[10-Q] BAR HARBOR BANKSHARES Quarterly Earnings Report

Rhea-AI Filing Summary

Bar Harbor Bankshares (BHB) reported Q3 results and closed an acquisition. Total assets reached $4.72 billion and deposits were $3.95 billion as of September 30, 2025. Net loans were $3.55 billion. Q3 net interest income was $36.96 million versus $28.96 million a year ago, while interest expense held roughly flat year over year. Provision for credit losses on loans was $3.75 million.

Q3 net income was $8.86 million with diluted EPS of $0.54, down from $0.80 a year ago, reflecting higher credit provisions and acquisition-related costs. Non-interest income was $10.57 million. Non-interest expense rose to $32.74 million, including $4.98 million of acquisition, conversion and other expenses.

Acquisition: On July 31, 2025, BHB acquired Guaranty Bancorp, Inc., adding nine New Hampshire branches. Each Guaranty share converted into 1.85 BHB shares; the Company issued 1,350,464 shares for total consideration of $39.22 million and recorded $22.3 million of goodwill. Cash acquired, net of consideration, was $77.52 million. Shares outstanding were 16,688,573 as of November 3, 2025.

Insights

Banking equity analyst

Solid balance-sheet growth; earnings muted by deal costs.

BHB expanded to $4.72B in assets, driven by the Guaranty acquisition and organic loan growth to $3.58B (gross). Net interest income improved to $36.96M in Q3 as earning assets grew while deposit and borrowing costs stabilized year over year.

Earnings of $8.86M reflect higher loan loss provisioning of $3.75M and non-interest expense of $32.74M, including $4.98M of acquisition and conversion costs. These items are typical around close and can temporarily compress quarterly profitability.

The Guaranty transaction added nine branches, 1,350,464 new shares for consideration of $39.22M, and $22.3M of goodwill. Actual post-close performance will depend on integration outcomes and cost run-rate after one-time expenses are absorbed.

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Table of Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

​

FORM 10-Q

​

​	​
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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For the quarterly period ended: September 30, 2025

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​	​
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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For the transition period from                    to

Commission File Number: 001-13349

BAR HARBOR BANKSHARES

(Exact name of registrant as specified in its charter)

​

​	​	​
Maine	​	01-0393663
(State or other jurisdiction of incorporation or organization)	​	(I.R.S. Employer Identification No.)
​	​	​
PO Box 400	​	​
82 Main Street, Bar Harbor, ME	​	04609-0400
(Address of principal executive offices)	​	(Zip Code)

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Registrant’s telephone number, including area code: (207) 288-3314

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Securities registered pursuant to Section 12(b) of the Act:

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Title of each class	​	Trading Symbol	​	Name of each exchange on which registered
Common Stock, par value $2.00 per share	​	BHB	​	NYSE American

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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ⌧  No ◻

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Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧  No ◻

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.  See the definition of "large accelerated filer," "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act.

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Large Accelerated Filer ◻        Accelerated Filer ⌧       Non-Accelerated Filer ◻      Smaller Reporting Company ☐        Emerging growth company ☐

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐  No ⌧

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The registrant had 16,688,573 shares of common stock, par value $2.00 per share, outstanding as of November 3, 2025.

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Table of Contents

BAR HARBOR BANKSHARES AND SUBSIDIARIES

FORM 10-Q

INDEX

​		​						Page
PART I.		FINANCIAL INFORMATION						​
Item 1.		Consolidated Financial Statements (unaudited)						​
​		​						​
​		Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024						4
​		​						​
​		Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2025 and 2024						5
​		​						​
​		Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2025 and 2024						6
​		​						​
​		Consolidated Statements of Changes in Shareholders’ Equity for the Three and Nine Months Ended September 30, 2025 and 2024						7
​		​						​
​		Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024						8
​		​						​
​		Condensed Notes to Unaudited Consolidated Interim Financial Statements						10
​		​			​		​	​
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations						62
​		​			Selected Financial Data			70
​		​			Consolidated Loan and Deposit Analysis			71
​		​			Average Balances and Average Yields/Rates			72
​		​			Reconciliation of Non-GAAP Financial Measures			74
​		​			​
Item 3.		Quantitative and Qualitative Disclosures about Market Risk						76
​		​						​
Item 4.		Controls and Procedures						77
​	​		​
PART II.		OTHER INFORMATION						​
Item 1.		Legal Proceedings						78
​		​						​
Item 1A.		Risk Factors						78
​		​						​
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds						78
​		​						​
Item 3.		Defaults Upon Senior Securities						78
​		​						​
Item 4.		Mine Safety Disclosures						78
​		​						​
Item 5.		Other Information						78
​		​						​
Item 6.		Exhibits						79
​		​						​
Signatures		​						80

​

​

Bar Harbor Bankshares conducts business operations principally through Bar Harbor Bank & Trust, which may be referred to as the “Bank” and which is a subsidiary of Bar Harbor Bankshares. Unless the context requires otherwise, references in this report to “the Company,” "our," "us," and similar terms refer to Bar Harbor Bankshares and its subsidiaries, including the Bank, collectively.

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2

Table of Contents

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

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Certain statements contained in this Quarterly Report on Form 10-Q (this “Form 10-Q”) that are not historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. When used in this Form 10-Q the words “believe,” “anticipate,” “expect,” “may,” “will,” “assume,” “should,” “predict,” “could,” “would,” “intend,” “targets,” “estimates,” “projects,” “plans,” and “potential,” and other similar words and expressions of the future, are intended to identify such forward-looking statements, but other statements not based on historical information may also be considered forward-looking, including statements about the Company’s future financial and operating results and the Company’s plans, objectives, and intentions. All forward-looking statements are subject to risks, uncertainties, and other factors that may cause the actual results, performance, or achievements of the Company to differ materially from any results, performance, or achievements expressed or implied by such forward-looking statements. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause the actual results to differ materially from the statements, including, but not limited to: 

​

● changes in general business and economic conditions on a national basis and in our markets throughout Northern New England;

● changes in consumer behavior due to political, business, and economic conditions, including inflation and concerns about liquidity;

● the possibility that our asset quality could decline or that we experience greater loan losses than anticipated;

● the impact of liquidity needs on our results of operations and financial condition; changes in the size and nature of our competition;

● the effect of interest rate increases on the cost of deposits;

● unanticipated weakness in loan demand, pricing or collectability;

● the possibility that future credit losses are higher than currently expected due to changes in economic assumptions or adverse economic developments;

● operational risks including, but not limited to, changes in information technology, cybersecurity incidents, fraud, natural disasters, climate change, war, terrorism, civil unrest, and future pandemics;

● lack of strategic growth opportunities or our failure to execute on available opportunities;  

● failure to realize the expected synergies, cost savings and other financial benefits from the acquisition of Guaranty Bancorp, Inc.;

● our ability to effectively manage problem credits;

● our ability to successfully develop new products and implement efficiency initiatives on time and with the results projected;

● our ability to retain executive officers and key employees and their customer and community relationships;

● regulatory, litigation, and reputational risks and the applicability of insurance coverage;

● changes in the reliability of our vendors, internal control systems or information systems;

● the impacts of tariffs, sanctions and other trade policies of the United States and its global trading counterparts;

● changes in legislation or regulation and accounting principles, policies, and guidelines;

● reductions in the market value or outflows of wealth management assets under management; and

● changes in the assumptions used in making such forward-looking statements.

​

Other factors not identified above, including those described under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the “Form 10-K”), our Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) and available on the SEC’s website at http://www.sec.gov, may also cause actual results to differ materially from those described in our forward-looking statements. Most of these factors are difficult to anticipate and are generally beyond our control. Given these uncertainties, you are cautioned not to place undue reliance on such forward-looking statements, and you should consider these factors in connection with considering any forward-looking statements that may be made by us. We undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events unless we are required to do so by law.

3

Table of Contents

PART I.          FINANCIAL INFORMATION

​

ITEM 1.          CONSOLIDATED FINANCIAL STATEMENTS

​

BAR HARBOR BANKSHARES AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

​

​	​	​	​	​	​	​
(in thousands, except share data)		September 30, 2025			December 31, 2024
Assets		​			​
Cash and cash equivalents:	​	​	​	​	​	​
Cash and due from banks	​	$	42,743	​	$	34,266
Interest-earning deposits with other banks	​		93,971	​		37,896
Total cash and cash equivalents	​		136,714	​		72,162
Securities:	​	​	​	​	​	​
Available-for-sale debt securities	​		597,810	​		521,018
Less: Allowance for credit losses on available-for-sale debt securities	​	​	—	​	​	(568)
Net securities	​	​	597,810	​	​	520,450
Federal Home Loan Bank stock	​		8,560	​		12,237
Loans held for sale	​	​	5,545	​	​	1,235
Total loans held for investment	​		3,583,716	​		3,147,096
Less: Allowance for credit losses	​		(33,940)	​		(28,744)
Net loans held for investment	​		3,549,776	​		3,118,352
Premises and equipment, net	​		58,828	​		51,237
Other real estate owned	​		—	​		—
Goodwill	​		141,819	​		119,477
Other intangible assets	​		16,989	​		3,938
Cash surrender value of bank-owned life insurance	​		95,554	​		81,858
Deferred tax assets, net	​		31,721	​		23,330
Other assets	​		73,936	​		79,051
Total assets	​	$	4,717,252	​	$	4,083,327
​	​	​	​	​	​	​
Liabilities	​			​
Deposits:	​			​
Non-interest bearing demand	​	$	692,780	​	$	575,649
Interest-bearing demand	​		1,137,362	​		910,191
Savings	​		647,428	​		545,816
Money market	​		488,633	​		405,758
Time	​		981,993	​		830,274
Total deposits	​		3,948,196	​		3,267,688
Borrowings:	​			​
Senior	​		139,956	​		249,981
Subordinated	​		52,229	​		40,620
Total borrowings	​		192,185	​		290,601
Other liabilities	​		55,916	​		66,610
Total liabilities	​		4,196,297	​		3,624,899

​

​	​	​	​	​	​	​
Shareholders’ equity		​	​		​	​
Capital stock, par value $2.00; authorized 30,000,000 shares and 20,000,000 shares; issued 17,734,817 shares and 16,428,388 shares; outstanding 16,688,573 shares and 15,279,783 shares at September 30, 2025 and December 31, 2024, respectively		​	35,470		​	32,857
Additional paid-in capital		​	232,827		​	194,607
Retained earnings		​	307,986		​	297,857
Accumulated other comprehensive loss		​	(40,025)		​	(51,536)
Less: 1,046,244 and 1,148,605 shares of treasury stock, at cost, at September 30, 2025 and December 31, 2024, respectively		​	(15,303)		​	(15,357)
Total shareholders’ equity		​	520,955		​	458,428
Total liabilities and shareholders’ equity	​	$	4,717,252	​	$	4,083,327

​

The accompanying notes are an integral part of these consolidated financial statements.

​

4

Table of Contents

BAR HARBOR BANKSHARES AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Nine Months Ended

​

​

September 30,

​

September 30,

(in thousands, except earnings per share data)

2025

2024

2025

2024

Interest and dividend income

​

​

​

​

​

​

​

​

​

​

​

​

Loans

​

$

48,426

​

$

42,042

​

$

132,956

​

$

122,146

Securities and other

​

6,355

​

5,515

​

​

17,112

​

​

16,665

Federal Home Loan Bank stock

​

217

​

258

​

566

​

745

Interest-earning deposits with other banks

​

​

924

​

​

765

​

​

1,514

​

​

1,685

Total interest and dividend income

​

55,922

​

48,580

​

152,148

​

141,241

Interest expense

​

​

​

​

Deposits

​

16,419

​

16,174

​

47,442

​

45,486

Borrowings

​

2,544

​

3,448

​

8,845

​

10,983

Total interest expense

​

18,963

​

19,622

​

56,287

​

56,469

Net interest income

​

36,959

​

28,958

​

95,861

​

84,772

Provision for credit losses on available-for-sale debt securities

​

​

—

​

​

—

​

​

636

​

​

—

Provision for credit losses on loans

​

3,749

​

228

​

4,220

​

1,102

Net interest income after provision for credit losses

​

33,210

​

28,730

​

91,005

​

83,670

​

​

​

​

​

​

​

​

​

​

​

​

​

Non-interest income

​

​

​

​

Trust and investment management fee income

​

3,903

​

4,129

​

12,082

​

11,992

Customer service fees

​

4,311

​

3,788

​

11,425

​

11,235

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

​

41

​

—

​

(4,901)

​

50

Mortgage banking income

​

​

423

​

​

681

​

​

1,484

​

​

1,496

Bank-owned life insurance income

​

665

​

570

​

1,881

​

1,714

Customer derivative income

​

962

​

265

​

1,278

​

433

Other income

​

262

​

220

​

882

​

576

Total non-interest income

​

10,567

​

9,653

​

24,131

​

27,496

​

​

​

​

​

​

​

​

​

​

​

​

​

Non-interest expense

​

​

​

​

Salaries and employee benefits

​

15,939

​

14,383

​

43,946

​

41,491

Occupancy and equipment

​

3,879

​

3,405

​

10,750

​

10,154

Depreciation

​

​

1,078

​

​

1,048

​

​

3,150

​

​

3,154

Loss (gain) on sales of premises and equipment, net

​

(206)

​

—

​

(113)

​

(263)

Outside services

​

514

​

386

​

1,453

​

1,186

Professional services

​

296

​

441

​

1,402

​

1,079

Communication

​

246

​

189

​

606

​

570

Marketing

​

655

​

434

​

1,855

​

1,522

Amortization of intangible assets

​

466

​

233

​

932

​

699

FDIC assessment

​

​

462

​

​

451

​

​

1,382

​

​

1,351

Acquisition, conversion and other expenses

​

4,978

​

—

​

6,422

​

20

Provision (credit) for unfunded commitments

​

​

145

​

​

35

​

​

71

​

(150)

Other expenses

​

4,287

​

3,767

​

12,072

​

11,289

Total non-interest expense

​

32,739

​

24,772

​

83,928

​

72,102

​

​

​

​

​

​

​

​

​

​

​

​

​

Income before income taxes

​

11,038

​

13,611

​

31,208

​

39,064

Income tax expense

​

2,183

​

1,418

​

6,050

​

6,519

Net income

​

$

8,855

​

$

12,193

​

$

25,158

​

$

32,545

​

​

​

​

​

​

​

​

​

​

​

​

​

Earnings per share:

​

​

​

​

Basic

​

$

0.55

​

$

0.80

​

$

1.61

​

$

2.14

Diluted

​

​

0.54

​

​

0.80

​

$

1.60

​

$

2.13

Weighted average common shares outstanding:

​

​

​

​

Basic

​

16,231

​

15,261

​

15,622

​

15,229

Diluted

​

16,284

​

15,326

​

15,685

​

15,292

The accompanying notes are an integral part of these consolidated financial statements.

5

Table of Contents

BAR HARBOR BANKSHARES AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

Nine Months Ended

​

​

September 30,

​

September 30,

(in thousands)

2025

2024

2025

2024

Net income

​

$

8,855

​

$

12,193

​

$

25,158

​

$

32,545

Other comprehensive income (loss), before tax:

​

​

​

​

Changes in unrealized gain (loss) on available-for-sale debt securities

​

9,477

​

16,147

​

15,670

​

10,043

Changes in unrealized (loss) gain on hedging derivatives

​

1,852

​

82

​

(1,207)

​

(1,167)

Changes in unrealized gain (loss) on pension

​

—

​

—

​

—

​

22

​

​

​

​

​

​

​

​

​

​

​

​

​

Income taxes related to other comprehensive income (loss):

​

​

​

​

Changes in unrealized (gain) loss on available-for-sale debt securities

​

(2,106)

​

(3,808)

​

(3,260)

​

(2,368)

Changes in unrealized loss (gain) on hedging derivatives

​

(439)

​

(19)

​

308

​

275

Changes in unrealized loss (gain) on pension

​

—

​

—

​

—

​

(28)

Total other comprehensive income (loss)

​

8,784

​

12,402

​

11,511

​

6,777

Total comprehensive income

​

$

17,639

​

$

24,595

​

$

36,669

​

$

39,322

​

​

The accompanying notes are an integral part of these consolidated financial statements.

​

​

6

Table of Contents

BAR HARBOR BANKSHARES AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED)

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​		​		​	​	​		​	​	​	Accumulated			​	​		​	​
​	​	Common		​	Additional		​	​	​	​	other		​	​	​	​	​	​
​	​	stock		​	paid-in		​	Retained		​	comprehensive		​	Treasury		​	​	​
(in thousands, except per share data)		amount			capital			earnings			income (loss)			stock			Total
Balance at December 31, 2023	​	$	32,857	​	$	193,114	​	$	272,101	​	$	(49,862)	​	$	(16,151)	​	$	432,059
Net income	​		—	​		—	​		20,352	​		—	​		—	​		20,352
Other comprehensive loss	​	​	—	​		—	​		—	​		(5,625)	​		—	​	​	(5,625)
Cash dividends declared ($0.58 per share)	​	​	—	​		—	​		(8,724)	​		—	​		—	​	​	(8,724)
Net issuance (60,294 shares) to employee stock plans, including related tax effects	​		—	​		(799)	​		—	​		—	​		473	​		(326)
Recognition of stock based compensation	​		—	​		1,171	​		—	​		—	​		—	​		1,171
Balance at June 30, 2024	​	$	32,857	​	$	193,486	​	$	283,729	​	$	(55,487)	​	$	(15,678)	​	$	438,907
Net income	​		—	​		—	​		12,193	​		—	​		—	​		12,193
Other comprehensive income	​		—	​		—	​		—	​		12,402	​		—	​		12,402
Cash dividends declared ($0.30 per share)	​		—	​		—	​		(4,530)	​		—	​		—	​		(4,530)
Net issuance (35,431 shares) to employee stock plans, including related tax effects	​		—	​		(221)	​		—	​		—	​		241	​		20
Recognition of stock based compensation	​		—	​		924	​		—	​		—	​		—	​		924
Balance at September 30, 2024	​	$	32,857	​	$	194,189	​	$	291,392	​	$	(43,085)	​	$	(15,437)	​	$	459,916
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Balance at December 31, 2024	​	$	32,857	​	$	194,607	​	$	297,857	​	$	(51,536)	​	$	(15,357)	​	$	458,428
Net income	​		—	​		—	​		16,303	​		—	​		—	​		16,303
Other comprehensive income	​	​	—	​		—	​		—	​		2,727	​		—	​	​	2,727
Cash dividends declared ($0.62 per share)	​	​	—	​		—	​		(9,660)	​		—	​		—	​	​	(9,660)
Net issuance (41,980 shares) to employee stock plans, including related tax effects	​		—	​		156	​		—	​		—	​		(300)	​		(144)
Reclassification of shares	​	​	(88)	​	​	(171)	​	​	—	​	​	—	​	​	259	​	​	—
Recognition of stock based compensation	​		—	​		1,206	​		—	​		—	​		—	​		1,206
Balance at June 30, 2025	​	$	32,769	​	$	195,798	​	$	304,500	​	$	(48,809)	​	$	(15,398)	​	$	468,860
Net income	​		—	​		—	​		8,855	​		—	​		—	​		8,855
Other comprehensive income	​		—	​		—	​		—	​		8,784	​		—	​		8,784
Cash dividends declared ($0.32 per share)	​		—	​		—	​		(5,369)	​		—	​		—	​		(5,369)
Common stock issued for acquisition of Guaranty Bancorp Inc. (Note 2)	​	​	2,701	​	​	36,516	​	​	—	​	​	—	​	​	—	​	​	39,217
Net issuance (16,346 shares) to employee stock plans, including related tax effects	​		—	​		(419)	​		—	​		—	​		95	​		(324)
Recognition of stock based compensation	​		—	​		932	​		—	​		—	​		—	​		932
Balance at September 30, 2025	​	$	35,470	​	$	232,827	​	$	307,986	​	$	(40,025)	​	$	(15,303)	​	$	520,955

The accompanying notes are an integral part of these consolidated financial statements.

7

Table of Contents

​

BAR HARBOR BANKSHARES AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

​

​

​	​	​	​	​	​	​
​	​	Nine Months Ended September 30,
(in thousands)		2025			2024
Cash flows from operating activities:				​	​
Net income		$	25,158	​	$	32,545
Adjustments to reconcile net income to net cash provided by operating activities:	​		​	​		​
Net change in loans held for sale	​	​	(4,310)	​	​	(917)
Provision for credit losses on loans	​		4,220	​		1,102
Provision for credit losses on available-for-sale debt securities	​	​	636	​	​	—
Net amortization of securities	​		73	​		1,312
Change in unamortized net loan costs and premiums	​		61	​		(656)
Premises and equipment depreciation	​		3,150	​		3,138
Stock-based compensation expense	​		2,138	​		2,095
Accretion of purchase accounting entries, net	​		(1,526)	​		—
Amortization of other intangibles	​		932	​		699
Income from cash surrender value of bank-owned life insurance policies	​		(1,881)	​		(1,714)
Loss (gain) on available-for-sale debt securities	​		4,901	​		(50)
Increase right-of-use lease assets	​	​	(145)	​	​	753
Increase in lease liabilities	​	​	208	​	​	(744)
Loss (gain) on premises and equipment, net	​		(113)	​		(263)
Net change in other assets and liabilities	​		(2,381)	​		1,813
Net cash provided by operating activities	​		31,121	​		39,113
​	​	​	​	​	​	​
Cash flows from investing activities:	​			​
Proceeds from maturities, calls and prepayments of available-for-sale debt securities	​		73,216	​		47,017
Proceeds from sales	​	​	40,987	​	​	—
Purchases of available-for-sale debt securities	​		(67,687)	​		(39,271)
Net change in loans	​		(21,277)	​		(82,251)
Purchase of Federal Home Loan Bank stock	​		(8,977)	​		(11,523)
Proceeds from redemption of Federal Home Loan Bank stock	​		17,024	​		16,711
Purchase of premises and equipment, net	​		(4,633)	​		(6,548)
Proceeds from sale of premises held for sale	​	​	597	​	​	1,479
Cash acquired, net of cash consideration paid	​	​	77,521	​	​	—
Net cash provided by (used in) investing activities	​		106,771	​		(74,386)
​	​	​	​	​	​	​
Cash flows from financing activities:	​			​
Net change in deposits	​		149,219	​		119,929
Net change in short-term borrowings	​	​	(192,097)	​	​	(84,829)
Repayments of long-term borrowings	​	​	(14,964)	​	​	(7)
Net change in subordinated debt	​	​	—	​	​	118
Net issuance to employee stock plans	​	​	(469)	​	​	(306)
Cash dividends paid on common stock	​		(15,029)	​		(13,254)
Net cash (used in) provided by financing activities	​		(73,340)	​		21,651
​	​	​	​	​	​	​
Net change in cash and cash equivalents	​		64,552	​		(13,622)
Cash and cash equivalents at beginning of year	​		72,162	​		94,842
Cash and cash equivalents at end of period	​	$	136,714	​	$	81,220
(Continued)

​

​

8

Table of Contents

​

​

​	​	​	​	​	​	​
​	​	Nine Months Ended September 30,
(in thousands)		2025			2024
Supplemental cash flow information:	​			​
Interest paid	​	$	55,805	​	$	53,997
Income taxes paid, net	​		6,842	​		7,079
Transfer of non-cash assets	​		1,000	​		—
Assets acquired in acquisition of Guaranty Bancorp, Inc., excluding cash received	​	​	580,531	​	​	—
Liabilities assumed in acquisition of Guaranty Bancorp, Inc.	​	​	641,177	​	​	—
Common stock issued for Acquisition of Guaranty Bancorp, Inc.	​		39,217	​		—

​

The accompanying notes are an integral part of these consolidated financial statements.

​

​

9

Table of Contents

BAR HARBOR BANKSHARES AND SUBSIDIARIES

CONDENSED NOTES TO UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

​

​

NOTE 1.          BASIS OF PRESENTATION

​

The consolidated financial statements (unaudited) (the “financial statements”) of Bar Harbor Bankshares and its subsidiaries (the “Company,” “we,” “our,” “us” or similar terms) have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Company is a Maine financial institution holding company for the purposes of the laws of the State of Maine, and as such is subject to the jurisdiction of the Superintendent of the Maine Bureau of Financial Institutions. These financial statements include our accounts, the accounts of our wholly owned subsidiary Bar Harbor Bank & Trust (the “Bank”) and the Bank’s consolidated subsidiaries. The results of operations of companies or assets acquired are included only from the dates of acquisition. All material wholly owned and majority owned subsidiaries are consolidated unless GAAP requires otherwise.

​

In addition, these interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X, and accordingly, certain information and footnote disclosures normally included in financial statements prepared according to GAAP have been omitted.

​

The results for any interim period are not necessarily indicative of results for the full year. The consolidated financial statements should be read in conjunction with the audited financial statements and note disclosures in the Form 10-K previously filed with the Securities and Exchange Commission (the “SEC”).  In management's opinion, all adjustments necessary for a fair statement are reflected in the interim periods presented.

​

Reclassifications: Whenever necessary, amounts in the consolidated financial statements are reclassified to conform to current presentation. The reclassifications had no impact on net income, total shareholders’ equity or total assets and liabilities in the Company’s consolidated financial statements.

Segment Reporting:  The Company’s reportable segment is determined by the Chief Executive Officer, who is designated as the chief operating decision maker (“CODM”), based upon information provided about the Company’s products and services offered, primarily banking operations. Operations of the Company are solely within community banking industry and include traditional community banking services, including lending activities, acceptance of demand, savings and time deposits, business services, investment management, trust and third-party brokerage services. These products and services have similar distribution methods, types of customers and regulatory responsibilities. An operating segment is defined as a component of a business for which separate financial information is available that is evaluated regularly by the chief operating decision-maker in deciding how to allocate resources and evaluate performance. Consolidated net income of the company is the primary performance metric utilized by the CODM. The CODM uses revenue streams to evaluate product pricing and significant expenses to assess performance and evaluate return on assets. The CODM uses consolidated net income to benchmark the Company against its competitors. The benchmarking analysis coupled with monitoring of budget to actual results are used in assessment performance and in establishing compensation. The majority of the Company’s revenue is from the business of banking. While the Company has assigned certain management responsibilities by business lines, the Company’s CODM monitors and evaluates financial performance on a Company-wide basis.  Accordingly, segment information is not presented in the Consolidated Financial Statements. Therefore, the Company has determined that its business is conducted in one reportable segment and represents the consolidated financial statements of the Company.

​

​

10

Table of Contents

Recent Accounting Pronouncements

​

The following table provides a brief description of recent accounting standards updates (“ASU”) that could have a material impact to the Company’s consolidated financial statements upon adoption:

​

​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​

​	​	​	​	​	​	​	​	​	​
Standard			Description			Required Date of Adoption			Effect on financial statements
Standards Not Yet Adopted							​	​	​
ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures	​	​	The amendments in this update require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income [or loss] by the applicable statutory income tax rate).	​	​	​ Annual periods beginning after December 15, 2024 and interim periods beginning after December 15, 2025	​	​	We are currently evaluating the impact on our consolidated financial statements.

​

​

NOTE 2.           ACQUISITION

​

Guaranty Bancorp, Inc.

​

On July 31, 2025, the Company completed its acquisition of Guaranty Bancorp, Inc. (“Guaranty”), the holding company of Woodsville Guaranty Savings Bank (“Woodsville”), a New Hampshire chartered bank with nine full-service branches located in New Hampshire. As a result of the transaction, Guaranty merged with and into Bar Harbor Bankshares, and Woodsville merged with and into Bar Harbor Bank & Trust. The acquisition expanded the Company’s presence in New Hampshire with the addition of 9 branches.

​

​

On the acquisition date, each share of Guaranty’s common stock was converted into the right to receive 1.85 shares of the Company’s common stock, with cash paid in lieu of any fractional shares. The total consideration paid by the Company was $39.2 million, based on the Company’s July 31, 2025 (acquisition date) closing price of $29.04. In total the Company issued 1.4 million shares of its common stock, representing 9% of the Company’s outstanding shares of common stock at the time of issuance.

​

The merger was accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations. Under this method of accounting, the respective assets acquired and liabilities assumed were recorded at their estimated fair values. The excess of consideration paid over the estimated fair value of the net assets acquired totaled $22.3 million and was recorded as goodwill. The results of Guaranty’s operations were included in the Company’s consolidated financial statements subsequent to the merger date. The fair values assigned to certain assets acquired and liabilities assumed are provisional and subject to change as additional information becomes available during the measurement period (not to exceed one year from the acquisition date). The provisional amounts primarily relate to the valuation of loans, identifiable intangible assets, and certain assumed liabilities such as deposits. Adjustments to the provisional fair values, if any, will be recorded as measurement period adjustments in the reporting period in which the adjustments are determined, with corresponding adjustments to goodwill.

​

11

Table of Contents

Consideration paid, and fair values of Guaranty’s assets acquired and liabilities assumed, along with the resulting goodwill, are summarized in the following table:

​

​	​	​	​	​	​	​	​	​	​	​	​
​		​	​		Fair Value		​		​	As Recorded
(in thousands, except shares)	​	As Acquired		​	Adjustments		​	​	​	at Acquisition
Consideration paid:	​	​	​	​	​	​	​	​	​	​	​
Bar Harbor Bankshares common stock issued to Guaranty Bancorp, Inc. stockholders (1,350,464 shares)		​	​	​	​	​	​	​	​	$	39,217
Cash paid for fractional shares	​	​	​	​	​	​	​	​	​	​	3
Total consideration paid	​	​	​	​	​	​	​	​	​	​	39,220
Recognized amounts of identifiable assets acquired and liabilities assumed, at fair value:	​	​	​	​	​	​	​	​	​	​	​
Cash and cash equivalents		$	77,524		$	—	​	​	​	$	77,524
Investments	​	​	116,728	​	​	(1,124)	​	(a)	​	​	115,604
Federal Home Loan Bank stock	​	​	4,370	​	​	—	​	​	​	​	4,370
Loans	​	​	446,990	​	​	(33,582)	​	(b)	​	​	413,408
Premises and equipment	​	​	6,522	​	​	112	​	(c)	​	​	6,634
Core deposit intangible	​	​	—	​	​	13,983	​	(d)	​	​	13,983
Bank-owned life insurance	​	​	11,816	​	​	—	​	​	​	​	11,816
Deferred taxes, net	​	​	6,377	​	​	4,988	​	(e)	​	​	11,365
Other assets	​	​	3,250	​	​	101	​	​	​	​	3,351
Deposits	​	​	(530,871)	​	​	(418)	​	(f)	​	​	(531,289)
Borrowings	​	​	(109,895)	​	​	673	​	(g)	​	​	(109,222)
Other liabilities	​	​	(1,053)	​	​	387	​	​	​	​	(666)
Total identifiable net assets		$	31,758		$	(14,880)	​	​	​	$	16,878
​	​	​	​	​	​	​	​	​	​	​	​
Goodwill		​	​	​	​	​	​	​	​	$	22,342

​

Explanation of Certain Fair Value Adjustments

​

a. Represents the write down of the book value of investments to their estimated fair value at the date of acquisition.

b. Represents the write down of the book value of loans to their estimated fair value. The acquired loan portfolio was divided into two segments: (1) purchase credit deteriorated (PCD) loans and (2) non-PCD loans. For the non-PCD portfolio the fair value was calculated using a discounted cash flow analysis. This analysis took into consideration the contractual terms of the loans and assumptions related to the credit risk, expected lifetime losses, discount rates, prepayment assumptions and other liquidity considerations to estimate projected cash flows. The fair value of PCD loans were calculated on an individual basis based on underlying collateral values and other factors. The adjustment also includes the reversal of Woodsville’s historic allowance for loan losses.

c. Represents the adjustment of the book value of buildings and equipment, to their estimated fair value based on appraisals and other methods. The adjustments will be depreciated over the estimated economic lives of the assets.

d. Represents the value of the core deposit base assumed in the acquisition. The core deposit asset was recorded as an identifiable intangible asset and will be amortized using a straight-line method over the average life of the deposit base, which is estimated to be ten years.

e. Represents net deferred tax assets resulting from the fair value adjustments related to the acquired assets and liabilities, identifiable intangibles, and other purchase accounting adjustments.

f. Represents adjustments made to time deposits due to the weighted average contractual interest rates compared to the cost of similar funding at the time of acquisition. The amount will be amortized using a straight-line method over the weighted average maturity bucket.

g. Represents the present value difference between cash flows of current debt instruments using contractual rates and those of similar borrowings on the date of acquisition.  The adjustment will be amortized over the remaining contractual life.

​

12

Table of Contents

Direct acquisition and integration costs were expensed as incurred, and totaled $5.0 million and $6.4 million during the three and nine months ending September 30, 2025.

​

Goodwill, which is not amortized for financial reporting purposes, is not deductible for tax purposes.

​

The acquired loan portfolio was segmented into two segments: (1) PCD loans and (2) non-PCD loans.

​

PCD Loans

PCD loans were recorded at their amortized cost, less an allowance for credit losses on the Acquisition Date. There is no provision for credit loss expense recognized on PCD loans because the initial allowance is established by grossing-up the amortized cost of the PCD loans. The remaining difference between the net amortized cost basis and the allowance for credit losses and the fair value allocated to the loans on the date of acquisition is recognized as a non-credit-related discount that will be accreted into interest income over the life of the loans.

​

Information about acquired purchase deteriorated loans is as follows:

​

​	​	​	​
(in thousands)		As of August 1, 2025
Unpaid principal balance of acquired PCD loans	​	$	11,222
Non-credit related discount	​		(713)
Allowance for credit losses on PCD loans	​		(1,622)
Fair value of acquired PCD loans	​		8,887

​

Pro Forma Information (unaudited)

​

The following table presents selected unaudited pro forma financial information reflecting the acquisition of Guaranty assuming the acquisition was completed as of January 1, 2024. The unaudited pro forma financial information includes adjustments for scheduled amortization and accretion of fair value adjustments recorded at the acquisition. The unaudited pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the combined financial results of the Company and Guaranty had the transaction actually been completed at the beginning of the periods presented, nor does it indicate future results for any other interim or full-year period. Information for the three and nine months ended September 30, 2025 reflects the actual results of the Company excluding merger costs, provision for credit losses on non-PCD loans, and the benefit from a deferred tax rate change.

​

Information for the three and nine months ended September 30, 2024, includes Guaranty’s calculated results for the three and nine months ended September 30, 2024 and reflect adjustments related to the amortization or accretion of purchase accounting fair value adjustments, merger and acquisition costs, provision for credit losses on non-PCD loans, and the benefit from a deferred tax rate change. The unaudited pro forma information below does not reflect management’s estimate of any revenue-enhancing opportunities or anticipated cost-savings.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

Nine Months Ended

​

​

September 30,

​

September 30,

(in thousands, except earnings per share)

​

2025

​

2024

​

2025

​

2024

Total revenue(1)

​

$

47,588

​

$

46,068

$

132,997

​

$

131,951

Net income

​

18,074

​

14,925

38,784

​

38,545

​

(1) Total revenue is defined as the sum of net interest income plus non-interest income.

​

​

​

13

Table of Contents

NOTE 3.           SECURITIES AVAILABLE FOR SALE

​

The following is a summary of available-for-sale debt securities (“AFS”):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Gross

​

Gross

​

​

​

​

​

​

​

​

​

​

​

Unrealized

​

Unrealized

​

​

​

​

​

​

(in thousands)

Amortized Cost

Gains

Losses

Fair Value

​

Allowance

September 30, 2025

​

​

​

​

​

​

​

Debt securities:

​

​

​

​

​

​

​

Obligations of US Government-sponsored enterprises

​

$

1,139

​

$

—

​

$

(15)

​

$

1,124

​

$

—

Mortgage-backed securities and collateralized mortgage obligations:

​

​

​

​

​

​

​

US Government-sponsored enterprises

​

​

276,037

​

​

2,680

​

​

(23,778)

​

​

254,939

​

​

—

US Government agency

​

151,116

​

309

​

(10,134)

​

141,291

​

​

—

Private label

​

11,986

​

9

​

(869)

​

11,126

​

​

—

Obligations of states and political subdivisions thereof

​

120,775

​

3

​

(18,155)

​

102,623

​

​

—

Corporate bonds

​

89,738

​

222

​

(3,253)

​

86,707

​

​

—

Total available-for-sale debt securities

​

$

650,791

​

$

3,223

​

$

(56,204)

​

$

597,810

​

$

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Gross

​

Gross

​

​

​

​

​

​

​

​

​

​

​

Unrealized

​

Unrealized

​

​

​

​

​

​

(in thousands)

Amortized Cost

Gains

Losses

Fair Value

​

Allowance

December 31, 2024

​

​

​

​

​

​

​

Debt securities:

​

​

​

​

​

​

​

Obligations of US Government-sponsored enterprises

​

$

1,344

​

$

—

​

$

(26)

​

$

1,318

​

$

—

Mortgage-backed securities and collateralized mortgage obligations:

​

​

​

​

​

​

​

US Government-sponsored enterprises

​

​

208,818

​

​

22

​

​

(31,524)

​

​

177,316

​

​

—

US Government agency

​

115,177

​

53

​

(11,314)

​

103,916

​

​

—

Private label

​

40,633

​

25

​

(1,094)

​

39,564

​

​

—

Obligations of states and political subdivisions thereof

​

116,421

​

5,564

​

(16,533)

​

105,452

​

​

—

Corporate bonds

​

100,923

​

290

​

(7,761)

​

93,452

​

​

(568)

Total available-for-sale debt securities

​

$

583,316

​

$

5,954

​

$

(68,252)

​

$

521,018

​

$

(568)

​

Credit Quality Information

We monitor the credit quality of available-for-sale debt securities through credit ratings from various rating agencies and substantial price changes. In an effort to make informed decisions, we utilize credit ratings that express opinions about the credit quality of a security. Securities are triggered for further review in the quarter if the security has significant fluctuations in ratings, significant pricing changes, or drops below investment-grade. For securities without credit ratings, we utilize other financial information indicating the financial health of the underlying municipality, agency, or organization associated with the underlying security.

​

Management recorded an allowance for credit losses on two corporate notes where there was a change in future estimated cash flows during the year ended December 31, 2024. A discounted cash flow approach was used to determine the amount of the allowance. The cash flows expected to be collected, after considering expected prepayments, are discounted at the original effective interest rate. The amount of the allowance is limited to the difference between the amortized cost basis of the security and its estimated fair value. As of September 30, 2025 we have one nonaccrual corporate bond of $8.0

14

Table of Contents

million written down by $5.8 million, of which $4.6 million is included in losses on available-for-sale debt securities. The bond previously carried a $1.2 million allowance, which was charged-off through the allowance for credit losses on securities during the period ended June 30, 2025. At December 31, 2024 we had $9.0 million of corporate bonds that we allocated $568 thousand in related allowance for credit losses. In the first quarter of 2025, a $1.0 million nonaccrual security matured and was transferred to a financing receivable non-cash asset.

​

The table below presents a rollforward by major security type for the quarter and year ended September 30, 2025 of the allowance for credit losses on available-for-sale debt securities held at period end:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended September 30,

​

​

Nine Months Ended September 30,

​

​

​

2025

​

​

2025

(in thousands)

​

​

Corporate Bonds

​

​

Total

​

​

Corporate Bonds

​

​

Total

Beginning Balance

​

$

—

​

$

—

​

$

568

​

$

568

Provision for credit losses on available-for-sale debt securities

​

​

—

​

​

—

​

​

636

​

​

636

Charge-offs

​

​

—

​

​

—

​

​

(1,204)

​

​

(1,204)

Ending Balance

​

$

—

​

$

—

​

$

—

​

$

—

​

As of September 30, 2024, we carried no allowance on available-for-sale debt securities in accordance with ASC 326, Measurement of Credit Losses on Financial Instruments.

​

The amortized cost and estimated fair value of available-for-sale debt securities segregated by contractual maturity at September 30, 2025 are presented below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Mortgage-backed securities and collateralized mortgage obligations are shown in total, as their maturities are highly variable.

​

​	​	​	​	​	​	​
​	​	Available for sale
(in thousands)		Amortized Cost			Fair Value
Within 1 year		$	9,986	​	$	9,832
Over 1 year to 5 years	​		46,362	​		45,270
Over 5 years to 10 years	​		41,691	​		39,470
Over 10 years	​		113,613	​		95,882
Total bonds and obligations	​		211,652	​		190,454
Mortgage-backed securities and collateralized mortgage obligations	​		439,139	​		407,356
Total available-for-sale debt securities	​	$	650,791	​	$	597,810

​

​

The proceeds from sales, calls and maturities of available-for-sale debt securities, gross realized gains and losses for the three and nine months ended September 30, 2025 and 2024 are as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Nine Months Ended

​

​

September 30,

​

September 30,

(in thousands)

2025

2024

2025

2024

Proceeds from sales

​

$

40,987

​

$

—

​

$

40,987

​

$

—

Proceeds from calls/paydowns

​

31,559

​

10,350

​

​

73,216

​

​

44,006

Proceeds from maturities

​

​

—

​

​

11

​

​

—

​

​

3,011

Gross realized gains

​

​

247

​

​

—

​

​

247

​

​

50

Gross realized losses

​

​

6

​

​

—

​

​

6

​

​

—

Gross impairment losses

​

​

178

​

​

—

​

​

4,571

​

​

—

​

Accrued interest receivable on available-for-sale debt securities totaled $3.6 million at September 30, 2025 and $3.3 million at December 31, 2024, which is reported in other assets on the consolidated balance sheets.

15

Table of Contents

The following tables summarize available-for-sale debt securities in an unrealized loss position for which an allowance for credit losses has not been recorded at September 30, 2025 and December 31, 2024, aggregated by major security type and length of time in continuous unrealized loss position:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Less Than Twelve Months

​

Over Twelve Months

​

Total

​

​

Gross

​

​

Gross

​

​

Gross

​

​

​

​

Unrealized

​

Fair

​

Unrealized

​

Fair

​

Unrealized

​

Fair

(in thousands)

Losses

Value

Losses

Value

Losses

Value

September 30, 2025

​

​

​

​

​

​

Debt securities:

​

​

​

​

​

​

Obligations of US Government-sponsored enterprises

​

$

1

​

$

692

​

$

14

​

$

432

​

$

15

​

$

1,124

Mortgage-backed securities and collateralized mortgage obligations:

​

​

​

​

​

​

US Government-sponsored enterprises

​

​

13

​

​

1,242

​

​

23,765

​

​

157,795

​

​

23,778

​

​

159,037

US Government agency

​

1,017

​

35,579

​

9,117

​

70,735

​

10,134

​

106,314

Private label

​

—

​

—

​

869

​

9,102

​

869

​

9,102

Obligations of states and political subdivisions thereof

​

11

​

1,290

​

18,144

​

96,646

​

18,155

​

97,936

Corporate bonds

​

134

​

13,858

​

3,119

​

58,381

​

3,253

​

72,239

Total available-for-sale debt securities

​

$

1,176

​

$

52,661

​

$

55,028

​

$

393,091

​

$

56,204

​

$

445,752

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Less Than Twelve Months

​

Over Twelve Months

​

Total

​

Gross

​

​

Gross

​

​

Gross

​

​

​

​

Unrealized

​

Fair

​

Unrealized

​

Fair

​

Unrealized

​

Fair

(in thousands)

​

Losses

​

Value

​

Losses

​

Value

​

Losses

​

Value

December 31, 2024

​

​

​

​

​

​

Debt securities:

​

​

​

​

​

​

Obligations of US Government-sponsored enterprises

​

$

2

​

$

707

​

$

24

​

$

611

​

$

26

​

$

1,318

Mortgage-backed securities and collateralized mortgage obligations:

​

​

​

​

​

​

US Government-sponsored enterprises

​

​

109

​

​

8,003

​

​

31,415

​

​

165,116

​

​

31,524

​

​

173,119

US Government agency

​

817

​

35,174

​

10,497

​

60,789

​

11,314

​

95,963

Private label

​

1

​

948

​

1,093

​

19,839

​

1,094

​

20,787

Obligations of states and political subdivisions thereof

​

115

​

4,962

​

16,418

​

99,109

​

16,533

​

104,071

Corporate bonds

​

26

​

2,438

​

4,495

​

75,002

​

4,521

​

77,440

Total available-for-sale debt securities

​

$

1,070

​

$

52,232

​

$

63,942

​

$

420,466

​

$

65,012

​

$

472,698

​

The following summarizes, by investment security type, the impact of performing securities in an unrealized loss position at September 30, 2025:

​

Obligations of US Government-sponsored enterprises

​

7 out of the total 7 securities in our portfolio of AFS obligations of US Government-sponsored enterprises were in unrealized loss positions. Aggregate unrealized losses represented 1.33% of the amortized cost of securities in unrealized loss positions. The US Small Business Administration guarantees the contractual cash flows of all of our obligations of

16

Table of Contents

US Government-sponsored enterprises. The securities are investment grade rated and there were no material underlying credit downgrades during the quarter.

​

US Government-sponsored enterprises

​

370 out of the total 511 securities in our portfolio of AFS US Government-sponsored enterprises were in unrealized loss positions. Aggregate unrealized losses represented 13.01% of the amortized cost of securities in unrealized loss positions. The Federal National Mortgage Association and Federal Home Loan Mortgage Corporation guarantee the contractual cash flows of all of our US Government-sponsored enterprises. The securities are investment grade rated and there were no material underlying credit downgrades during the quarter.

​

US Government agency

​

127 out of the total 168 securities in our portfolio of AFS US Government agency securities were in unrealized loss positions. Aggregate unrealized losses represented 8.70% of the amortized cost of securities in unrealized loss positions. The Government National Mortgage Association guarantees the contractual cash flows of all of our US Government agency securities. The securities are investment grade rated and there were no material underlying credit downgrades during the quarter.

​

Private label

​

13 of the total 17 securities in our portfolio of AFS private label mortgage-backed securities were in unrealized loss positions. Aggregate unrealized losses represented 8.71% of the amortized cost of securities in unrealized loss positions. We expect to receive all of the future contractual cash flows related to the amortized cost on these securities.

​

Obligations of states and political subdivisions thereof

​

54 of the total 65 securities in our portfolio of AFS municipal bonds and obligations were in unrealized loss positions. Aggregate unrealized losses represented 15.64% of the amortized cost of securities in unrealized loss positions. We continually monitor the municipal bond sector of the market carefully and periodically evaluate the appropriate level of exposure to the market. At this time, we believe (i) the bonds in this portfolio carry minimal risk of default and (ii) we are appropriately compensated for the risk. There were no material underlying credit downgrades during the quarter.

​

Corporate bonds

​

23 out of the total 32 securities in our portfolio of AFS corporate bonds were in an unrealized loss position. The aggregate unrealized loss represents 4.31% of the amortized cost of bonds in unrealized loss positions. We review the financial strength of all of these bonds, and we have concluded that the amortized cost remains supported by the expected future cash flows of these securities. The most recent review includes all bond issuers and their current credit ratings, financial performance and capitalization.

​

A summary of securities pledged as collateral for certain deposits and borrowing arrangements for the months ended September 30, 2025 and December 31, 2024 is as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

September 30, 2025

​

December 31, 2024

​

Carrying

Estimated

Carrying

Estimated

(in thousands)

​

Value

​

Fair Value

​

Value

​

Fair Value

Securities pledged for deposits

​

$

16,650

​

$

14,757

​

$

18,483

​

$

15,821

Securities pledged for repurchase agreements

​

15,505

​

13,463

​

16,764

​

14,020

Securities pledged for borrowings (1)

​

49,886

​

43,452

​

35,819

​

30,634

Total securities pledged

​

$

82,041

​

$

71,672

​

$

71,066

​

$

60,475

​

(1) The Bank pledged securities as collateral for certain borrowing arrangements with the Federal Home Loan Bank of Boston and the Federal Reserve Bank of Boston (the “Reserve Bank”).

​

17

Table of Contents

NOTE 4.           LOANS AND ALLOWANCE FOR CREDIT LOSSES

​

We evaluate risk characteristics of loans based on regulatory call report code with segmentation based on the underlying collateral for certain loan types. The following is a summary of total loans based on regulatory call report code segmentation for certain loan types:

​

​	​	​	​	​	​	​
​	​	September 30,		​	December 31,
(in thousands)		2025			2024
Commercial construction	​	$	169,928	​	$	131,617
Commercial real estate owner occupied	​		342,237	​		302,074
Commercial real estate non-owner occupied	​		1,473,136	​		1,358,903
Tax exempt and other	​		42,395	​		44,275
Commercial and industrial	​		340,907	​		319,766
Residential real estate	​		1,089,550	​		888,251
Home equity	​		110,988	​		94,141
Consumer other	​		14,575	​		8,069
Total loans	​		3,583,716	​		3,147,096
Allowance for credit losses	​		33,940	​		28,744
Net loans	​	$	3,549,776	​	$	3,118,352

​

Total unamortized net costs and premiums included in loan totals were as follows:

​

​	​	​	​	​	​	​
​	​	September 30,		​	December 31,
(in thousands)		2025			2024
Net unamortized loan origination costs	​	$	2,043	​	$	1,982
Net unamortized fair value discount on acquired loans	​		(35,386)	​		(2,442)
Total	​	$	(33,343)	​	$	(460)

​

We exclude accrued interest receivable from the amortized cost basis of loans disclosed throughout this footnote. As of September 30, 2025 and December 31, 2024, accrued interest receivable for loans totaled $12.2 million and $10.5 million,  respectively, and is included in the “other assets” line item on the consolidated balance sheets.

​

Characteristics of each loan portfolio segment, including acquired loans, are as follows:

​

Commercial construction - Loans in this segment primarily include raw land, land development and construction of commercial and multifamily residential properties.  Collateral values are determined based upon appraisals and evaluations of the completed structure in accordance with established policy guidelines. Maximum loan-to-value ratios at origination are governed by established policy guidelines that are more restrictive than on stabilized commercial real estate transactions. Construction loans are primarily paid by the cash flow generated from the completed structure, such as operating leases, rents, or other operating cash flows from the borrower.

​

Commercial real estate owner occupied and non-owner occupied - Loans in these segments are primarily owner-occupied or income-producing properties. Loans to real estate investment trusts and unsecured loans to developers that closely correlate to the inherent risk in commercial real estate markets are also included.  Commercial real estate loans are typically underwritten with amortizing payment structures. Collateral values are determined based upon appraisals and evaluations in accordance with established policy guidelines. Maximum loan-to-value ratios at origination are governed by established policy and regulatory guidelines.  Commercial real estate loans are primarily paid by the cash flow generated from the real property, such as operating leases, rents, or other operating cash flows from the borrower.

​

Tax Exempt - Loans in this segment primarily include loans to various state and municipal government entities. Loans made to these borrowers may provide us with tax-exempt income. While governed and underwritten similar to commercial loans they do have unique requirements based on established polices. Almost all state and municipal loans are considered a general obligation of the issuing entity. Given the size of many municipal borrowers, borrowings are normally not rated by major rating agencies.

18

Table of Contents

Commercial and industrial loans - Loans consist of revolving and term loan obligations extended to businesses and corporate enterprises for the purpose of financing working capital and/or capital investment in this segment.  Generally, loans are secured by assets of the business such as accounts receivable, inventory, marketable securities, other liquid collateral, equipment and other business assets. Some loans in this category may be unsecured or guaranteed by government agencies such as the US Small Business Administration.  Loans are primarily paid by the operating cash flow of the borrower.

​

Residential real estate - All loans in this segment are collateralized by one-to-four family homes.  Residential real estate loans held in the loan portfolio are made to borrowers who demonstrate the ability to make scheduled payments with full consideration to various underwriting factors. Borrower qualifications include favorable credit history combined with supportive income requirements and combined loan-to-value ratios within established policy guidelines.

​

Home equity - All loans and lines of credit are made to qualified individuals and are secured by senior or junior mortgage liens on owner-occupied one-to-four-family homes, condominiums, or vacation homes. The home equity loan has a fixed rate and is billed as equal payments comprised of principal and interest. The home equity line of credit has a variable rate and is billed as interest-only payments during the draw period. At the end of the draw period, the home equity line of credit is billed as a percentage of the principal balance plus all accrued interest. Borrower qualifications include favorable credit history combined with supportive income requirements and combined loan-to-value ratios within established policy guidelines.

​

Consumer other - Loans in this segment include personal lines of credit and amortizing loans made to qualified individuals for various purposes such as auto loans, recreational equipment, overdraft protection or other consumer loans. Borrower qualifications include favorable credit history combined with supportive income and collateral requirements within established policy guidelines, as applicable.

​

Allowance for Credit Losses

The Allowance for Credit Losses (“ACL”) is comprised of the allowance for loan losses, the allowance for securities losses and the allowance for unfunded commitments which is accounted for as a separate liability in other liabilities on our consolidated balance sheets. The level of the ACL represents management’s estimate of expected credit losses over the expected life of the loans at the consolidated balance sheet date.

​

The ACL is a valuation account that is deducted from the amortized cost basis of loans to present the net amount expected to be collected on the loans. Loans, or portions thereof, are charged off against the allowance when they are deemed uncollectible. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged off.  The ACL is comprised of reserves measured on a collective (pool) basis based on a lifetime loss-rate model when similar risk characteristics exist. Loans that do not share risk characteristics are evaluated on an individual basis, generally larger non-accruing commercial loans.

​

​

​

​

​

​

19

Table of Contents

The activity in the ACL for the periods ended are as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

At or for the Three Months Ended September 30, 2025

​

​

Balance at

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Beginning of

​

​

​

​

​

​

​

Acquired PCD

​

Provision/

​

Balance at

(in thousands)

Period

​

Charge Offs

Recoveries

Loans(1)

​

(Credit)

​

End of Period

Commercial construction

​

$

2,032

​

$

—

​

$

—

​

$

—

​

$

490

​

$

2,522

Commercial real estate owner occupied

​

2,823

​

—

​

—

​

76

​

292

​

3,191

Commercial real estate non-owner occupied

​

10,980

​

—

​

—

​

301

​

1,418

​

12,699

Tax exempt

​

110

​

—

​

—

​

—

​

18

​

128

Commercial and industrial

​

5,664

​

(236)

​

12

​

1,174

​

(329)

​

6,285

Residential real estate

​

6,406

​

—

​

18

​

53

​

1,547

​

8,024

Home equity

​

786

​

—

​

2

​

2

​

129

​

919

Consumer other

​

84

​

(117)

​

5

​

16

​

184

​

172

Total

​

$

28,885

​

$

(353)

​

$

37

​

$

1,622

​

$

3,749

​

$

33,940

(1) Upon acquisition of Woodsville the Company designated certain acquired loans with an unpaid principal balance of $11.2 million as PCD loans. Refer to Note 2 for further discussion of the Company's designation of PCD loans.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

At or for the Nine Months Ended September 30, 2025

​

​

Balance at

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Beginning of

​

​

​

​

​

​

Acquired PCD

​

Provision/

​

Balance at

(in thousands)

Period

​

Charge Offs

Recoveries

Loans(1)

​

(Credit)

​

End of Period

Commercial construction

​

$

2,096

​

$

—

​

$

—

​

$

—

​

$

426

​

$

2,522

Commercial real estate owner occupied

​

2,794

​

—

​

—

​

76

​

321

​

3,191

Commercial real estate non-owner occupied

​

11,104

​

—

​

—

​

301

​

1,294

​

12,699

Tax exempt and other

​

128

​

—

​

—

​

—

​

—

​

128

Commercial and industrial

​

5,064

​

(480)

​

15

​

1,174

​

512

​

6,285

Residential real estate

​

6,732

​

—

​

28

​

53

​

1,211

​

8,024

Home equity

​

741

​

—

​

9

​

2

​

167

​

919

Consumer other

​

85

​

(223)

​

5

​

16

​

289

​

172

Total

​

$

28,744

​

$

(703)

​

$

57

​

$

1,622

​

$

4,220

​

$

33,940

(1) Upon acquisition of Woodsville the Company designated certain acquired loans with an unpaid principal balance of $11.2 million as PCD loans. Refer to Note 2 for further discussion of the Company's designation of PCD loans.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

At or for the Three Months Ended September 30, 2024

​

​

Balance at

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Beginning of

​

​

​

​

​

​

Provision/

​

Balance at

(in thousands)

Period

​

Charge Offs

Recoveries

(Credit)

​

End of Period

Commercial construction

​

$

4,217

​

$

—

​

$

—

​

$

(1,464)

​

$

2,753

Commercial real estate owner occupied

​

2,620

​

—

​

—

​

314

​

2,934

Commercial real estate non-owner occupied

​

9,574

​

—

​

—

​

965

​

10,539

Tax exempt

​

110

​

—

​

—

​

7

​

117

Commercial and industrial

​

3,982

​

(9)

​

1

​

217

​

4,191

Residential real estate

​

7,516

​

—

​

5

​

51

​

7,572

Home equity

​

763

​

—

​

3

​

80

​

846

Consumer other

​

73

​

(89)

​

29

​

58

​

71

Total

​

$

28,855

​

$

(98)

​

$

38

​

$

228

​

$

29,023

​

​

20

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

At or for the Nine Months Ended September 30, 2024

​

​

Balance at

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Beginning of

​

​

​

​

​

​

​

Provision/

​

Balance at

(in thousands)

Period

​

Charge Offs

Recoveries

(Credit)

​

End of Period

Commercial construction

​

$

4,261

​

$

—

​

$

—

​

$

(1,508)

​

$

2,753

Commercial real estate owner occupied

​

2,863

​

(3)

​

—

​

74

​

2,934

Commercial real estate non-owner occupied

​

9,443

​

—

​

—

​

1,096

​

10,539

Tax exempt and other

​

119

​

—

​

—

​

(2)

​

117

Commercial and industrial

​

3,259

​

(91)

​

17

​

1,006

​

4,191

Residential real estate

​

7,352

​

—

​

13

​

207

​

7,572

Home equity

​

767

​

—

​

8

​

71

​

846

Consumer other

​

78

​

(223)

​

58

​

158

​

71

Total

​

$

28,142

​

$

(317)

​

$

96

​

$

1,102

​

$

29,023

​

Unfunded Commitments

​

The ACL on unfunded commitments is recognized as a liability (other liabilities on the consolidated balance sheets), with adjustments to the reserve recognized in other non-interest expense in the consolidated statements of income. The activity in the ACL on unfunded commitments for the periods ended was as follows:

​

​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Three Months Ended September 30,					​	Nine Months Ended September 30,
(in thousands)	​	2025			2024		​	2025			2024
Beginning Balance	​	$	2,975	​	$	3,640	​	$	3,049	​	$	3,825
Provision for credit losses	​		145	​		35	​		71	​		(150)
Ending Balance	​	$	3,120	​	$	3,675	​	$	3,120	​	$	3,675

​

Loan Origination/Risk Management: We have certain lending policies and procedures in place designed to maximize loan income within an acceptable level of risk. Our Board of Directors reviews and approves these policies and procedures on a regular basis. A reporting system supplements the review process by providing management and the Board of Directors with frequent reports related to loan production, loan quality, and concentration of credit, loan delinquencies, non-performing loans and potential problem loans. We seek to diversify the loan portfolio as a means of managing risk associated with fluctuations in economic conditions.

​

Credit Quality Indicators:  In monitoring the credit quality of the portfolio, management applies a credit quality indicator and uses an internal risk rating system to categorize commercial loans. These credit quality indicators range from one through nine, with a higher number correlating to increasing risk of loss. Consistent with regulatory guidelines, the Company provides for the classification of loans which are considered to be of lesser quality as special mention, substandard, doubtful, or loss (i.e. risk-rated 6, 7, 8 and 9, respectively). Residential, home equity and consumer loans are classified as performing or non-performing based on payment performance.

​

The following are the definitions of our credit quality indicators:

​

Pass: Loans we consider in the commercial portfolio segments that are not adversely rated, are contractually current as to principal and interest, and are otherwise in compliance with the contractual terms of the loan agreement. Management believes there is a low risk of loss related to these loans considered pass-rated.

​

Special Mention: Loans considered having some potential weaknesses, but are deemed to not carry levels of risk inherent in one of the subsequent categories, are designated as special mention. A special mention loan has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution’s credit position at some future date. This might include loans which may require a higher level of supervision or internal reporting because of: (i) declining industry trends; (ii) increasing reliance on secondary sources of repayment; (iii) the poor condition of or lack of control over collateral; or (iv) failure to obtain proper documentation or any other deviations from prudent lending practices. Economic or market conditions which may, in the future, affect the obligor may warrant special mention of the asset. Loans for which an

21

Table of Contents

adverse trend in the borrower's operations or an imbalanced position in the balance sheet which has not reached a point where the liquidation is jeopardized may be included in this classification. Special mention loans are not adversely classified and do not expose us to sufficient risks to warrant classification.

​

Substandard: Loans we consider as substandard are inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any. Substandard loans have a well-defined weakness that jeopardizes liquidation of the debt. Substandard loans include those loans where there is the distinct possibility of some loss of principal, if the deficiencies are not corrected.

​

Doubtful: Loans we consider as doubtful have all of the weaknesses inherent in those loans that are classified as substandard. These loans have the added characteristic of a well-defined weakness which is inadequately protected by the current sound worth and paying capacity of borrower or of the collateral pledged, if any, and calls into question the collectability of the full balance of the loan. The possibility of loss is high but because of certain important and reasonably specific pending factors, which may work to the advantage and strengthening of the loan, its classification as loss is deferred until its more exact status is determined. Pending factors include proposed merger, acquisition, or liquidation procedures, capital injection, perfecting liens on additional collateral and refinancing plans. The entire amount of the loan might not be classified as doubtful when collection of a specific portion appears highly probable. Loans are generally not classified doubtful for an extended period of time (i.e., over a year).

​

Loss: Loans we consider as losses are those considered uncollectible and of such little value that their continuance as an asset is not warranted and the uncollectible amounts are charged-off. This classification does not mean the asset has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this worthless asset even though partial recovery may be effected in the future. Losses are taken in the period in which they are determined to be uncollectible.

​

22

Table of Contents

The following table presents our loans by year of origination, loan segmentation and risk indicator as of September 30, 2025:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

(in thousands)

​

2025

​

2024

​

2023

​

2022

​

2021

​

Prior

​

Total

Commercial construction

​

​

​

​

​

​

​

Risk rating:

​

​

​

​

​

​

​

Pass

​

$

22,509

​

$

57,785

​

$

38,590

​

$

29,636

​

$

2,408

​

$

4,567

​

$

155,495

Special mention

​

—

​

14,433

​

—

​

—

​

—

​

—

​

14,433

Substandard

​

—

​

—

​

—

​

—

​

—

​

—

​

—

Total

​

$

22,509

​

$

72,218

​

$

38,590

​

$

29,636

​

$

2,408

​

$

4,567

​

$

169,928

Current period gross write-offs

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial real estate owner occupied

​

​

​

​

​

​

​

Risk rating:

​

​

​

​

​

​

​

Pass

​

$

33,299

​

$

36,999

​

$

44,291

​

$

71,647

​

$

31,702

​

$

116,926

​

$

334,864

Special mention

​

—

​

—

​

986

​

601

​

700

​

2,608

​

4,895

Substandard

​

—

​

—

​

—

​

—

​

—

​

2,421

​

2,421

Doubtful

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

57

​

​

57

Total

​

$

33,299

​

$

36,999

​

$

45,277

​

$

72,248

​

$

32,402

​

$

122,012

​

$

342,237

Current period gross write-offs

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial real estate non-owner occupied

​

​

​

​

​

​

​

Risk rating:

​

​

​

​

​

​

​

Pass

​

$

174,427

​

$

113,724

​

$

71,328

​

$

352,343

​

$

198,225

​

$

417,413

​

$

1,327,460

Special mention

​

—

​

25,371

​

—

​

32,129

​

33,515

​

18,970

​

109,985

Substandard

​

—

​

—

​

7,625

​

—

​

—

​

28,066

​

35,691

Doubtful

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Total

​

$

174,427

​

$

139,095

​

$

78,953

​

$

384,472

​

$

231,740

​

$

464,449

​

$

1,473,136

Current period gross write-offs

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Tax exempt and other

​

​

​

​

​

​

​

Risk rating:

​

​

​

​

​

​

​

Pass

​

$

6,200

​

$

3,154

​

$

4,629

​

$

6,030

​

$

918

​

$

21,464

​

$

42,395

Special mention

​

—

​

—

​

—

​

—

​

—

​

—

​

—

Substandard

​

—

​

—

​

—

​

—

​

—

​

—

​

—

Total

​

$

6,200

​

$

3,154

​

$

4,629

​

$

6,030

​

$

918

​

$

21,464

​

$

42,395

Current period gross write-offs

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial and industrial

​

​

​

​

​

​

​

Risk rating:

​

​

​

​

​

​

​

Pass

​

$

54,183

​

$

70,205

​

$

50,634

​

$

48,501

​

$

10,079

​

$

95,663

​

$

329,265

Special mention

​

129

​

109

​

1,582

​

1,962

​

668

​

4,315

​

8,765

Substandard

​

71

​

613

​

61

​

536

​

234

​

973

​

2,488

Doubtful

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

389

​

​

389

Total

​

$

54,383

​

$

70,927

​

$

52,277

​

$

50,999

​

$

10,981

​

$

101,340

​

$

340,907

Current period gross write-offs

​

​

—

​

​

—

​

​

—

​

​

—

​

​

19

​

​

461

​

​

480

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Residential real estate

​

​

​

​

​

​

​

Performing

​

$

34,213

​

$

52,472

​

$

79,655

​

$

216,692

​

$

192,766

​

$

507,018

​

$

1,082,816

Nonperforming

​

—

​

—

​

1,103

​

1,305

​

1,025

​

3,301

​

6,734

Total

​

$

34,213

​

$

52,472

​

$

80,758

​

$

217,997

​

$

193,791

​

$

510,319

​

$

1,089,550

Current period gross write-offs

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Home equity

​

​

​

​

​

​

​

Performing

​

$

14,553

​

$

21,159

​

$

16,295

​

$

13,691

​

$

6,675

​

$

37,574

​

$

109,947

Nonperforming

​

—

​

—

​

124

​

232

​

50

​

635

​

1,041

Total

​

$

14,553

​

$

21,159

​

$

16,419

​

$

13,923

​

$

6,725

​

$

38,209

​

$

110,988

Current period gross write-offs

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Consumer other

​

​

​

​

​

​

​

Performing

​

$

5,580

​

$

3,039

​

$

3,426

​

$

1,234

​

$

404

​

$

878

​

$

14,561

Nonperforming

​

—

​

—

​

12

​

—

​

—

​

2

​

14

Total

​

$

5,580

​

$

3,039

​

$

3,438

​

$

1,234

​

$

404

​

$

880

​

$

14,575

Current period gross write-offs

​

​

—

​

​

—

​

​

20

​

​

13

​

​

4

​

​

186

​

​

223

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total Loans

​

$

345,164

​

$

399,063

​

$

320,341

​

$

776,539

​

$

479,369

​

$

1,263,240

​

$

3,583,716

23

Table of Contents

The following table presents our loans by year of origination, loan segmentation and risk indicator as of December 31, 2024:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

(in thousands)

​

2024

​

2023

​

2022

​

2021

​

2020

​

Prior

​

Total

Commercial construction

​

​

​

​

​

​

​

Risk rating:

​

​

​

​

​

​

​

Pass

​

$

34,320

​

$

27,251

​

$

55,825

​

$

771

​

$

4,404

​

$

9,046

​

$

131,617

Special mention

​

—

​

—

​

—

​

—

​

—

​

—

​

—

Substandard

​

—

​

—

​

—

​

—

​

—

​

—

​

—

Total

​

$

34,320

​

$

27,251

​

$

55,825

​

$

771

​

$

4,404

​

$

9,046

​

$

131,617

Current period gross write-offs

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial real estate owner occupied

​

​

​

​

​

​

​

Risk rating:

​

​

​

​

​

​

​

Pass

​

$

42,705

​

$

46,869

​

$

60,102

​

$

29,808

​

$

20,761

​

$

96,123

​

$

296,368

Special mention

​

—

​

128

​

—

​

—

​

—

​

2,070

​

2,198

Substandard

​

—

​

—

​

—

​

—

​

—

​

3,442

​

3,442

Doubtful

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

66

​

​

66

Total

​

$

42,705

​

$

46,997

​

$

60,102

​

$

29,808

​

$

20,761

​

$

101,701

​

$

302,074

Current period gross write-offs

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

3

​

​

3

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial real estate non-owner occupied

​

​

​

​

​

​

​

Risk rating:

​

​

​

​

​

​

​

Pass

​

$

142,348

​

$

47,986

​

$

405,235

​

$

234,520

​

$

156,873

​

$

295,646

​

$

1,282,608

Special mention

​

—

​

—

​

—

​

20,446

​

3,913

​

26,969

​

51,328

Substandard

​

—

​

7,702

​

—

​

—

​

—

​

17,265

​

24,967

Doubtful

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Total

​

$

142,348

​

$

55,688

​

$

405,235

​

$

254,966

​

$

160,786

​

$

339,880

​

$

1,358,903

Current period gross write-offs

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Tax exempt and other

​

​

​

​

​

​

​

Risk rating:

​

​

​

​

​

​

​

Pass

​

$

11,026

​

$

2,669

​

$

6,283

​

$

602

​

$

178

​

$

23,517

​

$

44,275

Special mention

​

—

​

—

​

—

​

—

​

—

​

—

​

—

Substandard

​

—

​

—

​

—

​

—

​

—

​

—

​

—

Total

​

$

11,026

​

$

2,669

​

$

6,283

​

$

602

​

$

178

​

$

23,517

​

$

44,275

Current period gross write-offs

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial and industrial

​

​

​

​

​

​

​

Risk rating:

​

​

​

​

​

​

​

Pass

​

$

79,211

​

$

62,047

​

$

47,739

​

$

12,154

​

$

32,239

​

$

65,002

​

$

298,392

Special mention

​

9

​

14,878

​

1,266

​

834

​

60

​

632

​

17,679

Substandard

​

128

​

72

​

408

​

221

​

—

​

2,866

​

3,695

Doubtful

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Total

​

$

79,348

​

$

76,997

​

$

49,413

​

$

13,209

​

$

32,299

​

$

68,500

​

$

319,766

Current period gross write-offs

​

​

—

​

​

48

​

​

28

​

​

62

​

​

18

​

​

31

​

​

187

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Residential real estate

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Performing

​

$

35,872

​

$

67,708

​

$

174,677

​

$

154,229

​

$

89,752

​

$

362,421

​

$

884,659

Nonperforming

​

—

​

194

​

458

​

—

​

—

​

2,940

​

3,592

Total

​

$

35,872

​

$

67,902

​

$

175,135

​

$

154,229

​

$

89,752

​

$

365,361

​

$

888,251

Current period gross write-offs

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Home equity

​

​

​

​

​

​

​

Performing

​

$

19,175

​

$

15,762

​

$

12,515

​

$

6,648

​

$

5,536

​

$

33,238

​

$

92,874

Nonperforming

​

—

​

—

​

198

​

53

​

—

​

1,016

​

1,267

Total

​

$

19,175

​

$

15,762

​

$

12,713

​

$

6,701

​

$

5,536

​

$

34,254

​

$

94,141

Current period gross write-offs

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Consumer other

​

​

​

​

​

​

​

Performing

​

$

4,432

​

$

1,644

​

$

870

​

$

276

​

$

108

​

$

715

​

$

8,045

Nonperforming

​

—

​

8

​

—

​

1

​

—

​

15

​

24

Total

​

$

4,432

​

$

1,652

​

$

870

​

$

277

​

$

108

​

$

730

​

$

8,069

Current period gross write-offs

​

​

—

​

​

59

​

​

12

​

​

—

​

​

2

​

​

204

​

​

277

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total Loans

​

$

369,226

​

$

294,918

​

$

765,576

​

$

460,563

​

$

313,824

​

$

942,989

​

$

3,147,096

​

24

Table of Contents

Past Dues

​

The following is a summary of past due loans for the periods ended:

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	September 30, 2025
(in thousands)		30-59			60-89			90+			Total Past Due			Current			Total Loans
Commercial construction	​	$	—	​	$	—	​	$	—	​	$	—	​	$	169,928	​	$	169,928
Commercial real estate owner occupied	​		—	​		—	​		155	​		155	​		342,082	​		342,237
Commercial real estate non-owner occupied	​		—	​		—	​		127	​		127	​		1,473,009	​		1,473,136
Tax exempt and other	​		—	​		—	​		—	​		—	​		42,395	​		42,395
Commercial and industrial	​		1,056	​		300	​		733	​		2,089	​		338,818	​		340,907
Residential real estate	​		817	​		923	​		2,701	​		4,441	​		1,085,109	​		1,089,550
Home equity	​		332	​		97	​		330	​		759	​		110,229	​		110,988
Consumer other	​		84	​		12	​		68	​		164	​		14,411	​		14,575
Total	​	$	2,289	​	$	1,332	​	$	4,114	​	$	7,735	​	$	3,575,981	​	$	3,583,716

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	December 31, 2024
(in thousands)		30-59			60-89			90+			Total Past Due			Current			Total Loans
Commercial construction	​	$	—	​	$	—	​	$	—	​	$	—	​	$	131,617	​	$	131,617
Commercial real estate owner occupied	​		—	​		—	​		6	​		6	​		302,068	​		302,074
Commercial real estate non-owner occupied	​		184	​		—	​		93	​		277	​		1,358,626	​		1,358,903
Tax exempt and other	​		—	​		—	​		—	​		—	​		44,275	​		44,275
Commercial and industrial	​		428	​		227	​		578	​		1,233	​		318,533	​		319,766
Residential real estate	​		14,076	​		2,426	​		663	​		17,165	​		871,086	​		888,251
Home equity	​		963	​		441	​		193	​		1,597	​		92,544	​		94,141
Consumer other	​		35	​		20	​		1	​		56	​		8,013	​		8,069
Total	​	$	15,686	​	$	3,114	​	$	1,534	​	$	20,334	​	$	3,126,762	​	$	3,147,096

​

Non-Accrual Loans

​

The following is a summary of non-accrual loans for the periods ended:

​

​	​	​	​	​	​	​	​	​	​
​	​	September 30, 2025
​	​	​	​	​	Nonaccrual With No		​	90+ Days Past
(in thousands)		Nonaccrual			Related Allowance			Due and Accruing
Commercial construction	​	$	—	​	$	—	​	$	—
Commercial real estate owner occupied	​		305	​		32	​		147
Commercial real estate non-owner occupied	​		195	​		67	​		—
Tax exempt and other	​		—	​		—	​		—
Commercial and industrial	​		1,221	​		545	​		—
Residential real estate	​		6,734	​		1,054	​		190
Home equity	​		1,041	​		1	​		—
Consumer other	​		14	​		1	​		61
Total	​	$	9,510	​	$	1,700	​	$	398

​

​

​

​

​

​

​

​

​

25

Table of Contents

​

​

​	​	​	​	​	​	​	​	​	​
​	​	December 31, 2024
​	​	​	​	​	Nonaccrual With No		​	90+ Days Past
(in thousands)		Nonaccrual			Related Allowance			Due and Accruing
Commercial construction	​	$	—	​	$	—	​	$	—
Commercial real estate owner occupied	​		736	​		671	​		—
Commercial real estate non-owner occupied	​		277	​		184	​		—
Tax exempt and other	​		—	​		—	​		—
Commercial and industrial	​		1,099	​		295	​		—
Residential real estate	​		3,591	​		898	​		—
Home equity	​		1,267	​		1	​		2
Consumer other	​		24	​		1	​		—
Total	​	$	6,994	​	$	2,050	​	$	2

​

Our policy is to reverse previously recorded interest income when a loan is placed on non-accrual, as such, the Company did not record any interest income on its non-accrual loans for the three and nine months ended September 30, 2025 and 2024.

​

Collateral Dependent Loans

​

Loans that do not share risk characteristics are evaluated on an individual basis. For loans that are individually evaluated and collateral dependent, financial loans where we have determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and we expect repayment of the financial asset to be provided substantially through the operation or sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the asset as of the measurement date.

​

The following table presents the amortized cost basis of collateral-dependent loans by loan portfolio segment for the periods ended:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

September 30, 2025

​

December 31, 2024

(in thousands)

Real Estate

Other

Real Estate

Other

Commercial construction

​

$

—

​

$

—

​

$

—

​

$

—

Commercial real estate owner occupied

​

—

​

—

​

736

​

—

Commercial real estate non-owner occupied

​

—

​

—

​

277

​

—

Tax exempt and other

​

—

​

—

​

—

​

—

Commercial and industrial

​

—

​

579

​

1,099

​

—

Residential real estate

​

1,334

​

—

​

3,591

​

—

Home equity

​

—

​

—

​

1,267

​

—

Consumer other

​

—

​

—

​

24

​

—

Total

​

$

1,334

​

$

579

​

$

6,994

​

$

—

​

​

26

Table of Contents

Loan Modifications to Borrowers Experiencing Financial Difficulty

​

In January 2023, the Company adopted ASU 2022-02, “Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures” which eliminated the accounting guidance for troubled debt restructurings while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors when a borrower is experiencing financial difficulty. This guidance was applied on a prospective basis. Upon adoption of this guidance, we are no longer required to establish a specific reserve for modifications to borrowers experiencing financial difficulty. Instead, these modifications are included in their respective category and a historical loss rate is applied to the current loan balance to arrive at the quantitative baseline portion of the ACL.

​

These modifications typically result from loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance, or other actions.

​

The following table presents the amortized cost basis of loans that were both experiencing financial difficulty and modified during the three and nine months ended September 30, 2025 and 2024, by class and by type of modification.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

(in thousands)

​

Principal Forgiveness

​

Payment Delay

​

Term Extension

​

Interest Rate Reduction

​

Combination Interest Rate Reduction and Term Extension

​

% of Total Class of Loans

Three Months Ended September 30, 2025

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial construction

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

—

%

Commercial real estate owner occupied

​

—

​

—

​

—

​

—

​

—

​

—

​

Commercial real estate non-owner occupied

​

—

​

—

​

11,512

​

—

​

—

​

0.78

​

Tax exempt and other

​

—

​

—

​

—

​

—

​

—

​

—

​

Commercial and industrial

​

—

​

—

​

55

​

—

​

—

​

0.02

​

Residential real estate

​

—

​

—

​

—

​

—

​

—

​

—

​

Home equity

​

—

​

—

​

—

​

—

​

—

​

—

​

Consumer other

​

—

​

—

​

—

​

—

​

—

​

—

​

Total

​

$

—

​

$

—

​

$

11,567

​

$

—

​

$

—

​

0.32

%

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Nine Months Ended September 30, 2025

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial construction

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

—

%

Commercial real estate owner occupied

​

—

​

—

​

—

​

—

​

—

​

—

​

Commercial real estate non-owner occupied

​

—

​

—

​

11,512

​

—

​

—

​

0.78

​

Tax exempt and other

​

—

​

—

​

—

​

—

​

—

​

—

​

Commercial and industrial

​

—

​

—

​

221

​

—

​

—

​

0.06

​

Residential real estate

​

—

​

—

​

—

​

—

​

—

​

—

​

Home equity

​

—

​

—

​

—

​

—

​

—

​

—

​

Consumer other

​

—

​

—

​

—

​

—

​

—

​

—

​

Total

​

$

—

​

$

—

​

$

11,733

​

$

—

​

$

—

​

0.33

%

​

​

​

​

​

​

​

​

27

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

(in thousands)

​

Principal Forgiveness

​

Payment Delay

​

Term Extension

​

Interest Rate Reduction

​

Combination Interest Rate Reduction and Term Extension

​

% of Total Class of Loans

Three Months Ended September 30, 2024

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial construction

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

—

%

Commercial real estate owner occupied

​

—

​

—

​

—

​

—

​

—

​

—

​

Commercial real estate non-owner occupied

​

—

​

—

​

—

​

—

​

—

​

—

​

Tax exempt and other

​

—

​

—

​

—

​

—

​

—

​

—

​

Commercial and industrial

​

—

​

—

​

9

​

—

​

—

​

—

​

Residential real estate

​

—

​

70

​

—

​

—

​

76

​

0.02

​

Home equity

​

—

​

—

​

—

​

—

​

—

​

—

​

Consumer other

​

—

​

—

​

—

​

—

​

—

​

—

​

Total

​

$

—

​

$

70

​

$

9

​

$

—

​

$

76

​

0.01

%

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Nine Months Ended September 30, 2024

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial construction

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

—

%

Commercial real estate owner occupied

​

—

​

—

​

—

​

—

​

—

​

—

​

Commercial real estate non-owner occupied

​

—

​

—

​

—

​

—

​

—

​

—

​

Tax exempt and other

​

—

​

—

​

—

​

—

​

—

​

—

​

Commercial and industrial

​

—

​

—

​

9

​

—

​

—

​

—

​

Residential real estate

​

—

​

70

​

31

​

—

​

76

​

0.02

​

Home equity

​

—

​

—

​

—

​

—

​

—

​

—

​

Consumer other

​

—

​

—

​

—

​

—

​

—

​

—

​

Total

​

$

—

​

$

70

​

$

40

​

$

—

​

$

76

​

0.01

%

​

​

28

Table of Contents

The following table presents the financial effect of loan modifications made to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2025 and 2024.

​

​	​	​	​	​	​	​	​	​	​	​
​	​	Weighted-Average Months of Payment Delay		​	Weighted-Average Months of Term Extension		​	​	Weighted-Average Interest Rate Reduction
Three Months Ended September 30, 2025	​	​	​	​	​	​	​	​	​	​
Commercial construction	​	​	—	​	​	—	​	​	—	%
Commercial real estate owner occupied	​	​	—	​	​	—	​	​	—	​
Commercial real estate non-owner occupied	​	​	—	​	​	8	​	​	—	​
Tax exempt and other	​	​	—	​	​	—	​	​	—	​
Commercial and industrial	​	​	—	​	​	6	​	​	—	​
Residential real estate	​	​	—	​	​	—	​	​	—	​
Home equity	​	​	—	​	​	—	​	​	—	​
Consumer other	​	​	—	​	​	—	​	​	—	​
​	​	​	​	​	​	​	​	​	​	​
Nine Months Ended September 30, 2025	​	​	​	​	​	​	​	​	​	​
Commercial construction	​	​	—	​	​	—	​	​	—	%
Commercial real estate owner occupied	​	​	—	​	​	—	​	​	—	​
Commercial real estate non-owner occupied	​	​	—	​	​	8	​	​	—	​
Tax exempt and other	​	​	—	​	​	—	​	​	—	​
Commercial and industrial	​	​	—	​	​	35	​	​	—	​
Residential real estate	​	​	—	​	​	—	​	​	—	​
Home equity	​	​	—	​	​	—	​	​	—	​
Consumer other	​	​	—	​	​	—	​	​	—	​

​

​

​

​	​	​	​	​	​	​	​	​	​	​
​	​	Weighted-Average Months of Payment Delay		​	Weighted-Average Months of Term Extension		​	​	Weighted-Average Interest Rate Reduction
Three Months Ended September 30, 2024	​	​	​	​	​	​	​	​	​	​
Commercial construction	​	​	—	​	​	—	​	​	—	%
Commercial real estate owner occupied	​	​	—	​	​	—	​	​	—	​
Commercial real estate non-owner occupied	​	​	—	​	​	—	​	​	—	​
Tax exempt and other	​	​	—	​	​	—	​	​	—	​
Commercial and industrial	​	​	—	​	​	58	​	​	—	​
Residential real estate	​	​	3	​	​	60	​	​	1.25	​
Home equity	​	​	—	​	​	—	​	​	—	​
Consumer other	​	​	—	​	​	—	​	​	—	​
​	​	​	​	​	​	​	​	​	​	​
Nine Months Ended September 30, 2024	​	​	​	​	​	​	​	​	​	​
Commercial construction	​	​	—	​	​	—	​	​	—	%
Commercial real estate owner occupied	​	​	—	​	​	—	​	​	—	​
Commercial real estate non-owner occupied	​	​	—	​	​	—	​	​	—	​
Tax exempt and other	​	​	—	​	​	—	​	​	—	​
Commercial and industrial	​	​	—	​	​	58	​	​	—	​
Residential real estate	​	​	3	​	​	61	​	​	1.25	​
Home equity	​	​	—	​	​	—	​	​	—	​
Consumer other	​	​	—	​	​	—	​	​	—	​

​

29

Table of Contents

Foreclosure

There were $89 thousand of residential mortgage loans collateralized by real estate that are in the process of foreclosure as of September 30, 2025. Residential mortgage loans collateralized by real estate that were in the process of foreclosure as of December 31, 2024 totaled $83 thousand.

​

Mortgage Banking

Loans held for sale at September 30, 2025 had an unpaid principal balance of $5.4 million and $1.2 million as of December 31, 2024.  The interest rate exposure on loans held for sale is mitigated through forward sale commitments with certain approved secondary market investors.  Forward sale commitments had a notional amount of $8.5 million at September 30, 2025, and $4.8 million at December 31, 2024. Refer to Note 8 for further discussion of forward sale commitments.

​

For the three months ended September 30, 2025 and 2024, we sold $12.4 million and $20.7 million, respectively, of residential mortgage loans on the secondary market, which resulted in a net gain on sale of loans (net of costs, including direct and indirect origination costs) of $167 thousand and $317 thousand, respectively.

​

For the nine months ended September 30, 2025 and 2024, we sold $33.7 million and $37.9 million, respectively, of residential mortgage loans on the secondary market, which resulted in a net gain on sale of loans (net of costs, including direct and indirect origination costs) of $616 thousand and $502 thousand, respectively.

​

We sell residential loans on the secondary market while primarily retaining the servicing of these loans. Servicing retained loans helps to maintain customer relationships and earn fees over the servicing period. Loans serviced for others are not included in the accompanying consolidated balance sheets. The risks inherent in servicing assets relate primarily to level of prepayments that result from shifts in interest rates.  We obtain third-party valuations of our servicing assets portfolio quarterly, and the assumptions are reflected in Fair Value disclosures.

​

NOTE 5.               BORROWED FUNDS

​

Borrowed funds at September 30, 2025 and December 31, 2024 are summarized, as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

September 30, 2025

​

December 31, 2024

​

​

​

​

​

Weighted

​

​

​

​

Weighted

​

(dollars in thousands)

Carrying Value

Average Rate

​

Carrying Value

Average Rate

Short-term borrowings

​

​

​

​

​

​

​

Advances from the FHLB

​

$

50,000

4.03

%

​

$

242,650

4.49

%

Other borrowings

​

7,615

0.19

​

​

7,062

0.19

​

Total short-term borrowings

​

57,615

3.63

​

​

249,712

4.35

​

Long-term borrowings

​

​

​

​

Advances from the FHLB

​

82,341

3.09

​

​

269

4.50

​

Subordinated borrowings

​

52,229

10.50

​

​

40,620

6.60

​

Total long-term borrowings

​

134,570

5.82

​

​

40,889

6.59

​

Total

​

$

192,185

5.17

%

​

$

290,601

4.75

%

​

Short-term debt includes FHLB advances with a remaining maturity of less than one year. We also maintain a $1.0 million secured line of credit with the FHLB that bears a daily adjustable rate calculated by the FHLB. There was no outstanding balance on the FHLB line of credit for the periods ended September 30, 2025 and December 31, 2024. There are no variable rate short-term FHLB borrowings.

​

We have the capacity to borrow funds on a secured basis utilizing the Borrower in Custody program, and the Discount Window at the Reserve Bank. At September 30, 2025, our available secured line of credit at the Reserve Bank was $98.0 million versus $105.6 million at December 31, 2024. We have pledged certain loans and securities to the Reserve Bank to support this arrangement.

​

30

Table of Contents

We maintain an unused unsecured federal funds line of credit with a correspondent bank that has an aggregate overnight borrowing capacity of $40.0 million as of September 30, 2025 and December 31, 2024. There was no outstanding balance on the line of credit as of September 30, 2025 and December 31, 2024.

​

Long-term FHLB advances consist of advances with a remaining maturity of more than one year. The advances outstanding at September 30, 2025 include callable advances of $80.3 million and amortizing advances of $1.0 million. There were no callable advances outstanding and $269 thousand of amortizing advances at December 31, 2024. All FHLB borrowings, including the line of credit, are secured by a blanket security agreement on certain qualified collateral, principally residential first mortgage loans and certain securities. There are no variable rate long-term FHLB borrowings.

​

A summary of maturities of FHLB advances as of September 30, 2025 is, as follows:

​

​	​	​	​	​	​	​
​		​	​		Weighted Average
(in thousands, except rates)	​	Amount		​	Rate
2025	​	$	—		—	%
2026	​		50,000		4.03	​
2027	​		56,171		3.18	​
2028	​		25,150		2.90	​
2029	​		—		—	​
Thereafter	​		1,020		2.54	​
Total FHLB advances	​	$	132,341		3.44	%

​

We executed a Subordinated Note Purchase Agreement with an aggregate of $40.0 million of subordinated notes (the “Notes”) to accredited investors on November 26, 2019. The Notes have a maturity date of December 1, 2029 and bear a fixed interest rate of 4.63% through December 1, 2024 payable semi-annually in arrears. From December 1, 2024 and thereafter the interest rate shall be reset quarterly to an interest rate per annum equal to the then current three-month Secured Overnight Financing Rate (“SOFR”) plus 3.27%. We have the option beginning with the interest payment date of December 1, 2024, and on any scheduled payment date thereafter, to redeem the Notes, in whole or in part upon prior approval of the Board of Governors of the Federal Reserve System (“Federal Reserve”). During the fourth quarter of 2024 we paid down $20.0 million of the outstanding subordinated notes. As of September 30, 2025 we have an outstanding subordinated note balance of $20.0 million.

We also have $20.6 million in floating Junior Subordinated Deferrable Interest Debentures (“Debentures”) issued by NHTB Capital Trust II (“Trust II”) and NHTB Capital Trust III (“Trust III”), which are both Connecticut statutory trusts. The Debentures issued on March 30, 2004 carry a variable interest rate of three-month SOFR plus 2.79%, and mature in 2034. The debt is callable by the Company at the time when any interest payment is made. Trust II and Trust III are considered variable interest entities for which we are not the primary beneficiary. Accordingly, Trust II and Trust III are not consolidated into our financial statements.

In connection with the acquisition, the Company assumed $13.0 million in fixed-to-floating rate subordinated notes, that had a fair value of $11.2 million (the “2031 Notes”) issued by Guaranty Bancorp. The 2031 Notes were originally issued on March 23, 2021 with a maturity date of April 1, 2031. The 2031 Notes bear a fixed-to-floating interest rate of 4.875% through April 1, 2026, payable quarterly in arrears. Beginning April 1, 2026 and thereafter, the interest rate shall be reset quarterly to an interest rate per annum equal to the then current three-month SOFR plus 4.82%. We have the option beginning with the interest payment date of April 1, 2026, and on any scheduled payment date thereafter, to redeem the 2031 Notes, in whole or in part upon prior approval of the Federal Reserve.

​

​

​

​

​

​

​

31

Table of Contents

​

Repurchase Agreements

We can raise additional liquidity by entering into repurchase agreements at our discretion. In a security repurchase agreement transaction, we will generally sell a security, agreeing to repurchase either the same or substantially identical security on a specified later date, at a greater price than the original sales price. The difference between the sale price and purchase price is the cost of the proceeds, which is recorded as interest expense on the consolidated statements of income. The securities underlying the agreements are delivered to counterparties as security for the repurchase obligations. Since the securities are treated as collateral and the agreement does not qualify for a full transfer of effective control, the transactions do not meet the criteria to be classified as sales, and are therefore considered secured borrowing transactions for accounting purposes. Payments on such borrowings are interest only until the scheduled repurchase date. In a repurchase agreement, we are subject to the risk that the purchaser may default at maturity and not return the securities underlying the agreements. In order to minimize this potential risk, we either deal with established firms when entering into these transactions or with customers whose agreements stipulate that the securities underlying the agreement are not delivered to the customer and instead are held in segregated safekeeping accounts by our safekeeping agents.

​

​	​	​	​	​	​	​
(in thousands)	​	September 30, 2025		​	December 31, 2024
Customer Repurchase Agreements		​		​
US Government-sponsored enterprises	​	$	7,615	​	$	7,062
Total	​	$	7,615	​	$	7,062

​

​

32

Table of Contents

NOTE 6.               DEPOSITS

​

A summary of time deposits is, as follows:

​

​	​	​	​	​	​	​
(in thousands)		September 30, 2025			December 31, 2024
Time less than $100,000	​	$	467,155	​	$	439,648
Time $100,000 through $250,000	​		279,354	​		203,962
Time $250,000 or more	​		235,484	​		186,664
Total	​	$	981,993	​	$	830,274

​

At September 30, 2025 and December 31, 2024, the scheduled maturities by year for time deposits are, as follows:

​

​	​	​	​	​	​	​
(in thousands)		September 30, 2025		​	December 31, 2024
Within 1 year	​	$	949,202	​	$	806,974
Over 1 year to 2 years	​		21,192	​		16,422
Over 2 years to 3 years	​		5,669	​		4,028
Over 3 years to 4 years	​		2,591	​		1,805
Over 4 years to 5 years	​		3,321	​		931
Over 5 years	​		18	​		114
Total	​	$	981,993	​	$	830,274

​

Included in time deposits are brokered deposits of $237.6 million and $256.0 million at September 30, 2025 and December 31, 2024, respectively.  Also included in time deposits are reciprocal deposits of $72.6 million and $62.5 million at September 30, 2025 and December 31, 2024, respectively.

​

33

Table of Contents

NOTE 7.           CAPITAL RATIOS AND SHAREHOLDERS’ EQUITY

​

The Company and the Bank are subject to various regulatory capital requirements administered by the Federal Reserve and the FDIC. Failure to meet minimum capital requirements can result in mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s unaudited Consolidated Financial Statements.

Under the capital rules, risk-based capital ratios are calculated by dividing Tier 1, common equity Tier 1, and total risk-based capital, respectively, by risk-weighted assets. Assets and off-balance sheet credit equivalents are assigned to one of several risk-weight categories, based primarily on relative risk. The rules require banks and bank holding companies to maintain a minimum common equity Tier 1 capital ratio of 4.5%, a minimum Tier 1 capital ratio of 6.0% and a total capital ratio of 8.0%. In addition, a Tier 1 leverage ratio of 4.0% is required. Additionally, the capital rules require a bank holding company to maintain a capital conservation buffer of common equity Tier 1 capital in an amount above the minimum risk-based capital requirements equal to 2.5% of total risk weighted assets, or face restrictions on the ability to pay dividends, pay discretionary bonuses, and to engage in share repurchases.

Under the FDIC’s prompt corrective action rules, an insured state nonmember bank is considered “well capitalized” if its capital ratios meet or exceed the ratios as set forth in the following table and is not subject to any written agreement, order, capital directive, or prompt corrective action directive to meet and maintain a specific capital level for any capital measure. The Bank must meet well capitalized requirements under prompt corrective action provisions. Prompt corrective action provisions are not applicable to bank holding companies.

A bank holding company is considered “well capitalized” if the bank holding company (i) has a total risk-based capital ratio of at least 10.0%, (ii) has a Tier 1 risk-based capital ratio of at least 6.0%, and (iii) is not subject to any written agreement order, capital directive or prompt corrective action directive to meet and maintain a specific capital level for any capital measure.

At September 30, 2025, the capital levels of both the Company and the Bank exceeded all regulatory capital requirements, and their regulatory capital ratios were above the minimum levels required to be considered well capitalized for regulatory purposes. The actual and required capital ratios are, as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

September 30, 2025

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Minimum Required for

​

​

​

Minimum Required to

​

​

Actual

​

Capital Adequacy purposes

​

​

​

be Well Capitalized

(in thousands, except ratios)

Amount

Ratio

​

Amount

Ratio

​

​

Amount

​

Ratio

Company (consolidated)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total capital to risk-weighted assets

​

$

487,228

​

13.05

%

​

$

298,661

​

8.00

%

​

$

N/A

​

N/A

%

Common equity Tier 1 capital to risk-weighted assets

​

402,171

​

10.77

​

​

167,997

​

4.50

​

​

N/A

​

N/A

​

Tier 1 capital to risk-weighted assets

​

422,791

​

11.33

​

​

223,995

​

6.00

​

​

N/A

​

N/A

​

Tier 1 capital to average assets (leverage ratio)

​

422,791

​

9.58

​

​

176,606

​

4.00

​

​

N/A

​

N/A

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Bank

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total capital to risk-weighted assets

​

$

478,136

​

12.84

%

​

$

297,937

​

8.00

%

​

$

372,421

​

10.00

%

Common equity Tier 1 capital to risk-weighted assets

​

442,699

​

11.89

​

​

167,589

​

4.50

​

​

​

242,073

​

6.50

​

Tier 1 capital to risk-weighted assets

​

442,699

​

11.89

​

​

223,452

​

6.00

​

​

​

297,936

​

8.00

​

Tier 1 capital to average assets (leverage ratio)

​

442,699

​

10.04

​

​

176,434

​

4.00

​

​

​

220,542

​

5.00

​

​

​

34

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2024

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Minimum Required for

​

​

​

Minimum Required to

​

​

Actual

​

Capital Adequacy purposes

​

​

​

be Well Capitalized

(in thousands, except ratios)

Amount

Ratio

​

Amount

Ratio

​

​

Amount

​

Ratio

Company (consolidated)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total capital to risk-weighted assets

​

$

454,960

​

13.47

%

​

$

270,206

​

8.00

%

​

$

N/A

​

N/A

%

Common equity Tier 1 capital to risk-weighted assets

​

386,548

​

11.45

​

​

151,918

​

4.50

​

​

N/A

​

N/A

​

Tier 1 capital to risk-weighted assets

​

407,168

​

12.06

​

​

202,571

​

6.00

​

​

N/A

​

N/A

​

Tier 1 capital to average assets (leverage ratio)

​

407,168

​

10.30

​

​

158,123

​

4.00

​

​

N/A

​

N/A

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Bank

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total capital to risk-weighted assets

​

$

452,823

​

13.44

%

​

$

269,538

​

8.00

%

​

$

336,922

​

10.00

%

Common equity Tier 1 capital to risk-weighted assets

​

421,031

​

12.50

​

​

151,571

​

4.50

​

​

​

218,936

​

6.50

​

Tier 1 capital to risk-weighted assets

​

421,031

​

12.50

​

​

202,095

​

6.00

​

​

​

269,460

​

8.00

​

Tier 1 capital to average assets (leverage ratio)

​

421,031

​

10.66

​

​

157,985

​

4.00

​

​

​

197,482

​

5.00

​

​

35

Table of Contents

Accumulated other comprehensive income (loss)

​

Components of accumulated other comprehensive income (loss) is, as follows:

​

​	​	​	​	​	​	​
(in thousands)		September 30, 2025			December 31, 2024
Accumulated other comprehensive loss, before tax:		​			​
Net unrealized loss on AFS securities, net of reclassifications	​	$	(46,628)	​	$	(62,298)
Net unrealized loss on hedging derivatives	​		(4,575)	​		(3,368)
Net unrealized loss on post-retirement plans	​		(1,565)	​		(1,565)
​	​	​	​	​	​	​
Income taxes related to items of accumulated other comprehensive loss:	​			​
Net unrealized loss on AFS securities, net of reclassifications	​		11,297	​		14,557
Net unrealized loss on hedging derivatives	​		1,094	​		786
Net unrealized loss on post-retirement plans	​		352	​		352
Accumulated other comprehensive loss	​	$	(40,025)	​	$	(51,536)

​

The following table presents the components of other comprehensive income (loss) for the three and nine months ended September 30, 2025 and 2024:

​

36

Table of Contents

​	​	​	​	​	​	​	​	​	​
(in thousands)		Before Tax			Tax Effect			Net of Tax
Three Months Ended September 30, 2025		​			​			​
Net unrealized gain (loss) on AFS securities, net of reclassifications:		​			​			​
Net unrealized gain (loss) arising during the period	​	$	9,718	​	$	(2,165)	​	$	7,553
Less: reclassification adjustment for gains (losses) realized in net income	​		241	​		(59)	​		182
Net unrealized gain (loss) on AFS securities	​		9,477	​		(2,106)	​		7,371
​	​	​	​	​	​	​	​	​	​
Net unrealized gain (loss) on hedging derivatives:	​			​			​		​
Net unrealized gain (loss) arising during the period	​		1,852	​		(439)	​		1,413
Less: reclassification adjustment for gains (losses) realized in net income	​		—	​		—	​		—
Net unrealized gain (loss) on cash flow hedging derivatives	​		1,852	​		(439)	​		1,413
​	​	​	​	​	​	​	​	​	​
Net unrealized gain (loss) on post-retirement plans:	​			​			​		​
Net unrealized gain (loss) arising during the period	​		—	​		—	​		—
Less: reclassification adjustment for gains (losses) realized in net income	​		—	​		—	​		—
Net unrealized gain (loss) on post-retirement plans	​		—	​		—	​		—
Other comprehensive income (loss)	​	$	11,329	​	$	(2,545)	​	$	8,784
​	​	​	​	​	​	​	​	​	​
Three Months Ended September 30, 2024	​			​			​
Net unrealized gain (loss) on AFS securities, net of reclassifications:	​			​			​
Net unrealized gain (loss) arising during the period	​	$	16,147	​	$	(3,808)	​	$	12,339
Less: reclassification adjustment for gains (losses) realized in net income	​		—	​		—	​		—
Net unrealized gain (loss) on AFS securities	​		16,147	​		(3,808)	​		12,339
​	​	​	​	​	​	​	​	​	​
Net unrealized gain (loss) on hedging derivatives:	​			​			​		​
Net unrealized gain (loss) arising during the period	​		82	​		(19)	​		63
Less: reclassification adjustment for gains (losses) realized in net income	​		—	​		—	​		—
Net unrealized gain (loss) on cash flow hedging derivatives	​		82	​		(19)	​		63
​	​	​	​	​	​	​	​	​	​
Net unrealized gain (loss) on post-retirement plans:	​			​			​		​
Net unrealized gain (loss) arising during the period	​		—	​		—	​		—
Less: reclassification adjustment for gains (losses) realized in net income	​		—	​		—	​		—
Net unrealized gain (loss) on post-retirement plans	​		—	​		—	​		—
Other comprehensive income (loss)	​	$	16,229	​	$	(3,827)	​	$	12,402

​

​

​	​	​	​	​	​	​	​	​	​
​	​	​
(in thousands)		Before Tax			Tax Effect			Net of Tax
Nine Months Ended September 30, 2025		​			​			​
Net unrealized gain (loss) on AFS securities:		​			​			​
Net unrealized gain (loss) arising during the period	​	$	12,711	​	$	(2,531)	​	$	10,180
Less: reclassification adjustment for gains (losses) realized in net income	​		(2,959)	​		729	​		(2,230)
Net unrealized gain (loss) on AFS securities	​		15,670	​		(3,260)	​		12,410
​	​	​	​	​	​	​	​	​	​
Net unrealized gain (loss) on hedging derivatives:	​		​	​			​
Net unrealized gain (loss) arising during the period	​		(1,207)	​		308	​		(899)

37

Table of Contents

Less: reclassification adjustment for gains (losses) realized in net income	​		—	​		—	​		—
Net unrealized gain (loss) on hedging derivatives	​		(1,207)	​		308	​		(899)
​	​	​	​	​	​	​	​	​	​
Net unrealized gain (loss) on post-retirement plans:	​			​			​
Net unrealized gain (loss) arising during the period	​		—	​		—	​		—
Less: reclassification adjustment for gains (losses) realized in net income	​		—	​		—	​		—
Net unrealized gain (loss) on post-retirement plans	​		—	​		—	​		—
Other comprehensive income (loss)	​	$	14,463	​	$	(2,952)	​	$	11,511
​	​	​	​	​	​	​	​	​	​
Nine Months Ended September 30, 2024	​			​			​
Net unrealized gain (loss) on AFS securities:	​			​			​
Net unrealized gain (loss) arising during the period	​	$	10,093	​	$	(2,380)	​	$	7,713
Less: reclassification adjustment for gains (losses) realized in net income	​		50	​		(12)	​		38
Net unrealized gain (loss) on AFS securities	​		10,043	​		(2,368)	​		7,675
​	​	​	​	​	​	​	​	​	​
Net unrealized gain (loss) on hedging derivatives:	​		​	​			​
Net unrealized gain (loss) arising during the period	​		(1,167)	​		275	​		(892)
Less: reclassification adjustment for gains (losses) realized in net income	​		—	​		—	​		—
Net unrealized gain (loss) on hedging derivatives	​		(1,167)	​		275	​		(892)
​	​	​	​	​	​	​	​	​	​
Net unrealized gain (loss) on post-retirement plans:	​			​			​
Net unrealized gain (loss) arising during the period	​		22	​		(28)	​		(6)
Less: reclassification adjustment for gains (losses) realized in net income	​		—	​		—	​		—
Net unrealized gain (loss) on post-retirement plans	​		22	​		(28)	​		(6)
Other comprehensive income (loss)	​	$	8,898	​	$	(2,121)	​	$	6,777

​

​

38

Table of Contents

The following table presents the changes in each component of accumulated other comprehensive income (loss), net of tax impacts, for the three and nine months ended September 30, 2025 and 2024:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Net unrealized

Net unrealized

Net unrealized

​

​

​

​

gain (loss)

​

gain (loss)

​

loss

​

​

​

​

​

on AFS

​

on hedging

​

on pension

​

​

​

(in thousands)

​

Securities

​

derivatives

​

plans

​

Total

Three Months Ended September 30, 2025

​

​

​

​

​

​

​

​

Balance at beginning of period

​

$

(42,702)

​

$

(4,894)

​

$

(1,213)

​

$

(48,809)

Other comprehensive gain (loss) before reclassifications

​

7,553

​

1,413

​

—

​

8,966

Less: amounts reclassified from accumulated other comprehensive income

​

182

​

—

​

—

​

182

Total other comprehensive income (loss)

​

7,371

​

1,413

​

—

​

8,784

Balance at end of period

​

$

(35,331)

​

$

(3,481)

​

$

(1,213)

​

$

(40,025)

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended September 30, 2024

​

​

​

​

​

Balance at beginning of period

​

$

(52,313)

​

$

(1,965)

​

$

(1,209)

​

$

(55,487)

Other comprehensive gain (loss) before reclassifications

​

12,339

​

63

​

—

​

12,402

Less: amounts reclassified from accumulated other comprehensive income

​

—

​

—

​

—

​

—

Total other comprehensive income (loss)

​

12,339

​

63

​

—

​

12,402

Balance at end of period

​

$

(39,974)

​

$

(1,902)

​

$

(1,209)

​

$

(43,085)

​

​

​

​

​

​

​

​

​

​

​

​

​

Nine Months Ended September 30, 2025

​

​

​

​

​

Balance at beginning of period

​

$

(47,741)

​

$

(2,582)

​

$

(1,213)

​

$

(51,536)

Other comprehensive gain (loss) before reclassifications

​

10,180

​

(899)

​

—

​

9,281

Less: amounts reclassified from accumulated other comprehensive income

​

(2,230)

​

—

​

—

​

(2,230)

Total other comprehensive income (loss)

​

12,410

​

(899)

​

—

​

11,511

Balance at end of period

​

$

(35,331)

​

$

(3,481)

​

$

(1,213)

​

$

(40,025)

​

​

​

​

​

​

​

​

​

​

​

​

​

Nine Months Ended September 30, 2024

​

​

​

​

​

​

​

​

​

​

​

​

Balance at beginning of period

​

$

(47,649)

​

$

(1,010)

​

$

(1,203)

​

$

(49,862)

Other comprehensive gain (loss) before reclassifications

​

7,713

​

(892)

​

(6)

​

6,815

Less: amounts reclassified from accumulated other comprehensive income

​

38

​

—

​

—

​

38

Total other comprehensive income (loss)

​

7,675

​

(892)

​

(6)

​

6,777

Balance at end of period

​

$

(39,974)

​

$

(1,902)

​

$

(1,209)

​

$

(43,085)

​

The following tables presents the amounts reclassified out of each component of accumulated other comprehensive income for the three and nine months ended September 30, 2025 and 2024:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended September 30,

​

Nine Months Ended September 30,

​

Affected Line Item where

(in thousands)

2025

2024

2025

2024

Net Income is Presented

Net realized (losses) gains on AFS securities:

​

​

​

​

​

​

​

​

​

Before tax

​

$

241

​

$

—

​

$

(2,959)

​

$

50

​

Non-interest income

Tax effect

​

(59)

​

—

​

729

​

(12)

​

Tax expense

Total reclassifications for the period

​

$

182

​

$

—

​

$

(2,230)

​

$

38

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

39

Table of Contents

NOTE 8.           EARNINGS PER SHARE

​

The following table presents the calculation of earnings per share:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Nine Months Ended

​

​

September 30,

​

September 30,

(in thousands, except per share and share data)

2025

2024

2025

2024

Net income

​

$

8,855

​

$

12,193

​

$

25,158

​

$

32,545

​

​

​

​

​

​

​

​

​

​

​

​

​

Average number of basic common shares outstanding(1)

​

16,230,758

​

15,260,942

​

15,621,752

​

15,229,029

Plus: dilutive effect of stock options and awards outstanding

​

52,862

​

65,132

​

63,463

​

62,863

Average number of diluted common shares outstanding(2)

​

16,283,620

​

15,326,074

​

15,685,215

​

15,291,892

​

​

​

​

​

​

​

​

​

​

​

​

​

Earnings per share:

​

​

​

​

Basic

​

$

0.55

​

$

0.80

​

$

1.61

​

$

2.14

Diluted

​

​

0.54

​

​

0.80

​

​

1.60

​

​

2.13

(1) The Company issued 1,350,464 shares of common stock in consideration for the acquisition of Guaranty. Refer to Note 2 of the consolidated financial statements for further details.

(2) Average diluted shares outstanding are computed using the treasury stock method.

​

​

40

Table of Contents

NOTE 9.           DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

​

We use derivative instruments to minimize fluctuations in earnings and cash flows caused by interest rate volatility. Our interest rate risk management strategy involves modifying the re-pricing characteristics of certain assets or liabilities so the changes in interest rates do not have a significant effect on net interest income. Thus, all of our derivative contracts are considered to be interest rate contracts.

​

We recognize our derivative instruments on the consolidated balance sheets at fair value. On the date the derivative instrument is entered into, we designate whether the derivative is part of a hedging relationship (i.e., cash flow or fair value hedge). We formally document relationships between hedging instruments and hedged items, as well as our risk management objective and strategy for undertaking hedge transactions. We also assess, both at the hedge’s inception and on an ongoing basis, whether the derivatives used in hedging transactions are highly effective in offsetting the changes in cash flows or fair values of hedged items. Changes in fair value of derivative instruments that are highly effective and qualify as cash flow hedges are recorded in other comprehensive income or loss.

​

We offer derivative products in the form of interest rate swaps, to commercial loan customers to facilitate their risk management strategies. These instruments are executed through Master Netting Arrangements (“MNAs”) with financial institution counterparties or Risk Participation Agreements (“RPAs”) with commercial bank counterparties, for which we assume a pro rata share of the credit exposure associated with a borrower's performance related to the derivative contract with the counterparty.

​

Information about derivative assets and liabilities at September 30, 2025 and December 31, 2024, follows:

​

​	​	​	​	​	​	​	​	​	​	​	​
​	​	September 30, 2025
​	​	​		​	Weighted		​	​			​
​	​	Notional		​	Average		​	Fair Value		​	Location Fair
​	​	Amount		​	Maturity		​	Asset (Liability)			Value Asset
​		(in thousands)			(in years)			(in thousands)			(Liability)
Cash flow hedges:	​	​	​	​	​	​	​	​	​	​	​
Interest rate swap on wholesale funding	​	$	—		​	—	​	$	—	​	Other assets
Interest rate swap on variable rate loans	​	​	50,000	​	​	0.5	​	​	(747)	​	Other liabilities
Total cash flow hedges	​		50,000		​	​	​	​	(747)	​	​
​	​	​	​	​	​	​	​	​	​	​	​
Fair value hedges:	​	​	​	​	​	​	​	​	​	​	​
Interest rate swap on securities	​		37,190		​	3.8	​		2,524	​	Other assets
Total fair value hedges	​		37,190		​	​	​	​	2,524	​	​
​	​	​	​	​	​	​	​	​	​	​	​
Economic hedges:	​	​	​	​	​	​	​	​	​	​	​
Forward sale commitments	​		8,543		​	—	​		(6)	​	Other liabilities
Customer Loan Swaps-MNA Counterparty	​	​	329,769	​	​	4.3	​	​	(4,969)	​	Other liabilities
Customer Loan Swaps-RPA Counterparty	​	​	196,632	​	​	4.7	​	​	(2,273)	​	Other liabilities
Customer Loan Swaps-Customer	​	​	526,401	​	​	4.4	​	​	7,242	​	Other assets
Total economic hedges	​		1,061,345		​	​	​	​	(6)	​	​
​	​	​	​	​	​	​	​	​	​	​	​
Non-hedging derivatives:	​	​	​	​	​	​	​	​	​	​	​
Interest rate lock commitments	​		3,757		​	0.1	​		111	​	Other assets
Total non-hedging derivatives	​		3,757		​	​	​	​	111	​	​
​	​	​	​	​	​	​	​	​	​	​	​
Total	​	$	1,152,292	​	​	​	​	$	1,882	​	​

​

​

41

Table of Contents

​	​	​	​	​	​	​	​	​	​	​	​
​	​	December 31, 2024
​	​	​		​	Weighted		​	​			​
​	​	Notional		​	Average		​	Fair Value		​	Location Fair
​	​	Amount		​	Maturity		​	Asset (Liability)			Value Asset
​		(in thousands)			(in years)			(in thousands)			(Liability)
Cash flow hedges:		​			​			​		​	​
Interest rate swap on wholesale funding	​	$	25,000		​	0.3	​	$	261	​	Other assets
Interest rate swap on variable rate loans	​	​	50,000	​	​	1.2	​	​	(2,036)	​	Other liabilities
Total cash flow hedges	​		75,000		​	​	​	​	(1,775)	​	​
​	​	​	​	​	​	​	​	​	​	​	​
Fair value hedges:	​	​	​	​	​	​	​	​	​	​	​
Interest rate swap on securities	​		37,190		​	4.6	​		3,969	​	Other assets
Total fair value hedges	​		37,190		​	​	​	​	3,969	​	​
​	​	​	​	​	​	​	​	​	​	​	​
Economic hedges:	​	​	​	​	​	​	​	​	​	​	​
Forward sale commitments	​	​	4,786		​	—	​		13	​	Other assets
Customer Loan Swaps-MNA Counterparty	​	​	240,031	​	​	4.3	​	​	(14,243)	​	Other liabilities
Customer Loan Swaps-RPA Counterparty	​	​	162,302	​	​	5.2	​	​	(286)	​	Other liabilities
Customer Loan Swaps-Customer	​	​	402,333	​	​	4.7	​	​	14,529	​	Other assets
Total economic hedges	​		809,452		​	​	​	​	13	​	​
​	​	​	​	​	​	​	​	​	​	​	​
Non-hedging derivatives:	​		​	​	​	​	​	​	​	​	​
Interest rate lock commitments	​		3,760		​	0.1	​		85	​	Other assets
Total non-hedging derivatives	​		3,760		​	​	​	​	85	​	​
​	​	​	​	​	​	​	​	​	​	​	​
Total	​	$	925,402	​	​	​	​	$	2,292	​	​

​

​

As of September 30, 2025 and December 31, 2024, the following amounts were recorded on the consolidated balance sheets related to cumulative basis adjustments for fair value hedges:

​

​	​	​	​	​	​	​	​	​
​		​		​	​		Cumulative Amount of Fair
​	​	Location of Hedged Item on	​	Carrying Amount of Hedged		​	Value Hedging Adjustment in
​		Balance Sheet		Assets			Carrying Amount
September 30, 2025				​			​
Interest rate swap on securities		Securities available for sale	​	$	30,837	​	$	(6,353)
​	​	​	​	​	​	​	​	​
December 31, 2024			​			​
Interest rate swap on securities		Securities available for sale	​	$	31,627	​	$	(5,563)

​

​

42

Table of Contents

Information about derivative assets and liabilities for three and nine months ended September 30, 2025 and 2024, follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended September 30, 2025

​

Amount of

​

Amount of

​

​

​

​

Gain (Loss)

​

​

​

Gain (Loss)

​

​

​

​

​

​

Recognized in

​

​

​

Reclassified

​

Location of

​

Amount of

​

​

Other

​

Location of Gain (Loss)

​

from Other

​

Gain (Loss)

​

Gain (Loss)

​

​

Comprehensive

​

Reclassified from Other

​

Comprehensive

​

Recognized in

​

Recognized

(in thousands)

Income

Comprehensive Income

Income

Income

in Income

Cash flow hedges:

​

​

​

Interest rate swap on wholesale funding

​

$

—

​

Interest expense

​

$

—

Interest expense

​

$

—

Interest rate swap on variable rate loans

​

​

339

​

Interest income

​

​

—

​

Interest income

​

​

(466)

Total cash flow hedges

​

339

​

​

—

​

(466)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fair value hedges:

​

​

​

​

​

​

Interest rate swap on securities

​

1,074

Interest income

​

—

Interest income

​

281

Total fair value hedges

​

1,074

​

​

—

​

281

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Economic hedges:

​

​

​

​

​

​

Forward commitments

​

—

Other income

​

—

Mortgage banking income

​

48

Total economic hedges

​

—

​

​

—

​

48

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Non-hedging derivatives:

​

​

​

​

​

​

Interest rate lock commitments

​

—

Other income

​

—

Mortgage banking income

​

(127)

Total non-hedging derivatives

​

—

​

​

—

​

(127)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total

​

$

1,413

​

​

​

$

—

​

$

(264)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

43

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended September 30, 2024

​

Amount of

​

Amount of

​

​

​

​

Gain (Loss)

​

​

​

Gain (Loss)

​

​

​

​

​

​

Recognized in

​

​

​

Reclassified

​

Location of

​

Amount of

​

​

Other

​

Location of Gain (Loss)

​

from Other

​

Gain (Loss)

​

Gain (Loss)

​

​

Comprehensive

​

Reclassified from Other

​

Comprehensive

​

Recognized in

​

Recognized

(in thousands)

​

Income

​

Comprehensive Income

​

Income

​

Income

​

in Income

Cash flow hedges:

​

​

​

Interest rate swap on wholesale funding

​

$

(706)

Interest expense

​

$

—

Interest expense

​

$

828

Interest rate swap on variable rate loans

​

​

911

​

Interest income

​

​

—

​

Interest income

​

​

(588)

Total cash flow hedges

​

​

205

​

​

​

—

​

​

240

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fair value hedges:

​

​

​

​

​

​

​

Interest rate swap on securities

​

(142)

Interest income

​

—

Interest income

​

372

Total economic hedges

​

​

(142)

​

​

​

—

​

372

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Economic hedges:

​

​

​

​

​

​

​

Forward commitments

​

—

Other income

​

—

Mortgage banking income

​

(23)

Total economic hedges

​

​

—

​

​

​

—

​

(23)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Non-hedging derivatives:

​

​

​

​

​

​

Interest rate lock commitments

​

—

Other income

​

—

Mortgage banking income

​

1

Total non-hedging derivatives

​

​

—

​

​

​

—

​

1

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total

​

$

63

​

$

—

​

$

590

​

​

44

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Nine Months Ended September 30, 2025

​

Amount of

​

Amount of

​

​

​

​

Gain (Loss)

​

​

​

Gain (Loss)

​

​

​

​

​

​

Recognized in

​

​

​

Reclassified

​

Location of

​

Amount of

​

​

Other

​

Location of Gain (Loss)

​

from Other

​

Gain (Loss)

​

Gain (Loss)

​

​

Comprehensive

​

Reclassified from Other

​

Comprehensive

​

Recognized in

​

Recognized

(in thousands)

Income

Comprehensive Income

Income

Income

in Income

Cash flow hedges:

​

​

​

Interest rate swap on wholesale funding

​

$

(200)

​

Interest expense

​

$

—

Interest expense

​

$

269

Interest rate swap on variable rate loans

​

​

994

​

Interest income

​

​

—

​

Interest income

​

​

(1,380)

Total cash flow hedges

​

794

​

​

—

​

(1,111)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fair value hedges:

​

​

​

​

​

​

Interest rate swap on securities

​

(1,693)

Interest income

​

—

Interest income

​

834

Total fair value hedges

​

(1,693)

​

​

—

​

834

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Economic hedges:

​

​

​

​

​

​

Forward commitments

​

—

Other income

​

—

Mortgage banking income

​

(19)

Total economic hedges

​

—

​

​

—

​

(19)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Non-hedging derivatives:

​

​

​

​

​

​

Interest rate lock commitments

​

—

Other income

​

—

Mortgage banking income

​

26

Total non-hedging derivatives

​

—

​

​

—

​

26

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total

​

$

(899)

​

​

​

$

—

​

$

(270)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

45

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Nine Months Ended September 30, 2024

​

Amount of

​

Amount of

​

​

​

​

Gain (Loss)

​

​

​

Gain (Loss)

​

​

​

​

​

​

Recognized in

​

​

​

Reclassified

​

Location of

​

Amount of

​

​

Other

​

Location of Gain (Loss)

​

from Other

​

Gain (Loss)

​

Gain (Loss)

​

​

Comprehensive

​

Reclassified from Other

​

Comprehensive

​

Recognized in

​

Recognized

(in thousands)

​

Income

​

Comprehensive Income

​

Income

​

Income

​

in Income

Cash flow hedges:

​

​

​

Interest rate swap on wholesale funding

​

$

(1,572)

Interest expense

​

$

—

Interest expense

​

$

2,483

Interest rate swap on variable rate loans

​

​

1,062

​

Interest income

​

​

—

​

Interest income

​

​

(1,758)

Total cash flow hedges

​

​

(510)

​

​

​

—

​

​

725

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fair value hedges:

​

​

​

​

​

​

​

Interest rate swap on securities

​

(382)

Interest income

​

—

Interest income

​

1,113

Total economic hedges

​

​

(382)

​

​

​

—

​

1,113

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Economic hedges:

​

​

​

​

​

​

​

Forward commitments

​

—

Other income

​

—

Mortgage banking income

​

12

Total economic hedges

​

​

—

​

​

​

—

​

12

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Non-hedging derivatives:

​

​

​

​

​

​

Interest rate lock commitments

​

—

Other income

​

—

Mortgage banking income

​

84

Total non-hedging derivatives

​

​

—

​

​

​

—

​

84

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total

​

$

(892)

​

$

—

​

$

1,934

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

46

Table of Contents

The effect of cash flow hedging and fair value accounting on the consolidated statements of income for the three and nine months ended September 30, 2025 and 2024:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended September 30, 2025

​

​

Interest and Dividend Income

​

Interest Expense

​

​

​

(in thousands)

Loans

​

Securities and other

Deposits

​

Borrowings

Non-interest Income

Income and expense line items presented in the consolidated statements of income

$

48,426

​

$

6,355

​

$

16,419

​

$

2,544

​

$

10,567

​

​

​

​

​

​

​

​

​

​

The effects of cash flow and fair value hedging:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Gain (loss) on cash flow hedges:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest rate swap on wholesale funding

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Interest rate swap on variable rate loans

​

(466)

​

​

—

​

—

​

​

—

​

—

​

​

​

​

​

​

​

​

​

​

Gain (loss) on fair value hedges:

​

​

​

​

​

​

​

​

​

​

Interest rate swap on securities

​

​

—

​

​

281

​

​

—

​

​

—

​

​

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended September 30, 2024

​

​

Interest and Dividend Income

​

Interest Expense

​

​

​

(in thousands)

Loans

​

Securities and other

Deposits

​

Borrowings

Non-interest Income

Income and expense line items presented in the consolidated statements of income

$

42,042

​

$

6,538

​

$

16,174

​

$

3,448

​

$

9,653

​

​

​

​

​

​

​

​

​

​

The effects of cash flow and fair value hedging:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Gain (loss) on cash flow hedges:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest rate swap on wholesale funding

​

​

—

​

​

—

​

​

—

​

​

828

​

​

—

Interest rate swap on variable rate loans

​

(588)

​

​

—

​

—

​

​

—

​

—

​

​

​

​

​

​

​

​

​

​

Gain (loss) on fair value hedges:

​

​

​

​

​

​

​

​

​

​

Interest rate swap on securities

​

​

—

​

​

372

​

​

—

​

​

—

​

​

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Nine Months Ended September 30, 2025

​

​

Interest and Dividend Income

​

Interest Expense

​

​

​

(in thousands)

Loans

​

Securities and other

Deposits

​

Borrowings

Non-interest Income

Income and expense line items presented in the consolidated statements of income

$

132,956

​

$

17,112

​

$

47,442

​

$

8,845

​

$

24,131

​

​

​

​

​

​

​

​

​

​

The effects of cash flow and fair value hedging:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Gain (loss) on cash flow hedges:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest rate swap on wholesale funding

​

​

—

​

​

—

​

​

—

​

​

269

​

​

—

Interest rate swap on variable rate loans

​

(1,380)

​

​

—

​

—

​

​

—

​

—

​

​

​

​

​

​

​

​

​

​

Gain (loss) on fair value hedges:

​

​

​

​

​

​

​

​

​

​

Interest rate swap on securities

​

​

—

​

​

834

​

​

—

​

​

—

​

​

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

47

Table of Contents

​

​

Nine Months Ended September 30, 2024

​

​

Interest and Dividend Income

​

Interest Expense

​

​

​

(in thousands)

Loans

​

Securities and other

Deposits

​

Borrowings

Non-interest Income

Income and expense line items presented in the consolidated statements of income

$

122,146

​

$

19,095

​

$

45,486

​

$

10,983

​

$

27,496

​

​

​

​

​

​

​

​

​

​

The effects of cash flow and fair value hedging:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Gain (loss) on cash flow hedges:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest rate swap on wholesale funding

​

​

—

​

​

—

​

​

—

​

​

2,483

​

​

—

Interest rate swap on variable rate loans

​

(1,758)

​

​

—

​

—

​

​

—

​

—

​

​

​

​

​

​

​

​

​

​

Gain (loss) on fair value hedges:

​

​

​

​

​

​

​

​

​

​

Interest rate swap on securities

​

​

—

​

​

1,113

​

​

—

​

​

—

​

​

—

​

​

The effect of economic hedges and derivatives not designated as hedging instruments on the consolidated statements of income for three and nine months ended September 30, 2025 and 2024 is as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Location of Gain (Loss) Recognized

​

Three Months Ended September 30,

​

Nine Months Ended September 30,

(In thousands)

​

in Non-interest Income

​

2025

​

​

2024

​

2025

​

​

2024

Economic hedges:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Forward commitments

​

Mortgage banking income

​

$

48

​

$

(23)

​

$

(19)

​

$

12

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Non-hedging derivatives:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest rate lock commitments

​

Mortgage banking income

​

​

(127)

​

​

1

​

​

26

​

​

84

​

Cash flow hedges

​

Interest rate swaps on wholesale funding

As of September 30, 2025, we have no remaining interest rate swaps on wholesale borrowings. The agreement we entered into in April 2020 matured effective April 2025.

​

Interest rate swap on variable rate loans

We have an interest rate swap that effectively fixes our interest rate on $50 million at the daily SOFR rate plus 11 basis points of based loan assets at 0.806% plus the credit spread on the loans that reprices on a weighted average basis. The instrument is specifically designed to hedge the risk of changes in its cash flows from interest receipts attributable to changes in a contractually specified interest rate, on an amount of our variable rate loan assets equal to $50 million. We designated the swap as a cash flow hedge.

​

Fair value hedges

​

Interest rate swap on securities

For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative instrument as well as the offsetting loss or gain on the hedged asset or liability attributable to the hedged risk are recognized in current earnings. We utilize interest rate swaps designated as fair value hedges to mitigate the effect of changing interest rates on the fair values of fixed rate callable securities available-for-sale. The hedging strategy on securities converts the fixed interest rates to SOFR based variable interest rates. These derivatives are designated as partial term hedges of selected cash flows covering specified periods of time prior to the call dates of the hedged securities. During 2019, we entered into eight swap transactions with a notional amount of $37.2 million designated as fair value hedges. These derivatives are intended to protect against the effects of changing interest rates on the fair values of fixed rate securities.  The fixed rates on the transactions have a weighted average rate of 1.696%.

48

Table of Contents

Economic hedges

​

Forward sale commitments

We utilize forward sale commitments on residential mortgage loans to hedge interest rate risk and the associated effects on the fair value of interest rate lock commitments and loans originated for sale. The forward sale commitments are accounted for as derivatives. We typically use a combination of best efforts and mandatory delivery contracts. The contracts are loan sale agreements where we commit to deliver a certain principal amount of mortgage loans to an investor at a specified price on or before a specified date. Generally, we enter into contracts just prior to the loan closing with a customer.

​

Customer loan derivatives

We enter into customer loan derivatives to facilitate the risk management strategies for commercial banking customers. We mitigate this risk by entering into equal and offsetting loan swap agreements with highly rated third-party financial institutions. The loan swap agreements are free standing derivatives and are recorded at fair value in our consolidated balance sheets. We are party to MNAs with our financial institutional counterparties; however, we do not offset assets and liabilities under these arrangements for financial statement presentation purposes.

​

​

The MNAs provide for a single net settlement of all loan swap agreements, as well as collateral or cash funds, in the event of default on, or termination of, any one contract. Collateral is provided by cash or securities received or posted by the counterparty with net liability positions, respectively, in accordance with contract thresholds.

​

The below tables describe the potential effect of master netting arrangements on the consolidated balance sheets and the financial collateral pledged for these arrangements:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Gross Amounts Offset in the Consolidated Balance Sheet

​

​

Derivative

​

​

​

Cash Collateral

​

​

​

(in thousands)

Liabilities

Derivative Assets

Pledged

Net Amount

As of September 30, 2025

​

​

​

​

​

​

​

​

Customer Loan Derivatives:

​

​

​

​

MNA counterparty

​

$

(4,969)

​

$

4,969

​

$

—

​

$

—

RPA counterparty

​

(2,273)

​

2,273

​

—

​

—

Total

​

$

(7,242)

​

$

7,242

​

$

—

​

$

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Gross Amounts Offset in the Consolidated Balance Sheet

​

​

Derivative

​

​

​

Cash Collateral

​

​

​

(in thousands)

Liabilities

Derivative Assets

Pledged

Net Amount

As of December 31, 2024

​

​

​

​

​

​

​

​

Customer Loan Derivatives:

​

​

​

​

MNA counterparty

​

$

(14,243)

​

$

14,243

​

$

—

​

$

—

RPA counterparty

​

(286)

​

286

​

—

​

—

Total

​

$

(14,529)

​

$

14,529

​

$

—

​

$

—

​

Non-hedging derivatives

​

Interest rate lock commitments

We enter into interest rate lock commitments (“IRLCs”) for residential mortgage loans, which commit us to lend funds to a potential borrower at a specific interest rate and within a specified period of time. IRLCs relate to the origination of residential mortgage loans that are held for sale and are considered derivative financial instruments under applicable accounting guidance. Outstanding IRLCs expose us to the risk that the price of the mortgage loans underlying the commitments may decline due to increases in mortgage interest rates from inception of the rate lock to the funding of the loan. The IRLCs are free standing derivatives, which are carried at fair value with changes recorded in non-interest income in our Consolidated Statements of Income. Changes in the fair value of IRLCs subsequent to inception are based on (i) changes in the fair value of the underlying loan resulting from the fulfillment of the commitment and (ii) changes in the probability when the loan will fund within the terms of the commitment, which is affected primarily by changes in interest rates and the passage of time.

49

Table of Contents

​

NOTE 10.           FAIR VALUE MEASUREMENTS

​

Recurring Fair Value Measurements

​

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of September 30, 2025 and December 31, 2024, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

September 30, 2025

​

Level 1

Level 2

Level 3

Total

(in thousands)

​

Inputs

​

Inputs

​

Inputs

​

Fair Value

Available for sale securities:

​

​

​

​

​

​

​

​

​

Obligations of US Government-sponsored enterprises

​

$

—

​

$

1,124

​

$

—

​

$

1,124

Mortgage-backed securities:

​

​

​

​

​

US Government-sponsored enterprises

​

​

—

​

​

254,939

​

​

—

​

​

254,939

US Government agency

​

—

​

141,291

​

—

​

141,291

Private label

​

—

​

11,126

​

—

​

11,126

Obligations of states and political subdivisions thereof

​

—

​

102,623

​

—

​

102,623

Corporate bonds

​

—

​

84,504

​

2,203

​

86,707

Loans held for sale

​

​

—

​

​

5,545

​

​

—

​

​

5,545

Derivative assets

​

—

​

9,767

​

111

​

9,878

Derivative liabilities

​

—

​

(7,989)

​

(6)

​

(7,995)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2024

​

Level 1

Level 2

Level 3

Total

(in thousands)

​

Inputs

​

Inputs

​

Inputs

​

Fair Value

Available for sale securities:

​

​

​

​

​

​

​

​

Obligations of US Government-sponsored enterprises

​

$

—

​

$

1,318

​

$

—

​

$

1,318

Mortgage-backed securities:

​

​

​

​

​

US Government-sponsored enterprises

​

​

—

​

​

177,316

​

​

—

​

​

177,316

US Government agency

​

—

​

103,916

​

—

​

103,916

Private label

​

—

​

39,564

​

—

​

39,564

Obligations of states and political subdivisions thereof

​

—

​

105,452

​

—

​

105,452

Corporate bonds

​

—

​

93,452

​

—

​

93,452

Loans held for sale

​

​

—

​

​

1,235

​

​

—

​

​

1,235

Derivative assets

​

—

​

18,759

​

98

​

18,857

Derivative liabilities

​

—

​

(16,565)

​

—

​

(16,565)

​

​

Securities Available for Sale: All securities and major categories of securities classified as available for sale are reported at fair value utilizing Level 2 inputs, unless otherwise disclosed. For these securities, we obtain fair value measurements from independent pricing providers. The fair value measurements used by the pricing providers consider observable data that may include dealer quotes, market maker quotes and live trading systems. If quoted prices are not readily available, fair values are determined using matrix pricing models, or other model-based valuation techniques requiring observable inputs other than quoted prices such as market pricing spreads, credit information, callable features, cash flows, the US Treasury yield curve, trade execution data, market consensus prepayment speeds, default rates, and the securities’ terms and conditions, among other things. For securities where fair value is calculated using a discounted cash flow model or other market indicators are reported at fair value utilizing Level 3 inputs.

​

Corporate Bonds

At September 30, 2025, the Company held one corporate bond investment classified as available-for-sale for which the fair value was determined using unobservable inputs, resulting in a Level 3 classification under the fair value hierarchy. During the quarter ended June 30, 2025, management identified a change in the estimated future cash flows associated with this security. As a result, the Company recognized an impairment loss of $4.4 million and charged off an allowance for credit losses of $1.2 million. In the third quarter 2025, the Company wrote down an additional $200 thousand resulting

50

Table of Contents

in a fair value of $2.2 million as of September 30, 2025. These losses were recorded in net gain (loss) on available-for-sale debt securities in the consolidated statements of income.

​

The fair value of the corporate bond was determined using a present value discounted cash flow approach. This method incorporated management’s current expectations about the timing and amount of future cash flows, which were adjusted for expected prepayments and credit-related losses. The revised cash flows were then discounted using the bond’s original effective interest rate. Unobservable inputs used in the fair value measurement included the discount rate, expected cash flows, and loss severity. The discount rate reflects the original effective yield at the time of purchase, adjusted for changes in market conditions and issuer-specific risk. Expected cash flows were developed based on management’s assessment of the issuer’s current financial condition, forward-looking performance expectations, and relevant macroeconomic indicators. Loss severity was estimated based on the Company’s expectations regarding the potential shortfall in principal and interest in the event of default, taking into account the nature of the issuer’s collateral, if any.

​

Loans Held for Sale: The valuation of the Company’s loans held for sale are determined on an individual basis using quoted secondary market prices and are classified as Level 2 measurements.

Derivative Assets and Liabilities

​

Cash Flow Hedges: The valuations of our cash flow hedges are obtained from a third party. The pricing analysis is based on observable inputs for the contractual terms of the derivatives, including the period to maturity and interest rate curves. The inputs used to value the cash flow hedges are all classified as Level 2 measurements.

​

Interest Rate Lock Commitments: We enter into IRLCs for residential mortgage loans, which commit us to lend funds to potential borrowers at a specific interest rate and within a specified period of time. The estimated fair value of commitments to originate residential mortgage loans for sale is based on quoted prices for similar loans in active markets. However, this value is adjusted by a factor which considers the likelihood of a loan in a lock position will ultimately close. The closing ratio is derived from internal data and is adjusted using significant management judgment. As such, IRLCs are classified as Level 3 measurements.

​

Forward Sale Commitments: We utilize forward sale commitments as economic hedges against potential changes in the values of the IRLCs and loans originated for sale. The fair values of mandatory delivery loan sale commitments are determined similarly to the IRLCs using quoted prices in the market place that are observable. However, closing ratios included in the calculation are internally generated and are based on management’s judgment and prior experience, which are not considered observable factors. As such, mandatory delivery forward commitments are classified as Level 3 measurements.

​

Customer Loan Derivatives: The valuation of our customer loan derivatives is obtained from a third-party pricing service and is determined using a discounted cash flow analysis on the expected cash flows of each derivative. The pricing analysis is based on observable inputs for the contractual terms of the derivatives, including the period to maturity and interest rate curves. We incorporate credit valuation adjustments to appropriately reflect our nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of the derivative contracts for the effect of nonperformance risk, we have considered the impact of MNAs and any applicable credit enhancements, such as collateral postings.

​

Although we have determined that the majority of the inputs used to value customer loan derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and counterparties. However, as of September 30, 2025, we assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives. As a result, we determined that the derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

​

​

51

Table of Contents

The table below presents the changes in Level 3 assets and liabilities that were measured at fair value on a recurring basis for the three and nine months ended September 30, 2025 and 2024:

​

​	​	​	​	​	​	​	​	​	​
​	​	Assets (Liabilities)
​	​	Interest Rate Lock		​	Forward		​	Corporate
(in thousands)		Commitments		​	Commitments		​	Bond
Three Months Ended September 30, 2025	​		​	​		​	​	​	​
Balance at beginning of period	​	$	238	​	$	(54)	​	$	2,403
Transfer into level 3 at the end of the period	​	​	—	​	​	—	​	​	—
Realized gain (loss) recognized in non-interest income	​		(127)	​		48	​	​	(200)
Balance at end of period	​	$	111	​	$	(6)	​	$	2,203
​	​	​	​	​	​	​	​	​	​
Three Months Ended September 30, 2024	​		​	​		​	​	​	​
Balance at beginning of period	​	$	146	​	$	15	​	$	—
Realized gain (loss) recognized in non-interest income	​		1	​		(23)	​	​	—
Balance at end of period	​	$	147	​	$	(8)	​	$	—
​	​	​	​	​	​	​	​	​	​
Nine Months Ended September 30, 2025	​			​			​	​	​
Balance at beginning of period	​	$	85	​	$	13	​	$	—
Transfer into level 3 at the end of the period	​	​	—	​	​	—	​	​	2,403
Realized gain (loss) recognized in non-interest income	​		26	​		(19)	​	​	(200)
Balance at end of period	​	$	111	​	$	(6)	​	$	2,203
​	​	​	​	​	​	​	​	​	​
Nine Months Ended September 30, 2024	​			​			​	​	​
Balance at beginning of period	​	$	63	​	$	(20)	​	$	—
Realized gain (loss) recognized in non-interest income	​		84	​		12	​	​	—
Balance at end of period	​	$	147	​	$	(8)	​	$	—

​

52

Table of Contents

Quantitative information about the significant unobservable inputs within Level 3 recurring assets and liabilities is, as follows:

​

​	​	​	​	​	​	​	​	​	​	​	​
​	​	Fair Value		​	​	​	​	​	Significant
​	​	September 30,		​	Valuation	​	Unobservable	​	Unobservable		​
(in thousands, except ratios)		2025			Techniques		Inputs		Input Value
Assets (Liabilities)	​		​	​		​		​		​
Interest Rate Lock Commitment		$	111	​	Pull-through Rate Analysis		Closing Ratio		​	97	%
​	​		​	​	Pricing Model	​	Origination Costs, per loan	​	$	1.7	​
​	​	​	​	​	Discount Cash Flows	​	Mortgage Servicing Asset	​	​	1.0	%
​	​	​	​	​	​		​	​	​	​	​
Forward Commitments	​		(6)	​	Quoted prices for similar loans in active markets		Freddie Mac pricing system	​		$100.3 to $104.1	​
​	​	​	​	​	​	​	​	​	​	​	​
Corporate bond	​	​	2,203	​	Discounted Cash Flows	​	Discount Rate	​	​	7.39	%
​	​	​	​	​	​	​	Cash Flows	​	​	$0 to $2,203	​
​	​	​	​	​	​	​	Loss Severity	​	​	65	%
Total	​	$	2,308	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​
​		Fair Value		​	​		​		Significant
​	​	December 31,		​	Valuation	​	Unobservable	​	Unobservable		​
(in thousands, except ratios)		2024		​	Techniques		Inputs		Input Value		​
Assets (Liabilities)	​		​	​		​		​		​
Interest Rate Lock Commitment		$	85	​	Pull-through Rate Analysis		Closing Ratio		​	93	%
​	​		​	​	Pricing Model	​	Origination Costs, per loan	​	$	1.7	​
​	​	​	​	​	Discount Cash Flows	​	Mortgage Servicing Asset	​	​	1.0	%
​	​	​	​	​	​		​	​	​	​	​
Forward Commitments	​		13	​	Quoted prices for similar loans in active markets		Freddie Mac pricing system	​		$99 to $102.9	​
Total	​	$	98	​	​	​	​	​	​	​	​

​

At the end of the second quarter 2025 the Company transferred a corporate bond with a fair value of $2.4 million into level 3 due to a change in the fair value technique to using a present value discounted cash flow approach. During the quarter ended September 30, 2025 the Company wrote down an additional $200 thousand resulting in a fair value of $2.2 million. This write down incorporated management’s current expectations about the timing and amount of future cash flows, which were adjusted for expected prepayments and credit-related losses. The revised cash flows were then discounted using the bond’s original effective interest rate. Unobservable inputs used in the fair value measurement included the discount rate, expected cash flows, and loss severity.

​

53

Table of Contents

Non-Recurring Fair Value Measurements

​

We are required, on a non-recurring basis, to adjust the carrying value or provide valuation allowances for certain assets using fair value measurements in accordance with GAAP. The following is a summary of applicable non-recurring fair value measurements:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fair Value

​

​

​

​

​

​

​

​

Three Months Ended

​

Nine Months Ended

​

Measurement Date as of

​

​

Sept 30, 2025

​

Dec 31, 2024

​

September 30, 2025

​

September 30, 2025

​

September 30, 2025

​

​

Level 3

​

Level 3

​

Total

​

Total

​

Level 3

(in thousands)

Inputs

Inputs

Gains (Losses)

Gains (Losses)

Inputs

Assets

​

​

​

​

​

​

​

​

​

Individually evaluated loans

​

$

2,697

​

$

3,224

​

$

(886)

​

$

(527)

​

September 2025

Capitalized servicing rights

​

7,021

​

​

7,285

​

292

​

(264)

September 2025

Premises held for sale

​

—

​

​

419

​

(405)

​

(419)

September 2025

Total

​

$

9,718

​

$

10,928

​

$

(999)

​

$

(1,210)

​

There are no liabilities measured at fair value on a non-recurring basis as of September 30, 2025 and December 31, 2024.

​

​

54

Table of Contents

Quantitative information about the significant unobservable inputs within Level 3 non-recurring assets follows:

​

​	​	​	​	​	​	​	​	​	​	​	​
(in thousands, except ratios)		Fair Value September 30, 2025			Valuation Techniques		Unobservable Inputs		Range (Weighted Average)(a)
Assets		​						​	​		​
Individually evaluated loans	​	$	1,914		Fair value of collateral-appraised value		Loss severity	​	​	10% to 75%	​
​	​	​	​	​	​		Appraised value	​	​	$75 to $852	​
​	​	​	​	​	​	​	​	​	​	​	​
Individually evaluated loans	​		783		Discounted cash flow		Discount rate		​	4.00% to 6.06%	​
​	​	​	​	​	​		Cash flows	​	​	$370 to $489	​
​	​	​	​	​	​	​	​	​	​	​	​
Capitalized servicing rights	​		7,021		Discounted cash flow		Constant prepayment rate		​	8.05%	​
​	​		​				Discount rate		​	9.62%	​
​	​	​	​	​	​	​	​	​	​	​	​
Premises held for sale	​		—		Fair value of asset less selling costs		Appraised value	​	​	$0	​
​	​		​				Selling Costs		​	5%	​
Total	​	$	9,718				​		​		​

(a) Where dollar amounts are disclosed, the amounts represent the lowest and highest fair value of the respective assets in the population except for adjustments for market/property conditions, which represents the range of adjustments to individual properties.

​

​

​	​	​	​	​	​	​	​	​	​	​	​
​	​	​		​	​	​	​	​	​		​
(in thousands, except ratios)		Fair Value December 31, 2024			Valuation Techniques		Unobservable Inputs		Range (Weighted Average)(a)		​
Assets		​						​	​		​
Individually evaluated loans	​	$	2,733		Fair value of collateral-appraised value		Loss severity	​	​	10% to 65%	​
​	​	​	​	​	​		Appraised value	​	​	$257 to $1,260	​
​	​	​	​	​	​	​	​	​	​	​	​
Individually evaluated loans	​		491		Discount cash flow		Discount rate		​	4.00% to 4.99%	​
​	​	​	​	​	​		Cash flows	​	​	$497 to $501	​
​	​	​	​	​	​	​	​	​	​	​	​
Capitalized servicing rights	​		7,285		Discounted cash flow		Constant prepayment rate		​	6.52%	​
​	​		​				Discount rate		​	10.06%	​
​	​	​	​	​	​	​	​	​	​	​	​
Premises held for sale	​		419		Fair value of asset less selling costs		Appraised value	​	​	$440	​
​	​		​				Selling Costs		​	5%	​
Total	​	$	10,928						​		​

(a) Where dollar amounts are disclosed, the amounts represent the lowest and highest fair value of the respective assets in the population except for adjustments for market/property conditions, which represents the range of adjustments to individual properties.

​

There were no Level 1 or Level 2 non-recurring fair value measurements for the periods ended September 30, 2025 and December 31, 2024.  

​

​

​

​

55

Table of Contents

​

​

Individually evaluated loans

Loans are generally not recorded at fair value on a recurring basis. Periodically, we record non-recurring adjustments to the carrying value of loans based on fair value measurements for partial charge-offs of the uncollectible portions of those loans. Non-recurring adjustments can also include certain impairment amounts for collateral-dependent loans calculated when establishing the ACL. Such amounts are generally based on the fair value of the underlying collateral supporting the loan and, as a result, the carrying value of the loan less the calculated valuation amount does not necessarily represent the fair value of the loan. Real estate collateral is typically valued using appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally observable in the marketplace. However, the choice of observable data is subject to significant judgment, and there are often adjustments based on judgment in order to make observable data comparable and to consider the impact of time, the condition of properties, interest rates, and other market factors on current values. Additionally, commercial real estate appraisals frequently involve discounting of projected cash flows, which relies inherently on unobservable data. Therefore, non-recurring fair value measurement adjustments relating to real estate collateral have generally been classified as Level 3. Estimates of fair value for other collateral supporting commercial loans are generally based on assumptions not observable in the marketplace and therefore such valuations have been classified as Level 3.

​

Capitalized loan servicing rights

A loan servicing right asset represents the amount by which the present value of the estimated future net cash flows to be received from servicing loans exceed adequate compensation for performing the servicing. The fair value of loan servicing rights is estimated using a present value cash flow model. The most important assumptions used in the valuation model are the anticipated rate of the loan prepayments and discount rates. Adjustments are only recorded when the discounted cash flows derived from the valuation model are less than the carrying value of the asset. Although some assumptions in determining fair value are based on standards used by market participants, some are based on unobservable inputs and therefore are classified in Level 3 of the valuation hierarchy.

​

Other real estate owned (“OREO”)

OREO results from the foreclosure process on residential or commercial loans issued by the Company. Upon assuming the real estate, we record the property at the fair value of the asset less the estimated sales costs. Thereafter, OREO properties are recorded at the lower of cost or fair value less the estimated sales costs. OREO fair values are primarily determined based on Level 3 data including sales comparables and appraisals. There was no OREO as of September 30, 2025 and December 31, 2024.

​

Premises held for sale

Assets held for sale, identified as part of our strategic review and branch optimization exercise, were transferred from premises and equipment at the lower of amortized cost or fair value less the estimated sales costs. Assets held for sale fair values are primarily determined based on Level 3 data including sales comparables and appraisals.

​

​

​

​

​

​

​

​

​

​

​

​

56

Table of Contents

Summary of Estimated Fair Values of Financial Instruments

​

The estimated fair values, and related carrying amounts, of our financial instruments are included in the table below. Certain financial instruments and all non-financial instruments are excluded from disclosure requirements. Accordingly, the aggregate fair value amounts presented herein may not necessarily represent the underlying fair value of the Company.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

September 30, 2025

​

​

Carrying

​

Fair

​

​

​

​

​

​

​

​

​

(in thousands)

Amount

Value

Level 1

Level 2

Level 3

Financial Assets

​

​

​

​

​

Cash and cash equivalents

​

$

136,714

​

$

136,714

​

$

136,714

​

$

—

​

$

—

Available-for-sale debt securities

​

597,810

​

597,810

​

—

​

595,607

​

2,203

FHLB stock

​

8,560

​

n/a

​

n/a

​

n/a

​

n/a

Loans held for sale

​

​

5,545

​

​

5,545

​

​

—

​

​

5,545

​

​

—

Net loans

​

3,549,776

​

3,445,198

​

—

​

—

​

3,445,198

Accrued interest receivable

​

16,223

​

16,223

​

110

​

3,958

​

12,155

Derivative assets

​

9,878

​

9,878

​

—

​

9,767

​

111

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Financial Liabilities

​

​

​

​

​

Non-maturity deposits

​

$

2,966,203

​

$

2,810,261

​

$

—

​

$

2,810,261

​

$

—

Time deposits

​

​

981,993

​

​

979,251

​

​

—

​

​

979,251

​

​

—

Securities sold under agreements to repurchase

​

​

7,615

​

​

7,615

​

​

—

​

​

7,615

​

​

—

FHLB advances

​

132,341

​

132,283

​

—

​

132,051

​

232

Subordinated borrowings

​

52,229

​

49,240

​

—

​

49,240

​

—

Accrued interest payable

​

​

7,490

​

​

7,490

​

​

—

​

​

7,490

​

​

—

Derivative liabilities

​

7,995

​

7,995

​

—

​

7,989

​

6

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2024

​

​

Carrying

​

Fair

​

​

​

​

​

​

​

​

​

(in thousands)

Amount

Value

Level 1

Level 2

Level 3

Financial Assets

​

​

​

​

​

Cash and cash equivalents

​

$

72,162

​

$

72,162

​

$

72,162

​

$

—

​

$

—

Available-for-sale debt securities

​

521,018

​

521,018

​

—

​

521,018

​

—

FHLB stock

​

12,237

​

12,237

​

—

​

12,237

​

—

Loans held for sale

​

​

1,235

​

​

1,235

​

​

—

​

​

1,235

​

​

—

Net loans

​

3,147,096

​

2,999,290

​

—

​

—

​

2,999,290

Accrued interest receivable

​

3,974

​

3,974

​

—

​

3,974

​

—

Cash surrender value of bank-owned life insurance policies

​

​

81,858

​

​

81,858

​

​

—

​

​

81,858

​

​

—

Derivative assets

​

18,857

​

18,857

​

—

​

18,759

​

98

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Financial Liabilities

​

​

​

​

​

Non-maturity deposits

​

$

2,437,414

​

$

2,282,389

​

$

—

​

$

2,282,389

​

$

—

Time deposits

​

​

830,274

​

​

828,068

​

​

—

​

​

828,068

​

​

—

Securities sold under agreements to repurchase

​

​

7,062

​

​

7,062

​

​

—

​

​

7,062

​

​

—

FHLB advances

​

242,919

​

242,779

​

—

​

242,779

​

—

Subordinated borrowings

​

40,620

​

46,070

​

—

​

46,070

​

—

Derivative liabilities

​

16,565

​

16,565

​

—

​

16,565

​

—

​

​

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NOTE 11.           REVENUE FROM CONTRACTS WITH CUSTOMERS

​

We account for our various non-interest revenue streams and related contracts in accordance with “Revenue from Contracts with Customers” (“ASC 606”). ASC 606 is based on the consideration specified in the contract with a customer and excludes amounts collected on behalf of third parties. Revenue is recognized when we satisfy our performance obligation, which is generally when services are rendered and can be either satisfied at a point in time or over time. We recognize revenue at a point in time that is transactional in nature. We recognize revenue over time that is earned as services are performed and performance obligations are satisfied over time.

​

A substantial portion of our revenue is specifically excluded from the scope of ASC 606. This exclusion is associated with financial instruments, including interest income on loans and investment securities, in addition to loan derivative income and gains on loan and investment sales.

​

Disaggregation of Revenue

​

The following presents non-interest income, segregated by revenue streams in-scope and out-of-scope of Topic 606:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended September 30,

​

Nine Months Ended September 30,

(in thousands)

2025

2024

​

2025

2024

Non-interest income within the scope of ASC 606:

​

​

​

​

​

Trust management fees

​

$

3,397

​

$

3,476

​

$

10,721

​

$

10,464

Financial services fees

​

506

​

653

​

1,361

​

1,528

Interchange fees

​

2,202

​

1,977

​

5,973

​

5,842

Customer deposit fees

​

1,751

​

1,521

​

4,598

​

4,610

Other customer service fees

​

358

​

290

​

854

​

783

Total non-interest income within the scope of ASC 606

​

​

8,214

​

​

7,917

​

​

23,507

​

​

23,227

Total non-interest income not within the scope of ASC 606

​

​

2,353

​

​

1,736

​

​

624

​

​

4,269

Total non-interest income

​

$

10,567

​

$

9,653

​

$

24,131

​

$

27,496

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended September 30,

​

Nine Months Ended September 30,

(in thousands)

2025

2024

​

2025

2024

Timing of Revenue Recognition

​

​

​

​

​

Products and services transferred at a point in time

​

$

4,478

​

$

4,199

​

$

12,100

​

$

12,095

Products and services transferred over time

​

3,736

​

3,718

​

11,407

​

11,132

Total

​

$

8,214

​

$

7,917

​

$

23,507

​

$

23,227

​

Trust Management Fees

The trust management business generates revenue through a range of fiduciary services including trust and estate administration and investment management to individuals, businesses, not-for-profit organizations, and municipalities. These fees are primarily earned over time as we charge our customers on a monthly or quarterly basis in accordance with investment advisory agreements.  Fees are generally assessed based on a tiered scale of the average monthly market value of assets under management.  Certain fees, such as bill paying fees, distribution fees, real estate sale fees, and supplemental tax service fees, are recorded as revenue at a point in time upon the completion of the service.

​

Financial Services Fees

Bar Harbor Financial Services is a branch office of Osaic Institutions, Inc. (“Osaic”), a full-service third-party broker-dealer, conducting business under the assumed business name “Bar Harbor Financial Services.” Osaic is an independent registered broker-dealer and is not affiliated with the Company or its subsidiaries. We have a revenue sharing agreement with Osaic for any financial service fee income generated. Financial services fees are recognized at a point in time upon the completion of service requirements.

​

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Interchange Fees

We earn interchange fees from transaction fees that merchants pay whenever a customer uses a debit card to make a purchase from their store. The fees are paid to the card-issuing bank to cover handling costs, fraud, bad debt costs and the risk involved in approving the payment. Interchange fees are generally recognized as revenue at a point in time upon the completion of a debit card transaction.

​

Customer Deposit Fees

The Customer Deposit business offers a variety of deposit accounts with a range of interest rates, fee schedules and other terms, which are designed to meet the customer's financial needs. Additional depositor-related services provided to customers include ATM, bank-by-phone, internet banking, internet bill pay, mobile banking, and other cash management services, which include remote deposit capture, ACH origination, and wire transfers. These customer deposit fees are generally recognized at a point in time upon the completion of the service.

​

Other Customer Service Fees

We have certain incentive and referral fee arrangements with independent third parties in which fees are earned for new account activity, product sales, or transaction volume generated for the respective third parties. We also earn a percentage of the fees generated from third-party credit card plans promoted through the Bank. Revenue from these incentive and referral fee arrangements are recognized over time using the right to invoice measure of progress.

​

Contract Balances from Contracts with Customers

​

The following table provides information about contract assets or receivables and contract liabilities or deferred revenues from contracts with customers:

​

​	​	​	​	​	​	​
​		​			​
(in thousands)	​	September 30, 2025		​	December 31, 2024
Balances from contracts with customers only:		​			​
Other Assets	​	$	1,581	​	$	1,479
Other Liabilities	​		784	​		1,360

​

The timing of revenue recognition, billings and cash collections results in contract assets or receivables and contract liabilities or deferred revenue on the consolidated balance sheets. For most customer contracts, fees are deducted directly from customer accounts and, therefore, there is no associated impact on the accounts receivable balance. For certain types of service contracts, we have an unconditional right to consideration under the service contract and an accounts receivable balance is recorded for services completed. When consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a contract, a contract liability is recorded. Contract liabilities are recognized as revenue after control of the products or services is transferred to the customer and all revenue recognition criteria have been met.

​

Costs to Obtain and Fulfill a Contract

​

We currently expense contract costs for processing and administrative fees for debit card transactions. We also expense custody fees and transactional costs associated with securities transactions as well as third-party tax preparation fees. We have elected the practical expedient in ASC 340-40-25-4, whereby we recognize the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets we otherwise would have recognized is one year or less.

​

​

​

​

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NOTE 12.           GOODWILL AND OTHER INTANGIBLES

The activity impacting goodwill as of September 30, 2025 and December 31, 2024  is as follows:

​

​	​	​	​	​	​	​
(in thousands)		September 30, 2025			December 31, 2024
Balance at beginning of year	​	$	119,477	​	$	119,477
Acquisition (1)	​		22,342	​		—
Balance at end of year	​	$	141,819	​	$	119,477

​

(1) In the third quarter 2025, the Company completed its acquisition of Woodsville and recorded $22.3 million in goodwill. Refer to Note 2 for further details.

The components of other intangible assets as of September 30, 2025 and December 31, 2024 are as follows:

​

​	​	​	​	​	​	​	​	​	​
​	​	September 30, 2025
​	​	Gross		​	Accumulated		​	Net Intangible
(in thousands)		Intangible Assets			Amortization			Assets
Core deposit intangible (non-maturity deposits) (1)	​	$	22,691	​	$	(6,435)	​	$	16,256
Customer list and other intangibles	​		2,119	​		(1,386)	​		733
Total	​	$	24,810	​	$	(7,821)	​	$	16,989

​

(1) In the third quarter 2025, the Company completed its acquisition of Woodsville and recorded $14.0 million in CDI assets that will amortize over a 10 year period. Refer to Note 2 for further details.

​

​	​	​	​	​	​	​	​	​	​
​	​	December 31, 2024
​	​	Gross		​	Accumulated		​	Net Intangible
(in thousands)		Intangible Assets			Amortization			Assets
Core deposit intangible (non-maturity deposits)	​	$	9,483	​	$	(6,423)	​	$	3,060
Customer list and other intangibles	​		2,118	​		(1,240)	​		878
Total	​	$	11,601	​	$	(7,663)	​	$	3,938

​

Other intangible assets are amortized on a straight-line basis over their estimated lives, which range from five years to 11 years. Amortization expenses related to intangibles for the three months ended September 30, 2025 and 2024 were $466 thousand and $233 thousand, respectively. Amortization expenses related to intangibles for the nine months ended September 30, 2025 and 2024 were $932 thousand and $699 thousand, respectively.

The estimated aggregate future amortization expense for other intangible assets remaining at September 30, 2025 is as follows:

​	​	​	​
​	​	Other Intangible
(in thousands)		Assets
2025	​	$	582
2026	​	​	2,330
2027	​		2,330
2028	​		2,357
2029	​		1,583
2030	​		1,398
and thereafter	​		6,409
Total	​	$	16,989

​

​

​

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NOTE 13.           LEASES

A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. Most of our leases are for branches, ATM locations, and office space and have terms extending through 2046. All leases are classified as operating leases, and are recognized on the consolidated balance sheets as a right-of-use (“ROU”) asset with a corresponding lease liability.

The following table presents the consolidated statements of condition classification of the ROU assets and lease liabilities:

​

​	​	​	​	​	​	​	​	​
(in thousands)		Classification		September 30, 2025			December 31, 2024
Lease Right-of-Use Assets		​	​	​		​	​
Operating lease right-of-use assets		Other assets	​	$	9,560	​	$	8,586
Lease Liabilities			​			​
Operating lease liabilities		Other liabilities	​		10,277	​		9,240

​

The calculated amount of the ROU assets and lease liabilities in the table above are impacted by the length of the lease term and the discount rate used for the present value of the minimum lease payments. The lease agreements often include one or more options to renew at our discretion. If at lease inception, we consider the exercising of a renewal option to be reasonably certain, we will include the extended term in the calculation of the ROU asset and lease liability.

The following table presents the weighted average lease term and discount rate of the leases:

​

​	​	​	​	​	​	​
​		September 30, 2025			December 31, 2024
Weighted-average remaining lease term (in years)	​		​	​		​
Operating leases	​	11.05	​	​	11.74	​
Weighted-average discount rate	​		​	​		​
Operating leases	​	3.13	%	​	2.83	%

​

The following table represents lease costs and other lease information. As we have elected, for all classes of underlying assets, not to separate lease and non-lease components and instead to account for them as a single lease component, the variable lease cost primarily represents variable payments such as real estate taxes, common area maintenance and utilities.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Nine Months Ended

(in thousands)

​

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

Lease Costs

​

​

​

​

​

Operating lease cost

​

$

429

​

$

374

​

$

1,220

​

$

1,125

Variable lease cost

​

48

​

71

​

296

​

328

Total lease cost

​

$

477

​

$

445

​

$

1,516

​

$

1,453

​

Future minimum payments for operating leases with initial or remaining terms of one year or more as of September 30, 2025 are, as follows:

​

​	​	​	​
(in thousands)		Payments
Twelve Months Ended:		​
September 30, 2026	​	$	1,670
September 30, 2027	​		1,563
September 30, 2028	​		1,324
September 30, 2029	​		1,064
September 30, 2030	​		770
Thereafter	​		5,059
Total future minimum lease payments	​		11,450
Amounts representing interest	​		(1,173)
Present value of net future minimum lease payments	​	$	10,277

​

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​

ITEM 2.           MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

​

The following is management’s discussion and analysis of the major factors that influenced our results of operations and financial condition as of and for the three and nine months ended September 30, 2025 and should be read in conjunction with our unaudited consolidated financial statements and condensed notes thereto included elsewhere in this Form 10-Q as well as our audited consolidated financial statements and notes thereto included in our Form 10-K. The following discussion contains "forward-looking statements" that reflect our future plans, estimates, beliefs and expected performance. We caution that assumptions, expectations, projections, intentions or beliefs about future events may, and often do, vary from actual results and the differences can be material. Factors that could cause such differences are discussed in the sections titled "Cautionary Statement Regarding Forward-Looking Statements", “Part I, Item 1.A. Risk Factors” for the year ended December 31, 2024, and "Part II, Item 1A. Risk Factors" in this Form 10-Q. All amounts, dollars and percentages presented in this Form 10-Q are rounded and therefore approximate.

GENERAL

The Company is a bank holding company headquartered in Maine, providing a broad array of banking and nonbanking products and services to businesses and consumers primarily within our three-state footprint. The Company's primary sources of revenue, through the Bank, are net interest income (predominantly from loans and investment securities) and noninterest income (principally fees and other revenue from financial services provided to customers or ancillary services tied to loans and deposits).

​

● Liquidity remains strong, with cash and available for sale securities representing approximately 16% of our total assets at September 30, 2025. We maintain the ability to access sources of contingent liquidity at the FHLB and the Reserve Bank. We consider the Company's current liquidity position to be adequate to meet both short-term and long-term liquidity needs. Refer to “Liquidity and Cash Flows” for additional information.

​

● Capital remains strong, with both the Company and the Bank well capitalized under regulatory guidelines at period end as further described in Note 7 – “Capital Ratios and Shareholders’ Equity” to our unaudited consolidated financial statements.

​

● Asset quality remains strong, with non-performing assets to total assets of 0.25% as of September 30, 2025 and net charge-offs of $316 thousand, reflecting our continued strong credit performance in the midst of a challenging environment.

​

Merger Completion with  Guaranty Bancorp, Inc.

On July 31, 2025, we completed our acquisition of Guaranty Bancorp, Inc. (“Guaranty”), the parent company of Woodsville Guaranty Savings Bank (“Woodsville”), and its results of operations are included in the Company’s consolidated results since the date of acquisition. Therefore, the Company’s third quarter and nine months ended 2025 results reflect increased levels of average balances, net interest income, non-interest income and expense compared to its prior quarter and nine months ended of 2024 results. After purchase accounting fair value adjustments, the acquisition added $658.1 million of total assets, including $413.4 million of loans, as well as $641.2 million of total liabilities, primarily consisting of $531.3 million in deposits and $109.2 million in borrowings. The Company recorded goodwill of $22.3 million and core deposit intangibles of $14.0 million in other intangibles related to the acquisition.

​

With the completion of the acquisition, we increased our presence in New Hampshire with the addition of 9 branches. As of September 30, 2025 we have over 60 branches across Maine and New Hampshire. Our total assets increased to $4.7 billion as of September 30, 2025.

​

NON-GAAP FINANCIAL MEASURES

Our accounting and reporting policies conform to GAAP and the prevailing practices in the financial services industry. However, we also evaluate our performance by reference to certain additional financial measures discussed in this Form 10-Q that we identify as being “non-GAAP financial measures.” In accordance with SEC rules, we classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to

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adjustments that have the effect of excluding or including amounts, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the United States in our statements of income, balance sheets or statements of cash flows. Non-GAAP financial measures do not include operating and other statistical measures or ratios or statistical measures calculated using exclusively either financial measures calculated in accordance with GAAP, operating measures or other measures that are not non-GAAP financial measures or both.

​

The non-GAAP financial measures that we discuss in this Form 10-Q should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate the non-GAAP financial measures that we discuss in this Form 10-Q may differ from that of other companies reporting measures with similar names. You should understand how such other banking organizations calculate their financial measures similar or with names similar to the non-GAAP financial measures we have discussed in this Form 10-Q when comparing such non-GAAP financial measures.

​

QUARTERLY PERFORMANCE SUMMARY

Earnings (quarter ended September 30, 2025, compared to the same period of 2024 unless otherwise stated)

​

● Third quarter 2025 GAAP net income of $8.9 million or $0.54 per diluted share and adjusted earnings (Non-GAAP) of $15.4 million or $0.95 per diluted share compared to GAAP and adjusted earnings (Non-GAAP) net income of $12.2 million and $0.80 per diluted share for the third quarter 2024.  

​

● Adjusted return on assets (Non-GAAP) was 1.35% versus 1.20% and adjusted return on equity was 12.16% compared to 10.68%. Adjusted return on assets (Non-GAAP)  increased due to disciplined loan pricing, managed deposit costs and Woodsville acquisition.   See “Financial Position” for further discussion.  

​

● Net interest income was $37.0 million compared to $29.0 million and net interest margin (“NIM”) was 3.56%, versus 3.15%. Loan income increased $6.4 million for the third quarter 2025 compared to the third quarter 2024 driven by $4.6 million from the Woodsville acquisition and $1.2 million driven by rate changes on the commercial portfolio.

​

● Allowance to total loans increased to 0.95% from 0.94% as net charge-offs on loans continue to be minimal and stable while credit quality continues to remain strong. Total non-accruing loans to total loans was 0.27% compared to the prior third quarter 2024 at 0.23%.

​

● Non-interest income increased $914 thousand in the third quarter 2025 to $10.6 million compared to $9.7 million in the same quarter 2024 primarily driven by customer service fees driven by the Woodsville acquisition. Customer Derivative income increased $697 thousand year over year driven by timing of swaps and the interest rate environment.

​

● Non-interest expenses increased $8.0 million to $32.7 million in the third quarter 2025 compared to $24.8 million in the third quarter 2024 driven by $5.0 million in acquisition, conversion expenses, $1.6 million increase in Salaries and benefits, $474 increased Occupancy and equipment, and Other expenses increased $520 thousand for the third quarter 2025 compared to the third quarter 2024.

​

● The efficiency ratio improved to 56.7% compared to 62.09% reflecting net interest income growth and continued discipline on loan and deposit pricing year over year.

​

Financial Position (September 30, 2025, compared to June 30, 2025 unless otherwise stated)

​

● Total assets increased $610 million or 15% to $4.7 billion at the end of the third quarter 2025 primarily due to the acquisition of Woodsville. The Company used available liquidity, including deposits and cash acquired from Woodsville, to repay wholesale borrowings.  

​

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● Total cash and cash equivalents were $136.7 million at the end of the third quarter 2025, compared to $87.0 million at the end of the second quarter 2025. Interest-earning deposits held with other banks increased to $94.0 million at the end of the third quarter 2025, compared to $36.1 million at the end of the second quarter and yielded 4.49% and 4.68%, respectively. The change in cash balances was driven by the acquisition of Woodsville.

​

● Available-for-sale debt securities increased $69.1 million to $597.8 million compared to $528.7 million at second quarter 2025 driven by acquired securities of $115.6 million from Woodsville, organic purchases of $15.1 million, calls and paydowns of $31.5 million and sales of $40.8 million. Fair value adjustments decreased the securities portfolio by $53.0 million at quarter-end compared to $64.1 million at the end of the second quarter. During the third quarter, there was a $241 thousand gain on available-for-sale debt securities. There was no provision for available-for-sale investments in the third quarter of 2025 and 2024.  We have one nonaccrual corporate bond of $8.0 million that we have written-off $5.8 million as of September 30, 2025, of which $4.9 million is recognized in losses on available-for-sale debt securities. The quarter-to-date weighted average yield of the securities portfolio was 4.14% compared to 3.86% at the end of second quarter driven by continued purchase of higher coupon fixed-rate securities and acquisition of the Woodsville portfolio. As of third and second quarter-end, our securities portfolio had an average life of 7.4 years and 8.4 years respectively, with an effective duration of 5.3 years and 5.5 years. All securities remain classified as available for sale to provide flexibility in asset funding and other opportunities as they arise.

​

● FHLB stock declined $4.1 million to $8.6 million at September 30, 2025 driven by the decline in FHLB borrowings as a result of the repayment of $119.2 million in FHLB advances. This was partially offset by the acquisition of $4.4 million in stock and the assumption of $97.1 million of borrowings from Woodsville.

​

● Total loans increased to $3.6 billion from $3.2 billion in the second quarter driven by acquisition growth of $413.4 million from Woodsville. Total Commercial loans increased to $2.3 billion from $2.2 billion in the second quarter with $143.5 million in acquisition growth and an increase of $36.8 million organic growth which equates to an annualized growth rate of 5%. Residential real estate loans increased to $1.0 billion driven by a $248.5 million increase from acquisition loans.  Loans held for sale grew $2.7 million as we experienced continued seasonal increase in demand for mortgage products with contributed changes in the interest rate environment.  

​

● The allowance for credit losses on loans increased $5.1 million which was driven by $4.0 million in reserves on non-PCD loans, $1.6 million in PCD loans from Woodsville and $316 thousand in net charge-offs. As a result, the allowance grew to $33.9 million at the end of the third quarter 2025 compared to $28.9 million at the end of the second quarter 2025. The allowance for credit losses to total loans coverage ratio for the third quarter 2025 compared to the second quarter 2025 increased to 0.95% from 0.92%.    

​

● Premises and equipment increased $6.2 million in the third quarter to $58.8 million compared to $52.6 million at the end of the second quarter 2025 driven by $6.6 million in acquired assets from Woodsville. There was a $206 thousand gain on sale of premises and equipment from the sale of driven by the sale of two properties.

​

● Goodwill increased $22.3 million in the third quarter 2025 as the result of the acquisition of Woodsville assets and other intangible assets increased $13.5 million in the third quarter 2025 compared to the second quarter 2025 to $17.0 million driven by $14 million core deposit intangible asset of the acquisition offset by amortization.

​

● Cash surrender value of bank-owned life insurance increased $12.5 million driven by $11.8 million in acquired bank-owned life insurance and $665 thousand in returns within the plan compared to the second quarter 2025.

​

● Total deposits grew to $3.9 billion at the end of the third quarter of 2025 driven by $531.3 million in acquired deposits related to the Woodsville acquisition complimented by 16% annualized quarter to date organic growth compared to the second quarter 2025. The increase was driven primarily by non-interest bearing demand and money market accounts.

​

● Senior borrowings decreased $116.5 million at the end of third quarter 2025 driven by loan paydowns, deposits and proceeds from investment portfolio sales were strategically utilized to decrease borrowing levels.  $97.0

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million in borrowings were acquired from Woodsville of which $15.0 million was paid off shortly after acquisition. $119.2 million of the Company’s senior borrowings were paid down within the quarter.

​

● The Company's book value per share was $31.22 as of the end of the third quarter 2025 compared to $30.60 at the end of the second quarter 2025.  Tangible book value per share (non-GAAP) was $21.70 at the end of the third quarter 2025, compared to $22.58 at the end of the second quarter 2025.

​

COMPARISON OF FINANCIAL CONDITION AT SEPTEMBER 30, 2025 AND DECEMBER 31, 2024

Cash and cash equivalents

Total cash and cash equivalents were $136.7 million at the end of the third quarter 2025, compared to $72.2 million at the end of the fourth quarter 2024.  Interest-earning deposits held with other banks increased at the end of the third quarter 2025 to $94.0 million, compared to $37.9 million at the end of the fourth quarter and yielded 4.49% and 4.92%, respectively. The change in cash balances was driven by pay downs in loans and the acquisition of Woodsville cash.

​

Securities

Securities available for sale was $597.8 million compared to $521.0 million in the fourth quarter 2024 driven by purchases of $67.7 million, $115.0 million in acquired investments, offset by $40.8 million in acquired investments sold, $73.1 million in paydowns and called securities. The average yield of the total securities portfolio for the third quarter 2025 was 4.14% compared to 3.69% for the fourth quarter 2024 primarily due to the change in the profile of the yield curve and a shift from commercial lending obligation investments to agencies and higher coupon fixed-rate securities. Fair value adjustments were $53.0 million at the end of the third quarter 2025 compared to $62.3 million at the end of the fourth quarter 2024. As of the end of the third quarter 2025 and fourth quarter 2024, respectively, our securities portfolio maintained an average life of 7.4 and 9.0 years with an effective duration of 5.3 and 5.0 years. All securities remain classified as available for sale to provide flexibility in asset funding and other opportunities as they arise.

​

Management recorded an allowance for credit losses on two corporate notes where there was a change in future estimated cash flows during the year ended December 31, 2024. A discounted cash flow approach was used to determine the amount of the allowance. The cash flows expected to be collected, after considering expected prepayments, are discounted at the original effective interest rate. During the third quarter 2025, there was a $241 thousand gain on sale of acquired available-for-sale debt securities, and a $200 thousand write-off of the corporate debt securities compared to $5.6 million in the second quarter in corporate debt securities due to credit deterioration. For the nine months ended September 30, 2025, management wrote down $5.8 million on available-for-sale debt securities and other receivables. The losses were included in net gain (loss) on available-for-sale debt securities in the consolidated statements of income. The losses were driven by credit deterioration caused by fraudulent activity by the borrower on a security initially investment-grade.

​

Federal Home Loan Bank Stock

Federal Home Loan Bank stock decreased to $8.6 million at the end of the third quarter 2025 compared to $12.2 million at the fourth quarter 2024.  The acquisition of $4.4 million in FHLB stock was offset by net redemptions of $8.0 million in FHLB stock primarily driven by the strategic deployment of cash to pay down advances from the FHLB.

​

Loans

Total loans were $3.6 billion driven by the acquisition of $413.4 million from Woodsville. Total commercial loans increased to $2.3 billion from $2.1 billion in the fourth quarter 2024 with $143.5 million from the acquisition and organic growth of $75.1 million. Residential real estate loans increased to $1.0 billion driven by $248.5 million in acquired loans.  Loans held for sale increased $4.3 million driven by demand for mortgage products with corresponding changes in the interest rate environment.  

​

Allowance for Credit Losses

The allowance for credit losses on loans increased $5.2 million to $33.9 million at the end of the third quarter 2025 compared to $28.7 million at the end of the fourth quarter 2024 driven by $4.0 million in reserves on  non-PCD loans and $1.6 million in PCD loans from Woodsville. The allowance for credit losses to total loans coverage ratio was 0.95% at the end of third quarter 2025 compared to 0.91% at the end of the fourth quarter 2024.  Strong asset quality metrics and general macroeconomic trends impact the loan portfolio and drive ACL levels.

​

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Table of Contents

Deposits

Total deposits grew to $4.0 billion at the end of the third quarter of 2025 driven by $531.3 million in acquired deposits related to the Woodsville acquisition complimented by $149.2 million in organic growth compared to the fourth quarter 2024. The increase was driven primarily by the acquisition of Woodsville and the organic growth of  $41.4 in interest-bearing demand, $27.9 million in non-interest bearing demand, $30.4 million in money market, and  $52.8 million in time accounts.

​

Borrowings

Senior borrowings decreased $110.0 million at the end of third quarter 2025 to $140.0 million as loan paydowns, deposits and proceeds from investment portfolio sales were strategically utilized to decrease borrowing levels.  $97.0 million in borrowings were acquired from Woodsville of which $15.0 million were paid off shortly after acquisition. As a result of the acquisition, we acquired $11.2 million of subordinated debt from Woodsville in the third quarter 2025.  

​

Equity

The Company's book value per share was $31.22 as of the end of the third quarter 2025 compared to $30.00 at the end of the fourth quarter 2024.  Tangible book value per share (non-GAAP) was $21.70 at the end of the third quarter 2025, compared to $21.93 at the end of the fourth quarter 2024.

​

​

COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND SEPTEMBER 30, 2024

​

Net Income

Third quarter 2025 GAAP net income was $8.9 million or $0.54 per diluted share and adjusted earnings (Non-GAAP) was $15.4 million or $0.95 per diluted share compared to GAAP net income and adjusted earnings (Non-GAAP) of $12.2 million or $0.80 per diluted share in the third quarter of 2024.  

​

At September 30, 2025 year-to-date GAAP net income was $25.2 million or $1.60 per diluted share and adjusted earnings (Non-GAAP) was $36.6 million or $2.33 per diluted share compared to GAAP net income of $32.5 million or $2.13 per diluted share and adjusted earnings (Non-GAAP) of $32.2 million or $2.11 per diluted share in the nine months ended September 30, 2024.  

​

The net interest margin increased to 3.56% in the third quarter 2025 compared to 3.15% in the same respective quarter 2024. Loan income increased $6.4 million for the third quarter 2025 compared to the third quarter 2024 driven by $4.6 million from the Woodsville acquisition and $1.2 million by rate changes on the commercial portfolio.

​

The net interest margin for the nine months ended September 30, 2025 was 3.32% compared to 3.14% for the nine months ended September 30, 2024.

​

Interest and Dividend Income

Total interest and dividend income increased by 15.1% or $7.3 million to $55.9 million in the third quarter 2025 compared to $48.6 million in the prior year primarily driven by the repricing of commercial adjustable-rate loans and $265.3 million higher loan balances within the commercial real estate portfolio driven by $117.8 million in acquired loans. Yields on earning assets grew to 5.36% compared to 5.24% in the third quarter 2024. The yield on commercial real estate loans grew to 5.88% in the third quarter 2025 from 5.67% in the third quarter 2024.  Total loan yield growth was partially offset by a decrease in the commercial and industrial yields to 6.45% for the third quarter 2025 from 6.98% in the third quarter 2024.  Consumer yield remained flat at 7.23% for the third quarter 2025 and 2024 respectively.

​

Total interest and dividend income increased by 7.7% to $152.1 million for the nine months ended 2025 compared to $141.2 million in the prior year primarily driven by the same reasons noted for the quarter. Yields on earning assets grew to 5.23% for the nine months ended 2025 compared to 5.19% for the nine months ended 2024. The yield on commercial real estate loans grew to 5.73% for the nine months ended 2025 from 5.57% for the nine months ended 2024. The residential real estate yield increased from 4.12% to 4.23% and the commercial and industrial yield decreased to 6.47% from 6.80% for the nine months ended 2025 and 2024.

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Table of Contents

Net Interest Income and Net Interest Margin

The net interest margin increased to 3.56% in the third quarter 2025 compared to 3.15% in the same respective quarter 2024. Loan income increased $6.4 million for the third quarter 2025 compared to the third quarter 2024 driven by $4.6 million from the Woodsville acquisition and $1.2 million by rate changes on the commercial portfolio.

​

The net interest margin was 3.32% for the nine months ended 2025 compared to 3.14% in same respective quarter 2024. As average loan balances grew $231.6 million year over year, the yield on loans grew to 5.48% for the six months ended 2025, up from 5.40% in the same period for 2024.  Costs of interest-bearing deposits decreased to 2.41% for the nine months ended 2025 compared to 2.59% for the nine months ended 2024.  

​

Total interest expense decreased $659 thousand for deposits in the third quarter 2025 compared the third quarter 2024.  Deposit costs were up $245 thousand or 1.5% year over year driven by the acquisition of $531.3 million in deposits from Woodsville partially offset by lower cost of funds on interest-bearing deposits yields at 2.12% from 2.35% for the third quarter ended 2024.  Borrowing costs decreased $904 thousand or 26.2% driven by the $216.2 million in paydowns offset partially by $97 million in acquisition borrowings accompanied by lower borrowing rates at 4.04% for the third quarter 2025 compared to 4.57% for the third quarter 2024.  

​

Total interest expense for the nine months ended September 30, 2025 was $56.3 million compared to $56.5 million for the same period ended 2024 driven by higher cost of funds on deposits.  Cost of borrowings decreased $2.1 million driven by the strategic deployment of cash to pay down advances from FHLB.

​

Provision for Credit Losses

The Company recorded a $4.0 million reserve on non-PCD loans established through provision expense.

​

There was no provision for available-for-sale investments in the third quarter of 2025 and 2024.  We have one nonaccrual corporate bond of $8.0 million that we have written-off $5.8 million as of September 30, 2025, of which $4.9 million is recognized in losses on available-for-sale debt securities. At December 31, 2024 we had $9.0 million of corporate bonds that we allocated $568 thousand in related allowance for credit losses. In the first quarter of 2025, a $1.0 million nonaccrual security matured and was transferred to a financing receivable non-cash asset. In the second quarter 2025, the Company  determined that it no longer intended to hold the security until the recovery of the amortized cost basis.

​

Non-Interest Income

Non-interest income increased $914 thousand in the third quarter 2025 to $10.6 million compared to $9.7 million in the same quarter 2024 primarily driven by customer service fees which increased $523 thousand driven by the Woodsville acquisition. Customer Derivative income increased $697 thousand year over year driven by timing of swaps and the interest rate environment. Trust management fee income offset decreases $226 thousand driven by financial service income timing.  

​

Non-interest income for the nine months ended 2025 was $24.1 million compared to $27.5 million for the same period ended 2024 driven by the write down of one available-for-sale debt security previous discussed above.

​

Non-Interest Expense

Non-interest expenses increased $8.0 million to $32.7 million in the third quarter 2025 compared to $24.8 million in the third quarter 2024 driven by $5.0 million in acquisition expenses related to Woodsville. Salaries and benefits increased $1.6 million to $15.9 million in the third quarter 2025 compared to $14.4 million in the third quarter 2024 primarily due to cost-of-living adjustments, additional salary from the Woodsville acquisition, and employee insurance costs. Occupancy and equipment increased $474 thousand driven by higher computer processing fees and maintenance contract costs.  Professional services fees decreased $145 thousand driven by timing, while marketing increased $221 thousand and amortization of intangibles increased $233 thousand due to the acquisition at the end of the third quarter 2025. Other expenses increased $520 thousand for the third quarter 2025 compared to the third quarter 2024 due primarily to increases in software expenses. Gain on sale of property increased year-over-year by $206 thousand driven by the sale of two properties in the third quarter 2025.

​

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Table of Contents

Non-interest expenses increased $11.8 million to $83.9 million for the nine months ended 2025 compared to the same period of 2024 driven primarily by $6.4 million in acquisition expenses from the Woodsville acquisition and $1.6 million in salaries and benefits mostly due to cost of living increases. Occupancy and equipment costs for the nine months ended 2025 were $10.8 million compared to $10.2 million for the same period 2024 driven by computer processing fees, maintenance contracts and lease expenses.

​

Income Tax Expense

Income tax expense was $2.2 million for the third quarter 2025 compared to $1.4 million for the third quarter of 2024, respectively. Our GAAP effective tax rate third quarter 2025 and the third quarter 2024 was 20% compared to 10% and the effective tax rate on adjusted earnings was 22% and 20%, respectively.  The prior year decrease in taxes and tax rate represents a one-time multiple year tax refund on tax exempt loan income and a state apportionment adjustment.  

​

Income tax expense for the nine months ended 2025 was $6.1 million compared to $6.5 million in the same period 2024. The effective tax rate for the nine months ended 2025 was 19% compared to 17% for the same period 2024.

Liquidity and Cash Flows

Liquidity is measured by our ability to meet short-term cash needs at a reasonable cost or minimal loss. We seek to obtain favorable sources of liabilities and to maintain prudent levels of liquid assets to satisfy varied liquidity demands. Besides serving as a funding source for maturing obligations, liquidity provides flexibility in responding to customer-initiated needs. Many factors affect our ability to meet liquidity needs, including variations in the markets served by our network of offices, mix of assets and liabilities, reputation and credit standing in the marketplace, and general economic conditions.

​

The Bank actively manages its liquidity position through target ratios established under its Asset-Liability Management Policy. Continual monitoring of these ratios, by using historical data and through forecasts under multiple rate and stress scenarios, allows the Bank to employ strategies necessary to maintain adequate liquidity. The Bank's policy is to maintain a liquidity position of at least 8% of total assets. A portion of the Bank’s deposit base has been historically seasonal in nature, with balances typically declining in the winter months through late spring, during which period the Bank’s liquidity position tightens.

​

As of September 30, 2025, available same-day liquidity totaled approximately $1.0 billion, including cash, borrowing capacity at FHLB and the Federal Reserve Discount Window and various lines of credit. Additional sources of liquidity include cash flows from operations, wholesale deposits, cash flow from our amortizing securities and loan portfolios. As of September 30, 2025, we had unused borrowing capacity at the FHLB of $384.7 million, unused borrowing capacity at the Reserve Bank of $98.0 million and unused lines of credit totaling $41.0 million, in addition to $136.7 million in cash.

​

The Bank maintains a liquidity contingency plan approved by the Bank’s Board of Directors. This plan addresses the steps that would be taken in the event of a liquidity crisis, and identifies other sources of liquidity available to us. Our management believes the level of liquidity is sufficient to meet current and future funding requirements. However, changes in economic conditions, including consumer savings habits and availability or access to the brokered deposit market could potentially have a significant impact on our liquidity position.

​

Capital Resources

Please refer to “Comparison of Financial Condition at September 30, 2025 and December 31, 2024 - Equity” for a discussion of shareholders’ equity together with Note 7 - “Capital Ratios and Shareholders’ Equity” in the unaudited consolidated financial statements. Additional information about regulatory capital is contained in the notes to the consolidated financial statements and in our most recent Form 10-K.

​

We expect to continue our current practice of paying quarterly cash dividends with respect to our common stock subject to our Board of Directors’ discretion to modify or terminate this practice at any time and for any reason without prior notice. We believe our quarterly dividend rate per share as approved by our Board of Directors, enables us to balance our multiple objectives of managing our business and returning a portion of our earnings to our shareholders. Historically, and a practice we intend to continue, our principal cash expenditure is the payment of dividends on our common stock, if as and when declared by our Board of Directors. Dividends were paid to our shareholders in the aggregate amount of $15.0

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Table of Contents

million and $13.3 million for the nine months ended September 30, 2025 and 2024, respectively. All dividends declared and distributed by us will be in compliance with applicable state corporate law and regulatory requirements.

​

Off-Balance Sheet Arrangements

We are, from time to time, a party to certain off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources, that may be material to investors.

​

Our off-balance sheet arrangements are limited to standby letters of credit whereby the Bank guarantees the obligations or performance of certain customers. These letters of credit are sometimes issued in support of third-party debt. The risk involved in issuing standby letters of credit is essentially the same as the credit risk involved in extending loan facilities to customers, and such letters of credit are subject to the same origination, portfolio maintenance and management procedures in effect to monitor other credit products. The amount of collateral obtained, if deemed necessary by the Bank upon issuance of a standby letter of credit, is based upon management's credit evaluation of the customer.

​

Our off-balance sheet arrangements have not changed materially since previously reported in our Form 10-K.

​

IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS

Please refer to Note 1 – “Basis of Presentation - Recent Accounting Pronouncements” of the Consolidated Financial Statements in this Form 10-Q and Note 1 - “Summary of Significant Accounting Policies” of the Consolidated Financial Statements to our Form 10-K.

​

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our Consolidated Financial Statements were prepared in accordance with GAAP and follow general practices within the industries in which we operate. The most significant accounting policies we follow are presented in Note 1—“Summary of Significant Accounting Policies” of the Consolidated Financial Statements to our Form 10-K. Application of these principles requires us to make estimates, assumptions, and judgments that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Most accounting policies are not considered by management to be critical accounting policies. Several factors are considered in determining whether or not a policy is critical in the preparation of the Consolidated Financial Statements. These factors include among other things, whether the policy requires management to make difficult, subjective, and complex judgments about matters that are inherently uncertain and because it is likely that materially different amounts would be reported under different conditions or using different assumptions. The accounting policies which we believe to be most critical in preparing our Consolidated Financial Statements are presented in the section titled “Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates” included in our Form 10-K. There have been no significant changes in our application of critical accounting policies and estimates since December 31, 2024. Refer to Note 1 – “Basis of Presentation - Recent Accounting Pronouncements” of the consolidated financial statements for discussion of accounting pronouncements issued but yet to be adopted and implemented.

​

​

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SELECTED FINANCIAL DATA

​

The following summary data is based in part on the unaudited consolidated financial statements and accompanying notes and other information appearing elsewhere in this Form 10-Q or prior SEC filings.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

​

Nine Months Ended

​

​

September 30,

​

​

September 30,

​

2025

2024

​

2025

2024

PER SHARE DATA

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Net earnings, diluted

​

$

0.54

​

$

0.80

​

​

$

1.60

​

$

2.13

​

Adjusted earnings, diluted(1)

​

0.95

​

0.80

​

​

2.33

​

2.11

​

Total book value

​

31.22

​

30.12

​

​

31.22

​

30.12

​

Tangible book value per share(1)

​

21.70

​

22.02

​

​

21.70

​

22.02

​

Market price at period end

​

30.46

​

30.84

​

​

30.46

​

30.84

​

Dividends

​

0.32

​

0.30

​

​

0.94

​

0.88

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

PERFORMANCE RATIOS(2)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Return on assets

​

0.78

%

1.20

%

​

0.79

%

1.09

%

Adjusted return on assets(1)

​

1.35

​

1.20

​

​

1.15

​

1.08

​

Pre-tax, pre-provision return on assets

​

​

1.30

​

1.37

​

​

1.14

​

1.35

​

Adjusted pre-tax, pre-provision return on assets (1)

​

​

1.71

​

1.37

​

​

1.49

​

1.34

​

Return on equity

​

6.99

​

10.68

​

​

7.02

​

9.97

​

Adjusted return on equity(1)

​

12.16

​

10.68

​

​

10.20

​

9.86

​

Return on tangible equity

​

​

10.07

​

​

14.90

​

​

​

9.90

​

​

14.16

​

Adjusted return on tangible equity(1)

​

17.23

​

14.90

​

​

14.27

​

14.01

​

Net interest margin, fully taxable equivalent(1) (3)

​

3.56

​

3.15

​

​

3.32

​

3.14

​

Efficiency ratio(1)

​

56.70

​

62.09

​

​

60.02

​

62.52

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

FINANCIAL DATA (In millions)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total assets

​

$

4,717

​

$

4,030

​

​

$

4,717

​

$

4,030

​

Total earning assets(4)

​

4,336

​

3,720

​

​

4,336

​

3,720

​

Total available-for-sale debt securities

​

598

​

536

​

​

598

​

536

​

Total loans

​

3,584

​

3,082

​

​

3,584

​

3,082

​

Total allowance for credit losses

​

34

​

29

​

​

34

​

29

​

Total goodwill and intangible assets

​

159

​

124

​

​

159

​

124

​

Total deposits

​

3,948

​

3,261

​

​

3,948

​

3,261

​

Total shareholders' equity

​

521

​

460

​

​

521

​

460

​

Net income

​

9

​

12

​

​

25

​

33

​

Adjusted income(1)

​

15

​

12

​

​

37

​

32

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

ASSET QUALITY AND CONDITION RATIOS

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Net charge-offs (recoveries)(5)/average loans

​

0.04

%

0.01

%

​

0.03

%

0.01

%

Allowance for credit losses/total loans

​

0.95

​

0.94

​

​

0.95

​

0.94

​

Loans/deposits

​

91

​

95

​

​

91

​

95

​

Shareholders' equity to total assets

​

11.04

​

11.41

​

​

11.04

​

11.41

​

Tangible shareholders' equity to total tangible assets(1)

​

7.94

​

8.61

​

​

7.94

​

8.61

​

(1) Non-GAAP financial measure. Refer to the Reconciliation of Non-GAAP Financial Measures section of the “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in this Form 10-Q for additional information.

(2) All performance ratios are annualized and are based on average balance sheet amounts, where applicable.

(3) Fully taxable equivalent considers the impact of tax-advantaged investment securities and loans.

(4) Earning assets includes non-accruing loans and interest-bearing deposit with other banks. Securities are valued at amortized cost.

(5) Current quarter annualized.

​

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Table of Contents

CONSOLIDATED LOAN AND DEPOSIT ANALYSIS (UNAUDITED)

​

The following tables present the quarterly trend in loans by collateral type and deposits and accompanying growth rates as of September 30, 2025 on an annualized basis:

​

LOAN ANALYSIS

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Organic Annualized

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Growth %

​

​

​

​

​

Acquired WGSB

​

​

​

​

​

​

​

​

​

​

​

​

​

Quarter

​

​

Year

(in thousands, except ratios)

Sept 30, 2025

Balances (1)

​

Jun 30, 2025

Mar 31, 2025

Dec 31, 2024

Sep 30, 2024

to Date

​

to Date

Commercial real estate

​

$

1,942,659

​

$

117,832

​

$

1,767,206

​

$

1,762,132

​

$

1,741,223

​

$

1,677,310

13

%

​

6

%

Commercial and industrial

​

405,759

​

25,651

​

400,908

​

370,683

​

388,599

​

382,554

(21)

​

(3)

​

Total commercial loans

​

2,348,418

​

143,483

​

2,168,114

​

2,132,815

​

2,129,822

​

2,059,864

7

​

​

5

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Residential real estate

​

1,025,266

​

248,484

​

796,184

​

807,514

​

826,492

​

836,566

(10)

​

(8)

​

Consumer

​

126,345

​

16,215

​

111,036

​

105,404

​

103,803

​

103,415

(3)

​

8

​

Tax exempt and other

​

83,687

​

5,226

​

77,330

​

78,507

​

86,979

​

81,890

6

​

(13)

​

Total loans

​

$

3,583,716

​

$

413,408

​

$

3,152,664

​

$

3,124,240

​

$

3,147,096

​

$

3,081,735

2

%

​

1

%

​

​

DEPOSIT ANALYSIS

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Annualized

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Growth %

​

​

​

​

​

Acquired WGSB

​

​

​

​

​

​

​

​

​

​

​

​

​

Quarter

​

​

Year

(in thousands, except ratios)

Sept 30, 2025

Balances (1)

​

Jun 30, 2025

Mar 31, 2025

Dec 31, 2024

Sep 30, 2024

to Date

​

to Date

Non-interest bearing demand

​

$

692,780

​

$

89,274

​

$

552,074

​

$

547,401

​

$

575,649

​

$

604,963

41

%

​

8

%

Interest-bearing demand

​

1,137,362

​

185,802

​

931,854

​

930,031

​

910,191

​

913,910

8

​

6

​

Savings

​

647,428

​

104,792

​

542,579

​

551,280

​

545,816

​

544,235

—

​

(1)

​

Money market

​

488,633

​

52,470

​

370,709

​

405,326

​

405,758

​

380,624

71

​

10

​

Total non-maturity deposits

​

2,966,203

​

432,338

​

2,397,216

​

2,434,038

​

2,437,414

​

2,443,732

24

​

6

​

Time

​

981,993

​

98,951

​

894,772

​

862,773

​

830,274

​

817,354

(5)

​

8

​

Total deposits

​

$

3,948,196

​

$

531,289

​

$

3,291,988

​

$

3,296,811

​

$

3,267,688

​

$

3,261,086

16

%

​

6

%

71

Table of Contents

AVERAGE BALANCES AND AVERAGE YIELDS/RATES (UNAUDITED)

​

The following tables present average balances and average yields and rates on an annualized fully taxable equivalent basis for the periods included:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended September 30,

​

​

2025

​

2024

​

​

Average

​

​

​

​

Yield/

​

Average

​

​

​

​

Yield/

(in thousands, except ratios)

Balance

Interest(3)

Rate(3)

​

Balance

Interest(3)

Rate(3)

Assets

​

​

​

​

​

​

​

Interest-earning deposits with other banks

​

$

81,709

​

$

924

​

4.49

%

​

$

54,897

​

$

765

​

5.54

%

Available-for-sale debt securities

​

​

631,572

​

​

6,589

​

4.14

​

​

​

591,331

​

​

5,733

​

3.86

​

FHLB stock

​

​

11,168

​

​

217

​

7.71

​

​

​

10,158

​

​

258

​

10.10

​

Loans:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial real estate

​

​

1,887,267

​

​

27,970

​

5.88

​

​

​

1,645,933

​

​

23,445

​

5.67

​

Commercial and industrial

​

483,380

​

​

7,860

​

6.45

​

​

​

473,049

​

​

8,297

​

6.98

​

Residential

​

963,311

​

​

10,731

​

4.42

​

​

​

851,426

​

​

8,793

​

4.11

​

Consumer

​

120,941

​

​

2,205

​

7.23

​

​

​

101,230

​

​

1,840

​

7.23

​

Total loans (1)

​

3,454,899

​

​

48,766

​

5.60

​

​

​

3,071,638

​

​

42,375

​

5.49

​

Total earning assets

​

4,179,348

​

​

56,496

​

5.36

%

​

​

3,728,024

​

​

49,131

​

5.24

%

Cash and due from banks

​

​

38,709

​

​

​

​

​

​

​

​

34,036

​

​

​

​

​

​

Allowance for credit losses

​

​

(31,246)

​

​

​

​

​

​

​

​

(28,893)

​

​

​

​

​

​

Goodwill and other intangible assets

​

​

139,822

​

​

​

​

​

​

​

​

123,761

​

​

​

​

​

​

Other assets

​

191,446

​

​

​

​

​

​

​

​

170,113

​

​

​

​

​

​

Total assets

​

$

4,518,079

​

​

​

​

​

​

​

$

4,027,041

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Liabilities

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest-bearing demand

​

$

1,059,214

​

$

3,779

​

1.42

%

​

$

888,325

​

$

3,314

​

1.48

%

Savings

​

617,314

​

​

994

​

0.64

​

​

​

547,482

​

​

958

​

0.70

​

Money market

​

432,952

​

​

2,825

​

2.59

​

​

​

378,855

​

​

2,985

​

3.13

​

Time

​

961,054

​

​

8,821

​

3.64

​

​

​

807,180

​

​

8,917

​

4.39

​

Total interest bearing deposits

​

3,070,534

​

​

16,419

​

2.12

​

​

​

2,621,842

​

​

16,174

​

2.45

​

Borrowings

​

250,110

​

​

2,544

​

4.04

​

​

​

312,891

​

​

3,448

​

4.38

​

Total interest bearing liabilities

​

3,320,644

​

​

18,963

​

2.27

%

​

​

2,934,733

​

​

19,622

​

2.66

%

Non-interest bearing demand deposits

​

647,981

​

​

​

​

​

​

​

​

577,428

​

​

​

​

​

​

Other liabilities

​

46,962

​

​

​

​

​

​

​

​

60,731

​

​

​

​

​

​

Total liabilities

​

4,015,587

​

​

​

​

​

​

​

​

3,572,892

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total shareholders' equity

​

502,492

​

​

​

​

​

​

​

​

454,149

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total liabilities and shareholders' equity

​

$

4,518,079

​

​

​

​

​

​

​

$

4,027,041

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Net interest spread

​

​

​

​

​

​

3.09

%

​

​

​

​

​

​

​

2.58

%

Net interest margin

​

​

​

​

​

​

​

3.56

​

​

​

​

​

​

​

​

3.15

​

(1) The average balances of loans include non-accrual loans and unamortized deferred fees and costs.

(2) The average balance for securities available for sale is based on amortized cost.

(3) Fully taxable equivalent considers the impact of tax-advantaged securities and loans.

​

​

​

72

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Nine Months Ended September 30,

​

​

2025

​

2024

​

​

Average

​

Interest

​

Yield/

​

Average

​

Interest

​

Yield/

(in thousands, except ratios)

Balance

(3)​

Rate(3)

​

Balance

(3)​

Rate(3)

Assets

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest-earning deposits with other banks

​

$

46,853

​

$

1,514

​

4.32

%

​

$

39,174

​

​

1,685

​

5.75

%

Available-for-sale debt securities

​

​

605,464

​

​

17,795

​

3.93

​

​

​

579,639

​

​

17,324

​

3.99

​

FHLB stock

​

​

11,395

​

​

566

​

6.64

​

​

​

10,417

​

​

745

​

9.42

​

Loans:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial real estate

​

​

1,810,579

​

​

77,531

​

5.73

​

​

​

1,603,932

​

​

66,934

​

5.57

​

Commercial and industrial(3)

​

474,664

​

​

22,962

​

6.47

​

​

468,913

​

​

23,882

​

6.80

​

Residential

​

871,178

​

​

27,573

​

4.23

​

​

865,701

​

​

26,676

​

4.12

​

Consumer

​

112,195

​

​

5,910

​

7.04

​

​

98,492

​

​

5,323

​

7.22

​

Total loans (1)

​

3,268,616

​

133,976

​

5.48

​

​

3,037,038

​

122,815

5.40

​

Total earning assets

​

3,932,328

​

​

153,851

​

5.23

%

​

3,666,268

​

​

142,569

​

5.19

%

Cash and due from banks

​

​

33,247

​

​

​

​

​

​

​

​

32,188

​

​

​

​

​

​

Allowance for credit losses

​

​

(30,522)

​

​

​

​

​

​

​

​

(28,543)

​

​

​

​

​

​

Goodwill and other intangible assets

​

​

130,151

​

​

​

​

​

​

​

​

123,983

​

​

​

​

​

​

Other assets

​

​

179,540

​

​

​

​

​

​

​

​

181,816

​

​

​

​

​

​

Total assets

​

$

4,244,744

​

​

​

​

​

$

3,975,712

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Liabilities

​

​

​

​

​

​

Interest-bearing demand

​

$

969,162

​

$

10,203

​

1.41

%

​

$

882,884

​

​

9,276

​

1.40

%

Savings

​

573,759

​

​

2,911

​

0.68

​

​

547,436

​

​

2,696

​

0.66

​

Money market

​

412,263

​

​

8,248

​

2.67

​

​

375,216

​

​

8,560

​

3.05

​

Time

​

902,696

​

​

26,080

​

3.86

​

​

775,316

​

​

24,954

​

4.30

​

Total interest bearing deposits

​

2,857,880

​

47,442

2.22

​

​

2,580,852

​

45,486

2.35

​

Borrowings

​

259,086

​

​

8,845

​

4.56

​

​

326,648

​

​

10,983

​

4.49

​

Total interest bearing liabilities

​

3,116,966

​

56,287

2.41

%

​

2,907,500

​

56,469

2.59

%

Non-interest bearing demand deposits

​

589,894

​

​

​

561,063

​

​

Other liabilities

​

58,473

​

​

​

71,187

​

​

Total liabilities

​

3,765,333

​

​

​

3,539,750

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total shareholders' equity

​

479,411

​

​

​

435,962

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total liabilities and shareholders' equity

​

$

4,244,744

​

​

​

$

3,975,712

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Net interest spread

​

​

​

​

​

​

​

2.82

%

​

​

​

​

​

​

​

2.60

%

Net interest margin

​

​

3.32

​

​

​

3.14

​

(1) The average balances of loans include non-accrual loans and unamortized deferred fees and costs.

(2) The average balance for securities available for sale is based on amortized cost.

(3) Fully taxable equivalent considers the impact of tax-advantaged securities and loans.

​

73

Table of Contents

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED)

The following reconciliation table provides a more detailed analysis of these, and reconciliation for, each of non-GAAP financial measures:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

Calculations

2025

2024

​

​

2025

​

2024

Net income

​

$

8,855

​

$

12,193

​

$

25,158

​

$

32,544

​

Non-recurring items:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Loss (gain) on available-for-sale debt securities (6)

​

(41)

​

—

​

4,901

​

(50)

​

Gain on sale of premises and equipment, net

​

(206)

​

—

​

(113)

​

(263)

​

Provision on non-PCD acquired loans

​

​

​

​

3,954

​

​

—

​

​

3,954

​

​

—

​

Acquisition, conversion and other expenses

​

4,978

​

—

​

6,422

​

20

​

Income tax expense (1)

​

(2,141)

​

—

​

(3,738)

​

(61)

​

Total non-recurring items

​

​

​

​

6,544

​

​

—

​

​

11,426

​

​

(354)

​

Total adjusted income(2)

(A)

​

$

15,399

​

$

12,193

​

$

36,584

​

$

32,190

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Net interest income

(B)

​

$

36,959

​

$

28,958

​

$

95,861

​

$

84,772

​

Plus: Non-interest income

​

10,567

​

9,653

​

24,131

​

27,496

​

Total Revenue

​

47,526

​

38,611

​

119,992

​

112,268

​

Loss (gain) on available-for-sale debt securities (6)

​

(41)

​

—

​

4,901

​

(50)

​

Total adjusted revenue(2)

(C)

​

$

47,485

​

$

38,611

​

$

124,893

​

$

112,218

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total non-interest expense

​

$

32,739

​

$

24,772

​

$

83,928

​

$

72,102

​

Non-recurring expenses:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Gain on sale of premises and equipment, net

​

206

​

—

​

113

​

263

​

Acquisition, conversion and other expenses

​

(4,978)

​

—

​

(6,422)

​

(20)

​

Total non-recurring expenses

​

​

​

​

(4,772)

​

​

—

​

​

(6,309)

​

​

243

​

Adjusted non-interest expense(2)

(D)

​

$

27,967

​

$

24,772

​

$

77,619

​

$

72,345

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total revenue

​

​

​

​

47,526

​

​

38,611

​

​

119,992

​

​

112,268

​

Total non-interest expense

​

​

​

​

32,739

​

​

24,772

​

​

83,928

​

​

72,102

​

Pre-tax, pre-provision net revenue(2)

​

(S)

​

$

14,787

​

$

13,839

​

$

36,064

​

$

40,166

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Adjusted revenue(2)

​

​

​

​

47,485

​

​

38,611

​

​

124,893

​

​

112,218

​

Adjusted non-interest expense(2)

​

​

​

​

27,967

​

​

24,772

​

​

77,619

​

​

72,345

​

Adjusted pre-tax, pre-provision net revenue(2)

​

(U)

​

$

19,518

​

$

13,839

​

$

47,274

​

$

39,873

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

(in millions)

​

​

​

​

​

Average earning assets

(E)

​

$

4,179

​

$

3,728

​

$

3,932

​

$

3,666

​

Average assets

(F)

​

4,518

​

4,027

​

4,245

​

3,976

​

Average shareholders' equity

(G)

​

502

​

454

​

479

​

436

​

Average tangible shareholders' equity(2)(3)

(H)

​

363

​

330

​

349

​

312

​

Tangible shareholders' equity, period-end(2)(3)

(I)

​

362

​

336

​

362

​

336

​

Tangible assets, period-end(2)(3)

(J)

​

4,558

​

3,906

​

4,558

​

3,906

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

74

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended September 30,

Nine Months Ended September 30,

​

​

Calculations

​

2025

​

2024

​

​

2025

​

2024

(in thousands)

​

​

​

​

​

​

​

​

​

Common shares outstanding, period-end

(K)

​

16,689

​

15,268

​

​

16,689

​

​

15,268

​

Average diluted shares outstanding

(L)

​

16,284

​

15,326

​

​

15,685

​

​

15,292

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Adjusted earnings per share, diluted(2)

(A/L)

​

$

0.95

​

$

0.80

​

$

2.33

​

$

2.11

​

Tangible book value per share, period-end(2)

(I/K)

​

21.70

​

22.02

​

​

21.70

​

​

22.02

​

Total tangible shareholders' equity/total tangible assets(2)

(I/J)

​

7.94

​

8.61

​

​

7.94

​

​

8.61

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Performance ratios(4)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Return on assets

​

​

​

0.78

%

​

1.20

​

​

0.79

%

​

1.09

%

Adjusted return on assets(2)

​

(A/F)

​

​

1.35

​

​

1.20

​

​

1.15

​

​

1.08

​

Pre-tax, pre-provision return on assets(2)

​

(S/F)

​

​

1.30

​

​

1.37

​

​

1.14

​

​

1.35

​

Adjusted pre-tax, pre-provision return on assets(2)

​

(U/F)

​

​

1.71

​

​

1.37

​

​

1.49

​

​

1.34

​

Return on equity

​

​

​

6.99

​

​

10.68

​

​

7.02

​

​

9.97

​

Adjusted return on equity(2)

​

(A/G)

​

​

12.16

​

​

10.68

​

​

10.20

​

​

9.86

​

Return on tangible equity

​

​

​

​

10.07

​

​

14.90

​

​

9.90

​

​

14.16

​

Adjusted return on tangible equity(1)(2)

​

(A+Q)/H

​

​

17.23

​

​

14.90

​

​

14.27

​

​

14.01

​

Efficiency ratio(1)(2)(5)

​

(D-O-Q)/(C+N)

​

​

56.70

​

​

62.09

​

​

60.02

​

​

62.52

​

Net interest margin, fully taxable equivalent(2)

​

(B+P)/E

​

​

3.56

​

​

3.15

​

​

3.32

​

​

3.14

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Supplementary data (in thousands)

​

​

​

​

​

​

​

​

​

​

​

​

Taxable equivalent adjustment for efficiency ratio

​

(N)

​

$

738

​

$

686

​

$

2,161

​

$

1,737

​

Franchise taxes included in non-interest expense

​

(O)

​

​

158

​

​

138

​

​

430

​

​

399

​

Tax equivalent adjustment for net interest margin

​

(P)

​

​

574

​

​

550

​

​

1,702

​

​

1,327

​

Intangible amortization

​

(Q)

​

​

466

​

​

233

​

​

932

​

​

699

​

(1) Assumes a marginal tax rate of 24.26% in the first and second quarters of 2025, 23.82% in the second quarter 2024 and 24.01% for the first quarter 2024.

(2) Non-GAAP financial measure.

(3) Tangible shareholders' equity is computed by taking total shareholders' equity less the intangible assets at period-end. Tangible assets is computed by taking total assets less the intangible assets at period-end.

(4) All performance ratios are based on average balance sheet amounts, where applicable.

(5) Efficiency ratio is computed by dividing adjusted non-interest expense net of franchise taxes and intangible amortization divided by adjusted revenue on a fully taxable equivalent basis.

(6) The $4.9 million loss represents a $4.5 million loss on corporate debt securities and $549 thousand on a matured debt security.

​

​

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Table of Contents

ITEM 3.           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

​

Market Risk

Market risk is the risk of loss in a financial instrument arising from adverse changes in market rates/prices, such as interest rates, foreign currency exchange rates, commodity prices and equity prices. The most significant market risk that affects us is interest rate risk. Other types of market risk do not arise in the normal course of our business activities.

​

The responsibility for interest rate risk management oversight is the function of the Bank’s Asset and Liability Committee, or ALCO, chaired by the Bank’s Chief Financial Officer and composed of various members of the Bank’s senior management. ALCO meets regularly to review balance sheet structure, formulate strategies in light of current and expected economic conditions, adjust product prices as necessary, implement policy, monitor liquidity, and review performance against guidelines established to control exposure to the various types of inherent risk.

​

Interest Rate Risk

Interest rate risk can be defined as an exposure to movement in interest rates that could have an adverse impact on the Bank's net interest income. Interest rate risk arises from the imbalance in the re-pricing, maturity and/or cash flow characteristics of assets and liabilities. Management’s objectives are to measure, monitor and develop strategies in response to the interest rate risk profile inherent in the Bank’s balance sheet. The objectives in managing the Bank's balance sheet are to preserve the sensitivity of net interest income to actual or potential changes in interest rates, and to enhance profitability through strategies that promote sufficient reward for understood and controlled risk.

​

The Bank’s interest rate risk measurement and management techniques incorporate the re-pricing and cash flow attributes of balance sheet and off-balance sheet instruments as each relate to current and potential changes in interest rates. The level of interest rate risk, measured in terms of the potential future effect on net interest income, is determined through the use of modeling and other techniques under multiple interest rate scenarios. Interest rate risk is evaluated in depth on a quarterly basis and reviewed by ALCO and the Bank’s Board of Directors.

​

The Bank's Asset Liability Management Policy, approved annually by the Bank’s Board of Directors, establishes interest rate risk limits in terms of variability of net interest income under rising, flat, and decreasing rate scenarios. It is the role of the ALCO to evaluate the overall risk profile and to determine actions to maintain and achieve a posture consistent with policy guidelines.

​

Interest Rate Sensitivity Modeling:

The Bank utilizes an interest rate risk model widely recognized in the financial industry to monitor and measure interest rate risk. The model simulates the behavior of interest income and expense for all balance sheet and off-balance sheet instruments, under different interest rate scenarios together with a dynamic future balance sheet. Interest rate risk is measured in terms of potential changes in net interest income based upon shifts in the yield curve.

​

The interest rate risk sensitivity model requires that assets and liabilities be broken down into components as to fixed, variable, and adjustable interest rates, as well as other homogeneous groupings, which are segregated as to maturity and type of instrument. The model includes assumptions about how the balance sheet is likely to evolve through time and in different interest rate environments. The model uses contractual re-pricing dates for variable products, contractual maturities for fixed rate products, and product-specific assumptions for deposit accounts, such as money market accounts, that are subject to re-pricing based on current market conditions. Re-pricing margins are also determined for adjustable rate assets and incorporated in the model. Investment securities and borrowings with option provisions are examined on an individual basis in each rate environment to estimate the likelihood of exercise. Prepayment assumptions for mortgage loans are calibrated using specific Bank experience while mortgage-backed securities are developed from industry standard models of prepayment speeds, based upon similar coupon ranges and degree of seasoning. Cash flows and maturities are then determined, and for certain assets, prepayment assumptions are estimated under different interest rate scenarios. Interest income and interest expense are then simulated under several hypothetical interest rate conditions.

​

The simulation models a parallel and pro rata shift in rates over a 12-month period. Using this approach, we are able to produce simulation results that illustrate the effect that both a gradual “rate ramp” and a “rate shock” have on earnings expectations. Our net interest income sensitivity analysis reflects changes to net interest income assuming no balance sheet growth and a parallel shift in interest rates. All rate changes were “ramped” over the first 12-month period and then

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maintained at those levels over the remainder of the simulation horizon. Changes in net interest income based upon these simulations are measured against the flat interest rate scenario.

​

As of September 30, 2025, interest rate sensitivity modeling results indicate that the Bank’s balance sheet was asset sensitive over the one- and two-year horizons.

​

The following table presents the changes in sensitivities on net interest income for the periods ended September 30, 2025 and 2024:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Change in Interest Rates-Basis Points (Rate Ramp)

​

1 - 12 Months

​

​

13 - 24 Months

(in thousands, except ratios)

​

$ Change

​

% Change

​

​

$ Change

​

% Change

At September 30, 2025

​

​

​

​

-200

​

$

(9,288)

​

(5.8)

%

​

$

(20,006)

​

(12.0)

%

-100

​

​

(5,005)

​

(3.1)

​

​

​

(9,562)

​

(5.7)

​

+100

​

​

5,331

​

3.3

​

​

​

8,143

​

4.9

​

+200

​

9,314

​

5.8

​

​

​

15,905

​

9.5

​

At September 30, 2024

​

​

​

​

​

​

-200

​

$

(5,070)

​

(4.1)

%

​

$

(13,418)

​

(9.9)

%

-100

​

(2,875)

(2.3)

​

​

​

(6,555)

(4.8)

​

+100

​

​

2,899

​

2.4

​

​

​

5,873

​

4.3

​

+200

​

5,162

4.2

​

​

10,758

7.9

​

​

Assuming short-term and long-term interest rates decline 200 basis points from current levels (i.e., a parallel yield curve shift) over the next twelve months and the Bank’s balance sheet structure and size remain at current levels, management believes net interest income will deteriorate over the one year horizon while deteriorating further from that level over the two-year horizon.

​

Assuming short-term and long-term interest rates increase 200 basis points from current levels (i.e., a parallel yield curve shift) over the next twelve months and the Bank’s balance sheet structure and size remain at current levels, management believes net interest income will improve over the one year horizon while improving further from that level over the two-year horizon.

​

As compared to September 30, 2024, asset sensitivity has increased in both year one and year two.

​

The preceding sensitivity analysis does not represent a forecast and should not be relied upon as being indicative of expected operating results. These hypothetical estimates are based upon numerous assumptions including: the nature and timing of interest rate levels and yield curve shape, prepayment speeds on loans and securities, deposit rates, pricing decisions on loans and deposits, reinvestment or replacement of asset and liability cash flows, and renegotiated loan terms with borrowers. While assumptions are developed based upon current economic and local market conditions, we cannot make any assurances as to the predictive nature of these assumptions including how customer preferences or competitor influences might change.

​

As market conditions vary from those assumed in the sensitivity analysis, actual results may also differ due to: prepayment and refinancing levels deviating from those assumed; the impact of interest rate changes, caps or floors on adjustable rate assets; the potential effect of changing debt service levels on customers with adjustable rate loans; depositor early withdrawals and product preference changes; and other such variables. The sensitivity analysis also does not reflect additional actions that the Bank’s Senior Executive Team and Board of Directors might take in responding to or anticipating changes in interest rates, and the anticipated impact on the Bank’s net interest income.

​

ITEM 4.           CONTROLS AND PROCEDURES

​

(a) Disclosure controls and procedures.

​

Under the supervision and with the participation of our senior management, consisting of our principal executive officer and our principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of its

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Table of Contents

disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this Form 10-Q. Based on this evaluation, our management, including our principal executive officer and principal financial officer, concluded that as of September 30, 2025, our disclosure controls and procedures were effective to ensure that information required to be disclosed by the reports that we file under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Our disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by using our Exchange Act reports is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

(b) Changes in internal control over financial reporting.

​

There were no changes in our internal control over financial reporting that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

​

PART II.           OTHER INFORMATION

​

ITEM 1.             LEGAL PROCEEDINGS

​

We and our subsidiaries are parties to certain ordinary routine litigation incidental to the normal conduct of their respective businesses. Although the Company is not able to predict the outcome of such actions, at this time, in the opinion of management, the likelihood is remote that the impact of such proceedings, either individually or in the aggregate, would have a material adverse effect on the Company’s consolidated financial position as a whole. However, one or more unfavorable outcomes in any claim or litigation against us could have a material adverse effect for the period in which they are resolved. In addition, regardless of their merits or their ultimate outcomes, such matters are costly, divert management’s attention and may materially adversely affect our reputation, even if resolved in our favor.

​

ITEM 1A.          RISK FACTORS

​

Except as set forth below, there were no material changes to the risk factors discussed in Part I, Item 1A. “Risk Factors” of our Form 10-K.

​

ITEM 2.           UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

​

No unregistered equity securities were sold by the Company during the quarter ended September 30, 2025.

​

ITEM 3.           DEFAULTS UPON SENIOR SECURITIES

​

None.

​

ITEM 4.           MINE SAFETY DISCLOSURES

​

Not applicable.

​

ITEM 5.           OTHER INFORMATION

​

During the quarter ended September 30, 2025, no director or officer (as defined in Rule 16a-1(f) under the Exchange Act) of the Company adopted or terminated any "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" as such terms are defined in Item 408(a) of Regulation S-K.

​

​

​

​

​

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Table of Contents

​

ITEM 6.           EXHIBITS

​

​	​	​
​	​	​
​	​	​
31.1*	Certification of Chief Executive Officer under Rule 13a-14(a)/15d-14(a)	​
​	​	​
31.2*	Certification of Chief Financial Officer under Rule 13a-14(a)/15d-14(a)	​
​	​	​
32.1**	Certification of Chief Executive Officer under 18 U.S.C. Sec. 1350	​
​	​	​
32.2**	Certification of Chief Financial Officer under 18 U.S.C. Sec. 1350	​
​	​
101*	The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 is formatted in Inline Extensible Business Reporting Language (iXBRL): (i) Consolidated Statements of Income, (ii) the Consolidated Balance Sheets, (iii) the Consolidated Statements of Changes in Shareholders’ Equity, (iv) Consolidated Statements of Cash Flows and (v) Condensed Notes to the Consolidated Financial Statements
​	​
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

​

*Filed herewith

**Furnished herewith

​

​

79

Table of Contents

SIGNATURES

​

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

​

​	​	​
​	BAR HARBOR BANKSHARES
​	​
​	​	​
Dated: November 6, 2025	By:	/s/ Curtis C. Simard
​	​	Curtis C. Simard
​	​	President & Chief Executive Officer (Principal Executive Officer)
​	​
​	​
Dated: November 6, 2025	​	/s/ Josephine Iannelli
​	​	Josephine Iannelli
​	​	Executive Vice President & Chief Financial Officer (Principal Financial and Accounting Officer)

​

​

​

80

FAQ

What were Bar Harbor Bankshares (BHB) total assets and deposits as of Q3 2025?

Total assets were $4.72 billion and deposits were $3.95 billion at September 30, 2025.

How did BHB’s Q3 2025 earnings and EPS compare year over year?

Q3 net income was $8.86 million and diluted EPS was $0.54, down from $12.19 million and $0.80 in Q3 2024.

What drove the increase in BHB’s non-interest expense in Q3 2025?

Non-interest expense rose to $32.74 million, including $4.98 million of acquisition, conversion and other expenses.

What are the key terms of BHB’s acquisition of Guaranty Bancorp, Inc.?

Each Guaranty share converted into 1.85 BHB shares; BHB issued 1,350,464 shares for total consideration of $39.22 million and recorded $22.3 million of goodwill.

How did net interest income and provisions trend for BHB in Q3 2025?

Q3 net interest income was $36.96 million; provision for credit losses on loans was $3.75 million.

How many shares of BHB were outstanding after the quarter?

BHB had 16,688,573 common shares outstanding as of November 3, 2025.

What cash did BHB acquire in the Guaranty transaction?

BHB reported cash acquired, net of cash consideration paid of $77.52 million.