.

The following table sets forth deposit balances as of the dates indicated:

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A (excerpt)

Latest 10-K Item 7 source: https://www.sec.gov/Archives/edgar/data/1013272/000101327226000003/nwfl-20251231x10k.htm
Complete FY 2025 MD&A: /company/NWFL/mda/fy2025/

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary.
Confidence: high
Filing date: 2026-03-13
Report date: 2025-12-31

Item 7. Management’s Discussion and Analysis of Financial Conditions and Results of Operations.

Introduction

This Management’s Discussion and Analysis and related financial data are presented to assist in the understanding and evaluation of the financial condition and results of operations for the Company and the Bank, as of December 31, 2025 and 2024, and for the years ended December 31, 2025 and 2024. This section should be read in conjunction with the consolidated financial statements and related footnotes.

RECENT TRANSACTIONS

During the year ended December 31, 2024, the Company’s financial condition and results of operations were significantly impacted by two transactions. On December 23, 2024, the Company completed the underwritten public offering and sale of 1,150,000 shares of its common stock at $26.00 per share, resulting in net proceeds to the Company of approximately $28 million (the “Offering”). Immediately subsequent to the Offering, the Company utilized a portion of the net proceeds from the Offering to reposition a substantial portion of the Company’s available-for-sale debt securities portfolio. The Company undertook the repositioning transactions with the objective of increasing the profitability of its investment portfolio, improving liquidity, strengthening its capital position and supporting future growth. Please see “Financial Condition—Securities” below for more information on the repositioning transactions.

Critical Accounting Policies

Note 2 to the Company’s consolidated financial statements lists significant accounting policies used in the development and presentation of its financial statements. This discussion and analysis, the significant accounting policies, and other financial statement disclosures identify and address key variables and other qualitative and quantitative factors that are necessary for an understanding and evaluation of the Company and its results of operations.

Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for credit losses and the determination of goodwill impairment. Please refer to the discussion of the allowance for credit losses calculation under “Allowance for Credit Losses and Non-performing Assets” in the “Financial Condition” section.

In connection with the acquisition of North Penn in 2011, we recorded goodwill in the amount of $9.7 million, representing the excess of amounts paid over the fair value of the net assets of the institution acquired at the date of acquisition. In connection with the acquisition of Delaware in 2016, we recorded goodwill in the amount of $1.6 million, representing the excess of amounts paid over the fair value of the net assets of the institution acquired at the date of acquisition. In connection with the acquisition of UpState in July 2020, we recorded goodwill in the amount of $17.9 million, representing the excess of amounts paid over the fair value of the net assets of the institution acquired at the date of acquisition. Goodwill is tested annually and deemed impaired when the carrying value of goodwill exceeds its implied fair value.

11

OVERVIEW

The following table provides an overview of selected financial data:

[[GREPCENT_TABLE]]
[["For the years ended December 31, (Dollars in thousands, except per share data)","2025","2024","2023"],["Net interest income","$78,324","$62,191","$62,067"],["Provision for credit losses","1,773","2,673","5,548"],["Other income before (losses) gains on sales of loans and investments","9,291","8,616","8,270"],["Net realized gains (losses) on sales of loans and securities","326","(19,767)","(146)"],["Other expenses","51,149","48,625","43,497"],["Income (loss) before income taxes","35,019","(258)","21,146"],["Income tax expense (benefit)","7,264","(98)","4,387"],["NET INCOME (LOSS)","27,755","(160)","16,759"],["Net income (loss) per share-Basic","$3.01","($0.02)","$2.08"],["-Diluted","$3.01","($0.02)","$2.07"],["Cash dividends paid","11,489","9,719","9,417"],["Dividend pay-out ratio","41.39%","-6074.38%","56.19%"],["Return on average assets","1.17%","-0.01%","0.79%"],["Return on average equity","12.22%","-0.09%","9.67%"],["BALANCES AT YEAR-END"],["Total assets","2,424,842","2,317,462","2,201,079"],["Loans receivable","1,853,422","1,713,638","1,603,618"],["Allowance for credit losses","19,882","19,843","18,968"],["Total deposits","2,078,645","1,859,163","1,795,159"],["Stockholders\u2019 equity","242,157","213,508","181,070"],["Trust assets under management","213,912","205,097","192,374"],["Book value per share","$26.06","$23.02","$22.33"],["Tier 1 Capital to risk-adjusted assets","12.37%","12.35%","11.99%"],["Total Capital to risk-adjusted assets","13.41%","13.45%","13.06%"],["Allowance for credit losses to total loans","1.07%","1.16%","1.18%"],["Non-performing assets to total assets","0.29%","0.34%","0.35%"]]
[[/GREPCENT_TABLE]]

FINANCIAL CONDITION

Total Assets

Total assets as of December 31, 2025 were $2.425 billion compared to $2.317 billion as of year-end 2024, an increase of $107.4 million. The increase in total assets was primarily attributable to a $139.8 million increase in loans receivable, offset by a $27.9 million decrease in cash and cash equivalents.

Loans Receivable

As of December 31, 2025, loans receivable totaled $1.853 billion compared to $1.714 billion as of year-end 2024, an increase of $139.8 million due primarily to a $42.6 million increase in consumer loans, an increase of $33.4 million in commercial real estate loans, and an increase of $32.4 million in construction loans.

The Bank’s loan products include loans for personal and business use. Personal lending includes mortgage lending to finance principal residences and, to a lesser extent, second home dwellings. The Bank’s loan products include fixed-rate mortgage products with terms up to 30 years which may be sold in the secondary market through the Federal National Mortgage Association (“Fannie Mae”) or the FHLB, or held in the Bank’s portfolio to the extent consistent with our asset/liability management strategies. Fixed-rate home equity loans are originated on terms up to 180 months. Home equity lines of credit tied to the prime rate are also offered. The Bank also offers indirect dealer financing of automobiles (new and used), boats, and recreational vehicles through a limited network of dealers in Northeast Pennsylvania and the Southern Tier of New York. At December 31, 2025, there were $328.0 million of indirect loans in the consumer loan portfolio.

Commercial loans and commercial mortgages are provided to local small and mid-sized businesses at a variety of terms and rate structures. Commercial lending activities include lines of credit, revolving credit, term loans, mortgages, various forms of secured

12

lending and a limited amount of letter of credit facilities. The rate structure may be fixed, immediately repricing tied to the prime rate or adjustable at set intervals. Also included in commercial loans are municipal finance lending in which the Bank has been active in recent years. Municipal lending includes both general obligations of local taxing authorities and revenue obligations of specific revenue producing projects such as sewer authorities and educational units. At December 31, 2025, the Bank had approximately $178.7 million in loans on commercial rentals, as well as $116.6 million of loans outstanding on residential rentals.

The Bank’s construction lending has primarily involved lending for commercial construction projects and for single-family residences. All loans for the construction of speculative sale homes have a loan-to-value ratio of not more than 80%. For both commercial and single-family projects, loan proceeds are disbursed during the construction phase according to a draw schedule based on the stage of completion. Construction projects are inspected by contracted inspectors or bank personnel. Construction loans are underwritten on the basis of the estimated value of the property as completed. For commercial projects, the Bank typically also provides the permanent financing after the construction period, as a commercial mortgage.

The Bank also, from time to time, originates loans secured by undeveloped land. Land loans granted to individuals have a term of up to five years. Land loans granted to developers may have an interest only period during development. The substantial majority of land loans have a loan-to-value ratio not exceeding 75%. The Bank has limited its exposure to land loans but may expand its lending on raw land, as market conditions allow, to qualified borrowers experienced in the development and sale of raw land.

Loans involving construction financing and loans on raw land have a higher level of risk than loans for the purchase of existing homes since collateral values, land values, development costs and construction costs can only be estimated at the time the loan is approved. The Bank has sought to minimize its risk in construction lending and in lending for the purchase of raw land by offering such financing primarily to builders and developers to whom the Bank has loaned funds in the past and to persons who have previous experience in such projects. The Bank also limits construction lending and loans on raw land to its market area, with which management is familiar.

Adjustable-rate loans decrease the risks associated with changes in interest rates by periodically repricing, but involve other risks because as interest rates increase, the underlying payments by the borrower increase, thus increasing the potential for payment default. At the same time, the marketability of the underlying collateral may be adversely affected by higher interest rates. Upward adjustment of the contractual interest rate may also be limited by the maximum periodic interest rate adjustment permitted in certain adjustable-rate mortgage loan documents, and, therefore is potentially limited in effectiveness during periods of rapidly rising interest rates. These risks have not had an adverse effect on the Bank.

Consumer lending, including indirect financing, provides benefits to the Bank’s asset/liability management program by reducing the Bank’s exposure to interest rate changes, due to their generally shorter terms. Such loans may entail additional credit risks compared to owner-occupied residential mortgage lending especially when unsecured or secured by collateral such as automobiles that depreciate rapidly.

Commercial lending including real-estate related loans entail significant additional risks when compared with residential real estate and consumer lending. For example, commercial loans typically involve larger loan balances to single borrowers or groups of related borrowers. The payment experience on such loans typically is dependent on the successful operation of the project and these risks can be significantly impacted by the cash flow of the borrowers and market conditions for commercial office, retail, and warehouse space. In periods of decreasing cash flows, the commercial borrower may permit a lapse in general maintenance of the property causing the value of the underlying collateral to deteriorate. The liquidation of commercial property is often more costly and may involve more time to sell than residential real estate. The Bank offsets such factors with requiring more owner equity, a lower loan to value ratio and by obtaining the personal guaranties of the principals. In addition, a majority of the Bank’s commercial real estate portfolio is owner-occupied property.

Commercial loans and leases are considered to have a higher degree of credit risk than secured real estate lending. The repayment of unsecured commercial business loans is wholly dependent on the success of the borrower’s business, while secured commercial business loans may be secured by collateral that may not be readily marketable in the event of default. Municip

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]

Read the full FY 2025 MD&A: /company/NWFL/mda/fy2025/
All MD&A years: /company/NWFL/mda/


## MD&A history

Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. Each year's full verbatim text is on its own sub-page.

- [FY 2024 MD&A](/company/NWFL/mda/fy2024/): filed 2025-03-14; accession 0001562762-25-000042 (https://www.sec.gov/Archives/edgar/data/1013272/000156276225000042/nwfl-20241231x10k.htm)
- [FY 2023 MD&A](/company/NWFL/mda/fy2023/): filed 2024-03-14; accession 0001562762-24-000057 (https://www.sec.gov/Archives/edgar/data/1013272/000156276224000057/nwfl-20231231x10k.htm)
- [FY 2022 MD&A](/company/NWFL/mda/fy2022/): filed 2023-03-17; accession 0001562762-23-000122 (https://www.sec.gov/Archives/edgar/data/1013272/000156276223000122/nwfl-20221231x10k.htm)
- [FY 2021 MD&A](/company/NWFL/mda/fy2021/): filed 2022-03-11; accession 0001562762-22-000120 (https://www.sec.gov/Archives/edgar/data/1013272/000156276222000120/nwfl-20211231x10k.htm)




## Macro cross-references

Indicators mapped to this company's SIC classification (industry 6022 State Commercial Banks) by grepcent's deterministic macro-sector crosswalk. A navigational mapping, not a statistical or causal claim.

- [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate
- [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit
- [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity

Macro-to-micro threads including this sector: [Interest rates & the Fed](/thread/interest-rates-fed/), [Money & trade](/thread/money-trade/), [Consumer & credit](/thread/consumer-credit/), [Government finances](/thread/government-finances/), [Sector employment](/thread/sector-employment/).

All macro indicators: /indicators/


## For LLMs & downloads

Markdown twin: /company/NWFL.md · JSON record: /company/NWFL.json · verified financials: /company/NWFL/financials.json / /company/NWFL/financials.csv · machine TOC for the whole site: /llms.txt