What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-11-05 compared with 2025-08-13 · 299 added, 214 removed, 1319 unchanged (28% of the section changed)

3 unchanged sentences

(In thousands, except share data - Unaudited)

September 30,

Cash and due from banks

2 unchanged sentences

Investment securities – available for sale (at fair value)

Investment securities – held to maturity, net of allowance for credit losses of $ 59 at June 30, 2025 and December 31, 2024 (fair value $ 148,496 at June 30, 2025 and $ 144,760 at December 31, 2024)

Investment securities – held to maturity, net of allowance for credit losses of $ 102 at September 30, 2025 and $ 59 at December 31, 2024 (fair value $ 149,130 at September 30, 2025 and $ 144,760 at December 31, 2024)

Equity investments not held for trading with readily determinable fair values

28 unchanged sentences

Authorized 25,000,000 shares;

issued and outstanding 6,494,611 shares at June 30, 2025 and 6,471,096 at December 31, 2024

issued and outstanding 6,496,908 shares at September 30, 2025 and 6,471,096 at December 31, 2024

Retained earnings

Accumulated other comprehensive loss

Accumulated other comprehensive loss, net of tax

Total Shareholders’ Equity

4 unchanged sentences

(In thousands, except per share data)

Six Months Ended

Nine Months Ended

September 30,

Interest income

15 unchanged sentences

Credit loss expense - loans

Credit loss expense - debt securities held to maturity

Credit loss expense/(credit) - off-balance sheet credit exposures

2 unchanged sentences

Other operating income

Net gains on investments, available for sale

Net gains on sales of residential mortgage loans

Net gains on disposal of fixed assets

Service charges on deposit accounts

31 unchanged sentences

Three Months Ended

September 30,

Interest income

15 unchanged sentences

Credit loss expense - loans

Credit loss expense/(credit) - off-balance sheet credit exposures

Credit loss expense - debt securities held to maturity

Credit loss (credit)/expense - off-balance sheet credit exposures

Total credit loss expense

1 unchanged sentence

Other operating income

Net gains on investments, available for sale

Net gains on sales of residential mortgage loans

Net gains on sales of fixed assets

Service charges on deposit accounts

30 unchanged sentences

(In thousands)

Six Months Ended

Nine Months Ended

September 30,

Comprehensive Income

Other comprehensive income/(loss), net of tax and reclassification adjustments:

Other comprehensive income, net of tax and reclassification adjustments:

Available for sale securities:

Unrealized holding gain/(loss) on investments with credit related impairment

Unrealized holding gain on investments with credit related impairment

Reclassification adjustment for accretable yield realized in income

Other comprehensive income/(loss) on investments with credit related impairment

Unrealized holding gains/(losses) on all other AFS investments

Other comprehensive income/(loss) on all other AFS investments

Unrealized holding gains on all other AFS investments

Reclassification adjustment for gains realized in income

Other comprehensive income on all other AFS investments

Held to Maturity Securities

3 unchanged sentences

Cash flow hedges:

Unrealized holding (losses)/gains on cash flow hedges

Other comprehensive (loss)/income on cash flow hedges

Unrealized holding losses on cash flow hedges

Other comprehensive loss on cash flow hedges

Pension plan liability:

Unrealized holding (losses)/gains on pension plan liability

Unrealized holding gains on pension plan liability

Reclassification adjustment for amortization of unrecognized losses realized in income

4 unchanged sentences

Other comprehensive income on SERP liability

Other comprehensive income/(loss) before income tax

Income tax effect related to other comprehensive income/(loss)

Other comprehensive income/(loss), net of tax

Other comprehensive income before income tax

Income tax effect related to other comprehensive income

Other comprehensive income, net of tax

Comprehensive income

4 unchanged sentences

Three Months Ended

September 30,

Comprehensive Income

Other comprehensive income/(loss), net of tax and reclassification adjustments:

Other comprehensive income, net of tax and reclassification adjustments:

Available for sale securities:

Unrealized holding gains/(losses) on investments with credit related impairment

Unrealized holding gains on investments with credit related impairment

Reclassification adjustment for accretable yield realized in income

Other comprehensive income/(loss) on investments with credit related impairment

Unrealized holding gains/(losses) on all other AFS investments

Other comprehensive income/(loss) on all other AFS investments

Other comprehensive (loss)/income on investments with credit related impairment

Unrealized holding gains on all other AFS investments

Reclassification adjustment for gains realized in income

Other comprehensive income on all other AFS investments

Held to Maturity Securities

Unrealized holding losses on securities transferred to held to maturity

Unrealized holding gains on HTM investments

Unrealized holding gains on securities transferred to held to maturity

Reclassification adjustment for amortization realized in income

4 unchanged sentences

Pension plan liability:

Unrealized holding gains/(losses) on pension plan liability

Unrealized holding gains on pension plan liability

Reclassification adjustment for amortization of unrecognized losses realized in income

Other comprehensive income/(loss) on pension plan liability

Other comprehensive income on pension plan liability

SERP liability:

2 unchanged sentences

Other comprehensive income on SERP liability

Other comprehensive income/(loss) before income tax

Income tax effect related to other comprehensive income/(loss)

Other comprehensive income/(loss), net of tax

Other comprehensive income before income tax

Income tax effect related to other comprehensive income

Other comprehensive income, net of tax

Comprehensive income

4 unchanged sentences

Comprehensive

Loss, Net of Tax

Shareholders'

10 unchanged sentences

Balance at June 30, 2025

Other comprehensive income

Stock based compensation

Common stock issued - 2,297 shares

Common stock dividend declared- $ 0.26 per share

Balance at September 30, 2025

See accompanying notes to the consolidated financial statements

First United Corporation and Subsidiaries

Consolidated Statements of Changes in Shareholders’ Equity

(In thousands, except per share data)

Comprehensive

Loss, Net of Tax

Shareholders'

8 unchanged sentences

Common stock issued - 18,756 shares

Common stock repurchase- 201,800 shares

Common stock repurchased - 201,800 shares

Common stock dividend declared - $ 0.20 per share

Balance at June 30, 2024

Other comprehensive income

Stock based compensation

Common stock issued - 2,964 shares

Common stock dividend declared- $ 0.22 per share

Balance at September 30, 2024

See accompanying notes to the consolidated financial statements

2 unchanged sentences

(In thousands)

Six Months Ended

Nine Months Ended

September 30,

Operating activities

2 unchanged sentences

Stock based compensation

Gains on sales of other real estate owned

Gains on sales of other real estate owned, net

Write-downs of other real estate owned, net

2 unchanged sentences

Gains from sales of loans held for sale

Gains on disposal of fixed assets

Net accretion of investment securities discounts and premiums- AFS

1 unchanged sentence

Amortization of intangible assets

Gains on sales of investment securities – AFS

Earnings on bank owned life insurance

1 unchanged sentence

Amortization of operating lease right of use asset

(Increase)/decrease in accrued interest receivable and other assets

Deferred tax benefit

Increase in accrued interest receivable and other assets

Deferred tax (benefit)/expense

Amortization of operating lease liability

4 unchanged sentences

Proceeds from maturities/calls of investment securities - HTM

Proceeds from sales of investment securities - AFS

Purchases of investment securities - AFS

2 unchanged sentences

Proceeds from sales of other real estate owned

Net (increase)/decrease in restricted stock

Proceeds from disposal of fixed assets

Net decrease/(increase) in restricted stock

Net increase in loans

7 unchanged sentences

Stock repurchase

Proceeds from long-term borrowings

Payments of long-term borrowings

Net cash provided by/(used in) financing activities

Increase/(decrease) in cash and cash equivalents

Increase in cash and cash equivalents

Cash and cash equivalents at beginning of the year

4 unchanged sentences

Transfers from loans to other real estate owned

Transfers from loans to other repossessed assets

See accompanying notes to the consolidated financial statements

4 unchanged sentences

First United Corporation has prepared these unaudited condensed consolidated financial statements in accordance with GAAP for interim financial information, rules of the Securities and Exchange Commission that permit reduced disclosure for interim periods, and Article 8 of Regulation S-X.

Operating results for the six- and three-month periods ended June 30, 2025 are not necessarily indicative of the results that may be expected for the full year or for any future interim period.

Operating results for the nine- and three-month periods ended September 30, 2025 are not necessarily indicative of the results that may be expected for the full year or for any future interim period.

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

3 unchanged sentences

Principles of Consolidation

The consolidated financial statements include the accounts of First United Corporation, First United Bank & Trust (the “Bank”), First United Statutory Trust I, First United Statutory Trust II, OakFirst Loan Center, LLC, OakFirst Loan Center, Inc., First OREO Trust and FUBT OREO I, LLC.

and First OREO Trust.

All significant inter-company accounts and transactions have been eliminated.

As used in these notes, the terms “the Corporation” “we”, “us”, and “our” refer to First United Corporation and, unless the context clearly requires otherwise, its consolidated subsidiaries.

The Corporation has evaluated events and transactions occurring subsequent to the statement of financial condition date of June 30, 2025 and through the date these consolidated financial statements were issued, for items of potential recognition or disclosure.

The Corporation has evaluated events and transactions occurring subsequent to the statement of financial condition date of September 30, 2025 and through the date these consolidated financial statements were issued, for items of potential recognition or disclosure.

Note 2 – Accounting Statements Issued but Not Yet Adopted

4 unchanged sentences

2023-09 became effective for annual periods beginning after December 15, 2024 and early adoption is permitted.

First United Corporation will adopt this ASU in its annual report for the period ending December 31, 2025 and does not believe that such adoption will have a significant impact on the Corporation’s financial statements.

First United Corporation will adopt this ASU in its annual report for the period ending December 31, 2025 and does not believe that such adoption will have a material impact on the Corporation’s financial statements.

In November 2024, FASB issued ASU No.

4 unchanged sentences

The prescribed categories include, among other things, employee compensation, depreciation, and intangible asset amortization.

Additionally, entities must disclose the total amount of selling expenses and, in annual reporting

periods, an entity’s definition of selling expenses.

2024-03 is effective on a prospective basis for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, though early adoption and retrospective application is permitted.

2024-03 is not expected to have a significant impact on our financial statements.

Additionally, entities must disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses.

2024-03 is effective on a prospective basis for annual periods beginning

after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, though early adoption and retrospective application is permitted.

2024-03 is not expected to have a material impact on our financial statements.

In July 2025, FASB issued ASU No.

2025-05, “Financial Instruments- Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets.” ASU No.

2025-05 provides all entities with a practical expedient in developing reasonable and supportable forecasts as part of estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606.

2025-05 is effective on a prospective basis or annual periods beginning after December 15, 2025, though early adoption and retroactive application is permitted.

2025-05 is not expected to have a material impact on our financial statements.

In September 2025, FASB issued ASU No.

2025-06, “Intangibles- Goodwill and Other Internal Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software.” ASU No.

2025-06 applies to all entities subject to internal-use software guidance in Subtopic 350-40 and website development costs in accordance with Subtopic 350-50.

The amendments in ASU No.2025-06 remove all reference to prescriptive and sequential software development stages.

Therefore, an entity is required to start capitalizing software costs when both the following occur:

1) management has authorized and committed to funding the software project and 2) it is probable that the project will be completed and the software will be used to perform the function intended.

2025-06 is effective on a prospective basis on annual periods beginning after December 15, 2027, though early adoption and retroactive application is permitted.

2025.06 is not expected to have a material impact on our financial statements.

Note 3 – Earnings Per Share

1 unchanged sentence

Diluted earnings per share is derived by dividing net income available to shareholders by the weighted-average number of shares outstanding, adjusted for the dilutive effect of outstanding common stock equivalents, such as restricted stock units (“RSUs”).

There were no anti-dilutive shares outstanding at June 30, 2025 or 2024.

The following table sets forth the calculation of basic and diluted earnings per common share for the six- and three-month periods ended June 30, 2025 and 2024:

Six months ended June 30,

There were no anti-dilutive shares outstanding at September 30, 2025 or September 30, 2024.

The following table sets forth the calculation of basic and diluted earnings per common share for the nine- and three-month periods ended September 30, 2025 and 2024:

Nine months ended September 30,

(in thousands, except for per share amount)

2 unchanged sentences

Restricted stock units

Three months ended June 30,

Three months ended September 30,

(in thousands, except for per share amount)

3 unchanged sentences

Note 4 – Investments

The following tables show a comparison of amortized cost and fair values of investment securities at June 30, 2025 and December 31, 2024:

The following tables show a comparison of amortized cost and fair values of investment securities at September 30, 2025 and December 31, 2024:

(in thousands)

1 unchanged sentence

Estimated Fair Value

June 30, 2025

September 30, 2025

Available for Sale:

10 unchanged sentences

Allowance for Credit Losses

June 30, 2025

September 30, 2025

Held to Maturity:

29 unchanged sentences

Total held to maturity

The Corporation utilizes FASB Accounting Standards Codification (“ASC”) Topic 326 to evaluate its available-for-sale (“AFS”) and held-to-maturity (“HTM”) debt security portfolio for expected credit losses.

Proceeds from sales and calls of available-for-sale (“AFS”) securities and the realized gains and losses for the nine- and three-month periods ended September 30, 2025 and 2024 are as follows:

Nine Months Ended

Three Months Ended

September 30,

(in thousands)

Realized gains

Realized losses

The Corporation utilizes FASB Accounting Standards Codification (“ASC”) Topic 326 to evaluate its AFS and held-to-maturity (“HTM”) debt security portfolio for expected credit losses.

For any AFS debt security in an unrealized loss position, the Corporation first assesses whether it intends to sell, or it is more likely than not that the Corporation will be required to sell, the security before recovery to its amortized cost basis.

25 unchanged sentences

Non-rated securities are evaluated internally based on financial performance and expected future cash flows.

As of both June 30, 2025 and December 31, 2024, the Corporation recorded ACL of approximately $ 59,000 related to one municipal bond in its HTM security portfolio.

The following tables show the Corporation’s investment securities with gross unrealized and unrecognized losses and fair values at June 30, 2025 and December 31, 2024, aggregated by investment category and the length of time that individual securities have been in a continuous unrealized loss position:

As of September 30, 2025 and December 31, 2024, the Corporation recorded ACL of approximately $ 102,000 and $ 59,000 , respectively, related to one municipal bond in its HTM security portfolio.

The following tables show the Corporation’s investment securities with gross unrealized and unrecognized losses and fair values at September 30, 2025 and December 31, 2024, aggregated by investment category and the length of time that individual securities have been in a continuous unrealized and unrecognized loss position:

Less than 12 months

1 unchanged sentence

(in thousands)

June 30, 2025

September 30, 2025

Available for Sale:

10 unchanged sentences

(in thousands)

June 30, 2025

September 30, 2025

Held to Maturity:

29 unchanged sentences

Total held to maturity

The amortized cost and estimated fair value of securities by contractual maturities at June 30, 2025 are shown in the following table.

The amortized cost and estimated fair value of securities by contractual maturities at September 30, 2025 are shown in the following table.

Expected maturities for mortgage-backed securities and collateralized mortgage obligations will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

June 30, 2025

September 30, 2025

(in thousands)

1 unchanged sentence

Available for Sale:

Due after one year through five years

Due in one year or less

Due after five years through ten years

12 unchanged sentences

Total held to maturity

At June 30, 2025 and December 31, 2024, AFS investment securities with an aggregate fair value of $ 85.2 million and $ 71.6 million, respectively, and HTM investment securities with an aggregate book value of $ 166.6 million and $ 161.2 million, respectively, were pledged as permitted or required to secure public deposits, for securities sold under agreements to repurchase as required or permitted by law and as collateral for borrowing capacity.

At September 30, 2025 and December 31, 2024, AFS investment securities with an aggregate fair value of $ 88.0 million and $ 71.6 million, respectively, and HTM investment securities with an aggregate book value of $ 171.0 million and $ 161.2 million, respectively, were pledged as permitted or required to secure public deposits, for securities sold under agreements to repurchase as required or permitted by law and as collateral for borrowing capacity.

Note 5 – Loans and Related Allowance for Credit Losses

The following table summarizes the primary segments of the loan portfolio at June 30, 2025 and December 31, 2024:

The following table summarizes the primary segments of the loan portfolio at September 30, 2025 and December 31, 2024:

(in thousands)

June 30, 2025

September 30, 2025

Individually evaluated for impairment

3 unchanged sentences

Collectively evaluated for impairment

The following table presents the classes of the loan portfolio summarized by the aging categories of performing loans and non-accrual loans at June 30, 2025 and December 31, 2024:

The following table presents the classes of the loan portfolio summarized by the aging categories of performing loans and non-accrual loans at September 30, 2025 and December 31, 2024:

(in thousands)

June 30, 2025

September 30, 2025

Commercial real estate:

19 unchanged sentences

Residential mortgage - home equity

Non-accrual loans that have been subject to partial charge-offs totaled $ 0.7 million at both June 30, 2025 and December 31, 2024.

Loans secured by 1-4 family residential real estate properties in the process of foreclosure totaled $ 0.1 million and $ 1.6 million at June 30, 2025 and December 31, 2024, respectively.

Accruing loans past due 30 days or more constituted 0.27 % of the loan portfolio at June 30, 2025 compared to 0.32 % at December 31, 2024.

Non-accrual loans that have been subject to partial charge-offs totaled $ 0.3 million and $ 0.7 million at September 30, 2025 and December 31, 2024, respectively.

Loans secured by 1-4 family residential real estate properties in the process of foreclosure totaled $ 0.2 million and $ 1.6 million at September 30, 2025 and December 31, 2024, respectively.

As a percentage of the loan portfolio, accruing loans past due 30 days or more were 0.26 % at September 30, 2025 compared to 0.32 % at December 31, 2024.

A loan that is considered a non-accrual or modified loan may be subject to the individually evaluated loan analysis if the commitment is $ 0.1 million or greater;

38 unchanged sentences

The value of the collateral, if there is any, is less likely to be a source of repayment due to less certain collateral values.

The following table summarizes the primary segments of the ACL at June 30, 2025 and December 31, 2024, segregated by the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment:

The following table summarizes the primary segments of the ACL at September 30, 2025 and December 31, 2024, segregated by the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment:

(in thousands)

June 30, 2025

September 30, 2025

Individually evaluated

9 unchanged sentences

The evaluation of the need and amount of a specific allocation of the ACL and whether a loan can be removed from impairment status is made on a quarterly basis.

The following tables present the amortized cost basis of collateral-dependent individually evaluated loans as of June 30, 2025 and December 31, 2024.

June 30, 2025

The following tables present the amortized cost basis of collateral-dependent individually evaluated loans as of September 30, 2025 and December 31, 2024.

September 30, 2025

(in thousands)

1 unchanged sentence

Non-Accrual Loans with No Allowance

Commercial real estate

Commercial and industrial

7 unchanged sentences

Residential mortgage

The following tables present the activity in the ACL for the six- and three-month periods ended June 30, 2025 and 2024:

Six months ended (in thousands)

The following tables present the activity in the ACL for the nine- and three-month periods ended September 30, 2025 and 2024:

Nine months ended (in thousands)

Beginning balance at January 1, 2025

2 unchanged sentences

Credit loss expense/(credit)

ACL balance at June 30, 2025

ACL balance at September 30, 2025

Beginning balance at January 1, 2024

2 unchanged sentences

Credit loss (credit)/expense

ACL balance at June 30, 2024

ACL balance at September 30, 2024

Three months ended (in thousands)

ACL balance at April 1, 2025

ACL balance at July 1, 2025

Loan charge-offs

Recoveries collected

Credit loss expense/(credit)

ACL balance at June 30, 2025

ACL balance at April 1, 2024

Credit loss (credit)/expense

ACL balance at September 30, 2025

ACL balance at July 1, 2024

Loan charge-offs

Recoveries collected

Credit loss(credit)/expense

ACL balance at June 30, 2024

Credit loss expense/(credit)

ACL balance at September 30, 2024

The Corporation’s methodology for estimating the ACL includes:

15 unchanged sentences

The Corporation has elected to forecast out the first four quarters of the credit loss estimate and revert this forecast to long-term historical averages on a straight-line basis over eight quarters.

By reverting these modeling inputs to their historical average and considering loan/borrower specific attributes, our models are intended to yield a measurement of expected credit losses that reflects our average historical loss rates for periods subsequent to the reversion period.

By reverting these modeling inputs to their historical average

and considering loan/borrower specific attributes, our models are intended to yield a measurement of expected credit losses that reflects our average historical loss rates for periods subsequent to the reversion period.

Qualitative Analysis.

34 unchanged sentences

Total Portfolio Loans

June 30, 2025

September 30, 2025

Commercial real estate:

85 unchanged sentences

Total Portfolio Loans

June 30, 2025

September 30, 2025

Commercial real estate:

77 unchanged sentences

The allowance may be increased, adjustments may be made in the allocation of the allowance, or partial charge-offs may be taken to further write-down the carrying value of the loan.

The following tables present the amortized cost basis as of June 30, 2025 and the financial effect of loans modified to borrowers experiencing financial difficulty during the six- and three-month periods ended June 30, 2025 and 2024:

The following tables present the amortized cost basis as of September 30, 2025 and the financial effect of loans modified to borrowers experiencing financial difficulty during the nine-month periods ended September 30, 2025 and 2024 and three-month period ended September 30, 2024.

There were no loans modified to borrowers facing financial difficulty during the three-month period ended September 30, 2025:

(in thousands)

2 unchanged sentences

Weighted Average Term and Principal Payment Extension

Six months ended June 30, 2025

Nine months ended September 30, 2025

Owner-occupied commercial real estate

Commercial and industrial

Six months ended June 30, 2024

Nine months ended September 30, 2024

Owner-occupied commercial real estate

Commercial and industrial

(in thousands)

2 unchanged sentences

Weighted Average Term and Principal Payment Extension

Three months ended June 30, 2025

Owner-occupied commercial real estate

Three months ended June 30, 2024

Owner-occupied commercial real estate

Three months ended September 30, 2024

Commercial and industrial

The Corporation monitors loan payments on performing and non-performing loans on an ongoing basis to determine if a loan is considered to have a payment default.

The borrowers for whom loan modifications were made in the six-month period ended June 30, 2025 have made all contractual payments.

If a modified loan with an outstanding balance of $ 0.1 million or greater subsequently defaults and goes on non-accrual status, then the Corporation individually evaluates the loan when performing its estimate of current expected credit losses to calculate the ACL.

The borrowers for whom loan modifications were made in the nine-month period ended September 30, 2025 have made all contractual payments.

Upon determination that a modified loan (or a portion of a modified loan) has subsequently been deemed uncollectible, the loan (or portion of the loan) is charged off.

22 unchanged sentences

The fair value of investments available-for-sale is determined using a market approach.

At June 30, 2025 and December 31, 2024, the U.S.

At September 30, 2025 and December 31, 2024, the U.S.

Government agencies and treasuries, residential and commercial mortgage-backed securities, and municipal bonds segments were classified as Level 2 within the valuation hierarchy.

Their fair values were determined based upon market-corroborated inputs and valuation matrices, which were obtained through third party data service providers or securities brokers through which we have historically transacted both purchases and sales of investment securities.

Equity investments not held for trading with readily determinable fair values consisted of money market mutual funds as of June 30, 2025 and are classified as Level 1 within the valuation hierarchy.

Equity investments not held for trading with readily determinable fair values consisted of money market mutual funds as of September 30, 2025 and are classified as Level 1 within the valuation hierarchy.

Their fair values were determined based upon daily published net asset values with which investors can freely redeem from the fund.

Derivative financial instruments (cash flow hedge) – The Corporation’s open derivative positions are interest rate swap agreements.

Those classified as Level 2 open derivative positions are valued using externally developed pricing models based on observable market inputs provided by a third party and validated by management.

Those classified as Level 2 open derivative positions are valued using externally developed pricing models based on

observable market inputs provided by a third party and validated by management.

The Corporation has considered counterparty credit risk in the valuation of its interest rate swap assets.

5 unchanged sentences

These assets are included as Level 3 fair values based upon the lowest level of input that is significant to the fair value measurements.

Other real estate owned – OREO included in the table below are recorded with specific write-downs.

Other real estate owned (“OREO”) – OREO included in the table below are recorded with specific write-downs.

Fair value of other real estate owned was based on independent third-party appraisals of the properties.

1 unchanged sentence

These assets are included as Level 3 fair values based upon the lowest level of input that is significant to the fair value measurements.

For assets measured at fair value on a recurring and non-recurring basis, the fair value measurements by level within the fair value hierarchy used at June 30, 2025 and December 31, 2024 were as follows:

For assets measured at fair value on a recurring and non-recurring basis, the fair value measurements by level within the fair value hierarchy used at September 30, 2025 and December 31, 2024 were as follows:

Fair Value Measurements

at June 30, 2025 Using

at September 30, 2025 Using

Active Markets

12 unchanged sentences

Non-recurring:

Individually evaluated loans, net

Equity investment

Other real estate owned

Fair Value Measurements

17 unchanged sentences

Other real estate owned

Individually evaluated loans, with no valuation allowance, had a net carrying amount of $ 3.3 million and $ 4.4 million at June 30, 2025 and December 31, 2024, respectively.

Individually evaluated loans recorded at fair value at both June 30, 2025 and December 31, 2024 totaled $ 0.6 million, which was inclusive of $ 0.2 million in partial charge-offs recorded in the year ended December 31, 2024.

There were no transfers of assets between any of the fair value hierarchy for the six- or three-month periods ended June 30, 2025 or 2024.

For Level 3 assets and liabilities measured at fair value on a recurring and non-recurring basis as of June 30, 2025 and December 31, 2024, the significant unobservable inputs used in the fair value measurements were as follows:

Individually evaluated loans, with no valuation allowance, had a net carrying amount of $ 3.3 million and $ 4.4 million at September 30, 2025 and December 31, 2024, respectively.

Individually evaluated loans recorded at fair value at September 30, 2025 and December 31, 2024 totaled $ 0.3 million and $ 0.6 million, respectively, which amounts were inclusive of $ 0.7 million and $ 0.2 million in partial charge-offs recorded in the nine-month period ended September 30, 2025 and the year ended December 31, 2024, respectively.

There were no transfers of assets between any of the fair value hierarchy for the nine- or three-month periods ended September 30, 2025 or 2024.

For Level 3 assets and liabilities measured at fair value on a recurring and non-recurring basis as of September 30, 2025 and December 31, 2024, the significant unobservable inputs used in the fair value measurements were as follows:

(in thousands)

Fair Value at

September 30,

Investment securities – available for sale -CDO

1 unchanged sentence

Discount Margin

Range of low 300 to high 400

Range of high 200 to high 400

Non-recurring:

Individually evaluated loans, net

Market Comparable Properties

Marketability Discount

Equity investment

1 unchanged sentence

Revenue Multiples

Other real estate owned (1)

Market Comparable Properties

Marketability Discount

(1) Range would include discounts taken since appraisal and estimated values

(in thousands)

17 unchanged sentences

(1) Range would include discounts taken since appraisal and estimated values

The following tables show a reconciliation of the beginning and ending balances for fair valued assets measured on a recurring basis using Level 3 significant unobservable inputs for the six- and three-month periods ended June 30, 2025 and 2024:

The following tables show a reconciliation of the beginning and ending balances for fair valued assets measured on a recurring basis using Level 3 significant unobservable inputs for the nine- and three-month periods ended September 30, 2025 and 2024:

Fair Value Measurements

6 unchanged sentences

Included in other comprehensive income

Ending balance June 30, 2025

Ending balance September 30, 2025

Fair Value Measurements

4 unchanged sentences

Beginning balance January 1, 2024

Total losses realized/unrealized:

Included in other comprehensive loss

Ending balance June 30, 2024

Total gains realized/unrealized:

Included in other comprehensive income

Ending balance September 30, 2024

Fair Value Measurements

3 unchanged sentences

Available for Sale

Beginning balance April 1, 2025

Total gains realized/unrealized:

Beginning balance July 1, 2025

Total losses realized/unrealized:

Included in other comprehensive income

Ending balance June 30, 2025

Ending balance September 30, 2025

Fair Value Measurements

3 unchanged sentences

Available for Sale

Beginning balance April 1, 2024

Total losses realized/unrealized:

Included in other comprehensive loss

Ending balance June 30, 2024

There were no gains or losses included in earnings attributable to the change in realized/unrealized gains or losses related to the assets for the six- or three-month periods ended June 30, 2025 or 2024.

Beginning balance July 1, 2024

Total gains realized/unrealized:

Included in other comprehensive income

Ending balance September 30, 2024

There were no gains or losses included in earnings attributable to the change in realized/unrealized gains or losses related to the assets for the nine- or three-month periods ended September 30, 2025 or 2024.

The disclosed fair values may vary significantly between institutions based on the estimates and assumptions used in the various valuation methodologies.

6 unchanged sentences

The actual carrying amounts and estimated fair values of the Corporation’s financial instruments that are included in the Consolidated Statement of Financial Condition are as follows:

June 30, 2025

September 30, 2025

Fair Value Measurements

37 unchanged sentences

Note 7 – Accumulated Other Comprehensive Loss

The following table presents the changes in each component of accumulated other comprehensive loss for the six- and three-month periods ended June 30, 2025 and 2024:

The following table presents the changes in each component of accumulated other comprehensive loss for the nine- and three-month periods ended September 30, 2025 and 2024:

(in thousands)

7 unchanged sentences

Balance - June 30, 2025

Other comprehensive income/(loss)before reclassifications

Amounts reclassified from accumulated other comprehensive income

Balance - September 30, 2025

(in thousands)

6 unchanged sentences

Balance - June 30, 2024

The following tables present the components of other comprehensive income/(loss) for the six- and three-month periods ended June 30, 2025 and 2024:

Other comprehensive

income/(loss) before

reclassifications

Amounts reclassified from

accumulated other

comprehensive loss

Balance - September 30, 2024

The following tables present the components of other comprehensive income for the nine- and three-month periods ended September 30, 2025 and 2024:

Components of Other Comprehensive Income

(in thousands)

For the six months ended June 30, 2025

For the nine months ended September 30, 2025

Available for sale (AFS) securities with credit related impairment:

4 unchanged sentences

Unrealized holding gains

gains recognized in income

Net unrealized gains on all other AFS securities

Held to maturity securities:

5 unchanged sentences

Pension Plan:

Unrealized net actuarial losses

Unrealized net actuarial gains

amortization of unrecognized gains

1 unchanged sentence

Other comprehensive income

Components of Other Comprehensive Loss

Components of Other Comprehensive Income

(in thousands)

For the six months ended June 30, 2024

For the nine months ended September 30, 2024

Available for sale (AFS) securities with credit related impairment:

Unrealized holding losses

Unrealized holding gains

accretable yield recognized in income

1 unchanged sentence

Available for sale securities – all other:

Unrealized holding losses

Unrealized holding gains

Held to maturity securities:

3 unchanged sentences

Cash flow hedges:

Unrealized holding gains

Unrealized holding losses

Pension Plan:

3 unchanged sentences

Unrealized net actuarial gains

amortization of unrecognized loss

amortization of unrecognized losses

Net SERP liability adjustment

Other comprehensive loss

Other comprehensive income

Components of Other Comprehensive Income

(in thousands)

For the three months ended June 30, 2025

For the three months ended September 30, 2025

Available for sale (AFS) securities with credit related impairment:

4 unchanged sentences

Unrealized holding gains

gains recognized in income

Net unrealized gains on all other AFS securities

8 unchanged sentences

amortization of unrecognized loss

Net pension plan liability adjustment

Net pension plan asset adjustment

Other comprehensive income

Components of Other Comprehensive Loss

Components of Other Comprehensive Income

(in thousands)

For the three months ended June 30, 2024

For the three months ended September 30, 2024

Available for sale (AFS) securities with credit related impairment:

Unrealized holding losses

Unrealized holding gains

accretable yield recognized in income

Net unrealized losses on investments with credit related impairment

Net unrealized gains on investments with credit related impairment

Available for sale securities – all other:

Unrealized holding losses

Net unrealized losses on all other AFS securities

Unrealized holding gains

Net unrealized gains on all other AFS securities

Held to maturity securities:

5 unchanged sentences

Pension Plan:

Unrealized net actuarial loss

amortization of unrecognized loss

Net pension plan liability adjustment

Unrealized net actuarial loss

amortization of unrecognized gains

Unrealized net actuarial gains

amortization of unrecognized losses

Net pension plan asset adjustment

Unrealized net actuarial gains

amortization of unrecognized losses

Net SERP liability adjustment

Other comprehensive loss

The following table presents the details of amounts reclassified from accumulated other comprehensive (loss)/income for the six- and three-month periods ended June 30, 2025 and 2024:

Other comprehensive income

The following table presents the details of amounts reclassified from accumulated other comprehensive loss for the nine- and three-month periods ended September 30, 2025 and 2024:

Amounts Reclassified from

Six Months Ended

Nine months ended

Accumulated Other Comprehensive Loss

September 30,

Affected Line Item in the Statement

5 unchanged sentences

Credit for income tax expense

Net unrealized losses on held to maturity securities:

Net unrealized gains on available for sale investment securities - all others:

Gains recognized

Provision for income tax expense

Net unrealized gains on held to maturity securities:

Interest income on taxable investment securities

12 unchanged sentences

Accumulated Other Comprehensive Loss

September 30,

Affected Line Item in the Statement

5 unchanged sentences

Credit for income tax expense

Net unrealized losses on held to maturity securities:

Net unrealized gains on available for sale investment securities - all others:

Gains recognized

Provision for income tax expense

Net unrealized gains on held to maturity securities:

Interest income on taxable investment securities

Provision for income tax expense

Net pension plan liability adjustment:

Net pension plan asset adjustment:

Amortization of unrecognized losses

14 unchanged sentences

In May 2024, a total of 14,325 fully vested shares of common stock were issued to directors, which had a grant date fair value of $ 21.94 per share.

Director stock compensation was $ 166,185 and $ 134,964 for the six-month periods ending June 30, 2025 and 2024, respectively.

Director stock compensation expense was $ 87,613 and $ 73,027 for the three-month periods ended June 30, 2025 and 2024, respectively.

Employee stock compensation was $ 18,596 and $ 5,757 for the six-month periods ended June 30, 2025 and 2024, respectively.

Employee stock compensation expense was $ 3,029 and $ 699 for the three-month periods ended June 30, 2025 and 2024, respectively.

Director stock compensation was $ 258,318 and $ 213,536 for the nine-month periods ended September 30, 2025 and 2024, respectively.

Director stock compensation expense was $ 92,133 and $ 78,573 for the three-month periods ended September 30, 2025 and 2024, respectively.

Employee stock compensation was $ 21,400 and $ 8,240 for the nine-month periods ended September 30, 2025 and 2024, respectively.

Employee stock compensation expense was $ 2,804 and $ 2,483 for the three-month periods ended September 30, 2025 and 2024, respectively.

Restricted Stock Units

14 unchanged sentences

On May 5, 2022, 1,230 shares underlying the time-vesting RSUs were issued to participants.

5, 2023, 1,230 additional shares underlying the time-vesting RSUs were issued to participants.

On May 5, 2023, 1,230 additional shares underlying the time-vesting RSUs were issued to participants.

On May 5, 2024, the remaining 1,233 shares underlying the time-vesting RSUs were issued to participants.

Stock compensation expense was $ 7,365 for the six-month period ended June 30, 2024.

Stock compensation expense was $ 1,841 for the three-month period ended June 30, 2024.

All compensation expense related to these RSUs was recognized as of June 30, 2024.

Stock compensation expense was $ 7,365 for the nine-month period ended September 30, 2024.

Stock compensation expense was $ 0 for the three-month period ended September 30, 2024.

All compensation expense related to these RSUs was recognized as of September 30, 2024.

In March 2022, the Corporation granted performance-vesting RSUs relating to 8,096 shares (target) and time-vesting RSUs relating to 6,238 shares, which had a grant date fair market value of $ 21.88 per share of common stock underlying each RSU.

5 unchanged sentences

In the third quarter of 2024, it was projected that the performance-vesting RSUs would not be satisfied, and the stock compensation expense was adjusted accordingly.

Stock compensation expense was $ 26,145 and $ 55,290 for the six-month periods ended June 30, 2025 and 2024, respectively.

Stock compensation expense was $ 0 and $ 26,145 for each of the three-month periods ended June 30, 2025 and 2024, respectively.

All compensation expense related to these RSUs were recognized as of June 30, 2025.

Net stock compensation expense/(credit) was $ 11,378 and ($ 69,228 ) for the nine-month periods ended September 30, 2025 and 2024, respectively.

Stock compensation expense/(credit) was $ 0 and ($ 121,518 ) for the three-month periods ended September 30, 2025 and 2024, respectively.

All compensation expense/(credit) related to these RSUs was recognized as of September 30, 2025.

In March 2023, the Corporation granted performance-vesting RSUs relating to 10,214 shares (target) and time-vesting RSUs relating to 7,920 shares, which had a grant date fair market value of $ 18.25 per share of common stock underlying each RSU.

3 unchanged sentences

On March 15, 2025, 2,639 shares underlying the time-vesting RSUs were issued to participants.

Stock compensation expense was $ 55,170 for both the six-month periods ended June 30, 2025 and 2024.

Stock compensation expense was $ 27,585 for both of the three-month periods ended June 30, 2025 and 2024.

Unrecognized compensation expense related to these RSUs that have not vested was $ 82,755 as of June 30, 2025.

Stock compensation expense was $ 82,755 for each of the nine-month periods ended September 30, 2025 and 2024.

Stock compensation expense was $ 27,585 for each of the three-month periods ended September 30, 2025 and 2024.

Unrecognized compensation expense related to these RSUs that have not vested was $ 55,170 as of September 30, 2025.

In May 2024, the Corporation granted performance-vesting RSUs relating to 8,593 shares (target) and time-vesting RSUs relating to 6,662 shares, which had a grant date fair market value of $ 22.26 per share of common stock underlying each RSU.

2 unchanged sentences

On May 20, 2025, 2,219 shares of the 6,602 time-vesting RSUs were issued to participants.

Stock compensation expense was $ 56,628 and $ 9,438 for the six-month periods ended June 30, 2025 and 2024, respectively.

Stock compensation expense was $ 28,314 and $ 9,438 for the three-month period ended June 30, 2025 and 2024, respectively.

Unrecognized compensation expense related to these RSUs that have not vested was $ 217,074 as of June 30, 2025.

Stock compensation expense was $ 84,942 and $ 37,752 for the nine-month periods ended September 30, 2025 and 2024, respectively.

Stock compensation expense was $ 28,314 each of the three-month periods ended September 30, 2025 and 2024.

Unrecognized compensation expense related to these RSUs that have not vested was $ 188,760 as of September 30, 2025.

In February 2025, the Corporation granted performance-vesting RSUs relating to 6,006 shares (target) and time-vesting RSUs relating to 4,797 shares, which had a grant date fair market value of $ 37.59 per share of common stock underlying each RSU.

1 unchanged sentence

The time-vesting RSUs will vest ratably over a three-year period beginning on February 25, 2025.

Stock compensation expense was $ 45,147 for the six-month period ended June 30, 2025.

Stock compensation expense was $ 33,860 for the three-month period ended June 30, 2025.

Unrecognized compensation expense related to these RSUs that have not vested was $ 361,176 as of June 30, 2025.

Stock compensation expense was $ 79,007 for the nine-month period ended September 30, 2025.

Stock compensation expense was $ 33,860 for the three-month period ended September 30, 2025.

Unrecognized compensation expense related to these RSUs that have not vested was $ 327,316 as of September 30, 2025.

Note 9– Derivative Financial Instruments

3 unchanged sentences

In March 2016, the Corporation entered into four interest rate swap contracts totaling $ 30.0 million notional amount, hedging future cash flows associated with floating rate trust preferred debt.

As of June 30, 2025, $ 15.0 million notional amount remains.

As of September 30, 2025, $ 15.0 million notional amount remains.

The interest rate swap creates an effective fixed interest rate of 4.66 % on the $ 15.0 million notional amount of the Corporation’s junior subordination debt until the interest rate swap’s maturity in March 2026.

The fair value of the interest rate swap contracts was $ 0.3 million and $ 0.5 million at June 30, 2025 and December 31, 2024, respectively.

For the six-month period ended June 30, 2025, a $ 189,000 decrease in the aggregate value of the derivatives and $ 40,000 in related deferred tax benefits were recorded in net accumulated other comprehensive income to reflect the effective portion of cash flow hedges.

This compares to a $ 4,000 increase in value and related deferred taxes of $ 1,000 for the six-month period ended June 30, 2024.

For the three-month period ended June 30, 2025, a $ 81,000 decrease in the aggregate value of the derivatives and $ 17,000 in related deferred tax benefits were recorded in net accumulated other comprehensive income to reflect the effective portion of cash flow hedges.

This compares to a $ 69,000 decrease in the aggregate value of the derivatives and $ 18,000 in related deferred tax benefits for the three-month period ended June 30, 2024.

The fair value of the interest rate swap contracts was $ 0.2 million and $ 0.5 million at September 30, 2025 and December 31, 2024, respectively.

For the nine-month period ended September 30, 2025, a $ 287,000 decrease in the aggregate value of the derivatives and $ 61,000 in related deferred tax benefits were recorded in net accumulated other comprehensive income to reflect the effective portion of cash flow hedges.

This compares to a $ 319,000 decrease in value and related deferred tax benefits of $ 84,000 for the nine-month period ended September 30, 2024.

For the three-month period ended September 30, 2025, a $ 98,000 decrease in the aggregate value of the derivatives and $ 21,000 in related deferred tax benefits were recorded in net accumulated other comprehensive income to reflect the effective portion of cash flow hedges.

This compares to a $ 323,000 decrease in the aggregate value of the derivatives and $ 85,000 in related deferred tax benefits for the three-month period ended September 30, 2024.

ASC Subtopic 815-30 requires the net accumulated other comprehensive income/(loss) to be reclassified to earnings if the hedge becomes ineffective or is terminated.

There was no hedge ineffectiveness recorded for any of the six- or three-month periods ended June 30, 2025 or 2024.

There was no hedge ineffectiveness recorded for any of the nine- or three-month periods ended September 30, 2025 or 2024.

The Corporation does not expect any material losses relating to these hedges to be reclassified into earnings within the next 12 months.

Interest rate swap agreements are entered into with counterparties that meet established credit standards, and the Corporation believes that the credit risk inherent in these contracts is not significant as of June 30, 2025.

The table below discloses the impact of derivative financial instruments on the Corporation’s Consolidated Financial Statements for the six- and three-month periods ended June 30, 2025 and 2024.

The table below discloses the impact of derivative financial instruments on the Corporation’s Consolidated Financial Statements for the nine- and three-month periods ended September 30, 2025 and 2024.

Derivative in Cash Flow Hedging Relationships

1 unchanged sentence

(loss) recognized in

Amount of (loss) or

Amount of loss

Amount of gain or

income or derivative

gain recognized in

recognized in

(loss) reclassified from

8 unchanged sentences

Interest rate contracts:

Six months ended:

June 30, 2025

June 30, 2024

Nine months ended:

September 30, 2025

September 30, 2024

Three months ended:

June 30, 2025

June 30, 2024

September 30, 2025

September 30, 2024

(a) Reported as interest expense

1 unchanged sentence

Note 10 – Regulatory Capital Requirements

The following table presents the Bank’s capital ratios as of June 30, 2025 and December 31, 2024.

The following table presents the Bank’s capital ratios as of September 30, 2025 and December 31, 2024.

September 30,

Total Capital (to risk-weighted assets)

2 unchanged sentences

Tier 1 Capital (to average assets)

As of June 30, 2025 and December 31, 2024, the Bank was considered “well capitalized” under the regulatory framework for prompt corrective action.

As of September 30, 2025 and December 31, 2024, the Bank was considered “well capitalized” under the regulatory framework for prompt corrective action.

Note 11 – Deposits

The following table summarizes deposits at June 30, 2025 and December 31, 2024.

The following table summarizes deposits at September 30, 2025 and December 31, 2024.

(in thousands)

June 30, 2025

September 30, 2025

December 31, 2024

8 unchanged sentences

Note 12 – Borrowed Funds

The following is a summary of borrowings at June 30, 2025 and December 31, 2024:

The following is a summary of borrowings at September 30, 2025 and December 31, 2024:

(in thousands)

September 30,

Short-term borrowings:

5 unchanged sentences

Approximate weighted average rate during the period

Overnight borrowings, weighted average interest rate of 4.50 % at June 30, 2025 and December 31, 2024

Overnight borrowings, weighted average interest rate of 4.50 % at December 31, 2024

Long-term borrowings:

FHLB advances, bearing fixed interest rate ranging from 3.84 % to 4.04 % at June 30, 2025 and December 31, 2024.

Junior subordinated debt, bearing variable interest rate of 7.32 % at June 30, 2025 and 7.36 % at December 31, 2024

FHLB advances, bearing fixed interest rate of 3.84 % at September 30, 2025 and ranging from 3.84 % to 4.04 % at December 31, 2024.

Junior subordinated debt, bearing variable interest rate of 7.03 % at September 30, 2025 and 7.36 % at December 31, 2024

Total borrowings outstanding

At June 30, 2025, the repurchase agreements were secured by $ 28.3 million in investment securities issued by government related agencies.

At September 30, 2025, the repurchase agreements were secured by $ 28.6 million in investment securities issued by government related agencies.

A minimum of 102 % of fair value is pledged against account balances.

The following table presents contractual maturities of long-term borrowings outstanding at June 30, 2025 and December 31, 2024:

June 30, 2025

The following table presents contractual maturities of long-term borrowings outstanding at September 30, 2025 and December 31, 2024:

September 30, 2025

December 31, 2024

25 unchanged sentences

Certain prior period amounts have been reclassified to conform to the current presentation.

The Trust and Investment Services segment excludes off-balance-sheet assets under management with a total fair value of $ 1.7 billion at both June 30, 2025 and December 31 2024.

Total assets of each operating segment at Jun 30, 2025 and December 31, 2024 were as follows:

Total assets as of June 30, 2025

The Trust and Investment Services segment excludes off-balance-sheet assets under management with a total fair value of $ 1.8 billion and $ 1.7 billion at September 30, 2025 and December 31 2024, respectively.

Total assets of each operating segment at September 30, 2025 and December 31, 2024 were as follows:

Total assets as of September 30, 2025

Total assets as of December 31, 2024

Information for the operating segments for the six- and three-month periods ended June 30, 2025 and 2024 is presented in the following tables:

Six Months Ended

June 30, 2025

Information for the operating segments for the nine- and three-month periods ended September 30, 2025 and 2024 is presented in the following tables:

Nine months ended

September 30, 2025

(in thousands)

27 unchanged sentences

Amortization of intangible assets

(1) Other segment income includes bank owned life insurance income, and miscellaneous income.

(2) Other segment expenses include professional services, contract labor, telephone, investor relations, contributions, net other real estate owned (“OREO”) expense/(income), and miscellaneous expenses.

Six Months Ended

June 30, 2024

(1) Other segment income includes bank owned life insurance income, gains on sales of investment securities available for sale, gains on disposals of fixed assets, and and miscellaneous income.

(2) Other segment expenses include professional services, contract labor, telephone, investor relations, contributions, net OREO expense/(income), and miscellaneous expenses.

Nine months ended

September 30, 2024

(in thousands)

29 unchanged sentences

(2) Other segment expenses include professional services, contract labor, telephone, investor relations, contributions, net OREO expense/(income), and miscellaneous expenses.

Three Months Ended

June 30, 2025

For the three months ended

September 30, 2025

(in thousands)

27 unchanged sentences

Amortization of intangible assets

(1) Other segment income includes bank owned life insurance income, and miscellaneous income.

(1) Other segment income includes bank owned life insurance income, gains on sales of investment securities available for sale, gains on disposals of fixed assets, and and miscellaneous income.

(2) Other segment expenses include professional services, contract labor, telephone, investor relations, contributions, net OREO expense/(income), and miscellaneous expenses.

Three Months Ended

June 30, 2024

For the three months ended

September 30, 2024

(in thousands)

30 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements