NORWOOD FINANCIAL CORP 8-K

What Happened
Norwood Financial Corp announced it completed its acquisition of PB Bankshares, Inc., effective January 5, 2026, under the July 7, 2025 Merger Agreement. As of September 30, 2025, PB Bankshares reported $456.4 million in total assets, $355.0 million in deposits and $51.3 million in shareholders’ equity. At closing, each PB Bankshares share was converted, at shareholder election, into either $19.75 in cash or 0.7850 Norwood common shares. Aggregate merger consideration is approximately $10.5 million in cash and ~1,670,000 Norwood shares. Presence Bank was merged into Wayne Bank (a Norwood subsidiary). The combined company will have roughly $2.9 billion in assets and 33 offices, expanding Norwood/Wayne Bank into Chester and Lancaster Counties, PA.

Key Details

• Effective date: January 5, 2026; Merger Agreement dated July 7, 2025.
• PB Bankshares (9/30/2025): $456.4M assets, $355.0M deposits, $51.3M equity.
• Consideration: $19.75 cash or 0.7850 Norwood share per PB Bankshares share; total ~ $10.5M cash and ~1,670,000 shares issued.
• Board and management changes: Joseph W. Carroll and Spencer J. Andress appointed to Norwood and Wayne Bank boards (terms ending 2028 and 2029); Janak M. Amin appointed Executive Vice President & Chief Operating Officer effective Jan 5, 2026.
• Executive compensation and agreements for Mr. Amin: three‑year employment agreement with $400,000 base salary, stay bonuses of $250,000 (6 months), $175,000 (1st anniversary), $115,000 (2nd anniversary), plus $26,000 on Dec 1, 2027; severance provisions (including change‑in‑control payment equal to two times base salary plus pro‑rata bonus); Wayne SERP providing $74,000/year for 10 years (payable in 120 monthly payments) upon retirement subject to vesting; non‑competition/ non‑solicit payment of $1,218,701 paid at closing and three‑year geographic restrictions.
• Financial statements and pro forma financial information related to the acquisition will be filed by amendment within statutory timing (no later than 71 days).

Why It Matters
This merger meaningfully increases Norwood’s scale—bringing combined assets to about $2.9 billion and expanding its branch footprint into new Pennsylvania counties—while adding deposit and lending relationships from PB Bankshares. The transaction also involves issuance of ~1.67 million shares and ~$10.5 million cash consideration, and creates new executive compensation and post‑employment obligations (stay bonuses, SERP and a $1.2187M non‑compete payment) that investors should factor into near‑term capital and expense considerations. Final financial statements and pro forma results, to be filed within 71 days, will provide more detail on the transaction’s accounting and impact.