Western New England Bancorp, Inc.
For the period ended Sep 30, 2025. Filed Nov 7, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 7, 2025
WNEB$13.69+0.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-08.
0001999371-25-010984
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-07.
0001999371-25-017260
Item 2. 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 128 previous paragraphs and 127 current paragraphs.
74 unchanged; 49 reworded; 4 added; 4 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 64 previous and 64 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 (4)
Current report
Provision for Credit Losses.
Current report
During the three months ended September 30, 2025, the Company reported an unrealized gain on marketable equity securities of $22,000, compared to an unrealized gain on marketable equity securities of $10,000 during the three months ended September 30, 2024. During the three months ended September 30, 2024, the Company reported income of $246,000 on mortgage banking activities due to the sale of $20.1 million in fixed rate residential real estate loans to the secondary market. The Company did not sell any residential loans during the three months ended September 30, 2025.
Current report
For the three months ended September 30, 2025, non-interest expense increased $1.4 million, or 9.5%, to $15.8 million from $14.4 million for the three months ended September 30, 2024. Salaries and employee benefits increased $1.1 million, or 13.5%, to $9.2 million, due to an increase in deferred compensation expense to reflect updated performance award estimates, advertising expense increased $162,000, or 59.8%, data processing expense increased $47,000, or 5.4%, FDIC insurance expense increased $38,000, or 11.2%, software expenses increased $40,000, or 6.5%, occupancy expense increased $20,000, or 1.6%, and other non-interest expense increased $94,000, or 7.1%. During the same period, these increases were partially offset by a decrease in professional fees of $80,000, or 14.8%, a decrease in furniture and equipment expense of $30,000, or 6.2%, and a decrease in net debit card processing and ATM network costs of $16,000, or 2.5%.
Current report
Provision for Credit Losses.
Removed paragraphs (4)
Previous report
The net interest margin increased 38 basis points from 2.42% for the three months ended June 30, 2024 to 2.80% for the three months ended June 30, 2025. The net interest margin, on a tax-equivalent basis, was 2.82% for the three months ended June 30, 2025, compared to 2.44% for the three months ended June 30, 2024. Excluding the prepayment penalties discussed above, the net interest margin increased 31 basis points from 2.42%, for the three months ended June 30, 2024 to 2.73%, for the three months ended June 30, 2025. The increase in the net interest margin was primarily due to an increase in the average yield on interest-earning assets and a decrease in the average cost of interest-bearing liabilities.
Previous report
Reversal of Credit Losses.
Previous report
For the three months ended June 30, 2025, non-interest expense increased $1.3 million, or 9.4%, to $15.7 million from $14.3 million for the three months ended June 30, 2024. The increase in non-interest expense was due to an increase in salaries and benefits of $930,000, or 11.8%, an increase in advertising and marketing expense of $104,000, or 30.7%, an increase in data processing expense of $87,000, or 10.3%, an increase in software related expense of $79,000, or 14.0%, an increase in FDIC insurance expense of $76,000, or 23.5%, an increase in occupancy expense of $47,000, or 3.9%, an increase in professional fees of $42,000, or 7.2%, an increase in debit card and ATM processing fees of $31,000, or 4.8%, an increase in furniture and equipment expense of $8,000, or 1.7%, and a decrease in other non-interest expense of $62,000, or 4.4%.
Previous report
Reversal of Credit Losses.
Reworded paragraphs (49)
Previous wording
You should read the following financial results for the three months and six months ended June 30, 2025 in the context of this strategy.
Current wording
You should read the following financial results for the three months and nine months ended September 30, 2025 in the context of this strategy.
Previous wording
There have been no material changes to our critical accounting policies during the six months ended June 30, 2025. For additional information on our critical accounting policies, please refer to the information contained in Note 1 of the accompanying unaudited consolidated financial statements and Note 1 of the consolidated financial statements included in our 2024 Annual Report.
Current wording
There have been no material changes to our critical accounting policies during the nine months ended September 30, 2025. For additional information on our critical accounting policies, please refer to the information contained in Note 1 of the accompanying unaudited consolidated financial statements and Note 1 of the consolidated financial statements included in our 2024 Annual Report.
Previous wording
At June 30, 2025, total assets were $2.7 billion, an increase of $58.1 million, or 2.2%, from December 31, 2024. The increase in total assets was primarily due to an increase in total gross loans of $22.1 million, or 1.1%, an increase in cash and cash equivalents of $26.9 million, or 40.4%, and an increase in investment securities of $10.8 million, or 2.9%.
Current wording
At September 30, 2025, total assets increased $82.4 million, or 3.1%, from December 31, 2024 to $2.7 billion. The increase in total assets was primarily due to an increase in total loans of $60.8 million, or 2.9%, an increase in investment securities of $7.0 million, or 1.9%, and an increase in cash and cash equivalents of $16.5 million, or 24.8%.
Previous wording
At June 30, 2025, the investment securities portfolio totaled $376.9 million, or 13.9% of total assets, compared to $366.1 million, or 13.8% of total assets, at December 31, 2024. At June 30, 2025, the Company’s available-for-sale securities portfolio, recorded at fair market value, increased $18.1 million, or 11.3%, from $160.7 million at December 31, 2024 to $178.8 million. The held-to-maturity securities portfolio, recorded at amortized cost, decreased $7.4 million, or 3.6%, from $205.0 million at December 31, 2024 to $197.7 million at June 30, 2025.
Current wording
At September 30, 2025, the investment securities portfolio totaled $373.2 million, or 13.6% of total assets, compared to $366.1 million, or 13.8% of total assets, at December 31, 2024. At September 30, 2025, the Company’s available-for-sale securities portfolio, recorded at fair market value, increased $18.5 million, or 11.5%, from $160.7 million at December 31, 2024 to $179.2 million. The held-to-maturity securities portfolio, recorded at amortized cost, decreased $11.6 million, or 5.6%, from $205.0 million at December 31, 2024 to $193.4 million at September 30, 2025.
Previous wording
At June 30, 2025, the Company reported unrealized losses on the available-for-sale securities portfolio of $26.6 million, or 12.9% of the amortized cost basis of the available-for-sale securities portfolio, compared to unrealized losses of $31.2 million, or 16.2% of the amortized cost basis of the available-for-sale securities at December 31, 2024. At June 30, 2025, the Company reported unrealized losses on the held-to-maturity securities portfolio of $35.4 million, or 17.8% of the amortized cost basis of the held-to-maturity securities portfolio, compared to $39.4 million, or 19.2% of the amortized cost basis of the held-to-maturity securities portfolio at December 31, 2024.
Current wording
At September 30, 2025, the Company reported unrealized losses on the available-for-sale securities portfolio of $23.8 million, or 11.7% of the amortized cost basis of the available-for-sale securities portfolio, compared to unrealized losses of $31.2 million, or 16.2% of the amortized cost basis of the available-for-sale securities at December 31, 2024. At September 30, 2025, the Company reported unrealized losses on the held-to-maturity securities portfolio of $31.9 million, or 16.5% of the amortized cost basis of the held-to-maturity securities portfolio, compared to $39.4 million, or 19.2% of the amortized cost basis of the held-to-maturity securities portfolio at December 31, 2024.
Previous wording
The securities in which the Company may invest are limited by regulation. Federally chartered savings banks have authority to invest in various types of assets, including U.S. Treasury obligations, securities of various government-sponsored enterprises, mortgage-backed securities, certain certificates of deposit of insured financial institutions, repurchase agreements, overnight and short-term loans to other banks, corporate debt instruments and marketable equity securities. The securities, with the exception of $8.7 million in corporate bonds, are issued by the United States government or government-sponsored enterprises and are therefore either explicitly or implicitly guaranteed as to the timely payment of contractual principal and interest. These positions are deemed to have no credit impairment, therefore, the disclosed unrealized losses with the securities portfolio relate primarily to changes in prevailing interest rates. In all cases, price improvement in future periods will be realized as the issuances approach maturity.
Current wording
The securities in which the Company may invest are limited by regulation. Federally chartered savings banks have authority to invest in various types of assets, including U.S. Treasury obligations, securities of various government-sponsored enterprises, mortgage-backed securities, certain certificates of deposit of insured financial institutions, repurchase agreements, overnight and short-term loans to other banks, corporate debt instruments and marketable equity securities. The securities, with the exception of $10.8 million in corporate bonds, are issued by the United States government or government-sponsored enterprises and are therefore either explicitly or implicitly guaranteed as to the timely payment of contractual principal and interest. These positions are deemed to have no credit impairment, therefore, the disclosed unrealized losses with the securities portfolio relate primarily to changes in prevailing interest rates. In all cases, price improvement in future periods will be realized as the issuances approach maturity.
Previous wording
Management regularly reviews the portfolio for securities in an unrealized loss position. At June 30, 2025 and December 31, 2024, the Company did not record any credit impairment charges on its securities portfolio and attributed the unrealized losses primarily due to fluctuations in general interest rates or changes in expected prepayments and not due to credit quality. The primary objective of the Company’s investment portfolio is to provide liquidity and to secure municipal deposit accounts while preserving the safety of principal. The available-for-sale and held-to-maturity portfolios are both eligible for pledging to the Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank (“FRB”) as collateral for borrowings. The portfolios are comprised of high-credit quality investments and both portfolios generated cash flows monthly from interest, principal amortization and payoffs, which support’s the Bank's objective to provide liquidity.
Current wording
Management regularly reviews the portfolio for securities in an unrealized loss position. At September 30, 2025 and December 31, 2024, the Company did not record any credit impairment charges on its securities portfolio and attributed the unrealized losses primarily due to fluctuations in general interest rates or changes in expected prepayments and not due to credit quality. The primary objective of the Company’s investment portfolio is to provide liquidity and to secure municipal deposit accounts while preserving the safety of principal. The available-for-sale and held-to-maturity portfolios are both eligible for pledging to the FHLB and FRB as collateral for borrowings. The portfolios are comprised of high-credit quality investments and both portfolios generated cash flows monthly from interest, principal amortization and payoffs, which supports the Bank's objective to provide liquidity.
Previous wording
Total gross loans increased $22.1 million, or 1.1%, from $2.1 billion, or 77.9% of total assets, at December 31, 2024 to $2.1 billion, or 77.1% of total assets, at June 30, 2025. The increase in total gross loans was primarily driven by an increase in residential real estate loans, including home equity loans, of $29.7 million, or 3.8%, and an increase in commercial and industrial loans of $22.8 million, or 10.8%. The increase in commercial and industrial loans was partially due to an increase in line of credit utilization, from 21.9% at December 31, 2024 to 26.1% at June 30, 2025. These increases were partially offset by a decrease in commercial real estate loans of $29.5 million, or 2.7%, and a decrease in consumer loans of $879,000, or 20.0%.
Current wording
Total loans increased $60.8 million, or 2.9%, from $2.1 billion, or 77.9% of total assets, at December 31, 2024 to $2.1 billion, or 77.8% of total assets, at September 30, 2025. The increase in total loans was primarily driven by an increase in residential real estate loans, including home equity loans, of $52.3 million, or 6.7%, an increase in commercial and industrial loans of $7.3 million, or 3.4%, an increase in commercial real estate loans of $2.4 million, or 0.2%, partially offset by a decrease in consumer loans of $1.2 million, or 26.5%.
Previous wording
Total delinquency was $3.9 million, or 0.18% of total loans, at June 30, 2025, compared to $5.0 million, or 0.24% of total loans at December 31, 2024. At June 30, 2025, nonaccrual loans totaled $5.8 million, or 0.27% of total loans, compared to $5.4 million, or 0.26% of total loans, at December 31, 2024. At June 30, 2025 and December 31, 2024, there were no loans 90 or more days past due and still accruing interest. Total nonaccrual assets totaled $5.8 million, or 0.21% of total assets, at June 30, 2025, compared to $5.4 million, or 0.20% of total assets, at December 31, 2024. At June 30, 2025 and December 31, 2024, the Company did not have any other real estate owned.
Current wording
Total delinquency was $4.5 million, or 0.21% of total loans, at September 30, 2025, compared to $5.0 million, or 0.24% of total loans at December 31, 2024. At September 30, 2025, nonaccrual loans totaled $5.6 million, or 0.27% of total loans, compared to $5.4 million, or 0.26% of total loans, at December 31, 2024. At September 30, 2025 and December 31, 2024, there were no loans 90 or more days past-due and still accruing interest. Total nonperforming assets (defined as nonaccrual loans and other real estate owned) totaled $5.6 million, or 0.21% of total assets, at September 30, 2025, compared to $5.4 million, or 0.20% of total assets, at December 31, 2024. At September 30, 2025 and December 31, 2024, the Company did not have any other real estate owned.
Previous wording
At June 30, 2025, the allowance for credit losses was $19.7 million, or 0.94% of total loans and 343.1% of nonaccrual loans, compared to $19.5 million, or 0.94% of total loans and 362.9% of nonaccrual loans, at December 31, 2024. Total criticized loans, defined as special mention and substandard loans, decreased $12.3 million, or 32.0%, from $38.4 million, or 1.9% of total loans, at December 31, 2024 to $26.1 million, or 1.2% of total gross loans, at June 30, 2025. During the six months ended June 30, 2025, the decrease in criticized loans was primarily due to payoffs totaling $9.2 million from four substandard commercial loan relationships.
Current wording
At September 30, 2025, the allowance for credit losses was $20.5 million, or 0.96% of total loans and 363.6% of nonaccrual loans, compared to $19.5 million, or 0.94% of total loans and 362.9% of nonaccrual loans, at December 31, 2024. Total criticized loans, defined as special mention and substandard loans, increased $1.6 million, or 4.2%, from $38.4 million, or 1.9% of total loans, at December 31, 2024 to $40.0 million, or 1.9% of total loans, at September 30, 2025.
Previous wording
Our commercial real estate portfolio is comprised of diversified property types and primarily within our geographic footprint. At June 30, 2025, the commercial real estate portfolio totaled $1.0 billion, and represented 50.1% of total gross loans. Of the $1.0 billion, $859.2 million, or 82.1%, was categorized as non-owner occupied commercial real estate and represented 316.9% of the Bank’s total risk-based capital.
Current wording
Our commercial real estate portfolio is comprised of diversified property types and primarily within our geographic footprint. At September 30, 2025, the commercial real estate portfolio totaled $1.1 billion and represented 50.7% of total loans. Of the $1.1 billion, $877.9 million, or 81.4%, was categorized as non-owner occupied commercial real estate and represented 319.8% of the Bank’s total risk-based capital.
Previous wording
The Company holds a concentration in commercial real estate loans. As of June 30, 2025, construction, land development and other land loans represented 30.3% of consolidated bank risk-based capital. During the prior 36 months, the Company has experienced an increase in its commercial real estate portfolio of 0.2%.
Current wording
The Company holds a concentration in commercial real estate loans. As of September 30, 2025, commercial real estate loans represented 392.7% of consolidated bank risk-based capital. Non-owner occupied commercial real estate loans totaled $877.9 million, or 319.8% of consolidated bank risk-based capital, and owner-occupied commercial real estate loans totaled $200.2 million, or 72.9% of consolidated bank risk-based capital. As of September 30, 2025, construction, land development and other land loans represented 35.2% of consolidated bank risk-based capital. During the prior 36 months, the Company has experienced an increase in its commercial real estate portfolio of 2.6%.
Previous wording
At June 30, 2025, of the $1.0 billion in commercial real estate loans, $859.2 million, or 82.1% of total commercial real estate loans, were categorized as non-owner occupied and represented 316.9% of total bank risk-based capital.
Current wording
At September 30, 2025, of the $1.1 billion in commercial real estate loans, $877.9 million, or 81.4% of total commercial real estate loans, were categorized as non-owner occupied and represented 319.8% of total bank risk-based capital.
Previous wording
Our total office-related commercial real estate loans (which is comprised of loans within our commercial real estate portfolio that are secured by office space, medical office space, and mixed-use where rental income is primarily from office space) totaled $196.5 million, or 72.5% of total bank risk-based capital and $200.1 million, or 73.9% of total bank risk-based capital, as of June 30, 2025 and December 31, 2024, respectively.
Current wording
Our total office-related commercial real estate loans (which is comprised of loans within our commercial real estate portfolio that are secured by office space, medical office space, and mixed-use where rental income is primarily from office space) totaled $199.0 million, or 72.5% of total bank risk-based capital and $200.1 million, or 73.9% of total bank risk-based capital, as of September 30, 2025 and December 31, 2024, respectively.
Previous wording
Office-related CRE loans are primarily concentrated in Massachusetts, where approximately 41.2% at June 30, 2025 and 41.5%, at December 31, 2024, of the total balance of office-related CRE loans are located. The Company does not have office CRE loans secured by real estate in greater Boston or New York.
Current wording
Office-related CRE loans are primarily concentrated in Massachusetts, where approximately 42.4% at September 30, 2025 and 41.5%, at December 31, 2024, of the total balance of office-related CRE loans are located. The Company does not have office CRE loans secured by real estate in greater Boston or New York.
Previous wording
At June 30, 2025, total deposits were $2.3 billion and increased $67.5 million, or 3.0%, from December 31, 2024. Core deposits, which the Company defines as all deposits except time deposits, increased $81.4 million, or 5.2%, from $1.6 billion, or 68.9% of total deposits, at December 31, 2024, to $1.6 billion, or 70.4% of total deposits, at June 30, 2025. Non-interest-bearing deposits increased $29.6 million, or 5.2%, to $595.3 million, and represent 25.5% of total deposits, money market accounts increased $25.3 million, or 3.8%, to $686.8 million, interest-bearing checking accounts increased $18.3 million, or 12.2%, to $168.7 million, and savings accounts increased $8.1 million, or 4.5%, to $189.7 million.
Current wording
At September 30, 2025, total deposits were $2.3 billion and increased $87.2 million, or 3.9%, from December 31, 2024. Core deposits, which the Company defines as all deposits except time deposits, increased $97.4 million, or 6.3%, from $1.6 billion, or 68.9% of total deposits, at December 31, 2024, to $1.7 billion, or 70.5% of total deposits, at September 30, 2025. Non-interest-bearing deposits increased $24.5 million, or 4.3%, to $590.2 million, and represent 25.1% of total deposits, money market accounts increased $41.2 million, or 6.2%, to $702.7 million, interest-bearing checking accounts increased $26.5 million, or 17.6%, to $176.8 million, and savings accounts increased $5.2 million, or 2.9%, to $186.8 million.
Previous wording
Time deposits decreased $13.9 million, or 2.0%, from $703.6 million at December 31, 2024 to $689.7 million at June 30, 2025. Brokered time deposits, which are included in time deposits, totaled $1.7 million at December 31, 2024. The Company did not have brokered time deposits at June 30, 2025. We continue our disciplined and focused approach to core relationship management and customer outreach to meet funding requirements and liquidity needs, with an emphasis on retaining a long-term core customer relationship base by competing for and retaining deposits in our local market. At June 30, 2025, the Bank’s uninsured deposits totaled $688.4 million, or 29.5% of total deposits, compared to $643.6 million, or 28.4% of total deposits, at December 31, 2024.
Current wording
Time deposits decreased $10.2 million, or 1.5%, from $703.6 million at December 31, 2024 to $693.4 million at September 30, 2025. Brokered time deposits, which are included in time deposits, totaled $1.7 million at December 31, 2024. The Company did not have brokered time deposits at September 30, 2025. We continue our disciplined and focused approach to core relationship management and customer outreach to meet funding requirements and liquidity needs, with an emphasis on retaining a long-term core customer relationship base by competing for and retaining deposits in our local market. At September 30, 2025, the Bank’s uninsured deposits totaled $701.5 million, or 29.9% of total deposits, compared to $643.6 million, or 28.4% of total deposits, at December 31, 2024.
Previous wording
At June 30, 2025, total borrowings decreased $1.3 million, or 1.1%, from $123.1 million at December 31, 2024 to $121.8 million. At June 30, 2025, short-term borrowings decreased $1.4 million, or 25.1%, to $4.0 million, compared to $5.4 million at December 31, 2024. Long-term borrowings were $98.0 million at June 30, 2025 and December 31, 2024. At June 30, 2025 and December 31, 2024, borrowings also consisted of $19.8 million in fixed-to-floating rate subordinated notes.
Current wording
At September 30, 2025, total borrowings decreased $2.4 million, or 1.9%, from $123.1 million at December 31, 2024 to $120.7 million. At September 30, 2025, short-term borrowings decreased $2.4 million, or 44.7%, to $3.0 million, compared to $5.4 million at December 31, 2024. Long-term borrowings were $98.0 million at September 30, 2025 and December 31, 2024. At September 30, 2025 and December 31, 2024, borrowings also consisted of $19.8 million in fixed-to-floating rate subordinated notes.
Previous wording
As of June 30, 2025, the Company had $452.7 million of additional borrowing capacity at the FHLB, $383.8 million of additional borrowing capacity under the FRB Discount Window and $25.0 million of other unsecured lines of credit with correspondent banks.
Current wording
As of September 30, 2025, the Company had $468.7 million of additional borrowing capacity at the FHLB, $365.2 million of additional borrowing capacity under the FRB Discount Window and $25.0 million of other unsecured lines of credit with correspondent banks.
Previous wording
At June 30, 2025, shareholders’ equity was $239.4 million, or 8.8% of total assets, compared to $235.9 million, or 8.9% of total assets, at December 31, 2024. The change was primarily attributable to a decrease in accumulated other comprehensive loss of $3.5 million, cash dividends paid of $2.9 million, repurchase of shares at a cost of $4.7 million, partially offset by net income of $6.9 million. At June 30, 2025, total shares outstanding were 20,494,501. The Company’s regulatory capital ratios continue to be strong and in excess of regulatory minimum requirements to be considered well-capitalized as defined by regulators and internal Company targets.
Current wording
At September 30, 2025, shareholders’ equity was $243.6 million, or 8.9% of total assets, compared to $235.9 million, or 8.9% of total assets, at December 31, 2024. The change was primarily attributable to net income of $10.1 million and a decrease in accumulated other comprehensive loss of $5.5 million, partially offset by cash dividends paid aggregating $4.3 million, or $0.21 per share, and the repurchase of shares at a cost of $4.8 million. At September 30, 2025, total shares outstanding were 20,491,966. The Company’s regulatory capital ratios continue to be strong and in excess of regulatory minimum requirements to be considered well-capitalized as defined by regulators and internal Company targets.
Previous wording
The Company reported net income of $4.6 million, or $0.23 per diluted share, for the three months ended June 30, 2025, compared to net income of $3.5 million, or $0.17 per diluted share, for the three months ended June 30, 2024. Net interest income increased $3.2 million, or 21.9%, provision for credit losses decreased $321,000, non-interest income decreased $423,000, or 11.0%, and non-interest expense increased $1.3 million, or 9.4%, during the same period. Return on average assets and return on average equity were 0.69% and 7.76%, respectively, for the three months ended June 30, 2025, compared to 0.55% and 6.03%, respectively, for the three months ended June 30, 2024.
Current wording
The Company reported net income of $3.2 million, or $0.16 per diluted share, for the three months ended September 30, 2025, compared to net income of $1.9 million, or $0.09 per diluted share, for the three months ended September 30, 2024. Net interest income increased $3.4 million, or 22.8%, provision for credit losses increased $352,000, or 37.4%, non-interest income increased $32,000, or 1.0%, and non-interest expense increased $1.4 million, or 9.5%, during the same period. Return on average assets and return on average equity were 0.46% and 5.20%, respectively, for the three months ended September 30, 2025, compared to 0.29% and 3.19%, respectively, for the three months ended September 30, 2024.
Previous wording
Net interest income increased $3.2 million, or 21.9%, to $17.6 million, for the three months ended June 30, 2025, from $14.5 million for the three months ended June 30, 2024. The increase in net interest income was due to an increase in interest and dividend income of $2.8 million, or 10.5%, and a decrease in interest expense of $362,000, or 2.9%. During the three months ended June 30, 2025, the Company recorded $425,000 in prepayment penalties related to payoffs in the commercial portfolio. The increase in interest income was primarily due to a $129.4 million, or 5.4%, increase in average interest-earning assets and a 20 basis point increase in the average yield on interest-earning assets, from the three months ended June 30, 2024 to the three months ended June 30, 2025.
Current wording
Net interest income increased $3.4 million, or 22.8%, to $18.1 million, for the three months ended September 30, 2025, from $14.7 million for the three months ended September 30, 2024. The increase in net interest income was due to an increase in interest and dividend income of $2.2 million, or 7.9%, and a decrease in interest expense of $1.2 million, or 8.9%. The increase in interest income was primarily due to a $112.6 million, or 4.6%, increase in average interest-earning assets and an increase in the average yield on interest-earning assets of 12 basis points, from the three months ended September 30, 2024 to the three months ended September 30, 2025.
Previous wording
The average yield on interest-earning assets, without the impact of tax-equivalent adjustments, increased 20 basis points from 4.49% for the three months ended June 30, 2024 to 4.69%, for the three months ended June 30, 2025. The average loan yield, without the impact of tax-equivalent adjustments, increased 20 basis points from 4.85% for the three months ended June 30, 2024 to 5.05%, for the three months ended June 30, 2025. During the three months ended June 30, 2025, average interest-earning assets increased $129.4 million, or 5.4% to $2.5 billion, primarily due to an increase in average loans of $64.2 million, or 3.2%, an increase in average short-term investments, consisting of cash and cash equivalents, of $44.3 million, or 309.1%, and an increase in average securities of $20.2 million, or 5.7%.
Current wording
The net interest margin increased 41 basis points from 2.40% for the three months ended September 30, 2024 to 2.81% for the three months ended September 30, 2025. The net interest margin, on a tax-equivalent basis, increased 41 basis points from 2.42%, for the three months ended September 30, 2024 to 2.83% for the three months ended September 30, 2025. The average yield on interest-earning assets, without the impact of tax-equivalent adjustments, increased 13 basis points from 4.54% for the three months ended September 30, 2024 to 4.67%, for the three months ended September 30, 2025. The average loan yield, without the impact of tax-equivalent adjustments, increased 11 basis points from 4.90% for the three months ended September 30, 2024 to 5.01% for the three months ended September 30, 2025. During the three months ended September 30, 2025, average interest-earning assets increased $112.6 million, or 4.6% to $2.6 billion, primarily due to an increase in average loans of $73.8 million, or 3.6%, an increase in average short-term investments, consisting of cash and cash equivalents, of $20.3 million, or 63.5%, and an increase in average securities of $19.4 million, or 5.5%.
Previous wording
The average cost of total funds, including non-interest bearing accounts and borrowings, decreased 18 basis points from 2.16% for the three months ended June 30, 2024 to 1.98% for the three months ended June 30, 2025. The average cost of core deposits, which the Company defines as all deposits except time deposits, increased 14 basis points from 0.87% for the three months ended June 30, 2024 to 1.01% for the three months ended June 30, 2025. The average cost of time deposits decreased 70 basis points from 4.39% for the three months ended June 30, 2024 to 3.69% for the three months ended June 30, 2025. The average cost of borrowings, including subordinated debt, increased four basis points from 5.00% for the three months ended June 30, 2024 to 5.04%, for the three months ended June 30, 2025. Average demand deposits, an interest-free source of funds, increased $24.1 million, or 4.4%, from $548.8 million, or 25.7% of total average deposits, for the three months ended June 30, 2024, to $572.8 million, or 24.9% of total average deposits, for the three months ended June 30, 2025.
Current wording
The average cost of total funds, including non-interest bearing accounts and borrowings, decreased 30 basis points from 2.24% for the three months ended September 30, 2024 to 1.94% for the three months ended September 30, 2025. The average cost of core deposits, which the Company defines as all deposits except time deposits, increased 11 basis points from 0.93% for the three months ended September 30, 2024 to 1.04% for the three months ended September 30, 2025. The average cost of time deposits decreased 93 basis points from 4.44% for the three months ended September 30, 2024 to 3.51% for the three months ended September 30, 2025. The average cost of borrowings, including subordinated debt, decreased two basis points from 5.05% for the three months ended September 30, 2024 to 5.03%, for the three months ended September 30, 2025. Average demand deposits, an interest-free source of funds, increased $22.6 million, or 4.0%, from $559.2 million, or 25.7% of total average deposits, for the three months ended September 30, 2024, to $581.8 million, or 25.0% of total average deposits, for the three months ended September 30, 2025.
Previous wording
The provision for credit losses is reviewed by management based upon our evaluation of economic and business conditions affecting our key lending areas and other conditions, such as new loan products, credit quality trends (including trends in nonperforming loans expected to result from existing conditions), collateral values, loan volumes and concentrations, specific industry conditions using reasonable and supportable forecasts and the impact that such conditions were believed to have had on the collectability of the loan portfolio.
Current wording
The provision for credit losses is reviewed by management based upon our evaluation of economic and business conditions affecting our key lending areas and other conditions, such as new loan products, credit quality trends (including trends in nonaccrual loans expected to result from existing conditions), collateral values, loan volumes and concentrations, specific industry conditions using reasonable and supportable forecasts and the impact that such conditions were believed to have had on the collectability of the loan portfolio.
Previous wording
During the three months ended June, 30, 2025, the Company recorded a reversal of credit losses of $615,000, compared to a reversal of credit losses of $294,000 during the three months ended June 30, 2024. The reversal of credit losses recorded during the three months ended June 30, 2025 was a result of a recovery in the amount of $624,000 on a previously charged-off commercial relationship acquired on October 21, 2016 from Chicopee Bancorp, Inc. As of June 30, 2025, the relationship has been paid in full and the Company does not expect to charge-off or recover any additional funds from the borrower. The provision for credit losses was determined by a number of factors: the continued strong credit performance of the Company’s loan portfolio, changes in the loan portfolio mix and Management’s consideration of existing economic conditions and the economic outlook from the Federal Reserve’s actions to control inflation. Management continues to monitor macroeconomic variables related to increasing interest rates, tariffs, inflation and concerns of an economic downturn, and believes it is appropriately reserved for the current economic environment.
Current wording
During the three months ended September 30, 2025, the Company recorded a provision for credit losses of $1.3 million, compared to a provision for credit losses of $941,000 during the three months ended September 30, 2024. The $352,000, or 37.4%, increase in the provision for credit losses was primarily due to an increase in unfunded commitments during the three months ended September 30, 2025 compared to the three months ended September 30, 2024 and a slight deterioration in macroeconomic forecasts. The provision for credit losses was determined by a number of factors: the continued strong credit performance of the Company’s loan portfolio, changes in the loan portfolio mix and Management’s consideration of existing economic conditions and the economic outlook from the Federal Reserve Bank’s actions to control inflation. Management continues to monitor macroeconomic variables related to increasing interest rates, tariffs, inflation and concerns of an economic downturn, and believes it is appropriately reserved for the current economic environment.
Previous wording
The Company recorded net recoveries of $585,000 for the three months ended June 30, 2025, as compared to net charge-offs of $10,000 for the three months ended June 30, 2024.
Current wording
The Company recorded net charge-offs of $43,000 for the three months ended September 30, 2025, as compared to net charge-offs of $98,000 for the three months ended September 30, 2024.
Previous wording
Non-interest income decreased $423,000, or 11.0%, to $3.4 million for the three months ended June 30, 2025, from $3.8 million for the three months ended June 30, 2024. During the three months ended June 30, 2025, service charges and fees on deposits increased $187,000, or 8.0%, income from BOLI increased $14,000, or 2.8%, from $502,000 for the three months ended June 30, 2024 to $516,000 for the three months ended June 30, 2025.
Current wording
Non-interest income increased $32,000, or 1.0%, to $3.2 million for the three months ended September 30, 2025, from $3.1 million for the three months ended September 30, 2024. During the three months ended September 30, 2025, service charges and fees on deposits increased $211,000, or 9.0%, income from BOLI increased $12,000, or 2.6%, from $470,000 for the three months ended September 30, 2024 to $482,000 for the three months ended September 30, 2025. During the three months ended September 30, 2025, the Company reported $117,000 in other income from loan-level swap fees on commercial loans, compared to $74,000 during the three months ended September 30, 2024.
Previous wording
For the three months ended June 30, 2025, the efficiency ratio was 74.4%, compared to 78.2% for the three months ended June 30, 2024. For the three months ended June 30, 2025, the adjusted efficiency ratio, a non-GAAP financial measure, was 75.3% compared to 82.7% for the three months ended June 30, 2024. The decreases in the efficiency ratio and the adjusted efficiency ratio were driven by an increase in total revenues, defined as the sum of net interest income and non-interest income, during the three months ended June 30, 2025, compared to the three months ended June 30, 2024. See “Explanation of Use of Non-GAAP Financial Measurements” for the related efficiency ratio calculation and a reconciliation of GAAP to non-GAAP financial measures.
Current wording
For the three months ended September 30, 2025, the efficiency ratio was 74.2%, compared to 80.6% for the three months ended September 30, 2024. The decrease in the efficiency ratio was driven by an increase in total revenues, defined as the sum of net interest income and non-interest income, of $3.4 million, or 19.0%, during the three months ended September 30, 2025, compared to the three months ended September 30, 2024.
Previous wording
Income tax expense for the three months ended June 30, 2025 was $1.4 million, or an effective tax rate of 23.7%, compared to $771,000, or an effective tax rate of 18.0%, for the three months ended June 30, 2024. The increase is due to higher projected pre-tax income for the twelve months ended December 31, 2025.
Current wording
Income tax expense for the three months ended September 30, 2025 was $1.0 million, or an effective tax rate of 24.5%, compared to $618,000, or an effective tax rate of 24.5%, for the three months ended September 30, 2024.
Previous wording
COMPARISON OF OPERATING RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND JUNE 30, 2024
Current wording
COMPARISON OF OPERATING RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 AND SEPTEMBER 30, 2024
Previous wording
For the six months ended June 30, 2025, the Company reported net income of $6.9 million, or $0.34 per diluted share, compared to $6.5 million, or $0.31 per diluted share, for the six months ended June 30, 2024. Return on average assets and return on average equity were 0.52% and 5.87% for the six months ended June 30, 2025, respectively, compared to 0.51% and 5.53% for the six months ended June 30, 2024, respectively.
Current wording
For the nine months ended September 30, 2025, the Company reported net income of $10.1 million, or $0.50 per diluted share, compared to $8.4 million, or $0.40 per diluted share, for the nine months ended September 30, 2024. Return on average assets and return on average equity were 0.50% and 5.64% for the nine months ended September 30, 2025, respectively, compared to 0.44% and 4.74% for the nine months ended September 30, 2024, respectively.
Previous wording
The following tables set forth the information relating to our average balance and net interest income for the six months ended June 30, 2025 and 2024, and reflect the average yield on interest-earning assets and average cost of interest-bearing liabilities for the periods indicated. Yields and costs are derived by dividing interest income by the average balance of interest-earning assets and interest expense by the average balance of interest-bearing liabilities for the periods shown. The interest rate spread is the difference between the total average yield on interest-earning assets and the cost of interest-bearing liabilities. Net interest margin represents tax-equivalent net interest and dividend income as a percentage of average interest-earning assets. Average balances are derived from actual daily balances over the periods indicated. Interest income includes fees earned when the real estate loans are prepaid or refinanced. For analytical purposes, the interest earned on tax-exempt assets is adjusted to a tax-equivalent basis to recognize the income tax savings which facilitates comparison between taxable and tax-exempt assets.
Current wording
The following tables set forth the information relating to our average balance and net interest income for the nine months ended September 30, 2025 and 2024, and reflect the average yield on interest-earning assets and average cost of interest-bearing liabilities for the periods indicated. Yields and costs are derived by dividing interest income by the average balance of interest-earning assets and interest expense by the average balance of interest-bearing liabilities for the periods shown. The interest rate spread is the difference between the total average yield on interest-earning assets and the cost of interest-bearing liabilities. Net interest margin represents tax-equivalent net interest and dividend income as a percentage of average interest-earning assets. Average balances are derived from actual daily balances over the periods indicated. Interest income includes fees earned when the real estate loans are prepaid or refinanced. For analytical purposes, the interest earned on tax-exempt assets is adjusted to a tax-equivalent basis to recognize the income tax savings which facilitates comparison between taxable and tax-exempt assets.
Previous wording
During the six months ended June 30, 2025, net interest income increased $3.4 million, or 11.3%, to $33.2 million, compared to $29.8 million for the six months ended June 30, 2024. The increase in net interest income was due to an increase in interest income of $4.6 million, or 8.7%, partially offset by an increase in interest expense of $1.3 million, or 5.4%.
Current wording
During the nine months ended September 30, 2025, net interest income increased $6.7 million, or 15.1%, to $51.3 million, compared to $44.5 million for the nine months ended September 30, 2024. The increase in net interest income was primarily due to an increase in interest income of $6.8 million, or 8.4%.
Previous wording
For the six months ended June 30, 2025, the net interest margin increased 14 basis points from 2.50% for the six months ended June 30, 2024 to 2.64%. The net interest margin, on a tax-equivalent basis, was 2.66% for the six months ended June 30, 2025, compared to 2.52% for the six months ended June 30, 2024. During the six months ended June 30, 2025 and the six months ended June 30, 2024, the Company recorded $425,000 and $8,000, respectively, in prepayment penalties related to payoffs in the commercial portfolio. Excluding the prepayment penalties, the net interest margin increased 11 basis points from 2.50% for the six months ended June 30, 2024 to 2.61% for the six months ended June 30, 2025.
Current wording
For the nine months ended September 30, 2025, the net interest margin increased 24 basis points from 2.46% for the nine months ended September 30, 2024 to 2.70%. The net interest margin, on a tax-equivalent basis, was 2.48% for the nine months ended September 30, 2024, compared to 2.72% for the nine months ended September 30, 2025. During the nine months ended September 30, 2025, the Company recorded $459,000 in prepayment penalties related to payoffs in the commercial portfolio, compared to $8,000 during the nine months ended September 30, 2024. During the nine months ended September 30, 2024, the Company had a fair value hedge which contributed seven basis points to the net interest margin. The net interest margin, excluding prepayment penalties and fees and income from fair value hedge, a non-GAAP financial measure, increased 29 basis points from 2.39% for the nine months ended September 30, 2024 to 2.68% for the nine months ended September 30, 2025, respectively. The fair value hedge matured in October of 2024. See “Explanation of Use of Non-GAAP Financial Measurements” for the related net interest margin, excluding prepayment penalties and fees and income from fair value hedge, calculation and a reconciliation of GAAP to non-GAAP financial measures.
Previous wording
The average yield on interest-earning assets, without the impact of tax-equivalent adjustments, was 4.63% for the six months ended June 30, 2025, compared to 4.47% for the six months ended June 30, 2024. The average loan yield, without the impact of tax-equivalent adjustments, was 4.97% for the six months ended June 30, 2025, compared to 4.84% for the six months ended June 30, 2024. During the six months ended June 30, 2025, average interest-earning assets increased $128.0 million, or 5.3%, to $2.5 billion, from the same period in 2024. The increase was primarily due to an increase in average loans of $58.0 million, or 2.9%, an increase in average short-term investments, consisting of cash and cash equivalents, of $55.4 million, or 467.4%, and an increase in average securities of $13.1 million, or 3.7%.
Current wording
The average yield on interest-earning assets, without the impact of tax-equivalent adjustments, was 4.64% for the nine months ended September 30, 2025, compared to 4.49% for the nine months ended September 30, 2024. The average loan yield, without the impact of tax-equivalent adjustments, was 4.98% for the nine months ended September 30, 2025, compared to 4.86% for the nine months ended September 30, 2024. During the nine months ended September 30, 2025, average interest-earning assets increased $122.9 million, or 5.1%, to $2.5 billion, from the same period in 2024. The increase was primarily due to an increase in average loans of $63.4 million, or 3.1%, an increase in average short-term investments, consisting of cash and cash equivalents, of $43.6 million and an increase in average securities of $15.2 million, or 4.3%.
Previous wording
The average cost of total funds, including non-interest bearing accounts and borrowings, was 2.07% for each of the six months ended June 30, 2025 and June 30, 2024. The average cost of core deposits, which the Company defines as all deposits except time deposits, increased 23 basis points to 1.05% for the six months ended June 30, 2025, from 0.82% for the six months ended June 30, 2024. The average cost of time deposits decreased 36 basis points from 4.26% for the six months ended June 30, 2024 to 3.90% for the six months ended June 30, 2025. The average cost of borrowings, including subordinated debt, increased eight basis points from 4.96% for the six months ended June 30, 2024 to 5.04% for the six months ended June 30, 2025. Average demand deposits, an interest-free source of funds, increased $18.0 million, or 3.3%, from $553.2 million, or 25.9% of total average deposits, for the six months ended June 30, 2024 to $571.2 million, or 24.8% of total average deposits, for the six months ended June 30, 2025.
Current wording
The average cost of total funds, including non-interest bearing accounts and borrowings, was 2.02% for the nine months ended September 30, 2025, compared to 2.12% for the nine months ended September 30, 2024. The average cost of core deposits, which the Company defines as all deposits except time deposits, increased 18 basis points to 1.04% for the nine months ended September 30, 2025, from 0.86% for the nine months ended September 30, 2024. The average cost of time deposits decreased 55 basis points from 4.32% for the nine months ended September 30, 2024 to 3.77% for the nine months ended September 30, 2025. The average cost of borrowings, including subordinated debt, increased five basis points from 4.99% for the nine months ended September 30, 2024 to 5.04% for the nine months ended September 30, 2025. Average demand deposits, an interest-free source of funds, increased $19.6 million, or 3.5%, from $555.3 million, or 25.8% of total average deposits, for the nine months ended September 30, 2024 to $574.8 million, or 24.9% of total average deposits, for the nine months ended September 30, 2025.
Previous wording
During the six months ended June 30, 2025, the Company recorded a reversal of credit losses of $473,000, compared to a reversal of credit losses of $844,000 during the six months ended June 30, 2024. The decrease was primarily due to changes in the loan mix as well as economic environment and related adjustments to the quantitative components of the CECL methodology. The provision for credit losses was determined by a number of factors: the continued strong credit performance of the Company’s loan portfolio, changes in the loan portfolio mix and Management’s consideration of existing economic conditions and the economic outlook from the Federal Reserve’s actions to control inflation. Management continues to monitor macroeconomic variables related to increasing interest rates, tariffs, inflation and concerns of an economic downturn, and believes it is appropriately reserved for the current economic environment.
Current wording
During the nine months ended September 30, 2025, the Company recorded a provision for credit losses of $820,000, compared to a provision for credit losses of $97,000 during the nine months ended September 30, 2024. The $723,000 increase in the provision for credit losses was primarily due to an increase in unfunded commitments, changes in the loan mix and a slight deterioration in the macroeconomic environment. The provision for credit losses was determined by a number of factors: the continued strong credit performance of the Company’s loan portfolio, changes in the loan portfolio mix and Management’s consideration of existing economic conditions and the economic outlook from the Federal Reserve Bank’s actions to control inflation. Management continues to monitor macroeconomic variables related to increasing interest rates, tariffs, inflation and concerns of an economic downturn, and believes it is appropriately reserved for the current economic environment.
Previous wording
The Company recorded net recoveries of $556,000 for the six months ended June 30, 2025, as compared to net recoveries of $57,000 for the six months ended June 30, 2024. During the six months ended June 30, 2025, the Company recorded a recovery of $624,000 on a previously charged-off commercial relationship acquired on October 21, 2016 from Chicopee Bancorp, Inc. As of June 30, 2025, the relationship has been paid in full and the Company does not expect to charge-off or recover any additional funds from the borrower.
Current wording
The Company recorded net recoveries of $513,000 for the nine months ended September 30, 2025, as compared to net charge-offs of $41,000 for the nine months ended September 30, 2024. During the nine months ended September 30, 2025, the Company recorded a recovery of $624,000 on a previously charged-off commercial relationship acquired on October 21, 2016 from Chicopee Bancorp, Inc. As of June 30, 2025, the relationship has been paid in full.
Previous wording
For the six months ended June 30, 2025, non-interest income decreased $338,000, or 5.2%, from $6.5 million during the six months ended June 30, 2024 to $6.2 million. During the same period, service charges and fees on deposits increased $252,000, or 5.5%, and income from BOLI increased $34,000, or 3.6%. During the six months ended June 30, 2025, the Company reported a gain of $243,000 on non-marketable equity investments, compared to a gain of $987,000 during the six months ended June 30, 2024. During the six months ended June 30, 2025, the Company reported $95,000 in other income from loan-level swap fees on commercial loans and did not have comparable income during the six months ended June 30, 2024. During the six months ended June 30, 2025, the Company reported unrealized gains on marketable equity securities of $20,000, compared to unrealized gains on marketable equity securities of $12,000 during the six months ended June 30, 2024. Gains and losses from the investment portfolio vary from quarter to quarter based on market conditions, as well as the related yield curve and valuation changes. During the six months ended June 30, 2025, the Company reported $11,000 in gains from mortgage banking activities and did not have comparable gains or losses during the six months ended June 30, 2024. In addition, during the six months ended June 30, 2024, the Company reported a loss on the disposal of premises and equipment of $6,000 and did not have a comparable gain or loss during the six months ended June 30, 2025.
Current wording
For the nine months ended September 30, 2025, non-interest income decreased $306,000, or 3.2%, from $9.6 million during the nine months ended September 30, 2024 to $9.3 million. During the same period, service charges and fees on deposits increased $463,000, or 6.7%, and income from BOLI increased $46,000, or 3.2%. During the nine months ended September 30, 2025, the Company reported $212,000 in other income from loan-level swap fees on commercial loans, compared to $74,000 during the same period in 2024. During the nine months ended September 30, 2025, the Company reported a gain of $243,000 on non-marketable equity investments, compared to a gain of $987,000 during the nine months ended September 30, 2024. During the nine months ended September 30, 2025, the Company reported unrealized gains on marketable equity securities of $42,000, compared to unrealized gains on marketable equity securities of $22,000 during the nine months ended September 30, 2024. Gains and losses from the investment portfolio vary from quarter to quarter based on market conditions, as well as the related yield curve and valuation changes. During the nine months ended September 30, 2025, the Company reported $11,000 in gains from mortgage banking activities, compared to $246,000 during the nine months ended September 30, 2024 due to the sale of fixed rate residential real estate loans. In addition, during the nine months ended September 30, 2024, the Company reported a loss on the disposal of premises and equipment of $6,000 and did not have a comparable gain or loss during the nine months ended September 30, 2025.
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Previous report — wording carried elsewhere
During the three months ended June 30, 2025, the Company reported an unrealized gain on marketable equity securities of $25,000, compared to unrealized gain on marketable equity securities of $4,000 during the three months ended June 30, 2024. During the three months ended June 30, 2025, the Company reported a gain of $243,000 on non-marketable equity investments, compared to a gain of $987,000 on non-marketable equity investments during the three months ended June 30, 2024. During the three months ended June 30, 2025, the Company reported $95,000 in other income from loan-level swap fees on commercial loans and did not have comparable income during the three months ended June 30, 2024. During the three months ended June 30, 2025, the Company reported $4,000 in gains from mortgage banking activities and did not have comparable income during the three months ended June 30, 2024.