Western New England Bancorp, Inc.
For the period ended Jun 30, 2026. Filed Aug 7, 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.
Jun 30, 2026 · Filed Aug 7, 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 2026-03-31; filed 2026-05-08.
0001999371-26-010347
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-07.
0001999371-26-017418
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 96 previous paragraphs and 129 current paragraphs.
50 unchanged; 41 reworded; 32 added; 5 removed; 0 previous and 6 current paragraphs rearranged.
Tables are not compared: 55 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 (32)
Current report
Investment Securities.
Current report
Loans.
Current 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
Current 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.
Current report
Borrowings.
Current report
Capital.
Current report
The Company reported a decrease in net income of $992,000, or 21.6%, from $4.6 million, or $0.23 per diluted share, for the three months ended June 30, 2025, to $3.6 million, or $0.18 per diluted share, for the three months ended June 30, 2026. Net interest income increased $1.7 million, or 9.5%, provision for credit losses increased $2.2 million, non-interest income decreased $17,000, or 0.5%, and non-interest expense increased $699,000, or 4.5%. Return on average assets and return on average equity were 0.53% and 5.84%, respectively, for the three months ended June 30, 2026, compared to 0.69% and 7.76%, respectively, for the three months ended June 30, 2025.
Current report
Net interest income increased $1.7 million, or 9.5%, to $19.3 million, for the three months ended June 30, 2026, from $17.6 million for the three months ended June 30, 2025. The increase in net interest income was due to an increase in interest and dividend income of $1.2 million, or 3.9%, and a decrease in interest expense of $510,000, or 4.3%. During the three months ended June 30, 2026, and the three months ended June 30, 2025, the Company recorded prepayment penalties related to payoffs in the commercial real estate portfolio of $82,000 and $425,000, respectively. Excluding the prepayment penalties, net interest income increased $2.0 million, or 11.7%. The increase in interest and dividend income was primarily due to the increase in average loans of $108.5 million, or 5.2%, and an increase of seven basis points in the average loan yield, without the impact of tax-equivalent adjustments, from the three months ended June 30, 2025 to the three months ended June 30, 2026.
Current report
The net interest margin increased 20 basis points from 2.80% for the three months ended June 30, 2025 to 3.00% for the three months ended June 30, 2026. The net interest margin, on a tax-equivalent basis, increased 20 basis points from 2.82% for the three months ended June 30, 2025 to 3.02% for the three months ended June 30, 2026. Excluding the prepayment penalties discussed above, the net interest margin increased 25 basis points from 2.73% for the three months ended June 30, 2025 to 2.98%, for the three months ended June 30, 2026.
Current report
Provision for (Reversal of) Credit Losses.
Current report
During the three months ended June 30, 2026, the Company recorded a provision for credit losses of $1.6 million, due to the partial charge-off of $1.8 million on the participation loan discussed above. The Company does not have any additional expected losses to the borrower or guarantor associated with the participation loan. At June 30, 2026, the Company’s portion of the remaining carrying value of the participation loan was $1.6 million. The Company currently expects full recovery of its portion of the remaining carrying value through the anticipated sale of the underlying collateral. During the three months ended June 30, 2025, the Company recorded a reversal of credit losses of $615,000 as a result of a recovery in the amount of $624,000 on a charged-off commercial relationship acquired on October 21, 2016 from Chicopee Bancorp, Inc.
Current report
The provision for credit losses was also determined by a number of factors: the continued overall credit performance of the Company’s diversified 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. Management believes that the allowance for credit losses are at adequate levels, however, future adjustments may be necessary if economic, real estate market values and other conditions differ substantially from the current operating environment.
Current report
During the three months ended June 30, 2026, the Company recorded net charge-offs of $1.8 million, or 0.33% of average loans, on an annualized basis, compared to net recoveries of $585,000, or 0.11% of average loans, on an annualized basis, for the three months ended June 30, 2025. During the three months ended June 30, 2026, the increase in net charge-offs was due to the $1.8 million charge-off of the participation loan discussed above.
Current report
During the three months ended June 30, 2026, non-interest income decreased $17,000, or 0.5%, to $3.4 million from $3.4 million for the three months ended June 30, 2025. During the three months ended June 30, 2026, service charges and fees on deposits increased $187,000, or 8.4%, wealth management income increased $96,000, or 32.8%, income from BOLI increased $19,000, or 3.7%, from $516,000 for the three months ended June 30, 2025, to $535,000 for the three months ended June 30, 2026. During the three months ended June 30, 2026 and the three months ended June 30, 2025, the Company reported unrealized gains on marketable equity securities of $47,000 and $25,000, respectively. During the three months ended June 30, 2025, the Company reported a gain of $243,000 on non-marketable equity investments and did not have comparable income during the three months ended June 30, 2026. 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, 2026.
Current report
For the three months ended June 30, 2026, non-interest expense increased $699,000, or 4.5%, to $16.4 million from $15.7 million for the three months ended June 30, 2025. The increase in non-interest expense was due to an increase in salaries and benefits of $645,000, or 7.3%, due to annual merit increases and increases in health insurance benefits, an increase in software related expense of $67,000, or 10.4%, an increase in occupancy expense of $54,000, or 4.3%, an increase in other non-interest expense of $31,000, or 2.3%, an increase in data processing expense of $28,000, or 3.0%, and an increase in advertising and marketing expense of $14,000, or 3.2%. These increases were partially offset by a decrease in furniture and equipment expense of $87,000, or 17.7%, a decrease in debit card and ATM processing fees of $30,000, or 4.5%, and a decrease in FDIC insurance expense of $22,000, or 5.5%.
Current report
General.
Current report
For the six months ended June 30, 2026, the Company reported net income of $8.4 million, or $0.42 per diluted share, compared to $6.9 million, or $0.34 per diluted share, for the six months ended June 30, 2025. Net interest income increased $5.0 million, or 15.0%, provision for credit losses increased $2.1 million, non-interest income increased $657,000, or 10.6%, and non-interest expense increased $1.5 million, or 4.9%, during the same period. Return on average assets and return on average equity were 0.62% and 6.80% for the six months ended June 30, 2026, respectively, compared to 0.52% and 5.87% for the six months ended June 30, 2025, respectively.
Current report
Net Interest and Dividend Income.
Current report
Rate/Volume Analysis.
Current report
During the six months ended June 30, 2026, net interest income increased $5.0 million, or 15.0%, to $38.1 million, compared to $33.2 million for the six months ended June 30, 2025. The increase in net interest income was due to an increase in interest and dividend income of $3.0 million, or 5.2%, driven by higher interest income from loans, and a decrease in interest expense of $2.0 million, or 7.9%. The decrease in interest expense was due to a decrease in interest expense on deposits of $1.5 million, or 6.8%, and a decrease in interest expense on borrowings of $480,000, or 15.7%.
Current report
The net interest margin increased 33 basis points from 2.64%, for the six months ended June 30, 2025, to 2.97% for the six months ended June 30, 2026. The net interest margin, on a tax-equivalent basis, increased 33 basis points from 2.66%, for the six months ended June 30, 2025, to 2.99% for the six months ended June 30, 2026. During the six months ended June 30, 2026 and the six months ended June 30, 2025, the Company recorded prepayment penalties related to payoffs in the commercial real estate portfolio of $98,000 and $425,000, respectively. Excluding the prepayment penalties, the net interest margin increased 35 basis points from 2.61%, for the six months ended June 30, 2025 to 2.96%, for the six months ended June 30, 2026.
Current report
The average yield on interest-earning assets, without the impact of tax-equivalent adjustments, was 4.76% for the six months ended June 30, 2026, compared to 4.63% for the six months ended June 30, 2025. The average loan yield, without the impact of tax-equivalent adjustments, was 5.11% for the six months ended June 30, 2026, compared to 4.97% for the six months ended June 30, 2025. During the six months ended June 30, 2026, average interest-earning assets increased $58.5 million, or 2.3%, to $2.6 billion, from the same period in 2025. The increase was primarily due to an increase in average loans of $110.8 million, or 5.3%, partially offset by a decrease in average short-term investments, consisting of cash and cash equivalents, of $41.8 million, or 62.2%, and a decrease in average securities of $10.3 million, or 2.8%.
Current report
The average cost of total funds, including non-interest bearing accounts and borrowings, decreased 20 basis points from 2.07% for the six months ended June 30, 2025, to 1.87% for the six months ended June 30, 2026. The average cost of core deposits, which the Company defines as all deposits except time deposits, decreased three basis points to 1.02% for the six months ended June 30, 2026, from 1.05% for the six months ended June 30, 2025. The average cost of time deposits decreased 50 basis points from 3.90% for the six months ended June 30, 2025, to 3.40% for the six months ended June 30, 2026. The average cost of borrowings, including subordinated debt, decreased 13 basis points from 5.04% for the six months ended June 30, 2025, to 4.91% for the six months ended June 30, 2026. Average demand deposits, an interest-free source of funds, increased $19.6 million, or 3.4%, from $571.2 million, or 24.8% of total average deposits, for the six months ended June 30, 2025, to $590.8 million, or 25.0% of total average deposits, for the six months ended June 30, 2026.
Current report
Provision for (Reversal of) Credit Losses.
Current report
The Company recorded net charge-offs of $1.8 million, or 0.17% of average loans, on an annualized basis, for the six months ended June 30, 2026, as compared to net recoveries of $556,000, or 0.05%, of average loans, on an annualized basis, for the six months ended June 30, 2025. The increase in net charge-offs was due to the $1.8 million charge-off of the participation loan discussed above. 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.
Current report
Non-Interest Income.
Current report
During the six months ended June 30, 2025, the Company reported a gain of $243,000 on non-marketable equity investments and did not have comparable income during the six months ended June 30, 2026. 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, 2026. During the six months ended June 30, 2026, the Company reported unrealized gains on marketable equity securities of $34,000, compared to unrealized gains on marketable equity securities of $20,000 during the six months ended June 30, 2025. 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, 2026.
Current report
Non-Interest Expense.
Current report
For the six months ended June 30, 2026, the efficiency ratio was 72.0% compared to 78.4% for the six months ended June 30, 2025. For the six months ended June 30, 2026, the adjusted efficiency ratio, a non-GAAP financial measure, was 72.7%, compared to 78.9% for the six months ended June 30, 2025. The decreases in the efficiency ratio and the adjusted efficiency ratio were driven by higher revenues, defined as the sum of net interest income and non-interest income, during the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The adjusted efficiency ratio is a non-GAAP measure. 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 report
Income Taxes.
Current report
Income tax expense for the six months ended June 30, 2026, was $2.6 million, representing an effective tax rate of 23.7%, compared to $2.1 million, representing an effective tax rate of 23.2%, for the six months ended June 30, 2025. The increase is due to higher projected pre-tax income for the twelve months ended December 31, 2026.
Current report
On April 20, 2021, the Company issued and sold $20.0 million in aggregate principal amount of its 4.875% Fixed-to-Floating Rate Notes to certain qualified institutional buyers in a private placement transaction. The Notes mature on May 1, 2031 (“Maturity Date”) and were designed to qualify as Tier 2 capital under the Federal Reserve’s capital adequacy regulations. At June 30, 2026, $19.8 million aggregate principal amount of the Notes was outstanding.
Removed paragraphs (5)
Previous 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.
Previous report
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 report
Provision for Credit Losses.
Previous report
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 report
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.
Reworded paragraphs (41)
Previous wording
You should read the following financial results for the three months ended March 31, 2026 in the context of this strategy.
Current wording
You should read the following financial results for the three months and six months ended June 30, 2026 in the context of this strategy.
Previous 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.
Current wording
There have been no material changes to our critical accounting policies during the six months ended June 30, 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 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%.
Current wording
At June 30, 2026, total assets were $2.7 billion, a decrease of $4.2 million, or 0.1%, from December 31, 2025. The decrease in total assets was primarily due to a decrease in investment securities of $12.2 million, or 3.4%, and a decrease in cash and cash equivalents of $2.7 million, or 6.7%, partially offset by an increase in total loans of $9.9 million, or 0.5%.
Previous 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.
Current wording
At June 30, 2026, the investment securities portfolio totaled $353.0 million, or 12.9% of total assets, compared to $365.2 million, or 13.3% of total assets, at December 31, 2025. At June 30, 2026, the Company’s available-for-sale securities portfolio, recorded at fair market value, decreased $5.2 million, or 3.0%, from $175.8 million at December 31, 2025 to $170.6 million. The held-to-maturity securities portfolio, recorded at amortized cost, decreased $7.1 million, or 3.8%, from $188.8 million at December 31, 2025, to $181.7 million at June 30, 2026.
Previous 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.
Current wording
At June 30, 2026, the Company reported net unrealized losses on the available-for-sale securities portfolio of $22.9 million, or 11.8% of the amortized cost basis of the available-for-sale securities portfolio, compared to 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 June 30, 2026, the Company reported net unrealized losses on the held-to-maturity securities portfolio of $30.5 million, or 16.8% 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 $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.
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 $13.1 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 within 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
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%.
Current wording
Total loans increased $9.9 million, or 0.5%, from $2.2 billion, or 79.7% of total assets, at December 31, 2025, to $2.2 billion, or 80.2% of total assets, at June 30, 2026. The increase in total loans was primarily driven by an increase in residential real estate loans, including home equity loans, of $31.7 million, or 3.7%, an increase in commercial and industrial loans of $12.5 million, or 5.6%, partially offset by a decrease in commercial real estate loans of $33.7 million, or 3.1%. The decrease in commercial real estate loans was primarily driven by an increased level of prepayments in the commercial real estate loan portfolio and the partial charge-off of $1.8 million on the participation loan discussed above. Non-owner occupied commercial real estate loans decreased $27.3 million, or 3.0%, to $883.0 million, or 40.3% of total loans and owner-occupied commercial real estate loans decreased $6.5 million, or 3.4%, to $182.4 million, or 8.3% of total loans.
Previous 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.
Current wording
Total delinquency was $4.7 million, or 0.21% of total loans, at June 30, 2026, compared to $3.1 million, or 0.14% of total loans at December 31, 2025. Of the $4.7 million in past due loans, 95.1% are residential real estate loans. At June 30, 2026, nonaccrual loans totaled $7.8 million, or 0.35% of total loans, compared to $5.2 million, or 0.24% of total loans, at December 31, 2025. The increase in nonaccrual loans was primarily due to the participation loan discussed above, which was placed on nonaccrual status following the borrower’s June 2026 Bankruptcy Filing. At June 30, 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 $7.8 million, or 0.28% of total assets, at June 30, 2026, compared to $5.2 million, or 0.19% of total assets, at December 31, 2025. At June 30, 2026, and December 31, 2025, the Company did not have any other real estate owned.
Previous wording
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.
Current wording
At June 30, 2026, the allowance for credit losses was $20.2 million, or 0.92% of total loans and 260.2% of nonaccrual loans, compared to $20.3 million, or 0.93% of total loans and 393.2% of nonaccrual loans, at December 31, 2025. The decrease in the allowance for credit losses as a percentage of nonaccrual loans was due to the increase in nonaccrual loans from $5.2 million at December 31, 2025, to $7.8 million at June 30, 2026. Management continues to closely monitor the loan portfolio for any signs of weakness due to the speculation that commercial real estate values may deteriorate as the market continues to adjust to higher vacancies and higher interest rates as well as any signs of deterioration in the borrower’s financial condition. Management continues to proactively take steps to mitigate risk in the loan portfolio.
Previous 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.
Current wording
At June 30, 2026, total criticized loans, defined as special mention and substandard loans, totaled $63.9 million, or 2.9% 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 $23.1 million, from $17.2 million, or 0.8% of total loans, at December 31, 2025, to $40.3 million, or 1.8% of total loans, at June 30, 2026. During the same period, substandard loans increased $1.1 million, or 4.9%, to $23.6 million, or 1.1% of total loans.
Previous wording
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 wording
Of the $40.3 million in loans designated special mention at June 30, 2026, $17.8 million, or 44.2%, are commercial and industrial loans, and $22.5 million, or 55.8%, are commercial real estate loans. Of the $23.6 million in loans categorized substandard at June 30, 2026, $7.2 million, or 30.5%, are commercial and industrial loans, $10.5 million, or 44.5%, are commercial real estate loans, and $5.9 million, or 25.0%, are residential real estate loans. Of the total $63.9 million in criticized loans at June 30, 2026, 95.6% are current and paying as agreed.
Previous wording
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 wording
The increase in special mention loans from December 31, 2025, to June 30, 2026, resulted from the downgrade of two commercial relationships totaling $21.5 million, from pass risk ratings to special mention. The increase in substandard loans from December 31, 2025, to June 30, 2026, was primarily due to the downgrade of the participation loan discussed above. At June 30, 2026, the Company’s portion of the remaining carrying value of the participation loan was $1.6 million.
Previous 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.
Current wording
Our commercial real estate portfolio is comprised of diversified property types that are primarily within our geographic footprint. At June 30, 2026, the commercial real estate portfolio totaled $1.1 billion and represented 48.6% of total loans. Of the $1.1 billion, $883.0 million, or 82.9% of the commercial real estate portfolio, was categorized as non-owner occupied commercial real estate and represented 317.6% 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 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.
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 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.
Previous 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%.
Current wording
The Company holds a concentration in commercial real estate loans. As of June 30, 2026, commercial real estate loans represented 383.2% of consolidated bank risk-based capital. Non-owner occupied commercial real estate loans totaled $883.0 million, or 317.6% of consolidated bank risk-based capital, and owner-occupied commercial real estate loans totaled $182.4 million, or 65.6% of consolidated bank risk-based capital. As of June 30, 2026, construction, land development, and other land loans represented 33.7% of consolidated bank risk-based capital. During the prior 36 months, the Company has experienced an increase in its commercial real estate portfolio of 5.0%.
Previous 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.
Current wording
At June 30, 2026, of the $1.1 billion in commercial real estate loans, $883.0 million, or 82.9% of total commercial real estate loans, were categorized as non-owner occupied and represented 317.6% 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 $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.
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 $190.4 million, or 68.5% of total bank risk-based capital, and $195.2 million, or 70.5% of total bank risk-based capital, as of June 30, 2026 and December 31, 2025, respectively.
Previous 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.
Current wording
CRE office loans are primarily concentrated in Massachusetts, where approximately 42.7% of the total balance of CRE office loans were located at June 30, 2026, compared to 42.3% at December 31, 2025. The Company does not have CRE loans secured by office real estate in greater Boston or New York.
Previous 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.
Current wording
At June 30, 2026, total deposits were $2.4 billion and increased $40.5 million, or 1.7%, from December 31, 2025. Core deposits, which the Company defines as all deposits except time deposits, decreased $5.3 million, or 0.3%, from $1.7 billion, or 70.8% of total deposits, at December 31, 2025, to $1.7 billion, or 69.4% of total deposits, at June 30, 2026. Non-interest-bearing deposits increased $6.1 million, or 1.0%, to $600.6 million, and represented 25.0% of total deposits, money market accounts increased $2.7 million, or 0.4%, to $718.4 million, and savings accounts increased $6.6 million, or 3.5%, to $193.2 million. These increases were partially offset by a decrease in interest-bearing checking accounts of $20.7 million, or 11.9%, to $153.5 million.
Previous 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.
Current wording
At June 30, 2026, the Bank’s uninsured deposits totaled $722.7 million, or 30.1% of total deposits, compared to $697.6 million, or 29.5% of total deposits, at December 31, 2025. Uninsured amounts were based on the portion of customer account balances that exceeded the FDIC limit of $250,000. At June 30, 2026, there was one consumer deposit relationship, which is our largest deposit relationship, with a household concentration comprising 5.8% 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 1.3% of total deposits at June 30, 2026, and 1.9% at December 31, 2025.
Previous 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.
Current wording
At June 30, 2026, total borrowings decreased $43.5 million, or 41.0%, from $106.1 million at December 31, 2025, to $62.6 million. At June 30, 2026, short-term borrowings increased $4.5 million, or 33.7%, to $17.7 million, compared to $13.3 million at December 31, 2025. At June 30, 2026, long-term borrowings decreased $48.0 million, or 65.8%, to $25.0 million from $73.0 million at December 31, 2025.
Previous 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.
Current wording
As of June 30, 2026, the Company had $547.5 million of additional borrowing capacity at the FHLB, $392.7 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 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.
Current wording
At June 30, 2026, shareholders’ equity was $248.3 million, or 9.1% 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 $8.4 million, partially offset by cash dividends paid of $2.8 million and the repurchase of 381,000 shares at a cost of $5.2 million. At June 30, 2026, total shares outstanding were 20,045,872. 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 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.
Current wording
The following tables set forth the information relating to our average balance and net interest income for the three months ended June 30, 2026 and 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
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%.
Current wording
The average yield on interest-earning assets, without the impact of tax-equivalent adjustments, increased eight basis points from 4.69% for the three months ended June 30, 2025 to 4.77%, for the three months ended June 30, 2026. The average loan yield, without the impact of tax-equivalent adjustments, increased seven basis points from 5.05% for the three months ended June 30, 2025, to 5.12% for the three months ended June 30, 2026. During the three months ended June 30, 2026, average interest-earning assets increased $55.9 million, or 2.2%, to $2.6 billion, primarily due to an increase in average loans of $108.6 million, or 5.2%, partially offset by a decrease in average short-term investments, consisting of cash and cash equivalents, of $32.6 million, or 55.6%, and a decrease in average securities of $19.2 million, or 5.1%.
Previous 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.
Current wording
The average cost of total funds, including non-interest bearing accounts and borrowings, decreased 12 basis points from 1.98% for the three months ended June 30, 2025, to 1.86% for the three months ended June 30, 2026. The average cost of core deposits, which the Company defines as all deposits except time deposits, increased two basis points from 1.01% for the three months ended June 30, 2025, to 1.03% for the three months ended June 30, 2026. The average cost of time deposits decreased 31 basis points from 3.69% for the three months ended June 30, 2025, to 3.38% for the three months ended June 30, 2026. The average cost of borrowings, including subordinated debt, increased 11 basis points from 5.04% for the three months ended June 30, 2025, to 5.15%, for the three months ended June 30, 2026. Average demand deposits, an interest-free source of funds, increased $20.3 million, or 3.5%, from $572.8 million, or 24.9% of total average deposits, for the three months ended June 30, 2025, to $593.1 million, or 24.9% of total average deposits, for the three months ended June 30, 2026.
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 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.
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 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.
Previous wording
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.
Current wording
For the three months ended June 30, 2026, the efficiency ratio was 72.0%, compared to 74.4% for the three months ended June 30, 2025. For the three months ended June 30, 2026, the adjusted efficiency ratio, a non-GAAP financial measure, was 72.2% compared to 75.3% for the three months ended June 30, 2025. 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, 2026, compared to the three months ended June 30, 2025. 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.
Previous 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.
Current wording
Income tax expense for the three months ended June 30, 2026, was $1.2 million, or an effective tax rate of 25.1%, compared to $1.4 million, or an effective tax rate of 23.7%, for the three months ended June 30, 2025. The increase is due to higher projected pre-tax income for the twelve months ended December 31, 2026.
Previous 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.
Current wording
During the six months ended June 30, 2026, the Company recorded a provision for credit losses of $1.6 million, compared to a reversal of credit losses of $473,000 during the six months ended June 30, 2025. The increase in the provision for credit losses was primarily due to the partial charge-off of $1.8 million on the participation loan discussed above. The provision for credit losses was also determined by a number of factors: the continued overall credit performance of the Company’s diversified 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. Management believes that the allowance for credit losses are at adequate levels, however, future adjustments may be necessary if economic, real estate market values and other conditions differ substantially from the current operating environment.
Previous wording
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 wording
For the six months ended June 30, 2026, non-interest income increased $657,000, or 10.6%, from $6.2 million during the six months ended June 30, 2025, to $6.8 million. During the six months ended June 30, 2026, non-interest income included the recognition of $450,000 in BOLI death benefits. Excluding the BOLI death benefits, non-interest income increased $207,000, or 3.4%. During the same period, service charges and fees on deposits increased $295,000, or 6.9%, wealth management income increased $225,000, or 40.6%, and income from BOLI increased $22,000, or 2.2%.
Previous wording
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 wording
For the six months ended June 30, 2026, non-interest expense increased $1.5 million, or 4.9%, to $32.4 million, compared to $30.8 million for the six months ended June 30, 2025. The increase in non-interest expense was primarily due to an increase in salaries and employee benefits of $1.5 million, or 8.5%, due to annual merit increases and increases in health insurance benefits. During the same period, occupancy expense increased $204,000, or 7.6%, due to an increase in snow removal costs of $111,000, or 76.6%. Software related expenses increased $97,000, or 7.4%, debit card and ATM processing fees increased $56,000, or 4.5%, and advertising expense increased $27,000, or 3.1%. These increases were partially offset by a decrease in furniture and equipment expense of $141,000, or 14.1%, a decrease in FDIC insurance expense of $61,000, or 7.3%, a decrease in other non-interest expense of $49,000, or 1.8%, a decrease in professional fees of $38,000, or 3.3%, and a decrease in data processing expense of $33,000, or 1.8%.
Previous 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.
Current wording
At June 30, 2026 and December 31, 2025, outstanding borrowings from the FHLB were $38.5 million and $83.0 million, respectively. At June 30, 2026, the Company had $547.5 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 $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.
Current wording
The Company has an available line of credit of $392.7 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 June 30, 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 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.
Current wording
In addition, the Company has 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 June 30, 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
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.
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 June 30, 2026, the Company had approximately $163.5 million in loan commitments and letters of credit to borrowers and approximately $343.7 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 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.
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 June 30, 2026, time deposit accounts scheduled to mature within one year totaled $715.1 million, or 97.2% 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.
Previous wording
The Company entered into a long-term contractual obligation with a vendor for use of its core provider and ancillary services beginning in 2016. Total remaining contractual obligations outstanding with this vendor as of March 31, 2026 were estimated to be $1.8 million, which is expected to be paid within one year. Further, the Company has operating leases for certain of its banking offices and ATMs. Our leases have remaining lease terms of less than one year to twelve years, some of which include options to extend the leases for additional five-year terms up to ten years. At March 31, 2026, undiscounted lease liabilities totaled $7.3 million. Principal payments expected to be made on our lease liabilities during the twelve months ended March 31, 2027 totaled $1.4 million. The remaining lease liability payments totaled $5.9 million and are expected to be made after March 31, 2027.
Current wording
The Company entered into a long-term contractual obligation with a vendor for use of its core provider and ancillary services beginning in 2016. Total remaining contractual obligations outstanding with this vendor as of June 30, 2026 were estimated to be $21.7 million, with $5.0 expected to be paid within one year, and the remaining $16.7 million to be paid within the next four years. Further, the Company has operating leases for certain of its banking offices and ATMs. Our leases have remaining lease terms of less than one year to twelve years, some of which include options to extend the leases for additional five-year terms up to ten years. At June 30, 2026, undiscounted lease liabilities totaled $8.2 million. Principal payments expected to be made on our lease liabilities during the twelve months ended June 30, 2027 totaled $1.5 million. The remaining lease liability payments totaled $6.7 million and are expected to be made after June 30, 2027.
Previous wording
On April 20, 2021, the Company completed an offering of its private placement of $20.0 million aggregate principal amount of 4.875% fixed-to-floating rate subordinated notes due on May 1, 2031, unless earlier redeemed, to certain qualified institutional buyers (the “Notes”). The Notes bear interest from the initial issue date to, but excluding, May 1, 2026, or the earlier redemption date, at a fixed rate of 4.875% per annum, payable quarterly in arrears on May 1, August 1, November 1 and February 1 of each year, beginning August 1, 2021, and from and including May 1, 2026, but excluding the maturity date or earlier redemption date, equal to the benchmark rate, which is the 90-day average secured overnight financing rate (“SOFR”), plus 412 basis points, determined on the determination date of the applicable interest period, payable quarterly in arrears on May 1, August 1, November 1 and February 1 of each year. The Company may also redeem the Notes, in whole or in part, on or after May 1, 2026, and at any time upon the occurrence of certain events, subject in each case to the approval of the Board of Governors of the Federal Reserve. At March 31, 2026 and December 31, 2025, $19.8 million in aggregate principal amount of the Notes was outstanding.
Current wording
From the issuance date through April 30, 2026, the Notes bore interest at a fixed interest rate of 4.875% per annum. Beginning on May 1, 2026, the Notes bear interest at a floating rate equal to the 90-day average SOFR, plus 412 basis points, payable quarterly in arrears. The Company has the ability to call the Notes, in whole, or in part, at a redemption price equal to 100% of the principal amount at certain times on or after May 1, 2026, and at any time upon the occurrence of certain events, subject in each case to the approval of the Federal Reserve. As of June 30, 2026, the Company has not redeemed any portion of the Notes.
Previous wording
The Company’s and the Bank’s capital ratios are also presented in the following table for the periods noted.
Current wording
Our actual capital ratios of June 30, 2026 and December 31, 2025 are also presented in the following table.
Showing the first 40 of 41 pairs. Open the source sections for the rest.
Rearranged current paragraphs (6)
Current report — wording carried from elsewhere
Time deposits increased $45.8 million, or 6.6%, from $689.9 million at December 31, 2025, to $735.7 million at June 30, 2026. The Company did not have brokered time deposits at June 30, 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.
Current report — wording carried from elsewhere
At June 30, 2026, and December 31, 2025, borrowings also consisted of $19.8 million in fixed-to-floating rate subordinated notes (the “Notes”). Beginning on May 1, 2026, the Notes bear interest at a floating rate equal to the 90-day average secured overnight financing rate (“SOFR”) plus 412 basis points.
Current report — wording carried from elsewhere
COMPARISON OF OPERATING RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND JUNE 30, 2025
Current report — wording carried from elsewhere
The following tables set forth the information relating to our average balance and net interest income for the six months ended June 30, 2026 and 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 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 report — wording carried from 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.
Current report — wording carried from 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.