What changed in this filing

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Item 1. Financial Statements

2025-11-07 compared with 2025-08-08 · 310 added, 256 removed, 1171 unchanged (33% of the section changed)

3 unchanged sentences

Balance Sheets (unaudited)

September 30,

(In thousands, except share and per share data)

37 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30 ,

(In thousands, except per share data)

20 unchanged sentences

Bank owned life insurance income

Net securities gains (losses)

Net securities (losses) gains

Total noninterest income

18 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30 ,

(In thousands)

1 unchanged sentence

Securities available for sale:

Unrealized net holding gains (losses) arising during the period, gross

Unrealized net holding gains (losses) arising during the period, net

Unrealized net holding gains arising during the period, gross

Unrealized net holding gains arising during the period, net

Amortization of unrealized net gains for the reclassification of available for sale securities to held to maturity, gross

7 unchanged sentences

Total pension and other benefits, net

Total other comprehensive income (loss)

Total other comprehensive income

Comprehensive income

7 unchanged sentences

(Loss) Income

Balance at March 31, 2025

Balance at June 30, 2025

Cash dividends - $ 0.37

Issuance of 5,108,663 shares of common stock for acquisition

Net issuance of 71,367

3 unchanged sentences

Other comprehensive income

Balance at September 30 , 2025

Balance at June 30, 2024

Balance at March 31, 2024

Cash dividends - $ 0.34

Purchase of 5,700

treasury shares

Net issuance of 11,459

3 unchanged sentences

Other comprehensive income

Balance at June 30 , 2024

Balance at September 30 , 2024

(In thousands, except share and per share data)

8 unchanged sentences

Other comprehensive income

Balance at June 30 , 2025

Balance at September 30 , 2025

Balance at December 31, 2023

5 unchanged sentences

Stock-based compensation

Other comprehensive (loss)

Balance at June 30 , 2024

Other comprehensive income

Balance at September 30 , 2024

See accompanying notes to unaudited interim consolidated financial statements.

1 unchanged sentence

and Subsidiaries

Six Months Ended

Nine Months Ended

September 30,

(In thousands)

26 unchanged sentences

Proceeds from sales

Net increase in loans

Net decrease (increase) in loans

Proceeds from Federal Reserve and Federal Home Loan Bank stock redemption

7 unchanged sentences

Net decrease in short-term borrowings

Redemption of subordinated debt

Repayments of long-term debt

Proceeds from the issuance of shares to employee and other stock plans

Cash paid by employer for tax-withholding on stock issuance

8 unchanged sentences

Consolidated Statements of Cash Flows (unaudited) (continued)

Six Months Ended

Nine Months Ended

September 30,

Supplemental disclosure of cash flow information

12 unchanged sentences

Consolidated Financial Statements

June 30, 2025

September 30, 2025

Description of Business

70 unchanged sentences

Its primary subsidiary, Evans Bank, was a federally-chartered national banking association operating 18 banking locations in Western New York.

The acquisition enhances the Company’s presence in Western

New York, including the Buffalo and Rochester communities.

The acquisition enhances the Company’s

presence in Western New York, including the Buffalo and Rochester communities.

In connection with the acquisition, the Company issued 5.1

1 unchanged sentence

million of identifiable net assets.

Preliminary goodwill of $ 91.4 million was recognized as a result of the merger and is not amortizable or deductible for tax

The effects of the acquired assets and liabilities have been included in the consolidated financial statements since May 2, 2025.

As a result of the full integration of the operations of Evans, it is not practicable to determine all

revenue or net income included in the Company’s operating results relating to Evans since the date of acquisition as Evans results cannot be separately identified.

Preliminary goodwill of $ 91.4 million was recognized as a result of the merger and is not amortizable or deductible for tax purposes.

The effects of

the acquired assets and liabilities have been included in the consolidated financial statements since May 2, 2025.

As a result of the full integration of the operations of Evans, it is not practicable to determine all revenue or net income

included in the Company’s operating results relating to Evans since the date of acquisition as Evans results cannot be separately identified.

The acquisition of Evans is being accounted for as a business combination in

26 unchanged sentences

Total identifiable assets, net

The following is a description of the valuation methodologies used to estimate the fair values of major categories of assets acquired and liabilities assumed.

The Company used an independent valuation specialist to assist with the determination

of fair values for certain acquired assets and assumed liabilities.

The following is a description of the

valuation methodologies used to estimate the fair values of major categories of assets acquired and liabilities assumed.

The Company used an independent valuation specialist to assist with the determination of fair values for certain acquired

assets and assumed liabilities.

Cash and due from banks - The estimated fair value was determined to

33 unchanged sentences

The allowance for credit losses on non-PCD loans of $ 13.0 million was recorded through the provision for loan losses within the unaudited interim consolidated statements of income.

The following table provides details related to the fair value of acquired PCD

The following table provides details related to the fair value

of acquired PCD loans.

(In thousand s)

4 unchanged sentences

Direct costs related to the acquisition were expensed as incurred.

integration-related expenses were $ 17.2 million and $ 18.4 million during the three and six months ended June 30, 2025 , respectively.

These amounts have been separately stated in the unaudited interim

consolidated statements of income and are included in operating activities in the unaudited interim consolidated statements of cash flow.

integration-related expenses were $ 1.1 million and $ 19.5 million during the three and nine months ended September 30, 2025 , respectively.

These amounts have been separately stated in the unaudited interim consolidated statements of

income and are included in operating activities in the unaudited interim consolidated statements of cash flow.

Supplemental Pro Forma Financial Information (Unaudited)

The following table presents certain unaudited pro forma financial information

for illustrative purposes only, for the three and six

months ended June 30, 2025 and 2024, as if Evans had been acquired on January 1, 2024.

for illustrative purposes only, for the three and nine

months ended September 30, 2025 and 2024, as if Evans had been acquired on January 1, 2024.

This unaudited pro forma information combines the historical results of Evans with the Company’s consolidated historical results and includes certain adjustments

reflecting the estimated impact of certain fair value adjustments for the respective periods.

The pro forma information is not indicative of what would have occurred had the acquisition occurred as of the beginning of the year prior to the

The pro forma information is not indicative of what would have occurred had the acquisition taken place at the beginning of the year prior to the

The unaudited pro forma information does not consider any changes to the provision expense resulting from recording loan assets at fair value, cost savings or business synergies.

4 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

(In thousand s,)

2 unchanged sentences

In November 2024, the Company, through its subsidiary, NBT Bank, National Association, completed its acquisition of certain assets of PACO, Inc., a third -party administration business based in West Des Moines, Iowa for a total consideration of $ 3.3 million .

As part of the acquisition the Company recorded goodwill of $ 0.7 million and $ 2.9 million contingent considerations recorded in other

As part of the acquisition, the Company recorded goodwill of $ 0.7 million and a $ 2.9 million contingent considerations recorded in other

liabilities on the consolidated balance sheets as of December 31, 2024.

12 unchanged sentences

(In thousands)

As of June 30 , 2025

As of September 30 , 2025

Federal agency

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There was no allowance for credit losses on AFS

securities as of June 30, 2025 and December 31, 2024.

During the three and six months ended June 30, 2025, there were no gains or losses reclassified out of accumulated other comprehensive income (loss) (“AOCI”) and into earnings.

During the three months ended June 30, 2024, there were no gains or losses reclassified out of AOCI and into earnings.

During the six months ended June 30, 2024, the Company sold a previously written-off

security and recognized a gain of $ 2.3 million into earnings in net securities gains (losses) in the unaudited interim consolidated

statements of income.

securities as of September 30, 2025 and December 31, 2024.

During the three and nine months ended September

30, 2025, there were no gains or losses reclassified out of accumulated other comprehensive income (loss) (“AOCI”) and into

During the three months ended September 30, 2024, there were no gains or losses reclassified out of AOCI and into earnings.

During the nine months ended September

30, 2024, the Company sold a previously written-off security and recognized a gain of $ 2.3 million into earnings in net securities gains

(losses) in the unaudited interim consolidated statements of income.

The amortized cost, estimated fair value and unrealized gains (losses) of HTM securities are as

(In thousands)

As of June 30 , 2025

As of September 30 , 2025

Federal agency

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Total HTM securities

At June 30, 2025 and

December 31, 2024, all of the mortgaged-backed HTM securities were comprised of U.S.

At September 30, 2025 and

December 31, 2024, all of the mortgage-backed HTM securities were comprised of U.S.

government agency and government-sponsored enterprises securities.

The Company recorded no gains from calls on HTM securities for the three and six months ended June 30, 2025 and 2024.

The Company recorded no gains from calls on HTM securities for the three and nine months ended September 30, 2025 and 2024.

AFS and HTM securities with amortized costs totaling $ 1.82

billion at June 30, 2025

billion at September 30,

2025 and $ 1.60 billion at December 31, 2024, were pledged to secure public deposits and for other purposes required or permitted by law.

Additionally, at June 30, 2025 and December 31, 2024, AFS and HTM securities with an amortized cost of $ 219.5 million and $ 234.2 million, respectively, were pledged as collateral for securities sold under repurchase agreements.

Additionally, at September 30, 2025 and December 31, 2024, AFS and HTM securities with an amortized cost of $ 213.2 million and $ 234.2 million, respectively, were pledged as collateral for securities sold under repurchase agreements.

The following tables set forth information with regard to gains and (losses) on equity securities:

Three Months Ended June 30,

Three Months Ended September 30,

(In thousands)

Net gains (losses) recognized on equity securities

Net gains (losses) recognized on equity securities sold during the period

Unrealized gains (losses) recognized on equity securities still held

Six Months Ended June 30,

Net (losses) gains recognized on equity securities

Net (losses) gains recognized on equity securities sold during the period

Unrealized (losses) gains recognized on equity securities still held

Nine Months Ended September 30,

(In thousands)

2 unchanged sentences

Unrealized gains (losses) recognized on equity securities still held

As of June 30, 2025 and December 31, 2024, the carrying value of equity securities without readily

determinable fair values was $ 1.0 million.

The Company performed a qualitative assessment to determine whether the investments were

impaired and identified no areas of credit concern as of June 30, 2025 and 2024.

There were no impairments, or downward or upward

adjustments recognized for equity securities without readily determinable fair values during the three and six months ended June 30, 2025 and 2024.

The following table sets forth information with regard to contractual maturities of debt securities at June 30, 2025:

As of September 30, 2025 and December 31, 2024, the carrying value of equity securities without

readily determinable fair values was $ 1.0 million.

The Company performed a qualitative assessment to determine whether the investments

were impaired and identified no areas of credit concern as of September 30, 2025 and 2024.

There were no impairments, or downward or

upward adjustments recognized for equity securities without readily determinable fair values during the three and nine months ended September 30, 2025 and 2024.

The following table sets forth information with regard to contractual maturities of debt securities at September 30, 2025:

(In thousands)

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Except for U.S.

government securities and government-sponsored enterprises securities , there were no holdings, when taken in the aggregate, of any single issuer that exceeded 10% of consolidated stockholders’ equity at June 30, 2025 and December

December 31, 2024.

The following table sets forth information with regard to investment securities with unrealized losses, for which an allowance for credit losses has not been recorded,

3 unchanged sentences

(In thousands)

As of June 30 , 2025

As of September 30 , 2025

AFS securities:

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Total securities with unrealized losses

The Company does not believe the AFS securities that were in an unrealized loss position as of June 30, 2025 and December 31, 2024, which consisted of 377 and 401 individual securities,

The Company does not believe the AFS securities that were in an unrealized loss position as of September 30, 2025 and December 31, 2024, which consisted of 359 and 401 individual securities,

respectively, represented a credit loss impairment.

AFS debt securities in unrealized loss positions are evaluated for impairment related to credit losses at least quarterly.

As of June 30, 2025 and December 31, 2024, the majority of the AFS

As of September 30, 2025 and December 31, 2024, the majority of the AFS

securities in an unrealized loss position consisted of debt securities issued by U.S.

9 unchanged sentences

AIR on AFS debt securities totaled $ 4.7

million and $ 4.4 million at June 30, 2025 and December 31, 2024, respectively, and is excluded from the estimate of credit losses and

million and $ 4.4 million at September 30, 2025 and December 31, 2024, respectively, and is excluded from the estimate of credit losses and

reported in the other assets financial statement line.

None of the Bank’s HTM debt securities were past due

or on nonaccrual status as of June 30, 2025 and December 31, 2024.

There was no accrued interest reversed against interest income for

the three and six months ended June 30, 2025 or the year ended December 31, 2024 as all securities remained in accrual status.

In addition, there were no

collateral-dependent HTM debt securities as of June 30, 2025 and December 31, 2024.

There was no allowance for credit losses on HTM

securities as of June 30, 2025 and December 31, 2024.

As of June 30, 2025 and December 31, 2024, 66 % of the Company’s HTM debt

securities were issued by U.S.

or on nonaccrual status as of September 30, 2025 and December 31, 2024.

There was no accrued interest reversed against interest income

for the three and nine months ended September 30, 2025 or the year ended December 31, 2024 as all securities remained in accrual status.

In addition, there were no collateral-dependent HTM debt securities as of September 30, 2025 and December 31, 2024.

allowance for credit losses on HTM securities as of September 30, 2025 and December 31, 2024.

As of September 30, 2025 and December 31, 2024, 66 %

of the Company’s HTM debt securities were issued by U.S.

government agencies or U.S.

1 unchanged sentence

These securities carry the explicit and/or implicit guarantee of the U.S.

government, which are widely recognized as

“risk-free” and have a long history of zero credit losses.

Therefore, the Company did not record an allowance for credit losses for these securities as of June 30, 2025 and December 31, 2024.

The remaining HTM debt securities at June 30, 2025 and

December 31, 2024 were comprised of state and municipal obligations with bond ratings of A to AAA excluding the $ 89.1 million and $ 84.7 million, respectively, of local municipal bonds which are not rated.

Based on the Company’s current expected credit losses (“CECL”) methodology, the

expected credit loss on the HTM municipal bond portfolio was deemed immaterial, therefore no allowance for credit loss was recorded as of June 30, 2025 and December 31, 2024.

AIR on HTM debt securities totaled $ 4.4 million at June 30, 2025 and December 31, 2024 and is excluded from the estimate of credit losses and reported in the other assets financial statement line.

government, which are

widely recognized as “risk-free” and have a long history of zero credit losses.

Therefore, the Company did not record an allowance for credit losses for these securities as of September 30, 2025 and December 31, 2024.

The remaining HTM debt

securities at September 30, 2025 and December 31, 2024 were comprised of state and municipal obligations with bond ratings of A to AAA excluding the $ 79.2

million and $ 84.7 million, respectively, of local municipal bonds which are not rated.

Based on the Company’s current expected credit

losses (“CECL”) methodology, the expected credit loss on the HTM municipal bond portfolio was deemed immaterial, therefore no allowance for credit loss was recorded as of September 30, 2025 and December 31, 2024.

AIR on HTM debt securities totaled $ 3.6 million at September 30, 2025 and $ 4.4

million at December 31, 2024 and is excluded from the estimate of credit losses and reported in the other assets financial statement

A summary of loans, net of deferred fees and origination costs, by category (1) is as follows:

(In thousands)

June 30, 2025

September 30, 2025

December 31, 2024

1 unchanged sentence

Commercial real estate

Residential real estate

Residential mortgage

Indirect auto

4 unchanged sentences

$( 41.7 ) million and $( 64.7 )

million at June 30, 2025 and December 31, 2024, respectively.

million at September 30, 2025 and December 31, 2024, respectively.

Allowance for Credit Losses and Credit Quality of Loans

The allowance for credit losses totaled $ 139.0 million

at June 30, 2025, compared to $ 116.0 million at December 31, 2024.

The allowance for credit losses as a percentage of loans was 1.21 % at June 30, 2025, compared to 1.16 %

at September 30, 2025, compared to $ 116.0 million at December 31, 2024.

The allowance for credit losses as a percentage of loans was 1.20 % at September 30, 2025, compared to 1.16 %

at December 31, 2024.

3 unchanged sentences

The Company considers a baseline, upside and downside economic forecast in measuring the allowance.

During the second quarter of 2025, the Company

Starting in the second quarter of 2025, the Company

included an additional downside scenario with stagflation conditions, which is characterized as an economic environment where inflation rises alongside unemployment.

Stagflation was identified as an emerging risk as tariff policies begin to

impact the economy .

The quantitative model as of June 30, 2025 incorporated a baseline economic outlook along with an alternative upside scenario and two equally

weighted downside scenarios, recessionary conditions and stagflation, sourced from a reputable third-party to accommodate other potential economic conditions in the model.

At June 30, 2025, the weightings were 70%, 5% and 25% for the baseline,

upside and downside economic forecast scenarios, respectively.

Stagflation was identified as an emerging risk as tariff policies impact the

The quantitative model as of September 30, 2025 incorporated a baseline economic outlook along with an alternative upside scenario and two equally weighted downside scenarios,

recessionary conditions and stagflation, sourced from a reputable third-party to accommodate other potential economic conditions in the model.

At September 30, 2025, the weightings were 65%, 5% and 30% for the baseline, upside and downside

economic forecast scenarios, respectively.

The baseline outlook reflected an economic environment where the Northeast unemployment rate increases from 4.4% in the fourth quarter of 2025 to 4.8% by the end of the forecast period, with a peak

Northeast unemployment rate of 4.9% in the fourth quarter of 2026.

National Gross Domestic Product (“GDP’s”) annualized growth (on a quarterly basis) is expected to start the fourth quarter of 2025 at approximately 0.8% and increase to 1.7%

by the end of the forecast period.

Key assumptions in the baseline economic outlook included the Federal Reserve cutting rates with two 25 basis point cuts at the September and December meetings and the economy remaining at full employment.

The alternative upside scenario assumes improved economic conditions from the baseline outlook.

Under this scenario, Northeast unemployment falls from 4.3% in the third quarter of 2025 to 3.8% in the first quarter of 2026 and eventually

settles at 4.1% by the end of the forecast period.

The alternative downside scenario with recessionary conditions assumes deteriorated economic conditions from the baseline outlook.

Under this scenario, Northeast unemployment rises from 4.3%

in the third quarter of 2025 to a peak of 7.8% in the fourth quarter of 2026.

The alternative downside stagflation scenario assumes deteriorated economic conditions from the baseline outlook.

Under this scenario, Northeast unemployment rises

from 4.3% in the third quarter of 2025 to 6% by the end of the forecast period in the first quarter of 2027, with a peak Northeast unemployment rate of 8.2% in the fourth quarter of 2027.

These scenarios and their respective weightings are

evaluated at each measurement date and reflect management’s expectations as of September 30, 2025.

Additional qualitative adjustments were made for factors not incorporated in the forecasts or the model, such as loss rate expectations for

certain loan pools, reversion adjustments for the stagflation scenario and recent trends in asset value indices.

Additional monitoring for industry concentrations, loan growth and policy exceptions was also conducted.

The quantitative model as of June 30, 2025 incorporated a baseline economic outlook along with an alternative upside scenario and two equally weighted downside scenarios, recessionary conditions

and stagflation, sourced from a reputable third-party to accommodate other potential economic conditions in the model.

At June 30, 2025, the weightings were 70%, 5% and 25% for the baseline, upside and downside economic forecast scenarios,

respectively.

The baseline outlook reflected an economic environment where the Northeast unemployment rate increases from 4.3% to 4.8% during the forecast period.

National Gross Domestic Product

(“GDP’s”) annualized growth (on a quarterly basis) is expected to start the third quarter of 2025 at approximately 0.6% and increase to 1.6% by the end of the forecast period.

Key assumptions in the baseline economic outlook included the

Federal Reserve cutting rates with two 25 basis point cuts at the September and December meetings and the economy remaining at full employment.

National GDP’s annualized growth (on a quarterly basis) is expected to start

the third quarter of 2025 at approximately 0.6% and increase to 1.6% by the end of the forecast period.

Key assumptions in the baseline economic outlook included the Federal Reserve cutting rates with two 25 basis point cuts at the

September and December meetings and the economy remaining at full employment.

The alternative upside scenario assumes improved economic conditions from the baseline outlook.

Under this scenario, Northeast unemployment falls from 4.3% in the second quarter of 2025 to 3.7% in the fourth quarter of 2025 and eventually settles at 4.1% by the end of the forecast period.

The alternative downside scenario with

recessionary conditions assumes deteriorated economic conditions from the baseline outlook.

Under this scenario, Northeast unemployment falls from 4.3% in the

second quarter of 2025 to 3.7% in the fourth quarter of 2025 and eventually settles at 4.1% by the end of the forecast period.

The alternative downside scenario with recessionary conditions assumes deteriorated economic conditions from the

baseline outlook.

Under this scenario, Northeast unemployment rises from 4.3% in the second quarter of 2025 to a peak of 7.7% in the third quarter of 2026.

alternative downside stagflation scenario assumes deteriorated economic conditions from the baseline outlook.

Under this scenario, Northeast unemployment rises from 4.3% in the second quarter of 2025 to 5.8% by the end of the forecast period in

the fourth quarter of 2026, with a peak Northeast unemployment rate of 8.1% in the third quarter of 2027.

The alternative downside stagflation scenario assumes deteriorated economic

conditions from the baseline outlook.

Under this scenario, Northeast unemployment rises from 4.3% in the second quarter of 2025 to 5.8% by the end of the forecast period in the fourth quarter of 2026, with a peak Northeast unemployment rate

of 8.1% in the third quarter of 2027.

These scenarios and their respective weightings are evaluated at each measurement date and reflect management’s expectations as of June 30, 2025.

Additional qualitative adjustments were made for factors not incorporated in the forecasts or the model, such as loss rate expectations for certain loan pools, reversion adjustments for the stagflation scenario and recent trends in

asset value indices.

Additional monitoring for industry concentrations, loan growth and policy exceptions was also conducted.

The quantitative model as of March 31, 2025 incorporated a baseline economic outlook along with an alternative downside scenario sourced from a reputable third-party

to accommodate other potential economic conditions in the model.

At March 31, 2025, the weightings were 75% and 25% for the baseline and downside economic forecasts, respectively.

The baseline outlook reflected an economic environment where

the unemployment rate increases from 4.1% to 4.4% during the forecast period.

Northeast GDP’s annualized growth (on a quarterly basis) is expected to start the second quarter of 2025 at approximately 5% and decrease to 3.9% before

increasing to 4.1% by the end of the forecast period.

Key assumptions in the baseline economic outlook included the Federal Reserve cutting rates with two 25 basis point cuts at the September and December meetings and the economy remaining

at full employment.

The alternative downside scenario assumed deteriorated economic conditions from the baseline outlook.

Under this scenario, national unemployment rises from 4.1% in the first quarter of 2025 to a peak of 7.6% in the

second quarter of 2026.

These scenarios and their respective weightings are evaluated at each measurement date and reflect management’s expectations as of March 31, 2025.

Additional qualitative adjustments were made for factors not

incorporated in the forecasts or the model, such as loss rate expectations for certain loan pools and recent trends in asset value indices.

Additional monitoring for industry concentrations, loan growth and policy exceptions was also

During the first quarter of 2025, the Company performed an annual update to its econometric, PD/LGD models.

Segment specific, multi-variate

regression model inputs and assumptions were updated and recent period observed losses and behavior were incorporated into the models (“model refreshment”).

The incorporation of recent observations did not have a material impact on most loan

class segments except for the Auto class segment which resulted in an improvement in PD/LGD outcomes.

The total allowance decreased by approximately 3% as of March 31, 2025 due to the model refreshment.

Additional qualitative adjustments were made for factors

not incorporated in the forecasts or the model, such as loss rate expectations for certain loan pools, reversion adjustments for the stagflation scenario and recent trends in asset value indices.

Additional monitoring for industry

concentrations, loan growth and policy exceptions was also conducted.

The quantitative model as of December 31, 2024 incorporated a baseline

15 unchanged sentences

Additional monitoring for industry concentrations, loan growth and policy exceptions was also conducted.

There were $ 336.4 million of PCD loans acquired

from Evans during the three and six months ended June 30, 2025 which resulted in an allowance for credit losses at acquisition of $ 7.7

There were $ 336.4 million of PCD loans acquired from

Evans during the nine months ended September 30, 2025 which resulted in an allowance for credit losses at acquisition of $ 7.7

There were no loans purchased with credit deterioration during the year ended December 31, 2024.

During the six months

ended June 30, 2025, the Company purchased $ 5.4 million of residential loans at a 4.4 % premium with a $ 58 thousand allowance for credit losses

During the nine months

ended September 30, 2025, the Company purchased $ 13.2 million of residential loans at a 4.7 % premium with a $ 145 thousand allowance for credit losses

recorded for these loans.

2 unchanged sentences

The Company made a policy election to report AIR in the other assets line item on the consolidated balance sheets.

AIR on loans totaled $ 41.2 million at June 30, 2025 and $ 34.8 million at December 31, 2024 and

with no estimated allowance for credit losses related to AIR as of June 30, 2025 and December 31, 2024 as it is excluded from amortized cost.

AIR on loans totaled $ 41.8 million at September 30, 2025 and $ 34.8 million at December 31, 2024

and with no estimated allowance for credit losses related to AIR as of September 30, 2025 and December 31, 2024 as it is excluded from amortized cost.

The following tables present the activity in the allowance for credit losses by our portfolio segments:

(In thousands)

Balance as of March 31, 2025

Allowance for credit loss on PCD acquired loans

Ending balance as of June 30, 2025

Balance as of March 31, 2024

Ending balance as of June 30 , 2024

Balance as of June 30, 2025

Ending balance as of September 30, 2025

Balance as of June 30, 2024

Ending balance as of September 30 , 2024

(In thousands)

1 unchanged sentence

Allowance for credit loss on PCD acquired loans

Ending balance as of June 30 , 2025

Ending balance as of September 30 , 2025

Balance as of December 31 , 2023

Ending balance as of June 30 , 2024

The allowance for credit losses as of June 30, 2025 increased compared to the allowance estimates as of December 31, 2024 and June 30, 2024 primarily due to the

recording of $ 20.7 million of allowance for acquired Evans loans as of the acquisition date, which included both the $ 13.0 million of non-PCD allowance recognized through the provision for loan losses and the $ 7.7 million of PCD allowance reclassified from loans.

Ending balance as of September 30 , 2024

The allowance for credit losses as of September 30, 2025 increased compared to the allowance estimates as of December 31, 2024 and September 30, 2024 primarily

due to the recording of $ 20.7 million of allowance for acquired Evans loans as of the acquisition date, which included both the $ 13.0 million of non-PCD allowance recognized through the provision for loan losses and the $ 7.7 million of PCD allowance reclassified from loans.

In addition, the allowance for credit losses increased due to deterioration in the economic forecast including the change in the

forecast scenarios and weightings, partially offset by model refreshment and the shift in loan composition driven by other consumer and residential solar portfolios that are in a planned run-off status.

The allowance for credit losses decreased

slightly compared to the allowance estimates as of June 30, 2025 primarily due to a decrease in loan balances partially offset by the change in the forecast scenarios weightings.

Individually Evaluated Loans

1 unchanged sentence

nonperforming loans specifically evaluated for individual credit loss is $ 1.0 million.

As of June 30, 2025, six newly acquired relationships from Evans were identified for individual credit loss evaluation which had an amortized cost basis of $ 14.3 million.

These relationships were in nonaccrual status with no allowance for credit loss.

As of December 31, 2024, three relationships were identified for

individual credit loss evaluation, had an amortized cost basis of $ 28.8 millio n and were in nonaccrual status with no

allowance for credit loss.

The decrease in the amortized cost basis of individually evaluated loans from December 31, 2024 to June 30, 2025 was primarily attributed to the three relationships resolving through payoff or transfer to other assets in the second quarter of 2025, partially offset by the addition of the

previously mentioned six newly acquired relationships from Evans which had and amortized cost basis of $ 14.3 million.

As of September 30, 2025, seven relationships with an amortized cost basis of $ 16.0

million, including six acquired relationships from Evans, were identified for individual credit loss evaluation.

These relationships

were in nonaccrual status with no allowance for credit loss.

As of December 31, 2024, three relationships were identified for individual credit loss evaluation, had an amortized cost basis of $ 28.8 millio n and were

in nonaccrual status with no allowance for credit loss.

decrease in the amortized cost basis of individually evaluated loans from December 31, 2024 to September 30, 2025 was primarily attributed to the three

relationships resolving through payoff or transfer to other assets in the second quarter of 2025, partially offset by the addition of the previously mentioned six acquired relationships from Evans which had an amortized cost basis of $ 13.9

The following table sets forth information with regard to past due and nonperforming loans by loan segment:

(In thousands)

As of June 30 , 2025

As of September 30 , 2025

Commercial loans:

16 unchanged sentences

The internal grading system enables the Company to

monitor the quality of the entire loan portfolio on a consistent basis and provide management with an early warning system, which facilitates recognition and response to problem loans and potential problem loans.

monitor the quality of the entire loan portfolio on a consistent basis and provide management with an early warning system, which facilitates recognition of and response to problem loans and potential problem loans.

Commercial Grading System

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The following tables illustrate the Company’s credit quality by loan class by vintage and includes gross charge-offs by loan class by vintage.

Included in other consumer gross charge-offs for the six months ended June 30, 2025, the Company

recorded $ 0.3 million in overdrawn deposit accounts reported as 2024 originations and $ 0.2 million in overdrawn deposit accounts reported as 2025 originations.

Included in other consumer gross charge-offs for the nine months ended September 30, 2025, the

Company recorded $ 0.3 million in overdrawn deposit accounts reported as 2024 originations and $ 0.5 million in overdrawn deposit accounts reported as 2025 originations.

Included in other consumer gross charge-offs for the year ended December 31, 2024, the Company

1 unchanged sentence

(In thousands)

As of June 30 , 2025

As of September 30 , 2025

By internally assigned grade:

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The allowance for

credit losses on unfunded commitments totaled $ 6.2 million as of June 30, 2025, compared to $ 4.4 million as of December 31, 2024.

The reserve for unfunded loan commitments was $ 1.7

million for the three months ended June 30, 2025, compared to $( 0.4 ) million for the three months ended June 30, 2024 and was recorded

within other noninterest expense in the unaudited interim consolidated statements of income.

The reserve for unfunded loan commitments was $ 1.8

million for the six months ended June 30, 2025, compared to $( 0.8 ) million for the six months ended June 30, 2024, and was recorded

within other noninterest expense in the unaudited interim consolidated statements of income.

Included in the reserve for unfunded loan commitments for the three and six months ended June 30, 2025, was $ 0.5 million of acquisition-related provision for unfunded loan commitments due to the Evans acquisition.

The increase is primarily related to increases in pipeline exposure

and the Evans acquisition.

credit losses on unfunded commitments totaled $ 5.9 million as of September 30, 2025, compared to $ 4.4 million as of December 31, 2024.

The reserve for unfunded loan commitments was $( 0.3 ) million for the three months ended September 30, 2025, compared to $ 0.3

million for the three months ended September 30, 2024 and was recorded within other noninterest expense in the unaudited interim consolidated statements of income.

The reserve for unfunded loan commitments was $ 1.5 million for the nine months ended September 30, 2025, compared to $( 0.6 ) million for the nine months ended September 30, 2024, and was recorded within other noninterest expense in the unaudited interim consolidated statements of income.

Included in the

reserve for unfunded loan commitments for the nine months ended September 30, 2025, was $ 0.5 million of acquisition-related provision for

unfunded loan commitments due to the Evans acquisition.

The increase for the nine months ended September 30, 2025 is primarily related to increases in pipeline exposure and the Evans acquisition.

Loan Modifications to Borrowers Experiencing Financial Difficulties

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disaggregated by class of financing receivable and type of concession granted:

Three Months Ended June 30, 2025

Three Months Ended September 30, 2025

Term Extension

Combination - Term

Extension and Interest Rate

(Dollars in thousands)

% of Total Class

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Term Extension

Interest Rate

Combination - Term

Extension and Interest Rate

(Dollars in thousands)

1 unchanged sentence

% of Total Class

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

Term Extension

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% of Total Class

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Term Extension

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to borrowers experiencing financial difficulties:

Three Months Ended June 30, 2025

Three Months Ended September 30, 2025

Term Extension

Interest Rate Reduction

Added a weighted-average 1.6 years to the life of loans, which reduced

monthly payment amounts for the borrowers

Interest Rates were reduced by an average of 0.62 %

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Term Extension

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Interest Rates were reduced by an average of 0.25 %

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

Term Extension

3 unchanged sentences

Interest Rates were reduced by an average of 0.62 %

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Term Extension

3 unchanged sentences

Interest Rates were reduced by an average of 0.63 %

The following tables depict the financing

receivables that had a payment default that were modified to borrowers experiencing financial difficulty in the prior twelve months:

Amortized Cost Basis of Modified Financing Receivables that Subsequently Defaulted

Three Months Ended June 30,

(In thousand s)

Amortized Cost Basis of Modified Financing Receivables that Subsequently Defaulted

Six Months Ended June 30,

(In thousand s)

There were no financing receivables that had a payment default during the three months ended September 30, 2025 and 2024, that were modified to

borrowers experiencing financial difficulty in the twelve months prior to the default.

During the nine months ended September 30, 2025 and 2024 there were $ 59 thousand and $ 171 thousand, respectively, of Residential

financing receivables with term extension modifications that had payment defaults during the period, that were modified to borrowers experiencing financial difficulty in the twelve months prior to the default.

The following table depicts the performance of loans that have been modified to borrowers experiencing financial difficulty that were modified in

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Days Past Due

As of June 30, 2025

As of September 30, 2025

Payment Status (Amortized Cost Basis)

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Days Past Due

As of June 30, 2024

Short-Term Borrowings

As of September 30, 2024

addition to the liquidity provided by balance sheet cash flows, liquidity must also be supplemented with additional sources such as credit lines from correspondent banks as well as borrowings from the Federal Home Loan Bank (“FHLB”) and the

4 unchanged sentences

(In thousands)

June 30, 2025

September 30, 2025

December 31, 2024

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Note 5 for additional information regarding securities pledged as collateral for securities sold under the repurchase agreements.

Subordinated Debt

On June 23, 2020, the Company issued $ 100.0 million

aggregate principal amount of 5.00 % fixed-to-floating rate subordinated notes due 2030.

The subordinated notes, which qualified as

Tier 2 capital, bore interest at an annual rate of 5.00 %, payable semi-annually in arrears commencing on January 1, 2021, and a

floating rate of interest equivalent to the three-month Secured Overnight Financing Rate (“ SOFR ”) plus a spread of 4.85 %, payable quarterly in arrears

commencing on October 1, 2025.

The subordinated notes issuance costs of $ 2.2 million were amortized on a straight-line basis into

interest expense over five years .

The subordinated notes were redeemable (1) in whole or in part beginning with the interest payment date of July 1, 2025, and on any interest payment date

thereafter or (2) in whole but not in part upon the occurrence of a “Tax Event”, a “Tier 2 Capital Event” or in the event the Company was required to register as an investment company pursuant to the Investment Company Act of 1940, as amended.

The redemption price for any redemption was 100 % of the principal amount of the subordinated notes being redeemed, plus accrued and

unpaid interest thereon to, but excluding, the date of redemption.

Any redemption of the subordinated notes was subject to the receipt of the approval of the Board of Governors of the Federal Reserve System to the extent required under

applicable laws or regulations, including capital regulations.

The Company repurchased $ 2.0 million of the subordinated notes during

the year ended December 31, 2022 at a discount of $ 0.1 million.

On July 1, 2025, the Company redeemed these subordinated notes in

full using existing liquidity sources.

The subordinated notes assumed in connection with the Salisbury acquisition included $ 25.0 million of 3.50 % fixed-to-floating rate subordinated

notes due 2031.

The subordinated notes, which qualified as Tier 2 capital, have a maturity date of March 31, 2031 and bore interest at an annual rate of 3.50 %, payable quarterly in arrears commencing on June 30, 2021, and a floating rate of interest equivalent to the three-month

SOFR plus a spread of 2.80 %,

payable quarterly in arrears commencing on June 30, 2026.

The subordinated notes are redeemable, without penalty, on or after March 31, 2026 and, in certain limited circumstances, prior to that date.

As of the acquisition date, the fair value

discount was $ 3.0 million.

Subordinated notes assumed in connection with the Evans acquisition included $ 20.0 million of 6.00 % fixed-to-floating rate subordinated notes due 2030.

The subordinated notes,

which qualified as Tier 2 capital, bore interest at an annual rate of 6.00 %, payable semi-annually in arrears commencing on January

15, 2021, and a floating rate of interest equivalent to the three-month SOFR plus a spread of 5.90 %, payable quarterly in arrears

commencing on July 15, 2025.

On July 15, 2025, the Company redeemed these subordinated notes in full using existing liquidity sources.

The following table summarizes the Company’s subordinated debt:

(Dollars in thousands)

September 30, 2025

December 31, 2024

Subordinated notes issued June 2020 - fixed interest rate of 5.00 %

through June 2025 and a variable interest rate equivalent to three-month SOFR plus 4.85 % thereafter, maturing July 1, 2030

Subordinated notes issued March 2021 and acquired August 2023 - fixed interest rate of 3.50 % through June 2026 and a variable interest rate equivalent to three-month

SOFR plus 2.80 % thereafter, maturing March 31, 2031

Subtotal subordinated notes

Unamortized debt issuance costs and unamortized fair value discount

Total subordinated debt, net

Defined Benefit Post-Retirement Plans

Company has a qualified, noncontributory, defined benefit pension plan (the “Plan”) covering substantially all of its employees at June 30, 2025.

Benefits paid from the Plan are based on age, years of service, compensation and social security

benefits and are determined in accordance with defined formulas.

Company has a qualified, noncontributory, defined benefit pension plan (the “Plan”) covering substantially all of its employees at September 30, 2025.

Benefits paid from the Plan are based on age, years of service, compensation and social

security benefits and are determined in accordance with defined formulas.

The Company’s policy is to fund the Plan in accordance with Employee Retirement Income Security Act of 1974 standards.

Assets of the Plan are invested in publicly traded stocks,

bonds and mutual funds.

Assets of the Plan are invested in publicly traded

stocks, bonds and mutual funds.

In addition to the Plan, the Company provides supplemental employee retirement plans to certain current and former executives.

These supplemental employee retirement plans and the Plan are collectively referred to herein

as “Pension Benefits.”

These supplemental employee retirement plans and the Plan are collectively referred to

herein as “Pension Benefits.”

In addition, the Company provides certain health care benefits for retired

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The Company made no voluntary contributions to the

Pension Benefits and Other Benefits plans during the three and six months ended June 30, 2025 and 2024.

Pension Benefits and Other Benefits plans during the three and nine months ended September 30, 2025 and 2024.

The components of expense for Pension Benefits and Other Benefits are set forth below:

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Other Benefits

Three Months Ended June 30,

Three Months Ended September 30,

(In thousands)

6 unchanged sentences

Other Benefits

Six Months Ended June 30,

Nine Months Ended September 30,

(In thousands)

13 unchanged sentences

Three Months Ended

September 30,

(In thousands, except per share data)

5 unchanged sentences

Net income available to common stockholders

Anti-dilutive stock options and restricted stock outstanding

Six Months Ended

Nine Months Ended

September 30,

(In thousands, except per share data)

5 unchanged sentences

Net income available to common stockholders

Anti-dilutive stock options and restricted stock outstanding

There was a nominal number of anti-dilutive

stock options and restricted stock outstanding for the nine months ended September 30, 2024, that were not considered in the calculation of diluted EPS.

Reclassification Adjustments Out of Other Comprehensive Income (Loss)

7 unchanged sentences

(In thousands)

June 30, 2025

June 30, 2024

September 30, 2025

September 30, 2024

AFS securities:

14 unchanged sentences

Comprehensive Income (Loss)

Six Months Ended

Nine Months Ended

(In thousands)

June 30, 2025

June 30, 2024

September 30, 2025

September 30, 2024

AFS securities:

40 unchanged sentences

As a result, the total fair values of loan level derivative assets and liabilities recognized on the Company’s financial statements are not equal and offsetting.

As of June 30, 2025 and December 31, 2024, the Company had twenty one and twenty-one participation agreements, respectively, with financial institution counterparties for interest rate swaps related to participated loans.

Risk participation agreements provide credit protection to the

financial institution that originated the swap transaction should the borrower fail to perform on its obligation.

The Company enters into both risk participation agreements in which it purchases credit protection from other financial institutions

and those in which it provides credit protection to other financial institutions.

As of September 30, 2025 and December 31, 2024, the Company had twenty-two and twenty participation agreements, respectively, with financial institution counterparties for interest rate swaps related to participated loans.

Risk participation agreements provide credit

protection to the financial institution that originated the swap transaction should the borrower fail to perform on its obligation.

The Company enters into both risk participation agreements in which it purchases credit protection from other

financial institutions and those in which it provides credit protection to other financial institutions.

T he following table summarizes the derivatives outstanding:

(In thousands)

As of June 30 , 2025

As of September 30 , 2025

Derivatives not designated as hedging instruments

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Net derivative amounts

Netting adjustments represents the

Netting adjustments represent the

amounts recorded to convert derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance on the settle to market rules for cleared derivatives.

The CME legally characterizes the

variation margin posted between counterparties as settlements of the outstanding derivative contracts instead of cash collatral .

variation margin posted between counterparties as settlements of the outstanding derivative contracts instead of cash collateral .

Cash collateral represents the amount that cannot be used to offset our

7 unchanged sentences

derivatives not designated as a hedging relationship:

Three Months Ended June 30,

Months Ended June 30,

Three Months Ended September 30,

Months Ended September 30,

(In thousands)

Derivatives not designated as hedging instruments:

(Decrease) increase in other income

Increase in other income

Fair Value Measurements and Fair Value of Financial Instruments

45 unchanged sentences

(In thousands)

June 30, 2025

September 30, 2025

AFS securities:

16 unchanged sentences

for expected credit losses and HTM securities.

Loans with fair value of $ 14.3 million as of June 30, 2025 were individually evaluated for

expected credit losses where the amortized cost was adjusted to fair value.

Loans with fair value of $ 28.8 million as of December 31,

2024 were individually evaluated for expected credit losses

where the amortized cost was adjusted to fair value.

Loans with fair value of $ 16.0 million as of September 30, 2025 were individually

evaluated for expected credit losses where the amortized cost was adjusted to fair value.

Loans with fair value of $ 28.8 million as of

December 31, 2024 were individually evaluated for expected

credit losses where the amortized cost was adjusted to fair value.

The Company uses the fair value of underlying collateral, less costs to sell, to estimate the allowance for credit losses for individually evaluated collateral dependent loans.

6 unchanged sentences

interest payable and derivatives.

June 30, 2025

September 30, 2025

December 31, 2024

52 unchanged sentences

Collateral may be obtained based on management’s assessment of the customer’s creditworthiness.

Commitments to extend credit and unused lines of credit totaled $ 3.41 billion at June 30, 2025 and $ 2.84 billion at December 31, 2024.

Commitments to extend credit and unused lines of credit totaled $ 3.28 billion at September 30, 2025 and $ 2.84 billion at December 31, 2024.

Since many loan commitments, standby letters of credit and guarantees and indemnification contracts expire without being funded in whole or in part, the contract

9 unchanged sentences

Standby letters of credit totaled $ 61.2

million at June 30, 2025 and $ 50.8 million at December 31, 2024.

A s of June 30, 2025 and December 31, 2024 , the fair value of the Company’s standby letters of credit was not significant.

million at September 30, 2025 and $ 50.8 million at December 31,

A s of September 30, 2025 and December 31, 2024 , the fair value of the Company’s standby letters of credit was not significant.

In the normal course of business there are various outstanding legal proceedings.

10 unchanged sentences

Segments are components of an enterprise that are regularly evaluated by the CODM to allocate resources and assess performance.

Company’s CODM is its Chief ExecutiveOfficer.

Company’s CODM is its Chief Executive Officer.

As a result of this reassessment, beginning with the fiscal year ended December

31, 2024, the Company has determined that it now operates through two reportable segments:

Banking - Provides commercial banking, retail banking, and wealth management services primarily to customers in its market area, offering a broad array of banking and financial services to retail, commercial,

and municipal customers.

Banking - Provides commercial banking, retail banking, and wealth management services primarily to customers in its market area, offering a broad array of banking and financial services to retail,

commercial, and municipal customers.

Included in Banking are the revenue and expenses from the wealth management business and the parent holding company.

The parent company’s principal activities include the direct and indirect ownership of banking and

non-banking subsidiaries, as well as the issuance of debt and equity.

The parent company’s principal activities include the direct and indirect ownership of

banking and non-banking subsidiaries, as well as the issuance of debt and equity.

The parent company’s principal sources of revenue are the management fees and dividends it receives from its subsidiaries.

Banking also includes corporate shared service costs

such as the majority of equity compensation expense, as well as other general and administrative shared services costs including pension, retirement plan and supplemental retirement plan costs.

Currently there is no allocation of these costs to

other operating segments.

Banking also includes corporate shared

service costs such as the majority of equity compensation expense, as well as other general and administrative shared services costs including pension, retirement plan and supplemental retirement plan costs.

Currently there is no allocation of

these costs to other operating segments.

Retirement Plan Administration - Includes retirement plan and health savings account recordkeeping and administration, investment management, third-party administration, and actuarial services.

2 unchanged sentences

The CODM regularly receives expense information at a level consistent with that disclosed in the Company’s consolidated statements of income.

Reported segments and their financial information are not necessarily comparable to

similar information reported by other financial institutions.

Reported segments and their financial information are not necessarily comparable

to similar information reported by other financial institutions.

Additionally, due to interrelationships among the various segments, the information presented is not indicative of how the segments would perform as independent entities.

management structure, allocation methodologies, or procedures may result in future revisions to previously reported segment financial data.

For the three and six months ended June 30, 2024, the Company only disclosed one reportable segment, as operations were assessed on a consolidated basis.

Accordingly, prior year segment data has been retrospectively adjusted to

conform to the current period presentation.

For the three and nine months ended September 30, 2024, the Company only disclosed

one reportable segment, as operations were assessed on a consolidated basis.

Accordingly, prior year segment data has been

retrospectively adjusted to conform to the current period presentation.

The Company will continue to evaluate its segment disclosures in accordance with ASU 2023-07 and make necessary adjustments as business operations evolve.

1 unchanged sentence

consolidated financial statements follows:

Three Months Ended June 30, 2025

Three Months Ended September 30, 2025

(In thousands)

11 unchanged sentences

Bank owned life insurance income

Net securities gains (losses)

Net securities (losses) gains

Total noninterest income

13 unchanged sentences

(1) Included in All Other is the revenue and expenses from certain other non-bank subsidiaries of the parent, including the insurance subsidiary, along with eliminating amounts that do not meet the definition of an operating segment.

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

(In thousands)

26 unchanged sentences

Intangible assets, net

(1) Included in All Other is the revenue and

expenses from certain other non-bank subsidiaries of the parent, including the insurance subsidiary, along with eliminating amounts that do not meet the definition of an operating segment.

Six Months Ended June 30, 2025

(1) Included in All Other is the revenue

and expenses from certain other non-bank subsidiaries of the parent, including the insurance subsidiary, along with eliminating amounts that do not meet the definition of an operating segment.

Nine Months Ended September 30, 2025

(In thousands)

28 unchanged sentences

expenses from certain other non-bank subsidiaries of the parent, including the insurance subsidiary, along with eliminating amounts that do not meet the definition of an operating segment.

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

(In thousands)

31 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