COMMUNITY BANCORP /VT

RESULTS OF OPERATIONS

The Company’s net income increased $4.2 million, or 32.9%, from 2024 to 2025, resulting in earnings per common share of $3.01 for 2025 versus $2.28 for 2024. Core earnings (NII) increased $6.2 million, or 18.0%, in 2025 compared to 2024. Interest income in 2025 was supported primarily by increases in the volume of the loan portfolio and overnight deposits at FRBB. Interest and fees on loans, which is the major component of interest income, increased $5.8 million, or 11.8% in 2025 and interest paid on deposits, which is the major component of total interest expense, increased $1.9 million, or 13.6% in 2025, reflecting the increase in interest-bearing deposits in 2025. Additionally, interest on borrowed funds decreased $2.4 million, or 55.6%, due to the Company’s decreased reliance on borrowings as a funding source and to a decrease in the average rate paid on borrowings.

Return on average assets, which is net income divided by average total assets, measures how effectively a corporation uses its assets to produce earnings. Return on average equity, which is net income divided by average shareholders' equity, measures how effectively a corporation uses its equity capital to produce earnings.

The following table shows these ratios, as well as other equity ratios, for each of the last two fiscal years: