NORWOOD
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FINANCIAL CORP.   717 Main Street o Honesdale, Pennsylvania 18431 o 570-253-1455

                             NORWOOD FINANCIAL CORP.
                               ANNOUNCED INCREASE
                                   IN DIVIDEND

HONESDALE - DECEMBER 17, 2004

     William W. Davis,  Jr.  President  and Chief  Executive  Officer of Norwood
Financial Corp (NWFL) and its subsidiary  Wayne Bank announced that the Board of
Directors  declared  a $.18 per  share  dividend  payable  February  1,  2005 to
shareholders of record January 14, 2005. The $.18 per share  represents $.01 per
share or 5.9%  increase  over the $.17 per share  dividend  paid on  November 1,
2004.  This is the  thirteenth  consecutive  year of dividend  increases for the
Company.

     Norwood Financial Corp, through its subsidiary,  Wayne Bank operates eleven
offices in  Northeastern  Pennsylvania.  At September 30, 2004,  the Company had
total assets of $398.6 million,  loans outstanding of $256.9 million,  and total
deposits of $317.9  million.  The Company's  stock is traded on the Nasdaq under
the symbol "NWFL".

CONTACT:   Lewis J. Critelli
           Executive Vice President and Chief Financial Officer
           NORWOOD FINANCIAL CORP
           (570) 253-1455