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What changed in CB Financial Services, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of CB Financial Services, Inc.'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.

+275 added−288 removedSource: 10-K (2026-03-13) vs 10-K (2025-03-19)

Top changes in CB Financial Services, Inc.'s 2025 10-K

275 paragraphs added · 288 removed · 237 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

101 edited+10 added−8 removed149 unchanged
Biggest changeThe components of supplementary capital include cumulative preferred stock, long-term perpetual preferred stock, mandatory convertible securities, subordinated debt and intermediate preferred stock, the allowance for loan losses limited to a maximum of 1.25% of risk-weighted assets and up to 45% of net unrealized gains on available-for-sale securities with readily determinable fair market values.
Biggest changeTier 2 capital is comprised of capital instruments and related surplus, meeting specified requirements, and may include cumulative preferred stock and long-term perpetual preferred stock, mandatory convertible securities, intermediate preferred stock and subordinated debt. Also included in Tier 2 capital is the allowance for loan and lease losses limited to a maximum of 1.25% of risk-weighted assets.
Empowering our experienced, high quality employees to provide superior customer service in all aspects of our business which is further supported by the use of technology and a wide array of modern financial products can lead to stronger customer relationships, enhance fee revenue and allow the Bank to be the bank of choice across our footprint for residents and small and medium sized businesses. • Evolve toward more electronic/digital products and processes driving greater efficiency and expand our brand awareness in our market.
Empowering our experienced, high quality employees to provide superior customer service in all aspects of our business which is further supported by the use of technology and a wide array of modern financial products can lead to stronger customer relationships, enhance fee revenue and allow the Bank to be the bank of choice across our footprint for residents and small and medium sized businesses. 5 • Evolve toward more electronic/digital products and processes driving greater efficiency and expand our brand awareness in our market.
An institution that has total risk-based capital less than 6%, a Tier 1 core risk-based capital ratio of less than 3% or a leverage ratio that is less than 3% is considered to be “significantly undercapitalized.” An institution that has a tangible capital to assets ratio equal to or less than 2% is deemed to be “critically undercapitalized.” Generally, the Pennsylvania Department of Banking and Securities (the “Pennsylvania Department of Banking” or “PDBS”) is required to appoint a receiver or conservator for a state-chartered bank that is “critically undercapitalized” within specific time frames.
An institution that has total risk-based capital less than 6%, a Tier 1 core risk-based capital ratio of less than 3% or a leverage ratio that is less than 3% is considered to be “significantly undercapitalized.” An institution that has a tangible capital to assets ratio equal to or less than 2% is deemed to be “critically undercapitalized.” 16 Generally, the Pennsylvania Department of Banking and Securities (the “Pennsylvania Department of Banking” or “PDBS”) is required to appoint a receiver or conservator for a state-chartered bank that is “critically undercapitalized” within specific time frames.
We 11 also invest in a limited amount of special revenue municipal bonds, which are used to fund projects that will eventually create revenue directly, such as a toll road or lease payments for a new building. Mortgage-Backed Securities. We invest in MBS and CMO securities insured or guaranteed by the United States government or government-sponsored enterprises.
We also invest in a limited amount of special revenue municipal bonds, which are used to fund projects that will eventually create revenue directly, such as a toll road or lease payments for a new building. Mortgage-Backed Securities. We invest in MBS and CMO securities insured or guaranteed by the United States government or government-sponsored enterprises.
Any change in such regulation, whether by the Pennsylvania Department of Banking and Securities, the FDIC, the Federal Reserve Board or Congress could have a material impact on the operations of the Bank. 13 Set forth below is a brief description of material regulatory requirements that are or will be applicable to CB Financial Services, Inc., and Community Bank.
Any change in such regulation, whether by the Pennsylvania Department of Banking and Securities, the FDIC, the Federal Reserve Board or Congress could have a material impact on the operations of the Bank. Set forth below is a brief description of material regulatory requirements that are or will be applicable to CB Financial Services, Inc., and Community Bank.
Dividends may not reduce surplus without the prior consent of the Pennsylvania Department of Banking and Securities. In addition, the Federal Deposit Insurance Act provides that an insured depository institution may not make any capital distribution if, after making such distribution, the institution would fail to meet any applicable regulatory capital requirement. Community Reinvestment Act and Fair Lending Laws.
Dividends may not reduce surplus without the prior consent of the Pennsylvania Department of Banking and Securities. In addition, the Federal Deposit Insurance Act provides that an insured depository institution may not make any capital distribution if, after making such distribution, the institution would fail to meet any applicable regulatory capital requirement. 15 Community Reinvestment Act and Fair Lending Laws.
Adjustable-rate mortgage loans carry increased credit risk associated with potentially higher monthly payments by borrowers as general market interest rates increase. It is possible that during periods of rising interest rates that the risk of delinquencies and defaults on adjustable-rate mortgage loans may increase due to the upward adjustment of interest costs to the borrower, resulting in increased loan losses.
Adjustable-rate mortgage loans carry increased credit risk associated with potentially higher monthly payments by borrowers as general market interest rates increase. It is possible that during periods of rising interest rates that the risk of delinquencies and defaults on adjustable-rate mortgage loans may increase due to the upward adjustment of interest costs to the borrower, resulting in increased credit losses.
We promote the health and wellness of our employees by strongly encouraging work-life balance, offering flexible work schedules, keeping the employee portion of health care premiums to a minimum and sponsoring various wellness programs. Market Area The Company’s primary market area consists of Allegheny, Fayette, Greene, Washington and Westmoreland Counties in southwestern Pennsylvania.
We promote the health and wellness of our employees by strongly encouraging work-life balance, offering flexible work schedules, keeping the employee portion of health care premiums to a minimum and sponsoring various wellness programs. 6 Market Area The Company’s primary market area consists of Allegheny, Fayette, Greene, Washington and Westmoreland Counties in southwestern Pennsylvania.
In addition, extensions of credit in excess of certain limits must be approved by the Bank’s Board. Extensions of credit to executive officers are subject to additional limits based on the type of extension involved. 15 Standards for Safety and Soundness. Federal law requires each federal banking agency to prescribe certain standards for all insured depository institutions.
In addition, extensions of credit in excess of certain limits must be approved by the Bank’s Board. Extensions of credit to executive officers are subject to additional limits based on the type of extension involved. Standards for Safety and Soundness. Federal law requires each federal banking agency to prescribe certain standards for all insured depository institutions.
We also consider the length of employment with the borrower’s present employer. Creditworthiness of the applicant is of primary consideration; however, the underwriting process also includes a comparison of the value of the collateral in relation to the proposed loan amount. 8 We primarily originate home equity loans secured by first lien mortgages.
We also consider the length of employment with the borrower’s present employer. Creditworthiness of the applicant is of primary consideration; however, the underwriting process also includes a comparison of the value of the collateral in relation to the proposed loan amount. We primarily originate home equity loans secured by first lien mortgages.
We compete for loans primarily through the interest rates, prepayment penalties, and loan fees we charge and the efficiency and quality of services we provide to borrowers. Factors that affect competition include general and local economic conditions, current interest rate levels and the volatility of the mortgage markets. Lending Activities General.
We compete for loans primarily through the interest rates, prepayment penalties, and loan fees we charge and the efficiency and quality of services we provide to borrowers. Factors that affect competition include general and local economic conditions, current interest rate levels and the volatility of the mortgage markets. 7 Lending Activities General.
Specifically, the Gramm-Leach-Bliley Act requires all financial institutions offering financial products or services to retail customers to provide such customers with the financial institution’s 17 privacy policy and provide such customers the opportunity to “opt out” of the sharing of certain personal financial information with unaffiliated third parties. Holding Company Regulation General.
Specifically, the Gramm-Leach-Bliley Act requires all financial institutions offering financial products or services to retail customers to provide such customers with the financial institution’s privacy policy and provide such customers the opportunity to “opt out” of the sharing of certain personal financial information with unaffiliated third parties. Holding Company Regulation General.
In addition, payment experience on loans secured by income-producing properties typically depends on the successful operation of the related real estate project, and this may be subject, to a greater extent, to adverse conditions in the real estate market and in the general economy. Construction Loans.
In addition, payment experience on loans secured by income-producing properties typically depends on the successful operation of the related real estate project, and this may be subject, to a greater extent, to adverse conditions in the real estate market and in the general economy. 9 Construction Loans.
The Bank is a community-oriented institution offering residential and commercial real estate loans, commercial and industrial loans, and consumer loans as well as a variety of deposit products for individuals and businesses in its market area. The Bank is the sole shareholder of Exchange Underwriters, Inc.
The Bank is a community-oriented institution offering residential and commercial real estate loans, commercial and industrial loans, and consumer loans as well as a variety of deposit products for individuals and businesses in its market area. The Bank was the sole shareholder of Exchange Underwriters, Inc.
As compensation for generating the loan, a portion of the rate is advanced to the dealer and accrued in a prepaid dealer reserve account. As a result, the Bank’s yield is below the contractual interest rate because the Bank must wait for the stream of loan payments to be repaid.
As compensation for generating the loan, a portion of the rate was advanced to the dealer and accrued in a prepaid dealer reserve account. As a result, the Bank’s yield is below the contractual interest rate because the Bank must wait for the stream of loan payments to be repaid.
The Dodd Frank Act has resulted in an increased regulatory burden and compliance, operating and interest expense for the Company and the Bank. Bank Regulation Business Activities. The Bank derives its lending and investment powers from the applicable Pennsylvania law, federal law and applicable state and federal regulations.
The Dodd Frank Act has resulted in an increased regulatory burden and compliance, operating and interest expense for the Company and the Bank. 14 Bank Regulation Business Activities. The Bank derives its lending and investment powers from the applicable Pennsylvania law, federal law and applicable state and federal regulations.
Source of Strength. The Dodd-Frank Act requires that all bank holding companies serve as a source of strength to their subsidiary depository institutions by providing capital, liquidity and other support in times of financial stress. Dividends.
Source of Strength. The Dodd-Frank Act requires that all bank holding companies serve as a source of strength to their subsidiary depository institutions by providing capital, liquidity and other support in times of financial stress. 18 Dividends.
Our FDIC-insured deposit market share in the counties we serve, excluding Allegheny County, which is the second most populous county in Pennsylvania, but where the Bank's has limited presence with one branch, was 5.50% out of 31 bank and thrift institutions. Such data does not reflect deposits held by credit unions.
Our FDIC-insured deposit market share in the counties we serve, excluding Allegheny County, which is the second most populous county in Pennsylvania, but where the Bank's has limited presence with one branch, was 5.20% out of 31 bank and thrift institutions. Such data does not reflect deposits held by credit unions.
Bureau of Labor Statistics (Second Quarter 2024) The market area has been impacted by the energy industry through the extraction of untapped natural gas reserves in the Marcellus Shale and Utica Shale Formations. The Utica Shale formation lies beneath most of Ohio, West Virginia, Pennsylvania and New York, as well as Kentucky, Maryland, Tennessee, Virginia and a part of Canada.
Bureau of Labor Statistics (Second Quarter 2025) The market area has been impacted by the energy industry through the extraction of untapped natural gas reserves in the Marcellus Shale and Utica Shale Formations. The Utica Shale formation lies beneath most of Ohio, West Virginia, Pennsylvania and New York, as well as Kentucky, Maryland, Tennessee, Virginia and a part of Canada.
As of December 31, 2024, the Bank was in compliance with the loans-to-one borrower limitations. Capital Distributions. The Pennsylvania Banking Code states, in part, that dividends may be declared and paid only out of accumulated net earnings and may not be declared or paid unless surplus is at least equal to capital.
As of December 31, 2025, the Bank was in compliance with the loans-to-one borrower limitations. Capital Distributions. The Pennsylvania Banking Code states, in part, that dividends may be declared and paid only out of accumulated net earnings and may not be declared or paid unless surplus is at least equal to capital.
While these securities generally provide lower yields than other investments, such as mortgage-backed securities, our current investment strategy is to maintain investments in such instruments to the extent appropriate for liquidity and pledging purposes, as collateral for borrowings, and for prepayment protection. Obligations of States and Political Subdivisions.
While these securities generally provide lower yields than other investments, such as mortgage-backed securities, our current investment strategy is to invest in such instruments to the extent appropriate for liquidity and pledging purposes, as collateral for borrowings, and for prepayment protection. Obligations of States and Political Subdivisions.
The sale of assets was completed on December 8, 2023 and resulted in an initial pre-tax gain of $24.6 million. During 2024, the Company recognized an additional gain of $138,000 following the final settlement of all liabilities and an earn-out payment of $708,000.
The sale of assets was completed on December 8, 2023 and resulted in an initial pre-tax gain of $24.6 million. During 2024, the Company recognized an additional gain of $138,000 following the final settlement of all liabilities and an earn-out payment of $708,000. During 2025, the Company recognized an earn-out payment of $759,000.
At December 31, 2024, we had $20.0 million FHLB advances outstanding. As an alternative to pledging securities, the facility is also used for standby letters of credit to collateralize public deposits in excess of the level insured by the FDIC.
At December 31, 2025, we had $20.0 million FHLB advances outstanding. As an alternative to pledging securities, the facility is also used for standby letters of credit to collateralize public deposits in excess of the level insured by the FDIC.
At December 31, 2024, the Bank met the criteria for being considered “well capitalized.” In addition, the final capital rule adopted in July 2013 revises the prompt corrective action categories to incorporate the revised minimum capital requirements of that rule. Enforcement.
At December 31, 2025, the Bank met the criteria for being considered “well capitalized.” In addition, the final capital rule adopted in July 2013 revises the prompt corrective action categories to incorporate the revised minimum capital requirements of that rule. Enforcement.
However, the ability to attract and maintain deposits and the rates paid on these deposits has been and will continue to be significantly affected by market conditions. 12 Borrowings. Deposits are our primary source of funds for lending and investment activities.
However, the ability to attract and maintain deposits and the interest rates paid on these deposits has been and will continue to be significantly affected by market conditions. Borrowings. Deposits are our primary source of funds for lending and investment activities.
The Bank also maintains multiple line of credit arrangements with various unaffiliated banks totaling $50.0 million. At December 31, 2024, we did not have any outstanding balances under any of these borrowing relationships.
The Bank also maintains multiple line of credit arrangements with various unaffiliated banks totaling $50.0 million. At December 31, 2025, we did not have any outstanding balances under any of these borrowing relationships.
The regulatory structure also gives the regulatory authorities extensive discretion in connection with their supervisory and enforcement activities and examination policies, including policies with respect to the classification of assets and the establishment of adequate loan loss reserves for regulatory purposes.
The regulatory structure also gives the regulatory authorities extensive discretion in connection with their supervisory and enforcement activities and examination policies, including policies with respect to the classification of assets and the establishment of adequate credit loss reserves for regulatory purposes.
In assessing 14 an institution’s capital adequacy, the FDIC takes into consideration not only these numeric factors, but qualitative factors as well and has the authority to establish higher capital requirements for individual associations where necessary. At December 31, 2024, the Bank’s capital exceeded all applicable requirements.
In assessing an institution’s capital adequacy, the FDIC takes into consideration not only these numeric factors, but qualitative factors as well and has the authority to establish higher capital requirements for individual associations where necessary. At December 31, 2025, the Bank’s capital exceeded all applicable requirements.
The following discussion of federal taxation is intended only to summarize certain pertinent federal income tax matters and is not a comprehensive description of the tax rules applicable to the Company and the Bank. Method of Accounting.
The following discussion of federal taxation is intended only to summarize certain pertinent federal income tax matters and is not a comprehensive description of the tax rules applicable to the Company and the Bank.
Our one- to four-family residential mortgage loans are generally conforming loans, underwritten according to secondary market guidelines. We generally originate mortgage loans in amounts up to the maximum conforming loan limits established by the Federal Housing Finance Agency, which, for 2024, is typically $766,500 for single-family homes, except in certain high-cost areas in the United States.
Our one- to four-family residential mortgage loans are generally conforming loans, underwritten according to secondary market guidelines. We generally originate mortgage loans in amounts up to the maximum conforming loan limits established by the Federal Housing Finance Agency, which, for 2025, is typically $806,500 for single-family homes, except in certain high-cost areas in the United States.
Census Bureau (State - July 2024; County - July 2023) (2) Based on the latest data published by the U.S. Bureau of Labor Statistics (December 2024) (3) Based on the latest data published by the U.S.
Census Bureau (State - July 2025; County - July 2024) (2) Based on the latest data published by the U.S. Bureau of Labor Statistics December 2025) (3) Based on the latest data published by the U.S.
If the need arises, we may rely upon borrowings to supplement our supply of available funds and to fund deposit withdrawals. Our borrowings may consist of advances from the FHLB, subordinated debt, funds borrowed under repurchase agreements and federal funds purchased.
If the need arises, we may rely upon borrowings to supplement our supply of available funds and to fund deposit withdrawals. Our borrowings may consist of advances from the correspondent banks, subordinated debt, funds borrowed under repurchase agreements and federal funds purchased.
As of December 31, 2024, the Bank was in compliance with this requirement. The Bank also is able to borrow from the FHLB of Pittsburgh, which provides an additional source of liquidity for the Bank. Federal Reserve System.
As of December 31, 2025, the Bank was in compliance with this requirement. The Bank also is able to borrow from the FHLB of Pittsburgh, which provides an additional source of liquidity for the Bank. 17 Federal Reserve System.
One of our primary lending activities is the origination of fixed-rate, one- to four-family, owner-occupied, residential mortgage loans with terms up to 30 years secured by property located in our market area. At December 31, 2024, one- to four-family mortgage loans totaled $267.6 million.
One of our primary lending activities is the origination of fixed-rate, one- to four-family, owner-occupied, residential mortgage loans with terms up to 30 years secured by property located in our market area. At December 31, 2025, one- to four-family mortgage loans totaled $254.6 million.
REGULATION AND SUPERVISION General CB Financial Services, Inc. is a bank holding company within the meaning of the Bank Holding Company Act of 1956, as amended. As such, it is registered with, subject to examination and supervision by, and otherwise required to comply with the rules and regulations of the Federal Reserve Board.
The Bank has no subsidiaries. 13 REGULATION AND SUPERVISION General CB Financial Services, Inc. is a bank holding company within the meaning of the Bank Holding Company Act of 1956, as amended. As such, it is registered with, subject to examination and supervision by, and otherwise required to comply with the rules and regulations of the Federal Reserve Board.
Our primary market area extends into Marshall and Ohio counties in West Virginia. 6 While the majority of activities occur in this primary market, the Bank extends lending and depository services throughout Pennsylvania, West Virginia, Ohio, New York and beyond. The following table sets forth certain economic statistics for our primary market area.
While the majority of activities occur in this primary market, the Bank extends lending and depository services throughout Pennsylvania, West Virginia, Ohio, New York and beyond. The following table sets forth certain economic statistics for our primary market area.
Short-term borrowings may also consist of federal funds purchased. At December 31, 2024, the Bank maintained a Borrower-In-Custody of Collateral line of credit agreement with the FRB for $84.0 million that requires monthly certification of collateral, is subject to annual renewal, incurs no service charge and is secured by commercial and consumer indirect auto loans.
Short-term borrowings may also consist of federal funds purchased. At December 31, 2025, the Bank maintained a Borrower-In-Custody of Collateral line of credit agreement with the FRB for $71.2 million that requires monthly certification of collateral, is subject to annual renewal, incurs no service charge and is secured by commercial and consumer indirect auto loans.
Our deposit sources are primarily concentrated in the communities surrounding our branch offices. As of June 30, 2024, our FDIC-insured deposit market share in the counties we serve was 0.65% out of 48 bank and thrift institutions.
Our deposit sources are primarily concentrated in the communities surrounding our branch offices. As of June 30, 2025, our FDIC-insured deposit market share in the counties we serve was 0.65% out of 46 bank and thrift institutions.
If the Bank approves the applicant’s request for financing, the Bank purchases the dealership-originated installment sales contract and is known as the holder in due course that is entitled to receive principal and interest payments from a borrower.
If the Bank approved the applicant’s request for financing, the Bank purchased the dealership-originated installment sales contract and is known as the holder in due course that is entitled to receive principal and interest payments from a borrower.
The origination of fixed-rate mortgage loans versus adjustable-rate mortgage loans is monitored on an ongoing basis and is affected significantly by the level of market interest rates, customer preference, our interest rate risk position and our competitors’ loan products. Adjustable-rate mortgage loans secured by one- to four-family residential real estate totaled $54.7 million at December 31, 2024.
The origination of fixed-rate mortgage loans versus adjustable-rate mortgage loans is monitored on an ongoing basis and is affected significantly by the level of market interest rates, customer preference, our interest rate risk position and our competitors’ loan products. Adjustable-rate mortgage loans secured by one- to four-family residential real estate totaled $59.2 million at December 31, 2025.
In December 2006, the Bank completed a charter conversion from a national bank to a Pennsylvania-chartered commercial bank wholly-owned by the Company. The Bank is a member of the Federal Home Loan Bank (“FHLB”) System. Its deposits are insured by the Federal Deposit Insurance Corporation (“FDIC”).
In 1987, the Bank changed its name to Community Bank, National Association. In December 2006, the Bank completed a charter conversion from a national bank to a Pennsylvania-chartered commercial bank wholly-owned by the Company. The Bank is a member of the Federal Home Loan Bank (“FHLB”) System. Its deposits are insured by the Federal Deposit Insurance Corporation (“FDIC”).
We may originate loans to consumers with a credit score below 660. This may be defined as subprime loans, however there are typically mitigating circumstances that according to FDIC guidance and our opinion would not designate such loans as “subprime.” Home Equity Loans. At December 31, 2024, home equity loans totaled $71.3 million.
We may originate loans to consumers with a credit score below 660. This may be defined as subprime loans, however there are typically mitigating circumstances that according to FDIC guidance and our opinion would not designate such loans as “subprime.” 8 Home Equity Loans. At December 31, 2025, home equity loans totaled $75.1 million.
The success of our business is highly dependent on our employees, who provide value to our clients and communities through their dedication to helping clients achieve the American dream of home ownership and financial security. Demographics. As of December 31, 2024, we employed 159 full-time and 2 part-time employees in Pennsylvania and West Virginia.
The success of our business is highly dependent on our employees, who provide value to our clients and communities through their dedication to helping clients achieve the American dream of home ownership and financial security. Demographics. As of December 31, 2025, we employed 169 full-time and 5 part-time employees primarily in Pennsylvania and West Virginia.
None of these employees are represented by a collective bargaining agreement. During 2024, we hired 27 employees and our voluntary turnover rate was 13%. Diversity and Inclusion. We strive toward having a powerful and diverse team of employees, knowing we are better together with our combined wisdom and intellect.
None of these employees are represented by a collective bargaining agreement. During 2025, we hired 40 employees and our voluntary turnover rate was 12%. Diversity and Inclusion. We strive toward having a powerful and diverse team of employees, knowing we are better together with our combined wisdom and intellect.
Fixed-rate one- to four-family residential mortgage loans with terms of 15 years or more are originated for resale to the secondary market. During the year ended December 31, 2024, we originated $5.8 million of fixed-rate residential mortgage loans which were subsequently sold in the secondary mortgage market.
Fixed-rate one- to four-family residential mortgage loans with terms of 15 years or more are originated for resale to the secondary market. During the year ended December 31, 2025, we originated $4.9 million of fixed-rate residential mortgage loans which were subsequently sold in the secondary mortgage market.
Home equity loans in a junior lien position totaled $17.9 million at December 31, 2024 and entail greater risks than one- to four-family residential mortgage loans or home equity loans secured by first lien mortgages.
Home equity loans in a junior lien position totaled $21.5 million at December 31, 2025 and entail greater risks than one- to four-family residential mortgage loans or home equity loans secured by first lien mortgages.
We originate commercial real estate loans that are secured primarily by improved properties, such as retail facilities, office buildings and other non-residential buildings as well as multifamily properties. At December 31, 2024, $485.5 million, or 44.4% of our total loan portfolio, consisted of commercial real estate loans.
We originate commercial real estate loans that are secured primarily by improved properties, such as retail facilities, office buildings and other non-residential buildings as well as multifamily properties. At December 31, 2025, $552.2 million, or 47.5% of our total loan portfolio, consisted of commercial real estate loans.
There were no standby letters of credit issued on our behalf by the FHLB to secure public deposits as of December 31, 2024 and $18.9 million as of December 31, 2023.
There were no standby letters of credit issued on our behalf by the FHLB to secure public deposits as of December 31, 2025 and December 31, 2024.
Our principal lending activity has been the origination in our local market area of residential one- to four-family, commercial real estate, construction, commercial and industrial, and consumer loans. At December 31, 2024, our total loans receivable, which excludes the allowance for credit losses, decreased $17.8 million, or 1.6%, to $1.09 billion compared to $1.11 billion at December 31, 2023.
Our principal lending activity has been the origination in our local market area of residential one- to four-family, commercial real estate, construction, commercial and industrial, and consumer loans. At December 31, 2025, our total loans receivable, which excludes the allowance for credit losses, increased $69.6 million, or 6.4%, to $1.16 billion compared to $1.09 billion at December 31, 2024.
Greene County is a significantly more rural county compared to the counties in which we have our other branches. Our offices located in Allegheny, Washington, Fayette, and Westmoreland Counties are in the southern suburban area of metropolitan Pittsburgh.
Greene County is a significantly more rural county compared to the counties in which we have our other branches. Our offices located in Allegheny, Washington, Fayette, and Westmoreland Counties are in the southern suburban area of metropolitan Pittsburgh. Our primary market area extends into Marshall and Ohio counties in West Virginia.
If a payment is not paid within the appropriate grace period, then a late notice is mailed. In addition, telephone calls are made and additional letters may be sent. Collection efforts continue until it is determined that the debt is uncollectible. For loans secured by real estate, a Homeownership Counseling Notice is mailed when the loan is 45 days delinquent.
In addition, telephone calls are made and additional letters may be sent. Collection efforts continue until it is determined that the debt is uncollectible. For loans secured by real estate, a Homeownership Counseling Notice is mailed when the loan is 45 days delinquent.
Management cannot predict what assessment rates will be in the future. 16 Insurance of deposits may be terminated by the FDIC upon a finding that an institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC.
Insurance of deposits may be terminated by the FDIC upon a finding that an institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC.
Depending on the program, limitations on the amount of advances are based either on a fixed percentage of a member institution’s stockholders’ equity or on the FHLB’s assessment of the institution’s creditworthiness. At December 31, 2024, we had a maximum borrowing capacity with the FHLB of up to $489.5 million and available borrowing capacity of $467.6 million.
Depending on the program, limitations on the amount of advances are based either on a fixed percentage of a member institution’s stockholders’ equity or on the FHLB’s assessment of the institution’s creditworthiness. At December 31, 2025, we had a maximum borrowing capacity with the FHLB of up to $528.0 million and available borrowing capacity of $506.1 million.
We originate construction loans to individuals to finance the construction of residential dwellings and also originate loans for the construction of commercial properties, including hotels, apartment buildings, housing developments, and owner-occupied properties used for businesses. At December 31, 2024, $54.7 million, or 5.0% of our total loan portfolio, consisted of construction loans.
We originate construction loans to individuals to finance the construction of residential dwellings and also originate loans for the construction of commercial properties, including hotels, apartment buildings, housing developments, and owner-occupied properties used for businesses. At December 31, 2025, $45.4 million, or 3.9% of our total loan portfolio, consisted of construction loans.
The federal return income or loss is adjusted for various items treated differently by the Pennsylvania Department of Revenue. The Company is subject to additional state tax filing requirements in West Virginia and Ohio.
The tax is imposed on income or loss from the federal income tax return on a separate-company basis for the Company and Exchange Underwriters. The federal return income or loss is adjusted for various items treated differently by the Pennsylvania Department of Revenue. 19 The Company is subject to additional state tax filing requirements in West Virginia and Ohio.
We generate loans through our marketing efforts, existing customers and 7 referrals, real estate brokers, builders and local businesses. At December 31, 2024, $338.0 million, or 30.9%, of our total loan portfolio was invested in residential loans. One- to Four-Family Mortgage Loans .
We generate loans through our marketing efforts, existing customers and referrals, real estate brokers, builders and local businesses. At December 31, 2025, $329.2 million, or 28.3%, of our total loan portfolio was invested in residential loans. One- to Four-Family Mortgage Loans .
We originate consumer loans that primarily consist of indirect auto loans and, to a lesser extent, secured and unsecured loans and lines of credit. As of December 31, 2024, consumer loans totaled $70.5 million, or 6.5%, of our total loan portfolio, of which $62.5 million were indirect auto loans. Consumer loans are generally offered on a fixed-rate basis.
We originate consumer loans that primarily consist of indirect auto loans and, to a lesser extent, secured and unsecured loans and lines of credit. As of December 31, 2025, consumer loans totaled $42.9 million, or 3.7%, of our total loan portfolio. Consumer loans are generally offered on a fixed-rate basis.
At December 31, 2024, we held available-for-sale municipal bonds with a fair value of $3.3 million compared to $3.4 million at December 31, 2023. 100% of our municipal bonds are issued by local municipalities or school districts located in Pennsylvania. Municipal bonds may be general obligation of the issuer or secured by specific revenues.
At December 31, 2025, we held available-for-sale municipal bonds with a fair value of $36.2 million compared to $3.3 million at December 31, 2024. Municipal bonds are issued by municipalities or school districts and may be general obligation of the issuer or secured by specific revenues.
The FDIC has authority to increase insurance assessments. Any significant increases would have an adverse effect on the operating expenses and results of operations of the Bank.
The FDIC has authority to increase insurance assessments. Any significant increases would have an adverse effect on the operating expenses and results of operations of the Bank. Management cannot predict what assessment rates will be in the future.
We intend to focus on building our mobile and online capabilities through an improved mobile banking platform and product offering, omnichannel experience that is consistent with quick results and interactive alerts. 5 • Enhance profitability and efficiency while continuing to invest for future growth. Margin compression continues to be a challenge.
We intend to focus on building our mobile and online capabilities through an improved mobile banking platform and product offering, omnichannel experience that is consistent with quick results and interactive alerts. • Enhance profitability and efficiency while continuing to invest for future growth. We view cost reduction as a key part of a company-wide efficiency effort.
These mortgage classes are pooled into a special purpose entity, where tranches are created and sold to investors. Investors in a CMO are purchasing bonds issued by the entity, and then receive payments based on the income derived from the pooled mortgages. The various pools are divided into tranches are then securitized and sold to the investor.
CMO’s generally are a specific class of MBS’s that are divided based on risk assessments and maturity dates. These mortgage classes are pooled into a special purpose entity, where tranches are created and sold to investors. Investors in a CMO are purchasing bonds issued by the entity, and then receive payments based on the income derived from the pooled mortgages.
The dealer collects information from the applicant and transmits it to us electronically for review, where we can either accept or reject the applicant without ever meeting the applicant.
The dealer collected information from the applicant and transmitted it to us electronically for review, where we either accepted or rejected the applicant without ever meeting the applicant.
At December 31, 2024, the Company, on a consolidated basis, had total assets of $1.48 billion, total liabilities of $1.33 billion and stockholders’ equity of $147.4 million.
At December 31, 2025, the Company, on a consolidated basis, had total assets of $1.55 billion, total liabilities of $1.39 billion and stockholders’ equity of $157.5 million.
For federal income tax purposes, the Company currently reports its income and expenses on the accrual method of accounting and uses a tax year ending December 31 for filing its federal and state income tax returns. Federal Taxation. The federal income tax laws apply to the Company in the same manner as to other corporations with some exceptions.
Method of Accounting For federal income tax purposes, the Company currently reports its income and expenses on the accrual method of accounting and uses a tax year ending December 31 for filing its federal and state income tax returns.
All loans originated by the Bank are subject to its underwriting guidelines. Loan approval authorities vary based on loan size in the aggregate. Individual officer loan approval authority generally applies to loans of up to $1.0 10 million. Loans above that amount and up to 65% of the Bank’s legal lending limit may be approved by the Loan Committee.
The Bank’s loan approval policies and limits are also established by its Board. All loans originated by the Bank are subject to its underwriting guidelines. Loan approval authorities vary based on loan size in the aggregate. Individual officer loan approval authority generally applies to loans of up to $1.0 million.
The flow of deposits is influenced significantly by general economic conditions, changes in money market and other prevailing interest rates and competition. The variety of deposit accounts offered allows the Company to be competitive in obtaining funds and responding to changes in consumer demand. Based on experience, the Company believes that its deposits are relatively stable.
The variety of deposit accounts offered allows the Company to be competitive in obtaining funds and responding to changes in consumer demand. Based on experience, the Company believes that its deposits are relatively stable.
The Company and Exchange Underwriters are subject to the Pennsylvania Corporate Net Income Tax, otherwise known as “CNI tax.” The CNI tax rate in 2024 was 8.49% and in 2023 was 8.99%. The tax is imposed on income or loss from the federal income tax return on a separate-company basis for the Company and Exchange Underwriters.
The tax is imposed on the Bank’s adjusted equity. The Company and Exchange Underwriters are subject to the Pennsylvania Corporate Net Income Tax, otherwise known as “CNI tax.” The CNI tax rate in 2025 was 7.99% and in 2024 was 8.49%.
In the case of commercial loans, we also review projected income, expenses and the viability of the project being financed. We generally require appraisals of all real property securing loans. Appraisals are performed by independent licensed appraisers. The Bank’s loan approval policies and limits are also established by its Board.
To assess the borrower’s ability to repay, we review the borrower’s income and expenses and employment and credit history. In the case of commercial loans, we also review projected income, expenses and the viability of the project being financed. We generally require appraisals of all real property securing loans. Appraisals are performed by independent licensed appraisers.
Other Regulations Interest and other charges collected or contracted by the Bank are subject to state usury laws and federal laws concerning interest rates.
This change currently remains in place with no indication of reversal. Other Regulations Interest and other charges collected or contracted by the Bank are subject to state usury laws and federal laws concerning interest rates.
In determining the amount of risk weighted assets, all assets, including certain off-balance sheet assets, are multiplied by a risk-weight factor of 0% to 1250%, assigned by the regulations, based on the risks believed inherent in the type of asset.
In determining the amount of risk-weighted assets for calculating risk-based capital ratios, all assets, including certain off-balance sheet assets ( e.g. , recourse obligations, direct credit substitutes, residual interests) are multiplied by a risk-weight factor assigned by the regulations based on the risks believed inherent in the type of asset.
We invest in CLO securities issued by specialized financial institutions or investment banks. These floating-rate securities are backed by pools of high-quality commercial and industrial and commercial real estate loans, typically first-lien bank loans to corporations.
We invest in CLO securities issued by specialized financial institutions or investment banks. These floating-rate securities are backed by pools of high-quality commercial and industrial and commercial real estate loans, typically first-lien bank loans to corporations. Our CLO portfolio had a fair value of $101.2 million and $98.8 million at December 31, 2025 and 2024, respectively. Corporate Debt.
At December 31, 2024, $112.0 million, or 10.3% of our total loan portfolio, consisted of commercial and industrial loans. 9 Commercial and industrial loans generally have terms of maturity from five to seven years with adjustable interest rates tied to the prime rate, SOFR or the weekly average of the FHLB of Pittsburgh three- to ten-year fixed rates.
Commercial and industrial loans generally have terms of maturity from five to seven years with adjustable interest rates tied to the prime rate, Secured Overnight Financing Rate (SOFR) or the weekly average of the FHLB of Pittsburgh three- to ten-year fixed rates.
At December 31, 2024, the principal balance and unamortized debt issuance costs for the 2031 Note were $15.0 million and $282,000, respectively. Subsidiary Activities Community Bank is the only subsidiary of the Company. The Bank's sole and wholly-owned subsidiary is Exchange Underwriters, Inc., a former full-service, independent insurance agency.
At December 31, 2025, the principal balance and unamortized debt issuance costs for the 2031 Note were $15.0 million and $242,000, respectively. Subsidiary Activities Community Bank is the only subsidiary of the Company.
MBS’s generally yield less than the loans that underlie such securities because of the cost of payment guarantees and credit enhancements. However, MBS’s are more liquid than individual mortgage loans because there is an active trading market for such securities. In addition, MBS’s may be used to collateralize our specific liabilities and obligations.
However, MBS’s are more liquid than individual mortgage loans because there is an active trading market for such securities. In addition, MBS’s may be used to collateralize our specific liabilities and obligations. Finally, MBS’s are assigned lower risk-weightings for purposes of calculating our risk-based capital level.
In addition, funds are derived from scheduled loan payments, investment maturities, loan prepayments, loan sales, retained earnings and income on earning assets. While scheduled loan payments and income on earning assets are relatively stable sources of funds, deposit inflows and outflows can vary widely and are influenced by prevailing interest rates, market conditions and levels of competition. Deposits.
While scheduled loan payments and income on earning assets are relatively stable sources of funds, deposit inflows and outflows can vary widely and are influenced by prevailing interest rates, market conditions and levels of competition. Deposits. Deposits are generated primarily from residents within the Company’s market area. The Company offers a variety of deposit accounts.
For its 2024 and 2023 fiscal year, the Company’s maximum federal income tax rate was 21%. State Taxation. The Bank is subject to the Pennsylvania Bank and Trust Company Shares Tax (“Shares Tax”) rate of 0.95%. The tax is imposed on the Bank’s adjusted equity.
For federal income tax purposes, corporations may carryforward net operating losses indefinitely, but the deduction is limited to 80% of taxable income. For its 2025 and 2024 fiscal year, the Company’s maximum federal income tax rate was 21%. State Taxation The Bank is subject to the Pennsylvania Bank and Trust Company Shares Tax (“Shares Tax”) rate of 0.95%.
Assets remaining in the EU subsidiary at December 31, 2024 consisted primarily of cash received from the sale of assets. The Bank intends to merge EU into the Bank during 2025. The Bank was originally chartered in 1901 as The First National Bank of Carmichaels. In 1987, the Bank changed its name to Community Bank, National Association.
Assets remaining in the EU subsidiary at December 31, 2025 consisted primarily of cash received from the sale of assets. Effective September 29, 2025, EU merged with and into the Bank, with the Bank as the surviving institution. The Bank was originally chartered in 1901 as The First National Bank of Carmichaels.
We maintain a minimum amount of liquid assets that may be invested in specified short-term securities and certain other investments.
This portfolio is valued at fair value with changes in market price recognized through noninterest income. We maintain a minimum amount of liquid assets that may be invested in specified short-term securities and certain other investments.
Loans in the aggregate over 65% of the Bank’s legal lending limit must be approved by the Board. Delinquencies and Classified Assets When a borrower fails to remit a required loan payment, a courtesy notice is sent to the borrower prior to the end of their appropriate grace period stressing the importance of paying the loan current.
Delinquencies and Classified Assets When a borrower fails to remit a required loan payment, a courtesy notice is sent to the borrower prior to the end of their appropriate grace period stressing the importance of paying the loan current. If a payment is not paid within the appropriate grace period, then a late notice is mailed.
MBS’s typically represent a participation interest in a pool of one- to four-family or multifamily mortgages, although we invest primarily in MBS’s backed by one- to four-family mortgages. The issuers of such securities pool and resell the participation interests in the form of securities to investors. Some security pools are guaranteed as to payment of principal and interest to investors.
The various pools are divided into tranches are then securitized and sold to the investor. MBS’s typically represent a participation interest in a pool of one- to four-family or multifamily mortgages, although we invest primarily in MBS’s backed by one- to four-family mortgages.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe Chief Information Security Officer will be primarily responsible for the cybersecurity component of our risk program. These responsibilities include performing and maintaining a cyber risk assessment, defense operations, incident response, vulnerability assessment, threat intelligence, access levels, third party risk and vendor management and business continuity planning.
Biggest changeThese responsibilities include performing and maintaining a cyber risk assessment, defense operations, incident response, vulnerability assessment, threat intelligence, access levels, third party risk and vendor management and business continuity planning. This key role continues to develop as we expand our overall risk management program. Our objectives for managing cybersecurity risk is to greatly minimize the impacts of external threats.
Additionally, we have legal fees associated with the resolution of problem assets as well as additional costs, such as taxes, insurance and maintenance related to our other real estate owned. The resolution of nonperforming assets also requires the active involvement of management, which can adversely affect the amount of time we devote to the income-producing 19 activities of the Bank.
Additionally, we have legal fees associated with the resolution of problem assets as well as additional costs, such as taxes, insurance and maintenance related to our other real estate owned. The resolution of nonperforming assets also requires the active involvement of management, which can adversely affect the amount of time we devote to the income-producing activities of the Bank.
If, during a period of lower real estate values, the Company is required to liquidate the collateral securing a loan to satisfy debts or to increase its allowance for loan losses, it could materially reduce its profitability and adversely affect its financial condition.
If, during a period of lower real estate values, the Company is required to liquidate the collateral securing a loan to satisfy debts or to increase its allowance for credit losses, it could materially reduce its profitability and adversely affect its financial condition.
Because the Company emphasizes commercial real estate and commercial loan originations, its credit risk profile is increased, and continued downturns in the local real estate market or economy could adversely affect its earnings. Commercial real estate and commercial loans generally have more inherent risk than the residential real estate loans.
Because the Company emphasizes commercial real estate and commercial loan originations, its credit risk profile is increased, and downturns in the local real estate market or economy could adversely affect its earnings. Commercial real estate and commercial loans generally have more inherent risk than the residential real estate loans.
Risks Related to Our Lending Activities A large percentage of the Company’s loans are collateralized by real estate, and further disruptions in the real estate market may result in losses and reduce the Company’s earnings. A substantial portion of the Company’s loan portfolio consists of loans collateralized by real estate.
Risks Related to Our Lending Activities A large percentage of the Company’s loans are collateralized by real estate, and disruptions in the real estate market may result in losses and reduce the Company’s earnings. A substantial portion of the Company’s loan portfolio consists of loans collateralized by real estate.
Events and conditions that could result in impairment in the value of our goodwill include worsening business conditions and economic factors, changes in the industries in which we operate, adverse changes in the regulatory environment, or other factors leading to reduction in expected long-term profitability and cash flows. 20 Risk Related to Our Liquidity Position If we are unable to borrow funds, we may not be able to meet the cash flow requirements of our depositors, creditors, and borrowers, or the operating cash needed to fund corporate expansion and other corporate activities.
Events and conditions that could result in impairment in the value of our goodwill include worsening business conditions and economic factors, changes in the industries in which we operate, adverse changes in the regulatory environment, or other factors leading to reduction in expected long-term profitability and cash flows. 21 Risk Related to Our Liquidity Position If we are unable to borrow funds, we may not be able to meet the cash flow requirements of our depositors, creditors, and borrowers, or the operating cash needed to fund corporate expansion and other corporate activities.
Because the Company carries these assets on its books at their estimated fair value, it may incur losses even if the asset in question presents minimal credit risk. 22 Risks Related to Competitive Matters Strong competition within the Company’s market area could adversely affect the Company’s earnings and slow growth.
Because the Company carries these assets on its books at their estimated fair value, it may incur losses even if the asset in question presents minimal credit risk. 23 Risks Related to Competitive Matters Strong competition within the Company’s market area could adversely affect the Company’s earnings and slow growth.
At December 31, 2024, we had $9.7 million of goodwill on our Consolidated Statements of Financial Condition after incurring goodwill impairment of $18.7 million in 2020. Any further impairment to goodwill could have a material adverse impact on the Company’s consolidated financial conditions and results of operations. 100% of the goodwill is assigned to the Community Banking reporting unit.
At December 31, 2025, we had $9.7 million of goodwill on our Consolidated Statements of Financial Condition after incurring goodwill impairment of $18.7 million in 2020. Any further impairment to goodwill could have a material adverse impact on the Company’s consolidated financial conditions and results of operations. 100% of the goodwill is assigned to the Community Banking reporting unit.
We do not record interest income on nonaccrual loans or real estate owned. We must reserve for probable losses, which results in additional provisions for loan losses. As circumstances warrant, we must write down the value of properties in our other real estate owned portfolio to reflect changing market values.
We do not record interest income on nonaccrual loans or real estate owned. We must reserve for probable losses, which results in additional provisions for credit losses. As circumstances warrant, we must write down the value of properties in our other real estate owned portfolio to reflect changing market values.
ITEM 1B UNRESOLVED STAFF COMMENTS Not applicable 23 ITEM 1C CYBERSECURITY Our risk management program is designed to identify, assess and mitigate risks across our company. When considering financial, operational, regulatory, reputational and legal risk, our program is well matched for our size and complexity.
ITEM 1B UNRESOLVED STAFF COMMENTS Not applicable 24 ITEM 1C CYBERSECURITY Our risk management program is designed to identify, assess and mitigate risks across our company. When considering financial, operational, regulatory, reputational and legal risk, our program is well matched for our size and complexity.
Further declines in real estate values and sales volumes and continued elevated unemployment levels may result in higher than expected loan delinquencies, increases in nonperforming and criticized classified assets, and a decline in demand for the Company’s products and services.
Declines in real estate values and sales volumes and elevated unemployment levels may result in higher than expected loan delinquencies, increases in nonperforming and criticized classified assets, and a decline in demand for the Company’s products and services.
We maintain an allowance for credit losses which represents management's best estimate of credit losses within the existing portfolio of loans. The allowance, in the judgement of management, is appropriate to reserve for estimated credit losses and risks inherent in the loan portfolio.
We maintain an allowance for credit losses which represents management's best estimate of credit losses within the existing portfolio of loans. The allowance, in the judgment of management, is appropriate to reserve for estimated credit losses and risks inherent in the loan portfolio.
If our estimate of the allowance for loan losses is inadequate, we will have to increase the allowance accordingly. If the Company’s allowance for credit losses is not sufficient to cover actual credit losses, the Company’s results of operations would be negatively affected.
If our estimate of the allowance for credit losses is inadequate, we will have to increase the allowance accordingly. 20 If the Company’s allowance for credit losses is not sufficient to cover actual credit losses, the Company’s results of operations would be negatively affected.
These components are presented by Executive Management as part of the regular board meeting schedule and strategic planning process. 24
These components are presented by Executive Management as part of the regular board meeting schedule and strategic planning process. 25
Our Chief Technology Officer, in conjunction with the Chief Operating Officer, is currently responsible for managing our information security program. Given the increasing risk involving cybersecurity and the Bank’s evolving needs and reliance on technology, our strategy involves the addition of a Chief Information Security Officer.
Our Chief Information Security Officer, in conjunction with the Chief Operating Officer, is currently responsible for managing our information security program. Given the increasing risk involving cybersecurity and the Bank’s evolving needs and reliance on technology, we invested in a Chief Information Security Officer. The Chief Information Security Officer is primarily responsible for the cybersecurity component of our risk program.
Our Chief Technology Officer, who reports to our Chief Operating Officer, collaborates regularly with peer banks and other industry groups to identify and implement best practices. Our program is regularly reviewed in an effort to address emerging trends and threats. We maintain multiple controls in an effort to manage cybersecurity threats.
We collaborate regularly with peer banks and other industry groups to identify and implement best practices. Our program is regularly reviewed in an effort to address emerging trends and threats. We maintain multiple controls in an effort to manage cybersecurity threats.
Our information security program is designed to comply with industry standards, such as the National Institute of Technology Cybersecurity Framework. We successfully leverage several associations, industry groups, audits and enhanced monitoring to promote the effectiveness of our program.
This includes, but is not limited to, efforts to penetrate, disrupt or misuse our systems or information. Our information security program is designed to comply with industry standards, such as the National Institute of Technology Cybersecurity Framework. We successfully leverage several associations, industry groups, audits and enhanced monitoring to promote the effectiveness of our program.
The occurrence of any system failures, interruption or breach of security could damage the Company’s reputation and result in a loss of customers and business thereby, subjecting it to additional regulatory scrutiny, or could expose it to litigation 21 and possible financial liability.
Threats to information security also exist in the processing of customer information through various other vendors and their personnel. 22 The occurrence of any system failures, interruption or breach of security could damage the Company’s reputation and result in a loss of customers and business thereby, subjecting it to additional regulatory scrutiny, or could expose it to litigation and possible financial liability.
If these third-party providers encounter difficulties, or if the Company has difficulty communicating with them, the Company’s ability to adequately process and account for transactions could be affected, and business operations could be adversely affected. Threats to information security also exist in the processing of customer information through various other vendors and their personnel.
If these third-party providers encounter difficulties, or if the Company has difficulty communicating with them, the Company’s ability to adequately process and account for transactions could be affected, and business operations could be adversely affected.
As inflation increases, the value of our investment securities, particularly those with longer maturities, would decrease, although this effect can be less pronounced for floating rate instruments. In addition, inflation increases the cost of goods and services we use in our business operations, such as electricity and other utilities, which increases our noninterest expenses.
In addition, inflation increases the cost of goods and services we use in our business operations, such as electricity and other utilities, which increases our noninterest expenses.
The real estate collateral in each case provides an alternate source of repayment in the event of default by the borrower and may deteriorate in value during the time the credit is extended. If real estate values decline further, it is likely that the Company would be required to increase its allowance for loan losses.
Disruptions in the real estate market could significantly impair the value of the Company’s collateral and its ability to sell the collateral upon foreclosure. The real estate collateral in each case provides an alternate source of repayment in the event of default by the borrower and may deteriorate in value during the time the credit is extended.
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. Recently, there have been market indicators of a pronounced rise in inflation and the FRB has raised certain benchmark interest rates in an effort to combat inflation.
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. As inflation increases, the value of our investment securities, particularly those with longer maturities, would decrease, although this effect can be less pronounced for floating rate instruments.
Removed
Improving economic conditions have shifted to an increase in demand for real estate, which has resulted in stabilization of some real estate values in the Company’s markets. Further disruptions in the real estate market could significantly impair the value of the Company’s collateral and its ability to sell the collateral upon foreclosure.
Added
If real estate values decline, it is likely that the Company would be required to increase its allowance for credit losses.
Removed
This key role will be developed as we expand our overall risk management program. Our objectives for managing cybersecurity risk is to greatly minimize the impacts of external threats. This includes, but is not limited to, efforts to penetrate, disrupt or misuse our systems or information.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES At December 31, 2024, our premises and equipment had an aggregate net book value of approximately $20.7 million. We conduct our business through 12 branch offices. The branch offices are utilized by the community banking segment. In addition, the community banking segment has a corporate office, an operations center and two loan production offices.
Biggest changeITEM 2. PROPERTIES At December 31, 2025, our premises and equipment had an aggregate net book value of approximately $19.6 million. We conduct our business through 12 branch offices. The branch offices are utilized by the community banking segment. In addition, the community banking segment has a corporate office, an operations center and two loan production offices.
We believe that our office facilities are adequate to meet our present and immediately foreseeable needs. The following table sets forth certain information concerning the main and each branch office at December 31, 2024. Location Owned or Leased PENNSYLVANIA Main Office (Greene County): 100 North Market Street, Carmichaels, PA 15320 Branch Owned Barron P. "Pat" McCune, Jr.
We believe that our office facilities are adequate to meet our present and immediately foreseeable needs. The following table sets forth certain information concerning the main and each branch office at December 31, 2025. Location Owned or Leased PENNSYLVANIA Main Office (Greene County): 100 North Market Street, Carmichaels, PA 15320 Branch Owned Barron P. "Pat" McCune, Jr.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS At December 31, 2024, we were not involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business which, in the aggregate, involve amounts that management believes are immaterial to our financial condition, results of operations and cash flows. ITEM 4. MINE SAFETY DISCLOSURES None. 25 PART II
Biggest changeITEM 3. LEGAL PROCEEDINGS At December 31, 2025, we were not involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business which, in the aggregate, involve amounts that management believes are immaterial to our financial condition, results of operations and cash flows. ITEM 4. MINE SAFETY DISCLOSURES None. 26 PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeITEM 4. Mine Safety Disclosures. 25 PART II ITEM 5. Market for Registrant’s Common Equity, Related Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 26 ITEM 6. [Reserved] 26 ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 27 ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk 50
Biggest changeITEM 4. Mine Safety Disclosures. 26 PART II ITEM 5. Market for Registrant’s Common Equity, Related Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 27 ITEM 6. [Reserved] 27 ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 28 ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk 52

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAt December 31, 2024, there have been no restricted shares granted under the 2024 Plan. Issuer Purchases of Equity Securities The Company made the following purchases of its common stock during the three months ended December 31, 2024.
Biggest changeAt December 31, 2025, there have been 25,235 restricted shares granted under the 2024 Plan. Issuer Purchases of Equity Securities The Company did not repurchase any of its equity securities during the three months ended December 31, 2025.
Certain shares of Company common stock are held in “nominee” or “street” name and accordingly, the number of beneficial owners of such shares is not known or included in the foregoing number. Equity Compensation Plans The following table provides information at December 31, 2024, for compensation plans under which equity securities may be issued.
Certain shares of Company common stock are held in “nominee” or “street” name and accordingly, the number of beneficial owners of such shares is not known or included in the foregoing number. Equity Compensation Plans The following table provides information at December 31, 2025, for compensation plans under which equity securities may be issued.
The 2015 and 2021 Plans shall remain in effect as long as any awards are outstanding, but as a result of the approval of the 2024 Equity Incentive Plan, no more awards can be granted under the 2015 and 2021 Plans. (2) Represents shares available under the 2024 Plan (the "Share Limit") that can be issued.
The 2015 and 2021 Plans shall remain in effect as long as any awards are outstanding, but as a result of the approval of the 2024 Equity Incentive Plan, no more awards can be granted under the 2015 and 2021 Plans. (2) Represents 262,265 shares available under the 2024 Plan (the "Share Limit") that can be issued.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Company’s common stock is traded on the NASDAQ Global Market under the symbol “CBFV.” The approximate number of holders of record of the Company’s common stock as of March 12, 2025, was 584.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Company’s common stock is traded on the NASDAQ Global Market under the symbol “CBFV.” The approximate number of holders of record of the Company’s common stock as of March 6, 2026, was 563.
Plan Category Number of securities to be issued upon exercise of outstanding options warrants and rights Weighted-average exercise price of outstanding options warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (A)) (A) (B) (C) Equity compensation plans: Approved by stockholders 377,088 (1) $ 23.65 (1) 287,500 (2) Not approved by stockholders — — — Total 377,088 $ 23.65 287,500 (1) Represents stock options available to be exercised from Treasury Stock under the 2015 Equity Incentive Plan (the "2015 Plan") and stock options granted under the 2021 Equity Incentive Plan (the "2021 Plan") that can be issued from a reserve upon exercise.
Plan Category Number of securities to be issued upon exercise of outstanding options warrants and rights Weighted-average exercise price of outstanding options warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (A)) (A) (B) (C) Equity compensation plans: Approved by stockholders 223,794 (1) $ 24.13 (1) 262,265 (2) Not approved by stockholders — — — Total 223,794 $ 24.13 262,265 (1) Represents stock options available to be exercised from Treasury Stock under the 2015 Equity Incentive Plan (the "2015 Plan") and stock options granted under the 2021 Equity Incentive Plan (the "2021 Plan") that can be issued from a reserve upon exercise.
Removed
Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of the Publicly Announced Program Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program (2) October 1-31, 2024 1,092 $ 28.41 1,092 $ 6,980,522 November 1-30, 2024 5,547 28.78 5,547 6,821,989 December 1-31, 2024 5,531 28.84 5,531 6,663,913 Total 12,170 $ 28.77 12,170 (1) On July 22, 2024, the Company announced that the Board had approved a program commencing on July 25, 2024 to repurchase up to 5%, or 257,095 shares, of the Company's then outstanding common stock.
Removed
This repurchase program is set to expire on July 25, 2025. In connection with the program, the Company has purchased a total of 23,928 shares of the Company's common stock at an average price of $27.47 per share. (2) Based on the closing price of the Company's common stock on December 31, 2024, which was $28.58.

Item 7. Management's Discussion & Analysis

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

101 edited+27 added−39 removed74 unchanged
Biggest changeCRE loans are concentrated in the Pittsburgh metropolitan area. 34 The tables below provide further detail of the composition of the CRE portfolio as of December 31, 2024: (Dollars in thousands) CRE Nonowner Occupied Loans Outstanding Balance Percent Average Loan Size Average LTV (1) Retail Space $ 91,602 24.51 % $ 1,272 71.83 % Multifamily 89,142 23.86 % 768 78.27 % Warehouse Space 60,460 16.18 % 1,440 60.37 % Office Space 48,867 13.08 % 888 67.80 % Manufacturing 22,371 5.99 % 1,721 60.51 % Medical Facilities 19,167 5.13 % 1,065 63.66 % Senior Housing 13,877 3.71 % 1,388 59.85 % Hotels 3,357 0.90 % 3,357 43.00 % Oil & Gas 3,296 0.88 % 1,648 51.66 % Other 21,533 5.76 % 718 61.31 % Total Nonowner Occupied CRE $ 373,672 100.00 % $ 1,041 68.40 % (1) Based on collateral value at the time of loan origination.
Biggest changeThe tables below provide further detail of the composition of the CRE portfolio as of December 31, 2025: (Dollars in thousands) CRE Nonowner Occupied Loans Outstanding Balance Percent Average Loan Size Average LTV (1) Retail Space $ 111,023 25.57 % $ 1,500 61.56 % Multifamily 101,591 23.40 % 986 61.89 % Warehouse Space 77,856 17.93 % 2,049 55.90 % Office Space 57,168 13.17 % 1,243 57.26 % Manufacturing 21,391 4.93 % 2,139 42.86 % Medical Facilities 18,103 4.17 % 1,207 55.74 % Hotels 13,445 3.10 % 1,921 58.94 % Oil & Gas 4,740 1.09 % 1,580 57.94 % Senior Housing 3,223 0.74 % 3,223 41.29 % Other 25,638 5.90 % 884 59.26 % Total Nonowner Occupied CRE $ 434,178 100.00 % $ 1,332 58.49 % (1) Based on collateral value at the time of loan origination. 35 (Dollars in Thousands) CRE Owner Occupied Loans Outstanding Balance Percent Average Loan Size Average LTV (1) Retail Space $ 26,725 22.65 % $ 668 52.20 % Warehouse Space 20,558 17.42 % 791 42.23 % Office Space 9,000 7.63 % 429 72.60 % Medical Facilities 8,672 7.35 % 667 74.45 % Senior Housing 5,841 4.95 % 1,947 26.90 % Oil & Gas 4,616 3.91 % 659 65.96 % Manufacturing 2,928 2.48 % 325 58.44 % Hotels 1,993 1.69 % 1,993 74.73 % Other $ 37,669 31.92 % $ 477 53.02 % Total Owner Occupied CRE $ 118,002 100.00 % $ 593 53.74 % (1) Based on collateral value at the time of loan origination.
Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. A three-level of fair value hierarchy prioritizes the inputs used to measure fair value: Level 1 – Fair value is based on unadjusted quoted prices in active markets that are accessible to the Company for identical assets.
Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. A three-level fair value hierarchy prioritizes the inputs used to measure fair value: Level 1 – Fair value is based on unadjusted quoted prices in active markets that are accessible to the Company for identical assets.
The Company designates an asset as “special mention” if the asset has a potential weakness that warrants management’s close attention. The Company uses an nine-point internal risk rating system to monitor the credit quality of the overall loan portfolio. The first five categories are not considered criticized and are aggregated as one to four “pass” and five "pass-watch" rated.
The Company designates an asset as “special mention” if the asset has a potential weakness that warrants management’s close attention. The Company uses a nine-point internal risk rating system to monitor the credit quality of the overall loan portfolio. The first five categories are not considered criticized and are aggregated as one to four “pass” and five "pass-watch" rated.
Furthermore, the Company considers the inherent uncertainty in quantitative models that are built upon historical data. 29 Individually Evaluated Loans On a case-by-case basis, the Company may conclude that a loan should be evaluated on an individual basis based on its disparate risk characteristics.
Furthermore, the Company considers the inherent uncertainty in quantitative models that are built upon historical data. Individually Evaluated Loans On a case-by-case basis, the Company may conclude that a loan should be evaluated on an individual basis based on its disparate risk characteristics.
The weighting is judgmental and is based on the perceived level of appropriateness of the valuation methodology. Estimating the fair value involves the use of estimates and significant judgments that are based on a number of factors including 31 actual operating results.
The weighting is judgmental and is based on the perceived level of appropriateness of the valuation methodology. Estimating the fair value involves the use of estimates and significant judgments that are based on a number of factors including actual operating results.
At December 31, 2024 and December 31, 2023, we had no loans that were not classified as nonaccrual or 90 days past due where known information about possible credit problems of borrowers caused management to have serious concerns as to the ability of the borrowers to comply with present loan repayment terms and that may result in disclosure as nonaccrual or 90 days past due.
At December 31, 2025 and December 31, 2024, we had no loans that were not classified as nonaccrual or 90 days past due where known information about possible credit problems of borrowers caused management to have serious concerns as to the ability of the borrowers to comply with present loan repayment terms and that may result in disclosure as nonaccrual or 90 days past due.
Such agencies have, in the past, and may in the future require us to classify certain assets which management has not otherwise classified or require a classification more severe than established by management. The following table shows the principal amount of special mention and classified loans at December 31, 2024 and 2023.
Such agencies have, in the past, and may in the future require us to classify certain assets which management has not otherwise classified or require a classification more severe than established by management. The following table shows the principal amount of special mention and classified loans at December 31, 2025 and 2024.
(6) Capital ratios are for Community Bank only. 28 Critical Accounting Policies and Use of Critical Accounting Estimates Critical accounting policies are those that involve significant judgments, estimates and assumptions by management and that have, or could have, a material impact on the Company’s income or the carrying value of its assets. Allowance for Credit Losses (ACL).
(6) Capital ratios are for Community Bank only. 29 Critical Accounting Policies and Use of Critical Accounting Estimates Critical accounting policies are those that involve significant judgments, estimates and assumptions by management and that have, or could have, a material impact on the Company’s income or the carrying value of its assets. Allowance for Credit Losses (ACL).
The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the "more likely than not" test, no tax benefit is recorded. The Company did not have a deferred tax asset valuation allowance as of December 31, 2024 and December 31, 2023.
The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the "more likely than not" test, no tax benefit is recorded. The Company did not have a deferred tax asset valuation allowance as of December 31, 2025 and December 31, 2024.
Where Non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found herein. Refer to the "Reconciliations of Non-GAAP Financial Measures to GAAP" within this Item 7 for further information. Comparison of Financial Condition at December 31, 2024 and 2023 Assets.
Where Non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found herein. Refer to the "Reconciliations of Non-GAAP Financial Measures to GAAP" within this Item 7 for further information. Comparison of Financial Condition at December 31, 2025 and 2024 Assets.
As a result, changes in market interest rates have a greater impact on performance than the effects of inflation.
As a result, changes in market interest rates have a greater impact on performance than the effects of inflation. 51
The composition and maturities of the debt securities portfolio at December 31, 2024, are summarized in the following table. Maturities are based on the final contractual payment dates, and do not reflect the impact of prepayments or early redemptions that may occur.
The composition and maturities of the debt securities portfolio at December 31, 2025, are summarized in the following table. Maturities are based on the final contractual payment dates, and do not reflect the impact of prepayments or early redemptions that may occur.
The information at December 31, 2024 and 2023, and for the years ended December 31, 2024 and 2023 is derived in part from, and should be read together with, the Company's audited consolidated financial statements and notes included in this Report and should be read together therewith.
The information at December 31, 2025 and 2024, and for the years ended December 31, 2025 and 2024 is derived in part from, and should be read together with, the Company's audited consolidated financial statements and notes included in this Report and should be read together therewith.
The following table sets forth the composition of our securities portfolio at the dates indicated. 2024 2023 December 31, Amortized Cost Fair Value Amortized Cost Fair Value (Dollars in Thousands) Available-for-Sale Debt Securities: U.S.
The following table sets forth the composition of our securities portfolio at the dates indicated. 2025 2024 December 31, Amortized Cost Fair Value Amortized Cost Fair Value (Dollars in Thousands) Available-for-Sale Debt Securities: U.S.
Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Deemed to have an indefinite life and not subject to amortization, goodwill is instead tested for impairment at the reporting unit level at least annually on October 31 or more frequently if triggering events occur or impairment indicators exist.
Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Deemed to have an indefinite life and not subject to amortization, goodwill is instead tested for impairment at the reporting unit level at least annually or more frequently if triggering events occur or impairment indicators exist.
The information at December 31, 2022 and for the year ended December 31, 2022 is derived in part from audited financial statements that are not included in this Report.
The information at December 31, 2023 and for the year ended December 31, 2023 is derived in part from audited financial statements that are not included in this Report.
Selected Financial Data The following tables set forth selected historical financial and other data of the Company at and for the years ended December 31, 2024, 2023 and 2022.
Selected Financial Data The following tables set forth selected historical financial and other data of the Company at and for the years ended December 31, 2025, 2024 and 2023.
(5) Net interest margin represents net interest income divided by average total interest-earning assets. Net interest margin (GAAP) was 3.19% and 3.28% for the year ended December 31, 2024 and 2023, respectively. 42 Rate/Volume Analysis The following table presents the effects of changing rates and volumes on our net interest income for the years indicated.
(5) Net interest margin represents net interest income divided by average total interest-earning assets. Net interest margin (GAAP) was 3.55% and 3.19% for the year ended December 31, 2025 and 2024, respectively. 42 Rate/Volume Analysis The following table presents the effects of changing rates and volumes on our net interest income for the years indicated.
The Guideline Public Company method using trading activity of publicly traded companies that are most similar to the Company may also be considered when the banking industry has a sufficient level of mergers and acquisitions activity. The results of the income and market approaches may be weighted to determine the concluded fair value of the reporting unit.
The Guideline Public Company method using trading activity of publicly traded companies that are most similar to the Company may also be considered when the banking industry has a sufficient level of merger and acquisition activity. The results of the income and market approaches may be weighted to determine the concluded fair value of the reporting unit.
The decrease in consumer loans resulted from a reduction in indirect automobile loan production due to rising market interest rates and the discontinuation of this product offering as of June 30, 2023. This portfolio is expected to continue to decline as resources are allocated and production efforts are focused on more profitable commercial products.
The decrease in consumer loans resulted from a reduction in indirect automobile loan production due to the discontinuation of this product offering as of June 30, 2023. This portfolio is expected to continue to decline as resources are allocated and production efforts are focused on more profitable commercial products.
(3) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. Net interest rate spread (GAAP) was 2.47% and 2.73% for the year ended December 31, 2024 and 2023, respectively. (4) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(3) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. Net interest rate spread (GAAP) was 2.95% and 2.47% for the year ended December 31, 2025 and 2024, respectively. (4) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
The following table summarizes the scheduled repayments of our loan portfolio at December 31, 2024. Demand loans, loans having no stated repayment schedule or maturity, and overdraft loans are reported as being due in one year or less.
Loan Portfolio Maturities and Yields. The following table summarizes the scheduled repayments of our loan portfolio at December 31, 2025. Demand loans, loans having no stated repayment schedule or maturity, and overdraft loans are reported as being due in one year or less.
This arrangement is subject to annual renewal, incurs no service charge, and is secured by a blanket security agreement on $695.5 million of residential and commercial mortgage loans and the Bank’s investment in FHLB stock.
This arrangement is subject to annual renewal, incurs no service charge, and is secured by a blanket security agreement on $747.7 million of residential and commercial mortgage loans and the Bank’s investment in FHLB stock.
Net charge-offs for the year ended December 31, 2024 were $281,000 primarily due to charge-offs of $357,000 for consumer indirect, $127,000 for CRE non-owner occupied and $114,000 for consumer revolving lines of credit. This was partially offset by recoveries of $175,000 for commercial and industrial and $133,000 for consumer indirect loans.
This was partially offset by recoveries of $136,000 for commercial and industrial loans, $106,000 for consumer indirect automobile loans and $94,000 for consumer revolving lines of credit. Net charge-offs for the year ended December 31, 2024 were $281,000 primarily due to charge-offs of $357,000 for consumer indirect, $127,000 for CRE non-owner occupied and $114,000 for consumer revolving lines of credit.
The Company operates two segments – Community Banking segment and Insurance Brokerage Services segment. The Company has assigned 100% of the goodwill to the Community Banking segment. Determining the fair value of a reporting unit under the goodwill impairment test is judgmental and often involves the use of significant estimates and assumptions.
The Company operates one segments – Community Banking. The Company has assigned 100% of the goodwill to the Community Banking segment. Determining the fair value of a reporting unit under the goodwill impairment test is judgmental and often involves the use of significant estimates and assumptions.
Accrued interest receivable on loans is reported as a component of accrued interest receivable and other assets on the Consolidated Statement of Financial Condition, totaled $3.9 million at December 31, 2024 and is excluded from the estimate of credit losses.
Accrued interest receivable on loans is reported as a component of accrued interest receivable and other assets on the Consolidated Statement of Financial Condition, totaled $4.4 million at December 31, 2025 and is excluded from the estimate of credit losses.
The Bank also maintains multiple line of credit arrangements with various unaffiliated banks totaling $50.0 million as of December 31, 2024. At December 31, 2024, the Bank had funding commitments totaling $167.6 million, consisting primarily of commitments to originate loans, unused lines of credit and letters of credit.
The Bank also maintains multiple line of credit arrangements with various unaffiliated banks totaling $50.0 million as of December 31, 2025. At December 31, 2025, the Bank had funding commitments totaling $196.4 million, consisting primarily of commitments to originate loans, unused lines of credit and letters of credit.
Brokered time deposits totaled $39.0 million as of December 31, 2024, compared to $29.0 million at December 31, 2023, all of which mature within three months and were utilized to fund the purchase of floating rate CLO securities. FDIC insured deposits totaled approximately 62.5% of total deposits while an additional 15.9% of deposits were collateralized with investment securities.
Brokered time deposits totaled $98.5 million as of December 31, 2025, compared to $39.0 million at December 31, 2024, all of which mature within three months and were utilized to fund the purchase of floating rate CLO securities. FDIC insured deposits totaled approximately 59.5% of total deposits while an additional 15.7% of deposits were collateralized with investment securities.
The estimates are based on the same methodologies and assumptions used for the Bank's regulatory reporting requirements. Of the amount at December 31, 2024, an estimated $40.8 million are uninsured time deposits and the following table sets forth their maturity.
The estimates are based on the same methodologies and assumptions used for the Bank's regulatory reporting requirements. Of the amount at December 31, 2025, an estimated $44.9 million are uninsured time deposits and the following table sets forth their maturity.
The Bank also maintains a Borrower-In-Custody of Collateral line of credit agreement with the FRB for $84.0 million that requires monthly certification of collateral, is subject to annual renewal, incurs no service charge and is secured by $108.3 million of commercial and consumer indirect auto loans.
The Bank also maintains a Borrower-In-Custody of Collateral line of credit agreement with the FRB for $71.2 million that requires monthly certification of collateral, is subject to annual renewal, incurs no service charge and is secured by $86.6 million of commercial and consumer indirect auto loans.
Accrued interest receivable on available of sale securities, also a component of accrued interest receivable and other assets on the Consolidated Statement of Financial Condition, totaled $1.7 million, at December 31, 2024 and is excluded from the estimate of credit losses. Fair Value Measurements.
Accrued interest receivable on available-for-sale securities, also a component of accrued interest receivable and other assets on the Consolidated Statement of Financial Condition, totaled $2.0 million, at December 31, 2025 and is excluded from the estimate of credit losses. Fair Value Measurements.
The Bank believes that it had sufficient liquidity at December 31, 2024, to satisfy its short- and long-term liquidity needs at that date. The Bank’s most liquid assets are cash and due from banks, which totaled $49.6 million at December 31, 2024. Unpledged securities, which provide an additional source of liquidity, totaled $86.0 million.
The Bank believes that it had sufficient liquidity at December 31, 2025, to satisfy its short- and long-term liquidity needs at that date. The Bank’s most liquid assets are cash and due from banks, which totaled $31.7 million at December 31, 2025. Unpledged securities, which provide an additional source of liquidity, totaled $107.3 million.
At December 31, 2024, certificates of deposit due within one year of that date totaled $271.8 million, or 91.6% of total certificates of deposit. While liquidity levels at December 31, 2024 are currently sufficient, if these certificates of deposit do not remain with the Bank, the Bank may be required to seek other sources of funds.
At December 31, 2025, certificates of deposit due within one year of that date totaled $279.2 million, or 89.4% of total certificates of deposit. While liquidity levels at December 31, 2025 are currently sufficient, if these certificates of deposit do not remain with the Bank, the Bank may be required to seek other sources of funds.
The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. 30 The Company attempts to maximize observable inputs and limit the use of unobservable inputs when developing fair value measurements, Fair value measurements for assets where there exists limited or no observable market data and that are based primarily upon the Company’s or other third-party’s estimates, are often calculated based on the characteristics of the asset, the economic and competitive environment and other such factors.
The Company attempts to maximize observable inputs and limit the use of unobservable inputs when developing fair value measurements, Fair value measurements for assets where there exists limited or no observable market data and that are based primarily upon the Company’s or other third-party’s estimates, are often calculated based on the characteristics of the asset, the economic and competitive environment and other such factors.
In addition, the Bank maintains a credit 48 arrangement with the FHLB with a maximum borrowing limit of approximately $489.5 million and available borrowing capacity of $467.6 million as of December 31, 2024. At December 31, 2024, there were no standby letters of credit utilized to collateralize public deposits in excess of the level insured by the FDIC.
In addition, the Bank maintains a credit arrangement with the FHLB with a maximum borrowing limit of approximately $528.0 million and available borrowing capacity of $506.1 million as of December 31, 2025. At December 31, 2025, there were no standby letters of credit utilized to collateralize public deposits in excess of the level insured by the FDIC.
Our concentration management policy is approved by the Company's Board of Directors and is used to ensure a high-quality, well diversified portfolio that is consistent with our overall objective of maintaining an acceptable level of risk. The Company's CRE portfolio totaled $485.5 million at December 31, 2024, an increase of $18.4 million, or 3.9%, compared to December 31, 2023.
Our concentration management policy is approved by the Company's Board of Directors and is used to ensure a high-quality, well diversified portfolio that is consistent with our overall objective of maintaining an acceptable level of risk. The Company's CRE portfolio totaled $552.2 million at December 31, 2025, an increase of $66.7 million, or 13.7%, compared to December 31, 2024.
December 31, 2024 2023 2022 (Dollars in Thousands) Selected Financial Condition Data: Assets $ 1,481,564 $ 1,456,091 $ 1,408,938 Cash and Due From Banks 49,572 68,223 103,700 Securities 262,153 207,095 190,058 Loans, Net 1,082,821 1,100,689 1,037,054 Deposits 1,283,517 1,267,159 1,268,503 Short-Term Borrowings — — 8,060 Other Borrowed Funds 34,718 34,678 14,638 Stockholders’ Equity 147,378 139,834 110,155 Year Ended December 31, 2024 2023 2022 (Dollars in Thousands) Selected Operating Data: Interest and Dividend Income $ 76,131 $ 62,225 $ 47,716 Interest Expense 30,063 17,672 4,781 Net Interest and Dividend Income 46,068 44,553 42,935 Provision (Recovery) for Credit Losses - Loans 379 (284) 3,784 Provision (Recovery) for Credit Losses - Unfunded Commitments 191 (218) — Net Interest and Dividend Income After Net Provision (Recovery) for Credit Losses 45,498 45,055 39,151 Noninterest Income 5,494 24,012 9,820 Noninterest Expense 35,649 38,782 34,891 Income Before Income Tax Expense 15,343 30,285 14,080 Income Tax Expense 2,749 7,735 2,833 Net Income $ 12,594 $ 22,550 $ 11,247 27 At or For the Year Ended December 31, 2024 2023 2022 Per Common Share Data: Earnings Per Common Share - Basic $ 2.45 $ 4.41 $ 2.19 Earnings Per Common Share - Diluted 2.38 4.40 2.18 Dividends Per Common Share 1.00 1.00 0.96 Dividend Payout Ratio (1) 42.02 % 22.73 % 44.04 % Book Value Per Common Share $ 28.71 $ 27.32 $ 21.60 Common Shares Outstanding 5,132,654 5,118,713 5,100,189 At or For the Year Ended December 31, 2024 2023 2022 Selected Financial Ratios: Return on Average Assets 0.84 % 1.60 % 0.80 % Return on Average Equity 8.77 19.42 9.56 Average Interest-Earning Assets to Average Interest-Bearing Liabilities 134.78 141.85 148.00 Average Equity to Average Assets 9.56 8.25 8.36 Net Interest Rate Spread (2) 2.47 2.73 3.07 Net Interest Rate Spread (Non-GAAP) (2)(4) 2.48 2.74 3.08 Net Interest Margin (3) 3.19 3.28 3.24 Net Interest Margin (Non-GAAP) (3)(4) 3.20 3.29 3.25 Net Charge-offs (Recoveries) to Average Loans 0.03 (0.05) 0.25 Noninterest Expense to Average Assets 2.37 2.76 2.48 Efficiency Ratio (5) 69.14 56.56 66.14 Asset Quality Ratios: Allowance for Credit Losses to Total Loans 0.90 % 0.87 % 1.22 % Allowance for Credit Losses to Nonperforming Loans 548.07 433.35 221.06 Allowance for Credit Losses to Nonaccrual Loans 548.07 433.35 320.64 Delinquent and Nonaccrual Loans to Total Loans 0.72 0.62 0.81 Nonperforming Loans to Total Loans 0.16 0.20 0.55 Nonperforming Loans to Total Assets 0.12 0.15 0.41 Nonperforming Assets to Total Assets 0.12 0.16 0.41 Capital Ratios: Common Equity Tier 1 Capital to Risk-Weighted Assets (6) 14.78 % 13.64 % 12.33 % Tier 1 Capital to Risk-Weighted Assets (6) 14.78 13.64 12.33 Total Capital to Risk-Weighted Assets (6) 15.79 14.61 13.58 Tier 1 Leverage Capital to Adjusted Total Assets (6) 9.98 10.19 8.66 Other: Number of Branch Offices 12 13 13 Number of Full-Time Equivalent Employees 160 161 197 (1) Represents dividends per share divided by net income per share.
December 31, 2025 2024 2023 (Dollars in Thousands) Selected Financial Condition Data: Assets $ 1,547,693 $ 1,481,564 $ 1,456,091 Cash and Due From Banks 31,693 49,572 68,223 Securities 279,895 262,153 207,095 Loans, Net 1,152,144 1,082,821 1,100,689 Deposits 1,339,805 1,283,517 1,267,159 Other Borrowed Funds 34,758 34,718 34,678 Stockholders’ Equity 157,537 147,378 139,834 Year Ended December 31, 2025 2024 2023 (Dollars in Thousands) Selected Operating Data: Interest and Dividend Income $ 75,939 $ 76,131 $ 62,225 Interest Expense 25,164 30,063 17,672 Net Interest and Dividend Income 50,775 46,068 44,553 Provision (Recovery) for Credit Losses - Loans 534 379 (284) Provision (Recovery) for Credit Losses - Unfunded Commitments 55 191 (218) Net Interest and Dividend Income After Net Provision (Recovery) for Credit Losses 50,186 45,498 45,055 Noninterest (Loss) Income (7,230) 5,494 24,012 Noninterest Expense 37,656 35,649 38,782 Income Before Income Tax Expense 5,300 15,343 30,285 Income Tax Expense 397 2,749 7,735 Net Income $ 4,903 $ 12,594 $ 22,550 28 At or For the Year Ended December 31, 2025 2024 2023 Per Common Share Data: Earnings Per Common Share - Basic $ 0.97 $ 2.45 $ 4.41 Earnings Per Common Share - Diluted 0.92 2.38 4.40 Dividends Per Common Share 1.02 1.00 1.00 Dividend Payout Ratio (1) 110.87 % 42.02 % 22.73 % Book Value Per Common Share $ 31.28 $ 28.71 $ 27.32 Common Shares Outstanding 5,036,509 5,132,654 5,118,713 At or For the Year Ended December 31, 2025 2024 2023 Selected Financial Ratios: Return on Average Assets 0.33 % 0.84 % 1.60 % Return on Average Equity 3.27 8.77 19.42 Average Interest-Earning Assets to Average Interest-Bearing Liabilities 134.62 134.78 141.85 Average Equity to Average Assets 9.97 9.56 8.25 Net Interest Rate Spread (2) 2.95 2.47 2.73 Net Interest Rate Spread (Non-GAAP) (2)(4) 2.97 2.48 2.74 Net Interest Margin (3) 3.55 3.19 3.28 Net Interest Margin (Non-GAAP) (3)(4) 3.58 3.20 3.29 Net Charge-offs (Recoveries) to Average Loans 0.02 0.03 (0.05) Noninterest Expense to Average Assets 2.51 2.37 2.76 Efficiency Ratio (5) 86.48 69.14 56.56 Asset Quality Ratios: Allowance for Credit Losses to Total Loans 0.87 % 0.90 % 0.87 % Allowance for Credit Losses to Nonperforming Loans 190.51 548.07 433.35 Delinquent and Nonaccrual Loans to Total Loans 0.86 0.72 0.62 Nonperforming Loans to Total Loans 0.46 0.16 0.20 Nonperforming Loans to Total Assets 0.34 0.12 0.15 Nonperforming Assets to Total Assets 0.34 0.12 0.16 Capital Ratios: Common Equity Tier 1 Capital to Risk-Weighted Assets (6) 13.92 % 14.78 % 13.64 % Tier 1 Capital to Risk-Weighted Assets (6) 13.92 14.78 13.64 Total Capital to Risk-Weighted Assets (6) 14.89 15.79 14.61 Tier 1 Leverage Capital to Adjusted Total Assets (6) 10.15 9.98 10.19 Other: Number of Branch Offices 12 12 13 Number of Full-Time Equivalent Employees 172 160 161 (1) Represents dividends per share divided by net income per share.
Such obligations include operating leases for premises and equipment, agreements with respect to borrowed funds and deposit liabilities and agreements with respect to investments. The following tables present certain of our contractual obligations at December 31, 2024.
In the ordinary course of its operations, the Company enters into certain contractual obligations. Such obligations include operating leases for premises and equipment, agreements with respect to borrowed funds and deposit liabilities and agreements with respect to investments. The following tables present certain of our contractual obligations at December 31, 2025.
Year Ended December 31, 2024 2023 Real Estate: Residential — % 0.05 % Commercial 0.03 (0.01) Construction — — Commercial and Industrial (0.15) (0.89) Consumer 0.35 0.14 Other — — Total Loans 0.03 % (0.05) % Allocation of Allowance for Credit Losses.
Year Ended December 31, 2025 2024 Real Estate: Residential — % — % Commercial — 0.03 Construction — — Commercial and Industrial 0.06 (0.15) Consumer 0.19 0.35 Other — — Total Loans 0.02 % 0.03 % 47 Allocation of Allowance for Credit Losses.
The special mention category includes assets that are currently protected but are below average quality, resulting in an undue credit risk, but not to the point of justifying a substandard classification.
The criticized rating categories used by management generally follow bank regulatory definitions. The special mention category includes assets that are currently protected but are below average quality, resulting in an undue credit risk, but not to the point of justifying a substandard classification.
The fair value measure is based on the value that those transactions indicate. These approaches involve significant estimates and assumptions. In the application of the income approach, fair value of a reporting unit is determined using a discounted cash flow analysis. The income approach relies on Level 3 inputs along with a market-derived cost of capital when measuring fair value.
The fair value measure is based on the value that those transactions indicate. These approaches involve significant estimates and assumptions. 31 In the application of the income approach, fair value of a reporting unit is determined using a discounted cash flow analysis.
The following table sets forth average balance sheets, average yields and costs, and certain other information for the years indicated. Tax-equivalent yield adjustments have been made for tax exempt loan and securities income utilizing a marginal federal income tax rate of 21%. All average balances are daily average balances. Nonaccrual loans are included in the computation of average balances only.
Tax-equivalent yield adjustments have been made for tax exempt loan and securities income utilizing a marginal federal income tax rate of 21%. All average balances are daily average balances. Nonaccrual loans are included in the computation of average balances only.
The following table sets forth the composition of the Company’s loan portfolio by type of loan at the dates indicated. 2024 2023 December 31, Amount Percent Amount Percent (Dollars in Thousands) Real Estate: Residential $ 337,990 30.9 % $ 347,808 31.3 % Commercial 485,513 44.4 467,154 42.1 Construction 54,705 5.0 43,116 3.9 Commercial and Industrial 112,047 10.3 111,278 10.0 Consumer 70,508 6.5 111,643 10.1 Other 31,863 2.9 29,397 2.6 Total Loans 1,092,626 100.0 % 1,110,396 100.0 % Allowance for Credit Losses (9,805) (9,707) Loans, Net $ 1,082,821 $ 1,100,689 The Company's loan portfolio is a mix of consumer and commercial credits.
The following table sets forth the composition of the Company’s loan portfolio by type of loan at the dates indicated. 2025 2024 December 31, Amount Percent Amount Percent (Dollars in Thousands) Real Estate: Residential $ 329,237 28.3 % $ 337,990 30.9 % Commercial 552,180 47.5 485,513 44.4 Construction 45,419 3.9 54,705 5.0 Commercial and Industrial 161,081 13.9 112,047 10.3 Consumer 42,876 3.7 70,508 6.5 Other 31,467 2.7 31,863 2.9 Total Loans 1,162,260 100.0 % 1,092,626 100.0 % Allowance for Credit Losses (10,116) (9,805) Loans, Net $ 1,152,144 $ 1,082,821 The Company's loan portfolio is a mix of consumer and commercial credits.
The FTE basis adjusts for the tax benefit of income on certain tax-exempt loans and securities using the federal statutory income tax rate of 21 percent. We believe the presentation of net interest income on a FTE basis ensures comparability of net interest income arising from both taxable and tax-exempt sources and is consistent with industry practice.
We believe the presentation of net interest income on a FTE basis ensures comparability of net interest income arising from both taxable and tax-exempt sources and is consistent with industry practice.
Average interest bearing deposits at other banks increased $34.8 million, primarily related to changes in deposits and loans, and there was a 1 bps increase in average yield due to an increase in Fed interest rates.
Average interest bearing deposits at other banks decreased $59.1 million, primarily related to changes in deposits and loans, and there was a 108 bps decrease in average yield due to recent decreases in Fed interest rates.
Excluding the $41.5 million decrease in indirect automobile loans, total loans increased $23.7 million, or 1.1%. Average loans, net for the year ended December 31, 2024 decreased $3.3 million compared to the year ended December 31, 2023. Loan Portfolio Composition.
Excluding the $29.6 million decrease in indirect automobile loans, total loans increased $99.3 million, or 9.6%. Average net loans for the year ended December 31, 2025 increased $34.7 million compared to the year ended December 31, 2024. 34 Loan Portfolio Composition.
The following table reconciles net interest income, net interest spread and net interest margin on a FTE basis for the periods indicated: Year Ended December 31, 2024 2023 (Dollars in Thousands) Interest Income per Consolidated Statements of Income (GAAP) $ 76,131 $ 62,225 Adjustment to FTE Basis 161 155 Interest Income (Non-GAAP) 76,292 62,380 Interest Expense per Consolidated Statements of Income (GAAP) 30,063 17,672 Net Interest Income (Non-GAAP) $ 46,229 $ 44,708 Net Interest Income (GAAP) $ 46,068 $ 44,553 Divided by : Average Interest-Earning Assets $ 1,444,514 $ 1,358,579 Net Interest Margin (GAAP) 3.19 % 3.28 % Adjustment to FTE Basis 0.01 0.01 Net Interest Margin (Non-GAAP) 3.20 % 3.29 % Net Interest Rate Spread (GAAP) 2.47 % 2.73 % Adjustment to FTE Basis 0.01 0.01 Net Interest Rate Spread (Non-GAAP) 2.48 % 2.74 % Tangible book value per common share is a Non-GAAP measure and is calculated based on tangible common equity divided by period-end common shares outstanding.
The following table reconciles net interest income, net interest spread and net interest margin on a FTE basis for the periods indicated: Year Ended December 31, 2025 2024 (Dollars in Thousands) Interest Income per Consolidated Statements of Income (GAAP) $ 75,939 $ 76,131 Adjustment to FTE Basis 392 161 Interest Income (Non-GAAP) 76,331 76,292 Interest Expense per Consolidated Statements of Income (GAAP) 25,164 30,063 Net Interest Income (Non-GAAP) $ 51,167 $ 46,229 Net Interest Income (GAAP) $ 50,775 $ 46,068 Divided by : Average Interest-Earning Assets $ 1,428,371 $ 1,444,514 Net Interest Margin (GAAP) 3.55 % 3.19 % Adjustment to FTE Basis 0.03 0.01 Net Interest Margin (Non-GAAP) 3.58 % 3.20 % Net Interest Rate Spread (GAAP) 2.95 % 2.47 % Adjustment to FTE Basis 0.02 0.01 Net Interest Rate Spread (Non-GAAP) 2.97 % 2.48 % 48 Tangible book value per common share is a Non-GAAP measure and is calculated based on tangible common equity divided by period-end common shares outstanding.
The allocation of the allowance by category is not necessarily indicative of future losses and does not restrict the use of the allowance to absorb losses in any category. 2024 2023 December 31, Amount Percent of Total Loans Amount Percent of Total Loans (Dollars in Thousands) Real Estate: Residential $ 2,926 30.9 % $ 3,129 31.3 % Commercial 3,103 44.4 2,630 42.1 Construction 1,264 5.0 639 3.9 Commercial and Industrial 1,584 10.3 1,693 10.0 Consumer 687 6.5 1,367 10.1 Other 241 2.9 249 2.6 Total Allocated Allowance 9,805 100.0 9,707 100.0 Unallocated — — — — Total Allowance for Credit Losses $ 9,805 100.0 % $ 9,707 100.0 % Reconciliations of Non-GAAP Financial Measures to GAAP Reconciliations of Non-GAAP financial measures discussed in this Report to the most directly comparable GAAP financial measures are included in the following tables. 47 Interest income on interest-earning assets, net interest rate spread and net interest margin are presented on a fully tax-equivalent (“FTE”) basis.
The allocation of the allowance by category is not necessarily indicative of future losses and does not restrict the use of the allowance to absorb losses in any category. 2025 2024 December 31, Amount Percent of Total Loans Amount Percent of Total Loans (Dollars in Thousands) Real Estate: Residential $ 2,526 28.3 % $ 2,926 30.9 % Commercial 3,153 47.5 3,103 44.4 Construction 1,205 3.9 1,264 5.0 Commercial and Industrial 2,562 13.9 1,584 10.3 Consumer 450 3.7 687 6.5 Other 220 2.7 241 2.9 Total Allocated Allowance 10,116 100.0 9,805 100.0 Unallocated — — — — Total Allowance for Credit Losses $ 10,116 100.0 % $ 9,805 100.0 % Reconciliations of Non-GAAP Financial Measures to GAAP Reconciliations of Non-GAAP financial measures discussed in this Report to the most directly comparable GAAP financial measures are included in the following tables.
Recent Accounting Pronouncements and Developments New accounting pronouncements that were adopted in the current period or will be adopted in a future period are discussed in Note 1 – Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements, which is included in Part IV, Item 15 of this Report.
Recent Accounting Pronouncements and Developments New accounting pronouncements that were adopted in the current period or will be adopted in a future period are discussed in Note 1 – Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements, which is included in Part IV, Item 15 of this Report. 32 Explanation of Use of Non-GAAP Financial Measures In addition to traditional measures presented in accordance with generally accepted accounting principles (“GAAP”), we use, and this Report contains or references, certain Non-GAAP financial measures.
December 31, 2024 2023 (Dollars in Thousands) Less than 0.25% $ 1,493 $ 8,009 0.25% to 0.49% 3,707 5,512 0.50% to 0.99% 2,489 5,139 1.00% to 1.49% 2,932 4,316 1.50% to 1.99% 6,001 3,626 2.00% to 2.49% 9,753 6,220 2.49% to 2.99% 1,056 146 3.00% to 3.99% 16,475 604 4.00% to 4.99% 224,230 145,475 5.00% or Greater 28,733 51,594 Total Time Deposits $ 296,869 $ 230,641 37 The following table sets forth, by interest rate ranges and scheduled maturity, information concerning our time deposits at the date indicated.
December 31, 2025 2024 (Dollars in Thousands) Less than 0.25% $ 510 $ 1,493 0.25% to 0.49% 2,460 3,707 0.50% to 0.99% 402 2,489 1.00% to 1.49% 10,554 2,932 1.50% to 1.99% 8,289 6,001 2.00% to 2.49% 59,592 9,753 2.49% to 2.99% 1,989 1,056 3.00% to 3.99% 216,602 16,475 4.00% to 4.99% 12,051 224,230 5.00% or Greater 4 28,733 Total Time Deposits $ 312,453 $ 296,869 The following table sets forth, by interest rate ranges and scheduled maturity, information concerning our time deposits at the date indicated.
December 31, 2024 2023 (Dollars in Thousands) Special Mention $ 33,543 $ 54,978 Substandard 6,854 14,457 Doubtful — — Loss — — Total $ 40,397 $ 69,435 The total amount of special mention and classified loans decreased $29.0 million, or 41.8%, to $40.4 million at December 31, 2024, compared to $69.4 million at December 31, 2023.
December 31, 2025 2024 (Dollars in Thousands) Special Mention $ 20,199 $ 33,543 Substandard 5,649 6,854 Doubtful — — Loss — — Total $ 25,848 $ 40,397 45 The total amount of special mention and classified loans decreased $14.5 million, or 36.0%, to $25.8 million at December 31, 2025, compared to $40.4 million at December 31, 2024.
The following table sets forth the distribution of our average deposit accounts, by account type, for the years indicated. 2024 2023 Year Ended December 31, Average Balance Percent Weighted Average Rate Average Balance Percent Weighted Average Rate (Dollars in Thousands) Noninterest-Bearing Demand Accounts $ 270,528 20.7 % — % $ 326,408 26.0 % — % Interest-Bearing Demand Accounts 326,073 24.9 2.27 354,060 28.2 1.90 Money Market Accounts 215,864 16.5 3.11 199,962 15.9 2.28 Savings Accounts 180,647 13.8 0.11 220,146 17.5 0.09 Time Deposits 314,510 24.1 4.49 156,310 12.4 3.16 Total Deposits $ 1,307,622 100.0 % 2.17 % $ 1,256,886 100.0 % 1.31 % The following table sets forth time deposits classified by interest rate as of the dates indicated.
The following table sets forth the distribution of our average deposit accounts, by account type, for the years indicated. 2025 2024 Year Ended December 31, Average Balance Percent Weighted Average Rate Average Balance Percent Weighted Average Rate (Dollars in Thousands) Noninterest-Bearing Demand Accounts $ 273,295 21.1 % — % $ 270,528 20.7 % — % Interest-Bearing Demand Accounts 342,698 26.5 2.01 326,073 24.9 2.27 Money Market Accounts 223,093 17.2 2.74 215,864 16.5 3.11 Savings Accounts 171,594 13.2 0.10 180,647 13.8 0.11 Time Deposits 284,727 22.0 3.61 314,510 24.1 4.49 Total Deposits $ 1,295,407 100.0 % 1.81 % $ 1,307,622 100.0 % 2.17 % 37 The following table sets forth time deposits classified by interest rate as of the dates indicated.
The change was driven by decreases in consumer loans and residential mortgage loans of $41.1 million and $9.8 million, respectively, partially offset by increases in commercial real estate loans, construction real estate loans, other loans and commercial and industrial loans of $18.4 million, $11.6 million, $2.5 million and $769,000, respectively.
The change was driven by increases in commercial real estate loans and commercial and industrial loans of $66.7 million and $49.0 million, respectively, partially offset by decreases in consumer loans, residential mortgage loans, construction real estate loans and other loans of $27.6 million, $9.3 million, $8.8 million and $396,000, respectively.
December 31, 2024 2023 (Dollars in Thousands, Except Share and Per Share Data) Stockholders' Equity (GAAP) (Numerator) $ 147,378 $ 139,834 Goodwill and Other Intangible Assets, Net (9,732) (10,690) Tangible Common Equity or Tangible Book Value (Non-GAAP) (Numerator) $ 137,646 $ 129,144 Common Shares Outstanding (Denominator) 5,132,654 5,118,713 Book Value per Common Share (GAAP) $ 28.71 $ 27.32 Tangible Book Value per Common Share (Non-GAAP) $ 26.82 $ 25.23 Liquidity Liquidity is the ability to meet current and future financial obligations of a short-term nature.
December 31, 2025 2024 (Dollars in Thousands, Except Share and Per Share Data) Assets (GAAP) $ 1,547,693 $ 1,481,564 Goodwill and Other Intangible Assets, Net (9,732) (9,732) Tangible Assets (Non-GAAP) $ 1,537,961 $ 1,471,832 Stockholders' Equity (GAAP) (Numerator) $ 157,537 $ 147,378 Goodwill and Other Intangible Assets, Net (9,732) (9,732) Tangible Common Equity or Tangible Book Value (Non-GAAP) (Numerator) $ 147,805 $ 137,646 Tangible Common Equity to Tangible Assets (Non-GAAP) 9.6 % 9.4 % Common Shares Outstanding (Denominator) 5,036,509 5,132,654 Book Value per Common Share (GAAP) $ 31.28 $ 28.71 Tangible Book Value per Common Share (Non-GAAP) $ 29.35 $ 26.82 Liquidity Liquidity is the ability to meet current and future financial obligations of a short-term nature.
The change is primarily related to net funding of loans. Securities. Securities increased $55.1 million, or 26.6%, to $262.2 million at December 31, 2024, compared to $207.1 million at December 31, 2023.
The change is primarily related to net funding of loans and securities. Securities. Securities increased $17.7 million, or 6.8%, to $279.9 million at December 31, 2025, compared to $262.2 million at December 31, 2024.
The Company is a separate legal entity from the Bank and must provide for its own liquidity to pay dividends to stockholders, to pay principal and interest on its subordinated debt and for other corporate purposes. At December 31, 2024, the Company (on an unconsolidated basis) had liquid assets of $16.2 million.
For the year ended December 31, 2025, the Bank had net loan originations of $69.6 million. 49 The Company is a separate legal entity from the Bank and must provide for its own liquidity to pay dividends to stockholders, to pay principal and interest on its subordinated debt and for other corporate purposes.
Borrowings for each period consisted of $20.0 million of FHLB advances entered into during 2023 for a term of 24 months at 4.92%, the proceeds of which were utilized to match fund originations within the Bank’s commercial and industrial loan portfolio and $14.7 million related to the Company's unsecured subordinated debt obligation. Stockholders’ Equity.
Borrowings at December 31, 2024 consisted of $20.0 million of FHLB advances entered into in June 2023 for a term of 24 months at 4.92%. The proceeds of the FHLB borrowings were utilized to match fund originations within the Bank’s commercial and industrial loan portfolio.
December 31, 2024 Nonaccrual With No ACL Nonaccrual With ACL Loans Past Due 90 Days Still Accruing Total Nonperforming Assets (Dollars in Thousands) Nonaccrual Loans: Real Estate: Residential $ 1,388 $ — $ — $ 1,388 Commercial 188 — — 188 Consumer 213 — — 213 Total Nonaccrual Loans $ 1,789 $ — $ — 1,789 Other Real Estate Owned: Residential — Total Other Real Estate Owned — Total Nonperforming Assets $ 1,789 December 31, 2023 Nonaccrual With No ACL Nonaccrual With ACL Loans Past Due 90 Days Still Accruing Total Nonperforming Assets (Dollars in Thousands) Nonaccrual Loans: Real Estate: Residential $ 1,476 $ — $ — $ 1,476 Commercial 360 — — 360 Commercial and Industrial 316 — — 316 Consumer 88 — — 88 Total Nonaccrual Loans $ 2,240 $ — $ — 2,240 Other Real Estate Owned: Residential 162 Total Other Real Estate Owned 162 Total Nonperforming Assets $ 2,402 At December 31, 2024 and December 31, 2023, we had no loans 90 days or more past due that were still accruing interest.
December 31, 2025 Nonaccrual With No ACL Nonaccrual With ACL Loans Past Due 90 Days Still Accruing Total Nonperforming Assets (Dollars in Thousands) Nonaccrual Loans: Real Estate: Residential $ 2,210 $ 521 $ — $ 2,731 Commercial 2,057 — — 2,057 Construction 131 284 — 415 Consumer 107 — — 107 Total Nonaccrual Loans $ 4,505 $ 805 $ — 5,310 Total Other Real Estate Owned — Total Nonperforming Assets $ 5,310 December 31, 2024 Nonaccrual With No ACL Nonaccrual With ACL Loans Past Due 90 Days Still Accruing Total Nonperforming Assets (Dollars in Thousands) Nonaccrual Loans: Real Estate: Residential $ 1,388 $ — $ — $ 1,388 Commercial 188 — — 188 Consumer 213 — — 213 Total Nonaccrual Loans $ 1,789 $ — $ — 1,789 Total Other Real Estate Owned — Total Nonperforming Assets $ 1,789 At December 31, 2025 and December 31, 2024, we had no loans 90 days or more past due that were still accruing interest.
The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense. 2024 2023 Year Ended December 31, Average Balance Interest and Dividends Yield/ Cost Average Balance Interest and Dividends Yield/ Cost (Dollars in Thousands) Assets: Interest-Earning Assets: Loans, Net (1) $ 1,073,601 $ 59,544 5.55 % $ 1,076,928 $ 54,763 5.09 % Securities Taxable 268,604 11,533 4.29 208,472 4,017 1.93 Tax Exempt — — — 5,821 199 3.42 Equity Securities 2,693 110 4.08 2,693 106 3.94 Interest-Earning Deposits at Other Banks 96,474 4,831 5.01 61,638 3,084 5.00 Other Interest-Earning Assets 3,142 274 8.72 3,027 211 6.97 Total Interest-Earning Assets 1,444,514 76,292 5.28 1,358,579 62,380 4.59 Noninterest-Earning Assets 57,986 48,448 Total Assets $ 1,502,500 $ 1,407,027 Liabilities and Stockholders' equity: Interest-Bearing Liabilities: Interest-Bearing Demand Deposits $ 326,073 $ 7,414 2.27 % $ 354,060 $ 6,741 1.90 % Money Market 215,864 6,706 3.11 199,962 4,554 2.28 Savings 180,647 202 0.11 220,146 202 0.09 Time Deposits 314,510 14,119 4.49 156,310 4,936 3.16 Total Interest-Bearing Deposits 1,037,094 28,441 2.74 930,478 16,433 1.77 Short-term Borrowings — — — 931 32 3.44 Other Borrowed Funds 34,697 1,622 4.67 26,328 1,207 4.58 Total Interest-Bearing Liabilities 1,071,791 30,063 2.80 957,737 17,672 1.85 Noninterest-Bearing Demand Deposits 270,528 326,408 Total Funding and Cost of Funds 1,342,319 2.24 1,284,145 1.38 Other Liabilities 16,559 6,764 Total Liabilities 1,358,878 1,290,909 Stockholders' Equity 143,622 116,118 Total Liabilities and Stockholders' Equity $ 1,502,500 $ 1,407,027 Net Interest Income (Non-GAAP) (2) $ 46,229 $ 44,708 Net Interest Rate Spread (Non-GAAP) (2)(3) 2.48 2.74 Net Interest-Earning Assets (4) $ 372,723 $ 400,842 Net Interest Margin (Non-GAAP) (2)(5) 3.20 3.29 Return on Average Assets 0.84 1.60 Return on Average Equity 8.77 19.42 Average Equity to Average Assets 9.56 8.25 Average Interest-Earning Assets to Average Interest-Bearing Liabilities 134.78 141.85 (1) Net of the allowance for credit losses and includes nonaccrual loans with a zero yield (2) Refer to Explanation of Use of Non-GAAP Financial Measures in this Report for the calculation of the measure and reconciliation to the most comparable GAAP measure.
The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense. 2025 2024 Year Ended December 31, Average Balance Interest and Dividends Yield/ Cost Average Balance Interest and Dividends Yield/ Cost (Dollars in Thousands) Assets: Interest-Earning Assets: Loans, Net (1) $ 1,108,344 $ 62,313 5.62 % $ 1,073,601 $ 59,544 5.55 % Securities Taxable 265,757 11,520 4.33 268,604 11,533 4.29 Tax Exempt 12,024 710 5.90 — — — Equity Securities 1,413 51 3.61 2,693 110 4.08 Interest-Earning Deposits at Other Banks 37,349 1,467 3.93 96,474 4,831 5.01 Other Interest-Earning Assets 3,484 270 7.75 3,142 274 8.72 Total Interest-Earning Assets 1,428,371 76,331 5.34 1,444,514 76,292 5.28 Noninterest-Earning Assets 73,211 57,986 Total Assets $ 1,501,582 $ 1,502,500 Liabilities and Stockholders' equity: Interest-Bearing Liabilities: Interest-Bearing Demand Deposits $ 342,698 $ 6,888 2.01 % $ 326,073 $ 7,414 2.27 % Money Market 223,093 6,107 2.74 215,864 6,706 3.11 Savings 171,594 171 0.10 180,647 202 0.11 Time Deposits 284,727 10,279 3.61 314,510 14,119 4.49 Total Interest-Bearing Deposits 1,022,112 23,445 2.29 1,037,094 28,441 2.74 Short-term Borrowings 4,199 199 4.74 — — — Other Borrowed Funds 34,738 1,520 4.38 34,697 1,622 4.67 Total Interest-Bearing Liabilities 1,061,049 25,164 2.37 1,071,791 30,063 2.80 Noninterest-Bearing Demand Deposits 273,295 270,528 Total Funding and Cost of Funds 1,334,344 1.89 1,342,319 2.24 Other Liabilities 17,463 16,559 Total Liabilities 1,351,807 1,358,878 Stockholders' Equity 149,775 143,622 Total Liabilities and Stockholders' Equity $ 1,501,582 $ 1,502,500 Net Interest Income (Non-GAAP) (2) $ 51,167 $ 46,229 Net Interest Rate Spread (Non-GAAP) (2)(3) 2.97 2.48 Net Interest-Earning Assets (4) $ 367,322 $ 372,723 Net Interest Margin (Non-GAAP) (2)(5) 3.58 3.20 Return on Average Assets 0.33 0.84 Return on Average Equity 3.27 8.77 Average Equity to Average Assets 9.97 9.56 Average Interest-Earning Assets to Average Interest-Bearing Liabilities 134.62 134.78 (1) Net of the allowance for credit losses and includes nonaccrual loans with a zero yield (2) Refer to Explanation of Use of Non-GAAP Financial Measures in this Report for the calculation of the measure and reconciliation to the most comparable GAAP measure.
If the fair value of the collateral is less than the amortized cost basis of the loan, the Company will charge off the difference between the fair value of the collateral, less estimated costs to sell at the reporting date, and the amortized cost basis of the loan.
If the fair value of the collateral is less than the amortized cost basis of the loan, the Company will charge off the difference between the fair value of the collateral, less estimated costs to sell at the reporting date, and the amortized cost basis of the loan. 30 Accrued Interest Receivable The Company made an accounting policy election to exclude accrued interest receivable from the amortized cost basis of loans and available-for-sale securities.
Total liabilities increased $17.9 million, or 1.4%, to $1.33 billion at December 31, 2024 compared to $1.32 billion at December 31, 2023. Deposits. Total deposits increased $16.4 million, or 1.3%, to $1.28 billion as of December 31, 2024 compared to $1.27 billion at December 31, 2023.
Total liabilities increased $56.0 million, or 4.2%, to $1.39 billion at December 31, 2025 compared to $1.33 billion at December 31, 2024. Deposits. Total deposits increased $56.3 million, or 4.4%, to $1.34 billion as of December 31, 2025 compared to $1.28 billion at December 31, 2024.
Payment Due by Period Total Less Than Or Equal to One Year More Than One to Three Years More Than Three to Five Years More Than Five Years (Dollars in Thousands) Certificates of deposit $ 296,869 $ 271,816 $ 20,130 $ 4,309 $ 614 Other Borrowed Funds 34,718 20,000 — — 14,718 Operating Lease Obligations 3,761 481 809 664 1,807 Total $ 335,348 $ 292,297 $ 20,939 $ 4,973 $ 17,139 Capital Resources At December 31, 2024 and 2023, respectively, the Bank was considered "well capitalized" under the regulatory framework for prompt corrective action. 49 The following table presents the Bank’s regulatory capital amounts and ratios, as well as the minimum amounts and ratios required to be well capitalized at the dates indicated. 2024 2023 December 31, Amount Ratio Amount Ratio (Dollars in Thousands) Common Equity Tier 1 Capital (to Risk-Weighted Assets) Actual $ 152,238 14.78 % $ 143,654 13.64 % For Capital Adequacy Purposes 46,366 4.50 47,385 4.50 To Be Well Capitalized 66,973 6.50 68,445 6.50 Tier I Capital (to Risk-Weighted Assets) Actual 152,238 14.78 143,654 13.64 For Capital Adequacy Purposes 61,821 6.00 63,180 6.00 To Be Well Capitalized 82,428 8.00 84,240 8.00 Total Capital (to Risk-Weighted Assets) Actual 162,733 15.79 153,861 14.61 For Capital Adequacy Purposes 82,428 8.00 84,240 8.00 To Be Well Capitalized 103,035 10.00 105,300 10.00 Tier I Leverage Capital (to Adjusted Total Assets) Actual 152,238 9.98 143,654 10.19 For Capital Adequacy Purposes 60,996 4.00 56,385 4.00 To Be Well Capitalized 76,245 5.00 70,481 5.00 Impact of Inflation and Changing Price The consolidated financial statements and related notes of the Company have been prepared in accordance with GAAP.
Payment Due by Period Total Less Than Or Equal to One Year More Than One to Three Years More Than Three to Five Years More Than Five Years (Dollars in Thousands) Certificates of deposit $ 312,453 $ 279,228 $ 27,086 $ 5,646 $ 493 Other Borrowed Funds 34,758 — 20,000 — 14,758 Operating Lease Obligations 3,353 471 787 554 1,541 Total $ 350,564 $ 279,699 $ 47,873 $ 6,200 $ 16,792 Capital Resources At December 31, 2025 and 2024, respectively, the Bank was considered "well capitalized" under the regulatory framework for prompt corrective action. 50 The following table presents the Bank’s regulatory capital amounts and ratios, as well as the minimum amounts and ratios required to be well capitalized at the dates indicated. 2025 2024 December 31, Amount Ratio Amount Ratio (Dollars in Thousands) Common Equity Tier 1 Capital (to Risk-Weighted Assets) Actual $ 156,459 13.92 % $ 152,238 14.78 % For Capital Adequacy Purposes 50,583 4.50 46,366 4.50 To Be Well Capitalized 73,064 6.50 66,973 6.50 Tier I Capital (to Risk-Weighted Assets) Actual 156,459 13.92 152,238 14.78 For Capital Adequacy Purposes 67,444 6.00 61,821 6.00 To Be Well Capitalized 89,925 8.00 82,428 8.00 Total Capital (to Risk-Weighted Assets) Actual 167,321 14.89 162,733 15.79 For Capital Adequacy Purposes 89,925 8.00 82,428 8.00 To Be Well Capitalized 112,407 10.00 103,035 10.00 Tier I Leverage Capital (to Adjusted Total Assets) Actual 156,459 10.15 152,238 9.98 For Capital Adequacy Purposes 61,674 4.00 60,996 4.00 To Be Well Capitalized 77,093 5.00 76,245 5.00 Impact of Inflation and Changing Price The consolidated financial statements and related notes of the Company have been prepared in accordance with GAAP.
Average loans decreased $3.3 million while the loan yield increased 46 bps to 5.55% for the year ended December 31, 2024 compared to 5.09% for the year ended December 31, 2023. • Interest income on taxable investment securities increased $7.5 million, or 187.1%, to $11.5 million for the year ended December 31, 2024 compared to $4.0 million for the year ended December 31, 2023.
Average loans increased $34.7 million and the loan yield increased 7 bps to 5.62% for the year ended December 31, 2025 compared to 5.55% for the year ended December 31, 2024. • Interest income on investment securities increased $548,000, or 4.8%, to $12.1 million for the year ended December 31, 2025 compared to $11.5 million for the year ended December 31, 2024.
Net Interest Income. Net interest income increased $1.5 million, or 3.4%, to $46.1 million for the year ended December 31, 2024 compared to $44.6 million for the year ended December 31, 2023. Net interest margin (Non-GAAP) decreased 9 bps to 3.20% for the year ended December 31, 2024 compared to 3.29% the year ended December 31, 2023.
Net interest income increased $4.7 million, or 10.2%, to $50.8 million for the year ended December 31, 2025 compared to $46.1 million for the year ended December 31, 2024. Net interest margin (Non-GAAP) increased 38 bps to 3.58% for the year ended December 31, 2025 compared to 3.20% the year ended December 31, 2024.
Stockholders’ equity increased $7.5 million, or 5.4%, to $147.4 million at December 31, 2024, compared to $139.8 million at December 31, 2023. • Key factors positively impacting stockholders’ equity included $12.6 million of net income for the current period, partially offset by the payment of $5.1 million in dividends since December 31, 2023 and a $488,000 change in accumulated other comprehensive loss. • Book value per share was $28.71 at December 31, 2024 compared to $27.32 at December 31, 2023, an increase of $1.39.
Stockholders’ equity increased $10.2 million, or 6.9%, to $157.5 million at December 31, 2025, compared to $147.4 million at December 31, 2024. • Key factors positively impacting stockholders’ equity included a $13.8 million decrease in accumulated other comprehensive loss resulting from the securities repositioning strategy, $4.9 million of net income for the current period and $2.6 million of shares issued as a result of stock option exercises, partially offset by $6.8 million in treasury stock repurchases and the payment of $5.1 million in dividends since December 31, 2024. • Book value per share was $31.28 at December 31, 2025 compared to $28.71 at December 31, 2024, an increase of $2.57.
The Bank can attract and retain deposits by adjusting the interest rates offered. The Bank’s primary investing activities are the origination of loans. For the year ended December 31, 2024 the Bank had net loan originations of $17.6 million.
The Bank can attract and retain deposits by adjusting the interest rates offered. The Bank’s primary investing activities are the origination of loans.
Total assets increased $25.5 million, or 1.8%, to $1.48 billion at December 31, 2024, compared to $1.46 billion at December 31, 2023. Cash and Due From Banks. Cash and due from banks decreased $18.7 million, or 27.3%, to $49.6 million at December 31, 2024, compared to $68.2 million at December 31, 2023.
Total assets increased $66.1 million, or 4.5%, to $1.55 billion at December 31, 2025, compared to $1.48 billion at December 31, 2024. Cash and Due From Banks. Cash and due from banks decreased $17.9 million, or 36.1%, to $31.7 million at December 31, 2025, compared to $49.6 million at December 31, 2024.
Year Ended December 31, 2024 2023 (Dollars in Thousands) Balance at Beginning of Year $ 9,707 $ 12,819 Impact of ASC 326 - Loans — (3,385) Provision (Recovery) for Loan Losses 379 (284) Charge-offs: Real Estate: Residential (28) (219) Commercial and Industrial (12) — Consumer (485) (370) Total Charge-offs (652) (589) Recoveries: Real estate: Residential 14 43 Commercial — 32 Commercial and Industrial 175 876 Consumer 182 195 Total Recoveries 371 1,146 Net (Charge-offs) Recoveries (281) 557 Balance at End of Year $ 9,805 $ 9,707 Allowance for Credit Losses to Total Loans 0.90 % 0.87 % Allowance for Credit Losses to Nonaccrual Loans 548.07 433.35 Allowance for Credit Losses to Nonperforming Loans 548.07 433.35 Net (Recoveries) Charge-offs to Average Loans 0.03 (0.05) The allowance for credit losses increased $98,000, or 1.0%, to $9.8 million at December 31, 2024, compared to $9.7 million at December 31, 2023.
Year Ended December 31, 2025 2024 (Dollars in Thousands) Balance at Beginning of Year $ 9,805 $ 9,707 Provision for Credit Losses - Loans 534 379 Charge-offs: Real Estate: Residential (25) (28) Commercial (19) (127) Commercial and Industrial (223) (12) Consumer (302) (485) Total Charge-offs (569) (652) Recoveries: Real estate: Residential 10 14 Commercial and Industrial 136 175 Consumer 200 182 Total Recoveries 346 371 Net Charge-offs (223) (281) Balance at End of Year $ 10,116 $ 9,805 Allowance for Credit Losses to Total Loans 0.87 % 0.90 % Allowance for Credit Losses to Nonperforming Loans 190.51 548.07 Net Charge-offs to Average Loans 0.02 0.03 46 The allowance for credit losses increased $311,000, or 3.2%, to $10.1 million at December 31, 2025, compared to $9.8 million at December 31, 2024.
Total loans decreased $17.8 million, or 1.6%, to $1.09 billion at December 31, 2024 compared to $1.11 billion at December 31, 2023.
Total loans increased $69.6 million, or 6.4%, to $1.16 billion at December 31, 2025 compared to $1.09 billion at December 31, 2024.
Provision (Recovery) for Credit Losses. The provision for credit losses was $570,000 for the year ended December 31, 2024, compared to a $502,000 recovery for the year ended December 31, 2023. The provision for loan losses in 2024 was primarily due to growth in construction and land development loans.
Provision for Credit Losses. The provision for credit losses was $589,000 for the year ended December 31, 2025, compared to $570,000 for the year ended December 31, 2024. The provision for loan losses in 2025 was primarily due to growth in non-owner occupied commercial real estate and commercial and industrial loans.
The breakdown of noninterest expense for the year ended December 31, 2024 compared to the year ended December 31, 2023 is as follows: Year Ended December 31, 2024 2023 Dollar Change Percent Change (Dollars in Thousands) Salaries and Employee Benefits $ 18,821 $ 21,903 $ (3,082) (14.1) % Occupancy 3,096 2,998 98 3.3 % Equipment 1,155 1,064 91 8.6 % Data Processing 3,308 3,014 294 9.8 % Federal Deposit Insurance Corporation Assessment 639 754 (115) (15.3) % Pennsylvania Shares Tax 1,161 889 272 30.6 % Contracted Services 1,623 1,166 457 39.2 % Legal and Professional Fees 985 1,182 (197) (16.7) % Advertising 484 426 58 13.6 % Other Real Estate Owned (Income) 50 (115) 165 (143.5) % Amortization of Intangible Assets 958 1,766 (808) (45.8) % Other 3,369 3,735 (366) (9.8) % Total Noninterest Expense $ 35,649 $ 38,782 $ (3,133) (8.1) % Noninterest expense decreased $3.1 million, or 8.1%, to $35.6 million for the year ended December 31, 2024 compared to $38.8 million for the year ended December 31, 2023. • Salaries and employee benefits decreased $3.1 million to $18.8 million for the year ended December 31, 2024 compared to $21.9 million for the year ended December 31, 2023.
The breakdown of noninterest expense for the year ended December 31, 2025 compared to the year ended December 31, 2024 is as follows: Year Ended December 31, 2025 2024 Dollar Change Percent Change (Dollars in Thousands) Salaries and Employee Benefits $ 22,213 $ 18,821 $ 3,392 18.0 % Occupancy 2,513 3,096 (583) (18.8) % Equipment 1,452 1,155 297 25.7 % Data Processing 3,055 3,308 (253) (7.6) % Federal Deposit Insurance Corporation Assessment 724 639 85 13.3 % Pennsylvania Shares Tax 948 1,161 (213) (18.3) % Contracted Services 1,543 1,623 (80) (4.9) % Legal and Professional Fees 1,024 985 39 4.0 % Advertising 566 484 82 16.9 % Other Real Estate Owned (Income) 65 50 15 30.0 % Amortization of Intangible Assets — 958 (958) (100.0) % Other 3,553 3,369 184 5.5 % Total Noninterest Expense $ 37,656 $ 35,649 $ 2,007 5.6 % Noninterest expense increased $2.0 million, or 5.6%, to $37.7 million for the year ended December 31, 2025 compared to $35.6 million for the year ended December 31, 2024. • Salaries and employee benefits increased $3.4 million to $22.2 million for the year ended December 31, 2025 compared to $18.8 million for the year ended December 31, 2024.
Income Tax Expense. Income tax expense decreased $5.0 million to $2.7 million for the year ended December 31, 2024, compared to $7.7 million for the year ended December 31, 2023 and is primarily attributed to the decrease in pre-tax income. 41 Average Balances and Yields.
Income tax expense decreased $2.4 million to $397,000 for the year ended December 31, 2025, compared to $2.7 million for the year ended December 31, 2024 and is primarily attributed to the decrease in pre-tax income. Average Balances and Yields. The following table sets forth average balance sheets, average yields and costs, and certain other information for the years indicated.
December 31, 2024 (Dollars in Thousands) Three Months or Less $ 13,190 Over Three Months to Six Months 16,932 Over Six Months to One Year 8,601 Over One Year 2,047 Total $ 40,770 Borrowed Funds • Short-term borrowings. There were no short-term borrowings at December 31, 2024 or December 31, 2023. • Other borrowed funds.
December 31, 2025 (Dollars in Thousands) Three Months or Less $ 28,041 Over Three Months to Six Months 9,771 Over Six Months to One Year 5,057 Over One Year 2,062 Total $ 44,931 38 Borrowed Funds • Short-term borrowings. There were no short-term borrowings at December 31, 2025 or December 31, 2024. • Other borrowed funds.
Interest expense increased $12.4 million, or 70.1%, to $30.1 million for the year ended December 31, 2024 compared to $17.7 million for the year ended December 31, 2023.
Interest expense decreased $4.9 million, or 16.3%, to $25.2 million for the year ended December 31, 2025 compared to $30.1 million for the year ended December 31, 2024.
On December 1, 2023, the Company announced that the Bank and EU entered into an Asset Purchase Agreement with World pursuant to which EU sold substantially all of its assets to World for a purchase price of $30.5 million cash plus possible additional earn-out payments. The sale of assets was completed on December 8, 2023.
The loss recognized during 2025 was primarily attributable to the securities repositioning strategy implemented during the third quarter of the year. • The Company recorded a $40,000 net gain on disposal of premises and equipment in the current year related to the sale of a corporate storage warehouse, compared to a $274,000 gain in the prior year related to the sale of one branch location. 40 • On December 1, 2023, the Company announced that the Bank and EU entered into an Asset Purchase Agreement with World pursuant to which EU sold substantially all of its assets to World for a purchase price of $30.5 million cash plus possible additional earn-out payments.
Net interest margin (GAAP) decreased to 3.19% for the year ended December 31, 2024 compared to 3.28% for the year ended December 31, 2023. Interest and dividend income increased $13.9 million, or 22.3%, to $76.1 million for the year ended December 31, 2024 compared to $62.2 million for the year ended December 31, 2023.
Interest and dividend income decreased $192,000, or 0.3%, to $75.9 million for the year ended December 31, 2025 compared to $76.1 million for the year ended December 31, 2024. • Interest income on loans increased $2.7 million, or 4.5%, to $62.1 million for the year ended December 31, 2025 compared to $59.4 million for the year ended December 31, 2024.
The breakdown of noninterest income for the year ended December 31, 2024 compared to year ended December 31, 2023 is as follows: Year Ended December 31, 2024 2023 Dollar Change Percent Change (Dollars in Thousands) Service Fees $ 1,680 $ 1,819 $ (139) (7.6) % Insurance Commissions 6 5,839 (5,833) (99.9) % Other Commissions 251 521 (270) (51.8) % Net Gain on Sales of Loans 52 — 52 — % Net Gain (Loss) on Securities 51 (10,199) 10,250 100.5 % Net Gain on Purchased Tax Credits 49 29 20 69.0 % Gain on Sale of Subsidiary 138 24,578 (24,440) (99.4) % Net Gain on Disposal of Premises and Equipment 274 11 263 2390.9 % Income from Bank-Owned Life Insurance 594 576 18 3.1 % Net Gain from Bank-Owned Life Insurance Claims 915 303 612 202.0 % Other Income 1,484 535 949 177.4 % Total Noninterest Income $ 5,494 $ 24,012 $ (18,518) (77.1) % Noninterest income decreased $18.5 million, or 77.1%, to $5.5 million for the year ended December 31, 2024, compared to $24.0 million for the year ended December 31, 2023. • The Company recorded a $24.6 million pre-tax gain on the sale of EU assets during the year ended December 31, 2023.
The breakdown of noninterest (loss) income for the year ended December 31, 2025 compared to year ended December 31, 2024 is as follows: Year Ended December 31, 2025 2024 Dollar Change Percent Change (Dollars in Thousands) Service Fees $ 2,180 $ 1,680 $ 500 29.8 % Insurance Commissions 4 6 (2) (33.3) % Other Commissions 252 251 1 0.4 % Net Gain on Sale of Loans 105 52 53 101.9 % Net (Loss) Gain on Investment Securities (11,807) 51 (11,858) (23251.0) % Net Gain on Purchased Tax Credits 14 49 (35) (71.4) % Gain on Sale of Subsidiary — 138 (138) (100.0) % Net Gain on Disposal of Premises and Equipment 40 274 (234) (85.4) % Income from Bank-Owned Life Insurance 603 594 9 1.5 % Net Gain from Bank-Owned Life Insurance Claims — 915 (915) (100.0) % Other Income 1,379 1,484 (105) (7.1) % Total Noninterest (Loss) Income $ (7,230) $ 5,494 $ (12,724) (231.6) % Noninterest income decreased $12.7 million, or 231.6%, to a $7.2 million loss for the year ended December 31, 2025, compared to income of $5.5 million for the year ended December 31, 2024. • Net (loss) gain on investment securities was an $11.8 million loss for the year ended December 31, 2025, compared to a gain of $51,000 for the year ended December 31, 2024.
Such commitments are subject to the same credit policies and approval process accorded to loans the Company makes. In addition, the Company enters into commitments to sell mortgage loans. Contractual Obligations. In the ordinary course of its operations, the Company enters into certain contractual obligations.
While these contractual obligations represent potential future cash requirements, a significant portion of commitments to extend credit may expire without being drawn upon. Such commitments are subject to the same credit policies and approval process accorded to loans the Company makes. In addition, the Company enters into commitments to sell mortgage loans. Contractual Obligations.
This increase was largely due to an 86 basis point increase in the cost of interest-bearing liabilities to 2.24% for the year ended December 31, 2024 compared to 1.38% for the year ended December 31, 2023, adding an additional $9.9 million to interest expense. • Interest expense on deposits increased $12.0 million, or 73.1%, to $28.4 million for the year ended December 31, 2024 compared to $16.4 million for the year ended December 31, 2023.
This decrease was largely due to a 43 basis point decrease in the cost of interest-bearing liabilities to 2.37% for the year ended December 31, 2025 compared to 2.80% for the year ended December 31, 2024, causing a $4.7 million decrease in interest expense. 39 • Interest expense on deposits decreased $5.0 million, or 17.6%, to $23.4 million for the year ended December 31, 2025 compared to $28.4 million for the year ended December 31, 2024.
Government Agencies $ 4,996 $ 3,945 $ 4,995 $ 3,949 Obligations of States and Political Subdivisions 3,496 3,347 3,481 3,373 Mortgage-Backed Securities - Government-Sponsored Enterprises 53,628 50,363 57,377 54,532 Collateralized Mortgage Obligations - Government-Sponsored Enterprises 111,076 94,957 120,655 105,130 Collateralized Loan Obligations 98,741 98,779 29,862 29,804 Corporate Debt 9,479 8,123 9,484 7,719 Total Available-for-Sale Debt Securities $ 281,416 $ 259,514 $ 225,854 $ 204,507 Equity Securities: Mutual Funds 879 888 Other 1,760 1,700 Total Equity Securities 2,639 2,588 Total Securities $ 262,153 $ 207,095 Securities Portfolio Maturities and Yields.
Government Agencies $ — $ — $ 4,996 $ 3,945 Obligations of States and Political Subdivisions 35,227 36,224 3,496 3,347 Mortgage-Backed Securities - Government-Sponsored Enterprises 40,577 41,089 53,628 50,363 Collateralized Mortgage Obligations - Government-Sponsored Enterprises 72,266 67,575 111,076 94,957 Collateralized Mortgage Obligations - Non-Agency 10,671 10,547 — — Collateralized Loan Obligations 101,409 101,218 98,741 98,779 Corporate Debt 23,172 22,333 9,479 8,123 Total Available-for-Sale Debt Securities $ 283,322 $ 278,986 $ 281,416 $ 259,514 Equity Securities: Mutual Funds 909 879 Other — 1,760 Total Equity Securities 909 2,639 Total Securities $ 279,895 $ 262,153 33 Securities Portfolio Maturities and Yields.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeEVE EVE as a Percent of Portfolio Value of Assets Net Interest Income at Risk Change in Interest Rates in Basis Points Dollar Amount Dollar Change Percent Change NPV Ratio Basis Point Change Dollar Amount Dollar Change Percent Change (Dollars in Thousands) +400 $ 177,918 $ (32,439) (15.4) % 13.68 % (116) $ 52,315 $ 2,642 5.3 % +300 185,040 (25,317) (12.0) 13.95 (89) 51,612 1,939 3.9 +200 193,734 (16,623) (7.9) 14.29 (55) 50,982 1,309 2.6 +100 202,287 (8,070) (3.8) 14.59 (25) 50,359 686 1.4 Flat 210,357 — — 14.84 — 49,673 — — -100 217,671 7,314 3.5 15.01 17 48,947 (726) (1.5) -200 221,798 11,441 5.4 14.97 13 48,113 (1,560) (3.1) -300 222,781 12,424 5.9 14.74 (10) 46,866 (2,807) (5.7) -400 217,379 7,022 3.3 14.13 (71) 45,788 (3,885) (7.8) Certain shortcomings are inherent in the methodology used in the above interest rate risk measurement.
Biggest changeEVE EVE as a Percent of Portfolio Value of Assets Net Interest Income at Risk Change in Interest Rates in Basis Points Dollar Amount Dollar Change Percent Change NPV Ratio Basis Point Change Dollar Amount Dollar Change Percent Change (Dollars in Thousands) +400 $ 193,357 $ (41,152) (17.5) % 14.11 % (152) $ 60,325 $ 3,088 5.4 % +300 202,955 (31,554) (13.5) 14.50 (113) 59,563 2,326 4.1 +200 214,180 (20,329) (8.7) 14.95 (68) 58,866 1,629 2.8 +100 224,840 (9,669) (4.1) 15.34 (29) 58,129 892 1.6 Flat 234,509 — — 15.63 — 57,237 — — -100 242,169 7,660 3.3 15.79 16 56,264 (973) (1.7) -200 247,049 12,540 5.3 15.76 13 55,081 (2,156) (3.8) -300 249,414 14,905 6.4 15.58 (5) 54,532 (2,705) (4.7) -400 243,914 9,405 4.0 14.96 (67) 55,528 (1,709) (3.0) 52 Certain shortcomings are inherent in the methodology used in the above interest rate risk measurement.
With regard to capital, our internal interest rate risk analysis calculates the sensitivity of our economic value of equity (“EVE”) ratio to movements in interest rates. EVE represents the present value of the expected cash flows from our assets less 50 the present value of the expected cash flows arising from our liabilities.
With regard to capital, our internal interest rate risk analysis calculates the sensitivity of our economic value of equity (“EVE”) ratio to movements in interest rates. EVE represents the present value of the expected cash flows from our assets less the present value of the expected cash flows arising from our liabilities.
The table below sets forth, as of December 31, 2024, the estimated changes in EVE and net interest income at risk that would result from the designated instantaneous changes in market interest rates.
The table below sets forth, as of December 31, 2025, the estimated changes in EVE and net interest income at risk that would result from the designated instantaneous changes in market interest rates.
Computations of prospective effects of hypothetical interest rate changes are based on numerous assumptions, including relative levels of market interest rates, loan prepayments and deposit decay, and should not be relied upon as indicative of actual results.
Computations of prospective effects of hypothetical interest rate changes are based on numerous assumptions, including relative levels of market interest rates, loan prepayments and deposit decay, and should not be relied upon as indicative of actual results. The changes disclosed in the following table are within policy guidelines established by the Company's Board of Directors.

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