NORWOOD FINANCIAL CORP.
                             -----------------------
                        ANNOUNCES 16.7% DIVIDEND INCREASE
                        ---------------------------------

HONESDALE - DECEMBER 15, 2005


         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 $.21 per share quarterly dividend payable February 1, 2006
to shareholders  of record January 13, 2006. The $.21 per share  represents $.03
per share or 16.7% increase over the $.18 per share dividend paid on November 1,
2005.

         Mr. Davis  commented,  "The Board is  extremely  pleased to provide our
shareholders  a 16.7%  increase in the  quarterly  dividend.  This  reflects the
Company's  strong earnings  performance  through the nine months ended September
30, 2005.  Earnings per share (fully diluted) increased 10.1% to $1.49 per share
in the 2005  period  compared to $1.35 in 2004.  This also marks the  fourteenth
consecutive year of dividend increases for the Company."

         Norwood  Financial Corp,  through its  subsidiary,  Wayne Bank operates
eleven  offices in  Northeastern  Pennsylvania.  As of September  30, 2005,  the
Company had total assets of $425.6 million, loans outstanding of $282.3 million,
and total  deposits  of $340.4  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