Western New England Bancorp, Inc.
For the period ended Mar 31, 2026. Filed May 8, 2026.
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.
Mar 31, 2026 · Filed May 8, 2026
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 2025-09-30; filed 2025-11-07.
0001999371-25-017260
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-08.
0001999371-26-010347
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 127 previous paragraphs and 96 current paragraphs.
44 unchanged; 45 reworded; 6 added; 30 removed; 8 previous and 1 current paragraphs rearranged.
Tables are not compared: 64 previous and 55 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 (6)
Current report
Of the $37.6 million in loans designated special mention at March 31, 2026, $14.7 million, or 39.1%, are commercial and industrial loans, and $22.9 million, or 60.9%, are commercial real estate loans. Of the $21.1 million in loans categorized substandard at March 31, 2026, $7.3 million, or 34.4%, are commercial and industrial loans, $9.5 million, or 44.8%, are commercial real estate loans, and $4.4 million, or 20.8%, are residential real estate loans. Of the total $58.7 million in criticized loans at March 31, 2026, 96.1% are current and paying as agreed.
Current report
The increase in special mention loans from December 31, 2025 to March 31, 2026 resulted from the downgrade of two commercial relationships totaling $21.5 million, from “pass” risk ratings to special mention. The two relationships are paying as agreed and are being monitored closely by management.
Current report
The Company reported an increase in net income of $2.5 million, or 107.4%, from $2.3 million, or $0.11 per diluted share, for the three months ended March 31, 2025, to $4.8 million, or $0.24 per diluted share, for the three months ended March 31, 2026. Net interest income increased $3.3 million, or 21.2%, to $18.8 million, for the three months ended March 31, 2026, from $15.5 million for the three months ended March 31, 2025.
Current report
Non-interest income increased $674,000, or 24.4%, from $2.8 million for the three months ended March 31, 2025 to $3.4 million for the three months ended March 31, 2026. During the three months ended March 31, 2026, non-interest income included the recognition of $449,000 in BOLI death benefits. During the same period, service charges and fees on deposits increased $108,000, or 5.3%, and wealth management income increased $129,000, or 49.4%, from $261,000 for the three months ended March 31, 2025 to $390,000 for the three months ended March 31, 2026. Income from BOLI increased $3,000, or 0.6%, from $473,000 for the three months ended March 31, 2025 to $476,000 for the three months ended March 31, 2026.
Current report
Non-interest expense increased $824,000, or 5.4%, from $15.2 million for the three months ended March 31, 2025 to $16.0 million for the three months ended March 31, 2026. The increase in non-interest expense was primarily due to an increase of $816,000, or 9.7%, in salaries and benefits due to increases in health insurance benefits and annual merit increases. Occupancy expense increased $150,000, or 10.6%, due to $255,000 in snow removal costs during the three months ended March 31, 2026, compared to $143,000 for the three months ended March 31, 2025. Debit card processing and ATM network costs increased $86,000, or 14.9%; software related expenses increased $30,000, or 4.6%; and advertising expense increased $13,000, or 3.0%. These expenses were partially offset by a decrease in other non-interest expense of $80,000, or 5.9%, a decrease in data processing expense of $61,000, or 6.9%, a decrease in furniture and equipment expense of $54,000, or 11.1%, a decrease in FDIC insurance expense of $39,000, or 9.0%, and a decrease in professional fees of $37,000, or 6.8%.
Current report
For the three months ended March 31, 2026 and the three months ended March 31, 2025, the efficiency ratio was 71.9% and 83.0%, respectively. For the three months ended March 31, 2026, the adjusted efficiency ratio, a non-GAAP financial measure, was 73.4% compared to 83.0% for the three months ended March 31, 2025. The decreases in both the efficiency ratio and the adjusted efficiency ratio were driven by a $4.0 million, or 21.7%, increase in total revenues from the three months ended March 31, 2025 to the three months ended March 31, 2026, while expenses increased $824,000, or 5.4%, during the same period. See “Explanation of Use of Non-GAAP Financial Measurements” for the related efficiency ratio and adjusted efficiency ratio calculations and a reconciliation of GAAP to non-GAAP financial measures.
Removed paragraphs (30)
Previous report
Investment Securities.
Previous report
Loans.
Previous report
Management is closely monitoring the loan portfolio for any signs of deterioration in borrowers’ financial condition and also in light of speculation that commercial real estate values may deteriorate as the market continues to adjust to higher vacancies and interest rates. We are taking steps to mitigate risk in our loan portfolio. A summary of our past due and nonaccrual loans by class is listed in Note 5 of the accompanying unaudited consolidated financial statements.
Previous report
The Company’s commercial real estate loans are considered to be relatively diversified by borrower, industry and concentrated in the New England geographical area. A significant portion of the loan portfolio consists of commercial real estate loans, primarily made in Massachusetts, and to a lesser degree, Connecticut, and secured by real estate or other collateral in the market. Although these loans are made to a diversified pool of unrelated borrowers across numerous businesses, adverse developments in the local real estate market could have an adverse impact on this portfolio of loans and the Company’s income and financial position. While our basic market area is in Massachusetts, the Company has made loans outside that market area where the applicant is an existing customer, and the nature and quality of such loans was consistent with the Company's lending policies.
Previous report
We continuously monitor the asset quality of our loan portfolio. For the commercial portfolio, we monitor credit quality using a risk rating scale, which assigns a risk-grade to each borrower based on a number of quantitative and qualitative factors associated with a commercial loan transaction. Management utilizes a loan risk rating methodology based on an 8-point scale. Pass grades are 0-4 and non-pass categories, which align with regulatory guidelines, include: special mention (5), substandard (6), doubtful (7) and loss (8). Risk rating assignment is determined by analyzing key factors, which may include: industry and market conditions, position within the industry, earnings trends, operating cash flow, debt capacity, guarantor strength, management, financial reporting, collateral and other considerations.
Previous report
Total reported loans for construction, land development, and other land represent 100 percent or more of the institution’s total risk-based capital; or
Previous report
Total commercial real estate loans, as defined in this guidance, represent 300 percent or more of the institution’s total risk-based capital, and the outstanding balance of the institution’s commercial real estate loan portfolio has increased by 50 percent or more during the prior 36 months.
Previous report
Borrowings.
Previous report
Capital.
Previous report
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 report
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 report
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 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.
Previous 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%.
Previous report
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 report
General.
Previous report
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 report
Net Interest and Dividend Income.
Previous report
Rate/Volume Analysis.
Previous report
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 report
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 report
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 report
Provision for Credit Losses.
Previous report
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 report
Non-interest Income.
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Non-interest Expense.
Previous report
For the nine months ended September 30, 2025, non-interest expense increased $3.1 million, or 7.2%, to $46.6 million, compared to $43.5 million for the nine months ended September 30, 2024. The increase in non-interest expense was primarily due to an increase in salaries and employee benefits of $2.2 million, or 9.1%, due to an increase in deferred compensation expense to reflect updated performance award estimates. Advertising expense increased $346,000, or 36.1%, data processing expense increased $154,000, or 6.0%, FDIC insurance expense increased $135,000, or 12.6%, occupancy expense increased $116,000, or 3.1%, software related expenses increased $79,000, or 4.2%, debit card and ATM processing fees increased $40,000, or 2.2%, and other non-interest expense increased $130,000, or 3.3%. Professional fees decreased $61,000, or 3.6%, and furniture and equipment expense decreased $19,000, or 1.3%.
Previous report
For the nine months ended September 30, 2025, the efficiency ratio was 76.9%, compared to 80.3% for the nine months ended September 30, 2024. The decrease in the efficiency ratio was driven by higher revenues, defined as the sum of net interest income and non-interest income, during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.
Previous report
Income Taxes.
Previous report
Income tax expense for the nine months ended September 30, 2025 was $3.1 million, representing an effective tax rate of 23.6%, compared to $2.2 million, representing an effective tax rate of 20.9%, for the nine months ended September 30, 2024. The increase is due to higher projected pre-tax income for the twelve months ended December 31, 2025.
Reworded paragraphs (45)
Previous wording
We have adopted a growth-oriented strategy that continues to focus on increasing commercial lending and residential lending. Our strategy also calls for increasing deposit relationships, specifically core deposits (defined below), and broadening our product lines and services. We believe that this business strategy is best for our long-term success and viability, and complements our existing commitment to high-quality customer service.
Current wording
The Company has adopted a growth-oriented strategy that continues to focus on increasing commercial lending and residential lending. Our strategy also calls for increasing deposit relationships, specifically core deposits, which the Company defines as all deposits except for time deposits, and broadening our product lines and services. We believe that this business strategy is best for our long-term success and viability and complements our existing commitment to high-quality customer service.
Previous 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.
Current wording
You should read the following financial results for the three months ended March 31, 2026 in the context of this strategy.
Previous 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.
Current wording
There have been no material changes to our critical accounting policies during the three months ended March 31, 2026. 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 2025 Annual Report.
Previous 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%.
Current wording
At March 31, 2026, total assets were $2.8 billion, an increase of $28.0 million, or 1.0%, from December 31, 2025. The increase in total assets was primarily due to an increase in total loans of $17.2 million, or 0.8%, and an increase in cash and cash equivalents of $15.8 million, or 39.0%.
Previous 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.
Current wording
At March 31, 2026, the investment securities portfolio totaled $359.2 million, or 13.0% of total assets, compared to $365.2 million, or 13.3% of total assets, at December 31, 2025. At March 31, 2026, the Company’s available-for-sale securities portfolio, recorded at fair market value, was $173.2 million, a decrease of $2.6 million, or 1.5%, from $175.8 million at December 31, 2025. The held-to-maturity securities portfolio, recorded at amortized cost, decreased $3.4 million, or 1.8%, from $188.8 million at December 31, 2025 to $185.4 million at March 31, 2026.
Previous 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.
Current wording
At March 31, 2026, the Company reported net unrealized losses on the available-for-sale securities portfolio of $23.0 million, or 11.7% of the amortized cost basis of the available-for-sale securities portfolio, compared to net unrealized losses of $22.4 million, or 11.3% of the amortized cost basis of the available-for-sale securities at December 31, 2025. At March 31, 2026, the Company reported net unrealized losses on the held-to-maturity securities portfolio of $30.6 million, or 16.5% of the amortized cost basis of the held-to-maturity securities portfolio, compared to $30.3 million, or 16.1% of the amortized cost basis of the held-to-maturity securities portfolio at December 31, 2025.
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 $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.
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 $11.0 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 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.
Current wording
Management regularly reviews the portfolio for securities in an unrealized loss position. At March 31, 2026 and December 31, 2025, 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 supports the Bank’s objective to provide liquidity.
Previous 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%.
Current wording
Total loans increased $17.2 million, or 0.8%, from $2.2 billion, or 79.7% of total assets, at December 31, 2025 to $2.2 billion, or 79.5% of total assets, at March 31, 2026. The increase in total loans was primarily driven by an increase in residential real estate loans, including home equity loans, of $9.6 million, or 1.1%, an increase in commercial and industrial loans of $6.0 million, or 2.7%, and an increase in commercial real estate loans of $2.1 million, or 0.2%.
Previous 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.
Current wording
Total delinquency was $3.2 million, or 0.14% of total loans, at March 31, 2026, compared to $3.1 million, or 0.14% of total loans, at December 31, 2025. At March 31, 2026, nonaccrual loans totaled $4.7 million, or 0.21% of total loans, compared to $5.2 million, or 0.24% of total loans, at December 31, 2025. At March 31, 2026 and December 31, 2025, 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 $4.7 million, or 0.17% of total assets, at March 31, 2026, compared to $5.2 million, or 0.19% of total assets, at December 31, 2025. At March 31, 2026 and December 31, 2025, the Company did not have any other real estate owned.
Previous 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.
Current wording
At March 31, 2026, total criticized loans, defined as special mention and substandard loans, totaled $58.7 million, or 2.7% of total loans, compared to $39.7 million, or 1.8% of total loans, at December 31, 2025. Loans designated special mention, which are not considered classified, increased $20.5 million, from $17.1 million, or 0.8% of total loans, at December 31, 2025 to $37.6 million, or 1.7% of total loans, at March 31, 2026. During the same period, substandard loans decreased $1.4 million, or 6.1%, to $21.1 million, or 1.0% of total loans.
Previous 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.
Current wording
Our commercial real estate portfolio consists of diversified property types that are primarily within our geographic footprint. At March 31, 2026, the commercial real estate portfolio totaled $1.1 billion and represented 50.1% of total loans. Of the $1.1 billion, $918.2 million, or 83.4%, was categorized as non-owner occupied commercial real estate and represented 329.8% of the Bank’s total risk-based capital.
Previous wording
The OCC, the FRB, and the FDIC (“Agencies”)issued guidance in 2006 which addresses institutions with increased concentrations of commercial real estate (“CRE”) loans. The guidance does not establish specific CRE lending limits; rather, it promotes sound risk management practices and appropriate levels of capital that will enable institutions to continue to pursue CRE lending in a safe and sound manner. In developing this guidance, the Agencies recognized that different types of CRE lending present different levels of risk, and that consideration should be given to the lower risk profiles and historically superior performance of certain types of CRE, such as well-structured multifamily housing finance, when compared to others, such as speculative office space construction.
Current wording
The OCC, the FRB, and the FDIC (“Agencies”) issued guidance in 2006 which addresses institutions with increased concentrations of commercial real estate (“CRE”) loans. The guidance does not establish specific CRE lending limits; rather, it promotes sound risk management practices and appropriate levels of capital that will enable institutions tocontinue to pursue CRE lending in a safe and sound manner. In developing this guidance, the Agencies recognized that different types of CRE lending present different levels of risk, and that consideration should be given to the lower risk profiles and historically superior performance of certain types of CRE, such as well-structured multifamily housing finance, when compared to others, such as speculative office space construction.
Previous 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%.
Current wording
The Company holds a concentration in commercial real estate loans. As of March 31, 2026, commercial real estate loans represented 395.5% of consolidated bank risk-based capital. Non-owner occupied commercial real estate loans totaled $918.2 million, or 329.8% of consolidated bank risk-based capital, and owner-occupied commercial real estate loans totaled $182.9 million, or 65.7% of consolidated bank risk-based capital. As of March 31, 2026, construction, land development, and other land loans represented 39.6% of consolidated bank risk-based capital. During the prior 36 months, the Company has experienced an increase in its commercial real estate portfolio of 7.6%.
Previous 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.
Current wording
At March 31, 2026, of the $1.1 billion in commercial real estate loans, $918.2 million, or 83.4% of total commercial real estate loans, were categorized as non-owner occupied and represented 329.8% of total bank risk-based capital.
Previous wording
At December 31, 2024, of the $1.1 billion in commercial real estate loans, $880.8 million, or 81.9% of total commercial real estate loans, were categorized as non-owner occupied and represented 325.2% of total bank risk-based capital.
Current wording
At December 31, 2025, of the $1.1 billion in commercial real estate loans, $910.2 million, or 82.8% of total commercial real estate loans, were categorized as non-owner occupied and represented 328.6% 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 $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.
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 $194.5 million, or 69.9% of total bank risk-based capital, and $195.2 million, or 70.5% of total bank risk-based capital, as of March 31, 2026 and December 31, 2025, respectively.
Previous 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.
Current wording
CRE office loans are primarily concentrated in Massachusetts, where approximately 42.3% of the total balance of CRE office loans were located at both March 31, 2026 and December 31, 2025, respectively. The Company does not have CRE loans secured by office real estate in greater Boston or New York.
Previous wording
The following table sets forth the office-related CRE loans for non-owner occupied and owner occupied CRE and their credit quality indicators as of the dates indicated:
Current wording
The following table sets forth the CRE office loans for non-owner occupied and owner occupied CRE and their credit quality indicators as of the dates indicated:
Previous 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.
Current wording
At March 31, 2026, total deposits were $2.4 billion, an increase of $20.9 million, or 0.9%, from December 31, 2025. Core deposits, which the Company defines as all deposits except time deposits, increased $1.0 million, or 0.1%, from $1.7 billion, or 70.8% of total deposits, at December 31, 2025, to $1.7 billion, or 70.2% of total deposits, at March 31, 2026. Non-interest-bearing deposits increased $3.2 million, or 0.5%, to $597.7 million, and represented 25.1% of total deposits; money market accounts increased $18.1 million, or 2.5%, to $733.7 million; and savings accounts increased $10.5 million, or 5.6%, to $197.1 million. These increases were partially offset by a decrease in interest-bearing checking accounts of $30.8 million, or 17.7%, to $143.5 million.
Previous 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.
Current wording
Time deposits increased $19.9 million, or 2.9%, from $689.9 million at December 31, 2025 to $709.8 million at March 31, 2026. The Company did not have brokered time deposits at March 31, 2026 and December 31, 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 March 31, 2026, the Bank’s uninsured deposits totaled $706.2 million, or 29.6% of total deposits, compared to $697.6 million, or 29.5% of total deposits, at December 31, 2025. At March 31, 2026, there was one deposit relationship, which is our largest deposit relationship, with a household concentration comprising 5.7% of total deposits, compared to 5.0% of total deposits at December 31, 2025. The next largest deposit relationship is to a local municipality with a concentration of 1.5% of total deposits at March 31, 2026 and 1.9% at December 31, 2025.
Previous 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.
Current wording
At March 31, 2026, total borrowings were $116.6 million, an increase of $10.5 million, or 9.9%, from $106.1 million at December 31, 2025. At March 31, 2026, short-term borrowings increased $10.5 million, or 79.4%, to $23.8 million, compared to $13.3 million at December 31, 2025. At March 31, 2026 and December 31, 2025, long-term borrowings totaled $73.0 million. At March 31, 2026 and December 31, 2025, borrowings also consisted of $19.8 million in fixed-to-floating rate subordinated notes.
Previous 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.
Current wording
As of March 31, 2026, the Company had $485.1 million of additional borrowing capacity at the FHLB, $337.3 million of additional borrowing capacity under the FRB Discount Window and $25.0 million of other unsecured lines of credit with two correspondent banks.
Previous 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.
Current wording
At March 31, 2026, shareholders’ equity was $248.1 million, or 9.0% of total assets, compared to $247.6 million, or 9.1% of total assets, at December 31, 2025. The change was primarily attributable to net income of $4.8 million, partially offset by an increase in accumulated other comprehensive loss of $458,000, cash dividends paid of $1.4 million and the repurchase of 186,000 shares at a cost of $2.5 million. At March 31, 2026, total shares outstanding were 20,240,872. 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 following tables set forth the information relating to our average balance and net interest income for the three 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 annualized interest income by the average balance of interest-earning assets and annualized 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 three months ended March 31, 2026 and the three months ended March 31, 2025, 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 annualized interest income by the average balance of interest-earning assets and annualized 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
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.
Current wording
Net interest income increased $3.3 million, or 21.2%, to $18.8 million, for the three months ended March 31, 2026, from $15.5 million for the three months ended March 31, 2025. The increase in net interest income was due to an increase in interest and dividend income of $1.8 million, or 6.5%, and a decrease in interest expense of $1.4 million, or 11.2%. The decrease in interest expense was primarily due to a decrease in the average cost of interest-bearing liabilities of 36 basis points, from 2.82% for the three months ended March 31, 2025 to 2.46% for the three months ended March 31, 2026. As a result, the net interest margin increased from 2.49% for the three months ended March 31, 2025, to 2.95% for the three months ended March 31, 2026. The net interest margin, on a tax-equivalent basis, increased 46 basis points from 2.51% for the three months ended March 31, 2025 to 2.97% for the three months ended March 31, 2026.
Previous 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%.
Current wording
The average yield on interest-earning assets, without the impact of tax-equivalent adjustments, increased 18 basis points from 4.56% for the three months ended March 31, 2025 to 4.74% for the three months ended March 31, 2026. The average loan yield, without the impact of tax-equivalent adjustments, increased 19 basis points, from 4.90% for the three months ended March 31, 2025, to 5.09% for the three months ended March 31, 2026. During the three months ended March 31, 2026, average interest-earning assets increased $61.2 million, or 2.4%, to $2.6 billion, primarily due to an increase in average loans of $113.0 million, or 5.5%, partially offset by a decrease in average short-term investments, consisting of cash and cash equivalents, of $51.2 million, or 67.3%.
Previous 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.
Current wording
The average cost of total funds, including non-interest bearing accounts and borrowings, decreased 28 basis points from 2.16% for the three months ended March 31, 2025, to 1.88% for the three months ended March 31, 2026. The average cost of core deposits, which the Company defines as all deposits except time deposits, decreased six basis points from 1.08% for the three months ended March 31, 2025 to 1.02% for the three months ended March 31, 2026. The average cost of time deposits decreased 70 basis points from 4.11% for the three months ended March 31, 2025 to 3.41% for the three months ended March 31, 2026. The average cost of borrowings, including subordinated debt, decreased 29 basis points from 5.04% for the three months ended March 31, 2025 to 4.75% for the three months ended March 31, 2026. Average demand deposits, an interest-free source of funds, increased $18.9 million, or 3.3%, from $569.6 million, or 24.8% of total average deposits, for the three months ended March 31, 2025, to $588.5 million, or 25.1% of total average deposits, for the three months ended March 31, 2026.
Previous 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.
Current wording
During the three months ended March 31, 2026, the Company recorded a provision for credit losses of $75,000, a decrease of $67,000, or 47.2%, from $142,000 for the three months ended March 31, 2025. The decrease was primarily due to a decrease in unfunded commitments. The provision for credit losses was determined by a number of factors, including, 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. Management will continue to monitor macroeconomic variables related to the current interest rate environment, tariffs, global unrest resulting from conflicts, and the concerns of an economic downturn. Management believes it is appropriately reserved for the current economic environment and supportable forecast.
Previous wording
Although we believe that we have established and maintained the allowance for credit losses at adequate levels, future adjustments may be necessary if economic, real estate and other conditions differ substantially from the current operating environment.
Current wording
During the three months ended March 31, 2026, the Company recorded net charge-offs of $55,000, compared to net charge-offs of $29,000 for the three months ended March 31, 2025. Although we believe that we have established and maintained the allowance for credit losses at adequate levels, future adjustments may be necessary if economic, real estate, and other conditions differ substantially from the current operating environment.
Previous 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.
Current wording
During the three months ended March 31, 2026 and the three months ended March 31, 2025, the Company reported unrealized losses on marketable equity securities of $13,000 and $5,000, respectively. During the three months ended March 31, 2025, the Company reported a gain of $7,000 from mortgage banking activities and did not have a comparable gain or loss during the three months ended March 31, 2026.
Previous 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.
Current wording
For the three months ended March 31, 2026, income tax expense was $1.4 million, with an effective tax rate of 22.6%, compared to $664,000, with an effective tax rate of 22.4%, for the three months ended March 31, 2025.
Previous wording
We believe that it is common practice in the banking industry to present interest income and related yield information on tax-exempt loans and securities on a tax-equivalent basis, as well as presenting tangible book value per share and that such information is useful to investors because it facilitates comparisons among financial institutions. However, the adjustment of interest income and yields on tax-exempt loans and securities to a tax-equivalent amount, as well as the presentation of tangible book value per share may be considered to include financial information that is not in compliance with GAAP. A reconciliation from GAAP to non-GAAP is provided below.
Current wording
We believe that it is common practice in the banking industry to present interest income and related yield information on tax-exempt loans and securities on a tax-equivalent basis, as well as presenting tangible book value per share and adjusted efficiency ratio, and that such information is useful to investors because it facilitates comparisons among financial institutions. However, the adjustment of interest income and yields on tax-exempt loans and securities to a tax-equivalent amount, as well as the presentation of tangible book value per share and adjusted efficiency ratio, may be considered to include financial information that is not in compliance with GAAP. A reconciliation from GAAP to non-GAAP is provided below.
Previous wording
The term “liquidity” refers to our ability to generate adequate amounts of cash to fund loan originations, loan purchases, deposit withdrawals and operating expenses. Our primary sources of liquidity are deposits, scheduled amortization and prepayments of loan principal and mortgage-backed securities, maturities and calls of investment securities and funds provided by our operations. We also can borrow funds from the FHLB based on eligible collateral of loans and securities. Our material cash commitments include funding loan originations, fulfilling contractual obligations with third-party service providers, maintaining operating leases for certain of our Bank properties and satisfying repayment of our long-term debt obligations.
Current wording
The term “liquidity” refers to our ability to generate adequate amounts of cash to fund loan originations, loan purchases, deposit withdrawals and operating expenses. Our primary sources of liquidity are deposits, scheduled amortization and prepayments of loan principal and mortgage-backed securities, maturities, and calls of investment securities and funds provided by our operations. We also can borrow funds from the FHLB and the FRB based on eligible collateral of loans and securities. Our material cash commitments include funding loan originations, fulfilling contractual obligations with third-party service providers, maintaining operating leases for certain of our Bank properties and satisfying repayment of our long-term debt obligations.
Previous wording
At September 30, 2025 and December 31, 2024, outstanding borrowings from the FHLB were $98.0 million. At September 30, 2025, we had $468.7 million in available borrowing capacity with the FHLB. We have the ability to increase our borrowing capacity with the FHLB by pledging investment securities or additional loans.
Current wording
At March 31, 2026 and December 31, 2025, outstanding borrowings from the FHLB were $93.0 million and $83.0 million, respectively. At March 31, 2026, the Company had $485.1 million in available borrowing capacity with the FHLB, including the $9.5 million Ideal Way Line of Credit. The Company has the ability to increase its borrowing capacity with the FHLB by pledging additional investment securities or loans.
Previous wording
The Company has an available line of credit of $365.2 million with the FRB Discount Window at an interest rate determined and reset on a daily basis. Borrowings from the FRB Discount Window are secured by certain eligible loan collateral and securities from the Company’s investment portfolio not otherwise pledged. As of September 30, 2025 and December 31, 2024, there were no advances outstanding under the FRB Discount Window.
Current wording
The Company has an available line of credit of $337.3 million with the FRB Discount Window at an interest rate determined and reset on a daily basis. Borrowings from the FRB Discount Window are secured by certain eligible loan collateral and securities from the Company’s investment portfolio not otherwise pledged. As of March 31, 2026 and December 31, 2025, there were no advances outstanding under either of these lines.
Previous wording
In addition, we have available lines of credit of $15.0 million and $10.0 million with other correspondent banks. Interest rates on these lines are determined and reset on a daily basis by each respective bank. At September 30, 2025 and December 31, 2024, we did not have an outstanding balance under either of these lines of credit. In addition, we may enter into reverse repurchase agreements with approved broker-dealers. Reverse repurchase agreements are agreements that allow us to borrow money using our securities as collateral.
Current wording
In addition, we have available lines of credit of $15.0 million and $10.0 million with two correspondent banks. Interest rates on these lines are determined and reset on a daily basis by each respective bank. At March 31, 2026 and December 31, 2025, the Company did not have an outstanding balance under either of these lines of credit. In addition, the Company may enter into reverse repurchase agreements with approved broker-dealers which would allow the Company to borrow money by pledging securities as collateral.
Previous wording
We also have outstanding at any time, a significant number of commitments to extend credit and provide financial guarantees to third parties. These arrangements are subject to strict credit control assessments. Guarantees specify limits to our obligations. Because many commitments and almost all guarantees expire without being funded in whole or in part, the contract amounts are not estimates of future cash flows. We are also obligated under agreements with the FHLB to repay borrowed funds and are obligated under leases for certain of our branches and equipment.
Current wording
The Company also has outstanding, at any time, a significant number of commitments to extend credit and provide financial guarantees to third parties. These arrangements are subject to strict credit control assessments. Guarantees specify limits to our obligations. Since many commitments and almost all guarantees expire without being funded in whole or in part, the contract amounts are not estimates of future cash flows. The Company is also obligated under agreements with the FHLB to repay borrowed funds and is obligated under leases for certain branches, ATMs and equipment.
Previous wording
The Company’s primary activities are the origination of commercial real estate loans, commercial and industrial loans and residential real estate loans, as well as and the purchase of mortgage-backed and other investment securities. At September 30, 2025, the Company had approximately $174.6 million in loan commitments and letters of credit to borrowers and approximately $378.2 million in available home equity and other unadvanced lines of credit.
Current wording
The Company’s primary activities are the origination of commercial real estate loans, commercial and industrial loans, and residential real estate loans, as well as and the purchase of mortgage-backed and other investment securities. At March 31, 2026, the Company had approximately $131.2 million in loan commitments and letters of credit to borrowers and approximately $349.4 million in available home equity and other unadvanced lines of credit.
Previous wording
Deposit inflows and outflows are affected by the level of interest rates, the products and interest rates offered by competitors and by other factors. At September 30, 2025, time deposit accounts scheduled to mature within one year totaled $664.2 million. Based on the Company’s deposit retention experience and current pricing strategy, we anticipate that a significant portion of these time deposits will remain on deposit. We monitor our liquidity position frequently and anticipate that it will have sufficient funds to meet our current funding commitments for the next 12 months and beyond.
Current wording
Deposit inflows and outflows are affected by the level of interest rates, the products and interest rates offered by competitors and by other factors. At March 31, 2026, time deposit accounts scheduled to mature within one year totaled $676.4 million, or 95.3% of total time deposits. Based on the Company’s deposit retention experience and current pricing strategy, we anticipate that a significant portion of these time deposits will remain on deposit. We monitor our liquidity position frequently and anticipate that it will have sufficient funds to meet our current funding commitments for the next 12 months and beyond.
Showing the first 40 of 45 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
At March 31, 2026, the allowance for credit losses was $20.5 million, or 0.93% of total loans and 436.9% of nonaccrual loans, compared to $20.3 million, or 0.93% of total loans and 393.2% of nonaccrual loans, at December 31, 2025.
Rearranged previous paragraphs (8)
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
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 report — wording carried elsewhere
COMPARISON OF OPERATING RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 AND SEPTEMBER 30, 2024
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
The following table shows how changes in interest rates and changes in the volume of interest-earning assets and interest-bearing liabilities have affected our interest and dividend income and interest expense during the periods indicated. Information is provided in each category with respect to: (1) interest income changes attributable to changes in volume (changes in volume multiplied by prior rate); (2) interest income changes attributable to changes in rate (changes in rate multiplied by prior volume); and (3) the net change.
Previous report — wording carried elsewhere
The changes attributable to the combined impact of volume and rate have been allocated proportionately to the changes due to volume and the changes due to rate.
Previous report — wording carried elsewhere
Although we believe that we have established and maintained the allowance for credit losses at adequate levels, future adjustments may be necessary if economic, real estate and other conditions differ substantially from the current operating environment.
Previous report — wording carried elsewhere
We also have outstanding, at any time, a significant number of commitments to extend credit and provide financial guarantees to third parties. These arrangements are subject to strict credit control assessments. Guarantees specify limits to our obligations. Because many commitments and almost all guarantees expire without being funded in whole or in part, the contract amounts are not estimates of future cash flows.