What changed in this filing

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Item 1. Financial Statements

2025-08-08 compared with 2025-05-09 · 155 added, 84 removed, 805 unchanged (23% of the section changed)

1 unchanged sentence

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited) March 31,

(Unaudited) June 30,

2025 December 31,

8 unchanged sentences

Loans Held for Sale 512 900

Loans, Net of Allowance for Credit Losses of $ 9,819 and $ 9,805 at March 31, 2025 and December 31, 2024, Respectively

Loans, Net of Allowance for Credit Losses of $ 9,722 and $ 9,805 at June 30, 2025 and December 31, 2024, Respectively

1,101,102 1,082,821

18 unchanged sentences

Common Stock, $ 0.4167 Par Value;

35,000,000 Shares Authorized, 5,828,717 Shares Issued and 5,099,069 Shares Outstanding at March 31, 2025, with 5,787,744 and 5,132,654 Shares Issued and Outstanding at December 31, 2024.

35,000,000 Shares Authorized, 5,832,117 Shares Issued and 4,972,300 Shares Outstanding at June 30, 2025, with 5,787,744 and 5,132,654 Shares Issued and Outstanding at December 31, 2024.

Capital Surplus

2 unchanged sentences

94,178 90,856

Treasury Stock, at Cost ( 729,648 and 655,090 Shares at March 31, 2025 and December 31, 2024, Respectively)

Treasury Stock, at Cost ( 859,817 and 655,090 Shares at June 30, 2025 and December 31, 2024, Respectively)

( 21,120 ) ( 15,028 )

7 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

(Dollars in thousands, except share and per share data)

12 unchanged sentences

NET INTEREST AND DIVIDEND INCOME 12,540 11,470 23,850 23,062

Provision (Recovery) For Credit Losses - Loans 68 ( 143 )

(Recovery) Provision For Credit Losses - Unfunded Commitments ( 108 ) 106

NET INTEREST AND DIVIDEND INCOME AFTER NET (RECOVERY) PROVISION FOR CREDIT LOSSES 11,351 11,628

(Recovery) Provision For Credit Losses - Loans ( 136 ) 12 ( 68 ) ( 130 )

Provision (Recovery) For Credit Losses - Unfunded Commitments 144 ( 48 ) 36 57

NET INTEREST AND DIVIDEND INCOME AFTER NET PROVISION (RECOVERY) FOR CREDIT LOSSES 12,532 11,506 23,882 23,135

NONINTEREST INCOME

20 unchanged sentences

Advertising 124 78 242 206

Other Real Estate Owned (Income) — ( 23 )

Other Real Estate Owned 1 37 2 14

Amortization of Intangible Assets — 264 — 605

2 unchanged sentences

Income Before Income Tax Expense

4,715 3,210 7,051 8,327

Income Tax Expense 766 560 1,193 1,480

7 unchanged sentences

The accompanying notes are an integral part of these consolidated financial statements

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

(Dollars in thousands)

7 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

Three Months Ended March 31, 2025 Shares Issued Common Stock Capital Surplus Retained Earnings Treasury Stock Accumulated Other Comprehensive Loss Total Stockholders' Equity

Three Months Ended June 30, 2025 Shares Issued Common Stock Capital Surplus Retained Earnings Treasury Stock Accumulated Other Comprehensive Loss Total Stockholders' Equity

(Dollars in thousands, except share and per share data)

March 31, 2025 5,828,717 $ 2,429 $ 86,960 $ 91,484 $ ( 17,214 ) $ ( 15,370 ) $ 148,289

Comprehensive Income:

Net Income — — — 3,949 — — 3,949

Other Comprehensive Income — — — — — 1,054 1,054

Stock-Based Compensation Expense — — 193 — — — 193

Exercise of Stock Options 3,400 1 84 — 487 — 572

Treasury stock purchased, at cost ( 151,893 shares)

— — ( 47 ) — ( 4,393 ) — ( 4,440 )

Dividends Paid ($ 0.25 Per Share)

— — — ( 1,255 ) — — ( 1,255 )

June 30, 2025 5,832,117 $ 2,430 $ 87,190 $ 94,178 $ ( 21,120 ) $ ( 14,316 ) $ 148,362

Three Months Ended June 30, 2024 Shares Issued Common Stock Capital Surplus Retained Earnings Treasury Stock Accumulated Other Comprehensive Loss Total Stockholders' Equity

(Dollars in thousands, except share and per share data)

March 31, 2024 5,783,788 $ 2,411 $ 85,501 $ 86,308 $ ( 14,550 ) $ ( 18,080 ) $ 141,590

Comprehensive Income:

Net Income — — — 2,650 — — 2,650

Other Comprehensive Loss — — — — — ( 271 ) ( 271 )

Restricted Stock Awards Forfeited ( 200 ) ( 1 ) 19 — ( 18 ) — —

Stock-Based Compensation Expense — — 198 — — — 198

Dividends Paid ($ 0.25 Per Share)

— — — ( 1,285 ) — — ( 1,285 )

June 30, 2024 5,783,588 $ 2,410 $ 85,718 $ 87,673 $ ( 14,568 ) $ ( 18,351 ) $ 142,882

The accompanying notes are an integral part of these consolidated financial statements

Six Months Ended June 30, 2025 Shares Issued Common Stock Capital Surplus Retained Earnings Treasury Stock Accumulated Other Comprehensive Loss Total Stockholders' Equity

(Dollars in thousands, except share and per share data)

December 31, 2024 5,787,744 $ 2,412 $ 86,373 $ 90,856 $ ( 15,028 ) $ ( 17,235 ) $ 147,378

10 unchanged sentences

— — — ( 2,536 ) — — ( 2,536 )

March 31, 2025 5,828,717 $ 2,429 $ 86,960 $ 91,484 $ ( 17,214 ) $ ( 15,370 ) $ 148,289

Three Months Ended March 31, 2024 Shares Issued Common Stock Capital Surplus Retained Earnings Treasury Stock Accumulated Other Comprehensive Loss Total Stockholders' Equity

June 30, 2025 5,832,117 $ 2,430 $ 87,190 $ 94,178 $ ( 21,120 ) $ ( 14,316 ) $ 148,362

Six Months Ended June 30, 2024 Shares Issued Common Stock Capital Surplus Retained Earnings Treasury Stock Accumulated Other Comprehensive Loss Total Stockholders' Equity

(Dollars in thousands, except share and per share data)

10 unchanged sentences

— — — ( 2,566 ) — — ( 2,566 )

March 31, 2024 5,783,788 $ 2,411 $ 85,501 $ 86,308 $ ( 14,550 ) $ ( 18,080 ) $ 141,590

June 30, 2024 5,783,588 $ 2,410 $ 85,718 $ 87,673 $ ( 14,568 ) $ ( 18,351 ) $ 142,882

The accompanying notes are an integral part of these consolidated financial statements

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Three Months Ended March 31, 2025 2024

Six Months Ended June 30, 2025 2024

(Dollars in thousands)

4 unchanged sentences

Depreciation and Amortization 894 1,400

Provision (Recovery) for Credit Losses - Loans 68 ( 143 )

(Recovery) Provision for Credit Losses - Unfunded Commitments ( 108 ) 106

Recovery for Credit Losses - Loans ( 68 ) ( 130 )

Provision for Credit Losses - Unfunded Commitments 36 57

Loss on Securities 69 197

7 unchanged sentences

Noncash Expense for Stock-Based Compensation 416 376

Decrease (Increase) in Accrued Interest Receivable 57 ( 162 )

Increase in Accrued Interest Receivable ( 233 ) ( 568 )

Gain on Disposal of Premises and Equipment — ( 274 )

Increase (Decrease) in Deferred Income Tax 843 ( 522 )

Increase in Taxes Payable 384 925

Increase (Decrease) in Taxes Payable 780 ( 2,557 )

(Decrease) Increase in Accrued Interest Payable ( 779 ) 983

6 unchanged sentences

Proceeds from Sale of Securities 1,680 —

Net Decrease in Loans 7,466 24,482

Net (Increase) Decrease in Loans ( 8,968 ) 46,295

Purchase of Premises and Equipment ( 358 ) ( 2,189 )

Proceeds from Disposal of Premises and Equipment — 988

Proceeds From a Claim on Bank-Owned Life Insurance — 2,678

Investment in Low Income Housing Tax Credit

Proceeds From Sale of Other Real Estate Owned — 132

Decrease in Restricted Equity Securities 47 226

NET CASH PROVIDED BY INVESTING ACTIVITIES 13,181 8,158

NET CASH USED IN INVESTING ACTIVITIES ( 10,931 ) ( 7,755 )

FINANCING ACTIVITIES

Net Decrease in Deposits ( 2,420 ) ( 4,665 )

Net Increase in Deposits 25,915 82,609

Principal Payments on Other Borrowed Funds

Proceeds From Other Borrowed Funds 20,000 —

Cash Dividends Paid ( 2,536 ) ( 2,566 )

1 unchanged sentence

Exercise of Stock Options 1,146 —

NET CASH USED IN FINANCING ACTIVITIES ( 5,506 ) ( 5,950 )

NET CASH PROVIDED BY FINANCING ACTIVITIES 17,706 80,038

INCREASE IN CASH AND CASH EQUIVALENTS 14,934 74,377

3 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Three Months Ended March 31, 2025 2024

Six Months Ended June 30, 2025 2024

(Dollars in thousands)

6 unchanged sentences

Transfer of Loans from Loans Held for Sale to Portfolio 403 —

Proceeds Receivable from Claims on Bank-Owned Life Insurance — 2,679

Other Real Estate Acquired in Settlement of Loans 158 151

Securities Purchased Not Settled — 7,556

18 unchanged sentences

In the opinion of management, the accompanying unaudited interim financial statements include all adjustments considered necessary for a fair presentation of the Company’s financial position and results of operations at the dates and for the periods presented.

All these adjustments are of a normal, recurring nature, and they are the only adjustments included in the accompanying unaudited interim financial statements.

All these adjustments are of a normal, recurring nature, and they are the only adjustments included in the accompanying unaudited interim consolidated financial statements.

These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

1 unchanged sentence

Nature of Operations

The Company derives substantially all its income from banking and bank-related services which include interest income on commercial, commercial mortgage, residential real estate and consumer loan financing, as well as interest and dividend income on securities, insurance commissions, and fees generated from deposit services to its customers.

The Company derives substantially all its income from banking and bank-related services which include interest income on commercial, commercial mortgage, residential real estate and consumer loan financing, as well as interest and dividend income on securities, and fees generated from deposit services to its customers.

The Company provides banking services through its subsidiary, Community Bank, a Pennsylvania-chartered commercial bank headquartered in Carmichaels, Pennsylvania.

7 unchanged sentences

An operating segment is defined as a component of an enterprise that engages in business activities which generate revenue and incur expense, and the operating results of which are reviewed by management.

The Company has evaluated the provisions of ASC Topic 280, Segment Reporting , and determined that at March 31, 2025 and December 31, 2024, the Company had one reportable segment, community banking services.

The Company has evaluated the provisions of ASC Topic 280, Segment Reporting , and determined that at June 30, 2025 and December 31, 2024, the Company had one reportable segment, community banking services.

Critical Accounting Policies;

57 unchanged sentences

The Company made an accounting policy election to exclude accrued interest receivable from the amortized cost basis of loans and available-for-sale securities.

Accrued interest receivable on loans is reported as a component of accrued interest receivable and other assets on the Consolidated Statement of Financial Condition, totaled $ 4.0 million at March 31, 2025 and $ 3.9 million at December 31, 2024 and is excluded from the estimate of credit losses.

Accrued interest receivable on available-for-sale securities, also a component of accrued interest receivable and other assets on the Consolidated Statement of Financial Condition, totaled $ 1.5 million at March 31, 2025 and $ 1.7 million at December 31, 2024 and is excluded from the estimate of credit losses.

Accrued interest receivable on loans is reported as a component of accrued interest receivable and other assets on the Consolidated Statement of Financial Condition, totaled $ 4.2 million at June 30, 2025 and $ 3.9 million at December 31, 2024 and is excluded from the estimate of credit losses.

Accrued interest receivable on available-for-sale securities, also a component of accrued interest receivable and other assets on the Consolidated Statement of Financial Condition, totaled $ 1.6 million at June 30, 2025 and $ 1.7 million at December 31, 2024 and is excluded from the estimate of credit losses.

Recent Accounting Standards

13 unchanged sentences

The Company does not expect the adoption of the ASU to have a material effect on the Company's consolidated statements of financial condition and results of operations.

The One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S on July 4, 2025.

The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions.

The legislation has various effective dates, with certain provisions starting in 2025 and others implemented through 2027.

The Company is currently assessing the impact of the OBBBA on its consolidated statements of financial condition and results of operations.

Earnings Pe r Share

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

(Dollars in thousands, except share and per share data)

8 unchanged sentences

$ 0.79 $ 0.52 $ 1.15 $ 1.33

0.74 0.51 1.09 1.33

The dilutive effect on weighted average diluted common shares outstanding is the result of outstanding stock options and nonvested restricted stock.

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Stock Options 28,090 402,297 23,290 300,597

1 unchanged sentence

The following tables present the amortized cost and fair value of securities available-for-sale at the dates indicated:

March 31, 2025

June 30, 2025

(Dollars in thousands)

29 unchanged sentences

The following tables show the Company’s gross unrealized losses and fair value, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position, at the dates indicated:

March 31, 2025

June 30, 2025

Less than 12 months

23 unchanged sentences

16 $ 95,072 $ ( 958 ) 37 $ 93,227 $ ( 21,040 ) 53 $ 188,299 $ ( 21,998 )

For debt securities, the Company does not believe that any individual unrealized loss as of March 31, 2025 or December 31, 2024, represents a credit related impairment.

For debt securities, the Company does not believe that any individual unrealized loss as of June 30, 2025 or December 31, 2024, represents a credit related impairment.

The Company performs a review of the entire securities portfolio on a quarterly basis to identify securities that may indicate a credit related impairment.

The unrealized losses on securities at March 31, 2025 and December 31, 2024 relate principally to changes in market interest rates subsequent to the acquisition of the specific securities.

The unrealized losses on securities at June 30, 2025 and December 31, 2024 relate principally to changes in market interest rates subsequent to the acquisition of the specific securities.

The Company does not intend to sell, and it is not more likely than not that it will be required to sell any of the securities in an unrealized loss position before recovery of its amortized cost or maturity of the security.

Total securities available to be pledged have a fair value of $ 239.8 million at March 31, 2025 and $ 251.3 million at December 31, 2024 of which securities with a fair value of $ 163.1 million and $ 176.2 million at March 31, 2025 and December 31, 2024, respectively, were pledged to secure uninsured public deposits, borrowings or for other purposes as required or permitted by law.

Total securities available to be pledged have a fair value of $ 255.7 million at June 30, 2025 and $ 251.3 million at December 31, 2024 of which securities with a fair value of $ 166.2 million and $ 176.2 million at June 30, 2025 and December 31, 2024, respectively, were pledged to secure uninsured public deposits, borrowings or for other purposes as required or permitted by law.

The scheduled maturities of securities available-for-sale are summarized as follows.

2 unchanged sentences

however, regular principal payments and prepayments of principal are received on a monthly basis.

March 31, 2025

June 30, 2025

(Dollars in thousands)

6 unchanged sentences

$ 284,472 $ 266,281

The following table presents the loss on equity securities from both realized sales and unrealized market adjustments for the periods indicated.

There was no realized gain or loss on sales of debt securities for the periods indicated.

The following table presents the loss on equity securities from both realized sales and unrealized market adjustments for the periods indicated.

All losses presented in the table below are reported in Net Loss on Securities on the Consolidated Statements of Income.

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

(Dollars in thousands)

14 unchanged sentences

Commercial real estate loans generally present a higher level of credit risk than loans secured by residences.

This greater risk is due to several factors, including the concentration of principal in a limited number of loans and borrowers, the effect of general economic conditions on income-producing properties, and the increased difficulty in evaluating and monitoring these types of loans.

Furthermore, the repayment of commercial real estate loans is typically dependent upon the successful operation of the

related real estate project.

Furthermore, the repayment of commercial real estate loans is typically dependent upon the successful operation of the related real estate project.

If the cash flow from the project is reduced (for example, if leases are not obtained or renewed, a bankruptcy court modifies a lease term, or a major tenant is unable to fulfill its lease obligations), the borrower’s ability to repay the loan may be impaired.

7 unchanged sentences

The following table presents the classifications of loans as of the dates indicated:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(Dollars in thousands)

9 unchanged sentences

$ 1,101,102 $ 1,082,821

Included in total loans above are unamortized net deferred loan fees of $ 896 ,000 and $ 846 ,000 at March 31, 2025 and December 31, 2024, respectively.

Total unamortized net deferred loan fees were $ 962,000 and $ 846,000 at June 30, 2025 and December 31, 2024, respectively.

The Company uses a nine-point internal risk rating system to monitor the credit quality of the overall loan portfolio.

7 unchanged sentences

There were no loans in the criticized category of Loss.

Classified Loans by Origination Year (as of March 31, 2025)

Classified Loans by Origination Year (as of June 30, 2025)

(dollars in thousands) 2025 2024 2023 2022 2021 Prior Revolving Loans Amortized Cost Basis Total

80 unchanged sentences

The following tables present the classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans as of the dates indicated:

March 31, 2025

June 30, 2025

(Dollars in Thousands)

17 unchanged sentences

$ 1,084,733 $ 4,101 $ 2,003 $ — $ 6,104 $ 1,789 $ 1,092,626

Additional interest income that would have been recorded if the loans that were nonaccrual at March 31, 2025 were current was $ 52,000 for the three months ended March 31, 2025, and $ 20,000 for the three months ended March 31, 2024.

Additional interest income that would have been recorded if the loans that were nonaccrual at June 30, 2025 were current was $ 29,000 and $ 81,000 for the three and six months ended June 30, 2025, respectively, and $ 21,000 and $ 40,000 for the three and six months ended June 30, 2024, respectively.

The following table sets forth the amounts for amortized cost basis of loans on nonaccrual status, loans past due 90 days still accruing, and categories of nonperforming assets at the dates indicated.

March 31, 2025

June 30, 2025

Nonaccrual With No ACL Nonaccrual With ACL Loans Past Due 90 Days Still Accruing Total Nonperforming Assets

15 unchanged sentences

Total Nonperforming Assets

No interest income on nonaccrual loans was recognized during the three months ended March 31, 2025 and March 31, 2024.

No interest income on nonaccrual loans was recognized during the three and six months ended June 30, 2025 and June 30, 2024.

All modifications and refinancing, including those with borrowers that are experiencing financial difficulty are subject to the modification guidance in ASC 310-20.

3 unchanged sentences

Additionally, the effective interest rate should be recalculated based on the amortized cost basis of the new loan and a reassessment of contractual cash flow.

For the three months ended March 31, 2025 and March 31, 2024, there were no new loan modifications to borrowers experiencing financial difficulty.

The recorded investment of residential real estate loans for which formal foreclosure proceedings were in process according to applicable requirements of the local jurisdiction was $ 720 ,000 and $ 1.2 million at March 31, 2025 and December 31, 2024, respectively.

For the three and six months ended June 30, 2025 and June 30, 2024, there were no new loan modifications to borrowers experiencing financial difficulty.

The recorded investment of residential real estate loans for which formal foreclosure proceedings were in process according to applicable requirements of the local jurisdiction was $ 530 ,000 and $ 1.2 million at June 30, 2025 and December 31, 2024, respectively.

The activity in the ACL - Loans is summarized below by primary segments for the periods indicated:

(Dollars in thousands)

December 31, 2024 $ 2,926 $ 3,103 $ 1,264 $ 1,584 $ 687 $ 241 $ 9,805

March 31, 2025 $ 2,896 $ 3,128 $ 1,227 $ 1,748 $ 586 $ 234 $ 9,819

— ( 19 ) — ( 5 ) ( 47 ) — ( 71 )

1 unchanged sentence

(Recovery) Provision for Credit Losses - Loans ( 351 ) 295 ( 335 ) 160 99 ( 4 ) ( 136 )

March 31, 2025 $ 2,896 $ 3,128 $ 1,227 $ 1,748 $ 586 $ 234 $ 9,819

June 30, 2025 $ 2,545 $ 3,404 $ 892 $ 1,946 $ 705 $ 230 $ 9,722

Residential Real

3 unchanged sentences

(Dollars in thousands)

December 31, 2023 $ 3,129 $ 2,630 $ 639 $ 1,693 $ 1,367 $ 249 $ 9,707

March 31, 2024 $ 2,832 $ 2,948 $ 870 $ 1,587 $ 1,084 $ 261 $ 9,582

Charge-offs — — — — ( 156 ) — ( 156 )

Recoveries 2 — — 46 41 — 89

Provision (Recovery) for Credit Losses - Loans 10 134 ( 126 ) ( 148 ) 162 ( 20 ) 12

June 30, 2024 $ 2,844 $ 3,082 $ 744 $ 1,485 $ 1,131 $ 241 $ 9,527

(Dollars in thousands)

December 31, 2024 $ 2,926 $ 3,103 $ 1,264 $ 1,584 $ 687 $ 241 $ 9,805

— ( 19 ) — ( 5 ) ( 183 ) — ( 207 )

1 — — 87 104 — 192

(Recovery) Provision for Credit Losses - Loans ( 382 ) 320 ( 372 ) 280 97 ( 11 ) ( 68 )

March 31, 2024 $ 2,832 $ 2,948 $ 870 $ 1,587 $ 1,084 $ 261 $ 9,582

June 30, 2025 $ 2,545 $ 3,404 $ 892 $ 1,946 $ 705 $ 230 $ 9,722

(Dollars in thousands)

December 31, 2023 $ 3,129 $ 2,630 $ 639 $ 1,693 $ 1,367 $ 249 $ 9,707

— — — ( 12 ) ( 206 ) — ( 218 )

11 — — 89 68 — 168

(Recovery) Provision for Credit Losses - Loans ( 296 ) 452 105 ( 285 ) ( 98 ) ( 8 ) ( 130 )

June 30, 2024 $ 2,844 $ 3,082 $ 744 $ 1,485 $ 1,131 $ 241 $ 9,527

Loans that do not share risk characteristics are evaluated on an individual basis.

For loans that are individually evaluated and collateral dependent, financial loans where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the financial asset to be provided substantially through the operation or sale of the collateral, the ACL - Loans is measured based on the difference between the fair value of the collateral and the amortized cost basis of the asset as of the measurement date.

During the three months ended March 31, 2025, there were $ 7.9 million of loans that required specific valuation allowances of $ 570 ,000.

During the three months ended March 31, 2024, there were no loans that required a credit loss to be individually assigned.

During the three and six months ended June 30, 2025, there were $ 5.6 million of loans that required specific valuation allowances of $ 70 ,000.

During the three and six months ended June 30, 2024, there were no loans that required a credit loss to be individually assigned.

The Company’s allowance for credit losses on unfunded commitments is recognized as a liability (accrued interest payable and other liabilities on the Consolidated Statement of Financial Condition), with adjustments to the reserve recognized in provision for credit losses - unfunded commitments on the Consolidated Statement of Income.

1 unchanged sentence

(in thousands) Allowance for Credit Losses

Balance at December 31, 2024

Recovery for Credit Losses - Unfunded Commitments ( 108 )

Balance at March 31, 2025

Provision for Credit Losses - Unfunded Commitments 144

Balance at June 30, 2025 $ 727

(in thousands) Allowance for Credit Losses

Balance at March 31, 2024 $ 605

Recovery for Credit Losses - Unfunded Commitments ( 48 )

Balance at June 30, 2024 $ 557

(in thousands) Allowance for Credit Losses

Balance at December 31, 2024 $ 691

Provision for Credit Losses - Unfunded Commitments 36

Balance at March 31, 2024 $ 606

Balance at June 30, 2025 $ 727

(in thousands) Allowance for Credit Losses

Balance at December 31, 2023 $ 500

Provision for Credit Losses - Unfunded Commitments 57

Balance at June 30, 2024 $ 557

Derivatives and Hedging Activities

Derivatives Not Designated as Hedging Instruments

The Company has four risk participation agreements with financial institution counterparties for interest rate swaps related to loans in which it is a participant.

The Company has five risk participation agreements with financial institution counterparties for interest rate swaps related to loans in which it is a participant.

The risk participation agreements provide credit protection to the financial institution should the borrower fail to perform on its interest rate derivative contract with the financial institution.

5 unchanged sentences

These adjustments are included in Accrued Interest Payable and Other Liabilities on the Company's Consolidated Statement of Financial Condition.

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(Dollars in Thousands)

26 unchanged sentences

These instruments are classified as Level 2.

There were no transfers into or out of Level 3 during the three months ended March 31, 2025 or year ended December 31, 2024.

There were no transfers into or out of Level 3 during the six months ended June 30, 2025 or year ended December 31, 2024.

The following table presents the financial assets measured at fair value on a recurring basis and reported on the Consolidated Statements of Financial Condition as of the dates indicated, by level within the fair value hierarchy:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(Dollars in thousands)

22 unchanged sentences

The table also presents the significant unobservable inputs used in the fair value measurements.

Financial Asset Fair Value Hierarchy March 31,

Financial Asset Fair Value Hierarchy June 30,

2025 Valuation

16 unchanged sentences

Fair value is measured based on the value of the collateral securing the loans and is classified as Level 3 in the fair value hierarchy.

At March 31, 2025, the fair value of these loans consisted of loan balances of $ 7.9 million less specific valuation allowances of $ 570 ,000.

At June 30, 2025, the fair value of these loans consisted of loan balances of $ 5.6 million less specific valuation allowances of $ 70 ,000.

At December 31, 2024, the fair value of these loans consisted of loan balances of $ 5.6 million less specific valuation allowances of $ 398 ,000.

3 unchanged sentences

Since the valuation model includes significant unobservable inputs as listed above, MSRs are classified as Level 3.

At March 31, 2025 and December 31, 2024, the Company did not have any MSRs that would be required to be remeasured.

At June 30, 2025 and December 31, 2024, the Company did not have any MSRs that would be required to be remeasured.

Other real estate owned ("OREO") properties are evaluated at the time of acquisition and recorded at fair value, less estimated selling costs.

1 unchanged sentence

The fair value of an OREO property is determined from a qualified independent appraisal and is classified as Level 3 in the fair value hierarchy.

As of March 31, 2025 and December 31, 2024, the Company did not have any OREO that would be required to be remeasured.

As of June 30, 2025 and December 31, 2024, the Company did not have any OREO that would be required to be remeasured.

Financial instruments are defined as cash, evidence of an ownership in an entity, or a contract which creates an obligation or right to receive or deliver cash or another financial instrument from/to a second entity on potentially favorable or unfavorable terms.

5 unchanged sentences

The following table presents the estimated fair values of the Company’s financial instruments at the dates indicated.

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(Dollars in thousands)

60 unchanged sentences

For secured letters of credit, the collateral is typically Company deposit instruments or customer business assets.

The Company recorded no liability associated with standby letters of credit as of March 31, 2025 and December 31, 2024.

The Company recorded no liability associated with standby letters of credit as of June 30, 2025 and December 31, 2024.

The Company evaluates all contracts at commencement to determine if a lease is present.

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

(Dollars in thousands)

19 unchanged sentences

Lease Liabilities $ 2,723

There were no new lease agreements which commenced during the three months ended March 31, 2025.

During the three months ended March 31, 2024, the Bank completed the sale and leaseback of a branch office located in Rostraver, Pennsylvania, for a sales price of $ 1.1 million.

There were no new lease agreements which commenced during the three months ended June 30, 2025.

During the three months ended June 30, 2024, the Bank completed the sale and leaseback of a branch office located in Rostraver, Pennsylvania, for a sales price of $ 1.1 million.

As a result, the Bank recorded a pre-tax net gain of $ 274,000 .

Concurrently, the Bank entered into a lease agreement with the purchaser under which the Bank will lease the property for an initial term of 20 years with specified renewal options.

Concurrently, the Bank entered into a lease agreement with the purchaser under which the Bank leased the property for an initial term of 20 years with specified renewal options.

The lease agreement includes a 2.0 % annual rent escalation during the initial term and renewal terms, if exercised.

The Bank recorded an operating lease ROU asset and corresponding lease liability of $ 1.0 million.

During the six months ended June 30, 2024, the Bank entered into a lease agreement under which the Bank leased retail property located in Uniontown, Pennsylvania.

The lease agreement is for an initial term of five years with specific renewal options.

The lease agreement includes a 2.5 % annual rent escalation during the initial term and renewal terms, if exercised.

The Bank recorded an operating lease ROU asset and corresponding lease liability of $ 410,000 .

Segment and Related Information

1 unchanged sentence

The Company's President and Chief Executive Officer functions as its CODM.

At March 31, 2025 and December 31, 2024, the Company had one reportable segment, community banking services, upon which the CODM makes decisions regarding how to allocate resources and assess performance.

At June 30, 2025 and December 31, 2024, the Company had one reportable segment, community banking services, upon which the CODM makes decisions regarding how to allocate resources and assess performance.

Individual bank branches offer a group of similar services, including commercial, real estate and consumer loans, time deposits, checking and savings accounts all with similar operating and economic characteristics.

10 unchanged sentences

Forfeited ( 38,904 ) 23.30

Outstanding Options at March 31, 2025 320,883 $ 23.72 5.1

Exercisable Options at March 31, 2025 200,163 $ 24.32 3.3

Outstanding Options at June 30, 2025 288,647 $ 23.79 5.4

Exercisable Options at June 30, 2025 168,727 $ 24.53 3.7

Number of Shares Weighted Average Exercise Price Weighted Average Remaining Service Period in Years

Nonvested Options at March 31, 2025 120,720 $ 22.74 8.1

Nonvested Options at June 30, 2025 119,920 $ 22.74 7.9

The following table presents restricted stock award information for the period indicated:

4 unchanged sentences

Forfeited ( 310 ) 21.50

Nonvested Restricted Stock at March 31, 2025 74,091 $ 25.26 3.5

Nonvested Restricted Stock at June 30, 2025 73,891 $ 25.27 3.4

The Company recognizes expense over a five-year vesting period for the restricted stock awards and stock options.

Stock-based compensation expense related to restricted stock awards and stock options was $ 223,000 and $ 178,000 for the three months ended March 31, 2025 and 2024.

Stock-based compensation expense was $ 223,000 and $ 178,000 for the three months ended March 31, 2025 and 2024.

As of March 31, 2025 and December 31, 2024, total unrecognized compensation expense was $ 535,000 and $ 701 ,000, respectively, related to stock options, and $ 1.8 million and $ 1.2 million, respectively, related to restricted stock awards.

Intrinsic value represents the amount by which the fair value of the underlying stock at March 31, 2025 and December 31, 2024 exceeds the exercise price of the stock options.

The intrinsic value of stock options was $ 1.6 million and $ 1.9 million at March 31, 2025 and December 31, 2024, respectively.

At March 31, 2025 and December 31, 2024, there were 262,265 and 287,500 shares of common stock available and reserved under the 2024 Plan to be issued as restricted stock awards or units based on the terms of the Plan.

At March 31, 2025, 25,235 shares have been granted under the 2024 Plan.

Stock-based compensation expense related to restricted stock awards and stock options was $ 193,000 and $ 198,000 for the three months ended June 30, 2025 and 2024.

Stock-based compensation expense was $ 416,000 and $ 376,000 for the six months ended June 30, 2025 and 2024.

As of June 30, 2025 and December 31, 2024, total unrecognized compensation expense was $ 489,000 and $ 701 ,000, respectively, related to stock options, and $ 1.6 million and $ 1.2 million, respectively, related to restricted stock awards.

Intrinsic value represents the amount by which the fair value of the underlying stock at June 30, 2025 and December 31, 2024 exceeds the exercise price of the stock options.

The intrinsic value of stock options was $ 1.4 million and $ 1.9 million at June 30, 2025 and December 31, 2024, respectively.

At June 30, 2025 and December 31, 2024, there were 262,265 and 287,500 shares of common stock available and reserved under the 2024 Plan to be issued as restricted stock awards or units based on the terms of the Plan.

At June 30, 2025, 25,235 shares have been granted under the 2024 Plan.

The 2021 Plan shall remain in effect as long as any awards are outstanding, but as a result of the approval of the 2024 Plan, no more awards can be granted under the 2021 Plan.

11 unchanged sentences

The following table presents the balances of the Company's LIHTC investments and related unfunded commitments:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(Dollars in thousands)

6 unchanged sentences

The following table presents other information related to the Company's low income housing tax credit investments:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(dollars in thousands)

4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements