What changed in this filing

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Item 9A. Controls and Procedures

2026-03-13 compared with 2025-03-19 · 354 added, 364 removed, 1383 unchanged (34% of the section changed)

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Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2025.

disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.

The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures.

(1) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (2) is accumulated and communicated to our management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosures.

Based upon their evaluation, the principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective for the purpose of ensuring that the information required to be disclosed in the reports that the Company files or submits under the Exchange Act with the SEC (1) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (2) is accumulated and communicated to our management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosures.

(b) Internal Control Over Financial Reporting

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PRINCIPAL ACCOUNTANT FEES AND SERVICES

Our independent registered public accounting firm for 2024 is FORVIS, LLP , Pittsburgh, Pennsylvania , Auditor Firm ID 686 .

Our independent registered public accounting firm for 2025 is Forvis Mazars, LLP , Pittsburgh, Pennsylvania , Auditor Firm ID 686 .

Information required by this item is incorporated by reference in the Proxy Statement for the 2026 Annual Meeting.

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and Community Bank (15)

21 Subsidiaries

19 Registrant’s Policy Regarding Insider Trading

21 S ubsidiaries

23.1 Consent of Forvis Mazars, LLP

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32.1 Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

CB Financial Services, Inc., Clawback Policy

CB Financial Services, Inc., Clawback Polic y (1 7 )

101.0 The following materials for the year ended December 31, 2025, formatted in XBRL (Extensible Business Reporting Language):

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(16) Incorporated herein by reference to Appendix A to the Company’s Definitive Proxy Statement, filed on April 5, 2024.

(17) Incorporated by herein by reference to Exhibit 97 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed on March 19, 2025.

FORM 10-K SUMMARY

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Montgomery Amanda L.

President and Chief Executive Officer and Senior Vice President and Chief Financial Officer

Director (Principal Financial Officer)

President and Chief Executive Officer and Executive Vice President and Chief Financial Officer

Director (Principal Financial and Accounting Officer)

March 13, 2026 Date:

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To the Shareholders, Board of Directors, and Audit Committee

CB Financials Services, Inc.

CB Financial Services, Inc.

Carmichaels, Pennsylvania

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statement of financial condition of CB Financial Services, Inc.

(the "Company") as of December 31, 2024 and 2023, and the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Change in Accounting Principle

As discussed in Note 1 and Note 4 to the consolidated financial statements, in 2023, the Company changed its method of accounting for credit losses on financial instruments due to the adoption of Accounting Standards Codification Topic 326:

Financial Instruments – Credit Losses .

We have audited the accompanying consolidated statements of financial condition of CB Financial Services, Inc.

(the "Company") as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

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Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

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Allowance for Credit Losses (ACL) – Qualitative Adjustments

As described in Notes 1 and 4 to the consolidated financial statements and referred to in the change in accounting principle explanatory paragraph above, the Company adopted ASC 326 as of January 1, 2023, which among other things, required the Company to recognize expected credit losses over the contractual lives of financial assets carried at amortized costs, including loans receivables, utilizing the Current Expected Credit Losses (“CECL”) methodology.

As of December 31, 2024, the allowance for credit losses (ACL) balance was $9,805,000.

As presented in Note 4 to the consolidated financial statements the allowance for credit losses (ACL) balance was $10,116,000 at December 31, 2025.

As described in Note 1 to the financial statements, the ACL is an estimate of current expected credit losses in the loan portfolio.

The determination of the ACL requires significant judgment reflecting the Company’s estimate of expected future losses for the loan’s entire contractual term adjusted for expected payments when appropriate.

Estimates of expected credit losses are based on relevant information about current conditions, past events, and reasonable and supportable forward-looking forecasts regarding collectability of the reported amounts.

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Due to the Company's loss history not being sufficient and relevant enough to predict future losses, the Company also utilized peer data from a peer group.

The loss rates are then adjusted, for

reasonable and supportable forecasts of relevant economic indicators as well as other environmental factors based on the risks present for each portfolio segment.

The loss rates are then adjusted, for reasonable and supportable forecasts of relevant economic indicators as well as other environmental factors based on the risks present for each portfolio segment.

The environmental factors (“qualitative adjustments”) include consideration of economic conditions and portfolio trends.

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and our audit procedures related to the qualitative adjustments involved a high degree of auditor judgment and required significant audit effort, including the need to involve more experienced audit personnel.

How the Critical Audit Matter Was Addressed in the Audit

The primary procedures we performed to address this critical audit matter included:

• Substantively testing management's determination of the qualitative adjustments used in the ACL estimate, including:

◦ Testing management’s process for developing the qualitative adjustments, which included assessing the relevance and reliability of data used to develop the qualitative adjustments, including evaluating their judgments and assumptions for reasonableness.

◦ Evaluated management’s process for developing the qualitative adjustments, which included assessing the relevance and reliability of data used to develop the qualitative adjustments, including evaluating their judgments and assumptions for reasonableness.

Among other procedures, our evaluation considered evidence from internal and external sources.

◦ Analytically evaluating the qualitative adjustments for directional consistency, testing for reasonableness, and obtaining evidence for significant changes.

◦ Testing the mathematical accuracy of the qualitative adjustments applied to the loan segments in the ACL calculation.

◦ Evaluated the mathematical accuracy of the qualitative adjustments applied to the loan segments in the ACL calculation.

We have served as the Company’s auditor since 2021.

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Goodwill 9,732 9,732

Intangible Assets, Net — 958

Accrued Interest Receivable and Other Assets 29,771 31,469

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NET INTEREST AND DIVIDEND INCOME 50,775 46,068

Provision (Recovery) For Credit Losses - Loans 379 ( 284 )

Provision (Recovery) For Credit Losses - Unfunded Commitments 191 ( 218 )

NET INTEREST AND DIVIDEND INCOME AFTER NET PROVISION (RECOVERY) FOR CREDIT LOSSES 45,498 45,055

Provision for Credit Losses - Loans 534 379

Provision for Credit Losses - Unfunded Commitments 55 191

NET INTEREST AND DIVIDEND INCOME AFTER NET PROVISION FOR CREDIT LOSSES 50,186 45,498

NONINTEREST INCOME

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Other Commissions 252 251

Net Gain on Sales of Loans 52 —

Net Gain (Loss) on Securities 51 ( 10,199 )

Net Gain on Sale of Loans 105 52

Net (Loss) Gain on Investment Securities ( 11,807 ) 51

Net Gain on Purchased Tax Credits 14 49

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Other Income 1,379 1,484

TOTAL NONINTEREST INCOME 5,494 24,012

TOTAL NONINTEREST INCOME (LOSS) ( 7,230 ) 5,494

NONINTEREST EXPENSE

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Advertising 566 484

Other Real Estate Owned (Income) 50 ( 115 )

Other Real Estate Owned 65 50

Amortization of Intangible Assets — 958

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Net Income $ 4,903 $ 12,594

Other Comprehensive (Loss) Income:

Other Comprehensive Income (Loss)

Change in Unrealized (Loss) Gain on Available-for-Sale Debt Securities 5,809 ( 555 )

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Income Tax Effect (2)

Other Comprehensive (Loss) Income, Net of Income Tax Effect ( 488 ) 9,494

Other Comprehensive Income (Loss), Net of Income Tax Effect

13,823 ( 488 )

Total Comprehensive Income $ 18,726 $ 12,106

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

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

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

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Comprehensive

Income (Loss) Total

(Dollars in Thousands, Except Per Share and Share Data)

December 31, 2023 5,759,378 $ 2,400 $ 85,334 $ 83,392 $ ( 14,545 ) $ ( 16,747 ) $ 139,834

Adoption of Accounting Standard ASU 2016-13 — — — 2,092 — — 2,092

Balance at January 1, 2023, adjusted 5,708,433 $ 2,379 $ 83,953 $ 65,953 $ ( 13,797 ) $ ( 26,241 ) $ 112,247

Net Income — — — 12,594 — — 12,594

Other Comprehensive Income — — — — — 9,494 9,494

Other Comprehensive Loss — — — — — ( 488 ) ( 488 )

Restricted Stock Awards Forfeited ( 6,450 ) ( 3 ) 21 — ( 18 ) — —

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Net Income — — — 4,903 — — 4,903

Other Comprehensive Loss — — — — — ( 488 ) ( 488 )

Other Comprehensive Income — — — — — 13,823 13,823

Restricted Stock Awards Forfeited ( 200 ) — 2 — ( 2 ) — —

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Adjustments to Reconcile Net Income to Net Cash Provided By Operating Activities:

Net Amortization on Securities ( 694 ) 30

Net Accretion on Securities ( 373 ) ( 694 )

Depreciation and Amortization 1,810 2,425

Provision (Recovery) for Credit Losses - Loans 379 ( 284 )

Provision (Recovery)\ for Credit Losses - Unfunded Commitments 191 ( 218 )

(Gain) Loss on Securities ( 51 ) 10,199

Provision for Credit Losses - Loans 534 379

Provision for Credit Losses - Unfunded Commitments 55 191

Net Loss on Sale of Debt Securities 11,757 —

Net Loss on Equity Securities 13 —

Net Unrealized Loss (Gain) Recognized on Equity Securities 37 ( 51 )

Gain on Sale of Subsidiary — ( 138 )

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Originations of Mortgage Loans for Sale ( 4,880 ) ( 5,828 )

Gain on Sales of Loans ( 52 ) —

Net Gain on Sale of Loans ( 105 ) ( 52 )

Loss (Gain) on Sales of Other Real Estate Owned 51 54

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Increase in Accrued Interest Receivable ( 788 ) ( 500 )

Valuation Adjustment on Real Estate Owned

Gain on Disposal of Premises and Equipment ( 274 ) ( 11 )

Increase in Deferred Income Tax 191 382

(Decrease) Increase in Taxes Payable ( 3,903 ) 3,985

Decrease in Accrued Interest Payable 682 1,459

Net Gain on Disposal of Premises and Equipment ( 40 ) ( 274 )

(Benefit) Provision in Deferred Income Tax ( 65 ) 191

Decrease in Taxes Payable ( 2,034 ) ( 3,903 )

(Decrease) Increase in Accrued Interest Payable ( 475 ) 682

Other, Net 1,747 ( 2,560 )

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Purchases of Securities ( 169,140 ) ( 70,224 )

Proceeds from Sales of Securities — 69,285

Net Decrease (Increase) in Loans 17,583 ( 63,517 )

Proceeds from Sales of Debt Securities 117,833 —

Proceeds from Sale of Equity Securities 1,680 —

Net (Increase) Decrease in Loans ( 69,611 ) 17,583

Purchase of Premises and Equipment ( 650 ) ( 3,315 )

Proceeds from Disposal of Premises and Equipment 41 988

Proceeds from Sale of Subsidiary — 26,924

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

Investment in Low Income Housing Tax Credit ( 957 ) —

Proceeds From Sales of Other Real Estate Owned 107 258

Decrease (Increase) in Restricted Equity Securities 291 ( 596 )

Purchase of Restricted Equity Securities ( 8,083 ) —

Redemption of Restricted Equity Securities 8,152 291

Net Cash Used in Investing Activities ( 82,611 ) ( 36,385 )

FINANCING ACTIVITIES

Net Increase (Decrease) in Deposits 16,358 ( 1,344 )

Decrease in Short-Term Borrowings — ( 8,060 )

Net Increase in Deposits 56,288 16,358

Principal Payments on Other Borrowed Funds ( 20,000 ) —

Proceeds from Other Borrowed Funds 20,000 —

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$ 25,639 $ 29,381

Income Taxes 6,340 2,885

Federal Income Taxes 300 4,050

State Income Taxes 1 2,290

Income Taxes Paid (Net of Refunds) exceeding 5% of Total Income Taxes Paid (Net of Refunds) in the following Jurisdictions:

Pennsylvania * 2,290

* Jurisdiction below the threshold for the period presented

SUPPLEMENTAL NONCASH DISCLOSURE:

Real Estate Acquired in Settlement of Loans $ 150 $ 410

Transfer of Loans from Loans Held for Sale to Portfolio $ 404 $ —

Other Real Estate Acquired in Settlement of Loans 158 150

Right of Use ("ROU") Asset Recognized — 1,419

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Principles of Consolidation and Basis of Presentation

The accompanying consolidated financial statements include the accounts of CB Financial Services, Inc., and its wholly owned subsidiary, Community Bank (the “Bank”), and the Bank’s wholly owned subsidiary, Exchange Underwriters, Inc.

The accompanying consolidated financial statements include the accounts of CB Financial Services, Inc.

("CB Financial"), and its wholly owned subsidiary, Community Bank (the “Bank”), and the Bank’s wholly owned subsidiary, Exchange Underwriters, Inc.

(“Exchange Underwriters” or “EU”).

CB Financial Services, Inc., Community Bank and Exchange Underwriters, Inc.

are collectively referred to as the “Company.” All intercompany transactions and balances have been eliminated in consolidation.

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.

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, 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.

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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, the Company recognized an earn-out payment of $ 759,000 .

The Company has evaluated events and transactions occurring subsequent to the balance sheet date of December 31, 2025 through the date the consolidated financial statements are being issued for items that should potentially be recognized or disclosed in these consolidated financial statements.

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Because performance obligations are satisfied as services are rendered and the transaction prices are fixed, there is little judgment involved in applying Accounting Standards Codification ("ASC") Topic 606 that significantly affects the determination of the amount and timing of revenue from contracts with customers.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company’s revenue from contracts with customers within the scope of ASC Topic 606 is recognized within Noninterest Income with the exception of Other Real Estate Owned (“OREO”) Income, which is accounted for in Noninterest Expense.

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Overdraft fees are recognized as the overdrafts on customer’s accounts are incurred.

The services fees are

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

automatically withdrawn from the customer’s account balance per their account agreement with the Company.

The services fees are automatically withdrawn from the customer’s account balance per their account agreement with the Company.

In addition, the Company earns interchange fees from debit/credit cardholder transactions conducted through the applicable payment networks.

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The Company currently does not offer a cardholder rewards program.

Insurance Commissions :

EU derived commission and fee income from direct and agency bill insurance policies.

Direct bill policies were invoiced directly from the insurance company provider to the customer.

Once the customer remitted payment for the policy, the insurance company provider then remitted the commission or fee income to EU on a monthly basis.

Agency bill policies were invoiced from EU, the insurance underwriting agency, to the customer.

EU recorded the insurance company policy payable and the commission or fee income earned on the policy.

As all insurance policies were contracts with customers, each policy had different terms and conditions.

EU utilized a report from their core insurance data processing program that captured all in-force policies that were active in the system and annualized the commission over the life of each individual contract.

The report provided an overall commission and fee income total for the monthly reporting financial statement period.

This income was then compared to the amount of direct and agency bill income recorded in the core insurance data processing system for the reporting month and an adjustment to income was made according to the report.

This was the income recognized for the portion of the insurance contract that had been earned by EU and subsequently the Company.

Other Commissions :

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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 December 31, 2024, the Company had one reportable segment, community banking services.

Prior to 2024, the Company had two reportable segments, consisting of community banking services and insurance brokerage services.

Prior to 2024, segment reporting information related to EU (Insurance Brokerage Services segment) was required to be presented because the segment had adopted a board of directors that conducted board meetings independent from the Company.

In addition, the segment comprised a significant amount to total noninterest income, even though the segment's revenue was less than 10% of the combined revenues of all operating segments, the segment's profit was less than 10% of the reported profit of all operating segments and the segment's assets were less than 10% of the combined assets of the Company.

Following the sale of EU on December 8, 2023, the Company determined that the insurance brokerage services segment was no longer reportable.

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

See Note 21 - Segment Reporting and Related Information for more information.

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However, as announced on March 15, 2020, the Federal Reserve Board reduced reserve requirement ratios to zero percent, effective March 26, 2020, in light of the shift to an ample reserves regime.

This action eliminates the need to maintain balances in accounts at the Federal Reserve Bank to satisfy reserve

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

requirements, thereby freeing up liquidity in the banking system to support lending.

This action eliminates the need to maintain balances in accounts at the Federal Reserve Bank to satisfy reserve requirements, thereby freeing up liquidity in the banking system to support lending.

Therefore, at December 31, 2025, and 2024, there were no reserve requirements with the Federal Reserve Bank.

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Unrealized holding gains and losses for available-for-sale debt securities are reported as a separate component of stockholders’ equity, net of tax, until realized.

Equity securities are measured at fair value with the change in fair value recognized in Net Gain (Loss) on Securities within the noninterest income category in the Consolidated Statements of Income.

Equity securities are measured at fair value with the change in fair value recognized in Net Gain (Loss) on Investment Securities within the noninterest income category in the Consolidated Statements of Income.

Realized securities gains and losses, if any, are computed using the specific identification method.

Interest and dividends on securities are recognized as income when earned.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For available-for-sale securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis.

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The consumer segment consists primarily of indirect auto loans as well as personal installment loans and personal or overdraft lines of credit.

Other loan primarily consist of municipal loans to local governments.

Other loans primarily consist of municipal loans to local governments.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Residential mortgage loans are typically longer-term loans and, therefore, generally present greater interest rate risk than the consumer and commercial loans.

Under certain economic conditions, housing values may decline, which may increase the risk that the collateral values are not sufficient.

Commercial real estate loans generally present a higher level of risk than loans

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

secured by residences.

Commercial real estate loans generally present a higher level of 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.

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Construction loan risks include overfunding in comparison to the plans, untimely completion of work, and leasing and stabilization after project completion.

Commercial and industrial loans are generally secured by business assets, inventories, accounts receivable, etc., which present collateral risk.

Commercial and industrial loans are generally secured by business assets, inventories, and accounts receivable, which present collateral risk.

Consumer loans generally have higher interest rates and shorter terms than residential mortgage loans;

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For performing loans acquired in a merger, the excess of expected cash flows over the estimated fair value, at acquisition, is referred to as the accretable discount and is recognized into interest income over the remaining life of the loan.

The difference between contractually required payments at acquisition and the cash flows expected to be collected at acquisition is referred to as the nonaccretable discount.

The nonaccretable discount represents estimated future credit losses expected to be incurred over the life of the loan.

Subsequent decreases to the expected cash flows require an evaluation to determine the need for an allowance.

Subsequent improvements in expected cash flows result in the reversal of a corresponding amount of the nonaccretable discount, which is then reclassified as accretable discount that is recognized into interest income over the remaining life of the loan using the interest method.

The evaluation of the amount of future cash flows that is expected to be collected is performed in a similar manner as that used to determine our allowance.

Charge-offs of the principal amount on acquired loans would be first applied to the nonaccretable discount portion of the fair value adjustment.

For performing loans acquired in a merger that have experienced more‑than‑insignificant deterioration in credit quality since origination (“purchased credit‑deteriorated” or “PCD” loans), the Company records the loans at fair value at acquisition and establishes an allowance for credit losses through a gross‑up of the loan’s amortized cost basis.

As a result, the initial allowance for credit losses is recorded without a corresponding provision for credit losses at the acquisition date.

The amortized cost basis of PCD loans includes the purchase price plus the allowance for credit losses at acquisition.

The difference between the amortized cost basis and the unpaid principal balance represents a discount or premium, which is accreted or amortized into interest income over the remaining contractual life of the loan using the effective interest method.

Subsequent changes in expected credit losses are recognized through the provision for credit losses.

Changes in expected cash flows that are not related to credit are recognized prospectively as adjustments to yield.

The evaluation of expected future cash flows is performed using methodologies consistent with those applied in determining the allowance for credit losses.

Charge‑offs of principal on acquired loans are applied against the allowance for credit losses.

Loan origination and commitment fees as well as certain direct loan origination costs are deferred and the net amount either accreted or amortized as an adjustment to the related loan’s yield over the contractual lives of the related loans.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Allowance for Credit Losses (ACL)

On January 1, 2023, the Company adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss methodology ("CECL").

The Company adopted ASU 2016-13 using a modified retrospective approach.

Results for reporting periods beginning after January 1, 2023 are presented under Topic 326, while prior period amounts continue to be reported in accordance with previously applicable GAAP.

The adoption resulted in a decrease of $ 3.4 million to the Company’s ACL related to loans receivable (ACL - Loans) and an increase of $ 718,000 in ACL for unfunded commitments (ACL - Unfunded Commitments).

The net impact resulted in a $ 2.1 million increase to retained earnings, net of deferred taxes.

The ACL represents the estimated amount considered necessary to cover lifetime expected credit losses inherent in financial assets at the balance sheet date.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 credit.

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 on the Consolidated Statement of Financial Condition.

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When the Company determines that a loan no longer shares similar risk characteristics with other loans in the portfolio, the allowance will be determined on an individual basis using the present value of expected cash flows or, for collateral-dependent loans, the fair value of the collateral as of the reporting date, less estimated selling costs, as applicable.

If the fair value of the collateral is less than the amortized cost basis of the loan, the Company will charge off the difference between the fair value of the collateral, less estimated costs to sell at the reporting date, and the amortized cost basis of the loan.

Impaired loans that are collateral dependent are written down to fair value through the establishment of specific reserves.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

ACL on Off-Balance Sheet Commitments

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As noted above, the ACL on unfunded loan commitments is included in other liabilities on the Consolidated Statement of Financial Condition and the related credit expense is recorded in provision for credit losses - unfunded commitments in the Consolidated Statements of Income.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

ACL on Available-for-Sale Securities

If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income.

For securities available-for-sale that do not meet the above criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors.

In making this assessment, the Company considers the extent to which fair value is less than amortized cost, any changes to the rating by a rating agency, and adverse conditions related to the security, among other factors.

If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security.

If the present value of the cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an ACL is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost.

Any impairment that has not been recorded through an ACL is recognized in other comprehensive income (loss), net of tax.

The Company elected the practical expedient of zero loss estimates for securities issued by U.S.

government entities and agencies.

These securities are either explicitly or implicitly guaranteed by the U.S.

government, are highly rated by major agencies and have a long history of no credit losses.

Changes in the ACL are recorded as provision for, or reversal of, credit loss expense.

Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

Accrued Interest Receivable

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 $ 4.4 million at December 31, 2025 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 $ 2.0 million, at December 31, 2025 and is excluded from the estimate of credit losses.

Premises and Equipment

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Direct costs incurred in the foreclosure process and subsequent holding costs incurred on such properties are recorded as expenses of current operations.

The Company had no real estate owned at December 31, 2024 and $ 162,000 at December 31, 2023.

The Company had no real estate owned at December 31, 2025 and 2024.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company accounts for income taxes in accordance with income tax accounting guidance in ASC Topic 740, Income Taxes .

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The Company recognizes interest accrued related to unrecognized tax benefits in noninterest income and penalties in noninterest expense.

Goodwill and Intangible Assets

Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired.

Deemed to have an indefinite life and not subject to amortization, goodwill is instead tested for impairment at the reporting unit level at least annually on October 31 or more frequently if triggering events occur or impairment indicators exist.

The Company operates two segments – Community Banking segment and Insurance Brokerage Services segment.

Deemed to have an indefinite life and not subject to amortization, goodwill is instead tested for impairment at the reporting unit level at least annually or more frequently if triggering events occur or impairment indicators exist.

The Company operates one segment – Community Banking Services.

The Company has assigned 100 % of the goodwill to the Community Banking reporting unit.

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However, if the carrying amount of the reporting unit exceeds its fair value, an impairment loss is recognized based on the excess of the a reporting unit's carrying value over its fair value.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company did no t record any goodwill impairment for the years ended December 31, 2025 and 2024.

Intangible assets represent purchased assets that lack physical substance but can be distinguished from goodwill because of contractual or other legal rights.

Intangible assets that have finite lives, such as core deposit intangibles acquired in mergers, customer relationship intangibles and renewal lists, are amortized over their estimated useful lives and subject to periodic impairment testing at last annually.

The amortization expense represents the estimated decline in value of the underlying asset.

Core deposit intangibles are primarily amortized over 6.5 to 9.3 years on the straight-line method.

Customer renewal lists are amortized over their estimated useful lives of 9.5 years.

We monitor other intangibles for impairment and evaluate carrying amounts, as necessary.

Estimates and assumptions are used in determining the fair value of other intangible assets.

There were no events or changes in circumstances indicating impairment of other intangible assets at December 31, 2024 and 2023.

Future events could cause us to conclude that goodwill or other intangibles have become impaired, which would result in recording an impairment.

Any resulting impairment could have a material adverse impact on the Company’s financial condition and results of operations.

Future events could cause us to conclude that goodwill has become impaired, which would result in recording an impairment charge.

Any resulting impairment charge could have a material adverse impact on the Company’s consolidated financial condition and results of operations.

Refer to Note 6—Goodwill and Intangible Assets for additional details.

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If it is later determined that all or a portion of the temporary impairment no longer exists for a particular tranche, the valuation allowance is reduced.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Derivatives and Hedging Activities

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Credit risk on the RPA is determined after considering the risk rating, probability of default and loss given default of the counterparties.

See Note17 - Derivatives and Hedging Activities for more information.

Treasury Stock

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Basic earnings per share is calculated utilizing the reported net income as the numerator and weighted average shares outstanding as the denominator.

The computation of

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

diluted earnings per share differs in that the denominator is adjusted for the dilutive effects of any options and convertible securities.

The computation of diluted earnings per share differs in that the denominator is adjusted for the dilutive effects of any options and convertible securities.

Treasury shares are not deemed outstanding for earnings per share calculations.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Awards could be granted under the 2021 Plan as incentive and non-statutory stock options, restricted stock awards, restricted stock units or any combination thereof.

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If any award granted under the 2021 Plan expired, terminated, was canceled or was forfeited without being settled or exercised or was settled without the issuance of shares of common stock, shares of Company common stock subject to such award was made available for future grant under the 2021 Plan.

If any shares were surrendered or tendered to pay the exercise price of a stock option, such shares were not again be available for grant under the 2021 Plan.

If any shares were surrendered or tendered to pay the exercise price of a stock option, such shares were not again available for grant under the 2021 Plan.

In addition, shares of common stock withheld in payment for purposes of satisfying tax withholding obligations with respect to an award did not become available for re-issuance under the 2021 Plan.

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The contractual life of stock options is typically 10 years from the date of grant.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Advertising Costs

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An asset group is the unit of accounting for long-lived assets to be held and used, which represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities.

The Company follows ASC 360, Property, Plant and Equipment, which requires three steps to identify, recognize and measure the impairment of a long-lived asset (asset group) to be held and used:

Step 1 – Consider whether Indicators of Impairment are Present.

The following are examples of such events or changes in circumstances.

• A significant decrease in the market price of a long-lived asset (asset group).

• A significant adverse change in the extent or manner in which a long-lived asset (asset group) is being used or in its physical condition.

• A significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset (asset group), including an adverse action or assessment by a regulator.

• An accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset (asset group).

• A current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset (asset group).

• A current expectation that, more likely than not, a long-lived asset (asset group) will be sold or otherwise disposed of significantly before the end of its previously estimated useful life.

The term more likely than not refers to a level of likelihood that is more than 50 percent.

Step 2—Test for Recoverability

If indicators of impairment are present, the Company performs a recoverability test comparing the sum of the estimated undiscounted cash flows attributable to the long-lived asset or asset group in question to the carrying amount of the long-lived asset or asset group.

Step 3—Measurement of an Impairment Loss

If the undiscounted cash flows used in the recoverability test are less than the carrying amount of the long-lived asset (asset group), the Company estimates the fair value of the long-lived asset or asset group and recognizes an impairment loss when the carrying amount of the long-lived asset or asset group exceeds the estimated fair value.

An impairment loss is allocated to the long-lived assets of the group on a pro rata basis using the relative carrying amounts of those assets, except that the loss allocated to an individual long-lived asset of the group must not reduce the carrying amount of that asset below its fair value whenever the fair value is determinable without undue cost and effort.

ASC 360 prohibits the subsequent reversal of an impairment loss for an asset held and used.

Recent Accounting Standards

In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848 that extended the period of time preparers could utilize the reference rate reform relief guidance.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting, as amended.

This ASU provided temporary optional guidance to ease the potential burden in accounting for reference rate reform.

The new guidance provided optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference the London Inter-bank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued.

The elective guidance in the ASU applies to modifications of contract terms that will directly replace, or have the potential to replace, an affected rate with another interest rate index, as well as certain contemporaneous modifications of other contract terms related to the replacement of an affected rate.

The ASU notes that changes in contract terms that are made to effect the reference rate reform transition are considered related to the

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

replacement of a reference rate if they are not the result of a business decision that is separate from or in addition to changes to the terms of a contract to effect that transition.

The optional expedient allowed companies to account for the modification as if it was not substantial (i.e., do not treat as an extinguishment of debt).

To ensure the relief in Topic 848 covered the period of time during which a significant number of modifications may have taken place, ASU 2022-06 deferred the sunset date of Topic 848 from December 31, 2022 to December 31, 2024, after which entities would no longer be permitted to apply the relief in Topic 848.

For all entities, the amendments in ASU 2022-06 were effective upon issuance.

As of December 31, 2024, the Company did not have any instruments tied to the LIBOR reference rate.

The adoption of this guidance did not have a material effect on the Company's consolidated statements of financial statements and results of operations.

In March 2023, the FASB issued ASU 2023-02, Investments - Equity Method and Joint Ventures (Topic 323):

Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method.

This ASU expanded the use of the proportional amortization method of accounting - previously allowed only for investments in low-income housing tax credit structures - to equity investments in other tax credit structures that meet certain criteria.

Common tax credit programs that investors access via tax equity structures and that may now be eligible for application of the proportional amortization method include:

new markets tax credits, historic rehabilitation tax credit programs and renewable energy tax credit programs.

This ASU took effect in reporting periods beginning after December 15, 2023, with early adoption permitted.

The adoption of this ASU on January 1, 2024, did not have a material impact on the Company's consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

This ASU enhances disclosures about significant segment expenses.

The amendments (1) require that a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of profit or loss, (2) require that a public entity disclose, on an annual and interim basis, an amount for other segment items by reportable segment and a description of its composition, (3) require that a public entity provide all annual disclosures about a reportable segment's profit or loss currently required by GAAP in interim period as well, (4) clarify that if the CODM uses more than one measure of a segment's profit or loss in assessing segment performance and deciding how to allocate resources, an entity may report one or more of those additional measures of segment profit, (5) require that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure of segment profit or loss in assessing segment performance and deciding how to allocate resources and (6) require that a public entity that has a single reportable segment provide all the disclosures required by the amendments in the ASU and all existing segment disclosures.

This ASU is effective for public entities for fiscal years beginning after December 15, 2023, and interim periods within the fiscal years beginning after December 15, 2024.

The adoption of the ASU for the annual period of 2024 did not have a material effect on the Company's consolidated statements of financial statements and results of operations.

Refer to Note 21 - Segment Reporting and Related Information for disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

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The ASU also requires that all entities disclose (1) income (loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic or foreign and (2) income tax expense (or benefit) from continuing operations disaggregated by federal (national), state and foreign.

This ASU is effective for public entities for annual period beginning after December 15, 2024.

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

This ASU became effective for public entities for annual periods beginning after December 15, 2024.

The Company adopted this standard effective January 1, 2025 on a retrospective basis for all periods presented.

Adoption impacted the presentation and disclosure of income tax information but did not have a material effect on the Company’s consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (DISE);

this ASU was then superseded by ASU 2025-01, Clarifying the Effective Date , to clarify the effective date for interim reporting.

Collectively, these ASU's require that public entities on an annual and interim basis disclose specific natural expenses contained within each relevant income statement expense caption.

These specified natural expenses are:

purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depreciation, depletion and amortization recognized as part of oil- and gas- producing activities (DD&A).

This ASU is effective for public entities for annual periods beginning after December 15, 2026 and interim reporting periods within annual reporting periods beginning after December 15, 2027.

The Company does not expect the adoption of the ASU to have a material effect on its consolidated financial statements.

In November 2025, the FASB issued ASU 2025-08, Financial Instruments—Credit Losses (Topic 326):Purchased Loans.

The update expands the population of acquired financial assets subject to the gross-up approach in Topic 326 to include acquired seasoned loans without credit deterioration (excluding credit cards).

This ASU is effective for annual periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods with early adoption permitted.

The amendments in this update are to be applied prospectively to loans that are acquired on or after the initial application date.

The Company adopted this update January 1, 2026 and will implement the guidance upon the occurrence of a future acquisition transaction.

In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815):

Hedge Accounting Improvements.

The update clarifies hedge accounting guidance and addresses issues arising from the global reference rate reform initiative.

There are five issues addressed:

1) expanding risks permitted to be aggregated for cash flow hedges to include those having a similar risk exposure;

2) provide cash flow accounting guidance on choose-your-rate debt instruments;

3) expand hedge accounting for forecasted purchases and sales of nonfinancial assets;

4) update guidance on net written options as hedging instruments;

5) refine foreign-currency-denominated debt instrument as hedging instrument and hedged item (dual hedge).

This ASU is effective for annual periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods.

The amendments in this update are to be applied on a prospective basis.

The Company does not expect the adoption of the ASU to have a material effect on its consolidated financial statements.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements.

The update provides a comprehensive list of interim disclosures that are required by GAAP to provide clarity about the current requirements.

The update also includes a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity.

This ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The amendments in this update can be applied prospectively or retrospectively.

The Company does not expect the adoption of the ASU to have a material impact on its consolidated financial statements.

NOTE 2— EARNINGS PER SHARE

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therefore, net income as presented on the Consolidated Statements of Income is used as the numerator.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table sets forth the composition of the weighted-average common shares (denominator) used in the basic and diluted earnings per share computation.

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Diluted 0.92 2.38

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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Available-for-Sale Debt Securities:

Government Agencies $ 4,996 $ — $ ( 1,051 ) $ 3,945

Obligations of States and Political Subdivisions $ 35,227 $ 997 $ — $ 36,224

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Collateralized Mortgage Obligations - Government-Sponsored Enterprises 72,266 576 ( 5,267 ) 67,575

Collateralized Mortgage Obligations - Non-Agency 10,671 1 ( 125 ) 10,547

Collateralized Loan Obligations 101,409 14 ( 205 ) 101,218

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(Dollars in Thousands)

Government Agencies — $ — $ — 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 )

Mortgage-Backed Securities - Government-Sponsored Enterprises — $ — $ — 1 $ 47 $ — 1 $ 47 $ —

Collateralized Mortgage Obligations - Government-Sponsored Enterprises 3 13,357 ( 114 ) 7 18,782 ( 5,153 ) 10 32,139 ( 5,267 )

Collateralized Mortgage Obligations - Non-Agency 3 9,206 ( 125 ) — — — 3 9,206 ( 125 )

Collateralized Loan Obligations 10 68,567 ( 194 ) 2 11,174 ( 11 ) 12 79,741 ( 205 )

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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.

Securities available-for-sale with a fair value of $ 176.2 million and $ 157.3 million at December 31, 2024 and 2023, respectively, are pledged to secure public deposits, short-term borrowings and for other purposes as required or permitted by law.

Securities available-for-sale with a fair value of $ 172.6 million and $ 176.2 million at December 31, 2025 and 2024, respectively, are 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.

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

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

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

Year Ended December 31, 2025 2024

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Debt Securities

Gross Realized Gain $ 423 $ —

Gross Realized Loss ( 12,180 ) —

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Equity Securities

Net Unrealized Gain (Loss) Recognized on Securities Held $ 51 $ ( 110 )

Net Gain (Loss) on Equity Securities $ 51 $ ( 110 )

Net Gain (Loss) on Securities $ 51 $ ( 10,199 )

Net Unrealized (Loss) Gain Recognized on Securities Held $ ( 37 ) $ 51

Net Realized Loss Recognized on Securities Sold ( 13 ) —

Net (Loss) Gain on Equity Securities $ ( 50 ) $ 51

Net (Loss) Gain on Investment Securities $ ( 11,807 ) $ 51

In 2025, there were $ 11.8 million net 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 securities.

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 expected yield of 5.43 %.

In 2024, there were no gross realized losses on the sale of debt securities.

In 2023, there were $ 10.1 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 securities.

The Company sold $ 69.3 million in market value of its lower-yielding U.S government agency, mortgage-backed and municipal securities with an average yield of 1.89 % and purchased $ 69.3 million of higher-yielding mortgage-backed and collateralized mortgage obligation securities with an average yield of 5.49 %.

NOTE 4— LOANS AND RELATED ALLOWANCE FOR CREDIT LOSSES

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however, they have additional credit risk due to the type of collateral securing the loan.

The following table summarizes the major classifications of loans as of the dates indicated:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the major classifications of loans as of the dates indicated:

December 31, 2025 2024

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Loans, Net $ 1,152,144 $ 1,082,821

Total unamortized net deferred loan fees were $ 846,000 and $ 1.0 million at December 31, 2024 and 2023, respectively.

Total unamortized net deferred loan fees were $ 830,000 and $ 846,000 at December 31, 2025 and 2024, respectively, are included in the table above.

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

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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.

The Company did not have an loans classified as Doubtful or Loss as of the dates indicated.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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Substandard — — 2,139 — — 592 — 2,731

Doubtful — — — — — — — —

Loss — — — — — — — —

Total 19,106 15,378 31,429 44,627 38,637 156,978 23,082 329,237

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Substandard — 1,962 — — — 95 — 2,057

Doubtful — — — — — — — —

Loss — — — — — — — —

Total 99,359 77,144 55,898 69,488 81,953 166,212 2,126 552,180

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Substandard — — 754 — — — — 754

Doubtful — — — — — — — —

Loss — — — — — — — —

Total 11,170 12,220 7,561 7,446 — 7,022 — 45,419

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Substandard — — — — — — — —

Doubtful — — — — — — — —

Loss — — — — — — — —

Total 41,919 22,270 20,315 6,442 2,670 10,345 57,120 161,081

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Substandard — — — — 25 82 — 107

Doubtful — — — — — — — —

Loss — — — — — — — —

Total 688 411 5,635 17,322 7,072 3,311 8,437 42,876

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Substandard — — — — — — — —

Doubtful — — — — — — — —

Loss — — — — — — — —

Total 103 120 3,837 21,837 — 4,452 1,118 31,467

Total Loans $ 172,345 $ 127,543 $ 124,675 $ 167,162 $ 130,332 $ 348,320 $ 91,883 $ 1,162,260

Gross Charge Offs $ — $ 46 $ 329 $ 57 $ 54 $ 52 $ 114 $ 652

Residential $ 25 $ — $ — $ — $ — $ — $ — $ 25

Commercial — — — 19 — — — 19

Construction — — — — — — — —

Total Real Estate 25 — — 19 — — — 44

Commercial & Industrial 218 — — — — 5 — 223

Consumer — 4 19 95 23 97 64 302

Other — — — — — — — —

Total Gross Charge Offs $ 243 $ 4 $ 19 $ 114 $ 23 $ 102 $ 64 $ 569

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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Substandard — — 50 — — 1,337 — 1,387

Doubtful — — — — — — — —

Loss — — — — — — — —

Total 16,932 34,311 49,238 41,652 54,422 123,420 18,015 337,990

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Substandard — — 175 — — 5,079 — 5,254

Doubtful — — — — — — — —

Loss — — — — — — — —

Total 70,357 53,861 69,725 87,074 46,239 155,418 2,839 485,513

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Substandard — — — — — — — —

Doubtful — — — — — — — —

Loss — — — — — — — —

Total 11,987 21,145 14,342 269 6,962 — — 54,705

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Substandard — — — — — — — —

Doubtful — — — — — — — —

Loss — — — — — — — —

Total 33,295 25,263 12,280 5,546 4,374 7,751 23,538 112,047

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Substandard — — — 42 21 150 — 213

Doubtful — — — — — — — —

Loss — — — — — — — —

Total 779 8,980 31,806 15,015 4,830 3,669 5,429 70,508

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Substandard — — — — — — — —

Doubtful — — — — — — — —

Loss — — — — — — — —

Total 178 4,039 21,877 27 571 4,553 618 31,863

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$ 2,210 $ 521 $ — $ 2,731

2,057 — — 2,057

Construction 131 284 — 415

Total Nonaccrual Loans

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$ 1,388 $ — $ — $ 1,388

Commercial and Industrial

Total Nonaccrual Loans

$ 1,789 $ — $ — 1,789

Other Real Estate Owned:

Total Other Real Estate Owned —

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Modifications to Borrowers Experiencing Financial Difficulty

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

The following table present the amortized cost of loans to borrowers experiencing financial difficulty by portfolio segment and type of modification at the dates presented:

December 31, 2025

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Delay Interest

Reduction Term

Reduction Total % of Portfolio Segment

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Residential $ — $ — $ — $ 358 $ 358 0.11 %

Commercial 4,746 — — 4,746 0.98 %

Construction — 340 — — 340 0.75 %

Commercial & Industrial — — — — — %

Consumer — — — — — %

Other — — — — — %

$ — $ 340 $ — $ 358 $ 698 0.06 %

December 31, 2024

Extension Payment

Delay Interest

Reduction Total % of Portfolio Segment

dollars in thousands

Commercial $ 4,746 $ — $ — $ 4,746 0.98 %

$ 4,746 $ — $ — $ 4,746 0.43 %

(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:

The following table describes the effect of loan modifications made to borrowers experiencing financial difficulty at the dates presented:

December 31, 2025

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Residential 86 — 1.50 %

Commercial 6 — — %

Construction — 6 — %

Commercial & Industrial — — — %

Consumer — — — %

Other — — — %

No modifications involved forgiveness of principal or interest rate reductions.

There were no commitments to lend additional funds to borrowers experiencing difficulty whose terms have been restructured as of December 31, 2024.

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 $ 1.2 million and $ 907,000 at December 31, 2024 and 2023, respectively.

December 31, 2024

Weighted Average

Term Extension

(in months) Weighted Average

Payment Delay

(in months) Weighted Average

Interest Rate

Commercial 6 — — %

No modifications involved forgiveness of principal.

There were $ 124 ,000 in commitments to lend additional funds to real estate construction borrowers experiencing difficulty whose terms have been restructured as of December 31, 2025 and none as of December 31, 2024.

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 $ 892,000 and $ 1.2 million at December 31, 2025 and 2024, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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December 31, 2025 $ 2,526 $ 3,153 $ 1,205 $ 2,562 $ 450 $ 220 $ 10,116

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Residential Real

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Construction Commercial

Industrial Consumer Other Unallocated Total

Industrial Consumer Other Total

(Dollars in Thousands)

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

Impact of ASC 326 137 ( 3,244 ) 488 ( 1,057 ) 774 120 ( 603 ) ( 3,385 )

Charge-offs ( 28 ) ( 127 ) — ( 12 ) ( 485 ) — ( 652 )

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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.

The Company’s activity in the allowance for credit losses on unfunded commitments for the years ended was as follows:

The Company’s activity in the allowance for credit losses on unfunded commitments for the years indicated was as follows:

(Dollars in Thousands)

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Balance at December 31, 2023 $ 500

Impact of CECL Adoption 718

Recovery for Credit Losses - Unfunded Commitments ( 218 )

Provision for Credit Losses - Unfunded Commitments 191

Balance at December 31, 2024 $ 691

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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 years ended December 31, 2024 and 2023, there were no loans that required a credit loss to be individually assigned.

During the year ended December 31, 2025 and 2024 there were $ 970,000 and $ 5.6 million of loans individually evaluated requiring specific allowance for credit losses of $ 165,000 and $ 398,000 , respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the amortized cost basis of individually evaluated loans for impairment by class of loans as of December 31, 2025.

December 31, 2025

Real Estate Collateral

Amortized Cost Basis

(Dollars in thousands)

Residential $ 2,326

Commercial 2,306

Construction 754

Commercial and Industrial —

Total Loans $ 5,386

The following table presents changes in the accretable discount on the loans acquired at fair value for the dates indicated.

6 unchanged sentences

Balance at December 31, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Certain directors and executive officers of the Company, including family members or companies in which they are principal owners, are loan customers of the Company.

Such loans are made in the normal course of business, and summarized as follows:

In management's opinion, such loans and other extensions of credit were made in the normal course of business and were made on the substantially the same terms (including interest rate and collateral) as those prevailing at the time for comparable transactions with other persons.

Further, in management's opinion, these loans did not involve more than normal risk of collectability or present other unfavorable features.

These loans and other extension of credit are summarized as follows:

(Dollars in Thousands)

3 unchanged sentences

Balance, December 31 $ 18,158 $ 18,297

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5— PREMISES AND EQUIPMENT

11 unchanged sentences

NOTE 6— GOODWILL AND INTANGIBLE ASSETS

The Company's Consolidated Balance Sheets include goodwill of $ 9.7 million as of December 31, 2024 and 2023, respectively, all of which relates to Community Banking segment.

The Company's Consolidated Balance Sheets include goodwill of $ 9.7 million as of December 31, 2025 and 2024, respectively, all of which relates to the Community Banking segment.

Intangible Assets

4 unchanged sentences

Total Intangible Assets $ 11,860 $ ( 11,860 ) $ — $ 11,860 $ ( 11,860 ) $ —

Amortization of intangible assets totaled $ 1.0 million and $ 1.8 million for the years ended December 31, 2024 and 2023, respectively.

Amortization of intangible assets totaled $ 1.0 million for the year ended December 31, 2024.

All intangible assets were fully amortized as of December 31, 2024 and no further amortization expense is expected assuming there are no activities, such as acquisitions, which would result in additional amortizable intangible assets.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7— DEPOSITS

9 unchanged sentences

Total $ 312,453

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The balance in time deposits that meet or exceed the FDIC insurance limit of $250,000 totaled $ 62.8 million and $ 64.7 million as of December 31, 2025 and 2024, respectively.

16 unchanged sentences

Maximum Amount Outstanding at any Month End 36,000 —

Securities Sold Under Agreements to Repurchase:

Average Balance Outstanding During the Period — — % 332 0.60 %

Maximum Amount Outstanding at any Month End — 121

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Bank did no t have any short-term borrowings at December 31, 2025 and 2024.

NOTE 9— OTHER BORROWED FUNDS

10 unchanged sentences

Total $ 20,000 4.08 % $ 20,000 4.92 %

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As an alternative to pledging securities, the FHLB periodically provides standby letters of credit on behalf of the Bank to secure certain public deposits in excess of the level insured by the FDIC.

If the FHLB is required to make payment for a beneficiary’s draw, the payment amount is converted into a collateralized advance to the Bank.

There were no standby letters of credit issued on our behalf by the FHLB to secure public deposits as of December 31, 2024 and $ 18.9 million as of December 31, 2023.

There were no standby letters of credit issued on our behalf by the FHLB to secure public deposits as of December 31, 2025 and 2024.

The Bank maintains a Borrower-In-Custody of Collateral line of credit agreement with the Federal Reserve Bank (“FRB”) for $ 71.2 million that requires monthly certification of collateral, is subject to annual renewal and is secured by $ 86.6 million of commercial and consumer indirect auto loans.

8 unchanged sentences

NOTE 10— INCOME TAXES

Reconciliation of income tax provision for the periods indicated are as follows:

Components of the income tax provision for the periods indicated are as follows:

Year Ended December 31, 2025 2024

(Dollars in Thousands)

Current Expense $ 2,558 $ 7,353

Deferred Expense (Benefit) 191 382

Current Tax Provision:

Federal $ 445 $ 2,505

Total Current Tax Provision $ 462 $ 2,558

Deferred Tax Provision (Benefit):

Federal $ ( 63 ) $ 185

State ( 2 ) 6

Total Deferred Tax Provision (Benefit) $ ( 65 ) $ 191

Total Provision $ 397 $ 2,749

The Company does not have pretax income from continuing foreign operations or foreign tax expense.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10 unchanged sentences

Stock-Based Compensation Expense 113 109

Gas Lease - Deferred Revenue — 4

Accrued Payroll 59 107

12 unchanged sentences

Deferred taxes at December 31, 2025 and 2024, are included in Accrued Interest Receivable and Other Assets in the accompanying Consolidated Statements of Financial Condition.

Income tax payments were $ 300,000 and $ 4.1 million for federal and $ 1,000 and $ 2.3 million for state income taxes for the years ended December 31, 2025 and 2024, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A reconciliation of the federal income tax expense at statutory income tax rates and the actual income tax expense on income before taxes for the periods indicated is as follows:

3 unchanged sentences

State Taxes (Net of Federal Benefit) (1)

Tax-Free Income ( 282 ) ( 1.8 ) ( 262 ) ( 0.9 )

BOLI Income ( 125 ) ( 0.8 ) ( 121 ) ( 0.4 )

Stock Options - ISO 25 0.2 44 0.1

12 0.2 47 0.3

Tax Credits - Low Income Housing ( 150 ) ( 2.8 ) ( 27 ) ( 0.2 )

Nontaxable or Nondeductible Items:

Tax-Exempt Interest Revenue ( 485 ) ( 9.1 ) ( 282 ) ( 1.8 )

Bank-Owned Life Insurance ( 127 ) ( 2.4 ) ( 317 ) ( 2.1 )

Losses from Tax Credit Partnerships ( 59 ) ( 1.1 ) ( 44 ) ( 0.3 )

Nondeductible Interest Expense 86 1.6 30 0.2

Stock Options - ISO Disqualifying Dispositions ( 112 ) ( 2.1 ) ( 18 ) ( 0.1 )

Excess Tax Benefits from Equity Awards ( 79 ) ( 1.5 ) ( 31 ) ( 0.2 )

Other 63 1.1 114 0.7

Proportional Amortization of Tax Credit Investments 135 2.6 55 0.4

Actual Tax Expense and Effective Rate $ 397 7.5 % $ 2,749 17.9 %

(1) State taxes in West Virginia and Pennsylvania comprised the majority (greater than 50%) of the tax effect in this category in 2025 and 2024, respectively

The Company’s federal, Pennsylvania and West Virginia income tax returns are no longer subject to examination by applicable tax authorities for years before 2022.

2 unchanged sentences

There were no interest or penalties accrued at December 31, 2025 and 2024.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11— EMPLOYEE BENEFITS

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The Company maintains a Cash or Deferred Profit-sharing Section 401(k) Plan with contributions matching those by eligible employees for the first 4 % of an employee’s contribution at the rate of $ 0.25 on the dollar.

All employees who are over the age of 18 and completed three months of employment are eligible to participate in the plan.

All employees who are over the age of 18 are eligible to participate in the plan on the first day of the calendar month after the start of employment.

The Company made contributions of $ 239,000 and $ 168,000 for the years ended December 31, 2025 and 2024, respectively, to this plan.

1 unchanged sentence

The Company made contributions of $ 560,000 and $ 461,000 for the “safe harbor” provision and discretionary retirement contribution for the years ended December 31, 2025 and 2024, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Equity Incentive Plan

Details of the restricted stock award and stock option grants under the 2021 Equity Incentive Plan are summarized for the years ended December 31, 2024 and 2023 as follows.

Details of the restricted stock award and stock option grants under the 2024 and 2021 Equity Incentive Plans are summarized for the years ended December 31, 2025 and 2024 as follows.

Number of Restricted Shares Granted 25,235 25,410

10 unchanged sentences

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 $ 812,000 and $ 1.1 million for the years ended December 31, 2024 and 2023, respectively.

As of December 31, 2024 and 2023, total unrecognized compensation expense was $ 701 ,000 and $ 505,000 , respectively, related to stock options, and $ 1.2 million and $ 1.4 million, respectively, related to restricted stock awards for December 31, 2024 and 2023, respectively.

Stock-based compensation expense related to restricted stock awards and stock options was $ 796,000 and $ 812,000 for the years ended December 31, 2025 and 2024, respectively.

As of December 31, 2025 and 2024, total unrecognized compensation expense was $ 397 ,000 and $ 701 ,000, respectively, related to stock options, and $ 1.3 million and $ 1.2 million, respectively, related to restricted stock awards for December 31, 2025 and 2024.

At December 31, 2025, the unrecognized compensation expense related to stock options and restricted stock is expected to be recognized over the weighted average remaining vesting period of 2.44 years.

In conjunction with non-qualified stock options, the Company recognized a tax benefit of $ 27,000 due to exercises of non-qualified stock options for the year ended December 31, 2024, compared to no tax benefit recognized for the year ended December 31, 2023.

In the current year, there were exercises of non-qualified stock options with a tax benefit of $ 29,000 partially offset by tax expense of $ 2,000 .

In conjunction with non-qualified stock options, the Company recognized a tax benefit of $ 25,000 due to exercises of non-qualified stock options for the year ended December 31, 2025, compared to $ 18,000 tax benefit recognized for the year ended December 31, 2024.

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

The intrinsic value of outstanding stock options was $ 1.9 million and $ 335,000 at December 31, 2024 and 2023, respectively.

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

At December 31, 2025, there were 262,265 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 terms of the Plan.

At December 31, 2024, no shares have been granted under the 2024 Plan.

Under the 2021 Plan, there were 25,410 restricted shares and 93,950 options granted in 2024.

Under the 2021 Plan, there were 161,464 or 64,586 shares available at December 31, 2023 to be issued in connection with the exercise of stock options and restricted stock awards or units.

At December 31, 2025, there were 25,235 restricted shares granted under the 2024 Plan.

The 2021 and 2015 Plans 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 2015 or 2021 Plans.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents stock option data for the period indicated:

The following table presents stock option data for the years indicated:

Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual

7 unchanged sentences

Exercisable Options at End of Year 109,874 $ 25.46 4.7 189,774 $ 24.40 3.1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

5 unchanged sentences

Nonvested Options December 31, 2024 186,974 $ 22.90 8.3

Granted 93,950 22.12

Vested ( 41,602 ) 22.89

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13— VARIABLE INTEREST ENTITIES

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The purpose of this investment is not only to assist the Bank in meeting its responsibilities under the Community Reinvestment Act, but also to provide an investment return, primarily through the realization of tax benefits.

The LIHTC partnership is managed by unrelated general partners that have the power to direct the activities which most

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

significantly affect the performance of the partnership.

The LIHTC partnership is managed by unrelated general partners that have the power to direct the activities which most significantly affect the performance of the partnership.

The Company is therefore not the primary beneficiary of the LIHTC partnership and accordingly, does not consolidate this VIE.

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Under this method an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance as a component of income tax expense.

The following table presents other information relating to Community Bank's low income housing tax credit investments:

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

Year Ended December 31,

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NOTE 14— STOCKHOLDERS' EQUITY AND REGULATORY CAPITAL

In April 2022, the Company authorized a program to repurchase up to $ 10.0 million of its outstanding shares of common stock.

Under the program, repurchases may be transacted in the open-market or in negotiated private transactions and are conducted pursuant to a trading plan adopted in accordance with limitations set forth in Rule 10b5-1 of the Securities and Exchange Commission.

The Rule 10b5-1 repurchase plan allows the Company to repurchase its shares during periods when it would normally not be active in the market due to its internal trading blackout period.

Repurchases are made at management’s discretion at prices management considers to be attractive and in the best interests of both the Company and its stockholders, subject to various factors, including but not limited to, the availability of stock, general market conditions, the trading price of the stock, alternative uses for capital, and the Company’s financial performance.

The program expired on May 1, 2023.

In connection with the program, the Company repurchased a total of 74,656 shares of the Company's common stock at an average price of $ 22.38 per share.

On July 22, 2024, the Company announced that the Board had approved a program commencing on July 25, 2024 to repurchase up to 5 %, or 257,095 shares, of the Company's then outstanding common stock.

This repurchase program is set to expire on July 25, 2025.

In connection with the program, as of December 31, 2024, the Company had purchased a total of 23,928 shares of the Company's common stock at an average price of $ 27.47 per share.

On July 22, 2024, the Company announced that the Board had approved a program commencing on July 25, 2024 to repurchase up to 5 % of the Company's then outstanding common stock.

This repurchase program expired on July 25, 2025.

In connection with the program, the Company had purchased a total of 257,145 shares of the Company's common stock at an average price of $ 28.70 per share.

On September 4, 2025, the Company announced that the Board had approved a program commencing on September 4, 2025 to repurchase up to $ 5.0 million of the Company's outstanding common stock.

This repurchase program is set to expire on September 30, 2025.

As of December 31, 2025, there were no share repurchased under this plan.

On January 27, 2026, the Company's Board of Directors declared a cash dividend of $ 0.28 per outstanding share of common stock, which was paid on February 27, 2026.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Bank is subject to various regulatory capital requirements administered by the federal banking agencies.

2 unchanged sentences

The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Under the Regulatory Capital Rules, in order to avoid limitations on capital distributions (including dividend payments and certain discretionary bonus payments to executive officers), a banking organization must hold a capital conservation buffer comprised of common equity Tier I capital above its minimum risk-based capital requirements in an amount greater than 2.5% of total risk-weighted assets.

As of December 31, 2025 and 2024, the Bank was considered "well capitalized" under the regulatory framework for prompt corrective action.

The following table presents the Bank’s regulatory capital amounts and ratios, as well as the minimum amounts and ratios

required to be well capitalized at the dates indicated.

The following table presents the Bank’s regulatory capital amounts and ratios, as well as the minimum amounts and ratios required to be well capitalized at the dates indicated.

December 31, Amount Ratio Amount Ratio

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ROU assets are reported in Accrued Interest Receivable and Other Assets and the related lease liabilities in Accrued Interest Payable and Other Liabilities on the Consolidated Statements of Financial Condition.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following tables present the lease expense, ROU assets, weighted average term, discount rate and maturity analysis of lease liabilities for operating leases for the periods and dates indicated.

4 unchanged sentences

Total Lease Expense $ 547 $ 470

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025 2024

17 unchanged sentences

NOTE 16— MORTGAGE SERVICING RIGHTS

The following table presents MSR activity and net carrying values for the periods indicated.

The following table presents MSR activity and net carrying values for the years indicated.

Servicing Rights Valuation Allowance Net Carrying Value

10 unchanged sentences

Amortization of MSRs and the period change in the valuation allowance are reported in Other Income on the Consolidated Statements of Income.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Real estate loans serviced for others, which are not included in the Consolidated Statements of Financial Condition, totaled $ 64.4 million and $ 69.7 million at December 31, 2025 and 2024, respectively.

1 unchanged sentence

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 we are a participant.

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 we are 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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Derivatives Designated as Hedging Instruments

4 unchanged sentences

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

December 31, 2024 December 31, 2023

(Dollars in Thousands)

December 31, 2025

Derivative Assets Derivative Liabilities

Notional Amount Fair Value Notional Amount Fair Value

Derivatives Designated as Hedging Instruments

Interest Rate Swap Contracts $ — $ — $ 75,000 $ 704

Total Derivatives Designated as Hedging Instruments — — 75,000 704

Derivatives Not Designated as Hedging Instruments

Interest Rate Swap Contracts - Commercial Loans 10,920 103 10,920 103

Risk Participation Agreements — — 30,672 66

Credit Value Adjustment $ ( 66 ) $ ( 94 )

Notional Amount 18,158 9,119

Total Derivatives Not Designated as Hedging Instruments 10,920 103 41,591 169

Total Derivatives $ 10,920 $ 103 $ 116,591 $ 873

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 ( 801 ) ( 1,777 )

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 18— FAIR VALUE DISCLOSURE

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These instruments are classified as Level 2.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

There were no transfers from Level 1 to Level 2 and no transfers into or out of Level 3 during the years ended December 31, 2025 and 2024, respectively.

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, Fair Value Hierarchy 2025 2024

5 unchanged sentences

Collateralized Mortgage Obligations - Government-Sponsored Enterprises Level 2 67,575 94,957

Collateralized Mortgage Obligations - Non-Agency Level 2 10,547 —

Collateralized Loan Obligations Level 2 101,218 98,779

6 unchanged sentences

Total Securities $ 279,895 $ 262,153

Derivative Financial Assets

Interest Rate Swaps - Commercial Loans Level 2 103 —

Total Assets $ 279,998 $ 262,153

1 unchanged sentence

Interest Rate Swaps Level 2 $ 704 $ 801

Interest Rate Swaps - Commercial Loans Level 2 103 —

Risk Participation Agreements Level 2 66 66

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(Dollars in Thousands)

Impaired Loans Individually Assessed Level 3 $ 5,244 Appraisal of Collateral (1)

Collateral-Dependent Loans Individually Assessed Level 3 $ 805 Appraisal of Collateral (1)

Appraisal Adjustments (2)

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(Dollars in Thousands)

OREO Level 3 — Appraisal of Collateral (1)

Collateral-Dependent Loans Individually Assessed Level 3 $ 5,244 Appraisal of Collateral (1)

Appraisal Adjustments (2)

3 unchanged sentences

The range and weighted average of appraisal adjustments and liquidation expense are presented as a percent of the appraisal.

Impaired loans are evaluated and valued at the time the loan is identified as impaired, at the lower of cost or fair value.

Collateral-dependent loans are evaluated and valued at the time the loan is identified as collateral-dependent, at the lower of cost or fair value.

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

At December 31, 2023, the Company did not have any impaired loans that would be required to be remeasured.

At December 31, 2025, the fair value of collateral-dependent loans consists of loan balances of $ 1.0 million less specific valuation allowances of $ 165,000 .

At December 31, 2024, the fair value of collateral-dependent loans consists of loan balances of $ 5.6 million less specific valuation allowances of $ 398,000 .

The fair value of MSRs is determined by calculating the present value of estimated future net servicing cash flows, considering expected mortgage loan prepayment rates, discount rates, servicing costs and other economic factors, which are determined based on current market conditions.

6 unchanged sentences

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.

At December 31, 2024, the Company did not have any OREO that would be required to be remeasured.

At December 31, 2023, OREO measured at fair value less costs to sell had no carrying value, which consisted of the outstanding balance of $ 37,000 less write-downs of $ 37,000 .

At December 31, 2025 and 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.

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Cash and Due From Banks:

Interest-Earning Level 1 $ 39,332 $ 39,332 $ 62,442 $ 62,442

Noninterest-Earning Level 1 10,240 10,240 5,781 5,781

Securities See Above 262,153 262,153 207,095 207,095

Loans, Net Level 3 1,082,821 1,045,104 1,100,689 1,051,722

Restricted Stock Level 2 3,055 3,055 3,345 3,345

Mortgage Servicing Rights Level 3 466 849 540 974

Accrued Interest Receivable Level 2 5,586 5,586 5,086 5,086

Interest-Earning

Level 1 $ 18,374 $ 18,374 $ 39,332 $ 39,332

Noninterest-Earning

Level 1 13,319 13,319 10,240 10,240

See Above 279,895 279,895 262,153 262,153

Loans Held for Sale

Level 2 — — 900 900

Level 3 1,152,144 1,119,213 1,082,821 1,045,104

Restricted Stock

Level 2 2,985 2,985 3,055 3,055

Mortgage Servicing Rights

Level 3 415 700 466 849

Derivative Assets

Level 2 103 103 — —

Accrued Interest Receivable

Level 2 6,374 6,374 5,586 5,586

Financial Liabilities:

Deposits Level 2 1,283,517 1,284,494 1,267,159 1,263,574

Level 2 1,339,805 1,339,286 1,283,517 1,284,494

Other Borrowed Funds

FHLB Borrowings Level 2 20,000 20,004 20,000 19,962

Subordinated Debt Level 2 14,718 14,206 14,678 13,378

Derivative Liabilities Level 2 867 867 1,871 1,871

Accrued Interest Payable Level 2 2,496 2,496 1,814 1,814

FHLB Borrowings

Level 2 20,000 20,109 20,000 20,004

Subordinated Debt

Level 2 14,758 14,452 14,718 14,206

Derivative Liabilities

Level 2 873 873 867 867

Accrued Interest Payable

Level 2 2,021 2,021 2,496 2,496

NOTE 19— OTHER NONINTEREST EXPENSE

5 unchanged sentences

Insurance 271 333

Miscellaneous 332 538

Postage 246 286

Travel 270 230

Printing and Supplies 225 238

Postage 269 246

Loan Expenses 268 202

1 unchanged sentence

Bank Assessment 196 187

Charitable Contributions 155 118

Meals and Entertainment 186 141

Printing and Supplies 176 225

Charitable Contributions 102 155

Training 70 42

Miscellaneous 503 332

TOTAL OTHER NONINTEREST EXPENSE $ 3,553 $ 3,369

22 unchanged sentences

Net Interest and Dividend Income 682 4,596

Net Gain (Loss) on Securities 60 ( 122 )

Net (Loss) Gain on Securities ( 80 ) 60

Noninterest Expense 22 23

12 unchanged sentences

Undistributed Net Income of Subsidiary ( 4,221 ) ( 7,863 )

Amortization of Subordinated Debt Deferred Costs 40 40

Noncash Expense for Stock-Based Compensation 796 812

Loss on Equity Securities ( 60 ) 122

Loss (Gain) on Equity Securities 80 ( 60 )

Other, net 25 ( 45 )

1 unchanged sentence

INVESTING ACTIVITIES

Proceeds from Sales of Equity Securities 1,680 —

NET CASH PROVIDED BY INVESTING ACTIVITIES 1,680 —

FINANCING ACTIVITIES

Net Proceeds from Other Borrowings 40 40

Cash Dividends Paid ( 5,134 ) ( 5,130 )

2 unchanged sentences

NET CASH USED IN FINANCING ACTIVITIES ( 9,363 ) ( 5,374 )

INCREASE (DECREASE) IN CASH AND DUE FROM BANKS 104 ( 216 )

(DECREASE) INCREASE IN CASH AND DUE FROM BANKS ( 6,060 ) 104

CASH AND DUE FROM BANKS AT BEGINNING OF THE YEAR 14,404 14,300

4 unchanged sentences

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

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

At December 31, 2025 and 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.

While the CODM monitors the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Company-wide basis.

The CODM uses net interest income, noninterest income and net income to evaluate income generated from segment assets in deciding whether to reinvest profits into the Company, pursue acquisitions or pay out dividends.

The CODM uses net interest income and net income to evaluate income generated from segment assets in deciding whether to reinvest profits into the Company, pursue acquisitions or pay out dividends.

Net income is used to monitor budget versus actual results.

These metrics and the Company's significant expense categories are disclosed on the Company's Consolidated Statements of Income.

Prior to 2024, the Company managed its operations through two reportable segments, consisting of community banking services and insurance brokerage services.

The insurance brokerage services were offered through the Bank's wholly-owned subsidiary, Exchange Underwriters (EU).

EU was an independent insurance agency that offered property, casualty, commercial liability, surety and other insurance products.

EU had an independent board of directors from the Company and was managed separately from community banking services.

On December 1, 2023, the Company announced that the Bank and EU entered into an Asset Purchase Agreement with World Insurance Associates, LLC ("World") pursuant to which EU sold substantially all of its assets to World for a purchase price of $ 30.5 million cash plus possible additional earn-out payments.

The sale of assets was completed on December 8, 2023 and resulted in an initial pre-tax gain of $ 24.6 million.

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 .

Assets remaining in the EU subsidiary at

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024 consisted primarily of cash received from the sale of assets.

The Bank intends to merge EU into the Bank during 2025.

Following are the results of operations and selected financial information by operating segment for 2023:

Year Ended December 31, 2023

Community Banking Insurance Brokerage Total Eliminations Consolidated Total

Interest Income $ 62,219 $ 6 $ 62,225 $ — $ 62,225

Interest Expense 17,672 — 17,672 — 17,672

Net Interest and Dividend Income 44,547 6 44,553 — 44,553

Recovery for Credit Losses - Loans ( 284 ) — ( 284 ) — ( 284 )

Recovery for Credit Losses - Unfunded Commitments ( 218 ) — ( 218 ) — ( 218 )

Noninterest (Loss) Income ( 6,402 ) 30,414 24,012 — 24,012

Noninterest Expense (1)

Salaries and Employee Benefits 18,776 3,127 21,903 — 21,903

Occupancy 2,839 159 2,998 — 2,998

Equipment 896 168 1,064 — 1,064

Data Processing 3,014 — 3,014 — 3,014

Federal Deposit Insurance Corporation Assessment 754 — 754 — 754

Pennsylvania Shares Tax 889 — 889 — 889

Contracted Services 1,070 96 1,166 — 1,166

Legal and Professional Fees 1,169 13 1,182 — 1,182

Advertising 370 56 426 — 426

Other Real Estate Owned (Income) ( 115 ) — ( 115 ) — ( 115 )

Amortization of Intangible Assets 1,592 174 1,766 — 1,766

Other Expense 3,478 257 3,735 — 3,735

Total Noninterest Expense 34,732 4,050 38,782 — 38,782

Income before Income Taxes $ 3,915 $ 26,370 $ 30,285 $ — $ 30,285

Income Tax Expense 351 7,384 7,735 — 7,735

Net Income $ 3,564 $ 18,986 $ 22,550 $ — $ 22,550

Total Assets $ 1,607,167 $ 28,830 $ 1,635,997 $ ( 179,906 ) $ 1,456,091

(1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.

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-K

Item 9A. Controls and Procedures