Western New England Bancorp, Inc.
For the period ended Sep 30, 2026. Filed Nov 5, 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.
Sep 30, 2026 · Filed Nov 5, 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 2026-06-30; filed 2026-08-07.
0001999371-26-017418
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-05.
0001999371-26-024638
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 129 previous paragraphs and 127 current paragraphs.
71 unchanged; 50 reworded; 6 added; 7 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 64 previous and 66 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
Net interest income increased $1.9 million, or 10.5%, to $20.0 million, for the three months ended September 30, 2026, from $18.1 million for the three months ended September 30, 2025. The increase in net interest income was due to an increase in interest and dividend income of $1.3 million, or 4.2%, and a decrease in interest expense of $632,000, or 5.3%.
Current report
During the three months ended September 30, 2026, the Company reported an unrealized loss on marketable equity securities of $2,000, compared to an unrealized gain on marketable equity securities of $22,000, during the three months ended September 30, 2025. During the three months ended September 30, 2026, the Company reported a gain of $33,000 on non-marketable equity investments and did not have comparable income during the three months ended September 30, 2025. For the three months ended September 30, 2026, and the three months ended September 30, 2025, wealth management income totaled $382,000 and $353,000, respectively.
Current report
For the three months ended September 30, 2026, non-interest expense increased $735,000, or 4.7%, to $16.5 million from $15.8 million for the three months ended September 30, 2025. Salaries and employee benefits expense increased $395,000, or 4.3%, to $9.6 million, due to annual merit increases, an increase in deferred compensation expense to reflect updated performance award estimates and an increase in health insurance benefits. Occupancy expense increased $83,000, or 6.7%, debit card processing and ATM network costs increased $81,000, or 12.8%, professional fees increased $80,000, or 17.4%, data processing expense increased $57,000, or 6.2%, advertising expense increased $19,000, or 4.4%, software-related expenses increased $18,000, or 2.8%, FDIC insurance expense increased $5,000, or 1.3%, other non-interest expense increased $17,000, or 1.2%, and furniture and equipment expense decreased $20,000, or 4.4%.
Current report
During the nine months ended September 30, 2026, net interest income increased $6.9 million, or 13.4%, to $58.1 million, compared to $51.3 million for the nine months ended September 30, 2025. The increase in net interest income was primarily due to an increase in interest and dividend income of $4.3 million, or 4.9%, and a decrease in interest expense of $2.6 million, or 7.0%.
Current report
During the nine months ended September 30, 2026, the Company recorded a provision for credit losses of $661,000, compared to a provision for credit losses of $820,000, during the nine months ended September 30, 2025. The decrease of $159,000, or 19.4%, in the provision for credit losses was primarily due to lower loan growth, as total loans increased by $11.1 million, or 0.5%, during the nine months ended September 30, 2026, compared to an increase of $60.8 million, or 2.9%, during the nine months ended September 30, 2025. The provision for credit losses for the nine months ended September 30, 2026 was determined by a number of factors, including paydowns in the loan portfolio, changes in the loan portfolio mix, a decrease in unfunded commitments, and Management’s consideration of existing economic conditions, including a slight improvement in the quarterly economic outlook from the Federal Reserve Bank. Management continues to monitor macroeconomic variables related to interest rates, tariffs, increased energy costs, inflation and concerns regarding an economic downturn, and believes it is appropriately reserved for the current economic environment.
Current report
For the nine months ended September 30, 2026, the efficiency ratio was 71.0%, compared to 76.9% for the nine months ended September 30, 2025. 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 $8.3 million, or 13.6%, during the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025.
Removed paragraphs (7)
Previous 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.
Previous 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.
Previous 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.
Previous 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%.
Previous 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%.
Previous report
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 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.
Reworded paragraphs (50)
Previous 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.
Current wording
You should read the following financial results for the three months and nine months ended September 30, 2026 in the context of this strategy.
Previous wording
There have been no material changes to our critical accounting policies during the six months ended June 30, 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 nine months ended September 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 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%.
Current wording
At September 30, 2026, total assets were $2.7 billion, representing an increase of $9.7 million, or 0.4%, compared to December 31, 2025. The increase in total assets was primarily due to an increase in cash and cash equivalents of $22.4 million, or 55.4%, and an increase in total loans of $11.1 million, or 0.5%, partially offset by a decrease in investment securities of $25.8 million, or 7.1%.
Previous 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.
Current wording
At September 30, 2026, the investment securities portfolio totaled $339.4 million, or 12.4% of total assets, compared to $365.2 million, or 13.3% of total assets, at December 31, 2025. At September 30, 2026, the Company’s available-for-sale securities portfolio, recorded at fair market value, decreased $14.9 million, or 8.5%, from $175.8 million at December 31, 2025 to $160.9 million. The held-to-maturity securities portfolio, recorded at amortized cost, decreased $10.9 million, or 5.8%, from $188.8 million at December 31, 2025, to $177.9 million at September 30, 2026.
Previous 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.
Current wording
At September 30, 2026, the Company reported net unrealized losses on the available-for-sale securities portfolio of $31.1 million, or 16.2% 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 September 30, 2026, the Company reported net unrealized losses on the held-to-maturity securities portfolio of $39.6 million, or 22.3% 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 $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.
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 $15.4 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. Absent credit deterioration or other adverse factors, unrealized losses attributable to interest-rate movements would generally be expected to diminish as the securities approach maturity.
Previous 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.
Current wording
Total loans increased $11.1 million, or 0.5%, from $2.2 billion, or 79.7% of total assets, at December 31, 2025, to $2.2 billion, or 79.8% of total assets, at September 30, 2026. The increase in total loans was primarily driven by an increase in residential real estate loans, including home equity loans, of $57.3 million, or 6.7%, partially offset by a decrease in commercial real estate loans of $40.6 million, or 3.7%, and a decrease in commercial and industrial loans of $4.9 million, or 2.2%. The decrease in commercial real estate loans was primarily driven by an increased level of prepayments in the commercial real estate loan portfolio and a broader slowdown in commercial real estate lending activity, as well as the partial charge-off of $1.8 million on the participation loan discussed above. Non-owner occupied commercial real estate loans decreased $31.1 million, or 3.4%, to $879.2 million, or 40.1% of total loans and owner-occupied commercial real estate loans decreased $9.5 million, or 5.0%, to $179.3 million, or 8.2% of total loans.** **
Previous 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.
Current wording
Total delinquency was $9.1 million, or 0.41% of total loans, at September 30, 2026, compared to $3.1 million, or 0.14% of total loans at December 31, 2025. Of the $9.1 million in past due loans, 74.1% are residential real estate loans, which include home equity loans. At September 30, 2026, nonaccrual loans totaled $7.9 million, or 0.36% 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 attributable to the participation loan discussed above, which was placed on nonaccrual status following the borrower’s Bankruptcy Filing. At September 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 $7.9 million, or 0.29% of total assets, at September 30, 2026, compared to $5.2 million, or 0.19% of total assets, at December 31, 2025. At September 30, 2026, and December 31, 2025, the Company did not have any other real estate owned.
Previous 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.
Current wording
At September 30, 2026, the allowance for credit losses was $19.6 million, or 0.89% of total loans and 248.4% 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 an increase in nonaccrual loans from $5.2 million at December 31, 2025, to $7.9 million at September 30, 2026.
Previous 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.
Current wording
At September 30, 2026, total criticized loans, defined as special mention and substandard loans, totaled $57.7 million, or 2.6% 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 $10.8 million, from $17.2 million, or 0.8% of total loans, at December 31, 2025, to $28.0 million, or 1.3% of total loans, at September 30, 2026. During the same period, substandard loans increased $7.2 million, or 32.0%, to $29.7 million, or 1.4% of total loans.
Previous 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.
Current wording
Of the $28.0 million in loans designated special mention at September 30, 2026, $15.6 million, or 55.7%, are commercial and industrial loans, and $12.4 million, or 44.3%, are commercial real estate loans. Of the $29.7 million in loans categorized substandard at September 30, 2026, $4.1 million, or 13.8%, are commercial and industrial loans, $20.2 million, or 68.0%, are commercial real estate loans, and $5.4 million, or 18.2%, are residential real estate loans. Of the total $57.7 million in criticized loans at September 30, 2026, 93.1% are current and paying as agreed.
Previous 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.
Current wording
The increase in special mention loans from December 31, 2025 to September 30, 2026 resulted from the downgrade of two commercial relationships totaling $21.5 million, from a pass risk rating to special mention. The increase in substandard loans from December 31, 2025 to September 30, 2026 resulted from the downgrade of the participation loan with a carrying value of $1.6 million, net of the $1.8 million charge-off, discussed above. In the third quarter of 2026, an $11.5 million commercial loan relationship was downgraded from special mention to substandard and a $5.8 million commercial loan relationship was upgraded from substandard to special mention. 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 will continue to proactively take steps to mitigate risk in the loan portfolio.** **
Previous 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.
Current wording
Our commercial real estate portfolio is comprised of diversified property types and primarily within our geographic footprint. At September 30, 2026, the commercial real estate portfolio totaled $1.1 billion and represented 48.3% of total loans. Of the $1.1 billion, $879.2 million, or 83.1% of the commercial real estate portfolio, was categorized as non-owner occupied commercial real estate and represented 314.1% of the Bank’s total risk-based capital.
Previous 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%.
Current wording
The Company holds a concentration in commercial real estate loans. As of September 30, 2026, commercial real estate loans represented 378.2% of consolidated bank risk-based capital. Non-owner occupied commercial real estate loans totaled $879.2 million, or 314.1% of consolidated bank risk-based capital, and owner-occupied commercial real estate loans totaled $179.3 million, or 64.1% of consolidated bank risk-based capital. As of September 30, 2026, construction, land development, and other land loans represented 28.4% of consolidated bank risk-based capital. During the prior 36 months, the Company has experienced an increase in its commercial real estate portfolio of 2.9%.
Previous 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.
Current wording
At September 30, 2026, of the $1.1 billion in commercial real estate loans, $879.2 million, or 83.1% of total commercial real estate loans, were categorized as non-owner occupied and represented 314.1% of total bank risk-based capital.
Previous wording
The table below depicts a well-diversified portfolio of owner occupied commercial real estate portfolio as of June 30, 2026:
Current wording
The table below depicts a well-diversified portfolio of owner occupied commercial real estate as of September 30, 2026:
Previous wording
The table below depicts a well-diversified portfolio of owner occupied commercial real estate portfolio as of December 31, 2025:
Current wording
The table below depicts a well-diversified portfolio of owner occupied commercial real estate as of December 31, 2025:
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 $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.
Current wording
Our 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 $189.3 million, or 67.6% of total bank risk-based capital, and $195.2 million, or 70.5% of total bank risk-based capital, as of September 30, 2026 and December 31, 2025, respectively.
Previous 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.
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 September 30, 2026 and December 31, 2025. The Company does not have CRE loans secured by office real estate in greater Boston or New York.
Previous 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.
Current wording
At September 30, 2026, total deposits were $2.4 billion and increased $67.2 million, or 2.8%, from December 31, 2025. Core deposits, which the Company defines as all deposits except time deposits, increased $25.0 million, or 1.5%, from $1.7 billion, or 70.8% of total deposits, at December 31, 2025, to $1.7 billion, or 69.8% of total deposits, at September 30, 2026. Non-interest-bearing deposits increased $20.7 million, or 3.5%, to $615.2 million, and represented 25.3% of total deposits, money market accounts increased $22.9 million, or 3.2%, to $738.5 million, and savings accounts increased $1.5 million, or 0.8%, to $188.1 million. These increases were partially offset by a decrease in interest-bearing checking accounts of $20.0 million, or 11.5%, to $154.2 million.
Previous wording
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 wording
At September 30, 2026, time deposits increased $42.2 million, or 6.1%, from $689.9 million at December 31, 2025, to $732.1 million. The Company did not have brokered time deposits at September 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.
Previous 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.
Current wording
At September 30, 2026, the Bank’s uninsured deposits totaled $749.1 million, or 30.8% 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 September 30, 2026, there was one consumer deposit relationship, which is our largest deposit relationship, with a household concentration comprising 6.1% 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 1.2% of total deposits at September 30, 2026, and 1.9% at December 31, 2025.
Previous 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.
Current wording
At September 30, 2026, total borrowings decreased $55.1 million, or 51.9%, from $106.1 million at December 31, 2025, to $51.0 million. At September 30, 2026, short-term borrowings decreased $7.1 million, or 53.7%, to $6.1 million, compared to $13.3 million at December 31, 2025. At September 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
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 wording
At September 30, 2026, and December 31, 2025, borrowings also consisted of $19.8 million in fixed-to-floating rate subordinated notes (“Notes”). On April 20, 2021, the Company issued $20.0 million in aggregate principal amount of fixed-to-floating rate Notes due on May 1, 2031. On May 1, 2026, the Company’s Notes converted from an annual fixed rate of 4.875% to a floating rate equal to the 90-day average secured overnight financing rate (“SOFR”) plus 412 basis points. The Company has the ability to call 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 System (the “Federal Reserve”). The Notes were designed to qualify as Tier 2 capital under the Federal Reserve’s capital adequacy regulations.
Previous 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.
Current wording
As of September 30, 2026, the Company had $615.6 million of additional borrowing capacity at the FHLB, $354.4 million of additional borrowing capacity under the FRB Discount Window and $25.0 million of other unsecured lines of credit with correspondent banks.
Previous wording
At June 30, 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.
Current wording
At September 30, 2026, shareholders’ equity was $244.7 million, or 8.9% 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 $14.7 million, partially offset by an increase of $6.4 million in accumulated other comprehensive loss, cash dividends paid of $4.2 million and the repurchase of 596,000 shares of common stock at a cost of $8.2 million. At September 30, 2026, total shares outstanding were 19,830,872. 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 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 wording
For the three months ended September 30, 2026, the Company reported net income of $6.3 million, or $0.32 per diluted share, compared to net income of $3.2 million, or $0.16 per diluted share, for the three months ended September 30, 2025. Net interest income increased $1.9 million, or 10.5%, to $20.0 million, for the three months ended September 30, 2026, from $18.1 million for the three months ended September 30, 2025. The increase in net interest income was due to an increase in interest and dividend income of $1.3 million, or 4.2%, and a decrease in interest expense of $632,000, or 5.3%. Return on average assets and return on average equity were 0.91% and 10.05%, respectively, for the three months ended September 30, 2026, compared to 0.46% and 5.20%, respectively, for the three months ended September 30, 2025.
Previous 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%.
Current wording
The net interest margin increased 26 basis points from 2.81% for the three months ended September 30, 2025 to 3.07% for the three months ended September 30, 2026. The net interest margin, on a tax-equivalent basis (a non-GAAP financial measure), increased 26 basis points from 2.83%, for the three months ended September 30, 2025 to 3.09% for the three months ended September 30, 2026. The average yield on interest-earning assets, without the impact of tax-equivalent adjustments, increased 14 basis points from 4.67% for the three months ended September 30, 2025 to 4.81%, for the three months ended September 30, 2026. The average loan yield, without the impact of tax-equivalent adjustments, increased 15 basis points from 5.01% for the three months ended September 30, 2025 to 5.16% for the three months ended September 30, 2026. During the three months ended September 30, 2026, average interest-earning assets increased $27.8 million, or 1.1% to $2.6 billion, primarily due to an increase in average loans of $79.1 million, or 3.7%, partially offset by a decrease in average securities of $25.0 million, or 6.7%, and a decrease in average short-term investments, consisting of cash and cash equivalents, of $24.1 million, or 46.1%. See “Explanation of Use of Non-GAAP Financial Measurements” for the related net interest margin calculation and a reconciliation of GAAP to non-GAAP financial measures.
Previous 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.
Current wording
The average cost of total funds, including non-interest-bearing accounts and borrowings, decreased 12 basis points from 1.94% for the three months ended September 30, 2025 to 1.82% for the three months ended September 30, 2026. The average cost of core deposits, which the Company defines as all deposits except time deposits, decreased three basis points from 1.04% for the three months ended September 30, 2025 to 1.01% for the three months ended September 30, 2026. The average cost of time deposits decreased 14 basis points from 3.51% for the three months ended September 30, 2025 to 3.37% for the three months ended September 30, 2026. The average cost of borrowings, including subordinated debt, increased 83 basis points from 5.03% for the three months ended September 30, 2025 to 5.86%, for the three months ended September 30, 2026. Average borrowings decreased $68.1 million, or 56.1%, from the three months ended September 30, 2025, to the three months ended September 30, 2026. Average demand deposits, an interest-free source of funds, increased $26.5 million, or 4.6%, from $581.8 million, or 25.0% of total average deposits, for the three months ended September 30, 2025, to $608.4 million, or 25.2% of total average deposits, for the three months ended September 30, 2026.
Previous 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.
Current wording
During the three months ended September 30, 2026, the Company recorded a reversal of credit losses of $971,000, compared to a provision for credit losses of $1.3 million, during the three months ended September 30, 2025. The decrease of $2.3 million in the provision for credit losses for the three months ended September 30, 2026 compared to the three months ended September 30, 2025 was determined by a number of factors, including paydowns in the loan portfolio, changes in the loan portfolio mix, a decrease in unfunded commitments, and Management’s consideration of existing economic conditions, including a slight improvement in the quarterly economic outlook from the Federal Reserve Bank. Management continues to monitor macroeconomic variables related to increasing interest rates, tariffs, increased energy costs, inflation and concerns of an economic downturn, and believes it is appropriately reserved for the current economic environment.
Previous wording
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 wording
The Company recorded net recoveries of $274,000, or 0.05% of average loans, on an annualized basis, for the three months ended September 30, 2026, as compared to net charge-offs of $43,000, or 0.01% of average loans, on an annualized basis, for the three months ended September 30, 2025.
Previous wording
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 wording
Non-interest income increased $733,000, or 23.1%, to $3.9 million for the three months ended September 30, 2026, from $3.2 million for the three months ended September 30, 2025. During the three months ended September 30, 2026, the Company reported the sale of two buildings located at 219 and 229 Exchange Street, Chicopee, and recorded a gain of $712,000, as discussed above. During the three months ended September 30, 2026, service charges and fees on deposits increased $66,000, or 3.0%, and income from BOLI increased $34,000, or 7.1%, from $482,000 for the three months ended September 30, 2025 to $516,000 for the three months ended September 30, 2026. During the three months ended September 30, 2025, the Company reported $117,000 in other income from loan-level swap fees on commercial loans and did not have comparable income during the three months ended September 30, 2026.
Previous 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.
Current wording
For the three months ended September 30, 2026, the efficiency ratio was 69.1%, compared to 74.2% for the three months ended September 30, 2025. 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 $2.6 million, or 12.4%, during the three months ended September 30, 2026, compared to the three months ended September 30, 2025.
Previous 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.
Current wording
Income tax expense for the three months ended September 30, 2026 was $2.1 million, or an effective tax rate of 24.6%, compared to $1.0 million, or an effective tax rate of 24.5%, for the three months ended September 30, 2025. The increase is due to higher projected pre-tax income for the twelve months ended December 31, 2026.
Previous wording
COMPARISON OF OPERATING RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND JUNE 30, 2025
Current wording
COMPARISON OF OPERATING RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2026 AND SEPTEMBER 30, 2025
Previous wording
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 wording
For the nine months ended September 30, 2026, the Company reported net income of $14.7 million, or $0.74 per diluted share, compared to $10.1 million, or $0.50 per diluted share, for the nine months ended September 30, 2025. Net interest income increased $6.9 million, or 13.4%, provision for credit losses decreased $159,000, non-interest income increased $1.4 million, or 14.9%, and non-interest expense increased $2.3 million, or 4.8%, during the same period. Return on average assets and return on average equity were 0.72% and 7.90% for the nine months ended September 30, 2026, respectively, compared to 0.50% and 5.64% for the nine months ended September 30, 2025, respectively.
Previous wording
The following tables set forth the information relating to our average balance and net interest income for the six months ended June 30, 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 wording
The following tables set forth the information relating to our average balance and net interest income for the nine months ended September 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.
Previous wording
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 wording
For the nine months ended September 30, 2026, the net interest margin increased 31 basis points from 2.70% for the nine months ended September 30, 2025 to 3.01%. The net interest margin, on a tax-equivalent basis (a non-GAAP financial measure), was 2.72% for the nine months ended September 30, 2025, compared to 3.02% for the nine months ended September 30, 2026. During the nine months ended September 30, 2026, the Company recorded $98,000 in prepayment penalties related to payoffs in the commercial portfolio, compared to $459,000 during the nine months ended September 30, 2025. For the nine months ended September 30, 2026 and the nine months ended September 30, 2025, excluding the prepayment penalties, the net interest margin increased 32 basis points from 2.68%, to 3.00%, respectively. See “Explanation of Use of Non-GAAP Financial Measurements” for the related net interest margin calculation and a reconciliation of GAAP to non-GAAP financial measures.
Previous wording
The average yield on interest-earning assets, without the impact of tax-equivalent adjustments, was 4.76% 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 wording
The average yield on interest-earning assets, without the impact of tax-equivalent adjustments, was 4.78% for the nine months ended September 30, 2026, compared to 4.64% for the nine months ended September 30, 2025. The average loan yield, without the impact of tax-equivalent adjustments, was 5.12% for the nine months ended September 30, 2026, compared to 4.98% for the nine months ended September 30, 2025. During the nine months ended September 30, 2026, average interest-earning assets increased $48.2 million, or 1.9%, to $2.6 billion, from the same period in 2025. The increase was primarily due to an increase in average loans of $100.1 million, or 4.8%, partially offset by a decrease in average short-term investments, consisting of cash and cash equivalents, of $35.9 million, or 57.6%, and a decrease in average securities of $15.3 million, or 4.1%.
Previous wording
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 wording
The average cost of total funds, including non-interest-bearing accounts and borrowings, was 1.85% for the nine months ended September 30, 2026, compared to 2.02% for the nine months ended September 30, 2025. The average cost of core deposits, which the Company defines as all deposits except time deposits, decreased two basis points to 1.02% for the nine months ended September 30, 2026, from 1.04% for the nine months ended September 30, 2025. The average cost of time deposits decreased 38 basis points from 3.77% for the nine months ended September 30, 2025 to 3.39% for the nine months ended September 30, 2026. The average cost of borrowings, including subordinated debt, increased seven basis points from 5.04% for the nine months ended September 30, 2025 to 5.11% for the nine months ended September 30, 2026. Average demand deposits, an interest-free source of funds, increased $21.9 million, or 3.8%, from $574.8 million, or 24.9% of total average deposits, for the nine months ended September 30, 2025 to $596.7 million, or 25.0% of total average deposits, for the nine months ended September 30, 2026.
Showing the first 40 of 50 pairs. Open the source sections for the rest.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
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.