MUNCY COLUMBIA FINANCIAL Corp
For the period ended Dec 31, 2025. Filed Mar 6, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 6, 2026
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-07.
0001839882-25-014475
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-06.
0001174947-26-000299
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 126 previous paragraphs and 124 current paragraphs.
71 unchanged; 41 reworded; 12 added; 13 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 24 previous and 41 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
Goodwill and Other Intangible Assets
Current report
Goodwill arises from business combinations and is determined as the excess of the fair value of the consideration transferred over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill is not amortized but is periodically evaluated for impairment. Impairment testing is performed using either a qualitative or quantitative approach. The Corporation has selected September 30 as the date to perform the annual goodwill impairment test. Additionally, a goodwill impairment evaluation is performed on an interim basis when events or circumstances indicate impairment potentially exists. Based on the annual goodwill impairment tests completed September 30, 2025 and 2024, no impairment was noted. No assurance can be given that future impairment tests will not result in a charge to earnings.
Current report
The Corporation’s other intangible assets consist primarily of core deposit intangibles. The calculation of core deposit intangibles are based on significant judgements. Core deposit intangibles are calculated using a discounted cash flow model based on various factors including discount rate, attrition rate, interest rate, cost of alternative funds and net maintenance costs. Core deposit intangibles are amortized over the expected life of each acquired core deposit type, discounted at a long-term market oriented after-tax rate of return. Core deposit intangibles are reviewed for impairment when indicators of impairment are present. Indicators of impairment may include significant runoff or attrition. Management is not aware of any indicators of impairment related to core deposit intangibles as of December 31, 2025 or 2024.
Current report
Cash and cash equivalents increased $31.2 million or 179.3% from $17.4 million at December 31, 2024 to $48.5 million at December 31, 2025. This increase is primarily related to increased correspondent bank balances resulting from cash flows from available-for-sale debt securities as well as strong deposit growth during the year ended December 31, 2025.
Current report
Available-for-sale debt securities increased $4.0 million to $327.2 million at December 31, 2025 from $323.2 million at December 31, 2024. The Corporation received proceeds from sales, paydowns, calls and maturities of available-for-sale debt securities of $94.0 million during the year ended December 31, 2025. Offsetting this activity were purchases of $84.6 million and an increase in fair value of available-for-sale debt securities of $12.5 million for year ended December 31, 2025.
Current report
The most significant changes in the allowance for credit losses on an individual segment basis from December 31, 2024 to December 31, 2025 include an increase in residential real estate loans from $1,850,000, or 18.8% of the total allowance, at December 31, 2024 to $2,556,000, or 25.7% of the total allowance, at December 31, 2025, as well as a decrease in commercial real estate loans from $6,869,000, or 69.7% of the total allowance, at December 31, 2024 to $6,148,000, or 61.7% of the total allowance, at December 31, 2025. The increase for residential real estate loans includes the impact of increases in non-accrual loans which impacted probability of default calculations and levels of individually evaluated loans and related individually evaluated allowance levels as well as changes in qualitative factors related to the nature of the loan portfolio, volume and severity of past due loans, loan grade migration, changes in lending staff, changes in lending policies and procedures and forecasted economic conditions. The decrease for commercial real estate loans includes the impact of lower individually evaluated allowances related to student housing loans due to a decrease in loan balances, an increase in the volume of collateral dependent loans with no allowance required due to higher overall nonperforming commercial real estate loan balances as well as a decrease in allowance levels for commercial construction loans due to decreases in volume and loss rates utilized. The impact of these items was partially offset by changes in qualitative factors consistent with residential real estate loans as noted above.
Current report
YEAR ENDED DECEMBER 31,
Current report
Provision for Credit Losses
Current report
A summary of the provision for credit losses for the years ended December 31, 2025 and 2024, is as follows:
Current report
For the year ended December 31, 2025, there was a provision for credit losses of $839,000, an increase of $2,000 in expense compared to a provision for credit losses of $837,000 for the year ended December 31, 2024. The provision for the year ended December 31, 2025 included expense related to loans receivable of $834,000 and expense related to off-balance sheet exposures of $5,000. The provision for the year ended December 31, 2024 included expense related to loans receivable of $847,000 and a credit related to off-balance sheet exposures of $10,000.
Current report
Total non-interest income was $10.4 million for each of the years ended December 31, 2025, and 2024. Service charges and fees increased $236,000 due primarily to higher overdraft fee income. Brokerage income and trust income increased $131,000 and $168,000, respectively, due primarily to higher assets under management. These changes were offset by realized losses on available-for-sale debt securities, net, which totaled $422,000 for 2025 compared to $85,000 for 2024. The increase in realized losses on available-for-sale debt securities, net, for 2025 was related to a strategic realignment of the investment portfolio to enhance net interest margin in future years. Additionally, other non-interest income decreased $294,000 due to one-time events in the first quarter 2024 including incentives received in conjunction with the launch of a debit card reissuance project as well as a governmental grant recorded in conjunction with the completion of a solar energy project.
Current report
Total non-interest expense increased $3.4 million or 8.9% from $37.7 million for the year ended December 31, 2024, to $41.0 million for the year ended December 31, 2025. Salaries and employee benefits expense of $21.7 million for the year ended December 31, 2025 increased $2.6 million from $19.2 million for the same period of 2024. The Corporation recorded one-time pretax expenses totaling $1.3 million in conjunction with the retirement of its Executive Chairman during the year ended December 31, 2025. Additionally, health insurance expenses associated with the Corporation’s partially self-funded health insurance plan were $704,000 higher in the year ended December 31, 2025 than the same period of 2024. In addition to the increase in salaries and employee benefits expense, Pennsylvania shares tax expense increased $298,000 or 31.7% due to increased capital levels, professional fees increased $417,000, due primarily to higher overall marketing and advertising costs as well as higher foreclosure and loan workout expenses. These increases were partially offset by decreases in merger-related expenses of $241,000 and amortization of intangibles of $179,000 due to lower core deposit intangible amortization in 2025.
Removed paragraphs (13)
Previous report
Business Combinations
Previous report
Business combinations are accounted for by applying the acquisition method. As of acquisition date, the identifiable assets acquired and liabilities assumed are measured at fair value and recognized separately from goodwill. Results of operations of the acquired entity are included in the consolidated statement of income from the date of acquisition. The calculation of intangible assets including core deposits and the fair value of loans are based on significant judgements. Core deposit intangibles are calculated using a discounted cash flow model based on various factors including discount rate, attrition rate, interest rate, cost of alternative funds and net maintenance costs. Loans acquired in connection with acquisitions are recorded at their acquisition-date fair value. Determining the fair value of the acquired loans involves estimating the principal and interest cash flows expected to be collected on the loans and discounting those cash flows at a market rate of interest. Management considers a number of factors in evaluating the acquisition-date fair value including the remaining life of the acquired loans, delinquency status, estimated prepayments, payment options and other loan features, internal risk grade, estimated value of the underlying collateral and interest rate environment.
Previous report
MERGER WITH MUNCY BANK FINANCIAL, INC.
Previous report
The Corporation’s merger with Muncy Bank Financial, Inc. (“MBF”) was completed November 11, 2023. MBF was a Pennsylvania corporation that conducted its business primarily through its wholly owned subsidiary The Muncy Bank & Trust Company, which operated from a main office in Muncy, Pennsylvania, and had nine additional branches throughout Northcentral Pennsylvania.
Previous report
At the effective time of the merger, MBF’s shareholders received a fixed exchange ratio of 0.9259 shares of the Corporation’s common stock for each MBF common share they owned, except to the extent of cash received for fractional shares at $41.47 per share. Total purchase consideration was $55,101,000, including common stock with a fair value of $55,092,000 and cash of $9,000 paid for fractional shares. Holders of MBF common stock prior to the consummation of the merger held approximately 41.7% of the Corporation’s common stock outstanding immediately following the merger.
Previous report
In connection with the acquisition, effective November 11, 2023, the Corporation recorded goodwill of $17.7 million and a core deposit intangible asset of $12.1 million. Assets acquired totaled $671.4 million, including gross loans valued at $504.1 million, available-for-sale debt securities valued at $93.0 million, bank-owned life insurance valued at $17.8 million and premises and equipment, net, valued at $14.9 million. Liabilities assumed totaled $634.0 million, including deposits valued at $521.3 million and borrowings valued at $105.5 million. The assets purchased and liabilities assumed in the acquisition were recorded at their preliminary estimated fair values at the time of closing and may be adjusted for up to one year subsequent to the acquisition.
Previous report
For the year ended December 31, 2024, the Corporation incurred pre-tax merger-related expenses related to the MBF transaction of $241,000 compared to $3,028,000, for the year ended December 31, 2023. Merger-related expenses include voluntary severance and similar expenses as well as expenses related to conversion of MBF’s core banking system into the Corporation’s core system and legal and other professional expenses.
Previous report
Available-for-sale debt securities decreased $90.1 million to $323.2 million at December 31, 2024 from $413.3 million at December 31, 2023. During the year ended December 31, 2024, the Corporation sold available-for-sale debt securities with a total market value of $51.7 million, the proceeds of which were primarily utilized to paydown short-term FHLB borrowings. Securities sold included $35.6 million of US government agency securities, $15.5 million of mortgaged-backed securities and $563,000 of collateralized mortgage obligations. In addition to the securities sold, the Corporation received proceeds from paydowns, calls and maturities of available-for-sale debt securities of $55.3 million during the year ended December 31, 2024. Partially offsetting these changes was an increase in fair value of available-for-sale debt securities of $1.4 million and purchases of $14.9 million for the year ended December 31, 2024.
Previous report
Restricted investment in bank stocks decreased $3.3 million to $7.1 million at December 31, 2024 from $10.4 million at December 31, 2023. This decrease is directly attributable to the decrease in required FHLB stock holdings due to the paydown in short and long-term FHLB borrowings.
Previous report
YEARS ENDED DECEMBER 31,
Previous report
Provision for Credit Losses - Loans
Previous report
Total non-interest income increased $3.3 million or 45.7% to $10.4 million for the year ended December 31, 2024, compared to $7.1 million for the year ended December 31, 2023. Service charges and fees increased $638,000 due to an increased number of accounts and increased transaction volumes due to the MBF merger. Interchange fees increased $801,000 or 43.6% due to an increase in the volume of transactions due to the MBF merger and continued increase in electronic payments. Earnings on bank-owned life insurance increased $425,000 or 84.5% from $503,000 to $928,000 due to an increase in cash surrender values related to the MBF merger. Other non-interest income increased $930,000 or 92.4% due primarily to incentives received in conjunction with the launch of a debit card reissuance project, a governmental grant recorded in conjunction with the completion of a solar energy project, increases in merchant services income and secondary market mortgage servicing fees.
Previous report
Total non-interest expense increased $13.6 million or 56.2% from $24.1 million for the year ended December 31, 2023, to $37.7 million for the year ended December 31, 2024. The MBF merger has contributed significantly to increases in all components of non-interest expense. Salaries and employee benefits increased $7.4 million, occupancy increased $1.1 million, Pennsylvania shares tax increased $576,000, data processing and telecommunications increased $2.0 million and other non-interest expense increased $1.6 million. All of these increases relate to the closing of the MBF merger on November 11, 2023. Merger-related expenses totaled $241,000 for the year ended December 31, 2024, compared to $3.0 million for the year ended December 31, 2023. Amortization of intangibles totaled $2.2 million for the year ended December 31, 2024, compared to $183,000 for the year ended December 31, 2023 with the increase being due primarily to amortization of the core deposit intangible related to the MBF merger.
Reworded paragraphs (41)
Previous wording
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Current wording
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Previous wording
The Corporation is in the business of providing customary retail, commercial banking and financial services to individuals, businesses and local governments through its 22 branch offices operated by Journey Bank, the Corporation’s wholly-owned subsidiary. The Corporation’s 22 branch offices are operated in Clinton, Columbia, Lycoming, Montour and Northumberland counties in central Pennsylvania.
Current wording
The Corporation is in the business of providing customary retail, commercial banking and financial services to individuals, businesses and local governments through its 22 branch offices operated by Journey Bank, the Corporation’s wholly-owned subsidiary. The Corporation’s 22 branch offices are operated in Clinton, Columbia, Lycoming, Montour and Northumberland counties in Northcentral Pennsylvania.
Previous wording
The following discussion and analysis should be read in conjunction with the detailed information and consolidated financial statements, including notes thereto, included elsewhere in this report. Our consolidated financial condition and results of operations are essentially those of our subsidiary, the Bank. Therefore, the analysis that follows is directed to the performance of the Bank.
Current wording
The following discussion and analysis should be read in conjunction with the detailed information and consolidated financial statements, including notes thereto, included elsewhere in this report. Our consolidated financial condition and results of operations are essentially those of our subsidiary, Journey Bank. Therefore, the analysis that follows is directed to the performance of the Bank.
Previous wording
As of January 1, 2023, the Corporation adopted Accounting Standards Update (“ASU”) 2016-13,Financial Instruments – Credit Losses (Topic 326): “Measurement of Credit Losses on Financial Instruments,” which replaced the current loss impairment methodology under U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to form credit loss estimates in an effort to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit. ASU 2016-13, commonly referred to as Current Expected Credit Losses (“CECL”), requires a financial asset (or a group of financial assets) to be measured at an amortized cost basis and presented at the net amount expected to be collected. The amendments in this update affect financial assets and net investment in leases that are not accounted for at fair value through net income, including such financial
Current wording
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 326,Financial Instruments – Credit Losses, provides guidance on the accounting for credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. ASC 326 requires consideration of a broad range of reasonable and supportable information to form credit loss estimates in an effort to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit. Commonly referred to as Current Expected Credit Losses (“CECL”), ASC 326 requires a financial asset (or a group of financial assets) to be measured at an amortized cost basis and presented at the net amount expected to be collected. ASC 326 affects financial assets and net investment in leases that are not accounted for at fair value through net income, including such financial assets as loans, debt securities, trade receivables, net investments in leases, off-balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash.
Previous wording
Although the Corporation’s management uses the best information available, the level of the ACL remains an estimate which is subject to significant judgment and short-term change which could have a significant impact on the Corporation’s financial condition or results of operations. From January 1, 2024 to December 31, 2024, the level of the ACL increased from $9.3 million to $9.9 million and the ACL to total loans increased from 0.87% to 0.88%. The Corporation’s ACL is highly sensitive to the methods, assumptions and estimates underlying its calculation. See Note 1, “Summary of Significant Accounting Policies” and Note 5 “Loans and Allowance for Credit Losses” within the Corporation’s Notes to the Consolidated Financial Statements which are included in Part II of this Annual Report on Form 10-K for additional qualitative and quantitative information about the Corporation’s ACL.
Current wording
Although the Corporation’s management uses the best information available, the level of the ACL remains an estimate which is subject to significant judgment and short-term change which could have a significant impact on the Corporation’s financial condition or results of operations. From January 1, 2025 to December 31, 2025, the level of the ACL increased from $9.9 million to $10.0 million and the ACL to total loans decreased from 0.88% to 0.85%. The Corporation’s ACL is highly sensitive to the methods, assumptions and estimates underlying its calculation. See Note 4 “Loans and Allowance for Credit Losses” within the Corporation’s Notes to the Consolidated Financial Statements which are included in Part II of this Annual Report on Form 10-K for additional qualitative and quantitative information about the Corporation’s ACL.
Previous wording
Total assets at December 31, 2024, were $1.596 billion, a decrease of $43.8 million, or 2.7% from $1.640 billion at December 31, 2023. The change in total assets primarily reflected decreases in available-for-sale debt securities, restricted investment in bank stocks and deferred tax assets, net, partially offset by an increase in loans receivable. Available-for-sale debt securities decreased $90.1 million, restricted investment in bank stocks decreased $3.3 million and deferred tax assets, net, decreased $2.6 million. Gross loans receivable increased $57.5 million. Total liabilities at December 31, 2024, were $1.430 billion, a decrease of $56.4 million, or 3.8% from $1.486 billion at December 31, 2023. Deposit balances increased by $141.8 million, short-term borrowings decreased $184.1 million and long-term borrowings decreased $14.9 million since December 31, 2023.
Current wording
Total assets at December 31, 2025 amounted to $1.673 billion, an increase of $77.2 million, or 4.8% from $1.596 billion at December 31, 2024. The change in total assets primarily reflected increases in cash and cash equivalents, available-for-sale debt securities, and loans receivable, partially offset by a decrease in deferred tax assets, net. Cash and cash equivalents increased $31.2 million, available-for-sale debt securities increased $4.0 million and loans receivable, not held for sale, increased by $51.6 million. Deferred tax assets, net, decreased $4.0 million. Total liabilities at December 31, 2025, were $1.481 billion, an increase of $51.1 million, or 3.6% from $1.430 billion at December 31, 2024. Deposit balances increased by $120.3 million, short-term borrowings decreased $55.9 million and long-term borrowings decreased $15.0 million since December 31, 2024.
Previous wording
Total average assets increased 51.3% from $1.053 billion for the year ended December 31, 2023, to $1.593 billion for the year ended December 31, 2024, primarily related to the MBF merger. Average earning assets were $1.491 billion for the year ended December 31, 2024 and $1.009 billion for the year ended December 31, 2023. Average interest-bearing liabilities were $1.159 billion for the year ended December 31, 2024 and $763.4 million for the year ended December 31, 2023.
Current wording
Total average assets increased 2.0% from $1.593 billion for the year ended December 31, 2024, to $1.625 billion for the year ended December 31, 2025. Average earning assets were $1.517 billion for the year ended December 31, 2025 and $1.491 billion for the year ended December 31, 2024. Average interest-bearing liabilities were $1.159 billion for each of the years ended December 31, 2025 and 2024.
Previous wording
Gross loans not held for sale increased 5.4% to $1.126 billion at December 31, 2024 from $1.068 billion at December 31, 2023. This increase is related to strong loan demand during the year ended December 31, 2024.
Current wording
Gross loans not held for sale increased 4.6% to $1.178 billion at December 31, 2025 from $1.126 billion at December 31, 2024. This increase is related to strong loan demand during the year ended December 31, 2025.
Previous wording
Deferred tax assets, net, decreased $2.6 million to $10.0 million at December 31, 2024 from $12.6 million at December 31, 2023. This decrease is primarily related to decreases in deferred tax assets, net, related to core deposit intangibles and purchase accounting adjustments for the year ended December 31, 2024.
Current wording
Deferred tax assets, net, decreased $4.0 million to $6.0 million at December 31, 2025 from $10.0 million at December 31, 2024. This decrease is primarily related to decreases in deferred tax assets related to unrealized losses on available-for-sale debt securities and purchase accounting adjustments for the year ended December 31, 2025.
Previous wording
Interest-bearing deposits increased $148.1 million to $1.033 billion at December 31, 2024 from $884.7 million at December 31, 2023. Noninterest-bearing deposits decreased 2.4% from $266.0 million at December 31, 2023 to $259.7 million at December 31, 2024. The increase in interest-bearing deposits during the year ended December 31, 2024 was a result of a strategic initiative to reposition customer repurchase agreements, which are classified as short-term borrowings, into core deposit accounts. The Bank anticipates a continued migration of customer repurchase accounts from short-term borrowings to interest bearing deposits moving into 2025. The decrease in noninterest-bearing deposits was a result of the migration of noninterest-bearing deposit accounts into interest bearing products for the year ended December 31, 2024.
Current wording
Interest-bearing deposits increased $103.0 million to $1.136 billion at December 31, 2025 from $1.033 billion at December 31, 2024. Noninterest-bearing deposits increased 6.7% from $259.7 million at December 31, 2024 to $277.0 million at December 31, 2025. The increase in interest-bearing deposits during the year ended December 31, 2025 was a result of strong organic deposit growth in combination with the continued execution of a strategic initiative to reposition customer repurchase agreements, which are classified as short-term borrowings, into core deposit accounts. The Bank anticipates the completion of this project in 2026 which will assist in optimizing the Bank’s long-term liquidity needs and balance sheet management strategies. The increase in noninterest-bearing deposits was a result of continued growth in overall deposit levels and changes in product mix for the year ended December 31, 2025.
Previous wording
Short-term borrowings decreased $184.1 million to $68.4 million at December 31, 2024 from $252.5 million at December 31, 2023. This change was primarily related to the migration of customer repurchase agreements as well as a paydown in short-term FHLB borrowings during the year as discussed above.
Current wording
Short-term borrowings decreased $55.9 million to $12.5 million at December 31, 2025 from $68.4 million at December 31, 2024. This change was primarily related to the migration of customer repurchase agreements as discussed above as well as a paydown in short-term FHLB borrowings during the year ended December 31, 2025.
Previous wording
Long-term borrowings were $55.5 million at December 31, 2024 compared to $70.5 million at December 31, 2023. This decrease is primarily related to $15.2 million in long-term borrowing maturities during the year ended December 31, 2024.
Current wording
Long-term borrowings were $55.5 million at December 31, 2024 compared to $40.6 million at December 31, 2025. This decrease is primarily related to $15.2 million in long-term borrowing maturities during the year ended December 31, 2025.
Previous wording
Total stockholder’s equity increased by $12.6 million, or 8.2%, from $153.8 million at December 31, 2023, to $166.4 million at December 31, 2024. The increase is primarily attributable to earnings, net of cash dividends, along with a decrease in accumulated other comprehensive loss due to changes in the fair values of available-for-sale debt securities. Accumulated other comprehensive loss amounted to $13.9 million as of December 31, 2024 and $15.0 million as of December 31, 2023. These increases were partially offset by an increase in treasury stock of $1.5 million related to a repurchase during the year ended December 31, 2024.
Current wording
Total stockholder’s equity increased by $26.1 million, or 15.7%, from $166.4 million at December 31, 2024, to $192.5 million at December 31, 2025. The increase is primarily attributable to earnings, net of cash dividends, along with a decrease in accumulated other comprehensive loss due to changes in the fair values of available-for-sale debt securities. Accumulated other comprehensive loss amounted to $4.0 million as of December 31, 2025 and $13.9 million as of December 31, 2024.
Previous wording
The loan-to-deposit ratio is a key measurement of liquidity. Our loan-to-deposit ratio decreased from 92.0% as of December 31, 2023 to 86.4% as of December 31, 2024 due to the asset/liability mix changes noted above, and remains within internal policy limits.
Current wording
The loan-to-deposit ratio is a key measurement of liquidity. Our loan-to-deposit ratio decreased from 86.4% as of December 31, 2024 to 82.6% as of December 31, 2025 due to the asset/liability mix changes noted above, and remains within internal policy limits.
Previous wording
The majority of the Corporation’s debt securities are fixed-rate instruments and inherently subject to interest rate risk, as the value of fixed-rate securities fluctuates with changes in interest rates. Generally, a security’s value reacts inversely with changes in interest rates. Available-for-sale securities are carried at fair value, with unrealized gains or losses reported in the accumulated other comprehensive income or loss component of stockholder’s equity, net of deferred income taxes. At December 31, 2024, the Corporation reported a net unrealized loss, included in accumulated other comprehensive loss, of $13.9 million, net of deferred income taxes of $3.7 million, a decrease of $1.1 million compared to the net unrealized holding loss of $15.0 million, net of deferred income taxes of $4.0 million, at December 31, 2023. Any future changes in interest rates could result in changes in the fair value of the Corporation’s securities portfolio and capital position. However, accumulated other comprehensive income and loss related to available-for-sale debt securities is excluded from regulatory capital and does not have an impact on the Corporation’s regulatory capital ratios.
Current wording
The majority of the Corporation's debt securities are fixed-rate instruments and inherently subject to interest rate risk, as the value of fixed-rate securities fluctuates with changes in interest rates. Generally, a security's value reacts inversely with changes in interest rates. Available-for-sale securities are carried at fair value, with unrealized gains or losses reported in the accumulated other comprehensive income or loss component of stockholder's equity, net of deferred income taxes. At December 31, 2025, the Corporation reported a net unrealized loss, included in accumulated other comprehensive loss, of $4.0 million, net of deferred income taxes of $1.1 million, a decrease of $9.9 million compared to the net unrealized holding loss of $13.9 million, net of deferred income taxes of $3.7 million, at December 31, 2024. Any future changes in interest rates could result in changes in the fair value of the Corporation’s securities portfolio and capital position. However, accumulated other comprehensive income and loss related to available-for-sale debt securities is excluded from regulatory capital and does not have an impact on the Corporation's regulatory capital ratios.
Previous wording
At December 31, 2024 and December 31, 2023, the Corporation held $1.4 and $1.3 million, respectively, in equity securities recorded at fair value. The following is a summary of unrealized and realized gains and losses recognized in net income on equity securities during the years ended December 31, 2024 and 2023:
Current wording
At December 31, 2025, and December 31, 2024, the Corporation held $1.4 million in equity securities recorded at fair value. The following is a summary of unrealized and realized gains and losses recognized in net income on equity securities during the years ended December 31, 2025 and 2024:
Previous wording
Gross loans receivable increased 5.4% from $1.068 billion at December 31, 2023 to $1.126 billion at December 31, 2024. The percentage distribution in the loan portfolio is shown in the tables below:
Current wording
Gross loans receivable increased 4.6% from $1.126 billion at December 31, 2024 to $1.178 billion at December 31, 2025. The percentage distribution in the loan portfolio is shown in the tables below:
Previous wording
As of December 31, 2024, commercial real estate loans totaled $371.7 million or 33.0% of total gross loans. Of this amount commercial mortgage loans represented $325.9 million or 28.9% of total gross loans and student housing loans represented $45.8 million or 4.1% of total gross loans. The following table presents the distribution of commercial mortgage loans and related percentage of the total loan portfolio as of December 31, 2024 and December 31, 2023:
Current wording
As of December 31, 2025, commercial real estate loans totaled $403.6 million or 34.3% of total gross loans. Of this amount commercial mortgage loans represented $355.6 million or 30.2% of total gross loans and student housing loans represented $48.0 million or 4.1% of total gross loans. The following table presents the distribution of commercial real estate loans and related percentage of the total loan portfolio as of December 31, 2025 and December 31, 2024:
Previous wording
Total non-performing assets amounted to $10,117,000, or 0.63% of total assets at December 31, 2024, as compared to $4,476,000, or 0.27% of total assets at December 31, 2023. For the year ended December 31, 2024, the Corporation experienced increases in non-accrual loans in all major loan classifications, however, the most significant increases were in commercial real estate and residential real estate loans which increased $1,415,000 and $3,785,000, respectively.
Current wording
Total non-performing assets amounted to $12.0 million, or 0.72% of total assets at December 31, 2025, as compared to $10.1 million, or 0.63% of total assets at December 31, 2024. For the year ended December 31, 2025, the Corporation experienced increases in non-accrual loans in multiple loan classifications, however, the most significant increase was in residential real estate loans which increased $1.3 million.
Previous wording
Increases in residential real estate non-accrual loans were generally applicable to a homogenous population of well secured loans collateralized by 1-4 family residential properties. With respect to commercial real estate non-accrual loans, the Corporation has experienced a limited number of large commercial relationships that have required significant monitoring and workout efforts. As a result, these relationships may significantly impact the total amount of allowance required on individual loans and may significantly impact the provision for credit losses and the amount of total charge-offs reported in any one period.
Current wording
Residential real estate non-accrual loans are generally related to a homogenous population of well secured loans collateralized by 1-4 family residential properties. With respect to commercial real estate non-accrual loans, the Corporation has experienced a limited number of large commercial relationships that have required significant monitoring and workout efforts. As a result, these relationships may significantly impact the total amount of allowance required on individual loans and may significantly impact the provision for credit losses and the amount of total charge-offs reported in any one period.
Previous wording
The allowance for credit losses was $9.9 million at December 31, 2024, compared to $9.3 million at December 31, 2023. The allowance equaled 0.88% of total loans, net of unearned fees and costs and unamortized fair value adjustments, at December 31, 2024 as compared to 0.87% of total loans at December 31, 2023. The allowance for credit losses is analyzed quarterly and reviewed by the Corporation’s Board of Directors. No concentration or apparent deterioration in classes of loans or pledged collateral was evident. Regular loan meetings with the Corporation’s Board of Directors reviewed new loans over specified thresholds. Delinquent loans, loan exceptions and certain large loans are addressed by the full Board no less than monthly to determine compliance with policies.
Current wording
The allowance for credit losses was $10.0 million at December 31, 2025, compared to $9.9 million at December 31, 2024. The allowance equaled 0.85% of total loans, net of unearned fees and costs and unamortized fair value adjustments, at December 31, 2025 as compared to 0.88% of total loans at December 31, 2024. The allowance for credit losses is analyzed quarterly and reviewed by the Corporation’s Board of Directors. No concentration or apparent deterioration in classes of loans or pledged collateral was evident. Regular loan meetings with the Corporation’s Board of Directors reviewed new loans over specified thresholds. Delinquent loans, loan exceptions and certain large loans are addressed by the full Board no less than monthly to determine compliance with policies.
Previous wording
See Note 1 and 5 within the Corporation’s Notes to the Consolidated Financial Statements which are included in this Annual Report on Form 10-K for more information regarding the Corporation’s allowance for credit losses as of December 31, 2024.
Current wording
See Notes 1 and 4 within the Corporation’s Notes to the Consolidated Financial Statements which are included in this Annual Report on Form 10-K for more information regarding the Corporation’s allowance for credit losses as of December 31, 2025.
Previous wording
The Corporation believes its deposit product offerings are properly structured to attract and retain core low-cost deposit relationships. The average cost of interest-bearing deposits for the years ended December 31, 2024, and 2023, was 2.30% and 0.91%, respectively. The increased cost was primarily attributable to the increases in rates and increased pricing competition.
Current wording
The Corporation believes its deposit product offerings are properly structured to attract and retain core low-cost deposit relationships. The average cost of interest-bearing deposits for the years ended December 31, 2025, and 2024, was 2.22% and 2.30%, respectively. The decreased cost was primarily attributable to decreased market rates during 2024 and 2025.
Previous wording
At December 31, 2024, estimated uninsured deposits, or the portion of deposit accounts which exceeded the Federal Deposit Corporation insurance limit, totaled $353.2 million. Of this amount, $202.0 million was collateralized by securities pledged by the Corporation or letters of credit issued through the Federal Home Loan Bank of Pittsburgh. Time deposits of $250,000 or more totaled approximately $100.3 million at December 31, 2024.
Current wording
At December 31, 2025, estimated uninsured deposits, or the portion of deposit accounts which exceeded the Federal Deposit Corporation insurance limit, totaled $383.6 million. Of this amount, $146.9 million was collateralized by securities pledged by the Corporation or letters of credit issued through the Federal Home Loan Bank of Pittsburgh. Time deposits of $250,000 or more totaled approximately $97.0 million at December 31, 2025.
Previous wording
Short-term borrowings consist primarily of securities sold under agreements to repurchase and periodic overnight or short-term Federal Home Loan Bank advances. Average short-term borrowings amounted to 10.3% and 25.9% of total interest-bearing liabilities for the years ended December 31, 2024 and 2023, respectively. This change was primarily related to the migration of customer repurchase agreements as well as a paydown in short-term FHLB borrowings during 2024 as discussed above.
Current wording
Short-term borrowings consist primarily of securities sold under agreements to repurchase and periodic overnight or short-term Federal Home Loan Bank advances. Average short-term borrowings amounted to 2.4% and 10.3% of total interest-bearing liabilities for the years ended December 31, 2025 and 2024, respectively. This change was primarily related to the migration of customer repurchase agreements as well as a paydown in short-term FHLB borrowings during 2025.
Previous wording
Long-term borrowings consist of advances due to the FHLB - Pittsburgh. Under terms of a blanket agreement, the loans are secured by certain qualifying assets of the Bank which consist principally of first mortgage loans. The carrying value of these collateralized items was $822.1 million at December 31, 2024. The Bank has lines of credit with the Federal Reserve Bank Discount Window, FHLB – Pittsburgh, and Atlantic Community Bankers Bank in the aggregate amount of $588.0 million at December 31, 2024. The unused portion of these lines of credit was $486.6 million at December 31, 2024.
Current wording
Long-term borrowings consist of advances due to the FHLB - Pittsburgh. Under terms of a blanket agreement, the loans are secured by certain qualifying assets of the Bank which consist principally of first mortgage loans. The carrying value of these collateralized items was $856.5 million at December 31, 2025. The Bank has lines of credit with the Federal Reserve Bank Discount Window, FHLB – Pittsburgh, and Atlantic Community Bankers Bank in the aggregate amount of $613.4 million at December 31, 2025. The unused portion of these lines of credit was $557.2 million at December 31, 2025.
Previous wording
Net income in 2024 amounted to $19.0 million, or $5.33 per share, an increase of $15.6 million compared to $3.4 million, or $1.49 per share, in 2023. The increase in net income for 2024 compared to 2023 was primarily attributable to a significant increase in net interest income along with nonrecurring expenses associated with the MBF merger in 2023. Pretax merger-related expenses recorded in 2023 were $3.0 million, compared to $241,000 in 2024. Also, during the fourth quarter 2023, the Corporation recorded a one-time pretax provision for credit losses of $2.9 million for acquired non-PCD loans.
Current wording
Net income in 2025 amounted to $24.2 million, or $6.85 per share, an increase of $5.2 million compared to $19.0 million, or $5.33 per share, in 2024. The increase in net income for 2025 compared to 2024 was primarily attributable to a significant increase in net interest income, partially offset by increases in non-interest expense and income tax provision expense.
Previous wording
Net interest income increased $27.2 million, or 116.9% to $50.5 million in 2024, from $23.3 million in 2023. Non-interest income was $10.4 million in 2024, an increase of $3.3 million, or 45.7%, from $7.1 million in 2023, which primarily related to increases in service charges and fees, earnings on bank-owned life insurance, interchange fees and other non-interest income. Non-interest expense was $37.7 million in 2024, an increase of $13.6 million, or 56.2%, from $24.1 million in 2023, which was primarily related to increases in expenses following the MBF merger.
Current wording
Net interest income increased $10.1 million, or 20.1% to $60.6 million in 2025, from $50.5 million in 2024. Non-interest income was $10.4 million in both 2025 and 2024. Non-interest expense was $41.0 million in 2025, an increase of $3.4 million, or 8.9%, from $37.7 million in 2024, which was primarily related to increases in salaries and employee benefits, Pennsylvania shares tax and professional fees. Income tax provision expense increased $1.6 million, or 47% to $4.9 million in 2025, from $3.3 million in 2024, due to higher pretax earnings.
Previous wording
The annualized return on average assets was 1.19% in 2024 compared to 0.32% in 2023. The annualized return on average equity was 11.88% in 2024 compared to 3.48% in 2023. The Corporation declared and paid dividends to holders of common stock of $1.76 per share in 2024 and $1.71 per share in 2023.
Current wording
The annual return on average assets was 1.49% in 2025 compared to 1.19% in 2024. The annualized return on average equity was 13.57% in 2025 compared to 11.88% in 2024. The Corporation declared and paid dividends to holders of common stock of $2.30 per share in 2025 and $1.76 per share in 2024.
Previous wording
Tax-equivalent net interest income** **increased $28.0 million, or 119.0%, to $51.6 million in 2024 compared to $23.6 million in 2023. The increase in tax-equivalent net interest income was due to an increase in tax-equivalent interest income reflecting higher earning asset volumes and yields, partially offset by an increase in interest expense which resulted primarily from an increase in interest-bearing deposits and increased cost of funds. Tax-equivalent net interest margin, a key measurement used in the banking industry to measure income from earning assets relative to the cost to fund those assets, is calculated by dividing tax-equivalent net interest income by average interest-earning assets. The Corporation’s tax-equivalent net interest margin increased 112 basis points to 3.46% in 2024 compared to 2.34% in 2023, which was largely caused by increases in yields on earning assets outpacing the increase in cost of funds. Additionally, interest rate spread, the difference between the average yield on interest-earning assets, shown on a fully tax-equivalent basis, and the average cost of interest-bearing liabilities, increased 101 basis points to 2.86% in 2024 compared to 1.85% in 2023.
Current wording
Tax-equivalent net interest income increased $10.2 million, or 19.7%, to $61.8 million in 2025 compared to $51.6 million in 2024. The increase in tax-equivalent net interest income was due to an increase in tax-equivalent interest income reflecting higher earning asset volumes and yields, along with a decrease in interest expense which resulted primarily from a significant decrease in average borrowings coupled with a decrease in the average rate paid on total interest-bearing liabilities. Tax-equivalent net interest margin, a key measurement used in the banking industry to measure income from earning assets relative to the cost to fund those assets, is calculated by dividing tax-equivalent net interest income by average interest-earning assets. The Corporation’s tax-equivalent net interest margin increased 62 basis points to 4.08% in 2025 compared to 3.46% in 2024, which was largely caused by increases in yields on earning assets along with a decrease in total in cost of funds. Additionally, interest rate spread, the difference between the average yield on interest-earning assets, shown on a fully tax-equivalent basis, and the average cost of interest-bearing liabilities, increased 66 basis points to 3.52% in 2025 compared to 2.86% in 2024.
Previous wording
Tax-equivalent interest income increased $44.2 million, or 114.4%, to $82.9 million in 2024 from $38.7 million in 2023, which was largely caused by significant growth in average earning assets, coupled with an increase in the tax-equivalent yield on average earning assets. Average earning assets increased $482.1 million, or 47.8%, to $1.5 billion in 2024 from $1.0 billion in 2023, resulting in a corresponding increase to tax-equivalent interest income of $27.1 million. Specifically, average loans increased $493.7 million, or 79.3%, to $1.1 billion in 2024 from $622.5 million in 2023, which reflected the MBF merger as well as strong organic loan growth. Taxable investment securities averaged $291.0 million in 2024, a decrease of $63.5 million, or 17.9%, compared to $354.4 million in 2023, and tax-exempt securities averaged $78.9 million in 2024, an increase of $55.4 million, or 235.9%, compared to $23.5 million in 2023, which contributed to an increase of $1.5 million in tax-equivalent interest income. The tax-equivalent yield on earning assets increased 173 basis points to 5.56% in 2024 from 3.83% in 2023, which resulted in a corresponding increase in tax-equivalent interest income of $17.1 million. The Corporation’s tax-equivalent yield on loans increased 144 basis points to 6.58% in 2024 compared to 5.14% in 2023, resulting in a corresponding increase in tax-equivalent interest income of $15.7 million, due primarily to net accretion of loan fair value adjustments recorded in conjunction with the MBF merger as well as the continued repricing of existing variable rate loans in the Corporation’s portfolio. Meanwhile, the tax-equivalent yield on investment securities increased 79 basis points to 2.49% in 2024 from 1.70% in 2023 and caused a corresponding increase to tax-equivalent interest income of $1.3 million.
Current wording
Tax-equivalent interest income increased $6.3 million, or 7.6%, to $89.2 million for the year ended December 31, 2025 from $82.9 million for the same period in 2024, which was largely caused by growth in average earning assets, coupled with an increase in the tax-equivalent yield on average earning assets. Average earning assets increased $25.1 million, or 1.7%, to $1.517 billion for year ended December 31, 2025 from $1.491 billion for the same period in 2024, resulting in a corresponding increase to tax-equivalent interest income of $3.4 million. Specifically, average loans increased $50.2 million, or 4.5%, to $1.166 billion for the year ended December 31, 2025 from $1.116 billion for the same period in 2024, which reflected strong organic loan growth. Total investment securities averaged $331.6 million for the year ended December 31, 2025, a decrease of $38.3 million, or 10.3%, compared to $369.9 million for the same period in 2024, which contributed to a net decrease of $0.7 million in tax-equivalent interest income. The tax-equivalent yield on earning assets increased 32 basis points to 5.88% for the year ended December 31, 2025 from 5.56% for the same period in 2024, which resulted in a corresponding increase in tax-equivalent interest income of $2.9 million. The Corporation's tax-equivalent yield on loans increased 11 basis points to 6.69% for the year ended December 31, 2025 compared to 6.58% for the same period in 2024, resulting in a corresponding increase in tax-equivalent interest income of $1.2 million, due primarily to the origination of new loans at higher yields and the continued repricing of existing variable rate loans in the Corporation’s portfolio. Meanwhile, the tax-equivalent yield on investment securities increased 67 basis points to 3.16% for the year ended December 31, 2025 from 2.49% for the same period in 2024 and caused a corresponding increase to tax-equivalent interest income of $1.9 million.
Previous wording
Interest expense increased $16.2 million, or 107.3%, to $31.3 million in 2024 from $15.1 million in 2023, which was primarily from an increase in funding costs, coupled with an increase in average deposits resulting from the MBF merger. Average borrowed funds, which is largely comprised of customer repurchase agreements and FHLB of Pittsburgh advances, averaged $184.5 million in 2024, a decrease of $35.9 million from $220.4 million in 2023. Lower volumes of average borrowed funds resulted in a corresponding decrease in interest expense of $1.7 million. Total average interest-bearing deposits increased $431.1 million, or 79.4%, to $974.1 million for 2024, compared to $543.0 million for 2023, which resulted in a corresponding increase in interest expense of $5.6 million. The Corporation experienced higher funding costs in 2023 and 2024 as a result of rising market rates and increased competition. For the year ended December 31, 2024, the Corporation’s cost of funds increased 72 basis points to 2.70% from 1.98% for the year ended December 31, 2023, which resulted in a corresponding increase in interest expense of $12.3 million.
Current wording
Interest expense decreased $3.9 million, or 12.3%, to $27.4 million for the year ended December 31, 2025 from $31.3 million for the same period in 2024, which was primarily from a significant decrease in average borrowings, coupled with a lower overall cost of funds. Average borrowed funds, which is largely comprised of customer repurchase agreements and FHLB of Pittsburgh advances, averaged $75.0 million for the year ended December 31, 2025, a decrease of $109.6 million from $184.5 million for the same period in 2024. Lower volumes of average borrowed funds resulted in a corresponding decrease in interest expense of $5.3 million. Total average interest-bearing deposits increased $110.1 million, or 11.3%, to $1.084 billion for the year ended December 31, 2025, compared to $974.1 million for the same period in 2024, which resulted in a corresponding increase in interest expense of $2.7 million. For the year ended December 31, 2025, the Corporation's cost of funds decreased 33 basis points to 2.37% from 2.70% for the same period in 2024. The average rate paid on total borrowings decreased 40 basis points to 4.41% for the year ended December 31, 2025 from 4.81% for the same period in 2024. The average rate paid on total interest-bearing deposits decreased 8 basis points to 2.22% for the year ended December 31, 2025 from 2.30% for the same period in 2024, which resulted in a corresponding decrease in interest expense of $1.0 million.
Previous wording
For the year ended December 31, 2024, the Corporation recorded a $847,000 provision for credit losses on loans compared to $2.6 million for the year ended December 31, 2023. The provision for 2024 primarily reflects an increase in volume in the loan portfolio along with changes in qualitative factors related to the nature of the loan portfolio, volume and severity of past due loans, loan grade migration, changes in lending staff and changes in lending policies and procedures. The provision for 2023 was primarily as a result of a $2.9 million one-time provision related to purchased non-PCD loans acquired as part of the MBF merger, as well as a net credit due to other factors.
Current wording
The provision amounts for the years ended December 31, 2025 and 2024 primarily reflect an increase in volume in the loan portfolio, increases in non-accrual loans which impacted probability of default calculations and changes in qualitative factors related to the nature of the loan portfolio, volume and severity of past due loans, loan grade migration, changes in lending staff, changes in lending policies and procedures and forecasted economic conditions.
Previous wording
See Note 1 and 5 within the Corporation’s Notes to the Consolidated Financial Statements which are included in this Annual Report on Form 10-K for more information regarding the Corporation’s allowance for credit losses as of December 31, 2024.
Current wording
See Notes 1 and 4 within the Corporation’s Notes to the Consolidated Financial Statements which are included in this Annual Report on Form 10-K for more information regarding the Corporation’s allowance for credit losses as of December 31, 2025.
Previous wording
One standard to measure non-interest expense is to express annualized non-interest expense as a percentage of average total assets. For the year ended December 31, 2024 this percentage was 2.53% compared to 2.39% for the year ended December 31, 2023.
Current wording
One standard to measure non-interest expense is to express annualized non-interest expense as a percentage of average total assets. For the year ended December 31, 2025 this percentage was 2.52% compared to 2.36% for the year ended December 31, 2024.
Previous wording
The Bank’s liquidity, represented by cash and due from banks, is a product of its operating, investing and financing activities. The Bank’s primary sources of funds are deposits, securities sold under agreements to repurchase, principal repayments of securities and outstanding loans, funds provided from operations, and day-to-day FHLB – Pittsburgh borrowings. In addition, the Bank invests excess funds in short-term interest-earning assets such as overnight deposits or U.S. agency securities, which provide liquidity to meet lending requirements. While scheduled payments from the amortization of loans and securities and short-term investments are relatively predictable sources of funds, general interest rates, economic conditions and competition greatly influence deposit flows and repayments on loans and mortgage-backed securities.
Current wording
Liquidity is the ability to quickly raise cash at a reasonable cost. An adequate liquidity position permits the Bank to pay creditors, compensate for unforeseen deposit fluctuations and fund unexpected loan demand. The Bank’s primary sources of funds are deposits, securities sold under agreements to repurchase, principal repayments of securities and outstanding loans, funds provided from operations, and day-to-day FHLB – Pittsburgh borrowings. In addition, the Bank invests excess funds in short-term interest-earning assets such as overnight deposits or U.S. agency securities, which provide liquidity to meet lending requirements. While scheduled payments from the amortization of loans and securities and short-term investments are relatively predictable sources of funds, general interest rates, economic conditions and competition greatly influence deposit flows and repayments on loans and mortgage-backed securities.
Previous wording
The Bank reviews cash flow projections regularly and updates them in order to maintain liquid assets at levels believed to meet the requirements of normal operations, including loan commitments and potential deposit outflows from maturing certificates of deposit and savings withdrawals. While deposits and securities sold under agreements to repurchase are its primary source of funds, when needed it is also able to generate cash through borrowings from the FHLB. At December 31, 2024, the Bank had remaining available capacity with FHLB, subject to certain collateral restrictions, of $468.0 million.
Current wording
The Bank reviews cash flow projections regularly and updates them in order to maintain liquid assets at levels believed to meet the requirements of normal operations, including loan commitments and potential deposit outflows from maturing certificates of deposit and savings withdrawals. While deposits and securities sold under agreements to repurchase are its primary source of funds, when needed it is also able to generate cash through borrowings from the FHLB. At December 31, 2025, the Bank had remaining available capacity with FHLB, subject to certain collateral restrictions, of $537.4 million.
Previous wording
The statement of cash flows presents the change in cash and cash equivalents from operating, investing and financing activities. Cash and due from banks and interest-bearing deposits in other banks, which comprise cash and cash equivalents, are the Corporation’s most liquid assets. Cash and cash equivalents totaled $17.4 million at December 31, 2024, a decrease of $1.0 million, or 5.4%, from $18.4 million at December 31, 2023, as net cash inflows from operating and investing activities were less than net cash outflows from financing activities.
Current wording
The statement of cash flows presents the change in cash and cash equivalents from operating, investing and financing activities. Cash and due from banks and interest-bearing deposits in other banks, which comprise cash and cash equivalents, are the Corporation’s most liquid assets. Cash and cash equivalents totaled $48.5 million at December 31, 2025, an increase of $31.2 million from $17.4 million at December 31, 2024, as net cash inflows reported from operating and financing activities outpaced net cash outflows from investing activities for the year ended December 31, 2025.
Previous wording
Net cash inflows from investing activities provided $48.5 million of cash and cash equivalents during the year ended December 31, 2024. Accounting for the majority of the net cash inflows was $107.1 million related to proceeds from sales, paydowns, calls and maturities of available-for-sale debt securities. This was partially offset by purchases of available-for-sale debt securities of $14.9 million and a net increase in loans and leases of $47.4 million, which reflected strong loan demand. Financing activities used $66.4 million in net cash, which resulted primarily from a decrease in short-term borrowings, consisting of customer repurchase agreements and short-term FHLB borrowings, of $184.1 million. These outflows were offset by a $140.6 million increase in deposits. These changes were primarily related to a strategic initiative to reposition customer repurchase agreements into core deposit accounts. Operating activities include net income, adjusted for the effects of non-cash transactions including, among others, depreciation and amortization and the provision for credit losses, and is the primary source of cash flows from operations. For the year ended December 31, 2024, operating activities provided the Corporation with $16.9 million in net cash, which primarily reflected net income of $19.0 million.
Current wording
Net cash outflows from investing activities used $33.1 million of cash and cash equivalents during the year ended December 31, 2025. Accounting for the majority of the net cash outflows was a net increase in loans of $43.1 million which was partially offset by a net cash inflow from purchases, proceeds from sales, paydowns, calls and maturities of available-for-sale debt securities of $9.4 million. Financing activities provided $40.9 million in net cash, which resulted primarily from a decrease in short-term borrowings, consisting of customer repurchase agreements and short-term FHLB borrowings, of $55.9 million along with a repayment of long-term borrowings of $15.2 million. These outflows were offset by a $120.0 million increase in deposits. Operating activities include net income, adjusted for the effects of non-cash transactions including, among others, depreciation and amortization and the provision for credit losses, and is the primary source of cash flows from operations. For the year ended December 31, 2025, operating activities provided the Corporation with $23.3 million in net cash, which primarily reflected net income of $24.2 million.
Previous wording
The Corporation regularly analyzes its ability to generate adequate amounts of cash to meet its short and long-term cash requirements and plans. As part of its quarterly asset liability management procedures, the Corporation performs liquidity cash flow forecasts in various base level and stress scenarios to monitor future cash needs. As of December 31, 2024, the Corporation is expected to maintain a level cash balance over the next 12 months. The Corporation has not identified any known demands, commitments, events or uncertainties that would result or that are reasonably likely to result in its liquidity position materially increasing or decreasing over the next 12 months. The Corporation’s long-term cash needs are regularly analyzed through its strategic planning process, which includes a detailed review of liquidity and funding needs.
Current wording
The Corporation regularly analyzes its ability to generate adequate amounts of cash to meet its short and long-term cash requirements and plans. As part of its quarterly asset liability management procedures, the Corporation performs liquidity cash flow forecasts in various base level and stress scenarios to monitor future cash needs. The Corporation has not identified any known demands, commitments, events or uncertainties that would result or that are reasonably likely to result in its liquidity position materially increasing or decreasing over the next 12 months. The Corporation’s long-term cash needs are regularly analyzed through its strategic planning process, which includes a detailed review of liquidity and funding needs.
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Previous report — wording carried elsewhere
assets as loans, debt securities, trade receivables, net investments in leases, off-balance-sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. Upon adoption of ASU 2016-13 on January 1, 2023, the Corporation recorded an incremental decrease in the ACL through a cumulative effect adjustment to equity, net of tax, with subsequent adjustments charged to earnings through a provision for credit losses.