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Item 9A. Controls and Procedures

2023-03-10 compared with 2022-03-11 · 1438 added, 1533 removed, 883 unchanged (77% of the section changed)

22 unchanged sentences

of Independent Registered Public Accounting Firm

Internal Control over Financial Reporting

the Shareholders and Board of Directors of Western New England Bancorp, Inc.

on Internal Control over Financial Reporting

To the Shareholders and Board of Directors of Western

New England Bancorp, Inc.

Opinion on Internal Control over Financial Reporting

We have audited Western New England Bancorp, Inc.

and subsidiaries’ (the “Company”) internal control over financial reporting as of December 31, 2021, based on criteria

established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of

the Treadway Commission (“COSO”).

In our opinion, the Company maintained, in all material respects, effective internal control

over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013)

issued by the COSO.

We have also audited, in accordance with the standards

of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company

and our report dated March 11, 2022 expressed an unqualified opinion.

Basis for Opinion

The Company’s management is responsible for

maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial

reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting .

Our responsibility

is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting

firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S.

federal securities

laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards

of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal

control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control

over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness

of internal control based on the assessed risk.

Our audit also included performing such other procedures as we considered necessary in

the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control

over Financial Reporting

A company's internal control over financial reporting

is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial

statements for external purposes in accordance with generally accepted accounting principles.

A company's internal control over financial

reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately

and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions

are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and

that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition

of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control

over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods

are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the

policies or procedures may deteriorate.

have audited Western New England Bancorp, Inc.

and subsidiaries’ (the “Company”) internal control over financial

reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013)

issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

In our opinion, the Company

maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria

established in Internal Control — Integrated Framework (2013) issued by the COSO.

have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”),

the consolidated financial statements of the Company and our report dated March 10, 2023 expressed an unqualified opinion.

Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment

of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report

on Internal Control over Financial Reporting .

Our responsibility is to express an opinion on the Company’s internal

control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required

to be independent with respect to the Company in accordance with U.S.

federal securities laws and the applicable rules and regulations

of the Securities and Exchange Commission and the PCAOB.

conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit

to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that

a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the

assessed risk.

Our audit also included performing such other procedures as we considered necessary in the circumstances.

that our audit provides a reasonable basis for our opinion.

and Limitations of Internal Control over Financial Reporting

company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability

of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted

accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain

to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the

assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial

statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are

being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance

regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have

a material effect on the financial statements.

of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections

of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes

in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Wolf & Company, P.C.

22 unchanged sentences

Accounting Firm Fees and Services.” Our independent registered public accounting firm is Wolf & Company, P.C.

, Boston, Massachusetts ,

Massachusetts , Auditor ID:

AND FINANCIAL STATEMENT SCHEDULES.

7 unchanged sentences

(a)(3) Exhibits

Restated Articles of Organization of Western New England Bancorp, Inc.

(incorporated by reference to Exhibit 3.1 of the Form 8-K filed with the SEC on October 26, 2016).

Amended and Restated Bylaws of Western New England Bancorp, Inc.

(incorporated by reference to Exhibit 3.1 of the Form 8-K filed with the SEC on February 2, 2017).

Form of Stock Certificate of Western New England Bancorp, Inc.

(f/k/a Westfield Financial, Inc.) (incorporated by reference to Exhibit 4.1 of the Registration Statement on Form S-1 (No.

Articles of Organization of Western New England Bancorp, Inc.

(incorporated by reference to Exhibit 3.1 of the Form 8-K filed

with the SEC on October 26, 2016).

and Restated Bylaws of Western New England Bancorp, Inc.

(incorporated by reference to Exhibit 3.1 of the Form 8-K filed with

the SEC on February 2, 2017).

of Stock Certificate of Western New England Bancorp, Inc.

(f/k/a Westfield Financial, Inc.) (incorporated by reference to

Exhibit 4.1 of the Registration Statement on Form S-1 (No.

333-137024) filed with the SEC on August 31, 2006).

of Securities Registered Under Section 12 of the Securities Exchange Act of 1934.

Form of Director’s Deferred Compensation Plan (incorporated by reference to Exhibit 10.7 of the Form 8-K filed with the SEC on December 22, 2005).

Amended and Restated Benefit Restoration Plan of Western New England Bancorp, Inc.

(f/k/a Westfield Financial, Inc.) (incorporated by reference to Exhibit 10.5 of the Form 8-K filed with the SEC on October 29, 2007).

Amended and Restated Employment Agreement between James C.

Hagan and Westfield Bank (incorporated by reference to Exhibit 10.9 of the Form 8-K filed with the SEC on January 5, 2009).

Amended and Restated Employment Agreement between James C.

of Director’s Deferred Compensation Plan (incorporated by reference to Exhibit 10.7 of the Form 8-K filed with the SEC

on December 22, 2005).

and Restated Benefit Restoration Plan of Western New England Bancorp, Inc.

(f/k/a Westfield Financial, Inc.) (incorporated

by reference to Exhibit 10.5 of the Form 8-K filed with the SEC on October 29, 2007).

and Restated Employment Agreement between James C.

Hagan and Westfield Bank (incorporated by reference to Exhibit 10.9 of

the Form 8-K filed with the SEC on January 5, 2009).

and Restated Employment Agreement between James C.

Hagan and Western New England Bancorp, Inc.

(f/k/a Westfield Financial, Inc.) (incorporated by reference to Exhibit 10.12 of the Form 8-K filed with the SEC on January 5, 2009).

Employment Agreement between Leo R.

and Westfield Bank (incorporated by reference to Exhibit 10.15 of the Form 8-K filed with the SEC on January 5, 2009).

Employment Agreement between Leo R.

(f/k/a Westfield Financial,

Inc.) (incorporated by reference to Exhibit 10.12 of the Form 8-K filed with the SEC on January 5, 2009).

Agreement between Leo R.

and Westfield Bank (incorporated by reference to Exhibit 10.15 of the Form 8-K filed with

the SEC on January 5, 2009).

Agreement between Leo R.

and Western New England Bancorp, Inc.

(f/k/a Westfield Financial, Inc.) (incorporated by reference to Exhibit 10.16 of the Form 8-K filed with the SEC on January 5, 2009).

Employment Agreement between Allen J.

Miles, III and Westfield Bank (incorporated by reference to Exhibit 10.19 of the Form 8-K filed with the SEC on January 5, 2009).

Employment Agreement between Allen J.

(f/k/a Westfield Financial, Inc.) (incorporated

by reference to Exhibit 10.16 of the Form 8-K filed with the SEC on January 5, 2009).

Agreement between Allen J.

Miles, III and Westfield Bank (incorporated by reference to Exhibit 10.19 of the Form 8-K filed

with the SEC on January 5, 2009).

Agreement between Allen J.

Miles, III and Western New England Bancorp, Inc.

(f/k/a Westfield Financial, Inc.) (incorporated by reference to Exhibit 10.20 of the Form 8-K filed with the SEC on January 5, 2009).

Employment Agreement between Darlene M.

(f/k/a Westfield Financial, Inc.) (incorporated

by reference to Exhibit 10.20 of the Form 8-K filed with the SEC on January 5, 2009).

Agreement between Darlene M.

Libiszewski and Western New England Bancorp, Inc.

(f/k/a Westfield Financial, Inc.) (incorporated by reference to Exhibit 10.4 of the Registration Statement on Form S-4 (No.

(f/k/a Westfield Financial, Inc.) (incorporated

by reference to Exhibit 10.4 of the Registration Statement on Form S-4 (No.

333-212221) filed with the SEC on June 24, 2016).

Employment Agreement between Darlene M.

Libiszewski and Westfield Bank (incorporated by reference to Exhibit 10.5 of the Registration Statement on Form S-4 (No.

Agreement between Darlene M.

Libiszewski and Westfield Bank (incorporated by reference to Exhibit 10.5 of the Registration

Statement on Form S-4 (No.

333-212221) filed with the SEC on June 24, 2016).

Employment Agreement between Guida R.

Sajdak and Western New England Bancorp (incorporated by reference to Exhibit 10.1 of the Form 8-K filed with the SEC on February 8, 2018).

Employment Agreement between Guida R.

Sajdak and Westfield Bank (incorporated by reference to Exhibit 10.2 of the Form 8-K filed with the SEC on February 8, 2018).

Employment Agreement between Louis Gorman, III and Western New England Bancorp (incorporated by reference to Exhibit 10.1 of the Form 8-K filed with the SEC on March 23, 2018).

Employment Agreement between Louis Gorman, III and Westfield Bank (incorporated by reference to Exhibit 10.2 of the Form 8-K filed with the SEC on March 23, 2018).

Employment Agreement between Kevin C.

O’Connor and Westfield Bank dated February 17, 2017 (incorporated by reference to Exhibit 10.20 of the Form 10-K filed with the SEC on March 11, 2021).

Employment Agreement between Kevin C.

Agreement between Guida R.

Sajdak and Western New England Bancorp (incorporated by reference to Exhibit 10.1 of the Form 8-K

filed with the SEC on February 8, 2018).

Agreement between Guida R.

Sajdak and Westfield Bank (incorporated by reference to Exhibit 10.2 of the Form 8-K filed with

the SEC on February 8, 2018).

Agreement between Louis Gorman, III and Western New England Bancorp (incorporated by reference to Exhibit 10.1 of the Form

8-K filed with the SEC on March 23, 2018).

Agreement between Louis Gorman, III and Westfield Bank (incorporated by reference to Exhibit 10.2 of the Form 8-K filed with

the SEC on March 23, 2018).

Agreement between Kevin C.

O’Connor and Westfield Bank dated February 17, 2017 (incorporated by reference to Exhibit

10.20 of the Form 10-K filed with the SEC on March 11, 2021).

Agreement between Kevin C.

O’Connor and Western New England Bancorp, Inc.

dated February 17, 2017 (incorporated by reference to Exhibit 10.21 of the Form 10-K filed with the SEC on March 11, 2021).

Change of Control Agreement between John Bonini and Western New England Bancorp, Inc.

dated as of January 1, 2021 (incorporated by reference to Exhibit 10.22 of the Form 10-K filed with the SEC on March 11, 2021).

Change of Control Agreement between Christine Phillips and Western New England Bancorp, Inc.

dated as of January 1, 2021(incorporated by reference to Exhibit 10.23 of the Form 10-K filed with the SEC on March 11, 2021).

dated February 17, 2017 (incorporated by reference

to Exhibit 10.21 of the Form 10-K filed with the SEC on March 11, 2021).

of Control Agreement between John Bonini and Western New England Bancorp, Inc.

dated as of January 1, 2021 (incorporated by

reference to Exhibit 10.22 of the Form 10-K filed with the SEC on March 11, 2021).

of Control Agreement between Christine Phillips and Western New England Bancorp, Inc.

dated as of January 1, 2021(incorporated

by reference to Exhibit 10.23 of the Form 10-K filed with the SEC on March 11, 2021).

Agreement between Filipe B.

Goncalves and Western New England Bancorp dated as of January 1, 2021.

Agreement between Filipe B.

Goncalves and Westfield Bank dated as of January 1, 2021.

of Control Agreement between Daniel A.

Marini, Westfield Bank and Western New England Bancorp, Inc.

dated as of January 1,

Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1 to the Form 8-K filed with the SEC on May 19, 2014).

Chicopee Bancorp, Inc.

2007 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Registration Statement on Form S-8 (No.

Bancorp, Inc.

2007 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Registration Statement on Form

333-214261) filed with the SEC on October 26, 2016).

Western New England Bancorp, Inc.

2021 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1 of the Form S-8 filed with the SEC on May 19, 2021).

Form of Incentive Stock Option Agreement under the Western New England Bancorp, Inc.

2021 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.2 of the Form S-8 filed with the SEC on May 19, 2021).

Form of Non-Qualified Stock Option Agreement under the Western New England Bancorp, Inc.

2021 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.3 of the Form S-8 filed with the SEC on May 19, 2021).

Form of Director Incentive Award Agreement under the Western New England Bancorp, Inc.

2021 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.4 of the Form S-8 filed with the SEC on May 19, 2021).

Form of Restricted Stock Award Agreement under the Western New England Bancorp, Inc.

2021 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.5 of the Form S-8 filed with the SEC on May 19, 2021).

Form of Long-Term Incentive and Retention Equity Award Agreement under the Western New England Bancorp, Inc.

2021 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.6 of the Form S-8 with the SEC on May 19, 2021).

New England Bancorp, Inc.

2021 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1 of the Form S-8 filed with

the SEC on May 19, 2021).

of Incentive Stock Option Agreement under the Western New England Bancorp, Inc.

2021 Omnibus Incentive Plan (incorporated

by reference to Exhibit 10.2 of the Form S-8 filed with the SEC on May 19, 2021).

of Non-Qualified Stock Option Agreement under the Western New England Bancorp, Inc.

2021 Omnibus Incentive Plan (incorporated

by reference to Exhibit 10.3 of the Form S-8 filed with the SEC on May 19, 2021).

of Director Incentive Award Agreement under the Western New England Bancorp, Inc.

2021 Omnibus Incentive Plan (incorporated

by reference to Exhibit 10.4 of the Form S-8 filed with the SEC on May 19, 2021).

of Restricted Stock Award Agreement under the Western New England Bancorp, Inc.

2021 Omnibus Incentive Plan (incorporated

by reference to Exhibit 10.5 of the Form S-8 filed with the SEC on May 19, 2021).

of Long-Term Incentive and Retention Equity Award Agreement under the Western New England Bancorp, Inc.

2021 Omnibus Incentive

Plan (incorporated by reference to Exhibit 10.6 of the Form S-8 with the SEC on May 19, 2021).

Subsidiaries of Western New England Bancorp, Inc .

19 unchanged sentences

this report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 10, 2023.

WESTERN NEW ENGLAND BANCORP, INC.

NEW ENGLAND BANCORP, INC.

Chief Executive Officer and President

(Principal Executive Officer)

Chief Financial Officer and Executive Vice President (Principal Financial Officer and Principal

Accounting Officer)

Chief Financial Officer and Executive

Vice President (Principal Financial Officer and Principal Accounting Officer)

person whose individual signature appears below hereby authorizes and appoints James C.

15 unchanged sentences

of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of

Western New England Bancorp, Inc.

Opinion on the Consolidated Financial Statements

We have audited the accompanying Consolidated

Balance Sheets of Western New England Bancorp, Inc.

and subsidiaries (the Company) as of December 31, 2021 and 2020, the related Consolidated

Statements of Net Income, Comprehensive Income, Changes in Shareholders’ Equity and Cash Flows for each of the three years in the

period ended December 31, 2021, and the related notes (collectively referred to as the financial statements).

In our opinion, the financial

statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results

of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting

principles generally accepted in the United States of America.

We also have audited, in accordance with the

standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial

reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the

Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated March 11, 2022 expressed an unqualified opinion

on the effectiveness of the Company’s internal controls over financial reporting.

Basis for Opinion

These financial statements are the responsibility

of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks

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

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

Our audits also included evaluating the accounting

principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Critical Audit Matter

The critical audit matter communicated below

is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to

the Company’s Audit Committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and

(2) involved especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in

any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing

a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Critical Audit Matter Description

As described in Notes 1 and 3 to the financial

statements, the Company has recorded an allowance for loan losses in the amount of $19.8 million as of December 31, 2021, representing

management’s estimate of the probable losses inherent in the loan portfolio as of that date.

The allowance is established

as losses are estimated to have occurred through a provision (credit) for loan losses charged to earnings.

The determination of the allowance for loan

losses requires significant judgment by management including the identification of, and estimated reserves on, problem loans and the determination

of qualitative adjustments to historical loss experience.

How the Critical Audit Matter was addressed

Our principal audit procedures to evaluate management’s

estimates of the allowance for loan losses included tests of the following:

· Management’s identification of problem loans, including management’s loan review procedures

and monitoring of internal loan reports, including delinquency, non-accrual, and watch list, to determine the completeness of impaired

· Management’s determination of specific reserves on impaired loans, including significant assumptions,

such as the fair value of collateral for collateral dependent loans.

· Management’s determination of general reserves, including determination of historical loss experience

the Shareholders and Board of Directors of

New England Bancorp, Inc.

on the Consolidated Financial Statements

have audited the accompanying consolidated balance sheets of Western New England Bancorp, Inc.

and subsidiaries (the Company)

as of December 31, 2022 and 2021, the related consolidated statements of net income, comprehensive income, changes in shareholders’

equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred

to as the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial

position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the

three years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States

also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB),

the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal

Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)

and our report dated March 10, 2023 expressed an unqualified opinion on the effectiveness of the Company’s internal controls

over financial reporting.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent

with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the

Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to

obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to

error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was

communicated or required to be communicated to the Company’s Audit Committee and that:

(1) relates to accounts or disclosures

that are material to the financial statements and (2) involved especially challenging, subjective, or complex judgments.

The communication

of a critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not,

by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts

or disclosures to which it relates.

Audit Matter Description

described in Notes 1 and 3 to the financial statements, the Company has recorded an allowance for loan losses in the amount of

$19.9 million as of December 31, 2022, representing management’s estimate of the probable losses inherent in the loan portfolio

as of that date.

The allowance is established as losses are estimated to have occurred through a provision (credit)

for loan losses charged to earnings.

determination of the allowance for loan losses requires significant judgment by management including the determination of qualitative adjustments to historical loss experience.

the Critical Audit Matter was addressed in the Audit

principal audit procedures to evaluate management’s estimates of the allowance for loan losses included tests of the following:

● Management’s

determination of general reserves, including determination of historical loss experience

and qualitative adjustments to historical loss experience.

· The accuracy of management’s calculation of the allowance for loan losses, including relevant internal

accuracy of management’s calculation of the allowance for loan losses, including

relevant internal controls.

have served as the Company’s auditor since 2004.

1 unchanged sentence

Massachusetts

WESTERN NEW ENGLAND BANCORP, INC., AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except share data)

Cash and due from banks

Federal funds sold

Interest-bearing deposits and other short-term investments

Cash and cash equivalents

Available-for-sale securities, at fair value

Held-to-maturity securities, at amortized cost (Fair value of $ 219,748 at December 31, 2021)

Marketable equity securities, at fair value

Federal Home Loan Bank stock and other restricted stock, at cost

Loans, net of allowance f or loan losses of $ 19,787

and $ 21,157 at December 31, 2021 and

2020, respectively

Premises and equipment, net

Accrued interest receivable

Bank-owned life insurance

Deferred tax asset, net

Core deposit intangible

LIABILITIES AND SHAREHOLDERS' EQUITY

NEW ENGLAND BANCORP, INC., AND SUBSIDIARIES

BALANCE SHEETS

in thousands, except share data)

and due from banks

Interest-bearing

deposits and other short-term investments

and cash equivalents

Available-for-sale

securities, at fair value

Held-to-maturity

securities, at amortized cost (Fair value of $ 190,950 at December 31, 2022 and $ 219,748 at December 31, 2021)

equity securities, at fair value

Home Loan Bank stock and other restricted stock, at cost

net of allowance for loan losses of $ 19,931 and $ 19,787 at December 31, 2022 and 2021, respectively

and equipment, net

interest receivable

life insurance

tax asset, net

deposit intangible

AND SHAREHOLDERS’ EQUITY

Non-interest-bearing

Interest-bearing

Total deposits

Long-term debt

Subordinated debt

Securities pending settlement

Other liabilities

Total liabilities

COMMITMENTS AND CONTINGENCIES (see Note 16)

SHAREHOLDERS' EQUITY:

Preferred stock - $ 0.01 par value, 5,000,000 shares authorized, none outstanding at December 31, 2021 and December 31, 2020

Common stock - $ 0.01 par value, 75,000,000 shares authorized, 22,656,515 shares issued and outstanding at December 31, 2021;

AND CONTINGENCIES (see Note 16)

SHAREHOLDERS’

stock - $ 0.01 par value, 5,000,000 shares authorized, none outstanding at December 31, 2022 and December 31, 2021

stock - $ 0.01 par value, 75,000,000 shares authorized, 22,216,789 shares issued and outstanding at December 31, 2022;

shares issued and outstanding at December 31, 2021

Additional paid-in capital

Unearned compensation - ESOP

Unearned compensation - Equity Incentive Plan

Retained earnings

Accumulated other comprehensive loss

TOTAL SHAREHOLDERS’ EQUITY

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

See accompanying notes to consolidated financial statements.

WESTERN NEW ENGLAND BANCORP, INC.

paid-in capital

compensation - ESOP

compensation - Equity Incentive Plan

other comprehensive loss

SHAREHOLDERS’ EQUITY

LIABILITIES AND SHAREHOLDERS’ EQUITY

accompanying notes to consolidated financial statements.

NEW ENGLAND BANCORP, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF NET INCOME

(Dollars in thousands, except per share data)

Years Ended December 31,

STATEMENTS OF NET INCOME

in thousands, except per share data)

Ended December 31,

and dividend income:

and commercial real estate loans

and industrial loans

securities, taxable

securities, tax-exempt

equity securities

interest and dividend income

Residential and commercial real estate loans

Commercial and industrial loans

Consumer loans

Debt securities, taxable

Debt securities, tax-exempt

Marketable equity securities

Other investments

Short-term investments

Total interest and dividend income

interest expense

Long-term debt

Subordinated debt

Short-term borrowings

Total interest expense

Net interest and dividend income

(Credit) provision for loan losses

Net interest and dividend income after (credit) provision for loan losses

interest and dividend income

(credit) for loan losses

interest and dividend income after provision (credit) for loan losses

charges and fees

from bank-owned life insurance

life insurance death benefit

gain on available-for-sale securities, net

on sale of mortgages

(losses) gains on marketable equity securities

on non-marketable equity investments

on defined benefit plan curtailment

on interest rate swap termination

non-interest income

Service charges and fees

Income from bank-owned life insurance

Bank-owned life insurance death benefit

(Loss) gain on available-for-sale securities, net

Gain on sale of mortgages

Net unrealized (losses) gains on marketable equity securities

Gain on non-marketable equity investments

Loss on interest rate swap termination

Total non-interest income

and employees benefits

and equipment

insurance assessment

on prepayment of borrowings

non-interest expense

Salaries and employees benefits

Furniture and equipment

Data processing

Professional fees

FDIC insurance assessment

Loss on prepayment of borrowings

Other expenses

Total non-interest expense

Income before income taxes

Income tax provision

Earnings per common share:

Basic earnings per share

Weighted average shares outstanding

Diluted earnings per share

Weighted average diluted shares outstanding

Dividends per share

See accompanying notes to consolidated financial statements.

before income taxes

tax provision

per common share:

Basic earnings

average shares outstanding

earnings per share

average diluted shares outstanding

accompanying notes to consolidated financial statements.

WESTERN NEW ENGLAND BANCORP, INC.

2 unchanged sentences

(Dollars in thousands)

Years Ended December 31,

Other comprehensive income (loss):

Unrealized (losses) gains on available-for-sale securities:

Unrealized holding (losses) gains

Reclassification adjustment for net losses (gains) realized in income (1)

Unrealized (losses) gains

Net-of-tax amount

Cash flow hedges:

Change in fair value of derivatives used for cash flow hedges

Reclassification adjustment for loss realized in income for interest rate swap termination (2)

Reclassification adjustment for loss realized in interest expense (3)

Reclassification adjustment for termination fee realized in interest expense (4)

Unrealized gains on cash flow hedges

Net-of-tax amount

Defined benefit pension plan:

Gains (losses) arising during the period

Amortization of defined benefit plan actuarial loss (5)

Unrecognized actuarial gains (losses) on defined benefit plan

Net-of-tax amount

Other comprehensive (loss) income

Comprehensive income

Ended December 31,

comprehensive income (loss):

(losses) gains on available-for-sale securities:

holding (losses) gains

Reclassification

adjustment for net losses (gains) realized in income (1)

(losses) gains

in fair value of derivatives used for cash flow hedges

Reclassification

adjustment for loss realized in income for interest rate swap termination (2)

Reclassification

adjustment for loss realized in interest expense (3)

Reclassification

adjustment for termination fee realized in interest expense (4)

gains on cash flow hedges

benefit pension plan:

(losses) arising during the period

Reclassification

adjustment for gain realized in income for defined benefit plan curtailment (5)

of defined benefit plan actuarial loss (6)

actuarial gains (losses) on defined benefit plan

comprehensive loss

Comprehensive

gains and losses on available-for-sale securities are recognized as a component of non-interest

income in the consolidated statements of net income.

The tax effects associated with

the reclassification adjustments were $ ( 15,000 ) , $ 502,000 and $ ( 37,000 ) for the years

The tax effects associated

with the reclassification adjustments were $ ( 1,000 ) , $ ( 15,000 ) and $ 502,000 for the years

ended December 31, 2022, 2021 and 2020, respectively.

realized in income on interest rate swap termination is recognized as a component of non-interest income.

Income tax effects associated

with the reclassification adjustments were $ 113,000 and $ 661,000 for the years ended December 31, 2021 and 2020.

realized in interest expense on derivative instruments is recognized as a component of interest expense on long-term debt in the

consolidated statements of net income.

Income tax effects associated with the reclassification adjustments were $ 189,000 and $ 109,000

for the years ended December 31, 2020 and 2019, respectively.

realized in income on interest rate swap termination is recognized as a component of

non-interest income.

Income tax effects associated with the reclassification

adjustments were $ 113,000 and $ 661,000 for the years ended December 31, 2021 and 2020.

realized in interest expense on derivative instruments is recognized as a component of

interest expense on long-term debt in the consolidated statements of net income.

tax effects associated with the reclassification adjustment was $ 189,000 for the year

ended December 31, 2020.

(4) Termination

fee realized in interest expense on derivative instruments is recognized as a component of interest expense on long-term debt

in the consolidated statements of net income.

Income tax effects associated with the reclassification adjustments were $ 79,000 ,

$ 237,000 and $ 300,000 for the years ended December 31, 2021, 2020 and 2019, respectively.

represent the reclassification of defined benefit plan amortization and have been recognized as a component of non-interest expense

in the consolidated statements of net income.

Income tax effects associated with the reclassification adjustments were $ 256,000 ,

$ 118,000 and $ 38,000 for the years ended December 31, 2021, 2020 and 2019, respectively.

gains and losses on available-for-sale securities are recognized as a component of non-interest

income in the consolidated statements of net income.

The tax effects associated with

the reclassification adjustments were $(15,000), $502,000 and $(37,000) for the years

ended December 31, 2021, 2020 and 2019, respectively.

realized in income on interest rate swap termination is recognized as a component of non-interest income.

Income tax effects associated

with the reclassification adjustments were $113,000 and $661,000 for the years ended December 31, 2021 and 2020.

realized in interest expense on derivative instruments is recognized as a component of interest expense on long-term debt in the

consolidated statements of net income.

Income tax effects associated with the reclassification adjustments were $189,000 and $109,000

fee realized in interest expense on derivative instruments is recognized as a component

of interest expense on long-term debt in the consolidated statements of net income.

tax effects associated with the reclassification adjustments were $ 79,000 and $ 237,000

for the years ended December 31, 2021 and 2020, respectively.

(4) Termination

fee realized in interest expense on derivative instruments is recognized as a component of interest expense on long-term debt

in the consolidated statements of net income.

Income tax effects associated with the reclassification adjustments were $79,000,

$237,000 and $300,000 for the years ended December 31, 2021, 2020 and 2019, respectively.

represent the reclassification of defined benefit plan amortization and have been recognized as a component of non-interest expense

in the consolidated statements of net income.

Income tax effects associated with the reclassification adjustments were $256,000,

gains on defined benefit plan curtailment are recognized as a component of non-interest

income in the consolidated statements of net income.

The tax effects associated

with the reclassification adjustment were $ 789,000 for the year ended December 31, 2022.

represent the reclassification of defined benefit plan amortization and have been recognized

as a component of non-interest expense in the consolidated statements of net income.

tax effects associated with the reclassification adjustments were $ 149,000 , $ 256,000

and $ 118,000 for the years ended December 31, 2022, 2021 and 2020, respectively.

accompanying notes to consolidated financial statements.

WESTERN NEW ENGLAND BANCORP, INC.

See accompanying notes to consolidated financial statements.

NEW ENGLAND BANCORP, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

YEARS ENDED DECEMBER 31, 2021, 2020 AND 2019

(Dollars in thousands, except share data)

Compensation-

Incentive Plan

Comprehensive

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

ENDED DECEMBER 31, 2022, 2021 AND 2020

in thousands, except share data)

Paid-in Capital

Compensation- ESOP

Compensation- Equity Incentive Plan

Other Comprehensive Loss

AT DECEMBER 31, 2019

Comprehensive

Cumulative-effect

adjustment due to change in accounting principle (ASU 2017-08)

income (loss)

stock held by ESOP committed to be released ( 85,101 shares)

equity incentive plan shares ( 30,193 shares)

stock repurchased

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of common stock in connection with equity incentive plan

equity incentive plan shares reissued ( 32,544 shares)

dividends declared and paid on common stock ($ 0.20 per share)

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stock repurchased

( 2,775,134 )

compensation - equity incentive plan

4 unchanged sentences

AT DECEMBER 31, 2022

See accompanying

notes to consolidated financial statements.

WESTERN NEW ENGLAND BANCORP, INC.

accompanying notes to consolidated financial statements.

NEW ENGLAND BANCORP, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Years Ended December 31,

STATEMENTS OF CASH FLOWS

Ended December 31,

OPERATING ACTIVITIES:

Adjustments to reconcile net income to net cash provided by operating activities:

(Credit) provision for loan losses

Depreciation and amortization of premises and equipment

Net amortization (accretion) of purchase accounting adjustments

Amortization of core deposit intangible

Net amortization of premiums and discounts on securities and mortgage loans

Amortization of subordinated debt issuance costs

Share-based compensation expense

Gain on sale of portfolio mortgages

Principal balance of loans originated for sale

Principal balance of loans sold

Change in unrealized loss (gain) on marketable equity securities

Net loss (gain) on sales of available-for-sale securities

Loss on prepayment of borrowings

Gain on bank-owned life insurance death benefit

Deferred income tax provision (benefit)

Income from bank-owned life insurance

Adjustments to

reconcile net income to net cash provided by operating activities:

Provision (credit)

for loan losses

Depreciation and

amortization of premises and equipment

Net (accretion)

amortization of purchase accounting adjustments

Amortization of

core deposit intangible

Net amortization

of premiums and discounts on securities and mortgage loans

Amortization of

subordinated debt issuance costs

Share-based compensation

Gain on sale of

portfolio mortgages

Principal balance

of loans originated for sale

Principal balance

of loans sold

Net loss (gain)

on marketable equity securities

Net loss (gain)

on sales of available-for-sale securities

Loss on prepayment

of borrowings

Gain on bank-owned

life insurance death benefit

Deferred income

tax provision (benefit)

Income from bank-owned

life insurance

Net change in:

Accrued interest receivable

Accrued interest

Other liabilities

Net cash provided by operating activities

cash provided by operating activities

INVESTING ACTIVITIES:

Securities, held-to-maturity:

Proceeds from calls, maturities, and principal collections

Securities, available-for-sale:

Proceeds from sales and redemptions

Proceeds from calls, maturities, and principal collections

Loan originations and principal payments, net

Redemption of Federal Home Loan Bank of Boston stock, net

Proceeds from sale of portfolio mortgages

Purchases of premises and equipment

Proceeds from sale of premises and equipment

Net cash used in investing activities

held-to-maturity securities

Proceeds from

calls, maturities, and principal collections of held-to-maturity securities

available-for-sale securities

Proceeds from

redemption and sales of available-for-sale securities

Proceeds from

calls, maturities, and principal collections of available-for-sale securities

Proceeds from

redemption of marketable equity securities

Loan originations

and principal payments, net

Redemption of

Federal Home Loan Bank of Boston stock, net

Proceeds from

sale of portfolio mortgages

premises and equipment

Proceeds from

sale of premises and equipment

Proceeds from

payout on Bank owned life insurance

cash used in investing activities

FINANCING ACTIVITIES:

Net increase in deposits

Net decrease in short-term borrowings

Repayment of long-term debt

Proceeds from subordinated debt issuance

Payment of subordinated debt issuance costs

Proceeds from long-term debt

Cash dividends paid

Common stock repurchased

Issuance of common stock in connection with stock option exercises

Net cash provided by financing activities

NET CHANGE IN CASH AND CASH EQUIVALENTS:

Net (decrease)

increase in deposits

(decrease) in short-term borrowings

long-term debt

Proceeds from

subordinated debt issuance

Payment of subordinated

debt issuance costs

Proceeds from

long-term debt

Cash dividends

Issuance of common

stock in connection with stock option exercises

cash provided by financing activities

NET CHANGE IN CASH

AND CASH EQUIVALENTS:

Beginning of year

Supplemental cash flow information:

Net change in due to broker for common stock repurchased

See the accompanying notes to consolidated financial statements.

Supplemental cash

flow information:

Net change in

due to broker for common stock repurchased

the accompanying notes to consolidated financial statements.

NEW ENGLAND BANCORP, INC.

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Bank, a federally-chartered savings bank (“Bank”).

Bank operates 25 banking offices in Hampden and Hampshire counties in western Massachusetts and Hartford and Tolland counties

in northern Connecticut, and its primary sources of revenue are interest income from loans as well as interest income from investment

The Bank’s Huntington, Massachusetts branch opened on February 25, 2020 and its Bloomfield, Connecticut branch

opened on July 6, 2020.

In addition, the Bank’s Financial Services Center in West Hartford, Connecticut, opened on July

The West Hartford Financial Services Center serves as the Company’s Connecticut hub, housing Commercial Lending,

Cash Management and a Mortgage Loan Officer.

The Bank’s deposits are insured up to the maximum Federal Deposit Insurance

Corporation (“FDIC”) coverage limits.

Subsidiaries of the Ban k .

Bank operates 25 banking offices in Hampden County and Hampshire County in western Massachusetts and Hartford County and Tolland

County in northern Connecticut, and its primary sources of revenue are interest income from loans as well as interest income from

investment securities.

The West Hartford Financial Services Center serves as the Company’s Connecticut hub, housing Commercial

Lending, Cash Management and a Mortgage Loan Officer.

The Bank’s deposits are insured up to the maximum Federal Deposit

Insurance Corporation (“FDIC”) coverage limits.

Subsidiaries .

Elm Street Securities Corporation, WFD Securities, Inc.

39 unchanged sentences

are included in non-interest income on the trade date.

The amortization of premiums and accretion of discounts is determined by

using the level yield method to the maturity date.

The amortization of premiums and accretion of discounts are determined by

using the level yield method to the maturity date, except that premiums are amortized to the earliest call date or maturity.

Non-marketable

16 unchanged sentences

Impairment of Securities .

On a quarterly basis, we review available-for-sale securities with a decline in fair value below

the amortized cost of the investment to determine whether the decline in fair value is temporary or other-than-temporary (“OTTI”).

In estimating OTTI losses for available-for-sale securities, impairment is required to be recognized if (1) we intend to sell

the security;

(2) it is “more likely than not” that we will be required to sell the security before recovery of its

amortized cost basis;

or (3) for debt securities, the present value of expected cash flows is not sufficient to recover the entire

amortized cost basis.

For all impaired debt securities that we intend to sell, or more likely than not will be required to sell,

the full amount of the other-than-temporary impairment is recognized through earnings.

For all other impaired debt securities,

credit-related other-than-temporary impairment is recognized through earnings, while non-credit related other-than-temporary impairment

is recognized in other comprehensive income/loss, net of applicable taxes.

On a quarterly basis, we review debt securities with a decline in fair value below the amortized

cost of the investment to determine whether the decline in fair value is temporary or other-than-temporary (“OTTI”).

In estimating OTTI losses for debt securities, impairment is required to be recognized if (1) we intend to sell the security;

(2) it is “more likely than not” that we will be required to sell the security before recovery of its amortized cost

or (3) for debt securities, the present value of expected cash flows is not sufficient to recover the entire amortized

For all impaired debt securities that we intend to sell, or more likely than not will be required to sell, the full

amount of the other-than-temporary impairment is recognized through earnings.

For all other impaired debt securities, credit-related

other-than-temporary impairment is recognized through earnings, while non-credit related other-than-temporary impairment is recognized

in other comprehensive income/loss, net of applicable taxes.

Value Hierarchy .

70 unchanged sentences

and industry conditions.

Beginning in March 2020, the Bank added a new qualitative factor category to the allowance calculation

– “Economic Impact of COVID-19”.

The allocation of additional reserves for the COVID-19 qualitative factor during

the year was based upon continued analysis of the loan portfolio that included identifying borrowers sensitive to the shutdown

accommodation and food service, recreation, construction, manufacturing, and wholesale & retail trade) as well as a

general allocation for the negative economic outlook given the record number of unemployment benefits claims during the period.

In addition, on an ongoing basis, the Company has continually evaluated the loan portfolio acquired on October 24, 2016 from Chicopee

Bancorp, Inc.

(“Chicopee”).

The acquired portfolio was initially recorded at fair value without a related allowance

for loan losses.

Due to the ongoing impacts and extended nature of the pandemic, during the year ended December 31, 2020, the

Company determined that it was prudent to provide an allowance for loan losses related to the acquired portfolio.

Excluding the

COVID-19 qualitative factor category and the allowance for the acquired loan portfolio, there were no additional changes in our

policies or methodology pertaining to the general component of the allowance for loan losses during the periods presented for

In 2020, the Bank added a new qualitative factor category to the allowance calculation – “Economic

Impact of COVID-19” based upon an analysis of the loan portfolio that included identifying borrowers sensitive to the shutdown.

During the year ended December 31, 2021, the qualitative adjustment factors related to the COVID-19 pandemic and the uncertainty

in the economic environment were reduced as Management continued to assess the exposure of the Company’s loan portfolio

to the COVID-19 pandemic related factors, economic trends and their potential effect on asset quality.

There were no changes to

the Company’s policies and procedures surrounding the allowance for loan losses during the year ended December 31, 2022.

qualitative factors are determined based on the various risk characteristics of each loan segment.

2 unchanged sentences

real estate loans .

Loans in this segment are primarily income-producing investment properties and owner-occupied commercial

properties throughout New England.

The underlying cash flows generated by the properties or operations can be adversely impacted

by a downturn in the economy due to increased vacancy rates or diminished cash flows, which in turn, would have an effect on the

credit quality in this segment.

Management obtains financial information annually and continually monitors the cash flows of these

Loans in this segment include commercial real estate, multi-family dwellings, owner-occupied commercial

real estate and income producing investment properties, as well as commercial construction loans for commercial development projects

throughout New England.

The underlying cash flows generated by the properties or operations can be adversely impacted by a downturn

in the economy due to increased vacancy rates or diminished cash flows, which in turn, would have an effect on the credit quality

in this segment.

Management obtains financial information annually and continually monitors the cash flows of these loans.

real estate loans .

Loans in this segment are collateralized by owner-occupied residential real estate and repayment is dependent

on the credit quality of the individual borrower.

We require private mortgage insurance for all loans originated with a loan-to-value

ratio greater than 80 % and we do not grant subprime loans.

This portfolio segment consists of first mortgages, home equity loans, and home equity lines secured by

one-to-four family residential properties.

First mortgages may be underwritten to a maximum loan-to-value of 97 %

for owner-occupied homes, 90 %

for second homes and 85 %

for investment properties.

Mortgages with loan-to-values greater than 80 %

require private mortgage insurance.

We do not grant subprime loans.

Home equity loans and lines are secured by first or second

mortgages on one-to-four family owner-occupied properties.

Equity loans and lines are underwritten to a maximum combined

loan-to-value of 85 %

of the appraised value of the property.

Underwriting approval is dependent on review of the borrower’s ability to repay and

credit history in accordance with Westfield Bank’s policy.

The overall health of the economy, including unemployment rates and

housing prices, will have an effect on the credit quality in this segment.

Home equity loans are secured by first or second mortgages

on one-to-four family owner occupied properties.

housing pricing, will have an effect on the credit quality in this segment.

and industrial loans .

Loans in this segment are made to businesses and are generally secured by assets of the business.

is expected from the cash flows of the business.

A weakened economy, decreased consumer spending, changes in technology and government

spending are examples of what will have an effect on the credit quality in this segment.

addition, as a Preferred Lender with the Small Business Administration (“SBA”), the Company offered Paycheck Protection

Program (“PPP”) loans through the March 27, 2020 $ 2.2 trillion fiscal stimulus bill known as the Coronavirus Aid,

Relief and Economic Security Act (the “CARES Act”) launched by the U.S.

Department of Treasury (“Treasury”)

An eligible business was able to apply for a PPP loan up to the lesser of:

(1) 2.5 times its average monthly “payroll

costs,” or (2) $ 10 .0 million.

PPP loans have:

(a) an interest rate of 1.0 %, (b) a two-year loan term to maturity, subsequently

extended to a five-year loan term maturity for loans granted on or after June 5, 2020 and (c) principal and interest payments

deferred from six months to ten months from the date of disbursement.

The SBA will guarantee 100 % of the PPP loans made to eligible

The entire principal amount of the borrower’s PPP loan, including any accrued interest, is eligible to be reduced

by the loan forgiveness amount under the PPP so long as employee and compensation levels of the business are maintained and 60 %

of the loan proceeds are used for payroll expenses, with the remaining 40 % of the loan proceeds used for other qualifying expenses.

Loans in this segment include commercial business loans and are generally secured by assignments of

corporate assets and personal guarantees of the business owners.

Repayment is expected from the cash flows of the business.

weakened economy, and resultant decreased consumer spending, will have an effect on the credit quality in this segment.

Loans in this segment are both secured and unsecured and repayment is dependent on the credit quality of the individual

9 unchanged sentences

Accordingly, we do not separately identify individual consumer and residential real estate loans for impairment disclosures, unless

such loans are nonperforming or subject to a troubled debt restructuring agreement.

such loans are subject to a troubled debt restructuring agreement.

loan is considered impaired when, based on current information and events, it is probable that we will be unable to collect the

9 unchanged sentences

and interest owed.

The extent to which COVID-19 impacts our borrower’s ability to repay and therefore the classification

of a loan as impaired is highly uncertain and cannot be predicted with confidence as it is highly dependent upon the scope, severity

and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic

effects of the pandemic and containment measures.

may periodically agree to modify the contractual terms of loans.

96 unchanged sentences

Plans and Employee Benefits .

We provide a defined benefit pension plan for eligible employees in conjunction with a third-party

The plan was soft frozen on September 30, 2016, and therefore, no new participants are included in the Plan after such

effective date.

The compensation cost of an employee’s pension benefit is recognized on the projected unit credit method

over the employee’s approximate service period.

The aggregate cost method is utilized for funding purposes.

Employees are

also eligible to participate in a 401(k) plan through a third-party provider.

We make matching contributions to this plan at 50 %

of up to 6 % of the employees’ eligible compensation.

We provide the Westfield Bank Defined Benefit Pension Plan (the “DB Plan”) for eligible

employees in conjunction with a third-party provider.

The DB Plan was soft frozen on September 30, 2016, and therefore, no new

participants were included in the DB Plan after such effective date.

On July 26, 2022, the Board of Directors approved the termination

of the DB Plan, which became effective as of October 31, 2022, subject to regulatory approvals.

Once the Company has received

regulatory approval to terminate the DB Plan, which is expected in the first quarter of 2023, the Company will make an additional

cash contribution during the second quarter of 2023, if necessary, in order to fully fund the DB Plan on a plan termination basis,

followed by the purchase of annuity contracts to transfer its remaining liabilities under the DB Plan, for those participants

who do not opt for a one-time lump sum payment.

Employees are also eligible to participate in a 401(k) plan through a third-party

We make matching contributions to this plan at 50 % of up to 6 % of the employees’ eligible compensation.

Compensation Plans .

55 unchanged sentences

per common share have been computed based on the following:

Years Ended December 31,

(In thousands, except per share data)

Net income applicable to common stock

Average number of common shares issued

Average unallocated ESOP Shares

Ended December 31,

(In thousands, except

per share data)

income applicable to common stock

Average number

of common shares issued

unallocated ESOP Shares

Average unvested equity incentive plan shares

Average number of common shares outstanding used to calculate basic earnings per common

Effect of dilutive equity incentive plan

Effect of dilutive stock options

Average number of common shares

outstanding used to calculate diluted earnings per common share

Basic earnings per share

Diluted earnings per share

Anti-dilutive shares (1)

number of common shares outstanding used to calculate basic earnings per common share

of dilutive equity incentive plan

of dilutive stock options

number of common shares outstanding used to calculate diluted earnings per common share

Basic earnings

earnings per share

Anti-dilutive

outstanding but not included because the impact of these shares would be anti-dilutive

7 unchanged sentences

components of accumulated other comprehensive loss, included in shareholders’ equity, are as follows:

December 31, 2021

December 31, 2020

(In thousands)

Net unrealized (losses) gains on available-for-sale securities

Net-of-tax amount

Losses on terminated cash flow hedges

Net-of-tax amount

Unrecognized actuarial loss on the defined benefit plan

Net-of-tax amount

Accumulated other comprehensive loss

Net unrealized losses on

available-for-sale securities

Unrecognized actuarial loss on the defined

Accumulated other

comprehensive loss

Accounting Pronouncements.

8 unchanged sentences

This ASU, as amended, is effective for the Company in fiscal years beginning after December

The Company is in the process of implementing the standard.

We have put together a project team that has begun

to identify appropriate loan segments along with related historical losses for each segment and potential models that would be

most appropriate for each individual segment.

We have not quantified the effects of any models, but do expect the standard

to significantly change the approach to calculating our allowance for loan losses.

adoption of the Current Expected Credit (“CECL”) methodology to calculate loan losses became effective for the Company

on January 1, 2023 .

The Company applied the standards’ provisions as a cumulative effect adjustment to retained earnings

as of the first reporting period in which the guidance is effective.

The Company has implemented a third-party software to model

the allowance for loan losses in conformance with this ASU.

The Company completed its allowance for credit losses (“ACL”)

methodology as of the effectiveness date of January 1, 2023 .

To estimate the ACL for loans and off-balance sheet credit exposures,

such as unfunded loan commitments, the Company utilizes a discounted cash flow model that contains additional assumptions to calculate

credit losses over the estimated life of financial assets and off-balance sheet credit exposures and will include the impact of

forecasted economic conditions.

The estimate includes a one-year reasonable and supportable forecast period and thereafter a one-year

reversion period to the historical mean of its macro-economic assumption.

The estimate will also include qualitative factors that

may not be reflected in quantitatively derived results to ensure that the ACL reflects a reasonable estimate of current expected

credit losses.

Upon implementation, the Company’s CECL transitional amount recorded to retained earnings was $ 9,000 , net

In addition, the estimated ACL and allowance for unfunded commitments under both the incurred loss method and CECL will

be affected by various factors, which include but are not limited to, changes in the composition and balance of the Company’s

loan portfolio and unfunded commitments, changes to internal risk ratings of borrowers, changes to the risk-profile of the loan

portfolio, changes in various macro-economic indicators, the impact of COVID-19 and geo-political events on the business environment,

and other factors.

Available-for-sale

and held-to-maturity investment securities at December 31, 2022 and 2021 are summarized as follows:

December 31, 2021

Amortized Cost

Unrealized Gains

Unrealized Losses

(In thousands)

Available-for-sale securities:

Available-for-sale

Debt securities:

Government-sponsored enterprise obligations

State and municipal bonds

Government-sponsored

enterprise obligations

State and municipal

Corporate bonds

Total debt securities

debt securities

Mortgage-backed securities:

Government-sponsored mortgage-backed securities

government guaranteed mortgage-backed securities

Total mortgage-backed securities

Total available-for-sale

Held-to-maturity securities:

Government-sponsored

mortgage-backed securities

guaranteed mortgage-backed securities

mortgage-backed securities

available-for-sale

Held-to-maturity

Debt securities:

Treasury securities

Total debt securities

debt securities

Mortgage-backed securities:

Government-sponsored mortgage-backed securities

Total mortgage-backed securities

Total held-to-maturity

December 31, 2020

Government-sponsored

mortgage-backed securities

held-to-maturity

following table presents the unrealized gains (losses) recognized on marketable equity securities for the periods indicated:

Ended December 31,

(In thousands)

Available-for-sale securities:

Net (losses) gains recognized

during the year on marketable equity securities

Net losses recognized during the year

on equity securities sold during the year

Unrealized gain (loss)

recognized during the year on marketable equity securities still held at year end

Unrealized Gains

Unrealized Losses

(In thousands)

Available-for-sale

Debt securities:

Government-sponsored enterprise obligations

State and municipal bonds

Government-sponsored

enterprise obligations

State and municipal

Corporate bonds

Total debt securities

debt securities

Mortgage-backed securities:

Government-sponsored mortgage-backed securities

government guaranteed mortgage-backed securities

Total mortgage-backed securities

Total available-for-sale

December 31, 2021, government-sponsored enterprise obligations with a fair value of $ 9.5 million and mortgage-backed securities

with a fair value of $ 53.7 million were pledged to secure public deposits and for other purposes as required or permitted by law.

The securities collateralizing public deposits are subject to fluctuations in fair value.

We monitor the fair value of the collateral

on a periodic basis, and pledge additional collateral if necessary based on changes in fair value of collateral or the balances

of such deposits.

Government-sponsored

mortgage-backed securities

guaranteed mortgage-backed securities

mortgage-backed securities

available-for-sale

Held-to-maturity

Debt securities:

debt securities

Mortgage-backed securities:

Government-sponsored

mortgage-backed securities

held-to-maturity

December 31, 2022, U.S.

Treasury securities with a fair value of $ 4.5 million, government-sponsored enterprise obligations with

a fair value of $ 7.6 million and mortgage-backed securities with a fair value of $ 44.7 million were pledged to secure public deposits

and for other purposes as required or permitted by law.

The securities collateralizing public deposits are subject to fluctuations

in fair value.

We monitor the fair value of the collateral on a periodic basis, and pledge additional collateral if necessary

based on changes in fair value of collateral or the balances of such deposits.

amortized cost and fair value of available-for-sale and held-to-maturity securities at December 31, 2022, by final maturity, are

2 unchanged sentences

Held-to-Maturity

Amortized Cost

(In thousands)

Debt securities:

Due after one year through five years

Due after five years through ten years

Due after ten years

Total debt securities

after one year through five years

Due after five

years through ten years

Due after ten

debt securities

Available-for-Sale

Held-to-Maturity

(In thousands)

Mortgage-backed securities:

Due after five years through ten years

Due after ten years

after one year through five years

Due after five

years through ten years

Due after ten

mortgage-backed securities

1 unchanged sentence

realized gains and losses on sales of available-for-sale securities for the years ended December 31, 2022, 2021 and 2020 are as

Years Ended December 31,

Ended December 31,

(In thousands)

2 unchanged sentences

Net (loss) gain realized

from the sale and redemption of available-for-sale securities totaled $ 9.6 million, $ 96.3 million and $ 72.2 million for the years

ended December 31, 2021, 2020 and 2019, respectively.

from the redemption and sales of available-for-sale securities totaled $ 20,000 , $ 9.6 million and $ 96.3 million for the years ended

December 31, 2022, 2021 and 2020, respectively.

pertaining to securities with gross unrealized losses at December 31, 2022 and December 31, 2021, aggregated by investment category

and length of time that individual securities have been in a continuous loss position are as follows:

December 31, 2021

Less Than Twelve Months

Over Twelve Months

Number of Securities

Gross Unrealized Loss

Depreciation from Amortized Cost Basis (%)

Number of Securities

Gross Unrealized Loss

Depreciation from Amortized Cost Basis (%)

(Dollars in thousands)

Than Twelve Months

Twelve Months

of Securities

Unrealized Loss

from Amortized Cost Basis (%)

of Securities

Unrealized Loss

from Amortized Cost Basis (%)

in thousands)

Available-for-sale:

Government-sponsored mortgage-backed securities

Government-sponsored

mortgage-backed securities

government guaranteed mortgage-backed securities

Government-sponsored enterprise obligations

Total available-for-sale

Government-sponsored

enterprise obligations

available-for-sale

Held-to-maturity:

Treasury securities

Government-sponsored mortgage-backed securities

Total held-to-maturity

December 31, 2020

Less Than Twelve Months

Over Twelve Months

(Dollars in thousands)

Government-sponsored

mortgage-backed securities

held-to-maturity

Than Twelve Months

Twelve Months

of Securities

Unrealized Loss

from Amortized Cost Basis (%)

of Securities

Unrealized Loss

from Amortized Cost Basis (%)

in thousands)

Available-for-sale:

Government-sponsored mortgage-backed securities

Government-sponsored

mortgage-backed securities

government guaranteed mortgage-backed securities

Government-sponsored enterprise obligations

Government-sponsored

enterprise obligations

available-for-sale

Held-to-maturity:

Treasury securities

Government-sponsored

mortgage-backed securities

held-to-maturity

the years ended December 31, 2022 and 2021, the Company did not record any other-than-temporary impairment (“OTTI”)

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and duration of the investments’ unrealized loss position.

At December 31, 2021, the Company's corporate and municipal bond portfolios

did not contain any securities below investment grade, as reported by major credit rating agencies.

classifications of loans at the periods indicated were as follows:

At December 31, 2022, there was one corporate bond that was below investment

The Company reviewed the financial strength of this bond and has concluded that the amortized cost remains supported by

the expected future cash flows of the security.

classifications of loans as of the dates indicated were as follows:

(In thousands)

Commercial real estate

Residential real estate:

Residential one-to-four family

Total residential real estate

Commercial and industrial:

Paycheck protection program (“PPP”) loans

Residential real

Residential one-to-four

Total residential

Commercial and industrial:

Total commercial and industrial

Total gross loans

Paycheck protection

program (“PPP”) loans

Commercial and

Total commercial

and industrial

Unamortized PPP loan fees

Unearned premiums and deferred loan fees and costs, net

Total loans, net

Unearned premiums and deferred loan

fees and costs, net

Allowance for loan losses

Modifications/Troubled Debt Restructurings .

banking regulatory agencies, through an Interagency Statement dated April 7, 2020, encouraged financial institutions to work “prudently”

with borrowers who request loan modifications or deferrals as a result of the economic impacts of COVID-19.

Pursuant to Section

4013 of the CARES Act, loans less than 30 days past due as of December 31, 2019 will be considered current for COVID-19 modifications.

Financial institutions can then suspend the requirements under U.S.

GAAP for loan modifications related to COVID-19 that would

otherwise be categorized as TDRs, and suspend any determination of a loan modified as a result of COVID-19 as being a TDR, including

the requirement to determine impairment for accounting under U.S.

The Company adopted this policy election to address COVID-19

loan modification requests that have been received from the earlier of either January 1, 2022 or the 60 th day after

the end of the COVID-19 national emergency.

Company granted deferred loan payments for impacted commercial, residential and consumer customers who experienced financial hardship

due to COVID-19.

The loan payment deferrals could be up to 90 days, depending upon the financial needs of each customer.

deferrals will be re-evaluated on a customer-by-customer basis upon the expiration of the existing deferral period.

As of December

31, 2021, modifications granted under the CARES Act declined to nine loans in the amount of $ 42.5 million, or 2.3 % of total loans,

excluding PPP loans.

As of December 31, 2021, of the $ 42.5 million in remaining modifications granted under the CARES Act, eight

loans in the amount of $ 33.5 million, or 78.8 % of the remaining modifications, were granted to the hotel industry, and one loan

in the amount of $ 9 .0 million was granted to an assisted living facility.

Of the $ 42.5 million in remaining outstanding modifications,

loans in the aggregate amount of $ 33.5 million, or 78.8 %, have resumed interest only payments.

table below breaks out the remaining modifications granted under the CARES Act at December 31, 2021:

Remaining CARES Act Modifications

Loan Segment (1)(2)

($ in millions)

Commercial real estate (3)

Commercial and industrial

Residential real estate

PPP loans of $ 25.3 million and the related deferred fees.

(2) Residential

includes home equity loans and lines of credit.

remaining modification balance includes $ 32.9 million, which resumed regular payments

in January of 2022.

PPP loans of $25.3 million and the related deferred fees.

(2) Residential

includes home equity loans and lines of credit.

remaining modification balance includes $32.9 million, which resumed regular payments

in January of 2022.

Serviced for Others.

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the loans on behalf of the participating lenders.

We share, on a pro-rated basis, with participating lenders any gains or losses

We share with participating lenders, on a pro-rata basis, any gains or losses

that may result from a borrower’s lack of compliance with contractual terms of the loan.

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prepayment speed for the portfolio using the Public Securities Association Standard Prepayment Model ( 105 PSA), weighted average

internal rate of return ( 9.02 %), weighted average servicing fee ( 0.25 %), and net cost to service loans ($ 83.77 per loan).

estimated fair value of capitalized servicing rights may vary significantly in subsequent periods primarily due to changing market

interest rates, and their effect on prepayment speeds and discount rates.

December 31, 2021 and 2020, the Company was servicing residential mortgage loans owned by investors totaling $ 88.2 million and

$ 38.1 million, respectively.

internal rate of return ( 10.01 %), weighted average servicing fee ( 0.25 %), and average cost to service loans ($ 83.71 per loan).

The estimated fair value of capitalized servicing rights may vary significantly in subsequent periods primarily due to changing

market interest rates, and their effect on prepayment speeds and discount rates.

For the years ended December 31, 2022 and 2021,

the Company sold $ 277,000 and $ 59.7 million in residential real estate mortgages with servicing retained and recorded gains on

the sale of mortgages of $ 2,000 and $ 1.4 million, respectively, within non-interest income.

December 31, 2022 and December 31, 2021, the Company was servicing residential mortgage loans owned by investors totaling $ 79.3

million and $ 88.2 million, respectively.

Servicing fee income of $ 208,000 and $ 137,000 was recorded for the years ended December

1 unchanged sentence

summary of the activity in the balances of mortgage servicing rights follows:

Years Ended December 31,

Ended December 31,

(In thousands)

Balance at the beginning of year:

Capitalized mortgage servicing rights

Write-down of mortgage servicing asset to fair value

Balance at the end of year

Fair value at the end of year

at the beginning of year:

Capitalized mortgage

servicing rights

Write-down of

mortgage servicing asset to fair value

at the end of year

value at the end of year

for Loan Losses.

analysis of changes in the allowance for loan losses by segment for the years ended December 31, 2022, 2021 and 2020 is as follows:

and Industrial

(In thousands)

1 unchanged sentence

Balance at December 31, 2020

Provision (credit)

Balance at December 31, 2021

1 unchanged sentence

Balance at December 31, 2022

following table presents information pertaining to the allowance for loan losses by segment, excluding PPP loans, for the

dates indicated:

following table presents information pertaining to the allowance for loan losses by segment as of the dates indicated:

and Industrial

(In thousands)

1 unchanged sentence

Amount of allowance for impaired loans

Amount of allowance for non-impaired loans

Total allowance for loan losses

Impaired loans

Amount of allowance for

non-impaired loans

Impaired loans acquired with deteriorated credit quality

December 31, 2020

Amount of allowance for impaired loans

Amount of allowance for non-impaired loans

Total allowance for loan losses

allowance for loan losses

Impaired loans

Non-impaired loans

Impaired loans acquired with deteriorated credit quality

Impaired loans acquired with deteriorated

credit quality

and Industrial

of allowance for impaired loans (1)

of allowance for non-impaired loans (1)

allowance for loan losses (1)

loans acquired with deteriorated credit quality (1)

31, 2021 non-impaired loan balances exclude PPP loans.

Due and Nonaccrual loans.

following tables present an age analysis of past due loans, excluding PPP loans, as of the dates indicated:

Balance at December 31, 2021

following tables present an age analysis of past due loans as of the dates indicated:

– 59 Days Past Due

– 89 Days Past Due

Days or More Past Due

(In thousands)

December 31, 2022

Commercial real estate

Residential real estate:

Residential one-to-four family

Residential one-to-four

Commercial and industrial

Balance at December 31, 2020

(In thousands)

Commercial real estate

Residential real estate:

Residential one-to-four family

Residential one-to-four

Commercial and industrial

31, 2021 balances exclude PPP loans.

December 31, 2022 and December 31, 2021, all loans past due 90 days or more were carried as nonaccrual.

The ratio of nonaccrual

loans to total loans, excluding PPP loans, was 0.27 % and 0.45 % at December 31, 2021 and December 31, 2020, respectively.

loans to total loans was 0.29 % and 0.27 % at December 31, 2022 and December 31, 2021, respectively.

following is a summary of impaired loans by class:

At December 31, 2021

December 31, 2022

Principal Balance

Recorded Investment

Income Recognized

Impaired Loans

2 unchanged sentences

Residential real estate:

Residential one-to-four family

Residential one-to-four

Commercial and industrial

Total impaired loans

At December 31, 2020

impaired loans

loans acquired with deteriorated credit quality and performing troubled debt restructurings.

December 31, 2021

Principal Balance

Recorded Investment

Income Recognized

Impaired Loans

2 unchanged sentences

Residential real estate:

Residential one-to-four family

Residential one-to-four

Commercial and industrial

Total impaired loans

(1) Includes loans

acquired with deteriorated credit quality and performing troubled debt restructurings.

impaired loans

loans acquired with deteriorated credit quality and performing troubled debt restructurings.

majority of impaired loans are included within the nonaccrual balances;

31 unchanged sentences

were no charge-offs on TDRs during the years ended December 31, 2022 and 2021.

Loan modifications classified as TDRs during the

twelve months ended December 31, 2020 are included in the table below.

Twelve Months Ended

December 31, 2020

Troubled Debt Restructurings

Commercial Real Estate

Commercial and Industrial

the years ended December 31, 2021 and 2020, no TDRs defaulted (defined as 30 days or more past due) within 12 months of restructuring.

During the years ended December 31, 2022 and 2021,

no TDRs defaulted (defined as 30 days or more past due) within 12 months of restructuring.

Acquired with Deteriorated Credit Quality.

following is a summary of loans acquired with evidence of credit deterioration from Chicopee as of December 31, 2022.

Cash Expected

To Be Collected

Required Payments Receivable

Expected To Be Collected

Non-Accretable Discount

(In thousands)

Balance at December 31, 2020

Balance at December 31, 2021

at December 31, 2021

at December 31, 2022

Quality Information.

6 unchanged sentences

Loans in these groups exhibit characteristics that represent acceptable risk.

Loans rated 5 are considered “Special Mention” that may exhibit potential credit weaknesses or downward

trends and are being monitored by management.

Loans in this category are currently protected based on collateral and repayment

capacity and do not constitute undesirable credit risk, but have potential weakness that may result in deterioration of the repayment

process at some future date.

This classification is used if a negative trend is evident in the obligor’s financial situation.

Loans rated 5 are considered “ Special Mention ” and may exhibit potential credit weaknesses or

downward trends and are being monitored by management.

Loans in this category are currently protected based on collateral and

repayment capacity and do not constitute undesirable credit risk, but have potential weakness that may result in deterioration

of the repayment process at some future date.

This classification is used if a negative trend is evident in the obligor’s

financial situation.

Special mention loans do not sufficiently expose the Company to warrant adverse classification.

Loans rated 6 are considered “Substandard.” Loans are classified as substandard if the borrower exhibits

a well-defined weakness and may be inadequately protected by the current net worth and cash flow capacity to pay the current debt.

Loans rated 7 are considered “Doubtful.” Loans classified as doubtful have all the weaknesses inherent

in those classified substandard with the added characteristic that the weaknesses make collection or liquidation of the loan highly

questionable and improbable.

The possibility of some loss is extremely high, but because of specific pending factors that may

work to the advantage and strengthening of the asset, its classification as an estimated loss is deferred until its more exact

status may be determined.

Loans rated 6 are considered “ Substandard .” A loan is classified as substandard if the borrower

exhibits a well-defined weakness and may be inadequately protected by the current net worth and cash flow capacity to pay the

current debt.

Loans rated 7 are considered “ Doubtful .” Loans classified as doubtful have all the weaknesses

inherent in those classified substandard with the added characteristic that the weaknesses make collection or liquidation of the

loan highly questionable and improbable.

The possibility of some loss is extremely high, but because of specific pending factors

that may work to the advantage and strengthening of the asset, its classification as an estimated loss is deferred until its more

exact status may be determined.

Loans rated 8 are considered uncollectible.

10 unchanged sentences

following table presents our loans by risk rating for the periods indicated:

One-to-Four Family

and Industrial

1 unchanged sentence

December 31, 2022

Pass (Rated 1 – 4)

Special Mention (Rated 5)

(Rated 1 – 4)

Special Mention

Substandard (Rated

One-to-Four Family

and Industrial

December 31, 2020

(In thousands)

Pass (Rated 1

Special Mention (Rated 5)

Special Mention

Substandard (Rated

4 unchanged sentences

Furniture and equipment

accumulated depreciation and amortization

Premises and equipment, net

depreciation and amortization

and equipment, net

and amortization expense for the years ended December 31, 2022, 2021 and 2020 amounted to $ 2.3 million, $ 2.3 million and $ 2.1

1 unchanged sentence

AND OTHER INTANGIBLES

December 31, 2021 and December 31, 2020, the Company’s goodwill was related to the acquisition of Chicopee in October 2016.

December 31, 2022 and December 31, 2021, the Company’s goodwill was related to the acquisition of Chicopee Savings Bank

in October 2016.

There was no goodwill impairment recorded during the years ended December 31, 2022 and 2021.

Annually, or more frequently if events

or changes in circumstances warrant such evaluation, the Company evaluates its goodwill for impairment.

Annually, or more

frequently if events or changes in circumstances warrant such evaluation, the Company evaluates its goodwill for impairment.

Deposit Intangibles

6 unchanged sentences

accounts, by type, are summarized as follows for the periods indicated:

At December 31,

(In thousands)

Demand and interest-bearing checking:

Interest-bearing checking accounts

Demand and interest-bearing

Interest-bearing

checking accounts

Demand deposits

Regular savings accounts

Money market accounts

Regular savings

Time deposits

Total deposits

deposits, which are included within time deposits, totaled $ 55.3 million at December 31, 2020.

There were no brokered deposits

at December 31, 2021.

were no brokered deposits at December 31, 2022 and December 31, 2021.

deposits of $250,000 or more totaled $ 131.7 million at December 31, 2022.

Interest expense on time deposits of $250,000 or more

totaled $ 412,000 and $ 2.8 million for the years ended December 31, 2021 and 2020, respectively.

totaled $ 358,000 and $ 412,000 for the years ended December 31, 2022 and 2021, respectively.

scheduled maturities of time deposits for the periods indicated are as follows:

At December 31,

(In thousands)

Total time deposits

time deposits

expense on deposits for the years ended December 31, 2022, 2021 and 2020 is summarized as follows:

Years Ended December 31,

Ended December 31,

(In thousands)

5 unchanged sentences

2020, respectively.

borrowing capacity includes borrowing arrangements at the FHLB, the Federal Reserve Bank (“FRB”), and borrowing arrangements

with correspondent banks.

Company is a member of the FHLB and uses borrowings as an additional source of funding to finance the Company’s lending

and investing activities and to provide liquidity for daily operations.

FHLB advances also provide more pricing and option alternatives

for particular asset/liability needs.

The FHLB provides a central credit facility primarily for member institutions.

member, the Company is required to own capital stock of the FHLB, calculated periodically based primarily on its level of borrowings

from the FHLB.

FHLB borrowings are secured by certain securities from the Company’s investment portfolio not otherwise pledged

as well as certain residential real estate and commercial real estate loans.

Advances are made under several different credit

programs with different lending standards, interest rates and range of maturities.

This relationship is an integral component

of the Company’s asset-liability management program.

At December 31, 2021, the Bank had $ 480.5 million in additional borrowing

capacity from the FHLB.

Company also has an overnight Ideal Way line of credit with the FHLB for $ 9.5 million for the years ended December 31, 2021 and

Interest on this line of credit is payable at a rate determined and reset by the FHLB on a daily basis.

The outstanding

principal is due daily but the portion not repaid will be automatically renewed.

There were no advances outstanding under this

line at December 31, 2021 and 2020.

utilize short-term borrowings and long-term debt as additional sources of funds to finance our lending and investing activities

and to provide liquidity for daily operations.

Total borrowing capacity includes borrowing arrangements at the FHLB, the Federal

Reserve Bank (“FRB”), and borrowing arrangements with correspondent banks.

borrowings can consist of FHLB advances with an original maturity of less than one year, overnight Ideal Way line of credit advances

and other borrowings held as collateral for customer swap arrangements.

Other borrowings totaled $ 6.4 million with a weighted

average rate of 4.33 % at December 31, 2022.

There were no other borrowings outstanding at December 31, 2021.

In addition, short-term

borrowings issued by the FHLB were $ 35 .0 million with a weighted average rate of 4.38 % at December 31, 2022, compared to none

at December 31, 2021.

advances provide more pricing and option alternatives for particular asset/liability needs.

The FHLB provides a central credit

facility primarily for member institutions.

As an FHLB member, the Company is required to own capital stock of the FHLB, calculated

periodically based primarily on its level of borrowings from the FHLB.

FHLB borrowings are secured by certain securities from

the Company’s investment portfolio not otherwise pledged as well as certain residential real estate and commercial real

estate loans.

Advances are made under several different credit programs with different lending standards, interest rates and range

of maturities.

This relationship is an integral component of the Company’s asset-liability management program.

31, 2022, the Bank had $ 407.4 million in additional borrowing capacity from the FHLB.

Company also has an available overnight Ideal Way line of credit with the FHLB of $ 9.5 million as of December 31, 2022.

on this line of credit is payable at a rate determined and reset by the FHLB on a daily basis.

The outstanding principal is due

daily but the portion not repaid will be automatically renewed.

As of December 31, 2022 and December 31, 2021, there were no advances

outstanding under this line.

Company has an available line of credit of $ 4.4 million with the FRB Discount Window at an interest rate determined and reset

2 unchanged sentences

portfolio not otherwise pledged.

As of December 31, 2021 and 2020, there were no advances outstanding under this line.

As of December 31, 2022 and December 31, 2021, there were no advances outstanding under this

Company also has pre-established, non-collateralized overnight borrowing arrangements with large national and regional correspondent

3 unchanged sentences

determined and reset on a daily basis.

At December 31, 2021 and 2020, we had no advances outstanding under these lines.

LONG-TERM DEBT

FHLB Advances.

The following advances

are collateralized by a blanket lien on our residential real estate loans and certain eligible commercial real estate loans.

Weighted Average Rate

As of December 31, 2022 and December 31, 2021, there were no advances outstanding under

The following advances are collateralized by a blanket lien on our residential real estate loans and certain eligible

commercial real estate loans.

(In thousands)

Fixed-rate advances maturing:

Total long-term advances

Cash paid for interest on long-term FHLB

advances totaled $ 513,000 , $ 3.6 million, and $ 4.4 million for the years ended December 31, 2021, 2020, and 2019, respectively.

Subordinated Debt.

On April 20, 2021, the Company completed

an offering of $ 20 million in aggregate principal amount of its 4.875 % fixed-to-floating rate subordinated notes (the “Notes”)

to certain qualified institutional buyers in a private placement transaction.

Unless earlier redeemed, the Notes mature

on May 1, 2031 .

The Notes will bear interest from the initial issue date to, but excluding, May 1, 2026, or the earlier redemption

date, at a fixed rate of 4.875 % per annum, payable quarterly in arrears on May 1, August 1, November 1 and February 1 of each year,

beginning August 1, 2021, and from and including May 1, 2026, but excluding the maturity date or earlier redemption date, equal

to the benchmark rate, which is the 90-day average secured overnight financing rate , plus 412 basis points, determined on the determination

date of the applicable interest period, payable quarterly in arrears on May 1, August 1, November 1 and February 1 of each year.

The Company may also redeem the Notes, in whole or in part, on or after May 1, 2026 , and at any time upon the occurrence of certain

events, subject in each case to the approval of the Board of Governors of the Federal Reserve System (the “Federal Reserve”).

The Notes were designed to qualify as Tier 2 capital under the Federal Reserve’s capital adequacy regulations.

The Notes are presented net of issuance

costs of $ 367,000 as of December 31, 2021, which are being amortized into interest expense over the life of the Notes.

of issuance costs into interest expense was $ 27,000 for the year ended December 31, 2021.

Cash paid for interest on subordinated

debt totaled $ 545,000 for the year ended December 31, 2021.

STOCK PLANS AND EMPLOYEE STOCK OWNERSHIP PLAN

Stock Options.

A summary of the

status of our stock options at December 31, 2021 is presented below:

Exercise Price

Remaining Contractual

Outstanding at December 31, 2020

Outstanding at December 31, 2021

Exercisable at December 31, 2021

Cash received for options exercised during

the years ended December 31, 2021, 2020 and 2019 was $ 193,000 , $ 43,000 and $ 106,000 , respectively.

Restricted Stock Awards.

In May 2014, the Company’s shareholders

approved the 2014 Omnibus Incentive Plan, a stock-based compensation plan (the “2014 RSA Plan”).

Under the 2014 RSA

Plan, up to 516,000 shares of the Company’s common stock were reserved for grants of stock awards, including stock options

and restricted stock, which may be granted to any officer, key employee or non-employee director of WNEB.

Any shares that are not

issued because vesting requirements are not met were available for future issuance under the 2014 RSA Plan.

On an annual basis, the Compensation Committee

(the “Committee”) approves long-term incentive awards out of the 2014 RSA Plan, whereby shares will be granted to eligible

participants of the Company that are nominated by the Chief Executive Officer and approved by the Committee, with vesting over

a three -year term for employees and a one -year term for directors.

Annual employee grants provide for a periodic award that is

both performance and time-based and is designed to recognize the executive’s responsibilities, reward performance and leadership

and as a retention tool.

The objective of the award is to align compensation for the named executive officers and directors over

a multi-year period directly with the interests of our shareholders by motivating and rewarding creation and preservation of long-term

financial strength, shareholder value and relative shareholder return.

In February 2019, 108,718 shares were granted.

Of the 108,718 shares, 64,496 shares were time-based, with 20,262 vesting in one year and 44,234 vesting ratably over a three -year

The remaining 44,222 shares granted are performance-based and are subject to the achievement of the 2019 long-term incentive

Fixed-rate advances

long-term advances

paid for interest on long-term FHLB advances totaled $ 513,000 , and $ 3.6 million for the years ended December 31, 2021, and 2020,

respectively.

There was no cash paid for interest on long-term FHLB advances for the year ended December 31, 2022.

April 20, 2021, the Company completed an offering of $ 20 million in aggregate principal amount of its 4.875 % fixed-to-floating

rate subordinated notes (the “Notes”) to certain qualified institutional buyers in a private placement transaction.

At December 31, 2022, $19.7 million aggregate principle amount of the Notes was outstanding.

earlier redeemed, the Notes mature on May 1, 2031 .

The Notes will bear interest from the initial issue date to, but excluding,

May 1, 2026, or the earlier redemption date, at a fixed rate of 4.875 % per annum, payable quarterly in arrears on May 1, August

1, November 1 and February 1 of each year, beginning August 1, 2021, and from and including May 1, 2026, but excluding the maturity

date or earlier redemption date, equal to the benchmark rate, which is the 90-day average secured overnight financing rate , plus

412 basis points, determined on the determination date of the applicable interest period, payable quarterly in arrears on May

1, August 1, November 1 and February 1 of each year.

The Company may also redeem the Notes, in whole or in part, on or after May

1, 2026 , and at any time upon the occurrence of certain events, subject in each case to the approval of the Board of Governors

of the Federal Reserve System (the “Federal Reserve”).

The Notes were designed to qualify as Tier 2 capital under

the Federal Reserve’s capital adequacy regulations.

Notes are presented net of issuance costs of $ 327,000 as of December 31, 2022, which are being amortized into interest expense

over the life of the Notes.

Amortization of issuance costs into interest expense was $ 40,000 and $ 27,000 for the years ended December

31, 2022 and 2021, respectively.

PLANS AND EMPLOYEE STOCK OWNERSHIP PLAN

A summary of the status of our stock options at December 31, 2022 is presented below:

at December 31, 2021

at December 31, 2022

received for options exercised during the years ended December 31, 2022, 2021 and 2020 was $ 1.2 million, $ 193,000 and $ 43,000 ,

respectively.

Stock Awards.

May 2014, the Company’s shareholders approved the 2014 Omnibus Incentive Plan, a stock-based compensation plan (the “2014

Under the 2014 RSA Plan, up to 516,000 shares of the Company’s common stock were reserved for grants of

stock awards, including stock options and restricted stock, which may be granted to any officer, key employee or non-employee

director of WNEB.

Any shares that were not issued because vesting requirements were not met were available for future issuance

under the 2014 RSA Plan.

an annual basis, the Compensation Committee (the “Committee”) approves long-term incentive awards out of the 2014

RSA Plan, whereby shares will be granted to eligible participants of the Company that are nominated by the Chief Executive Officer

and approved by the Committee, with vesting over a three-year term for employees and a one-year term for directors.

Annual employee

grants provide for a periodic award that is both performance and time-based and is designed to recognize the executive’s

responsibilities, reward performance and leadership and as a retention tool.

The objective of the award is to align compensation

for the named executive officers and directors over a multi-year period directly with the interests of our shareholders by motivating

and rewarding creation and preservation of long-term financial strength, shareholder value and relative shareholder return.

February 2020, 120,053 shares were granted.

Of the 120,053 shares, 69,898 shares were time-based, with 19,760 vesting in one year

and 50,138 vesting ratably over a three-year period.

The remaining 50,155 shares granted are performance-based and are subject

to the achievement of the 2020 long-term incentive performance metrics, with 50 % of the performance-based shares vesting for each

performance metric.

The primary performance metric for 2019 grants was return on equity.

Performance shares will be earned based

upon how the Company performs relative to threshold, target and maximum absolute goals (i.e.

Company-specific, not relative to

a peer index) on an annual performance period, but will be distributed at the end of the three-year period.

The threshold, target and stretch metrics

under the 2019 grants are as follows:

Return on Equity Metrics

Performance Period Ending

The primary performance metrics for the 2020 grants are return on equity and earnings per share.

Performance-based

shares will be earned based upon how the Company performs relative to threshold, target and maximum absolute goals (i.e.

Company-specific,

not relative to a peer index) on an annual performance period for return on equity metrics and for a three-year cumulative performance

period for earnings per share, but will be distributed at the end of the three-year period as earned.

threshold, target and stretch metrics under the 2020 grants are as follows:

on Equity Metrics

Period Ending

December 31, 2020

1 unchanged sentence

December 31, 2022

Eligible participants will be able to earn

between 50 % (“threshold” performance), 100 % (“target” performance) and 150 % (“maximum” performance).

In February 2020, 120,053 shares were granted.

Of the 120,053 shares, 69,898 shares were time-based, with 19,760 vesting in one year and 50,138 vesting ratably over a three -year

Per Share Metrics

Period Ending

Three-year Cumulative Diluted Earnings

participants will be able to earn between 50 % (“threshold” performance), 100 % (“target” performance) and

150 % (“maximum” performance).

fair market value of shares awarded is based on the market price at the grant date, recorded as unearned compensation and amortized

over the applicable vesting period.

Performance-based metrics are monitored on a quarterly basis in order to compare actual results

to the performance metric, with any necessary adjustments being recognized through share-based compensation expense and unearned

compensation.

February 2021, 19,827 shares were granted to our directors, with a one-year vesting period.

At December 31, 2021, there were no

remaining shares available to grant under the 2014 RSA Plan.

May 2021, the Company’s shareholders approved the 2021 Omnibus Incentive Plan, a stock-based compensation plan (the “2021

Under the 2021 RSA Plan, up to 700,000 shares of the Company’s common stock were reserved for grants of

stock awards, including stock options and restricted stock, which may be granted to any officer, key employee or non-employee

director of the Company.

Any shares that are not issued because vesting requirements are not met will be available for future

issuance under the 2021 RSA Plan.

May 2021, 122,362 shares were granted.

Of the 122,362 shares, 61,181 shares were time-based, vesting ratably over a three-year

The remaining 61,181 shares granted are performance-based and are subject to the achievement of the 2021 long-term incentive

performance metrics, with 50 % of the performance-shares vesting for each performance metric.

The primary performance metrics for

the 2020 grants were return on equity and earnings per share.

Performance shares will be earned based upon how the Company performs

relative to threshold, target and maximum absolute goals (i.e.

Company-specific, not relative to a peer index) on an annual performance

period for return on equity metrics and for a three-year cumulative performance period for earnings per share, but will be distributed

at the end of the three -year period as earned.

The threshold, target and stretch metrics

under the 2020 grants are as follows:

Return on Equity Metrics

Performance Period Ending

performance metrics, with 50 % of the performance-based shares vesting for each performance metric.

The primary performance metrics

for the 2021 grants are return on equity and earnings per share.

Performance-based shares will be earned based upon how the Company

performs relative to threshold, target and maximum absolute goals (i.e.

Company-specific, not relative to a peer index) on an

annual performance period for return on equity metrics and for a three-year cumulative performance period for earnings per share,

but will be distributed at the end of the three-year period as earned.

threshold, target and stretch metrics under the 2021 grants are as follows:

on Equity Metrics

Period Ending

December 31, 2021

1 unchanged sentence

December 31, 2023

Earnings Per Share Metrics

Performance Period Ending

Three-year Cumulative Diluted Earnings Per Share

Eligible participants will be able to earn

between 50 % (“threshold” performance), 100 % (“target” performance) and 150 % (“maximum” performance).

The fair market value of shares awarded

is based on the market price at the grant date, recorded as unearned compensation and amortized over the applicable vesting period.

Performance-based metrics are monitored on a quarterly basis in order to compare actual results to the performance metric, with

any necessary adjustments being recognized through share-based compensation expense and unearned compensation.

In February 2021, 19,827 shares were granted

to our directors, with a one-year vesting period.

At December 31, 2021, there were no remaining shares available to grant under

the 2014 RSA Plan.

In May 2021, the Company’s shareholders

approved the 2021 Omnibus Incentive Plan, a stock-based compensation plan (the “2021 RSA Plan”).

Under the 2021 RSA

Plan, up to 700,000 shares of the Company’s common stock were reserved for grants of stock awards, including stock options

and restricted stock, which may be granted to any officer, key employee or non-employee director of the Company.

Any shares that

are not issued because vesting requirements are not met will be available for future issuance under the 2021 RSA Plan.

In May 2021, 122,362 shares were granted.

Of the 122,362 shares, 61,181 shares were time-based, vesting ratably over a three -year period.

The remaining 61,181 shares granted

are performance-based and are subject to the achievement of the 2021 long-term incentive performance metrics, with 50 % of the performance-shares

vesting for each performance metric.

The primary performance metrics for the 2021 grants were return on equity and earnings per

Performance shares will be earned based upon how the Company performs relative to threshold, target and maximum absolute

Company-specific, not relative to a peer index) on an annual performance period for return on equity metrics and for

a three -year cumulative performance period for earnings per share, but will be distributed at the end of the three-year period

The threshold, target and stretch metrics

under the 2021 grants are as follows:

Return on Equity Metrics

Performance Period Ending

Per Share Metrics

Period Ending

Three-year Cumulative Diluted Earnings

March 2022, 137,151 shares were granted.

Of the 137,151 shares, 77,463 shares were time-based, with 17,775 vesting in one year

and 59,688 vesting ratably over a three-year period.

The remaining 59,688 shares granted are performance-based and are subject

to the achievement of the 2022 long-term incentive performance metrics, with 50 % of the performance-based shares vesting for each

performance metric.

The primary performance metrics for the 2022 grants are return on equity and earnings per share.

Performance-based

shares will be earned based upon how the Company performs relative to threshold, target and maximum absolute goals (i.e.

Company-specific,

not relative to a peer index) on an annual performance period for return on equity metrics and for a three-year cumulative performance

period for earnings per share, but will be distributed at the end of the three-year period as earned.

threshold, target and stretch metrics under the 2022 grants are as follows:

on Equity Metrics

Period Ending

December 31, 2022

1 unchanged sentence

December 31, 2024

Earnings Per Share Metrics

Performance Period Ending

Three-year Cumulative Diluted Earnings Per Share

At December 31, 2021, there were 577,638 remaining shares available

to grant under the 2021 RSA Plan.

A summary of the status of restricted stock awards at December

31, 2021 and 2020 is presented below:

Weighted Average

Grant Date Fair Value

Balance at December 31, 2020

Shares granted

Shares forfeited

Shares vested

Balance at December 31, 2021

Weighted Average

Grant Date Fair Value

Balance at December 31, 2019

Shares granted

Shares forfeited

Shares vested

Per Share Metrics

Period Ending

Three-year Cumulative Diluted Earnings

December 31, 2022, there were 459,508 remaining shares available to grant under the 2021 RSA Plan.

summary of the status of restricted stock awards at December 31, 2022 and 2021 is presented below:

Grant Date Fair

at December 31, 2021

at December 31, 2022

Grant Date Fair

Balance at December

We recorded total

expense for restricted stock awards of $ 1.3 million, $ 834,000 and $ 773,000 for the years ended December 31, 2021, 2020 and 2019,

respectively.

The aggregate fair value of restricted stock vested during 2021 was $ 823,000 .

Tax (shortfall) benefits related to

equity incentive plan expense were $ ( 5,000 ) , $ ( 23,000 ) and $ 21,000 for the years ended December 31, 2021, 2020 and 2019, respectively.

Unrecognized compensation cost for stock awards was $ 1.2 million at December 31, 2021 with a remaining term of 1.7 years.

Employee Stock

Ownership Plan (“ESOP”).

We established an ESOP for the benefit of each employee that has reached the age of 21

and has completed at least 1,000 hours of service in the previous 12-month period.

In January 2002, as part of the initial stock

conversion, we provided a loan to the ESOP Trust which was used to purchase 8 %, or 1,305,359 shares, of the common stock sold in

the initial public offering.

In January 2007, as

part of the second-step stock conversion, we provided an additional loan to the ESOP Trust which was used to purchase 4.0 %, or

736,000 shares, of the 18,400,000 shares of common stock sold in the offering.

The 2002 and 2007 loans bear an interest rate of

8.0 % and provide for annual payments of interest and principal.

at December 31, 2021

the remaining principal balances are payable as follows:

recorded total expense for restricted stock awards of $ 1.1 million, $ 1.3 million and $ 834,000 for the years ended December 31,

2022, 2021 and 2020, respectively.

The aggregate fair value of restricted stock vested during 2022 was $ 1.2 million.

(shortfall) related to equity incentive plan expense were $ 16,000 , $ ( 5,000 ) and $ ( 23,000 ) for the years ended December 31, 2022,

2021 and 2020, respectively.

Unrecognized compensation cost for stock awards was $ 1.2 million at December 31, 2022 with a remaining

term of 1.5 years.

Stock Ownership Plan (“ESOP”).

We established an ESOP for the benefit of each employee that has reached the age

of 21 and has completed at least 1,000 hours of service in the previous 12-month period.

In January 2002, as part of the initial

stock conversion, we provided a loan to the ESOP Trust which was used to purchase 8 %, or 1,305,359 shares, of the common stock

sold in the initial public offering.

January 2007, as part of the second-step stock conversion, we provided an additional loan to the ESOP Trust which was used to

purchase 4.0 %, or 736,000 shares, of the 18,400,000 shares of common stock sold in the offering.

The 2002 and 2007 loans bear

an interest rate of 8.0 % and provide for annual payments of interest and principal.

December 31, 2022, the remaining principal balances are payable as follows:

(In thousands)

We have committed to make contributions

to the ESOP sufficient to support the debt service of the loans.

The loans are secured by the shares purchased, which are held

in a suspense account for allocation among the participants as the loans are paid.

Total compensation expense applicable to the

ESOP amounted to $ 682,000 , $ 551,000 and $ 834,000 for the years ended December 31, 2021, 2020 and 2019, respectively.

Shares held by the ESOP include the following

at December 31, 2021 and 2020:

have committed to make contributions to the ESOP sufficient to support the debt service of the loans.

The loans are secured by

the shares purchased, which are held in a suspense account for allocation among the participants as the loans are paid.

compensation expense applicable to the ESOP amounted to $ 683,000 , $ 682,000 and $ 551,000 for the years ended December 31, 2022,

2021 and 2020, respectively.

held by the ESOP include the following at December 31, 2022 and 2021:

Committed to be allocated

Cash dividends declared

and received on allocated shares are allocated to participants and charged to retained earnings.

Cash dividends declared and received

on unallocated shares are held in suspense and are applied to repay the outstanding debt of the ESOP.

The fair value of unallocated

shares was $ 3.9 million and $ 3.6 million at December 31, 2021 and 2020, respectively.

ESOP shares are considered outstanding for

earnings per share calculations when they are committed to be allocated.

Unallocated ESOP shares are excluded from earnings per

share calculations.

The cost of unearned shares to be allocated to ESOP participants for future services not yet performed is reflected

as a reduction of shareholders’ equity.

RETIREMENT PLANS AND EMPLOYEE BENEFITS

Pension Plan .

We provide a defined

benefit pension plan for eligible employees (the “Plan”).

Employees must work a minimum of 1,000 hours per year to

be eligible for the Plan.

Eligible employees become vested in the Plan after five years of service.

The Plan assets are currently

invested in various pooled separate investment accounts offered by Principal Life Insurance Company, a division of Principal Financial

Group, who is the Custodian of the Plan (the “Custodian”).

The Plan is administered by an officer of Westfield Bank

(the “Plan Administrator”).

On September 30, 2016, we effected a soft freeze on the Plan and therefore no new participants

will be included in the Plan after such effective date.

The following table provides information

for the Plan at or for the years ended December 31 :

Years Ended December 31,

dividends declared and received on allocated shares are allocated to participants and charged to retained earnings.

Cash dividends

declared and received on unallocated shares are held in suspense and are applied to repay the outstanding debt of the ESOP.

fair value of unallocated shares was $ 3.5 million and $ 3.9 million at December 31, 2022 and 2021, respectively.

ESOP shares are

considered outstanding for earnings per share calculations when they are committed to be allocated.

Unallocated ESOP shares are

excluded from earnings per share calculations.

The cost of unearned shares to be allocated to ESOP participants for future services

not yet performed is reflected as a reduction of shareholders’ equity.

PLANS AND EMPLOYEE BENEFITS

We provide a DB Plan for eligible employees.

Employees must work a minimum of 1,000 hours per year to be eligible for

Eligible employees become vested in the DB Plan after five years of service.

In August 2022, the DB Plan’s

assets were reallocated into fixed income pooled separate investment accounts offered by Principal Life Insurance Company, a division

of Principal Financial Group, serving as Custodian of the DB Plan (the “Custodian”).

The DB Plan is administered by

an officer of Westfield Bank (the “DB Plan Administrator”).

On September 30, 2016, we effected a soft freeze on the

DB Plan and therefore no new participants were included in the DB Plan after such effective date.

July 26, 2022, the Board of Directors approved the termination of the DB Plan, which became effective as of October 31, 2022,

subject to regulatory approvals.

Once the Company has received regulatory approval to terminate the DB Plan, which is expected

in the first quarter of 2023, the Company will make an additional cash contribution during the second quarter of 2023, if necessary,

in order to fully fund the DB Plan on a plan termination basis, followed by the purchase of annuity contracts to transfer its

remaining liabilities under the DB Plan, for those participants who do not opt for a one-time lump sum payment.

At December 31,

2022, the Company reversed $ 7.3 million in net unrealized losses recorded in accumulated other comprehensive income attributed

to both the DB Plan curtailment resulting from the termination of the DB Plan as well as changes in discount rates.

the Company recorded a gain on curtailment of $ 2.8 million through non-interest income.

following table provides information for the DB Plan at or for the years ended December 31:

Ended December 31,

(In thousands)

Change in benefit obligation:

Benefit obligation at beginning of year

Change in benefit

Benefit obligation at beginning

Actuarial (gain) loss

Effect of curtailment

Benefits paid

Benefit obligation at end of year

Benefit obligation

at end of year

Change in plan assets:

Fair value of plan assets at beginning of year

Fair value of plan assets at beginning

Actual return on plan assets

1 unchanged sentence

Benefits paid

Fair value of plan assets at end of year

Funded status and accrued benefit at end of year

Accumulated benefit obligation at end of year

The following actuarial assumptions were

used in determining the pension benefit obligation:

Fair value of plan assets at end of

Funded status and

accrued benefit at end of year

Accumulated benefit

obligation at end of year

following actuarial assumptions were used in determining the pension benefit obligation:

Discount rate

Rate of compensation increase

The discount rate used to determine the

pension benefit obligation increased from 2.50 % at December 31, 2020 to 2.85 % at December 31, 2021, resulting in a decrease in

the Plan’s pension benefit obligation for the year ended December 31, 2021.

Net pension cost includes the following

components for the years ended December 31:

discount rate used to determine the pension benefit obligation increased from 2.85 % at December 31, 2021 to 5.05 % at December

31, 2022, resulting in a decrease in the DB Plan’s pension benefit obligation for the year ended December 31, 2022.

the DB Plan was terminated effective October 31, 2022, subject to regulatory approvals expected in the first quarter of 2023.

The DB Plan termination resulted in $ 5.1 million in curtailment of future salary recognition, which also decreased the DB Plan’s

pension benefit obligation for the year ended December 31, 2022.

pension cost includes the following components for the years ended December 31:

(In thousands)

2 unchanged sentences

Amortization of actuarial loss

Net periodic pension cost

The following actuarial assumptions were

used in determining the net periodic pension cost for the years ended December 31:

periodic pension cost

following actuarial assumptions were used in determining the net periodic pension cost for the years ended December 31:

Discount rate

1 unchanged sentence

Rate of compensation increase

The following is a summary of the Plan’s investments for

the years ended December 31:

following is a summary of the DB Plan’s investments for the years ended December 31:

(In thousands)

Pooled separate investment accounts:

International equity

International

Small/mid U.S.

Pooled separate accounts are valued at

the Net Asset Value (“NAV”) of units held by the Plan at year end.

The NAV is used as a practical expedient to estimate

This practical expedient would not be used if it was determined to be probable that the funds will sell the underlying

investments for an amount different from the reported NAV.

Participant transactions (purchases and sales) may occur daily.

preceding method described may produce a fair value calculation that may not be indicative of net realizable value or reflective

of future fair values.

Furthermore, although the Plan administrators believes the valuation methods are appropriate and consistent

with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial

instruments could result in a different fair value measurement at the reporting date.

The following table summarizes the investments

for which fair value is measured using NAV per share as a practical expedient for the years ended December 31, 2021 and 2020 .

are no pertinent redemption restrictions for these investments;

the redemption notice period is applicable only to the Plan.

Frequency (if

Currently Eligible)

Redemption Notice

(In thousands)

December 31, 2021

separate accounts are valued at the Net Asset Value (“NAV”) of units held by the DB Plan at year end.

The NAV is used

as a practical expedient to estimate fair value.

This practical expedient would not be used if it was determined to be probable

that the funds will sell the underlying investments for an amount different from the reported NAV.

Participant transactions (purchases

and sales) may occur daily.

The preceding method described may produce a fair value calculation that may not be indicative of

net realizable value or reflective of future fair values.

Furthermore, although the DB Plan administrators believes the valuation

methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine

the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

following table summarizes the investments for which fair value is measured using NAV per share as a practical expedient for the

years ended December 31, 2022 and 2021.

There are no pertinent redemption restrictions for these investments;

the redemption notice

period is applicable only to the DB Plan.

Frequency (if Currently Eligible)

Notice Period

December 31, 2021

The defined benefit plan offers a mixture

of fixed income, equity and real assets as the underlying investment structure for its retirement structure for the pension plan.

The target allocation mix for the pension plan for 2021 was an equity-based investment deployment of 50 % of total portfolio assets

based on advice received from an external advisory firm with confirmation by the Bank’s Investment Committee.

The remainder

of the portfolio is allocated to fixed income at 50 % of total assets.

The investment objective is to diversify investments across

a spectrum of investment types to limit risks from large market swings and to provide anticipated stabilized investment returns.

Trustees of the Plan select investment managers for the portfolio and a second investment advisory firm is retained to provide

allocation analysis.

The overall investment objective is to diversify equity investments across a spectrum of types, small cap,

large cap and international, along with investment styles such as growth and value.

We estimate that the benefits to be paid from

the pension plan for years ended December 31 are as follows:

Benefit Payments to Participants

(In thousands)

defined benefit plan offers a mixture of fixed income, equity and real assets as the underlying investment structure for its retirement

structure for the pension plan.

In August 2022, the DB Plan’s assets were reallocated into short-and-long duration fixed

income pooled separate investment accounts offered by the Custodian.

In anticipation of DB Plan settlement during the second quarter

of 2023, the overall investment objective is to preserve principal and protect DB Plan assets from market volatility.

the DB Plan termination, the target allocation mix for the pension plan for 2022 was an equity-based investment deployment of

50 % of total portfolio assets based on advice received from an external advisory firm with confirmation by the Bank’s Investment

The remainder of the portfolio was allocated to fixed income at 50 % of total assets.

Trustees of the DB Plan select

investment managers for the portfolio and a second investment advisory firm is retained to provide allocation analysis.

estimate that the benefits to be paid from the pension plan for years ended December 31 are as follows:

Benefit Payments to

In aggregate for

We have not yet determined the amount of

the contribution we expect to make to the plan during the fiscal year ending December 31, 2022.

401(k) Defined Contribution Plan.

The Company has a 401(k) defined contribution

employee benefit plan.

The 401(k) plan allows eligible employees to contribute a percentage of their earnings to the plan.

of the employee contribution, as determined by the Compensation Committee of the Board of Directors, is matched by the Company.

In 2021, 2020 and 2019, the Company’s percentage match was 50 % up to the first 6 % contributed by the employee.

The Company’s expense for the 401(k)

plan match was $ 476,000 , $ 468,000 and $ 423,000 for the years ended December 31, 2021, 2020 and 2019, respectively.

DERIVATIVES AND HEDGING ACTIVITIES

Risk Management Objective of Using Derivatives.

The Company is exposed to certain risks

arising from both our business operations and economic conditions.

We principally manage our exposures to a wide variety of business

and operational risks through management of our core business activities.

We manage economic risks, including interest rate, liquidity,

and credit risk, primarily by managing the amount, sources, and duration of our assets and liabilities and the use of derivative

financial instruments.

Specifically, we entered into derivative financial instruments to manage exposures that arise from business

activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined

by interest rates.

Our derivative financial instruments are used to manage differences in the amount, timing, and duration of our

known or expected cash receipts and our known or expected cash payments principally related to certain variable rate loan assets

and variable rate borrowings.

The following table presents information

about interest rate swaps at December 31, 2021 and December 31, 2020:

Defined Contribution Plan.

Company has a 401(k) defined contribution employee benefit plan.

The 401(k) plan allows eligible employees to contribute a percentage

of their earnings to the plan.

A portion of the employee contribution, as determined by the Compensation Committee of the Board

of Directors, is matched by the Company.

In 2022, 2021 and 2020, the Company’s percentage match was 50 % up to the first

6 % contributed by the employee.

Company’s expense for the 401(k) plan match was $ 470,000 , $ 476,000 and $ 468,000 for the years ended December 31, 2022, 2021

and 2020, respectively.

AND HEDGING ACTIVITIES

Management Objective of Using Derivatives.

Company is exposed to certain risks arising from both our business operations and economic conditions.

We principally manage our

exposures to a wide variety of business and operational risks through management of our core business activities.

We manage economic

risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of our assets

and liabilities and the use of derivative financial instruments.

Specifically, we entered into derivative financial instruments

to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash

amounts, the value of which are determined by interest rates.

Our derivative financial instruments are used to manage differences

in the amount, timing, and duration of our known or expected cash receipts and our known or expected cash payments principally

related to certain variable rate loan assets and variable rate borrowings.

following table presents information about interest rate swaps at December 31, 2022 and December 31, 2021:

December 31, 2022

Weighted Average

Weighted Average Rate

Estimated Fair

(In thousands)

1 unchanged sentence

Non-hedging derivatives:

Loan-level swaps – dealer

Loan-level swaps – borrower

Forward starting loan-level swaps - dealer

Forward starting loan-level swaps - borrower

swaps – dealer

Loan-level swaps

December 31, 2021

Weighted Average

Weighted Average Rate

Estimated Fair

(In thousands)

1 unchanged sentence

Non-hedging derivatives:

swaps – dealer

Loan-level swaps

Forward starting

loan-level swaps - dealer

Forward starting

loan-level swaps - borrower

Forward starting loan-level swaps - dealer

Forward starting loan-level swaps - borrower

At December 31, 2021, the Company had $ 76.8

million in derivatives designated as non-hedging instruments and no derivatives designated as hedging instruments, compared to

$ 71.9 million in derivatives designated as non-hedging instruments and no derivatives designated as hedging instruments at December

Cash Flow Hedges of Interest Rate Risk.

The Company’s objectives in using

interest rate derivatives are to add stability to interest income and expense and to manage its exposure to interest rate movements.

To accomplish this objective, we entered into interest rate swaps as part of our interest rate risk management strategy.

interest rate swaps are designated as cash flow hedges and involve the receipt of variable rate amounts from a counterparty in

exchange for our making fixed payments.

For derivatives designated as cash flow

hedges, the changes in the fair value of the derivative is initially reported in other comprehensive income (outside of earnings),

net of tax, and subsequently reclassified to earnings when the hedged transaction affects earnings.

We are hedging our exposure

to the variability in future cash flows for forecasted transactions over a maximum period of six years (excluding forecasted payment

of variable interest on existing financial instruments).

Non-hedging Derivatives.

Derivatives not designated as hedges are

not speculative but rather result from a service the Company provides to certain customers.

The Company executes loan level derivative

products such as interest-rate swap agreements with commercial banking customers to aid them in managing their interest-rate risk

by converting floating-rate loan payments to fixed-rate loan payments.

The Company concurrently enters into offsetting swaps with

a third party financial institution, effectively minimizing its net risk exposure resulting from such transactions.

The third-party

financial institution exchanges the customer's fixed-rate loan payments for floating-rate loan payments.

As the interest-rate swap

agreements associated with this program do not meet hedge accounting requirements, changes in the fair value are recognized directly

Fair Values of Derivative Instruments

on the Balance Sheet.

The table below presents the fair value

of our derivative financial instruments not designated as hedging instruments as well as our classification on the balance sheet

as of December 31, 2021 and December 31, 2020.

Asset Derivatives

Liability Derivatives

Balance Sheet

December 31, 2022, the Company had $ 75.5 million in derivatives designated as non-hedging instruments and no derivatives

designated as hedging instruments, compared to $ 76.8 million in derivatives designated as non-hedging instruments and no derivatives

designated as hedging instruments at December 31, 2021.

Flow Hedges of Interest Rate Risk.

Company’s objectives in using interest rate derivatives are to add stability to interest income and expense and to manage

its exposure to interest rate movements.

To accomplish these objectives, we entered into interest rate swaps as part of our interest

rate risk management strategy.

These interest rate swaps are designated as cash flow hedges and involve the receipt of variable

rate amounts from a counterparty in exchange for our making fixed payments.

derivatives designated as cash flow hedges, the changes in the fair value of the derivative is initially reported in other comprehensive

income (outside of earnings), net of tax, and subsequently reclassified to earnings when the hedged transaction affects earnings.

We are hedging our exposure to the variability in future cash flows for forecasted transactions over a maximum period of six years

(excluding forecasted payment of variable interest on existing financial instruments).

There were no cash flow hedges on the balance

sheet as of December 31, 2022 or 2021.

not designated as hedges are not speculative, but rather result from a service the Company provides to certain customers.

Company executes loan-level derivative products such as interest-rate swap agreements with commercial banking customers to aid

them in managing their interest-rate risk by converting floating-rate loan payments to fixed-rate loan payments.

The Company concurrently

enters into offsetting swaps with a third-party financial institution, effectively minimizing the Company’s net risk exposure

resulting from such transactions.

The third-party financial institution exchanges the customer’s fixed-rate loan payments for

floating-rate loan payments.

As the interest-rate swap agreements associated with this program do not meet hedge accounting requirements,

changes in the fair value are recognized directly in earnings.

Values of Derivative Instruments on the Balance Sheet.

table below presents the fair value of our derivative financial instruments designated as non-hedging instruments as well as our

classification on the balance sheet as of December 31, 2022 and December 31, 2021.

(In thousands)

not designated as hedging instruments:

rate swap – with customer counterparties

rate swap – with dealer counterparties

derivatives not designated as hedging instruments

Interest rate swap – with customers

Other Liabilities

Interest rate swap – with counterparties

Total derivatives not designated as hedging instruments

Asset Derivatives

Liability Derivatives

Balance Sheet

(In thousands)

not designated as hedging instruments:

rate swap – with customer counterparties

rate swap – with dealer counterparties

derivatives not designated as hedging instruments

Interest rate swap – with customers

Other Liabilities

Interest rate swap – with counterparties

Total derivatives not designated as hedging instruments

Effect of Derivative Instruments in

the Consolidated Statements of Net Income and Changes in Shareholders’ Equity.

The table below presents the pre-tax net gains (losses) of our

cash flow hedges for the periods indicated:

Amount of Gain (Loss) Recognized in OCI on Derivative

Twelve Months Ended December 31,

(In thousands)

of Derivative Instruments in the Consolidated Statements of Net Income and Changes in Shareholders’ Equity.

table below presents the pre-tax net gains (losses) of our cash flow hedges for the periods indicated:

of Gain (Loss) Recognized in OCI on Derivative

Months Ended December 31,

Interest rate swaps

Amounts reported in accumulated other comprehensive

loss related to these derivatives are reclassified to interest expense as interest payments are made on our designated rate sensitive

The table below presents the amount reclassified from accumulated other comprehensive loss into net income for interest

rate swaps and termination fees:

Amount of Gain Reclassified from OCI into Expense (Effective Portion)

Twelve Months Ended December 31,

(In thousands)

reported in accumulated other comprehensive loss related to these derivatives are reclassified to interest expense as interest

payments are made on our designated rate sensitive liabilities.

table below presents the amount reclassified from accumulated other comprehensive loss into net income for interest rate swaps

and termination fees:

of Gain Reclassified from OCI into Expense (Effective Portion)

Months Ended December 31,

Interest rate swaps

As of December 31, 2021, the Company no

longer has any outstanding cash flow hedges.

Credit-risk-related Contingent Features

By using derivative financial instruments,

we expose ourselves to credit risk.

Credit risk is the risk of failure by the counterparty to perform under the terms of the derivative

When the fair value of a derivative contract is positive, the counterparty owes us, which creates credit risk for us.

When the fair value of a derivative is negative, we owe the counterparty and, therefore, it does not possess credit risk.

risk in derivative instruments is mitigated by entering into transactions with highly-rated counterparties that we believe to be

creditworthy and by limiting the amount of exposure to each counterparty.

We have agreements with our derivative

counterparties that contain a provision where if we default on any of our indebtedness, including default where repayment of

the indebtedness has not been accelerated by the lender, then we could also be declared in default on our derivative obligations.

We also have agreements with certain of our derivative counterparties that contain a provision where if we fail to maintain our

status as well capitalized, then the counterparty could terminate the derivative positions and we would be required to settle our

obligations under the agreements.

Certain of our agreements with our derivative counterparties contain provisions where if a formal

administrative action by a federal or state regulatory agency occurs that materially changes our creditworthiness in an adverse

manner, we may be required to fully collateralize our obligations under the derivative instrument.

At December 31, 2021, we had a net asset

position of $ 368,000 , and at December 31, 2020, a net liability position $ 1.3 million with our counterparties.

December 31, 2022 and 2021, the Company did not have any outstanding cash flow hedges.

Credit-risk-related

Contingent Features

using derivative financial instruments, we expose ourselves to credit risk.

Credit risk is the risk of failure by the counterparty

to perform under the terms of the derivative contract.

When the fair value of a derivative contract is positive, the counterparty

owes us, which creates credit risk for us.

When the fair value of a derivative is negative, we owe the counterparty and, therefore,

it does not possess credit risk.

The credit risk in derivative instruments is mitigated by entering into transactions with highly-rated

counterparties that we believe to be creditworthy and by limiting the amount of exposure to each counterparty.

have agreements with our derivative counterparties that contain a provision where if we default on any of our indebtedness, including default

where repayment of the indebtedness has not been accelerated by the lender, then we could also be declared in default

on our derivative obligations.

We also have agreements with certain of our derivative counterparties that contain a provision

where if we fail to maintain our status as well capitalized, then the counterparty could terminate the derivative positions and

we would be required to settle our obligations under the agreements.

Certain of our agreements with our derivative counterparties

contain provisions where if a formal administrative action by a federal or state regulatory agency occurs that materially changes

our creditworthiness in an adverse manner, we may be required to fully collateralize our obligations under the derivative instrument.

December 31, 2022, we had minimum collateral posting thresholds with certain of our derivative counterparties.

As of December

2021, we had minimum collateral posting thresholds with certain of our derivative counterparties and no collateral against our

obligations under these agreements.

If we had breached any of these provisions at December 31, 2021, we could have been required

to settle our obligations under the agreements at the termination value.

The Company determines if an arrangement

is a lease at inception.

Operating leases are included within other assets and other liabilities in our consolidated balance sheets.

Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term and lease liabilities

represent our obligation to make lease payments arising from the lease.

Operating lease ROU assets and liabilities are recognized

at commencement date based on the present value of lease payments over the lease term.

As our leases do not provide an implicit

rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present

value of lease payments.

Our lease terms may include options to extend or terminate the lease when it is reasonably certain that

we will exercise that option.

Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company has lease agreements with lease

and non-lease components, which are generally accounted for separately.

We have not elected the practical expedient to account

for lease and non-lease components as one lease component.

Additionally, the Company has elected the practical expedient whereby

expired leases, existing operating lease classifications and initial direct costs will not be reassessed at inception.

has operating leases for certain of our banking offices and ATMs.

Our leases have remaining lease terms of less than one year to

seventeen years , some of which include options to extend the leases for additional five-year terms up to fifteen years .

The components of lease expense were as follows:

Year Ended December 31,

(In thousands)

Amortization of ROU assets

Interest on lease liabilities

Operating lease cost

Supplemental cash flow information related to leases was as

Year Ended December 31,

31, 2022, we were not required to post collateral under these agreements because we did not have any derivatives in a liability

position with those counterparties.

Company has lease agreements with lease and non-lease components, which are generally accounted for separately.

We have not elected

the practical expedient to account for lease and non-lease components as one lease component.

The Company has operating leases

for certain of our banking offices and ATMs.

Our leases have remaining lease terms of less than one year to sixteen years , some

of which include options to extend the leases for additional five-year terms up to ten years .

Operating lease costs were $ 1.5

million and $ 1.6 million for the years ended December 31, 2022 and 2021.

cash flow information related to leases was as follows:

Ended December 31,

(In thousands)

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases

ROU assets obtained in exchange for lease obligations:

Cash paid for amounts included in the

measurement of lease liabilities:

cash flows from operating leases

ROU assets obtained in exchange for

lease obligations:

Operating leases

Supplemental balance sheet information related to leases was

December 31, 2021

December 31, 2020

balance sheet information related to leases was as follows:

(In thousands)

1 unchanged sentence

Operating lease liabilities

The weighted average remaining lease term for our operating

leases was 10.2 years with a weighted average discount rate of 2.81 % at December 31, 2021.

Maturities of the Company’s operating

lease liabilities were as follows (in thousands):

weighted average remaining lease term for our operating leases was 9.8 years with a weighted average discount rate of 3.22 % at

December 31, 2022.

Future undiscounted lease payments for the Company’s operating lease liabilities were as follows (in

Years Ending December

Total lease payments

lease payments

Less imputed interest

REGULATORY CAPITAL

The Company and the Bank are subject to

various regulatory capital requirements administered by the federal banking agencies.

Failure to meet minimum capital requirements

can initiate certain mandatory and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct

material effect on our consolidated financial statements.

Under capital adequacy guidelines and the regulatory framework for prompt

corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and

certain off-balance sheet items as calculated under regulatory accounting practices.

The capital amounts and classification are

also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Prompt corrective

action provisions are not applicable to savings and loan holding companies.

Federal banking regulations require the

Company and the Bank to maintain minimum amounts and ratios of total, common equity Tier 1, Tier 1 and total capital to risk-weighted

assets and Tier 1 capital to average assets, as set forth in the table below.

Additionally, community banking institutions must

maintain a capital conservation buffer of common equity Tier 1 capital in an amount greater than 2.5 % of total risk-weighted assets

to avoid being subject to limitations on capital distributions and discretionary bonuses.

At December 31, 2021, we exceeded each

of the applicable regulatory capital requirements including the capital conservation buffer.

As of December 31, 2021, the most

recent notification from the Office of Comptroller of the Currency categorized the Bank as “well-capitalized” under

the regulatory framework for prompt corrective action.

To be categorized as “well-capitalized,” the Bank must maintain

minimum total risk-based, Tier 1 risk-based, Common Equity Tier 1 risk-based, and Tier 1 leverage ratios as set forth in the following

Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies.

to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary, actions by regulators

that, if undertaken, could have a direct material effect on our consolidated financial statements.

Under capital adequacy guidelines

and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative

measures of assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices.

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

and other factors.

Prompt corrective action provisions are not applicable to savings and loan holding companies.

banking regulations require the Company and the Bank to maintain minimum amounts and ratios of total, common equity Tier 1, Tier

1 and total capital to risk-weighted assets and Tier 1 capital to average assets, as set forth in the table below.

Additionally,

community banking institutions must maintain a capital conservation buffer of common equity Tier 1 capital in an amount greater

than 2.5 % of total risk-weighted assets to avoid being subject to limitations on capital distributions and discretionary bonuses.

December 31, 2022, we exceeded each of the applicable regulatory capital requirements including the capital conservation buffer.

As of December 31, 2022, the most recent notification from the Office of Comptroller of the Currency categorized the Bank as “well-capitalized”

under the regulatory framework for prompt corrective action.

To be categorized as “well-capitalized,” the Bank must

maintain minimum total risk-based, Tier 1 risk-based, Common Equity Tier 1 risk-based, and Tier 1 leverage ratios as set forth

in the following table.

There are no conditions or events since that notification that management believes would change our category.

Our actual capital ratios of December 31,

2021 and December 31, 2020 are also presented in the following table .

Minimum For Capital

Adequacy Purpose

Minimum To Be Well

Capitalized Under Prompt

Corrective Action Provisions

actual capital ratios of December 31, 2022 and December 31, 2021 are also presented in the following table.

For Capital Adequacy Purpose

To Be Well Capitalized Under Prompt Corrective Action Provisions

(Dollars in thousands)

December 31, 2021

Total Capital (to Risk Weighted Assets):

Tier 1 Capital (to Risk Weighted Assets):

Common Equity Tier 1 Capital (to Risk Weighted

Tier 1 Leverage Ratio (to Adjusted Average Assets):

December 31, 2020

Total Capital (to Risk Weighted Assets):

Tier 1 Capital (to Risk Weighted Assets):

Common Equity Tier 1 Capital (to Risk Weighted Assets):

Tier 1 Leverage Ratio (to Adjusted Average Assets):

The following is a reconciliation of our GAAP capital to regulatory

Tier 1, Common Equity Tier 1 and total capital :

Capital (to Risk Weighted Assets):

1 Capital (to Risk Weighted Assets):

Equity Tier 1 Capital (to Risk Weighted Assets):

1 Leverage Ratio (to Adjusted Average Assets):

For Capital Adequacy Purpose

To Be Well Capitalized Under Prompt Corrective Action Provisions

(Dollars in thousands)

Capital (to Risk Weighted Assets):

1 Capital (to Risk Weighted Assets):

Equity Tier 1 Capital (to Risk Weighted Assets):

1 Leverage Ratio (to Adjusted Average Assets):

following is a reconciliation of our GAAP capital to regulatory Tier 1, Common Equity Tier 1 and total capital:

(In thousands)

Consolidated GAAP capital

Net unrealized losses (gains) on available-for-sale securities, net of tax

Unrealized loss on defined benefit pension plan, net of tax

Accumulated net loss on cash flow hedges, net of tax

Intangible assets, net of associated deferred tax liabilities

Tier 1 and Common Equity Tier 1 capital

Allowance for loan losses for regulatory capital

Subordinated debt

Total regulatory capital

On October 27, 2020, the Company announced

that the Board of Directors authorized a stock repurchase plan (the “2020 Plan”) under which the Company was authorized

to purchase up to 1.3 million shares, or 5 % of its outstanding common stock.

On May 20, 2021, the Company announced the completion

of the 2020 Plan.

On April 27, 2021, the Company announced that the Board of Directors authorized a stock repurchase plan (the

“2021 Plan”) under which the Company is authorized to repurchase up to 2.4 million shares, or 10 % of its outstanding

common stock.

During the twelve months ended December 31, 2021, the Company repurchased 2,758,051 shares under both the 2020 Plan

and 2021 Plan at an average price of $ 8.33 .

At December 31, 2021, there were 677,319 shares available for repurchase under the

We are subject to dividend restrictions

imposed by various regulators, including a limitation on the total of all dividends that the Bank may pay to the Company in any

calendar year, to an amount that shall not exceed the Bank’s net income for the current year, plus its net income retained

for the two previous years, without regulatory approval.

At December 31, 2021 and 2020, the Bank had no retained earnings available

for payment of dividends without prior regulatory approval.

In addition, the Bank may not declare or pay dividends on, and we may

not repurchase, any of our shares of common stock if the effect thereof would cause shareholders’ equity to be reduced below

applicable regulatory capital maintenance requirements or if such declaration, payment or repurchase would otherwise violate regulatory

requirements.

The Bank will be prohibited from paying cash dividends to the Company to the extent that any such payment would reduce

the Bank’s capital below required capital levels.

Accordingly, $ 146.1 million and $ 133.1 million of our equity in the net

assets of the Bank was restricted at December 31, 2021 and 2020, respectively.

Income taxes consist of the following:

Years Ended December 31,

Net unrealized losses on available-for-sale

securities, net of tax

Unrealized loss on defined benefit pension

plan, net of tax

Intangible assets, net of associated

deferred tax liabilities

1 and Common Equity Tier 1 capital

Allowance for

loan losses for regulatory capital

regulatory capital

October 13, 2022, the Company announced the completion of its previously authorized stock repurchase plan (the “2021 Plan”)

pursuant to which the Company was authorized to repurchase up to 2.4 million shares, or 10 % of its outstanding common stock, as

of the date the 2021 Plan was adopted.

On July 26, 2022, the Board of Directors authorized a new stock repurchase plan (the “2022

Plan”), pursuant to which the Company is authorized to repurchase up to 1.1 million shares, which is approximately 5 .0%

of the Company’s outstanding common stock as of the date the 2022 Plan was adopted.

During the three months ended December

31, 2022, the Company repurchased 78,826 shares of common stock under the 2022 Plan and during the twelve months ended December

31, 2022, the Company repurchased 720,975 shares of common stock under both the 2021 and 2022 Plans.

As of December 31, 2022,

there were 1,056,344 shares of common stock available for repurchase under the 2022 Plan.

are subject to dividend restrictions imposed by various regulators, including a limitation on the total of all dividends that

the Bank may pay to the Company in any calendar year, to an amount that shall not exceed the Bank’s net income for the current

year, plus its net income retained for the two previous years, without regulatory approval.

At December 31, 2022, the Bank had

$ 33.6 million in retained earnings available for payment of dividends without prior regulatory approval.

In addition, the Bank

may not declare or pay dividends on, and we may not repurchase, any of our shares of common stock if the effect thereof would

cause shareholders’ equity to be reduced below applicable regulatory capital maintenance requirements or if such declaration,

payment or repurchase would otherwise violate regulatory requirements.

The Bank will be prohibited from paying cash dividends

to the Company to the extent that any such payment would reduce the Bank’s capital below required capital levels.

$ 156.9 million and $ 146.1 million of our equity in the net assets of the Bank was restricted at December 31, 2022 and 2021, respectively.

taxes consist of the following:

Ended December 31,

(In thousands)

2 unchanged sentences

Total tax provision

The differences between the statutory federal income tax at

a rate of 21% and the effective tax are summarized below:

Years Ended December 31,

differences between the statutory federal income tax at a rate of 21% and the effective tax are summarized below:

Ended December 31,

(In thousands)

Statutory federal income tax

Statutory federal income

Increase (decrease) resulting from:

State taxes, net of federal tax benefit

Tax exempt income

Bank-owned life insurance (BOLI)

BOLI death benefit

Option exercise tax (benefit) shortfall

Effective tax

Cash paid for income taxes for the years ended December 31,

2021, 2020 and 2019 was $ 6.9 million, $ 5.8 million and $ 4.2 million, respectively.

The tax effects of each item that gives rise to deferred taxes

are as follows:

taxes, net of federal tax benefit

life insurance (BOLI)

exercise tax (benefit) shortfall

paid for income taxes for the years ended December 31, 2022, 2021 and 2020 was $ 7.4 million, $ 6.9 million and $ 5.8 million, respectively.

tax effects of each item that gives rise to deferred taxes are as follows:

(In thousands)

Deferred tax assets:

Allowance for loan losses

Defined benefit plan

unrealized loss on available-for-sale securities

Allowance for

Lease liability

Employee benefit and share-based compensation plans

Employee benefit

and share-based compensation plans

Accrued expenses

Defined benefit

Net unrealized

loss on marketable equity securities

Nonaccrual interest

Net unrealized loss on derivative and hedging activity

Net unrealized loss on available-for-sale securities

Purchased mortgage servicing rights

Gross deferred tax assets

Purchased mortgage

servicing rights

deferred tax assets

Deferred tax liabilities:

Lease right-of-use asset

Lease right-of-use

Deferred loan

Fixed asset depreciation

Purchase accounting adjustments, net

Net unrealized gain on available-for-sale securities

Deferred loan fees

Gross deferred tax liabilities

Net deferred tax asset

The federal income tax reserve for loan

losses at the Bank’s base year is $ 9.4 million.

If any portion of the reserve is used for purposes other than to absorb loan

losses, approximately 150 % of the amount actually used, limited to the amount of the reserve, would be subject to taxation in the

fiscal year in which used.

As the Bank intends to use the reserve solely to absorb loan losses, a deferred tax liability of $ 2.6

million has not been provided.

We do not have any uncertain tax positions

at December 31, 2021 or 2020 which require accrual or disclosure.

We record interest and penalties as part of income tax expense.

No interest was recorded for the years ended December 31, 2021 and 2020, and no penalties were recorded for the years ended December

31, 2021, 2020 and 2019.

Our income tax returns

are subject to review and examination by federal and state tax authorities.

We are currently open to audit under the applicable

statutes of limitations by the Internal Revenue Service for the years ended December 31, 2018 through 2021.

The years open to examination

by state taxing authorities vary by jurisdiction;

Purchase accounting

adjustments, net

deferred tax liabilities

Net deferred tax

federal income tax reserve for loan losses at the Bank’s base year is $ 9.4 million.

If any portion of the reserve is used

for purposes other than to absorb loan losses, approximately 150 % of the amount actually used, limited to the amount of the reserve,

would be subject to taxation in the fiscal year in which used.

As the Bank intends to use the reserve solely to absorb loan losses,

a deferred tax liability of $ 2.6 million has not been provided.

do not have any uncertain tax positions at December 31, 2022 or 2021 which require accrual or disclosure.

We record interest and

penalties as part of income tax expense.

No interest or penalties were recorded for the years ended December 31, 2022, 2021 and

income tax returns are subject to review and examination by federal and state tax authorities.

We are currently open to audit

under the applicable statutes of limitations by the Internal Revenue Service for the years ended December 31, 2019 through 2022.

The years open to examination by state taxing authorities vary by jurisdiction;

however, no years prior to 2019 are open.

TRANSACTIONS WITH DIRECTORS AND EXECUTIVE OFFICERS

We have had, and expect

to have in the future, loans with our directors and executive officers including their affiliates.

Such loans, in our opinion,

do not include more than the normal risk of collectability or other unfavorable features.

Following is a summary of activity for

Years Ended December 31,

WITH DIRECTORS AND EXECUTIVE OFFICERS

have had, and expect to have in the future, loans with our directors and executive officers including their affiliates.

in our opinion, do not include more than the normal risk of collectability or other unfavorable features.

Following is a summary

of activity for such loans:

Ended December 31,

(In thousands)

Balance at beginning of year

Balance at beginning of

Principal distributions

Repayments of principal

Balance at end of year

COMMITMENTS AND CONTINGENCIES

Loan Commitments.

In the normal course of business, various

commitments and contingent liabilities are outstanding, such as standby letters of credit and commitments to extend credit with

off-balance-sheet risk that are not reflected in the consolidated financial statements.

Financial instruments with off-balance-sheet

risk involve elements of credit, interest rate, liquidity and market risk.

We do not anticipate any significant losses

as a result of these transactions.

The following summarizes these financial instruments and other commitments and contingent liabilities

at their contract amounts:

Change in related party status

at end of year

AND CONTINGENCIES

the normal course of business, various commitments and contingent liabilities are outstanding, such as standby letters of credit

and commitments to extend credit with off-balance-sheet risk that are not reflected in the consolidated financial statements.

Financial instruments with off-balance-sheet risk involve elements of credit, interest rate, liquidity and market risk.

do not anticipate any significant losses as a result of these transactions.

The following summarizes these financial instruments

and other commitments and contingent liabilities at their contract amounts:

(In thousands)

Commitments to extend credit:

Unused lines of credit

lines of credit

Loan commitments

Existing construction loan agreements

Standby letters of credit

We use the same credit policies in making

commitments and conditional obligations as for on balance sheet instruments.

Commitments to extend credit are agreements

to lend to a customer as long as there is no violation of any condition established in the contract.

Commitments generally have

fixed expiration dates or other termination clauses and may require payment of a fee.

Since some commitments expire without being

drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

We evaluate each customer’s

creditworthiness on a case-by-case basis.

The amount of collateral obtained, if deemed necessary by us upon extension of credit,

is based on management’s credit evaluation of the counterparty.

Collateral held varies but may include accounts receivable,

inventory, property, plant and equipment, and income-producing commercial properties.

Standby letters of credit are written conditional

commitments issued by us that guarantee the performance of a customer to a third party.

Those guarantees are primarily issued to

support public and private borrowing arrangements.

The credit risk involved in issuing letters of credit is essentially the same

as that involved in extending loan facilities to customers.

At December 31, 2021, outstanding commitments

to extend credit totaled $ 543.2 million, with $ 101.5 million in fixed rate commitments with interest rates ranging from 2.75 % to

18.00 % and $ 441.7 million in variable rate commitments.

At December 31, 2020, outstanding commitments to extend credit totaled

$ 460.4 million, with $ 86.5 million in fixed rate commitments with interest rates ranging from 2.45 % to 18.00 % and $ 373.9 million

in variable rate commitments.

We also have risk participation agreements

(“RPAs”) with another financial institution.

The RPAs are a guarantee to share credit risk associated with an interest

rate swap on participation loans in the event of counterparty default.

As such, we accept a portion of the credit risk in order

to participate in the loans and we receive a one-time fee.

The interest rate swap is collateralized (generally by real estate or

business assets) by us and the third party, which limits the credit risk associated with the RPAs.

Per the terms of the RPAs, we

must pledge collateral equal to our exposure for the interest rate swap.

We monitor overall collateral as part of our off-balance

sheet liability analysis, and at December 31, 2021, believe sufficient collateral is available to cover potential swap losses.

At December 31, 2021, we had no off-balance sheet exposure to RPAs.

In the ordinary course of business, we

are party to various legal proceedings, none of which, in our opinion, will have a material effect on our consolidated financial

position or results of operations.

Vendor Contract.

The Company entered into a long-term contractual

obligation with a vendor for use of its core provider and ancillary services beginning in 2016.

Total remaining contractual obligations

outstanding with this vendor as of December 31, 2021 were estimated to be $ 14.2 million, with $ 4.5 million expected to be paid

within one year and the remaining $ 9.7 million to be paid within the next five years.

Investment Commitments.

The Bank is a limited partner in a Small

Business Investment Company (“SBIC”) and committed to contribute capital of $ 3 .0 million to the partnership.

31, 2021, the SBIC currently has a book value of $ 2.7 million and is included in other assets.

The unfunded commitment to the partnership

was $ 300,000 at December 31, 2021.

Employment and change of control agreements.

We have entered into employment and change

of control agreements with certain senior officers.

The initial term of the employment agreements is for three years subject to

separate one-year extensions as approved by the Board of Directors at the end of each applicable fiscal year.

Each employment agreement

provides for minimum annual salaries, discretionary cash bonuses and other fringe benefits as well as severance benefits upon certain

terminations of employment that are not for cause.

The change of control agreements expire one year following a notice of non-extension

and only provide for severance benefits upon certain terminations of employment that are not for cause and that are related to

a change of control of the Company or the Bank.

FAIR VALUE OF ASSETS AND LIABLITIES

Determination of Fair Value.

We use fair value measurements to record

fair value adjustments to certain assets and liabilities and to determine fair value disclosures.

The fair value of a financial

instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between

market participants at the measurement date.

Fair value is best determined based upon quoted market prices.

However, in many instances,

there are no quoted market prices for our various financial instruments.

In cases where quoted market prices are not available,

fair values are based on estimates using present value or other valuation techniques.

Those techniques are significantly affected

by the assumptions used, including the discount rate and estimates of future cash flows.

Accordingly, the fair value estimates

may not be realized in an immediate settlement of the instrument.

Methods and assumptions

for valuing our financial instruments are set forth below.

Estimated fair values are calculated based on the value without regard

to any premium or discount that may result from concentrations of ownership of a financial instrument, possible tax ramifications

or estimated transaction cost.

The securities measured

at fair value in Level 1 are based on quoted market prices in an active exchange market.

These securities include marketable equity

All other securities are measured at fair value in Level 2 and are based on pricing models that consider standard input

factors such as observable market data, benchmark yields, interest rate volatilities, broker/dealer quotes, credit spreads and

new issue data.

These securities include government-sponsored enterprise obligations, state and municipal obligations, residential

Existing construction

loan agreements

Standby letters

use the same credit policies in making commitments and conditional obligations as for on balance sheet instruments.

to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract.

Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee.

Since some commitments

expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

each customer’s creditworthiness on a case-by-case basis.

The amount of collateral obtained, if deemed necessary by us upon

extension of credit, is based on management’s credit evaluation of the counterparty.

Collateral held varies but may include

accounts receivable, inventory, property, plant and equipment, and income-producing commercial properties.

letters of credit are written conditional commitments that guarantee the performance of a customer to a third party.

Those guarantees

are primarily issued to support public and private borrowing arrangements.

The credit risk involved in issuing letters of credit

is essentially the same as that involved in extending loan facilities to customers.

At December 31, 2022 and 2021, outstanding

standby letter of credit commitments totaled $ 22.0 million and $ 30.2 million, respectively, with standby letters of credit issued

by the FHLB on our behalf totaling $ 16.4 million and $ 23.4 million, respectively.

December 31, 2022, outstanding commitments to extend credit totaled $ 505.5 million, with $ 107.1 million in fixed rate commitments

with interest rates ranging from 1.99 % to 18.00 % and $ 398.4 million in variable rate commitments.

At December 31, 2021, outstanding

commitments to extend credit totaled $ 543.2 million, with $ 101.5 million in fixed rate commitments with interest rates ranging

from 1.99 % to 18.00 % and $ 441.7 million in variable rate commitments.

also have risk participation agreements (“RPAs”) with another financial institution.

The RPAs are a guarantee to share

credit risk associated with an interest rate swap on participation loans in the event of counterparty default.

As such, we accept

a portion of the credit risk in order to participate in the loans and we receive a one-time fee.

The interest rate swap is collateralized

(generally by real estate or business assets) by us and the third party, which limits the credit risk associated with the RPAs.

Per the terms of the RPAs, we must pledge collateral equal to our exposure for the interest rate swap.

We monitor overall collateral

as part of our off-balance sheet liability analysis, and at December 31, 2022, believe sufficient collateral is available to cover

potential swap losses.

the ordinary course of business, we are party to various legal proceedings, none of which, in our opinion, will have a material

effect on our consolidated financial position or results of operations.

Company entered into a long-term contractual obligation with a vendor for use of its core provider and ancillary services beginning

Total remaining contractual obligations outstanding with this vendor as of December 31, 2022 were estimated to be $ 10.7

million, with $ 4.9 million expected to be paid within one year and the remaining $ 5.8 million to be paid within the next three

Bank is a limited partner in a Small Business Investment Company (“SBIC”) and committed to contribute capital of $ 3 .0

million to the partnership.

At December 31, 2022, the SBIC currently has a book value of $ 2.7 million and is included in other

The unfunded commitment to the partnership was $ 300,000 at December 31, 2022.

and change of control agreements.

have entered into employment and change of control agreements with certain senior officers.

The initial term of the employment

agreements is for three years subject to separate one-year extensions as approved by the Board of Directors at the end of each

applicable fiscal year.

Each employment agreement provides for minimum annual salaries, discretionary cash bonuses and other fringe

benefits as well as severance benefits upon certain terminations of employment that are not for cause.

The change of control agreements

expire one year following a notice of non-extension and only provide for severance benefits upon certain terminations of employment

that are not for cause and that are related to a change of control of the Company or the Bank.

VALUE OF ASSETS AND LIABLITIES

Determination

of Fair Value.

use fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures.

The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability

in an orderly transaction between market participants at the measurement date.

Fair value is best determined based upon quoted

market prices.

However, in many instances, there are no quoted market prices for our various financial instruments.

In cases where

quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques.

Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash

Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument.

and assumptions for valuing our financial instruments are set forth below.

Estimated fair values are calculated based on the value

without regard to any premium or discount that may result from concentrations of ownership of a financial instrument, possible

tax ramifications or estimated transaction cost.

The securities measured at fair value in Level 1 are based on quoted market prices in an active exchange market.

securities are measured at fair value in Level 2 and are based on pricing models that consider standard input factors such as

observable market data, benchmark yields, interest rate volatilities, broker/dealer quotes, credit spreads and new issue data.

These securities include government-sponsored enterprise obligations, state and municipal obligations, corporate bonds, residential

mortgage-backed securities guaranteed and sponsored by the U.S.

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from a third-party pricing service and are not adjusted by management.

Interest rate swaps.

The valuation

of our interest rate swaps is obtained from a third-party pricing service and is determined using a discounted cash flow analysis

on the expected cash flows of each derivative.

The pricing analysis is based on observable inputs for the contractual terms of

the derivatives, including the period to maturity and interest rate curves.

We have determined that the majority of the inputs

used to value our interest rate derivatives fall within Level 2 of the fair value hierarchy.

Assets and Liabilities Measured at Fair

Value on a Recurring Basis.

Assets and liabilities measured at fair

value on a recurring basis are summarized below:

December 31, 2021

The valuation of our interest rate swaps is obtained from a third-party pricing service and is determined using

a discounted cash flow analysis on the expected cash flows of each derivative.

The pricing analysis is based on observable inputs

for the contractual terms of the derivatives, including the period to maturity and interest rate curves.

We have determined that

the majority of the inputs used to value our interest rate derivatives fall within Level 2 of the fair value hierarchy.

and Liabilities Measured at Fair Value on a Recurring Basis.

and liabilities measured at fair value on a recurring basis are summarized below:

(In thousands)

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Interest rate swaps

December 31, 2020

(In thousands)

3 unchanged sentences

Interest rate swaps

There were no transfers to or from Level

1 and 2 for assets measured at fair value on a recurring basis during the years ended December 31, 2021 and 2020.

Assets Measured at Fair Value on a Non-recurring

We may also be required, from time to time,

to measure certain other financial assets at fair value on a nonrecurring basis in accordance with generally accepted accounting

These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs

of individual assets.

The following table summarizes the fair value hierarchy used to determine the carrying values of the related

assets as of December 31, 2021 and 2020.

At December 31, 2021

December 31, 2021

(In thousands)

Impaired Loans

At December 31, 2020

were no transfers to or from Level 1 and 2 for assets measured at fair value on a recurring basis during the years ended December

31, 2022 and 2021.

Measured at Fair Value on a Non-recurring Basis.

may also be required, from time to time, to measure certain other financial assets at fair value on a nonrecurring basis in accordance

with generally accepted accounting principles.

These adjustments to fair value usually result from application of lower-of-cost-or-market

accounting or write-downs of individual assets.

The following table summarizes the fair value hierarchy used to determine the

carrying values of the related assets as of December 31, 2022.

December 31, 2022

2 unchanged sentences

Impaired Loans

The amount of impaired loans represents

the carrying value, net of the related write-down or valuation allowance of impaired loans for which adjustments are based on the

estimated fair value of the underlying collateral.

The fair value of impaired loans with specific allocations of the

allowance for loan losses is generally based on real estate appraisals performed by independent licensed or certified appraisers.

appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach.

are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income

data available.

Management will discount appraisals as deemed necessary based on the date of the appraisal and new information

deemed relevant to the valuation.

Such adjustments are typically significant and result in a Level 3 classification

of the inputs for determining fair value.

The resulting losses were recognized in earnings through the provision for loan losses.

There were no liabilities measured at fair value on a non-recurring basis at December 31, 2021 and 2020.

Summary of Fair Values of Financial

The estimated fair values of our financial

instruments are as follows:

December 31, 2021

amount of impaired loans represents the carrying value, net of the related write-down or valuation allowance of impaired loans

for which adjustments are based on the estimated fair value of the underlying collateral.

The fair value of impaired

loans with specific allocations of the allowance for loan losses is generally based on real estate appraisals performed by independent

licensed or certified appraisers.

These appraisals may utilize a single valuation approach or a combination of approaches

including comparable sales and the income approach.

Adjustments are routinely made in the appraisal process by the

appraisers to adjust for differences between the comparable sales and income data available.

Management will discount

appraisals as deemed necessary based on the date of the appraisal and new information deemed relevant to the valuation.

adjustments are typically significant and result in a Level 3 classification of the inputs for determining fair value.

The resulting

losses were recognized in earnings through the provision for loan losses.

There were no liabilities measured at fair value on

a non-recurring basis at December 31, 2021.

of Fair Values of Financial Instruments.

estimated fair values of our financial instruments are as follows:

(In thousands)

Cash and cash equivalents

and cash equivalents

Securities held-to-maturity

Securities available-for-sale

Marketable equity securities

Federal Home Loan Bank of Boston and other restricted stock

Accrued interest receivable

Mortgage servicing rights

Marketable equity

Loan Bank of Boston and other restricted stock

Accrued interest

Mortgage servicing

Derivative asset

Short-term borrowings

Long-term debt

Accrued interest payable

Accrued interest

Derivative liabilities

December 31, 2020

(In thousands)

Cash and cash equivalents

and cash equivalents

Securities held-to-maturity

Securities available-for-sale

Marketable equity securities

Federal Home Loan Bank of Boston and other restricted stock

Accrued interest receivable

Mortgage servicing rights

Marketable equity

Loan Bank of Boston and other restricted stock

Accrued interest

Mortgage servicing

Derivative asset

Long-term debt

Accrued interest payable

Accrued interest

Derivative liabilities

Limitations .

Fair value estimates

are made at a specific point in time, based on relevant market information and information about the financial instrument.

estimates do not reflect any premium or discount that could result from offering for sale at one time our entire holdings of a

particular financial instrument.

Where quoted market prices are not available, fair value estimates are based on judgments regarding

future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial

These estimates do not reflect any premium or discount that could result from offering for sale at one time our entire

holdings of a particular financial instrument.

Where quoted market prices are not available, fair value estimates are based on

judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments,

and other factors.

These estimates are subjective in nature and involve uncertainties and matters of significant judgment.

Changes in assumptions

could significantly affect the estimates.

The Company, through its bank subsidiary,

provides a broad range of financial services to individuals and companies primarily in western Massachusetts and northern Connecticut.

These services include commercial lending, residential lending and consumer lending, checking, savings and time deposits, cash

management, and wealth management.

Substantially all of the Company's revenues, profits, and assets are derived by the Bank from

banking products and services.

The Company did not have any reportable segments for the years ended December 31, 2021, 2020 or

CONDENSED PARENT COMPANY FINANCIAL STATEMENTS

The condensed balance sheets

of the parent company are as follows :

in assumptions could significantly affect the estimates.

Company, through its bank subsidiary, provides a broad range of financial services to individuals and companies primarily in western

Massachusetts and northern Connecticut.

These services include commercial lending, residential lending and consumer lending, checking,

savings and time deposits, cash management, and wealth management.

Substantially all of the Company’s revenues, profits, and assets

are derived by the Bank from banking products and services.

The Company did not have any reportable segments for the years ended

December 31, 2022, 2021 or 2020.

PARENT COMPANY FINANCIAL STATEMENTS

condensed balance sheets of the parent company are as follows:

(In thousands)

Cash equivalents

Investment in subsidiaries

Investment in

ESOP loan receivable

1 unchanged sentence

Other liabilities

TOTAL LIABILITIES AND EQUITY

The condensed statements of net income for the parent company

are as follows:

Years Ended December 31,

LIABILITIES AND EQUITY

condensed statements of net income for the parent company are as follows:

Ended December 31,

(In thousands)

5 unchanged sentences

Other expenses

Total operating expense

Income before equity in undistributed income of subsidiaries and income taxes

Equity in undistributed income (loss) of subsidiaries

Total operating

Income before equity in undistributed

income of subsidiaries and income taxes

Equity in undistributed income (loss)

of subsidiaries

Net income before taxes

Income tax benefit

The condensed statements of cash flows of the parent company

are as follows:

Years Ended December 31,

condensed statements of cash flows of the parent company are as follows:

Ended December 31,

(In thousands)

OPERATING ACTIVITIES:

Equity in undistributed (income) loss of subsidiaries

Net amortization of premiums on subordinated debt

Change in other liabilities

Change in other assets

Net cash provided by operating activities

Equity in undistributed

(income) loss of subsidiaries

Net amortization

of premiums on subordinated debt

Change in other

cash provided by operating activities

Purchase of securities

Sales of securities

Net cash provided by investing activities

Cash dividends paid

Common stock repurchased

Proceeds from issuance of subordinated debt

Payment of subordinated debt issue costs

Issuance of common stock in connection with stock option exercises

Net cash used in financing activities

NET CHANGE IN CASH AND

CASH EQUIVALENTS

cash provided by investing activities

Cash dividends

Proceeds from

issuance of subordinated debt

Payment of subordinated

debt issue costs

Issuance of common

stock in connection with stock option exercises

cash used in financing activities

NET CHANGE IN CASH

CASH AND CASH EQUIVALENTS

Beginning of year

Supplemental cash flow information:

Net change in due to broker for common stock repurchased

SUMMARY OF QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

The following tables

present a summary of our quarterly financial information for the periods indicated.

The year-to-date totals may differ slightly

due to rounding.

All unaudited interim financial statements furnished shall reflect all adjustments which are, in the opinion of

management, necessary to a fair statement of the results for interim periods presented and are of a normal and recurring nature,

unless otherwise noted.

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

(Dollars in thousands, except per share amounts)

Net change in due to broker for common

stock repurchased

OF QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

following tables present a summary of our quarterly financial information for the periods indicated.

The year-to-date totals may

differ slightly due to rounding.

All unaudited interim financial statements furnished shall reflect all adjustments which are,

in the opinion of management, necessary to a fair statement of the results for interim periods presented and are of a normal and

recurring nature, unless otherwise noted.

(Dollars in thousands,

except per share amounts)

and dividend income

interest and dividend income

Interest expense

Net interest and dividend income

Provision (credit) for loan losses

(Loss) gain on available-for-sale securities, net

Unrealized (losses) gains on marketable equity securities, net

Loss on interest rate swap termination

Gain on non-marketable equity investments

BOLI death benefit

Gain on sale of mortgages

Other non-interest income

provision for loan losses

on available-for-sale securities, net

(losses) gains on marketable equity securities, net

on non-marketable equity investments

on defined benefit plan curtailment (1)

on sale of mortgages

non-interest income

Non-interest expense

Income before income taxes

Income tax provision

Basic earnings per share

Diluted earnings per share

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

(Dollars in thousands, except per share amounts)

before income taxes

tax provision

Basic earnings

earnings per share

increase in non-interest income for the three months ended December 31, 2022 was due

to a $ 2.8 million gain on defined benefit plan curtailment resulting from the termination

of the Company’s pension plan, which became effective October 31, 2022, subject

to regulatory approvals.

(Dollars in thousands,

except per share amounts)

and dividend income

interest and dividend income

Interest expense (1)

Net interest and dividend income

Provision for loan losses

(credit) for loan losses

gain on available-for-sale securities, net

Unrealized gains (losses) on marketable equity securities, net

Loss on interest rate swap termination

Other non-interest income

(losses) gains on marketable equity securities, net

on interest rate swap termination

on non-marketable equity investments

death benefit

on sale of mortgages

non-interest income

Non-interest expense (2)

Income before income taxes

Income tax provision

Basic earnings per share

Diluted earnings per share

(1) The decrease in interest expense for the three months ended December 31, 2020 was due to a decrease

of $ 933,000 in interest expense on deposits and $ 611,000 in interest expense on FHLB borrowings, both resulting from repricing

liabilities in the continued low-rate environment as well as the pay down of high-rate FHLB borrowings.

(2) The increase in non-interest expense for the three months ended December 31, 2020 was primarily driven by a $ 987,000 expense

resulting from the early extinguishment of $ 50 .0 million in FHLB borrowings.

(1) The decrease in interest expense for the three months ended December 31, 2020 was due to a decrease

of $933,000 in interest expense on deposits and $611,000 in interest expense on FHLB borrowings, both resulting from repricing

liabilities in the continued low-rate environment as well as the pay down of high-rate FHLB borrowings.

(2) The increase in non-interest expense for the three months ended December 31, 2020 was primarily driven by a $987,000 expense

resulting from the early extinguishment of $50.0 million in FHLB borrowings.

before income taxes

tax provision

Basic earnings

earnings per share

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

What changed 10-K

Item 9A. Controls and Procedures