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What changed in Western New England Bancorp, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Western New England Bancorp, 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.

+340 added−360 removedSource: 10-K (2026-03-10) vs 10-K (2025-03-10)

Top changes in Western New England Bancorp, Inc.'s 2025 10-K

340 paragraphs added · 360 removed · 297 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

136 edited+14 added−18 removed216 unchanged
Biggest changeYears Ended December 31, 2024 2023 (Dollars in thousands) Allowance for credit losses to total loans outstanding 0.94 % 1.00 % Allowance for credit losses $ 19,529 $ 20,267 Total loans outstanding $ 2,070,189 $ 2,027,317 Nonperforming loans to total loans outstanding 0.26 % 0.32 % Nonperforming loans $ 5,381 $ 6,421 Total loans outstanding $ 2,070,189 $ 2,027,317 Allowance for credit losses to nonperforming loans 362.93 % 315.64 % Allowance for credit losses $ 19,529 $ 20,267 Nonperforming loans $ 5,381 $ 6,421 Net charge-offs (recoveries) during the period to daily average loans outstanding: Residential one-to-four family charge-offs (recoveries) to daily average loans outstanding 0.01 % 0.00 % Net charge-offs (recoveries) during the period $ 32 $ (23 ) Average amount outstanding $ 631,570 $ 601,843 Commercial real estate (recoveries) charge-offs to daily average loans outstanding (0.02 )% 0.07 % Net (recoveries) charge-offs during the period $ (206 ) $ 755 Average amount outstanding $ 1,072,779 $ 1,076,523 Commercial and industrial (recoveries) charge-offs to daily average loans outstanding (0.07 )% 0.57 % Net (recoveries) charge-offs during the period $ (152 ) $ 1,213 Average amount outstanding $ 210,343 $ 213,903 Home equity charge-offs (recoveries) to daily average loans outstanding 0.10 % 0.00 % Net charge-offs (recoveries) during the period $ 121 $ (3 ) Average amount outstanding $ 115,595 $ 108,057 Consumer charge-offs to daily average loans outstanding 2.43 % 1.66 % Net charge-offs during the period $ 118 $ 97 Average amount outstanding $ 4,862 $ 5,840 Total loan (recoveries) charge-offs to daily average loans outstanding 0.00 % 0.10 % Net (recoveries) charge-offs during the period $ (87 ) $ 2,039 Average amount outstanding $ 2,035,149 $ 2,006,166 15 During the year ended December 31, 2024, the Company recorded net recoveries of $87,000, compared to net charge-offs of $2.0 million for the twelve months ended December 31, 2023.
Biggest changeYears Ended December 31, 2025 2024 (Dollars in thousands) Allowance for credit losses to total loans outstanding 0.93 % 0.94 % Allowance for credit losses $ 20,297 $ 19,529 Total loans outstanding, including unearned premiums and deferred loan fees and costs $ 2,183,592 $ 2,070,189 Nonaccrual loans to total loans outstanding 0.24 % 0.26 % Nonaccrual loans $ 5,162 $ 5,381 Total loans outstanding, including unearned premiums and deferred loan fees and costs $ 2,183,592 $ 2,070,189 Allowance for credit losses to nonaccrual loans 393.20 % 362.93 % Allowance for credit losses $ 20,297 $ 19,529 Nonaccrual loans $ 5,162 $ 5,381 Net charge-offs (recoveries) during the period to daily average loans outstanding: Residential one-to-four family charge-offs to daily average loans outstanding -% 0.01 % Net charge-offs during the period $ 15 $ 32 Average amount outstanding $ 682,535 $ 631,570 Commercial real estate recoveries to daily average loans outstanding -% (0.02 )% Net recoveries during the period $ (22 ) $ (206 ) Average amount outstanding $ 1,070,571 $ 1,072,779 Commercial and industrial recoveries to daily average loans outstanding (0.27 )% (0.07 )% Net recoveries during the period $ (599 ) $ (152 ) Average amount outstanding $ 222,574 $ 210,343 Home equity charge-offs to daily average loans outstanding 0.02 % 0.10 % Net charge-offs during the period $ 23 $ 121 Average amount outstanding $ 129,523 $ 115,595 Consumer charge-offs to daily average loans outstanding 3.11 % 2.43 % Net charge-offs during the period $ 111 $ 118 Average amount outstanding $ 3,564 $ 4,862 Total loan recoveries to daily average loans outstanding (0.02 )% 0.00 % Net recoveries during the period $ (472 ) $ (87 ) Average amount outstanding $ 2,108,767 $ 2,035,149 16 During the twelve months ended December 31, 2025, the Company recorded net recoveries of $472,000, compared to net recoveries of $87,000 for the twelve months ended December 31, 2024.
Home equity loans and lines of credit are secured by first or second mortgages on one-to-four family owner-occupied properties. Equity loans and lines of credit are underwritten by a maximum combined loan-to-value of 85% of the appraised value of the property.
Home equity loans and lines of credit are secured by first or second mortgages on one-to-four family owner-occupied properties. Home equity loans and lines of credit are underwritten by a maximum combined loan-to-value of 85% of the appraised value of the property.
The allowance for credit losses is an estimate of expected losses inherent within the Company’s existing loans held for investment portfolio.
Allowance for Credit Losses . The allowance for credit losses is an estimate of expected losses inherent within the Company’s existing loans held for investment portfolio.
Government-sponsored enterprises, mortgage-backed securities, municipal obligations (general obligations, revenue obligations, school districts and non-rated issues from the Bank’s general market area), banker’s acceptances, certificates of deposit, Industrial Development Authority Bonds, Public Housing Authority Bonds, corporate bonds (each corporation limited to the Bank’s legal lending limit), marketable equity securities, collateralized mortgage obligations, Small Business Investment Companies (SBIC), Federal Reserve stock and FHLB stock.
Government-sponsored enterprises, mortgage-backed securities, municipal obligations (general obligations, revenue obligations, school districts and non-rated issues from the Bank’s general market area), banker’s acceptances, certificates of deposit, Industrial Development Authority Bonds, Public Housing Authority Bonds, corporate bonds (each corporation limited to the Bank’s legal lending limit), marketable equity securities, collateralized mortgage obligations, Small Business Investment Companies (SBIC), Federal Reserve Bank stock and FHLB stock.
Generally, sections 23A and 23B are intended to protect insured depository institutions from losses arising from transactions with non-insured affiliates, by limiting the extent to which a depository institution or its subsidiaries may engage in covered transactions with any one affiliate and with all affiliates of the depository institution in the aggregate, and by requiring that such transactions be on terms that are consistent with safe and sound banking practices.
Generally, sections 23A and 23B are intended to protect insured depository institutions from losses arising from transactions with non-insured affiliates, by limiting the extent to which a depository institution or its subsidiaries may engage in covered transactions with any one affiliate and with all affiliates of the depository institution in the aggregate, and by requiring that such transactions be on market terms that are consistent with safe and sound banking practices.
In addition to the deposit products discussed above, commercial and municipal customers may take advantage of cash management services including remote deposit capture, Automated Clearing House credit and debit origination, check payment fraud prevention, international and domestic wire transfers and corporate credit cards. IntraFi Network, Certificate of Deposit Account Registry Service (“CDARS”) and Insured Cash Sweep Service (“ICS” ) .
In addition to the deposit products discussed above, commercial and municipal customers may take advantage of cash management services including remote deposit capture, Automated Clearing House credit and debit origination, check payment fraud prevention, international and domestic wire transfers and corporate credit cards. 22 IntraFi Network, Certificate of Deposit Account Registry Service (“CDARS”) and Insured Cash Sweep Service (“ICS” ) .
The risk matrix utilizes different risk categories which are distinguished by capital levels and supervisory ratings. As a result of the Dodd-Frank Act, the base for insurance assessments is now consolidated average assets less average tangible equity. Assessment rates are calculated using formulas that take into account the risk of the institution being assessed. Depositor Preference.
The risk matrix utilizes different risk categories which are distinguished by capital levels and supervisory ratings. As a result of the Dodd-Frank Act, the base for insurance assessments is now consolidated average assets less average tangible equity. Assessment rates are calculated using formulas that take into account the risk of the institution being assessed. 33 Depositor Preference.
In addition, we provide online banking services, including online deposit account opening and residential mortgage and consumer loan applications through our website at www.westfieldbank.com. The markets served by our branches are primarily suburban markets located in western Massachusetts and in northern Connecticut. Westfield, Massachusetts, is located near the intersection of U.S. Interstates 90 (the Massachusetts Turnpike) and 91.
In addition, we provide online banking services, including online deposit account opening and residential mortgage and consumer loan applications through our website at www.westfieldbank.com. The markets served by our branches are primarily suburban markets located in western Massachusetts and in Connecticut. Westfield, Massachusetts, is located near the intersection of U.S. Interstates 90 (the Massachusetts Turnpike) and 91.
This calculation is adjusted based on additional factors that include (1) lending policies and procedures; (2) international, national, regional and local economic business conditions and developments that affect the collectability of the portfolio; (3) the nature and volume of the loan portfolio including the terms of the loans; (4) the experience, ability, and depth of the lending management and other relevant staff; (5) the volume and severity of past due and adversely classified loans and the volume of nonperforming loans; (6) the quality of our loan review system and (7) the value of underlying collateral for collateralized loans. 17 Individually evaluated financial assets For a loan that does not share risk characteristics with other loans, expected credit loss is measured based on net realizable value, that is, the difference between the discounted value of the expected future cash flows, based on the original effective interest rate, and the amortized cost basis of the loan.
This calculation is adjusted based on additional factors that include (1) lending policies and procedures; (2) international, national, regional and local economic business conditions and developments that affect the collectability of the portfolio; (3) the nature and volume of the loan portfolio including the terms of the loans; (4) the experience, ability, and depth of the lending management and other relevant staff; (5) the volume and severity of past due and adversely classified loans and the volume of nonperforming loans; (6) the quality of our loan review system and (7) the value of underlying collateral for collateralized loans. 18 Individually evaluated financial assets For a loan that does not share risk characteristics with other loans, expected credit loss is measured based on net realizable value, that is, the difference between the discounted value of the expected future cash flows, based on the original effective interest rate, and the amortized cost basis of the loan.
If an insured depository institution fails, insured and uninsured depositors, along with the FDIC, will have priority in payment ahead of unsecured, non-deposit creditors, including the parent bank holding company, with respect to any extensions of credit they have made to such insured depository institution. 32 Federal Home Loan Bank System.
If an insured depository institution fails, insured and uninsured depositors, along with the FDIC, will have priority in payment ahead of unsecured, non-deposit creditors, including the parent holding company, with respect to any extensions of credit they have made to such insured depository institution. Federal Home Loan Bank System.
Various legislative and regulatory initiatives are introduced by Congress, state legislatures and different financial regulatory agencies. Such initiatives may include proposals to expand or contract the powers of bank holding companies, savings and loan holding companies and/or depository institutions, and may also include changes in priorities and operations of regulatory agencies in connection with new leadership.
Various legislative and regulatory initiatives are introduced by Congress, state legislatures and different financial regulatory agencies. Such initiatives may include proposals to expand or contract the powers of savings and loan holding companies and/or depository institutions, and may also include changes in priorities and operations of regulatory agencies in connection with new leadership.
Examples of our consumer loans include automobile loans, spa and pool loans, collateral loans and personal lines of credit tied to deposit accounts to provide overdraft protection. 10 The following table presents the composition of our loan portfolio in dollar amounts and in percentages of the total portfolio at the dates indicated.
Examples of our consumer loans include automobile loans, spa and pool loans, collateral loans and personal lines of credit tied to deposit accounts to provide overdraft protection. The following table presents the composition of our loan portfolio in dollar amounts and in percentages of the total portfolio at the dates indicated.
On December 18, 2015, the federal banking agencies jointly issued a “Statement on Prudent Risk Management for Commercial Real Estate Lending” reminding banks of the need to engage in risk management practices for commercial real estate lending. 30 Qualified Thrift Lender Test.
On December 18, 2015, the federal banking agencies jointly issued a “Statement on Prudent Risk Management for Commercial Real Estate Lending” reminding banks of the need to engage in risk management practices for commercial real estate lending. Qualified Thrift Lender Test.
For more information relating to the Company’s commercial real estate portfolio as of December 31, 2024 and 2023, see “ Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations – CRE Concentrations. ” The Company originates commercial real estate loans throughout its market area for the purpose of acquiring, developing, and refinancing commercial real estate where the property is the primary collateral securing the loan.
For more information relating to the Company’s commercial real estate portfolio as of December 31, 2025 and December 31, 2024, see “ Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations – CRE Concentrations. ” The Company originates commercial real estate loans throughout its market area for the purpose of acquiring, developing, and refinancing commercial real estate where the property is the primary collateral securing the loan.
Western New England Bancorp and the Bank have in place a Bank Secrecy Act and Patriot Act compliance program and engage in limited transactions with foreign financial institutions or foreign persons. 33 The Fair Credit Reporting Act’s Red Flags Rule requires financial institutions with covered accounts (e.g. consumer bank accounts and loans) to develop, implement, and administer an identity theft prevention program.
Western New England Bancorp and the Bank have in place a Bank Secrecy Act and Patriot Act compliance program and engage in limited transactions with foreign financial institutions or foreign persons. 34 The Fair Credit Reporting Act’s Red Flags Rule requires financial institutions with covered accounts (e.g. consumer bank accounts and loans) to develop, implement, and administer an identity theft prevention program.
A diversified mix of industry groups are concentrated in western Massachusetts and northern Connecticut, including manufacturing, health care, higher education, wholesale and retail trade and service.
A diversified mix of industry groups are concentrated in western Massachusetts and Connecticut, including manufacturing, health care, higher education, wholesale and retail trade and service.
The following tables set forth the allowance for credit losses allocated by loan category, the total loan balances by category, and the percent of loans in each category to total loans.
Allocation of Allowance for Credit Losses . The following tables set forth the allowance for credit losses allocated by loan category, the total loan balances by category, and the percent of loans in each category to total loans.
At December 31, 2024, the Company had borrowing capacity with two correspondent banks consisting of a $15.0 million and a $10.0 million unsecured lines of credit, both arrangements were at an interest rate determined and reset on a daily basis. As of December 31, 2024 and December 31, 2023, there were no advances outstanding under these lines. Subordinated Debt.
At December 31, 2025, the Company had borrowing capacity with two correspondent banks consisting of a $15.0 million and a $10.0 million unsecured lines of credit, both arrangements were at an interest rate determined and reset on a daily basis. As of December 31, 2025 and December 31, 2024, there were no advances outstanding under these lines. Subordinated Debt.
The Bank operates twenty-five banking offices in Agawam, Chicopee, Feeding Hills, East Longmeadow, Holyoke, Huntington, Ludlow, South Hadley, Southwick, Springfield, Ware, West Springfield and Westfield, Massachusetts and Bloomfield, Enfield, Granby and West Hartford, Connecticut. We operate full-service ATMs at our branch locations and have eight freestanding ATM locations in Holyoke, Southwick, Springfield, West Springfield and Westfield, Massachusetts.
The Bank operates twenty-five banking offices in Agawam, Chicopee, East Longmeadow, Feeding Hills, Holyoke, Huntington, Ludlow, South Hadley, Southwick, Springfield, Ware, West Springfield and Westfield, Massachusetts and Bloomfield, Enfield, Granby and West Hartford, Connecticut. We operate full-service ATMs at our branch locations and have seven freestanding ATM locations in Holyoke, Southwick, Springfield, West Springfield and Westfield, Massachusetts.
The overall health of the economy, including unemployment rates and housing pricing, will have an effect on the credit quality in this segment. 16 Commercial and industrial loans . The primary risk associated with commercial and industrial loans is the ability of borrowers to achieve business results and cash flows consistent with those projected at loan origination.
The overall health of the economy, including unemployment rates and housing pricing, will have an effect on the credit quality in this segment. 17 Commercial and industrial loans . The primary risk associated with commercial and industrial loans is the ability of borrowers to achieve business results and cash flows consistent with those projected at loan origination.
If the regulations are adopted in the form initially proposed or a similar form, they will restrict the manner in which executive compensation is structured. 34 The Dodd-Frank Act also gives the SEC authority to prohibit broker discretionary voting on elections of directors, executive compensation matters and any other significant matter.
If the regulations are adopted in the form initially proposed or a similar form, they will restrict the manner in which executive compensation is structured. 35 The Dodd-Frank Act also gives the SEC authority to prohibit broker discretionary voting on elections of directors, executive compensation matters and any other significant matter.
WB is a Massachusetts-chartered limited liability company formed for the primary purpose of holding other real estate owned (“OREO”). 4 ● CSB Colts, Inc. (“CSB Colts”). CSB Colts is a Massachusetts-chartered security corporation, formed for the primary purpose of holding qualified securities. CSB Colts was acquired on October 21, 2016, in conjunction with the acquisition of Chicopee. Market Area.
WB is a Massachusetts-chartered limited liability company formed for the primary purpose of holding other real estate owned (“OREO”). 6 ● CSB Colts, Inc. (“CSB Colts”). CSB Colts is a Massachusetts-chartered security corporation, formed for the primary purpose of holding qualified securities. CSB Colts was acquired on October 21, 2016, in conjunction with the acquisition of Chicopee. Market Area.
As of December 31, 2024, the Bank was “well-capitalized” under the PCA framework. Business Activities. The Bank derives its lending and investment powers from the HOLA and its implementing regulations promulgated by the OCC. Those laws and regulations limit the Bank’s authority to invest in certain types of assets and to make certain types of loans.
As of December 31, 2025, the Bank was “well-capitalized” under the PCA framework. Business Activities. The Bank derives its lending and investment powers from the HOLA and its implementing regulations promulgated by the OCC. Those laws and regulations limit the Bank’s authority to invest in certain types of assets and to make certain types of loans.
The Company periodically evaluates its investment in FHLB stock for impairment based on, among other factors, the capital adequacy of the FHLB and its overall financial condition. At December 31, 2024 and December 31, 2023, the Company held $423,000 of Atlantic Community Bankers Bank stock. The stock is restricted and carried in other assets at cost.
The Company periodically evaluates its investment in FHLB stock for impairment based on, among other factors, the capital adequacy of the FHLB and its overall financial condition. At December 31, 2025 and December 31, 2024, the Company held $423,000 of Atlantic Community Bankers Bank stock. The stock is restricted and carried in other assets at cost.
Western New England Bancorp is traded on the NASDAQ under the ticker symbol, “ WNEB ,” and is subject to the NASDAQ stock market rules. Westfield Bank is organized as a federal savings association under the HOLA. The Bank is subject to the supervision of, and to regular examination by, the OCC as its chartering authority and primary federal regulator.
Western New England Bancorp is traded on the NASDAQ under the ticker symbol, “WNEB,” and is subject to the NASDAQ stock market rules. Westfield Bank is organized as a federal savings association under the HOLA. The Bank is subject to the supervision of, and to regular examination by, the OCC as its chartering authority and primary federal regulator.
These laws include, among others, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Truth in Lending Act, the Home Mortgage Disclosure Act, the Real Estate Settlement Procedures Act, various state law counterparts, and the Consumer Financial Protection Act of 2010. 31 Transactions with Affiliates and Loans to Insiders.
These laws include, among others, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Truth in Lending Act, the Home Mortgage Disclosure Act, the Real Estate Settlement Procedures Act, various state law counterparts, and the Consumer Financial Protection Act of 2010. 32 Transactions with Affiliates and Loans to Insiders.
The Bank’s internal investment policy sets limits as a percentage of the total portfolio, identifies acceptable and unacceptable investment practices, and denotes approved security dealers. The effect of changes in interest rates, market values, timing of principal payments and credit risk are considered when purchasing securities.
The Investment Policy sets limits as a percentage of the total portfolio, identifies acceptable and unacceptable investment practices, and denotes approved security dealers. The effect of changes in interest rates, market values, timing of principal payments and credit risk are considered when purchasing securities.
The implementation of the Capital Rules did not have a material impact on the Company’s or the Bank’s consolidated capital levels. The Bank is subject to the Capital Rules as well. The Company and the Bank are each in compliance with the targeted capital ratios under the Capital Rules at December 31, 2024.
The implementation of the Capital Rules did not have a material impact on the Company’s or the Bank’s consolidated capital levels. The Bank is subject to the Capital Rules as well. The Company and the Bank are each in compliance with the targeted capital ratios under the Capital Rules at December 31, 2025.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Net Interest and Dividend Income” for information relating to the average balances and costs of our deposit accounts for the years ended December 31, 2024, 2023 and 2022. Cash Management Services.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Net Interest and Dividend Income” for information relating to the average balances and costs of our deposit accounts for the years ended December 31, 2025, 2024 and 2023. Cash Management Services.
The loan was secured by the borrower’s secondary residence located in New Hampshire and was performing according to its original terms as of December 31, 2024. These residential properties may serve as the borrower’s primary residence, or as vacation homes or investment properties.
The loan was secured by the borrower’s secondary residence located in New Hampshire and was performing according to its original terms as of December 31, 2025. These residential properties may serve as the borrower’s primary residence, or as vacation homes or investment properties.
In the event of a savings and loan holding company’s bankruptcy, any commitment by the savings and loan holding company to a federal banking agency to maintain the capital of a subsidiary insured depository institution will be assumed by the bankruptcy trustee and entitled to priority of payment. 27 Dividends.
In the event of a savings and loan holding company’s bankruptcy, any commitment by the savings and loan holding company to a federal banking agency to maintain the capital of a subsidiary insured depository institution will be assumed by the bankruptcy trustee and entitled to priority of payment. 28 Dividends.
The Bank, as a member of the FHLB, is required to acquire and hold shares of capital stock in the FHLB. Required percentages of stock ownership are subject to change by the FHLB, and the Bank was in compliance with this requirement with an investment in FHLB capital stock at December 31, 2024.
The Bank, as a member of the FHLB, is required to acquire and hold shares of capital stock in the FHLB. Required percentages of stock ownership are subject to change by the FHLB, and the Bank was in compliance with this requirement with an investment in FHLB capital stock at December 31, 2025.
The Federal Reserve has indicated generally that it may be an unsafe or unsound practice for bank holding companies to pay dividends unless the bank holding company’s net income over the preceding year is sufficient to fund the dividends and the expected rate of earnings retention is consistent with the organization’s capital needs, asset quality, and overall financial condition.
The Federal Reserve has indicated generally that it may be an unsafe or unsound practice for savings and loan holding companies to pay dividends unless the savings and loan holding company’s net income over the preceding year is sufficient to fund the dividends and the expected rate of earnings retention is consistent with the organization’s capital needs, asset quality, and overall financial condition.
Lending Activities. Loan Approval Procedures and Authority. Our lending activities follow written, nondiscriminatory underwriting standards and loan origination procedures established by the Company’s Board of Directors (the “Board”) and Management. On an annual basis, the Board approves the Bank’s Loan Policy (the “Loan Policy”).
Our lending activities follow written, nondiscriminatory underwriting standards and loan origination procedures established by the Company’s Board of Directors (the “Board”) and Management. On an annual basis, the Board approves the Bank’s Loan Policy (the “Loan Policy”).
The maximum amount of credit that the FHLB will extend varies from time to time, depending on its policies and the amount of qualifying collateral the member can pledge. The Bank had satisfied its collateral requirement at December 31, 2024.
The maximum amount of credit that the FHLB will extend varies from time to time, depending on its policies and the amount of qualifying collateral the member can pledge. The Bank had satisfied its collateral requirement at December 31, 2025.
The subsidiaries of Western New England Bancorp and the Bank are subject to federal and state laws and regulations, including regulations of the FRB and the OCC, respectively. 26 Set forth below is a description of the significant elements of the laws and regulations applicable to Western New England Bancorp and its subsidiaries.
The subsidiaries of Western New England Bancorp and the Bank are subject to federal and state laws and regulations, including regulations of the FRB and the OCC, respectively. 27 Set forth below is a description of the significant elements of the laws and regulations applicable to Western New England Bancorp and its subsidiaries.
The Company and the Bank evaluated the simplified Capital Rules to determine our adoption status for the applicable filings periods beginning in 2020 and decided not to opt in to the community bank leverage ratio framework. 29 Prompt Corrective Action.
The Company and the Bank evaluated the simplified Capital Rules to determine our adoption status for the applicable filings periods beginning in 2020 and decided not to opt in to the community bank leverage ratio framework. 30 Prompt Corrective Action.
As of December 31, 2024, management concluded that there were no incurred credit losses at December 31, 2024 as all unrealized losses were related to interest rate fluctuations rather than any underlying credit quality of the issuers.
Management concluded that there were no incurred credit losses at December 31, 2025 as all unrealized losses were related to interest rate fluctuations rather than any underlying credit quality of the issuers.
The information found on our website or the website of the SEC is not incorporated by reference into this Annual Report on Form 10-K or any other report we file with or furnish to the SEC. 35
The information found on our website or the website of the SEC is not incorporated by reference into this Annual Report on Form 10-K or any other report we file with or furnish to the SEC. 36
Changes in federal laws permit affiliation among banks, securities firms and insurance companies, which promotes a competitive environment in the financial services industry. 5 At June 30, 2024, which is the most recent date for which data is available from the FDIC, we held approximately 13.2% of the deposits in Hampden County, which was the third largest market share out of the eighteen banks and thrifts with offices in Hampden County.
Changes in federal laws permit affiliation among banks, securities firms and insurance companies, which promotes a competitive environment in the financial services industry. 7 At June 30, 2025, which is the most recent date for which data is available from the FDIC, we held approximately 13.5% of the deposits in Hampden County, which was the third largest market share out of the eighteen banks and thrifts with offices in Hampden County.
As of December 31, 2024, the Bank had twenty-five branches and eight freestanding automated teller machines (“ATMs”). The Bank also conducts business through an additional fourteen freestanding and thirty-three seasonal or temporary ATMs that are owned and serviced by a third party, whereby the Bank pays a rental fee and shares in the surcharge revenue.
As of December 31, 2025, the Bank had twenty-five branches and seven freestanding automated teller machines (“ATMs”). The Bank also conducts business through an additional fourteen freestanding and thirty-three seasonal or temporary ATMs that are owned and serviced by a third party, whereby the Bank pays a rental fee and shares in the surcharge revenue.
At December 31, 2024, commercial and industrial individually evaluated loans with a recorded investment of $494,000 carried a related reserve amount of $156,000. At December 31, 2023, commercial and industrial individually evaluated loans with a recorded investment of $517,000 carried a related reserve amount of $179,000. Management closely monitors these relationships for collateral or credit deterioration.
At December 31, 2024, commercial and industrial individually evaluated loans with a recorded investment of $494,000 carried a related reserve amount of $156,000. Management closely monitors these relationships for collateral or credit deterioration.
The Company manages its loan portfolio to avoid concentration by industry, property type, relationship size, and source of repayment to lessen its credit risk exposure. 7 Interest rates on loans may be fixed or variable and variable rate loans may have fixed initial periods before periodic rate adjustments begin.
The Company manages its loan portfolio to avoid concentration by industry, property type, relationship size, and source of repayment to lessen its credit risk exposure. Interest rates on loans may be fixed or variable and variable rate loans may have a fixed initial period before periodic rate adjustments begin.
The Notes were designed to qualify as Tier 2 capital under the Federal Reserve’s capital adequacy regulations. At December 31, 2024, $19.8 million aggregate principle amount of the Notes was outstanding. 25 Financial Services. Westfield Bank also provides access to insurance and investment products through Westfield Investment Services through LPL Financial (“LPL”), a third-party registered broker-dealer.
The Notes were designed to qualify as Tier 2 capital under the Federal Reserve’s capital adequacy regulations. At December 31, 2025 and December 31, 2024, $19.8 million aggregate principal amount of the Notes was outstanding. 26 Financial Services. Westfield Bank also provides access to insurance and investment products through Westfield Investment Services through LPL Financial (“LPL”), a third-party registered broker-dealer.
Management evaluates the need for a reserve on unfunded loan commitments in a manner consistent with loans held for investment. Based on the foregoing, management believes that the Company is appropriately provisioned for the current economic environment and supportable forecast period as of December 31, 2024.
Management evaluates the need for a reserve on unfunded loan commitments in a manner consistent with loans held for investment. Based on the foregoing, management believes that the Company is appropriately reserved for the current economic environment and supportable forecast period as of December 31, 2025.
Additionally, the Company has no plans to sell these securities and has concluded that it is unlikely it would have to sell these securities prior to the anticipated recovery of the unrealized losses. Deposits. At December 31, 2024 and December 31, 2023, total deposits were $2.3 billion and $2.1 billion, respectively.
Additionally, the Company has no plans to sell these securities and has concluded that it is unlikely it would have to sell these securities prior to the anticipated recovery of the unrealized losses. Deposits. At December 31, 2025 and December 31, 2024, total deposits were $2.4 billion and $2.3 billion, respectively.
The primary objectives of the Bank’s securities portfolio are to provide liquidity and maximize income while preserving safety of principal. Secondary objectives include: providing collateral to secure local municipal deposits, the investment of funds during periods of decreased loan demand, interest rate sensitivity considerations, supporting local communities through the purchase of tax-exempt securities and tax planning considerations.
The primary objective of the Company’s securities portfolio is to provide liquidity and maximize income while preserving safety of principal. Secondary objectives include: providing collateral to secure local municipal deposits, the investment of funds during periods of decreased loan demand, interest rate sensitivity considerations, supporting local communities through the purchase of tax-exempt securities and tax planning considerations.
In addition, at December 31, 2024 and 2023, the Company had an available line of credit of $382.9 million and $48.6 million, respectively, with the FRB Discount Window at an interest rate determined and reset on a daily basis. Borrowings from the FRB Discount Window are secured by certain loans and securities from the Company’s investment portfolio not otherwise pledged.
In addition, at December 31, 2025 and 2024, the Company had an available line of credit of $349.0 million and $382.9 million, respectively, with the FRB Discount Window at an interest rate determined and reset on a daily basis. Borrowings from the FRB Discount Window are secured by certain loans and securities from the Company’s investment portfolio not otherwise pledged.
Western New England Bancorp is a savings and loan holding company as defined by the HOLA. In general, the HOLA restricts the business activities of savings and loan holding companies to those permitted for financial holding companies under the BHC Act.
Western New England Bancorp is a savings and loan holding company as defined by the HOLA. In general, the HOLA restricts the business activities of savings and loan holding companies to those permitted for financial holding companies under the Bank Holding Company Act of 1956, as amended.
The Company originates and funds residential real estate loans, including first mortgages, home equity loans, and home equity lines, secured by one-to-four family residential properties primarily located in western Massachusetts and northern Connecticut. At December 31, 2024, the largest residential real estate loan was $2.0 million.
The Company originates and funds residential real estate loans, including first mortgages, home equity loans, and home equity lines of credit, secured by one-to-four family residential properties primarily located in western Massachusetts and Connecticut. At December 31, 2025, the largest residential real estate loan was $2.0 million.
In accordance with agreements with the FHLB, the qualified collateral must be free and clear of liens, pledges and encumbrances. At December 31, 2024, the Bank had pledged $906.0 million of eligible collateral to support borrowing capacity at the FHLB of Boston. This relationship is an integral component of the Company’s asset-liability management program.
In accordance with agreements with the FHLB, the qualified collateral must be free and clear of liens, pledges and encumbrances. At December 31, 2025, the Bank had pledged $932.3 million of eligible collateral to support borrowing capacity at the FHLB of Boston. This relationship is an integral component of the Company’s asset-liability management program.
All branch and ATM locations serve Hampden County and Hampshire County in western Massachusetts and Hartford County and Tolland County in northern Connecticut. The Bank also provides a variety of banking services including telephone and online banking, remote deposit capture, cash management services, overdraft facilities, night deposit services, and safe deposit facilities.
All branch and ATM locations serve Hampden County and Hampshire County in western Massachusetts and the Capital Region in Connecticut. The Bank also provides a variety of banking services including telephone and online banking, remote deposit capture, cash management services, overdraft facilities, night deposit services, and safe deposit facilities.
Accrued interest receivable on loans held for investment was $7.4 million and $7.5 million at December 31, 2024 and 2023, respectively, and is excluded from the estimate of credit losses.
Accrued interest receivable on loans held for investment was $7.6 million and $7.4 million at December 31, 2025 and 2024, respectively, and is excluded from the estimate of credit losses.
Restrictions on Bank Holding Company Dividends . The Federal Reserve has the authority to prohibit bank holding companies from paying dividends if such payment is deemed to be an unsafe or unsound practice.
Restrictions on Savings and Loan Holding Company Dividends . The Federal Reserve has the authority to prohibit savings and loan holding companies from paying dividends if such payment is deemed to be an unsafe or unsound practice.
Restricted Equity Securities . At December 31, 2024 and December 31, 2023, the Company held $5.4 million and $3.3 million, respectively, of FHLB stock. The FHLB stock is carried at cost and classified as a restricted equity security.
Restricted Equity Securities . At December 31, 2025 and December 31, 2024, the Company held $4.9 million and $5.4 million, respectively, of FHLB stock. The FHLB stock is carried at cost and classified as a restricted equity security.
Loan grades assigned are also tested by the Company’s external loan review firm in accordance with the Company’s loan review policy. The Company participated in commercial real estate loans with outstanding balances of $116.2 million, commercial construction loans with outstanding balances of $14.0 million, and commercial and industrial loans with outstanding balances of $2.4 million at December 31, 2024.
Loan grades assigned are also tested by the Company’s external loan review firm in accordance with the Company’s loan review policy. The Company participated in commercial real estate loans with outstanding balances of $107.2 million, commercial construction loans with outstanding balances of $14.4 million, and commercial and industrial loans with outstanding balances of $14.7 million at December 31, 2025.
The Company is a Massachusetts-chartered stock holding company and a registered savings and loan holding company under the Home Owners’ Loan Act, as amended (the “HOLA”), and is subject to the supervision of and regular examination by the Board of Governors of the Federal Reserve System (the “FRB,” the “Federal Reserve Board” or the “Federal Reserve”) as its primary federal regulator.
The Company is a Massachusetts-chartered stock holding company and a registered savings and loan holding company under the HOLA, and is subject to the supervision of and regular examination by the Board of Governors of the Federal Reserve System (the “FRB,” the “Federal Reserve Board” or the “Federal Reserve”) as its primary federal regulator.
At December 31, 2024, our top ten largest lending relationships have an average exposure of $18.4 million, or 6.8% of total bank risk based capital, with a range in exposure from $15.6 million, or 5.7% of total bank risk based capital, to $22.8 million, or 8.4% or total bank risk based capital.
At December 31, 2025, our top ten largest lending relationships have an average exposure of $18.2 million, or 6.6% of total bank risk-based capital, with a range in exposure from $15.1 million, or 5.5% of total bank risk-based capital, to $22.6 million, or 8.2% or total bank risk-based capital.
As of December 31, 2024, we were in compliance with these limitations on loans to one borrower. Concentrated Commercial Real Estate Lending Regulations. The federal banking agencies, including the OCC, have promulgated guidance governing financial institutions with concentrations in commercial real estate lending.
As of December 31, 2025, the Company was in compliance with these limitations on loans to one borrower. Concentrated Commercial Real Estate Lending Regulations. The federal banking agencies, including the OCC, have promulgated guidance governing financial institutions with concentrations in commercial real estate lending.
The economies of our primary markets have benefited from the presence of large employers such as Baystate Medical Center, Big Y World Class Markets, Center for Human Development, Holyoke Medical Center, MassMutual Financial Group, Mercy Medical Center/Trinity Health of New England, Mestek, Inc., MGM Springfield, Verizon and Westover Air Reserve Base in Massachusetts, and Aetna, Inc., Air National Guard, Collins Aerospace, Connecticut Children’s Medical Center, Hartford Financial Services Group, Hartford Hospital, Institute of Living, Kaman Aerospace Corporation, Lego Systems Inc., Talcott Resolution Life Insurance Company and Travelers Indemnity Company in Connecticut.
The economies of our primary markets have benefited from the presence of large employers such as Baystate Medical Center/Baystate Health, Big Y Foods, Center for Human Development, Holyoke Medical Center, MassMutual Financial Group, Mercy Medical Center/Trinity Health of New England, Mestek, MGM Springfield, Verizon and Westover Air Reserve Base in Massachusetts, and Aetna, Air National Guard, Collins Aerospace/RTX, Connecticut Children’s Medical Center, The Hartford Financial Services Group, Hartford Hospital/Hartford HealthCare, Kaman Corporation, LEGO Systems, Talcott Financial Group and The Travelers Indemnity Company in Connecticut.
This loan was performing in accordance with their original repayment terms at December 31, 2024. 8 Commercial and industrial loans include revolving lines of credit, working capital loans, equipment financing and term loans.
This loan was performing in accordance with its original repayment terms at December 31, 2025. Commercial and industrial loans include revolving lines of credit, working capital loans, equipment financing and term loans.
The Company maintains a comprehensive employee benefit program providing, among other benefits, group medical, dental and vision insurance, health savings accounts and flexible spending accounts, life insurance and disability insurance, a 401(k) Safe Harbor Plan with a competitive company match, an employee stock ownership plan, short-term and long-term incentive compensation programs, tuition reimbursement, paid time off, including vacation days and paid holidays, and wellness and employee assistance programs. 6 Workplace Health and Safety The safety, health and wellness of our employees is considered a top priority.
The Company maintains a comprehensive employee benefit program providing, among other benefits, group medical, dental and vision insurance, health savings accounts and flexible spending accounts, life insurance and disability insurance, a 401(k) Safe Harbor Plan with a competitive company match, an employee stock ownership plan, short-term and long-term incentive compensation programs, tuition reimbursement, paid time off, including vacation days and paid holidays, and wellness and employee assistance programs.
The Bank’s Board of Directors (the “Bank’s Board”) is responsible for establishing overall policy and reviewing performance of the Bank’s investments. Under the Bank’s policy, acceptable portfolio investments include: United States Government obligations, obligations of federal agencies or U.S.
The Board is responsible for establishing overall policy and reviewing performance of the investment portfolio. Under the Investment Policy, acceptable portfolio investments include: United States Government obligations, obligations of federal agencies or U.S.
Changes in the fair value of debt securities classified as HTM or AFS do not affect our income, unless we determine there to be incurred credit losses for those securities in an unrealized loss position.
Changes in the fair value of debt securities classified as held-to-maturity or available-for-sale do not affect our income, unless we determine there to be incurred credit losses for those securities in an unrealized loss position.
ITEM 1. BUSINESS. General. Western New England Bancorp, Inc. (“WNEB” or “Company”) (f/k/a “Westfield Financial, Inc.”) headquartered in Westfield, Massachusetts, is a Massachusetts-chartered stock holding company and is registered as a savings and loan holding company with the Federal Reserve Board under the Bank Holding Company Act of 1956, as amended (the “BHC Act”).
ITEM 1. BUSINESS. General. Western New England Bancorp, Inc. (“WNEB” or “Company”) (f/k/a “Westfield Financial, Inc.”) headquartered in Westfield, Massachusetts, is a Massachusetts-chartered stock holding company and is registered as a savings and loan holding company with the Federal Reserve Board under the Home Owners’ Loan Act, as amended (the “HOLA”).
As of the balance sheet dates reflected in this annual report, HTM securities are carried at amortized cost and AFS securities are carried at fair value. Marketable equity securities are measured at fair value with changes in fair value reported on the Company’s income statement as a component of non-interest income, regardless of whether such gains and losses are realized.
As of the balance sheet dates reflected in this annual report, held-to-maturity securities are carried at amortized cost and available-for-sale securities are carried at fair value. Marketable equity securities are measured at fair value with changes in fair value reported on the Company’s income statement as a component of non-interest income, regardless of whether such gains and losses are realized.
As of December 31, 2024 and December 31, 2023, there were no advances outstanding under the Discount Window.
As of December 31, 2025 and December 31, 2024, there were no advances outstanding under the FRB Discount Window.
The Capital Rules became effective on January 1, 2015, subject to phase-in periods for certain components and other provisions. 28 The Capital Rules: (i) require a capital measure called “Common Equity Tier 1” (“CET1”) and related regulatory capital ratio of CET1 to risk-weighted assets; (ii) specify that Tier 1 capital consists of CET1 and “Additional Tier 1 capital” instruments meeting certain revised requirements; (iii) mandate that most deductions/adjustments to regulatory capital measures be made to CET1 and not to the other components of capital; and (iv) expand the scope of the deductions from and adjustments to capital as compared to existing regulations.
The Capital Rules: (i) require a capital measure called “Common Equity Tier 1” (“CET1”) and related regulatory capital ratio of CET1 to risk-weighted assets; (ii) specify that Tier 1 capital consists of CET1 and “Additional Tier 1 capital” instruments meeting certain revised requirements; (iii) mandate that most deductions/adjustments to regulatory capital measures be made to CET1 and not to the other components of capital; and (iv) expand the scope of the deductions from and adjustments to capital as compared to existing regulations.
Westfield Bank’s headquarters are located at 141 Elm Street in Westfield, Massachusetts. The Bank’s primary lending and deposit market areas include all of Hampden County and Hampshire County in western Massachusetts and Hartford and Tolland Counties in northern Connecticut.
Westfield Bank’s headquarters are located at 141 Elm Street in Westfield, Massachusetts. The Bank’s primary lending and deposit market areas include all of Hampden County and Hampshire County in western Massachusetts and the Capital Region in Connecticut.
At December 31, 2024, the Company’s criticized loan portfolio totaled $38.4 million, or 1.9% of total loans, compared to $39.5 million, or 1.9% of total loans, at December 31, 2023. The Company’s special mention loans totaled $11.4 million, or 0.6% of total loans, at December 31, 2024 and $5.8 million, or 0.3%, of total loans, at December 31, 2023.
At December 31, 2025, the Company’s criticized loan portfolio totaled $39.7 million, or 1.8% of total loans, compared to $38.4 million, or 1.9% of total loans, at December 31, 2024. The Company’s special mention loans totaled $17.2 million, or 0.8% of total loans, at December 31, 2025 and $11.4 million, or 0.6%, of total loans, at December 31, 2024.
Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less cost to sell. Costs relating to development and improvement of property are capitalized, whereas costs relating to the holding of property are expensed. At December 31, 2024 and 2023, the Company carried no OREO balances.
Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less cost to sell. Costs relating to development and improvement of property are capitalized, whereas costs relating to the holding of property are expensed.
Western New England Bancorp is traded on the NASDAQ under the ticker symbol “WNEB” and is subject to the NASDAQ stock market rules. At December 31, 2024, WNEB had consolidated total assets of $2.7 billion, total net loans of $2.1 billion, total deposits of $2.3 billion and total shareholders’ equity of $235.9 million.
Western New England Bancorp is traded on the NASDAQ under the ticker symbol “WNEB” and is subject to the NASDAQ stock market rules. At December 31, 2025, WNEB had consolidated total assets of $2.7 billion, total net loans of $2.2 billion, total deposits of $2.4 billion and total shareholders’ equity of $247.6 million.
If all nonperforming loans had been performing in accordance with their terms, we would have earned additional interest income of $373,000, $373,000 and $257,000 for the years ended December 31, 2024, 2023 and 2022, respectively. 14 OREO.
If all nonaccrual loans had been performing in accordance with their terms, we would have earned additional interest income of $284,000, $373,000 and $373,000 for the years ended December 31, 2025, 2024 and 2023, respectively. 15 OREO.
Decisions about whether to sell or retain residential real estate loans are made based on the interest rate, pricing for loans in the secondary market, and the Company’s liquidity and capital needs.
Residential real estate loans are originated either for sale to investors or retained in the Company’s loan portfolio. Decisions about whether to sell or retain residential real estate loans are made based on the interest rate, pricing for loans in the secondary market, and the Company’s liquidity and capital needs.
In addition, the Company closely monitors classified loans, defined as substandard, doubtful, and loss for signs of deterioration to mitigate the growth in nonperforming loans, including performing additional due diligence, updating valuations and requiring additional financial reporting from the borrower. Loans identified as containing a loss are partially charged-off or fully charged-off.
In addition, the Company closely monitors classified loans, defined as substandard, doubtful, and loss for signs of deterioration to mitigate the growth in nonperforming loans, including performing additional due diligence, updating valuations and requiring additional financial reporting from the borrower.
In 2024 and 2023, interest income on loans represented 90.0% and 90.2% of the total interest income of the Company, respectively. At December 31, 2024, the Bank’s loan portfolio totaled $2.1 billion, or 78.0% of total assets, compared to $2.0 billion, or 79.1% of total assets, at December 31, 2023.
In 2025 and 2024, interest income on loans represented 80.4% and 80.6% of the total revenues of the Company, respectively. At December 31, 2025, the Bank’s loan portfolio totaled $2.2 billion, or 79.7% of total assets, compared to $2.1 billion, or 78.0% of total assets, at December 31, 2024.
Classified loans that were performing but possessed potential weaknesses and, as a result, could ultimately become nonperforming loans totaled $21.6 million, or 1.0% of total loans, at December 31, 2024 and $27.7 million, or 1.4% of total loans, at December 31, 2023.
Classified loans that were performing but possessed potential weaknesses and, as a result, could ultimately become nonaccrual loans totaled $17.4 million, or 0.8% of total loans, at December 31, 2025 and $21.6 million, or 1.0% of total loans, at December 31, 2024.
As of December 31, 2024, the Bank employed 335 total employees, with 286 employed full-time and 49 employed part-time. Employee retention helps the Company operate efficiently and effectively. As of December 31, 2024, our average employee tenure was 8.8 years. There are many factors that contribute to the success of the Company.
As of December 31, 2025, the Bank employed 334 total employees, with 292 employed full-time and 42 employed part-time. Employee retention helps the Company operate efficiently and effectively. As of December 31, 2025, our average employee tenure was eight years. There are many factors that contribute to the success of the Company.
At December 31, 2024, the Company reported unrealized losses on the held-to-maturity securities portfolio of $39.4 million, or 19.2% of the amortized cost basis of the held-to-maturity securities portfolio, compared to $35.7 million, or 16.0% of the amortized cost basis of the held-to-maturity securities portfolio at December 31, 2023.
At December 31, 2025, the Company reported gross unrealized losses on the held-to-maturity securities portfolio of $30.5 million, or 16.2% of the amortized cost basis of the held-to-maturity securities portfolio, compared to $39.4 million, or 19.2% of the amortized cost basis of the held-to-maturity securities portfolio at December 31, 2024.
At December 31, 2024 and December 31, 2023, there was $94.8 million and $111.0 million, respectively, in commercial construction loans included within commercial real estate loans. Commercial and Industrial Loans.
At December 31, 2025 and December 31, 2024, there was $77.3 million and $94.8 million, respectively, in commercial construction loans included within commercial real estate loans. Commercial and Industrial Loans.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

34 edited+7 added−6 removed161 unchanged
Biggest changeThe Company’s failure to remain “adequately-capitalized” for bank regulatory purposes could affect customer confidence, restrict the Company’s ability to grow (both assets and branching activity), increase the Company’s costs of funds and FDIC insurance costs, prohibit the Company’s ability to pay dividends on common shares, and its ability to make acquisitions, and have a negative impact on the Company’s business, results of operation and financial conditions, generally.
Biggest changeThe Company’s capital ratios could decline due to it experiencing rapid asset growth, or due to other factors, such as, by way of example only, possible future net operating losses, impairment charges against tangible or intangible assets, or adjustments to retained earnings due to changes in accounting rules. 44 The Company’s failure to remain “adequately-capitalized” for bank regulatory purposes could affect customer confidence, restrict the Company’s ability to grow (both assets and branching activity), increase the Company’s costs of funds and FDIC insurance costs, prohibit the Company’s ability to pay dividends on common shares, and its ability to make acquisitions, and have a negative impact on the Company’s business, results of operation and financial conditions, generally.
These factors include, but are not limited to, the Company’s: ● past and future dividend practice; ● financial condition, performance, creditworthiness and prospects; ● quarterly variations in the Company’s operating results or the quality of the Company’s assets; ● operating results that vary from the expectations of management, securities analysts and investors; ● c hanges in expectations as to the Company’s future financial performance; ● announcements of innovations, new products, strategic developments, significant contracts, acquisitions and other material events by the Company or its competitors; ● the operating and securities price performance of other companies that investors believe are comparable to the Company’s; ● future sales of the Company’s equity or equity-related securities; ● the credit, mortgage and housing markets, the markets for securities relating to mortgages or housing, and developments with respect to financial institutions generally; ● catastrophic events, including natural disasters, and public health crises; and ● instability in global financial markets and global economies and general market conditions, such as interest or foreign exchange rates, stock, commodity or real estate valuations or volatility, budget deficits or sovereign debt level concerns and other geopolitical, regulatory or judicial events . 47 In addition, the banking industry may be more affected than other industries by certain economic, credit, regulatory or information security issues.
These factors include, but are not limited to, the Company’s: ● past and future dividend practice; ● financial condition, performance, creditworthiness and prospects; ● quarterly variations in the Company’s operating results or the quality of the Company’s assets; ● operating results that vary from the expectations of management, securities analysts and investors; ● c hanges in expectations as to the Company’s future financial performance; ● announcements of innovations, new products, strategic developments, significant contracts, acquisitions and other material events by the Company or its competitors; ● the operating and securities price performance of other companies that investors believe are comparable to the Company’s; ● future sales of the Company’s equity or equity-related securities; ● the credit, mortgage and housing markets, the markets for securities relating to mortgages or housing, and developments with respect to financial institutions generally; ● catastrophic events, including natural disasters, and public health crises; and ● instability in global financial markets and global economies and general market conditions, such as interest or foreign exchange rates, stock, commodity or real estate valuations or volatility, budget deficits or sovereign debt level concerns and other geopolitical, regulatory or judicial events . 48 In addition, the banking industry may be more affected than other industries by certain economic, credit, regulatory or information security issues.
The regulators of the Company and the Bank are increasingly focused on liquidity and other risks after the bank failures of 2023. ● Lowered consumer and business confidence levels that could result in declines in credit usage, adverse changes in payment patterns and increases in loan delinquencies and default rates, which management expects would adversely impact the Bank’s charge-offs and provision for loan losses. ● Market developments may adversely affect the Bank’s securities portfolio by causing other-than-temporary-impairments, prompting write-downs and securities losses. 36 ● Competition in banking and financial services industry could intensify as a result of the increase consolidation of financial services companies in connection with current market conditions or otherwise. ● The Company’s ability to assess the creditworthiness of its customers may be impaired if the models and approaches the Company uses to select, manage, and underwrite its customers become less predictive of future behaviors. ● The Company could suffer decreases in demand for loans or other financial products and services or decreased deposits or other investments in accounts with the Company. ● The value of loans and other assets or collateral securing loans may decrease.
The regulators of the Company and the Bank are increasingly focused on liquidity and other risks after the bank failures of 2023. ● Lowered consumer and business confidence levels that could result in declines in credit usage, adverse changes in payment patterns and increases in loan delinquencies and default rates, which management expects would adversely impact the Bank’s charge-offs and provision for loan losses. ● Market developments may adversely affect the Bank’s securities portfolio by causing other-than-temporary-impairments, prompting write-downs and securities losses. 37 ● Competition in banking and financial services industry could intensify as a result of the increase consolidation of financial services companies in connection with current market conditions or otherwise. ● The Company’s ability to assess the creditworthiness of its customers may be impaired if the models and approaches the Company uses to select, manage, and underwrite its customers become less predictive of future behaviors. ● The Company could suffer decreases in demand for loans or other financial products and services or decreased deposits or other investments in accounts with the Company. ● The value of loans and other assets or collateral securing loans may decrease.
Such attention diverts time and other resources from other activities and there is no assurance that our efforts will be effective. 44 In the normal course of business, we collect and retain certain personal information provided by our customers, employees and vendors. We also rely extensively on computer systems to process transactions and manage our business.
Such attention diverts time and other resources from other activities and there is no assurance that our efforts will be effective. In the normal course of business, we collect and retain certain personal information provided by our customers, employees and vendors. We also rely extensively on computer systems to process transactions and manage our business.
Accordingly, we may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures, and thus it is impossible for us to entirely mitigate this risk. We Continually Encounter Technological Change and The Failure to Understand and Adapt to These Changes Could Hurt Our Business.
Accordingly, we may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures, and thus it is impossible for us to entirely mitigate this risk. 45 We Continually Encounter Technological Change and The Failure to Understand and Adapt to These Changes Could Hurt Our Business.
These risks may prevent us from fully realizing the anticipated benefits of an acquisition or cause the realization of such benefits to take longer than expected. 41 The Company Relies on Third-Party Service Providers. The Company relies on independent firms to provide critical services necessary to conducting its business.
These risks may prevent us from fully realizing the anticipated benefits of an acquisition or cause the realization of such benefits to take longer than expected. The Company Relies on Third-Party Service Providers. The Company relies on independent firms to provide critical services necessary to conducting its business.
Even the most well protected information, networks, systems and facilities remain potentially vulnerable because the techniques used in such attempted security breaches evolve and generally are not recognized until launched against a target, and in some cases are designed not be detected and, in fact, may not be detected.
Even the most well-protected information, networks, systems and facilities remain potentially vulnerable because the techniques used in such attempted security breaches evolve and generally are not recognized until launched against a target, and in some cases are designed not to be detected and, in fact, may not be detected.
The Company’s market area is principally located in Hampden and Hampshire Counties, Massachusetts and Hartford and Tolland Counties in northern Connecticut. The local economy may affect future growth possibilities. The Company’s future growth opportunities depend on the growth and stability of our regional economy and the ability to expand in our market area.
The Company’s market area is principally located in Hampden and Hampshire Counties, Massachusetts and Hartford and Tolland Counties in Connecticut. The local economy may affect future growth possibilities. The Company’s future growth opportunities depend on the growth and stability of our regional economy and the ability to expand in our market area.
As a result of any of these factors, the value of collateral backing a loan may be less than estimated at the time of assessment, and if a default occurs the Company may not recover the outstanding balance of the loan. 39 The Company’s Investments are Subject to Interest Rate Risks, Credit Risk and Liquidity Risk and Declines in Value in its Investments May Require the Company to Record Impairment Charges That Could Have a Material Adverse Effect on the Company’s Results of Operations and Financial Condition.
As a result of any of these factors, the value of collateral backing a loan may be less than estimated at the time of assessment, and if a default occurs the Company may not recover the outstanding balance of the loan. 40 The Company’s Investments are Subject to Interest Rate Risks, Credit Risk and Liquidity Risk and Declines in Value in its Investments May Require the Company to Record Impairment Charges That Could Have a Material Adverse Effect on the Company’s Results of Operations and Financial Condition.
Although the Company may acquire any real estate or other assets that secure defaulted loans through foreclosures or other similar remedies, the amounts owed under the defaulted loans may exceed the value of the assets acquired. 38 The Company maintains an allowance for credit losses, which is established through a provision for credit losses charged to earnings that represents management’s estimate of expected losses inherent within the Company’s existing loans held for investment portfolio.
Although the Company may acquire any real estate or other assets that secure defaulted loans through foreclosures or other similar remedies, the amounts owed under the defaulted loans may exceed the value of the assets acquired. 39 The Company maintains an allowance for credit losses, which is established through a provision for credit losses charged to earnings that represents management’s estimate of expected losses inherent within the Company’s existing loans held for investment portfolio.
Any such increase in funding costs or restrictions could have a negative impact on the Company’s net interest income and, consequently, on its results of operations and financial condition. 42 We Operate In a Highly-Regulated Environment That is Subject to Extensive Government Supervision and Regulation, Which May Interfere With Our Ability to Conduct Business and May Adversely Impact the Results of our Operations.
Any such increase in funding costs or restrictions could have a negative impact on the Company’s net interest income and, consequently, on its results of operations and financial condition. 43 We Operate In a Highly-Regulated Environment That is Subject to Extensive Government Supervision and Regulation, Which May Interfere With Our Ability to Conduct Business and May Adversely Impact the Results of our Operations.
While we have established and regularly test disaster recovery procedures, the occurrence of any such event could have a material adverse effect on our business, operations and financial condition. 45 The Company May Not be Able to Attract, Retain or Develop Key Personnel. The Company’s success depends, in large part, on its ability to attract, retain and develop key personnel.
While we have established and regularly test disaster recovery procedures, the occurrence of any such event could have a material adverse effect on our business, operations and financial condition. 46 The Company May Not be Able to Attract, Retain or Develop Key Personnel. The Company’s success depends, in large part, on its ability to attract, retain and develop key personnel.
In addition, as the owner or former owner of a contaminated site, we may be subject to common law claims by third parties based on damages and costs resulting from environmental contamination emanating from the property. 40 Climate Change or Government Action and Societal Responses to Climate Change Could Adversely Affect Our Results of Operations.
In addition, as the owner or former owner of a contaminated site, we may be subject to common law claims by third parties based on damages and costs resulting from environmental contamination emanating from the property. 41 Climate Change or Government Action and Societal Responses to Climate Change Could Adversely Affect Our Results of Operations.
As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates and be adversely affected should the assumptions and estimates used be incorrect, or change over time due to changes in circumstances. 48 business, financial condition, results of operations and the market price of the Company’s common stock.
As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates and be adversely affected should the assumptions and estimates used be incorrect, or change over time due to changes in circumstances. 49 business, financial condition, results of operations and the market price of the Company’s common stock.
However, if our assumptions are wrong or overall economic conditions are significantly different than anticipated, our hedging and other risk mitigation strategies may be ineffective and may adversely impact our financial condition and results of operations. 37 Our Loan Portfolio Includes Loans with a Higher Risk of Loss.
However, if our assumptions are wrong or overall economic conditions are significantly different than anticipated, our hedging and other risk mitigation strategies may be ineffective and may adversely impact our financial condition and results of operations. 38 Our Loan Portfolio Includes Loans with a Higher Risk of Loss.
Any financial liability or reputation damage could have a material adverse effect on the Company’s business, which in turn, could have a material adverse effect on the Company’s financial condition and results of operations. 46 The Company’s Insurance Coverage May Not be Adequate to Prevent Additional Liabilities or Expenses.
Any financial liability or reputation damage could have a material adverse effect on the Company’s business, which in turn, could have a material adverse effect on the Company’s financial condition and results of operations. 47 The Company’s Insurance Coverage May Not be Adequate to Prevent Additional Liabilities or Expenses.
Notwithstanding these reductions, there can be no assurances that the Federal Reserve Board will continue to cut the target federal funds rate in 2025 and it may remain open to increasing rates further should inflation dynamics remain unfavorable.
Notwithstanding these reductions, there can be no assurances that the Federal Reserve Board will continue to cut the target federal funds rate in 2026 and it may remain open to increasing rates further should inflation dynamics remain unfavorable.
We face cybersecurity risks and risks associated with security breaches or disruptions such as those through cyber-attacks or cyber intrusions over the internet, malware, computer viruses, attachments to emails, social engineering and phishing schemes or persons inside our organization.
We face cybersecurity risks and risks associated with security breaches or disruptions such as those through cyber-attacks or cyber intrusions over the internet, malware, computer viruses, attachments and links in emails, social engineering and phishing schemes or persons inside our organization.
Our future success depends, in part, upon our ability to address the needs of our customers by using technology to provide products and services that will satisfy customer demands, as well as to create additional efficiencies in our operations. Many of our competitors have substantially greater resources to invest in technological improvements.
Our future success depends, in part, upon our ability to address the needs of our customers by using technology to provide products and services that will satisfy customer demands, as well as create additional efficiencies in our operations. Many of our competitors have substantially greater resources to invest in technological improvements, including the use of artificial intelligence.
While the Federal Reserve began reducing the federal funds rate in 2024, there can be no assurances that the Federal Reserve will continue to cut target funds rates in 2025 and it may remain open to increasing rates further should inflation dynamics remain unfavorable in 2025.
While the Federal Reserve reduced the federal funds rate in 2025, there can be no assurances that the Federal Reserve will continue to cut target funds rates in 2026 and it may remain open to increasing rates further should inflation dynamics remain unfavorable in 2026.
The Company’s earnings and cash flows are largely dependent upon its net interest income, meaning the difference between interest income earned on interest-earning assets and interest expense paid on interest-bearing liabilities. Net interest income is the most significant component of our net income, accounting for approximately 82.3% of total revenues in 2024.
The Company’s earnings and cash flows are largely dependent upon its net interest income, meaning the difference between interest income earned on interest-earning assets and interest expense paid on interest-bearing liabilities. Net interest income is the most significant component of our net income, accounting for approximately 84.8% of total revenues in 2025.
For the years ended December 31, 2024, 2023 and 2022, our net interest income was $59.8 million, $67.9 million, and $79.2 million, respectively. The amount of our net interest income is influenced by the overall interest rate environment, competition, and the amount of our interest-earning assets relative to the amount of our interest-bearing liabilities.
For the years ended December 31, 2025, 2024 and 2023, our net interest income was $70.1 million, $59.8 million, and $67.9 million, respectively. The amount of our net interest income is influenced by the overall interest rate environment, competition, and the amount of our interest-earning assets relative to the amount of our interest-bearing liabilities.
During 2024, the Federal Reserve Board began reducing the federal funds rate, which had been raised significantly during 2022 and 2023 to combat rising inflation in the U.S.
During 2025, the Federal Reserve Board continued reducing the federal funds rate, which had been raised significantly during 2022 and 2023 to combat rising inflation in the U.S.
The occurrence of any failures or interruptions of the independent firms’ systems or in their delivery of services, or failure to perform in accordance with contracted service level agreements, for any number of reasons could also impact the Company’s ability to conduct business and process transactions and result in loss of customer business and damage to the Company’s reputation, any of which may have a material adverse effect on the Company’s business, financial condition and results of operation.
The occurrence of any failures or interruptions of the independent firms’ systems or in their delivery of services, or failure to perform in accordance with contracted service level agreements, for any number of reasons could also impact the Company’s ability to conduct business and process transactions and result in loss of customer business and damage to the Company’s reputation, any of which may have a material adverse effect on the Company’s business, financial condition and results of operation. 42 The Company Relies on Dividends from the Bank for Substantially All of its Revenue.
At December 31, 2024, the Bank has $36.9 million in CDARS reciprocal deposits and $22.3 million in ICS network deposits. These amounts, are reciprocal and are not considered brokered deposits under recent regulatory reform. The Company, as Part of its Strategic Plans, Periodically Considers Potential Acquisitions.
At December 31, 2025, the Bank has $45.4 million in CDARS reciprocal deposits and $89.7 million in ICS network deposits. These amounts, are reciprocal and are not considered brokered deposits under recent regulatory reform. The Company, as Part of its Strategic Plans, Periodically Considers Potential Acquisitions.
Among other sources of funds, the Company, from time to time, relies on brokered deposits to provide funds with which to make loans and provide for other liquidity needs. At December 31, 2024 and 2023, the Bank had $1.7 million in brokered time deposits. One of the Bank’s sources for deposits is CDARS.
Among other sources of funds, the Company, from time to time, relies on brokered deposits to provide funds with which to make loans and provide for other liquidity needs. There were no brokered time deposits at December 31, 2025. One of the Bank’s sources for deposits is CDARS.
In addition, there are continuing concerns related to, among other things, the level of U.S. government debt and fiscal actions that may be taken to address that debt, a potential resurgence of economic and political tensions with China and the Russian invasion of Ukraine, all of which may have a destabilizing effect on financial markets and economic activity.
In addition, there are continuing concerns related to, among other things, the level of U.S. government debt and fiscal actions that may be taken to address that debt, economic and political instability and uncertainty, wars and military conflict, such as in Ukraine, the Middle East and Venezuela, all of which may have a destabilizing effect on financial markets and economic activity.
The historical information either experienced by the Company or by a selection of peer banks, when appropriate, is derived from a combination of recessionary and non-recessionary performance periods for which data is available.
The historical information either experienced by the Company or by a selection of peer banks, when appropriate, is derived from a combination of recessionary and non-recessionary performance periods for which data is available. The expected loss estimates for the consumer loan segment are based on historical loss rates using the WARM method.
The CFPB also has authority to take enforcement actions, including cease-and-desist orders or civil monetary penalties, if it finds that we offer consumer financial products and services in violation of federal consumer financial protection laws. 43 If we were unable to comply with future regulatory directives, or if we were unable to comply with the terms of any future supervisory requirements to which we may become subject, then we could become subject to a variety of supervisory actions and orders, including cease and desist orders, prompt corrective actions, memoranda of understanding, and other regulatory enforcement actions.
If we were unable to comply with future regulatory directives, or if we were unable to comply with the terms of any future supervisory requirements to which we may become subject, then we could become subject to a variety of supervisory actions and orders, including cease and desist orders, prompt corrective actions, memoranda of understanding, and other regulatory enforcement actions.
General Risk Factors Changes in the Local Economy May Affect our Future Growth Possibilities. The Company’s success depends principally on the general economic conditions of the primary market areas in which the Company operates.
The Company’s success depends principally on the general economic conditions of the primary market areas in which the Company operates.
The Company Relies on Dividends from the Bank for Substantially All of its Revenue. The Company is a separate and distinct legal entity from the Bank. It receives substantially all of its revenue from dividends paid by the Bank.
The Company is a separate and distinct legal entity from the Bank. It receives substantially all of its revenue from dividends paid by the Bank. These dividends are the principal source of funds used to pay dividends on the Company’s common stock and interest and principal on the Company’s subordinated debt.
These dividends are the principal source of funds used to pay dividends on the Company’s common stock and interest and principal on the Company’s subordinated debt. Various federal and state laws and regulations limit the amount of dividends that the Bank may pay to the Company.
Various federal and state laws and regulations limit the amount of dividends that the Bank may pay to the Company.
We may not be able to effectively implement new technology-driven products and services or be successful in marketing these products and services to customers. Failure to successfully keep pace with technological changes affecting the financial services industry could have a material adverse impact on our business and, in turn, our financial condition and results of operations.
Failure to successfully keep pace with technological changes affecting the financial services industry could have a material adverse impact on our business and, in turn, our financial condition and results of operations. The Development and Use of Artificial Intelligence Exposes Us to Risks That May Adversely Impact our Business.
While we have policies and procedures designed to prevent such violations, there can be no assurance that violations will not occur. See the section titled, “Supervision and Regulation” in ITEM 1. Business. Since the 2008 global financial crisis, financial institutions have been subject to increased scrutiny from Congress, state legislatures and federal and state financial regulatory agencies.
While we have policies and procedures designed to prevent such violations, there can be no assurance that violations will not occur. We cannot provide assurance that future changes in laws, regulations and policies will not adversely affect our business. See the section titled, “Supervision and Regulation” in ITEM 1. Business.
Removed
Moreover, as the effects of climate change continue to create a level of concern for the state of the global environment, companies are facing increasing scrutiny from customers, regulators, investors and other stakeholders related to their environmental, social and governance (“ESG”) practices and disclosure.
Added
The CFPB also has authority to take enforcement actions, including cease-and-desist orders or civil monetary penalties, if it finds that we offer consumer financial products and services in violation of federal consumer financial protection laws.
Removed
New government regulations could result in more stringent forms of ESG oversight and reporting and diligence and disclosure requirements. Increased ESG related compliance costs, in turn, could result in increases to our overall operational costs.
Added
We may not be able to keep pace with technological change or effectively implement new technology-driven products and services or be successful in marketing these products and services to customers.
Removed
Failure to adapt to or comply with regulatory requirements or investor or stakeholder expectations and standards, including with respect to the Company’s involvement in certain industries or projects associated with causing or exacerbating climate change, may negatively affect the Company’s reputation and commercial relationships, which could adversely affect our business.
Added
We or our third-party providers may develop or incorporate artificial intelligence (“AI”) technology in certain business processes, services, or products. The development and use of AI poses a number of risks and challenges to our business.
Removed
Changes to the legal and regulatory framework have significantly altered the laws and regulations under which we operate. Compliance with these changes and any additional or amended laws, regulations and regulatory policies may reduce our ability to effectively compete in attracting and retaining customers.
Added
The legal and regulatory environment relating to AI is uncertain and rapidly evolving, and we may be subject to increasing regulations related to our use of these technologies, including regulations related to privacy, data security, and intellectual property rights, which could expose us to legal risks.
Removed
The passage and continued implementation of the Dodd-Frank Act, among other laws and regulations, has increased our costs of doing business and resulted in decreased revenues and net income. We cannot provide assurance that future changes in laws, regulations and policies will not adversely affect our business.
Added
AI models, particularly generative AI models, may produce incorrect, biased, or misleading results, expose confidential information, or infringe on intellectual property rights.
Removed
The Company’s capital ratios could decline due to it experiencing rapid asset growth, or due to other factors, such as, by way of example only, possible future net operating losses, impairment charges against tangible or intangible assets, or adjustments to retained earnings due to changes in accounting rules.
Added
Further, we may rely on AI models developed by third parties, and, to that extent, would be subject to additional risks, including limited oversight of how these models are developed and trained and potential exposure to unauthorized data usage.
Added
If our AI models, or those developed by third parties, produce inaccurate or controversial results, we could face legal liability, regulatory scrutiny, reputational harm, or operational inefficiencies. These risks could negatively impact our business, financial results, and the perception of our security measures. General Risk Factors Changes in the Local Economy May Affect our Future Growth Possibilities.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeLocation Ownership Year Opened Year of Lease or License Expiration Main Office: 141 Elm Street Westfield, MA Owned 1964 N/A Technology Center: 9-13 Chapel Street Westfield, MA Leased 2015 2028 Retail Lending: 136 Elm Street Westfield, MA Owned 2011 N/A Commercial Lending & Middle Market: 1500 Main Street Springfield, MA Leased 2014 2025 Commercial Lending/Credit Admin and Training Center: 219/229 Exchange Street Chicopee, MA Owned 2009/1998 N/A Branch Offices: 206 Park Street West Springfield, MA Owned 1957 N/A 655 Main Street Agawam, MA Owned 1968 N/A 26 Arnold Street Westfield, MA Owned 1976 N/A 300 Southampton Road Westfield, MA Owned 1987 N/A 462 College Highway Southwick, MA Owned 1990 N/A 382 North Main Street East Longmeadow, MA Leased 1997 2027 1500 Main Street Springfield, MA Leased 2006 2028 51 Location Ownership Year Opened Year of Lease or License Expiration 1650 Northampton Street Holyoke, MA Owned 2001 N/A 560 East Main Street Westfield, MA Owned 2007 N/A 237 South Westfield Street Feeding Hills, MA Leased 2009 2028 12 East Granby Road Granby, CT Owned 2021 N/A 47 Palomba Drive Enfield, CT Leased 2014 2029 39 Morgan Road West Springfield, MA Owned 2005 N/A 1342 Liberty Street (1) Springfield, MA Owned 2008 N/A 70 Center Street Chicopee, MA Owned 1973 N/A 569 East Street Chicopee, MA Owned 1976 N/A 599 Memorial Drive Chicopee, MA Leased 1977 2027 435 Burnett Road Chicopee, MA Owned 1990 N/A 477A Center Street Ludlow, MA Leased 2002 2032 350 Palmer Road Ware, MA Leased 2009 2027 32 Willamansett Street South Hadley, MA Leased 2008 2027 14 Russell Road Huntington, MA Owned 2020 N/A 337 Cottage Grove Road Bloomfield, CT Leased 2020 2035 977 Farmington Avenue West Hartford, CT Leased 2020 2030 52 Location Ownership Year Opened Year of Lease or License Expiration ATMs (2) : 1000 State Street Springfield, MA Leased 2003 2025 788 Memorial Avenue West Springfield, MA Leased 2006 2025 2620 Westfield Street West Springfield, MA Leased 2005 2029 98 Southwick Road Westfield, MA Leased 2006 2026 115 West Silver Street Westfield, MA Tenant at will 2005 N/A 98 Lower Westfield Road Holyoke, MA Leased 2010 2025 Westfield State University 577 Western Avenue Westfield, MA Ely Hall Tenant at will 2010 N/A 208 College Highway Southwick, MA Leased 2010 2025 110 Cherry Street Holyoke, MA Tenant at will 2018 N/A 291 Springfield Street Chicopee, MA Tenant at will 2015 N/A Springfield Visitors Center 1319 Main Street Springfield, MA Leased 2018 2026 Union Station 55 Frank B.
Biggest changeLocation Ownership Year Opened Year of Lease or License Expiration Main Office: 141 Elm Street Westfield, MA Owned 1964 N/A Technology Center: 9-13 Chapel Street Westfield, MA Leased 2015 2028 Retail Lending: 136 Elm Street Westfield, MA Owned 2011 N/A Commercial Lending & Middle Market: 1500 Main Street Springfield, MA Leased 2014 2026 Commercial Lending/Credit Admin and Training Center: 219/229 Exchange Street Chicopee, MA Owned 2009/1998 N/A Branch Offices: 206 Park Street West Springfield, MA Owned 1957 N/A 655 Main Street Agawam, MA Owned 1968 N/A 26 Arnold Street Westfield, MA Owned 1976 N/A 300 Southampton Road Westfield, MA Owned 1987 N/A 462 College Highway Southwick, MA Owned 1990 N/A 382 North Main Street East Longmeadow, MA Leased 1997 2027 1500 Main Street Springfield, MA Leased 2006 2028 52 Location Ownership Year Opened Year of Lease or License Expiration 1650 Northampton Street Holyoke, MA Owned 2001 N/A 560 East Main Street Westfield, MA Owned 2007 N/A 237 South Westfield Street Feeding Hills, MA Leased 2009 2028 12 East Granby Road Granby, CT Owned 2021 N/A 47 Palomba Drive Enfield, CT Leased 2014 2029 39 Morgan Road West Springfield, MA Owned 2005 N/A 1342 Liberty Street (1) Springfield, MA Owned 2008 N/A 70 Center Street Chicopee, MA Owned 1973 N/A 569 East Street Chicopee, MA Owned 1976 N/A 599 Memorial Drive Chicopee, MA Leased 1977 2027 435 Burnett Road Chicopee, MA Owned 1990 N/A 477A Center Street Ludlow, MA Leased 2002 2032 350 Palmer Road Ware, MA Leased 2009 2027 32 Willamansett Street South Hadley, MA Leased 2008 2027 14 Russell Road Huntington, MA Owned 2020 N/A 337 Cottage Grove Road Bloomfield, CT Leased 2020 2035 977 Farmington Avenue West Hartford, CT Leased 2020 2030 53 Location Ownership Year Opened Year of Lease or License Expiration ATMs (2) : 1000 State Street Springfield, MA Leased 2003 2026 2620 Westfield Street West Springfield, MA Leased 2005 2029 98 Southwick Road Westfield, MA Leased 2006 2026 115 West Silver Street Westfield, MA Tenant at will 2005 N/A 98 Lower Westfield Road Holyoke, MA Leased 2010 2030 Westfield State University 577 Western Avenue Westfield, MA Ely Hall Tenant at will 2010 N/A 208 College Highway Southwick, MA Leased 2010 2032 110 Cherry Street Holyoke, MA Tenant at will 2018 N/A 291 Springfield Street Chicopee, MA Tenant at will 2015 N/A Springfield Visitors Center 1319 Main Street Springfield, MA Leased 2018 2026 Union Station 55 Frank B.
Murray Street Springfield, MA Leased 2018 2028 701 Center Street Chicopee, MA Tenant at will 2015 N/A 627 Randall Road Ludlow, MA Tenant at will 2015 N/A 26 Central Street West Springfield, MA Tenant at will 2021 N/A 1144 Southampton Road Westfield, MA Leased 2022 2027 53 Location Ownership Year Opened Year of Lease or License Expiration Big E ATMs: 1305 Memorial Avenue West Springfield, MA Better Living Center Leased 2011 2026 Better Living Center Leased 2011 2026 Better Living Center (Door 6) Leased 2011 2026 Big E Coliseum Leased 2015 2026 Big E Young Building Leased 2011 2026 Big E Mallary Complex Leased 2011 2026 _____________________________ (1) The parking lot on this property is leased.
Murray Street Springfield, MA Leased 2018 2028 701 Center Street Chicopee, MA Tenant at will 2015 N/A 627 Randall Road Ludlow, MA Tenant at will 2015 N/A 26 Central Street West Springfield, MA Tenant at will 2021 N/A 1144 Southampton Road Westfield, MA Leased 2022 2027 54 Location Ownership Year Opened Year of Lease or License Expiration Big E ATMs: 1305 Memorial Avenue West Springfield, MA Better Living Center Leased 2011 2026 Better Living Center Leased 2011 2026 Better Living Center (Door 6) Leased 2011 2026 Big E Coliseum Leased 2015 2026 Big E Young Building Leased 2011 2026 Big E Mallary Complex Leased 2011 2026 _____________________________ (1) The parking lot on this property is leased.
ITEM 2. PROPERTIES. The Company currently conducts business through our twenty-five banking offices, eight free-standing ATMs and an additional fourteen free-standing and thirty-three seasonal or temporary ATMs that are owned and serviced by a third party, whereby the Bank pays a rental fee and shares in the surcharge revenue.
ITEM 2. PROPERTIES. The Company currently conducts business through our twenty-five banking offices, seven free-standing ATMs and an additional fourteen free-standing and thirty-three seasonal or temporary ATMs that are owned and serviced by a third party, whereby the Bank pays a rental fee and shares in the surcharge revenue.
The following table sets forth certain information regarding our properties as of December 31, 2024. As of this date, the premises and equipment, net of depreciation, owned by us had an aggregate net book value of $24.4 million. We believe that our existing facilities are sufficient for our current needs.
The following table sets forth certain information regarding our properties as of December 31, 2025. As of this date, the premises and equipment, net of depreciation, owned by us had an aggregate net book value of $23.3 million. We believe that our existing facilities are sufficient for our current needs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS. During the fiscal year ended December 31, 2024, except as set forth below, the Company was not involved in any material pending legal proceedings as a plaintiff or as a defendant, other than routine legal proceedings occurring in the ordinary course of business.
Biggest changeITEM 3. LEGAL PROCEEDINGS. During the twelve months ended December 31, 2025, there were no material pending legal proceedings to which the Company or its subsidiaries are a party to or to which any of its property is subject, other than routine legal proceedings occurring in the ordinary course of business.
Removed
Management believes that those routine legal proceedings involve, in the aggregate, amounts that are immaterial to the Company’s financial condition and results of operations financial condition or results of operations.
Added
Management does not believe resolution of any present litigation will have a material adverse effect on the business, consolidated financial condition or results of operations of the Company.
Removed
In the fourth quarter of 2023, the Company reached an agreement to settle two (2) purported class action lawsuits concerning the Company’s deposit products and related disclosures, specifically involving overdraft fees and insufficient funds fees.
Removed
The matters, which asserted claims for breach of contract including the covenant of good faith and fair dealing against the Company, were filed in the Massachusetts Superior Court, County of Suffolk, on June 10, 2022 and July 29, 2022, respectively.
Removed
Also in March 2022, the Company received from the named plaintiff in one of the putative class action lawsuits a demand letter pursuant to the Massachusetts Consumer Protection Act, M.G.L Ch. 93A (“Chapter 93A”).
Removed
The demand letter sought restitution and debt forgiveness for the named plaintiff and the putative class, plus double or treble damages and reasonable attorneys’ fees, as may be allowed under Chapter 93A.
Removed
The Bank retained outside litigation counsel in these matters, and discussions to find a mutually acceptable resolution, including an arms-length mediation before a neutral mediator, proceeded between the parties. On December 29, 2023, the parties entered into an agreement to settle both actions on a class basis.
Removed
Pursuant to the settlement agreement and for purposes of effectuating the settlement, on January 5, 2024, the cases were refiled as a single action in federal court in Massachusetts.
Removed
Under the terms of the settlement agreement, the Bank agreed to pay approximately $510,000 in exchange for the dismissal with prejudice and release of all claims that were or could have been asserted in the putative class action lawsuits on behalf of the plaintiffs and all putative settlement class members.
Removed
On January 23, 2025 the Court granted final approval of the settlement. During the year ended December 31, 2023, the $510,000 in settlement expense was included in non-interest expense in the Company’s Consolidated Statements of Net Income.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePeriod Total Number of Shares Purchased Average Price Paid per Share ($) Total Number of Shares Purchased as Part of Publicly Announced Programs Maximum Number of Shares that May Yet Be Purchased Under the Program (1)(2) October 1 - 31, 2024 95,000 8.76 95,000 597,318 November 1 - 30, 2024 54,383 9.04 54,383 542,935 December 1 - 31, 2024 (2) 88,312 9.26 70,617 472,318 Total 237,695 9.01 220,000 472,318 (1) On May 21, 2024, the Board authorized an additional stock repurchase plan (the “2024 Plan”) under which the Company may purchase up to 1,000,000 shares of common stock, or 4.6%, of its outstanding common stock, as of the date the 2024 Plan was adopted.
Biggest changePeriod Total Number of Shares Purchased Average Price Paid per Share ($) Total Number of Shares Purchased as Part of Publicly Announced Programs Maximum Number of Shares that May Yet Be Purchased Under the Program (1)(2) October 1 - 31, 2025 — — — 972,465 November 1 - 30, 2025 100,000 11.80 100,000 872,465 December 1 - 31, 2025 (2) 19,180 12.62 — 872,465 Total 119,180 11.94 100,000 872,465 (1) On April 22, 2025, the Board authorized a new stock repurchase plan (the “2025 Plan”) under which the Company is authorized to repurchase up to 1,000,000 shares of its common stock, which was approximately 4.8%, of the Company’s outstanding shares of common stock, as of the date the 2025 Plan was adopted.
Recent Sales of Unregistered Securities. There were no sales by the Company of unregistered securities during the year ended December 31, 2024. Purchases of Equity Securities by the Issuer and Affiliated Purchasers. The following table sets forth information with respect to purchases made by the Company during the three months ended December 31, 2024.
Recent Sales of Unregistered Securities. There were no sales by the Company of unregistered securities during the year ended December 31, 2025. Purchases of Equity Securities by the Issuer and Affiliated Purchasers. The following table sets forth information with respect to purchases made by the Company during the three months ended December 31, 2025.
The following graph compares our total cumulative shareholder return (which assumes the reinvestment of all dividends) by an investor who invested $100.00 on December 31, 2019 to December 31, 2024, to the total return by an investor who invested $100.00 in the S&P U.S. Banks Index $1 Billion - $5 Billion, the S&P U.S.
The following graph compares our total cumulative shareholder return (which assumes the reinvestment of all dividends) by an investor who invested $100.00 on December 31, 2020 to December 31, 2025, to the total return by an investor who invested $100.00 in the S&P U.S. Banks Index $1 Billion - $5 Billion, the S&P U.S.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information. The Company’s common stock is currently listed on NASDAQ under the trading symbol “WNEB.” As of December 31, 2024, there were 20,875,713 shares of the Company’s common stock outstanding by approximately 1,862 shareholders, as obtained through our transfer agent.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information. The Company’s common stock is currently listed on NASDAQ under the trading symbol “WNEB.” As of December 31, 2025, there were 20,372,786 shares of the Company’s common stock outstanding by approximately 1,759 shareholders, as obtained through our transfer agent.
The 2024 Plan commenced upon the completion of the prior existing repurchase plan on June 6, 2024. (2) Repurchase of 17,695 shares related to tax obligations for shares of restricted stock that vested on December 31, 2024 under our 2021 Omnibus Incentive Plan. These repurchases were reported by each reporting person on January 3, 2025. 55 Stock Performance Graph.
(2) Repurchase of 19,180 shares related to tax obligations for shares of restricted stock that vested on December 31, 2025, under our Amended and Restated 2021 Omnibus Incentive Plan. These repurchases were reported by each reporting person on January 5, 2026. 56 Stock Performance Graph.
BMI Banks New England Region Index and the NASDAQ Bank Index Period Ending Index 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 Western New England Bancorp, Inc. 100.00 74.00 96.33 106.92 105.77 112.14 S&P U.S. Banks $1 Billion - $5 Billion 100.00 90.53 122.61 110.58 112.28 129.43 S&P U.S.
BMI Banks New England Region Index and the NASDAQ Bank Index Period Ending Index 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 Western New England Bancorp, Inc. 100.00 130.18 144.48 142.93 151.54 213.55 S&P U.S. Banks $1 Billion - $5 Billion 100.00 135.44 122.16 124.03 142.97 150.90 S&P U.S.
Removed
BMI Banks New England Region Index 100.00 86.61 120.88 110.72 102.29 127.05 NASDAQ Bank Index 100.00 92.50 132.19 110.67 106.87 128.85 56
Added
BMI Banks New England Region Index 100.00 139.57 127.83 118.10 146.69 182.93 NASDAQ Bank Index 100.00 142.91 119.65 115.54 139.30 149.15 57

Item 7. Management's Discussion & Analysis

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

116 edited+20 added−29 removed78 unchanged
Biggest changeThe table below breaks down the commercial real estate portfolio outstanding balance by non-owner and owner occupied and by concentration as of December 31, 2024: Property Type Non-Owner Occupied Owner Occupied Total % of CRE Portfolio % of Total Loans % of Total Bank Risk-Based Capital (1) (Dollars in thousands) Office Portfolio $ 177,102 $ 23,013 $ 200,115 18.6 % 9.7 % 73.9 % Apartment 179,874 — 179,874 16.7 % 8.7 % 66.4 % Industrial 116,663 51,618 168,281 15.6 % 8.1 % 62.1 % Retail 109,936 7,105 117,041 10.9 % 5.7 % 43.2 % Other 37,231 30,471 67,702 6.3 % 3.3 % 25.0 % Mixed Use 71,226 6,402 77,628 7.2 % 3.8 % 28.7 % Hotel/Hospitality 43,133 — 43,133 4.0 % 2.1 % 15.9 % Automotive Sales 2,705 36,554 39,259 3.6 % 1.9 % 14.5 % Adult Care/Assisted Living 31,635 6,119 37,754 3.5 % 1.8 % 13.9 % Self-Storage 33,765 329 34,094 3.2 % 1.6 % 12.6 % Student Housing 22,047 — 22,047 2.0 % 1.1 % 8.1 % Warehouse 20,942 10,045 30,987 2.9 % 1.5 % 11.4 % Shopping Center 23,193 7,518 30,711 2.9 % 1.5 % 11.3 % School/Higher Education 11,376 15,730 27,106 2.5 % 1.3 % 10.0 % Total commercial real estate $ 880,828 $ 194,904 $ 1,075,732 100.0 % 52.0 % 397.1 % % of Total Bank Risk-Based Capital (1) 325.2 % 71.9 % 397.1 % % of Total CRE loans 81.9 % 18.1 % (1) Due to loan classifications, the percentage of Total Bank Risk-Based Capital may differ from the call report. 67 The table below breaks down the commercial real estate portfolio outstanding balance by non-owner and owner occupied and by concentration as of December 31, 2023: Property Type (1) Non-Owner Occupied Owner Occupied Total % of CRE Portfolio % of Total Loans % of Total Bank Risk-Based Capital (2) (Dollars in thousands) Office $ 183,838 $ 32,327 $ 216,165 20.0 % 10.7 % 79.6 % Apartment 176,082 — 176,082 16.3 % 8.7 % 64.9 % Retail 111,091 8,005 119,096 11.0 % 5.9 % 43.9 % Industrial 98,594 53,228 151,822 14.1 % 7.5 % 55.9 % Mixed Use 73,516 6,121 79,637 7.4 % 3.9 % 29.3 % Other 46,245 28,539 74,784 7.0 % 3.7 % 27.7 % Hotel/Hospitality 44,630 — 44,630 4.1 % 2.2 % 16.4 % Adult Care/Assisted Living 32,404 — 32,404 3.0 % 1.6 % 11.9 % Self-Storage 31,551 440 31,991 3.0 % 1.6 % 11.8 % Student Housing 19,724 — 19,724 1.8 % 1.0 % 7.3 % Shopping Center 24,524 8,438 32,962 3.1 % 1.6 % 12.1 % Warehouse 23,978 10,742 34,720 3.2 % 1.7 % 12.8 % School/Higher Education 12,642 11,584 24,226 2.2 % 1.2 % 8.9 % Automotive Sales 2,824 38,684 41,508 3.8 % 2.0 % 15.3 % Total commercial real estate $ 881,643 $ 198,108 $ 1,079,751 100.0 % 53.3 % 397.8 % % of Total Bank Risk-Based Capital (1) 324.8 % 73.0 % % of Total CRE loans 81.7 % 18.3 % (1) December 31, 2023 property types have been reclassified for consistency with December 31, 2024 information.
Biggest changeThe table below breaks down the commercial real estate portfolio outstanding balance by non-owner and owner occupied and by concentration as of December 31, 2024: Property Type Non-Owner Occupied Owner Occupied Total % of CRE Portfolio % of Total Loans % of Total Bank Risk-Based Capital (1) (Dollars in thousands) Office Portfolio $ 177,102 $ 23,013 $ 200,115 18.6 % 9.7 % 73.9 % Apartment 179,874 — 179,874 16.7 % 8.7 % 66.4 % Industrial 116,663 51,618 168,281 15.6 % 8.1 % 62.1 % Retail 109,936 7,105 117,041 10.9 % 5.7 % 43.2 % Other 37,231 30,471 67,702 6.3 % 3.3 % 25.0 % Mixed Use 71,226 6,402 77,628 7.2 % 3.8 % 28.7 % Hotel/Hospitality 43,133 — 43,133 4.0 % 2.1 % 15.9 % Automotive Sales 2,705 36,554 39,259 3.6 % 1.9 % 14.5 % Adult Care/Assisted Living 31,635 6,119 37,754 3.5 % 1.8 % 13.9 % Self-Storage 33,765 329 34,094 3.2 % 1.6 % 12.6 % Student Housing 22,047 — 22,047 2.0 % 1.1 % 8.1 % Warehouse 20,942 10,045 30,987 2.9 % 1.5 % 11.4 % Shopping Center 23,193 7,518 30,711 2.9 % 1.5 % 11.3 % School/Higher Education 11,376 15,730 27,106 2.5 % 1.3 % 10.0 % Total commercial real estate $ 880,828 $ 194,904 $ 1,075,732 100.0 % 52.0 % 397.1 % % of Total Bank Risk-Based Capital (1) 325.2 % 71.9 % 397.1 % % of Total CRE loans 81.9 % 18.1 % (1) Due to loan classifications, the percentage of Total Bank Risk-Based Capital may differ from the call report.
We continue our disciplined and focused approach to core relationship management and customer outreach to meet funding requirements and liquidity needs, with an emphasis on retaining a long-term customer relationship base by competing for and retaining deposits in our local market.
We continue our disciplined and focused approach to core relationship management and customer outreach to meet funding requirements and liquidity needs, with an emphasis on retaining a long-term core customer relationship base by competing for and retaining deposits in our local market.
The credit loss estimation process involves procedures to appropriately consider the unique characteristics of loan portfolio segments, which consist of commercial real estate loans, residential real estate loans, commercial and industrial loans, and consumer loans. These segments are further disaggregated into loan classes, the level at which credit risk is monitored.
The credit loss estimation process involves procedures to appropriately consider the unique characteristics of loan portfolio segments, which consist of commercial real estate loans, residential real estate loans, commercial and industrial loans, and consumer loans. These segments are further disaggregated into loan classes, the level at which credit risk is monitored.
For each of these pools, the Company generates cash flow projections at the instrument level wherein payment expectations are adjusted for estimated prepayment speed, curtailments, time to recovery, probability of default, and loss given default. The modeling of expected prepayment speeds, curtailment rates, and time to recovery are based on historical internal data.
For each of these pools, the Company generates cash flow projections at the instrument level wherein payment expectations are adjusted for estimated prepayment speed, curtailments, time to recovery, probability of default, and loss given default. The modeling of expected prepayment speeds, curtailment rates, and time to recovery are based on historical internal data.
This process includes estimates which involve modeling loss projections attributable to existing loan balances, and considering historical experience, current conditions, and future expectations for pools of loans over a reasonable and supportable forecast period.
This process includes estimates which involve modeling loss projections attributable to existing loan balances, and considering historical experience, current conditions, and future expectations for pools of loans over a reasonable and supportable forecast period.
The historical information either experienced by the Company or by a selection of peer banks, when appropriate, is derived from a combination of recessionary and non-recessionary performance periods for which data is available.
The historical information either experienced by the Company or by a selection of peer banks, when appropriate, is derived from a combination of recessionary and non-recessionary performance periods for which data is available.
The table below depicts a well-diversified portfolio of owner occupied commercial real estate portfolio as of December 31, 2024: Property Type MA CT NH Other Total % of Total Bank Risk-Based Capital (1) Weighted Average LTV (2) (Dollars in thousands) Adult Care/Assisted Living $ — $ — $ 6,119 $ — $ 6,119 2.3 % 58.1 % Automotive Sales 29,858 6,696 — — 36,554 13.5 % 59.8 % School/Higher Education 15,730 — — — 15,730 5.8 % 66.8 % Industrial 42,456 8,594 — 568 51,618 19.1 % 52.7 % Mixed Use 5,820 582 — — 6,402 2.4 % 53.0 % Office 20,477 2,536 — — 23,013 8.5 % 57.2 % Retail 7,105 — — — 7,105 2.6 % 53.4 % Shopping Center 5,358 2,160 — — 7,518 2.8 % 56.5 % Self-Storage 329 — — — 329 0.1 % 20.5 % Warehouse 9,671 374 — — 10,045 3.7 % 63.2 % Other 21,773 7,782 916 — 30,471 11.2 % 49.4 % Total Owner Occupied CRE $ 158,577 $ 28,724 $ 7,035 $ 568 $ 194,904 72.0 % 56.0 % 69 (1) Due to loan classifications, the percentage of Total Bank Risk-Based Capital may differ from the call report.
The table below depicts a well-diversified portfolio of owner occupied commercial real estate as of December 31, 2024: Property Type MA CT NH Other Total % of Total Bank Risk-Based Capital (1) Weighted Average LTV (2) (Dollars in thousands) Owner Occupied CRE Adult Care/Assisted Living $ — $ — $ 6,119 $ — $ 6,119 2.3 % 58.1 % Automotive Sales 29,858 6,696 — — 36,554 13.5 % 59.8 % School/Higher Education 15,730 — — — 15,730 5.8 % 66.8 % Industrial 42,456 8,594 — 568 51,618 19.1 % 52.7 % Mixed Use 5,820 582 — — 6,402 2.4 % 53.0 % Office 20,477 2,536 — — 23,013 8.5 % 57.2 % Retail 7,105 — — — 7,105 2.6 % 53.4 % Shopping Center 5,358 2,160 — — 7,518 2.8 % 56.5 % Self-Storage 329 — — — 329 0.1 % 20.5 % Warehouse 9,671 374 — — 10,045 3.7 % 63.2 % Other 21,773 7,782 916 — 30,471 11.2 % 49.4 % Total Owner Occupied CRE $ 158,577 $ 28,724 $ 7,035 $ 568 $ 194,904 72.0 % 56.0 % ____________________ (1) Due to loan classifications, the percentage of Total Bank Risk-Based Capital may differ from the call report.
This sensitivity analysis is compared to ALCO policy limits, which specify a maximum tolerance level for net interest income exposure over a one and two-year horizon, assuming no balance sheet growth. The repricing and/or new rates of assets and liabilities moved in tandem with market rates.
This sensitivity analysis is compared to ALCO policy limits, which specify a maximum tolerance level for net interest income exposure over a one and two-year horizon, assuming no balance sheet growth. 79 The repricing and/or new rates of assets and liabilities moved in tandem with market rates.
An institution that has experienced rapid growth in CRE lending, has notable exposure to a specific type of CRE, or is approaching or exceeds the following supervisory criteria may be identified for further supervisory analysis of the level and nature of its CRE concentration risk: 66 1.
An institution that has experienced rapid growth in CRE lending, has notable exposure to a specific type of CRE, or is approaching or exceeds the following supervisory criteria may be identified for further supervisory analysis of the level and nature of its CRE concentration risk: 1.
Our financial condition is affected by our ability to borrow at attractive rates, retain deposits at market rates and other market conditions. We consider our sources of liquidity to be adequate to meet expected funding needs and also to be responsive to changing interest rate markets. 78 Interest Rate Risk.
Our financial condition is affected by our ability to borrow at attractive rates, retain deposits at market rates and other market conditions. We consider our sources of liquidity to be adequate to meet expected funding needs and also to be responsive to changing interest rate markets. Interest Rate Risk.
Fluctuations in interest rates will also affect the market value of all interest-earning assets and interest-bearing liabilities. The Company’s interest rate management strategy is to limit fluctuations in net interest income as interest rates vary up or down and control variations in the market value of assets, liabilities and net worth as interest rates vary.
Fluctuations in interest rates will also affect the market value of all interest-earning assets and interest-bearing liabilities. 78 The Company’s interest rate management strategy is to limit fluctuations in net interest income as interest rates vary up or down and control variations in the market value of assets, liabilities and net worth as interest rates vary.
The expected loss estimates for the consumer loan segment are based on historical loss rates using the WARM method. 58 Although management believes it has established and maintained the allowance for credit losses at adequate levels for the current economic environment and supportable forecast period, if management’s assumptions and judgments prove to be incorrect due to changes in the economic environment and related adjustments to the quantitative components of the CECL methodology, and the allowance for credit losses is not adequate to absorb forecasted losses, our earnings and capital could be significantly and adversely affected.
The expected loss estimates for the consumer loan segment are based on historical loss rates using the WARM method. 59 Although management believes it has established and maintained the allowance for credit losses at adequate levels for the current economic environment and supportable forecast period, if management’s assumptions and judgments prove to be incorrect due to changes in the economic environment and related adjustments to the quantitative components of the CECL methodology, and the allowance for credit losses is not adequate to absorb forecasted losses, our earnings and capital could be significantly and adversely affected.
The Notes will bear interest from the initial issue date to, but excluding, May 1, 2026, or the earlier redemption date, at a fixed rate of 4.875% per annum, payable quarterly in arrears on May 1, August 1, November 1 and February 1 of each year, beginning August 1, 2021, and from and including May 1, 2026, but excluding the maturity date or earlier redemption date, equal to the benchmark rate, which is the 90-day average secured overnight financing rate, plus 412 basis points, determined on the determination date of the applicable interest period, payable quarterly in arrears on May 1, August 1, November 1 and February 1 of each year.
The Notes bear interest from the initial issue date to, but excluding, May 1, 2026, or the earlier redemption date, at a fixed rate of 4.875% per annum, payable quarterly in arrears on May 1, August 1, November 1 and February 1 of each year, beginning August 1, 2021, and from and including May 1, 2026, but excluding the maturity date or earlier redemption date, equal to the benchmark rate, which is the 90-day average secured overnight financing rate (“SOFR”), plus 412 basis points, determined on the determination date of the applicable interest period, payable quarterly in arrears on May 1, August 1, November 1 and February 1 of each year.
At December 31, 2024 and 2023, we did not have an outstanding balance under either of these lines of credit. In addition, we may enter into reverse repurchase agreements with approved broker-dealers. Reverse repurchase agreements are agreements that allow us to borrow money using our securities as collateral.
At December 31, 2025 and 2024, we did not have an outstanding balance under either of these lines of credit. In addition, we may enter into reverse repurchase agreements with approved broker-dealers. Reverse repurchase agreements are agreements that allow us to borrow money using our securities as collateral.
These interest rate swaps are designated as cash flow hedges and involve the receipt of variable rate amounts from a counterparty in exchange for our making fixed payments. 79 Recent Accounting Pronouncements. Refer to Note 1 to our consolidated financial statements for a summary of the recent accounting pronouncements. Impact of Inflation and Changing Prices.
These interest rate swaps are designated as cash flow hedges and involve the receipt of variable rate amounts from a counterparty in exchange for our making fixed payments. Recent Accounting Pronouncements. Refer to Note 1 to our consolidated financial statements for a summary of the recent accounting pronouncements. 80 Impact of Inflation and Changing Prices.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The following discussion should be read in conjunction with the Company’s Consolidated Financial Statements and notes thereto, each appearing elsewhere in this Annual Report on Form 10-K. Management’s discussion focuses on 2024 results compared to 2023.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The following discussion should be read in conjunction with the Company’s Consolidated Financial Statements and notes thereto, each appearing elsewhere in this Annual Report on Form 10-K. Management’s discussion focuses on 2025 results compared to 2024.
In connection with our overall growth strategy, we seek to: ● Increase market share and achieve scale to improve the Company’s profitability and efficiency and return value to shareholders; ● Grow the Company’s commercial loan portfolio and related commercial deposits by targeting businesses in our primary market area of Hampden County and Hampshire County in western Massachusetts and Hartford and Tolland Counties in northern Connecticut to increase the net interest margin and loan income; ● Supplement the commercial portfolio by growing the residential real estate portfolio to diversify the loan portfolio and deepen customer relationships; ● Focus on expanding our retail banking deposit franchise and increase the number of households served within our designated market area; ● Invest in people, systems and technology to grow revenue, improve efficiency and enhance the overall customer experience; ● Grow revenues, increase book value per share and tangible book value, pay competitive dividends to shareholders and utilize the Company’s stock repurchase plan to leverage our capital and enhance franchise value; and ● Consider growth through acquisitions.
In connection with our overall growth strategy, we seek to: ● Increase market share and achieve scale to improve the Company’s profitability and efficiency and return value to shareholders; ● Grow the Company’s commercial loan portfolio and related commercial deposits by targeting businesses in our primary market area of Hampden County and Hampshire County in western Massachusetts and the Capital Region in Connecticut to increase the net interest margin and loan income; ● Supplement the commercial portfolio by growing the residential real estate portfolio to diversify the loan portfolio and deepen customer relationships; ● Focus on expanding our retail banking deposit franchise and increase the number of households served within our designated market area; ● Invest in people, systems and technology to grow revenue, improve efficiency and enhance the overall customer experience; ● Grow revenues, increase book value per share and tangible book value, pay competitive dividends to shareholders and utilize the Company’s stock repurchase plan to leverage our capital and enhance franchise value; and ● Consider growth through acquisitions.
At December 31, 2024 and 2023, the Company held $423,000 of Atlantic Community Bankers Bank stock. The stock is restricted and carried in other assets at cost. The stock is evaluated for impairment based on an estimate of the ultimate recovery to the par value. Loans.
At December 31, 2025 and 2024, the Company held $423,000 of Atlantic Community Bankers Bank stock. The stock is restricted and carried in other assets at cost. The stock is evaluated for impairment based on an estimate of the ultimate recovery to the par value. Loans.
For more information regarding the Company’s use of Non-GAAP financial measures see “Explanation of Use of Non-GAAP Financial Measurements.” Average Balance Sheet. The following table sets forth information relating to the Company for the years ended December 31, 2024, 2023 and 2022.
For more information regarding the Company’s use of Non-GAAP financial measures see “Explanation of Use of Non-GAAP Financial Measurements.” Average Balance Sheet. The following table sets forth information relating to the Company for the years ended December 31, 2025, 2024 and 2023.
(2) Loan and securities income are presented on a tax-equivalent basis using a tax rate of 21% for 2024, 2023 and 2022. The tax-equivalent adjustment is deducted from tax-equivalent net interest and dividend income to agree to the amount reported on the consolidated statements of net income.
(2) Loan and securities income are presented on a tax-equivalent basis using a tax rate of 21% for 2025, 2024 and 2023. The tax-equivalent adjustment is deducted from tax-equivalent net interest and dividend income to agree to the amount reported on the consolidated statements of net income.
(7) Net interest margin, on a tax-equivalent basis, represents tax-equivalent net interest and dividend income as a percentage of average interest-earning assets. See “Explanation of Use of Non-GAAP Financial Measurements.” 61 Rate/Volume Analysis .
(7) Net interest margin, on a tax-equivalent basis, represents tax-equivalent net interest and dividend income as a percentage of average interest-earning assets. See “Explanation of Use of Non-GAAP Financial Measurements.” 62 Rate/Volume Analysis .
The tax-equivalent adjustment is deducted from tax-equivalent net interest income to agree to the amount reported in the consolidated statements of net income. See “Explanation of Use of Non-GAAP Financial Measurements.” 62 Explanation of Use of Non-GAAP Financial Measurements.
The tax-equivalent adjustment is deducted from tax-equivalent net interest income to agree to the amount reported in the consolidated statements of net income. See “Explanation of Use of Non-GAAP Financial Measurements.” 63 Explanation of Use of Non-GAAP Financial Measurements.
At December 31, 2024, the Company and the Bank exceeded each of the applicable regulatory capital requirements (See Note 13, Regulatory Capital , to our consolidated financial statements for further information on our regulatory requirements).
At December 31, 2025, the Company and the Bank exceeded each of the applicable regulatory capital requirements (See Note 13, Regulatory Capital , to our consolidated financial statements for further information on our regulatory requirements).
The provision for credit losses was determined by a number of factors: the continued strong credit performance of the Company’s loan portfolio, changes in the loan portfolio mix and Management’s consideration of existing economic conditions and the economic outlook from the Federal Reserve’s actions to control inflation.
The provision for credit losses was determined by a number of factors: the continued strong credit performance of the Company’s loan portfolio, changes in the loan portfolio mix and Management’s consideration of existing economic conditions and the economic outlook from the Federal Reserve Bank’s actions to control inflation.
Accrued interest receivable on loans held for investment was $7.4 million at December 31, 2024 and is excluded from the estimate of credit losses. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant change.
Accrued interest receivable on loans held for investment was $7.6 million at December 31, 2025 and is excluded from the estimate of credit losses. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant change.
The Company has an available line of credit of $382.9 million with the FRB Discount Window at an interest rate determined and reset on a daily basis. Borrowings from the FRB Discount Window are secured by certain eligible loan collateral and securities from the Company’s investment portfolio not otherwise pledged.
The Company has an available line of credit of $349.0 million with the FRB Discount Window at an interest rate determined and reset on a daily basis. Borrowings from the FRB Discount Window are secured by certain eligible loan collateral and securities from the Company’s investment portfolio not otherwise pledged.
For a discussion of 2023 results compared to 2022, refer to Part II, Item 7 of our Annual Report filed on Form 10-K, which was filed with the SEC on March 8, 2024. Overview.
For a discussion of 2024 results compared to 2023, refer to Part II, Item 7 of our Annual Report filed on Form 10-K, which was filed with the SEC on March 10, 2025. Overview.
Of the $1.1 billion, $880.8 million, or 81.9%, was categorized as non-owner occupied commercial real estate and represented 325.2% of the bank’s total risk-based capital. The Company’s commercial real estate loans are considered to be relatively diversified by borrower, industry and concentrated in the New England geographical area.
Of the $1.1 billion, $900.5 million, or 81.9%, was categorized as non-owner occupied commercial real estate and represented 325.1% of the Bank’s total risk-based capital. The Company’s commercial real estate loans are considered to be relatively diversified by borrower, industry and concentrated in the New England geographical area.
Estimated Changes in Net Interest Income Changes in Interest Rates At December 31, 2024 At December 31, 2023 1 – 12 Months UP 200 basis points -4.4% -4.1% DOWN 200 basis points 3.9% 3.4% 13 – 24 Months UP 200 basis points 7.5% -0.4% DOWN 200 basis points 24.6% 23.3% ________________________ The preceding sensitivity analysis does not represent a forecast of net interest income, nor do the calculations represent any actions that management may undertake in response to changes in interest rates.
Estimated Changes in Net Interest Income Changes in Interest Rates At December 31, 2025 At December 31, 2024 1 – 12 Months UP 200 basis points -4.0 % -4.4 % DOWN 200 basis points 4.2 % 3.9 % 13 – 24 Months UP 200 basis points 3.3 % 7.5 % DOWN 200 basis points 15.8 % 24.6 % The preceding sensitivity analysis does not represent a forecast of net interest income, nor do the calculations represent any actions that management may undertake in response to changes in interest rates.
The Bank is required to purchase FHLB stock at par value in association with advances from the FHLB. The stock is classified as a restricted investment and carried at cost which management believes approximates fair value. The Company’s investment in FHLB capital stock amounted to $5.4 million and $3.2 million at December 31, 2024 and December 31, 2023, respectively.
The Bank is required to purchase FHLB stock at par value in association with advances from the FHLB. The stock is classified as a restricted investment and carried at cost which management believes approximates fair value. The Company’s investment in FHLB capital stock amounted to $4.9 million and $5.4 million at December 31, 2025 and December 31, 2024, respectively.
Principal payments expected to be made on our lease liabilities during the twelve months ended December 31, 2025 were $1.5 million. The remaining lease liability payments totaled $7.4 million and are expected to be made after December 31, 2025 (See Note 12, Leases , to our consolidated financial statements for further information on our lease obligations).
Principal payments expected to be made on our lease liabilities during the twelve months ended December 31, 2025 were $1.4 million. The remaining lease liability payments totaled $6.3 million and are expected to be made after December 31, 2026 (See Note 12, Leases , to our consolidated financial statements for further information on our lease obligations).
FHLB has stated that it expects to be able to continue to pay dividends, redeem excess capital stock, and provide competitively priced advances in the future. At December 31, 2024 and December 31, 2023, outstanding borrowings from the FHLB were $98.0 million and $40.6 million, respectively.
FHLB has stated that it expects to be able to continue to pay dividends, redeem excess capital stock, and provide competitively priced advances in the future. At December 31, 2025 and December 31, 2024, outstanding borrowings from the FHLB were $83.0 million and $98.0 million, respectively.
The following table further breaks down the non-owner occupied commercial real estate portfolio balances by concentration, collateral location and weighted average loan-to-value (“LTV”) as of December 31, 2024: Property Type MA CT NH RI Other Total % of Total Bank Risk-Based Capital (1) Weighted Average LTV (2) (Dollars in thousands) Apartment $ 114,922 $ 37,212 $ — $ 27,740 $ — $ 179,874 66.4 % 54.7 % Office 62,554 62,906 40,237 — 11,405 177,102 65.4 % 64.4 % Industrial 60,192 35,438 — 14,992 6,041 116,663 43.1 % 56.0 % Retail 55,555 23,551 13,752 6,219 10,859 109,936 40.6 % 55.4 % Mixed Use 31,899 21,552 — 13,062 4,713 71,226 26.3 % 57.7 % Other 30,449 5,949 707 — 126 37,231 13.7 % 55.3 % Hotel/Hospitality 20,813 22,320 — — — 43,133 15.9 % 51.8 % Adult Care/Assisted Living 15,089 16,546 — — — 31,635 11.7 % 58.6 % Self-Storage 24,433 8,548 784 — — 33,765 12.5 % 63.0 % Student Housing 3,717 15,323 2,660 — 347 22,047 8.1 % 72.4 % Shopping Center 7,176 16,017 — — — 23,193 8.6 % 50.9 % Warehouse 17,406 3,319 — — 217 20,942 7.7 % 44.5 % School/Higher Education 11,376 — — — — 11,376 4.2 % 45.0 % Automotive Sales 2,705 — — — — 2,705 1.0 % 39.5 % Total Non-Owner CRE $ 458,286 $ 268,681 $ 58,140 $ 62,013 $ 33,708 $ 880,828 325.2 % 57.2 % ___________________ (1) Due to loan classifications, the percentage of Total Bank Risk-Based Capital may differ from the call report. 68 (2) Weighted average LTV is based on the original appraisal and the current loan exposure.
Property Type MA CT NH RI Other Total % of Total Bank Risk-Based Capital (1) Weighted Average LTV (2) (Dollars in thousands) Apartment $ 114,922 $ 37,212 $ — $ 27,740 $ — $ 179,874 66.4 % 54.7 % Office 62,554 62,906 40,237 — 11,405 177,102 65.4 % 64.4 % Industrial 60,192 35,438 — 14,992 6,041 116,663 43.1 % 56.0 % Retail 55,555 23,551 13,752 6,219 10,859 109,936 40.6 % 55.4 % Mixed Use 31,899 21,552 — 13,062 4,713 71,226 26.3 % 57.7 % Other 30,449 5,949 707 — 126 37,231 13.7 % 55.3 % Hotel/Hospitality 20,813 22,320 — — — 43,133 15.9 % 51.8 % Adult Care/Assisted Living 15,089 16,546 — — — 31,635 11.7 % 58.6 % Self-Storage 24,433 8,548 784 — — 33,765 12.5 % 63.0 % Student Housing 3,717 15,323 2,660 — 347 22,047 8.1 % 72.4 % Shopping Center 7,176 16,017 — — — 23,193 8.6 % 50.9 % Warehouse 17,406 3,319 — — 217 20,942 7.7 % 44.5 % School/Higher Education 11,376 — — — — 11,376 4.2 % 45.0 % Automotive Sales 2,705 — — — — 2,705 1.0 % 39.5 % Total Non-Owner CRE $ 458,286 $ 268,681 $ 58,140 $ 62,013 $ 33,708 $ 880,828 325.2 % 57.2 % (1) Due to loan classifications, the percentage of Total Bank Risk-Based Capital may differ from the call report.
During the twelve months ended December 31, 2024, the Company reported a gain of $1.3 million on non-marketable equity investments, compared to a gain of $590,000 during the twelve months ended December 31, 2023.
During the twelve months ended December 31, 2025, the Company reported a gain of $243,000 on non-marketable equity investments, compared to a gain of $1.3 million during the twelve months ended December 31, 2024.
There were no advances outstanding with the FRB under the BTFP at December 31, 2024. In addition, we have available lines of credit of $15.0 million and $10.0 million with other correspondent banks. Interest rates on these lines are determined and reset on a daily basis by each respective bank.
As of December 31, 2025 and December 31, 2024, there were no advances outstanding under either of these lines. In addition, we have available lines of credit of $15.0 million and $10.0 million with other correspondent banks. Interest rates on these lines are determined and reset on a daily basis by each respective bank.
However, deposit flows, calls of securities and prepayments of loans and mortgage-backed securities are strongly influenced by interest rates, general and local economic conditions and competition in the marketplace. These factors reduce the predictability of the timing of these sources of funds.
Maturing investment securities are a relatively predictable source of funds. However, deposit flows, calls of securities and prepayments of loans and mortgage-backed securities are strongly influenced by interest rates, general and local economic conditions and competition in the marketplace. These factors reduce the predictability of the timing of these sources of funds.
The Company’s primary activities are the origination of commercial real estate loans, commercial and industrial loans and residential real estate loans, as well as and the purchase of mortgage-backed and other investment securities. During the year ended December 31, 2023, we originated $336.4 million in loans, compared to $225.6 million in 2023.
The Company’s primary activities are the origination of commercial real estate loans, commercial and industrial loans and residential real estate loans, as well as and the purchase of mortgage-backed and other investment securities. During the year ended December 31, 2025, we originated $380.2 million in loans, compared to $336.4 million in 2024.
A summary of our past due and nonperforming loans by class is listed in Note 5 of the accompanying unaudited consolidated financial statements. 65 Our commercial real estate portfolio is comprised of diversified property types and primarily within our geographic footprint. At December 31, 2024, the commercial real estate portfolio totaled $1.1 billion, and represented 52.0% of total loans.
A summary of our past due and nonperforming loans by class is listed in Note 3 of the accompanying unaudited consolidated financial statements. Our commercial real estate portfolio is comprised of diversified property types and primarily within our geographic footprint. At December 31, 2025, the commercial real estate portfolio totaled $1.1 billion and represented 50.4% of total loans.
We believe that it is common practice in the banking industry to present interest income and related yield information on tax-exempt loans and securities on a tax-equivalent basis and that such information is useful to investors because it facilitates comparisons among financial institutions.
We believe that it is common practice in the banking industry to present interest income and related yield information on tax-exempt loans and securities on a tax-equivalent basis, as well as presenting tangible book value per share and that such information is useful to investors because it facilitates comparisons among financial institutions.
General. For the twelve months ended December 31, 2024, the Company reported net income of $11.7 million, or $0.56 per diluted share, compared to $15.1 million, or $0.70 per diluted share, for the twelve months ended December 31, 2023.
General. For the twelve months ended December 31, 2025, the Company reported net income of $15.3 million, or $0.75 per diluted share, compared to $11.7 million, or $0.56 per diluted share, for the twelve months ended December 31, 2024.
Return on average assets and return on average equity were 0.45% and 4.93% for the twelve months ended December 31, 2024, respectively, compared to 0.59% and 6.47% for the twelve months ended December 31, 2023, respectively. Net Interest Income and Net Interest Margin.
Return on average assets and return on average equity were 0.56% and 6.35% for the twelve months ended December 31, 2025, respectively, compared to 0.45% and 4.93% for the twelve months ended December 31, 2024, respectively. 74 Net Interest Income and Net Interest Margin.
The average yield on loans, without the impact of tax-equivalent adjustments, increased 32 basis points from 4.54% for the twelve months ended December 31, 2023 to 4.86% for the twelve months ended December 31, 2024.
The average yield on loans, without the impact of tax-equivalent adjustments, increased 14 basis points from 4.86% for the twelve months ended December 31, 2024 to 5.00% for the twelve months ended December 31, 2025.
For the twelve months ended December 31, 2024, the average cost of core deposits, including non-interest-bearing demand deposits, increased 24 basis points from 0.65% for the twelve months ended December 31, 2023, to 0.89%.
For the twelve months ended December 31, 2025, the average cost of core deposits, including non-interest-bearing demand deposits, increased 15 basis points from 0.89% for the twelve months ended December 31, 2024, to 1.04%.
During the twelve months ended December 31, 2024, the average cost of funds, including non-interest-bearing demand accounts and borrowings, increased 70 basis points from 1.44% for the twelve months ended December 31, 2023 to 2.14%.
During the twelve months ended December 31, 2025, the average cost of funds, including non-interest-bearing demand accounts and borrowings, decreased 15 basis points from 2.14% for the twelve months ended December 31, 2024 to 1.99%.
At December 31, 2024, time deposit accounts scheduled to mature within one year totaled $694.9 million. Based on the Company’s deposit retention experience and current pricing strategy, we anticipate that a significant portion of these time deposits will remain on deposit.
At December 31, 2025, time deposit accounts scheduled to mature within one year totaled $678.1 million, or 98.3% of total time deposits. Based on the Company’s deposit retention experience and current pricing strategy, we anticipate that a significant portion of these time deposits will remain on deposit.
The average cost of borrowings, which include borrowings and subordinated debt, increased 16 basis points from 4.84% for the twelve months ended December 31, 2023 to 5.00% for the twelve months ended December 31, 2024.
The average cost of borrowings, which include borrowings and subordinated debt, increased 2 basis points from 5.00% for the twelve months ended December 31, 2024 to 5.02% for the twelve months ended December 31, 2025.
For the twelve months ended December 31, 2024, income tax expense was $3.3 million, with an effective tax rate of 22.0%, compared to $4.5 million, with an effective tax rate of 23.1%, for twelve months ended December 31, 2023.
Income tax expense for the twelve months ended December 31, 2025 was $4.5 million, representing an effective tax rate of 22.8%, compared to $3.3 million, representing an effective tax rate of 22.0%, for the twelve months ended December 31, 2024.
At December 31, 2024, the Company reported unrealized losses on the held-to-maturity securities portfolio of $39.4 million, or 19.2% of the amortized cost basis of the held-to-maturity securities portfolio, compared to $35.7 million, or 16.0% of the amortized cost basis of the held-to-maturity securities portfolio at December 31, 2023.
At December 31, 2025, the Company reported gross unrealized losses on the held-to-maturity securities portfolio of $30.5 million, or 16.2% of the amortized cost basis of the held-to-maturity securities portfolio, compared to $39.4 million, or 19.2% of the amortized cost basis of the held-to-maturity securities portfolio at December 31, 2024.
The Company holds a concentration in commercial real estate loans. As of December 31, 2024, construction, land development and other land loans represented 37.9% of consolidated bank risk-based capital. During the prior 36 months, the Company has experienced an increase in its commercial real estate portfolio of 16.1%.
As of December 31, 2025, construction, land development and other land loans represented 39.0% of consolidated bank risk-based capital. During the prior 36 months, the Company has experienced an increase in its commercial real estate portfolio of 9.0%.
At December 31, 2024, the Company had approximately $122.4 million in loan commitments and letters of credit to borrowers and approximately $343.1 million in available home equity and other unadvanced lines of credit. Deposit inflows and outflows are affected by the level of interest rates, the products and interest rates offered by competitors and by other factors.
At December 31, 2025, the Company had approximately $144.0 million in loan commitments and letters of credit to borrowers and approximately $357.3 million in available home equity and other unadvanced lines of credit. 77 Deposit inflows and outflows are affected by the level of interest rates, the products and interest rates offered by competitors and by other factors.
Total criticized loans, defined as special mention and substandard loans, decreased $1.1 million, or 2.8%, from $39.5 million, or 1.9% of total loans, at December 31, 2023 to $38.4 million, or 1.9% of total loans, at December 31, 2024.
Total criticized loans, defined as special mention and substandard loans, increased $1.3 million, or 3.4%, from $38.4 million, or 1.9% of total loans, at December 31, 2024 to $39.7 million, or 1.8% of total loans, at December 31, 2025.
Core deposits, which the Company defines as all deposits except time deposits, increased $26.7 million, or 1.7%, from $1.5 billion, or 71.5% of total deposits, at December 31, 2023, to $1.6 billion, or 68.9% of total deposits, at December 31, 2024.
Core deposits, which the Company defines as all deposits except time deposits, increased $111.9 million, or 7.2%, from $1.6 billion, or 68.9% of total deposits, at December 31, 2024, to $1.7 billion, or 70.8% of total deposits, at December 31, 2025.
The decrease in income tax expense for the twelve months ended December 31, 2024 compared to the twelve months December 31, 2023 was due to lower income before taxes in 2024. Liquidity and Capital Resources. The term “liquidity” refers to our ability to generate adequate amounts of cash to fund loan originations, loan purchases, deposit withdrawals and operating expenses.
The increase in income tax expense was due to higher pre-tax income for the twelve months ended December 31, 2025. 76 Liquidity and Capital Resources. The term “liquidity” refers to our ability to generate adequate amounts of cash to fund loan originations, loan purchases, deposit withdrawals and operating expenses.
At December 31, 2024 and December 31, 2023, the Company did not have any other real estate owned. At December 31, 2024, the allowance for credit losses was $19.5 million, or 0.94% of total loans and 362.9% of nonperforming loans, compared to $20.3 million, or 1.00% of total loans and 315.6% of nonperforming loans, at December 31, 2023.
At December 31, 2025 and December 31, 2024, the Company did not have any other real estate owned. 66 At December 31, 2025, the allowance for credit losses was $20.3 million, or 0.93% of total loans and 393.2% of nonaccrual loans, compared to $19.5 million, or 0.94% of total loans and 362.9% of nonaccrual loans, at December 31, 2024.
The Company provides a wide range of investment advisory and wealth management services through Westfield Investment Services through LPL Financial, a third-party broker-dealer. Investment assets under management increased $27.2 million, or 15.8%, to $199.3 million as of December 31, 2024, from $172.1 million as of December 31, 2023. Comparison of Operating Results for Years Ended December 31, 2024 and 2023.
The Company provides a wide range of investment advisory and wealth management services through Westfield Investment Services through LPL Financial, a third-party broker-dealer. Investment assets under management increased $34.7 million, or 17.4%, to $234.0 million as of December 31, 2025, from $199.3 million as of December 31, 2024. Comparison of Operating Results for Years Ended December 31, 2025 and 2024.
You should read the following financial results for the year ended December 31, 2024 in the context of this strategy. 57 For the twelve months ended December 31, 2024, net income was $11.7 million, or $0.56 diluted earnings per share, compared to net income of $15.1 million, or $0.70 diluted earnings per share, for the twelve months ended December 31, 2023.
You should read the following financial results for the year ended December 31, 2025 in the context of this strategy. 58 For the twelve months ended December 31, 2025, the Company reported net income of $15.3 million, or $0.75 per diluted share, compared to $11.7 million, or $0.56 per diluted share, for the twelve months ended December 31, 2024.
In 2024, cash flows from deposit inflows were used to first to fund loan growth, and then to purchase securities, primarily AFS securities. While net loan growth during 2024 was centered in residential real estate loans, the Company’s long-term focus continues to be on growing commercial loans that present the appropriate levels of risk and return.
In 2025, cash flows from deposit inflows were used to fund loan growth. During 2025, the Company experienced net loan growth in residential real estate loans, commercial real estate loans and commercial and industrial loans. The Company’s long-term focus continues to be on growing commercial loans that present the appropriate levels of risk and return.
For the twelve months ended 12/31/2024 12/31/2023 12/31/2022 (Dollars in thousands) Loans (no tax adjustment) $ 98,898 $ 91,169 $ 77,264 Tax-equivalent adjustment (1) 471 471 494 Loans (tax-equivalent basis) $ 99,369 $ 91,640 $ 77,758 Securities (no tax adjustment) $ 8,649 $ 8,370 $ 8,296 Tax-equivalent adjustment (1) — 1 3 Securities (tax-equivalent basis) $ 8,649 $ 8,371 $ 8,299 Net interest income (no tax adjustment) $ 59,817 $ 67,909 $ 79,232 Tax equivalent adjustment (1) 471 472 497 Net interest income (tax-equivalent basis) $ 60,288 $ 68,381 $ 79,729 Net interest income (no tax adjustment) $ 59,817 $ 67,909 $ 79,232 Less: Fair value hedge interest income 1,398 1,085 — Adjusted net interest income (non-GAAP) $ 58,419 $ 66,824 $ 79,232 Average interest-earning assets $ 2,440,703 $ 2,407,251 $ 2,396,972 Net interest margin (no tax adjustment) 2.45 % 2.82 % 3.31 % Net interest margin, tax-equivalent 2.47 % 2.84 % 3.33 % Adjusted net interest margin, excluding fair value hedge interest income (non-GAAP) 2.39 % 2.77 % 3.31 % 63 At or for the twelve months ended 12/31/2024 12/31/2023 12/31/2022 (Dollars in thousands) Book Value per Share (GAAP) $ 11.30 $ 10.96 $ 10.27 Non-GAAP adjustments: Goodwill (0.60 ) (0.58 ) (0.56 ) Core deposit intangible (0.07 ) (0.08 ) (0.10 ) Tangible Book Value per Share (non-GAAP) $ 10.63 $ 10.30 $ 9.61 Adjusted Efficiency Ratio: Non-interest Expense (GAAP) $ 58,428 $ 58,350 $ 57,235 Net Interest Income (GAAP) $ 59,817 $ 67,909 $ 79,232 Non-interest Income (GAAP) $ 12,903 $ 10,897 $ 13,332 Non-GAAP adjustments: Loss on disposal of premises and equipment 6 3 — Loss on securities, net — — 4 Unrealized (gain) loss on marketable equity securities (13 ) 1 717 Gain on bank-owned life insurance death benefit — (778 ) — Gain on non-marketable equity investments (1,287 ) (590 ) (422 ) Loss (gain) on defined benefit plan termination — 1,143 (2,807 ) Non-interest Income for Adjusted Efficiency Ratio (non-GAAP) $ 11,609 $ 10,676 $ 10,824 Total Revenue for Adjusted Efficiency Ratio (non-GAAP) $ 71,426 $ 78,585 $ 90,056 Efficiency Ratio (GAAP) 80.35 % 74.04 % 61.83 % Adjusted Efficiency Ratio (Non-interest Expense (GAAP)/Total Revenue for Adjusted Efficiency Ratio (non-GAAP)) 81.80 % 74.25 % 63.55 % (1) The tax equivalent adjustment is based upon a 21% tax rate for 2024, 2023 and 2022. 64 Comparison of Financial Condition at December 31, 2024 and December 31, 2023.
For the twelve months ended 12/31/2025 12/31/2024 12/31/2023 (Dollars in thousands) Loans (no tax adjustment) $ 105,379 $ 98,898 $ 91,169 Tax-equivalent adjustment (1) 487 471 471 Loans (tax-equivalent basis) $ 105,866 $ 99,369 $ 91,640 Securities (no tax adjustment) $ 10,215 $ 8,649 $ 8,370 Tax-equivalent adjustment (1) — — 1 Securities (tax-equivalent basis) $ 10,215 $ 8,649 $ 8,371 Net interest income (no tax adjustment) $ 70,097 $ 59,817 $ 67,909 Tax equivalent adjustment (1) 487 471 472 Net interest income (tax-equivalent basis) $ 70,584 $ 60,288 $ 68,381 Net interest income (no tax adjustment) $ 70,097 $ 59,817 $ 67,909 Less: Prepayment penalties 459 8 64 Fair value hedge interest income — 1,398 1,085 Adjusted net interest income (non-GAAP) $ 69,638 $ 58,411 $ 66,760 Average interest-earning assets $ 2,549,650 $ 2,440,703 $ 2,407,251 Net interest margin (no tax adjustment) 2.75 % 2.45 % 2.82 % Net interest margin, tax-equivalent 2.77 % 2.47 % 2.84 % Adjusted net interest margin, excluding prepayment penalties and fair value hedge interest income (non-GAAP) 2.73 % 2.39 % 2.77 % 64 At or for the twelve months ended 12/31/2025 12/31/2024 12/31/2023 (Dollars in thousands) Book Value per Share (GAAP) $ 12.16 $ 11.30 $ 10.96 Non-GAAP adjustments: Goodwill (0.61 ) (0.60 ) (0.58 ) Core deposit intangible (0.06 ) (0.07 ) (0.08 ) Tangible Book Value per Share (non-GAAP) $ 11.49 $ 10.63 $ 10.30 Adjusted Efficiency Ratio: Non-interest Expense (GAAP) $ 62,488 $ 58,428 $ 58,350 Net Interest Income (GAAP) $ 70,097 $ 59,817 $ 67,909 Non-interest Income (GAAP) $ 12,516 $ 12,903 $ 10,897 Non-GAAP adjustments: Loss on disposal of premises and equipment — 6 3 Unrealized (gain) loss on marketable equity securities (35 ) (13 ) 1 Gain on bank-owned life insurance death benefit — — (778 ) Gain on non-marketable equity investments (243 ) (1,287 ) (590 ) Loss on defined benefit plan termination — — 1,143 Non-interest Income for Adjusted Efficiency Ratio (non-GAAP) $ 12,238 $ 11,609 $ 10,676 Total Revenue for Adjusted Efficiency Ratio (non-GAAP) $ 82,335 $ 71,426 $ 78,585 Efficiency Ratio (GAAP) 75.64 % 80.35 % 74.04 % Adjusted Efficiency Ratio (Non-interest Expense (GAAP)/Total Revenue for Adjusted Efficiency Ratio (non-GAAP)) 75.89 % 81.80 % 74.25 % (1) The tax equivalent adjustment is based upon a 21% tax rate for 2025, 2024 and 2023. 65 Comparison of Financial Condition at December 31, 2025 and December 31, 2024.
At December 31, 2024, the Company reported unrealized losses on the available-for-sale securities portfolio of $31.2 million, or 16.2% of the amortized cost basis of the available-for-sale securities portfolio, compared to unrealized losses of $29.2 million, or 17.5% of the amortized cost basis of the available-for-sale securities at December 31, 2023.
At December 31, 2025, the Company reported gross unrealized losses on the available-for-sale securities portfolio of $23.4 million, or 11.8% of the amortized cost basis of the available-for-sale securities portfolio, compared to gross unrealized losses of $31.2 million, or 16.2% of the amortized cost basis of the available-for-sale securities at December 31, 2024.
The average cost of time deposits increased 129 basis points from 3.03% for the twelve months ended December 31, 2023 to 4.32% for the twelve months ended December 31, 2024.
The average cost of time deposits decreased 63 basis points from 4.32% for the twelve months ended December 31, 2024 to 3.69% for the twelve months ended December 31, 2025.
For the twelve months ended December 31, 2024, average demand deposits, an interest-free source of funds, decreased $41.4 million, or 6.9%, from $602.7 million, or 27.8% of total average deposits, for the twelve months ended December 31, 2023, to $561.3 million, or 25.8% of total average deposits. Provision for Credit Losses.
For the twelve months ended December 31, 2025, average demand deposits, an interest-free source of funds, increased $20.9 million, or 3.7%, from $561.3 million, or 25.8% of total average deposits, for the twelve months ended December 31, 2024, to $582.2 million, or 25.1% of total average deposits. Provision for Credit Losses.
At December 31, 2024, the investment securities portfolio totaled $366.1 million, or 13.8% of total assets, compared to $360.7 million, or 14.1% of total assets, at December 31, 2023. At December 31, 2024, the Company’s available-for-sale securities portfolio, recorded at fair market value, increased $23.6 million, or 17.2%, from $137.1 million at December 31, 2023 to $160.7 million.
At December 31, 2025, the investment securities portfolio totaled $365.2 million, or 13.3% of total assets, compared to $366.1 million, or 13.8% of total assets, at December 31, 2024. At December 31, 2025, the Company’s available-for-sale securities portfolio, recorded at fair market value, increased $15.1 million, or 9.4%, from $160.7 million at December 31, 2024 to $175.8 million.
The held-to-maturity securities portfolio, recorded at amortized cost, decreased $18.4 million, or 8.2%, from $223.4 million at December 31, 2023 to $205.0 million at December 31, 2024.
The held-to-maturity securities portfolio, recorded at amortized cost, decreased $16.2 million, or 7.9%, from $205.0 million at December 31, 2024 to $188.8 million at December 31, 2025.
During the twelve months ended December 31, 2023, the Company also reported unrealized losses on marketable equity securities of $1,000, compared to unrealized gains on marketable equity securities of $13,000 during the twelve months ended December 31, 2024. Non-Interest Expense.
During the twelve months ended December 31, 2025, the Company reported unrealized gains on marketable equity securities of $35,000, compared to unrealized gains on marketable equity securities of $13,000 during the twelve months ended December 31, 2024.
At December 31, 2024 and December 31, 2023, there were no loans 90 or more days past due and still accruing interest. Total nonperforming assets totaled $5.4 million, or 0.20% of total assets, at December 31, 2024, compared to $6.4 million, or 0.25% of total assets, at December 31, 2023.
At December 31, 2025 and December 31, 2024, there were no loans 90 or more days past-due and still accruing interest. Total nonperforming assets, defined as nonaccrual loans and other real estate owned, totaled $5.2 million, or 0.19% of total assets, at December 31, 2025, compared to $5.4 million, or 0.20% of total assets, at December 31, 2024.
The Company’s book value per share was $11.30 at December 31, 2024, compared to $10.96 at December 31, 2023, while tangible book value per share, a non-GAAP financial measure, increased $0.33, or 3.2%, from $10.30 at December 31, 2023 to $10.63 at December 31, 2024. Tangible book value is a Non-GAAP measure.
The Company’s book value per share was $12.16 at December 31, 2025, compared to $11.30 at December 31, 2024, while tangible book value per share, a non-GAAP financial measure, increased $0.86, or 8.1%, from $10.63 at December 31, 2024 to $11.49 at December 31, 2025.
The Board has established internal maximum limits on CRE as an asset class overall as well as sub limits within CRE by property class, to better manage and control the exposure to property classes during periods of changing economic conditions. The Board also has minimum targets for regulatory capital ratios that are in excess of well capitalized ratios.
The Company’s Board of Directors (the “Board”) has established internal maximum limits on CRE as an asset class overall as well as sub limits within CRE by property class, to better manage and control the exposure to property classes during periods of changing economic conditions.
At December 31, 2024, shareholders’ equity was $235.9 million, or 8.9% of total assets, compared to $237.4 million, or 9.3% of total assets, at December 31, 2023.
Shareholders’ Equity. At December 31, 2025, shareholders’ equity was $247.6 million, or 9.1% of total assets, compared to $235.9 million, or 8.9% of total assets, at December 31, 2024.
Net interest income decreased $8.1 million, or 11.9%, provision for credit losses decreased $1.5 million, non-interest income increased $2.0 million, or 18.4%, and non-interest expense increased $78,000, or 0.1%, during the same period in 2023.
Net interest income increased $10.3 million, or 17.2%, provision for credit losses increased $1.0 million, non-interest income decreased $387,000, or 3.0%, and non-interest expense increased $4.1 million, or 6.9%, during the same period in 2024.
Loan interest and yield data does not include any accrued interest from non-accruing loans. 59 For the Years Ended December 31, 2024 2023 2022 Average Average Yield/ Average Average Yield/ Average Average Yield/ Balance Interest Cost Balance Interest Cost Balance Interest Cost (Dollars in thousands) ASSETS: Interest-earning assets Loans(1)(2) $ 2,035,149 $ 99,369 4.88 % $ 2,006,166 $ 91,640 4.57 % $ 1,953,527 $ 77,758 3.98 % Securities(2) 357,631 8,649 2.42 368,201 8,371 2.27 407,444 8,299 2.04 Other investments - at cost 14,669 687 4.68 12,425 558 4.49 10,289 177 1.72 Short-term investments(3) 33,254 1,598 4.81 20,459 1,021 4.99 25,712 191 0.74 Total interest-earning assets 2,440,703 110,303 4.52 2,407,251 101,590 4.22 2,396,972 86,425 3.61 Total non-interest-earning assets 155,056 155,511 152,941 Total assets $ 2,595,759 $ 2,562,762 $ 2,549,913 LIABILITIES AND EQUITY: Interest-bearing liabilities Interest-bearing checking accounts $ 136,861 1,022 0.75 $ 142,005 1,041 0.73 $ 139,993 530 0.38 Savings accounts 182,678 166 0.09 202,354 181 0.09 222,267 161 0.07 Money market accounts 631,197 12,242 1.94 697,621 9,529 1.37 890,763 3,187 0.36 Time deposits 666,917 28,806 4.32 524,827 15,898 3.03 363,258 1,474 0.41 Total interest-bearing deposits 1,617,653 42,236 2.61 1,566,807 26,649 1.70 1,616,281 5,352 0.33 Short-term borrowings and long-term debt 155,560 7,779 5.00 135,532 6,560 4.84 31,556 1,344 4.26 Interest-bearing liabilities 1,773,213 50,015 2.82 1,702,339 33,209 1.95 1,647,837 6,696 0.41 Non-interest-bearing deposits 561,264 602,652 647,971 Other non-interest-bearing liabilities 24,541 24,885 35,615 Total non-interest-bearing liabilities 585,805 627,537 683,586 Total liabilities 2,359,018 2,329,876 2,331,423 Total equity 236,741 232,886 218,490 Total liabilities and equity $ 2,595,759 $ 2,562,762 $ 2,549,913 Less: Tax-equivalent adjustment(2) (471 ) (472 ) (497 ) Net interest and dividend income $ 59,817 $ 67,909 $ 79,232 Net interest rate spread(4) 1.68 % 2.25 % 3.18 % Net interest rate spread, on a tax-equivalent basis(5) 1.70 % 2.27 % 3.20 % Net interest margin(6) 2.45 % 2.82 % 3.31 % Net interest margin, on a tax-equivalent basis(7) 2.47 % 2.84 % 3.33 % Ratio of average interest-earning assets to average interest-bearing liabilities 137.64 % 141.41 % 145.46 % 60 (1) Loans, including nonperforming loans, are net of deferred loan origination costs and unadvanced funds.
Loan interest and yield data does not include any accrued interest from non-accruing loans. 60 For the Years Ended December 31, 2025 2024 2023 Average Average Yield/ Average Average Yield/ Average Average Yield/ Balance Interest Cost Balance Interest Cost Balance Interest Cost (Dollars in thousands) ASSETS: Interest-earning assets Loans(1)(2) $ 2,108,767 $ 105,866 5.02 % $ 2,035,149 $ 99,369 4.88 % $ 2,006,166 $ 91,640 4.57 % Securities(2) 371,206 10,215 2.75 357,631 8,649 2.42 368,201 8,371 2.27 Other investments - at cost 14,907 690 4.63 14,669 687 4.68 12,425 558 4.49 Short-term investments(3) 54,770 2,335 4.26 33,254 1,598 4.81 20,459 1,021 4.99 Total interest-earning assets 2,549,650 119,106 4.67 2,440,703 110,303 4.52 2,407,251 101,590 4.22 Total non-interest-earning assets 156,591 155,056 155,511 Total assets $ 2,706,241 $ 2,595,759 $ 2,562,762 LIABILITIES AND EQUITY: Interest-bearing liabilities Interest-bearing checking accounts $ 155,831 1,497 0.96 $ 136,861 1,022 0.75 $ 142,005 1,041 0.73 Savings accounts 186,780 180 0.10 182,678 166 0.09 202,354 181 0.09 Money market accounts 704,654 15,242 2.16 631,197 12,242 1.94 697,621 9,529 1.37 Time deposits 693,208 25,593 3.69 666,917 28,806 4.32 524,827 15,898 3.03 Total interest-bearing deposits 1,740,473 42,512 2.44 1,617,653 42,236 2.61 1,566,807 26,649 1.70 Short-term borrowings and long-term debt 119,764 6,010 5.02 155,560 7,779 5.00 135,532 6,560 4.84 Interest-bearing liabilities 1,860,237 48,522 2.61 1,773,213 50,015 2.82 1,702,339 33,209 1.95 Non-interest-bearing deposits 582,168 561,264 602,652 Other non-interest-bearing liabilities 23,472 24,541 24,885 Total non-interest-bearing liabilities 605,640 585,805 627,537 Total liabilities 2,465,877 2,359,018 2,329,876 Total equity 240,364 236,741 232,886 Total liabilities and equity $ 2,706,241 $ 2,595,759 $ 2,562,762 Less: Tax-equivalent adjustment(2) (487 ) (471 ) (472 ) Net interest and dividend income $ 70,097 $ 59,817 $ 67,909 Net interest rate spread(4) 2.04 % 1.68 % 2.25 % Net interest rate spread, on a tax-equivalent basis(5) 2.06 % 1.70 % 2.27 % Net interest margin(6) 2.75 % 2.45 % 2.82 % Net interest margin, on a tax-equivalent basis(7) 2.77 % 2.47 % 2.84 % Ratio of average interest-earning assets to average interest-bearing liabilities 137.06 % 137.64 % 141.41 % 61 (1) Loans, including nonperforming loans, are net of deferred loan origination costs and unadvanced funds.
Management continues to monitor macroeconomic variables related to increasing interest rates, inflation and the concerns of an economic downturn, and believes it is appropriately reserved for the current economic environment. 74 Although management believes it has established and maintained the allowance for credit losses at appropriate levels for the current economic environment and supportable forecast period, future adjustments may be necessary if economic, real estate and other conditions differ substantially from the current operating environment.
Although management believes it has established and maintained the allowance for credit losses at appropriate levels for the current economic environment and supportable forecast period, future adjustments may be necessary if economic, real estate and other conditions differ substantially from the current operating environment. Non-Interest Income.
Our risk management process begins with a robust underwriting program. The underwriting and risk rating of all loans is completed by the Company’s Credit Department that is independent of the originating lender(s).
The Board also has minimum targets for regulatory capital ratios that are in excess of well capitalized ratios. Our risk management process begins with a robust underwriting program. The underwriting and risk rating of all loans is completed by the Company’s Credit Department that is independent of the originating lender(s).
The change was primarily attributable to an increase in accumulated other comprehensive loss of $1.5 million, cash dividends paid of $5.9 million, repurchase of shares at a cost of $7.8 million, partially offset by net income of $11.7 million. At December 31, 2024, total shares outstanding were 20,875,713.
The change was primarily attributable to net income of $15.3 million and a decrease in accumulated other comprehensive loss of $6.6 million, partially offset by cash dividends paid of $5.7 million and the repurchase of shares at a cost of $6.2 million. At December 31, 2025, total shares outstanding were 20,372,786.
Our leases have remaining lease terms of less than one year to fourteen years, some of which include options to extend the leases for additional five-year terms up to ten years. Undiscounted lease liabilities totaled $8.9 million as of December 31, 2024.
Further, the Company has operating leases for certain of its banking offices and ATMs. Our leases have remaining lease terms of less than one year to thirteen years, some of which include options to extend the leases for additional five-year terms up to ten years. Undiscounted lease liabilities totaled $7.7 million as of December 31, 2025.
Total delinquency was $5.0 million, or 0.24% of total loans, at December 31, 2024, compared to $6.0 million, or 0.30% of total loans at December 31, 2023. At December 31, 2024, nonperforming loans totaled $5.4 million, or 0.26% of total loans, compared to $6.4 million, or 0.32% of total loans, at December 31, 2023.
Total delinquency was $3.1 million, or 0.14% of total loans, at December 31, 2025, compared to $5.0 million, or 0.24% of total loans at December 31, 2024. At December 31, 2025, nonaccrual loans totaled $5.2 million, or 0.24% of total loans, compared to $5.4 million, or 0.26% of total loans, at December 31, 2024.
We do not anticipate any material capital expenditures during the calendar year 2025, except in pursuance of the Company’s strategic initiatives. The Company does not have any balloon or other payments due on any long-term obligations or any off-balance sheet items other than the commitments and unused lines of credit noted above. 77 Off-Balance Sheet Arrangements.
The Company does not have any balloon or other payments due on any long-term obligations or any off-balance sheet items other than the commitments and unused lines of credit noted above. Off-Balance Sheet Arrangements.
During the twelve months ended December 31, 2024, average interest-earning assets increased $33.5 million, or 1.4%, to $2.4 billion, compared to the twelve months ended December 31, 2023, primarily due to an increase in average loans of $29.0 million, or 1.4%, an increase in average short-term investments, consisting of cash and cash equivalents, of $12.8 million, or 62.5%, and an increase in average other investments of $2.2 million, or 18.1%, partially offset by a decrease in average securities of $10.6 million, or 2.9%.
During the twelve months ended December 31, 2025, average interest-earning assets increased $108.9 million, or 4.5%, to $2.5 billion, compared to the twelve months ended December 31, 2024, primarily due to an increase in average loans of $73.6 million, or 3.6%, an increase in average short-term investments, consisting of cash and cash equivalents, of $21.5 million, or 64.7%, and an increase in average securities of $13.6 million, or 3.8%.
At December 31, 2024, we had $464.1 million in available borrowing capacity with the FHLB. We have the ability to increase our borrowing capacity with the FHLB by pledging investment securities or additional loans.
At December 31, 2025, we had $538.6 million in available borrowing capacity with the FHLB, including our $9.5 million overnight Ideal Way Line of Credit. We have the ability to increase our borrowing capacity with the FHLB by pledging investment securities or additional loans.
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Increase (Decrease) Due to Increase (Decrease) Due to Volume Rate Net Volume Rate Net Interest-earning assets (Dollars in thousands) (Dollars in thousands) Loans (1) $ 1,323 $ 6,406 $ 7,729 $ 2,095 $ 11,787 $ 13,882 Investment securities (1) (240 ) 518 278 (799 ) 871 72 Other investments - at cost 101 28 129 37 344 381 Short-term investments 639 (62 ) 577 (39 ) 869 830 Total interest-earning assets 1,823 6,890 8,713 1,294 13,871 15,165 Interest-bearing liabilities Interest-bearing checking accounts (39 ) 20 (19 ) 8 503 511 Savings accounts (18 ) 3 (15 ) (14 ) 34 20 Money market accounts (907 ) 3,620 2,713 (691 ) 7,033 6,342 Time deposits 4,304 8,604 12,908 656 13,768 14,424 Short-term borrowing and long-term debt 969 250 1,219 4,428 788 5,216 Total interest-bearing liabilities 4,309 12,497 16,806 4,387 22,126 26,513 Change in net interest and dividend income $ (2,486 ) $ (5,607 ) $ (8,093 ) $ (3,093 ) $ (8,255 ) $ (11,348 ) (1) Securities and loan income and net interest income are presented on a tax-equivalent basis using a tax rate of 21% for 2024, 2023 and 2022.
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Increase (Decrease) Due to Increase (Decrease) Due to Volume Rate Net Volume Rate Net Interest-earning assets (Dollars in thousands) (Dollars in thousands) Loans (1) $ 3,595 $ 2,902 $ 6,497 $ 1,323 $ 6,406 $ 7,729 Investment securities (1) 328 1,238 1,566 (240 ) 518 278 Other investments - at cost 11 (8 ) 3 101 28 129 Short-term investments 1,034 (297 ) 737 639 (62 ) 577 Total interest-earning assets 4,968 3,835 8,803 1,823 6,890 8,713 Interest-bearing liabilities Interest-bearing checking accounts 142 333 475 (39 ) 20 (19 ) Savings accounts 4 10 14 (18 ) 3 (15 ) Money market accounts 1,425 1,575 3,000 (907 ) 3,620 2,713 Time deposits 1,136 (4,349 ) (3,213 ) 4,304 8,604 12,908 Short-term borrowing and long-term debt (1,790 ) 21 (1,769 ) 969 250 1,219 Total interest-bearing liabilities 917 (2,410 ) (1,493 ) 4,309 12,497 16,806 Change in net interest and dividend income $ 4,051 $ 6,245 $ 10,296 $ (2,486 ) $ (5,607 ) $ (8,093 ) (1) Securities and loan income and net interest income are presented on a tax-equivalent basis using a tax rate of 21% for 2025, 2024 and 2023.
During the twelve months ended December 31, 2024, net interest income decreased $8.1 million, or 11.9%, to $59.8 million, compared to $67.9 million for the twelve months ended December 31, 2023.
During the twelve months ended December 31, 2025, net interest income increased $10.3 million, or 17.2%, to $70.1 million, compared to $59.8 million for the twelve months ended December 31, 2024.

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