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Item 1. Financial Statements

2025-11-07 compared with 2025-08-08 · 223 added, 146 removed, 814 unchanged (31% of the section changed)

1 unchanged sentence

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited) June 30,

(Unaudited) September 30,

2025 December 31,

8 unchanged sentences

Loans Held for Sale 107 900

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

Loans, Net of Allowance for Credit Losses of $ 10,146 and $ 9,805 at September 30, 2025 and December 31, 2024, Respectively

1,133,240 1,082,821

18 unchanged sentences

Common Stock, $ 0.4167 Par Value;

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.

35,000,000 Shares Authorized, 5,833,533 Shares Issued and 4,998,383 Shares Outstanding at September 30, 2025, with 5,787,744 and 5,132,654 Shares Issued and Outstanding at December 31, 2024.

Capital Surplus

2 unchanged sentences

87,188 90,856

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

Treasury Stock, at Cost ( 835,150 and 655,090 Shares at September 30, 2025 and December 31, 2024, Respectively)

( 20,561 ) ( 15,028 )

5 unchanged sentences

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

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED)

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

4 unchanged sentences

Taxable 2,848 3,289 8,485 8,437

Tax-Exempt 146 — 146 —

Dividends 7 28 44 82

7 unchanged sentences

NET INTEREST AND DIVIDEND INCOME 13,099 11,474 36,949 34,536

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

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

Provision (Recovery) for Credit Losses - Loans 336 25 269 ( 105 )

Recovery for Credit Losses - Unfunded Commitments ( 77 ) ( 66 ) ( 42 ) ( 9 )

NET INTEREST AND DIVIDEND INCOME AFTER NET PROVISION (RECOVERY) FOR CREDIT LOSSES

12,840 11,515 36,722 34,650

NONINTEREST INCOME

2 unchanged sentences

Other Commissions 63 104 192 188

Net Gain on Sales of Loans 26 9 49 30

Net Loss on Securities — ( 31 ) ( 69 ) ( 197 )

Net Gain on Sale of Loans 50 18 99 49

Net (Loss) Gain on Investment Securities ( 11,752 ) 245 ( 11,821 ) 49

Net Gain on Purchased Tax Credits 4 12 11 37

Gain on Sale of Subsidiary — 138 — 138

Net Gain on Disposal of Premises and Equipment — — — 274

2 unchanged sentences

Other Income 229 117 512 523

TOTAL NONINTEREST INCOME 931 688 1,718 2,604

TOTAL NONINTEREST (LOSS) INCOME ( 10,677 ) 1,233 ( 8,958 ) 3,839

NONINTEREST EXPENSE

12 unchanged sentences

TOTAL NONINTEREST EXPENSE 9,183 8,782 27,731 26,197

Income Before Income Tax Expense

Income (Loss) Before Income Tax (Benefit) Expense

( 7,020 ) 3,966 33 12,292

Income Tax Expense 766 560 1,193 1,480

NET INCOME $ 3,949 $ 2,650 $ 5,858 $ 6,847

EARNINGS PER SHARE

Income Tax (Benefit) Expense ( 1,324 ) 747 ( 131 ) 2,227

Net (Loss) Income $ ( 5,696 ) $ 3,219 $ 164 $ 10,065

(LOSS) EARNINGS PER SHARE

Basic $ ( 1.14 ) $ 0.63 $ 0.03 $ 1.96

6 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

(Dollars in thousands)

Net Income $ 3,949 $ 2,650 $ 5,858 $ 6,847

Other Comprehensive Income (Loss):

Unrealized Gain (Loss) on Investment Securities Available-for-Sale 1,339 ( 344 ) 3,711 ( 1,972 )

Net (Loss) Income $ ( 5,696 ) $ 3,219 $ 164 $ 10,065

Other Comprehensive Income:

Change in Unrealized Loss on Available-for-Sale Debt Securities

1,341 5,644 5,052 3,672

Income Tax Effect ( 285 ) ( 1,203 ) ( 1,077 ) ( 835 )

Other Comprehensive Income (Loss), Net of Income Tax Effect 1,054 ( 271 ) 2,919 ( 1,604 )

Reclassification Adjustment for Loss on Sale of Securities Included in Net Income (1)

11,757 — 11,757 —

Income Tax Effect (2)

( 2,505 ) — ( 2,505 ) —

Other Comprehensive Income, Net of Income Tax Effect

10,308 4,441 13,227 2,837

Total Comprehensive Income $ 4,612 $ 7,660 $ 13,391 $ 12,902

(1) Reported in Net (Loss) Gain on Investment Securities on the Consolidated Statements of Income.

(2) Reported in Income Tax (Benefit) Expense on the Consolidated Statements of Income.

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

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

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

Three Months Ended September 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

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

Comprehensive Income:

Net Income — — — 3,949 — — 3,949

Net Loss — — — ( 5,696 ) — — ( 5,696 )

Other Comprehensive Income — — — — — 10,308 10,308

5 unchanged sentences

— — — ( 1,294 ) — — ( 1,294 )

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

September 30, 2025 5,833,533 $ 2,431 $ 87,415 $ 87,188 $ ( 20,561 ) $ ( 4,008 ) $ 152,465

Three Months Ended September 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

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

Comprehensive Income:

Net Income — — — 3,219 — — 3,219

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

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

Other Comprehensive Income — — — — — 4,441 4,441

Stock-Based Compensation Expense — — 215 — — — 215

Exercise of Stock Options 5,850 3 139 — ( 148 ) — ( 6 )

Treasury Stock Purchased, at cost ( 18,220 shares)

— — — — ( 326 ) — ( 326 )

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

September 30, 2024 5,789,438 $ 2,413 $ 86,072 $ 89,607 $ ( 15,042 ) $ ( 13,910 ) $ 149,140

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

Nine Months Ended September 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)

11 unchanged sentences

— — — ( 3,832 ) — — ( 3,832 )

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

September 30, 2025 5,833,533 $ 2,431 $ 87,415 $ 87,188 $ ( 20,561 ) $ ( 4,008 ) $ 152,465

Nine Months Ended September 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)

2 unchanged sentences

Net Income — — — 10,065 — — 10,065

Other Comprehensive Loss — — — — — ( 1,604 ) ( 1,604 )

Other Comprehensive Income — — — — — 2,837 2,837

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

1 unchanged sentence

Stock-Based Compensation Expense — — 591 — — — 591

Exercise of Stock Options 5,850 3 139 — ( 148 ) — ( 6 )

Treasury Stock Purchased, at cost ( 18,442 shares)

2 unchanged sentences

— — — ( 3,850 ) — — ( 3,850 )

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

September 30, 2024 5,789,438 $ 2,413 $ 86,072 $ 89,607 $ ( 15,042 ) $ ( 13,910 ) $ 149,140

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

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Six Months Ended June 30, 2025 2024

Nine Months Ended September 30, 2025 2024

(Dollars in thousands)

4 unchanged sentences

Depreciation and Amortization 1,349 1,973

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

Provision for Credit Losses - Unfunded Commitments 36 57

Loss on Securities 69 197

Provision (Recovery) for Credit Losses - Loans 269 ( 105 )

Recovery for Credit Losses - Unfunded Commitments ( 42 ) ( 9 )

Net Loss (Gain) on Sale of Debt Securities

Net Loss on Sale of Equity Securities

Net Unrealized Loss (Gain) Recognized on Equity Securities

Gain on Purchased Tax Credits ( 11 ) ( 37 )

3 unchanged sentences

Originations of Mortgage Loans for Sale ( 4,740 ) ( 4,075 )

Gain on Sale of Loans ( 49 ) ( 30 )

Gain on Sale of Other Real Estate Owned and Repossessed Assets — 30

Net Gain on Sale of Loans ( 99 ) ( 49 )

Loss on Sale of Other Real Estate Owned and Repossessed Assets — 30

Noncash Expense for Stock-Based Compensation 610 591

Increase in Accrued Interest Receivable ( 753 ) ( 1,160 )

Gain on Disposal of Premises and Equipment — ( 274 )

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

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

Net Gain on Disposal of Premises and Equipment — ( 274 )

Increase in Deferred Income Tax 3,508 1,035

Decrease in Taxes Payable ( 448 ) ( 4,314 )

(Decrease) Increase in Accrued Interest Payable ( 527 ) 1,364

5 unchanged sentences

Purchases of Securities ( 149,336 ) ( 70,224 )

Proceeds from Sale of Securities 1,680 —

Proceeds from Sale of Debt Securities

Proceeds from Sale of Equity Securities

Net (Increase) Decrease in Loans ( 46,443 ) 50,551

3 unchanged sentences

Investment in Low Income Housing Tax Credit

( 354 ) ( 604 )

Proceeds From Sale of Other Real Estate Owned — 132

Decrease in Restricted Equity Securities 47 226

Purchase of Restricted Equity Securities ( 4,880 ) —

Redemption of Restricted Equity Securities 4,928 269

Net Cash Used in Investing Activities ( 48,451 ) ( 8,533 )

7 unchanged sentences

Net Cash Provided by Financing Activities 41,989 82,474

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

Increase in Cash and Due from Banks 6,318 79,102

CASH AND DUE FROM BANKS AT BEGINNING OF YEAR 49,572 68,223

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Six Months Ended June 30, 2025 2024

Nine Months Ended September 30, 2025 2024

(Dollars in thousands)

10 unchanged sentences

Right of Use Asset Recognized — 1,419

Lease Liability Recognized — 1,452

Unfunded Commitment in Low Income Housing Tax Credit

7 unchanged sentences

CB Financial, the Bank and Exchange Underwriters are collectively referred to as the “Company”.

Effective September 29, 2025, EU merged with and into the Bank, with the Bank as the surviving institution.

All intercompany transactions and balances have been eliminated in consolidation.

17 unchanged sentences

During 2024, the Company recognized an additional gain of $ 138,000 following the final settlement of all liabilities and an earn-out payment of $ 708,000 .

During 2025, an additional $ 49,000 earn-out payment was recognized.

Operating Segments

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 June 30, 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 September 30, 2025 and December 31, 2024, the Company had one reportable segment, community banking services.

Critical Accounting Policies;

4 unchanged sentences

The measurement of expected credit losses is applicable to loans receivable and securities measured at amortized cost.

It also applies to off-balance sheet credit exposures such as loan commitments and unused lines of credit.

The allowance is established through a provision for credit losses that is charged against income.

The methodology for

determining the allowance for credit losses is considered a critical accounting policy by management because of the high degree of judgment involved, the subjectivity of the assumptions used, and the potential for changes in the forecasted economic environment that could result in changes to the amount of the recorded ACL.

It also applies to off-balance sheet credit exposures such as loan commitments and unused lines of

The ACL is established through a provision for credit losses that is charged against income.

The methodology for determining the ACL is considered a critical accounting policy by management because of the high degree of judgment involved, the subjectivity of the assumptions used, and the potential for changes in the forecasted economic environment that could result in changes to the amount of the recorded ACL.

The ACL is reported separately as a contra-asset account on the Consolidated Statement of Financial Condition.

47 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 $ 4.2 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.

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 $ 4.5 million at September 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 $ 1.8 million at September 30, 2025 and $ 1.7 million at December 31, 2024 and is excluded from the estimate of credit losses.

Recent Accounting Standards

22 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

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

Net Income $ 3,949 $ 2,650 $ 5,858 $ 6,847

Net (Loss) Income

$ ( 5,696 ) $ 3,219 $ 164 $ 10,065

Weighted-Average Basic Common Shares Outstanding

4 unchanged sentences

5,319,594 5,346,750 5,357,173 5,328,610

Earnings Per Share:

(Loss) Earnings Per Share:

$ ( 1.14 ) $ 0.63 $ 0.03 $ 1.96

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

2 unchanged sentences

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

June 30, 2025

September 30, 2025

(Dollars in thousands)

Available-for-Sale Debt Securities:

Government Agencies

$ 4,996 $ — $ ( 819 ) $ 4,177

Obligations of States and Political Subdivisions

3 unchanged sentences

Collateralized Mortgage Obligations - Government-Sponsored Enterprises 60,886 510 ( 5,473 ) 55,923

Collateralized Mortgage Obligations - Non-Agency 11,300 — ( 145 ) 11,155

Collateralized Loan Obligations 107,184 16 ( 184 ) 107,016

20 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:

June 30, 2025

September 30, 2025

Less than 12 months

1 unchanged sentence

(Dollars in thousands)

Government Agencies

— $ — $ — 1 $ 4,177 $ ( 819 ) 1 $ 4,177 $ ( 819 )

Obligations of States and Political Subdivisions

1 537 — 5 2,356 ( 61 ) 6 2,893 ( 61 )

Mortgage Backed Securities- Government-Sponsored Enterprises — $ — $ — 1 $ 63 $ ( 1 ) 1 $ 63 $ ( 1 )

Collateralized Mortgage Obligations - Government-Sponsored Enterprises 3 15,775 ( 116 ) 7 19,188 ( 5,357 ) 10 34,963 ( 5,473 )

Collateralized Mortgage Obligations - Non-Agency 3 9,753 ( 145 ) — — — 3 9,753 ( 145 )

Collateralized Loan Obligations 9 64,663 ( 169 ) 2 11,557 ( 15 ) 11 76,220 ( 184 )

6 unchanged sentences

Government Agencies — $ — $ — 1 $ 3,945 $ ( 1,051 ) 1 $ 3,945 $ ( 1,051 )

— $ — $ — 1 $ 3,945 $ ( 1,051 ) 1 $ 3,945 $ ( 1,051 )

Obligations of States and Political Subdivisions 2 1,068 ( 16 ) 5 2,279 ( 133 ) 7 3,347 ( 149 )

2 1,068 ( 16 ) 5 2,279 ( 133 ) 7 3,347 ( 149 )

Mortgage Backed Securities- Government-Sponsored Enterprises 5 35,232 ( 222 ) 8 15,131 ( 3,043 ) 13 50,363 ( 3,265 )

3 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 June 30, 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 September 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 June 30, 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 September 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 $ 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.

Total securities available to be pledged have a fair value of $ 247.9 million at September 30, 2025 and $ 251.3 million at December 31, 2024 of which securities with a fair value of $ 179.3 million and $ 176.2 million at September 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.

June 30, 2025

September 30, 2025

(Dollars in thousands)

6 unchanged sentences

$ 276,757 $ 271,664

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.

The following table presents the gain and loss on sales of debt securities, as well as the gain and loss on equity securities from both realized sales and unrealized market adjustments for the periods indicated.

All gains and losses presented in the table below are reported in Net (Loss) Gain on Investment Securities on the Consolidated Statements of Income.

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

(Dollars in thousands)

Debt Securities

Gross Realized Gain $ 423 $ — $ 423 $ —

Gross Realized Loss ( 12,180 ) — ( 12,180 ) —

Net Gain on Debt Securities $ ( 11,757 ) $ — $ ( 11,757 ) $ —

Equity Securities

Net Unrealized Loss Recognized on Securities Held $ — $ ( 31 ) $ ( 56 ) $ ( 197 )

Net Unrealized Gain (Loss) Recognized on Securities Held

$ 5 $ 245 $ ( 51 ) $ 49

Net Realized Loss Recognized on Securities Sold — — ( 13 ) —

Net Loss on Equity Securities $ — $ ( 31 ) $ ( 69 ) $ ( 197 )

Net Loss on Securities $ — $ ( 31 ) $ ( 69 ) $ ( 197 )

Net Gain (Loss) on Equity Securities

$ 5 $ 245 $ ( 64 ) $ 49

Net (Loss) Gain on Investment Securities $ ( 11,752 ) $ 245 $ ( 11,821 ) $ 49

During the three and nine months ended September 30, 2025, there were $ 11.8 million gross realized losses on the sale of debt securities as a result of the Company implementing a balance sheet repositioning strategy of its portfolio of available-for-sale securites.

The Company sold $ 117.8 million in market value of its lower-yielding investment securities with an average yield of 2.87 % and purchased $ 117.8 million of higher-yielding securities with an average yield of 5.43 %.

There were no gross unrealized losses on the sale of debt securities during the three and nine months ended September 30, 2024.

Loans and Allowance for Credit Losses

8 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

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

8 unchanged sentences

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

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

(Dollars in thousands)

9 unchanged sentences

$ 1,133,240 $ 1,082,821

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

Total unamortized net deferred loan fees were $ 839,000 and $ 846,000 at September 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.

5 unchanged sentences

Loans classified as loss are considered uncollectible and of such little value that continuance as an asset is not warranted.

The following tables present the Company’s loans by year of origination, loan segmentation and risk indicator summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system as of the dates indicated.

There were no loans in the criticized category of Loss.

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

The following tables present the Company’s loans by year of origination, loan segmentation and risk indicator summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard, Doubtful and Loss within the internal risk rating system as of the dates indicated.

Classified Loans by Origination Year (as of September 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:

June 30, 2025

September 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 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.

Additional interest income that would have been recorded if the loans that were nonaccrual at September 30, 2025 were current was $ 20,000 and $ 101,000 for the three and nine months ended September 30, 2025, respectively, and $ 16,000 and $ 58,000 for the three and nine months ended September 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.

June 30, 2025

September 30, 2025

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

2 unchanged sentences

$ 1,637 $ — $ — $ 1,637

Construction 415 — — 415

Total Nonaccrual Loans

11 unchanged sentences

Total Nonperforming Assets

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

No interest income on nonaccrual loans was recognized during the three and nine months ended September 30, 2025 and September 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 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.

Modifications to Borrowers Experiencing Financial Difficulty

The following table presents the amortized cost of loans to borrowers experiencing financial difficulty by portfolio segment and type of modification during the periods presented:

Three and Nine Months Ended September 30, 2025

Extension Payment

Delay Interest

Reduction Term

Reduction Total % of Portfolio Segment

dollars in thousands

Residential $ — $ — $ — $ 359 $ 359 0.11 %

Construction — 308 — — 308 0.79 %

$ — $ 308 $ — $ 359 $ 667 0.06 %

(1) Excludes loans that were fully paid off or fully charged off by period end

The following table describes the effect of loan modifications made to borrowers experiencing financial difficulty during the periods presented.

Three and Nine Months Ended September 30, 2025

Weighted Average

Term Extension

(in months) Weighted Average

Payment Delay

(in months) Weighted Average

Interest Rate

Residential 86 — 1.50 %

Construction — 6 — %

For the three and nine months ended September 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 $ 453 ,000 and $ 1.2 million at September 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)

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

— — — — ( 42 ) — ( 42 )

9 — — 42 79 — 130

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

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

Provision (Recovery) for Credit Losses - Loans 173 85 145 58 ( 172 ) 47 336

September 30, 2025 $ 2,727 $ 3,489 $ 1,037 $ 2,046 $ 570 $ 277 $ 10,146

Residential Real

3 unchanged sentences

(Dollars in thousands)

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

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

Charge-offs — — — — ( 159 ) — ( 159 )

Recoveries — — — 45 41 — 86

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

(Recovery) Provision for Credit Losses - Loans ( 226 ) 621 ( 51 ) ( 248 ) ( 90 ) 19 25

September 30, 2024 $ 2,618 $ 3,703 $ 693 $ 1,282 $ 923 $ 260 $ 9,479

(Dollars in thousands)

3 unchanged sentences

(Recovery) Provision for Credit Losses - Loans ( 209 ) 405 ( 227 ) 339 ( 75 ) 36 269

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

September 30, 2025 $ 2,727 $ 3,489 $ 1,037 $ 2,046 $ 570 $ 277 $ 10,146

(Dollars in thousands)

3 unchanged sentences

(Recovery) Provision for Credit Losses - Loans ( 524 ) 1,073 54 ( 531 ) ( 188 ) 11 ( 105 )

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

September 30, 2024 $ 2,618 $ 3,703 $ 693 $ 1,282 $ 923 $ 260 $ 9,479

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 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.

As of September 30, 2025, there were $ 6.0 million of loans that required specific valuation allowances of $ 220 ,000.

The composition of loans that required the specific valuation allowances were a non-owner occupied commercial real estate loan for $ 5.1 million with a valuation allowance of $ 53 ,000, a residential real estate loan for $ 558 ,000 with a valuation allowance of $ 37 ,000, and a construction loan for $ 415 ,000 with a valuation allowance of $ 130 ,000 as of September 30, 2025.

As of September 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 March 31, 2025

Provision for Credit Losses - Unfunded Commitments 144

Balance at June 30, 2025

(in thousands) Allowance for Credit Losses

Balance at March 31, 2024 $ 605

Recovery for Credit Losses - Unfunded Commitments ( 77 )

Balance at September 30, 2025 $ 649

(in thousands) Allowance for Credit Losses

Balance at June 30, 2024 $ 557

Recovery for Credit Losses - Unfunded Commitments ( 66 )

Balance at September 30, 2024 $ 491

(in thousands) Allowance for Credit Losses

Balance at December 31, 2024 $ 691

Provision for Credit Losses - Unfunded Commitments 36

Balance at June 30, 2025 $ 727

Recovery for Credit Losses - Unfunded Commitments ( 42 )

Balance at September 30, 2025 $ 649

(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

Recovery for Credit Losses - Unfunded Commitments ( 9 )

Balance at September 30, 2024 $ 491

Derivatives and Hedging Activities

Derivatives Not Designated as Hedging Instruments

Interest Rate Swaps.

The Company enters into interest rate swap agreements to meet the financing and interest rate management needs of qualifying commercial loan customers.

The Company simultaneously enters into interest rate swaps with dealer counterparties, with identical notional amounts and terms.

The net result of the offsetting customer and dealer counterparty swap agreements is that the customer pays a fixed rate of interest and the Company receives a floating rate.

The credit risk associated with derivatives executed with customers is essentially the same as that involved in extending loans and is subject to normal credit policies and monitoring.

Swap derivative transactions with customers are not subject to enforceable master netting arrangements and are generally secured by rights to non-financial collateral, such as real and personal property.

Risk Participation Agreements.

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

4 unchanged sentences

The Company expects the hedge to remain effective during the remaining term of the swap.

The following table depicts the credit value and fair value adjustments recorded related to the notional amount of derivatives outstanding and risk participation agreements with other financial institutions.

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

June 30, 2025 December 31, 2024

(Dollars in Thousands)

The following table depicts the credit value and fair value adjustments recorded related to the notional amount of derivatives outstanding and interest rate swaps and risk participation agreements with other financial institutions.

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

September 30, 2025

Derivative Assets Derivative Liabilities

Notional Amount Fair Value Notional Amount Fair Value

Derivatives Designated as Hedging Instruments

Interest Rate Swap Contracts $ — $ — $ 75,000 $ 830

Total Derivatives Designated as Hedging Instruments — — 75,000 830

Derivatives Not Designated as Hedging Instruments

Interest Rate Swap Contracts - Commercial Loans 10,938 141 10,938 141

Risk Participation Agreements — — 29,508 82

Credit Value Adjustment $ ( 89 ) $ ( 66 )

Notional Amount 28,302 18,158

Total Derivatives Not Designated as Hedging Instruments 10,938 141 40,446 223

Total Derivatives $ 10,938 $ 141 $ 115,446 $ 1,053

December 31, 2024

Derivative Assets Derivative Liabilities

Notional Amount Fair Value Notional Amount Fair Value

Derivatives Designated as Hedging Instruments

Interest rate swaps:

Fair Value Adjustment ( 944 ) ( 801 )

Notional Amount 75,000 75,000

Interest Rate Swap Contracts $ — $ — $ 75,000 $ 801

Total Derivatives Designated as Hedging Instruments — — 75,000 801

Derivatives Not Designated as Hedging Instruments

Interest Rate Swap Contracts - Commercial Loans — — — —

Risk Participation Agreements — — 18,158 66

Total Derivatives Not Designated as Hedging Instruments — — 18,158 66

Total Derivatives $ — $ — $ 93,158 $ 867

Fair Value Disclosure

17 unchanged sentences

These instruments are classified as Level 2.

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

There were no transfers into or out of Level 3 during the nine months ended September 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:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

(Dollars in thousands)

1 unchanged sentence

Government Agencies Level 2

$ 4,177 $ 3,945

Obligations of States and Political Subdivisions Level 2

3 unchanged sentences

55,923 94,957

Collateralized Mortgage Obligations - Non-Agency Level 2 11,155 —

Collateralized Loan Obligations Level 2 107,016 98,779

6 unchanged sentences

Total Securities 272,559 262,153

Derivative Financial Assets

Interest Rate Swaps - Commercial Loans Level 2 $ 141 $ —

Total Assets $ 272,700 $ 262,153

1 unchanged sentence

Interest Rate Swaps Level 2 $ 830 $ 801

Interest Rate Swaps - Commercial Loans Level 2 141 —

Risk Participation Agreements Level 2 82 66

2 unchanged sentences

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

Financial Asset Fair Value Hierarchy June 30,

Financial Asset Fair Value Hierarchy September 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 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 September 30, 2025, the fair value of these loans consisted of loan balances of $ 6.0 million less specific valuation allowances of $ 220 ,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 June 30, 2025 and December 31, 2024, the Company did not have any MSRs that would be required to be remeasured.

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

As of September 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.

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

(Dollars in thousands)

12 unchanged sentences

Mortgage Servicing Rights Level 3 429 723 466 849

Derivative Assets Level 2 141 141 — —

Accrued Interest Receivable

21 unchanged sentences

The following table presents the unused and available credit balances of financial instruments whose contracts represent credit risk at the dates indicated:

September 30,

2025 December 31,

23 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 June 30, 2025 and December 31, 2024.

The Company recorded no liability associated with standby letters of credit as of September 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

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

3 unchanged sentences

Total Lease Expense $ 139 $ 149 $ 403 $ 341

September 30,

2025 December 31,

4 unchanged sentences

Weighted Average Discount Rate 4.24 % 4.18 %

September 30,

(Dollars in thousands)

9 unchanged sentences

Lease Liabilities $ 2,622

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.

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

During the nine months ended September 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 .

2 unchanged sentences

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.

Also during the nine months ended September 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.

4 unchanged sentences

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

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.

At September 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 June 30, 2025 288,647 $ 23.79 5.4

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

Outstanding Options at September 30, 2025 262,315 $ 23.90 5.6

Exercisable Options at September 30, 2025 145,395 $ 24.74 3.9

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

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

Nonvested Options at September 30, 2025 116,920 $ 22.85 7.7

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

4 unchanged sentences

Forfeited ( 310 ) 21.50

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

Nonvested Restricted Stock at September 30, 2025 72,091 $ 25.39 3.1

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 $ 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.

Stock-based compensation expense related to restricted stock awards and stock options was $ 195,000 and $ 215,000 for the three months ended September 30, 2025 and 2024.

Stock-based compensation expense was $ 610,000 and $ 591,000 for the nine months ended September 30, 2025 and 2024.

As of September 30, 2025 and December 31, 2024, total unrecognized compensation expense was $ 443,000 and $ 701 ,000, respectively, related to stock options, and $ 1.5 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 September 30, 2025 and December 31, 2024 exceeds the exercise price of the stock options.

The intrinsic value of stock options was $ 2.4 million and $ 1.9 million at September 30, 2025 and December 31, 2024, respectively.

At September 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 September 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:

June 30, 2025 December 31, 2024

September 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 June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

5 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