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What changed in BAR HARBOR BANKSHARES's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of BAR HARBOR BANKSHARES's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+266 added−260 removedSource: 10-K (2026-03-13) vs 10-K (2025-03-11)

Top changes in BAR HARBOR BANKSHARES's 2025 10-K

266 paragraphs added · 260 removed · 170 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

72 edited+8 added−39 removed97 unchanged
Biggest changeThese forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause the actual results to differ materially from the statements, including, but not limited to: ​ ● deterioration in the financial performance and/or condition of borrowers of the Bank, including as a result of the negative impact of inflationary pressures on our customers and their businesses resulting in significant increases in credit losses and provisions for those losses; ● the possibility that our asset quality could decline or that we experience greater loan losses than anticipated; ● increased levels of other real estate owned, primarily as a result of foreclosures; ● the impact of liquidity needs on our results of operations and financial condition; ● competition from financial institutions and other financial service providers; ● the effect of interest rate increases on the cost of deposits; ● unanticipated weakness in loan demand or loan pricing; ● adverse conditions in the national or local economies including in our markets throughout Northern New England; ● changes in consumer spending, borrowing and saving habits; ● the emergence and effects related to a future pandemic, epidemic or outbreak of an infectious disease, including actions taken by governmental officials to curb the spread of such an infectious disease, and the resulting impact on general economic and financial market conditions and on the Company’s and our customers' business, results of operations, asset quality and financial condition; ● the effects of civil unrest, international hostilities or other geopolitical events, including the war in Ukraine and ongoing hostilities in the Middle East ; ● inflation, interest rate, market, and monetary fluctuations; ● lack of strategic growth opportunities or our failure to execute on available opportunities; ● the ability to grow and retain low-cost core deposits and retain large, uninsured deposits; ● our ability to effectively manage problem credits; ● our ability to successfully implement efficiency initiatives on time and with the results projected; ● our ability to successfully develop and market new products and technology; ● the impact of negative developments in the financial industry and United States and global capital and credit markets; ● our ability to retain executive officers and key employees and their customer and community relationships ; ● our ability to adapt to technological changes and to implement new technology effectively; ● the vulnerability of the Bank’s computer and information technology systems and networks, and the systems and networks of third parties with whom the Company or the Bank contract, to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss, and other security breaches and interruptions; 3 Table of Contents ● changes in the reliability of our vendors, internal control systems or information systems; ● ongoing competition in the labor markets and increased employee turnover; ● the potential impact of climate change; ● our ability to comply with various governmental and regulatory requirements applicable to financial institutions; ● changes in state and federal laws, rules, regulations, or policies applicable to banks or bank holding companies, including regulatory or legislative developments; ● the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”); ● adverse impacts (including costs, fines, reputational harm, or other negative effects) from and risks associated with current or future litigation, regulatory examinations, or other legal and/or regulatory actions; and ● general competitive, economic, political, and market conditions, including economic conditions in the local markets where we operate. ​ Other factors not identified above, including those described in the Annual Report under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Most of these factors are difficult to anticipate and are generally beyond our control.
Biggest changeThese forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause the actual results to differ materially from the statements, including, but not limited to: ​ ● changes in general business and economic conditions on a national basis and in our markets throughout Northern New England; ● changes in consumer behavior due to political, business, and economic conditions, including inflation and concerns about liquidity; ● the possibility that our asset quality could decline or that we experience greater loan losses than anticipated; ● the impact of liquidity needs on our results of operations and financial condition; ● changes in the size and nature of our competition; ● the effect of interest rate increases on the cost of deposits; ● unanticipated weakness in loan demand, pricing or collectability; ● the effect of interest rate increases on the cost of deposits; ● unanticipated weakness in loan demand or loan pricing; ● the possibility that future credit losses are higher than currently expected due to changes in economic assumptions or adverse economic developments; ● operational risks including, but not limited to, changes in information technology, cybersecurity incidents, fraud, natural disasters, climate change, war, terrorism, civil unrest, and future pandemics; ● lack of strategic growth opportunities or our failure to execute on available opportunities; ● failure to realize the expected synergies, cost savings and other financial benefits from the acquisition of Guaranty Bancorp, Inc.; ● our ability to effectively manage problem credits; ● our ability to successfully develop new products and implement efficiency initiatives on time and with the results projected; ● our ability to retain executive officers and key employees and their customer and community relationships; ● regulatory, litigation, and reputational risks and the applicability of insurance coverage; ● changes in the reliability of our vendors, internal control systems or information systems; ● the impacts of tariffs, sanctions and other trade policies of the United States and its global trading counterparts; ● changes in legislation or regulation and accounting principles, policies, and guidelines; ● reductions in the market value or outflows of wealth management assets under management ; and ● changes in the assumptions used in making such forward-looking statements. ​ Other factors not identified above, including those described in the Annual Report under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Most of these factors are 3 Table of Contents difficult to anticipate and are generally beyond our control.
The Bank is also required to send a notice to customers whose sensitive information has been compromised if unauthorized use of the information is reasonably possible. Most states, including the states where the Bank operates, have enacted legislation concerning breaches of data security and the duties of the Bank in response to a data breach.
The Bank is also required to send a notice to customers whose sensitive information has been compromised if unauthorized use of the information is reasonably possible. Most states, including the states where the Bank operates, have enacted legislation concerning breaches of data security and the duties of the Bank in response to data breaches.
The Federal Reserve has established presumptions of control under which the acquisition of control of 5% or more of a class of voting securities of a bank holding company, together with other factors enumerated by the Federal Reserve, could constitute the acquisition of control of a bank holding company for purposes of the BHC Act.
The Federal Reserve Board has established presumptions of control under which the acquisition of control of 5% or more of a class of voting securities of a bank holding company, together with other factors enumerated by the Federal Reserve Board, could constitute the acquisition of control of a bank holding company for purposes of the BHC Act.
These advances may be made pursuant to several different credit programs, each of which has its own interest rate, range of maturities and call features. ​ We also have subordinated notes, junior subordinated debenture and other sources of liquidity that are fully described in Note 7 – Borrowed Funds of the Consolidated Financial Statements. ​ RETAIL BROKERAGE SERVICES Bar Harbor Financial Services principally serves the brokerage needs of individuals ranging from first-time purchasers to sophisticated investors.
These advances may be made pursuant to several different credit programs, each of which has its own interest rate, range of maturities and call features. ​ We also have subordinated notes, junior subordinated debenture and other sources of liquidity that are fully described in Note 8 – Borrowed Funds of the Consolidated Financial Statements. ​ RETAIL BROKERAGE SERVICES Bar Harbor Financial Services principally serves the brokerage needs of individuals ranging from first-time purchasers to sophisticated investors.
Under rebuttable presumptions of control established by the Federal Reserve Board, the acquisition of control of voting securities of a bank holding company constitutes an acquisition of control under the Change in Bank Control Act, requiring prior notice to the Federal Reserve Board, if, immediately after the transaction, the acquiring person (or persons acting in concert) will own, control, or hold with power to vote 10% or more of any class of voting securities of the bank holding company, and if either (i) the bank holding company has registered securities under Section 12 of the Exchange Act, or (ii) no other person will own, control, or hold the power to vote a greater percentage of that class of voting securities immediately after the transaction.
Under rebuttable presumptions of control established by the Federal Reserve Board, the acquisition of control of voting securities of a bank holding company constitutes an acquisition of control under the Change in Bank Control Act, requiring prior notice to and non-objection by the Federal Reserve Board, if, immediately after the transaction, the acquiring person (or persons acting in concert) will own, control, or hold with power to vote 10% or more of any class of voting securities of the bank holding company, and if either (i) the bank holding company has registered securities under Section 12 of the Exchange Act, or (ii) no other person will own, control, or hold the power to vote a greater percentage of that class of voting securities immediately after the transaction.
Common equity Tier 1 generally includes common stock and related surplus, retained earnings and, in certain cases and subject to certain limitations, minority interests in consolidated subsidiaries, less goodwill, other non-qualifying intangible assets and certain other deductions.
Common equity Tier 1 capital generally includes common stock and related surplus, retained earnings and, in certain cases and subject to certain limitations, minority interests in consolidated subsidiaries, less goodwill, other non-qualifying intangible assets and certain other deductions.
COMPETITION Major competitors in market areas include local independent banks, local branches of large regional and national bank affiliates, thrift institutions, savings and loan institutions, mortgage companies, and credit unions.
COMPETITION Major competitors in our market areas include local independent banks, local branches of large regional and national bank affiliates, thrift institutions, savings and loan institutions, mortgage companies, and credit unions.
For commercial loans, this may result in a period of forbearance or restructuring of the loan, which is normally done at current market terms and may not result in a “troubled” loan designation. For residential mortgage loans, the Consumer Financial Protection Bureau (“CFPB”) guidelines are followed to attempt a restructuring that will enable owner-occupants to remain in their home.
For commercial loans, this may result in a period of forbearance or restructuring of the loan, which is normally done at current market terms and may not result in a “troubled” loan designation. For residential mortgage loans, the Consumer Financial Protection Bureau (“CFPB”) guidelines are followed to attempt a restructuring that will enable owner-occupants to remain in their homes.
There are two Connecticut statutory trusts for which all of the common stock is owned by the Company. These capital trusts are unconsolidated, and their only material asset is a $20.6 million trust preferred security related to the junior subordinated debentures reported in Note 7 – Borrowed Funds of the Consolidated Financial Statements.
There are two Connecticut statutory trusts for which all of the common stock is owned by the Company. These capital trusts are unconsolidated, and their only material asset is a $20.6 million trust preferred security related to the junior subordinated debentures reported in Note 8 – Borrowed Funds of the Consolidated Financial Statements.
The Bank provides the technology offerings and capabilities of larger banks, accompanied by access to local decision makers who are acutely focused on their local markets. Having recently celebrated the 138th anniversary of the Bank’s founding, we remain focused on helping our customers achieve their goals as the key to the Bank’s success.
The Bank provides the technology offerings and capabilities of larger banks, accompanied by access to local decision makers who are acutely focused on their local markets. Having recently celebrated the 139th anniversary of the Bank’s founding, we remain focused on helping our customers achieve their goals as the key to the Bank’s success.
With over 450 dedicated professionals and more than 50 locations, we are committed to servicing and building enduring relationships by providing a higher standard of banking. We offer a variety of financial products and services designed around our customers in order to serve their banking and financial needs.
With over 450 dedicated professionals and more than 60 locations, we are committed to servicing and building enduring relationships by providing a higher standard of banking. We offer a variety of financial products and services designed around our customers in order to serve their banking and financial needs.
The allowance represents management’s estimate of inherent losses that are probable and estimable as of the date of the financial statements. The ACL is comprised of reserves measured on a collective (pool) basis based on a lifetime loss-rate model when similar risk characteristics exist.
The allowance represents management’s estimate of expected losses that are probable and estimable as of the date of the financial statements. The ACL is comprised of reserves measured on a collective (pool) basis based on a lifetime loss-rate model when similar risk characteristics exist.
For further discussion on derivatives see Note 10 – Derivative Financial Instruments and Hedging Activities of the Consolidated Financial Statements. ​ Derivative products are offered in the form of interest rate swaps and interest rate caps, to commercial loan customers to facilitate their risk management strategies.
For further discussion on derivatives see Note 11 – Derivative Financial Instruments and Hedging Activities of the Consolidated Financial Statements. ​ Derivative products are offered in the form of interest rate swaps and interest rate caps, to commercial loan customers to facilitate their risk management strategies.
The FDIC and the BFI have the authority to issue cease and desist orders; to terminate insurance of deposits; to assess civil money penalties; to issue directives to increase capital; to place the bank into receivership; and to initiate injunctive actions against banking organizations and institution-related parties. Deposit Insurance.
The FDIC and the BFI have the authority to issue cease and desist orders; to terminate insurance of deposits; to assess civil money penalties; to issue directives to increase capital; to place the bank into receivership; and to initiate injunctive actions against banking organizations and institution-affiliated parties. Deposit Insurance.
Our corporate goal is to be one of the most consistently high performing community banks in New England, and our business model is centered on the following: ​ ● Employee and customer experience is the foundation of superior performance, which leads to significant financial benefit to shareholders ● Geography, heritage, and performance are key while remaining true to a community-focused culture ● Commitment to risk management while balancing growth and earnings ● Service and sales driven culture with a focus on core business growth ● Fee income is fundamental to our profitability through trust and treasury management services, customer derivatives, and secondary market mortgage sales ● Investment in processes, products, technology, training, leadership, and infrastructure ● Expansion of our brand and business to deepen market presence ● Opportunity and growth for existing employees while adding catalyst recruits across all levels ​ 4 Table of Contents Shown below is a profile and geographical footprint of the Bank as of December 31, 2024: ​ We serve affluent and growing markets in Maine, New Hampshire, and Vermont with more than 49 thousand, 48 thousand, and 24 thousand customers, respectively in those states.
Our corporate goal is to be one of the most consistently high performing community banks in New England, and our business model is centered on the following: ​ ● Employee and customer experience is the foundation of superior performance, which leads to significant financial benefit to shareholders ● Geography, heritage, and performance are key while remaining true to a community-focused culture ● Commitment to risk management while balancing growth and earnings ● Service and sales driven culture with a focus on core business growth ● Fee income is fundamental to our profitability through trust and treasury management services, customer derivatives, and secondary market mortgage sales ● Investment in processes, products, technology, training, leadership, and infrastructure ● Expansion of our brand and business to deepen market presence ● Opportunity and growth for existing employees while adding catalyst recruits across all levels ​ Shown below is a profile and geographical footprint of the Bank as of December 31, 2025: ​ 4 Table of Contents We serve established and growing markets in Maine, New Hampshire, and Vermont with more than 48 thousand, 73 thousand, and 23 thousand customers, respectively in those states.
Our Code of Ethics for Senior Financial Officers, Code of Conduct and Business Ethics, Securities and Insider Trading Policy and the charters of our Board of Directors’ audit committee, governance committee, and compensation and human resources committee are also available on our website (www.barharbor.bank) and in print free of charge to any shareholder who requests them.
Our Code of Ethics for Senior Financial Officers, Code of Conduct and Business Ethics, Securities and Insider Trading Policy and the charters of our Board of Directors’ audit committee, governance committee, and compensation and human resources committee are also available on our website (www.barharbor.bank) and in print free of charge to any shareholder 5 Table of Contents who requests them.
These portfolios include the categories commercial real estate, commercial and industrial, residential real estate and other consumer loans. Loan interest rates and other key loan terms are affected principally by our lending policy, asset/liability strategy, loan demand, competition, and 6 Table of Contents the supply of money available for lending purposes.
These portfolios include the categories commercial real estate, commercial and industrial, residential real estate and other consumer loans. Loan interest rates and other key loan terms are affected principally by our lending policy, asset/liability strategy, loan demand, competition, and the supply of money available for lending purposes.
HUMAN CAPITAL We are very fortunate to have a committed team throughout Maine, New Hampshire, and Vermont who are capable, determined and empowered to drive our company forward. As of December 31, 2024, we had 458 full time equivalent employees. None of our colleagues are represented by unions. All employment decisions are based on talent and potential for growth.
HUMAN CAPITAL We are very fortunate to have a committed team throughout Maine, New Hampshire, and Vermont who are capable, determined and empowered to drive our company forward. As of December 31, 2025, we had 530 full time equivalent employees. None of our colleagues are represented by unions. All employment decisions are based on talent and potential for growth.
Under the Federal Reserve Board’s rules applicable to the Company and the FDIC’s capital rules applicable to the Bank, the Company and the Bank are each required to maintain a minimum common equity Tier 1 capital to risk-weighted assets ratio of 4.5%, a minimum Tier 1 capital to risk-weighted assets ratio of 6.0%, a minimum total capital to risk-weighted assets ratio of 8.0% and a minimum leverage ratio 18 Table of Contents requirement of 4.0%.
Under the Federal Reserve Board’s rules applicable to the Company and the FDIC’s capital rules applicable to the Bank, the Company and the Bank are each required to maintain a minimum common equity Tier 1 capital to risk-weighted assets ratio of 4.5%, a minimum Tier 1 capital to risk-weighted assets ratio of 6.0%, a minimum total capital to risk-weighted assets ratio of 8.0% and a minimum leverage ratio requirement of 4.0%.
In evaluating an application to acquire a bank or to merge banks or effect a purchase of assets and assumption of deposits and other liabilities, the applicable federal banking regulator must consider the anti-money laundering compliance record of both the applicant and the target.
In evaluating an application to acquire a bank or to merge banks or effect a purchase of assets and assumption of deposits and other liabilities, the applicable federal banking regulator must consider the anti-money laundering compliance record of both the applicant and the target. Office of Foreign Assets Control.
Safety and Soundness Standard. Guidelines adopted by the federal bank regulatory agencies pursuant to the FDIA establish general standards relating to internal controls and information systems, internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth, asset quality, earnings, and compensation and benefits.
Guidelines adopted by the federal bank regulatory agencies pursuant to the FDIA establish general standards relating to internal controls and information systems, internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth, asset quality, earnings, and compensation and benefits.
Failure of an institution to receive at least a “satisfactory” rating could inhibit the Bank or the Company from undertaking certain activities, including engaging in activities permitted as a financial holding company under GLBA and acquisitions of other financial institutions.
Failure of an institution to receive at least a “satisfactory” rating could inhibit the institution or its parent company from undertaking certain activities, including engaging in activities permitted as a financial holding company under GLBA and acquisitions of other financial institutions.
Further, the CFPB also has a broad mandate to prohibit unfair, deceptive or abusive acts and practices and is specifically empowered to require certain 20 Table of Contents disclosures to consumers and draft model disclosure forms. Failure to comply with consumer protection laws and regulations can subject financial institutions to enforcement actions, fines and other penalties.
Further, the CFPB also has a broad mandate to prohibit unfair, deceptive or abusive acts and practices and is specifically empowered to require certain disclosures to consumers and draft model disclosure forms. Failure to comply with consumer protection laws and regulations can subject financial institutions to enforcement actions, fines and other penalties.
Investment decisions are made in accordance with the investment and treasury policies and include consideration of risk, return, duration, and portfolio concentrations. For further discussion on investments see Note 2 – Securities Available for Sale of the Consolidated Financial Statements.
Investment decisions are made in accordance with the investment and treasury policies and include consideration of risk, return, duration, and portfolio concentrations. For further discussion on investments see Note 3 – Available-for-sale Debt Securities of the Consolidated Financial Statements.
Congress continues to consider federal legislation that would require consumer notice of data security breaches. In addition, individual states in our market area have promulgated data security regulations with respect to personal information of their residents.
Congress continues to consider federal legislation that would require consumer notice of data security breaches. In addition, individual states in our market area 19 Table of Contents have promulgated data security regulations with respect to personal information of their residents.
The average loan size in the CRE segment is approximately $2.1 million. Delinquencies within the segment were nominal at less than 0.02% as a percentage of the total segment as of December 31, 2024. Maximum loan-to-value ratios at origination are governed by established policy and regulatory guidelines.
The average loan size in the CRE segment is approximately $1.8 million. Delinquencies within the segment were nominal at less than 0.02% as a percentage of the total segment as of December 31, 2025. Maximum loan-to-value ratios at origination are governed by established policy and regulatory guidelines.
An insured depository institution (and its subsidiaries) may not lend money to, or engage in covered transactions with, its non-depository institution affiliates if the aggregate amount of “covered transactions” outstanding involving the bank, plus the proposed transaction, exceeds the following limits: (i) in the case of any one such affiliate, the aggregate amount of “covered transactions” of the insured depository institution and its subsidiaries cannot exceed 10% of the capital stock and surplus of the insured depository institution; and (ii) in the case of all affiliates, the aggregate amount of covered transactions of the insured depository institution and its subsidiaries cannot exceed 20% of the capital stock and surplus of the insured depository institution.
An insured depository 18 Table of Contents institution (and its subsidiaries) may not lend money to, or engage in covered transactions with, its non-depository institution affiliates if the aggregate amount of “covered transactions” outstanding involving the bank, plus the proposed transaction, exceeds the following limits: (i) in the case of any one such affiliate, 10% of the capital stock and surplus of the insured depository institution; and (ii) in the case of all affiliates, 20% of the capital stock and surplus of the insured depository institution.
Outside of trust services, they also provide 401(k) plan services, financial, estate and charitable planning, investment management, family office, municipal and tax services. The 13 Table of Contents employees include credentialed investment professionals with extensive experience. At December 31, 2024 and 2023, trust management services had total assets under management (“AUM”) of $2.8 billion and $2.5 billion, respectively.
Outside of trust services, they also provide 401(k) plan services, financial, estate and charitable planning, investment management, family office, municipal and tax services. The 13 Table of Contents employees include credentialed investment professionals with extensive experience. At December 31, 2025 and 2024, trust management services had total assets under management (“AUM”) of $3.0 billion and $2.8 billion, respectively.
Restrictions on Bank Holding Company Dividends. The Federal Reserve Board has the authority to prohibit bank holding companies from paying dividends if such payment is deemed to be an unsafe or unsound practice.
The Federal Reserve Board has the authority to prohibit bank holding companies from paying dividends if such payment is deemed to be an unsafe or unsound practice.
The capital adequacy rules define qualifying capital instruments and specify minimum amounts of capital as a percentage of assets that banking organizations are required to maintain.
The capital adequacy rules define qualifying capital instruments and specify minimum amounts of capital that banking organizations are required to maintain as a percentage of assets or risk-weighted assets.
The foregoing laws and regulations generally grant supervisory agencies and bodies broad administrative powers, including the power to limit or restrict BHWM from conducting business in the event it fails to comply with such laws and regulations.
The foregoing laws and regulations generally grant supervisory agencies and bodies broad administrative powers, including the power to limit or restrict BHWM from conducting business in the event it fails to comply with such laws 20 Table of Contents and regulations.
The right of the Company, and consequently the right of shareholders of the Company, to participate in any distribution of the assets or earnings of its subsidiaries, through the payment of such dividends or otherwise, is subject to the prior claims of creditors of the subsidiaries, including, with 19 Table of Contents respect to the Bank, depositors of the Bank, except to the extent that certain claims of the Company in a creditor capacity may be recognized.
The right of the Company, and consequently the right of shareholders of the Company, to participate in any distribution of the assets or earnings of its subsidiaries, through the payment of such dividends or otherwise, is subject to the prior claims of creditors of the subsidiaries, including, with respect to the Bank, depositors of the Bank, except to the extent that certain claims of the Company in a creditor capacity may be recognized. ​ Restrictions on Bank Holding Company Dividends.
The weighted average loan-to-value ratio for the top 10 loans within the non-owner occupied segment was 60.7% as of December 31, 2024. The top 10 office loans represent approximately 8.3% of the total commercial real estate segment exposure inclusive of unfunded commitments and 9.0% of the outstanding balances.
The weighted average loan-to-value ratio for the top 10 loans within the non-owner occupied segment was 61.0% as of December 31, 2025. The top 10 office loans represent approximately 7.6% of the total commercial real estate segment exposure inclusive of unfunded commitments and 8.3% of the outstanding balances.
The Bank is also subject to various Maine business and banking regulations and the regulations issued by the Consumer Financial Protection Bureau (“CFPB”) (as enforced by the FDIC). The Federal Reserve Board may also directly examine the subsidiaries of the Company, including the Bank.
The Bank is also subject to various Maine business and banking regulations and the regulations issued by the CFPB (as enforced by the FDIC). The Federal Reserve Board may also directly examine the subsidiaries of the Company, including the Bank.
As of December 31, 2024, BHWM’s total capital was $13.2 million and it had liquidation reserves of $505 thousand held in a money market account. BHWM also had operating reserves of $11.2 million held primarily at the Bank.
As of December 31, 2025, BHWM’s total capital was $15.2 million and it had liquidation reserves of $505 thousand held in a money market account. BHWM also had operating reserves of $12.8 million held primarily at the Bank.
The following table presents the scheduled maturities of time deposits greater than $250 thousand at December 31, 2024: ​ ​ ​ ​ ​ ​ (in thousands, except ratios) ​ Amount Three months or less ​ $ 39,188 Over 3 months through 6 months ​ 62,799 Over 6 months through 12 months ​ 81,767 Over 12 months ​ 2,910 Total ​ $ 186,664 ​ BORROWING ACTIVITIES Borrowings may be utilized as an alternative source of funds which can be invested at a positive interest rate spread when additional capacity to fund loan demand is desired or when asset/liability management goals are met to diversify funding sources and enhance interest rate risk management. ​ Borrowings historically have included advances from the Federal Home Loan Bank of Boston ("FHLB"), securities sold under repurchase agreements, and a correspondent bank unsecured line of credit.
The following table presents the scheduled maturities of time deposits greater than $250 thousand at December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands, except ratios) ​ Amount Three months or less ​ $ 66,992 Over 3 months through 6 months ​ 74,893 Over 6 months through 12 months ​ 83,053 Over 12 months ​ 5,167 Total ​ $ 230,105 ​ BORROWING ACTIVITIES Borrowings may be utilized as an alternative source of funds which can be invested at a positive interest rate spread when additional capacity to fund loan demand is desired or when asset/liability management goals are met to diversify funding sources and enhance interest rate risk management. ​ Borrowings historically have included advances from the Federal Home Loan Bank of Boston ("FHLB"), securities sold under repurchase agreements, and a correspondent bank unsecured line of credit.
The weighted average loan-to-value for the top 10 loans within the office segment is 68.8%.
The weighted average loan-to-value for the top 10 loans within the office segment is 66.6%.
Our total commercial portfolio has a pass rating of 95%, included in the commercial portfolio are office loans of $247.8 million which have a pass rating of 85%. ​ Maturity and Sensitivity of the Loan Portfolio The following table shows contractual maturities of selected loan categories at December 31, 2024.
Our total commercial portfolio has a pass rating of 95%, included in the commercial portfolio are office loans of $250.3 million which have a pass rating of 86%. ​ 7 Table of Contents Maturity and Sensitivity of the Loan Portfolio The following table shows contractual maturities of selected loan categories at December 31, 2025.
Loan collections are managed by a combination of the related business units and the managed assets group. ​ ​ 8 Table of Contents The following table presents the problem assets for the years indicated: ​ ​ ​ ​ ​ ​ ​ ​ (in thousands, except ratios) 2024 2023 Non-accruing loans: ​ ​ ​ Commercial construction ​ $ — ​ $ — ​ Commercial real estate owner occupied ​ 736 ​ 103 ​ Commercial real estate non-owner occupied ​ 277 ​ 340 ​ Tax exempt and other ​ ​ — ​ ​ — ​ Commercial and industrial ​ 1,099 ​ 363 ​ Residential real estate ​ ​ 3,591 ​ ​ 3,908 ​ Home equity ​ ​ 1,267 ​ ​ 809 ​ Consumer other ​ 24 ​ 5 ​ Total loans ​ ​ 6,994 ​ ​ 5,528 ​ Non-Performing securities available for sale ​ ​ 5,760 ​ ​ — ​ Other real estate owned ​ — ​ — ​ Total non-performing assets ​ $ 12,754 ​ $ 5,528 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total non-performing loans/total loans ​ ​ 0.22 % 0.18 % Total non-performing assets/total assets ​ ​ 0.31 ​ 0.14 ​ ​ Allowance for Credit Losses Our loan portfolio is regularly reviewed by management to evaluate the adequacy of the allowance for credit losses (“ACL”).
Loan collections are managed by a combination of the related business units and the managed assets group. ​ ​ 8 Table of Contents The following table presents the problem assets for the years indicated: ​ ​ ​ ​ ​ ​ ​ ​ (in thousands, except ratios) ​ ​ ​ 2025 ​ ​ ​ 2024 Non-accruing loans: ​ ​ ​ ​ ​ Commercial construction ​ $ 31 ​ $ — ​ Commercial real estate owner occupied ​ 829 ​ 736 ​ Commercial real estate non-owner occupied ​ 184 ​ 277 ​ Municipal and other ​ ​ — ​ ​ — ​ Commercial and industrial ​ 1,371 ​ 1,099 ​ Residential real estate ​ ​ 7,912 ​ ​ 3,591 ​ Home equity ​ ​ 1,183 ​ ​ 1,267 ​ Consumer other ​ 76 ​ 24 ​ Total loans ​ ​ 11,586 ​ ​ 6,994 ​ Non-Performing securities available for sale ​ ​ 2,203 ​ ​ 5,760 ​ Other real estate owned ​ — ​ — ​ Total non-performing assets ​ $ 13,789 ​ $ 12,754 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total non-performing loans/total loans ​ ​ 0.32 % 0.22 % Total non-performing assets/total assets ​ ​ 0.29 ​ 0.31 ​ ​ Allowance for Credit Losses Our loan portfolio is regularly reviewed by management to evaluate the adequacy of the allowance for credit losses (“ACL”).
Regulation of the Bank As a Maine-chartered financial institution, the Bank is subject to supervision, regular examination, and regulation by the Maine Bureau of Financial Institutions (“BFI”) and the FDIC as its primary federal regulator and as its deposit insurer.
Regulation of the Bank As a Maine-chartered financial institution that is not a member of the Federal Reserve System, the Bank is subject to supervision, regular examination, and regulation by the BFI and the FDIC as its primary federal regulator and as its deposit insurer.
The Dodd-Frank Act prescribes certain standards that mortgage lenders must consider before making a residential mortgage loan, including verifying a borrower’s ability to repay such mortgage loan and allows borrowers to assert violations of certain provisions of the TILA as a defense to foreclosure proceedings.
The FDIC examines the Bank for compliance with consumer protection laws and enforces CFPB rules with respect to the Bank. ​ The Dodd-Frank Act prescribes certain standards that mortgage lenders must consider before making a residential mortgage loan, including verifying a borrower’s ability to repay such mortgage loan and allows borrowers to assert violations of certain provisions of the TILA as a defense to foreclosure proceedings.
Certain Transactions by Bank Holding Companies with their Affiliates There are various statutory restrictions on the extent to which bank holding companies and their non-bank subsidiaries may borrow, obtain credit from or otherwise engage in “covered transactions” with their insured depository institution subsidiaries.
Certain Transactions by Bank Holding Companies with their Affiliates There are various statutory restrictions on the extent to which insured depository institutions may lend to, provide credit to, or otherwise engage in “covered transactions” with their holding companies or other affiliates.
The ACL is discussed further in Note 1 – Summary of Significant Accounting Policies of the Consolidated Financial Statements. ​ ​ ​ 9 Table of Contents The following table presents an analysis of the ACL for the years indicated: ​ ​ ​ ​ ​ ​ ​ ​ (in thousands, except ratios) 2024 2023 Balance at beginning of year ​ $ 28,142 ​ $ 25,860 ​ Charged-off loans: ​ ​ ​ Commercial construction ​ — ​ — ​ Commercial real estate owner occupied ​ (3) ​ — ​ Commercial real estate non-owner occupied ​ — ​ — ​ Tax exempt and other ​ ​ — ​ ​ — ​ Commercial and industrial ​ ​ (187) ​ ​ (664) ​ Residential real estate ​ ​ — ​ ​ (8) ​ Home equity ​ ​ — ​ ​ (12) ​ Consumer other ​ (277) ​ (289) ​ Total charged-off loans ​ (467) ​ (973) ​ Recoveries on charged-off loans: ​ ​ ​ Commercial construction ​ — ​ — ​ Commercial real estate owner occupied ​ — ​ 142 ​ Commercial real estate non-owner occupied ​ — ​ — ​ Tax exempt and other ​ ​ — ​ ​ — ​ Commercial and industrial ​ ​ 29 ​ ​ 149 ​ Residential real estate ​ ​ 15 ​ ​ 31 ​ Home equity ​ ​ 11 ​ ​ 6 ​ Consumer other ​ 59 ​ 19 ​ Total recoveries on charged-off loans ​ 114 ​ 347 ​ Net (charge-offs) recoveries ​ (353) ​ (626) ​ Provision for credit losses ​ 955 ​ 2,908 ​ Balance at end of year ​ $ 28,744 ​ $ 28,142 ​ ​ ​ ​ ​ ​ ​ ​ ​ Ratios: ​ ​ ​ Net charge-offs (recoveries)/average loans ​ 0.01 % 0.02 % Recoveries/charged-off loans ​ 24 ​ 36 ​ Allowance for credit losses/total loans ​ 0.91 ​ 0.94 ​ Allowance for credit losses/non-accruing loans ​ 411 ​ 509 ​ ​ The following table presents year-end data for the approximate allocation of the ACL by loan categories at the dates indicated.
The ACL is discussed further in Note 1 – Summary of Significant Accounting Policies of the Consolidated Financial Statements. ​ ​ ​ 9 Table of Contents The following table presents an analysis of the ACL for the years indicated: ​ ​ ​ ​ ​ ​ ​ ​ (in thousands, except ratios) ​ ​ ​ 2025 ​ ​ ​ 2024 Balance at beginning of year ​ $ 28,744 ​ $ 28,142 ​ Charged-off loans: ​ ​ ​ ​ ​ Commercial construction ​ — ​ — ​ Commercial real estate owner occupied ​ — ​ (3) ​ Commercial real estate non-owner occupied ​ — ​ — ​ Municipal and other ​ ​ — ​ ​ — ​ Commercial and industrial ​ ​ (737) ​ ​ (187) ​ Residential real estate ​ ​ — ​ ​ — ​ Home equity ​ ​ — ​ ​ — ​ Consumer other ​ (284) ​ (277) ​ Total charged-off loans ​ (1,021) ​ (467) ​ Recoveries on charged-off loans: ​ ​ ​ ​ ​ Commercial construction ​ — ​ — ​ Commercial real estate owner occupied ​ — ​ — ​ Commercial real estate non-owner occupied ​ — ​ — ​ Municipal and other ​ ​ — ​ ​ — ​ Commercial and industrial ​ ​ 17 ​ ​ 29 ​ Residential real estate ​ ​ 36 ​ ​ 15 ​ Home equity ​ ​ 12 ​ ​ 11 ​ Consumer other ​ 6 ​ 59 ​ Total recoveries on charged-off loans ​ 71 ​ 114 ​ Net (charge-offs) recoveries ​ (950) ​ (353) ​ ACL established on PCD loans ​ ​ 1,622 ​ ​ — ​ Provision for credit losses ​ 4,636 ​ 955 ​ Balance at end of year ​ $ 34,052 ​ $ 28,744 ​ ​ ​ ​ ​ ​ ​ ​ ​ Ratios: ​ ​ ​ ​ ​ Net charge-offs (recoveries)/average loans ​ 0.03 % 0.01 % Recoveries/charged-off loans ​ 7 ​ 24 ​ Allowance for credit losses/total loans ​ 0.94 ​ 0.91 ​ Allowance for credit losses/non-accruing loans ​ 294 ​ 411 ​ ​ The following table presents year-end data for the approximate allocation of the ACL by loan categories at the dates indicated.
The allocation of the allowance to each category is not indicative of future losses and does not restrict the use of any of the allowance to absorb losses in any category. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ 2023 ​ ​ ​ ​ ​ % Allocated to ​ ​ ​ ​ % Allocated to (in thousands, except ratios) Amount Total Loans Amount Total Loans Commercial construction $ 2,096 0.07 % $ 4,261 0.14 % Commercial real estate owner occupied ​ 2,794 0.09 ​ 2,863 0.10 ​ Commercial real estate non-owner occupied ​ ​ 11,104 0.35 ​ 9,443 0.31 ​ Tax exempt and other ​ ​ 128 ​ 0.01 ​ ​ 119 ​ — ​ Commercial and industrial ​ ​ 5,064 ​ 0.16 ​ ​ 3,259 ​ 0.11 ​ Residential real estate ​ ​ 6,732 ​ 0.21 ​ ​ 7,352 ​ 0.25 ​ Home equity ​ ​ 741 ​ 0.02 ​ ​ 767 ​ 0.03 ​ Consumer other ​ ​ 85 ​ — ​ ​ 78 ​ — ​ Total ​ $ 28,744 ​ 0.91 % $ 28,142 ​ 0.94 % ​ 10 Table of Contents INVESTMENT SECURITIES ACTIVITIES The objective of the investment portfolio is to provide liquidity when loan demand is high, and to absorb excess funds when demand is low.
The allocation of the allowance to each category is not indicative of future losses and does not restrict the use of any of the allowance to absorb losses in any category. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ 2024 ​ ​ ​ ​ ​ % Allocated to ​ ​ ​ ​ % Allocated to (in thousands, except ratios) ​ ​ ​ Amount ​ ​ ​ Total Loans ​ ​ ​ Amount ​ ​ ​ Total Loans Commercial construction ​ ​ ​ $ 4,371 ​ ​ ​ 0.12 % $ 2,096 ​ ​ ​ 0.07 % Commercial real estate owner occupied ​ 4,045 0.11 ​ 2,794 0.09 ​ Commercial real estate non-owner occupied ​ ​ 12,837 0.36 ​ 11,104 0.35 ​ Municipal and other ​ ​ 119 ​ — ​ ​ 128 ​ 0.01 ​ Commercial and industrial ​ ​ 5,378 ​ 0.15 ​ ​ 5,064 ​ 0.16 ​ Residential real estate ​ ​ 6,350 ​ 0.18 ​ ​ 6,732 ​ 0.21 ​ Home equity ​ ​ 814 ​ 0.02 ​ ​ 741 ​ 0.02 ​ Consumer other ​ ​ 138 ​ — ​ ​ 85 ​ — ​ Total ​ $ 34,052 ​ 0.94 % $ 28,744 ​ 0.91 % ​ 10 Table of Contents INVESTMENT SECURITIES ACTIVITIES The objective of the investment portfolio is to provide liquidity when loan demand is high, and to absorb excess funds when demand is low.
Estimated uninsured time deposits were $85.3 million and $60.0 million as of December 31, 2024 and 2023, respectively.
Estimated uninsured time deposits were $112.4 million and $85.3 million as of December 31, 2025 and 2024, respectively.
A bank that is “critically undercapitalized” (i.e., has a ratio of tangible equity to total assets that is equal to or less than 2.0%) will be subject to further restrictions, and generally will be placed in conservatorship or receivership within 90 days. Current capital rules do not establish standards for determining whether a bank holding company is well capitalized.
A bank that is “critically undercapitalized” (i.e., has a ratio of tangible equity to total assets that is equal to or less than 2.0%) will be subject to further restrictions, and generally will be placed in conservatorship or receivership within 90 days. Safety and Soundness Standards.
The FDIC calculates deposit insurance assessment rates for established small banks, generally those banks with less than $10 billion of assets that have been insured for at least five years, using the CAMELS rating system and other factors.
The FDIC calculates deposit insurance assessment rates for established small banks, generally those banks with less than $10 billion of assets that have been insured for at least five years, using supervisory ratings, financial ratios, and other factors. For 2025, the FDIC insurance expense for the Bank was $1.9 million.
For this purpose, “covered transactions” are defined by statute to include: a loan or extension of credit to an affiliate, a purchase of or investment in securities issued by an affiliate, a purchase of assets from an affiliate unless exempted by the Federal Reserve, the acceptance of securities issued by an affiliate as collateral for a loan or extension of credit to any person or company, the issuance of a guarantee, acceptance or letter of credit on behalf of an affiliate, securities borrowing or lending transactions with an affiliate that creates a credit exposure to such affiliate, or a derivatives transaction with an affiliate that creates a credit exposure to such affiliate.
For this purpose, “covered transactions” are defined by statute to include, among other things: a loan or extension of credit to an affiliate, a purchase of or investment in securities issued by an affiliate, a purchase of assets from an affiliate, the acceptance of securities issued by an affiliate as collateral for a loan or extension of credit to any person or company, or the issuance of a guarantee, acceptance or letter of credit on behalf of an affiliate.
Other Regulations As a Maine corporation, the Company is subject to certain limitations and restrictions under applicable Maine corporate law. For example, state law restrictions in Maine include limitations and restrictions relating to indemnification of directors, distributions and dividends to shareholders, transactions involving directors, officers or interested shareholders, maintenance of books, records, and minutes, and observance of certain corporate formalities.
For example, state law restrictions in Maine include limitations and restrictions relating to indemnification of 15 Table of Contents directors, distributions and dividends to shareholders, transactions involving directors, officers or interested shareholders, maintenance of books, records, and minutes, and observance of certain corporate formalities.
Popular vacation destinations in this region include Woodstock, Brandon, and Ludlow. 5 Table of Contents SUBSIDIARY ACTIVITIES Bar Harbor Bankshares is a legal entity separate and distinct from its first-tier bank subsidiary, Bar Harbor Bank & Trust, and its second-tier subsidiaries, Bar Harbor Wealth Management (“BHWM”) and Cottage Street Corporation.
These markets are home to many attractions, including Killington Mountain and the city of Rutland. Popular vacation destinations in this region include Woodstock and Brandon. SUBSIDIARY ACTIVITIES Bar Harbor Bankshares is a legal entity separate and distinct from its first-tier bank subsidiary, Bar Harbor Bank & Trust, and its second-tier subsidiaries, Bar Harbor Wealth Management (“BHWM”) and Cottage Street Corporation.
The deposit obligations of the Bank are insured by the FDIC’s Deposit Insurance Fund up to $250,000 per depositor with respect to deposits held in the same right and capacity. Deposit insurance premiums are based on assets.
The deposit obligations of the Bank are insured by the FDIC’s Deposit Insurance Fund (“DIF”) up to $250,000 per depositor with respect to deposits held in the same right and capacity. The DIF is funded mainly through quarterly insurance assessments on insured banks based on their assessment base.
Under the FDIC’s prompt corrective action rules, an FDIC supervised institution is considered “well capitalized” if it (i) has a total capital to risk-weighted assets ratio of 10.0% or greater; (ii) a Tier 1 capital to risk-weighted assets ratio of 8.0% or greater; (iii) a common Tier 1 equity ratio of 6.5% or greater, (iv) a leverage capital ratio of 5.0% or greater; and (v) is not subject to any written agreement, order, capital directive, or prompt corrective action directive to meet and maintain a specific capital level for any capital measure.
Additionally, these rules require an institution to maintain a capital conservation buffer of common equity Tier 1 capital in an amount above the minimum risk-based capital requirements for “adequately capitalized” 17 Table of Contents institutions of more than 2.5% of total risk weighted assets, or face restrictions on the ability to pay dividends, pay discretionary bonuses, and to engage in share repurchases. ​ Under the FDIC’s prompt corrective action rules, an FDIC supervised institution is considered “well capitalized” if it (i) has a total capital to risk-weighted assets ratio of 10.0% or greater; (ii) a Tier 1 capital to risk-weighted assets ratio of 8.0% or greater; (iii) a common equity Tier 1 equity ratio of 6.5% or greater, (iv) a leverage capital ratio of 5.0% or greater; and (v) is not subject to any written agreement, order, capital directive, or prompt corrective action directive to meet and maintain a specific capital level for any capital measure.
Other Significant Banking Regulations Applicable to the Bank BHWM, a New Hampshire chartered non-depository trust company and an indirect subsidiary of the Bank, is subject to supervision, regular examination, and regulation by the New Hampshire Banking Department.
Other Significant Banking Regulations Applicable to the Bank BHWM, a New Hampshire chartered non-depository trust company and an indirect subsidiary of the Bank, is subject to supervision, regular examination, and regulation by the New Hampshire Banking Department. In accordance with New Hampshire law, BHWM’s Capital Plan requires minimum capital of $1.0 million to be invested in qualifying assets.
The following table presents the average balances and weighted average rates for deposits for the years indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ 2023 (in thousands, except ratios) Average Balance Percent of Total Weighted Average Rate Average Balance Percent of Total Weighted Average Rate ​ Non-interest bearing demand ​ $ 570,787 18 % — % $ 618,685 20 % — % Interest-bearing demand ​ 886,272 28 1.41 ​ 900,035 30 0.98 ​ Savings ​ 546,517 17 0.67 ​ 594,959 20 0.39 ​ Money market ​ 379,997 12 3.02 ​ 406,759 13 2.48 ​ Time deposits ​ 791,228 25 4.30 ​ 532,981 17 3.19 ​ Total ​ $ 3,174,801 100 % 1.94 % $ 3,053,419 100 % 1.25 % ​ 12 Table of Contents Estimated uninsured non-maturity deposits were $404.7 million as of December 31, 2024 and $525.3 million as of December 31, 2023.
The following table presents the average balances and weighted average rates for deposits for the years indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ 2024 (in thousands, except ratios) ​ ​ ​ Average Balance ​ ​ ​ Percent of Total ​ ​ ​ Weighted Average Rate ​ ​ ​ Average Balance ​ ​ ​ Percent of Total ​ ​ ​ Weighted Average Rate ​ Non-interest bearing demand ​ $ 614,447 17 % — % $ 570,787 18 % — % Interest-bearing demand ​ 1,003,074 28 1.41 ​ 886,272 28 1.41 ​ Savings ​ 588,052 17 0.64 ​ 546,517 17 0.67 ​ Money market ​ 425,177 12 2.62 ​ 379,997 12 3.02 ​ Time deposits ​ 909,629 26 3.79 ​ 791,228 25 4.30 ​ Total ​ $ 3,540,379 100 % 1.79 % $ 3,174,801 100 % 1.94 % ​ 12 Table of Contents Estimated uninsured non-maturity deposits were $424.6 million as of December 31, 2025 and $404.7 million as of December 31, 2024.
The guidelines prohibit excessive compensation as an unsafe and unsound practice and describe compensation as excessive when the amounts paid are unreasonable or disproportionate to the services performed by an executive officer, employee, director or principal shareholder.
Among other things, the guidelines prohibit excessive compensation as an unsafe and unsound practice and describe compensation as excessive when the amounts paid are unreasonable or disproportionate to the services performed by an executive officer, employee, director or principal shareholder. Dividend Restrictions The Company is a legal entity separate and distinct from the Bank and its other subsidiaries.
Revenues of the Company are derived primarily from dividends paid to it by the Bank.
Revenues and cash flows of the Company (on a non-consolidated basis) are derived primarily from dividends paid to it by the Bank.
As of December 31, 2024, BHWM had an appropriate liquidation reserve, minimum capital in excess of statutory requirements, and all funds were held in accordance with prudent investor standards of NH RSA 564-B:9-902 and as required by NH RSA 383-C:5-502. Employee Retirement Income Security Act of 1974.
As of December 31, 2025, BHWM had an appropriate liquidation reserve and minimum capital in excess of statutory requirements, and held all funds in accordance with prudent investor standards and other applicable laws. Employee Retirement Income Security Act of 1974 .
Further information about the composition of the loan portfolio is contained in Note 3 – Loans and Allowance for Credit Losses of the Consolidated Financial Statements. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ 2023 (in thousands, except ​ % of ​ ​ % of percentages) ​ Amount ​ Total ​ Amount ​ Total Commercial construction $ 131,617 ​ 4 % ​ $ 154,048 5 % Commercial real estate owner occupied ​ 302,074 ​ 10 ​ ​ 310,015 10 ​ Commercial real estate non-owner occupied ​ ​ 1,358,903 ​ 43 ​ ​ ​ 1,144,566 ​ 38 ​ Tax exempt and other ​ ​ 44,275 ​ 2 ​ ​ ​ 43,688 ​ 2 ​ Commercial and industrial ​ ​ 319,766 ​ 10 ​ ​ ​ 310,883 ​ 10 ​ Residential real estate ​ 888,251 ​ 28 ​ ​ 940,334 32 ​ Home equity ​ ​ 94,141 ​ 3 ​ ​ ​ 87,683 ​ 3 ​ Consumer other ​ 8,069 ​ — ​ ​ 7,832 — ​ Total loans ​ $ 3,147,096 100 % ​ $ 2,999,049 100 % ​ Commercial Loan Exposure and Industries All commercial loans are assigned Standard Industrial Classification codes, North American Industry Classification System codes, and state and county codes.
Further information about the composition of the loan portfolio is contained in Note 4 – Loans and Allowance for Credit Losses of the Consolidated Financial Statements. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ 2024 (in thousands, except ​ ​ ​ ​ ​ ​ ​ % of ​ ​ ​ ​ ​ % of percentages) ​ Amount ​ Total ​ Amount ​ Total Commercial construction ​ ​ ​ $ 213,779 ​ 6 % ​ $ 131,617 ​ 4 % Commercial real estate owner occupied ​ 385,843 ​ 11 ​ ​ 302,074 ​ 10 ​ Commercial real estate non-owner occupied ​ ​ 1,450,597 ​ 40 ​ ​ ​ 1,358,903 ​ 43 ​ Municipal and other ​ ​ 43,106 ​ 1 ​ ​ ​ 44,275 ​ 2 ​ Commercial and industrial ​ ​ 315,370 ​ 9 ​ ​ ​ 319,766 ​ 10 ​ Residential real estate ​ 1,068,413 ​ 30 ​ ​ 888,251 ​ 28 ​ Home equity ​ ​ 114,484 ​ 3 ​ ​ ​ 94,141 ​ 3 ​ Consumer other ​ 14,267 ​ — ​ ​ 8,069 ​ — ​ Total loans ​ $ 3,605,859 100 % ​ $ 3,147,096 100 % ​ ​ 6 Table of Contents Commercial Loan Exposure and Industries All commercial loans are assigned Standard Industrial Classification codes, North American Industry Classification System codes, and state and county codes.
These sanctions, which are administered by U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”), take many different forms.
The U.S. has imposed economic sanctions that affect transactions with designated foreign countries, nationals and others. These sanctions, which are administered by U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”), take many different forms.
Under the BHC Act, as amended by the Dodd-Frank Act, the Company is required to serve as a source of financial strength for the Bank. This support may be required at times when the Company may not have the resources to provide support to the Bank.
Source of Strength. Bank holding companies are required to serve as a source of financial strength for their subsidiary banks. Under this requirement, the Company is expected to commit resources to support the Bank, including at times when the Company may not have the resources to provide support to the Bank.
The FDIA and FDIC regulations generally limit the ability of an insured depository institution to accept, renew or roll over any brokered deposit unless the institution’s capital category is “well capitalized” or, with the FDIC’s approval, “adequately capitalized.” Certain depository institutions that have brokered deposits in excess of 10% of total assets may be subject to increased FDIC deposit insurance premium assessments.
The FDIA and FDIC regulations generally limit the ability of an insured depository institution to accept, renew or roll over any brokered deposit unless the institution’s capital category is “well capitalized” or, with the FDIC’s approval, “adequately capitalized.” Additionally, increased reliance on brokered deposits can increase an institution’s deposit insurance assessment. 16 Table of Contents Community Reinvestment Act.
The economies in these counties are based primarily on tourism, healthcare, fishing and lobstering, agriculture, state government, and small local businesses. They are also supported by a large contingent of retirees. New Hampshire We have 21 full-service branches in operation and five wealth management offices in New Hampshire located in the Lake Sunapee, Upper Valley, and Merrimack Valley regions.
The economies in these counties are based primarily on tourism, healthcare, fishing and lobstering, agriculture, state government, and small local businesses. They are also supported by a large contingent of retirees.
The Federal Reserve Board has the authority, among other things, to order bank holding companies to cease and desist from unsafe or unsound banking practices; to assess civil money penalties; and to order termination of non-banking activities or termination of ownership and control of a non-banking subsidiary by a bank holding company. Source of Strength.
Regulation of the Company As a bank holding company, the Company is subject to regulation, supervision and examination by the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”) under the Bank Holding Company Act of 1956, as amended (the “BHC Act”), and the Maine Bureau of Financial Institutions (the “BFI”). 14 Table of Contents The Federal Reserve Board has the authority, among other things, to order bank holding companies to cease and desist from unsafe or unsound banking practices; to assess civil money penalties; and to order termination of non-banking activities or termination of ownership and control of a non-banking subsidiary by a bank holding company.
The following table summarizes the major industries of the commercial loan portfolio as of December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ 2023 (in thousands, except percentages) Loans Total Exposure ​ % of Total Portfolio ​ Loans ​ Total Exposure ​ % of Total Commercial Portfolio Real Estate and Rental and Leasing ​ $ 1,109,613 ​ $ 1,286,712 ​ 51 % ​ $ 1,018,035 ​ $ 1,196,273 ​ 52 % Accommodation and Food Services ​ 415,321 ​ ​ 444,028 ​ 19 ​ ​ ​ 334,838 ​ ​ 347,588 ​ 17 ​ Health Care and Social Assistance ​ 96,767 ​ ​ 105,873 ​ 4 ​ ​ ​ 99,601 ​ ​ 109,771 ​ 5 ​ Retail Trade ​ 77,771 ​ ​ 95,424 ​ 4 ​ ​ ​ 78,036 ​ ​ 94,074 ​ 4 ​ Finance and Insurance ​ ​ 79,692 ​ ​ 117,718 ​ 4 ​ ​ ​ 59,753 ​ ​ 103,444 ​ 3 ​ Wholesale Trade ​ ​ 62,832 ​ ​ 112,913 ​ 3 ​ ​ ​ 63,088 ​ ​ 110,703 ​ 3 ​ Agriculture, Forestry, Fishing and Hunting ​ ​ 47,591 ​ ​ 58,335 ​ 2 ​ ​ ​ 55,214 ​ ​ 63,052 ​ 3 ​ Educational Services ​ ​ 47,635 ​ ​ 56,855 ​ 2 ​ ​ ​ 51,512 ​ ​ 63,731 ​ 3 ​ Public Administration ​ ​ 37,106 ​ ​ 38,191 ​ 2 ​ ​ ​ 35,995 ​ ​ 40,669 ​ — ​ Manufacturing ​ ​ 36,627 ​ ​ 56,644 ​ 2 ​ ​ ​ 44,277 ​ ​ 67,221 ​ 2 ​ Arts, Entertainment, and Recreation ​ ​ 29,794 ​ ​ 32,221 ​ 1 ​ ​ ​ 30,914 ​ ​ 33,441 ​ 2 ​ Construction ​ ​ 23,817 ​ ​ 67,060 ​ 1 ​ ​ ​ 23,086 ​ ​ 44,518 ​ 1 ​ Transportation and Warehousing ​ ​ 12,069 ​ ​ 14,411 ​ 1 ​ ​ ​ 14,424 ​ ​ 22,139 ​ — ​ All other ​ ​ 80,000 ​ ​ 115,435 ​ 4 ​ ​ ​ 51,566 ​ ​ 79,691 ​ 5 ​ Total commercial loans ​ $ 2,156,635 ​ $ 2,601,820 ​ 100 % ​ $ 1,963,200 ​ $ 2,376,315 ​ 100 % 7 Table of Contents Within our non-owner-occupied commercial real estate portfolio (considered “Commercial construction” and “Commercial Real Estate Non-Owner Occupied” above), the top 10 loans represent approximately 12.7% of total commercial real estate loans outstanding.
The following table summarizes the major industries of the commercial loan portfolio as of December 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ 2024 (in thousands, except percentages) ​ ​ ​ Loans ​ ​ ​ Total Exposure ​ % of Total Portfolio ​ Loans ​ ​ ​ Total Exposure ​ % of Total Portfolio Real Estate and Rental and Leasing ​ $ 1,205,510 ​ $ 1,375,241 ​ 50 % ​ $ 1,109,613 ​ $ 1,286,712 ​ 51 % Accommodation and Food Services ​ 520,229 ​ ​ 553,887 ​ 22 ​ ​ 415,321 ​ ​ 444,028 ​ 19 ​ Health Care and Social Assistance ​ 106,933 ​ ​ 115,639 ​ 4 ​ ​ 96,767 ​ ​ 105,873 ​ 4 ​ Retail Trade ​ 95,021 ​ ​ 112,872 ​ 4 ​ ​ 77,771 ​ ​ 95,424 ​ 4 ​ Wholesale Trade ​ ​ 66,283 ​ ​ 123,771 ​ 3 ​ ​ ​ 62,832 ​ ​ 112,913 ​ 3 ​ Agriculture, Forestry, Fishing and Hunting ​ ​ 54,366 ​ ​ 60,700 ​ 2 ​ ​ ​ 47,591 ​ ​ 58,335 ​ 2 ​ Finance and Insurance ​ ​ 53,524 ​ ​ 117,889 ​ 2 ​ ​ ​ 79,692 ​ ​ 117,718 ​ 4 ​ Construction ​ ​ 46,642 ​ ​ 80,033 ​ 2 ​ ​ ​ 23,817 ​ ​ 67,060 ​ 1 ​ Educational Services ​ ​ 44,024 ​ ​ 54,451 ​ 2 ​ ​ ​ 47,635 ​ ​ 56,855 ​ 2 ​ Public Administration ​ ​ 36,256 ​ ​ 42,973 ​ 2 ​ ​ ​ 37,106 ​ ​ 38,191 ​ 2 ​ Arts, Entertainment, and Recreation ​ ​ 31,930 ​ ​ 43,150 ​ 1 ​ ​ ​ 29,794 ​ ​ 32,221 ​ 1 ​ Manufacturing ​ ​ 27,284 ​ ​ 53,976 ​ 1 ​ ​ ​ 36,627 ​ ​ 56,644 ​ 2 ​ Transportation and Warehousing ​ ​ 13,104 ​ ​ 15,781 ​ 1 ​ ​ ​ 12,069 ​ ​ 14,411 ​ 1 ​ All other ​ ​ 107,589 ​ ​ 133,692 ​ 4 ​ ​ ​ 80,000 ​ ​ 115,435 ​ 4 ​ Total commercial loans ​ $ 2,408,695 ​ $ 2,884,055 ​ 100 % ​ $ 2,156,635 ​ $ 2,601,820 ​ 100 % ​ Within our non-owner-occupied commercial real estate portfolio (considered “Commercial construction” and “Commercial real estate non-owner occupied” above), the top 10 loans represent approximately 18.1% of total commercial real estate loans outstanding.
Additionally, the CFPB’s qualified mortgage rule, requires creditors, such as the Bank, to make a reasonable good faith determination of a consumer’s ability to repay any consumer credit transaction secured by a dwelling. The Economic Growth Act included provisions that ease certain requirements related to residential mortgage transactions for certain institutions with less than $10 billion in total consolidated assets.
Additionally, the CFPB’s qualified mortgage rule, requires creditors, such as the Bank, to make a reasonable good faith determination of a consumer’s ability to repay any consumer credit transaction secured by a dwelling.
Maine law also requires that any “person or company” obtain the approval of the Maine Superintendent of Financial Institutions before acquiring control of a Maine financial institution.
Additionally, an existing bank holding company must obtain prior approval of the Federal Reserve Board to acquire 5% or more of a class of voting securities of a bank or bank holding company. Maine law also requires that any “person or company” obtain the approval of the Maine Superintendent of Financial Institutions before acquiring control of a Maine financial institution.
With its border to Massachusetts, it also enjoys a vibrant high-tech industry and a robust retail industry due in part to New Hampshire’s absence of a sales tax. The Upper Valley region of New Hampshire includes the towns of Lebanon and Hanover, which are home to Dartmouth-Hitchcock Medical Center and Dartmouth College, respectively.
Nashua, New Hampshire is a regional commercial, entertainment, and dining destination. With its border to Massachusetts, it also enjoys a vibrant high-tech industry and a robust retail industry due in part to New Hampshire’s absence of a sales tax.
The following table presents the amortized cost and fair value of securities available for sale for the years indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ 2023 ​ ​ Amortized ​ ​ ​ ​ Amortized ​ ​ ​ (in thousands) Cost Fair Value Cost Fair Value Debt Securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Obligations of US Government-sponsored enterprises ​ $ 1,344 ​ $ 1,318 ​ $ 2,021 ​ $ 1,992 Mortgage-backed securities and collateralized mortgage obligations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ US Government-sponsored enterprises ​ ​ 208,818 ​ ​ 177,316 ​ ​ 223,602 ​ ​ 193,282 US Government agency ​ 115,177 ​ 103,916 ​ 85,005 ​ 74,213 Private label ​ 40,633 ​ 39,564 ​ 60,888 ​ 59,051 Obligations of states and political subdivisions thereof ​ 116,421 ​ 105,452 ​ 119,857 ​ 110,168 Corporate bonds ​ 100,923 ​ 93,452 ​ 105,552 ​ 95,868 Total ​ $ 583,316 ​ $ 521,018 ​ $ 596,925 ​ $ 534,574 ​ The following table presents the amortized cost and weighted average yields of securities available for sale at by maturity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ Within ​ Over 1 Year ​ Over 5 Years ​ Over ​ ​ ​ (in thousands, except ratios) 1 Year to 5 Years ​ to 10 years ​ 10 Years ​ Total Debt Securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Obligations of US Government-sponsored enterprises ​ $ — ​ $ 330 ​ $ 305 ​ $ 709 ​ $ 1,344 ​ Mortgage-backed securities and collateralized mortgage obligations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ US Government-sponsored enterprises ​ ​ 787 ​ ​ 2,657 ​ ​ 16,361 ​ ​ 189,013 ​ ​ 208,818 ​ US Government agency ​ ​ 8 ​ ​ 157 ​ ​ 3,466 ​ ​ 111,546 ​ ​ 115,177 ​ Private label ​ — 4,000 ​ ​ 26,074 ​ ​ 10,559 ​ ​ 40,633 ​ Obligations of states and political subdivisions thereof ​ — 600 ​ ​ 2,768 ​ ​ 113,053 ​ ​ 116,421 ​ Corporate bonds ​ 3,000 51,469 ​ ​ 41,454 ​ ​ 5,000 ​ ​ 100,923 ​ Total ​ $ 3,795 ​ $ 59,213 ​ $ 90,428 ​ $ 429,880 ​ $ 583,316 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average Yield ​ ​ 7.42 % ​ 5.68 % ​ 5.27 % ​ 2.56 % ​ 3.33 % ​ 11 Table of Contents DERIVATIVE FINANCIAL INSTRUMENTS Interest swap derivatives are utilized to minimize fluctuations in earnings and cash flows caused by interest rate volatility either in the form of interest rate swaps on wholesale funding and variable rate loans designated as cash flow hedges or partial interest rate hedges on securities accounted for as fair value hedges.
The following table presents the amortized cost and fair value of available-for-sale debt securities for the years indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ 2024 ​ ​ Amortized ​ ​ ​ ​ Amortized ​ ​ ​ (in thousands) ​ ​ ​ Cost ​ ​ ​ Fair Value ​ ​ ​ Cost ​ ​ ​ Fair Value Debt Securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Obligations of US Government-sponsored enterprises ​ $ 1,113 ​ $ 1,102 ​ $ 1,344 ​ $ 1,318 Mortgage-backed securities and collateralized mortgage obligations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ US Government-sponsored enterprises ​ ​ 268,976 ​ ​ 249,542 ​ ​ 208,818 ​ ​ 177,316 US Government agency ​ 163,369 ​ 153,900 ​ 115,177 ​ 103,916 Private label ​ 11,793 ​ 10,999 ​ 40,633 ​ 39,564 Obligations of states and political subdivisions thereof ​ 120,447 ​ 104,539 ​ 116,421 ​ 105,452 Corporate bonds ​ 79,255 ​ 77,342 ​ 100,923 ​ 93,452 Total ​ $ 644,953 ​ $ 597,424 ​ $ 583,316 ​ $ 521,018 ​ The following table presents the amortized cost and weighted average yields of available-for-sale debt securities by maturity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ Within ​ Over 1 Year ​ Over 5 Years ​ Over ​ ​ ​ (in thousands, except ratios) ​ ​ ​ 1 Year ​ ​ ​ to 5 Years ​ to 10 years ​ 10 Years ​ Total Debt Securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Obligations of US Government-sponsored enterprises ​ $ 9 ​ $ 161 ​ $ 255 ​ $ 688 ​ $ 1,113 ​ Mortgage-backed securities and collateralized mortgage obligations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ US Government-sponsored enterprises ​ ​ 1 ​ ​ 2,643 ​ ​ 15,627 ​ ​ 250,705 ​ ​ 268,976 ​ US Government agency ​ ​ — ​ ​ 80 ​ ​ 3,248 ​ ​ 160,041 ​ ​ 163,369 ​ Private label ​ — 2,000 ​ ​ 1,074 ​ ​ 8,719 ​ ​ 11,793 ​ Obligations of states and political subdivisions thereof ​ — 420 ​ ​ 7,434 ​ ​ 112,593 ​ ​ 120,447 ​ Corporate bonds ​ 14,736 35,019 ​ ​ 29,500 ​ ​ — ​ ​ 79,255 ​ Total ​ $ 14,746 ​ $ 40,323 ​ $ 57,138 ​ $ 532,746 ​ $ 644,953 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average Yield ​ ​ 5.70 % ​ 5.80 % ​ 4.36 % ​ 3.07 % ​ 3.44 % ​ 11 Table of Contents DERIVATIVE FINANCIAL INSTRUMENTS Interest swap derivatives are utilized to minimize fluctuations in earnings and cash flows caused by interest rate volatility either in the form of interest rate swaps on wholesale funding and variable rate loans designated as cash flow hedges or partial interest rate hedges on securities accounted for as fair value hedges.
There are several distinct markets within each of these regions. The towns or cities of Nashua, Manchester, and Concord are considered part of the Merrimack Valley. Nashua, New Hampshire is a regional commercial, entertainment, and dining destination.
New Hampshire We have 30 full-service branches in operation and five wealth management offices in New Hampshire located in the Lake Sunapee, Upper Valley, Northern New Hampshire, and Merrimack Valley regions. There are several distinct markets within each of these regions. The towns or cities of Nashua, Manchester, and Concord are considered part of the Merrimack Valley.
As a result, if the proposed rule is adopted, the acquisition of control of a bank holding company for an insured state nonmember bank would require prior notice to both the FDIC and the Federal Reserve Board. 15 Table of Contents In addition, the BHC Act prohibits any company from acquiring control of a bank or bank holding company without first having obtained the approval of the Federal Reserve Board.
In addition, the BHC Act prohibits any company from acquiring control of a bank or bank holding company without first having obtained the approval of the Federal Reserve Board.
The Company’s currently outstanding trust preferred securities were grandfathered under this rule. Under the capital rules, risk-based capital ratios are calculated by dividing common equity Tier 1 capital, Tier 1 capital and total capital, respectively, by risk-weighted assets. Assets and off-balance sheet credit equivalents are assigned one of several categories of risk weights based primarily on relative risk.
Newly-issued trust preferred securities generally are not counted as Tier 1 capital, but the Company’s currently outstanding trust preferred securities were grandfathered and continue to count toward its Tier 1 capital. Under the capital rules, risk-based capital ratios are calculated by dividing common equity Tier 1 capital, Tier 1 capital and total capital, respectively, by risk-weighted assets.
Privacy and Customer Information Security. The GLBA requires financial institutions to implement policies and procedures regarding the disclosure of nonpublic personal information about consumers to nonaffiliated third parties.
The Economic Growth, Regulatory Relief, and Consumer Protection Act included provisions that ease certain requirements related to residential mortgage transactions for certain institutions with less than $10 billion in total consolidated assets. Privacy and Customer Information Security. The GLBA requires financial institutions to implement policies and procedures regarding the disclosure of nonpublic personal information about consumers to nonaffiliated third parties.
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These markets are home to many attractions, including Killington Mountain and the city of Rutland.
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The Upper Valley region of New Hampshire includes the towns of Lebanon and Hanover, which are home to Dartmouth-Hitchcock Medical Center and Dartmouth College, respectively. Northern New Hampshire includes the communities of Woodsville, Plymouth, and Littleton, with Littleton serving as the region’s primary economic hub. The regional economy is largely driven by tourism and agriculture.
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The contractual maturities do not reflect premiums, discounts, deferred costs, or prepayments. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Within ​ 1 to 5 ​ 5 to 15 ​ After ​ ​ ​ ​ ​ ​ (in thousands, except percentages) ​ ​ 1 year Years Years ​ 15 Years Total ​ % of Total Contractual Maturity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial construction $ 24,794 ​ $ 62,021 ​ ​ 40,307 ​ ​ 4,495 ​ $ 131,617 ​ 4 % Commercial real estate owner occupied ​ 14,956 ​ 95,317 ​ ​ 176,464 ​ ​ 15,337 ​ 302,074 ​ 10 ​ Commercial real estate non-owner occupied ​ ​ 105,868 ​ 678,114 ​ ​ 564,631 ​ ​ 10,290 ​ 1,358,903 ​ 43 ​ Tax exempt and other ​ ​ 27,276 ​ 2,282 ​ ​ 14,716 ​ ​ 1 ​ 44,275 ​ 2 ​ Commercial and industrial ​ ​ 43,043 ​ ​ 118,343 ​ ​ 123,573 ​ ​ 34,807 ​ ​ 319,766 ​ 10 ​ Residential real estate ​ ​ 2,210 ​ ​ 37,579 ​ ​ 135,969 ​ ​ 712,493 ​ ​ 888,251 ​ 28 ​ Home equity ​ ​ 2,427 ​ ​ 3,057 ​ ​ 12,902 ​ ​ 75,755 ​ ​ 94,141 ​ 3 ​ Consumer other ​ ​ 2,827 ​ ​ 4,810 ​ ​ 290 ​ ​ 142 ​ ​ 8,069 ​ — ​ Total loans ​ $ 223,401 ​ $ 1,001,523 ​ $ 1,068,852 ​ $ 853,320 ​ $ 3,147,096 ​ 100 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Repricing Date ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fixed-rate ​ ​ 107,184 ​ ​ 424,840 ​ ​ 507,205 ​ ​ 582,517 ​ ​ 1,621,746 ​ 52 ​ Floating or adjustable rate ​ ​ 116,217 ​ ​ 576,683 ​ ​ 561,647 ​ ​ 270,803 ​ ​ 1,525,350 ​ 48 ​ Total loans ​ $ 223,401 ​ $ 1,001,523 ​ $ 1,068,852 ​ $ 853,320 ​ $ 3,147,096 ​ 100 % ​ Problem Assets There is a preference to work with borrowers to resolve problems rather than proceeding to foreclosure.
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The contractual maturities do not reflect premiums, discounts, deferred costs, or prepayments. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Within ​ 1 to 5 ​ 5 to 15 ​ After ​ ​ ​ ​ ​ ​ (in thousands, except percentages) ​ ​ 1 year ​ ​ ​ Years ​ ​ ​ Years ​ 15 Years ​ ​ ​ Total ​ % of Total Contractual Maturity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial construction ​ ​ ​ $ 227 ​ $ 161,198 ​ ​ 38,839 ​ ​ 13,515 ​ $ 213,779 ​ 6 % Commercial real estate owner occupied ​ 13,064 ​ 123,861 ​ ​ 217,711 ​ ​ 31,207 ​ 385,843 ​ 11 ​ Commercial real estate non-owner occupied ​ ​ 172,828 ​ 662,133 ​ ​ 568,252 ​ ​ 47,384 ​ 1,450,597 ​ 40 ​ Municipal and other ​ ​ 5,923 ​ 13,604 ​ ​ 12,695 ​ ​ 10,884 ​ 43,106 ​ 1 ​ Commercial and industrial ​ ​ 44,288 ​ ​ 110,507 ​ ​ 125,088 ​ ​ 35,487 ​ ​ 315,370 ​ 9 ​ Residential real estate ​ ​ 2,705 ​ ​ 40,027 ​ ​ 152,821 ​ ​ 872,860 ​ ​ 1,068,413 ​ 30 ​ Home equity ​ ​ 1,028 ​ ​ 2,993 ​ ​ 15,123 ​ ​ 95,340 ​ ​ 114,484 ​ 3 ​ Consumer other ​ ​ 3,465 ​ ​ 8,740 ​ ​ 1,936 ​ ​ 126 ​ ​ 14,267 ​ — ​ Total loans ​ $ 243,528 ​ $ 1,123,063 ​ $ 1,132,465 ​ $ 1,106,803 ​ $ 3,605,859 ​ 100 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Repricing Date ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fixed-rate ​ ​ 72,862 ​ ​ 415,136 ​ ​ 477,560 ​ ​ 755,656 ​ ​ 1,721,214 ​ 48 ​ Floating or adjustable rate ​ ​ 170,666 ​ ​ 707,927 ​ ​ 654,905 ​ ​ 351,147 ​ ​ 1,884,645 ​ 52 ​ Total loans ​ $ 243,528 ​ $ 1,123,063 ​ $ 1,132,465 ​ $ 1,106,803 ​ $ 3,605,859 ​ 100 % ​ Problem Assets There is a preference to work with borrowers to resolve problems rather than proceeding to foreclosure.
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ESPP provides a benefit to our colleagues while also encouraging them to think and make decisions like shareholders. ​ Providing work-life balance choices results in our colleagues’ making more meaningful contributions in the workplace. We have a generous paid time off program as well as paid volunteer time to support this.
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ESPP provides a benefit to our colleagues while also encouraging them to think and make decisions like shareholders. ​ REGULATION AND SUPERVISION The following discussion addresses elements of the regulatory framework applicable to the Company.
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In addition, we offer Flexible Work Arrangements, which offers options such as fully remote, partially remote, condensed workweeks, and flexible hours. The flexibility of these various arrangements allows colleagues to manage their work-life needs while continuing to deliver stellar results in the workplace. ​ Embracing unique perspectives and supporting inclusivity are at the core of who we are.
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Other Regulations As a Maine corporation, the Company is subject to certain limitations and restrictions under applicable Maine corporate law.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn a future assessment, we could conclude that all or a portion of our goodwill is impaired, which would result in a non-cash charge to earnings. Revenues from our wealth management business are significant to earnings. Generating returns that satisfy customers in a variety of asset classes is important to maintaining existing business and attracting new business.
Biggest changeDuring 2025, our annual qualitative assessment indicated that it was more likely than not that the fair value of the reporting unit exceeded its carrying value, resulting in no impairment. In a future assessment, we could conclude that all or a portion of our goodwill is impaired, which would result in a non-cash charge to earnings.
Some of the factors that could negatively affect our share price or result in fluctuations in the price or trading volume of our common stock include: • quarterly variations in our operating results or the quality of our assets; • operating results that vary from the expectations of management, securities analysts and investors; • changes in expectations as to our future financial performance; • announcements of innovations, new products, strategic developments, significant contracts, acquisitions and other material events by us or our competitors; • the operating and securities price performance of other companies that investors believe are comparable to us; 33 Table of Contents • our past and future dividend practices; • future sales of our equity or equity-related securities; and • changes in global financial markets and global economies and general market conditions, such as interest rates, stock, commodity or real estate valuations or volatility.
Some of the factors that could negatively affect our share price or result in fluctuations in the price or trading volume of our common stock include: • quarterly variations in our operating results or the quality of our assets; • operating results that vary from the expectations of management, securities analysts and investors; • changes in expectations as to our future financial performance; • announcements of innovations, new products, strategic developments, significant contracts, acquisitions and other material events by us or our competitors; • the operating and securities price performance of other companies that investors believe are comparable to us; • our past and future dividend practices; • future sales of our equity or equity-related securities; and • changes in global financial markets and global economies and general market conditions, such as interest rates, stock, commodity or real estate valuations or volatility.
The financial services industry undergoes rapid technological changes with frequent introductions of new technology-driven products and services, including developments in artificial intelligence. In addition to serving clients better, the effective use of technology increases efficiency and enables financial institutions to reduce costs.
The financial services industry undergoes rapid technological changes with frequent introductions of new technology-driven products and services, including developments in artificial intelligence and machine learning. In addition to serving clients better, the effective use of technology increases efficiency and enables financial institutions to reduce costs.
A decline in our stock price or occurrence of a triggering event following any of its quarterly earnings releases and prior to the filing of the periodic report for that period could, under certain circumstances, require performance of a goodwill impairment test and result in an impairment charge being recorded for that period which was not reflected in such earnings release.
A decline in our stock price or occurrence of a triggering event following any of its quarterly 23 Table of Contents earnings releases and prior to the filing of the periodic report for that period could, under certain circumstances, require performance of a goodwill impairment test and result in an impairment charge being recorded for that period which was not reflected in such earnings release.
Private parties may also have the ability to challenge an institution’s performance under fair lending laws in private class action litigation. Such actions could have a material adverse effect on our business, financial condition and results of operations. 31 Table of Contents We may become subject to enforcement actions even though noncompliance was inadvertent or unintentional.
Private parties may also have the ability to challenge an institution’s performance under fair lending laws in private class action litigation. Such actions could have a material adverse effect on our business, financial condition and results of operations. We may become subject to enforcement actions even though noncompliance was inadvertent or unintentional.
We may also be 26 Table of Contents subject to disruptions of our operating systems arising from events that are wholly or partially beyond our control (e.g., computer viruses or electrical or telecommunications outages, natural disaster, pandemics, or other damage to property or physical assets), which may give rise to disruption of service to customers and to financial loss or liability.
We may also be subject to disruptions of our operating systems arising from events that are wholly or partially beyond our control (e.g., computer viruses or electrical or telecommunications outages, natural disaster, pandemics, or other damage to property or physical assets), which may give rise to disruption of service to customers and to financial loss or liability.
If customers prepay the principal amount of their loans, and we are unable to lend those funds to other borrowers or invest the funds at the same or higher interest rates, interest income will be 24 Table of Contents reduced. A significant reduction in interest income could have a negative impact on results of operations and financial condition.
If customers prepay the principal amount of their loans, and we are unable to lend those funds to other borrowers or invest the funds at the same or higher interest rates, interest income will be reduced. A significant reduction in interest income could have a negative impact on results of operations and financial condition.
In addition there may be risks that exist, or that develop in the future, that we have not appropriately anticipated, identified or mitigated, which could lead to unexpected losses and our results of operations or financial condition could be materially adversely affected. 28 Table of Contents Our internal controls, procedures and policies may fail or be circumvented.
In addition there may be risks that exist, or that develop in the future, that we have not appropriately anticipated, identified or mitigated, which could lead to unexpected losses and our results of operations or financial condition could be materially adversely affected. Our internal controls, procedures and policies may fail or be circumvented.
These alternative means of funding may result in an increase to the overall cost of funds and may not be available under stressed conditions, which would cause us to liquidate a portion of our liquid asset portfolio to meet any funding needs. Our access to funds from subsidiaries may be restricted.
These alternative 22 Table of Contents means of funding may result in an increase to the overall cost of funds and may not be available under stressed conditions, which would cause us to liquidate a portion of our liquid asset portfolio to meet any funding needs. Our access to funds from subsidiaries may be restricted.
As our loan portfolio contains a significant number of large commercial loans, the deterioration of one or a few of these loans could cause a significant increase in non-performing loans, provision for loan losses, and/or an increase in loan charge-offs, all of which could adversely affect our financial condition and results of operations.
As our loan portfolio contains a significant number of large commercial loans, the deterioration of one or a few of these loans could cause a significant increase in 24 Table of Contents non-performing loans, provision for loan losses, and/or an increase in loan charge-offs, all of which could adversely affect our financial condition and results of operations.
If such events were to occur again in the future and result in the receivership of financial institutions, there is no guarantee that the systemic risk exception would be invoked to allow the FDIC to complete its resolution of such financial institutions in a manner that fully protects depositors or counterparties.
If such events were to occur again in the future and result in the receivership of financial institutions, there is no guarantee that the systemic risk exception would be invoked to allow the FDIC to complete its resolution of such financial institutions in a manner that fully protects 28 Table of Contents depositors or counterparties.
We are further exposed to the risk that our external vendors may be unable to fulfill their contractual obligations (or will be subject to the same risk of fraud or operational errors by their respective employees) and to the risk that our vendors’ business continuity and data security systems prove to be inadequate.
We are further exposed to the risk that our external vendors may be unable to fulfill their contractual obligations (or will be subject to the same risk of fraud or operational errors by their respective employees) and to the risk that our vendors’ business continuity 25 Table of Contents and data security systems prove to be inadequate.
In response to recent increased congressional and regulatory scrutiny, and in anticipation of enhanced supervision and enforcement of overdraft protection practices in the future, certain banking organizations have begun to modify their overdraft protection programs, including by discontinuing the imposition of overdraft transaction fees.
In response to recent increased congressional and regulatory scrutiny, and in anticipation of enhanced supervision and enforcement of overdraft protection practices in the future, certain banking organizations have begun to modify their overdraft protection programs, including by discontinuing the imposition of 32 Table of Contents overdraft transaction fees.
The CRA, the Equal Credit Opportunity Act, the Fair Housing Act, and other fair lending laws and regulations impose community investment and nondiscriminatory lending requirements on financial institutions. The CFPB, the Department of Justice and other federal agencies are responsible for enforcing these laws and regulations.
The CRA, the Equal Credit Opportunity Act, the Fair Housing Act, and other fair lending laws and regulations impose community investment and nondiscriminatory lending requirements on financial institutions. The CFPB, the Department 31 Table of Contents of Justice and other federal agencies are responsible for enforcing these laws and regulations.
See Item 1. “Business—Regulation and Supervision—Capital Adequacy and Prompt Corrective Action” for additional information on capital requirements applicable to us and the Bank. The Company’s earnings may not grow if we are unable to successfully attract core deposits and lending opportunities and execute opportunities to generate fee-based income.
See Item 1. “Business—Regulation and Supervision—Capital Adequacy and Prompt Corrective Action” for additional information on capital requirements applicable to us and the Bank. 21 Table of Contents The Company’s earnings may not grow if we are unable to successfully attract core deposits and lending opportunities and execute opportunities to generate fee-based income.
Market volatility that 25 Table of Contents results in clients liquidating investments, as well as lower asset values, can reduce the level of AUM and decrease our wealth management revenues, which could materially adversely affect our results of operations.
Market volatility that results in clients liquidating investments, as well as lower asset values, can reduce the level of AUM and decrease our wealth management revenues, which could materially adversely affect our results of operations.
Success may also depend on acceptance of the Bank by customers in these new markets and, in the case of expansion through acquisitions, these factors include the long-term recruitment and 30 Table of Contents retention of key personnel and acquired customer relationships.
Success may also depend on acceptance of the Bank by customers in these new markets and, in the case of expansion through acquisitions, these factors include the long-term recruitment and retention of key personnel and acquired customer relationships.
In addition, the trading volume in our common stock may fluctuate and cause significant price variations to occur. We cannot assure you that the market price of our common stock will not fluctuate or decline significantly in the future.
In addition, the trading volume in our common stock may fluctuate and cause significant price variations to occur. We cannot assure you that the market price of our common stock will not 33 Table of Contents fluctuate or decline significantly in the future.
Future pandemics, severe weather, natural disasters, acts of war or terrorism, and other external events could significantly impact our business and the business of our customers. Future pandemics, severe weather, natural disasters, acts of war or terrorism, and other adverse external events could have a significant impact on our ability to conduct business.
Future pandemics, severe weather, natural disasters, acts of war or terrorism, and other adverse external events could have a significant impact on our ability to conduct business.
High concentrations of commercial loans may increase exposure to credit loss upon borrower default. As of December 31, 2024, approximately 67% of our loan portfolio consisted of commercial real estate, commercial and industrial and construction loans.
High concentrations of commercial loans may increase exposure to credit loss upon borrower default. As of December 31, 2025, approximately 66% of our loan portfolio consisted of commercial real estate, commercial and industrial and construction loans.
To the extent that our customers’ systems are not secure or are otherwise compromised, our network could be vulnerable to unauthorized access, malicious software, phishing schemes and other security breaches.
To the extent that our customers’ systems are not secure or are otherwise compromised, our network 26 Table of Contents could be vulnerable to unauthorized access, malicious software, phishing schemes and other security breaches.
Our earnings are significantly affected by the monetary and fiscal policies of governmental authorities, including the Federal Reserve Board. Among the instruments of monetary policy used by the Federal Reserve Board to implement these objectives are open-market operations in U.S.
Monetary policy and economic environment could impact our financial performance. Our earnings are significantly affected by the monetary and fiscal policies of governmental authorities, including the Federal Reserve Board. Among the instruments of monetary policy used by the Federal Reserve Board to implement these objectives are open-market operations in U.S.
Because we primarily serve individuals and businesses located in Northern New England, any negative impact resulting from reputational harm, including any impact on our ability to attract and retain customers and employees, likely would be greater than if our business were more geographically diverse. Disruptions to our information systems and security breaches may adversely affect our business and reputation.
Because we primarily serve individuals and businesses located in Northern New England, any negative impact resulting from reputational harm, including any impact on our ability to attract and retain customers and employees, likely would be greater than if our business were more geographically diverse.
Administration; supply chain disruptions; consumer spending; employment levels; labor shortages; challenging labor market conditions; wage stagnation; federal government shutdowns; energy prices; home prices; commercial property values; bankruptcies and a default by a significant market participant or class of counterparties; natural disasters; climate change; epidemics; pandemics; terrorist attacks; acts of war; or a combination of these or other factors. 29 Table of Contents Monetary policy and economic environment could impact our financial performance.
Administration; supply chain disruptions; consumer spending; employment levels; labor shortages; challenging labor market conditions; wage stagnation; federal government shutdowns; energy prices; home prices; commercial property values; bankruptcies and a default by a significant market participant or class of counterparties; natural disasters; climate change; epidemics; pandemics; terrorist attacks; acts of war; or a combination of these or other factors.
The performance of our investment securities portfolio is subject to fluctuation due to changes in interest rates and market conditions, including credit deterioration of the issuers of individual securities. Changes in interest rates can negatively affect the performance of most of our investment securities.
The performance of our investment securities portfolio is subject to fluctuation due to changes in interest rates and market conditions, including credit deterioration of the issuers of individual securities. Changes in interest rates can negatively affect the performance of most of our investment securities. Interest rate volatility can reduce unrealized gains or increase unrealized losses in our portfolio.
These competitive pressures, as well as any adoption by the Bank’s regulators of new rules or supervisory guidance or more aggressive examination and enforcement policies in respect of banks' overdraft protection practices, could cause it to modify programs and practices in ways that may have a negative impact on revenue and our earnings. 32 Table of Contents General Risk Factors Changes in accounting policies or in accounting standards could materially affect our results of operations, and financial condition.
These competitive pressures, as well as any adoption by the Bank’s regulators of new rules or supervisory guidance or more aggressive examination and enforcement policies in respect of banks' overdraft protection practices, could cause it to modify programs and practices in ways that may have a negative impact on revenue and our earnings.
We may experience operational challenges as we implement these new technology enhancements or products, which could impair our ability to realize the anticipated benefits from such new technology or require us to incur significant costs to remedy any such challenges in a timely manner. Many of our larger competitors have substantially greater resources to invest in technological improvements.
We may experience operational challenges as we implement these new technology enhancements or products, which could impair our ability 27 Table of Contents to realize the anticipated benefits from such new technology or require us to incur significant costs to remedy any such challenges in a timely manner.
We regularly review and update our internal controls, disclosure controls and procedures, and corporate governance policies and procedures. Any system of controls, however well designed and operated, is based in part on certain assumptions and can provide only reasonable, not absolute, assurances that the objectives of the controls are met.
Any system of controls, however well designed and operated, is based in part on certain assumptions and can provide only reasonable, not absolute, assurances that the objectives of the controls are met.
Due to the complexity and interconnectedness of information technology systems, the process of enhancing our systems can itself create a risk of systems disruptions and security issues. 27 Table of Contents While to date we believe that we have not experienced a significant compromise, significant data loss or material financial losses related to cybersecurity attacks, our systems and those of our customers and third-party service providers, are under constant threat and may experience a significant event in the future.
While to date we believe that we have not experienced a significant compromise, significant data loss or material financial losses related to cybersecurity attacks, our systems and those of our customers and third-party service providers, are under constant threat and may experience a significant event in the future.
In this case, our operating margins and profitability would be adversely affected. 23 Table of Contents Additionally, any deterioration in the FHLB’s performance or financial condition may affect our ability to access funding and/or require us to deem the required investment in FHLB stock to be impaired.
Additionally, any deterioration in the FHLB’s performance or financial condition may affect our ability to access funding and/or require us to deem the required investment in FHLB stock to be impaired.
In addition, if we need to rely heavily on more expensive funding sources to support future growth, revenues may not increase proportionately to cover costs.
In addition, if we need to rely heavily on more expensive funding sources to support future growth, revenues may not increase proportionately to cover costs. In this case, our operating margins and profitability would be adversely affected.
It is not possible to predict the nature of future changes in monetary and fiscal policies, or the effect which they may have on our business and earnings. Increased market volatility and adverse changes in financial or capital market conditions may increase our market risk.
It is not possible to predict the nature of future changes in monetary and fiscal policies, or the effect which they may have on our business and earnings. Inflation can have an adverse impact on our business and on our customers.
Administering or managing assets in accordance with the terms of governing documents and applicable laws is also important to client satisfaction. Failure in either of the foregoing areas can expose us to liability, and result in a decrease in revenues and earnings. Our wealth management business may be negatively affected by changes in economic and market conditions.
Failure in either of the foregoing areas can expose us to liability, and result in a decrease in revenues and earnings. Our wealth management business may be negatively affected by changes in economic and market conditions.
Profitability depends on whether the marginal revenue generated in the new markets will offset the increased expenses of operating a larger entity, with more staff, more locations, and more product offerings. Failure to achieve any of these success factors may have a negative impact on our financial condition and results of operations.
Profitability depends on whether the marginal revenue generated in the new markets will offset the increased expenses of operating a larger entity, with more staff, more locations, and more product offerings.
If any of the events described in the risk factors should actually occur, our financial condition and results of operations could be materially and adversely affected.
If any of the events described in the risk factors should actually occur, our financial condition and results of operations could be materially and adversely affected. If this were to happen, the value of our securities could decline significantly, and you could lose all or part of your investment.
Net interest income is the difference between interest income earned on interest-bearing assets such as loans and securities and interest expense paid on interest-bearing liabilities such as deposits and borrowed funds.
Liquidity and Interest Rate Risks Interest rate volatility could significantly reduce our profitability. Our earnings and cash flows are largely dependent upon net interest income. Net interest income is the difference between interest income earned on interest-bearing assets such as loans and securities and interest expense paid on interest-bearing liabilities such as deposits and borrowed funds.
We have a continuing need for technological change, and we may not have the resources to implement new technology effectively, or we may experience operational challenges when implementing new technology or technology needed to compete effectively with larger institutions may not be available to us on a cost-effective basis.
Any damage to our reputation could affect our ability to retain and develop the business relationships necessary to conduct business, which in turn could negatively impact our financial condition, results of operations, and the market price of our common stock.​ We have a continuing need for technological change, and we may not have the resources to implement new technology effectively, or we may experience operational challenges when implementing new technology or technology needed to compete effectively with larger institutions may not be available to us on a cost-effective basis.
Interest rate volatility can reduce unrealized gains or increase unrealized losses in our portfolio, as was the case in 2023 with the rising rate environment. Interest rates are highly sensitive to many factors including monetary policies, domestic and international economic, social and political conditions and issues, including trade disputes, global health pandemics, and other factors beyond our control.
Interest rates are highly sensitive to many factors including monetary policies, domestic and international economic, social and political conditions and issues, including trade disputes, global health pandemics, and other factors beyond our control. Fluctuations in interest rates can materially affect both the returns on and market value of our investment securities.
Increases in the allowance will result in an expense for the period, thereby reducing reported net income. We are exposed to risk of environmental liabilities with respect to properties to which we take title.
Increases in the allowance will result in an expense for the period, thereby reducing reported net income.
We may experience material losses if such estimates or assumptions underlying in our financial statements are incorrect. From time to time, the FASB and the SEC change the financial accounting and reporting standards or the interpretation of those standards that govern the preparation of our external financial statements.
From time to time, the FASB and the SEC change the financial accounting and reporting standards or the interpretation of those standards that govern the preparation of our external financial statements. These changes could materially impact how we report our results of operations and financial condition.
These changes could materially impact how we report our results of operations and financial condition. New or revised standards could also require retroactive application, which could result in the restatement of our prior period financial statements in material amounts. Internal controls may become ineffective in preventing or detecting material errors.
New or revised standards could also require retroactive application, which could result in the restatement of our prior period financial statements in material amounts. Our financial statements are based in part on assumptions and estimates, which, if wrong, could cause unexpected losses in the future. Pursuant to U.S.
Removed
If this were to happen, the value of our securities could decline significantly, and you could lose all or part of your investment. 22 Table of Contents Liquidity and Interest Rate Risks Interest rate volatility could significantly reduce our profitability. Our earnings and cash flows are largely dependent upon net interest income.
Added
Potential downgrades of U.S. government securities by one or more of the credit ratings agencies could have a material adverse effect on our operations, earnings and financial condition.
Removed
Fluctuations in interest rates can materially affect both the returns on and market value of our investment securities.
Added
A possible future downgrade of the sovereign credit ratings of the U.S. government and a decline in the perceived creditworthiness of U.S. government-related obligations could impact our ability to obtain funding that is collateralized by affected instruments, as well as affect the pricing of that funding when it is available.
Removed
During 2024, our annual impairment test conducted in October, using discounted cash flows and market-based approaches, indicated that the estimated fair value of our sole reporting unit “Bar Harbor Bank & Trust” exceeded the carrying value.
Added
A downgrade may also adversely affect the market value of such instruments. We cannot predict if, when or how any changes to the credit ratings or perceived creditworthiness of these organizations will affect economic conditions. Such ratings actions could result in a significant adverse impact on us.
Removed
Notwithstanding the strength of defensive measures, the threat from cyberattacks is severe, attacks are sophisticated and attackers respond rapidly to changes in defensive measures.
Added
Among other things, a downgrade in the U.S. government’s credit rating could adversely impact the value of our securities portfolio and may trigger requirements that we post additional collateral for trades relative to these securities.
Removed
Accounting policies are fundamental to understanding our results of operations, and financial condition. Some of the accounting policies are critical because they require us to make difficult, subjective and complex judgments about matters that are inherently uncertain and because it is likely that materially different amounts would be reported under different conditions or using different assumptions.
Added
A downgrade of the sovereign credit ratings of the U.S. government or the credit ratings of related institutions, agencies or instruments could significantly exacerbate the other risks to which we are subject and any related adverse effects on the business, financial condition and results of operations. Revenues from our wealth management business are significant to earnings.
Added
Generating returns that satisfy customers in a variety of asset classes is important to maintaining existing business and attracting new business. Administering or managing assets in accordance with the terms of governing documents and applicable laws is also important to client satisfaction.
Added
In addition, our regulators, as an integral part of their examination process, periodically review the allowance for credit losses on loans and may require us to increase the allowance for credit losses on loans by recognizing additional provisions for loan losses charged to income, or to charge-off loans, which, net of any recoveries, would decrease the allowance for credit losses on loans.
Added
Any such additional provisions for credit losses or charge-offs could have a material adverse effect on our financial condition and results of operation.
Added
A portion of our loan portfolio consists of loan participations, which may have a higher risk of loss than loans we originate because we are not the lead lender and we have limited control over credit monitoring. ​We occasionally purchase loan participations.
Added
Although we underwrite these loan participations consistent with our general underwriting criteria, loan participations may have a higher risk of loss than loans we originate because we are limited in our ability to monitor the performance of the loan and rely significantly on the lead lender .
Added
Moreover, our decisions regarding the classification of a loan participation and loan loss provisions associated with a loan participation are made in part based upon information provided by the lead lender. A lead lender also may not monitor a participation loan in the same manner as we would for loans that we originate.
Added
At December 31, 2025, we held loan participation interests in our commercial portfolio totaling $686 million and residential and consumer loans totaling $104 million. We are exposed to risk of environmental liabilities with respect to properties to which we take title.
Added
We may not have adequate remedies against the prior owner or other responsible parties and could find it difficult or impossible to sell the affected properties. These events could have an adverse effect on our financial condition and results of operations.
Added
We may continue to incur substantial costs related to our acquisition of Guaranty Bancorp and the integration of Woodsville, and these costs may be greater than anticipated due to unexpected events. We have incurred and expect to incur a number of non-recurring costs associated with the acquisition of Guaranty Bancorp, including facilities and systems consolidation costs and employment-related costs.
Added
We may also incur additional costs to maintain employee morale and to retain key employees. There are many factors beyond our control that could affect the total amount or the timing of the integration costs. Moreover, many of the additional costs that will be incurred are, by their nature, difficult to estimate accurately.
Added
These integration costs may result in the combined company taking additional charges against earnings, and the amount and timing of such charges are uncertain at present. We may fail to realize the anticipated benefits of acquiring Guaranty Bancorp.
Added
The success of our acquisition of Guaranty Bancorp will depend on, among other things, the ability to realize the anticipated benefits and cost savings from combining Woodsville’s business with the Bank’s business.
Added
To realize the anticipated benefits and cost savings, we must successfully integrate and combine our businesses in a manner that permits those cost savings to be realized without adversely affecting current revenues and future growth.
Added
If we are not able to successfully achieve these objectives, the anticipated benefits may not be realized fully or at all or may take longer to realize than expected.
Added
In addition, the actual cost savings of the acquisition could be less than anticipated, and integration may result in additional and unforeseen expenses. ​ Disruptions to our information systems and security breaches may adversely affect our business and reputation.
Added
Notwithstanding the strength of defensive measures, cybersecurity threats and the tactics, techniques and procedures used in cyberattacks change, develop and evolve rapidly and continuously, including from growth in third-party services that facilitate or carry out cyberattacks and from emerging technologies, such as artificial intelligence (including machine learning and generative artificial intelligence) and quantum computing, which may be used to enhance the tactics, techniques and procedures described above and facilitate new cyber threats.
Added
Due to the complexity and interconnectedness of information technology systems, the process of enhancing our systems can itself create a risk of systems disruptions and security issues.
Added
Our ability to maintain our reputation is critical to the success of our business and the failure to do so may materially adversely affect our performance. ​Our reputation is one of the most valuable components of our business.
Added
A key component of our business strategy is to rely on our reputation for customer service and knowledge of local markets to expand our presence by capturing new business opportunities from existing and prospective customers in our market area. We strive to conduct our business in a manner that enhances our reputation.
Added
This is done, in part, by recruiting, hiring and retaining employees who share our core values of being an integral part of the communities we serve, delivering superior service to our customers and caring about our customers and associates.
Added
If our reputation is negatively affected by the actions of our employees, by our inability to conduct our operations in a manner that is appealing to current or prospective customers, or by events beyond our control, our business and operating results may be adversely affected.​ The proliferation of social media websites utilized by us and other third parties, as well as the personal use of social media by our employees and others, including personal blogs and social network profiles, also may increase the risk that negative, inappropriate or unauthorized information may be posted or released publicly that could harm our reputation or have other negative consequences, including as a result of our employees interacting with our customers in an unauthorized manner in various social media outlets.
Added
Many of our larger competitors have substantially greater resources to invest in technological improvements. We may not be as timely or successful in assessing the competitive landscape and developing or introducing new products and services as these larger competitors.
Added
Our business may be negatively impacted if we, or our third-party providers, do not timely develop and apply emerging technologies, like artificial intelligence and quantum computing, or if our initiatives in these areas are deficient or fail.
Added
Our, or our third-party providers’, inability or resistance to timely innovate or adapt operations, products and services to evolving regulatory and market environments, industry standards and consumer preferences could result in service disruptions, harm our business and adversely affect our results of operations and reputation.
Added
Inflation risk is the risk that the value of assets or income from investments will be worth less in the future as inflation decreases the value of money. The future rate of inflation and other economic factors remain uncertain, and the Federal Reserve Board may decrease or increase interest rates slower or faster than anticipated.
Added
If inflation increases and interest rates rise, the value of our investment securities, particularly those with longer maturities, will decrease, although this 29 Table of Contents effect is less pronounced for floating rate instruments.
Added
Prolonged periods of inflation also may impact our profitability by negatively impacting our costs and expenses, including increasing funding costs and expenses related to talent acquisition and retention, and negatively impacting the demand for our products and services.
Added
Moreover, our customers are also affected by inflation and the rising costs of goods and services used in their households and businesses, which could have a negative impact on their ability to repay their loans.
Added
Adverse changes in inflation and interest rates could negatively impact consumer and business confidence, and adversely affect the economy as well as our business, results of operations and financial condition. ​ Increased market volatility and adverse changes in financial or capital market conditions may increase our market risk.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

9 edited+3 added−0 removed5 unchanged
Biggest changeThey are required to undergo periodic information security awareness training to ensure a clear understanding of their roles in protecting information assets and to create a security-minded culture. Additionally, the Company carries out regular phishing simulation tests throughout the year to keep employees alert, spread awareness and ensure that employees have the knowledge and resources necessary to report suspicious activity.
Biggest changeAdditionally, the Company carries out regular phishing simulation tests throughout the year to keep employees alert, spread awareness and ensure that employees have the knowledge and resources necessary to report suspicious activity.
ITEM 1C. CYBERSECURITY Cybersecurity threats pose a risk to the Company as crimes committed through or involving the internet. Examples of those threats are malware, phishing, hacking, denial of service attacks, stealing information, unauthorized intrusions into internal systems or the systems of third-party vendors that could adversely impact operations or damage reputations.
ITEM 1C. CYBERSECURITY Introduction Cybersecurity threats pose a risk to the Company as crimes committed through or involving the internet. Examples of those threats are malware, phishing, hacking, denial of service attacks, stealing information, unauthorized intrusions into internal systems or the systems of third-party vendors that could adversely impact operations or damage reputations.
We utilize third party service providers to support and facilitate business and operational activities to achieve strategic goals. However, third parties may expose us and our customers to various risks.
Cybersecurity Risk Management We utilize third party service providers to support and facilitate business and operational activities to achieve strategic goals. However, third parties may expose us and our customers to various risks.
Our process for monitoring and mitigating 34 Table of Contents cybersecurity risk is designed in conjunction with our overall Risk Management Policy and Information Security Program.
Our process for monitoring and mitigating cybersecurity risk is designed in conjunction with our overall Risk Management Policy and Information Security Program.
The management of cybersecurity risks is ultimately the responsibility of Company management and is governed by the Board. They devote significant time and attention to the oversight of cybersecurity and information security risks. The Board through its BRC reviews monthly information technology and Information Security and Vendor Management reports that highlight key areas of focus and risk.
They devote significant time and attention to the oversight of cybersecurity and information security risks. The Board through its Board Risk Committee reviews monthly information technology and Information Security and Vendor Management reports that highlight key areas of focus and risk.
Our federal regulator, the FDIC, is part of the Federal Financial Institutions Examination Council (FFIEC), which publishes extensive guidelines and examination procedures that are used to review the security of financial institutions.
We are subject to extensive federal and state regulation of customer privacy and the security of financial information. Our federal regulator, the FDIC, is part of the Federal Financial Institutions Examination Council (FFIEC), which publishes extensive guidelines and examination procedures that are used to review the security of financial institutions.
We have implemented a Vendor Risk Management (“VRM”) framework, which provides the tools and practices utilized in the oversight of third-party service providers, with an objective to meet legal and regulatory obligations, contractual requirements, performance expectations, and our own principles and values. For the 2024 period, there were no material incidents affecting the VRM framework or controls.
We have implemented a Vendor Risk 34 Table of Contents Management (“VRM”) framework, which provides the tools and practices utilized in the oversight of third-party service providers, with an objective to meet legal and regulatory obligations, contractual requirements, performance expectations, and our own principles and values.
Annually, we engage a third party to perform penetration testing and ongoing analysis to identify potential vulnerabilities and areas for additional enhancements as well as a full-scope independent audit of IT and Information Security processes. All of our employees also have a responsibility to protect the privacy of Company and Bank confidential and proprietary information.
Annually, we engage a third party to perform penetration testing and ongoing analysis to identify potential vulnerabilities and areas for additional enhancements as well as a full-scope independent audit of IT and Information Security processes. Risk Management Oversight and Governance The management of cybersecurity risks is ultimately the responsibility of Company management and is governed by the Board.
The Board also reviews and approves the Information Security Program, the central program outlining cyber-security processes and controls annually and frequently receives presentations on and discusses cybersecurity and information security risks, industry trends and best practices. We are subject to extensive federal and state regulation of customer privacy and the security of financial information.
The Board also reviews and approves the Information Security Program, the central program outlining cyber-security processes and controls annually and frequently receives presentations on and discusses cybersecurity and information security risks, industry trends and best practices. Reporting to our Chief Risk Officer, our Security Information Officer has more than 20 years of experience in the information/computer security industry.
Added
For the 2025 period, there were no material incidents affecting the VRM framework or controls.
Added
He holds a Bachelor of Science in Economic Crime Investigation, a Masters of Business Administration and several certifications including Certified Information Systems Security Professional (“CISPP”) and Certified in Risk and Information Systems Control (“CRISC”). He is supported by an experienced information security team.
Added
All of our employees also have a responsibility to protect the privacy of Company and Bank confidential and proprietary information. They are required to undergo periodic information security awareness training to ensure a clear understanding of their roles in protecting information assets and to create a security-minded culture.

Item 2. Properties

Properties — owned and leased real estate

3 edited+1 added−0 removed0 unchanged
Biggest changeIn addition to banking offices, we also have Operations Centers located in Ellsworth, Maine, and Newport, New Hampshire that house our operations and data processing centers. We have leased spaces in Hampden, Maine, Portland, Maine, Rockland, Maine and Manchester, New Hampshire where back office support for multiple lines of business and related functions are located.
Biggest changeIn addition to banking offices, we have Operations Centers located in Ellsworth, Maine, and Newport, New Hampshire that house members of our operations, wealth management and administrative teams. We have additional office space located in a bank-owned facility in Bangor, Maine and in leased office spaces located in Hampden and Portland, Maine and in Manchester, New Hampshire.
ITEM 2. PROPERTIES Our principal executive office is in a building located at 82 Main Street, Bar Harbor, Maine. We provide full-banking services at 53 locations throughout Maine, New Hampshire and Vermont, of which 34 are owned and 19 are leased. We also have one stand-alone drive-up window in Vermont.
ITEM 2. PROPERTIES Our Corporate Office is located at 82 Main Street in Bar Harbor, Maine. We provide full-banking services at 22 locations in Maine, 30 locations in New Hampshire and 10 locations in Vermont. We also have one stand-alone drive-up facility located in Woodstock, Vermont.
Additionally, we own a Wealth Management office located in Concord, New Hampshire. In the opinion of management, our physical properties are considered adequate to meet the needs of customers in the communities served.
In the opinion of management, our physical properties are considered adequate to meet the needs of customers in the communities served. At December 31, 2025 the total net book value of our land, buildings, leasehold improvements, furniture, fixtures and equipment was $58.2 million.
Added
These locations offer back office support for multiple business lines and related functions throughout the organization. Additionally, we own a Wealth Management office building located in Concord, New Hampshire. In total, we own 41 retail banking branches and lease 21 others. We also own an additional 5 administrative buildings and lease 3 others.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+1 added−2 removed6 unchanged
Biggest changeThe graph tracks the performance of a $100 investment in our common stock and in each index (with the reinvestment of all dividends) from December 31, 2019 to December 31, 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period Ending Index 12/31/19 12/30/20 12/31/21 12/31/22 12/31/23 12/30/24 Bar Harbor Bankshares ​ 100.00 ​ 92.77 ​ 122.76 ​ 140.87 ​ 134.60 ​ 146.22 NYSE American Composite Index 100.00 95.27 141.37 174.07 197.50 206.76 S&P U.S.
Biggest changeThe graph tracks the performance of a $100 investment in our common stock and in each index (with the reinvestment of all dividends) from December 31, 2020 to December 31, 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period Ending Index ​ ​ ​ 12/31/20 ​ ​ ​ 12/30/21 ​ ​ ​ 12/31/22 ​ ​ ​ 12/31/23 ​ ​ ​ 12/31/24 ​ ​ ​ 12/31/25 Bar Harbor Bankshares ​ 100.00 ​ 132.33 ​ 151.86 ​ 145.10 ​ 157.62 ​ 166.62 NYSE American Composite Index 100.00 148.39 182.70 207.29 217.01 325.59 S&P U.S.
Cash dividends declared and paid totaled $0.30 per share in the second, third and fourth quarters of 2024 and $0.28 per share in the first quarter of 2024. We currently expect that comparable cash dividends will continue to be paid in the future.
Cash dividends declared and paid totaled $0.32 per share in the second, third and fourth quarters of 2025 and $0.30 per share in the first quarter of 2025. We currently expect that comparable cash dividends will continue to be paid in the future.
As of March 7, 2025, there were 15,317,222 shares of Bar Harbor Bankshares common stock, par value $2.00 per share, outstanding and approximately 1,315 shareholders of record, as obtained through the Company’s transfer agent.
As of March 6, 2026, there were 16,742,104 shares of Bar Harbor Bankshares common stock, par value $2.00 per share, outstanding and approximately 1,426 shareholders of record, as obtained through the Company’s transfer agent. The number of record-holders may not reflect the number of persons or entities holding stock in nominee name through banks, brokerage firms or other nominee.
Small Cap Banks Index 100.00 90.82 126.43 111.47 112.03 132.44 ​ ​ 38 Table of Contents ITEM 6. [RESERVED] ​
Small Cap Banks Index 100.00 139.21 122.74 123.35 145.82 160.37 ​ ​ 38 Table of Contents ITEM 6. [RESERVED] ​
We will continue examine buying opportunities considering market conditions, including interest rate volatility and potential loan and risk-weighted asset growth. ​ 37 Table of Contents Common Stock Performance Graph The following graph illustrates the estimated yearly change in value of the cumulative total shareholder return on our common stock for each of the last five years.
Recent Sale of Unregistered Securities and Use of Proceeds from Registered Securities No unregistered equity securities were sold by the Company during the year ended December 31, 2025. ​ 37 Table of Contents Common Stock Performance Graph The following graph illustrates the estimated yearly change in value of the cumulative total shareholder return on our common stock for each of the last five years.
Removed
Recent Sale of Unregistered Securities and Use of Proceeds from Registered Securities No unregistered equity securities were sold by the Company during the year ended December 31, 2024. On April 18, 2024, the Board approved a 12-month plan to repurchase up to 5% of the Company’s outstanding shares of common stock, representing 761,000 shares.
Added
The information called for by this item under Item 201(d) of Regulation S-K related to securities authorized for issuance under our equity compensation plans is set forth in our 2026 Proxy Statement, and is incorporated herein by reference.
Removed
No shares were repurchased by the Company during the year ended December 31, 2024 and the maximum number of shares that may yet be purchased under the plan is 761,000 shares.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

28 edited+40 added−39 removed29 unchanged
Biggest changeThe following reconciliation table provides a more detailed analysis of these, and reconciliation for, each of non-GAAP financial measures. ​ 45 Table of Contents RECONCILIATION OF NON-GAAP FINANCIAL MEASURES ​ The following table summarizes the reconciliation of non-GAAP items for the time periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (in thousands) Calculations ​ 2024 ​ 2023 ​ 2022 Net income ​ $ 43,544 ​ $ 44,852 ​ $ 43,557 Non-recurring items: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gain on sale of securities, net ​ (50) ​ (34) ​ (53) Gain on sale of premises and equipment, net ​ (192) ​ 182 ​ 10 Acquisition, conversion and other expenses ​ 20 ​ 283 ​ 266 Income tax expense (1) ​ 53 ​ (104) ​ (51) Total non-recurring items ​ ​ ​ ​ (169) ​ ​ 327 ​ ​ 172 Total adjusted income (2) (A) ​ $ 43,375 ​ $ 45,179 ​ $ 43,729 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income (B) ​ $ 113,839 ​ $ 117,675 ​ $ 113,681 Plus: Non-interest income ​ 36,888 ​ 35,073 ​ 34,647 Total Revenue ​ 150,727 ​ 152,748 ​ 148,328 Gain on sale of securities, net ​ (50) ​ (34) ​ (53) Total adjusted revenue (2) (C) ​ $ 150,677 ​ $ 152,714 ​ $ 148,275 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total non-interest expense ​ $ 95,987 ​ $ 92,723 ​ $ 90,579 Non-recurring expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gain on sale of premises and equipment, net ​ 192 ​ (182) ​ (10) Acquisition, conversion and other expenses ​ (20) ​ (283) ​ (266) Total non-recurring expenses ​ ​ ​ ​ 172 ​ ​ (465) ​ ​ (276) Adjusted non-interest expense (2) (D) ​ $ 96,159 ​ $ 92,258 ​ $ 90,303 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total revenue ​ ​ ​ ​ 150,727 ​ ​ 152,748 ​ ​ 148,328 Total non-interest expense ​ ​ ​ ​ 95,987 ​ ​ 92,723 ​ ​ 90,579 Pre-tax, pre-provision net revenue ​ ​ ​ $ 54,740 ​ $ 60,025 ​ $ 57,749 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted revenue (2) ​ ​ ​ ​ 150,677 ​ ​ 152,714 ​ ​ 148,275 Adjusted non-interest expense (2) ​ ​ ​ ​ 96,159 ​ ​ 92,258 ​ ​ 90,303 Adjusted pre-tax, pre-provision net revenue (2) ​ (U) ​ $ 54,518 ​ $ 60,456 ​ $ 57,972 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in millions) ​ ​ ​ Average earning assets (E) ​ $ 3,677 ​ $ 3,623 ​ $ 3,425 Average assets (F) ​ 3,986 ​ 3,934 ​ 3,747 Average shareholders' equity (G) ​ 446 ​ 412 ​ 399 Average tangible shareholders' equity (2)(3) (H) ​ 323 ​ 288 ​ 273 Tangible shareholders' equity, period-end (2)(3) (I) ​ 335 ​ 308 ​ 268 Tangible assets, period-end (2)(3) (J) ​ 3,960 ​ 3,847 ​ 3,784 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 46 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ Calculations ​ 2024 ​ 2023 ​ 2022 ​ (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common shares outstanding, period-end (K) ​ ​ 15,280 ​ ​ 15,172 ​ ​ 15,083 ​ Average diluted shares outstanding (L) ​ ​ 15,311 ​ ​ 15,195 ​ ​ 15,112 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted earnings per share, diluted (2) (A/L) ​ $ 2.84 ​ $ 2.95 ​ ​ 2.89 ​ Tangible book value per share, period-end (2) (I/K) ​ ​ 21.93 ​ ​ 20.28 ​ ​ 17.78 ​ Total tangible shareholders' equity/total tangible assets (2) (I/J) ​ ​ 8.46 ​ ​ 8.00 ​ ​ 7.09 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Performance ratios (4) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Return on assets ​ ​ ​ 1.09 % ​ 1.14 % ​ 1.16 % Core return on assets (2) ​ (A/F) ​ ​ 1.09 ​ ​ 1.15 ​ ​ 1.17 ​ Pre-tax, pre-provision return on assets ​ ​ ​ ​ 1.37 ​ ​ 1.53 ​ ​ 1.54 ​ Adjusted pre-tax, pre-provision return on assets (2) ​ (U/F) ​ ​ 1.37 ​ ​ 1.54 ​ ​ 1.49 ​ Return on equity ​ ​ ​ 9.75 ​ ​ 10.88 ​ ​ 10.91 ​ Core return on equity (2) ​ (A/G) ​ ​ 9.72 ​ ​ 10.96 ​ ​ 10.96 ​ Return on tangible equity ​ ​ ​ ​ 13.72 ​ ​ 15.84 ​ ​ 16.20 ​ Adjusted return on tangible equity (1)(2) ​ (A+Q)/H ​ ​ 13.67 ​ ​ 15.96 ​ ​ 16.26 ​ Efficiency ratio (1)(2)(5) ​ (D-O-Q)/(C+N) ​ ​ 61.83 ​ ​ 58.47 ​ ​ 59.54 ​ Net interest margin ​ (B+P)/E ​ ​ 3.15 ​ ​ 3.29 ​ ​ 3.36 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Supplementary data (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Taxable equivalent adjustment for efficiency ratio ​ (N) ​ $ 2,455 ​ $ 2,392 ​ ​ 2,020 ​ Franchise taxes included in non-interest expense ​ (O) ​ ​ 538 ​ ​ 638 ​ ​ 583 ​ Tax equivalent adjustment for net interest margin ​ (P) ​ ​ 1,905 ​ ​ 1,550 ​ ​ 1,398 ​ Intangible amortization ​ (Q) ​ ​ 932 ​ ​ 932 ​ ​ 932 ​ Interest and fees on PPP loans ​ (T) ​ ​ — ​ ​ — ​ ​ 223 ​ (1) 2024 assumes a marginal tax rate of 23.73% for the fourth quarter, 23.82% for the second and third quarters and 24.01% for the first quarter. 2023 assumes a marginal tax rate of 24.01% for the fourth quarter and 23.80% for the first three quarters. 2022 assumes a marginal tax rate of 23.53% for the fourth quarter and 23.41% for the first three quarters.
Biggest changeThe following reconciliation table provides a more detailed analysis of these, and reconciliation for, each of non-GAAP financial measures. ​ 44 Table of Contents RECONCILIATION OF NON-GAAP FINANCIAL MEASURES ​ The following table summarizes the reconciliation of non-GAAP items for the time periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (in thousands) ​ ​ ​ Calculations ​ 2025 ​ ​ ​ ​ 2024 ​ ​ ​ ​ 2023 Net income ​ $ 36,919 ​ $ 43,544 ​ $ 44,852 Non-recurring items: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss (gain) on available-for-sale debt securities (6) ​ 5,329 ​ (50) ​ (34) Gain on sale of premises and equipment, net ​ 257 ​ (192) ​ 182 Provision on non-PCD acquired loans ​ ​ ​ 3,954 ​ ​ — ​ ​ — Acquisition, conversion and other expenses ​ 10,592 ​ 20 ​ 283 Income tax expense (1) ​ (4,938) ​ 53 ​ (104) Total non-recurring items ​ ​ ​ 15,194 ​ ​ (169) ​ ​ 327 Total adjusted income (2) (A) $ 52,113 ​ $ 43,375 ​ $ 45,179 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income (B) $ 134,478 ​ $ 113,839 ​ $ 117,675 Plus: Non-interest income ​ 34,456 ​ 36,888 ​ 35,073 Total Revenue ​ 168,934 ​ 150,727 ​ 152,748 Loss (gain) on available-for-sale debt securities (6) ​ 5,329 ​ (50) ​ (34) Total adjusted revenue (2) (C) $ 174,263 ​ $ 150,677 ​ $ 152,714 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total non-interest expense ​ $ 117,727 ​ $ 95,987 ​ $ 92,723 Non-recurring expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gain on sale of premises and equipment, net ​ (257) ​ 192 ​ (182) Acquisition, conversion and other expenses ​ (10,592) ​ (20) ​ (283) Total non-recurring expenses ​ ​ ​ (10,849) ​ ​ 172 ​ ​ (465) Adjusted non-interest expense (2) (D) $ 106,878 ​ $ 96,159 ​ $ 92,258 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total revenue ​ ​ ​ 168,934 ​ ​ 150,727 ​ ​ 152,748 Total non-interest expense ​ ​ ​ 117,727 ​ ​ 95,987 ​ ​ 92,723 Pre-tax, pre-provision net revenue (2) ​ (S) $ 51,207 ​ $ 54,740 ​ $ 60,025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted revenue (2) ​ ​ ​ 174,263 ​ ​ 150,677 ​ ​ 152,714 Adjusted non-interest expense (2) ​ ​ ​ 106,878 ​ ​ 96,159 ​ ​ 92,258 Adjusted pre-tax, pre-provision net revenue (2) ​ (U) $ 67,385 ​ $ 54,518 ​ $ 60,456 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in millions) ​ ​ ​ ​ ​ ​ Average earning assets (E) $ 4,010 ​ $ 3,677 ​ $ 3,623 Average assets (F) 4,337 ​ 3,986 ​ 3,934 Average shareholders' equity (G) 493 ​ 446 ​ 412 Average tangible shareholders' equity (2)(3) (H) 356 ​ 323 ​ 288 Tangible shareholders' equity, period-end (2)(3) (I) 374 ​ 335 ​ 308 Tangible assets, period-end (2)(3) (J) 4,526 ​ 3,960 ​ 3,847 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 45 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ Calculations ​ 2025 ​ ​ ​ ​ 2024 ​ ​ ​ ​ 2023 ​ (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common shares outstanding, period-end (K) ​ 16,702 ​ ​ 15,280 ​ ​ 15,172 ​ Average diluted shares outstanding (L) ​ 15,955 ​ ​ 15,311 ​ ​ 15,195 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted earnings per share, diluted (2) (A/L) $ 3.27 ​ $ 2.84 ​ $ 2.95 ​ Tangible book value per share, period-end (2) (I/K) ​ 22.41 ​ ​ 21.93 ​ ​ 20.28 ​ Total tangible shareholders' equity/total tangible assets (2) (I/J) ​ 8.27 ​ ​ 8.46 ​ ​ 8.00 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Performance ratios (4) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Return on assets ​ ​ ​ 0.85 % ​ 1.09 % ​ 1.14 % Adjusted return on assets (2) ​ (A/F) ​ 1.20 ​ ​ 1.09 ​ ​ 1.15 ​ Pre-tax, pre-provision return on assets (2) ​ (S/F) ​ 1.18 ​ ​ 1.37 ​ ​ 1.53 ​ Adjusted pre-tax, pre-provision return on assets (2) ​ (U/F) ​ 1.55 ​ ​ 1.37 ​ ​ 1.54 ​ Return on equity ​ ​ ​ 7.49 ​ ​ 9.75 ​ ​ 10.88 ​ Adjusted return on equity (2) ​ (A/G) ​ 10.58 ​ ​ 9.72 ​ ​ 10.96 ​ Return on tangible equity ​ ​ ​ 10.68 ​ ​ 13.72 ​ ​ 15.84 ​ Adjusted return on tangible equity (1)(2) ​ (A+Q)/H ​ 14.94 ​ ​ 13.67 ​ ​ 15.96 ​ Efficiency ratio (1)(2)(5) ​ (D-O-Q)/(C+N) ​ 59.23 ​ ​ 61.83 ​ ​ 58.47 ​ Net interest margin, fully taxable equivalent (2) ​ (B+P)/E ​ 3.41 ​ ​ 3.15 ​ ​ 3.29 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Supplementary data (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Taxable equivalent adjustment for efficiency ratio ​ (N) $ 2,927 ​ $ 2,455 ​ $ 2,392 ​ Franchise taxes included in non-interest expense ​ (O) ​ 408 ​ ​ 538 ​ ​ 638 ​ Tax equivalent adjustment for net interest margin ​ (P) ​ 2,297 ​ ​ 1,905 ​ ​ 1,550 ​ Intangible amortization ​ (Q) ​ 1,514 ​ ​ 932 ​ ​ 932 ​ (1) 2025 assumes a marginal tax rate of 24.65% for the fourth and third quarters and 24.26% for the second and first quarters. 2024 assumes a marginal tax rate of 23.73% for the fourth quarter, 23.82% for the second and third quarters and 24.01% for the first quarter. 2023 assumes a marginal tax rate of 24.01% for the fourth quarter and 23.80% for the first three quarters.
It should be read in conjunction with the consolidated financial statements and footnotes and selected financial data presented elsewhere in this Annual Report. Within the tables presented, certain columns and rows may not sum due to the use of rounded numbers for disclosure purposes. The detailed financial discussion that follows focuses on 2024 results compared to 2023.
It should be read in conjunction with the consolidated financial statements and footnotes and selected financial data presented elsewhere in this Annual Report. Within the tables presented, certain columns and rows may not sum due to the use of rounded numbers for disclosure purposes. The detailed financial discussion that follows focuses on 2025 results compared to 2024.
For a discussion of 2023 results compared to 2022, see the Company's Annual Report on Form 10-K for the year ended December 31, 2023 . GENERAL The Company is a bank holding company headquartered in Maine, providing a broad array of banking and nonbanking products and services to businesses and consumers primarily within our three-state footprint.
For a discussion of 2024 results compared to 2023, see the Company's Annual Report on Form 10-K for the year ended December 31, 2024. GENERAL The Company is a bank holding company headquartered in Maine, providing a broad array of banking and nonbanking products and services to businesses and consumers primarily within our three-state footprint.
Capital Resources Consistent with our long-term goal of operating a sound and profitable organization, at December 31, 2024, we continue to be a “well-capitalized” financial institution according to applicable regulatory standards. Management believes this to be vital in promoting depositor and investor confidence and providing a solid foundation for future growth.
Capital Resources Consistent with our long-term goal of operating a sound and profitable organization, at December 31, 2025, we continue to be a “well-capitalized” financial institution according to applicable regulatory standards. Management believes this to be vital in promoting depositor and investor confidence and providing a solid foundation for future growth.
At December 31, 2024, available same-day liquidity totaled approximately $1.0 billion, including cash, borrowing capacity at FHLB and the Federal Reserve Discount Window and various lines of credit. Additional sources of liquidity include cash flows from operations, wholesale deposits, cash flow from the Company's amortizing securities and loan portfolios.
At December 31, 2025, available same-day liquidity totaled approximately $1.0 billion, including cash, borrowing capacity at FHLB and the Federal Reserve Discount Window and various lines of credit. Additional sources of liquidity include cash flows from operations, wholesale deposits, cash flow from the Company's amortizing securities and loan portfolios.
(2) The average balance for securities is based on amortized cost. (3) Fully taxable equivalent considers the impact of tax-advantaged securities and loans. 43 Table of Contents RATE/VOLUME ANALYSIS The following table presents the effects of rate and volume changes on the fully taxable equivalent net interest income.
(2) The average balance for securities is based on amortized cost. (3) Fully taxable equivalent considers the impact of tax-advantaged securities and loans. 42 Table of Contents RATE/VOLUME ANALYSIS The following table presents the effects of rate and volume changes on the fully taxable equivalent net interest income.
IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS Please refer to the notes on Recently Adopted Accounting Principles and Future Application of Accounting Pronouncements in Note 1 – Summary of Significant Accounting Policies of the Consolidated Financial Statements. 51 Table of Contents CRITICAL ACCOUNTING POLICIES AND ESTIMATES Note 1 – Summary of Significant Accounting Policies to our audited Consolidated Financial Statements for the year ended December 31, 2024 contains a summary of significant accounting policies.
IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS Please refer to the notes on Recently Adopted Accounting Principles and Future Application of Accounting Pronouncements in Note 1 – Summary of Significant Accounting Policies of the Consolidated Financial Statements. 50 Table of Contents CRITICAL ACCOUNTING POLICIES AND ESTIMATES Note 1 – Summary of Significant Accounting Policies to our audited Consolidated Financial Statements for the year ended December 31, 2025 contains a summary of significant accounting policies.
These types of purchase obligations that will come due during 2024 approximates $10.2 million as of December 31, 2024 which is expected to be funded by cash flows generated from our operations. Impact of Inflation and Changing Prices A banking organization’s assets and liabilities are primarily monetary.
These types of purchase obligations that will come due during 2026 is approximately $10.3 million as of December 31, 2025 which is expected to be funded by cash flows generated from our operations. Impact of Inflation and Changing Prices A banking organization’s assets and liabilities are primarily monetary.
COMPARISON OF OPERATING RESULTS FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 Net Interest Income Net interest income for 2024 was $113.8 million compared with $117.7 million in 2023. The net interest margin was 3.15% in 2024 compared to 3.29% in the prior year.
COMPARISON OF OPERATING RESULTS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 Net Interest Income Net interest income for 2025 was $134.5 million compared with $113.8 million in 2024. The net interest margin was 3.41% in 2025 compared to 3.15% in the prior year.
The dividend increased to $0.30 per share an increase of 9.7% to yield an annualized dividend yield of 3.92%. 40 Table of Contents SELECTED FINANCIAL DATA ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At or For the Years Ended December 31, (in millions, except ratios and share data) 2024 2023 2022 Financial Condition Data: ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets ​ $ 4,083 ​ $ 3,971 ​ $ 3,910 Total earning assets (1) ​ 3,782 ​ 3,664 ​ 3,601 Total investments ​ 533 ​ 547 ​ 574 Total loans ​ 3,147 ​ 2,999 ​ 2,903 Allowance for credit losses ​ 29 ​ 28 ​ 26 Total goodwill and intangible assets ​ 123 ​ 124 ​ 125 Total deposits ​ 3,268 ​ 3,141 ​ 3,043 Total borrowings ​ 291 ​ 332 ​ 394 Total shareholders' equity ​ 458 ​ 432 ​ 393 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating Data: ​ ​ ​ Total interest and dividend income ​ $ 189 ​ $ 174 ​ $ 127 Total interest expense ​ 75 ​ 57 ​ 13 Net interest income ​ 114 ​ 118 ​ 114 Non-interest income ​ 37 ​ 35 ​ 35 Net revenue (2) ​ 151 ​ 154 ​ 149 Provision for credit losses ​ 2 ​ 3 ​ 3 Total non-interest expense ​ 96 ​ 93 ​ 91 Income tax expense ​ 9 ​ 12 ​ 11 Net income ​ 44 ​ 45 ​ 44 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ratios and Other Data: ​ ​ ​ Per Common Share Data ​ ​ ​ Basic earnings ​ $ 2.86 ​ $ 2.96 ​ $ 2.90 Diluted earnings ​ 2.84 ​ 2.95 ​ 2.88 Total book value (5) ​ 30.00 ​ 28.48 ​ 26.09 Dividends ​ 1.18 ​ 1.10 ​ 1.02 Common stock price: ​ ​ ​ High ​ 38.47 ​ 32.42 ​ 33.11 Low ​ 23.26 ​ 19.55 ​ 24.00 Close ​ 30.58 ​ 29.36 ​ 32.04 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average common shares outstanding (in thousands) : ​ ​ ​ Basic ​ 15,240 ​ 15,142 ​ 15,040 Diluted ​ 15,311 ​ 15,195 ​ 15,112 ​ 41 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At or For the Years Ended December 31, (in millions, except ratios and share data) 2024 2023 2022 Performance Ratios: (3)(4) ​ ​ ​ ​ ​ ​ ​ Return on assets 1.09 % 1.14 % 1.16 % Return on equity 9.75 10.88 10.91 ​ Interest rate spread 2.61 2.86 3.24 ​ Net interest margin (5) 3.15 3.29 3.36 ​ Dividend payout ratio 40.85 36.93 35.20 ​ ​ ​ ​ ​ ​ ​ ​ ​ Organic Growth Ratios: ​ ​ Total commercial loans 9 % 6 % 19 % Total loans 5 3 15 ​ Total deposits 4 3 (0) ​ ​ ​ ​ ​ ​ ​ ​ ​ Asset Quality and Condition Ratios: ​ ​ Non-accruing loans/total loans 0.22 % 0.18 % 0.23 % Net charge-offs (recoveries)/average loans 0.01 — (0.01) ​ Allowance for credit losses/total loans 0.91 0.94 0.89 ​ Loans/deposits 96 95 95 ​ ​ ​ ​ ​ ​ ​ ​ ​ Capital Ratios: ​ ​ Tier 1 capital to average assets - Company 10.30 % 9.70 % 9.21 % Tier 1 capital to risk-weighted assets - Company 12.06 11.96 11.02 ​ Tier 1 capital to average assets - Bank 10.66 10.50 10.10 ​ Tier 1 capital to risk-weighted assets - Bank 12.50 12.96 12.67 ​ Shareholders equity to total assets (5) 11.23 10.88 10.06 ​ (1) Earning assets includes non-accruing loans and interest-bearing deposits with other banks.
Based on the $39.2 million consideration paid the Company recorded goodwill of $22.3 million and core deposit intangibles of $14.0 million in other intangibles related to the acquisition. ​ 39 Table of Contents SELECTED FINANCIAL DATA ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At or For the Years Ended December 31, (in millions, except ratios and share data) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Financial Condition Data: ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets ​ $ 4,684 ​ $ 4,083 ​ $ 3,971 Total earning assets (1) ​ 4,297 ​ 3,782 ​ 3,664 Total investments ​ 597 ​ 533 ​ 547 Total loans ​ 3,606 ​ 3,147 ​ 2,999 Allowance for credit losses ​ 34 ​ 29 ​ 28 Total goodwill and intangible assets ​ 158 ​ 123 ​ 124 Total deposits ​ 3,821 ​ 3,268 ​ 3,141 Total borrowings ​ 270 ​ 291 ​ 332 Total shareholders' equity ​ 533 ​ 458 ​ 432 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating Data: ​ ​ ​ ​ ​ ​ Total interest and dividend income ​ $ 210 ​ $ 189 ​ $ 174 Total interest expense ​ 75 ​ 75 ​ 57 Net interest income ​ 134 ​ 114 ​ 118 Non-interest income ​ 34 ​ 37 ​ 35 Net revenue (2) ​ 169 ​ 151 ​ 154 Provision for credit losses ​ 5 ​ 2 ​ 3 Total non-interest expense ​ 118 ​ 96 ​ 93 Income tax expense ​ 9 ​ 9 ​ 12 Net income ​ 37 ​ 44 ​ 45 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ratios and Other Data: ​ ​ ​ ​ ​ ​ Per Common Share Data ​ ​ ​ ​ ​ ​ Basic earnings ​ $ 2.32 ​ $ 2.86 ​ $ 2.96 Diluted earnings ​ 2.31 ​ 2.84 ​ 2.95 Total book value (5) ​ 31.88 ​ 30.00 ​ 28.48 Dividends ​ 1.26 ​ 1.18 ​ 1.10 Common stock price: ​ ​ ​ ​ ​ ​ High ​ 35.00 ​ 38.47 ​ 32.42 Low ​ 26.43 ​ 23.26 ​ 19.55 Close ​ 31.05 ​ 30.58 ​ 29.36 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average common shares outstanding (in thousands) : ​ ​ ​ ​ ​ ​ Basic ​ 15,892 ​ 15,240 ​ 15,142 Diluted ​ 15,955 ​ 15,311 ​ 15,195 ​ 40 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At or For the Years Ended December 31, (in millions, except ratios and share data) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Performance Ratios: (3)(4) ​ ​ ​ ​ ​ ​ ​ Return on assets 0.85 % 1.09 % 1.14 % Return on equity 7.49 9.75 10.88 ​ Interest rate spread 2.91 2.61 2.86 ​ Net interest margin (5) 3.41 3.15 3.29 ​ Dividend payout ratio 44.42 40.85 36.93 ​ ​ ​ ​ ​ ​ ​ ​ ​ Organic Growth Ratios: ​ ​ ​ ​ Total commercial loans 6 % 9 % 6 % Total loans 1 5 3 ​ Total deposits 1 4 3 ​ ​ ​ ​ ​ ​ ​ ​ ​ Asset Quality and Condition Ratios: ​ ​ ​ ​ Non-accruing loans/total loans 0.32 % 0.22 % 0.18 % Net charge-offs (recoveries)/average loans 0.03 0.01 — ​ Allowance for credit losses/total loans 0.94 0.91 0.94 ​ Loans/deposits 94 96 95 ​ ​ ​ ​ ​ ​ ​ ​ ​ Capital Ratios: ​ ​ ​ ​ Tier 1 capital to average assets - Company 9.45 % 10.30 % 9.70 % Tier 1 capital to risk-weighted assets - Company 11.54 12.06 11.96 ​ Tier 1 capital to average assets - Bank 9.90 10.66 10.50 ​ Tier 1 capital to risk-weighted assets - Bank 12.10 12.50 12.96 ​ Shareholders equity to total assets (5) 11.37 11.23 10.88 ​ (1) Earning assets includes non-accruing loans and interest-bearing deposits with other banks.
Refer to the Reconciliation of Non-GAAP Financial Measures for additional information. ​ 42 Table of Contents AVERAGE BALANCES AND AVERAGE YIELDS/RATES The following table presents average balances and average rates and yields on a fully taxable equivalent basis for the periods included: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 ​ 2023 ​ 2022 ​ ​ ​ Average ​ Interest ​ Yield/ ​ Average ​ Interest ​ Yield/ ​ Average ​ Interest ​ Yield/ (in millions, except ratios) Balance (3) ​ Rate (3) ​ Balance (3) ​ Rate (3) Balance (3) ​ Rate (3) Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-earning deposits with other banks ​ $ 36 ​ $ 2 ​ 5.54 % ​ $ 37 ​ ​ 2 ​ 5.33 % ​ $ 72 ​ $ 1 ​ 1.07 % Securities available for sale and FHLB stock (2)(3) ​ ​ 590 ​ ​ 24 ​ 4.03 ​ ​ ​ 610 ​ ​ 26 ​ 3.88 ​ ​ ​ 630 ​ ​ 19 ​ 2.99 ​ Loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial real estate ​ ​ 1,626 ​ ​ 91 ​ 5.59 ​ ​ ​ 1,537 ​ ​ 81 ​ 5.27 ​ ​ ​ 1,340 ​ ​ 55 4.13 ​ Commercial and industrial (3) ​ 466 ​ ​ 32 ​ 6.75 ​ ​ 437 ​ ​ 28 ​ 6.39 ​ ​ 410 ​ 17 4.25 ​ Paycheck protection program ​ ​ — ​ ​ — ​ — ​ ​ ​ — ​ ​ — ​ — ​ ​ ​ 1 ​ ​ — ​ 17.27 ​ Residential ​ 859 ​ ​ 35 ​ 4.12 ​ ​ 905 ​ ​ 35 ​ 3.82 ​ ​ 873 ​ 31 3.55 ​ Consumer ​ 100 ​ ​ 7 ​ 7.14 ​ ​ 97 ​ ​ 7 ​ 6.75 ​ ​ 100 ​ 4 4.41 ​ Total loans (1) ​ 3,051 ​ 165 5.40 ​ ​ 2,976 ​ 151 5.04 ​ ​ 2,724 ​ 107 3.98 ​ Total earning assets ​ 3,677 ​ ​ 191 ​ 5.18 % ​ 3,623 ​ ​ 179 ​ 4.85 % ​ 3,426 ​ 127 3.73 % Cash and due from banks ​ ​ 32 ​ ​ ​ ​ ​ ​ ​ ​ 34 ​ ​ ​ ​ ​ ​ ​ ​ 37 ​ ​ ​ ​ Allowance for credit losses ​ ​ (29) ​ ​ ​ ​ ​ ​ ​ ​ (27) ​ ​ ​ ​ ​ ​ ​ ​ (24) ​ ​ ​ ​ Goodwill and other intangible assets ​ ​ 124 ​ ​ ​ ​ ​ ​ ​ ​ 125 ​ ​ ​ ​ ​ ​ ​ ​ 125 ​ ​ ​ ​ ​ ​ Other assets ​ ​ 182 ​ ​ ​ ​ ​ ​ ​ ​ 179 ​ ​ ​ ​ ​ ​ ​ 183 ​ ​ ​ ​ Total assets ​ $ 3,986 ​ ​ ​ ​ ​ $ 3,934 ​ ​ ​ ​ ​ $ 3,747 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing demand ​ $ 886 ​ $ 12 ​ 1.41 % ​ $ 900 ​ ​ 9 ​ 0.98 % ​ $ 907 ​ $ 1 0.16 % Savings ​ 547 ​ ​ 4 ​ 0.67 ​ ​ 595 ​ ​ 2 ​ 0.39 ​ ​ 658 ​ 1 0.10 ​ Money market ​ 380 ​ ​ 12 ​ 3.02 ​ ​ 407 ​ ​ 10 ​ 2.48 ​ ​ 466 ​ 3 0.63 ​ Time ​ 791 ​ ​ 34 ​ 4.30 ​ ​ 533 ​ ​ 17 ​ 3.19 ​ ​ 366 ​ 2 0.61 ​ Total interest bearing deposits ​ 2,604 ​ 62 2.37 ​ ​ 2,435 ​ 38 1.57 ​ ​ 2,397 ​ 7 0.31 ​ Borrowings ​ 300 ​ ​ 13 ​ 4.40 ​ ​ 401 ​ ​ 18 ​ 4.56 ​ ​ 203 ​ 6 2.71 ​ Total interest bearing liabilities ​ 2,904 ​ 75 2.58 % ​ 2,836 ​ 56 1.99 % ​ 2,600 ​ 13 0.49 % Non-interest bearing demand deposits ​ 571 ​ ​ ​ 619 ​ ​ ​ 679 ​ ​ Other liabilities ​ 65 ​ ​ ​ 67 ​ ​ ​ 69 ​ ​ Total liabilities ​ 3,540 ​ ​ ​ 3,522 ​ ​ ​ 3,348 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total shareholders' equity ​ 446 ​ ​ ​ 412 ​ ​ ​ 399 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities and shareholders' equity ​ $ 3,986 ​ ​ ​ $ 3,934 ​ ​ ​ $ 3,747 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest spread ​ ​ ​ ​ ​ ​ ​ 2.61 % ​ ​ ​ ​ ​ ​ ​ 2.86 % ​ ​ ​ ​ ​ ​ ​ 3.24 % Net interest margin ​ ​ 3.15 ​ ​ ​ 3.29 ​ ​ ​ 3.36 ​ (1) The average balances of loans include non-accrual loans and unamortized deferred fees and costs.
Refer to the Reconciliation of Non-GAAP Financial Measures for additional information. ​ 41 Table of Contents AVERAGE BALANCES AND AVERAGE YIELDS/RATES The following table presents average balances (calculated using a daily average) and average rates and yields on a fully taxable equivalent basis for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2025 ​ 2024 ​ 2023 ​ ​ ​ Average ​ Interest ​ Yield/ ​ Average ​ Interest ​ Yield/ ​ Average ​ Interest ​ Yield/ (in millions, except ratios) ​ ​ ​ Balance ​ ​ ​ (3) ​ ​ ​ ​ Rate (3) ​ Balance ​ ​ ​ (3) ​ ​ ​ ​ Rate (3) ​ ​ ​ Balance ​ ​ ​ (3) ​ ​ ​ ​ Rate (3) Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-earning deposits with other banks ​ $ 48 ​ $ 2 ​ 4.53 % ​ $ 36 ​ ​ 2 ​ 5.54 % ​ $ 37 ​ ​ 2 ​ 5.33 % Available-for-sale debt securities (2)(3) ​ ​ 614 ​ ​ 24 ​ 3.97 ​ ​ ​ 580 ​ ​ 23 ​ 3.94 ​ ​ ​ 594 ​ ​ 25 ​ 3.74 ​ FHLB stock ​ ​ 11 ​ ​ 1 ​ 7.41 ​ ​ ​ 10 ​ ​ 1 ​ 9.82 ​ ​ ​ 16 ​ ​ 1 ​ 8.96 ​ Loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial real estate ​ ​ 1,843 ​ ​ 106 ​ 5.74 ​ ​ ​ 1,626 ​ ​ 91 ​ 5.59 ​ ​ ​ 1,537 ​ ​ 81 ​ 5.27 ​ Commercial and industrial (3) ​ 476 ​ ​ 31 ​ 6.44 ​ ​ 466 ​ ​ 32 ​ 6.75 ​ ​ 437 ​ ​ 28 ​ 6.39 ​ Residential ​ 903 ​ ​ 40 ​ 4.41 ​ ​ 859 ​ ​ 35 ​ 4.12 ​ ​ 905 ​ ​ 35 ​ 3.82 ​ Consumer ​ 115 ​ ​ 8 ​ 7.14 ​ ​ 100 ​ ​ 7 ​ 7.14 ​ ​ 97 ​ ​ 7 ​ 6.75 ​ Total loans (1) ​ 3,337 ​ 185 ​ 5.53 ​ ​ 3,051 ​ 165 5.40 ​ ​ 2,976 ​ 151 5.04 ​ Total earning assets ​ 4,010 ​ ​ 212 ​ 5.28 % ​ 3,677 ​ ​ 191 ​ 5.18 % ​ 3,623 ​ 179 4.85 % Cash and due from banks ​ ​ 35 ​ ​ ​ ​ ​ ​ ​ ​ 32 ​ ​ ​ ​ ​ ​ ​ ​ 34 ​ ​ ​ ​ ​ Allowance for credit losses ​ ​ (31) ​ ​ ​ ​ ​ ​ ​ ​ (29) ​ ​ ​ ​ ​ ​ ​ ​ (27) ​ ​ ​ ​ ​ Goodwill and other intangible assets ​ ​ 136 ​ ​ ​ ​ ​ ​ ​ ​ 124 ​ ​ ​ ​ ​ ​ ​ ​ 125 ​ ​ ​ ​ ​ ​ Other assets ​ ​ 187 ​ ​ ​ ​ ​ ​ ​ ​ 182 ​ ​ ​ ​ ​ ​ ​ 179 ​ ​ ​ ​ ​ Total assets ​ $ 4,337 ​ ​ ​ ​ ​ ​ $ 3,986 ​ ​ ​ ​ ​ ​ $ 3,934 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing demand ​ $ 1,003 ​ $ 14 ​ 1.41 % ​ $ 886 ​ $ 12 ​ 1.41 % ​ $ 900 ​ ​ 9 ​ 0.98 % Savings ​ 588 ​ ​ 4 ​ 0.64 ​ ​ 547 ​ ​ 4 ​ 0.67 ​ ​ 595 ​ ​ 2 ​ 0.39 ​ Money market ​ 425 ​ ​ 11 ​ 2.62 ​ ​ 380 ​ ​ 12 ​ 3.02 ​ ​ 407 ​ ​ 10 ​ 2.48 ​ Time ​ 910 ​ ​ 34 ​ 3.79 ​ ​ 791 ​ ​ 34 ​ 4.30 ​ ​ 533 ​ ​ 17 ​ 3.19 ​ Total interest bearing deposits ​ 2,926 ​ 63 2.17 ​ ​ 2,604 ​ 62 2.37 ​ ​ 2,435 ​ 38 1.57 ​ Borrowings ​ 245 ​ ​ 12 ​ 4.69 ​ ​ 300 ​ ​ 13 ​ 4.40 ​ ​ 401 ​ ​ 18 ​ 4.56 ​ Total interest bearing liabilities ​ 3,171 ​ 75 2.37 % ​ 2,904 ​ 75 2.58 % ​ 2,836 ​ 56 1.99 % Non-interest bearing demand deposits ​ 614 ​ ​ ​ ​ ​ 571 ​ ​ ​ ​ ​ 619 ​ ​ ​ ​ Other liabilities ​ 59 ​ ​ ​ ​ ​ 65 ​ ​ ​ ​ ​ 67 ​ ​ ​ ​ Total liabilities ​ 3,844 ​ ​ ​ ​ ​ 3,540 ​ ​ ​ ​ ​ 3,522 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total shareholders' equity ​ 493 ​ ​ ​ ​ ​ 446 ​ ​ ​ ​ ​ 412 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities and shareholders' equity ​ $ 4,337 ​ ​ ​ ​ ​ $ 3,986 ​ ​ ​ ​ ​ $ 3,934 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest spread ​ ​ ​ ​ ​ ​ ​ 2.91 % ​ ​ ​ ​ ​ ​ ​ 2.61 % ​ ​ ​ ​ ​ ​ ​ 2.86 % Net interest margin ​ ​ ​ ​ 3.41 ​ ​ ​ ​ ​ 3.15 ​ ​ ​ ​ ​ 3.29 ​ (1) The average balances of loans include non-accrual loans and unamortized deferred fees and costs.
The existing cash and cash equivalents (including an interest-bearing deposit at the FRB Boston), securities available for sale and cash flows from operating activities will be sufficient to meet anticipated cash needs for at least the next 12 months.
The existing cash and cash equivalents (including an interest-bearing deposit at the FRB Boston), securities available for sale and cash flows from operating activities will be sufficient to meet anticipated cash needs for at least the next 49 Table of Contents 12 months. Future working capital needs will depend on many factors, including the rate of business and revenue growth.
Future working capital needs will depend on many factors, including the rate of business and revenue growth. 50 Table of Contents To the extent cash and cash equivalents, securities available for sale and cash flows from operating activities are insufficient to fund future activities, the need to raise additional funds through debt arrangements or public or private debt or equity financings may be utilized.
To the extent cash and cash equivalents, securities available for sale and cash flows from operating activities are insufficient to fund future activities, the need to raise additional funds through debt arrangements or public or private debt or equity financings may be utilized.
Total cash dividends paid in 2024 was $1.18 per share of common stock, compared with $1.10 per share of common stock in 2023. The Company and the Bank remained well-capitalized under regulatory guidelines at period end as further described in Note 12 – Shareholders’ Equity and Earnings Per Common Share on the Consolidated Financial Statements.
The Company and the Bank remained well-capitalized under regulatory guidelines at period end as further described in Note 13 – Shareholders’ Equity and Earnings Per Common Share on the Consolidated Financial Statements.
Purchase Obligations In the normal course of conducting our banking and financial services business, and in connection with providing products and services to our customers, a variety of traditional third-party contracts for support services have been entered into.
At December 31, 2025, we had unused borrowing capacity at the FHLB of $259.1 million, unused borrowing capacity at the Federal Reserve of $94.0 million and unused lines of credit totaling $41.0 million. ​ Purchase Obligations In the normal course of conducting our banking and financial services business, and in connection with providing products and services to our customers, a variety of traditional third-party contracts for support services have been entered into.
Interest-earning cash held with other banks totaled $37.9 million at year-end 2024 compared to $52.6 million at year-end 2023 carrying a yield of 5.54% in 2024 versus 5.33% in 2023. ​ Securities Securities totaled $533.3 million at year-end 2024 and $547.4 million at year-end 2023.
Interest-earning deposits held with other banks totaled $35.9 million at year-end 2025 compared to $37.9 million at year-end 2024 carrying a yield of 4.53% in 2025 versus 5.54% in 2024. ​ Available-for-sale debt securities Securities totaled $597.4 million at year-end 2025 and $521.0 million at year-end 2024.
Income Tax Expense Income tax expense was $9.1 million for the year ended December 31, 2024 compared to $12.3 million for the year ended December 31, 2023.
Income Tax Expense Income tax expense was $9.0 million for the year ended December 31, 2025 compared to $9.1 million for the year ended December 31, 2024. The effective tax rate was 19.6% in 2025 compared to 17.26% in 2024.
For each category of interest- earning assets and interest-bearing liabilities, information is provided with respect to changes attributable to (1) changes in rate (change in rate multiplied by prior year volume), (2) changes in volume (change in volume multiplied by prior year rate), and (3) changes in volume/rate (change in rate multiplied by change in volume) have been allocated proportionately based on the absolute value of the change due to the rate and the change due to volume. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 Compared with 2023 ​ 2023 Compared with 2022 ​ ​ Increases (Decreases) due to ​ Increases (Decreases) due to (in thousands) Rate Volume Net Rate Volume Net Interest income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-earning deposits with other banks ​ $ 78 ​ $ (91) ​ $ (13) ​ $ 1,595 ​ $ (369) ​ $ 1,226 Securities available for sale and FHLB stock ​ ​ 929 ​ ​ (812) ​ ​ 117 ​ ​ 5,424 ​ ​ (575) ​ ​ 4,849 Loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial real estate ​ ​ 5,100 ​ ​ 4,724 ​ ​ 9,824 ​ ​ 17,630 ​ ​ 8,110 ​ ​ 25,740 Commercial and industrial ​ 1,698 ​ 1,886 ​ 3,584 ​ 9,360 ​ 1,168 ​ 10,528 Paycheck protection program ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ (223) ​ ​ (223) Residential ​ 2,605 ​ (1,761) ​ 844 ​ 2,376 ​ 1,142 ​ 3,518 Consumer ​ 382 ​ 160 ​ 542 ​ 2,280 ​ (109) ​ 2,171 Total loans ​ 9,785 ​ 5,009 ​ 14,794 ​ 31,646 ​ 10,088 ​ 41,734 Total interest income ​ $ 10,792 ​ $ 4,106 ​ $ 14,898 ​ $ 38,665 ​ $ 9,144 ​ $ 47,809 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense: ​ ​ ​ ​ ​ ​ Deposits: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NOW ​ $ 3,790 ​ $ (135) ​ $ 3,655 ​ $ 7,342 ​ $ (12) ​ $ 7,330 Savings ​ 1,546 ​ (190) ​ 1,356 ​ 1,707 ​ (66) ​ 1,641 Money market ​ 2,059 ​ (663) ​ 1,396 ​ 7,517 ​ (376) ​ 7,141 Time deposits ​ 8,818 ​ 8,239 ​ 17,057 ​ 13,761 ​ 1,015 ​ 14,776 Total deposits ​ 16,213 ​ 7,251 ​ 23,464 ​ 30,327 ​ 561 ​ 30,888 Borrowings ​ (461) ​ (4,625) ​ (5,086) ​ 7,406 ​ 5,368 ​ 12,774 Total interest expense ​ $ 15,752 ​ $ 2,626 ​ $ 18,378 ​ $ 37,733 ​ $ 5,929 ​ $ 43,662 Change in net interest income ​ $ (4,960) ​ $ 1,480 ​ $ (3,480) ​ $ 932 ​ $ 3,215 ​ $ 4,147 ​ 44 Table of Contents NON-GAAP FINANCIAL MEASURES ​ Our accounting and reporting policies conform to accounting principles generally accepted in the United States of America ("GAAP") and the prevailing practices in the financial services industry.
For each category of interest- earning assets and interest-bearing liabilities, information is provided with respect to changes attributable to (1) changes in rate (change in rate multiplied by prior year volume), (2) changes in volume (change in volume multiplied by prior year rate), and (3) changes in volume/rate (change in rate multiplied by change in volume) have been allocated proportionately based on the absolute value of the change due to the rate and the change due to volume. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 Compared with 2024 ​ 2024 Compared with 2023 ​ ​ Increases (Decreases) due to ​ Increases (Decreases) due to (in thousands) ​ ​ ​ Rate ​ ​ ​ Volume ​ ​ ​ Net ​ ​ ​ Rate ​ ​ ​ Volume ​ ​ ​ Net Interest income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-earning deposits with other banks ​ $ (482) ​ $ 659 ​ $ 177 ​ $ 78 ​ $ (91) ​ $ (13) Available-for-sale debt securities ​ ​ 181 ​ ​ 1,358 ​ ​ 1,539 ​ ​ 1,134 ​ ​ (558) ​ ​ 576 Federal Home Loan Bank Stock ​ ​ (261) ​ ​ 104 ​ ​ (157) ​ ​ 84 ​ ​ (543) ​ ​ (459) Loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial real estate ​ ​ 2,860 ​ ​ 12,081 ​ ​ 14,941 ​ ​ 5,100 ​ ​ 4,724 ​ ​ 9,824 Commercial and industrial ​ (1,496) ​ 630 ​ (866) ​ 1,698 ​ 1,886 ​ 3,584 Residential ​ 2,602 ​ 1,832 ​ 4,434 ​ 2,605 ​ (1,761) ​ 844 Consumer ​ — ​ 1,119 ​ 1,119 ​ 382 ​ 160 ​ 542 Total loans ​ 3,966 ​ 15,662 ​ 19,628 ​ 9,785 ​ 5,009 ​ 14,794 Total interest income ​ $ 3,404 ​ $ 17,783 ​ $ 21,187 ​ $ 11,081 ​ $ 3,817 ​ $ 14,898 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deposits: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NOW ​ $ 24 ​ $ 1,644 ​ $ 1,668 ​ $ 3,790 ​ $ (135) ​ $ 3,655 Savings ​ (179) ​ 280 ​ 101 ​ 1,546 ​ (190) ​ 1,356 Money market ​ (1,690) ​ 1,364 ​ (326) ​ 2,059 ​ (663) ​ 1,396 Time deposits ​ (4,710) ​ 5,097 ​ 387 ​ 8,818 ​ 8,239 ​ 17,057 Total deposits ​ (6,555) ​ 8,385 ​ 1,830 ​ 16,213 ​ 7,251 ​ 23,464 Borrowings ​ 709 ​ (2,382) ​ (1,673) ​ (461) ​ (4,625) ​ (5,086) Total interest expense ​ $ (5,846) ​ $ 6,003 ​ $ 157 ​ $ 15,752 ​ $ 2,626 ​ $ 18,378 Change in net interest income ​ $ 9,250 ​ $ 11,780 ​ $ 21,030 ​ $ (4,671) ​ $ 1,191 ​ $ (3,480) ​ 43 Table of Contents NON-GAAP FINANCIAL MEASURES ​ Our accounting and reporting policies conform to accounting principles generally accepted in the United States of America ("GAAP") and the prevailing practices in the financial services industry.
(5) Efficiency ratio is computed by using adjusted non-interest expense net of franchise taxes and intangible amortization divided by adjusted revenue tax effected for tax-advantaged assets. ​ 47 Table of Contents COMPARISON OF FINANCIAL CONDITION AT DECEMBER 31, 2024 AND 2023 Cash and cash equivalents Total cash and cash equivalents at December 31, 2024 were $72.2 million, compared to $94.8 million at December 31, 2023.
(5) Efficiency ratio is computed by using adjusted non-interest expense net of franchise taxes and intangible amortization divided by adjusted revenue tax effected for tax-advantaged assets.
During 2024 and 2023, the Company declared and distributed regular cash dividends on its common stock in the aggregate amounts of $17.8 million compared to $16.6 million, respectively. The Company’s 2024 dividend payout ratio amounted to 42%, compared with 37% in 2023.
The total consideration paid by the Company was $39.2 million and in total the Company issued 1.4 million shares of its common stock. ​ During 2025 and 2024, the Company declared and distributed regular cash dividends on its common stock in the aggregate amounts of $20.4 million and $17.8 million, respectively.
Book value per share was $30.00 as of December 31, 2024 compared with $28.48 at December 31, 2023. Equity included securities adjustments, net of tax, totaling a $47.7 million loss at the end of 2024 compared to a $47.6 million loss at year-end 2023.
Equity Total equity was $532.5 million at year-end 2025, compared with $458.4 million at year-end 2024. Book value per share was $31.88 as of December 31, 2025 compared with $30.00 at December 31, 2024.
The yield on earning assets totaled 5.18% compared at December 31, 2024 compared to 3.73% at December 31, 2023. The yield on loans was 5.40% in 2024 and 5.04% in 2023. Costs of interest-bearing liabilities increased in 2024 to 2.58% from 1.99% in 2023 due to increased deposit rates and market competition.
The yield on earning assets totaled 5.28% at December 31, 2025 compared to 5.18% at December 31, 2024. The yield on loans was 5.53% in 2025 and 5.40% in 2024 primarily due to the acquisition of $413.4 million loans.
Unrealized losses stabilized in 2024 due to changes in the long-term treasury yield curve. The weighted average yield of the securities portfolio was 4.03% as of December 31, 2024 compared to 3.88% at year-end 2023.
Fair value adjustments decreased the security portfolio by $47.5 million in 2025 compared to a $62.3 million unrealized loss in 2024. The weighted average yield of the securities portfolio was 3.97% as of December 31, 2025 compared to 3.94% at year-end 2024.
Non-Interest Income Non-interest income in 2024 was $36.9 million compared to $35.1 million in 2023. Trust management fees were $15.7 million in 2024 compared to $14.3 million in 2023 due to higher market valuation of assets under management (“AUM”) throughout the year.
Trust management fees were $16.1 million in 2025 compared to $15.7 million in 2024 due to higher assets under management of $3.0 billion at year-end 2025 compared to $2.8 billion at year-end 2024. Customer service fees increased 8% to $16.0 million in 2025 from $14.8 million in 2024 driven by increased deposit balances due to the Woodsville acquisition.
At the end of 2024, our securities portfolio had an average life of 9 years with an effective duration of 5 years for both periods respectively. All securities remain classified as available for sale to provide flexibility in loan funding and management of our cost of funds. ​ Loans Loans increased by $148.1 million from year-end 2023 or 5% annualized.
All securities remain classified as available for sale to provide flexibility in loan funding and management of our cost of funds. ​ Federal Home Loan Bank stock FHLB Stock was $11.3 million at year-end 2025, compared to $12.2 million at year-end 2024.
These paydowns were partially offset by an increase in FHLB advances of $10.3 million to $243.0 million at December 31, 2024 compared to $233.0 million at December 31, 2023. Derivative Financial Instruments and Other Liabilities Other liabilities totaled $66.6 million at the end of 2024 compared to $66.2 million as of December 31, 2023.
Subordinated borrowings increased $12.2 million primarily due to $11.2 million of subordinated borrowings from the Woodsville acquisition. ​ Derivative Financial Instruments and Other Liabilities Other liabilities totaled $60.4 million at December 31, 2025 compared to $66.6 million as of December 31, 2024.
The reserve for unfunded commitments declined $775 thousand at the end of 2024 to $3.1 million compared to $3.9 million at December 31, 2023, which are also recorded in other liabilities. Equity Total equity was $458.4 million at year-end 2024, compared with $432.1 million at year-end 2023.
The decrease was primarily driven by a $10.0 million reduction in the fair value of customer loan swaps, partially offset by increased unpaid services and $2.6 million in unearned income related to contract negotiations from the Woodsville acquisition.The reserve for unfunded commitments increased $796 thousand at the end of 2025 to $3.8 million compared to $3.1 million at December 31, 2024, which are also recorded in other liabilities.
The growth was primarily in real estate and rental and leasing, and partially in finance and insurance industries. Total commercial loans were $2.1 billion, growing 9% annualized in 2024 and 6% in 2023 which was driven mostly from new relationships primarily to commercial borrowers.
Loan growth was driven by the $413.4 million in loans acquired from Woodsville. Total commercial loans in 2025 were $2.4 billion, growing 6% on an annualized basis, excluding the impact of acquired loans, compared to $2.1 billion at year-end 2024. Commercial growth included $690.9 million in originations during the year, partially offset by payoffs and paydowns.
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ANNUAL PERFORMANCE SUMMARY Earnings (For year ended December 31, 2024 compared to the same period of 2023) ​ ● Net income was $43.5 million compared to $44.9, a decrease of 3%, driven primarily due to higher net interest expense as deposits repriced to higher rates.
Added
ANNUAL PERFORMANCE OVERVIEW Financial Highlights (For the year ended December 31, 2025 compared to the same period of 2024) ​ ● $36.9 million net income compared to $43.5 million ● $2.31 diluted earnings per share compared to $2.84 ● 3.41% net interest margin compared to 3.15% ● 59.23 efficiency ratio compared to 61.83% ● $4.7 billion total assets compared to $4.1 billion ● 6% organic annualized commercial loan growth ​ Acquisition of Guaranty Bancorp, Inc.
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Diluted earnings per share was $2.84, compared to $2.95 for the previous year. ​ ● Return on assets was 1.09% compared to 1.14%. Return on equity was 9.75% compared to 10.88%.
Added
On August 1, 2025, we completed our acquisition of Guaranty Bancorp, Inc., the parent company of Woodsville Guaranty Savings Bank (“Woodsville”).
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Both ratios include higher cost of funds and relatively flat unrealized losses on securities as noted below under the “Financial Position” section. ​ ● Net interest income was $113.8 million, compared to $117.7 million in the previous year. Net interest margin was 3.15% compared to 3.29% for 2023.
Added
After purchase accounting fair value adjustments, the acquisition added $658.1 million of total assets, including $413.4 million of loans, as well as $641.2 million of total liabilities, primarily consisting of $531.3 million in deposits and $109.2 million in borrowings and subordinated debt.
Removed
The decrease is primarily due to the repricing of deposits and continued loan growth offset by higher borrowing costs and cost of interest-bearing liabilities. ​ ● The provision for credit losses was an expense of $2.1 million in 2024 compared to $2.9 million in 2023. ​ ● Non-interest income was $36.9 million, compared to $35.1 million primarily due to $1.4 million higher Trust and investment management fee income driven by increased assets under management and improved market performance . ​ ● Non-interest expense was $96.0 million versus $92.7 million.
Added
(6) The loss on available-for-sale debt securities includes a $4.5 million loss on corporate debt securities and $549 thousand on a matured debt security. ​ 46 Table of Contents COMPARISON OF FINANCIAL CONDITION AT DECEMBER 31, 2025 AND 2024 Cash and cash equivalents Total cash and cash equivalents at December 31, 2025 were $80.8 million, compared to $72.2 million at December 31, 2024.
Removed
Salaries and benefits expense increased $2.3 million driven by cost of living increases, higher commissions and incentive costs.
Added
The increase is primarily due to $115.0 million in securities from the Woodsville acquisition. During 2025, security purchases totaled $91.0 million and were offset by $43.6 million in sales and $99.8 million of maturities, calls and pay-downs of amortizing securities. The sales primarily consisted of $40.8 million of lower yielding securities from the acquisition of Woodsville.
Removed
Other expenses increased $1.7 million driven by increased Debit, ATM and credit card expenses, software costs and adjustments in cash surrender values on a split dollar policy. ​ ● Efficiency ratio was 61.83% compared to 58.47% at the end of 2023. ​ 39 Table of Contents Financial Position (For year ended December 31, 2024 compared to the same period of 2023) ​ ● Total assets increased $86.1 million to $4.1 billion mainly due to loan growth offset by available for sale security pay-downs. ​ ● Cash and cash equivalents were $72.2 million compared to $94.8 million in the previous year primarily due to loan growth and paydown of borrowings. ​ ● Total securities were $533.3 million, or 13% of total assets, compared to $547.4 million, or 14% of total assets.
Added
At the end of 2025, our securities portfolio had an average life of 7.1 years with an effective duration of 5.2 years and an average life of 8.5 and an effective duration of 4.8 at year-end 2024.
Removed
Net unrealized losses were flat at $62.3 million, compared with a gain of $62.4 million in the previous period, or 12% and 11% of gross securities for the respective periods. All securities are classified as available for sale preserving capital flexibility. ​ ● Total loans grew 5% annualized year over year.
Added
Activity during 2025 consisted of $4.4 million acquired from Woodsville and purchases of $11.7 million offset by redemptions of $17.0 million due to paydowns of wholesale borrowings. ​ Loans held for sale Loans held for sale increased to $5.3 million at year-end 2025 compared to $1.2 million at year-end 2024.
Removed
The increase was the net result of the strategy to grow commercial construction and commercial real estate owner-occupied segments. ​ ● The ratio of the allowance for credit losses to total loans was 0.91%, increasing from 0.94%, reflecting updated economic forecasting, especially in the national unemployment figures and decreases in specific reserves, offset with loan portfolio growth.
Added
The increase was driven by the interest rate environment and demand for wholesale loans.
Removed
Net charge-offs were 0.01% of average loans, a nominal increase compared to last year. ​ ● Deposit balances increased 4% annualized due to consumers’ migration to money market accounts and higher yielding time deposits. ​ ● Borrowings decreased to $40.9 million primarily due to excess cash available generated from operations used to pay off $20 million in subordinated debt and $30 million, net in Bank Term Funding Program borrowings with the FRB offset by a $10 million increase in FHLB advances. ​ ● Total book value per share was $30.00 compared to $28.48.
Added
During 2025 we sold $52.4 million of loans held for sale resulting in a net gain of $724 thousand, during 2024 we sold $54.9 million of loans held for sale resulting in a net gain of $663 thousand. ​ Loans Loans were $3.6 billion at year-end 2025, compared to $3.1 billion at year-end 2024.
Removed
During 2024, security purchases totaled $53.5 million and were offset by $64.4 million of maturities, calls and pay-downs of amortizing securities. There were $21.4 million of purchases and $21.9 million in sales of FHLB stock during the year. Fair value adjustments decreased the security portfolio by $62.3 million in 2024 compared to a $62.4 million unrealized loss in 2023.
Added
Total residential loans increased to $1.1 billion at year-end 2025 from $888.3 million at year-end 2024, primarily as a result of $248.5 million in acquired loans.
Removed
Total residential loans decreased 7% annualized or $63.4 million from year-end 2023, due to lower demand for prevailing mortgage rates and the continued strategy to sell production to the secondary market. Home Equity lines increased 7% or $6.5 million from year-end 2023 due to record available home equity levels and increased demand for credit.
Added
Consumer loans were $128.8 million at year-end 2025 compared to $102.2 million at year-end 2024 and included $21.4 million in loans acquired from Woodsville. ​ Allowance for Credit Losses on Loans The allowance for credit losses on loans was $34.1 million at December 31, 2025 compared to $28.7 million as of December 31, 2024.
Removed
By borrowing some of the value of a home, homeowners are able to make home improvements or consolidate, pay down or pay off higher-interest debts. ​ Allowance for Credit Losses The allowance for credit losses on loans was $28.7 million at December 31, 2024 compared to $28.1 million as of December 31, 2023.
Added
The increase was primarily driven by $4.0 million in reserves on non-PCD loans and $1.6 million in reserves on PCD loans from the Woodsville acquisition. Net charge-offs were $950 thousand in 2025 compared to $353 thousand in 2024 driven by the resolution of three commercial and industrial loans.
Removed
The increase was primarily due to commercial real estate prices, and loan portfolio growth. Net charge offs to average loans were 0.01% in 2024 compared to 0.02% in 2023.
Added
The net charge-offs to average loans ratio remains strong at 0.03% in 2025 compared to 0.01% in 2024. ​ Premises and Equipment Premises and equipment increased $7.0 million at December 31, 2025 to $58.2 million compared to $51.2 million at December 31, 2024, driven by $6.6 million in acquired assets from the Woodsville acquisition.
Removed
Non-accruing loans increased $1.4 million to $7.0 million, or 0.22% of total loans at the end of 2024 from $5.5 million or 0.18% of total loans at year-end 2023 driven by increases in commercial and industrial, commercial real estate owner occupied and home equity loans.
Added
We sold $406 thousand of premises held for sale in 2025 that resulted in a gain of $189 thousand.
Removed
Net charge-offs decreased to $353 thousand in 2024 from $626 thousand in 2023 compared driven by the resolution of one non-accruing C&I loan. ​ The allowance for credit losses on available for sale investments increased to $568 thousand at December 31, 2024, driven by two corporate securities with a book value of $9.0 million, unrealized non-credit losses of $2.7 million and unrealized credit losses of $568 thousand.
Added
The gain from premises held for sale was offset by the disposal of certain acquired assets resulting in a loss of $446 thousand for a net loss on premises and equipment of $257 thousand. ​ ​ ​ 47 Table of Contents Goodwill and Other Intangibles Goodwill increased to $141.8 million in 2025 compared to $119.5 million at year-end 2024.
Removed
There was no ACL on available for sale securities at December 31, 2023. ​ Premises and Equipment Premises and equipment increased $2.9 million at December 31, 2024 to $51.2 million compared to $48.3 million at December 31, 2023, driven by $10.5 million in additions of $4.6 million in building and land improvement, $3.5 million in aircraft and $2.3 million in furniture and equipment.
Added
During the year the Company acquired Woodsville which led to the increase in goodwill of $22.3 million.
Removed
The additional expenses were largely attributed to facilities renovations and improvements at our 135 High Street location in Ellsworth, Maine and our disposal of our Avery Lane location earlier in the year offset by $4.2 million in depreciation expense. ​ Other Assets Total other assets increased $356 thousand to $307.7 million at December 31, 2024 from $307.3 million as of December 31, 2023.
Added
Other intangibles increased $12.5 million in 2025 driven by $14.0 million from the acquisition partially offset by amortization of $1.5 million. ​ Other Assets Total other assets increased $16.6 million to $200.8 million at December 31, 2025 from $184.2 million as of December 31, 2024.
Removed
The increase is attributed to a $1.8 million increase in cash surrender value of bank owned life insurance and deferred tax assets, net, of $351 thousand million as of December 31, 2024 compared to 2023 offset by intangible asset amortization of $931 thousand and fair value adjustments in derivative assets attributed to a maturity and the interest rate environment. ​ 48 Table of Contents Deposits Total deposits increased $126.5 million to $3.3 billion at the end of 2024 compared to $3.1 billion at the end of 2023.
Added
The increase is driven by the cash surrender value of bank-owned life insurance income which increased $14.4 million primarily due to the acquisition of Woodsville.
Removed
Non-maturity deposits remained relatively flat decreasing $3.5 million in 2024. 10,135 non-maturity deposit accounts were opened with consumer customers while 1,479 non-maturity deposit accounts were opened with business customers in 2024. Time deposits increased $130.0 million to $830.3 million at year-end 2024 versus $700.3 million in 2023. Our retail teams opened 8,787 new time deposit accounts in 2024.
Added
Deferred tax assets increased $6.6 million and was offset in part by other assets decreasing $4.4 million. ​ Deposits Total deposits increased $553.6 million to $3.8 billion at the end of 2025 compared to $3.3 billion at the end of 2024. The overall increase in deposits is due to the acquisition of $531.3 million from Woodsville.
Removed
Retail time deposits increased $62.2 million as customers moved funds from non-maturity deposits into higher yielding alternatives. Our deposit composition at year-end 2024 and 2023 was 47% commercial customers and 53% consumer customers. Brokered deposits increased $36.4 million and comprised 8% of total deposits at December 31, 2024 compared to 7% of total deposits at December 31, 2023.
Added
Non-maturity deposits, excluding acquired deposits, increased $38.9 million during 2025 primarily due to interest-bearing demand deposits. Excluding the impact of acquired deposits, time deposits decreased $16.6 million during the year primarily due to $86.0 million in brokered deposit maturities.
Removed
Borrowings Total borrowings decreased $40.9 million to $290.6 million at December 31, 2024 compared to $331.5 million as of December 31, 2023 primarily due to excess cash available generated from operations.
Added
Borrowings Total borrowings decreased $21.0 million to $269.6 million at December 31, 2025 compared to $290.6 million as of December 31, 2024. Acquired FHLB borrowings totaled $98.0 million, of which $15.0 million of advances were paid off shortly after the acquisition date.
Removed
The Bank Term Funding Program (the “BTFP”) was an additional source of liquidity with favorable prepayment terms of which during the fourth quarter of 2024, we prepaid our outstanding BTFP advance of $30 million, net of current activity which was held at a fixed rate of 4.76%.
Added
Senior borrowings decreased $33.2 million during the year as loan paydowns, deposits and proceeds from the investment portfolio were utilized to decrease borrowing levels.
Removed
Our Subordinated Note Purchase Agreement had a fixed interest rate of 4.63% through December 1, 2024 payable semi-annually in arrears. From December 1, 2024 and thereafter the interest rate shall be reset quarterly to an interest rate per annum equal to the then current three-month Secured Overnight Financing Rate (“SOFR”) plus 3.27%.
Added
Upon the acquisition of Woodsville each share of Guaranty’s common stock was converted into the right to receive 1.85 shares of the Company’s common stock, with cash paid in lieu of any fractional shares.
Removed
Beginning with the interest payment date of December 1, 2024, and on any scheduled payment date thereafter, we had the option to redeem the Notes, in whole or in part upon prior approval of the Federal Reserve. During the fourth quarter of 2024 we obtained approval from the Federal Reserve and redeemed $20.0 million of the outstanding subordinated notes.
Added
The Company’s 2025 dividend payout ratio amounted to 44%, compared with 42% in 2024. Total cash dividends paid increased 7% in 2025 and was $1.26 per share of common stock, compared with $1.18 per share of common stock in 2024.
Removed
The $447 thousand increase was primarily driven by a $1.9 million increase in lease obligations driven by extensions and $1.3 million in higher brokered CD interest payable offset by a $1.4 million decrease in fair value of loan hedge liabilities and $1.2 million in unpaid services payable due to year over year lower renovation accruals and paydowns of outstanding commitments.
Added
Total loan yield growth was partially offset by a decrease in the commercial and 48 Table of Contents industrial yield to 6.44% for 2025 from 6.75% in 2024 driven by the decrease in rates of adjustable-rate loans.
Removed
Interest expense on borrowings decreased $5.1 million in 2024 compared to 2023 driven by a decrease in 49 Table of Contents average borrowings by $101 million and at an average rate of 4.40% from 4.56%, respectively, reflecting lower interest rates and decreased average borrowings.
Added
Costs of interest-bearing deposits decreased in 2025 to 2.17% from 2.37% in 2024 while borrowing costs increased to 4.69% in 2025 from 4.40% in 2024. Provision for Credit Losses The provision for credit losses on loans was $4.6 million at December 31, 2025 compared to $955 thousand at December 31, 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

12 edited+1 added−5 removed6 unchanged
Biggest changeAs of December 31, 2024, interest rate sensitivity modeling results indicate that the Bank’s balance sheet was asset sensitive over the one- and two-year horizons. 53 Table of Contents The following table presents the changes in sensitivities on net interest income for the periods ended December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in Interest Rates-Basis Points (Rate Ramp) ​ 1 - 12 Months ​ ​ 13 - 24 Months (in thousands, except ratios) ​ $ Change ​ % Change ​ ​ $ Change ​ % Change At December 31, 2024 ​ ​ ​ ​ -200 ​ $ (6,422) ​ (5.3) % ​ $ (14,688) ​ (11.1) % -100 ​ ​ (3,511) ​ (2.9) ​ ​ ​ (7,321) ​ (5.5) ​ +100 ​ ​ 2,597 ​ 2.0 ​ ​ ​ 5,625 ​ 4.2 ​ +200 ​ 5,127 ​ 4.2 ​ ​ ​ 10,880 ​ 8.2 ​ At December 31, 2023 ​ ​ ​ ​ ​ ​ -200 ​ $ (6,229) ​ (5.0) % ​ $ (12,776) ​ (9.7) % -100 ​ (3,310) (2.7) ​ ​ ​ (6,468) (4.9) ​ +100 ​ ​ 2,421 ​ 2.0 ​ ​ ​ 4,818 ​ 3.7 ​ +200 ​ 4,938 4.0 ​ ​ 9,143 6.9 ​ ​ Assuming short-term and long-term interest rates decline 200 basis points from current levels (i.e., a parallel yield curve shift) over the next twelve months and the Bank’s balance sheet structure and size remain at current levels, management believes net interest income will deteriorate over the one year horizon while deteriorating further from that level over the two-year horizon.
Biggest changeChanges in net interest income based upon these simulations are measured against the flat interest rate scenario. ​ As of December 31, 2025, interest rate sensitivity modeling results indicate that the Bank’s balance sheet was asset sensitive over the one- and two-year horizons. ​ 52 Table of Contents The following table presents the changes in sensitivities on net interest income for the periods ended December 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in Interest Rates-Basis Points (Rate Ramp) ​ 1 - 12 Months ​ ​ 13 - 24 Months (in thousands, except ratios) ​ $ Change ​ % Change ​ ​ $ Change ​ % Change At December 31, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ -200 ​ $ (8,358) ​ (5.1) % ​ $ (20,741) ​ (12.0) % -100 ​ ​ (4,412) ​ (2.7) ​ ​ ​ (10,179) ​ (5.9) ​ +100 ​ ​ 4,579 ​ 2.8 ​ ​ ​ 9,053 ​ 5.3 ​ +200 ​ 8,607 ​ 5.3 ​ ​ ​ 17,446 ​ 10.1 ​ At December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ -200 ​ $ (6,422) ​ (5.3) % ​ $ (14,688) ​ (11.1) % -100 ​ (3,511) (2.9) ​ ​ ​ (7,321) (5.5) ​ +100 ​ ​ 2,597 ​ 2.1 ​ ​ ​ 5,625 ​ 4.2 ​ +200 ​ 5,127 4.2 ​ ​ 10,880 8.2 ​ ​ Assuming short-term and long-term interest rates decline 200 basis points from current levels (i.e., a parallel yield curve shift) over the next twelve months and the Bank’s balance sheet structure and size remain at current levels, management believes net interest income will deteriorate over the one year horizon while deteriorating further from that level over the two-year horizon. ​ Assuming short-term and long-term interest rates increase 200 basis points from current levels (i.e., a parallel yield curve shift) over the next twelve months and the Bank’s balance sheet structure and size remain at current levels, management believes net interest income will improve over the one year horizon while improving further from that level over the two-year horizon. ​ As compared to December 31, 2024, asset sensitivity in year one is higher in up rate scenarios but slightly lower in down rate scenarios, while in year two, sensitives are higher in both up and down rate scenarios. ​ The preceding sensitivity analysis does not represent a forecast and should not be relied upon as being indicative of expected operating results.
ALCO meets regularly to review balance sheet structure, formulate strategies in light of current and expected economic conditions, adjust product prices as necessary, implement policy, monitor liquidity, and review performance against guidelines established to control exposure to the various types of inherent risk. ​ Interest Rate Risk: Interest rate risk can be defined as an exposure to movement in interest rates that could have an adverse impact on the net interest income.
ALCO meets regularly to review balance sheet structure, formulate strategies in light of current and expected economic conditions, adjust product prices as necessary, implement policy, monitor liquidity, and review performance against guidelines established to control exposure to the various types of inherent risk. ​ Interest Rate Risk Interest rate risk can be defined as an exposure to movement in interest rates that could have an adverse impact on the Bank's net interest income.
The sensitivity analysis also does not reflect additional actions that the Bank’s senior executive team and Board of Directors might take in responding to or anticipating changes in interest rates, and the anticipated impact on the Bank’s net interest income. ​ 54 Table of Contents
The sensitivity analysis also does not reflect additional actions that the Bank’s Senior Executive Team and Board of Directors might take in responding to or anticipating changes in interest rates, and the anticipated impact on the Bank’s net interest income. ​ 53 Table of Contents
Other types of market risk do not arise in the normal course of our business activities. ​ The responsibility for interest rate risk management oversight is the function of the Bank’s Asset and Liability Committee (“ALCO”), chaired by the Chief Financial Officer and composed of various members of senior management.
Other types of market risk do not arise in the normal course of our business activities. ​ The responsibility for interest rate risk management oversight is the function of the Bank’s Asset and Liability Committee, or ALCO, chaired by the Bank’s Chief Financial Officer and composed of various members of the Bank’s senior management.
The objectives in managing the balance sheet are to preserve the sensitivity of net interest income to actual or potential changes in interest rates, and to enhance profitability through strategies that promote sufficient reward for understood and controlled risk. ​ 52 Table of Contents The interest rate risk measurement and management techniques incorporate the re-pricing and cash flow attributes of balance sheet and off-balance sheet instruments as each relate to current and potential changes in interest rates.
The objectives in managing the Bank's balance sheet are to preserve the sensitivity of net interest income to actual or potential changes in interest rates, and to enhance profitability through strategies that promote sufficient reward for understood and controlled risk. ​ The Bank’s interest rate risk measurement and management techniques incorporate the re-pricing and cash flow attributes of balance sheet and off-balance sheet instruments as each relate to current and potential changes in interest rates.
Interest rate risk arises from the imbalance in the re-pricing, maturity and/or cash flow characteristics of assets and liabilities. Management’s objectives are to measure, monitor and develop strategies in response to the interest rate risk profile inherent in the Bank’s balance sheet.
Interest rate risk arises from the imbalance in the re-pricing, maturity and/or cash flow 51 Table of Contents characteristics of assets and liabilities. Management’s objectives are to measure, monitor and develop strategies in response to the interest rate risk profile inherent in the Bank’s balance sheet.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Market Risk Market risk is the risk of loss in a financial instrument arising from adverse changes in market rates/prices, such as interest rates, foreign currency exchange rates, commodity prices and equity prices. Interest rate risk is the most significant market risk affecting the Company.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Market Risk Market risk is the risk of loss in a financial instrument arising from adverse changes in market rates/prices, such as interest rates, foreign currency exchange rates, commodity prices and equity prices. The most significant market risk that affects us is interest rate risk.
The level of interest rate risk, measured in terms of the potential future effect on net interest income, is determined through the use of modeling and other techniques under multiple interest rate scenarios. Interest rate risk is evaluated in depth on a quarterly basis and reviewed by ALCO and the Board of Directors.
The level of interest rate risk, measured in terms of the potential future effect on net interest income, is determined through the use of modeling and other techniques under multiple interest rate scenarios.
The interest rate risk sensitivity model requires that assets and liabilities be broken down into components as to fixed, variable, and adjustable interest rates, as well as other homogeneous groupings, which are segregated as to maturity and type of instrument.
Interest rate risk is measured in terms of potential changes in net interest income based upon shifts in the yield curve. ​ The interest rate risk sensitivity model requires that assets and liabilities be broken down into components as to fixed, variable, and adjustable interest rates, as well as other homogeneous groupings, which are segregated as to maturity and type of instrument.
As market conditions vary from those assumed in the sensitivity analysis, actual results may also differ due to: prepayment and refinancing levels deviating from those assumed; the impact of interest rate changes, caps or floors on adjustable rate assets; the potential effect of changing debt service levels on customers with adjustable rate loans; depositor early withdrawals and product preference changes; and other such variables.
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. ​ As market conditions vary from those assumed in the sensitivity analysis, actual results may also differ due to: prepayment and refinancing levels deviating from those assumed; the impact of interest rate changes, caps or floors on adjustable rate assets; the potential effect of changing debt service levels on customers with adjustable rate loans; depositor early withdrawals and product preference changes; and other such variables.
Interest Rate Sensitivity Modeling: The Bank utilizes an interest rate risk model widely recognized in the financial industry to monitor and measure interest rate risk. The model simulates the behavior of interest income and expense for all balance sheet and off-balance sheet instruments, under different interest rate scenarios together with a dynamic future balance sheet.
The model simulates the behavior of interest income and expense for all balance sheet and off-balance sheet instruments, under different interest rate scenarios together with a dynamic future balance sheet.
The Asset Liability Management Policy, approved annually by the Bank’s Board of Directors, establishes interest rate risk limits in terms of variability of net interest income under rising, flat, and decreasing rate scenarios. It is the role of the ALCO to evaluate the overall risk profile and to determine actions to maintain and achieve a posture consistent with policy guidelines.
Interest rate risk is evaluated in depth on a quarterly basis and reviewed by ALCO and the Bank’s Board of Directors. ​ The Bank's Asset Liability Management Policy, approved annually by the Bank’s Board of Directors, establishes interest rate risk limits in terms of variability of net interest income under rising, flat, and decreasing rate scenarios.
Removed
Interest rate risk is measured in terms of potential changes in net interest income based upon shifts in the yield curve.
Added
It is the role of the ALCO to evaluate the overall risk profile and to determine actions to maintain and achieve a posture consistent with policy guidelines. ​ Interest Rate Sensitivity Modeling: The Bank utilizes an interest rate risk model widely recognized in the financial industry to monitor and measure interest rate risk.
Removed
Changes in net interest income based upon these simulations are measured against the flat interest rate scenario.
Removed
Assuming short-term and long-term interest rates increase 200 basis points from current levels (i.e., a parallel yield curve shift) over the next twelve months and the Bank’s balance sheet structure and size remain at current levels, management believes net interest income will improve over the one year horizon while improving further from that level over the two-year horizon.
Removed
As compared to December 31, 2023, asset sensitivity has increased in both year one and year two. The preceding sensitivity analysis does not represent a forecast and should not be relied upon as being indicative of expected operating results.
Removed
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.

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