# Western New England Bancorp, Inc. (WNEB) Informational only - not investment advice. CIK: 0001157647 SIC: 6035 Savings Institution, Federally Chartered SIC breadcrumb: [Finance, Insurance, And Real Estate](/division/H/) > [Depository Institutions](/major-group/60/) > [SIC 6035 Savings Institution, Federally Chartered](/industry/6035/) Latest 10-K filed: 2026-03-10 SEC page: https://www.sec.gov/edgar/browse/?CIK=1157647 Filing source: https://www.sec.gov/Archives/edgar/data/1157647/000199937126005514/wneb-10k_123125.htm ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 118619000 | USD | 2025 | 2026-03-16 | | Net income | 15269000 | USD | 2025 | 2026-03-16 | | Assets | 2736480000 | USD | 2025 | 2026-03-16 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-16. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001157647.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts. | Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | 48,598,000 | 74,039,000 | 78,990,000 | 82,116,000 | 82,875,000 | 79,849,000 | 85,928,000 | 101,118,000 | 109,832,000 | 118,619,000 | | Net income | 4,834,000 | 12,320,000 | 16,408,000 | 13,349,000 | 11,215,000 | 23,699,000 | 25,887,000 | 15,068,000 | 11,666,000 | 15,269,000 | | Diluted EPS | 0.24 | 0.41 | 0.57 | 0.51 | 0.45 | 1.02 | 1.18 | 0.70 | 0.56 | 0.75 | | Operating cash flow | 930,000 | 18,861,000 | 24,638,000 | 15,379,000 | 25,067,000 | 28,793,000 | 36,770,000 | 14,773,000 | 12,170,000 | 18,213,000 | | Capital expenditures | 1,487,000 | 2,212,000 | 3,327,000 | 1,285,000 | 3,581,000 | 3,457,000 | 1,143,000 | 2,902,000 | 1,196,000 | 1,073,000 | | Dividends paid | 2,439,000 | 3,579,000 | 4,641,000 | 5,274,000 | 5,037,000 | 4,677,000 | 5,281,000 | 6,066,000 | 5,914,000 | 5,712,000 | | Share buybacks | 1,378,000 | 9,314,000 | 22,920,000 | 19,455,000 | 10,519,000 | 23,281,000 | 6,351,000 | 5,022,000 | 7,599,000 | 6,097,000 | | Assets | 2,076,018,000 | 2,083,070,000 | 2,118,822,000 | 2,181,476,000 | 2,365,886,000 | 2,538,425,000 | 2,553,150,000 | 2,564,571,000 | 2,653,090,000 | 2,736,480,000 | | Liabilities | 1,837,622,000 | 1,835,789,000 | 1,881,793,000 | 1,949,452,000 | 2,139,246,000 | 2,314,737,000 | 2,325,007,000 | 2,327,162,000 | 2,417,180,000 | 2,488,843,000 | | Stockholders' equity | 238,396,000 | 247,281,000 | 237,029,000 | 232,024,000 | 226,640,000 | 223,688,000 | 228,143,000 | 237,409,000 | 235,910,000 | 247,637,000 | | Free cash flow | -557,000 | 16,649,000 | 21,311,000 | 14,094,000 | 21,486,000 | 25,336,000 | 35,627,000 | 11,871,000 | 10,974,000 | 17,140,000 | ### Ratios ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported. | Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Net margin | 9.95% | 16.64% | 20.77% | 16.26% | 13.53% | 29.68% | 30.13% | 14.90% | 10.62% | 12.87% | | Return on equity | 2.03% | 4.98% | 6.92% | 5.75% | 4.95% | 10.59% | 11.35% | 6.35% | 4.95% | 6.17% | | Return on assets | 0.23% | 0.59% | 0.77% | 0.61% | 0.47% | 0.93% | 1.01% | 0.59% | 0.44% | 0.56% | | Liabilities / equity | 7.71 | 7.42 | 7.94 | 8.40 | 9.44 | 10.35 | 10.19 | 9.80 | 10.25 | 10.05 | ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-08. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001157647.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2022-Q2 | 2022-06-30 | | | 0.25 | reported discrete quarter | | 2022-Q3 | 2022-09-30 | | | 0.28 | reported discrete quarter | | 2023-Q1 | 2023-03-31 | | | 0.24 | reported discrete quarter | | 2023-Q2 | 2023-06-30 | 24,809,000 | 2,763,000 | 0.13 | reported discrete quarter | | 2023-Q3 | 2023-09-30 | 25,901,000 | 4,490,000 | 0.21 | reported discrete quarter | | 2023-Q4 | 2023-12-31 | 26,770,000 | 2,511,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-03-31 | 26,604,000 | 2,961,000 | 0.14 | reported discrete quarter | | 2024-Q2 | 2024-03-31 | | 2,961,000 | | reported discrete quarter | | 2024-Q2 | 2024-06-30 | 26,802,000 | | 0.17 | reported discrete quarter | | 2024-Q3 | 2024-06-30 | | 3,513,000 | | reported discrete quarter | | 2024-Q3 | 2024-09-30 | 27,840,000 | | 0.09 | reported discrete quarter | | 2024-Q4 | 2024-12-31 | 28,586,000 | 3,288,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-31 | 28,437,000 | 2,303,000 | 0.11 | reported discrete quarter | | 2025-Q2 | 2025-03-31 | | 2,303,000 | | reported discrete quarter | | 2025-Q2 | 2025-06-30 | 29,612,000 | | 0.23 | reported discrete quarter | | 2025-Q3 | 2025-06-30 | | 4,590,000 | | reported discrete quarter | | 2025-Q3 | 2025-09-30 | 30,033,000 | | 0.16 | reported discrete quarter | | 2025-Q4 | 2025-12-31 | 30,537,000 | 5,209,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-03-31 | 30,281,000 | 4,777,000 | 0.24 | reported discrete quarter | ## Macro Cross-References - [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average - [UNRATE](/indicator/UNRATE/): Unemployment Rate - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit - [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit - [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity - [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity - [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity - [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy - [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food - [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy - [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter - [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index - [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate - [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm - [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate - [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio - [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed - [CE16OV](/indicator/CE16OV/): Employment Level - [ICSA](/indicator/ICSA/): Initial Claims - [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm - [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units - [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units - [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade - [PCE](/indicator/PCE/): Personal Consumption Expenditures - [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income - [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate - [M2SL](/indicator/M2SL/): M2 - [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance - [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States - [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States - [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States - [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States - [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States - [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized - [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized - [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks - [GDP](/indicator/GDP/): Gross Domestic Product - [GPDI](/indicator/GPDI/): Gross Private Domestic Investment - [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment - [PCEC](/indicator/PCEC/): Personal Consumption Expenditures - [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services - [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt - [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product - [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit - [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts - [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures - [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing - [USCONS](/indicator/USCONS/): All Employees, Construction - [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade - [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities - [USGOVT](/indicator/USGOVT/): All Employees, Government - [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private - [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods - [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft - [BUSINV](/indicator/BUSINV/): Total Business Inventories - [EXPGS](/indicator/EXPGS/): Exports of Goods and Services - [IMPGS](/indicator/IMPGS/): Imports of Goods and Services - [IR](/indicator/IR/): Import Price Index (End Use): All Commodities - [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1157647/000199937126010347/wneb-10q_03312026.htm Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high Filing date: 2026-05-08 Report date: 2026-03-31 ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Overview. We strive to remain a leader in meeting the financial service needs of the local community and to provide quality service to the individuals and businesses in the market areas that we have served since 1853. Historically, we have been a community-oriented provider of traditional banking products and services to business organizations and individuals, including products such as residential and commercial real estate loans, commercial and industrial loans, consumer loans, and a variety of deposit products. We meet the needs of our local community through a community-based and service-oriented approach to banking. The Company has adopted a growth-oriented strategy that continues to focus on increasing commercial lending and residential lending. Our strategy also calls for increasing deposit relationships, specifically core deposits, which the Company defines as all deposits except for time deposits, and broadening our product lines and services. We believe that this business strategy is best for our long-term success and viability and complements our existing commitment to high-quality customer service. In connection with our overall growth strategy, we seek to: ● Increase market share and achieve scale to improve the Company’s profitability, efficiency and return value to shareholders; ● Grow the Company’s commercial loan portfolio and related commercial deposits by targeting businesses in our primary market area of Hampden and Hampshire Counties in western Massachusetts and the Capital Region in Connecticut; ● Grow the Company’s residential real estate portfolio to diversify the Company’s loan portfolio and deepen customer relationships; ● Focus on expanding our retail banking deposit franchise and increase the number of households served within our designated market area; ● Invest in people, systems, and technology to grow revenue, improve efficiency and enhance the overall customer experience; ● Grow revenues, increase book value per share and tangible book value per share (a non-GAAP financial measure), pay competitive dividends to shareholders, and utilize the Company’s stock repurchase plan to leverage our capital and enhance franchise value; and ● Consider growth through mergers and acquisitions. We may pursue expansion opportunities in existing or adjacent strategic locations with companies that add complementary products to our existing business and at terms that add value to our existing shareholders. You should read the following financial results for the three months ended March 31, 2026 in the context of this strategy. ● The Company reported an increase in net income of $2.5 million, or 107.4%, from $2.3 million, or $0.11 per diluted share, for the three months ended March 31, 2025, to $4.8 million, or $0.24 per diluted share, for the three months ended March 31, 2026. Net interest income increased $3.3 million, or 21.2%, provision for credit losses decreased $67,000, or 47.2%, non-interest income increased $674,000, or 24.4%, and non-interest expense increased $824,000, or 5.4%, during the same period. 39 ● During the three months ended March 31, 2026, the Company recorded a provision for credit losses of $75,000, a decrease of $67,000, or 47.2%, from $142,000 for the three months ended March 31, 2025. The decrease was primarily due to a decrease in unfunded commitments. ● Net interest income increased $3.3 million, or 21.2%, to $18.8 million, for the three months ended March 31, 2026, from $15.5 million for the three months ended March 31, 2025. The increase in net interest income was due to an increase in interest and dividend income of $1.8 million, or 6.5%, and a decrease in interest expense of $1.4 million, or 11.2%. The decrease in interest expense was primarily due to a decrease in the average cost of interest-bearing liabilities of 36 basis points, from 2.82% for the three months ended March 31, 2025 to 2.46% for the three months ended March 31, 2026. CRITICAL ACCOUNTING POLICIES. Our consolidated financial statements are prepared in accordance with GAAP and practices within the banking industry. Application of these principles requires management to make estimates, assumptions, and judgments that affect the amounts reported in the financial statements and accompanying notes. These estimates, assumptions, and judgments are based on information available as of the date of the financial statements; accordingly, as this information changes, the financial statements could reflect different estimates, assumptions, and judgments. Actual results could differ from those estimates. Critical accounting estimates are necessary in the application of certain accounting policies and procedures, and are particularly susceptible to significant change. Critical accounting policies are defined as those that are reflective of significant judgments and uncertainties, and could potentially result in materially different results under different assumptions and conditions. There have been no material changes to our critical accounting policies during the three months ended March 31, 2026. For additional information on our critical accounting policies, please refer to the information contained in Note 1 of the accompanying unaudited consolidated financial statements and Note 1 of the consolidated financial statements included in our 2025 Annual Report.  COMPARISON OF FINANCIAL CONDITION AT MARCH 31, 2026 AND DECEMBER 31, 2025 At March 31, 2026, total assets were $2.8 billion, an increase of $28.0 million, or 1.0%, from December 31, 2025. The increase in total assets was primarily due to an increase in total loans of $17.2 million, or 0.8%, and an increase in cash and cash equivalents of $15.8 million, or 39.0%. At March 31, 2026, the investment securities portfolio totaled $359.2 million, or 13.0% of total assets, compared to $365.2 million, or 13.3% of total assets, at December 31, 2025. At March 31, 2026, the Company’s available-for-sale securities portfolio, recorded at fair market value, was $173.2 million, a decrease of $2.6 million, or 1.5%, from $175.8 million at December 31, 2025. The held-to-maturity securities portfolio, recorded at amortized cost, decreased $3.4 million, or 1.8%, from $188.8 million at December 31, 2025 to $185.4 million at March 31, 2026. At March 31, 2026, the Company reported net unrealized losses on the available-for-sale securities portfolio of $23.0 million, or 11.7% of the amortized cost basis of the available-for-sale securities portfolio, compared to net unrealized losses of $22.4 million, or 11.3% of the amortized cost basis of the available-for-sale securities at December 31, 2025. At March 31, 2026, the Company reported net unrealized losses on the held-to-maturity securities portfolio of $30.6 million, or 16.5% of the amortized cost basis of the held-to-maturity securities portfolio, compared to $30.3 million, or 16.1% of the amortized cost basis of the held-to-maturity securities portfolio at December 31, 2025. The securities in which the Company may invest are limited by regulation. Federally chartered savings banks have authority to invest in various types of assets, including U.S. Treasury obligations, securities of various government-sponsored enterprises, mortgage-backed securities, certain certificates of deposit of insured financial institutions, repurchase agreements, overnight and short-term loans to other banks, corporate debt instruments, and marketable equity securities. The securities, with the exception of $11.0 million in corporate bonds, are issued by the United States government or government-sponsored enterprises and are therefore either explicitly or implicitly guaranteed as to the timely payment of contractual principal and interest. These positions are deemed to have no credit impairment, therefore, the disclosed unrealized losses with the securities portfolio relate primarily to changes in prevailing interest rates. In all cases, price improvement in future periods will be realized as the issuances approach maturity. 40 Management regularly reviews the portfolio for securities in an unrealized loss position. At March 31, 2026 and December 31, 2025, the Company did not record any credit impairment charges on its securities portfolio and attributed the unrealized losses primarily due to fluctuations in general interest rates or changes in expected prepayments and not due to credit quality. The primary objective of the Company’s investment portfolio is to provide liquidity and to secure municipal deposit accounts while preserving the safety of principal. The available-for-sale and held-to-maturity portfolios are both eligible for pledging to the Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank (“FRB”) as collateral for borrowings. The portfolios are comprised of high-credit quality investments and both portfolios generated cash flows monthly from interest, principal amortization, and payoffs, which supports the Bank’s objective to provide liquidity. Total loans increased $17.2 million, or 0.8%, from $2.2 billion, or 79.7% of total assets, at December 31, 2025 to $2.2 billion, or 79.5% of total assets, at March 31, 2026. The increase in total loans was primarily driven by an increase in residential real estate loans, including home equity loans, of $9.6 million, or 1.1%, an increase in commercial and industrial loans of $6.0 million, or 2.7%, and an increase in commercial real estate loans of $2.1 million, or 0.2%. Total delinquency was $3.2 million, or 0.14% of total loans, at March 31, 2026, compared to $3.1 million, or 0.14% of total loans, at December 31, 2025. At March 31, 2026, nonaccrual loans totaled $4.7 million, or 0.21% of total loans, compared to $5.2 million, or 0.24% of total loans, at December 31, 2025. At March 31, 2026 and December 31, 2025, there were no loans 90 or more days past-due and still accruing interest. Total nonperforming assets, defined as nonaccrual loans and other real estate owned, totaled $4.7 million, or 0.17% of total assets, at March 31, 2026, compared to $5.2 million, or 0.19% of total assets, at December 31, 2025. At March 31, 2026 and December 31, 2025, the Company did not have any other real estate owned. At March 31, 2026, the allowance for credit losses was $20.5 million, or 0.93% of total loans and 436.9% of nonaccrual loans, compared to $20.3 million, or 0.93% of total loans and 393.2% of nonaccrual loans, at December 31, 2025. At March 31, 2026, total criticized loans, defined as special mention and substandard loans, totaled $58.7 million, or 2.7% of total loans, compared to $39.7 million, or 1.8% of total loans, at December 31, 2025. Loans designated special mention, which are not considered classified, increased $20.5 million, from $17.1 million, or 0.8% of total loans, at December 31, 2025 to $37.6 million, or 1.7% of total loans, at March 31, 2026. During the same period, substandard loans decreased $1.4 million, or 6.1%, to $21.1 million, or 1.0% of total loans. Of the $37.6 million in loans designated special mention at March 31, 2026, $14.7 million, or 39.1%, are commercial and industrial loans, and $22.9 million, or 60.9%, are commercial real estate loans. Of the $21.1 million in loans categorized substandard at March 31, 2026, $7.3 million, or 34.4%, are commercial and industrial loans, $9.5 million, or 44.8%, are commercial real estate loans, and $4.4 million, or 20.8%, are residential real estate loans. Of the total $58.7 million in criticized loans at March 31, 2026, 96.1% are current and paying as agreed. The increase in special mention loans from December 31, 2025 to March 31, 2026 resulted from the downgrade of two commercial relationships totaling $21.5 million, from “pass” risk ratings to special mention. The two relationships are paying as agreed and are being monitored closely by management. Our [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A Extracted from Item 7 to the first post-MD&A boundary after HTML sanitization. Confidence: high ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The following discussion should be read in conjunction with the Company’s Consolidated Financial Statements and notes thereto, each appearing elsewhere in this Annual Report on Form 10-K. Management’s discussion focuses on 2025 results compared to 2024. For a discussion of 2024 results compared to 2023, refer to Part II, Item 7 of our Annual Report filed on Form 10-K, which was filed with the SEC on March 10, 2025. Overview. We strive to remain a leader in meeting the financial service needs of the local community and to provide quality service to the individuals and businesses in the market areas that we have served since 1853. Historically, we have been a community-oriented provider of traditional banking products and services to business organizations and individuals, including products such as residential and commercial real estate loans, consumer loans and a variety of deposit products. We meet the needs of our local community through a community-based and service-oriented approach to banking. We have adopted a growth-oriented strategy that continues to focus on increasing commercial lending and residential lending. Our strategy also calls for increasing deposit relationships, specifically core deposits, and broadening our product lines and services. We believe that this business strategy is best for our long-term success and viability, and complements our existing commitment to high quality customer service. In connection with our overall growth strategy, we seek to: ● Increase market share and achieve scale to improve the Company’s profitability and efficiency and return value to shareholders; ● Grow the Company’s commercial loan portfolio and related commercial deposits by targeting businesses in our primary market area of Hampden County and Hampshire County in western Massachusetts and the Capital Region in Connecticut to increase the net interest margin and loan income; ● Supplement the commercial portfolio by growing the residential real estate portfolio to diversify the loan portfolio and deepen customer relationships; ● Focus on expanding our retail banking deposit franchise and increase the number of households served within our designated market area; ● Invest in people, systems and technology to grow revenue, improve efficiency and enhance the overall customer experience; ● Grow revenues, increase book value per share and tangible book value, pay competitive dividends to shareholders and utilize the Company’s stock repurchase plan to leverage our capital and enhance franchise value; and ● Consider growth through acquisitions. We may pursue expansion opportunities in existing or adjacent strategic locations with companies that add complementary products to our existing business and at terms that add value to our existing shareholders. You should read the following financial results for the year ended December 31, 2025 in the context of this strategy. 58  For the twelve months ended December 31, 2025, the Company reported net income of $15.3 million, or $0.75 per diluted share, compared to $11.7 million, or $0.56 per diluted share, for the twelve months ended December 31, 2024. Net interest income increased $10.3 million, or 17.2%, provision for credit losses increased $1.0 million, non-interest income decreased $387,000, or 3.0%, and non-interest expense increased $4.1 million, or 6.9%, during the same period in 2024. During the twelve months ended December 31, 2025, net interest income increased $10.3 million, or 17.2%, to $70.1 million, compared to $59.8 million for the twelve months ended December 31, 2024. The increase in net interest income was due to an increase in interest income of $8.8 million, or 8.0%, and a decrease in interest expense of $1.5 million, or 3.0%. During the twelve months ended December 31, 2025, the Company recorded a provision for credit losses of $335,000, compared to a reversal of credit losses of $665,000 during the twelve months ended December 31, 2024. The $1.0 million increase in the provision for credit losses was primarily due to an increase in total loans of $113.2 million, or 5.5%. General. Our consolidated results of operations depend primarily on net interest and dividend income. Net interest and dividend income is the difference between the interest income earned on interest-earning assets and the interest paid on interest-bearing liabilities. Interest-earning assets consist primarily of commercial real estate loans, commercial and industrial loans, residential real estate loans and securities. Interest-bearing liabilities consist primarily of time deposits and money market accounts, demand deposits, savings accounts and borrowings from the FHLB. The consolidated results of operations also depend on the provision for loan losses, non-interest income, and non-interest expense. Non-interest income includes service fees and charges, income on bank-owned life insurance, gains (losses) on sales of mortgages, gains (losses) on non-marketable equity investments and gains (losses) on securities. Non-interest expense includes salaries and employee benefits, occupancy expenses, data processing, advertising expense, FDIC insurance assessment, professional fees and other general and administrative expenses. Critical Accounting Policies. Our accounting policies are disclosed in Note 1 to our consolidated financial statements. Given our current business strategy and asset/liability structure, the more critical policy is the allowance for credit losses and provision for credit losses. In addition to the informational disclosure in the notes to the consolidated financial statements, our policy on this accounting policy is described in detail in the applicable sections of “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Senior management has discussed the development and selection of this accounting policy and the related disclosures with the Audit Committee of the Board. The allowance for credit losses is an estimate of expected losses inherent within the Company’s existing loans held for investment portfolio. The allowance for credit losses for loans held for investment, as reported in our consolidated balance sheet, is adjusted by a credit loss expense, which is reported in earnings, and reduced by the charge-off of loan amounts, net of recoveries. Accrued interest receivable on loans held for investment was $7.6 million at December 31, 2025 and is excluded from the estimate of credit losses. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant change. The credit loss estimation process involves procedures to appropriately consider the unique characteristics of loan portfolio segments, which consist of commercial real estate loans, residential real estate loans, commercial and industrial loans, and consumer loans. These segments are further disaggregated into loan classes, the level at which credit risk is monitored. For each of these pools, the Company generates cash flow projections at the instrument level wherein payment expectations are adjusted for estimated prepayment speed, curtailments, time to recovery, probability of default, and loss given default. The modeling of expected prepayment speeds, curtailment rates, and time to recovery are based on historical internal data. The quantitative component of the ACL on loans is model-based and utilizes a forward-looking macroeconomic forecast. For commercial real estate loans, residential real estate loans, and commercial and industrial loans, the Company uses a discounted cash flow method, incorporating probability of default and loss given default forecasted based on statistically derived economic variable loss drivers, to estimate expected credit losses. This process includes estimates which involve modeling loss projections attributable to existing loan balances, and considering historical experience, current conditions, and future expectations for pools of loans over a reasonable and supportable forecast period. The historical information either experienced by the Company or by a selection of peer banks, when appropriate, is derived from a combination of recessionary and non-recessionary performance periods for which data is available. The expected loss estimates for the consumer loan segment are based on historical loss rates using the WARM method. 59  Although management believes it has established and maintained the allowance for credit losses at adequate levels for the current economic environment and supportable forecast period, if management’s assumptions and judgments prove to be incorrect due to changes in the economic environment and related adjustments to the quantitative components of the CECL methodology, and the allowance for credit losses is not adequate to absorb forecasted losses, our earnings and capital could be significantly and adversely affected. Analysis of Net Interest Income. The Company’s earnings are largely dependent on its net interest income, which is the difference between interest earned on loans and investments and the cost of funding (primarily deposits and borrowings). Net interest income expressed as a percentage of average interest-earning assets is referred to as net interest margin. For more information regarding the Company’s use of Non-GAAP financial measures see “Explanation of Use of Non-GAAP Financial Measurements.” Average Balance Sheet. The following table sets forth information relating to the Company for the years ended December 31, 2025, 2024 and 2023. The average yields and costs are derived by dividing interest income or interest expense by the average balance of interest-earning assets or interest-bearing liabilities, respectively, for the periods shown. Average balances are derived from average daily balances. The yields include fees which are considered adjustments to yields. Loan interest and yield data does not include any accrued interest from non-accruing loans. 60  For the Years Ended December 31, 2025 2024 2023 Average Average  Yield/  Average Average  Yield/  Average Average Yield/  Balance Interest Cost Balance Interest Cost Balance Interest Cost (Dollars in thousands) ASSETS: Interest-earning assets Loans(1)(2) $ 2,108,767 $ 105,866 5.02 % $ 2,035,149 $ 99,369 4.88 % $ 2,006,166 $ 91,640 4.57 % Securities(2) 371,206 10,215 2.75 357,631 8,649 2.42 368,201 8,371 2.27 Other investments - at cost 14,907 690 4.63 14,669 687 4.68 12,425 558 4.49 Short-term investments(3) 54,770 2,335 4.26 33,254 1,598 4.81 20,459 1,021 4.99 Total interest-earning assets 2,549,650 119,106 4.67 2,440,703 110,303 4.52 2,407,251 101,590 4.22 Total non-interest-earning assets 156,591 155,056 155,511 Total assets $ 2,706,241 $ 2,595,759 $ 2,562,762 LIABILITIES AND EQUITY: Interest-bearing liabilities Interest-bearing checking accounts $ 155,831 1,497 0.96 $ 136,861 1,022 0.75 $ 142,005 1,041 0.73 Savings accounts 186,780 180 0.10 182,678 166 0.09 202,354 181 0.09 Money market accounts 704,654 15,242 2.16 631,197 12,242 1.94 697,621 9,529 1.37 Time deposits 693,208 25,593 3.69 666,917 28,806 4.32 524,827 15,898 3.03 Total interest-bearing deposits 1,740,473 42,512 2.44 1,617,653 42,236 2.61 1,566,807 26,649 1.70 Short-term borrowings and long-term debt 119,764 6,010 5.02 155,560 7,779 5.00 135,532 6,560 4.84 Interest-bearing liabilities 1,860,237 48,522 2.61 1,773,213 50,015 2.82 1,702,339 33,209 1.95 Non-interest-bearing deposits 582,168 561,264 602,652 Other non-interest-bearing liabilities 23,472 24,541 24,885 Total non-interest-bearing liabilities 605,640 585,805 627,537 Total liabilities 2,465,877 2,359,018 2,329,876 Total equity 240,364 236,741 232,886 Total liabilities and equity $ 2,706,241 $ 2,595,759 $ 2,562,762 Less: Tax-equivalent adjustment(2) (487 ) (471 ) (472 ) Net interest and dividend income $ 70,097 $ 59,817 $ 67,909 Net interest rate spread(4) 2.04 % 1.68 % 2.25 % Net interest rate spread, on a tax-equivalent basis(5) 2.06 % 1.70 % 2.27 % Net interest margin(6) 2.75 % 2.45 % 2.82 % Net interest margin, on a tax-equivalent basis(7) 2.77 % 2.47 % 2.84 % Ratio of average interest-earning assets to average interest-bearing liabilities 137.06 % 137.64 % 141.41 %  61 (1) Loans, including nonperforming loans, are net of deferred loan origination costs and unadvanced funds. (2) Loan and securities income are presented on a tax-equivalent basis using a tax rate of 21% for 2025, 2024 and 2023. The tax-equivalent adjustment is deducted from tax-equivalent net interest and dividend income to agree to the amount reported on the consolidated statements of net income. See “Explanation of Use of Non-GAAP Financial Measurements.” (3) Short-term investments include federal funds sold. (4) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. (5) Net interest rate spread, on a tax-equivalent basis, represents the difference between the tax-equivalent weighted average yield on interest-earning assets and the tax-equivalent weighted average cost of interest-bearing liabilities. See “Explanation of Use of Non-GAAP Financial Measurements.” (6) Net interest margin represents net interest and dividend income as a percentage of average interest-earning assets. (7) Net interest margin, on a tax-equivalent basis, represents tax-equivalent net interest and dividend income as a percentage of average interest-earning assets. See “Explanation of Use of Non-GAAP Financial Measurements.”  62 Rate/Volume Analysis. The following table shows how changes in interest rates and changes in the volume of interest-earning assets and interest-bearing liabilities have affected our interest and dividend income and interest expense during the periods indicated. Information is provided in each category with respect to: (1) interest income changes attributable to changes in volume (changes in volume multiplied by prior rate); (2) interest income changes attributable to changes in rate (changes in rate multiplied by prior volume); and (3) the net change. The changes attributable to the combined impact of volume and rate have been allocated proportionately to the changes due to volume and the changes due to rate. Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Increase (Decrease) Due to Increase (Decrease) Due to Volume Rate Net Volume Rate Net Interest-earning assets (Dollars in thousands) (Dollars in thousands) Loans (1) $ 3,595 $ 2,902 $ 6,497 $ 1,323 $ 6,406 $ 7,729 Investment securities (1) 328 1,238 1,566 (240 ) 518 278 Other investments - at cost 11 (8 ) 3 101 28 129 Short-term investments 1,034 (297 ) 737 639 (62 ) 577 Total interest-earning assets 4,968 3,835 8,803 1,823 6,890 8,713 Interest-bearing liabilities Interest-bearing checking accounts 142 333 475 (39 ) 20 (19 ) Savings accounts 4 10 14 (18 ) 3 (15 ) Money market accounts 1,425 1,575 3,000 (907 ) 3,620 2,713 Time deposits 1,136 (4,349 ) (3,213 ) 4,304 8,604 12,908 Short-term borrowing and long-term debt (1,790 ) 21 (1,769 ) 969 250 1,219 Total interest-bearing liabilities 917 (2,410 ) (1,493 ) 4,309 12,497 16,806 Change in net interest and dividend income $ 4,051 $ 6,245 $ 10,296 $ (2,486 ) $ (5,607 ) $ (8,093 ) (1) Securities and loan income and net interest income are presented on a tax-equivalent basis using a tax rate of 21% for 2025, 2024 and 2023. The tax-equivalent adjustment is deducted from tax-equivalent net interest income to agree to the amount reported in the consolidated statements of net income. See “Explanation of Use of Non-GAAP Financial Measurements.”  63 Explanation of Use of Non-GAAP Financial Measurements. We believe that it is common practice in the banking industry to present interest income and related yield information on tax-exempt loans and securities on a tax-equivalent basis, as well as presenting tangible book value per share and that such information is useful to investors because it facilitates comparisons among financial institutions. However, the adjustment of interest income and yields on tax-exempt loans and securities to a tax-equivalent amount, as well as the presentation of tangible book value per share may be considered to include financial information that is not in compliance with GAAP. A reconciliation from GAAP to non-GAAP is provided below. For the twelve months ended 12/31/2025 12/31/2024 12/31/2023 (Dollars in thousands) Loans (no tax adjustment) $ 105,379 $ 98,898 $ 91,169 Tax-equivalent adjustment (1) 487 471 471 Loans (tax-equivalent basis) $ 105,866 $ 99,369 $ 91,640 Securities (no tax adjustment) $ 10,215 $ 8,649 $ 8,370 Tax-equivalent adjustment (1) — — 1 Securities (tax-equivalent basis) $ 10,215 $ 8,649 $ 8,371 Net interest income (no tax adjustment) $ 70,097 $ 59,817 $ 67,909 Tax equivalent adjustment (1) 487 471 472 Net interest income (tax-equivalent basis) $ 70,584 $ 60,288 $ 68,381 Net interest income (no tax adjustment) $ 70,097 $ 59,817 $ 67,909 Less: Prepayment penalties 459 8 64 Fair value hedge interest income — 1,398 1,085 Adjusted net interest income (non-GAAP) $ 69,638 $ 58,411 $ 66,760 Average interest-earning assets $ 2,549,650 $ 2,440,703 $ 2,407,251 Net interest margin (no tax adjustment) 2.75 % 2.45 % 2.82 % Net interest margin, tax-equivalent 2.77 % 2.47 % 2.84 % Adjusted net interest margin, excluding prepayment penalties and fair value hedge interest income (non-GAAP) 2.73 % 2.39 % 2.77 %  64 At or for the twelve months ended 12/31/2025 12/31/2024 12/31/2023 (Dollars in thousands) Book Value per Share (GAAP) $ 12.16 $ 11.30 $ 10.96 Non-GAAP adjustments: Goodwill (0.61 ) (0.60 ) (0.58 ) Core deposit intangible (0.06 ) (0.07 ) (0.08 ) Tangible Book Value per Share (non-GAAP) $ 11.49 $ 10.63 $ 10.30 Adjusted Efficiency Ratio: Non-interest Expense (GAAP) $ 62,488 $ 58,428 $ 58,350 Net Interest Income (GAAP) $ 70,097 $ 59,817 $ 67,909 Non-interest Income (GAAP) $ 12,516 $ 12,903 $ 10,897 Non-GAAP adjustments: Loss on disposal of premises and equipment — 6 3 Unrealized (gain) loss on marketable equity securities (35 ) (13 ) 1 Gain on bank-owned life insurance death benefit — — (778 ) Gain on non-marketable equity investments (243 ) (1,287 ) (590 ) Loss on defined benefit plan termination — — 1,143 Non-interest Income for Adjusted Efficiency Ratio (non-GAAP) $ 12,238 $ 11,609 $ 10,676 Total Revenue for Adjusted Efficiency Ratio (non-GAAP) $ 82,335 $ 71,426 $ 78,585 Efficiency Ratio (GAAP) 75.64 % 80.35 % 74.04 % Adjusted Efficiency Ratio (Non-interest Expense (GAAP)/Total Revenue for Adjusted Efficiency Ratio (non-GAAP)) 75.89 % 81.80 % 74.25 % (1) The tax equivalent adjustment is based upon a 21% tax rate for 2025, 2024 and 2023.  65 Comparison of Financial Condition at December 31, 2025 and December 31, 2024. At December 31, 2025, total assets increased $83.4 million, or 3.1%, from December 31, 2024 to $2.7 billion. The increase in total assets was primarily due to an increase in total loans of $113.2 million, or 5.5%, partially offset by a decrease in cash and cash equivalents of $26.1 million, or 39.2%. The balance sheet composition and changes since December 31, 2024 are discussed below. Cash and Cash Equivalents. Cash and cash equivalents is comprised of cash on hand and amounts due from banks, interest-earning deposits in other financial institutions and federal funds sold. Cash and cash equivalents totaled $40.4 million, or 1.5% of total assets, at December 31, 2025 and $66.5 million, or 2.5% of total assets, at December 31, 2024. Balances in cash and cash equivalents will fluctuate due primarily to the timing of net deposit flows, borrowing and loan inflows and outflows, investment purchases and maturities, calls and sales proceeds, and the immediate liquidity needs of the Company. Investments. At December 31, 2025, the investment securities portfolio totaled $365.2 million, or 13.3% of total assets, compared to $366.1 million, or 13.8% of total assets, at December 31, 2024. At December 31, 2025, the Company’s available-for-sale securities portfolio, recorded at fair market value, increased $15.1 million, or 9.4%, from $160.7 million at December 31, 2024 to $175.8 million. The held-to-maturity securities portfolio, recorded at amortized cost, decreased $16.2 million, or 7.9%, from $205.0 million at December 31, 2024 to $188.8 million at December 31, 2025. At December 31, 2025, the Company reported gross unrealized losses on the available-for-sale securities portfolio of $23.4 million, or 11.8% of the amortized cost basis of the available-for-sale securities portfolio, compared to gross unrealized losses of $31.2 million, or 16.2% of the amortized cost basis of the available-for-sale securities at December 31, 2024. At December 31, 2025, the Company reported gross unrealized losses on the held-to-maturity securities portfolio of $30.5 million, or 16.2% of the amortized cost basis of the held-to-maturity securities portfolio, compared to $39.4 million, or 19.2% of the amortized cost basis of the held-to-maturity securities portfolio at December 31, 2024. The Bank is required to purchase FHLB stock at par value in association with advances from the FHLB. The stock is classified as a restricted investment and carried at cost which management believes approximates fair value. The Company’s investment in FHLB capital stock amounted to $4.9 million and $5.4 million at December 31, 2025 and December 31, 2024, respectively. At December 31, 2025 and 2024, the Company held $423,000 of Atlantic Community Bankers Bank stock. The stock is restricted and carried in other assets at cost. The stock is evaluated for impairment based on an estimate of the ultimate recovery to the par value. Loans. Total loans increased $113.2 million, or 5.5%, from $2.1 billion, or 77.9% of total assets, at December 31, 2024 to $2.2 billion, or 79.7% of total assets, at December 31, 2025. The increase in total loans was primarily driven by an increase in residential real estate loans, including home equity loans, of $81.2 million, or 10.5%, an increase in commercial and industrial loans of $10.1 million, or 4.8%, and an increase in commercial real estate loans of $23.3 million, or 2.2%. The increase in total loans was partially offset by a decrease in consumer loans of $1.5 million, or 33.3%. Management continues to closely monitor the loan portfolio for any signs of deterioration in borrowers’ financial condition and also in light of speculation that commercial real estate values may deteriorate as the market continues to adjust to higher vacancies and interest rates. We continue to proactively take steps to mitigate risk in our loan portfolio. Total delinquency was $3.1 million, or 0.14% of total loans, at December 31, 2025, compared to $5.0 million, or 0.24% of total loans at December 31, 2024. At December 31, 2025, nonaccrual loans totaled $5.2 million, or 0.24% of total loans, compared to $5.4 million, or 0.26% of total loans, at December 31, 2024. At December 31, 2025 and December 31, 2024, there were no loans 90 or more days past-due and still accruing interest. Total nonperforming assets, defined as nonaccrual loans and other real estate owned, totaled $5.2 million, or 0.19% of total assets, at December 31, 2025, compared to $5.4 million, or 0.20% of total assets, at December 31, 2024. At December 31, 2025 and December 31, 2024, the Company did not have any other real estate owned.  66 At December 31, 2025, the allowance for credit losses was $20.3 million, or 0.93% of total loans and 393.2% of nonaccrual loans, compared to $19.5 million, or 0.94% of total loans and 362.9% of nonaccrual loans, at December 31, 2024. Total criticized loans, defined as special mention and substandard loans, increased $1.3 million, or 3.4%, from $38.4 million, or 1.9% of total loans, at December 31, 2024 to $39.7 million, or 1.8% of total loans, at December 31, 2025. A summary of our past due and nonperforming loans by class is listed in Note 3 of the accompanying unaudited consolidated financial statements. Our commercial real estate portfolio is comprised of diversified property types and primarily within our geographic footprint. At December 31, 2025, the commercial real estate portfolio totaled $1.1 billion and represented 50.4% of total loans. Of the $1.1 billion, $900.5 million, or 81.9%, was categorized as non-owner occupied commercial real estate and represented 325.1% of the Bank’s total risk-based capital. The Company’s commercial real estate loans are considered to be relatively diversified by borrower, industry and concentrated in the New England geographical area. A significant portion of the loan portfolio consists of commercial real estate loans, primarily made in Massachusetts, and to a lesser degree, Connecticut, and secured by real estate or other collateral in the market. Although these loans are made to a diversified pool of unrelated borrowers across numerous businesses, adverse developments in the local real estate market could have an adverse impact on this portfolio of loans and the Company’s income and financial position. While our basic market area is in Massachusetts, the Company has made loans outside that market area where the applicant is an existing customer, and the nature and quality of such loans was consistent with the Company’s lending policies. We continuously monitor the asset quality of our loan portfolio. For the commercial portfolio, we monitor credit quality using a risk rating scale, which assigns a risk-grade to each borrower based on a number of quantitative and qualitative factors associated with a commercial loan transaction. Management utilizes a loan risk rating methodology based on an 8-point scale. Pass grades are 0-4 and non-pass categories, which align with regulatory guidelines, include: special mention (5), substandard (6), doubtful (7) and loss (8). Risk rating assignment is determined by analyzing key factors, which may include: industry and market conditions, position within the industry, earnings trends, operating cash flow, debt capacity, guarantor strength, management, financial reporting, collateral and other considerations. CRE Concentrations. The OCC, the FRB, and the FDIC (“Agencies”) issued guidance in 2006 which addresses institutions with increased concentrations of commercial real estate (“CRE”) loans. The guidance does not establish specific CRE lending limits; rather, it promotes sound risk management practices and appropriate levels of capital that will enable institutions to continue to pursue CRE lending in a safe and sound manner. In developing this guidance, the Agencies recognized that different types of CRE lending present different levels of risk, and that consideration should be given to the lower risk profiles and historically superior performance of certain types of CRE, such as well-structured multifamily housing finance, when compared to others, such as speculative office space construction. Institutions are encouraged to segment their CRE portfolios to acknowledge these distinctions for risk management purposes. The guidance focuses on those CRE loans for which the cash flow from the real estate is the primary source of repayment rather than loans to a borrower for which real estate collateral is taken as a secondary source of repayment or through an abundance of caution. Thus, for the purposes of the guidance, CRE loans include those loans with risk profiles sensitive to the condition of the general CRE market (for example, market demand, changes in capitalization rates, vacancy rates, or rents). CRE loans are land development and construction loans (including 1- to 4-family residential and commercial construction loans) and other land loans. CRE loans also include loans secured by multifamily property, and nonfarm nonresidential property where the primary source of repayment is derived from rental income associated with the property (that is, loans for which 50 percent or more of the source of repayment comes from third party, nonaffiliated, rental income) or the proceeds of the sale, refinancing, or permanent financing of the property. Excluded from the scope of this guidance are loans secured by nonfarm nonresidential properties where the primary source of repayment is the cashflow from the ongoing operations and activities conducted by the party, or affiliate of the party, who owns the property.  67 As part of their ongoing supervisory monitoring processes, the Agencies use certain criteria to identify institutions that are potentially exposed to significant CRE concentration risk. An institution that has experienced rapid growth in CRE lending, has notable exposure to a specific type of CRE, or is approaching or exceeds the following supervisory criteria may be identified for further supervisory analysis of the level and nature of its CRE concentration risk: 1. Total reported loans for construction, land development, and other land represent 100 percent or more of the institution’s total risk-based capital; or 2. Total commercial real estate loans, as defined in this guidance, represent 300 percent or more of the institution’s total risk-based capital, and the outstanding balance of the institution’s commercial real estate loan portfolio has increased by 50 percent or more during the prior 36 months. The Agencies use the criteria as a preliminary step to identify institutions that may have CRE concentration risk. Because regulatory reports capture a broad range of CRE loans with varying risk characteristics, the supervisory monitoring criteria do not constitute limits on an institution’s lending activity but rather serve as high-level indicators to identify institutions potentially exposed to CRE concentration risk. The Company holds a concentration in commercial real estate loans. As of December 31, 2025, commercial real estate loans represented 396.8% of consolidated bank risk-based capital. Non-owner occupied commercial real estate loans totaled $900.5 million, or 325.1% of consolidated bank risk-based capital, and owner-occupied commercial real estate loans totaled $198.6 million, or 71.7% of consolidated bank risk-based capital. As of December 31, 2025, construction, land development and other land loans represented 39.0% of consolidated bank risk-based capital. During the prior 36 months, the Company has experienced an increase in its commercial real estate portfolio of 9.0%. The management team has extensive experience in underwriting commercial real estate loans and has implemented and continues to maintain heightened risk management procedures and strong underwriting criteria with respect to its commercial real estate portfolio. The Company’s Board of Directors (the “Board”) has established internal maximum limits on CRE as an asset class overall as well as sub limits within CRE by property class, to better manage and control the exposure to property classes during periods of changing economic conditions. The Board also has minimum targets for regulatory capital ratios that are in excess of well capitalized ratios. Our risk management process begins with a robust underwriting program. The underwriting and risk rating of all loans is completed by the Company’s Credit Department that is independent of the originating lender(s). At December 31, 2025 and December 31, 2024, non-owner and owner occupied commercial real estate loans, totaled $1.1 billion, or 50.4%, of total gross loans, and $1.1 billion, or 52.0%, of total gross loans, respectively.  68 The table below breaks down the commercial real estate portfolio outstanding balance by non-owner and owner occupied and by concentration as of December 31, 2025: Property Type Non-Owner Occupied Owner Occupied Total % of CRE Portfolio % of Total Loans % of Total Bank Risk-Based Capital(1) (Dollars in thousands) Office Portfolio $ 174,196 $ 20,961 $ 195,157 17.8 % 8.9 % 70.5 % Apartment 174,330 — 174,330 15.9 % 8.0 % 62.9 % Industrial 124,601 44,382 168,983 15.4 % 7.7 % 61.0 % Retail 110,356 5,102 115,458 10.5 % 5.3 % 41.7 % Mixed Use 75,593 5,741 81,334 7.4 % 3.7 % 29.4 % Other 45,445 25,376 70,821 6.4 % 3.3 % 25.5 % Self-Storage 46,106 67 46,173 4.2 % 2.1 % 16.7 % Hotel/Hospitality 41,582 — 41,582 3.8 % 1.9 % 15.0 % Shopping Center 28,854 6,292 35,146 3.2 % 1.6 % 12.7 % Warehouse 23,560 10,339 33,899 3.1 % 1.6 % 12.2 % Automotive Sales 697 33,822 34,519 3.1 % 1.6 % 12.4 % Auto Service and Repair 6,153 21,783 27,936 2.5 % 1.3 % 10.1 % Adult Care/Assisted Living 17,057 9,726 26,783 2.4 % 1.2 % 9.7 % School/Higher Education 10,420 14,959 25,379 2.3 % 1.2 % 9.2 % Student Housing 21,563 — 21,563 2.0 % 1.0 % 7.8 % Total commercial real estate $ 900,513 $ 198,550 $ 1,099,063 100.0 % 50.4 % 396.8 % % of Total Bank Risk-Based Capital(1) 325.1 % 71.7 % 396.8 % % of Total CRE loans 81.9 % 18.1 % (1) Due to loan classifications, the percentage of Total Bank Risk-Based Capital may differ from the call report. The table below breaks down the commercial real estate portfolio outstanding balance by non-owner and owner occupied and by concentration as of December 31, 2024: Property Type Non-Owner Occupied Owner Occupied Total % of CRE Portfolio % of Total Loans % of Total Bank Risk-Based Capital(1) (Dollars in thousands) Office Portfolio $ 177,102 $ 23,013 $ 200,115 18.6 % 9.7 % 73.9 % Apartment 179,874 — 179,874 16.7 % 8.7 % 66.4 % Industrial 116,663 51,618 168,281 15.6 % 8.1 % 62.1 % Retail 109,936 7,105 117,041 10.9 % 5.7 % 43.2 % Other 37,231 30,471 67,702 6.3 % 3.3 % 25.0 % Mixed Use 71,226 6,402 77,628 7.2 % 3.8 % 28.7 % Hotel/Hospitality 43,133 — 43,133 4.0 % 2.1 % 15.9 % Automotive Sales 2,705 36,554 39,259 3.6 % 1.9 % 14.5 % Adult Care/Assisted Living 31,635 6,119 37,754 3.5 % 1.8 % 13.9 % Self-Storage 33,765 329 34,094 3.2 % 1.6 % 12.6 % Student Housing 22,047 — 22,047 2.0 % 1.1 % 8.1 % Warehouse 20,942 10,045 30,987 2.9 % 1.5 % 11.4 % Shopping Center 23,193 7,518 30,711 2.9 % 1.5 % 11.3 % School/Higher Education 11,376 15,730 27,106 2.5 % 1.3 % 10.0 % Total commercial real estate $ 880,828 $ 194,904 $ 1,075,732 100.0 % 52.0 % 397.1 % % of Total Bank Risk-Based Capital(1) 325.2 % 71.9 % 397.1 % % of Total CRE loans 81.9 % 18.1 % (1) Due to loan classifications, the percentage of Total Bank Risk-Based Capital may differ from the call report. At December 31, 2025, of the $1.1 billion in commercial real estate loans, $900.5 million, or 41.3% of total loans, were categorized as non-owner occupied and represented 325.1% of total bank risk-based capital.  69 The following table further breaks down the non-owner occupied commercial real estate portfolio balances by concentration, collateral location and weighted average loan-to-value (“LTV”) as of December 31, 2025: Property Type MA CT NH RI ME Other Total % of Total Bank Risk-Based Capital(1) Weighted Average LTV(2) (Dollars in thousands) Apartment $ 107,299 $ 43,612 $ — $ 23,419 $ — $ — $ 174,330 62.9 % 52.2 % Office 63,973 60,433 38,586 — 11,204 — 174,196 62.9 % 62.6 % Industrial 74,031 34,887 — 11,229 — 4,454 124,601 45.0 % 56.4 % Retail 53,291 25,964 13,865 6,070 11,166 — 110,356 39.8 % 50.8 % Mixed Use 35,641 22,503 — 12,809 — 4,640 75,593 27.3 % 55.7 % Self-Storage 36,155 9,180 771 — — — 46,106 16.6 % 55.4 % Other 40,666 3,984 677 — 118 — 45,445 16.4 % 51.5 % Hotel/Hospitality 20,074 21,508 — — — — 41,582 15.0 % 51.1 % Shopping Center 9,227 19,627 — — — — 28,854 10.4 % 48.4 % Warehouse 17,034 4,889 — — — 1,637 23,560 8.5 % 41.4 % Student Housing 3,628 14,934 2,660 — — 341 21,563 7.8 % 60.7 % Adult Care/Assisted Living 8,543 8,514 — — — — 17,057 6.2 % 58.6 % School/Higher Education 10,420 — — — — — 10,420 3.8 % 43.3 % Automotive Service and Repair 4,982 1,171 — — — — 6,153 2.2 % 65.8 % Automotive Sales 697 — — — — — 697 0.3 % 57.0 % Total Non-Owner CRE $ 485,661 $ 271,206 $ 56,559 $ 53,527 $ 22,488 $ 11,072 $ 900,513 325.1 % 54.9 % (1) Due to loan classifications, the percentage of Total Bank Risk-Based Capital may differ from the call report. (2) Weighted average LTV is based on the original appraisal and the current loan exposure. At December 31, 2024, of the $1.1 billion in commercial real estate loans, $880.8 million, or 42.6% of total loans, was categorized as non-owner occupied and represented 325.2% of total risk-based capital. The following table further breaks down the non-owner occupied commercial real estate portfolio balances by concentration, collateral location and weighted average LTV as of December 31, 2024. Property Type MA CT NH RI Other Total % of Total Bank Risk-Based Capital(1) Weighted Average LTV(2) (Dollars in thousands) Apartment $ 114,922 $ 37,212 $ — $ 27,740 $ — $ 179,874 66.4 % 54.7 % Office 62,554 62,906 40,237 — 11,405 177,102 65.4 % 64.4 % Industrial 60,192 35,438 — 14,992 6,041 116,663 43.1 % 56.0 % Retail 55,555 23,551 13,752 6,219 10,859 109,936 40.6 % 55.4 % Mixed Use 31,899 21,552 — 13,062 4,713 71,226 26.3 % 57.7 % Other 30,449 5,949 707 — 126 37,231 13.7 % 55.3 % Hotel/Hospitality 20,813 22,320 — — — 43,133 15.9 % 51.8 % Adult Care/Assisted Living 15,089 16,546 — — — 31,635 11.7 % 58.6 % Self-Storage 24,433 8,548 784 — — 33,765 12.5 % 63.0 % Student Housing 3,717 15,323 2,660 — 347 22,047 8.1 % 72.4 % Shopping Center 7,176 16,017 — — — 23,193 8.6 % 50.9 % Warehouse 17,406 3,319 — — 217 20,942 7.7 % 44.5 % School/Higher Education 11,376 — — — — 11,376 4.2 % 45.0 % Automotive Sales 2,705 — — — — 2,705 1.0 % 39.5 % Total Non-Owner CRE $ 458,286 $ 268,681 $ 58,140 $ 62,013 $ 33,708 $ 880,828 325.2 % 57.2 % (1) Due to loan classifications, the percentage of Total Bank Risk-Based Capital may differ from the call report. (2) Weighted average LTV is based on the original appraisal and the current loan exposure.  70 The Company also underwrites and originates owner occupied commercial real estate loans. These loans are typically term loans made to support properties that rely upon the operations of the business occupying the property for repayment. The Agencies specifically excluded owner occupied commercial real estate from their concentration guidance, as the primary source of repayment is the cash flow from the ongoing operations and activities conducted by the party, or affiliate of the party, who owns the property. The table below depicts a well-diversified portfolio of owner occupied commercial real estate portfolio as of December 31, 2025: Property Type MA CT NH Other Total % of Total Bank Risk-Based Capital(1) Weighted Average LTV(2) (Dollars in thousands) Owner Occupied CRE Adult Care/Assisted Living $ — $ — $ 9,726 $ — $ 9,726 3.5 % 57.2 % Automotive Sales 27,404 6,418 — — 33,822 12.2 % 57.7 % Automotive Service and Repair 4,626 17,157 — — 21,783 7.9 % 61.5 % School/Higher Education 14,959 — — — 14,959 5.4 % 63.9 % Industrial 37,852 6,331 — 199 44,382 16.0 % 50.9 % Mixed Use 4,964 777 — — 5,741 2.1 % 56.3 % Office 18,550 2,411 — — 20,961 7.6 % 56.1 % Retail 5,102 — — — 5,102 2.1 % 50.4 % Shopping Center 4,201 2,091 — — 6,292 2.2 % 55.6 % Self-Storage 67 — — — 67 -% 51.3 % Warehouse 9,992 347 — — 10,339 3.7 % 63.9 % Other 15,903 8,600 873 — 25,376 9.0 % 40.6 % Total Owner Occupied CRE $ 143,620 $ 44,132 $ 10,599 $ 199 $ 198,550 71.7 % 54.7 % (1) Due to loan classifications, the percentage of Total Bank Risk-Based Capital may differ from the call report. (2) Weighted average LTV is based on the original appraisal and the current loan exposure. The table below depicts a well-diversified portfolio of owner occupied commercial real estate as of December 31, 2024: Property Type MA CT NH Other Total % of Total Bank Risk-Based Capital(1) Weighted Average LTV(2) (Dollars in thousands) Owner Occupied CRE Adult Care/Assisted Living $ — $ — $ 6,119 $ — $ 6,119 2.3 % 58.1 % Automotive Sales 29,858 6,696 — — 36,554 13.5 % 59.8 % School/Higher Education 15,730 — — — 15,730 5.8 % 66.8 % Industrial 42,456 8,594 — 568 51,618 19.1 % 52.7 % Mixed Use 5,820 582 — — 6,402 2.4 % 53.0 % Office 20,477 2,536 — — 23,013 8.5 % 57.2 % Retail 7,105 — — — 7,105 2.6 % 53.4 % Shopping Center 5,358 2,160 — — 7,518 2.8 % 56.5 % Self-Storage 329 — — — 329 0.1 % 20.5 % Warehouse 9,671 374 — — 10,045 3.7 % 63.2 % Other 21,773 7,782 916 — 30,471 11.2 % 49.4 % Total Owner Occupied CRE $ 158,577 $ 28,724 $ 7,035 $ 568 $ 194,904 72.0 % 56.0 % ____________________  (1) Due to loan classifications, the percentage of Total Bank Risk-Based Capital may differ from the call report. (2) Weighted average LTV is based on the original appraisal and the current loan exposure. Commercial Real Estate Office Exposure. Our total office related commercial real estate loans (which is comprised of loans within our commercial real estate portfolio that are secured by office space, medical office space, and mixed-use where rental income is primarily from office space) totaled $195.2 million, or 70.5% of total bank risk-based capital and $200.1 million, or 73.9% of total bank risk-based capital, as of December 31, 2025 and December 31, 2024, respectively.  71 The table below breaks the commercial real estate office loans by collateral type for the periods noted: December 31, 2025 Non-Owner Occupied Owner Occupied Total % of Office Portfolio % of Total Bank Risk-Based Capital(1) (Dollars in thousands) Collateral Type: Office/Medical $ 108,113 $ 9,941 $ 118,054 60.5 % 42.6 % Office/Professional Metro 3,577 7,796 11,373 5.8 % 4.1 % Office/Professional Suburban 35,686 3,011 38,697 19.8 % 14.0 % Office/Professional Urban 26,820 213 27,033 13.9 % 9.8 % Total Office Portfolio $ 174,196 $ 20,961 $ 195,157 100.0 % 70.5 % December 31, 2024 Non-Owner Occupied Owner Occupied Total % of Office Portfolio % of Total Bank Risk-Based Capital(1) (Dollars in thousands) Collateral Type: Office/Medical $ 106,884 $ 10,760 $ 117,644 58.8 % 43.4 % Office/Professional Metro 3,693 8,259 11,952 6.0 % 4.4 % Office/Professional Suburban 39,336 3,681 43,017 21.5 % 15.9 % Office/Professional Urban 27,189 313 27,502 13.7 % 10.2 % Total Office Portfolio $ 177,102 $ 23,013 $ 200,115 100.0 % 73.9 % (1) Due to loan classifications, the percentage of Total Bank Risk-Based Capital may differ from the call report. CRE office loans are primarily concentrated in Massachusetts, where approximately 42.3% at December 31, 2025 and 41.5%, at December 31, 2024, of the total balance of CRE office loans are located. The Company does not have CRE loans secured by office real estate in greater Boston or New York.  December 31, 2025 Non-Owner Occupied Owner Occupied Total % of Office Portfolio % of Total Bank Risk-Based Capital(1) (Dollars in thousands) By State: Massachusetts $ 63,973 $ 18,550 $ 82,523 42.3 % 29.8 % Connecticut 60,433 2,411 62,844 32.2 % 22.7 % New Hampshire 38,586 — 38,586 19.8 % 14.0 % Other 11,204 — 11,204 5.7 % 4.0 % Total Office Portfolio $ 174,196 $ 20,961 $ 195,157 100.0 % 70.5 % December 31, 2024 Non-Owner Occupied Owner Occupied Total % of Office Portfolio % of Total Bank Risk-Based Capital(1) (Dollars in thousands) By State: Massachusetts $ 62,554 $ 20,477 $ 83,031 41.5 % 30.7 % Connecticut 62,906 2,536 65,442 32.7 % 24.2 % New Hampshire 40,237 — 40,237 20.1 % 14.9 % Other 11,405 — 11,405 5.7 % 4.2 % Total Office Portfolio $ 177,102 $ 23,013 $ 200,115 100.0 % 73.9 % (1) Due to loan classifications, the percentage of Total Bank Risk-Based Capital may differ from the call report.  72 The following table sets forth the CRE office loans for non-owner occupied and owner occupied CRE and their credit quality indicators as of the dates indicated: December 31, 2025 Non-Owner Occupied Owner Occupied Total % of Office Portfolio % of Total Bank Risk-Based Capital(1) (Dollars in thousands) By Risk Rating: Pass $ 166,275 $ 20,683 $ 186,958 95.8 % 67.5 % Special Mention 72 — 72 — % — % Substandard 7,849 278 8,127 4.2 % 3.0 % Total Office Portfolio $ 174,196 $ 20,961 $ 195,157 100.0 % 70.5 % December 31, 2024 Non-Owner Occupied Owner Occupied Total % of Office Portfolio % of Total Bank Risk-Based Capital(1) (Dollars in thousands) By Risk Rating: Pass $ 169,177 $ 21,632 $ 190,809 95.4 % 70.5 % Special Mention 7,925 724 8,649 4.3 % 3.2 % Substandard — 657 657 0.3 % 0.2 % Total Office Portfolio $ 177,102 $ 23,013 $ 200,115 100.0 % 73.9 % (1) Due to loan classifications, the percentage of Total Bank Risk-Based Capital may differ from the call report. Given prevailing market conditions such as recent sustained increases in interest rates, reduced occupancy as a result of the increase in hybrid work arrangements post-COVID, and lower commercial real estate valuations, we carefully monitor these loans for signs of deterioration in credit quality and other risks. Such heightened monitoring includes incremental risk management strategies undertaken by management, including more frequent portfolio reviews, ongoing monitoring of market conditions, and additional portfolio analysis, which may include monitoring concentration limitations, including concentrations by loan type, property type, geographic area and with participants, where applicable, and risk diversification, tracking aggregated policy and underwriting exceptions and stress testing the loan portfolios. Bank-Owned Life Insurance. The Company owns bank-owned life insurance (“BOLI”) to help offset the cost of employee benefit plans. BOLI is recorded at its cash surrender value. BOLI policies insure the lives of officers and certain employees and names the Bank as beneficiary. The change in the cash surrender value is included as a component of non-interest income and is exempt from federal and state income taxes as long as the policies are held until the death of the insured individuals. The cash surrender value of BOLI was $79.0 million and $77.1 million at December 31, 2025 and December 31, 2024, respectively, and was issued by eleven insurance companies rated investment grade or better. Deposits. At December 31, 2025, total deposits were $2.4 billion and increased $98.3 million, or 4.3%, from December 31, 2024. Core deposits, which the Company defines as all deposits except time deposits, increased $111.9 million, or 7.2%, from $1.6 billion, or 68.9% of total deposits, at December 31, 2024, to $1.7 billion, or 70.8% of total deposits, at December 31, 2025. Non-interest-bearing deposits increased $28.9 million, or 5.1%, to $594.5 million, and represent 25.2% of total deposits, money market accounts increased $54.1 million, or 8.2%, to $715.6 million, interest-bearing checking accounts increased $23.9 million, or 15.9%, to $174.2 million, and savings accounts increased $5.0 million, or 2.7%, to $186.6 million. Time deposits decreased $13.7 million, or 1.9%, from $703.6 million at December 31, 2024 to $689.9 million at December 31, 2025. Brokered time deposits, which are included in time deposits, totaled $1.7 million at December 31, 2024. The Company did not have any brokered time deposits at December 31, 2025. We continue our disciplined and focused approach to core relationship management and customer outreach to meet funding requirements and liquidity needs, with an emphasis on retaining a long-term core customer relationship base by competing for and retaining deposits in our local market. At December 31, 2025, the Bank’s uninsured deposits totaled $697.6 million, or 29.5% of total deposits, compared to $643.6 million, or 28.4% of total deposits, at December 31, 2024.  73 Borrowed Funds. At December 31, 2025, total borrowings decreased $17.1 million, or 13.9%, from $123.1 million at December 31, 2024 to $106.1 million. At December 31, 2025, short-term borrowings increased $7.9 million, or 146.2%, to $13.3 million, compared to $5.4 million at December 31, 2024. Long-term borrowings decreased $25.0 million, or 25.5%, from $98.0 million at December 31, 2024 to $73.0 million at December 31, 2025. At December 31, 2025 and December 31, 2024, borrowings also consisted of $19.8 million in fixed-to-floating rate subordinated notes. As of December 31, 2025, the Company had $538.6 million of additional borrowing capacity at the FHLB, $349.0 million of additional borrowing capacity under the FRB Discount Window and $25.0 million of other unsecured lines of credit with correspondent banks. Shareholders’ Equity. At December 31, 2025, shareholders’ equity was $247.6 million, or 9.1% of total assets, compared to $235.9 million, or 8.9% of total assets, at December 31, 2024. The change was primarily attributable to net income of $15.3 million and a decrease in accumulated other comprehensive loss of $6.6 million, partially offset by cash dividends paid of $5.7 million and the repurchase of shares at a cost of $6.2 million. At December 31, 2025, total shares outstanding were 20,372,786. The Company’s regulatory capital ratios continue to be strong and in excess of regulatory minimum requirements to be considered well-capitalized as defined by regulators and internal Company targets. The Company’s book value per share was $12.16 at December 31, 2025, compared to $11.30 at December 31, 2024, while tangible book value per share, a non-GAAP financial measure, increased $0.86, or 8.1%, from $10.63 at December 31, 2024 to $11.49 at December 31, 2025. For more information regarding the Company’s use of Non-GAAP financial measures see “Explanation of Use of Non-GAAP Financial Measurements.” Assets under Management. Total assets under management include loans serviced for others and investment assets under management. Loans serviced for others and investment assets under management are not carried as assets on the Company’s consolidated balance sheet, and as such, total assets under management is not a financial measurement recognized under GAAP, however, management believes its disclosure provides information useful in understanding the trends in total assets under management. The Company provides a wide range of investment advisory and wealth management services through Westfield Investment Services through LPL Financial, a third-party broker-dealer. Investment assets under management increased $34.7 million, or 17.4%, to $234.0 million as of December 31, 2025, from $199.3 million as of December 31, 2024. Comparison of Operating Results for Years Ended December 31, 2025 and 2024. General. For the twelve months ended December 31, 2025, the Company reported net income of $15.3 million, or $0.75 per diluted share, compared to $11.7 million, or $0.56 per diluted share, for the twelve months ended December 31, 2024. Net interest income increased $10.3 million, or 17.2%, provision for credit losses increased $1.0 million, non-interest income decreased $387,000, or 3.0%, and non-interest expense increased $4.1 million, or 6.9%, compared to 2024. Return on average assets and return on average equity were 0.56% and 6.35% for the twelve months ended December 31, 2025, respectively, compared to 0.45% and 4.93% for the twelve months ended December 31, 2024, respectively.  74 Net Interest Income and Net Interest Margin. During the twelve months ended December 31, 2025, net interest income increased $10.3 million, or 17.2%, to $70.1 million, compared to $59.8 million for the twelve months ended December 31, 2024. The increase in net interest income was due to an increase in interest income of $8.8 million, or 8.0%, and a decrease in interest expense of $1.5 million, or 3.0%. The net interest margin for the twelve months ended December 31, 2025 was 2.75%, compared to 2.45% for the twelve months ended December 31, 2024. The net interest margin, on a tax-equivalent basis, was 2.77% for the twelve months ended December 31, 2025, compared to 2.47% for the twelve months ended December 31, 2024. During the twelve months ended December 31, 2024, the Company had fair value hedge income of $1.4 million, which contributed six basis points to the net interest margin. The adjusted net interest margin, excluding income from the fair value hedge, a non-GAAP financial measure, increased 36 basis points from 2.39% for the twelve months ended December 31, 2024 to 2.75% for the twelve months ended December 31, 2025. The fair value hedge matured in October of 2024. For more information regarding the Company’s use of Non-GAAP financial measures see “Explanation of Use of Non-GAAP Financial Measurements.” The average yield on interest-earning assets, without the impact of tax-equivalent adjustments, increased 15 basis points from 4.50% for the twelve months ended December 31, 2024 to 4.65% for the twelve months ended December 31, 2025. The average yield on loans, without the impact of tax-equivalent adjustments, increased 14 basis points from 4.86% for the twelve months ended December 31, 2024 to 5.00% for the twelve months ended December 31, 2025. During the twelve months ended December 31, 2025, average interest-earning assets increased $108.9 million, or 4.5%, to $2.5 billion, compared to the twelve months ended December 31, 2024, primarily due to an increase in average loans of $73.6 million, or 3.6%, an increase in average short-term investments, consisting of cash and cash equivalents, of $21.5 million, or 64.7%, and an increase in average securities of $13.6 million, or 3.8%. During the twelve months ended December 31, 2025, the average cost of funds, including non-interest-bearing demand accounts and borrowings, decreased 15 basis points from 2.14% for the twelve months ended December 31, 2024 to 1.99%. For the twelve months ended December 31, 2025, the average cost of core deposits, including non-interest-bearing demand deposits, increased 15 basis points from 0.89% for the twelve months ended December 31, 2024, to 1.04%. The average cost of time deposits decreased 63 basis points from 4.32% for the twelve months ended December 31, 2024 to 3.69% for the twelve months ended December 31, 2025. The average cost of borrowings, which include borrowings and subordinated debt, increased 2 basis points from 5.00% for the twelve months ended December 31, 2024 to 5.02% for the twelve months ended December 31, 2025. For the twelve months ended December 31, 2025, average demand deposits, an interest-free source of funds, increased $20.9 million, or 3.7%, from $561.3 million, or 25.8% of total average deposits, for the twelve months ended December 31, 2024, to $582.2 million, or 25.1% of total average deposits. Provision for Credit Losses. The credit loss estimation process involves procedures to appropriately consider the unique characteristics of loan portfolio segments, which consist of commercial real estate loans, residential real estate loans, commercial and industrial loans, and consumer loans. These segments are further disaggregated into loan classes, the level at which credit risk is monitored. For each of these pools, the Company generates cash flow projections at the instrument level wherein payment expectations are adjusted for estimated prepayment speed, curtailments, time to recovery, probability of default, and loss given default. The modeling of expected prepayment speeds, curtailment rates, and time to recovery are based on historical internal data. The quantitative component of the ACL on loans is model-based and utilizes a forward-looking macroeconomic forecast. The Company uses a discounted cash flow method, incorporating probability of default and loss given default forecasted based on statistically derived economic variable loss drivers, to estimate expected credit losses. This process includes estimates which involve modeling loss projections attributable to existing loan balances, and considering historical experience, current conditions, and future expectations for pools of loans over a reasonable and supportable forecast period. The historical information either experienced by the Company or by a selection of peer banks, when appropriate, is derived from a combination of recessionary and non-recessionary performance periods for which data is available. The expected loss estimates for the consumer loan segment are based on historical loss rates using the WARM method.  75 During the twelve months ended December 31, 2025, the Company recorded a provision for credit losses of $335,000, compared to a reversal of credit losses of $665,000 during the twelve months ended December 31, 2024. The $1.0 million increase in the provision for credit losses was primarily due to an increase in total loans of $113.2 million, or 5.5%. The provision for credit losses was determined by a number of factors: the continued strong credit performance of the Company’s loan portfolio, changes in the loan portfolio mix and Management’s consideration of existing economic conditions and the economic outlook from the Federal Reserve Bank’s actions to control inflation. Management continues to monitor macroeconomic variables related to increasing interest rates, tariffs, inflation and concerns of an economic downturn, and believes it is appropriately reserved for the current economic environment. The Company recorded net recoveries of $472,000 for the twelve months ended December 31, 2025, as compared to net recoveries of $87,000 for the twelve months ended December 31, 2024. During the twelve months ended December 31, 2025, the Company recorded a recovery of $624,000 on a previously charged-off commercial relationship acquired on October 21, 2016 from Chicopee Bancorp, Inc. As of June 30, 2025, the relationship paid in full. Although management believes it has established and maintained the allowance for credit losses at appropriate levels for the current economic environment and supportable forecast period, future adjustments may be necessary if economic, real estate and other conditions differ substantially from the current operating environment. Non-Interest Income. For the twelve months ended December 31, 2025, non-interest income decreased $387,000, or 3.0%, from $12.9 million during the twelve months ended December 31, 2024 to $12.5 million. During the same period, service charges and fees on deposits increased $715,000, or 7.8%, and income from BOLI increased $52,000, or 2.7%. During the twelve months ended December 31, 2025, the Company reported $347,000 in other income from loan-level swap fees on commercial loans, compared to $261,000 during the same period in 2024. During the twelve months ended December 31, 2025, the Company reported a gain of $243,000 on non-marketable equity investments, compared to a gain of $1.3 million during the twelve months ended December 31, 2024. During the twelve months ended December 31, 2025, the Company reported unrealized gains on marketable equity securities of $35,000, compared to unrealized gains on marketable equity securities of $13,000 during the twelve months ended December 31, 2024. Gains and losses from the investment portfolio vary from quarter to quarter based on market conditions, as well as the related yield curve and valuation changes. During the twelve months ended December 31, 2025, the Company reported $11,000 in gains from mortgage banking activities, compared to $235,000 during the twelve months ended December 31, 2024 due to the sale of fixed rate residential real estate loans. In addition, during the twelve months ended December 31, 2024, the Company reported a loss on the disposal of premises and equipment of $6,000 and did not have a comparable gain or loss during the twelve months ended December 31, 2025. Non-Interest Expense. For the twelve months ended December 31, 2025, non-interest expense increased $4.1 million, or 6.9%, to $62.5 million, compared to $58.4 million for the twelve months ended December 31, 2024. The increase in non-interest expense was primarily due to an increase in salaries and employee benefits of $3.0 million, or 9.3%, due to an increase in deferred compensation expense to reflect updated year-end performance award estimates as well as annual merit increases. Advertising expense increased $385,000, or 30.3%, data processing expense increased $153,000, or 4.4%, FDIC insurance expense increased $144,000, or 9.9%, software related expenses increased $124,000, or 4.9%, debit card and ATM processing fees increased $46,000, or 1.9%, and other non-interest expense increased $410,000, or 8.0%. These increases were partially offset by a decrease in occupancy expense of $11,000 or 0.2%, a decrease in furniture and equipment expense of $87,000, or 4.5%, and a decrease in professional fees of $144,000, or 6.7%. For the twelve months ended December 31, 2025, the efficiency ratio was 75.6%, compared to 80.4% for the twelve months ended December 31, 2024. The decrease in the efficiency ratio was driven by higher net interest income during the twelve months ended December 31, 2025 compared to the twelve months ended December 31, 2024. Income Taxes. Income tax expense for the twelve months ended December 31, 2025 was $4.5 million, representing an effective tax rate of 22.8%, compared to $3.3 million, representing an effective tax rate of 22.0%, for the twelve months ended December 31, 2024. The increase in income tax expense was due to higher pre-tax income for the twelve months ended December 31, 2025.  76 Liquidity and Capital Resources. The term “liquidity” refers to our ability to generate adequate amounts of cash to fund loan originations, loan purchases, deposit withdrawals and operating expenses. Our primary sources of liquidity are deposits, scheduled amortization and prepayments of loan principal and mortgage-backed securities, maturities and calls of investment securities and funds provided by our operations. We also can borrow funds from the FHLB based on eligible collateral of loans and securities. Our material cash commitments include funding loan originations, fulfilling contractual obligations with third-party service providers, maintaining operating leases for certain of our Bank properties and satisfying repayment of our long-term debt obligations. Primary Sources of Liquidity The Company, on an ongoing basis, closely monitors the Company’s liquidity position for compliance with internal policies, and believes that available sources of liquidity are adequate to meet funding needs in the normal course of business. As part of that monitoring process, the Company stresses the potential liabilities calculation to ensure a strong liquidity position. Included in the calculation are assumptions of some significant deposit run-off as well as funds needed for loan closing and investment purchases. The Company does not anticipate engaging in any activities, either currently or over the long-term, for which adequate funding would not be available and which would therefore result in significant pressure on liquidity. However, an economic recession could negatively impact the Company’s liquidity. The Bank relies heavily on FHLB as a source of funds, particularly with its overnight line of credit. In past economic recessions, some FHLB branches have suspended dividends, cut dividend payments, and not bought back excess FHLB stock that members hold in an effort to conserve capital. FHLB has stated that it expects to be able to continue to pay dividends, redeem excess capital stock, and provide competitively priced advances in the future. At December 31, 2025 and December 31, 2024, outstanding borrowings from the FHLB were $83.0 million and $98.0 million, respectively. At December 31, 2025, we had $538.6 million in available borrowing capacity with the FHLB, including our $9.5 million overnight Ideal Way Line of Credit. We have the ability to increase our borrowing capacity with the FHLB by pledging investment securities or additional loans. The Company has an available line of credit of $349.0 million with the FRB Discount Window at an interest rate determined and reset on a daily basis. Borrowings from the FRB Discount Window are secured by certain eligible loan collateral and securities from the Company’s investment portfolio not otherwise pledged. As of December 31, 2025 and December 31, 2024, there were no advances outstanding under either of these lines. In addition, we have available lines of credit of $15.0 million and $10.0 million with other correspondent banks. Interest rates on these lines are determined and reset on a daily basis by each respective bank. At December 31, 2025 and 2024, we did not have an outstanding balance under either of these lines of credit. In addition, we may enter into reverse repurchase agreements with approved broker-dealers. Reverse repurchase agreements are agreements that allow us to borrow money using our securities as collateral. We also have outstanding at any time, a significant number of commitments to extend credit and provide financial guarantees to third parties. These arrangements are subject to strict credit control assessments. Guarantees specify limits to our obligations. Because many commitments and almost all guarantees expire without being funded in whole or in part, the contract amounts are not estimates of future cash flows. We are also obligated under agreements with the FHLB to repay borrowed funds and are obligated under leases for certain of our branches and equipment. Maturing investment securities are a relatively predictable source of funds. However, deposit flows, calls of securities and prepayments of loans and mortgage-backed securities are strongly influenced by interest rates, general and local economic conditions and competition in the marketplace. These factors reduce the predictability of the timing of these sources of funds. The Company’s primary activities are the origination of commercial real estate loans, commercial and industrial loans and residential real estate loans, as well as and the purchase of mortgage-backed and other investment securities. During the year ended December 31, 2025, we originated $380.2 million in loans, compared to $336.4 million in 2024. Total loans increased $113.2 million, or 5.5%, from $2.1 billion, or 77.9% of total assets, at December 31, 2024 to $2.2 billion, or 79.7% of total assets, at December 31, 2025. At December 31, 2025, the Company had approximately $144.0 million in loan commitments and letters of credit to borrowers and approximately $357.3 million in available home equity and other unadvanced lines of credit.  77 Deposit inflows and outflows are affected by the level of interest rates, the products and interest rates offered by competitors and by other factors. At December 31, 2025, time deposit accounts scheduled to mature within one year totaled $678.1 million, or 98.3% of total time deposits. Based on the Company’s deposit retention experience and current pricing strategy, we anticipate that a significant portion of these time deposits will remain on deposit. We monitor our liquidity position frequently and anticipate that it will have sufficient funds to meet our current funding commitments for the next 12 months and beyond. At December 31, 2025, the Company and the Bank exceeded each of the applicable regulatory capital requirements (See Note 13, Regulatory Capital, to our consolidated financial statements for further information on our regulatory requirements). Material Cash Commitments 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, 2025 were estimated to be $3.6 million, which is expected to be paid within one year. Further, the Company has operating leases for certain of its banking offices and ATMs. Our leases have remaining lease terms of less than one year to thirteen years, some of which include options to extend the leases for additional five-year terms up to ten years. Undiscounted lease liabilities totaled $7.7 million as of December 31, 2025. Principal payments expected to be made on our lease liabilities during the twelve months ended December 31, 2025 were $1.4 million. The remaining lease liability payments totaled $6.3 million and are expected to be made after December 31, 2026 (See Note 12, Leases, to our consolidated financial statements for further information on our lease obligations). On April 20, 2021, the Company completed an offering of its private placement of $20.0 million aggregate principal amount of 4.875% fixed-to-floating rate subordinated notes due on May 1, 2031, unless earlier redeemed, to certain qualified institutional buyers (the “Notes”). The Notes 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 (“SOFR”), 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 (See Note 8, Long-Term Debt, to our consolidated financial statements for further information on our long-term debt). At December 31, 2025 and December 31, 2024, $19.8 million in aggregate principal amount of the Notes was outstanding. We do not anticipate any material capital expenditures during the calendar year 2025, except in pursuance of the Company’s strategic initiatives. The Company does not have any balloon or other payments due on any long-term obligations or any off-balance sheet items other than the commitments and unused lines of credit noted above. Off-Balance Sheet Arrangements. The Company does not have any off-balance sheet arrangements, other than noted above and in Note 16, Commitments and Contingencies, to our consolidated financial statements, that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors. Management of Market Risk. As a financial institution, our primary market risk is interest rate risk since substantially all transactions are denominated in U.S. dollars with no direct foreign exchange or changes in commodity price exposure. Fluctuations in interest rates will affect both our level of income and expense on a large portion of our assets and liabilities. Fluctuations in interest rates will also affect the market value of all interest-earning assets and interest-bearing liabilities.  78 The Company’s interest rate management strategy is to limit fluctuations in net interest income as interest rates vary up or down and control variations in the market value of assets, liabilities and net worth as interest rates vary. We seek to coordinate asset and liability decisions so that, under changing interest rate scenarios, net interest income will remain within an acceptable range. In order to achieve the Company’s objectives of managing interest rate risk, the Asset and Liability Management Committee (“ALCO”) meets periodically to discuss and monitor the market interest rate environment relative to interest rates that are offered on our products. ALCO presents quarterly reports to the Board which includes the Company’s interest rate risk position and liquidity position. The Company’s primary source of funds are deposits, consisting primarily of time deposits, money market accounts, savings accounts, demand accounts and interest-bearing checking accounts, which have shorter terms to maturity than the loan portfolio. Several strategies have been employed to manage the interest rate risk inherent in the asset/liability mix, including but not limited to: ● maintaining the diversity of our existing loan portfolio through residential real estate loans, commercial and industrial loans and commercial real estate loans; ● emphasizing investments with an expected average duration of five years or less; and ● when appropriate, using interest rate swaps to manage the interest rate position of the balance sheet. In 2025, cash flows from deposit inflows were used to fund loan growth. During 2025, the Company experienced net loan growth in residential real estate loans, commercial real estate loans and commercial and industrial loans. The Company’s long-term focus continues to be on growing commercial loans that present the appropriate levels of risk and return. Commercial loans typically have variable interest rates and shorter maturities than residential loans. The actual amount of time before loans are repaid can be significantly affected by changes in market interest rates. Prepayment rates will also vary due to a number of other factors, including the regional economy in the area where the loans were originated, seasonal factors, demographic variables and the assumability of the loans. However, the major factors affecting prepayment rates are prevailing interest rates, related financing opportunities and competition. We monitor interest rate sensitivity so that we can adjust our asset and liability mix in a timely manner and minimize the negative effects of changing rates. The Company’s liquidity sources are vulnerable to various uncertainties beyond our control. Loan amortization and investment cash flows are a relatively stable source of funds, while loan and investment prepayments and calls, as well as deposit flows vary widely in reaction to market conditions, primarily prevailing interest rates. Asset sales are influenced by pledging activities, general market interest rates and unforeseen market conditions. Our financial condition is affected by our ability to borrow at attractive rates, retain deposits at market rates and other market conditions. We consider our sources of liquidity to be adequate to meet expected funding needs and also to be responsive to changing interest rate markets. Interest Rate Risk. Interest rate risk represents the sensitivity of earnings to changes in market interest rates. As interest rates change, the interest income and expense streams associated with our financial instruments also change, thereby impacting net interest income, the primary component of our earnings. ALCO utilizes the results of a detailed and dynamic simulation model to quantify the estimated exposure of net interest income to sustained interest rate changes. While ALCO routinely monitors simulated net interest income sensitivity over a rolling two-year horizon, they also utilize additional tools to monitor potential longer-term interest rate risk. The simulation model captures the impact of changing interest rates on the interest income received and interest expense paid on all interest-earning assets and interest-bearing liabilities reflected on our consolidated balance sheet, as well as for derivative financial instruments. This sensitivity analysis is compared to ALCO policy limits, which specify a maximum tolerance level for net interest income exposure over a one and two-year horizon, assuming no balance sheet growth.  79 The repricing and/or new rates of assets and liabilities moved in tandem with market rates. However, in certain deposit products, the use of data from a historical analysis indicated that the rates on these products would move only a fraction of the rate change amount. Pertinent data from each loan account, deposit account and investment security was used to calculate future cash flows. The data included such items as maturity date, payment amount, next repricing date, repricing frequency, repricing index, repricing spread, caps and floors. Prepayment speed assumptions were based upon the difference between the account rate and the current market rate. We also evaluate changes in interest rate sensitivity under various scenarios including but not limited to nonparallel shifts in the yield curve, variances in prepayment speeds and variances to correlations of instrument rates to market indexes. The table below shows our net interest income sensitivity analysis reflecting the following changes to net interest income for the first and second years of the simulation model. The analysis assumes no balance sheet growth, a parallel shift in interest rates, and all rate changes were “ramped” over the first 12-month period and then maintained at those levels over the remainder of the simulation horizon. Estimated Changes in Net Interest Income Changes in Interest Rates At   December 31, 2025  At   December 31, 2024  1 – 12 Months UP 200 basis points -4.0 % -4.4 % DOWN 200 basis points 4.2 % 3.9 % 13 – 24 Months UP 200 basis points 3.3 % 7.5 % DOWN 200 basis points 15.8 % 24.6 % The preceding sensitivity analysis does not represent a forecast of net interest income, nor do the calculations represent any actions that management may undertake in response to changes in interest rates. They should not be relied upon as being indicative of expected operating results. These hypothetical estimates are based upon numerous assumptions including, among others, the nature and timing of interest rate levels, yield curve shape, prepayments on loans and securities, deposit decay rates, pricing decisions on loans and deposits and reinvestment/replacement of asset and liability cash flows. While assumptions are developed based upon current economic and local market conditions, we cannot make any assurances as to the predictive nature of these assumptions, including how customer preferences or competitor influences might change. Periodically, if deemed appropriate, we may use interest rate swaps, floors and caps, which are common derivative financial instruments, to hedge our interest rate exposure to interest rate movements. The Board has approved hedging policy statements governing the use of these instruments. 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. Recent Accounting Pronouncements. Refer to Note 1 to our consolidated financial statements for a summary of the recent accounting pronouncements.  80 Impact of Inflation and Changing Prices. The Company’s consolidated financial statements and accompanying notes have been prepared in accordance with GAAP. GAAP generally requires the measurement of financial position and operating results in terms of historical dollars without consideration for changes in the relative purchasing power of money over time due to inflation. The impact of inflation is reflected in the increased cost of our operations. Unlike industrial companies, our assets and liabilities are primarily monetary in nature. As a result, changes in market interest rates have a greater impact on performance than do the effects of inflation.