UNION BANKSHARES INC

Previous wording

The following discussion and analysis focuses on those factors that, in management's view, had a material effect on the financial position of the Company as of June 30, 2025 and December 31, 2024, and its results of operations for the three and six months ended June 30, 2025 and 2024. This discussion is being presented to provide a narrative explanation of the consolidated financial statements and should be read in conjunction with the consolidated financial statements and related notes and with other financial data appearing elsewhere in this filing and with the Company's 2024 Annual Report. In the opinion of the Company's management, the interim unaudited consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments and disclosures necessary to fairly present the Company's consolidated financial position and results of operations for the interim periods presented. Management is not aware of the occurrence of any events after June 30, 2025 which would materially affect the information presented.

Current wording

The following discussion and analysis focuses on those factors that, in management's view, had a material effect on the financial position of the Company as of September 30, 2025 and December 31, 2024, and its results of operations for the three and nine months ended September 30, 2025 and 2024. This discussion is being presented to provide a narrative explanation of the consolidated financial statements and should be read in conjunction with the consolidated financial statements and related notes and with other financial data appearing elsewhere in this filing and with the Company's 2024 Annual Report. In the opinion of the Company's management, the interim unaudited consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments and disclosures necessary to fairly present the Company's consolidated financial position and results of operations for the interim periods presented. Management is not aware of the occurrence of any events after September 30, 2025 which would materially affect the information presented.

Previous wording

Forward-looking statements are based on the current assumptions underlying the statements and other information with respect to the beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions of management and the financial condition, results of operations, future performance and business are only expectations of future results. Although the Company believes that the expectations reflected in the Company’s forward-looking statements are reasonable when made, the Company’s actual results could differ materially from those projected in the forward-looking statements as a result of, among other factors, changes in interest rates; competitive pressures from other financial institutions; general economic conditions on a national basis or in the local markets in which the Company operates; downgrades of U.S. government securities; eroding public confidence in the banking system; changes in consumer behavior due to changing political, business and economic conditions, including the impact of inflation, federal tariff and trade policies and legislative or regulatory initiatives; changes in the value of securities and other assets in the Company’s investment portfolio; increases in loan and lease default and charge-off rates; the adequacy of the ACL; decreases in deposit levels that necessitate increases in borrowing to fund loans and investments; operational risks to the Company and our vendors, including, but not limited to, cybersecurity incidents, fraud, natural disasters and future pandemics; changes in regulation, war, terrorism, civil unrest; changes in economic assumptions and adverse economic developments; the risk that goodwill and intangibles recorded in the Company’s financial statements will become impaired; changes in assumptions used in making such forward-looking statements; and the other risks and uncertainties detailed in the Company’s 2024 Annual Report.

Current wording

Forward-looking statements are based on the current assumptions underlying the statements and other information with respect to the beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions of management and the financial condition, results of operations, future performance and business are only expectations of future results. Although the Company believes that the expectations reflected in the Company’s forward-looking statements are reasonable when made, the Company’s actual results could differ materially from those projected in the forward-looking statements as a result of, among other factors, changes in interest rates; competitive pressures from other financial institutions; general economic conditions on a national basis or in the local markets in which the Company operates; downgrades of U.S. government securities; eroding public confidence in the banking system; changes in consumer behavior due to changing political, business and economic conditions, including the impact of inflation, federal tariff and trade policies, legislative or regulatory initiatives and the impact of the federal government shutdown; changes in the value of securities and other assets in the Company’s investment portfolio; increases in loan and lease default and charge-off rates; the adequacy of the ACL; decreases in deposit levels that necessitate increases in borrowing to fund loans and investments; operational risks to the Company and our vendors, including, but not limited to, cybersecurity incidents, fraud, natural disasters and future pandemics; changes in regulation, war, terrorism, civil unrest; changes in economic assumptions and adverse economic developments; the risk that goodwill and intangibles recorded in the Company’s financial statements will become impaired; changes in assumptions used in making such forward-looking statements; and the other risks and uncertainties detailed in the Company’s 2024 Annual Report.

Previous wording

Under SEC Regulation G, public companies making disclosures containing financial measures that are not in accordance with GAAP must also disclose, along with each non-GAAP financial measure, certain additional information, including a reconciliation of the non-GAAP financial measure to the closest comparable GAAP financial measure, as well as a statement of

Current wording

Under SEC Regulation G, public companies making disclosures containing financial measures that are not in accordance with GAAP must also disclose, along with each non-GAAP financial measure, certain additional information, including a reconciliation of the non-GAAP financial measure to the closest comparable GAAP financial measure, as well as a statement of the company’s reasons for utilizing the non-GAAP financial measure. The SEC has exempted from the definition of non-GAAP

Previous wording

Union Bankshares, Inc. Page 26 the company’s reasons for utilizing the non-GAAP financial measure. The SEC has exempted from the definition of non-GAAP financial measures certain commonly used financial measures that are not based on GAAP. However, two non-GAAP financial measures commonly used by financial institutions, namely tax-equivalent net interest income and tax-equivalent net interest margin (as presented in the tables in the section labeled Yields Earned and Rates Paid), have not been specifically exempted by the SEC, and may therefore constitute non-GAAP financial measures under Regulation G. We are unable to state with certainty whether the SEC would regard those measures as subject to Regulation G. Management believes that these non-GAAP financial measures are useful in evaluating the Company’s financial performance and facilitate comparisons with the performance of other financial institutions. However, that information should be considered supplemental in nature and not as a substitute for related financial information prepared in accordance with GAAP.

Current wording

Union Bankshares, Inc. Page 28 financial measures certain commonly used financial measures that are not based on GAAP. However, two non-GAAP financial measures commonly used by financial institutions, namely tax equivalent net interest income and tax equivalent net interest margin (as presented in the tables in the section labeled Yields Earned and Rates Paid), have not been specifically exempted by the SEC, and may therefore constitute non-GAAP financial measures under Regulation G. We are unable to state with certainty whether the SEC would regard those measures as subject to Regulation G. Management believes that these non-GAAP financial measures are useful in evaluating the Company’s financial performance and facilitate comparisons with the performance of other financial institutions. However, that information should be considered supplemental in nature and not as a substitute for related financial information prepared in accordance with GAAP.

Previous wording

The financial trends for the three and six months ended June 30, 2025 indicate a positive trajectory for the Company. Net interest income, the largest component of net income, saw an increase due to higher interest earned on average earning assets and an increase in average loan volume. Interest expense also rose, primarily driven by higher rates on customer deposits and increased utilization of wholesale funding. The net interest spread and net interest margin both improved, reflecting the overall positive impact of these changes. Additionally, noninterest income experienced growth in wealth management income and net gains on sales of loans held for sale, although this was partially offset by decreases in service fees and income from company-owned life insurance. Noninterest expenses increased, particularly in salaries, wages, and employee benefits, due to annual salary adjustments and higher medical and dental plan premiums. Overall, the Company's financial performance showed robust growth and improved profitability. For further discussion see Results of Operations on page 28.

Current wording

The financial trends for the three and nine months ended September 30, 2025 indicate a positive trajectory for the Company. Net interest income, the largest component of net income, saw an increase due to higher interest earned on average earning assets and an increase in average loan volume. Interest expense also rose, primarily driven by higher rates on customer deposits and increased utilization of wholesale funding. The net interest spread and net interest margin both improved, reflecting the overall positive impact of these changes. In September 2025, the Federal Reserve reduced short-term interest rates by 25 bps; however, there was minimal impact on third quarter financial results from this rate reduction. Noninterest income experienced growth in wealth management income and net gains on sales of loans held for sale, partially offset by decreases in service fees. The increase in noninterest income between both the three and nine month comparison periods of 2025 and 2024 resulted primarily from the balance sheet repositioning in August, 2024 involving the sale of lower-yielding AFS debt securities with a book value of $38.5 million, resulting in a pre-tax realized loss on the sale of $1.3 million that did not recur in 2025. Noninterest expenses increased, particularly in salaries, wages, and employee benefits, due to annual salary adjustments, higher medical and dental plan premiums, and an increase in the number of full time employees. Overall, the Company's financial performance showed robust growth and improved profitability. For further discussion see Results of Operations on page 30.

Previous wording

Consolidated net income increased $376 thousand, or 18.6%, to $2.4 million for the second quarter of 2025 compared to $2.0 million for the second quarter of 2024. The increase in net income was due to the combined effects of a $962 thousand increase in net interest income and a decrease of $167 thousand in credit loss expense, partially offset by increases of $706 thousand in noninterest expenses and $41 thousand in income tax expense, and a decrease of $6 thousand in noninterest income.

Current wording

Consolidated net income increased $2.1 million, or 159.5%, to $3.4 million for the third quarter of 2025 compared to $1.3 million for the third quarter of 2024. The increase in net income was due to the combined effects of the non-reccurrence of the $1.3 million loss on sales of AFS debt securities discussed above, increases in net interest income of $1.7 million, and noninterest income of $452 thousand and a decrease of $112 thousand in credit loss expense, partially offset by increases of $934 thousand in noninterest expenses and $537 thousand in income tax expense.

Previous wording

Consolidated net income increased $460 thousand, or 10.4%, to $4.9 million for the six months ended June 30, 2025 compared to $4.4 million for the six months ended June 30, 2024. This increase was due to an increase in net interest income of $2.2 million, partially offset by increases in noninterest expenses of $1.3 million, credit loss expense of $298 thousand and income tax expense of $26 thousand, and a decrease of $133 thousand in noninterest income.

Current wording

Consolidated net income increased $2.6 million, or 44.7%, to $8.3 million for the nine months ended September 30, 2025 compared to $5.8 million for the nine months ended September 30, 2024. This increase was due to the non-reccurrence of the $1.3 million loss on sales of AFS debt securities discussed above, increases in net interest income of $4.0 million, and noninterest income of $319 thousand, partially offset by increases in noninterest expenses of $2.2 million, credit loss expense of $186 thousand and income tax expense of $563 thousand.

Previous wording

At June 30, 2025, the Company had total consolidated assets of $1.48 billion, including gross loans and loans held for sale (total loans) of $1.11 billion, deposits of $1.10 billion, borrowed funds of $270.7 million, subordinated notes of $16.3 million and stockholders' equity of $71.3 million.

Current wording

At September 30, 2025, the Company had total consolidated assets of $1.57 billion, including gross loans and loans held for sale (total loans) of $1.18 billion, deposits of $1.19 billion, borrowed funds of $270.8 million, subordinated notes of $16.3 million and stockholders' equity of $77.7 million.

Previous wording

On May 20, 2025, the Company and Union entered into an Equity Distribution Agreement with Piper Sandler & Co., as sales agent, pursuant to which the Company may sell from time to time shares of the Company's common stock, par value $2.00, having an aggregate gross sale price of up to $40,000,000. Sales of common stock under the Equity Distribution Agreement may be made in any transactions that are deemed to be "at-the-market offerings" as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended (the "Securities Act") or, subject to the Company's consent, in privately negotiated transactions. The shares offered and sold in the offering have been registered by the Company under the Securities Act. During the three and six months ended June 30, 2025, the Company issued 8,437 shares for aggregate gross sale proceeds of $280

Current wording

Union Bankshares, Inc. Page 29 may be made in any transactions that are deemed to be "at-the-market offerings" as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended (the "Securities Act") or, subject to the Company's consent, in privately negotiated transactions. The shares offered and sold in the offering have been registered by the Company under the Securities Act. During the three and nine months ended September 30, 2025, respectively, the Company issued 30,397 and 38,834 shares for aggregate gross sale proceeds of $802 thousand and $1.1 million, at an average gross sale price of $26.39 and $27.86 per share, which yielded net proceeds to the Company of $749 thousand and $801 thousand after issuance costs, including sales commissions equal to 3% of gross sale proceeds. As of September 30, 2025, approximately $38.9 million remains available for issuance under the offering.

Previous wording

The current macroeconomic and geopolitical environment is subject to a number of uncertainties, including geopolitical conflicts, tariffs or changes in trade policies, capital markets volatility, and inflation. These and other factors may contribute to slower or negative economic growth and a challenging business environment for our customers. While we remain confident in the resilience and strength of our business and financial model, the current macroeconomic and geopolitical environment could negatively impact our financial condition and results of operations. For more information about these risks, please see “Part I, Item 1A. Risk Factors” in our 2024 Annual Report.

Current wording

The current macroeconomic and geopolitical environment is subject to a number of uncertainties, including geopolitical conflicts, tariffs or changes in trade policies, the impact of federal government shutdowns, capital markets volatility, and inflation. These and other factors may contribute to slower or negative economic growth and a challenging business environment for our customers. While we remain confident in the resilience and strength of our business and financial model, the current macroeconomic and geopolitical environment could negatively impact our financial condition and results of operations. For more information about risks the Company faces, please see “Part I, Item 1A. Risk Factors” in our 2024 Annual Report.

Previous wording

The following unaudited per share information and key ratios depict several measurements of performance or financial condition at or for the three and six months ended June 30, 2025 and 2024:

Current wording

The following unaudited per share information and key ratios depict several measurements of performance or financial condition at or for the three and nine months ended September 30, 2025 and 2024:

Previous wording

(2)The ratio of tax equivalent net interest income to average earning assets. See pages 30 and 31 for more information.

Current wording

(2)The ratio of tax equivalent net interest income to average earning assets. See pages 32 and 33 for more information.

Previous wording

(4)The difference between the average yield on earning assets and the average rate paid on interest bearing liabilities. See pages 30 and 31 for more information.

Current wording

(4)The difference between the average yield on earning assets and the average rate paid on interest bearing liabilities. See pages 32 and 33 for more information.

Previous wording

Net Interest Income. The largest component of the Company’s operating income is net interest income, which is the difference between interest and dividend income received from earning assets and interest expense paid on interest bearing liabilities. Net interest income is affected by various factors including, but not limited to, changes in interest rates, loan and deposit pricing strategies, funding strategies, the volume and mix of interest earning assets and interest bearing liabilities, and the level of nonperforming assets. Net interest margin is calculated as the net interest income on a fully tax equivalent basis as a percentage of average earning assets.

Current wording

Net Interest Income. The largest component of the Company’s operating income is net interest income, which is the difference between interest and dividend income received from earning assets and interest expense paid on interest bearing liabilities. Net interest income is affected by various factors including, but not limited to, changes in interest rates, loan and deposit pricing strategies, funding strategies, the volume and mix of interest earning assets and interest bearing liabilities, and the level of

Previous wording

Interest earned on average earning assets for the three months ended June 30, 2025 was $18.7 million compared to $16.6 million for the three months ended June 30, 2024, an increase of $2.2 million, or 13.1%. The average earning asset base

Current wording

Interest earned, on a fully tax equivalent basis, on average earning assets for the three months ended September 30, 2025 was $19.4 million compared to $17.4 million for the three months ended September 30, 2024, an increase of $2.0 million, or 11.5%. The average earning asset base increased $68.7 million between periods and the average yield on average earning assets increased 30 bps to 5.15% for the three months ended September 30, 2025 compared to 4.85% for the three months ended September 30, 2024.

Previous wording

The average yield on federal funds sold and overnight deposits decreased 62 bps and its related interest income also decreased by $16 thousand between the three month comparison periods due to a decrease in the average rate paid on the balances maintained in Union's master account at the FRB. Interest income on investment securities increased $119 thousand between comparison periods due to an increase in the average yield of 26 bps, despite a decrease in the average balance of the portfolio of $15.8 million. The improvement in the average yield and interest income resulted from a balance sheet repositioning completed in the third quarter of 2024, in which the Company sold lower-yielding AFS debt securities at a loss and used the proceeds to purchase higher yielding AFS debt securities and fund loans.

Current wording

Interest income, on a fully tax equivalent basis, on investment securities increased $152 thousand between the three month comparison periods due to an increase in the average yield of 27 bps, despite a decrease in the average balance of the portfolio of $7.0 million. The improvement in the average yield and interest income resulted from a balance sheet repositioning completed in the third quarter of 2024, in which the Company sold lower-yielding AFS debt securities at a loss and used the proceeds to purchase higher yielding AFS debt securities and fund loans.

Previous wording

Interest income on loans increased $2.0 million between the three month comparison periods due to an increase in the average volume of loans outstanding of $117.7 million and an increase of 14 bps in the average yield. Interest income on loans increased $140 thousand and $445 thousand during the three months ended June 30, 2025 and 2024, respectively, due to recovery of interest from the payoff of loans that previously had been in nonaccrual. This accounted for 5 bps and 17 bps of the increase in the average loan yield for the three months ended June 30, 2025 and 2024, respectively.

Current wording

Interest income, on a fully tax equivalent basis, on loans increased $1.8 million between the three month comparison periods due to an increase in the average volume of loans outstanding of $78.3 million and an increase of 22 bps in the average yield and due to recoveries of $421 thousand of interest from the payoff of loans that had previously been in nonaccrual, which accounted for 14 bps of the increase in the average loan yield between the three month comparison periods.

Previous wording

Average interest bearing liabilities increased $102.4 million between the three month comparison periods primarily due to increases in average deposits and borrowed funds. The average rate paid on interest bearing liabilities increased 18 bps to 2.67% for the second quarter of 2025 compared to 2.49% for the second quarter of 2024. Interest expense increased $1.2 million, to $8.3 million for the three months ended June 30, 2025 compared to $7.1 million for the three months ended June 30, 2024. Interest expense on borrowed funds increased $482 thousand, or 23.6%, between periods due to an increase of $59.6 million in the average volume, despite a decrease of 27 bps in the average rate paid.

Current wording

Average interest bearing liabilities increased $70.7 million between the three month comparison periods primarily due to increases in average deposits and borrowed funds. The average rate paid on interest bearing liabilities decreased 6 bps to 2.57% for the third quarter of 2025 compared to 2.63% for the third quarter of 2024. Interest expense increased $290 thousand, to $8.1 million for the three months ended September 30, 2025 compared to $7.8 million for the three months ended September 30, 2024. Interest expense on borrowed funds increased $180 thousand, or 6.8%, between periods due to an increase of $28.3 million in the average volume, despite a decrease of 17 bps in the average rate paid.

Previous wording

The net interest spread increased 8 bps to 2.43% for the second quarter of 2025, from 2.35% for the same period last year, reflecting the net effect of the 26 bps increase in the average yield earned on interest earning assets, which was partially offset by the 18 bps increase in the average rate paid on interest bearing liabilities between periods. The net interest margin increased 8 bps during the second quarter of 2025 compared to the same period last year as a result of the changes discussed above.

Current wording

The net interest spread increased 36 bps to 2.58% for the third quarter of 2025, from 2.22% for the same period last year, reflecting the net effect of the 30 bps increase in the average yield earned on interest earning assets and a decrease of 6 bps in the average rate paid on interest bearing liabilities between periods. The net interest margin increased 32 bps during the third quarter of 2025 compared to the same period last year as a result of the changes discussed above.

Previous wording

Net interest income was $20.7 million, on a fully tax equivalent basis for the six months ended June 30, 2025 compared to $18.5 million for the six months ended June 30, 2024, an increase of $2.2 million, or 12.0%. The average volume of earning assets increased $102.6 million and the average yield on earning assets increased 36 bps to 5.08% compared to 4.72% for the comparison period. Average loans increased $124.7 million, or 12.0%, to $1.2 billion for the six months ended June 30, 2025. The increase in average loan volume and the increase of 27 bps in the average loan yield resulted in a $4.7 million increase in interest income on loans between periods.

Current wording

Net interest income was $32.6 million, on a fully tax equivalent basis, for the nine months ended September 30, 2025 compared to $28.6 million for the nine months ended September 30, 2024, an increase of $4.1 million, or 14.2%. The average volume of earning assets increased $91.2 million and the average yield on earning assets increased 33 bps to 5.10% compared to 4.77% for the comparison period. Average loans increased $109.1 million, or 10.3%, to $1.2 billion for the nine months ended September 30, 2025. The increase in average loan volume and the increase of 25 bps in the average loan yield resulted in a $6.7 million increase in interest income on loans between periods. Interest income on loans increased $563 thousand and $445 thousand during the nine months ended September 30, 2025 and 2024, respectively, due to recoveries of interest from the payoff of loans that had previously been in nonaccrual. This resulted in a 6 bps increase in the average loan yield for the nine months ended September 30, 2025 and 2024.

Previous wording

The average balance of the investment portfolio decreased $14.0 million while the average yield on the portfolio increased by 29 bps, resulting in an increase in interest income on investment securities of $308 thousand between the six month comparison periods. As noted above, the increases in the average yield and interest income were a direct result of the balance sheet repositioning completed in the third quarter of 2024.

Current wording

Interest income on federal funds sold and overnight deposits decreased $277 thousand between the nine month comparison periods due to a decrease of 90 bps in the average yield and a decrease in the average balance maintained in Union's master account at the FRB. The average balance of the investment portfolio decreased $11.7 million while the average yield on the portfolio increased by 28 bps, resulting in an increase in interest income on investment securities of $415 thousand between the nine month comparison periods. As noted above, the increases in the average yield and interest income area attributable in part to the balance sheet repositioning completed in the third quarter of 2024.

Previous wording

The average balance of interest bearing liabilities increased $105.2 million between the six months comparison periods, primarily due to an increase in borrowed funds and interest bearing nonmaturity deposits. The average cost of funds increased 23 bps to 2.66% for the six months ended June 30, 2025 compared to 2.43% for the six months ended June 30, 2024 due to continued customer expectation of higher rates on deposit accounts along with utilization of wholesale funding at rates higher than deposit rates. Interest expense increased $2.6 million, to $16.3 million for the six months ended June 30, 2025, compared to $13.7 million for the six months ended June 30, 2024.

Current wording

The average balance of interest bearing liabilities increased $93.6 million between the nine month comparison periods, primarily due to an increase in borrowed funds and interest bearing deposits. The average cost of funds increased 13 bps to 2.63% for the nine months ended September 30, 2025 compared to 2.50% for the nine months ended September 30, 2024 due to continued customer expectation of higher rates on deposit accounts along with utilization of wholesale funding at rates higher than deposit rates. Interest expense increased $2.9 million, to $24.4 million for the nine months ended September 30, 2025, compared to $21.4 million for the nine months ended September 30, 2024.

Previous wording

The net interest spread increased 13 bps to 2.42% for the six months ended June 30, 2025, from 2.29% for the same period last year, reflecting the net effect of the 36 bps increase in the average yield earned on interest earning assets, which was only partially offset by the 23 bps increase in the average rate paid on interest bearing liabilities between periods. The net interest margin increased 14 bps for the six months ended June 30, 2025 compared to the same period last year as a result of the changes discussed above.

Current wording

The net interest spread increased 20 bps to 2.47% for the nine months ended September 30, 2025, from 2.27% for the same period last year, reflecting the net effect of the 33 bps increase in the average yield earned on interest earning assets, partially offset by the 13 bps increase in the average rate paid on interest bearing liabilities between periods. The net interest margin increased 20 bps for the nine months ended September 30, 2025 compared to the same period last year as a result of the changes discussed above.

Previous wording

Tax exempt interest income amounted to $1.7 million and $1.3 million for the three months ended June 30, 2025 and 2024, respectively, and $3.5 million and $2.6 million for the six months ended June 30, 2025 and 2024, respectively. The following table presents the effect of tax exempt income on the calculation of net interest income, using a marginal federal corporate income tax rate of 21% for the 2025 and 2024 three and six month comparison periods:

Current wording

Tax exempt interest income amounted to $1.6 million for the three months ended September 30, 2025 and 2024, and $5.0 million and $4.2 million for the nine months ended September 30, 2025 and 2024, respectively. The following table presents the effect of tax exempt income on the calculation of net interest income, using a marginal federal corporate income tax rate of 21% for the three and nine month comparison periods of 2025 and 2024:

Previous wording

Union Bankshares, Inc. Page 32 further details, see FINANCIAL CONDITION -Allowance for Credit Losses on Loans and Commitments, Contingent Liabilities, and Off-Balance-Sheet Arrangements below.

Current wording

Union Bankshares, Inc. Page 34 further details, see FINANCIAL CONDITION -Allowance for Credit Losses on Loans on page 40 and Commitments, Contingent Liabilities, and Off-Balance-Sheet Arrangements on page 43.

Previous wording

Credit loss expense (benefit) was made up of the following components for the following periods:

Current wording

Credit loss expense was made up of the following components for the following periods:

Previous wording

Noninterest Income. The following table sets forth the components of noninterest income and changes between the three and six month comparison periods of 2025 and 2024:

Current wording

Noninterest Income. The following table sets forth the components of noninterest income and changes between the three and nine month comparison periods of 2025 and 2024:

Previous wording

The significant changes in noninterest income for the three and six months ended June 30, 2025 compared to the same periods of 2024 are described below:

Current wording

The significant changes in noninterest income for the three and nine months ended September 30, 2025 compared to the same periods of 2024 are described below:

Previous wording

•Service fees. Service fees decreased $20 thousand and $25 thousand for the three and six months ended June 30, 2025, respectively, primarily due to decreases in merchant program fees, ATM and debit card network fees, and overdraft fees, partially offset by an increase in loan servicing fees.

Current wording

•Service fees. Service fees decreased $62 thousand and $87 thousand for the three and nine months ended September 30, 2025, respectively, primarily due to decreases in merchant program fees, ATM and debit card network fees, and overdraft fees, partially offset by an increase in loan servicing fees.

Previous wording

•Net gains on sales of loans held for sale. Residential mortgage loans totaling $31.0 million and $56.8 million were sold during the three and six months ended June 30, 2025, respectively, compared to sales of $19.3 million and $41.0 million during the same periods in 2024, respectively. The increases of $139 thousand and $241 thousand in net gains on sales of loans for the three and six month comparison periods, respectively, reflect the higher sales volume and higher premiums obtained on sales in 2025.

Current wording

•Net gains on sales of loans held for sale. Residential mortgage loans totaling $46.0 million and $102.8 million were sold during the three and nine months ended September 30, 2025, respectively, compared to sales of $35.2 million and $76.1 million during the same periods in 2024, respectively. The increases of $160 thousand and $401 thousand in net gains on sales of loans for the three and nine month comparison periods, respectively, reflect the higher sales volume and higher premiums obtained on sales in 2025.

Previous wording

•Income from Company-owned life insurance. Death benefit proceeds of $235 thousand were received in the second quarter of 2024 that were not received during the same period in 2025.

Current wording

•Income from Company-owned life insurance. Death benefit proceeds of $197 thousand were received during the three and nine months ended September 30, 2025 compared to death benefit proceeds of $235 thousand that were received in the second quarter of 2024.

Previous wording

•Amortization of MSRs, net. Income from MSRs is derived from servicing rights acquired through the sale of loans on which servicing is retained. Capitalized servicing rights are initially recorded at fair value and amortized in proportion to, and over the period of, the estimated future servicing period of the underlying loans. The amortization of MSRs exceeded new capitalized MSRs during both comparison periods, which resulted in net expense $7 thousand and $23 thousand for the three and six months ended June 30, 2025, respectively, and $62 thousand and $102 thousand for the three and six months ended June 30, 2024, respectively.

Current wording

•Income from MSRs, net. Income from MSRs is derived from servicing rights acquired through the sale of loans on which servicing is retained. Capitalized servicing rights are initially recorded at fair value and amortized in proportion to, and over the period of, the estimated future servicing period of the underlying loans. The increase in the volume of residential loan sales discussed above resulted in new capitalized MSRs that exceeded the amortization of MSRs by $83 thousand for the three and nine months ended September 30, 2025. The amortization of MSRs exceeded the new capitalized MSRs for

Previous wording

•Other income. The Company received $117 thousand in prepayment penalties from the early payoff of loans during the first quarter of 2024 that were not received during the same period of 2025.

Current wording

•Other income. The Company received $117 thousand in prepayment penalties from the early payoff of loans during the first quarter of 2024 compared to $24 thousand of prepayment penalties received during the three and nine months ended September 30, 2025.

Previous wording

•Net gains on other investments. Participants in the 2020 Amended and Restated Nonqualified Excess Plan elect to defer receipt of current compensation from the Company or its subsidiary and select designated reference investments consisting of investment funds. The performance of those funds, over which the Company has no control, resulted in net gains of $119 thousand and $84 thousand for the three and six months ended June 30, 2025, respectively, and net gains of $33 thousand and $128 thousand for the three and six months ended June 30, 2024, respectively.

Current wording

•Net gains on other investments. Participants in the 2020 Amended and Restated Nonqualified Excess Plan elect to defer receipt of current compensation from the Company or its subsidiary and select designated reference investments consisting of investment funds. The performance of those funds, over which the Company has no control, resulted in net gains of $94 thousand and $178 thousand for the three and nine months ended September 30, 2025, respectively, and net gains of $83 thousand and $211 thousand for the three and nine months ended September 30, 2024, respectively.

Previous wording

Noninterest Expenses. The following table sets forth the components of noninterest expenses and changes between the three and six month comparison periods of 2025 and 2024:

Current wording

Noninterest Expenses. The following table sets forth the components of noninterest expenses and changes between the three and nine month comparison periods of 2025 and 2024:

Previous wording

The significant changes in noninterest expenses for the three and six months ended June 30, 2025 compared to the same periods in 2024 are described below:

Current wording

The significant changes in noninterest expenses for the three and nine months ended September 30, 2025 compared to the same periods in 2024 are described below:

Previous wording

•Salaries and wages. Salaries and wages increased $311 thousand and $669 thousand for the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024 primarily due to annual salary adjustments for the 2025 fiscal year, increases in adjustments and accruals for annual incentive plan payments, and the deferral of loan origination costs. In addition, the number of full time equivalent employees increased from 184 at June 30, 2024 to 193 as of June 30, 2025. Salaries and wages are reduced by deferred loan origination costs at the time of origination. Deferred loan origination costs reduced salaries and wages by $41 thousand for the three and six months ended June 30, 2025, compared to reductions of $105 thousand and $136 thousand for the three and six months ended June 30, 2024, respectively. The lower deferred loan origination costs for 2025 compared to 2024 is primarily attributable to loan origination levels.

Current wording

•Salaries and wages. Salaries and wages increased $421 thousand and $1.1 million for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024 primarily due to annual salary adjustments for the 2025 fiscal year, increases in adjustments and accruals for annual incentive plan payments, and the deferral of loan origination costs. In addition, the number of full time equivalent employees increased from 189 at September 30, 2024 to 201 as of September 30, 2025. Salaries and wages are reduced by deferred loan origination costs at the time of origination. Deferred loan origination costs had a minimal impact on salaries and wages for the three months ended September 30, 2025, and reduced salaries and wages by $23 thousand for the nine months ended September 30, 2025, compared to reductions of $62 thousand and $198 thousand for the three and nine months ended September 30, 2024, respectively. The lower deferred loan origination costs for 2025 compared to 2024 is primarily attributable to loan origination levels.

Previous wording

•Employee benefits. Employee benefit expense increased $340 thousand for the three months ended June 30, 2025 compared to the same period in 2024 primarily due to increases of $230 thousand in premium expense for the Company's medical and dental plans, $24 thousand in payroll taxes and $86 thousand in employee benefits related to the Company's deferred compensation plans. The increase of $432 thousand for the six months ended June 30, 2025 compared to the same period in 2024 was primarily due to increases of $343 thousand in premium expense for the Company's medical and dental plans, $61 thousand in payroll taxes and $79 thousand in 401k plan contribution expense. These increases were partially offset by a decrease of $51 thousand in employee benefit expense related to the Company's deferred compensation plans.

Current wording

•Employee benefits. Employee benefit expense decreased $116 thousand for the three months ended September 30, 2025 compared to the same period in 2024 primarily due to a decrease of $195 thousand in medical claims expense due to high-cost claimants reaching the stop loss limit, which reduced the claims required to be paid by the Company for the medical insurance plan. This decrease was partially offset by increases of $49 thousand in 401k plan contribution expense, $19 thousand in payroll taxes and $11 thousand in employee benefits related to the Company's deferred compensation plans. The increase of $316 thousand for the nine months ended September 30, 2025 compared to the same period in 2024 was primarily due to increases of $148 thousand in premium expense for the Company's medical and dental plans, $128

Previous wording

•Occupancy expense, net. The increase in occupancy expense for the six months ended June 30, 2025 is primarily due to increases in utilities and repair and maintenance expenses as a result of the winter conditions experienced during the first quarter of 2025 compared to 2024. In addition, real restate tax expense increased $30 thousand between the six month comparison periods due to rate increases in the towns with branch locations.

Current wording

•Occupancy expense, net. The increase in occupancy expense for the three and nine months ended September 30, 2025 are primarily due to increases in utilities, repairs and maintenance, and depreciation expenses related to projects completed during 2025 compared to 2024. In addition, real estate tax expense increased $31 thousand between the nine month comparison periods due to rate increases in the towns with branch locations.

Previous wording

•Equipment expense. Equipment expense increased between the three and six month comparison periods primarily due to an increase in software license and maintenance costs.

Current wording

•Equipment expense. Equipment expense increased between the three and nine month comparison periods primarily due to an increase in software license and maintenance costs.