What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-08-07 compared with 2026-05-08 · 184 added, 142 removed, 624 unchanged (34% of the section changed)

28 unchanged sentences

Similarly, the use of different estimates or assumptions could produce different provisions for credit losses which would likely result in changes to the Company's net income.

In the three months ended March 31, 2026 the ACL-Loans decreased by $156,000, the ACL-Off-Balance Commitments decreased by $29,000 and the ACL-HTM Securities decreased by $1,000.

In the six months ended June 30, 2026 the ACL-Loans decreased by $810,000, the ACL-Off-Balance Commitments decreased by $12,000 and the ACL-HTM Securities decreased by $3,000.

Further discussion of the ACL may be found in Note 2, "Investment Securities", Note 3, "Loans", and Note 4, "Allowance for Credit Losses", to the consolidated financial statements contained in Item 1 of the Form 10-Q.

7 unchanged sentences

A finding that the Company's methodology for valuation of its investment securities is materially incorrect could result in changes to the carrying value of securities on its balance sheet and corresponding changes in shareholders equity position.

As of March 31, 2026 the fair value of AFS securities decreased by $7.7 million and the fair value of HTM securities decreased by $6.8 million from that of December 31, 2025.

The decrease in the fair value of AFS securities is attributable to a combination of rate-driven market price adjustments for the underlying securities, principal returned via maturity, call, sale, or amortization, and new purchases.

The decrease in the fair value of HTM securities is primarily attributable to rate-driven price adjustments for the underlying securities, along with principal return via call or maturity.

As of June 30, 2026 the fair value of AFS securities increased by $11.6 million and the fair value of HTM securities decreased by $4.3 million from that of December 31, 2025.

The increase in the fair value of AFS securities is attributable to new purchases, and partially offset by a combination of rate-driven market price adjustments for the underlying securities, and principal returned via maturity, call, sale, or amortization.

The decrease in the fair value of HTM securities is attributable to a combination of rate-driven price adjustments for the underlying securities and principal return via call or maturity.

Further discussion of the fair value of securities may be found in Note 2, "Investment Securities", to the consolidated financial statements contained in Item 1 of the Form 10-Q.

36 unchanged sentences

A Federal Income Tax rate of 21.0% was used in 2026 and 2025:

For the three months ended March 31,

For the six months ended June 30, For the quarter ended June 30,

Dollars in thousands

2026 2025 2026 2025

Net interest income as presented $ 41,851 $ 36,208 $ 21,162 $ 18,409

5 unchanged sentences

The following table provides a reconciliation between the GAAP and non-GAAP efficiency ratio:

For the three months ended March 31,

For the six months ended June 30, For the quarter ended June 30,

Dollars in thousands

2026 2025 2026 2025

Non-interest expense, as presented $ 26,993 $ 25,043 $ 13,377 $ 12,199

11 unchanged sentences

The following table provides a reconciliation of average tangible common equity to the Company's consolidated financial statements, which have been prepared in accordance with GAAP:

For the three months ended March 31,

For the six months ended June 30, For the quarter ended June 30,

Dollars in thousands

2026 2025 2026 2025

Average shareholders' equity as presented $ 290,332 $ 260,248 $ 292,085 $ 262,663

3 unchanged sentences

The following table provides a reconciliation to Net Income:

For the three months ended March 31,

For the six months ended June 30, For the quarter ended June 30,

Dollars in thousands 2026 2025 2026 2025

4 unchanged sentences

Executive Summary

Net income for the three months ended March 31, 2026 was $9.0 million, up $1.9 million or 27.1% from the same period in 2025.

Earnings per common share on a fully diluted basis were $0.80 for the three months ended March 31, 2026, up $0.17 or 26.8% from the $0.63 posted for the same period in 2025.

Net income for the six months ended June 30, 2026 was $18.6 million, up $3.4 million or 22.5% from the same period in 2025.

Earnings per common share on a fully diluted basis were $1.65 for the six months ended June 30, 2026, up $0.29 or 22.0% from the $1.35 posted for the same period in 2025.

Dividends totaling $0.75 per share have been declared year-to-date, representing a payout to our shareholders of 44.9% of basic earnings per share for the period.

On a PTPP basis, earnings for the three months ended March 31, 2026 were $11.5 million, up $2.6 million, or 28.7% from the prior year.

Net interest income on a tax-equivalent basis was up $2.8 million or 15.4% in the three months ended March 31, 2026 compared to the same period in 2025.

The tax equivalent net interest margin for the three months ended March 31, 2026, was 2.86%, up from 2.48% for the same period in 2025.

On a PTPP basis, earnings for the six months ended June 30, 2026 were $24.0 million, up $4.7 million, or 24.2% from the prior year.

For the quarter ended June 30, 2026, net income was $9.6 million, up $1.5 million or 18.6% from the same period in 2025.

Earnings per common share on a fully diluted basis were $0.85 for the quarter ended June 30, 2026, up $0.13 or 17.8% from the $0.72 posted for the same period in 2025.

Net interest income on a tax-equivalent basis was up $5.6 million or 14.8% in the six months ended June 30, 2026 compared to the same period in 2025.

The tax equivalent net interest margin for the six months ended June 30, 2026, was 2.87%, up from 2.50% for the same period in 2025.

The period-to-period change in net interest income and net interest

margin is attributable to favorable changes on both sides of the balance sheet as an increase in tax equivalent yield on earning assets was coupled with decrease in the cost of total liabilities.

Non-interest income for the three months ended March 31, 2026 was $4.5 million, up $449,000 or 11.2%, from the three months ended March 31, 2025.

margin is attributable to favorable changes on both sides of the balance sheet.

The tax equivalent yield on earning assets remained stable despite rate cuts by the FOMC, while funding costs fell.

The same factors influenced the quarter ended June 30, 2026, as net interest income on a tax-equivalent basis increased $2.7 million or 14.3% compared to the same three-month period in 2025, and net interest margin improved to 2.88%, up from 2.52% for the same period in 2025.

Non-interest income for the six months ended June 30, 2026 was $9.1 million, up $981,000 or 12.1%, from the six months ended June 30, 2025.

The increase was centered in Wealth Management revenue which was up $381,000 or 14.4% from the prior year, and other operating income which increased $439,000 or 28.6%.

Non-interest expense for the three months ended March 31, 2026 was $13.6 million, up $772,000 or 6.0% from the three months ended March 31, 2025.

Non-interest expense for the six months ended June 30, 2026 was $27.0 million, up $2.0 million or 7.8% from the six months ended June 30, 2025.

The period-to-period change is centered in employee salaries and benefits, resulting from annual salary adjustments, lower deferred salaries, and higher health insurance expenses.

Asset quality continues to be satisfactory.

Non-performing assets stood at 0.51% of total assets as of March 31, 2026, up from 0.41% as of December 31, 2025 and up from 0.19% of total assets as of March 31, 2025.

Total past-due loans were 1.14% of total loans as of March 31, 2026, up from 0.90% and up from 0.33% of total loans as of December 31, 2025 and March 31, 2025, respectively.

The provision for credit losses on loans for the first three months of 2026 was $650,000, up from the $396,000 provisioned in the same period in 2025.

Net charge-offs for the three months ended March 31, 2026 were $806,000 or 0.034% of total loans, compared to net charge-offs of $153,000 or 0.026% as of the three months ended March 31, 2025.

The ACL for loans decreased $156,000 between December 31, 2025 and March 31, 2026, and now stands at 1.05% of loans outstanding as of March 31, 2026, as compared to 1.06% at December 31, 2025 and 1.05% at March 31, 2025.

The Company's balance sheet continued to expand in the first three months of 2026 as total assets increased $34.5 million or 1.1% year-to-date.

The loan portfolio increased $11.0 million or 0.5% in the three months ended March 31, 2026 and $22.0 million or 0.9% from a year ago.

Commercial loans increased by $2.3 million during the period, led by increases in owner-occupied commercial real estate of $4.3 million and commercial & industrial loans of $16.1 million, while non-owner occupied commercial real estate decreased $4.8 million, multifamily decreased $8.5 million, and construction loan balances decreased $4.8 million.

Residential loans increased by $4.0 million and home equity loans increased by $4.9 million in the first three months of 2026.

The investment portfolio has decreased $9.5 million year-to-date and decreased $37.7 million from a year ago based upon cash flow of amortizing securities, limited reinvestment or new purchases, and changes in the carrying value of AFS securities.

On the liability side of the balance sheet, total deposits at March 31, 2026 were $2.66 billion, unchanged from year-end 2025.

Non-performing assets stood at 0.54% of total assets as of June 30, 2026, up slightly from 0.51% as of December 31, 2025 and up from 0.19% of total assets as of June 30, 2025.

Total past-due loans were 0.93% of total loans as of June 30, 2026, up slightly from 0.90% and up from 0.23% of total loans as of December 31, 2025 and June 30, 2025, respectively.

The provision for credit losses on loans for the first six months of 2026 was $1.6 million, up from the $744,000 provisioned in the same period in 2025.

Net charge-offs for the six months ended June 30, 2026 were $2.4 million or 0.20% of total loans, compared to net charge-offs of $786,000 or 0.07% as of the six months ended June 30, 2025.

The ACL for loans decreased $810,000 between December 31, 2025 and June 30, 2026, with $415,000 of the reduction coming from changes in reserve estimates on IALs, and $395,000 from pooled reserve requirements resulting from changes in portfolio composition, economic factors and other quantitative inputs.

The ACL-Loans now stands at 1.01% of loans outstanding as of June 30, 2026, as compared to 1.05% at December 31, 2025 and 1.04% at June 30, 2025.

The Company's balance sheet continued to expand in the first six months of 2026 as total assets increased $49.8 million or 1.6% year-to-date.

The loan portfolio increased $29.6 million or 1.2% in the six months ended June 30, 2026 and has increased $29.7 million from a year ago.

Driving balance changes year-to-date in the commercial loan segments of the portfolio were commercial real estate & construction loans which decreased $14.7 million, commercial & industrial loans which increased $17.2 million, and multifamily loans which decreased $19.1 million.

Elsewhere, residential loans increased by $16.0 million, home equity loans increased by $18.0 million, and municipal loans increased $8.8 million in the first six months of 2026.

The investment portfolio has increased $8.1 million year-to-date and decreased $17.1 million from a year ago based upon cash flow of amortizing securities, measured levels of reinvestment or new purchases, and changes in the carrying value of AFS securities.

On the liability side of the balance sheet, total deposits at June 30, 2026 were $2.68 billion, an increase of $15.0 million from year-end 2025.

Low-cost deposits (Demand, NOW, Savings) decreased $39.7 million year-to-date and money market balances decreased $47.6 million.

Local CDs increased $5.8 million while wholesale CDs decreased $52.7 million year-to-date.

During the same period, borrowings increased by $8.0 million.

These decreases in non-maturity deposits are consistent with historical, seasonal patterns in the first half of the year.

Local CDs decreased $5.2 million while wholesale CDs have increased $107.6 million year-to-date and borrowings increased by $26.2 million, mostly short-term.

Remaining well capitalized is a top priority for the Company.

The Company's total risk-based capital ratio was 14.05% as of March 31, 2026, solidly above the well-capitalized threshold of 10.0% set by the FDIC, the FRBB, and the OCC.

Among the Company's operating ratios, the return on average assets was 1.15% and return on average tangible common equity of 14.15% for the three months ended March 31, 2026 compared to 0.91% and 12.64%, respectively, for the same period in 2025.

The Company's PTPP return of average assets for the three months ended March 31, 2026 was 1.47% compared to 1.15% in the prior year period.

Our non-GAAP efficiency ratio continues to be an important component in the Company's overall performance and stood at 52.64% for the three months ended March 31, 2026 compared to 56.93% for the same period in 2025, the change being attributable primarily to higher levels of net interest income.

The Company's total risk-based capital ratio was 14.23% as of June 30, 2026, solidly above the well-capitalized threshold of 10.0% set by the FDIC, the FRBB, and the OCC.

Among the Company's operating ratios, the return on average assets was 1.18% and return on average tangible common equity of 14.41% for the six months ended June 30, 2026 compared to 0.96% and 13.31%, respectively, for the same period in 2025.

The Company's PTPP return of average assets for the six months ended June 30, 2026 was 1.52% compared to 1.22% in the prior year period.

Our non-GAAP efficiency ratio continues to be an important component in the Company's overall performance and stood at 51.47% for the six months ended June 30, 2026 compared to 54.63% for the same period in 2025, the change being attributable primarily to higher levels of net interest income, complimented by higher non-interest revenue and controlled operating expenses.

Net Interest Income

Total interest income of $39.1 million for the three months ended March 31, 2026 was an increase of $430,000 or 1.1% compared to total interest income of $38.7 million for the same period of 2025.

The increase in interest income is attributable to the loan portfolio resulting from both greater volume and higher average yields as compared to the prior year.

Total interest expense of $18.5 million for the three months ended March 31, 2026, was a decrease of $2.5 million or 11.8% compared to total interest expense for the three months ended March 31, 2025.

Total interest income of $79.0 million for the six months ended June 30, 2026 was an increase of $444,000 or 0.6% compared to total interest income of $78.5 million for the same period of 2025.

Comparing the respective year-to-date periods, the overall average volume of earning assets was essentially unchanged, however balances shifted from lower yielding investments to higher yielding loans, resulting in a 3 basis point lift in average yield on earning assets to 5.34%.

Total interest expense of $37.1 million for the six months ended June 30, 2026, was a decrease of $5.2 million or 12.3% compared to total interest expense for the six months ended June 30, 2025.

Interest expense on deposits fell $5.4 million year-to-date as compared to prior year on lower average funding rates and modestly lower volume.

Borrowed funds expense was up $209,000 compared to the prior year period attributable to higher utilization of short-term FHLB funding.

As a result, net interest income of $20.7 million for the three months ended March 31, 2026 was an increase of $2.9 million or 16.2% compared to net interest income of $17.8 million for the three months ended March 31, 2025.

The Company's net interest margin on a tax-equivalent basis for the three months ended March 31, 2026 was 2.86%, up from 2.48% for the first three months of 2025.

Tax-exempt interest income amounted to $2.5 million for the three months ended March 31, 2026 compared to $2.7 million for the three months ended March 31, 2025.

The following table presents the amount of interest earned or paid, as well as the average yield or rate on an annualized basis, for each major category of assets or liabilities for the three months ended March 31, 2026 and 2025.

The total average cost of interest bearing liabilities was 2.88% for the period, a reduction of 39 basis points.

As a result, net interest income of $41.9 million for the six months ended June 30, 2026 was an increase of $5.6 million or 15.6% compared to net interest income of $36.2 million for the six months ended June 30, 2025.

The Company's net interest margin on a tax-equivalent basis for the six months ended June 30, 2026 was 2.87%, up from 2.50% for the first six months of 2025.

Tax-exempt interest income amounted to $5.0 million for the six months ended June 30, 2026 compared to $5.3 million for the six months ended June 30, 2025.

The following tables present the amount of interest earned or paid, as well as the average yield or rate on an annualized basis, for each major category of assets or liabilities for the six months and quarters ended June 30, 2026 and 2025.

Tax-exempt income is calculated on a tax-equivalent basis, using a 21.0% Federal Income Tax rate:

For the three months ended

March 31, 2026 March 31, 2025

For the six months ended

June 30, 2026 June 30, 2025

Dollars in thousands

4 unchanged sentences

Investments 9,839 3.19 % 10,529 3.25 %

Loans held for sale — 0.00 % — 0.00 %

Loans 70,408 5.89 % 69,307 5.88 %

7 unchanged sentences

Net interest margin 2.87 % 2.50 %

The following table presents changes in interest income and expense attributable to changes in interest rates and volume for interest-earning assets and liabilities for the three months ended March 31, 2026 compared to 2025.

For the quarters ended

June 30, 2026 June 30, 2025

Dollars in thousands

interest Average

Yield/Rate Amount of

interest Average

Interest on earning assets

Interest-bearing deposits $ 38 4.89 % $ 51 4.89 %

Investments 4,950 3.19 % 5,280 3.24 %

Loans held for sale — 0.00 % — 0.00 %

Loans 35,525 5.90 % 35,192 5.91 %

Total interest-earning assets 40,513 5.34 % 40,523 5.34 %

Interest expense

Deposits 16,884 2.82 % 19,725 3.25 %

Other borrowings 1,793 3.47 % 1,691 3.57 %

Total interest expense 18,677 2.88 % 21,416 3.28 %

Net interest income $ 21,836 $ 19,107

Interest rate spread 2.46 % 2.06 %

Net interest margin 2.88 % 2.52 %

The following tables present changes in interest income and expense attributable to changes in interest rates and volume for interest-earning assets and liabilities for the six months and quarters ended June 30, 2026 compared to 2025.

Tax-exempt income is calculated on a tax-equivalent basis, using a 21% Federal Income Tax rate:

For the three months ended March 31, 2026 compared to 2025

For the six months ended June 30, 2026 compared to 2025

Dollars in thousands

3 unchanged sentences

Investment securities (500) (199) 9 (690)

Loans 903 195 3 1,101

Change in interest income 381 (25) 16 372

Interest expense

Deposits (417) (5,045) 54 (5,408)

Other borrowings 251 (39) (3) 209

Change in interest expense (166) (5,084) 51 (5,199)

Change in net interest income $ 547 $ 5,059 $ (35) $ 5,571

1 Represents the change attributable to a combination of change in rate and change in volume.

For the quarter ended June 30, 2026 compared to 2025

Dollars in thousands

Volume Rate Rate/Volume 1

Interest on earning assets

Interest-bearing deposits $ (13) $ — $ — $ (13)

Investment securities (261) (73) 4 (330)

Loans held for sale — — — —

8 unchanged sentences

Average Daily Balance Sheets

The following table shows the Company's average daily balance sheets for the three months ended March 31, 2026 and 2025:

For the three months ended

The following table shows the Company's average daily balance sheets for the six months and quarters end ended June 30, 2026 and 2025:

For the six months ended For the quarters ended

Dollars in thousands

March 31, 2026 March 31, 2025

June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025

Cash and cash equivalents $ 26,356 $ 24,811 $ 28,300 $ 26,042

Interest-bearing deposits in other banks 3,295 4,181 3,119 4,186

Securities available for sale (includes tax exempt securities of $34,714 and $36,342 at March 31, 2026 and 2025, respectively)

Securities available for sale (includes tax exempt securities of $33,711 and $36,329 at June 30, 2026 and 2025, respectively)

260,001 277,300 259,729 277,824

Securities to be held to maturity, net of ACL (included tax exempt securities of $247,029 and $250,855 at March 31, 2026 and 2025, respectively)

Securities to be held to maturity, net of ACL (included tax exempt securities of $245,403 and $250,497 at June 30, 2026 and 2025, respectively)

354,117 368,660 353,166 368,199

33 unchanged sentences

Non-Interest Income

Non-interest income of $4.5 million for the three months ended March 31, 2026 is an increase of $449,000 compared to the same period in 2025.

Non-interest income of $9.1 million for the six months ended June 30, 2026 is an increase of $981,000 compared to the same period in 2025.

The increase was centered in Wealth Management revenue which was up $381,000 or 14.4% from the prior year, and other operating income which increased $439,000 or 28.6%.

Over the same period, service charges on deposit

accounts were up $29,000, or 5.5%, debit card revenue increased $30,000, or 2.6%, and mortgage banking revenue decreased $19,000 or 9.7%.

Over the same period, service charges on deposit accounts were up $75,000, or 7.0%, debit card revenue increased $119,000, or 4.8%, and mortgage banking revenue decreased $45,000 or 10.8%.

Non-interest income of $4.7 million for the quarter ended June 30, 2026 is an increase of $532,000 compared to the same period in 2025.

Non-Interest Expense

Non-interest expense of $13.6 million for the three months ended March 31, 2026 is an increase of 6.0% or $772,000 compared to the same period in 2025.

Salaries and employee benefits increased $480,000, or 7.0%, attributable to annual salary adjustments, lower deferred salaries, and higher health insurance expenses.

Non-interest expense of $27.0 million for the six months ended June 30, 2026 is an increase of 7.8% or $2.0 million compared to the same period in 2025.

Salaries and employee benefits increased $1.3 million, or 10.1%, attributable to annual salary adjustments, lower deferred salaries, and higher health insurance expenses.

Furniture and equipment expense was up $97,000 or 3.3% on higher software costs, and other operating expense increased $711,000 or 12.1%.

Income taxes on operating earnings were $1.9 million for the three months ended March 31, 2026, up $423,000 from the same period in 2025.

The carrying value of the Company's investment portfolio decreased by $9.5 million between December 31, 2025 and March 31, 2026 from $628.7 million to $619.2 million.

The change in value of the portfolio is attributable to lack of like-kind re-investment of incoming cash flow from amortizing investments, limited new purchases and the negative effects of interest rate movement on the fair value of AFS holdings.

As of March 31, 2026, mortgage-backed securities had a carrying value of $253.9 million and a fair value of $245.0 million.

Non-interest expense of $13.4 million for the quarter ended June 30, 2026 is an increase of 9.7% compared to non-interest expense of $12.2 million million for the same period in 2025 due to the reasons mentioned.

Income taxes on operating earnings were $3.9 million for the six months ended June 30, 2026, up $584,000 from the same period in 2025.

The carrying value of the Company's investment portfolio increased by $8.1 million between December 31, 2025 and June 30, 2026 from $628.7 million to $636.8 million.

The change in value of the portfolio is attributable new purchases and the effects of interest rate movements on the fair value of AFS holdings.

As of June 30, 2026, mortgage-backed securities had a carrying value of $270.6 million and a fair value of $261.7 million.

Of this total, securities with a fair value of $60.9 million or 23.3% of the mortgage-backed portfolio were issued by GNMA and securities with a fair value of $200.8 million or 76.7% of the mortgage-backed portfolio were issued by FHLMC and FNMA.

15 unchanged sentences

The amortization of the net unrealized loss reported in AOCI will offset the effect on interest income of the discount for the transferred securities.

The remaining unamortized balance of the net unrealized losses for the securities transferred from AFS to HTM was $35,000 at March 31, 2026.

This compares to $38,000 and $45,000, net of taxes, at December 31, 2025 and March 31, 2025, respectively.

The remaining unamortized balance of the net unrealized losses for the securities transferred from AFS to HTM was $32,000 at June 30, 2026.

This compares to $38,000 and $60,000, net of taxes, at December 31, 2025 and June 30, 2025, respectively.

These securities were transferred as a part of the Company's overall investment and balance sheet strategies.

The following table sets forth the Company's investment securities at their carrying amounts as of March 31, 2026 and 2025 and December 31, 2025:

The following table sets forth the Company's investment securities at their carrying amounts as of June 30, 2026 and 2025 and December 31, 2025:

Dollars in thousands

March 31, 2026 December 31, 2025 March 31, 2025

June 30, 2026 December 31, 2025 June 30, 2025

Securities available for sale

18 unchanged sentences

Holdings of AFS Securities and HTM securities have been evaluated to determine the need to establish an ACL, if any.

The total ACL for HTM securities was $145,000 as of March 31, 2026, $146,000 as of December 31, 2025 and $197,000 March 31, 2025.

The total ACL for HTM securities was $143,000 as of June 30, 2026, $146,000 as of December 31, 2025 and $198,000 as of June 30, 2025.

Further details are included in Note 2 of the accompanying financial statements.

The following table sets forth yields and contractual maturities of the Company's investment securities as of March 31, 2026.

The following table sets forth yields and contractual maturities of the Company's investment securities as of June 30, 2026.

Yields on tax-exempt securities have been computed on a tax-equivalent basis using a tax rate of 21%.

35 unchanged sentences

AFS Debt Securities in an Unrealized Loss Position

The securities portfolio contains certain AFS securities where the amortized cost of which exceeds fair value, which at March 31, 2026 amounted to $41.7 million, or 13.99% of the amortized cost of the total securities portfolio.

The securities portfolio contains certain AFS securities where the amortized cost of which exceeds fair value, which at June 30, 2026 amounted to $41.2 million, or 13.00% of the amortized cost of the total securities portfolio.

At December 31, 2025, this amount was $40.1 million, or 13.19% of the amortized cost of total securities portfolio.

6 unchanged sentences

Estimating future cash flows is a quantitative and qualitative process that incorporates information received from third party sources along with certain internal assumptions and judgments regarding the future performance of the underlying collateral.

As of March 31, 2026, the Company had AFS debt securities in an unrealized loss position with a fair value of $233.3 million and unrealized losses of $41.7 million, as identified in the table below.

AFS Securities in a continuous unrealized loss position for more than twelve months amounted to a fair value of $212.3 million as of March 31, 2026, compared with $226.9 million at December 31, 2025.

As of June 30, 2026, the Company had AFS debt securities in an unrealized loss position with a fair value of $253.7 million and unrealized losses of $41.2 million, as identified in the table below.

AFS Securities in a continuous unrealized loss position for more than twelve months amounted to a fair value of $207.8 million as of June 30, 2026, compared with $226.9 million at December 31, 2025.

The Company has concluded that these securities are fully collectible and that no charge against the allowance is required.

This conclusion was based on the issuer's continued satisfaction of the securities obligations in accordance with their contractual terms and the expectation that the issuer will continue to do so, Management's intent and ability to hold these securities for a period of time sufficient to allow for any anticipated recovery in fair value which may be at maturity, the expectation that the Company will receive 100% of future contractual cash flows, as well as the evaluation of the fundamentals of the issuer's financial condition and other objective evidence.

The following table summarizes AFS debt securities in an unrealized loss position for which an ACL has not been recorded at March 31, 2026:

The following table summarizes AFS debt securities in an unrealized loss position for which an ACL has not been recorded at June 30, 2026:

Less than 12 months 12 months or more Total

11 unchanged sentences

Government-sponsored agencies & enterprises.

As of March 31, 2026, there were $5.1 million of unrealized losses on these securities compared to $5.0 million at December 31, 2025.

As of June 30, 2026, there were $5.1 million of unrealized losses on these securities compared to $5.0 million at December 31, 2025.

All of these securities were credit rated "AAA" or "AA+" by the major credit rating agencies.

5 unchanged sentences

Government-sponsored enterprises.

As of March 31, 2026, there were $30.8 million of unrealized losses on these securities compared with $30.1 million at December 31, 2025.

As of June 30, 2026, there were $31.0 million of unrealized losses on these securities compared with $30.1 million at December 31, 2025.

All of these securities were credit rated "AAA" or "AA+" by the major credit rating agencies.

2 unchanged sentences

Government-sponsored enterprises have minimal credit risk, as these agencies and enterprises play a vital role in the nation's financial markets.

Management believes that the unrealized losses at March 31, 2026 were attributable to changes in current market yields and spreads since the date the underlying securities were purchased, and that 100% of the amounts contractually due will be realized.

Management believes that the unrealized losses at June 30, 2026 were attributable to changes in current market yields and spreads since the date the underlying securities were purchased, and that 100% of the amounts contractually due will be realized.

The Company also has the ability and intent to hold these securities until a recovery of their amortized cost, which may be at maturity.

AFS Obligations of state and political subdivisions.

As of March 31, 2026, there were $5.9 million of unrealized losses on these securities compared to $5.0 million at December 31, 2025.

As of June 30, 2026, there were $5.1 million of unrealized losses on these securities compared to $5.0 million at December 31, 2025.

Municipal securities are supported by the general taxing authority of the municipality or a dedicated revenue stream, and, in the case of school districts, are generally supported by state aid.

At March 31, 2026, all municipal bond issuers were current on contractually obligated interest and principal payments.

The Company attributes the unrealized losses at March 31, 2026 to changes in prevailing market yields and pricing spreads since the date the underlying securities were purchased, combined with general market conditions.

At June 30, 2026, all municipal bond issuers were current on contractually obligated interest and principal payments.

The Company attributes the unrealized losses at June 30, 2026 to changes in prevailing market yields and pricing spreads since the date the underlying securities were purchased, combined with general market conditions.

The Company has the ability and intent to hold these securities until a recovery of their amortized cost, which may be at maturity, and believes that 100% of the amounts contractually due will be realized.

AFS Asset-backed securities.

As of March 31, 2026, there were no unrealized losses on these securities compared with $15,000 at December 31, 2025.

As of June 30, 2026, there were no unrealized losses on these securities compared with $15,000 at December 31, 2025.

These securities consist of U.S.

4 unchanged sentences

The Bank uses the FHLBB for a portion of its wholesale funding needs.

As of March 31, 2026, the Bank's investment in FHLBB stock totaled $7.3 million.

This compares to $7.2 million as of December 31, 2025 and $6.5 million as of March 31, 2025.

As of June 30, 2026, the Bank's investment in FHLBB stock totaled $7.7 million.

This compares to $7.2 million as of December 31, 2025 and $6.7 million as of June 30, 2025.

FHLBB stock is a non-marketable equity security and therefore is reported at cost, subject to adjustments for any observable market transactions on the same or similar instruments of the investee.

No impairment losses have been recorded through March 31, 2026.

No impairment losses have been recorded through June 30, 2026.

The Bank is also a member of the FRBB.

1 unchanged sentence

The Bank uses FRBB for certain correspondent banking services and maintains borrowing capacity at its discount window.

The Bank's investment in FRBB stock totaled $1.0 million at March 31, 2026 and 2025, and December 31, 2025.

The Bank's investment in FRBB stock totaled $1.0 million at June 30, 2026 and 2025, and December 31, 2025.

The Company periodically evaluates its investment in FHLBB and FRBB stock for impairment based on, among other factors, the capital adequacy of the Banks and their overall financial condition.

No impairment losses have been recorded through March 31, 2026.

No impairment losses have been recorded through June 30, 2026.

The Bank will continue to monitor its investment in these restricted equity securities.

1 unchanged sentence

Loans held for sale are carried at the lower of cost or market value.

As of March 31, 2026, the Bank had no loans

held for sale.

This compares to no loans held for sale at December 31, 2025 and March 31, 2025.

As of June 30, 2026, the Bank had $190,000 in loans held for sale.

This compares to no loans held for sale at December 31, 2025 and June 30, 2025.

The Company provides loans to customers within our market area, the State of Maine, with very limited exposures outside of Maine.

Loans are originated primarily via our network of branch offices, along with an online channel for residential mortgage loans.

The loan portfolio increased during the first three months of 2026, with total loans at $2.41 billion at March 31, 2026, up $11.0 million or 0.5% from total loans of $2.39 billion at December 31, 2025.

Residential loans increased by $4.0 million and home equity loans increased by $4.9 million in the first three months of 2026.

The loan portfolio increased during the first six months of 2026, with total loans at $2.42 billion at June 30, 2026, up $29.6 million or 1.2% from total loans of $2.39 billion at December 31, 2025.

Commercial loans decreased by $14.4 million during the period.

Owner-occupied commercial real estate increased $1.3 million and commercial & industrial loans increased $17.2 million, while non-owner occupied commercial real estate decreased $10.0 million, multifamily decreased $19.1 million, and construction loan balances decreased $6.0 million.

Residential loans increased by $16.0 million and home equity loans increased by $18.0 million in the first six months of 2026.

The loan portfolio is segmented into eleven classes.

5 unchanged sentences

Further descriptions of each class, and the risk factors associated with each, are included in Note 4 of the accompanying financial statements.

The following table summarizes the loan portfolio, by class, at March 31, 2026 and 2025 and December 31, 2025:

The following table summarizes the loan portfolio, by class, at June 30, 2026 and 2025 and December 31, 2025:

Dollars in thousands

March 31, 2026 December 31, 2025 March 31, 2025

June 30, 2026 December 31, 2025 June 30, 2025

Real estate owner occupied $ 379,591 15.7 % $ 378,263 15.8 % $ 371,332 15.5 %

10 unchanged sentences

Total loans $ 2,423,711 100.0 % $ 2,394,109 100.0 % $ 2,394,007 100.0 %

The following table sets forth certain information regarding the contractual maturities of the Bank's loan portfolio as of March 31, 2026:

The following table sets forth certain information regarding the contractual maturities of the Bank's loan portfolio as of June 30, 2026:

Dollars in thousands

12 unchanged sentences

Total loans $ 151,788 $ 655,277 $ 159,477 $ 1,457,169 $ 2,423,711

The following table provides a listing of loans by class, between variable and fixed rates as of March 31, 2026:

The following table provides a listing of loans by class, between variable and fixed rates as of June 30, 2026:

Fixed-Rate Adjustable-Rate Total

14 unchanged sentences

Loan Concentrations

As of March 31, 2026, the Bank had one concentration of loans in one particular industry that exceeded 10% of its total loan portfolio:

As of June 30, 2026, the Bank had one concentration of loans in one particular industry that exceeded 10% of its total loan portfolio:

(1) loans to lessors of residential buildings and dwellings, totaling $245.1 million, or 10.11% of total loans.

This compares to two concentrations of loans in two particular industries that exceeded 10% of its total loan portfolio as of March 31, 2025:

(1) loans to hotels (except Casino hotels) and motels, totaling $253.4 million, or 10.63% of total loans, and (2) loans to lessors of residential buildings and dwellings, $266.7 million, or 11.19% of total loans.

This compares to one concentration of loans in one particular industry that exceeded 10% of its total loan portfolio as of June 30, 2025:

(1) loans to lessors of residential buildings and dwellings, $272.0 million, or 11.36% of total loans.

Credit Risk Management and Allowance for Credit Losses on Loans

22 unchanged sentences

A specific reserve is allocated to an individual loan when the amount of a probable loss is estimable on the basis of its collateral value, the present value of anticipated future cash flows, or its net realizable value.

At March 31, 2026, IAL with specific reserves totaled $5.0 million and the amount of such reserves was $2.7 million.

At June 30, 2026, IAL with specific reserves totaled $4.1 million and the amount of such reserves was $2.3 million.

This compares to IAL with specific reserves of $4.1 million at December 31, 2025 and the amount of such reserves was $2.7 million.

The total ACL on loans at March 31, 2026 is considered by Management to be appropriate to address the potential for credit losses inherent in the loan portfolio at that date.

The total ACL on loans at June 30, 2026 is considered by Management to be appropriate to address the potential for credit losses inherent in the loan portfolio at that date.

However, determination of the appropriate allowance level is based upon a number of assumptions made about future events, which management believes are reasonable, but which may or may not prove valid.

Thus, there can be no assurance charge-offs in future periods will not exceed the ACL or that additional increases in the ACL will not be necessary.

The following table summarizes the allocation of allowance by loan class as of March 31, 2026 and 2025 and December 31, 2025.

The following table summarizes the allocation of allowance by loan class as of June 30, 2026 and 2025 and December 31, 2025.

The percentages are the portion of each loan class to total loans:

Dollars in thousands

March 31, 2026 December 31, 2025 March 31, 2025

June 30, 2026 December 31, 2025 June 30, 2025

Real estate owner occupied $ 5,553 15.7 % $ 5,344 15.8 % $ 5,195 15.5 %

10 unchanged sentences

Total $ 24,555 100.0 % $ 25,365 100.0 % $ 24,829 100.0 %

A breakdown of the ACL on loans as of March 31, 2026, by loan class and allowance element, is presented in the following table:

A breakdown of the ACL on loans as of June 30, 2026, by loan class and allowance element, is presented in the following table:

Dollars in thousands

13 unchanged sentences

Based upon Management's evaluation, provisions are made to maintain the allowance as a best estimate of expected losses within the portfolio.

The provision for credit losses to maintain the allowance was $650,000 for the first three months of 2026 and $396,000 the first three months of 2025.

Net charge-offs were $806,000 in the first three months of 2026, compared to net charge-offs of $153,000 in the first three months of 2025.

The ACL as a percentage of outstanding loans was 1.05% as of March 31, 2026, 1.06% as of December 31, 2025, and 1.05% as of March 31, 2025.

The following table summarizes the activities in the ACL for the three months ended March 31, 2026 and 2025 and for the year ended December 31, 2025:

The provision for credit losses to maintain the allowance was $1.6 million for the first six months of 2026 and $744,000 the first six months of 2025.

Net charge-offs were $2.4 million in the first six months of 2026, compared to net charge-offs of $786,000 in the first six months of 2025.

The ACL as a percentage of outstanding loans was 1.01% as of June 30, 2026, 1.06% as of December 31, 2025, and 1.04% as of June 30, 2025.

The following table summarizes the activities in the ACL for the six months ended June 30, 2026 and 2025 and for the year ended December 31, 2025:

Dollars in thousands

March 31, 2026 December 31, 2025 March 31, 2025

June 30, 2026 December 31, 2025 June 30, 2025

Balance at the beginning of period $ 25,365 $ 24,871 $ 24,871

32 unchanged sentences

Utilization assumptions are based upon an independent analysis of the Bank's historical data.

The ACL for unfunded commitments is reported on the Company's consolidated balance sheets within other liabilities and totaled $536,000 as of March 31, 2026.

The ACL for unfunded commitments is reported on the Company's consolidated balance sheets within other liabilities and totaled $553,000 as of June 30, 2026.

Nonperforming Loans

9 unchanged sentences

All payments made on non-accrual loans are applied to the principal balance of the loan.

Nonperforming loans, expressed as a percentage of total loans, totaled 0.67% at March 31, 2026 compared to 0.54% at December 31, 2025 and 0.25% at March 31, 2025.

The following table shows the distribution of nonperforming loans by class as of March 31, 2026 and 2025 and December 31, 2025:

Nonperforming loans, expressed as a percentage of total loans, totaled 0.71% at June 30, 2026 compared to 0.54% at December 31, 2025 and 0.25% at June 30, 2025.

The following table shows the distribution of nonperforming loans by class as of June 30, 2026 and 2025 and December 31, 2025:

Dollars in thousands

March 31, 2026 December 31, 2025 March 31, 2025

June 30, 2026 December 31, 2025 June 30, 2025

Real estate owner occupied $ 5,160 $ 4,027 $ 522

13 unchanged sentences

These are loans for which we expect to collect all amounts due, including past-due interest.

As of March 31, 2026, loans 90 or more days past due and still accruing interest totaled $596,000, compared to $665,000 at December 31, 2025 and $695,000 at March 31, 2025.

As of June 30, 2026, loans 90 or more days past due and still accruing interest totaled $756,000, compared to $665,000 at December 31, 2025 and $457,000 at June 30, 2025.

Loan Modifications Made to Borrowers Experiencing Financial Difficulty

2 unchanged sentences

Past Due Loans

The Bank's overall loan delinquency ratio was 1.14% at March 31, 2026 compared to 0.90% at December 31, 2025 and 0.33% at March 31, 2025.

Loans 90 or more days delinquent and accruing decreased from $665,000 at December 31, 2025 to $596,000 as of March 31, 2026.

The following table sets forth loan delinquencies as of March 31, 2026 and 2025 and December 31, 2025:

The Bank's overall loan delinquency ratio was 0.93% at June 30, 2026 compared to 0.90% at December 31, 2025 and 0.23% at June 30, 2025.

Loans 90 or more days delinquent and accruing increased from $665,000 at December 31, 2025 to $756,000 as of June 30, 2026.

The following table sets forth loan delinquencies as of June 30, 2026 and 2025 and December 31, 2025:

Dollars in thousands

March 31, 2026 December 31, 2025 March 31, 2025

June 30, 2026 December 31, 2025 June 30, 2025

Real estate owner occupied $ 4,615 $ 5,115 $ 395

18 unchanged sentences

Based on historical experience, the credit quality of some of these loans may improve due to improvements in the economy as well as changes in collateral values or the financial condition of the borrowers, while the credit quality of other loans may deteriorate, resulting in some amount of loss.

At March 31, 2026, there were two potential problem loans reported with a balance of $241,000 or 0.010% of total loans.

At June 30, 2026, there were seven potential problem loans reported with a balance of $4.0 million or 0.167% of total loans.

This compares to five potential problem loans with a balance of $3.7 million or 0.156% of total loans at December 31, 2025.

As of March 31, 2026, there were eight residential loans in the process of foreclosure totaling $1.8 million, one home equity line of credit totaling $63,000 and one consumer loan totaling $7,000.

As of June 30, 2026, there were seven residential loans in the process of foreclosure totaling $1.6 million, one home equity line of credit totaling $63,000 and one consumer loan totaling $7,000.

The Bank's residential foreclosure process begins when a loan becomes 75 days past due at which time a Demand/Breach Letter is sent to the borrower.

3 unchanged sentences

A foreclosure auction date is then set 30 days from the POR expiration date if the default is not cured.

As of March 31, 2026, there were 13 commercial loans commercial loans in the process of foreclosure with a total balance of $6.4 million.

As of June 30, 2026, there were eight commercial loans commercial loans in the process of foreclosure with a total balance of $4.7 million.

The Bank's commercial foreclosure process begins when a loan becomes 60 days past due, at which time a default letter is issued.

2 unchanged sentences

This notice must be published for three consecutive weeks in a newspaper located in the county in which the property is located.

A notice also must be issued to the mortgagor and all parties of interest 21 days

prior to the sale.

A notice also must be issued to the mortgagor and all parties of interest 21 days prior to the sale.

The foreclosure auction occurs and the Affidavit of Sale is recorded within the appropriate county within 30 days of the sale.

11 unchanged sentences

Real estate acquired through foreclosure is carried at the lower of fair value less estimated cost to sell or the cost of the asset and is not included as part of the ACL totals.

There were no OREO properties and no allowance for losses at March 31, 2026, December 31, 2025 and March 31, 2025.

There were no OREO properties and no allowance for losses at June 30, 2026, December 31, 2025 and June 30, 2025.

Liquidity is the ability of a financial institution to meet maturing liability obligations, depositor withdrawal requests, and customer loan demand.

The Bank's lead source of liquidity is deposits, including brokered deposits, which funded 83.8% of total average assets in the first three months of 2026, down slightly from 85.0% a year ago.

The Bank's lead source of liquidity is deposits, including brokered deposits, which funded 83.7% of total average assets in the first six months of 2026, down slightly from 85.0% a year ago.

Other sources of funding include discretionary use of purchased liabilities (e.g., FHLBB term or overnight advances, and other borrowings), cash flows from the securities portfolio and loan repayments.

15 unchanged sentences

Government or Agency bond collateral, available capacity at FHLBB, and available authorized brokered deposit issuance capacity.

As of March 31, 2026, the Bank had primary sources of contingent liquidity of $914.0 million or 28.8% of its total assets.

As of June 30, 2026, the Bank had primary sources of contingent liquidity of $858.0 million or 26.9% of its total assets.

It is Management's opinion that this is an appropriate level.

5 unchanged sentences

As the sole shareholder of the Bank, the Company is entitled to such dividends when and as declared by the Bank's Board of Directors from legally available funds.

For the three-months periods ended March 31, 2026 and 2025 the Bank declared dividends to the Company of $4.2 million and $4.0 million, respectively.

For the six-month periods ended June 30, 2026 and 2025 the Bank declared dividends to the Company of $8.5 million and $8.2 million, respectively.

The Bank's regulator, the OCC, may limit the amount of dividends declared and paid in a calendar year based upon certain factors.

Further discussion may be found in Shareholder's Equity below.

Total deposits at March 31, 2026 were $2.66 billion, unchanged from year-end 2025.

In the first three months of 2026 low-cost deposits (demand, NOW, and savings accounts) decreased by $42.1 million or 3.5%, money market deposits decreased $16.5 million or 3.5%, and certificates of deposit increased $58.5 million or 6.0%.

Between March 31, 2025 and March 31, 2026, total deposits decreased by $46.7 million or 1.7%.

Total deposits at June 30, 2026 were $2.68 billion, an increase of $15.0 million from year-end 2025.

In the first six months of 2026 low-cost deposits (demand, NOW, and savings accounts) decreased by $39.7 million or 3.3%, money market deposits decreased $47.6 million or 10.1%, and certificates of deposit increased $102.3 million or 10.5%.

Between June 30, 2025 and June 30, 2026, total deposits decreased by $25.6 million or 0.9%.

Low-cost deposits increased by $39.8 million or 3.5%, money market accounts increased $33.9 million or 8.7%, and certificates of deposit decreased $99.2 million or 8.4%.

The reduction in certificate of deposit balances as compared to prior year is principally the result of redemption of wholesale time deposits.

Estimated uninsured deposits totaled $485.4 million or 18.2% of total deposits as of March 31, 2026, and $516.9 million or 19.4% of total deposits as of December 31, 2025.

Estimated uninsured deposits totaled $461.1 million or 17.2% of total deposits as of June 30, 2026, and $516.9 million or 19.4% of total deposits as of December 31, 2025.

The company has pledged assets as collateral covering certain deposits;

these amounts were $361.8 million and $385.2 million as of March 31, 2026 and December 31, 2025, respectively.

these amounts were $340.1 million and $385.2 million as of June 30, 2026 and December 31, 2025, respectively.

Borrowed Funds

1 unchanged sentence

This funding may also be used to balance seasonal deposit flows or to carry out interest rate risk management strategies, and may be used to replace or supplement other sources of funding, including core deposits and certificates of deposit.

During the three months ended March 31, 2026, total borrowed funds increased $8.0 million, principally in short-term FHLBB advances.

Between March 31, 2025 and March 31, 2026, total borrowed funds increased by $10.4 million;

short-term FHLBB advances decreased $11.4 million, customer repurchase agreements balances decreased $3.7 million, and long-term FHLBB advances increased $25.5 million.

During the six months ended June 30, 2026, total borrowed funds increased $26.2 million, principally in short-term FHLBB advances.

Between June 30, 2025 and June 30, 2026, total borrowed funds increased by $17.9 million.

Capital Resources

Shareholders' equity as of March 31, 2026 was $286.8 million, compared to $283.1 million as of December 31, 2025 and $259.7 million as of March 31, 2025.

The Company's earnings in the first three months of 2026, net of dividends declared, added $4.8 million to shareholders' equity.

The net unrealized loss on AFS securities, net of tax, presented in accordance with FASB ASC Topic 320 "Investments – Debt and Equity Securities" stands at $32.8 million as of March 31, 2026 and was $31.3 million as of December 31, 2025.

Shareholders' equity as of June 30, 2026 was $293.0 million, compared to $283.1 million as of December 31, 2025 and $265.5 million as of June 30, 2025.

The Company's earnings in the first six months of 2026, net of dividends declared, added $10.1 million to shareholders' equity.

The net unrealized loss on AFS securities, net of tax, presented in accordance with FASB ASC Topic 320 "Investments – Debt and Equity Securities" stands at $32.4 million as of June 30, 2026 and was $31.3 million as of December 31, 2025.

Additional information about the net unrealized loss on AFS securities was provided in Note 2 of the Consolidated Financial Statements and in the AFS Debit Securities section of Management's Discussion and Analysis of Financial Condition and Results of Operations.

A cash dividend of $0.37 per share was declared in the first quarter of 2026.

The dividend payout ratio, which is calculated by dividing dividends declared per share by basic earnings per share, was 45.74% for the first three months of 2026 compared to 56.34% for the same period in 2025.

A cash dividend of $0.38 per share was declared in the second quarter of 2026.

The dividend payout ratio, which is calculated by dividing dividends declared per share by basic earnings per share, was 44.94% for the first six months of 2026 compared to 53.40% for the same period in 2025.

In determining future dividend payout levels, the Board of Directors carefully analyzes capital requirements and earnings retention, as set forth in the Company's Dividend Policy.

6 unchanged sentences

In order to avoid limitations on capital distributions, including dividend payments, the Company must hold a capital conservation buffer of 2.5% above the adequately capitalized risk-based capital ratios.

The Company met each of the well-capitalized ratio guidelines at March 31, 2026.

The following tables indicate the capital ratios for the Bank and the Company at March 31, 2026 and December 31, 2025:

As of March 31, 2026 Leverage Common Equity Tier 1 Tier 1 Total Risk-Based

The Company met each of the well-capitalized ratio guidelines at June 30, 2026.

The following tables indicate the capital ratios for the Bank and the Company at June 30, 2026 and December 31, 2025:

As of June 30, 2026 Leverage Common Equity Tier 1 Tier 1 Total Risk-Based

Bank 9.20 % 13.05 % 13.05 % 14.18 %

10 unchanged sentences

The Bank maintains and annually updates a capital plan over a five year horizon.

The capital plan was last updated and approved by the Board in July 2025.

The capital plan was last updated and approved by the Board in June 2026.

Based upon reasonable assumptions of growth and operating performance, the base capital plan model projects that the Bank will be well capitalized throughout the five year period.

6 unchanged sentences

Derivative instruments that Management periodically uses as part of its interest rate risk management strategy may include interest rate swap agreements, interest rate floor agreements, and interest rate cap agreements.

At March 31, 2026, the Bank had no outstanding off-balance sheet, derivative instruments, designated as cash flow hedges and six off-balance sheet, derivative instruments, designated as fair value hedges.

At June 30, 2026, the Bank had no outstanding off-balance sheet, derivative instruments, designated as cash flow hedges and six off-balance sheet, derivative instruments, designated as fair value hedges.

Notional principal amounts totaled $260.0 million for the fair value hedges, with a cumulative unrealized gain of $143,000, net of taxes.

2 unchanged sentences

The credit risk in derivative instruments is mitigated by entering into transactions with highly-rated counterparties that Management believes to be creditworthy and by limiting the amount of exposure to each counter-party.

At March 31, 2026, the Bank's derivative instrument counterparties had a composite credit rating of “A-” based upon the ratings of several major credit rating agencies.

At June 30, 2026, the Bank's derivative instrument counterparties had a composite credit rating of “A-” based upon the ratings of several major credit rating agencies.

The interest rate swap and interest rate cap agreements were entered into by the Bank to limit its exposure to rising interest rates.

4 unchanged sentences

Credit risk is mitigated by prudent underwriting of the loan customer and financial institution counterparties.

As of March 31, 2026, the Bank had 19 loan swap agreements in place with a total notional value of $185.1 million.

As of June 30, 2026, the Bank had 19 loan swap agreements in place with a total notional value of $184.0 million.

Contractual Obligations

The following table sets forth the contractual obligations of the Company as of March 31, 2026:

The following table sets forth the contractual obligations of the Company as of June 30, 2026:

Dollars in thousands

6 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis