Norwood Financial (NWFL) investor relations material

Executive summary

• Achieved record net interest income and strong asset growth in Q1 2026, driven by the Presence Bank/PB Bankshares acquisition and improved margins.

• Integration of Presence Bank/PB Bankshares is progressing ahead of plan, with unified systems, expanded geographic reach, and strengthened leadership.

• Strategic priorities include integration, operational efficiency via AI, talent development, and shareholder value creation.

• Net income for Q1 2026 was $3.7 million, down from $5.8 million in Q1 2025, due to higher merger-related and operating expenses.

• Earnings per share were $0.35 (basic and diluted), compared to $0.63 in the prior year quarter.

Financial highlights

• Net interest income reached a record $24.6 million, up 38% year-over-year; net interest margin expanded by 38 basis points to 3.68%.

• Adjusted net income and EPS increased 35% and 14% year-over-year, respectively; adjusted pre-provision net revenue was $11.4 million.

• Total assets grew to $2.92 billion at March 31, 2026, from $2.43 billion at year-end 2025; loans receivable up 26.4% to $2.239 billion; deposits up 25.1% to $2.507 billion.

• Allowance for credit losses was $24.4 million, or 1.09% of loans; non-performing loans increased to $10.3 million (0.46% of loans).

• Tangible book value per share was $22.43 at Q1 2026, down from $22.90 at year-end 2025 due to acquisition and portfolio marks.

Outlook and guidance

• Management expects continued integration of PB Bankshares and ongoing focus on asset quality, cost control, and long-term value creation.

• Margin expected to expand by 3–5 basis points over the next couple quarters; yield accretion projected at $2.2 million for 2026 and $2 million for 2027.

• Fee income expected to grow, especially in brokerage, trust, mortgage, and treasury management in the second half.

• Interest rate environment and economic conditions remain key uncertainties impacting future results.

• Focus on growing asset base, increasing deposits, and pursuing strategic M&A.